Tag Archives: Economy

Wall Street ends flat as European Central Bank disappoints

(Reuters) – U.S. stock indexes ended a volatile session little changed on Thursday after the European Central Bank reduced interest rates but ECB chief Mario Draghi confounded investors who expected multiple rate cuts by saying more were unlikely.

Stocks jumped early in the day after the ECB pushed its deposit rate deeper into negative territory and increased its asset-buying program to 80 billion euros a month from 60 billion in an effort to boost growth in the region.

“The world was really, really happy with this mainly because we’re all addicted to zero interest rates,” said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh. “It’s free money.”

When Draghi said future cuts would happen only under extreme circumstances, investors expecting even lower rates switched their strategy to risk off, Forrest said.

At the same time, she said, fears that lower interest rates in Europe would harm U.S. banks and negatively impact exports by leading to euro devaluation weighed on the market further.

The Dow Jones industrial average fell 5.23 points, or 0.03 percent, to 16,995.13, the S&P 500 gained 0.31 points, or 0.02 percent, to 1,989.57 and the Nasdaq Composite dropped 12.22 points, or 0.26 percent, to 4,662.16.

U.S. jobless claims fell more than expected last week to their lowest levels since October, pointing to sustained strength in the labor market that should further dispel fears of a recession.

The U.S. Federal Reserve has said it is on track to raise interest rates gradually this year, but its decision remains data-dependent. The Fed is to meet on March 15-16.

Shares of Dollar General were up 10.7 percent to $83.23 after it reported better-than-expected same-store sales growth. Rival Dollar Tree was up 4 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.33-to-1 ratio while on the Nasdaq, a 1.85-to-1 ratio favored decliners.

The S&P 500 posted 30 new 52-week highs and two new lows; the Nasdaq recorded 52 new highs and 70 new lows.

Volume on U.S. exchanges was 8.42 billion shares, compared with the 8.54 billion daily average over the last 20 sessions.

Crude oil prices, a major driver of the market so far this year, delinked from stocks, at least for this session. Brent futures fell more than 2 percent after Reuters reported that a proposed meeting between major oil producers to discuss an output cut was unlikely to take place without Iran’s participation. U.S. crude fell 1 percent.

(Reporting by Laila Kearney; Editing by Dan Grebler)

Oil rally lifts Wall Street again, extending tight correlation

(Reuters) – U.S. stocks rose in low volume on Wednesday, led once more by the direction of the price of oil and energy sector shares.

Crude oil and U.S. equity prices have been linked for much of 2016 to a degree that has surprised many investors. Wednesday’s market action extended that trend, with WTI crude rising nearly 5 percent and the S&P 500 energy sector up 1.5 percent. Chevron jumped 4.6 percent to $92.82 and gave the biggest boost to the energy sector.

“It’s not about oil being a barometer of the global economy,” said Art Hogan, chief market strategist at Wunderlich Securities in New York. “A lot of it has to do with psychology.”

U.S. crude and the S&P 500 have been directionally correlated on all but six trading days this year, according to Wunderlich data.

“Stability in that asset class (oil) for a period of time will allow for the correlation to break down,” said Hogan.

Since Feb. 11, the S&P 500 has gained 8.8 percent, but it is still down 2.7 percent for the year.

The Dow Jones industrial average rose 36.26 points, or 0.21 percent, to 17,000.36, the S&P 500 gained 10 points, or 0.51 percent, to 1,989.26 and the Nasdaq Composite added 25.55 points, or 0.55 percent, to 4,674.38.

In a week with a thin economic data calendar, markets will turn to the European Central Bank, which is expected to further ease monetary policy on Thursday.

Biotechnology stocks came under pressure a day after the U.S. government proposed a test program that would lower incentives to use higher-priced drugs when alternative treatments are available.

The Nasdaq Biotechnology sector fell 1.2 percent with Regeneron Pharmaceuticals down 5.1 percent to $374.75 as the largest decliner on the Nasdaq 100.

Chipotle Mexican Grill lost 3.4 percent to $506.63. Already reeling from several food-borne illnesses, the company temporarily shut a Massachusetts restaurant after four employees fell sick.

