Crude Oil Extends Gains as Rate Cuts May Stimulate Fuel Demand

By Mark Shenk and Samantha Zee

Oct. 30 (Bloomberg) -- Crude oil extended gains in New York amid signs that central bank interest-rate cuts may help stimulate fuel demand.

Oil advanced, after rising 7.6 percent yesterday, on forecasts that the U.S. Federal Reserve rate cut will help spur a recovery in the world's biggest fuel-consuming country. China lowered rates and the European Central Bank may reduce them next week. Prices also climbed as the dollar fell the most against the currencies of six major U.S. trading partners since 1998.

``There's renewed optimism'' in the wake of the rate cut, said Antoine Halff, head of energy research at Newedge USA LLC in New York. ``It shouldn't be a surprise that there's a correction after the very steep drop in prices over the last month.''

Crude oil for December delivery rose as much as 91 cents, or 1.4 percent, to $68.41 a barrel. It was trading at $68 at 7:45 a.m. Singapore time on the New York Mercantile Exchange. Yesterday, crude oil jumped $4.77 to settle at $67.50 a barrel, the biggest gain since Sept. 22.

Oil prices, which have tumbled 54 percent since reaching a record $147.27 on July 11, are down 28 percent from a year ago.

The Federal Reserve lowered its benchmark interest rate by half a point to 1 percent yesterday, matching a half-century low.

``Energy markets are moving on exogenous factors, such as equity and currency markets, not the energy fundamentals,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York.

`Bold Measures'

The euro rose against the dollar after Chancellor Angela Merkel said Germany will announce ``bold'' measures to bolster the economy. The Canadian dollar gained the most in at least 37 years as its U.S. counterpart weakened and commodities climbed.

ICE Futures' Dollar Index, which tracks the currency against the euro, the yen, the pound, the Canadian dollar, the Swiss franc and the Swedish krona, fell 2.3 percent, the biggest decline since 1998.

Investors often purchase crude oil and other dollar-priced commodities when the U.S. currency drops because of their use as an inflation hedge.

U.S. inventories of crude oil and distillate fuel, a category that includes heating oil and diesel, rose last week, an Energy Department report yesterday showed.

Crude oil stockpiles climbed 493,000 barrels to 311.9 million barrels in the week ended Oct. 24, the department said. A 1.55 million-barrel gain was forecast, according to the median of 12 analyst estimates before the report.

Fuel Stockpiles

Distillate inventories rose 2.33 million barrels to 126.6 million barrels last week. Analysts forecast that supplies increased 1.05 million barrels. Gasoline stockpiles dropped 1.51 million barrels to 195 million barrels, the first decline in five weeks. A 1.5 million-barrel gain was forecast.

U.S. fuel demand during the past four weeks averaged 18.9 million barrels a day, down 7.8 percent from a year ago, the report showed. Gasoline consumption was down 3.4 percent at 8.9 million barrels a day over the period.

Demand for residual fuel, a category that includes heavy fuel oil, averaged 436,000 barrels a day during the period, down 31 percent from a year earlier. Some manufacturers and utilities can switch between residual fuel and natural gas depending on costs. The department measures shipments from refineries, pipelines and terminals to calculate demand.

OPEC Action

The Organization of Petroleum Exporting Countries will ``probably'' cut crude-output quotas a second time to avoid the growth of inventories, Venezuelan Oil Minister Rafael Ramirez said in an interview on state television.

OPEC reduced its production target by 1.5 million barrels a day after meeting Oct. 24. Ramirez said the group would analyze the reaction of the oil market between that cut and a planned Dec. 17 meeting.

Russia, the world's second-biggest oil producer after Saudi Arabia, should consider joining OPEC, Leonid Fedun, deputy chief executive officer of OAO Lukoil, told a conference in Moscow yesterday. Lukoil is Russia's second-biggest oil producer.

``We will eventually return to trading on the supply-demand fundamentals,'' said Steve Maloney, a risk-management consultant for Stamford, Connecticut-based Towers Perrin. ``As demand returns, supply will tighten and put upward pressure on prices.''

To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net; Samantha Zee in Los Angeles at szee@bloomberg.net.

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Japan Stocks Rise a 3rd Day as Commodities Rally, Yen Weakens

By Masaki Kondo

Oct. 30 (Bloomberg) -- Japanese stocks rose a third day after commodity prices advanced, while a weakening yen boosted the earnings outlook for companies dependent on overseas demand.

Inpex Corp., the nation's largest oil explorer, jumped 6.2 percent. Toyota Motor Corp., Japan's No. 1 carmaker, added 3.7 percent, while subsidiary Hino Motors Ltd. dived 8.1 percent after slashing its earnings target. Softbank Corp., Japan's No. 3 mobile carrier, surged by its daily limit of 13 percent after forecasting earnings will grow by a quarter next year.

The Nikkei 225 Stock Average climbed 227.40, or 2.8 percent, to 8,439.30 as of 10:01 a.m. in Tokyo. The broader Topix index rose 16.68, or 2 percent, to 847.00. The Nikkei surged 7.7 percent yesterday, extending its two-day gain to 15 percent.

``Currency stabilization will lend some resilience to Japanese stocks,'' Mitsushige Akino, who oversees about $468 million at Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television.

Crude oil for December delivery climbed 7.6 percent to $67.50 a barrel in New York yesterday, the steepest jump in a month. A $1 gain in a barrel of crude boosts Inpex's annual profit by 2.2 billion yen ($22 million), the company said in May.

Inpex climbed 6.2 percent to 530,000 yen. Closest rival Japan Petroleum Exploration Co. added 3.5 percent to 3,890 yen. Mitsui & Co., a trading company that gets more than half its profit from commodities, rose 9.5 percent to 914 yen.

Toyota, which gets three quarters of its sales overseas, added 3.7 percent to 3,630 yen, while smaller rival Mazda Motor Corp. advanced 6.1 percent to 210 yen. Hino, Japan's biggest maker of heavy-duty trucks, declined 8.1 percent to 226 yen.

Lower Forecasts

Hino yesterday cut its full-year net income forecast by 91 percent as domestic sales fell. Of 183 Japanese companies that have reported first-half earnings so far, 53 percent lowered profit targets, according to Shinko Research Institute Co.

The Japanese currency weakened against the dollar to as much as 98.56 from 96.92 at the close of stock trading in Tokyo yesterday, while depreciating against the euro to as weak as 128.96 from 123.29. A strong yen cuts the value of overseas sales of Japanese businesses, and has led companies including Canon Inc. and Sony Corp. to reduce profit targets in the past week.

Japan Prime Minister Taro Aso will today announce economic stimulus measures worth 5 trillion yen, the Yomiuri newspaper reported, without saying where it got the information. The package will include 2 trillion yen in assistance for households, the report said.

Share Buyback

Softbank leapt 13 percent to 850 yen, brining a two-day gain to 31 percent. The company yesterday said operating profit will probably climb to 420 billion yen in the next fiscal year as it expects to boost user spending on wireless services. Goldman Sachs Group Inc. and Nomura Securities Co. raised their ratings on the company.

