Asian stocks hit record high as dollar falters

Asian stocks outside of Japan hit a lifetime high on Monday, but the dollar headed lower after a solid U.S. jobs report failed to dent expectations for another cut in U.S. interest rates.
On Friday, the dollar rose sharply and U.S. stocks gained after data showed September U.S. jobs growth of 110,000, the highest since May. August's jobs fall was reversed to a gain and July's numbers were revised up.
But the dollar was pressured again on Monday as analysts concluded the U.S. jobs market was still weakening and the Fed Reserve could cut rates again before year-end.
"The market cooled off a bit after the non-farm payrolls on their Fed easing expectations," said Markus Ammann, director of global foreign exchange at Bayerische Hypo Und Vereinsbank.
The Aussie hit a new 23-year high of $0.9023 in early trading, while the Japanese yen, which is used to fund carry trades, came under selling pressure.
The dollar index, a gauge of the greenback's value against a basket of major currencies, was at 78.34 above last week's all-time low of 77.66. After Friday's jobs data, the index had risen as high as 78.819.
Trading volumes in Asia were thinned by a holiday in Japan, and traders expected the dollar to be volatile, with markets in Canada and the United States also closed on Monday.
Traders expected the euro to be listless ahead of a meeting of euro zone finance ministers in Luxembourg later in the day.
The euro changed hands at 1.4135, little changed from late Friday.
By 10:33 p.m. EDT, MSCI's measure of Asia Pacific stocks excluding Japan had risen 1.5 percent to 555.87 points, after hitting a record 556.43 earlier in the session.
On Friday, the Dow Jones industrial average closed up 0.7 percent, while the Nasdaq Composite Index ended 1.7 percent higher.
Australian shares touched a lifetime high, with U.S.-focused firms such as James Hardie Industries gaining after the solid U.S. jobs data boosted optimism about the U.S. economy, while firmer base metal prices boosted mining firms. The benchmark S&P/ASX 200 index rose as much as 1.2 percent to an all-time high of 6,684.4, surpassing its previous peak set on October 3.
"One of the concerns that investors had was whether the U.S. economy was going to slow and how far it was it was going to go down," said Tony Russell, senior equities adviser at ABN AMRO Morgans.
"So any indication that suggests that business is not going to be as bad as what they think certainly has given optimism to future earnings to companies there and that's flowing on to us as well."
Singapore's benchmark Straits Times Index rose 1.3 percent in opening trade to a new all-time high of 3,871.87 points.
Seoul shares rose to a record as LG.Philips LCD surged a day ahead of what are expected to be solid earnings results, while STX Pan Ocean rallied after UBS said it had acquired a stake in the shipping firm.
Hong Kong's Hang Seng rose 2 percent, while Taiwan's benchmark index Oil prices fell, extending the previous session's losses, as investors turned their focus to slower growth in the U.S. economy and after hurricane concerns in the Atlantic abated.
U.S. crude fell 36 cents to $80.86 a barrel in Globex electronic trading.
Gold was flat, with analysts eyeing continued weakness in the U.S. dollar. Cash gold was at $741.40/742.20, barely changed from $741.10/741.90 in New York on Friday.

