Sunday, December 12, 2010

Stock Market Update - Dec.13 - Dec, 17, 2010 Cautious Choppy Gains Seen with Mixed Economic Data

Stock Market Update
Options Expiration Week
Friday, December 17, 2010


Latest US Economic News Headlines:

USA EQUITY INDEXES: (DEC. 17; 4:05 PM EST)

(FRIDAY'S CLOSING NUMBERS)
Dow Jones 11,491.91 -7.34 (-0.06%)
S&P 500    1,243.91 +1.04 (+0.08%)
Nasdaq     2,642.97 +5.66 (+0.21%)


Dow Jones Friday's Closing Averages 12/17/2010: DJIA 11,491.91 DN 7.34
  30 INDUS     11,491.91 DN    7.34 OR    0.06%
  20 TRANSP     5,051.09 DN   36.21 OR    0.71%
  15 UTILS        401.66 UP    1.15 OR    0.29%
  65 STOCKS     3,998.41 DN    8.23 OR    0.21%


US COMMODITY PRICES: (DEC. 17; 4:05 PM EST)
Crude Oil     88.01     - 0.01%
Natural Gas     4.07     + 0.17%
Gasoline     2.32        + 0.29%  
Heating Oil     2.47  - unchanged 
Gold     1374.71     + 0.36%
Silver     29.16     + 0.97%
Copper     4.17     + 1.31% %

US DOLLAR FUTURES INDEX DXY: DEC. 17:  4:06PM EST: 80.39  Up 0.21 (0.26%)


U.S. Dollar Choppy,  Stocks Flat and Commodities Lower in Mixed Trading
U.S. equities closed mixed Friday. The Dow shed 7 points to close the week at 11,491.92, while the S&P added 1 point to end at 1243.91, and the Nasdaq gained almost 6 points to close out the week at 2642.97.

By 1:25 U.S. stocks turned mostly positive as the dollar relaxed its gains for the day.
U.S. Stocks start the session mixed with the DJIA modestly lower off 37 points and the Nasdaq Composite index showing a slight gain. Investors continue to keep an eye on European debt after a five-notch downgrade of Ireland's debt by Moody's.The Dow Jones Industrial Average fell 28 points, or 0.3%, to 11471 in early trading. The Standard & Poor's edged down 0.1% to 1241. The Nasdaq Composite added 0.1% to 2639. U.S. stocks weakened modestly after the Conference Board's index of leading economic indicators increased 1.1% last month, just under the 1.2% gain expected by economists.  

Before the Bell, Friday's stocks may open slightly lower.The euro relinquished gains on Friday the U.S. Dollar is poised to rise.The dollar was also marginally lower at 83.90 yen, having repeatedly failed to break cleanly above 84.50 yen. The dollar fell against the safe-haven Swiss franc CHF: 0.9591 francs, reinforcing a view that sovereign debt problems within the G-4 remain dominant.

U.S. BANK FAILURES:
The FDIC Closed Banks Friday After Hours
The U.S. Government FDIC, and NCUA regulators closed additional Banks and a Credit Union late Friday and seized all assets.The Federal Deposit Insurance Corp announced it closed additional banks. Friday's announcement brings the total failures for 2010 to 157. 

AEA Federal Credit Union, Yuma, AZ., December 17, 2010
Community National Bank, Lino Lakes, MN., December 17, 2010
First Southern Bank, Batesville, AR., December 17, 2010
United Americas Bank, N.A., Atlanta, GA., December 17, 2010
Appalachian Community Bank, FSB, McCaysville, GA., December 17, 2010
Chestatee State Bank, Dawsonville, GA., December 17, 2010
The Bank of Miami,N.A., Coral Gables, FL., December 17, 2010
Beehive Credit Union, Salt Lake City, UT., December 14, 2010

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

Online Consultancy Network™ Bank Failure List
http://ocnww.blogspot.com/2010/09/bank-failure-list-update-september-1.html


FDIC Lowers 2011 Budget as Bank Failures Slow

The FDIC’s board of directors has approved a $3.96 billion operating budget for 2011, down slightly from the $3.99 billion budget approved by the board last December for the 2010 calendar year.

The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today approved a $4.0 billion Corporate Operating Budget for 2011, down slightly from the 2010 budget the Board approved last December.

"I am happy that we are able to see a slight drop in next year's budget while devoting new resources to implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act," said FDIC Chairman Sheila Bair.

"We appear to have turned the corner on financial institution failures, but significant post-resolution work remains. Staff met the challenge to find savings to offset a portion of the additional resources needed to carry out our new responsibilities under the Dodd-Frank Act. This budget provides sufficient funding to resolve additional failures as they occur and to position the FDIC for the new challenges that lie ahead."
 
In conjunction with its approval of the 2011 operating budget, the Board also approved an authorized 2011 staffing level of 9,252 employees, up about 2.5 percent from the current 2010 authorization of 9,029.

On a net basis, all of the new positions are temporary as are 40 percent of the total 9,252 authorized positions for 2011. Temporary employees have been hired by the FDIC to assist with bank closings, management and sale of failed bank assets, and other activities that are expected to diminish substantially as the industry returns to more stable conditions.

There were 140 bank failures in 2009 and 157 so far in 2010.

"It is important for the public to understand that the FDIC's operating budget does not in any way involve the use of taxpayer funds," said Chairman Bair. "All of the FDIC's operating expenses are paid from the Deposit Insurance Fund—the DIF—which is fully funded by the industry through deposit insurance premiums."
 


In December 2009, the FDIC boosted the 2010 budget by a hefty 55 percent from the previous year in order to cope with what they expected to be another round of excessive bank failures. Officials are touting the fact that no increase is planned for the upcoming year as an important sign that the financial sector is at least stabilizing.
http://www.fdic.gov/news/news/press/2010/pr10267.html


US Conference Board November Leading Index +1.1%

The index of leading economic indicators picked up strength in November, indicating "some sparks" in the U.S. economy.  The leading index increased 1.1% last month after a revised gain of 0.4% in October first reported as 0.5%, the Conference Board said Friday.

In November, nine of the 10 leading indicators increased. The most positive indicators were vendor deliveries, the interest-rate spread and jobless claims. The only negative was building permits.

The coincident index was up 0.1% in November after a revised 0.2% gain in the prior month first reported as 0.1%.  The lagging index slipped 0.1% after a revised flat reading first reported as an increase of 0.1%.

HOUSE OKS TWO-YEAR TAX CUT EXTENSION
The House agreed to a two-year extension of tax cuts for individuals and businesses, sending the bill to President Barack Obama for signature and setting up a renewed fight over taxes in the 2012 election season.

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THURSDAY: In afternoon trades U.S. stocks broadly rose Thursday, fueled by the industrial sector. The dollar declined 26% leading equities and commodities back up. U.S. equities closed higher Thursday with the Dow finishing up 41 points today to close at 11,499.25, the S&P added 7 points to end at 1242.87, and the Nasdaq gained 20 points to finish at 2637.31 for the day.  

In mid-afternoon trades the Dow Jones Industrial Average rose 49 points, to 11502. Bank of America led the blue chips higher, adding 3.3%, following reports that it has begun settlement discussions with some of its largest mortgage investors. Alcoa rose 3.2% and General Electric tacked on 1.9%.

The Nasdaq Composite added 0.7% to 2637. The Standard & Poor's 500-stock index gained 8.45 points to 1243.57, led by industrial and financial companies. All 10 of the S&P 500's sectors traded in positive territory.
 
At mid-day Thursday, the Dow Jones Industrial Average rose 34 points, to 11490. The Nasdaq Composite added 0.7% to 2636. The Standard & Poor's 500-share index was up 0.5% to 1241, led by industrial and material companies. . 

At 11:00 AM EST the dollar moved up and stocks edged up in low volume.
At 10:00 AM EST stocks moved lower in mixed choppy trading. The Dow Jones Industrial Average edged down 5 points to 11453, weighed by a slew of data created a murky portrait of the U.S. economic recovery and investors harbored simmering concerns over fragile euro-zone finances going into the end of year trading and Friday's options expirations. The Nasdaq Composite added 0.2% to 2623. The Standard & Poor's 500-share index edged up 0.1% to 1236. The dollar strengthened against both the euro and the yen. The euro was trading recently at $1.3203, down from $1.3210 late Wednesday in New York. 

U.S. economic data painted a mixed picture of the economic recovery on Thursday. The Federal Reserve Bank of Philadelphia reported that its index of general business activity in the mid-Atlantic region moved to 24.3 in November, topping economists' forecast, but shipments and hiring slowed.

The U.S. current-account deficit widened in the third quarter, reflecting rising imports of consumer goods. The shortfall rose 3.2% to $127.2 billion, the Commerce Department said Thursday.

U.S. Stocks opened higher Thursday, as the dollar declined before the market open to below Wednesday's close.  Another low volume trading day, under mixed trading patterns is predicted as we move into the option's expiration on Friday and a holiday schedule in both the U.S. and Europe influence the market action.. The Dow is up 34 points, the S&P is up 2 points and Nasdaq is up 4 points at 9:45 EST.


THURSDAY: U.S.  Futures look flat under mixed economic signals.
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CARBON TAX LAW APPROVED
California - the world's eighth largest economy approves first U.S. carbon-trading scheme

In the first closely watched carbon tax law to take effect in the U.S., California has set the bar for the future worldwide U.N. carbon tax aimed at every country under its jurisdiction. The program was proposed in the most liberal, environmental cause driven state in the U.S. in hopes that the public would buy-in to the "greenhouse gas emissions" climate scheme.

State regulators passed a "cap-and-trade" framework to let companies buy and sell permits, giving them an incentive to emit fewer gases. The aim is to create the second-largest market in the field, after Europe's.

State officials hope the scheme will be copied across the US, but opponents warn it may harm California's growth and lead to higher electricity prices.  

The scheme means that from 2012 California will allocate licences to pollute and create a market where they can be traded.  Every business and home owner with a fireplace and utilities will now be taxed on their carbon emissions allowance.

A company that emits fewer greenhouse gases than its permits allow, could sell the extra capacity to a dirtier firm. Over time the total amount of greenhouse gas emissions - the cap - is to be reduced.  Although all firms will eventually need to buy greenhouse gas allowances, most of the permits will be given away in the first three-year period. 

California's Air Resources Board approved the new rules late on Thursday. They are part of a landmark state climate bill passed by the legislature in 2006, which set 1 January 2011 as the deadline for enacting a cap-and-trade system.


NEW CALIFORNIA CARBON TAX LAW
California Scheduled To Adopt Cap-And-Trade Rules

By Cassandra Sweet
December 16, 2010

(Dow Jones)--California regulators are scheduled Thursday to adopt the nation's first large-scale cap-and-trade program for greenhouse-gas emissions as part of the state's four-year-old climate law.

Under the proposed rules, scheduled to start in 2012, the state Air Resources Board would place a limit, or cap, on greenhouse-gas emissions for the state that would decline over time. Power plants, refineries and other industrial facilities that emit carbon dioxide and can't cut their emissions by the required amount could obtain pollution allowances from the state or buy them from other emitters with excess allowances.

Companies with facilities that emit carbon dioxide also could purchase carbon credits, or offsets, tied to emission-reduction projects, such as forests that are managed to contain carbon dioxide, to comply with required emission cuts.

The Air Resources Board plans to vote on a set of proposed final cap-and-trade rules at a meeting Thursday. The meeting comes less than a week after the world's nations reached agreement on a package of climate initiatives at a United Nations-sponsored summit in Cancun, Mexico. It also comes six weeks after a referendum in which Californians voted to keep the state's climate law intact.

California's Global Warming Solutions Act of 2006 requires the state to cut greenhouse gas emissions to 1990 levels by 2020. In addition to the proposed cap-and-trade program, the state has established an aggressive renewable-energy mandate and a requirement that the carbon content of the state's vehicle fuels be cut by 10% by 2020, as part of efforts to achieve the emissions-reduction goal.

Under the proposed final cap-and-trade rules, the state would give away most allowances in the first few years of the cap-and-trade program, then sell many allowances in auctions in later years. The proposed rules would establish a floor on the price of allowances sold at auction of $10 per metric ton of carbon dioxide.

Greenhouse-gas emitters could purchase carbon offsets--which are expected to trade at a discount to emission allowances--to comply with 8% of their annual emission obligations.

The ARB has said it will consider allowing carbon credits from reforestation projects in Mexico and other countries, among other types of projects. Some carbon market participants say the agency should act quickly to approve more types of projects to avoid a lack of supply of such credits to meet demand.


420,000 MORE AMERICAN'S LOST THEIR JOBS LAST WEEK
U.S. UNEMPLOYMENT RATE 3.3%


The number of U.S. workers filing first-time claims for unemployment benefits was reported as declined last week.

Applications for jobless insurance payments decreased by 3,000 to 420,000, the lowest in three weeks, Labor Department figures showed today. The total number of people receiving unemployment insurance and those getting extended payments rose.

Fewer firings signal employers may be gearing up to add to their payrolls and help reduce a jobless rate hovering near a 26-year high. While the economy is gaining momentum heading into 2011, Federal Reserve policy makers said this week it isn’t strong enough to reduce unemployment.

The number of people continuing to collect jobless benefits rose by 22,000 in the week ended Dec. 4 to 4.14 million.  The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
   
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.3 percent in the week ended Dec. 4.

Today’s report showed. Forty-six states and territories reported an increase in claims, while seven had a decrease. Under current legislation, the extension in emergency benefits expired Nov. 30, which the Labor Department has estimated would interrupt aid to 1.36 million before the last week of 2010.

The U.S. added 39,000 jobs in November, fewer than forecast, while the jobless rate rose to 9.8 percent, the highest since April, the Labor Department reported Dec. 3.

The Fed’s Open Market Committee said in a statement Dec. 14 following their last meeting of the year that the recovery has been “disappointingly slow.”


U.S. HOME MORTGAGE RATES RISE AGAIN
30-Year Fixed At 4.83%

Mortgage rates rose in the latest week, extending their bounce off record lows they set in the fall, according to Freddie Mac's (FMCC) weekly survey of mortgage rates. Rates have climbed in recent weeks. Yields on Treasurys have jumped sharply recently, and mortgage rates generally track the yields, which move inversely to Treasury prices.

The 30-year fixed-rate mortgage averaged 4.83% for the week ended Thursday, up from the prior week's 4.61% average but down from 4.94% a year ago. Rates on 15-year fixed-rate mortgages were 4.17%, up from 3.96% in the previous week but down from 4.38% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.77%, up from the prior week's 3.60% but down from 4.37% a year earlier. One-year Treasury-indexed ARMs were 3.35%, up from 3.27% the prior week but down from 4.34% a year earlier.


US NOVEMBER REPORTED HOUSING STARTS
Housing starts rise 3.9% in November from October to a seasonally adjusted annual rate of 555,000 on strength in the single-family market. However, building permits, a gauge of future construction, are down 4.0% at 530,000.


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WEDNESDAY: U.S. equities closed lower Wednesday as the Dollar remained near its high. The Dow dropped 19 points today to 11457, the S&P shed 6 points to 1235, and the Nasdaq fell 10 points to 2617.

The Dow remained in positive territory, while the S&P and Nasdaq declined in afternoon trading as the dollar rebounded to a high intraday high. The dollar rose against the yen and euro for a second day before Wednesday's reports.

In morning trading, U.S. Stocks rose into positive territory as the dollar relaxed its gains.The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.3%. The euro slipped to $1.3350, from $1.3381 late Tuesday. U.S. stocks edged higher Wednesday despite persisting worries over the euro-zone debt crisis as investors were encouraged by data showing U.S. inflation remains tame while New York manufacturing conditions have improved.

The Dow Jones Industrial Average rose 29 points, or 0.3%, to 11506, The Nasdaq Composite added 0.4% to 2638. The Standard & Poor's 500 index rose 0.2% to 1243.

North American Appliance Shipments Rose 3.7% In November
The Association of Home Appliance Manufacturers reported that shipments of household appliances such as stoves and refrigerators rose at their fastest clip for four months in North America during November, according to a report published Wednesday.

The number of appliances aimed at the U.S. market climbed 3.7% to 4.5 million in the four weeks to Nov. 27, led by shipments of stoves, ovens and refrigerators. The Association of Home Appliance Manufacturers, a trade group, said overall shipments are up 3% year-to-date.

The monthly data includes washers, dryers, dishwashers, refrigerators, freezers, ranges and ovens, and is closely watched as a sign of sales prospects for manufacturers such as Whirlpool Corp. (WHR) and as a leading indicator for housing starts.

