Stock Market Update - Tuesday, September 28, 2010 Cautious Upward Trend

Stock Market Update
Tuesday, September 28, 2010


Latest US News Headlines:

Dow Jones	10,858.14	+46.10	(+0.43%)
S&P 500	1,147.7	+5.54	(+0.49%)
Nasdaq	2,379.59	+9.82	(+0.41%)

US DOLLAR SLIPS - STOCKS EDGE UP - GOLD BREAKING RECORDS
Dow Jones 11:30 AM Averages: DJIA 10,841.90 UP 29.86

  30 INDUS     10,841.90 UP   29.86 OR    0.28%
  20 TRANSP     4,502.12 DN    6.59 OR    0.15%
  15 UTILS        400.63 UP    0.05 OR    0.01%
  65 STOCKS     3,744.63 UP    3.84 OR    0.10%

The Dow Jones Industrial Average edged up 29 points, or 0.3%, to 10841 in recent trading, while the Nasdaq Composite eked out an increase of less than a point to 2370 and the Standard & Poor's 500-stock index rose 0.2% to 1144.


The mixed activity came as investors digested economic data in the U.S. that was mostly disappointing while concerns about the euro zone eased following reports out of the U.K. and Germany.

U.S. consumer confidence fell sharply in September to its lowest reading since February, while a report from the Federal Reserve Bank of Richmond showed economic activity among manufacturers in the central Atlantic region weakened in September.

Tuesday's round of domestic economic data showed U.S. home prices rose again in July from a month earlier, but growth continued to slow and was non-existent on a seasonally adjusted basis.

US Dollar Futures Index DXY, Day's Range: 78.87 - 79.82, Now 78.89 -0.44 (0.54%)

The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.3%. Crude-oil futures advanced above $76 a barrel, reversing prior declines, while gold futures also turned higher.
Treasurys rose. The yield on the 10-year fell to 2.47%, well below the 2.61% yield the 10-year note was at as recently as Friday.

US Treasury Awards $35B 5-Year Notes At High Rate Of 1.260%
The U.S. Treasury awarded $35.00 billion in five-year notes at Tuesday's auction at a high rate of 1.260%.

The Treasury received bids totaling $103.44 billion and accepted $35.00 billion. Primary dealers were awarded $14.37 billion, while indirect bidders--a category that includes foreign central banks--were awarded $17.47 billion. Indirect bidders got 50% of the total competitive amount accepted; direct bidders received 9%. The bid-to-cover ratio, an indication of demand, was 2.96, Treasury said.   Tenders submitted at the high yield were allotted 64.15%. The dollar price was 99.951690, and the coupon rate was set at 1.250%, or 1 1/4%. The median rate was 1.219%; that is, 50% of the amount of accepted competitive bids were tendered at or below that rate. Of the competitive bids accepted, 5% were tendered at or below the rate of 1.171%. The issue is dated Sept. 30, 2010, and matures Sept. 30, 2015.

The CUSIP number on the five-year notes is 912828NZ9.

Gold topped $1,309 an ounce and Silver is trading up at $21.69 an ounce.
Gold is now trading over $1,307.66 an ounce.

US Commodities
Crude Oil     76.04     - 0.18%
Natural Gas     3.84     -
Gasoline     1.95     -
Heating Oil     2.12     -
Gold     1308.59     + 1.05%
Silver     21.75     + 1.40%
Copper     3.63     + 1.11%


Global Public Debt $039,866,040,716,171 
As of September 28, 2010

Global Public Debt Clock, from The Economist:
Track and forecast public debt in countries around the world.The Global Public Debt Clock provides a graphic perspective on an important and much discussed global economic issue.

Global public debt for 2010 is close to $40 trillion and is predicted to rise to over $42 trillion in 2011. In 2009, global debt was just under $37 trillion:

· US public debt is currently at $8.5 trillion, 58 % of GDP. It is predicted to rise to $9.5 trillion in 2011, which will be 63.1% of GDP.

· Japan’s public debt is currently $10.6 trillion, 196.1% of its GDP
· Greece’s public debt is currently $374.6 billion, 127.8% of its GDP.
· Chinese public debt is approximately $949 billion, 17.3% of its GDP.

Visit:  http://buttonwood.economist.com/content/gdc



GOLD TOPS $1,309 An ounce
Gold continues to break new records Tuesday. Earlier today, Gold dipped after hitting a record high of $1,307.20 an ounce in the previous session as a rebound in the dollar prompted speculators to lock in gains. Silver is now $21.57.

