Trading Slump Signals More S&P 500 Losses: Technical Analysis

By Elizabeth Stanton

March 6 (Bloomberg) -- Stock trading during yesterday’s 4.3 plunge in the Standard & Poor’s 500 Index was 21 percent below the level on Nov. 20, when the index sank to an 11-year low, a sign to some analysts that the worst isn’t over.

“There’s just no sign of a bottom,” said John Murphy, chief technical analyst at StockCharts.com in Oradell, New Jersey. Technical analysis, Murphy’s field since 1968, involves mining price and volume data to make forecasts.

As the S&P 500 fell to 682.55 yesterday, its lowest close since September 1996, volume on U.S. exchanges totaled 12.6 billion shares. That’s 36 percent less than on Oct. 10, last year’s busiest day, when the stock index completed an 18 percent drop that was the steepest weekly decline in 75 years. New York Stock Exchange volume totaled 1.88 billion shares yesterday, 37 percent below its 2008 peak.

About 16.1 billion shares traded on Nov. 20, when the S&P 500 dropped 6.7 percent to 752.44, the lowest level since April 1997.

The S&P 500 tumbled 56 percent and the Dow Jones Industrial Average fell 53 percent to 6,594.44 from their October 2007 records. They may retreat to 660 and 6,000, respectively, Murphy said. Some previous sell-offs have ended with a surge in volume, he added.

“People just get so disgusted that they throw in the towel and you get a sharp down day on big volume,” he said. “We haven’t seen that.”

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

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AnnTaylor, Ciena, Harley-Davidson, Insulet: U.S. Equity Movers

By Lu Wang

March 6 (Bloomberg) -- Shares of the following companies are having unusual moves in U.S. trading. Stock symbols are in parentheses, and prices are as of 10 a.m. in New York.

AnnTaylor Stores Corp. (ANN US) fell the most in the Russell 1000 Index, sliding 19 percent to $4.51. The U.S. retailer of women’s business attire reported a wider fourth-quarter loss and said it drew down $125 million under its $250 million revolving credit facility yesterday.

ArcSight Inc. (ARST US) climbed 27 percent to $11.20 and earlier jumped to $11.49, the highest intraday price since Aug. 12. The developer of computer security software said profit excluding some items will be at least 41 cents a share during the fiscal year ending in April, or 41 percent more than the average analyst estimate.

FairPoint Communications Inc. (FRP US) fell 25 percent to $1.20, and slid 39 percent earlier, the most intraday since February 2005. The owner of telephone lines in New England suspended its dividend after reporting a fourth-quarter loss of 85 cents a share.

Ciena Corp. (CIEN US) rose 6.9 percent to $6.34 and earlier advanced to $6.38, the highest intraday price since Feb. 13. The maker of network equipment reduced operating expense was boosted to “neutral” from “underperform” by Credit Suisse Group AG.

Fuel Systems Solutions Inc. (FSYS US) plunged 26 percent to $14.20, and dropped 30 percent earlier, the most intraday since Sept. 29. The company whose devices allow internal-combustion engines to run on alternative fuels reported profit excluding some items of 31 cents a share, missing the average analyst estimate by 28 percent.

General Motors Corp. (GM US) declined 7 percent to $1.73 for the biggest loss in the Dow Jones Industrial Average. The automaker said it may lose more than $1 billion separating from its Swedish Saab Automobile unit, which filed for protection from creditors last month.

Harley-Davidson Inc. (HOG US) rose 5.5 percent to $8.65 and earlier climbed 12 percent, the most intraday since Feb. 3. The biggest U.S. motorcycle maker said it expects to meet 2009 earnings forecast after retail sales of motorcycles fell 13 percent in the first two months of the year.

H&R Block Inc. (HRB US) rose 7.6 percent to $18.63 and earlier jumped 12 percent, the most intraday since Oct. 28. The biggest U.S. tax preparer reported third-quarter earnings per share from continuing operations of 20 cents, double the average analyst estimate.

Insulet Corp. (PODD US) fell the most in Russell 2000 Index, slumping 31 percent to $3.51. The maker of a device to give insulin to diabetic patients forecast sales of $65 million at most this year, missing the average analyst estimate of $74.4 million.

Macy’s Inc. (M US) surged 9.4 percent to $7.20 and earlier gained 13 percent, the most intraday since Feb. 24. The second- biggest U.S. department-store chain was raised to “buy” from “neutral” at Goldman Sachs Group Inc. and added to the brokerage’s “conviction buy” list on reduced concern about its balance sheet.

Marvell Technology Group Ltd. (MRVL US) rose 8.2 percent to $8.14 and advanced earlier to $8.30, the highest intraday price since Feb. 9. The maker of chips for mobile phones reported earnings excluding some items of 5 cents a share, more than double the average analyst estimate.

Northeast Utilities (NU US) rose 3.6 percent to $20.39 and gained 4.4 percent earlier, the most intraday since Jan. 26. The utility owner in New England was picked to replace Tyco International Ltd. (TYC US) in the Standard & Poor’s 500 Index.

Quest Diagnostics Inc. (DGX US) fell 3 percent to $43.68 and earlier slipped to $42.36, the lowest intraday price since Nov. 21. The world’s largest provider of medical diagnostic tests was added to Goldman Sachs Group Inc.’s “Americas Conviction Sell List.” The brokerage said the shares are expensive and there are risks to 2009 revenue growth.

Wells Fargo & Co. (WFC US) rose 11 percent to $9.01 and earlier added 17 percent, the most intraday since Feb. 24. The fourth-largest U.S. bank cut its quarterly dividend by 85 percent to 5 cents a share in a move to save an additional $5 billion a year and said January and February results were “strong.”

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

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U.S. Stocks Pare Gain as Technology Slump Offsets Jobs Report

By Cristina Alesci and Lynn Thomasson

March 6 (Bloomberg) -- U.S. stocks pared their advance as JPMorgan Chase & Co. cut estimates for Apple Inc., offsetting gains following government data showing the rate of American job losses slowed in February.

Apple fell 4 percent, leading technology companies to the steepest decline in the Standard & Poor’s 500 Index, as JPMorgan said the deepening recession is hurting profit at the iPhone maker. Wells Fargo & Co. gained 12 percent after cutting its dividend to save cash and saying business was “strong” in January and February.

The Standard & Poor’s 500 Index rose 0.5 percent to 685.95 at 10:29 a.m. in New York after rallying 2.4 percent earlier. The Dow Jones Industrial Average gained 43.57 points, or 0.7 percent, to 6,638.01.

The S&P 500 is headed for its fourth straight weekly decline as the worsening recession, a third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. helped drag the measure down 24 percent this year. The index has fallen 6.7 percent this week.

Wells Fargo jumped 11 percent to $9. The bank that bought Wachovia Corp. said the dividend cut will help it pay back the government and better absorb losses should the credit crisis worsen.

