Finance Markets

November 16, 2006

Dow hits another new intra-day high

Permalink: Dow hits another new intra-day high

Filed under: Equities, Economy, US

The New York equities markets were higher in the afternoon on Thursday, with the Dow Jones Industrial Average up 0.4 percent to 12,299.57 after going as high as 12,325.91 earlier in the session, a new all-time high. The Nasdaq Composite had added 0.2 percent to 2,447.67, while the S&P 500 was 0.3 percent higher to 1,400.89.

Dell Computer dropped 3.5 percent to $24.86 after it delayed its preliminary third-quarter report due to a Securities and Exchange Commission inquiry into the company’s accounting practices. On the other hand, Hewlett Packard added 0.7 percent to $40.07 ahead of its quarterly report, due to be released after the close of trade.

Elsewhere among technology-related sectors, Applied Materials was 4.2 percent lower to $17.87 on a warning that sales will decline on the order of 5 to 10 percent. Internet search engine Google, however, added 0.8 percent to $495.80.

There was bids news in the media sector. Clear Channel Communications, the radio station operator, added 3.9 percent to $35.46 and went as high as $35.88 after it agreed to be acquired by a group of private equity firms for $19 billion. Meanwhile, Readers Digest added 7.8 percent to $16.69 after it agreed to be purchased by a group of investors.

In the retail sector, Sears dropped 5.4 percent to $169.51 after earnings were lower than had been anticipated.

M&A rumors help European auto sector

Permalink: M&A rumors help European auto sector

Filed under: Equities, Economy, Europe

The FTSE Eurofirst 300 ended the session Thursday 0.2 percent higher to 1,473.84, its highest close in five and a half years, buoyed by gains in the automobile manufacturing sector.

Stock exchanges were mixed on the session, with Euronext 1.1 percent higher to €85.95 on a third quarter report that was about as expected, while Deutsche Borse fell 0.7 percent to €124.06 after dropping plans to merge with Euronext.

In the semiconductors sector, Infineon dropped 2.3 percent to €9.57 after warning of lower sales and earnings in the current quarter, after its fourth quarter operating profits were lower than had been hoped after a key customer went bankrupt.

In the cars and trucks sector, MAN reasserted its hostile bid for Scania, despite repeated rejections. Volkswagen, the largest shareholder in both companies, will hold a board meeting later in the day to consider the offer. There were also rumors that Scania would submit a counter bid for MAN. Porsche, meanwhile, was said to be thinking of bidding for Volkswagen after having already said it would increase its holding in VW.

Everyone involved in this M&A dance benefited, with the exception of Scania, whose B shares dropped 2 percent to SKr465.50. Volkswagen added 1.5 percent to €85.50, while MAN gained 3.6 percent to €73.64 and Porsche was 4.7 percent higher to €921. There were also gains elsewhere in the sector, as Renault was up 0.9 percent to €97.85, DaimlerChrysler added 1.9 percent to €48.41, and Peugeot gained 3.4 percent to €49.77.

Tokyo markets decline on interest rate decision

Permalink: Tokyo markets decline on interest rate decision

Filed under: Equities, Economy, Asia, Japan

The Tokyo equities markets were lower on Thursday after the Bank of Japan chose to maintain interest rates at their current level. The Nikkei 225 dropped. 0.5 percent to 16,163.87, while the Topix index was 0.6 percent lower to 1,582.04. Declines came in both domestic and export-focused sectors.

Real estate was one exception to the declines on the day, as the sector as a whole gained 0.3 percent on the expectation that land prices will soon emerge from deflation nationwide. In the oil sector, Inpex added 1.9 percent to ¥968,000 on an upgrade of its full year expectations for recurring profits.

The second-largest advertising company in Japan, Hakuhodo, added 4.9 percent to ¥7,010 on an upgrade from “neutral” to “outperform” from Credit Suisse, citing the company’s apparent undervaluation.

Nissin Food gained 5.5 percent to ¥3,630 on an increased recommendation from Merrill Lynch, from “sell” to “buy”, after the instant noodle maker bid for Myojo Foods. Myojo gained 2.6 percent to ¥883.

