Stocks Tick Higher Ahead of Jobs Report -- 2nd Update
Economists expect 179,000 new U.S. jobs were added in August
-- Nikkei ends six-week losing streak
-- European stock funds post biggest outflow since February
Stocks started the month a touch higher Friday ahead of the U.S. jobs report, a key gauge of the world's largest economy.
Futures pointed to a 0.2% opening gain for the S&P 500 after strong economic data helped major benchmarks advance on Thursday. Stocks in Japan and Australian stocks rose modestly, echoing the higher finish on Wall Street, while the Stoxx Europe 600 climbed 0.5% after posting a third consecutive monthly decline in August.
Many investors have said they would be watching Friday's wage growth figures to gauge the outlook for monetary policy. Despite low unemployment and steady job creation, earnings have been stuck at a modest rate for a long time, drawing caution from policy makers.
"You're not getting a lot of wage growth," said Anish Chopra, equities and fixed-income specialist at Portfolio Management Corp. "If you look at what the Fed can do, I don't think there's much more room they have to move up [rates], because there's very little inflation that's out there."
Investors currently see just a roughly 42% chance of a rate rise by the end of December, according to Fed-funds futures tracked by CME Group.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was flat Friday, on track for a small weekly gain, but down significantly on the year.
September is traditionally a weaker month for stock markets, with a range of risks on the horizon for markets including meetings of the Federal Reserve and European Central Bank and the chance of tensions around the U.S. debt ceiling.
"It seems we've had a very quiet August despite [Hurricane] Harvey and North Korean missiles," said Tim Haywood, an investment director at GAM Holding. "Stocks and risk markets are surprisingly robust, but there's very little margin of safety left."
In European stocks Friday, shares of Volvo AB climbed 6.9%, leading gains in the region after the auto maker said it was targeting operating margins over 10%.
Shares of drug addiction treatment developer Indivior PLC fell 36% after it said a U.S. court found treatments haven't infringed its patents.
Investors pulled the most from European equity funds since February in the week through Wednesday amid concerns about this month's ECB meeting and a recent climb in the euro to a 2 1/2 -year high, according to fund-tracker EPFR Global.
"The ECB is getting in a bit of a bind given the strength of the euro," said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. "As an export driven economy, you worry about the impact of a strong currency."
Earlier, Asian shares mostly inched higher, with China gaining slightly after a private gauge of Chinese factory activity rose for the third straight month in August. The Shanghai Composite Index was last up 0.2%, while stocks in Shenzhen added 0.6%.
"Sentiment is positive in China," said Will Leung, head of investment strategy at Standard Chartered Wealth Management. He said people are optimistic that Chinese economic data due next week will also show improvement after a soft batch of readings for July.
Japan's Nikkei Stock Average was up 0.2% amid gains in energy companies. The index ended a six-week losing streak, its longest since early 2014.
Australia's S&P ASX 200 edged up 0.2%, led by health-care shares, while markets in Singapore, Indonesia, Malaysia and the Philippines were closed Friday for a holiday.
Rory Gallivan contributed to this article.
Write to Riva Gold at riva.gold@wsj.com and Lucy Craymer at Lucy.Craymer@wsj.com
(END) Dow Jones Newswires
September 01, 2017 07:25 ET (11:25 GMT)