Advancing issues outnumbered declining ones on the NYSE on a 2.3-to-1 ratio while on the Nasdaq a 1.50-to-1 ratio favored advancers.

The S&P 500 posted 27 new 52-week highs and 1 new lows; the Nasdaq recorded 48 new highs and 41 new lows.

About 7.5 billion shares changed hands in U.S. exchanges, compared with the average 8.67 billion in the previous 20 sessions.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)

Wall Street bids Happy Birthday to bull market for stocks

NEW YORK (Reuters) – Wednesday marks the seven-year anniversary of the start of the current bull market for U.S. stocks, one that has shaped up to be more notable for its duration than its intensity.

The current bull run of 84 months is the third-longest on record, with the average lasting slightly less than 59 months, according to S&P Dow Jones Indices.

Though also above average, the gains are somewhat less impressive, with the S&P 500 stock index up 193 percent, fifth among 13 bull markets since the Great Depression. The average bull market climb is 167 percent.

The Dow Jones industrial average and Nasdaq Composite, also bottomed on March 9, 2009. They grew about 159 percent and 266 percent, respectively, since then.

The bull started from a low point after the Great Recession and the financial crisis pushed stocks down 56.3 percent from the S&P’s October 2007 high of 1,565.15 to 676.53.

A technicality might make Wednesday’s whole birthday celebration moot. The S&P index actually peaked on May 21 and has yet to go above that. Should it fall more than 20 percent from that high of 2,130.82, it will confirm that the great bull actually ended back in May, and the market has technically been in a bear since then.

To confirm that the bull rolls on, the S&P will have to eclipse that high and continue its upward trajectory.

That’s far from certain. Stocks have struggled early in the year, with the S&P off 3.2 percent for 2016 and 3.9 percent below the May high. With relatively weak earnings and some concerns about global growth, it’s not clear stocks can resume their upward march.

“It has been long, it has been at times grueling, and it is tired,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in Berkeley Heights, New Jersey.

The market has room to move up, Kenny said, if corporate earnings and revenues can show signs of growth that would reveal stronger economic growth.

That would justify higher share prices for investors – and a more enthusiastic birthday celebration.

(Reporting by Chuck Mikolajczak; editing by Linda Stern and Nick Zieminski)

Oil drop, China data drag Wall Street lower

(Reuters) – U.S. stocks ended near the lows of the day on Tuesday as energy shares tumbled alongside the price of oil and soft Chinese trade data rekindled fears that the global economy is weaker than anticipated.

U.S. crude futures fell more than 4 percent in post-settlement trading, in their largest daily decline since bottoming so far for the year on Feb. 11. Since that low, the U.S. barrel of crude rose as much as 45.5 percent.

Despite the rebound in crude prices, oversupply and expectations of weak demand from China have weighed on investor sentiment. The price of oil and equity indexes have been strongly correlated this year.

“While I’d love to see oil break out, I don’t think it will happen yet,” said Uri Landesman, president at Platinum Partners in New York.

Goldman Sachs analysts said the recent rally in oil was premature as prices would need to remain lower for longer to help rebalance the market later in the year.

Shares of Dow components Exxon and Chevron fell more than 2 percent. The S&P 500 energy index dropped 4.1 percent.

China’s February trade performance was far worse than economists had expected, with exports tumbling the most in more than six years. The 16th-straight monthly decline in imports weighed on stocks in the basic materials sector, which was down 2 percent.

Landesman said the S&P 500 is still in a downward trend and will likely stall near the 2,000 level, heading toward support near 1,825 before testing the record set last May above 2,100. The index on Monday closed above 2,000 for the first time since Jan. 5.

“It will be trading in that channel based on slow global (economic) growth prospects,” Landesman said.

The Dow Jones industrial average fell 109.85 points, or 0.64 percent, to 16,964.1, the S&P 500 lost 22.5 points, or 1.12 percent, to 1,979.26 and the Nasdaq Composite dropped 59.43 points, or 1.26 percent, to 4,648.83.

The largest percentage decliner on the Nasdaq 100 was Micron, down 7.9 percent to $10.66.

Shake Shack tumbled 11.8 percent, falling to $37.23 after the burger chain issued disappointing results and forecast.