Komatsu Ltd., the world's second-biggest maker of earthmoving equipment, wasn't traded as orders to buy outnumbered those to sell. The company yesterday lowered its annual earnings forecast by a tenth and said it would spend as much as 30 billion yen to buy back shares.

``The buyback clearly shows management sees the stock as undervalued at the current level,'' said Kunio Sakaida, an analyst for Goldman, wrote in a report today. He maintained his neutral rating on Komatsu.

Nikkei futures expiring in December added 1.7 percent to 8,440 in Osaka and gained 1.8 percent to 8,430 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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Asian Stocks Gain for 3rd Day on Rate Cuts, Commodities Rally

By Kyung Bok Cho

Oct. 30 (Bloomberg) -- Asian stocks rose after China, Taiwan and the U.S. cut interest rates to alleviate a credit freeze and boost growth, spurring a rally in commodity prices.

Posco gained 8.5 percent and Hyundai Heavy Industries Co. jumped 11 percent in Seoul after the U.S. Federal Reserve included emerging markets for the first time in a liquidity-swap agreement. BHP Billiton Ltd. advanced after oil jumped and copper posted its biggest gain in two years. Toyota Motor Corp. added 4 percent as a weaker yen boosted its earnings outlook.

The MSCI Asia Pacific Index added 1.9 percent to 82.23 as of 9:22 a.m. in Tokyo. Today's advance pared the Asian measure's monthly loss to 23 percent. The gauge is still on course to complete the worst month since its creation in December 1987.

Japan's Nikkei 225 Stock Average climbed 3.3 percent to 8,478.81. South Korea's Kospi index gained as much as 7.4 percent, while a surge in index futures triggered a halt in program trading.

U.S. stocks declined yesterday, with the Standard & Poor's 500 Index erasing a 3.1 percent advance in the final 12 minutes on concern lower interest rates won't stem a recession. Futures on the U.S. benchmark index rose 0.7 percent.

Central banks across the globe are trying to curb an economic slowdown as the financial crisis weighs on consumer sentiment and business spending. The Fed and the People's Bank of China yesterday cut benchmark interest rates to stimulate demand, while Taiwan's central bank today lowered its benchmark rate.

Liquidity, Stimulus

The Fed said yesterday it agreed to provide $30 billion to the central banks of South Korea, Singapore, Brazil and Mexico, ``four large systemically important economies,'' in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding.''

Japan's Prime Minister Taro Aso will announce economic stimulus measures worth 5 trillion yen ($51 billion) today, the Yomiuri newspaper said. The package will include 2 trillion yen in assistance for households, according to the report.

Copper futures for December delivery surged 12 percent in New York yesterday, the steepest jump in two years, while crude oil for December delivery climbed 7.6 percent to $67.50 a barrel.

To contact the reporter for this story: Kyung Bok Cho in Seoul at kcho7@bloomberg.net

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Australia Stocks: BHP, Centennial, Gindalbie, Gunns, Woodside

By Ian Sayson

Oct. 30 (Bloomberg) -- The S&P/ASX 200 Index added 71.60 points, or 1.9 percent, to 3,917.20 as of 10:45 a.m. in Sydney, after advancing 1.3 percent yesterday from its lowest close in four years. The S&P/ASX 200 Index futures contract due in December climbed 2.1 percent to 3,930. The All Ordinaries Index gained 69.80, or 1.8 percent, to 3,875.60.

The following is a list of companies whose shares are among the most active in Australian trading. Stocks symbols are in parentheses after company names.

Mining stocks: BHP Billiton Ltd. (BHP AU), the world's largest mining company, climbed for the fourth day, advancing A$1, or 3.8 percent, to A$27.30, after a measure of metal prices advanced the most in more than eight years. Rio Tinto Group (RIO AU), the world's third biggest, climbed A$3.97, or 5.6 percent, to A$74.75. Fortescue Metals Group (FMG AU), Australia's third- biggest iron ore producer, gained 10 cents, or 3.3 percent, to A$3.15.

A measure of six metals traded on the London Metal Exchange rose for a third day, adding 8.6 percent, with copper up 13 percent and nickel rising 14 percent. It is the measure's biggest gain, according to data that goes back up to April 10, 2000.

Oil companies: Woodside Petroleum Ltd. (WPL AU), Australia's second-biggest oil producer, rose A$1.70, or 4.4 percent, to A$39.95 after crude prices advanced the most in a month. Santos Ltd. (STO AU), the third-biggest oil producer, climbed 97 cents, or 7.6 percent, to A$13.67.

Crude oil climbed more than $4 a barrel yesterday to $67.50 a barrel, its sharpest gain since Sept. 22, amid signs that central bank interest-rate cuts may help revive fuel demand. Oil was at $67.75 a barrel as of 7:14 a.m. in Singapore.

AGL Energy Ltd. (AGK AU), Australia's biggest power and gas retailer, added 25 cents, or 1.8 percent, to A$14. The company said today it agreed to sell its oil and gas interests in Papua New Guinea, including a 3.6 percent stake in a planned gas export project, for $800 million. Oil Search Ltd. (OSH AU), Papua New Guinea's biggest oil producer and one the companies that hold pre-emptive rights over AGL's stake, climbed 74 cents, or 20 percent, to A$4.45.

Centennial Coal Co. (CEY AU), Australia's fourth-largest coal producer, gained 15 cents, or 5 percent, to A$3.18 after the company said its expects profitability to increase in 2009, driven by overseas demand and ``improved'' exchange rates.

Gindalbie Metals Ltd. (GBG AU), a partner of Anshan Iron & Steel Group in an Australian iron ore mine, jumped 3 cents, or 8.7 percent, to 37.5 Australian cents, heading for its biggest gain since Oct. 14. The worst credit freeze since the 1930s will not stop the development of the A$1.8 billion ($1.2 billion) project, Gindalbie said.

Gunns Ltd. (GNS AU), which plans a A$2 billion wood pulp mill in Australia's Tasmania state, advanced 7.5 cents, or 6.9 percent, to A$1.16 after the company said overseas demand for woodchip remains positive and that talks are continuing on the pulp mill's financing.

Mt. Gibson Iron Ltd. (MGX AU), an Australian iron ore producer, sank 12 percent to 40.5 Australian cents when it last traded on Oct. 22. The company is seeking to sell shares to investors in China, Australia and the U.K. as the credit crunch slows sales and squeezes financing, two people familiar with the deal said.

Newcrest Mining Ltd. (NCM AU), Australia's largest gold mining company, added 73 cents, or 3.9 percent, to A$19.43 after company Chairman Donald Mercer said its cash flow will be able to fund new mine developments including its Cadia East project.

To contact the reporter on this story: Ian C. Sayson in Manila at isayson@bloomberg.net.

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U.S. Stocks Decline as Fed Fails to Ease Concern About Economy

By Eric Martin

Oct. 29 (Bloomberg) -- U.S. stocks dropped as the Standard & Poor's 500 Index erased a 3.1 percent rally in the final 12 minutes of trading on concern that the Federal Reserve's sixth interest-rate cut this year isn't enough to rescue the economy.

