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Job jitters trump rate cuts

Thursday, July 05, 2012 - 02:17

July 5 - Summary of business headlines: Three central banks add stimulus but investors want additional U.S. job growth; June same-store sales show growing consumer caution; Netflix surges on video viewership. Conway G. Gittens reports.

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Central banks slash away but investors are not moved ahead of a U.S. jobs update. The S&P 500 snaps a three-session rally but the Nasdaq barely makes it four in a row. The European Central Bank cuts key lending rates, the People's Bank of China surprises with a second rate cut in a matter of weeks, and the Bank of England holds but adds more stimulus, as central banks grapple with a slowdown pulsating from Europe. That's been one of the reasons given for lackluster hiring in the U.S., but there are hopeful signs. Jobless claims dropped last week by the largest amount in two months and private job creation was bigger-than-expected in June, according to payroll company ADP. The Institute for Supply Management, or ISM services sector expanded for the 30th month in a row but downward pressure is showing up there. The news is giving a little bump up in expectations for Friday's all-important jobs report. UBS economist Kevin Cummins: SOUNDBITE: KEVIN CUMMINS, U.S. ECONOMIST, UBS (ENGLISH) SAYING: "Despite the overall index in the ISM index reported down the employment index was a little bit better in June relative to May as well. So we are looking at UBS for an increase of 85,000 jobs and 100,000 private payrolls for tomorrow's estimate but there probably is a little bit of upside surprise given the latest data." Any upside surprise would be welcomed by the American consumer. Nervous shoppers are heading to discounters for their needs. Chain store sales for June were largely disappointing with a few stand-outs: like Limited Brands. It seems like no matter what the economic climate, women won't cut back on their underwear. The hot stock of the day: Netflix shares surged 13 percent to a two-month high. Investors liked a Facebook posting by the CEO saying customers watched 1 billion hours of video in June. That number puts the video streaming company on track to top the 2 billion hours of online TV watched in the fourth quarter. There are some skeptics, but they were tuned out. On to Europe now - central bank action did little to move the needle there as well. Conway Gittens, Reuters

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Job jitters trump rate cuts

Thursday, July 05, 2012 - 02:17