ConocoPhillips, EnCana Start U.S. Refinery Expansion

By Jim Polson

Sept. 24 (Bloomberg) -- ConocoPhillips, the second-largest U.S. oil refiner, and Calgary-based EnCana Corp. began construction this week on a $3.6 billion Illinois refinery expansion to boost Canadian heavy-oil processing.

The Wood River refinery will more than double its capacity to refine heavy oil from Canada's oil sands into fuels such as gasoline and diesel to 240,000 barrels a day in 2011, EnCana said today in a statement. Crude-oil processing capacity at the plant will increase 16 percent to 356,000 barrels a day.

The venture between the companies plans to more than double total heavy-oil production from Canadian tar sands to 180,000 barrels a day by 2012, EnCana said.

Foundation-piling installation at Wood River, near St. Louis, began this week after the project received U.S. regulatory approval, EnCana said. The expansion includes a 65,000 barrel-a-day coker to process the tar-like oil.

Output of so-called clean products with less pollution will rise 32 percent to 330,000 barrels a day and production of asphalt, a cheaper product, will be eliminated.

Canadian oil sands contain as much as 173 billion barrels of economically recoverable oil, a reserve second only to that of Saudi Arabia, according to the Canadian Association of Petroleum Producers. The group has forecast that production will rise to almost 4 million barrels a day in 2020 from 1 million barrels now.

EnCana, Canada's largest natural-gas producer, announced plans in May to split into separate gas and integrated-oil companies. The oil company will hold stakes in a Borger, Texas, refinery as well as Wood River.

Expansion Venture

EnCana and ConocoPhillips agreed to form the joint venture in October 2006, with the purpose of expanding the Wood River and Borger refineries, as well as tar-sands output in Canada.

ConocoPhillips, based in Houston, rose 1 percent to $75.32 as of 9:30 a.m. in composite trading on the New York Stock Exchange. EnCana gained 40 cents to C$73.76.

Valero Energy Corp., based in San Antonio, is the largest U.S. oil refiner.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.

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EDF Has `Financial Flexibility to Move' on Constellation Energy

By Tara Patel

Sept. 24 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, has ``financial flexibility'' for raising its stake in Constellation Energy Group Inc. in order to safeguard planned development of nuclear reactors in the U.S.

``We have financial flexibility to move,'' on Constellation, EDF Chief Executive Officer Pierre Gadonneix said at a news conference today in Paris on a takeover offer for British Energy Group Plc. ``My conviction is that in the U.S. we want to work with an American partner, which was the case until today. If others come along we are open to dialogue with them.''

The French utility has ``determination and rapidity'' to safeguard its goals of developing nuclear reactors in the U.S. and partnerships for their operation, he said.

These were the first comments from Gadonneix, 65, after Electricite de France announced two days ago it offered to acquire Constellation with buyout firms KKR & Co. and TPG Capital LP for $6.2 billion, 32 percent more than Warren Buffett's MidAmerican Energy Holdings Co.

The agreement announced Sept. 18 for MidAmerican to buy Baltimore-based Constellation for $4.7 billion, or $26.50 a share, isn't adequate, Paris-based EDF said in a public filing. Constellation Chief Executive Officer Mayo Shattuck said the Buffett deal was ``superior'' after the largest U.S. power marketer plunged 58 percent in the preceding three days.

The French utility has a joint venture with Constellation, in which it has a 9.5 percent stake, to develop so-called new generation reactor models called EPRs, or Evolutionary Power Reactors, that are capable of producing about 1,600 megawatts of electricity.

The EDF filing was made as Shattuck and MidAmerican CEO Greg Abel told investors and analysts on a conference call that they expect to close their transaction in a year or less.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net



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Evergreen Solar, Energy Conversion Surge on Tax Bill

By Christopher Martin

Sept. 24 (Bloomberg) -- Energy Conversion Devices Inc., Evergreen Solar Inc. and Akeena Solar Inc. surged after the U.S. Senate passed a bill that would extend tax credits on solar power installations through 2016.

Energy Conversion, based in Rochester Hills, Michigan, climbed $7.64, or 14 percent, to $64.10 at 9:31 a.m. in Nasdaq Stock Market composite trading. Marlboro, Massachusetts-based Evergreen rose 58 cents, or 10 percent, to $6.33, and Los Gatos, California-based Akeena gained 93 cents, or 22 percent, to $5.20 a share.

The Senate yesterday passed a $17 billion tax package that would allow homeowners, businesses and utilities to deduct a portion of the cost of new solar systems from income tax. The House was expected to vote on the measure today and President Bush has indicated that he would sign it, according to The White House Office of Management and Budget.

The legislation, part of a tax bill valued at more than $100 billion, also extends incentives for wind power production for one year and for geothermal and biomass energy for two years. The tax credits were set to expire at the end of this year.

Shares of most U.S. and Chinese solar manufacturers also rose. Phoenix-based First Solar Inc., the world's largest maker of thin-film solar modules, climbed $10.51, or 5 percent, to $221.40. American depositary receipts of China's Suntech Power Holdings Co. rose $2.01, or 5 percent, to $42.46 and Trina Solar Ltd. gained $2.27, or 8.3 percent, to $29.69.

To contact the reporter on this story: Christopher Martin in New York at cmartin11@bloomberg.net.



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Venezuela, China to Build Refineries, Boost Sales

By Steven Bodzin and Wang Ying

Sept. 24 (Bloomberg) -- Venezuela, the world's fifth-largest oil exporter, and China plan to build refineries and boost oil shipments, said President Hugo Chavez, who is seeking to lessen dependence on the U.S.

The countries will sign agreements that will include building a refinery in block Junin 8 in the Orinoco Belt, South America's biggest oil area, Chavez said today in Beijing in a phone interview with Venezuelan state television. The accords will deepen cooperation between the two countries, he said.

Chavez, who is in China this week on a tour that includes Russia and Cuba, has sought closer ties with U.S. rivals. Earlier this month, Chavez expelled the U.S. ambassador to Caracas and signed an agreement with Russia's OAO Gazprom on offshore projects. China, the world's second-biggest oil user, needs fuel as its economy grows at a double-digit pace.

``China is short of oil and it has to extend cooperation with foreign countries,'' Xia Yishan, a senior research fellow with the China Institute of International Studies, said by phone in Beijing. ``The country will need to increase imports and expand overseas exploration to meet local demand.''

PetroChina Co., the nation's biggest oil producer, and Petroleos de Venezuela SA signed a ``framework'' agreement on oil supplies today. China Petrochemical Corp., the nation's largest oil refiner, signed an initial accord with Venezuela's state oil company. No details were provided.

China's gross domestic product expanded 10.1 percent in the second quarter. Last year, its economy grew 11.9 percent, the quickest pace in 13 years. The nation will surpass the U.S. as the world's biggest energy consumer in five years, Jeremy Bentham, vice president of global business environment at Royal Dutch Shell Plc, said on Sept. 16.

Cabruta Refinery

China and Venezuela are continuing work on a previously announced refinery at Cabruta and both governments will sign several agreements, Chavez said, without providing details. Cabruta is located at the Latin American country's geographical center.

The two countries signed 12 accords today at a ceremony at China's Great Hall of the People in central Beijing. The agreements cover trade, energy, infrastructure, communications, education and culture.

The two countries had agreed in May to build a refinery in China and create a joint venture to drill for oil in the Junin 4 area, where China National Petroleum Corp. has been quantifying and certifying reserves. Venezuela plans to export 1 million barrels of oil a day to China by 2011 or 2012, Chavez said then.

Trade between the nations will exceed $8 billion this year and Venezuela is currently shipping 331,000 barrels a day of oil and oil products to PetroChina.

U.S. Sales

Bilateral trade in the first seven months reached $6.23 billion, compared with $5.9 billion for all of 2007, Foreign Ministry spokeswoman Jiang Yu said yesterday.

The Latin American nation supplies 4 percent of China's total oil imports, Jiang said.

Chavez, who took office in 1999, has repeatedly threatened to cut off oil sales to the U.S., alleging its government has attempted to assassinate or overthrow him. The U.S. buys about two-thirds of Venezuela's daily exports of 2 million barrels.

``China-Venezuela relations are normal state-to-state relations, not based on ideology, and are not targeted against any third party,'' said Jiang.

To contact the reporters on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net; Wang Ying in Hong Kong at wang30@bloomberg.net.



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Oil Rises on U.S. Inventory Forecasts, Texas Terminal Shutdown

By Mark Shenk

Sept. 24 (Bloomberg) -- Crude oil rose on forecasts that a government report will show U.S. oil and fuel inventories dropped, and after an oil terminal in Texas was shut by a fire.

