S&P 500 Drops to Lowest Level Since January Amid Concern Economy Will Slow

U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the lowest level since January, following an increase in jobless claims, a wider American trade deficit and a slowdown in China’s export growth.
Caterpillar Inc. (CAT) and United Technologies Corp. (UTX) slumped at least 2.3 percent, pacing declines among industrial companies. Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) dropped more than 2.9 percent as crude oil declined a third day amid investor concern that fuel demand will slow. General Motors Co. (GM) decreased 2.6 percent after the largest U.S. automaker said Chief Financial Officer Chris Liddell will leave the company next month.

The S&P 500 retreated 1.9 percent to 1,295.11 at 4 p.m. in New York. The Dow Jones Industrial Average decreased 228.48 points, or 1.9 percent, to 11,984.61 for the biggest decline since Aug. 11. The Stoxx Europe 600 Index tumbled 1.2 percent as Spain’s credit rating was downgraded by Moody’s Investors Service. Crude oil fell 1.6 percent to $102.70 a barrel.

“There are so many uncertainties that it’s hard to want to bid up this market,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “On top of claims popping back up, there’s worsening in the trade deficit at a time when the emerging world is slowing down and the Middle East crisis creates an unpredictable environment for oil. To make matters worse, Spain gets downgraded, which is an indication that the European crisis may be far from being put to bed.”

Middle East Turmoil

The S&P 500 has fallen 3.6 percent from this year’s highest level on Feb. 18 as oil surged 19 percent amid unrest in Libya and the Middle East. The benchmark for U.S. equities has rallied 91 percent from its bear-market low on March 9, 2009, amid government stimulus measures and as corporate earnings beat analysts’ estimates for eight straight quarters.


The benchmark gauge for U.S. equities fell below its average price from the past 50 days, according to data compiled by Bloomberg. The 130 trading days that it remained above that level was the longest since early 2007, according to Bespoke Investment Group.

“Since the 50-day moving average is used by certain momentum-based traders, it would imply lower prices” if the index falls below, said Arthur Huprich, an analyst with Raymond James & Associates Inc. Losses may accelerate should the S&P 500 fall below the Feb. 24 intraday low of 1,294.26, he said.

Jobless Claims Rise

Stock futures fell before the open of exchanges as the Labor Department said applications for first-time unemployment benefits rose by 26,000 to 397,000 in the week ended March 5. Economists forecast claims would climb to 376,000, according to the median estimate in a Bloomberg News survey. Separately, the Commerce Department said the trade deficit in goods and services rose 15 percent to $46.3 billion in January as a surge in imports led by costlier oil overshadowed record exports.

The Bloomberg Consumer Comfort Index dropped to minus 44.5 in the period through March 6 from the prior week’s minus 39.7, which was close to the best level since 2008. Sentiment suffered the most among respondents who lacked a full-time job or any employment and those earning less than $50,000 a year.
The U.S. government, facing a record annual fiscal shortfall and a congressional impasse over financing, posted the largest monthly deficit ever in February, reflecting increased spending. The gap totaled $222.5 billion last month compared with a $220.9 billion shortfall in February 2010, according to the Treasury Department’s monthly budget statement released today in Washington.

China, Spain

Earlier losses in U.S. futures also followed China’s unexpected $7.3 billion trade deficit, the biggest in seven years, buttressing the government’s case against U.S. arguments for faster gains in the yuan. European shares fell as Spain’s rating was cut to Aa2 by Moody’s, which said the cost of shoring up the banking industry will top government estimates.

“There’s just a lot going on,” said Tommy Huie, who oversees about $33 billion as president and chief investment officer of M&I Investment Management in Milwaukee. “I don’t think anyone is willing to commit large positions at this point. Investors will take a wait-and-see approach over the next week or two to rethink their strategy.”

Stocks of companies that are tied to economic growth, including commodity producers and technology firms, posted some of the biggest declines in the S&P 500. The Morgan Stanley Cyclical Index slumped 2.1 percent as 29 of its 30 stocks fell.
Caterpillar, the world’s largest maker of construction equipment, dropped 3.9 percent to $98.39. United Technologies, the maker of Pratt & Whitney jet engines, retreated 2.4 percent to $80.92.

