Morning Market Roundup: Record EU Unemployment, China Contracts, Spain Downgrade?

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

EU Unemployment: Unemployment across the 17 countries that use the euro remained at its record high rate of 11.4 percent in August, official data showed Monday, renewing concerns that efforts to slash debts have sacrificed jobs.

In August, 34,000 more people lost their jobs in the eurozone, according to data released Monday by the European statistics agency, Eurostat. The unemployment rate - the highest since the euro was created in 1999 - is the same as July's, which was revised up from 11.3 Monday.

Greece and Spain have the highest unemployment rates in the eurozone, around 25 percent for both.

European countries outside the eurozone are faring slightly better than those inside. For all 27 countries in the EU, the unemployment rate for August held steady at 10.5 percent after the July rate was also revised up slightly.

China: China's manufacturing contracted again in September.

An industry group, the China Federation of Logistics & Purchasing, said Monday its monthly purchasing managers' index stood at 49.8 points on a 100-point scale on which numbers below 50 indicate a contraction. That was up 0.6 points from August's numbers and the first improvement in four months.

China's economic growth fell to a three-year low of 7.6 percent in the quarter ending in June. That is strong by Western standards but has hurt Chinese manufacturers and construction companies that depend on high growth.

A separate PMI released Saturday by HSBC Corp. showed activity rose slightly to 47.9 on a similar 100-point scale, still showing a contraction but improved from August's 47.6.

Spain Downgraded? European stocks edged higher on Monday as investors cautiously welcomed the result of stress tests of Spain's banks. But the threat that Moody's might downgrade the country's debt rating to junk status limited gains.

Casting a shadow over markets was a possible downgrade by credit rating agency Moody's of Spain's debt rating to junk status. The agency has the debt on review and is due to release its findings any day this week. Any cut in the rating would make Spain's debt non-investment grade.

That would hurt Spanish markets because many pension funds and banks would have to sell them from their portfolios and desist from buying them at auction. That, in turn, would force Spain to pay higher rates to borrow money, further hurting its finances.

U.S. Futures: U.S. stock futures are rising as investors cautiously welcome the result of stress tests of Spain's banks and a slight improvement in a survey of the eurozone's manufacturing sector.

Dow futures are up 66 points at 13,421. The broader S&P 500 futures are up 6 point to 1,441. Nasdaq futures are up 16 points at 2,808.

European markets also rose broadly. In Asia, several markets were closed for holidays. In Tokyo, Japan's Nikkei 225 index fell after a survey showed confidence in the economy weakening.

The Associated Press contributed to this report.