TOP

Brazil Real Weakens Beyond 1.80 for First Time Since January

By Adriana Brasileiro

Sept. 11 (Bloomberg) -- Brazil's real slumped beyond the 1.80-per-dollar level for the first time since January as speculation Lehman Brothers Holdings Inc. will collapse amid a shortage of capital led investors to dump higher-yielding assets.

"The real dropped 1.8 percent to 1.8202 per dollar at 11:03 a.m. New York time, from 1.7878 yesterday. Earlier it touched 1.8374, the weakest since Jan. 22. Lehman's 38 percent tumble today pushed the Standard & Poor's 500 Index to the lowest since November 2005."

"``There is near-panic in U.S. financial markets today,'' said Ovidio Pinho Soares, a currency strategist in Sao Paulo at Finabank Corretora. ``I'm surprised to see how fast the real is losing ground. It seems a bit exaggerated, but a lot of people are unwinding very heavy positions and money is really flowing out of Brazil.''"

He said some investors are getting out of real positions because of stop-loss triggers.

"Demand for reais also slowed after a split vote by central bank directors yesterday signaled the pace of interest-rate increases may slow, making local fixed-income assets less attractive."

"Brazilian monetary policy makers yesterday raised by a vote of 5-3 the benchmark overnight rate to 13.75 percent from 13 percent in a bid to control inflation. The three dissenters voted for a half-point increase. The bank has raised the rate four times this year, bringing it up from a record low of 11.25 percent in April."

"The yield on Brazil's zero-coupon bonds due in January 2010 fell 4 basis points, or 0.04 percentage point, to 14.72 percent, according to Banco Votorantim. The yield on the overnight futures contract for January delivery rose 4 basis point to 14 percent."

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

"Last Updated: September 11, 2008 11:13 EDT"





Sponsored links














Dollar Rises to One-Year High Against Euro on Global Outlook

By Ye Xie and Agnes Lovasz

Sept. 11 (Bloomberg) -- The dollar rose to one-year high against the euro on signs global growth is slowing and the yen strengthened on speculation investors will sell higher-yielding assets funded by loans in Japan.

The yen appreciated to the highest level against the euro since August 2006 as concern Lehman Brothers Holdings Inc. will collapse encouraged investors to pare carry trades. New Zealand's currency dropped to two-year lows against the dollar and the yen as the Reserve Bank reduced borrowing costs more than most economists forecast.

"``Risk aversion is feeding into the dollar rally right now,'' said Mike Moran, a senior currency strategist at Standard Chartered Plc in New York. ``Investors are increasingly concerned about the backdrop for the rest of the world in the next three, six months.''"

"The U.S. currency climbed 0.6 percent to $1.3916 per euro at 10:34 a.m. in New York, from $1.3998 yesterday, after touching $1.3882, the strongest level since Sept. 18, 2007. The dollar may gain to $1.30 per euro in six months, Moran said. The yen advanced 1.8 percent to 148.08 per euro, from 150.75, after touching 147.54, the strongest in more than two years. The yen gained 1.2 percent to 106.38 per dollar, from 107.70."

"The ICE's Dollar Index touched 80.375 today, the highest level since September 2007, when the Federal Reserve began cutting its target lending rate from 5.25 percent to 2 percent to stave off a recession. The index, a gauge measuring the dollar against the currencies of six U.S. trading partners, reached a low of 70.698 on March 17."

Yen's Gains

The yen gained against all of the other major currencies on speculation investors will reduce trades in which they get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's currency rose 3.5 percent to 58.14 versus the Brazilian real and 2.7 percent to 12.77 against the South African rand. Japan's target lending rate of 0.5 percent compares with 13.75 percent in Brazil and 12 percent in South Africa.

"Lehman plunged 41 percent, extending its slide in the past year to 92 percent, after three analysts downgraded the stock. The Standard & Poor's 500 Index sank 1.5 percent."

"``Investors in Japan are in risk-aversion mode, so they're buying the yen,'' said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG."

"The New Zealand dollar, known as the kiwi, fell as much as 2.7 percent to 64.38 U.S. cents, the lowest since September 2006, and 3.7 percent to 68.99 yen, the weakest since May 2006. The Reserve Bank cut its official cash rate by a half-percentage point to 7.5 percent, saying the economy is in a recession and inflation will slow."

Yen vs. Euro

"The yen gained for a fourth day against the euro after implied volatility on one-month euro options versus the yen rose to 16.94 percent, the highest since March 18."

"The Australian dollar dropped to the lowest against the U.S. currency since August 2007 on tumbling prices of raw materials, which account for about 60 percent of the nation's exports. The Aussie fell as much as 1.4 percent to 79.01 U.S. cents and dropped 2.2 percent to 84.44 against the yen."

"Platinum for immediate delivery fell as much as 4.2 percent to $1,130.65 an ounce in London, the lowest since Jan. 12, 2007, while gold dropped 1.3 percent to $742.40 an ounce."

The dollar has gained 13 percent since touching the all- time low of $1.6038 per euro set on July 15 as the European economy slowed and crude oil dropped more than 30 percent from its peak of $147.27.

ECB Rate Outlook

"The ECB will cut its main refinancing rate by a quarter- percentage point to 4 percent during the first three months of next year, according to Bloomberg surveys of economists."

"The European Commission said yesterday the euro region's economy will probably stagnate this quarter after shrinking the previous three months for the first time since the currency's debut in 1999. It cut its 2008 growth forecast to 1.3 percent, from 1.7 percent. By contrast, the median in a Bloomberg News survey of economists was for U.S. growth of 1.7 percent."

"Industrial output in the 15 nations that use the euro probably fell 0.2 percent in July after a decline by the same amount in June, according to the median forecast of 31 economists surveyed by Bloomberg News. The report from the European Union's statistics office is due tomorrow."

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net; Agnes Lovasz in London at alovasz@bloomberg.net

"Last Updated: September 11, 2008 10:36 EDT"





Sponsored links



Dollar Rises to One-Year High Against Euro on Growth Outlook

By Agnes Lovasz and Ron Harui

Enlarge Image/Details

"Sept. 11 (Bloomberg) -- The dollar rose to the highest level in a year against the euro on speculation that economic growth in Europe will be slower than in the U.S., prompting the region's central bank to lower interest rates."

"The U.S. currency climbed for a second day as traders raised bets that the European Central Bank will cut borrowing costs before a government report tomorrow likely to show industrial production in the euro area shrank. New Zealand's dollar dropped to its lowest level since October 2006 after Alan Bollard, governor of the nation's central bank, reduced interest rates by more than economists expected."

"``We've got this dollar strength for several weeks now that is driving currency markets and the fundamental picture is underpinning this,'' said Lutz Karpowitz, a currency strategist in Frankfurt at Commerzbank AG, Germany's second-biggest lender. ``The euro-zone economy is going into recession. This is a growth-differential story.''"

"The U.S. currency climbed to $1.3893 per euro, the strongest since Sept. 18, 2007, before trading at $1.3949 as of 7:14 a.m. in New York, from $1.3998 yesterday. The Japanese yen advanced to 148.38 per euro, the highest since Nov. 2, 2006, and was last at 149.01, from 150.75. It also gained to 106.83 per dollar from 107.70."

"The dollar will rise in coming days to $1.3830 against the euro, a so-called resistance level that may trigger orders to sell the U.S. currency, Karpowitz said."

ECB Versus Fed

"The ECB will cut its main refinancing rate a quarter point to 4 percent in the first three months of next year, while the Federal Reserve raises its target rate for overnight bank loans by the same amount to 2.25 percent, according to Bloomberg surveys of economists."

"The diverging interest-rate outlook narrowed the so-called yield spread between German and U.S. two-year government notes today. The spread was 1.81 percentage points, down from 1.88 percentage point a week ago."

"The ICE's Dollar Index touched 80.375 today, the highest since September 2007, when the U.S. central bank began cutting its target rate from 5.25 percent to 2 percent to stave off a recession. The index, a gauge measuring the dollar against the currencies of six U.S. trading partners, reached a low of 70.698 on March 17. It was last at 80.115."

"The European Commission said yesterday the euro region's economy will probably stagnate this quarter after shrinking the previous three months for the first time since the currency's debut in 1999. It cut its 2008 growth forecast to 1.3 percent, from 1.7 percent. By contrast, the median in a Bloomberg News survey of 84 economists was for U.S. growth of 1.7 percent."

New Zealand Dollar

"The New Zealand dollar declined to as low as 64.38 U.S. cents before trading at 64.80 cents, down 2.1 percent from yesterday. Against the yen, it declined to 69.21, from 71.38, the biggest drop since March 17. The Reserve Bank of New Zealand cut its benchmark interest rate by half a percentage point to 7.5 percent, saying the economy is in a recession."

"The yen rose against all 16 of the most-active currencies on speculation that widening subprime-mortgage losses will hurt earnings of U.S. companies, reducing demand for so-called carry trades."

"In carry trades, investors get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's target lending rate is 0.5 percent, compared with 7 percent in Australia. The risk is that currency swings erase profits."

"``Investors in Japan are in risk-aversion mode, so they're buying the yen,'' said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG. ``The economy also is doing poorly'' so the yen may appreciate to 107.00 against the dollar today."

Implied Volatility

"The currency gained for a fourth day against the euro after implied volatility on one-month euro options versus the yen rose to 16.94 percent, the highest since March 18."

"The yen stayed higher after a government report showed Japanese machinery orders fell for a second month in July, signaling manufacturers expect the global slowdown to crimp demand into next year."

"The Australian dollar dropped to the lowest since August 2007 today as prices tumbled for raw materials, which account for about 60 percent of the nation's exports. It reached a low of 79.01 cents, form 80.13 cents yesterday. It fell 2.2 percent against the yen, to 84.44."

Shipping Measure

"The currency will extend its 19 percent drop from a 25-year high, judging by a plunge in the costs to ship coal and iron ore, the nation's biggest export earners, according to Stephen Koukoulas, London-based head of global foreign-exchange and fixed-income strategy for TD, a division of Canada's Toronto- Dominion Bank."

"The currency will slide 2.6 percent to 78 U.S. cents by year-end because a slump in the Baltic Dry Index, a measure of shipping costs for commodities, signals demand for the raw materials Australia exports is waning, said Koukoulas."

"The European Union's statistics office in Luxembourg will probably say tomorrow that industrial output in the 15 nations fell 0.2 percent in July after a revised 0.2 percent decline in June, according to a Bloomberg News survey of economists."

"``The euro is likely to extend its adjustment lower,'' said Saburo Matsumoto, senior manager of foreign-exchange sales in Tokyo at Sumitomo Trust & Banking Co., Japan's fifth-largest publicly traded bank by market value. ``The euro-zone economy is facing a recession, so a weaker currency could provide some relief to exports.''"

"Europe's single currency may weaken to 147.50 yen in the next few days, Matsumoto forecast."

"Implied volatility on the dollar versus the most actively traded currencies was at 11.55 percent after touching 12 percent, the highest since April, according to the JPMorgan Volatility index. The gauge of perceived price fluctuation in the dollar reached 9.27 percent on Aug. 4, the lowest this year."

To contact the reporters on this story: Agnes Lovasz in London at alovasz@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net

"Last Updated: September 11, 2008 07:24 EDT"





Sponsored links



Gold Falls Below $750 as Dollar Strengthens; Silver Declines

By Pham-Duy Nguyen

"Sept. 11 (Bloomberg) -- Gold extended losses for a ninth straight session, falling below $750 for the first time since October, as a surge in the dollar reduced demand for the precious metal as an alternative investment. Silver dropped."

"Gold is down 27 percent from a record in March as the dollar climbed 14 percent against the euro from an all-time low in July. The dollar today touched $1.3893, the highest in a year, and the Reuters/Jefferies CRB Index of 19 raw materials dropped to the lowest level since January."

"``It's certainly dollar-inspired liquidation for gold,'' said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. ``The U.S. will be slow to recover and inflationary pressure will remain low because of weak demand. The U.S. slowdown is spreading and beginning to impact emerging market economies. There's a general flight from risk assets to much more conservative assets such as bonds. Gold is just another part of the liquidation equation.''"

"Gold futures for December delivery fell $12.90, or 1.7 percent, to $749.60 an ounce at 9:17 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $742, the lowest for a most-active contract since Oct. 9."

"Silver futures for December delivery fell 8 cents, or 0.7 percent, to $10.81 an ounce on the Comex. The metal dropped 7 percent yesterday."

"Before today, silver fell 27 percent this year, while gold dropped 9 percent."

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

"Last Updated: September 11, 2008 09:19 EDT"





Sponsored links
















Canadian Dollar Falls to Lowest Since August 2007 on Trade

By Daniel Kruger

Sept. 11 (Bloomberg) -- The Canadian dollar fell to the lowest since August 2007 after a government report showed the nation's trade surplus shrank in July as crude oil prices declined during the month for the first time since March.

"Demand for commodities, which account for about half of Canada's exports, has weakened with the slowdown in the global economy. The Canadian dollar has fallen 6.4 percent since July 11, when crude futures peaked at $147.27 a barrel. Oil has since plunged 32 percent, touching $100.85 today."

"``Slower global growth should mean lower commodity prices, which is going to drag on the commodity currencies,'' said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto."

"The Canadian currency, dubbed the loonie because of the aquatic bird on the one-dollar coin, depreciated 0.7 percent to C$1.0783 per U.S. dollar at 10:14 a.m. in Toronto, from C$1.0713 yesterday. Earlier it fell as low as C$1.0791, the weakest since Aug. 17, 2007. One Canadian dollar buys 92.83 U.S. cents."

"Canada's trade surplus for July narrowed to C$4.9 billion ($4.6 billion) from a revised C$5.6 billion the month before, Statistics Canada in Ottawa said. The median forecast of 17 economists in a Bloomberg News survey was for a surplus of C$5.6 billion."

"The global economy may slow to about 3 percent growth in late 2008 from 5 percent in the previous year before re- accelerating toward 4 percent in 2009, said John Lipsky, first deputy managing director of the Washington-based International Monetary Fund, on Sept. 9."

`Huge Oversupply'

The Reuters/Jefferies CRB commodity index of 19 raw materials has fallen 25 percent since July 2.

"In an effort to bolster prices, the Organization of Petroleum Exporting Countries agreed at a meeting in Vienna yesterday to a total production limit for 11 members of 28.8 million barrels a day, unchanged from their previous targets. OPEC Secretary-General Abdalla El-Badri said an output cut of about 500,000 barrels a day would reduce a ``huge oversupply'' of oil on the market."

"The Canadian currency will fall to C$1.10 per U.S. dollar in the second quarter of 2009, according to a Bloomberg News survey of 34 firms."

"The Bank of Canada left its benchmark interest rate unchanged at 3 percent on Sept. 3. The rate is ``appropriately accommodative,'' while inflationary pressures ``remain elevated,'' the central bank said. It didn't hint that slow economic growth may lead to a rate reduction. The next meeting is scheduled for Oct. 21."

To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net

"Last Updated: September 11, 2008 10:17 EDT"





Sponsored links






Emerging-Market Bonds Fall as Concern Lehman May Collapse Mount

By Lester Pimentel

"Sept. 11 (Bloomberg) -- Emerging-market bonds tumbled, led by declines in Argentine debt, as speculation Lehman Brothers Holdings Inc. may collapse prompted investors to shun all but the safest securities."

"The extra yield investors demand to own developing nations' bonds instead of U.S. Treasuries widened 9 basis points to 3.39 percentage points at 10:12 a.m. in New York, according to JPMorgan Chase & Co. A basis point equals 0.01 percentage point. The so-called spread is the biggest since June 2005. Argentine bonds led losses."

Emerging-market bonds declined for a third day as a crisis of confidence surrounding New York-based Lehman stoked aversion to higher-yielding assets.

"``There are concerns about financial sector distress,'' said Siobhan Morden, a Latin America debt strategist with Royal Bank of Scotland in New York. ``The market is repricing for external risk aversion.''"

"The yield to the 2015 call date on Brazil's 11 percent bond due in 2040, one of the most widely traded emerging-market securities, jumped 15 basis points to 5.66 percent, according to JPMorgan. The bond's price fell 1.005 cents on the dollar to 130.2 cents, the lowest since August 2007."

"Argentine bonds, among the highest-yielding debt in emerging markets, yielded 7.76 percentage points more than Treasuries, up 34 basis points from yesterday, according to JPMorgan."

Credit Default Swaps

"The risk of owning Argentina's bonds reached a record. Five-year credit-default swaps based on the country's debt climbed 39 basis points to 8.91 percentage points, according to Bloomberg data. That means it costs $891,000 to protect $10 million of the country's debt from default."

"Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent."

"``Argentina is one of the weakest credits in emerging markets, so it falls more than others when there's a sell-off,'' Morden said."

To contact the reporter on this story: Lester Pimentel in New York at lpimentel1@bloomberg.net

"Last Updated: September 11, 2008 10:16 EDT"





Sponsored links















U.S. Trade Deficit of $62.2 Billion Exceeds Forecast (Update2)

By Timothy R. Homan

"Sept. 11 (Bloomberg) -- The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports."

"The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said today in Washington. Total imports and exports were the highest ever."

"Americans paid a record $124.66 a barrel for foreign crude oil, more than offsetting increases in shipments of automobiles, aircraft and machinery to buyers overseas. While a weak dollar has made U.S. goods more affordable, shrinking economies in Europe and Japan may stifle export growth in coming months."

"The oil deficit ``is going to fade away,'' said Jay Bryson, global economist at Wachovia Corp. in Charlotte, North Carolina. ``Exports will remain very strong for the near term'' as American companies fill existing orders."

"Economists forecast the gap would widen to $58 billion from an initially reported $56.8 billion in June, according to the median of 75 estimates in a Bloomberg News survey. Projections ranged from deficits of $54.6 billion to $62.5 billion."

"Imports climbed 3.9 percent to $230.3 billion in July, reflecting a record $42.6 billion in purchases of crude oil that swelled the deficit with the Organization of Petroleum Exporting Countries. Excluding oil, the trade gap shrank."

Oil Outlook

"The imported-oil bill probably came down in August as prices retreated. A barrel of crude oil on the New York Mercantile Exchange cost an average $117.02 last month, down from $133.77 in July."

"Exports increased 3.3 percent to $168.1 billion, led by a $1.4 billion jump in shipments of autos and parts."

"In August, prices of goods imported into the U.S. fell by the most in almost two decades of record-keeping as the cost of oil and natural gas dropped, indicating slower economic growth may be starting to calm inflation, according to another report."