Among losers, the insurance sector dropped 1.9 percent as a whole, with general insurer Sompo Japan 1.6 percent lower to ¥1,411. Also declining was the transport equipment sector, which fell 1 percent. Toyota dropped 0.8 percent to ¥7,230.

US natural gas inventories up by 5 billion cubic feet

Permalink: US natural gas inventories up by 5 billion cubic feet

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices were lower on Thursday, with Brent crude down 77 cents to $59.84 per barrel. Meanwhile, December contracts for West Texas Intermediate crude was $1.08 lower to $57.68 per barrel. With December contracts expiring at the end of the trading session, January WTI traded in higher volumes and dropped 80 cents to $59.92 per barrel.

Meanwhile, the Energy Information Administration issued a report showing that natural gas stockpiles were up by 5 billion cubic feet last week. The announcement sent Nymex Henry Hub natural gas 25 cents lower to $7.867 per million British thermal units.

In the metals markets on Thursday, gold was slightly higher to $623.00 per troy ounce.

Base metals were mixed, with copper 1.6 percent lower to $6,800 per tonne on a report from Bloomsbury Mineral Economics that predicted that the refined copper market would run a surplus of 45,000 tonnes in 2007; its previous forecast had put copper at a deficit of 130,000 for next year. On the other hand, zinc added 0.7 percent to $4,220 per tonne on a report of a higher supply deficit this year than last from the International Lead and Zinc Study Group. The group reported that global demand was up by 4 percent and consumption in China has risen by 7 percent.

US core CPI up only 0.1 percent in October; dollar strengthens

Permalink: US core CPI up only 0.1 percent in October; dollar strengthens

Filed under: Forex, USD, GBP, Euro, Economy, Yen

Core consumer inflation was down in October, rising just 0.1 percent for a drop in the annual rate to 2.7 percent, down from 2.9 percent in September. Analysts said that while inflation is still higher than it should be, but that recent statements of concern by Federal Reserve officials seemed to be exaggerated considering that core inflation was now on the way down.

After the release of the new CPI data, the US dollar dropped briefly versus major currencies, but by mid-afternoon in New York, the greenback had added 0.1 percent against both the euro and the yen, to $1.2810 versus the euro and ¥118.10 against the yen. The dollar did not fare so well against some other currencies, however, as the South African rand added 0.6 percent to the dollar to R7.1600, while the Turkish lira gained 0.8 percent versus the greenback, to TL1.4335.

Meanwhile, the euro was not affected by yet another statement out of France, this time from French President Jacques Chirac, that members of the eurozone should have more input into monetary policy as set by the European Central Bank. The non-reaction to Mr. Chirac’s statement, added to the decision by the Bank of Japan to keep interest rates at their present level there, combined to send the yen 0.1 percent lower in relation to the euro, to ¥151.30.

Sterling was slightly higher versus both the US dollar and the euro on new data showing retail sales in the UK up by 0.9 percent in October, well ahead of the forecast of a gain of 0.3 percent. The UK currency added 0.1 percent versus the greenback, to $1.8900 versus the greenback, while it also added 0.1 percent against the euro, to £0.6775.

November 14, 2006

UK miners see gains

Permalink: UK miners see gains

Filed under: Equities, Economy, UK

In London on Tuesday, the FTSE 100 dropped 0.12 percent to 6,186.6 but the FTSE 250 added 0.05 percent to 10,718.2, a record high close.

Miners were up on the session. Anglo American added 0.6 percent to £22.40 on rumors that investment bank JP Morgan is attempting to put together a deal for the miner, including that he is talking to Brian Gilbertson, formerly of BHP Billiton but now chairman of Rusal of Russia. Meanwhile, Xstrata was 1 percent higher to £22.14.

Credit check provider Experian gained 2.6 percent to 615p after it was said that private equity was interested, although some analysts were doubtful of the report. Experian reports its quarterly results next week.

Retailers were down as J Sainsbury dropped 1.6 percent to 412½p even though its first half numbers, due today, are said to be positive, and Wm Morrison fell 1.8 percent to 264¼p on the news that half of its board of directors have recently sold shares.

BSkyB was 2.4 percent lower to 537p after its chairman, Rupert Murdoch, made comments that the company’s build-up of its broadband internet business. The comments came in an informal “chat” with investors in Australia.

