Stock Market Update - Wednesday, October 6, 2010 Cautious Outlook Upward Trend Gold Rising

Stock Market Update
Wednesday, October 6, 2010

Latest US Economic News Headlines: 

USA EQUITY INDEXES: (Oct. 6, 4:00 PM EDT)
Dow Jones 10,967.65     +22.93     (0.21%)
S&P 500    1,159.97     -0.78     (-0.07%)
Nasdaq     2,380.66     -19.17     (-0.80%)
US DOLLAR FUTURES DXY, 3:00 PM EDT: 77.38  Down 0.37  (0.48%)

US COMMODITY PRICES: (Oct. 6, 4:00 PM EDT)

Crude Oil     83.22     - 0.01%
Natural Gas     3.86     -
Gasoline     2.15     -
Heating Oil     2.31     -
Gold     1348.51     + 0.59%
Silver     23.16     + 1.31%
Copper     3.75     + 0.78%


US Stocks Fluctuate Between Gains, Losses
US stock futures trimmed gains, while Treasuries rallied and the yen strengthened to a 15-year high versus the dollar, after a report showed private employers unexpectedly cut jobs last month.


US STOCKS OPEN FLAT; ADP JOBS DATA DISAPPOINT
Stocks open flat as investors digest ADP's report of an unexpected drop in U.S. private-sector jobs in September, another indication of the weak labor market. Alcoa, which kicks off the earnings season with its results Thursday, is up 1%, as is Hewlett-Packard.


US WEEKLY MORTGAGE VOLUME FALLS
The volume of mortgage applications filed in the U.S. falls a seasonally adjusted 0.2% as low levels of refinancing offset a surge in purchases, the Mortgage Bankers Association reports.


CRUDE OIL $83.44
Crude Inventory Expanded Last Week

U.S. crude inventories showed a surprising build last week while product gasoline and distillate stocks fell more sharply than analysts expected, according to data released Wednesday by the U.S. Department of Energy. Inventories for crude, gasoline and distillates remain above their five-year averages.

Crude oil stockpiles expanded by 3.1 million barrels to 360.9 million barrels for the week ended Oct. 1, compared with an average survey estimate of 300,000-barrel rise. On Tuesday, the American Petroleum Institute, an industry group, reported a 4.4-million-barrel increase.

Crude futures extended losses after the data's release with November contracts recently down 0.3% at $83.51 a barrel on the New York Mercantile Exchange.

Gasoline stockpiles fell by 2.6 million barrels to 219.9 million barrels, the department's Energy Information Administration said in its weekly report. Distillate stocks, which include heating oil and diesel fuel, fell by 1.1 million barrels to 172.5 million barrels versus the estimates calling for a 700,000-barrel-drop.
 
Refining capacity utilization fell by 2.7 percentage points to 83.1%. Analysts had expected it to fall by 0.4 percentage point.


DOE: US Crude Oil Stocks +3.088 Mln Bbl At 360.948 Mln Bbl
US Gasoline Stocks -2.646 Mln Bbl At 219.943 Mln Bbl
US Refineries Ran At 83.1%; Seen 85.40%
US Distillate Stocks -1.124 Mln Bbl At 172.465 Mln Bbl 

The Houston Ship Channel was fully reopened early Wednesday, allowing crude supplies to flow for the first time since early Sunday to four oil refineries that account for 4.5% of the nation's refining capacity.

U.S. Coast Guard Petty Officer Richard Brahm said sagging power lines, downed when a tug pushing barges of scrap metal crashed into an electricity tower, were removed overnight and the channel was partially opened at 3 a.m. EDT to allow 25 delayed outbound vessels to clear the port.

At 8 a.m. EDT the waterway was opened completely, allowing some of the 46 inbound ships that had stacked up during the closure to reach their destinations, Brahm said. While Coast Guard officials said it could take up to three days to clear the backed up traffic, priority is being given to deepwater drafting vessels and essential crude deliveries, Brahm said.

Crude Pauses Ahead Of Inventory Data
Crude futures were down slightly Wednesday, retreating from five-month highs ahead of an important report on U.S. oil inventories.

Light, sweet crude for November delivery recently traded 9 cents, or 0.1%, lower at $82.73 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 6 cents lower at $84.78 a barrel.

Futures pushed above $83 a barrel Tuesday for the first time since May on continued weakness in the dollar and a surge in equities markets. Oil traders are also looking ahead to data on U.S. inventories and a monthly employment report Friday for signals on whether crude's rally will continue.

"We are just seeing a bit of profit taking going on here after the run-up," said Matt Smith, an analyst with Summit Energy. "I think we are holding off until we see inventories later today."

The U.S. Department of Energy is due to publish weekly oil inventory data for the week ended Oct. 1 at 10:30 a.m. EDT. Crude stockpiles are expected to rise by 300,000 barrels, according to a survey of analysts by Dow Jones Newswires. Gasoline stocks are expected to fall by 300,000 barrels and distillate stocks to fall by 700,000 barrels.

The American Petroleum Institute, an industry group, said late Tuesday that crude oil stocks rose 4.442 million barrels, while gasoline stocks dropped 4 million barrels, and distillate stocks fell by 777,000 barrels.

The strike by port workers at the Fos-Lavera oil terminal in France has entered its tenth day. It could spread to refineries after French oil major Total SA's (TOT) CGT union said it will meet the French port Fos-Lavera CGT union at 1200 GMT to discuss possible common protest action.

Analysts said data on inventories as well as the fate of the dollar and economic data could support a continued rise in crude prices.


NATURAL GAS FUTURES RISE AHEAD OF DATA
Natural gas futures rose Wednesday as traders moved to correct the market ahead of the weekly inventories report.

November natural gas futures settled 12.2 cents, or 3.3%, higher at $3.865 a million British thermal units on the New York Mercantile Exchange.

Prices have retreated over past weeks as moderate temperatures continue to hamper demand for gas heating. With no storms threatening offshore production in the Gulf of Mexico, supplies have stockpiled and left the market with a large surplus.



PRECIOUS METALS:
Gold Futures End Trading Above $1,346 An Ounce
Currency-Hedge Buying Continues Boosting Gold

Gold futures hit a record above $1,350 overnight and remained in solidly positive territory Wednesday as participants continued to clamor for the metal as a currency hedge.

Gold hit yet another record on its spurt higher on broad concerns that aggressive monetary easing is destabilizing currency markets.

The most actively traded gold contract, for December delivery, finished $7.40 higher at $1,347.70 an ounce on the Comex division of the New York Mercantile Exchange. Gold hit a high of $1,351 during the day. 

