10/03/10

FTSE 100	5602.30, -4.42	Dow	10564.38, +11.86
FTSE 250	9774.68, -11.71	Nasdaq	2340.68, +8.47
FTSE All Share	2862.26, -2.21	S&P 500	1140.44, +1.94
Nikkei	10563.92, -3.73	Hang Seng	21208.29, +0.74
Oil (Crude)	$81.49, -$0.38	Gold	$1122.90, -$1.70
Base Rate	0.5%	10 Yr Gilt	4.06%
£/$	1.492	Euro/Gbp	0.909

Markets

US indices made small gains yesterday, one year to the day after their worst close in 12 years. Since that day the Dow has gained 61.2%, the S&P 500 68% and the Nasdaq 84%. However, the pace of the advance has slowed this year, as investors have gone from pricing in an economic recovery to waiting for evidence that the recovery has legs. Yesterday, the Dow Jones rose 11.86 points to 10,564.38, the S&P 500 added 1.94 points to 1,140.44 and the Nasdaq gained 8.47 points to 2,340.68. Money flowed out of commodity related stocks as metal prices fell, and into the telecom and transportation sectors. Cisco Systems lifted telecoms after unveiling a higher capacity router that AT&T, the biggest US telecom company, said it had successfully tested. Airlines were boosted after major US carriers said they would continue to explore new fees and cost-cutting measures to enhance profitability, while a report showed business travel picked up. Elsewhere in the transportation sector, Morgan Stanley reiterated its upbeat view on railroads.

The Nikkei edged 3.73 points lower to 10,563.92 this morning. Renewed concerns over deflation, following a report from the central bank, sent investors to the sidelines. Elsewhere a gauge of commodity-transport fees dropped hurting shares in the sector. The Hang Seng rose 0.74 points to 21,208.29 today. A drop among shipping lines and developers countered better than expected earnings for MTR Corp.

The FTSE 100 slipped 4.42 points to close at 5,602.30 yesterday. Liberty International pushed property companies lower after reporting net asset value that missed analysts’ estimates. Imperial Tobacco lost 2.5% after UBS lowered its recommendation for the cigarette maker citing a 41 percent rally in the shares over the past 12 months. Antofagasta gained 1.1%, even though it reported a drop in full year net income to $667.7 million. However, the copper producer said it is seeking a mining license in Pakistan that may rival its largest project following “very good” talks with the head of the provincial government. This morning the blue chip index falls 7.66 points to 5,594.64.

Economics

UK Industrial production (Jan) 10:30 GMT

Like the retail spending data, analysts expect adverse weather conditions in the UK in January to have led to a sharp decline in manufacturing production that will more than offset the rise in gas and electricity production. Our analysis shows that in previous periods of snow there has been a sizeable, but temporary, drop in activity.

US Wholesale inventories (Jan) 15:00 GMT/ 10:00 EST

The monthly inventory figures are likely to get more attention than usual given the strong influence that they are having on the headline GDP readings and estimates. Wholesale inventories account for around 30% of total business inventories, and analysts look for a flat reading in January.

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