By Greg Peel

The Dow fell 17 points last night or 0.2% while the S&P lost 0.4% to 1293 and the Nasdaq lost 0.3%.

After several sessions featuring large moves, first to the downside and then to the up, Wall Street decided to take a break last night. There was news to digest but nothing much to change the current situation. Volume was anaemic.

In Japan, power has now been restored to all six reactors and some lights have come back on, providing hope that cooling systems can be restarted within a matter of days. Some reactors are still running very high temperatures but the crisis appears to be quietly easing. The world has begun to concentrate less on a nuclear apocalypse and more on the impact and timing of Japan's recession-then-recovery.

Japan supplies 20% of the world's computer chips and loss of production is being felt across the globe. Apple is particularly affected while General Motors is suffering from lack of Japanese-produced parts. GM will be ruing a missed opportunity as Toyota factories remain off-line, as do many Sony factories.

At the forefront of headlines at present is Libya, where suggestions are that the coalition forces are suffering from too many chiefs. The fear here is that what was meant to be a swift solution may become a new Iraq. Libya's oil production future is unknown.

Meanwhile protests continue in Syria, and in Yemen a group of generals has defected to join protesters, leading the president to declare he will step down but not until the end of the year.

Over in Europe, a big jump in the British CPI has traders anticipating the first post-GFC rate rise from the Bank of England, while rumours spread that an Irish bank had failed to make an interest payment. This was soon found to be untrue, but not beyond the realms in the future. In Portugal the opposition has indicated it will vote against the latest austerity package brought by the minority government, implying a forced election which will likely see that government defeated, as was the case in Ireland. Traders now consider it only a matter of time before Portugal joins Greece and Ireland in requiring a bail-out.

So on all of the above, Brent crude rose US99c to US$115.95 last night, West Texas jumped US$1.67 to US$104.00/bbl, the pound was stronger and the euro was weaker. The yen rose slightly against the US dollar despite the intervention threat and all up the US dollar index was a tad higher at 75.46. The Aussie nevertheless gained another 0.6% to US$1.0114.

Gold was steady at US$1426.40/oz while silver rose only 0.8%, which is as good as steady for the volatile metal. Base metals were around 1% stronger in London with the exception of nickel, which fell 1%.

On the US economic front, the FHFA house price index, which measures the price of houses on sponsored (Fannie/Freddie) mortgages, fell 0.3% in January to mark a third straight decline. The Richmond Fed manufacturing index fell to 20 from 25, indicating a slowing of the pace of growth.

Is the US recovery rolling over once more? This is the question Wall Street needs to deal with on the home front ahead of the scheduled end of QE2 in June.

The SPI Overnight fell 9 points or 0.2%.

Australian reporters were surprised yesterday when the local market closed as good as flat despite a big up-move on Wall Street on Monday night. But Australia had a big up-move on the Friday, and last night Wall Street mimicked yesterday's local session. Who's following who?

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