Wall Street’s open was somewhat cautious, with the Dow and S&P 500 both struggling to establish some sort of direction at the start of trading today.

On one side we have investors moving back to equities on speculation that the recent sell-off was overdone and on the other side there’s the fear that a potential default by state-owned company Dubai World could derail the global economic recovery.

The market wasn’t exactly made ecstatic by the comments from the director general of Dubai’s department of finance; Mr Abdulrahman al-Saleh said the government will not guarantee Dubai World’s debts, quashing hopes that the emirate would guarantee its liabilities.

He went on to say that Dubai World received financing based on its project schedule and that creditors will have to take responsibility for the restructuring of Dubai World’s debt.

‘Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct.’ [1]

‘The times of implicit support are clearly over,’ said Philipp Lotter of Moody’s Investors Service in Dubai. ‘In the past entities such as Dubai World certainly represented themselves as quasi-government entities, whereas there was no legal obligation on behalf of the government to support, and that has certainly shifted with last week’s announcement.’ [2]

Sentiment on Wall Street started to improve by mid-afternoon trading, however, as investors warmed up to the Chicago Purchasing Managers’ Index, which unexpectedly rose to 56.1 this month from 54.2 in October.

The reading suggests that manufacturing activity in the region has continued to expand. The Chicago index is quite important, for manufacturing in this area accounts for 12% of overall US production.

By 3:30pm (London time), the Dow Jones Industrial Average was trading 47.92 points (+0.46%) higher at 10357.84, while the broader S&P 500 was 4.95 points (+0.45%) above its previous close at 1096.44. The Nasdaq was also higher, up 4.12 points (+0.23%) to 1769.58.

US teen-apparel retailer Abercrombie & Fitch Co saw its share price edge 0.3% higher to $40.08 a share this afternoon, after FBR Capital Markets upgraded the company from ‘market perform’ to ‘outperform’, citing robust sales prospects over the festive period. [3]

Rival companies also benefited, with Aeropostale’s shares advancing 0.8% to $31.74 and American Eagle up 2.5% to $15.40.

US Steel Corp also benefited from a broker upgrade today. Its shares jumped 3% to $44.36 after Goldman Sachs added the company to its ‘conviction buy’ list. Goldman also maintained an ‘attractive’ view on the European automotive sector, saying it expects the sector to continue outperforming next year. [4]

Celgene Corp was also in demand this afternoon, after Bloomberg News said the company’s best-selling cancer pill may triple its sales and threaten Johnson & Johnson’s dominance. Celgene’s shares climbed 0.7% to $55.35 while Johnson & Johnson’s shares edged 0.5% lower to $62.59.

In contrast, shares of bailed-out insurer American International Group plunged 10.4% to $29.85 after Sanford C Bernstein slashed the company’s price target by 40% to $12 a share, citing an $11 billion deficiency in insurance reserves. [5]

Source: [1] Reuters News (30 November 2009)
Source: [2] Bloomberg News (30 November 2009)
Source: [3] Bloomberg News (30 November 2009)
Source: [4] Bloomberg News (30 November 2009)
Source: [5] Bloomberg News (30 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

Wall Street, which resumed trading following Thanksgiving holiday yesterday, slumped by over 2% during the first half hour of the opening bell today, as investors feared that Dubai’s debt troubles will derail the global economic recovery.

UBS sent shivers running down the spines of investors today, after saying that Dubai may owe more than most of us may anticipate.

‘Perhaps Dubai’s debt includes sizeable off-balance sheet liabilities that imply a total debt burden well above the $80 billion to $90 billion markets have estimated so far,’ said Saud Masud of UBS today. ‘This could imply that the debt issued by Dubai in recent weeks is insufficient to meet upcoming redemptions.’ [1]

The negative reaction on Wall Street had been widely expected after all. US banks took a knock on the back of fears that their exposure to a potential default on Dubai’s debt would spur further write downs. Citigroup saw its share price retreat 1.2% to $4.12 while Bank of America declined 1.7% to $15.68. Goldman Sachs and Morgan Stanley were among the casualties as well, with the former down 2.2% to $165.12 and latter 2.9% lower at $30.52 a share.

