Five oil firms to roll back prices by P1/liter on Thursday

With the continued drop in world oil prices, five oil companies announced a price rollback for their petroleum products on Wednesday.

The price reductions will take place Thursday.

The five oil firms - Eastern Petroleum, Petron Corporation, Pilipinas Shell Petroleum Corporation, Total Philippines Corp., and PTT Philippines - said they will reduced the price of their gasoline, kerosene and diesel by P1 per liter.

Petron, announced it will also roll back oil prices for its liquefied petroleum gas (LPG) rates by P2 per kilogram.

Petron, Eastern Petroleum and Shell said the price rollback will take effect 12:01 am of Nov. 20 while PTT and Total said it will impose the rollback 6 a.m. of Thursday.

Peso affects rollback

Fernando Martinez, president of Eastern Petroleum and head of the Independent Philippine petroleum Companies Association (IPPCA) said the decline in the prices of crude in the international market is seen to reflect in "an across the board P1 per liter rollback".

"We have to give this rollback," Martinez said in a telephone interview adding that the P1 price cut this weekend will bring to P8 the total rollback implmented by the oil firms for this week.

"If no one will roll back (their prices), I will definitely implement the rollback," Martinez added.

He also noted that had it not been for the peso depreciation, the rollback could have even be higher at P5 per liter.

Energy Secretary Angelo Reyes said the continued drop in the world oil prices should also result in the decline in the domestic prices and this should also cover until next month.

Monitoring conducted by the Department of Energy indicated that as of Nov. 17, 2008, the average Dubai crude, dropped to US$54 per barrel from October average of US$ 67.

Unleaded gasoline based on Mean of Platts Singapore, price gauge of oil importers, also went down to US$ 54 per barrel as against the US$ 80 per barrel average price last month.

MOPS for diesel prices similarly dropped to US$ 78 per barrel in Nov. 17 from US$ 89 last month.

Not enough

While the recent pump price rollbacks are welcomed, “these are still not enough," said Socioeconomic Planning secretary Ralph G. Recto said, echoing a similar call by the Department of Energy (DOE).

“In our estimate at National Economic and Development Authority (NEDA), the pump prices of gasoline should now be at P35.86 per liter and diesel at P31.77 per liter based on Dubai crude oil prices of $56.00/bbl," Recto, who is also NEDA's director general, said.

At $67/bbl of Dubai crude using the same exchange rate, Recto said gasoline should be about P40.86 per liter while diesel at about P35.22 per liter. As of November 8, the DOE monitored the average retail price of gasoline at P43.96 per liter while diesel stood at P40.94 per liter at an exchange rate of P48.54 to the US dollar.

“It is important to be mindful of the actions of the oil companies because every peso rollback counts for the ordinary Filipino consumer as this should translate into lower prices of transportation, food, and other commodities," the NEDA chief said.- with Aie Balagtas See, GMANews.TV

Three months after merger, Sirius XM struggles

DENVER - Barely three months after the long-delayed merger of satellite radio companies Sirius and XM, the newly combined Sirius XM Radio is struggling to stay afloat.

The company has just another three months to start paying down more than $1 billion in debt that's maturing in 2009 at a time when credit markets are freezing up. It remains heavily dependent on automobile sales for new subscriber additions just as U.S. car sales are tanking. And its stock price is in a yearlong free-fall that has sparked an investor lawsuit.

For the music industry, the fate of Sirius XM looms larger than before. Under a U.S. Copyright Royalty Board decision made last December, satellite radio broadcasters like Sirius XM pay performance royalties for sound recordings based on a percentage of adjusted gross revenue. That means the better Sirius XM does, the more money labels and publishers make.
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That rate currently stands at 6 percent and is set to increase by half a percentage point every year until 2012, when it will reach 8 percent. Neither SoundExchange — which collects those fees and distributes them on behalf of the music industry — nor Sirius XM will reveal exactly how much the company is paying in royalties. According to Sirius XM's quarterly reports, the company paid out a combined $92 million in revenue-sharing and royalty payments during the first half of 2008. That includes payments to SoundExchange and other partners, like equipment suppliers.

But while the music industry is poised to collect a growing percentage of Sirius XM's revenue, that revenue is in trouble. Subscription fees account for about 95 percent of Sirius XM's revenue. To increase income, the company needs to add subscribers and squeeze more revenue out of existing ones. The company reported 18.6 million subscribers as of June 30, up from 15.3 million for Sirius and XM combined a year earlier.

But Wall Street is deeply pessimistic about the road ahead. On Nov. 3, Merrill Lynch analyst Jessica Reif Cohen cut her previous forecast for net subscriber additions by almost 50,000 for the third quarter to 409,000 — which would represent a 51 percent smaller increase from the same period last year. She also cut her third-quarter revenue prediction for 2008 to $611 million, up from $528.8 million a year earlier but down $7 million from her previous forecast.

Slowing auto sales are driving some of the problems, since about half of Sirius XM's current subscribers — and about 80 percent of new subscriber additions in the second quarter — received satellite radios when they bought new cars.

A Sirius XM spokesman says that will be offset by an increase in the number of cars carrying its receivers as a factory-installed option. Its penetration rate among Mercedes-Benz vehicles, for example, is nearing 90 percent.

The company hopes to attract new subscribers by adding short-term, artist-specific channels dedicated to the likes of AC/DC and Led Zeppelin, which a representative hinted would be an ongoing initiative.

In the meantime, the company faces urgent financial challenges, in particular the $1.1 billion in debt that will mature in 2009, about $300 million of which is due in February. That, among other concerns, has caused the company's stock price to fall from a 52-week high of $3.94 per share last December to 26 cents on Friday. Meanwhile, a group of 500 shareholders dubbing themselves "Save Sirius" filed a lawsuit seeking to remove the board and CEO Mel Karmazin.

Ever the pitch man, Karmazin spoke at Nielsen and Dow Jones' Media and Money conference in October, insisting that Sirius XM is "one of the top 25 media companies today" and predicting that it will be "the most successful company in the audio entertainment industry."

Should that come to pass, the music industry stands to make a decent buck. But in the present, there's not much to count on. source

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World shares head for worst month ever

ONDON (Reuters) – Shares in Asia and Europe fell on Friday, heading for their worst month ever, while the low-yielding yen surged as Japan's interest rate cut failed to erase concerns about the deteriorating global economic outlook.

The Bank of Japan joined a global easing cycle by trimming interest rates by 20 basis points to 0.3 percent, but disappointed many who had expected a bigger quarter point cut.

The move followed the Federal Reserve's decision to cut interest rates to 1 percent -- its lowest level since June 2004 -- to stave off a prolonged recession. China, Hong Kong and Taiwan also lowered the cost of borrowing this week, with the euro zone, Australia and Britain seen following suit next week.

However, investors feared a round of rate cuts was not enough to stem the flow of worsening corporate earnings and bolster consumer consumption in major economies which might be already in recession.

In response, oil and commodities fell sharply.

"Volatility is the watchword today," said Adam Cole, global head of currency strategy at RBS Capital Markets. "The usual risk aversion plays will also come into play given losses in Asian shares." MSCI world equity index (.MIWD00000PUS) fell 0.9 percent. The index has fallen 21 percent this month, on track for its worst monthly performance in the index's 20-year history.

