Market wrap: Another strong night on commodity markets boosted European markets but Wall Street failed to follow through.
The three major US stock indexes all finished 0.3% lower as oil's charge to a seven-month high above $71 raised concerns about its dampening effect on consumers. "If gasoline prices stay elevated, it will dramatically dilute the tax-cut portion of the Obama stimulus plan," said a US equity analyst. A disappointing auction of 10-year Treasury notes also weighed on markets.
Oil and gas companies provided most of the green on US bourses, with banks, REITs and airlines all shedding around 2%. Crude advanced 2% to recently trade at $71.34 after another surprise decline in US inventories.
A rally in gold to $965 recently faded back to yesterday morning's price range, currently around $954.20. Spot prices for iron ore into China hit their highest level in four months last week, rising 11%. Base metals were mixed but held most of yesterday's big gains and are all close to 2009 highs.
Strong buying in the big miners overseas has encouraged futures traders to price in a positive start to the local market. The SPI rose 5 points to 4025.
One potential bump in the road today: the May unemployment figures are due to be released at 11.30 am. A bad result would dent optimism about the improving economic outlook.
