World stocks higher ahead of US jobs report

Associated Press

BANGKOK (AP) — Better-than-expected U.S. economic data helped boost stock markets Friday ahead of a monthly report on employment in the world's top economy.

Government figures showing the number of Americans seeking unemployment benefits for the first time rose to 367,000 last week. That was seen as good news, since it was fewer than economists had forecast.

Although U.S. retailers reported slower sales growth in September, analysts said the results are an encouraging sign as a bigger slowdown is usually experienced in that month. September sales rose 3.9 percent — a slowdown from the 6 percent rise in August, an industry trade group said Thursday.

A key event this week comes later Friday when the U.S. Labor Department releases its monthly jobs report — a key indicator of growth that is under even greater scrutiny ahead of the U.S. presidential election next month.

Economists forecast that the unemployment rate edged up last month to 8.2 percent from 8.1 percent, according to a survey by FactSet. Employers are expected to have added 111,000 jobs. That would be an improvement from the 96,000 jobs gained in August. But that is still barely enough to keep up with growth in the working-age population.

Britain's FTSE 100 index rose 0.2 percent to 5,839.89. Germany's DAX added 0.3 percent to 7,325.90 and France's CAC-40 gained 0.4 percent to 3,415.72. Wall Street, however, was set to fall slightly. Dow Jones industrial futures fell 0.1 percent to 13,494 and S&P 500 futures were less than 1 point down to 1,455.20.

Asian stocks posted gains earlier in the day. Japan's Nikkei 225 index closed 0.4 percent at 8,863.30 after the Bank of Japan announced no change in the country's key interest rate following a two-day policy meeting.

South Korea's Kospi gained 0.1 percent to 1,995.17 and Hong Kong's Hang Seng added 0.5 percent to 21,012.38. Benchmarks in Singapore, Indonesia and New Zealand rose. Markets in China are closed for a public holiday.

Despite global economic woes — including a debt crisis in Europe and a growth slowdown in China — stock markets have gained ground, thanks in part to investment optimism fueled by the actions of the U.S. Federal Reserve and other central banks.

The Fed, for example, has undertaken three rounds of bond-buying, known as quantitative easing, to help prop up a faltering U.S. economy. The move injects money into the system that can be lent out and spur growth. Ultralow interest rates are intended to encourage home purchases and reflate the weak U.S. housing market.

But some analysts said having so much money sloshing around the global economy runs the risk of creating asset bubbles and overloading governments with debt that they cannot repay.

"Stock markets in Asia are on a steroid high. Because of quantitative easing, the flood of liquidity is creating asset bubbles," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

"No one has the ability to really implement meaningful reform, which is really to curb spending on welfare and curb the power of the unions," Lun said. "Those are two fundamental reforms that governments never have the courage to do."

Among Japanese stocks, Toyota Motor Corp. fell 1.6 percent while Nissan Motor Co. lost 1.5 percent. Nikon Corp. slid 4.8 percent.

Hong Kong-listed GOME Electrical Appliances Holding jumped 4.8 percent. China Shipping Container Lines Co. gained 4.9 percent.

Benchmark oil for November delivery was down 35 cents to $91.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.57 to finish at $91.71 per barrel on the Nymex on Thursday.

In currencies, the euro fell slightly to $1.3005 from $1.3018 late Thursday in New York. The dollar fell to 78.40 yen from 78.50 yen.

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