Gold prices will move higher as central banks increase their holdings in a market that lacks available supply, said Francisco Blanch managing director and head of global commodity research at Bank of America Merrill Lynch. Russian gold producers are also bullish on prices of the metal, top managers of the country's first- and third-largest gold producers, Polyus Gold (PLZL.RS) and Petropavlovsk PLC (POG.LN), said Wednesday.



WORLD TRADE WARS IF NO IMPASSE ON CURRENCIES
World Bank Economist Warns Of Trade Wars If No Currency Cooperation

Trade wars could break out if global financial leaders don't find a way to break the impasse over currencies, the World Bank's chief economist for Latin America and the Caribbean said Wednesday.

Augusto de la Torre said rising frictions over exchange rates are being driven in large part by yawning gaps in interest rates between advanced and emerging economies, which is resulting in heavy capital flows into the higher-yielding emerging markets.

"If we don't resolve this situation, one result will be a trade war," he said. One way to break the impasse would be for China to agree to allow the yuan to appreciate more rapidly against the dollar, which would relieve pressure on currencies of other emerging economies, said de la Torre during a briefing.

He expects the issue to be a major topic of discussion when finance ministers and central bankers convene for this week's annual meeting of the World Bank and International Monetary funds.


U.S. WARNS CHINA ON CURRENCY POLICY
GEITHNER TAKES AIM AT CHINA CURRENCY

China's undervalued yuan is triggering an international currency war that risks undermining the global economic recovery, Treasury Secretary Geithner said.

The Treasury Secretary warned China on Wednesday that its resistance to currency reform risks undermining international economic growth and cooperation, and he called on other countries to join the United States in creating "an effective multilateral mechanism" to resolve the issue.

In a speech at the Brookings Institution, Geithner cited the currency issue as one of a series of challenges for finance officials of the Group of 20 nations in meetings this month ahead of a G-20 summit in November.

His remarks represented an escalation of a verbal battle between Washington and Beijing over the Chinese currency, but it also signaled an effort to turn the dispute from a bilateral feud into a more global issue.

"The greatest risk to the world economy today is that the largest economies underachieve on growth," Geithner told the gathering. He said a "change in the pattern of global growth" is needed to sustain the current recovery from the financial crisis that nearly plunged the world into a depression two years ago.
The International Monetary Fund echoed those sentiments in its latest World Economic Outlook report, saying that the global recovery "remains fragile and uneven" and that unemployment is still "a major economic and social challenge" worldwide.

For more on this story read the Washington Post Article:
http://www.washingtonpost.com/wp-dyn/content/article/2010/10/06/AR2010100602665.html?hpid=topnews


MONSANTO LOSS NARROWS AMID FEWER CHARGES
Monsanto's fiscal 4Q loss narrows sharply to $143 million or 26c a share, amid a steep drop in restructuring charges, but it swings to a loss on an adjusted basis, coming in at the low end of its forecast. Shares rise 4%.


COSTCO 4Q NET PROFIT UP 16%
Costco posts a 16% increase in its fiscal 4Q earnings as a rise in net sales and membership fees outweigh higher costs, and says comparable sales growth remained steady during September.



US DEPORTS 392,000 ILLEGAL IMMIGRANTS
US Deportations Of Illegal Immigrants At Record Levels

The United States deported a record 392,000 illegal immigrants over the past year, nearly half of them people with criminal convictions, Homeland Security Secretary Janet Napolitano said Wednesday.

The number deported during the 2010 fiscal year ending September 30 surpassed the record of 389,000 deportations set the previous year.

More than 195,000 of those deported were convicted criminals, according to the U.S. Immigration and Customs Enforcement agency.

"This administration has focused on enforcing our immigration laws in a smart, effective manner that prioritizes public safety and national security and holds employers accountable who knowingly and repeatedly break the law," Napolitano said.

Illegal immigration has become a hot election year issue, particularly in border states like Arizona which is wrestling over a controversial law that requires police to question suspected aliens about their immigration status.

Napolitano, herself a former Arizona governor, used the latest statistics to make the case that the administration of President Barack Obama has been tougher in enforcing immigration laws than his Republican predecessor George Bush.

She said the by-the-books approach has resulted in the removal of "more convicted criminal aliens than ever before and issuing more financial sanctions on employers who knowingly and repeatedly violate immigration law than during the entire previous administration."

Immigration agents have audited 3,200 employers suspected of hiring illegal immigrants, debarred 225 companies and individuals, and levied $50 million in penalties--more than during the entire Bush administration, ICE said.

Deportations of convicted criminals were up 70% in 2010 compared to 2008, the final year of the Bush administration, the agency said.



BEFORE THE BELL:

US Futures Point to Higher Open
Futures on major US indices point to a higher opening on Wednesday ahead of ADP national employment report. Futures on the S&P 500 are up 0.36 percent, futures on the Dow Jones Industrial Average are up 0.38 percent and Nasdaq100.

US stock index futures were modestly higher on Wednesday on renewed hopes for global stimulus and investors awaited data expected to show a modest return to private sector jobs growth.


DOLLAR DECLINES
The U.S. dollar continued sinking against the Japanese yen, trading as low as 82.85 yen to the dollar ahead of the data, though it fetched 83 yen in recent trading.



CRUDE OIL SLIPPING BEFORE BELL
Crude-oil futures slipped lower before the bell; from $83 to $82.64.

Crude oil for November delivery increased 1.7 percent yesterday in New York to $82.82 a barrel. The London Metal Exchange Index of six industrial metals including copper and zinc rose 1.6 percent yesterday to its highest level since July 2008.


GOLD ON THE RISE
Gold:  1346.23 + 0.42%
Silver: 23.03     - 0.23%
Gold continued its ascent to trade at $1,346 an ounce before the bell.


EARNING TO BE REPORTED:
Among companies in focus, Costco Wholesale said its fiscal fourth-quarter net income rose 16% on a 7.8% increase in net sales, topping earnings expectations, though shares of the company were down 2.2% in pre-market trading.


IMF SEES 2011 GLOBAL GROWTH SLOWING
Global growth will slow sharply, more than expected from an already sluggish pace, as advanced economies slash their budgets amid the ongoing sovereign debt crisis, the International Monetary Fund says. The IMF also cut US growth estimates on weak consumer spending.


PRIVATE SECTOR JOBS DROPPED
US Stock Futures Pare Gains After Jobs Data, DJIA Up 19U.S. stock futures pared earlier gains after the number of private-sector jobs unexpectedly dropped by 39,000, according to data published Wednesday.

The data point to continued signs of labor weakness ahead of Friday's closely-watched official monthly jobless data.

