Metals, Oil Fall; Dollar Rises

123jump.com Staff
20 Mar, 2009
New York City

U.S. stocks trade higher. Gold and crude oil decline after surging in previous sessions. European industrial production declines in January at a faster pace than in December. Alibaba.com falls on earnings miss. Asian markets close generally lower on weak regional trading.

[R]10:20AM New York – U.S. stocks trade higher. Gold and crude oil decline after surging in previous sessions. European industrial production declines in January at a faster pace than in December. Alibaba.com falls on earnings miss.[/R]

In morning trading in New York stocks edge higher. Dollar advanced against euro and yen but commodities rallied.

Gold dropped $9.10 to $949.70, crude oil declined 76 cents to $50.85 a barrel and 10-year treasury bond traded at 2.59% yield.

Global investors continue to switch out of banks and financial stocks into resource and commodities related sectors. The recent central bank action in the U.S. and UK and other European and Asian nations will not take effect for months to come. Meanwhile, banks and insurance companies are still struggling with illiquid and worthless securities on their balance sheets.

European Industrial production declined at a faster rate in January. The production declined at 17.3% from a year ago month and fell 3.5% from December. The production in Germany declined 7.5% and in France decreased 3.1% in the month.

German production fell the sharpest in seventeen years as auto and industrial exports and domestic demand fell.

The Eurostat, the European statistical agency also lowered the December production to 2.7% from its previous estimate of 2.6% fall. The December decline was revised to 11.8% from the earlier estimate of 12% fall.

Fiat SpA clarified that the proposed joint venture between Chrysler LLC and the company for small car engine technology will not assume “any current or future debt of Chrysler.” The statement came after the Chrysler chief stated in an interview that Fiat will take debt equal to its equity stake in the joint venture.

Fiat in Milan trading fell 5% to 4.51 euros.

In Asian trading markets generally traded lower. China and Hong Kong based Alibaba.com Ltd declined 12% after it reported lower than expected earnings.

Rise in metals and crude oil prices lifted miners in Australia. BHP Billiton Ltd, the largest mining company rose 3% on firm gold prices. However, the company was forced to lower prices of coal delivery to a Japanese customer by 60%.

Mcquarie Airports, the operator of airports in Australia dropped 8% after it reported a traffic decline 7.8% at the hub in Australia.

Asian Markets Review

The Hang Seng index in Hong Kong decreased 297.41 or 2.26% closed to 12,833.51, CSI 300 index in China lower 2.73 or 0.11% closed to 2,379.84. ASX 200 index in Australia decreased 14.40 or 0.41% closed to 3,465.80. The KL Composite index in Malaysia higher 4.64 or 0.54% closed to 856.82.The Markets in Japan were closed today.

The Kospi Index in South Korea increased 9.13 or 0.79% to close at 1,170.94. SET index in Thailand closed higher 1.92 or 0.45% to 429.64 and JSE Index in Indonesia increased 19.29 or 1.44% closed to 1,360.89. The Sensex index in India decreased 35.07 or 0.39% closed to 8,966.68.

Europe Markets Review

In London FTSE 100 Index traded lower 18.77 or 0.49% to 3,798.16, in Paris CAC 40 Index decreased 20.69 or 0.75% to 2,756.30 and in Frankfurt DAX index traded lower 4.74 or 0.12% to 4,038.72. In Zurich trading SMI decreased 49.66 or 1.04% to 4,744.97.