"The import price index decreased 3.7 percent, more than forecast, after rising a revised 0.2 percent in July, the Labor Department said today in Washington. Outside of oil, costs fell 0.3 percent following a 0.7 percent increase the prior month."

Overseas shipments have received a boost from the 7 percent decline in the dollar against a trade-weighted basket of currencies of major trading partners in the 12 months ended in July. The dollar began to recover in April after dropping 27 percent from February 2002.

Final Data

"After adjusting for inflation, the trade deficit grew to $41.2 billion from $40.1 billion in June that was larger than previously estimated. The figures, which are used to calculate gross domestic product, indicate the government may lower the second-quarter growth estimate when the final data is reported later this month."

"July's price-adjusted deficit was smaller than the average for last quarter, indicating trade will again boost growth in the third quarter."

"The smallest trade deficit in eight years was the biggest contributor to the 3.3 percent pace of economic expansion last quarter. The narrower gap added 3.1 percentage points to growth, the most since 1980, the Commerce Department said Aug. 28. Excluding trade, the economy would have expanded at a 0.2 percent pace after growing 0.1 percent in the first three months of the year."

Gap Widened

The trade gap with China widened to $24.9 billion from $21.4 billion in the prior month. The deficit with the OPEC jumped 34 percent to a record $24.2 billion.

"Some U.S. manufacturers have taken advantage of the competitive dollar. Boeing Co., the world's second-biggest aircraft maker, received bookings for 70 new planes in July, up from 62 placed in June. Fifty of the Chicago-based company's July orders came from abroad."

"A machinist's strike this month could prevent Boeing from filling those orders in coming months, further threatening U.S. export growth. In the past, work stoppages by members of the company's largest union, the International Association of Machinists and Aerospace Workers, have lasted four to 10 weeks."

"As economies in Europe and Japan contract, the outlook for exports has softened. FedEx Corp., the world's largest air-cargo carrier, foresees weak demand both in the U.S. and abroad."

"``While sustained declines in fuel prices could improve our full-year outlook, the slowing economic growth trends in the U.S. are now extending to other areas of the global economy,'' Alan Graf, chief financial officer of the Memphis, Tennessee-based company, said yesterday in a statement."

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

"Last Updated: September 11, 2008 09:34 EDT"





Sponsored links



Indian Bonds Gain a Third Day on Speculation Inflation to Slow

By Anil Varma

"Sept. 11 (Bloomberg) -- India's 10-year bonds rose for a third day, pushing yields to a three-month low, as a government report today may show inflation slowed for a third week."

"The Ministry of Commerce and Industry may say wholesale prices rose 12.01 percent in the week ended Aug. 30 from a year earlier, the smallest increase in more than a month, according to a Bloomberg News survey. The report is due at 6 p.m. in New Delhi. The notes also rallied as crude oil prices in New York fell for a third day to trade near a five-month low."

"``Bond-market sentiment is more upbeat now than a couple of weeks ago as inflation has come off its peak,'' said Paresh Nayar, head of currency and debt trading at Development Credit Bank Ltd. in Mumbai. ``Falling oil prices have also helped.''"

"The yield on the benchmark 8.24 percent note due April 2018 fell 9 basis points to 8.28 percent at the 5:30 p.m. close in Mumbai, according to the central bank's trading system. The price rose 0.61, or 61 paise per 100-rupee face amount, to 99.75. A basis point is 0.01 percentage point."

The benchmark yield has dropped 1.25 percentage points from a seven-year high of 9.55 percent touched in July as the inflation rate declined from a 16-year high of 12.63 percent reached in the week ended Aug. 9. Crude oil prices have dropped almost 31 percent from a record high of $147.27 per barrel reached on July 11.

Bonds also rose on speculation banks are buying the securities to meet statutory requirements as deposits rise.

"Local lenders are required by law to invest at least 25 percent of their deposits in government debt or other low-risk securities approved by the central bank. Bank deposits in India increased 21.6 percent in the 12 months ended Aug. 15, central bank data show."

"The cost of benchmark interest-rate swaps, or derivative contracts used to guard against rate fluctuations, fell. The five-year swap rate, a fixed payment made to receive floating rates, declined 18 basis points to 8.53 percent."

To contact the reporter on this story: Anil Varma in Mumbai at avarma3@bloomberg.net.

"Last Updated: September 11, 2008 08:08 EDT"





Sponsored links



















"European Stocks Fall, Led by Home Retail, Morrison; Banks Drop "

By Sarah Jones

Sept. 11 (Bloomberg) -- European stocks fell for a third day as concern deepened the economic slowdown will hurt earnings for retailers and financial firms.

"Home Retail Group Plc sank 6.2 percent after the home- improvement chain reported lower sales. William Morrison Supermarkets Plc tumbled the most in four years after Chief Executive Officer Mark Bolland said he expects ``a tough second half.'' Bank of Ireland Plc fell 7.4 percent after Dresdner Kleinwort warned of rising bad-debt levels. Barclays Plc slumped 5.1 percent, while Dexia SA slipped 4.9 percent."

"Europe's Dow Jones Stoxx 600 Index lost 1.4 percent to 273.43 as of 3:05 p.m. in London, extending this year's drop to 25 percent."

"``Economies around the world are clearly slowing,'' said Jeremy Beckwith, London-based chief investment officer at Kleinwort Benson, which oversees the equivalent of $13.1 billion. ``We will see substantial earnings revisions. I think people are getting fearful now and will get more fearful.''"

"Stocks extended declines after a report showed more Americans than forecast filed initial claims for unemployment insurance last week, while total benefit rolls rose to the highest level in almost five years. Downgrades of Lehman Brothers Holdings Inc. by Citigroup Inc. and Goldman Sachs Group Inc. pushed European banks lower."

"National benchmark indexes dropped in all 18 western European markets. Germany's DAX declined 1.2 percent, while the U.K.'s FTSE 100 lost 1.6 percent as did France's CAC 40."

Cutting Forecast

Stocks retreated yesterday after the European Commission cut its forecast for the region's economic growth and investors speculated bank losses will increase. More than $15 trillion has been erased from global equities in 2008 as accelerating inflation and $512 billion in bank writedowns and losses threaten economic expansion.

"Home Retail sank 6.2 percent to 226.75 pence, the steepest drop since July. The owner of Britain's second-largest home- improvement chain reported lower same-store sales at its Homebase and Argos stores as a housing slump worsened and consumer confidence slid to a four-year low."

Morrison declined 6.5 percent to 252.75 pence after the smallest of the four main U.K. food retailers said it sees a ``highly competitive'' second half and plans to invest in price cuts. First-half profit fell 3.1 percent after income from real- estate sales dwindled and the tax bill rose.

Negative Data

"Kingfisher Plc, Europe's largest home-improvement retailer, sank 7.2 percent to 127.6 pence."

"Bernstein Research downgraded the shares to ``market- perform'' from ``outperform,'' saying the Confederation of British Industry data has been as ``negative as it gets'' in July and August on U.K. furniture and home appliances sales."

"Analysts have slashed earnings estimates this year as the global economy cooled and the biggest surge in mortgage defaults in at least three decades pushed banks to write down assets. Profit for companies in the Stoxx 600 will slump 2.1 percent in 2008, down from 11 percent growth forecast at the end last year, according to data compiled by Bloomberg."

Bank of Ireland sank 7.4 percent to 5.11 euros after Dresdner cut its recommendation for the Dublin-based lender to ``sell'' from ``reduce.'' Allied Irish Banks Plc lost 3.3 percent to 7.84 euros after the brokerage downgraded the nation's largest lender by market value to ``sell'' from ``hold.''

"``We forecast a dramatic rise in bad debts across the Irish banks for 2009 and 2010,'' Dresdner analysts wrote in a note to investors. ``Allied and BoI now look short on capital for 2009.''"

Dresdner reduced its earnings per share estimate for Irish lenders next year by an average 33 percent.

"Barclays, Dexia"

"Barclays, the U.K.'s third-biggest bank, slumped 5.1 percent to 329 pence, while Dexia, the world's largest lender to local governments, slipped 4.9 percent to 10.12 euros."

"Citigroup downgraded Lehman shares to ``hold'' from ``buy,'' cutting the annual earnings estimate for the New York- based firm to a loss of $11.32 a share, compared with an earlier estimated loss of $8.26 a share. Goldman Sachs changed its rating to ``neutral'' from ``buy'' and lowered its six-month price estimate by two-thirds to $7."

"Oppenheimer & Co. analyst Meredith Whitney lowered her full-year earnings estimate for Lehman, saying the bank faces further writedowns after posting the biggest loss in its 158- year history yesterday. Whitney said Lehman may have an annual per-share loss of $10.24, compared with an earlier forecast of a $6.67 loss."

Bounce Overdue

"Anglo American Plc, the world's fourth-largest diversified mining company, advanced 3.6 percent to 2,275 pence. Xstrata Plc increased 2.5 percent to 2,280 pence."

"``We are long overdue a bounce'' in mining shares, said Tom Hougaard, the London-based chief market strategist at City Index Ltd. ``When you look at the mining sector, there has been a large drop in all the parameters. So much of the bad news has already been priced in.''"

"The Stoxx 600 Basic Resources Index has slumped 21 percent since July, pushing shares to their cheapest since April 2001. The index yesterday traded at 8.1 times earnings."

"BG Group Plc climbed 4.1 percent to 1,098 pence after the U.K.'s largest oil and gas company, together with partners Petroleo Brasileiro SA and Portugal's Galp Energia SGPS SA, said they found ``another first-class'' oil field in the Santos Basin."

The Iara oil field holds an estimated 3 billion to 4 billion barrels of recoverable light crude oil.

"Galp Energia, Portugal's largest oil company, jumped 7.2 percent to 12.17 euros."

"CNP, Aegon"

CNP Assurances SA and Aegon NV led a retreat by insurers after UBS AG downgraded the shares.

"CNP, France's largest life insurer, lost 2.3 percent to 79.12 euros and Aegon, the owner of the U.S. insurer Transamerica Corp., slid 3.4 percent to 8.18 euros. UBS cut its rating on the companies' shares to ``sell'' from ``neutral.''"

"``Aegon needs to boost return on equity to improve the risk/return profile,'' London-based analyst Marc Thiele wrote in a note to clients today. He also fears ``more setbacks to new business'' at CNP."

Axa SA dropped 4.8 percent to 21.65 euros. UBS also lowered its recommendation for Europe's second-biggest insurer to ``neutral'' from ``buy.''

"Bayerische Motoren Werke AG, the world's largest maker of luxury cars, lost 2.8 percent to 28.19 euros after Handelsblatt reported on its Web site that the carmaker is preparing to set aside higher risk provisions as problems with its leasing business are increasing."

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

"Last Updated: September 11, 2008 10:20 EDT"





Sponsored links



Rupee Falls to 2-year Low as Dollar Gains Spur Importer Demand

By Anoop Agrawal

Sept. 11 (Bloomberg) -- India's rupee fell to the lowest level in almost two years on speculation investors and importers stepped up purchases of the U.S. currency as the dollar rallied against the euro to the highest in a year.

"The rupee dropped the most in more than three weeks, sliding in tandem with eight other most-active Asian currencies outside Japan, on concern widening credit-market losses will slow economic growth. India's benchmark stock index has slumped 29.4 percent this year, heading for the first annual loss since 2001, as overseas funds dumped $7.4 billion more local equities than they bought."

"``Importers with short-term liabilities are covering aggressively at a time when dollar supply is very limited,'' said Parthasarathi Mukherjee, treasurer at Axis Bank Ltd. in Mumbai. ``The sentiment for the dollar is strengthening globally and that is adding to the momentum against the rupee.''"

"The rupee fell 0.9 percent to 45.555 a dollar at the 5 p.m. close in Mumbai, the lowest close since Oct. 12, 2006, according to data compiled by Bloomberg. It may drop to 46 in the near term, Mukherjee said."

"India's economy, Asia's third-biggest, expanded 7.9 percent in the three months ended June, the slowest pace since the last quarter of 2004, a government report showed last month."

"The rupee has erased last year's 12.2 percent advance, which was the most in more than three decades. The currency touched almost a decade high of 39.185 a dollar on Nov. 7 as overseas investors bought a net $19.5 billion of Indian stocks and bonds, a record."

Dollar's Advance

"The U.S. dollar has advanced against all of the 16 major currencies tracked by Bloomberg in the past three months as commodities declined. The ICE's Dollar Index, measuring the greenback against the currencies of six U.S. trading partners, touched 80.375 today, the highest since September 2007."

Crude oil in New York has dropped almost 30 percent from an all-time high of $147.27 a barrel reached on July 11. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has declined 22 percent from a July peak.

"The European Commission cut its growth outlook for the 15- nation euro area for the rest of this year, predicting a recession for Germany, the region's largest economy. The U.K. economy is contracting for the first time in at least a decade and will go through a recession this year, two reports showed yesterday."

"The rupee's slide was tempered by speculation the Reserve Bank of India will intervene to stem losses, as a weaker currency may add to inflation."

Currency Intervention

"``The pace of the rupee's decline has increased speculation the central bank will intervene,'' said Sudhanshu Shekhar, a currency trader at state-owned State Bank of Travancore in Mumbai. ``That may halt the depreciation.''"

"The central bank intervenes in the currency market by arranging sales or purchases of foreign exchange to curb rupee volatility, Governor Duvvuri Subbarao said on Sept. 9. It will continue with its exchange rate policy, which has served India well, he said."

"India's foreign-currency reserves have dropped in all but four of the 13 weeks starting June, indicating the Reserve Bank sold dollars to slow the pace of the rupee's depreciation."

"Foreign-currency reserves fell to a six-month low of $286.1 billion in the week ended Aug. 29, from a record $306.2 billion reached in May, central bank data show."

"A government report today may show inflation slowed for the third week. Wholesale prices rose 12.01 percent in the week ended Aug. 30 from a year earlier, the slowest pace in more than a month, according to economists surveyed by Bloomberg. The rate climbed to 12.63 percent in the week to Aug. 9, a 16-year high."

To contact the reporter on this story: Anoop Agrawal in Mumbai at aagrawal8@bloomberg.net.

"Last Updated: September 11, 2008 07:45 EDT"





Sponsored links



U.S. Stock-Index Futures Decline as Lehman Tumbles a Fourth Day

By Adria Cimino and Elizabeth Stanton

"Sept. 11 (Bloomberg) -- U.S. stock-index futures tumbled as concern grew that Lehman Brothers Holdings Inc. will fail to shore up capital, heightening concern about the stability of the banking system."

"Lehman, which lost more than half its value in the past three days, tumbled another 45 percent in trading before the open of exchanges after Citigroup Inc. and Goldman Sachs Group Inc. cut their recommendations on the securities firm. Chesapeake Energy Corp. and Petrohawk Energy Corp. tumbled about 2 percent and led oil and gas drillers lower as crude fell for a third day after a stronger dollar reduced the appeal of commodities as a hedge. Futures extended declines on a government report showing jobless claims topped economists' forecasts."

"``People are at the edge of their seats and reacting and overreacting to every piece of news, because there are no trends except for the uncertainty about the circumstances with banks,'' Laszlo Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, told Bloomberg Television. ``It seems to be waiting for the other shoe to drop but this is like a centipede that has a hundred shoes and it just doesn't seem to ever want to end.''"

"Standard & Poor's 500 Index futures expiring this month sank 18.1, or 1.5 percent, to 1,215.2 as of 8:39 a.m. in New York. Dow Jones Industrial Average futures decreased 136 to 11,155 and Nasdaq-100 Index futures fell 22.75 to 1,714.75."

Futures indicated the S&P 500 may fall below its lowest close of the year. The benchmark index for U.S. equities is poised for its first annual decline since 2002 as more than $500 billion in credit losses and asset writedowns at financial firms worldwide and slowing economic growth damp the outlook for earnings.

`Bear Case' for Lehman

"Lehman declined $3.23 to $4. The shares were downgraded to ``hold'' from ``buy'' at Citigroup, which cited a possible cut in the credit rating and deteriorating capital. Lehman's initiatives to boost capital ``fell short of what was necessary to lessen the bear case on the stock,'' Goldman analysts including New York- based William Tanona said in a note to clients."

"Oppenheimer & Co. analyst Meredith Whitney lowered her full- year earnings estimate for Lehman, saying the bank faces further writedowns after posting the biggest loss in its 158-year history yesterday. Whitney said Lehman may have an annual per-share loss of $10.24, compared with an earlier forecast of a $6.67 loss."

Crude Oil

"Petrohawk energy slumped 52 cents to $23.02, while Chesapeake declined 90 cents to $39.25."

"Crude oil for October delivery sank as much as 1.1 percent to $101.43 on the New York Mercantile Exchange as the dollar rose to a one-year high against the euro, reducing the appeal of commodities as a hedge."

Actel Corp. dropped 5 percent to $10.74 in after-hours trading in New York. The maker of electronic equipment said revenue may fall as much as 9 percent from the second quarter. The company had previously predicted growth of as much as 1 percent.

"First-time jobless claims fell to 445,000 in the week ended Sept. 6 from a revised 451,000 the prior week that was more than initially reported. Economists surveyed by Bloomberg had forecast 440,000 new claims. The number of people staying on rolls rose 122,000 to 3.525 million, the highest since October 2003."

"The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports. The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said. Total imports and exports were the highest ever."

"U.S. stocks advanced yesterday as investors snapped up energy shares trading at their cheapest level in 18 months, while better-than-forecast earnings at FedEx Corp. buoyed industrial companies."

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

"Last Updated: September 11, 2008 08:41 EDT"





Sponsored links



Brazil's Split Vote Signals Pace of Increases to Slow (Update1)

By Joshua Goodman and Andre Soliani

"Sept. 11 (Bloomberg) -- Brazil's central bank decision to lift the benchmark interest rate three-quarters of a percentage point yesterday was too much for three of eight directors, signaling the pace of increases may slow. The currency fell."

"Policy makers, by a vote of 5-3, raised the so-called Selic rate a fourth time since April to 13.75 percent from 13 percent to tame consumer prices. The decision raised Brazil's real interest rate, which is the Selic minus inflation, to the highest of all 54 countries tracked by Bloomberg. The dissenters voted for a half-point increase."

"The split decision, the first since July 2007, suggests policy makers expect Latin America's biggest economy to slow and inflation to ease, said Pedro Tuesta, an economist at 4Cast Inc. in New York. Consumer prices rose in August at the slowest pace in 11 months after food costs declined."

