A roundup of trading on major world markets:
NEW YORK – A rally that pushed major stock indexes up more than seven per cent this week stalled on Thursday. Stocks wavered between slight gains and slight losses in late afternoon trading, a day after the market posted its biggest gain in two and a half years.
Goldman Sachs and other banks, the previous day’s star-performers, gave up some of their gains, while Costco, Nordstrom and other retailers rose after reporting stronger sales for November.
The Dow Jones industrial average was down 5.22 points, or 0.04 per cent, to 12,040.46.
The S&P 500 index slipped 0.62 points to 1,246.34. The Nasdaq edged up 10.45 points, or 0.4 per cent, to 2,630.79.
The Dow soared 490 points Wednesday, its seventh-best gain on record, after central banks around the world slashed the cost of borrowing dollars for European banks. The coordinated action was aimed at shoring up European banks and averting a deeper credit crisis.
Another rise in applications for weekly unemployment benefits dampened the mood on Thursday.
The Labor Department said initial applications rose to 402,000 last week, the second weekly increase in a row. The figures didn’t change expectations for the government’s monthly labor report, which comes out on Friday.
Economists forecast that the unemployment rate will remain at nine per cent.
Traders took little encouragement on Thursday from a stronger manufacturing report. The Institute for Supply Management said that manufacturing grew last month at the fastest pace since June.
LONDON – European shares slid, giving up some of the stellar gains after top central banks pumped dollar liquidity into the banking system to avert a global financial crisis.
London’s FTSE 100 index of top companies dipped 0.29 per cent to 5,489.34 points.
In Paris the CAC-40 dropped 0.78 per cent to 3,129.95 points, and in Frankfurt the DAX 30 fell 0.87 per cent to 6,035.88 points.
Milan slid 0.16 per cent and Madrid gave up 0.34 per cent.
Bank of England Governor Mervyn King said the co-ordinated central bank action announced on Wednesday was only “temporary relief” to the eurozone’s “underlying solvency problems”, which he said have to be tackled directly by the governments.
The European Central Bank will not act as lender of last resort for struggling eurozone countries, its chief Mario Draghi insisted on Thursday, but left the door open to other measures if governments agree on budgetary consolidation.
HONG KONG – Asian markets soared on Thursday after the world’s top central banks took action to boost liquidity for the gummed-up financial system and China cut the amount of cash lenders must hold in reserve.
Regional shares followed a global rally as credit crunch fears aggravated by the European debt crisis eased.
Tokyo rallied 1.93 per cent, or 162.77 points, to end at 8,597.38, while Seoul closed 3.72 per cent, or 68.67 points, higher at 1,916.18.
Hong Kong surged 5.63 per cent, or 1,012.91 points, to 19,002.26 while Shanghai closed up 2.29 per cent, or 53.45 points, at 2,386.86.
In a surprise move on Wednesday the central banks of the United States, the eurozone, Britain, Japan, Canada and Switzerland said they would cut the cost of providing dollars to banks.
However, Bank of Japan Governor Masaaki Shirakawa warned that the move was not enough on its own to solve Europe’s fiscal woes.
Eyes will now be on a European summit next week, where pressure will be on leaders to come up with a plan to tackle the region’s two-year-old sovereign debt crisis, which has roiled markets.
WELLINGTON – New Zealand stocks rose, joining a global rally after the world’s biggest central banks teamed up to reduce borrowing costs for European lenders, which may limit the impact of the region’s debt crisis.
Fletcher Building, Westpac and Australia & New Zealand Banking Group rose.
The NZX 50 Index gained 7.104 points, or 0.2 per cent, to 3277.309. Within the index, 22 stocks rose, 17 fell and 11 were unchanged. Turnover was $NZ85 million ($A65.06 million).