Heightened levels of risk aversion encouraged investors back to the safety of the US dollar, which, in turn, exerted pressure on commodity prices and miners. Freeport-McMoRan Copper & Gold saw its share price slide 3% to $84.68, while Newmont Mining’s shares dropped 2.7% to $53.41.

Retail shares, although lower, performed relatively better than the mining and banking sectors, with Wal-Mart Stores dropping by only 0.8% to $54.52 and Sears down 0.3% to $72.21.

Investors were easier on retail shares on the view that the Black Friday shopping session was doing quite well - this is meant to be the single busiest shopping day of the holiday season, accounting for approximately 20% of the retail industry’s annual sales.

According to a survey compiled by the National Retail Federation, up to 134 million US consumers said they may shop for holiday gifts this weekend from Black Friday through Sunday. This is an improvement over last year’s survey.

Macy’s CEO Terry Lundgren said retail should have a decent holiday performance this year. ‘That’s very different than last year,’ Lundgren told CNBC. ‘Last year we were falling off a cliff, grabbing for branches on the way down.’ [2]

Encouragingly, there has been a change in sentiment since the open, with Wall Street seen paring earlier losses. By 3:40pm (London time) the Dow Jones Industrial Average was trading 151.76 points (-1.45%) lower at 10312.64 while the broader S&P 500 was 17.4 points (-1.57%) below its previous close at 1093.23. The Nasdaq, meanwhile, fell 24.3 points (-1.36%) to 1769.36.

At the same time, the FTSE 100 managed to claw back all of its earlier losses and climb 52.61 points (+1%) to 5246.74.

UK banks added the most points to the index, with Barclays seen 3.6% higher to 301.65p and Royal Bank of Scotland up 5.9% to 34.95p. HSBC was practically unchanged at 706.3p while Lloyds Banking Group traded at 57.5p after adjusting to the additional shares from the rights issue.

Meanwhile, JPMorgan Chase today said that HSBC has the ‘largest absolute exposure’ in the United Arab Emirates, with $17 billion of loans in 2008. JPMorgan also said that Royal Bank of Scotland Group (RBS) underwrote more loans than any institution to Dubai World, arranging $2.3 billion, or 17%, of Dubai World loans since January 2007. [3] It seems a good thing that RBS has joined the UK government’s Asset Protection Scheme after all.

Lloyds Banking Group also made an regulatory announcement this afternoon. The bank said that the new convertible bonds, issued as part of the restructuring package, will convert to equity at a price of £0.592093 per share, yet the conversion would only take place if its core tier one capital fell below 5%.

The bank’s tier one capital is, in my opinion, unlikely to fall to this level as things stand. We still need to find out whether Lloyds has any exposure to Dubai, however. If it does, we would then need to assess whether the exposure is high enough to cause a material impact on the bank’s balance sheet should Dubai default on its debt obligations.

There were also few director deals in London today. The Chairman of Computacenter Greg Lock today purchased 50,000 shares in the company at a price of 249p a share, raising his holding in Computacenter to 350,000 shares, representing 0.228% of the issued share capital.

Meanwhile, Timothy How, a director of DSG International, bought 80,000 shares in the company at a price of 35.58p per share.

Elsewhere, it is also rumoured that there are prospective buyers for LGC, Britain’s largest private forensic science company that belongs to LGV Capital, the private equity unit of insurer Legal & General Group. Unidentified sources have told Reuters that LGC may be sold for around £200 million ($328 million). Shares in Legal & General were 3.5% higher at 81.25p.

Source: [1] Bloomberg News (27 November 2009)
Source: [2]Thompson Reuters (27 November 2009)
Source: [3] Bloomberg News (27 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

On both sides of the Atlantic it has been a day of slight gains for both the FTSE 100 and the Dow Jones.

Catering business Compass continues to lead the UK’s leading index after it announced a rise in profits, currently up 25.90p (6.44%).

HSBC and Barclays also managed to hold on to earlier gains after this morning’s beneficial ruling from the Supreme Court concerning unauthorised overdrafts.