GOLD AND SILVER ETFs CONTINUE TO GAIN

GLD   $127.85  +1.14
GDX   $ 56.05  +1.16
GDXJ  $ 34.05  +0.58
SLV   $ 21.29  +0.30

The most actively traded gold contract, for December delivery, was recently up $8, or 0.6%, at $1,306.60 an ounce on the Comex division of the New York Mercantile Exchange. It hit $1,308.90, the strongest ever intraday price for a most-actively traded contract.

London Late Gold And Silver At 1515 GMT

             Current Bid-Ask    Previous
             ----------------   ---------
Gold         1305.75-1306.20 1297.05-1297.40
Silver       21.56-21.58     21.41-21.43

Engelhard Corp's base price for industrial gold bullion was $1296.85 per troy ounce, down $3.00 from previous.

It's selling price for gold in fabricated form was $1394.11, down $3.23.
Handy & Harman's base price for gold was $1294.00 per troy ounce, down $3.00. The fabricated form price was $1397.52, down $3.24.


CRUDE OIL: $76.18 per Barrel
Crude oil futures fell 90 cents to $75.62 a barrel ahead of U.S. reports expected to show fuel stockpiles rose in the world's top oil-consuming nation last week




US CONSUMER CONFIDENCE DOWN
Sept US Consumer Confidence Index Falls To 48.5

U.S. consumer confidence fell sharply in September, as consumers see no improvement in the labor markets, according to a report released Tuesday. The Conference Board, a private research group, said its index of consumer confidence fell to 48.5 this month from a revised 53.2 in August, first reported as 53.5. 

The September reading was far worse than the 52.0 expected by economists surveyed by Dow Jones Newswires. It is the lowest reading since February 2010.

The present situation index, a gauge of consumers' assessment of current economic conditions, fell to 23.1 from an unrevised 24.9 in August. Consumer expectations for economic activity over the next six months dropped to 65.4 in September from a revised 72.0, first reported as 72.5.

A large 46.1% of respondents think jobs are "hard to get" this month, up from 45.5% in August, while only 3.8% of respondent think jobs are "plentiful," down from 4.0% last month.

Expectations about labor markets are equally downbeat. The percentage of consumers expecting more jobs in the months ahead fell to 14.5% from 14.7% and the proportion expecting fewer jobs rose to 22.7% from 19.6%.

Income worries remain significant. The September report showed 10.2% of consumers expect their incomes to increase in the next six months, while a larger 16.3% expect a pay cut.

The September confidence index dovetails with the preliminary reading of the consumer sentiment index compiled by Reuters/University of Michigan and released earlier this month. That index unexpectedly fell to 66.6, the lowest reading since August 2009.


CONGRESSIONAL BUDGET OFFICE REPORT - SLOW US GROWTH
Economic Recovery Anemic Compared To Previous Recoveries
The pace of the current U.S. economic recovery continues to be "anemic" as compared to previous periods following economic recessions, the director of the Congressional Budget Office told lawmakers Tuesday.

The U.S. jobless rate, a key statistic when measuring the health of the economy, will remain above 8% until 2012 and higher than 6% until 2013, Douglas Elmendorf, the head of the non-partisan CBO said Tuesday.

He said the housing market, another important sector of U.S. economic growth, would likely remain stagnant until the inventory of unsold houses falls. Elmendorf said the CBO expected the national average value of housing would fall a further 7% by late 2011.

Elmendorf was testifying before the Senate Budget Committee in one of his regular appearances to update federal lawmakers on the state of the economy.

He said that a further drag on businesses' willingness to invest and consumers' ability to spend is uncertainty about government policies, most notably whether or not the Bush-era tax cuts would be extended past the end of this year. Asked specifically about the various scenarios for extending all or a portion of the tax cuts, Elmendorf said a short term increase of all the lower rates, or some other form of government spending, could help to kick-start the U.S. economy. A permanent extension of the tax rates would prove damaging to the already high U.S. federal budget deficit.


CEO ECONOMIC OUTLOOK INDEX FALLS
Chief executives from some of the largest U.S. companies lowered their expectations for job growth over the next six months, but foresee an uptick in capital spending, a quarterly survey released Tuesday showed.

 The third-quarter Business Roundtable CEO Economic Outlook Index, compared to the second quarter, revealed more executives, 23% from 17%, plan to decrease their workforces, while 46% of the CEOs expect no change in employment levels.

 Economic reports have pointed to a growth pace that remains sluggish, but not to an economy that's heading towards a new recession. Although retail sales have made moderate strides, consumer spending is seen constrained by an unemployment rate that is still close to 10%.

"Sales forecasts are down from last quarter, prompting CEOs to remain cautious," Business Roundtable Chairman Ivan G. Seidenberg said. Seidenberg also serves as chairman and chief executive of Verizon Communications Inc. (VZ).

