NEW YORK: The US dollar gained across the board on Wednesday and tempered a much better-than-expected reading of business activity in the US Midwest, which failed to add more upside to this year’s huge stock market recovery.
European shares snapped a six-day winning streak in thin trade, and US stocks eased, also in light trading. Earlier, Japan’s Nikkei slipped 0.9 percent in its final 2009 session. The Nikkei banked a 19 percent gain for the year, and regional European shares were looking at annual gains of about 25 percent, as was the benchmark Standard & Poor’s 500 Index.
The dollar rallied as investors looked for signs a recovery is taking hold. Some traders have moved to safer assets like the dollar to lock in profits after a strong 2009.
After midday, the Dow Jones Industrial Average was down 15.94 points, or 0.15 percent, at 10,529;47. The Standard & Poor’s 500 Index was down 2.69 points, or 0.24 percent, at 1,123.51. The Nasdaq Composite Index was down 5.06 points, or 0.22 percent, at 2,283.34. The FTSEurofirst 300 fell 0.4 percent to end at 1,043.24 points, pulling back from a 15-month closing high on Tuesday.
The dollar climbed to its highest since early September against the Japanese yen. The dollar was up slightly against a basket of major currencies, with the US Dollar Index up 0.08 percent at 77.891.
The euro was down 0.10 percent at $1.4338.
Against the yen, the dollar was up 0.50 percent at 92.46 after earlier reaching a high of 92.77 yen, its highest since Sept. 8.
US gold futures dropped for a second day in a row, trading below $1,100 an ounce as a dollar rally against the euro dampened demand for the metal as a hedge against paper currency depreciation.
Asian stock markets fell as year-end trade dwindled, with profit-taking pulling down shares. On the final trading day of the year, Japan’s Nikkei average slid 0.9 percent, but it gained 19 percent in 2009 after tumbling 42 percent in 2008 — the biggest loss in its 58-year history.
Japan Airlines Corp. stock tumbled as much as 32 percent to a record low on Wednesday on growing expectations the struggling carrier was headed for bankruptcy under a state restructuring plan. With $16 billion in total debts a JAL failure would rank as the 6th-biggest ever in Japan.
Shares in JAL closed 23.86 percent lower at 67 yen, knocking its market value down to about $2 billion. The stock earlier tumbled as low as 60 yen and volume surged to nearly 400 million shares, a record since the carrier relisted in 2002.
The MSCI index of Asia Pacific stocks outside Japan edged up 0.05 percent to 411.63, below its 2009 high set in November, but still up nearly 66 percent this year.
Meanwhile, world oil prices rose toward $80 on Wednesday on news of falling US crude reserves, which indicated stronger demand in the world’s biggest energy consuming nation, traders said.
New York’s main futures contract, light sweet crude for delivery in February, added 59 cents to $79.46 a barrel. Brent North Sea crude for February won 72 cents to reach $78.36 in late afternoon London trading.