Latest market wrap posted by Alin Puian. Can also be read at www.instutrade.com/
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In European Equity Markets stocks declined, with the benchmark Stoxx Europe 600 Index posting its longest losing streak since August, as Germany failed to attract sufficient bids at an auction of benchmark 10-year bunds. Rio Tinto Group, the world's second-largest mining company (RIO), dropped 2 percent as Australia's lower house of parliament passed legislation introducing a tax on coal and iron-ore profits. Logica (LOG) Plc, the Anglo-Dutch computer services provider, slid 4.3 percent after Jefferies Group Inc. cut its recommendation on the shares. Dexia SA (DEXB) jumped 7.1 percent. National benchmark indexes fell in 16 of the 18 western- European markets. France's CAC 40 Index slipped 1 percent. Germany's DAX Index dropped 0.8 percent. The U.K.'s FTSE 100 Index slid 1.1 percent. Dexia jumped 7.1 percent to 25.6 euro cents. Luxembourg's Finance Minister Luc Frieden said that talks about the government-backed funding of the remaining assets do not face "insurmountable difficulties." Axa SA (CS) added 1.7 percent to 8.77 euros. Chief Executive Officer Henri de Castries said the company's margins are satisfactory in most areas and it will continue to buy French government debt, in an interview on BFM Radio.
In Currency Markets euro fell to a six-week low against the dollar as reports added to signs that Europe's economic growth is stagnating and Germany received insufficient bids at a debt auction. The dollar rose versus all of its 16 most-traded peers as a gauge of European services and manufacturing output shrank and data signaled China's manufacturing will tumble. The euro slid further after European Union Economic and Monetary Affairs Commissioner Olli Rehn said the financial crisis is "ravaging Europe." Brazil's real was the biggest loser versus the dollar. Europe's shared currency dropped 1.1 percent to $1.3355 at 11:30 a.m. New York time and reached $1.3352, the least since Oct. 10. The euro fell 0.6 percent to 103.38 yen. The dollar was 0.6 percent higher at 77.42 yen. The pound declined 0.8 percent to $1.5513, after being as low as $1.5511, the least since Oct. 7. It fell for a third day after minutes of the central bank's rate-setting meeting this month showed increased support for additional stimulus.Bank of England policy makers at the meeting unanimously kept the target for asset purchases at 275 billion pounds, after raising it by 75 billion pounds in October, the minutes showed.
In Commodities Markets oil declined as bids for German bonds fell short of expectations and U.S. durable-goods orders fell, reducing optimism that economic growth will improve. Futures fell as much as 2.7 percent after Germany missed its sales target for bids at an auction of benchmark 10-year bunds. Orders for goods meant to last at least three years fell in October and September's decline was revised to more than twice as large as initially reported. Oil pared losses after the Energy Department reported inventories fell to a 21-month low. Crude oil for January delivery dropped $1.83, or 1.9 percent, to $96.18 a barrel at 11:00 a.m. on the New York Mercantile Exchange. The price was $95.60 before the Energy Department report. Brent oil for January settlement decreased $1.97, or 1.8 percent, to $107.06 a barrel on the London-based ICE Futures Europe exchange.
In US Equity Markets stocks slumped, sending the Standard & Poor's 500 Index down for a sixth straight day, as the cost of insuring European government debt against default rose to a record on concern the region's crisis is worsening. About 10 stocks fell for each that rose on U.S. exchanges. Alcoa Inc. (AA) slid 3.5 percent amid concern about slower demand for commodities as a preliminary gauge indicated China's manufacturing shrank by the most since March 2009. Bank of America (BAC) Corp. and Citigroup Inc. (C) sank at least 4 percent. Deere & Co. (DE) rallied 3.7 percent as the largest farm-equipment maker reported profit that topped analysts' projections. The S&P 500 declined 1.8 percent to 1,166.39 at 11:30 a.m. New York time, the lowest intraday since Oct. 10. The gauge tumbled 7.3 percent in six days, the most since Aug. 10 on a closing basis. The Dow Jones Industrial Average lost 189.66 points, or 1.7 percent, to 11,304.06. U.S. equity markets will be closed tomorrow for the Thanksgiving holiday and will end trading at 1 p.m. Nov. 25. All 10 groups in the S&P 500 fell as commodity and financial shares had the biggest declines.
In Bond Markets Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region's debt crisis is driving away investors.Belgian 10-year yields surged 44 basis points to 5.52 percent, the highest since November 2000. French 10-year bond yields climbed 20 basis points to 3.65 percent. The yield on Greek two-year notes jumped to more than 120 percent for the first time. Belgium is due to auction securities, including 10-year debt, on Nov. 28. Italy and France will also sell bonds next week. talian bonds fell today, even after the ECB was said by four people with knowledge of the transactions to have bought the securities. The five-year note yield jumped 28 basis points to 7.19 percent. Rates on five-year Belgian debt increased 40 basis points to 4.98 percent