 The third-quarter 2010 survey shows 66% of the CEOs expect their sales to increase, fewer than the 79% from the second-quarter survey. About 9% of CEOs in this survey expect sales to slip, with 25% expecting no change.

The Business Roundtable CEO Economic Outlook Survey includes an overall index, which fell to 86.0 in the third-quarter from 94.6 in the second quarter. The index is based on projected sales, capital spending and employment results. The value can range from -50 to 150, with a number below 50 indicating economic contraction.

The Washington-based Business Roundtable is an association of more than 160 CEOs from top U.S. companies. The survey has been conducted quarterly since the fourth quarter of 2002, after the previous U.S. recession ended.


CALIFORNIA COMMODITY POOL FROZEN - FRAUD CITED
Assets Of California Commodity Pool Frozen Amid Alleged Fraud

The U.S. Commodity Futures Trading Commission said it obtained an emergency federal court order to freeze the assets of California-based People's Alternative Inc. and its three principals. The order also prohibits the destruction of books and records and grants the CFTC immediate access to those documents.

The agency filed charges in federal court last week alleging the defendants solicited and misappropriated at least $1.2 million of customer funds in connection with the operation of a commodity pool of nearly 100 participants.


The complaint alleges three principals misappropriated at least $533,000 from the funds for personal use. The CFTC seeks full restitution to defrauded customers and disgorgement of ill-gotten gains. The defendants are ordered to appear in federal court on Oct. 8. A phone number listed for Los Angeles-based People's Alternative wasn't working Tuesday.



US STOCKS DOWN AT OPEN -DOLLAR RISES

The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.1%. Treasurys also rose, pushing the yield on the 10-year down to 2.49%. Crude-oil futures declined, as did gold futures.

The US dollar is right around the bottom of the index where it has rallied from in the past. It may be near to a good time to exit long-term euro positions.

The Dow Jones Industrial Average was off 51 points, or 0.4%, at 10761, in early trading. The measure was pulled lower by its technology components, with Cisco down 1.1%, Intel off 0.6% and Hewlett-Packard off 0.4%. Keeping the declines in check, Merck climbed 0.9%, Travelers rose 0.7% and Verizon Communications advanced 0.7%.

The Nasdaq Composite slipped 0.6% to 2355. The Standard & Poor's 500 index fell 0.4% to 1137, with its material and technology sectors leading to the downside while health care and telecommunications stocks rose.


RICHMOND FED SEES SEPTEMBER MANUFACTURING INDEX DOWN
Richmond Fed: Sept. Manufacturing Index -2 Vs Aug 11

Economic activity among manufacturers in the central Atlantic region weakened in September, the Federal Reserve Bank of Richmond reported Tuesday.

The bank's manufacturing index slipped to -2 from 11 in August. Its shipment index fell to -4 from 11 in August. Numbers below zero indicate falling activity. On the service side, Richmond revenues moved to -5 this month from -10 in August. Retail sales revenues alone held steady at -8, the same reading as August.




BEFORE THE BELL

Home prices up, but growth rate slows
U.S. home prices rose again in July from a month earlier, according to the S&P Case-Shiller home-price indexes, but growth continued to slow and was nonexistent on a seasonally adjusted basis as the boost from a government tax credit continued to wane.

Home prices have risen for five straight months, but the rate of growth has slowed, according to an industry report released Tuesday. Prices inched up 0.6% in July compared with June, according to S&P/Case-Shiller 20-city home price index. On a year-over-year basis, prices rose 3.2% compared with July 2009.
Experts polled by Briefing.com had forecast a year-over-year rise of 3.3%. S&P's 10-city index has gained 4.1% over that period. The weak readings reveal the ongoing strife in housing markets. Sales of both new and existing homes are well below the the standards set during the housing boom years. New home sales have been running at or near record lows.


US DOLLAR RISES TO SUPPORT
The dollar index against a basket of other major currencies (^DXY - News) rose 0.5 percent, aided by a Wall Street Journal report that Fed officials were considering a more open-ended, smaller-scale bond buying programme than was the case in 2009.

US STOCK FUTURES UP AHEAD OF DATA
U.S. stock futures trade marginally higher, as investors retreat to the sidelines ahead of data on consumer confidence and the S&P/Case-Shiller home-price index for July.

FED MULLS NEW BOND APPROACH
Federal Reserve officials are considering new tactics for the purchase of long-term U.S. Treasury securities to bolster a disappointingly slow recovery.

J.P. MORGAN TARGETS FDIC FUNDS
J.P. Morgan Chase & Co. is putting federal regulators on notice that it is going after more than $6 billion in claims it used to buy Washington Mutual Inc.'s banking assets.