Wolseley dropped 1.6 percent to £11.90 on rumors that it was about to bid for Dutch firm Hagemeyer. Most traders, however, discounted the talk and said that the decline was due to Home Depot’s worse than anticipated quarterly report in the US.

European telecoms up on quarterly reports

Permalink: European telecoms up on quarterly reports

Filed under: Equities, Economy, Europe

Profit-taking sent the European equities markets lower on Tuesday. The FTSE Eurofirst 300 dropped 0.3 percent to 1,462.69 as the telecommunications sector did well but banks saw losses.

The banking sector is still in the midst of mergers and acquisitions activity. In Italy, Banche Popolari Unite fell 2.7 percent to €20.29 and Banca Lombarda dropped 5.9 percent to €16.76 after Lombarda assented to an all-share offer from Unite worth €6.2 billion. The big decline for Lombarda came on ruined hopes of shareholders that there could be a cash bid from a foreign entity. One possible cash bidder mentioned was Santander of Spain, which dropped 0.1 percent on the session to €13.86.

Stock markets were lower, also on bids rumors. Deutsche Borse was 1.8 percent lower to €131 and Euronext dropped 3.8 percent to €89.80 on a report that Deutsche Borse could abandon its bid for Euronext. Deutsche Borse denied the report and said that its offer was still on the table.

In the telecommunications sector, Telefonica was up 1.2 percent to €15.60 after it said that operating revenues were up 43 percent in the first nine months of the year and upped its prediction for profits for the full year. Telekom Austria and Telenor each added 2.2 percent, to €19.83 and NKr105.25. The Austrian telecommunications operator reported that third quarter core profits were up 1 percent on growth in its international units and said that profit growth for the year will be at 30 percent.

Euro ends stronger versus sterling

Permalink: Euro ends stronger versus sterling

Filed under: Forex, USD, GBP, Euro, Economy, Yen

French prime minister Dominique de Villepin made remarks Tuesday that sent the euro down for a time before recovering later in the session. Mr de Villepin said that he believes that the European Central Bank cannot be allowed to be the sole determiner of exchange rates for the euro. The remarks, which came during a meeting with subcontractors for Airbus, were widely interpreted as meaning that the prime minister thinks the euro should be weaker. Analysts were surprised that the remarks had as much of an effect on currency markets as it did, since Mr de Villepin doesn’t have power to affect the exchange rate.

Apparently most investors came to the same conclusion, since the euro recovered quickly from the losses, ending up about the same versus the US dollar at $1.2809 and adding 0.4 percent in relation to sterling to £0.6760. The shared currency was helped by the ZEW index of investor sentiment, which came in at 53.0 for November, much higher than October’s 42.9. The dollar was not helped by lower US producer prices and retail sales, while sterling did not benefit from a UK producer price index that was at 2.4 percent in October when a rise to 2.6 percent had been anticipated.

The yen, meanwhile, was stronger versus both the US dollar and the euro, adding 0.3 percent to ¥150.68 in relation to the euro and gaining 0.4 percent against the greenback to ¥117.70. The Japanese currency benefited from data showing that the Japanese economy expanded more quickly in the third quarter than had been expected, raising the possibility that the Bank of Japan might send interest rates higher before the end of the year.

Government bond prices up in US, UK, Eurozone

Permalink: Government bond prices up in US, UK, Eurozone

Filed under: Bonds, Economy, US, Europe, UK, Japan

Prices for government bonds were up both in the United States and in Europe and the UK on Tuesday as producer price inflation fell more than had been anticipated. Core inflation was down more than in any month since August 1993. Meanwhile, while retail sales were down a bit less than had been expected in October, September’s numbers were revised downward. Both reports led to renewed hopes in some quarters that the Federal Reserve might drop interest rates early in the new year.

Yields on the two-year US Treasury bond dropped 3 basis points to a yield of 4.747 percent, while the ten-year bond was 3.7 basis points lower to 4.575 percent by the middle of the session in New York.

The price gains in the US helped Eurozone bonds. Economic growth in the region has been weaker than had been expected, while business sentiment in German was lower. Late in the day in London, the two-year Schatz had dropped 0.6 basis points to 3.703 percent, while the ten-year Bund was 1.5 basis points lower to a yield of 3.714 percent.

