Stock Market Update - Monday, October 18, 2010 Cautious Upward Trend
Stock Market Update
Monday, October 18, 2010
Latest US Economic News Headlines:
USA EQUITY INDEXES: (OCT. 18, 4:00 PM EDT)
Dow Jones 11,143.76 +80.98 (0.73%)
S&P 500 1,184.69 +8.50 (0.72%)
Nasdaq 2,480.66 +11.89 (0.48%)
Dow Jones CLOSING Averages: DJIA 11,143.69 UP 80.91
30 INDUS 11,143.69 UP 80.91 OR 0.73%
20 TRANSP 4,713.00 UP 18.22 OR 0.39%
15 UTILS 410.37 UP 4.14 OR 1.02%
65 STOCKS 3,867.45 UP 26.12 OR 0.68%
US Stock Trading Activity 4:00 p.m. EDT
Advancing Declining
NYSE 722,157,654 264,888,942
AMEX 8,382,403 7,216,773
NASDAQ 924,033,807 785,765,615
US DOLLAR FUTURES INDEX DXY: OCT 18, 4:05PM EDT: 76.96
0.03 (0.04%)US COMMODITY PRICES: (OCT. 18, 4:00 PM EDT)
Crude Oil 83.20 + 0.14%
Natural Gas 3.42 - 0.38%
Gasoline 2.15 -
Heating Oil 2.28 -
Gold 1374.47 + 0.36%
Silver 24.46 + 0.70%
Copper 3.85 + 0.42%
US Stocks Gain; Financials Climb While Energy and Materials Rise Against the Dollar's Movements
US stocks climbed Monday, boosted by earnings from Citigroup and a measure of home-builder confidence that topped expectations.
In early trading, U.S. stocks wavered between small gains and losses Monday morning as investors were disappointed by weaker-than-expected industrial production data, but a strong earnings report from Citigroup lifted the financial sector. The US Dollar surrendered most of its earlier gains against rivals on U.S. data.
The Dow Jones Industrial Average was up 59 points. The Nasdaq Composite gained 1 point., while the Standard & Poor's 500 index edged up 3.6% to 1179. The materials and energy sectors led to the downside while financials gained. Oil futures near $83 a barrel on improving hopes for the broader economy.
Precious metals also increased as the dollar relaxed during the days trades.The most actively traded gold contract, for December delivery, was recently down during morning trades 0.4%, or $5.90, at $1,366.10 per troy ounce on the Comex division of the New York Mercantile Exchange..
The National Association of Home Builders (NAHB), said its housing market index rose three points to 16 in October, the first improvement in the index in five months. The index measures builder confidence for sales prospects of new, single-family homes.
The measure's October increase shows "the new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer," NAHB chief economist David Crowe said in a statement.
The NAHB report boosted expectations for other key housing-market data due Tuesday on housing starts and building permits. The housing construction will be slow to recover after the end of a home buyers' tax credit and as foreclosures flood the resale market. However US homebuilder confidence rose to four-month high in the report this morning.
The U.S. industrial production slipped 0.2% in September, reflecting a slowdown in what was a primary driver of growth out of the recession. Capacity utilization also slipped, falling slightly to 74.7% in September from a revised 74.8% the previous month. The numbers missed expectations, with economists having forecast a 0.2% rise in output and capacity utilization level of 74.8%.
However, the financial sector was boosted by a 2.8% increase in Citigroup shares. The bank's third-quarter earnings soared, with per-share profit coming in just above analysts' estimates as the amount the company set aside for credit losses fell.
Monday marks the start of the first "peak" week of the third-quarter reporting season, with 11 of the 30 Dow Jones Industrial Average components and more than a fifth of S&P 500 companies reporting. Other bellwethers due to report Monday include Apple and International Business Machines, both scheduled for release after the close. Ahead of those reports, Apple edged up 1% and IBM eked out a gain of 0.6%.
The dollar strengthened overnight for a second-straight day as traders shied away from bets that further easing by the Federal Reserve would continue to punish the U.S. currency. The dollar has weakened in recent weeks while stocks have rallied on expectations for the Fed to move to prop up the economy, but investors are now growing doubtful over how much longer the dollar can slump and stocks can climb on that expectation.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, rose 0.2% in early trading. Treasurys also climbed, pushing the yield on the 10-year note down to 2.52%. Crude-oil futures edged higher while gold futures slipped.
Apple Earnings on Tap
Apple's shares stand at a record high after breaking through the $300 mark.
Analysts expect fourth-quarter earnings to showcase Apple's powerful one-two punch of the iPhone and the iPad, although some still question whether, with a plethora of rival products set to hit store shelves, Wall Street can justify Apple's stratospheric valuation.
The shares of the second largest corporation in the S&P 500 jumped more than 4 percent on Friday as anticipation mounted ahead of Monday's report.
In deal activity, St. Jude Medical agreed to acquire AGA Medical in a cash-and-stock deal valued at about $1.08 billion. St. Jude said the acquisition is "highly complementary" to the medical-device maker's heart and vascular business and will allow it to extend its product reach into new areas. The deal values AGA at a 41% premium to Friday's closing price and includes the assumption of about $225 million in AGA's debt. AGA shares surged 41% while St. Jude slipped 0.1%.
