Wednesday, May 01, 2013 11:19 pm
Asia stocks down on US, China economic fears
By PAMELA SAMPSONAP Business Writer
Analysts are concerned about a buildup of disappointing data emerging from the two countries whose economic heft is critical to powering a global recovery. The latest alarm bells rang out of Washington on Wednesday with the release of employment and manufacturing growth that failed to live up to expectations.
That sent Wall Street stocks sharply lower. Asian equity markets, many of which were closed Wednesday for a public holiday, followed suit as investors displayed caution ahead of Friday's release of U.S. employment figures April.
"Little change in market direction is expected today, with caution ahead of tomorrow's US jobs report," said analysts at Credit Agricole CIB in a commentary.
Japan's Nikkei 225 index fell 0.5 percent to 13,729.22. Hong Kong's Hang Seng shed 0.5 percent to 22,631.99. South Korea's Kospi lost 0.4 percent at 1,956.12. Australia's S&P/ASX 200 dropped 0.8 percent to 5,125.50.
Later Thursday, the U.S. Labor Department will release weekly jobless claims. On the corporate side, General Motors Co., Kellogg Co. and Kraft Foods Group are among companies issuing quarterly financial results. And in Bratislava, Slovakia, the European Central Bank's governing council will meet to set monetary policy.
At the conclusion of a two-day meeting Wednesday, the Federal Reserve stuck to its plan to keep short-term interest rates at record lows until unemployment falls to 6.5 percent from its current 7.6 percent. And it said it will continue to buy $85 billion a month in Treasury and mortgage bonds to keep long-term borrowing costs down and encourage borrowing and spending.
U.S. factory activity expanded at a slower pace in April, held back by weaker hiring and less company stockpiling. The Institute for Supply Management said Wednesday that its index of manufacturing activity slipped to 50.7 last month. That's down from 51.3 in March and the slowest pace this year. A reading above 50 indicates expansion. That came on top of data showing a similar deceleration in China's manufacturing growth for the month.
Meanwhile, a report Wednesday from payroll processor ADP said U.S. companies added just 119,000 jobs in April, the fewest in seven months. ADP also said that hiring in March was slower than first thought.
The Dow Jones industrial average fell 0.9 percent to 14,700.95. The Standard & Poor's 500 fell 0.9 percent to 1,582.70. The Nasdaq composite index fell 0.9 percent to 3,299.13.
Benchmark oil for June delivery was up 7 cents to $91.10 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.43, or 2.6 percent, to finish at $91.03 a barrel on the Nymex on Wednesday.
In currencies, the euro fell to $1.3177 from $1.3210 late Wednesday in New York. The dollar fell to 97.34 yen from 97.51 yen.
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