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While you were sleeping: Equities lose momentum

Wednesday 14th April 2010

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Lingering worries about Greece and a tepid start to the US earnings season took the wind out of the sails for global stocks overnight as European indexes drifted lower and Wall Street ended little changed.

At the close, the Dow Jones Industrial Average was up 0.12%, the Standard & Poor’s 500 Index was up 0.07% and the Nasdaq Composite rose 0.33%.

Alcoa kicked of the first-quarter results rush yesterday with sales data that missed expectations. Earnings were in line with forecasts.

Among the active stocks were Intel Corp and Google. Intel is set to report its results momentarily. Google is scheduled to report on Thursday.

Other stocks that were active included Fastenal Co, Home Depot Inc and Goodyear Tire & Rubber Co. Stocks which tumbled included regional banks - Huntington Bancshares and KeyCorp - and Avon Products Inc.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ rose 2.6% to 15.98.

The Dow Jones STOXX 600 slid for a second day, by 0.3% to 268.69.

The U.K.’s FTSE 100 shed 0.28%, Germany’s DAX lost 0.32%, while France’s CAC ended 0.46% lower.

Among the most actives were BHP Billiton, Total SA, Sandvik AB, Boliden AB and LVMH Moet Hennessy Louis Vuitton SA. Fortis and Scania AB both surged ahead.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.08% to 80.51.

The dollar traded at 93.16 yen at 3.34pm in New York, compared with 93.24 yesterday. The yen climbed almost 0.1% to 126.65 against the euro, from 126.74. The euro fetched US$1.3597, compared with US$1.3592.

The US trade deficit increased to US$39.7 billion in February from a revised US$37 billion in the previous month as import demand grew, the Commerce Department reported. The median forecast of 73 economists in a Bloomberg News survey was for a rise in the deficit to US$38.5 billion from a previously reported US$37.3 billion.

On the yuan watch today, US Treasury Secretary Timothy Geithner said he’s “confident” China would pursue over time a more flexible exchange rate.

“It’s very important that they move over time to a more flexible exchange-rate system,” Geithner said at an American Society of News Editors conference in Washington today as reported by Bloomberg.

“It’s good for them over time and that’s why I’m confident they’re going to move.”

In an interview on Bloomberg TV, Nouriel Roubini predicted that China would initiate a gradual appreciation in the yuan as early as next month with the currency rising at no more than 3% to 4% a year to allow the Chinese economy to adjust.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, rose 0.42% to 277.35.

In Paris, the International Energy Agency revised up global oil consumption estimates as the world economy recovers from recession.

The IEA expects world oil demand growth this year to reach to 1.67 million barrels per day (bpd), up 100,000 bpd. In its monthly report, the agency said world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009.

US crude oil for May delivery fell for a fifth session, sliding 56 cents to US$83.78 a barrel by midday in New York, down 5% from last week's peak at US$87.09.

Precious metals from gold to silver to platinum fell overnight. Spot gold was at US$1152.80 an ounce at about 3pm in New York, against US$1155.00 late in New York on Monday.

US copper futures rose as the greenback slipped. Copper for May delivery was up 2.60 cent at US$3.5905 per lb on the NYMEX's COMEX division.

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