Northeast Utilities agreed to buy fellow New England utility company Nstar for $4.3 billion in stock, forming what the two companies said will be one of the country's biggest utilities. The terms value Nstar at a 1.9% premium to Friday's closing price. Northeast shed 0.1% while Nstar edged up 0.3%.
Among other stocks in focus, Halliburton fell 4.2%. The oilfield-services company's third-quarter profit doubled as its North American markets continued to rebound, but the earnings missed analysts' expectations.
COMPANIES READY BOND OFFERINGS AS RATES STAY LOW
J.P. Morgan Chase, Wal-Mart Stores, CSX and Great River Energy preparing bond offerings as financing costs remain close to historically low levels.
US INDUSTRIAL PRODUCTION DIPS 0.2%
U.S. industrial output slips in September, reflecting a slowdown in what was a primary driver of growth out of the recession. Capacity utilization falls slightly to 74.7%, Economists were looking for production to rise 0.2% with an operating rate of 74.8%.
CITIGROUP PROFIT SOARS AS CREDIT LOSSES DECLINE
Banking giant's 3Q profit jumps to $2.17 billion, or 7c a share, topping estimates by a penny, although revenue dips 10% to $20.74 billion. Credit-loss provisions fall to $5.92 billion from $9.1 billion a year ago and $6.67 billion in 2Q. Shares are up 1%.
HALLIBURTON PROFIT SOARS AS MARKET CONTINUES REBOUND
Halliburton's 3Q earnings doubles to $544 million, or 60c a share, as the oilfield-services saw its North American markets continue to rebound. However, the result missed analysts' expectations and shares are down 5%.
NORTHEAST UTILITIES TO BUY NSTAR FOR $4.3B IN STOCK
Northeast Utilities will buy fellow New England utility company Nstar, with Nstar shareholders getting 1.312 shares of Northeast for each share of Nstar. Deal values Nstar at $40.28 a share, a 1.9% premium to Friday's close.
CHINA NET BUYER $21.7B OF US TREASURYS
China remains a net buyer of U.S. Treasurys for a second straight month, rising by $21.7 billion to $868.4 billion in August, amid overall inflows into long-term U.S. assets, the Treasury Department says
RARE EARTH ELEMENTS MAKING THE NEWS - AGAIN
Emerging in Rare Earth Elements Race
The 17 elements that are classified as "rare earth" are becoming an increasingly important part of our daily lives. Rare earth metals are the life blood of modern computers, batteries and alternative energies.
For example, there are nearly ten pounds of the rare earth element, lanthanum, in every Toyota Prius engine. In addition, rare earth elements are vital to military technology.
Contrary to the name, rare earth metals aren't particularly rare and can be found in most any continent. In recent weeks the US government has made important steps to increase production of these metals, as they will play an important part in President Obama's overhaul of U.S. energy.
Bedford Report examines the emerging Rare Earth Elements Industry and provides research reports on Colorado-based Molycorp, Inc.(MCP 31.30, +3.05, +10.80%) and Rare Element Resources (REE 9.61, +1.96, +25.62%).
Access to the full company reports can be found at:
www.bedfordreport.com/2010-10-MCP
www.bedfordreport.com/2010-10-REE
Also, quietly preparing to build up into production phase on the Ontario exchange and the US BB-OTC exchange is Sarissa Resources, Inc. (SRSR 0.0255, +0.0012, +05.37%) Sarissa is a junior mineral exploration company that has reported to have the 2nd largest deposit of high grade niobium in the world. With a preliminary ore body containing 20 million tons of 0.47% Nb2O5 material in northern Ontario.
Earlier this month, the US House of Representatives passed the Rare Earths and Critical Materials Revitalization Act of 2010, which supports the discovery and development of rare earth sites inside of the United States.
The hope is that the bill will re-establish the US as a leading producer of the 17 rare earth elements. According to recent statistics posted in Reuters, China accounts for as much as 95 percent of global production of rare earth metals. According to Kathy Dahlkemper, the author of the Rare Earth bill, "We need to act now to begin the process of creating our own supply of rare earth materials so the United States is never dependent on China for crucial components for our national security.".
BEFORE THE BELL:
US stock futures remained under pressure Monday, but trimmed losses after stronger-than-expected third-quarter earnings results from Citigroup who posted second-quarter earnings of $2.2 billion Monday, marking its third straight quarterly profit and beating Wall Street expectations.
Equities Week Ahead:
More than a third of the Dow Jones Industrial Average components and more than a fifth of the companies in the Standard & Poor's 500 Index will report quarterly results next week. International Business Machines Corp. (IBM), which reports their earnings after the market close on Monday, kicks off what is expected to be a mixed third-quarter earnings reporting season for major U.S. companies. Johnson & Johnson (JNJ) reports earning Tuesday .
Analysts expect mostly better third-quarter results from major U.S. banks, many of which release third-quarter results next week. A steep decline in trading activity is expected to depress profits at the biggest U.S. investment banks: Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), which report results Tuesday and Wednesday, respectively. Citigroup Inc. (C) reports Monday, followed by Bank of America Corp. (BAC) on Tuesday and Wells Fargo & Co. (WFC) on Wednesday. Also reporting are Yahoo Inc. (YHOO), on Tuesday, and eBay Inc. (EBAY), on Wednesday. Delta Air Lines Inc. (DAL), American Airlines' parent AMR Corp. (AMR) and US Airways Group Inc. (LCC) all report Wednesday and United Continental Holdings Inc. (UAL) and Southwest Airlines Co. (LUV) a day later. Amazon.com Inc. (AMZN), on Thursday. AT&T Inc. (T) and Verizon Communications Inc. (VZ) report Thursday and Friday, respectively.