The private-sector hiring data, compiled by Automatic Data Processing, showed an unexpected drop of 39,000 jobs in September, compared to consensus expectations of a 20,000 gain. It was the largest monthly drop since January, and suggests weakness in the employment sector ahead of Friday's non-farm-payrolls report, which the Fed is expected to watch closely for a reading of the strength of the economic recovery.
Dow futures had risen 44 points, while S&P 500 futures gained 4 points and Nasdaq futures edged down half a point. Changes in stock futures do not always accurately predict early stock moves after the open.



IMF Talks Focus on Currency Restraints

Discussions at the fall meeting of the International Monetary Fund this week are likely to be dominated by concerns that moves by governments in Asia and Latin America to restrain the rise of their currencies could provoke a wave of protectionism.

"Concerns about potential protectionism point to the need to maintain a focus on a collaborative approach to broad economic policies in the interest of producing results that benefit all," the IMF's deputy managing director John Lipsky said in an interview.

A senior U.S. Treasury official said the Obama administration intended to put currency issues on the agenda for the IMF meeting here. Promoting balanced global growth demands "market-oriented exchange rates," the official said.

At the heart of the discussions among finance ministers and central bankers are the foreign-exchange policies of China and Japan. For years, the U.S., Europe and some developing countries have accused Beijing of undervaluing its currency to gain a competitive advantage for its exporters. In June, China agreed to revalue its currency, but since has only let the yuan appreciate about 2%, infuriating U.S. lawmakers and embarrassing Obama administration officials who have staked their prestige on convincing China to do more.

The U.S. plans to use IMF meeting and sessions of the Group of 20 in October and November as venues to coordinate international pressure on Beijing, rather than press its views unilaterally. "The Fund must speak out effectively" on members' economic policies, the U.S. official said.

Read the Entire article at The Wall Street Journal:
http://online.wsj.com/article/SB10001424052748703298504575534350629177126.html?mod=googlenews_wsj

 

US Dollar Drops vs. Yen and Other Major Currency Markets

Global efforts to tame the foreign-exchange market stepped up a gear overnight as key countries around the world battled to hold their soaring currencies down.

The dollar slipped against most major counterparts Wednesday, pressured by growing expectations the U.S. Federal Reserve will take additional easing steps at its meeting early next month.

The Federal Open Market Committee will meet on Nov. 2 and 3; officials have recently hinted that more easing could be on the way.

“This perception of additional measures to come from the Fed in particular is weighing on the dollar, with EUR/USD again hitting the eight-month high of $1.3859,” said currency strategists at Brown Brothers Harriman.

Against the Japanese yen, the dollar (USD/YEN 83.0400, -0.1500, -0.1803%) fell 0.3% to ¥83.01.

After it surprised with a rate cut on Tuesday, the Bank of Japan repeated Wednesday that the Japanese economy’s moderate recovery is slowing.

The dollar index (DXY 77.67, -0.08, -0.11%), a measure of the greenback against a basket of six major currencies, edged down to 77.656 from 77.749 late Tuesday. Expectations rise that the US Fed will take additional easing measures.

Japan stole the limelight with a deflation-fighting combination of lower core interest rates and a new asset-buying program--a series of moves that shoved the yen lower for a short time.

Meanwhile, South Korea upped its surveillance of the inflows that have pushed the won to five-month highs against the droopy dollar, and some traders said the Bank of Korea also sold its local currency in Asian trading hours.

Brazil, whose finance minister last week declared that the world is in the midst of a "currency war," also doubled taxes on fixed-income inflows, while the Reserve Bank of Australia knocked the Aussie dollar when it declined to raise interest rates as most economists had expected.

The U.S. dollar remains trapped in a downward spiral as expectations of further monetary easing by the Federal Reserve drags it down. That adds further weight to recent calls from a major international body for a big rethink on the global currencies market.

"The currency wars are heating up. Calls for a new global currency structure will heat up," said Kit Juckes, head of foreign-exchange strategy at Societe Generale in London.

As authorities around the world tried to hose down their currencies overnight, the Institute of International Finance sounded a warning on the current system.

The trade group, which represents the world's largest banks, said that the Group of 20 symposium of the biggest developing and industrialized nations was a poor forum for dealing with foreign-exchange issues such as the weak Chinese yuan. Instead, it said that a "core group" of major economies--the U.S., China, Japan, and the euro zone--should seek to resolve currency-market tensions.

More of those tensions appeared Tuesday, when leaders from the European Union raised the volume of their rhetoric towards China. Speaking at the conclusion of a major meeting between European and Asian politicians, European Commissioner for Economic Affairs Olli Rehn called for currency revaluation to be included among China's economic reforms.

Evidence of flaws in the currency markets was very clear Tuesday as the dollar made a fresh lurch lower. The cause was the same central banks around the world that have been trying to hold their currencies down.

The problem is that although central banks, particularly across Asia, are buying dollars in bulk to hold their own currencies down, they aren't holding on to them.

Instead, they are churning them into other currencies, chiefly the euro, and inadvertently pushing the dollar lower still.


TRIO WINS NOBEL CHEMISTRY PRIZE
 American Richard Heck and Japanese researchers Ei-ichi Negishi and Akira Suzuki won Nobel Prize in Chemistry for developing a chemical method that has allowed scientists to make medicines and better electronics.



Super Rich Investors Buy Gold

The world's wealthiest people have responded to economic worries by buying gold by the bar -- and sometimes by the ton -- and by moving assets out of the financial system, bankers catering to the very rich said on Monday.

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit.

"They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold....

To read the entire article, visit Reuters Most Popular Stories:
http://www.reuters.com/article/idUSTRE6932NR20101004



Canadian Market:
The Toronto Stock Exchange's S&P/TSX composite index was down 8.36 points, or 0.07%, to 12,489.

CANADIAN FINANCE MINISTER - CURRENCIES IN FOREFRONT
Canada Fin Min: Freely Traded Currencies Could Be Affected By Interventions, Inflexible Currencies

Canadian Finance Minister Jim Flaherty said Wednesday there is a danger that freely traded currencies will be "disadvantaged" by interventions and currency inflexibility. Flaherty made the comments ahead of meetings in Washington of Commonwealth Finance Ministers and G-7 finance ministers and central bank governors that he will chair.

Several key nations this week took steps to arrest their soaring currencies. Flaherty said there are concerns about interventions in currency markets and about currency inflexibility. "This is a topic that I'm sure we'll be discussing in the next several days," he told reporters after the weekly caucus meeting of the governing Conservative Party.

