Wall Street stocks finish week steady as Euro markets rise
Energy, metal companies and technology stocks helped Wall Street to close higher on Friday as hopes rose President-elect Barack Obama’s $US600 billion infrastructure spending proposal will revive economic growth.
But the main indices bungeed during week as the prospects of a $US14 billion car industry bailout rose and then fell with the Senate’s rejection. At week’s end the White House indicated it would tap the financial bailout funds instead to rescue the likes of General Motors. from bankruptcy.
The main Dow Jones index finished the week virtually unchanged – 5.74 points down, or 0.1%, at 8629.68 – while the broader S&P500 was up slightly by 0.4% to 879.73. Both indices swung more than 2% on three occasions during the week.
Construction companies and commodity producers led the advance European stocks over the week. Rio Tinto surged 42% after announcing plans to reduce debt and its workforce.
The pan-European Stoxx 600 added 4.4% to 198.22, bringing its rebound from this year’s low in November to 8.8%. National benchmarks rose over the week in all 18 western European markets except Iceland. France’s CAC 40 climbed 7.6 percent, the German DAX added 6.4% and the UK’s FTSE 100 increased 5.7%.
Goldman Sachs predicted oil may fall as low as $US30 a barrel early next on lower demand. Prices on Friday for January delivery fell $US1.70 a barrel, or 3.5%, to settle at $US46.28 after US government indications it would pursue a car industry bailout.
Prices finished the week up 13%, the biggest one-week gain in four years, after Saudi Arabia said it has already made Opec-driven supply cuts. Oil exporters plan to meet again in the coming week in Algeria to discuss further cuts in production, though these aren’t expected to be drastic as world economies are fighting recession.
The dollar fell to a 13-year low against the yen while the euro posted its biggest weekly gain against the dollar since the currency’s 1999 debut. US interest rates are seen as falling further while the European Central Bank has indicated it may be approaching the end of interest-rate cuts.
The dollar fell 1.8% week to 91.21 yen, stretching its declines to six weeks – the longest stretch of losses since December 2004. The euro rose 5.1% over the week to $US1.3369, a record weekly gain. The euro advanced 3% against the yen to 121.83.
The Korean won made the biggest gains versus the dollar last week, climbing 7.5% to 1372.45, after Korea agreed on bilateral currency swap accords with Japan and China. Sterling fell to 89.97p per euro, the weakest since the European currency began trading.