Energy Shares Slump

Energy shares had the biggest decline in the S&P 500 within 10 industries, falling 3.6 percent. Exxon dropped 3.6 percent to $81.38. Chevron retreated 3 percent to $99.08.
General Motors declined 2.6 percent to $31.42. The automaker said Vice Chairman and Chief Financial Officer Chris Liddell will leave the company April 1. Dan Ammann, 38, will succeed Liddell as chief financial officer. Amman had been treasurer and a corporate vice president.

The Bloomberg U.S. Airlines Index of 12 stocks rallied 1.8 percent as concern about higher energy costs eased. JetBlue Airways Corp. (JBLU) gained 4.2 percent to $6. Delta Air Lines Inc. (DAL) advanced 2.8 percent to $11.18.
Green Mountain Coffee Roasters Inc. (GMCR) surged a record 41 percent to $61.71 after agreeing to distribute Starbucks Corp. (SBUX)’s coffee and teas for its single-serve Keurig brewing systems. Starbucks climbed 9.9 percent to $37.97 for the biggest increase in the S&P 500.

H&R Block Rallies

H&R Block Inc. (HRB) advanced 4.3 percent to $15.84. The biggest U.S. tax preparer posted a third-quarter profit of 6 cents a share excluding some items, beating the average analyst estimate of 5 cents, according to Bloomberg data.

The stock market’s retreat from a February peak may be just as short as its dip in November, Dahlman Rose & Co. said. The gauge rebounded at the technical support level on its General Overview Charts both weeks since the 32-month high on Feb. 18, data from Bloomberg and Dahlman Rose show. In November, after the index recovered at the same support level for three weeks, the S&P 500 had its best December return since 1991 and rose for the next two months.

Rick Bensignor, chief market strategist at Dahlman Rose, said the resilience in the stock market may force him to abandon his “overly cautious stance,” including an estimate that the S&P 500 may drop as low as 1,230. Should the S&P 500 close tomorrow at or near this week’s high, the market may be headed for further gains, he said.

“Buying stocks is still en vogue for most, and while sellers are chompin’ at the bit for some solid reason to hit the red button, they haven’t yet found due cause,” Bensignor wrote in a note yesterday. “Should we go out near the highs of the week this Friday, I suspect we need to think that another leg up is coming, and one we’d not want to fight.”

Nikkei

Last Update: 10:56 PM ET, Mar 11

-1.010%

VALUE: 10,328.990 JPY

NIKKEI 225 (NKY:IND)

Snapshot

Summary			One-Year Chart INTERACTIVE CHART
Value	10,328.99
Change	-105.390 (-1.010%)
Open	10,298.64
High	10,378.55
Low	10,298.64

Last Update: 10:54 PM ET, Mar 11

-0.743%

VALUE: 23,439.380 HKD

HANG SENG INDEX (HSI:IND)

 

Summary			One-Year Chart INTERACTIVE CHART
Value	23,439.38
Change	-175.510 (-0.743%)
Open	23,437.50
High	23,514.73
Low	23,360.00

Asian markets

Asian stocks fell, putting the regional benchmark index on course for its biggest weekly drop since August, as Middle East violence and U.S. unemployment stoked concern that a global economic recovery may falter.


Honda Motor Co., the Japanese carmaker that gets about 44 percent of sales in North America, dropped 2.1 percent in Tokyo. Daelim Industrial Co., which gets 22 percent of sales from the Middle East, led South Korean construction companies lower after police broke up a protest in Saudi Arabia yesterday. BHP Billiton Ltd., the world’s largest mining company, lost 0.8 percent in Sydney after copper futures declined.

“The situation in the Middle East provided a trigger for the market correction and now we’re seeing renewed concerns about European debt, and there’s ongoing worries about monetary tightening in Asia,” Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd., which manages about $93 billion, said on Bloomberg Television. “All of these concerns are combining and making investors somewhat nervous.”
The MSCI Asia Pacific Index fell 1 percent to 134.84 as of 12:32 p.m. in Tokyo, with about seven times as many shares declining as advancing. The gauge is set for a 3.3 percent drop this week and is on course for its lowest close since Dec. 21.

The index climbed 1.9 percent last week as better-than- estimated economic data from South Korea to the U.S. boosted confidence in a global recovery, overcoming concern that Middle East unrest will drive oil prices higher and slow growth.

Japan’s Nikkei 225 (NKY) Stock Average decreased 0.8 percent, South Korea’s Kospi Index sank 1.5 percent and Australia’s S&P/ASX 200 Index declined 1.3 percent. Hong Kong’s Hang Seng Index slipped 1 percent.

