Beijing raises prices for gasoline by as much as 18% in bid to cool demand.
BEIJING (AP) -- China raised prices for fuel by as much as 18% on Friday in a move that could cool the nation's surging energy consumption.
International oil prices dropped sharply Thursday after China said it will raise fuel prices, with U.S. crude for July delivery falling $4.75 to settle at $131.93 a barrel on the New York Mercantile Exchange. In Asian trading, oil was up slightly at $132.01 a barrel.
Growing Chinese demand for oil has underpinned the multiyear rally in oil prices, but higher prices could help crimp that demand. Concerns about spiking Chinese demand for diesel due to cleanup operations in the aftermath of last month's earthquake contributed to oil's recent run-up.
Lower demand in China "would be a major factor in driving prices down," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
The China Daily newspaper reported Friday that the increase was "because of the soaring price of crude in the international market." It said areas in Sichuan province, hit by a massive earthquake last month, were exempt from the increase.
The price increase was announced issued late Thursday after China's financial markets were disclosed by the National Development and Reform Commission, the government's main economic planning agency announced.
Prices of gasoline and diesel rose by $145 per ton to $1,015 and $949, respectively.
Aviation kerosene rose by $218 per ton to $1,084, the commission said on its Web site.
Electricity prices will also rise for most businesses by 36 cents per kilowatt, although residential housing and the farming and fertilizer industries would be exempt, the planning agency said.
Natural gas and liquefied petroleum gas prices will remain unchanged, it said.
The government last hiked fuel prices by about 11% in November but had kept them frozen since, seeking to avoid fanning inflation, which has touched 12-year highs since the beginning of the year.
That policy, however, has led to shortages at the pump as refiners find themselves squeezed by rising world oil and gas prices.
To help counter such shortages, China's largest city, Shanghai, on Monday announced an increase in prices for liquefied petroleum gas used by scooters.
Earlier this week, the economic planning agency said it would look for an opportunity to adjust oil product prices, prompting a rally in shares of major refiners that have been swallowing huge losses due to soaring crude oil prices.
In an explanatory note accompanying its announcement, the commission said high world oil prices had created "contradictions in the purchasing price of oil being higher than the selling price of refined products that were becoming more glaring by the day."
That had led some refiners to halt or suspend production, creating supply interruptions and long lines at some filling stations, it said.
Coal prices that have risen $12 in the past two years have created massive losses for four of the country's five major power producers, it said.
Along with the electricity price rise, the government will also continue to provide subsidies to the industry to guarantee supplies, the commission said. To top of page
Saudi summit aims at oil prices
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Friday, June 20, 2008
Technical analysis for crude oil
After crude markets were getting support from China's growing demand, yesterday an increase in Chinese fuel prices is expected to cripple oil demand as prices fell massively yesterday. Prices of gasoline and diesel in China will jump by 18% starting from today. Despite the fact that their oil consumption that was reported in June 10 is projected to increase by 440,000 barrels to an average of 8.02 million barrels a day this year, still there are worries that demand would still dampen due to price increase. The contract shed $4.57 as it closed at $132.60 while recording a high of $138.36 per barrel and a low of $132.09 per barrel.
As China is known to be the world's second biggest energy consumer after the U.S while the hike in prices since 8 months is still in affect today. Prices remain steady above the $132 per barrel as fears still overcome the market of lower demand from china. Today the markets opened at $132.41 while recording a high of $132.94 per barrel and a low of $131.75 per barrel.
Looking back at Wednesday when the EIA report was released showing that the U.S. commercial crude oil inventories decreased by 1.2 million barrels from the previous week. At 301.0 million barrels, U.S. crude oil inventories are at the lower boundary of the average range for this time of year. Total motor gasoline inventories decreased by 1.2 million barrels last week, and are in the lower half of the average range. Finished gasoline inventories increased last week while gasoline blending components inventories decreased during this same time. Distillate fuel inventories increased by 2.6 million barrels, and are in the lower half of the average range for this time of year.