US MORTGAGE APPLICATION VOLUME DROPS
The volume of mortgage applications filed in the U.S. last week falls a seasonally adjusted 2.3% from the previous week, the Mortgage Bankers Association reports, as mortgage rates rose to their highest levels in six months.

US NAHB HOUSING INDEX UNCHANGED
U.S. home builders remain gloomy about the housing market in December despite scattered signs of improvement in the economy. The National Association of Home Builders' housing market index holds at 16, matching Street expectations. 

Before the Bell:
Wednesday's market looks like it will open a little lower.as the dollar's overnight rise lowered commodities, provider's and general market equities.

FOREIGNERS NET BUYERS OF US ASSETS
China's holdings of U.S. assets rose by $23.3 billion to $906.8 billion in October, its largest position in nearly a year, according to the monthly Treasury International Capital report. Overall, foreigners were net buyers of long-term U.S. financial assets.


US Consumer Prices Rise 0.1%, Increase 0.1% 
Excluding Food, Energy Costs

The cost of living in the US rose less than forecast in November, indicating higher prices for commodities such as fuel aren't filtering through into other goods and services.

New York Manufacturing Data
New York manufacturing activity increased this month after contracting in November, tempered the rally though. The Empire State's business conditions index jumped to 10.57 in December from -11.14 in November.

U.S. Called Vulnerable to Rare Earth Shortages

The United States is too reliant on China for minerals crucial to new clean energy technologies, making the American economy vulnerable to shortages of materials needed for a range of green products — from compact fluorescent light bulbs to electric cars to giant wind turbines.

So warns a detailed report to be released on Wednesday morning by the United States Energy Department. The report, which predicts that it could take 15 years to break American dependence on Chinese supplies, calls for the nation to increase research and expand diplomatic contacts to find alternative sources, and to develop ways to recycle the minerals or replace them with other materials.

At least 96 percent of the most crucial types of the so-called rare earth minerals are now produced in China, and Beijing has wielded various export controls to limit the minerals’ supply to other countries while favoring its own manufacturers that use them.

“The availability of a number of these materials is at risk due to their location, vulnerability to supply disruptions and lack of suitable substitutes,” the report says, which also mentions some concerns about a few other minerals imported from elsewhere, such as cobalt from the Congo.

The Energy Department report is being released the same morning that cabinet officials from China and the United States will meet in Washington to discuss economic and commercial issues.

While no detailed agenda has been released, the talks are expected to include American objections to China’s tightening restrictions on rare earth exports — like a two-month halt this autumn on shipments to Japan, and a shorter-lived slowdown of exports to the United States and Europe. 

Read the entire article at Yahoo!:
http://finance.yahoo.com/news/US-Called-Vulnerable-to-Rare-nytimes-1596846706.html?x=0&sec=topStories&pos=2&asset=&ccode=

Tuesday US Stocks held some gains after the FOMC statement. U.S. equities closed slightly higher Tuesday: the Dow gained 48 points today to 11476.54, the S&P gained 1 point to close at 1241.59, and the Nasdaq rose 2 points to finish at 2627.72.

U.S. stocks rose to two-year closing highs Tuesday as the Federal Reserve stuck to its easy-money policy and economic data showed some minor improvements. The Dow touched 11,500 for a short time before closing for the day at 11,476. The Dow pulled back from the two-year intraday high later in the session along with other market measures as investors took profits.   

In morning trading, U.S. stocks climbed Tuesday as investors were encouraged by data showing a bigger-than-expected rise in U.S. retail sales in November while U.S. business sales for October outpaced gains in inventories.

FED TO KEEP RATES LOW
Funds To Stay Exceptionally Low For Extended Period

FOMC Report Summary:
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment. Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak.

Employers remain reluctant to add to payrolls. The housing sector continues to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.

The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability. ###

The Dow Jones Industrial Average rose 66 points, or 0.6%, to 11494. The Nasdaq Composite rose 0.4% to 2636. The Standard & Poor's 500 index added 0.4% to 1245. The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.2%. Treasurys fell, lifting the yield on the 10-year note up to 3.36%. Crude-oil futures slipped while gold futures also declined. 

The Commerce Department reported a 0.8% increase in retail sales for November, topping economists' expectations for a 0.5% rise. Excluding autos, retail sales in November rose 1.2%, topping expectations for a gain of 0.7%. Inventories at U.S. businesses rose less than expected in October as auto dealers and other retailers sold goods faster than they replenished stockrooms. Inventories increased 0.7% from the prior month to a seasonally adjusted $1.418 trillion, the highest level since February 2009, while U.S. business sales rose 1.4% to $1.119 trillion. October's sales figure was the highest since September 2008.

U.S. producer prices increased more than expected last month, pushed higher by rising energy and food costs.  


Opening Bell:
US Stocks opened higher in light trading; DJIA Up 30 as the dollar declines, Caterpillar and Disney rise.  Tuesday's activity comes as investors await the Federal Open Market Committee's latest policy statement, due at 2:15 p.m. EST. The market isn't expecting any changes in the FOMC's policy direction, but will keep a close eye on the language it uses to assess the economy and how its $600 billion stimulus package is faring so far.
 
The Dow Jones Industrial Average rose 30 points, or 0.3%, to 11459. Among its top performers, Walt Disney added 0.7% while Bank of America climbed 0.6% and Caterpillar rose 0.5%. The Nasdaq Composite rose 0.2% to 2630. The Standard & Poor's 500 index added 0.2% to 1243, with its health-care sector in the lead.

Tuesday, stocks are poised to open flat or lower. Stock index futures were little changed on Tuesday as investors awaited the Federal Reserve's assessment of the economy. U.S. retail sales made small gains last month. The Labor Department reported the Producer Price Report for November that show some gains.  The dollar will open lower to flat from Monday's close.  The Euro is unchanged and stands at 1.3435.

U.S. INVENTORIES CLIMB
Inventories held by U.S. businesses rose for a 10th consecutive month in October. That translates into fewer buyers of existing inventories. This is not a good sign for the businesses that are buying and holding inventories that have access to financing. November Business Inventories print at 0.7%, slightly below expectations of 1.0%, and a reduction from the previous month's 1.3%.

U.S. HOME FORECLOSURES NOT 
HELPED BY GOVERNMENT PROGRAM  
U.S. Foreclosure Prevention Falling Short, Watchdog Panel Finds 

A $75 billion White House program set up to help troubled homeowners is expected to prevent roughly 800,000 foreclosures. Much less than the 3 to 4 million foreclosures that Treasury aimed to stop, and vastly fewer than the 8 to 13 million foreclosures expected to take place this year.

A U.S. Treasury  program  aimed at preventing 3 million  foreclosures  is likely to fulfill less than a third of its goal, a congressional watchdog reported. U.S. Real Estate started finding foreclosed U.S. homes a year ago for Australian investors, received almost half of all inquiries in the last two months.

US PROPOSES NEW BANK CAPITAL STANDARDS
U.S. regulators propose new minimum capital standards for all financial institutions, mandating that the nation's largest banks will be subject to the same minimum standards for their capital cushions as smaller institutions.

AUDITOR OVERSIGHT BOARD PROPOSES FEES, INSPECTIONS
Large U.S. broker-dealers could be required to pay $1 million annually or more for costs related to audits required by the Dodd-Frank Act, if the Public Company Accounting Oversight Board's proposal becomes effective.

U.S. Regulators Review 
Foreclosure Files At 14 Banks
Examiners are reviewing samples of borrower foreclosure files from the servicer divisions of sixteen financial institutions including fourteen banks.

"In reviewing these files, examiners are checking for a documented audit trail that demonstrates that data and information in foreclosure affidavits and claims are accurate and comply with state laws," said acting Comptroller of the Currency John Walsh in a letter to the Democrats obtained by MarketWatch. 

Walsh was responding to a letter sent by Rep. Brad Miller of North Carolina and nine other Democrats in November urging the counsel to request the files to determine if the documents satisfy contractual representations and warranties for the mortgages in question, and if not, any potential liability that may result.


U.S. INFLATION RAISING
Wholesale prices outside the volatile food and energy categories rose modestly last month due to a large increase in the cost of new cars.

RETAIL SALES INCREASE
Retail purchases rose for a fifth consecutive month in November.
US retail sales rose in November for the fifth consecutive month, official figures show, driven by holiday season demand.

AIRLINES MAKING MONEY FROM EMERGING MARKETS
World's 5 biggest airlines now from Asia, Latin America

The world's five biggest airlines now hail from Asia and Latin America, highlighting the industry's shift away from the U.S. and Europe to higher-growth countries, the International Air Transport Association said Tuesday. The International Air Transport Association says airlines will make record earnings this year, but that margins remain tight.

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MONDAY: In late trading Monday, a broad sell-off hit the market.  The day ended in a mixed, low volume, choppy selling mode with minor gains seen in the Dow and S&P sectors. U.S. equities closed with the Dow rising 18 points today to 11428.56, the S&P was unchanged at 1240.06, and the Nasdaq fell 12.63 points to 2624.91. 

In early Monday trading U.S. stocks registered broad gains on low volume Monday amid some M&A announcements and a declining dollar. 

The Dow Jones Industrial Average rose 43 points to 11,450, the Nasdaq Composite added 0.7 points to 2644 and the  Standard & Poor's 500 index gained 0.4% to 1246, led by energy and materials stocks.The dollar edged lower, with the U.S. Dollar Index, tracking the U.S. currency against a basket of six others, off 0.6%.The euro firmed up 0.0188 at 1.3414.
.
U.S. Stock futures are pointing to a higher open Monday as the dollar declined from Friday's close. Dow Jones industrial average (INDU), S&P 500 (SPX) and Nasdaq (COMP) futures were all up modestly ahead of the opening bell.
  
Monday morning, the dollar declined against a basket of major currencies causing commodities and equities to rise before the bell. The euro remains under pressure against the dollar. It was down to $1.3211 on Monday. World markets rose Monday after Chinese authorities refrained from raising interest rates over the weekend and said they favored a strong growth policy despite high inflation.

U.S. stocks edged up at the close as the dollar relaxed its gains Friday. The U.S. trade deficit narrowed and a surge in U.S. October exports and brightening consumer sentiment and encouraged investors. Stocks rose modestly Friday the Dow added 40 points today to 11410, the S&P gained 6.85 points to 1239.85, and the Nasdaq rallied 20 points to 2637.



CRUDE OIL:

FRIDAY: U.S. Crude Oil: $88.01 per barrel
FRIDAY'S OIL FUTURES: Nymex Crude Settles 32c Higher At $88.02/Bbl 
THURSDAY'S OIL FUTURES: Nymex Crude Settles Down 92c at $87.70 
WEDNESDAY'S OIL FUTURES: Nymex Crude Settles 34c Higher At $88.62/Bbl 


Oil Prices Higher Friday
Oil prices edged higher Friday, bucking a stronger dollar as traders focused on signs of an improving U.S. economy.

Crude oil futures finished higher Friday, as signs of economic improvement helped boost the case for pricier oil.

Light, sweet crude for January delivery settled up 32 cents, or 0.4%, at $88.02 a barrel on the New York Mercantile Exchange. Prices earlier fell as low as $87.01 in morning trading in New York. Brent crude on the ICE futures exchange settled up 7 cents, or 0.1%, at $91.67 a barrel. 

Front-month January reformulated gasoline blendstock, or RBOB, recently settled up 1.35 cents, or 0.6%, at $2.3178 a gallon. January heating oil fell 0.26 cent, or 0.1%, at $2.4737 a gallon.


Crude Jumps On Drop In US Oil Stockpiles
Department of Energy Reported a large drop in oil stockpiles.
DOE: US Crude Oil Stocks -9.854M Bbl In Wk; Seen -2.7M Bbl
US Crude Oil Stocks -9.854 Mln Bbl At 346.018 Mln Bbl
US Gasoline Stocks +0.809 Mln Bbl At 214.773 Mln Bbl
US Distillate Stocks +1.094 Mln Bbl At 161.305 Mln Bbl
US Distillate Stocks +1.094M Bbl In Wk; Seen -0.2M Bbl
US Refineries Ran At 88.0%; Seen 87.20%

U.S. crude inventories posted their biggest draw last week since September 2002, according to data released Wednesday by the U.S. Department of Energy.

Crude oil stockpiles fell by 9.9 million barrels to 346.0 million barrels for the week ended Dec. 10, compared with an average survey estimate of a 2.7-million-barrel decline. On Tuesday afternoon, the American Petroleum Institute, an industry group, reported a that stocks fell by 1.4 million barrels.

Investors reacted positively to the news. Crude oil futures for January rose by 0.7% to $88.91 a barrel on the New York Mercantile Exchange. January contracts for gasoline were recently up 0.6% to $2.3085 a gallon and heating oil was up 0.9% at $2.4900 a gallon.

The large decline in crude stocks last week was aided by a 1.4% drop in imports. Even so, oil inventories remain well above the range typically seen this time of the year. Meanwhile, similar supply overhang persists for refined products as well.

Gasoline stockpiles rose by 809,000 barrels to 214.8 million barrels, the department's Energy Information Administration said in its weekly report, shy of the forecast of a 1.9-million barrel increase based on a Dow Jones Newswires survey of 15 analysts.

Distillate stocks, which include heating oil and diesel fuel, added 1.1 million barrels to 161.3 million barrels versus analysts' estimate calling for a decline of 200,000 barrels.

Refining capacity utilization rose by 0.5 percentage point to 88.0%. Analysts had expected a 0.3-percentage-point drop.

Tuesday, API reported that gasoline inventories fell by 2.4 million barrels and distillate stocks fell by nearly 2 million barrels.
Light, sweet crude for January delivery recently traded 88 cents, or 1%, lower at $87.40 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded down 55 cents at $90.66 a barrel.

The U.S. Department of Energy is due to report weekly oil inventories data at 10:30 a.m. EST Wednesday. Crude stockpiles are expected to fall by 2.7 million barrels, according to a Dow Jones Newswires survey. But gasoline stockpiles are seen rising by 1.9 million barrels.

Distillates, which include heating oil and diesel, are seen falling by 200,000 barrels.

The increase in gasoline stockpiles follows a weak report on gasoline demand on Tuesday from MasterCard Advisors. U.S. weekly demand fell 1.3% from a year ago, while gasoline use has grown by a slim 0.4% this year.

TUESDAY OIL FUTURES: Nymex Crude Settles 33c Lower At $88.28/Bbl

Crude futures settled slightly lower Tuesday, held down in part by a report on weak U.S. gasoline demand, as traders remain wary of pushing toward the key $90-a-barrel level.

Light, sweet crude for January delivery settled down 33 cents, or 0.4%, at $88.28 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 2 cents higher at $91.21 a barrel.

Oil prices retreated from nearly flat after a report showed U.S. gasoline demand fell 2.7% last week, from the prior weekend that included the post-Thanksgiving weekend shopping period. Demand was down 1.3% from a year ago, according to the SpendingPulse report compiled by MasterCard Advisors, which sent gasoline futures lower.

Front-month January reformulated gasoline blend-stock, or RBOB, settled down 2.20 cents, or 1%, at $2.2964 a gallon.

MONDAY OIL FUTURES: Nymex Crude Closes Up 81c At $88.60/Bbl

Light, sweet crude for January delivery recently traded 43 cents, or 0.5%, higher at $88.22 a barrel on the New York Mercantile Exchange. 

  OPEC ministers meeting in Quito, Ecuador, over the weekend left oil-production quotas intact at 24.85 million barrels a day, though the cartel actually produces slightly more than that level. Saudi Arabia oil minister Ali Naimi, OPEC's de facto leader, said the market is in balance. 


FRIDAY'S OIL FUTURES: Nymex Crude Settles 58c Lower At $87.79/Bbl
Oil prices held steady Friday, as markets shrugged off China's move to raise its banks' reserve requirements and awaited a decision due this weekend on interest rates.

Light, sweet crude for January delivery fell 2 cents at $88.35 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange added 12 cents, or 0.1%, at $91.11 a barrel.

Front-month January reformulated gasoline blend-stock, or RBOB, recently fell 0.98 cent, or 0.4%, to $2.3307 a gallon. RBOB's retreat comes a day after an outage at a key gasoline-making unit at the Hovensa refinery in St. Croix sent gasoline futures soaring.