China Inflation


China’s Shanghai Composite Index dropped 0.3 percent as government data showed the nation’s consumer prices rose 4.9 percent in February from a year earlier, exceeding the government’s 2011 target for a fifth month.

Futures on the Standard & Poor’s 500 Index gained 0.2 percent today. The index tumbled 1.9 percent yesterday in New York after the U.S. Labor Department said applications for first-time unemployment benefits rose by 26,000 to 397,000 in the week ended March 5, more than the median estimate of 376,000 forecast by economists in a Bloomberg News survey.


The U.S. Commerce Department separately said the deficit in goods and services increased 15 percent to $46.3 billion in January as a surge in imports led by costlier crude oil overshadowed record exports.
Exporters Decline

Honda Motor, which counts North America as its biggest market, slipped 2.1 percent to 3,330 yen in Tokyo. Toyota Motor Corp., the world’s largest carmaker, dropped 1.4 percent to 3,600 yen. Li & Fung Ltd. (494), the No. 1 supplier to retailers including Wal-Mart Stores Inc., fell 1.9 percent to HK$44.70 in Hong Kong.

The MSCI Asia Pacific Index has almost doubled in the past two years. It sank to an eight-year low on March 9, 2009, following the bankruptcy filing of Lehman Brothers Holdings Inc. in September 2008.
The gauge briefly extended declines yesterday afternoon after Moody’s Investors Service cut Spain’s credit rating, saying the cost of shoring up the banking industry will eclipse government estimates.
“After a period of optimism, there are now all of these concerns,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.

‘Lingering Uncertainties’

Crude oil for April delivery declined 1.6 percent to settle at $102.70 a barrel in New York yesterday, after falling as much as 3.6 percent earlier. Oil pared losses after police in Saudi Arabia, the Middle East’s biggest producer of crude, reportedly opened fire at a rally in the east of the country.
Daelim Industrial slumped 5.2 percent to 100,500 in Seoul. Hyundai Engineering & Construction Co., which counts the Middle East as its biggest market outside of South Korea, dropped 3.4 percent to 76,100 won. GS Engineering & Construction Corp. declined 4.3 percent to 101,500 won.
South Korean builders won $47.25 billion of orders from the Middle East last year, according to the Seoul-based Korea Trade- Investment Promotion Agency.
“Some news flow from Saudi are chilling sentiment toward builders again,” said Lee Jin Woo, a fund manager in Seoul at KTB Asset Management Co., which manages about $10 billion in assets. “Uncertainties over the situation in the Middle East may linger for a while.”

Convertible Bonds

Gauges of consumer-discretionary companies and raw-material producers led declines among the MSCI Asia Pacific Index’s 10 industry groups, all of which dropped.
BHP Billiton slid 1.5 percent to A$43.98 in Sydney. Rio Tinto Group, the world’s second-biggest mining company, declined 1.8 percent to A$79.01. Jiangxi Copper Co., China’s No. 1 producer of the metal, lost 0.9 percent in Hong Kong.
The London Metal Exchange Index of six metals including copper and aluminum slid 0.4 percent yesterday, falling for a second day to the lowest level since Jan. 26.

IHI Corp., a Japanese heavy-machinery maker, slumped 5.2 percent to 201 yen in Tokyo after saying it plans to sell 23 billion yen ($278 million) of five-year convertible bonds to overseas investors.
CapitaMall Trust (CT), Singapore’s biggest retail property trust, sank 2.2 percent to S$1.79 after the company increased the size of its convertible bond sale to S$250 million ($197 million) from S$200 million.
The MSCI Asia Pacific Index fell 1.1 percent this year through yesterday, compared with gains of 3 percent by the S&P 500 and 0.8 percent by the Stoxx Europe 600 Index. Shares in the Asian benchmark were valued at 13.9 times estimated earnings on average as of the last close, compared with 13.4 times for the S&P 500 and 11.1 times for the Stoxx 600.

Business Highlights from US

WASHINGTON (AP) — Americans are spending more of their growing wealth. The economy still needs companies to do the same.

Still lacking the confidence to spend at normal levels, businesses have stockpiled nearly $1.9 trillion in cash, a record, the government said Thursday. Cash now accounts for 13 percent of corporate assets, the highest share since 1984. Economists say the surest way to reduce unemployment would be for companies to spend more of that cash to expand and hire.

The same report, based on data from the last three months of last year, showed households are further rebuilding the wealth they lost in the recession. Americans' net worth grew 3.8 percent, mostly thanks to the rising stock market.

