U.S. Pare Losses; Dollar Falls

Bikram Pandey
03 Dec, 2010
New York City

U.S. stocks and indexes struggled after employers added less than expected and unemployment rate increased. The dollar declined and oil and gold surged. European indexes pared gains and the Bundesbank offered positive outlook for the German economy.

[R]4:30 PM New York – U.S. stocks and indexes struggled after employers added less than expected and unemployment rate increased. The dollar declined and oil and gold surged. European indexes pared gains and the Bundesbank offered positive outlook for the German economy.[/R]

U.S. stocks traded lower in the session but closed higher at end after employers’ added less than anticipated staff in November. Unemployment rate increased to 9.8% even after employers added 39,000, lower than expected increase of more than 140,000.

Pending home sales soared in October. Walter Energy and Western Coal in C$3.3 billion merger deal. Sunoco agreed to sell Toledo Refinery for $400 million.

The European indexes pared gains as the euro-zone private sector activity and retail sale improved. The Bundesbank reiterated that German economic recovery is on track. German services PMI rose in November. French service sector growth accelerated in November.

The UK indexes slid after services industry index slackened and foreign currency reserves fell in November. Premier Foods confirmed talks to sell its “meat-free” business. Irish Continental agreed to sell Ferry Bilbao for €37.7 million.

Stocks in Japan closed higher after U.S. retail chain stores sales surged in November and home sales index increased. European Central Bank also stepped up buying of bonds of weak economies. Finance minister propose to revise taxes on dividend and capital gains from 2012.

Shanghai stocks traded lower and closed nearly unchanged and lost 1% in the week. Gold imports in the first ten months soared five-fold. China plans a shift in monetary policy stance in 2011 to contain inflation. GM, the first global automaker, sold 2 million cars in a year in China.

The benchmark index Sensex declined after rising more than 3% in the last four sessions. Auto sales rose in November on the strength in small car sales. Maruti Suzuki unit sales surged 28% and Mahindra and Mahindra sales rose 18%.

Australian shares closed marginally up. Rio Tinto and Chinalco agreed to form a joint venture to explore new deposits in China. November auto sales rise 1.8% in Australia. Western Australia approves a bill allowing BHP and Rio Tinto for further expansions in the state with a one-time payment of A$350 million.

Commodities, Currencies and Yields

Dollar edged down against euro to $1.34 and rose against the Japanese yen to 82.66. One UK pound fetched $1.57.

Crude oil increased $1.41 to $89.41 a barrel for a front month contract, natural gas edged lower 2 cents to $4.32 per mBtu and gasoline increased 0.65 cents to 236.18 cents.

Gold increased $24.60 in New York trading to close at $1,413.90 per ounce, silver increased $0.83 to $29.41 per ounce and copper for the front month delivery increased 2.20 cents to $4.00 per pound.

Yield on 10-year U.S. bond increased to 3.01% and on 30-year U.S. bond yield increased to 4.32%.