US & World Daily Markets Financial Briefing 10-08-2006

Trade your way to Financial Fitness!
Click here to find out more.

Stocks down on foiled terror plot

Stocks dropped in early trading on renewed terrorism concerns after British authorities foiled a plot to blow up U.S.-bound flights added to lingering concerns about the state of the economy.

In the opening minutes, the Dow Jones industrials fell 7.53 points to 11,068.65, the S&P 500 dropped 1.03 points to 1,264.92, and the Nasdaq shed 7.03 points to 2,052.98.

Markets on Wednesday couldn't hold early gains from strong Cisco Systems and
Walt Disney & Co. results. Another warning from home builder Toll Brothers, among other triggers, reignited economic growth concerns.

Tobias Levkovich, Citigroup's equity strategist, said recession fears are overdone, and compared the current situation to 1994-1995 when the Federal Reserve also made a series of rate-hikes. "One should expect a rally, but not of the extraordinary 1995 magnitude," he told clients in a note. Double-digit gains should be expected, but not 20 percent-to-30 percent returns, he added.

Terrorism concerns were renewed on Thursday, after British authorities said they disrupted a plot to blow up several flights from the U.K. to the U.S.

Published reports suggested that six planes were due to be blown up, though Scotland Yard wouldn't confirm the number of planes targeted.

The news knocked airline stocks in Europe, with British Airways falling over 3 percent. Cruise operator Carnival and Intercontinental Hotels also were lower in London, and the FTSE 100 stock market index more broadly declined 1.2 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.

The Nikkei 225 in Tokyo had more modest declines, with the key index easing 0.2 percent.

The terror plot news did give a minor lift to gold, with spot gold up 75 cents to $650.30 an ounce, and weighed on crude-oil futures, which fell 59 cents to $75.90 a barrel.

The British pound edged lower after recent gains, though the greenback was weaker against the Japanese yen.

Trade balance and weekly jobless claims data is ahead.

Of other companies in focus, Dow industrials component American International Group late Wednesday reported a 29 percent profit decline that topped expectations.

Viacom may rise after reporting a 23 percent profit rise on the benefits of buying DreamWorks.

Retail giant Target is due to report quarterly results as well.

Imax is expected to tumble after disclosing a Securities and Exchange Commission probe into the timing of its revenue recognition and after not being able to find a buyer.

Deutsche Telekom tumbled in Germany after the operator of fixed-line services and the T-Mobile mobile networks in the U.S., the U.K. and Germany cut its profit outlook for the next two years.

FOREX:

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

Leading London shares stayed lower midafternoon, albeit off hefty session lows after the UK was put on maximum terror alert today following an alleged foiled plot to blow up several trans-Atlantic planes, with Wall Street's opening falls less than expected after better-than-expected trade numbers, dealers said.

At 3.09 pm, the FTSE 100 index was 64.94 points lower at 5,795.6, albeit off midmorning lows of 5,752.6.

All the broader FTSE indices were also weak, with the FTSE 250 index down 95.3 points at 9,233.8.

Volume was fair, with 1.638 bln shares changing hands in 215,644 deals.

In Paris at 4.05 pm, the CAC-40 index was off 65.94 at 4,959.22, on volume of 2.7 bln euro.

On the Matif, August CAC-40 futures were trading down 65.5 points at 4,962.5, and the euro slipped to 1.2809 usd from 1.2888 usd late yesterday.

Overnight losses on Wall Street had already prompted investors to expect weakness for French stocks today, since many investors fear that rising oil prices could stoke inflation pressures that would require further interest rate tightening, even though the Federal Reserve left its key rate unchanged at the meeting earlier this week.

In Frankfurt at 12.02 pm, the DAX 30 index was 105.96 points or 1.79 pct lower at 5,601.12, having moved between a low of 5,557.59 and a high of 5,662.73 so far this session.

The MDAX was at 7,812.7, down 112.03 points or 1.43 pct, while the TecDAX was at 621.8, down 12.73 points or 2.01 pct.

