US & World Daily Markets Financial Briefing 12-02-2007

The world's most trusted name in professional trader education. Click Here

Dow up, Nasdaq down in early trading

NEW YORK -  Wall Street was narrowly mixed in early trading Monday as investors searched for direction amid disappointing deal news and ahead of key economic data expected throughout the week.
   
Unlike recent Monday mornings, there was little in the way of acquisition news to give the market a lift at the start of trading. Instead, investors had to deal with news that the Nasdaq Stock Market Inc. failed in its bid to buy the London Stock Exchange and that French drugmaker Sanofi-Aventis called off talks for a possible deal with Bristol-Myers Squibb Co.
   
Onyx Pharmaceuticals Inc. and Bayer AG advanced after the companies released data from a clinical trial that shows an experimental drug is effective in fighting liver cancer. Apple Inc. moved higher after being upgraded in anticipation of big product launches set this year.
   
Wall Street fell last week on concerns about higher oil prices and the possibility inflation could lead to higher interest rates. This week, the markets will scrutinize a stream of economic data, and testimony Wednesday from Federal Reserve Chairman Ben Bernanke.
   
In the first hour of trading, the Dow Jones industrial average added 3.53, or 0.03 percent, to 12,584.36.
   
Broader stock indicators were narrowly lower. The Standard & Poor's 500 index was down 1.26, or 0.09 percent, at 1,436.80 and the Nasdaq composite index retreated 9.02, or 0.37 percent, to 2,450.80.
   
Bonds edged lower ahead of economic data due out this week, with the yield on the benchmark 10-year Treasury note rising to 4.79 percent from 4.78 percent late Friday.

The Russell 2000 index of smaller companies was down 1.47, or 0.18 percent, at 805.64.

Stocks in focus
   
Nasdaq, the world's largest electronic equities exchange, edged lower after it said Saturday LSE shareholders did not approve its bid to acquire the British bourse. Shares fell 43 cents to $36.77.
   
Bristol Myers tumbled $1.17, or 4.1 percent, to $27.35 after a report that Sanofi-Aventis called off deal talks amid a disagreement over price.
   
But aluminium producer Novelis Inc. rose $5.51, or 14.3 percent, to $44.05 after it agreed to be bought by India's Hindalco Industries Ltd.
   
Apple, which recently unveiled plans to roll out its long-anticipated iPhone, rose $1.19 to $84.46 after it was upgraded by a Citigroup analyst.

Meanwhile, good news about a potential treatment for liver cancer sent Bayer up 21 cents to $58.04 and Onyx up $7.44, or 61 percent, to $19.70.

VantagePoint's market forecasts are nearly 80% accurate.  Take a look at actual  forecasts and see the difference they can make in your trading. Click here to see two recent forecasts now.

Yen recovers from earlier 2-week lows vs dollar in the wake of G7

LONDON - The yen edged higher against the dollar after earlier hitting two-week lows against the currency after the G7 meeting this weekend failed to make a clear statement in support of a stronger Japanese currency.
   
There had been jitters in the market in the run-up to the meeting due to talk that the G7 statement may include a reference to the yen's recent sharp falls. In the event, however, the statement issued nothing more than subtle warnings and yen selling resumed as trade got underway this morning.
   
"The lack of developments (from the meeting) should ensure the yen comes under renewed downward pressure for now, as the speculative market rebuilds its negative position in the yen which it had pared back in the run-up to G7," said Daragh Maher at Calyon.
   
The dollar's rise against the yen also took it higher against other major currencies, with the euro falling back below the 1.30 usd level though failing to make a sustained break below 1.295 usd as central bank buying propped up the single currency.
   
The pound remained weak, however, dropping to monthly lows against the dollar buying in the wake of the G7 meeting exacerbated by weaker-than-expected UK input price data this morning.
   
Figures released this morning showed UK raw materials prices slumped by 1.7 pct year-on-year in January, the biggest annual fall since November 2002, mainly due to sharp falls in oil prices and other commodities.
   
The market remains nervous, however, ahead of a raft of key data and events in the UK this week, including inflation figures tomorrow and the Bank of England's latest quarterly inflation report on Wednesday.
   
Elsewhere, the Australian dollar was weaker, falling to one-week lows against the US dollar following a dovish statement from the Reserve Bank of Australia overnight.
   
The RBA lowered its forecast for underlying inflation in 2007 to 2.75 pct from 3.00 pct, suggesting that Australian interest rates are unlikely to move higher in the coming months.

