Stock Market Update - Tuesday, September 21, 2010 Cautious Outlook FOMC Catalyst

Stock Market Update
Tuesday, September 21, 2010

Latest US News Headlines:

US Stocks Show Mixed Rise After Fed Statement, Gold Rises, Dollar Slides
The dollar fell broadly against its peers after the Federal Reserve on Tuesday hinted concern at the slowing pace of the US. What the Federal Reserve can do to boost the economy is very limited.

Dow Jones	10,761.41	+7.79	(0.07%)
S&P 500	1,139.82	-2.89	(-0.25%)
Nasdaq	2,349.35	-6.48	(-0.28%)

Gold $1,290, Silver $21.04

Forex Currencies:

EUR/USD	1.3247	+0.0187 (1.43%)
USD/JPY	85.1000	-0.6600 (-0.77%)
GBP/USD	1.5622	+0.0079 (0.51%)
CAD/USD	0.9762	+0.0041 (0.42%)
USD/HKD	7.7611	-0.0032 (-0.04%)
USD/CNY	6.7059	-0.0076 (-0.11%)
AUD/USD	0.9541	+0.0066 (0.70%)

Fed Defers Action, Hints At New Steps To Support Growth
The Federal Reserve hinted it's becoming uneasy about the outlook for the U.S. economy in 2011, but deferred taking any new steps to boost the recovery amidst intense internal debate about what to do next.

Pace Of Economic Recovery Seen Modest In Near Term
Bank Lending Contracting, Though At Lower Rate
Household Spending Up, Constrained By High Unemployment

Fed officials signaled at the end of their one-day policy meeting they're uncomfortable with the recent very low levels of inflation and said they expect the economy's recovery from a deep recession to be modest in the near term. This indicateS that more bond purchases to stimulate growth could soon take place.

"Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the long run, with its mandate to promote maximum and employment and price stabilty," Fed officials said.

To combat the recession that started Dec. 2007 and ended June 2009, the Fed first slashed short-term interest rates close to zero. When that wasn't enough, the U.S. central bank bought $1.7 trillion in mainly mortgage-backed securities, a move that helped to keep mortgage and other long-term borrowing rates low.

Economic reports since the August meeting have pointed to a growth pace that remains sluggish. Inflation net of volatile food and energy prices last month was below 1.0%, which is well below the Fed's informal target.

Unemployment is expected to remain close to 9.0% at the end of next year, according to the latest Wall Street Journal survey of economists conducted Sept. 3-7. Three in five economists predicted the Fed would resume buying bonds to stimulate growth.

The fading boost from the fiscal stimulus and growing business uncertainty about taxes and regulation are expected to keep the economy growing below trend in 2011.

The Fed's latest June forecasts see the economy growing by more than 3.5% in 2011. That compares with private-sector economists predictions, made earlier this month, that the economy will grow by 2.8% next year. The Fed will update its projections at the next Nov. 2-3 meeting.

Fed Chairman Ben Bernanke said Aug. 27 that the central bank will do what it takes to support an economic recovery that lost momentum before the summer. Bernanke indicated he would favor additional purchases of U.S. Treasurys to kick-start the economy. Bernanke said he's still weighing different views on what might prompt new Fed action.

Some Fed officials--like San Francisco Fed President Janet Yellen, who is awaiting Senate confirmation to become Bernanke's No. 2--would likely favor more bond purchases since unemployment is well above the Fed's long-run target of between 5% and 6%. But another camp, headed by Kansas City Fed President Thomas Hoenig, doubts that new asset purchases would do much to lift the economy and fears it might cause inflation further down the road because more money would flow into the economy.

Fed officials also reaffirmed they expect short-term interest rates to remain close at a record low close to zero for an extended period due to low inflation and high unemployment.

Hoening was once again the only dissenter out of the nine voters at the Federal Open Market Committee meeting. He voted against the central bank's decision for the sixth time this year, arguing that the economy xxxx is recovering modestly and that the pledge to keep rates near zero for an extended period limits policy flexibility.


US Stocks Lower

The FOMC meeting will be the catalyst for the markets direction.
U.S. stocks meandered between small gains and losses in a tight trading range Tuesday as investors waited for the Federal Reserve's latest economic outlook.

The Federal Open Market Committee is due to announce its interest-rate setting decision at 2:15 p.m. EDT Tuesday. Rates are expected to be left unchanged, though investors are watching for signs that the central bank may begin additional quantitative easing measures to help economic growth continue.

The major benchmarks are near-term overbought following the steep September spike, and due to consolidate. Looking ahead, significant support holds at the breakout point S&P 1,131, and is followed by its 200-day moving average, currently 1,116.

The Dow Jones Industrial Average was recently down 18 points, or 0.2%, to 10735, but the spread between the blue-chip index's high and low in Tuesday's session is only 26 points. Alcoa led the index's decliners, falling 1.5% and Cisco Systems dropped 1.1%. Caterpillar rose 1.7% and Bank of America increased 1.1%

U.S. stocks opened slightly lower Tuesday despite optimistic housing data as investors remained cautious ahead of policy guidance from the Federal Reserve.

The Dow Jones Industrial Average fell 11 points in early trading to 10744. 3M dropped 0.8%, Microsoft fell 0.6% and Travelers declined 0.6%. The blue-chip index has risen in 12 of the previous 14 sessions and is up 7.3% this month, on track for its best September performance since 1939. The Nasdaq Composite fell 0.3% to 2353. The Standard & Poor's 500-share index edged 0.1% lower to 1142.

10:00 AM Averages: DJIA 10,744.19 DN 9.43

30 INDUS 10,744.19 DN 9.43 OR 0.09%
20 TRANSP 4,498.22 UP 23.10 OR 0.52%
15 UTILS 395.38 DN 1.64 OR 0.41%
65 STOCKS 3,717.12 UP 1.17 OR 0.03%


New US Home Construction Rises
New home construction rose August, a government report showed Tuesday. Despite the monthly gain, permits were down 6.7% from the same time last year.

Housing starts, or the number of new homes being built, jumped 10.5% to a seasonally adjusted annual rate of 598,000 in August from a revised 541,000 in July, the Commerce Department said. Economists were expecting a rate of 550,000 housing starts, according to a consensus estimate.

New construction was up 2.2% from a year ago.

Permits for future construction rose to a seasonally adjusted annual rate of 569,000 last month, up 1.8% from July and the highest level in two months. Economists were expecting 560,000 permits in August.


U.S. Treasury Prices Unchanged
U.S. Treasury prices were little changed Tuesday as the market awaited the Federal Reserve meeting later in the day for market and economic direction.

The Fed is widely expected to keep monetary policy unchanged at this time, eyes were on whether the central bank will provide any hints that more monetary policy easing is on the way. In August the Fed began reinvesting the proceeds of its mortgage-backed securities holdings through new Treasury purchases.

Today's focus will be on the wording of the Fed's policy statement and suggestions it is making a transition from targeting already low interest rates to targeting its own balance sheet.

The 10-year note was flat in price to yield 2.703 percent, the five-year was also unchanged in price, yielding 1.417 percent.

US Homebuilders' Confidence At 18-Month Low

Monday, homebuilders' saw confidence levels unchanged from September, traffic of potential buyers has dropped even further.

Homebuilders' confidence in the housing market stayed this month at the lowest level in 18 months, and more worry that the traffic of potential buyers is falling.

The National Association of Home Builders said Monday that its monthly index of builders' sentiment was unchanged in September at 13. The index has now been at the lowest level since March 2009 for two straight months.

Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.

The index is broken into three separate readings. Foot traffic from prospective buyers, an indication of future sales, fell slightly. The index measuring expectations for the next six months was unchanged. Current sales conditions were also unchanged.

Builders have had to cope with the worst foreclosure market since the 1930s.

Sales of new and previously occupied homes fell this summer to the lowest level in more than a decade, despite the lowest mortgage rates in decades.

According to foreclosure listing service RealtyTrac Inc., lenders took back more homes in August than in any month since the start of the mortgage crisis. That's held down prices in much of the country. That is bad news for builders, who must compete against existing homes that can sell for less than what it costs to build a new home.

High unemployment, and tight credit have kept people from buying homes. Government tax credits gave the industry a boost this spring, but since they have expired the industry has struggled.

On Monday, homebuilder Lennar Corp. said it returned to profitability in its fiscal third quarter. The Miami-based builder said new orders for homes fell 15 percent from the same quarter a year ago, as buyers were no longer able to claim the tax credit.


CRUDE OIL:
Crude futures are falling Tuesday.
Light, sweet crude for October delivery recently traded $1.70, or 2.3%, lower at $73.16 a barrel on the New York Mercantile Exchange. The contract expires Tuesday, however, and volume has shifted to the November contract, which was recently down 91 cents, or 1.2%, to $75.28 a barrel.

Brent crude on the ICE futures exchange traded 50 cents lower at $78.82 a barrel.

Oil futures have been closely correlated with equity markets. On Monday, oil prices rose more than 1.6%, helped by a 145 point, or 1.4%, jump in the Dow Jones Industrial Average, which closed at 10753.

The oil inventory report from the Department of Energy due at 10:30 a.m. EDT Wednesday is expected to show a 1.5-million-barrel drop in crude stockpiles. Gasoline inventories are expected to remain flat with last week's report, while stocks of distillate, which include heating oil and diesel, are expected to rise by 100,000 barrels.

The American Petroleum Institute, an industry group, is expected to release similar data 4:30 p.m. EDT Tuesday.



Canadian Market:

Canada Dollar Surges Vs US Dollar After Fed Statement

The Canadian dollar surged higher against its U.S. counterpart Tuesday afternoon, marking sharp gains after the Federal Reserve hinted concern at the slowing pace of the U.S. economy, and deferred taking action to start growth.

The U.S. dollar was at C$1.0260 at 3:25 p.m. EDT (1925 GMT), from C$1.0319 at 8:00 a.m. EDT (1200 GMT) and C$1.0285 late Monday.


Canada Fin Min: Global Economy Fragile, "Serious Risks" Ahead

Canadian Finance Minister Jim Flaherty said growth around the world has slowed and warned of "serious risks" ahead. He believes the government must "stay the course" and fully implement stimulus and return to balanced budgets.

In a speech to the Canadian Club of Ottawa Tuesday, Flaherty accused the opposition of putting self-interest first and trying to force an unnecessary election, which he said would jeopardize economic recovery.

"The global economy remains fragile," Flaherty said, pointing to the U.S. unemployment rate and the struggle to control finances in some European countries. "Around the world, the growth we saw earlier this year has slowed," he said. "And beyond the economic risks, there is, I regret to say, a political risk." "That is the risk of an unnecessary election, an election that would jeopardize our economic recovery, just as we enter the home stretch," he added.

Flaherty said that although Canada outperformed during the recession, there are still too many people looking for work. He said the government's main focus will continue to be the economy. He said Canada is "punching" "far above our weight" in the world and "the heavyweights are coming to us for lessons."

He accused the opposition of ignoring the government's "huge" accomplishments and talking down the economy for political gain at every opportunity. He repeatedly referred to the three opposition parties as a "coalition" that he said wants bigger government, endless red tape and higher taxes.

Toronto Indexes, Volume; 1 PM EDT Composite Down 91.55

S&P/TSX Composite 12142.96 off 91.55 or 0.7%
S&P/TSX 60 Index 704.93 off 5.36 or 0.8%
Financials 176.91 off 0.72 or 0.4%
Materials 380.12 off 7.87 or 2.0%
Energy 275.27 off 2.66 or 1.0%
Industrials 103.58 off 0.21 or 0.2%
IT 27.46 up 0.23 or 0.8%

Volume Tuesday Monday
12-1 51.3M 45.0M
9:30-1 253.3M 331.3M





South American Markets:

MEXICO:

Mexico's Stock Market Opens Lower
Mexico's July Retail Sales Down 0.01% From June. Mexican Finance Minister Ernesto Cordero said Tuesday around 43,300 jobs created in the formal economy in the first half of September brought to 677,000 the number of new jobs this year, with which the country has recovered those lost to the 2008-2009 recession.


BRAZIL:
Brazil's Central Bank Holds Auction To Buy US Dollars

Brazil Stocks Open Lower
Brazil's stocks dipped Tuesday morning as investors eyed the forthcoming share issuance--set to be the world's largest--by government-run oil company Petroleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, and inflation data came in slightly higher than expected.

Petrobras is set to price the offer Thursday, as it looks to raise some BRL134 billion, or $78 billion, to help fund investments needed in huge oil discoveries made off the coast of Brazil. Petrobras preferred shares traded in Sao Paulo were down 0.1% at BRL27.05, while the broad Ibovespa stocks index was down 0.3% at BRL68,004.

Brazil Inflation Rises
Inflation data came in slightly higher than expected, as food and clothing prices in Latin America's largest economy surged. Brazil's mid-month consumer price index, or IPCA-15, rose 0.31% through mid-September, compared with a decline of 0.05% in the period through mid-August.

CHILE:

Chile Stocks Firm Into Record Territory On Local Growth Outlook
Chile's Ipsa select stock index surged into record territory in early Tuesday trading amid expectations of strong domestic growth in coming months.

The Ipsa was recently gaining 0.5% to 4837.64, surpassing a record close at 4831.22 last Wednesday. Volume was a thin 11.84 billion Chilean pesos ($23.8 million).
Electricity sector shares were among the biggest gainers early in the session, as many of these have room for growth, Gonzalez noted.

Among these, power producer Endesa (EOC, ENDESA.SN) was gaining 1% to CLP905.60, while its parent company Enersis (ENI, ENERSIS.SN) was up 0.9% to CLP239.00.


ARGENTINA:

Argentina Govt Orders Free Bank Accounts

Argentina's banks will soon have to offer free savings accounts and reduce the fees they charge for electronic transactions as part of a government initiative to reduce the use of cash amid public outrage over a spate of robberies outside banks and ATMs.

"What we are doing with these measures is allowing each and every Argentine to pay his taxes, fees and normal expenses through a bank for free," Economy Minister Amado Boudou was quoted as saying by government news agency Telam on Monday night.

Distrust in the banking system is still widespread after Argentines saw access to their savings severely curtailed by government decree during the devastating 2001-02 economic and financial crisis. As a result, many consumers still keep considerable sums of money at home and queue up in long lines to get cash from the country's roughly 12,300 ATMs and 4,050 bank branches, making them tempting targets for criminals.

The measures published Monday night by the Central Bank of Argentina follow several weeks of agitation by opposition lawmakers who have attacked President Cristina Fernandez's public safety policies following several high-profile robberies of bank patrons.

Next month, financial institutions will have to make available a free, peso-denominated basic savings account with a debit card and a balance limit of up to 10,000 pesos ($2,530), according to a central bank press release. Starting in November, account holders will be able to make free Internet banking and ATM transactions of up to ARS10,000 a day.

The central bank is also working on a new type of check with special security features to reduce the use of cash for big-ticket purchases. The virtual absence of mortgage credit in Argentina means that home buyers almost always have to pay for a house or apartment in cash in the presence of the seller.


PERU:
Peru Central Bank Intervenes In Forex Market

The Central Reserve Bank of Peru intervened in the foreign exchange market Tuesday to purchase $20 million at an average of 2.7908 soles per U.S. dollar.

The central bank has been purchasing dollars regularly since June 18, intervening to smooth out volatility in the exchange market. Peru's sol has been on an appreciating trend recently due in part to strong inflows of capital. On Tuesday, the sol ended stronger at PEN2.792 to the dollar from PEN2.794 Monday.



European Markets:
The major benchmarks in the U.K., France and Germany ended lower, while those in Spain, Portugal, Ireland and Greece posted gains.

European Bank Lending Declines
The European Central Bank and the euro zone's 16 national central banks' net lending to banks decreased by EUR15.6 billion in the week to Sep. 17 to EUR466.4 billion, the ECB said Tuesday.

At the same time, the Eurosystem's reserves of gold and gold receivables decreased by EUR22 million to EUR351.9 billion, after one central bank sold gold to issue commemorative coins.

Net foreign currency reserves increased by EUR500 million to EUR191.6 billion, because of customer and portfolio transactions and the provision of U.S. dollar liquidity by the central banks, the ECB said.

Cash in circulation fell by EUR1.7 billion to EUR814.2 billion.

European Shares Advance

European shares advanced on Tuesday after data showed U.S. housing starts in August hit their highest level in four months and permits for future home construction rose.

By 1239 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was 0.4 percent higher at 1,091.60 points after being as low as 1,084.88 earlier.

The STOXX Europe 600 Construction & Materials .SXOP index was 1.3 percent higher. Dollar weak as Fed in view; euro bond sales ok.

UNITED KINGDOM:


London Stocks Close Lower

FTSE 100 5576.19 -26.35 -0.47%
FTSE 250 10545.07 -3.12 -0.03%
DJ UK Smaller Companies 881.51 +5.87 +0.67%


US Treasury debt prices pushed higher in European trade on Tuesday as some traders bet that the Federal Reserve may signal an expansion of its quantitative easing programme of Treasuries purchases.

UK public sector borrowing hits record for August
The amount of new public sector borrowing hit a record of £15.9bn for August, according to the Office for National Statistics (ONS).

The larger-than-expected figure came after higher inflation led to a rise in interest payments on index-linked government bonds. The ONS said receipts from taxes were still rising.

The latest figure means borrowing in the first five months of the financial year has reached £58.1bn. The ONS figures exclude the impact of financial interventions by the government, which reduce overall borrowing because of profit contributions from the part-nationalised banks.

The ONS said the rise in the retail prices index, which is used to set payments on index-linked bonds, meant interest payments almost trebled to £3.8bn last month, compared with £1.3bn in for August a year ago.

The BBC's chief economics correspondent, Hugh Pym, said this rise in interest payments meant the country's finances would be out of balance for some time. A spokesman for the Treasury said the figure underlined the need for the government's forthcoming spending cuts....

http://www.bbc.co.uk/news/business-11380600



EU Signals Broad Overhaul Of Key Financial Markets Law

BRUSSELS (Dow Jones)--The European Commission will propose far-reaching changes to its main financial markets law, seeking to impose tighter regulation on the growing amount of securities trading that takes place with little government scrutiny, European Union commissioners said Monday.

They said the law, known as the Markets in Financial Instruments Directive--MiFID in the EU's jargon--should be strengthened to better regulate commodities trading, financial advice and so-called "dark pools," the markets operated by large financial institutions for their clients with minimal government oversight.

"Nobody should be able to escape surveillance," said Michel Barnier, the commissioner in charge of financial regulation, at a conference Monday. "Excessive risk-taking must be eliminated. This requires full transparency vis-a-vis regulators, but also vis-a-vis the public."

MiFID was passed in 2001, in part to encourage other trading venues, such as multilateral trading facilities, to compete with the region's traditional securities exchanges.

The law appears to have reduced the price of financial transactions but also made it more difficult for regulators to monitor risks in the multitude of different markets. This is particularly true of dark pools, which are not required to report extensive information to regulators on the trades they make.

Institutional investors often use dark pools to conceal the size and type of trades they make from the broader markets--information that would have to be reported to regulators if these transactions were conducted through an exchange.

The proliferation of trading venues has also led to multiple prices for securities across Europe, possibly decreasing market efficiency. Some lawmakers have called for the commission to create a "consolidated tape," which would compile in real time the latest sale and trade data from all of Europe's trading venues.

"The efficiency of price discovery is possibly not ensured fully, because of this lack of consolidation of information," said Carlos Tavares, chairman of the Committee of European Securities Regulators.