He said Canada has always made it clear that it believes in freely traded currencies. "There is a danger here that countries that do have currencies that trade in a market, that trade freely, are disadvantaged by certain interventions that are made by other countries and by inflexibility by certain currencies," he said. "So we don't want these kinds of distortions in currency values or distortions in trading relationships. It's a very important topic."

Flaherty said U.S. Treasury Secretary Tim Geithner "has a point" in proposing to link International Monetary Fund reform and currency practices. "He and I have had discussions of late on that and other subjects," he said.

Flaherty said G-20 countries have to keep the Toronto G-20 Summit Framework "in the forefront." He said one of the purposes of the meetings this weekend is to make sure countries stay on track to fulfill the commitments made at the Toronto Summit.

Flaherty reiterated that economic growth is fragile. But he said the Canadian economy doesn't need further stimulus "at this point."

"We watch carefully of course and will continue to watch. The economic recovery is fragile so we have to be prepared to be nimble but there's no intention now to extend stimulus programs," he said.

Flaherty said the private sector has to pick up the slack as governments in Canada and other G-20 countries ease out of stimulus. Canada's two-year stimulus program is scheduled to end in March 2011. Flaherty said the IMF's latest figures on Canada's economic growth are "encouraging." 



Canadian Bonds Yield Average 2.836%

The Canadian Finance Department reported an average yield of 2.836% at an auction of C$3 billion (US$2.95 billion) of 3.25% non-callable government bonds due June 1, 2021.

The high accepted yield was 2.841% for a price equivalent of 103.731 and the low accepted yield was 2.829% for a price equivalent of 103.843. The price equivalent for the average yield was 103.778.

The allotment ratio at the high accepted yield was 96.45000.

The total value of the bids received was about C$7.1 billion, including C$67.1 million of non-competitive tenders that were accepted at the average yield.

The bonds will be dated and delivered Oct. 12. Proceeds will be used for general government purposes. With the issue of the new bonds, the outstanding total of 3.25% bonds due June 1, 2021 will be C$6 billion.


CANADIAN PENSION PLANS FAIL MERCER TEST 
Canadian Pension Plans Still In Poor Health, Mercer Index Shows

Despite a surge 10.3% surge in Canadian equities in the third quarter, the typical domestic pension plan remains in poor health as government bond yields slumped, pension consulting firm Mercer said Wednesday.

Its quarterly Mercer Pension Health Index stood at 68% at the end of the third quarter, up only one percentage point from the second quarter. The index shows the ratio of assets to liabilities for a model pension plan. The ratio was arbitrarily set at 100% at the beginning of 1999, and fell to a low of 60% at the beginning of 2009.

The model pension plan used holds a mix of 60% equities and 40% bonds, representative of a typical balanced fund. The asset mix is 42.5% DEX Universe Bond Total Return Index, 25% S&P/TSX Composite, 15% S&P 500, 15% MSCI EAFE and 2.5% DEX 91-day T-Bills.

According to Mercer, such a typical balanced fund would have returned 6.9% in the quarter. Canadian, U.S. and international equity indexes gained between 7% and 12% in Canadian dollar terms in the quarter and Canadian bond prices rose 3.2%.
Mercer noted that long-term federal bond yields fell for a second consecutive period, declining by 30 basis points in the quarter, resulting in higher pension liabilities.

Paul Forestell, a senior partner with Mercer, said the drop in yields pulled the Pension Health Index down by five percentage points, offsetting the gains in asset prices.

"When you're looking at pension plans, it's easy to follow what happens to assets, but liabilities get affected by what happens to markets as well," he said.

According to Mercer, Canadian equities, as measured by the S&P/TSX Composite index, returned 10.3% in the third quarter, led by an 18.2% gain in the materials sub-index, a 15.5% gain in utilities and a 15.4% gain in consumer staples. The worst-performing sector was information technology, which fell by 1.7%. Financials and energy, the two largest sectors, gained 7.8% and 7%, respectively.

Small-cap stocks returned 14.2% in the period, outperforming large-cap stocks, which rose 8.7%, while growth stocks beat value stocks, rising 11.5% versus 9.3%.

Overall, bonds returned 3.2% with long bonds gaining the most, up 5.6%, while mid-term bonds rose 3.8% and short-term bonds only 1.6%. Overall bond yields fell to 2.80% at the end of the quarter from 3.08% three months earlier.

Mercer noted the Canadian dollar had a mixed impact on foreign equities during the third quarter. International equities as measured by the MSCI EAFE index returned 12.5% in the quarter in Canadian dollar terms, compared to 7.1% in local currency terms.

The S&P500 returned 7.4% in Canadian dollar terms and 11.3% in U.S. dollar terms. Emerging markets, as measured by the MSCI Emerging Markets index, returned 14.1% in the period.




Toronto Indexes, Volume; 3 PM EDT Composite Down 34.64

 S&P/TSX Composite   12463.36  off  34.64  or 0.3%
 S&P/TSX 60 Index      721.28  off   2.06  or 0.3%
 Financials            177.92  off   0.37  or 0.2%
 Materials             397.61  up    1.30  or 0.3%
 Energy                288.98  off   1.36  or 0.5%
 Industrials           104.76  off   0.35  or 0.3%
 IT                     27.70  off   0.70  or 2.5%

   Volume        Wednesday    Tuesday
   2-3                 51.7M       64.1M
   9:30-3             420.5M      418.8M


Toronto Most Actives At 3:15 PM EDT

Horizons NYMEX Natural Gas Bull  12,083,564  3.66  up   0.16
Eastern Platinum                 10,716,443  1.54  up   0.08
Crocodile Gold                   10,159,450  1.50  up   0.33
Kinross Gold                      9,978,209 19.74  off  0.05
Platmin Ltd.                      8,918,756  1.09  up   0.11
Andean Resources                  8,622,649  6.35  up   0.02
Twin Butte Energy                 6,506,574  1.53  up   0.06
Air Canada B                      5,241,158  3.10  up   0.23
Petaquilla Minerals               4,789,926  0.56  up   0.12
Great Basin Gold                  4,720,172  2.48  off  0.01



South American Markets:

BRAZIL:

Brazil Stocks Open Higher On New U.S. Stimulus Hopes, Later Dip
Brazilian stocks opened marginally higher Wednesday as risk appetite remained steady with expectations that the U.S. economy may be stimulated if the Federal Reserve cuts interest rates.

Brazil's benchmark Ibovespa stocks index opened at 71,284 points, above Tuesday's close of 71,283 points, its highest level since April. The market reacted positively to Japan's zeroing of its basic interest rate and Australia's decision to postpone an interest rate hike, leading to expectations that the U.S. Federal Reserve may also reduce rates in November.