Shares of Urban Outfitters were up 16.1 percent at $32.69, after better-than-expected sales for its Free People brand.

Declining issues outnumbered advancing ones on the NYSE by a ratio of 3.2-to-1 and on the Nasdaq a 3.5-to-1 ratio favored decliners.

The S&P 500 posted 18 new 52-week highs and 1 new low; the Nasdaq recorded 36 new highs and 37 new lows.

About 8.5 billion shares changed hands in U.S. exchanges, below the 8.77 billion average over the last 20 sessions.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)

Oil prices rally, S&P 500 up for a fifth consecutive session

NEW YORK (Reuters) – Oil prices jumped on Monday as optimism rose that major producers might reach a price support deal, helping U.S. stocks to notch a fifth straight session of gains.

Brent hit its highest level since December, climbing $2.12, or 5.5 percent, to settle at $40.84 a barrel, while U.S. crude rose $1.98, or 5.5 percent, to settle at $37.90.

Oil has rallied in recent weeks amid increasing hope that OPEC producers may be moving toward a production freeze to support prices in an oversupplied market. On Monday, the Ecuadorean government said Latin American oil producers agreed to meet on Friday in Quito to coordinate a strategy to support crude oil prices.

“It’s more confirmation that oil producers are close to achieving some kind of a deal on price support,” said Phil Flynn, analyst at Price Futures Group in Chicago.

“It’s feeding bullish sentiment into a market that’s turned 180 degrees from where it stood just weeks ago.”

In other commodities markets, spot iron ore prices jumped 19 percent, helped by expectations that Chinese steel mills were planning production cuts.

A 2.4 percent gain in the S&P energy index offset a decline in technology shares, leaving the benchmark S&P 500 slightly positive for the session and extending the recent rise in stocks.

The Dow Jones industrial average gained 67.18 points, or 0.4 percent, to 17,073.95, the S&P 500 rose 1.77 points, or 0.09 percent, to 2,001.76 and the Nasdaq Composite dropped 8.77 points, or 0.19 percent, to 4,708.25.

U.S. stocks have posted gains in each of the last three weeks, thanks in part to the rebound in oil prices, after a steep sell-off at the start of the year.

MSCI’s all-country world stock index edged up 0.03 percent. In Europe, the pan-regional FTSEurofirst 300 index closed down 0.3 percent.

The dollar fell, wiping out its initial gains, as the oil rally rekindled demand for the euro and commodity-sensitive currencies.

The euro’s gains were limited by the view the European Central Bank would embark on more stimulus to support the euro zone’s fragile economic recovery at its policy meeting on Thursday.

The euro edged up 0.1 percent against the greenback to $1.1008 and slipped 0.5 percent versus the yen to 124.75 yen. The dollar index, which measures the dollar against a basket of six currencies, was down 0.2 percent at 97.132.

In the U.S. bond market, U.S. Treasury prices fell as oil prices surged and as traders increased bets in the wake of the strong February jobs report that the Federal Reserve will raise interest rates this year .

The benchmark 10-year note’s yield rose to 1.920 percent, its highest in just over a month. It was last down 6/32 in price to yield 1.902 percent, up from 1.883 percent late Friday.

(Additional reporting by Barani Krishnan in New York, Nigel Stephenson in London, Hideyuki Sano in Tokyo, Marius Zaharia and Patrick Graham in London; Editing by Nick Zieminski, Bernadette Baum and Dan Grebler)

Global stocks rise on strong U.S. jobs report, oil surge

NEW YORK (Reuters) – A gauge of stock markets worldwide rose to a two-month high on Friday, posting its largest weekly gain since October, as oil and other commodity prices firmed and strong U.S. jobs growth bolstered confidence in the global economy.

The recovery in commodities lifted emerging markets shares, which rose 1.6 percent on the day. MSCI’s emerging-market stock metric posted its largest one-week gain since December 2011.

U.S. equity indexes rose to their highest levels since early January following the jobs data, which showed strong growth in payrolls and an increase in labor-force participation, though there was a surprising decline in hourly wages.

Nonfarm payrolls grew by 242,000 jobs last month, beating forecasts for 190,000 new jobs, but average hourly wages dipped by 0.1 percent after a strong 0.5 percent increase in January.

