US markets were mixed yesterday after stronger than expected economic data was offset by a new trading high for oil. ADP Employer Services released private sector payroll figures, which is seen as a precursor to today's monthly government jobs data. This showed that the private sector added 40,000 workers to payrolls in December, topping forecasts for an increase of 33,000. Also, the government reported factory orders rising 1.5% in November, more than the 1% rise expected by economists.
The Dow Jones added 12.8 points to close at 13,056.7, the S&P 500 was unchanged at 1,447.15. The Nasdaq slipped 6.95 points to finish at 2,602.68.
In corporate news, Walgreen slumped $2.28 to $35.06 - its lowest level since August 2004. The drugstore chain said generic drugs cut December pharmacy sales at stores open at least a year. Rite Aid also went lower following weaker same store sales.
General Motors was the second biggest faller on the Dow, losing 2% to close at $23.92. GM's US sales of cars and light trucks dropped 4.4% in December from a year earlier. Ford Motor dropped 2.3% after reporting a 9% decline in sales last month.
Manufacturers were buoyed by the factory orders data from the government. United Technologies was the top weighted gainer on the Dow, adding 1.4% to close at $76.28.
US light crude oil for February finished the session $0.44 lower at $99.18 a barrel, having earlier hit a trading higher above $100 a barrel. Exxon Mobil rose $0.32 to $93.83 while Chevron Corp advanced $1.15 to $94.61.
COMEX gold for February delivery rose $9.10 to settle at $869.10 an ounce.
Treasury prices went higher, sending the yield on the 10 year note down to 3.89% from 3.91% late Wednesday.
The Nikkei average fell 4 percent today to its lowest close in 17 months as investors dumped across the board on concerns a stronger yen, higher oil prices and a shaky US economy would dent corporate profits. High tech shares and auto makers such as Sony Corp were among the hardest hit, with the yen trading near a five week high on the dollar and a weak set of economic data from the US sparking jitters over a key market for Japanese exports. The half day session following a week long holiday for Japanese financial markets during which the DJIA tumbled more than 2 percent and the price of crude oil topped $100 for the first time, threatening the Japanese economy. The Nikkei closed 616.4 points lower at 14691.4. Nissan Motor closed 9.2 percent to close at Y1117 and Mazda Motor closed 7.7 percent lower at Y515. Sony slid 6.6 percent to Y5790 and Canon Inc was 5 percent lower. Hitachi was 4.7 percent lower at 4.7 percent to Y794. Tokyo Electron fell 7.1 percent to Y6370 becoming one of the biggest drags on the Nikkei 225, while Advantest Corp fell 6.76 percent to Y2965.
The Hang Seng is currently 637.4 points higher at 27,524.7, buoyed by commodity shares after gold and oil prices rose to records. PetroChina Co surged the most in almost 6 weeks. Zijin Mining Group, owner of China's biggest gold mine, jumped after Goldman Sachs & Co raised its share price target.
The London market staged a late turnaround today after positive US economic data helped offset hefty falls among UK retailers. The FTSE 100 Index closed 62.7 points higher at 6479.4 after spending most of the day in negative territory.
DSG warned that annual profits would be up to £50m lower than expected after PC World bore the brunt of a spending slowdown overshadowed the session's trading, fuelling concerns over the Christmas trading period for the entire retail sector. Shares in FTSE 250 firm DSG tumbled more than 27%. The company - recently demoted from the top flight - fell 29.25p to 78p, while fellow FTSE 250 stock Kesa Electricals fell 8% or 19.5p to 215.5p.
Next was the biggest faller in the FTSE 100 despite predicting full-year profits "slightly ahead" of City forecasts. While the company's financial management has been responsible for the stronger bottom line, the shares still fell nearly 7% to 1552p, as the company warned it was unlikely to see like-for-like sales growth from its UK stores in 2008. Kingfisher was another heavy faller, despite depending less on Christmas trading. Shares were 5% lower, down 7.2p at 139.5p. Home Retail Group was caught in the sell-off with a fall of nearly 6% to 301.25p.
Elsewhere, energy companies were stronger after the fresh record for crude oil prices. Tullow Oil was the leading Footsie riser up 6% to 681p. BP was close behind, up 19p to 635.5p, while Royal Dutch Shell added 55p to 2152p. International Power also moved 12.75p higher to 461.25p while Scottish & Southern Energy advanced 26p to 1657p. Premier Oil meanwhile was one of the top risers in the FTSE 250 with gains of 62p to 1370p.
Takeover speculation over mortgage lender
Alliance & Leicester faded as the session wore on. Shares was nearly 2% higher earlier in the day - following a 16% gain yesterday - but later fell back to close up 4p at 758p.
Economics
UK PMI services (Dc) 09.30 gmt
This survey is extremely important to Bank of England policymakers. Weakness in this survey last month underpinned the December interest rate cut. It is thought that another decline of the same magnitude is unlikely, but if it were to fall sharply, this would increase the chance of a rate cut at the January 10th MPC meeting, rather than at the February meeting which is HSBC's current forecast.
UK Consumer credit and mortgages (Nov) 09.30 gmt
The exact extent to which banks will tighten credit is the key issue, so this data will provide key. Mortgage approvals fell sharply last month so some stabilisation this month seems likely. The surprise last month was an increase in consumer credit (unsecured loans). As interest rates, on unsecured credit are so much less favourable, this may suggest lenders are not allowing homeowners to leverage any further, which may reflect a deterioration in perceived collateral values.
US Non farm payrolls (Dec) 13.30 gmt
Payrolls are seen rising by 70k. The unemployment rate may remain at 4.7 percent. Health care, foods services, and government continue to be the main sectors for job growth, while education payrolls have slowed recently. Construction, manufacturing and finance are expected to decline, while retail trade is also vulnerable.
US ISM manufacturing (Dec) 15.00 gmt
New orders in this survey have decelerated, dropping to 51.1 last month. The headline index is expected to have fallen to 53.
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