Clearwater, FuelCell, Moog, Nordstrom, Wynn: U.S. Equity Movers

By Lu Wang

April 9 (Bloomberg) -- Shares of the following companies are having unusual moves in U.S. trading. Stock symbols are in parentheses, and prices are as of 11:45 a.m. in New York.

Banks climbed after Wells Fargo & Co., the second-biggest U.S. home lender, said first-quarter net income was about $3 billion and that results at Wachovia Corp., acquired about three months ago, were exceeding expectations.

Wells Fargo (WFC US) climbed 19 percent to $17.75. Bank of America Corp. (BAC US) gained 19 percent to $8.41. JPMorgan Chase & Co. (JPM US) rose 14 percent to $31.31. Citigroup Inc. (C US) advanced 9.3 percent to $2.95.

SunTrust Banks Inc. (STI US) gained 19 percent to $12.88. Fifth Third Bancorp (FITB US) jumped 20 percent to $3.17. U.S. Bancorp (USB US) increased 9.3 percent to $15.69.

A-Power Energy Generation Systems Ltd. (APWR US) rallied 29 percent to $5.75 and earlier jumped 39 percent, the most intraday since Oct. 13. The Chinese wind turbine manufacturer said fourth-quarter profit tripled to $10 million.

Apple Inc. (AAPL US) climbed 2.5 percent to $119.27 and earlier rose to $119.88, the highest intraday price since Sept. 26. Credit Suisse Group AG raised its fiscal second quarter earnings estimate for the company by 12 percent to $1.09 per share, citing better-than-expected demand for both Macintosh computers and iPhones. The firm also raised its price target for the stock by 11 percent to $133

Autoliv Inc. (ALV US) rose 10 percent to $24.09 and earlier jumped to $25.25, the highest intraday price since Oct. 15. The world’s largest maker of vehicle air bags was upgraded to “buy” from “hold” at Societe Generale SA.

Cash America International Inc. (CSH US) gained 18 percent to $20.31 and earlier rallied 21 percent, the most intraday since September 1999. The world’s largest pawn shop operator said first-quarter profit was at least 76 cents a share, topping its earlier forecast. The result also exceeded the average estimate of 66 cents in a Bloomberg survey of analysts.

Charlotte Russe Holding Inc. (CHIC US) gained 14 percent to $10.45 and earlier climbed to $10.72, the highest intraday price since Sept. 30. The retailer of clothing for young women said it probably had a fiscal second-quarter per-share profit of 2 cents to 5 cents excluding costs to pay severance and conduct a strategic review. The company had previously said it would have a loss of at least 10 cents on that basis.

Clearwater Paper Corp. (CLW US) rose 16 percent to $9.20 and earlier climbed 16 percent, the most intraday since March 19. The maker of pulp and paperboard was raised to “buy” from “neutral” by D.A. Davidson & Co.

Costco Wholesale Corp. (COST US) fell 3.1 percent to $46.22 and earlier lost 4.5 percent, the most intraday since Feb. 4. The largest U.S. warehouse club reported its weakest monthly sales performance since November as gasoline prices declined and a stronger U.S. dollar ate into international revenue. Sales at stores open at least a year fell 5 percent in the five weeks ended April 5.

Excel Maritime Carriers Ltd. (EXM US) surged 12 percent to $6.66 and earlier climbed to $7.10, the highest intraday price since Feb. 13. Profit from operations excluding some charges and one-time items was $1.71 per share, beating the $1.66 per share estimate of Cantor Fitzgerald LP analyst Natasha Boyden.

FuelCell Energy Inc. (FCEL US) rose 12 percent to $2.94 and earlier rallied 13 percent, the most intraday since March 11. The maker of pollution-free power plants said it won final approval by Connecticut utility authorities to install 27.3 megawatts of the plants around the state.

General Motors Corp. (GM US) rose 3.6 percent to $2. The biggest foreign automaker in China said it expects to double its annual sales in the country to over 2 million vehicles over the next five years.

Gymboree Corp. (GYMB US) jumped 21 percent to $26.47 and earlier advanced 24 percent, the most intraday since Nov. 20. The children’s clothing retailer boosted its first-quarter earnings forecast to at least 50 cents a share from an earlier projection of 25 cents at most.

Hospitality Properties Trust (HPT US) fell the most in the Russell 1000 Index, sliding 21 percent to $10.78. The real estate investment trust with interest in hotels suspended its dividend, citing market conditions.

Moog Inc. (MOG/A US) slid 9.9 percent to $22.91 and earlier slumped 15 percent, the most intraday since at least February 1988. The maker of flight-control systems reduced its earnings forecast for 2009, saying it expects profit excluding a change to be around $2.20 a share. The company previously projected $2.80.

