U.S. stocks ended lower on Friday as a spike in oil prices (driven by deepening unrest in Libya) overshadowed a strong February jobs report.
The Dow Jones Industrial Average tumbled 88.32 points, or 0.72 percent, to 12,169.88. The S&P 500 index dropped 9.82 points, or 0.74 percent, to 1,321.15. The Nasdaq composite index slipped 14.07 points, or 0.50 percent, to 2,784.67.
Crude oil futures in New York climbed by more than 2.6 percent to almost $105 a barrel, the highest such level since September 2008. The potential for a political stalemate in Libya is raising fears that oil production will be truncated and higher energy prices will derail the global economic recovery.
On the bright side, the number of unemployed people in the US fell unexpectedly in February, indicating that the labor market is strengthening. The unemployment rate fell to 8.9 percent in February from 9 percent in January, while markets had expected the jobless rate to rise to 9.1 percent in the month. February’s decline in unemployment rate was the third consecutive monthly decrease.
Separately, the labor department data showed that nonfarm payroll employment rose by 192,000 in February, while the markets had expected an increase of 180,000.
Financial stocks were especially hut hard – Citigroup (NYSE: C) fell 2.99 percent, while Bank of America (NYSE: BAC) lost 1.05 percent.
Shares of Marvell Technology Group Ltd. (NASDAQ:MRVL) plunged 11.47 percent as its fourth quarter earnings and revenue missed Street view.
Bond prices climbed as the yield on the 10-year Treasury note fell to 3.49 percent.
European stock markets declined in early trade on Monday, following declines in Asian markets on higher crude oil prices.
The Stoxx Europe 600 Index fell 0.22 percent to 281.28. DAX30 declined 32.90 points or 0.46 percent to 7,146.00, CAC 40 declined 18.55 points or 0.46 percent 4,001.66 and the FTSE 100 declined 10.32 points or 0.17 percent to 5980.07.
Moody's Investors Service on Monday lowered Greece's government bond ratings to B1 from Ba1, and assigned a negative outlook to the rating.
LVMH Moet Hennessy Louis Vuitton declined 0.89 percent after the company agreed to take over Italian jeweler Bulgari.
The euro declined 0.2 percent to 1.3959 against dollar and yen gained 0.43 percent against euro. Crude oil futures gained 1.66 percent to $106.15 per barrel and gold futures gained 0.61 percent to $1,437.30 an ounce.
Asian stock markets declined first time in three days on Monday as sentiment was dampened by higher oil prices amid continuing political unrest in the Middle East.
Oil futures in Asia trade climbed 1.84 percent to more than $106.34 per barrel – the highest since September 2008 -- on fears that Libyan turmoil will disrupt supply. Gold futures advanced 0.59 percent to $1,437.10 an ounce.
Tokyo shares fell, led by declines from exporters. Benchmark index Nikkei declined 1.76 percent or 188.64 points to 10,505.02.
Canon Inc., which gets most of its revenue from overseas, declined 2.41 percent to 3,840 yen and Sony Corp. fell 1.74 percent to 2,926 yen, while Toyota Motor, the world’s largest carmaker, declined 2.37 percent to 3,695 yen.
The foreign minister of Japan, Seiji Maehara, resigned after revelations emerged that he accepted a political donation from a foreign source (which is illegal according to Japanese law). Maehara admitted he took a 50,000 yen ($610) donation per year between 2005 and 2008 and again in 2010 from a South Korean citizen resident in Japan.
Hong Kong’s Hang Seng index declined 11.62 points or 0.05 percent to 23,397.24. BaWang International Group slumped 4.07 percent to HK$2.12 and Angang Steel fell 3.37 percent to HK$10.32 after BNP Paribas cut its rating.
Meanwhile, Chinese stocks advanced, led by gains from consumer and energy companies after the government said domestic consumption will drive economic growth. Chinese Shanghai composite gained 1.76 percent or 51.76 points to 2,994.07. PetroChina gained 2.62 percent and Shenhua Energy surged 10.04 percent.
South Korean shares ended lower on Monday, led by declines from transport and technology companies. Benchmark Seoul composite declined 24.41 points or 1.22 percent to 1,980.27.
Korean Air Line declined 3.14 percent and Asiana Airlines plunged 6.09 percent due to higher crude oil prices. Samsung Electronics slumped 4.12 percent on speculation that its first quarter earnings will fall short of analysts’ expectation due to weak display business.
The Global Business News LeaderSunday, Mar 06, 2011
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