Oil holds above $81 on winter stocks worries

Oil held above $81 a barrel on Friday, clinging to its first gains in five days after data showing unexpectedly low distillate and natural gas stocks in the United States stirred concern about peak winter supplies.
U.S. crude fell 19 cents to $81.25 a barrel by 0616 GMT after rallying $1.50 on Thursday, its first rise in a week. Brent crude lost 34 cents to $78.63 a barrel.
Thursday's gains were fuelled by data showing U.S. natural gas stocks rose less than expected last week, expanding by 57 billion cubic feet (bcf) instead of the 67 bcf expected by analysts, the Energy Information Administration said.
That followed figures on Wednesday that showed distillate supplies, including heating oil, dropped by 1.2 million barrels last week, about 9 percent below last year's average.
Taken together, the data painted a picture of tighter heating fuel supplies ahead of winter, although forecasters said separately that they expected another warmer-than-average winter this year.
A resumption in the dollar's decline on Thursday, snapping a three-day rally, also aided oil. The dollar steadied just above a record-low against the euro on Friday, as dealers awaited September U.S. payrolls data, expected to keep the Federal Reserve on track to cut interest rates later this month.
"Crude prices might gain further as the weaker dollar could encourage funds to use oil as a hedge," said Koo Ja-kwon, crude analyst at Korea National Oil Corp (KNOC).
Oil has traded around the $80-mark for about three weeks despite OPEC's agreement on September 11 to boost output by 500,000 barrels per day (bpd) from November 1.
ConocoPhillips and Valero Energy Corp said on Thursday their Los Angeles-area refineries were expected to resume normal operations during the week after being shut down Wednesday morning by a power outage.
Both Valero's 135,000-bpd refinery and Conoco's 139,000-bpd plant were working on Thursday through processes to restart from cold shutdowns

Dow tops 14,000

Stocks rose on Monday, sending the Dow Jones industrial average above 14,000 for the first time since July, as investors snapped up technology shares, including IBM and Intel Corp at the start of the fourth quarter.
The Dow Jones industrial average was up 105.02 points, or 0.76 percent, at 14,000.65. The Standard & Poor's 500 Index was up 9.19 points, or 0.60 percent, at 1,535.94. The Nasdaq Composite Index was up 18.21 points, or 0.67 percent, at 2,719.71.

Dollar touches fresh lows

The dollar hit a record low against the euro for the third session on Monday on concerns that the troubles in the housing sector could crimp economic growth and trigger more interest rate cuts in United States.
Trade was light with market attention shifting to housing and consumer confidence data due on Tuesday.
Investors are worried that additional monetary easing after last Tuesday's half-percentage-point rate cut by the Federal Reserve could further erode the dollar's appeal against higher yielding currencies such as the euro.
"We have interest rate differentials and growth differentials working against the dollar and speculators continue to seek record highs against the euro," said Michael Woolfolk, currency strategist at Bank of New York in New York. "There is simply no reason to be buying the dollar."
Several Wall Street firms have downgraded their outlook on U.S. gross domestic product over the next several quarters.
The euro rose earlier to a record high at $1.4130, according to Reuters data. It last traded at $1.4095, almost flat on the day. Analysts saw technical resistance at $1.4210.
The dollar traded at 114.94 yen, 0.43 percent lower on the day.
Still, analysts say the recent sharp declines in the dollar may provide to some investors a short-term buying opportunity.
"The U.S. dollar feels quite weak, but I wouldn't be surprised to see some short-term profit-taking, people buying some U.S. dollar and selling some euro, but I do not expect it (the euro) to move too much lower than here," Firas Askari, head currency trader at BMO Nesbitt Burns in Toronto.
Interest rate futures are pricing in a roughly 66 percent chance of a 25 basis point Fed rate cut in October, down from 72 percent at Friday's close. At least one more quarter-point cut has been factored in by year-end on top of any move at the Fed's next meeting in October.
"It's all about interest rates. Once the Fed starts an easing cycle, I don't believe it's ever gone one move and out. I am confident we will have more easing, at least 25 (basis points), probably another following early next year," said Askari.
The dollar index, which tracks the dollar's move versus a basket of six currencies, slipped to a 15-year low of 78.313, but recouped some losses to trade at 78.487.
Market players are keeping a close eye on whether the dollar index breaks the all-time low of 78.19 struck in September 1992, a level analysts said would provide a key test of whether the U.S. currency's sell-off deepens or pauses.
Investors shrugged off more criticism of the European Central Bank by the French government. An aide to French President Nicholas Sarkozy in an interview published on Sunday repeated recent comments arguing the euro's strength is eroding the competitiveness and productivity of businesses.
ECB President Jean-Claude Trichet dismissed the criticism, calling it an outdated debate and saying the central bank's first mandate was to ensure price stability.