The Ibovespa index, however, moved into negative territory shortly after opening, following the announcement of disappointing U.S. employment figures.

Blue chips were mostly higher in early trading Wednesday. 
The exception was state-controlled energy giant Petrobras (PBR, PETR4.BR), which traded 2.11% lower at 26.41 Brazilian reals ($15.72) after the first hour of trading, the exchange's biggest loser. Petrobras is still adjusting to the effects of a huge share offering in September, which diluted stakes of existing shareholders.

Vale SA (VALE, VALE5.BR) saw its shares rise by 0.88% to BRL47.76. Telecom leader Tele Norte Leste Participacoes SA (TNE, TNLP4.BR), or Oi, advanced 2.27% to BRL25.25. Cable TV provider Net (NETC4.BR) slipped 0.55% to BRL21.78. Steelmaker Usiminas (USIM5.BR, USNZY) fell 0.58% to BRL22.47.

Aircraft manufacturer Empresa Brasileira de Aeronautica (ERJ, EMBR3.BR), or Embraer, fell 0.25% to BRL11.86. Minas Gerais utility Cemig (CMIG4.BR) fell 0.49% to BRL28.26.


BRAZIL BUYS DOLLARS IN AUCTION
Brazil's Central Bank Buys Dollars In Auction At BRL1.6752

Brazil's Central Bank bought U.S. dollars at an auction Wednesday for BRL1.6752 to the dollar, the bank said. The central bank didn't reveal the number of dollars purchased.

Before the auction the real was being traded at BRL1.6805 to the dollar. Following the auction, as of 1553 GMT, the real was trading at BRL1.6721.

Brazil's central bank has recently been purchasing dollars in twice-daily auctions to build foreign reserves and curb the strengthening of the real against the dollar. The Central Bank said Wednesday that its dollar purchases boosted reserves by $10.76 billion in September, according to reporting by the local Estado news agency.


COLUMBIA:

IGBC CLOSES ABOVE 15100, BREAKS RECORD 
Colombia's IGBC Closes Above 15100 Level, Posts Record High

The Colombia IGBC index, the benchmark for the country, cruised past the 15100 threshold Wednesday, continuing a streak of record highs for local stocks.

The IGBC index closed at 15169.7 points, climbing 1.61% Wednesday. The index has gained 30.7% so far this year. The index was propelled Wednesday by shares of state-run oil company Ecopetrol SA, Colombia's largest company, which rose 5.15% to COP4,050.

Shares of Banco Davivienda, Colombia's third-largest bank by assets, rose 2.91% to COP22,600. Davivienda made its debut on the local stock exchange Tuesday, with its shares climbing 36%.



Colombia's Banco De Bogota Plans $1.2 Billion Bond Sale

Banco de Bogota SA (BOGOTA.BO), Colombia's second largest bank by assets, secured approval from its board of director to launch a bond issue for COP2.2 trillion ($1.22 billion), a move that appears geared to raise cash for a recent expansion in Central America.

The bonds would be compulsorily convertible into stock, according to a report by Banco de Bogota to the government's financial watchdog agency late Tuesday. The bank hasn't provided any additional information on the bond issue.

The bank said on Sept. 17 that it planned to raise $1.45 billion to finance the acquisition of Central America's bank BAC-Credomatic. Banco de Bogota announced in July it agreed to buy BAC-Credomatic for $1.9 billion from the financial arm of U.S. conglomerate General Electric (GE).

Banco de Bogota is controlled by Grupo Aval (GRUPOAVAL.BO), which is owned by Colombia's second-wealthiest man, Luis Carlos Sarmiento. BAC-Credomatic, which focuses on credit cards in Central America, has 2 million clients, assets of $7.7 billion and deposits of $5.3 billion, Grupo Aval said in a statement.

The purchase is part of Grupo Aval's efforts to seek out business outside of Colombia. Shares of Banco de Bogota were up 1.54% in morning trading to COP52,800.



PERU:
Peru's Ctrl Bk Intervenes In Forex Market
Peru's Central Bank bought $38 Million US Dollars at auction.

The central bank has been purchasing dollars regularly since June 18, intervening to smooth out volatility in the exchange market. Peru's sol has been on an appreciating trend recently due in part to strong inflows of capital. On Tuesday it purchased $47 million, and last Friday it bought $4 million.

The sol ended slightly stronger Wednesday, at PEN2.789 per dollar. The sol ended the previous session at PEN2.790 per U.S. dollar.

So far this year the sol has appreciated 3.39% against the U.S. dollar, while in the last 12-month period the sol has appreciated 2.82% against the greenback.



CHILE:

CURRENCY INTERVENTION NOT RULED OUT

The Chilean central bank can't rule out intervening in the local currency market, but there would be high costs to pay, bank president Jose De Gregorio said Wednesday. As the peso is trading at two-year highs against the dollar, exporters -- whose livelihood depends on a weaker currency -- are clamoring for central bank intervention.

In the past 10 years, the central bank has only intervened three times, when it has considered that the peso's exchange rate, in real terms, has deviated from long-term fundamentals.

At a gathering of the Fedefruta fruit exporters trade group, De Gregorio called intervention "a valid tool," adding that the bank's governing council "evaluates the decision [to intervene] and undoubtedly, this is something that's been at the forefront of our recent discussions."

He noted that intervention could be very expensive as it requires sterilizing currency purchases so as to not deviate the effects of monetary policy. In his prepared remarks, he also said the peso, in real terms, was slightly below the average it had posted in the previous two decades.

Defending the peso's free float adopted in the late 1990s, the central banker said that floating a currency curbed speculation and massive capital inflows. "We haven't seen any evidence of short-term speculative inflows to arbitrate with other currencies," he said.


ARGENTINA:

ARGENTINA ECONOMY GROWING AT STEADY PACE
Argentina 4Q Markets Outlook: Stocks, Bonds To Extend Gains

Argentina's bonds and thinly traded stocks will likely add to their gains in the fourth quarter on the back of a booming economy and investor demand for high-yielding emerging-market debt.

Argentina's economy is firing on nearly all cylinders, with the Central Bank of Argentina expecting gross domestic product to expand as much as 9.5% this year thanks to high commodities prices, strong consumer demand, and a surge in exports to top trading partner Brazil.

"It should be a relatively good quarter for Argentine paper within the context of low economic growth in the developed world and benchmark interest rates staying low for some time," Capital Markets Argentina fixed-income portfolio manager Noelia Lucini said.

Searing growth, the government's successful debt swap with creditors in June, and investors' search for yield led to some hefty gains in the country's fixed-income securities during the third quarter.

