October 19, 2017

Markets Fall on China’s Credit Crunch and Fed’s Exit Plan

PARIS — Global markets stumbled on Thursday over concern about a credit crunch in China and uncertainty about the United States central bank’s plans for withdrawing the monetary stimulus upon which the American economy has become dependent.

Just a day after the Federal Reserve hinted that it could soon begin winding down its bond-purchasing program, investors were unnerved by reports that Chinese banks had become reluctant to lend to one another, causing interest rates in the interbank market to spike to punishingly high levels.

On Wall Street, the Standard Poor’s 500-stock index lost 1.2 percent in early trading on Thursday, the Dow Jones industrial average dropped 1.1 percent and the Nasdaq composite index shed 1.3 percent. On Wednesday, the S.P. 500 fell 1.4 percent.

A purchasing managers’ report added to fears that China, which has been an engine of growth in the world economy, might not be able to carry the load indefinitely. The report suggested Chinese manufacturing was contracting.

“There’s been a lot of focus on the market rates in China,” said Laurent Fransolet, a European rate strategist at Barclays in London. “Whether it’s a full-fledged credit crunch remains to be seen.”

Analysts at Nomura International noted that one rate, known as the seven-day repo rate, rose to as high as 25 percent on Thursday, compared with just 4 percent a month ago, as the Chinese central bank declined to smooth the market.

“But the main driver here has been the aftermath of the Fed,” Mr. Fransolet said about the global stock activity. “We’re still seeing the ripples of that.”

In European afternoon trading, the benchmark Euro Stoxx 50 index fell 2.6 percent, while the FTSE 100 in London was down 2.4 percent.

In Asian trading, the Shanghai Stock Exchange composite index fell 2.8 percent. The Nikkei 225 stock average in Tokyo dropped 1.7 percent, the Hong Kong benchmark Hang Seng Index declined 2.9 percent and the SP/ASX 200 index in Sydney fell 2.1 percent.

Gold futures dropped 6 percent, to $1,291.10 an ounce. The euro fell 0.7 percent, to $1.3201, while the dollar rose 1.3 percent, to 97.73 yen.

Markets had already been jittery after hearing about the Federal Reserve’s plans to end the special operations it has been using to add liquidity to shore up the financial system. On Wednesday, Ben S. Bernanke, the Federal Reserve chairman, said the Fed hoped to begin reducing the size of its monthly bond purchases by the end of 2013 and end the program as soon as the American jobless rate fell to 7 percent.

Mr. Fransolet said investors had become accustomed to the so-called quantitative easing policies used by central banks to provide liquidity and support asset prices. In recent years, he said, markets faltered when the authorities talked about ending those policies and the central bankers had then backtracked.

But this time, he said, investors have grasped that the Fed is much more confident.

“That’s something the markets need to take on board,” Mr. Fransolet said. “That’s a big change from the last few years.”

The sell-off Thursday came in the face of economic news that showed an improving trend, if not actual growth, in the European economy. Markit Economics said its purchasing managers’ composite output index for the euro zone rose to 48.9 in June from 47.7 in May, bringing the index to its highest level in 15 months. While an index level below 50 suggests economic contraction, the fact that the index has been ticking upward for three straight months indicated Europe may be on the way out of recession.

Chris Williamson, Markit’s chief economist, said the data signaled “stabilization in the third quarter and growth appearing in the fourth.”

Ben May, an economist with Capital Economics in London, said the purchasing managers data suggested the euro zone economy would shrink by about 0.2 percent in the second quarter, the same as in the first three months of the year. “In all, then, there are some further encouraging signs that the euro zone economy is starting to contract a bit less sharply,” Mr. May wrote in a research note, though he warned that the economy “remains in a fragile condition.”

Purchasing data from Germany were better, indicating the economy there was regaining momentum, with the composite index rising to 50.9 in June, from 50.2 in May.

Carsten Brzeski, an economist at ING Bank in Brussels, said the data added to recent evidence suggesting Germany had picked up steam in the second quarter, though he said there were still concerns about the health of the manufacturing sector.

London stocks fell as the Bank of England said British banks needed to raise their capital by another 13.4 billion pounds, or $20.7 billion, this year to improve their finances. The Bank of England made the announcement on the same day that euro zone finance ministers were convening in Luxembourg, where banking issues were to be at the top of the agenda.