Asian stocks (.MIAPJ0000PUS) ticked down on the day and European stocks (.FTEU3) were down 0.7 percent. Both indexes also headed for their worst month ever.

U.S. crude oil fell 3 percent to $63.96 a barrel, falling all the way from its record high around $147 set only in July. Gold fell to $724.10 an ounce.

Emerging stocks (.MSCIEF) rose 0.4 percent. The December bund futures fell 30 ticks.

YEN, DOLLAR SURGE

The yen surged 1.7 percent to 96.98 per dollar even as the BOJ cut interest rates.

Risk-averse investors were chasing the low-yielding Japanese currency across the board, sending the yen up nearly four percent to 122.69 per euro.

The dollar (.DXY) rose 1.3 percent against a basket of major currencies.

"The gradual shift in market attention from credit issues to real economic concerns suggests that market stability and releveraging will be some months away," Calyon said in a note to clients.

"The economic news is set to worsen, implying only a very gradual easing in risk aversion in the months ahead and potentially negative feedback to credit markets. Against this background the dollar is set to remain firm."source

Dow ends up almost 900, but no one is exhaling

Wall Street's best day in two weeks — and one of its best ever — was a joyless rally. Even a manic, final-hour stampede of buying that sent the Dow Jones industrials soaring almost 900 points did nothing to dispel the feeling that the market could turn on investors in an instant.

But the extraordinary, lurching volatility that has gripped Wall Street since the financial meltdown began in mid-September meant there were no guarantees the rally would hold, not even for a few days.

Investors are expecting a cut in interest rates when the Federal Reserve announces its decision Wednesday. But they're also staring into an economic abyss, bracing for a recession of a depth no one knows for sure.

Any other day like this — the Dow and the Standard and Poor's 500 both rose almost 11 percent — might have ended with boisterous cheers and paper tossed into the air. On Tuesday, 4 p.m. came with meager applause.

"I don't think it will be a sustained move," said Matt King, chief investment officer at Bell Investment Advisors.

The Dow finished 889 points higher to close at 9,065. On Oct. 13, the Dow rose 936 points, its best ever; no other single-day rally has come close in terms of points to what happened Tuesday.

Analysts ventured a number of explanations for the sudden rally — including coming interest rate cuts, bargain hunting, a market desperate to find a bottom and the expectation that banks, at the urging of the White House, will quit hoarding money and start making loans.

"There is nothing fundamental that came out today or yesterday that would take it up or down. We're all groping for something meaningful to talk about," said Bob Andres, chief investment strategist at Portfolio Management Consultants. "The market is exhausted from going down."

The mood on Main Street is decidedly more pessimistic, and new data Tuesday showed Americans are more depressed than market analysts had expected.

The Conference Board's consumer confidence index plunged to the lowest level in its 41-year history in the wake of this month's financial meltdown, the sharp drop in home prices and increasing job losses.

The index fell to 38, down from a September reading of about 61 — the third-steepest monthly decline since the board started the measure in 1967. Analysts, way off the mark, had expected 52.

"It's the worst consumer environment since the 1981-1982 recession," said Adam York, an economist at Wachovia Corp. Americans believe "there's a very dire situation in the U.S. economy right now, and they're not far from being right," he added.

Financial market turmoil and falling housing prices have wiped out trillions of dollars of household wealth in recent months. The S&P 500 had fallen 27 percent in October, and 40 percent for the year, before Tuesday's jump.

In addition, companies cut 760,000 jobs in the first nine months this year, sending the unemployment rate to 6.1 percent last month. Many economists expect layoffs to continue and the unemployment rate to rise to 8 percent or higher in 2009.

After the last recession, in 2001, the unemployment rate rose as high as 6.3 percent in June 2003.

On Tuesday, Whirlpool Corp. said it will cut 5,000 jobs. That's on top of other recent layoffs of thousands of workers by Xerox Corp., drugmaker Merck & Co. Inc. and financial services firm National City Corp.

"The collapse in confidence is directly tied to perceptions about economic conditions and that is likely to mean that households will keep their wallets closed," said Joel Naroff, an economist with Naroff Economic Advisors.

If they do, it'll happen at a bad time. The holiday season is just weeks away, and it's expected to be anemic.

"I don't know how long this is going to last," said Johnny Hunt, 50, a carpenter in Deltona, Fla., who says he is cutting back on a lot of things. "So I got to save money. You've got to hold onto what you do have."

S&P said in a report earlier this week that holiday retail sales would probably fall 2 percent to $250 billion this year, "the most difficult holiday season in memory for U.S. retailers."

Holiday sales have increased an average of 4.4 percent a year in the past decade, the report said.

Meanwhile, the housing slump, which set off the mortgage crisis that has consumed Wall Street for more than a year, shows no sign of abating. A closely watched index of home prices fell Tuesday by its steepest ever annual rate in August.

The Standard & Poor's/Case-Shiller 20-city housing index dropped a record 16.6 percent from August last year, the largest drop since its inception in 2000.

In addition, the Census Bureau reported that 2.8 percent of U.S. homes — excluding rental properties — were vacant and for sale in the third quarter, unchanged from the second quarter. That works out to 2.22 million properties, the second-highest quarterly number in records going back to 1956.

The first quarter clocked in at a 2.9 percent vacancy rate. In a normal market, it's about 1.7 percent, said Patrick Newport, an economist at IHS Global Insight. That means there's more than 800,000 excess vacant homes on the market.

Exacerbating the pricing environment is a rash of foreclosures, especially in once-hot markets like California, Las Vegas, Florida and Phoenix. Home prices are falling fastest there, according to Case-Shiller — dropping as much as 30 percent in August.

To move foreclosed properties off their books, lenders are sharply discounting prices, which is weighing down median prices.

On Thursday, the Commerce Department will provide its first estimate of the economy's third quarter performance, and many economists think the economy shrank. Economic contraction for the third and fourth quarters consecutively would meet the classic definition of recession.

___

Associated Press writers Tim Paradis in New York and Jeannine Aversa in Washington contributed to this report.

RP shares fall to lowest in more than 4 years

MANILA, Philippines - Philippine share prices took a heavy beating on Monday, with the main index plunging to its lowest in more than four years as investors fled emerging markets on global recession fears, analysts said.

The 30-company Philippine Stock Exchange (PSE) index declined 239.66 points or 12.27 percent to 1,713.83 while the all-share index dropped 122.79 points to 1,138.07.

Data from the PSE showed that Monday’s close was the lowest since September 20, 2004 as the 12.2683-percent decline was the biggest one day percentage drop and also the biggest one-day point drop after February 28, 2007 when the local bourse lost 263.84 points.

All the stock market’s sub-indices lost at least 8 percent each, led by the services sector which shed 13.246 percent, followed by the holding firms, 10.6896 percent; and financials, 10.5206 percent.

Of the 141 traded issues for the day, 123 declined, while five advanced and 13 stocks were unchanged.

Volume traded reached P1.102 billion valued at about P1.6 billion.