Greater household wealth generally leads Americans to spend more. They increased their spending in the October-December quarter at the fastest pace since 2006. Household net worth came to $56.8 trillion at the end of 2010, even though the value of real-estate holdings fell 1.6 percent, according to the Fed. Last quarter's gain was faster than the 2.6 percent gain in the previous quarter.

But companies are still waiting for signs that the economy and their own businesses are strengthening enough to justify spending aggressively again.

___

Higher oil prices threaten global economy

WASHINGTON (AP) — Higher oil prices are slowing global economic growth, and the impact is likely to spread in coming months.

Oil prices helped raise the U.S. trade deficit to a seven-month high in January, when crude prices were $87.50 a barrel. Oil is now trading at more than $100 a barrel, suggesting the gap will widen in coming months. Even fast-growing China isn't immune — higher oil prices contributed to a rare trade deficit there in February.

Pricier oil dampens consumer spending and that cuts into economic growth. Surging oil prices can also stir up inflation fears, triggering higher interest rates that cut into household and business spending.

The impact is visible in bold numbers each morning on gas station marquees across the United States. Pump prices have risen 13 percent in the past month to a national average of $3.53 a gallon, according to AAA, Wright Express and Oil Price Information Service.

Airlines have also been rapidly raising their fares to offset higher fuel costs. American Airlines said Thursday it is increasing its base fares by $10, the seventh price hike this year by U.S. airlines.

___

GM chief financial officer resigns unexpectedly

DETROIT (AP) — The chief financial officer who guided General Motors Co. to its first profitable year since 2004 and led its successful return to the stock market is leaving after being passed over for the top job.

Chris Liddell will step down on April 1 after just 15 months at GM. He'll be replaced by Treasurer Dan Ammann, a former Wall Street banker, the company said in a surprise announcement on Thursday.

Liddell, 52, a former CFO at Microsoft Corp., was once considered a candidate to succeed Chief Executive Ed Whitacre. But GM's board instead picked current Chairman and CEO Dan Akerson when Whitacre made a surprise exit in August.

During a hastily arranged conference call with reporters, Liddell said he had no job lined up, but doesn't want to be a chief financial officer any longer. He said he achieved his goals of pulling off GM's IPO, fixing its accounting problems and getting the company back on sound financial footing.

___

Unemployment rate falls in 24 states, rises in 10

WASHINGTON (AP) — The unemployment rate fell or held steady in 40 states in January, the latest sign that hiring is strengthening throughout the country.

The Labor Department said Thursday that the unemployment rate fell in 24 states, the most in seven months, and remained the same in 16. The unemployment rate rose in only 10 states. In December, the rate fell in 15 states and rose in 20.

Employers added to their payrolls in 35 states in January, up from only 15 in the previous month. That's the most to report higher payrolls since October.

Nationwide, employers added 63,000 net jobs in January, and the unemployment rate fell sharply to 9 percent from 9.4 percent. The rate ticked down last month to 8.9 percent and employers added 192,000 net jobs, the most in nearly a year.

___

More people sought unemployment aid last week

WASHINGTON (AP) — The number of people seeking unemployment benefits rose last week. But the rise comes after applications hit their lowest level in nearly three years, and economists expect further declines as the economy improves.

Applications increased by 26,000 to a seasonally adjusted 397,000 during the week ended March 5, the Labor Department said Thursday.

The latest report covers the week after the Presidents' Day holiday, when many government offices were closed. Applications usually rise in weeks following holiday-shortened weeks.

Applications below 425,000 signal modest job growth. But they need to fall consistently below 375,000 to signal a sustained decline in the unemployment rate. Unemployment benefit applications peaked during the recession at 651,000.

Economists were encouraged that claims remained below 400,000 for the third straight week.

___

February federal budget deficit sets record

WASHINGTON (AP) — The government ran the largest-ever budget deficit for a single month in February. The shortfall kept this year's annual deficit on pace to end as the biggest in U.S. history. The widening deficit reflects the impact of the tax-cut package President Barack Obama and congressional Republicans brokered in December.

As a result, the nonpartisan Congressional Budget Office in January raised its estimate for the annual deficit from $1.1 trillion to $1.5 trillion. It said the tax cuts would add $400 billion to this year's gap. The budget year ends Sept. 30. The tax-cut package extended income tax cuts, reduced workers' Social Security taxes, extended unemployment benefits and accelerated business tax write-offs, among other steps.