Crude-oil supplies probably dropped for a fifth week, according to a Bloomberg News survey of analysts. Kinder Morgan Energy Partners LP shut its Pasadena terminal in Texas, which connects refineries from along the Gulf of Mexico coast to pipelines serving the eastern U.S, after the blaze yesterday.

``Traders are positioning before the storage report, which is expected to show a substantial drawdown in supplies,'' said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. ``We are seeing tightness in physical markets along the Gulf. In this climate the market is sensitive to any loss of supply.''

Crude oil for November delivery rose $2.54, or 2.4 percent, to $109.15 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Prices are down 26 percent from the record $147.27 a barrel reached on July 11.

Yesterday, oil fell 2.5 percent to $106.61 a barrel as U.S. lawmakers debated a $700 billion government bailout plan for financial companies.

U.S. crude-oil inventories probably declined 2.5 million barrels from 291.7 million barrels last week after hurricanes Gustav and Ike closed Gulf of Mexico production facilities, according to the median of 12 responses the Bloomberg survey.

Gasoline stockpiles probably fell 3.6 million barrels from 184.6 million barrels the week before, the survey showed. Supplies of distillate fuel, including heating oil and diesel, probably fell 1.5 million barrels from 129.6 million barrels.

The Energy Department's inventory report is due to be released at 10:35 a.m. in Washington.

`Trading on Fundamentals'

``Oil is coming out from the shadow of the financial crisis and trading on fundamentals,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``It's DOE day and we expect that the report will reflect the slow return of production in the Gulf after the hurricanes and a cutback of OPEC production.''

The Organization of Petroleum Exporting Countries will supply 32.6 million barrels of crude a day this month, 800,000 barrels a day less than in August, according to preliminary estimates from consultants PetroLogistics Ltd. The group, which provides more than 40 percent of global supply, resolved at a Sept. 10 meeting to stick more closely to its official quotas.

Terminal Fire

Kinder Morgan's Pasadena plant is part of the company's Houston complex, taking oil products from refineries in Houston, Texas City, Corpus Christi, Baytown and Sweeny and pumping them into the Colonial, Teppco, Explorer and Magellan pipeline systems, according to a diagram on the company's Web site.

One employee was injured in the fire, which started at about 10:30 p.m. local time yesterday in a manifold where two pipelines connect, spokeswoman Emily Thompson said in a telephone interview from Houston today. The fire has been brought under control and operations will resume later today, she said.

The Pasadena site, along the Houston Ship Channel, has a storage capacity of 15.2 million barrels in 117 tanks.

Brent crude oil for November settlement increased $2.40, or 2.3 percent, to $105.48 a barrel on London's ICE Futures Europe exchange.

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



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Kinder Morgan Shuts Texas Oil Terminal After Fire

By Alexander Kwiatkowski and Nidaa Bakhsh

Sept. 24 (Bloomberg) -- Kinder Morgan Energy Partners LP said a fire late yesterday shut its Pasadena oil terminal in Texas, which connects refineries from along the Gulf Coast to pipelines serving the eastern and Midwest U.S.

``We are having to pull barrels from other origin points,'' Steve Baker, a spokesman for Colonial Pipeline Co., which transports fuel from the terminal, said in a telephone interview today. ``That is a large tank farm with a lot of supply.''

The blaze, which broke out in a pipeline manifold, is now under control and is ``down very low,'' Joe Hollier, a spokesman for Kinder Morgan, said in a telephone interview today. The company is planning to resume ``limited operations,'' later today, he said.

The fire started at 10:30 p.m. local time yesterday. One employee was injured and taken to hospital. The cause of the fire and extent of damage is unknown, according to Hollier. ``The fire was contained in the manifold pit,'' which links pipelines pumping gasoline products, he said.

The Pasadena plant is part of the company's Houston complex, taking oil products from refineries in Houston, Texas City, Corpus Christi, Baytown and Sweeny and pumping them into the Colonial, Teppco, Explorer and Magellan pipeline systems, according to a diagram on Kinder Morgan's Web site.

``Their tank farm is a gathering point for barrels shipped on Colonial and Explorer pipelines,'' said Colonial's Baker.

Hurricane Ike

Valero Energy Corp., ConocoPhillips, and BP Plc, are among refiners that send oil products into the Pasadena terminal. Plants that were shut ahead of Hurricane Ike earlier this month are increasing production as the restart process continues.

The Houston Chronicle reported the blaze ``could be seen for miles'' as the Pasadena and Houston fire departments worked to put out the blaze. KPRC, a local television station, said a pipeline had exploded at the facility, according to an article on Click2houston.com.

A Pasadena police department official earlier said the fire was in a gasoline storage tank. The Pasadena site, along the Houston Ship Channel, has a storage capacity of 15.2 million barrels in 117 tanks.

Colonial Pipeline Co. said Sept. 16 that its main lines had reached ``healthy'' rates after they were shut before Hurricane Ike, which made landfall in the state on Sept. 13.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netNidaa Bakhsh in London at nbakhsh@bloomberg.net;

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EDF Agrees to Buy British Energy for $23 Billion

By Tara Patel and Paul Dobson

Sept. 24 (Bloomberg) -- Electricite de France SA, the world's biggest nuclear utility, agreed to buy British Energy Group Plc for a sweetened 12.5 billion pounds ($23 billion) as the U.K. turns back to atomic power after decades of neglect.

EDF will pay 774 pence a share for the country's biggest electricity producer, according to a statement today. That's 35 percent above British Energy's closing price on March 14, the last trading session before the East Kilbride, Scotland-based utility said it may receive an offer. Centrica Plc, the U.K.'s dominant energy supplier, is in talks to take a 25 percent stake in the acquired company.

The deal ends four months of wrangling over British Energy's future and hands EDF Chief Executive Officer Pierre Gadonneix control of eight British nuclear plant sites where he plans to build four reactors. The purchase by EDF, whose 58 nuclear units produced 77 percent of France's electricity last year, comes as Britain's Prime Minister Gordon Brown seeks to cut dependence on energy imports and curb emissions.

``It kickstarts the government's drive to facilitate new nuclear build,'' Tina Cook, an analyst at Charles Stanley & Co. in London, said today by phone. ``British Energy's existing assets are aging. EDF will contribute its expertise, as well as replacing those assets.''

Shares Jump

British Energy jumped as much as 7.4 percent in London and traded at 771 pence as of 2:45 p.m. local time. Centrica added 1.1 percent to 330.25 pence. EDF rose 4.4 percent to 52.36 euros in Paris. British Energy is 36 percent owned by the U.K. government while EDF is 85 percent state-owned.

``The nuclear bandwagon is rolling,'' U.K. Business Secretary John Hutton said today in an interview with Bloomberg News. Atomic power provides ``reliable, affordable energy in the U.K. and helps us in the fight against climate change.''

EDF is paying 12.5 billion pounds for British Energy's 8,800 megawatt nuclear-generating capacity and land, excluding a coal plant which bondholders have the option to buy, the equivalent of 1.42 billion pounds per 1,000 megawatts. Spain's Gas Natural SDG SA is paying 16.8 billion euros (13.3 billion pounds) for Union Fenosa SA's 11,700 megawatts of own installed capacity, which includes nuclear, gas and coal plants, equal to 1.14 billion pounds per 1,000 megawatts.

Shield Customers

Centrica may also pay 774 pence a share for its stake, according to the statement. Its Chief Executive Officer Sam Laidlaw is seeking assets to reduce the company's exposure to energy market fluctuations and shield customers from price swings. EDF has 5 million customers in the U.K. where it owns two coal-fired plants and one gas-fed station, according to its Web site.

The offer to British Energy shareholders includes an alternative to an all-cash offer, in the form of 700 pence plus Contingent Value Rights, or CVRs, which give shareholders a slice of profits from the existing stations for the next 10 years.

British Energy rejected an approach on July 31 from EDF at 765 pence a share, because its biggest private shareholders said the bid undervalued its nuclear stations and adjacent land. Invesco Ltd., the company's biggest private shareholder, will accept the EDF offer and take CVRs, the French utility said.

British Energy Chief Financial Officer Stephen Billingham said the majority of shareholders will support the deal even though one is opposed to it.

Advisers

Merrill Lynch & Co. and BNP Paribas SA are advising EDF, while British Energy is being advised by Rothschild, Gleacher Shacklock LLP, JPMorgan Cazenove Ltd. and Citigroup Inc. Centrica is being advised by Goldman Sachs International and Credit Suisse. UBS AG advised the U.K. government and Lazard Ltd. the Nuclear Liabilities Fund.

