Market Review By TraderXP:
Oil has fallen from a high of over two months in New York on speculation that his four-day gain was exaggerated, as the budget negotiations faltered in the United States, threatening the economy's largest crude users worldwide.
"Oil was a big rally in the last few days, but it looks like losing steam," said Victor Shum, managing director of IHS Consulting in Singapore, who predicts New York crude has technical resistance at $ 90 a barrel. "If one goes beyond the short term uptrend, we have a market that is well supplied. "
Market News
WallStreet falls as "Rock" Talks sour, but hopes remain
U.S. stocks sold at the end of the day and closed at session lows on Wednesday as negotiations to prevent the end of the year the financial crisis worsened, even as investors continue to expect the transaction.
S & P 500 slipped after two-day rally that had the underlying index for the highest close in two months. Defensive-oriented stocks led outsiders, including health care and consumer products.
General Motors broke the general weakness to plunge by 6.6 percent to $ 27.18 after the automaker said it will buy back 200 million of its shares from the U.S. Treasury Department, which plans to sell the rest of its stake in GM over the next 15 months .
U.S. President Barack Obama and congressional Republicans are trying to come up with a deal to avoid the beginning of 2013 tax increases and spending cuts that many economists say could send intorecession U.S. economy.
House Speaker John Boehner, the top Republican in Congress, said in a one-minute press conference that his chamber will pass a proposal that Obama has threatened to veto, as sparesmany wealthiest Americans from tax increases required to balance the budget. Obama has agreed to reduce benefits for retirees.
"I think that they are close to a deal, and right in front, it seems, the deal is about to explode, or the industrial or legal reasons," said Uri Landesman, president of hedge fund Platinum Partners in New York.
He said that if the market thought the deal was in real danger, S & P 500 will slide below 1400. He is now near1, 435, close to two-month high.
CBOE volatility index rose by 11.5 percent to 17.36, but remains relatively stable. Its 14 - 50 - and 200-day averages are within 1.1 points.
Landesman said stability VIX indicates "the bulls have control of this market continues."
Banks and energy stocks - groups that excel in periods of economic growth - has led the recent growth, indicating that the transition to a focus on the growing economy, as Wall Street looked past the budget negotiations.
Defensive sectors led recession on Wednesday, with the S & P index of the health sector by 1.1 percent.
Index Dow Jones Industrial Average fell 98.99 points, or 0.74 percent, to 13,251.97. S & P 500 lost 10.98 points, or 0.76 percent, to 1,435.81. Nasdaq Composite fell 10.17 points, or 0.33 percent, to3, 044,36.
Herbalife Ltd shares fell 12.1 percent to $ 37.34 after William Ackman, one of the greatest managers in the world of hedge funds, said he was closing stock of weight management products company.
Oracle shares helped cap losses Nasdaq after the company reported earnings that beat expectations on strong sales growth of the software. Oracle jumped 3.7 percent to $ 34.09.
Knight Capital Group Inc climbed 5.4 percent to $ 3.51 after it agreed to be acquired Getco Holdings in a deal valued at $ 1.4 billion. Shares, which almost collapsed after trading error in August, is still down about 70 percent this year.
Shares of Chinese media advertising provider Focus Media Holding Ltd jumped 6.7 percent to $ 25.52 after it agreed to be bought by a consortium of private equity funds led by Carlyle Group about $ 3.6 billion.
The data showed housing permits touched its highest level in nearly 4-1/2 years in November. PHLX housing index fell 0.8 percent, but was 66.4 percent this year, the housing market turned the corner.
About 6.9 billion shares changed hands on the New York Stock Exchange, NYSE, Nasdaq and MKT, just above the daily average this year of about 6.45 billion shares.
Promotion and reduction issues were nearly even on the NYSE and Nasdaq. Reuters.com
Currencies
Ian choppy as BOJ decision looms; NZD affected by data
Ian languished near a 20-month low against the U.S. peers on Thursday, but was choppy in thin trading conditions yen is probably suffers case of cold feet, as the Bank of Japan policy decision loomed.
Facing intense political pressure, the Bank of Japan is ikely to expand its 91-trillion yen ($ 1 trillion) asset purchase and loan program by 10 trillion yen, and may consider the adoption of a 2 per cent inflation. Decision due between 0330-0530 GMT.
The prospect of the yen pouring into the economy have helped to control the Japanese currency fell nearly 9 percent on the dollar since September.
Dollar rate was 84.16 yen, rising higher than 84.62 am, a level not seen since April 2011. The euro has brought 111.14 yen after hitting a 16-month peak of 112.59.
"The pressure on the Bank of Japan to act strong," Sebastian said Gali, a strategist at Societe Generale.
"At the same time, they will be keen to maintain their authority and insists that a bigger problem is afiscal one. Probability that the Bank of Japan can do enough to frighten the markets too much, but leave the major decisions in January."
With markets already very bearish on the yen, traders warn no decisive action could see the shorts squeezed, leading to a sharp rebound in the Japanese currency.
"We can see the yen to regain its position in the next 24 hours of trading should Masaaki Shirakawatake large position in maintaining the independence of the central bank," said David Song, currency analyst at DailyFX.
The yen and the U.S. dollar, and seen as a safe refuge currencies saw some respite after talks to resolve the U.S. financial impasse seemed to have taken a turn for the worse.
Republicans have announced plans to put an alternative plan tax to a vote in the House this week that would largely ignore the progress made in the negotiations that led to U.S. President Barack Obama has threatened to veto it, Congress must approve.
"Democrats and Republicans continue to scare each other to the top. They basically managed to get in a soft wave of profit taking in the market," Ghali added.
This saw the retreat euro to $ 1.3204 a 8-1/2 month high near $ 1.3309. As a result, the dollar index rebounded to 79.414 from 79.008.
Australian dollar took a hit as well, slipping one week low of $ 1.0470, to be more full percent below the three-month peak lastweek author.
Also under pressure, New Zealand currency fell to near two-week low near $ 0.8329 after data showed the economy slowed more than expected in the third quarter.
Gross domestic product expanded 0.2 percent in the simple quarter, half of market expectations, and after a revised down 0.3 percent growth in the second quarter.
"This means there is a greater chance of rate cut than going in 2013, but our baseline scenario remains stable policies over time in the future," said Michael Turner, strategist at RBC Capital Markets. Reuters.com