"``The vote count signals the central bank will slow the pace of interest rate increases,'' said Tuesta. ``The central bank is looking ahead and there are signs aggregate demand growth will slow in the second half.''"

"Central bankers led by Henrique Meirelles raised the Selic rate to the highest in almost two years on the same day that a report showed economic growth unexpectedly accelerated to 6.1 percent in the second quarter, fueling concern that rising demand may stoke inflation. Consumer price increases have exceeded the bank's 4.5 percent target since January."

"Tuesta said the jump in growth, which beat all estimates in a Bloomberg survey of 36 economists, was ``part of the past.'' Policy makers, he said, are counting on easing commodity prices to cool annual inflation."

Yields Drop

"Brazil's real fell 1.3 percent to 1.8117 to the dollar, the weakest in 7 1/2 months, at 8:19 a.m. New York time. The currency is down 10 percent this month, the worst performance among the 16 most-traded currencies tracked by Bloomberg."

The yield on the overnight futures contract for January 2010 delivery fell 16 basis points to 14.68 percent.

"``The markets are now predicting the tightening cycle may be shorter than initially expected,'' Marcio Ezequiel, head of fixed-income trading at Agora Corretora in Sao Paulo, said. The yield on the January 2010 contract may fall further, he said."

"Citigroup Inc. in a report this week said inflation ``likely peaked'' in July, at 6.37 percent. Inflation slowed in August for the first time in 11 months to 6.17 percent."

"The previous split decision in 2007, when three board members also dissented, foreshadowed a halt to Brazil's longest cycle of interest rate cuts two meetings later."

Signs of Slowdown

"Economists may lower their forecasts for central bank rate increases to 14.25 percent or 14.5 percent by year end from a 14.75 percent estimate in the most recent central bank survey of analysts published Sept. 5, Agora's Ezequiel said."

"Meirelles said on Aug. 29 he was ``seeing real signs'' inflation was converging to the government's target. The following week, carmakers said vehicle sales grew 4 percent in August from a year ago, the slowest pace in almost two years, after car-loan costs jumped."

"Roberto Padovani, chief economist at WestLB in Sao Paulo, said in a Bloomberg Television interview that the additional rate increases ``will be enough to bring GDP growth down to 4.5 percent from 5 percent this year.''"

Markets

"Though inflation forecasts for next year remain ``stubbornly high'' at 5 percent, the central bank may shift gears in the face of tightening global credit and a worsening outlook for Brazil's commodity exports, said Alvise Marino, an emerging-markets analyst at research firm IDEAglobal in New York"

"Previous central bank rate increases were accompanied by a message that demand was growing faster than supply. Government plans to boost spending excluding interest payments by 13 percent in 2009 is also adding pressure on inflation, said Thomas Trebat, director of Columbia University's Center for Brazilian Studies in New York."

"Manufacturers operated at a record 83.5 percent capacity in July and industrial output grew 8.5 percent that month, more than economists expected."

"Finance Minister Guido Mantega said today in Brasilia economic growth isn't stoking inflation. Growth this year will exceed the government's 5 percent forecast, he said."

`Sustainable'

"``The economy can grow at a pace of 5 percent to 5.5 percent keeping inflation within the target,'' Mantega told reporters. ``The increase of GDP comes as inflation is slowing and therefore growth is sustainable.''"

The central bank started to raise the Selic rate at the April 15-16 meeting after holding it unchanged for six months at a record low of 11.25 percent. Policy makers had increased the rate by half a percentage point twice before accelerating the pace in July. Last night's rate increase puts the Selic rate at the level it was in November 2006.

To contact the reporters on this story: Joshua Goodman in Rio de Janeiro at Jgoodman19@bloomberg.net; Andre Soliani in Brasilia at at soliani@bloomberg.net

"Last Updated: September 11, 2008 08:38 EDT"





Sponsored links



Treasuries Rise on Concern Lehman Lacks Capital; Stocks Decline

By Sandra Hernandez and Anchalee Worrachate

"Sept. 11 (Bloomberg) -- Treasuries advanced on concern that Lehman Brothers Holdings Inc. will collapse amid a shortage of capital, boosting demand for the safety of government debt."

"Government securities are on course for a third consecutive weekly gain on speculation that widening financial-market losses will drag on the economy. The number of unemployed Americans staying on benefit rolls rose to the highest level since 2003, a government report showed. U.S. stocks tumbled."

"``If there are going to be continued problems in financial institutions, we're not going to get yields up in that environment,'' said Arthur Bass, a managing director of derivatives in New York at the brokerage Newedge USA LLC. ``These types of moves that we've seen in large financial institutions have to shake people.''"

"The yield on the 10-year note fell 5 basis points, or 0.05 percentage point, to 3.58 percent as of 9:32 a.m. in New York, according to BGCantor Market Data. The 4 percent security maturing in August 2018 rose 13/32, or $4.06 per $1,000 face amount, to 103 14/32. Two-year yields declined 7 basis points to 2.13 percent."

"The Standard & Poor's 500 Index sank 1.4 percent. Lehman fell 3.4 percent in overnight trading after Citigroup Inc. downgraded the firm to ``hold'' from ``buy,'' citing a possible cut in the credit rating and deteriorating capital."

Trade Deficit

"First-time jobless claims fell to 445,000 in the week ended Sept. 6 from a revised 451,000 the prior week that was more than initially reported, the Department of Labor said in Washington. The number of people staying on rolls rose 122,000 to 3.525 million, the highest since October 2003."

"The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports, the Commerce Department said today. The gap grew 5.7 percent to $62.2 billion, the largest in 16 months."

"``The widening of the deficit will have people revising downward their GDP estimates for the third quarter,'' said David Coard, head of fixed-income trading in New York at Williams Capital Group, a brokerage for institutional investors. Today's jobs report is ``more evidence that the labor market is deteriorating. The Fed is going to ease before the end of the year.''"

Bets on Fed Cut

"Traders added to bets that the Federal Reserve will lower its target rate for overnight lending between banks this year for an eighth time since last September, futures contracts on the Chicago Board of Trade show. The likelihood of a quarter- percentage point cut to 1.75 percent jumped to 29 percent, from 14 percent yesterday. The majority of the bets are for no change."

"Economic growth will slow to 0.6 percent in the fourth quarter from 1.2 percent in the third quarter and 3.3 percent in the previous period, according to a Bloomberg News survey of banks and securities companies."

"Interest-rate derivatives imply banks are becoming more hesitant to lend. The difference between the rate banks charge for three-month dollar loans relative to the overnight indexed swap rate, the so-called Libor-OIS spread, was 84 basis points, near the widest since April 30."

"``Concerns for the health of some investment banks are the predominant theme in the market right now,'' said Alex Li, an interest-rate strategist in New York at Credit Suisse Securities USA LLC."

10-Year Note Auction

"Financial firms worldwide have reported $510 billion in credit-market losses and writedowns since the collapse of the subprime mortgage market in the U.S. roiled credit markets last year. Lehman yesterday reported a $3.9 billion third-quarter loss on $5.6 billion of writedowns, worse than the $2.2 billion loss analysts forecast."

"Further gains in Treasuries may be limited as investors speculate yields near the lowest levels since April will curb demand for $12 billion of 10-year notes that go on sale today, according to Nick Stamenkovic, a fixed-income strategist at RIA Capital Markets in Edinburgh."

"``Treasuries have gone up a long way,'' Stamenkovic said. ``They might struggle to rise much from here in the near term, or at least until the auction is out of the way.''"

"The Treasury sold $17 billion of 10-year notes in August, the most since 2003. Investors bid for 2.61 times the amount of debt on offer at the last sale. The average for the past 10 auctions is 2.37."

"The U.S. budget deficit will climb to a record $565 billion in the fiscal year that starts Oct. 1, Goldman Sachs Group Inc. economists Ed McKelvey and Alec Phillips wrote to clients yesterday. The world's biggest securities company increased its estimate by more than $100 billion."

The Congressional Budget Office projects the figure will be $438 billion next year versus $407 billion in 2008.

To contact the reporters on this story: Sandra Hernandez in New York at shernandez4@bloomberg.net; Anchalee Worrachate in London at Aworrachate@bloomberg.net.

"Last Updated: September 11, 2008 09:35 EDT"





Sponsored links



"Coffee Drops in N.Y. as Dollar Gains, Inflation Concerns Wane "

By Ron Day

"Sept. 11 (Bloomberg) -- Coffee declined as the dollar rose to the highest in a year against the euro, and traders speculated that inflation worries are fading."

"The U.S. Dollar Index, a gauge that includes the euro and yen, rose to the highest in 12 months, boosting raw materials costs for overseas buyers. For a 10th straight session, the Reuters/Jefferies CRB Index of 19 raw materials fell. Traders are seeing ``huge amounts of liquidation by hedge funds,'' said Jaime Menahem, a trader at Alaron Trading Corp. in Miami."

"``It's the dollar strength and there's less probability of inflation'' because of speculation that the global economy is slowing, Menahem said."

"Arabica coffee futures for December delivery dropped 2.7 cents, or 1.9 percent, to $1.381 a pound at 9:40 a.m. on ICE Futures U.S., the former New York Board of Trade. Most-active futures have declined 3.2 percent this week."

"Still, coffee gained 17 percent in the year before today, while the Dow Jones Industrial Average of 30 equities fell 14 percent and the Standard & Poor's 500 Index lost 15 percent."

"The year's lowest coffee prices may come in the next two weeks, Menahem said."

"Robusta coffee futures for January delivery declined $19, or 0.9 percent, to $2,168 a metric ton on London's Liffe."

The dollar strengthened on speculation that economic growth in Europe will be slower than in the U.S. and will prompt the region's central bank to lower interest rates.

"Since the July 15, when the dollar reached a record low against the 15-nation euro, the U.S. currency has gained 14 percent. The CRB Index fell 21 percent in that time."

"Silver, energy and orange juice futures led the index lower."

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.

"Last Updated: September 11, 2008 09:43 EDT"





Sponsored links








"U.S. Initial Jobless Claims Fall to 445,000 Last Week (Update1) "

By Bob Willis

"Sept. 11 (Bloomberg) -- More Americans than forecast filed initial claims for unemployment insurance last week, while total benefit rolls rose to the highest level in almost five years, as companies cut staff to maintain profits in a slowing economy."

"First-time jobless claims fell to 445,000 in the week ended Sept. 6 from a revised 451,000 the prior week that was more than initially reported. The number of people staying on rolls rose 122,000 to 3.525 million, the highest since October 2003."

"The labor market is weakening as the biggest housing recession in a generation spills over to the broader economy, slowing demand and causing a surge in financial losses. Economists surveyed by Bloomberg News this month forecast consumer spending in the current quarter slowed to the weakest pace since 1992."

"``The upward trend in initial jobless claims paints a bleak picture of the labor market,'' Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania, said before the report. ``Rising joblessness will hurt spending further and threatens to magnify the troubles in financial and housing markets.''"

"Treasuries, which had risen earlier in the day, stayed higher. Benchmark 10-year note yields were at 3.58 percent at 8:39 a.m. in New York, from 3.63 percent late yesterday. Futures on the Standard & Poor's 500 Stock Index dropped 1.5 percent to 1,214.70."

Economists' Forecasts

"Economists had forecast claims would fall to 440,000 from a previously reported 444,000 in the prior week, according to the median projection in a Bloomberg News survey. Estimates ranged from 400,000 to 460,000."

"The four-week moving average of initial claims, a less volatile measure than the weekly figure, rose to 440,000 from 439,750, today's report showed."

"So far this year, weekly claims have averaged 380,000, compared with 321,000 for all of 2007, when the economy generated 91,000 new jobs each month on average. Monthly job losses have averaged 77,000 this year, according to Labor data. Monthly payrolls tend to fall as claims rise."

The surge in claims that began in the middle of July can be at least partly attributed to the government's extension of jobless benefits under legislation signed by President George W. Bush in June. The government hasn't been able to quantify the program's impact on initial claims.

"``There is some uncertainly built into those weekly jobless numbers because of the extension of jobless benefits,'' said Ellen Zentner, U.S. macroeconomist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York."

Insured Unemployment Rate

"The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 2.6 percent from 2.5 percent. Twenty-eight state and territories reported an increase in claims, while 25 had a decrease. These data are reported with a one-week lag."

"The government last week reported the economy lost 84,000 jobs in August, and the jobless rate jumped to 6.1 percent, matching a high reached in September 2003. Job losses in the first eight months of the year have totaled 605,000."

"Consumers, feeling less secure in their jobs and battling gasoline prices that topped $4 a gallon two months ago, are pulling back on the spending that makes up two thirds of the economy. Consumer spending in the July-to-September period may be flat, the weakest since 1992, according to economists surveyed by Bloomberg last week."

Auto Slump

"Automakers and banks have been leading recent cutbacks in employment, and the weakness is spreading to other manufacturing and service companies."

"Lehman Brothers Holdings Inc., which this week reported a $3.9 billion third-quarter loss, was poised to eliminate as many as 1,000 jobs, or about 4 percent of its workforce, in the fourth round of cuts at the fourth-biggest U.S. securities firm this year, people familiar with the matter said in late August."

"New York Times Co., the third-largest U.S. newspaper publisher, will close its distribution operation in the New York metropolitan area and cut 550 jobs, or about 5.4 percent of its total staff, the company said Sept. 8. New York Times is firing workers as it copes with record industry declines in print advertising."

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

"Last Updated: September 11, 2008 08:43 EDT"





Sponsored links



India's Inflation Slows for a Third Consecutive Week (Update1)

By Kartik Goyal

"Sept. 11 (Bloomberg) -- India's inflation slowed for a third straight week, signaling that the central bank's three interest-rate increases since early June are beginning to work."

"Wholesale prices rose 12.1 percent in the week to Aug. 30 from a year earlier, the commerce ministry said in New Delhi today. That compared with a 12.34 percent gain in the previous week and the median 12.01 percent forecast in a Bloomberg News survey of 22 economists."

"Governor Duvvuri Subbarao, who took over the top job at the Reserve Bank of India last week, said Sept. 9 he would take ``appropriate'' action as it was not yet clear if the moderation in inflation was a ``discernible trend.'' Wholesale prices have risen at more than twice the central bank's targeted 5 percent pace since June."

"``The present level of inflation is way above the comfort zone,'' said Dharmakirti Joshi, an economist at Mumbai-based Crisil Ltd., the local unit of Standard & Poor's. ``I expect the central bank will raise the repurchase rate by another 25 basis points at its October meeting.''"

"Subbarao's predecessor Yaga Venugopal Reddy, who retired Sept. 5, in July raised the benchmark interest rate by a half point to a seven-year high of 9 percent after raising it twice in June. Other central banks across Asia have also been increasing borrowing costs amid higher food and fuel prices."

Bonds Rise

"India's 10-year bonds rose for a third day, pushing yields to a three-month low. The yield on the benchmark 8.24 percent note due April 2018 fell 9 basis points to 8.28 percent at the 5:30 p.m. close in Mumbai, according to the central bank's trading system."

"Higher interest rates have slowed growth in India, Asia's third-largest economy, Subbarao said this week. The central bank expects the $912 billion economy to expand 8 percent in the 12 months ending March, the slowest pace in four years."

"India's economy grew 7.9 percent in the three months to June 30 from a year earlier, the weakest pace since the last quarter of 2004. The central bank's next monetary policy statement is due Oct. 24."

"Declining oil and commodity prices are helping cool inflation across Asia and easing pressure on the region's central banks to keep increasing interest rates. Consumer prices in China rose 4.9 percent in August from a year earlier, the smallest gain since June 2007. Japan's wholesale inflation rate fell for the first time in 11 months."

Crude Oil

Crude has fallen about 30 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduced demand for fuels.

India's inflation has eased since reaching a 16-year high of 12.63 percent in the week to Aug 9.

"Prices of rice, corn, onions, potatoes, spices and edible oils declined in the week to Aug. 30, today's report showed. Manufactured-price inflation, with a 64 percent weight in the inflation basket, rose 11.07 percent, slower than the 11.28 percent gain in the previous week."

Elevated energy and commodity prices forced the central bank in July to raise its inflation forecast for the year to March 31 to 7 percent from a previous target of between 5 percent and 5.5 percent.

The government may revise today's preliminary wholesale- price estimate in two months after receiving additional data. The commerce ministry today raised its inflation estimate for the week ended July 5 to 12.19 percent from 11.91 percent.

To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.

"Last Updated: September 11, 2008 09:28 EDT"





Sponsored links



"Rig Market to Face `Major Deficit' by 2012, ODS-Petrodata Says "

By Marianne Stigset

"Sept. 11 (Bloomberg) -- The offshore rig market will face a ``major deficit'' by 2012 and require higher rental rates for new builds to meet growing demand, according to ODS-Petrodata."

"``Operation costs have risen a lot and we expect further increases,'' Gavin Strachan, principal at the research company, told the Pareto Oil and Offshore Conference in Oslo. Deepwater rigs will probably attract rates of $700,000 a day by the end of the year, he said. That compares with an average day rate of $600,000 this year, according to Seadrill Ltd."

"New rig capacity will require the addition of 20,000 trained crew within the next three years, which is likely to trigger a ``wage war,'' Strachan said. Prices for spare rig parts have gained 50 percent in the past three years, he added."

"Rig rates have climbed as high oil prices and dwindling reserves encourage producers to increase exploration and production, boosting demand for companies providing drilling and engineering services."

"Oil companies in June raised the price at which they plan new projects to an average $85 a barrel from $57 a barrel a year earlier, Strachan said. Oil futures have fallen 30 percent since reaching a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels."

"If oil sinks below $85, ``we'll see a temporary delay in companies approving drilling,'' Strachan said. ``If it drops below $60, we're in trouble.''"

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

"Last Updated: September 11, 2008 04:42 EDT"





Sponsored links
















Platinum Extends Drop to 20-Month Low on Outlook for Car Sales

By Stuart Wallace

Sept. 11 (Bloomberg) -- Platinum retreated to a 20-month low and palladium to its lowest since October 2005 on expectations flagging car sales will curb demand for the metals used in autocatalysts. Gold dropped to its weakest since October.

"Ford Motor Co., the second-biggest U.S. automaker, yesterday said it would cut jobs in Canada as it reduces North American output by 30 percent in the second half. U.S. auto sales dropped to a 15-year low in July and Toyota Motor Corp., the world's second-largest carmaker, is cutting production in Europe."