Trade with RCG fxtrader™, the platform offering instant access to 12 major FX trading pairs with low spreads (2 pips EURUSD, USDJPY) and global news from 3 major sources.  Trade with a registered and regulated company in business for 80 years. Smart money trades here – Get your FREE Trial Today!

London shares - midafternoon features

FTSE 100 risers

Rolls Royce Group 513-1/2 up 11-1/4 Merrill Lynch adds to 'Europe 1 List', reiterates 'buy' and ups tgt to 620p

Vodafone Group 151-3/4 up 2-1/2  Wins battle for control of India's Hutchison Essar, brokers relieved

GlaxoSmithKline 1,466 up 16  Ongoing strength following results last week; director stake-building

J Sainsbury 512 up 1 Ongoing takeover speculation; ABN Amro upgrades to 'hold' from 'sell'

Morrison Supermakets 301-1/2 up 3/4 Revaluation as Sainsbury bid situation continues

Reed Elsevier 601 up 1  Morgan Stanley ups target to 610 pence ahead of Thursday's FY results

InterContinental Hotels Group 1,296 up 11 Vague bid speculation in press

FTSE 100 fallers

Cairn Energy 1,641 down 42  Oil prices fall back towards 59 usd a barrel mark

Man Group 576-1/2 down 15   Profit-taking as talk of Amvescap tie-up dies down

Unilever 1,363 down 27  Continued weakness after mixed results last week

Amvescap 624-1/2 down 11  Profit-taking after gains Friday on the back of M&A speculation

Frankfurt

German shares down midafternoon as flat Dow opening leaves investors cold

At 3.50 pm, the DAX was down 45.38 points or 0.66 pct at 6,865.73, after trading between 6,890.64 and 6,892.03. The MDAX lost 49.11 points or 0.49 pct to 9,949.36 and the TecDax fell 2.82 points or 0.33 pct to 846.12. DAX futures dropped 6.50 points or 0.09 pct to 6,889.50, with Bund futures down 0.11 points or 0.10 pct to 114.89.

Deutsche Boerse led blue chips lower, dropping 3.10 eur or 1.92 pct to 157.81, as traders said the positive news flow that had been buoying the shares largely dried up. The exchange's supervisory board is expected today to approve the company's plan to acquire a 5 pct stake in the Bombay Stock Exchange (BSE), company sources said. A spokesman for Deutsche Boerse declined to comment.
    
MAN fell 1.42 eur or 1.61 pct to 86.69 after Volvo Chief Executive Leif Johansson rebuffed rumours that the automaker might be interested in taking over the German heavy truck manufacturer. Johansson told the Financial Times Deutschland that monopoly regulations would prohibit Volvo from taking over its German rival.
   
DAX heavyweight EON fell 1.55 eur or 1.41 pct to 108.50. TUI dropped 0.19 eur or 1.09 pct to 17.18 after rival KarstadtQuelle's tourism unit Thomas Cook announced its intentions to merge with the UK's MyTravel.

Bucking the trend, Infineon gained 0.18 eur or 1.50 pct to 12.18, the sharpest gainer on the DAX. A report in the Financial Times Deutschland said the chipmaker was approached at least three times in the past six months by different private equity funds interested in acquiring the company.

Inflation picked up in September in Europe as both areas show fragile economic growth. Just as in the U.S., rising energy prices are to blame. Read free, daily market reports available only at CMS Forex and open your free demo trading account today. Click here

Asian shares close mostly lower on Wall St; China A shares rise on fund inflows

HONG KONG  - Shares across the Asia-Pacific region closed mostly lower following Wall Street's fall on Friday, but China A shares continued to rise on fund inflows.
   
The Tokyo market was closed for a holiday.
   
Australian shares closed down on profit taking after the indices reached new record highs on the Reserve Bank of Australia's monetary outlook statement.
   
The central bank sees underlying inflation at around 2.75 pct over 2007 and 2008, inside its 2-3 pct target band, and effectively rules out interest rate hikes unless there is a surge in wage costs.
   
Today's sell-off is unlikely to continue through the week given the positive underlying sentiment and strong earnings season underway in Australia.
   
The S&P/ASX 200 ended down 3.1 points or just 0.05 pct at 5,924.1, closing off a fresh intra-day record high of 5,934.7 and below Friday's previous record close of 5,927.2.
   
The broader All Ordinaries index eased 4.3 points to close at 5,899.3, also setting a new intra-day record of 5,905.3 and off Friday's record close of 5,899.3.
   