Together with U.S. buyout firms KKR & Co. and TPG Capital, EDF last week offered $6.2 billion for Constellation Energy Group Inc., 32 percent more than a rival bid by Warren Buffett. Constellation CEO Mayo Shattuck said Sept. 22 that the $4.7 billion approach by Buffett's MidAmerican Energy Holdings Co. was ``superior'' to any alternative.

``The British Energy and Constellation offers are complimentary,'' said Nathalie Pelras, a fund manager at Richelieu Finance in Paris, which oversees $6.2 billion. ``The company will be number one in U.K. nuclear and has put a foot in the door in the U.S.''

New Design

British Energy's land is attractive to EDF, which has plans for at least four new U.K. reactors from 2017. EDF wants to operate 10 plants of a new design, the European Pressurized Reactor, or EPR, in the U.S., China, U.K. and South Africa by 2020, Gadonneix, 65, said in May.

British Energy, led by CEO Bill Coley, 65, has sought to improve the reliability of its nuclear power stations and to secure extensions for their operating lives.

The U.K. utility posted a 65 percent drop in first-quarter profit to 62 million pounds on lower output. Its reactors produced 27 percent less power than a year earlier because of closures following the discovery of corroded wires.

The country's Nuclear Decommissioning Authority, an agency that cleans up older plants, said Sept. 10 it would auction three pieces of land. EDF already bought property adjacent to sites owned by both British Energy and the authority. E.ON AG, Germany's biggest utility, has a grid agreement for a new plant at one site starting in 2020.

The U.K. government acquired a stake in British Energy after rescuing it from collapse in 2004. At the time of its bailout of British Energy, the state took responsibility for the cost of closing the company's plants and cleaning up the sites. It created the NLF to pay for decommissioning costs.

To contact the reporters on this story: Tara Patel in Paris tpatel2@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net

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Ruble Gains as Rescue Package, Oil Rebound Boosts Local Stocks

By Emma O'Brien

Sept. 24 (Bloomberg) -- The ruble strengthened for a second day against the central bank's dollar-euro basket as a rebound in oil prices and a government emergency-funding plan bolstered Russian equities.

The managed currency rose against the dollar and the euro as crude pared back yesterday's 12 percent slump, helping Russia's benchmark Micex Index to rise by the most for three days. A stock-market collapse last week forced markets to close for two days, prompting the government to pledge more than $100 billion in emergency funds to stabilize equities and reduce soaring borrowing costs.

The ruble's advance is supported by rising ``equity markets and improved risk appetite,'' said Jon Harrison, an emerging- markets currency strategist in London at Dresdner Kleinwort. ``The success of the Russian measures to stem outflows has helped.''

Russia's currency gained 0.3 percent to 30.2775 against the basket by 3:21 p.m. in Moscow, bound for its strongest close since Sept. 8. Bank Rossii, the central bank, keeps the ruble confined within a trading band against the basket to limit the impact of its fluctuations on the competitiveness of Russian exports.

The ruble was at 25.0120 per dollar today, from 25.0998 yesterday, when it fell 0.3 percent. It rose to 36.7084 per euro, from 36.7733. The basket rate is calculated by multiplying the ruble's rate to the dollar by 0.55, the euro rate by 0.45, then adding the two numbers together.

Oil `Driver'

The Micex Index climbed 4.5 percent to 1,118 today, as oil, Russia's largest export earner, rose 2.3 percent to $109.17 a barrel in New York trading.

``Oil is clearly the major underlying driver of Russian markets and that helps the ruble,'' said Beat Siegenthaler, chief emerging-markets strategist in London at TD Securities Ltd. ``The ruble is stronger from the weak end of the basket'' at 30.40, he added.

The 30-member Micex has lost 25 percent since the beginning of August as Russia's war with Georgia and the turmoil in global credit markets spurred investors to withdraw about $52 billion from the country, according to BNP Paribas SA estimates.

The emergency package, which includes $44 billion to bolster liquidity and $20 billion for buying ``undervalued'' shares in state-run companies, is boosting investor confidence, Paul Biszko, a senior emerging-markets strategist in Toronto at RBC Capital Markets, wrote in a note to clients today.

``A sense of relative calm has swept through Russian markets this week,'' he said. The ruble has strengthened more than 1 percent against the dollar since Sept. 19.

Russian government bonds were mixed, with the yield on the benchmark 30-year note declining 4 basis points to 6.93 percent, its first drop in three days. The two-year note yielded 6.18 percent, up 1 basis point. The difference in yield between Russian and U.S. two-year debt narrowed to 410 basis points, after widening to 469 points on Sept. 16.

To contact the reporter on this story: Emma O'Brien in Moscow at eobrien6@bloomberg.net

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Canadian Dollar Gains as Commodities Including Oil Increase

By Michael J. Moore

Sept. 24 (Bloomberg) -- The Canadian dollar gained after commodities including gold and oil increased.

Canada's dollar strengthened versus 11 of the 16 most- actively traded currencies. It is up 2.9 percent against its U.S. counterpart so far this month. Commodities account for about half of the nation's exports.

``It's getting a bit of a lift off commodity prices, so it's one of the better-performing currencies,'' said Shaun Osborne, chief currency strategist at TD Securities Inc. in Toronto. ``We are seeing some strength in crude oil prices, so we can perhaps expect the Canadian dollar to be relatively strong through the course of the day.''

The Canadian currency appreciated 0.5 percent to C$1.0330 per U.S. dollar at 8:34 a.m. in Toronto, from C$1.0384 yesterday. One Canadian dollar buys 96.80 U.S. cents.

Crude oil for November delivery gained as much as $2.89, or 2.7 percent, to $109.50 a barrel. Gold increased 1 percent to $895 an ounce.

To contact the reporter on this story: Michael J. Moore in New York at Mmoore55@bloomberg.net.



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Norwegian Krone Falls as Central Bank Leaves Key Rate on Hold

By Bo Nielsen

Sept. 24 (Bloomberg) -- The Norwegian krone weakened against the euro after the central bank kept its main interest rate at a 5 1/2-year high and said there are ``clear signs'' economic growth is slowing.

While inflation has risen above the central bank's 2.5 percent target, the risks of an economic downturn prevented an increase in borrowing costs, the bank said today.

``In Norway, there are also clear signs that economic growth is slowing,'' Deputy Governor Jan Qvigstad wrote in a statement on the bank's Web site. ``There is now an unusually high degree of uncertainty linked to the turbulence in financial markets. It is therefore appropriate to keep the interest rate unchanged now.''

The Norwegian currency was at 8.2542 per euro on 2:05 p.m. in Oslo from 8.2274 yesterday. It was little changed at 5.6211 versus the dollar, from 5.5411. Sweden's krona was little changed at 9.6357 per euro and 6.5625 versus the dollar.

UBS AG and Citigroup Inc. were among the banks in the past week that altered their forecasts to unchanged, from an earlier estimate of a quarter-point increase, as inflation slowed.

Norway's underlying inflation rate, which excludes energy costs and taxes, fell to 2.8 percent in August, from 2.9 percent in July, Oslo-based Statistics Norway said on Sept. 10. Norges Bank's inflation target is 2.5 percent.

``The risk of a long economic downturn abroad has increased,'' the bank said in today's statement.

Norges Bank, which raised its key rate twice this year, to a 5 1/2-year high, indicated in June it may deliver one more increase by December to curb inflation.

High-Yield Demand

Demand for higher-yielding currencies also rose after the Federal Reserve arranged to channel $30 billion into the global financial system by opening currency swap lines with Australia, Denmark, Norway and Sweden, and Goldman Sachs Group Inc. said it will raise $5 billion from Warren Buffett's Berkshire Hathaway Inc. in a plan to shore up the firm's capital base and restore market confidence.

Buffett's investment in Goldman alleviated concern that firms reliant on bond markets for funding will be starved of finance following a surge in borrowing costs. Money-market rates soared after Lehman Brothers Holdings Inc. filed for bankruptcy last week and Bank of America Corp. bought Merrill Lynch & Co.

When risk aversion is lower, investors borrow in low- yielding currencies such as the yen to buy assets in higher- interest-rate assets such as the krone, in so-called carry trades. When risk aversion increases the trades are reversed.

Changed Forecasts

Sweden's interest rate of 4.75 percent and Norway's main rate of 5.75 percent are exceeded only by New Zealand and Australia among the Group of 10 nations.

