Market overview for Wednesday, 08 August 2012

Currencies

The euro edged lower against the dollar on Wednesday, pressured by soft German economic data, but losses were limited by hopes the European Central Bank may soon take action to lower Spanish and Italian borrowing costs.

The euro fell 0.3 percent to $1.2359, after hitting a one-month high of $1.2443 on Monday.

The euro also fell against sterling, which rallied after Bank of England Governor Mervyn King appeared cautious about future interest rate cuts, surprising investors.

The euro last traded down 0.5 percent at 78.92 pence.

Against the dollar, sterling reversed earlier losses to hit a session high of $1.5677. It was last up 0.2 percent at $1.5653.

The dollar slid 0.1 percent to 78.46 yen.

The euro lost 0.5 percent to 96.95 yen.

The dollar has stayed in a range between 77.90 and 78.80 yen for the past two weeks.

Energy

Oil futures turned mixed in late trading on Wednesday after leaping to three-month highs on U.S. government data showing a sharp drawdown in domestic crude stockpiles last week and amid worries about lower North Sea oil production.

U.S. September crude closed at $93.35, down 32 cents. it hit a session high of $94.72, the highest since May 15.

U.S. crude oil stocks fell 3.7 million barrels to 369.9 million in the week to Aug. 3.

The late surge in trading pulled up volumes, with Brent up 5 percent against its 30-day average and U.S. crude up 7 percent, from its 3o-day average.

Brent's premium against U.S. crude rose to $18.79, after closing at $18.33 on Tuesday.

Brent has risen about 25 percent and U.S. crude 21 percent since the end of June, partly on expectations the world's largest economies would take more measures to stimulate growth.

Precious metals

Gold inched up on Wednesday, but remained in a tight range as trading was quiet again due to investor uncertainty about whether central banks would act to stimulate frail economies.

Spot gold inched up 0.1 percent at $1,612.35 an ounce, recovering from losses earlier in the session.

U.S. gold futures for December delivery settled up $3.20 an ounce at $1,616, with volume at around 40 percent below its 30-day average.

Among other precious metals, silver was down 0.1 percent at $28.03 an ounce, while of the platinum group metals, platinum edged up 0.1 percent at $1,403.75 an ounce and palladium  gained 0.5 percent to $582.70 an ounce. 

Stock indices

The Standard & Poor's 500 just barely extended a streak of gains to a fourth day on Wednesday, ending above 1,400 in another thinly traded session.

Expectations for stimulus from the European Central Bank and the U.S. Federal Reserve triggered the recent gains, but investors found little reason to keep pushing stocks higher after driving the market to three-month highs.

The three major U.S. stock indexes opened lower but recovered at midday, led by consumer staples and health care. Both are defensive plays, an indication that investors are keeping their enthusiasm in check.

The Dow Jones industrial average rose 7.04 points, or 0.05 percent, to 13,175.64 at the close.

The Standard & Poor's 500 Index edged up just 0.87 of a point, or 0.06 percent, to finish at 1,402.22.

The Nasdaq Composite Index slipped 4.61 points, or 0.15 percent, to end at 3,011.25. 

Volume was light, with about 5.72 billion shares traded on the New York Stock Exchange, the American Stock Exchange and NASDAQ, well below last year's daily average of 7.84 billion.