Additional economic indicators being reported early this week include; foreign acquisition of long-term US securities, US Agency Debt (previous +17.3B), US Corp Bonds figures, September Industrial Production (previous +0.2%), Capacity Utilization, the October NAHB Housing Market Index, and the September housing starts, to be released Tuesday, are expected to show declines from August.
Conferences:
Among the significant conferences next week are the Consumer Electronics Association Industry Forum from Sunday through next Friday in San Francisco; Digital Hollywood Fall Conference from Monday through Thursday in Santa Monica, Calif.; William Blair & Co. Private Equity Conference on Tuesday and Wednesday in Chicago; and BioCentury's NewsMakers in the Biotech Industry Conference next Friday in New York.
US Dollar Tipping Point - Equities Near Peak
Late Friday I posted the US Dollar's two year index chart for UUP, showing a near-term bottom. I also noted the market was approaching levels above the 13 day moving average, where it typically corrected from during this rally. There is still a small amount of room for the indexes to move to the upside, about 0.3%-0.7% percent. Economy and equities watcher John Williams also warns of "Severe And Violent Sell-Off In Stocks" is close to happening.
With little in the way of new economic data this week, most market participants are focused on QE reports. Markets have allowed corporate earnings to provide a disguising shadow over the underlying economic weakness that prevails in the US, but growing international tensions being reported daily, I remain cautious in my uptrend indicator.
Monday morning, we will hear Industrial Production and Capacity Utilization numbers, which together is unlikely to show much improvement especially when you a look at where we are now versus, where we have come from, and where it appears, we are headed.
Technical and market action indications are starting to change. Current market valuations are heavily influenced by the value of the US dollar. When reviewing key reference support levels for a clue of market direction, and whether to expect further upside potential, I see a number of conflicting factors.
Most market technicians are aware that, when you have an intraday chart making a series of lower lows throughout the day, it is both sensible and predictable to expect a 180 degree turnaround in the closing hour, and a melt up into the close. We have been watching that index volatility and pattern over the past week. The other major influence is the very near-term one-year low on the US dollar. That in itself, also suggests a potential market turning point this week.
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Canadian Market:
TORONTO:
Toronto Stocks Higher
The stock market was higher Monday, boosted by positive earnings and economic data out of the U.S., though weak golds restrained gains.
At the market close the S&P/TSX Composite Index rose 58.94 points, or 0.47%, to 12668.01. Advances beat declines 933 to 686. Trading volume was 372.4 million shares, down from Friday's total of 479.1 million shares. The S&P/TSX 60 Index closed up 3.43 points, or 0.47%, to 731.51 .
At 11:45 a.m. EDT (1545 GMT), the S&P/TSX Composite Index was up 15.31 points, or 0.12%, at 12624.38. Advances led declines 740 to 640. Trading volume was 167.0 million shares. The S&P/TSX 60 Index was up 0.66 point, or 0.09%, to 728.74
The Canadian dollar ended slightly lower Monday, under performing other major currencies against the U.S. dollar in cautious trading ahead of the Bank of Canada's interest rate announcement Tuesday morning.
The U.S. dollar was at C$1.0143 at 3:44 p.m. EDT (1944 GMT), from C$1.0216 at 8:00 a.m. EDT (1200 GMT) and C$1.0132 late Friday.
The U.S. reached C$1.0229 in morning trading, its highest level since Oct. 8, according to CQG.
The Canadian dollar sold off early in the session as commodities and other risky assets retreated. It recovered somewhat as they rebounded, but continued to underperform the euro and key rivals such as the Australian and New Zealand dollars.
The Bank of Canada is widely expected to hold its key overnight target rate steady at its 9:00 a.m. EDT (1300 GMT) policy announcement Tuesday, but there is some uncertainty about the tone of the Bank's policy statement.
Toronto Indexes, Volume; 3 PM EDT Composite Up 48.55
S&P/TSX Composite 12657.62 up 48.55 or 0.4%
S&P/TSX 60 Index 730.72 up 2.64 or 0.4%
Financials 180.08 up 1.64 or 0.9%
Materials 401.42 off 1.85 or 0.5%
Energy 293.42 up 0.91 or 0.3%
Industrials 107.77 up 0.32 or 0.3%
IT 28.35 up 0.04 or 0.1%
Volume Monday Friday
2-3 43.4M 51.4M
9:30-3 302.7M 394.6.
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South American Markets:
BRAZIL:
Brazil Stocks Open Lower On Market Caution, Dollar Rebound
Brazil stocks opened lower Monday as investors turned cautious and the U.S. dollar firmed, hitting the commodities prices that underpin the local market. The benchmark Ibovespa stocks index slipped 0.5% to 71,477 points, down from 71,830 points Friday.
A recent rally in global equities markets ran out of steam to start Monday's session, analysts said. Investors were "tired" after a series of better-than-expected third-quarter earnings reports and expectations for stimulus measures from the U.S. Federal Reserve.
Shares of mining giant Vale SA (VALE, VALE5.BR) were flat at 47.80 Brazilian reals ($28.51). Vale said earlier Monday that it had produced 227.5 million metric tons of iron ore in the first nine months of the year, up 30% from the same period of 2009.
