While you were sleeping: Stocks steady before jobs data

(BusinessDesk) April 1 - Equities on Wall Street were little changed as investors were holding out for the U.S. payrolls data, due on Friday, to confirm whether a sustained recovery in the world’s largest economy was on track.

The number of applications for unemployment insurance payments in the U.S. fell by 6,000 to 388,000 in the week ended March 26, a one-month low, Labor Department figures showed today in Washington.

While the drop in claims for unemployment benefits was less than expected, the decline was still an encouraging sign of recovery in the labour market.

"Claims are going in the right direction, and that gives us hope that we'll see a good employment number tomorrow," Jerry Harris, president of asset management at Sterne Agee in Birmingham, Alabama told Reuters.

"Today will be quiet as people have already established their positions in preparation for a report that is expected to be positive tomorrow," Harris said.

Economists polled by Bloomberg News expect tomorrow’s Labor Department report to show that companies added 210,000 workers to payrolls in March after a 222,000 gain in February, while the unemployment rate held at 8.9%.

In midday trading on Wall Street, the Dow Jones Industrial Average edged 0.06% lower, the Standard & Poor’s 500 Index slipped 0.11% and the Nasdaq Composite Index fell 0.14%. The S&P 500 has gained 5.6% in the quarter, based on Wednesday's close.

In Europe, the benchmark Stoxx 600 dropped 1%, declining for the first session in seven.

Irish regulators told the country’s four largest lenders to raise 24 billion euros (US$34 billion) in capital after a series of stress tests, compounding declines in bank stocks at the end of the trading day.

Oil prices jumped, putting Brent on track for its second-largest quarterly gain, amid returning optimism about the economic outlook, despite turmoil in the Middle East and the disasters in Japan.

"The twin shocks of Libya and Japan have broadly been priced in, and the volatility can be attributed to oil returning to its pattern of moving on bullish economic news," Simon Wardell, an oil analyst at Global Insight, told Reuters.

Brent crude for May was up US$2 to US$117.13 barrel at 1359 GMT, heading for a 23% gain this quarter.

U.S. crude was up US$1.96 to US$106.23, heading for a quarterly advance of almost 16%.

Meanwhile, investors were confident in Japan’s ability to recover from its major disasters, barely changing their equity exposure to the stricken country, according to Reuters.

Reuters asset allocation surveys of 54 leading investment houses in the U.S., Europe excluding the UK, Britain and Japan showed a general step back from riskier assets during a month dominated by disasters, turmoil in the Arab world, prospects of higher interest rates and the rising oil price. Yet average allocations across the four regions to Japanese equities only fell to 12.6% from 12.7%.

"The market was relatively stable despite many uncertainties," Yoshinori Nagano, a senior strategist at Daiwa Asset Management, told Reuters. "There are expectations that investment conditions will improve potentially."

Gold rose, putting the precious metal on track for a tenth consecutive quarter of gains.

Spot gold was bid at US$1,431.70 an ounce at 1203 GMT, against US$1,423.38 late in New York on Wednesday. U.S. gold futures for April delivery rose US$9.40 to US$1,433.20.

"Until we see a substantial decrease in liquidity or a rise in real interest rates, you would look for an upward trend, and all these other factors like the euro zone debt and Middle East, North Africa issues are also a short-term support," Standard Bank analyst Walter de Wet told Reuters.

(BusinessDesk)

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