World markets rise ahead of key US jobs data

[November 06, 2009]  LONDON (AP) -- Stock markets rose Friday ahead of the release of key U.S. jobs data, which markets use to gauge the health of consumer spending in the world's largest economy in the run-up to the year-end holiday season.

In Europe, the FTSE 100 index of leading British shares was up 10.30 points, or 0.2 percent, at 5,135.94 while Germany's DAX rose 4.95 points, or 0.1 percent, to 5,485.87. The CAC-40 in France was 1.78 point, or 0.1 percent, higher at 3,710.51.

The gains in Europe were relatively subdued compared with the performance in Asia earlier in the wake of Thursday's big advance on Wall Street. Japan's Nikkei 225 stock average rose 0.7 percent to 9,789.35 and Hong Kong's index gained 1.6 percent to 21829.72.

On Thursday, the Dow Jones industrial average rose 2.1 percent to close above the 10,000 mark for the first time in 2 weeks, while the broader Standard & Poor's 500 index rose 1.9 percent. At the moment, U.S. stocks were expected to open flat as investors await the payrolls data.

Better-than-expected weekly jobless claims figures Thursday stoked speculation that the payrolls numbers at 1330 GMT (0830 EST) may be better than expected. Analysts forecast a fall of around 175,000 during October, while the unemployment rate is expected to tick up further to, or just below, 10 percent.

Though sizable, the expected job losses are far lower than the 741,000 drop recorded in January, the low point in the U.S. jobs cycle.

The jobs data "will set the tone for this afternoon's trading and be a factor in weather the Dow can hold 10,000 going into the weekend," said Arifa Sheikh-Usmani, an equity trader at Spreadex.

The jobs data often set the stock market tone for a week or two because consumer spending accounts for around for 70 percent of the U.S. economy, making it essential to any global economic recovery.

"An end of year rally is a distinct possibility but what concerns everybody is unemployment and in the U.S. the performance of the retail sector as we head towards Christmas," said David Buik, markets analyst at BGC Partners.

Next week, many of the U.S.'s larger retail operators post results, including Wal-Mart Stores Inc., Abercrombie & Fitch Co., Macy's Inc and JC Penney Inc. to mention just a few.

Elsewhere in Asia, South Korea's benchmark rose 1.3 percent while Australia's main index jumped nearly 2 percent as the central bank more than tripled this year's growth forecast to 1.75 percent from 0.5 percent and strongly hinted at more rate hikes.

Crude prices rose as the stock market rally boosted oil investors' appetite for risk. Benchmark crude for December delivery was up 55 cents to $80.17 a barrel; the contract fell 78 cents overnight.

Gold rose $4.3, or about 0.4 percent, to $1,093.6 an ounce.

The dollar slipped 0.3 percent to 90.50 yen, while the euro rose 0.2 percent to $1.4899.

Currency traders will be keeping a close eye on developments in St. Andrews, Scotland, where the finance ministers of the Group of 20 rich and developing countries are meeting.

Though some ministers may voice concerns about the dollar's continuing fall in value, analysts do not expect to see an explicit reference to currency valuations in the communique that follows the meeting.

"With too many competing views, expect much of the focus of the meeting to be on crisis exit strategies as opposed to foreign exchange," said Brian Dolan, chief currency strategist at Forex.com.

[Associated Press; By PAN PYLAS]

AP Business Writer Kelly Olsen in Seoul contributed to this report.

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