Apple Results, Jobs Report to Steer Markets

By David Hodari and Riva Gold Features Dow Jones Newswires

Jobs report to steer rate expectations

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-- Apple jumps in premarket trading

-- Spanish stocks drop on political tensions

Technology companies led gains in global stock markets Friday after Apple reported better-than-expected results, although market moves were muted ahead of the U.S. jobs report.

S&P 500 futures and the Stoxx Europe 600 were both up 0.1% after a torpid trading session in Asia.

Nasdaq-100 futures rose 0.4% and global technology companies moved higher after Apple said late Thursday that it delivered its best quarterly growth in two years.

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Apple shares jumped 3.9% in premarket trading after climbing around 45% so far in 2017, playing a large role in this year's rally in U.S. stocks. A close for Apple above $174.24 on Friday would take its market value over $900 billion for the first time.

Global technology shares mostly moved higher in concert, also supported by upbeat results from Alibaba and other U.S. tech giants earlier this week. In Europe, shares of chip-gear firm ASML Holding rose 1.2%, chip maker Infineon Technologies rose 1.8% and semiconductor maker STMicroelectronics rose 2%. In Taiwan, shares of Largan Precision were up 3.6% and Hon Hai Precision Industry up 0.4%.

Investors across the globe were preparing for the U.S. nonfarm payrolls report, due before the U.S. market open on Friday. The report is a key indicator of the strength of the economy and a strong showing would help smooth the way for the Federal Reserve to raise interest rates when it meets Dec. 13 and again in 2018.

Economists surveyed by The Wall Street Journal predicted 315,000 jobs were created in October. After September numbers that showed the first monthly drop in seven years -- attributed to the hurricane effect -- "expectations are quite high" for the October reading, said OM Financial client adviser Stuart Ive.

The WSJ Dollar Index, which weighs the U.S. currency against a basket of 16 others, ticked 0.1% higher ahead of the report as investors continued to parse the details of a Republican tax bill and the nomination of Fed governor Jerome Powell to be the next chairman of the central bank.

The Dow industrials fell more than 80 points Thursday after a detailed summary of the tax plan was reported, but the blue-chip index climbed later in the session to end higher.

"We think tax reform is more likely than the market thinks it is," said Jon Adams, investment strategist with BMO Global Asset Management, noting expectations for a tax cut in 2018 are one of the reasons for the asset manager's modest preference for equities over bonds.

Still, "this is a very fluid process and it's likely that there will be a lot of change to what is currently being proposed," he added.

U.S. 10-year government bond yields edged up to 2.353% from 2.347% Thursday. German 10-year government bond yields edged down to 0.360% from 0.369%. Yields move inversely to prices.

In Europe, shares of Renault rose 4.4% after the French government said it was selling part of its stake in the company. That helped offset declines in the banking sector, with shares of Société Générale down 3.1% after it said its third-quarter profit fell significantly.

Spanish bank shares also fell, dragging Spain's IBEX 35 down 1.3%. A prosecutor asked a Spanish court on Thursday to issue an arrest warrant for Carles Puigdemont, the leader of Catalonia's secessionist movement who fled to Belgium to escape authorities in Spain.

"I don't think [Catalonia] is played out yet -- the [request for] arrests have probably inflamed the situation and there's no doubt going to be a populist response to arrests," said Gautam Batra, head of investments at Mediolanum Asset Management.

The British pound edged up 0.2% to $1.3086 after its biggest daily decline since June. The Bank of England on Thursday raised interest rates for the first time in more than 10 years but signaled that further increases weren't imminent, causing the pound to slump 1.4% against the U.S. dollar.

"More important than the decision were the comments during the press conference and inflation report, which were quite dovish," said Markus Stadlmann, chief investment officer at Lloyds Banking Group. "There are so many moving parts with regards to the economic situation for the U.K. at the moment that for investors, we have to take it step by step."

Asia-Pacific equities were little changed ahead of the U.S. jobs report, with Japanese markets closed for a holiday.

Chinese tech giant Tencent rose 1.7% to a fresh record after peer Alibaba reported positive quarterly results. The gain helped Hong Kong's Hang Seng Index -- of which Tencent is the largest component -- rise 0.3%.

Australia's S&P/ASX 200 gained 0.5% to finish at its highest since April 2015 as commodity-price gains lifted materials and mining companies. Steel and key steel ingredient iron ore were among the leaders in this week's metals rebound, while nickel jumped 23% over the past month on expectations that rising demand from electric-vehicle producers will tighten supplies.

-Lucy Craymer contributed to this article

Write to David Hodari at David.Hodari@dowjones.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

November 03, 2017 08:31 ET (12:31 GMT)