By Carla Mozee, MarketWatch
German DAX closes at lowest level since November 2014; euro
pulls back from $1.12
European stock markets ended firmly lower on Friday after data
showed fewer jobs were added to the U.S. economy in January than
economists had expected, feeding into fears that growth in the
world's largest economy is slowing and pushing down U.S.
stocks.
The Stoxx Europe 600 closed down 0.9% at 325.90, its
second-lowest close of the year. For the week, the pan-European
benchmark dropped 4.8%, its largest weekly decline since the week
ended Jan. 8.
The U.S. Labor Department's employment report
(http://www.marketwatch.com/story/us-jobs-growth-slows-to-151000-as-jobless-rate-hits-eight-year-low-2016-02-05)
showed nonfarm payrolls rose by a smaller-than-anticipated 151,000
jobs. But the unemployment rate dropped to an eight-year low of
4.9% and average hourly wages surged 0.5% to $25.39 an hour.
The dollar perked up after the report, pushing the euro to an
intraday low of $1.1109, according to FactSet. Late Thursday, the
euro fetched $1.1211, crossing above $1.12 for the first time since
October.
U.S. stocks dropped
(http://www.marketwatch.com/story/wall-street-gets-the-jitters-ahead-of-key-jobs-data-2016-02-05),
with the Dow Jones Industrial Average losing more than 200 points
at one point.
Read:Chicken-little investors, please read the jobs report
(http://www.marketwatch.com/story/chicken-little-investors-please-read-the-jobs-report-2016-02-05)
"An important and missing ingredient during 2015 was stronger
wage growth so today's upside wage surprise will be positive,"
Nawaz Ali, a London-based currency strategist at Western Union
Business Solutions, wrote in a note.
After the jobs data, "the market will want to know if the two
Fed meetings in March and April are still 'live' -- meaning
[Federal Reserve] Chair Yellen still sees a chance of a second U.S.
rate hike," which would be positive for the dollar, said Ali. If
"current market expectations are right, there won't be another hike
for a while yet," a negative for the greenback.
Read:Fed likely to stay put in March despite decent jobs report
(http://www.marketwatch.com/story/fed-on-hold-in-march-despite-decent-jobs-report-2016-02-05)
Dollar-sensitive commodities such as oil and gold fell as the dollar gained strength.
But most European oil and gas shares managed to hold gains
Friday, with Spanish oil producer Repsol SA (REPYY) and Tullow Oil
PLC (TLW.LN) up 3.3% and 4.3%, respectively.
Mining shares were mixed. Iron ore producer Rio Tinto PLC (RIO)
(RIO) (RIO) fell, but platinum producer Anglo American PLC (AAL.LN)
surged 11%.
The dollar, however, is still in line for a weekly loss after a
string of weaker-than-anticipated economic reports. A stronger euro
tends to pressure European exporters, and that worrisome sentiment
was expressed on Germany's DAX , which slid 5.2% over the week. The
index on Friday but closed down 1.1% at 9,286.23, its lowest close
since November 2014.
German equity funds saw their biggest outflow since mid-November
during the week ended Feb. 3, fund tracker EPFR Global said
Friday.
In London, the FTSE 100 also ended lower
(http://www.marketwatch.com/story/uk-stocks-wobble-as-miners-lose-hold-on-gains-2016-02-05),
down 0.9% to 5,848.06.
Movers: Banking shares have been the source of much of this
week's pain after the release of financial updates, although BNP
Paribas SA (BNP.FR) shares bucked the losing trend Friday and rose
1.5%. The French lender's fourth-quarter profit was halved, hit by
a write-down on its Italian bank. But revenue increased 3% to 10.45
billion euros. Nomura analyst Jon Peace described the results as
"reassuringly in line" with expectations
(http://www.marketwatch.com/story/bnp-paribas-profit-halved-by-italian-write-down-2016-02-05-34851739).
France's CAC 40 erased 0.7% to 4,200.67, and logged a 4.9%
weekly decline.
Near the bottom of the Stoxx 600 was ArcelorMittal SA (MT) (MT).
Shares dropped 5.5% as the world's largest steelmaker said it would
issue $3 billion worth of shares
(http://www.marketwatch.com/story/arcelormittal-to-issue-3-billion-in-shares-2016-02-05)
to strengthen its balance sheet. The move is aimed to help the
company deal with falling steel prices and global oversupply.
Read:China lays out plan to reduce steel capacity
(http://www.marketwatch.com/story/china-lays-out-plan-to-reduce-steel-capacity-2016-02-04)
Investing Insights: A global markets survival guide
If you'll be in London on Tuesday, Feb. 23, you're invited to
join us for an evening of cocktails and conversation on the topics
of shifting monetary policy, growth, currencies, and the outlook
for investing opportunities and risks in European and global
markets.
Our panelists for the evening will include MarketWatch Personal
Finance and Investing Columnist Robert Powell; Mark Hulbert, Editor
of the Hulbert Financial Digest; and Virginie Maisonneuve, Founder
and Managing Director of Maisonneuve Global Advisors.
The event is free and open to the public, but reservations are
required. For more information or to RSVP for the event, please
email (MarketWatchevent@wsj.com)
(END) Dow Jones Newswires
February 05, 2016 12:24 ET (17:24 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024