Weak Opening

123jump.com Staff
12 May, 2006
New York City

Market aveerages for the second day are likely to trade in the negative territory for the second day in a row. Weak dollar and rising metals and oil prices are worrying traders. Oil fell in the European trading as International Energy Agency lowered its demand for oil by 200K barrels per day to 84.4 million barrels per day. Best Buy is in a deal to buy a stake in the fourth largest electronic retailer in China.

[R]8:30AM Weak dollar and oil point weak opening.[/R]
Futures for this morning point more losses on the last trading day of this week. Market analysts have been looking for a correction in the broader averages in the U.S. market for the last two months that never arrived. With the elevated crude oil prices, weakening dollar and general interest rate concerns together took market averages down between 1% and 2% yesterday. This morning opening indicates that weakness will persist in the day’s trading. Dow futures point 30 points lower at the opening and 5 points lower in Nasdaq opening.

[R]7.00AM European shares down on falling dollar.[/R]
European shares logged initial losses to more than 1.5 % in morning trade, tailing off bank shares and worried by concerns over inflation and interest rates. Mining companies dropped on worries that the sector might be overheating. The high commodity prices added up to the fears over their possible impact on consumers and interest rates. By 0948 GMT the U.K.’s FTSE 100 index lost 92.6 points to 5,949.4, having hit a trading session low of 5,936.8, its lowest since late March. Germany''''s DAX 30 lost 1.6 % and France''''s CAC 40 shed 1.7 %.

Crude oil pulled back on Friday after putting up more than $3 in the past three days on worries about gasoline supply in the U.S. U.S. light crude dropped 47 cents to $72.85 a barrel as the crisis with the hostages in Nigeria was settled successfully. London Brent crude shed 41 cents to $73.02 a barrel, after jumping more than $1 on Thursday. The dollar fell to a one-year low of $1.2907 per euro. It also reached a one-year low of 1.2040 Swiss francs and $1.8916 per British pound. The dollar bought 110.15 Japanese yen from 110.63 in New York.