Friday, November 24, 2006

Stocks Slip as Dollar Falls

News Article
November 24, 2006

BusinessWeek Logo

Stocks Slip as Dollar Falls

The greenback slid to its weakest level vs. the euro since May 2005. Retailers were also in focus on the Black Friday shopping day

Stocks finished modestly lower Friday, recovering from initial lows in a shortened trading session after the Thanksgiving holiday. A decline in the dollar to its weakest level against the euro since May 2005 fanned inflation worries, says Standard & Poor's Equity Research.

On Friday, the Dow Jones industrial average fell 46.78 points, or 0.38%, to 12,280.17. The broader Standard & Poor's 500 index dropped 5.14 points, or 0.37%, to 1,400.95. The tech-heavy Nasdaq composite slipped 5.72 points, or 0.23%, to 2,460.26.

The plunge in the dollar was in focus Friday amid a light calendar for economic and corporate news. The greenback's weakness reflects a hawkish stance from the European Central Bank, uncertainty over U.S. economic growth prospects, and speculation of currency diversification in China, says S&P.

The spotlight was also on retailers on the crucial Black Friday shopping day. Best Buy (BBY) and Wal-Mart (WMT) were among store chains reportedly offering aggressive discounts.

Meanwhile, Sony (SNE) was slightly lower as the electronics manufacturer said it discovered a defect in some of its Cyber-Shot digital cameras. The company offered to repair the cameras for free.

Elsewhere, Advanced Semiconductor Engineering (ASX) was sharply higher after the Taiwan-based chip company said it may get an offer worth $5.64 billion from an investor consortium led by Carlyle Group.

Another semiconductor company, Veeco Instruments (VECO), said CEO Edward Braun plans to move from his current role to position of chairman during 2007.

After a few quiet days, the economic calendar picks up again next week. Key data releases are set to include October existing and new home sales, the Institute for Supply Management's manufacturing index, personal income, durable goods orders, and auto sales. A revised reading on third-quarter economic growth, the Federal Reserve's Beige Book, and Chicago PMI will also be on tap.

In the energy markets, January West Texas Intermediate crude futures rose 55 cents to $59.79 barrel.
European markets finished lower. In London, the FTSE-100 index fell 11.9 points, or 0.19%, to 6,128.1. Germany's DAX index dropped 63.29 points, or 0.98%, to 6,411.96. In Paris, the CAC 40 index was down 35.4 points, or 0.65%, to 5,389.46.

Asian markets ended mixed. In Japan, the Nikkei 225 index slid 179.63 points, or 1.13%, to 15,734.6. In Hong Kong, the Hang Seng index edged down 5.02 points, or 0.03%, to 19,260.3. Korea's Kospi index advanced 2.5 points, or 0.18%, to 1,421.73.

Treasury Market
Treasury yields ticked lower ahead of a shortened session with little on the docket. The 10-year note rose in price to 100-20/32 for a yield of 4.55%, while the 30-year bond climbed to 97-30/32 for a yield of 4.63%.

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