Miners continued to underpin the FTSE’s gains, with Rangold Resources up 155.00p, a rise of 3.08% and BHP Billiton gaining 56p (+3.01%). The sector continues to be boosted by the weakening Dollar as weary investors flock to gold as a means of secure investment.

The Dollar has now fallen for the third straight day and is currently at its lowest levels in more than 15 months.

Before the opening bell US stock-index futures indicated that the US markets would open positively. While the Dow opened lower than yesterday’s close by 3.00pm (London time), it had climbed 12.59 points (+0.24%) to 5336.55, while the broader S&P 500 was up slightly by 1.03 points (+0.09%) to 1106.68. The Nasdaq was also in positive territory, up 3.86 points (+0.18%) to 2173.04.

Heading up the Dow’s leader board was American Express with a rise of 0.72%, Intel with a gain of 0.52% and Proctor & Gamble which rose 0.56%.

While among the losers were technology heavyweight Microsoft, down 0.30%, and General Electric Co. with a drop of 0.19%.

The share price of US food producer Kraft also dipped slightly as the company continues in its attempts to purchase British based Cadbury for £10.3 billion.

The takeover is by no means guaranteed as Kraft engages in discussions with union representatives who seek assurances that their will be no compulsory redundancies among the Cadbury workforce.

Yesterday, Cadbury’s share price rose on the FTSE following speculation of the takeover, however, today they are virtually neutral, trading at 808.00p a change of 0%.

The big news out of the states was the US initial jobless claims figures. The figures showed that the number of claims has fallen to its lowest levels since September 2008. 466,000 Americans were claiming as of the week ending November 21 down from 501,000 a week earlier.

While analysts may consider this further good news that the US economy is firmly out of the doldrums, it is worth taking into account that after slashing more than seven million jobs following the spectre of the credit crunch US companies may not be able to shed any more workers.

As the economy continues to recover, US companies may well need their workforces as production needs increase.

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

US equity markets were unable to hold onto yesterday’s gains today, as renewed banking sector concerns and downward revisions to American third-quarter GDP figures tainted sentiment.

Investors are beginning to feel somewhat cautious over the health of the global banking sector today after a German media report claimed that WestLB’s majority owners might withhold support for the struggling German bank. Tensions later eased however, after government sources confirmed that WestLB’s ‘negotiations are progressing well.’

Although things at WestLB appear to be sorting themselves out for the time being, all it takes is just one casualty to send us back a few steps.

Chinese regulators are also beginning to worry about the health of their domestic banking sector, as capital levels in the country’s banking system are beginning to look depleted following a year of blowout lending.

The Wall Street Journal reported that Chinese regulators are starting to put their foot down and urge domestic banks to comply with its capital requirements or face sanctions. Bloomberg, meanwhile, confirmed that five of China’s largest banks have already put forth capital raising plans to regulators.

Credit ratings agency Standard & Poor’s yesterday said it expects banks to ‘continue strengthening capital ratios’ as regulators demand higher standards. ‘It is widely anticipated that regulatory capital requirements for banks will increase materially in the next few years,’ said S&P’s credit analysts. [1] This could mean that we may eventually enter another widespread phase of banking sector rights issues.

A downward revision to America’s third-quarter GDP figures dealt a blow to stock market sentiment today.

According to the Commerce Department, the US economy expanded at an annual rate of 2.8% in the third quarter. This was substantially lower than the 3.5% expansion it reported last month. The downward revision came on the back of a smaller gain in consumer spending and a larger trade deficit.

The GDP figures weren’t the only disappointment unfortunately. One report revealed that US house price growth lost momentum in September, while another indicated that manufacturing activity in the Richmond region grew substantially less than anticipated.

The S&P/Case-Shiller’s 20-city house price index rose by only 0.3% last month following a 1.2% rise the prior month. This was also below Reuters’ expectations for a 0.8% increase. Separately, the Richmond Federal Reserve’s manufacturing index unexpectedly fell to a reading of 1 this month down from 7 in September. The New York Empire State manufacturing index, released last week, also came in softer than anticipated.

