While you were sleeping: Time-out seen as temporary

While you were sleeping: Time-out seen as temporary

(BusinessDesk) February 10 - Equities on Wall Street took a breather from recent gains that left them near the highest level in 2 1/2 years though the bulls appear to remain firmly in control.

In early afternoon trading, the Dow Jones Industrial Average slipped 0.05%, the S&P 500 Index declined 0.38% and the Nasdaq Composite Index fell 0.23%. Earnings continue to underpin the market’s recent run and results from Walt Disney Co and Coca-Cola Co were no exception.

Investors also took time to digest comments by U.S. Federal Reserve Chairman Ben Bernanke who told Congress that unemployment was too high despite an improving economy.

"Investors at this point know that they are not going to get a bouquet of flowers from the Fed.

His [Bernanke's] language was cautionary as usual," Joseph Greco, managing director at Meridian Equity Partners in New York, told Reuters.

"The primary trend [in the market] is that we are moving up on solid earnings, and a little bit of profit-taking on a small volume only means new bids are coming up," Greco added.

Acknowledging a recent pickup in the economy, Bernanke said a drop in the jobless rate to 9% in January from 9.8% in November, the biggest two-month decline since 1958, was "grounds for optimism."

Even so, "the job market has improved only slowly," he said.

Still, optimism prevails among stock investors, judging by the recent M&A activity, and even stock market operators are looking to take advantage.

The London Stock Exchange agreed to buy Canada's stock market operator TMX, which would be the world's fourth-largest exchange and a top centre for trading mining and energy stocks.

Two sources familiar with the matter said New York Stock Exchange operator NYSE Euronext was in talks to sell itself to Germany's Deutsche Boerse. A deal would allow the companies to cut costs and dominate exchange trading in Continental Europe.

The Stoxx Europe 600 Index declined 0.4% to 287.36 at 4:30 p.m. in London, also pausing from recent gains that left the index near the highest levels since 2008.

The U.S. dollar weakened against a basket of major currencies, declining 0.36%.

Gold was steady near the highest level in three weeks. Spot gold was bid at US$1,362.70 an ounce at 1333 GMT, against US$1,363.59 late in New York on Tuesday.

U.S. gold futures for April delivery shed 50 cents to US$1,363.60 an ounce.

Brent crude oil rose. Analysts told Reuters the gains were likely to be capped by China's interest rate increase, announced on Tuesday, as well as the release of U.S. government weekly oil data, expected to show record high crude stockpiles at the delivery point for U.S. crude.

Brent was up 65 cents at US$100.57, after closing at US$99.92 on Tuesday. Brent crude traded at a record high premium of US$13.39 a barrel to U.S. crude.

"Brent is still reflecting the market concern about Egypt and the Suez Canal," Tony Nunan, assistant general manager with Mitsubishi Corp in Tokyo, told Reuters. "Oil supply to Europe via the canal would have more impact than to the U.S."

(BusinessDesk)

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