U.S. Worries Long Term Jobless Rate; Stocks Flat

123jump.com Staff
08 Jan, 2010
New York City

U.S. lost additional 85,000 jobs in December with unemployment rate of 10%. Labor participation rate declined to the lowest level since 1985 and nearly 930,000 people have stopped looking for work. U.S. stocks bounced near the flat line. Northern hemisphere is bracing for inclement weather.

[R]4:30 PM New York, 9:30 PM London, 8:30 AM Sydney – U.S. lost additional 85,000 jobs in December with unemployment rate of 10%. Labor participation rate declined to the lowest level since 1985 and nearly 930,000 people have stopped looking for work. U.S. stocks bounced near the flat line. Northern hemisphere is bracing for inclement weather this weekend.[/R]

Weather remained in focus in northern hemisphere as the severe snow fall and strong winds affected commodities and people transportation.

U.S. stocks edged lower after employers trimmed 85,000 jobs in December but managed to eke out small gain at close.

U.S. labor participation rate in population dropped to 64%, lowest since 1985 when it was 64.9%. The underemployment rate, that includes the people who are employed part time and people who have given up looking for work, increased to 17.3% in December from 17.2% in November.

The number of discouraged workers who have stopped looking for work increased to 929,000 in December.

November wholesale sales increased 3.3% and inventories added 1.5% but still down 11% from a year ago.

European markets closed higher after Germany reported better than expected increase in exports. Unemployment in the region increased to 10%. The second read of the euro area GDP was unrevised at 0.4%. Airlines and airport operators increased after global traffic expanded in November.

UK producer price surge fuels inflation fears. The pound was nearly unchanged after the report. Ted Baker sales surge. Mitchells & Butlers remains cautious. Aberdeen Asset Management agrees to acquire a unit of RBS for £84.7 million.

Japanese finance minister comments supporting lower yen lifted stocks of exporters and auto makers. Japan foreign reserve assets falls to $1 trillion. Japanese government is likely to restructure JAL through a court-backed bankruptcy. Toyota Prius sales topped industry sales in 2009.

Stocks in China stayed near their recent highs as the nation battles sever cold in the northern region. China approved new investment tools that allow investors to bet on the falling markets. Hutchison Whampao offered HK$2.20 a share for Hutchison Telecom.

Stocks in India closed lower but appear to charge ahead as the earnings season next week. International investors increase their net exposure to Indian stocks to record $74 billion. 2009 auto sales increased 18.7% to 1.43 million.

North American Markets

Dow Jones Industrial Average increased 33.18 or 0.3% to a close of 10,606.86, S&P 500 Index edged higher 4.55 or 0.4% to 1,137.14, and Nasdaq Composite Index decreased 1.04 or 0.05% to close at 2,300.05. Toronto TSX Composite Index decreased 57.03 or 0.5% to 11,887.51.

Latin American Markets Indexes

Mexico Bolsa Index increased 234.41 or 0.7% to 33,064.57 and Brazil Bovespa Stock Index declined 278.23 or 0.4% to 70,451.12.

Europe Markets Review

In London FTSE 100 Index closed higher 7.52 or 0.14% to 5,534.24, in Paris CAC 40 Index increased 20.34 or 0.51% to close at 4,045.14, in Frankfurt DAX index higher 18.25 or 0.30% to close at 6,037.61. In Zurich trading SMI increased 62.52 or 0.95% to close at 6,617.88.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 116.66 or 1.09% to 10,798.32, and Hang Seng index in Hong Kong increased 27.30 or 0.12% to 22,296.75, and CSI 300 index in China higher 8.67 or 0.25% to 3,480.13. ASX 200 index in Australia increased 12.70 or 0.26% to 4,912.10. The FTSE Bursa KL Composite index in Malaysia was higher 1.56 or 0.12% to 1,292.98.

The Kospi Index in South Korea increased 11.81 or 0.70% to close at 1,695.26. SET index in Thailand closed higher 4.33 or 0.59% to 738.96. JSE Index in Indonesia increased 27.48 or 1.06% to 2,614.37. The Sensex index in India decreased 75.43 or 0.43% to 17,540.29.

Commodities, Metals, and Currencies

Crude oil increased $0.24 to $82.90 a barrel for a front month contract, natural gas edged down 8 cents to $5.72 per mBtu and gasoline increased 2.8 cents to 216.26 cents.

Soybean future closed down 4.00 cents to $10.22 a bushel. Wheat futures closed up 10.75 cents in Chicago trading to $5.68 a bushel. Sugar closed down 0.47 cents at 27.53 cents.

Gold increased $3.40 in New York trading to close at $1,137.10 per ounce, silver closed up $0.14 to $18.25 per ounce and copper for the front month delivery increased 0.15 cent to $3.423 per pound.

Dollar closed lower against euro to $1.4414 and edged lower against the Japanese yen to 92.65.

Yield on 10-year U.S. bonds increased to 3.83% and with 30-year maturities closed higher at 4.72%.