Canadian Market:

Toronto Stocks Higher At Midday
Toronto Indexes, Volume; 2 PM EDT Composite Up 51.79

 S&P/TSX Composite   12242.39  up   51.79  or 0.4%
 S&P/TSX 60 Index      708.10  up    2.67  or 0.4%
 Financials            175.11  up    0.32  or 0.2%
 Materials             394.69  up    5.72  or 1.5%
 Energy                275.95  up    0.88  or 0.3%
 Industrials           103.36  off   0.42  or 0.4%
 IT                     27.75  off   0.03  or 0.1%

   Volume          Tuesday  Monday
   1-2                46.6M    40.6M
   9:30-2            333.3M   279.8M
 

The stock market was higher at midday Tuesday, led by gains in resource stocks following mixed signals about a global economic recovery.Four of Toronto's 10 sectoral indexes were higher with the materials group up 1.05% on the back of gains in both base-metal and gold stocks.

At 11:45 a.m. EDT (1545 GMT), the S&P/TSX Composite Index was up 25.62 points, or 0.21%, at 12216.22 and advances led declines 787 to 612. Trading volume was 227.60 million shares. The S&P/TSX 60 Index was up 1.10 points, or 0.16%, to 706.53 points.


CANADIAN BONDS RALLY
Canada Bonds Rally For Second Day After Soft US Data

Canadian bonds rallied for a second straight session Tuesday as a new serving of weak U.S. economic data fed bets that a weakening economy could spur further supportive measures from the Federal Reserve.

Canada's two-year bond yield was at 1.375% late Tuesday, from 1.421% late Monday. The 10-year bond yielded 2.737%, from 2.805%. Bond yields and prices move in opposite directions.


Bonds ticked higher the US dollar suffered broad selling against many major rivals, including the euro and the yen. Further quantitative easing measures are perceived as equivalent to printing more dollars, putting downward pressure on the currency's value.

The Canadian dollar was left out of the rally, with the Canadian economy perceived as too tightly linked to that of the U.S.


CANADA SIGNS AGRICULTURE PACT WITH MONGOLIA
Canada has increased its agriculture cooperation with Mongolia with the signing of an important Agriculture Memorandum of Understanding between the two countries, Agriculture and Agri-Food Canada said Tuesday in a statement.

Canada's Agriculture Minister, Gerry Ritz, joined the Ambassador of Mongolia to Canada, His Excellency Tundevdorj Zalaa Uul to sign the MOU which will be key to enhancing bilateral relationships between Canada and Mongolia.

The signing was witnessed by Canadian Prime Minister Stephen Harper and Mongolia's Prime Minister Sukhbaatar Batbold.  "International trade and cooperation is key to making sure Canadian farmers can make their money from the marketplace," said Ritz.

The MOU will offer a sharing platform between the two countries and give Mongolia and Canada a better understanding of each other's systems, policies and regulations. It will facilitate sharing of best practices as well as strengthen agricultural cooperation and commercial relations between the two countries.

The MOU will help foster alliances between commercial interests, facilitate exchange of technology, expertise and be a catalyst for future trade, according to the statement.  For example, Canada has commercial opportunities in agricultural machinery and livestock production in Mongolia. Canada's world class genetics will certainly contribute to further the development of Mongolia's animal industry.



South American Markets: 
Peru, Chile, Colombia Stock Exchanges To Integrate Nov 22, 2010
Integrated Peruvian, Chilean and Colombian stock-exchange operations are set to begin November 22, said the president of Peru's stock exchange on Tuesday. The November 22 date represents the first phase of the integration that investors in Lima would be able to buy Chilean and Colombian company shares via the Lima exchange.


BRAZIL:

Brazil Central Govt Posts August Surplus Of BRL3.9B

Brazil's central government posted a budget surplus in August with aid from a strong input by the federal treasury, the government reported Tuesday. The central government, which includes the treasury, the publicly-administered social security system, and the central bank, had a 3.9 billion Brazilian real ($2.3 billion) primary budget surplus in August.

The August surplus, which came solidly within market forecasts, was larger than the BRL770 million surplus in July this year, and equal to a BRL3.9 billion surplus in August 2009. The latest central government monthly surplus was composed of a federal treasury surplus of BRL9.50 billion, a social security administration deficit of BRL5.42 billion and a central bank deficit of BRL85.5 million.

According to the treasury, the result during the month was strongly influenced by dividends from government entities, including BRL3 billion from the BNDES National Development Bank, BRL1.4 billion from state-controlled power company Eletrobras, and BRL1.1 billion from the Caixa Economica Federal savings and loan. Total dividends from state companies in August came to BRL6.8 billion.

The government said the August result brought the country's budget surplus for the first eight months of the year to BRL29.71 billion, or the equivalent of 1.29% of gross domestic product. That was up from BRL23.43 billion during the same period last year, or the equivalent of 1.16% of GDP.

