Wall Street takes a rest tonight after a solid rise Friday night in reaction to a mixed US employment report for August.
That capped a losing week for the markets in the US, Asia and Europe.
There was a smaller than expected fall in US jobless numbers, but the unemployment rate rose to 9.7%, the highest for 26 years.
That bothered quite a few economists and others, but the good news was that it reflected a rise in the number of people looking for work, which in turn is a sign of growing confidence.
US companies cut 216,000 jobs in August, the smallest since August 2008, but the department revised upward the June and July job losses by 49,000.
But the fall was way below the half a million-plus levels of earlier in the year and shows that the American economy is slowly emerging from the slump.
As a result the Dow rose 96.66 points, or 1.03%, to 9,441.27; Nasdaq composite added 35.58 points (1.8%) to 2,018.78 and the Standard & Poor’s 500 index was up 13.16 points (1.31%) to 1,016.40.
The S&P 500 lost 0.4% in August and so far September has continued the downtrend.
For the week, the S&P lost 1.2%, the Dow fell 1.1% and Nasdaq 0.5%.
After trading finished early Saturday, our time, we received another reminder of the quiet implosion of America’s smaller banks.
Five small regional banks were closed by regulators on Friday evening US time, pushing this year’s toll to 89.
There were just 25 in 2008 and three in 2007.
Of the latest failures, two were in Illinois, and there was one each in Arizona, Iowa and Missouri.
The FDIC estimates that these five bank failures will cost the Deposit Insurance Fund a total of $US401.3 million.
These banks would have been on the list of 416 of America’s near 8,000 banks that were on the main regulators watchlist (The FDIC).
The jobless figures dominated discussion with some analysts seeing all bad, others some good.
The market had been expecting 230,000 job losses and an unemployment rate of 9.5 %.
Analysts said that with the layoffs (and little sign of widespread hirings), the outlook is not good for consumer spending.
Hours and wages were either down or weak. But more people seem to be looking for work as the good news flows on the economy.
Barclays Capital analysts in New York said the report was a bit weaker than expected on balance due to a rising unemployment rate and small downward revisions to previous months.
"However, it leaves the basic trajectory of labour market improvement in place and does not change our underlying views," they said in an analysis.
The Group of 20 meeting won’t have much of an impact because it merely confirmed the obvious: that the global economy is improving and there’s no agreement on controlling banks and other big financial groups.
News that the stimulus measures will remain in place might help, but there were no real expectations that they would be quickly removed.
In Europe, shares fell as investors took profits as they returned from the end of the summer season.
The Dow Jones Stoxx 600 Index dropped 1.5% to 233.85 on Friday. That was still up 48% since March 9.
London’s Footsie rose Friday, but ended the week lower.
The Index rose 1.2%, which halved the week’s loss to 1.2%.
In Asia, shares fell for the third week in the past five as doubts continued about the strength of the rebound in the region.
The MSCI Asia Japan Index fell 1.0% last week as Australia dropped 1.2% and Tokyo’s Nikkei shed 3.3% after the change of government at last Sunday’s election.
In Sydney, the ASX200 index was up 5.9 points, or 0.1% on the day and the All Ordinaries rose 9.8 points, or 0.2%, to 4442.7.
Both were off 1.2% over the week.
That was due to a solid rise in the value of the yen against the US dollar, a move that will crimp exporters’ returns and put further pressure on domestic prices.
China’s Shanghai Composite Index finished the week little changed this week after recovering most of a 6.7% fall last Monday on continuing concerns the government will tighten monetary policy to avert asset bubbles.
