Europe Starts Week Lower

Ivaylo
10 Jul, 2006
New York City

US stocks ended last week lower as investors grew uneasy over record high oil prices, rising labour costs and signs of economic softening. Investors appear to be worried that the July unemployment report may show rising wage inflation, which could force the Fed to hike the fed funds target at its August meeting. The U.K. FTSE 100 index declined 0.1%, the German DAX Xetra 30 index lost 0.1% and the French CAC-40 index sank 0.2%.

[R]6:30AM European stocks start the week lower due to cheaper oil prices.[/R]
European markets were lower by mid-morning trading. The U.K. FTSE 100 index declined 0.1% at 5,886, the German DAX Xetra 30 index lost 0.1% at 5,677 and the French CAC-40 index sank 0.2% at 4,945. As August delivery US crude was down 41 cents to $73.68, this weighed on the oil sector with Neste Oil off 1.6 per cent to, Norsk Hydro down 2.1% and Statoil 1.6% off. Renault declined 1.7% following General Motors statement late Friday that it has authorized alliance talks with the French car maker and partner Nissan.

European movers included, British insurance company Standard Life advancing to 240.5 pence on its first day of trading as a listed company, after pricing its offering at 230 pence. Standard Life, which previously was mutually owned by its customers, will join the FTSE 100 at the next quarterly reshuffle.

Crude oil prices fell Monday as traders took profits in the wake of recent gains and amid easing worries about Iran''s nuclear dispute after the country''s top nuclear negotiator expressed optimism that the standoff can be resolved peacefully. Light, sweet crude oil for August delivery shed 37 cents to $73.72 a barrel. The Brent crude oil contract for August shed 27 cents to $73.24 a barrel. Gold traded lower at $625.70 an ounce, down $4.60 an ounce from Friday''s close of $630.30.

The euro fell against the U.S. dollar on Monday as traders pondered the wider impact of a decision to leave interest rates unchanged by the European Central Bank.The euro bought $1.2788 in morning trading, down from its level of $1.2814 late Friday. The British pound fell to $1.8485, down from $1.8525 at the end of last week. The dollar bought 113.63 yen, down from 113.91 yen in New York late Friday, a dip that comes in the face of a planned meeting by the Bank of Japan on interest rates this week.

[R]5:00AM Gold retreats as profit-taking takes control.[/R]
August gold traded up to $639.50 an ounce, its highest level since June 6. The metal subsequently fell back as far as $629.50, however, before settling with a loss of $1.50 to $634.80. September silver closed down 18 cents at $11.405 an ounce, also hurt by profit-taking. October platinum sank $5.90 to $1,243.70 an ounce. September palladium lost $1.70 to $329.15 an ounce. The most-traded September copper closed down 6.95 cents at $3.5475 per pound.

August crude oil, which set a record high of $75.78 in overnight trading, ended $1.05 lower at $74.09 a barrel. August gasoline dipped 1.96 cents to $2.2394 a gallon. August heating oil 5.12 cents to $2.0104 a gallon. On the New York Board of Trade, Arabica coffee futures dived to 4-day lows, ending 2.90 cents lower at 98.40 cents a pound while September lost 30.5 cents to $1.00 a pound. Futures on raw sugar in foreign ports for October settled down 0.29 cent at 16.87 cents a pound.