In other trading, the Icelandic krona traded at 94.85 versus the dollar, from 94.94 yesterday, after a government report showed the consumer-price index rose 14 percent in the year ended in September, down from 14.5 in the prior period.

Nordic government bonds climbed, with the yield on Sweden's 5.25 percent note due March 2011 falling 9 basis points to 3.92 percent. The yield on Norway's 6 percent bond maturing in May 2011 fell 2 basis points to 4.86 percent, according to Danske Bank A/S prices. Yields move inversely to bond prices.

To contact the reporter on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net



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Yen Declines Against Euro on Fed Offer of Cash, Buffett Deal

By Bo Nielsen and Stanley White

Sept. 24 (Bloomberg) -- The yen weakened against the euro after the Federal Reserve agreed to provide central banks with more cash to increase lending, encouraging traders to purchase higher-yielding assets funded in Japan.

Japan's currency also slid, dropping against most of its major counterparts, as Goldman Sachs Group Inc. raised $5 billion from Warren Buffett's Berkshire Hathaway Inc. and the same amount in a stock offering. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are due to give more congressional testimony on a proposed $700 billion bailout.

``There's certainly a volley back and forth between taking on risk and taking it off,'' said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products in Wilton, Connecticut. ``Everyone is still trying to decipher the bailout package.''

The yen dropped 0.6 percent to 155.59 per euro at 10:06 a.m. in New York, from 154.63 yesterday. The yen traded at 105.84 per dollar, compared with 105.56. The euro appreciated 0.5 percent to $1.4724, from $1.4648.

Berkshire Hathaway, led by 78-year-old Buffett, is buying $5 billion of Goldman perpetual preferred stock with a 10 percent dividend. Berkshire also gets warrants to buy $5 billion of common stock at $115 a share at any time in the next five years. Goldman also sold 40.65 million shares of common stock at $123 apiece, the firm said in a statement.

Carry Trades

Demand for the yen typically drops when appetite for higher-risk assets increases, as traders pare so-called carry trades. In such transactions, investors get funds in a country with low borrowing costs and invest in another with higher interest rates, earning the spread between the two. The risk is that currency-market moves can erase those profits.

The Bank of Japan's benchmark rate of 0.5 percent compares with 4.25 percent in Europe, 7 percent in Australia and 7.5 percent in New Zealand.

The yen fell 0.7 percent to 88.53 per Australian dollar and 0.6 percent to 72.35 versus the New Zealand dollar.

``Risk appetite is slightly better, but still very fragile,'' said Ian Stannard, a senior currency strategist in London at BNP Paribas SA, the most accurate currency forecaster in a 2007 Bloomberg survey.

The dollar fell against the euro earlier as the Fed arranged $30 billion in swaps lines with central banks in Norway, Sweden, Denmark and Australia, providing easier access to the U.S. currency in a response to demand for dollar loans.

Bailout Debate

The U.S. Congress may prolong debate on the government's proposal to remove illiquid assets from the banking system. Lawmakers have balked at rubber-stamping the Treasury's plan, with Democrats demanding it include support for homeowners and limits on executive pay. Republicans are also resisting the plan, which economists predict would push the budget deficit to an all-time high next year.

Bernanke and Paulson said yesterday the bailout is needed to avert a recession in the world's biggest economy.

``The risk this afternoon is that Bernanke sounds more concerned from the fallout from the banking crisis into the real economy,'' said Steve Barrow, a currency strategist at Standard Bank Plc in London. ``That could weigh on the dollar.''

The U.S. currency has lost about 4.5 percent versus the euro since touching a one-year high of $1.3882 on Sept. 11. The dollar reached $1.6038 on July 15, the weakest level since the European currency made its 1999 debut. It may weaken to as low as $1.50 this year, Stannard said.

The chance of the Fed cutting its 2 percent benchmark rate by a quarter-percentage point at its Oct. 29 policy meeting was 74 percent, compared with 58 percent yesterday, futures contracts on the Chicago Board of Trade showed.

The dollar fell against the euro today as the National Association of Realtors reported that U.S. sales of existing homes declined last month to a 4.91 million annual rate. The median forecast of 73 economists surveyed by Bloomberg News was for a drop to a 4.94 million pace.

To contact the reporters on this story: Bo Nielsen in Copenhagen at bnielsen4@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net



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Brazil's Real Gains as Buffett's Investment Eases Risk Aversion

By Adriana Brasileiro

Sept. 24 (Bloomberg) -- Brazil's real rose after Warren Buffett's Berkshire Hathaway Inc. agreed to invest $5 billion in Goldman Sachs Group Inc., easing concern U.S. vulnerability will hurt higher-yielding, emerging-markets assets.

``It's a good sign to see deals like this in an environment where confidence is still very, very weak,'' said Hideaki Iha, a currency trader at Fair Corretora in Sao Paulo. ``More liquid emerging-market currencies like the real are suffering a lot with the crisis.''

The real increased 1 percent to 1.8290 per dollar at 9:14 a.m. New York time, from 1.8465 yesterday. The gain pared September's loss to 11 percent. The real remains the biggest loser against the dollar among the 16 most-active currencies tracked by Bloomberg his month.

U.S. Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson are due to give more congressional testimony today on a proposed $700 billion bailout of the financial system.

``Investors are waiting to see when and under what terms the U.S. Congress will approve the bailout package,'' Iha said.

The yield on Brazil's zero-coupon bonds due in January 2010 fell 4 basis points, or 0.04 percentage point, to 14.90 percent. The yield on the overnight futures contract for January delivery fell almost 2 basis points to 14.07 percent.

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



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Copper Rebounds in New York as Weaker Dollar May Spur Demand

By Millie Munshi

Sept. 24 (Bloomberg) -- Copper rose, rebounding from its biggest drop in two weeks, on speculation that a weaker dollar will revive demand from investors seeking a hedge against inflation.

The dollar lost as much as 0.6 percent against the euro today. Copper and other commodities, mostly traded in dollars, often move in the opposite direction of the U.S. currency. Before today, the metal gained 3.7 percent this year, partly because of improved demand from investors seeking a store of value.

``Copper is finding some support with the weakness in the dollar today,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. ``The lower dollar is making the metals look attractive.''

Copper futures for December delivery rose 1.15 cents, or 0.4 percent, to $3.1635 a pound at 9:17 a.m. on the Comex division of the New York Mercantile Exchange. The contract fell 3.2 percent yesterday, the most since Sept. 5.

Still, copper's gains will be limited on speculation slower economic growth will reduce demand for the metal, used in pipes and wires, McGhee said.

``Copper will be an underperformer in the metals sector until the economy starts to look better,'' he said.

On the London Metal Exchange, copper for delivery in three months added $55, or 0.8 percent, to $7,035 a metric ton ($3.19 a pound). The metal touched a record $8,940 a ton on July 2.

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.



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Gold and Silver Rally as Dollar Weakens Against Euro, Oil Rises

By Pham-Duy Nguyen

Sept. 24 (Bloomberg) -- Gold rose for the second time this week as the dollar weakened against the euro and a gain in energy costs boosted the appeal of the precious metal as a hedge against inflation. Silver also advanced.

The euro climbed as much as 0.7 percent against the dollar and crude oil approached $110 a barrel. Before today, gold gained 6.7 percent this month as the U.S. financial crisis sparked demand for haven assets. Gold reached a record $1,033.90 an ounce in March as the euro and crude headed for records in July.

``Gold is still responding to the dollar and energy, which could provide some support amid the backdrop for a bailout plan,'' said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. Should Congress approve the plan, ``gold will attract some foreign buyers because of a general inclination to reduce exposure to the dollar.''

Gold futures for December delivery rose $14.10, or 1.6 percent, to $905.30 an ounce at 9:22 a.m. on the Comex division of the New York Mercantile Exchange. The metal gained 13 percent last week, the most since October 1999.

Silver futures for December delivery rose 44 cents, or 3.3 percent, to $13.61 an ounce on the Comex.

Congress is weighing a $700 billion plan by U.S. Treasury Secretary Henry Paulson to ease the credit crisis that helped push Lehman Brothers Holdings Inc. into bankruptcy last week.

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



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U.K. Pound Declines Against Euro, Little Changed Versus Dollar

By Andrew MacAskill

Sept. 24 (Bloomberg) -- The pound declined against the euro, erasing earlier gains, and was little changed versus the dollar.

The British currency fell to 79.23 pence per euro as of 1:11 p.m. in London, from 79.09 pence yesterday. Against the dollar, the pound traded at $1.8541, from $1.8522.

