US & World Daily Markets Financial Briefing 31-03-2006

Start trading successfully today
Click here  to find out more

U.S. stocks edge higher on interest-rate friendly data

NEW YORK - U.S. stocks gained ground in early trading Friday after the latest economic data eased interest-rate concerns, with a pullback in crude-oil prices also lending some support.
   
The Dow Jones Industrial Average was up 38 points at 11,188. The Nasdaq Composite Index rose 7 points to 2,347 after ending the prior session at a fresh five-year high. The S&P 500 Index gained nearly 3 points to 1,303.     

The stock market is set to wrap up what has been a solid quarter for equities. Both the Dow industrials and the S&P 500 are up more than 4% while the Nasdaq has surged more than 6% in the quarter.
   
Market sentiment took a turn for the better after data showing a rise in consumer spending in February, and a modest increase in personal incomes, a factor that eased wage inflation fears. The prices component of the report, another gauge of inflation, came in unchanged.
   
"If you're looking for a Goldilocks situation, we got it today with the personal income and spending numbers," said Art Hogan, chief market strategist at Jefferies & Co, referring to data that promote the view the U.S. economy is growing at a steady pace, with inflation contained.
   
"If we can continue to see an economic data stream like this, the thinking goes the Fed will not have to be as rigorous after May."
   
Stocks on the move
   
Dow Chemical was down 0.9% at $40.72 after Prudential cuts its rating on the company to neutral weight from overweight, citing concerns over weakening demand and potentially lower margins.
   
Germany's SAP declined to comment on trader speculation that International Business Machines was preparing to make an offer for the software company. U.S.-listed shares of SAP were up 44 cents at $54.36. IBM shares were up 13 cents at $83.33.
   
Citigroup Inc. was charged by the Australian securities regulator with insider trading, over buying shares of Patrick Corp. one day before the bank's client Toll Holdings launched a takeover bid for the company. Citigroup denies the charges. The bank's shares were up 18 cents at $47.46.

VantagePoint's market forecasts are nearly 80% accurate. Take a look at actual forecasts, become eligible for a Complimentary VantagePoint Market ($750 value!) and see the difference they will make. Click here to see two recent forecasts now.

Dollar recoups losses after steep sell-off

NEW YORK - The dollar rose broadly against its major rivals early Friday, recovering from its sharp slide in the prior session, with investors awaiting consumer sentiment data for further direction.
   
In early New York trading, the dollar changed hands at 117.91 yen, up 0.4%. The euro was fetching $1.2108, down 0.5%. The British pound was down 0.5% at 1.7374. The dollar strengthened 0.6% to 1.3042 Swiss francs.
   
The dollar initially pared gains after a tame consumer inflation report, but quickly recovered to pre-data levels before slipping back again as currency investors were digesting comments from Kansas City Federal Reserve President Thomas Hoenig.
   
Core personal consumption expenditure index, the Federal Reserve's preferred inflation indicator, rose 0.1%, the Commerce Department said earlier. Consumer spending rose 0.1% in February, while incomes rose 0.3%.
   
"A slowing of US personal expenditure suggested "that wage inflation may yet become an issue, especially if the available labor market continues to be squeezed," said Paul Jackson, senior dealer at CMC Markets, in a note.
   
Meanwhile, in an address about the 2006 economic outlook, Hoenig said core inflation is encouraging for the most part and the slowdown in the fourth-quarter was largely "transitory." He said the U.S. economy is moving toward full capacity use.
   
"These comments are on the hawkish side by implying that capacity constraints are being reached, which suggests the 'resource utilization' the Fed fears could drive inflation higher may be more pressing than earlier thought," said Brian Dolan, head of currency research at Gain Capital.
   
The dollar has recouped most losses posted in the prior session. On Thursday, the greenback lost more than 1% versus the euro and was also against the yen, weighed down by some technical factors and by a more hawkish outlook for interest rates in the euro zone.
   
Later in the session, investors will review Michigan sentiment figures, which may provide further direction for the currencies market.
   
On Thursday, the Treasury Department reaffirmed the "strong dollar" policy in the wake of market rumors claiming that the administration was comfortable with a weaker currency.
   