NATURAL GAS:
THURSDAY: Natural Gas: $ 4.07
THURSDAY'S US GAS: Futures Settle Down 4.1% At $4.048/MMBtu
WEDNESDAY'S US GAS: Futures Close Down 0.8% At $4.220/MMBtu  
TUESDAY'S US GAS: Futures Settle Down 3.7% $4.255/MMBtu 
MONDAY'S US GAS: Futures Close Up 0.1% $4.421/MMBtu

THURSDAY: Natural gas futures extended their earlier losses Thursday after a weekly government storage report reinforced the view that gas stockpiles will be ample to meet winter's heating needs. Natural gas in U.S. storage for the week ended Dec. 10 stood at 3.561 trillion cubic feet, 9.9% above the five-year average. The storage build was more than the five-year average withdrawal for the week of 153 bcf, but less than last year's 186-bcf draw. 

Natural gas for January delivery recently traded 14.5 cents lower, or 3.4%, at $4.077 a million British thermal units on the New York Mercantile Exchange. Futures fell as low as $4.063/MMBtu after the report, the lowest intraday price since Nov. 19. Natural gas futures slid Thursday as expectations of a larger-than-average weekly draw from gas stockpiles weren't enough to support prices in the well-supplied U.S. market.

Natural gas for January delivery recently traded 5.3 cents, or 1.3%, lower at $4.169 a million British thermal units on the New York Mercantile Exchange. The benchmark contract Wednesday settled at its lowest level since Nov. 30, as warming forecasts for some major heating markets near the end of the month hit demand expectations for the fuel.  

 

PRECIOUS METALS:

FRIDAY: Gold:  $ 1,377
FRIDAY: Silver:$ 29.20

FRIDAY: Gold futures rose Friday afternoon as the dollar relaxed its earlier gains. Thinly traded nearby gold, for December delivery, gained $8.20, or 0.6%, to settle at $1,378.60 a troy ounce on the Comex division of the New York Mercantile Exchange. The most-actively traded contract, for February delivery also gained 0.6%, to $1,379.20. 


Gold pulls back in the morning as US Dollar gains ground in early market trading.The most actively traded contract, for February delivery, recently was down $2.90, or 0.2%, at $1,368.10 a troy ounce on the Comex division of the New York Mercantile Exchange. 

Engelhard Corp's base price for industrial gold bullion was $1371.48 per troy ounce, up $5.51 from previous. It's selling price for gold in fabricated form was $1474.34, up $5.93.

Handy & Harman's base price for gold was $1368.50 per troy ounce, up $5.50. The fabricated form price was $1477.98, up $5.94.


THURSDAY: Gold futures fell were trading down most of today.The contract continued to see selling pressure as investors booked gains ahead of the end of the year. The most actively traded contract, for February delivery, settled down 1.1%, or $15.20, at $1,371 a troy ounce on the Comex division of the New York Mercantile Exchange.

Thursday's Settlements (Range includes Floor and Electronic Trading):
London PM Gold Fix: $1,3763.00; previous PM $1,388.75
Feb gold $1,371.00, down $15.20; Range $1,361.60-$1,387.30
Mar silver $28.782, down 4.71 cents; Range $28.350-$29.255
Jan platinum $1,698.60, down $5.80; Range $1,686.50-$1,707.30
Mar palladium $742.55, down $10.10; Range $730.00-$758.00

In early morning trades the Comex gold futures trended lower Thursday as traders lock in profits ahead of the new year.Gold futures continue to see selling pressure as investors book gains ahead of the end of the year.

The most actively traded contract, for February delivery, was recently down $14.30, or 1%, at $1,371.90 per troy ounce on the Comex division of the New York Mercantile Exchange

Engelhard Corp's base price for industrial gold bullion was $1365.97 per troy ounce, down $25.79 from previous. It's selling price for gold in fabricated form was $1468.41, down $27.73.
Handy & Harman's base price for gold was $1363.00 per troy ounce, down $25.75. The fabricated form price was $1472.04, down $27.81.  

WEDNESDAY: The most actively traded contract, for February delivery, settled down 1.3%, or $18.10, at $1,386.20 a troy ounce on the Comex division of the New York Mercantile Exchange.  
Wednesday Settlements (Range includes Floor and Electronic Trading):
London PM Gold Fix: $1,388.75; previous PM $1,394.50
Feb gold $1,386.20, down $18.10; Range $1,382.30-$1,398.00
Mar silver $29.253, down 5.35 cents; Range $28.925-$29.645
Jan platinum $1,704.40, down $9.50; Range $1,690.00-$1,711.40
Mar palladium $752.65, down $15.55; Range $741.10-$763.05

Wednesday's Engelhard Corp's base price for industrial gold bullion was $1391.76 per troy ounce, down $5.76 from previous. It's selling price for gold in fabricated form was $1496.14, down $6.19.  Handy & Harman's base price for gold was $1388.75 per troy ounce, down $5.75. The fabricated form price was $1499.85, down $6.21.

TUESDAY: Comex Gold Edges. Gold futures settled in positive territory Tuesday, and rose slightly in after-market trade as the Federal Reserve's interest-rate setting committee said it will maintain current monetary-easing policies.Gold futures made modest gains in after-market trade as the Federal Open Market Committee announced no change to monetary policy Tuesday afternoon. The contract gained 0.5%, or $7.10, to $1,405.10 per troy ounce in electronic trading.  

Monday, in late afternoon trades, the most actively traded contract, for February delivery, settled up 0.5%, or $6.30, at $1,404.30 per troy ounce on the Comex division of the New York Mercantile Exchange.

In early morning trading Monday the most actively traded contract, for February delivery, settled up $13.10, or 1% higher, at $1,398.00 per troy ounce on the Comex division of the New York Mercantile Exchange.

Copper Sets New Settlement Record At $4.2070 
Monday's Settlements (Range includes Floor and Electronic trading):
London PM Gold Fix: $1,375.25; previous PM $1,391.25
Feb gold $1,398.00, up $13.10; Range $1,380.80-$1,400.20
Mar silver $29.624, up $1.019 cents; Range $28.495-$29.740
Jan platinum $1,697.30, up $22; Range $1,671.60-$1,704.30
Mar palladium $752.45, up $19.75; Range $734.50-$765.85
 



U.S. TREASURYS/BONDS:

FRIDAY: Treasurys rallied Friday, supported by flight-to-safety demand and bargain hunting from the recent sell-off. Earlier demand for U.S. Treasurys was mixed, with the two-year note flat, but the 10-year note up, pushing its yield to 3.40%.

Bonds extended Thursday's gains, a relief for a market that has been hammered over the past week. The benchmark 10-year note's yield, which moves inversely to its price, has fallen by about 24 basis points from the seven-month peak of 3.568% hit Thursday. 
As of 4 p.m. EST, the 10-year note was 28/32 higher to yield 3.326%, little changed from 3.333% at the end of last week.

The 30-year bond was 1 31/32 higher to yield 4.419% while the two-year note was 3/32 higher to yield 0.605%.
U.S. two-year swap spread, which measures the differential between the two-year swap rate and two-year Treasury yield and a main gauge of credit risks, was 1 basis point tighter at 23 basis points. The 10-year swap spread was 2 basis points tighter at 9.75 basis points.
COUPON   ISSUE    PRICE     CHANGE       YIELD    CHANGE
==============================================
1/2%     2-year   99 25/32   up 3/32     0.605%    -4.4BP
3/4%     3-Year   99 9/32    up 5/32     0.990%    -5.8BP
1 3/8%   5-year   97 10/32   up 13/32    1.948%    -8.8BP
2 1/4%   7-Year   97 9/32    up 22/32    2.682%    -11.0BP
2 5/8%   10-year  94 5/32    up 28/32    3.326%    -10.8BP
4 1/4%   30-year  97 6/32    up 1 31/32  4.419%    -12.4BP

2-10-Yr Yield Spread: +272 BPS Vs + 279 BPS
Source: Tradeweb

THURSDAY: Demand for U.S. Treasurys fell, pushing the yield on the 10-year note up to 3.54%.

WEDNESDAY: Treasury prices were modestly higher after a report that showed inflation in the US remains tame. Most Treasurys clung to modest gains Wednesday in volatile trading after a report that showed inflation remains subdued.

The market was also a bit stronger after another Federal Reserve purchase of Treasurys. The Fed bought $6.78 billion of Treasurys maturing in the next four to six years after getting offers for $13.114 billion.

In recent trading, the 10-year note was up 5/32 to yield 3.451% and the seven-year was up 8/32 to yield 2.792%. The two-year was up 1/32 to yield 0.637%. The 30-year, however, was weaker, off 16/32 to yield 4.555%. Overnight, Treasury yields hit highs that were last seen in May, with the 10-year yield pushing as high as 3.504%. 

TUESDAY: Treasurys fell Tuesday as a U.S. retail sales report painted a brighter picture of the economy, dimming the allure of relatively safe assets. The benchmark 10-year note's yield touched 3.494%, the highest level since 3.5% on May 18. The 30-year bond was 1 22/32 lower to yield 4.519%. Bond prices move inversely to their yields.

Treasurys sank Tuesday and key interest rates jumped to seven-month highs on a strong retail sales report and firm commitment from the Federal Reserve to support the economy.

The bond market added to the heavy losses from the past week as optimism on the economic outlook is driving many investors into riskier assets for higher returns.

Bonds also weakened as the producer prices index, a gauge of inflation at wholesales levels, rose more than economists' forecasts and posted the biggest gain since March. Inflation is the main threat to bonds' fixed returns over time, especially long-dated securities.
 
MONDAY: Selling pressure on 10-year U.S. Treasuries drove yields to fresh six-month highs on Monday as investors threatened to undo this year's bond rally on signs of global economic recovery and deeper U.S. deficits. Monday's selling appeared to be spreading to short-term U.S. papers, suggesting investors are also pricing in raised expectations of higher interest rates next year.The two-year note was yielding 0.67 percent, up three basis points.Five year Treasury yield prints 2% The recent rise in the 10-year yield has been due to higher inflation expectation.  
 
Treasurys took another fall Friday after the government reported the budget deficit expanded last month. The Federal Reserve Bank of New York said Friday it will buy $105 billion in Treasury debt over the coming month.

FRIDAY, DEC. 17, 2010; 4:00 PM EST:

3 Month     0.08%     -0.02 (-20.00%)
6 Month     0.16%     -0.01 (-5.88%)
2 Year     0.61%     -0.04 (-6.15%)
5 Year     1.96%     -0.05 (-2.49%)
10 Year     3.33%     -0.07 (-2.06%)
30 Year     4.43%     -0.08 (-1.77%)


U.S. EQUITY NEWS:
THURSDAY:
FedEx rose 1.9%, after the international package shipper raised its full-year forecast and said it is more optimistic about the global economy.  The international package shipper reported an 18% decline in fiscal second-quarter profit. Shares of Rite Aid fell 1.3% after the drug-store chain saw revenue decline. Alcoa led the measure's gains, rising 2.7%. Bank of America was also strong, adding 2.2%, following reports that it has begun potential settlement discussions with some of its largest mortgage investors.  

General Mills slipped 0.5% after its fiscal second-quarter profit rose 8.6% on fewer restructuring charges and a tax benefit, but sales were stung by more promotions. Margins fell from year-earlier levels because of higher commodity costs.

We saw a  0.5% drop in American Express after the company said it will acquire Loyalty Partner, a marketing firm. Procter & Gamble was also weak, sliding 0.6% after confirming its outlook for the current quarter and the 2011 fiscal year.

Home-furnishings retailer Pier 1 Imports tumbled 4.6% after its fiscal third-quarter earnings fell 45% absent a prior-year tax benefit as the company in the latest quarter continued to see higher sales and margins. 

Energy stocks lagged Thursday after the U.S. Justice Department late Wednesday filed a civil oil-spill lawsuit against Transocean, which owned and operated the Deepwater Horizon oil rig, Anadarko Petroleum and oil giant BP. Transocean shares fell 2.8%, while Anadarko sank 2.9% and U.S.-listed shares of BP slipped 0.3%.

TUESDAY:Cisco Systems climbed 1.2%, Boeing added 1.1% and Travelers advanced 1.1%. Hasbro rising 2.1%, Abercrombie & Fitch advancing 1% and TJX Cos. up 0.9%. Best Buy tumbled 15% after the company issued a dour report for the quarter ended Nov. 27, which included Black Friday. Coca-Cola raises its expectations for cost synergies it will realize in 2011 to $140 million-$150 million, due to the recently completed acquisition of the North American operations of its largest bottler.

Best Buy's same-store sales fell 3.3% in the quarter, including a 5% drop in the U.S. Its earnings came in well below analysts' estimates as revenue unexpectedly fell. The consumer electronics retailer also cut its earnings view for the year.Yahoo Inc plans to lay off more than 600 employees as early as Tuesday. General Motors to force retirement on costly experienced workers. The automaker, said it will offer early-retirement packages worth $60,000 each to about 2,000 skilled-trades workers at 14 U.S. plants.    

MONDAY: Caterpillar was the blue-chip index's best performer Monday as it rose 1.5%, while Walt Disney gained 1.4% and Pfizer jumped 1.4%.General Electric shares slipped 0.6% after the conglomerate announced it will offer $1.3 billion for Wellstream Holdings, a maker of flexible pipeline products for the oil and gas industry. The move fits with GE's strategy to expand its industrial businesses with acquisitions. 


GE to buy Wellstream for $1.3 billion
GE BETS ON DEEP WATER OIL GROWTH WITH $1.3B WELLSTREAM BID
US conglomerate GE says it is buying British oil and gas services group Wellstream Holdings PLC for 800 million pounds ($1.3 billion)

Dell Reaches Deal for Compellent
Dell Inc., which said last week it was in exclusive talks to buy Compellent Technologies Inc., has agreed to buy the data-storage company for $960 million..

Thermo Fisher Scientific agreed to acquire Dionex for $2.1 billion, expanding its presence in markets such as environmental analysis, water testing and food safety. Thermo Fisher shares rose 4%, while Dionex surged 20%.

Huntington Bancshares said it plans to offer $920 million in common stock and offer $300 million in debt to help repay the $1.4 billion it received under the Treasury's Troubled Asset Relief Program. Shares dropped 5.6%.

W.W. Grainger said daily sales surged 14% in November, continuing a rebound from last year's weakness.

Aviation-parts supplier TransDigm Group gave an upbeat revenue forecast for its current fiscal year as the aerospace market continues to show signs of stabilizing. Its stock edged up 0.1%.

CAPITAL SHOPPING REJECTS FINANCING FROM SIMON PROPERTY
Shopping-center-owner Capital Shopping Centres rejects a proposal from U.S. mall giant Simon Property Group to finance CSC's purchase of a massive mall in Manchester, England, in return for a sizable equity stake in the company.

SANOFI EXTENDS GENZYME OFFER UNTIL JAN 21
French drugs giant Sanofi-Aventis says it has extended its $18.5 billion offer for Genzyme for more than a month without changing the terms, and that 0.9% of shares had been tendered so far.


U.S. BANKRUPTCY FILINGS MAY SUBSIDE
The total number of businesses declaring bankruptcy is on pace to decline in 2010 for the first time in four years, as fewer companies sought court protection from their creditors in November compared to the prior month.

According to new data released by Epiq Systems Inc. (EPIQ), 6,578 businesses declared bankruptcy last month, a 0.4% decline from October and the fourth consecutive month when commercial filings fell or held steady form the previous month.

A&P, the grocery-store chain with roots going back to the 1800s, is preparing to file for Chapter 11 bankruptcy-protection as soon at this weekend, said a person familiar with the matter.

FORECLOSURE FILINGS TO START AGAIN
Bank of America Corp. said it restarted about 16,000 foreclosure cases across the U.S. on Monday, but it may be weeks before it is known whether the bank's submission of new documents will pass with local judges who have seen falsified documents and halted filings throughout the U.S..

The bank instructed its foreclosure attorneys this week to prepare new affidavits in 7,800 cases where court approval is required to foreclose on a home, out of a total of 102,000 frozen by the bank amid documentation concerns. In states where no court approval is required, attorneys were asked to lift the hold on 8,000 delayed foreclosure sales out of 30,000.

$150.4 Billion U.S. Budget Deficit
The U.S. government ran its 26th straight monthly budget deficit in November amid wrangling over a package that would extend big tax cuts to Americans trying to recover from recession.
The Treasury Department, in its regular budget monthly statement, said the government spent $150.4 billion than it collected in the second month of fiscal 2011.

JUDGE SIDES WITH VIRGINIA TO
CHALLENGE FORCED HEALTH CARE LAW
US Justice Dept To Appeal Ruling Against Healthcare Law

A federal district judge sides with the state of  Virginia and rules that Congress exceeded its "constitutional boundaries" when it required most Americans to carry health insurance or pay a fine. The centerpiece of the Obama health care legislation was a provision that required everyone to buy health insurance, or be fined.The idea behind that socialist provision, which I always thought unconstitutional, was to force those in their 20's and 30's to buy health care.

