Oil Make New High, Fed Program Denied by Market
Global Market
Treasuries rose on speculation the Federal Reserve's plan to revive bank lending and stem losses in credit markets may fail. Investors sought the relative safety of U.S. government securities on concern the central bank's plan to swap Treasuries for agency and private mortgage bonds won't lessen banks' demands for more collateral on loans secured by debt. Traders increased bets policy makers will cut the benchmark lending rate by three-quarters of a percentage point next week. The two-year note's yield dropped 13 basis points to 1.61 percent.
The benchmark 10-year note's yield fell 15 basis points to 3.45 percent. Five-year rates decreased 17 basis points to 2.46 percent.
Hedge funds with more than $5.4 billion have been forced to liquidate or sell holdings as banks demanded more collateral for bond-secured loans.
New York-based Drake Management LLC told investors that it would either liquidate its $3 billion global opportunities fund, continue to restrict redemptions or allow clients to shift assets to a new fund.
Amsterdam-based GO Capital Asset Management BV prevented customers from taking money out of its $880 million global opportunities fund.
Retail sales rose 0.2 percent last month that was bigger than forecast. Consumer spending accounts for about 70 percent of the U.S. economy.
The outlook for the global economy deteriorated for a fourth month in March on declining faith in Asia's ability to dodge the U.S. slump. The Bloomberg Professional Global Confidence Index fell to 13.1 from 14.3 in February.
The pace of consumer price increases will slow to 2.5 percent by the fourth quarter. Consumer prices including food and energy rose 4.3 percent in January. Longer-maturity Treasuries are more sensitive than shorter-term notes to inflation expectations.
Treasuries extended gains as stocks declined. The Standard & Poor's 500 Index fell 0.9 percent, and the Dow Jones Industrial Average lost about 0.4 percent.
The cost of borrowing euros for three months rose for a seventh day. The euro interbank offered rate for the loans increased 1 basis point to 4.61 percent today. The comparable dollar rate fell 2 basis points to 2.85 percent.
Stock Market
U.S. stocks fell for the fourth time in five days on concern the Federal Reserve will fail to prevent a recession as oil climbed above $110 a barrel.
The Dow Jones Industrial Average fell 211 points from its midday high as oil rose. Sunoco Inc. dropped after analyst said demand may decrease. Humana Inc. led shares of health insurers decline on concern reduced earnings forecast. Financial firms helped erase a quarter of that rally. The Standard & Poor's 500 Index lost 11.88 points to 1,308.77. The Dow slipped 46.57 points to 12,110.24. The Nasdaq Composite Index decreased 11.89 to 2,243.87.
The S&P 500 fell after Merrill Lynch & Co., Goldman Sachs Group Inc. and others said the Fed's plan may not eliminate gridlock in credit markets. The central bank said it would pump $200 billion into the banking system to shore up financial firms battered by $188 million in losses and writedowns related to the subprime mortgage market's collapse.
Sunoco fell $4.22 to $53.27. The refiner was downgraded to below average along with Frontier Oil Corp., Holly Corp., and Tesoro Corp. Valero Energy Corp. refiner, was cut to average.
Conoco Philips slid $1.18 to $78.32 after saying higher costs for services and equipment prompted it to reduce its production target. Energy shares in the S&P 500 lost 1.5 percent as a group, even as oil climbed to a record as the dollar weakened to an all-time low against the euro.
Retailers fell on the rally in crude. RadioShack Corp. dropped 82 cents to $15.40. Circuit City Stores Inc. fell 19 cents to $3.78. Macy's Inc. retreated 78 cents to $23.20.
Humana tumbled $6.50 to $40.88 after cutting its 2008 earnings forecast. Rival WellPoint Inc fell 81 cents to $46.45 today. UnitedHealth Group Inc. retreated $1.56 to $36.68.