Monday’s sharp decline forced the PSE to impose a 15-minute trading suspension between 11:23 a.m. and 11:38 a.m. as the market saw shares falling by more than 10 percent.

For the first time in its 81-year existence, the stock exchange regulator was prompted to halt trading and impose the “circuit breaker" rule in a bid to calm the frantic sell-off in the bourse, Francis Ed. Lim, PSE president and chief executive officer, said.

Peter Raymond Lee, IGC analyst, said investors were dumping emerging markets in favor of “raising cash."

"Asian markets led the decline today mostly on fears that the recession is spreading on emerging markets. We may be one of the smallest markets, but we are still vulnerable," he said.

source

Investors dump stocks since cash remains king

MANILA, Philippines - Philippine share prices on Friday dropped anew as investors chose to liquidate their assets and flee to more stable investments, analysts said.

The 30-company Philippine Stock Exchange index 42.43 points or 2.1258 percent to 1,953.49 while the all-share index slipped 23.30 points or 1.8144 percent to 1,260.86.

Losers dominated gainers 92 to 23 while 24 stocks were unchanged.

Volume traded reached about 847.4 million valued at about P1.951 billion.

Jet Lazaro, Abacus Capital trader, said foreign funds continued to dump local stocks in favor of raising cash.

Asian markets led by Japan's Nikkei and Hong Kong’s Hang Seng were also on a steep slide, losing by triple digits each.

“It’s the same story everywhere. Fund managers are forced to liquidate their assets and get out of emerging markets. There's no let-up," he said.

Friday’s decline was the fourth straight session that the local bourse suffered losses.

Lazaro also noted that issues were selling at their prices some three years ago.

“We’re back to levels three years ago. Some are even selling at their pre -1997 Asian financial crisis," Lazaro said.

He added that following the 1997 crisis, the local bourse had bottomed out only in 2002.

"The qualitative difference of that crisis with this one is that our listed companies are liquid and even our economy is doing much better. Back then local companies had a lot of foreign debts, magnifying the impact of the Asian crisis," he said.

Lazaro added that for next week the local bourse's support levels will come in between 1,909 and 1,805.

Except for four issues, all in the 20 most traded stocks for the day declined.

Telecommunications giant Philippine Long Distance Telephone Co. dipped P30 or 1.373 percent to P2,155.

Ayala Corp., one of the country's largest business groups, slumped P8 or 3.4043 percent to P227.

Geothermal power producer PNOC-Energy Development Corp. tumbled P0.15 or 4.8387 percent to P2.95.

Property giant Ayala Land Inc. dove P0.10 or 1.6949 percent to P5.80.

Globe Telecom Inc., the country's second-largest telecommunications company, shed P10 or 1.1494 percent at P860. - GMANews.TV

RP stock market loses P253B in just a single trading session

MANILA, Philippines - The historic plunge of the Philippine stock market on Monday prompted the bourse’s market capitalization to lose P252.6 billion in value in just a single trading day.

Monday’s steep fall pushed total losses to P1.76 trillion since the start of the month, data from the Philippine Stock Exchange (PSE) indicated.

As of Monday’s trading close, market capitalization was about 27 percent lower than the end of September’s, a difference of about P6.51 trillion.

“As it is, our market is already one of the smaller markets in the world and with the drop today, our value has further diminished," Claire Quiray, Accord Capital Equities analyst, said.

She also noted that the local bourse was the second worst performer in the region for Monday, following Hong Kong’s 12.7-percent plunge.

The PSE’s main index has shed 239.66 points or 12.27 percent at 1,713, a four-year and one month low. Besides being the biggest one-day percentage drop in the stock exchange’s history, it was also the biggest one-day point drop after February 28, 2007 when the local bourse lost 263.84 points.

In a separate telephone interview, Francis Lim, PSE president and chief executive officer, said the market capitalization losses were a “necessary result" of the PSE’s huge decline on Monday.

“It is the peso equivalent of the stock market’s decline today. But we hope that with what the foreign governments are doing, the decrease in the stock market index will slow down. The local market has been tracking global markets," he said.

Lim also called on the government to expedite reforms to develop the capital markets in the Philippines to provide some cushion against global volatility.

Next: Bourse official seeks permanent exemptions for stock market transactions

source

PSE temporarily halts trading as stocks suffer heavy losses

MANILA, Philippines - For the first time in the 81-year existence of stock trading in the country, the Philippine Stock Exchange on Monday has temporarily halted the session in a bid to calm the frantic sell-off in local shares, which sent the main index falling by more than a tenth of its value.

In a telephone interview Francis Ed. Lim, PSE president and chief executive officer, told GMANews.TV that the PSE has imposed the 15-minute circuit breaker rule from 11:23 a.m. to 11:38 a.m. as the bourse's bellwether Philippine Stock Exchange index plunged 220.70 points or 11.3 percent.

"It's a sad day for us but this is not surprising. We're suffering as much as the rest of the world and this is not caused by internal matters," he said.

Lim added that the PSE resumed trading a few minutes before 12 noon.

"We want to remain market-oriented," he said.

The PSE announced late last month that the circuit breaker rule is aimed at giving more time to investors to “digest the impact of a sudden and unusual market drop and to help restore normalcy to the stock market".

The trading halt will be implemented only once in a trading day and will not be resorted to if the drop occurs 30 minutes or less prior to the market close.

Trading at the PSE opens at 9:00 a.m. and closes at 12:10 noon.

Lim earlier said circuit breakers are utilized by some exchanges to prevent investor panic.

"The problem with panic selling is that investors are selling out of pure emotion rather than based on fundamentals. Almost every market crash is a result of panic selling," Lim had said.

The PSE said that other exchanges which have already adopted a similar rule include the New York Stock Exchange, Nasdaq Composite, and Asian bourses such as Malaysia and Thailand, and developed stock markets in South Korea and Taiwan.

On Friday the Dow Jones industrial average fell 312.30, or 3.59 percent, to 8,378.95. However, stock index futures indicated a moderately higher open, with Dow futures climbing 34, or 0.41 percent, to 8,295. Standard & Poor's 500 futures and Nasdaq-100 futures were also higher.

Astro del Castillo, managing director at First Grade Holdings, noted that investors' sentiment was "really bad"

"This is a marathon, looking for a cure. No one can't stop this fall," he said.

Del Castillo added that for the rest of the week, until investors are convinced that the global economy is on its way to recovery, local stocks will be "on a roller-coaster ride with a downward bias." Source

PSE temporarily halts trading as stocks suffer heavy losses

MANILA, Philippines - For the first time in the 81-year existence of stock trading in the country, the Philippine Stock Exchange on Monday has temporarily halted the session in a bid to calm the frantic sell-off in local shares, which sent the main index falling by more than a tenth of its value.

In a telephone interview Francis Ed. Lim, PSE president and chief executive officer, told GMANews.TV that the PSE has imposed the 15-minute circuit breaker rule from 11:23 a.m. to 11:38 a.m. as the bourse's bellwether Philippine Stock Exchange index plunged 220.70 points or 11.3 percent.

"It's a sad day for us but this is not surprising. We're suffering as much as the rest of the world and this is not caused by internal matters," he said.

Lim added that the PSE resumed trading a few minutes before 12 noon.

