Global Commodity Prices on Dollar Rising

Stocks on Wall Street are fluctuating between gains and losses as the rising US dollar pushes down commodity prices. Hong Kong stocks advanced for the first time in three days as shares of raw material producers rose after commodity prices increased yesterday and gold climbed to a record.




In early afternoon trading, the Dow Jones Industrial Average is down 6 points to 11,353 after being in positive territory late in the morning session.




The S&P 500 index is holding up better, having gained 0.1% to 1225 while the Nasdaq Composite is up 0.2% at 2603.




The dollar's gain sent commodity prices lower, hitting the stocks of materials, energy and industrial companies. Dow components DuPont fell 1.2% while Caterpillar shed 0.8%.




McDonald's fell 2% after reporting same-store sales rose 4.8% in November, driven by its McRib sandwich, but fell short of analysts' estimates.




Other markets: Europe mixed, Asia down




European stocks were mixed with most markets finishing off their lows, helped by some encouraging economic news and speculation about mergers and acquisitions.




The Stoxx Europe 600 index finished 0.4% higher at 274.98. The UK's FTSE 100 was down 0.2% to 5794.53, Germany's DAX was down 0.4% at 6975.87 and the French CAC-40 index was 0.6% higher at 3831.98.




Asian stocks ended mostly lower, with Chinese and Hong Kong shares falling on worries an interest-rate increase could be coming over the weekend after Beijing advanced the release of monthly inflation data to Saturday.




Korean stocks were hurt by renewed geopolitical tensions, while Japanese shares advanced as exporters drew support from a weakened yen.




The Nikkei Stock Average climbed 0.9% to 10232.33 for its highest finish since June 21. But most other major benchmarks ended lower, with Australia's S&P/ASX 200 dropping 0.6% to 4699.92, Korea's Kospi falling 0.4% to 1955.72 and India's Sensex declining 1.2% to 19696.48.




The Shanghai Composite dropped 1% to 2848.55 and Hong Kong's Hang Seng Index fell 1.4% to 23092.52.




Commodities: Oil, gold down




Oil prices tumbled after a government report showed a sharp increase in US fuel inventories.




Light, sweet crude for January delivery gave up $US1.25, or 1.4%, to $US87.45 a barrel in New York. Brent crude on the ICE futures exchange lost $US1.15, or 1.3%, at $US90.24 a barrel.




Gold futures fell below $US1400 as rising US Treasury yields made the metal a less attractive investment.




The most actively traded gold futures contract, for February delivery, was down $US15.70, or 1.1%, at $US1393.30 an ounce in New York.




Currencies: Dollar up, euro down




The US dollar rose for a third day against a basket of major rivals after a tentative deal on taxes pushed Treasury bond yields higher.




The dollar rose to ?84.26, up from ?83.51 on Tuesday. The euro fell to $US1.3225 from $1.3259.




The UK pound gained 0.1% to $US1.5775.




Cnooc Ltd., China?s biggest offshore oil producer, rose 1.1 percent. Zijin Mining Group Co., China?s largest gold producer, advanced 4.1 percent. Xinjiang Goldwind Science & Technology Co., a China-based maker of wind turbines, surged 7.6 percent after winning 5.7 billion yuan ($857.5 million) of supply contracts in China. Foxconn International Holdings Ltd., the world?s No. 1 contract maker of mobile phones, climbed 3 percent after President Barack Obama said he?ll agree to Bush-era tax cuts.




?Obama extending tax cuts should help support the economic recovery,? said Terrace Chum, who helps manage about $6 billion at MFC Global Investment Management in Hong Kong. ?Investors are still mindful of policy tightening for China. That will set the tone for the market.?




Hong Kong?s Hang Seng Index climbed 0.8 percent to 23,428.15 as of the 4 p.m. local time close, erasing losses of as much as 0.6 percent earlier. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies rose 0.9 percent to 12,922.24.




The Hang Seng Index has increased 7.1 percent this year, on expectations that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China?s steps to curb rising property prices. Shares in the gauge trade at an average 14.7 times estimated earnings, compared with about 17.2 times at the start of the year.




Shares of raw material producers advanced after crude oil for January delivery rose 0.2 percent to settle at $89.38 a barrel in New York yesterday on speculation the U.S. may extend stimulus measures, bolstering fuel demand in the world?s largest oil-consuming country. Copper futures climbed 0.5 percent in London yesterday, while gold rose to an all-time high of $1,427.55 an ounce in New York.




Cnooc increased 1.1 percent to HK$18.36. Jiangxi Copper Co., China?s biggest producer of the metal increased 2.4 percent to HK$25.25. Zijin Mining jumped 4.1 percent to HK$7.59. Real Gold Mining Ltd. gained 2.2 percent to HK$14.94.




Xinjiang Goldwind surged 7.6 percent to HK$18.34. The company said it won contracts valued at 920.1 million yuan to supply wind-turbine electricity generators to China Three Gorges New Energy Corp. That?s in addition to contracts worth 4.77 billion yuan for eight other wind-turbine projects in China.




Exporters advanced after Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the George W. Bush administration?s tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31. ?This compromise is an essential step on the road to recovery,? Obama said.




Foxconn increased 3 percent to HK$5.77. Cosco Pacific Ltd., Asia?s third-largest container-terminal operator, jumped 3.9 percent to HK$13.30.




?Valuations have become attractive following the decline in November,? said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. ?Prospects of further quantitative easing in the U.S. and tax cuts in the U.S. are positive for Hong Kong stocks.?




Tsingtao Brewery Co., the Chinese beer company founded by German settlers more than a century ago, advanced 5 percent to HK$42.95. The company said it will acquire Shandong Xin Immense Brewery Co. for 1.87 billion yuan.




Hong Kong Rents




Commercial property landlords in Hong Kong gained amid prospects of rising rents in the Chinese city. Prime office rents will rise as much as 35 percent in 2011 because of increased demand and limited supply, Gavin Morgan, head of markets at Jones Lang LaSalle Inc. said at a media briefing today.




Wharf (Holdings) Ltd., the owner of Times Square and Harbour City shopping malls and office complexes in the city, surged 5.8 percent to HK$58. Sun Hung Kai Properties Ltd., the world?s biggest developer by market value, gained 1.5 percent to HK$131.50.




Three stocks advanced for each that fell in the 45-company Hang Seng Index. Futures on the gauge climbed 1.2 percent to 23,459.