MBIA Inc. dropped 59 cents to $11.55. Ambac Financial Group Inc. fell 87 cents to $6.86. MGIC Investment Corp. slid $2.08 to $12.92.
The AMEX Airline Index dropped 10 percent after JPMorgan Chase & Co. lowered its ratings on the biggest carriers because of soaring jet-fuel prices and a slowing economy.
Northwest Airlines Corp. tumbled $1.98 to $10.25. Analyst cut Northwest, American Airlines and United Airlines to underweight. AMR plunged $1.36 to $9.31. UAL Corp. retreated $2.54 to $24.29. Delta Air Lines Inc. lost $1.98 to $10.13. Continental Airlines Inc. declined $2.16 to $20.46. The two carriers were reduced to neutral.
Southwest Airlines Co. retreated 91 cents to $11.49 after grounding 41 of its Boeing Co. 737s without disclosing a reason for the action.
Caterpillar rose $2.64 to $75.25. The company increased its sales forecast for 2010 by 20 percent to $60 billion on growing demand from emerging markets. Caterpillar has almost doubled sales since 2003 on demand from markets such as China, Russia and South Africa.
Investor pessimism about U.S. stocks surged after employers eliminated jobs rate.
The Russell 2000 Index dropped 1 percent. The Dow Jones Wilshire 5000 Index fell 0.8 percent to 13,179.46.
Currencies
The U.S. currency slid to a record low against the euro and the yen as Bush said its decline was not ``good tidings'' for proponents of a strong dollar. It traded near an all-time low versus the Swiss franc before a government report today that may show U.S. consumer spending slowed as record high oil prices sap purchasing power.
The dollar traded at $1.5535 per euro. The U.S. currency traded at 101.49 yen. The dollar bought 1.0158 Swiss francs. The British pound was little changed at $2.0267.
The dollar also fell as firms from Citigroup Inc. to Goldman Sachs Group Inc. said the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. The dollar may decline to $1.57 per euro this month.
U.S. retail sales rose 0.2 percent in February. The Commerce Department will release the data later today in Washington. Crude oil in New York touched $110.20 a barrel.
The Dollar Index declined to a record low of 72.20.
Commodities
Oil
Crude oil traded $110.20 a barrel in New York as the dollar dropped against the euro and the yen, prompting investors to buy commodities.
The dollar touched $1.5573 per euro and 101.10 yen. The declining U.S. currency has spurred investors to move funds into commodities such as oil and gold.
Crude oil for April delivery rose 1 cent to $109.93 a barrel. Futures rose $1.17 to settle at $109.92 a barrel.
Brent crude for April settlement rose $1.02 to close at a record $106.27 a barrel. Futures reached $106.41 a barrel.
Prices fell as much as 1.5 percent to $107.09 earlier yesterday after a government report showed that U.S. oil and gasoline supplies rose.
Stockpiles climbed 6.18 million barrels to 311.6 million in the March 7. A 1.68 million-barrel gain was forecast. Gasoline inventories rose 1.69 million barrels to 236 million.
Gasoline for April delivery rose 0.25 cent to $2.7286 a gallon in New York. On March 11, futures touched $2.7435.
Supplies of distillate fuels fell 1.23 million barrels to 116.4 million barrels last week.
Heating oil for April delivery rose 2.87 cents to $3.0244 a gallon. The contract touched $3.0314.
U.S. crude-oil use typically falls at this time of year when refiners schedule repairs and upgrades as U.S. heating-fuel demand slows and before warmer weather spurs an increase in gasoline consumption.
U.S. intelligence agencies are investigating a potential link between Venezuela and a terrorist group, who declined to say whether the U.S. will add the nation to a list of those sponsoring terrorism. The South American country was the fourth-largest oil supplier to the U.S. in 2007.
U.S. authorities are looking into material seized by Colombian officials this month that may be evidence that Venezuelan President Hugo Chavez aids the Revolutionary Armed Forces of Colombia designated by the U.S. and Europe as a terrorist organization.
