Market overview for Wednesday 1st August 2012‏

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Market Overview for Wednesday 1st August 2012   Currencies The U.S. dollar rallied against the euro and yen on Wednesday after the Federal Reserve held off on offering new monetary stimulus, a move that may contrast with action expected from an upcoming European Central Bank meeting. While the Fed signaled further bond buying could be in store to help support a U.S. economic recovery, it held off on announcing a third round of so-called quantitative easing, which would have been negative for the dollar. That is because quantitative easing is tantamount to printing money and dilutes the value of the dollar. The euro was last down 0.6 percent at $1.2224, remaining below a three-week peak of $1.2390 struck last week after comments from ECB President Mario Draghi. The Fed statement also buoyed the dollar against the Japanese yen. It last traded up 0.4 percent at 78.42 yen, according to Reuters data.   Energy Oil futures ended up but off its highs in choppy trading on Wednesday after the U.S. Federal Reserve said the economy had lost some momentum but offered no new stimulus that could shore up growth and translate into higher fuel demand.    U.S. crude settled at $88.91, gaining 85 cents, having turned slightly negative after the Fed statement. Before that it had hit the day's high of $89.47.      Brent has also been supported by news that maintenance work in the UK North Sea will cut output in September of grades which make up the Brent benchmark for international trade.    Brent's premium against U.S. crude narrowed to $17.05 at the close, after hitting $17.53 early. The premium hit $16.86 on Tuesday.    The pace of trading picked up late, with Brent crude volume coming up at 11 percent below its 30-day average while U.S. crude was down just 1 percent from its 30-day average.  Precious metals Gold fell in choppy trade on Wednesday after the Federal Reserve issued a policy statement that dashed investor hopes for new monetary stimulus, even though it acknowledged that the U.S. economy has lost momentum.    Silver and platinum group metals, used heavily in industry, also fell after earlier reports showed that a Chinese factory purchasing managers' index (PMI) fell to an eight-month low and the U.S. ISM survey of the American manufacturing sector shrank in July.    Spot gold was down 0.9 percent at $1,599.09 an ounce. U.S. gold futures for December delivery settled down $7.30 an ounce at $1,607.30, with trading volume about 5 percent below its 30-day average.    Silver fell 1.9 percent to $27.39 an ounce.    Platinum dropped 1.2 percent to $1,393.75 an ounce and palladium was down 1 percent at $580.25 an ounce. Stock indices U.S. stocks slipped on Wednesday on disappointment that the Federal Reserve offered no new measures to stimulate the economy and after a computer glitch at a brokerage triggered a spike in volatility shortly after the open.    The Dow Jones industrial average fell 32.55 points, or 0.25 percent, at 12,976.13. The S&P 500 Index slipped 4.00 points, or 0.29 percent, at 1,375.32. The Nasdaq Composite lost 19.31 points, or 0.66 percent, at 2,920.21.      Volume was above average with 7.26 billion shares changing hands on the NYSE, NYSE Mkt and NASDAQ, above the year-to-date daily average of 6.74 billion.    About eight issues fell for every five that rose on the NYSE while on the Nasdaq 14 fell for every five advancing issues.