To contact the reporter on this story: Andrew MacAskill in London at amacaskill@bloomberg.net



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Most Asian Stocks Gain, led by Mitsubishi UFJ; Sony Declines

By Chua Kong Ho and Kyung Bok Cho

Sept. 24 (Bloomberg) -- Most Asian stocks rose, led by financial companies, as a share sale by Goldman Sachs Group Inc. eased concern that the global credit crisis will deepen.

Macquarie Group Ltd. surged 11 percent in Sydney after Warren Buffett'sBerkshire Hathaway Inc. said it will buy $5 billion of Goldman stock. Mitsubishi UFJ Financial Group Inc. rose 4.2 percent in Tokyo after saying it will purchase as much as 20 percent of Morgan Stanley. Honda Motor Co. and Sony Corp. dropped at least 2 percent on concern demand for cars and consumer electronics will fall as economic growth slows.

``Buffett has given Goldman his seal of approval,'' said Kim Jae Dong, who oversees the equivalent of $2.6 billion as head of equities at SEI Asset Korea Co. in Seoul. ``That has helped lift peoples' worries that the big investment banks would fail, but there's still lingering concern about a recession.''

The MSCI Asia Pacific Index was down 0.1 percent at 116.23 as of 7:40 p.m. in Tokyo. About five stocks gained for every four that fell. The benchmark index dropped as much as 6.9 percent last week after Lehman Brothers Holdings Inc. filed for bankruptcy, American International Group Inc. was taken over by the U.S. government and Merrill Lynch & Co. sold itself to Bank of America Corp.

Standard & Poor's 500 Index futures rose 1.4 percent today. Goldman, which this week transformed itself from the biggest U.S. securities firm to the fourth-largest bank by assets, advanced 7.8 percent in after-hours trading in New York after saying Berkshire will purchase $5 billion of perpetual preferred shares.

Nikkei, Hang Seng

Japan's Nikkei 225 Stock Average rose 0.2 percent to 12,115.03. The country's markets were shut yesterday. Australia's S&P/ASX 200 Index gained 1.2 percent, led by National Australia Bank Ltd., the nation's biggest by assets.

The S&P 500 Index dropped 1.6 percent yesterday, capping a two-day decline of 5.3 percent, as Congress members expressed skepticism about Treasury Secretary Henry Paulson's $700 billion bank bailout plan, which Federal Reserve Chairman Ben S. Bernanke said is critical for preventing a recession.

The Federal Reserve arranged today to channel $30 billion into the global financial system by opening currency swap lines with four central banks to relieve short-term dollar funding in markets worldwide.

Macquarie, Australia's biggest securities firm, gained 11 percent to A$40, while National Australia Bank advanced 7.3 percent to A$25.60.

Goldman also said it plans to sell at least $2.5 billion of common stock to the public. It will be the firm's first such offering since 2000.

`Cheap Prices'

Sumitomo Mitsui Financial Group Inc., Japan's second-largest listed bank by value, may invest in Goldman's public offering, two people with knowledge of the matter said, declining to be identified before a decision is announced. Kyodo news reported earlier that Sumitomo Mitsui will invest in Goldman. Spokespeople for the banks declined to comment. Sumitomo Mitsui gained 1.2 percent to 684,000 yen.

Mitsubishi UFJ, Japan's largest bank, gained 4.2 percent to 936 yen. The lender said on Sept. 22 it agreed to buy 10 percent to 20 percent of Morgan Stanley, adding that it will start due diligence before determining a final price.

Nomura Holdings Inc., Japan's biggest securities firm, rose 5.2 percent to 1,505 yen after agreeing to pay less than a month's revenue for units of bankrupt Lehman Brothers Holdings Inc. in Asia and Europe.

``It's smart for Japan's financial institutions to pick up assets at cheap prices and expand overseas,'' said Roger Groebli, Singapore-based head of financial market analysis at LGT Capital Management, which oversees about $20 billion.

Cars, Electronics

MSCI's Asian index has dropped 26 percent this year, as a U.S. housing recession triggered a global credit crisis that has saddled financial companies with more than $520 billion in writedowns and losses, crippled lending and threatened to drag the global economy into a recession.

The Asian benchmark was valued at 13.18 times estimated earnings as of yesterday, the cheapest valuation since Nov. 20, 2007, according to data compiled by Bloomberg.

Honda, Japan's second-largest automaker, slid 2 percent to 3,430 yen. Toyota Motor Corp., which counts North America as its largest market, fell 1.2 percent to 4,810 yen. Sony, the world's second-largest consumer electronics maker, dropped 2.6 percent to 3,430 yen.

In Hong Kong, China Petroleum & Chemical Corp., Asia's biggest oil refiner, added 2.8 percent to HK$6.66.

Crude oil for November delivery fell 2.5 percent to $106.61 a barrel in New York yesterday and was recently trading at $107.80.

Jiangxi Copper Co., China's second-biggest copper smelter, slumped after the price of the metal fell 3.2 percent, the most since Sept. 5. Jiangxi lost 2.7 percent to HK$8.39 in Hong Kong.

Palm Oil

Sumitomo Chemical Co. declined 5.2 percent to 516 yen, after Deutsche Bank AG lowered its price estimate for the chemicals maker, citing weak demand and a delay in a joint venture.

Plantation stocks declined in Kuala Lumpur after Standard Chartered Plc lowered its 2008 and 2009 price estimates for crude palm oil. IOI Corp., Malaysia's second-biggest oil-palm grower, slid 1.3 percent to 4.5 ringgit.

ZTE Corp., China's second-biggest maker of telephone network equipment, plunged 9.7 percent to HK$27.10, the lowest since March 31. The China Securities Journal reported yesterday ZTE won fewer orders from China Telecommunications Corp. than rival Huawei Technology Co.

Paladin Energy Ltd., the Australian company producing uranium in Namibia, rose 6.5 percent to A$4.62 after more than doubling its estimated ore reserves.

To contact the reporter for this story: Chua Kong Ho in Shanghai at kchua6@bloomberg.netl; Kyung Bok Cho in Seoul at kcho7@bloomberg.net

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Russia, India Lead Emerging Market Gains on Goldman, Fed Deals

By Emma O'Brien

Sept. 24 (Bloomberg) -- Emerging market stocks gained as Warren Buffett's backing of Goldman Sachs Group Inc. and the Federal Reserve's currency swap deal with four central banks lured investors back to riskier assets.

Russia's dollar-denominated RTS Index gained 3.9 percent to 1,321.62 in Moscow and the government's 30-year dollar bonds increased for the first time in three days, lowering the yield by 4 basis points to 6.93 percent. The Bombay Stock Exchange Sensitive Index, or Sensex, jumped as much as 2 percent, helping lift the MSCI Emerging Markets Index by 0.2 percent to 831.67.

``When a big investor shows he has confidence in Goldman Sachs that's naturally supportive for financials and the Fed's swap deal addresses one of the biggest problems at the moment which is limited liquidity,'' said Beat Siegenthaler, chief strategist for emerging markets in London at TD Securities Ltd. ``Emerging markets are at the mercy of the global story and that is overriding most country-specific issues at the moment.''

Goldman will raise more than $7.5 billion by selling stakes to Buffett's Berkshire Hathaway Inc. and through public stock offerings. The Fed arranged to channel $30 billion into the global financial system by opening currency swap lines with central banks in Australia, Norway, Denmark and Sweden, helping to ease dollar shortages.

Russia's ruble-denominated Micex Index climbed 2.7 percent to 1,100.08 before trading was halted at 4:20 p.m. in Moscow because of ``technical'' problems, according to spokesman Alexei Gerasyuk. Trading will resume an hour after the suspension, he said.

China's CSI 300 Index, which tracks yuan-denominated A shares, advanced 0.7 percent to 2,138.85.

Romania Rises

Romania's benchmark BET Index rose 0.5 percent to 4,626.19 after the government suspended a 16 percent capital gains tax on stock market investments and cut transaction fees. The Bucharest Stock Exchange index has lost 53 percent in the past year.

Romania also plans to sell stock in state companies such as Nuclearelectrica SA, operator of the country's nuclear reactors. Romania's leu strengthened 0.3 percent against the dollar today.

The ruble strengthened 0.6 percent to 24.9407 against the dollar. Russian markets were boosted by a jump in the price of oil, the country's biggest export earner. Crude for November delivery gained as much as 2.7 percent to $109.50 a barrel in electronic trading on the New York Mercantile Exchange, as investors anticipate a government report will show U.S. crude and fuel inventories fell last week.