The Obama administration said Tuesday it would appeal against a federal judge's ruling that a key provision of the landmark health-care reform law was unconstitutional. "We intend to appeal the district court's ruling in Virginia to the Fourth Circuit Court of Appeals," a spokesman for the Department of Justice told AFP.

Judge Henry Hudson of the Eastern District Court in Richmond, Virginia, found on Monday that the new law's mandate that Americans must buy insurance or pay a fine goes beyond federal authority. He ruled that it also violated the commerce clause, a key component of the Constitution.

The Department of Justice spokesman said the Virginia "suit is based on a state statute that is not applicable nationwide. "The department believes this case should follow the ordinary course of allowing the courts of appeals to hear it first so the issues and arguments can be fully developed before the Supreme Court decides whether to consider it."


Our Week Ahead
Friday is the final option expiration day this year. Stocks have rallied up to maximize profit opportunities the past two weeks, but other market risks may preclude that from happening this week. There is market and currency risk and Euro-based volatility potential this week.

Banks total exposure to Ireland and the southern rim of the euro zone in the second was greater than previously thought, according to data from the Bank for International Settlements published Sunday.

The data confirm that German and French banks are among the word's largest creditors to the region. France's total exposure to Greece stood at $83.1 billion at the end of the second quarter, comprising $57.3 billion in foreign claims and $25.7 billion in "other exposure," or the positive market value of derivative contracts, guarantees extended and credit commitments.
The BIS data on banks' "other exposure" hadn't been previously published, resulting in a greater exposure than previously estimated.

German banks total exposure to Greece stood at $65.4 billion, mirroring $36.8 billion in foreign claims and $28.6 billion in other exposure.With a total exposure of $186.4 billion, German banks had the second-largest exposure to Ireland, right after the U.K., where banks' exposure amounted to $187.5 at the end of the second quarter.

The BIS's data illustrate how costly it would be if struggling Greece or Ireland were forced to restructure their debts as part of a bailout, as some commentators had argued. Both countries required a bailout because of a crippling debt crisis.

With a total exposure of $98.3 billion, Spanish banks had the largest exposure to Portugal.
German banks topped the list of Spanish creditors, with a total exposure of $216.6 billion; French banks' total exposure to Spain stood at $201.3 billion.

BIS said the total consolidated foreign exposures of BIS-reporting banks to Greece, Ireland, Portugal and Spain stood at $2.281 trillion. At $1.613 trillion, foreign claims represented slightly over 70% of that amount. 



The S&P 500 broke resistance at 1225, indicating a primary advance with a long-term target of 1425.  
US DOLLAR ETF UUP
The US Dollar Index is testing support level at 79 after breaking below its rising trendline. If the dollar rallies to the 83.50 range before the end of the year, commodities and market prices would become extremely volatile in the U.S. and abroad.

Gold retraced to test short-term support at $1380 breaking below its trendline. Silver appears stronger, testing the new support level at 28 after breaking the $30 mark.  Bearish divergence on  (21-day) warns of a possible correction ahead.
Attention also turns to the coming week of potentially market-moving event risk, with the US Federal Open Market Committee decision and inflation data likely to cause ripples across global financial markets in the week ahead.

Markets expect that the U.S. Federal Reserve will leave monetary policy unchanged through their upcoming decision, but it will be equally important to monitor for any shifts, no matter how subtle, in official rhetoric. The subsequent days of Consumer and Producer Price Index and inflation data will likewise taken on renewed importance as the Fed continues to monetizes debt through their controversial Quantitative Easing policies.



____________________________________________________________
Canadian Market:

Canadian Shares Mixed to Higher Friday
Toronto stocks closed higher Friday, for the first time in four days, led by Research In Motion after the BlackBerry maker offered an unexpectedly upbeat outlook for the fourth quarter. A rebound in resource stocks after profit-taking this week also helped offset slumping financials.

The S&P/TSX Composite Index rose 20.23 points, or 0.2%, to 13201.46. Advances exceeded declines, 978 to 675. Trading volume was high, 741.3 million shares, up from Thursday's total of 552.2 million shares.  The S&P/TSX 60 Index closed up 1.05 points, or 0.1%, to 754.22.

MOST ACTIVE EQUITIES
Bank of Montreal                   13,753,423  58.00  off  4.05
Dension Mines                      12,945,610   3.24  up   0.04
Semafo Inc.                        11,414,401  11.65  up   0.83
Air Canada B                       11,269,533   3.51  off  0.19
Kinross Gold                        9,879,924  18.70  up   0.29
Capstone Mining                     9,785,014   4.65  up   0.13
Questerre Energy                    9,505,508   1.42  up   0.02
Manulife Financial                  9,392,890  16.96  off  0.02

The market was mixed at midday Friday, partially weighed down by weakness in Bank of Montreal after the country's fourth-largest bank by assets agreed to acquire Milwaukee, Wis.-based lender Marshall & Ilsley for stock in a deal valued at US$4.1 billion.

At Noon Friday the S&P/TSX Composite Index was down 22.50 points, or 0.17%, at 13158.73 but advances led declines 703 to 673. Trading volume was 277.40 million shares.  The S&P/TSX 60 Index was down 2.12 points, or 0.28%, to 751.05 points.

RIM Shares of Research In Motion Ltd. (RIMM) climbed 2.6% Friday after strong 3Q and a good 4Q outlook. Paladin Energy (PDN.T) announced it will buy Uranium Assets from Fronteer Gold. Bank Of Montreal (BMO) to buy Marshall & Ilsley in a $4.1B deal.

Bank of Montreal, Canada's fourth-largest bank in assets, is buying Marshall & Ilsley in a share swap valued at US$4.1 billion, making a long-anticipated move to expand its operations in the U.S. Marshall & Ilsley shares jump 19%.

Canada's October Budget Deficit Indreased To C$4.1B

The Canadian government's budget deficit was higher in October than in the same month last year as program spending grew at a faster rate than revenue, which declined due to lower receipts from corporate and sales taxes, the finance department said Friday.

The deficit widened to C$4.11 billion (US$4.09 billion) from C$3.30 billion in October 2009, the department said in its monthly Fiscal Monitor. However, the shortfall for April through October narrowed to C$21.5 billion from C$31.9 billion in the year-ago period as revenues rose and program spending shrank.

The government has forecast the gap to narrow to C$45.4 billion in 2010/11 after a record C$55.6 billion shortfall in 2009/10. The federal budget update in October forecast the deficit to be eliminated in 2015/16, when the government expects to post a C$2.6 billion surplus after seven consecutive deficits.

In October, program spending rose 4.4% year-on-year to C$19.2 billion while revenues edged up 0.4% to C$17.6 billion. Program spending in April through October fell 2.2% to C$131.4 billion and revenues were up 6.6% to C$127.7 billion.

Website http://www.fin.gc.ca


THURSDAY'S STOCKS DECLINE
The stock market was lower all day Thursday, as gold, base metal and energy producers retreated on weaker commodity prices. The TSX Composite closed at 13181.23  off  47.84 points or 0.4% for the day.

At 11:45 a.m. EST (1645 GMT), the S&P/TSX Composite Index was down 82.98 points, or 0.6%, at 13146.09. Declines led advances, 841 to 557. Trading volume was 258.6 million shares.  The S&P/TSX 60 Index was down 5.11 points, or 0.7%, to 750.47.TSX Venture Exchange stood at 2,097.32, down 3.62 points at noon on Thursday. The Canada Dollar trades lower against the greenback . The U.S. dollar was at C$1.0059 at 3:20 p.m. EST (2020 GMT) Thursday


In early morning trades the Toronto composite declined to 13150.41  off  79.45. The TSX Venture Exchange opened on Thursday at 2,100.01, down 0.93 of a point.

Canada PM Says Pooled Pension Plans
"Extremely Positive"

The Canadian government Thursday unveiled a proposal for pooled pension plans that it says would help those who don't have pensions to save for retirement. Canadian Prime Minister Stephen Harper Thursday described a government proposal for pooled pension plans as an "extremely positive development."

Speaking during question period in the House of Commons, Harper said there are discussions between the federal government and the provinces on the proposal.

"This is a vehicle that a lot of small business owners are interested in, that the provinces I know are interested in exploring,' he said. "And I think this is an extremely positive development for all who are concerned about the future of the Canadian retirement income system."

Jack Layton, leader of the left-leaning opposition New Democratic Party said the deal is "great for the captains of finance but it's a bad deal for Canadians who are trying to save for their retirement."

Earlier, Finance Minister Jim Flaherty said in a letter sent to provincial counterparts and released to reporters, he hopes provincial counterparts will agree on a framework for the new plan at their Dec. 19-20 meeting in Kananaskis, Alta.

Flaherty said this would improve the range of retirement savings options available to Canadians. It would also provide low-cost options that allow employees, with or without a participating employer, and the self-employed, to participate. He said it would be a "major breakthrough" for the pension market and the "biggest step forward for Canadian retirement savings" since the introduction of the tax-free savings account in 2008.

He hopes ministers can agree to "move forward expeditiously" to have a detailed policy framework by next summer, at the latest.


CANADIAN STOCKS MIXED LOWER WEDNESDAY
The Toronto composite closed down 51.01 points in late afternoon trading, led by the commodity producers. The TSX Venture Exchange stood at 2,107.46, down 10.24 points at noon on Wednesday.  Material declined against the U.S. dollar's rise, but gains in energy, industrials and IT brought the Toronto averages almost flat in mixed early morning trading Wednesday. Canadian dollar opened on Wednesday at 99.30 cents US, down 0.05 of a cent. at 11 AM EST the Toronto Composite was down 10.27 points.

The S&P/TSX Composite Index fell 51.01 points, or 0.4%, to 13229.07. Declines exceeded advances, 973 to 687. Trading volume was 550.7 million shares, up from Tuesday's total of 507.5 million shares. The S&P/TSX 60 Index closed down 2.23 points, or 0.4%, to 755.58.



CANADIAN STOCKS LOWER TUESDAY
The Toronto S&P/TSX Composite closed lower Tuesday at 13280.08, off 15.78 points, or 0.1%. Toronto stocks ended slightly lower Tuesday, as the heavily-weighted triumvirate, the energy, materials and financial services groups all posted modest losses.

Crude oil shed 33 U.S. cents to end at US$88.28 a barrel in New York due to a report on weak gasoline demand in the U.S. Bullion edged up US$6.30 to close at US$1,404.30 an ounce in New York, as news that the U.S. Federal Reserve will maintain its monetary-easing policy helped lift the precious metal.

According to closing data the S&P/TSX Composite Index fell 15.78 points, or 0.12%, to 13280.08. Declines led advances 929 to 707. Trading volume was 507.50 million shares, down from Monday's total of 562.3 million shares. The S&P/TSX 60 Index closed down 1.37, or 0.18%, to 757.81 points.


The TSX Composite at mid-day Tuesday was 13307.05, up 11.19 points in light trading with mixed trading.The stock market was mixed at midday Tuesday, with declines in materials group offsetting gains in energy and financial services. At 11:45 a.m. EST, the S&P/TSX Composite Index was up 18.20 points, or 0.1%, at 13314.06. Declines led advances 777 to 644. Trading volume was 197.4 million shares. The S&P/TSX 60 Index was up 0.68 points, or 0.1%, to 759.86.TSX Venture Exchange opened on Tuesday at 2,129.50, down 1.25 points. Canadian dollar opened on Tuesday at 99.35 cents US, up 0.11 of a cent. 


TORONTO HIGHER MONDAY
Toronto stocks closed higher Monday for a third day, led by energy and commodity producers.
The S&P/TSX Composite Index rose 56.39 points, or 0.4%, to 13295.86. Advances exceeded declines, 960 to 728. Trading volume was 562.3 million shares, up from Friday's total of 462.5 million shares. The S&P/TSX 60 Index closed up 2.50 points, or 0.3%, to 759.18.

Toronto stocks are poised for a higher close Monday lead by materials, energy and financials, as surging commodity prices and positive Asian economic data encouraged investors.

MORE RESTRICTIVE HOME MORTGAGE PRESSURES SEEN
Canadian Finance Minister Jim Flaherty said Monday the government is prepared to tighten mortgage rules again "if necessary," amid reports that Canadian household debt burdens have grown.

The government tightened mortgage rules in the spring in an attempt to cool a booming housing market. Among the government initiatives, borrowers now have to qualify for a five-year fixed-rate mortgage, even if they opt for a lower variable rate.

Earlier Monday, Statistics Canada reported that Canadian household debt has risen to a record 148% of disposable income.

EQUITY NEWS:

GOLD WHEATON BUYOUT
Gold Wheaton enters $830 million agreement to be acquired by Franco-Nevada

Franco-Nevada Corp. (TSX:FNV) has agreed to buy Gold Wheaton Gold Corp. (TSX:GLW) in a deal valued at about $830 million in cash and stock that will help diversify and strengthen the mining royalty company.

Under the deal, Franco-Nevada will pay 60 per cent in shares and 40 per cent in cash. Gold Wheaton shareholders will receive 0.0934 of a Franco-Nevada share and $2.08 in cash for each share, with the shares valued at $5.20, based on Franco-Nevada's share price before the deal was announced.

Shares of Gold Wheaton rose 62 cents to trade at $5 on Monday on the Toronto Stock Exchange, while Franco-Nevada shares were down $1.18 to trade for $32.23.
http://www.winnipegfreepress.com/business/breakingnews/gold-wheaton-reaches-830-million-agreement-to-be-acquired-by-franco-nevada-111782594.html

FIRST ASSET POWERGEN AND SPROTT POWER MERGER
First Asset PowerGen Fund and Sprott Power Corp. Agree to Merge

First Asset PowerGen Fund (TSX:PGT.UN)and Sprott Power Corp.announced today that they have entered into a definitive agreement (the "Arrangement Agreement") dated December 13, 2010 that provides for a merger of the Fund and Sprott Power by way of a statutory plan of arrangement.
http://www.istockanalyst.com/article/viewiStockNews/articleid/4740365


ECU SILVER ADDED TO S&P/TSX MINING INDEX
ECU Silver Mining Inc. (TSX:ECU; OTC:ECUXF) announced that it has been added to the S&P/TSX Global Mining Index, effective at the open of markets on Monday, December 20, 2010.

The S&P/TSX Global Mining Index is a dynamic international benchmark tracking the world's leading mining companies. It aims to offer investors wide exposure to the world's mining markets by providing an investable representative index of publicly-traded international mining companies. 



Toronto Indexes, Friday; 4:15 PM EST Composite Up 20.23

 S&P/TSX Composite   13201.46  up   20.23  or 0.2%
 S&P/TSX 60 Index      754.22  up    1.05  or 0.1%
 Financials            181.87  off   1.82  or 1.0%
 Materials             433.34  up    3.67  or 0.9%
 Energy                311.40  up    2.35  or 0.8%
 Industrials           109.20  up    0.08  or 0.1%
 IT                     30.81  up    0.1/  or 0.6%

   Volume         Friday    Thursday
   3-4:15            280.6M     106.5M
   9:30-4:15         741.3M     552.2M






____________________________________________________________
South American Markets:


BRAZIL:

Brazil Stocks Close Lower Thursday
Brazilian blue-chip shares closed lower Thursday for the third-consecutive session as early bargain-hunting gave way to selling pressure ahead of the expiry of stock options contracts.

  The benchmark Ibovespa stocks index closed 0.8% lower at 67,306 points, down from Wednesday's close at 67,870 points.  Trading volume was heavy at 6.79 billion Brazilian reais ($3.99 billion).
Brazilian blue-chip shares were broadly lower.

Vale SA (VALE, VALE5.BR) closed 0.9% lower at BRL49.90 as base metals prices were stable, but off from last week's highs.

State-run energy company Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras slipped 0.1% to BRL25.35, while independent driller OGX Petroleo e Participacoes (OGXP3.BR) tumbled 1.5% to BRL19.01.

Construction companies were among the day's biggest losers, with prospects for higher interest rates and their impact on the housing market sending investors scurrying for the exits.

MRV (MRVE3.BR) sank 7.3% to BRL14.20, while Rossi Residencial (RSID3.BR) lost 3.0% to BRL13.48. PDG Realty (PDGR3.BR) sank 3.4% to BRL9.12 and Gafisa (GFSA3.BR) slid 2.2% to BRL11.00.

Banking shares also reversed course during the session amid concerns that the central bank may once again raise reserve requirements, part of a focus on measures that may reduce the need for interest rate increases to control inflation.

