Broadgate: Market News 12/4
12 April 2012
An encouraging start to earnings season helped stocks rebound on Wednesday from five days of losses that pushed the S&P 500 below a key technical level.
On Tuesday, the S&P 500 closed below its 50-day moving average for the first time since December, and on Wednesday the level provided technical resistance to its rebound. The S&P’s 50-day moving average is now near 1,373, close to Wednesday’s session high.
Google Inc, JPMorgan Chase & Co and Wells Fargo & Co are among the companies slated to report later this week.
The U.S. economy kept growing moderately in the late winter months, although rising gas prices were beginning to worry producers and consumers across the country, the Federal Reserve said in its latest “Beige Book” summary of national activity. This assessment had little impact on equities.
Oil rose for a second day in New York after fuel stockpiles declined more than expected in the U.S., the world’s biggest gasoline consumer.
Futures climbed as much as 0.4 percent after closing yesterday at the highest price in almost a week. U.S. gasoline inventories fell 4.3 million barrels, the Department of Energy said. Supplies were projected to drop 1.38 million barrels, according to a Bloomberg News survey. The decrease countered figures that showed imports and demand for the motor fuel fell. Gasoline prices at the pump have slid five straight days, the longest streak since December.
Oil prices have gained this year on concern that tension with Iran will disrupt global supplies. France remains “open” to the possibility of a release of crude stockpiles by International Energy Agency member countries to keep prices in check, Industry Minister Eric Besson said yesterday.
The Australian dollar shot up more than half a percent against the dollar and the yen after unexpectedly strong local employment figures eased worries the Australian economy could suffer from slower global growth.
Traders took profits on the Japanese unit which gained the previous session as riskier assets remained pressured with the euro zone debt woes back in focus and Spanish bond yields still close to a four-month high and the crucial six percent level.
Gold inched up on Thursday, tracking modest gains in the euro as worries about Spain’s debt restructuring eased after a European Central Bank official signaled the bank was ready to intervene in debt markets.
Fear about Spain’s debt problem somewhat eased as ECB Executive Board member Benoit Coeure said the scale of market pressure on Spain is not justified given the reforms being undertaken by its government and the European Central Bank still has its bond-buying program as an option.
But worries persisted about the euro zone’s peripheral economies. Italy’s one-year borrowing costs rose for the first time since November at a sale of short-term bills on Wednesday, ahead of a major auction of three-year bonds later in the day.
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