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Stocks in U.S closed in negative territory in thin, shortened trading Friday as investors were reluctant to go long ahead of the weekend and amid ongoing worries over the euro zone.

By ·
28 Nov 2011

Stocks in U.S closed in negative territory in thin, shortened trading Friday as investors were reluctant to go long ahead of the weekend and amid ongoing worries over the euro zone.

The Dow finished down 22.57 points, or 0.23 percent, and the S&P500 was down 3.12 points, or 0.27 percent. The tech heavy Nasdaq also ended lower, logging a seventh consecutive decline, finishing down 18.57 points, or 0.75%.

In Europe, S&P downgraded Belgium one notch to AA from AA-plus, further underscoring worries over the euro zone debt contagion. Earlier, EU officials said euro zone member states were discussing dropping private sector involvement from the permanent bailout mechanism.

An Italian T-bill auction offered a fresh indication of investors' lack of confidence in the country's newly-appointed government and broader fears that the euro zone debt crisis cannot be contained. Yields shot up to new euro era highs.

This comes after a failed German bond auction earlier this week spooked markets and stoked fears that not even the euro zone's strongest performers are immune from the debt crisis.

With all that was going on, the world decided on Friday to rush into the currency of the most nominally indebted nation on earth, such that the US dollar index rose 0.8% to 79.66. The Aussie fell 0.3% to US$0.9697. Gold dropped another US$14.50 to US$1680.30/oz.

Base metals markets were mixed and little moved, while Brent crude dropped US$1.04 to US$106.40/bbl and West Texas fell US26c to US$96.77/bbl.

It will be a busy week of global economic data, but the focus will remain on Europe once again.

Thursday brings the monthly round of global manufacturing PMI data, as Australia, China, the eurozone, UK and US all post releases.

Ahead of Thursday, the US will see new home sales on Monday, the Case-Shiller and FHFA house price indices on Tuesday along with the Conference Board consumer confidence measure, and pending home sales. The Chicago PMI and the Fed Beige Book are released on Wednesday, as well as the monthly ADP private sector unemployment number. On Thursday it's chain store and vehicle sales and construction spending along with the manufacturing PMI, then on Friday it's non-farm payrolls.

There will be an estimate of the eurozone's November CPI released on Wednesday which will be closely watched by the ECB which makes a rate decision next week.

Australia sees new home sales on Tuesday and the RP Data-Rismark house price index on Wednesday along with private sector credit. Wednesday also brings the all-important September quarter private capital expenditure and expenditure intentions data, which is one of the most influential numbers for both economist expectations of Australia's September quarter GDP result and for ongoing forecasts. The RBA will also be paying close attention. On Thursday it's building approvals along with the manufacturing PMI.

On the local stock front, the end of November brings the end of the AGM season with one final avalanche before Thursday. Metcash (MTS) will release its interim result on Wednesday.


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