Hong Kong shares were lower in afternoon trade following Wall Street's falls after some US Federal Reserve officials warned that interest rates could rise if inflation persists, dealers said.
   
They said the market was also pressured by China Mobile after news that its weighting on the Hang Seng Index will be cut after China Life Insurance and Industrial and Commercial Bank of China (ICBC) are added to the index constituents. At 3.10 pm the Hang Seng Index was down 71.91 points or 0.35 pct at 20,605.75.
   
In mainland China, A-shares in Shanghai and Shenzhen closed higher, supported by bargain-hunting and fund inflows on the back of the rising yuan. The Shanghai A-share Index was up 80.85 points or 2.82 pct to 2,947.50 and the Shenzhen A share Index was up 22.55 points or 3.21 pct at 726.10.
   
Taipei shares closed lower in reduced trade as another drop on Wall Street added to the caution already prevailing ahead of the coming long Lunar New Year break, dealers said.
   
The local market will be closed Feb 15-23 for the Chinese new year holiday.  The weighted index closed down 83.17 points, or 1.06 pct, at 7,776.36, after moving between 7,764.51 and 7,826.46.
   
Seoul shares closed sharply lower as chip makers Samsung Electronics and Hynix Semiconductor tumbled on Micron's bleak outlook for flash chip prices.
   
The market fell by about 20 points at one stage to threaten 1,400 points, with broad sentiment undermined by Wall Street's Friday retreat due to the oil price spike and fears of an interest rate hike.
   
The G7 meeting's limited efforts to address the yen's weakness also added to the downside pressure, a situation that has put most South Korean exporters at a price disadvantage in major global markets.
   
The KOSPI index closed down 13.39 points or 0.94 pct at 1,414.29, off a low of 1,403.75 and a high of 1,416.84.

Get a FREE $50,000 Forex demo.  Free streaming quotes, guaranteed executions, 1% margins, and zero commissions! Click Here.

Gold edges lower on weaker oil, stronger dollar

LONDON - Gold edged lower as the dollar rose against the major currencies and as oil prices weakened.
   
But the metal stayed close to its recent highs amid strong physical demand in Asia and as increased tensions between the US and Iran sparked safe haven buying.
   
At 11.17 am, spot gold was quoted at 663.70 usd an ounce, down from a seven-month high of 668.60 usd seen in New York trades on Friday.
   
In other precious metals, silver was down at 13.78 usd an ounce against 13.87 usd in late New York trades, while palladium was down at 333.00 usd against 339.50 usd.
   
Platinum fell to 1,189.00 usd an ounce, after hitting a two and a half-month high of 1,203 usd in Friday trades.

Oil fell after Saudi Arabia's oil minister said OPEC could keep its output levels unchanged at its March meeting if current market conditions remain as they are.
   
At 10.53 am, front-month Brent North Sea crude contracts for March delivery were down 91 cents at 58.10 usd a barrel. On Friday, the contracts hit a one-month high of 59.63 usd. A barrel of light sweet crude fell 89 cents to $59 in premarket trading on the New York Mercantile Exchange

Copper edged lower as traders focused on yet another rise LME inventories, overlooking data out earlier showing Chinese imports of unwrought copper and semi-finished copper products rose 44 pct in January over December.
   
At 1.15 pm, LME copper for three-month delivery was down at 5,540 usd a tonne against 5,580 usd at the close Friday.   
  
The LME said in a daily report earlier inventories held in its warehouse rose by 425 tonnes to 216,050 tonnes. LME stocks have more than doubled since the start of last year.
   
Tin surged to 12,550 usd a tonne, after hitting a new all-time high of 12,750 usd earlier, after newswires reported at the weekend three directors at tin miner PT Koba Tin had been arrested on counts of illegal tin mining.
   
The company has also suspended shipments from the island of Bangka in Indonesia. Separately, tin remains supported by news out Friday the Bolivian government has seized control of a tin smelter complex owned by Glencore.
   
In other metals, nickel was up at 36,390 usd a tonne against 36,150 usd, zinc rose to 3,140 usd from 3,130 usd, aluminium edged up to 2,702 usd against 2,700 usd while lead climbed to 1,660 usd from 1,615 usd.

•Perfect for technical day traders
•High leverages allows for more trading flexibility
•Limit risk with Guranteed Stop Losses

Join us today! FOREXYARD | trading made easy. Click Here