Stock Market Update - Monday, Oct. 25, 2010 - Dollar Drops Commodities and Stocks Gain

Stock Market Update

Monday, Oct. 25, 2010

Latest US Economic News Headlines:

USA EQUITY INDEXES: (OCT. 25, 4:10 PM EDT)
Dow Jones 11,164.05 +31.49 (0.28%)
S&P 500    1,185.62 +2.54 (0.21%)
Nasdaq     2,490.85 +11.46 (0.46%)

Dow Jones 2:30 PM Averages: DJIA 11,200.45 UP 67.89
  30 INDUS     11,200.45 UP   67.89 OR    0.61%
  20 TRANSP     4,789.00 UP   34.03 OR    0.72%
  15 UTILS        406.04 DN    0.79 OR    0.19%
  65 STOCKS     3,888.95 UP   19.25 OR    0.50%

US DOLLAR FUTURES INDEX DXY: OCT. 25, 4:00 PM EDT: 77.14  0.22 (0.29%) 

US COMMODITY PRICES: (OCT. 25, 4:05 PM EDT) 
Crude Oil     82.43     - 0.11%
Natural Gas     3.35     + 0.96%
Gasoline     2.07     - 0.27%
Heating Oil     2.26     -
Gold     1339.86     + 0.91%
Silver     23.62     + 1.50%
Copper     3.85     + 1.53%

US STOCKS ROCK HIGHER - DOLLAR DROPS

 US Stocks closed higher, prompted by a small decline in the dollar and higher Sept. housing sales. The Dow Jones Industrial Index closed at 11,164.05 +31, The S&P 500 index closed up at 1,185.62 +2.54 generated by a rise in materials, and Nasdaq closed up at 2,490.85 +11.46. Stocks rose to a five-and-a-half month high on Monday as a falling dollar, partly driven by expectations of further stimulus by the Federal Reserve, prompted investors to buy riskier assets. 

U.S. stocks opened higher on Monday as a weekend pledge by global finance officials provided some relief for investors eager to avoid a currency war.

In early trading the Dow Jones Industrial Average rose 104 points, to 11232, extending three straight weeks of gains. Entering the month's final week of trading, the Dow is up 3.6% for October, buoyed by hopes that the central bank will take further steps to stimulate the economy at its meeting next week. Alcoa was the measure's strongest performer, up 1.7%.

The Nasdaq Composite gained 0.6% to 2495. The Standard & Poor's 500-share index rose 0.7% to 1191, led by its materials sector.

Stocks rose and the dollar weakened after a meeting of finance ministers from the Group of 20 industrialized and developing nations vowed at a weekend meeting to avoid "competitive devaluation" of their currencies while curbing their external imbalances, in a bid to generate more balanced global economic growth. However, the G-20 didn't announce specific targets for achieving their goal of "rebalancing" the world's economy away from an over-reliance on U.S. consumers buying imported goods.

The U.S. dollar weakened against both the yen and the euro. The euro was trading recently at $1.4019, up from $1.3923 late Friday in New York. The U.S. Dollar Index, which tracks the currency against a basket of six others, fell 0.7%.

Materials and industrials led the Dow on Monday as a weaker dollar boosted companies with more international exports. Alcoa rose 2.4%, while DuPont gained 2.3% and Caterpillar added 1.8%.

Among stocks in focus, Office Depot jumped 9.1% after the office-supply retailer announced that its Chairman and Chief Executive Steve Odland will resign in one week. The company also said it will report a surprise third-quarter profit on Wednesday.

U.S.-listed shares of BP edged up 0.3% after its new Chief Executive Bob Dudley defended the company's response to the Gulf of Mexico oil spill and reaffirmed that BP won't quit its businesses in the U.S. BP will continue to keep drilling in deep water in the Gulf of Mexico, Dudley said.

CommScope, which makes telecom infrastructure equipment, surged 32% after the company confirmed that it was in talks that could lead private-equity firm Carlyle Group to buy it for $31.50 a share.

Among companies reporting earnings, Boyd Gaming added 2.4% after the gambling firm said it won't exercise its right to match the offer MGM Resorts International received for its 50% stake in the Borgata resort in Atlantic City, N.J., and the company's third-quarter profit fell 11%.