“That’s definitely affecting the market because the bank is basically saying that it won’t need more funding,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.5 billion in Elmira, New York.

General Electric Co. and Bank of America Corp. added more than 3.5 percent as the government said American employers eliminated 651,000 jobs in February, down from a revised 655,000 in January and compared with the median economist estimate of 650,000.

“Maybe we’re starting to get to where we’re at the high point of unemployment, and maybe we plateau from here,” said Jason Cooper, who helps manage $3 billion at 1st Source Investment Advisors in South Bend, Indiana. “We’ll probably have a good day today because you didn’t see any huge surprises.”

GE, which plunged to a 16-year low yesterday, added 5.1 percent to $7. Bank of America climbed 3.5 percent to $3.28. The lender has still tumbled more than 75 percent in 2009.

Energy stocks rose on higher oil prices as the U.S. dollar weakened against the euro, bolstering the appeal of commodities as an alternative investment. Crude oil for April delivery gained 3.1 percent to $44.97 a barrel in New York.

Chevron Corp. gained 3.7 percent to $58.53. Hess Corp. advanced 4 percent to $54.84. ConocoPhillips rose 2.7 percent to $36.34. Exxon Mobil Corp. added 2.6 percent to $63.81.

The jobless rate surged to 8.1 percent, more than forecast and the highest since December 1983, the Labor Department said today in Washington.

“Maybe it’s a relief and people saying it could have been a lot worst,” said Gary Shilling, an economist at A. Gary Shilling & Co. in Springfield, New Jersey, who predicted the recession that began in December 2007. He remains concerned that the economy is worsening and job losses will increase.

“Higher unemployment means the economy is more likely to drag on consumer spending, which feeds on itself and leads to weaker stocks, which also weighs on consumer sentiment,” Shilling added.

At yesterday’s close, more than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The Dow average has fallen 20 percent since Inauguration Day, the fastest drop under a new president in at least 90 years, as investors speculated Barack Obama’s stimulus measures won’t revive the economy anytime soon.

H&R Block Inc. rose 6 percent to $18.36. The biggest U.S. tax preparer reported third-quarter earnings from continuing operations of 20 cents a share, double the average analyst estimate.

To contact the reporters on this story: Cristina Alesci in New York at calesci2@bloomberg.net; Lynn Thomasson in New York at lthomasson@bloomberg.net.

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Copper Declines as Shanghai Price Premium to London Narrows

By Li Xiaowei

March 5 (Bloomberg) -- Copper fell from a three-month high in Asian trading as a narrowing of the Shanghai price premium over the London market may curb import demand from China, the world’s largest buyer.

The Shanghai premium dropped to about $530 a metric ton yesterday from about $730 a ton two weeks ago. Futures in China have climbed 24 percent this year, compared with a 21 percent gain on the London Metal Exchange.

“Because of the falling premium in Chinese prices, we’d expect March imports would only be sustained if the State Reserve Bureau keeps buying,” Li Ye, an analyst at Minmetals Starfutures Co., said from Shenzhen. “London copper will trade range-bound, factoring in changes in Chinese import prospects.”

Copper for delivery in three months on the LME fell 1.2 percent to $3,700 a metric ton, after jumping to the highest since November yesterday. The best-performing metal on the LME this year has gained on speculation Chinese demand may offset declines in the U.S. and Europe.

Copper inventories monitored by the LME shrank 0.9 percent to 526,025 tons yesterday, 4.1 percent less than this year’s peak on Feb. 25. Cancelled warrants, stockpiles already earmarked for delivery, rose 17 percent to 64,400 tons.

The drawdown in the LME stockpiles indicated China’s State Reserve Bureau is buying the metal, according to Macquarie Group Ltd.’s Adam Rowley.

Shanghai Futures

Copper for May delivery on the Shanghai Futures Exchange rose 0.9 percent higher to close at 29,500 yuan ($4,312) a ton after jumping as much as 4.7 percent earlier.

China will “significantly increase” investment in 2009, Chinese Premier Wen Jiabao said in his work report presented to the National People’s Congress in Beijing today. The nation needs to “reverse the economic slide as soon as possible,” he said, without announcing an increase to a 4 trillion yuan stimulus package.

“It’s improved sentiment from China that’s boosting copper, yet the boost may not last too long if a demand revival isn’t really there,” Fang Junfeng, an analyst at China International Futures (Shanghai) Co., said today. “We feel Chinese demand so far is still weaker than the same period last year, though better than in the West.”

Jiangxi Copper Co., China’s largest smelter, said the lack of scrap raw material is threatening its plan to raise production this year by 14 percent to 800,000 tons.

The Chinese company had to close a 50,000 ton capacity plant because of the lack of scrap, Chairman Li Yihuang said on the sidelines of the National People’s Congress in Beijing.

Among other LME-traded metals, aluminum was down 0.4 percent at $1,355 a ton, zinc lost 1.1 percent to $1,212, lead declined 0.9 percent to $1,170, nickel retreated 0.4 percent to $9,990 and tin added 0.4 percent to $10,950.

To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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Shougang Says Chinese Steel Prices Drop Below Costs

By Helen Yuan

March 5 (Bloomberg) -- Steel prices in China, the world’s largest maker of the metal, have dropped below output costs and a further decline may lead to production cuts, Shougang Corp. said.

“A 20 percent cut may be suitable for the current demand situation,” Shougang’s Chairman Zhu Jimin said today on the sidelines of the National People’s Congress. Shougang is China’s eighth-largest steelmaker.

Benchmark steel prices in China have fallen 13 percent since Feb. 4 after mills increased output on expectation of demand coming from the government’s 4 trillion yuan ($585 billion) stimulus package. More than 60 percent of Chinese mills are losing money, the China Iron and Steel Association said Feb. 23.

“Steel prices may be near the bottom,” Zhu said. “They have fallen below production costs.”

Hebei Iron & Steel Group has cut output by 20 percent, Chairman Wang Yifang said today outside the congress, without giving details.

Shougang, based in Beijing, is in the “final stage” of talks to take over Changzhi Iron & Steel Group, which has an annual capacity of 4 million metric tons, Zhu also said. The company is completing due diligence, he said.

The Chinese government is pushing for consolidation in the steel industry to boost its competitiveness and raw material purchasing power. Baosteel Group Corp., the country’s largest steelmaker, will takeover two rivals as part of the plan, the China Iron & Steel Association said last month.

To contact the reporter on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

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U.S. Beef Exports May Increase 7% on Demand From Japan, Korea

By Aya Takada

March 5 (Bloomberg) -- Beef shipments from the U.S., the world’s largest producer, may increase 7 percent this year as demand from Japan and South Korea grows, an exporters’ group said.

U.S. beef exports will probably climb to 1 million metric tons as shipments to the two Asian countries may reach 200,000 tons, Philip Seng, president and chief executive officer of the U.S. Meat Export Federation, said in an interview in Tokyo.