The benchmark, peso-denominated 2033 discount bond surged 60% quarter-on-quarter to end September at ARS152, while the yield narrowed to 9.05% from 14.02% at the end of June. The dollar-denominated Boden 2015, considered a good proxy for measuring the appeal of newly issued government bonds or the government's ability to sell them, rose 10% to ARS349, which pushed the yield down to 10.39% from 13.12%.

J.P. Morgan Securities last week moved back to an overweight position on Argentina in its widely followed model portfolio as President Cristina Fernandez's policies provide "a favorable backdrop for bondholders," given her intention to continue paying debt with central bank reserves.

Barclays Capital is also overweight Argentine bonds, saying in a report Sept. 30 that it continues to favor Bonar 13 bonds and sees as undervalued Bonar 17 bonds. "In the high-yield space we like Argentina. We believe market conditions and idiosyncratic factors have improved and that the balance of risks justifies our view," Barclays strategists wrote in a note.

Argentina's Merval index of leading stocks also logged solid gains in the quarter, led by bank shares, which benefited from a consumer lending boom and the rally in government bonds that account for a significant portion of their assets.

The Merval rose 21% in the third quarter, and was up 14% year-to-date at the end of September. However, turnover was a scant ARS3.1 billion for the entire quarter, according to data from the Buenos Aires Stock Exchange.

Index provider MSCI Barra in May 2009 demoted Argentina to frontier status from its emerging market category because of capital controls that require foreign investors to deposit 30% of any money they bring into the country with the central bank for one year. The move caused the MSCI Argentina Index to lose about two-thirds of its capitalization overnight.

Shares of banking concern Grupo Financiero Galicia SA (GGAL) surged 73% quarter-on-quarter, while BBVA Frances SA (BFR) rose 55% and Banco Macro SA (BMA) rose 54%. Telephone giant Telecom Argentina SA (TEO) saw its shares rise 31% during the quarter. Shares of Tenaris SA (TS), a major producer of steel pipes used in the oil and gas industry, climbed just 10%.


European Markets:
The International Monetary Fund Wednesday raised its forecast for economic growth in the euro area this year and next, but warned that Europe in general is still facing "gradual and uneven" economic recovery.

FTSE Edges Down Slightly After Poor US ADP Data
FTSE 100                   5665.08    +29.32   +0.52%
FTSE 250                  10743.39    +61.43   +0.58%
DJ UK Smaller Companies   906.93   +2.42  +0.27%

FTSE 100 nudging down a touch after US ADP employment change comes in well below expectations, with a 39,000 decrease in private sector jobs from August to September. US futures pare gains a tad too.


EUROPEAN UNION  DEMANDS CURRENCY MOVES
EU Leaders Demand China Budge On Currency During China EU Summit

European Union leaders said Wednesday that they had urged Chinese Premier Wen Jiabao to act to raise the value of China's yuan currency, during a fractious summit in Brussels.

"We stressed that structural reforms in Europe and in China were essential, and highlighted the role of appropriate exchange rates," EU President Herman Van Rompuy and European Commission chief Jose Manuel Barroso said in joint remarks released at the end of talks that lasted under three hours.

"We underlined the importance of re-balancing global growth and reducing global imbalances," the pair said, referring to concerns that an undervalued yuan skews trade flows in favour of cheap Chinese exports.

An EU source told AFP that the effort to get China to ease its policy of pegging the yuan to the U.S. dollar, at a time when the euro has hit an eight-month high on currency markets, fell flat. "We put our cards on the table," the source said. "We heard each other out and managed to establish a dialogue of sorts in the economic sphere. "But it was not an easy summit."

Earlier, Wen had told a Europe-China business forum: "I say to Europe's leaders--don't join the chorus pressing (China) to revalue the yuan." A sharp yuan appreciation would "cause many Chinese companies to go bankrupt, casting people out of work...and creating social unrest," Wen said.



LONDON:

London Spot Gold Trading At $1.350 a Troy Ounce
Spot gold is hovering just below $1,350 a troy ounce in Europe Wednesday after hitting a new record high overnight and analysts said that, despite potential downward pressure from investors booking profits and a pick-up in scrap supply, the precious metal should remain well-supported in the weeks ahead.

Auto Industry Slides
The U.K. automotive industry's sales in 2010 remain on course to match last year's performance after new-car registrations in September were better than expected, but the outlook remains gloomy.

British Airways, Iberia, American Launch Venture
British Airways PLC (BAY.LN), merger partner Iberia Lineas Aereas de Espana SA (IBLA.MC) of Spain and AMR Corp.'s (AMR) American Airlines Wednesday launched their joint venture and announced four new routes that will start from April 2011.

European Markets Extend Rally

European shares rose in early trade on Wednesday, tracking gains in Asia and on Wall Street, with stock markets worldwide moving higher on hopes central banks will do more to boost struggling economies.
Europe shares rally for second day on economy hopes.

The European benchmark is up more than 66 percent from its lifetime low of March 9, 2009, but has gained less than 3 percent in 2010. A stimulus pledge from the Bank of Japan to lift the economy also reassured investors on Tuesday.

Policymakers in the United States and Britain may further boost markets by more quantitative easing, analysts said. The Bank of England is not expected to unveil extra measures when it announces its interest rate decision on Thursday. The European Central Bank will also decides on rates on Thursday.


European Consumers Expect Finances To Worsen
Consumers across the European Union are more concerned about their financial future than they were a year ago, but they worry more about inflation than about job security or having to pay higher taxes, a survey shows Wednesday.

The European Consumer Finances survey, conducted annually by global investment firm Janus Capital Group Inc., marks a reversal of the trend a year ago, when consumers were a little more optimistic.

Now, 28% of Europeans surveyed expect to be worse off this time next year, compared with 24% in the 2009 survey. Around 37% see higher living costs as the biggest threat to their personal finances, ahead of unemployment, a drop in earnings and tax increases.

Spanish consumers are the most pessimistic, followed by Italians. By comparison, Dutch and Germans have the most confidence in their finances.

"The contrast between the relative prosperity of Northern European states compared to their southern neighbors makes the prospect of a twin-track recovery ever more likely," said Ric Van Weelden, head of Janus Capital Group's European business. "However, consumers across all of Europe are more downbeat than ever about the immediate outlook."


European Markets Shrug Off Fitch's Ireland Downgrade
The euro, European government bonds and European stocks were largely unruffled Wednesday by Fitch Ratings' decision to downgrade Ireland's long-term foreign debt to A+ from AA-, with a negative outlook.

