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Mar 8, 2017

Asia, Europe & U.S. Stock Markets Closing Reports on March 8, 2017
Ese Erheriene
Asian equities held broadly held steady on Wednesday, mirroring a lack of risk appetite in the U.S. overnight, as global markets continued to drift.
Markets have been stuck in range-bound trading for much of the week as traders await further clues from the Federal Reserve and U.S. President Donald Trump on the country’s monetary- and fiscal-policy outlooks.
The Nikkei Stock Average NIK, +0.28%   fell 0.5%, opening lower for the fourth straight session, after disappointing economic data. Broad declines were seen across Japanese stocks, with 27 of 33 Topix subindexes lower.
Elsewhere, Australia’s S&P/ASX 200 XJO, -0.12%  edged down less than 0.1%, South Korea‘s Kospi SEU, +0.21% rose 0.1% and Singapore’s Straits Times Index STI, +0.47%  gained 0.5%.
Kim Jong Nam's son speaks out on father's killing
The son of Kim Jong Nam, the slain half brother of North Korean leader Kim Jong Un, has appeared in a video posted online by a mysterious advocacy group. Photo: AFP/Getty
Hong Kong stocks shrugged off China’s surprise swing to a trade deficit, with the Hang Seng Index HSI, +0.43%  gaining 0.4%. China’s trade deficit was 60.36 billion yuan ($8.75 billion) in February, reversing from a surplus of 354.53 billion yuan in January.
The Shanghai Composite Index SHCOMP, -0.05%  shed 0.1%. The midday break took place before the trade data was released Wednesday. The latest data from China showed an increase in trade activity.
“The latest trade data suggest that, seasonal distortions aside, both exports and imports strengthened at the start of 2017,” said Julian Evans-Pritchard, China economist at Capital Economics.
Meanwhile, investors in Japan were likely worried about a possible pullback in U.S. stocks after their recent string of record highs. Overnight, the Dow Jones Industrial Average DJIA, -0.33%  slipped 0.1%, while both the S&P 500 SPX, -0.23%  and Nasdaq COMP, +0.06%  ended down 0.3%.
Japan’s economy grew at a faster pace than initially estimated in the quarter ended December, data released Wednesday showed, with firms ramping up investment amid an initial surge of optimism over the Trump administration’s possible policies. The Japanese economy grew at an annualized pace of 1.2% from the previous quarter, compared with the government’s preliminary estimate of 1.0%, but economists had expected an upward revision to an expansion of around 1.6%.
“Japanese GDP, despite being an upgrade, it’s still disappointing a little bit,” said Christoffer Moltke-Leth, director of global sales trading at Saxo Capital Markets.
Among the bright spots, Toshiba 6502, -3.67%   shares climbed 2.2%, lifted by a Nikkei report that Chinese electronics maker Midea 000333, +0.82%   is interested in investing in the Japan firm’s semiconductor unit.
Toshiba’s shares were also supported by speculation that some short positions would have to be covered once Toshiba is removed from the Topix, a stock index popular among the passive investors who often lend shares to short-sellers, noted Kobata at Matsui Securities.
Looking ahead, investors will be watching for the European Central Bank’s interest rate decision on Thursday and the U.S. nonfarm payroll number on Friday, both of which could send ripples across global markets.
Read: ‘Wildcard’ for ECB rates and 4 other things to watch at Thursday’s meeting
And: Opinion: 5 ways the Fed rate hikes will hit global markets
Carla Mozee, Sara Sjolin
European stocks eked out small gains in a choppy session on Wednesday, with mixed economic data from the region and the European Central Bank meeting later in the week keeping investors from placing any big bets.
The Stoxx Europe 600 SXXP, +0.08% ended 0.1% higher at 372.58, after swinging between small gains and losses throughout the day.
The index moved a small leg higher in afternoon action after U.S. private-sector payrolls data showed stronger-than-expected job creation in the world’s largest economy. The ADP jobs report showed 298,000 jobs were added in February, beating consensus estimates of around 189,000. The solid data has further cemented expectations the Federal Reserve will raise interest rates next week.
European investors closely watch U.S. data, as stronger economic conditions across the pond also drive sentiment in Europe.
U.S. stocks were little changed.
U.K. budget: Stocks in London were also seesawing for most of the session, with the U.K.’s FTSE 100 UKX, -0.06% ending 0.1% lower at 7,334.61 after the government unveiled its spring budget, the last before Brexit negotiations begin.
U.K. Treasury chief Philip Hammond said growth said the 2017 forecast for British economic growth was upgraded, to 2% from a previous estimate of 1.4%, but that growth is expected to slow in 2018.
“Apart from skimming a few pounds off the top of dividend income, the first and last Spring budget from Chancellor Philip Hammond was a bit of a damp squid. In a time of Brexit uncertainty, a nice boring budget from Spreadsheet Phil was probably the order of the day,” said Jasper Lawler, senior market analyst, at London Capital Group, in a note.
