By Carla Mozee, MarketWatch Balfour Beatty rebuffs bid for
investment arm
LONDON (MarketWatch) -- The U.K. pound fell but stocks climbed
Friday following a stronger-than-expected jobs report from the
U.S., a major trading partner for Europe.
The FTSE 100 rose almost 1% to end at 6,742.84, extending gains
after the U.S. Labor Department said the economy added 321,000 jobs
in November, the largest amount since early 2012. The Stoxx Europe
600 stretched its advance to 1.8% after the jobs data.
For Europe, the stronger-than-expected jobs report "gives some
hope that with slowing economic growth out of China, with Japan
being back in a recession, with Europe generally being weak, the
U.S. can move back to being a pretty strong engine for global
economic growth," said Michael Ball, founder of Colorado-based
Weatherstone Capital Management, in a telephone interview. The firm
has $850 million assets under management.
The U.S. dollar (DXY) rose against its rivals after the report,
knocking the pound (GBPUSD) back to buying $1.5601 compared with
$1.5686 before the jobs data.
The addition of 200,000 or more jobs would have kept "the dollar
well bid as it will confirm the market expectations of a Fed rate
hike sometime in [the first quarter] of 2015," said Boris
Schlossberg, managing director of FX strategy, at BK Asset
Management in a note earlier Friday.
The Bank of England, meanwhile, is likely to begin raising rates
in the later months of 2015 as growth in the key eurozone market
stagnates and domestic inflation levels lose steam. A survey
released Friday by the Bank of England showed the British public
have pushed down their expectations for an interest-rate hike over
the next 12 months, and foresee the rate of inflation at 2.5% over
the coming year, compared with expectations in August of a 2.8%
rate.
Stocks: Only the mining and energy-related groups finished lower
on the FTSE 100, continuing a painful run of losses as companies
tackle issues ranging from oversupply, slowing demand and falling
prices. Tullow Oil PLC fell 2.7% and miner Randgold Resources Ltd.
fell 2.4%. Iron-ore heavyweight BHP Billiton PLC fell 1.3% and
oil-services firm Petrofac Ltd. declined 1.3%, ending the week down
5.7%.
U.S. oil futures were crushed Friday, dropping toward five-year
lows, while Brent crude was off by more than 3% for the week.
"With the drop that we've had in oil prices, energy is something
that's become more attractive to us ... we've selectively been
adding to that area," said Ball. His primary holding for the space
is the Energy Select Sector SPDR (XLE) , which tracks the
performance of all energy stocks in the S&P 500 index. When oil
prices slumped in 2008, dividend growth in the sector fell from
double-digits to single-digit, but growth later resumed an upward
trend, he noted. Ball expects a similar trend to play out amid the
current round of crude-oil price declines.
As oil prices fell, shares of British Airways' parent
International Consolidated Airlines PLC shot to the top of the FTSE
100 as they rallied 4.8%.
Shares of aerospace equipment maker Meggitt PLC rose 3.8%,
boosted by an upgrade to a buy rating at Investec.
The FTSE 100 finished the week higher by 0.3%.
On the FTSE 250 index , Balfour Beatty PLC shares jumped 5.9%
after the construction-services company turned down a 1 billion
pound ($1.57 billion) bid from John Laing Infrastructure Fund for
its public-private portfolio.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires