Stock Market Update - Wednesday, September 1, 2010

Stock Market Update
Wednesday, September 1, 2010

Latest News Headlines:

US Stocks Gap Up

DJIA up +254.75 points to 10269.47
NASDAQ up +62.81 points to 2176.84
S&P 500 up +30.96 points to 1080.29
10-year T-note 100 27/32 at 2.5254 yield
NYMEX Crude up $1.21 at $73.15/bbl
Dollar/Euro up 0.0148 at 1.2832

Dow Jones 2:30 PM Averages: DJIA 10,244.80 UP 230.08

30 INDUS 10,244.80 UP 230.08 OR 2.30%
20 TRANSP 4,268.54 UP 145.91 OR 3.54%
15 UTILS 396.80 UP 7.83 OR 2.01%
65 STOCKS 3,572.95 UP 90.66 OR 2.60%

Investors sent the stock market sharply higher on Wednesday, as strong manufacturing data helped erase gloomy jobs data to kick off September on a bullish note.

U.S. manufacturing activity expanded in August for the 13th straight month, with the ISM manufacturing PMI defying expectations to rise to 56.3, from 55.5 in July. The encouraging numbers were fueled by strong employment and production data.

Commodity prices rallied, with October crude-oil futures gaining 2.5% to nearly $74 a barrel, ahead of official oil inventory numbers. Oil prices tumbled in August amid growth concerns and unusually high inventory levels. Copper futures surged more than 3%.


BofA Economists Lower Their GDP, Treasury Yield Forecasts
Bank of America Merrill Lynch economists lowered their forecasts for U.S. economic growth, saying gross domestic product will rise 2.6% in 2010, compared to a previous forecast for a 2.7% rate.

"The economy will manage to post positive headline GDP numbers, but this growth will not be fast enough to keep the unemployment rate from drifting higher," economists led by Ethan Harris wrote in a note Wednesday. "The growth recession is already here and it is likely to linger through the first half of next year." GDP will increase just 1.8% in 2011.

The unemployment rate will rise back above 10% next year, from 9.5% currently. The weaker growth will prompt the Federal Reserve to resume buying assets from the market to support the economy, starting in the first quarter of next year, the economists said.

A "major" program would entail buying $500 billion to $750 billion in Treasury bonds every six months, Harris said. Yields on 10-year Treasury notes will fall to as low as 1.75% in the first quarter, which would be the lowest since at least 1986. The benchmark 10-year note yields 2.58% currently.


US Stocks Open Higher Despite Weak Jobs Data

Investors dove back into the stock market Wednesday despite some gloomy jobs data, jumping into September on a bullish note following a brutal August.

The Dow Jones Industrial Average gained 126 points, or 1.3%, at 10140 in early trading, while the Standard & Poor's 500-stock index added 1.4% to 1064 and the Nasdaq Composite rose 1.6% to 2147.

The strong start to the morning follows a dismal month that saw the Dow drop 4.3%, its worst August in nearly a decade.

Disappointing U.S. private-sector employment data issued early Wednesday tempered the optimism about a global recovery. The ADP job survey indicates U.S. private-sector businesses laid off 10,000 workers in August, much worse than the weak gain of 17,000 expected by economists. The number may change forecasters' expectations for Friday's payrolls number from the U.S. Department of Labor.



HUD To Give Communities, Non-Profits First Shot At Bank-Owned Homes
The U.S. Housing and Urban Development department plans to partner with mortgage lenders to offer state and local governments and nonprofits a chance to buy bank-owned properties before they're offered to private investors.

"Local communities will now get an exclusive option to buy foreclosed properties in targeted neighborhoods so they can turn the homes into affordable housing or, in some cases, tear them down," HUD Secretary Shaun Donovan said Wednesday.

The effort, dubbed the National First Look Program, aims to lessen the competition between communities and non-profit organizations and private investors.

It will allow participants in HUD's Neighborhood Stabilization Program to receive immediate notification of properties as they become available. They would then have the opportunity to purchase properties at a discount. Certain buyers may have the option of making purchases using funds from the stabilization program.


Crude Oil & Petroleum Products:

Oil Rebounds
Gasoline stockpiles fell by 212,000 barrels to 225.4 million barrels, the department's Energy Information Administration said in its weekly report. That compares to the drop of 200,000 barrels based on a forecast in a Dow Jones Newswires survey of 15 analysts.

Distillate stocks, which include heating oil and diesel fuel, declined by 739,000 barrels to 175.2 million barrels. Analysts projected it to expand by 1.1 million barrels.

Refining capacity utilization fell by 0.7-percentage point to 87.0%, versus the expectation for a 0.1-percentage point decline.

API pegged refining utilization at 84.8% of capacity last week. The industry group reported that gasoline inventories fell 600,000 barrels and distillate stocks dropped by 1.9 million barrels.

U.S. Oil Inventories:
For week ended Aug. 27:
Crude Distillates Gasoline Refinery Use
EIA data: +3.4 -0.7 -0.2 -0.7
Forecast: +0.8 +1.1 -0.2 -0.1


Crude Stocks Expand As Products Edge Lower
U.S. crude inventories rose more than analysts' expectations last week, according to data released Wednesday by the U.S. Department of Energy.

Crude oil stockpiles rose by 3.4 million barrels to 361.7 million barrels for the week ended Aug. 27, compared with an average survey estimate of an 800,000-barrel increase.

Investors continued to support early gains, spurred by encouraging manufacturing data and a weaker U.S. dollar, after the EIA's report. Crude oil futures for October were recently up 2.9% at $74.00 a barrel on the New York Mercantile Exchange. October contracts for gasoline were recently up 2.2% at $1.8985 a gallon and heating oil was up 3% at $2.0526 a gallon.

Light, sweet crude for October delivery recently traded $1.83, or 2.5%, higher at $73.75 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.99 higher at $76.63 a barrel.

DOE: US Gasoline Stocks -0.212 Mln Bbl At 225.405 Mln Bbl
US Crude Oil Stocks +3.425 Mln Bbl At 361.707 Mln Bbl
US Distillate Stocks -0.739M Bbl In Wk; Seen +1.1M Bbl
US Refineries Ran At 87.0% Vs 87.7% Week Ago

Futures Close 1.39% Lower At $3.763/MMBtu
Natural gas in storage for the week ended Aug. 20 stood at 3.052 trillion cubic feet, 6.2% above the five-year average, according to the U.S. Energy Information Administration. Market participants are expecting another smaller-than-average build on Thursday, when the EIA releases fresh natural gas storage data.


U.S. Gold Prices:
Gold bullion was $1249.27 per troy ounce, up $.50 from previous.
It's selling price for gold in fabricated form was $1342.96, up $.53.
Handy & Harman's base price for gold was $1246.50 per troy ounce,
up $.50. The fabricated form price was $1346.22, up $.54.

Spot Gold: $1245
Spot Silver: $19.35

The IMF has been steadily selling a portion of its holdings in the market since early in the year, coordinating the effort with regularly scheduled sales by European central banks in order to avoid market disruptions.

The International Monetary Fund sold about 16.8 metric tons of gold in July, as its policy of gradually releasing gold onto the market continued.

The sales compared to about 17.7 metric tons in June and 15.2 the month before, according to the IMF's monthly report on gold holdings published Wednesday.



Stocks end a brutal August with meager gains
The stock market ended its worst August since 2001 with meager gains Tuesday after minutes from the latest Federal Reserve meeting showed officials' increasing concern about the economy. Stock indexes gave up most of their gains in mid-afternoon after the release of minutes of the Federal Open Market Committee.