Movado Group Inc. (MOV US) fell 9.8 percent to $7.50 and earlier lost 14 percent, the most intraday since March 5. The watchmaker said it isn’t in compliance with one of the financial covenants in its credit agreements.

Nordstrom Inc. (JWN US) rose 14 percent to $21.21 and earlier advanced to $21.66, the highest intraday price since Oct. 8. The luxury department-store chain said March sales at stores open at least one year dropped 13.5 percent. Analysts surveyed by Retail Metrics Inc. expected a decline of 14 percent.

Shaw Group Inc. (SGR US) dropped 5.2 percent to $27.57 and earlier lost 8.3 percent, the most intraday since March 2. The builder of power plants said 2009 per-share profit will be $2.10 to $2.30, excluding Westinghouse results. The Baton Rouge, Louisiana-based company had previously forecast a profit of $2.50 to $2.70 a share.

Textron Inc. (TXT US) surged 52 percent to $13.86 for the biggest jump in the Standard & Poor’s 500 Index. Kuwait’s Al- Watan newspaper reported a United Arab Emirates consortium is preparing to buy the maker of Cessna aircraft and Bell helicopters for $21 a share. Textron spokeswoman Karen Gordon Quintal declined to comment.

Wal-Mart Stores Inc. (WMT US) dropped 4.3 percent to $50.35 for the biggest decline in the Dow Jones Industrial Average. The world’s largest retailer reported comparable-store sales in March that rose less than some analysts estimated. Revenue from U.S. stores open at least a year advanced 1.4 percent in the five weeks ended April 3, missing the 3.2 percent average estimate compiled by Retail Metrics Inc.

Other retailers that reported worse-than-expected sales also declined. Abercrombie & Fitch Co. (ANF US) lost 10 percent to $23.04. BJ’s Wholesale Club Inc. (BJ US) slid 5 percent to $32.37.

Wynn Resorts Ltd. (WYNN US) rose 9.9 percent to $30.42. The casino company had its share-price estimate increased to $30 from $27 by Sanford C. Bernstein & Co., which said Wynn will be able to meet its debt covenants.

To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net

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Canadian Currency Strengthens for Third Day Against U.S. Dollar

By Chris Fournier

April 9 (Bloomberg) -- Canada’s dollar rose for a third day against its U.S. counterpart on signs deterioration in the world’s eighth-largest economy may be losing momentum and improved prospects for commodity currencies.

The Canadian currency, known as the loonie, climbed after the nation unexpectedly posted a trade surplus of C$126 million ($102 million)in February on shipments of cars and airplanes. Economists forecast a deficit of C$1.2 billion, according to the median estimate in a Bloomberg News survey. Commodities, which accounted for 56 percent of Canada’s export revenue last year, advanced.

“As we get through 2009, the market is going to continue to like commodity-linked currencies,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. He predicts the loonie will appreciate to C$1.18 by year-end.

The Canadian dollar rose 0.8 percent to C$1.2266 per U.S. dollar at 10:51 a.m. in Toronto, from C$1.2364 yesterday. One Canadian dollar buys 81.53 U.S. cents. The Canadian dollar tends to track fluctuations in stocks and commodity prices.

The Standard & Poor’s 500 Index rose 2.6 percent after Wells Fargo & Co. said first-quarter earnings would be better than expected.

Crude oil for May delivery rose 4.7 percent to $51.68 a barrel. Copper futures for May delivery gained 3.1 percent in New York to $2.061 a pound, heading for the fourth consecutive weekly increase.

Risk Appetite

“Generally the fall in commodity prices seems to have stopped,” said Aaron Fennell, a Toronto-based futures and currency broker at MF Global Canada Co., a unit of MF Global Ltd. “In terms of risk appetite, traders seem to be more willing to look for the bottom in the various commodity markets. Many traders are planning their strategies for how they want to be positioned as we come out of the recession.”

After reaching a four-year low of C$1.3064 on March 9, the loonie appreciated as investors ventured out of haven currencies such as the U.S. dollar and the Japanese yen. They purchased riskier assets such as stocks and commodity-linked currencies.

Canadian employers pared a net 61,300 jobs, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg predicted employment would fall by 50,000.

The loonie will weaken to C$1.26 against the greenback by the end of this quarter, according to the median forecast in a Bloomberg survey of 37 economists.

To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

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Global Stocks, Oil Gain as Treasuries, VIX Fall; Banks Advance

By Rita Nazareth

April 9 (Bloomberg) -- Stocks rallied around the world, driving the benchmark index of investor anxiety to a six-month low, as better-than-estimated earnings at Wells Fargo & Co. and speculation American banks will pass government stress tests boosted confidence in the financial system. Oil gained, Treasuries fell and the dollar rose against the euro and yen.

