re: oil still a worry to equities (WS) Early World Summary: OIL...

re: oil still a worry to equities (WS) Early World Summary: OIL STILL A WORRY TO EQUITIES
RWE News
7:31:020 4/03/2005

Sydney - Friday - March 4: (RWE Australian Business News) US equities
have been subdued overnight as investors wait for the important jobs
creation figures tonight.
Most analysts are predicting a big number of 225,000 while
unemployment should be unchanged at 5.2 per cent.
Financial markets have become even more worried about the oil
price which is still advancing on the perception Chinese demand is
insatiable.
Hedge funds traders contributed to the buying spree after the
government Energy Department lifted oil usage forecasts.
The April crude price settled 52c higher at $53.50 barrel while
the high for the session was $55.20 barrel, not far from the all time
peak of $55.67 barrel set on October 25.
Brent oil also surged higher in London, posting a record of
$52.70 barrel, up $2.70 and the best price since 1988. But it finished
only 73c ahead at $51.90 on the close.
The cost of energy is now a serious threat to global trade as the
OPEC members discuss another production cut and cold weather grips the US
and Europe.
The oil price put a dampener on Wall Street despite support for
Wal-Mart Stores and Boeing.
On Wall Street the Dow is 27 points in front after moving in both
directions during the session. The S&P 500 edged up a point while
technologies pared early gains and slipped into negative territory
reflected by the Nasdaq composite down 7 and the 100 index off 11..
The most important piece of data to emerge overnight came from
the Labor Department's final 4th quarter productivity growth.
It indicated that inflation is still under control although the
improvement is not creating enough jobs which has been the case for more
than a year or two.
Analysts say the productivity growth was much faster than
expected.
Business productivity in the fourth quarter was revised up to 2.1
per cent from 0.8 percent originally.
Economists had expected a revision up to 1.5 percent.
It contributed to push the growth in unit labor costs down to a
revised 1.3 percent from 2.3 percent originally.
In other data, state initial jobless insurance benefits claims
fell 1,000, than than anticipated, to 310,000 for the week ended February
26.
The Labor Department reported that the four- week moving average
of claims, declined to 307,000, the lowest since October 2000.
In other data the Institute for Supply Management's index of
non-manufacturing enterprises rose to 59.8 in February after dropping to
59.2 the month before.
Gross domestic product increased 4.4 per cent in 2004, the most
in five years.
Economists point out that demand in the US is clearly not slowing
down while consumption grows with the economy.
Treasuries have been subdued reflected by the 10 year cash paper
yield edging up less than a point to 4.32 per cent.
The stronger US dollar sent gold sliding $2.90 to $429.90 oz on
Comex.
But the Aussie dollar picked up more than a quarter cent to
US78.27c.


WALL STREET ... is currently 27.12 points in front at 10,839.46
on the Dow Jones Industrial Average index. The broadly-based S&P 500 is
up 1.18 points higher at 1,211.26. But the Nasdaq composite shed 6.8
points to 2,060.7 and the 100 index lost 10.57 points to 1,514.66.
Treasuries barely moved again. The 10-year cash paper eased 1/32 ticks
to 96 29/32, while the yield crept up 0.5 points to 4.382 per cent.

US DOLLAR ... has been firmer against major currencies. The
greenback is selling at 105.24 yen, up from 104.67 yesterday in NY. The
euro is at 1.3112 (prev. 1.3135) and sterling is 1.9075 (prev. 1.9134).
The greenback is at 1.1809 Swiss francs (prev. 1.1737).


AUSTRALIAN DOLLAR ... has picked up a little against the US
dollar. It is presently changing hands at US78.27c, up 16 points on last
night's local close. High for the session was US78.51c and low was
US78.01c. Crosses were stronger. The yen is at 83.33 (prev. 82.03),
0.5967 euros (prev. 0.5965) and 41.02 pence on sterling (prev. 40.94).


EUROPEAN SHAREMARKETS ... closed mixed.
In London, the heavily weighted oil majors helped the FTSE 100
index move higher as crude prices remained stubbornly above $53 per
barrel. BP gained 1.25 per cent to 569.0p and Shell added 1.11 per cent
to 500.5p. Meanwhile, gas provider BG Group climbed 1.99 per cent to
411.0p. Pharmaceutical stock AstraZeneca also lent strong support to the
blue chip index, advancing 3.81 per cent to 21.52 pounds. The US Food and
Drug Administration approved revisions to the US prescribing labeling for
AstraZeneca's cholesterol drug Crestor, based on submissions made by the
company. Credit Suisse First Boston raised AstraZeneca's investment
rating on the news. Shares of counterpart GlaxoSmithKline rose 2.81 per
cent to 13.18 pounds. Finally, diversified services company Rentokil
Initial jumped 4.93 per cent to 170.25p in late trade on news that an
analysts' briefing by the company had been well received.
On the Continent, semiconductor stocks suffered a sell-off after
US market researcher Gartner Group forecasted chip sales growth in 2005
to slow to 3.4 per cent worldwide, from a 24 per cent jump in sales a
year earlier, owing to weaker consumer demand, stubbornly high inventory
levels and reduced business spending. Chip maker Infineon Technologies
saw its shares slide 2.88 per cent to 7.77 euros on the report, while
mobile phone chip manufacturer STMicroelectronics lost 1.37 per cent to
13.70 euros in Paris. Semiconductor-equipment maker ASML Holdings
retreated 2.19 per cent to 13.82 euros in Amsterdam. In other news,
Deutsche Telekom shares fell 1.25 per cent to 15.77 euros in Frankfurt
despite posting a fourth-quarter net profit boosted by further growth at
its wireless and high-speed Internet divisions. The telecoms operator
also raised its 2005 guidance, marginally. French peer France Telecom
dipped 1.42 per cent to 22.95 euros.
At the finish, London's FTSE 100 index rose 22.00 to 5014.80,
Paris's CAC 40 eased 1.37 to 4061.35 and Frankfurt's DAX lost 20.16 to
4373.27. Amsterdam edged down 0.11, Madrid fell 25 and Zurich retreated
15.



METALS ... were mixed as a stronger greenback pushed gold lower.
Spot gold fell $2.90 to $429.90 oz while the April contract dropped $3
to $439.80 oz on COMEX. Silver rallied 7.8c to $7.229 oz on the March
contract while April platinum gained $2.90 to $868.50 oz. New York March
copper slipped 20 points to 147.50c lb. LME closing three month prices
were copper $3204, tin $8400, lead $955, zinc $1396, aluminium $1935 and
nickel $15,150 tonne.

Three-month London Metals Exchange official bid prices were
all firmer. Copper rose $28 to $3186 tonne, lead $4 to $949, zinc $11 to
$1381 and tin $70 to $8400. Nickel retrieved $600 of yesterday's loss of
$770 to finish at $15,950 while aluminium ended $19.50 higher at $1914
per tonne.

OIL ... settled 52c higher at $53.50 barrel for April crude on
the New York Mercantile Exchange. High for the session has been $55.20
and low $52.86 barrel. The price at one stage was only $1.12 below the
all time high registered last October. Continued demand from China and
talk of an Opec production cut sent dealers into buying mode. In London,
the April Brent crude-oil futures contract rose $73c to $51.90 a barrel
on the International Petroleum Exchange.

The CRB index rose 0.98 points to 307.63.
ENDS
!END