With Saudi Arabia scheduled to meet Sunday in order to discuss its current output in order to increase production so prices can ease prices further have every investor's attention currently. This decision of either increasing output or if they feel there is no need for more pumping of crude in the ma
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As China is known to be the world's second biggest energy consumer after the U.S while the hike in prices since 8 months is still in affect today. Prices remain steady above the $132 per barrel as fears still overcome the market of lower demand from china. Today the markets opened at $132.41 while recording a high of $132.94 per barrel and a low of $131.75 per barrel.
Looking back at Wednesday when the EIA report was released showing that the U.S. commercial crude oil inventories decreased by 1.2 million barrels from the previous week. At 301.0 million barrels, U.S. crude oil inventories are at the lower boundary of the average range for this time of year. Total motor gasoline inventories decreased by 1.2 million barrels last week, and are in the lower half of the average range. Finished gasoline inventories increased last week while gasoline blending components inventories decreased during this same time. Distillate fuel inventories increased by 2.6 million barrels, and are in the lower half of the average range for this time of year.
With Saudi Arabia scheduled to meet Sunday in order to discuss its current output in order to increase production so prices can ease prices further have every investor's attention currently. This decision of either increasing output or if they feel there is no need for more pumping of crude in the ma
For more forex information, go to www.crownforex.com
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Fundamental analysis for precious metals silver
Target met at 17.70 for silver; despite it started to retrieve from there, the bullish scenario is still on and the risk limit now is at 17.16, which if breached will bring the metal back in a neutral territory till 16.35 again, but right now we are initiating a new target at 18.20 with a stop below 17.20.
The trading range is among the key support level at 16.70 and the key resistance level at 18.20
The general trend is to the upside as far as 13.20 remains intact, with targets at 22.00 and 25.00.
Support 17.35 17.20 17.11 16.98 16.92
Resistance 17.45 17.62 17.70 17.89 18.01
Recommendation
Buy Silver above 17.25 with a target at 18.00 and a stop loss below 17.15
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The trading range is among the key support level at 16.70 and the key resistance level at 18.20
The general trend is to the upside as far as 13.20 remains intact, with targets at 22.00 and 25.00.
Support 17.35 17.20 17.11 16.98 16.92
Resistance 17.45 17.62 17.70 17.89 18.01
Recommendation
Buy Silver above 17.25 with a target at 18.00 and a stop loss below 17.15
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Fundamental analysis for precious metals gold
The shiny metal reached yesterday to its first target at 908 and despite it bounced back form there it remains above the 887.50 level, which still give more push to the upside rather than the downside, technical indicators are showing more weakness today in the movement and a tendency to the downside but as far as 887.50 remains intact we are still bullish on gold.
The trading range is among the key support level at 887 and the key resistance level at 925.00.
The general trend is to the upside as far as 810.00 remains intact; targets are set at 1080.00 and 1170.00.
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The trading range is among the key support level at 887 and the key resistance level at 925.00.
The general trend is to the upside as far as 810.00 remains intact; targets are set at 1080.00 and 1170.00.
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Non-OPEC Oil Output Not Expected to Grow in 2008
By Reuters | 19 Jun 2008 | 10:18 AM ET
Oil supply from countries outside OPEC, source of three in every five barrels, is stalling this year and may even decline, keeping the heat under record-high oil prices.
The International Energy Agency and the U.S. government have cut forecasts for supply growth in 2008, in part due to delays at new fields and declining output at existing ones.
"There is a risk of zero non-OPEC growth," said Mike Wittner, oil analyst at Societe Generale, who forecasts non-OPEC supply will expand by 400,000 barrels per day (bpd) this year. "As far as our forecast is concerned, there is definitely downside to our numbers."
Struggling supply outside OPEC has helped fuel the surge in oil prices to a record near $140 a barrel, adding a strain to the world economy. It also increases reliance on OPEC oil exporters to meet rising demand.
Signs that oil supply is faltering in parts of the world are leading to growing interest in peak oil, the view that production is nearing a high point and will then fall.
Influential forecasters such as the IEA, adviser to 27 industrialised countries, have been lowering forecasts for supply from non-OPEC countries, but still predict an expansion.
Output from non-OPEC will grow by 460,000 bpd in 2008 from 2007, the IEA said in a monthly report on June 10, down from growth of 680,000 bpd previously forecast.
Others say even that may prove optimistic.
Analysts at investment bank Barclays Capital expect non-OPEC supply to decline by 40,000 bpd this year, while Credit Suisse sees non-OPEC supply as flat or negative through 2012 or longer.
Another bank, Citigroup, said on June 9 that non-OPEC supply was at risk of posting no growth this year.
Delays, Decline
There are several reasons why supply from non-OPEC has fallen short of forecasts in recent years.
Delays at new fields, faster-than-expected declines at existing ones and unforeseen events such as hurricanes in the U.S. Gulf of Mexico have meant production came in lower than first thought.
Oilfields in places such as the North Sea and Mexico are seeing declines while output in Russia, the world's second-largest exporter and the engine of growth outside OPEC in recent years, has faltered.
Russian oil supply in May averaged 9.95 million bpd, the fifth straight month of decline from a year ago, according to the IEA. It expects Russian supply to be largely flat in 2008 at 10.1 million bpd.
Barclays questions if the IEA's prediction of a surge in non-OPEC supply in the last few months of 2008 will materialise, saying that the IEA's figures show a second-quarter drop of 500,000 bpd year-on-year.
"We believe that the IEA is significantly overstating the short-term ability of non-OPEC supply to bounce back and moderate the current situation," the bank said.
Some in the industry are more pessimistic about supply. Billionaire oil investor T. Boone Pickens said on Tuesday that he believed world crude production has topped out at 85 million bpd.
Peak oil has its detractors, such as BP Chief Executive Tony Hayward.The Organization of the Petroleum Exporting Countries is still expected by the IEA and others to expand its supply capacity this year.
Others avoid the term but still see non-OPEC output levelling off.
"The rate of year-on-year decline in Russia and Mexico has been surprising and it doesn't show any sign of letting up," Wittner said. "Non-OPEC output is certainly hitting a plateau."
Copyright 2008 Reuters.
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Pound Gains as U.K. Retail Sales Unexpectedly Jump Last Month
By Lukanyo Mnyanda
June 19 (Bloomberg) -- The pound rose to the highest level against the euro in almost three weeks after a government report showed retail sales in May surged the most since records began, prompting traders to bet on higher interest rates.
The currency also climbed to a one-week high versus the dollar after Bank of England Governor Mervyn King said policy makers will tolerate declining living standards to tackle price growth. The path of interest rates was ``uncertain,'' even with inflation at the highest level in at least a decade, King wrote in a letter to the government this week. Two-year gilts fell by the most in 10 days after the sales report.
``The number was a complete shock,'' said Derek Halpenny, head of currency research in London at Bank of Tokyo-Mitsubishi. ``In fact, it was such a shocker it's hard to believe. Understandably, we've seen a move up in sterling, but it's questionable how sustainable that will be.''
The U.K. currency climbed as much as 0.9 percent to 78.52 pence per euro, the strongest since June 2, and was at 78.56 pence by 4:11 p.m. in London, from 79.26 pence yesterday. It rose to $1.9727, the highest level since June 10, and was at $1.9718, from $1.9599 yesterday.
The pound may fall to 81 pence per euro over the next three months, Halpenny said. That compares with a median forecast of 80 pence by the end of the third quarter in a survey of 19 economists compiled by Bloomberg.
The 3.5 percent jump in U.K. retail sales was the most since the series started in 1986, and compared with a decline of 0.3 percent in April, the Office for National Statistics said. Economists in a Bloomberg News survey forecast a 0.1 percent drop. Sales rose 8.1 percent on the year, the most since 2002.
`Take Action'
The U.K. inflation rate rose to more than a percentage point above the central bank's target in May, a government report showed June 17, forcing King to write a letter of explanation to Chancellor of the Exchequer Alistair Darling.
Investors increased bets the central bank will lift rates in the third quarter. The implied yield on the short-sterling futures contract due September rose 21 basis points to 6.33 percent. The odds of a rate rise jumped to 35 percent, from 9 percent yesterday, according to a Credit Suisse Group derivatives index.