RadioShack Corp.'s (RSH) third-quarter profit jumped 23% to top analysts' views as sales improved, but concerns about margins in the retailer's key wireless segment weighed on shares. RadioShack reported a profit of $46 million, or 37 cents a share, up from $37.4 million, or 30 cents a share, a year earlier. RadioShack's gross margin contracted to 45.4% from 47.6%, which it partly attributed to a higher mix of lower-margin handsets in the wireless segment.
 
Shares were recently off 7.8% at $21.02, making the stock the largest decliner in the S&P 1500 retail index. Despite the losses, shares are up by more than a third in the past 12 months..

Texas Instruments was up 1%, while Amgen gained 1.1%. Both companies report quarterly earnings after the market closes on Monday. 

US TREASURYS IN DEMAND

Demand for U.S. Treasurys rose, pushing yield on the 10-year note down to 2.51%. Crude-oil prices rose above $83 a barrel, while gold futures also climbed. The U.S.Treasury will auction $22 billion in four-week bills and $25 billion in 56-day bills this week. 

US CRUDE OIL:

$82.24 per barrel

Nymex Crude Closes Up 76c At $82.45/Bbl

Crude futures traded nearly flat Monday, retreating from above $84 a barrel after a rebound in the dollar.

Light, sweet crude for December delivery settled 83 cents, or 1%, higher at $82.52 a barrel on the New York Mercantile Exchange, after trading as high as $83.28 earlier in the session. Brent crude on the ICE futures exchange settled 58 cents higher at $83.54 a barrel.

Before the open, Crude for December delivery climbed 1.2 percent to $82.65 a barrel, extending a 12 percent rise since September, when expectations spread for the Fed to inject copious amounts of cheap money into the financial system.

Crude oil and fuel inventories hit 27-year highs last month, but some market watchers expect that global stockpiles may have peaked. In addition, China said it imported record levels of oil in September, and demand in India and Latin America remains relatively strong.

US NATURAL GAS:

Futures Close Down 0.6% At $3.312/MMBtu

Natural gas futures fell Monday as high supplies and temperate weather continued to weigh on the market.

Natural gas for November delivery fell 2.7 cents, or 0.8%, to $3.305 a million British thermal units on the New York Mercantile Exchange. The benchmark contract has plunged 33% since the beginning of August, as mild autumn weather reduced demand for the fuel and bloated inventories.

PRECIOUS METALS:

US Gold: 1,3478

US Silver: $23.69

Metals were early winners after the G20 meeting. Gold rose 1.4 percent to $1,345.60 an ounce, creeping closer to its all-time high at $1,387.10 an ounce.

The most actively traded contract, for December delivery, was recently up 0.9%, or $12.30, at $1,337.40 per troy ounce on the Comex division of the New York Mercantile Exchange.

BASE METALS:

US Copper: $3.87

Copper traded on the London Metal Exchange jumped more than 2 percent to $8,549.00 a metric ton, a two-year high, clearing the way for a try at triangle pattern resistance at $8,640.


MUNICIPAL BONDS COMING INTO QUESTION
S&P Cuts AAA Rating For Assured Guaranty's Units

Standard & Poor's cut its triple-A credit rating for Assured Guaranty Ltd. (AGO), the last bond insurer to hold the highest rating, and municipal market analysts said the downgrade will likely undermine Assured's prime business of insuring municipal debt.

Bond-insurance companies pledge to cover the principal and interest payments to bond holders if the debt issuers default. Key to a bond-insurance company's business is its rating, since the insurer effectively lends its rating to lower-rated clients who can then sell debt at cheaper rates.

The most successful bond-insurance companies in the past carried the top credit rating of triple-A. The industry was hit in the fall of 2007 by exposure to complex securities based on the slumping real estate market. Former leaders began to see losses and ratings downgrades, and issuers and investors recoiled.

S&P cut the ratings of Assured Guaranty Corp. and Assured Guaranty Municipal Corp. by one notch to AA+ with a stable outlook, saying the insurance units could "continue to, in the near term, report weak statutory results that could limit statutory surplus growth."

The downgrade comes as the state of the financial-guarantee market--with only Assured issuing new policies--"is symptomatic of investors' and issuers' diminished demand for bond insurance," said S&P analyst David Veno.

Assured was the only one of the so-called legacy bond insurers to retain its triple-A rating from S&P, although it was stripped of that rating by Moody's Investors Service in November 2008. Moody's now rates it as Aa3, the fourth-highest rating. Fitch Ratings in February withdrew its ratings on Assured at the company's request.