February's deficit of $222.5 billion eclipsed last February's previous record by nearly $2 billion. The full-year deficit would exceed 2009's record deficit of $1.41 trillion. And it would mark the third straight year of $1-trillion-plus deficits.

It's unusual for an economy to be running record-high deficits this far into a recovery. The recession that began in December 2007 ended in June 2009. The problem was that the financial crisis and the recession that followed fueled explosive deficit growth.

___

Rate on 30-year mortgage ticks up to 4.88 pct.

WASHINGTON (AP) — Fixed mortgage rates were relatively flat this week, with the 30-year loan just under 5 percent.

Freddie Mac says the average rate on a 30-year fixed mortgage ticked up to 4.88 percent from 4.87 percent the previous week. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year fixed home loan stayed steady at 4.15 percent from the previous week. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

___

Wal-Mart expands online order pickup program

NEW YORK — As competition grows from Amazon.com, Wal-Mart is battling back by expanding a program offering the convenience of shopping online along with same-day gratification. The world's largest retailer is expanding its service that lets shoppers pick up online orders at stores to all of its 3,600-plus locations. It's partly a bid to win back consumers who've gone elsewhere for convenience.

The program appeals to shoppers who want to save time on shopping trips, said Steve Nave, senior vice president and general manager of Walmart.com. Shoppers also don't have to wait several days for shipping — or pay for it — and get to shop in the peace and quiet of home.

Wal-Mart Stores Inc., the world's largest retailer, previously offered the service on about 2,000 items in less than a quarter of its stores. Now it will apply 40,000 items, including baby items, toys, electronics, video games and appliances. Groceries are not part of the program.

___

By The Associated Press

Weak economic news from China, the U.S. and Spain combined with a slump in oil companies sent stocks sharply lower Thursday. The Dow Jones industrial average had its biggest one-day drop since August.

Investors were jarred when China reported a surprise trade deficit. China's exports fell in February as businesses closed for the weeklong Lunar New Year holiday, but imports of higher-priced oil and other goods jumped, widening the country's deficit to $7.3 billion.

Moody's downgraded Spain's debt, re-igniting fears about Europe's debt crisis. In the U.S., the government reported that new applications for unemployment benefits rose more than expected last week.

The Dow Jones industrial average fell 228.48 points, or 1.9 percent, to close at 11,984.61. McDonald's Corp. was the only stock in the Dow 30 that rose.

The Standard & Poor's 500 index fell 24.91, or 1.9 percent, to 1,295.11. The Dow and S&P 500 are still up 3 percent since the start of the year.

The Nasdaq composite fell 50.70, or 1.8 percent, to 2,701.02.

Benchmark West Texas Intermediate for April delivery eventually settled down $1.68, or 1.6 percent, to $102.70 per barrel on the New York Mercantile Exchange.

In London, Brent crude lost 51 cents to settle at $115.43 per barrel on the ICE Futures Exchange.

Natural gas fell 10 cents to settle at $3.83 per 1,000 cubic feet after the government said U.S. supplies are still higher than last year despite a drop in price. U.S. inventories have been growing as new technologies allow companies to tap underground shale deposits.

In other Nymex trading for April contracts, heating oil fell 2.58 cents to settle at $3.0449 per gallon and gasoline dropped less than a penny to settle at $3.0196 per gallon.

China February Inflation Steadies, Factory Output Jumps

China's headline consumer price inflation steadied at 4.9 percent in the year to February, the same as January, the National Bureau of Statistics (NBS) said on Friday.

China's industrial output in the first two months of 2011 rose 14.1 percent year-on-year from a 13.5 percent pace in December. 

Economists polled by Reuters had forecast a 4.7 percent rise  in the consumer price index and a 13.3 percent rise in industrial output. 

The consumer price index (CPI) rose 1.2 percent in February from the previous month, after a 1.0 percent month-on-month rise in January. This figure was not seasonally adjusted.

Giving a more detailed breakdown of CPI, the NBS said food  prices rose 11.0 percent in the year to February, with non-food prices up 2.3 percent.

In month-on-month terms, food prices rose 3.7 percent, while non-food prices were up 0.1 percent.

The producer price index rose 7.2 percent in the year to February and was up 0.8 percent month on month.

Friday Look Ahead: Traders Watch Saudi Arabia & Economic Reports

Markets head into Friday watching and waiting to see if economic news outweighs geopolitical concerns, after Thursday's "risk off" selling spree.

