US pay­rolls re­port boosts dol­lar, stocks, bond yields

Kuwait Times - - BUSINESS -

The US dol­lar and bond yields climbed while stocks on Wall St rose mod­estly on Fri­day, fol­low­ing a stronger-than-ex­pected US jobs re­port, which also showed a pickup in wage growth for the world’s largest econ­omy.

The US Labor Depart­ment said non­farm pay­rolls rose by 209,000 jobs last month. June’s em­ploy­ment gain was re­vised up to 231,000 from a pre­vi­ously re­ported 222,000. The un­em­ploy­ment rate fell to 4.3 per­cent while av­er­age hourly earn­ings rose 0.3 per­cent, the largest in­crease in five months.

The re­port may pave the way for the US Fed­eral Re­serve to start shrink­ing its $4.2 tril­lion bal­ance sheet. US stocks re­treated from early highs to keep a gauge of world stocks near the un­changed mark, although the in­dex re­mained on track for its fourth straight week of gains. The re­port also bol­stered the dol­lar from 15-month lows against a bas­ket of ma­jor cur­ren­cies.

“It re­ally re­in­forces a lot of the themes we’ve seen - which is you will con­tinue to see solid, steady growth that is not knock­ing the cover off the ball, led mainly by the labor mar­ket, which is healthy, and con­sump­tion, which should con­tinue,” said Sameer Sa­mana, global quan­ti­ta­tive an­a­lyst at Wells Fargo In­vest­ment In­sti­tute in St. Louis.

“For fi­nan­cial mar­kets, for right now, it’s a good com­bi­na­tion - good growth that is not lead­ing to in­fla­tion.” The Dow Jones In­dus­trial Av­er­age rose 66.71 points, or 0.3 per­cent, to 22,092.81, the S&P 500 gained 4.67 points, or 0.19 per­cent, to 2,476.83 and the Nas­daq Com­pos­ite added 11.22 points, or 0.18 per­cent, to 6,351.56.

Fi­nan­cials, up 0.72 per­cent, were the best per­form­ing S&P sec­tor, but gains on the broader S&P 500 were curbed by a de­cline in health­care names, and a 13.83 per­cent drop in Vi­a­com.

The pan-Euro­pean FTSEurofirst 300 in­dex rose 0.99 per­cent and MSCI’s gauge of stocks across the globe gained 0.04 per­cent. The FTSEurofirst notched its best day since July 12 while the Dow scored its ninth straight day of gains, and eighth straight clos­ing record. The green­back was on pace for its big­gest daily per­cent­age gain since Jan 6 and its first weekly gain in four, buoyed by the jobs re­port and com­ments from Na­tional Eco­nomic Coun­cil direc­tor Gary Cohn that the U.S. ad­min­is­tra­tion is work­ing on a tax plan that would bring cor­po­rate profits back to the United States.

The dol­lar had been weak­en­ing on po­lit­i­cal un­cer­tainty in Wash­ing­ton, in­clud­ing news on Thurs­day that a grand jury had is­sued sub­poe­nas re­lat­ing to an in­ves­ti­ga­tion of sus­pected Rus­sian med­dling in the 2016 US elec­tion. The dol­lar in­dex rose 0.66 per­cent, with the euro down 0.72 per­cent to $1.1782.

In bond mar­kets, traders were bet­ting the pay­rolls fig­ures would cause the Fed to start to trim its bal­ance sheet next month while a rate hike later this year could not be ruled out.

Bench­mark 10-year US Trea­sury notes fell 10/32 in price to yield 2.2637 per­cent, from 2.228 per­cent late on Thurs­day. Oil prices rose on Fri­day as the jobs re­port bol­stered hopes for ris­ing de­mand but de­clined on the week, weighed down by strong US out­put and ris­ing OPEC ex­ports. US crude set­tled up 1.1 per­cent at $49.58 per bar­rel and Brent set­tled up 0.8 per­cent at $52.42.

—AP

NEW YORK: A Wall Street sign out­side the New York Stock Ex­change. US stocks rose slightly on Fri­day af­ter the gov­ern­ment re­ports stronger-thanex­pected job growth for the month of July.

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