Australian Stock Market Report – Morning December 3, 2014

Retailer — Shoppers look over items on sale at a Macy's store in New York, November 23, 2012. Reuters/Keith Bedford

Latest news

* In US economic data, chain store sales fell by 0.6% in the latest week but the annual growth rate of sales rose from 4.2% to 4.8%. Construction spending rose 1.1% in October, ahead of expectations for a 0.6% gain. And the ISM New York index rose from 657.2 to 663.4 in November.

* European shares generally rose on Tuesday as energy stocks responded to the higher oil prices recorded on Monday. Shares in BP rose 4.7%. The FTSEurofirst 300 index rose by 0.5% and the UK FTSE rose by 1.3%. But the German Dax lost 0.3% to 9,934 points after hitting 10,000 points in the session and falling just short of record highs. In London trade shares in BHP Billiton rose by 2.2% while Rio Tinto gained 0.7%.

* US sharemarkets gradually trended higher over Tuesday's session boosted by corporate deals. Cypress Semiconductor agreed to buy Spansion Inc in a deal valued at about $4 billion. And Otsuka

Pharmaceutical Co Ltd will buy Avanir Pharmaceuticals for about $3.5 billion. At the close of trade, the Dow Jones was up by almost 103 points or 0.6% to record highs. The S&P 500 index was up by 0.6% to record highs while the Nasdaq was higher by 28 points or 0.6%.

* US treasuries fell on Tuesday (yields higher) with traders lightening holdings in response to a number of current and expected corporate bond deals, including a five-part senior unsecured bond offering from Amazon. US 2 year yields rose by 4 points to 0.54% while US 10 year yields rose by 6 points to 2.294%.

* Major currencies were weaker against the greenback in European and US trade on Tuesday. The Euro fell from highs near US$1.2470 to near US$1.2375 and was around the lows in late US trade. The Aussie dollar fell from highs near US85.40c to around US84.35c and was around US84.45c in late US trade. And the Japanese yen eased from 118.37 yen per US dollar to JPY119.28 and was near JPY119.23 in late US trade.

* World oil prices retreated on Tuesday, giving back some of the previous day's solid gains. A stronger US dollar acted to put downward pressure on commodity prices. Brent crude fell by US$2.00 or 2.8% to US$70.54 a barrel. The US Nymex crude price fell by US$2.12 or 3.1% to US$66.88 a barrel.

* Base metal prices fell by up to 3.0% on the London Metal Exchange on Tuesday with aluminium leading the declines. But tin rose 0.4% and nickel rose 0.2%. Gold retreated on Tuesday with Comex gold futures lower by US$18.70 an ounce or 1.5% to US$1,199.40 per ounce. Iron ore fell by US90c to US$69.70 a tonne on Tuesday.

Ahead: In Australia, the National Accounts is released (includes economic growth). In China and the US reports on the services sector are released. And in the US the Beige Book is issued together with the ADP employment report, weekly housing finance data and productivity figures.

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