The commission, the EU's executive arm, will devote particular attention to tightening oversight of Europe's commodity markets, Barnier said. European politicians broadly blamed speculation in agriculture commodities for the sharp rise in food prices in 2008, although economists said the evidence that speculation drove prices significantly higher is thin.

Speaking with EU farm commissioner Dacian Ciolos, Barnier said "we share the same determination and the same outrage against all those tempted to abuse these markets that have the greatest impact on the lives of our citizens."

The rise of high-speed trading is another financial innovation that will likely be addressed in the review of the MiFID, EU officials said. Most large banks and hedge funds now use computerized algorithms that automatically trade a vast array of securities, executing dozens of trades in fractions of a second.

Some lawmakers and regulators have called for stricter regulation of this trading, particularly after the "flash crash" in May that caused the Dow Jones Index to plunge almost 10% in a matter of minutes.

"Hard-coded algorithms need to have a fail-safe mechanism," said Sharon Bowles, chairman of the Economic and Monetary Affairs Committee of the European Parliament, which will need to approve changes to the MiFID.

"It is often said that these tools have enabled better hedging and aim to remove the encumbrance of human reaction times," Bowles added. "That causes me to ask, 'who is thinking what they are doing anymore?'" Barnier said he aims to propose draft changes to the directive in spring 2011.



ITALY:

Vatican Bank Inquiry

The Vatican on Tuesday said it was "perplexed and astonished" after Rome prosecutors placed the head of its bank under investigation for violating money laundering legislation.

"The Holy See wants to express the maximum confidence in the president and the chief executive" of the Istituto per le Opere di Religione (IOR), the bank's official name, the Vatican said in a statement. Both President Ettore Gotti Tedeschi and Chief Executive Paolo Cipriani are accused of violating legislation that requires banks to disclose information on financial operations.

Although the IMF said South Africa's financial sector largely weathered the global credit crisis well, private sector credit growth has turned negative and the recession inflated the number of bad loans in the system, as a result, banks' profitability declined.

IRELAND:
US stock-index futures gained on Tuesday, buoyed by a well-received Irish bond auction.


NETHERLANDS:

The Netherlands' caretaker government Tuesday announced modest budget cuts to fix public finances in 2011, although the draft budget it presented will likely be superseded by a more austere package once a new government emerges.

The Dutch economy, the euro zone's fifth-largest, has recovered after suffering the deepest recession since the Second World War. The 2011 budget presented Tuesday is based on economic growth of 1.75% this year and of 1.5% in the next.

Although the Netherlands' fiscal shortfall is smaller than many in the European Union, it has been widening following the recent global economic recession and is expected to reach 5.8% of gross domestic product this year, nearly twice the euro zone limit of 3%. Still, that deficit is better than others, like France, which expects its public sector financing gap to hit 8% this year.

For 2011, the government expects the deficit to narrow to EUR24.3 billion, mainly due to higher tax revenue and austerity measures. That would leave the country's state debt as a percentage of GDP at 66%, not far from the euro zone standard of 60% of GDP.

the Netherlands will cut government spending by EUR1.8 billion next year and by 2015 annual governmental outlays would be reduced by EUR3.2 billion in total from this year's level.

Economists say that a new administration, likely to be installed in a few weeks, will have to come up with a more extensive package to reform one of Europe's most lavish social-welfare systems.

A new government has yet to be formed three months after inconclusive general elections in June which left the country with a fragmented political landscape.




SOUTH AFRICA:

IMF Forecasts Sustained South African Economic Recovery
South Africa's medium-term outlook is for a sustained recovery, dependent on the global recovery, with growth projected to be 3.2% in 2010 and rising to 4.5% by 2015, the International Monetary Fund said Tuesday.

Despite a strong rebound in the South African economy, the IMF said private consumption and investment growth is anemic. IMF boards commended the country's "impressive economic performance," saying the government exercised "prudent macroeconomic management, which provided room for decisive easing of monetary and fiscal policies during the crisis."

But the IMF said South Africa faces several challenges in leading the country into a full-blossomed recovery, including cutting unemployment and income inequality through labor and market reforms.