"``The autocatalyst makers are decreasing their stockpiles because the prognosis for car sales is very bad,'' Bayram Dincer, a commodity research analyst at Dresdner Bank AG in Zurich, said by phone. That's ``having a huge impact on the platinum price.''"

"Platinum for immediate delivery fell as much as $49.35, or 4.2 percent, to $1,130.65 an ounce in London, the lowest since Jan. 12, 2007. The metal traded down $25.25 at $1,154.75 as of 11:06 a.m. local time. Platinum has dropped 50 percent from a record $2,301.50 reached March 4."

"Dincer said he expects a ``volatile consolidation phase'' in the next week or two, with prices trading at $1,125 to $1,200 and a year-end target of $1,300. ``I don't see this as a buying opportunity,'' he said."

"Prices surged in the first quarter after South Africa restricted power supplies to mines to cope with an energy shortage. The country accounts for about three-quarters of world platinum supply, according to Johnson Matthey Plc."

"About half of demand comes from carmakers, taking into account recycling from used autocatalysts. Jewelry and the chemical and electrical industries make up most of the rest of consumption."

Palladium Declines

"Palladium for immediate delivery fell as much as $11, or 4.8 percent, to $216.75 an ounce, the lowest since Oct. 26, 2005. The metal last traded down $5 at $222.75. Palladium rose as high as $595 on March 4, compared with a record $1,125 in January 2001."

"Platinum futures sank to a 30-month low on the Tokyo Commodity Exchange, while palladium slumped to its lowest in almost three years."

"Gold for immediate delivery in London fell $10.05, or 1.3 percent, to $742.40 an ounce, after earlier trading at $739.05, the lowest since Oct. 10, 2007. The metal declined as the dollar strengthened against currencies including the euro, diminishing the appeal of gold as a hedge against a weaker U.S. currency."

"``With the bears still in the driving seat and investors continuing to free up cash in their most liquid assets, gold looks set to remain under pressure,'' James Moore, an analyst at TheBullionDesk.com in London, wrote in a report."

"Assets in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, fell 2.7 percent to 614.35 metric tons yesterday, according to figures on the company's Web site."

"Silver fell 0.49 cent, or 0.1 percent, to $10.68 an ounce. It earlier traded at $10.61, the lowest since October 2006."

To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

"Last Updated: September 11, 2008 07:10 EDT"





Sponsored links



Ruble Weakens to 13-Month Low Versus Dollar Amid Risk Aversion

By Emma O'Brien

"Sept. 11 (Bloomberg) -- Russia's ruble dropped to its weakest in almost 13 months against the dollar as concern that global credit losses will spread damped demand for higher- yielding, emerging-market assets. Government bonds also fell."

"The ruble's decline drove the currency to near the lower end of its trading band against the central bank's dollar-euro basket today as the cost of protecting Russian debt from default jumped to an almost two-year high. The currency has lost 6.5 percent versus the dollar since Aug. 8, when Russia began a five-day war with neighboring Georgia."

"``Since the war with Georgia people have stopped thinking about Russia as a normal place to invest,'' said Ulrich Leuchtmann, head of emerging-markets currency strategy at Commerzbank AG in Frankfurt. ``Investors are getting rid of riskier positions in emerging markets and one of them is now Russia.''"

"The ruble fell as low as 25.8315 per dollar today, the weakest since Aug. 22, 2007, and traded at 25.8214 by 2:37 p.m. in Moscow, from 25.7405 yesterday. It was its 11th straight drop against the U.S. currency, the longest losing streak since August 2004. The ruble was at 35.9640 per euro, from 36.0211."

Concern that credit losses are spreading has deepened since Lehman Brothers Holdings Inc. posted a quarterly loss yesterday that was the largest in the bank's 158-year history. Financial institutions have reported losses and writedowns of more than $500 billion since the start of last year.

War Wounds

"Investors have withdrawn about $23 billion from Russia since the start of the war with Georgia, according to UniCredit SpA. Bank Rossii, Russia's central bank, sold ``several billion'' dollars of its reserves this month to stem the ruble's decline, First Deputy Chairman Alexei Ulyukayev said today."

"Russian government bonds slid, with the yield on the benchmark 30-year sovereign note jumping 4 basis points to 5.93 percent, a one-year high. The two-year note yielded 6.13 percent, up 10 basis points at the highest since January. Credit-default swaps on the debt climbed 5 basis points to 171, the highest since November 2004, according to CMA Datavision prices."

"Bank Rossii regularly buys and sells currency in order to keep the ruble within a trading band against a basket made up of dollars and euros, limiting the impact of fluctuations on the competitiveness of Russian exports."

"The ruble was at 30.3845 against the basket, from 30.3668 yesterday. That's close to the 30.40 level that Commerzbank, Credit Suisse Group and Moscow-based Trust Investment Bank say is now the weaker end of the trading band. The basket rate is calculated by multiplying the ruble's rate to the dollar by 0.55, the euro rate by 0.45, then adding them together."

Foreign Reserves

"The bank sold a ``significant'' amount of foreign currency Sept. 4 as the ruble reached 30.4045 to the basket, its weakest closing price for more than two years, Ulyukayev said last week."

"The sales reduced international reserves by $8.9 billion last week, said Evgeniy Nadorshin, a senior economist at Trust."

"Bank Rossii sold $5 billion on Sept. 4 and Sept. 5, according to trust. Dresdner Kleinwort said the central bank spent as much as $10 billion last week and at least a further $10 billion this week to support the ruble. Reserves are now at $573.6 billion, the world's third-largest."

"The central bank has been offering rubles at 30.40 to the basket today, said Alexander Radu, a currency trader in Vienna for Bank Austria Creditanstalt AG."

To contact the reporter on this story: Emma O'Brien in Moscow at eobrien6@bloomberg.net

"Last Updated: September 11, 2008 06:55 EDT"





Sponsored links



U.S. Stocks Decline as Lehman Tumbles for Fourth Straight Day

By Elizabeth Stanton

"Sept. 11 (Bloomberg) -- U.S. stocks tumbled, sending the Standard & Poor's 500 Index to the lowest level since November 2005, on growing concern a collapse of Lehman Brothers Holdings Inc. will trigger a new round of bank failures."

"Lehman plunged 41 percent, extending its slide over the past year to 92 percent, after four analysts downgraded the stock on concern the securities firm's credit rating may be cut. Washington Mutual Inc., the biggest U.S. savings and loan, sank 19 percent to a 22-year low on expectations it will have to raise capital to cover $19 billion in losses. Financial shares in the S&P 500 extended their 2008 decline to 30 percent as a group."

"``If Lehman goes, attention will focus very quickly on who's next,'' said Matthew Kaufler, a fund manager at Rochester, New York-based Clover Capital Management Inc., which oversees $2.8 billion. ``Collapses like Lehman's undermine confidence, undermine credit, and ultimately undermine the efficient financing of the broader economy.''"

"The S&P 500 sank 14.48, or 1.2 percent, to 1,217.56 at 10:31 a.m. in New York after dropping to as low as 1,211.54. The Dow Jones Industrial Average decreased 130.84, or 1.2 percent, to 11,138.08 and the Nasdaq Composite Index fell 17.21, or 0.8 percent, to 2,211.49. More than five stocks retreated for each that rose on the New York Stock Exchange."

"Concern that Lehman won't survive follows the government seizure of mortgage-finance companies Fannie Mae and Freddie Mac over the weekend and comes six months after the Federal Reserve brokered JPMorgan Chase & Co.'s takeover of Bear Stearns & Co., a Lehman rival that faced failure on bad bets tied to mortgage bonds."

`Bear Case' for Lehman

"Banks are being closed at the fastest pace in 14 years and regulators have publicly ordered dozens of institutions to shore up capital or restrict their business. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure."

"Lehman declined $2.96 to $4.29. The shares were downgraded to ``hold'' from ``buy'' at Citigroup Inc., which cited a possible cut in the credit rating and deteriorating capital. Lehman's initiatives to boost investor confidence by announcing plans to sell assets and slash its dividend ``fell short of what was necessary to lessen the bear case on the stock,'' Goldman analysts including New York-based William Tanona said in a note to clients."

`A Sham'

"Lehman's plan to shore up its balance sheet ``appear to be a sham,'' Ladenburg Thalmann & Co. analyst Dick Bove said in a note to clients."

"Lehman led financial companies in the S&P 500 to a 3.5 percent drop, paring the group's rebound from a nine-year low on July 15 to 17 percent."

"Washington Mutual fell 19 percent to $1.87, the lowest since February 1986. Merrill Lynch & Co., the third-biggest U.S. securities firm, slid 18 percent to $19.15, the lowest since October 1998. American International Group Inc., the largest U.S. insurer, fell 9 percent to $15.85, the lowest since January 1995 and the biggest decline in the Dow average."

"``People are at the edge of their seats,'' Laszlo Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, told Bloomberg Television. ``It seems to be waiting for the other shoe to drop but this is like a centipede that has a hundred shoes and it just doesn't seem to ever want to end.''"

"The cost to bondholders of default protection on Lehman's obligations soared. Credit-default swaps on Lehman climbed 195 basis points to a record 775, according to broker Phoenix Partners Group prices at 8:25 a.m. in New York. A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year."

Energy Slump

Southwestern Energy Co. and Range Resources Corp. led a drop in fuel producers as crude oil and natural gas prices fell for a third day. Southwestern fell $1.26 to $29.43. Range Resources declined $1.49 to $39.98.

"Crude oil for October delivery sank as much as 1.2 percent to $101.43 on the New York Mercantile Exchange as the dollar rose to a one-year high against the euro, reducing the appeal of commodities as a hedge."

"New York Times Co. rose 8.6 percent to $15.16, its biggest gain since Jan. 28. Mexican billionaire Carlos Slim and his family acquired a 6.4 percent stake in the newspaper publisher, according to a regulatory filing today."

Botox For Migraines

Allergan Inc. rose 10 percent to $60 for the biggest gain in the S&P 500. The maker of wrinkle-smoothing treatment Botox said clinical trials showed Botox was effective in treating chronic migraines.

Stocks also declined after jobless claims and the trade deficit topped estimates.

"First-time jobless claims fell to 445,000 in the week ended Sept. 6 from a revised 451,000 the prior week that was more than initially reported. Economists surveyed by Bloomberg had forecast 440,000 new claims. The number of people staying on rolls rose 122,000 to 3.525 million, the highest since October 2003."

"The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports. The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said. Total imports and exports were the highest ever."

"U.S. stocks advanced yesterday as investors snapped up energy shares trading at their cheapest level in 18 months, while better-than-forecast earnings at FedEx Corp. buoyed industrial companies."

The S&P 500 is poised for its first annual decline since 2002 as more than $500 billion in credit losses and asset writedowns at financial firms worldwide and slowing economic growth damp the outlook for earnings.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

"Last Updated: September 11, 2008 10:36 EDT"





Sponsored links



Crude Oil Falls as Stronger Dollar Dims Commodities' Appeal

By Alexander Kwiatkowski

Enlarge Image/Details

"Sept. 11 (Bloomberg) -- Crude oil fell for a third day as the dollar gained against the euro, reducing the appeal of commodities as a hedge."

Oil dropped after the dollar rose to a one-year high against the euro on speculation that growth in Europe will slow more than in the U.S. Investors looking to hedge against the dollar's decline helped lead crude oil and other commodities to records earlier this year. Hurricane Ike was set to miss platforms off the Louisiana coast as it passes through the U.S. Gulf.

"``The sentiment in the market is very negative at the moment since demand for oil and commodities has declined sharply,'' said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. ``Quite a lot of investors are pulling out of commodities.''"

"Crude oil for October fell as much as $1.15, or 1.1 percent, to $101.43 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $101.75 at 1:02 p.m. London time."

Crude has fallen about 30 percent from a record $147.27 a barrel on July 11 as high prices and slowing global economic growth reduce demand for fuels.

"The International Energy Agency lowered its 2008 oil demand forecasts yesterday, citing an expectation of weakening fuel consumption in the U.S., the world's biggest gasoline consumer."

"The dollar climbed to $1.3893 per euro, the strongest since Sept. 18, 2007, before trading at $1.3936 as of 1:03 p.m. in London from $1.3998 late yesterday in New York."

Hurricane's Eye

"Hurricane Ike's eye was 620 miles (995 kilometers) east of Brownsville, Texas, and moving west-northwest at 9 miles per hour, the National Hurricane Center said in an advisory at 4 a.m. Houston time today."

"Ike strengthened to a Category 2 hurricane with sustained winds of 100 mph, up from 80 mph yesterday. The storm is forecast to sweep through the center of the Gulf, missing the offshore Louisiana oil and natural gas fields."

"Some rigs, refineries and platforms shut down by Hurricane Gustav last week are staying closed as Ike tracks across the region. Gulf operators have evacuated personnel from 63 percent of the production platforms, the Minerals Management Service said on its Web site yesterday."

"The agency estimates that as much as 96 percent of Gulf of Mexico oil production, and 73.1 percent of natural gas output, is shut. That is about 1.25 million barrels a day of oil and 5.4 billion cubic feet a day of gas."

`Skirting Away'

"``Ike appears to be skirting away from the oil and gas production fields and should make land around the Corpus Christi area,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``The oil market may have escaped again.''"

"Brent crude oil for October settlement fell as much as $1.12, or 1.1 percent, to $97.85 a barrel on London's ICE Futures Europe exchange. It was at $98.25 at 1:03 p.m. London time."

Oil's decline led the Organization of Petroleum Exporting Countries to say this week it will try to limit production.

"OPEC members, who supply about 40 percent of the world's oil, agreed at a meeting in Vienna to a total production limit for 11 members of 28.8 million barrels a day, unchanged from previous targets. OPEC Secretary-General Abdalla El-Badri said this means it will trim ``oversupply'' by about 500,000 barrels a day."

"The decision is a signal that OPEC is ``entering price defense mode,'' Barclays Capital analysts led by Paul Horsnell said in a research note."

"``Saudi Arabia would be perfectly happy with prices in the $90 to $100 range,'' the Barclays analysts said. ``It appears that other OPEC members wished to give a stronger signal.''"

"Barclays slashed its fourth-quarter oil price forecast by 21 percent on weakening demand. The bank expects West Texas Intermediate to average $97.50 a barrel in the fourth quarter, $26.40 less than a forecast of $123.90 in its previous weekly report. The bank's Brent crude forecast was reduced to $95.90, from $122.20, for the fourth quarter."

"Natural gas for October delivery rose 0.8 percent to $7.454 per million British thermal units on Nymex, while gasoline futures rose 1.5 percent to $2.7005 a gallon."

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

"Last Updated: September 11, 2008 08:32 EDT"





Sponsored links



Asian Stocks Decline to Lowest Since November 2005; Banks Fall

By Kyung Bok Cho

Enlarge Image/Details

"Sept. 11 (Bloomberg) -- Asian stocks tumbled, driving the benchmark index to its lowest level since November 2005, on concern credit-market losses will increase and slowing growth will damp demand for the region's exports."

"Mitsubishi UFJ Financial Group Inc. and Australia & New Zealand Banking Group Ltd. fell more than 4 percent after Lehman Brothers Holdings Inc. posted a wider loss than analysts estimated. Mazda Motor Corp., which gets more than half of its operating profit in Europe, plunged the most in seven years after the European Commission cut the euro area's growth outlook. Sumitomo Heavy Industries Ltd. retreated 5.3 percent after Japan's machinery orders declined."

"The MSCI Asia Pacific Index sank 2.6 percent to 114.74 as of 7:35 p.m. in Tokyo, set for its biggest loss since July 25. The measure has given up gains made in a Sept. 8 rally sparked by the U.S. government's takeover of Fannie Mae and Freddie Mac."

"``The rescue of Fannie and Freddie wasn't enough to erase the symptoms of economic slowdown,'' said Lim Chang Gue, who oversees the equivalent of $1.8 billion as head of global investment at Samsung Investment Trust Management Co. in Seoul. ``Some industries would normally see a seasonal bump in demand about now, but this year there just isn't any.''"

"All 10 industry groups fell today, led by financial stocks."

"Japan's Nikkei 225 Stock Average lost 2 percent to 12,102.50, led by Mitsubishi UFJ. Taiwan's Taiex Index slumped 3.2 percent on speculation government measures to revive the economy will be insufficient. New Zealand's NZX 50 Index fell the least in the region after the central bank cut its benchmark interest rate by 50 basis points, more than expected."

Record Loss

"Standard & Poor's 500 Index futures were down 1 percent recently. U.S. stocks rose yesterday, with the S&P 500 advancing 0.6 percent to 1,232.04, as investors bought energy shares trading at their cheapest level in 18 months."

"Mitsubishi UFJ, Japan's biggest bank, fell 5.1 percent to 823 yen. ANZ, Australia's fourth-largest by market value, slid 4.3 percent to A$16.85."

"Lehman said yesterday it posted a $3.9 billion third- quarter loss on $5.6 billion of writedowns, worse than the $2.2 billion loss analysts had predicted. Chief Executive Officer Richard Fuld is striving to convince investors that the No. 4 U.S. securities firm will stem losses as housing prices fall."

"Mizuho Financial Group Inc., Japan's second-biggest bank by assets, retreated 5.3 percent to 445,000 yen. Babcock & Brown Ltd., an Australian infrastructure-asset manager that has lost 93 percent this year, fell 15 percent to A$2.00, a record low."

European Slowdown

"Lehman's loss pushed global writedowns and credit losses caused by the collapse in the U.S. mortgage market to $511 billion, according to figures compiled by Bloomberg News."

"``Global securities firms and investment banks can no longer count on the securitization deals that have kept them profitable in recent years,'' said Yuuki Sakurai, a Tokyo-based general manager at Fukoku Mutual Life Insurance Co., which manages about $54 billion."

"Mazda, Japan's fourth-largest automaker, slumped 10 percent to 463 yen in Tokyo, the most since September 2001. Nikko Citigroup today cut its rating on Mazda to ``sell'' from ``hold.''"

"The European Commission lowered its full-year growth forecast for the 15-nation euro region's economy to 1.3 percent, from 1.7 percent earlier, and signaled the 2009 outlook may also be cut. The euro dropped to the lowest in 13 months against the yen. A weaker euro hurts Japanese exporters by reducing the value of repatriated sales."

"Nintendo Co., which got 37 percent of last year's sales from Europe, fell 3.2 percent to 48,050 yen in Osaka."

