INTERNATIONAL MARKET NEWS

S&P 500 hits 5-1/2-year high

S&P 500(Standard and Poor) closed at a five-and-a-half-year high, as investors hoped that the slowdown in the economy and pullback in energy prices would ensure that the Federal Reserve would not lift interest rates again any time soon.

The S&P 500 (up 11.59 to 1,326.37) index added 0.9 percent and knocked out its 2006 high from May, closing at its best point since Feb. 2001.

Ref: www.cnnmoney.com/25.Sep

More tough sledding ahead

A surprisingly strong end-of-summer rally set the Dow industrials within 110 points of an all-time high and investors were feeling good. The rally was nurtured by falling oil prices, bets that the Federal Reserve Board won’t lift interest rates again anytime soon and a sense that growth is neither too hot, nor too cold, but just right.
The Philadelphia Federal Reserve Bank’s survey on Sep.21 has forecasted that the economy economy is cooling off and hence the economy is still at risk of heading into a recession, rather than just a slowdown. It also reminded investors that the economy’s problems are not just focused around the much-discussed cooling in the housing market.
Ref: www.cnnmoney.com/24.Sep
Budget carrier expands at airport
Low-fare airline bmibaby is to increase the capacity of its operations at Birmingham International Airport by 60% next year. It will add three more aircraft to the current five and create at least five new destinations from the city on top of the existing network of 13 routes. The firm expects to become the largest carrier at the airport next year. But it is closing its base at Durham Tees Valley airport, redeploying two aircraft to four other UK bases. The company, which opened its Birmingham operation in January 2005, will add one aircraft there in January and two at the end of March.
Ref: www.bbc.com/24.Sep
Biofuels ‘answer’ to trade talks
US tycoon Ted Turner has said a focus on biofuels could break the current deadlock stalling world trade talks.
Speaking at a World Trade Organization forum, Mr. Turner said huge demand for plant-based fuels could help farmers and reduce their need for state aid.
He said subsidies and tariffs should be replaced by support for biofuels.
The current five-year long Doha round of trade talks is suspended because of a failure to reach an agreement over agricultural subsidies and tariffs.
Ref: www.bbc.com/25.Sep

INTERNATIONAL MARKET NEWS

S&P 500 hits 5-1/2-year high

S&P 500(Standard and Poor) closed at a five-and-a-half-year high, as investors hoped that the slowdown in the economy and pullback in energy prices would ensure that the Federal Reserve would not lift interest rates again any time soon.

The S&P 500 (up 11.59 to 1,326.37) index added 0.9 percent and knocked out its 2006 high from May, closing at its best point since Feb. 2001.

Ref: www.cnnmoney.com/25.Sep

More tough sledding ahead

A surprisingly strong end-of-summer rally set the Dow industrials within 110 points of an all-time high and investors were feeling good. The rally was nurtured by falling oil prices, bets that the Federal Reserve Board won’t lift interest rates again anytime soon and a sense that growth is neither too hot, nor too cold, but just right.
The Philadelphia Federal Reserve Bank’s survey on Sep.21 has forecasted that the economy economy is cooling off and hence the economy is still at risk of heading into a recession, rather than just a slowdown. It also reminded investors that the economy’s problems are not just focused around the much-discussed cooling in the housing market.
Ref: www.cnnmoney.com/24.Sep
Budget carrier expands at airport
Low-fare airline bmibaby is to increase the capacity of its operations at Birmingham International Airport by 60% next year. It will add three more aircraft to the current five and create at least five new destinations from the city on top of the existing network of 13 routes. The firm expects to become the largest carrier at the airport next year. But it is closing its base at Durham Tees Valley airport, redeploying two aircraft to four other UK bases. The company, which opened its Birmingham operation in January 2005, will add one aircraft there in January and two at the end of March.
Ref: www.bbc.com/24.Sep
Biofuels ‘answer’ to trade talks
US tycoon Ted Turner has said a focus on biofuels could break the current deadlock stalling world trade talks.
Speaking at a World Trade Organization forum, Mr. Turner said huge demand for plant-based fuels could help farmers and reduce their need for state aid.
He said subsidies and tariffs should be replaced by support for biofuels.
The current five-year long Doha round of trade talks is suspended because of a failure to reach an agreement over agricultural subsidies and tariffs.
Ref: www.bbc.com/25.Sep

International market

Base Metal, Gold tank on growth fears
Business Standard, 13th September

Nervous investors are retreating from the market because of a fall in commodity price in oil, copper and gold. They expect a further fall in price. Crude oil prices plunged to less than $64 a barrel to the lowest level since early April. London copper prices to three week lows below 7,400$ a tonne, and the same time gold hit an 11- week low well below the key $600 an ounce level.
If the trend continues to the end of this week some hedge funds using black-box trading strategies are expected to start selling more commodities. Those who trade using economic analysis are already short selling base metals because they believe prices are not supported by demand and supply.

Ford, Chrysler add to US auto woes
Business Standard, 16/17 September

The crisis in the US automotive industry were put sharply to focus on Friday as Ford announced plans to cut a third of its North American Workforce and Daimler Chrysler predicted a worse-than-expected third quarter operating loss at Chrysler, its US arm.
Ford will cut about s third of its North American salaried staff – the equivalent of 14,000 jobs. That figure includes the 4,000 positions eliminated in the first quarter of 2006. The job reductions would contribute significantly to reducing annual operating costs, the company said.
Separately, Daimler Chrysler lowered its operating profit forecast for the year 2006 to Euro 5 Billion. The problems faced by the Chrysler group are excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles.

Motorola to buy Symbol Technologies
Reuters, September 19, 2006

Motorola signed an agreement to buy Symbol Technologies, a maker of barcode and inventory scanning technology, for $ 3.9 million. This is in order to expand its opportunities with corporate customers.

Germany eyes free-trade zone to rival China
Business Standard, September 18

Due to the economic challenges posed by China, Germany is thinking hard over a plan for a free trade zone between Europe and US. Such a zone is intended to become a tool to exchange the global free trade, which will add to the future prosperity of Germany.
There has been complaints from U.S and Europe about the tariffs which are imposed by China. China is criticized by Germany for their poor Human Rights record and recent restriction on forgien news agencies.