Proactiveinvestors recommends
Pdf

FTSE 100 takes weekly gain to 4.3% as US jobs data beats expectations

4th Sep 2010, 1:36 pm FTSE 100 takes weekly gain to 4.3% as US jobs data beats expectations

The FTSE 100 was back on the comeback trail this week, surging 4.3% after a bath of positive US data eased fears of a double dip recession that have dominated the mood in the markets for the past few weeks, prompting investors to switch back to buying mode. The blue chip index added 1.1% on the last day of trading after US non-payrolls came in better than expected, showing just 54,000 jobs lost, while analysts expected a decrease of more than 100,000. Just as was projected, the unemployment rate climbed to 9.6% from 9.5%.

Temporary power provider Aggreko (LON:AGK) closed on top of the leaderboard on Friday after advancing 5.5% on takeover speculation. Telecom company Cable & Wireless Worldwide (LON:CW) followed, climbing 4.5%. Banking group Barclays (LON:BARC) added 4.2%. Software developer Autonomy Corp (LON:AU) and copper miner Kazakhmys (LON:KAZ) rose 3.4% and 3% respectively. Defence and aerospace systems manufacturer BAE Systems (LON:BA) and insurer Old Mutual (LON:OML) advanced 2.5%. Oil and gas supermajor BP (LON:BP), interdealer broker ICAP (LON:IAP) and medical devices manufacturer Smith & Nephew (LON:SN) added just over 2%.

Oil and gas producer Tullow Oil (LON:TLW) was the heaviest faller with a 2.4% loss. Gold miners African Barrick Gold (LON:ABG) and Randgold Resources (LON:RRS) declined 1.6% and 1.1% respectively after gold dipped on the jobs data.

Likewise, US shares were on the rise on Friday with the Dow Jones Industrial Average rallying 1.25%, while the broader S&P 500 index advanced 1.3% and the technology heavy NASDAQ composite surged 1.5%.

Cisco Systems (NYSE:CSCO) and JP Morgan Chase (NYSE:JPM) were the top performers in the Dow Jones index with gains of over 2.5%. Walt Disney (NYSE:DIS) followed, tacking on 2.2%.

The main stock market indexes in Europe and the US were steady ahead of Friday’s jobs figures despite weaker than expected data released by the Labor Department the day before, revealing that initial claims declined by 6,000 to 472,000 last week. Continuing claims dropped by 23,000 to 4.456 million.

The FTSE 100 had a positive start to the week, posting a small gain on Tuesday after the Conference Board said that its consumer confidence index climbed from 51 to 53.5. This helped shake off weaker than expected US personal income and manufacturing figures. The Chicago PMI (purchasing managers index) declined from 62.3% to 56.7%, reflecting a slowdown in the rate of expansion of manufacturing activity in the Midwest, while personal income increased by just 0.2% in July, failing to match a 0.4% rise in personal spending in the same month. As a result, the savings rate fell from 6.2% to 5.9%.

The bulk of this week’s gains came on Wednesday, when the FTSE 100 rallied 2.7% on positive news from China, whose PMI (purchasing managers index) showed expansion of the manufacturing sector for the first time in four months. On top of that, Australia’s Q2 GDP grew at the fastest pace in three years, rising 1.2%.

Later that day, the Institute of Supply Management’s (ISM) US manufacturing index was reported to have risen to 56.3 last month, while analysts expected it to decline.

The FTSE 100 is currently projected to open 0.4% higher on Monday.

No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.