Brazilian government revenue increased by 16.2% in the first eight months of the year compared to 2009, while spending rose by 17.2%. Government investments were up 62% during the period, to BRL28 billion.
Brazilian Treasury Secretary Arno Augustin said with expected revenues in coming months, the government would fully meet its fiscal goals for the year.

Brazil Real Lower
Brazil's currency lost a bit of ground on Tuesday morning, backing off from a key level of BRL1.70 per dollar, while President Luiz Inacio Lula da Silva on Tuesday defended the country's choice of a floating exchange rate regime.

Tuesday morning, the real weakened slightly against the dollar, trading at BRL1.7091 per dollar on the BM&FBovespa exchange, from Monday's close of BRL1.7084. For now, markets seemed to be backing off from the next key test for the currency, which would be to break below BRL1.70.

"Controlled, managed exchange rates have been at the root of some of the serious crises of the past, which affected all the country, including the agricultural sector," the president said in a weekly column in which he addresses voters' concerns. "As we believe Brazil can't be vulnerable, we adopted a floating exchange rate regime, with high foreign exchange reserves."

The president was responding to a query from Ademir Braz Martins, a farmer in the state of Bahia, who complained that the strength of the Brazilian real erodes revenues from soy, wheat and corn which are sold based on prices in dollars. The president said the government isn't "indifferent" to the problems caused by the real, addressing the farmer's specific query by citing government programs to help farmers.

But the broader defense of the exchange-rate is significant given market speculation that the government may extend the measures being used to prevent the currency from gaining too much against the U.S. dollar.

Brazil Treasury Buys More US Dollars
Brazil's Treasury department has been buying more dollars in the spot market to pay down the government's debts, but a sovereign investment fund hasn't yet been deployed, a senior Treasury official said Tuesday.

Brazil's government, including the central bank and the Treasury, have been buying dollars as part of an effort to stem the strong appreciation of the Brazilian real. Treasury Secretary Arno Agustin on Tuesday confirmed that the Treasury has stepped up those purchases of late, but said that the government's investment fund, estimated to hold roughly $10 billion, hasn't yet been utilized.

The Treasury uses the dollars which it buys to buy back sovereign bonds through the market. Agustin said the government is nearing the two-year authorization limit for buying back bonds. The government will use its investment fund to intervene in the currency market "when we believe that it's the right moment," Agustin said.



MEXICO:

Mexico Stocks Open Slightly Lower
Mexican stocks opened slightly lower Tuesday as a reported drop in U.S. consumer confidence this month led investors to continue questioning whether September's rally in equity markets might continue.

10:40 a.m. EDT, the local stock market's benchmark IPC index of leading issues was down a scant 10.94 points at 33,111.50. Volume was 28 million shares traded at a total value of 756.2 million pesos ($60.4 million).


Mexico's Foreign Reserves Hit Record $108.03B As Of Sept 24

Mexico's international reserves surged $1.04 billion last week to a record $108.03 billion, the Bank of Mexico said Tuesday.

The increase resulted from a number of large transactions, including the sale of $1 billion by state oil monopoly Petroleos Mexicanos, or Pemex, to the central bank. Reserves rose by $344 million as private banks exercised put options auctioned monthly by the Bank of Mexico, and the central bank gained $375 million thanks to changes in the values of its international assets as well as other unspecified operations.

Reducing the gains was the federal government's purchase of $678 million from the Bank of Mexico last week.Mexcio's peso recently traded stronger against the dollar at MXN12.5250 to the dollar, compared with MXN12.5115 shortly after the open and MXN12.55 at Monday's close.


CHILE:

Chilean Industrial Output Grows 6.9% On Year In August

Chile's industrial output rose 6.9% in August from the same month a year earlier as the country puts the global financial crisis and February's devastating earthquake behind it, the government statistics agency said Tuesday. The gain broadly surpassed analysts' expectations of a 4% on-year increase.

The surge in industrial output "is partly explained by various industries' recovery as in 2009 these were hurt by the international crisis which generated a low basis of comparison," the statistics agency, known locally as the INE, said. In addition, those industries the earthquake hit are now back to pre-earthquake production levels, the INE said.

On a seasonally adjusted basis, August industrial output grew 1.7% from the previous month. For the first eight months of the year, industrial output has fallen 0.5% versus the same period in 2009.


VENEZUELA:

Venezuela's Popular-Vote Wins In Election
Venezuela President Hugo Chavez announced that his party, which won a commanding 59% of the seats in the legislature in Sunday's elections, also beat the opposition by a slight margin in the overall vote, dismissing his opponents' claims that they collected more total votes.

While having no major impact on Sunday's results, opposition groups say the results of the nationwide popular vote are important.

