October 31, 2014
Wall Street slips despite US jobs data
Early stocks gains on Wall Street faded and investors retreated to long-dated government debt, as enthusiasm over strong headline US jobs growth was undercut by flat wages and a decline in the number of people looking for work.
Traders also cited headlines on more violence in eastern Ukraine as sparking a shift into the bond market. The US economy added 288,000 jobs in April, more than expected. Strong as the headline figure was, the report raised some concerns as more than 800,000 people left the US labor force and average hourly wages were unchanged in April.
Selling in US Treasuries was modest in short- and medium-dated notes as investors responded to the increased likelihood of interest-rate hikes from the Fed. However, long-dated bond yields fell, which reflects a view that the economy is still not strong enough to spark inflation.
The five-year Treasury note was down 2/32 to yield 1.677 percent, while the 30-year bond, after an earlier selloff, turned around to rise 16/32 to lower its yield to 3.389 percent. The jobs figures bumped up the odds on the Federal Reserve raising rates sooner in 2015, with the expectations for a rate increase by June 2015 increasing to about 56 percent from 47 percent a day earlier.
US stocks slipped after an early rally. The S&P 500 began the day not far from its all-time closing high of 1890.90 reached on April 2 but traded mostly flat.
The Dow Jones industrial average fell 10.46 points or 0.06 percent, to 16,548.41, the S&P 500 gained 0.63 points or 0.03 percent, to 1,884.31 and the Nasdaq Composite added 1.014 points or 0.02 percent, to 4,128.465.
In the currency market, the dollar edged lower against the yen and was flat against the euro, giving up earlier gains. Global markets were flat.
The MSCI All-World Index rose 0.1 percent while the FTSEurofirst 300 slipped 0.2 percent. The job gains were felt in Canada as well, where the TSX , Canada's main stock index, rose to its highest in almost six years.
Among commodities, oil remained top-heavy after Thursday's slip following disappointing Chinese economic data and a survey showing US crude stocks rose last week to their highest level since 1982. US crude futures gained 35 cents to $99.78 a barrel while Brent crude rose 66 cents to $108.42.
Gold rose by $10.61 to $1,294.10, while copper, whose industrial uses make it sensitive to growth expectations, gained 0.9 percent.