Inflation came in lower than expected in the UK. While October’s inflation was at 2.4 percent on an annualized basis, above what the Bank of England wants, it was less than analysts had thought it would be. The two-year gilt was yielding 4.957 percent, down 4.6 basis points, while the ten-year gilt was down 3.3 basis points to a yield of 4.531 percent.

Bucking the trend, the yield on ten-year Japanese government bonds added 6.5 basis points to yield 1.72 percent. Prices were down on new data that had the Japanese economy growing at more than twice the rate that had been expected in the third quarter.

November 13, 2006

UK miners lower on falling metals prices

Permalink: UK miners lower on falling metals prices

Filed under: Equities, Economy, UK

London equities markets were mixed on Monday. The FTSE 100 was 0.2 percent lower to 6,194.2 as dropping metals prices sent the UK mining sector lower. Meanwhile, the FTSE 250 was 0.5 percent higher, closing at 10,712.8. It was the fifth session in a row that the 250 has done better than the 100.

Homebuilders were mixed on the session. Berkeley Group added 6.8 percent to reach a new high of £17.02 on rumors that a consortium had bid for peer Crest Nicholson. The gain brought Berkeley’s advance over six sessions to 19 percent. Crest Nicholson, on the other hand, was 0.1 percent lower to 615p even though it was believed that its institutional shareholders will wait for a higher offer.

The insurance sector was higher, mainly on Resolution’s announcement that it is discussing deals with several other insurers. The life assurer added 5.1 percent to 667½p. Different analysts suggested different deals, including one with Scottish Widows the life assurance division of Lloyds TSB, with the UK life division of Prudential, or with Friends Provident. The talk sent Lloyds TSB up 1 percent to 561p, while Friends Provident added 1.3 percent to 214½p and Prudential gained 2.1 percent to 651½p.

In the mining sector Rio Tinto was 4 percent lower to £27.65, while Xstrata dropped 4.5 percent to £21.92, Kazakhmys fell 5 percent to £11.40 on lower copper prices, and Antofagasta was 5.3 percent lower to 468¼p.

European builders higher on 9-month results

Permalink: European builders higher on 9-month results

Filed under: Equities, Economy, Europe

In Europe on Monday the FTSE Eurofirst 300 closed 0.2 percent higher to 1,466.64 as the corporate earnings season continued to produce more positive surprise than negative ones.

In the construction sector, German group Bilfinger Berger added 1.7 percent to €48.40 after its first nine months were better than had been anticipated. The results earned the German builder an upgraded target share price from WestLB. Likewise, Spanish builder Sacyr Vallehermoso closed 15.2 percent higher to €54 on an increase in core earnings in its first nine months.

Deutsche Telekom added 2.6 percent to €13.48 and went as high as €13.62 during the day on the news that its chief executive had resigned and been replaced by the head of its mobile phone unit. Broker reaction was mixed. Morgan Stanley stuck with its rating of “overweight” and raised its target share price for the German telecom company from €13.10 to €13.50. Bear Stearns, on the other hand, repeated its recommendation of “underperform”, saying that a new chief executive would not make much of a difference on a board where the union controls nearly half of the seats.

Losers on the day included Novartis, which dropped 1 percent to SFr72.95 after it was announced that a US Food and Drug Administration decision on the approval of its diabetes drug, Galvus, for use in the United States, will be delayed for three months.

Tokyo markets lower ahead of GDP figures

Permalink: Tokyo markets lower ahead of GDP figures

Filed under: Equities, Economy, Asia, Japan

Tokyo equities markets saw decline on Monday as the Nikkei 225 fell 0.6 percent to 16,022.46 after going below 16,000 earlier in the day. The Topix index was 0.8 percent lower to 1,568.76.

The losses came on anticipated gross domestic product figures, due Tuesday, which many expect will say that the Japanese economy only grew at a 1 percent annual rate in the third quarter. If these figures turn out to be correct, it would be the slowest expansion in the Japanese economy since 2004. Furthermore, data released Friday showed that machinery orders were down 7.4 percent in September from the same month last year. Both news items increased concerns that Japan’s economic recovery is losing momentum.

