re:us equities in retreat as oil worries (WS) Final World...

re:us equities in retreat as oil worries (WS) Final World Summary: US EQUITIES IN RETREAT AS OIL WORRIES
RWE News
7:31:020 1/03/2005
Sydney - Tuesday - March 1: (RWE Australian Business News)
US equities are on the skids again overnight, losing much of Friday's
gains as the FOMC prepares for this week's meeting to debate interest
rates.
The consensus is for a 25 basis points increase, lifting the Fed
Funds target rate to 2.75 per cent.
Wall Street has so far turned in a dismal performance with the
Dow off 63 points, the S&P 500 losing 8, the Nasdaq composite off 18 and
the 100 index trailing 20.
Bad news for the sharemarket was Biogen Idec Inc. shares which
tumbled following suspension of the No. 3 US biotechnology company's
multiple-sclerosis drug following the death of a patient.
And General General Motors Corp. and Ford Motor Co. fell as Banc
of America Securities issued sell recommendations against the two stocks.
Financial markets place higher energy prices number one in the
list of economic uncertainties along with outsourcing of jobs to foreign
countries and the federal budget deficit.
Investors appear concerned about the oil price which is still
hovering around $52 barrel for April crude on the New York Mercantile
Exchange - although the price settled 26c higher at $51.95 barrel.
Treasuries were badly mauled reflected by the 10 year notes which
saw the yield climb 9 points to 4.36 per cent.
At one stage dealers breached the technical level of 4.3 per
cent.
This was influenced by the Chicago National Association
Purchasing Management index which edged higher to 62.7 from 62.4 in
January, a little above forecast of 60.2.
The stronger number was was helped by the manufacturing numbers
while the employment component rattled bond traders after it came out at
57.7 against 52.8 in January, the seventh straight month of readings
indicating expansion.
It supported the perception that inflation is gathering pace.
Meanwhile another statistic measuring US confidence reached the best
level in seven months.
The brokerage UBS firm's index coupled with Gallup, showed
investor optimism up to 82 in February, its highest level since July. .
That rise has been due to investors' confidence in their
ability to reach short-term investment targets as well as a more positive
view on economic growth.
Eighty-seven per cent of all investors say energy prices are
hurting the US investment climate, including 56 percent who say "hurting
a lot".
But Fed Board Governor Mark Olson says he expects the US economy
to keep growing at a solid rate and inflation while inflation
expectations seem well-contained.
"We expect to see the economy continue to expand at a solid
pace., " Olson declared.
Consumer spending, housing and business fixed investment have
been strong.
In other data, sales of new US homes dropped 9.2 per cent in
January, disappointing Wall Street which predicted a rise of 2.5 per
cent.
Home sales have been boosted by low mortgage rates but this is
likely to change soon.
The industry has been central to the US economic expansion
although the housing market should slow modestly in 2005 as the Federal
Reserve raises borrowing costs.
In other data, US personal spending was unchanged in January
after rising a month earlier, the Commerce Department said.
The index of prices consumers paid for goods and services other
than food and energy rose 0.3 percent, the biggest increase since
December 2002.




WALL STREET ... is currently 62.51 points lower at 10,780.03 on
the Dow Jones Industrial Average index. The broadly-based S&P 500 is
trailing 7.7 points at 1,203.67. The Nasdaq composite is 18.17 points
behind at 2,047.23 and the 100 index lost 19.79 points to 1,507.11
Treasuries tumbled on the latest data. The 10-year cash paper plunged
23/32 ticks to 97 3/32, lifting the yield 9 points to 4.36 per cent.


US DOLLAR ... has been mostly weaker against major currencies.
The greenback is selling at 104.47 yen, down from 105.18 Friday in NY.
The euro is at 1.3237 (prev. 1.3243) and sterling is 1.9228 (prev.
1.9185). The greenback is at 1.1622 Swiss francs (prev. 1.1625).


AUSTRALIAN DOLLAR ... has been firmer against the US dollar.
now changing hands at US79.23c, up a mere 8 points on last night's local
close. High for the session was US79.45c and low was US79.03c. Crosses
were stronger. The yen is at 82.76 (prev. 82.69), 0.5986 euros (prev.
0.5937) and 41.21 pence on sterling (prev. 40.98).


EUROPEAN SHAREMARKETS ... closed flat to lower on a weaker Wall
Street.
In London, HSBC fell 2.8 per cent to 868.0p after the bank
reported a hike of 37 per cent to 17.6 billion dollars in its 2004
pre-tax profit and raised its dividend by 10 per cent. Publishers of the
Financial Times newspaper Pearson dropped 2.15 per cent to 638.0p after
it said that 2004 adjusted pre-tax profits fell to 386 million, more
than the expected 410 million. Pearson's revenue eased to 3.92 billion
from 4.05 billion. Much of the problem is sheeted home to the declining
US dollar. Notable on the upside was Bunzl whose shares jumped 6.44 per
cent to 500.25p. The distribution and outsourcing company announced that
it will hive off its Filtrona unit in June this year, which will become a
supplier of fibre and plastic technology products in its own right.
On the Continent, technology bellwether stocks were sold-off.
Germany's chip maker Infineon Technologies dropped 2.35 per cent to 7.88
euros, Franco-Italian counterpart STMicroelectronics dipped 0.37 per cent
to 13.48 euros and Dutch chip equipment maker ASML Holdings dipped 1.27
per cent to 13.97 euros. France Telecom dropped 1.81 per cent to 22.80
euros after the carrier reported the chief executive is to become
France's finance minister. Monsieur Breton has a reputation as being a
good costs manager. Shares of Germany's stock exchange operator Deutsche
Boerse eased 0.18 per cent to 55.75 euros following an approach by
disgruntled shareholders to change the Exchange's CEO who has led a bid
for the London Stock Exchange.
At the finish, London's FTSE 100 index fell 38.30 to 4968.50,
Paris's CAC 40 eased 7.41 to 4027.16 and Frankfurt's DAX gained 1.85 to
4350.49. Amsterdam edged down 0.19, Madrid fell 49 and Zurich dropped 5.


METALS ... were firmer. Spot gold on the new April contract rose
$1.50 to $437.60 oz while the active June month added a similar amount to
$4440.10 oz on COMEX. Silver gained 6.8c to $7.359 oz on the March
contract while April platinum improved $7.80 to $866 oz. New York copper
rose 1.1c to 150c lb. LME closing three month prices were copper $3238,
tin $8350, lead $947 zinc $1384, aluminium $1911 and nickel $16,100
tonne.

Three-month London Metals Exchange official bid prices were
all firmer. Copper rose $32.50 to $3238 tonne, lead $10 to $949, zinc $24
to $1394 and tin $25 to $8395. Nickel climbed $155 to $16,145 while
aluminium ended $28.50 higher at $1917.50 per tonne.

OIL ... settled 10c higher at $51.49 barrel for April crude on
the New York Mercantile Exchange. High for the session has been $51.90
and low $50.95 barrel. Lower stockpiles of distillate for the week pushed
prices higher while the cold weather sweeping across the US and Europe
didn't help either.
In the UK, April Brent crude advanced 17c to $49.65 barrel.
OPEC members Kuwait and Libya say they see no need for a production cut
at the cartel's March meeting in Iran.

The CRB index rose 4.66 points to 304.89.
ENDS