US currency may heading for rebound
Global Market
Dollar bulls are back after the currency's drop against the euro and the largest slump in versus the yen. The dollar will likely gain to $1.55 per euro and remain near 100 yen by the end of June.
Deutsche Bank AG and Royal Bank of Scotland Group Plc cut their estimates and reports signaled the U.S. economy may be shrinking. Private foreign investors sold $38.2 billion in U.S. securities.
U.S. growth likely expanded 0.2 percent last quarter, compared with 0.6 percent in the final three months of 2007. The greenback tumbled 7.6 percent against the euro to $1.5788. It plummeted to 99.69 yen as a decline in stock markets from the U.S. to Tokyo and credit market losses led investors to sell high-yielding assets funded with low-interest loans in the currency. The dollar fell against the 16 most actively-traded currencies except the Canadian dollar, South Korean won and South African rand.
Deutsche Bank renew their expectation on the dollar, the dollar will weaken to $1.60 per euro. Meanwhile a survey in January showed the bank predicted the dollar would rise to $1.43. Royal Bank of Scotland forecasts the dollar will trade at $1.57 per euro.
Banks, brokers and hedge funds may report $460 billion in credit losses as Goldman Sachs Group Inc. predicted. Government and private reports this week may show the U.S. lost jobs and manufacturing contracted. The U.S. currency may strengthen as a slowdown in the world's largest economy spreads to other regions, weakening their currencies. The dollar rallied against the pound as the Bank of England cut rates by a half-percentage point to revive growth.
The pound may weaken to $1.98 by June 30. It closed yesterday at $1.9837. Japan's yen will likely appreciate to 153 per euro by June 30. Analyst forecasts the dollar will appreciate to $1.55 per euro and weaken to 97 yen.
Stock Market
U.S. stocks rose as lower oil prices, improved business activity and a Treasury plan to help prevent crises boosted expectations the economy will weather growing credit losses.
Citigroup Inc., Wachovia Corp. and JPMorgan Chase & Co. helped the Standard & Poor's 500 Index pare its decline. General Electric Co. and FedEx Corp. rallied after the National Association of Purchasing Management-Chicago's business index increased more than forecast. Merck & Co. fell after doctors recommended not using two of its cholesterol pills in favor of low-cost alternatives.
The S&P 500 climbed 7.48 points to 1,322.7. The Dow Jones Industrial Average increased 46.49 to 12,262.89. The Nasdaq Composite Index added 17.92 to 2,279.1.
The S&P 500 pared its decline to less than 10 percent as exports spurred new orders, easing concern that business investment would dry up as the economy slows. The Federal Reserve should expand its oversight of financial services beyond banks. Retailers rallied 1.4 percent as a group after crude oil fell more than $4 a barrel.
The S&P 500 Financials Index gained 0.9 percent today, paring its decline to less than 15 percent, and contributed the to index's advance. Wachovia gained $1.01 to $27. JPMorgan rose 24 cents to $42.95.
Citigroup added 59 cents to $21.42. They said it reorganized its consumer division as they tries to reverse a profit slide at the company's revenue generator.
Morgan Stanley climbed after analyst advised clients to buy Morgan Stanley shares because it can weather credit- market losses better. Morgan Stanley and Merrill Lynch & Co. have the strongest liquidity position among the other. Morgan Stanley shares gained 96 cents to $45.70. Merrill added 81 cents to $40.74.
Financial shares may pare their gain tomorrow. Lehman Brothers Holdings Inc. said that it's selling at least $3 billion of convertible preferred shares to U.S. institutions to reassure investors it has ample access to capital. Lehman extended its decline by $1.73 to $35.91.
GE gained 40 cents to $37.01. FedEx rose $1.40 to $92.67. Deere & Co. increased 50 cents to $80.44.
The Chicago purchasers' group said its business index rose to 48.2 from 44.5 a month earlier. Figures lower than 50 signal contraction. Analyst forecast a gain to 46.
Micron Technology Inc. led semiconductor companies in the S&P 500 to rally. Analyst report their selling prices rose 3.1 percent. Micron rose 51 cents to $5.97. SanDisk Corp. added $1.31 to $22.57. Intel Corp. increased 39 cents to $21.18.