Intel Corp., JPMorgan Chase & Co. and Citigroup Inc. fell more than 4 percent. The central bank lowered its rate target by half a point to 1 percent, a level matching a half-century low, and said ``downside risks to growth remain.''

``The Fed was saying that a recession is in place and that a global recession is unfolding,'' said Quincy Krosby, who helps manage $416 billion as chief investment strategist at Hartford in Hartford, Connecticut. ``There was nothing in the statement suggesting anything different than what every economist has acknowledged, which is that there's a global slowdown, the consumer is under pressure and businesses aren't spending.''

The Standard & Poor's 500 Index lost 10.42 points, or 1.1 percent, to 930.09, one day after surging 11 percent. The Dow Jones Industrial Average slumped 74.16, or 0.8 percent, to 8,990.96. Three stocks gained for every two that fell on the New York Stock Exchange.

The S&P 500 is down 37 percent in 2008 and more than 20 percent in October. The Fed has cut its benchmark rate from 5.25 percent in the past 13 months and created six lending programs channeling more than $1 trillion into the financial system. The Commerce Department probably will report tomorrow that the economy shrank at a 0.5 percent annual rate in the third quarter, the most since the 2001 recession, economists predict.

GE Concern

Some traders attributed the market's late-day retreat to a report that General Electric Co. Chief Executive Officer Jeffrey Immelt said he's asking managers to match this year's profit in 2009 even if revenue declines. The comments were published by Dow Jones Newswires at the same time the market turned lower. GE closed down 1.5 percent to $19.20 after falling as much as 4.1 percent.

``Immelt made the comment that even if revenue went down 10 to 15 percent next year he hopes to keep their profits the same as 2008 levels,'' said Kevin Fischer, head of block execution at Interactive Brokers Group Inc. in Greenwich, Connecticut. ``That's what tanked us at the close.''

GE spokesman Russell Wilkerson said the initial comments were taken out of context and that Immelt was not making any kind of forecast about 2009.

Intel, the world's biggest chipmaker, slumped 5.8 percent to $14.94 after Bank of America Corp. said it expects sales in the semiconductor industry to fall 5 percent next year as economic growth falters.

`Crazy as I've Ever Seen'

JPMorgan, the largest bank by market value, slid 5 percent to $35.71. Citigroup slumped 4.2 percent to $12.91.

The S&P 500 Financials Index, which rallied as much as 3.1 percent after the Fed's announcement, reversed that gain and fell 2.9 percent in the last 10 minutes of trading.

``The last 10 minutes today were as crazy as I've ever seen,'' said Craig Hodges, a fund manager at Dallas-based Hodges Capital Management Inc., which oversees $1 billion. ``These stocks are trading like there's no tomorrow, like there's no good economy ever coming back.''

Johnson & Johnson lost $2.66 to $61.53. The stock was cut to ``neutral'' from ``overweight'' at JPMorgan Chase & Co., which said 2009 will be a ``tough year'' as two of the company's three largest drugs face generic competition.

Sealed Air Corp. dropped the most in the S&P 500, falling 22 percent to $16.36. The maker of Bubble Wrap shipping products reported third-quarter profit that trailed analysts' estimates because of higher costs for plastic resins.

Earnings Watch

Aetna Inc. slid $2.25, or 8.1 percent, to $25.55. The third-largest U.S. health insurer reduced its forecast for the year and said third-quarter profit fell 44 percent as the company booked investment losses tied to the global financial crisis.

Companies in the S&P 500 that reported third-quarter profit so far posted a 17 percent decline on average, according to data compiled by Bloomberg. A drop for the entire index would mark the fifth straight quarterly slide, the longest stretch since the dot-com bubble burst at the start of this decade.

General Motors Corp. rallied 8.2 percent to $6.76 for the top gain in the Dow. The automaker resolved ``major issues'' in merger talks with Cerberus Capital Management LP's Chrysler LLC, Reuters reported, citing unidentified people.

Commodity producers posted the steepest gains among 10 industry groups in the S&P 500 as oil advanced more than $4 a barrel and metal prices increased.

`I'm Buying Stocks'

Schlumberger Ltd., the world's biggest oilfield contractor, jumped 6 percent to $50.88. Chevron Corp., the second-biggest U.S. energy company, rose 1.4 percent to $71. The S&P 500 Energy Index jumped 2.3 percent, adding to yesterday's 12 percent rally.

Alcoa Inc., the largest U.S. aluminum producer, climbed 3.4 percent to $11.15 after rallying 19 percent yesterday, a day after its price-to-earnings valuation slid to the lowest on record.

``I'm buying stocks every day with the cash that comes in,'' said Jerome Dodson, a fund manager who oversees $1.6 billion at San Francisco-based Parnassus Investments. ``We think stocks are at a very reasonable valuation. Virtually everything you buy today is going to be higher a year from now.''

Office Depot Inc. rose 11 percent to $2.10 after the world's second-largest office-supplies retailer said it will review its assets and may close North American stores.

`More Painful'

Benchmark indexes swung between gains and losses before the Fed decision as a decline in orders for U.S. durable goods excluding transportation offset prospects for lower borrowing costs. The London interbank offered rate, or Libor, for three- month dollar loans dropped 5 basis points to 3.42 percent, while central banks in China and Norway lowered interest rates.

``We are at the beginning of a very severe U.S. recession; it's going to be much more painful,'' New York University professor Nouriel Roubini said in an interview with Bloomberg Television. ``There are still significant downside risks to equity markets and credit markets.''

Roubini, who predicted the current financial crisis in 2006, said the S&P 500 may fall as much as 30 percent during a two-year economic contraction. The Fed will probably cut its interest-rate target close to zero during that time, he said.

U.S. indexes soared yesterday with the Dow average jumping 11 percent, the sixth-best performance in the 112-year-old measure's history, as the cheapest valuations in 23 years lured investors and increased commercial paper sales signaled credit markets are thawing. The S&P 500 also added 11 percent, trimming its monthly decline to 19 percent and its yearly loss to 36 percent.

October Slump

Equities around the world tumbled this month, wiping out more than $12 trillion of market value, after money markets froze, banks' credit losses grew and economic growth weakened. All 48 of the developed and emerging markets tracked by MSCI Inc. have declined in 2008, with 20 losing at least half.

Investors speculating on a rebound in U.S. stocks may have a better chance in the first year of a Barack Obama presidency than a John McCain administration, if election history is any guide.

Since 1900, the Dow Average rose 9.8 percent in the 12 months after the Democratic Party captured the White House, based on the median change following the election of seven Democrats from Woodrow Wilson to Bill Clinton. Among newly elected Republicans, five -- including Herbert Hoover, Richard Nixon and George W. Bush -- preceded stock-market declines, with a median retreat of 2.5 percent for all 10, Bloomberg data show.

Stocks gained in Europe and Asia for a second day as falling credit costs spurred a rally in financial shares, while higher commodity prices pushed up oil and metals producers.

Today's declines in the U.S. came on the anniversary of the second day of the stock-market crash of 1929.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

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Treasury, FDIC Said to Craft Plan to Curb Foreclosure

By Alison Vekshin and Robert Schmidt

Oct. 29 (Bloomberg) -- The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a plan that may provide about $500 billion in government guarantees for troubled mortgages, according to people familiar with the matter.