Rising exports will assist U.S. producers as domestic consumption is weakening amid the nation’s worst recession in a quarter century. Increasing imports may hurt sales of locally produced beef and erode feed grain demand in Japan and South Korea, the world’s largest and third-biggest corn importers. A ban on imports of the meat by Korea was lifted last June.

“We have an added access to the Korean market, and also we will do better in the Japanese market,” Seng said.

Japan and South Korea will probably be the equal third- biggest export markets for U.S. beef this year, buying 100,000 tons each, Seng said. U.S. beef demand in Mexico and Canada, the largest and second-biggest foreign buyers, is unlikely to increase because of a stronger dollar, he added.

U.S. beef sales to Japan are growing as consumers seek a cheaper alternative to domestic beef amid an economic slump, Seng said. A weak dollar against the yen and falling feed grain prices made American beef more price-competitive in the market.

Grain Costs

“Grains constitute about 60 percent of total costs for producers,” Seng said. The yen jumped 23 percent against the dollar in 2008.

South Korean imports of U.S. beef exceeded 57,000 tons last year after a ban on the meat was lifted. South Korea barred imports in 2003 when the U.S. discovered its first case of mad cow disease. The ban was lifted in 2006 for boneless cuts from young cows and later reinstated after bone fragments were found in some meat.

World beef demand is expected to decline slightly this year as a slump in global economies and rising unemployment make consumers cut spending, Seng said. Beef producers worldwide will probably reduce output to 58.9 million tons from 59.2 million tons in 2008, in line with weakening demand, he added.

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net

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India Wheat Needs Favorable Weather to Reach Production Target

By Thomas Kutty Abraham

March 5 (Bloomberg) -- India, the world’s second-biggest wheat producer, may fail to reach its output target this year unless some of the growing regions receive rain in the next two weeks, a government researcher said.

“The weather is going to be very critical in the next 15 days,” Jag Shoran, director at the state-owned Directorate of Wheat Research said in a telephone interview. “We could produce about 78 million tons if the weather stays favorable, otherwise it could be down to 75 million tons.”

A smaller crop may prevent the government from lifting a three-year ban on wheat exports and risk an increase in grain prices before general elections beginning next month. High food costs can mar poll prospects in a country where more than half the people survive on less than $2 a day.

Production may total 77.8 million tons, second only to that of China, in the year ending June compared with 78.6 million tons last year, farm ministry said last month. Wheat, sowed in October and harvested in March and April, makes up more than 70 percent of India’s winter-sown grain output.

Farmers have sown wheat on 27.8 million hectares, less than last year’s 28.1 million hectares, according to the farm ministry.

Crops planted after Nov. 15 in the northern states of Uttar Pradesh, Bihar, Assam and West Bengal need rain in two weeks to cool temperatures and aid grain formation, Shoran said.

The maximum temperatures are above normal by as much as 7 degree Celsius in the northwest India, which includes the main wheat-growing regions, the India Meteorological Department said. Temperature may drop by 2 degrees over the next two days, it said.

‘Good Condition’

The crop in Punjab and Haryana, India’s biggest suppliers of the grain to the government agencies, is in “good” condition as cool night temperatures mitigated above normal hot weather during the day, Shoran said.

“The crop is almost secure there from any change in the weather,” he said. “There are no concerns as the wheat has nearly completed the grain formation.”

Hot weather last month hurt the wheat crop in the state of Gujarat and parts of Madhya Pradesh, where production may be less than last year’s record harvests, Shoran said.

The government plans to buy 24 million tons from farmers in the year starting April 1, up from 22.68 million tons last year.

May-delivery wheat on the Chicago Board of Trade was little changed at $5.23 a bushel at 12:24 p.m. Mumbai time. Futures rose 4.2 percent yesterday, the most since Jan. 6. Prices are down 61 percent from a record $13.495 a year earlier.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net.

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China’s Tongling Nonferrous Seeks Minerals in Australia, Canada

By Xiao Yu

March 5 (Bloomberg) -- Tongling Nonferrous Metals Group Co., China’s second-biggest copper smelter by output, is exploring for minerals in Australia, Canada and South America as it waits for opportunities to acquire assets, Chairman Wei Jianghong said.

“Commodity prices have been at very high levels these past few years, and we think we can wait for prices to come down further in the next year or two,” Wei said in an interview in Beijing while attending the National People’s Congress. “Then we think there will be good opportunities for acquisitions.”

Chinese companies have agreed to acquire $22 billion of commodity assets in the past month, seeking to benefit from seven-year low prices to secure copper, iron ore and zinc mines. The slump has forced indebted Rio Tinto Group and OZ Minerals Ltd. to seek Chinese investment as funds from banks dry up.

Tongling, which posted a 38 percent profit drop last year, plans to maintain 2009 copper production at last year’s level, Wei said. Still, the company will slash output should prices fall below output costs, he said. Production will also depend on the availability of raw materials and the profitability of selling the byproduct sulfuric acid, he said.

Lower smelting fees and copper prices because of overcapacity and the global recession have crimped smelting profits. Tongling Nonferrous and rival Yunnan Copper Industry Co. cut output in the fourth quarter after prices slumped 55 percent in China.

Copper futures in Shanghai rose 2.3 percent to 29,900 yuan a ton today at 11:30 a.m. local time break. Prices may average below 30,000 yuan for the year, Wei said.

The Chinese government is spending 4 trillion yuan ($585 billion) on a stimulus package to bolster sagging economic growth, raising expectations that metals demand will rise as it builds more infrastructure projects including railways and airports.

The stimulus package hasn’t had an impact on copper prices and demand yet, Tongling’s Wei said.

To contact the reporter on this story: Xiao Yu in Beijing at yxiao@bloomberg.net;

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China Stocks Advance on Optimism About Economy; Banks Climb

By Chua Kong Ho and Shani Raja

March 5 (Bloomberg) -- China stocks rose in volatile trade after Premier Wen Jiabao said the country’s 8 percent growth target is within reach, indicating the government doesn’t see the need to increase its stimulus package.

China Cosco Holdings Co. gained 4.2 percent after Wen said it’s “possible for us to meet this target” in his annual speech to the nation’s parliament in Beijing today. Bank of China Ltd. added 4.6 percent after the government announced bank loans reached 800 billion yuan ($117 billion) last month.

The Shanghai Composite Index advanced 1 percent to 2,221.08 at the close, after changing direction at least eight times. The gauge surged 6.1 percent yesterday, the most in four months, on speculation Wen would add to China’s 4 trillion yuan spending package announced in November.

“The Chinese authorities have already greased the wheels of recovery,” said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages $85 billion. “It may be a short-term disappointment that no further stimulus was announced, but it doesn’t undermine the China growth story.”

Stocks climbed around the world yesterday after former statistics bureau head Li Deshui said Wen would announce a new package of stimulus measures today in the equivalent of a U.S. State of the Union address.

