World stocks up cautiously ahead of US jobs report

[September 04, 2009]  LONDON (AP) -- World markets mostly rose Friday as investors looked ahead to a key U.S. jobs report for clues about the pace of recovery in the American economy.

Attention also focused on a meeting of finance officials from the world's 20 largest economies starting Friday in London. Governments are expected to signal their commitment to boosting the global economy while acknowledging that recovery will be slow at best.

Germany's DAX was up 56.03 points, or 1.1 percent, at 5,357.45, while Britain's FTSE 100 rose 51.85 points, also 1.1 percent, at 4,848.60. France's CAC-40 gained 25.32 points, or 0.7 percent, to 3,578.83.

Asian markets also were mostly higher, with gains in China but losses in Japan, after U.S. indexes edged up overnight. Wall Street was expected to open higher later in the day.

Gains were limited as many investors were cautious ahead of the U.S. Labor Department's jobs numbers. Economists expect the unemployment rate to edge up to 9.5 percent in August from 9.4 percent, while the number of layoffs is seen slowing to 225,000 from 247,000.

"This would, of course, be an improvement. However, this would also mean that the job destruction process is still going and that it could push up an already high unemployment rate and cap the recovery of private consumption," said Sebastien Barbe, an analyst at Calyon.

Markets also are eyeing the G-20 meeting of finance ministers and central bankers in London for clues as to when economic stimulus measures will be lifted.

Despite nascent signs of recovery, fears remain that curtailing government spending and monetary stimulus too soon could result in a "double dip" recession.

"You're seeing the first signs of positive growth now in this country and countries around the world," said U.S. Treasury Secretary Timothy Geithner. "We've come a very long way, but I think we have to be realistic. We've got a long way to go still."

As the meeting gets under way, however, European countries are trying to focus the talks on a different topic -- limiting bankers' bonuses.

In a joint opinion piece in a Swedish daily on Friday, the finance ministers of Sweden, France, Spain, Germany, Italy, Luxembourg and the Netherlands said bonuses guaranteed for more than a year should be banned. The U.S. has given such proposals a lukewarm response, and has instead pushed for higher capital requirements at banks.

Overall, governments are expected to acknowledge the first signs of economic recovery, but will be careful to not spook markets with suggestions that stimulus measures will be reversed soon.

In Asia, trading was mixed after a jittery few weeks amid worries that the rally in global markets since March may have been overdone. China's stock market, which has been particularly volatile, edged higher by the afternoon.

Hong Kong's Hang Seng index jumped 556.94 points, or 2.8 percent, to 20,318.62, and mainland China's Shanghai Composite index climbed 16.58 points, or 0.6 percent, to 2,861.61 after surging 4.8 percent Thursday.

India's Senex was up nearly 2 percent, and Singapore's Straits Times index rose nearly 1 percent.

Japan and South Korean stocks slipped. Tokyo's Nikkei 225 index declined 27.53 points, or 0.3 percent, to 10,187.11, while the Kospi dipped 0.3 percent to 1,608.90.

"The movement seems to be very much sideways because the investors are waiting for more indications such as the U.S. employment data to be released tonight," said Ben Kwong Man Bun, the chief operating officer at KGI Securities in Hong Kong.

"It's stabilizing a bit, but there's too much uncertainty about whether rebound can be sustained," he said.

U.S. stock index futures were up somewhat, suggesting a tepid open on Wall Street Friday.

The Dow Jones industrial average futures were up 24 points at 9,354.00, while the Standard & Poor's 500 futures were up 3 points to 1,004.70.

On Thursday, U.S. stocks gained in light trading, with the Dow rising 0.7 percent and the S&P 500 climbing 0.9 percent.

Oil prices rose, with benchmark oil for October delivery gaining 57 cents to $68.53 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar edged up to 92.83 yen from 92.56 yen late Thursday in New York. The euro rose to $1.4260 from $1.4254.

[Associated Press; By CARLO PIOVANO]

Associated Press Writer Rod McGuirk in Canberra, Australia contributed to this report.

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