Oil `Comfort'

``We're seeing a relief rally driven by low valuations after recent declines in emerging markets,'' said Peter Westin, an equities strategist at JPMorgan Chase & Co. in Moscow. ``Oil is definitely providing some comfort.''

OAO Lukoil, the biggest non-state oil company in Russia, gained 0.6 percent to 1,659 rubles on the Micex before trading stopped. The yield on Lukoil's 7.1 percent bond maturing in 2011 dropped 100 basis points to 9.12 percent today, the lowest in two weeks.

OAO Gazprom, the world's largest natural-gas producer and Russia's biggest borrower, jumped 5.7 percent to 215 rubles after Kommersant reported it plans to pay back 230 billion rubles ($9.2 billion) of debt by the end of the year.

Emerging-market stocks are the cheapest relative to their earnings since July 2005, with the MSCI Emerging Markets Index valued at 10.9 times the profits of its companies last week, according to data compiled by Bloomberg.

``There's really some excellent bargains out there,'' Mikhail Galkin, director of fixed-income and credit research at MDM Bank in Moscow, said in an interview with Bloomberg Television today.

The extra yield investors demand to own developing nations' bonds instead of U.S. Treasuries increased 4 basis points to 3.63 percentage points, according to JPMorgan's EMBI+ index at 1:47 p.m. in London. A basis point is 0.01 percentage point.

To contact the reporter on this story: Emma O



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Turkey May Allow Futures Trades in 10 Biggest Stocks This Year

By Seda Sezer

Sept. 24 (Bloomberg) -- Turkey may allow trading of futures contracts in as many as 10 of the country's biggest companies as it grapples with the worst stock market slump since 2000.

TurkDEX, the nation's derivatives exchange, has applied to regulators to allow trading from November in the 10 stocks that have the highest volume on the Istanbul Stock Exchange, TurkDEX Chief Executive Officer Cetin Ali Donmez said in an interview.

Turkey's ISE National 100 Index has tumbled 37 percent in 2008, the biggest retreat since a 38 percent drop in 2000, as shares in developing nations declined on the freeze in credit markets. The most-traded shares in Istanbul include Turkiye Garanti Bankasi AS, the lender co-owned by General Electric Co., and mobile phone operator Turkcell Iletisim Hizmetleri AS.

The exchange may also allow trading of stock options in November 2009, Donmez said, adding that the products initially available will be ``easy to understand.'' The spread of complex derivative instruments in developed economies helped spur the credit crunch that resulted in more than $500 billion in losses at global banks.

TurkDEX, based in the western Turkish city of Izmir, was established in 2005 and currently allows investors to trade futures in Turkish Treasury bills and the country's main stock indexes, as well as currencies and some commodities such as cotton and wheat.

Donmez predicted that trading on the derivatives exchange will exceed the volume on the Istanbul Stock Exchange next year. Initial futures trading may not include all of the 10 biggest companies, Donmez said, without naming any of them.

To contact the reporter on this story: Seda Sezer in Istanbul at ssezer2@bloomberg.net.



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U.S. Stocks Advance on Buffett's $5 billion Goldman Investment

By Elizabeth Stanton

Sept. 24 (Bloomberg) -- U.S. stocks rose for the first time in three days as investor Warren Buffett's purchase of a $5 billion stake in Goldman Sachs Group Inc. and endorsement of the Treasury's plan to shore up banks bolstered confidence in the financial system.

Goldman, which this week transformed itself from a securities firm into a bank holding company, added 2.7 percent after saying Buffett's Berkshire Hathaway Inc. will buy preferred shares and the company will sell an additional $5 billion in common stock. Morgan Stanley, which is also converting into a bank, climbed almost 4 percent.

``It's definitely a vote of confidence, one of the smartest long-term investors putting money up,'' said Ralph Shive, chief investment officer at South Bend, Indiana-based 1st Source Corp. Investment Advisors, which manages $3 billion. ``In the context of the financial bonfire, he poured a little water on the fire, which is positive in the short term.''


The Standard & Poor's 500 Index added 2.27 points, or 0.2 percent, to 1,190.49 at 9:33 a.m. in New York. The Dow Jones Industrial Average climbed 16.48 to 10,870.65. The Nasdaq Composite Index advanced 16.71 to 2,170.04. About five stocks gained for every two that fell on the New York Stock Exchange.

Benchmark indexes rebounded from their steepest two-day plunge in six years. U.S. stocks declined yesterday as members of the Senate Banking Committee expressed objections to recommendations by Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson for Congress to quickly pass a $700 billion plan to buy toxic assets from financial firms.

Buffett's Buy

Goldman rose $3.39 to $128.44, extending yesterday's 3.5 percent increase. In addition to Buffett's investment, the most profitable firm on Wall Street plans to raise $5 billion in a stock offering, two people familiar with the situation said. Sumitomo Mitsui Financial Group Inc., Japan's second-biggest bank by market value, may invest in Goldman's offering, two people familiar with the plans said.

Berkshire's preferred shares pay a 10 percent dividend and the company is also getting warrants to buy $5 billion of common stock at $115 apiece, 8 percent less than Goldman's closing share price yesterday.

Buffett endorsed Paulson's plan in an interview this morning on CNBC, saying it was ``absolutely necessary'' to stem an ``economic Pearl Harbor.''

`No Plan B'

``The market could not have taken another week'' like last week, Buffett told the news channel. ``I think it was the last thing Hank Paulson wanted to do, but there's no Plan B for this.''

Morgan Stanley, which this week said it will get an outside investment from Japan's Mitsubishi UFJ Financial Group, added $1.09 to $29.09.

JPMorgan Chase & Co., Wachovia Corp. and Washington Mutual Inc. all climbed at least 2 percent.

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


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Consol, Evergreen Solar, Juniper, Sequenom: U.S. Equity Movers

By Elizabeth Campbell and Whitney Kisling

Sept. 24 (Bloomberg) -- The following companies may have unusual price changes in U.S. trading today. Stock symbols are in parentheses, and share prices are as of 9:40 a.m. in New York.

Makers of alternative-energy equipment gained after the U.S. Senate passed a bill that would extend tax credits on solar power installations through 2016.

Evergreen Solar Inc. (ESLR US), which RBC Capital Markets analyst Stuart Bush raised to ``sector perform,'' rose 9.9 percent to $6.32. Energy Conversion Devices Inc. (ENER US) added 11 percent to $62.79. Akeena Solar Inc. (AKNS US) surged 23 percent to $5.25. SunPower Corp. (SPWR US) rose 8 percent to $94.52.

Consol Energy Inc. (CNX US) slid 10 percent, the most in a week, to $55.95. The second-biggest U.S. coal producer by market value cut its third-quarter production forecast by as much as 18 percent to 15 million tons and said unit costs in the same period will be up to 10 percent higher than the second quarter.

Goldman Sachs Group Inc. (GS US) gained 2.7 percent to $128.44. The bank raised $10 billion from Warren Buffett's Berkshire Hathaway Inc. (BRK/A US) and public investors in a bid to quell concerns that pushed up the Wall Street firm's borrowing costs and hurt its stock.

James River Coal Co. (JRCC US) slid 11 percent to $29.67. The owner of mines in Kentucky and Indiana said it plans to sell 1.5 million shares of common stock. Additional shares may dilute the value of existing stock.

Juniper Networks Inc. (JNPR US) lost 4 percent to $23.25, the lowest since July 24. The second-largest maker of networking equipment was cut to ``underperform'' from ``neutral'' at Merrill Lynch & Co.

MEMC Electric Materials (WFR US) climbed 6.4 percent, the most since Sept. 12, to $30.81. The maker of silicon wafers for computers and telecommunications equipment was raised to ``outperform'' from ``sector perform'' at RBC Capital Markets.

Sequenom Inc. (SQNM US) rose the most since June 4, climbing 21 percent to $24.95. The company said its test to detect Down syndrome before birth correctly identified more than 200 samples in a study.

To contact the reporters on this story: Elizabeth Campbell in New York ecampbell11@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net.



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European Stocks Decline, Led by Carmakers on Oil; UBS Advances

By Adam Haigh

Sept. 24 (Bloomberg) -- European stocks fell for a third day as higher oil prices weighed on automakers, overshadowing gains among financial companies after Goldman Sachs Group Inc. won backing from Warren Buffett.

Renault SA dropped 2.9 percent and Daimler AG slipped 1.1 percent as crude oil traded above $109 a barrel. UBS AG added 5.1 percent and Royal Bank of Scotland Group Plc rallied 4.8 percent after Buffett's Berkshire Hathaway Inc. said it's buying $5 billion of perpetual preferred stock in Goldman with a 10 percent dividend. British Energy Group Plc advanced 6.2 percent after Electricite de France SA said it will pay 12.5 billion pounds ($23 billion) for the U.K.'s biggest power producer.

