Shares steady after rally, dollar jumps

 World stocks stalled on Thursday as traders were cautious after equities hit an 18-month high, while the U.S. dollar climbed to a three-week high against a basket of currencies on concerns about more budget wrangling in Washington.
Data suggesting some momentum in the U.S. economy as the year ended showed private-sector employers stepped up hiring in December, allowing for the upward tick in stocks and further supporting the greenback.
President Barack Obama and congressional Republicans face two more months of tough talks on spending cuts and an increase in the nation's debt limit as the hard-fought deal to avert the "fiscal cliff" of automatic tax hikes and spending cuts covered only taxes and delayed decisions on expenditures until March 1.
"There's still some clouds over the horizon, with the fiscal issue of the government," said Jeff Meyerson, head of trading at Sunrise Securities in New York. "We don't know how they're going to pan out, but in all likelihood there's not going to be a calamity."
The MSCI world equity index <.miwd00000pus> advanced less than 0.1 percent, reversing a dip through most of the session after hitting an 18-month high on Wednesday.
A European equity benchmark <.fteu3> ended up 0.45 percent after hitting its highest intraday level since March 2011, boosted by a belated reaction in Swiss stocks due to a holiday.
The Dow Jones industrial average <.dji> was up 7.03 points, or 0.05 percent, at 13,419.58. The Standard & Poor's 500 Index <.spx> was up 1.57 points, or 0.11 percent, at 1,463.99. The Nasdaq Composite Index <.ixic> was up 2.49 points, or 0.08 percent, at 3,114.75.
The euro tumbled against the dollar as investors grew worried about more budget fights ahead. Analysts say the market could be set up for volatility as Obama and congressional Republicans tussle over the next two months.
The dollar was up 0.4 percent against a basket of major currencies <.dxy> at a three-week high of 80.13, although it slipped 0.4 percent against the yen to 86.97.
"We really just kicked the can down the line and we're set up for another fight on the hill in the next month and a half or so," said John Doyle, currency strategist at Tempus Consulting in Washington.
The euro, which had touched an 8-1/2 month high against the dollar on Wednesday, was down 0.6 percent at $1.3110.
Investors will now turn their attention to Friday's December U.S. employment report. It is expected to show modest job growth of around 150,000, compared with 146,000 in November.
The ADP National Employment Report showed Thursday the U.S. private sector added 215,000 jobs in December, comfortably above economists' expectation of a 133,000 gain. Following the recent rally in equities, any disappointment in Friday's payrolls number could trigger a profit-taking sell-off.
DOLLAR JUMP HITS COMMODITIES
The dollar's strength and rising oil supplies pushed crude prices lower, with Brent down 0.1 percent to $112.31 a barrel. U.S. crude futures were down 0.1 percent at $93.15.
Analysts expect oil prices to drop in 2013 as supply outweighs demand, especially after U.S. crude production hit a 19-year high in 2012.
Gold futures followed commodities lower and were down about 0.6 percent at $1,676.41 an ounce.
Thursday's retreat across riskier asset markets might have been sharper but for data showing activity in China's services sector and at U.S. factories expanded in December, brightening the outlook for global growth.
China's official purchasing managers' index for the non-manufacturing sector rose to a four-month high in December, adding to signs of a revival in the world's second-largest economy.
U.S. Treasury debt prices eased, pushing yields to three-month highs after the U.S. private jobs data cut into the appeal of safe U.S. government issues. Treasuries had already sold off sharply on Wednesday following the U.S. government deal to avoid the so-called "fiscal cliff."
The benchmark 10-year U.S. Treasury note was down 7/32, the yield at 1.8618 percent, a 15-week high.

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Stocks edge lower as next fiscal showdown looms