More than 85% of Small Business Owners Are Worried About a Double-Dip Recession Ahead

More than 85% of small-business owners are worried about a double-dip recession, according to the latest quarterly survey by banking giant Citigroup Inc. (C). But three-quarters of those polled said they are very or somewhat prepared for another downturn.

Mentioned most often as a primary challenge to running their business was higher taxes by 48% of respondents. Declining demand for products and services was next at 43%, followed by tighter business regulations and the cost of health insurance, each by 40%.

Regarding hiring plans, 7% of surveyed small-business owners expect to reduce their work force, down from 8% in April, while the portion planning to hire was flat at 17%. Nine in 10 said they would need to see sales increase for at least two quarters in a row before they would hire new employees.

About 520 small-business owners were surveyed by phone in July and August. The businesses have revenue of more than $100,000 and no more than 100 employees.

Auto Makers Expected to Report 17% Decline Wednesday

Auto makers on Wednesday will reveal just how difficult it has been to close a late-summer sale without the lure of the "cash for clunkers" promotion that sparked a demand. As a group, the industry is expected to post a steep 17.7% unit decline from August 2009, according to car-buying research firm Edmunds.com.

General Motors Co., ahead of its much-anticipated IPO, is expected to report a 23.1% drop while Ford Motor Co. (F) is seen handing in a 10.5% retreat. Chrysler could be the only winner in the group, with its sales seen up an estimated 7.3%.

In addition to the skewed year-over-year numbers, August may even come in lower than the prior month, with TrueCar.com looking for a 3% drop from July. Low consumer confidence will be the primary headwind facing the automakers as they push toward recovery, according to TrueCar.com analyst Jesse Toprak.

"The pace of improvement in new vehicle sales has not been as robust as we predicted at the beginning of the year," he said. "The auto industry needs a catalyst for a sustainable higher level of sales, without which we will continue to struggle every month to reach 12 million SAAR [seasonally-adjusted annual rate of sales]."Toprak forecast a SAAR of 11.68 million.

Canadian Market:

The stock market was higher at midday Wednesday as strong manufacturing data from both the U.S. and China encouraged investors to jump back into riskier investments like equities. However, the flight from safer assets also hurt gold, limiting the market's gains.

At 11:45 a.m. EDT (1545 GMT), the S&P/TSX Composite Index was up 85.73 points, or 0.72%, at 11999.59. Gainers outpaced decliners 776 to 482. Trading volume was 207.5 million shares. The S&P/TSX 60 Index was up 5.64 points, or 0.8%, to 699.69 points.

The Canadian Finance Department reported an average yield of 3.489% at an auction of C$1.4 billion (US$1.3 billion) of 4.00% non-callable government bonds due June 1, 2041.

The high accepted yield was 3.496% for a price equivalent of 109.443 and the low accepted yield was 3.477% for a price equivalent of 109.823. The price equivalent for the average yield was 109.583.

Toronto Indexes, Volume; 3 pm EDT Composite Up 76.22
3 PM EDT Toronto Indexes

S&P/TSX Composite 11990.08 up 76.22 or 0.6%
S&P/TSX 60 Index 698.72 up 4.67 or 0.7%
Financials 171.40 up 2.33 or 1.4%
Materials 377.57 off 5.30 or 1.4%
Energy 276.72 up 4.44 or 1.6%
Industrials 101.93 up 1.92 or 1.9%
IT 26.95 up 0.08 or 0.3%



South American Markets:

Mexico:
Mexico's stocks opened higher Wednesday, starting out the month on a positive note as U.S. equities rose after a dismal August. The gains in stocks were accompanied by a rebound in the peso against the dollar after a volatile session Tuesday in which the local currency touched its weakest level of the year. The peso was quoted in Mexico City at MXN13.1360 to the dollar, compared with MXN13.2075 at the previous close.

BBVA Bancomer attributed the currency weakness to worse prospects for U.S. economic growth. The market's IPC index of leading issues was up 1.1% at 31,014 points around 9:55 a.m. EDT. Volume was a strong 22.5 million shares worth 801.5 million pesos ($61 million).



Brazil:

Brazilian Stocks Open Higher
Brazilian stocks opened higher Wednesday as global risk sentiment improved after better-than-expected data from China and Australia.

The benchmark Ibovespa stock index was 1.1% higher at 65,841 points in early trade on the Sao Paulo Stock Exchange. Brazilian stocks followed European and Asian markets higher on the rise of China's manufacturing purchasing managers' index to 51.7 from 51.2 in July, beating expectations of 51.5.


Chile:

Chile Stocks Rise 1% To New Intraday Record
Chile's blue-chip Ipsa index was recently up 1%, tracking surging U.S. markets which got a boost from strong manufacturing data.

The Ipsa was higher at 4570.93, while market volume totaled 42.0 billion Chilean pesos ($85.2 million) As several of the Ipsa's heavier-weighted shares also trade in New York, the Ipsa often tracks the Dow Jones Industrial Average. The DJIA recently surged 220 points, or 2.2%, at 10234 as the robust economic data helped erase gloomy jobs data to kick off September on a bullish note.


European Markets:

London Stocks End Sharply Higher
FTSE 100 5359.14 +133.92 +2.56%
FTSE 250 10040.34 +215.20 +2.19%
DJ UK Smaller Companies 826.64 +8.52 +1.04%



Asian Pacific Markets:

Australia:
Australia reported the fastest economic growth in three years. Second quarter gross domestic product expanded by 3.3%, much more than the 2.8% that had been expected.
In Sydney, the S&P/ASX 200 index rose 2.1% after gross domestic product rose a better-than-expected 1.2% in the second quarter from the first quarter.


Yen rises, heads to 4th straight monthly gain vs dollar
The yen rose and was on track for its fourth consecutive monthly advance against the dollar on Tuesday, its longest winning streak in 19 months, as investors shrugged off Japan's latest easing move.

Demand for the safe-haven currency rose in the past month as U.S. Treasury yields tumbled amid mounting signs the economic recovery in the United States was faltering. The rapid advance, which pushed the yen to a 15-year high this month, prompted Japanese authorities to announce measures on Monday to curb the yen's strength to protect the country's exports. Traders and analysts saw the central bank's moves as a symbolic gesture that will do little to halt the climb.


China:

Chinese Manufacturing Mounts Rebound
China's manufacturing economy staged a moderate rebound in August after slowing for several months under the onslaught of government measures to rein in credit and deter property speculation.

China's Ministry of Commerce isn't aware as yet of any anti-monopoly investigation into BHP Billiton Ltd.'s (BHP) $38.6 billion hostile bid for Canada's Potash Corp. of Saskatchewan (POT), a commerce ministry official said Wednesday.

Commodities
Crude Oil	73.68	+ 2.45%
Natural Gas	3.84	+ 0.60%
Gasoline	1.90	+ 2.51%
Heating Oil	2.05	+ 2.96%
Gold	1244.62	- 0.26%
Silver	19.33	- 0.26%
Copper	3.47	+ 3.18%
Quotes delayed 15 min.		» Add to your site

World Markets Snapshot:

Shanghai 2,622.88 -15.92 (-0.60%)
Nikkei 225 8,927.02 +102.96 (1.17%)
Hang Seng Index 20,623.83 +87.34 (0.43%)
TSEC 7,668.25 +51.97 (0.68%)
FTSE 100 5,299.01 +73.79 (1.41%)
CAC 40 3,554.00 +63.21 (1.81%)
S&P TSX 11,913.86 0.00 (0.00%)
S&P/ASX 200 4,495.70 +91.50 (2.08%)
BSE Sensex 18,205.87 +234.75 (1.31%)

Market Summary:

Stocks:

U.S. blue-chip stocks finished mixed as the Dow rose and the Nasdaq fell after minutes from the last meeting of the Federal Reserve added to jitters about the economic recovery. Minutes of the central bank's August meeting wiped out a slender rally, fueled by slightly better-than-expected housing, manufacturing and consumer confidence data. Key indexes are on track for a month of steep losses as investors lowered their expectations for economic growth in response to a flood of weak data in August.