``The Monetary Policy Committee is prepared to take whatever action is needed to return inflation to the 2 percent target and to keep expectations of inflation in the medium term anchored to the target,'' King said yesterday in his annual Mansion House speech.
`Times are Tough'
Darling, speaking at the same event, said the economy is headed for a slowdown. He suggested the impact of a worldwide squeeze in borrowing costs is continuing and called on companies to keep a lid on pay raises that may embed faster inflation.
``Times are tough,'' Darling said. ``Today's inflation must be tackled. We cannot be complacent.''
The market ``has read King's comments as taking back some of the dovish tone in his letter,'' said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the third-largest Dutch bank. ``That has probably helped provide some support for sterling.'' The U.K. currency may trade as high as 78.50 pence per euro in the next week, he said
The Bank of England will probably raise its key interest rate by a quarter-point in August to 5.25 percent to curb inflation, Malcolm Barr, chief U.K. economist at JPMorgan Chase & Co., said in an e-mail today.
Government bonds fell for a second day, pushing the yield on the two-year gilt up by as much as 16 basis points to 5.54 percent. It was last at 5.48 percent. The price of the 4.75 percent security due June 2010 fell 0.22, or 2.2 pounds pence per 1,000-pound ($1,978) face amount, to 98.63.
The 10-year yield rose 9 basis points to 5.24 percent. Yields move inversely to bond prices.
The pound has dropped this month amid speculation flagging growth will prevent policy makers from raising rates even as inflation accelerates. HBOS Plc, the U.K.'s biggest mortgage lender, said house prices will fall as much as 9 percent this year, more than it earlier forecast.
`` We suspect the market is over-reacting to the retail sales figures,'' currency strategists at Brown Brothers Harriman & Co. in New York including Win Thin wrote in a client note. ``Other indicators point to a weakening of the economy and suggest these numbers may be a fluke.''
To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net
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June 19 (Bloomberg) -- The pound rose to the highest level against the euro in almost three weeks after a government report showed retail sales in May surged the most since records began, prompting traders to bet on higher interest rates.
The currency also climbed to a one-week high versus the dollar after Bank of England Governor Mervyn King said policy makers will tolerate declining living standards to tackle price growth. The path of interest rates was ``uncertain,'' even with inflation at the highest level in at least a decade, King wrote in a letter to the government this week. Two-year gilts fell by the most in 10 days after the sales report.
``The number was a complete shock,'' said Derek Halpenny, head of currency research in London at Bank of Tokyo-Mitsubishi. ``In fact, it was such a shocker it's hard to believe. Understandably, we've seen a move up in sterling, but it's questionable how sustainable that will be.''
The U.K. currency climbed as much as 0.9 percent to 78.52 pence per euro, the strongest since June 2, and was at 78.56 pence by 4:11 p.m. in London, from 79.26 pence yesterday. It rose to $1.9727, the highest level since June 10, and was at $1.9718, from $1.9599 yesterday.
The pound may fall to 81 pence per euro over the next three months, Halpenny said. That compares with a median forecast of 80 pence by the end of the third quarter in a survey of 19 economists compiled by Bloomberg.
The 3.5 percent jump in U.K. retail sales was the most since the series started in 1986, and compared with a decline of 0.3 percent in April, the Office for National Statistics said. Economists in a Bloomberg News survey forecast a 0.1 percent drop. Sales rose 8.1 percent on the year, the most since 2002.
`Take Action'
The U.K. inflation rate rose to more than a percentage point above the central bank's target in May, a government report showed June 17, forcing King to write a letter of explanation to Chancellor of the Exchequer Alistair Darling.
Investors increased bets the central bank will lift rates in the third quarter. The implied yield on the short-sterling futures contract due September rose 21 basis points to 6.33 percent. The odds of a rate rise jumped to 35 percent, from 9 percent yesterday, according to a Credit Suisse Group derivatives index.
``The Monetary Policy Committee is prepared to take whatever action is needed to return inflation to the 2 percent target and to keep expectations of inflation in the medium term anchored to the target,'' King said yesterday in his annual Mansion House speech.