Banco Bradesco (BBD, BBDC4.BR) decreased 1.5% to BRL32.10, while Itau Unibanco (ITUB, ITUB4.BR) slipped 0.8% to BRL38.14. Banco do Brasil (BBAS3.BR), Latin America's largest bank in terms of assets, tanked 1.0% to BRL30.75.

Among the day's few gainers was petrochemicals giant Braskem (BAK, BRKM5.BR), which gained 3.4% to BRL19.29 on analyst upgrades and increased price targets.
Brazil Stocks Close Higher Monday

Brazil's stocks closed higher Monday, lifted by higher global commodities prices and a better tone in global stock markets.

The Ibovespa stocks index ended up 1.2% at 69126 points. The two main blue-chip stocks were also up on the day. Mining giant Vale SA (VALE, VALE5.BR) was up 1.8% at BRL50.92 while oil company Petroleo Brasileiro SA (PBR, PET4.BR), or Petrobras, rose 0.8% to BRL25.91.

Petrobras executives on Monday said the firm will declare the much-ballyhooed Tupi field as commercial by the end of the year. Tupi is estimated to hold recoverable reserves of between five billion and eight billion barrels of oil equivalent, or BOE. Tupi was the Western Hemisphere's largest oil find in more than 30 years when it was announced in November 2007.

"By Dec. 31, we have to declare [as] commercial the evaluation plan for Tupi," said Jose Formigli, executive manager for presalt exploration at Petrobras.

Brazilian beef exports should reach from $5.3 billion to $5.6 billion in 2011, the head of the Brazilian Beef Exporters' Association said on Monday. This compares with estimated exports of $4.9 billion this year on volume equivalent to 1.64 million tons, said Antonio Jorge Camardelli, president of the trade association known as Abiec.

Brazilian beef processor JBS SA (JBSAY, JBSS3.BR) ended down 1.3% at BRL6.78, while Marfrig Alimentos SA (MRRTY, MRFG3.BR) was off 0.7% at BRL13.50. MMX Mineracao e Metalicos SA (MMXM3.BR) was down 4.3% at BRL10.96 while MRV Engenharia e Participacoes SA (MRVNY, MRVE3.BR) was up 5.1% at BRL16.65.




MEXICO:
FRIDAY:

Mexican Stocks Edged Higher Friday
Mexico's Stocks Rise To Record High Close; IPC Index Up 0.4%

Mexico's stocks rose to a record-high close Friday, with the market's benchmark index toying with a 38000-point finish as investors shook off early jitters about Moody's credit downgrade of Ireland to close a winning week on a positive note.

The IPC index closed up 0.4% or 164 points to 37997. Volume picked up from recent sessions to a robust 278.7 million shares worth 9.42 billion pesos ($759 million). The euphoria was limited by a mixed performance in U.S. equities, where the Dow Jones Industrials slipped 0.1%, but the Nasdaq composite index rose 0.2%.

  The IPC finished the week with a gain of 3.8% and is up 18% year-to-date.

America Movil L shares rose 0.5% to MXN35.18, cement maker Cemex CPO shares rose 0.6% to MXN12.55 and retailer Wal-Mart de Mexico V shares rose 0.5% to 35.74. 




Mexican Drone Enters U.S. Airspace - Crashes In Texas
U.S. officials are investigating the crash of a Mexican drone near the border town of El Paso, Texas. The unmanned aircraft crashed in a residential neighborhood on Tuesday and has been returned to the Mexican government, officials said.

A spokesman for U.S. Customs and Border Protection declined to say whether the Mexican government had permission to enter U.S. airspace in the troubled border region or to provide many details about the crash.

"On Tuesday CBP/U.S. Border Patrol responded to a concerned citizen's call and recovered small Unmanned Aerial Vehicle which belonged to the government of Mexico (GOM)," spokesman Roger Maier said in an emailed statement. "We worked collaboratively with the GOM and other U.S. Federal agencies to coordinate the return of the UAV to the GOM."

The National Transportation Safety Board "has the lead on the investigation," Maier added.  A spokesman for the safety board said the agency is working to determine why the drone crashed. "We are collecting data," spokesman Keith Holloway said. "We aren't planning on sending anyone down there because we can gain the information we need from other agencies." 

Mexican Stocks Edged Higher Thursday
The IPC index of Mexico's 35 most-traded shares rose 0.4% to 37833, shy of its record finish of 37901 points Tuesday and less than 200 points away from a key technical ceiling of 38000 points. Twenty-five of the index's components posted gains, while volume was limited at 4 billion pesos ($322 million). 

Wireless carrier and market benchmark America Movil lost 0.1% to MXN35.00, cement maker Cemex gained 0.6% to MXN12.47 and mining firm Grupo Mexico retreated 0.2% to MXN47.75. UBS cut its recommendation for Grupo Mexico shares to sell from neutral Wednesday, noting that the current price is above its MXN41.90 price target.

Shares in Mexico's third-largest bank, Banorte, rose 1.4% to MXN60.03 after Moody's raised its rating Thursday on the Mexican banking system to stable from negative, citing sound funding as well as improving asset quality. Banorte is Mexico's biggest local financial firm with publicly listed shares.

Also Thursday, airport group OMA said it's investing around MXN500 million in high-tech baggage handling systems for its airports. The  project is being partially financed with a $23 million, 10-year loan from UPS Capital Business Credit, backed by the U.S. Export-Import Bank.

The equipment will be able to detect explosives and other forbidden substances and objects in checked baggage. The installation is expected to be completed at all OMA's airports in 2011, the company said. OMA shares added 0.5% to MXN24.90.

The peso, meanwhile, strengthened against the dollar to close at MXN12.4270 versus MXN12.4520 at the close Wednesday.

Mexican Stocks Edged Lower Wednesday
Mexico's stocks opened and closed modestly lower Wednesday and the peso was weaker against the U.S. dollar as investors kept eyes on Europe and the sovereign debt troubles among some EU countries.

The market's IPC index of leading issues was down 0.2% at 37,839 points around 10:25 a.m. EST. Volume was 16.8 million shares worth 514.2 million pesos ($41.5 million).  The Mexican peso was weaker against the U.S. dollar, quoted in Mexico City at MXN12.4045. 

THIRD NEW U.S. BOARDER CROSSING OPENED THIS YEAR
Mexican President Felipe Calderon and U.S. Customs and Border Protection Commissioner Alan Bersin opened a new border crossing that links the Tamaulipas state town of Rio Bravo with Donna, Texas. 
The Rio Bravo-Donna bridge is the third border crossing opened this year, the U.S. Embassy said. The other new crossings link McAllen, Texas with Reynosa, Tamaulipas and San Luis, Arizona with San Luis Rio Colorado, Sonora.


STOCKS EDGE HIGHER TUESDAY
Mexico's Stocks Edge Higher, Sets New IPC Record

Mexican stocks closed practically flat Tuesday in indecisive trading, but did just enough to set a second consecutive record close. the IPC index of leading issues finished 6.7 points higher at 37,901 points. Volume was 154.2 million shares worth 5.46 billion pesos ($441 million). The index dipped several times into the red before a late rally, which came after the U.S. Federal Reserve left interest rates near zero and said it will continue with monetary stimulus.

Bellwether America Movil L shares rose 0.2% to MXN35.44, cement company Cemex CPO shares rose 0.7% to MXN12.47, and media group Televisa CPO shares rose 1.1% to MXN61.97.  Retail heavyweight Wal-Mart de Mexico V shares slipped 0.1% to MXN34.69, and phone company Telmex L shares fell 2.1% to MXN9.70.

Cable company Megacable CPO shares rose 0.6% to MXN31.25 in light volume. Citigroup unit Banamex raised its recommendation on the stock to buy from hold, citing timely investments and expectations of bigger operating profit margins.


MEXICAN STOCKS MOVE UP MONDAY
Mexico Stocks Gain On China Rates; Peso Strengthens

Mexican stocks were gaining early Monday amid global relief that China did not raise rates to cool its surging economy.

In morning trading , the IPC was up 0.4% at 37817 on volume of 599 million pesos ($48 million). Among blue chips, wireless carrier and market benchmark America Movil was advancing 0.1% to MXN35.42, cement maker Cemex was 0.7% higher at MXN12.33, and mining firm Grupo Mexico was up 1.4% to MXN48.60.

"Lateral movements could persist in the short term, though the scenario increasingly suggests stabilization with a positive bias for Latam assets," analysts with BBVA Bancomer wrote in a morning note.

In economic news, Mexican statistics agency Inegi reported early Monday that industrial production expanded 3.7% in October, weaker than market expectations of a 5.2% rise.

Car producer's association AMIA, however, said Monday that auto production spiked 18% on the year in November, while exports of vehicles surged 25%.

The peso was stronger against the dollar at 12.3780 compared with MXN12.4520 at the close Friday.





ARGENTINA:
FRIDAY:

Argentina Stocks Rise In Rebound
Argentine stocks ended the week with solid gains as shares scratched back some of the losses suffered on Tuesday and Wednesday due to a wave of options coming due.

Argentina's benchmark Merval stock index climbed 2% to close at 3,403.08 points. Shares ended the week 0.5% lower but are still up over 45% on the year.

Earlier in the week a number of options were exercised for companies, especially banks and those tied to the energy sector, increasing the amount of shares in circulation and weighing on prices.

Shares of banking group Grupo Financiero Galicia (GGAL, GGAL.BA) rose 3.7% to close at ARS5.96 ($1.50) while power distributer Edenor (EDN, EDN.BA) shot up 4.31% to ARS2.66.

Stocks are expected to continue to perform well next year amid strong economic growth in Argentina.  Near the end of trade Friday, the government reported gross domestic product data that showed strong, but moderating expansion due to good domestic consumption and industrial output. Argentina's national statistics agency, Indec, said GDP increased 8.6% in the third quarter a year earlier. Third-quarter GDP rose 0.4% from the previous quarter, bringing the economy's total expansion during the January-September period to 9.1% from the same nine-month period of 2009.

Bonds also generally edged higher on Friday. The peso-denominated 2033 discount bond rose 0.8% in price terms to ARS184, to yield 7.4%. The dollar-denominated Boden 2015 bond added 0.7% to close at ARS376, bringing the yield to 9%.

The peso gained ground against the dollar Friday, strengthening to ARS3.9750 from ARS3.9775. The government regularly intervenes in currency markets to keep the peso trading within a tight band relative to the dollar.


Argentina's November Industrial Output Surges 12.5%
Argentina's industrial production grew more than expected in November, on the back of big gains in automobile and construction materials output.

Industrial production last month rose 12.5% on the year, and 4.1% in seasonally adjusted terms from October, the national statistics agency, Indec, reported Friday.

The annual reading was well above the 8.1% median forecast of 10 economists surveyed by Dow Jones Newswires. Friday's report came as little surprise to economists and investors after President Cristina Fernandez said Wednesday that manufacturing grew 12.8% on the year in November.

 "We expect the industrial sector to continue to record solid growth in the coming months, driven chiefly by solid foreign demand as domestic demand among some of the main trading partners remains strong, namely Brazil," Goldman Sachs economist Alberto Ramos said in a note.

Capacity utilization was 83.4% last month, its highest level in a year, led by basic metals at 90.2%; textiles 90.1%; paper and cardboard 88.8%; petrochemicals 87.1%; and automobiles 84.2%.

Argentine industry expanded 9.7% during the first 11 months of the year, compared to the same period in 2009, according to Indec.

Expansion was noted in food processing, textiles, printing, automobile and machinery, petrochemical, construction materials and metals output, while declines were observed in tobacco, paper and cardboard, and oil refining.

The growth in food processing was extremely sluggish at just 3.3% on the year in November. Though milling of cereals and oil bearing grains rose 21.4% last month, beef production plunged 30.1%, while the output of other meats such as chicken and pork was almost flat.

Falling or stagnant meat production could have serious consequences for consumers and their pocketbooks during the summer months when consumption soars as carnivorous Argentines take advantage of good weather to host their traditional outdoor barbecues.

Indeed, food and beverage prices posted the biggest gains in Indec's consumer price index for November. Annual inflation as measured by the CPI was 11% at the end of last month, about half of what most private-sector economists had forecast.



Argentina's 3Q GDP Expands 8.6% On Year
Argentina's economy moderated its pace of expansion in the third quarter, though growth remained elevated thanks to strong domestic consumption and industrial output.

Argentina's national statistics agency, Indec, said Friday that gross domestic product--a broad measure of all the goods and services produced in the economy--increased 8.6% in the third quarter from the year earlier period.

Third-quarter GDP rose 0.4% from the previous quarter, bringing the economy's total expansion during the January-September period to 9.1% from the same nine-month period of 2009. Indec said private consumption rose 8.9% on the year in the quarter, while durable goods output jumped 55.4% led by imports.

The government and Central Bank of Argentina expect GDP to expand about 9% for the full year following what many economists believe was a deep recession in 2009. Indec says the economy managed to grow 0.9% last year.

Argentina owes its economic good times in large part to high commodity prices for its grain exports and strong demand in Brazil for Argentine manufactured goods. High levels of government spending and a consumption boom fueled by inflation have also goosed growth, however.

Indec reported Wednesday that annual inflation as measured by the consumer price index was 11% at the end of November, about half of what most private-sector had forecast.



THURSDAY:
Argentina's Stocks Rise Thursday
Argentina's stocks on Thursday broke a two-day losing streak to close firmly higher, while government bonds also logged modest gains. The benchmark Merval index rose 1.4% to close at 3336.72 points on volume of 101 million pesos ($25.4 million) with banking and energy stocks fronting gains.

The Merval benefited from gains in North American and European equity markets following the release of generally positive U.S. employment and manufacturing data.

"The market should be quiet with [the Merval] approaching its recent record highs towards the end of the year," Alejandro Stratiotis, a trader at local brokerage Amirante Galitis, said in a telephone interview.

"People are upbeat about next year so we should touch new highs early in the year," he added.

Shares of electric utility holding company Pampa Energia (PAM, PAMP.BA) rose 2% to close at ARS2.55, banking group Grupo Financiero Galicia (GGAL, GGAL,BA) rose 0.7% to ARS5.75, and mortgage lender Banco Hipotecario (BHIP) finished 1.8% higher at ARS2.79.

Turnover on the local bond market was ARS456.1 billion, equivalent to nearly 45% of the total volume of securities traded on the Buenos Aires Stock Exchange during the session.

The peso-denominated 2033 discount bond rose 1.1% to close at ARS182.50, yielding 7.42%.

The Global 2017 bond, issued in June as part of the government's debt swap with the holders of defaulted bonds, closed unchanged at ARS411, yielding 8.34%. The Boden 2015 closed 0.1% higher at ARS373.50, yielding 9.20%.

Argentina's 2035 peso-denominated GDP warrants rose 0.2% to ARS13.87, while U.S. dollar-denominated GDP warrants with the same maturity closed unchanged at ARS55.45.

The peso was quoted closing in interbank markets at ARS3.9750 to the dollar, compared to ARS3.9775 at Wednesday's close.



WEDNESDAY:

INFLATION 11% FOR THE YEAR
Argentina Reports +0.7% Increase In November Inflation
Argentina reported a steep rise in the November consumer price index, although the government figures continue to fuel skepticism among economists who say prices are actually rising at least twice the official rate.


Economists had expected the government to report 0.8% month-on-month inflation in November, which would have put the annual inflation rate at 11.1%, unchanged from October.

Argentina's consumer price index in the capital Buenos Aires, used as a measure of nationwide inflation, jumped 0.7% on the month in November, bringing the rate over the past 12 months to 11%, the national statistics agency, Indec, reported Wednesday. Prices for clothing, appliances, medical care and food and drinks posted the largest gains.

The credibility of Indec's inflation data has been called into question since former President Nestor Kirchner made personnel changes at the agency in 2007, which led to a sharp divergence between government data and private-sector estimates. The government of President Cristina Fernandez, Kirchner's wife, regularly denies charges that it manipulates Indec data.

Most private-sector economists say inflation is running well above 20% thanks to elevated government spending, hefty wage increases negotiated by unions amid an economic boom, and the central bank's decision to expand the money supply.

Local think tank Buenos Aires City--run by Indec's former CPI director, Graciela Bevacqua, who was purged by Kirchner--said in a report that consumer prices rose 1.3% in November, bringing the annual inflation rate to 25.6% due to rising prices for food and beverages.

Joaquin Ledesma & Asociados economic consultancy pegged the November price gain at 1.5% from October and 23% from a year earlier.

In a move interpreted as a concession to placate critics, the Fernandez administration last month invited the International Monetary Fund to help Indec build a nationwide consumer price index. An IMF technical mission has already met with Argentine officials to discuss the project. The IMF will demand strong assurances about the integrity of the new CPI before putting its stamp of approval on the project.  