Article source: http://www.nytimes.com/2013/06/21/business/global/daily-stock-market-activity.html?partner=rss&emc=rss

Market Plummets on Weak Economic Data

Several weak economic reports sent the stock market plunging on Wednesday to its lowest level in a month.

Mining, banking and chemical companies, and other businesses with fortunes tied closely to prospects for growth, led the market lower. That is a sign that investors are becoming less confident in the economy.

The troubling data included weak hiring at private companies, a plunge in mortgage applications and sluggish orders to American factories.

The Dow Jones industrial average fell 216.95 points and finished at 14,960.59, a drop of 1.4 percent. The close was the first below 15,000 since May 6 and the decline was the largest in seven weeks.

Intel fell the most in the Dow, dropping 66 cents, or 2.6 percent, to $24.70.

The Standard Poor’s 500 index ended down 22.48 points, or 1.4 percent, at 1,608.90. The index is 3 percent below its record close of 1,669 reached May 21. It is still up 12.8 percent this year.

The Nasdaq composite index dropped 43.78 points, or 1.3 percent, to 3,401.48. The index closed at its lowest level in a month.

Stocks started lower and declined steadily throughout the day. Some investors said that because stocks rose every month this year and climbed to record levels this spring, a significant pullback was overdue.

“The rally is tired, and people are taking some profits,” said Brad Reynolds, at the investment adviser LJPR.

Investors also were unnerved by an 11.5 percent drop in mortgage applications last week. The decrease was a disappointment because the rebound in housing had been a major factor supporting the stock market’s record-breaking rally this year.

Housing stocks slumped in response. D.R. Horton dropped 27 cents, or 1.2 percent, to $22.65. Beazer Homes fell 60 cents to $18.78, a decline of 3.1 percent.

Applications declined as mortgage rates rose to the highest point since April 2012. The increase was driven by higher yields in the bond market.

The yield on the 10-year Treasury note climbed as high as 2.2 percent last week, the highest in more than two years. On Wednesday, the note rose 17/32, to 96 31/32, and yield fell to 2.09 percent, from 2.15 percent late Tuesday.

News was disappointing on hiring, another one of the major supports for the market rally this year.

A measure of employment in the service sector fell in May to the lowest level since last July, and the payroll provider ADP reported the second straight month of weak gains in jobs.

The stock market’s recent bout of volatility began May 22 as traders studied comments from the Federal Reserve chairman, Ben S. Bernanke, and minutes from the last meeting of the Fed’s policy committee for clues about when the bank may slow its stimulus program.

Article source: http://www.nytimes.com/2013/06/06/business/daily-stock-market-activity.html?partner=rss&emc=rss

Markets Lower as Stimulus Worries Continue

Wall Street opened lower Wednesday, joining European markets, as investors continued to question the longevity of the Federal Reserve’s stimulus program.

In early trading the Standard Poor’s 500-stock index fell 0.7 percent, the Dow Jones industrial average was also 0.7 percent lower, and the Nasdaq composite was 0.6 percent lower.

Supportive monetary policies from central banks around the world have lifted equity markets this year, with the S.P. 500 up more than 16 percent. On Tuesday, stocks soared and the Dow closed at another record high after the Bank of Japan and European Central Bank reassured investors that policies designed to boost economic growth would stay in place.

Last week, indexes fell on concerns that the program may be scaled back sooner than expected, and strong economic data on Tuesday stirred speculation that the Fed may begin tapering off its program soon. The concerns sent United States Treasury debt yields to their highest levels in over a year and pulled equities back from session highs.

Tuesday “was the first time we saw rates spike on concerns about the Fed tapering, and if that spreads, it will have negative ramifications for the rest of the market,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

While strong corporate earnings have also contributed to the equity market’s surge in 2013, central bank stimulus has pushed investors to add to positions on market declines, limiting extended sell-offs. So, any change to the stimulus program may prompt a round of profit taking.

“There’s still a question about how much we can grow without stimulus, and what will happen to the market when rates go up,” Mr. Sarhan said.

In company news, Smithfield Foods surged 24.7 percent in early trading after China’s Shuanghui Group agreed to buy the company for $34 a share.