On a positive note, a separate report released today revealed that US consumer confidence improved this month, rising to 49.5 from 48.7 in October. Although this data offset consumer spending concerns, it did little for stock market confidence today.

By 3.30pm (London time), the Dow Jones Industrial Average was trading 60.24 points (-0.58%) below its previous close at 10390.71, while the broader S&P 500 was 5.6 points (-0.51%) lower at 1100.64. The Nasdaq was also in negative territory, down 13.38 points (-0.75%) to 1779.56.

Source: [1] Dow Jones Newswires (24 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

Wall Street has continued to descend today, as investors decreased their exposure to equities on fear of a deeper correction.

The number of bearish signals hitting the market was on the rise today, with policymakers from India, South Korea and Indonesia expressing their concern over potential asset bubbles, and ECB President Jean-Claude Trichet saying that the central bank is ready to start exiting emergency lending measures.

In the US, we had the Economic Policy Institute saying domestic budget shortfalls pose a direct threat to millions of US jobs and a separate report from Moody’s Economy saying that the US housing market hasn’t stated to recover yet.

‘I don’t think the housing crisis is over,’ Mark Zandi, the chief economist with Moody’s Economy.com told Reuters today ‘I think we’re going to see another leg down.’

PC-maker Dell added to the downbeat vibe by unveiling a bigger-than-expected 54% drop in third-quarter net income to $337 million. This is equivalent to 17 cents a share, substantially below Bloomberg’s median analyst estimate of 27 cents a share.

Sales were also a disappointment, coming in 15% lower than the previous year’s comparative at $12.9 billion and missing Bloomberg’s $13.1 billion median forecast.

Dell expects its fourth-quarter revenue to improve, partially on the back of a pickup in consumer demand over the holiday season. Michael Dell, the company’s founder and chief executive, also said he foresees strong demand for PCs and other computer systems sometime in 2010, yet the fear on the market is that the company may be losing market share. Dell’s shares slid 9.2% to $14.41 this afternoon.

‘Dell usually does well in the holiday season. So this suggests that we won’t get good results from other retailers. That’s pushing the market down’ said Dan Faretta of Lind-Waldock.[1]

Chipmakers continued to decline as well today following a bearish report from Merrill Lynch, which downgraded the chip industry from ‘positive’ to ‘negative’ yesterday. [2] Shares of Advanced Micro Devices slid 3.33% to $6.82, while Intel declined nearly 1% to $19.15.

House builder D.R Horton was another casualty today, plunging over 10% to $11 a share after unveiling a wider-than-expected fourth-quarter loss and saying that its operating environment remained challenging.

By 3.30pm (London time), the Dow Jones Industrial Average traded at 10315.06, representing a 17.38 point (-0.17%) decline, while the broader S&P 500 was trading 4.47 points (-0.41%) below yesterday’s close at 1090.43. The Nasdaq fared relatively worse, down 11.44 points (-0.65%) to 1761.75.

There was an interesting research note from Goldman Sachs today, which essentially implied that we could see a rally over the month of December. ‘December stands out as one of the best months for equities, using both long-and-short term data; we think this year will be similar.

In years when the first 11 months have yielded good returns, December has tended to be particularly strong.’ [3] If correct, investors may be able to make lucrative returns by taking advantage of current volatility, perhaps acquiring equities at key support levels.

Source: [1] Reuters News (20 November 2009)
Source: [2] Bloomberg News (20 November 2009)
Source: [3] Company research report (20 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

Wall Street suffered from another bout of weakness at the start of trading today, as investors speculated that the market has got ahead of itself.

The trading day kicked off with some moderately decent jobless claims figures and stronger regional manufacturing data, yet a weaker-than-expected leading economic index left investors with a sour taste in their mouths.

The feeling in the market is that the American economic recovery may be losing some steam, especially in view of yesterday’s dismal housing starts.

The US Labor Department today revealed that the number of Americans claiming for first time unemployment benefits (initial jobless claims) remained steady at 505,000 in the week ending 14 November, in line with Bloomberg’s expectations. The previous week’s level was revised to 505,000 from 502,000.

