US & World Daily Markets Financial Briefing 04-06-2008

Welcome to the Investors Hub World Daily Markets Bulletin; your daily e-mail guide to important Domestic, European and Global market events. Market Briefing is here to keep you informed and up-to-date on key financial developments.

If you have forgotten your password, click here.

Stocks turn higher after service sector reading

NEW YORK - Stocks rebounded Wednesday as investors digested a report that said the service economy grew last month, although at a slower pace.

The Institute for Supply Management report was reassuring for a market that had fallen sharply the previous two sessions. The ISM's service sector index came to 51.7 percent for May; while any reading above 50 signals economic expansion, the figure is down from 52 in April. Still, the reading did show that the economy, while behaving erratically, isn't in a steady downturn.

Investors also awaited for possible news about Lehman Brothers Holdings Inc.'s finances. The investment bank on Tuesday denied rumors that it had tapped the Federal Reserve's discount window because of cash problems. Reports Tuesday that the investment bank needs to raise up to $4 billion in capital touched off further concerns about the health of the financial sector. The stock rose 38 cents to $30.99 in Wednesday's session.

In midmorning trading, the Dow Jones industrial average rose 37.78, or 0.30 percent, to 12,440.63 after dropping 235 points over Monday and Tuesday. Broader stock indicators also advanced. The Standard & Poor's 500 index rose 3.25, or 0.24 percent, to 1,380.90, and the Nasdaq composite index rose 13.20, or 0.53 percent, to 2,493.68.

Bond prices ticked lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.90 percent from 3.89 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 58 cents to $123.73 per barrel on the New York Mercantile Exchange. In corporate news, J.M. Smucker Co. said it agreed to acquire the Folgers coffee brand from Procter & Gamble Co. in a $2.95 billion stock deal. Smucker rose $1.36, or 2.5 percent, to $55.11, while P&G rose 56 cents to $65.97.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 250 million shares.

The Russell 2000 index of smaller companies rose 0.80, or 0.11 percent, to 739.80. Overseas, Japan's Nikkei stock average rose 1.59 percent. In afternoon trading, Britain's FTSE 100 fell 1.68 percent, Germany's DAX index fell 1.17 percent, and France's CAC-40 declined 1.52 percent.

Gain a trading edge by learning to interpret the most common chart patterns for identifying market direction and target prices. With information on trendlines, channels, and more, the Intro to Technical Analysis Guide from RJO Futures can help you apply this valuable technique to your futures trading. Click here.

Forex - U.S. dollar edges lower against euro as market awaits ADP, ISM data

LONDON  - The U.S. dollar edged down against the euro in jittery trade as market players awaited the release of ADP employment data and the latest U.S. non-manufacturing ISM survey Wednesday.

The U.S. currency had enjoyed some gains earlier as it continued to benefit from comments Tuesday from Federal Reserve chairman Ben Bernanke. Speaking at a conference in Barcelona, Bernanke warned that a weak dollar would have consequences for inflation.

Investors, are becoming nervous, however, about the outlook for the U.S. economy, particularly the prospect of further rises in unemployment and falls in house prices. "The dollar was up on Bernanke's comments from yesterday but we are starting on a plethora of figures now, none of which are going to help the dollar," said Mic Mills, a trader at TradIndex.com.

Due for release Wednesday are ADP employment figures -- which should give some indication of how key non-farm payrolls figures will look on Friday -- and the latest ISM survey on U.S. services sector activity.

Earlier, the latest Challenger survey revealed the number of U.S. companies planning to cut jobs rose by 15 percent in May from April. Against the pound, however, the U.S. dollar remained strong, reaching a 15-day high as the UK currency came under pressure from concerns over the UK banking sector, as well as weak consumer confidence and services PMI data earlier.

Nationwide's consumer confidence survey for May released overnight once again reached the lowest figure since the poll began in May 2004, while the services PMI unexpectedly revealed contraction in activity in the sector, hitting its lowest reading in over five years.

The breakdown of the PMI data showed a sharp fall in employment, though inflation components continued to rise. This news will only exacerbate the dilemma facing the Bank of England's Monetary Policy Committee as they struggle to balance the risks of a sharp economic slowdown against the risks that inflation will surge way above target.