The implementation of a national CPI is widely expected to be a drawn-out affair as the government is unlikely to make changes to the current Buenos Aires CPI to avoid legal problems. The government's inflation-linked bonds are indirectly linked to Indec's CPI and the chronic underreporting of inflation has short-changed investors, analysts say.



CHILE:
FRIDAY:

Chile Stocks Close Slightly Higher Friday

Chile's blue-chip Ipsa index ended slightly higher Friday, as retailers once again pushed the local market higher on expectations for continued robust domestic demand and on recent upwardly revised target prices.

The Ipsa ended 0.1% higher at 5006.59. Meanwhile, market volume surged to 226.5 billion Chilean pesos ($480.0 million) after local businessman Alvaro Saieh sold an 8.9% stake in retailer Ripley (RIPLEY.SN). Volume totaled CPL141.0 the prior session.

Ripley ended 0.8% lower at CLP660.81 after Saieh raised $242.7 million through the sale of 174.2 million shares at a minimum of CLP660.00 per share.

Market participants speculate that Saieh, whose family holds a controlling stake in local bank Corpbanca (BCA, CORPBANCA.SN) and the La Tercera newspaper, is looking to purchase a stake in fellow retailer La Polar (LAPOLAR.SN).

La Polar's shares ended 0.7% higher at CLP3,508.40.

"There is speculation that since Saieh could never gain a controlling stake in Ripley, he's raising capital to buy a controlling stake in La Polar," said Rodrigo Arriagada, trader with local brokerage Molina y Swett.

Retailers have fueled the Ipsa's record run this year on the back of robust domestic demand as the economy quickly recovers from last year's recession and February's massive earthquake.

The nation's largest department store, Falabella (FALABELLA.SN), rose 1.0% to a 52-week high of CLP5,273.30, following recent recommendations, including local investment bank BCI's 12-to-18-month target price of CLP5,850.

Also, retail holding giant Cencosud (CENCOSUD.SN), which has lagged behind its peers in recent sessions, jumped 2.7% to CLP3,763.40.

The peso ended stronger at a 31-month high against the dollar after the central bank continued to remove its monetary stimulus and as international copper prices rose. The peso ended at CLP471.80 to the dollar, versus Thursday's close of CLP473.20, while trading in a range of CLP470.90 to CLP473.20.

In the bond market, yields on inflation-indexed Chilean central-bank bonds, or BCUs, ended unchanged in thin over-the-counter trading.

The yield on five-year BCU bonds ended unchanged on the day at 2.64%, while the yield on 10-year BCUs also closed unchanged at 2.93%.


Chile's Key Interest Rate Unchanged
Late Thursday, the bank increased the key interest rate by 25 basis points to 3.25%, as expected by most participants, although a number of dissenters anticipated the monetary authority would leave the rate unchanged.

Higher local rates encourage capital inflows, as investors seek better returns, which in turn strengthen the local currency.




Chile Stocks Close Higher Thursday

Chile's blue-chip Ipsa index ended slightly higher Thursday, paring back earlier gains, as retailers surged following several recommendations and a rosy outlook for strong domestic demand.

The Ipsa ended 0.1% higher at 5003.08, while market volume fell to 141.0 billion Chilean pesos ($298.0 million) from CLP165.9 billion the prior session.

Retailers were the local market's strongest component again. They have fueled the Ipsa's 39.5% record-run this year on the back of robust domestic demand as the economy quickly recovers from last year's recession and February's massive earthquake.

The nation's largest department store, Falabella (FALABELLA.SN), rose 3.5% to a 52-week high of CLP5,215.00, after local investment bank BCI set a 12- to 18=month target price of CLP5,850 for the retailer earlier in the day and Bank of America-Merrill Lynch recently gave it a year-end 2011 target price of CLP6,000 per share.

Domestic demand is expected to remain strong, as Chile's economy is forecast to expand 5.2% this year, and 6.0% in 2011.

After Falabella's recent sharp rally, the retailer overtook fuel and forestry conglomerate Copec (COPEC.SN) to become the biggest company by market capitalization on the Santiago Stock Exchange.

"Falabella's market capitalization totaled $26.5 billion at the close of the session, compared to Copec's $25.4 billion. It's a reflection of the growing importance of the retail sector for the local market," said analyst Raul Barros with BBVA Research.

Among retailers, La Polar (LAPOLAR.SN) jumped 5.1% to CLP3,485.00, and Ripley (RIPLEY.SN) climbed 1.0% to CLP663.50. Credit Suisse recently placed a year-end 2011 target price of CLP3,500 for La Polar. Copec (COPEC.SN) fell 0.3% to CLP9,370.00

The peso ended little changed on the day against the dollar, as market participants awaited the central bank's interest-rate decision after the market's close. The peso ended at CLP473.20 to the dollar versus Wednesday's close of CLP473.50, while trading in a tight range of CLP473.10 to CLP474.70.

Chile Stocks Close Higher Wednesday

Chile's blue-chip Ipsa index closed higher Wednesday as retailers and commodities-related companies gained on expectations for strong future growth. The Ipsa ended 0.6% higher at 4996.86, while market volume grew to 165.9 billion Chilean pesos ($350.6 million) from CLP126.7 billion the prior session.

Retailers, which have fueled the Ipsa's record run this year as Chile quickly recovers from last year's recession and February's devastating earthquake on the back of strong domestic demand, were among the biggest gainers.

Retail holding company Cencosud (CENCOSUD.SN) gained 0.8% to CLP3,675.80 and retailer Hites (HITES.SN) grew 2.6% to CLP712.64. Falabella (FALABELLA.SN), surged 2.7% to CLP5,038.40 after Bank of America-Merrill Lynch recently set a year-end 2011 target price of CLP6,000 per share for the retailer.

Fuel and forestry conglomerate Copec (COPEC.SN), the Ipsa's heaviest-weighted share, increased 1.4% to CLP9,396.30 after investment bank Santander Global Banking & Markets gave it a year-end 2011 target price of CLP10,560 per share, from a previous target of CLP9,800. Specialty chemical and fertilizer producer SQM's (SQM) more liquid B-series shares (SQM-B.SN) advanced 2.8%, to CLP25,524.00.

The peso closed slightly weaker against the dollar as international copper prices slipped and the euro declined versus the dollar as investors worried about a potential downgrade to Spain's credit rating.  After appreciating 3% over the last two-and-a-half weeks to a 31-month high, the peso ended weaker at CLP473.50 to the dollar, versus Tuesday's close of CLP472.60. The local currency traded in a range of CLP473.30 to CLP475.00.

In the bond market, yields on inflation-indexed Chilean central-bank bonds, or BCUs, ended lower following a scheduled auction of central bank-issued sovereign debt.

The yield on five-year BCU bonds ended at 2.63%, from 2.66% on Tuesday, while the yield on 10-year BCUs closed at 2.94%, from 2.97% the prior session.



Chile Stocks End Higher Tuesday
Chile's blue-chip Ipsa index ended higher Tuesday as retailers and commodities-related companies rose.

The Ipsa ended 0.6% higher at 4973.89, while market volume grew to 126.68 billion Chilean pesos ($268 million) from CLP90.0 billion the prior session.

On the back of strong domestic demand, retailers have risen sharply, leading the Ipsa into record-high territory this year. The nation's largest department store, Falabella (FALABELLA.SN), rose 2.5% to CLP4,900.00, while retailers La Polar (LAPOLAR.SN) gained 0.3% to CLP3,315.00 and Ripley (RIPLEY.SN) advanced 0.8% to CLP660, after international investment banks recently raised their respective target prices.

Investment banks Bank of America-Merrill Lynch set a year-end 2011 target price of CLP6,000 per share for Falabella, while Credit Suisse placed a year-end 2011 target price of CLP3,500 for La Polar.

Fuel and forestry conglomerate Copec (COPEC.SN), the Ipsa's heaviest-weighted share, gained 1.4% to CLP9,290.00; pulp and paper producer CMPC (CMPC.SN) rose 1.8% to CLP25,700.00; and integrated steel and iron ore producer Cap (CAP.SN) jumped 3.9% to CLP25,399.00.

Specialty chemical and fertilizer producer SQM's (SQM) more liquid B-series shares (SQM-B.SN), however, fell 2%, to CLP24,840.00, after nearing its all-time high around CLP27,000 in recent sessions.

The peso closed at a fresh 31-month high against the dollar Tuesday as international copper prices rallied to a new record high. The peso ended stronger at CLP472.60 to the dollar, versus Monday's close of CLP474.80, while trading in range of CLP472.60 to CLP474.80.

Chinese Demand Seen Keeping Copper Prices High
Copper prices are likely to remain high over the next few years due to Chinese demand, but this price increase could lead to substitution, a top Chilean mining executive said Tuesday.

This month copper breached the $4-a-pound mark, hitting a fresh record high in London Tuesday of $4.20 a pound, according to Chilean state copper studies commission Cochilco.



Chile Stocks Ends Flat Monday

Chile's blue-chip Ipsa index ended virtually flat Monday, as market participants take a step back from the market after the strong rally the Ipsa posted this year. The Ipsa ended 0.01% lower, at 4945.18, while market volume slipped to 90 billion Chilean pesos ($189.6 million), compared with CLP113.4 billion the prior session.

Retail holding giant Cencosud (CENCOSUD.SN) lost 0.1%, to CLP3,619.60, department store La Polar (LAPOLAR.SN) declined 0.7%, to CLP3,306.80 and retailer Ripley (RIPLEY.SN) lost 0.6%, to CLP655.00.

Construction and real-estate companies again fell after the sector rapidly rose in recent sessions on expectations that a ramping up of post-earthquake reconstruction activities will boost profits.

Construction company SalfaCorp (SALFACORP.SN) dropped 1.9%, to CLP1,736.00, and real-estate developer Socovesa (SOCOVESA.SN) declined 1.4%, to CLP392.02.

Specialty chemical and fertilizer producer SQM's (SQM) more liquid B-series shares (SQM-B.SN) slid back, falling 1.4%, to CLP25,335.00. Shipping company Compania Sud Americana de Vapores (VAPORES.SN), which said earlier that it will buy two container carriers from Samsung Heavy Industries (010140.SE) for $180 million, ended 0.1% lower, at CLP588.55.

The peso ended at a 31-month high against the dollar, as international copper prices surged to a new record high and as the euro rose sharply against the dollar. The peso ended stronger, at CLP474.80 to the dollar, versus Friday's close of CLP475.80, while trading in range of CLP471.70 to CLP475.20.

As the peso has appreciated in recent months, Chilean exporters, particularly in the agricultural sector, have demanded currency-market intervention, arguing that the local currency's strength hurts the competitiveness of their products. 


PERU:

Peru's Main Stock Indexes End Mixed Friday
Peru's main stock market indexes ended mixed Friday, losing ground due to some uncertainty about international exchanges but gaining on higher blue-chip mining stocks as metals' prices rose.

  The Lima Stock Exchange's broad General index fell 0.03% to close at 22035.58. The Selective blue-chip index meanwhile gained 0.33%, closing at 30872.93, while the mining subindex rose 0.45%.

  Stocks losing ground included consumer-goods company Alicorp (ALICORC1), down 3.13% to close at 6.20 soles ($2.21). Property and engineering company Grana y Montero (GRAMONC1) was down 1.64% to close at PEN6.59 and beer maker Union de Cervecerias Peruanas Backus & Johnston SAA (BACKUSI1.VL) also lost value, down 0.35% to close at PEN5.68.

  Gaining value on higher gold prices was precious-metals miner Compania de Minas Buenaventura SAA (BVN, BUENAVC1), up 0.10% to close at $47.95. Also up in line with some higher red metals' prices was base-metals miner Southern Copper Corp. (SCCO, SCCO.VL), gaining 0.26% to close at $46.52.

  Meanwhile, the sol ended slightly stronger at PEN2.813 per dollar. In the previous session the sol closed at PEN2.815 per dollar.

Peru's Stock Indexes End Higher Thursday

Peru's main stock-market ended higher Thursday, lifted by gains in a number of blue-chip shares. The Lima Stock Exchange's broad General index closed higher by 0.31%, at 22041.44.

The Selective blue-chip index ended stronger by 0.39% at 30771.89. Base-metals miner Southern Copper Corp. (SCCO) increased 0.43% to end at $46.40. Financial-holding company Credicorp Ltd. (BAP) gained 0.19% to end at $120.22. It owns Banco de Credito, Peru's largest bank. Telefonica SA (TEF) rose 0.45% to end at $67.30, following the direction of its New York-traded American Depositary Receipt.

Compania de Minas Buenaventura SAA (BVN, BUENAVC1.Vl), which fell 1.24% to end at $47.90, as the price of gold eased.

The sol ended slightly stronger at PEN2.815 per dollar, compared with PEN2.818 per dollar in the previous session.



____________________________________________________________
European Markets:
FRIDAY:EURO STOXX 50     2,834.96     -10.82 (-0.38%) 

European Indexes declined on Friday after Moody's downgraded Ireland's rating by five notches. The euro struggled after Moody's slashed Ireland's sovereign rating by five notches, to Baa1 from Aa2, and warned further downgrades could follow if Dublin is unable to stabilise its
debt situation.

EU leaders on Friday agreed at a summit to try to lengthen the maturities of new sovereign bond issues, and confirmed that private investors will be involved in the future euro zone rescue mechanism, a draft statement showed.

The U.K., Germany, and France are joining forces to limit future increases in the European Union's annual budget, including a plan for a virtual freeze between 2014 and 2020, the U.K.'s prime minister said Friday.

The European Central Bank said it will increase its subscribed capital to $14.23 billion after taking on greater credit risks in a massive expansion of its balance sheet.

===
THURSDAY:The Stoxx Europe 600 index closed up 0.4% at 277.59

European Union leaders are gathering for a two-day summit in Brussels, where they will discuss ways to prevent and respond to future euro-zone debt crises. The European Central Bank decided to increase its subscribed capital by EUR5 billion ($6.6 billion) to EUR10.76 billion to help manage foreign-exchange volatility and credit risk.

WEDNESDAY: EURO STOXX 50 2,846.54  -15.13 (-0.53%) 

TUESDAY: The Stoxx Europe 600 index ended up 0.2% at 277.65. The U.K.'s FTSE 100 index rose 0.5% to 5891.21, France's CAC-40 index ended 0.3% higher at 3902.87 and Germany's DAX closed flat at 7027.40.

TUESDAY: The Stoxx Europe 600 index showed a small gain, with the help of some upbeat U.S. economic data, to notch its seventh consecutive gain. The euro fell against the dollar, while gold prices rose slightly and oil was little changed. 

Oil and gas stocks put in the strongest performance, led higher by BP, whose shares rose 3% after it announced plans to sell its exploration and production assets in Pakistan from $775 million. Also, Credit Suisse said the company remains its top long-term pick. Credit Suisse also raised its 2011 oil price target and earnings forecasts for the sector. The Stoxx Europe 600 oil and gas index closed up 0.9% at 333.55.

TUESDAY: The European Central Bank may ask member countries of the union to chip in a little more cash as a cushion while it keeps buying the debt of some peripheral countries that have drawn a lot of fire in financial markets.

“The ECB is apparently considering requesting 16 national central banks for a capital increase to protect it from any losses stemming from its sovereign bond purchases,” said bond strategists at TD Securities on Tuesday. “The ECB’s capital base of €5.8 billion ($7.8 billion) may be overwhelmed by its €72 billion of purchases so far of European peripherals, should default become an option.”

The matter may be discussed at the next meeting of the ECB Governing Council on Dec. 16, according to Bloomberg News.

On Monday, the ECB released data showing it increased purchases of sovereign debt in the previous week, but not nearly to the  levels seen when the ECB started bond purchases to quell the Greek debt crisis.

Read the entire article at MarketWatch
http://blogs.marketwatch.com/marketjunkie/2010/12/14/ecb-needing-more-capital-not-a-good-sign/?mod=yahoo_hs


MONDAY: EURO STOXX 50     2,855.37     +15.84 (0.56%) 

MONDAY:
European stocks maintained small gains Monday but on limited volumes as many investors opted to defer taking new positions until the New Year.

Europe's FTSEurofirst 300 gained 0.2 percent. EURO STOXX 50 2,858.70     +19.17 (0.68%), Britain's FTSE 100 was up 0.7 percent at 5,854.33 and Germany's DAX was 0.3 percent higher at 7,024.96. France's CAC-40 was up 0.7 percent at 3,882.78.


