Brazil Real Weakens Beyond 1.80 for First Time Since January

By Adriana Brasileiro

Sept. 11 (Bloomberg) -- Brazil's real weakened beyond the 1.80-per-dollar level for the first time since January after a split vote by central bank directors yesterday signaled the pace of interest-rate increases may slow.

The real dropped 1.9 percent to 1.8222 per dollar at 8:57 a.m. New York time, from 1.7878 yesterday. The currency earlier touched 1.8237, the weakest since Jan. 23.

Brazilian policy makers raised by a vote of 5-3 the benchmark overnight rate to 13.75 percent from 13 percent in a bid to control inflation. The three dissenters voted for a half- point increase. The bank has raised the rate four times this year, bringing it up from a record low of 11.25 percent in April.

The yield on Brazil's zero-coupon bonds due in January 2010 fell 7 basis points, or 0.07 percentage point, to 14.73 percent, according to Banco Votorantim. The yield on the overnight futures contract for January delivery rose 5 basis point to 14.01 percent.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

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German Stocks Decline for Third Day; BMW, Metro, Postbank Drop

By Stefanie Haxel

Sept. 11 (Bloomberg) -- German stocks fell to the lowest in almost two months as concern mounted that slowing economic growth and more credit-market losses will hurt earnings.

Bayerische Motoren Werke AG sank the most in three weeks and Metro AG dropped for the first time in four days, leading declines among automakers and consumer companies. Deutsche Postbank AG slid 5.9 percent on speculation that Deutsche Bank AG will buy less than 30 percent of the lender.

The benchmark DAX Index slipped 104.84, or 1.7 percent, to 6,105.45 as of 2:41 p.m. in Frankfurt, the lowest since July 15. DAX futures expiring in September decreased 1.4 percent to 6,116.5. The HDAX Index of the country's 110 biggest companies lost 1.6 percent.

The DAX has fallen 24 percent this year as credit losses and writedowns at financial firms worldwide topped $500 billion and slowing economic growth damped the outlook for earnings. Analysts cut their recommendations for Lehman Brothers Holdings Inc. today after the bank posted a wider-than-estimated third-quarter loss.

``Lehman is permanently occupying the markets,'' said Fidel Helmer, head of equity trading at Hauck & Aufhaeuser in Frankfurt. As long as it's not clear ``what will happen to Lehman, markets will remain alienated,'' he said in a Bloomberg Television interview.

A government report today showed that more Americans than forecast filed initial claims for unemployment insurance last week, while total benefit rolls rose to the highest level in almost five years, as companies reduced staff to maintain profits in a slowing economy.

Risk Provisions

BMW sank 88 cents, or 3 percent, to 28.13 euros, the steepest decline since Aug. 21. The carmaker is preparing to set aside risk provisions as the problems of its leasing business are rising, Handelsblatt reported on its Web site last night, citing Chief Financial Officer Michael Ganal.

MAN AG, Europe's third-largest truckmaker, retreated 2.84 euros, or 5 percent, to 2.84 euros.

Metro lost 87 cents, or 2.2 percent, to 38.97 euros. Adidas AG, the world's second-largest sporting goods maker, slipped 1.23 euros, or 3.2 percent, to 37.15.

Deutsche Postbank shares plunged 2.75 euros, or 5.9 percent, to 43.80, the steepest drop since Aug. 19. Parent Deutsche Post added 8 cents, or 0.5 percent, to 16.03 euros.

Deutsche Bank lost 2.30 euros, or 3.8 percent, to 58.70. Germany's largest bank may buy less than 30 percent of Postbank, rather than purchase the whole company, to thwart rival bidders and avoid making a mandatory takeover offer, a person with knowledge of the matter said Sept. 9.

`Bad Deal'

``This is a bad deal for Postbank and its investors,'' said Johannes Thormann, a Dusseldorf-based analyst at HSBC Trinkaus & Burkhardt AG who recommends investors buy the stock. ``Deutsche Bank gets its foot in the door but doesn't have to pay a high premium and make an offer to remaining shareholders.''

Deutsche may pay about 2.5 billion euros ($3.5 billion) for a stake of just under 30 percent, Frankfurter Allgemeine Zeitung reported, without saying where it got the information.

Deutsche Bank also agreed to buy a 40 percent holding in Russian investment management company UFG Invest to bolster its asset management business.

The following stocks also rose or declined in German markets. Symbols are in parentheses.

Conergy GY (CGY GY) rallied 54 cents, or 6.7 percent, to 8.64 euros, the biggest increase in two weeks. South Korea's LG Electronics Inc. agreed on a joint-venture with Germany's second- largest solar company to make solar cells.

E.ON AG (EOAN GY) dropped 70 cents, or 1.9 percent, to 35.30 euros, the lowest in more than a year. Goldman Sachs Group Inc. removed shares of the country's biggest utility from its ``conviction buy'' list.

Fresenius Medical Care AG (FME GY) advanced 74 cents, or 2 percent, to 37.95 euros, the highest since January. JPMorgan Chase & Co. lifted its share-price estimate for the world's biggest provider of kidney dialysis 11 percent to 47 euros.

Nordex AG (NDX1 GY) rallied 1.20 euros, or 5.8 percent, to 21.80, the steepest gain in six weeks. The windmill maker got a 500 million-euro ($698 million) order from Danish energy provider Scan Energy A/S.

Separately, Chief Executive Officer Thomas Richterich warned of hostile takeover dangers in the environmental technology industry, Financial Times Deutschland said, citing an interview.

To contact the reporter on this story: Stefanie Haxel in Frankfurt at shaxel@bloomberg.net.

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U.K. Stocks Decline; Home Retail, AstraZeneca Lead the Retreat

By Henrietta Rumberger and Adam Haigh

Sept. 11 (Bloomberg) -- U.K. stocks fell for a third day on renewed concern the slowing U.K. economy and inflationary pressures are weighing on retailers, mortgage lenders and travel companies.

Home Retail Group Plc sank 5.9 percent after Britain's second-largest home-improvement chain reported lower sales. HBOS Plc, the U.K.'s biggest mortgage lender, slid 5.9 percent as Bank of England policy maker David Blanchflower said job losses will triple as the economy slows, while British Airways Plc led a retreat in airline stocks. The U.K.'s two largest drugmakers AstraZeneca Plc and GlaxoSmithKline Plc both dropped more than 2 percent after two brokerages recommended selling the shares.

The FTSE 100 dropped 76.6, or 1.4 percent, to 5,289.6 at 1:04 p.m. in London. The FTSE All-Share Index lost 1.5 percent and Ireland's ISEQ Index retreated 1.9 percent.

``Eyes have now turned back to the underlying difficulties which haven't changed,'' said Richard Hunter, head of U.K. equities at Hargreaves Lansdown Stockbrokers, a unit of Hargreaves Lansdown Plc, which has $21.5 billion under management. ``The general slowdown has meant people are less likely to spend on discretionary items. We need corporate earnings to start improving and this is not happening,'' he added.

