Business Blog Posts

Thursday's U.S. data showing demand for a range of long-lasting U.S. manufactured goods surged in November and consumer spending rose for a fifth straight month reinforced expectations for strong economic growth in the fourth quarter.

"We've had a good run, helped by quantitative easing and better economic data," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin. "We've broken out of ranges, and it can go higher in 2011." MSCI world equity index held steady just below Thursday's peak, which was its highest since September 2008, set just before the collapse of Lehman Brothers.

The index is up nearly 10 percent this year.

Fund tracker EPFR said investor focus has shifted from bonds to equities in the final weeks of 2010, with equity funds globally taking in a net $4.5 billion for the week ending December 22. Bond funds saw redemptions totaling $2.3 billion.

The Thomson Reuters global stock index was also steady.

The FTSEurofirst 300 index was down around 0.1 percent as concerns about the impact of the euro zone debt crisis weighed on the banking sector.

Ratings agency Fitch downgraded Portugal on Thursday, citing burgeoning debt levels and a tough financing environment, in a move which analysts said had been largely expected by markets.

The downgrade puts Fitch's rating for Portugal on a par with Moody's A1 rating, but still two notches above that of Standard and Poor's A-minus.

Trading was very light, with markets closed in Germany, Italy, Spain, Denmark, Finland, Norway, Sweden, Switzerland, Greece, Austria, Hungary, and Iceland. Wall Street is also closed.

The UK stock market will close at 7:30 a.m. EST while Euronext stock markets will close at 8 a.m. EST.

Emerging stocks were also unchanged on the day.

U.S. crude oil rose more than 1 percent to $91.41 a barrel as unusually cold weather fueled demand and depleted supplies.

Snow and more frigid temperatures were predicted in parts of Europe over the weekend, threatening to prolong chaos at airlines and rail networks and further boost fuel demand.

The bund future fell 32 ticks.

The dollar was down 0.1 percent against a basket of major currencies while the euro shrugged off the Portuguese rating downgrade to rise slightly to $1.3126.

(Editing by Toby Chopra)

European benchmark ICE Brent crude for February hit $94.74 a barrel, its highest level since October 2008, before easing to around $93.90 by 6:15 a.m. EST in thin trade.

Global benchmark U.S. crude futures, which hit a 26-month high of $91.63 on Thursday, did not trade on Friday with the NYMEX floor closed for the Christmas holiday.

Brent, trading at a premium to U.S. crude, has surged partly due to a severe cold snap in continental Europe and Britain.

Snow was forecast in parts of Europe over the weekend, threatening to prolong chaos at airlines and rail networks and further boost fuel demand.

Analysts said oil could continue its rally on strong global demand and falling inventories in 2011, which promises to be a strong year for risk assets as confidence about the global economic recovery picks up.

The 19-commodity Reuters-Jefferies CRB index closed on Thursday at its highest level since October 2008.

"With the continuous commodity Index posting new all time highs and the S&P rising on supportive breadth, it is difficult not to maintain our bullish commodity and equity outlook heading into the first quarter of 2011," Barclays Capital said in a note.

"The latest surge has brought $100 per barrel within range for Brent crude in particular."

INFLATIONARY WORRIES

Oil's more than 30 percent climb from this year's low in May has revived concerns that prices could once again impact economic growth for fuel importing countries.

South Korea's finance minister warned on Friday that the fifth-largest buyer of crude oil could face inflationary pressures next year.

In India, the government is expected to decide next week whether to increase state-set fuel prices to cushion domestic oil retailers

China, the world's second-biggest energy user, raised gasoline and diesel prices to record levels on Wednesday as it aimed to encourage refiners to boost supplies to meet demand.

The government said it would prohibit transport companies passing the rise on to the population. But higher commodity prices helped raise Chinese consumer inflation to a 28-month high in November.