Daily Market Update – August 03, 2012

Top News Highlights

The House of Representatives has voted to extend the Bush-era tax cuts for all incomes by a wide margin, responding to a tax cut passed by the Senate that was aimed more at the middle class. The Republican-ruled House voted 256-171 for the extension, with 19 Democrats joining Republicans and one Republican - Rep. Tim Johnson of Illinois - voting against it. The House vote was an answer to the Democratic-controlled Senate, which successfully voted 51-48 on Jul 25 to pass a White House-supported plan that would allow tax cuts for wealthier Americans to expire while extending them for families that earn less than $250,000. The House voted separately to reject that bill, 257-170

Economic Highlights

The U.S. employment index improved for the 29th consecutive month on a yearly comparison, but the rate of expansion decelerated in Jul, Monster Worldwide said. The employment index rose 2% annually, vs. 5% growth seen a month ago. At the same time, the index fell to 147 in Jul from 153 in Jun. About 75% of the industries monitored by the index showed positive annual growth in Jul. Transportation and warehousing recruitment continued to place among the top sectors with 11% recruitment growth, at a moderating pace vs. 22% in Jun
The European Central Bank indicated it may again start buying government bonds to reduce crippling Spanish and Italian borrowing costs but the conditions it set and the dissenting voice of its key German member disappointed markets. In the latest move to contain the euro zone crisis, ECB President Mario Draghi indicated that any intervention would not come before Sep - and only if governments activated the euro zone's bail-out funds to join the ECB in buying bond
China's non-manufacturing sector growth eased in Jul as inflow of new orders weakened, the latest survey by the China Federation of Logistics and Purchasing showed. The seasonally adjusted purchasing managers' index for the services sector fell to 55.6 in Jul from 56.7 in Jun. Signaling weak demand conditions both at home and abroad, the new orders index fell to 53.2 in Jul from 53.7 in Jun