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US stocks dance to the tune of latest developments in Europe

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For the day, that ended on Monday, 05 December 2011, Dow ended higher by 78.41 points(0.65%) at 12,097.83. The Nasdaq ended higher by 28.83 points (1.1%) at 2655.76. The S&P 500 ended higher by 12.08 points (1.08%) at 1,257.08. Dow was trading higher by 165 points earlier during the day.

During the mid session hours, the major market averages pared their gains after headlines indicated that S&P was placing Germany and France on 'creditwatch negative.' This knocked equities back from their highs, and then another headline that S&P will place all 17 Euro nations on ratings downgrade watch sent markets to fresh lows.

Stocks managed to hold on to gains on Italy unveiled a new austerity plan and reports that the European Central Bank is preparing an injection of EUR1 trillion for the EU through additional bond buying.

In the currency market on Monday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.4% earlier during the day. It then managed to pare its losses and spike up and ended at almost unchanged level as against last Friday's close.

Economic data for the day at showed today that a key measurement of the U.S. services industry showed slowing growth in November. The Institute for Supply Management said its non-manufacturing index slowed from 52.9% in October to a reading of 52.0% in November, its lowest level since Jan. 2010.

Separately, the Commerce Department estimated that new orders for U.S.-made factory goods declined by 0.4% in October after falling a downwardly revised 0.1% in September.

Crude prices remained volatile for most part of the day and ended marginally lower on Monday, 05 December 2011 at Nymex. Volatile dollar also affected prices. Light and sweet crude for January delivery rose $0.03 (0.01%) to $100.99 a barrel on the New York Mercantile Exchange on Friday. Prices rose to a high of $102.44 during intra day trading.

Precious metals ended lower on Monday, 05 December 2011 at Comex. Prices dropped despite a weak dollar. Gold for February delivery ended lower by $16.8 or 1%, to end at $1,734.5 an ounce on the Comex division of the New York Mercantile Exchange on Monday. It fell to a low of $1,721.1 during intra day trading. On Monday, silver prices for March delivery fell $0.31 or 1% to end at $32.37. Last week, silver gained 5.4%. For the month of November, silver lost 4.7%.

For every stock that lost ground more than three gained on the New York Stock Exchange, where nearly 893 million shares traded. Composite volume topped 4.1 billion.

Indian ADRs closed mostly higher on Monday. VSNL and led the winners soaring 1.9% and 1.2% respectively. slipped 1.3%.

For tomorrow, no economic data are expected. Couple of earning reports will also trickle in.

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