Shares of state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, were sharply lower, falling 1.0% to BRL26.03. Independent driller OGX Petroleo e Participacoes (OGXP3.BR) also declined 1.0% to BRL23.05.
Steelmakers were also broadly lower. Shares of integrated steelmaker CSN (SID) slid 0.6% to BRL28.65, while flat steel maker Usiminas (USIM5.BR) was 0.6% lower at BRL21.47. Long steel giant Gerdau (GGB) was down 0.4% to BRL21.66.
Banking shares were also lower after Spanish bank Santander announced the sale of $2.72 billion in convertible paper to Qatar Holding. The deal represents about a 5% stake in Brazilian unit Banco Santander (SANB11.BR) at BRL23.75 per share. Santander shares slid 1.2% to BRL24.58.
Banco Bradesco (BBD, BBDC4.BR) tumbled 1.1% to BRL35.43, while Banco do Brasil (BBAS3.BR) sank 1.8% to BRL34.18. Itau Unibanco (ITUB, ITUB4.BR) was off 1.5% to BRL42.13.
MEXICO:
Mexico's Stocks Open Higher
The Mexico market opened higher Monday, in line with U.S. market gains, as shares in media group Televisa (TV) charged ahead on news that the company won't be making a substantial telephony investment.
At 10:30 a.m. EDT, the IPC index of Mexico's 35 most-traded shares was up 0.3% at 34827 on volume of 527.6 million pesos ($42.5 million). At the same time, the Dow Jones Industrial Average was adding 0.4% to 11109 points.
Among Mexican blue chips Monday morning, wireless carrier and market benchmark America Movil's (AMX) L shares were advancing 0.3% to MXN35.17, grocer Chedraui's (CHDRAUI.MX) B shares were gaining 1.4% to MXN37.44 and Televisa's CPOs were up 1.7% to MXN55.60.
Also early Monday, Televisa and communications firm NII Holdings Inc. (NIHD) said they have agreed to terminate an accord under which Televisa planned to take a 30% stake in NII's Nextel Mexico unit for $1.44 billion. The disintegration of the deal had been rumored for several days.
The peso, meanwhile, was advancing slightly against the dollar in early trade Monday, at MXN12.4285 compared with MXN12.4385 at the close Friday.
At 10:30 a.m. EDT, the IPC index of Mexico's 35 most-traded shares was up 0.3% at 34827 on volume of 527.6 million pesos ($42.5 million). At the same time, the Dow Jones Industrial Average was adding 0.4% to 11109 points.
Among Mexican blue chips Monday morning, wireless carrier and market benchmark America Movil's (AMX) L shares were advancing 0.3% to MXN35.17, grocer Chedraui's (CHDRAUI.MX) B shares were gaining 1.4% to MXN37.44 and Televisa's CPOs were up 1.7% to MXN55.60.
Also early Monday, Televisa and communications firm NII Holdings Inc. (NIHD) said they have agreed to terminate an accord under which Televisa planned to take a 30% stake in NII's Nextel Mexico unit for $1.44 billion. The disintegration of the deal had been rumored for several days.
The peso, meanwhile, was advancing slightly against the dollar in early trade Monday, at MXN12.4285 compared with MXN12.4385 at the close Friday.
VENEZUELA:
Russia and Venezuela Sign Energy Pact
Russia is to build a nuclear power plant in Venezuela as part of a series of energy deals between the countries.
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European Markets:
European stocks ended higher Monday, with banks helping to lead gains after Royal Bank of Canada made an offer for BlueBay Asset Management, offsetting a weaker tone in the mining sector. The Europe Stoxx 600 index rose 0.3% to close at 266.64, after gaining 0.1% on Friday.
The U.K.'s FTSE 100 index rose 0.7% to end at 5,742.52, as the benchmark overcame persistent pressure from the mining sector. Lloyds Banking Group rose 2.9% after Goldman Sachs reportedly boosted its price target for the bank to 109 pence from 106 pence.
Earnings will kick off in earnest for European markets next week with key reports due from Philips, Nokia and Credit Suisse, while a spending plan from the U.K. will take the macro spotlight.
Eurostar says there will be no services between the UK and Brussels on Monday because of industrial action set to hit Belgium's rail network.
GERMANY:
The main German DAX 30 index rose 0.4% to close at 6,516.63.
Shares of K+S AG rose 0.8% after Norbert Steiner, its chief executive officer, reportedly told Frankfurter Allgemeine Zeitung that the company would consider any takeover offer.
The U.K.'s FTSE 100 index rose 0.7% to end at 5,742.52, as the benchmark overcame persistent pressure from the mining sector. Lloyds Banking Group rose 2.9% after Goldman Sachs reportedly boosted its price target for the bank to 109 pence from 106 pence.
Earnings will kick off in earnest for European markets next week with key reports due from Philips, Nokia and Credit Suisse, while a spending plan from the U.K. will take the macro spotlight.
Eurostar says there will be no services between the UK and Brussels on Monday because of industrial action set to hit Belgium's rail network.
GERMANY:
The main German DAX 30 index rose 0.4% to close at 6,516.63.
Shares of K+S AG rose 0.8% after Norbert Steiner, its chief executive officer, reportedly told Frankfurter Allgemeine Zeitung that the company would consider any takeover offer.
FRANCE:
The France, where the CAC-40 index ended 0.2% higher at 3,834.50.