``There are deals to be done by the people that have a lot of cash,'' said Andy Lynch, who manages about $3 billion at Schroder Investment Management Ltd. in London. ``Buffett clearly has done another very, very good deal. EDF is in a good cash position.''

The Dow Jones Stoxx 600 Index lost 0.2 percent to 266.80 as of 2:39 p.m. in London. The measure has erased more than half of a record 8.3 percent rally on Sept. 19, when the U.S. government announced plans to bail out financial companies. The gauge is down 27 percent this year after losses and writedowns at financial companies topped $521 billion globally, sapping investor confidence as profits were wiped out.

National benchmark indexes decreased in 13 of the 18 western European benchmarks. The U.K.'s FTSE 100 Index slipped 0.3 percent as Vedanta Resources Plc dropped. France's CAC 40 Index fell 0.2 percent, while Germany's DAX declined 0.2 percent.

Ifo Index

A report today showed German business confidence slid to the lowest level in more than three years in September. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 92.9 from 94.8 in August.

Renault, France's second-largest carmaker, declined 2.9 percent to 47.68 euros. Daimler AG, the world's biggest luxury carmaker, slipped 1.1 percent to 38.305 euros.

Oil climbed as much as 2.7 percent to $109.50 a barrel in New York on expectations a government report will show U.S. crude and fuel inventories declined last week and following the shutdown of an oil terminal in Texas.

UBS, the European bank hardest hit by the subprime crisis, added 5.1 percent to 20.12 Swiss francs. RBS increased 4.8 percent to 213 pence.

Goldman is down 40 percent this year and has lost 17 percent since the beginning of last week as Lehman Brothers Holdings Inc. filed for bankruptcy and American International Group Inc. government agreed an $85 billion credit line for the largest U.S. insurer.

Stock Offering

Berkshire also gets warrants to buy $5 billion of Goldman's common stock at $115 a share at any time in the next five years.

Goldman plans to raise $5 billion in a stock offering, double what the bank had originally sought, two people familiar with the situation said today. Goldman spokesman Lucas van Praag declined to comment.

British Energy advanced 6.2 percent to 769 pence. EDF said it will pay 774 pence a share for the utility. That's 35 percent above the stock's closing price on March 14, the last trading session before British Energy said it may receive an offer. EDF climbed 4.4 percent to 51.37 euros.

Mergers and acquisitions have totaled $471.5 billion in the past three months, compared with $524.5 billion in the year- earlier period, according to Bloomberg data, as a 12 percent drop in the MSCI World Index has slowed the pace of deals.

ProSiebenSat.1 Media AG sank 8.5 percent to 5.06 euros after Germany's biggest private broadcaster cut a profit forecast for 2008, citing falling advertising revenue.

Vedanta, India's largest copper producer, slid 5.8 percent to 1,439 pence as shareholders forced the company to dump reorganization plans unveiled two weeks ago.

Arcandor AG, Germany's biggest department-store owner, climbed 9.3 percent to 3.66 euros as banks extended the retailer's loan agreement following more than a week of negotiations.

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



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CI Financial, EnCana, Gildan, Westport: Canada Equity Preview

By John Kipphoff

Sept. 24 (Bloomberg) -- The following companies may have unusual price changes in Canadian trading. Stock symbols are in parentheses, and share prices are from yesterday's close in Toronto.

The Standard & Poor's/TSX Composite Index declined 0.8 percent to 12,532.63.

CI Financial Income Fund (CIX-U CN): Canada's third-largest mutual-fund manager has halted acquisition efforts because stock market volatility is making it difficult to assign a value to targets, Chief Executive Officer Bill Holland said.

Separately, CI Financial was raised to ``sector perform'' from ``underperform'' by RBC Capital Markets analyst Geoffrey Kwan, who said that the stock is fairly valued after a recent price decline. The shares gained 4.1 percent to C$19.90.

Cinram International Income Fund (CRW-U CN): Clarke Inc. (CKI CN), the investment company of Canadian financier George Armoyan, said it bought an additional 233,000 units of Cinram, the Toronto-based maker of digital video discs. The purchase brings the company's stake in Cinram to 14.5 percent, Halifax- based Clarke said in a statement on Market News. Cinram rose 2.4 percent to C$3.85. Clarke increased 0.8 percent to C$6.25.

EnCana Corp. (ECA CN): Canada's biggest energy company by market value and partner ConocoPhillips will start construction this month on an expansion at the Wood River refinery in Roxana, Illinois. The project is estimated to cost EnCana $1.8 billion and is expected to be finished in the next three years, EnCana said. The shares fell 1.1 percent to C$73.36.

Gildan Activewear Inc. (GIL CN): North America's biggest T- shirt maker was rated ``buy'' in new coverage by UBS AG analyst Vishal Shreedhar, who cited, in a report, Gildan's ability, as an ``industry leader,'' to achieve strong per-share earnings growth.

Gildan was also cut to ``outperform'' from ``strong buy'' by Raymond James & Associates analyst Andy Nasr in Toronto, who wrote in a note that the company faces ``weaker pricing related to a slowdown in end-market demand.'' The shares fell 1.5 percent to C$24.49.

Great-West Lifeco Inc. (GWO CN): The insurer's Putnam Investments unit said investment chief Kevin Cronin resigned, effective Oct. 1. Robert Reynolds, chief executive officer of the Boston-based money-management firm, didn't immediately name a replacement. Great-West shares rose 2.8 percent to C$32.75.

Homburg Invest Inc. (HII/A CN): The real-estate company led by Richard Homburg rose the most in more than two years in Amsterdam after announcing a plan to buy back as much as 10 percent of the stock yesterday. Homburg, based in Halifax, Nova Scotia, also said it will ``consolidate'' 10 existing shares into 1 new one. The Toronto-traded shares gained 0.4 percent to C$2.69.

Junex Inc. (JNX CN): The oil and natural gas exploration company that owns leases in the Quebec Lowlands was rated ``buy'' in new coverage by Fraser Mackenzie Ltd. analyst Victor Vallance in Toronto. The shares fell 0.9 percent to C$2.19.

Westport Innovations Inc. (WPT CN): The developer of technology that allows engines to use cleaner-burning fuels was rated ``buy'' in new coverage by Laurence Alexander at Jefferies & Co. The New York-based analyst set a share-price target of C$13.44 ($13). The shares gained 3.9 percent to C$11.

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



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London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Sep 24 08 12:45 GMT |

It was another choppy trading session in London with overall mixed results for the buck against the majors. Euro-zone data disappointed as French business confidence slipped to a weaker than expected 92 from 97 and the German IFO dipped to 82.7 from 83.5 prior. Euro was modestly lower, shedding about -20 pips in the session to a close near the 1.4655/60 zone. The 1.47 mark proved to be decent resistance and we would look for a break above 1.4720 to be the trigger for further upside. The pound was higher on modest improvement in the monthly retail survey from the Confederation of British Industry. Reported sales, while a paltry -27, beat expectations and were a marked improvement from the -46 print the prior month. GBP/USD as such rallied roughly 25 pips in London trading, closing near the 1.8555 mark. The 1.86 level here proved a good barrier to moves higher. Fundamentally, we would still look to sell rallies in GBP/USD. Equity markets overseas were tame as Asia rose just over 1% while Europe was down a modest -0.3%. As such JPY crosses were much less volatile. USD/JPY added about 35 pips into a 106.15 close while EUR/JPY saw a similar increase into the 1.5550/60 area. Higher oil prices -- into the $109 mark -- also saw USD/CAD shed about -15 pips towards the 1.0340/45 zone. Look for added equity market volatility today to spur price action JPY crosses as Bernanke and Paulson are on tap again. Fed Chairman Bernanke will give his usual assessment of the US economy before the Joint Economic Committee at 1400GMT and then he will be joined by Treasury Secretary Paulson at 1830GMT to testify before the House Financial Services Committee on the bailout plan. Stay tuned! Upcoming Economic Data Releases (NY Session) Prior Estimate 9/24/2008 14:00 GMT US Existing Home Sales AUG 5.00M 4.94M 9/24/2008 14:00 GMT US Existing Home Sales MoM AUG 3.10% -1.20% 9/24/2008 14:00 GMT US Bernanke Testifies at Joint Economic Committee 9/24/2008 14:35 GMT US Crude Oil Inventories -6328K -2500K 9/24/2008 16:00 GMT EC ECB's Stark Speaks in Berlin 9/24/2008 18:30 GMT US Paulson, Bernanke Testify on Financial Crisis 9/24/2008 20:45 GMT UK BOE's Sentance to make speech Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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Forex Trading Recommendations from DailyFX Analysts for the Japanese Yen

