Australian Stock Market - Morning 2/23/2011
US consumer confidence rose from 64.8 to 70.4 in February - marking the highest reading in three years and well ahead of analyst expectations. The expectations index rose to 95.1 its highest level since December 2006. The S&P/Case Shiller home price composite index of 20 metropolitan areas declined 0.4pct in December - marking the sixth consecutive monthly decline. For the year prices fell 2.4pct.
European shares fell on Tuesday, extending the previous session´s sharp losses. The escalating tensions in Libya, drove crude oil prices higher and added to growing concerns about the impact on global growth. The FTSEurofirst index fell by 0.5pct, the German Dax was lower by 0.1pct and the UK FTSE eased 0.3pct.
US sharemarkets fell sharply on Tuesday as US investors got their first opportunity to react to the unrest in oil exporter Libya. The surge in the oil price hurt airline stocks with the Arca airline index down 5.3pct. The CBOE Volatility index rose by 30pct to 21.3. Shares of Wal-Mart fell over 3pct after posting its seven straight quarterly drop in sales. At the close of trade, the Dow Jones index was lower 178pts or 1.4pct with the S&P 500 lower by 2.1pct and the Nasdaq fell by 77pts or 2.7pct.
US treasuries rallied on Tuesday (yields lower) as the demand for safe-haven assets saw investors switch to bonds. US treasury department sold US$35bn in 2yr bonds which found healthy demand. US 2yr yields eased 7pts to 0.70pct while US 10yr yields were lower by 12pts to 3.47pct.
The US dollar strengthened against major currencies, as traders remained risk averse given the escalating violence in the Middle East. The Euro fell to early lows near US$1.3535 before rising to highs around US$1.3695, and headed into the US close near US$1.3655. The Aussie dollar fell from US100.40c to US99.70c, and was near US99.80c in late US trade. And the Japanese yen lifted from 83.35 yen per US dollar to around JPY82.60, and was near JPY82.75 in late US trade.
US crude oil prices rallied on Tuesday as the revolt in Libya raised concerns that the unrest could spread to other oil producing nations. Around 8pct of Libya´s 1.6 million barrels per day of oil production has been shutdown. The March crude contract expires at the end of the session. The Nymex crude oil contract rose by US$7.37 or 8.5pct to US$93.57 a barrel. And London Brent crude rose by US4 cents to US$105.78 a barrel.
Base metal prices fell on the London Metal Exchange on Tuesday, as the unrest in North Africa hurt risk appetite. Also a stronger US dollar added to the weakness. Metals fell between 2.0-4.2pct. And the gold price rallied in response to Middle East tensions. The Comex gold futures price was up by US$12.50 an ounce to US$1,401.10.
Ahead: In Australia, wage price data is scheduled. AGL, Coca-Cola Amatil, Worley Parsons, Graincorp, Suncorp, Asciano and Perpetual are amongst those reporting earnings. In the US, existing home sales are released.
[Get this delivered to your inbox for FREE. Subscribe to our daily Markets Newsletter.]