While you were sleeping: Wall St gains, Fed's bank pay plan

Monday 21st September 2009

Stocks on Wall Street rose on Friday, pushing the Dow Jones Industrial Average to an 11-month high, as consumer products maker Procter & Gamble gained on comments from analysts at Citigroup that it likely to win market share.

The Dow climbed 0.4% to 9820.20, rounding out its second week of gains, and the Standard & Poor’s 500 rose 0.3% to 1068.30. The Nasdaq Composite advanced 0.3% to 2132.86.

Shares weakened in Europe on Friday, with the Dow Jones Stoxx 600 Index sliding 0.5% to 244.92. Royal Dutch Shell Group fell 1.1% and BP edged down 0.2% as the price of crude oil eased. Lloyds Banking Group climbed 0.9% after Goldman Sachs Group said its plan to quit the UK’s insurance scheme bided well for the lender.

Among regional benchmarks, Britain's FTSE 100 rose 0.2% to 5172.89. Germany's DAX 30 fell 0.5% to 5703.83, with Volkswagen falling 6.7% after Deutsche Boerse, the Frankfurt stock market operator, announced a reduced weighting for the stock. Deutsche Bank slipped 2.5% after Reuters reported the lender wants to buy Fortis Prime Fund Solutions.

France's CAC 40 shed 0.2% to 3827.84.

British Airways fell 1.8% after Reuters reported it is likely to team up with American Airlines and Qantas Airways to help strengthen their alliance with the financially strapped Japan Airlines.

The US Federal Reserve is promoting new rules plans for bank pay to keep in check the incentives for excessive risk taking.

The move comes as bank pay was discussed at the Group of 20 nations, whose leaders are set to meet this week in Pittsburgh. A Fed source told Reuters that guidelines would be proposed in the next few weeks applying to any bank employee able to take risks that could undermine the lender.

The rules would apply to all firms regulated by the Fed, which could extend to over 5,000 bank holding companies and more than 800 smaller state-chartered banks, according to the report.

The Financial Stability Board is scheduled to release guidelines to the G-20 summit. The dollar revived from a 12-month low versus the euro as some investors judged risk appetite had got ahead of itself.

In late New York trading, the euro fell 0.2% to $1.4707 and was little changed at 134.3 against the yen.

The dollar rose 0.3% to 91.28 yen after Japanese Finance Minister Hirohisa Fujii said he didn’t support a strong yen.

The Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.3% to 76.42.

Crude oil fell for a second day on Friday as the dollar picked up and the US Energy Department said fuel inventories are above average levels.

Crude oil for October delivery fell 0.6% to US$72.04 a barrel on the New York Mercantile Exchange.

Copper had the biggest decline so far this month after stockpiles monitored by the London Metal Exchange rose.

Copper futures for December delivery tumbled 3.8% to US$2.785 a pound on the New York Mercantile Exchange. Gold for December delivery fell US$3.20 to US$1,010.30 an ounce in New York.

Bloomberg reported that Wynn Resorts plans to raise as much as US$1.63 billion in a Hong Kong IPO of its Macau casino assets. The casino company founded by Stephen Wynn plans to spin off about 25% of its Macau business, the report said.

Businesswire.co.nz

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