While you were sleeping: Stocks, metals, oil and dollar fall

Monday 5th October 2009

Stocks fell in the US and Europe, copper and oil declined and the US dollar weakened after figures showed American employers cut more jobs that expected last month, while the unemployment rate climbed to the highest since 1983.

The jobs data added to concern the recovery from recession will be gradual. Employers in the US eliminated 263,000 jobs in September, according to the Labor Department, beating estimates of 180,000 job cuts. The jobless rate edged up to 9.8%.

The jobs data “is a sobering reminder that progress comes in fits and starts -- and that we're going to need to grind out this recovery step by step," President Barack Obama said at a media conference.

The pace of job losses has slowed from earlier in the year though the total number of Americans out of work has soared to about 15 million since the start of the recession.

Commerce Department figures showed US factory orders unexpectedly fell in August, reflecting weak demand for aircraft, construction machinery and electric equipment.

Orders declined 0.8%, or a gain of 0.4% excluding transport items, according to the department.

Orders for durable goods fell 2.6% and orders for transportation equipment fell 9.1%.

The Dow Jones Industrial Average fell 0.2% to 9487.67 on Friday and the Standard & Poor’s 500 shed 0.5% to 1025.21. The Nasdaq Composite fell 0.5% to 2048.11.

General Electric led the Dow lower, falling 3.8% to US$15.36. Cisco Systems fell 1.7% to $22.67 after announcing a deal to acquire Norwegian videoconferencing company Tandberg for US$3 billion.

Exxon Mobil Corp. slipped 1% to US$66.58 and Chevron Corp. dropped 1% to US$68.14 as the price of crude oil fell.

The New York Times was the biggest decliner of the S&P 500, falling 5.6% to US$7.32.

In Europe, the Dow Jones Stoxx 600 declined 1.9% to 234.10. Among regional benchmarks, the UK’s FTSE 100 fell 1.2% to 4988.70, Germany’s DAX 30 shed 1.6% to 5467.90 and France’s CAC 40 fell 1.9% to 3649.9.

Lenders paced the decline. BNP Paribas fell 3.3%, Deutsche Bank dropped 2.3% and Royal Bank of Scotland fell 7.7%. Lloyds Banking Group slid 4.5%.

Vedanta Resources Plc fell 3.6%, leading mining companies lower, as prices of resources fell. BHP Billiton slipped 1%. Xstrata Plc fell 2% after UK regulators said it must make a formal offer for rival Anglo American by Oct. 20 or lose the right to bid until April next year. BP Plc fell 1.1% as crude oil declined.

OMV, the Australia-based oil and gas company, fell 4.3% after Reuters reported it may issue 1 billion euros of shares to help fund the purchase of a controlling stake in Turkish fuel retailer Petrol Ofisi. OMV already owns 42% and in talks with majority holder.

Copper fell to a two-month low after the US non-farm payrolls data stoked concern growth in demand for the metal will slow.

Copper futures for December delivery fell 2% to US$2.6815 a pound on the New York Mercantile Exchange.

Crude oil had its biggest decline in a week after the jobs and factory orders data.

Crude oil for November delivery fell 1.2% to US $69.95 on the New York Mercantile Exchange.

Gold edged up above US$1,000 an ounce as the US dollar weakened on speculation gloomier economic data will keep US interest rates near zero for longer.

Gold for December delivery rose US$3.60 to US$1,004.30 an ounce in New York.

The US Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.2% to 77.05 on Friday in New York.

The greenback weakened against the euro on speculation interest rates will remain near zero for longer because the US economic recovery will be slow.

The euro rose 0.3% to $1.4569 and strengthened 0.5% to 130.87. The dollar edged up 0.2% to 89.70 yen.

US Treasury Secretary Timothy Geithner said a strong currency is “very important” for the US.

He told reporters after a meeting of Group of Seven leaders in Istanbul that the US will do everything necessary to maintain confidence in the currency.

Japanese Finance Minister Hirohisa Fujii told reporters his government will intervene in the foreign exchange market if the yen “moves in a biased direction.”

Businesswire.co.nz

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