The program, which might help several million homeowners refinance into affordable loans, would require lenders to restructure mortgages based on a borrower's ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates, the people said.

FDIC Chairman Sheila Bair discussed the program today at an international deposit insurers conference in Arlington, Virginia, without offering details. ``A framework is needed to modify loans on a scale large enough to have a major impact,'' Bair said.

The action would be the government's most aggressive yet on behalf of homeowners since the subprime crisis began. The Bush administration until now has relied mainly on a voluntary, industry-led alliance to spur loan modifications and avert foreclosures.

Multiple options to stem foreclosures are being considered by the agencies and a final decision on a ``particular approach'' hasn't been made, said Jennifer Zuccarelli, a Treasury spokeswoman. ``The administration is looking at ways to reduce foreclosures, and that process is ongoing.''

Bair, whose Washington-based agency insures deposits at U.S. banks, is pressing the mortgage industry to modify more loans to curb foreclosures, which rose to the highest on record in the third quarter led by California, Florida, Arizona, Ohio, Michigan and Nevada, according to California-based RealtyTrac.

Incentives

The FDIC and Treasury program would provide incentives to mortgage lenders and loan-servicing companies to change their loans, ``along with a framework for modifying them systematically into long-term and sustainable, affordable mortgages,'' Bair said.

The plan would apply to banks, savings and loans, hedge funds and other mortgage holders, the people said. While it would provide guarantees for about $500 billion in mortgages, it would cost about $50 billion that would be covered by the $700 billion bailout package enacted this month.

The government is also considering guaranteeing a second home loan, such as a home-equity line of credit, to assure mortgage holders they wouldn't lose money when they change loan terms, the people said. A guarantee in effect would put taxpayers on the hook for the loan if borrowers default.

The FDIC would manage the program, the people said, adding that details are still being worked out and might change.

`Productive Conversations'

While the FDIC has had ``productive conversations'' with Treasury on using loan guarantees, ``it would be premature to speculate about any final framework or parameters of a potential program,'' FDIC spokesman Andrew Gray said in an e-mailed statement.

Bair last week said the rescue plan lets the government set standards for mortgage modifications and offer loan guarantees for mortgages that meet the standards.

``Loan guarantees could be used as an incentive for servicers to modify loans,'' Bair said in her Oct. 23 testimony before the Senate Banking Committee. ``The FDIC is working closely and creatively with Treasury to realize the potential benefits of this authority.''

To contact the reporters on this story: Alison Vekshin in Washington at avekshin@bloomberg.netRobert Schmidt in Washington at rschmidt5@bloomberg.net;

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Natural Gas Gains as Drop in Interest Rates May Boost Economy

By Reg Curren

Oct. 29 (Bloomberg) -- Natural gas futures in New York rose the most in six weeks on speculation a cut in interest rates will spur the economy and demand for the heating and industrial fuel.

Gas gained along with crude oil after the Federal Reserve reduced its benchmark interest rate to 1 percent, matching a half-century low, to head off an economic slowdown that may be the worst since World War II. About 25 percent of U.S. natural gas demand comes from industrial users.

``The rate cut is going to take pressure off mortgage holders, and that's one more bit of relief to the consumer,'' said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. ``It's going to free up money.''

Natural gas for November delivery advanced 28.3 cents, or 4.6 percent, to settle at $6.469 per million British thermal units at 3:19 p.m. on the New York Mercantile Exchange. The increase was the biggest in percentage terms since Sept. 17.

The November contract expired today. The more active December futures contract rose 36.2 cents, or 5.6 percent, to $6.778 per million Btu.

Crude oil for December delivery gained $4.77, or 7.6 percent, to $67.50 a barrel on the New York exchange.

Lower temperatures this week in the Northeast will reduce the amount of gas available to go into storage as demand for the fuel to run furnaces increases. About 52 percent of U.S. homes rely on gas for heat, according to the U.S. Energy Department.

``Some areas of the Northeast had snow, so there is some trading of what's outside your door,'' said Rose.

Colder Weather

The temperature in New York tonight is expected to dip to 37 degrees Fahrenheit (3 Celsius), the National Weather Service said today. The normal low for this time of year is 45 degrees.

``There were a lot of bears in the market and they were caught off guard by the weather in the Northeast,'' said Stephen Schork, president of Schork Group Inc. of Villanova, Pennsylvania. ``So they had to cover shorts.''

A speculative short is a bet that prices will decline. Shorts outnumbered long positions by 172,132 contracts on the New York Mercantile Exchange in the week ended Oct. 21, the Washington-based Commodity Futures Trading Commission said on Oct. 24.

U.S. inventories of gas probably increased 40 billion cubic feet in the week ended Oct. 24, according to the median of 14 analyst estimates compiled by Bloomberg. The average change over the past five years is an increase of 42 billion cubic feet, according to U.S. Energy Department data.

The department is scheduled to release its next supply report tomorrow at 10:35 a.m. in Washington.

U.S. Stockpiles

Natural gas stockpiles in last week's report were already higher than the five-year average of 3.327 trillion cubic feet that's typically on hand at the start of the heating season in early November. Supplies trailed last year's record amount of 3.545 trillion cubic feet.

Futures prices at $6 per million Btu, which happened earlier this week, lessen the incentive for energy companies to explore for and develop new gas reserves, said Peter Linder, an analyst and senior adviser at DeltaOne Energy Fund in Calgary.

``At that price about 80 percent of the gas in North America becomes uneconomical,'' he said. ``You're seeing a lot of gas wells shut, including EnCana announcing things, and a slowdown in drilling.''

EnCana Corp., Canada's largest natural-gas producer, said last week it shut wells that deliver 50 million cubic feet a day in Wyoming as a supply glut in the U.S. Rocky Mountains depressed prices.

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

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Nexen Profit More Than Doubles; Fischer to Retire

By Jordan Burke

Oct. 29 (Bloomberg) -- Nexen Inc., the Canadian oil and natural-gas producer with some Gulf of Mexico fields still shut from Hurricane Ike, said third-quarter profit more than doubled on higher crude prices. Chief Executive Officer Charlie Fischer will retire, the company also said.

Net income rose to C$886 million ($703.5 million), or C$1.66 per share, up from C$403 million, or 75 cents, a year earlier, the Calgary-based company said today in a statement. Nexen was expected to earn $1.29 per share, the average of four analysts estimates compiled by Bloomberg. Revenue increased 40 percent to C$2.34 billion.

Fischer, who will retire at the end of the year, will be replaced by Marvin Romanow, who has been finance chief since 1998.

``I'm not sure with the change in CEO right now if there are going to be any major changes that can address problems in the past given that it's not an outsider,'' said Philip Skolnick, an analyst at Genuity Capital Markets in Toronto, who has a ``hold'' rating on the shares.

The company benefited from a ``one-time reorganization related tax deduction in the U.K., but my expectations is it's not indicative of the potential going forward,'' he said.

Nexen jumped about 14 percent, or C$2.35, to C$18.60 on the Toronto Stock Exchange. The stock has declined 42 percent this year.