Shares of heavy-equipment makers declined. Sany Heavy Industry Co., China’s largest supplier of concrete-making equipment, slid 2 percent to 23.23 yuan, while Anhui Conch Cement Co. declined 0.9 percent to 36.03 yuan, on disappointment at the lack of new spending. Standard & Poor’s 500 Index futures fell 0.5 percent, erasing gains.

‘Wonderful’ Economy

“China can’t solve the world’s problems,” Jim Rogers, the author of “A Bull in China: Investing Profitably in the World’s Greatest Market,” said in a phone interview today. “China is a wonderful and growing economy but it cannot pull the world out of the hole.”

China Cosco, the world’s largest dry-bulk carrier, climbed 4.2 percent to 10.52 yuan. China Shipping Development Co. rose 3.2 percent to 10.35 yuan and China Merchants Energy Shipping Co. gained 1.7 percent to 4.92 yuan.

Wen pledged to “significantly increase” investment after collapsing exports dragged the world’s third-largest economy to its weakest growth in seven years and cost the jobs of 20 million migrant workers.

“Enough has been done for now in terms of stimulus spending,” said Philippe Zhang, chief investment officer at AXA SPDB Investment Managers in Shanghai, which oversees about $220 million. “More needs to be done to boost consumption and less on the export-oriented side, but this is a long-term objective and can’t be achieved in the short term.”

Banks Advance

Bank of China, the nation’s third-largest lender by market value, climbed 4.6 percent to 3.66 yuan. Industrial & Commercial Bank of China Ltd., the largest lender, added 1.8 percent to 3.90 yuan, while China Construction Bank Corp. advanced 2.6 percent to 4.30 yuan.

China’s banks offered more than 800 billion yuan ($117 billion) of loans in February, Liu Mingkang, head of the China Banking Regulatory Commission, said at a meeting of the legislature today.

All five industry groups on the Shanghai Composite rose today, about five stocks gaining for every three that declined.

The following shares also rose or fell in China trading. Stock symbols are in parentheses after company names:

Copper producers: Copper for May delivery on the Shanghai Futures Exchange climbed as much as 4.7 percent to 30,600 yuan ($4,475) a metric ton, the highest for a most-active contract since Nov. 10.

Jiangxi Copper Co. (600362 CH), the nation’s largest smelter, gained 3.7 percent to 17.34 yuan. Yunnan Copper Industry Co. (000878 CH), based in south China, advanced 3.4 percent to 14.19 yuan.

Beijing Sanyuan Foods Co. (600429 CH), a dairy company, gained 10 percent to 7.33 yuan after its parent won an auction for the assets of a bankrupt rival linked to last year’s tainted-milk scandal.

To contact the reporter on this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net

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Japan Stocks Rise on Weaker Yen, Shipping Fees; Komatsu Gains

By Masaki Kondo

March 5 (Bloomberg) -- Japanese stocks gained as the yen’s depreciation and higher maritime-transport fees brightened the earnings prospects for automakers and shipping companies.

Mazda Motor Corp. soared 10 percent as the Japanese currency fell to the weakest level in four months, nearing 100 yen to the dollar. Mitsui O.S.K. Lines Ltd., the nation’s No. 2 shipping line, leapt 7 percent. Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, jumped 3.8 percent after Premier Wen Jiabao said China will spend more on infrastructure. Inpex Corp. rose 4.7 percent as crude neared a six-week high.

The Nikkei 225 Stock Average climbed 142.53, or 2 percent, to close at 7,433.49 in Tokyo, bringing its two-day gain to 2.8 percent. The broader Topix index rose 9.51, or 1.3 percent, to 741.55, with almost four shares increasing for each that fell.

“As people were worried the yen will strengthen beyond 90, the depreciation by this degree is a big positive surprise,” said Kiyoshi Ishigane, a senior strategist at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “Machinery makers will benefit from China’s infrastructure investment, and a recovery in trading will lead to better earnings at shipping companies.”

The daily value of stocks traded in Tokyo has remained below its one-year average of 2.1 trillion yen ($21 billion) since Jan. 7 as the global recession damped trading. Profit estimates for the Nikkei’s constituents have dropped 94 percent through yesterday from a one-year high on April 2, according to Bloomberg data.

The yen depreciated against the dollar to as much as 99.53 today, the weakest since Nov. 5, from 98.44 at the close of stock trading in Tokyo yesterday. A weaker local currency boosts the repatriated value of overseas sales for Japanese exporters.

Carmakers, Shippers

Mazda, Japan’s No. 4 automaker, surged 10 percent to 137 yen, while bigger competitor Nissan Motor Co. added 6.1 percent to 330 yen. Honda Motor Co., which gets more than half its profit from North America, increased 2.5 percent 2,260 yen.

Mitsui O.S.K. advanced 7 percent to 502 yen, the sharpest increase since Dec. 15. Market leader Nippon Yusen K.K. rose 4.9 percent to 405 yen for its first gain in five days, and Kawasaki Kisen Kaisha Ltd. added 4.1 percent to 308 yen.

A gauge of shipping lines posted the steepest jump among the Topix’s 33 industry groups. The Baltic Dry Index, a measure of shipping costs for commodities, added 2.5 percent yesterday, the most since Feb. 19.

Wen today reiterated his nation’s 8 percent growth target and said China will “significantly increase” government investment in 2009, without elaborating. Public spending, mostly on infrastructure, will more than double to 908 billion yuan, Wen said.

Machinery, Resources

Komatsu, whose China sales grew in the nine months to December while those in North America and Europe fell, jumped 3.8 percent to 1,075 yen. Hitachi Construction Machinery Co., which gets 15 percent of its sales from China, leapt 2.7 percent to 1,246 yen, extending yesterday’s 7.4 percent advance. Nippon Yusoki Co., which makes forklifts, rose 4 percent to 206 yen.

Speculation China’s economy will pick up steam drove up commodity prices yesterday. Crude oil for April delivery surged 9 percent to $45.38, the highest settlement since Jan. 26. Copper futures for May delivery leapt 5.6 percent.

Inpex, Japan’s biggest oil explorer, added 4.7 percent to 644,000 yen, while rival Japan Petroleum Exploration Co. advanced 7.1 percent to 3,620 yen. Nippon Mining Holdings Inc., the nation’s top copper producer, gained 2.7 percent to 341 yen.

“China’s stimulus is good news, but I’m waiting to see what kind of positive impact it has on the global economy,” said Yoshihisa Okamoto, who helps oversee $26 billion at Mizuho Asset Management Co. “The slump in Japan’s economy is deep, and I doubt infrastructure investment alone can save it.”

China’s Shanghai Composite Index fluctuated today, drifting between a 2 percent gain and a 1.1 percent drop.

Nikkei futures expiring in March added 1.9 percent to 7,410 in Osaka and climbed 1.9 percent to 7,405 in Singapore.

