U.S. stocks almost unchanged amid better labor market

European stock market continued to decline last week

The August 4-8 week showed the continuation of a negative tendency of the stock market in Europe, as tensions in Ukraine continued to escalate and Russia imposed responding sanctions on the EU and U.S., which may potentially lead to weaker economic recovery in the Eurozone and the EU as a whole. On Tuesday, the German factory orders have seen a strong 3.2% decline despite positive expectations.

The main Europe Stoxx 600 Index dropped 1.9% to 324.91 points last week, erasing the advance for past half a year. All the major sectors, which make up the index, registered a loss, with automobiles and parts and telecommunication industries losing as much as 3.6% and 3.4%, respectively. Among the better-performing sectors, food and beverages were unchanged during the reported period of time. Among the biggest losers, Royal Imtech NV plunged more than 41% to 0.335 euro per share, as the Dutch technical services provider is intended to reduce a significant amount of its debt, which accounts for more than one billion euro at the moment. Banca Monte Dei Paschi Siena and Banco Comercial Portugues-R followed with a 21.5% decrease and 17.1% fall, respectively.

At the same time, German and British slowed down as well, finishing the previous week lower 1.6% and 1.7%. Among important fundamental news, the Bank of England has kept the interest rates and QE program fully unchanged.

U.S. stocks almost unchanged amid better labor market

Equity market in the U.S. traded mostly down during the week ended August 8, however, the price changes were insignificant. Despite data of the rising unemployment level last week, Thursday statistics revealed a considerable decrease in a number of unemployment claims, as it reached 289,000, the second-lowest reading since May 2007. Moreover, the U.S. trade balance improved amid weaker imports.

The benchmark S&P 500 Index lost only 0.4% to trade at 1,931.59 points on Friday. Consumer staples and utilities sectors expanded the most, while telecommunications industry dropped 2.7%. Sprint Corp. led the decline of the mentioned sector, slipping 23.9% from Monday to Friday to $5.67 per share . The company rejected to buy T-Mobile amid a high level of opposition from regulators. As a result, Sprint replaced its CEO, giving Marcelo Claure a leadership of the company. On the other hand, WPX Energy Inc surged as much as 14.5% to close the last week at $23.48 per share, as the oil producer has improved its expectations for energy output in 2014.

Meanwhile, the Dow Jones Industrial Average fell only 0.1% to trade at 16,553.93 points at market closing time on Friday. NASDAQ, in turn, decreased 0.3% to 4,370.90 points by August 8.

Japanese shares slump to trade at lowest level in two months

Stock prices of Japanese companies declined considerably during the previous week, as weakening U.S. dollar pushed the yen higher. As expected, the unstable economy of Japan may suffer even more from expensive national currency, as it highly depends on exports.

Last week, the local equity market traded down to its lowest levels in two months, with Topix Index falling 4.5% to 1,228.26 points, even pushing the overall trend for the last month to the red zone. As a result, the half-year increase of the index was cut to marginal 2.2%. All industries included in the gauge posted a drop during last five trading days, with real estate and financing business companies losing the most in share value, namely 6.1% and 5.7%. Felissimo Corp., the leader of gains a week before, slipped 27.2% to trade at 1,373 yen on Friday’s evening, mainly due to market correction after a significant jump. Despite overall market slump, Cybernet Systems Corp., a software developer, climbed 23.7% to 470 yen, prolonging the upward trend started on August 1.

The second-largest Japanese benchmark, Nikkei 225, finished the week 3.8% lower and traded at 14,778.37 at the end of the trading session back on Friday.

Asia Pacific shares trade lower as Australia unemployment picks up

The Asia-Pacific region corporations traded in a mixed environment during the August 4-8 week, as some positive data from international trade in China and Australia was offset by a rise in jobless rate in Australia to 6.4%, the highest level in 12 years. Alongside, trade balance of China used to be twice higher than economists expected before statistics was released, namely $47.3 billion.

The S&P/ASX200 benchmark index slumped 1.9% to hover around 5,435.30 points at the end of the trading week ended on August 8. All but one sector of the gauge posted a decline, with technology and financial industries leading the drop by 3.4% and 2.7%, respectively. Utility sector added marginal 0.01% from Monday to Friday. Among best performers, Maverick Drilling & Exploration Ltd surged 16.1% to A$0.18, capping the overall decline of the energy sector. However, it is worth pointing out that the company lost 72% of its share value since the peak in October of the last year. On the other hand, Ausdrill Ltd, one more representative of the mining sector, plummeted 17.4%, as the company expects the recovery to take place slower amid falling commodity prices and weaker demand.

Meanwhile, New Zealand shares decreased only 0.7% to 3,055.47 points, as the unemployment rate in the country decreased from 5.9% to 5.6%. Chinese stock market, represented by the Hang Seng Index, lost 1.1% to finish the previous week at 21,074.21 points.

EXPLANATIONS

Indexes

• Standard & Poor's 500 Index (S&P 500) or (SPX) - U.S. stock market index consisting of the 500 large-cap shares widely traded on the New York Stock Exchange and the NASDAQ.

• Dow Jones Industrial Average Index (INDU) - U.S. stock market index consisting of the 30 large publicly owned U.S. companies , primarily industrials

• NASDAQ Composite Index - U.S. stock market index representing all the stocks that are traded on the Nasdaq stock market, mostly technology and Internet-related

• New Zealand Exchange 50 Gross Index (NZX 50) - stock market index consisting of the top 50 companies listed on the New Zealand Stock exchange

• S&P/ASX 200 -a market-capitalization weighted stock market index of stocks listed on the Australian Securities Exchange from Standard and Poor’s

• Hang Seng Index (HI) - Hong Kong’s stock market index consisting of 48 largest companies listed on the Hong Kong Exchange

• Japan’s Nikkei Stock Average (Nikkei 225 Index) or (NKY) - Japanese stock market index consisting of the 225 largest companies listed on Tokyo Stock Exchange

• FTSE 100 Index (UKX) - U.K. stock market index consisting of the 100 most capitalized U.K. companies trading on the London Stock Exchange

• DAX Index (DAX) - German stock market index consisting of the 30 largest and most liquid German companies trading on the Frankfurt Stock Exchange

• Eurostoxx 600 - stock market index, derived from the Stoxx Europe Total Market Index, consisting of 600 large, mid– and small-sized companies from 18 European countries

Chart

• Correlation - statistical measure of the linear relationship between two random variables. It is defined as the covariance divided by the standard deviation of two variables.

• Historical price changes - chart reflecting the historical price changes of particular region’s stock indices

Indicators

• Industry performance - weekly performance of industries within the particular stock market index

• Top performers - companies within a particular stock market index showing the best or worst weekly performance

• Performance - relative historical change of stock market index value