US & World Daily Markets Financial Briefing 15-11-2006

The world's most trusted name in professional trader education. Click Here

Stocks rise on US Airways bid for Delta

NEW YORK - Stocks rose modestly in early trading Wednesday as investors examined an $8 billion bid from US Airways Group Inc. for Delta Air Lines Inc. and awaited minutes from the Federal Reserve's meeting last month.
   
Traders cheered the possibility of consolidation in the airline industry and appeared upbeat following sharp gains Tuesday, when the Dow Jones industrials reached another record high close and the Standard & Poor's 500 index hit a six-year high.
   
In the first hour of trading Wednesday, the Dow was up 13.61, or 0.11 percent, at 12,231.62, moving further into record territory.
   
Broader stock indicators also advanced. The S&P was up 1.81, or 0.13 percent, at 1,395.03, and the Nasdaq composite index was up 6.78, or 0.28 percent, at 2,437.44.
   
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.61 percent from 4.57 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
   
Light, sweet crude was up 22 cents at $58.50 in premarket electronic trading on the New York Mercantile Exchange. The Energy Department is due to release weekly crude inventory data Wednesday morning.
   
Investors will likely pore over the Fed minutes looking for the central bank's take on the threat of inflation and for insight into the Fed's next move on interest rates. The Fed has left short-term rates unchanged at its last three meetings following a string of 17 straight increases over two years. The Fed minutes are due at 2 p.m.
   
The US Airways deal comes as airlines still often have difficulty finding profits despite a rebound in air travel from earlier in the decade. Delta has said it isn't interested in an offer.

In an unusual occurrence for the company making a takeover bid, US Airways shares rose $2.25, or 6.1 percent, to $38.95. However, the possibility for cost savings pleased investors. Delta was up 27 cents, or 18.4 percent at $1.74.
   
The Russell 2000 index of smaller companies was up 1.95, or 0.25 percent, at 787.01.
   
Britain's FTSE 100 was up 0.29 percent, Germany's DAX index was up 0.48 percent, and France's CAC-40 was up 0.30 percent.

VantagePoint's market forecasts are nearly 80% accurate. Take a look at actual forecasts, become eligible for a Complimentary VantagePoint Market ($750 value!) and see the difference they will make. Click here to see two recent forecasts now.

Pound lower after dovish BoE inflation report

LONDON - The pound edged slightly lower following the release of what analysts saw as dovish comments from the Bank of England on the outlook for inflation.
   
In its latest quarterly Inflation Report, the Bank of England said UK inflation will return towards target quicker than it anticipated just three months ago, with the headline rate actually dipping below 2 pct if one more rate rise materialises.
   
Daragh Maher at CALYON said the report did not deliver a clear-cut signal on whether a further rate hike in February is likely, "thereby preventing markets from either reversing their recent dovish shift or extending it much further."
   
Still, he, along with many others, believes the central bank will deliver a quarter point hike in February, taking the benchmark rate up to 5.25 pct.
    
Separately, data out today revealed that overall average earnings in the three months to September was subdued, rising by just 3.9 pct including bonuses. The latest figure is the lowest since January this year when a 3.9 pct rise was also recorded.
   
If the bonus element is stripped out, average earnings rose by 3.5 pct -- the lowest since August 2003 when a 3.5 pct rise was also recorded.
   
The data also weighed on the pound. Elsewhere, the dollar got a boost from strong data. The November Empire State general business conditions index surprised markets by rising 3.8 points to 26.7.

Follow the futures and FX markets with our trading experts and read their analysis.  Click here to sign up now!

Tokyo - Share prices closed lower on mild profit-taking amid some concern the Japanese economy may not be able to sustain its strong growth in the third quarter amid signs consumer spending could be weakening.
   
Many investors were also on the sidelines ahead of comments by Bank of Japan governor Toshihiko Fukui's at the end of the central bank's two-day policy meeting tomorrow for clues on when the next interest rate hike may happen.
   
The Nikkei 225 Stock Average closed down 46.08 points or 0.28 pct at the day's low of 16,243.47. The broader TOPIX index of all first-section issue dropped 4.42 points or 0.28 pct to settle at 1,592.00, just off the intraday low of 1,591.15.
   
Decliners swamped advancers 1,009 to 593, with 104 issues flat. Volume fell to 1.60 bln shares from 1.85 bln shares yesterday.

Hong Kong  - The Hang Seng Index ended the morning up 112.26 points or 0.59 pct at 18,990.68, off a low of 18,926.31 and a high of 19,016.61. Turnover was 30.17 bln hkd.
   