Crude oil fell 3.8 percent to $101.58 a barrel on signs that a U.S. report will show inventories rose, helping boost shares of automakers and retailers. General Motors Corp. gained 38 cents to $19.05. They may report sales in the U.S. declined.
Macy's climbed $1.09 to $23.06. Wal-Mart Stores Inc. advanced 56 cents to $52.68. Target Corp. increased 99 cents to $50.68.
AT&T Inc. gained 64 cents to $38.30. They won a $1.6 billion contract to provide communications services to Royal Dutch Shell Plc.
Fortune Brands Inc. jumped $5.64 to $69.50 on a plan to repurchase 15 million shares after losing the bidding for the Absolut vodka brand.
Rowan Cos. advanced $3.30 to $41.18 for. They said it will pursue monetization of its manufacturing unit LeTourneau Technologies Inc.
Merck declined $6.56 to $37.95. Schering- Plough Corp. sank $5.06 to $14.41. Heart doctors meeting in Chicago said physicians should limit prescriptions for the companies' jointly sold cholesterol pills Vytorin and Zetia. The drugmakers sold $5.2 billion of Vytorin and Zetia last year. The study showing the drugs work no better than a generic medicine.
S&P 500 members may report a 9.9 percent average drop in first-quarter profit. Meandwhile earnings at health-care companies had been expected to rise 1.3 percent.
Treasuries rose today, rounding out their best annual start since 1995. The dollar traded within a cent of a record low against the euro, completing its biggest quarterly loss against the European currency in almost four years.
Lehman Brothers Holdings Inc. is selling $3 billion of new shares to bolster capital and squash speculation about a cash shortage that pushed the stock down 42 percent this year. Lehman will offer 3 million convertible preferred shares. Demand for the shares was already three times greater than the amount offered.
The stock fell 2.8 percent $36.60 after the market's official close, while credit-default swaps declined, showing investors believe Lehman's ability to pay debts has improved. Lehman closed at $37.64. Credit-default swaps tied to Lehman's senior unsecured bonds narrowed 15 basis points after the announcement to 285 basis points. A decline signals improvement in investor confidence. Terms of the offering include a coupon payment of 7 percent to 7.5 percent. The conversion premium will be 30 to 35 percent above the current stock price. Analyst upgraded Lehman to buy.
Their net income declined 57 percent, less than analysts estimated, because of a $1.8 billion writedown. Merger advisory fees jumped 34 percent, investment-management revenue surged 39 percent and equities rose 6 percent.
Merrill Lynch raised $6.6 billion in January by selling preferred shares to a group including the Kuwaiti Investment Authority and Japan's Mizuho Financial Group Inc.
Lehman announced the financing after the close of regulator trading on NYSE, where shares closed 23 cents lower at $37.64.
Currencies
The yen was changed little against the dollar as a quarterly survey showed sentiment among large manufacturers declined, raising expectations the Bank of Japan will cut interest rates this year.
The yen traded at 99.79 per dollar and at 157.24 versus the euro. The currency may fall to 100.50 per dollar today. The dollar traded at $1.5758 per euro.
The Tankan's index of confidence among Japan large manufacturers dropped to 11 points from 19 in December, lower than economists estimate at 13 points. Investors speculate that Japan's central bank will reduce the rate to 0.25 percent. Fed reduced the target rate to 2.25 percent. The European Central Bank's key rate is 4 percent.
Commodities
Gold
Gold and silver fell after investor reduced demand for precious metals as a hedge against inflation. The CRB Index fell 2.3 percent today, led by declines in soybeans, wheat and crude oil. The CRB Index touched 385.41 today, down from 422.12 on March 13.
Gold futures for June delivery dropped $15 to $921.50 an ounce. Silver futures for May delivery tumbled 63 cents to $17.31 an ounce. Crude fell as much as 5.1 percent on speculation a slumping U.S. economy will slash fuel demand. Hedge-fund managers and other large speculators decreased their net-long position in gold futures in the week ended March 25. Speculative long positions outnumbered short positions by 175,742 contracts. Net-long positions fell by 16,267 contracts from a week earlier.
The euro has climbed 8.2 percent against the dollar as the Federal Reserve reduced U.S. borrowing costs.
