U.S. Stocks Drop After Wages Data as Oil Rises
Stocks rose for a second day and the benchmark index of commodities climbed a two year high on evidence of economic growth. Photographer: Jin Lee/Bloomberg
March 4 (Bloomberg) -- Scott Brown, chief economist at Raymond James & Associates Inc., discusses the February employment report and the outlook for the economy. Brown speaks with Betty Liu on Bloomberg Television's "In the Loop." Former Treasury Secretary Paul O'Neill, Jon Erlichman and Michael McKee also speak. (Source: Bloomberg)
March 3 (Bloomberg) -- Marc Faber, publisher of the Gloom, Boom & Doom report, talks about the outlook for global stock markets. Faber also discusses the U.S. economy and commodity markets. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)
U.S. stocks fell, a day after the biggest rally in three months, and European shares erased gains after government jobs data signaled American wage growth may fail to keep up with higher energy costs. Oil climbed as unrest in Libya stoked concern supply disruptions will persist.
The Standard & Poor’s 500 Index lost 0.3 percent to 1,326.45 at 10:07 a.m. in New York, after rallying 1.7 percent yesterday, as two stocks dropped for each that rose on U.S. exchanges. The Stoxx Europe 600 Index slipped 0.3 percent. Crude rose 1.3 percent to $103.24 a barrel in New York and gold gained 0.8 percent to $1,427.40. The S&P GSCI index of 24 commodities climbed to the highest level since August 2008.
U.S. equities trimmed a weekly advance as the U.S. unemployment rate fell to 8.9 percent in February, the lowest level since April 2009, and average hourly earnings were unchanged, the Labor Department said. Libya’s rebels prepared to fight off fresh attacks from forces loyal to Muammar Qaddafi and President Barack Obama said the U.S. military is ready to protect civilians caught up in the conflict.
“I’m concerned about hourly earnings being flat,” said Paul Zemsky, New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “With rising gas prices this means that consumers’ real income is not increasing, which will put downward pressure on consumption. I don’t think this is a good number for the equity market.”
Jobless Rate
U.S. employers added 192,000 workers last month, following a 63,000 increase in January and compared with the 196,000 median estimate of economists surveyed by Bloomberg News, Labor Department figures showed. The jobless rate was predicted to increase to 9.1 percent, according to a Bloomberg survey.
Separate data from the Commerce Department showed orders to U.S. factories climbed 3.1 percent in January, the most in more than four years.
Goldman Sachs Group Inc. and Citigroup Inc. lost more than 1.4 percent to help lead declines in the largest U.S. companies after Bank of America Corp. cut its ratings on both banks. Wal- Mart Stores Inc. rose after the world’s largest retailer increased its dividend.
Cie. Nationale a Portefeuille SA jumped 19 percent in Brussels trading after Belgian billionaire Albert Frere and BNP Paribas SA offered 1.5 billion euros ($2.1 billion) to buy out minority investors in the investment company. WPP Plc (WPP) lost 3.1 percent as the world’s biggest advertising agency said sales will fail to grow faster in 2011.
Asia’s Rally
The MSCI AC Asia Pacific (MXAP) Index rose 1.1 percent, with Japan’s Nikkei-225 (NKY) Stock Average rallying 1 percent. The MSCI Emerging Markets Index added 0.9 percent, extending this week’s advance to 3.5 percent, its best performance for the period in three months. South Korea’s Kospi Index (KOSPI) climbing 1.7 percent. Chinese stocks jumped 1.4 percent to a more than three-month high before the country’s annual government congress which starts tomorrow. Benchmark gauges in Indonesia, Malaysia and the Philippines rose more than 1 percent.
Brent crude climbed 0.7 percent to $115.61 a barrel in London. Jet fuel, diesel and gasoline have surpassed $1,000 a metric ton in European wholesale markets for the first time in more than two years, as Libyan exports decline. At the pump, U.K. gasoline retail prices have been at record levels so far this year, averaging 128.8 pence a liter ($7.92 a gallon) in February.
Wheat climbed 1.2 percent on dry weather in the U.S. Aluminum advanced as much as 0.3 percent and cotton jumped 3.4 percent to a record $2.127 a pound.
The 10-year Treasury yield rose one basis point to 3.57 percent, while the yield on the two-year note decreased one basis point to 0.75 percent.
The Dollar Index, which tracks the U.S. currency against those of six trading partners, was little changed at 76.489, after slipping as low as 76.437. The yen weakened 0.3 percent against the dollar and 0.5 percent versus the euro.
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