In a speech late Monday, Chavez said some 5.4 million Venezuelans voted for pro-Chavez candidates while 5.3 million cast ballots for the anti-Chavez candidates. The opposition claims it won 52% of the popular vote to the pro-Chavez groups' 48%. "Without a doubt, the government won an important victory," Chavez said.



European Markets: 

Europe     STOXX 600        262.15     -0.77     -0.29     +3.25    Intraday
           STOXX 50        2514.45    -13.07     -0.52     -2.74    Intraday
           EuroSTOXX50     2774.48     -1.85     -0.07     -6.42    Intraday
Amsterdam  AEX              338.17      1.00      0.30     +0.85    Intraday
Athens     ASE             1472.50    -23.83     -1.59    -32.95    Intraday
Brussels   BEL-20          2603.50      5.77      0.22     +3.66    Intraday
Copenhagen OMXC20           416.10     -0.95     -0.23    +23.59    Close
Dublin     ISEQ            2660.15    -22.79     -0.85    -10.58    Intraday
Helsinki   OMX Helsinki    7038.32     59.34      0.85     +9.02    Intraday
Istanbul   IMKB-100       65589.87    962.58      1.49    +24.16    Close
Jo-burg    All Share      28972.47     13.05      0.05     +4.72    Close
Lisbon     PSI General     2648.75      9.28      0.35     -8.73    Sep 27
Madrid     IBEX 35        10590.70    -22.30     -0.21    -11.30    Intraday
Milan      FTSE MIB       20541.59    -52.35     -0.25    -11.64    Intraday
           FTSE Italia    21128.79    -42.21     -0.20    -10.67    Intraday
Oslo       OBX Stock        347.68     -1.50     -0.43     +2.46    Intraday
           All-Share        420.49     -0.86     -0.20     +0.10    Close
Prague     PX              1130.80     -5.00     -0.44     +1.21    Sep 27
Russia     RTS             1486.22      2.54      0.17     +2.88    Close
Vienna     ATX             2527.96     -1.45     -0.06     +1.30    Intraday
Zurich     Swiss Mkt       6334.38     -4.51     -0.07     -3.23    Intraday
European Stocks Up
Leading European stocks (^FTEU3 - News) fell 0.7 percent in early trade as investors took profits after four weeks of gains and grew increasingly wary of European debt challenges, particularly in Ireland and Portugal.


EU To Propose Tough Sanctions For Overspending Governments

The European Commission Wednesday will propose tough sanctions for euro area countries to prevent the buildup of public debt, deficits and macroeconomic imbalances that sparked the region's sovereign debt crisis earlier this year, a senior commission official said Tuesday.

The system could result in fines of up to 0.2% of gross domestic product for euro-zone countries that repeatedly fail to act to bring their deficits and total debt below the European Union's minimum levels.

The EU's "Stability and Growth" pact requires governments to keep budget deficits below 3% of GDP and their total debt below 60% of GDP. Current rules mainly target countries that exceed the deficit target; the legislation proposed Wednesday will add an enforcement mechanism for the total debt limit.

Countries that exceed the 60% debt limit will be required to reduce their debt by one-twentieth of the difference between their debt level and the 60% limit. So, if a country's debt is 100% of GDP, it will have to reduce its debt by 2% of GDP that year, the official said.


LOGICA, UK GOVT SIGN AGREEMENT
Logica says it has signed a memorandum of understanding with the U.K. government to deliver all of its existing contracts, easing sector concerns that economic cutbacks would derail the deals.

ENDO TO BUY QUALITEST FOR $1.2B
Endo Pharmaceuticals agrees to acquire Qualitest Pharmaceuticals from private-equity firm Apax Partners for about $1.2 billion, bolstering its branded pharmaceuticals, generic drugs and devices and services businesses.

AUSTRIA:
Austria To Push For Financial Transaction Tax At EcofinAustria will push for an EU-wide tax on financial transactions at the next meeting of finance ministers in Brussels, the country's Finance Minister Josef Proell said Tuesday.

Proell said Austria will put forward a financial transaction tax of between 0.01% and 0.05% of transaction volumes, limited to purchases of stocks, securities, bonds and derivatives.

"We want to bring more impetus to the European transaction tax debate. I will bring the Austrian model to the table at the informal Finance Minister's meeting next week and thereby assume the initiative," Proell said in a statement. According to the finance ministry, Austria's financial transaction tax model, if implemented globally, could generate annual revenue of between EUR200 billion and EUR250 billion.


IRELAND:

Irish Govt Struggles For Survival As It Tackles Crisis

As it faces mounting challenges in the banking system, the economy at large, and the international bond markets, Ireland's government faces a struggle for its own survival when parliament reconvenes Wednesday after a 12-week summer break.