Treasuries rose on speculation the Federal Reserve's plan to revive bank lending and stem losses in credit markets may fail. Investors sought the relative safety of U.S. government securities on concern the central bank's plan to swap Treasuries for agency and private mortgage bonds won't lessen banks' demands for more collateral on loans secured by debt. Traders increased bets policy makers will cut the benchmark lending rate by three-quarters of a percentage point next week. The two-year note's yield dropped 13 basis points to 1.61 percent.
The benchmark 10-year note's yield fell 15 basis points to 3.45 percent. Five-year rates decreased 17 basis points to 2.46 percent.
Hedge funds with more than $5.4 billion have been forced to liquidate or sell holdings as banks demanded more collateral for bond-secured loans.
New York-based Drake Management LLC told investors that it would either liquidate its $3 billion global opportunities fund, continue to restrict redemptions or allow clients to shift assets to a new fund.
Amsterdam-based GO Capital Asset Management BV prevented customers from taking money out of its $880 million global opportunities fund.
Retail sales rose 0.2 percent last month that was bigger than forecast. Consumer spending accounts for about 70 percent of the U.S. economy.
The outlook for the global economy deteriorated for a fourth month in March on declining faith in Asia's ability to dodge the U.S. slump. The Bloomberg Professional Global Confidence Index fell to 13.1 from 14.3 in February.
The pace of consumer price increases will slow to 2.5 percent by the fourth quarter. Consumer prices including food and energy rose 4.3 percent in January. Longer-maturity Treasuries are more sensitive than shorter-term notes to inflation expectations.
Treasuries extended gains as stocks declined. The Standard & Poor's 500 Index fell 0.9 percent, and the Dow Jones Industrial Average lost about 0.4 percent.
The cost of borrowing euros for three months rose for a seventh day. The euro interbank offered rate for the loans increased 1 basis point to 4.61 percent today. The comparable dollar rate fell 2 basis points to 2.85 percent.
Stock Market
U.S. stocks fell for the fourth time in five days on concern the Federal Reserve will fail to prevent a recession as oil climbed above $110 a barrel.
The Dow Jones Industrial Average fell 211 points from its midday high as oil rose. Sunoco Inc. dropped after analyst said demand may decrease. Humana Inc. led shares of health insurers decline on concern reduced earnings forecast. Financial firms helped erase a quarter of that rally. The Standard & Poor's 500 Index lost 11.88 points to 1,308.77. The Dow slipped 46.57 points to 12,110.24. The Nasdaq Composite Index decreased 11.89 to 2,243.87.
The S&P 500 fell after Merrill Lynch & Co., Goldman Sachs Group Inc. and others said the Fed's plan may not eliminate gridlock in credit markets. The central bank said it would pump $200 billion into the banking system to shore up financial firms battered by $188 million in losses and writedowns related to the subprime mortgage market's collapse.
Sunoco fell $4.22 to $53.27. The refiner was downgraded to below average along with Frontier Oil Corp., Holly Corp., and Tesoro Corp. Valero Energy Corp. refiner, was cut to average.
Conoco Philips slid $1.18 to $78.32 after saying higher costs for services and equipment prompted it to reduce its production target. Energy shares in the S&P 500 lost 1.5 percent as a group, even as oil climbed to a record as the dollar weakened to an all-time low against the euro.
Retailers fell on the rally in crude. RadioShack Corp. dropped 82 cents to $15.40. Circuit City Stores Inc. fell 19 cents to $3.78. Macy's Inc. retreated 78 cents to $23.20.
Humana tumbled $6.50 to $40.88 after cutting its 2008 earnings forecast. Rival WellPoint Inc fell 81 cents to $46.45 today. UnitedHealth Group Inc. retreated $1.56 to $36.68.
MBIA Inc. dropped 59 cents to $11.55. Ambac Financial Group Inc. fell 87 cents to $6.86. MGIC Investment Corp. slid $2.08 to $12.92.
