US stocks rise a day after sharp plunge, lifted by job gains

No surprise that given the today’s rebound in the global stock markets, gold is edging about 1% lower.

That was the opinion of some US investment strategists after another free fall on China’s main stock market reverberated around the globe Thursday and sent the Dow Jones average to a loss of almost 400 points. Trading in China was automatically suspended as a result. That set off a slump in Asian and European stocks.

The Dow lost 1,079 points this week, or over 6%, as fears about China and crashing oil prices dealt Wall Street a painful one-two blow. That bolstered United States index futures, with contracts on the S&P 500 advancing 0.8 per cent to 1,948.50. The Nasdaq composite fell 89 points, or 1.9 percent, to 4,746. Japan’s Nikkei 225 Index fell by 0.4 percent, while Hong Kong’s Hang Seng Index rose by 0.6 percent.

The FTSE 100 has opened higher after Chinese stocks ended a “wild” trading day in positive territory. It sank 70 cents, or 2.1 percent, to $33.27, its lowest close since February 2004.

Shares of industrial and technology companies such as Boeing and Apple that do a lot of business in China fell sharply this week. Heavy-equipment maker Caterpillar is seeing sales weakening not only in China but also in Brazil and other countries that dig out the commodities China used to be so hungry for. China is a key market for Germany’s BMW and Mercedes Benz, for example, and Germany’s DAX index is down 7.1 percent this week.

“Markets will be waiting to see the Chinese government’s determination to prop up the stock market and the currency into next week before any major recovery rally is likely to be seen”, he said.

Investors also braced for Friday’s US government jobs report, which could show how well-insulated the USA economy is from global stresses.

China on Thursday chose to suspend its market circuit breaker system that resulted in gains for major stock indexes as well as other stock markets in Asia. The halts, which went into effect at the beginning of the year, were triggered twice this week.

“Worries about China, the endless drop in oil prices and even new geopolitical tensions pounded the markets, punishing risk assets with a flight to quality that was in full swing”, they wrote, in a research note entitled: What’s the Chinese for “ouch”?

In addition, low oil prices amid Middle East conflict have also affected South Korea’s economy. USA crude dipped 48 cents to $32.79 a barrel in NY and Brent crude, a benchmark for worldwide oils, lost 85 cents, or 2.5 percent, to $32.90 a barrel in London. Evans added that slower growth in the number of available workers, an aging population and possible slower technological progress compared to the last 20 years were among the factors that could lead to what he described as the troubling feature of lower long-run growth. The average of new claims over the past month, meanwhile, slipped a smaller 1,250 to 275,750. WTI fell 1 per cent to $US32.95 a barrel after gaining more than 3 per cent earlier. Marathon Oil fell 61 cents, or 5.7 percent, to $10.07 and Williams Cos. gave up 95 cents, or 4.6 percent, to $19.67.

Some retail stocks performed well.

Teen retailer Zumiez raised its forecast for the fiscal fourth quarter, and its stock jumped $2.44, or 16.2 percent, to $17.52.

The CBOE Volatility Index, the market’s favoured gauge of Wall Street anxiety, was up 22.3 percent at 25.19, its highest level in about three weeks.

Nonfarm payrolls surged in December and unemployment rate held steady at five per cent.