Shares of Trina Solar Ltd traded in the United States 5.8 percent after the company reported its seventh straight quarterly loss.

Apple’s chief executive, Timothy D. Cook, said late Wednesday he expected the company to release “several more game changers,” hinting that wearable computers could be among them. Apple shares rose 0.4 percent.

In Europe, shares and bonds fell across the board as Tuesday’s robust economic data out of the United States fanned speculation the Federal Reserve may soon begin tapering back its bond-buying program.

The FTSE Eurofirst 300 index of top European shares was down 1.3 percent, giving back the previous day’s 1.3 percent gain.

In Asian markets, Tokyo’s Nikkei and the Shanghai composite both ended the day 0.1 percent higher, but the Hang Seng in Hong Kong fell 1.6 percent.

The dollar, which has been rising on bets on a reduction in Fed stimulus, hovered near three-year highs against most major currencies, held in check by a stronger yen.

The yen, often used as a safe haven by investors, gained as stocks fell, rising around 1 percent at 101.29 to the dollar

Article source: http://www.nytimes.com/2013/05/30/business/daily-stock-market-activity.html?partner=rss&emc=rss

Economic Reports Push Markets Higher

Encouraging news about the American economy helped push stock prices higher on Wall Street Friday.

In afternoon trading the Standard Poor’s 500-stock index rose 0.5 percent. The Dow Jones industrial index gained 0.4 percent and the Nasdaq composite rose 0.5 percent.

A gauge of future economic activity rose more than analysts had expected, as did a measure of consumer confidence, adding to evidence that the economy is maintaining a steady recovery.

Stocks have surged to record levels this year on optimism about the economy and record corporate earnings. The market is also being supported by ongoing stimulus from the Federal Reserve, which is keeping long-term borrowing costs at historically low levels.

“This slow but relatively steady growth, that keeps inflation in check and keeps interest rates low, is actually a pretty healthy environment for the stock market,” said Liz Ann Sonders, chief investment strategist at Charles Schwab Company. “Right now we are very optimistic.”

Gold fell for a seventh straight day, dropping $26, or 1.9 percent, to $1,361.10 an ounce. The precious metal is down almost 20 percent this year and has fallen out of favor as an alternative investment as the stock market has surged this year.

The demand for gold is also being undermined by a surge in the United States dollar. The dollar advanced against both the euro and the yen Friday.

General Motors rose 3.4 percent, to $33.48. The automaker’s stock is trading above the $33 price of its November 2010 initial public offering for the first time in two years.

Northrop Grumman gained 3.5 percent after the defense contractor said its board approved the repurchase of another $4 billion in stock, and that it plans to buy back a quarter of its outstanding shares by the end of 2015.

After some lackluster reports on the economy Thursday, including slowing manufacturing and an increase in applications for unemployment benefits, Friday’s reports were a tonic for investors.

The Conference Board said its index of leading economic indicators rose 0.6 percent last month after a revised decline of 0.2 percent in March. The index is intended to predict how the economy will be doing in three to six months.

The University of Michigan’s survey of consumer confidence climbed to 83.7. Economists had predicted that the gauge would climb to 76.8.

As well as giving stocks a lift, the reports also pushed government bond yields higher. The yield on the 10-year Treasury rose to 1.91 percent from 1.88 percent Thursday as investors favored riskier assets.

The price of benchmark crude oil rose 93 cents, or 1 percent, to $96.09 a barrel.

In Europe Britain’s FTSE ended the session 0.5 percent higher, Germany’s DAX climbed 0.3 percent and France’s CAC-40 was up 0.6 percent.

Earlier in Asia, Japan’s Nikkei 225 index rose 0.7 percent at the close, reversing a lower open. Australia’s SP/ASX 200 added 0.3 percent, pushed up by gains in BHP Billiton, the world’s largest mining company. The stock rose 1.9 percent on bargain-hunting.

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Article source: http://www.nytimes.com/2013/05/18/business/daily-stock-market-activity.html?partner=rss&emc=rss

Markets Struggle to Keep Momentum

The Standard Poor’s 500-stock index rose for a fourth consecutive day on Wednesday, but gains eroded in afternoon trading.

The S.P. 500 was 0.3 percent higher — down from 0.7 percent at midday — the Dow Jones industrial average rose 0.2 percent and the Nasdaq composite was flat.