Treasurys:

Fed likely to expand balance sheet by buying $500-$750bln in Treasuries over 6 mths.Treasury prices rose Tuesday, erasing last week's losses, as the market benefited from month-end demand and lingering worries about the strength of the economic recovery. While data Tuesday calmed investors somewhat investors were anticipating weak results from data later in the week, keeping interest in low-risk Treasurys alive. Market participants will closely watch national readings on U.S. manufacturing and the U.S. services sector Wednesday and Friday for further clues into how the recovery is faring.

Forex:

The dollar fell against the yen and dropped to its lowest level since January against the Swiss franc as investors continued to worry about the pace of the U.S. recovery. Minutes from the Federal Reserve's rate-setting committee offered no surprises to currency markets, which remained steady after the release. Investors will now turn to data like Friday's nonfarm payrolls report to determine whether to dip back into currencies tied to global growth, said Vassili Serebriakov, foreign-exchange strategist at Wells Fargo.

Wednesday's US Economic Calendar:

11:00 a.m.
August 27 MBA Mortgage Applications Survey Market Composite Index (previous 870.3), Cur Chg (previous +4.9%), Purchase Index (S.A.) (previous 170.5), Cur Chg (previous +0.6%), Refinance Index (previous 4944.7), Cur Chg (previous +5.7%)

11:30 a.m.
August Challenger Job-Cut Report (previous +42000)

12:15 p.m.
August ADP National Employment Report Private Payrolls Forecast (expected +17000)

1:00 p.m.
Chicago Fed Pres Evans speaks in Washington

2:00 p.m.
August ISM Manufacturing Report on Business Manufacturing PMI (expected 52.5), Prices Index (previous 57.5), Employment Index (previous 58.6), Inventories (previous 50.2), New Orders Index (previous 53.5), Production Index (previous 57)

2:00 p.m.
July Construction Spending - Construction Put in Place New Construction (expected -0.5%), Residential Construction (previous -0.4%)

2:30 p.m.
August 27 EIA Petroleum Status Report Crude Oil Stocks (previous 358.28M), (Net Change) (expected +1.3M), Gasoline Stocks (previous 225.62M), (Net Change) (expected +200K), Distillate Stocks (previous 175.97M), (Net Change) (expected +1M), Refinery Usage (expected 87.7%)

2:45 p.m.
Fed Gov Duke speaks on neighborhood stabilization in Washington

3:00 p.m.
August Global Mfg PMI

5:40 p.m.
Dallas Fed Pres Fisher speaks on "Perspectives on the Current Econ Climate' in Houston

Stock Market Update - Tuesday, August 31, 2010

Stock Market Update
Tuesday, August 31, 2010

Latest News Headlines:

DJIA up +4.99 points to 10,014.72
NASDAQ dn -5.94 points to 2,114.03
S&P 500 up +0.41 points to 1,049.33
10-year T-note 101 05/32 at 2.4900 yield
NYMEX Crude down $1.95 at $71.74/bbl
Dollar/Euro up 0.0036 at 1.2699

Historically, the week prior to Labor Day has been a loser for investors.

Fed Continues To Expect Recovery To Pick Up In 2011
Fed Chairman Ben Bernanke emphasized that the decision preserve the size of the balance sheet was done only to avoid any tightening of financial conditions. But he also provided the strongest signal yet that the central bank is ready to pursue additional easing if "unexpected developments" cause a significant worsening in the economic outlook.

Bernanke still expects economic growth to pick up again next year, in line with the views expressed by other Fed officials at the last FOMC meeting.

Despite evidence that the pace of economic recovery "remained sluggish" going into the third quarter, Fed staff and policy makers alike continued to predict the recovery would accelerate in 2011, according to the minutes.

Chicago Business Barometer Shows Economy Slowed

A closely-monitored index of U.S. business activity slipped during August, indicating that the economy is still growing--but at a slower-than-desired pace.

At the same time, some of the key components of the Chicago Business Barometer released Tuesday showed some potentially troubling signs for economic growth in the coming months, due in part to depleting inventories and lackluster production and new orders.

The Institute for Supply Management-Chicago said its business barometer fell to 56.7 in August, from 62.3 in July. The August reading was below economists' consensus forecast of 57.6 from a Dow Jones Newswires survey.

"The August report suggests the economy remains, barely, on the recovery side of the center line," ISM-Chicago said in a news release.

The headline index shows 11 straight months of economic expansion, as it remained above 50.0. Sub-50 readings indicate a contraction in the economy. Inventory builds evaporated in August, falling to 46.5, from 50.8 in July. The inventory index had reached the year's high of 56.4 in May. Production fell to its lowest level since September 2009. It dropped to 57.6 in August, down sharply from a 65.0 reading in July. New orders dropped sharply to 55.0 in August, from 64.6 in July.

The closely-watched employment index showed slower job market growth in August, slipping to 55.5, from 56.6 in July. The prices paid component, an indicator of inflation, posted its fourth consecutive monthly drop, which hasn't happened since 2006.

The prices paid index was at 57.2, down from 58.1 in July, 61.9 in June, 64.0 in May, and 71.4 in April. The Chicago business barometer is derived from a survey of regional purchasing managers representing a variety of sectors, including retail, manufacturing, and resources.

The purchasing managers conduct business in the U.S. and abroad, so their responses provide a snapshot of economic activity beyond the Chicago area. Similar to last month, the ISM-Chicago data came amid concerns that the economic recovery is faltering.

Federal Reserve Chairman Ben Bernanke said Friday that the central bank stands ready to enact unconventional means of stimulating the economy if conditions worsen. By unconventional methods, Bernanke was referring to another round of quantitative easing, in which the Fed would expand its balance sheet by purchasing U.S Treasurys or mortgage-backed securities.

Currently, the Fed is keeping its balance sheet stable by reinvesting proceeds from maturing debt to buy Treasurys. Many investors consider the business barometer as an indicator for the upcoming national manufacturing index, due for release Wednesday by the Institute for Supply Management.

Economists surveyed by Dow Jones Newswires project the August ISM reading will slip to 52.5, from 55.5 in July. The August ISM report is scheduled to be released Wednesday at 10 a.m. EDT. The business barometer is formerly known as the Chicago Purchasing Managers Index, or PMI. Kingsbury International compiles the data for ISM-Chicago.

Next month's report is scheduled to be released Sept. 30 at 9:45 a.m. EDT.


US Stocks Gain After Consumer Confidence; DJIA Up 45
U.S. stocks turned positive Tuesday after a reading of consumer confidence provided some encouragement to investors bracing for slower economic growth.

The Dow Jones Industrial Average rose 23 points, climbing back above the 10000 level in a morning of jumpy trading. Stocks erased earlier losses after a reading of consumer confidence came in better than expected.

The Nasdaq Composite gained 0.1% to 2123. The Standard & Poor's 500-share idnex rose 0.2% to 1051, after bouncing off key support at the 1040 level.

