U.S. Trade Deficit Widens, Jobless Rate Rises to 6.7%

Nichole Harper
07 Mar, 2014
New York City

Stocks on Wall Street struggled to advance after trade deficit widened in January and employers added more than expected 175,000 jobs in February. Canada said its trade deficit shrank to $0.2 billion but exports rose 5.3%. Albertsons offered $40 a share or $4.9 billion for Safeway Inc.

[R]10:20 AM New York – Stocks on Wall Street struggled to advance after trade deficit widened in January and employers added more than expected 175,000 jobs in February. Canada said its trade deficit shrank to $0.2 billion but exports 5.3%. Albertsons offered $40 a share for Safeway Inc.[/R]

Stocks in New York fluctuated and the jobless rate increased and trade deficit expanded.

Employers at all levels in the U.S. added 175,000 in February following a revised increase of 129,000, Labor Department data showed today.

In a separate survey conducted by the department showed jobless rate unexpectedly increased from a five-year low of 6.6% to 6.7%.

S&P 500 index added 5.10 or 0.3% to 1,882.13 and the Nasdaq Composite index gained 6.24 or 0.14% to 4,358.3

Trade Deficit Widens

Trade deficit in January slightly widened 0.3% to $39 billion in January from December, the Commerce Department reported today.

Exports increased 0.6% to $192.8 billion and imports rose 0.6% to $231.6 billion.

Most of the increase in exports was driven by an increase in sale of aircraft components, medical equipment and machinery. The increase in imports was largely driven by 9% rise in petroleum products.

The average price for a barrel of imported crude oil declined to $90.21, the lowest price since February 2011. And in the month, energy and petroleum products declined 8.4% to $12.4 billion.

Trade deficit with China increased 13.5% from December to $27.8 billion but deficit with the European Union declined 22.2% to $8.9 billion.

French Trade Deficit Expands

French trade deficit in January widened to 7.32 billion euros and December deficit was revised higher to 5.21 billion euro, the Customs Bureau said today.

Exports in the month declined 1.8% to 36.3 billion euros and imports slipped 0.3% to 42.02 billion euros.

Trade deficit for 2013 declined by 6 billion euros to 61.2 billion euros, and France was placed under a “reinforced surveillance” by the European Commission for its chronic trade deficit and high public debt.

France has steadily lost if export competitiveness in the euro zone, and its share of exports has declined from 17.5% in 1998 to 12.9% in 2010 and to 12.7% in the second quarter of 2013, according to the economic institute Coe-Rexecode.

FTSE 100 index declined 0.5% to 6,753.32, DAX 30 index dropped 121.6 or 0.3% to 9,421.01 and the CAC 40 index eased 0.7% or 28.9 to 4,388.32.

Asian Markets

Markets in Tokyo advanced after the yen declined to a five-week low and the broader averages registered the best weekly gain in the calendar year.

Sensex indexes in Mumbai gained 1.1% after regional parties expected to win the largest block in the next parliamentary election failed to resolve differences in Tamil Nadu State.

The disagreement is expected to help Bhartiya Janata Party, the main opposition party to increase its lead.

BJP is expected to win at least 205 seats for Lok Sabha election with 545 members and the ruling Congress Party is expected to win 89 seats, the lowest number of seats since independence in 1947.

U.S. Stocks in Review

Safeway Inc ((SWY)) declined 3% to $38.29 after Albertons agreed to acquire the grocery chain for about $40 a share.

Albertsons, controlled by Cerberus Capital Management LP, may face regulatory hurdles and may request more information and ask the company to divest some stores.

H&R Block Inc ((HRB)) decreased 2.9% to $30.07 after the tax-preparation company reported third-quarter loss from continuing operations of 77 cents a share.

The Gap Inc ((GPS)) declined 1.9% to $41.51 after the casual apparel retailer reported 7% decline in same store sales in February. Harsh winter forced 450 stores to close at least one day in February.