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US shares head lower as non-farm payrolls smash expectations

Last updated: 01:46 07 Mar 2015 AEDT, First published: 02:46 07 Mar 2015 AEDT

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Shares on Wall Street started on the back foot as the key jobs report came in far better than expected.

Analysts had expected the February non-farm job creation number to be 235,000 across the pond but it smashed that to stand at 295,000 new jobs.

The big figure appeared to put markets in a downward spin, with FTSE falling 29 points, while in the US the benchmark Dow lost 81 points to go to 18,057, while the broader S&P500 index lost eight to 2,093.

What may be causing the investor nerves is that the strong jobs number leads to more likelihood of an interest rate rise by the central bank this June.

There were positive noises on unemployment too across the pond, with the rate falling to 5.5%, from 5.7% in the previous month.

Chris Beauchamp, at IG, reckons, however, it may be too early to talk of  a rise in interest rates due to other factors in the jobs report. 

"Janet Yellen is content to keep rates on hold for at least the next two Fed meetings and today’s report will justify her cautious stance, but there will be some Fed members who will be pressing for a rate increase in June.

"US central bankers may be divided over when rates should rise, but the markets are certainly pointing to an increase sooner rather than later."

On the corporate front, big losers were Duke Energy, which shed 2.63% to US$75.55 and Coca Cola, which lost 1.18% to US$41.91.

Sports shoe brand Foot Locker gained ground as sales in 2014 surged 9.9% to US$7.15bn -  a record for the firm.

EPS was US$3.58, a jump of 25% over the $2.87 per share in 2013.

Back in London, weighing on Footsie were big cap miners, as fears on China growth persist and a gold price drop.

Fresnillo (LON:FRES) lost 4.14% to go to 706p, makig it the second biggest faller after Randgold, which plunged 4.78% to 4,605p.

West Africa focused mining firm Bellzone Mining (LON:BZM) was London's biggest gainer, soaring an eyewatering 557% to 3.45p as shares resumed trading again on AIM after securing financing for its working capital.

Bellzone requested shares were suspended last September after a dispute over a loan to keep the group afloat.

The financing is from major shareholder China Sonagol International, which has agreed to extend its US$4 million loan facility to Bellzone and increases the total available to US$10 million.

Also up was tour operator Thomas Cook (LON:TCG), which added 23.38% to 148.8p as it revealed it is to push deeper into the European hotel and tourism market after signing a strategic partnership deal with Chinese group Fosun International.

Fosun has taken a 5% stake in the travel group, at a cost of £92mln, and said it may double this to 10% over time.

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