While you were sleeping: Wall Street awaits fresh catalyst

While you were sleeping: Wall Street awaits fresh catalyst

(BusinessDesk) February 4 - Equities on Wall Street paused as investors awaited a fresh reason to push prices higher. Copper and tin reached record highs and oil rose.

In early afternoon trading, the Dow Jones Industrial Average slipped 0.09%, the S&P 500 Index declined 0.12% and the Nasdaq Composite Index edged 0.03% lower.

In Cairo, at least six people were dead and 800 wounded after gunmen and stick-wielding supporters of President Hosni Mubarak attacked demonstrators camped out for a tenth day on Tahrir Square to demand the 82-year-old leader immediately end his 30-year rule.

"Egypt is slowly coming back to the front burner. People thought it could be resolved peacefully and quickly, but that doesn't seem to be the case," Nicholas Colas, chief market strategist at The Convergex Group in New York, told Reuters.

Meanwhile, U.S. Federal Reserve Chairman Ben Bernanke said today the country’s economic recovery still needed help from the central bank, despite recent signs of improvement.

"Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate," he said in remarks prepared for delivery to the National Press Club.

Bernanke provided a modestly more rosy outlook for the world's largest economy than in previous speeches, citing gains in household spending, improved confidence, and stepped up bank lending as signs 2011 might see stronger growth than 2010.

Even the hard hit job market showed some grounds for optimism, Bernanke said.

Among the most recent positive economic indicators were U.S. retail sales as the country’s major retailers reported January sales that surpassed analysts' estimates. Last month was the snowiest January in six years.

Retailers posted a 4.2% increase in sales at stores open at least a year, beating Wall Street expectations for a 2.7% climb and exceeding a year-earlier rise of 3.3%, according to Thomson Reuters data.

"We thought weather would have more of an impact," Tim Ghriskey, chief investment officer of Solaris Asset Management, told Reuters. "Our store checks showed less people in stores, but obviously, those who are going to stores, are buying."

U.S. government data also showed a drop in new claims for unemployment benefits last week and stronger-than-expected nonfarm productivity in the fourth quarter. Tomorrow the January payrolls report is set to be released.

The euro dropped after European Central Bank President Jean-Claude Trichet said inflation was likely to climb further and exceed the the central bank’s target for most of the year but posed no threat yet to medium-term price stability.

Euro zone inflation accelerated to a 15-month high of 2.4% last month and Trichet said it would hold above the ECB's target of just below 2% for much of 2011. The ECB kept interest rates at a record-low 1.0% as expected.

"We continue to see evidence of short-term upward pressures on overall inflation, mainly owing to energy and commodity prices," Trichet told a news conference. "This has not so far affected our assessment that price developments will remain in line with price stability over the policy relevant horizon. At the same time, very close monitoring is warranted."

His comments doused expectations for an increase in borrowing costs.

"The underlying message is that there is no need for a rate hike any time soon," Boris Schlossberg, director of currency research at GFT in New York, told Reuters.

The euro fell 1.22% to US$1.3634 and 0.9% to 111.59 against the yen. The greenback rose 0.34% against the yen to 81.83.

(BusinessDesk)

© Scoop Media