Assured Guaranty shares were down 6% at $20.05 in recent trade. Still, the stock is up more than 10% this month. All insured municipal bonds issued this year were backed by Assured, according to Thomson Reuters. In the last quarter, Assured guaranteed about 8% of new municipal debt. In the heyday of the bond insurance industry, about half of all new munis carried guarantees.

Assured's triple-A rating provided comfort, and with the downgrade, municipal issuers will see less savings in the market with the insurance, said some municipal bond analysts..

CHICAGO FED INDEX DIPS ON PRODUCTIVITY

The Federal Reserve Bank of Chicago is signaling a sputtering U.S. economic recovery as its National Activity Index declines to -0.58 in September from -0.49 in August, weighed by faltering industrial production.

IRS FUNDING, FORCED HEALTH-CARE BATTLE

Funding for the Internal Revenue Service could become a battleground in the next Congress as Republicans seek to halt implementation of the new health-care law. GOP candidates are running on a pledge to repeal the new health-care law. 

Some repeal advocates say a strategy of choking off funding to the IRS and federal health agencies is more politically viable. Some Republican members of the House of Representatives have already made clear their intention to target IRS funding. "We have the power of the purse," Rep. Phil Gingrey (R., Ga.) said during a CNN appearance last month.

"Every one of these agencies involved in implementing this new law will need $5 billion to $10 billion of appropriations. We can stop that and we can certainly stop the IRS from hiring," said Gingrey.

"The president's health-care bill vastly expands the responsibilities of the IRS and strengthens its heavy hand in dealing with ordinary taxpayers who play by the rules," said Rep. John Culberson (R., Texas), a member of the appropriations subcommittee that funds IRS and the Treasury Dept.

A spokeswoman said Culberson will also back efforts to restrict funding to the IRS for health care implementation. The Treasury Dept. says the IRS won't be able to provide small business health insurance tax credits if Congress blocks funding for implementing the health care law.

"It's unfortunate that some in Congress want to pursue a plan that would leave millions of small businesses with higher taxes and higher health insurance bills," said Sandra Salstrom, a Treasury Dept. spokeswoman.

The Congressional Budget Office estimated in March the IRS will need from $5 billion to $10 billion over the next ten years to administer subsidies for low and middle-income people to purchase health insurance.

The high end of that estimate, roughly $1 billion a year, would represent an 8% increase over IRS's 2010 budget of $12.1 billion.

In addition, the tax agency is charged with enforcing a new requirement to purchase health insurance that will cover most Americans, and collecting new taxes on drug makers, insurance companies and medical-device makers.

BEFORE THE BELL:

EXISTING HOME SALES ROSE
U.S. EXISTING HOME SALES RISE 10% IN SEPTEMBER TO 4.53 MILLION RATE. 4.1% RISE TO 4.30M RATE EXPECTED. PRIOR RISE REVISED FROM 7.6% TO 7.3%.

In a bright note for the U.S. housing market, existing home sales rose by more than expected in September. Sales of used homes increased by 10.0% to an annual rate of 4.53 million, the National Association of Realtors said Monday. Equity markets were bolstered by data showing that U.S. existing-home-sales increased by a stronger-than-expected 10% in September to a seasonally adjusted annual rate of 4.53 million. .

US Stock Futures Up, Dollar Drops After G-20

The Dow Jones Industrial Average (DJIA) is headed for an opening gain of about 60 points, while the S&P 500 Index (SPX) is trading roughly 7 points above fair value. 

A pledge of agreement by finance officials from the Group of 20 nations to avoid competitive currency devaluations helped lift all of the world's exchanges and the US stock-index futures.

The dollar dropped broadly on Monday, hitting a 15-year low versus the yen. The dollar dropped on Monday after a Group of 20 meeting produced enough agreement despite discordant policies to keep the status quo on the trade of selling the U.S. currency and buying stocks and commodities such as copper.

G-20 Pledges to Avoid Devaluations in Push to Defuse Global Trade Tensions
By Simon Kennedy and Eunkyung Seo - Oct 23, 2010 8:15 AM PT
http://www.bloomberg.com/news/2010-10-23/g-20-pledge-to-avoid-competitive-devaluations-endorse-market-driven-rates.html

The G-20 agreed to “move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies,” finance ministers and central bankers said after talks yesterday in Gyeongju, South Korea. U.S. Treasury Secretary Timothy F. Geithner and Chinese Vice-Premier Wang Qishan may continue the debate today when they meet in Qingdao, China for previously unscheduled talks.