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

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Asian Stocks Rise as China’s Wen Affirms Economic Growth Target

By Jonathan Burgos and Shani Raja

March 5 (Bloomberg) -- Asian stocks gained for a second day, led by commodity and construction companies, after China’s Premier Wen Jiabao said the country’s economic growth target for this year is within reach.

BHP Billiton Ltd., the world’s biggest mining company, climbed 4.4 percent in Sydney and Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, jumped 3.8 percent in Tokyo on speculation demand for metals and industrial machinery will rise. Mazda Motor Corp., Japan’s No. 4 carmaker, surged 11 percent as the yen weakened. Hong Kong’s Hang Seng Index and U.S. futures erased gains after Wen refrained from announcing an expansion of a 4 trillion yuan ($585 billion) spending package.

“The Chinese authorities have already greased the wheels of recovery,” said Nader Naeimi, an investment strategist at AMP Capital Investors in Sydney, which manages $85 billion. “It may be a short-term disappointment that no further stimulus was announced, but it doesn’t undermine the China growth story.”

The MSCI Asia Pacific Index gained 0.6 percent to 72.70 as of 6:09 p.m. in Tokyo, after rising 2.3 percent earlier. Two stocks rose for each one that fell. The gauge slumped 49 percent in the past year as the financial crisis dragged the world’s largest economies into recession, hurting profits at companies from BHP to Toyota Motor Corp., the world’s largest automaker.

Japan’s Nikkei 225 Stock Average climbed 2 percent. All markets rose except Hong Kong, South Korea, Singapore, Indonesia, India, Pakistan and Sri Lanka. Hong Kong’s Hang Seng Index fell 1 percent, after rising 1.3 percent earlier. China’s Shanghai Composite Index rose 1 percent, paring a 2 percent gain.

Government Action

SM Prime Holdings Inc., the largest Philippine shopping mall operator, advanced 4.1 percent on optimism its expansion in China will boost earnings. Mitsui O.S.K. Lines Ltd., the world’s largest operator of iron-ore vessels, leapt 7 percent after shipping fees climbed. NEC Electronics Corp., Japan’s third- biggest chipmaker, surged 8.7 percent after Goldman Sachs Group Inc. advised investors to buy semiconductor shares.

Futures on the Standard & Poor’s 500 Index lost 0.8 percent after rising 0.5 percent earlier today. The U.S. gauge climbed 2.4 percent in New York yesterday, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

The MSCI Asia Pacific yesterday reversed a 1.6 percent decline to end the day 0.7 percent higher after a former Chinese statistics bureau head told reporters the premier would announce a new economic package on top of its previously announced spending plan.

Commodities Surge

Wen told delegates in his annual speech to China’s parliament in Beijing today that it’s “possible” for the economy to meet a target of 8 percent growth this year. Tumbling exports have slowed the country’s economic growth to the weakest in seven years.

Governments from China to the U.S. and Australia have sought to introduce policies this year to ease the financial crisis and bolster their economies. India’s central bank yesterday cut its key interest rate to a record low. The country’s Sensitive Index fell 3.1 percent, on concern attempts to revive the global economy will fail.

Speculation China’s economy will pick up steam drove up commodity prices yesterday. Crude oil in New York surged 9 percent to $45.38, the highest settlement since Jan. 26, while copper leapt 5.6 percent. The Reuters/Jefferies CRB Index of 19 commodities had its biggest rally this year.

BHP Billiton jumped 4.4 to A$28.31. Rio Tinto Group, the world’s third-largest miner, surged 5.2 percent to A$45.75.

Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, climbed 3.8 percent in Tokyo to 1,075 yen. Hitachi Construction and Machinery Co., the world’s largest maker of giant excavators, rose 2.7 percent to 1,246 yen.

Weaker yen

SM Prime rose 4.1 percent to 7.60 pesos in Manila, its biggest gain since Dec. 17. The company acquired three malls in China in 2007 to cut its dependence on the Philippines, where it has 33 malls.

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

Mazda Motor soared 11 percent to 137 yen after the yen depreciated against the dollar to as much as 99.53, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

Honda Motor Co., which makes 51 percent of its revenue in North America, climbed 2.5 percent to 2,260 yen. Nissan Motor Co. Ltd., Japan’s No. 3 automaker, rose 6.1 percent to 330 yen.

Baltic Dry

Mitsui O.S.K climbed 7 percent to 502 yen after the Baltic Dry Index rose 2.5 percent yesterday in London, the most since Feb. 19. Nippon Yusen K.K. advanced 4.9 percent to 405 yen, the first gain in five days.

NEC Electronics surged 8.7 percent to 537 yen. Samsung Electronics Co., the world’s largest maker of computer-memory chips, gained 2.9 percent to 503,000 won.

Profits may start improving now that the companies have pared back inventory and production, Goldman Sachs analyst James Covello wrote in a report. Semiconductor supplies were 30 percent below normal levels in January, according to Goldman estimates.

Mizuho Financial Group Inc., rose 2.8 percent to 185 yen after saying yesterday it will hold 58 percent of the company to be created through the merger of Mizuho Securities Co. and Shinko Securities Co. Shinko added 4 percent to 945 yen.

To contact the reporters for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Shani Raja in Sydney at sraja4@bloomberg.net.

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French Stocks: Archos, Axa, Casino, GDF, Schneider Electric

By Adria Cimino

March 5 (Bloomberg) -- France’s CAC 40 Index tumbled 35.16, or 1.3 percent, to 2,640.52 at 9:10 a.m. in Paris. The SBF 120 Index retreated 1.3 percent.

The following shares rose or fell in Paris. Stock symbols are in parentheses.

Arkema SA (AKE FP) slid 45 cents, or 4.2 percent, to 10.30 euros. The chemical maker reported a net loss of 72 million euros ($90.8 million) in the fourth quarter, versus a profit of 18 million euros a year earlier.

Archos SA (JXR FP) lost 13 cents, or 6.1 percent, to 2.01 euros. The maker of portable music and video players said 2008 revenue fell 27 percent to 73.9 million euros.

Axa SA (CS FP) added 26 cents, or 3.6 percent, to 7.46 euros. Europe’s second-largest insurer has avoided risky investments, has a health cash flow, and therefore doesn’t need a capital increase, founder and honorary chairman Claude Bebear said in an interview with Le Figaro.

Casino Guichard-Perrachon SA (CO FP) slipped 52 cents, or 1.1 percent, to 48.40 euros. The biggest supermarket owner in Paris said 2008 net fell 39 percent to 497 million euros, missing analysts’ estimates, after it was hurt by the cost of absorbing acquisitions.

GDF Suez SA (GSZ FP): climbed 40 cents, or 1.7 percent, to 23.94 euros. The world’s second-biggest utility reported 2008 net income of 6.5 billion euros, exceeding the average analyst estimate of 5.9 billion euros. The company will pay a special dividend of 80 euro cents a share.

Schneider Electric SA (SU FP) retreated 2.03 euros, or 4.1 percent, to 47.90. The world’s biggest maker of circuit breakers was cut to “underweight” from “overweight” at Morgan Stanley, which cited reduced demand from China.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.