"We want to remain market-oriented," he said.

The PSE announced late last month that the circuit breaker rule is aimed at giving more time to investors to “digest the impact of a sudden and unusual market drop and to help restore normalcy to the stock market".

The trading halt will be implemented only once in a trading day and will not be resorted to if the drop occurs 30 minutes or less prior to the market close.

Trading at the PSE opens at 9:00 a.m. and closes at 12:10 noon.

Lim earlier said circuit breakers are utilized by some exchanges to prevent investor panic.

"The problem with panic selling is that investors are selling out of pure emotion rather than based on fundamentals. Almost every market crash is a result of panic selling," Lim had said.

The PSE said that other exchanges which have already adopted a similar rule include the New York Stock Exchange, Nasdaq Composite, and Asian bourses such as Malaysia and Thailand, and developed stock markets in South Korea and Taiwan.

On Friday the Dow Jones industrial average fell 312.30, or 3.59 percent, to 8,378.95. However, stock index futures indicated a moderately higher open, with Dow futures climbing 34, or 0.41 percent, to 8,295. Standard & Poor's 500 futures and Nasdaq-100 futures were also higher.

Astro del Castillo, managing director at First Grade Holdings, noted that investors' sentiment was "really bad"

"This is a marathon, looking for a cure. No one can't stop this fall," he said.

Del Castillo added that for the rest of the week, until investors are convinced that the global economy is on its way to recovery, local stocks will be "on a roller-coaster ride with a downward bias." Source

Greenspan denies blame for crisis, admits 'flaw

WASHINGTON – Badgered by lawmakers, former Federal Reserve Chairman Alan Greenspan denied the nation's economic crisis was his fault on Thursday but conceded the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a "state of shocked disbelief."

Greenspan, who stepped down in 2006, called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free market system functions. And he warned that things would get worse before they get better, with rising unemployment and no stabilization in housing prices for "many months."

Gloomy economic reports backed him up. New jobless claims soared to just under 500,000 for last week, and Goldman Sachs, Chrysler and Xerox all said they were cutting thousands more workers. On Wall Street, the Dow Jones industrials bounced erratically all day before finishing up 172 points — after a two-day drop of nearly 750.

The financial crisis even prompted the Republican Greenspan, a staunch believer in free markets, to propose that government consider tougher regulations, including requiring financial firms that package mortgages into securities to keep a portion as a check on quality.

He said other regulatory changes should be considered, too, in such areas as fraud.

Also looking for solutions, another banking regulator told Congress the government was working on a loan-guarantee plan that could help many homeowners escape foreclosure as part of the $700 billion bailout legislation. That plan is being discussed by the Treasury Department and the Federal Deposit Insurance Corp., said FDIC Chairman Sheila Bair, who is pushing the idea.

Greenspan's interrogation by the House Oversight Committee was a far cry from his 18 1/2 years as Fed chairman, when he presided over the longest economic boom in the country's history. He was viewed as a free-market icon on Wall Street and held in respect bordering on awe by most members of Congress.

Not now. At an often contentious four-hour hearing, Greenspan, former Treasury Secretary John Snow and Securities and Exchange Commission Chairman Christopher Cox were repeatedly accused by Democrats on the committee of pursuing an anti-regulation agenda that set the stage for the biggest financial crisis in 70 years.

"The list of regulatory mistakes and misjudgments is long," panel chairman Henry Waxman declared.

Greenspan, 82, acknowledged under questioning that he had made a "mistake" in believing that banks, operating in their own self-interest, would do what was necessary to protect their shareholders and institutions. Greenspan called that "a flaw in the model ... that defines how the world works."

He acknowledged that he had also been wrong in rejecting fears that the five-year housing boom was turning into an unsustainable speculative bubble that could harm the economy when it burst. Greenspan maintained during that period that home prices were unlikely to post a significant decline nationally because housing was a local market.

He said Thursday that he held to that belief because until the current housing slump there had never been such a significant decline in prices nationwide. He said the current financial crisis had "turned out to be much broader than anything that I could have imagined."

Greenspan's much-anticipated appearance before the House panel came as the Senate Banking Committee held its own hearing on what the government is doing now to get out of the mess.

Assistant Treasury Secretary Neel Kashkari, who is overseeing the $700 billion financial rescue effort that passed Congress on Oct. 3, said the administration was not only working to get federal purchases of bank stock started quickly but also the program to mop up troubled mortgage-related assets. He also said the government was working to make sure that directives in the legislation to help struggling homeowners avoid foreclosure were being addressed.

Kashkari said the plan could include setting standards that banks should follow for reworking mortgages to make them more affordable. He said the administration was considering a recommendation to provide government loan guarantees to cover the reworked mortgages to make the program more attractive to banks.

"We are passionate about doing everything we can to avoid preventable foreclosures," Kashkari told the committee.

The FDIC's Bair told the same Senate panel that the government needs to do more to help tens of thousands of people avoid foreclosure.

She said the FDIC was working "closely and creatively" with the Treasury Department to come up with a plan.

Greenspan was asked to defend a variety of actions he took as Federal Reserve chairman — resisting recommendations to use the Fed's powers to crack down on subprime mortgages, for one. And opposing efforts to impose regulations on derivatives, the complex financial instrumentscredit default swaps, which have also figured prominently in the current crisis. that include

He said that outside of credit default swaps, the bulk of financial derivatives had not caused major problems. He said the boom in subprime lending occurred because of the huge demand for investment opportunities in a global economy, and he blamed the crash on a failure by investors to properly assess the risks from such mortgages, which went to borrowers with weak credit.

As for firms that package mortgages into securities, he said, "As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue."

On the billions of dollars of losses suffered by financial institutions because of their investments in subprime mortgages, Greenspan said he had been shocked by the failure of banking officials to protect their shareholders from their bad loan decisions.

"A critical pillar to market competition and free markets did break down," Greenspan said. "I still do not fully understand why it happened."

SEC Chairman Cox told the House panel that "somewhere in this terrible mess, laws were broken." And Snow said that lawmakers should have responded more quickly to his pleas for stronger regulation for mortgage giants Fannie Mae and Freddie Mac, which were taken over by the government last month.

In the meantime, Kashkari, the Treasury official overseeing the bailout program, said there has been much progress, resulting in "numerous signs of improvement in our markets and in the confidence in our financial institutions." Still, he cautioned, "the markets remain fragile."source

Stocks tumble on worries about earnings forecasts

NEW YORK – Wall Street tumbled again Wednesday as investors worried that the global economy is poised to weaken even as parts of the credit market slowly show signs of recovery. The major indexes fell more than 4 percent, including the Dow Jones industrial average, which finished off its lows with a loss of 514 points.

The Standard & Poor's 500 index was the worst performer among the major indexes with a 6.1 percent slide that left it at its lowest level since April 2003.

Corporate profit forecasts, a jump in the dollar and falling commodity prices signaled investors are fearful that an economic slowdown will sweep the globe even if lending begins to approach more normal levels as credit markets ease.

The dollar hit multiyear highs against several other major currencies, weighing on commodity prices. That hurt materials and energy companies, while the fall in oil gave a boost to airlines. Technology shares fared better than the broader market following quarterly reports from Apple Inc. and Yahoo Inc.

