Wall Street finished a mixed day flat as investors weighed up issues related to an economic recovery and interest rates. Financials lost ground, while resource stocks were pushed lower as commodity prices fell against a strengthening greenback.
Federal reserve Chairman Ben Bernanke said an interest rate hike was unlikely in the short-term during a speech in Washington. Questions have been raised as to whether rates will be lifted quicker than anticipated due to inflationary concerns.
Bernanke also said the bank will make money on the funds it has pumped into the economy over the last two years.
The Dow Jones added 1.21 points, or 0.01%, to 10,390.11, the S&P 500 shed 2.73 points, or 0.25%, to 1,103.25 and the NASDAQ lost 4.74 points, or 0.22%, to 2,189.61.
The US government is expected to announce it will cut the cost of the Troubled Asset Relief Program by $200 billion, bringing the long-term cost to $141 billion.
However, the banks struggled Monday. Bank of America, Wells Fargo and JPMorgan fell 2.4%, 2.2% and 1.2% respectively.
Citigroup dipped 0.7% as it races against time to convince authorities to be allowed to pay US$20 billion in bail-out funds sooner rather than later. The government owns a 34% stake in the lender. Meanwhile, the Kuwait Investment Authority has sold its 5% stake in Citi for US$4.1 billion, or a $1.1 billion profit to what the state’s sovereign wealth fund paid for shares in the company less than two years ago.
Tech stocks were mainly lower. Apple, Oracle and Hewlett-Packard lost 2.2%, 1.5% and 1.2% respectively.
Discretionary stocks were boosted by Friday’s positive jobs figures. Retailers Wal-Mart and Target gained 1.3% and 1.5%.
Energy stocks were mixed as NYMEX light crude oil for January delivery fell US$1.67 to US$73.80 a barrel.
Sector heavyweight Exxon Mobil shed 0.7%, while Chevron and ConocoPhillips added 0.1% and 0.3%.
COMEX gold for February delivery fell US$28.10 to US$1,141 an ounce.
Barrick Gold and Newmont Mining extended yesterday’s slump to be down a further 0.6% and 0.4%.
European Markets
European stocks weakened on concerns the market is overpriced and as the Greek economy's problems continued to mount. A slide from the financials was partially offset by gains among commodity stocks.
In economic new, German factory orders unexpectedly decreased 2.1% in October after a 1.3% rise the previous month.
The UK benchmark FTSE 100 lost 11.70 points, or 0.22% to 5,310.66. The French CAC40 shed 6.57 points, or .17% to 3,840.05, while the German DAX fell 32.90 points, or 0.57% to 5,784.75.
UK banks struggled as a special tax on excessive bonus payments remains a possibility. Royal Bank of Scotland and Lloyds dropped 4.7% and 4.1%.
HSBC and Barclays finished 1.5% and 2.1% cheaper.
Commerzbank, Deutsche Bank and Societe Generale were between 0.2% and 1% lower, while BNP Paribas bucked the trend adding 0.3%.
The continent's largest engineering company Siemens lost 1.6% following a broker downgrade.
Pharmaceutical Bayer shed 1.4% after deciding to delay its response on an anti-clotting agent to the US Food and Drug Administration.
Cadbury shed 1.5% as the confectionary company said it would formally respond to Kraft’s offer document on December 14 alongside a trading update.
Daimler rose 1.3% after the automaker said it expects fourth quarter sales to increase substantially at its Mercedes-Benz passenger car division in the fourth quarter. Volkswagen also added 1.3%.
Despite a drop in metals prices miners managed to gain ground. Rio Tinto and BHP Billiton gained 1.4% and 1.1%, while Antofagasta rallied 2.2%.
Energy majors BG Group and BP advanced 0.6% and 0.5%.
Japanese Markets
Japan’s Nikkei advanced for the sixth consecutive day for the first time in more than four months. Exporters were the major improvers after better than expected US jobs data strengthened the greenback against the yen.
The Nikkei 225 climbed 145.01, or 1.45% to 10,167.60.
Camera maker Nikon Corp rallied 5.3%, while Sony and Canon gained 2.8% and 3.3%.
Tokyo Electron rose 3.7% on the back of a broker upgrade on the chip-equipment maker. Hitachi Kokusai Electric Inc and Advantest Corp jumped 8.4% and 3.6%.
Among the financials Mitsubishi UFJ Financial and Mizuho Financial Group put on 1% and 0.6%. Sumitomo Mitsui Financial Group lost 1%.
Japan Airlines spiked 7% on reports the company may receive a government loan guarantee. Nippon Airways rallied 4.5%.
Shippers tracked a rise in the Baltic Dry Index. Nippon Yusen K.K., Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha added 2.9%, 2.8% and 4.5% respectively.
Hong Kong Markets
The Hang Seng ended in negative territory for the second straight session Monday. It was a day of mixed fortunes as resource stocks lost ground on slumping gold and metal prices, while industrial stocks rallied on increased consumer confidence and lower unemployment in the US.
The Hang Seng shed 173.19, or 0.77% to 22,324.96.
In a round up of the banks, Bank of China lost 0.9%, while the mainland’s largest lender ICBC shed 1.5%.
Meanwhile Bank of Communications was down 1.3% and HSBC, which makes up one-sixth of the market, dipped 1.2%.
Li & Fung, the clothing maker, also lost 1.2%.
Cathay Pacific put on 2.3% as demand for flights increased. Air China advanced 3.4% after investing extra funds into a subsidiary.
Geely Automobiles spiked 6.1% in what has been a good run for the autos lately after saying it would increase output by 33% next year to 400,000 units.
Foxconn International Holdings, the world’s number one third party mobile phone maker surged 17% on a profit estimate upgrade from investment bank Morgan Stanley.
Among resource stocks Zijin Mining, the country’s largest gold producer, sank 5.1% matching a similar fall in the price of gold.
Aluminum Corp, or Chalco, shed 2.1% to be the largest decliner on the Hang Seng index.
However, surging gas sales saw China Gas Holdings jump 6.4%.
