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Wall Street avoids second-day slump

MARKET CLOSE: Blue chip stocks ended slightly higher in a late rally, though the broader market ended in the red.

Nevil Gibson
Thu, 18 Aug 2011

Blue chip stocks on Wall Street avoided a second day's drop as investors reacted to largely positive results from some high-profile retailers.

At the close (8am NZ time), the  Dow Jones Industrial Average was up 4.13 points, or 0.04%, to 11,410.06 after being down for most of the afternoon. It was up as much as 124 points in the morning.

The S&P 500 index finished down 0.1% at 1193.88, while the Nasdaq Composite was up 0.5% to 2511.48 as technology staged a late rally.

Among retailers, Target rose 1.8% after its quarterly earnings report topped estimates, Staples reversed a morning gain to fall 1% after it reported second-quarter profit that topped forecasts, while Abercrombie & Fitch fell 8% as rising costs from increased raw-material costs cut into profit margins.

Gold futures rose to a fresh record just below $1800 an ounce and crude-oil futures rose to nearly $US88 a barrel as the US dollar slipped.

Other markets: Europe, Asia mixed
European bank and financial stocks fell after a controversial proposal by German and French leaders for a tax on financial transactions.

Deutsche Börse slumped 5.8%, London Stock Exchange fell 2.8% and Paris-listed shares of NYSE Euronext dropped 4.7%.

The Stoxx Europe 600 index ended up 0.2% at 238.05.

The UK's FTSE 100 closed down 0.5% at 5331.60, Germany's DAX slipped 0.8% to 5948.94 and France's CAC-40 gained 0.7% at 3254.34.

Japanese and Taiwanese shares ended lower on lingering concerns over European economic troubles, while Australian stocks advanced on a set of upbeat earnings reports.

Chinese stocks declined on worries about monetary tightening, while Hong Kong shares overcame choppy afternoon trading to edge higher.

Japan's Nikkei Stock Average ended 0.6% lower at 9057.26, Taiwan's Taiex shed 0.7% at 7741.76 and the Shanghai Composite fell 0.3% to 2601.26.

Australia's S&P/ASX 200 index added 1.3% to 4303.9, Korea's Kospi advanced 0.7% to 1892.67 and India's Sensex also advanced 0.7%, to 16840.80.

Hong Kong's Hang Seng Index rose 0.4% to 20,289.03, though that was well off the day's high.

Commodities: Oil up, gold rises to new high
Crude futures trimmed some early gains but remained higher after an industry report showed US crude inventories rose more than expected in the latest week.

In New York, September light, sweet crude rose as high as $US89 a barrel, later falling to $87.85 a barrel, an increase of $1.20, or 1.4%. ICE October Brent crude was $US1.83, or 1.7%, higher at $US110.96 a barrel.

Gold settled at record highs as reports that Venezuela plans to nationalise its gold industry gave futures a late-afternoon boost.

The most actively traded contract, for December delivery gained $US8.80, or 0.5%, to settle at a record $US1793.80 an ounce in New York. The contract is still well below its intraday record of $US1817.60 set August 11.

Thinly traded August-delivery gold rallied $US8.80, or 0.5%, to settle at a record $US1791.20.

Currencies: Swiss franc falls against euro
The Swiss franc slid against the euro but held gains against the US dollar as Switzerland's central bank said it would further increase liquidity to drive down money-market interest rates and weaken the franc's exchange rate.

The announcement failed to put pressure on the currency—at least initially. Instead, the Swiss franc jumped versus its major rivals before losing ground against the euro during US trading hours.

The euro traded at 1.1503 francs, up about 0.5% from Tuesday and a recovery from session lows of 1.1219 francs. The US dollar changed hands at 0.7894 franc, off from 0.7960 franc late on Tuesday in New York.

The euro was at $US1.4451 compared with $US1.4408 late on Tuesday. The dollar was at ¥76.49 from ¥76.81, while the euro was at ¥110.54 from ¥110.68. The UK pound traded at $1.6565 from $1.6456.

Nevil Gibson
Thu, 18 Aug 2011
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Wall Street avoids second-day slump