GREECE:
Greek Banks Agree To Invest EUR25 Billion In Economy

The Greek government said Tuesday it has reached agreement with the commercial banks, who have received state guarantees of EUR55 billion, will now inject EUR25 billion into the economy.

"We have reached a liquidity accord with the banks to provide the market with EUR25 billion  in the form of loans," Finance Minister George Papaconstantinou said after a meeting with the head of the Greek bank federation.

Greek banks received a state guarantee of EUR30 billion in 2009 from the previous government, aimed at ensuring their solvability, as well as an additional EUR25 billion from the current administration.


FRANCE:


France 2010 Public Deficit At 7.7% Of GDP


French Finance Minster Christine Lagarde will say Wednesday that the country's public deficit this year is set to fall to 7.7% of gross domestic product, better than previously estimated, a finance ministry spokesman said Tuesday. The new estimate is part of the 2011 budget presentation, the spokesman said.

Earlier this month, Budget Minister Francois Baroin said France's 2010 public deficit is expected around 7.8%, lower than initially expected, because of a pick up in growth. The government expects growth this year to be at least 1.5% compared with a previous forecast of 1.4%.




PORTUGAL:

PORTUGAL BUDGET IMPASSE
Portugal's President Anibal Cavaco Silva expresses concern about the political impasse surrounding the country's 2011 budget, as yield spreads between German and Portuguese government bonds reached a record high.

Portugal's President Anibal Cavaco Silva expresses concern about the political impasse surrounding the country's 2011 budget, as yield spreads between German and Portuguese government bonds reached a record high.







Asian Pacific Markets: 

Asian Stocks Decline, dollar finds support

Shares fell in Asia and Europe on Tuesday while the struggling dollar was buoyed by a report that the Federal Reserve was weighing a smaller bond-buying program than its previous asset purchase scheme.

Suggestions that Japan's central bank may also ease monetary policy weighed on the yen, but currency markets remained anxious about the prospects for new Japanese intervention, and gold held near record highs.

The dollar was trading at 84.20 yen at 0640 GMT, little changed from the New York close but up from levels around 84.11 -- its weakest point since Tokyo's heavy intervention two weeks ago to push its currency lower.

Sources said the Bank of Japan was considering whether to ease monetary policy further, though it could delay action pending a consensus on how to keep economic recovery on track. Talk of easing had an effect as did the possibility of intervention.

"The market consensus is now that there won't be endless yen strengthening, that if the dollar falls below 84 yen authorities are likely to intervene," said Kenichi Hirano, operating officer at Tachibana Securities.
The dollar index hit a seven-month trough of 79.19 on Monday, before climbing back in Asia.

Japan's Nikkei average (Osaka:^N225 - News) fell 1.1 percent as the deadline passed for investors to receive dividends on Tokyo stocks for the financial half year.

The MSCI index of Asian stocks outside of Japan (^MIAPJ0000PUS - News) sagged 0.5 percent.
Tokyo stocks have risen only some 1.6 percent this quarter as major exporters were weighed down by the yen's surge to near 15-year highs against the dollar.

The MSCI ex-Japan index has risen nearly 10 percent in September, while the S&P 500 has gained more than 10 percent, prompting some analysts to predict more profit taking in coming sessions.

Commodities
Crude Oil	75.89	- 0.82%
Natural Gas	3.82	+ 0.47%
Gasoline	1.94	-
Heating Oil	2.11	- 0.48%
Gold	1294.34	- 0.05%
Silver	21.28	- 0.79%
Copper	3.58	- 0.39%
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World Markets Snapshot:

Shanghai	2,611.35	-16.61 (-0.63%)
Nikkei 225	9,495.76	-107.38 (-1.12%)
Hang Seng Index	22,109.95	-230.89 (-1.03%)
TSEC	8,189.44	-2.10 (-0.03%)
FTSE 100	5,573.06	-0.36 (-0.01%)
DJ EURO STOXX 50	2,786.94	+10.61 (0.38%)
CAC 40	3,777.35	+11.19 (0.30%)
S&P TSX	12,190.60	0.00 (0.00%)
S&P/ASX 200	4,669.80	-5.60 (-0.12%)
BSE Sensex	20,104.86	-12.52 (-0.06%)

Forex World Currencies Snapshot:

EUR/USD	1.3460	-0.0014 (-0.10%)
USD/JPY	84.1100	-0.1200 (-0.14%)
GBP/USD	1.5838	-0.0015 (-0.09%)
CAD/USD	0.9684	-0.0065 (-0.67%)
USD/HKD	7.7584	+0.0001 (0.00%)
USD/CNY	6.6903	-0.0008 (-0.01%)
AUD/USD	0.9606	-0.0031 (-0.32%)