While reduced strains in global credit markets have eased some investors' nervousness about the economy, market anxiety remains as hundreds of companies this week report third-quarter results and issue somewhat murky forecasts that are stirring unease about the economic bumps that may lay ahead.

Wachovia Corp., which is being bought by Wells Fargo & Co., reported that it swung to a huge loss in the third quarter while the drugmaker Merck & Co. said its quarterly profit fell 28 percent and that it would cut more than 10 percent of its work force.

John Thornton, co-portfolio manager at Stephens Investment Management Group LLC in Houston, said investors' fear has shifted from the immediate concerns about tightness in credit and the resulting difficulty in borrowing to the broader economy as companies come out with their quarterly numbers.

"Even if it weren't for the credit crisis we'd probably be looking toward a pretty tough recession anyway," he said. "The third-quarter earnings are kind of uninspiring but third quarter hasn't been the real concern of people. I think the concern is the depth and duration of the downturn and the effect it's going to have on earnings."

The Dow fell 514.45, or 5.69 percent, to 8,519.21, after being down as much as 698 points in the final half hour of trading. Still, the Dow finished above its Oct. 10 closing low of 8,451. The Dow fell 232 points Tuesday after jumping 413 points Monday.

Broader stock indicators also fell Wednesday. The S&P 500 lost 58.27, or 6.10 percent, to 896.78, its lowest close since it finished at 892.01 on April 21, 2003. The decline leaves the index 42.7 percent below its record close of 1,565.15 in October last year.

The technology-heavy Nasdaq composite index fell 80.93, or 4.77 percent, to 1,615.75.

Lighter trading volume and the Dow's snapback — a rebound in the final 20 minutes that left the blue chips 183 points above the session's low — indicated that the trading was more orderly than it had been two weeks ago when waves of selling pounded the major indexes.

"I'm not as concerned about a pullback in the market when you have light volume," said Dave Hinnenkamp, chief executive KDV Wealth Management in Minneapolis.

Meanwhile, credit markets showed improvement after virtually freezing up in the past month. Bank-to-bank lending rates fell sharply from Tuesday to Wednesday, indicating that credit is becoming easier to obtain. The London Interbank Offered Rate, or Libor, on three-month loans in dollars fell to 3.54 percent from 3.83 percent, dropping for an eighth straight day.

Demand for Treasury bills, regarded as the safest assets around, grew slightly compared to the previous day as economic worries led investors to shun risky assets in favor of government bonds.

The three-month Treasury bill yielded 1.01 percent, down from 1.07 percent late Tuesday. The levels are a notable improvement from the 0.20 percent seen last Wednesday, when investors were willing to trade the slimmest of returns for a safe place to keep their money.

The yield on the benchmark 10-year Treasury note, which also moves opposite its price, fell to 3.60 percent from 3.74 percent late Tuesday.

"We're making slow progress and confidence is returning but we're still not there yet," said Christopher Cordaro, chief investment officer at RegentAtlantic Capital LLC in Chatham, N.J.

He said the latest batch of quarterly results, which cover results through Sept. 30, don't reflect the full brunt of the credit freeze-up felt this month and the nervousness among some consumers following the stock market's swoon.

While he expects corporate results will continue to worsen, he also said the markets remain "in panic mode" and investors are perhaps being overly dour in their assessment of how the economy will perform in the next few years.

"When you look at the fundamentals of equities around the world, stocks are selling for very cheap prices," he said. "Behaviorally people project today's current bad news much further out into the future than they should."

Worries about the global economy helped the dollar. The greenback rose against currencies like the British pound and the euro as investors worried about sluggishness in overseas economies. The strong dollar helped drive down the price of oil, as did a government report that U.S. fuel supplies rose last week. Light, sweet crude fell $5.43 to $66.75 a barrel on the New York Mercantile Exchange, after falling as low as $66.20.

Gold fell sharply as the dollar rose. Gold for December delivery fell $32.80 to settle at $735.20 an ounce on the Nymex, after dipping to a 13-month low of $735.20 during the session. Silver and copper also fell.

While the drop in oil and other commodities can be a welcome sign for consumers and many businesses it can also indicate that investors think economic activity is poised to shrink.

Still, Hinnenkamp said the extra money in drivers' wallets compared with when oil was at its high of $147.27 on July 11 could help prop up the economy. Consumer spending accounts for more than two-thirds of U.S. economic activity.

But materials companies fell as commodity prices tumbled. Aluminum producer Alcoa Inc. fell $1.63, or 13.4 percent, to $10.52, making it the steepest decliner among the 30 stocks that make up the Dow industrials. Miner Freeport-McMoRan Copper & Gold Inc. fell $5.82, or 17.8 percent, to $26.92.

Energy issues fell as oil slid to its lowest level in 16 months. Exxon Mobil Corp. fell $6.93, or 9.7 percent, to $64.57, while Chevron Corp. fell $5.06, or 7.6 percent, to $61.74.

The decline in oil helped airlines. JetBlue Airways Corp. rose 2 cents, or 0.40 percent, to $5.01, and United Airlines parent UAL Corp. rose 85 cents, or 6.2 percent, to $14.65.

In corporate news, AT&T Inc. said its third-quarter earnings rose 5.5 percent but missed analyst expectations in part because of strong sales of Apple's iPhone, which the carrier subsidizes. The stock fell $1.95, or 7.6 percent, to $23.78.

Wachovia fell 38 cents, or 6.2 percent, to $5.71 after reporting its results. Merck slid $1.96, or 6.5 percent, to $28.01.

Some tech names advanced. Apple rose after the company reported a 26 percent increase in its fiscal fourth-quarter earnings. The stock rose $5.38, or 5.9 percent, to $98.87. Yahoo reported a 64 percent drop in third-quarter profits but said it would cut at least 1,500 jobs, cost-cutting that appeared to please investors. The shares rose 32 cents, or 2.7 percent, to $12.39.

Thornton said the latest corporate forecasts are difficult to rely on because companies are grappling with many of the same unknowns that investors are struggling with, primarily the extent of weakness in the economy.

"These markets are making it difficult to gauge how much to read into management comments because clearly they're dealing with unprecedented change in fundamentals. It's hard to take their word on their outlook," he said.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to 6.06 billion shares compared with 5.09 billion traded Tuesday. The levels are lower than earlier in the month when volatility swept volume above the 10 billion mark.

The Russell 2000 index of smaller companies fell 28.68, or 5.40 percent, to 501.97.

Markets overseas fell sharply. Japan's Nikkei stock average fell 6.79 percent. Britain's FTSE 100 fell 4.46 percent, Germany's DAX index fell 4.46 percent, and France's CAC-40 lost 5.10 percent. source

Reality TV News Online - Part 3

At present, certain reality news TV online does not just strive to be the most comprehensive but to become the most newsworthy provider of news to the online public. These types of sites are the ones frequently updated with the most intriguing news reports of any reality TV show from all around the world.