For stock market quotes, company information, stock charts, historical quarterly reports and historical annual reports, click here

Euroshares open down on Dow losses; oils, cars, banks fall

At 09.33 a.m., the DJ STOXX 60 was down 57.63 points, or 1.82 percent, at 3115.72 and the DJ STOXX 600 was down 5.22 points, or 1.63 percent, at 315.83. Oil plays like Total, down 2.34 percent, and Eni, down 2.12 percent, fell back as oil prices moved lower again in Asian trade in reaction to U.S. Federal Reserve Chairman Ben Bernanke's comments about inflation.

European car stocks were lower as ongoing caution about raw material prices offset better than feared U.S. sales in May and the fall in the price of oil.

SG Secs downgraded Peugeot and Continental to 'sell' from 'buy' and Fiat, Renault and Michelin to 'hold' from 'buy', pointing out spot steel prices have risen 50 percent in euro terms in the last two months and steel producers are likely to want to hike prices when the 2009 contracts are negotiated this autumn.

Peugeot shares fell 2.27 percent, Fiat shares were down 2.7 percent and Continental shares slumped 4.14 percent. Renault shares were 1.82 percent lower.

Banking stocks were also lower again amid ongoing concerns about whether the full impact of the credit crunch is really over, with the Wall Street Journal suggesting Lehman Brothers -- which is expected to report a second quarter loss this month -- may be forced either to sell all or part of itself to a bigger financial firm or sell a large quantity of new shares.

Shares in Societe Generale slumped 3.52 percent and in BNP Paribas fell 2.21 percent as credit rating agency Fitch said the pair may need additional capital. And Credit Agricole -- which is expected to announce the terms of its rights issue this week -- fell 1.3 percent.

While many analysts cheered its first quarter numbers, Bouygues fell back 4.37 percent as Exane BNP Paribas downgraded the shares to 'neutral' from 'outperform' on valuation grounds. The broker said Wednesday's numbers were broadly in-line but said shares have outperformed the market by 17 percent in the last three months.

 Among blue chips, defensive plays such as food groups Danone, Unilever and Carrefour moved up 0.22 percent, 0.17 percent and 1.15 percent and utilities like Telecom Italia and Enel added 0.93 percent and 0.29 percent as investors sought safety.

Kingfisher shares moved up 0.79 percent after the retailer's better-than-expected first quarter results, although gains were limited as some traders said the outlook remains difficult. Seymour Pierce upgraded the shares to 'hold' from 'sell'.

Fast-loading, feature-rich and highly customizable interfaces for reading and posting messages. click here

Asian stocks mixed as exporters lift Nikkei, Shanghai slips nearly 2 pct

The Nikkei closed up 1.6 percent at 14,435.57 while the broader Topix rose 1.6 percent to 1,430.47. Among exporters, Honda Motor rallied 8.6 percent to 3,790 yen, Nissan Motor advanced 5.3 percent to 974 yen, and Toyota Motor gained 3.2 percent to 5,570 yen. Mitsubishi Heavy Industries rose 5.1 percent to 593 yen.

Japanese banks also rebounded from Tuesday's selloff which was sparked by renewed fears about the credit crisis. Mizuho Financial Group was up 1.3 percent at 598,000 yen while Mitsubishi UFJ Financial gained 2.9 percent to 1,150 yen. Sumitomo Mitsui Financial Group rose 2.1 percent to 954,000 yen.

South Korea's Kospi ended up 0.8 percent at 1,833.81, also led by exporters on hopes the won's rally against the dollar will be short-lived.

In Sydney, the S&P/ASX 200 ended up 0.2 percent at 5,584.5. But the broader All Ordinaries index was 0.1 percent lower at 5,698.2. Fortescue Metals, Australia's newest iron ore producer, retreated from record levels to close down 8.8 percent at A$10.71.

Australia's top investment bank, Macquarie Group, partially recovered from a two-day selloff to end up 2.9 percent at A$51.50 but smaller rival Babcock & Brown fell 4.5 percent to A$10.61.

National Australia Bank was 0.2 percent higher at A$29.44, Commonwealth Bank was up 0.4 percent at A$41.65, and ANZ gained 0.4 percent to A$20.47. Westpac added 1.3 percent at A$22.08 while its takeover target St. George advanced 1.3 percent to $30.52. Shanghai slips

The Hong Kong and Shanghai benchmarks fell, led by telecom stocks which were sold off on worries an ongoing revamp in the telecommunication sector will hurt earnings. The Shanghai Composite lost 1.9 percent to 3,369.91 and the Hang Seng index was down 1.04 percent at 24,123.25.