`Times are Tough'
Darling, speaking at the same event, said the economy is headed for a slowdown. He suggested the impact of a worldwide squeeze in borrowing costs is continuing and called on companies to keep a lid on pay raises that may embed faster inflation.
``Times are tough,'' Darling said. ``Today's inflation must be tackled. We cannot be complacent.''
The market ``has read King's comments as taking back some of the dovish tone in his letter,'' said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the third-largest Dutch bank. ``That has probably helped provide some support for sterling.'' The U.K. currency may trade as high as 78.50 pence per euro in the next week, he said
The Bank of England will probably raise its key interest rate by a quarter-point in August to 5.25 percent to curb inflation, Malcolm Barr, chief U.K. economist at JPMorgan Chase & Co., said in an e-mail today.
Government bonds fell for a second day, pushing the yield on the two-year gilt up by as much as 16 basis points to 5.54 percent. It was last at 5.48 percent. The price of the 4.75 percent security due June 2010 fell 0.22, or 2.2 pounds pence per 1,000-pound ($1,978) face amount, to 98.63.
The 10-year yield rose 9 basis points to 5.24 percent. Yields move inversely to bond prices.
The pound has dropped this month amid speculation flagging growth will prevent policy makers from raising rates even as inflation accelerates. HBOS Plc, the U.K.'s biggest mortgage lender, said house prices will fall as much as 9 percent this year, more than it earlier forecast.
`` We suspect the market is over-reacting to the retail sales figures,'' currency strategists at Brown Brothers Harriman & Co. in New York including Win Thin wrote in a client note. ``Other indicators point to a weakening of the economy and suggest these numbers may be a fluke.''
To contact the reporter on this story: Lukanyo Mnyanda in London at lmnyanda@bloomberg.net
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Forex - U.S. dollar firms slightly; Pound extends gains on strong retail sales
LONDON (Thomson Financial) - The dollar firmed slightly as a weak manufacturing survey was accompanied by further evidence of rising prices, while the pound continued to gain after shockingly strong UK retail sales data increased talk of a UK interest rate hike.
The latest Philly Fed survey of manufacturing in the mid-Atlantic region showed a further contraction in June, surprising economists who thought the situation would improve slightly from May. Worries about rising inflationary pressures remain, however, as the prices paid component jumped sharply, keeping alive the possibility that the Federal Reserve may begin to consider increasing U.S. interest rates.
The U.S. dollar also firmed against the euro as the single currency suffered sharp falls against the pound, falling to a three-week low.
The UK currency has been strengthening sharply across the board after Thursday's retail sales data, which showed a massive 3.5 percent month-on-month rise during May that confounded all expectations. The rise was the highest since records began in 1986.
"There is more talk of a rate hike in the UK now, especially after today's shocking retail sales data, coupled with the doom and gloom coming out of Mansion House last night," said Mic Mills, a trader at TradIndex.com.
Bank of England governor Mervyn King adopted a more hawkish stance at his annual Mansion House speech on Wednesday, stressing that the central bank will "take whatever action is needed to return inflation to the 2 percent target and to keep expectations of inflation in the medium term anchored to the target". He also warned that households may have to get used to the pain of high inflation over the coming year.
The comments caused the market to reassess the dovish interpretation of King's letter to Chancellor Alistair Darling on Tuesday after annual CPI inflation rose to 3.3 percent, where he said a rate hike now could harm the economy.
London 1630 GMT London 1600 GMT U.S. dollar yen 107.99 up from 107.66 Swiss franc 1.0462 up from 1.0438 Euro U.S. dollar 1.5488 down from 1.5491 pound 0.7852 down from 0.7868 yen 167.32 up from 166.82 Swiss franc 1.6212 up from 1.6171 Pound U.S. dollar 1.9731 up from 1.9686 yen 213.05 up from 211.99 Swiss franc 2.0642 up from 2.0550 Australian dollar U.S. dollar 0.9494 up from 0.9472 pound 0.4811 unchanged yen 102.55 up from 102.01 jessica.mortimer@thomsonreuters.com jkm/am COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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The latest Philly Fed survey of manufacturing in the mid-Atlantic region showed a further contraction in June, surprising economists who thought the situation would improve slightly from May. Worries about rising inflationary pressures remain, however, as the prices paid component jumped sharply, keeping alive the possibility that the Federal Reserve may begin to consider increasing U.S. interest rates.
