Australia Markets open in 8 hrs 34 mins

US stocks shrug off weak August jobs data on mixed day for markets

·3-min read
The US economy created last month less than a third of the jobs expected, a major disappointment that could see the Fed hold back on removing stimulus support for the US economy (AFP/Olivier DOULIERY)

Wall Street stocks shrugged off a disappointing August US jobs report Friday that could delay the phasing down of monetary stimulus, while Tokyo rose on stimulus hopes after Japan's prime minister signaled his exit.

The United States gained only 235,000 jobs last month, according to government data released on Friday, far below expectations and a possible harbinger that the Delta variant is harming the US economic recovery.

But US stocks had a muted reaction to the report, with the Nasdaq edging to third straight record.

The figure is likely to encourage the US Federal Reserve to hold off from beginning to wind down its stimulus to support the economy at its September meeting.

"Time will tell if this is just a speed bump for America's rapidly accelerating economy, or if job creation has genuinely veered off course," said Jay Mawji, managing director of global liquidity provider IX Prime.

"But the markets are focused on the Fed’s next move. Barring any surprises over the next couple of weeks, the Fed is likely to keep rates at their current low level, sending the dollar into the weekend deep in the red," he added.

Earlier, European stocks gave up early gains to finish lower.

Fed boss Jerome Powell last week indicated that the central bank would take it easy in winding down the financial support -- and would be even more careful in lifting interest rates -- but offered no timetable for doing so.

"If Fed Chair Powell was looking for cover to make his case for why the Fed should hold off on announcing a tapering plan at the September 21-22 FOMC meeting, he found it in today's release of the August Employment Situation Report," said analyst Patrick J. O'Hare at Briefing.com.

In Asia, Tokyo stocks jumped more than two percent after Yoshihide Suga said he will not run for his ruling party's leadership, effectively ending his tenure as premier and throwing wide open the race to succeed him.

Analysts said the gains were fueled by hopes the next leader will push for a huge spending package to support the virus-hit economy. Suga's rival in the race for the post last year, Fumio Kishida, on Thursday called for tens of trillions of yen in spending to battle the coronavirus pandemic.

Sydney, Seoul, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta also rose.

But Hong Kong and Shanghai fell, with tech firms hurt by Alibaba's donation of more than $15 billion (12.6 billion euros) to charitable causes after Chinese President Xi Jinping called for the rich to do more to tackle inequality.

Alibaba, which has been a key target of Beijing's drive against high-flying tech firms, said it would put the money to "common prosperity" schemes.

- Key figures around 2040 GMT -

New York - Dow: DOWN 0.2 percent at 35,369.09 (close)

New York - S&P 500: DOWN less than 0.1 percent at 4,535.43 (close)

New York - Nasdaq: UP 0.2 percent at 15,363.52 (close)

London - FTSE 100: DOWN 0.4 percent at 7,138.35 (close)

Frankfurt - DAX 30: DOWN 0.4 percent at 15,781.20 (close)

Paris - CAC 40: DOWN 1.1 percent at 6,689.99 (close)

EURO STOXX 50: DOWN 0.7 percent at 4,201.98 (close)

Tokyo - Nikkei 225: UP 2.1 percent at 29,128.11 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 25,901.99 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,581.73 (close)

Euro/dollar: UP at $1.1879 from $1.1875

Pound/dollar: UP at $1.3862 from $1.3833

Euro/pound: DOWN at 85.67 pence from 85.85 pence

Dollar/yen: DOWN at 109.73 yen from 109.94 yen

West Texas Intermediate: DOWN 1.0 percent at $69.29 per barrel

Brent North Sea crude: DOWN 0.6 percent at $72.61 per barrel

burs-jmb/ch

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting