The Nikkei Rises, Despite Construction Sector Downgrade

Asian trade: Asian markets opened lower for the first trading session of the week, but manage to turn around in the first few minutes of trading.

Equity shares were driven lower by another route of downgrades, something that happens more and more often lately. This time, the Japanese construction sector had its ratings cut lower. The downgrades came despite the recently announced Japanese stimulus plan, which will also includes some funds for public spending.

Public spending programs are a very good opportunity for the construction sector. However, it looks like the strong decline in the housing market will shed any benefit coming from the stimulus plan. Usually, the real estate market needs a very long period to move from one cycle to another. Adjusting from what things look like now, we are at the beginning of a contraction phase, at least when it comes to realty market.

Tonight, the Nikkei gained 11.72 points (0.15%) to 7,756.97. The Australian S&P/Asx was closed tonight for business.

Crude oil is struggling to break above the 50-day moving average, after a late rally on Friday. Crude oil for February delivery rose $0.20 to $45.80.

Gold is testing the $890 resistance area. Bullion for immediate delivery slipped $5.50 to $892.10.

Previous Wall Street trade: At the close of floor trading on the NYSE the DOW was on 8077.56 after falling 45.24 points (-0.56%) while the S&P finished on 831.95, up 4.45 points (0.54%). The NASDAQ was the biggest percentage gainer for the day, closing on 1477.29 after rising 11.80 points (0.81%). Bonds were sold on speculation the government would increase debt sales and dramatically increase supply. Also, the Wall Street Journal said the Fed would not be purchasing longer-dated Treasuries while it continues to study the longer-term effects of monetizing government debt. The yield on the 2-year note rose 7.2 basis points to 0.805% while yield on the benchmark 10-year note rose 0.2 basis points to 2.600%. Currencies swung violently, with the dollar gaining broadly overnight but falling in N.Y. as oil and gold advanced. On the day, the greenback gained 0.07% on the euro and 0.56% on the pound while it lost 0.11% against Australia's currency and 0.05% to the yen.

Previous European trade: In Europe, the U.K. Ftse rose 0.24 points (0.01%) to 4,052.47, while the German Dax fell 40.48 points (-0.96%) to 4,264.56.