Overnight, the Chinese yuan strengthened to 8.0170 against the U.S. dollar, the lowest level since China dropped its decade-old dollar/yuan peg last summer.
   
The pace of yuan appreciation has accelerated this year, amid mounting political pressure from Washington and ahead of Chinese President Hu Jintao's visit to the U.S. in late April.

HotSignals release a lite version of their highly successful US equity technical analysis package. We give YOU the edge! Did you sell Google at $444.91? We did and many more every trading day. Are you looking for something different in your trading armoury? Then look no further. Click here

The European Markets at 12.00 BST

London - Leading shares remained weaker at midday in a quiet last session of the first quarter, with profit-taking in recent high-flying miners and the collapse of ITV's bid talks pulling the FTSE back below the 6,000 level, dealers said.
   
By 12.10 pm, the FTSE 100 index was 32.6 points lower at 5,982.6, just off its session low of 5,978.4 having seen an early rally to 6,019.2 quickly snuffed out.

Frankfurt - Shares were lower in midday trade after a mixed session on Wall Street overnight, amid profit-taking, and with a relative lack of local news to excite investors on the last trading day of the quarter, though Schwarz Pharma soared on positive Lacosamide trial data, dealers said.
   
At 11.40 am, the DAX 30 index was 38.71 points or 0.65 pct lower at 5,945.48, having moved between 5,942.88 and 5,982.93 so far this session.

Paris - Shares were lower at midday on light trading volume as investors consolidated their positions after the gains seen yesterday, a dealer said.
   
At 12.45 pm, the CAC-40 index was 21.46 points lower at 5,218.64, on volume of 1.94 bln eur. Among CAC-40 shares, 28 were lower and 12 were higher.

Amsterdam - Shares were broadly lower at midday with investors looking to lower US futures, while Philips and DSM traded ex-dividend and Nutreco surged after a ratings change at a brokerage, dealers said.
   
At 12.20 pm, the AEX was down 3.47 points or 0.73 pct to 469.11, after opening at 468.57 and reaching an earlier high of 471.53.

Milan - Share prices were lower at midday amid across-the-board profit-taking, with Fiat outperforming on positive auto sales expectations and STMicro continuing to benefit from an upbeat outlook at its client Nokia, dealers said.
   
At 12.52 pm, the Mibtel index fell 0.67 pct to 29,272 points and the S&P/Mib was off 0.81 pct to 37,895, while volumes stood at 2 bln eur.

Madrid - Share prices were lower in light midday trade as blue chips remained under pressure on the DJIA's overnight weakness and negative US futures, with trading cautious ahead of key US data later today, dealers said.
   
At 12.34 pm, the IBEX-35 index was down 70.8 points to 11,799.0, after trading in a range of 11,779-11,836, on turnover of 1.29 bln eur.

Stockholm - Share prices were slightly lower in early afternoon trade, virtually unchanged from morning levels as profit-tasking levelled off, dealers said.
   
At 1.35 pm, the OMX Stockholm index was down 0.47 pct at 339.67, while the OMX Stockholm 30 index was down 0.59 pct at 1,063.00. Turnover was 11.69 bln skr.

Zurich - Share prices were lower midday tracking overnight falls in the DJIA, with most blue chips in the negative, led by Serono after its 7.3 bln sfr capital hike announcement, dealers said.
   
At 12.20 pm, the Swiss Market Index was 32.26 points lower at 7,999.01, and the Swiss Performance Index down 27.24 points at 6,141.38.

Automated Forex Alerts to your email or Cell phone.  Finally a system that works! Come and see it live today.  Free Automated Trading, get your complimentary trial here

Asian shares close mostly higher, Tokyo firmer after upbeat data

HONG KONG - Share prices across the Asia-Pacific region closed mostly up, with Tokyo fractionally higher following fresh data that showed the jobless rate at more than seven-year lows and suggested deflation may be history, dealers said.
   
They added profit-taking capped some gains.
   
Investors were also hesitant to buy more shares ahead of the quarterly Tankan business sentiment survey by the Bank of Japan on Monday, they said.
   