Equities have rallied in recent weeks, with both the Dow and S.P. hitting highs as investors expect central bank stimulus measures will keep supporting market gains.

Such policies have helped spur advances of about 15 percent in major indexes this year despite data showing signs of slowing growth. Activity in New York State’s manufacturing sector unexpectedly contracted in May, falling to minus 1.43 points from 3.05, below expectations for an increase to 4 points. Another report showed that industrial production in the United States fell 0.5 percent in April, more than expected.

“It’s disconcerting that the data was so much lower than what we were looking for, but there’s no reason for investors to sell,” said Michael Binger, senior portfolio manager at Gradient Investments in Minneapolis. “The main things driving the market — the Fed, earnings, consumer confidence — are holding up, and people put money in the market on any down day. I still see a lot of value.”

Agilent Technologies, up 4 percent, was one of the S.P.’s top percentage gainers a day after the company posted adjusted earnings that beat expectations and doubled its stock-buyback program to $1 billion. The company also said it would cut 2 percent of its global work force.

Tech shares also got a lift from Netflix, up 3.8 percent, and Yahoo Inc, up 2.3 percent.

On the downside, Deere Company gave a cautious outlook even as earnings topped forecasts. The stock fell 4.5 percent. Deere’s decline dragged on the S.P. industrial index, which was up only 0.1 percent.

In other data released on Wednesday, the United States Producer Price Index recorded its largest drop in three years in April, falling a seasonally adjusted 0.7 percent.

The N.A.H.B. Wells Fargo Housing Market index rose to 44 points from a downwardly revised 41 in April, according to data from the National Association of Home Builders. The May reading was above forecasts and closer to the 50 mark, which indicates builders see market conditions in a more favorable light.

Crude oil fell 1.8 percent after data showed the euro zone was in its longest recession ever, while a stronger dollar and rising American refined products stockpiles put additional pressure on prices.

The drop in crude pressured shares of energy companies, with Marathon Oil down 0.7 percent, and Cliffs Natural Resources, off 3.2 percent.

Macy’s shot up 2.6 percent after the retailer reported higher first-quarter profit and sales, and raised its quarterly dividend 25 percent.

Shares in SunPower, a maker of solar panels and solar power plants, surged 15.1 percent after the company said it expected to post an adjusted profit for the current quarter

The FTSEurofirst 300 index of European blue chip shares, which closed at a five-year high on Tuesday, paused after a report that the euro zone economy had contracted more than expected, but then resumed its climb, rising 0.7 percent at the end of the session.

China’s factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling fears that a nascent recovery was stalling.

Still, Asian markets closed mainly higher. The Nikkei in Japan rose 2.3 percent, the Hang Seng in Hong Kong gained 0.5 percent and the Shanghai composite was 0.4 percent higher.

Article source: http://www.nytimes.com/2013/05/16/business/daily-stock-market-activity.html?partner=rss&emc=rss

Markets Rise, Overcoming Weak Economic Data

The Standard Poor’s 500-stock index rose for a fourth consecutive day on Wednesday, but gains eroded in afternoon trading.

The S.P. 500 was 0.3 percent higher — down from 0.7 percent at midday — the Dow Jones industrial average rose 0.2 percent and the Nasdaq composite was flat.

Equities have rallied in recent weeks, with both the Dow and S.P. hitting highs as investors expect central bank stimulus measures will keep supporting market gains.

Such policies have helped spur advances of about 15 percent in major indexes this year despite data showing signs of slowing growth. Activity in New York State’s manufacturing sector unexpectedly contracted in May, falling to minus 1.43 points from 3.05, below expectations for an increase to 4 points. Another report showed that industrial production in the United States fell 0.5 percent in April, more than expected.

“It’s disconcerting that the data was so much lower than what we were looking for, but there’s no reason for investors to sell,” said Michael Binger, senior portfolio manager at Gradient Investments in Minneapolis. “The main things driving the market — the Fed, earnings, consumer confidence — are holding up, and people put money in the market on any down day. I still see a lot of value.”

Agilent Technologies, up 4 percent, was one of the S.P.’s top percentage gainers a day after the company posted adjusted earnings that beat expectations and doubled its stock-buyback program to $1 billion. The company also said it would cut 2 percent of its global work force.