Stock indexes turned lower Thursday afternoon after the Federal Reserve said its policymakers are split over how long to continue a bond-purchasing program intended to stimulate the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then dipped into the red after 2 p.m. Eastern, when the Fed released minutes from its December policy meeting.
As of 2:33 p.m. the Dow was off 27 points at 13,396. The Dow is coming off its biggest gain in more than a year and is still up 450 points this week.
The S&P 500 was down three points at 1,459 and the Nasdaq composite fell eight to 3,104.
At last month's meeting of the Federal Reserve's policymaking committee, the central bank said it would buy $85 billion of Treasury securities and mortgage-backed bonds on an open-ended basis, and also keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent. The unemployment rate was 7.7 percent in November. The government reports the rate for December on Friday.
On Thursday, the Fed revealed a split among its members over how long to continue the bond purchases. Some of its 12 voting members thought they would continue through this year, while others thought they should be slowed or stopped before the end of 2013. Those governors were concerned that the continued bond purchases would destabilize the economy.
Prices of U.S. government bonds fell, sending their yields higher, after the minutes of the Fed's meeting were released. The yield on the benchmark 10-year Treasury note rose to 1.90 percent from 1.84 percent late Wednesday. That means investors are anticipating the Fed will slow its purchases of bonds.
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed. UnitedHealth Group led the Dow lower. The stock fell $1.65 to $52.88 after analysts at Deutsche Bank and other firms cut their ratings on the stock.
"It's natural to relax a bit after such a huge day as yesterday," said Lawrence Creatura, who manages a small-company fund at Federated Investors.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the "fiscal cliff."
That deal gave the market a jump start into the new year. The Dow and the S&P 500 are already up more than 2 percent.
"We're off to a very strong start," Creatura said. "The dominant reason is the resolution of the fiscal cliff. But January is usually a strong month, as investors all shift money into the market at the same time. When the calendar flips, it's as if you're allowed to begin the race anew."
Economists had warned that the full force of the fiscal cliff could drag the country into a recession. The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are likely in the months ahead. Congress must raise the government's borrowing limit soon or be forced to choose between slashing spending or paying its debts.
Ross Stores surged 6 percent in early trading. The retailer said sales at stores open at least a year increased 11 percent during the holiday shopping season. Ross Stores rose $3.65 to $58.09.
Nordstom Inc. surged 2 percent after the department-store chain also reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.21 to $54.84.
Other retailers struggled during the holidays as shoppers held out for deep discounts.
Family Dollar Stores sank 12 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $7.25 to $56.75.
Among other stocks making big moves:
— Transocean jumped $3.33, or 7 percent, to $49.57. The owner of the oil rig that sank in the Gulf of Mexico in 2010 after an explosion killed 11 workers reached a $1.4 billion settlement with the Justice Department.

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Fed split on stimulus plans nudges stocks lower

NEW YORK (AP) — Stocks are fading into the close of trading on Wall Street after the Federal Reserve revealed a split among its policymakers over how long to continue an economic stimulus program.
The market started on a weak note Thursday following mixed holiday sales reports from retailers and the prospect of another fiscal fight looming in Congress over the nation's borrowing limit.
The Dow Jones industrial average finished down 21 points at 13,391. The Dow surged 308 points the day before, its biggest gain in more than a year.
The Standard & Poor's 500 index lost three points to end at 1,459. The Nasdaq composite lost 11 to end at 3,100.
Rising stocks outnumbered falling ones on the New York Stock Exchange. Volume was 3.8 billion shares, above the recent average.

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Private sector job gains offer hope for labor market

WASHINGTON (Reuters) - Private-sector employers shrugged off a looming budget crisis and stepped up hiring in December, offering further evidence of underlying strength in the economy as 2012 ended.
While other data on Thursday showed an increase in the number of Americans filing new claims for unemployment benefits, the trend remained consistent with steady job growth.
"The underlying economy has momentum, and the employment data confirms that. The hope and prayer of the market is that our political leaders don't screw it up," said John Brady, managing director at R.J. O'Brien & Associates in Chicago.
Although Congress this week approved a deal to avoid the so-called fiscal cliff, a combination of sharp government spending cuts and higher taxes that would have sucked about $600 billion from the economy, the budget problems are far from resolved.
The ADP National Employment Report showed the private sector added 215,000 jobs last month after increasing payrolls by 148,000 in November. The report is jointly developed with Moody's Analytics.
The job gains came even as companies worried the economy might fall off the fiscal cliff.
However, the ADP data tends to overstate job gains in December because of a year-end accounting quirk.
"While we are encouraged by the better tone in the ADP employment report, we are cautious about reading too much into it, particularly given its tendency to exaggerate the performance of the labor market in December," said Millan Mulraine, a senior economist at TD Securities in New York.
Still, the report added to other data ranging from consumer spending to manufacturing that have suggested the economy was in a much better shape than previously thought.
It was released ahead of the government's more comprehensive employment report on Friday, which is expected to show employers added 150,000 jobs to their payrolls in December, according to a Reuters survey of economists, up from 146,000 in November.
STEADY JOB GAINS
A separate report from the Labor Department showed initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000 last week. However, claims data for nine states, including California and Virginia, was estimated because of the Christmas and New Year holidays.
The four-week moving average for new claims, a better measure of job market trends, was little changed at 360,000, a sign labor conditions continue to improve at a steady pace.
"The claims data are not always reliable labor market indicators around the holiday season because of issues seasonally adjusting the data, but it is still a somewhat encouraging sign to see the trend in the data remain relatively low," said Daniel Silver, an economist at JPMorgan in New York.
Job gains in the first 11 months of last year averaged about 151,000 per month, not enough to significantly lower unemployment. The jobless rate dropped by 0.2 percentage point to 7.7 percent in November and is expected to have held at that level last month.
Labor market concerns prompted the Federal Reserve to aggressively ease monetary policy, but consensus is diminishing.
Minutes of the U.S. central bank's December 11-12 meeting released on Thursday showed some policymakers thought it would be prudent to slow or stop asset purchases well before the end of this year because of concerns about financial stability.
Stocks on Wall Street ended lower on the prospect of the Fed adopting a less accommodative stance. Prices for U.S. government debt fell, with the yield on the longer-dated 30-year bond touching its highest level since May.
The U.S. dollar rose against a basket of currencies.
The improving labor market tone was also captured by a third report showing planned layoffs at U.S. firms fell in December for the first time in four months, while the overall job-cut total in 2012 was the lowest since 1997.
"The key to job creation is the pace at which companies are willing to hire new workers since it appears they are already retaining existing employees at a high rate," said John Ryding, chief economist at RDQ Economics in New York.
Better job security is helping to support domestic demand. Auto sales rose 9.0 percent last month to a 1.36 million-unit annual rate last month.
Several major retailers reported better-than-expected sales in December. Sales at stores open at least a year rose 4.5 percent, beating analysts' estimates for 3.3 percent growth.

