December 14, 2017
Thursday, June 4, 2015

Wall Street slips ahead of jobs report; Greece worries linger

US stocks fell today, hit by nervousness ahead of Friday's jobs report and lingering uncertainty over a Greece aid deal with creditors.

Declining oil and gold prices also weighed on energy and materials shares, which led declines in the benchmark S&P 500.

Data showed the labor market tightening, with first-time applications for unemployment aid down last week and the number of people on benefit rolls hitting the lowest level since 2000, suggesting the Federal Reserve will remain on track to raise interest rates later this year.

The data came ahead of Friday's key US jobs report, expected to show a 225,000 gain in non-farm payrolls, according to a Reuters estimate.

Some investors think stronger jobs numbers could increase chances the Fed could raise rates sooner rather than later.

Adding to investor concerns, Greece delayed a debt payment to the International Monetary Fund due on Friday and German Chancellor Angela Merkel said talks on a cash-for-reforms deal were still far from an agreement.

The Dow Jones industrial average fell 170.69 points, or 0.94 percent, to 17,905.58, the S&P 500 lost 18.23 points, or 0.86 percent, to 2,095.84 and the Nasdaq Composite dropped 40.11 points, or 0.79 percent, to 5,059.13.

European shares closed off their daily lows as a rally in the euro and a sell-off in bonds paused.

The FTSEurofirst 300 closed down 0.9 percent at 1,557.25 points, having earlier touched its lowest since May 7.

The European Central Bank's insistence today that there was no need to adjust monetary policy in the face of volatility had caused a spike in the euro and bond yields and raised fears for firms' borrowing costs and export prospects.

The FTSE 300 rallied nearly 25 percent between mid-January and mid-April following the ECB's announcement it would buy bonds to stimulate inflation and growth. That knocked the euro and lowered borrowing costs for European governments and firms, and boosted equities' attraction by lowering returns on bonds.

But in the past month the index has been at its most volatile since 2012, based on the size of the moves between its open, high, low and close.

Utilities, which had been seen as a natural replacement for bond investments due to their reliable dividend and higher yield versus bonds, were hit hardest, falling 2.2 percent.

Greece's benchmark ATG equity index closed 1.3 percent lower, giving back some recent gains, as crunch talks on an aid-for-reforms deal continued.

Meanwhile, Japan's Nikkei share average eked out its first gains in three sessions, with insurers leading the way on higher Japanese and global bond yields, though rising volatility in bond prices kept many investors cautious.

The Nikkei 225 rose 0.1 percent to 20,488.19, not far from its 15-year high of 20,655.33 hit a week ago. Online retailer Rakuten dived 6.2 percent on its plan to issue new shares to raise about 188 billion yen ($1.5 billion) and to use 90 percent of the proceeds for debt repayment.

The broader Topix rose 0.2 percent to 1,673.89 and the JPX-Nikkei Index 400 gained 0.2 percent to 15,104.62.

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