It was the first time the finance officials made a joint stance on exchange rates as they tried to end concern that nations from the U.S. to China are relying on cheap currencies to spur growth, risking a protectionist backlash.

The policy makers delayed further debate over a U.S. proposal for current account targets until next month’s Seoul summit of G-20 members.

IMF Overhaul

The G-20 also agreed to what IMF Managing Director Dominique Strauss-Kahn called the “biggest reform ever” of his institution’s governance. Seeking to increase the role of emerging markets, Europe will surrender two seats on the lender’s 24-member executive board and a majority of countries will shift more than 6 percent of so-called quotas to under- represented countries. Quotas determine voting rights, financial commitment and access to aid.

A current account is the broadest measure of trade because it includes investment and transfer income, and it would be hard to achieve any correction in one without a currency shifting. Saudi Arabia, Germany, Russia and China all run surpluses larger than 4 percent of gross domestic product, while Turkey and South Africa have deficits bigger than that, according to the IMF.

The G-20 has long attempted to narrow such imbalances and pivot the world economy away from its reliance on excess U.S. demand and Chinese savings after those fault lines helped trigger the credit crisis. Limiting talks to foreign exchange is too inflexible for nations with trade surpluses and refocusing them on current accounts would allow tools other than currencies to be used, officials said.

WTO With US On China Import Duty

The U.S. claimed a major victory over China on Friday in an escalating dispute over trade, saying the World Trade Organization has backed its right to impose duties on Chinese imports that are being dumped or subsidized.

The U.S., which has penalized dozens of Chinese products with countervailing and anti-dumping duties over the past couple of years, said a WTO dispute settlement panel agreed that such trade remedies could be used against non-market economies like China.

7 US BANKS FAILED FRIDAY
There were 7 more banking failures last week, resulting in a total of 139 failures for 2010. The 2010 cost to the FDIC now totals $21.2B.

The US Government FDIC regulators closed seven US Banks late Friday and seized all assets.

First Arizona Savings, A FSB, Scottsdale, AZ., Oct.22, 2010
Hillcrest Bank, Overland Park, KS., October 22, 2010
First Suburban National Bank, Maywood, IL., October 22, 2010
The First National Bank of Barnesville, Barnesville, GA., Oct. 22, 2010
The Gordon Bank, Gordon, GA., October 22, 2010
Progress Bank of Florida, Tampa, FL., October 22, 2010
First Bank of Jacksonville, Jacksonville, FL., October 22, 2010

To see the complete list of failed banks and credit unions visit:

Online Consultancy Network™ Bank Failure List

http://ocnww.blogspot.com/2010/09/bank-failure-list-update-september-1.html

Equities Week Ahead:

The flood of third-quarter earnings reports continues next week, with six components of the Dow Jones Industrial Average and one-third of the companies in the Standard & Poor's 500 Index posting results.

Figures on new- and existing-home sales in September will be released next week, and the government will issue its first reading on third-quarter gross domestic product.

Finance ministers and central bank governors from the Group of 20 nations are meeting through Saturday amid an acrimonious global debate over currencies.

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Canadian Market:

CANADIAN STOCKS HIGHER
 Toronto's main stock index rose to its highest level in more than a week on Monday morning as commodities prices were bolstered by a declining U.S. currency.

Toronto's main stock index ended higher for a second straight session on Monday as commodity prices got a boost from a weak U.S. dollar, which fell on expectations the U.S. Federal Reserve would engage in further monetary easing.

The Toronto Stock Exchange's S&P/TSX composite index closed up 62.40 points, or 0.50 percent, at 12,663.58.

The stock market was higher at midday Monday, as a gain in the price of gold helped lift gold stocks.

At 11:45 a.m. EDT (1545 GMT), the S&P/TSX Composite Index was up 41.63 points, or 0.33%, at 12642.72. Advances led declines 857 to 563. Trading volume was 194.10 million shares. The S&P/TSX 60 Index was up 1.38 points, or 0.19%, at 727.28.

Resources, which are largely priced in U.S. dollars, surged on a selloff in the greenback after this past weekend's Group of 20 leaders meeting in South Korea produced few firm policy initiatives.

At 10:05 a.m. (1405 GMT), the Toronto Stock Exchange's S&P/TSX composite index .GSPTSE was up 75.80 points, or 0.6 percent, at 12,676.98, holding gains after data showed U.S. existing home sales rose by a better-than-expected 10 percent in September.