Declining demand for fixed-line telephones led to a 9.4 percent drop in operating profits in the fiscal first half for NTT, which dropped 1 percent on the session to ¥571,000.

Video game and slot machine maker Sega Sammy fell 8.4 percent to ¥2,030 on a full-year profit prediction that was lowered by 20 percent.

In the retail sector, Fast Retailing closed 2.3 percent lower to ¥9,990. In other domestically-focused sectors, SMFG, one of Japan’s leading banks, dropped 1.6 percent to ¥1.22 million, while machinery products manufacturer Fanuc fell 0.9 percent to ¥10,360.

Most metals prices fall

Permalink: Most metals prices fall

Filed under: Commodities, Oil, Metals, Economy

Crude oil prices dropped on Monday after it was reveled that Saudi Arabia has decided that it will sell more oil to some of its Asian customers in December. While it seemed that this move was in opposition to its agreement to cut oil output with other OPEC members, some analysts said it was too soon to tell whether it was really violating the production decision or would take all of its cuts from sales to the United States and Europe.

Brent crude for December delivery dropped 75 cents to $58.96 per barrel in London, while West Texas Intermediate crude December contracts were 98 cents lower to $58.61 per barrel on the New York Mercantile Exchange.

In the metals markets on Monday, prices were down almost universally. The exceptions were in aluminium and nickel prices. Aluminium was 0.7 percent higher to $2,714 per tonne, while nickel added 1 percent to $29,700 per tonne.

Copper led the declines among base metals. It ended the session at $6,917 per tonne after going as low as $6,761 per tonne earlier in the day. Prices for the metal has dropped nearly 11 percent since the middle of October as inventories in London Metal Exchange warehouses have added 3,100 tonnes - 38 percent - to 151,300 tonnes. Elsewhere in base metals, zinc dropped 1.5 percent to $4,235 per tonne after dropping as low as $4,020 per tonne, while lead declined 5.7 percent to $1,580, $130 higher than its lowest point on the session.

In precious metals, gold dropped 0.9 percent to $622.80 per troy ounce as the dollar firmed and oil prices fell, while platinum fell 1 percent to $1,194 per troy ounce.

Yen weakens on interest rate concerns

Permalink: Yen weakens on interest rate concerns

Filed under: Forex, USD, GBP, Euro, Economy, Yen

The Japanese yen weakened on Monday on fears that an expected interest rate hike could reverse that nation’s economic recovery. Analysts expect the rate to go up before the new fiscal year begins in April 2007, but both the policy chief of the ruling Liberal Democratic party and a former financial services minister have said that raising rates too quickly could harm Japan’s economy.

By mid-afternoon in New York, the yen had lost 0.2 percent in relation to the euro to ¥151.34 and it was 0.5 percent lower versus the US dollar, to ¥118.15.

Sterling was lower as well, on weaker economic data than had been anticipated. Initially higher against the dollar, the UK currency dropped 0.5 percent to the greenback to $1.9015, while the UK currency was down 0.2 percent to £0.6732 against the euro.

The US dollar was 0.2 percent higher in relation to the euro to $1.2834 even though talk continued over last week’s comments from China that it is planning to diversify its foreign exchange reserves. Monday the talk continued as China’s State Information Centre, a think tank supported by the Chinese government, recommended that China should extend diversification by building its strategic reserves of bulk commodities, metals, and oil.

The Swiss franc added 0.2 percent versus the euro to SFr1.5935 on comments from the chairman of the Swiss National Bank that interest rate increases could help strengthen the currency there.

Lower metals prices hurt the Australian dollar, the Canadian dollar, and the South African rand as all fell in relation to the US dollar. The Canadian dollar dropped 0.5 percent to C$1.1374 against the greenback, while the Aussie fell 0.6 percent to $0.7625 to the US dollar, and the rand was 0.8 percent lower to R7.2535 to the dollar.

November 10, 2006

New York markets higher at noon

Permalink: New York markets higher at noon

Filed under: Equities, Economy, US

The New York equities markets were higher at noon on Friday, with the Dow Jones Industrial Average 0.9 percent higher to 12,176.54, while the Nasdaq Composite was up 2.3 percent to 2,384.64 and the S&P 500 had added 1.1 percent to 1,378.94.

