June Job Loss, ECB Raise Rates

123jump.com Staff
03 Jul, 2008
New York City

U.S. payrolls declined in June 62,000 totaling to job losses of 438,000 for te first six months of the year. Economy has been losing jobs as construction, banking and retail industries have been laying off people. Separately the European Central Bank raised its key rate by 25 basis points to 4.25%.

[R]12:00PM New York – U.S. stocks rose in the morning trading. Euro rose against dollar after the ECB raised rates.[/R]

U.S. payrolls declined for the six month in a row and in June declined by 62,000, lower than estimate of 65,000 by 123jump.com.

Department of Labor said that unemployment rate in the month was at 5.5% and in the first half of the year total job losses are 438,000. Economy continues to lose jobs as companies in construction, transportation and financial services lay people off.

The separate report from the department showed that initial claims of jobless rose 16,000 to 404,000 at the end of last week.

European Central Bank Raises Rates

European Central Bank raises interest rate by 0.25% to 4.25% today. In a meeting after the decision the central bank president Jean Claude Trichet said that he has ‘no bias’ on future moves and data on inflation and job markets will guide the future moves. Investors are expecting another rate hike by the end of the year of at least 25 basis points.

U.S. Stock Movers

AK Steel Holding fell $2.65 to $54 after it lost nearly 15% in yesterday trading. The stell company is adding surcharge of $905 per ton to certain steel products to recover rising raw materials and iron ore prices. AK Steel ((AKS)) in the last one year has traded as low as $29 in August of 2007 and as high as $73 in May of 2008.

Nvidia Corp, ((NVDA)) the maker of graphic chips dropped sharply as it indicated a weakening demand falling prices on rising competition. The chipmaker fell $5.48 or 30% to $12.56. Nvidia has traded as high as $39.67. On the news Intel and Advanced Micro Devices dropped 2% and 4% respectively.

European insurance companies rebounded after the ECB raised rates. AXA rose $1.14 to $29.38 and Allianz rose 39 cents $17.40 in New York trading.

Asian Markets

In Tokyo Nikkei 225 Index closed lower 20.97 or 0.16% to 13,265.40, in Hong Kong Hang Seng index decreased 461.67 or 2.13% closed to 21,242.78. In Australia ASX 200 index lower 96.50 or 1.89% to close 4,998.30. Malaysia financial markets were closed today.

In South Korea Kospi Index decreased 17.06 or 1.05% to close at 1,606.54, in Thailand SET index closed lower 17.86 or 2.35% to 742.15 and Indonesia JSE Index edged decreased 91.86 or 3.86% to 2,286.61. Sensex index in India decreased 570.51 or 4.18% to 13,094.11.