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Germany Stocks Update: DAX Index Falls 41.09 to 3,849.85

By Daniel Hauck

March 5 (Bloomberg) -- Germany's benchmark stock index, the DAX Index, fell 1.06 percent at 9:05 a.m.

The index of 30 companies traded on the Frankfurt Stock Exchange fell 41.09 to 3,849.85. Among the stocks in the index, none rose, 29 fell and 1 was unchanged.

Declines in the DAX were led by Bayer Ag, Basf Se and Deutsche Telekom Ag. About 4.06 million shares traded in the DAX.

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U.K. Stocks Decline; Royal Dutch Shell, BHP, Aviva Lead Drop

By Adam Haigh

March 5 (Bloomberg) -- U.K. stocks fell ahead of the Bank of England’s interest rate decision as declining crude and copper prices pushed oil and mining companies lower and Aviva Plc posted a loss for 2008.

Royal Dutch Shell Plc and BHP Billiton Ltd. lost more than 2 percent as China’s Premier Wen Jiabao refrained from announcing an expansion of the government’s stimulus package. Aviva slumped 13 percent after the U.K.’s biggest insurer reported a loss for 2008. The Bank of England may cut its benchmark interest rate by a half point to 0.5 percent, a Bloomberg survey of economists showed.

Investors are “switching their focus toward today’s important Bank of England decision,” said Joshua Raymond, market strategist at City Index in London. “We expect volumes to be low until the BoE decision.”

The benchmark FTSE 100 Index lost 48.56, or 1.3 percent, to 3,597.31 at 9:11 a.m. in London, paring yesterday’s steepest rally in six weeks. The FTSE All-Share Index slid 1.3 percent and Ireland’s ISEQ Index slipped 1.3 percent.

Governments from the U.S. to Australia and China have introduced measures this year in an attempt to revive their economies. More than $1.1 trillion in losses at financial firms worldwide and disappointing earnings from Lloyds Banking Group and BT Group Plc pushed investors out of equities as the FTSE 100 lost 18 percent this year.

Shell, Europe’s largest oil producer, slid 2.2 percent to 1,426 pence. Crude oil for April delivery fell as much as 59 cents, or 1.3 percent, to $44.79 a barrel in electronic trading on the New York Mercantile Exchange.

BHP Billiton, the world’s largest mining company, lost 2.9 percent to 1,138 pence, as copper prices retreated. The shares rallied 13 percent yesterday.

Aviva lost 13 percent to 249 pence as it reported an 885 million pound net loss for 2008, after a 1.5 billion-pound profit the previous year.

The following stocks also rose or fell in the U.K. market. Stock symbols are in parentheses.

Aggreko Plc (AGK LN) rallied 49.5 pence, or 13 percent, to 426.75. The world’s largest provider of mobile generators said full-year profit rose to 122.7 million pounds ($173.9 million) and the company made a “very strong” start to 2009.

Michael Page International Plc (MPI LN), the U.K.’s second- largest recruitment company, lost 8.5 pence, or 4.2 percent, to 193.25 after saying full-year profit dropped 4.3 percent as it was hurt by the global recession.

Premier Foods Plc (PFD LN) rallied 5.75 pence, or 20 percent, to 34.25 pence. The second-largest U.K. bread baker plans to raise 379 million pounds ($537 million) in a share sale.

Restaurant Group Plc (RTN LN) slid 2 pence, or 1.7 percent, to 118 pence. UBS AG cut is recommendation on the U.K. owner of the Frankie and Benny’s chain to “neutral” from “buy” in a note to clients today.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net

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European Stocks, U.S. Futures Drop; Salzgitter, BHP, Rio Fall

By Sarah Jones

March 5 (Bloomberg) -- European stocks fell, led by raw- material producers as China’s Premier Wen Jiabao refrained from announcing an expansion of the government’s stimulus package and Salzgitter AG gave a disappointing forecast. U.S. futures dropped, while shares in Asia advanced.

BHP Billiton Ltd. and Rio Tinto Group retreated more than 2 percent after surging yesterday on speculation that an expansion of China’s stimulus would boost demand for metals. Salzgitter slid 7.5 percent as Germany’s second-largest steelmaker said it’s “unlikely” to break even in the first half.

Europe’s Dow Jones Stoxx 600 Index slipped 1.2 percent to 165.59 at 9:09 a.m. in London. The gauge had rebounded from a 12- year low yesterday, posting its biggest gain of 2009 on optimism that China would broaden efforts to boost growth in the world’s third-largest economy. Premier Wen said today China’s 8 percent expansion target for this year is within reach, indicating the government doesn’t see the need to increase its stimulus.

“We are very near what could be the cycle low for the stock market but there will still be a lot of false starts,” said Steen Jakobsen, chief investment officer at Capinordic in Copenhagen. “There has been a lot of hope that China can restart the engines again” for the world economy, he said in a Bloomberg Television interview.

Investors will also focus on interest-rate decisions. The Bank of England may cut its benchmark interest rate to 0.5 percent at 12 p.m. in London, while the European Central Bank is expected to reduce rates to a record low of 1.5 percent when it announces its decision 45 minutes later, according to economists surveyed by Bloomberg.

U.S., Asia

Futures on the Standard & Poor’s 500 Index fell 0.8 percent. The benchmark index for American equities rallied yesterday on speculation China would broaden its stimulus and U.S. lawmakers will reach agreement on a plan to stem mortgage defaults.

The MSCI Asia Pacific Index rose 0.6 percent, led by commodity producers and construction companies after Premier Wen pledged to “significantly increase” investment in the economy.

Governments from the U.S. to Australia have sought to introduce policies this year to bolster their economies as a deepening global recession and dividend cuts at companies from HSBC Holdings Plc to General Electric Co. have sent the MSCI World Index plunging 22 percent this year, the worst start since the gauge was created in 1970.

BHP, Rio

BHP Billiton, the world’s largest mining company, lost 3.2 percent to 1,135 pence after rallying 13 percent yesterday. Rio Tinto, the world’s third-biggest mining company, fell 2.9 percent to 1,792 pence. The shares yesterday jumped 14 percent.

Salzgitter slid 7.5 percent to 46.82 euros. The company said it should be able to “more or less breakeven” at the pretax level in 2009 if there is a “notable recovery” in the economy.

Royal BAM Groep NV slumped 12 percent to 5.58 euros. The biggest Dutch builder posted a fourth-quarter loss and dropped sales and profit targets for this year after demand for homes deteriorated.

Earnings for 252 companies in the Stoxx 600 that have reported earnings since Jan. 12 have dropped 94 percent, according to Bloomberg data. That compares to a 58 percent contraction in profit for the 465 companies that have reported results in the S&P 500 during the same period.