Defense companies that saw losses right after Tuesday’s elections regained some of those declines later in the week but still ended the week below their starting levels. Raytheon fell 0.2 percent during the week to $48.90, while Lockheed Martin dropped 1 percent to $86.10 and Northrop Grumman was 1.8 percent lower to $64.73.

Health sectors were affected by the elections on concerns that their prices could be driven down by decisions from the new Democratic majority in Congress. Among the pharmaceuticals companies, Johnson & Johnson fell 3 percent to $65.80, while Pfizer declined 3.7 percent to $25.58 and Merck ended the week 4.9 percent lower to $42.88.

Wal-Mart was 2.2 percent lower on the week to $46.49 on the fears of investors that the new Congress could raise the minimum wage and move to regulate labor more closely.

Homebuilders saw declines as the housing market continued to suffer. Toll Brothers dropped 2.3 percent to $27.59, while DR Horton fell 2.4 percent on a downgrade from Merrill Lynch and Pulte Homes was 2.6 percent lower to $29.32.

Gainers on the week included Four Seasons Hotels, which added 28.3 percent to $81.97 after a private consortium of bidders offered $3.7 billion for the luxury hotel group. OSI Restaurant Partners was 21.6 percent higher to $39.45 after it accepted a $3 billion private bid.

UK pharma sector lower after US elections

Permalink: UK pharma sector lower after US elections

Filed under: Equities, Economy, UK

The FTSE 100 dropped 0.37 percent on Friday to end the week at 6,208.4 in a week where at least some stocks in the UK were affected by the elections in the United States on Tuesday.

The pharmaceuticals sector declined in the wake of the Democratic takeover of both houses of Congress on the concern that drug prices could be affected by legislation promised by House speaker-elect Nancy Pelosi to allow direct governmental negotiation of drug prices for recipients of Medicare. GlaxoSmithKline dropped 1.8 percent to £13.61, while AstraZeneca was 2.8 percent lower to £30.03.

Utilities were lower on speculation about takeovers in the sector after Scottish Power said that it had been approached by Spain’s Iberdrola. International Power dropped 1.6 percent to 338¼p, while Severn Trent was 1.7 percent lower to £14.03.

Among the mid-caps, homebuilder Crest Nicholson was 8.9 percent higher to 622½p after it rejected an offer from a group that included the Bank of Scotland.

Miners were higher on positive broker comments and bids rumors. Anglo American added 2.8 percent to £25.56 after one of the richest men in China bought a 1.1 percent stake in the miner, raising speculation that there could be a bid for the company out of China. Lonmin added 8.6 percent to £33.55 after Morgan Stanley raised its target share price to £40.

Eurofirst, CAC, Xetra Dax all up on week

Permalink: Eurofirst, CAC, Xetra Dax all up on week

Filed under: Equities, Economy, Europe

European equities markets were higher this week as earnings reports continued to be largely positive and mergers and acquisitions activities continue. The FTSE Eurofirst 300 was up a bit more than 1 percent during the week to 1,464.19. In France, the CAC-40 added 1.4 percent to 5,447.5, while in Germany the Xetra Dax gained 1.9 percent to 6,357.77.

In the banking sector, Sampo added nearly 11 percent over the week to €18.82 and Danske Bank added 1.5 percent to DKr252 after Sampo agreed to a takeover of its banking unit by Danske, which will pay DKr30.1 billion ($5.2 billion) in cash. Elsewhere in the sector, however, Natexis Banques Populaire dropped 6.1 percent to €209.

Sacyr Vallehermoso added 6 percent on Friday and 13.3 percent during the week to €46.80 on rumors that it has increased its stake in Spanish oil company Repsol to as high as 15.2 percent. The move, which has yet to be confirmed by Sacyr, would make the Spanish construction group Repsol’s largest shareholder. Repsol, meanwhile, was 4.3 percent higher this week to €27.80.

Ryanair added 5.1 percent over the week to €9.42 and rose as high as €9.66, a new record, at one point after it upgraded its full-year target for profits.