The Hang Seng China Enterprises Index was up 78.32 points or 0.97 pct at 8,172.22, while the property sub-index was up 155.28 points or 0.72 pct at 21,631.17.
   
China Mobile gained 1.05 hkd or 1.58 pct to 67.70. Among China financials, China Construction Bank was up 0.15 hkd or 3.87 pct at 4.03, ICBC up 0.07 hkd or 1.80 pct at 3.95, Bank of China up 0.05 hkd or 1.40 pct at 3.61 and Bank of Communications up 0.06 hkd or 0.83 pct at 7.28.
   
Among property counters, Cheung Kong was up 0.30 hkd or 0.34 pct at 88, Sun Hung Kai up 0.80 hkd or 0.90 pct at 89.60. Henderson was up 0.25 hkd or 0.58 pct at 43.50, Wharf Holdings up 0.10 hkd or 0.38 pct at 26.75 and New World Development up 0.04 hkd or 0.29 pct at 14.04.

Sydney - The S&P/ASX 200 fell 5.7 points or 0.10 pct at 5,429.9, retreating again from the previous record close of 5,491.6 set on Nov 7. The benchmark index closed above the day's low of 5,422.1 and below the day's high of 5,462.0. The All Ordinaries Index shed 6.3 points to end at 5,399.1, also falling from the Nov 7 record close of 5,456.7.
   
Coles Myer shares lost 0.14 aud to finish at 13.59 aud while David Jones eased 0.03 to 3.44 but Harvey Norman added 0.03 to 3.93 and Woolworths rose 0.49 or 2.30 pct to 21.82.
   

Trade with RCG fxtrader™, the platform offering instant access to 12 major FX trading pairs with low spreads (2 pips EURUSD, USDJPY) and global news from 3 major sources.  Trade with a registered and regulated company in business for 80 years. Smart money trades here – Get your FREE Trial Today!

The nation's leading steel company, BlueScope, jumped after announcing a strong start for its financial year to June 2007, with net profit for the four months to October exceeding 250 mln aud compared with full year to June 2006 net earnings of 338 mln aud.
   
BlueScope shares soared 0.57 or 7.74 pct to end at 7.93, OneSteel rose 0.06 to 4.59 and Smorgon added 0.01 to 1.71.
   
Australia's largest general insurance group, IAG, rose following its forecast of 8-10 pct gross written premium growth for the year to June 2007, helped by acquisitions in Asia.
   
IAG shares ended up 0.13 or 2.32 pct at 5.74 while QBE advanced 0.17 to 26.00 but AMP lost 0.13 to 9.51 and Promina slipped 0.04 to 6.66.
   
A total of 1.56 bln shares traded, worth 5.07 bln aud, with falls outnumbering rises 584 to 579 and 354 stocks unchanged.

Asian Bourse Round-Up

For a full list of closing figures, click here

Inflation picked up in September in Europe as both areas show fragile economic growth. Just as in the U.S., rising energy prices are to blame. Read free, daily market reports available only at CMS Forex and open your free demo trading account today. Click here

Gold slips as dollar strengthens, base metals come under heavy pressure

LONDON - Gold prices sank, extending yesterday's decline, as the precious metal came under pressure from a stronger US dollar and from an across the board sell-off in the base metals.
   
At 1.15 pm, spot gold, which earlier touched an intra-day low of 616.60 usd, was quoted at 619.30 usd, little changed from 623.60 usd at the time of the COMEX market close in New York yesterday.
   
Other precious metals were mixed. Spot silver was down at 12.71 usd an ounce against 12.85 usd, platinum fell to 1,166.00 usd against 1,173.00 usd, while palladium edged up to 318.00 usd against 316.00 usd.
   
Gold often moves counter to the US dollar as it is seen as an alternative investment to the US currency. Meanwhile lower oil prices reduce gold's appeal as a hedge against oil-induced inflation.
   
The dollar strengthened against the euro in European trade as investors awaited this evening's release of the minutes to the last rate-setting meeting of the US Federal Reserve.
   
The release will help shape interest rate expectations and will be particularly interesting in light of yesterday's bigger-than-expected fall in the US producer price index and another decrease in high street prices.
   
Platinum remained under pressure after a report yesterday by Johnson Matthey, the world's biggest platinum distributor, which forecast the market to be in a deficit of only 20,000 ounces this year.

•Perfect for technical day traders
•High leverages allows for more trading flexibility
•Limit risk with Guranteed Stop Losses

Join us today! FOREXYARD | trading made easy. Click Here