Stocks slumped as Rajoy said he has no plans to request rescue funds for Spain in the near term, defying speculation that the nation was preparing to ask for a bailout.
Spanish regional presidents met in Madrid after Economy Minister Luis de Guindos said yesterday the nation is pressing on with its analysis of whether to seek a bailout.
In London the FTSE 100 shed 11 points (-0.2%) to settle at 5809, whilst the CAC (-0.6%) and DAX (-0.3%) also lost ground. Stateside, the Dow Jones gave up 33 points (-0.2%) to settle at 13482, whilst the S&P (+0.1%) and NASDAQ (+0.2 %) closed in the green.
The jobless rate in the US probably rose to 8.2% last month from 8.1% in August, as employers kept a lid on hiring, economists said before a report this week.
Payrolls increased by 115,000 in September, less than the 139,000 average over the first eight months of the year, the report, due 5 October, may also show.
The euro gained versus the dollar for a second day as speculation persisted that Spain will eventually seek a bailout even after Prime Minister Mariano Rajoy said a request for rescue funds is not imminent.
Gold futures fell from a 10-month high on renewed concern that demand in Asia will remain slow. Silver also declined. Oil fell for the first time in four days as gasoline dropped on expectations that a supply shortage in New York Harbor will ease.
Crude for November delivery slipped 59 cents to settle at $91.89 a barrel on the NYMEX. Prices are down 7% this year. Today’s session will bring us the Trade Balance (11:30am, AEST) and HIA New Home Sales (tentative).