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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; Dow Jones shaken by weak jobs data

Weak jobs data roiled financial markets, sending the Dow Jones Industrial Average to its biggest drop in a month and helping drag crude oil below $100 a barrel for the first time since February.

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


HEADLINES
 
- Weak jobs data roiled financial markets, sending the Dow Jones Industrial Average to its biggest drop in a month and helping drag crude oil below $100 a barrel for the first time since February.
 
- European stocks were lower Friday after data showed that Spain and Italy's services sectors contracted in April, causing further anxiety about the state of the euro-zone's economy.
 
- Asian stock markets ended lower Friday, with a sharp overnight drop in crude oil hitting energy plays, while sentiment remained cautious ahead of the closely watched U.S. nonfarm payrolls report.
 
- Oil prices tumbled to their lowest level in three months, blowing through $100 a barrel, in a rout spurred by a weaker-than-expected reading on U.S. employment in April.


US MARKETS

Weak jobs data roiled financial markets, sending the Dow Jones Industrial Average to its biggest drop in a month and helping drag crude oil below $100 a barrel for the first time since February.
 
The Dow lost 168.32 points, or 1.3%, to 13038.27. And, for the first time this year, all 30 Dow components fell. Treasurys rallied and gold rose.
 
The morning jobs report, showing lackluster U.S. hiring, reinforced concerns that the U.S. economic recovery is stalling. Still, some worry that the economy isn't weak enough to garner any additional help from the Federal Reserve. At the same time, many stock investors said they are concerned that elections over the weekend in Greece and France could generate more upheaval in the region.
 
The Dow is up 6.7% this year, having ended largely unchanged in April. In the four trading days in May, the Dow is down 1.3%.
 
In corporate news: Cisco Systems shed 60 cents, or 3%, to $19.12. Energy-sector stocks fell hard, including Chevron, down 2.27, or 2.1%, to 103.72, as oil prices fell. Bank of America led all Dow components lower, falling 26 cents, or 3.3%, to 7.74.


EUROPEAN MARKETS
 
European stocks were lower Friday after data showed that Spain and Italy's services sectors contracted in April, causing further anxiety about the state of the euro-zone's economy. Investors were also awaiting a key U.S. employment report that is expected to confirm that the recovery of the labor market remains sluggish.
 
The benchmark Stoxx 600 Index was recently down 0.7% at 255.83. London's FTSE 100 Index was 0.7% lower at 5729.03, Frankfurt's DAX was down 0.7% at 6646.73 and Paris's CAC 40 Index was 0.8% lower at 3197.40. Spain's benchmark IBEX-35 was faring significantly better than its peers, however, up 1.2% at 6934.50. Traders attributed the move higher to a technical bounce, following recent heavy losses. Spanish banks posted healthy gains, with Banco Bilbao Vizcaya Argentaria up 2.6% and Banco Santander 2% higher.


ASIAN MARKETS
 
Asian stock markets ended lower Friday, with a sharp overnight drop in crude oil hitting energy plays, while sentiment remained cautious ahead of the closely watched U.S. nonfarm payrolls report.
 
South Korea's Kospi dropped 0.3%, while both Australia's S&P/ASX 200 index and Hong Kong's Hang Seng Index lost 0.8% each. The Shanghai Composite Index moved in and out of positive territory before settling 0.5% higher, while Japanese markets remained closed for a holiday.


AUSTRALIAN MARKETS
 
Australian shares also benefited early in the week from the Reserve Bank of Australia’s decision to cut rates by half a percentage point to 3.75 per cent, more than many economists were expecting.
 
The Australian dollar, however, lost ground, losing about 1.6 per cent over the week but was unchanged at $US1.026 on Friday. The local currency came off its $US1.04 highs early in the week after the central bank cut rates by more than expected on Tuesday.
 
Among the big four Westpac Banking Corp was steady on Friday at $22.91, National Australia Bank was 6¢ lower at $25.14, Commonwealth Bank of Australia also lost 6¢ at $52.62 and Australia and New Zealand Banking Group finished 20¢ off at $23.44.


OIL
 
Oil prices tumbled to their lowest level in three months, blowing through $100 a barrel, in a rout spurred by a weaker-than-expected reading on U.S. employment in April.
 
Light, sweet crude for June delivery fell $4.05, or 3.9%, to settle at $98.49 a barrel on the New York Mercantile Exchange, the lowest finish for the benchmark since Feb. 7. The slide marks the biggest one-day dollar and percentage drop since December.


Andrew Thain can be contacted by email; CLICK HERE.

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