On 03 March, 2016 – Global stocks continue to climb

Investors were cautious ahead of the US employment report due Friday AM US ET. 

United States

Stocks traded in a narrow range as investors waited for Friday’s US employment report. The three indices were higher on the day, building on a recent recovery as a rally in energy stocks offsets dips in health and technology shares. The Dow Jones industrials were up 0.3 percent, the S&P gained 0.35 percent and the Nasdaq edged up 0.1 percent.

Herbalife dropped after the company said it had overstated growth in the number of new members in some instances due to a database error. Kroger retreated after quarterly sales missed estimates. Small losses for big drug companies pulled health care stocks lower. Johnson & Johnson declined as did Pfizer, Merck, Allergan and Biogen. Costco Wholesale was down after the company’s profit and sales came up short of forecasts. Joy Global advanced after the company’s first quarter sales were stronger than expected. Stratasys gained after the company’s fourth quarter results were better than expected and it gave a strong forecast for 2016. Microsoft declined.

In economic news, weekly jobless claims were up 6,000 to 278,000. ISM said its nonmanufacturing index edged down to 53.4 in February from 53.5. January factory orders climbed 1.6 percent with durable orders jumping 4.7 percent.

These data reflect observations at 4:00 PM US ET. Gold at the afternoon London fixing was up US$11.05 to US$1,250.25. Copper futures were up 1.5 percent to US$2.21. WTI spot crude was up 4 US cents to US$34.70. Dated Brent spot crude was up 22 US cents to US$37.15. The US dollar was up against the yen. It declined against the euro, pound, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.8 percent. The yield on US Treasury 30 year bond was down 2 basis points to 2.66 percent while the yield on the 10 year note slipped 1 basis point to 1.83 percent.

Europe

Shares were mixed Thursday in choppy trading. The markets fluctuated between modest gains and losses through the session, as investors were cautious ahead of Friday's US employment report. The FTSE and DAX were down 0.3 percent, the CAC declined 0.2 percent and the SMI dropped 1.0 percent.

Crude oil prices were not much of a factor with prices hovering near the flat line. Bank stocks extended gains from the previous session as did resource stocks. In addition to Friday's U.S. jobs report, traders are also looking forward to the European Central Bank meeting next week.

Evonik Industries plunged after saying it expects a decline in sales this year. Both Deutsche Bank and Commerzbank increased. In Paris, outdoor advertising company JC Decaux advanced after reporting a rise in full-year net income and lifting its dividend. Technip advanced but Total slipped. Peugeot gained. In London, BHP Billiton was up after clinching a deal with Brazilian authorities on the cleanup of a fatal iron ore mine disaster in November.

Building materials group CRH climbed after reporting a 36 percent jump in pre-tax profits last year, driven by a strong performance at its heritage businesses. Schroders was up after lifting its dividend and announcing a management reshuffle. Admiral Group advanced after the company announced a six percent increase in full year 2015 pre-tax group profit to £377 million from £357 million a year ago. Supermarket operator Ahold retreated in Amsterdam after reporting better than expected earnings for the fourth quarter. ArcelorMittal climbed on reports it plans to cut its French production. Healthcare stocks such as GlaxoSmithKline and AstraZeneca fell after credit rating agency Moody's cut its outlook on the global pharmaceuticals industry to "stable" from "positive".

Eurozone retail sales climbed 0.4 percent on the month after rising a revised 0.6 percent in December. Eurozone private sector growth eased to a 13-month low in February. The composite output index slid to 53 in February from 53.6 in January — the lowest reading since January 2015. The UK services PMI dropped to 52.7 in February from 55.6 in the previous month. This was the lowest score since March 2013.

Asia Pacific

Stocks were mostly higher for a third straight session to hit a seven-week high Thursday thanks to overnight gains in the US and higher oil prices in Asian deals underpinning investor sentiment.

The Shanghai Composite was up 0.4 percent on optimism that China's leaders will signal support for the economy as the annual meeting of China's political advisory body got underway in Beijing. Investors shrugged off mixed data from Caixin, which showed that China's service sector growth slowed in February on weaker demand. The yuan firmed against the dollar after hitting a near three-week low the previous day as Moody's Investors Service lowered the outlook on China's government credit ratings. However, the Hang Seng retreated 0.3 percent.

The Nikkei added 1.3 percent as the yen declined and a recovery in oil prices helped investors shrug off sluggish services sector data. The February services PMI hit a seven month low in February as new business weakened. Banks posted broad-based gains. Toshiba jumped on reports that it is seeking additional loans of about $1.8 billion to fund restructuring. Mitsui OSK Lines and Nippon Yusen KK advanced as the Baltic Exchange's main sea freight index continued to rise.

Both the S&P/ASX and All Ordinaries added 1.2 percent. BHP Billiton rallied 3.1 percent after clinching a deal with Brazilian authorities on the cleanup of the fatal iron ore mine disaster in November. Rio Tinto and Fortescue Metals also gained on the day. Oil stocks Oil Search, Origin Energy and Santos climbed. The big four banks also advanced. Australia's trade deficit narrowed to A$2.937 billion in January as exports recovered from a big fall the previous month.

The Kospi was up 0.6 percent to its highest level in more than two months, as foreign investors scooped up beaten-down tech and commodity-related shares, drawing support from a rally in a range of commodities and a surge in global equities. The Sensex jumped 1.5 percent. Foreign investors resumed buying after the Budget. The rupee was firm for the fifth day after the International Monetary fund reiterated its forecast for India's GDP growth, saying the recent slump in global oil prices has boosted economic activity, underpinned improvement in the current account and fiscal positions and engendered a sharp decline in inflation.

Global Stock Markets

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.

Looking forward*

Australia reports January retail sales. Italy releases second estimate of fourth quarter GDP. In the US, January international trade and February employment report will be posted.

*Note — all releases are listed in local time.