In US economic data, chain store sales fell by 0.6 per cent in the latest week but the annual growth rate of sales rose from 4.2 per cent to 4.8 per cent. Construction spending rose 1.1 per cent in October, ahead of expectations of a 0.6 per cent gain. The ISM New York index rose from 657.2 to 663.4 in November.
European shares generally rose on Tuesday as energy stocks responded to the higher oil prices recorded on Monday. Shares in BP rose 4.7 per cent. The FTSEurofirst 300 index rose by 0.5 per cent and the UK FTSE rose by 1.3 per cent. But the German Dax lost 0.3 per cent to 9,934 points after hitting 10,000 points in the session and falling just short of record highs. In London trade, shares in BHP Billiton rose by 2.2 per cent while Rio Tinto gained 0.7 per cent per cent.
US sharemarkets gradually trended higher over Tuesday's session boosted by corporate deals. Cypress Semiconductor agreed to buy Spansion Inc in a deal valued at about $4 billion. Otsuka Pharmaceutical Co Ltd will buy Avanir Pharmaceuticals for about $3.5bn. At the close of trade, the Dow Jones was up by almost 103 points or 0.6 per cent to record highs. The S&P 500 index was up by 0.6 per cent to record highs while the Nasdaq was higher by 28 points or 0.6 per cent.
US treasuries fell on Tuesday (yields higher) with traders lightening holdings in response to a number of current and expected corporate bond deals, including a five-part senior unsecured bond offering from Amazon. US two-year yields rose by 3 points to 0.536 per cent while US 10-year yields rose by 4 points to 2.28 per cent.
Major currencies were weaker against the greenback in European and US trade on Tuesday. The Euro fell from highs near $US1.2470 to near $US1.2380 and was around the lows in late US trade. The Aussie dollar fell from highs near US85.40c to around US84.35c and was around US84.45c in late US trade. And the Japanese yen eased from 118.37 yen per US dollar to ¥119.28 and was near ¥119.23 in late US trade.
World oil prices retreated on Tuesday, giving back some of the previous day's solid gains. A stronger US dollar acted to put downward pressure on commodity prices. Brent crude fell by $US2.00 or 2.8 per cent to $US70.54 a barrel. The US Nymex crude price fell by $US2.12 or 3.1 per cent to $US66.88 a barrel.
Base metal prices fell by up to 3.0 per cent on the London Metal Exchange on Tuesday with aluminium leading the declines. But tin rose 0.4 per cent and nickel rose 0.2 per cent. Gold retreated on Tuesday with Comex gold futures lower by $US18.70 an ounce or 1.5 per cent to $US1,199.40 per ounce. Iron ore fell by US90c to $US69.70 a tonne on Tuesday.
Ahead: In Australia, the National Accounts are released (includes economic growth). In China and the US, reports on the services sector are released. And in the US, the Beige Book is issued together with the ADP employment report, weekly housing finance data and productivity figures.
Craig James is chief economist at CommSec.