VOL. 127 | NO. 153 | Tuesday, August 7, 2012
Markets Stay Buoyed by Jobs
By PAN PYLAS
LONDON (AP) – Financial markets remained in a buoyant mood Monday by figures showing the U.S. economy generated a greater than expected amount of jobs in July and by a growing belief that the European Central Bank could do more in the months ahead to contain the continent’s debt crisis.
With little scheduled economic news due, Friday’s figures showing the U.S. economy adding 163,000 jobs in July continued to drive sentiment. Though the figures eased concerns over the world’s largest economy, the rise in the unemployment rate to 8.3 percent provided more evidence, if any were needed, that the recovery is patchy.
The figures were welcomed after three months when payrolls failed to meet expectations. The data also helped markets clamber off lows registered on Thursday when investors were disappointed by comments from European Central Bank president Mario Draghi.
“Those bumper non-farm payroll figures on Friday seem to be providing markets with a lasting distraction from the ongoing woes of the eurozone,” said Fawad Razaqzada, market strategist at GFT Markets.
In Europe, Germany’s DAX closed up 0.7 percent at 6,918 while the CAC-40 in France rose 0.8 percent to 3,401. The FTSE 100 index of leading British shares was 0.4 percent higher at 5,808.
It’s been an eventful day on Madrid’s main stock exchange. After a five-hour blackout blamed on a technical glitch, the IBEX 35 closed up 4.4 percent when trading restarted.
Also helping to shore up markets has been a bit of a reassessment of Draghi’s comments last Thursday. Though Draghi failed to meet market expectations at the time, investors have turned a little more positive.
“Despite last week’s disappointment, Draghi’s comments did suggest assistance in the near future and this is likely to increase risk appetite,” said James Hughes, chief market analyst at Alpari.
That reassessment has helped ease the pressure on Spain and the country’s 10-year yield dipped further below the 7 percent threshold that is widely-considered unsustainable in the long-run.
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