Sharechat Logo

While you were sleeping: US consumers spend again

Wednesday 15th September 2010

Text too small?

American consumers gave investors another reason to be optimistic that the world’s biggest economy would avoid a double-dip recession, though markets overall were mixed after rallying a day earlier.

Retail sales in the US rose 0.4% in August, a touch higher than the 0.3% forecast by economists. Excluding autos, which dipped last month, overall sales increased by a bigger-than-expected 0.6%, the largest increase since March.

Bulls received an added boost from Best Buy Co after the world’s largest consumer-electronics retailer raised its 2011 profit outlook.

However, financial stocks fell, with Wells Fargo & Co. leading an index of banks to the biggest drop among 10 groups in the S&P 500.

In late trading, shares on Wall Street were mixed; the Nasdaq Composite Index was up 0.34% while the S&P 500 was 0.08% higher. The S&P 500 stayed above its 200-day moving average of around 1,115 after closing higher than that point on Monday for the first time since early August.

The Stoxx Europe 600 Index edged less than 0.1% lower to close at 266.40.

Today’s market pause wasn’t unexpected after shares across Europe and in the US powered ahead yesterday on positive data from China and the US and news of less restrictive capital requirements for global banks.

Damping the positive mood in Europe were declines in utility shares after brokers downgraded RWE AG and E.ON AG, Germany’s largest utilities. In addition, German investor confidence dropped to minus 4.3 in September, a 19-month low.

The Dollar Index, which measures the greenback against a basket of six major currencies, dropped 0.96% to 81.08.

The greenback fell, hitting a 15-year low below 83 yen as a break of technical support levels in several pairs prompted a sell-off of the US currency.

"It seems people are vacating [US] dollar positions today and that money is shifting into other safe-haven assets for the time being - the yen, the Swiss franc, gold and US Treasuries," Greg Salvaggio, vice president of trading at Tempus Consulting in Washington, told Reuters.

Once the single currency broke above the US$1.2920 to 30 area, a level that had held since August, it kept going to a one-month high of US$1.3033, according to Reuters. It was last up 1.1% at US$1.3019.

Bond and currency traders already are squaring positions ahead of the next meeting of the US Federal Reserve’s inner board which is expected to debate the 2011 economic growth forecast.

“If their 2011 forecast is for below 3% growth, then they would interpret their mandate as needing to do more,” Michael Feroli, chief US economist at JPMorgan Chase & Co., told Bloomberg. He is predicting the economy will grow 2.4% next year.

Businesswire.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

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
Synlait FY24 guidance withdrawal
Meridian issues demand response exercise notice to NZAS
July 17th Morning Report
CRP - Korella North Environmental Approval Granted
SCL - Sale of Apple Orchards