The benchmark FTSE 100 today extended its 18 percent slump so far this year as the economy cools and banks from Barclays Plc to Royal Bank of Scotland Group Plc have been forced to raise capital as losses topped $500 billion at financial companies worldwide.

Home Retail retreated the most in two months, down 5.9 percent to 227.5 pence after saying second-quarter same-store sales fell at its Homebase and Argos outlets as a housing slump worsened and consumer confidence slid to a four-year low.

Revenue Drops

Revenue at stores open at least a year declined 5.8 percent at Argos and 8.3 percent at Homebase in the three months ended Aug. 30, the Milton Keynes, England-based company said in a statement.

William Morrison Supermarkets Plc declined 6.1 percent to 253.75 pence, the steepest retreat since 2004. The smallest of the four main U.K. food retailers said first-half profit fell 3.1 percent after income from real-estate sales dwindled and its tax bill rose.

HBOS slid 5.9 percent to 282 pence. Bradford & Bingley Plc, the biggest lender to U.K. landlords, lost 5.5 percent to 39 pence. Blanchflower said in testimony to lawmakers unemployment in Europe's second-largest economy will rise to 60,000 a month, from its current level of 20,000.

British Airways Declines

British Airways, Europe's third-biggest airline, lost 5.4 percent to 246 pence. Ryanair Holdings Plc, the region's largest discount airline, slid 3.6 percent to 2.65 euros.

AstraZeneca fell the most in almost eight months, off 3.9 percent to 2,539 pence. The U.K.'s second-largest drugmaker was cut to ``sell'' from ``neutral'' at Goldman Sachs Group Inc.

``The shares are not supported at current levels by near- term fundamentals and we believe AstraZeneca is likely to underperform its pharma peers,'' London-based analyst John Murphy wrote in a note.

GlaxoSmithKline lost 2.6 percent to 1,246.5 pence. Exane BNP Paribas downgraded the shares to ``underperform'' from ``outperform,'' saying the stock now enters ``a more risky period'' having outperformed the industry by 10 percent during the last three months.

Separately, Moody's gave the European pharmaceutical industry outlook a negative rating for the second straight time, saying drugmakers are struggling to develop products to replace sales lost when the patents expire.

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

U.K. companies:

Galliford Try Plc (GFRD LN) slid 2.75 pence, or 4.1 percent, to 63.25. The U.K. construction company that's upgrading Wimbledon's Centre Court tennis stadium said annual profit fell 2.5 percent after it revamped its housing division amid a slump in demand.

Premier Farnell Plc (PFL LN), the U.K. electronic and industrial products supplier founded in 1939, lost 8 pence, or 4.2 percent, to 180.5 after saying sales dropped in the U.S., Europe, and the U.K.

``Results are slightly behind our expectations and, while they detail impressive earnings growth, they also show a continued slowdown in sales growth and lower operating margins,'' Investec Securities analyst Guy Hewett wrote in a note today. ``We expect this negative trend to continue as the economic slowdown bites and now believe the group will do well to maintain earnings next year.''

Irish companies:

Bank of Ireland Plc (BKIR ID) slid 6.3 percent to 5.17 euros, Allied Irish Banks Plc (ALBK ID), lost 2.6 percent to 7.89 euros, and Anglo Irish Bank Plc (ANGL ID) retreated 4.3 percent to 5.13 euros. Dresdner Kleinwort cut its 2009 and 2010 earnings estimates for Irish banks on concern over rising bad debt levels and shortfalls in capital.

To contact the reporters on this story: Henrietta Rumberger in Frankfurt at hrumberger@bloomberg.net; Adam Haigh in London at ahaigh1@bloomberg.net

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European Stocks, U.S. Futures Decline; Home Retail, Lehman Drop

By Sarah Jones

Sept. 11 (Bloomberg) -- European stocks fell for a third day as concern deepened the economic slowdown will hurt earnings for retailers and financial firms, overshadowing a rebound in mining and oil shares. U.S. index futures and Asian shares also declined.

Home Retail Group Plc sank 6.1 percent after the home- improvement chain reported lower sales. William Morrison Supermarkets Plc tumbled the most in four years after Chief Executive Officer Mark Bolland said he expects ``a tough second- half.'' Bank of Ireland Plc fell 4.4 percent after Dresdner Kleinwort warned of rising bad-debt levels. Lehman Brothers Holdings Inc. slumped 25 percent as Citigroup Inc. and Goldman Sachs Group Inc. downgraded the stock.

Europe's Dow Jones Stoxx 600 Index lost 1.6 percent to 273.03 as of 1:34 p.m. in London, extending this year's drop to 25 percent. Futures on the Standard & Poor's 500 Index fell 1.5 percent. The MSCI Asia Pacific Index decreased 2.4 percent.

``Economies around the world are clearly slowing,'' said Jeremy Beckwith, London-based chief investment officer at Kleinwort Benson, which oversees the equivalent of $13.1 billion. ``We will see substantial earnings revisions. I think people are getting fearful now and will get more fearful.''

Stocks extended declines after a report showed more Americans than forecast filed initial claims for unemployment insurance last week, while total benefit rolls rose to the highest level in almost five years.

National benchmark indexes dropped in all 18 western European markets. Germany's DAX declined 1.8 percent, as did the U.K.'s FTSE 100 lost 1.3 percent and France's CAC 40.

Anglo American Plc gained 3.1 percent as mining shares at their cheapest in seven years lured investors, while BG Group Plc rallied 4.3 percent on an oil discovery.

Cutting Forecast

Stocks retreated yesterday after the European Commission cut its forecast for the region's economic growth and investors speculated bank losses will increase. More than $15 trillion has been erased from global equities in 2008 as accelerating inflation and $512 billion in bank writedowns and losses threaten economic growth.

Home Retail sank 6.2 percent to 226.75 pence, the steepest drop since July. The owner of Britain's second-largest home- improvement chain reported lower same-store sales at its Homebase and Argos stores as a housing slump worsened and consumer confidence slid to a four-year low.

Revenue at Argos stores open at least a year declined 5.8 percent in the second quarter. At the Homebase chain, sales in the 13-week period fell 8.3 percent on that basis.

Morrison declined 6.9 percent to 251.75 pence after the smallest of the four main U.K. food retailers said it sees a ``highly competitive'' second half and plans to invest in price cuts. First-half profit declined 3.1 percent after income from real-estate sales dwindled and the tax bill rose.

Negative Data

Kingfisher Plc, Europe's largest home-improvement retailer, sank 6.5 percent to 128.6 pence.

Bernstein Research downgraded the shares to ``market- perform'' from ``outperform,'' saying the Confederation of British Industry data has been as ``negative as it gets'' in July and August on U.K. furniture and home appliances sales.