Tuesday's US Economic Calendar:

7:45 a.m.
Sept. 25 ICSC-Goldman Sachs Chain Store Sales Index, Chain Store Sales Index - WoW (previous -1.4%), Chain Store Sales Index - YoY (previous +3.3%)

8:55 a.m.
Sept. 25 Johnson Redbook Retail Sales Index, MoM % Change (previous -0.4%), 12MonChgPct (previous +2.7%), 52WkChgPct (previous +2.2%)

9:00 a.m.
Jul S&P / Case-Shiller Home Price Index, SP Composite-10 MoM (previous +1%), SP Composite-10 YoY (previous +5%), SP Composite-20 MoM (previous +1%), SP Composite-20 (expected +0.1%), National QoQ (previous +4.4%), National YoY (previous +3.6%)

10:00 a.m.
Sept. Consumer Confidence Index, Consumer Confidence Index (previous 52), Expectation Index (previous 72.5), Present Situation Index (previous 24.9)

10:00 a.m.
Sept. Richmond Fed Business Activity Survey, Manufacturing Index (previous 11), Retail Revenues Index (previous -8), Services Revenue Index (previous -10), Shipments Index (previous 11)

4:30 p.m.
Fed Gov Warsh participates in panel discussion on job creation at the New York Stock Exchange

4:30 p.m.
Atlanta Fed Pres Lockhart speaks on the economy in Sewanee, Tenn.

4:30 p.m.
Sept. 24 API Statistical Bulletin, Crude Stocks (Net Change) (previous +2.23M), Gasoline Stocks (Net Change) (previous +2.42M), Distillate Stocks (Net Change) (previous +2.51M), Refinery Runs (previous 85.4%)

5:00 p.m.
Sept. 26 ABC News Consumer Comfort Index, ABC News Consumer Confidence Index (previous -46)

5:30 p.m.
Federal Reserve Bank of Atlanta- Federal Reserve Bank of Atlanta President Dennis Lockhart speech

Market Summary Monday, Sept. 27, 2010

Stocks:
The US dollar regained some late afternoon ground as U.S. stocks let a brief afternoon rally fizzle. Many investors have become wary of the market's recent low volume ascent. Most of the news was focused on mergers and acquisitions;

Unilever PLC (UL, ULVR.LN), the Anglo-Dutch consumer products giant, said that it has entered into a definitive agreement to acquire Alberto Culver Co. (ACV, ACVA). Southwest Airlines Co. (LUV) announced plans to buy discount rival AirTran Holdings Inc. (AAI) for $1.4 billion. Wal-Mart Stores Inc. (WMT) said it has made a preliminary proposal to buy South African chain Massmart Holdings Inc. (MSM.JO) for 32 billion rand ($4.6 billion) in cash. Harvest Natural Resources Inc. (HNR) put itself up for sale, enlisting the help of Bank of America Corp.'s (BAC) Merrill Lynch to advise it on possible ways to enhance shareholder value. AOL (AOL), the New York-based online media company, is on the verge of acquiring TechCrunch, the online blogging network.

Financial stocks slipped after Moody's Investors Service downgraded the debt of Anglo Irish Bank by three notches because the bank is expected to require further government support. J.P. Morgan Chase & Co. is putting federal regulators on notice that it is going after more than $6 billion in claims it used to buy Washington Mutual Inc.'s banking assets. Investors are also still digesting the impact of new global banking regulations agreed upon in Basel, Switzerland, earlier this month.


Treasurys:
The U.S. sold $36 billion in two-year notes at a record low yield of 0.441% Monday, and Treasurys rallied as investors continued to fret about the health of the global economy and stocked up on low-risk assets. The successful auction served as evidence of the continuing solid demand for low-risk U.S. government debt, as investors, still concerned about the recovery in the U.S. and abroad, continue to pour money into Treasurys. Demand for Treasurys intensified last week after the Federal Reserve highlighted the risk of deflation and signaled it is ready to provide more help to the economy if needed. Many investors are even more persuaded the Fed will launch another large-scale bond-buying program this year, purchasing Treasurys, which has left the government bond market well bid.


Forex:
The US dollar closed higher Monday. The dollar fell before market open Monday to its lowest level against the yen since the Japanese government's massive mid-September intervention in currency markets to stem yen strength. Investors kept their eyes peeled for signs of the Japanese authorities intervening in currency markets after the dollar dipped to Y84.11.  The Yen's strength is simply a function of general dollar weakness,  The dollar's biggest competitor, the euro, shook off most of its earlier losses that came on the heels of concern over the financial state of European banks. The common currency gained to its highest level since April, eclipsing $1.35, before pulling back slightly.