Jobs Report, Apple Results Buoy Stocks
November 03 2017 - 9:23AM
Dow Jones News
By David Hodari and Riva Gold
-- US stock futures rise slightly after jobs report
-- Apple jumps in premarket trading
-- Spanish stocks drop on political tensions
U.S. stock futures ticked up slightly after the October jobs
report, even as the pace of hiring proved slower than anticipated
and wages failed to break out.
Futures pointed to a 0.2% rise in the Dow Jones Industrial
Average, up from a 0.1% gain ahead of the report. Nasdaq-100
futures rose 0.6%, as technology companies jumped after Apple
reported better-than-expected results. Apple said late Thursday
that it delivered its best quarterly growth in two years.
Apple shares jumped 4.3% in premarket trading after climbing 45%
so far in 2017, playing a large role in this year's rally in U.S.
stocks.
Global technology shares mostly moved higher in concert, also
supported by upbeat results from Alibaba and other U.S. tech giants
earlier this week. In Europe, shares of chip-gear firm ASML Holding
rose 1.2%, chip maker Infineon Technologies added 1.8% and
semiconductor maker STMicroelectronics climbed 2%. In Taiwan,
shares of Largan Precision were up 3.6% and Hon Hai Precision
Industry gained 0.4%.
In the U.S., attention turned to the U.S. nonfarm payrolls
report, a key indicator of the strength of the economy. The report
showed a gain of 261,000 jobs in October, a pickup from the prior
month, but below the 315,000 jobs expected by economists surveyed
by The Wall Street Journal. The closely watched wage growth figure
showed wages rose 2.4% from a year earlier, a slowdown from the
prior month.
The WSJ Dollar Index, which weighs the U.S. currency against a
basket of 16 others, declined 0.1% following the report. The yield
on the 10-year Treasury note slipped to 2.338%, from 2.347% ahead
of the report. Yields fall as prices rise.
On Friday, investors also continued to parse the details of a
Republican tax bill and the nomination of Fed governor Jerome
Powell to be the next chairman of the central bank.
The Dow industrials fell more than 80 points Thursday after a
detailed summary of the tax plan was reported, but the blue-chip
index climbed later in the session to end higher.
"We think tax reform is more likely than the market thinks it
is," said Jon Adams, investment strategist with BMO Global Asset
Management, noting expectations for a tax cut in 2018 are one of
the reasons for the asset manager's modest preference for equities
over bonds.
Still, "this is a very fluid process and it's likely that there
will be a lot of change to what is currently being proposed," he
added.
In Europe, Spanish bank shares fell, dragging Spain's IBEX 35
down 1.3%. A prosecutor asked a Spanish court on Thursday to issue
an arrest warrant for Carles Puigdemont, the leader of Catalonia's
secessionist movement who fled to Belgium to escape authorities in
Spain.
"I don't think [Catalonia] is played out yet -- the [request
for] arrests have probably inflamed the situation and there's no
doubt going to be a populist response to arrests," said Gautam
Batra, head of investments at Mediolanum Asset Management.
The British pound edged up 0.3% to $1.3101 after its biggest
daily decline since June. The Bank of England on Thursday raised
interest rates for the first time in more than 10 years but
signaled that further increases weren't imminent, causing the pound
to slump 1.4% against the U.S. dollar.
"More important than the decision were the comments during the
press conference and inflation report, which were quite dovish,"
said Markus Stadlmann, chief investment officer at Lloyds Banking
Group. "There are so many moving parts with regards to the economic
situation for the U.K. at the moment that for investors, we have to
take it step by step."
Asia-Pacific equities were little changed ahead
Chinese tech giant Tencent rose 1.7% to a fresh record after
peer Alibaba reported positive quarterly results. The gain helped
Hong Kong's Hang Seng Index -- of which Tencent is the largest
component -- rise 0.3%.
-Corrie Driebusch contributed to this article
Write to David Hodari at David.Hodari@dowjones.com and Riva Gold
at riva.gold@wsj.com
(END) Dow Jones Newswires
November 03, 2017 09:08 ET (13:08 GMT)
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