Analysts have slashed earnings estimates this year as the global economy cooled and the biggest surge in mortgage defaults in at least three decades pushed banks to write down assets. Profit for companies in the Stoxx 600 will slump 2.1 percent in 2008, down from 11 percent growth forecast at the end last year, according to data compiled by Bloomberg.

Bank of Ireland sank 7.1 percent to 5.13 euros after Dresdner cut its recommendation for the Dublin-based lender to ``sell'' from ``reduce.'' Allied Irish Banks Plc lost 3.1 percent to 7.85 euros after analysts also downgraded the nation's largest lender by market value to ``sell'' from ``hold.'' The shares recently traded at 8.03 euros.

Bad Debts

``We forecast a dramatic rise in bad debts across the Irish banks for 2009 and 2010,'' Dresdner analysts wrote in a note to investors. ``Allied and BoI now look short on capital for 2009.''

Dresdner reduced its earnings per share estimate for Irish lenders next year by an average 33 percent.

Lehman declined 25 percent to $5.46 in pre-market trading. Citigroup downgraded the shares to ``hold'' from ``buy,'' cutting the annual earnings-a-share estimate for the New York- based firm to a loss of $11.32 a share, compared with an earlier estimated loss of $8.26 a share.

Goldman Sachs changed its rating to ``neutral'' from ``buy'' and lowered its six-month price estimate by two-thirds to $7.

Oppenheimer & Co. analyst Meredith Whitney lowered her full- year earnings estimate for Lehman, saying the bank faces further writedowns after posting the biggest loss in its 158-year history yesterday. Whitney said Lehman may have an annual per-share loss of $10.24, compared with an earlier forecast of a $6.67 loss.

Bounce Overdue

Anglo American Plc, the second-largest, advanced 3.2 percent to 2,266 pence. Xstrata Plc increased 2.6 percent to 2,283 pence.

``We are long overdue a bounce'' in mining shares, said Tom Hougaard, the London-based chief market strategist at City Index Ltd. ``When you look at the mining sector, there has been a large drop in all the parameters. So much of the bad news has already been priced in.''

The Stoxx 600 Basic Resources Index has slumped 21 percent since July, pushing shares to their cheapest since April 2001. The index yesterday traded at 8.1 times earnings.

BG Group climbed 4.6 percent to 1,103 pence after the U.K.'s largest oil and gas company, together with partners Petroleo Brasileiro SA and Portugal's Galp Energia SGPS SA, said they found ``another first-class'' oil field in the Santos Basin.

The Iara oil field holds an estimated 3 billion to 4 billion barrels of recoverable light crude oil.

Galp Energia, Portugal's largest oil company, jumped 6.7 percent to 12.12 euros.

CNP, Aegon

CNP Assurances SA and Aegon NV led a retreat by insurers after UBS AG downgraded the shares.

CNP, France's largest life insurer, lost 2.1 percent to 79.30 euros and Aegon, the owner of the U.S. insurer Transamerica Corp., slid 2.8 percent to 8.23 euros. UBS cut its rating on the companies' shares to ``sell'' from ``neutral.''

``Aegon needs to boost return on equity to improve the risk/return profile,'' London-based analyst Marc Thiele wrote in a note to clients today. He also fears ``more setbacks to new business'' at CNP.

Axa SA dropped 3.9 percent to 21.86 euros. UBS also lowered its recommendation for Europe's second-biggest insurer to ``neutral'' from ``buy.''

Bayerische Motoren Werke AG, the world's largest maker of luxury cars, lost 2.9 percent to 28.15 euros after Handelsblatt reported on its Web site that the carmaker is preparing to set aside higher risk provisions as problems with its leasing business are increasing.

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

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Birinyi Says He's Been Actively Trading Financial Shares

By Eric Martin and Carol Massar

Sept. 11 (Bloomberg) -- Laszlo Birinyi, the investor who correctly predicted financial stocks would tumble in October, said he has been actively trading bank and brokerage shares and isn't buying them for the long term.

``We've been fairly active trading some of these stocks,'' Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, said in an interview on Bloomberg Television. ``At the same time, we have been on both sides of the trade. I continue to be in a trading mode and not really trying to pick up the long-term investment trends, because I don't think they exist right now. I'm not really excited about holding financial stocks here for the long term.''

Birinyi's October warning that financial shares would drop preceded a 38 percent plunge in the S&P 500 Financials Index, spurred by writedowns and credit losses stemming from the subprime-mortgage market's collapse that exceeded $510 billion worldwide.

Birinyi said June 26 that buying and holding U.S. stocks is ``very treacherous'' because share prices are swinging too much.

Birinyi worked more than 10 years on the trading desk at Salomon Brothers Inc. before starting his research and money management firm in 1989. He is known for pioneering money flow analysis, which compares the dollar amounts moving into or out of a stock or index to establish whether it is being more aggressively bought or sold.

To contact the reporters on this story: Eric Martin in New York at emartin21@bloomberg.net; Carol Massar in New York at cmassar@bloomberg.net.

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Agrium, Canadian Pacific, Lululemon: Canadian Equity Preview

By John Kipphoff

Sept. 11 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading today. Stock symbols are in parentheses, and share prices are from yesterday's close in Toronto.

The Standard & Poor's/TSX Composite Index rose 2.9 percent to 12,497.15.

Agrium Inc. (AGU CN): Chief Executive Officer Mike Wilson says an increase in global demand for grains and agriculture products will continue, and he's increasing his stake in the company 13 percent to take advantage of it. Wilson said he'll also discuss implementing a share buyback program with the company's board. The shares, down 35 percent from a June record, rose 5.2 percent to C$74.99 yesterday.

Banro Corp. (BAA CN): The company planning to build a gold mine in the Democratic Republic of Congo agreed to sell 11 million units at $1.75 (C$1.88) each to a group of brokerages including CIBC World Markets. The deal will raise $19.25 million, Toronto-based Banro said in a statement on Marketwire. The shares dropped 17 percent and have fallen 85 percent this year.

Bronco Energy Ltd. (BCF CN): The company exploring for oil and gas in Alberta had its share-price estimate lowered 29 percent to C$12 at RBC Capital Markets. The shares fell 10 percent to C$5.75.

Canadian Pacific Railway Ltd. (CP CN): A late harvest, a strike and port shutdowns may mean that third-quarter profit at the country's second-largest railroad will fall short of analysts' estimates, RBC Capital Markets analyst Walter Spracklin wrote in a note to clients today.

Spracklin cited the company's presentation at a conference in Toronto yesterday. He lowered his profit estimates for 2008, 2009 and 2010, and cut his share-price target by C$2 to C$66. The shares rose 1.6 percent to C$60.82.

Corel Corp. (CRE CN): The maker of WordPerfect software will reduce its workforce by 90 employees, or about 8 percent. The move will lead to the company booking costs of $2.8 million (C$3 million) in the fourth quarter, Ottawa-based Corel said in a statement on Business Wire.

