Stocks rise on strong US jobs data, oil prices retreat

Wall Street

(AFP)

NEW YORK – Shares on Wall Street ended slightly higher on Friday as strong U.S. jobs data boosted expectations of further interest rate hikes from the Federal Reserve, while oil prices rose. retreated after US allies agreed to tap their emergency stocks.

The government’s March jobs report showed US employers added 431,000 jobs and the unemployment rate fell to 3.6%, a hair above what it was before the pandemic.

The data showed progress in the U.S. economic recovery, but also raised expectations of an aggressive Federal Reserve interest rate hike to rein in runaway inflation.

“Given the strength of the labor market and inflation well above target, the likelihood of the Fed raising rates by 50 (basis points) at its next meeting in May – which is our benchmark – is rising,” UniCredit Bank’s Daniel Vernazza said in a note.

However, the Institute for Supply Management reported that US manufacturing expansion slowed last month amid soaring energy prices after Russia’s invasion of Ukraine.

After a choppy session, all three major US indices ended up slightly with the S&P 500 up 0.3%, lifting the index narrowly into positive territory for the week.

European stocks also climbed, despite data showing eurozone inflation jumped to a record 7.5% last month.

Analysts said soaring inflation will put pressure on the European Central Bank, which has so far been reluctant to follow the Federal Reserve’s lead and raise interest rates.

“With Eurozone inflation still exceeding ECB forecasts, and likely to remain very elevated for the rest of the year, we believe it won’t be long before the Bank starts raising interest rates. ‘interest,’ Jack Allen-Reynolds told Capital Economics.

Oil prices, meanwhile, retreated, with the US benchmark WTI contract dipping below $100 a barrel.

In a bid to drive down oil prices, the International Energy Agency, made up of 31 nations, agreed to re-exploit emergency oil reserves at an emergency ministerial meeting after s be committed to releasing more than 60 million barrels.

The IEA, whose members include the United States, European countries, Japan and other nations allied with Washington, said it would release the new amount early next week.

The move came a day after Biden announced a record release of oil to the market – one million barrels of US government oil every day for six months in a bid to drive down prices.

Biden described the move as a “wartime” move that will defuse Russia’s influence as an energy powerhouse.

Washington has pressed the OPEC+ group of oil-producing nations, led by Saudi Arabia and Russia, to increase output, but the group agreed on Thursday to another modest increase instead.

The war has pushed oil prices to near-record highs amid supply concerns, with Russia the world’s second largest exporter of crude after Saudi Arabia.

Key figures around 21:00 GMT

New York – Dow Jones: UP 0.4% to 34,818.27 (closing)

New York – S&P 500: UP 0.3% to 4,545.86 (closing)

New York – Nasdaq: UP 0.3% to 14,261.50 (closing)

London – FTSE 100: UP 0.3% to 7,537.90 (closing)

Frankfurt – DAX: UP 0.2% to 14,446.48 (closing)

Paris – CAC 40: UP 0.4% to 6,684.31 (closing)

EURO STOXX 50: UP 0.4% to 3,918.68 (closing)

Tokyo – Nikkei 225: 0.6% decline to 27,665.98 (close)

Hong Kong – Hang Seng Index: UP 0.2% to 22,039.55 (closing)

Shanghai – Composite: UP 0.9% to 3,282.72 (closing)

North Sea Brent: 0.3% down to $104.39 a barrel

West Texas Intermediate: 1.0% drop to $99.27 a barrel

Euro/dollar: DOWN to $1.1049 from $1.1067 on Thursday evening

Pound/dollar: DOWN to $1.3118 vs. $1.3138

Euro/pound: FLAT at 84.24 pence

Dollar/yen: UP to 122.49 yen from 121.70 yen

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Felix J. Dixon