U.S. consumer confidence increased more than expected in August

The Conference Board, a private research group, said its index of consumer confidence rose to 53.5 this month from a revised 51.0 in July, first reported as 50.4. The August reading was better than the 51.0 expected by economists surveyed by Dow Jones Newswires.

The present situation index, a gauge of consumers' assessment of current economic conditions, fell to 24.9 from a revised 26.4 in July, first reported as 26.1. Consumer expectations for economic activity over the next six months rebounded to 72.5 in August, after plunging to a revised 67.5, originally reported as 66.6.

"Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future," says Lynn Franco, director of the Conference Board Consumer Research Center.

On the job front, only 3.8% of respondent thought jobs were "plentiful," down from 4.4% in July, while 45.7% viewed jobs as "hard to get" this month, up from 45.1% last month. But expectations about labor markets showed some improvement, which probably pulled up the overall expectations index. The percentage of consumers expecting more jobs in the months ahead rose to 14.6% from 14.2%, while the proportion expecting fewer jobs slipped to 19.4% from 20.9%.

Income worries, however, remain significant. The report showed 10.6% of consumers expect their incomes to increase in the next six months, while a larger 16.1% expected a pay cut. Fears about future hiring and paychecks could cause consumers to be reluctant to increase spending in the second half.

US Home Prices Rise
U.S. home prices are up for the third-straight month in June, pushing prices up 4.4% during the second quarter, according to the S&P Case-Shiller home-price indexes, thanks to boosts from a winding-down government tax credit for home buyers.

US Banks In Trouble
The Federal Deposit Insurance Corp. said Tuesday that 829 of the nation's roughly 7,800 banks were on its "problem list" at the end of June, up from 775 at the end of the first three months of the year. Already 118 banks have failed this year, well ahead of the pace set last year when 140 were seized by regulators.

The FDIC said nearly two-thirds of U.S. banks reported a year-over-year improvement in their quarterly results, though 20% of firms still reported a net loss.

The FDIC said 829, or more than one in ten banks, were on its "problem list" of banks at risk of failure at the end of June, up from 775 at the end of the first quarter. Already 118 banks and 18 credit unions have failed this year, well ahead of the pace set last year when 140 were seized by regulators.

DOW Opens At 9,989
The Dow opened below the critical benchmark of 10,000 despite a report that home prices were up sharply in June, and following weakness in global markets, as the major averages looked set to end the month with the first losing August since 2005. US Indices on Track for Worst August Since 2001.

Stock index futures were lower on Tuesday as investors awaited data on housing and consumer confidence. Japan's Yen near 15-yr high.


OIL FUTURES: Nymex Crude Falls As Supply Concerns Grow
Nymex Crude Closes Down $2.75 At $71.95/Bbl
Crude futures tumbled Tuesday, as investors turned their attention toward increasingly high U.S. oil supplies and the slowing economy.

Light, sweet crude for October delivery recently traded $2.10, or 2.8%, lower at $72.60 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded down $1.75, or 2.2%, at $74.85 a barrel.

Analysts are expecting Wednesday's report from the U.S. Energy Information Administration to show new additions to oil and fuel stockpiles already at their highest combined level in nearly 27 years.


Crude Oil & Petroleum Products:

Crude Oil	71.73	- 0.26%
Natural Gas	3.79	- 0.81%
Gasoline	1.87	- 1.09%
Heating Oil	1.97	- 1.07%

U.S. Gold Prices
$1248.77 per troy ounce, up $8.52
Silver 19.36 + 1.68%
Copper 3.34 - 1.38%



Canadian Market:

Canada 2Q GDP Expands 2%, Slowest Rate Since 3Q 2009
The Canadian economy in the second quarter expands at less than half the pace set in the first quarter, dropping to the slowest rate since the third quarter of 2009, on weaker spending in the retail and wholesale sectors and a downturn in housing.

The Canadian economy in the second quarter expanded at less than half the pace set in the first three months of the year, dropping to the slowest rate since the third quarter of 2009, on weaker spending in the retail and wholesale sectors and a downturn in the housing market.

Gross domestic product, the sum total of goods and services produced in the country, grew at a 0.5% quarterly rate or an annualized 2.0%, down from 5.8% in the first quarter, Statistics Canada said Tuesday. The first-quarter figure was revised down from the originally estimated 6.1%.

The market had expected second-quarter GDP to grow at an annualized rate of 2.5%, below the central bank's revised forecast of 3%, down from 3.8%, in last month's Monetary Policy Report.

On a monthly basis, GDP expanded 0.2%, in line with market expectations, with gains in manufacturing, retail trade, utilities and forestry offset by declines in mining and oil and gas extraction, along with lower activity by real estate agents and brokers.

In July, the Bank of Canada cut quarterly growth forecasts to the first quarter of 2011, citing a weaker and more uncertain outlook for the global economy. Third-quarter growth was also lowered, to 2.8% from 3.5%. The Bank expects GDP to grow 3.5% this year and 2.9% in 2011, down from earlier forecasts of 3.7% and 3.1%.

The Bank has raised interest rates twice since June, with a third rate decision set for early September. Canada's recession was the shortest and least severe among G7 countries. The economy emerged from recession in the third quarter of last year after shrinking for three consecutive quarters.

"The GDP will raise even more questions about whether the Bank of Canada will raise interest rates next week. We have already seen it support the short end of the bond market and take some further steam out of the Canadian dollar," said Douglas Porter, deputy chief economist at BMO Capital Markets in Toronto.

The U.S. dollar gained against the Canadian dollar following the release, ticking to an intraday high of C$1.0662 after the data, from C$1.0635 just before. It was at C$1.0589 late Monday, according to EBS via CQG.

Canada's two-year bond price moved modestly higher, to 101.574, from 101.503 just ahead of the data. The Overnight Indexed Swap, the most accurate gauge of market expectations, was estimating a 44% likelihood of a September rate increase, from 52% before the data.

The GDP figures show that Canada's economy is "on the right track," Finance Minister Jim Flaherty said in an e-mailed statement. He pointed to economic growth and employment gains as signs that the economic plan and tax cuts are working.

Consumer spending on goods and services grew 0.7% in the second quarter, down from 1% previously. Spending on furniture, furnishings, and household equipment and maintenance rose 0.1%, down from 1% in each of the previous three quarters. Spending on used motor vehicles fell 2.9%, while households spent less on electricity and natural gas, the second consecutive quarter of declines.

Business spending on plant and equipment rose 3.5%, the largest quarterly gain since 2005, led by a 6.7% increase in spending on machinery and office equipment.

Toronto Indexes, Volume; 11 AM EDT Composite Up 65.97

S&P/TSX Composite 11961.52 up 65.97 or 0.6%
S&P/TSX 60 Index 697.64 up 3.79 or 0.5%
Financials 169.84 up 0.65 or 0.4%
Materials 384.49 up 6.91 or 1.8%
Energy 273.40 off 0.40 or 0.1%
Industrials 100.32 up 0.37 or 0.4%
IT 27.07 off 0.04 or 0.1%



South America Markets:

Mexico

Mexican stocks opened higher Tuesday
Mexican stocks opened higher Tuesday, helped by a rise in U.S. equities, which pulled up from opening losses after positive consumer confidence data. The market's IPC index of leading issues was up 0.7% to 31,614 points around 10:35 a.m. EDT. Volume was 21.1 million shares worth 606 million pesos ($46 million).

Local stock trading was halted for about half an hour due to technical problems early in the session.