"TPV, Motech"

"TPV Technology Ltd., the world's biggest contract maker of computer monitors that gets a quarter of its sales from Europe, tumbled a record 13 percent to HK$2.73 in Hong Kong. The company cut its forecast for shipments this year. Motech Industries Inc., Taiwan's biggest solar-cell maker that got 39 percent of last year's sales from Europe, fell 4.8 percent to NT$160."

Stocks in Taiwan also fell as investors bet a NT$180.9 billion ($5.6 billion) package of spending and tax cuts won't boost the market.

"The measures ``will not succeed since they are not altering corporate or economic fundamentals in a meaningful way,'' said Howard Wang, who oversees $10 billion at JF Asset Management Ltd. in Hong Kong."

"Sumitomo Heavy, Japan's largest maker of plastic injection- molding gear, dropped 5.3 percent to 469 yen. Fanuc Ltd., the world's biggest industrial-robot maker, lost 2 percent to 7,540 yen in Tokyo."

Capital Spending

"Japan's machinery orders declined 3.9 percent in July from the previous month, the Cabinet Office said today. Economists had estimated orders, an indicator of capital spending in the next three to six months, would fall 3.6 percent."

"In Hong Kong, China Mobile Ltd., the world's biggest wireless carrier by users, fell 5.3 percent to HK$77, the lowest since June 15, 2007. Chinese regulators plan to let some China Mobile users keep their phone numbers when they switch to rivals, the Nanfang Daily newspaper reported today."

"Affiliates of South Korea's Kumho Asiana Group gained after the group said it may sell all or part of its life-insurance unit to raise cash. Daewoo Engineering & Construction Co., South Korea's biggest builder, climbed 2.7 percent to 13,250 won. Asiana Airlines Inc., the nation's second-largest carrier, advanced 4.9 percent to 4,610 won."

"Daito Trust Construction Co., a Japanese rental property developer, added 11 percent to 5,000 yen, the biggest gain since December. Unison Capital Inc., a Japanese private equity firm, will lead a group in bidding for Daito in a deal worth as much as $9 billion, the Wall Street Journal reported."

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net

"Last Updated: September 11, 2008 06:53 EDT"





Sponsored links



"Junk Bond Distress Levels Surge, Signaling Defaults (Update2) "

By John Glover

"Sept. 11 (Bloomberg) -- More than 30 percent of European high-risk, high-yield bonds are trading at distressed levels, the most in five years, stoking speculation defaults will rise."

"Investors demand an extra yield over government debt of more than 10 percentage points to hold 53 of the 169 bonds in Merrill Lynch & Co.'s Euro High Yield Constrained Index. That's the biggest proportion of distressed debt since March 2003, in the aftermath of the Sept. 11 terror attacks and the dot-com crisis."

"``Typically, those levels of distress would indicate that defaults are going to rise,'' said Karl Bergqwist, who manages the equivalent of about $500 million in high-yield debt at Gartmore Investment Management in London. ``We think there's much worse to come. Spreads could go a lot wider and defaults are undoubtedly going to go up.''"

"Defaults on European speculative-grade corporate bonds will climb to 2.3 percent in a year, from 0.7 percent now, near a record low, Moody's Investors Service said in a Sept. 8 report. Worldwide defaults will surge to 7.4 percent, from 2.7 percent."

"Spreads on high-yield debt have widened as investors, fleeing the fallout from the collapse of the U.S. subprime- mortgage market, shun all but the safest bonds and as banks tighten lending standards. The average yield in the Merrill High Yield index, an indication of the absolute cost of debt to companies, is 12.4 percent, twice the level of last March."

Europe Versus U.S.

"The spread versus government bonds in Europe is 844 basis points, matching the highest since March 2003, according to the Merrill index. In the U.S., where Moody's says defaults are already at 3.3 percent, spreads on the comparable Merrill index are 11 basis points higher at 855."

"Europe's primary high-yield bond market has been effectively closed since July 2007, data compiled by Bloomberg show. Last year, companies borrowed the equivalent of $32.1 billion using such securities, with all but $5 billion in the first half. Now, amid spiraling money-market rates, investors are wary of speculative borrowers. High-yield, or junk, bonds are those rated below Baa3 by Moody's or BBB- by Standard & Poor's."

"``If companies find it difficult to raise money in the bond market at the same time as banks are tightening lending, then the probability of default increases,'' said Guy Stear, a strategist at Societe Generale SA in Paris. ``That's the case even if the fundamental business is sound.''"

Highest Default Rate

"New York-based Moody's expects makers of durable consumer goods such as furniture, floor coverings and fridges to show the highest default rate in Europe. The companies with the largest share of bonds in euros at distressed levels are General Motors Corp. and its finance unit, General Motors Acceptance Corp., according to Bloomberg data."

"In Europe, six bonds sold by chemicals companies and nine issues from financial firms have spreads above 1,000 basis points more than government debt."

Some bonds sold in the rush of the first half of 2007 are now distressed.

"The 500 million euros ($697 million) of 7 percent notes due 2017 sold by Norske Skogindustrier ASA, the second-biggest newsprint maker, are at a spread of 1,035 basis points more than government debt, according to Royal Bank of Scotland Group Plc. The 125 million euros of 8.125 percent bonds due 2014 sold by Paris-based car rental company Europcar Group SA are at 1,446 basis points, RBS prices show."

"Whistlejacket Capital Ltd., the structured investment vehicle managed by Standard Chartered Plc, defaulted on 45 million pounds ($79 million) of senior notes sold in June 2007."

`Leading Indicator'

"Levels of distress are ``a leading indicator of future speculative-grade defaults with a lead time of roughly nine months,'' S&P analysts including Diane Vazza wrote in a research report published last month. ``A rising distress ratio is indicative of a stressful credit environment.''"

"The absolute number of bonds in the Merrill index quoted at distressed levels is the highest since November 2002 after banks reported losses and writedowns of more than $500 billion worldwide, almost half of them in Europe."

"In November 2002, investors were willing to pay an average price of 74 cents on the euro for the bonds in the Merrill High Yield index. The securities carried an average Moody's rating of B1, four levels below investment grade. The average price of the current index is 80.7 cents and the rating is unchanged."

To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net

"Last Updated: September 11, 2008 08:46 EDT"





Sponsored links



"Chile's Bank Cuts Growth Forecast, Raises Inflation Outlook "

By Sebastian Boyd

"Sept. 11 (Bloomberg) -- Chilean economic growth may slow next year as interest-rate increases to fight faster-than- expected price slow domestic spending, the central bank said today."

"The inflation scenario facing Chile has ``drastically deteriorated'' since the last report in May, the bank said. Inflation may end the year at 8.5 percent. Four months ago it expected prices to rise 4.7 percent in 2008."

"The bank has increased borrowing costs by 2 percentage points over four straight meetings and said further rises may be needed to slow price rises to its 3 percent target. The effect of higher borrowing costs will slow economic growth to between 3.5 to 4.5 percent next year, from a range of between 4.5 percent and 5 percent this year, the bank said."

"``Private consumption will continue to decelerate, the annual growth in the investment rate will slow and public spending will rise less quickly than this year,'' the bank said."

"Consumer prices may rise 4.9 percent next year, the bank said today in its monetary policy report, published three times a year. Underlying inflation, which excludes fuel, fruit and fresh vegetables, may end the year at 8.4 percent, slowing to 4.8 percent next year."

"Inflation will slow to 3 percent in 2010, the bank said."

"``The projected course of inflation is based on activity losing its dynamism, growing about a percentage point less than its trend rate,'' the bank said. Its ``restrictive monetary policy and a normalization of the rhythm of demand growth,'' will ease pressure on prices, it said."

The average price of copper may fall to $3.10 per pound next year from $3.50 per pound this year.

To contact the reporter on this story: Sebastian Boyd in Santiago at sboyd9@bloomberg.net

"Last Updated: September 11, 2008 10:50 EDT"





Sponsored links



"Cosan, Perdigao, Telemar Norte Leste: Brazilian Equity Movers "

By Alexander Ragir

"Sept. 11 (Bloomberg) -- The following companies are having unusual price changes in Brazil trading. Stock symbols are in parentheses, and share prices are as of 9:22 a.m. New York time. Preferred shares are usually the most-traded class of stock."

"The Bovespa index fell for a third time this week, dropping 2.3 percent to 48,517.73."

"Cosan SA Industria & Comercio (CSAN3 BS) fell for an 11th day, dropping 8.1 percent to 16 reais. The world's biggest sugarcane processor reports fiscal first-quarter earnings after the market closes. White, or refined, sugar for delivery in December fell $2, or 0.5 percent, to $376.70 a ton."

"Perdigao SA (PRGA3 BS) lost the most since August 15, dropping 3.3 percent to 40.22 reais. Brazil's biggest food company may have its Ba1 debt rating cut by Moody's Investors Service after profit margins fell and costs rose. Moody's lowered the outlook on Perdigao's rating to ``negative'' from ``stable,'' the ratings company said yesterday in a statement. Perdigao's Ba1 rating is one level below investment grade."

"Telemar Norte Leste SA (TMAR5 BS) rose for a second day, gaining 1.5 percent to 80.01 reais. Telemar Participacoes SA, the owner of Telemar Norte Leste, Brazil's largest telephone company, delayed indefinitely a plan to sell about $1.5 billion of bonds intended to help finance its acquisition of rival Brasil Telecom Participacoes SA (BRTP3 BS). Telemar gained 1 percent to 78.81 reais. Brasil Telecom fell 1.6 percent to 51.84 reais."

To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;

"Last Updated: September 11, 2008 09:47 EDT"





Sponsored links


















"Light Shareholders EDF, BNDESPar Cancel Stock Sale (Update1) "

By Laura Price

Sept. 11 (Bloomberg) -- Light SA's second- and third-largest stockholders canceled plans to sell 1.07 billion reais ($586 million) in common shares in the Brazilian electricity distributor because of unfavorable market conditions.

"EDF International SA, the Brazilian unit of power producer Electricite de France, and BNDES Participacoes SA, a unit of Brazil's state development bank, canceled plans to sell the stakes, Rio de Janeiro-based Light said today in a statement on the Brazilian securities regulator's Web site."

"The two companies said May 30 they would sell as many as 47.7 million common shares, worth 1.07 billion reais based on yesterday's closing price. BNDESPar owns 33.7 percent of Light, while EDF International holds 6.6 percent and Rio Minas Energia Participacoes SA has 50 percent of the company's stock."

"Light fell 3 centavos, or 0.1 percent, to 22.45 reais at 10:26 a.m. in Sao Paulo trading. The shares have fallen 17 percent in the past 12 months, compared with a 9.9 percent drop for Brazil's benchmark Bovespa index."

To contact the reporter on this story: Laura Price in Sao Paulo at lprice3@bloomberg.net

"Last Updated: September 11, 2008 09:40 EDT"





Sponsored links



























ECB's Papademos Says Europe Likely to Avoid Recession (Update2)

By Simone Meier and Gabi Thesing

Sept. 11 (Bloomberg) -- European Central Bank Vice President Lucas Papademos said the economy is likely to escape a recession and there are signs higher energy costs are driving up wages on a broad front.

"``There are indications that broad-based second-round effects are materializing and we want to make sure that they don't become even broader and stronger,'' Papademos told reporters in Hamburg today. ``It's not considered likely'' that the euro-area economy will shrink in the third quarter ``but it can't be excluded, taking into account uncertainty and downside risks,'' he added."

The 15-nation economy contracted in the second quarter and is struggling to recover in the third. The ECB nevertheless raised interest rates to a seven-year high in July and said it will act to ensure that faster inflation doesn't become entrenched as workers seek compensation for higher food and energy costs.

"``It's essential that broader-based second-round effects are avoided,'' Papademos said today. His comments were echoed by ECB council member Yves Mersch, who said slower economic growth and a drop in oil prices have not blunted inflation risks."

"``While oil prices have declined, past increases could still trigger a wage-price spiral,'' Mersch said in the bi-annual economic bulletin of the Luxembourg central bank, which he heads. The inflation risks identified when the ECB raised its key interest rate to 4.25 percent in July ``remain today.''"

Wage Demands

"Inflation is running at 3.8 percent, almost twice the ECB's 2 percent limit."

"IG Metall, Germany's biggest labor union representing 3.5 million workers, said Sept. 8 it will seek a pay increase of between 7 percent and 8 percent when wage negotiations start on Oct. 2. That would be the biggest wage increase in at least 16 years. Workers at Ireland's Electricity Supply Board are demanding an 11.25 percent raise."

"``Papademos and Mersch are just pragmatic,'' said Kenneth Broux, an economist at Lloyds TSB Group Plc in London. ``The ECB is confident that growth will recover in the fourth quarter and unless they see data to the contrary, they will not ease policy.''"

"The euro-area economy shrank 0.2 percent in the three months through June. Manufacturing orders in Germany, Europe's largest economy, fell for an unprecedented eighth straight month in July and Europe's manufacturing and service industries contracted for a third month in August."

Recession Risk

A third-quarter decline in gross domestic product would put the 15-nation euro-region economy into its first recession since the launch of the single currency in 1999.

The European Commission yesterday predicted the economy will stagnate this quarter. The commission lowered its full-year growth forecast to 1.3 percent from 1.7 percent and signaled the 2009 outlook may also be cut.

"Still, the price of oil has fallen almost 30 percent from a July 11 record of $147.27 a barrel and the euro has dropped 12 percent against the dollar in the past three months, which may provide some relief to consumers and exporters."

"The economy ``should recover by the end of the year,'' Wolfgang Franz, President of Germany's ZEW economic research institute, said in a speech in Frankfurt last night. Then, ``rate increases could be put back on the table for discussion.''"

"ECB council member Axel Weber said in an interview published Aug. 27 that ``if the economic outlook brightens somewhat again towards the end of the year and next year, which I still expect, we'll have to see if action is necessary.''"

"The ECB said in its monthly bulletin today that, while current rates should help it achieve price stability in the medium term, inflation risks remain on the ``upside.''"

To contact the reporters on this story: Simone Meier in Frankfurt at smeier@bloomberg.net.

"Last Updated: September 11, 2008 09:36 EDT"





Sponsored links



Lehman Risk Jumps as Default Swap Traders Demand Upfront Fees

By Abigail Moses and Neil Unmack

"Sept. 11 (Bloomberg) -- Sellers of default protection on bonds sold by Lehman Brothers Holdings Inc. are demanding upfront fees for the first time, according to data provider CMA Datavision."

"Contracts protecting $10 million of Lehman debt for one year cost 13 percent upfront and 5 percent a year, according to CMA prices at 9:50 a.m. in New York. That means it costs $1.3 million in advance and $500,000 a year to protect the bonds compared with $1.2 million a year yesterday."

Banks and hedge funds demand payments in advance for default protection when they perceive a company is at imminent risk of being unable to meet its obligations. Lehman shares dropped 39 percent in New York trading after three analysts said they lowered their recommendations because the firm's credit rating may be cut.

"``The speed at which confidence has diminished in Lehman is frightening,'' said Hank Calenti, a credit analyst at Royal Bank of Canada in London. ``The concept that Lehman is distressed is scaring investors to buy credit-default swap protection. So credit-default swaps are moving out fast.''"

"Lehman is graded at A2 by Moody's Investors Service, its sixth-highest ranking, and an equivalent A at Standard & Poor's and both firms said this week they may downgrade the lender."

Record Loss

"Lehman reported a record $3.9 billion loss for the third quarter yesterday and said it would sell a majority stake in its asset-management unit, spin off real-estate holdings and cut the dividend in an effort to shore up capital and regain investor confidence."

"Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite."

"A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year."

"The cost of default protection on corporate bonds jumped today on investor concern Lehman won't be able to meet its counterparty commitments. The firm has been among the top 10 counterparties in the $62 trillion market for credit-default swaps, according to Fitch Ratings."

Contracts Shunned

"Investors are shunning the contracts on concern a collapse of Lehman would disrupt the swaps in which they are involved as counterparties, according to Mana Nakazora, chief credit analyst for Japan at JPMorgan Chase & Co. in Tokyo."

"``If Lehman goes bankrupt, what happens to the CDS market?'' Nakazora said today. ``Investors are reluctant to trade.''"

"Credit-default swaps on the benchmark Markit CDX North America Investment Grade Index jumped 5.5 basis points to 152.5, according to Phoenix Partners Group. In Europe, the Markit iTraxx Europe index climbed 4.75 basis points to 106.5, JPMorgan prices show."

"The prospect of credit rating cuts at Lehman may exacerbate investor concern about counterparty risk, according to a Deutsche Bank AG report today."

"``If the rating agencies downgraded into BBB territory then it may force the Fed into play as confidence in the name may fade further,'' Adekunle Ademakinwa, a credit strategist at Deutsche Bank in London, wrote in a note to investors today. ``Concerns over counterparty risk in the CDS market could escalate leaving independence unlikely.''"

Bonds Plunge

"A survey of 146 asset managers and banks last month found that almost 60 percent expect another ``major financial services firm'' will collapse before the global credit crisis ends, according to a report by Greenwich Associates. More than 60 percent of fixed-income investors said they've cut back their use of credit-default swaps because of the risk a counterparty may fail."

"Lehman bonds plunged for a second day, leading investment- grade debt lower. Lehman's 6.75 percent notes due in 2017 dropped 18.9 cents to 70 cents on the dollar for a yield of 12.2 percent, or 8.65 percentage points more than Treasuries of similar maturity, according to Trace, the Financial Industry Regulatory Authority's bond-pricing service."

"The firm's 5 percent notes due in 2011 dropped 13 cents to 77 cents on the dollar, yielding 17.4 percent, or a spread of 14.6 percentage points."

To contact the reporters on this story: Abigail Moses in London Amoses5@bloomberg.net; Neil Unmack in London nunmack@bloomberg.net

"Last Updated: September 11, 2008 10:35 EDT"





Sponsored links



Barclays Cuts Fourth Quarter Oil Forecast to $97.50 (Update1)

By Stephen Voss

Sept. 11 (Bloomberg) -- Barclays Capital slashed its fourth-quarter oil price forecast by 21 percent after weakening demand prompted OPEC to yesterday urge members to curb excess supply.

"``A war of attrition is happening in the market, which we expect will make stabilization a drawn out process,'' London- based analysts Paul Horsnell and Kevin Norrish wrote in a weekly report published late yesterday. ``Our price forecasts have been adjusted accordingly.''"

"Barclays expects West Texas Intermediate crude oil, the benchmark traded in New York, to average $97.50 a barrel in the fourth quarter. That's $26.40 less than a forecast of $123.90 in its previous weekly report."