As French Strikes Continue, Worries About Fuel Supply
Protests against pension reforms showed little sign of a softening, intensifying fears about fuel supplies as strikers continued to target oil depots.
French Strike Force Petrol Stations Shut
About 1,500 petrol stations in France have run dry or are about to close as fuel supplies are hit by strikes over government pension reforms, officials say.
A blockade of oil refineries is into its seventh day and the body that supplies most supermarkets says one in four petrol stations is affected by panic-buying, which led to a 50% increase in fuel sales last week. President Nicolas Sarkozy has called a crisis cabinet to protect supplies.
Oil company Exxon Mobil has described the situation as "critical".
The exact number of France's 12,000 petrol stations affected by the strikes is unclear, but an Exxon spokeswoman said that anyone looking for diesel around Paris or in the western area of Nantes would face problems.
Severe shortages have been reported in Brittany in north-west France and the International Energy Agency says that France has begun tapping into its emergency oil reserves.
Workers at France's 12 oil refineries have been on strike for a week and entrances to many of the country's fuel distribution depots have been blocked.
Strike action against the government's reform plans is being ramped up, with lorry drivers starting the week by staging a go-slow on motorways around several major cities including Paris, Lille and Lyon.
A further day of strikes is scheduled for Tuesday, on the eve of a key Senate vote on the pensions bill.
Half of flights to and from Paris's Orly airport and one in three flights at other airports are being canceled, according to aviation officials.
Police and protesters clash in Nanterre as vehicles are set on fire. Riot police are on orders to be careful not to antagonise an already volatile situation as Police fired tear gas in two areas of the city on Monday, Nanterre and Combs-La-Ville, where massed youths had vandalised bus-stops and set fire to cars.
PAN-EUROPEAN SECURITY PARTNERSHIP FORMED
France, Germany Offer Hand To Russia At Seaside Summit
DEAUVILLE, France (AFP)--French President Nicolas Sarkozy, German Chancellor Angela Merkel and Russian President Dimitry Medvedev are meeting Monday for talks on building a pan-European security partnership.
The summit is to take place late Monday in the seaside Channel resort of Deauville, two decades after the fall of the Berlin Wall marked the end of the Cold War and a month before the NATO allies meet to agree their new security vision.
No big announcements are expected, but observers will seek signs Moscow and the West are ready to put decades of hostility behind them and commit to what optimists see as a common security vision "from Vancouver to Vladivostok."
Some allies of France and Germany are annoyed to have been excluded from the get-together, concerned the pair should meet alone with what they see as a difficult neighbor, but diplomats here insist the summit will defuse tensions.
"We will discuss whether it is possible for Russia and NATO to cooperate better, because the era of the Cold War is definitely over," Merkel said Saturday in her weekly video message.
"The Russian president has proposed a common security architecture. He is working step-by-step to define this architecture--of course in a spirit of partnership of all European countries with Russia," she said.
A senior official at Sarkozy's Elysee Palace said: "It'll be a kind of brainstorming session, to get to the bottom of thoughts and second thoughts.
"Russia seems to be looking more and more towards the West, and Deauville will be a chance to reinforce this development, which we see as positive."
French officials cite the examples of Russia's signing a new nuclear arms reduction treaty with the United States, its cooperation on the Afghan crisis and its "scrupulous" application of the latest sanctions against Iran.
Some other NATO allies, in particular the former Soviet satellites in Eastern Europe, remain suspicious of their prickly neighbor, pointing to the 2008 war in Georgia and some of Moscow's more bellicose pronouncements.
British ties with Russia have been strained by Moscow's refusal to extradite a suspect in the murder in London of a former Russian agent, and by commercial disputes over British oil company BP's investments in Russia.
And in recent years the United States has been at loggerheads with its former Cold War foe over its plans to site a missile defense system in Europe.
Medvedev's last engagement before leaving Moscow for the summit was not particularly conciliatory--he awarded medals to 10 Russian agents who were expelled from the United States in July for alleged spying.
But while Russia's ties with NATO as a whole have often been difficult, the Kremlin has proved adept at dealing directly one-on-one with European powers, in particular France and Germany.
Other Western allies have expressed concern at France's attempts to sell Russia a fleet of modern amphibious assault ships and Germany's involvement in a Baltic gas pipeline that will increase its reliance on Russian energy.
NATO will unveil its new security concept next month at its summit in Lisbon, and Western leaders hope Medvedev will confirm in Deauville that he will attend the meeting and give his support to their vision.
In Moscow, Medvedev's top foreign policy advisor confirmed that closer ties with NATO will be on the agenda in Deauville, including Russia's long-term goal of a formal new joint European security framework.
"Promoting Dmitry Medvedev's initiative--the European security treaty--is naturally of priority significance for us," Sergei Prikhodko told reporters at the Kremlin ahead of the summit.
Sarkozy and Merkel are due to meet each other first from around 1430 GMT to agree their own position before Medvedev joins them for dinner Monday evening, with the main summit press conference following at 0945 GMT Tuesday.
IRELAND:
Dublin Stocks: ISEQ Ends Flat At 2,688; Greencore +2.2%
IRISH OPPOSITION PARTIES SIGNAL MORE CHALLENGING BUDGET
Ireland's budgetary position is more challenging than previously estimated, spokespersons for Ireland's opposition parties Fine Gael and Labour signal after meeting with Department of Finance officials.
