Sharechat Logo

While you were sleeping: Stocks slip, directions awaited

Tuesday 23rd February 2010

Text too small?

Global stocks slipped amid uncertainty about the euro-zone’s plan to bolster Greece and ahead of Congressional testimony by Federal Reserve Chairman Ben Bernanke on the state of the US economy.

Bernanke will give testimony on Wednesday and Thursday.

In late morning trading on Wall Street, the Dow Jones Industrial Average was 0.2% lower, the Standard & Poor’s 500 Index was 0.23% lower and the Nasdaq Composite had dipped 0.25%.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ rose 2.5% to 20.52.

The Dow Jones Stoxx 600 ended 0.1% lower at 250.22. Across Europe, the UK’s FTSE 100 ended 0.5% down, while France’s CAC 40 slipped 0.16% and Germany’s DAX slid 0.35%.

Twenty-four European banks may need to issue about 240 billion euros ($US327 billion) annually for the next three years to fund existing and new businesses, as well as to meet the new Basel stable funding requirements, Citigroup said.

The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.01% to 80.56.

The euro declined 0.1% to $US1.3598, according to Reuters data. It was down 0.6% at 123.99 yen while the dollar was off 0.5% at 91.19 yen.

The worst may yet be ahead for the euro, according to a report by Bloomberg that derivatives traders are betting measures to rein in deficits in Greece, Spain and Portugal may push those countries back into recession.

The euro has dropped 6.1% since mid January. Of 41 strategists surveyed by Bloomberg, 36 forecast it being weaker than that level at some point this year. Median forecasts predict it will remain below $1.43 through 2012 and beyond. The consensus year-end forecast for 2010 is $1.41.

Forward contracts used to lock in interest costs show traders expect the three-month euro-denominated London interbank offered rate to be 1.45% a year from now, or about 0.17 percentage point higher than the dollar Libor forward rate, Bloomberg says.

U.S. Treasury bonds fell in early New York trade as traders prepared for an $US8 billion auction of 30-year TIPS inflation protected bonds later in the day.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, fell 0.77% to 275.66.

US crude for March delivery, which expires on Monday, fell 7 cents to $US79.74 a barrel by 1624 GMT after hitting $US80.51 earlier - the highest for a front-month contract since January 13. Brent crude for April gave up 6 cents to trade at $US78.13 a barrel.

Copper fell more than 1% as Chinese traders and investors returned from their New Year break. Copper for three month delivery on the London Metal Exchange traded at $US7365 a tonne.

Copper futures in London are set to rise to $US8000 a metric ton on increased demand from China and a recovery in usage outside the Asian nation, according to Macquarie Group Ltd.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

VCT - Operational performance for the year ended 30 June 2024
Challenge to banks the way to go
Bigger returns or lower risk?
NPH - Director Appointment
July 19th Morning Report
Wellington International Airport Ltd (“WIA040”) - Maturity
Devon Funds Morning Note - 18 July 2024
CNU - Commerce Commission releases draft Price Quality decision
Precinct FY24 Annual Results and Webcast Details
Scott Technology appoints new CEO