Wells Fargo, the second-largest U.S. lender, jumped 20 percent. Bank of America Corp. and JPMorgan Chase & Co. climbed at least 12 percent on a report that all 19 banks examined by the government will pass the review meant to determine their viability should the recession deepen. Barclays Plc surged 12 percent in London after agreeing to sell its iShares unit. The VIX, as Wall Street’s stock market “fear gauge” is known, fell to 37.62, the best level since September.

The Standard & Poor’s 500 Index added 2.5 percent to 845.99 at 12:14 p.m. in New York, poised to advance for a fifth straight week, the longest stretch since the bear market started in October 2007. The Dow Jones Industrial Average rose 173.55, or 2.2 percent, to 8,010.66. Benchmark stock gauges in Germany and Hong Kong added 3 percent as the MSCI World Index of 23 developed nations increased 2.2 percent, the most in a week.

“The worst is behind us,” said Alan Gayle, a Richmond, Virginia-based senior investment strategist at RidgeWorth Capital Management, which oversees $60 billion. “We’re working our way through the credit crisis and that’s why the market is cheering.”

VIX Under 40

Stocks also rallied after the government reported that initial jobless claims in the U.S. dropped more than economists estimated last week and the trade deficit unexpectedly shrank 28 percent, the most since 1996, as imports decreased.

The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell to the lowest since Sept. 26, dropping 3.2 percent to 37.62. The index measures the cost of using options as insurance against declines in the S&P 500.

Before Lehman Brothers Holdings Inc. filed the largest bankruptcy in U.S. history in September, the VIX surpassed 40 during four prior periods in its 19-year history and never stayed above that level for more than 10 days. It’s closed below 40 only eight times since Sept. 29.

The S&P 500 has climbed 25 percent since reaching the lowest level in a dozen years on March 9 as banks from Citigroup Inc. to JPMorgan said they made money in the first two months of the year and Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets. The index is still down 6.4 percent in 2009 after tumbling 38 percent last year, its worst annual return since the Great Depression.

Wachovia Beats

Wells Fargo jumped $2.95 to $17.84. The second-biggest U.S. home lender reported a record first-quarter profit that beat the most optimistic Wall Street estimates, sparking speculation that the industry’s slump has ended.

Net income rose about 50 percent from $2 billion a year earlier. Per-share profit equaled about 55 cents, more than double the average estimate of analysts surveyed by Bloomberg. The acquisition of Wachovia Corp., whose overdue home loans helped cut Wells Fargo’s stock price in half this year, is exceeding expectations, the statement said.

“Earnings expectations are so low, there’s wide open potential for pleasant surprises,” said Bruce Bittles, the Nashville-based chief investment strategist at Robert W. Baird & Co., which oversees $16 billion. “We see stocks moving higher into late summer.”

Bank of America gained 19 percent to $8.41 and Citigroup climbed 8.5 percent to $2.93. JP Morgan added 12 percent to $30.77. Fifth Third Bancorp surged 21 percent to $3.20.

The S&P 500 Financials Index, a gauge of 80 banks, insurers and investment firms, climbed 7.8 percent to its highest level in two months.

More Capital?

Some of the largest lenders may still need additional capital infusions from investors or taxpayers, the New York Times said, citing unidentified officials involved in the research. Regulators may use the findings of the examinations, likely to be completed this month, to push some companies to sell distressed assets, according to the report.

Federal Reserve officials are conducting an internal review of bank supervision aimed at improving regulators’ response to stress in the financial system, according to people familiar with the process. The evaluation focuses on speeding information flows and clearing up lines of communication for bank examiners who now report to both regional Fed bank officers and the Board of Governors in Washington.

Europe’s Dow Jones Stoxx 600 Index increased 2.2 percent as the Bank of England left its key interest rate at a record low of 0.5 percent. The MSCI Asia Pacific Index rallied 3.2 percent.

Treasuries, Oil, Copper

Treasury 10-year notes declined for the first time in three days, sending yields up 0.04 percentage point to 2.89 percent. Crude oil rallied 3.7 percent to $51.19 a barrel as copper and aluminum also gained.

Barclays shares jumped 12 percent to 177.5 pence after agreeing to sell iShares, its exchange-traded funds unit, to CVC Capital Partners Ltd. for 3 billion pounds ($4.4 billion).

Textron Inc. soared the most in 28 years on takeover speculation, jumping 52 percent to $13.87. Kuwait’s Al-Watan newspaper reported a United Arab Emirates consortium is preparing to buy the maker of Cessna aircraft and Bell helicopters for $21 a share.