Daily Forex Technicals | Written by DailyFX | Sep 24 08 13:54 GMT |

The forex market has been very volatile on speculation the massive $700 billion bailout plan devised by the U.S. Treasury Secretary Paulson will fail to restore confidence on the world's financial system. DailyFX analysts have different opinions regarding the chances of success for this rescue plan which gets reflected in their trade recommendations for the Japanese yen. Chief Strategist - Antonio Sousa My picks: Remain Long AUD/JPY Expertise: Fundamentals and Sentiment. Average Time Frame of Trades: 1 day to 3 months I remain long AUD/JPY since last week and despite the razor-sharp increase in volatility which makes it very difficult to make forecasts, I expect the Australian dollar to rise further against the Japanese yen. Indeed, the demand for high yielding currencies is likely to increase in the weeks ahead since a massive demand for safe assets have sent the yield on U.S. Treasury bills down close to zero which could force investors to search for investment alternatives. Moreover, although no one can be sure that Paulson's plan to buy illiquid mortgage assets from several financial institutions will save the U.S. economy from a technical recession, it's difficult to deny that Paulson's plan is not a good first step to restore confidence in the financial system. Indeed, the measures engineered by the U.S. Federal Reserve to clean the market from some toxic assets could be the first leg of a more general recover in the appetite for risky assets like high yielding currencies. Going forward, lower interest rates could make the Japanese yen less attractive to currency traders and the higher level of demand for bonds and stocks denominated in Australian dollars could accelerate the gains in the AUD/JPY. Senior Currency Strategist - Jamie Saettele My picks: USDJPY short, against 106.90 Expertise: Technical Average Time Frame of Trades: 1 month Don't let the USDJPY lull you to sleep. This is what it does before it makes a major move. The bearish level in the sand is 106.90. Staying below there keeps the short term trend down and potential for the decline to accelerate in a 3rd of a 3rd that will eventually break below 103.52 (and much lower). Confidence in the bearish bias is waning with each passing session though. Currency Strategist - Terri Belkas My picks: Long USD/JPY Expertise: Fundamentals Combined With Technicals Average Time Frame of Trades: 1 - 3 Days Last night's announcement that Warren Buffett would be buying a $5 billion stak in Goldman Sachs has provided a boost to US stock market futures, and with EUR/USD picking up steam, this may be a good opportunity to take a short-term long EUR/JPY position. This is the opposite of my pick from yesterday (which didn't reach my target but did move in the correct direction), as the EUR/JPY bounce from 154.50 last night looks likely to target 157. Currency Analyst - David Rodriguez My picks: Continue selling USD/JPY rallies Expertise: System Trading Average Time Frame of Trades: 2-10 weeks Exactly two weeks ago I signaled my preference for selling USD/JPY rallies, and I continue to maintain that ongoing market volatility will support the Japanese Yen through short-term forex trading. In terms of short-term targets, today's sharp intraday reversal tells me that we are likely to re-test the recent lows near the 104.00 mark. Intraday resistance near 106.37should contain rallies through the near term. Look for other USD/JPY trading signals on our free forex trading signals page. Currency Analyst - Ilya Spivak My picks: Pending Short USDJPY Expertise: Macro Fundamentals, Classic Technical Analysis Average Time Frame of Trades: 1 week - 6 months In recent weeks, we noted that USDJPY could diverge from US dollar strength seen in the other majors with the pair trading in a Rising Wedge formation confirmed by negative divergence with the Slow Stochastic oscillator. Indeed, USDJPY broke below wedge support even as the greenback scored gains across the remainder of the forex spectrum. Current positioning points to near-term support at 104.50 (the July bottom), with resistance at a downward-sloping trend line near 108.00. The pair is now roughly in the middle between these two boundaries, making an entry unfavorable from a risk-reward perspective. Look for a either a pull-up to resistance or a daily close past support to enter short with initial targets in the 102.70-103.00 range. For more details on USDJPY and outlook on the other major pairs, please see the latest Candlestick Weekly Report. Currency Analyst - David Song My picks: Short NZD/JPY Expertise: Fundamentals Combined with Technicals Average Time Frame of Trades: 2 Days - 2 Weeks After falling below 67.50 last week, the NZDJPY has bounced back to hit an intraday high of 74.10 this week. The pair looks to be losing momentum, and I expect the underlying down trend to lead the pair lower over the following week. I anticipate the kiwi-yen to break below 71.75 over the next few days, and may work its way lower to test the 9/16 low of 67.21 for support over the following weeks. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.

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Daily Technical Strategist

Daily Forex Technicals | Written by FXTechstrategy | Sep 24 08 13:45 GMT |

Today's Focus: EURUSD & GBPUSD EURUSD: EUR Turns Ahead Of The 1.4951/67 Zone, The 1.4542/71 Zone Seen As Next Downside Objective GBPUSD: Consolidation To Upside Bias Still Seen Nearer Term. EURUSD EUR weakened Tuesday failing to follow through to the upside on its Monday gains and turning lower ahead key resistance coming in at its Nov'07/Feb'08 congestive highs at 1.4951/67 to close at 1.4686.The said failure now sees the pair targeting the 1.4542/71 zone (Aug 26'08/Sept 18'08 lows) with a fall through opening the door for the pair to aim at the 1.4366/10 zone, its Jan'08/Dec'07 lows before its Sept 16 low at 1.4073 and subsequently the 1.4015 level, its Oct'07 low. Decisively penetrating the latter will signal a move towards its July'07/Sept'08 lows at 1.3882/52 and possibly lower.Alternatively, limiting its corrective recovery pullback to the 1.4542/71 zone will suggest another attempt at the upside targeting the 1.4867 level, its Sept 22'08 followed by the 1.4951/67 levels and later its May/Jun'08 lows at 1.5263/85.The daily stochastics continues to support this view though it is just stepping into overbought zone. On the whole, although EUR's corrective recovery off the 1.3882 level is not over yet, another attempt at the upside could be capped by the 1.4951/67 levels before the pair turns lower. Support Comments 1.4542/71 Aug 26'08/Sept 18'08 low 1.4366/10 Jan'08/Dec'07 lows 1.4073 Sept 16 low 1.4015 Oct'07 low Resistance Comment 1.4867 Sept 22'08 1.4951/67 Nov'07/Feb'08 congestive highs 1.5263/85 May/Jun'08 lows GBPUSD GBP unlike its EUR counterpart continues to digest its recent recovery gains off the 1.7447 low Tuesday consolidating and later closing at 1.8571 to print a doji candle (a sign of indecision).The pair requires a close back above the 1.8641 level, its Monday high to resume its corrective recovery towards a stronger resistance at the 1.8795/1.8802 levels, marking its Aug 26'08 high/.50 Ret (2.0157-1.7447 decline) where it is expected to stall and turn lower again. Though not envisaged at this stage, a clearance of the latter will put pressure on the 1.8836 level, its Nov'06 low and then the 1.9122 level, its .618 Ret. While the pair remains below the 1.8795/1.8802 levels, lower level prices cannot be ruled out .This is supportive of its medium term downtrend. In such a case, the 1.8482 level, its .382 Ret should reverse roles and provide support with a snap below there setting the pair up for further decline towards the 1.8277/44 zone, which represents its Sept 17 & 18'08 highs. Other downside objectives are located at the 1.8128 level (Sept 15'08 high) and the 1.7976 level (Sept 08'08 high) and then its YTD low at 1.7447.Overbought daily momentum studies are supportive of this scenario. On the whole, GBP's broader bias (medium term) remains to the downside implying its current nearer term gains is corrective. Support Comments 1.8482 .382 Ret 1.8123 Sept 15'08 high 1.7976 Sept 08'08 high 1.7447 YTD high Resistance Comments 1.8841 Sept 22'08 high 1.8795/1.8802 Aug 21'08 high/.50 Ret (2.0157-1.7447 decline). 1.9122 .618 Ret Mohammed Isah Market Analyst www.fxtechstrategy.com This report is prepared solely for information and data purposes. Opinions, estimates and projections contained herein are the author's own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which the author incur any responsibility. The does not accept any liability whatsoever for any loss arising from any use of this report or its contents. This report is not construed as an offer to sell or solicitation of any offer to buy any of the currencies referred to in this report

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