Dollar up, gold falls in morning trading

30 Jan 2009, 1757 hrs IST, AGENCIES

LONDON: The US dollar was mostly higher against other major currencies in European trading Friday morning. Gold fell. The euro traded at $1.2820, down from $1.2964 late Thursday in New York. Other dollar rates: 89.66 Japanese yen, down from 89.85. 1.1597 Swiss francs, up from 1.1519. 1.2327 Canadian dollars, up from 1.2213 The British pound was quoted at $1.4310 down from $1.4317. Gold traded in London at $918.50 per troy ounce, down from $892.25 late Thursday.

Wall Street swings lower on GDP contraction

30 Jan 2009, 2225 hrs IST, AGENCIES

NEW YORK: US stocks swung lower on Friday, wiping out opening gains as investors digested government data showing the economy shrank less than expected in the 2008 fourth quarter.

The Dow Jones Industrial Average slid 70.33 points (0.86 percent) to 8,078.68 at 1603 GMT and the tech-rich Nasdaq fell 11.56 points (0.77 percent) to 1,496.28. The broad-market Standard & Poor's 500 index retreated 8.02 points (0.95 percent) to 837.12. Wall Street dived Thursday as investors booked profits amid a series of weak data and poor corporate earnings. The Dow slid 2.70 percent and the Nasdaq 3.24 percent. Stocks had opened with modest gains after the Commerce Department reported that gross domestic product (GDP) contracted at a 3.8 percent pace in the 2008 fourth quarter. It was the sharpest quarterly decline since 1982 but far less than the consensus forecast of a 5.5 percent annualized drop. The estimate of fourth-quarter GDP suggests "that the difficult recession the US economy is experiencing may not be as severe as some analysts had been anticipating," said analysts at Charles Schwab & Co. But some analysts pointed to grim data lurking beneath the headline figure. "The headline on this GDP report is not as bad as feared, but the breakdown doesn't provide much encouragement," said Patrick O'Hare at Briefing.com. Sal Guatieri, senior economist at BMO Capital Markets, said the figure was "very much an illusion" created by an unexpected increase in business inventories. He predicted the 2009 first quarter could contract more sharply. Christina Romer, chair of President Barack Obama's Council of Economic Advisors, warned the recession had spread to all sectors of the economy and highlights the need for a quick stimulus plan. "This widespread decline emphasizes that the problems that began in our housing and financial sector have spread to nearly all areas of the economy," Romer said in a statement. "Immediate action to support both the financial sector and overall demand is essential." Among stocks in focus, Exxon Mobil, the Dow's biggest component, rose 1.21 percent to 77.93 dollars. The oil and gas giant posted a 2008 net profit of 45.22 billion dollars, the largest annual profit ever declared by any publicly listed company in the world, despite a 33 percent fourth-quarter profit plunge amid falling oil prices. Exxon rival Chevron climbed 1.13 percent to 71.42 after reporting 2008 net profit up 28 percent from the prior year. Procter & Gamble fell 3.95 percent to 55.92. The consumer products maker announced in-line quarterly earnings but warned of tough conditions ahead. Amazon vaulted 18.20 percent higher to 59.10. The online retailer reported after Thursday's market close fourth-quarter earnings that beat estimates. Bonds fell back. The yield on the 10-year US Treasury bond edged up to 2.819 percent from 2.815 percent Thursday and that on the 30-year bond rose to 3.575 percent from 3.559 percent. Bond yields and prices move in opposite directions.

Dollar gains as UK enters recession, earnings fall

24 Jan 2009, 0228 hrs IST, AP

NEW YORK: The dollar notched a new 23 1/2-year high against the pound and gained on the euro, but slipped versus the yen as a British recession was confirmed and more blue chips posted declining profits. The 16-nation euro fell to $1.2974 in late trading on Friday from $1.3021 late on Thursday. The British pound traded at $1.3768, having rallied moderately after earlier sinking to a 23 1/2-year low of $1.3501 after the British government confirmed a second consecutive quarter of economic contraction. Thursday, the pound was worth $1.3876. A standard definition of recession is two quarters of shrinking economic activity. Analysts see more interest-rate cuts coming from the Bank of England, which could help support the dollar. Cutting rates theoretically gives a boost to economic activity, but can undermine acurrency as investors transfer funds elsewhere for better returns. Meanwhile, the dollar slipped to 88.76 Japanese yen from 89.09 yen late on Thursday. The U.S., Japan and Germany, Europe's biggest economy, are already officially in recession. In the U.S., market sentiment was poor as a string of brand-name corporations reported shrinking profits. General Electric Co., one of the world's largest companies, said Friday it had a 46 percent drop in profit and forecast a difficult year. It was forced to defend its top-notch ``AAA''credit rating to investors worried about the vulnerabilities of its financing unit and slowing orders in its industrial segment. Earnings at a diverse selection of companies - motorcycle-maker Harley-Davidson Inc., office-equipment company Xerox Corp. and oilfield services provider Schlumberger Ltd. - also sank. Companies overseas are taking a hit as well. South Korea's Samsung Electronics posted its first-ever quarterly loss on Friday. In other New York trading, the dollar rose to 1.1568 Swiss francs from 1.1541 francs late Thursday, but dropped to 1.2340 Canadian dollars from 1.2532.