The DAX futures contract was at 5,614.50, down 53.50 points or 0.94 pct, while bund future was at 116.88, up 0.10 points.

Get a Completely Free $50,000 FX Demo!
Instant execution with: no slippage, no partial fills and no debits – all Guaranteed. Click the bid or offer with instant fills. Zero commissions – Period! All at XPRESSTRADE.com

Asian shares close mostly lower on Wall St fall, investor caution

Share prices across the Asia-Pacific region closed mostly lower following a fall on Wall Street overnight and with the Japanese market trading cautiously ahead of the release of GDP data tomorrow.

Tokyo shares finished mixed, with few market players willing to bet aggressively ahead of tomorrow's second quarter GDP data and Bank of Japan governor Toshihiko Fukui's press briefing at the conclusion of a policy meeting, dealers said.

However some foreign fund buyers helped the broad market firm slightly.

The Nikkei 225 Stock Average closed down 25.68 points or 0.2 pct at 15,630.91, after trading between 15,536.15 and 15,690.86.

The broader TOPIX index of all first-section issues rose 4.45 points or 0.3 pct to 1,582.88, after moving between 1,572.20 and 1,587.18. 

Following losses on Wall Street overnight, stock prices moved in and out of positive territory with players reluctant to push equities decisively in either direction, dealers said.

Australian shares ended lower with sentiment initially hit by the weaker close on Wall Street, although bargain-hunting emerged to minimize the losses, dealers said.

The S&P/ASX 200 lost 8.8 points or 0.18 pct to close at 4,953.2.

The benchmark indicator closed off the day's low of 4,926.3 and below a high of 4,957.6.

Hong Kong shares were weaker in afternoon trade on modest profit-taking after yesterday's strong gains and losses on Wall Street overnight, dealers said.

At 3.27 pm the Hang Seng Index was down 85.39 points or 0.49 pct at 17,261.19.

In mainland China, A-shares in Shanghai and Shenzhen closed sharply higher on fresh money inflows thanks to a strong yuan, as investors snapped up property developers and oil refiners, dealers said.

The Shanghai A-share Index added 29.0 points or 1.75 pct to 1,688.15 and the Shenzhen A-share Index was up 6.54 points or 1.61 pct at 412.24.

The KOSPI index closed down 10.62 points or 0.81 pct at 1,304.31, off a low of 1,293.53 and a high of 1,314.76.

All it takes is 2 minutes a day to get your hands on some of the best stock option trades going! MICC - 1207%, AMR - 612%, HMY - 400%, GFI -177%, AEM - 1079%, VRTX - 192%, ALXN - 433%, ZRAN - 380%, ATHR - 326%, TKLC - 64%, TWTC - 540%

If you ever thought about trading options, now is the time to take a closer look. Click here

Gold continued to edge higher after the heightened alert for terrorist activity at UK airports this morning, which soon led to tighter security around the region and in the US.

Trading got off to a chaotic start as news of the terror alert broke, and gold benefited from knee jerk safe haven type buying. Analysts believe the gains will prove temporary.

The initial reaction was to push gold higher, consolidating the move above 650 usd per oz yesterday, said Simon Denham at Capital Spreads.

The gains appear to be tapering off, however.

At 12.47 pm, spot gold, was quoted at 662.20 usd, off an early high of 665.1 usd but much higher than the 651.15 usd at the time of the Comex market close in New York yesterday.

Copper reached a four-week high Wednesday, as traders re-directed their attention to the ongoing labor strike at Chile's Escondida.

The most active September copper contract settled up 10.80 cents at $3.71 per pound. During the session the contract hit a high of $3.7320 -- its highest price since July 12.

The strike at Escondida looks to continue indefinitely as workers broke off contract talks with mine management on Wednesday.

HotSignals.com Inc to be featured on World Business Review for Innovative Financial Trading Technologies, hosted by Alexander Haig with industry expert Al Berkeley. Explore Hotsignals, simple yet effective scanning technology here. Example: Short 18th January on GOOG at $444.91