European stocks may see a cautious start on Thursday, as most markets resume trading following a two-day holiday. With the year-end deadline nearing, investors remain focused on developments in Washington over budget negotiations. President Barack Obama and members of the Senate will try to revive budget crisis talks today to avert or at least postpone the looming "fiscal cliff" of tax increases and government spending cuts that are set to come into force on January 1.
With House of Representatives Speaker John Boehner urging the Senate to pass its version of legislation to avoid the cliff, investors are pinning hopes that a potential solution to the crisis will take shape by the end of the week. Meanwhile, Treasury Secretary Timothy Geithner notified Congress that the U.S. would reach its statutory debt limit on December 31 and he would use "extraordinary measures" to hold off default.
In economic releases, investors await reports on U.S. weekly jobless claims, new home sales, and consumer confidence for further clues on the country's economic health.
Asian markets are trading mostly higher, with Japanese shares rallying after the new Prime Minister Shinzo Abe vowed to pursue an expansionary fiscal policy to battle deflation and a strong yen. The yen hit a two-year low versus the dollar. Japan's Nikkei index was up 0.9 percent, while the markets elsewhere across the Asia Pacific region are up modestly. China's Shanghai Composite index is declining 0.4 percent despite data showing a pick-up in profits earned by industrial companies in November.
In domestic corporate news, Novo Nordisk has received Japanese regulatory approval for its new combination insulin Ryzodeg for the treatment of diabetes.
Russia's second-largest oil company OAO Lukoil has won the auction to develop three Siberian oilfields for 50.8 billion rubles or $1.65 billion, outbidding state-run OAO Rosneft and OAO Gazpromneft-Noyabrskneftegaz.
Ford Motor Co announced that it has planned to spend more than $773 million on new equipment and capacity expansions across six manufacturing facilities in southeast Michigan.
Swiss specialty chemicals firm Clariant AG has agreed to divest its Textile Chemicals, Paper Specialties and Emulsions businesses to SK Capital for about CHF 502 million.
U.S. stocks moved lower overnight, extending the downward move seen over the two previous sessions, as uncertainty over whether lawmakers would reach a deal to avoid the fiscal cliff and disappointing holiday retail sales growth data overshadowed a report from Standard & Poor's showing the strongest annual rate of growth in home prices in over two years.
Trading activity remained relatively subdued, as many traders were away from their desks following the holiday on Tuesday. The Dow edged down 0.2 percent, the tech-heavy Nasdaq fell 0.7 percent and the S&P 500 slid half a percent. Most European markets remained closed for the second straight day due to the Christmas holidays.
by RTT Staff Writer
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