Weak US hiring report sends stocks lower on Wall Street – U.S. News & World Report

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By KELVIN CHAN, AP Business Writer

HONG KONG (AP) — Most Asian stocks drifted lower in holiday-thinned trade after some uneven economic data sent investors into a holding pattern.

KEEPING SCORE: Hong Kong’s Hang Seng slipped 0.3 percent to 20,469.10 while the Shanghai Composite Index in mainland China dipped 0.2 percent to 2,986.00. Australia’s S&P/ASX 200 crept up less than 0.1 percent to 5,273.80. Taiwan’s benchmark fell while New Zealand’s rose and those in Southeast Asia were mixed. Markets were closed in South Korea and Japan for holidays.

US ECONOMY: Data releases gave mixed signals for the world’s No. 1 economy. A private survey by the Institute for Supply Management found growth at service economies in April accelerating to its high level this year. While this could be a sign that the broader economy is on an upswing, another survey by payroll processor ADP found that U.S. companies added jobs at the slowest pace in three years in April, indicating that slower growth and rocky financial markets might be weighing on hiring. Investors are now looking ahead to an official U.S. employment report on Friday that could give a clearer sign of economic growth and influence thinking on interest rates among Fed policymakers. Economists expect the report to show jobs grew by 200,000 last month while the unemployment rate stays at 5 percent.

MARKET INSIGHT: “On the surface, the poor ADP employment data and slightly stronger than expected ISM non-manufacturing and factory orders muddled the US growth outlook,” said Bernard Aw, market strategist at IG in Singapore. “The logical reaction should be lower expectations of Fed moving on rates next month,” however the dollar has defied those expectations by continuing to strengthen.

CHINA INDEX: The services industry expanded for a second month although at a slower rate in April, according to a survey of Chinese purchasing managers. The Caixin/Markit index fell to 50.8 last month from 51.3 the month before, based on a 100-point scale on which numbers below 50 indicate contraction. The results indicate that momentum is slowing in China’s service sector, which has been a bright spot for China’s slowing economy as manufacturing remains weak.

WALL STREET: Major U.S. indexes fell for a second day, with the Dow Jones industrial average down 0.6 percent to 17,651.26 while the Standard & Poor’s 500 index slid 0.6 percent to 2,051.12. The Nasdaq composite fell 0.8 percent to 4,725.64.

ENERGY: Crude oil prices jumped, driven by what analysts said were concerns that output could be crimped after a massive fire swept through the Canadian oil sands hub of Fort McMurray, Alberta. Benchmark U.S. crude oil rose $1, or 2.2 percent, to $44.78 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 13 cents to close at $43.78 per barrel on Wednesday. Brent crude, used to price international oils, gained 72 cents to $45.34 a barrel in London.

CURRENCIES: The dollar rose to 107.10 yen from 106.95 yen late Wednesday. The euro fell to $1.1490 from $1.1494.

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