Aviva, Michael Page

Aviva Plc dropped 13 percent to 249 pence. The U.K.’s biggest insurer reported a 2008 net loss of 915 million pounds ($1.3 billion), after “significant unrealized losses” related to its corporate bond holdings.

Michael Page International Plc decreased 3.8 percent to 194 pence. The U.K.’s second-largest recruitment company said full- year profit declined 4.3 percent to 97.3 million pounds as it was hurt by the global recession.

“Given the current uncertainty over the economic outlook, it is extremely difficult to predict the performance of our business in the short term,” Chief Executive Officer Steven Ingham said in a statement.

EasyJet Plc slipped 2.8 percent to 302 pence. Europe’s second-biggest discount airline said passenger traffic declined 6.8 percent to 3.02 million passengers last month.

Anheuser-Busch InBev NV added 2.1 percent to 19.85 euros. The world’s largest brewer said it would cut capital spending by at least $1 billion this year, and will now pare $2.25 billion a year in costs by 2011, up from the previous $1.5 billion target.

InBev posted a 41 percent drop in full-year profit to 1.29 billion euros ($1.63 million), missing the average analyst estimate of 1.66 billion euros, as costs to finance the merger that created the company outweighed new revenue from the Budweiser brand.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

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Angang, BDO Bank, Linc, Hutchison: Asia Ex-Japan Equity Preview

By Ian C. Sayson

March 5 (Bloomberg) -- The following companies may have unusual price changes today in Asia trading, excluding Japan. Stock symbols are in parentheses, and share prices are from the previous close, unless noted otherwise.

Angang Steel Co. (000898 CH): Iron ore prices are likely to drop to 2007 levels this year, Chinese steelmaker Benxi Iron & Steel Group Chairman Yu Tianchen said. Angang, China’s second- largest steelmaker, rose 5.4 percent to 7.95 yuan.

Banco de Oro Unibank Inc. (BDO PM): The Philippines’ largest lender by assets, posted its first annual profit decline in eight years on losses tied to securities of bankrupt Lehman Brothers Holdings Inc. Profit was 2.2 billion pesos ($45 million), the banks said, without giving comparative figures. Profit in 2007 from 6.52 billion pesos. The stock fell 1.2 percent to 20.50 pesos.

Chung Hung Steel Corp. (2014 TT): The Taiwanese producer of hot-rolled and cold-rolled steel sheets and steel pipes said its sales in February fell 7.42 percent to NT$3.60 billion ($103 million) from a year earlier. The stock rose 1.9 percent to NT$10.65.

Datang International Power Generation Co. (991 HK): The unit of China’s second-biggest power company, will keep this year’s capital spending near 2008 levels, Chairman Zhai Ruoyu said. The stock gained 5.6 percent to HK$3.23.

Hutchison Telecommunications International Ltd. (2332 HK): The emerging-markets phone carrier controlled by billionaire Li Ka-shing said profit fell 97 percent to HK$1.88 billion ($242 million) in 2008 because a gain from an asset sale a year earlier wasn’t repeated. The stock rose 1 percent to HK$2.12.

Korea Gas Corp. (036460 KS): The world’s largest buyer of liquefied natural gas said it will pay a final dividend of 1,170 won on 2008 earnings. The total payout will be 85 billion won ($55 million), the company said today in a regulatory filing. The stock rose 5 percent to 38,850 won.

KT Corp. (030200 KS): South Korea’s largest phone and Internet company had its credit-rating outlook lowered to stable from positive by Moody’s Investors Service, which said the company’s earnings prospects are weakening while its debt burden is increasing. The stock rose 2.4 percent to 37,800 won.

Linc Energy Ltd. (LNC AU): The Australian producer of cleaner-burning fuels said in a filing to the stock exchange that it’s still in talks with prospective Chinese buyers for the sale of its Emerald coal tenements in Queensland. The company said it “remains positive” that sale will be completed in the “near term.” The stock decreased 12 percent to A$1.

Princeton Technology Corp. (6129 TT): The Taiwanese manufacturer of integrated circuits for multimedia audio and other electrical home appliances said its February sales contracted 57 percent to NT$82.22 million from a year earlier. The stock increased 6.7 percent to NT$2.87.

QL Resources Bhd. (QLG MK): The Malaysian producer of fishmeal and palm oil said it has no plans to carry out a rights offer. The company was responding to a Star newspaper report that cited QL as among companies with potential to sell stock to existing shareholders. QL was unchanged at 2.40 ringgit.

SM Investments Corp. (SM PM): The holding company of Henry Sy, the richest Philippine tycoon, said its profit rose 16 percent to a record 14 billion pesos last year as its shopping malls, grocers and department stores made up for lower earnings at its bank units. The stock rose 0.5 percent to 192 pesos.

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

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Japan Stocks Advance on China Growth Optimism; Mazda Jumps

By Masaki Kondo

March 5 (Bloomberg) -- Japanese stocks advanced for a second day on speculation an expanded stimulus program in China will boost demand for resources and machinery.

Inpex Corp., Japan’s largest oil and gas explorer, climbed 4.1 percent after crude increased to a near six-week high. Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, jumped 3.9 percent. Mazda Motor Corp., the nation’s fourth-largest automaker, added 3.2 percent after the Japanese currency weakened, boosting its earnings prospects.

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

The Nikkei 225 Stock Average climbed 45.54, or 0.6 percent, to 7,336.50 as of 9:03 a.m. in Tokyo. The broader Topix index rose 4.63, or 0.6 percent, to 736.67.

Yesterday, the Nikkei reversed to a gain in the afternoon after a former Chinese statistics bureau head told reporters Premier Wen Jiabao will announce a new economic package on top of a 4 trillion-yuan ($585 billion) spending plan. China’s parliament convenes its annual meeting today, and Wen will give his annual address to the nation’s legislature.

The Standard & Poor’s 500 Index climbed 2.4 percent in New York, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

Commodities, Yen

Speculation China’s economy will pick up steam drove up commodity prices. Crude oil for April delivery surged 9 percent to $45.38, the highest settlement since Jan. 26. Copper futures for May delivery leapt 5.6 percent.

The yen depreciated against the dollar to as much as 99.49 yesterday, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

The Finance Ministry today said Japanese companies cut spending last quarter at the fastest pace in a decade. Capital spending excluding software fell 18.1 percent in the three months to Dec. 31 from a year earlier, while economists had estimated a 15.3 percent drop.

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

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Asian Stocks Rise, Led by BHP, Komatsu, on China Stimulus Plan

By Masaki Kondo

March 5 (Bloomberg) -- Asian stocks gained for a second day, led by commodity and financial companies, on speculation an expanded economic stimulus plan in China will spur demand for raw materials and machinery.

BHP Billiton Ltd., the world’s biggest mining company, soared 6.3 percent in Sydney after copper jumped to a three month high in New York and the Reuters/Jefferies CRB Index of 19 commodities had its biggest rally this year. Mizuho Financial Group Inc., Japan’s second-biggest listed bank, jumped 4.4 percent after setting the terms for the delayed merger of its two brokerage affiliates.

