Archive For "March, 2010"

The Treasury secretary will travel to India next week with an eye toward opening the country’s vast infrastructure needs to financing from U.S. companies.

The dollar retreated Wednesday following an ADP report which showed U.S. companies had cut jobs rather than added them in March.

LOS ANGELES (MarketWatch) — Major asset classes tracked in the U.S. rose during the first quarter of 2010, in part as improving economic data indicated that the U.S. and other economies worldwide continue on the path of slow but steady recovery. Natural gas and the euro were some of the biggest losing investments. The S&P 500 Index is up about 4.7%, rebounding from February lows “despite lingering fears regarding peripheral European sovereign credit risk and Asian tightening,” wrote Alec Young, equity strategist at S&P Equity Research Services, in a note Wednesday. The Dow Jones Industrial Average has gained nearly 4%. Treasurys of all maturities are on track for a 0.9% return so far in 2010, according to an index compiled by Bank of America Merrill Lynch. Among resources, crude oil prices rose 5.5% and copper climbed 6.2%. Gold prices rose a more modest 1.7%, while natural gas tumbled 31%. The U.S. dollar index gained 4% in the first quarter. The euro fell about 6% against the dollar.

WASHINGTON (MarketWatch) — Problems in some categories of loans may be leveling off at small banks, said Federal Reserve Board Governor Elizabeth Duke on Wednesday. Duke repeated that she was optimistic there might be an increase in bank loans later this year. “While most banks remain sound, appropriately capitalized, and profitable, this can be difficult to remember in the midst of strained banking conditions and weekly bank failures,” Duke said. She spoke to a banking group in Scottsdale, Ariz. At the moment, some small businesses and consumers still report trouble obtaining credit, Duke noted. This is not solely the fault of overzealous bank examiners, she said.

WASHINGTON (MarketWatch) — It is “premature” for financial markets to assume there will be a quick reversal of the Fed’s near-zero interest rate policy, said Dennis Lockhart, the president of the Atlanta Federal Reserve Bank, on Wednesday. While there are tentative signs of improvement in labor markets, “we still have a long way to go,” Lockhart said in a speech in Hartford Conn. As long as inflation remains quiet, a key factor in the outlook for monetary policy is improvement in the job picture, Lockhart said. “I will be looking for signs that employment gains are likely to repeat, accumulate and, once achieved, are likely to be durable,” Lockhart said. At the same time, it is possible that circumstances justifying the start of a rate hike cycle will develop before the unemployment rate “has found a satisfactory level,” he said.

Euro bulls gored by Europe’s sovereign debt woes may have a more potent nemesis in widening interest-rate differentials between the United States and Europe.

A fragile sense of optimism over Greek’s finances after last week’s agreement by euro-zone leaders to back a joint European-International Monetary Fund standby aid plan has turned sour, renewing questions about the debt-strapped country’s ability to meet its financing needs.

NEW YORK (MarketWatch) — The U.S. dollar’s share of foreign-exchange reserves rose in the fourth quarter, according to data from the International Monetary Fund released Wednesday. As a percentage of known allocated reserves, the dollar’s share rose to 62.1% at the end of last year, compared to 61.5% in the third quarter. “Valuation often seems to explain the bulk of the volatility in the currency allocations,” said strategists at Brown Brothers Harriman. The report also showed the euro’s share of reserves slipped to 27.4% from 27.8%, while the share of reserves in Japanese yen declined to 3% from 3.2%, the analyst said. “It seems likely that the dollar’s share of reserves likely rose in this quarter too,” according to Brown Brothers. The euro lost 1.8% versus the dollar in the fourth quarter, and is on pace to fall about 6.1% this quarter. The dollar rose 4% against the yen in the fourth quarter, and is up just 0.3% in the three months ending Wednesday. China is among the countries that don’t report holdings to the IMF.

WASHINGTON (MarketWatch) — Manufacturing activity in the Chicago region in March retreated from high levels reached in February, according to media reports of the purchasing managers index for the Chicago region released on Wednesday. The Chicago purchasing managers index fell to 58.8% from 62.6% in February. Economists had been anticipating a retreat but this was a bigger decline than expected. Forecasters surveyed by MarketWatch had expected the index to fall to 59.9%. Still, the report signals solid growth. Readings over 50% indicate overall business expansion. The Chicago index had surged over the winter as the U.S. manufacturing rebound gathered strength. The Chicago PMI is also considered a leading indicator to the national Institute for Supply Management manufacturers’ survey for March to be released on Thursday. Economists expect the March ISM manufacturing composite to increase to 57.0 from a February reading of 56.5.

The yen sinks in Tokyo as investors liquidate long positions on the last day of the Japanese fiscal year, while the euro rallies on the dollar.