The company also said that no agreement has been reached in talks with a third party about a sale of Corel, first disclosed Aug. 20. The shares rose 5.9 percent to C$11.92 on Sept. 4.

Garda World Security Corp. (GW CN): The provider of airport passenger screening and armored car services had its share-price estimate reduced by 25 percent to C$15 at RBC Capital. The shares fell 3.6 percent to C$10.88.

Harry Winston Diamond Corp. (HW CN): The co-owner of the Diavik diamond mine in northern Canada was raised to ``overweight'' from ``market weight'' by Thomas Weisel Partners analyst Matthew O'Keefe in Toronto. The shares rose 10 percent to C$19.15 yesterday, the most in eight years, after the company reported second-quarter profit that beat analysts' estimates.

Lululemon Athletica Inc. (LLL CN): The Canadian athletic- wear retailer that quadrupled earnings last year said second- quarter profit more than doubled to $11.1 million from $5.12 million, as the company opened new stores.

Per-share earnings before one-time items of 18 cents exceeded the average of analyst estimates compiled by Bloomberg, while the revenue of $85.5 million was 1.7 percent less than predicted. Shares fell 1.1 percent to C$19.23.

Nortel Networks Corp. (NT CN): UBS AG's Nikos Theodosopoulos lowered his 2008, 2009 and 2010 earnings and sales estimates for North America's largest maker of phone gear, citing a slowdown in capital spending at telephone companies. Nortel's share-price estimate was cut 20 percent to $6 (C$6.43) by the New York-based analyst. The shares fell 2 percent to C$5.46.

Sprott Inc. (SII CN): The Canadian hedge fund manager that went public in May expects to record net inflows in the third quarter even as stock prices decline, Chief Executive Officer Eric Sprott said.

Separately, Sprott had its share-price target cut 39 percent to C$5.50 by RBC Capital Markets analyst Geoffrey Kwan in Toronto. The shares rose 4.5 percent to C$4.85. They've lost 52 percent since Toronto-based Sprott first sold stock at C$10.

Viterra Inc. (VT CN): Canada's biggest grain handler was raised to ``outperform'' from ``neutral'' at Credit Suisse. The shares rose 1.9 percent to C$10.40 yesterday after Viterra posted a 69 percent increase in third-quarter profit.

Yellow Pages Income Fund (YLO-U CN): The owner of Canada's largest directories publisher was rated ``neutral'' in new coverage at Credit Suisse. The shares rose 2.8 percent to C$9.64.

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

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CSX, Lehman, Joy Global, New York Times: U.S. Equity Preview

By Jeff Kearns

Sept. 11 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading. Stock symbols are in parentheses, and share prices are as of 8 a.m. in New York, unless otherwise specified.

Actel Corp. (ACTL US): The maker of electronic equipment said third-quarter revenue may fall as much as 9 percent from the second-quarter. The company had previously predicted growth of as much as 1 percent. The shares dropped 5 percent to $10.74 in extended trading yesterday.

Cia. Siderurgica Nacional SA (SID US) American depositary receipts rose 17 percent to $29. Brazil's third-largest steelmaker was upgraded to ``buy'' from ``underperform'' by Merrill Lynch & Co. on expectations the company may sell its iron-ore unit for $4.1 billion more than investors expect.

CSX Corp. (CSX US) rose 3.9 percent to $57. The third- largest U.S. railroad said in a statement sent by PRNewswire that it forecast 2008 profit of as much as $3.75 a share. Analysts had expected $3.58 a share, the average of 16 estimates in a Bloomberg survey.

Joy Global Inc. (JOYG US) increased 0.3 percent to $45.18. The maker of mining equipment doubled the amount of its share repurchase program to $2 billion.

L-1 Identity Solutions Inc. (ID US): The maker of security software predicted annual profit of 12 cents a share, compared with the average analyst estimate of 16 cents. L-1 Identity shares lost 2.7 percent to $15.97 in extended trading.

Lehman Brothers Holdings Inc. (LEH US) dropped 29 percent to $5.14. The shares were cut to ``hold'' from ``buy'' at Citigroup Inc., which cited a possible cut in the credit rating and deteriorating capital. Oppenheimer & Co. lowered its 2008 earnings estimate for Lehman, saying the bank faces further writedowns after posting the biggest loss in its history.

New York Times Co. (NYT US): Mexican billionaire Carlos Slim and his family acquired a 6.4 percent stake in the newspaper publisher, according to a regulatory filing today. The shares added 6.4 percent to $14.86 in extended trading.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

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U.S. Stock-Index Futures Decline as Lehman Tumbles a Fourth Day

By Adria Cimino and Elizabeth Stanton

Sept. 11 (Bloomberg) -- U.S. stock-index futures tumbled as concern grew that Lehman Brothers Holdings Inc. will fail to shore up capital, heightening concern about the stability of the banking system.

Lehman, which lost more than half its value in the past three days, tumbled another 45 percent in trading before the open of exchanges after Citigroup Inc. and Goldman Sachs Group Inc. cut their recommendations on the securities firm. Chesapeake Energy Corp. and Petrohawk Energy Corp. tumbled about 2 percent and led oil and gas drillers lower as crude fell for a third day after a stronger dollar reduced the appeal of commodities as a hedge. Futures extended declines on a government report showing jobless claims topped economists' forecasts.

``People are at the edge of their seats and reacting and overreacting to every piece of news, because there are no trends except for the uncertainty about the circumstances with banks,'' Laszlo Birinyi, who oversees more than $350 million as president of Birinyi Associates Inc. in Westport, Connecticut, told Bloomberg Television. ``It seems to be waiting for the other shoe to drop but this is like a centipede that has a hundred shoes and it just doesn't seem to ever want to end.''

Standard & Poor's 500 Index futures expiring this month sank 18.1, or 1.5 percent, to 1,215.2 as of 8:39 a.m. in New York. Dow Jones Industrial Average futures decreased 136 to 11,155 and Nasdaq-100 Index futures fell 22.75 to 1,714.75.

Futures indicated the S&P 500 may fall below its lowest close of the year. The benchmark index for U.S. equities is poised for its first annual decline since 2002 as more than $500 billion in credit losses and asset writedowns at financial firms worldwide and slowing economic growth damp the outlook for earnings.

`Bear Case' for Lehman

Lehman declined $3.23 to $4. The shares were downgraded to ``hold'' from ``buy'' at Citigroup, which cited a possible cut in the credit rating and deteriorating capital. Lehman's initiatives to boost capital ``fell short of what was necessary to lessen the bear case on the stock,'' Goldman analysts including New York- based William Tanona said in a note to clients.

Oppenheimer & Co. analyst Meredith Whitney lowered her full- year earnings estimate for Lehman, saying the bank faces further writedowns after posting the biggest loss in its 158-year history yesterday. Whitney said Lehman may have an annual per-share loss of $10.24, compared with an earlier forecast of a $6.67 loss.