The drop in wages suggested that U.S. inflation remained muted, analysts said. Policymakers at the Federal Reserve are watching inflation closely in their assessment of when to continue raising interest rates.

“The wage number might be the silver lining, if you will, against a more hawkish Fed over the next few months because the Fed has been really focused on inflation,” said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

A rise in the Fed’s rates generally strengthens the dollar, which makes U.S. exports more expensive and can reduce profits for companies that do business overseas.

The Dow Jones industrial average on Friday rose 62.87 points, or 0.37 percent, to 17,006.77, the S&P 500 gained 6.59 points, or 0.33 percent, to 1,999.99 and the Nasdaq Composite added 9.60 points, or 0.2 percent, to 4,717.02.

The S&P 500 rose more than 2.5 percent for the week, its third straight week of gains.

Brazil’s stock market rose to a seven-month high after police detained former President Luiz Inacio Lula da Silva for questioning in an investigation of a bribery and money laundering scheme.

The Bovespa was up more than 4 percent following a 5 percent gain on Thursday after news of Lula’s questioning brought the investigation closer to President Dilma Rousseff, who is fighting off impeachment. It was the largest two-day gain the index has posted since January 2009.

For months, Brazilian assets have rallied when it appears that prospects have increased of a change in government. Rousseff’s increased state intervention in the economy has long been unpopular with business.

Yields of U.S. benchmark Treasuries rose to their highest levels in a month, led by longer-dated securities. The benchmark 10-year Treasury note fell 13/32 in price to yield 1.88 percent.

MSCI’s global gauge of stocks was up 0.7 percent. Asian shares closed with their best week in five months and European stock markets ended with a third week of gains.

Oil prices touched two-month highs, gaining 10 percent this week. Benchmark Brent crude futures rose 4.6 percent to $38.78, and U.S. crude rose 4.2 percent to $36.03.

Iron ore and copper both hit four-month highs.

The dollar fell 0.25 percent against a basket of major currencies, and the euro rose above $1.10 for the first time since Feb. 26.

(Reporting by Dion Rabouin; Addtional reporting by Anirban Nag; Editing by Bernadette Baum, Nick Zieminski and Leslie Adler)

U.S. trade deficit widens as exports hit five-and-a-half-year low

WASHINGTON (Reuters) – The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than five-and-a-half-year low, suggesting trade will continue to weigh on economic growth in the first quarter.

The Commerce Department said on Friday the trade gap increased 2.2 percent to $45.7 billion. December’s trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months.

Economists polled by Reuters had forecast the trade deficit widening to $44.0 billion in January. When adjusted for inflation, the deficit increased to $61.97 billion from $60.09 billion in December.

Trade subtracted a quarter of a percentage point from gross domestic product in the fourth quarter, helping to hold down growth to a tepid 1.0 percent annual rate.

In January, exports of goods fell 3.3 percent to $116.9 billion, the lowest level since November 2010. Overall exports of goods and services dropped 2.1 percent to their lowest level since June 2011.

There were declines in food exports, which were the weakest since September 2010. Industrial supplies and materials exports fell to their lowest level since March 2010. Petroleum exports also fell, touching their lowest level since September 2010.

Exports of non-petroleum products were the weakest since February 2011. Exports to the United States’ main trading partners fell broadly in January.

Imports of goods fell 1.6 percent to $180.6 billion, the lowest level since February 2011. Import growth is being constrained by ongoing efforts by businesses to reduce a stockpile of unsold merchandise.

Lower oil prices as well as increased domestic energy production are also helping to curb the import bill. There were declines in imports of industrial supplies and materials.

Automobile imports were, however, the highest on record.

The politically sensitive U.S.-China trade deficit rose 3.7 percent to $28.9 billion in January.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

U.S. payrolls surge, bolster Fed rate hike prospects

WASHINGTON (Reuters) – U.S. employment gains surged in February, the clearest sign yet of labor market strength that could further ease fears the economy was heading into recession and allow the Federal Reserve to gradually raise interest rates this year.

Nonfarm payrolls increased by 242,000 jobs last month and 30,000 more jobs were added in December and January than previously reported, the Labor Department said on Friday. The unemployment rate held at an eight-year low of 4.9 percent even as more people piled into the labor market.