Herman Van Rompuy, president of the European Council, Thursday called for European governments to agree to a limited change to the European Union treaty next week that will allow the creation of a permanent mechanism to bail out troubled EU economies. He said he believed European leaders would do "whatever it takes" to ensure the financial stability of the euro region.



LONDON:
FRIDAY:  FTSE 100 5871.75  -9.37   (-0.16%)  

London Stocks Close Slightly Lower Friday

FTSE 100               5871.75    -9.37   -0.16%
FTSE 250              11426.78   +97.74   +0.86%
DJ UK Smaller Companies 960.76    +3.46   +0.36%

FTSE 100 ends down 0.2% at 5871.75, having spent most of the session treading water, as investors remain focused on sovereign debt of 'peripheral' euro zone states.

The U.K. Financial Services Authority on Friday issued tougher guidelines on compensation for the financial services industry, broadly in line with rules set by an EU-wide committee.

"Euro-zone debt fears could keep a leash on any potential gains to be made next year and traders are likely to want to see an EU-wide fiscal solution to combat any domino effect that there may be before this debt cloud can be lifted," says Joshua Raymond at City Index. Banks are on the back foot following Moody's downgrade of Ireland and as Lloyds Banking Group announces further writedowns on its Irish portfolio.

The Bank of England Friday highlighted the benefits offered by new credit instruments in raising, lengthening and diversifying banks' funding, but it simultaneously warned of potential risks if these markets continue to grow.

The Bank of England on Friday called for a "comprehensive" solution to sovereign debt woes, to reassure investors and avoid a snowballing of market concerns that could drag a growing number of countries into its midst.

Lloyds Banking Group PLC (LYG) said Friday that it will have to take further write-downs on its GBP26.7 billion Irish portfolio as the situation in the country worsened, leading to a total impairment charge of GBP4.3 billion for the year.

Lloyds TSB Prices Dollar, Sterling Credit Card ABS Issue
U.K. lender Lloyds TSB Friday priced its triple-A rated, asset-backed bonds backed by credit card receivables and denominated in sterling and dollars, according to one of the banks on the deal.


U.K. banks face further but "manageable" bad-debt write-downs over the next years if the country's economy deteriorates and interest rates rise, the Bank of England said Friday.
UK Nov Consumer Confidence Slips To 
21-Month Low - Nationwide

U.K. consumer confidence dropped to a 21-month low in November, with consumers now more gloomy about the economic outlook over the next six months, a survey from lender Nationwide showed Friday.
 
RBS is down 5.7% and Lloyds down 3.6%. AstraZeneca is the biggest faller however down 6.7% on news it faces further delays getting FDA approval for its Brillinta drug. No major UK data due Monday.

US Delayed AstraZeneca Heart Drug Again
AstraZeneca PLC's (AZN) new blood-thinning drug Brilinta has again failed to win approval from U.S. regulators, jeopardizing new revenue the group needs to offset the impact of expiring patents on some of its top-selling products.

BHP Billiton Settles Pay Dispute With South African Workers
BHP Billiton Ltd. (BHP) said Thursday it has settled a wage dispute with workers at an aluminum smelter in South Africa, bringing to an end a nine-day strike.

BHP Submits Environment Report For Jansen Potash Project
BHP Billiton Ltd. (BHP) said Friday it submitted an environmental report for its proposed Jansen Potash Project to the Saskatchewan Ministry of Environment, another sign it is committed to the scheme.

THURSDAY: The U.K. FTSE 100 Index Closed Unchanged at 5,881.72 

In London shares of oil giant BP PLC fell 1.4% after the U.S. government filed a civil lawsuit against the firm and eight other companies alleging that negligence and lax safety procedures led to the Gulf of Mexico oil spill earlier this year.

Shares in Transocean Ltd., which was also named in the suit, slumped 3.7% on the Swiss market. 



WEDNESDAY: FTSE 100 5882.18  -9.03 ( -0.15%)   

FTSE 100                  5882.18       -9.03       -0.15%
FTSE 250                 11372.81      -37.00       -0.32%
DJ UK Smaller Companies    954.24       -3.11       -0.32%
Thursday's UK data include retail sales at 0930 GMT.


FTSE Closes Lower Weighed By Euro Debt ConcernsFTSE 100 closes down 0.1% at 5882.18 but above earlier lows with support from stronger-than-expected US economic data which also helps Wall Street trade in the black. Concerns over bank exposures to Spanish debt after Moody's warned that Spain's Aa1 rating was under threat, keep a cap on gains, says City Index.

Capital Shopping Centres closes +4.9%, after the company rejected Simon Property Group's offer. Capital Shopping Centres Group PLC (CSCG.LN) Wednesday rejected an acquisition proposal from shareholder Simon Property Group Inc. (SPG) that values the U.K. company at GBP3 billion, but it postponed a meeting to approve a major purchase that the U.S. shopping-mall owner opposes, allowing time for them to reach agreement or go their separate ways. 

FSA Considers Releasing More Findings In RBS Probe
The U.K. Financial Services Authority will ask Royal Bank of Scotland Group PLC (RBS) for permission to publish a report on its 18-month investigation into the bank and the events that led to its near collapse, the agency's chairman said Wednesday following a political outcry over the report's secrecy.

UK Government - EU Directives Won't Hurt UK Businesses 
U.K. Business Secretary Vince Cable Wednesday announced a new approach to implementing European Union directives into domestic law to ensure British businesses aren't disadvantaged relative to their European competitors.


U.K. JOBLESS 2.5 MILLION
JOBLESS JOLT HIGHLIGHTS RISKS AS UK WADES INTO AUSTERITY
News that U.K. unemployment topped 2.5 million again in the three months to October has raised fresh concerns about a jobless recovery and recharged a political argument over the government's austerity program. U.K. Prime Minister David Cameron said Wednesday he was "concerned" by the rise in unemployment recorded in the latest data but said the economy is enjoying a recovery.

UK Housing And Mortgage Markets Seen Flat In 2011
U.K. housing and mortgage markets are unlikely to improve next year, as economic uncertainty and risk-averse behavior continue to weigh on activity, the Council of Mortgage Lenders said Wednesday.

Ireland Loan Could Earn UK Up To GBP440 Mln
The U.K.'s bilateral loan to Ireland would earn some GBP440 million in interest payments and fees if it is fully repaid, Chancellor of the Exchequer George Osborne said Wednesday.

CBI Retail Sales Balance Soars To Highest Since 2002
U.K. retail sales were much stronger than expected in December as consumers rushed to buy goods before a hike in sales tax in January, a survey by the Confederation of British Industry showed Wednesday.
 

UK Auditor Refuses Full Sign-Off For Lawmakers' Expenses

In a fresh embarrassment for U.K. lawmakers, the National Audit Office (NAO) said Wednesday it would not fully sign off the expense claims submitted by parliamentarians for the 2009-10 financial year.

Lawmakers had asked the NAO to run a full audit of the 2009-10 expenses in the aftermath of last year's expenses scandal, which led to dozens of lawmakers stepping down.

The NAO gave only a qualified sign off to last year's claims, which totaled GBP98.1 million. According to the NAO, lawmakers failed to provide full detail for some GBP2.6 million in claims. Additionally, the NAO said while a further GBP11.3 million was claimed in accordance with parliamentary rules, there was not sufficient evidence for the auditor to confirm the claims were for parliamentary purposes.

Most of the claims concerned staff costs and lawmakers' second homes and offices.

Despite the NAO's findings, Commons authorities are only taking action to recover GBP33,794 from parliamentarians. Of that amount, GBP17,612 was paid to lawmakers who have since stepped down or lost their seats. A spokeswoman for the lower house said that was unlikely to be recovered. 
In the spring of 2009, the Daily Telegraph revealed a copy of lawmakers' expense claims for second-home allowances, igniting a scandal that roiled British politics for months.

The scandal led hundreds of lawmakers from all parties to repay some expense claims, including former Labour Prime Minister Gordon Brown and his Conservative successor David Cameron


On the economic calendar Wednesday, U.K. unemployment figures and the Confederation of British Industry distributive trades survey are at 0930 GMT and 1100 GMT, respectively.

TUESDAY: FTSE 100     5,891.12 +18.73 (0.5%)

UK Inflation Rate Reported At 3.3% in November
The UK Consumer Prices Index (CPI) annual inflation rate rose to 3.3% in November, up from 3.2%

November's inflation rate followed record price rises for the October to November period in food, clothing and furniture.  Retail Prices Index (RPI) inflation - which includes mortgage interest payments - rose to 4.7% from 4.5%.

Food and transport prices are both more than 5% higher than a year ago, ONS figures showed.
Alcohol and tobacco prices have risen by 6.5% in the last year, while clothes and footwear prices are up 2.2%. Food and non-alcoholic drink prices were up by a record 1.6% between October and November.Clothing prices rose by 2%, also a record increase for the October to November period, with the biggest price rises found in men's outerwear. Furniture, household equipment and maintenance also showed a record price rise of 1.6% between October and November.
 
Commenting on the inflation figures, BNP Paribas economist Alan Clarke, said: "It's a disappointing number and it's only going to get worse in the next couple of months." Some of the major energy companies have begun to raise energy bills, adding to the squeeze on
household finances. "Basic rate tax payers need to earn 4.13% just to maintain the purchasing power of their savings, while higher rate tax payers at 40% need to earn 5.5%, a level that is only available on a handful of products." 


GERMANY:
THURSDAY: The German DAX 30 inched 0.1% higher to 7,024.40 
TUESDAY: Germany's DAX closed flat at 7027.40. 
MONDAY: Germany's DAX was 0.3 percent higher at 7,024.96 

On Thursday Commerzbank AG fell 1.7% in Frankfurt.  

On Tuesday, German economic expectations improved for the second consecutive month in December.Also on Tuesday, Germany would be willing to support the European Central Bank with more capital if the bank said that was necessary, a government official said -- a step that would reinforce the ECB's finances as it tries to contain the continent's debt crisis.

On Monday, German Chancellor Angela Merkel said she sees no need for an increase of the size of the current financial safety net for troubled euro-zone member states.


FRANCE:
THURSDAY: The French CAC 40 gained 0.2% to 3,885.36 
TUESDAY: France's CAC-40 index ended 0.3% higher at 3902.87
MONDAY: CAC 40     3,892.44     +35.09 (0.91%)

SWITZERLAND:
SWITZERLAND LEAVES RATES UNCHANGED
The Swiss National Bank left its key interest rate on hold Friday as concerns about euro zone's tensions offset robust Swiss economic growth this year.

SCOTLAND:
WEDNESDAY:
Scottish Unemployment Rate Declined
Unemployment in Scotland fell by 5,000 to 234,000 in the three months from August to October, according to official figures. The number of Scots claiming Jobseeker's allowance rose by 300 from October, to 135,600 in November. The unemployment rate in Scotland stands at 8.7%, compared with a UK rate of 7.9%.


IRELAND:
FRIDAY: Dublin Stocks: ISEQ Ends -0.5% At 2,825; Bank Of Ireland -14% 

Moody's Investors Service Inc. downgraded Ireland to Baa1 from Aa2 Friday, keeping its negative outlook, saying the government's financial strength could deteriorate due to pressures from its ailing banks or to slower-than-expected growth in the Irish economy.


Irish Stock Exchange Outlines
New Corporate Governance Rules
The Irish Stock Exchange Friday published new corporate governance rules for listed companies to provide "a clear and meaningful description" of their remuneration policy and also outline the rationale for the size and structure of company boards.

Company annual reports should give details of planned or anticipated changes to the board size or structure, set out the specific skills and experience of the board, and, the ISE says, how they are "harnessed to best effect in addressing the major challenges for the company."

Where a company has not complied with all relevant provisions of the U.K. Corporate Governance Code, it's required to explain the reasons for noncompliance, but the ISE says companies should avoid copying wording contained in the corporate governance disclosures year after year.

WEDNESDAY: Dublin Stocks: ISEQ Ends Flat At 2,830; Financials Mixed
Ireland's Lawmakers Vote In Favor Of EU/IMF Bailout. Irish Public Lost Vote and Country
The government won with a majority of six votes. 

Irish lawmakers Wednesday voted to accept EUR67.5 billion in loans from the European Union and International Monetary Fund as part of an EUR85 billion package to shore up Ireland's stricken banks and public finances.

The passage of the vote is an important victory for Prime Minister Brian Cowen's ruling coalition, although it is expected to lose power in a general election early next year amid widespread dissatisfaction with the government's role in Ireland's financial crisis. 

The EU and IMF money will be used to stabilize Ireland's banks and provide the exchequer with funds while sky-high borrowing costs keep Ireland locked out of capital markets. Ireland is contributing another EUR17.5 billion of its own resources to the rescue package and has agreed bilateral loans with the U.K. and other nations.

Opposition parties Fine Gael, Labour and Sinn Fein voted against accepting the loans from the EU and IMF, saying they represented a bad deal for the Irish people.

The Irish government will begin drawing on the funds early in the new year, Finance Minister Lenihan said Dec. 10.

  Ireland is the second euro zone country to receive international aid, after Greece. Ireland turned to the EU and IMF after investors became increasingly reluctant to lend it money because of the huge strain on the public finances of supporting its banks, whose deposits and vast debts were guaranteed by the government in September 2008.

Cowen's government has embarked on an unpopular austerity drive that aims to reduce Ireland's budget deficit to under 3% of gross domestic product by 2014.

Tax hikes and cuts to the minimum wage and further reductions on handouts to the poor and the blind have stoked public anger.

Voters are scheduled to go to the polls once the final pieces of the government's 2011 budget legislation, which lays out EUR6 billion of a total of EUR15 billion of tax hikes and spending cuts over four years, have been passed by parliament. 


TUESDAY:Dublin Stocks: ISEQ Ending Flat At 2,850; AIB -4% 

Shares of Allied Irish Banks PLC sank 4.6%. Late Monday, Allied Irish said it had dropped plans to pay bonuses after Finance Minister Brian Lenihan threatened to withdraw state support extended to the group. 


MONDAY: Dublin Stocks: ISEQ Ends +0.8% At 2,854; Elan +3.5% 
FRIDAY:Dublin Stocks: ISEQ Ends -0.5% At 2,832; AIB -12% 

The Irish opposition party Fine Gael said it will discuss its position on the country's EUR67.5 billion aid package at a meeting of senior party figures next week. Ireland's parliament will vote on it Wednesday, Prime Minister Brian Cowen said Thursday.

SPAIN:
THURSDAY: The IBEX 35 index slipped 0.1% to 10,002.1

RUSSIA:


Russia Central Bank Withholds Ruble Support

Russia's central bank held off support for the ruble Friday, declining to sell foreign currency for the first time in a month and a half, the deputy chairman said.

Russia's Medvedev Hints At 2012 Run

A top aide to Russia's President Dmitry Medvedev has given a strong hint that he is considering running for the presidency in 2012, the BBC reports on its website Friday.

RUSSIA AND CHINA LAUNCH NEW FOREX PAIR
Preliminary trade for the yuan-ruble pair will begin on Moscow's Micex exchange this week, while China is looking to use rubles to pay for Russian timber, seafood and coal as the two countries seek to strengthen currency ties while sidestepping the dollar. The Micex will trade CNY3 million ($451,000) daily starting Dec. 15, officials at the country's largest market by volume said at a Moscow conference. Both Russia and China have in the last several years called for countries to lessen their reliance on the U.S. dollar. 

____________________________________________________________
Asian Pacific Markets:
Most Asian equity markets have declined Wednesday. Asian stocks fell, dragging down the MSCI Asia Pacific Index from a 2 1/2-year high, as U.S. and Japanese central-bank reports cast doubt on the strength of the global economic recovery.

CHINA:
FRIDAY: Shanghai     2,893.74     -4.40 (-0.15%)
Hang Seng Index     22,714.85     +46.07 (0.20%)



OFFSHORE TRADING IN YUAN TAKES OFF
China's currency is emerging as a hot property in global foreign-exchange markets, just months after Beijing allowed the yuan to be bought and sold outside the mainland for the first time.

The People's Bank of China fixed the yuan's daily mid-point CNY=SAEC versus the dollar at 6.6531 on Tuesday. The yuan may rise or fall 0.5 percent against the dollar from
its mid-point each day.   

The People's Bank issues mid-point data through the Shanghai-based interbank market, the China Foreign Exchange Trade System, on the market's website:
http://www.chinamoney.com.cn

CHINA AND PAKISTAN SIGN $20 BILLION DEAL
China, Pakistan Sign $30 Billion Overall In Deals

China and Pakistan signed around $20 billion in deals Friday, boosting trade and investment as Wen Jiabao became the first Chinese premier in five years to visit the nuclear-armed state.