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Stocks fade after Fed discloses split on stimulus

A two-day rally in the stock market came to an end Thursday afternoon when an account of the Federal Reserve's last meeting revealed a split between bank officials over how long the Fed should keep buying bonds to support the economy.
The Dow Jones industrial average and the Standard & Poor's 500 index treaded water for much of the day, then slid into the red around 2 p.m. Eastern, after the Fed released the minutes from its December meeting.
The Dow ended with a loss of 21.19 points at 13,391.36.
The S&P 500 lost 3.05 points to 1,459.37 and the Nasdaq composite fell 11.70 to 3,100.57.
At last month's meeting of the Federal Reserve's policy-making committee, the central bank pledged to buy $85 billion of Treasurys and mortgage-backed bonds and also keep a benchmark interest rate near zero until the unemployment rates drops below 6.5 percent.
On Thursday, the minutes from that meeting showed Fed officials were divided over the bond purchases. Some of its 12 voting members thought they should continue through this year, while another group thought they should be slowed or stopped much earlier. Just "a few" members saw no need for a time frame, according to the minutes.
"It's pretty surprising," said Thomas Simons, market economist at the investment bank Jefferies. "I think everybody thought there was broad agreement on policy, but now it seems like few of them really wanted to vote for it."
The stock market opened on a weak note after retailers reported mixed holiday sales and as the prospect of a new budget battle in Congress loomed. UnitedHealth Group led the Dow lower. The insurance giant's stock fell $2.55 to $51.99 after analysts at Deutsche Bank and other firms cut their ratings on the stock.
"It's natural to relax a bit after such a huge day as yesterday," said Lawrence Creatura, who manages a small-company fund at Federated Investors.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases called the "fiscal cliff."
That deal gave the market a jump start into the new year. The Dow and the S&P 500 are already up more than 2 percent.
"We're off to a very strong start," Creatura said. "The dominant reason is the resolution of the fiscal cliff. But January is usually a strong month, as investors all shift money into the market at the same time. When the calendar flips, it's as if you're allowed to begin the race anew."
Economists had warned that the full force of the fiscal cliff could drag the country into a recession. The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are likely in the months ahead. Congress must raise the government's borrowing limit soon or be forced to choose between slashing spending and paying its debts.
In other Thursday trading, prices of U.S. government bonds fell, sending their yields higher. The yield on the benchmark 10-year Treasury note rose to 1.90 percent from 1.84 percent late Wednesday, a sign that some bond traders believe the Fed minutes hinted at an early end to its bond buying.
Family Dollar Stores sank 13 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $8.30 to $55.74.
Nordstom Inc. surged 3 percent after the department-store chain reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.64 to $55.27.
Among other stocks making big moves:
— Transocean jumped $2.96 to $49.20. The owner of the oil rig that sank in the Gulf of Mexico in 2010 after an explosion killed 11 workers reached a $1.4 billion settlement with the Justice Department.
— Hormel Foods, known for making Spam and other meat products, said that it's buying Skippy, the country's No. 2 peanut butter brand, from Unilever for about $700 million. Hormel's stock jumped $1.19 to $33.20.

