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Stocks steady after US jobs data confusion

Stocks steady after US jobs data confusion

A smaller than anticipated increase in the number of U.S. jobs created in January had little impact in the markets Friday as it was coupled with news that the unemployment rate fell to its lowest level in nearly two years.
The Labor Department reported that employers, both private and public, added only 36,000 jobs during the month. That was way below expectations for payrolls growth of 140,000 but may have been due to the fact that around 700,000 people couldn't get to work because of the weather.
Though the headline payrolls number disappointed, another indicator _ based on different figures _ suggested a marked improvement in the labor market. The unemployment rate fell to 9 percent, its lowest level since April 2009, from 9.4 percent.
It's the second month running that the U.S. jobs report has provided a confusing picture of the state of the U.S. labor market. Many are blaming the heavy snow in some parts of the country for the diverging statistics.
"February's report should hopefully offer some slightly more reliable insights, but not if the current weather trends persist into survey week," said Marc Ostwald, markets strategist at Monument Securities.
The contradictory data may explain why the response in stock markets was relatively muted.
In Europe, the three main indexes drifted down from earlier highs in the wake of the figures. Britain's FTSE 100 closed up 0.2 percent at 5,997.38 while Germany's DAX rose 0.3 percent to 7,216.21. The CAC-40 was 0.3 percent higher at 4,047.21.
In the U.S., the Dow Jones industrial average was down around 6 points at 12,056 around midday New York time while the broader Standard & Poor's 500 index fell a little over a point to 1,305.
The figures came as investors are trying to gauge when the Federal Reserve will start tightening policy.
As well as having cut interest rates to near zero percent, the Fed is in the middle of its second monetary stimulus program. It's current $600 billion injection into the U.S. economy is due to expire in June and investors are looking to see if the central bank decides to extend it beyond then.
Still looming over markets was the situation in Cairo, where protesters and regime supporters continue to skirmish amid speculation over when President Hosni Mubarak might depart. With an increased army presence in the center of Cairo and Mubarak under mounting pressure to quit, tensions remain elevated.
The turmoil in Egypt has been most evident in the oil markets, as traders worry the unrest might spread to other countries and affect the Suez Canal _ a key route for oil tankers and cargo ships as they steer from the Persian Gulf to the major oil-consuming nations in Europe.
"The unrest in Egypt has reportedly not yet affected oil flows on the Suez-Mediterranean oil pipeline or shipping in the Suez Canal, but markets remain wary about potential disruption and the prospects of pro-democracy demonstrations moving further into oil producing mid-East countries," said Jane Foley, an analyst at Rabobank International.
By mid afternoon London time, benchmark crude for March delivery on the New York Mercantile Exchange was down 47 cents at $90.05 a barrel. Despite the modest decline, oil prices are not far off their highest levels since 2008.
That's a concern because sky-high oil prices raise inflationary pressures in the world economy and also potentially depress economic growth _ high inflation and low growth, commonly known as stagflation, is an unappetizing brew for policymakers around the world.
Elsewhere, investors are keeping a close watch on a meeting of EU leaders Friday. Though the summit could be overwhelmed by discussions about Egypt, there are hopes that some agreements may emerge with regard to Europe's debt crisis amid expectations that Germany is preparing to table a grand bargain that will see it pump more cash into the eurozone's more indebted economies in return for stricter budgetary controls.
The euro, which has been fairly buoyant of late, partly on hopes of a resolution to Europe's debt crisis, was down 0.5 percent at $1.3570.
Earlier in Asia, many markets were closed for the Lunar New Year holidays, including Hong Kong, mainland China, South Korea, Malaysia, Singapore and Taiwan.
Japan's Nikkei 225 stock average, meanwhile, rose 1 percent to close at 10,543.52, while Australia's S&P/ASX 200 rose 0.9 percent to 4,862.70.
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Pamela Sampson in Bangkok contributed to this report.


Updated : 2021-10-17 04:27 GMT+08:00