Crude Oil

Petrohawk energy slumped 52 cents to $23.02, while Chesapeake declined 90 cents to $39.25.

Crude oil for October delivery sank as much as 1.1 percent to $101.43 on the New York Mercantile Exchange as the dollar rose to a one-year high against the euro, reducing the appeal of commodities as a hedge.

Actel Corp. dropped 5 percent to $10.74 in after-hours trading in New York. The maker of electronic equipment said revenue may fall as much as 9 percent from the second quarter. The company had previously predicted growth of as much as 1 percent.

First-time jobless claims fell to 445,000 in the week ended Sept. 6 from a revised 451,000 the prior week that was more than initially reported. Economists surveyed by Bloomberg had forecast 440,000 new claims. The number of people staying on rolls rose 122,000 to 3.525 million, the highest since October 2003.

The U.S. trade deficit widened more than forecast in July as oil imports soared to a record, overshadowing gains in exports. The gap grew 5.7 percent to $62.2 billion, the largest in 16 months, from a revised $58.8 billion in June that was bigger than previously estimated, the Commerce Department said. Total imports and exports were the highest ever.

U.S. stocks advanced yesterday as investors snapped up energy shares trading at their cheapest level in 18 months, while better-than-forecast earnings at FedEx Corp. buoyed industrial companies.

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

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Bancolombia, Bimbo, CSN, Lan, Petrobras: Latin Equity Preview

By William Freebairn and Alexander Ragir

Sept. 11 (Bloomberg) -- The following companies may have unusual price changes today in Latin America trading. Stock symbols are in parentheses, and share prices are from the previous close. Preferred shares are usually the most-traded class of stock in Brazil.

The MSCI Latin America Index rose 0.2 percent yesterday to 3,375.93.

Brazil

Cosan SA Industria & Comercio (CSAN3 BS): The world's biggest sugar-cane processor, signed a contract to sell electricity generated from biomass to Rede Comercializadora de Energia SA that's worth 489 million reais ($272 million). Cosan fell 5.4 percent to 17.40 reais.

Perdigao SA (PRGA3 BS): Brazil's biggest food company may have its Ba1 debt rating cut by Moody's Investors Service after profit margins fell and costs rose. Moody's lowered the outlook on Perdigao's rating to ``negative'' from ``stable,'' the ratings company said yesterday in a statement. Perdigao's Ba1 rating is one level below investment grade. Perdigao rose 5.6 percent to 41.61 reais.

Petroleo Brasileiro SA (PETR4 BS): Brazil's state-controlled oil company said yesterday it has found an estimated 3 billion to 4 billion barrels of recoverable light crude oil in an offshore field in the Santos Basin in Brazil. Petrobras, as the company is known, and its partners, BG Group Plc. and Galp Energia SGPS SA, found the oil in its Iara well in the BM-S-11 block off the coast of Rio de Janeiro. Petrobras owns 65 percent of the field and operates it, BG owns 25 percent and Galp owns 10 percent. Petrobras rose 1.2 percent to 28.68 reais.

Cia. Siderurgica Nacional SA (CSNA3 BS): CSN was upgraded to ``buy'' from ``underperform'' by Merrill Lynch & Co. on expectations Brazil's third-largest steelmaker may sell its iron- ore unit for $4.1 billion more than investors expect. CSN gained 4.2 percent to 44.50 reais.

Telemar Norte Leste SA (TMAR5 BS): Telemar Participacoes SA, the owner of Telemar Norte Leste, Brazil's largest telephone company, delayed indefinitely a plan to sell about $1.5 billion of bonds intended to help finance its acquisition of rival Brasil Telecom Participacoes SA (BRTP3 BS). Telemar gained 1 percent to 78.81 reais. Brasil Telecom climbed 0.4 percent to 52.70 reais.

Chile

Lan Airlines SA (LAN CC): Analysts at Banchile Inversiones, BCI Corredor de Bolsa and Banco Santander reiterated ``buy'' recommendations for Chile's biggest air carrier in separate research notes yesterday after the airline reported a 16 percent jump in passenger traffic in August. Lan fell 0.8 percent to 6,249.9 pesos.

La Polar SA (LAPOLAR CC): The Santiago-based department store operator may rally 60 percent to 2,950 pesos in the next 12 to 18 months, while its earnings before interest, taxes, depreciation and amortization may increase 26 percent this year, Banchile Inversiones analysts wrote in a note to clients yesterday, reiterating a ``buy'' rating. La Polar rose 0.8 percent to 1,845 pesos.

Colombia

Bancolombia SA (BCOLO CB): Unconsolidated profit rose 9.9 percent to 93.8 billion pesos ($45.6 million) in August from 85.4 billion pesos in July, Colombia's biggest lender wrote in a statement posted on the regulator's Web site yesterday. In the first eight months of this year, profit increased 51 percent to 764 billion from the same period last year, the Medellin-based banks said. Bancolombia fell 0.6 percent to 16,640 pesos.

Mexico

Grupo Bimbo SAB (BIMBOA MM): Mexico's biggest baker of bread was raised to ``buy'' from ``hold'' by Citigroup Inc., which cited falling wheat prices. Earnings per share may increase 20 percent or more next year and in 2010, analysts led by Eduardo Estrada wrote in a research note e-mailed yesterday. Bimbo rose 3 percent to 68.45 pesos.

Grupo Elektra SA (ELEKTRA* MM): Mexico's largest electronics retailer plans to begin selling motorcycles in Brazil next year and may build an assembly plant there by 2010, the chief executive officer of its motorcycle unit said. Elektra, based in Mexico City, has plans to open 1,500 stores in Brazil over the next five years to make the country its largest market, Alberto Tanus said yesterday. Elektra rose 3.8 percent to 398.91 pesos.

Fomento Economico Mexicano SAB (FEMSAUBD MM): Latin America's largest beverage company expects to pay for a $190 million soccer stadium with advance sales of premium seats, advertising and stadium concessions, project manager Tonatiuh Mejia said in a phone interview yesterday. Femsa, as the company is known, does not expect to fund any part of the new stadium, which will be used by its Rayados professional soccer team, Mejia said. Femsa fell 4.8 percent to 46.08 pesos.

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

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FOREX-Dollar rallies broadly, hits 1-yr high vs euro

* Dollar rallies after New Zealand dollar hits 2-year low

* Risk aversion pushes dlr index to 1-year high, euro sinks

* RBNZ surprises market with hefty 50 basis point rate cut

(Changes dateline, byline, adds comment, updates prices)

By Naomi Tajitsu

LONDON, Sept 11 (Reuters) - The dollar rallied on Thursday, clocking a one-year high against the euro and a basket of currencies on an ongoing wave of risk aversion, while the New Zealand dollar hit a two-year low after a big interest rate cut.

