Market overview for the 21th February 2008
Currencies
The dollar rose on Wednesday but gains were constrained amid indications that the Federal Reserve would likely continue cutting interest rates to heal an ailing economy even as inflation pressures mount.
Minutes of the Federal Open Market Committee's Jan. 29-30 policy meeting showed most officials saw risks to growth as weighted on the downside. The Fed also lowered its 2008 growth forecast to between 1.3 percent 2 percent a forecast of between 1.8 percent 2.5 percent in November.
News that underlying inflation accelerated at a faster-than-forecast pace in January had earlier cooled expectations of steep rate cuts by the Fed sending the Euro tumbling to a session low of $1.4615.
The dollar gained half a percent versus the Swiss franc to 1.0996 francs while sterling dropped to a one-month low at $1.9356. The pound last traded at $1.9412 down 0.3 percent late on Tuesday.
Oil's surge above $100 per barrel marking a record for a second straight day pushed the dollar to a session low of C$1.0107. The dollar last traded down 0.4 percent at C$1.0126.
Energy
U.S. crude oil futures ended higher on Wednesday propped up by a late short-squeeze on March crude that expired at the close.
The front-month contract earlier surged to a fresh record above $100 for a second day in a row before backing down on profit-taking.
On the New York Mercantile Exchange April crude settled at a record $100.70 a barrel rising 70 cents or 0.70 percent.
The intraday high erased Tuesday's record of $100.10 with the settlement is the highest for a front-contract since NYMEX launched crude oil futures in 1983.In London April Brent crude dropped 14 cents or 0.14 percent to settle at $98.42 a barrel trading $96.77 to $99.22 a record that eclipsed Tuesday's $98.70.The U.S. Energy Information Administration inventory data due on Thursday is expected to show that crude gasoline stocks rose last week poll of analysts showed on Wednesday.
Precious metals
Gold rose to a record high on Wednesday reversing early losses as a sharp turnaround in crude oil prices a U.S. report on rising consumer prices boosted bullion's appeal as a hedge against inflation. Platinum slipped on profit taking ending a record-setting streak after 14 straight days of gains. But analysts said it persistent supply problems should start platinum back on its upward path after a pause. Gold rose to $934.80/935.60 by New York's late quote at 19:15 GMT $927.00/927.80 on Tuesday. Bullion's gains accelerated in late afternoon trade reaching an all-time high of $943.20. Platinum had fallen as much as 3 percent after surging 43 percent in less than a month on worries the market deficit would widen sharply this year following output losses in top producer South Africa due to an electricity supply crisis. Platinum fell as low as $2065 per ounce was quoted at $2120/2130 down the New York close of $2140/2150 on Tuesday when it hit a record high of $2160.Silver edged down to $17.81/17.86 an ounce its previous New York finish of $17.36/17.41.
Stock Indices
U.S. stocks rose on Wednesday as a strong profit outlook Hewlett-Packard Co lifted technology shares the Federal Reserve signaled its intention to keep cutting rates. Hewlett-Packard shares jumped nearly 8 percent while International Business Machines Corp rose 2.7 percent as investors bet strong overseas sales will sustain profits in the computer industry. HP shares led the major advancers in both the Dow the S&P 500. The broader market slipped in early trading after data showing a surge in consumer prices last month raising concern that the Fed may have to hold back on further rate cuts. Later minutes the Federal Reserve's latest policy-setting meeting revived optimism that the central bank will stay aggressive to keep the economy falling into recession. The Dow J industrial average shot up 90.04 points or 0.73 percent tot 12427.26. The Stard & Poor's 500 Index gained 11.25 points or 0.83 percent to 1360.03. The Nasdaq Composite Index advanced 20.90 points or 0.91 percent to 2327.10.
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