All 10 of the index's main sectors were higher, led by a 1.1 percent advance in the heavily weighted materials group

Teck Resources (TCKb.TO) jumped 2.3 percent to C$46.52, while Suncor Energy (SU.TO) rose 0.93 percent to C$33.81. Canadian Natural Resources (CNQ.TO) advanced 1.2 percent to C$37.12, and Goldcorp (G.TO) pushed up 0.95 percent to C$43.60.Copper miner Equinox Minerals (EQN.TO) gained 3.8 percent to C$6 after it said it would buy Australian-listed Citadel Resource Group for $1.23 billion. The deal could give Equinox the same copper output as BHP Billiton's Olympic Dam mine, the world's fourth-largest deposit.

Toronto Indexes, Volume; 10 AM EDT Composite Up 82.79
 S&P/TSX Composite   12678.99  up   82.79  or 0.7%
 S&P/TSX 60 Index      730.23  up    4.33  or 0.6%
 Financials            180.62  up    0.45  or 0.2%
 Materials             399.57  up    4.66  or 1.2%
 Energy                291.94  up    2.81  or 1.0%
 Industrials           109.06  up    0.42  or 0.4%
 IT                     28.61  up    0.06  or 0.2%

   Volume             Monday    Friday
   9:30-10           74.7M     56.2M


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South American Markets:

BRAZIL:

Brazil Stocks Higher

Brazilian share prices opened higher Monday as risk appetite recovered on the open-ended compromise struck at the Group of 20 nations meeting in South Korea and expectations that the U.S. will introduce new stimulus measures to increase credit availability.

Brazil's benchmark Ibovespa stock index opened at 69,535 points, marginally higher than Friday's close of 69,529 points. Within minutes of opening, the index rose further to 70,230 points.


Brazilian traders shrugged off some negative local data, with analysts surveyed by the Brazilian Central Bank raising their forecast for 2010 IPCA consumer inflation to 5.27% from the previous forecast of 5.20%, and a broadening of the current account deficit for September.

Commodities-related stocks were boosted by rising commodities and oil prices in international markets, bolstered by the weaker U.S. dollar.

Oil giant Petroleo Brasileiro SA (PBR, PETR4.BR) rose 1.49% to 24.57 Brazilian reals ($14.45). UBS upgraded the company's ordinary stock, saying it sees little change in the company's prospects as a result of the conclusion of Brazil's presidential election Oct. 31.

Miner Vale SA (VALE, VALE5.BR) rose 1.47% to BRL48.95.       Steelmaker Cia. Siderurgica Nacional SA (SID, CSNa3.BR) rose  0.78% to BRL28.60.

Airline TAM (TAMM4) slipped 0.40% to BRL40.07.




MEXICO:

Mexico Stocks and Peso Rise Up

Mexican stocks were chugging higher early Monday, in tandem with U.S. market gains, at the start of the final week of third quarter earnings results and ahead of reports from several Mexican heavyweights.

At 10:30 a.m. ET, the IPC index of Mexico's 35 most-traded shares was up 0.8% to 35400 on volume of 722 million pesos ($58.6 million). At that rate, the IPC is on track to top Friday's record close of 35121.

Among Mexican blue chips, the L shares for wireless communications firm and market benchmark America Movil (AMX), which is due to report Wednesday, were adding 1.3% to MXN36 and the CPOs for global cement maker Cemex (CX) were 0.9% higher at MXN10.25.

America Movil is expected to report big gains in its third-quarter earnings as the company consolidates results of other telecom companies also controlled by Mexican billionaire Carlos Slim. America Movil will probably report revenue of MXN155.46 billion compared with MXN99.8 billion in the third quarter of 2009, according to the median estimate of six equities analysts consulted by Dow Jones. Net profit is seen at MXN25.47 billion compared with MXN18.68 billion.

Cemex, which is scheduled to report before the market opens Tuesday, is expected to have faced a difficult third quarter as economic recoveries in its main markets trickled slowly into construction sectors. Cemex probably registered sales of $3.79 billion, according to the median estimate of six equities analysts consulted by Dow Jones Newswires. That would be down from $4.2 billion a year earlier, before Cemex sold its Australian operations to global competitor Holcim Ltd (HOLN.VX) for $1.7 billion to pay down debt.