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New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera

Another week, another batch of purported leaks for Research In Motion’s (RIMM) first BlackBerry 10-powered Z10. BBin claims to have most of the Z10′s final specs confirmed and it is shaping up to be a powerful device. Rumored specs for the Z10 include a TI OMAP 4470 1.5GHz dual-core processor (Qualcomm Snapdragon MSM8960 for the U.S. and Canada), a 4.2-inch display (1,280 x 768 resolution), quad-band LTE, 2GB of RAM, 16GB or 32GB of internal storage, an 8-megapixel rear camera with LED flash, a 2-megapixel front camera, a microSD card slot, and an 1,800 mAh removable battery. On the connectivity side, the Z10 is also rumored to have NFC, Bluetooth 4.0, dual-band 802.11 a/g/n Wi-Fi, A-GPS, a Micro USB port and a Micro HDMI-out port. BlackBerry 10′s January 30th unveiling in New York City can’t come soon enough.

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Apple still said to account for 87% of North American tablet traffic as Kindle Fire, Nexus 7 gain

Apple’s (AAPL) share of the global tablet market is in decline now that low-cost Android slates are proliferating, but the iPad still appears to be the most used tablet by a huge margin. Ad firm Chitika regularly monitors tablet traffic in the United States and Canada and in its latest report, Apple’s iPad was responsible for almost 90% of all tablet traffic across the company’s massive network.
[More from BGR: Samsung looks to address its biggest weakness in 2013]
Using a sample of tens of millions of impressions served to tablets between December 8th and December 14th this year, Chitika determined that various iPad models collectively accounted for 87% of tablet traffic in North America. That figure is down a point from the prior month but still represents a commanding lead in the space.
[More from BGR: New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera]
The next closest device line, Amazon’s (AMZN) Kindle Fire tablet family, had a 4.25% share of tablet traffic during that period, up from 3.57% in November. Samsung’s (005930) Galaxy tablets made up 2.65% of traffic, up from 2.36%, and Google’s (GOOG) Nexus 7 and Nexus 10 tablets combined to account for 1.06% of tablet traffic in early December.
“Despite these gains by some of the bigger players in the tablet marketplace, there has been a negligible impact to Apple’s dominant usage share,” Chitika wrote in a post on its blog.

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iOS apps see Christmas sales spike shrink in 2012

Distimo just released its statistics on Christmas Day app downloads and revenue growth… and the download spike is far smaller than it was last year. Back in 2011, Christmas Day iOS app download volume spiked 230% above the December average. This year, the increase was just 87% — far below industry expectations. The revenue spike came in at 70%.
[More from BGR: Google names 12 best Android apps of 2012]
Interestingly, iPad downloads increased by 140% this Christmas, implying that the iPhone download bounce was really modest.
[More from BGR: New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera]
A few weeks ago, AppAnnie released statistics showing that iOS app revenue growth had stalled over the summer of 2012, whereas Android app revenue growth was relatively strong at 48% over a five month period. Both Distimo and Appannie are respected companies and their analytics are closely followed by app industry professionals. Could it be that the pace of iPhone app revenue growth has slowed down sharply from 2011 levels, even if Distimo and AppAnnie numbers aren’t entirely accurate?

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Leaked BlackBerry 10 slides show video calling and screen sharing for BBM

Research in Motion (RIMM) recently updated its BlackBerry Messenger application to include free Wi-Fi calling. With the release of BlackBerry 10 just around the corner, RIM is looking to add even more features to its flagship messaging app. Slides from a purported internal BlackBerry 10 presentation that were originally posted on the CrackBerry forums suggest that the company is planning to update BBM to include video calling and screen-sharing capabilities. A second slide highlights a task manager application called BlackBerry Remember, which is believed to be the replacement for RIM’s native Tasks app. Additional slides from the presentation can be viewed below.

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iPad mini met with ‘insatiable’ demand in China

Despite a “soft” launch with few lines and seemingly abundant availability, China is going crazy for the iPad mini according Topeka Capital Markets analyst Brian White. His checks in China and Hong Kong reveal consumers are snapping up iPad minis at rapid rates, causing short supply, even with Apple (AAPL) opening two new retail stores in Hong Kong and three in China. White wrote in a research note on Friday that the iPad mini was sold-out at virtually all Apple Stores in both regions this week and is already more popular than the fourth-generation iPad thanks to the tablet’s smaller size and lower price.
[More from BGR: The Boy Genius Report: The Wii U is Nintendo’s last console]
[More from BGR: Samsung could face $15 billion fine for trying to ban iPhone, other Apple devices]
Additionally, White’s research shows iPhone 5 supply has improved to the point where anyone can walk into an Apple Store and buy one on the spot.
“After the Galaxy S III and Galaxy Note I/II became more popular than the iPhone 4S in recent months, our discussions now indicate that the iPhone 5 has recently become the most popular high-end smartphone at the resellers that we spoke with,” White in his note.

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