US & World Daily Markets Financial Briefing 21-12-2006

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This is the last World Daily Markets Bulletin to be sent by ADVFN until Tuesday 2nd January 2007, when they will resume as normal.

ADVFN would like to wish everyone a Merry Christmas and a Happy New Year.

US Stocks at a Glance

Stocks rise in early trading

NEW YORK - Stock prices moved higher, with the Dow Jones Industrial Average up six points in Thursday's early going -- building on Wednesday's record close.
   
The Nasdaq Composite Index is ahead four points and the Standard and Poor's 500 Stock Index is up two points.
   
After Wednesday's drought, investors have some economic news to mull during the session.
   
The government reports economic growth slowed to a two-percent rate in the third quarter, primarily because of the housing slump.
   
On the earnings front, General Mills is reporting profits that beat analysts' forecasts and is raising its outlook for the rest of the year.

Drug makers Merck & Co. and Vertex Pharmaceuticals Inc. said Thursday they started a mid-stage clinical trial, triggering a $25 million milestone payment to Vertex.
   
The companies started a trial for MK-0457, also known as VX-680, to treat patients with two specific types of leukemia, or cancer of the white blood cells.
   
Merck and Vertex began collaborating on cancer drugs in June 2004. Vertex booked revenue of $160.9 million in 2005.
   
The clinical trial is expected to enroll about 270 adult patients with leukemia.
  
Merck shares rose 12 cents to $43.42 on the New York Stock Exchange and Vertex shares climbed 55 cents to $38 in morning trading on the Nasdaq.

IRVINE, California - AT&T Inc said it has signed a two-year, 5 mln usd contract extension to provide telecoms services to BAX Global, a transport and logistics company.

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Dollar shrugs off downwardly revised GDP data

LONDON - The dollar remained steady against other major currencies, shrugging off data showing its third quarter GDP figure was revised down slightly.
   
The final estimate for third quarter growth in the US was revised to a yearly 2.0 pct rate from 2.2 pct due to weaker spending on health care than earlier estimated. At the same time, the Federal Reserve's preferred measure of inflation, the core PCE, remained unrevised at the high rate of 2.2 pct. Weekly jobless claims, published at the same time, came in at 315,000, not far from the 310,000 expected by analysts.
   
"US GDP data played little role as headline growth rates slowed slightly but price measures edged up," said Jamie Coleman at IFR Markets.    

The dollar, which had been creeping higher all day, nevertheless saw a small dip after the data, bringing it towards 1.317 against the euro. Although movements are limited by small -- and decreasing -- volumes ahead of the holiday season, economists said more data later today may yet affect price levels.
   
"The Philadelphia Fed (survey of economic activity) will probably be more important to the dollar than either the revised GDP or the jobless data," said David Bloom at HSBC.
   
The indicator, to be published at 3.00 pm, is expected to slow to 4.0 from 5.1 in the prior reading, reflecting a slowdown in the wider US economy.
   
Bloom at HSBC noted that positive sentiment continues to stick to the euro, with traders eager to buy on any dips against the dollar.
   
In the UK, the pound had been weakening slightly against the dollar since the morning, with trades testing resistance at the two-day low of 1.9580.
   
The US GDP data saw some knee-jerk bids for the pound, although movements have likewise remained small, analysts at IFR Markets said.
   
The only data left before markets close for Christmas holidays are UK mortgage statistics due tomorrow. Figures published in the past two weeks have consistently surprised to the upside, suggesting the Bank of England's two quarter point hikes this year have yet to affect a buoyant housing market.

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The European Markets at 13.00 GMT

London - Leading shares were lower midmorning as M&A fuelled falls in Vodafone and weakness in heavyweight miners offset hopes of a bid for Smith & Nephew, with largely as expected GDP data overlooked by investors. At 10.07 am, the FTSE 100 was down 7.1 points at 6,191.5, slipping further off the key 6,200 level, in contrast with the positive wider market.

Frankfurt - German shares were relatively flat in selective midday trade, with SAP boosted by its four-for-one stock split and ThyssenKrupp and MAN benefiting from M&A speculation, but news flow otherwise quiet ahead of the Christmas break.

At 12.34 pm, the DAX 30 index was 4.59 points or 0.07 pct lower at 6,582.32, after moving between a low of 6,563.52 and a high of 6,595.43 this session. The MDAX rose 6.82 points or 0.07 pct to 9,288.40, while the TecDAX dropped 1.19 points or 0.16 pct to 740.57.

Paris - Share prices were marginally higher in late morning trade as US futures pointed to a positive opening on Wall Street and as Suez rose after a report stated businessman Francois Pinault may bid 60 bln eur for the group. At 10.50 am the CAC- 40 index was up 8.08 points at 5,522.50. Volume was 900 mln eur.

Amsterdam - Shares were almost flat at midday with low-volume trade as investors were preparing for the Christmas holidays amid a lack of guiding local news, while Pharming rose amid M&A talk. At 12.52 pm, the AEX was flat at 495.60 after opening at 494.01 and reaching an earlier higher of 496.62.

Milan - Share prices were flat to lower at midday with a general lack of activity and with traders waiting for US data later today. At 12.25 pm, the Mibtel index fell 0.13 pct to 31,724 points and the S&P/Mib shed 0.14 pct at 41,259.