Oil, Gas Production

Oil futures traded in New York soared to a record above $147 a barrel in the third quarter, up 57 percent from the previous year. Natural-gas futures averaged $9 per million British thermal units, up 44 percent.

Oil production before royalties in the quarter fell 4.6 percent to 212,400 barrels a day following damage from Hurricane Ike. The company's oil sold for C$115.56 a barrel, up 52 percent.

Gas output before royalties dropped 3.1 percent to 220 million cubic feet a day. The home-heating fuel sold for C$8.65 per thousand cubic feet, a gain of 49 percent.

Cash flow from operations during the quarter rose 94 percent to C$1.69 billion.

``In this marketplace, cash is king and we have substantial liquidity,'' Fischer said in the statement. ``We are slowing capital expenditures to build cash during this period of global financial uncertainty and to ensure that the projects we undertake continue to generate attractive full-cycle returns.''

Company Not For Sale

The company hasn't been approached by buyers and isn't for sale, Fischer said on the call. Nexen may use cash to buy assets, he said.

``They are building up, like any other company that has the opportunity to generate cash flow, for opportunities and for the uncertainty,'' Skolnick said. ``That could possibly give them an opportunity at the end of the day, but there are other competitors that are large who have some cash build up that may also be in there to take advantage.''

Nexen, which got 79 percent of its net from oil and gas production last year, has said damage from hurricanes Ike and Gustav in September left production ``minimal'' at some of its Gulf of Mexico fields. The company normally produces the equivalent of about 30,000 barrels a day in the Gulf.

Three deepwater fields were also closed after a third-party processing platform toppled. The Vermillion 321/340 venture suffered damage to some platforms and won't restart until next year, the company has said. The fields usually produce the equivalent of 5,600 barrels of oil a day.

Oil Sands

Fischer, 58, had boosted production to capitalize on soaring oil prices. Nexen and partner Opti Canada Inc. are increasing output of bitumen, an extra-heavy oil, from their C$6.1 billion Long Lake oil-sands project in northern Alberta.

Bitumen production at Long Lake is ramping up and upgrader units are starting, the company said. Nexen previously said it planned to start producing premium synthetic crude oil at Long Lake this month, about 30 days behind schedule following a transformer failure in June.

In 2007, oil accounted for about 85 percent of Nexen's daily output before royalties. The company owns oil and gas wells in North America, the U.K., the Middle East and Africa.

To contact the reporter on this story: Jordan Burke in New York at jburke29@bloomberg.net.

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Argentine Peso Rebounds After Central Bank Offers $1 Billion

By Drew Benson

Oct. 29 (Bloomberg) -- Argentina's peso rebounded from its lowest in almost six years after the central bank offered to buy $1 billion of the local currency to stem a two-week slide sparked by concern the country will default.

The peso rose 0.1 percent to 3.3656 per dollar at 4:50 p.m. New York time after tumbling as much as 1.6 percent earlier to 3.4226. The central bank initially offered to buy pesos at 3.39 per dollar before lowering the rate to 3.37, a bank spokesman said.

The intervention ``set a floor'' for the exchange rate, sparking the rebound, said Fernando Izzo, a currency trader with Buenos Aires-based ABC Mercado de Cambio. ``This market is crazy.'' Total volume a record $1.082 billion, he said.

The central bank bought and later sold back pesos, a bank spokesman said. The bank's net peso purchases on the day totaled about $200 million, he said.

The peso has dropped 5 percent in the past two weeks amid concern President Cristina Fernandez de Kirchner's bid to nationalize some $26 billion of private pension funds is an effort to seize the cash to avert a default. The peso plunged 2.1 percent yesterday, its biggest one-day decline in five years.

Fernandez's nationalization plan needs approval by Congress, which began committee hearings yesterday on the matter. Argentina's debt payments will rise to $21.7 billion next year amid a decline in tax revenue from commodity exports, Morgan Stanley estimates.

`Not Sustainable'

The government released a resolution today that gives the pension funds, known as AFJPs, three days to bring funds invested overseas back into Argentina, a move that may support the peso.

Argentina is dipping into foreign reserves built up during a five-year rally in prices on its wheat, corn and soybean exports. Reserves totaled $46.3 billion yesterday, down from $47.1 billion at the end of September, according to the central bank.

``Using the exchange rate as an anchor implies losing reserves and therefore the policy is not sustainable in the medium term,'' Javier Finkman, an economist with HSBC Bank Argentina in Buenos Aires, said in a report today. The pension fund repatriation plan ``will only buy some time at the current pace of dollarization.''

The yield on Argentina's 5.83 percent peso bonds due in 2033 rose 4 basis points to 21.56 percent, according to Citigroup Inc.'s local unit. The yield on Argentina's 8.28 percent dollar bonds due in 2033 declined 78 basis points to 29.64 percent, according to JPMorgan Chase & Co.

To contact the reporters on this story: Drew Benson in Buenos Aires at Abenson9@bloomberg.net

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Mexico's Currency Rises After Fed Agrees to Provide $30 Billion

By Valerie Rota

Oct. 29 (Bloomberg) -- Mexico's peso rallied after the U.S. Federal Reserve said it agreed to provide the Mexican central bank with $30 billion to boost liquidity amid the worst global financial crisis since the Great Depression.

The peso gained as much as 2.1 percent after the Fed said it authorized temporary swap lines with the central banks of Mexico, Brazil, South Korea and Singapore to increase the supply of dollars in emerging markets. The announcement comes as the International Monetary Fund works on a separate program to provide emergency credit to emerging markets.

``What we are seeing is that there is enough liquidity provided by either the IMF or the Fed for countries that may be facing liquidity shortages in the near term,'' said Alonso Cervera, a Latin America economist with Credit Suisse Group AG in New York. ``That is obviously boosting the Mexican peso.''

The peso advanced 1 percent to 12.9119 per U.S. dollar at 5 p.m. New York time, from 13.0405 yesterday. Its gain today pares its decline this month to 15 percent.

The swap lines will be in place through April 30 and the resources from the agreement will be available for Banco de Mexico to provide liquidity to financial institutions in the country, the Mexican central bank said today. The bank said that it doesn't need to use the facility now.

The IMF today approved an emergency loan program that almost doubles borrowing limits for emerging market countries in a bid to prevent the collapse of developing nations struggling to access international capital markets.

`Volatile Backdrop'

Mexico's peso fell earlier after the Fed, in a statement announcing it cut its key lending rate by a half percentage point to 1 percent, said ``downside risks to growth remain'' in the world's largest economy.

``The peso is going to keep being affected by this volatile backdrop,'' said Rafael Camarena, an economist in Mexico City at Banco Santander SA. ``Its very subject to economic data that comes out.''

Mexico's central bank today cut its economic growth forecast for a fourth time this year. Mexico's economy will expand about 2 percent in 2008, central bank Governor Guillermo Ortiz said today during the release of Banco de Mexico's quarterly inflation report. The bank in July lowered its 2008 growth forecast to between 2.25 percent and 2.75 percent from a previous forecast of 2.4 percent and 2.9 percent.

`Right Decisions'

Mexican bonds advanced for a third day, buoyed by a government plan to pare back sales of longer-term securities this quarter.

