US stocks have finished the day mixed after Standard & Poor’s raised its outlook for the US debt rating and lacklustre economic data out of China.
The Dow Jones Industrial Average dropped 9.53 (0.06 per cent) to 15,238.59 at this morning’s close.
The broad-based S&P 500 slipped 0.57 (0.03 per cent) to 1,642.81, while the tech-rich Nasdaq Composite Index added 4.55 (0.13 per cent) at 3,473.77.
Before trade opened S&P upgraded its debt rating outlook for the United States, saying there is now less than a one-in-three chance for a downgrade in the near term.
S&P cited a somewhat improved US political climate following the year-end 2012 “fiscal-cliff” deal and a US economic environment that should lead the country to “match or exceed its peers in the coming years”.
Over the weekend, China reported industrial output in May rose by 9.2 per cent year-on-year, slightly weaker than the 9.3 per cent increase in April.
China’s fixed asset investment – a key measure of government spending in the world’s second-largest economy – increased 20.4 per cent from January through May compared with last year, slowing from the 20.6 per cent gain in the first four months of the year.
The Australian dollar is almost half a US cent lower trading at 94.66 US cents this morning, down from 95.04 cents on Friday.
On Monday morning, the Australian dollar fell as low as 93.94 US cents, its weakest level since September 2010.
Australian financial markets were closed on Monday for the Queen’s birthday public holiday.
The Australian dollar started falling late on Friday night after a US payrolls report showed employment growth improved in May which sparked a rally in the US dollar.
The Australian currency was further depressed after it was reported over the weekend that Chinese imports unexpectedly fell in May and industrial production figures weaken slightly.
BK Asset management managing director Kathy Lien said the Chinese economic data was surprisingly disappointing for the Australian dollar.
“This is terrible news for Australia who could be negatively affected by weaker Chinese resource demand,” she said from New York.
“The pressure on the Australian dollar has been very strong and so far, there appears to be no signs of abating.”
