a correction....., page-63

re: jump in march cpi undermines us equiti (WS) Early World Summary: JUMP IN MARCH CPI UNDERMINES US EQUITI
RWE News
6:34:020 21/04/2005
Sydney - Thursday - April 21: (RWE Australian Business News) -
In contrast to yesterday's US wholesale inflation figures,
today's consumer price data shows March inflation jumped 0.6 per cent,
the biggest hike in the last five months, mostly due to energy costs.
Other areas to rise significantly were clothing and airline
fares.
Clothing jumped 0.8 per cent in March, airline ticket prices
climbed 2.7 per cent and the cost of hotel and motel rooms rocketed up
3.9 per cent for the month.
The US Labor Department remarked that the rise in the March
Consumer Price Index followed a 0.4 per cent increase in February.
This means that consumer inflation is gaining at an annual rate
of 4.3 per cent over the first quarter of 2005, as compared to a 3.3 per
cent rise in prices for the whole of last year.
It seems more likely now that the Federal Reserve will raise
rates another quarter of a point when the FOMC meets next on May 3 and
the probability is also higher that further increases will ensue in
future months.
Yesterday's report on wholesale inflation showed a parallel
increase of 0.7 per cent, but if the energy and food components are
removed, wholesale inflation has only risen a mere 0.1 per cent for
March.
Wall Street reacted negatively to the key CPI figures and fell
from a positive start to the session to close down 115 points.
As the pace of company quarterly reporting accelerates in the US,
worries about declining fuel inventories and rising inflation have offset
improved results from Dow components, Intel Corp. and Caterpillar Inc.
Caterpillar reported a 38 per cent jump in first-quarter profits
on strong sales of heavy machinery and also raised its revenue and profit
expectations for the year.
Intel announced good profits from its semiconductor business on
the back of strong demand for notebook computers and their relatively
more expensive microprocessors.
The 10-year cash paper yield eased to 4.19 per cent on the
Bloomberg screen.
The American dollar was mixed against the key currencies as
equity markets recovered and inflation fears eased.
But the Aussie dollar rose 51 points higher to US77.58 while the
spot gold price advanced $2.10 to $434.5 oz.
Crude oil prices firmed on the New York Mercantile Exchange as a
Department of Energy inventory report highlighted a 1.8 million barrel
drop in US crude supplies last week.
Also, petrol supplies fell by 1.5 million barrels.

WALL STREET ... settled 115.05 points lower at 10,012.36 on the
Dow Jones Industrial Average index. The broadly-based S&P 500 finished
15.28 lower at 1,137.50. The Nasdaq composite ended 18.60 behind at
1,913.76 while the 100 index lost 13.95 to 1,406.85. Treasuries were
marginally up. According to Bloomberg, the 10-year cash paper rose 4/32
ticks to 98 15/32, dropping the yield 1.8 points to 4.19 per cent.

US DOLLAR ... has been mixed against major currencies. The
greenback is selling at 106.81 yen, down from 106.93 at the previous
close in NY. The euro is at 1.3090 (prev 1.3035) and sterling is 1.9191
(prev 1.9173). The greenback is at 1.1774 Swiss francs (prev 1.1834).

AUSTRALIAN DOLLAR ... rose against the greenback. It is changing
hands at US77.58, up 51 points on last night's local close. High for the
session was US77.66c and low was US77.08c. Crosses were higher with the
yen at 82.87 (prev 82.48), 0.5934 euros (prev 0.5915) and 40.44 pence on
sterling (prev 40.24).

EUROPEAN SHAREMARKETS ... closed lower across all boards as
investors turned their attention towards US economic growth rather than
future interest rate rises.
In London, the blue chip FTSE 100 Index fell 0.69 per cent while
the more broadly-based measure of mid-cap stocks, the FTSE 250 Index
dipped only 0.25 per cent or 17.4 points to 6981.70. Shares of spirits
company Allied Domecq managed to go against the trend, rising 0.70 per
cent as rumours strengthened that counterparts France's Pernod Ricard and
US' Fortune Brands will make a formal bid shortly to acquire the company.
A French newspaper La Tribune reported on Wednesday that a 7.4 billion
pound offer of 670p for each Allied Domecq share is on the cards. As
signs become manifest that China's centralised efforts to cool its
economy are working, Anglo-Dutch steelmaker Corus saw its shares slip
2.47 per cent to 49.5p. Chemical manufacturer Imperial Chemical
Industries firmed 0.28 per cent to 267.25p after receiving a stock rating
upgrade to "neutral" from "underperform" by Credit Suisse First Boston.
In Europe, news that US semiconductor giant Intel Corp. posted a
first-quarter profit that jumped 25 per cent helped the shares of
regional counterparts to firm against the prevailing bearish trend.
The Dutch equipment maker for the manufacture of semiconductor chips ASML
Holdings advanced 2 per cent to 11.75 euros, while Germany's Infineon
Technologies gained 0.15 per cent to 6.85 euros and Franco-Italian
chipmaker STMicroelectronics edged up 0.09 per cent to 11.64 euros. As
investors switched to more defensive portfolios, German utility company
RWE gained 0.69 per cent to 45.21 euros and France's Suez firmed Suez
0.24 per cent to 20.51 euros.
At the close, London's FTSE 100 fell 33.60 to 4822.00, Paris's
CAC-40 dipped 12.37 to 3950.02 and Frankfurt's DAX dropped 25.99 to
4178.62. In other markets, Amsterdam fell 3, Madrid 30 and Zurich lost
63.

METALS ... closed higher again.
Spot gold rose $2.10 to $434.5 and the June contract $2.30 to
$436.70 oz on COMEX. Silver rallied 8.7c to $7.337 oz on the May
contract. The active July platinum climbed $6.40 to $876.6 oz on NYMEX
while New York May copper was 3.8c higher at 150.95c lb.
Three-month London Metals Exchange official bid prices were
unable to obtained [EDITOR'S note: normal data will resume on Friday].

OIL ... settled $0.11 higher at $52.40 barrel for May crude on
the New York Mercantile Exchange. High for the session was $53.10 and
low $52 per barrel. The June contract ended $0.33 higher at $53.90
barrel. In the UK, the June Brent crude contract gained $0.99 to $53.24
per barrel on the International Petroleum Exchange.

The CRB index rose 2.77 to 306.80.
ENDS
!END