Brazil Stocks Open Higher On Positive Local Data

Brazilian stocks opened marginally higher Tuesday on renewed optimism after Brazil's statistics agency IBGE announced a recovery in industrial production levels. The benchmark Ibovespa stock index opened at 64,261 points, from Monday's close of 64,260 points. The index gained ground to 64,881 points within minutes of opening, after several days of negative performance.

The benchmark Ibovespa stock index opened at 64,261 points, from Monday's close of 64,260 points. The index gained ground to 64,881 points within minutes of opening, after several days of negative performance.


Colombia

Colombia's July Urban Jobless Rate 13.3% Vs 12.8% Year Ago
Colombia's urban unemployment rate rose to 13.3% in July from 12.8% in the same month a year earlier, the national statistics institute, known as DANE, said Tuesday. In a nationwide survey, which economist say produces a less exact indicator of the job market, unemployment stood at 12.6%, the same level as a year earlier.


Ecuador
Ecuador, Development Bank Of China Sign $1 Billion Loan
Ecuador's government signed a loan agreement for $1 billion with the China Development Bank Corp. Tuesday.

The loan will have two tranches, one for $800 million and another for $200 million. It will have a fixed interest rate of 6% per year, for a four year term, and an additional six month grace period. The loan will be used to finance Ecuador's investment program for infrastructure and other budgetary outlays for the 2010-11 period. It will also be used to finance oil projects of national interest, said Ecuador's Finance Minister, Patricio Rivera, in a press release.

Rivera said the first tranche of $800 million will be for Ecuador's discretionary use--for projects including infrastructure, mining and telecommunications--while the other $200 million will be used for oil sector projects. The minister said that with this loan Ecuador had ensured its budget financing for 2010. Rivera added that the loan will not be repaid in oil, and that no oil-related guarantees had been given.


European Markets:
Europe stocks extend August slide on economic fears before recovering.

European Stocks Turn Higher After US Data
European stocks erased significant losses to finish higher Tuesday after data showing a rise in U.S. consumer confidence allayed near-term concerns over the pace of the economic recovery. The Stoxx Europe 600 index finished up 0.1% at 251.31 points, rebounding from an intraday low of 247.82. The index has dropped 1.6% this month.

UK Summary: Stocks End Up On Positive US Data

FTSE 100 5225.22 +23.66 +0.45%
FTSE 250 9825.14 +45.24 +0.46%
DJ UK Smaller Companies 818.12 +9.12 +1.13%

London stocks end in positive territory after staging a comeback late in the session. A positive performance on Wall Street after several positive pieces of US economic data help.

The FTSE's miners stage the biggest U-turn as a result of improved sentiment, and the sector finishes in the black. But Ben Critchley at IG Index pours some cold water on the reversal. Says, "while there's a sense that equities have a serious dose of pessimism priced in at these levels, it will take a jolt of unambiguously strong data to help markets make significant gains from these levels." On Wednesday, UK PMI manufacturing is at 0830 GMT. Economists at Commerzbank cautioned investors not to read too much into the increase, pointing out that consumer confidence has more or less trended sideways since May 2009, when the index was at 55.

Anglo Irish Bank Gets More State Aid As Losses Rise
Anglo Irish Bank Corp. Chief Executive Officer Mike Aynsley Tuesday put a EUR25 billion estimate on the government's bill to bail out the bank, as it reported a massive first-half loss and said it will seek to wind down at least 80% of its business over 10 years.

UK Broad Money Supply Remains Subdued In July
The Bank of England's preferred measure of broad money supply was flat in July, marking a slowdown from the previous month and underscoring the challenges facing the U.K. economic recovery.

BA Suspends More Staff; New Strike Ballot Possible
Tensions between British Airways PLC (BAY.LN) and cabin crew could escalate after trade union Unite Tuesday disclosed that up to 80 staff have been suspended or sacked as a result of the dispute over working practices.

UK July Consumer Lending Slows
U.K. net consumer lending rose at a slower rate in July as mortgage lending remained lackluster, underscoring the view that the housing market will remain subdued for some time.

UK Consumers More Upbeat On Economy In Aug
U.K. consumers became significantly more optimistic about the outlook for the economy during August, driving the first pick up in confidence since February.

UK Homes Bought During Peak Face 4 Yrs Of Negative Equity
U.K. homes bought during the recent market peak in 2007 face four more year of negative equity, where the value of assets are worth less than what they're paid for, and more families would likely be forced to rent homes or settle with cheaper ones as banks remain cautious on mortgage lending, the U.K.'s National Housing Federation said Tuesday.

France
The French CAC 40 index gained 0.1% to 3,490.79

French Economy To Grow 1.5% In 2010
French Prime Minister Francois Fillon Tuesday said gross domestic product is expected to rise 1.5% in 2010, above the official forecast of 1.4%. "With 1.5% of growth in 2010 we will be leading the pack in the European union," Fillon said in an address to the majority UMP party in the Yvelines, west of Paris. He reiterated the government's target of 2% growth for 2011, which was recently cut from 2.5%.


Germany
Germany's DAX 30 climbed 0.2% to 5,925.22
German unemployment figures which fell by 17,000 in August.


Russia

Russia Won't Intervene To Curb Soaring Food Prices
The Russian government won't intervene to curb prices for basic food stuffs as inflation soars after the country's worst ever drought, Economic Development Minister Elvira Nabiullina said Tuesday. Forty-five Russian regions saw prices for certain foods grow by more than 30% in the 30-day period up to Aug. 23, Vedomosti business daily reported Tuesday, citing a report by the economic development ministry.

World market snapshot:

Shanghai	2,638.80	-13.87 (-0.52%)
Nikkei 225	8,824.06	-325.20 (-3.55%)
Hang Seng Index	20,536.49	-200.73 (-0.97%)
TSEC	7,616.28	-124.92 (-1.61%)
FTSE 100	5,172.23	-29.33 (-0.56%)
CAC 40	3,454.26	-32.75 (-0.94%)
S&P TSX	11,932.17	+36.62 (0.31%)
S&P/ASX 200	4,404.20	-48.50 (-1.09%)
BSE Sensex	17,971.12	-60.99 (-0.34%)

Commodities
Crude Oil	73.60	- 1.47%
Natural Gas	3.78	- 0.84%
Gasoline	1.91	- 1.28%
Heating Oil	2.01	- 0.81%
Gold	1248.39	+ 0.95%
Silver	19.37	+ 1.73%
Copper	3.38	- 0.88%
Quotes delayed 15 min.		» Add to your site

Market Summary:

Stocks:

U.S. stocks fell, adding to the market's decline for the month as weak personal income and manufacturing data highlighted a slowdown in the economic recovery and overshadowed deal activity. "Sentiment seems pretty negative on stocks," said Kevin Kruszenski, director of equity trading at KeyBanc Capital Markets.

Treasurys:

Treasury prices pushed up as market participants, on edge about the shaky global economic recovery, sought refuge in the low-risk U.S. government bond market. The latest catalyst fueling fears about the health of the global economy was a move by the Bank of Japan to further ease monetary policy. Meantime, the week's first pieces of U.S. data reinforced the idea that the U.S. economic recovery remains very fragile.

Forex:

The dollar declined against the yen Monday after measures from the Bank of Japan lacked sufficient punch to halt the yen's advance. The greenback also retreated against the Swiss franc but gained against other widely traded currencies as investors abandoned last week's move into riskier assets and shifted into traditional safe harbors. The dollar surrendered gains made in anticipation of the emergency BOJ meeting.

