Techs, Autos Pressure Europe

Ivaylo
28 Nov, 2006
New York City

Dollar weakness continued to concern markets as such as automakers and technology companies continued to lose ground as both the euro and pound held their ground against the dollar. A weaker dollar is usually negative for companies that export to the U.S. because they receive less revenue and become less competitive. The U.K. FTSE 100 index lost 0.48%, the German DAX Xetra 30 index declined 0.43%, while the French CAC-40 index lost 0.64%.

[R]6:30AM European markets fell in early trading Tuesday on dollar-sensitive sectors.[/R]
European markets were lower in early trading on Tuesday. The U.K. FTSE 100 index lost 0.48% to 6,020.80, the German DAX Xetra 30 index declined 0.43% to 6,270.60, while the French CAC-40 index lost 0.64% to 5,274.64.

Decliners

The FTSE 100 traded lower weighed down by financials such as Barclays, down 1.5%, after a recent strong performance. Insurance group Old Mutual was losing 4.1% after its adjusted embedded value per share, a measure of the company asset value and the present value of future profits, eased 1.7% from the second quarter.

Scottish Power shares lost 0.9% after it agreed to a $22.5 billion cash-and-shares takeover bid from Iberdrola of Spain. Akzo Nobel shares dropped 1% in Amsterdam after its Organon unit and Pfizer ended their joint effort to develop asenapine, a new-drug candidate to treat schizophrenia and acute mania associated with bipolar I disorder.

DaimlerChrysler fell 2.8%, Peugeot shed 2.5% and Volkswagen closed 1.6% lower. Michelin, the tyremaker, fell 4% and Continental slipped 3.5%. Among other big dollar earners, Siemens fell 2.9%. Chip maker Infineon Technologies lost 0.7% in Germany.

Advancers

Music company EMI Group rose 7.4% in London after the Financial Times reported that the company is in talks with private-equity groups about a possible bid for the company. Pharmaceutical company Bayer rose 2% after it reported a forecast-beating rise in third-quarter operating profits, largely due to a strong showing from its healthcare division.

Oil and gold

Oil was steady above $60 a barrel on Tuesday after rising more than $1 the previous session, partly on forecasts of a cold spell in the U.S. Northeast. U.S. crude was down three cents at $60.29 a barrel by 0929. London Brent crude was up seven cents to $60.51.

Gold declined for the first day in eight in London after a rally earlier this month deterred jewelry buyers, the biggest consumers of the precious metal. Gold for immediate delivery in London fell $3.40, or 0.5%, to $637.20 an ounce at 9:45 a.m. local time.

Currencies

The euro held steady against the U.S. dollar on Tuesday ahead of U.S. economic data that could offer new direction to markets. The euro bought $1.3131 in morning European trading, marginally above the $1.3128 it bought in New York late Monday. The British pound rose to $1.9432 from $1.9371. The dollar rose to 116.30 Japanese yen from 116.08 yen.

[R]5:00AM Gold and silver futures advanced on Monday due to weakness in dollar.[/R]
December gold advanced to close at $640.60 a troy ounce on the NYME, up $11.60 from Wednesday, ahead of the long Thanksgiving weekend. December silver settled at $13.49 an ounce, up 45 cents from the close on Wednesday. January platinum slipped $6.60 to $1,147.40 an ounce while December palladium lost $1.00 to end at $325 an ounce. Most-active March copper settled 7.95 cents higher at $3.2155 per pound

The January crude oil contract gained $1.08 to $60.32 a barrel after rallying to $60.44. December unleaded gasoline added 0.47 cents to $1.5937 a gallon. December heating oil settled up 3.87 cents at $1.7052 a gallon and December natural gas moved 28.0 cents higher at $7.998 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 2.45 cents higher at $1.18 a pound, with most-active March up 2.50 cents at $1.2265. March futures for raw sugar in foreign ports put 0.34 cent up to finish at 11.81 cents a pound.