While you were sleeping: Confidence abounds

While you were sleeping: Confidence abounds

(BusinessDesk) December 30 - Equities in North America and Europe edged higher as investors appeared confident about the economic outlook for 2011.

The three U.S. stock benchmark indexes advanced. The Dow Jones Industrial Average gained 0.22% at midday. The S&P 500 index rose 0.20% and the Nasdaq Composite Index was up 0.19%.

In Europe, the Stoxx 600 gained 0.2% to 280.47, bringing its advance for the year to 10%.

"There is certainly a lot more optimism out there, either founded or not, in terms of stock prices," Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, told Reuters.

"At the end of the day, most companies have prepared their balance sheets, and they are looking to grow either organically or through acquisitions. The U.S. market is probably seen as a place to find high quality companies right now."

On Wall Street, BJ’s Wholesale Club Inc jumped more than 6% after the New York Post said the warehouse store operator might receive a takeover bid from buyout firm Leonard Green & Partners LP.

Commodities fared well, too. Copper rose to a record on the London Metal Exchange, hitting US$9,437.50 a tonne.

Underpinning copper's strength in the near term is the closure of Chile's Patache port terminal - which has blocked exports by No. 3 copper miner Collahuasi - and a supply deficit expected in 2011.

Oil was steady near a two-year high before U.S. inventory data expected to show a decline in crude and distillate stocks in the world's largest oil user.

NYMEX crude for February delivery slipped 39 cents to US$91.10 a barrel at 1404 GMT, while ICE Brent crude was down 43 cents at $93.95.

Oil has benefited from the cold snap that has affected as many as 1.2 million airline customers by almost 8,000 flight cancellations after the storm that hit New York City three days ago.

"Traditionally December is a good month for equities and we have also seen strength in commodities such as gold, copper and oil, which has lifted a number of major blue-chip stocks," David Jones, chief market strategist at IG Index, told Reuters.

Investors will eye tomorrow’s U.S. reports from the Institute for Supply Management - Chicago Inc and the National Association of Realtors for further confirmation of the recovery trend in the world’s biggest economy.

On the currency market, the euro was steady at US$1.3118.

The greenback fell 0.3% to 82.18 yen, declining for the eighth consecutive session against the yen. That’s the longest slump in more than six years, according to Bloomberg News.

U.S. Treasuries gained before the government’s US$29 billion auction of seven-year securities.

Yesterday’s US$35 billion five-year note auction attracted the lowest demand in six months.

“The relatively sloppy auction yesterday allowed the market to price in a decent concession, making yields more attractive,” Larry Milstein, managing director of government and agency debt trading in New York at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors, told Bloomberg News.

The yield on the current seven-year note fell five basis points to 2.82% at 11.41am in New York, according to BGCantor Market Data.

(BusinessDesk)

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