“Despite panic on Wall Street about impending recession, Main Street goes about its business as usual. This report will get the Fed’s attention, and raises the odds of another rate hike before too long,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

The only blemish in the report was a three-cent drop in average hourly earnings, which in part reflected a calendar quirk and the proliferation of low-paying retail and restaurant jobs. The average length of the workweek also fell last month.

The employment report added to data such as consumer and business spending in suggesting the economy had regained momentum after growth slowed to a 1.0 percent annual rate in the fourth quarter.

Growth estimates for the first quarter are around a 2.5 percent rate, but risks are tilted to the downside after a report from the Commerce Department on Friday showed the trade deficit widened 2.2 percent to $45.7 billion in January.

Economists had forecast employment increasing by 190,000 last month and the jobless rate holding steady.

U.S. stocks were trading higher on the data, while prices for U.S. Treasury debt fell. The dollar slipped against a basket of currencies on concerns about wage growth.

Fears of recession in the wake of poor economic reports in December and slowing growth in China sparked a global stock market rout at the start of the year, causing financial market conditions to tighten.

Though financial markets have priced out bets of a rate hike at the Fed’s March 15-16 policy meeting, they now see a roughly 50 percent chance of an increase at the September and November meetings, according to CME FedWatch.

But economists believe the strong job market and improved growth outlook, together with signs that inflation is creeping up, could prompt the U.S. central bank to lift borrowing costs in June.

The Fed raised its key overnight interest rate in December for the first time in nearly a decade.

“The lack of a more marked pickup in wage growth is the only missing element,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto. “But as far as the Fed is concerned, it is already seeing a clear acceleration in core price inflation. A June rate hike is coming.”

EYE ON WAGES

Average hourly earnings dipped 0.1 percent in February, the first drop since December 2014, after spiking 0.5 percent in January. That lowered the year-on-year earnings gain to 2.2 percent from 2.5 percent in January.

The average workweek fell to a two-year low of 34.4 hours last month from 34.6 hours in January, but economists cautioned that the series tended to be volatile.

“If labor demand was really about to fall, why was there such a sharp rise in employment?” said Harm Bandholz, chief U.S. economist at UniCredit in New York.

With labor market slack being absorbed, wage growth is expected to accelerate.

A broad measure of unemployment that includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment fell two-tenths of a percentage point to 9.7 percent, the lowest level since May 2008.

Fed Chair Janet Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working-age population.

Also adding to the strong tone of the jobs report, the labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, increased two-tenths of a percentage point to 62.9 percent, the highest level in just over a year. The employment-to-population ratio hit its highest level since April 2009.

Job gains were almost broad-based in February, though manufacturing and mining employment fell. The services sector created 245,000 jobs after adding 153,000 jobs in January.

Mining shed a further 18,000 jobs after losing 9,000 positions in January. Mining payrolls have declined by 171,000 jobs since peaking in September 2014, with three-fourths of the losses in support activities.

More losses are likely after oilfield services provider Halliburton Co <HAL.N> said last month it would cut a further 5,000 jobs because of a prolonged slump in oil prices.

Manufacturing lost 16,000 jobs, reversing some of January’s surprise increase. Private education jobs rebounded after plunging in January. Construction payrolls increased 19,000 and government added 12,000 jobs.

Retail payrolls increased 54,900, adding to the 62,100 positions created in January. Leisure and hospitality jobs rose 48,000, with employment at restaurants and bars increasing by 40,200.

(Reporting by Lucia Mutikani; Editing by Clive McKeef and Paul Simao)

Business activity worldwide at weakest in three years in February

LONDON (Reuters) – Global business activity expanded at its weakest rate in over three years in February despite firms cutting prices for the first time since September, business surveys showed on Thursday.

The U.S. service sector contracted for the first time since October 2013, euro zone businesses had their worst month in over a year, and China’s service sector growth slowed.

Thursday’s downbeat surveys come just days after reports showed manufacturing output across much of Asia shrank in February and faded throughout Europe and the Americas.