Wall St slips as dollar's fall raises worries

U.S. stocks fell on Thursday as weakness in the dollar raised worries about inflation two days after the Federal Reserve's aggressive interest-ate cut and FedEx Corp. (FDX.N: Quote, Profile, Research) cut its earnings outlook.
Oil prices touched a record high above $84, adding to the inflation worries.
The move by package delivery company FedEx raised doubts about growth in the economy. In addition, the National Retail Federation said U.S. holiday sales are expected to rise at their slowest pace in five years.
A drop in the dollar to a record low against the euro, now worth more than $1.40, was a worrying side effect of the Fed's decision Tuesday to cut benchmark lending rates by a hefty half a percentage point, analysts said. The Fed cut rates to keep the economy from slipping into recession.
Financial stocks, which surged following the Fed's move, were among the top drags. The S&P financial index (.GSPF: Quote, Profile, Research) was down 1.8 percent. Home builders' stocks also dropped.
"It's waves of profit-taking, and concern about the lower dollar, which is in reaction to the Fed cutting rates as aggressively as it did," said Marc Pado, U.S. market strategist in the San Francisco office of Cantor Fitzgerald & Co.
The Dow Jones industrial average (.DJI: Quote, Profile, Research) was down 64.30 points, or 0.47 percent, at 13,751.26. The Standard & Poor's 500 Index (.SPX: Quote, Profile, Research) was down 12.43 points, or 0.81 percent, at 1,516.60. The Nasdaq Composite Index (.IXIC: Quote, Profile, Research) was down 17.77 points, or 0.67 percent, at 2,648.71.
While a weakening dollar can give a lift to shares of companies that are big exporters, it also threatens to worsen inflation because of the United States' heavy reliance on imported goods. A weaker dollar may make owning U.S. shares less attractive to foreign investors.
FedEx lowered its full-year earnings outlook due to the weaker-than-anticipated economic environment, sending its shares down 1.8 percent to $105.55.
Shares of Circuit City Stores Inc (CC.N: Quote, Profile, Research) sank 18.4 percent to $8.63 after the home electronics seller reported a larger-than-forecast quarterly loss.
Bear Stearns Co Inc (BSC.N: Quote, Profile, Research) shares declined 0.4 percent to $115.24, reversing earlier gains, when they climbed as high as $119.50. The investment bank posted a sharply lower profit but its chief financial officer Sam Molinaro said the worst of times are behind the company. He said he sees business returning to normal in 2008.
Among retailers, shares of Home Depot Inc. (HD.N: Quote, Profile, Research) fell 2.7 percent to $35.22. The S&P retail index (.RLX: Quote, Profile, Research) was down 2.5 percent.
At midday, stocks had briefly pared losses after stronger-than-expected data on factory activity in the U.S. mid-Atlantic region from the Federal Reserve Bank of Philadelphia.

Euro hits record high vs dollar just shy of $1.40

The euro struck a record high against the dollar on Thursday, extending gains after the Federal Reserve's deep half percentage-point cut in interest rates earlier this week sparked a broad sell-off in the U.S. currency.
The euro climbed to $1.3997 on electronic trading platform EBS, the highest since the launch of the single European currency in 1999 and just shy of the psychologically important $1.4000 level.

AAR Corp (AIR.N: Quote, Profile, Research), a provider of parts and maintenance services to the aviation industry, said it is maintaining its company-wide forecast of top line growth in the mid teens for the full year.
In repsonse to an analyst's query in a conference call, a company executive said the company still sees near-term margins of 10 percent and longer-term margins of 12.5 percent.
Earlier, the company had reported first-quarter earnings of 36 cents a share, which fell short of analysts' expectations of 39 cents a share.