US market boosted by job figures

US job losses in September were not as bad as feared

Better-than-expected jobs news from the US helped Wall Street buck the global market trend of falling stock markets.

The benchmark Dow Jones index recovered from early losses to end the day 5.2 points higher at at 10,292.3.

But markets across Europe and Asia slipped on fears that high fuel prices were driving inflationary pressures.

In the UK, bad news from telecoms giant Cable & Wireless also weighed on the market, pushing the FTSE 100 10.1 points lower to 5,362.2.

The (US) jobs number coming in better certainly was a help Peter Boockvar Analyst

In France the Cac 40 closed slightly lower - down 8.11 points at 4,528.79 - as did Germany's Dax, which slipped 9.5 to 5,007.77.

Losses limited

European markets moved off earlier lows in afternoon trade as US jobs figures proved forecasts of a surge in unemployment to be wrong.

Figures from the US Labour Department showed unemployment had risen rose from 4.9% to 5.1% in September. However, only 35,000 jobs had been lost - far lower than the 145,000 that had been predicted.

"The jobs number coming in better certainly was a help," said Miller Tabak & Co equity strategist Peter Boockvar.

"Hurricane Katrina undoubtedly devastated individuals and communities... but on a macro-economic basis it's clear that the US economy has more than enough momentum to absorb the hit and recover quickly," Bill Cheney, John Hancock Financial Services economist, added.

Experts said the strong figures had shown the economy had proved resilient to the recent hurricanes Katrina and Rita - delivering a fillip to the US market.

Inflation jitters

Earlier in the day international markets took their lead from Wednesday and Thursday's heavy falls on the US market sparked by fears of further interest rate rises.

The fall triggered an overnight drop on Japan's Nikkei 225 index, which closed down 462.1 points at 13227.7.

A Federal Reserve official warned on Thursday that inflation was close to the upper limit of the central bank's parameters and could soon begin to impact on the economy.

The comments contributed to a sharp fall in share prices on Thursday, while the US dollar fell to a two-week low against the euro.

Sell-off

Selling was rife in most Asian markets with Japan's Nikkei 225 index suffering its first weekly fall in value in two months.

Markets in Australia, South Korea and Taiwan also declined, with the value of leading Australian shares having fallen more than 5% in a week.

Comments by European Central Bank president Jean-Claude Trichet about the possibility of interest rate rises have worried some investors.

"Comments from the ECB's Trichet were a bit of a surprise," said Kikudo Takeda, an economist with Bank of Tokyo Mitsubishi.

However, some market-watchers believe the falls of recent days are largely a technical correction after months of steady growth.