Protests against pension reforms showed little sign of a softening, intensifying fears about fuel supplies as strikers continued to target oil depots.
French Strike Force Petrol Stations Shut
About 1,500 petrol stations in France have run dry or are about to close as fuel supplies are hit by strikes over government pension reforms, officials say.
A blockade of oil refineries is into its seventh day and the body that supplies most supermarkets says one in four petrol stations is affected by panic-buying, which led to a 50% increase in fuel sales last week. President Nicolas Sarkozy has called a crisis cabinet to protect supplies.
Oil company Exxon Mobil has described the situation as "critical".
The exact number of France's 12,000 petrol stations affected by the strikes is unclear, but an Exxon spokeswoman said that anyone looking for diesel around Paris or in the western area of Nantes would face problems.
Severe shortages have been reported in Brittany in north-west France and the International Energy Agency says that France has begun tapping into its emergency oil reserves.
Workers at France's 12 oil refineries have been on strike for a week and entrances to many of the country's fuel distribution depots have been blocked.
Strike action against the government's reform plans is being ramped up, with lorry drivers starting the week by staging a go-slow on motorways around several major cities including Paris, Lille and Lyon.
A further day of strikes is scheduled for Tuesday, on the eve of a key Senate vote on the pensions bill.
Half of flights to and from Paris's Orly airport and one in three flights at other airports are being canceled, according to aviation officials.
Police and protesters clash in Nanterre as vehicles are set on fire. Riot police are on orders to be careful not to antagonise an already volatile situation as Police fired tear gas in two areas of the city on Monday, Nanterre and Combs-La-Ville, where massed youths had vandalised bus-stops and set fire to cars.
PAN-EUROPEAN SECURITY PARTNERSHIP FORMED
France, Germany Offer Hand To Russia At Seaside Summit
DEAUVILLE, France (AFP)--French President Nicolas Sarkozy, German Chancellor Angela Merkel and Russian President Dimitry Medvedev are meeting Monday for talks on building a pan-European security partnership.
The summit is to take place late Monday in the seaside Channel resort of Deauville, two decades after the fall of the Berlin Wall marked the end of the Cold War and a month before the NATO allies meet to agree their new security vision.
No big announcements are expected, but observers will seek signs Moscow and the West are ready to put decades of hostility behind them and commit to what optimists see as a common security vision "from Vancouver to Vladivostok."
Some allies of France and Germany are annoyed to have been excluded from the get-together, concerned the pair should meet alone with what they see as a difficult neighbor, but diplomats here insist the summit will defuse tensions.
"We will discuss whether it is possible for Russia and NATO to cooperate better, because the era of the Cold War is definitely over," Merkel said Saturday in her weekly video message.
"The Russian president has proposed a common security architecture. He is working step-by-step to define this architecture--of course in a spirit of partnership of all European countries with Russia," she said.
A senior official at Sarkozy's Elysee Palace said: "It'll be a kind of brainstorming session, to get to the bottom of thoughts and second thoughts.
"Russia seems to be looking more and more towards the West, and Deauville will be a chance to reinforce this development, which we see as positive."
French officials cite the examples of Russia's signing a new nuclear arms reduction treaty with the United States, its cooperation on the Afghan crisis and its "scrupulous" application of the latest sanctions against Iran.
Some other NATO allies, in particular the former Soviet satellites in Eastern Europe, remain suspicious of their prickly neighbor, pointing to the 2008 war in Georgia and some of Moscow's more bellicose pronouncements.
British ties with Russia have been strained by Moscow's refusal to extradite a suspect in the murder in London of a former Russian agent, and by commercial disputes over British oil company BP's investments in Russia.
And in recent years the United States has been at loggerheads with its former Cold War foe over its plans to site a missile defense system in Europe.
Medvedev's last engagement before leaving Moscow for the summit was not particularly conciliatory--he awarded medals to 10 Russian agents who were expelled from the United States in July for alleged spying.
But while Russia's ties with NATO as a whole have often been difficult, the Kremlin has proved adept at dealing directly one-on-one with European powers, in particular France and Germany.
Other Western allies have expressed concern at France's attempts to sell Russia a fleet of modern amphibious assault ships and Germany's involvement in a Baltic gas pipeline that will increase its reliance on Russian energy.
NATO will unveil its new security concept next month at its summit in Lisbon, and Western leaders hope Medvedev will confirm in Deauville that he will attend the meeting and give his support to their vision.
In Moscow, Medvedev's top foreign policy advisor confirmed that closer ties with NATO will be on the agenda in Deauville, including Russia's long-term goal of a formal new joint European security framework.
"Promoting Dmitry Medvedev's initiative--the European security treaty--is naturally of priority significance for us," Sergei Prikhodko told reporters at the Kremlin ahead of the summit.
Sarkozy and Merkel are due to meet each other first from around 1430 GMT to agree their own position before Medvedev joins them for dinner Monday evening, with the main summit press conference following at 0945 GMT Tuesday.
IRELAND:
Dublin Stocks: ISEQ Ends Flat At 2,688; Greencore +2.2%
IRISH OPPOSITION PARTIES SIGNAL MORE CHALLENGING BUDGET
Ireland's budgetary position is more challenging than previously estimated, spokespersons for Ireland's opposition parties Fine Gael and Labour signal after meeting with Department of Finance officials.
