News

Europe stocks close lower for fourth straight session as U.S. jobs data disappoints

Visitors look out to St. Paul’s Cathedral from a rooftop in the City of London, UK.
Bloomberg | Bloomberg | Getty Images

LONDON — European stock markets closed lower Thursday following another set of weak U.S. jobs data.

The regional Stoxx 600 index closed down 0.43%, with major bourses and sectors spread between losses and gains. Utilities stocks rose 1.66%, while healthcare fell 1.4%.

It marks the fourth day of declines for the Stoxx 600 after it closed above 525 points for the first time on Friday.

In Europe, Germany's DAX ended up 0.02% higher after data showed factory orders in the country increased 2.9% month-on-month in July. However, Benedict Acton-Bond, economist at Moody's Analytics, noted that orders excluding big ticket items such as aircraft, ships and trains were lower, and said the release "further dents the narrative that industry is bottoming out."

More broadly, global sentiment has once again been rattled by U.S. data, after weak manufacturing surveys and lower-than-expected jobs openings suggested a slowdown in the world's biggest economy — and revived debate about whether the Federal Reserve will cut interest rates by 50 basis points rather than 25 this month.

Figures out Thursday also showed that private sector payrolls grew at their weakest pace in more than three-and-a-half years in August, according to ADP. Companies hired 99,000 workers for the month, well below the Dow Jones consensus forecast for 140,000.

On Wall Street, stocks moved lower following the data.

A weak July jobs report was a major factor in the broad stock sell-off at the start of August and Thursday's figures have put even more focus on the remaining U.S. jobs releases out this week, with U.S. nonfarm payrolls and unemployment data due Friday.

"There is a slowdown taking place, there's no question about it, but I think we're very far from a recession," George Lagarias, chief economist at Forvis Mazars, told CNBC's "Squawk Box Europe" on Thursday morning ahead of the latest releases.

Some moderation in the jobs market has long been widely expected, Lagarias said, indicating that "the Fed is not going to move very aggressively."

To do so "might send a wrong message to markets and the economy. It might send a message of urgency and, you know, that could be a self-fulfilling prophecy," he continued.

Tech weakness

Markets have also been pulled down this week by the technology sector, which lost 3.2% in Europe on Wednesday.

U.S. chipmaking giant Nvidia suffered a wipeout on Tuesday which pulled down chip stocks worldwide. The company on Wednesday denied reports it received a subpoena from the Department of Justice over antitrust concerns.

Asia-Pacific markets also extended losses Thursday, with Japan's Nikkei 225 suffering the steepest decline after wages recorded softer growth in August, potentially offering the Bank of Japan more room for a rate hike.

Copyright CNBC
Contact Us