The dollar's latest rally kicked off earlier in the day, after a 50 basis point rate cut by New Zealand's central bank to 7.5 percent wrong-footed many in the market who had been anticipating a smaller, 25 basis point chop [ID:nWEL000746].

Risk aversion also offered a broad boost to the low-risk, low-yielding yen, which hit its highest in nearly two years against the euro, while also gaining on high-yielders such as the New Zealand and the Australian dollars.

"It's part of a longer-term theme we've been seeing, where one of the G10 currencies gives way and it just cascades through the other currencies and before you know it, it's generalised dollar strength," said Adam Cole, global head of currency strategy at RBC Global Markets.

At the same time, the euro continued to struggle due to ongoing speculation that the euro zone economy is feeling the pinch of U.S. economic weakness.

The euro tumbled roughly half a percent to $1.3902, its lowest level since September 2007.

Against a basket of currencies belonging to major U.S. trading partners, the dollar rallied as high as 80.352, a level not seen since September last year.

Triggering the dollar's rally was weakness in the New Zealand dollar, which dropped more than 1.1 percent to $0.6439, its weakest level since September 2006. It dropped nearly 2 percent to 69.13 yen , its weakest in more than two years.

The yen rallied across the board, sending the dollar down nearly half a percent to 107.00 yen. The euro fell more than one percent to 148.81 yen, its lowest level since late October 2006.

Broad weakness in global shares has helped to cool demand for risky trades, which has benefitted the yen after the low-yielding currency for years had been used to pick up assets in higher-yielding currencies in "carry" trades.

RATE, ECONOMIC OUTLOOK

The New Zealand dollar plummeted after the central bank's second consecutive rate cut decreased the high-yielding currency's rate advantage, and analysts say that the view for more monetary loosening will keep the currency under selling pressure.

The euro also struggled after the European Commission on Wednesday said that regional economic growth will halve in 2008 from 2007 and inflation will be much higher because of financial turmoil, soaring commodity prices and housing market shocks.

It slashed its gross domestic product growth prediction for the euro zone to 1.3 percent from the 1.7 percent predicted in April. [ID:nLA155886]

The shift in the market's focus toward weakening growth outside of the United States enabled the greenback to brush aside news on Wednesday that Lehman Brothers posted third-quarter losses and failed to announce concrete plans to raise capital.

(Editing by Victoria Main)

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HK shares drop to 18-month low, led by China stocks

* China Mobile drops on regulatory uncertainties

* China banks tumble amid economic slowdown fears

* Resource-relates shares plunge pressured by stronger dollar (Updates to close)

By Parvathy Ullatil

HONG KONG, Sept 11 (Reuters) - Hong Kong shares fell 3.1 percent on Thursday to their lowest close in 18 months as investors dumped shares in Chinese firms amid deepening fears of a global slowdown and a lack of growth-supportive policies from Beijing.

"Investors are extremely cautious on the global economic outlook," said Peter Pak, vice president with BOCI Research.

"And now with the U.S. government pledging large sums of money to bail out Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac

The U.S. government took control of the mortgage companies at the weekend in a bid to stave off further damage to the financial system, but many investors have had reservations about the deal, seeing it as a further sign of deep underlying troubles.

The benchmark Hang Seng Index .HSI closed down 611.06 points at 19,388.72, its lowest level since March 20, 2007.

Mainboard turnover rose to HK$69.6 billion ($8.9 billion) from HK$65.3 billion on Wednesday.

Chinese telecom stocks were also pressured by deepening concerns over the fallout from widespread industry restructuring and regulatory uncertainties.

China Mobile (0941.HK: Quote, Profile, Research, Stock Buzz), the world's largest wireless carrier, dropped 5.3 percent to a 15-month low of HK$77.00 as investors worried Beijing will impose regulations that are unfavourable to the firm but will benefit its rivals.

The company, which controls two-thirds of the country's cellular market, will have to begin testing a policy soon in two cities that will let users keep their cellphone numbers when they switch to another carrier, according to Chinese media reports.

But analysts expect that such a scheme, which may be rolled out in full by 2009, will be a one-way affair, barring users from retaining their numbers when they switch to China Mobile.

Shares in China Unicom (0762.HK: Quote, Profile, Research, Stock Buzz), China Mobile's smaller rival, tumbled 4.8 percent. China Netcom (0906.HK: Quote, Profile, Research, Stock Buzz), which is soon to be merged with China Unicom, dropped 4.5 percent.

Some analysts said that Thursday's sell-off in Chinese shares may have been spurred by speculation that H-share holders will have to start paying dividend tax.

"It's a bit strange to see investors react to that news because nobody really buys H-shares for their dividend yield. It just seems like another piece of bad news in an already weak market triggered a sell-off," said Steven Leung, director with UOB Kay Hian

Resources stocks took another beating on Thursday as an advancing U.S. dollar prevented a strong rebound in oil and other commodity prices even as Hurricane Ike whipped through the oil- and gas-rich U.S. Gulf.

Asia's largest oil & gas producer, PetroChina (0857.HK: Quote, Profile, Research, Stock Buzz), fell 4.4 percent while China Shenhua Energy (1088.HK: Quote, Profile, Research, Stock Buzz), the world's most valuable coal company, tumbled 6.4 percent.

Shares in China's top listed gold producer, Zijin Mining (2899.HK: Quote, Profile, Research, Stock Buzz), fell more than 10.5 percent on Thursday to a new 18-month low after gold prices slid.

The stock hit a low of HK$3.48 before recovering slightly to HK$3.51, down 9.8 percent. It has lost about 18 percent of its market value since Tuesday.

The China Enterprises Index .HSCE of top locally listed mainland Chinese firms slid 4.2 percent, tracking a 3.3 percent drop on the Shanghai Stock Exchange .SSEC.

Mainland banks slid as investors shrugged off the lower inflation data reported on Wednesday and focused on global economic worries.

China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz) lost 3.9 percent while ICBC (1398.HK: Quote, Profile, Research, Stock Buzz) dropped 3.4 percent.

Chinese property stocks continued their downward drift on weak August property sales revenue and broker warnings of a gloomy property price outlook in top-tier Chinese cities.

China Overseas Land (0688.HK: Quote, Profile, Research, Stock Buzz) gave up 8.8 percent while Guangzhou R&F Properties (2777.HK: Quote, Profile, Research, Stock Buzz) slid 8.8 percent.

(Reporting by Parvathy Ullatil; Editing by Kim Coghill)

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Nikkei hits 6-mth closing low, banks down on Lehman

*Nikkei ends at six-month closing low, exporters lead falls

*Banks hit hard after Lehman fails to reassure investors

*Uncertainty over global economy hits wide range of shares (Adds stocks and comments)

By Taiga Uranaka

TOKYO, Sept 11 (Reuters) - The Nikkei average fell 2 percent to a nearly six-month closing low on Thursday, with banks like Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) suffering after Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) failed to alleviate worries about its ability to survive the credit crisis.