Cemex's operating cash flow measured by earnings before interest, taxes, depreciation and amortization, or Ebitda, is expected to have fallen to $711 million from $806 million in the third quarter of 2009, and several analysts expect the company will lower its full-year Ebitda estimate from the current $2.65 billion.

Cemex's net result is expected to be a small $14 million profit, according to the median estimate of the six analysts.

The A shares for industrial conglomerate Alfa SAB (ALFA.MX) were up 0.5% to MXN98.44 after the company said early Monday it has agreed to buy three petrochemical plants in the U.S. from Eastman Chemical Co. (EMN) for about $600 million.

Mexico's peso was also stronger after the G-20 agreed to avoid competitive currency devaluations, prompting investors to buy into emerging markets and weakening the dollar. The peso was trading at 12.2955 to the dollar early Monday, compared with MXN12.3490 at the close Friday and below the key MXN12.30 level.

CHILE:
The Chilean peso rose against the dollar. The peso was recently stronger at CLP486.30 to the dollar, versus Friday's close of CLP486.90.

The peso recently trading at 29-month highs versus the dollar. As Chile quickly recovers from last year's recession, its first in a decade, and February's devastating earthquake, the central bank has begun withdrawing its monetary stimulus, bringing the rate to 2.75% over the last five months from a record low 0.5%. The Andean nation is expected to see 5% to 5.5% gross domestic product growth this year, compared to 2009..

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European Markets:

European stocks ended higher Monday, with shares of luxury-goods firms LVMH Moet Hennessy Louis Vuitton and Hermes International both rallying on deal news, while miners gained in London as gold soared.

The Stoxx Europe 600 index advanced 0.3% to close at 267.42. The index rose 0.4% last week.

The euro rose 0.8 percent to $1.4058, having risen 9.6 percent since September. A convincing move above $1.4050 means the market will next want to target the 9-month high reached last Friday, at $1.4160.

European Union foreign policy chief Baroness Ashton was asked by ministers Monday to explore a softening in ties with Cuba following its recent release of dissidents and economic reforms, a diplomat said.

Ashton was given a mandate by foreign ministers of the 27-nation bloc meeting in Luxembourg "to explore ways to try and progress" in relations with Cuba, the diplomat said.

GERMANY:

The German DAX 30 index rose 0.5% to finish at 6,639.21
In Germany, shares of automotive giant Volkswagen AG rose 6.8% after the group released earnings ahead of schedule Friday.

Volkswagen tripled its year-to-date profit, citing strong demand for passenger cars, but urged caution over the fourth quarter.

FRANCE:

The Paris CAC-40 index settled little changed at 3,870, a gain of 1.46 points. French luxury-goods makers were also in the spotlight, with shares of Hermes International jumping 15%.. 

French strikes and fuel shortages eat into economy

Fuel shortages persisted at petrol pumps across France on Monday and the government said strikes against an unpopular pension reform were costing 200-400 million euros per day in lost production.
_____________________________________________________________________
Asian Pacific Markets:

After the G20, dealers were keen also to add to their bets on additional strength in emerging Asian stocks and currencies. Many policymakers believe have to be allowed to rise as part of a recipe for fixing global economic imbalances.

The region has been a magnet for capital flows and will probably continue to see these flows of money push up domestic currencies.

"The sharp drop in U.S. yields alongside robust Asian fundamentals is fuelling large equity, fixed income and speculative currency inflows into Asian economies. The prospect of the Fed embarking on Fed QE2 in November suggests these FX flows are unlikely to reverse meaningfully any time soon," Credit Suisse currency strategists said in a note.

7.5 Earthquake & Tidal Wave Warning
Earthquake monitoring agencies issued a tsunami warning on Monday after a powerful tremor measuring more than 7 on the Richter scale under the sea off the west coast of Indonesia's Sumatra island.

USGS Reports a 7.5 earthquake hits Padang, Sumatra, Indonesia

http://earthquake.usgs.gov/earthquakes/recenteqsww/Maps/region/Australia.php

CHINA:

CHINA'S UNEXPECTED RATE INCREASE
China's quarter-point increase caught most economists off guard.

JAPAN:

Japan's Nikkei share average declined, slipping 0.3 percent (Osaka: N225) on cautiousness about how the yen's strength would impact corporate results ahead of the earnings season.

Japanese exports slowed for a seventh consecutive month in September, stung by yen strength and slowing overseas demand.

SOUTH KOREA:

The dollar fell 0.9 percent against the South Korean won. The won's broad trade-weighted exchange rate is roughly 13 percent below its 10-year average, Bank for International Settlements data showed, partially the result of repeated intervention by the Bank of Korea.