"The bank's Brent crude forecast was reduced to $95.90, from $122.20, for the fourth quarter."

"For 2009, the WTI forecast was lowered to $115.50 from $123.20 and Brent to $114.20 from $121.70. The bank left its 2010 forecasts unchanged at $126.10 for WTI and $121.30 for Brent."

Crude oil for October fell 0.8 percent to $101.73 a barrel in electronic trading on the New York Mercantile Exchange as of 11:05 a.m. London time. Brent crude oil was down 0.5 percent at $98.44 on London's ICE Futures Europe exchange.

Output Limit

"OPEC yesterday urged its members to ``strictly'' adhere to existing production quota limits. OPEC said the limit for 11 members is 28.8 million barrels a day, having reduced that total by about 875,000 barrels a day, to reflect the suspension of Indonesia as a member."

"``While we believe that Saudi Arabia would be perfectly happy with prices in the $90 to $100 range, it seems that other OPEC members wished to give a stronger signal,'' Barclays said."

"Some press reports ``created confusion as to whether the target ceiling had reverted to a previous level, which it most definitely has not done,'' because the allocations ``are those that were current before the latest meeting, and which remain current now,'' the Barclays report said."

"Barclays Capital is the investment banking arm of London- based Barclays Plc, the U.K.'s third-biggest bank."

To contact the reporter on this story: Stephen Voss in London at sev@bloomberg.net

"Last Updated: September 11, 2008 06:08 EDT"





Sponsored links





"Lehman Recommendation Cut at Citigroup, Goldman Sachs (Update1) "

By Joyce Moullakis

Sept. 11 (Bloomberg) -- Lehman Brothers Holdings Inc.'s stock recommendation was cut by Citigroup Inc. and Goldman Sachs Group Inc. on a possible reduction in the company's credit rating following its biggest-ever loss.

"Lehman was lowered to ``hold'' from ``buy'' by Citigroup analysts, who also cut their annual earnings-a-share estimate for the New York-based firm to a loss of $11.32 a share, compared with an earlier estimated loss of $8.26 a share. Goldman Sachs changed its rating to ``neutral'' from ``buy.''"

"Lehman yesterday posted a $3.9 billion loss for the third quarter, and said it would sell a majority stake in its asset- management unit, spin off real-estate holdings and cut the dividend in an effort to shore up capital and regain investor confidence. The bank has dropped 89 percent this year."

"The Lehman initiatives ``fell short of what was necessary to lessen the bear case on the stock,'' Goldman analysts including New York-based William Tanona said in a note to clients today. Risks to the company's credit rating may lead to higher funding costs, they said."

"The company's six-month price estimate was slashed by two- thirds to $7, because of ``significant uncertainty'' surrounding management's measures to sell assets and support the balance sheet, the Goldman analysts wrote."

"There was a ``higher probability'' of a cut in the firm's credit rating following the third-quarter loss, Citigroup analysts including New York-based Prashant Bhatia said in the note to clients."

"``Confidence and perception issues are overwhelming Lehman's franchise value,'' they said. ``We view raising capital in the very near-term as one of the most effective options to address the perception and confidence issues surrounding Lehman shares.''"

To contact the reporters on this story: Joyce Moullakis in London at jmoullakis@bloomberg.net;

"Last Updated: September 11, 2008 07:47 EDT"





Sponsored links





"U.K. Stocks Decline; Home Retail, AstraZeneca Lead the Retreat "

By Henrietta Rumberger and Adam Haigh

"Sept. 11 (Bloomberg) -- U.K. stocks fell for a third day on renewed concern the slowing U.K. economy and inflationary pressures are weighing on retailers, mortgage lenders and travel companies."

"Home Retail Group Plc sank 5.9 percent after Britain's second-largest home-improvement chain reported lower sales. HBOS Plc, the U.K.'s biggest mortgage lender, slid 5.9 percent as Bank of England policy maker David Blanchflower said job losses will triple as the economy slows, while British Airways Plc led a retreat in airline stocks. The U.K.'s two largest drugmakers AstraZeneca Plc and GlaxoSmithKline Plc both dropped more than 2 percent after two brokerages recommended selling the shares."

"The FTSE 100 dropped 76.6, or 1.4 percent, to 5,289.6 at 1:04 p.m. in London. The FTSE All-Share Index lost 1.5 percent and Ireland's ISEQ Index retreated 1.9 percent."

"``Eyes have now turned back to the underlying difficulties which haven't changed,'' said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers, a unit of Hargreaves Lansdown Plc, which has $21.5 billion under management. ``The general slowdown has meant people are less likely to spend on discretionary items. We need corporate earnings to start improving and this is not happening,'' he added."

The benchmark FTSE 100 today extended its 18 percent slump so far this year as the economy cools and banks from Barclays Plc to Royal Bank of Scotland Group Plc have been forced to raise capital as losses topped $500 billion at financial companies worldwide.

"Home Retail retreated the most in two months, down 5.9 percent to 227.5 pence after saying second-quarter same-store sales fell at its Homebase and Argos outlets as a housing slump worsened and consumer confidence slid to a four-year low."

Revenue Drops

"Revenue at stores open at least a year declined 5.8 percent at Argos and 8.3 percent at Homebase in the three months ended Aug. 30, the Milton Keynes, England-based company said in a statement."

"William Morrison Supermarkets Plc declined 6.1 percent to 253.75 pence, the steepest retreat since 2004. The smallest of the four main U.K. food retailers said first-half profit fell 3.1 percent after income from real-estate sales dwindled and its tax bill rose."

"HBOS slid 5.9 percent to 282 pence. Bradford & Bingley Plc, the biggest lender to U.K. landlords, lost 5.5 percent to 39 pence. Blanchflower said in testimony to lawmakers unemployment in Europe's second-largest economy will rise to 60,000 a month, from its current level of 20,000."

British Airways Declines

"British Airways, Europe's third-biggest airline, lost 5.4 percent to 246 pence. Ryanair Holdings Plc, the region's largest discount airline, slid 3.6 percent to 2.65 euros."

"AstraZeneca fell the most in almost eight months, off 3.9 percent to 2,539 pence. The U.K.'s second-largest drugmaker was cut to ``sell'' from ``neutral'' at Goldman Sachs Group Inc."

"``The shares are not supported at current levels by near- term fundamentals and we believe AstraZeneca is likely to underperform its pharma peers,'' London-based analyst John Murphy wrote in a note."

"GlaxoSmithKline lost 2.6 percent to 1,246.5 pence. Exane BNP Paribas downgraded the shares to ``underperform'' from ``outperform,'' saying the stock now enters ``a more risky period'' having outperformed the industry by 10 percent during the last three months."

"Separately, Moody's gave the European pharmaceutical industry outlook a negative rating for the second straight time, saying drugmakers are struggling to develop products to replace sales lost when the patents expire."

The following stocks also rose or fell in the U.K. markets. Stock symbols are in parentheses.

U.K. companies:

"Galliford Try Plc (GFRD LN) slid 2.75 pence, or 4.1 percent, to 63.25. The U.K. construction company that's upgrading Wimbledon's Centre Court tennis stadium said annual profit fell 2.5 percent after it revamped its housing division amid a slump in demand."

"Premier Farnell Plc (PFL LN), the U.K. electronic and industrial products supplier founded in 1939, lost 8 pence, or 4.2 percent, to 180.5 after saying sales dropped in the U.S., Europe, and the U.K."

"``Results are slightly behind our expectations and, while they detail impressive earnings growth, they also show a continued slowdown in sales growth and lower operating margins,'' Investec Securities analyst Guy Hewett wrote in a note today. ``We expect this negative trend to continue as the economic slowdown bites and now believe the group will do well to maintain earnings next year.''"

Irish companies:

"Bank of Ireland Plc (BKIR ID) slid 6.3 percent to 5.17 euros, Allied Irish Banks Plc (ALBK ID), lost 2.6 percent to 7.89 euros, and Anglo Irish Bank Plc (ANGL ID) retreated 4.3 percent to 5.13 euros. Dresdner Kleinwort cut its 2009 and 2010 earnings estimates for Irish banks on concern over rising bad debt levels and shortfalls in capital."

To contact the reporters on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Adam Haigh in London at ahaigh1@bloomberg.net

"Last Updated: September 11, 2008 08:10 EDT"





Sponsored links



"French Stocks: CNP, EADS, France Telecom, Sanofi-Aventis "

By Henrietta Rumberger

"Sept. 11 (Bloomberg) -- France's CAC 40 Index retreated 26.71, or 0.6 percent, to 4,256.95 as of 11:31 a.m. in Paris, declining for a third day. The SBF 120 Index lost 0.6 percent."

The following shares rose or fell in Paris. Stock symbols are in parentheses.

"CGGVeritas (GA FP) snapped two days of declines, adding 63 cents, or 2.8 percent, to 23.56 euros. The world's largest seismic surveyor expects sales to grow 25 percent in the second half, led by its equipment and offshore services units, Chief Executive Officer Robert Brunck said."

"CNP Assurances SA (CNP FP) declined 1.67 euros, or 2.1 percent, to 79.32 euros, the steepest drop this week. France's largest life insurer was downgraded to ``sell'' from ``neutral'' at UBS AG, which also lowered Axa SA to ``neutral'' from ``buy.'' Axa shares retreated 66 cents, or 2.9 percent, to 22.075 euros."

"London-based analyst Marc Thiele fears ``more setbacks to new business'' at CNP, he wrote in a note to clients today. Axa shares slumped 70 cents, or 3.1 percent, to 22.03 euros."

"European Aeronautic, Defence & Space Co. (EAD FP), the world's biggest maker of airliners, gained for a fourth day, climbing 45.5 cents, or 2.9 percent, to 16.445 euros after the dollar rose to the highest in a year against the euro on speculation that economic growth in Europe will be slower than in the U.S., thus boosting the value of planes sold in the U.S. currency."

"Separately, EADS said it was ``disappointed'' by U.S. Defense Secretary Robert Gates's decision to delay a $35 billion contest for aerial refueling tankers until the next presidential administration. The company said the delay won't affect sales or earnings before interest and taxes."

"France Telecom SA (FTE FP), Europe's third-largest phone company, fell for the first time this week, retreating 23.5 cents, or 1.2 percent, to 19.19 euros. The deployment of its French fiber-optic network is delayed by about a year, La Tribune reported, citing Louis-Pierre Wenes, the management board member in charge of the company's domestic business."

"Geci International SA (GECP FP) climbed the most this week, jumping 27 cents, or 8 percent, to 3.65 euros. The aerospace- services company said investors in Reims Aviation approved its plan to take a majority stake in the group for 4.5 million euros."

"Keyrus (KEY FP) tumbled the most in more than a month, plummeting 10 cents, or 8.3 percent, to 1.10 euros. The computer-services company that installs database tracking software reported a loss of 1 million euros in the first half, while forecasting a ``significant recovery'' for the rest of the year."

"Groupe Promeo (ALMEO FP) increased for a third day this week, adding 12 cents, or 0.6 percent, to 19 euros. The real- estate developer said first-half revenue rose 18 percent to 55.5 million euros and forecast increased profitability."

"Vet' Affaires SA (VET FP) plunged the most since Jan. 21, tumbling 1.42 euros, or 7.61 percent, to 17.23. The discount clothing retailer said it hopes to build on 2007 sales and earnings in a ``morose'' market, without giving a clearer forecast."

To contact the reporter on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net.

"Last Updated: September 11, 2008 06:47 EDT"





Sponsored links




"UniCredit Sees Baltic Growth Slowing, Contracting (Update1) "

By Milda Seputyte

"Sept. 11 (Bloomberg) -- UniCredit Group lowered its outlooks for Estonia and Latvia, saying weakening domestic demand is weighing on the Baltic nations' economies."

"The Estonian economy may shrink 1.2 percent this year, compared with a July estimate of 0.1 percent growth, the bank said in an e-mailed biweekly report today. Latvia's forecast for 2008 growth was changed to 0.5 percent from 2 percent. It will slow further to 0.4 percent in 2009."

Nordea Bank AB and Danske Bank A/S have also forecast contractions for Estonia and Latvia after gross domestic product shrank for two quarters from the previous three-month periods as soaring inflation slashed spending and real-estate prices fell. The two economies are faltering after they expanded at the fastest pace in the 27-nation EU in 2006.

"``The economy is losing steam as lenders tighten credit and the inflation rate damps consumer spending,'' the report said. ``The Latvian economy may further contract through the rest of the year as already signaled by falling industrial production and retail sales.''"

"Latvia's economy contracted a seasonally adjusted 0.2 percent in the second quarter from the previous three months, after shrinking a quarterly 0.3 percent in the first quarter, sending the country into a recession."

"The Estonian economy shrank 1.1 percent in the second quarter from a year earlier as accelerating inflation eroded consumption. The $16.4 billion economy contracted 0.8 percent from the previous quarter, entering a recession after shrinking a quarterly 0.9 percent in the first three months of the year."

"The growth forecast for the third Baltic country of Lithuania was kept unchanged at 4.7 percent, the Unicredit report said."

"Estonia's inflation rate will rise to 10.5 percent this year, before falling to 6.4 percent in 2009, the report said. Latvia's inflation rate will probably average 15.4 percent in 2008, while Lithuania's rate may jump to 11.3 percent in the same period."

To contact the reporter on this story: Milda Seputyte in Vilnius at mseputyte@bloomberg.net

"Last Updated: September 11, 2008 11:04 EDT"





Sponsored links



















ECB's Papademos Says Euro Region Likely to Avoid Recession

By Simone Meier

Enlarge Image/Details

Sept. 11 (Bloomberg) -- European Central Bank Vice President Lucas Papademos said the economy is likely to escape a recession and there are signs higher energy costs are driving up wages on a broad front.

"``There are indications that broad-based second-round effects are materializing,'' Papademos told reporters in Hamburg today. ``It's not considered likely'' that the euro-area economy will shrink in the third quarter ``but it can't be excluded, taking into account uncertainty and downside risks,'' he added."

The 15-nation economy contracted in the second quarter and is struggling to recover in the third. The ECB nevertheless raised interest rates to a seven-year high in July and said it will act to ensure that faster inflation doesn't become entrenched as workers seek compensation for higher food and energy costs.

"``It's essential that broad-based second-round effects are avoided,'' Papademos said today."

To contact the reporters on this story: Simone Meier in Frankfurt at smeier@bloomberg.net.

"Last Updated: September 11, 2008 07:38 EDT"





Sponsored links









Aluminum Drops on Slowing Demand Amid Oversupply; Copper Climbs

By Claudia Carpenter

Sept. 11 (Bloomberg) -- Aluminum fell in London as rising stockpiles indicated weakening demand because of a global oversupply of the metal. Copper erased an earlier decline.

"Inventories of aluminum in warehouses monitored by the London Metal Exchange jumped 14,250 metric tons, or 1.2 percent, to 1.18 million tons, the highest since April 2004, according to the exchange's daily warehouse report. Supplies will outpace demand through next year, according to Triland Metals Ltd., one of 12 companies that trade on the LME floor."

"``I find it very hard to come up with a big deficit next year,'' said Michael Widmer, an analyst at Lehman Brothers Holdings Ltd. in London. ``You would need to create a shortage of aluminum by closing down a lot of capacity and demand is relatively weak at the moment.''"

"Aluminum for delivery in three months dropped $24 to $2,602 a ton as of 1:52 p.m. local time on the LME. Copper jumped $72 to $6,912 a ton after earlier falling as much as $40."

"Producers of aluminum will cut the fee they charge buyers in Japan, Asia's biggest importer, by as much as 14 percent, the biggest drop in five years, as a slump in home and car sales slows demand. The premium will be $75 to $77 a ton on the LME cash price for the three months to Dec. 31, down from $87 in the current quarter, according to four executives involved in the talks. The drop is the first in a year."

Worst Month

"September has been the worst month for aluminum prices since 1987, with the biggest gains in December, Credit Suisse said in a report today. Prices may rebound to $3,000 by the end of the year, according to the report."

"Copper in London dropped 12 percent in the past two months, almost three times the decline in prices in Shanghai, leading to speculation of increased metal imports in China, the world's largest buyer of the metal."

"``The copper market is weaker than a year ago,'' Widmer said. ``You have got a little bit of a rebound in part because of expectations Chinese buyers will have to come back in the market.''"

"Freeport McMoRan Copper & Gold Inc., the world's second- largest copper producer, said supply globally may be constrained because of a lack of new discoveries and declining output at ageing mines."

"``We feel very optimistic about the markets,'' Chief Executive Officer Richard Adkerson said yesterday."

"Tin gained $475 to $18,800 a ton as inventories fell 20 tons to 5,645 tons, the lowest since Aug. 21."

"Lead rose $31 to $1,830 a ton, zinc fell $15 to $1,735 a ton and nickel gained $100 to $18,600 a ton."

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

"Last Updated: September 11, 2008 09:09 EDT"





Sponsored links



Natural Gas Rises as Storms May Slow Winter Stockpile Gains

By Reg Curren

"Sept. 11 (Bloomberg) -- Natural gas futures rose on speculation U.S. production shutdowns in the Gulf of Mexico caused by Hurricane Ike will disrupt energy company efforts to build up stockpiles for the winter, when demand peaks."

"Ike, moving toward Texas, forced companies to keep a majority of offshore production shut for a second week after Hurricane Gustav passed through the region earlier this month. About 14 percent of U.S. natural gas production comes from offshore wells in the Gulf."

"``There are traders looking ahead who know we need to have injections to build for our wintertime use,'' said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. ``Every day that goes by that we don't get some of those injections, they become apprehensive.''"

"Natural gas for October delivery rose 14.2 cents, or 1.9 percent, to $7.535 per million British thermal units at 9:28 a.m. on the New York Mercantile Exchange."

"Ike's projected path takes it ashore on the central Texas coast, the National Hurricane Center said. The storm, a Category 2 hurricane with winds of 100 miles (160 kilometers) per hour, is expected to bypass the main energy-producing areas closer to Louisiana."

"``This forecast will leave the heart of the energy production area across southern Louisiana and adjacent portions of the northern Gulf away from the damaging wrath of Ike,'' said Jim Rouiller, a senior energy meteorologist with Planalytics Inc., a forecaster based in Wayne, Pennsylvania, whose clients include oil and gas companies."

"About 73 percent of offshore gas production was shut as of noon yesterday, the U.S. Minerals Management Service said."

An Energy Department report today will probably show U.S. supplies advanced less than average last week because of Gustav.