The AMEX Airline Index dropped 10 percent after JPMorgan Chase & Co. lowered its ratings on the biggest carriers because of soaring jet-fuel prices and a slowing economy.
Northwest Airlines Corp. tumbled $1.98 to $10.25. Analyst cut Northwest, American Airlines and United Airlines to underweight. AMR plunged $1.36 to $9.31. UAL Corp. retreated $2.54 to $24.29. Delta Air Lines Inc. lost $1.98 to $10.13. Continental Airlines Inc. declined $2.16 to $20.46. The two carriers were reduced to neutral.
Southwest Airlines Co. retreated 91 cents to $11.49 after grounding 41 of its Boeing Co. 737s without disclosing a reason for the action.
Caterpillar rose $2.64 to $75.25. The company increased its sales forecast for 2010 by 20 percent to $60 billion on growing demand from emerging markets. Caterpillar has almost doubled sales since 2003 on demand from markets such as China, Russia and South Africa.
Investor pessimism about U.S. stocks surged after employers eliminated jobs rate.
The Russell 2000 Index dropped 1 percent. The Dow Jones Wilshire 5000 Index fell 0.8 percent to 13,179.46.
Currencies
The U.S. currency slid to a record low against the euro and the yen as Bush said its decline was not ``good tidings'' for proponents of a strong dollar. It traded near an all-time low versus the Swiss franc before a government report today that may show U.S. consumer spending slowed as record high oil prices sap purchasing power.
The dollar traded at $1.5535 per euro. The U.S. currency traded at 101.49 yen. The dollar bought 1.0158 Swiss francs. The British pound was little changed at $2.0267.
The dollar also fell as firms from Citigroup Inc. to Goldman Sachs Group Inc. said the Federal Reserve's plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. The dollar may decline to $1.57 per euro this month.
U.S. retail sales rose 0.2 percent in February. The Commerce Department will release the data later today in Washington. Crude oil in New York touched $110.20 a barrel.
The Dollar Index declined to a record low of 72.20.
Commodities
Oil
Crude oil traded $110.20 a barrel in New York as the dollar dropped against the euro and the yen, prompting investors to buy commodities.
The dollar touched $1.5573 per euro and 101.10 yen. The declining U.S. currency has spurred investors to move funds into commodities such as oil and gold.
Crude oil for April delivery rose 1 cent to $109.93 a barrel. Futures rose $1.17 to settle at $109.92 a barrel.
Brent crude for April settlement rose $1.02 to close at a record $106.27 a barrel. Futures reached $106.41 a barrel.
Prices fell as much as 1.5 percent to $107.09 earlier yesterday after a government report showed that U.S. oil and gasoline supplies rose.
Stockpiles climbed 6.18 million barrels to 311.6 million in the March 7. A 1.68 million-barrel gain was forecast. Gasoline inventories rose 1.69 million barrels to 236 million.
Gasoline for April delivery rose 0.25 cent to $2.7286 a gallon in New York. On March 11, futures touched $2.7435.
Supplies of distillate fuels fell 1.23 million barrels to 116.4 million barrels last week.
Heating oil for April delivery rose 2.87 cents to $3.0244 a gallon. The contract touched $3.0314.
U.S. crude-oil use typically falls at this time of year when refiners schedule repairs and upgrades as U.S. heating-fuel demand slows and before warmer weather spurs an increase in gasoline consumption.
U.S. intelligence agencies are investigating a potential link between Venezuela and a terrorist group, who declined to say whether the U.S. will add the nation to a list of those sponsoring terrorism. The South American country was the fourth-largest oil supplier to the U.S. in 2007.
U.S. authorities are looking into material seized by Colombian officials this month that may be evidence that Venezuelan President Hugo Chavez aids the Revolutionary Armed Forces of Colombia designated by the U.S. and Europe as a terrorist organization.
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