Tuesday's US Economic Calendar

7:45 a.m.
Aug 28 ICSC-Goldman Sachs Chain Store Sales Index - WoW (previous -0.4%), YoY (previous +2.3%)

8:30 a.m.
Aug ISM-NY Report on Business US ISM-NY Business Index (previous 58.4)

8:55 a.m.
Aug 28 Johnson Redbook Retail Sales Index MoM % Change (previous +1%), 12MonChgPct (previous +2.7%), 52WkChgPct (previous +2.6%)

9:00 a.m.
Jun S&P / Case-Shiller Home Price Index SP Composite-10 MoM (previous +1.2%), SP Composite-10 YoY (previous +5.4%), SP Composite-20 MoM (previous +1.3%), SP Composite-20 (expected +3.9%)

9:45 a.m.
Aug Dow Jones Economic Sentiment Indicator (previous 42.3)

9:45 a.m.
Aug ISM-Chicago Business Survey - Chicago PMI Employment Index (previous 56.6), New Orders Index (previous 64.6), Prices Paid Index (previous 58.1), Purchasing Managers Index (Adjusted) (expected 58), Supplier Deliveries Index (previous 59.4)

10:00 a.m.
Aug Consumer Confidence Index (expected 51), Expectation Index (previous 66.6), Present Situation Index (previous 26.1)

2:00 p.m.
Federal Open Market Committee meeting minutes

4:30 p.m.
Aug 27 API Statistical Bulletin Crude Stocks (Net Change) (previous -1.85M), Gasoline Stocks (Net Change) (previous +0.69M), Distillate Stocks (Net Change) (previous +1.89M), Refinery Runs (previous 85%)

5:00 p.m.
Aug 29 ABC News Consumer Confidence Index (previous -44)

Stock Market Update - Monday, August 30, 2010

Stock Market Update
Monday, August 30, 2010

Latest News Headlines:

US Consumer Spending in US Rises More Than Forecast, Incomes Lag Stocks Slide Lower

U.S. stocks fell Monday following sluggish personal income data while investors mulled over the latest efforts of central banks and whether they will be enough to prevent a double dip.

DJIA down -140.92 points to 10009.72
NASDAQ down -33.67 points to 2119.96
S&P 500 down - 15.67 points to 1048.92
10-year T-note 100 21/32 at 2.5468 yield
Dollar/Euro down 0.0089 at 1.2674
OIL FUTURES: Nymex Crude Settles Down -47c At $74.50/Bbl
US GAS: Futures Settle 2.9% Higher At $3.812/MMBtu

Stock Trading Activity 4:00 p.m. ET
..................Advancing.............Declining
NYSE........57,552,004..........753,464,352
AMEX..........3,494,373..............6,510,913
NASDAQ....256,822,058....1,322,628,952

The drop came in thin trading. NYSE Composite volume on Monday totaled about three billion shares, making it the lowest-volume day this year. The Dow Jones Industrial Average declined 140 points, or 0.98%, to 10009, in early trading. The Nasdaq Composite slipped to 2119, and the Standard & Poor's 500 index declined to 1048.

U.S. stocks fell Monday after data showed personal income remains sluggish while business activity in the Dallas area remains weak, adding to investors' worries over the health of the economy. Investors have grown increasingly worried over weak economic data despite strong corporate earnings and an uptick in deal activity.The future also looked cloudy.

The jobs expectations index that looks out six months slipped to 1.0 from 2.0.

The expectations index covering the outlook for each respondent's company six months ahead dropped to 9.3 from 15.8, and the expectations about general business activity worsened to -4.3 from 5.0 in July.

Manufacturing surveys from other Fed regional banks have been mixed. Reports from the Richmond and New York Feds have shown area factories still expanding in August, while the Philadelphia Fed index showed an unexpected contraction this month.

Disposable incomes dropped for the first time since January after adjusting for inflation. U.S. consumers accelerated their spending in July but income growth was sluggish, a sign the economic recovery will remain fragile.

Consumer spending rose 0.4% last month after staying flat in June, the Commerce Department said in a report Monday. Americans' incomes increased less than expected, up 0.2% after remaining unchanged in June.

The government data indicated the economy is growing but that high U.S. joblessness is slowing its recuperation. "The labor market recovery will continue to be a very grudging one. Consumers will enjoy only modest gains in wages and salaries for some time, and consumer spending growth will therefore be moderate at best," MFR Inc. analyst Joshua Shapiro said.

Economists surveyed by Dow Jones Newswires expected the data to show income climbed 0.3% in July and spending rose 0.4%.

Consumer spending is a big part of the economy. As spending accelerated, the national savings rate fell a bit last month, to 5.9% from 6.2% in June, but remained elevated compared to rates before the recession. Many Americans have been putting money away because of unemployment and weak household balance sheets.

The economy's softness kept a lid on prices in July, Monday's data showed. The core price index for personal consumption expenditures, which excludes food and energy prices because of their volatility, rose 0.1% in July from June.

Year over year, the gauge increased 1.4%. That index is closely watched by the U.S. Federal Reserve. Low price pressures will support record-low central bank interest rates that are intended to reduce joblessness and spur the economy.

The overall PCE price index, which includes food and energy prices, rose 0.2% last month compared to June and increased 1.5% on a year-over-year basis. A senior Federal Reserve policymaker said Monday it may be impossible to test new measures to limit systemic risk in the banking system before the next financial crisis.

St. Louis Fed President James Bullard said the credibility of too-big-to-fail elements in the sweeping financial reform bill rested on them being tested in practice.

Bullard said it is unclear, but he doesn't believe such a challenge may happen before another crisis arrives to test efforts to prevent problems at large financial institutions spreading through the broader economy. He also said uncertainty surrounding the rule-making associated with the reform bill was affecting economic decisions.

The dollar rose against the euro and the U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, edged up 0.1%. Treasurys advanced, pushing the yield on the 10-year note down to 2.59%. Crude-oil futures slipped while gold futures rose.

Treasury prices pushed up Monday as market participants, on edge about the shaky global economic recovery, sought refuge in the low-risk U.S. government bond market. Bond markets staged a comeback Monday as the first round of economic data indicated a still-fragile economy.

The week started with fears about the health of the global economy as the Bank of Japan moved to further ease monetary policy.


Bernanke Faces Skepticism on Policy

In the US Bernanke faces skepticism on policy tools, may need fiscal aid economic reports could push Fed to take further action. The American economy is once again tilting toward danger.

Despite an aggressive regimen of treatments from the conventional to the exotic — more than $800 billion in federal spending, and trillions of dollars worth of credit from the Federal Reserve — fears of a second recession are growing, along with worries that the country may face several more years of lean prospects.

The US is $15 Trillion dollars in debt. The US has 45 Trillion in unfunded liability, and the US consumer is $42 trillion dollars in debt.

The chief problem is that the Fed's traditional remedy for a slowdown - reducing short-term interest rates - is unavailable because rates have been close to zero for 20 months.

This leaves the Fed only unconventional policy tools, which bring with them more debate about their relative value because they've never been tried.

The Fed has already purchased $1.4 trillion of mortgage securities and $300 billion of Treasury securities in an effort to lower market interest rates. Earlier this month, in response to a slew of weak economic data, the policy-making Federal Open Market Committee took a symbolic decision to buy more Treasurys using funds received from principal repayments of its mortgage
securities to hold the size of its balance sheet constant.