General Motors Corp. rose 3.6 percent to $2. The biggest foreign automaker in China said it expects to double annual sales in the country to over 2 million vehicles over the next five years. China’s passenger car sales rose 10 percent in March from a year earlier after tax cuts and government subsidies boosted demand, according to the China Association of Automobile Manufacturers.

Macs, iPhones

Apple Inc. rose 2.5 percent to $119.21 after Credit Suisse Group AG raised its fiscal second-quarter earnings estimate, citing higher-than-projected demand for both Macintosh computers and iPhones.

Robert Doll, global chief investment officer at BlackRock Inc., told financial news network CNBC that he is advising investors to shift money from safer assets such as U.S. Treasuries into equities. He recommended energy, technology and health-care companies.

“The worst of the recession is in the rear-view mirror,” Doll said.

Profits at S&P 500 companies probably fell 38 percent on average in the first quarter, according to analysts’ estimates compiled by Bloomberg. The stretch of seven straight declines in quarterly earnings is the longest since at least the Great Depression, data compiled by S&P and Bloomberg show.

Oil, Wal-Mart

Exxon Mobil Corp. added 1.3 percent to $69.87, while ConocoPhillips increased 1.2 percent to $40.03. Crude oil rose for a second day after a government report showed a smaller gain in U.S. inventories than the industry indicated a day earlier.

Wal-Mart Stores Inc. fell 4.1 percent and Costco Wholesale Corp. lost 2.1 percent, leading consumer staples stocks to the biggest decline in the S&P 500 among 10 industries.

Wal-Mart, the world’s largest retailer, reported comparable-store sales in March that rose less than some analysts estimated. Costco, the largest U.S. warehouse club, reported its weakest monthly sales performance since November.

Abercrombie & Fitch Co. fell 9.9 percent to $23.13, the biggest decline in the S&P 500. The U.S. teen-apparel retailer reported a 34 percent drop in March same store sales.

The highest U.S. unemployment since 1983 has forced consumers to restrain spending. The number of Americans filing first-time claims for unemployment insurance exceeded 600,000 for a 10th straight week, although the tally of 654,000 was less 6,000 than economists’ average estimate, and the total collecting benefits increased to a record in a sign that the labor market remains weak.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.

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New Zealand Stocks: New Zealand Oil, Sky Network Television

By Shani Raja

April 9 (Bloomberg) -- New Zealand’s NZX 50 Index fell for a third day, slipping 0.2 percent to 2,562.97 at 10:35 a.m. in Wellington, poised for the lowest close since March 16. The following were among the most active shares in the New Zealand market. Stock symbols are in parentheses after company names.

New Zealand Oil & Gas Ltd. (NZO NZ), the country’s biggest publicly traded explorer, advanced 0.7 percent to NZ$1.38, erasing yesterday’s decline. Crude oil rose for the first time in four days yesterday after a U.S. government report showed a smaller inventory gain than that predicted in an industry report.

Sky Network Television Ltd. (SKT NZ), New Zealand’s largest pay-television operator, gained 1 percent to NZ$3.89, the benchmark index’s third-best performance.

Sky will be the host broadcaster of the 2011 Rugby World Cup, delivering all 48 matches live and providing a base for other licensed broadcasters, Rugby World Cup Ltd. said in a statement posted on its Web site.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

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Roubini Says Bank Takeovers Deepened Financial Market Crisis

By Lynn Thomasson and Thomas R. Keene

April 8 (Bloomberg) -- Bank takeovers worsened the financial crisis by making firms that were already too big even bigger, said Nouriel Roubini, the New York University professor who predicted the financial crisis.

“The institutions are insolvent,” Roubini said in a Bloomberg Radio interview. “You have to take them over and you have to split them up into three or four national banks, rather than having a humongous monster that is too big to fail.”

JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. in March 2008, with help from the Federal Reserve, while Bank of America Corp. purchased Merrill Lynch & Co. Wells Fargo & Co. took control of Wachovia Corp. and PNC Financial Services Group Inc. got National City Corp.

Banks around the world have reported $1.29 trillion in credit losses tied to the housing market collapse since 2007. The deficits, which spurred the first simultaneous recessions in the U.S., Europe and Japan since World War II, pushed the American government to pledge $12.8 trillion to stabilize the banking system and revive economic growth. That figure amounts to $42,105 for every man, woman and child in the country.

The Standard & Poor’s 500 Index, which tumbled 38 percent in 2008, has rallied 22 percent after sinking to a 12-year low on March 9. Roubini said in a Bloomberg interview that day that the S&P 500 is likely to drop to 600 or lower this year as the global recession intensifies.

To contact the reporters on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net; Thomas R. Keene in New York at tkeene@bloomberg.net.

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Arcandor, BMW, Comdirect, Henkel, TUI: German Equity

By Jann Bettinga

April 9 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close. The DAX Index rose 0.8 percent to 4,357.92 yesterday.

