GLOBAL MARKETS: U.S. stocks drop, euro up ahead of payrolls
NEW YORK, Aug 5 (Reuters) - U.S. and European stocks dropped on Thursday after an unexpected rise in weekly U.S. jobless claims underscored the weakening economy, and the euro ended slightly stronger against the dollar a day ahead of the U.S. government's monthly payrolls report.
"The claims data today was miserable and obviously it has a negative implication for the non-farm number tomorrow," said Phil Orlando, chief equity market strategist at Federated Investors, in New York.
BREAKINGVIEWS-China property crackdown stokes hard-landing worry
The author is a Reuters Breakingviews columnist. The opinions expressed are her own --
HONG KONG, Aug 5 (Reuters Breakingviews) - China's banking regulator wants to show it is more serious than its European counterparts. After banks passed a test based on a 30 percent fall in house prices, the regulator is trying to see whether lenders can handle a 50 percent drop. Such a sharp fall, while unlikely, would be hurtful to China and the world. But Beijing deserves credit for making a stress test living up to its name.
Rising leverage has become a concern for China's banking system. China's mortgages rose 48 percent in 2009, almost five times as fast as economic growth. Overall leverage is still low, and mortgages have traditionally been banks' safest assets. But a big increase in property prices has made buyers more stretched. Beijing's crackdown on the property sector has stoked more worries of a hard landing.
U.S. private sector job growth remains tepid
NEW YORK, Aug 4 (Reuters) - U.S. companies hired more workers in July but the gains are too slow to reduce unemployment and spur the economy significantly, reports showed on Wednesday.
The reports come two days before the government's more comprehensive jobs reading for the month and illustrate that while the economy's improving, the jobs market has a long way to go.
China acts on property speculation, tests banks anew
BEIJING, Aug 5 (Reuters) - China's banking regulator has ordered lenders to test the impact of a fall in house prices of up to 50 percent in key cities where prices have risen sharply, banking and regulatory sources said on Thursday.
The China Banking Regulatory Commission (CBRC) has also instructed banks to stop extending mortgages to people buying their third homes in four of the cities -- Beijing, Shanghai, Shenzhen and Hangzhou, the sources said.
Goldman plans to spin off prop trading-CNBC
CHARLOTTE, N.C., Aug 4 (Reuters) - Goldman Sachs Group Inc plans to spin off its proprietary trading business as early as this month to comply with the so-called Volcker rule, CNBC reported on Wednesday.
It would be the first move by the New York-based investment bank to adapt its business to comply with the U.S. financial reform package signed into law last month, and would follow similar moves from other banks.
Data boosts sentiment, but U.S. jobs looms
LONDON, Aug 5 (Reuters) - World stocks put in solid gains and Wall Street looked set of a positive start as investors embraced relatively buoyant economic news ahead of Friday's key U.S. jobs report.
"Corporate earnings will keep helping the market for some more time, but if macroeconomic numbers are going to take over, then good earnings will not be enough to support the market," said Koen De Leus, economist at KBC Securities.
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