"Stockpiles probably rose 55 billion cubic feet in the week ended Sept. 5, according to the median of 21 analyst estimates compiled by Bloomberg. Stockpiles in the same week over the past five years advanced an average 78 billion cubic feet, according to the Energy Department."

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net

"Last Updated: September 11, 2008 09:47 EDT"





Sponsored links










Steinbrueck Welcomes Banking Consolidation in Germany (Update1)

By Jann Bettinga and Oliver Suess

Sept. 11 (Bloomberg) -- German Finance Minister Peer Steinbrueck said there is no alternative to further mergers in the banking industry if it is to compete globally.

"``There's no way around consolidation in the German banking sector,'' Steinbrueck said in a speech to a banking conference in Frankfurt today. ``Quite simply, we need to do this to stay competitive and to be able to gain access to the benefits of international capital markets.''"

"Deutsche Bank AG, Germany's biggest bank by assets, is in advanced discussions with Deutsche Post AG over the potential acquisition of a stake in Deutsche Postbank AG to strengthen its consumer banking business, it said late yesterday. Steinbrueck declined to comment on such a possible combination, saying only it would be consistent with the German government's opinion that consolidation among German private banks should be continued."

"Separately, he reiterated the government's economic growth forecasts of 1.7 percent for this year and 1.2 percent in 2009."

"Germany's IfW institute, one of four groups that provide twice-yearly reports for the government, slashed its outlook for economic growth today, saying that weaker export demand, a stronger euro and inflation will combine to trigger a recession."

"The Kiel-based IfW cut its forecast for 2009 growth to just 0.2 percent. That compares with a June forecast of 1 percent, when the institute said the economy would weather the worst ravages of the U.S. subprime mortgage crisis."

To contact the reporters on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net; Oliver Suess in Munich at osuess@bloomberg.net.

"Last Updated: September 11, 2008 10:33 EDT"





Sponsored links























"U.S. Considers Bringing Fannie, Freddie on to Budget (Update1) "

By Dawn Kopecki

More Photos/Details

"Sept. 11 (Bloomberg) -- The Bush administration is considering whether to fold Fannie Mae and Freddie Mac's $5.2 trillion in debt into the federal budget, the White House budget office and the U.S. Treasury Department said."

"``We're discussing how to present this in the federal budget with Treasury and stakeholders right now, but a conclusion hasn't been determined,'' said Corinne Hirsch, a spokeswoman for the Office of Management and Budget. The Government Accounting Office and other federal agencies are also weighing in on the issue."

"The federal takeover of the government-sponsored enterprises, or GSEs, on Sept. 7 failed to address whether the debt of Fannie and Freddie should be included in the budget, or whether it carries an explicit government guarantee. In an interview this week, Treasury Secretary Henry Paulson cited the ``incongruities'' in the law and said ``we should be clear, is there a government guarantee or isn't there?''"

Any decision to add Fannie and Freddie to the budget wouldn't automatically translate into an explicit government backing for the companies' combined $1.7 trillion in unsecured debt and $3.5 trillion of mortgage guarantees. Granting the full faith and credit of the U.S. would require an act of Congress to change the companies' legal status.

"``You can't even be a senior debt investor at this point beyond the 15 month period because you really don't know if the federal government will back away from its commitment to support the debt,'' said Christopher Sullivan, who oversees $1.3 billion as chief investment officer at United Nations Federal Credit Union in New York."

Under Control

"The Treasury is talking to the budget office about how to treat Fannie and Freddie in the budget, said Jennifer Zuccarelli, a Treasury spokeswoman. She declined to discuss what options are being considered."

"``The reason Fannie Mae was originally turned into a GSE was to take it off the budget,'' said Peter Wallison, a fellow at the American Enterprise Institute, a conservative policy think tank in Washington. Wallison was general counsel for the Treasury during the Reagan Administration. ``The U.S. budget is a completely cash flow system, it's like a Mom and Pop candy store. They don't have any reserves or deferred expenses like private corporations do. It's completely cash in, cash out.''"

"The Treasury and Federal Housing Finance Agency put the beleaguered mortgage-finance companies back under federal control for the first time in about 40 years after their $14.9 billion in net losses threatened to further disrupt the housing market. The Treasury committed to invest as much as $200 billion in preferred stock and extend credit through 2009 to prevent a collapse of Fannie and Freddie, protecting investors owning more than $5 trillion of their debt and mortgage-backed securities."

Treasury Risk

"If the companies were given explicit backing, their debt costs would plunge to bring them closer to the U.S. Treasury debt, Wallison said."

Fannie's five-year debt trades at 65 basis points more than Treasuries and has averaged 40 basis points more for the past five years.

"Investors in the credit-default swap market for U.S. Treasuries are already concerned a guarantee is coming, demanding record high fees to offer investors protection against losses on Treasuries."

"Five-year credit-default swap contracts on U.S. government debt increased 3.5 basis points on Sept. 9 to a record 18, up from 6 basis points in April, according to CMA Datavision in London. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality."

Losses

"The U.S. budget deficit will grow next fiscal year to $438 billion from $407 billion, the Congressional Budget Office said Sept. 9, making it harder for President George W. Bush's successor to either cut taxes or increase spending."

"The CBO, a provider of independent assessments on U.S. economic and budgetary decisions to Congress, said the Treasury should incorporate Fannie and Freddie's assets and liabilities into the budget. The CBO, which doesn't set budget policy, will include the projections in its own data starting in January."

"``What the administration chooses to incorporate in its budget is up to them, but we hope they will agree,'' CBO Director Peter Orszag said in an interview yesterday."

"Though much of the companies' unsecured debt will likely be counted as new federal debt, their mortgage securities won't necessarily translate into the same amount of federal debt since loans and other assets back those liabilities, Orszag said."

"The degree of government control suggests the companies' expenses, including salaries and electricity bills, should be counted as federal spending and all fee revenue and other income from operations should be reflected as revenue, Orszag said."

"CBO will treat Fannie and Freddie's debt similar to that of government-owned electricity producer Tennessee Valley Authority, which Orszag said won't directly affect the federal debt ceiling."

"Any cash investments by the Treasury, such as buying mortgage securities or preferred stock, will directly add to the federal debt outstanding. U.S. officials said Treasury plans to buy $5 billion of the companies' mortgage bonds this month. Fannie and Freddie are also issuing $1 billion each this week in senior preferred shares to Treasury without any cost to the U.S. government."

To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net.

"Last Updated: September 11, 2008 09:43 EDT"





Sponsored links



Birinyi Says He's Been Actively Trading Financial Shares

By Eric Martin and Carol Massar

"Sept. 11 (Bloomberg) -- Laszlo Birinyi, the investor who correctly predicted financial stocks would tumble in October, said he has been actively trading bank and brokerage shares and isn't buying them for the long term."

"``We've been fairly active trading some of these stocks,'' Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, said in an interview on Bloomberg Television. ``At the same time, we have been on both sides of the trade. I continue to be in a trading mode and not really trying to pick up the long-term investment trends, because I don't think they exist right now. I'm not really excited about holding financial stocks here for the long term.''"

"Birinyi's October warning that financial shares would drop preceded a 38 percent plunge in the S&P 500 Financials Index, spurred by writedowns and credit losses stemming from the subprime-mortgage market's collapse that exceeded $510 billion worldwide."

Birinyi said June 26 that buying and holding U.S. stocks is ``very treacherous'' because share prices are swinging too much.

"Birinyi worked more than 10 years on the trading desk at Salomon Brothers Inc. before starting his research and money management firm in 1989. He is known for pioneering money flow analysis, which compares the dollar amounts moving into or out of a stock or index to establish whether it is being more aggressively bought or sold."

To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Carol Massar in New York at cmassar@bloomberg.net.

"Last Updated: September 11, 2008 08:17 EDT"





Sponsored links


















Northgate Tumbles as UBS Cuts 2009 Earnings Outlook on Growth

By Steve Rothwell

"Sept. 11 (Bloomberg) -- Northgate Plc, the biggest provider of leased vans in Spain and the U.K., tumbled after UBS AG slashed its 2009 earnings forecast, citing slowing economic growth in the two countries."

"Northgate fell as much as 40 pence, or 11 percent, to 315 pence, in London trading, the biggest intraday decline since July 2. The stock was down 8.7 percent at 12:41 p.m., paring the Darlington, England-based company's market value to 228 million pounds ($399 million)."

UBS analysts cut estimates for Northgate's 2009 earnings per share by 31 percent to 60.59 pence and predicted that the rate of sales growth will slow as customers hire vehicles for shorter periods and prices of used fleet vehicles slide.

"``We are adopting a more cautious scenario for Northgate,'' London-based Alex Hugh wrote in a note to clients. ``Not yet at recession levels, but we have removed all growth in the fleet.''"

"UBS is retaining a ``buy'' recommendation for the stock because declines no longer reflect the value of the business, Hugh said. Northgate has plunged 58 percent this year. Hugh has a 12-month target price of 500 pence."

"Northgate will likely lose money on sales of used fleet vehicles next year and in 2010 as van prices slump, according to Hugh. The company made a profit of 12 million pounds on the sales last year."

"As economic growth slows in both the U.K. and Spain, customers will return vans quicker, meaning that Northgate ``has to run harder to stand still.''"

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

"Last Updated: September 11, 2008 08:09 EDT"





Sponsored links













"Italy Stocks Update: IT Holding, DMT, Atlantia, UniCredit "

By Armorel Kenna

"Sept. 11 (Bloomberg) -- Italy's S&P/MIB Index fell for a third day, losing 257, or 0.9 percent, to 27,807. Futures expiring in September dropped 288, or 1 percent, to 27,840."

The following were among the most active stocks on the Italian market today. Share symbols are in parentheses.

Italian banking stocks fell as concern deepened that the global economic slowdown will hurt earnings.

"UniCredit SpA (UCG IM): Italy's biggest bank fell for the third day, declining 6 cents, or 1.6 percent, to 3.71 euros."

"Intesa Sanpaolo SpA (ISP IM), the country's second-biggest lender, fell 1.9 percent to 3.81 euros."

"Digital Multimedia Technologies SpA (DMT IM) and Atlantia SpA (ATL IM) may offer about 2 billion euros ($2.8 billion) to buy Telecom Italia SpA's (TIT IM) mobile transmission towers, newspaper MF reported, without saying where it got the information."

"Telecom Italia Chief Executive Officer Franco Bernabe may propose at a Sept. 25 board meeting to sell the phone company's 15,000 mobile broadcasting towers, MF said."

"DMT shares gained for a fourth day, adding 14 cents, or 0.6 percent, to 23.12 euros, while Atlantia shares rose 2.1 percent to 17.29 euros."

Telecom Italia fell 1.5 percent to 1.1 euros.

"Eutelia SpA (EUT IM), an Italian provider of voice, data and Internet services, dropped after auditors PriceWaterhouseCoopers said Eutelia's six-month accounts didn't comply with international rules."

"Eutelia share fell for the third day, almost 6 cents, or 8.9 percent to 57.5 euros."

"IT Holding SpA (ITH IM), owner of the Gianfranco Ferre SpA fashion house, advanced the most in 11 weeks in Milan trading after a newspaper reported that founder and Chairman Tonino Perna may bring in a new investor."

"Italian financial newspaper MF reported that China's Hembly International Holdings Ltd. is the most likely investor in PA Investments, which controls IT Holding."

"IT Holding rose the most in a month, advancing 2 cents, or 5.3 percent, to 46 cents."

Tiscali SpA (TIS IM) said investment company Management & Capitali SpA converted bonds into shares in the Italian Internet provider corresponding to a 6.9 percent stake.

"Tiscali in December sold Management & Capitali 60 million euros ($84 million) of bonds convertible into its own shares, to help fund the acquisition of Pipex Communications Plc's broadband and voice telephone units."

"Tiscali shares rose the most in three days, adding 4 cents, or 3 percent, to 1.49 euros."

To contact the reporter on this story: Armorel Kenna in Milan at akenna@bloomberg.net

"Last Updated: September 11, 2008 07:59 EDT"





Sponsored links



Volatility Surge Gives `Hope' to Commodities: Chart of the Day

By Millie Munshi

Sept. 11 (Bloomberg) -- The bear market in commodities may be nearing a bottom as the most volatile trading conditions since 1973 signal a possible reversal.

"The CHART OF THE DAY shows the weekly historical volatility for the Reuters/Jefferies CRB Index of 19 raw materials rose to 27 percent yesterday, on a 10-week basis. Surges in volatility are a ``very hopeful, contrary'' indicator against the current trend in prices, said Chip Hanlon, who helps manage $1.5 billion as president of Delta Global Advisors Inc."

"The only other time the volatility measure has risen above 25 percent was in August 1973, after the CRB jumped 24 percent in the previous six weeks. After volatility peaked at 32 on Sept. 7, 1973, the index began a four-week decline of 12 percent and headed for a three-month low in November of that year."

"``Extreme spikes in volatility have tended to coincide with lows or peaks,'' Hanlon, who correctly predicted in January that industrial metals would fall this year, said yesterday by telephone from Huntington Beach, California. ``Even the true believers in commodities have thrown the baby out with the bath water on this bleak economic outlook, and things moved too fast. This is an indication prices may start to turn around soon.''"

"This year has been the most volatile for commodities since 1973. Ospraie Management LLC, the New York-based investment firm run by Dwight Anderson, last week shut its biggest fund after losses in commodity companies. RK Capital Management LLP lost as much as 30 percent last month as metals dropped."

"``We've seen volatility ratchet up in metals, oil -- across the board,'' Ron Goodis, an Equidex Brokerage Group Inc. futures trading director in Closter, New Jersey, said in a telephone interview. ``It puts traders in a different mindset. In some ways, money can be made faster, but it doesn't mean it's easier.''"

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net

"Last Updated: September 11, 2008 08:45 EDT"





Sponsored links







South African July Manufacturing Growth Slows to 3.3% (Update1)

By Nasreen Seria

Sept. 11 (Bloomberg) -- South African manufacturing growth slowed to an annual 3.3 percent in July as higher interest rates damped consumer spending.

"Growth in factory output, which accounts for 16 percent of the economy, eased from a revised 5.7 percent in June, Pretoria- based Statistics South Africa said on its Web site. Output fell a seasonally adjusted 0.4 percent in the month."

"Sales of cars and furniture have tumbled after the central bank began increasing the benchmark interest rate to cap inflation, raising it six times to 12 percent since June 2007. The slowdown in manufacturing may undermine growth in Africa's biggest economy, which rebounded to an annualized 4.9 percent in the second quarter from 2.1 percent in the previous three months."

"``The overall outlook for gross domestic product growth is poor,'' said Colen Garrow, an economist at Brait SA in Johannesburg. ``This will support the call for interest rates to be cut.''"

"The rand was at 8.2921 against the dollar as of 1:56 p.m. in London, from 8.248 before the data was released."

"Manufacturing growth was expected to slow to 4.1 percent in July, according to the median estimate of six economists surveyed by Bloomberg."

Inflation Slowing

"The Reserve Bank left interest rates unchanged on Aug. 14 as consumer spending eased and it forecast inflation, which reached 13 percent in July, will slow ``significantly'' in the first quarter. The bank will probably begin lowering interest rates late in the first half of 2009, Garrow said."

"Vehicle sales plunged an annual 30 percent in August, the biggest decline in 14 years, an industry body said on Sept. 2. Retail sales fell for a fourth consecutive month in June, dropping an annual 2.6 percent, the statistics office said on Aug. 13."

"Output of food and beverages slumped to an annual 3.3 percent in July compared with 13.8 percent in June, the statistics office said. Textile and clothing production dropped an annual 5.2 percent in July, while vehicle output declined 5.1 percent."

"The Investec Purchasing Managers Index, an indicator of future manufacturing output, has been below 50, showing a contraction in output, for the past four months."

To contact the reporters on this story: Nasreen Seria in Johannesburg at nseria@bloomberg.net;

"Last Updated: September 11, 2008 08:28 EDT"





Sponsored links






Agrium's Wilson Says Agriculture Boom Has Him Raising Stake 13%

By Christopher Donville

"Sept. 11 (Bloomberg) -- Agrium Inc. Chief Executive Officer Mike Wilson says an increase in global demand for grains and agriculture products will continue, and he's increasing his stake in the company 13 percent to take advantage of it."

"The third-largest North American fertilizer maker has plunged 35 percent in Toronto trading since mid-June on concern a slowing U.S. economy and soaring prices for potash, nitrogen and phosphate would crush farmer demand for crop nutrients. Wilson said yesterday the decline is unwarranted and he bought 20,000 shares this week to raise his personal holding to 175,000 shares."

"``Even if there is a slowdown in the U.S. or other parts of the world, we believe year-over-year grain demand will increase and that grain prices and grain fundamentals will stay strong,'' Wilson, 57, said in an interview in Vancouver. ``We do not see, globally, grain demand falling off.''"

Wilson said he regrets that Agrium doesn't have a share buyback program in place and will discuss implementing one with company's board. The shares reached a record C$116.15 on June 18 and closed yesterday at C$74.99.

"``You've got to buy at these prices,'' he said."

"Fertilizer prices rose to records this year as the highest prices ever for corn, soybeans and wheat allowed farmers to spend more to increase crop yields. Grain prices advanced because of higher demand for food and increased production of ethanol and other renewable fuels."

Profits Triple

"The higher prices helped Agrium's second-quarter profit almost triple to a record $636 million. Net sales surged 90 percent to $3.87 billion, in part because of an acquisition."

"Corn futures on the Chicago Board of Trade have tumbled 33 percent from a record $7.9925 a bushel in June, dragging down Calgary-based Agrium and rivals including Potash Corp. of Saskatchewan Inc., the world's largest nutrient maker by market value, and Mosaic Co., the biggest phosphate producer."

"Potash Corp. has dropped 38 percent from its record, and Mosaic has lost half its market value since its all-time high."

"``We're not seeing any demand destruction'' from high fertilizer prices and lower corn futures, Wilson said. ``Forward corn is $6 a bushel, and at $6 the farmer is making almost double what his historic margins are.''"

Retail Expansion

"Agrium is also the largest retailer of seeds, herbicides and fertilizers to U.S. farmers. The company has more than 800 farm centers, or about 15 percent of the market, after eight acquisitions in the last four years."

"The company is still digesting this year's acquisition of agricultural vendor UAP Holding Corp., and Wilson said he intends to double Agrium's share of U.S. farm retailing within five years."