The U.S. dollar also firmed against the euro as the single currency suffered sharp falls against the pound, falling to a three-week low.
The UK currency has been strengthening sharply across the board after Thursday's retail sales data, which showed a massive 3.5 percent month-on-month rise during May that confounded all expectations. The rise was the highest since records began in 1986.
"There is more talk of a rate hike in the UK now, especially after today's shocking retail sales data, coupled with the doom and gloom coming out of Mansion House last night," said Mic Mills, a trader at TradIndex.com.
Bank of England governor Mervyn King adopted a more hawkish stance at his annual Mansion House speech on Wednesday, stressing that the central bank will "take whatever action is needed to return inflation to the 2 percent target and to keep expectations of inflation in the medium term anchored to the target". He also warned that households may have to get used to the pain of high inflation over the coming year.
The comments caused the market to reassess the dovish interpretation of King's letter to Chancellor Alistair Darling on Tuesday after annual CPI inflation rose to 3.3 percent, where he said a rate hike now could harm the economy.
London 1630 GMT London 1600 GMT U.S. dollar yen 107.99 up from 107.66 Swiss franc 1.0462 up from 1.0438 Euro U.S. dollar 1.5488 down from 1.5491 pound 0.7852 down from 0.7868 yen 167.32 up from 166.82 Swiss franc 1.6212 up from 1.6171 Pound U.S. dollar 1.9731 up from 1.9686 yen 213.05 up from 211.99 Swiss franc 2.0642 up from 2.0550 Australian dollar U.S. dollar 0.9494 up from 0.9472 pound 0.4811 unchanged yen 102.55 up from 102.01 jessica.mortimer@thomsonreuters.com jkm/am COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
Taken From : www.cnbc.com
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U.S. Stocks Advance, Led by Technology, Transportation Shares
By Elizabeth Stanton
June 19 (Bloomberg) -- U.S. stocks rose for the first time in three days as an almost $5-a-barrel drop in oil boosted transportation and consumer companies and technology shares rallied on forecasts for higher earnings at Broadcom Corp.
The market extended its gains after regional bank BB&T Corp. said it expects to increase its dividend this year, countering speculation it will slash the payout. Broadcom rallied the most since April after Lehman Brothers Holdings Inc. said the maker of computer chips is poised for steadier profit growth. Ryder Systems Inc. and Southwest Airlines Co. led nine of ten transportation companies in the Standard & Poor's 500 Index higher as crude slid.
The S&P 500 added 5.02 points, or 0.4 percent, to 1,342.83. The Dow Jones Industrial Average increased 34.03, or 0.3 percent, to 12,063.09. The Nasdaq Composite Index jumped 32.36, or 1.3 percent, to 2,462.07. More than three stocks rose for every two that fell on the New York Stock Exchange.
``If sentiment starts to develop that the economy's indeed bottomed, and oil prices could pull back a little bit, I think that would set off a pretty bullish atmosphere,'' James Paulsen, chief investment strategist of Wells Capital Management in Minneapolis, said on Bloomberg Television.
Among the 10 industries in the S&P 500, only energy producers declined. BB&T's announcement helped financial shares in the index gain after the group earlier plunged to a five-year low on Citigroup Inc.'s forecast for more writedowns from subprime-infected holdings.
Broadcom Rallies
Broadcom rose 7.6 percent to $27.22 for the biggest gain in the S&P 500. Lehman analyst Tim Luke increased his second-quarter earnings forecast for the maker of semiconductors used in Nintendo Co.'s Wii video-game console and said his third-quarter profit forecast may ``prove conservative'' as demand increases.
All but one of 18 semiconductor companies in the S&P 500 advanced as the group gained 2.5 percent. Intel Corp., the world's largest chipmaker, added 57 cents to $22.85.