“People are keen to see how much more money China will pump into its economy,” Mitsushige Akino, who oversees about $615 million at Tokyo-based Ichiyoshi Investment Management Co., said in an interview with Bloomberg Television. “If the country doubles its planned spending, the impact will be huge.”

The MSCI Asia Pacific Index gained 0.9 percent to 72.93 as of 9:09 a.m. in Tokyo. Three stocks rose for each one that fell. The gauge has slumped 49 percent in the past year as the financial crisis dragged the world’s largest economies into recession.

Japan’s Nikkei 225 Stock Average climbed 1.1 percent, while Australia’s S&P/ASX 200 Index rose 1.3 percent. All markets open for trading in the region advanced.

China will “significantly increase” investment in 2009 to counter a slowdown in the world’s third-biggest economy, Premier Wen Jiabao said in a work report presented to the National People’s Congress in Beijing today.

Reversal

The MSCI Asia Pacific yesterday reversed a 1.6 percent decline to end the day 0.7 percent higher after a former Chinese statistics bureau head told reporters the premier would announce a new economic package on top of a 4 trillion-yuan ($585 billion) spending plan. China’s parliament convenes its annual meeting today, and Wen will give his annual address to the nation’s legislature.

Futures on the Standard & Poor’s 500 Index added 0.2 percent. The U.S. gauge climbed 2.4 percent in New York yesterday, breaking a five-day losing streak, while Europe’s Dow Jones Stoxx 600 Index leapt 3.9 percent, the most since Dec. 8.

Governments from the U.S. to China and Australia have sought to introduce policies this year to ease the financial crisis and bolster their economies. India’s central bank yesterday cut its key interest rate to a record low.

Commodities Surge

Speculation China’s economy will pick up steam drove up commodity prices. Crude oil for April delivery surged 9 percent to $45.38, the highest settlement since Jan. 26. Copper futures for May delivery leapt 5.6 percent.

BHP Billiton jumped A$1.71 to A$28.82. Rio Tinto Group, the world’s third-largest miner, surged 5.3 percent to A$45.79. Komatsu Ltd., the world’s second-biggest maker of earthmoving equipment, climbed 5.7 percent in Tokyo to 1,095 yen.

Mizuho rose 8 yen to 188 after saying yesterday it will hold 58 percent of the company to be created through the merger of Mizuho Securities Co. and Shinko Securities Co. Shinko surged 6.9 percent.

Canon Inc., which gets a third of its sales from the Americas, added 1.1 percent to 2,330 yen after the yen depreciated against the dollar to as much as 99.49 yesterday, the weakest level since Nov. 5, from 98.44 at the 3 p.m. close of stock trading in Tokyo.

The company’s operating profit rises by 9.1 billion yen ($92 million) for every 1 yen decline, according to its earnings report on Jan. 28.

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

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Major Market Movers: Services Day

Daily Forex Fundamentals | Written by Crown Forex | Mar 04 09 08:18 GMT |

The services sector has been hit really hard as a result of the ongoing financial crisis, which led the world's major economies into the depth of recession, services data will be released today from both Europe and the United States and should continue to highlight the ongoing weakness prevailing over the sector inline with other sectors that has been suffering the misery of the worst financial crisis since the Great Depression. Germany will release its purchasing managers index for the services sector for the month of February, the index is expected to remain steady at 41.6, on the other hand the euro zone services PMI is expected to remain steady at 38.9 as well, and the euro zone PMI composite index is expected to remain steady at 36.2. The German economy which represents the euro zone largest economy continues to fall deeper in recession, as lower domestic and foreign demand have had its toll on the Germany economy since it depends heavily on exports, and the fact that global demand is faltering indeed affected the German economy, which continues to contract amid the ongoing global recession. Meanwhile the euro zone economy have been falling deeper in recession as its major economies contracted deeply and those economies including Germany, France, Italy, and Spain are expected to fall deeper in recession, especially as the European Central Bank failed so far to assure investors and consumers over the outlook for the euro zone economy. The ECB has been reluctant to cutting its benchmark interest rates despite that the area's growth continued to contract deeply, and the ECB preferred to wait until further developments emerge, which meant the ECB stopped short from cutting its benchmark interest rates last month and the ECB opted to wait till this month before they cut rates again. Members of the ECB though signaled that the benchmark interest rates will not fall to zero and they stressed that zero interest rates would cause them trouble in the future, however against an unprecedented crisis like the one we're witnessing now, one must act in an unprecedented measures and accordingly the ECB should not be counting much on the supply side and accordingly they should support their voodoo economics with some effective monetary policy measures including reducing their benchmark interest rates. Moving on to Europe's second largest economy, the U.K. economy continued to contract amid the worst financial crisis since the Great Depression, as the U.K. economy continues to feel the pinch and continues to fall deeper in recession. The U.K. will release today their services PMI for the month of February, the index is expected to contract further amid the ongoing weakness in economic activity, analysts expect the services PMI will fall to 41.9 from the prior estimate of 42.5. The Bank of England has been very aggressive over the last few months, as they slashed their interest rates down to 1.00 percent and they still left the door open for further easing should they feel they need to do so. The BoE are concerned over the outlook for inflation, as the ongoing recession and falling energy and commodity prices continued to suppress inflation rates and continues to threaten with deflation, as downside risks to inflation increase as a result of lower consumer spending, tightened credit conditions and falling home values. Moving on to the world's largest economy, the U.S. economy remains on the receiving end of this crisis, as so far all the measures taken failed to restore stability in the financial markets or the financial system, and accordingly they failed to restore economic growth. The Institute for Supply Management will release today their services index for the month of February, the index is expected to drop to 41.0 from the prior estimate of 42.9, the services sector continues to deteriorate further amid the ongoing recession, which continues to undermine growth prospects especially as companies continue to reduce their workforce as demand falters deeply. The ADP employment report will be released today for the month of February, the private sector probably shed 630,000 jobs in February after shedding 522,000 jobs back in January, though a much worse revision for the prior estimate is rather very likely. The labor sector continues to deteriorate further amid the ongoing recession, as companies which are struggling to find funds continue to reduce their costs by laying off more workers, as demand continues to fall and accordingly companies are forced to retrench their costs. The ADP estimate will be released ahead of Friday's infamous jobs' report, which is expected to show that the unemployment rate rose in February to 7.9 percent. Also the U.S. Treasury Secretary Timothy Geithner will be testifying today before the Congress over the recent developments in financial markets and over the outlook for economic growth, the testimony should not bring anything new that we do not know, however it might include some hints over the new financial bailout plan. Also the Fed will release its Beige Book, which should signal further weakness in all economic sectors around the economy and that labor market conditions continued to deteriorate, while financial markets conditions also remained highly unstable, yet the report could signal the rebound in spending, as consumers seeking bargains were encouraged to spend their money in the post holiday discount season. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.

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