Pakistan, on the front line of the U.S. war on al Qaeda and battling a Taliban insurgency in its northwest, considers China its closest foreign ally and treated Wen and a massive business delegation to a red-carpet welcome.

The two countries signed 13 agreements and memorandums of understanding in fields including energy, rail transport, reconstruction, agriculture and culture, Information Minister Qamar Zaman Kaira told reporters.

"The Chinese government has assured they will fund all the energy projects of Pakistan," he said. "China will provide assistance in 36 projects in Pakistan to be completed in five years," he said. "Basically this is a five-year development plan."

He said $14 billion will come through a joint economic cooperation group, $5 billion in other business agreements, while deals worth another $10 billion are expected to be concluded at a business leaders' meeting Saturday.

  "Overall the Chinese investment is expected to be around $30 billion," he said.

"We have unprecedented relations with China. The whole nation is proud of the Pakistan-China friendship," Prime Minister Yousuf Raza Gilani told PTV.

  The Chinese premier held talks with Gilani after being greeted at the airport by Pakistan's entire cabinet and military chiefs, who depend on Chinese hardware, and a guard of honour with a 21-gun salute.

Wen will meet President Asif Ali Zardari, attend a business cooperation summit and inaugurate a new Chinese cultural center in Islamabad on Saturday. He will address a joint session of the Pakistani parliament before leaving Sunday.

Although no specific mention was made of nuclear power, talks are believed to be ongoing on China building a one-gigawatt nuclear power plant as part of Pakistani plans to produce 8,000 megawatts of electricity by 2025 and overcome acute energy shortages.

The West has expressed concern about the security of Pakistan's nuclear material, but China has built a 300-megawatt nuclear power reactor at Chashma in central Punjab province and another of the same capacity is under way.

Without going into details, officials in Pakistan admit the country has a civil nuclear cooperation agreement with China, a counterweight to India's agreement with the U.S. on nuclear energy cooperation.

"We have developed an energy cooperation mechanism, it relates to all sectors of energy, including wind, coal and hydro energy," Kaira said

Pakistan depends on China's financial and political clout to offset the perceived threat from rival India and rescue its economy from the doldrums of catastrophic flooding, a severe energy crisis and poor foreign investment.

China will open branches of the Industrial and Commercial Bank of China, or ICBC, its top private bank, in Karachi and Islamabad, Kaira said.

Pakistan's prime minister has expressed hope that trade will rise to between $15 billion and $18 billion over the next five years. "We achieved our targets, the outcome of the visit is beyond our expectations. It is a historic day," Pakistan's ambassador to Beijing Masood Khan said. Pakistan and China have a strategic partnership and "this partnership has been further strengthened," he said.  


CHINA'S WEN TO EXPAND TIES WITH PAKISTAN
Chinese Premier Wen Jiabao arrived in Pakistan Friday for a three-day visit aimed at expanding economic and defense ties, while at the same time assuaging concerns over Beijing's recent friendliness with India.

CHINA AND INDIA TO DOUBLE TRADE
India and China said they aim to lift their annual bilateral trade to $100 billion by 2015, illustrating a renewed effort to boost cooperation between the world's two fastest-growing major economies.


MONDAY: Shanghai 2,873.84 +32.80 (1.15%)
Hang Seng Index 23,282.30 +119.39 (0.52%)

Monday, China’s Shanghai Composite Index (CN:SHCOMP 2,874, +32.80, +1.15%) rose 1.3% to 2,879.02 and Hong Kong’s Hang Seng Index (HK:HANGSENG 23,280, +117.24, +0.51%) advanced 0.7% to 23,316.38

Chinese shares advanced Monday in relief after the central bank on Friday ordered banks to set aside more cash as reserves but belied expectations for a weekend interest rate increase despite a surge in monthly inflation. China’s stocks rose, pushing up the benchmark index by the most in two weeks, after the central bank refrained from increasing interest rates and government reports showed the economy is withstanding tightening policies. 

In a statement released Sunday in Beijing at the end of the annual Central Economic Work Conference, the nation’s leadership stressed on the need to “put stabilizing the overall price level in a more prominent position” in ranking economic policy priorities. The statement came after both President Hu Jintao and Premier Wen Jiabao addressed the conference.

Deutsche Bank’s China economist Jun Ma said the statement represented “the official endorsement for continued tightening of monetary policy, including further [interest rate and reserve requirement rate] hikes and slowdown in credit growth.”

CHINA CPI RAISED TO 5.1%
Consumer prices rose a more-than-forecast 5.1 percent from a year earlier. Official data released Saturday showed China’s consumer price index hit the highest level in more than two years.  Producer-price inflation was 6.1 percent, higher than any of 28 economists surveyed by Bloomberg News had estimated.

Saturday’s data showed China’s producer price index also climbed by a faster-than-expected 6.1% from the year-ago period. China’s monthly industrial production jumped 13.3% and retail sales accelerated 18.7%, while urban fixed asset investment for the first 11 months of the year rose 24.9% from the corresponding period of 2009.

The data came a day after the People’s Bank of China raised banks’ reserve rate requirements by half-a-percentage point.


EQUITY NEWS:

CHINA MOLYBDENUM PLANS TO ISSUE
UP TO 542 MILION A SHARES IN CHINA IPO
China Molybdenum Co., China's largest molybdenum producer by output, said Sunday it plans to sell up to 542 million yuan-denominated A shares in an initial public offering in mainland China to fund its expansion...


FRIDAY: China's central bank on Friday increased the amount of money that lenders must keep on reserve for the third time in one month. The statistics bureau brought forward the release of economic data to Dec. 11 from Dec. 13, signaling to some economists including Societe Generale SA’s Glenn Maguire that a rate increase could come as early as the weekend. Instead, the central bank boosted reserve requirements by 50 basis points starting Dec. 20, the third increase in five weeks.  


JAPAN:
FRIDAY: Nikkei 225     10,303.83     -7.46 (-0.07%)
WEDNESDAY:Nikkei 225 10,309.78 -6.99 (-0.07%)
TUESDAY: Nikkei 225  10,316.77  +22.88 (0.22%)

JAPAN'S BUSINESS CONFIDENCE FADES

Japanese stocks declined after the Tankan index of sentiment issued its confidence among Japan’s largest manufacturers. The Nikkei 225 declined to 10,312.96, losing -3.81 (-0.04%)

Confidence among Japan’s largest manufacturers worsened for the first time since the end of the financial crisis last year as a stronger yen erodes export gains and the effect of government stimulus measures fades.

The quarterly Tankan index of sentiment at large manufacturers dropped to 5 in December from 8 in September, the Bank of Japan said in Tokyo. A positive number means optimists outnumber pessimists. Sentiment is expected to fall to minus 2 in March, and companies submitted the strongest forecast for the yen since data began in 1996, the data also showed.

Today’s report adds to concern that Japan’s economy may contract in the fourth quarter, and buttresses the case for the Bank of Japan to consider more monetary stimulus. Data for October showed industrial output fell by the most since February 2009, export growth moderated and the jobless rate rose. Japan’s jobless rate rose to 5.1 percent in October.

Japan’s gross domestic product is expected to decline at a 1.9 percent annual pace in the three months through December, according to a survey of 42 economists released Dec. 8 by the Economic Planning Association.

MONDAY: Nikkei 225 10,235.73 +23.78 (0.23%) 

The benchmark Nikkei closed the morning session up 0.1 percent or 14.69 points at 10,226.64.The broader Topix index advanced 0.2 percent to 890.05.

Japan's Nikkei average climbed slightly on Monday on the yen's recent weakness. The yen's weakness is helping to bolster exporters, commodities and Japanese stocks move higher. The market is under some pressure today but Tokyo stocks remain very firm as prospects for the global economy and global shares are improving.

Nikon Corp fell 1.2 percent to 1,601 yen, extending losses after Goldman Sachs cut its rating to "sell" from "neutral" and added the stock to its "conviction sell" list on Friday. The brokerage also lowered its target share price to 1,340 yen from 1,450 yen.

Copper smelter Furukawa Co Ltd climbed 3 percent to 104 yen after copper prices rose near record highs on bullish Chinese import data and upbeat U.S. consumer sentiment that boosted the demand outlook.

Japan's prime minister on Monday ordered cabinet ministers to lower the corporate tax burden by 5 percentage points from the fiscal year starting in April in a bid to improve the competitiveness of firms in the country.

The cut in the effective tax rate for Japanese companies, which is higher than most major economies at around 40 percent. The finance ministry says the government would lose about 1.5 trillion yen ($18 billion) in tax revenue from the cut and that the loss must be made up by expanding the tax base.


SOUTH KOREA:
TUESDAY:  KS11 KOSPI Seoul Composite Index 2,002.55 Up 6.98 (0.35%)

Un-Employment Drops in South Korea
South Korea’s unemployment rate unexpectedly fell to a six- month low of 3.2 percent in November as the nation’s economic expansion encouraged manufacturers to hire more workers, Statistics Korea said in Gwacheon today. 

MONDAY: KS11 Seoul Composite Up 10.45 (+0.53%)
South Korea’s won rose to a two-week high.

Monday, South Korea's Hana Financial Group Inc. said it aims to raise KRW1.2 trillion via a private placement of shares to help fund its KRW4.69 trillion acquisition of a majority stake in Korea Exchange Bank . (published 0222 GMT)


SINGAPORE:

Singapore Exchange Proposed Purchase of ASX Cleared by Regulator

Singapore Exchange Ltd. ’s bid for ASX Ltd. , operator of the Australia’s main bourse, has been cleared by the nation’s competition regulator.

The deal wouldn’t adversely affect competition in exchange services, the Australian Competition and Consumer Commission said in a statement today. A key focus of its investigation was whether the acquisition of ASX would deter entry into the Australian market of rival Chi-X Australia Pty and other competitors due to SGX’s links with Chi-X Global Inc., it said.

Singapore Exchange offered to buy ASX on Oct. 25 for A$8.4 billion ($8.4 billion) in a cash and share deal that would create the world’s fifth-largest listed exchange company. Based on SGX’s closing share price yesterday, the value of the deal was A$7.8 billion.


http://www.bloomberg.com/news/2010-12-14/singapore-exchange-bid-for-asx-cleared-by-australian-competition-regulator.html



AUSTRALIA:
FRIDAY: S&P/ASX 200     4,763.10     -20.90 (-0.44%) 
WEDNESDAY: S&P/ASX 200 4,767.80     +0.90 (0.02%) 
AORD ASX All Ordinaries Index 10:41pm EST 4,845.00 -1.10 (-0.02%)

TUESDAY: S&P/ASX 200     4,766.50     +9.40 (0.20%)
AORD ASX All Ordinaries Index 10:41pm EST 4,847.00 +5.80 (+0.12%)

TUESDAY:
BORROWING COSTS TO DECLINE
Australia’s four biggest banks may cut borrowing costs by as much as 40 percent selling covered bonds after European lenders pushed sales of the asset-backed debt to a record.

MONDAY: S&P/ASX 200  4,764.90  +19.00 (0.40%)

AUSTRALIAN BANK REFORM

Measures to rein in Australian banks fell short of public expectation Sunday when the government said it would improve banking competition in Australia but wouldn't directly punish the four dominant banks.


Australia's government on Sunday introduced a series of measures aimed at improving banking competition in a country where four large banks are raising lending rates despite bumper profits. Treasurer Wayne Swan said the government will inject an additional four billion Australian dollars ($3.94 billion) into securitization markets, while also allowing the issuance of covered bonds.

Banking competition has been a hot-button issue in Australia in the last month after the country's four largest banks each raised home lending rates beyond a one-quarter-point increase by the central bank. The lending increases threaten to have a broad economic impact, with consumer spending making up roughly two-thirds of Australia's economy.


EQUITY NEWS:
Transfield Services Ltd. said Monday it has agreed to acquire Australian well services company Easternwell for A$575 million and will partly fund the deal with a A$294 million equity raising. (published 2213 GMT) 



NEW ZEALAND:
TUESDAY:  NZX 50 INDEX 3,294.98 Up 3.69 (0.11%) 


TELECOM NZ SELECTED AS PREFERRED BIDDER FOR BROADBAND NETWORK
Telecom Corp of New Zealand Ltd. has been selected as a preferred bidder to build three quarters of New Zealand's NZ$3 billion broadband network, the government said Monday, a move that makes it more likely it will participate in the nationwide build. (published 0341 GMT)


NEW ZEALAND MINE DISASTER FORCED COMPANY IN RECEIVERSHIP
Weeks after a series of explosions killed 29 miners in New Zealand the mine's owner Pike River Coal Ltd was placed on Monday in receivership, marking another blow to the country's mining industry.





____________________________________________________________
WORLD FOREX CURRENCIES SNAPSHOT:
(FRIDAY, DEC 17, 2010 2:00 PM EST)

EUR/USD     1.3154     -0.0086 (-0.65%)
USD/JPY     84.1600 +0.1300 (0.15%)
GBP/USD     1.5478     -0.0153 (-0.98%)
USD/CAD     1.0125     +0.0064 (0.64%)
USD/HKD     7.7771     +0.0012 (0.02%)
USD/CNY     6.6545     -0.0090 (-0.14%)
AUD/USD     0.9853     -0.0044 (-0.44%)




____________________________________________________________
WORLD MARKETS SNAPSHOT:
(FRIDAY, DEC. 17, 2010 2:00 PM EST)

Shanghai     2,893.74     -4.40 (-0.15%)
Nikkei 225     10,303.83     -7.46 (-0.07%)
Hang Seng Index     22,714.85     +46.07 (0.20%)
TSEC     8,817.90     +35.70 (0.41%)
FTSE 100     5,871.75     -9.37 (-0.16%)
DJ EURO STOXX 50     2,821.77     -24.01 (-0.84%)
CAC 40     3,867.35     -21.01 (-0.54%)
S&P TSX     13,198.15     +16.92 (0.13%)
S&P/ASX 200     4,763.10     -20.90 (-0.44%)
BSE Sensex     19,864.85     +65.66 (0.33%)

____________________________________________________________
FRIDAY'S U.S. ECONOMIC CALENDAR:
10:00 a.m.
Nov Leading Indicators Leading Index (expected +1.2%), Coincident Index (previous +0.1%), Lagging Index (previous +0.1%)



EARNINGS REPORTS:

Best Buy, FedEx, General Mills Inc. (GIS) and Research in Motion Ltd. (RIMM, RIM.T) are among the companies set to report their latest quarterly results next week. All four companies are expected to report revenue and profit growth from a year ago.

Oracle will announce its fiscal second-quarter results Thursday. Wall Street expects BlackBerry maker RIM, which is set to report Thursday, to post the most impressive growth. The company issued strong guidance for the fiscal third quarter in November.

The Department of Commerce's retail-sales report for November is expected to show growth of 0.8%, and 0.6% excluding motor vehicles and parts, according to Briefing.com. The results come after strong October growth, as consumers become more confident about the economic climate, although high unemployment remains a concern.

Housing starts and building permits data for November are due out Thursday, with both metrics expected to report an increase from October's disappointing showing. Still, housing starts are at extremely low levels and the outlook is still murky amid high levels of unsold new homes.

The Consumer Price Index, a measure of the price level of a fixed market basket of goods and services purchased by consumers, is again projected to inch up in November,



ECONOMIC CONFERENCES:

Among the significant conferences next week are the Imperial Capital LLC The Security Investor Conference in the District of Columbia on Monday and Tuesday; the Bank of America Merrill Lynch Global Industries Conference in New York Tuesday through Thursday; the Deutsche Bank Securities Inc. BioFEST Conference in Boston on Tuesday and Wednesday; the Raymond James IT Supply Chain Conference in New York Tuesday; the Roth Capital Partners Infant, Juvenile and Toy Conference in New York Tuesday; and the First Midwest Securities Inc. Small Cap Ideas Conference in New York Thursday. 


____________________________________________________________
US STOCK MARKET SUMMARY, THURSDAY, DEC. 16, 2010:

Stocks:
U.S. equities closed higher Thursday. In afternoon trades U.S. stocks broadly rose Thursday, fueled by the industrial sector. The dollar declined 26% leading equities and commodities back up. U.S. equities closed higher Thursday with the Dow finishing up 41 points today to close at 11,499.25, the S&P added 7 points to end at 1242.87, and the Nasdaq gained 20 points to finish at 2637.31 for the day.    

Treasurys:
Treasury prices rose as key yields at seven-month high brought in some buyers. The rebound provided some relief for a market that has been heavily beaten over the past week.
Forex:
The euro rose marginally against the dollar, as traders awaited details from a European Union summit that might indicate a permanent solution to the euro zone's debt crisis is at hand.





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