The Nikkei 225 Stock Average closed up 14.32 points at 17,059.66, after touching a high of 17,094.61. It was its best finish since Aug 29, 2000 when the index settled at 17,141.75.
   
The broader TOPIX index of all first-section issues gained 1.48 points to 1,728.16, off a high of 1,735.25.
   
For the week, the Nikkei 225 rose 3.1 pct while the TOPIX advanced 2.3 pct.
   
Japan's core consumer price index, which excludes volatile prices of fresh food but includes energy costs, increased 0.5 pct last month from a year earlier, rising for the fourth straight month.
   
The unemployment rate dropped to 4.1 pct last month from 4.5 pct in January, the lowest figure since July 1998 when the jobless rate also stood at 4.1 pct.
   
"The unemployment data confirmed the recovery of the Japanese economy," said Hideyuki Suzuki, a strategist at SBI Securities.
   
But instead of taking up more shares, many investors adjusted positions after the Nikkei 225 posted its fifth-straight day of gains yesterday, when it exceeded 17,000 for the first time since August 2000, he said.
  
Share prices in Australia continued to break record levels as surging metal and energy prices supported local stocks and the broader market, dealers said.
   
They said global miners BHP Billiton and Rio Tinto both rose to all-time highs after copper rallied to a record level overnight.
   
Dealers said gold stocks Newcrest and Lihir surged after the precious metal jumped to a fresh 25-year high.
   
They said firmer oil prices overnight lifted the nation's largest independent oil and gas producer Woodside which gained added support after the company resolved a dispute with the government of Mauritania where it has oil production and exploration activities.
   
The S&P/ASX 200 rose 14.7 points or 0.29 pct to close at 5,129.7, passing yesterday's record closing high of 5,115.0.
   
Share prices in Hong Kong were trading slightly lower as early gains on some end-quarter window-dressing activity gave way to profit-taking, dealers said.
   
They said trade was rangebound ahead of the weekend though some Chinese commodity stocks posted sharp gains on a fresh surge in metal prices.
   
At 3:25 pm, the Hang Seng index was down 68.88 points or 0.43 pct at 15,811.81.
   
In mainland China, A-shares in Shanghai and Shenzhen turned around early morning weakness and closed higher thanks to significant gains in financial and metal companies, dealers said.
   
The Shanghai A-share Index added 3.80 points to 1,361.33 on turnover of 13.85 bln yuan and the Shenzhen A-share Index was up 2.70 points at 333.94 on turnover of 8.49 bln yuan.
   
Share prices in Seoul closed sharply higher, rising far above a long-held resistance level of 1,350 points, with large cap IT stocks, banks and KEPCO leading the rise, dealers said.
   
The market remained firm for most of the session as investors quickly shrugged off Wall Street's mixed performance and South Korea's slower-than-expected service sector output, released this morning.
   
The KOSPI index closed up 21.46 points or 1.60 pct at 1,359.60.

Asian Bourse Round-Up

For a full list of closing figures, click here

How? By using a new trading system by a 15 year market veteran designed for swing trading and day trading.  Learn how to trade any market, even if you are a novice. Manuals and videos provide a step by step blue-print to make learning easy. ADVFN subscribers save $50.00 - Only $147. Click here

NEW YORK - Gold futures rallied to a 25-year high overnight, then fell back in early trade Friday, with a rising dollar encouraging traders to lock in some gains.
   
Gold for June delivery was last trading down $3.40 at $588.40 an ounce.
   
The interest-rate friendly data helped long-term Treasury prices edge higher
in the early going.
   
The benchmark 10-year note was up 2/32 at 97 10/32, with its yield at 4.85%.
   
After the start of trading, a final reading of March consumer sentiment, a March Chicago-area manufacturing survey and February factory orders data will be unveiled.
   
Crude-oil futures fell in electronic trade after marking a two-month high a day before on concerns about tensions surrounding Iran's nuclear research program. Crude for May delivery was last trading down 73 cents at $66.42 a barrel.

A 24/7 real-time Forex Dealing room service - Forwards, Options, Day Trading and Limit Order deals. Open an account with $25 minimum. 24/7 broker support. No commissions. No software download required. Special terms for frequent traders. Click here