While you were sleeping: Labour lifts

While you were sleeping: Labour lifts

March 8 (BusinessDesk) – Better-than-expected American labour data propelled the Dow Jones Industrial Average to another intraday record high.

Jobless claims posted a surprise drop to 340,000 last week, Labor Department data showed, while the four-week average fell to the lowest level in five years.

“There’s an underlying element of support for the labour market and it’s really driven by housing and potentially construction finally coming back,” Robert Lutts, chief investment officer of Cabot Money Management in Boston, told Bloomberg News.

A report due tomorrow is expected to show nonfarm payrolls increased by 163,000 in February, according to economists in a Bloomberg survey, while economists polled by Reuters predict an increase of 160,000 jobs.

In afternoon trading in New York, the Dow Jones Industrial Average gained 0.29 percent to 14,337.88. Earlier in the session it rose as high as 14,354.69. The Standard & Poor's 500 Index advanced 0.19, while the Nasdaq Composite Index rose 0.24 percent.

US household debt increased at a 2.5 percent annual rate in the final quarter of 2012, according to the Federal Reserve in its quarterly Flow of Funds report.

Even so, not all data indicated strength. The US trade gap widened to US$44.45 billion in January, compared with a deficit of US$38.14 billion in December.

In Europe, the Stoxx 600 Index ended the session with a 0.1 percent slide on the previous close. Key markets however moved higher. The UK’s FTSE 100 Index gained 0.2 percent, Germany’s DAX rose 0.3 percent, while France’s CAC 40 climbed 0.5 percent.

The European Central Bank downgraded its economic forecast for the euro zone, now predicting a contraction of 0.5 percent in 2013, instead of the 0.3 percent contraction it forecast three months ago.

Still, the central bank kept its key interest rate steady as ECB President Mario Draghi reiterated his expectations of a recovery later in the year.

"Later in 2013 economic activity should gradually recover, supported by a strengthening global backdrop and our accommodative monetary policy stance,” Draghi told reporters in Frankfurt.

The euro enjoyed a boost from Draghi's confidence, strengthening 1.1 percent against the greenback and climbing 1.9 percent against the yen.

Separately, Bank of England policy makers decided to keep both the interest rate and its bond-purchase program at current levels.

In Germany, factory orders unexpectedly dropped in January, another indication of the ongoing drag the euro-zone troubles pose on the region's biggest economy.

(BusinessDesk)

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