world summary: us equities slide on slower growth

World Summary: US EQUITIES SLIDE ON SLOWER GROWTH
08:01, Thursday, 7 September 2006

Sydney - Thursday - September 7: (RWE Aust Business News) - US
equities have finished lower after investors wilted in the face of higher
average weekly earnings and the Beige Book showing a slowing economy.

Wall Street's Dow settled 63 points lower, the S&P 500 lost 13,
and the Nasdaq composite was down 38.

The Labor Department's report revised first-quarter data showing
hourly worker earnings up by 13.7 per cent, well ahead of the previously
reported 6.9pc gain.

In the second quarter, earnings rose at a more subdued, but still
strong, 6.6pc pace.

This is likely to put pressure on the Federal Reserve to lift
rates again to contain an inflationary flow-on.

The gains in worker compensation helped push unit labor costs -
a gauge of inflation and profit pressures - up 5pc over the past year,
the largest increase since a matching rise in the period ended in the
third quarter of 2000.

US business productivity, also grew faster in the second quarter
than initially forecast.

In the Beige Book, which is a 6-weekly review of the US economy
released by the Fed, widespread price increases for energy, metals and
other commodities were noted, but these did not appear to be triggering
more general consumer inflation.

The economy grew overall from mid-July to late August, but five
of the 12 Fed districts reported slowing growth.

It reinforces the Fed's view of a slowing economy, but in
conjunction with higher unit labor costs, it makes it look a little more
like the dreaded stagflation, according to one analyst.

In another survey, the US services sector which generates much of
the country's growth, grew faster than expected in August.

The Institute for Supply Management's services index rose to 57
in August from 54.8 in July.

US Treasury debt prices showed modest losses, again in reaction
to the reading of wage inflation.

The 10-year note yield rose 2 points to 4.80pc.

There was more good news on the energy front, with the October
crude contract falling $1.10 to $67.50 barrel on the New York Mercantile
Exchange.

In other news, NYSE Group chief executive John Thain is
"comfortable" that the New York Stock Exchange operator will close its
$20 billion merger with European exchange operator Euronext NV by early
next year.

Apple and Amazon are set to unveil their widely anticipated
efforts to get consumers to buy or rent movies over the Internet.

Google is launching a service that allows people to search for
news articles dating as far back as the 1700s.



WALL STREET... The Dow Jones industrial average index settled
63.08 points lower at 11,406.20. The Standard and Poor's 500 index
fell 12.99 to 1300.26. The Nasdaq Composite index finished 37.86 points
behind at 2167.84 while the 100 index lost 31.49 points to 1572.20 on the
close. In Treasuries the 10-year cash note fell 4/32 ticks to 100 16/32,
lifting the yield 2 points to 4.80pc. The 30-year bond yield also gained
2 points to 4.95pc while the 2-year note yield put on 2 points to
4.82pc.


US DOLLAR... is firmer against major currencies. It is trading at
116.65 yen from around 116.12 previously in New York. The euro is
$US1.2805 against $1.2817 while sterling is $US1.8846 compared with
1.8941 previously. On the Swiss franc the US dollar is trading at 1.2355
from 1.2338 previously.


AUSTRALIAN DOLLAR... has slipped on the greenback in New
York trading. The $A is currently trading at US76.63c, compared with
yesterday's local close of US76.87c. Overnight, it traded as high as
US76.93c and as low as US76.48c. The Aussie on the crosses is worth 89.39
yen (pre 89.55), 0.5984 euros (pre 0.6023) and 40.66 pence on sterling
(pre 40.77).


AUSTRALIAN MARKET ...is likely to follow the lead from Wall St
and continue the turnaround after the sharp sell-off yesterday. The
September futures contract is down 39 points at this stage, to 5077. The
ASX 200 index ended 36.8 points weaker at 5113.8 yesterday. Today the
August employment data is published. Cambrian Mining will list on the
ASX. News Corp and Global Mining are ex dividend.



EUROPEAN SHAREMARKETS.... finished sharply lower right across the
boards influenced by markets across the Atlantic and the increasing
likelihood of a US rate rise. Traders have been taking the opportunity to
take profits in markets near record highs.

Analysts are worried about US inflationary trends and higher
labour costs.

At the close the UK FTSE-100 Index fell 52.4 points to 5929.30,
the French CAC-40 Index lost 57.33 to 5115.52, the German DAX Xetra 30
Index slumped 71.01 points to 5813.06, while Zurich dropped 53.44 to
8172.78. Other markets were all lower. Amsterdam 5, Brussels 44, Milan
188, Madrid General 10 and Oslo 8.

Continuing falling energy costs, spurred on the few buyers,
especially after the Chevron consortium's encouraging oil find in the
Gulf of Mexico.

However, big oil companies all finished lower including BP, Royal
Dutch Shell and Total.

In Paris, car makers Peugeot retreated along with DaimlerChrysler
in Frankfurt, after Lehman Brothers downgraded both companies to
equal-weight and cut the broader European car sector to neutral.
DaimlerChrysler's July and August US sales came in below forecast.

In Paris, companies reporting earnings included banking group
Credit Agricole and conglomerate Bouygues. Credit Agricole rose 0.3pc
after it said its second-quarter net income rose 34pc to 1.28 billion
euros. Bouygues added after its first-half net profit rose 47pc to 565
million euros after a strong performance at its construction and
infrastructure divisions.

In Amsterdam, Dutch chip equipment maker ASML was one of the few
rising stocks. ASML expects third-quarter unit orders to be substantially
higher than previously indicated. The company now expects 2006 sales to
rise by around 40pc year-on-year.

Dutch brewer Heineken lost ground after it stuck to its guidance
for the year and posted a first-half profit rise of 26pc to 433 million
euros. Analysts had been expecting a better result.

Hotels owner Accor grabbed the spotlight after reporting a
first-half net profit rose a stronger-than-forecast 54pc to 241 million
euros. The group also plans to invest 500 million euros into its services
business by 2010.


METALS... mixed. COMEX September gold spot month contract fell
$5 to $633.50 oz while the October contract lost $5.10 to $635.60 oz.
But September silver rose 6c to $13.065 oz. October platinum shed $4.50
to $1275 oz while spot copper (Sept) put on 5.10c to 370.2c lb in New
York.

Three months closing LME bid prices were copper $8015 tonne,
tin $9100, lead $1330, zinc $3695, aluminium $2620 and nickel $28,000
tonne.

Earlier, on the three months official bid prices, copper gained
$100 to $7910 tonne, tin rose $95 to $9190, lead added $17 to $1295. Zinc
rose $17 to $3624, aluminium rose $45.50 to $2595.50 and nickel ended
$500 lower at $28,205 tonne.



OIL...settled $1.10 lower at $67.50 barrel for the spot price
based on the October contract on the New York Mercantile Exchange
showing a high of $68.85 and low $67.45 barrel. The November crude
contract dropped $1.07 to $68.70 barrel with a high of $69.90 and low
$68.60 barrel. The Brent ICE October crude futures traded $1.07 lower at
$67.02 barrel with a high of $68.25 and low $66.86 barrel.


The CRB index fell 1.65 points to 325.43.

ENDS