"The market was expecting some development from rating agencies on Ireland for some time, and a single notch downgrade by one of the agencies is not too much of a concern," said Peter Chatwell, interest-rate strategist at Credit Agricole.

The euro, which was trading at $1.3830 just before the announcement, fell to a low of $1.3799 but has since recovered all the lost ground, trading at $1.3830 again at 1145 GMT.

December German bund futures, trading at 131.85 ahead of the downgrade, jumped to a session high of 132.01 on a classic flight to the perceived safe haven of German government debt, but have since dropped back to 131.83.

European stocks, which barely fell on the news, have since climbed, with the Stoxx Europe 600 index at 263.45, up from 262.99 when Fitch made its announcement. As for Irish government bonds, the difference in yield, or spread, between 10-year Irish gilts and 10-year German bunds was 5.6 basis points higher at 416.8 bps. The two-year yield spread was 20.5 bps wider at 293.6 bps.

Similarly, Ireland's five-year sovereign credit default swaps reversed an initial 13 bps tightening to trade 13 bps wider than at Tuesday's close, at 450 bps, according to data provider Markit.




FTSEurofirst 300 rises 0.7 pct, up for 2nd day
 
At 0823 GMT, the FTSEurofirst 300 FTEU3 index of top European shares was up 0.7 percent at 1,073.33 points, after rising 1.4 percent in the previous session, as U.S. data on the services sector helped ease some concerns over growth prospects.

 
GERMANY:
German government bond futures hit a session high on Wednesday, while the premium investors demand to hold riskier Irish paper rose after Fitch Ratings downgraded Ireland's credit rating.

Bunds were pushing higher before the Fitch news, with traders saying speculation about increasing prospects for U.S. quantitative easing were boosting safe-haven government bonds. 


GERMAN MANUFACTURING ORDERS CLIMB
German Manufacturing Orders Jump

German manufacturing orders rose in August, sharply exceeding expectations, due to strong demand from euro-zone countries.

The rise marks a rebound from the previous month's decline and signals rising industrial production for the coming months. "The strong swings in big-ticket orders are still impacting manufacturing orders. But even without them, the trend of demand for industrial products remains tilted to the upside," the Economics Ministry said in a statement, adding that calmer domestic demand was offset by continuing strong incentives from abroad.

Orders jumped a seasonally adjusted 3.4% on a month-to-month basis in August, a much stronger performance than the 1.1% rise that analysts had forecast. In July, orders fell a revised 1.6%, compared with the previously reported 2.2% drop.

The increase in August was due to a 6.6% rise in foreign orders, which suggests that the euro-zone economy is rebounding from last year's recession.


Germany, Argentina To Update Double Tax

Germany and Argentina plan to update their bilateral double-tax agreement, German Chancellor Angela Merkel said Wednesday.

"There is an existing agreement, but it's very old, so we've agreed to update it...with negotiations in 2011," Merkel said Wednesday after meeting at her offices with Argentina's President Cristina Fernandez.

IRELAND:

IRELAND'S SOVEREIGN DEBT RATINGS DOWNGRADED
Ireland and its stricken banking sector were hit by ratings downgrades after revelations the bailout of the sector could cost the country up to €50 bln. Fitch cut the credit rating to A+ from AA-, and say the outlook is negative.

IMF Keeps Ireland 2011 GDP Forecast Unchanged At 2.3%

Fitch Rating::  Downgrade Ireland's long-term foreign debt to A+ from AA-, with a negative outlook.


GREECE:
IMF Keeps Greece 2011 GDP Forecast Unchanged At -2.6%

GREEK DEFICIT, DEBT WILL BE REVISED HIGHER
Greece's budget deficit and debt for the period 2006-09 will be revised higher in data published by the European Union's statistics office Eurostat this month, the European Commission says.

PORTUGAL:
IMF Cuts Portugal 2011 GDP Forecast 0.0% Vs 0.7%


INDIA:

INDIA ECONOMIC GROWTH FORECAST 9.7 PERCENT
IMF Raises India 2010 Economic Growth Forecast to 9.7% on Consumer Demand
The International Monetary Fund raised its 2010 economic growth forecast for India, citing strengthening local consumer demand.

The South Asian economy will expand 9.7 percent this year, the Washington-based lender said in its World Economic Outlook yesterday, more than the 9.4 percent estimated in July. The fund maintained its 2011 prediction for India’s growth at 8.4 percent.

“Low reliance on exports, accommodative policies, and strong capital inflows have supported domestic activity and growth,” the IMF said in the report. “The rapid pace of domestic activity, evidenced by rapidly rising inflation, led the central bank to increase the repo policy rate.”

The Reserve Bank of India has increased its benchmark repurchase rate by 1.25 percentage points this year, the most by any central bank in Asia, to cool price gains. The IMF forecast Indian consumer prices may rise 13.2 percent in 2010 compared with 10.9 percent in 2009.

The Reserve Bank’s repurchase rate is 6 percent and the reverse repurchase rate is 5 percent. The central bank is scheduled to issue its next monetary policy statement on Nov. 2.

Earlier this month, Goldman Sachs Group Inc. increased India’s economic growth forecast to 8.5 percent from 8.2 percent for the financial year ending March 31 and estimated inflation at 6.5 percent by March 31, more than its earlier projection of 6 percent.




Asian Pacific Markets: 

Tokyo      Nikkei Stock    9691.43    172.67      1.81     -8.11
                 Nikkei 300       172.07      2.45      1.44     -7.02

Hong Kong  Hang Seng      22880.41    241.27      1.07     +4.61

Sydney     S&P/ASX 200     4686.79     79.90      1.73     -3.77
                All Ord         4738.00     77.37      1.66     -2.96


NIKKEI RISING
Japanese Stocks Advance Nikkei Highest Close in Two Months on Decline of US Dollar, U.S. Data, Fed Speculation; Banks Gain

Japan's Nikkei average rose 1.8 percent to a two-month closing high on Wednesday as the Bank of Japan's credit easing measures the day before continued to induce strong inflows, especially in the financial  sector.

Japanese stocks rose for a second day after U.S. service companies expanded faster than forecast and speculation grew that the Federal Reserve will join the Bank of Japan’s efforts to spur economic growth.

Shares of the financial sector jumped, along with the property sector after the BOJ announced a plan to set up a 5 trillion yen ($60 billion) fund to buy a wide range of assets including Japanese real estate investment trust.

The benchmark Nikkei N225 gained 172.67 points to 9,691.43, its highest close since Aug. 3, while the broader Topix rose 1.4 percent to 844.50.


The Bank of Japan downgraded its assessment of the economy in October for the first time since January 2009, amid mounting uncertainty over the global economic outlook and the impact of a still-strong yen.