"``There's no reason to believe we can't get to 30 percent,'' he said, adding that growth may come from smaller acquisitions rather than large transactions."

"Agrium also is expanding its South American retail operations into Uruguay and is considering opportunities in Australia and China, he said."

"``Our priorities for cash are always a strong balance sheet and growth,'' he said. ``Two years ago, when we didn't have growth opportunities, we bought back shares. So you will see us, if we are not growing in an accretive, value-adding way, reach in and buy back shares.''"

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

"Last Updated: September 11, 2008 03:03 EDT"





Sponsored links



Lehman Shares Plummet After Analysts Cite Rating Risk (Update1)

By Josh Fineman and Joyce Moullakis

"Sept. 11 (Bloomberg) -- Lehman Brothers Holdings Inc., this year's worst-performer on the Standard & Poor's 500 Index, fell as much as 46 percent after four analysts said they cut their recommendations because the firm's credit rating may be lowered."

Lehman fell $3.25 to $4 in composite trading on the New York Stock Exchange. Shares of the New York-based firm dropped 89 percent this year before today.

The tumble follows Lehman's report yesterday that it had a record $3.9 billion loss for the third quarter. The firm plans to sell a majority stake in its asset-management unit and spin off real-estate holdings in an effort to shore up capital. Standard & Poor's and Moody's Investors Service said the moves may not be enough to avert a rating reduction.

"``A downgrade would likely force Lehman to post additional collateral, increase short-term and long-term funding costs, and limit its ability to transact with partners which demand certain credit ratings,'' Goldman Sachs Group Inc. analyst William Tanona wrote in a note today. The restructuring ``fell short of what was necessary to lessen the bear case on the stock.''"

"A reduction in Lehman's ratings of A2 at Moody's and A at S&P would make it more expensive for the firm to borrow money and reduce the number of potential counterparties on financial transactions. Lehman would be required to post $2.9 billion in collateral if its ratings were downgraded, the company said in a May regulatory filing."

`Rapid' Impairment

"``Although Moody's believes liquidity remains firm and has not shown signs of material erosion, the potential for rapid franchise impairment in this environment remains a significant rating concern,'' Moody's said in a statement yesterday."

Lehman was cut to ``hold'' from ``buy'' by Citigroup Inc. analyst Prashant Bhatia and the firm was reduced to ``no opinion'' from ``neutral'' by Merrill Lynch & Co. analyst Guy Moszkowski.

"``Liquidity and charges had seemed manageable, in our view, but the change in rating agency posture is an unexpected negative that may create a distressed sale situation,'' Deutsche Bank AG analyst Mike Mayo wrote in a note today. He cut his rating to ``hold'' from ``buy'' and reduced his price target to $11 from $28 a share."

"Goldman's six-month price estimate was cut by two-thirds to $7, because of ``significant uncertainty'' surrounding management's measures to sell assets and support the balance sheet."

Rating Concern

"The third-quarter loss creates a ``higher probability'' of a cut in Lehman's credit rating, Bhatia said in a note to clients."

"``Confidence and perception issues are overwhelming Lehman's franchise value,'' Bhatia said. ``We view raising capital in the very near-term as one of the most effective options to address the perception and confidence issues surrounding Lehman shares.''"

"The cost of default protection on bonds sold by Lehman soared to a record, credit-default swaps show."

"Contracts protecting $10 million of Lehman debt for one year cost 11 percent upfront and 5 percent a year, according to CMA prices at 8:50 a.m. in New York. That's up from 1,200 basis points at the close of trading yesterday. The price means it costs $1.1 million in advance and $500,000 a year to protect the bonds compared with $1.2 million a year yesterday."

To contact the reporters on this story: Joyce Moullakis in London at jmoullakis@bloomberg.net; Josh Fineman in New York at jfineman@bloomberg.net.

"Last Updated: September 11, 2008 10:07 EDT"





Sponsored links



Commerzbank Says May Sell Parts of Dresdner Kleinwort (Update1)

By Jann Bettinga and Andreas Scholz

"Sept. 11 (Bloomberg) -- Commerzbank AG, Germany's second- biggest lender by assets, may consider selling parts of the Dresdner Kleinwort investment bank following its 9.8 billion- euro ($13.7 billion) takeover of Dresdner Bank."

"``If those parts weren't strategically important and financially a sale made more sense than keeping the business, why would I not be open to a prudent debate?'' Chief Executive Officer Martin Blessing said today in an interview in Frankfurt, without elaborating."

"Commerzbank on Aug. 31 agreed to buy Dresdner Bank in the biggest financial-services takeover in Europe this year. The company has said it plans to cut about 1,300 jobs at Dresdner Kleinwort and its own investment bank following the takeover. Dresdner Kleinwort's name will also be replaced by the Commerzbank brand."

"Commerzbank aims to expand some investment banking offerings such as syndicated loans and covered bonds, while seeking to ``derisk and deleverage'' in areas including credit-derivative trading, credit trading and proprietary trading, Blessing said."

"Blessing took over in May from Klaus-Peter Mueller, who revived profit by scaling back investment banking, cutting jobs and focusing on consumer banking and lending to mid-sized German companies. The Frankfurt-based bank has reported four straight years of profit growth."

"Dresdner Bank acquired Kleinwort Benson in 1995 and five years later added Bruce Wasserstein's U.S. mergers advisory firm, Wasserstein, Perella & Co., to expand outside Europe. In April the following year, Dresdner was itself bought by Allianz, Germany's biggest insurer, for 23.5 billion euros."

"Wasserstein quit Dresdner in November 2001 to become CEO of Lazard Ltd., taking several senior bankers with him and leading to an exodus of employees."

"``We are under difficult conditions in the sector, and I think it will still be a difficult end to 2008 and maybe difficult start to 2009,'' Blessing said. He said he couldn't say when the financial-market crisis may come to an end."

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net

"Last Updated: September 11, 2008 09:13 EDT"





Sponsored links



















"Lehman, Lululemon, New York Times, WaMu: U.S. Equity Movers "

By Jeff Kearns

"Sept. 11 (Bloomberg) -- The following companies are having unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 9:55 a.m. in New York."

"CSX Corp. (CSX US) rose 6.6 percent, the most in two months, to $58.45. The third-largest U.S. railroad raised its 2008 profit forecast, citing a ``positive outlook'' for the industry."

"Lehman Brothers Holdings Inc. (LEH US) dropped 45 percent, the most ever, to $3.98. Analysts at Goldman Sachs Group Inc., Citigroup Inc., Merrill Lynch & Co. and Deutsche Bank AG cut their recommendations on the fourth-largest U.S. securities firm because its credit rating may be lowered."

"Lululemon Athletica Inc. (LULU US) rose the most since July 16, gaining 5.6 percent to $19. The Canadian athletic-wear retailer that quadrupled earnings last year said second-quarter profit rose as the company opened new stores and benefited from lower taxes."

"New York Times Co. (NYT US) climbed the most in six months, adding 7 percent to $14.94. Mexican billionaire Carlos Slim and his family acquired a 6.4 percent stake in the newspaper publisher, according to a regulatory filing."

"Washington Mutual Inc. (WM US) tumbled a third day, losing 18 percent to $1.90. The largest U.S. savings and loan slid on concern it may be forced to raise new capital to cover as much as $19 billion of losses."

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

"Last Updated: September 11, 2008 10:13 EDT"





Sponsored links
















Canada Trade Surplus Narrows as Imports Rise More Than Exports

By Greg Quinn

"Sept. 11 (Bloomberg) -- Canada's trade surplus narrowed more than economists expected in July, as imports of new cars and materials to build pipelines outstripped export gains."

"The surplus shrank to C$4.85 billion ($4.52 billion) from a revised C$5.64 billion in June, Statistics Canada said today in Ottawa. Imports rose 4.6 percent, the fourth straight gain, and exports increased 2.2 percent. Economists predicted the surplus would narrow to C$5.6 billion, the median of 17 estimates."

"The report indicates high commodity prices are helping Canadian companies and consumers buy goods from abroad at a faster rate than in the U.S. The trade surplus with the U.S. narrowed to C$8.88 billion from C$9.73 billion, as demand in that country continues to be hobbled by a persistent housing slump, job losses and high energy costs."

"Canada's import gain was led by a 9.5 percent jump in automotive products, mostly new cars, Statistics Canada said. Orders of parts for crude oil pipelines and underwater power cables lifted industrial goods imports by 6.1 percent, and shipments of excavating gear helped boost machinery and equipment imports by 2.9 percent."

"On the export side, industrial goods rose 5 percent in July, led by shipments of nickel and fertilizers. Machinery and equipment exports rose 6.6 percent."

"Separately today , Statistics Canada said new-home prices increased 2.7 percent from July 2007, slowing for a sixth straight month. From June, prices rose 0.1 percent, matching economists' expectations."

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net.

"Last Updated: September 11, 2008 08:30 EDT"





Sponsored links























"British Pound Rebounds Against Dollar, Advances Against Euro "

By Andrew MacAskill

Sept. 11 (Bloomberg) -- The British pound rebounded against the dollar and climbed versus the euro.

"The U.K. currency traded at $1.7568 by 12:49 p.m. in London, after falling to as low as $1.7447, from $1.7530 yesterday. It climbed to 79.36 pence per euro, rising for a sixth day, from 79.88. The run of gains is the longest since the six days ended Jan. 15, 2007."

"Government bonds rose, with the 10-year yield falling 3 basis points to 4.43 percent. The 5 percent security due March 2018 increased 0.20, or 2 pounds per 1,000-pound ($1,757) face amount, to 104.38."

"The yield on the two-year note, which is more sensitive to interest-rate expectations, slid 4 basis points 4.40 percent. Bond yields move inversely to prices."

To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net

"Last Updated: September 11, 2008 07:55 EDT"





Sponsored links



























European Bonds Advance on Speculation Credit Losses to Spread

By Lukanyo Mnyanda

"Sept. 11 (Bloomberg) -- European government notes rose, pushing the two-year note yield to the lowest level in a week, as stock declines and concern credit-market losses will spread boosted investor demand for the safest assets."

"The difference in yield between two- and 10-year German bonds widened to the most in two weeks as equity markets fell on bets a deepening economic slowdown will hurt earnings. More than 30 percent of European high-risk, high-yield bonds are trading at distressed levels, the most in five years, according to a Merrill Lynch & Co. index. Bonds rose yesterday as Lehman Brothers Holdings Inc. reported a $3.9 billion third-quarter loss."

"``The only story out there at the moment is what happens to the banking sector,'' said Padhraic Garvey, head of investment- grade strategy in Amsterdam at ING Bank NV. ``It's a nervous environment and it augurs for a bullish'' outlook for bonds."

"The yield on the two-year German note fell 6 basis points to 3.96 percent, the lowest level since Sept. 5, by 2:30 p.m. in London. The price of the 4.75 percent note due June 2010 climbed 0.09, or 90 euro cents per 1,000-euro ($1,394) face amount, to 101.28."

"The yield on the 10-year German bund, Europe's benchmark government security, fell 3 basis points, to 4.04 percent, after earlier rising to 4.09 percent. Yields move inversely to bond prices."

Investors are demanding extra yield over government debt of more than 10 percentage points to hold 53 of the 169 bonds in Merrill Lynch & Co.'s Euro High Yield Constrained Index.

"Europe's Dow Jones Stoxx 600 Index retreated 1.4 percent, extending this year's drop to 25 percent. The S&P 500 Index fell 1 percent."

Price Pressures

"Bonds declined earlier as a government report showed German wholesale prices rose more than 7 percent last month, giving policy makers more reason to keep borrowing costs on hold even as growth slows. The European Central Bank said in its monthly report today that inflation risks are still on the ``upside''. Council member Yves Mersch said past oil price increases ``could still trigger a wage-price spiral.''"

"``On the whole, the ECB will highlight that inflation risks are on the upside,'' said Charles Diebel, head of European rate strategy in London at Nomura International Plc."

"Inflation is running at 3.8 percent, almost twice the bank's 2 percent limit. The ECB raised its key rate to a seven-year high of 4.25 percent in July after inflation quickened to the fastest pace in 16 years."

"Still, investors are betting a deepening economic slump in the region will help push inflation toward the central bank's ceiling, enabling it to cut interest rates."

German Delay

"Germany, the biggest of the 15 economies using the euro, may delay selling a new 10-year index-linked bond in the fourth quarter because tumbling oil prices sapped demand for inflation protection, Federal Finance Agency head Carl Heinz Daube said yesterday."

"Inflation expectations in Germany, as measured by the yield gap between 10-year nominal bonds and similar-maturity index- linked debt, fell 59 basis points from a July record, to 211 basis points today."

"European bonds have outperformed Treasuries in the second half of the year on speculation the region is entering a recession. German bonds have handed investors a 3.9 percent return since the end of June, compared with 2.7 percent for U.S. debt, according to Merrill Lynch's German Federal Governments and U.S. Treasury Master indexes."

To contact the reporters on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net

"Last Updated: September 11, 2008 09:49 EDT"





Sponsored links



<<2.644_20080911161519Brazil Real Weakens Beyond 180 for First Time
Since January .txt>> <<2.641_20080911161207Dollar Rises to OneYear
High Against Euro on Global Outlook .txt>>
<<2.640_20080911190422Dollar Rises to OneYear High Against Euro on
Growth Outlook .txt>> <<2.640_20080911161555Gold Falls Below $750 as
Dollar Strengthens Silver Declines .txt>>
<<2.640_20080911161500Canadian Dollar Falls to Lowest Since August 2007
on Trade .txt>> <<2.639_20080911160214EmergingMarket Bonds Fall as
Concern Lehman May Collapse Mount .txt>> <<2.638_20080911162609US
Trade Deficit of $622 Billion Exceeds Forecast (Update2) .txt>>
<<2.638_20080911160427Indian Bonds Gain a Third Day on Speculation
Inflation to Slow .txt>> <<2.635_20080911160529European Stocks Fall
Led by Home Retail Morrison Banks Drop .txt>>
<<2.635_20080911160339Rupee Falls to 2year Low as Dollar Gains Spur
Importer Demand .txt>> <<2.634_20080911165713US StockIndex Futures
Decline as Lehman Tumbles a Fourth Day .txt>>
<<2.631_20080911161425Brazil's Split Vote Signals Pace of Increases to
Slow (Update1) .txt>> <<2.628_20080911161722Treasuries Rise on Concern
Lehman Lacks Capital Stocks Decline .txt>>
<<2.628_20080911161650Coffee Drops in NY as Dollar Gains Inflation
Concerns Wane .txt>> <<2.626_20080911165657US Initial Jobless Claims
Fall to 445000 Last Week (Update1) .txt>>
<<2.626_20080911162553India's Inflation Slows for a Third Consecutive
Week (Update1) .txt>> <<2.626_20080911161313Rig Market to Face `Major
Deficit' by 2012 ODSPetrodata Says .txt>>
<<2.625_20080911161633Platinum Extends Drop to 20Month Low on Outlook
for Car Sales .txt>> <<2.625_20080911161536Ruble Weakens to 13Month
Low Versus Dollar Amid Risk Aversion .txt>> <<2.624_20080911155357US
Stocks Decline as Lehman Tumbles for Fourth Straight Day .txt>>
<<2.622_20080911160054Crude Oil Falls as Stronger Dollar Dims
Commodities' Appeal .txt>> <<2.621_20080911162350Asian Stocks Decline
to Lowest Since November 2005 Banks Fall .txt>>
<<2.620_20080911165605Junk Bond Distress Levels Surge Signaling Defaults
(Update2) .txt>> <<2.619_20080911162528Chile's Bank Cuts Growth
Forecast Raises Inflation Outlook .txt>> <<2.619_20080911161839Cosan
Perdigao Telemar Norte Leste Brazilian Equity Movers .txt>>
<<2.619_20080911161136Light Shareholders EDF BNDESPar Cancel Stock Sale
(Update1) .txt>> <<2.618_20080911162512ECB's Papademos Says Europe
Likely to Avoid Recession (Update2) .txt>>
<<2.617_20080911165751Lehman Risk Jumps as Default Swap Traders Demand
Upfront Fees .txt>> <<2.617_20080911155721Barclays Cuts Fourth Quarter
Oil Forecast to $9750 (Update1) .txt>> <<2.615_20080911165807Lehman
Recommendation Cut at Citigroup Goldman Sachs (Update1) .txt>>
<<2.615_20080911161944UK Stocks Decline Home Retail AstraZeneca Lead the
Retreat .txt>> <<2.614_20080911162334French Stocks CNP EADS France
Telecom SanofiAventis .txt>> <<2.611_20080911160757UniCredit Sees
Baltic Growth Slowing Contracting (Update1) .txt>>
<<2.610_20080911165823ECB's Papademos Says Euro Region Likely to Avoid
Recession .txt>> <<2.610_20080911161706Aluminum Drops on Slowing
Demand Amid Oversupply Copper Climbs .txt>>
<<2.610_20080911161337Natural Gas Rises as Storms May Slow Winter
Stockpile Gains .txt>> <<2.609_20080911160545Steinbrueck Welcomes
Banking Consolidation in Germany (Update1) .txt>>
<<2.608_20080911162925US Considers Bringing Fannie Freddie on to Budget
(Update1) .txt>> <<2.608_20080911161911Birinyi Says He's Been Actively
Trading Financial Shares .txt>> <<2.608_20080911155542Northgate
Tumbles as UBS Cuts 2009 Earnings Outlook on Growth .txt>>
<<2.607_20080911160249Italy Stocks Update IT Holding DMT Atlantia
UniCredit .txt>> <<2.605_20080911165621Volatility Surge Gives `Hope'
to Commodities Chart of the Day .txt>> <<2.605_20080911161441South
African July Manufacturing Growth Slows to 33% (Update1) .txt>>
<<2.605_20080911161045Agrium's Wilson Says Agriculture Boom Has Him
Raising Stake 13% .txt>> <<2.604_20080911162753Lehman Shares Plummet
After Analysts Cite Rating Risk (Update1) .txt>>
<<2.603_20080911160621Commerzbank Says May Sell Parts of Dresdner
Kleinwort (Update1) .txt>> <<2.602_20080911161814Lehman Lululemon New
York Times WaMu US Equity Movers .txt>> <<2.659_20080911161025Canada
Trade Surplus Narrows as Imports Rise More Than Exports .txt>>
<<2.653_20080911160005British Pound Rebounds Against Dollar Advances
Against Euro .txt>> <<2.650_20080911161739European Bonds Advance on
Speculation Credit Losses to Spread .txt>>