Ryder, the largest U.S. truck-leasing company, rose $3.59 to $73.86. Southwest Airlines, the biggest low-fare carrier, climbed 66 cents to $14.80. Carnival Corp., the world's largest cruise- line company, added 5.4 percent to $36.84.
Crude's Plunge
Crude oil fell $4.75, or 3.5 percent, to $131.93 a barrel on speculation demand will decline after China said it will raise fuel prices starting tomorrow. China, the second-biggest fuel consumer after the U.S., will increase gasoline and diesel prices by 17 percent and 18 percent respectively, the National Development and Reform Commission said. Gasoline, natural gas and heating oil also fell.
Energy shares, the best performing of 10 industries in the S&P 500 over the past 12 months with an 17 percent gain, fell 2.1 percent as a group. Exxon Mobil Corp., the world's largest oil company, lost 2.3 percent to $85.79. Chevron Corp., the second- biggest U.S. oil company, dropped 2.4 percent to $96.86. The two companies fell the most in the Dow average.
BB&T, the third-biggest bank based in North Carolina, rose 2 cents to $24.35 after earlier plunging as much as 12 percent. BB&T said it stood by its April 17 statement that it expects ``some increase in the cash dividend during 2008.''
BB&T tumbled earlier after analysts at Sterne Agee & Leach Inc. said the bank may have to cut its dividend by 50 percent to preserve capital.
Fifth Third Bancorp, Ohio's second biggest bank, led the market lower yesterday after slashing its dividend and forecasting earnings below analysts' estimates.
Regionals Recover
Regional banks in the S&P 500 fell less than 0.1 percent as a group after sinking 5 percent earlier in the day.
Citigroup lost 23 cents, or 1.1 percent, to $20.17. The biggest U.S. bank will have ``substantial'' additional writedowns on its holdings of debt linked to the subprime mortgage market, Chief Financial Officer Gary Crittenden said on a conference call with investors hosted by Deutsche Bank AG.
American International Group Inc. rose 4.9 percent to $33.07 for the biggest gain in the Dow average. The world's biggest insurer was upgraded to ``buy'' by Citigroup Inc. analyst Joshua Shanker, who said investors have ``irrationally'' driven the company's shares down.
Coventry Health Care Inc. posted its worst decline in nine years, dragging down larger insurers UnitedHealth Group Inc. and WellPoint Inc., after cutting its profit forecast.
Coventry tumbled 22 percent to $31.30. The managed-care provider said higher medical costs and increased patient claims would hurt second-quarter profit.
Health Insurers Tumble
UnitedHealth, the largest U.S. health insurer, dropped 7.7 percent to $27.89. WellPoint, the second-biggest, lost 5.2 percent to $49.28. Aetna Inc., the third-largest, declined 1.8 percent to $41.85. Health insurers in the S&P fell 6.4 percent as a group, their steepest tumble since March.
Huntsman Corp. plunged the most ever after buyout firm Apollo Management LP and its Hexion Specialty Chemicals Inc. unit sued to back out of an agreement to acquire the chemical maker for $6.54 billion. Huntsman dropped $8, or 38 percent, to $12.86, the most since it went public three years ago.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net
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June 19 (Bloomberg) -- U.S. stocks rose for the first time in three days as an almost $5-a-barrel drop in oil boosted transportation and consumer companies and technology shares rallied on forecasts for higher earnings at Broadcom Corp.
The market extended its gains after regional bank BB&T Corp. said it expects to increase its dividend this year, countering speculation it will slash the payout. Broadcom rallied the most since April after Lehman Brothers Holdings Inc. said the maker of computer chips is poised for steadier profit growth. Ryder Systems Inc. and Southwest Airlines Co. led nine of ten transportation companies in the Standard & Poor's 500 Index higher as crude slid.
The S&P 500 added 5.02 points, or 0.4 percent, to 1,342.83. The Dow Jones Industrial Average increased 34.03, or 0.3 percent, to 12,063.09. The Nasdaq Composite Index jumped 32.36, or 1.3 percent, to 2,462.07. More than three stocks rose for every two that fell on the New York Stock Exchange.
