While you were sleeping: Wall Street, greenback bounce

Friday 11th December 2015

Wall Street and the US dollar gained as investors positioned themselves ahead of next week’s Federal Reserve meeting.

The greenback drew support from Citigroup which called the US currency “attractive”. The Bloomberg Dollar Spot Index, which tracks the currency versus 10 counterparts, rose 0.3 percent to 1,224.24 as of 1.20pm in New York.

Wall Street also moved higher, following three days of declines. In 1.25pm trading in New York, the Dow Jones Industrial Average advanced 0.7 percent. In 1.10pm trading, the Standard & Poor’s 500 Index gained 0.4 percent, while the Nasdaq Composite Index added 0.6 percent.

Gains in shares of Chevron and those of Boeing, last trading 1.9 percent and 1.6 percent higher respectively, helped propel the Dow higher.

"There is some amount of bargain hunting too as investors are price sensitive and we're going to see some sloppy trading today, because there is no major economic data or news,” Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh, told Reuters.

A Labor Department report showed initial jobless claims climbed 13,000 to a seasonally adjusted 282,000 for the week ended December 5, the highest level since the July 4 week. The less-volatile four-week average of claims increased to 270,750 from 269,250 in the prior week.

“As we approach the end of the year, jobless claims have a tendency to be more volatile due to seasonal adjustment issues around the holidays,” John Ryding, chief economist at RDQ Economics in New York, told Reuters. “The message remains that the pace of layoffs is very low.”

It certainly did not alter expectations for a US Federal Reserve interest rate increase next week.

"A rate hike is locked in and if they don't raise next week, they will upset every market,” Forrest told Reuters.

A separate report showed the import price index fell for a fifth straight month, declining 0.4 percent in November, following a 0.3 percent fall in October.

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent decrease from the previous close. France’s CAC 40 Index slipped 0.1 percent, while the UK’s FTSE 100 Index fell 0.6 percent. Germany’s DAX Index eked out a 0.1 percent increase.

In London, shares of commodities trader Glencore surged 7 percent after it renewed its effort to cut its debt.

Oil fell after a report showed that output from the Organisation of Petroleum Exporting Countries climbed by 230,100 barrels a day in November to 31.695 million a day, the highest level in more than three years.

Brent futures fell to US$39.87 per barrel while US crude futures slid to US$36.71 per barrel.

Gold declined 0.5 percent to US$1,071.10 an ounce, and might weaken further.

"Although a US rate hike should be priced in, gold's initial reaction will be to the downside," Commerzbank analyst Daniel Briesemann told Reuters.

BusinessDesk.co.nz

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