The plan to cut back sales of bonds maturing in 10-, 20- and 30-years while boosting auctions of bills maturing in a year or less came after yields on Mexico's benchmark security due in 2024 jumped to a 3 1/2-year high and yields on the one-month bill fell to their lowest in a year.

``The Mexican authorities have made the right decisions,'' said Alberto Bernal, an emerging markets strategist for Bulltick Capital Markets in Miami. ``This is what the market wanted.''

Yields on Mexico's 10 percent bond due December 2024 fell 22 basis points, or 0.22 percentage point, to 9.15 percent. It has fallen 2.25 percentage points in three days. The bond's price today rose 1.95 centavo to 107.11 centavos per peso, according to Santander.

The difference in yields between Mexico's benchmark bond and its one-month bill narrowed to 1.44 percentage points today from 4.27 percentage points on Oct. 24, when it touched its widest ever.

To contact the reporter on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net.

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Cattle Rise as Falling Dollar May Spur Beef Exports; Hogs Drop

By Whitney McFerron

Oct. 29 (Bloomberg) -- Cattle futures rose the most in 19 months as the dollar fell the most since 1998, making U.S. beef cheaper for buyers using other currencies. Hogs declined.

U.S. beef exports dropped for four straight weeks through Oct. 16, and the U.S. Dollar Index, which values the currency against six major counterparts, gained more than 9 percent in the past month through yesterday. The gauge slumped as much as 2.9 percent today and the South Korean won rebounded from a 10- year low yesterday. South Korea is the sixth-largest U.S. beef importer.

``If the dollar backs off some, that would be helpful,'' said David Kruse, a commodity trading adviser at Commstock Investments Inc. in Royal, Iowa. ``We just got the beef market back open to Korea, and suddenly the Korean money isn't worth anything anymore, and our exports have been hurt.''

Cattle futures for December delivery rose for a third day, gaining 2.125 cents, or 2.4 percent, to 91 cents a pound on the Chicago Mercantile Exchange. That's the biggest jump for a most-active contract since March 8, 2007. The price has dropped 9.3 percent this month.

Feeder-cattle futures for January delivery rose 1.8 cents, or 1.9 percent, to 95.9 cents a pound in Chicago. On Oct. 27, the price touched 92.6 cents, the lowest for a most-active contract since Jan. 24, 2007. Futures have declined 7.5 percent this month.

Mad Cow Restrictions

Countries including South Korea halted imports of U.S. beef after the U.S. discovered its first case of mad cow disease in December 2003. South Korea later permitted some imports, with restrictions. Before 2003, the country was the third-biggest buyer of the meat.

U.S. exporters sold 3,399 metric tons of beef in the week ended Oct. 16, down 7.9 percent from the previous week and 74 percent below the week ended Sept. 18, according to the Department of Agriculture.

The South Korean won appreciated 2.9 percent to 1,427 per dollar at the 3 p.m. close in Seoul, according to Seoul Money Brokerage Services Ltd.

Wholesale choice beef fell 0.75 cent, or 0.5 percent, to $1.422 a pound today, according to USDA data. The price is down 8.5 percent this month.

Cattle also gained as corn futures jumped the 30-cent limit on the CME on speculation that the Federal Reserve would reduce U.S. interest rates, reviving demand for food and animal feed. The Fed this afternoon cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low.

Lower Weights

Higher corn prices may spur producers to feed cattle less, reducing animal weights and the overall supply of beef.

``They'll feed cattle for a shorter time maybe or feed fewer of them if corn is going up,'' said Joe Kropf, an analyst at Joe Kropf & Sid Love Consulting Services Inc. in Overland Park, Kansas.

Hog futures for December settlement fell 0.475 cent, or 0.8 percent, to 57.575 cents a pound in Chicago. The most- active contract has declined 10 percent this month.

Wholesale pork advanced 0.11 cent, or 0.2 percent, to 65.17 cents a pound yesterday, the USDA said. Pork has dropped 12 percent this month.

To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net.

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Wheat Soars Most in 20 Years on Federal Reserve's Rate Decrease

By Tony C. Dreibus

Oct. 29 (Bloomberg) -- Wheat rose the most in at least 20 years on speculation the Federal Reserve and European Central Bank would cut interest rates, increasing liquidity and freeing up capital that will allow buyers to purchase U.S. supplies.

Investors bought baskets of commodities including energy, metal and grain futures on expectations the Fed would cut its benchmark lending rate. After markets closed, the central bank reduced the rate to 1 percent from 1.5 percent, which may encourage borrowing and spur overseas importers to purchase U.S. grain. Wheat dropped 24 percent this month through yesterday.

``A half-point rate cut by the Fed is factored in,'' said Vince Ambrose, a trader at MF Global in Chicago. ``And it doesn't look coordinated, but the Europeans will move next week, or that's what they've stated. A lot of commodities have sold off dramatically and we're getting a bounce.''

Wheat futures for December delivery rose 47.25 cents, or 9.2 percent, to $5.6125 a bushel on the Chicago Board of Trade, the biggest percentage gain for the contract closest to expiration since June 30, 1988.

Futures still are down 58 percent from a record $13.495 a bushel on Feb. 27 after growers planted more to take advantage of prices that rose 77 percent last year.

Lowering the interest rate will make money cheaper to borrow, lessening the value of the greenback against other world currencies. The dollar fell as much as 2 percent against the yen and 2.3 percent against the euro today, increasing purchasing power for overseas buyers.

Still, U.S. exporters have shipped 13.2 million metric tons of wheat since the beginning of the marketing year on June 1, down 10 percent from the same period a year earlier, Department of Agriculture data show.

Egyptian Purchase

Egypt today bought 120,000 metric tons of wheat from Russia, shunning U.S. supplies and paying $179 a ton, or $4.87 a bushel. U.S. soft-red winter wheat was selling for $4.78 a bushel in New Orleans yesterday and $6.0075 a bushel in Houston, not including freight costs for overseas buyers.

Futures also rose as freight rates declined, making U.S. inventories more attractive to overseas customers.

Ocean transport costs, as expressed by the Baltic Dry Index, have plunged 90 percent since June 30 on slack demand for shipping containers. The index, which measures rates for dry bulk goods, dropped to the lowest since February 2002.

``Shipping rates have come down drastically and that's going to help U.S. grain exports,'' Ambrose said.

Wheat is the fourth-biggest U.S. crop, valued at $13.7 billion in 2007, behind corn, soybeans and hay, government data show.

To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.

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Sugar Rises Most in 4 Years as Dollar's Drop Boosts Commodities

By Ron Day

Oct. 29 (Bloomberg) -- Sugar prices rose the most in four years in New York as the weaker dollar trimmed the costs of commodities including crude oil for buyers using other currencies.

The dollar slipped against the yen and euro before the Federal Reserve cut interest rates to 1 percent from 1.5 percent. A weaker dollar reduces commodity costs for purchases made with euros or yen. A rise in crude-oil prices boosts demand for ethanol, which is made from sugar cane in Brazil.