Although stimulus spending on infrastructure meant to counter the recession hiked public debt, the government has outlined an ambitious fiscal consolidation plan and the IMF believes the overall fiscal deficit is expected to fall gradually to 2.5% of gross domestic product.

IMF directors said the tightening policy "strikes the right balance between supporting the ongoing recovery and rebuilding fiscal space." They stressed the importance of avoiding another round of public sector wage increases that exceed inflation expectations, warning that they could jeopardize the fiscal targets and distort wage negotiations in other sectors.


Asian Pacific Markets:

Indian firms scramble for IPOs ahead of jumbo offers.

Commodities
Crude Oil	72.99	- 0.72%
Natural Gas	3.93	+ 0.20%
Gasoline	1.92	-
Heating Oil	2.12	-
Gold	1290.18	+ 0.90%
Silver	21.04	+ 1.50%
Copper	3.48	- 0.46%
Quotes delayed 15 min.		» Add to your site

World Markets Snapshot:

Shanghai	2,591.55	+2.84 (0.11%)
Nikkei 225	9,602.11	-23.98 (-0.25%)
Hang Seng Index	22,002.59	+25.25 (0.11%)
TSEC	8,196.40	+9.44 (0.12%)
FTSE 100	5,631.11	+28.57 (0.51%)
DJ EURO STOXX 50	2,822.53	+19.86 (0.71%)
CAC 40	3,818.93	+30.92 (0.82%)
S&P TSX	12,234.51
S&P/ASX 200	4,617.50	-13.80 (-0.30%)
BSE Sensex	20,001.55	+95.45 (0.48%)

Tuesday's US Economic Calendar:

7:45 a.m.
Sept. 18 ICSC-Goldman Sachs Chain Store Sales Index -

Week on Week (previous +0.8%)

Year on Year (previous +2.6%)

8:30 a.m.
Aug. New Residential Construction - Housing Starts and Building Permits Total Starts (expected 545K), Starts Percent Change (expected -0.2%), Building Permits (expected 550K), Building Permits Percent Change (expected -1.6%)

8:55 a.m.
Sept. 18 Johnson Redbook Retail Sales Index MoM % Change (previous -0.1%), 12MonChgPct (previous +2.9%), 52WkChgPct (previous +2.9%)

10:00 a.m.
Aug. Regional & State Employment & Unemployment

2:15 p.m.
Federal Reserve Board - U.S. interest rate decision Federal Funds Rate (Dir) (previous 0), Discount Rate (previous 0.75), Discount Rate Change (previous 0), FOMC Vote For Action (previous 9), FOMC Vote Against Action (previous 1), Federal Funds Rate Change High Range (previous 0.25), Federal Funds Rate Change Low Range (previous 0)

4:30 p.m.
Sept. 17 API Statistical Bulletin Crude Stocks (Net Change) (previous +3.33M), Gasoline Stocks (Net Change) (previous -963K), Distillate Stocks (Net Change) (previous -1.52M), Refinery Runs (previous 85.6%)

5:00 p.m.
Sept. 19 ABC News Consumer Confidence Index (previous -43)

Market Summary Monday Sept. 20, 2010:

Stocks:

U.S. stocks rallied to their highest level in more than four months as encouraging financial data boosted confidence in the economic recovery. "We're beginning to get some indications it's more of a muddle-through economy in the U.S., rather than a double dip," said Sean Kraus, chief investment officer at Citizens Trust. "There was so much negative news built into the markets that anything positive is good."

Treasurys:

Treasurys gained, led by 10-year and 30-year maturities. The bond market was supported by speculation of larger-scale purchases from the Federal Reserve to support the economy. The FOMC will release its rate decision and an accompanying statement around 2:15 p.m. EDT Tuesday.

Forex:

The US dollar declined modestly, but held on to the support line as worries about a new round of economic stimulus prompted investors take a defensive stance ahead of Tuesday's meeting of the Federal Reserve. While the Fed's policy-setting committee isn't expected to announce additional programs involving asset purchases to boost liquidity, the mere possibility of such measures weighed on the dollar.