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Stocks in the U.S recouped some of their losses in a volatile trading session Friday but still finished lower as investors digested a handful of headlines from the euro zone and ahead of a key confidence vote in Greece.

By ·
7 Nov 2011

Stocks in the U.S recouped some of their losses in a volatile trading session Friday but still finished lower as investors digested a handful of headlines from the euro zone and ahead of a key confidence vote in Greece.

The Dow Jones Industrial Average finished down 61.23 points, or 0.51 percent, at 11,983.24. The S&P500 and the Nasdaq also closed lower, finishing at 1,253.23 and 2,686.15 respectively.

Stocks were under pressure all day following comments from German Chancellor Angela Merkel, who said few countries in the G20 had committed to participating in Europe's bailout fund.

Greece continued to dominate headlines as Greek Prime Minister George Papandreou faced a confidence vote in Parliament that could determine whether his country will stay in the euro zone or leave the single currency and default on its debts.

Meanwhile, Greece's finance ministry said the nation has dropped its plans to hold a referendum, which had threatened to plunge the debt-ridden country into a crisis.

Movements in other markets were not substantial on Friday with the possible exception of oil. Brent crude rose another US$1.24 to US$111.97/bbl while West Texas added only US19c to US$94.26/bbl. Nickel rose 2% on Friday on lower inventories, while all other metals were mixed on minimal moves. The US dollar index ended the session up 0.3% to 76.98, gold fell US$8.10 to US$1755.40/oz and the Aussie has slipped slightly to US$1.0393.

On the economic front, U.S. employment rose 80,000 in October, which was less than a gain of 95,000 that economists had expected, but the jobless rate slipped to a six month low of 9 percent. In addition, an upward revision to the prior months' job gains pointed to underlying strength in the jobs market.

It will be a quieter week for economic data in the US this week. The highlights will be wholesale trade on Wednesday, the monthly trade balance and Treasury budget on Thursday, and the fortnightly consumer sentiment report on Friday. The Treasury will auction three and ten-year notes on Tuesday and Wednesday and thirty-year bonds on Thursday.

China will provide a data dump on Wednesday of its inflation, industrial production and retail sales numbers followed by a trade balance result on Thursday. The world will be relieved if the Chinese CPI shows further slowing of inflation growth.

Australian bank economists will release their reports this week, with ANZ kicking off the week with the ANZ job ads series today, the NAB business confidence report tomorrow, and the Westpac consumer confidence report on Wednesday. Today also sees the construction PMI, tomorrow the trade balance, and Wednesday housing finance and investment lending. On Thursday economists expect to see the unemployment rate tick up to 5.3% from last month's 5.2%.

November is the peak month for Australian corporate AGMs and there is a parade of them this week. Orica (ORI) will post its full-year result today, Westfield (WDC) will provide a quarterly update tomorrow, and on Wednesday CSR (CSR) and SP Ausnet (SPN) both post interim results. Santos (STO) will hold an Investor Seminar on Thursday.


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