Arcandor AG (ARO GY): The retail company is considering taking state aid, the Financial Times Deutschland reported. Chief Executive Officer Karl-Gerhard Eick has discussed state guarantees in the “upper triple-digit” million-euro range with high-ranking members of Germany’s federal government, the newspaper said. The shares fell 15 percent to 1.64 euros.

Bayerische Motoren Werke AG (BMW GY): The world’s largest maker of luxury autos will remain an independent company and isn’t seeking a global alliance, the president of its U.S. unit said. The shares rose 6.2 percent to 25.385 euros.

Comdirect Bank AG (COM GY): The online broker agreed to buy European Bank for Fund Services, or Ebase, for 24.9 million euros ($33.1 million). The stock fell 1.2 percent to 5.71 euros.

Henkel AG & Co. (HEN3 GY): The maker of Persil detergent said first-quarter operating profit dropped 33 percent on declining demand for its adhesives business in the global recession. The stock advanced 0.7 percent to 21.82 euros.

Hochtief AG (HOT GY): The builder is withdrawing from a group to expand and operate the A5 highway in Germany, the Financial Times Deutschland newspaper reported. The shares rose 2.5 percent to 31.23 euros.

Deutsche Lufthansa AG (LHA GY): Europe’s second-biggest airline is scheduled to report March traffic figures. The shares climbed 2.7 percent to 9.195 euros.

TUI AG (TUI1 GY): Shareholder John Fredriksen proposed that supervisory board Chairman Juergen Krumnow be removed from the post at next month’s annual general meeting, a year after his first attempt failed. The shares rose 0.3 percent to 4.70 euros.

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

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Oil, Gas May ‘Slingshot’ Up After Credit Freezes Rigs

By David Wethe

April 8 (Bloomberg) -- The credit crunch will keep U.S. oil and gas producers from ramping up exploration they do through drillers such as Nabors Industries Ltd., setting the stage for shortages and surging prices when demand recovers.

Chesapeake Energy Corp. and Carrizo Oil & Gas Inc. are among producers spending no more than their cash flow after a collapse in credit markets drove up debt costs. That means they won’t hire the likes of Nabors and Rowan Cos. to drill more wells in anticipation of higher prices. Producers cut capital budgets 17 percent this year after demand slowed and prices plunged, according to Tristone Capital Inc.

“Quite frankly, they don’t have the credit, which exacerbates the problem that their revenue stream is far below the cost structure,” said Jud Bailey, an analyst at Jefferies & Co. in Houston. “They’re not jumping on lower service costs simply because they can’t. They’re literally stepping away from anything they’re not contractually obligated to.”

The result may be a “slingshot” effect as spending cuts leave a supply shortage once demand returns, Bailey said. The number of active drilling rigs worldwide has fallen 35 percent from the 23-year high reached in September, according to Baker Hughes Inc. The U.S. rig count has plunged by almost half.

Houston-based Rowan, a drilling contractor that also builds rigs, said clients are delaying or canceling projects as they wait for service costs to follow oil and natural-gas prices lower. “Our customers are being quite vocal about wanting to reset their costs of operations in this currently low commodity- price environment,” Chief Executive Officer Matt Ralls told investors on a Feb. 26 conference call.

Stocks Plunged

Rowan, which had lost 70 percent of its market value in the past year before today, rose 56 cents to $13.05 in New York Stock Exchange composite trading. Nabors, based in Bermuda and run from offices in Houston, climbed 37 cents to $11.62. It was down 68 percent in the past year.

Most of Rowan’s rigs drill on land or in waters less than 1,000 feet (305 meters) deep. Nabors, the world’s largest onshore oil and gas driller, expects “substantially lower” earnings from land-based rigs through the first half of this year, CEO Gene Isenberg said in a Feb. 25 statement.

Of the 273 onshore rigs Nabors had working in the U.S. in October, more than 150 are now sitting idle.

Drilling originally stalled after a collapse in oil and gas prices from last year’s historic highs, said Dennis Smith, corporate development director at Nabors. U.S. crude-oil futures are down almost $100 a barrel from the record set in July.

Credit Squeeze

“The credit crunch might exacerbate it to some extent, especially the smaller guys that have no access to capital now from the conventional debt markets,” Smith said. “Generally people that are investment grade are still able to borrow, but they’re just being very prudent because nobody knows for sure where their cash flow is going to be.”

Deepwater drillers such as Transocean Inc. and Noble Corp. have fared better as producers go forward with large projects under contracts committing them to pay rig rents of more than $500,000 a day in some cases.

The credit crunch sets the current drilling slump apart from the slowdowns of 1997-1998 and 2001-2002, said James Wicklund, chief investment officer at Carlson Capital LP in Dallas. Exploration and production companies have more to consider than waiting for costs to come down, he said.

“The problem is instead of just waiting them out, they don’t have the credit markets to rely on this time to re- accelerate their drilling,” Wicklund said. “Before it was like, ‘OK, I’m going to wait until you drop prices by 20 percent, then I’m going to swoop.’ This time, the E&P companies have to live within cash flow.”

Awaiting Lower Costs

Houston-based Noble Energy Inc. is one of those producers looking for service costs to drop before resuming some projects. Chief Executive Officer Charles Davidson said he also needs to avoid contributing to a U.S. gas glut.

“It’s probably not the best time to be accelerating gas production,” Davidson said in a March 23 interview.

Just about all producers will be affected by the lack of available credit, regardless of how much debt they hold, said Subash Chandra, an analyst at Jefferies & Co. in New York.

“You’ll find over the last several years, pretty much everyone has borrowed to grow,” Chandra said. “Our industry on average has spent 130 percent of cash flow for a couple years in a row now. It’s kind of standard procedure.”

Oil Seen Rising

Schlumberger Ltd., the world’s biggest oilfield contractor, said a more prolonged slowdown in exploration and production spending will mean sharper price gains when the slump ends.

“The longer the period of lower spending, the more dramatic the falloff in production capacity will be and the steeper the recovery in oil prices once demand recovers,” CEO Andrew Gould said March 23 at a conference in New Orleans.

Larry Dickerson, CEO at Houston-based Diamond Offshore Drilling Inc., said he thinks global economic growth will be “substantial” coming out of the financial crisis, partly because of the industrialization of China and India.

“I think all the factors are certainly there to look at higher demand, and that’s going to be reflected in the price of oil,” Dickerson said in an interview.

Jen Snyder, head of North American gas research at consulting firm Wood Mackenzie Ltd., said she expects gas demand to recover at a slower pace than the economy because of new coal-fueled power plants opening in 2010 and 2011.

Even as service costs come down, making more projects look profitable on paper, some producers are too starved for cash or credit to ramp up drilling, said Wicklund of Carlson Capital.

“This is like all of a sudden, the price of Porsches has come down, but you lost your job,” Wicklund said. “It’s like, ‘Oh, well that’s great that service or Porsche costs have come down, but I still can’t afford it.’”

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net.

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Australian Dollar Slips Before Jobless Data; N.Z. Dollar Lower

By Candice Zachariahs

April 9 (Bloomberg) -- The Australian dollar declined for a fifth day, its longest losing streak since January, before a report forecast to show the nation’s unemployment rate rose to a five-year high. New Zealand’s currency also weakened.

The currencies also fell as Fitch Ratings lowered Ireland’s top AAA credit rating by one level and the U.K. economy shrank 1.5 percent in the first quarter, signaling Europe’s economic woes are deepening. Australia’s jobless rate climbed for a third month to 5.4 percent, the most since 2004, according to the median estimate of 22 economists surveyed by Bloomberg News.

“With the Australian dollar holding above 70 U.S. cents for the fifth consecutive trading session, today’s numbers could be a real test,” wrote Matthew Strauss, senior currency trader at RBC Capital Markets in Toronto, in a note to clients. “A break below this level could indicate a reversal in the month- long rally.”

Australia’s currency slipped 0.1 percent to 70.95 U.S. cents as of 8:03 a.m. in Sydney from 71.01 cents late in New York yesterday. The currency fell 0.1 percent to 70.78 yen. The Australian dollar will find buyers at 69.81 cents, Strauss said.

New Zealand’s dollar declined 0.2 percent to 57.89 U.S. cents from 57.97 in New York yesterday and bought 57.74 yen.

New Zealand’s currency declined after a report showed house prices fell 9.4 percent in March from a year earlier. The drop in average prices was the biggest since the series began in 2005, according to Quotable Value New Zealand Ltd., the Wellington- based government valuation agency. Prices have been dropping since July as the nation struggles to emerge from five quarters of contraction.

The South Pacific nations’ dollars both weakened after minutes of the Federal Reserve’s March meeting showed officials feared the U.S. economy, the world’s largest, might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net

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Euro, Pound May Fall as Economic Reports Show Deeper Recession

By Oliver Biggadike and Ye Xie

April 9 (Bloomberg) -- The euro and pound may fall for a third day versus the yen after economic reports indicated the recession in Germany and the U.K. is deepening.

Mexico’s peso rose yesterday to a three-month high versus the greenback on the prospect of increased dollar inflows as the nation taps a credit line with the International Monetary Fund. Ireland’s top AAA credit rating was lowered one level by Fitch Ratings as economic turmoil fueled a surge in borrowing.

