While you were sleeping: Dubai relief, Exxon expands

Tuesday 15th December 2009

Shares were higher in Europe and on Wall Street amid relief that Dubai’s debt woes appeared to be checked and news that Exxon Mobil will pay US$41 billion in stock and debt for gas producer XTO Energy.

At midday, the Dow Jones Industrial Average was up 0.26% to 10,499.24, the Standard & Poor’s 500 was up 0.57% to 1112.71 and the Nasdaq advanced 0.69% to 2205.35.

Among the stocks posting gains were XTO Energy, Visa, Sun Microsystems and Philip Morris. Shares in Citigroup fell after it detailed plans to sell stock to repay the U.S. government’s bail-out funds.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ fell 2.78% to 20.99.

In Europe, the Dow Jones Stoxx 600 Index rose 0.7% to 246.92. The FTSE 100 Index closed up 1.02% at 5315.34, Germany’s DAX rose 0.8% to 5802.26 and France’s CAC 40 increased 0.7% to 3830.44.

HSBC Holdings, Standard Chartered, Deutsche Bank gained after Abu Dhabi stepped in to help Dubai real estate developer Nakheel meet US$4.1 billion of debt payments.

Shares in HSBC rose 2% and those in Deutsche Bank were up 4.1% after it forecast a potential pretax profit of 10 billion euros in 2011.

Higher industrial metals prices bolstered shares of Lonmin, Xstrata and Norsk Hydro. The Reuters/Jefferies CRB Index, which tracks 19 raw materials, rose 0.92% to 273.34.

Aluminum surged to more than US$2300 a tonne to hit a fresh 14-month high. Benchmark copper for three-months delivery on the London Metal Exchange traded at US$6882 a tonne at 1037 GMT from a close of US$6835 on Friday. Copper futures rose 0.5% to US$3.15 a pound in New York.

In other commodities, gold edged higher and oil fell for a ninth session.

Spot gold was bid at US$1122.55 an ounce at 1021 GMT, against US$1113.85 late in New York on Friday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange rose US$3.70 to US$1123.60 an ounce.

Oil has been sliding because of concern about global demand for the commodity and high inventories in the U.S.

Crude for January delivery dropped 31 cents to US$69.56 a barrel by 1442 GMT (9:42 a.m. EST), after falling as low as US$68.59 earlier in the session, the weakest since October 5. Brent crude was up 10 cents at US$71.98.

Ministers from the Organisation of the Petroleum Exporting Countries say the group is likely to hold its output targets steady at a December 22 meeting.

Analysts who watch past price moves for future direction have been saying a move below US$70 for U.S. crude could trigger further losses since there is little strong technical support until around US$65 a barrel, according to Reuters.

The euro gained 0.2% to US$1.4649 at 11:30 a.m. in New York, from US$1.4615 on December 11, when it fell to US$1.4586, the lowest level since October 5. The euro decreased 0.4% to 129.68 yen, from 130.24 at the end of last week. The dollar dropped 0.7% to 88.52 yen, from 89.10.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.32% to 76.32.

The yield on the 10-year U.S. Treasury was flat at 3.55% at 11:21 a.m. in New York, according to BGCantor Market Data. Investors are waiting for comments out of this week's Federal Reserve policy meeting.

Businesswire.co.nz

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