Tech shares also got a lift from Netflix, up 3.8 percent, and Yahoo Inc, up 2.3 percent.

On the downside, Deere Company gave a cautious outlook even as earnings topped forecasts. The stock fell 4.5 percent. Deere’s decline dragged on the S.P. industrial index, which was up only 0.1 percent.

In other data released on Wednesday, the United States Producer Price Index recorded its largest drop in three years in April, falling a seasonally adjusted 0.7 percent.

The N.A.H.B. Wells Fargo Housing Market index rose to 44 points from a downwardly revised 41 in April, according to data from the National Association of Home Builders. The May reading was above forecasts and closer to the 50 mark, which indicates builders see market conditions in a more favorable light.

Crude oil fell 1.8 percent after data showed the euro zone was in its longest recession ever, while a stronger dollar and rising American refined products stockpiles put additional pressure on prices.

The drop in crude pressured shares of energy companies, with Marathon Oil down 0.7 percent, and Cliffs Natural Resources, off 3.2 percent.

Macy’s shot up 2.6 percent after the retailer reported higher first-quarter profit and sales, and raised its quarterly dividend 25 percent.

Shares in SunPower, a maker of solar panels and solar power plants, surged 15.1 percent after the company said it expected to post an adjusted profit for the current quarter

The FTSEurofirst 300 index of European blue chip shares, which closed at a five-year high on Tuesday, paused after a report that the euro zone economy had contracted more than expected, but then resumed its climb, rising 0.7 percent at the end of the session.

China’s factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling fears that a nascent recovery was stalling.

Still, Asian markets closed mainly higher. The Nikkei in Japan rose 2.3 percent, the Hang Seng in Hong Kong gained 0.5 percent and the Shanghai composite was 0.4 percent higher.

Article source: http://www.nytimes.com/2013/05/16/business/daily-stock-market-activity.html?partner=rss&emc=rss

After Boost From Earnings Reports, Momentum Slows

The stock market retreated from its nominal highs on Thursday, with the Standard Poor’s 500-stock index slipping after five days of gains.

Despite the pullback, the Dow Jones industrial average remained above the 15,000 mark, while the Standard Poor’s 500-stock index was still well above 1,600.

The length of the recent market rally has surprised some investors. Analysts said it was difficult for stocks to continue their upward momentum without further catalysts, such as first-quarter earnings reports, which are nearing an end.

“This market is so stretched to the upside that if we get some little wiggle somewhere, I can easily see us getting back down to 1,580” on the S. P. 500, said Stephen J. Massocca, managing director of Wedbush Equity Management.

The Dow industrials fell 22.50 points, or 0.2 percent, to close at 15,082.62. The S. P. 500 declined 6.02 points, or 0.4 percent, to 1,626.67. The Nasdaq composite index slipped 4.10 points, or 0.1 percent, to 3,409.17.

The day’s main economic data was basically positive, but failed to give much of a boost to stocks. The number of Americans filing new claims for unemployment benefits fell to their lowest level in more than five years.

New jobless claims fell by 4,000 last week to a seasonally adjusted 323,000, the Labor Department said. The four-week moving average of jobless claims, a less-volatile figure, dropped 6,250, to 336,750.

Apple helped lead the declines of both the S. P. 500 and the Nasdaq, falling $4.02, or 0.9 percent, to $456.77. I.B.M. was the biggest drag on the Dow, dropping $1.58, or 0.8 percent, to $203.24.

Despite the day’s declines, the Dow is up 15.1 percent so far this year, while the S. P. 500 is up 14.1 percent.

Trading was fairly volatile. The market, which had been down slightly from the opening bell through midday, reversed course and began to edge higher in early afternoon. Stocks lost steam later in the session.

Limiting the losses in the S. P. 500, News Corporation shares rose $1.46, or 4.6 percent to $33.44 after it reported earnings late Wednesday that beat expectations.

Among the stocks making big gains, Tesla Motors surged $13.61, or 24.4 percent, to $69.40 a day after posting earnings that were three times what analysts had expected, as the company sold more cars than initially forecast.

