While you were sleeping: Oil, dollar advance

Thursday 29th December 2016

Wall Street weakened, retreating from near-record highs, while oil and the US dollar moved higher in subdued year-end trading.

“Positions are being defended, not least in oil, while China worries and lower US bond yields has seen gold move higher,” Ole Hansen, the head of commodity strategy at Saxo Bank in Hellerup, Denmark, told Bloomberg. “Very thin market conditions ahead of year-end are making it difficult to read too much into the current movements.”

In 12.37pm trading in New York, the Dow Jones Industrial Average fell 0.3 percent, while the Nasdaq Composite Index slid 0.7 percent. In 12.21pm trading, the Standard & Poor’s 500 Index declined 0.6 percent.

Wall Street still trades near record highs, having strengthened on bets that US President-elect Donald Trump will loosen the government’s purse strings and regulations.

"The US stock market has climbed higher on lofty expectations of a new presidency, but we think greater caution is warranted," Todd Rosenbluth, director of ETF and mutual fund research at CFRA, told Reuters.

The Dow fell as declines in shares of Caterpillar and those of Walt Disney, each down 1 percent recently, outweighed gains in shares of Goldman Sachs and those of Travelers, recently trading 0.5 percent and 0.2 percent higher respectively.

Shares of Boeing slid, trading 0.7 percent weaker as of 12.43pm, after Delta Air Lines said it would cancel an order for 18 Dreamliner aircrafts in agreement with Boeing.

“This business decision is consistent with Delta’s fleet strategy to prudently address our widebody aircraft needs,” Greg May, Delta’s senior vice president of supply chain management and fleet, said in a statement, according to Bloomberg.

The latest housing data offered disappointment. A National Association of Realtors report showed the pending home sales index dropped 2.5 percent to 107.3 in November, down from 110.0 in October. It was the lowest reading since January.

A shortage of supply and a surge in mortgage rates hurt pending sales last month, according to Lawrence Yun, NAR chief economist.

"The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election,” Yun noted in a statement. "Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract."

In Europe, the Stoxx 600 Index finished the session with a 0.2 percent advance from the previous close. France’s CAC 40 Index inched 0.01 percent lower. Germany’s DAX Index eked out a 0.02 percent gain. The UK’s FTSE 100 Index rose 0.5 percent in its first day of trading since the holiday.

(BusinessDesk)

BusinessDesk.co.nz

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