To best suit to the news consumer's demands for quality news, they even hire a huge team of editors to sort out and guide the direction of effective and responsible news writing online. There are many original reports on various trends, gossips and creative analyzes of everyday reality news that are posted regularly. Thus, all people will know who got in and who was eliminated from certain reality TV shows, in as much as knowing what is hot and what is not.

Like these types of reality TV news online, they thrust completeness in reality news and not necessarily covering all the news. Having a complete content with the news on hand is a lot better than getting the most number of news. They only cover the news that is interesting to the news readers. Useless and insignificant news are out of the discussion boards. As an avenue for responsible journalism, they even allow the readers to make comments or corrections to the news they are posting especially when it involves non-factual and highly opinionated content. Their primary concern is to target the reality shows that meet the standard for quality wherein the best shows can even have a separate archive for arranging news specific to it.

Oil rises to $73 on expectation of OPEC cut

SINGAPORE - Oil prices rose to $73 a barrel in Asia on Monday on expectations that OPEC will cut production quotas at an extraordinary meeting later this week.

Light, sweet crude for November delivery rose $1.16 to $73.01 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract Friday gained $1.53 to settle at $71.38.

Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said Sunday that members plan to announce a "substantial" cut at a meeting that begins Oct. 24 in Vienna.

Khelil, who is also Algeria's energy minister, said OPEC may cut output again at a meeting in December, and that the group considers the oil market oversupplied by about 2 million barrels a day, Khelil said.

Venezuelan President Hugo Chavez said Sunday he would like prices between $80 and $90 a barrel.

"The market is factoring in a big cut. It will likely be as much as 2 million barrels," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "I think they will go pretty large just to change the sentiment."

Investors largely ignored an OPEC output reduction of about 520,000 barrels a day last month, focusing instead on weakening demand.

Fears that turmoil in global financial markets will spark an economic slowdown in developed countries has helped push prices down from a record $147.27 in July.

Last week, news of rising US oil inventories, falling retail sales and slowing housing starts fueled concerns that the world's largest economy may face a major recession that will undermine demand for crude.

"Oil demand in the US will be a bellwether," Pervan said. "If the US, Europe and Japan go into a major recession, there's no reason we can't see $35, $40 a barrel."

In other Nymex trading, heating oil futures rose 1.65 cents to $2.15 a gallon, while gasoline prices gained 2.44 cents to US$1.69 a gallon. Natural gas for November delivery jumped 14 cents to US$6.93 per 1,000 cubic feet.

In London, November Brent crude was up 95 cents to US$70.55 a barrel on the ICE Futures exchange.

British princes begin motorbike rally for charity

PORT EDWARD, South Africa – British princes William and Harry set off Saturday on a grueling 1,000-mile motorcycle rally in South Africa to raise money for charity.

The pair joked that they had a wager on which royal tumbles from their bike the most during the eight-day off-road adventure.

"It's going to be very challenging and we're expecting to fall off many a time," said Harry, 24, before more than 80 riders set off from the holiday resort of Port Edward on South Africa's southeast coast.

A crowd cheered the riders as they hit the winding dust road bound for the southern coastal city of Port Elizabeth.

William, 26, who next year will begin training to be an RAF search and rescue helicopter pilot, said he and his brother had decided to take part in the rally "because it's a mixture of adventure and charity."

Funds raised through the princes' participation in the Enduro Africa 08 event will be divided among UNICEF, the Nelson Mandela Children's Fund and Sentebale, a charity established by Prince Harry to help disadvantaged children in Lesotho.

Harry, an officer in the Household Cavalry regiment, said he was looking forward to spending some rare time together with his brother.

Both brothers ride high performance motorbikes when in the UK, but William said they had not trained for the event.

"We both ride bikes at the moment but on-road biking is completely different. All the off-road stuff is up hills, down slopes, across rivers and is all rocky and hilly," William said.

Questioned about which royal was the better rider, William said, diplomatically, that "we're both quite good actually," while his brother quipped: "We'll have to wait and see in a couple of days time."

Oil tumbles below $70 on big jumps in US crude supplies

NEW YORK - Oil prices have tumbled below $70 a barrel after the government reported bigger-than-expected jumps in US crude and gasoline inventories. Investors took the news as more evidence that an economic slowdown is curbing demand for energy.

In its weekly report, the Energy Information Administration says crude stocks rose by 5.6 million barrels last week, well above the 3.1 million barrel increase expected by analysts surveyed by energy research firm Platts.

The EIA also says gasoline stock rose by 7 million barrels last week, more than double the build analysts had expected.

Light, sweet crude for November delivery was down $4.61 to $69.93 a barrel on the New York Mercantile Exchange, crude's lowest trading level in nearly 14 months.

Oil prices have now dropped by more than 50 percent since peaking at $147.27 on July 11. - source

Stocks shoot higher as volatility continues

NEW YORK - Wall Street turned in another stunning finish Thursday and extended its unprecedented streak of volatility — this time, to the upside — as investors spent a fractious session again struggling with fears about a recession but giving in to a last-hour wave of buying. The Dow Jones industrials ended up 400 points, after falling 380 early in the session.
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It is clear that investors are reacting in the extreme to any negative economic news, including disappointing numbers Thursday on industrial production that sent stocks skidding. But traders are also responding to the market's own dynamics, and when there was no late-session plunge, as there was on Wednesday, buyers piled in before the close.

Analysts expect this extraordinary volatility to continue, and warned that just as Monday's huge 936-point surge in the Dow was overdone, there was little reason to trust that Thursday's gains would hold.

A rise in shares of Yahoo Inc. over renewed speculation it could cement a deal with one-time suitor Microsoft Corp. helped push the technology-laden Nasdaq composite index up more than 5 percent. Meanwhile, another sharp drop in oil prices helped make consumer discretionary stocks more attractive.

Stocks spent much of the session seeking a direction after Wednesday's steep dive, which took the Dow down 733 points in response to a stream of bad economic news that underscored the likelihood that the country is either in a recession or will be in one — and that the downturn could be severe. There was little news Thursday to counter those fears, but there were plenty of gyrations in stock prices and the major indexes.

"We're going to continue to see volatility. You're not going to see 50-point ranges, you're going to see two-three-four hundred point ranges," said Woody Dorsey, president of Market Semiotics, a financial forecasting firm in Castleton, Vt.

Indeed, the Dow changed directions 75 times in Thursday's session.

Investors initially appeared cheered by a better-than-expected reading from the Labor Department on consumer prices. The flat reading on September's Consumer Price Index compares with August's 0.1 percent decline, which was the first in nearly two years. The core index, which eliminates food and energy prices, rose 0.1 percent. Economists had been expecting CPI would rise to 0.1 percent and that core CPI would increase 0.2 percent.

Meanwhile, a weekly snapshot of the job market showed that first-time claims for unemployment benefits declined last week. The Labor Department said new claims fell 16,000 last week to a seasonally adjusted level of 461,000 — below the 475,000 that had been anticipated. Still, total unemployment remains above the level that economists often associate with recession.

And the Philadelphia Federal Reserve said regional manufacturing conditions weakened in October. The bank's regional index came in at a negative 37.5 compared with a positive 3.8 for September. That news followed word from the Federal Reserve that production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August. While the Fed estimated that disruptions related to hurricanes accounted for about 2.25 percentage points of the drop in industrial production, the news was still discouraging for market that is hypersensitive to anything negative about the economy.

