World stocks mixed after US joblessness drops

Associated Press

BANGKOK (AP) — World stock markets were mixed Friday after U.S. jobless claims fell sharply, with analysts saying more data was needed to confirm an improvement in the world's No. 1 economy.

Weekly applications for unemployment aid fell to their lowest since February 2008, the U.S. government said Thursday. The positive figures follow a report last week that said the unemployment rate fell in September to 7.8 percent — below 8 percent for the first time since January 2009.

Still, the job news isn't all that strong. Unemployment is much higher than before the financial crisis. In February 2008, the rate stood at 4.9 percent. Additionally, some unemployed workers have simply given up looking for work, which can make the jobless numbers seem better than they really are.

"I think you need to wait for a few months to see more figures to confirm the jobs recovery in the U.S.," said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

European stocks fell in early trading. Britain's FTSE 10 dropped 0.2 percent to 5,815.68. Germany's DAX lost 0.3 percent to 7,258.40 and France's CAC-40 shed 0.3 percent at 3,403.29.

But U.S. stock futures augured gains on Wall Street. Dow Jones industrial futures rose 0.1 percent to 13,283 and S&P 500 futures gained 0.2 percent to 1,431.

The picture was mixed in Asia. Japan's Nikkei 225 index closed nearly 0.2 percent lower at 8,534.12. Telephone company Softbank plunged 16.9 percent in Tokyo on news that it is in talks to take a substantial stake in U.S. carrier Sprint Nextel Corp. Fast Retailing fell 9.9 percent after the Uniqlo casual clothing firm reported a first-half operating profit that missed market expectations, Kyodo News reported.

Hong Kong's Hang Seng advanced 0.7 percent to 21,136.43 and Australia's S&P/ASX 200 added slightly less than 0.1 percent to 4,486.60. South Korea's Kospi was flat at 1,933.26.

One big unknown is Spain and whether the government of the recession-mired country will ask for a financial bailout.

Last month, the European Central Bank agreed to buy unlimited amounts of debt by struggling European countries to help lower their borrowing costs. But the governments first need to apply for bailout.

Spain has not applied. Instead, the government has introduced a series of austerity measures in a bid to bring down its deficit and convince investors it can manage its finances without outside help.

"For the day ahead, attention will likely shift to the US earnings reports, with JP Morgan and Wells Fargo in focus while uncertainty about the Spanish bailout will remain as a significant downside risk in the eurozone, leaving sentiment cautious," analysts at Credit Agricole CIB in Hong Kong said in a market commentary.

Macau gambling shares did well following what analysts said was reportedly good revenues following the China's Golden Week holiday. Sands China Ltd. jumped 4.9 percent and Wynn Macau Ltd. rose 2 percent.

Benchmark oil for November delivery was up 26 cents to $92.33 per barrel in electronic trading on the New York Mercantile Exchange.

In currency trading, the euro rose to $1.2969 from $1.2934 late Thursday in New York. The dollar rose at 78.44 yen from 78.31 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson.

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