Stocks Seek Direction

Investor sentiment in Europe was hurt by a report from the Z.E.W. economic research institute showing that confidence was declining in Germany. Z.E.W.’s economic sentiment indicator fell in November for a ninth straight month, dropping 6.9 points to minus 55.2 points, well below the historical average of 25.0 points and the lowest since October 2008, in the aftermath of the Lehman Brothers collapse.

The Z.E.W. report overshadowed data from the European Union showing that the bloc’s economy grew 0.2 percent in the third quarter from the second, as Germany and France pulled the laggards with them.

In the latest indicator of bond market stress, the Spanish Treasury auctioned €3.2 billion, or $4.3 billion of short-term debt securities at the highest interest rates it has had to pay since 1997, according to Reuters.

The Treasury sold most of the bills on auction, but paid an average yield of 5.022 percent to move the 12-month securities, compared to 3.61 percent in September, paid an average yield of 5.159 percent to move 18-month securities, up from 3.80 percent last month.

The yield on the Italian 10-year bond rose 33 basis points, or 33 hundredths of a percentage point, to 7.00 percent. Spanish 10-year yields rose 21 basis points to 6.25 percent. French 10-years traded to yield 3.60 percent, 20 basis points higher.

German and United States bonds, meanwhile, which are perceived as offering more security, rose in price, pushing down yields as investors left more risky assets. The German 10-year yielded 1.75 percent, while its United States counterpart was at 1.99 percent.

The spread, or gap, between German bonds, on the one hand, and French and Spanish bonds, on the other, reached the widest since the creation of the euro, according to Bloomberg News.

In early trading, the Dow Jones industrial average and the Standard Poor’s 500 index were both up about 0.1 percent.

The Euro Stoxx 50 index, a barometer of euro zone blue chips, fell 1.2 percent, while the FTSE 100 index in London was flat.

Financial shares were lower in Europe, with the largest British lender, HSBC Holdings, fell 1.0 percent, BNP Paribas, the largest French bank, falling 5.8 percent, and UniCredit, the largest Italian bank, falling 3 percent. Deutsche Bank, the largest German lender, fell 2.1 percent.

Asian shares fell. The Tokyo benchmark Nikkei 225 stock average fell 0.7 percent. The Sydney market index SP/ASX 200 fell 0.4 percent. In Hong Kong, the Hang Seng index fell 0.8 percent, but in Shanghai, the composite index managed to stay in positive territory, rising less than 0.1 percent.

U.S. crude oil futures ticked up 0.1 percent to $98.21 a barrel. Comex gold futures rose 0.1 percent to $1,779.70 an ounce.

The dollar rose against major European currencies. The euro slipped to $1.3562, down 0.5 percent from late Monday in New York, while the British pound slipped 0.3 percent to $1.5856. The dollar rose 0.6 percent against the Swiss currency, to 0.9135 francs. But the dollar fell 0.2 percent against the Japanese currency, to ¥76.96.

Article source: http://www.nytimes.com/2011/11/16/business/global/daily-stock-market-activity.html?partner=rss&emc=rss