The budget presentation came ahead of the European Central Bank’s policy decision on Thursday and Friday’s closely watched monthly jobs report from the U.S., the world’s largest economy.
For the ECB, “with eurozone inflation now at 2%, key to how markets respond to the announcement will be any change to forward guidance, the tone of Chief [Mario] Draghi’s post-meeting press conference and the extent to which the central bank revises its economic forecasts,” analysts at Econoday said in a note.
Read: ‘Wildcard’ for ECB rates and 4 other things to watch at Thursday’s meeting
And: There’s another land of opportunity in the reflation trade—Europe
Movers: Adidas AG shares ADS, +9.13%  leapt 9.4% after the sportswear and equipment maker raised its midterm earnings targets and its 2016 dividend after its fourth-quarter and full-year results were stronger than expected.
Deutsche Post AG DPW, -2.39%  logged a more than 25% rise in net profit in the fourth quarter, leading the German parcel delivery company to increase its dividend for the year. But shares ended down 2.8%.
Inmarsat PLC ISAT, +8.55% IMASY, +7.57%  shares popped up 8.6% as the satellite operator reported a 5% rise in fourth-quarter pretax profit and raised its final dividend payment.
Data: France’s trade deficit widened to 7.94 billion euros ($8.38 billion) in January from €3.57 billion in December, as exports of Airbus AIR, +0.40%  aircraft slumped. A jump in imports of pharmaceutical products and higher costs for imported oil also contributed to the wider deficit.
German industrial production rose sharply in January, by 2.8%, despite a drop in manufacturing orders at the start of the year.
Indexes: Germany’s DAX 30 DAX, +0.01%  barely managed a gain, up 1.17 points at 11,967.31, while France’s CAC 40 PX1, +0.11% ended 0.1% higher at 4,960.48.
The euro EURUSD, -0.0379%  traded at $1.0544, down from $1.0568 late Tuesday.
Wallace Witkowski, Joseph Adinolfi
The Dow industrials and S&P 500 closed lower for a third consecutive session Wednesday as oil prices dropped and a stronger-than-expected report on private-sector employment helped to bolster expectations for an interest-rate hike next week.
The Dow Jones Industrial Average DJIA, -0.33%  declined 69.03 points, or 0.3%, to 20,855.73, with a 2.8% decline in Caterpillar Inc. CAT, -2.81% stock, and shares of Exxon Mobil Corp. XOM, -1.81% and Chevron Corp. CVX, -1.97%  falling nearly 2%. Caterpillar shares were getting hammered after a report commissioned by the government accused the company of tax-accounting fraud, according to a report in the New York Times.
The S&P 500 index SPX, -0.23%  finished down 5.41 points, or 0.2%, at 2,362.98, as a 2.5% drop in energy stocks offset gains in the consumer-discretionary and health-care sectors. Oil prices CLJ7, +0.68% plummeted 5.4% to settle at $50.28 a barrel after government data showed a rise in crude-oil inventories.
It marks the first time since late January that the Dow and the S&P 500 have both closed lower for three consecutive sessions.
The Nasdaq Composite Index COMP, +0.06%  narrowly avoided a loss on the session, rising 3.62 points, or less than 0.1%, to close at 5,837.55.
Read: Financial ETFs rise as ADP data firm Fed rate-hike expectations
Paycheck-processing firm ADP reported Wednesday the private sector added 298,000 jobs in February. That data comes in advance of government data on jobs due Friday. A weak number could dent expectations for a March hike, the odds of which rose sharply last week, market strategists said, as a bevy of Fed officials signaled their support for raising rates.
“We’re starting this week off pretty slowly and sideways and I think that the jobs number will end up deciding the direction of this market,” said Art Hogan, chief market strategist at Wunderlich Securities.
Stocks have risen dramatically since the Nov. 8 U.S. election, in part because investors expected that President Donald Trump would move swiftly to implement a slate of fiscal policies — including sweeping corporate tax cuts, a $1 trillion infrastructure-spending package, and a rollback of financial regulations — that he touted during the campaign.
But the postelection rally has stalled in recent days, in part because the Trump administration has pushed back the timeline for its tax-reform efforts and provided scant details about its other plans. Now, Republicans are squabbling over a plan for repealing and replacing Obamacare that was announced on Monday.
“What we’re seeing is expectations starting to wither a little bit with regard to the timing of Trump implementing his agenda,” said James Abate, chief investment officer at Centre Asset Management.
Read: Great jobs report or not, Fed appears bent on raising interest rates
See: Fed may go ‘old school’ on rate hikes. says ‘Bond King’ Jeff Gundlach
In other economic news, a report on business inventories showed that wholesale inventories for January were down 0.2%.
See: MarketWatch’s economic calendar