Subodh Kumar, global investment strategist at Toronto-based Subodh Kumar & Associates, said markets are jittery because many investors' expectations about the economy were too rosy heading into the summer and the monthlong freeze in the credit markets has dealt the economy another blow, making it harder and more expensive for many businesses and consumers to get loans.

He said the volatility buffeting the markets reflects investors tinkering with their portfolios to match their more sober take on the health of the economy and some investors simply cashing out. That means some vehicles like mutual funds and hedge funds are entering a market already short on buyers and being forced to sell.

Because of investors' great anxiety about the economy, Wall Street is expected to remain extremely volatile, as it has been since last month when the credit markets tightened and stocks plunged. The gyrations this week have been particularly intense, with the Dow industrials soaring 936 points Monday and falling 733 Wednesday following a weak report on retail sales and a disheartening assessment of the economy from the Federal Reserve.

The Dow rose 401.35, or 4.68 percent, to 8,979.26, showing an 816-point swing from its low to its high of the session. The Dow remains up 528 points, or 6.3 percent, for the week.

Broader stock indicators also jumped. The Standard & Poor's 500 index rose 38.59, or 4.25 percent, to 946.43, and the Nasdaq composite index rose 89.38, or 5.49 percent, to 1,717.71.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 2 billion shares. The end-of-the week expiration of certain options contracts for October also likely added to volatility during the session.

While the credit markets are performing better than they were last week given several unprecedented actions by governments around the world — including the decision to buy stakes in private banks — they are hardly operating normally.

Treasury bills, considered the safest assets around, remained in demand. The three-month Treasury bill on Thursday was yielding 0.47 percent, higher than 0.20 percent on Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.97 percent from 3.98 percent late Wednesday.

Tom Higgins, chief economist at Payden & Rygel Investment Management in Los Angeles, said some professional investors are being forced to turn to the stock market because other markets remain largely paralyzed.

"The reason we're seeing volatility in the stock market is because it's the one market that's trading right now. If you have to liquefy your assets and you need access to cash immediately then the market you're going to do it in is the equity market and that's what I think is pushing around the indexes at this point."

Jim Ferrare, senior portfolio manager at Pinnacle Associates in Red Bank, N.J., said the changes that will result from government actions around the world to revive the credit markets will take some time to emerge, letting uncertainty linger on Wall Street.

"Volatility is here for a while but also more importantly the change is not an overnight change," he said, referring to the government's steps to restore normal levels of lending.

The Wall Street's fear gauge rose to a record level Thursday. The Chicago Board Options Exchange Volatility Index, known as the VIX, rose to an all-time intraday high of 81.17, its first-ever move over 80. The VIX, which usually trades below 50, tracks options activity for the companies that make up the S&P 500.

Gains by Yahoo helped push the technology sector and the Nasdaq higher. The stock rose after Microsoft Chief Executive Steve Ballmer raised the possibility of renewing his attempt to buy the Internet search company.

In a presentation made at a Florida technology conference, Ballmer said a deal between Microsoft and Yahoo could "still make sense economically."

Microsoft issued a statement saying it has no interest in acquiring Yahoo and that the two companies aren't in talks. Earlier attempts to acquire Yahoo fell through.

But it was enough to help Yahoo shares, which early in the session fell to $11.37, their lowest level in five years. The stock rose $1.24, or 10.6 percent, to $12.99, while Microsoft rose $1.53, or 6.8 percent, to $24.19.

Consumer products companies also rose as light, sweet crude fell $4.69 to settle at $69.85 a barrel on the New York Mercantile Exchange, the lowest settlement price since Aug. 23, 2007. Investors are hoping lower energy prices will leave more money in consumers' wallets.

Nike Inc. rose $5.61, or 11.1 percent, to $55.97, while Macy's Inc. rose $1.39, or 16 percent, to $10.05.

The dollar rose against other major currencies.

The Russell 2000 index of smaller companies rose 34.46, or 6.86 percent, to 536.57.

In Asian trading, Hong Kong's Hang Seng Index lost 4.8 percent, and Japan's Nikkei index dropped 11.41 percent, following Wednesday's drop in the U.S. In Europe, Britain's FTSE 100 fell 5.65 percent, Germany's DAX index fell 4.91 percent, and France's CAC-40 fell 5.92 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

other links

Former Fed chief says U.S. now in recession

SINGAPORE (Reuters) - Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing sector faced more losses and the economy was in recession even as authorities moved to stabilize the financial system.
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Volcker said the priority for U.S. authorities in the credit crisis was to stabilize the financial system even though that meant heavy government intrusion.

"The first priority is to stabilize the financial system. It is necessary even though the cost involved is heavy government intrusion in markets that should be private," he said in a speech at a seminar in Singapore.

"House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession."

Volcker is chairman of the board of trustees of the Group of 30, an international body composed of central bank governors, leading economists and private financial sector experts.

He is credited for battling double-digit inflation that flared in the 1970s.

He was chairman of the U.S. central bank between 1979 and 1987, before handing the reins over to Alan Greenspan, and oversaw a sharp increase in interest rates to quell the price pressures.

Volcker was asked by a member of the audience if the massive infusion of liquidity by the Federal Reserve could lead to inflation or stagflation.

"It's not going to be a problem in the short run. Inflation doesn't flourish in the face of recession," he said.

"It's something we have to worry about when we get out of this recession."

The United States has announced various measures to combat a credit crisis that emanated from the U.S. housing market and which has spread globally.

U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.

"I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one," Volcker said.

"This crisis is an exception. I don't think we can escape damage to the real economy."source

Dow jumps almost 600 as US pledges bank aid

NEW YORK - The Dow Jones industrial average rebounded almost 600 points today as Wall Street snapped back from last week's devastating losses after major governments announced further steps to support the global banking system, including plans by the U.S. Treasury to buy stocks of some banks. All the major indexes rose well over 7 percent.
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The hope on the Street was that the market was finding a bottom after eight sessions of devastating losses that sent the Dow down nearly 2,400 points. But while a rebound had been expected at some point, Wall Street can expect to see volatile, back-and-forth trading in the coming days and weeks as investors work through their concerns about the banking sector, the stagnant credit markets and the overall economy.

But the market did appear to take heart when the Bush administration said it is moving quickly to implement its $700 billion rescue program, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help revive the stagnant credit markets and in turn get the economy moving again.

Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said in a speech Monday officials were also developing guidelines to govern the purchase of soured mortgage-related assets. However, he gave few details about how the program will actually buy bad assets and bank stock.

Jim King, chief investment officer at National Penn Investors Trust Co., said the fear that took hold of the markets was overwrought.

"Our position is that the fundamental values never went away in the first place and that we have exceptional companies at fire sale prices," he said.

Still, King cautioned that any market rebound likely will be choppy.

"Even if this is the beginning of a recovery we're not just going to have up markets from here on in," he said. "We're not through the woods. We think there is collateral damage from this debacle." King pointed to an increase in unemployment and nervousness among consumers that could, for example, hurt retailers and in turn, take stocks lower.

