European Markets Surged After Disappointing U.S. Jobs Report

(RTTNews) - The European markets were up modestly in early trade Friday, but accelerated higher following the release of the weaker than expected U.S. jobs report for August. The prevailing opinion among investors is that the Federal Reserve will now be unable to increase interest rates at its next meeting later this month.

Employment in the U.S. increased by less than anticipated in the month of August, according to a report released by the Labor Department on Friday. The Labor Department said non-farm payroll employment rose by 151,000 jobs in August after surging up by an upwardly revised 275,000 jobs in July.

Economists had expected employment to climb by about 175,000 jobs compared to the jump of 255,000 jobs originally reported for the previous month.

The report also said the unemployment rate held at 4.9 percent in August, unchanged from the previous month. The unemployment rate had been expected to edge down to 4.8 percent.

Bank stocks were among the gainers again at the end of the week, extending their recent upside move. Shares of European exporters were under pressure due to swings in the currency market. The weak U.S. jobs report triggered a drop in the value of the U.S. dollar and an increase in the value of the Euro.

The pan-European Stoxx Europe 600 index advanced 2.06 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 2.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 2.51 percent.

The DAX of Germany climbed 1.42 percent and the CAC 40 of France rose 2.31 percent. The FTSE 100 of the U.K. gained 2.20 percent and the SMI of Switzerland finished higher by 1.86 percent.

In Frankfurt, Fresenius Medical Care rose 1.08 percent. The healthcare company said that it would acquire 85 percent equity stake in the Indian dialysis group, Sandor Nephro Services, from a group of investors for an undisclosed amount.

BMW, Daimler and Volkswagen climbed between 1 percent and 1.9 percent after unveiling their U.S. sales figures for August.

Startup incubator Rocket Internet sank 7.72 percent after its first-half loss widened from last year, due to impairments at one of its units.

In Paris, hotels group Accor climbed 3.58 percent after Barclays lifted its rating on the stock.

In London, transport firm Go-Ahead Group jumped 10.41 percent after reporting a rise in annual profit and lifting dividend.

Property group Segro fell 1.91 percent . The company unveiled plans to raise £340mln through a share placement to fund its pipeline of development opportunities.

McCarthy & Stone sank 11.69 percent after the retirement homebuilder issued a cautious trading update, saying the EU referendum result had cast doubt on its plans for growth.

Eckoh, the provider of secure payment products and customer service solutions, plunged 18.37 percent after issuing a profit warning.

SBM Offshore plunged 10.64 percent in Amsterdam after federal prosecutors in Brazil rejected the leniency agreement signed by Brazilian authorities, Petrobras and SBM Offshore in mid-July.

Eurozone producer prices continued to fall in July, but the pace of decline eased for a third consecutive month, preliminary data from Eurostat showed Friday. Producer prices dropped 2.8 percent year-on-year following 3.1 percent fall in June. Economists had forecast a 2.9 percent decrease.

Italy's economy stagnated in the second quarter as estimated initially as consumption remained unchanged and investments declined, latest data from ISTAT showed Friday.

Gross domestic product was unchanged, on a seasonally-and-calendar-adjusted basis, from the first quarter, when the economy grew 0.3 percent. The economy failed to grow for the first time since the final three months of 2014, when it stagnated.

Spain's unemployment increased in August after falling for five straight months, figures from the Labor Ministry showed Friday. The number of unemployed increased by 14,435 in August from the prior month. Nonetheless, the number of registered unemployed totaled 3.69 million, the lowest since August 2009.

U.K. construction sector logged a sustained reduction in business activity in August, but the pace of decrease was only marginal, survey data from Markit showed Friday.

The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index for construction activity rose more-than-expected to 49.2 in August from July's 85-month low of 45.9. Economists had expected a score of 46.3.

The U.S. trade deficit narrowed by much more than expected in the month of July, the Commerce Department revealed in a report on Friday, with the smaller deficit reflecting an increase in the value of exports and a decrease in the value of imports.

The Commerce Department said the trade deficit narrowed to $39.5 billion in July from a revised $44.7 billion in June. Economists had expected the deficit to narrow to $41.3 billion from the $44.5 billion originally reported for the previous month.

Partly reflecting a sharp jump in orders for transportation equipment, the Commerce Department released a report on Friday showing a notable rebound in new orders for U.S. manufactured goods in the month of July.

The report said factory orders surged up by 1.9 percent in July following a revised 1.8 percent drop in June. Economists had expected orders to jump by 2.0 percent compared to the 1.5 percent decrease that had been reported for the previous month.