In essence, analysts said the FOMC flipped to an easing bias from its prior stance that leaned toward slow tightening. Federal Reserve Board Chairman Ben Bernanke spelled out in great detail Friday the easing options under consideration. These include buying more assets, most
likely Treasurys, to lower market interest rates; promising to keep ultra-low rates for longer than expected; or cutting the interest paid to banks for their excess reserves to push them to lend.

But will any of these steps be necessary? How much would the economy have to weaken or inflation to decline before the Fed decides to act? The U.S. economy is looking sick and the doctors are bickering about what, if anything, to do. That is the bottom-line conclusion from conversations at the Federal Reserve's annual policy retreat in Jackson Hole.


Canadian Market:

Canada 2Q Current Account Gap Widens To C$11.02Billion

Canada's current account deficit widened in the second quarter by C$2.6 billion to C$11.02 billion (US$10.47 billion), the seventh consecutive quarterly deficit, as slowing exports of goods were outweighed by continued growth in imports, Statistics Canada said Monday.

The shortfall in the previous quarter was revised down to C$8.46 billion from the originally estimated C$7.82 billion. The market had expected the second-quarter gap to grow to C$10.7 billion.

Foreign direct investment into Canada slowed to C$9.66 billion from C$13.44 billion, while Canadian direct investment abroad swung to a C$9.44 billion deficit from a surplus of C$C$2.7 billion in the previous quarter. Canadians invested C$4.7 billion in foreign equities between April and June, driven by stronger demand from Canadian pension plans for U.S. market securities.

Exports of energy products and industrial goods both declined following gains in the previous three quarters. Exports of energy products fell C$1.9 billion on lower prices for all components except coal.

Canada C$3.0B Of 16-Day T-Bills Yield Average 0.606%
The Canadian government reported an average yield of 0.606% at an auction of C$3.0 billion (US$2.9 billion) of 16-day treasury bills.

The issue will be dated and issued Aug. 31 and will mature Sept. 16. The high accepted yield bid at the sale was 0.630% and the low accepted bid was 0.580%. The allotment ratio at the high accepted yield was 3.38462%.

The Bank of Canada didn't purchase any of the new bills. The equivalent prices of the yields were as follows: -average, 99.97344; -low, 99.97458; -high, 99.97239.


Toronto Stocks Higher: Composite Index Up 0.4%
Share prices are higher in early trading Monday. Toronto's composite index is up 49 points, or 0.4%, to 11928, with advances ahead of decline by 4 to 3. Volume of 25.4 million shares after the first 15 minutes of the session is below Friday's early volume of 32.6 million shares.


South America Markets:

Mexico:
Mexico's Stocks Open Lower With US, Peso Weakens Against Dollar

Mexico's Stocks Extend Losses On US Data; Peso Weakens. Mexican stocks opened lower Monday, tracking negative moves in the U.S. where investors remain concerned about the strength of the economic recovery.

The stock market's IPC index of leading issues was down 1.1% at 31414 points recently. Volume was 74.3 million shares valued at 1.92 billion pesos ($146 million).

The market's IPC index of leading issues was down 0.1% around 10:25 a.m. EDT. Volume was 12.4 million shares worth 320.9 million pesos ($25.4 million). Mexican market bellwether America Movil's L shares were off 0.9% to MXN30.53, cement maker Cemex's CPO shares were down 0.9% to MXN10.31, and retailer Wal-Mart de Mexico's V shares were off 1.4% to MXN28.60.

The drop in stocks was pressuring the peso, which was quoted in Mexico City at MXN13.0835, compared with MXN13.0325 at the close Friday. BBVA Bancomer said risks for the peso remain amid the possibility of negative economic data, although it considers there has been some overbuying of dollars.

The chief executive of Mexico's state oil firm, Petroleos Mexicanos, Juan Jose Suarez Coppel, said Monday the company has increased its crude production target for this year to 2.6 million barrels per day from 2.5 million barrels previously.

Suarez Coppel said Pemex, as the company is commonly known, is currently averaging 2.585 million barrels per day and that new wells coming online for the rest of the year make the new production goal feasible.


Brazil:

Brazil Stocks Open Lower As Caution Kicks Off Busy Week
Brazilian blue-chip shares opened lower Monday as investors turned cautious ahead of a plethora of economic data releases that should give a better view of the global economy's struggling recovery.

The Ibovespa opened 0.5% lower at 65,272 points on the Sao Paulo Stock Exchange, or Bovespa, down from Friday's close at 65,585 points.

The Brazilian real opened weaker against the U.S. dollar Monday as global market caution offset local expectations for improving inflows.

The real opened at BRL1.7540 to the dollar on the BM&FBovespa exchange, weaker from Friday's close at BRL1.7519.

Peru:

Chili:

Chile Industrial Output Gains 3.3% In July From Year Ago

Chile's industrial output rose 3.3% in July from the same month a year ago as the country continues to recover from the global financial crisis and February's devastating earthquake, the government statistics agency said Monday.

The gain was in line with expectations as analysts were expecting a year-on-year increase of around 3% for the month.

The 8.8-magnitude earthquake, and the tsunami it spawned, hit Feb. 27, destroying roads and bridges, cutting off power and communications, and halting industries throughout central-southern Chile. Total damage was estimated around $30 billion. On a seasonally adjusted basis, July industrial output grew 1.1% from the previous month.

The Chilean peso ended mildly weaker Monday on concerns about the pace of the global recovery, which hurt U.S. stocks and pulled the euro lower versus the dollar.
CLP500.40 to the dollar, versus Friday's close of CLP499.60. Chile's currency traded in a range of CLP497.60 to CLP501.20.

Europe is one of Chile's main trading partners, the peso often moves in the same direction as the euro against the dollar. The euro slipped against the dollar as investors shifted into traditional safe harbors. Resistance for the peso is now seen at CLP497-CLP498, while support is located at CLP502.

yields on inflation-indexed Chilean central bank bonds, or BCUs, ended mixed as expectations for short-term inflation remain low. The shorter five-year bonds move on near-term inflation expectations, while the longer 10-year bonds keep an eye on forecasts for interest rates in the long term. The yield on five-year BCU bonds remained unchanged at 2.38%, while the yield on 10-year BCUs ended at 2.60%, down from 2.64% the previous session.


European Markets:
European shares edged higher by midday on Monday to extend gains to a third straight session, helped by better-than-expected euro zone economic sentiment data and on more merger and acquisition news. Trading was subdued because of a holiday in Britain. Volumes on the FTSEurofirst 300 index .FTEU3 of top European shares were 37 percent of its 90-day daily average. The market remained vulnerable to declines in the coming weeks on concerns economic data from the United States, the world's largest economy, will continue to be grim.

At 1141 GMT, the index was up 0.1 percent at 1,027.36 points after touching 1,031.17, the highest since Aug. 24, earlier.

Euro zone economic sentiment increased slightly more than expected in August while inflation expectations were muted, auguring well for continued economic recovery in the third quarter. [ID:nBRLUJE64R]

Asian Pacific Markets:

Nikkei pares gains after BOJ decision disappoints, but no major impact from the policy measure seen ahead. BOJ eases policy to fight yen rise.Japan's Nikkei average pared gains on Monday after rising more than 3 percent at one point, with investors disappointed by a Bank of Japan's decision that contained no surprises and was seen as lacklustre at best.

At an emergency meeting, the BOJ expanded its fund supply tool, saving more aggressive steps for when there is clearer evidence of a slowdown in a fragile economy hit by a strong yen. The Nikkei 225 is up 1.95% percent, at 9,165.73 12:26AM EDT, August 30, 2010.