Barnes Noble shot up $4.31, or 24.3 percent, to $22.08, after TechCrunch, an influential technology Web site, published an unconfirmed report that Microsoft was considering an offer to acquire all of the company’s Nook Media’s digital assets for $1 billion. Microsoft fell 33 cents, or 1 percent, to $32.66.

In the bond market, interest rates moved up. The price of the Treasury’s 10-year note fell 21/32, to 99 14/32, while its yield rose to 1.81 percent, from 1.77 percent late Wednesday.

Article source: http://www.nytimes.com/2013/05/10/business/daily-stock-market-activity.html?partner=rss&emc=rss

Markets Edge Higher

Stocks slowly drifted higher on Monday, appearing to resume a rally that pushed major indexes to record highs last week on improving earnings and reassuring signs about the economy.

In afternoon trading the Standard Poor’s 500-stock index was 0.3 percent higher, the Dow Jones industrial average rose 0.1 percent, and the Nasdaq composite rose 0.5 percent.

Apple shares were among the top gainers, up 2.3 percent and bolstering the Nasdaq composite index and benchmark S.P.

Market watchers said there is more room for stocks to rise as investors use weakness in the market as an opportunity to add to positions.

“There were some negative sentiment heading into earnings and concerns about the spring slowdown or ‘sell in May and go away,’ ” said Todd Salamone, director of research at Schaeffer’s Investment Research in Cincinnati. “Also economic numbers were weak. We don’t see that now. We’ve hit this sweet spot in economic data where numbers are better-than-expected. But on an absolute basis, they won’t make the Fed unwind their support for stimulus.”

Although weak economic data from the euro zone and China has caused concerns over the global growth outlook, Friday’s surprisingly strong jobs data fueled gains that took the indexes to record levels.

Many analysts say they expect a correction by stocks, which markets have largely avoided this year because traders use any weakness as an opportunity to add to positions.

A number of bellwether names rallied on Monday, with Bank of America up 3.9 percent. Humana jumped 2.9 percent as the S.P.’s biggest percentage gainer. JPMorgan upgraded the stock to “overweight.”

But Johnson Johnson shares were down more than 1 percent, weighing on the blue-chip Dow average.

BMC Software agreed to be acquired by a private equity group led by Bain Capital and Golden Gate Capital Corp for about $6.9 billion. Shares were flat.

Tyson Foods reported a steep drop in its second-quarter earnings, hurt as customers switched to chicken from beef to save money. The stock dropped 4.4 percent.

Overseas, European shares closed down about 0.1 percent as investors took profits following a rally in the previous week. Volumes were light as London and Tokyo markets closed for a holiday.

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The dollar was up 0.3 percent at 99.88 yen, extending Friday’s 1 percent gain. The yen has fallen steadily since the Bank of Japan announced a massive plan last month to boost the Japanese economy.

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On Friday the S.P. closed above 1,600 points and the Dow briefly traded above 15,000 for the first time ever, with a number of bellwether companies hitting 52-week highs. For the week, the Dow rose 1.8 percent, the S.P. gained 2 percent and the Nasdaq rose 3 percent in its biggest weekly climb since the first week of the year.

Article source: http://www.nytimes.com/2013/05/07/business/daily-stock-market-activity.html?partner=rss&emc=rss

Jobs Data Ease Fears of Sharp Slowdown in U.S. Economy

The latest jobs figures from the Department of Labor paint a brighter picture of the overall economy than other recent data, which had been weaker and prompted economists to warn of a spring swoon for the third year in row. Those worries had been heightened after the March jobs report, which initially showed the economy to have added just 88,000 jobs, much fewer than had been expected.

On Friday, however, the government sharply revised upward its estimates for job creation in February and March, concluding that the economy actually generated 332,000 jobs in February and 138,000 in March. The unemployment rate, which is based on a separate survey, fell by 0.1 percentage point to 7.5 percent, from 7.6 percent in March.

“It’s back to normal for this cycle,” said Steve Blitz, chief economist at ITG. “This number is back to the mainstream of what we’ve seen in this recovery.”

Still, Mr. Blitz said, many of the new jobs were in lower-paying sectors like retail and food services. Stores hired 29,000 workers, while the leisure and hospitality sector added 43,000 employees. Hiring for temporary positions also strengthened, as the temporary help sector gained more than 30,000 jobs.

