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Morning Market Roundup: 176K Jobs Added in June, Moody's Eyes More Downgrades, Bank of England & Stimulus


Here's what's important in the business world this morning:

Jobs: A private survey shows U.S. businesses increased hiring in June, according to payroll provider ADP. The report claims businesses added 176,000 jobs last month. That's better than the revised total of 136,000 jobs it reported for May.

The report only covers hiring in the private sector and excludes government job growth. The Labor Department will offer a more complete picture of June hiring on Friday.

The ADP survey often deviates sharply from the government report. In May, the Labor Department said employers added just 69,000 jobs, the fewest in a year and nearly half ADP's estimate.

Meanwhile, fewer people applied for U.S. unemployment benefits last week.

Weekly unemployment benefit applications dropped by 14,000 to a seasonally adjusted 374,000, the Labor Department said Thursday. That's the fewest since the week of May 19.

Moody’s: Two leading credit rating agencies took steps Thursday toward downgrading Barclays in the wake of a trading scandal that's seen three senior officials, including chief executive Bob Diamond, hand in their resignations.

Though both Moody's and Standard & Poor's maintained their ratings on the bank, they lowered their outlooks to “negative” from “stable.” That means that a downgrade of the actual rating is now more likely.

Barclays did receive some respite from another of the three big agencies, Fitch Ratings, which said its view was unaltered by the interest rate scandal and resignations.

Although Fitch said political, regulatory and reputation risks for Barclays and other major global banks had increased, it added "the direct implications (for Barclays), in terms of the size of the regulatory settlements announced last week, are easily manageable given its capital and earnings capacity."

English Stimulus: The Bank of England on Thursday backed another 50 billion pounds ($78 billion) injection into the ailing British economy as it kept its main interest rate at the record low 0.5 percent.

The move by the Bank's rate-setting Monetary Policy Committee was widely anticipated and raises the amount it is pumping into the British economy since March 2009 to 375 billion pounds. It is the first stimulus since February.

Under the so-called quantitative easing program, the Bank purchases British government bonds, known as gilts, from banks, in the hope that they will use the money to lend to businesses and consumers.

The new purchases are expected to take 4 months to complete.

Low Retail Sales: Shoppers, worried about jobs and the overall economy, pulled back on spending in June, resulting in tepid sales results for many retailers.

As merchants reported their sales early Thursday, many of them disappointed. Costco Wholesale Corp. reported a gain below Wall Street expectations. Target Corp. and Macy's Inc. also missed estimates. One bright spot was Limited Brands, which reported a robust gain that surpassed Wall Street predictions.

Only a handful of chains representing roughly 13 percent of the U.S. retail industry report monthly sales. Those figures are based on stores open at least a year and are a key measure of retailers' health because they exclude newly opened and closed stores. Economists watch the numbers because they offer a snapshot of economic activity.

Other areas show a struggling global economy. U.S. manufacturing shrank in June for the first time in nearly three years, and employers have pulled back on hiring. Europe faces a recession and growth has slowed in big countries like China. Worries about jobs sent shoppers' confidence down in June for the fourth straight month in a row.

The Associated Press contributed to this report.

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