The Bank of Japan extended its emergency-lending program in an effort to stem the rise of the yen and support the sluggish economic recovery. However, without any substantial nod to the possibility of direct market intervention against the yen, the measures wasn't enough to curtail renewed strength in the currency against the dollar.

Hong Kong stocks rose, halting six days of declines by the benchmark index, as the Federal Reserve pledged top safeguard the U.S. economic recovery, and companies including China Resources Land Ltd. reported higher earnings.

HSBC Holdings Plc, which got 20 percent of its fiscal 2009 revenue from North America, gained 1.6 percent. China Resources Land Ltd., a state-controlled developer, jumped 3.1 percent. China Shenhua Energy Co. climbed 1.2 percent after the nation’s largest coal producer reported better-than-estimated earnings. Aluminum Corp. of China Ltd., the country’s No. 1 producer of the metal, advanced 2.1 percent after metal prices increased.

The Hang Seng Index climbed 0.6 percent to 20,711.79 as of 12:04 p.m. local time, halting a six-day, 2.3 percent decline. Concern economic growth may slow in the U.S., Europe and China has dragged down the gauge by 5 percent from a four-month high on Aug. 9. Shares on the measure trade at an average of 13.4 times estimated earnings.

“For the stock market as a whole, in the third quarter, especially in September, there may still be a round of adjustment because, after interim results’ impact, the market has come down to economic fundamentals,” Ronald Wan, managing director of China Merchants Securities, said in a Bloomberg Television interview.

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies advanced 1 percent to 11,511.

China Mobile Ltd., the world’s biggest phone carrier by subscribers, dropped 1.1 percent to HK$80.70. Vodafone Group Plc is preparing to sell its stake in China Mobile to raise more than 4 billion pounds ($6.2 billion), the Sunday Times reported, citing investors it didn’t name. Bobby Leach, a spokesman for Vodafone, declined to comment.

World markets:

Shanghai	2,652.66	+41.92 (1.61%)
Nikkei 225	9,149.26	+158.20 (1.76%)
Hang Seng Index	20,737.22	+139.87 (0.68%)
TSEC	7,741.20	+18.29 (0.24%)
FTSE 100	5,201.56	+45.72 (0.89%)
DJ EURO STOXX 50	2,620.24	+13.35 (0.51%)
CAC 40	3,490.26	-17.18 (-0.49%)
S&P TSX	11,879.72	0.00 (0.00%)
S&P/ASX 200	4,452.70	+82.60 (1.89%)
BSE Sensex	18,032.11	+33.70 (0.19%)

Market Summary:

Stocks:

Markets will revolve around Friday's unemployment report, Wednesday's auto-sales report and statements from a meeting of the world's central bankers in Wyoming. The jobless rate for August, which will be released next Friday, is likely to rise to 9.6% from 9.5% a month earlier, according to economists surveyed by Briefing.com. The country lost 131,000 and 221,000 jobs in July and June, respectively. August U.S. new-vehicle sales, out Wednesday, are expected to decline.

Central bankers and academic experts are meeting in Jackson Hole, Wyo., through Saturday to discuss what can be done to help a global economic recovery that's quickly losing steam.

U.S. stocks moved up Friday on light volume as investors searching for confidence were reassured by Federal Reserve Chairman Ben Bernanke's vow to do whatever it takes to revive the shaky economy.

The U.S. economy grew a sluggish 1.6% in the second quarter and corporate profits nearly dried up, though the downward revision released by the Commerce Department Friday wasn't as bad as many had feared. The 1.6% GDP growth stands in stark contrast to the government's stated initial growth estimate from just a month ago.

Contributions to the GDP

• Nonresidential fixed investment increased 17.6 percent
• Personal consumption expenditures increased 2.0 percent
• Real residential fixed investment increased 27.2 percent
• Equipment and software increased 24.9 percent
• Real private inventories added 0.63 percentage point to the second-quarter change in real GDP

The monthly GDP data have actually shown declines for two months running and there is a negative “build in” so far for Q3. There is practically no growth in real consumer spending heading into the current quarter. An upturn in state, local and federal government spending contributed a temporary boost to the GDP number. Analysts, and economists are now in the process of cutting their GDP forecasts for the fourth quarter.

US Consumer Sentiment Drops To 68.9. The Reuters/University of Michigan consumer sentiment index's final reading for August ticked down to 68.9 from a preliminary reading of 69.6.

With the U.S. economic recovery losing steam, the chances of a second phase of a slowdown are increasing, according to a leading economist. Speaking in The Wall Street Journal's The Big Interview show, Robert Shiller, professor of economics at Yale University, said he thought the second dip down of a so-called double-dip recession "may be imminent."

Europe's sovereign debt crisis lingers, according to European Central Bank Governing Council member and Bundesbank President Axel Weber. "Fiscal consolidation is a long-term project...it's going to be with us for a long time" he said in a interview at a central bankers' convention in Jackson Hole, U.S.

Treasurys:

Treasurys tumbled as Federal Reserve Chairman Ben Bernanke reiterated his firm commitment to support a slowing economy, cutting demand for safe assets. Selling also emerged as Bernanke stopped short of announcing larger-scale purchases of Treasurys. "We have seen real money sellers all week as rates moved to unsustainable levels," said Tom Tucci, head of U.S. government bond trading at RBC Capital Markets.

Treasury investors searching for clues about whether policymakers may redouble their efforts to help the economy will zero in on next week's jobs report, a possible turning point for the bond market and a potential catalyst for much lower yields.

Renewed large-scale bond buying by the Fed could drive down the yield on 10-year Treasurys, for the first time ever, to 2% or even a bit lower. The 10-year yield, currently 2.620%, hit a record low of 2.037% in December 2008.

David Rosenberg, chief economist and market strategist for Gluskin Sheff & Associates Inc. and former chief North American economist for Merrill Lynch, said this week that the 10-year yield will fall below 2% over the next 12 months as U.S. growth loses traction.

Forex:

The dollar gained against the yen and Swiss franc but slipped against some higher-yielding currencies after Fed's Bernanke pledged to provide more stimulus to the U.S. economy if needed. In prepared comments at an annual meeting of top central bankers held in Jackson Hole, Wyo., Bernanke stopped short of saying it will act. The US Dollar Index DXY continues to encounter resistance around 83.5. It closed down Friday at 82.95 and further declined after hours to $82.72.

Petroleum and Oil:

Crude oil moved up Friday from its recent lows to close at $75.12 a barrel.

Gold and Silver:

Spot Gold is advancing towards $1260. Friday's close was $1238 per ounce. Any breakout above $1260 would offer a near term target of the $1360 range. Silver is now trading over $19 an ounce, and closed Friday at $19.11 an ounce.

Commodities
Crude Oil	74.66	- 0.68%
Natural Gas	3.73	+ 0.78%
Gasoline	1.94	-
Heating Oil	2.03	- 0.51%
Gold	1235.84	- 0.19%
Silver	19.11	+ 0.10%
Copper	3.41	+ 1.25%
Quotes delayed 15 min.		» Add to your site

Monday's US Economic Calendar:

8:30 a.m.
July Personal Income & Outlays Personal Income (previous 0%), Personal Spending (previous 0%), PCE Price Index Monthly (previous -0.1%), Yearly (previous +1.4%), PCE Core Price Index Monthly (previous 0%), PCE Core Price Index Yearly (previous +1.4%)

10:30 a.m.
August Texas Manufacturing Outlook Survey Business Activity Index (previous -21), Manufacturing Production Index (previous 4.9)

N/A
St. Louis Fed Pres Bullard speaks in St. Louis