The four-week moving average for initial jobless claims, which aims to smooth volatility in the weekly data, fell by 6,500 to 514,000 – the lowest figure since 22 November 2008.

Meanwhile, the total number of Americans collecting unemployment benefits for more than a week (continuing jobless claims) fell by 39,000 to 5.61 million. The overall trend is that jobless claims figures appear to be dropping, which is a positive sign for the US labour market.

The Philly Fed manufacturing data was also encouraging, rising 5.2 points from the prior month to 16.7 in November. This exceeded Bloomberg’s median estimates by 4.5 points and marks the fourth month of factory expansion in the region.

The important leading index, a gauge of near-term economic activity, didn’t fare as well, however, rising by only 0.3% in October. This was substantially lower than the prior month’s 1% increase and missed Bloomberg’s median estimates for a 0.4% rise.

By 3.35pm (London time), the Dow Jones Industrial Average was trading 139.59 points (-1.34%) lower at 10286.72, while the broader S&P 500 was 17.84 points (-1.61%) below its previous close at 1091.96. The technology-based Nasdaq was also deep in the red, down 33.68 points (-1.9%) to 1768.06.

Bearish remarks on Intel, the world’s largest chip maker, didn’t bode well for market sentiment, especially technology shares.

The company’s shares plunged 5.5% to $19.01, dragging down shares of several other chip makers as well, after Dan Heyler, the head of Asian semiconductor research at Merrill Lynch, said the supply of chips is growing faster than demand, putting Intel’s bottom line at risk. Mr Heyler downgraded Intel’s rating from ‘buy’ to ‘neutral’ and cut the outlook for the global chip industry from ‘positive’ to ‘negative’. [1]

Shares of chipmaker STMicroelectronics fell 4.9% to $8.55, while Advanced Micro Devices tumbled 6.4% to $6.85 following this report.

Banks were out of favour as well today, with Goldman Sachs seen 2% lower at $173.43 after renowned banking analyst Meredith Whitney said the bank has lost ‘tremendous’ talent, as executives left to set up their own hedge funds. Whitney downgraded Goldman Sachs last month.

JPMorgan was another casualty, down 2.1% to $42.46 after announcing that it intends to acquire the rest of Cazenove Group for $1.7 billion (£1 billion).

US resource shares were also under pressure today, after a rebound in the Dollar exerted pressure on commodity prices. Alcoa slumped 4.3% to $13.17, Barrick Gold slid 1.2% to $43.22 and Freeport-McMoRan Copper & Gold fell 2.2% to $82.78.

Source: [1] Bloomberg News (19 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

The Dow opened lower today as housing and consumer prices data disappointed, while commodities continue to rally.

The US Commerce department today released figures that indicated that the amount of privately owned new houses being built dramatically fell in October. The housing starts figures fell 10.6% to an annual rate of 529,000, after being 592,000 the previous month.

The figures were a long way from the 600,000 many analysts had predicted. The imminent expiration of a government tax credit for first-time buyers, rising unemployment and job insecurity were all cited as key factors in this fall.

’The labour market is a key factor. We really need to see job gains in order to become more optimistic about housing,’ said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. ‘The numbers are shocking,’ added Patrick Newport at IHS Global Insight in Lexington, Massachusetts. [1]

In a separate report from the same department, the US Consumer Price Index rose 0.3% in October, which was mildly ahead of analyst’s expectations and was down to rising prices of food, fuel and cars.

The commodity rally continues, as demand for raw materials gathers momentum. In London this morning Crude oil hit $80, copper hit a 14-month high, and gold touched a record-for-the-week $1,149.40 an ounce. This will be good news for the mining industry, of course, but governments will be worrying about the effect this will have on the consumer.

With a lack of big-ticket company reports over in the US, some investor nerves have set in, as the magnifying glasses come out.