Dollar's rise shrinks forex kitty by $2.6 bn to $252 bn

Mumbai: The greenback’s rise against other currencies has resulted in the country’s forex shrinking in dollar terms. The fall in the value of non-dollar investments, including euro and the pound, has resulted in forex reserves coming down by $2.6 billion to $252 billion. Last week, the dollar appreciated sharply against other currencies as funds sought out safe havens in the wake of uncertainty in the stock markets. Forex reserves have three constituents — foreign currency assets, gold and reserves with IMF. While foreign currency assets dipped $2,570 million, reserves with IMF dipped $11 million, taking the total dip in reserves during the week to $2,581 million. The value of gold in reserves, however, remained unchanged during the week. Analysts said the decline was not on account of dollars going out of the country as RBI has not intervened significantly in the currency markets during the week. In the other developments, the Centre still resorted to ways and means advances (WMA) — a temporary overdraft to meet revenue mismatches. The Centre’s outstanding WMA with the central bank amounted to Rs 9,263 crore as on January 16, down by Rs 6,391 crore over the previous week’s levels. While the outstanding WMA by state governments amounted to Rs 400 crore, down Rs 55 crore over the previous week’s levels. Reliance on the central bank, to meet its day-to-day administrative expenditure, reflects the poor state of the fisc. This is largely because the government has announced a series of expenditure programmes and tax sops to revive the economy’s growth pace. This in turn has strained the government finances.

US stocks open lower on disappointing retail sales

14 Jan 2009, 2020 hrs IST, AGENCIES
Wall Street's anxiety about the US economy and the health of the banking industry is sending stocks down sharply in early trading.
The Commerce Department has reported that retail sales fell twice as much as expected during December. Investors were already well aware that consumers have curtailed their spending, but the data still came as an unpleasant surprise. And Citigroup Inc.'s announcement of a deal to give up control of its brokerage to Morgan Stanley for $2.7 billion is a reminder of the cash shortages facing some banks. The Dow Jones industrial average is down 154 at the 8,294 level. All the major indexes are down more than 1.5 percent.

Dollar mostly down, gold up in morning trading

14 Jan 2009, 1920 hrs IST, AGENCIES
The US dollar was mostly lower against other major currencies in European trading on Wednesday morning. Gold rose The euro traded at $1.3231, up from $1.3177 late Tuesday in New York. Other dollar rates: 89.44 Japanese yen, up from 89.13, 1.1167 Swiss francs, down from 1.1197, 1.2203 Canadian dollars, down from 1.2267. The British pound was quoted at $1.4543, up from $1.4493. Gold traded in London at $827.25 per troy ounce, up from $826.50 late Tuesday.

US stocks rises, Dow up 2.93 percent

3 Jan 2009, 0251 hrs IST, AGENCIES

NEW YORK: US stocks rallied on Friday in the first trades of 2009, as investors pinned their hopes on a better year after a horrendous 2008 that slashed up to 40 percent off the major indexes. Building on modest opening gains in thin trade, the Dow Jones Industrial Average surged 257.58 points (2.93 percent) to 9,033.97 at the market close and the tech-studded Nasdaq leapt 55.18 points (3.50 percent) to 1,632.21. The broad-market Standard & Poor's 500 index advanced 27.97 points (3.10 percent) to 931.22, according to preliminary closing figures. "Hope for much better returns in 2009 has permeated the marketplace," said Patrick O'Hare, an analyst at Briefing.com. "Unless there is a sea-change in sentiment over the course of the next two trading sessions, it looks as if we'll be able to say there was indeed a Santa Claus rally."