Madrid - Share prices were lower in quiet midday trade on profit-taking after recent gains, with Enagas and REE continuing to buckle under a run of downgrades. At 12.00 pm, the IBEX -35 index was down 21.9 points at 14,175.7, after trading in a range of 14,155-14,199, on turnover of 1.03 bln eur.

Stockholm - Shares in Stockholm were little changed in midday trade as sharp gains for Husqvarna, following its acquisition of Germany's Gardena, were offset by weakness among lead telecom and engineering stocks.  At 12.40 pm the OMX Stockholm index was up 0.22 pct at 369.83, and the OMX Stockholm 30 flat at 1,136.41. Turnover was 8.375 bln skr.

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Asian shares close mixed; Tokyo higher on yen weakness, easing of rate fears
 
HONG KONG - Shares across the Asia-Pacific region closed mixed, with Tokyo higher on buying in blue-chip exporters and yen weakness and as worries over the interest rate trend in Japan began to dissipate.
   
Most south east Asian markets were steady to higher following the slump sparked on Tuesday when Thailand announced capital controls, but the Thai market fell sharply today.
   
Tokyo's Nikkei 225 Stock Average closed up 36.79 points or 0.22 pct to 17,047.83, off a high of 17,109.17. The broader TOPIX index of all first-section issues climbed 4.29 points or 0.26 pct to 1,671.30, off a high of 1,676.20.
   
Analysts said investors are looking at the possibility that Japanese exporters may revise their profit forecasts upward as fears of a resumption in yen strength and higher funding costs subside. The market was buoyed by expectations of mergers and acquisitions but profit-taking in domestic demand-linked shares contained the upside, they added.
   
At 3.28 pm the Stock Exchange of Thailand (SET) composite index was down 16.28 points or 2.35 pct to 675.27 as foreign investors remained wary after the government's abrupt U-turn on capital control measures.
   
Singapore's Straits Times index had gained 3.45 points or 0.12 pct at 2,924.28, with dealers saying it was due for consolidation as it neared the 3,000 level, and Jakarta shares were up 13.956 points or 0.79 pct at 1,780.755. At 3.40 pm the Kuala Lumpur Composite Index was down 1.76 points at 1,074.54.
   
Australian shares closed down from yesterday's record highs as investors sold resource stocks after metal prices fell in overnight trading. Profit taking also weighed on the market while rises in banking stocks provided support.
   
The S&P/ASX 200 fell 24.3 points or 0.43 pct to finish at 5,583.5, from yesterday's record finish of 5,607.8. The low was 5,580.7 and the high 5,608.5.
   
Hong Kong shares were slightly higher in afternoon trade with buying of China stocks offsetting profit taking. At 3.28 pm the Hang Seng Index was up 18.03 points or 0.09 pct at 19,222.09.
   
In mainland China, A-shares in Shanghai and Shenzhen closed lower on profit-taking. The Shanghai A-share Index fell 31.97 points, to 2,463.34 and the Shenzhen A-share Index was down 7.27 points at 559.38.
   
Seoul shares closed lower, giving up their initial gains, as institutions locked in profits after the main board hit a seven-month high in early trade.
   
The market opened firmer despite Wall Street's retreat, as foreign investors sought out IT and financial stocks. However it lost ground in the absence of follow-through buying ahead of the holidays and major economic indicators next week. The KOSPI index closed down 5.79 points or 0.4 pct at 1,436.47, off a low of 1,434.47 and a high of 1,445.51.

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Copper slides further on rising stock levels, receding strike fears
 
LONDON - Copper continued its slide lower amid indications there are ample stocks of the metal and as fears of strikes at key producer Codelco receded into the background.
   
At 2.31 pm, LME copper for three-month delivery was down 155 usd at 6,380 usd/tonne.
   
Analysts pointed out the threat of strikes in Chile has been largely defused. "The last holdout was the biggest union at Codelco, which, late last night, voted to overwhelmingly accept the terms on the table, thus joining two other unions who ratified the contract earlier in the week," said Edward Meir at Man Financial.
   
This led to fresh selling today and some spill-over effect on other industrial metals. With the labour dispute now pretty much out of the equation, investors are once again focusing on the fundamental picture.
   
"Stocks are rising on the LME, growth in the US seems to be slowing, and while Chinese copper import demand has picked up slightly last month, it has yet to make a dent in local stockpiles or lead to higher prices," Meir added.
   
Robin Bhar at UBS noted shorter dated contracts are bearing the brunt of copper's falls. "The front-end has come under pressure from a variety of factors: a deterioration in the macro-environment, rising stocks and a perception that supplies are catching up closing the market's deficit," he said.
   
Long-dated copper, on the other hand, has continued to out-perform on buying support from hedge funds and investors, he said.
   
There is a growing belief that the longer term outlook is rosy, based on robust consumption growth from the developing world and supply constraints, Bhar said.
   
Elsewhere, LME three-month aluminium was off 12.50 usd at 2,757 usd. In other metals, LME nickel for three-month delivery was down 975 usd at 32,000, zinc was down 62.50 usd at 4,177 usd, and lead fell 20 usd to 1,590 usd. Tin was flat at 11,000 usd.

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