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US Markets open in the red and stay underwater as economic data dissapoints

Published: 03:31 04 Aug 2010 AEST

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The Canadian S&P/TSX Composite Index finished up slightly from the opening price  after trading sideways most of the day, weighed on by a drab day on US Markets. The Canadian Index was 0.64% higher after investors returned from a public holiday on Monday. Shares were marked up at the open reflecting a strong performance by US markets on Monday, and higher gold and oil prices lifted energy and gold miners.  Canadian markets as a whole  traded sideways after the opening surge, tracking a weak start in the US, where the NASDAQ, S&P 500 and Dow Jones all lost ground.  The US indexes traded down 0.52%, 0.48%, and 0.36% respectively. 


The majority of Canadian companies posted gains although a number of companies finished with losses, the most notable being Blackberry manufacturer Research In Motion (TSE: RIMM, Nasdaq:RIMM) which declined 2.54% on the TSE.  The decline came as Indian and Kuwait governments voiced concerns about the Blackberry being a security threat.  RIM`s announcement of its latest Smartphone, the Torch, and a new operating system, Blackberry 6,  did little to turn attention away from wider concerns about potential market penetration issues in the Middle East.


Insurance giant Fairfax (TSE:FFH, PINK:FRFHF) was a strong performer, climbing  1.26%.  The Canadian National Railway (TSE: CNR, NYSE: CNI) also rallied 1.51% after announcement of a buyback.

 
Among the household names leading the loser board on US Markets was retailer Aerostopale (NYSE:ARO) which fell as much as 4% on the NYSE.   News media company New York Times (NYSE:NYT) was also in the red, falling by 4.5%.


Commodities


Oil held onto gains made yesterday, with September Brent Crude improving to US$82.6/barrel, while NYMEX light, sweet crude climbed to US$82.38/barrel.


Oil companies rose across the board, with integrated oils Suncor (NYSE:SU, TSE:SU), and Chevron (NYSE:CVX) leading the way with gains of  2.6%, 1.11% respectively. 


Gold reaches $1,185


Gold prices climbed after China’s People’s Bank said it would allow more foreign companies to trade on the Shanghai Gold Exchange, which will lead to an increase in imports and exports of the yellow metal. Gold demand has increased during H1 in China after the government introduced a series of monetary tightening measures to prevent the booming economy from overheating, prompting investors to put more money into safe haven assets.


China’s decision to loosen up its gold market has a positive impact on the gold price, which got more support from a strong physical demand from the world’s largest gold consumer India ahead of the upcoming festival season.
Swiss Bank UBS (NYSE:UBS) also reported  that its gold sales to India reached the highest level in 20 months.
Gold improved to US$1,185/oz today. Silver followed, rising to US$18.40/oz, while Platinum declined to US$1,588/oz.


Centerra Gold (TSE:CG), Detour Gold Corporation (TSE:DGC, PINK:DRGDF), are among the stocks on the Toronto Stock Exchange that benefited from the positive news for gold, rising 2.47%, 7.18% respectively. 
Miners fall as base metals decline


Diversified mining groups and base metal specialists put in a mixed performance, hit by weaker copper, nickel and zinc prices. On US markets, the  copper producers Southern Copper (NYSE: SCCO, BVC: SCCO), Taseko Mines (TSE: TKO, AMEX:TGB), and BHP Billiton (NYSE: BHP, ASX: BHP) all traded down 1.95%, 1.67%, and 0.6% respectively.


Ivanhoe Mines Ltd. (TSE: IVN) however put in a strong performance, climbing more than 2% on the TSE.

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