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US Jobs Data See Markets Dip Lower

US jobs data was initially greeted warmly by markets, but a lower opening on Wall Street saw the FTSE 100 dip.

Morningstar.co.uk Editors 4 November, 2011 | 5:10PM
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The US created 80,000 new jobs in October. This was slightly lower than expectations, but there were substantial upward revisions to previous months' data. The overall jobless rate fell to 9%, ahead of expectations.

 

The markets were also unimpressed by news from the G20 summit that leaders had agreed to boost IMF resources, giving it more firepower to help beleaguered Eurozone nations. They had hoped to see a detailed plan to stabilise the Eurozone. Even a planned vote of confidence for the Greek Prime Minister George Papandreou failed to cheer investors. The FTSE 100 ended the day 0.33% lower at 5,527, while the European and US markets also saw falls.

 

Anglo American saw shares dip slightly after it announced it was to take control of diamond company De Beers. It has agreed to buy the Oppenheimer family’s 40% stake for $5.1bn (£3.2bn). However, the news boosted others in the sector, with Gem Diamonds among the top performers on the FTSE 250.

 

Shares in Smith & Nephew dipped, after stable sales figures were offset by weak margins in its orthopaedics business. Nick Raynor, investment research analyst at the Share Centre said: “The company has been attempting to improve margins by cost cutting for some time. However, these figures have shown the cost base is still too high. Although Smith & Nephew have restructuring plans in place, we doubt these will be implemented by the end of the year, which could see crippling margins impede final year results.”

 

The Royal Bank of Scotland was one of the day’s surprise gainers as the company said its recovery would take long than expected as the Eurozone crisis continued. It also said that it didn’t expect to meet its return targets for 2013. However, the news wasn’t as bad as investors had expected and the shares rose 1.27% to 23.1p.

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.