“You’re hiring people, but you’re not generating high-income jobs,” he said. “But work is work. It’s honorable.”

The stock market reacted strongly to the better-than-expected figures, with the Standard Poor’s 500 index breaking through the 1,600-point level for the first time, rising almost 1.2 percent by late morning. The Dow Jones industrial average was up over 150 points, or just over 1 percent as well.

Another positive sign was that the size of the labor force increased, while the total number of unemployed Americans dropped by 83,000 to 11,659,000. What’s more, the ranks of the long-term unemployed, defined as workers who have been out of a job for 27 weeks or more, declined especially sharply, falling by 258,000 to 4.4 million. That’s still far above what’s typical at this stage of a recovery, but it is a marked improvement from past months. The long-term unemployed have been a particular cause of concern for economists in this recovery, because skills degrade the longer a person is out of the work force, and employers are reluctant to hire someone who has not held a job in a while.

The least-educated workers continue to bear the brunt of elevated joblessness, with the unemployment rate for workers who failed to graduate from high school rising to 11.6 percent from 11.1 percent in March. At the other end of the education spectrum, unemployment among people with a college degree or more remained at a low level, rising by a bare 0.1 of a percentage point to 3.9 percent.

Employment in the construction sector, which increased at a healthy pace in the first three months of 2013, actually dipped by 6,000 in April. The recovering housing market has been one of the most notable bright spots in the overall economic landscape, and economists will be closely watching to see if higher home prices and increased construction translate into additional jobs in the months ahead.

At 7.5 percent, overall unemployment now stands at its lowest point since December 2008, when joblessness was rising rapidly after the collapse of Lehman Brothers and the onset of the financial crisis. Unemployment ultimately peaked at 10 percent in October 2009, and there has been a steady, if frustratingly slow, decline since then. The manufacturing sector, which is closely watched as a gauge of broader economic strength, was unchanged in April. Private sector job creation totaled 176,000.

Economists have been warning that the economy — and job creation — will slow in the second-quarter, largely as a result of fiscal tightening in Washington. Payroll taxes increased in January, and across-the-board spending cuts mandated by Congress went into effect in March, and their impact is expected to be felt more broadly in the months ahead.

Article source: http://www.nytimes.com/2013/05/04/business/economy/us-adds-165000-jobs-in-april.html?partner=rss&emc=rss

Wall Street and Gold Extend Declines

The prices of stocks and gold appeared to chase each other lower on Monday after a report said growth unexpectedly slowed in China.

The stall in the rise of the world’s second-largest economy pushed Wall Street’s major stock indexes down more than 1 percent in afternoon trading, and put heavy selling pressure on gold, oil and other commodities.

The price of gold, which has been steadily drifting lower since the worst of the Great Recession passed, dropped another 9 percent Monday after a 5 percent drop on Friday. By afternoon, the market price of an ounce of gold was at a multi-year low, $1,370.80.

Stocks, too, were continuing a pullback that began Friday after a report on falling retail sales for March. The Standard Poor’s 500-stock index slipped 1.4 percent in afternoon trading, while the Dow Jones industrial average fell 1 percent and the Nasdaq composite index lost 1.6 percent. The Dow had been off more than 200 points earlier.

“None of the economic data has been very good for the last couple of weeks,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vt., told Reuters. “I wouldn’t say this is over yet, but there are enough indicators out there to really indicate that investors should approach this market with a degree of caution which doesn’t seem to exist right now.”

China’s economy expanded 7.7 percent in the first quarter, according to a government report. While that would be far above most industrial economies, it fell well short of forecasts for an increase of 8 percent and slowed from 7.9 percent during the final quarter of 2012.

Analysts described the data variously as “a big disappointment” and a “truckload of unpleasant surprises.” The Chinese economy finally began to pick up steam toward the end of last year. The data released Monday, however, suggested that the gradual recovery was proving more fragile than most analysts had expected.

Other preciious metals were hit by heavy selling: Silver fell to its lowest since October 2010, platinum to its weakest since August and palladium to a three-month low. And crude oil was off 1.8 percent in New York trading to $89.69 after a 2 percent drop Friday.

Article source: http://www.nytimes.com/2013/04/16/business/daily-stock-market-activity.html?partner=rss&emc=rss