“Europe is lagging,” said Meg Browne, a currency strategist at Brown Brothers Harriman & Co. in New York. “We are telling investors to sell the euro rallies.”

The euro traded at 132.47 yen at 6:15 a.m. in Tokyo, after declining 0.6 percent yesterday. Sterling traded at 146.77 against Japan’s currency after falling 0.8 percent and fetched $1.4684 following a 0.3 percent decline. The dollar was at 99.75 yen, having lost 0.7 percent.

Some analysts said gains in the yen may be tempered before a Japanese report today forecast to show machinery orders, an indicator of capital investment, decreased for a fifth month. Orders dropped 6.9 percent in February from the previous month, according to a Bloomberg News survey before the report.

“Japan’s economy is in bad shape,” said Ryohei Muramatsu, manager of Group Treasury Asia in Tokyo at Commerzbank AG, Germany’s second-largest lender. “There is no reason to buy the yen right now.”

Weaker Pound

The pound weakened versus the yen and dollar as the National Institute of Economic and Social Research said yesterday the U.K.’s economy contracted 1.5 percent in the first three months of the year following a decline in the fourth quarter. German exports dropped for a fifth month in February, falling 0.7 percent, the Federal Statistics Office said.

Ireland’s rating was dropped to AA+ with a “negative” outlook, indicating Fitch is more likely to lower the classification again than raise it or leave it unchanged. Ireland received the top rating in December 1998.

Standard & Poor’s lowered Ireland’s rating one step to AA+ on March 30. Moody’s Investors Service has placed Ireland’s rating up for review.

Mexico’s peso gained yesterday as much as 1.1 percent to 13.3212, the strongest level since January, after the central bank said last week it would seek a $47 billion credit line with the IMF.

Fed’s Minutes

The dollar remained lower versus the yen yesterday as minutes of the Federal Reserve’s March meeting showed policy makers feared the economy might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending.

That outlook prompted the Federal Open Market Committee in a unanimous vote to boost its open-market purchases of government and mortgage bonds by $1.15 trillion, continuing its unprecedented increase in money supplied to the economy.

The yen increased 1.8 percent to 12.04 versus Sweden’s krona and 0.5 percent to 80.74 against the Canadian dollar on speculation Japanese investors will reduce purchases of higher- yielding assets overseas.

“The recovery that we’re seeing in equity markets and the improvement in risk appetite is maybe a little premature,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “A consumer recovery would be necessary for an economic recovery to be sustained.”

Bed Bath & Beyond Inc. reported profit higher than some analysts estimated, pushing the shares up as much as 24 percent yesterday. The largest U.S. home-furnishings retailer said on April 7 that net income declined 18 percent in the three months ended Feb. 28.

Kazakhstan plans to tighten control over the country’s unofficial foreign-exchange market and the rates at which street traders buy and sell the tenge, the central bank told Bloomberg in an e-mail message. The former Soviet republic devalued its currency two months ago as economic growth slowed.

To contact the reporters on this story: Oliver Biggadike in New York at obiggadike@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net

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Oil Rises After Government Shows Smaller Supply Gain Than API

By Mark Shenk

April 9 (Bloomberg) -- Crude oil rose for a second day, extending yesterday’s gains that followed a U.S. government report showing a smaller inventory gain than industry figures.

Supplies increased 1.65 million barrels to 361.1 million last week, the highest since July 1993, the Energy Department said. Stockpiles were forecast to climb by 1.5 million barrels, according to a Bloomberg News survey. The industry- funded American Petroleum Institute said April 7 stockpiles jumped 6.94 million barrels to the highest since 1990.

The inventory build “wasn’t anywhere near as large as in the API report, which is giving the market support,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “It’s hard to be too bullish with inventories approaching a record.”

Crude oil for May delivery rose 69 cents, or 1.4 percent, to $50.07 a barrel on the New York Mercantile Exchange at 8:36 a.m. in Sydney. Yesterday, oil climbed 23 cents, or 0.5 percent, to $49.38 after touching $47.37, the lowest since April 1, before the Energy Department report was released at 10:30 a.m. in Washington. Prices are up 11 percent this year.

Oil supplies increased last week to 364.7 million barrels, according to API’s April 7 report. API and DOE inventory reports have moved in the same direction 75 percent of the time in the past four years.

Overreaction

“We overreact to the API, we sell down to $47.37 overnight, we get to the bottom of the trading range and there’s nothing to sustain the selling,” said Tom Knight, trading director at Truman Arnold Cos. in Texarkana, Texas. “But there’s not a fundamental reason for us to be trading at $51 in the first place.”

API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The Energy Department requires reports to be filed for its survey.