Dollar bulls are back after the currency's drop against the euro and the largest slump in versus the yen. The dollar will likely gain to $1.55 per euro and remain near 100 yen by the end of June.
Deutsche Bank AG and Royal Bank of Scotland Group Plc cut their estimates and reports signaled the U.S. economy may be shrinking. Private foreign investors sold $38.2 billion in U.S. securities.
U.S. growth likely expanded 0.2 percent last quarter, compared with 0.6 percent in the final three months of 2007. The greenback tumbled 7.6 percent against the euro to $1.5788. It plummeted to 99.69 yen as a decline in stock markets from the U.S. to Tokyo and credit market losses led investors to sell high-yielding assets funded with low-interest loans in the currency. The dollar fell against the 16 most actively-traded currencies except the Canadian dollar, South Korean won and South African rand.
Deutsche Bank renew their expectation on the dollar, the dollar will weaken to $1.60 per euro. Meanwhile a survey in January showed the bank predicted the dollar would rise to $1.43. Royal Bank of Scotland forecasts the dollar will trade at $1.57 per euro.
Banks, brokers and hedge funds may report $460 billion in credit losses as Goldman Sachs Group Inc. predicted. Government and private reports this week may show the U.S. lost jobs and manufacturing contracted. The U.S. currency may strengthen as a slowdown in the world's largest economy spreads to other regions, weakening their currencies. The dollar rallied against the pound as the Bank of England cut rates by a half-percentage point to revive growth.
The pound may weaken to $1.98 by June 30. It closed yesterday at $1.9837. Japan's yen will likely appreciate to 153 per euro by June 30. Analyst forecasts the dollar will appreciate to $1.55 per euro and weaken to 97 yen.
Stock Market
U.S. stocks rose as lower oil prices, improved business activity and a Treasury plan to help prevent crises boosted expectations the economy will weather growing credit losses.
Citigroup Inc., Wachovia Corp. and JPMorgan Chase & Co. helped the Standard & Poor's 500 Index pare its decline. General Electric Co. and FedEx Corp. rallied after the National Association of Purchasing Management-Chicago's business index increased more than forecast. Merck & Co. fell after doctors recommended not using two of its cholesterol pills in favor of low-cost alternatives.
The S&P 500 climbed 7.48 points to 1,322.7. The Dow Jones Industrial Average increased 46.49 to 12,262.89. The Nasdaq Composite Index added 17.92 to 2,279.1.
The S&P 500 pared its decline to less than 10 percent as exports spurred new orders, easing concern that business investment would dry up as the economy slows. The Federal Reserve should expand its oversight of financial services beyond banks. Retailers rallied 1.4 percent as a group after crude oil fell more than $4 a barrel.
The S&P 500 Financials Index gained 0.9 percent today, paring its decline to less than 15 percent, and contributed the to index's advance. Wachovia gained $1.01 to $27. JPMorgan rose 24 cents to $42.95.
Citigroup added 59 cents to $21.42. They said it reorganized its consumer division as they tries to reverse a profit slide at the company's revenue generator.
Morgan Stanley climbed after analyst advised clients to buy Morgan Stanley shares because it can weather credit- market losses better. Morgan Stanley and Merrill Lynch & Co. have the strongest liquidity position among the other. Morgan Stanley shares gained 96 cents to $45.70. Merrill added 81 cents to $40.74.
Financial shares may pare their gain tomorrow. Lehman Brothers Holdings Inc. said that it's selling at least $3 billion of convertible preferred shares to U.S. institutions to reassure investors it has ample access to capital. Lehman extended its decline by $1.73 to $35.91.
GE gained 40 cents to $37.01. FedEx rose $1.40 to $92.67. Deere & Co. increased 50 cents to $80.44.
The Chicago purchasers' group said its business index rose to 48.2 from 44.5 a month earlier. Figures lower than 50 signal contraction. Analyst forecast a gain to 46.
Micron Technology Inc. led semiconductor companies in the S&P 500 to rally. Analyst report their selling prices rose 3.1 percent. Micron rose 51 cents to $5.97. SanDisk Corp. added $1.31 to $22.57. Intel Corp. increased 39 cents to $21.18.
