Friday, 5 August 2011
Volatile Markets Look For Direction After Upbeat Jobs Report
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Markets retreated from an early rally as investors remained unconvinced that a single promising jobs report signaled a turnaround in the U.S. economy's declining fortunes.
The jobs data showed employers added 117,000 jobs last month, topping forecasts for a 75,000 increase. The report provided a brief respite for traders who had been bombarded by disappointing economic data in recent weeks.
But in most markets, steep post-data gains evaporated almost as quickly. The Dow Jones Industrial Average was recently down 0.1% at 11369 after jumping to 11555 after the opening. Oil prices were down 30 cents at $86.33 a barrel, down from an intraday peak of $88.32 hit immediately after the jobs data.
Still, the employment report helped steady markets that had seen some of their biggest declines since the 2008 financial crisis on Thursday. With investors fearing a second recession, the Dow index had tumbled 512 points in the last session, its biggest point drop since Dec. 1, 2008 and plunging into the red for the year. But one report doesn't lift the worries the world's largest economy could be stalling at a time when Europe is still facing major debt problems and growth concerns of its own.
"The July payroll employment report may temper some of the panic that set in earlier this week," said Sophia Koropeckyj, managing director and senior economist at Moody's Analytics. "The report suggests a rocky recovery is still occurring."
The dollar gained against safe havens and fell against riskier currencies immediately following the report, but those moves have been unable to hold.
The dollar hit a fresh record low against the Swiss franc, falling as low as CHF0.7578. It had been as high as CHF0.7720 after the jobs data.
The greenback was at Y78.45 from Y78.31 just after the report was released. It had jumped above Y79 following the report.
"The market is trying to figure out which way to go," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. Esiner said that while the jobs report topped modest forecasts, it still wasn't particularly strong.
Safe-haven assets saw a slight bump, with December gold futures up 0.4% at $1,666 a troy ounce.
"All the long term problems that droves us down here are not going away anytime soon," said Brian Dolan, chief currency strategist at Forex.com in Bedminster, N.J.
-By Stephen L. Bernard, Dow Jones Newswires; 212-416-4528; email@example.com
--Brendan Conway, Min Zeng, Cynthia Lin, Steven Russolillo, Dan Strumpf, Tatyana Shumsky and Katy Burne contributed to this report.
Posted by James at 18:19