The API and DOE showed inventory gains for each of the past four weeks. The total increase over the period was 19.5 million barrels, according to the institute. The government report tallied a gain of 9.73 million barrels.

“This is very confusing for the market,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “We are looking at two agencies that should be able to provide this service. Something is wrong in the way at least one of them collects data.”

Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude oil is delivered, fell 878,000 barrels to 29.98 million last week, the lowest since the week ended Dec. 26. Supplies in the week ended Feb. 6 were the highest since at least April 2004, when the Energy Department began keeping records for the location.

Fuel Stockpiles

Gasoline stockpiles rose 656,000 barrels to 217.4 million in the week ended April 3, according to the department. Distillate fuels, a category that includes heating oil and diesel, fell 3.35 million barrels to 140.8 million.

Gasoline futures for May delivery fell 2.08 cents, or 1.4 percent, to settle at $1.4396 a gallon in New York. Heating oil for May delivery increased 0.79 cent, or 0.6 percent, to end the session at $1.3982 a gallon.

Total daily fuel demand averaged over the past four weeks was 18.9 million barrels, down 4.4 percent from a year earlier, the report showed. It was the lowest consumption for a four-week period since October.

Global oil demand falls to an annual low during the second quarter as refineries shut to perform maintenance after the Northern Hemisphere winter.

“We are in an environment of surplus supply, but that will change during the second half of the year,” Francisco Blanch, head of global commodity research at Merrill Lynch & Co. in London, said in an interview. “This is the weakest seasonal demand period, so you have a lot of barrels searching for a home.”

Brent crude oil for May settlement increased 37 cents, or 0.7 percent, to end the session at $51.59 a barrel on London’s ICE Futures Europe exchange yesterday.

To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net

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Arcandor, BMW, Comdirect, Henkel, TUI: German Equity Preview

By Jann Bettinga

April 9 (Bloomberg) -- The following is a list of companies whose shares may have unusual price changes in Germany. Stock symbols are in parentheses, and share prices are from the previous close. The DAX Index rose 0.8 percent to 4,357.92 yesterday.

Arcandor AG (ARO GY): The retail company is considering taking state aid, the Financial Times Deutschland reported. Chief Executive Officer Karl-Gerhard Eick has discussed state guarantees in the “upper triple-digit” million-euro range with high-ranking members of Germany’s federal government, the newspaper said. The shares fell 15 percent to 1.64 euros.

Bayerische Motoren Werke AG (BMW GY): The world’s largest maker of luxury autos will remain an independent company and isn’t seeking a global alliance, the president of its U.S. unit said. The shares rose 6.2 percent to 25.385 euros.

Comdirect Bank AG (COM GY): The online broker agreed to buy European Bank for Fund Services, or Ebase, for 24.9 million euros ($33.1 million). The stock fell 1.2 percent to 5.71 euros.

Henkel AG & Co. (HEN3 GY): The maker of Persil detergent said first-quarter operating profit dropped 33 percent on declining demand for its adhesives business in the global recession. The stock advanced 0.7 percent to 21.82 euros.

Hochtief AG (HOT GY): The builder is withdrawing from a group to expand and operate the A5 highway in Germany, the Financial Times Deutschland newspaper reported. The shares rose 2.5 percent to 31.23 euros.

Deutsche Lufthansa AG (LHA GY): Europe’s second-biggest airline is scheduled to report March traffic figures. The shares climbed 2.7 percent to 9.195 euros.

TUI AG (TUI1 GY): Shareholder John Fredriksen proposed that supervisory board Chairman Juergen Krumnow be removed from the post at next month’s annual general meeting, a year after his first attempt failed. The shares rose 0.3 percent to 4.70 euros.

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

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New Zealand Stocks: New Zealand Oil, Sky Network Television

By Shani Raja

April 9 (Bloomberg) -- New Zealand’s NZX 50 Index fell for a third day, slipping 0.2 percent to 2,562.97 at 10:35 a.m. in Wellington, poised for the lowest close since March 16. The following were among the most active shares in the New Zealand market. Stock symbols are in parentheses after company names.

New Zealand Oil & Gas Ltd. (NZO NZ), the country’s biggest publicly traded explorer, advanced 0.7 percent to NZ$1.38, erasing yesterday’s decline. Crude oil rose for the first time in four days yesterday after a U.S. government report showed a smaller inventory gain than that predicted in an industry report.

Sky Network Television Ltd. (SKT NZ), New Zealand’s largest pay-television operator, gained 1 percent to NZ$3.89, the benchmark index’s third-best performance.

Sky will be the host broadcaster of the 2011 Rugby World Cup, delivering all 48 matches live and providing a base for other licensed broadcasters, Rugby World Cup Ltd. said in a statement posted on its Web site.

To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net.

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