While you were sleeping: Stocks mixed at year end

Friday 1st January 2010

Stocks were mixed in shortened trading sessions on Thursday, with the FTSE 100 Index edging higher and the three major U.S. benchmarks sliding into the year end.

Still, global equities had a banner 12 months in 2009, posting double-digit gains in most major markets as the fears stoked by the recession eased and monetary authorities flooded financial firms with cheap cash.

At the early 1pm close on Thursday, the Dow Jones Industrial Average had slid 0.46% to 10,499.46, the Standard & Poor’s 500 declined 0.32% to 1122.83 and the Nasdaq Composite fell 0.26% to 2285.32.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ rose 5.2 % to 21. It dropped about 75% through the year on renewed optimism among investors.

Hewlett-Packard, Caterpillar and FedEx paced the declines today.

Technology shares in the S&P 500 have led the 2009 rally, climbing 61% as a group, followed by a 46% gain in raw-materials producers as commodities prices rebounded. Copper rose 139% in the year.

On the economic front overnight, the U.S. Labor Department said initial jobless claims fell by 22,000 to 432,000 in the latest week, that’s the lowest level since July 2008. The outlook for the nascent U.S. recovery has been pinned on the performance of the labour market, and recent signs bode well for the new year.

In Europe overnight, the FTSE 100 Index edged 0.28% higher to 5412.88 and France’s CAC 40 Index rose 0.02% to 3936.33. Almost all of the other major markets were shut on Thursday ahead of the New Year holiday.

The Dow Jones Stoxx 600, which was last calculated for the year on Wednesday, rose 28% to 253.16 during 2009, rising 0.5% this week after China increased its growth target.

National benchmark indexes rose in all of the 18 western European markets except Iceland in 2009. And the U.K. this week joined Hong Kong, Norway, Portugal, Singapore, Spain and Sweden as the only nations among 23 developed markets that had recouped all of their post-Lehman losses, according to Bloomberg.

The Australian and New Zealand dollars were among the best performers among the major currencies in 2009, rising about 28% and 25%, respectively, against the dollar, according to Reuters.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell on Thursday 0.05% to 77.86.

On Thursday, the U.S. dollar advanced as the latest jobless claims report bolstered the prospects for the world’s biggest economy and the chances that interest rates will rise sooner than later.

Futures trading in Chicago showed a 62% chance that the Fed will increase its key lending rate by at least a quarter-percentage point by its June meeting, compared with 31% odds a month ago.

The U.S. dollar was up 0.4% at 92.92 yen after earlier rising above 93 yen for the first time since early September. The euro fell as low as US$1.4308 and was last little changed at US$1.4343.

Sterling rose 0.6% to US$1.6153 while the dollar slipped 0.3% to 1.0335 Swiss francs.

The euro was set to finish the year up 2.5% against the dollar, although it has shed about 4.4% in December. The greenback was headed for a 2.7% annual advance versus the yen, paring its decline this decade to 9.2%.

Both gold and oil edged higher on Thursday.

Bullion rose 0.5%, capping a 25% advance this year. Palladium rose 3.5% for a record 119% return this year.

Spot gold stood at US$1096.90 an ounce. It was up about US$220 this year, a sum eclipsed in recent history only by 1979's US$286 surge. U.S. February gold futures on the COMEX division of the New York Mercantile Exchange rose US$5.50 to US$1098.

Oil has risen almost 80% this year, though it remains far below its record high. U.S. crude for February delivery rose 61 cents to US$79.89 a barrel, its seventh straight session of gains. Prices have risen 14% in just over two weeks. London Brent crude rose 57 cents to $78.60.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, rose 0.18% to 284.13

Businesswire.co.nz

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