Fanuc Ltd., Japan’s largest maker of industrial robots, rose 1.2 percent. Mitsubishi Corp., Japan’s largest commodities trader, increased 2.1 percent after crude and metals prices gained yesterday. Mitsubishi UFJ Financial Group Inc., the country’s largest lender, advanced 1.8 percent. Mitsubishi Estate Co., Japan’s second-biggest developer, gained 1.9 percent. Japan’s central bank pledged yesterday to keep its benchmark interest rate at “virtually zero” and to purchase more assets including real estate investment trusts.

“The Bank of Japan’s action may accelerate movements towards monetary easing globally,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “Confidence grew that the global economy is on a recovery track, and investors will likely put money back into risk assets.”

The Nikkei 225 Stock Average rose 0.7 percent to 9,583.49 as of 9:07 a.m. in Tokyo. The broader Topix index gained 0.5 percent to 836.97, with more than twice as many shares advancing as declining.

The Nikkei 225 has fallen 9.2 percent this year as Europe’s debt crisis, Chinese steps to curb property-price inflation and concern about the pace of the U.S. economic rebound hurt confidence in a global recovery. That’s the second-biggest drop among the world’s 10 largest equity markets. Stocks in the gauge trade at 16.5 times estimated earnings on average, near the lowest level since October 2008.

Overnight Call Rate

Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The index rallied 2.1 percent yesterday in New York after the Institute for Supply Management’s index of non-manufacturing businesses, which covers 90 percent of the world’s largest economy, rose to 53.2 from 51.5. The median forecast from economists surveyed by Bloomberg News was 52. Readings greater than 50 signal growth.

Yesterday, the Bank of Japan cut its overnight call rate target from 0.1 percent and established a 5 trillion yen ($60 billion) fund to buy government bonds and other assets. It acted as the yen’s surge to a 15-year high last month hurt exports.

The bank said it will use the new fund to buy about 3.5 trillion yen in government debt and the remainder will be used to purchase assets such as commercial paper, exchange traded funds and real estate investment trusts.


CHINA:

China Premier Wen: Want To Protect Relative Yuan Stability

Chinese Premier Wen Jiabao said Wednesday that the European Union should refrain from seeking a stronger yuan, adding that the strength of the euro is largely a reflection of fluctuations in the dollar.

 Speaking at a Europe-China business forum in Brussels, Wen said he wanted to protect the yuan's relative stability, continuing China's policy of gradually increasing the currency's flexibility.


SINGAPORE:
Gold Strikes New High
Gold and silver hit new highs in Asia Wednesday as previously cautious Asian participants finally rejoined the bandwagon, spurred by gains made overnight, and a widespread conviction that central banks aren't about to turn off the liquidity spigot.


AUSTRALIA:
SYDNEY Rio Tinto Ltd. (RTP) and BHP Billiton Ltd. (BHP) are continuing to work through the regulatory process to secure approval for its joint venture, a Rio spokesman said Wednesday.



FOREX CURRENCIES SNAPSHOT:
(OCT 6, 4:00 PM EDT)

EUR/USD     1.3936     +0.0100 (0.72%)
USD/JPY     82.9400 -0.2900 (-0.35%)
GBP/USD     1.5894     +0.0004 (0.03%)
CAD/USD     0.9904     +0.0060 (0.61%)
USD/HKD     7.7556     -0.0002 (0.00%)
USD/CNY     6.6893     -0.0013 (-0.02%)
AUD/USD     0.9768     +0.0054 (0.56%) 



World Markets Snapshot:
(OCT 6, 4:00 PM EDT)

Shanghai     2,655.66     +44.98 (1.72%)
Nikkei 225     9,691.43     +172.67 (1.81%)
Hang Seng Index     22,880.41     +241.27 (1.07%)
TSEC     8,284.03     +83.60 (1.02%)
FTSE 100     5,681.39     +45.63 (0.81%)
DJ EURO STOXX 50     2,780.00     +21.44 (0.78%)
CAC 40     3,764.91     +32.98 (0.88%)
S&P TSX     12,501.72     +3.72 (0.03%)
S&P/ASX 200     4,686.80     +79.90 (1.73%)
BSE Sensex     20,543.08     +135.37 (0.66%)

Wednesday's US Economic Calendar:

11:00 a.m.
Oct 1 MBA Weekly Mortgage Applications Survey Market Composite Index (previous 784) Market Composite Index Cur Chg (previous -0.8%) Purchase Index (S.A.) (previous 181.8) Purchase Index (S.A.) Cur Chg (previous +2.4%) Refinance Index (previous 4288.3) Refinance Index Cur Chg (previous -1.6%)

11:30 a.m.
Sept. Challenger Job-Cut Report

12:15 p.m.
Sept. ADP National Employment Report Private Payrolls Forecast (expected +20000)

1:00 p.m.
Tsy Secy Geithner speaks on 'The Path to Global Recovery' in Washington

2:30 p.m.
Oct 1 EIA Petroleum Status Report Crude Oil Stocks (previous 357.86M) Crude Oil Stocks (Net Change) (expected -100K) Gasoline Stocks (previous 222.59M) Gasoline Stocks (Net Change) (expected -300K) Distillate Stocks (previous 173.59M) Distillate Stocks (Net Change) (expected -600K) Refinery Usage (expected 85.4%)

Market Summary, Tuesday, Oct. 5, 2010

Stocks:
Wall Street soared to its highest level in five months on Tuesday after Japan's surprise move to lower interest rates and inject cash into the economy raised hopes for similar move by US authorities. U.S. stocks rallied to a five-month high, boosted by encouraging services-sector data and hopes that global central banks will follow Japan's lead in stimulating economic growth. Bruce Bittles, chief investment strategist at Robert W. Baird, said stocks are attractive because weak economic data gives the Federal Reserve more firepower to engage in quantitative easing, while strong reports signal an improving economy.

Treasuries:
Treasurys maturing in the next three to 10 years rose modestly as investors remain convinced that the Federal Reserve will have to extend more support to the economy. "A lot of trading now is designed around QE, and the concept of how much the Fed will buy, and where the Fed will buy," said Ira Jersey, director in the U.S. interest-rate strategy team at Credit Suisse In New York. "That's going to be a big driver" of trading, Jersey said.


Forex:
The dollar fell sharply against the euro and dropped below levels against the yen not seen since intervention, as investor attention turned to global central bank actions targeted at propping a slowing economies. The dollar came within striking distance of its 15-year low against the yen, though the scale of its move lower against the yen was modest.The euro reached its highest mark since February.



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