World stocks mostly higher ahead of US jobs report

[August 06, 2010]  SINGAPORE (AP) -- World stock markets were mostly higher Friday as investors looked to monthly employment figures for clues about the strength of the U.S. economic recovery.

In early trading in Europe, Britain's FTSE 100 rose 0.5 percent, Germany's DAX index gained 0.5 percent, and France's CAC-40 advanced 0.5 percent. Futures pointed to modest gains on Wall Street with Dow futures up 11 points, or 0.1 percent, at 10,646.00.

But the mood in Asia was cautious after new unemployment benefit claims in the U.S. rose to their highest level in four months. Investors are now awaiting the broader U.S. jobs report due later Friday that will give a key reading on the health of the world's biggest economy.

Analysts expect the Labor Department to say private employers hired 90,000 workers in July, a slight increase from the 83,000 hired in June. But the unemployment rate will likely rise to 9.6 percent from 9.5 percent because of government layoffs tied to cutting temporary census jobs.

Japan's benchmark Nikkei 225 stock index lost 0.1 percent to 9,642.12 while Hong Kong's Hang Seng was up 0.6 percent to 21,678.80.

South Korea's Kospi was little changed at 1,783.83. Markets in India, Thailand and Indonesia gained while Malaysia and Singapore dropped.

The Shanghai Composite Index rose 1.4 percent to 2,658.39 as investors mulled how much a slowdown in government spending and tighter monetary policy could cool China's economic growth.

"Talk of China's growth slowdown is much exaggerated," Rabobank said in a report.

"After last year's stimulus frenzy, policymakers have been attempting to engineer a slowdown and this should be applauded as a timely removal of excess monetary and fiscal stimulus, rather than a sign of China's growth story coming undone."

Stocks retreated in the U.S. on Thursday amid the discouraging news on unemployment claims.

The U.S. government said first-time claims for unemployment benefits last week jumped to their highest level in four months in a grim reminder of how weak the U.S. job market remains. Analysts had expected a small fall in jobless claims.

The Dow fell 5.45, or 0.1 percent, to 10,674.98. The Standard & Poor's 500 index fell 1.43, or 0.1 percent, to 1,125.81, while the Nasdaq composite index fell 10.51, or 0.5 percent, to 2,293.06.

In currencies, the dollar rose to 86.09 yen from 85.87 yen in New York late Thursday. The euro rose to $1.3187 from $1.3181.

Benchmark crude for September delivery was up 38 cents at $82.39 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 46 cents to settle at $82.01 on Thursday.

[Associated Press; By ALEX KENNEDY]

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