AUSTRALIA:

Shares of Australia's ASX (ASX:ASX.AX) Rose up 19% percent higher after Singapore Exchange (SES:SGXL.SI) said it wanted to buy Asia's third-largest exchange for $8.3 billion. The deal would create the fifth-largest exchange in the world..

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WORLD FOREX CURRENCIES SNAPSHOT:
(MONDAY, OCT 25, 2010 4:10 PM EDT)

EUR/USD     1.3976     +0.0048 (0.34%)
USD/JPY     80.8800     -0.5000 (-0.61%)
GBP/USD     1.5746     +0.0078 (0.50%)
CAD/USD     0.9818     +0.0083 (0.85%)
USD/HKD     7.7583     -0.0038 (-0.05%)
USD/CNY     6.6579     -0.0004 (-0.01%)
AUD/USD     0.9924     +0.0124 (1.26%)

WORLD MARKETS SNAPSHOT:
(MONDAY, OCT 25, 2010 4:10 PM EDT)
Shanghai     3,051.42     +76.38 (2.57%)
Nikkei 225     9,401.16     -25.55 (-0.27%)
Hang Seng Index     23,627.91     +110.37 (0.47%)
TSEC     8,306.98     +138.92 (1.70%)
FTSE 100     5,751.98     +10.61 (0.18%)
DJ EURO STOXX 50     2,871.48     -2.26 (-0.08%)
CAC 40     3,870.00     +1.46 (0.04%)
S&P TSX     12,663.58     +62.40 (0.50%)
S&P/ASX 200     4,710.00     +61.80 (1.33%)
BSE Sensex     20,303.12     +137.26 (0.68%)


MONDAY'S U.S. ECONOMIC CALENDAR:

8:30 a.m.
Sept. Chicago Fed National Activity Index National Activity Index (previous -0.53), 3 Month Moving Average (previous -0.42)

10:00 a.m.
Sept. Existing Home Sales Total Sales (previous 4.13M), Percent Change (previous +7.6%), Month's Supply (previous 11.6)

10:30 a.m.
Oct Texas Manufacturing Outlook Survey Business Activity Index (previous -17.7), Manufacturing Production Index (previous 4)

10:30 a.m.
New York Fed Pres Dudley visits local company in Ithaca, N.Y.

1:30 p.m.
Federal Reserve Bank of St. Louis Pres James Bullard welcoming remarks at Federal Reserve Bank of St. Louis event

4:30 p.m.
New York Fed President William Dudley speech on the state of the regional economy 




US STOCK MARKET SUMMARY, FRIDAY, OCT. 23, 2010:

Stocks:

US stocks finished mixed. The Dow Jones industrial average .DJI slipped 31.04 points, or 0.28 percent, to 11,115.53. The Standard & Poor's 500 Index .SPX rose 0.68 point, or 0.06 percent, to 1,180.94. The Nasdaq Composite Index .IXIC added 16.63 points, or 0.68 percent, to 2,476.30.

Technology shares advanced on Friday after positive earnings from Baidu Inc (BIDU.O) and SanDisk (SNDK.O) helped push the S&P 500 and Nasdaq toward a third straight week of gains.Technology led gains in the recent rally. The Nasdaq is up 17 percent since the end of August compared with the S&P 500, which is up 12.6 percent.

The S&P 500 sent a bullish signal as the index's 50-day moving average crossed above its 200-day moving average, known as a golden cross. That upward momentum indicator last occurred in June 2009, and the benchmark index rose more than 35 percent in the following 10 months. Investors were alert for news from the G20, with the dollar poised to fall further to continue a five-week losing streak against major currencies.

Treasurys:

Treasury prices fell as some investors cashed out of bets the Federal Reserve will buy government bonds on a large scale and braced for next week's $109 billion new debt supply."We're getting the sense that investors are lightening up on Treasurys ahead of the Fed meeting" in early November, said Nick Brophy, head of North America rates trading at Citigroup Global Markets.

Forex:

The dollar erased early losses against most of its major rivals as investors took a cautious stance ahead of weekend meetings of the G-20. While no binding agreement is expected, investors moved modestly toward the safe-harbor dollar. "As we've seen in G-20s past, there's always a lot of hype leading up to it, and rarely any result," said Brendan McGrath, at Custom House, a currency services firm.



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