Crude oil fell 3.8 percent to $101.58 a barrel on signs that a U.S. report will show inventories rose, helping boost shares of automakers and retailers. General Motors Corp. gained 38 cents to $19.05. They may report sales in the U.S. declined.
Macy's climbed $1.09 to $23.06. Wal-Mart Stores Inc. advanced 56 cents to $52.68. Target Corp. increased 99 cents to $50.68.
AT&T Inc. gained 64 cents to $38.30. They won a $1.6 billion contract to provide communications services to Royal Dutch Shell Plc.
Fortune Brands Inc. jumped $5.64 to $69.50 on a plan to repurchase 15 million shares after losing the bidding for the Absolut vodka brand.
Rowan Cos. advanced $3.30 to $41.18 for. They said it will pursue monetization of its manufacturing unit LeTourneau Technologies Inc.
Merck declined $6.56 to $37.95. Schering- Plough Corp. sank $5.06 to $14.41. Heart doctors meeting in Chicago said physicians should limit prescriptions for the companies' jointly sold cholesterol pills Vytorin and Zetia. The drugmakers sold $5.2 billion of Vytorin and Zetia last year. The study showing the drugs work no better than a generic medicine.
S&P 500 members may report a 9.9 percent average drop in first-quarter profit. Meandwhile earnings at health-care companies had been expected to rise 1.3 percent.
Treasuries rose today, rounding out their best annual start since 1995. The dollar traded within a cent of a record low against the euro, completing its biggest quarterly loss against the European currency in almost four years.
Lehman Brothers Holdings Inc. is selling $3 billion of new shares to bolster capital and squash speculation about a cash shortage that pushed the stock down 42 percent this year. Lehman will offer 3 million convertible preferred shares. Demand for the shares was already three times greater than the amount offered.
The stock fell 2.8 percent $36.60 after the market's official close, while credit-default swaps declined, showing investors believe Lehman's ability to pay debts has improved. Lehman closed at $37.64. Credit-default swaps tied to Lehman's senior unsecured bonds narrowed 15 basis points after the announcement to 285 basis points. A decline signals improvement in investor confidence. Terms of the offering include a coupon payment of 7 percent to 7.5 percent. The conversion premium will be 30 to 35 percent above the current stock price. Analyst upgraded Lehman to buy.
Their net income declined 57 percent, less than analysts estimated, because of a $1.8 billion writedown. Merger advisory fees jumped 34 percent, investment-management revenue surged 39 percent and equities rose 6 percent.
Merrill Lynch raised $6.6 billion in January by selling preferred shares to a group including the Kuwaiti Investment Authority and Japan's Mizuho Financial Group Inc.
Lehman announced the financing after the close of regulator trading on NYSE, where shares closed 23 cents lower at $37.64.
Currencies
The yen was changed little against the dollar as a quarterly survey showed sentiment among large manufacturers declined, raising expectations the Bank of Japan will cut interest rates this year.
The yen traded at 99.79 per dollar and at 157.24 versus the euro. The currency may fall to 100.50 per dollar today. The dollar traded at $1.5758 per euro.
The Tankan's index of confidence among Japan large manufacturers dropped to 11 points from 19 in December, lower than economists estimate at 13 points. Investors speculate that Japan's central bank will reduce the rate to 0.25 percent. Fed reduced the target rate to 2.25 percent. The European Central Bank's key rate is 4 percent.
Commodities
Gold
Gold and silver fell after investor reduced demand for precious metals as a hedge against inflation. The CRB Index fell 2.3 percent today, led by declines in soybeans, wheat and crude oil. The CRB Index touched 385.41 today, down from 422.12 on March 13.
Gold futures for June delivery dropped $15 to $921.50 an ounce. Silver futures for May delivery tumbled 63 cents to $17.31 an ounce. Crude fell as much as 5.1 percent on speculation a slumping U.S. economy will slash fuel demand. Hedge-fund managers and other large speculators decreased their net-long position in gold futures in the week ended March 25. Speculative long positions outnumbered short positions by 175,742 contracts. Net-long positions fell by 16,267 contracts from a week earlier.
The euro has climbed 8.2 percent against the dollar as the Federal Reserve reduced U.S. borrowing costs.
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