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E.L. & C. Baillieu Stockbroking Ltd is a Participating Organisation of the Australian Stock Exchange Limited. The firm commenced business in 1889.  Since its inception, E.L. & C. Baillieu Stockbroking Ltd has encouraged and assisted private investors.

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E.L. & C. Baillieu Morning Wrap; European stock markets close slightly higher

European stock markets ended slightly higher but banking shares slid after European Central Bank President Mario Draghi offered no hints of further monetary easing for the troubled euro zone

Author: E.L. & C. Baillieu Stockbroking - by Andrew Thain

HEADLINES

- U.S. stocks fell a second straight day, as a disappointing reading on services-sector activity tempered sentiment on the eve of the government's employment report.

- European stock markets ended slightly higher but banking shares slid after European Central Bank President Mario Draghi offered no hints of further monetary easing for the troubled euro zone and said the growth
that politicians are so keen to promote is in their own hands.

- Natural-gas futures rose 3.9% after U.S. gas inventories posted a smaller build than normal for this time of year, another signal of higher demand amid slowing gas production.

- Gold futures fell Thursday to their lowest level in nearly two weeks in a downbeat session for most commodities and after a report showed fewer U.S. residents applying for unemployment benefits.

US MARKETS

U.S. stocks fell a second straight day, as a disappointing reading on services-sector activity tempered sentiment on the eve of the government's employment report.

The Dow Jones Industrial Average fell 61.98 points, or 0.5%, to 13206.59. The Standard Poor's 500-stock index slid 10.74 points, or 0.8%, to 1391.57.Prudential fell 10%, leading the index lower, after reporting operating earnings that missed analysts' forecasts. The percent drop was the insurer's biggest since August.

Economists expect the closely watched nonfarm payrolls report Friday to show that 168,000 jobs were added last month, with the unemployment rate holding steady at 8.2%. The report follows a worse-than-expected private-sector jobs report Wednesday that sent stocks lower.

Thursday, the Labor Department reported the number of U.S. workers filing new applications for unemployment benefits fell to the lowest level in a month, a hopeful sign for a labor market that has shown signs of weakening.

Initial jobless claims fell 27,000 to a seasonally adjusted 365,000. Economists expected 378,000, according to a Dow Jones Newswires poll. The prior week's reading was revised higher.

EUROPEAN MARKETS

European stock markets ended slightly higher but banking shares slid after European Central Bank President Mario Draghi offered no hints of further monetary easing for the troubled euro zone and said the growth that politicians are so keen to promote is in their own hands.

The Stoxx Europe 600 index closed 0.1% higher at 257.53, after trading up 1% earlier in the session. Germany's DAX index lost 0.2% to 6694.44, while France's CAC-40 index finished 0.1% lower at 3223.36. The U.K.'s FTSE 100 index ended up 0.2% to 5766.55.

ASIAN MARKETS

Indian shares gave up early gains to end a tad down Wednesday, as weak local vehicles sales by Tata Motors and a widening trade deficit and weaker currency spooked investor sentiment.

Asian markets generally fell, with Hong Kong's Hang Seng down 0.3% and Australia's S&P/ASX 200 off 0.2%. China's Shanghai Composite edged up 0.1%.

Car and commercial vehicles maker Tata Motors fell 3.8% to 304.65 rupees after its local sales in April fell 5% to 57,305 units. Auto maker Maruti Suzuki India closed 2.8% down at 1,332 rupees.

AUSTRALIAN MARKETS

Investor confidence has taken another knock after further evidence that Europe is struggling, while questions are being asked about the stability of the United States labour market and its impact on a global recovery.

Shares in Commonwealth Bank of Australia remained steady after it became the second of the big four banks to pass on part of the RBA’s rate cut of half a percentage point. CBA cut its variable mortgage rate by 0.4 of a percentage point.

The biggest mover by index points on Thursday was Australia and New Zealand Banking Group, which fell 16¢ to $23.64. just a day after the bank released first-half results which were broadly in line with expectations.

OIL

Natural gas futures rose 3.9% after U.S. gas inventories posted a smaller build than normal for this time of year, another signal of higher demand amid slowing gas production.

Natural gas for June delivery rose 8.7 cents to settle at $2.340 a million British thermal units on the New York Mercantile Exchange, extending the rally that has carried gas futures 23% higher from a decade low of $1.907/MMBtu. Prices have risen for seven of the last 10 sessions.

METALS

Gold futures fell Thursday to their lowest level in nearly two weeks in a downbeat session for most commodities and after a report showed fewer U.S. residents applying for unemployment benefits.

Gold for June delivery dropped $19.20, or 1.2%, to settle at $1,634.80 an ounce on the Comex division of the New York Mercantile Exchange. That was gold’s lowest since April 23, and the fourth session in a row that gold has ended lower.

Andrew Thain can be contacted by email; CLICK HERE.

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