``The dollar is selling off and that's contributing,'' said Donna Heidkamp, a senior trading adviser at RJO Futures in Chicago. Sugar's gain accelerated after it passed so-called key technical levels of 11.35 cents a pound and 11.50 cents, indicating the commodity was ``extremely oversold,'' she said.

Raw-sugar futures for March delivery rose for a third day, jumping 0.95 cent, or 8.5 percent, to 12.09 cents a pound on ICE Futures U.S. in New York. It was the biggest one-day gain since Oct. 13, 2004.

The price has climbed 12 percent this week, and sugar is the top gainer this year in the Reuters/Jefferies CRB Index of 19 raw materials. Still, sugar is down 20 percent from this year's high of 15.07 cents on March 3.

Sugar prices are also being helped by sliding output in Brazil, the world's biggest sugar producer and maker of fuel from cane, Heidkamp said. Output in the country's Center South region plunged 24 percent in the first half of this month from a year earlier, to 1.63 million tons, industry group Unica reported on Oct. 27.

Above-average rainfall, which pares sugar yields, has slowed the harvest, Unica said. Brazilian mills this year have also turned more cane into ethanol instead of sugar.

To contact the reporter on this story: Ron Day in New York at rday1@bloomberg.net.

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Gold Futures Rise in N.Y. as Dollar Weakens; Silver Soars 12%

By Pham-Duy Nguyen

Oct. 29 (Bloomberg) -- Gold futures rose in New York as the dollar plunged, boosting the appeal of the precious metal as an alternative investment. Silver soared the most since 1979.

Against a basket of six major currencies, the dollar tumbled as much as 2.8 percent. Before today, gold dropped 12 percent this year, while the dollar gained 13 percent.

``Any dollar weakness is beneficial for gold,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ``We've had weeks now where everyone wanted to bring money home and put it in cash. Eventually, the dollar heads lower, and that's supportive for gold.''

Gold futures for December delivery rose $13.50, or 1.8 percent, to $754 an ounce on the Comex division of the New York Mercantile Exchange. The metal reached a record $1,033.90 on March 17.

Silver futures for December delivery jumped $1.1015, or 12 percent, to $9.805 an ounce, the most since Dec. 31, 1979. The metal still has dropped 34 percent this year.

Expectations of an interest-rate cut today helped weaken the dollar, analysts said. The Federal Reserve slashed its benchmark rate to 1.5 percent on Oct. 8 from 5.25 percent in September 2007.

The Fed may lower the rate to 1 percent today and signal further cuts, according to economists surveyed by Bloomberg.

``Over time, lower rates and more issuance of bonds and printing of money should all be gold positive and dollar negative,'' said Michael Martin, a trader at R.F. Lafferty Inc. in New York. ``Gold will continue to be bolstered because it's the further creation of money.''

Gold may fall should equities worldwide slide, Lesh of FuturePath said. Stocks in Asia and Europe rallied today after the Dow Jones Industrial Average gained 11 percent yesterday. The U.S. gauge fell as much as 1.1 percent today and gained as much as 1.6 percent.

``As equities rally, it means you don't have to sell your metals to meet margin calls,'' Lesh said. ``If equities are going to see more downside, metals will also go back down.''

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

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Brazilian Stocks Rise to Highest in Week; Bolsa, Ipsa Advance

By Alexander Ragir and William Freebairn

Oct. 29 (Bloomberg) -- Brazilian stocks rose to the highest in a week, led by banks and raw-material producers, on surging commodity prices and speculation the country's central bank may halt six months of interest-rate increases.

Banco Itau Holding Financeira SA led a rally in banks, jumping 13 percent, after global central banks cut rates and the Federal Reserve agreed to give Brazil a $30 billion credit line. Usinas Siderurgicas de Minas Gerais SA rose for a two-day gain of 23 percent after it reported earnings that topped estimates. Gafisa SA jumped to the highest in a week as the government said it may offer low-interest loans to builders.

``The moves by central banks around the word are attempts to try to calm investors,'' said Mirela Rappaport, who helps manage the equivalent of $48 million at Investport in Sao Paulo. ``And equity prices are reflecting panic, not economic conditions, so when people stop panicking, they look at stocks and say `wow, things are really cheap'.''

The Bovespa gained 1,458.56, or 4.4 percent, to 34,845.21. Mexico's Bolsa rose 4.1 percent at 4:17 p.m. New York time. Chile's Ipsa added 2 percent. The MSCI Emerging Markets Index rose 4.1 percent.

Itau surged 13 percent to 21.56 reais. Banks rose 12 percent in the MSCI Brazil Index. Policy makers may keep the benchmark rate at 13.75 percent at today's rate meeting, according to 30 of 46 economists in a Bloomberg survey. The others expect the bank to raise the Selic for the fifth time since April. The central bank will announce its decision after 4 p.m. New York time.

Fed Cut

The Federal Reserve cut its benchmark interest rate by half a point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era. The Fed also agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore to boost the liquidity of dollars in emerging markets.

``The crisis in the international banks was very strong and, as a matter of fact, credit lines for trade were the ones that suffered first and the ones that suffered the most,'' Unibanco Vice President Geraldo Travaglia said in an interview in New York before the Fed move.

China, the world's largest buyer of industrial metals, lowered rates for the third time in two months to stimulate growth.

Usiminas, as Brazil's second-biggest steelmaker is known, gained 5.8 percent to 28 reais. The company said per-share profit declined to 1.78 reais from 3.45 reais after the company split its shares earlier this year. This topped the 1.77 real average estimate of six analysts in a Bloomberg survey.

The Bloomberg Base Metals 3-Month Price Commodity Index gained for a third day, rising 5.5 percent to 153.5646. Copper jumped 10 percent, the most in two years. Oil climbed 8.7 percent.

Homebuilders Rally

Gafisa paced gains for homebuilders, rising 17 percent to 16.35 reais. Finance Minister Guido Mantega said yesterday the government will announce the details of a plan for the homebuilding industry today that includes loans that will cost less than the going market rate.

``We see the announcement positively for the industry,'' Raymond James & Associates analyst Conrado Vegner wrote.

In Chile, the Ipsa gained for a third day, led by Sociedad Quimica y Minera de Chile SA.

Chile's biggest fertilizer maker added 5.4 percent to 13,100 pesos after saying third-quarter net income jumped to $191 million from $41.5 million a year earlier. Soquimich was reiterated ``buy'' at Banco Santander SA, which attributed the earnings growth to higher potassium prices.

Mexico's Bolsa index rose for a second day, led by Industrias Penoles SAB, the world's biggest silver producer.

Penoles surged 21 percent to 93 pesos as silver prices climbed.

Bancolombia SA, Colombia's biggest lender, led the rally on Colombia's IGBC Index. The shares gained 11 percent after third- quarter profit increased 16 percent, topping analyst estimates.

Argentina's Merval fell 2.6 percent, led by banks, and Peru's Lima General index climbed 7.8 percent.

To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net; William Freebairn in Mexico City at wfreebairn@bloomberg.net.

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GE, JDS Uniphase, Metlife, Symantec, Visa: U.S. Equity Preview

By [bn:PRSN=1] Whitney Kisling []

Oct. 29 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading tomorrow. Stock symbols are in parentheses, and share prices are as of 5:10 p.m. in New York, unless otherwise specified.

