US shares ended a two-week losing streak as investors regained their confidence following a bout of nerves in late October.
America’s Dow Jones Industrial Average moved back above the 10,000 point mark, and ended the week above that level.
However, unlike trading on Thursday and earlier when the market jumped sharply, Friday saw little enthusiasm as investors considered the latest US job losses, with the unemployment rate above 10% for the first time in more than a quarter of a century.
The 10.2% rate was a surprise, the 190,000 jobs lost last month a bit higher than forecast, but upward revisions cut previously reported losses for August and September and were seen as positive.
In fact September’s non-farm first estimate was revised to a decline of 219,000 jobs from the previously reported 263,000-job decline.
That original estimate for September set off fears the economy was not going to improve as quickly as thought. Those fears faded last week.
Late on Friday the Fed released figures showing yet another fall in consumer credit in September, down for the eighth straight month which is the longest fall yet recorded.
That helps confirm the idea that while the economy has broken the grip of recession, the recovery is more of a rebound and has yet to take hold throughout the US.
The Dow rose 17.46 points, or 0.2%, to 10,023.42, up 3.2% on the week.
The S&P 500 Index rose 0.3% to 1069.30, also up 3.2% on the week.
Nasdaq was up 0.3% to 2112.44, up 3.3% on the week.
Bank regulators, led by the Federal Deposit Insurance Corporation, closed five banks in Georgia, Michigan, Missouri, Minnesota and California on Friday, pushing the toll of US bank failures this year to 120 as deteriorating loans continue to take their toll on financial institutions.
One bank, United Commercial Bank of San Francisco, with more than $US220 million in TARP taxpayers money has also been lost. It is also reported to have owned a banking licence in China.
All up, the five failures will cost the FDIC, the key regulator, another $US1.5 billion in new losses.
By comparison, 25 US banks failed last year and just 3 in 2007.
Though month-to-month job losses are slowing, unemployment is up by 8.2 million people since the start of the recession in December 2007.
No wonder foreclosures are still a problem, consumer credit and retail sales are weak and some analysts are starting to wonder if many companies, especially retailers, might misjudge the end of year selling season and overstock, which in turn might lead to a slowing of demand in the first quarter or so of 2010.
Asian markets had a tougher week.
The MSCI Asia Pacific Index fell 0.7%.
The Reserve Bank’s rate rise here helped push the ASX 200 down 1.1%.
South Korea’s Kospi index fell 0.5%. Tokyo’s Nikkei 225 Average fell 2.4%.
The Australian dollar, helped by the second RBA rate rise, given the backing of another rate rise, was the best performing currency over the week, up 2.5% against the US dollar.
The Aussie closed at 91.90 US cents, up half a cent from the Sydney close.
In Europe, the Dow Jones Stoxx 600 Index added 0.2% on Friday to end the week up 1.7%. London’s FTSE 100 rose 2% over the week.