Adding to their losses on Tuesday, China Unicom -- the smaller of two wireless carriers in the mainland -- fell 4.28 percent to HK$15.20, while rival China Mobile Ltd. shed 1.2 percent to HK$113.6 percent. China Netcom slipped 3.39 percent to HK$22.8.

Energy stocks tracked the decline in oil prices Tuesday. Asia's largest oil firm PetroChina Co. Ltd. was down 1.45 percent to HK$10.84 and offshore oil producer CNOOC Ltd. gave up 4.05 percent to HK$13.26. Coal stocks dived on speculation prices of coal may decline along with the drop in oil prices. China Shenhua Energy Co, the mainland's largest coal producer, shed 4.9 percent to HK$33.9 and China Coal slumped 6.1 percent to HK$16.30.

Oil prices have fallen below $124 a barrel as demand concerns grew and Bernanke indicated more interest rate cuts are unlikely.  Bernanke's comments sent the dollar higher and raised questions about oil's ability to reach new highs in the shortoilterm.

Elsewhere, South Korea's Kospi finished up 0.8 percent at 1,833.81 while Singapore's Straits Times Index ended 0.6 percent lower at 3,134.80. The Kuala Lumpur Composite Index finished down 0.4 percent at 1,253.12. Malaysia will announce its fuel subsidy reform at 0900 GMT Wednesday, Domestic Trade Minister Shahrir Samad said.

The government is expected to announce it will scrap fuel price controls in August, allowing pump prices to rise to market levels and impose a system of quotas or cash handouts. The Philippine Composite closed down 0.3 percent at 2,773.12. Most investors played it safe ahead of the release of May inflation data and the central bank's decision on interest rates, both scheduled for Thursday.

Economists expect the Philippine central bank to hike interest rates by 25 basis points, with annual inflation in May projected to come in between 8.8 percent and 9.6 percent -- from a three-year high of 8.3 percent in April -- following the recent rally in crude oil prices. It would be the first rate hike since October 2005.

In Indonesia, investors were reluctant to hold stocks ahead of Thursday's interest rate decision by the central bank. The Jakarta Composite fell 1.7 percent to close at 2,385.06. Taiwan's weighted index closed up 0.56 percent at 8,627.80

The most traded market in the world; 24 hr market platform with the latest news, prices and charts gives you the knowledge to invest in this exciting and fast moving market.
Click here

Metals - Gold continues lower beneath $880/oz after dollar holds gains

LONDON - Gold continued lower beneath $880 per ounce on Wednesday, after the dollar held firm against the euro following its rally yesterday.
   
At 11:40 a.m., spot gold was trading at $876.55 per ounce against $883.00 in late New York trade on Tuesday. Gold prices fell sharply on Tuesday after the dollar rallied against the euro in response to surprise comments from Federal Reserve chairman Ben Bernanke suggesting the Fed's rate cutting cycle may be at an end, as the dollar's weakness is fuelling inflation.
   
The precious metal tends to move counter to the dollar, as it is seen as an alternative investment to the most common form of foreign currency reserves. The dollar gained almost two cents to trade around $1.54 against the euro, with the greenback managing to hold onto gains so far on Wednesday.
   
"With interest rate futures now pricing in a 98 percent probability of the Fed holding rates constant this month, and a 30 percent probability of increasing rates by 25 basis points in October, we see the dollar well supported in the near term -- which could further contain near-term precious metals demand," said Standard Bank metal analyst Walter de Wet.
   
The decline in the oil price is also weighing on gold, which is used by some investors as a hedge against inflation created by higher fuel costs. Oil prices have fallen by over $10 from the record highs seen above $135 a barrel two weeks ago.
   
Gold has been supported by increased buying by jewellers since prices dipped below $900 per ounce. However, demand out of key consumer India is expected to remain seasonally low in the short-term before recovering.
   
Peter Fertig, an analyst at Dresdner Kleinwort in Frankfurt said: "During the monsoon rainy season, demand for jewellery is seasonally weak. However, towards the end of the year and the next festival season, demand for gold jewellery is likely to increase," adding that if prices were to retreat back to
$800 per ounce, as per the investment bank's prediction, total Indian jewellery gold consumption could rise back to 555 tonnes this year.
   
Among other precious metals, platinum was trading down at $1,986 per ounce against $2,003 in late New York trades on Tuesday. Platinum's sister metal, palladium, eased to $426 per ounce from $434.75, while silver was down to $16.61 per ounce against $16.82.

The latest streaming prices and news on major commodities from precious metals to crude oil, so you can keep up-to date and never miss a trading opportunity again.
Click here

Investors Hub Services