U.S. Stocks Look for Direction as China Worries Ease
October 01 2015 - 10:24AM
Dow Jones News
By Tommy Stubbington and Riva Gold
U.S. stocks limped into October, following the worst quarter for
benchmark indexes since 2011.
In early trade on Thursday, U.S. equities swung between gains
and losses. The Dow Jones Industrial Average was nearly flat at
16285. The S&P 500 gained 0.1% while the Nasdaq Composite fell
0.4%.
The Stoxx Europe 600 rose 0.3%, paring earlier gains.
There were tentative signs that a slowdown in China's
manufacturing sector may be bottoming out.
China's official manufacturing purchasing managers index ticked
up slightly to 49.8 in September, beating expectations. A private
gauge of nationwide manufacturing activity, the Caixin China
manufacturing PMI, was down slightly at 47.2 in September, a
six-year low, compared with 47.3 in August.
In the eurozone, manufacturing data showed the pace of expansion
slowed slightly in September.
"Much of the uncertainty is already in the price. Investors are
well aware of the impending economic slowdown," said Jeremy
Batstone-Carr, chief economist and strategist at London-based
brokerage and wealth manager Charles Stanley.
But a disappointing batch of third-quarter corporate earnings
could cause the recent rebound in markets to fade quickly,
according to Mr. Batstone-Carr.
"I'd be concerned about sounding the all clear, particularly as
we head into the reporting season," he said.
Asian markets extended gains after the economic data was
released. Australia's S&P/ASX 200 rose 1.8%.
Japan's benchmark Nikkei Stock Average climbed 1.9%. Investors
in Japan also considered the Bank of Japan's latest corporate
survey, which showed that big manufacturers were more cautious
about the economy in the third quarter as exporters were pressured
by China's slowdown.
Markets in China and Hong Kong were closed for national
holidays.
European shares gave up much of their early gains as commodities
trader and producer Glencore PLC was hit by renewed declines,
having climbed sharply earlier in the session. Glencore shares fell
2.9%.
In the U.S., employment data remained consistent with an
improving labor market. Initial jobless claims, a proxy for
layoffs, rose by 10,000 to 277,000 in the week ended Sept. 26, the
Labor Department said Thursday. Economists had expected 271,000 new
claims.
Investors were looking ahead to Friday's U.S. jobs report, which
is closely watched by Federal Reserve officials as they decide when
to raise short-term interest rates. The Fed's decision to hold
rates at record lows in September helped fuel fears of slowing
global growth.
Economists expect 200,000 jobs were created in September and
estimate that the unemployment rate held at 5.1%.
In currency markets, the euro fell 0.1% against the dollar to
$1.1165. The dollar was 0.1% lower against the yen at
Yen119.79.
In commodities, Brent crude oil was up 2.2% at $50.20 a barrel.
Gold was flat at $1,115.50 a troy ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
(END) Dow Jones Newswires
October 01, 2015 10:09 ET (14:09 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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