U.S. Stocks Ease Gains in Final Hour

October 22nd, 2009  by Katy Loi

Closing Data

	Current	Change	%
Dow Jones	9949.36	-92.12	-0.9%
NASDAQ	2150.73	-12.74	-0.6%
S P 500	1081.4	-9.66	-0.9%
FTSE 100	5257.85	14.45	0.3%
Nikkei 225	10333.39	-3.45	-0.0%
ASX 200	4,839	-7.6	-0.2%
COMEX Gold - Dec 09	1064.5	5.9	0.6%
COMEX Silver - Sep 09	17.825	0.267	1.5%
COMEX Copper - Sep 09	303.6	10.4	3.5%
WTI Spot	81.37	2.28	2.9%
AUD-USD	0.929	0.005	0.5%
Aluminium	1921	50.5	2.7%
Copper	6444	184	2.9%
Lead	2315	124	5.7%
Nickel	19170	340	1.8%
Tin	15050	290	2.0%
Zinc	2100	65.5	3.2%

Overnight:

• U.S. Stocks Erase Gains in Final Hour as Bove Downgrades Wells. U.S. stocks fell in the final hour of trading after analyst Dick Bove downgraded Wells Fargo & Co., erasing an earlier rally in financial shares spurred by better- than-estimated results at Morgan Stanley. Wells Fargo, the largest U.S. home lender this year, slid 3 percent after Bove cut the shares to “sell” and said earnings were boosted by hedging gains rather than improving business trends. Pfizer Inc. lost 1.7 percent to lead health-care shares to the steepest loss among 10 groups. The Standard & Poor’s 500 Index slipped 0.3 percent to 1,087.79 after rallying as much as 0.9 percent earlier.

• Oil Surges to One-Year High Lower Dollar, U.S. Fuel Supplies. Crude oil surged above $81 a barrel in New York to a one-year high as the dollar dropped and a U.S. Energy Department report showed a greater-than-forecast decline in supplies of gasoline. Oil advanced as much as 3.6 percent as the U.S. currency slipped beyond $1.50 per Euro for the first time in 14 months, bolstering the appeal of commodities. Gasoline stockpiles fell 2.21 million barrels, more than twice the median of analyst forecasts, in the week ended Oct. 16, according to the report.

• AUD/USD jumps to 0.9329, fresh 15-month high.  Dollar weakness remains intact across the board. On the other side the Australian Dollar is rocketing today. During the American session AUD/USD jumped from 0.9230 to 0.9325 posting the highest price since august 4 of 2008. The pair was rejected from levels below 0.9200 and recovered sharply. Aussie posted fresh highs for the year in the last seven sessions in a row. The pair trades at 0.9215/20, 0.83% above today’s opening price.  The rise in commodities is helping the Aussie. Gold is rising on a weak Dollar and currently trades at $1,063 a/oz after rebounding at 1,048.

• Dollar holds near the lows after Beige Book.  TheUS Dollar fell to fresh 14-month lows against the Euro after the release of the Beige Book. EUR/USD rose to 1.5046 but did not rally further. The rally of the Pound eased in the last hours but remains near one month highs at 1.6630. Against the Yen, the US Dollar fell below 91.00 finding support at 90.85.  The Beige Book showed that the economy in the U.S. is stabilizing further with modest improvements. The FED affirmed “Reports of gains in economic activity generally outnumber declines, but virtually every reference to improvement was qualified as either small or scattered.”

• Gold ends higher as the US dollar falls to new low versus Euro.  Gold futures closed higher Wednesday as the U.S. dollar slid to a fresh 14-month low against the euro, breaching a key psychological level and increasing the lure of hard assets. Gold for December delivery added $5.9, or less than 1%, to settle at $1,064.5 an ounce. December silver rose 27 cents, or 1.5%, to $17.825 an ounce. December copper added 10 cents, or 3.5%, to end at $3.036 a pound. In electronic trading, gold futures edged off settlement levels, trading at $1,061.2 an ounce, after the Federal Reserve's Beige Book report said most regions reported little or no increase to wage or prices pressures. During the U.S. floor session, bullion shed earlier losses as the greenback, which has been the dominant force in precious metals trading recently, slid.

Today:

• Australia shares seen down on U.S. slip; China eyed.  Australian stocks are set for a weak start on Thursday after a broker downgrade to top U.S. bank Wells Fargo, weak profits from Boeing and a warning of tough times from Wal-Mart sent Wall St into reverse.  The Australian market will also be focusing on China's gross domestic product data for the September quarter due on Thursday, with analysts expecting growth of 8.9 percent, faster than the 7.9 percent in the previous quarter. China, a big buyer of Australia's commodity exports, voiced confidence on Wednesday its economy had recovered, a comment that could support resource stocks. Higher metals and oil prices could also bolster the sector.  Banks may struggle, however, after the cut to Wells Fargo's rating sent U.S. financial shares tumbling.  Australian share index futures reversed early gains to stand 0.7 percent lower at 4,812, a 26.6 point discount to the 4,838.6 close in the underlying S&P/ASX 200 index on Wednesday.

Data today/tonight:

GMT Country Event  Actual Cons. Previous
       
       
       
Oct 22 04:30 JP  All Industry Activity Index (MoM) (Aug)  
0.4% 0.5%
06:15 CH  Trade Balance (Sep)  
1.59B 1.72B

08:00 EMU Current Account s.a (Aug)  
€4.3B €6.6B
08:00 EMU Current Account n.s.a (Aug)   
€8.8B

08:30 UK  Retail Sales (MoM) (Sep)  
0.6% 0.0%
08:30 UK  Retail Sales (YoY) (Sep)  
2.8% 2.1%
12:30 US  Initial Jobless Claims (Oct 17)  
516K 514K
12:30 CA  Retail Sales (MoM) (Aug)  
0.4% -0.6%

Company News:

• BHP Billiton (ASX:BHP) says first-quarter iron ore production has increased to a record high, driven by a rebound in global steel demand. The world’s largest mining company says output of iron ore was 30.1 million metric tons in the three months ending September 30, compared with 29.8 million tons a year earlier. In comparison Rio Tinto also achieved record ore output in the same period. Steel companies are resuming output as signs of a global recovery in industrial demand take hold. BHP Billiton shares are 1.08% lower at $39.48.

ASIC has launched legal action against eight directors and executives in the Centro Properties Group (ASX:CNP), claiming their 2007 accounts failed to correctly classify more than $2 billion of debt. The corporate regulator says it’s seeking to have the men disqualified from being able to manage companies, and wants them fined by the courts. Former Centro Chairman Brian Healey and former Chief Executive Officer Andrew Scott as well as Paul Cooper, the group's current chairman - are among the defendants in the case brought against directors of the company by ASIC. Centro Properties Group shares are trading 9.21% lower at $0.345.

 

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