Wall Street rises as stronger dollar whacks commodities

Blue chip stocks on Wall Street scraped through a choppy session to finish just above Friday’s rebound, led by the telecommunications and utilities sectors.

Improved labourt market data, released late last week, restored optimism about the economy but also raised expectations that interest-rate increases could come sooner than previously expected.

The Dow Jones Industrial Average added a mere 1.21 points to finish at 10,390.11 after rising as high as 54 points. Boeing was the best performer, up 1.7%, as the first test flights loom for the Dreamliner.

American Express was up 1.5% after an upgrade of credit-card companies by analysts at Bank of America Merrill Lynch. Going backward, Caterpillar fell 1.2% and Pfizer 1%.

The S&P 500 shed 2.73 points or 0.2% to 1103.25, boosted by its telecom and utilities sectors, which have been laggards for much of the year, but weighed down by the financial sector.

The technology-heavy Nasdaq Composite was also down 0.2% at 2189.61.

Canadian stocks swung between gains and losses as a rising US dollar weighed on commodity prices, offsetting a rally in Potash Corporation of Saskatchewan.

Goldcorp slid 3.1% as the metal retreated from a record. Canadian Natural Resources followed oil lower as the dollar rose on speculation the US Federal Reserve may start raising interest rates.

BlackBerry maker Research In Motion climbed after reaching an agreement to sell the phone in China, broadening its access to the world’s largest mobile-phone market.

The S&P/TSX finished 16.62 points down at 11,494.18, a 0.1% drop.

The stronger US dollar also kept European stock markets in check, as commodity stocks slumped further.

In London, Eurasian Natural Resources, Xstrata and Fresnillo were three of the biggest fallers on the UK's FTSE 100.

Lack of corporate news also kept markets subdued. UBS was down 1.2% in Zurich after it said it wanted Deutsche Lufthansa's boss Wolfgang Mayrhuber to join its board.

The FTSE 100 index was down 0.1% at 5319.82 while Germany's DAX fell 0.3% to 5803.13. The CAC-40 in France gained 0.1% to 3849.17.

Commodities: Oil, gold down

Crude futures are down after the dollar rose to its highest level against the euro in a month.

Light, sweet crude for January delivery was $US1.54, or 2%, lower at $US73.93 a barrel in New York, an eight-week low. Brent crude on London’s ICE futures exchange was 60USc, or 0.8%, lower at $US76.92 a barrel.

The dollar also weighed on gold, which is well below its record of $US1226.30 an ounce set last Thursday. It slumped 4% on Friday after rising 56% in the past 12 months.

Spot gold traded at $US1139.80 an ounce, down 1.8% from Friday's close.

Gold contracts in New York were also down, with the February contract trading as low as $US1136.10 an ounce. But it bounced back in later trading to settle $US5.50 down at $US1164.

Gold prices were also affected by news that Canadian gold miner Barrick Gold eliminated its hedge book early and warnings of a potential gold bubble by China's central bank.

Currencies: Dollar up, euro down

The dollar hit a one-month high against a basket of currencies, as investors reckoned stronger labour market data in the US would prompt an early rise in US official interest rates.

The Dollar Index was at 75.981 from 75.788. It climbed as far as 76.183, the highest level since November 4..

The euro is down 0.4% at $US1.4797, having earlier fallen to $US1.4757, its lowest level since early November. It traded at $US1.4846 on Friday.

The dollar was at ¥90.07, from ¥90.51, while the euro was at ¥133.22, from ¥134.37.

The UK pound was at $US1.6347 from $US1.6449.