-
-
-Asian Pacific Markets:
Asian stocks finished mainly lower as the dollar recovered and softer commodity prices took a toll on Asian markets.
CHINA:
CHINA SEEKS ECONOMIC RESTRUCTURING IN NEW 5-YEAR PLAN
The top leadership of China's Communist Party unveils preliminary proposals for the country's 12th five-year plan, saying they aim to achieve a "major breakthrough" in economic restructuring in order to maintain long-term, stable and relatively fast economic development.Key Chinese Data Due This Week
China will likely again dominate Asian market news next week, with a stack of economic statistics on tap and its currency likely to be a big topic at the upcoming meeting of the Group of 20 leading economies.
The yuan advanced 0.5 percent last week and touched 6.6406, the strongest level since the central bank unified official and market exchange rates at the end of 1993.
China PPI Falls
China Reported Friday That Their September Trade Weakens Across the Board
Growing criticism of China's currency policy comes as the country's Communist Party leaders meet to outline their next five-year economic plan. The focus is likely to be on maintaining China's current rapid growth, which currently relies heavily on exports.
Officials will look at ways of boosting domestic demand from Chinese consumers in an effort to re-balance the economy.
JAPAN:
Japan has currency concerns of its own, with the Japanese yen currently hovering around 15-year highs against the dollar.
Mr Noda has said the government is ready to take further "decisive steps" to curb further rises in the yen, after earlier interventions in the currency markets appeared to have little impact.
Earlier Japan's prime minister Naoto Kan also admitted he was "very concerned about the currency situation".
VIETNAM:
HANOI: A major global summit on global warming next month must ensure that a scheme for trading greenhouse gas emissions continues, the World Bank's environment chief said Monday in Vietnam.
"What they have to find out is how to ensure that carbon trading does not collapse," Inger Andersen, the Bank's vice-president for sustainable development, told AFP in an interview. Known as the Clean Development Mechanism (CDM), carbon trading was set up by the international community in Kyoto, Japan in 1997 and came into force in 2005. It aims to reduce greenhouse gas emissions by creating a worldwide cap and trade system.
Carbon dioxide caused by the burning of wood, coal or petroleum causes the emissions blamed for global warming.
Under the CDM developed countries, mainly in Europe, place a limit on the amount of gases factories can emit. To meet their obligations, the polluting industries can either reduce their own emissions or buy carbon credits from people who have made reductions, often in the developing world.
With the Kyoto Protocol expiring in 2012 carbon markets must get early signals that the system will continue, Andersen said. "And so, somehow finding a way that that can be ensured would be very important to the world," she said. Environmentalists have asked for revisions to the CDM.
Long-running but difficult United Nations negotiations aim to eventually secure a binding global treaty on how to limit and cope with climate change, as a replacement to the Kyoto Protocol. The next key U.N. talks take place in Cancun, Mexico from November 29 to December 10.
AUSTRALIA:
Aussie and US Dollar At ParityKey Global Warming Summit
World Bank Must Be Ensured of Carbon Trading ProfitsHANOI: A major global summit on global warming next month must ensure that a scheme for trading greenhouse gas emissions continues, the World Bank's environment chief said Monday in Vietnam.
"What they have to find out is how to ensure that carbon trading does not collapse," Inger Andersen, the Bank's vice-president for sustainable development, told AFP in an interview. Known as the Clean Development Mechanism (CDM), carbon trading was set up by the international community in Kyoto, Japan in 1997 and came into force in 2005. It aims to reduce greenhouse gas emissions by creating a worldwide cap and trade system.
Carbon dioxide caused by the burning of wood, coal or petroleum causes the emissions blamed for global warming.
Under the CDM developed countries, mainly in Europe, place a limit on the amount of gases factories can emit. To meet their obligations, the polluting industries can either reduce their own emissions or buy carbon credits from people who have made reductions, often in the developing world.
With the Kyoto Protocol expiring in 2012 carbon markets must get early signals that the system will continue, Andersen said. "And so, somehow finding a way that that can be ensured would be very important to the world," she said. Environmentalists have asked for revisions to the CDM.
Long-running but difficult United Nations negotiations aim to eventually secure a binding global treaty on how to limit and cope with climate change, as a replacement to the Kyoto Protocol. The next key U.N. talks take place in Cancun, Mexico from November 29 to December 10.
AUSTRALIA:
Australia’s dollar touched $1.0004 Friday, trading stronger than the US dollar for the first time since currency controls ended in 1983. The Aussie appreciated 0.6 percent to 99.07 U.S. cents last week.