Indicative of this increase in scrutiny, and indeed scepticism, is the share price of web-based customer relationship software leader, Salesforce.com Inc., which continued to fall in early trading, down 3.52% ($63.39) even after posting a third quarter revenue of $330.5 million yesterday. Its subsequent prediction of a more difficult fourth quarter disappointed many analysts and investors.

Cadbury has also been in the news, as it emerged that US based Hershey and Italy’s Ferrero are in discussions about a joint bid for the UK chocolate manufacturer. The talks are ‘Very preliminary. Very early in the process,’ said an unnamed source close to the two companies. [2]

Staying with the UK, Marks and Spencer shares were up 6.57% at 392.20p as news broke that the retailer had poached grocer WM Morrison’s widely regarded boss Marc Bolland to become its new chief executive. Shares in WM Morrison fell 4.81% to 281.30p.

By 3.15pm (London time), the Dow Jones Industrial Average was down 71.27 points (-0.68%) at 10366.15, while the broader S&P 500 was 5.13 points (-1.46%) lower at 1105.19. The Nasdaq was down 21.09 points (-0.96%) to 2182.69. The FTSE 100 was also down 11.13 points (-0.21) at 5334.80.

Source: [1] Bloomberg News (18 November 2009),
Source: [2] Reuters (18 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.

Wall Street saw a moderate dip at the start of the trading day, as disappointing industrial production figures encouraged investors to take profits.

An official government report released this afternoon revealed that US industrial output rose by a meagre 0.1% in October, trailing Bloomberg’s expectations for a 0.4% increase and the prior month’s 0.6% gain.

The weaker-than-expected industrial output figures were mainly attributable to a decline in auto manufacturing, which fell 1.7% last month. Automakers scaled back on production following the expiry of the government’s cash-for-clunkers incentive programme.

Elevated unemployment rates are, perhaps, another logical reason underpinning the sector’s decision to reduce output. On a positive note, however, the report showed capacity utilisation improving to 70.7% in October from 70.5% the prior month.

The disappointing data, along with Dollar-support remarks from the Federal Reserve chairman Ben Bernanke last night, helped add to the rebound in the US Dollar this afternoon, which exerted some pressure on commodities and resource shares.

Freeport-McMoRan Copper & Gold retreated 1.6% to $83.15, while Newmont Mining declined 1.4% to $51.68 following a slight retreat in the price of metals.

By around 3.35pm (London time), the Dow Jones Industrial Average was trading 20.63 points (-0.20%) lower at 10386.33, while the broader S&P 500 was 3.49 points (-0.31%) below its previous close at 1105.81. The Nasdaq, meanwhile, was down 4.97 points (-0.27%) at 1802.59.

Shares of Home Depot, the biggest US home improvement chain, slumped 4.4% to $26.42, while discount retailer Target Corp retreated 3.3% to $48.64 this afternoon. Investors sold shares in both companies, despite reporting quarterly earnings that exceeded consensus expectations, after saying that their operating environment may become more challenging.

A few companies managed to buck the negative trend, however. Exxon Mobil, the world’s biggest oil company, managed to gain 0.7% to $74.92 after Barclays upgraded the company from ‘equal-weight’ to ‘overweight’ and upped its target price to $92 a share. [1]

Biotechnology firm Genzyme was also in favour, up 2.4% to $50.68 after billionaire investor Carl Icahn disclosed that his hedge-fund had bought a $72 million stake in the company during the third quarter.

Poniard Pharmaceuticals, another bio-tech firm which plunged nearly 76% yesterday, rebounded by 11% to $2.03 a share today. Its shares were literally crushed yesterday after its lead lung cancer therapy drug Picoplatin failed a pivotal phase 3 trial.

Zoom Technologies, a maker of equipment for connecting to the Internet, surged 18% to $9.46 after upping its 2009 sales forecast, saying it expects revenue of at least $185 million.

Source: [1] Bloomberg News (17 November 2009)

By Anthony Grech, Research Analyst, IG Index.

Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.

The above comments do not constitute investment advice and neither IG Index nor Spread-Betting.org accept any responsibility for any use that may be made of them.

IG Index is Authorised and regulated by the Financial Services Authority, register number 114059.