Stocks around the world edged higher yesterday on robust earnings, with consumer staples results boosting Wall Street, though a trade spat between the US and China and tepid US jobs numbers capped gains and weighed down the dollar.
US job growth slowed more than expected in July as employment in transportation and utilities fell, but analysts said the numbers didn’t change their expectations for a September interest rate hike.
“The jobs report doesn't change the strength of the job market, it’s just disappointing this time,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said.
Market participants were still fixed on an escalating trade dispute between the US and China, which proposed new tariffs on $60 billion worth of US goods.
“The trade war fears are probably going to overshadow the jobs report,” Mr Cardillo said.
The Dow Jones Industrial Average rose 52.93 points, or 0.21 per cent, to 25,379.09, the S&P 500 gained 4.43 points, or 0.16 per cent, to 2,831.65 and the Nasdaq Composite dropped 6.84 points, or 0.09 per cent, to 7,795.85.
The S&P consumer staples sector rose 0.8 per cent and led the gains among major S&P sectors, after getting a boost from Kraft Heinz Co earnings. Kraft Heinz jumped 5.7 per cent after beating profit and revenue estimates.
The MSCI gauge of stocks across the globe gained 0.22 per cent, while the pan-European FTSEurofirst 300 index rose 0.59 per cent.
While a tech-led rally on Wall Street overnight filtered through to Asian stock markets, gains were capped by the trade tensions. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.22 per cent.
According to Bespoke Investment Group, mentions of tariffs in S&P 500 company earnings reports for the second quarter have more than doubled from the first quarter of this year.
Following news of China’s retaliatory tariffs and the US jobs data, yields on seven-year notes led the fall in US government bond yields across maturities.
The five-, seven- and 10-year note yields all fell more than two basis points in midmorning trade, with the seven-year yield down 2.5 basis points from late Thursday to 2.910 per cent. The benchmark 10-year note yield was last at 2.964 per cent, down 2.2 basis points from a day earlier.
In currencies, the US dollar slipped against the yuan after the Chinese central bank raised the forward reserve requirement for foreign exchange in a bid to stabilize its currency. The dollar was 0.53 per cent lower against the offshore yuan.
Oil prices edged lower after the previous day’s rally, which was driven by an industry report suggesting US crude stockpiles would soon decline again after a surprise rise in the latest week.