Stocks Tick Higher Ahead of Jobs Report -- 3rd Update

By Riva GoldFeaturesDow Jones Newswires

Economists expect 179,000 new U.S. jobs were added in August

-- Nikkei ends six-week losing streak

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-- European stock funds post biggest outflow since February

Signs of strength in the world economy helped stocks extend gains Friday ahead of the U.S. jobs report.

Futures pointed to a 0.3% opening advance for the S&P 500 after upbeat data on personal spending and income lifted benchmarks on Thursday. Shanghai stocks ended at their highest since 2015 after a factory reading, while the Stoxx Europe 600 jumped 0.6% 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 U.S. 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, edged down 0.1% on Friday.

In European stocks Friday, shares of industrial goods and construction companies were among the best performers in Europe as data showed activity in the eurozone's manufacturing sector increased in August to a joint 74-month high.

Shares of Volvo AB climbed 7.2%, 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 35% 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 European Central Bank 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 closed 0.2% at its highest level since December 2015 as coal and steel stocks advanced. Stocks in Shenzhen added 0.6%.

"I think China is a big winner here," Mr. Hartman added, noting the country's growth rate is steady just as it has stemmed the flight of capital outside the country and the yuan has stabilized.

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, with its biggest weekly gain since June.

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.

In commodities, gasoline futures jumped Friday as Hurricane Harvey caused U.S. refinery and pipeline shutdowns. Brent crude oil fell 0.4% to $52.64 a barrel.

Lucy Craymer, Rory Gallivan and

Yifan Xie

contributed to this article.

Write to Riva Gold at

(END) Dow Jones Newswires

September 01, 2017 08:25 ET (12:25 GMT)