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Market Update : 
Weak Bank Earnings and Oil Weigh on Markets
Author: 123jump.com Staff
123jump.com
Last Update: 4:58 PM EST January 16 2008


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Economic assessment from twelve regions reported in the so called Beige Report suggested that economy continued to grow at a slower pace. Holiday sales in general were disappointing and demand for automobiles was weak. Nonfinancial sectors reported robust demand. Market averages rallied after the report but at close three popular averages fell. Ambac, the bond insurer, plunged 34% after it cut its dividend and revealed a plan to raise $1 billion.

 
Bond Yields decreased on 10-year U.S. bonds to 3.69% and 30-year bonds increased to 4.28%.

[R]Commodities, Metals, and Currencies[/R]

Crude oil fell $1.09 to close at $90.81 per barrel for a front month contract, natural gas decreased 6 cents to $8.14 per mBtu, and gasoline futures decreased 3.09 cents to close at 227.83 cents per gallon.

Gold decreased $22.60 in New York trading to close at $880.00 per ounce, silver closed down 41 cents to $15.895 per ounce, and copper for front month delivery decreased 6.30 cents to 317.85 per pound and in London copper futures increased $237.50 to $7,151.50.

Dollar edged higher against euro to $1.46560 and higher to 107.5150 yen.



[R]3:00PM New York, 8:00PM London - U.K unemployment rate rises to 74.7% in the quarter to November 2007.[/R]

Stocks in London declined after U.K. real estate professionals said the housing market in December was the worst in fifteen years.

In London trading FTSE 100 fell 1.37% or 82.7 to 5,942.90. Of the 102 FTSE 100 stocks 39 rose and 63 declined.

British Land Company Plc led advancing stocks with a rise of 4.37%. Other homebuilders gained as well. Hammerson Plc jumped 2.97% and Persimmon edged up 1.96%.

The Royal Institute of Chartered Surveyors said today the number of real estate agents and surveyors saying prices fell surpassed those reporting gains by 49.1% in December from 40.6% in November.

Furthermore, a measure of expected prices dropped to the lowest since 1998 at minus 62 from minus 47 in November. The RICS survey also showed that prices declined in all the 42 regions surveyed.

The Office of National Statistics reported today on its Web site that the employment rate for people of working age rose 0.3% from the previous quarter to 74.7% in the three months to November 2007. The rate also climbed 0.1% from a year earlier.

Furthermore, the number of people in employment for the three months to November 2007 was up 175,000 over the quarter and up 263,000 over the year at 29.36 million, the highest since records began in 1971.

According to ONS, total hours worked per week were 939.5 million, up 1.2 million over the quarter and up 11.8 million over the year.

However, unemployment rate was down 0.1% both over the previous quarter and over the year at 5.3%. The number of unemployed people decreased by 13,000 over the quarter and by 29,000 over the year to 1.65 million.

The claimant count also declined by 6,400 over the previous month and 131,400 over the year.

In a separate report, the ONS said average earnings including bonuses, rose by 4.0% in the year to November 2007, unchanged from October.

Average earnings excluding bonuses or regular pay, rose by 3.6 per cent in the year to November, unchanged from October.
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