``If sentiment starts to develop that the economy's indeed bottomed, and oil prices could pull back a little bit, I think that would set off a pretty bullish atmosphere,'' James Paulsen, chief investment strategist of Wells Capital Management in Minneapolis, said on Bloomberg Television.
Among the 10 industries in the S&P 500, only energy producers declined. BB&T's announcement helped financial shares in the index gain after the group earlier plunged to a five-year low on Citigroup Inc.'s forecast for more writedowns from subprime-infected holdings.
Broadcom Rallies
Broadcom rose 7.6 percent to $27.22 for the biggest gain in the S&P 500. Lehman analyst Tim Luke increased his second-quarter earnings forecast for the maker of semiconductors used in Nintendo Co.'s Wii video-game console and said his third-quarter profit forecast may ``prove conservative'' as demand increases.
All but one of 18 semiconductor companies in the S&P 500 advanced as the group gained 2.5 percent. Intel Corp., the world's largest chipmaker, added 57 cents to $22.85.
Ryder, the largest U.S. truck-leasing company, rose $3.59 to $73.86. Southwest Airlines, the biggest low-fare carrier, climbed 66 cents to $14.80. Carnival Corp., the world's largest cruise- line company, added 5.4 percent to $36.84.
Crude's Plunge
Crude oil fell $4.75, or 3.5 percent, to $131.93 a barrel on speculation demand will decline after China said it will raise fuel prices starting tomorrow. China, the second-biggest fuel consumer after the U.S., will increase gasoline and diesel prices by 17 percent and 18 percent respectively, the National Development and Reform Commission said. Gasoline, natural gas and heating oil also fell.
Energy shares, the best performing of 10 industries in the S&P 500 over the past 12 months with an 17 percent gain, fell 2.1 percent as a group. Exxon Mobil Corp., the world's largest oil company, lost 2.3 percent to $85.79. Chevron Corp., the second- biggest U.S. oil company, dropped 2.4 percent to $96.86. The two companies fell the most in the Dow average.
BB&T, the third-biggest bank based in North Carolina, rose 2 cents to $24.35 after earlier plunging as much as 12 percent. BB&T said it stood by its April 17 statement that it expects ``some increase in the cash dividend during 2008.''
BB&T tumbled earlier after analysts at Sterne Agee & Leach Inc. said the bank may have to cut its dividend by 50 percent to preserve capital.
Fifth Third Bancorp, Ohio's second biggest bank, led the market lower yesterday after slashing its dividend and forecasting earnings below analysts' estimates.
Regionals Recover
Regional banks in the S&P 500 fell less than 0.1 percent as a group after sinking 5 percent earlier in the day.
Citigroup lost 23 cents, or 1.1 percent, to $20.17. The biggest U.S. bank will have ``substantial'' additional writedowns on its holdings of debt linked to the subprime mortgage market, Chief Financial Officer Gary Crittenden said on a conference call with investors hosted by Deutsche Bank AG.
American International Group Inc. rose 4.9 percent to $33.07 for the biggest gain in the Dow average. The world's biggest insurer was upgraded to ``buy'' by Citigroup Inc. analyst Joshua Shanker, who said investors have ``irrationally'' driven the company's shares down.
Coventry Health Care Inc. posted its worst decline in nine years, dragging down larger insurers UnitedHealth Group Inc. and WellPoint Inc., after cutting its profit forecast.
Coventry tumbled 22 percent to $31.30. The managed-care provider said higher medical costs and increased patient claims would hurt second-quarter profit.
Health Insurers Tumble
UnitedHealth, the largest U.S. health insurer, dropped 7.7 percent to $27.89. WellPoint, the second-biggest, lost 5.2 percent to $49.28. Aetna Inc., the third-largest, declined 1.8 percent to $41.85. Health insurers in the S&P fell 6.4 percent as a group, their steepest tumble since March.
Huntsman Corp. plunged the most ever after buyout firm Apollo Management LP and its Hexion Specialty Chemicals Inc. unit sued to back out of an agreement to acquire the chemical maker for $6.54 billion. Huntsman dropped $8, or 38 percent, to $12.86, the most since it went public three years ago.
To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net
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