Blue-chip exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) dropped amid uncertainty about the health of the global economy, while slides in other Asian equity markets during the afternoon added impetus to the Nikkei's decline.

Hopes that Lehman would announce confidence-boosting steps had supported bank shares a day earlier but market participants said they found only disappointment.

"Investors are selling because not even a mouse came out after the mountains roared and shook," said Fujio Ando, senior managing director at Chibagin Asset Management.

The benchmark Nikkei average .N225 ended down 244.13 points at 12,102.50, its lowest close since March 18. The broader Topix declined 2.5 percent to 1,162.72.

The market was also hurt by weak economic data. Japan's core private-sector machinery orders shrank in July as manufacturers prepared capital spending cuts to hunker down for a slump in export markets and a recession at home. [ID:nT261678]

"The economic situation is not good globally," said Naoki Fujiwara, fund manager at Shinkin Asset Management.

"Although the fall in machinery orders was in line with forecasts, it does not change the fact that they fell, and it adds to concerns for the outlook for capital spending," he said.

BANKS HIT

Japan's top lender Mitsubishi UFJ fell 5.1 percent to 823 yen, while No.2 Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) lost 5.3 percent to 445,000 yen.

Nomura Holdings (8604.T: Quote, Profile, Research, Stock Buzz), Japan's biggest brokerage, skidded 5.9 percent to 1,440 yen.

Digital camera maker Canon declined 3.6 percent to 4,300 yen, becoming the biggest drag on the Nikkei. Honda Motor Co Ltd (7267.T: Quote, Profile, Research, Stock Buzz) fell 2.2 percent to 3,550 yen.

Hitachi Ltd (6501.T: Quote, Profile, Research, Stock Buzz) fell 4.8 percent to 732 yen after Chubu Electric Power Co (9502.T: Quote, Profile, Research, Stock Buzz) said it would sue the electronics maker, seeking $390 million in damages as well as late payment charges due to problems with a Hitachi-made turbine at the utility's nuclear plant. [ID:nT312089]

Trade picked up, with 1.95 billion shares changing hands, compared with last week's daily average of 1.91 billion.

Declining shares outnumbered advancing ones by more than four to one. (Reporting by Taiga Uranaka; Editing by Hugh Lawson)

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European stocks down early; eyes on FX, U.S. data

* FTSEurofirst 300 falls 0.2 percent

* Banking and insurance down; mining and energy up

* Eyes on dollar-euro exchange rate, U.S. data

By Peter Starck

FRANKFURT, Sept 11 (Reuters) - European stocks fell early on Thursday as gains for mining stocks thanks to higher metals prices were offset by weak financials, led by French insurer AXA (AXAF.PA: Quote, Profile, Research, Stock Buzz).

By 0815 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 1,145.53 points. It has lost 24 percent this year, hammered by recession and inflation fears as well as worries about the impact of the credit market crisis on the financial industry.

"High volatility in the international financial sector remains a constraining factor for buying appetite," Greek ATE Securities said in a morning note to clients.

AXA fell 2.8 percent after UBS downgraded the stock to "neutral" from "buy". The DJ Stoxx European insurance index was down 1.2 percent and the banking index lost 1.1 percent.

"According to the estimates of our bank analysts, global banks lost $636 billion during the crisis so far," Italy's UniCredit said in a note, comparing that figure to the International Monetary Fund's estimate for total sector losses of $1 trillion.

"There is still some way to go until the end of the crisis, and we expect that the Q3 earnings release season will show more losses," UniCredit said.

Germany's Deutsche Postbank (DPBGn.DE: Quote, Profile, Research, Stock Buzz) fell 4.5 percent after news that the country's biggest bank, Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz), was about to acquire a stake in the retail bank.

"Such a deal might limit the upside (for Postbank's share price) ... as the new shareholder structure would limit takeover fantasy," brokerage Equinet said in a note.

DOLLAR STRENGTH

Shares in European aerospace group EADS (EAD.PA: Quote, Profile, Research, Stock Buzz), the parent of airplane maker Airbus, rose 1.9 percent, with traders citing the stronger dollar.

The dollar rallied to one-year highs against the euro -- a shift that ought to help European exporting companies -- on the view that the U.S. currency was a safe buy as the market remains swept up in a wave of risk aversion. The euro fell as far as $1.3923, its weakest since September 2007.

Commerzbank pinpointed $1.3830/50 as the next important support level.

Copper and gold prices firmed, helping miners such as Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), up 3.2 percent, BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), up 2.2 percent, and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), up 2.1 percent.

"The market's focus will return to the sector's attractive cashflow profile particularly amongst the bulk commodity miners who are beginning to reap the rewards of the huge price increases witnessed at the end of the first half," Cazenove said in a note.

The oil price held near $102 a barrel and index-heavy energy stocks such as BP (BP.L: Quote, Profile, Research, Stock Buzz), ENI (ENI.MI: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) and Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) gained between 1 and 2 percent.

German bank Helaba said U.S. economic data due later in the session could give new impulses for Europe's stock markets.

U.S. international trade figures, export and import prices for August as well as weekly jobless claims are due at 1230 GMT.

Dutch bank ING said the import price data would provide a first glimpse of the impact of the drop in the oil price from $150 a barrel in mid-July to just over $100 currently.

"A decline in core import prices should help to ease worries about U.S. inflation," ING said.

Britain's FTSE 100 .FTSE was down 0.3 percent, Germany's DAX .GDAXI fell 0.3 percent and the French CAC 40 .FCHI lost 0.2 percent. (Editing by Paul Bolding)

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FTSE dips as weak retailers offset miners' rally

* FTSE 100 down 0.3 pct

* Retailers weak after results disappoint

* Miners rally with commodity prices

By Jon Hopkins

LONDON, 11 Sept (Reuters) - Britain's leading share index dipped early on Thursday, as retailers fell after some disappointing results and offset a rally from miners sparked by a recovery in commodity prices.

By 0801 GMT, the FTSE 100 index was 17.6 points, or 0.3 percent, lower at 5,348.6, after losing 0.9 percent on Wednesday.

Investors also remained cautious over any further fallout in the financial sector after U.S. investment bank Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) failed on Wednesday to alleviate worries about its ability to survive.

U.S. stocks rose overnight as OPEC's move to shore up oil prices boosted energy shares and Texas Instruments' (TXN.N: Quote, Profile, Research, Stock Buzz) outlook soothed fears about technology spending.

"A bit of a bounce in mining stocks is a focus in an otherwise quieter London market today," said Ben Timms, senior trader at Blue Index, "with the obvious comment being that the sector is looking oversold again."

"Retailers are being sold off aggressively once more, with the global slowdown and inflation worries remaining underlying issues," Timms added. "But with only the latest weekly U.S. jobless numbers due this afternoon, and the August Fed Budget, scheduled after the London close, UK stocks look likely to drift after the recent volatile showings."