JPMorgan’s Global All-Industry Output Index, produced with private data vendor Markit, slumped to 50.6 in February from January’s 52.6, its lowest reading since October 2012 when it nudged above the 50 mark that divides growth from contraction.

“February’s PMI surveys further highlight the broad-based weakness in global growth during the opening quarter of 2016,” said David Hensley, a director at JPMorgan.

A purchasing managers index (PMI) covering the global service industry fell to a 40-month low of 50.7 from 52.8.

US SERVICE SECTOR CONTRACTS FOR FIRST TIME SINCE 2013

In the U.S., private data vendor Markit said its service sector purchasing managers index (PMI) fell to 49.7 in February from 53.2 in January and is now below the 50 level that separates growth from contraction for the first time since October 2013.

Markit’s composite index of both manufacturing and service sector activity fell to 50.0 from 53.2 in January.

An alternative reading from the U.S. Institute of Supply Management (ISM) showed service sector activity still growing in February, but at a slower pace and employment in the sector declined for the first time in two years.

ISM said its index of non-manufacturing activity fell to 53.4 from 53.5 the month before, while the employment index fell to 49.7 from 52.1 a month earlier, marking the first fall in service-sector employment since February 2014.

The U.S. dollar fell sharply against the euro on Thursday after the data showed a decline in U.S. service sector employment. [USD/]

“The data this morning was weak enough to add a touch of concern to the market,” said Jason Leinwand, managing director at Riverside Risk Advisors in New York. “The market is definitely leaning away more and more from the prospects of a Fed hike this year.”

The U.S. Federal Reserve raised interest rates for the first time in a decade in December, but is not expected to raise rates again at its March policy meeting.

BRAZIL SLUMPS AT EVEN FASTER PACE

Activity in the service sector of Brazil, Latin America’s largest economy, plunged in February at the fastest pace on record, according to a survey by HSBC/Markit, as Brazil suffers from its worst economic crisis in over a century.

The HSBC/Markit service sector PMI Brazil fell 36.9 in February from 44.4 in January.

The deeper contraction in services, along with an accelerating decline among manufacturers, dragged Markit’s composite Brazil index to 39.0 in February from 45.1 in January.

Brazil’s gross domestic product shrank 3.8 percent in 2015, capped by another steep contraction in the fourth quarter, according to statistics agency IBGE on Thursday.

“The Brazilian economic downturn took a real turn for the worse in February,” said Rob Dobson, a senior economist at Markit. “The labor market also appears to be in dire straits, as manufacturers and service providers reported further substantial reductions to headcounts.”

EUROZONE BUSINESS SEES WORST MONTH IN A YEAR

Euro zone businesses had their worst month in over a year in February which, coupled with further signs of deflationary pressures, is likely to solidify expectations for further monetary policy easing.

Markit’s euro zone composite PMI, seen as a good guide to economic growth, fell to 53.0 last month from January’s 53.6, its lowest reading since the start of 2015, but was still over the 50 mark that denotes growth.

“The slowdown in growth of business activity, accompanied by a similar easing in the pace of job creation and the steepest fall in prices charged for a year, suggest that the region’s recovery is losing momentum,” said Chris Williamson, chief economist at Markit.

Another cut in the already-negative deposit rate is likely when the ECB meets on March 10. A Thursday Reuters poll gave a 60 percent chance the central bank would also expand its bond-buying program from 60 billion euros a month [ECB/INT].

BREXIT FEARS HIT BOARDROOMS

The prospect of Britain voting to leave the European Union at a referendum in June sent shivers through the boardrooms of the country’s dominant services sector last month, sending growth to a three-year low.

The Markit/CIPS UK services purchasing managers’ index slumped to 52.7 from 55.6 in January, the weakest reading since March 2013.

The news halted sterling’s recovery against the U.S. dollar over the last few days, following last week’s Brexit-driven sell-off. [GBP/]

“Survey responses reveal that firms are worried about signs of faltering demand, but boardrooms have also become unsettled by concerns regarding the increased risk of Brexit, financial market volatility and weak economic growth at home and abroad,” said Markit’s Chris Williamson.

British gross domestic product now looks likely to expand by just 0.3 percent in the first quarter of 2016, according to Markit, a slowdown from 0.5 percent in the final three months of 2015 and its poorest performance since late 2012.