Standard & Poor's 500 Index futures expiring in December added 4.60, or 0.5 percent, to 931.60. Dow Jones Industrial Average futures gained 61, or 0.7 percent, to 8,915. Nasdaq-100 Index futures rallied 5.25, or 0.4 percent, to 1,299.25.

Allied Waste Industries Inc. (AW US): The trash hauler that agreed to be bought by competitor Republic Services Inc. posted third-quarter profit excluding some items of 28 cents a share, exceeding the average analyst estimate by 2 cents, because of higher prices and fuel surcharges. The shares added 20 cents, or 2.3 percent, to $8.91.

General Electric Co. (GE US): The 106-year-old economic bellwether's Chief Executive Officer Jeffrey Immelt said he's asking operating managers to match this year's profit levels even if sales decline next year. The shares rose 20 cents, or 1 percent, to $19.40.

JDS Uniphase Corp. (JDSU US): The maker of phone equipment for companies such as AT&T Inc. posted a loss excluding some items that was wider than analysts' estimates and said sales in its testing unit fell. The shares slid 1.6 percent to $6 in regular trading.

Metlife Inc. (MET US): The biggest U.S. life insurer posted third-quarter earnings excluding some items of 88 cents a share, a penny below the average estimate of analysts surveyed by Bloomberg. The company said declining equity markets hurt returns at the unit that sells retirement products. The shares fell 0.8 percent to $29.55 in regular trading.

PC Mall Inc. (MALL US): The Internet retailer of personal computers and peripherals announced a $10 million share buyback program after reporting earnings excluding some items of 18 cents a share. PC Mall added 43 cents, or 16 percent, to $3.10.

Prudential Financial Inc. (PRU US): The second-biggest U.S. life insurer posted a third-quarter profit excluding some items of 74 cents a share, missing the average analyst estimate by 5 cents a share, and said turmoil in global credit markets cut the value of its investments. The shares declined 3.4 percent to $35.25 in regular trading.

Symantec Corp. (SYMC US): The biggest maker of security software forecast profit and sales that missed analysts' estimates, citing the credit crisis and a stronger U.S. dollar that weighed on overseas sales. The shares slid $1.02, or 6.9 percent, to $13.80.

Visa Inc. (V US): The world's largest credit-card company reported its first loss since going public in March after posting costs tied to an antitrust lawsuit with Discover Financial Services. The shares dropped $1.09, or 2.2 percent, to $49.60.

To contact the reporter on this story: Whitney Kisling in New York at wkisling@bloomberg.net

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Canada Stocks Rally on Fed, Commodities; Nexen, Potash Jump

By John Kipphoff

Oct. 29 (Bloomberg) -- Canadian stocks rose, sending the main index to its best two-day gain in 32 years, as the U.S. dollar sank and commodities surged on the Federal Reserve's sixth interest-rate cut this year.

Nexen Inc. jumped 14 percent on better-than-expected earnings and a report that rival oil producers are considering bids for the company. Potash Corp. of Saskatchewan Inc. paced mining companies' biggest two-day rally on record as a gauge of commodities rose the most since 1956. Manulife Financial Corp. climbed a second day after a regulator relaxed capital requirements for insurers.

``It's pretty much about the Fed today,'' said Martin Roberge, portfolio strategist at Dundee Securities in Montreal. ``A huge decline in the U.S. dollar is a prerequisite for a commodity rally. We probably saw the market lows two days ago.''

The Standard & Poor's/TSX Composite Index rose 3.8 percent to 9,501.56 in Toronto, extending a two-day gain to 11 percent, its steepest rise since 1976. The measure increased 7.2 percent yesterday as investors took advantage of the cheapest share valuations on record.

Canada's stock benchmark, which derives three-quarters of its value from commodity and financial shares, has still dropped 19 percent in October, poised for its worst monthly decline in a decade, on speculation that the global credit crisis and equity rout will cause more losses at finance companies and that a recession will curb demand for Canadian commodity exports.

U.S. Dollar Slump

The U.S. dollar fell the most since 1998 against currencies of six major trading partners as the Fed sliced its target rate by a half-percentage point to 1 percent, matching the lowest level in half a century. It was the second cut this month after a 50 basis point reduction on Oct. 8 that the Fed coordinated with the Bank of Canada and the European Central Bank, among others. The Canadian dollar rose as much as 4.9 percent, the most in 37 years, against the U.S. currency.

A gauge of energy stocks climbed 7.5 percent and a measure of materials shares added 11 percent. The materials group, the worst performer this month in the S&P/TSX, notched a two-day gain of 22 percent, the biggest since 1987, when Bloomberg's records begin. It's still down 31 percent this month.

Oil climbed more than $4 a barrel in New York on speculation that lower borrowing costs may help revive demand for fuel and other resources. Corn rose the maximum allowed in Chicago and copper the most since 2006. The Reuters/Jefferies CRB Index of 19 raw materials traded in U.S. dollars increased 5.9 percent for its steepest gain since at least 1956, when data begin.

Nexen Jumps

Nexen climbed the most in two weeks, adding 14 percent to C$18.60. The oil and natural-gas producer reported third-quarter profit more than doubled to C$886 million, or C$1.66 a share, beating analyst estimates by 29 percent. The stock has still lost 25 percent of its value this month.

Total SA and Royal Dutch Shell Plc are considering takeover bids for Nexen, the Financial Times reported, without saying where it got the information. Chief Executive Officer Charlie Fischer, who retires this year, said the company hasn't been approached by any potential buyers and that it isn't for sale.

EnCana Corp., the country's biggest energy company by market value, increased 6.7 percent to C$59.20. Canadian Natural Resources Ltd. climbed 13 percent to C$58.25 and earlier surged 17 percent for its biggest intraday gain in 19 years.

Suncor Energy Inc. rose 10 percent to C$28.01. The world's second-largest oil-sands producer said third-quarter profit increased 30 percent to C$815 million, or 86 cents a share, from C$627 million, as crude prices surged to a record in July.

Potash rose 7.6 percent to C$96.68. The largest fertilizer maker by market value was raised to ``sector outperform'' from ``sector perform'' by Sam Kanes at Scotia Capital.

Gold Producers

Barrick Gold Corp., the biggest bullion miner, advanced 6.3 percent to C$27.90 as prices for the precious metal rose. Kinross Gold Corp., Canada's third-largest producer of the metal, jumped 19 percent to C$12.85.

Manulife gained 7.7 percent to C$25.30, taking a two-day advance from a four-year low to 20 percent. The country's biggest insurer was raised to ``outperform'' from ``neutral'' by Jim Bantis at Credit Suisse. The regulatory relaxation of capital ratios removes a ``capital raising overhang'' on the stock, the Toronto-based analyst wrote in a note to clients.

Research In Motion Ltd. fell 3.2 percent to C$58.83. The maker of the BlackBerry e-mail phones was rated ``market perform'' in new coverage by BMO Capital Markets analyst Keith Bachmann in New York, who set a share-price target of C$67.85. RIM had its share target cut at GMP Capital and Genuity Capital, while Paradigm capital increased its price estimate.

To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.

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