Morrison Supermarkets (MRW.L: Quote, Profile, Research, Stock Buzz) was the top FTSE 100 faller, down 5 after the supermarket group's in-line first-half results failed to inspire. [ID:nLB26816]

Cazenove said "there is not obviously an upgrade in these numbers and the relatively muted operational gearing despite very strong top line performance does suggest that the trajectory of margin progression is becoming much flatter".

Shares in Home Retail (HOME.L: Quote, Profile, Research, Stock Buzz) lost 8 percent, making them the top faller on the mid-cap FTSE 250 index .FTMC, after worse-than-expected second-quarter results at both its businesses, Argos and Homebase. [ID:nLA194689]

Gloom from the high street also hit Kingfisher (KGF.L: Quote, Profile, Research, Stock Buzz), down 2.5 percent with Bernstein cutting its rating to "market perform" from "outperform".

MINERS GAIN

Among the heavyweight miners, Ferrexpo (FXPO.L: Quote, Profile, Research, Stock Buzz) added 4 percent, shrugging off confirmation last night that the stock will be demoted from the FTSE 100 index after the latest indexes reshuffle having been in the index for just one quarter.

Eurasian Natural Resources (ENRC.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), Kazakhmys (KAZ.L: Quote, Profile, Research, Stock Buzz) and Antofagasta (ANTO.L: Quote, Profile, Research, Stock Buzz) were also all up between 2 and 3.7 percent.

The price of gold bounced off an 11-month low on Thursday as physical buying picked up due to lower prices.

Energy firm BG Group (BG.L: Quote, Profile, Research, Stock Buzz) was also in demand, up 3.8 percent, after Brazil's state-run oil company Petrobras (PBR.N: Quote, Profile, Research, Stock Buzz) said on Wednesday that it estimates the recoverable oil and gas reserves in the subsalt Iara field at 3-4 billion barrels.

BG owns part of the block in which the field lies. Click on [ID:nN10482894].

Traders also cited underlying speculative interest as helping BG Group following its decision earlier this week to abandon a takeover bid for Origin Energy of Australia (ORG.AX: Quote, Profile, Research, Stock Buzz).

Other oil majors found support as crude prices CLc1 held steady on Thursday as dollar strength was countered by Wednesday's surprise OPEC production cut and data on rising U.S. crude stocks.

Aside from commodities, ITV (ITV.L: Quote, Profile, Research, Stock Buzz) was the top blue-chip performer, extending this week's rally by another 6 percent as takeover hopes continued to swirl around the broadcaster.

Recent talk has highlighted Italy's Mediaset (MS.MI: Quote, Profile, Research, Stock Buzz) as a potential bidder for ITV, and news on Wednesday that Charles Allen, the UK broadcasters former boss is joining a private equity group also added to the takeover speculation. (Additional reporting by Simon Falush; Editing by Erica Billingham)

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US STOCKS-Wall St gains as energy, tech offset bank fears

By Steven C. Johnson

NEW YORK, Sept 10 (Reuters) - U.S. stocks rose on Wednesday as OPEC's move to shore up oil prices boosted energy shares and Texas Instruments' outlook soothed fear about technology spending even as worries persisted about the health of the banking sector.

The broader market's gains came a day after the S&P 500 posted its biggest decline in a year and a half.

Energy shares rose as OPEC said it would cut production, which was seen as an attempt to halt a recent sharp slide in the price of oil CLc1. Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) rose nearly 3 percent and was the top boost for the S&P.

Technology shares also rose on relief that chip maker Texas Instruments (TXN.N: Quote, Profile, Research, Stock Buzz) did not cut its earnings outlook after a spate of recent warnings on consumers' cell phone spending.

Financial shares, however, were broadly lower after Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) posted an unexpectedly large quarterly loss on huge mortgage-related write-downs and failed to announce any firm deals to raise desperately needed capital. Shares of Lehman, the No. 4 U.S. investment bank, sank 6.9 percent, extending Tuesday's 45 percent slide.

Meanwhile, shares of Washington Mutual (WM.N: Quote, Profile, Research, Stock Buzz) sank to a 17-year low on fears that the savings and loan, which is under special regulatory supervision, won't find a buyer or raise enough capital to offset soaring mortgage losses. Shares closed down nearly 30 percent at $2.32 and were second biggest loser on the New York Stock Exchange [ID:nN10435253].

"The market still has an acute case of the financial jitters but investors have concluded that we're not going off the edge of Niagara Falls," said Fred Dickson, market strategist and director of retail at D.A. Davidson & Co in Lake Oswego, Oregon.

The Dow Jones industrial average .DJI was up 38.19 points, or 0.34 percent, at 11,268.92. The Standard & Poor's 500 Index .SPX was up 7.53 points, or 0.61 percent, at 1,232.04. The Nasdaq Composite Index .IXIC was up 18.89 points, or 0.85 percent, at 2,228.70.

Texas Instruments shares rose 0.6 percent to $21.85. The Philadelphia Stock Exchange index of semiconductors was up 0.8 percent.

Tech bellwether International Business Machines (IBM.N: Quote, Profile, Research, Stock Buzz) climbed 2.6 percent to $118.04 and led gains on the Dow.

Investors also snapped up energy shares on the view that they now look more attractive after having fallen sharply in recent months. Shares of Conoco Phillips (COP.N: Quote, Profile, Research, Stock Buzz) rose 5.2 percent to $71.87. Exxon Mobil added 2.7 percent to $75.25.

"My gut is there are good values there, even with the price of oil around $100 a barrel," said Bobby Harrington, head of block trading at UBS in Stamford, Connecticut.

After hitting a record high above $147 a barrel in July, crude has come down quickly, last trading below $103. OPEC's move to cut supplies was seen as an attempt to prevent prices from sliding much further.

Among financials, Lehman shares closed down at $7.25, after falling earlier to an almost 10-year low of $6.93.

Lehman said it would sell a majority stake in its investment management division, spin off commercial real estate assets, and slash its annual dividend. For details, see [ID:nLA171292].

But Moody's Investors Service said on Wednesday it was placing the bank's credit rating on review. with the direction of the rating uncertain.

Shares of Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz) were down 2.5 percent at $15.84 while Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) fell 3.8 percent to $23.81. American International Group (AIG.N: Quote, Profile, Research, Stock Buzz), the world's biggest insurer, which also has substantial exposure to the mortgage market, lost 4.7 percent to end at $17.50.

The S&P financial index ended down 0.7 percent.

About 1.55 billion shares changed hands on the New York Stock Exchange on Wednesday, below last year's estimated daily average of roughly 1.90 billion. On Nasdaq, about 2.27 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones by about 1.2 to 1 while on the Nasdaq, advancers beat decliners by about 1.3 to 1. (Additional reporting by Richard Leong and Al Yoon; Editing by Leslie Adler)

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