WORLD FOREX CURRENCIES SNAPSHOT:
(TUESDAY, OCT 18, 2010 2:30 PM EDT)
EUR/USD 1.3977 +0.0015 (0.11%)
USD/JPY 81.1700 -0.2800 (-0.34%)
GBP/USD 1.5905 -0.0078 (-0.49%)
CAD/USD 0.9856 -0.0014 (-0.14%)
USD/HKD 7.7571 -0.0003 (0.00%)
USD/CNY 6.6440 +0.0035 (0.05%)
AUD/USD 0.9916 +0.0034 (0.34%)
WORLD MARKETS SNAPSHOT:
(TUESDAY, OCT 18, 2010 2:35 PM EDT)
Shanghai 2,955.23 -15.93 (-0.54%)
Nikkei 225 9,498.49 -1.76 (-0.02%)
Hang Seng Index 23,469.38 -288.25 (-1.21%)
TSEC 8,060.54 -144.76 (-1.76%)
FTSE 100 5,742.52 +39.15 (0.69%)
DJ EURO STOXX 50 2,850.72 +9.07 (0.32%)
CAC 40 3,834.50 +7.13 (0.19%)
S&P TSX 12,642.85 +33.78 (0.27%)
S&P/ASX 200 4,651.90 -37.10 (-0.79%)
BSE Sensex 20,168.89 +43.84 (0.22%)
US BONDS SNAPSHOT:
(TUESDAY, OCT 18, 2010 2:35 PM EDT)
3 Month 0.11% 0.00 (0.00%)
6 Month 0.16% 0.00 (0.00%)
2 Year 0.36% 0.00 (0.00%)
5 Year 1.12% -0.05 (-4.27%)
10 Year 2.50% -0.03 (-1.19%)
30 Year 3.94% 0.00 (0.00%)
6 Month 0.16% 0.00 (0.00%)
2 Year 0.36% 0.00 (0.00%)
5 Year 1.12% -0.05 (-4.27%)
10 Year 2.50% -0.03 (-1.19%)
30 Year 3.94% 0.00 (0.00%)
MONDAY'S U.S. ECONOMIC CALENDAR:
9:00 a.m.
Aug. Treasury International Capital Data Monthly Net TIC Flows (previous 63.7B), Net Foreign Acquisition of Long-Term Securities (previous +44B), US Agency Debt (previous +17.3B), US Corp Bonds (previous 13.9B), US Equities (previous 12.5B), Tsy Bonds & Notes (previous +30B), Transactions (previous +61.2B)
9:15 a.m.
Sept. Industrial Production (previous +0.2%), Capacity Utilization (previous 0.1), Current Capacity Utilization (previous 74.7%)
10:00 a.m.
Oct. NAHB Housing Market Index (previous 13)
12:55 p.m.
Atlanta Fed Pres Lockhart speaks on the economy in Savannah, Ga
Aug. Treasury International Capital Data Monthly Net TIC Flows (previous 63.7B), Net Foreign Acquisition of Long-Term Securities (previous +44B), US Agency Debt (previous +17.3B), US Corp Bonds (previous 13.9B), US Equities (previous 12.5B), Tsy Bonds & Notes (previous +30B), Transactions (previous +61.2B)
9:15 a.m.
Sept. Industrial Production (previous +0.2%), Capacity Utilization (previous 0.1), Current Capacity Utilization (previous 74.7%)
10:00 a.m.
Oct. NAHB Housing Market Index (previous 13)
12:55 p.m.
Atlanta Fed Pres Lockhart speaks on the economy in Savannah, Ga
US STOCK MARKET SUMMARY, FRIDAY, OCT. 15, 2010:
Stocks:
U.S. stocks were mixed Friday, caused by a rising US dollar, mixed earnings and economic reports. Stocks ended mixed Friday as weakness in the banking sector dragged on the Dow, while technology shares remained strong.
The Dow Jones Industrial Average declined 31 points, while the S&P 500 and the Nasdaq rose a little. GE reported disappointing revenue, hurting the Dow, Gannett Co. Inc.'s (GCI) third-quarter profit jumped 38%, Charles Schwab Corp.'s (SCHW) third-quarter earnings fell 38%, while Google's better-than-expected earnings helped the Nasdaq. American Express Co. (AXP) said Friday in a regulatory filing the number of U.S. borrowers at least a month behind in their card payments rose to 2.5% in September.
The Labor Department's report Friday said the seasonally adjusted CPI for September rose by 0.1%, while consumer prices climbed by 0.3% in August after removing the rising cost of food and energy. A Commerce Department report showed retail sales rose 0.6% in September. US unemployment also increased. The U.S. federal government budget deficit was reported at $1.294 trillion dollars more than it collected in the fiscal year that ended Sept. 30th.
The Gallup Poll reported Friday that discretionary spending is at an all time low across a broad sector of US consumers. More than 58 million US retirees and disabled Americans will get no increase in Social Security benefits next year, the second year in a row without a raise.
Treasurys:
Treasurys fell against the dollar, sending the benchmark 10-year note's yield to the highest level this month, as U.S. data led many investors to cut bets that the Federal Reserve will buy government bonds on a larger scale in order to boost the economy. The 30-year bond's yield touched its highest level in more than two months. Long-dated securities suffered steep losses for the week.
Treasurys fell against the dollar, sending the benchmark 10-year note's yield to the highest level this month, as U.S. data led many investors to cut bets that the Federal Reserve will buy government bonds on a larger scale in order to boost the economy. The 30-year bond's yield touched its highest level in more than two months. Long-dated securities suffered steep losses for the week.
Forex:
The dollar bounced back from broad losses suffered earlier Friday that came on the heels of a speech by Federal Reserve Chairman Ben Bernanke that kept the door open to another round of economic stimulus. After falling to its lowest level since December 2009 in the wake of the Bernanke comments, the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, retraced its losses to post a modest gain on the day.
The dollar bounced back from broad losses suffered earlier Friday that came on the heels of a speech by Federal Reserve Chairman Ben Bernanke that kept the door open to another round of economic stimulus. After falling to its lowest level since December 2009 in the wake of the Bernanke comments, the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, retraced its losses to post a modest gain on the day.
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posted by Benjamin Train @ 9:32 AM
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