Wall Street finished flat Wednesday, as investors remain cautious ahead of the release of the monthly jobs report Friday. The greenback continued to lose ground against most major currencies after the Federal Reserve indicated interest rates were unlikely to rise in the near future due to uncertainty surrounding an economic recovery.
The government is expected to report no change in non-farm payrolls in December. Meanwhile, forecasts are for the unemployment rate to increase from 10% to 10.1%.
In economic news, the Institute for Supply Management's services sector index rose from 48.7 to a slightly lower than expected 50.1 in December. A reading over 50 indicates expansion.
The Dow Jones added 1.66 points, or 0.02%, to 10,573.68, the S&P's 500 gained 0.62 points, or 0.05%, to 1,137.14 and the NASDAQ lost 7.62 points, or 0.33%, to 2,301.09.
Financials closed higher. Citigroup and Bank of America advanced 3.1% and 1.2%, while Goldman Sachs bucked the trend to be down 1.1%.
Extremely cold weather across the Northern Hemisphere sent oil and natural gas prices higher. The price of Crude advanced for a 10th consecutive day, making it the longest streak since 1996.
Exxon Mobil and ConocoPhillips rose 0.9% and 0.7%.
NYMEX light crude oil for February delivery rose US$1.41 to settle at US$83.18 a barrel.
COMEX gold for February delivery gained US$17.80 to settle at US$1,136.50 an ounce.
Ford climbed 3.7% after the automaker reported a better than expected 34% rise in US sales during December versus a year earlier and a 50% increase on November. The industry reported a 15% rise in US sales for the month, while many expect a recovery is expected in 2010.
Alcoa jumped 5.2% after the price of aluminium rose to its highest level since October 2008.
Boeing was another stock among the top gainers with a 3% rise.
European Markets
European stocks closed a 15-month high following reports showing service industries both locally and in the US had grown in December. Miners were stronger, while financials were mostly higher.
The UK benchmark FTSE 100 added 7.54 points, or 0.14% to 5,530.04. The French CAC40 gained 4.76 points, or 0.12% to 4,017.67, while the German DAX put on 2.47 points, or 0.04% to 6,034.33.
Miners led gains as copper reached 16-month highs. Xstrata rallied 3.5%, while Anglo American and Antofagasta advanced 1.7% and 1.8%.
Aussie peers Rio Tinto and BHP Billiton gained 2.6% and 1%.
Royal Dutch Shell led miners lower with a loss of 1%.
UK banks Royal Bank of Scotland and Barclays rose 3.6% and 3%.
Commerzbank and Credit Agricole jumped 3.4% and 1.8%, while Deutsche Bank shed 1.1%.
Peugeot surged 6.4% on the back of a broker upgrade on the automaker. Renault added 2.5%.
Marks & Spencer dropped 6.8% after the British retailer missed sales forecasts.
A fall in UK consumer confidence had a negative impact on peers. Home Retail and Tesco weakened 2.2% and 2%.
Japanese Markets
Japanese stocks were boosted by better than expected economic data out of the US, which increased hopes of an economic recovery. Banks were the major movers, however gains were limited by weakness elsewhere.
The Nikkei 225 added 49.62, or 0.46% to be at 10,731.45.
Banks added the most points to the indices as reports surfaced Sumitomo Mitsui Financial Group is set to raise further capital. Its shares put on 5.5%, while Mitsubishi UFJ Financial Group and Mizuho Financial Group surged 4.4% and 6.1%.
Trading houses Mitsui & Co and Mitsubishi Corp gained 1.5% and 2.2% due to exposure to rising commodity prices.
T&D Holdings put on 4.1% after Nomura Holdings upgraded its rating on the life insurer.
Nintendo jumped 6.9% after the company said Wii sales reached record highs in December, beating expectations.
Japan Airlines fell 6.7% on reports the company’s main creditor and the finance ministry support a bankruptcy procedure as a means of restructuring the airline.
Casio Computer dropped 2.9% following a broker downgrade.
Hong Kong Markets
Hong Kong stocks continued a recent rally, hitting one-month highs Wednesday. The bourse was buoyed by increases in energy stocks as extreme cold weather hits China, while exporters gained on broader global economic optimism.
The Hang Seng climbed 137.09, or 0.62% to 22,416.67.
Despite the overall gains the banks were mixed by the end of the day.
Bank of China climbed 0.5%. Bank of Communications and ICBC lost 1.4% and 0.7% respectively.
HSBC put on 1.3%.
Meanwhile the bourse operator Hong Kong Exchanges & Clearing surged 4.8% on speculation IPO’s in 2010 would increase volumes traded on the exchange.
Shippers outperformed their peers as the Baltic Dry Index, a measure of the cost of shipping commodities, jumped more than 4%.
China Shipping Development surged 5.2%, while China Cosco Holdings put on 1%.
Aluminium Corp put on 4.9% as prices increased.
Coal producer China Shenhua Energy rallied 2%.