In late morning trading, the Dow Jones industrial average rose 525.68, or 6.22 percent, to 8,976.87.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 55.89, or 6.22 percent, to 955.11, and the Nasdaq composite index rose 104.57, or 6.34 percent, to 1,754.08.

Investors also reacted to word from the Bank of England that it would use up to $63 billion to help the three largest British banks strengthen their balance sheets.

The Bank of England, the European Central Bank and the Swiss National Bank also jointly announced plans to work together to provide as much short-term funding as necessary to help revive lending.

After a series of weekend meetings in Washington of heads of the Group of Seven nations, the gains in global markets signaled that investors found comfort from the actions and pledges coming from government officials.

The surge in stocks comes after a dismal week on Wall Street that erased an estimated $2.4 trillion in shareholder wealth. The Dow, after eight consecutive daily losses that totaled just under 2,400, or 22.1 percent, finished at its lowest level since April 2003, and also suffered its worst weekly percentage loss ever, a fall of 18.2 percent.

Meanwhile, the S&P 500 and the Nasdaq each lost 15.3 percent last week.

Investors have worried that banks' reluctance to lend to one another would imperil economic activity by making it harder and more expensive for businesses and consumers to get a loan.

"Everybody is basically waiting on the decision on where they're going to inject cash," Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York. He said with the bond markets closed for the Columbus Day holiday, U.S. government officials are likely holding off on announcement of details about where it might invest money until all major global markets are open.

Rovelli said that a sustainable advance on Wall Street could prove elusive.

"Everybody knew that we were going to have an up day eventually," he said, warning that the rally doesn't necessarily signal an end of the market's troubles.

Early Monday, Wall Street found some relief from Mitsubishi UFJ Financial Group's announcement that it closed on its $9 billion investment in Morgan Stanley a day earlier than expected. Morgan Stanley lost nearly 60 percent of its value last week as investors worried that the deal would fall apart. The agreement gives Morgan a much-needed injection of cash.

Morgan Stanley rose $5.44, or 56 percent, to $15.12.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose $3.06 to $80.76 on the New York Mercantile Exchange after oil fell to its lowest level in 13 months last week.

Advancing issues outnumbered decliners by about 10 to 1 on the New York Stock Exchange, where volume came to 624.4 million shares.

The Russell 2000 index of smaller companies rose 25.78, or 4.94 percent, to 548.30.

Investors in Asia and Europe also grabbed stocks after last week's rout and the weekend moves by governments to bolster investor confidence.

In Asia, Hong Kong's Hang Seng index surged 10.2 percent. Markets in Japan were closed for a holiday. In Europe, Britain's FTSE 100 jumped 5.41 percent, Germany's DAX index rose 9.93 percent, and France's CAC-40 jumped 8.54 percent. source

Dow jumps almost 600 as US pledges bank aid

NEW YORK - The Dow Jones industrial average rebounded almost 600 points today as Wall Street snapped back from last week's devastating losses after major governments announced further steps to support the global banking system, including plans by the U.S. Treasury to buy stocks of some banks. All the major indexes rose well over 7 percent.
ADVERTISEMENT

The hope on the Street was that the market was finding a bottom after eight sessions of devastating losses that sent the Dow down nearly 2,400 points. But while a rebound had been expected at some point, Wall Street can expect to see volatile, back-and-forth trading in the coming days and weeks as investors work through their concerns about the banking sector, the stagnant credit markets and the overall economy.

But the market did appear to take heart when the Bush administration said it is moving quickly to implement its $700 billion rescue program, including consulting with law firms about the mechanics of buying ownership shares in a broad number of banks to help revive the stagnant credit markets and in turn get the economy moving again.

Neel Kashkari, the assistant Treasury secretary who is interim head of the program, said in a speech Monday officials were also developing guidelines to govern the purchase of soured mortgage-related assets. However, he gave few details about how the program will actually buy bad assets and bank stock.

Jim King, chief investment officer at National Penn Investors Trust Co., said the fear that took hold of the markets was overwrought.

"Our position is that the fundamental values never went away in the first place and that we have exceptional companies at fire sale prices," he said.

Still, King cautioned that any market rebound likely will be choppy.

"Even if this is the beginning of a recovery we're not just going to have up markets from here on in," he said. "We're not through the woods. We think there is collateral damage from this debacle." King pointed to an increase in unemployment and nervousness among consumers that could, for example, hurt retailers and in turn, take stocks lower.

In late morning trading, the Dow Jones industrial average rose 525.68, or 6.22 percent, to 8,976.87.

Broader stock indicators also jumped. The Standard & Poor's 500 index advanced 55.89, or 6.22 percent, to 955.11, and the Nasdaq composite index rose 104.57, or 6.34 percent, to 1,754.08.

Investors also reacted to word from the Bank of England that it would use up to $63 billion to help the three largest British banks strengthen their balance sheets.

The Bank of England, the European Central Bank and the Swiss National Bank also jointly announced plans to work together to provide as much short-term funding as necessary to help revive lending.

After a series of weekend meetings in Washington of heads of the Group of Seven nations, the gains in global markets signaled that investors found comfort from the actions and pledges coming from government officials.

The surge in stocks comes after a dismal week on Wall Street that erased an estimated $2.4 trillion in shareholder wealth. The Dow, after eight consecutive daily losses that totaled just under 2,400, or 22.1 percent, finished at its lowest level since April 2003, and also suffered its worst weekly percentage loss ever, a fall of 18.2 percent.

Meanwhile, the S&P 500 and the Nasdaq each lost 15.3 percent last week.

Investors have worried that banks' reluctance to lend to one another would imperil economic activity by making it harder and more expensive for businesses and consumers to get a loan.

"Everybody is basically waiting on the decision on where they're going to inject cash," Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York. He said with the bond markets closed for the Columbus Day holiday, U.S. government officials are likely holding off on announcement of details about where it might invest money until all major global markets are open.

Rovelli said that a sustainable advance on Wall Street could prove elusive.

"Everybody knew that we were going to have an up day eventually," he said, warning that the rally doesn't necessarily signal an end of the market's troubles.

Early Monday, Wall Street found some relief from Mitsubishi UFJ Financial Group's announcement that it closed on its $9 billion investment in Morgan Stanley a day earlier than expected. Morgan Stanley lost nearly 60 percent of its value last week as investors worried that the deal would fall apart. The agreement gives Morgan a much-needed injection of cash.

Morgan Stanley rose $5.44, or 56 percent, to $15.12.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude rose $3.06 to $80.76 on the New York Mercantile Exchange after oil fell to its lowest level in 13 months last week.

Advancing issues outnumbered decliners by about 10 to 1 on the New York Stock Exchange, where volume came to 624.4 million shares.

The Russell 2000 index of smaller companies rose 25.78, or 4.94 percent, to 548.30.

Investors in Asia and Europe also grabbed stocks after last week's rout and the weekend moves by governments to bolster investor confidence.

In Asia, Hong Kong's Hang Seng index surged 10.2 percent. Markets in Japan were closed for a holiday. In Europe, Britain's FTSE 100 jumped 5.41 percent, Germany's DAX index rose 9.93 percent, and France's CAC-40 jumped 8.54 percent. source