The Bank of England was once expected to be the first major central bank to tighten policy but now it is not expected to act until the end of the year, and Thursday’s readings may push the forecasts even further out [ECILT/GB].

CHINA MANUFACTURING SLOWDOWN SPREDS TO SERVICES

Growth in China’s services activity slowed in February, adding to risks for policymakers in Beijing who are counting on robust growth in the sector to offset a planned overhaul of bloated state companies.

The Caixin/Markit PMI fell to 51.2 in February from a six-month high of 52.4 in January.

But a composite Caixin output index covering both manufacturing and services fell below the 50-point level in February, suggesting weakness in the manufacturing sector was overcoming the contribution from the services sector.

He Fan, chief economist at Caixin Insight Group, said further government measures were need to boosted the services sector and improve balance in the economy.

“While implementing measures to stabilize economic growth, the government needs to push forward reform on the supply side in the services sector to release its potential,” he said.

China said on Monday it expects to lay off 1.8 million workers in the coal and steel industries, or about 15 percent of the workforce, as part of efforts to reduce a capacity glut, but no timeframe was given.

Reuters reported this week that China aims to lay off 5-6 million state workers in two to three years to curb industrial overcapacity and pollution.

China’s central bank injected an estimated $100 billion worth of long-term cash into the banking system on Tuesday..

Activity in Japan’s services sector expanded in February at the slowest pace in seven months as new business weakened. The Markit/Nikkei Japan services PMI fell to 51.2 from 52.4 in January, and is now at the lowest since July last year.

(Additional reporting by Winni Zhou and Nicholas Heath in Beijing, Stanley White in Tokyo, Andy Bruce in London, Dan Burns in New York and Brad Haynes in Brazil; Editing by Ross Finley, Larry King and Clive McKeef)

Wall Street snaps up shares in late-day scramble

Traders work on the floor of the New York Stock Exchange

(Reuters) – Wall Street moved higher on Thursday, adding momentum to a recent recovery as the energy and financial sectors emerged into positive territory for the year.

The S&P 500’s increase was the most recent in four weeks of mostly steady gains that have left the index down 2.5 percent in 2016 after the worst January since 2009.

It was the second straight day that stocks strengthened late in the session, a pattern that some investors view as sign of improving sentiment. The S&P has gained in five out of the last seven sessions.

“That is a positive and I think there’s reason to look at that with some hope,” said Andrew Bodner, president of Double Diamond Investment Group in Parsippany, New Jersey. But Bodner said he remains cautious following the market’s recent volatility.

Earlier, a report showed that the number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend continued to point to a strengthening labor market.

Investors were also looking to Friday for a comprehensive labor report that is expected to show an addition of 190,000 jobs in February, up from a gain of 151,000 in January.

Brent crude prices, which are up about 35 percent from last month’s lows, were largely steady.

The Dow Jones industrial average ended 0.26 percent higher at 16,943.56 points and the S&P 500 gained 0.35 percent to 1,993.39.

The Nasdaq Composite added 0.09 percent to 4,707.42.

Eight of the 10 major S&P 500 sectors gained, with the energy sector up 1.28 percent and financials up 0.63 percent, both climbing into positive terrain for 2016.

The financial sector has surged 13 percent in the past 14 sessions, although it remains down 7 percent in 2016. Investors fear that low oil prices will force energy companies to default on their debts.

The health index fell 0.35 percent, pulled down by a 1.91-percent dip in Celgene Corp.

Herbalife fell 7.02 percent after the multilevel marketer said it had overstated growth in the number of new members due to a database error.

Kroger dropped 7.01 percent after the largest U.S. supermarket operator’s quarterly sales missed estimates.

Advancing issues outnumbered decliners on the NYSE by 2,304 to 726. On the Nasdaq, 1,736 issues rose and 1,057 fell.

The S&P 500 index showed 16 new 52-week highs and one new low, while the Nasdaq recorded 39 new highs and 20 new lows.

Volume hit 8.8 billion shares, matching the daily average in the past 20 sessions.

(Additional reporting by Tanya Agrawal; Editing by James Dalgleish and Nick Zieminski)