IEA predicts demand growth of 2.4 million barrels/day in Q4

Permalink: IEA predicts demand growth of 2.4 million barrels/day in Q4

Filed under: Commodities, Oil, Metals, Economy

The price of crude oil was lower on Friday even though the International Energy Agency said that demand for oil around the world will be “exceptionally strong” in the fourth quarter of the year, with tighter markets due to winter consumption and OPEC production cuts. The IEA said that demand will be up by 2.4 million barrels a day through the end of 2006.

Brent crude for December delivery dropped 97 cents to $60.35 per barrel, while December contracts for West Texas Intermediate crude were 95 cents lower to $60.21 per barrel. Even with these declines, however, prices for both Brent and WTI were 1.9 percent higher over the week.

In the metals markets on Friday gold was as high as $636.50 per troy ounce after comments from China that it is looking to diversify its foreign exchange reserves. By late afternoon in London, however, the price of gold had fallen to $628.80 for a gain of only 0.1 percent on the week. Meanwhile, platinum added 0.4 percent over the week to $1,227 per troy ounce on talk that an exchanged traded fund might be introduced.

In base metals, lead was a bit weaker this week, ending at $1,675 per tonne after going to a new record high price of $1,750 earlier on Friday. Zinc was slightly higher on the week as it fell to $4,300 per tonne after also finding a new record, $4,580 per tonne, early in the day on Friday. Inventories of zinc dropped to 95,200 tonnes in London Metal Exchange warehouses. Nickel saw big declines over the week, ending at $29,400 per tonne, a decline of 6.4 percent on the week.

Dollar weaker over week

Permalink: Dollar weaker over week

Filed under: Forex, USD, GBP, Euro, Economy, Yen

The US dollar lost value over the week as the governor of the People’s Bank of China said that his nation is looking to diversify its foreign exchange reserves. This, coupled with an announcement on state television in China that forex reserves there were above $1,000 billion for the first time in history and comments from the director of China’s National Economic Research Institute that the imbalance between US and Chinese currency is the fault of the US Treasury for printing too much money, all spurred sell-offs of the greenback. Not all analysts, however, saw the remarks as the real problem and said that they were just being used as an excuse to sell.

The dollar lost 0.4 percent during the week to the Japanese yen, to ¥117.50, while it dropped 0.7 percent to $1.9140 in relation to sterling and fell 1.1 percent to $1.2860 versus the euro.

The euro also strengthened in relation to sterling and the yen. The shared currency was 0.6 percent higher to £0.6720 against sterling, while it added 0.7 percent against the yen, to ¥151.05. Some of the euro’s strength came after comments from European Central Bank officials that indicated there are more interest rate hikes to come.

November 9, 2006

New York markets mixed on tech, health care

Permalink: New York markets mixed on tech, health care

Filed under: Equities, Economy, US

Technology-related sectors were up in New York on Thursday but health care and pharmaceuticals companies were lower, resulting in mixed results on Wall Street at midday. The Dow Jones Industrial Average was 0.3 percent lower to 12,142.37, while the Nasdaq Composite added 0.42 percent to 2,395.03 and the S&P 500 dropped 0.04 percent to 1,385.12.

In health sectors, Johnson & Johnson was 1.25 percent lower to $70.29 and Pfizer fell 1.8 percent to $26.14. HealthSouth was 6.1 percent lower to $20.65 after its report for the third quarter showed losses related to price pressure in all its units, while it had fewer patients in its acute-care hospital unit. Elsewhere, 3M was a bit lower to $79.24 on the news that it is selling its pharmaceuticals interests.

Cisco Systems added 7.3 percent to $26.93 on a report that its net income was $1.61 billion in the quarter. Computer maker Dell gained 2.8 percent to $24.85 after it said it will expand its customer call center in Ottawa, adding 1,000 employees. Apple Computer, meanwhile, was 1.64 percent higher to $83.80 on reported interest in its new iPod Shuffle.

The oil sector was higher on gains in the price of crude oil, with ExxonMobil and Chevron each adding 1.1 percent, to $74.64 and $70.29 respectively.

The media sector was mixed. News Corporation added 0.2 percent to $21.90 on a better than anticipated quarterly report, while Disney gained 1.2 percent to $33.48 ahead of its report, due later in the day. Viacom, however, was 2.2 percent lower to $38.81 after its third quarter report showed that profits were down by 16 percent in the third quarter.

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