Stocks and commodities tanked Thursday on fears of a global slowdown, after China reported a surprise $7.3 billion trade deficit and Spain's debt was downgraded by Moody's.  Oil was also a factor, falling hard early in the day, but regaining some lost ground after reports of a clash between police and protesters in the eastern region of Saudi Arabia.

The Dow [.DJIA  11984.61    -228.48  (-1.87%)   ] fell 1.9 percent to 11,984, its worst day since August 11. The Nasdaq was off 1.8 percent at 2701, and the S&P 500 skidded 1.9 percent to 1295, below the important 1300 level.

Oil finished lower, down 1.6 percent at $102.70, after sinking below $101 earlier in the day. Reports that police fired on protesters in the eastern Saudi city of Qatif sent crude above $103 temporarily.
"I think the market was calculating in a quiet end of the week and that nothing would come of the 'day of rage' in Saudi Arabia. We were on notice for it but given what the Saudis have been doing so far and seemingly getting the clerical community on board, it didn't seem like it would be a factor," said John Kilduff of Again Capital.

U.S. officials told NBC News that Saudis intentionally used only "less than lethal" force to disperse the protesters in Qatif, home to a Shiite minority. Activists have been reported to have called for mass protests against the Kingdom's absolute monarch Friday, but it is not expected that those protests will be major. Protests are planned in other areas of the Gulf, including Yemen and Bahrain after Friday prayers, but the markets will be watching to see what happens in Saudi Arabia, the world's largest oil producer and viewed as much more stable.

"The stakes just went up in a big way. Even if this was a minor incident, it was a jarring reminder of what could happen there," said Kilduff, a CNBC contributor.

Oil has been a wild card for markets, and its rise above $100 has pressured stocks for fear it could snuff the economic recovery. Many traders believe if the unrest is contained, and Saudi is not a factor, the rise in oil could be temporary. Traders have also been expecting to see the S&P break down under the 1300 level, and now the debate is whether there is a new lower marker it is shooting for.

"The headlines have been fairly dire and we've bought the dips. I don't think we break from that dramatically without some sort of major catalyst," said one stock trader. "I didn't see anything today that was the last straw."

There is a stream of economic data Friday, starting with overnight inflation data from China. In the U.S., retail sales are reported at 8:30 a.m. and consumer sentiment is at 9:55 a.m. Both numbers could show the impact of higher gasoline prices on consumer spending and attitudes. Retail sales are expected to be up 1.2 percent, and 0.7 percent, excluding autos. Business inventories are released at 10 a.m.

European leaders also meet in Brussels for an extraordinary summit ahead of their late March meetings where they are expected to agree on how to deal with future bailouts. The leaders Friday are expected to work out a framework for a "competitiveness pact,"  which would include new mechanisms of fiscal discipline.

"No final decisions will be made until the March 24-25 summit," said Marc Chandler, chief currency strategist at Brown Brothers Harriman. "They'll say they're making progress toward an agreement ahead of the summit." Chandler said any news from the summit will not be until late in the New York afternoon, and is not likely to be much of a factor for the euro.

The dollar was a winner in Thursday's market sell off, gaining 0.8 percent against the euro in a flight-to-safety trade. The euro was at 1.3789.

Chandler said he is watching China's data and also the potential for a rate hike, following rate moves by Korea and Thailand. "The rise in market rates, like the 7-day repo rate in China, suggests it could be close to raising rates. It's been rising for two days now and some other swap rates have risen," he said. He added that rumors of this sort typically come up ahead of weekends, but it is unlikely China would raise rates while the National Party Congress is underway, and it may wait until next weekend.

US, Brent Crude End Lower as Markets Digest Saudi Unrest

Brent and U.S. crude oil futures settled lower in volatile trade Thursday, as crude markets were beset by deeper geopolitical concerns after witnesses reported that police fired upon protesters in Saudi Arabia's Eastern province.

Crude prices pulled off session lows as jittery markets reacted to yet another instance of unrest in the Arab world. However, oil prices slipped back on word that the unrest was driven by protesters in the eastern city of Qatif, home to a Shiite minority.

U.S. officials told NBC News that Saudi police intentionally dispersed protesters with "less than lethal" force.

Earlier, a witness told Reuters that police lobbed percussion bombs to disperse a crowd of about 200 people belonging to the kingdom's Shi'ite minority. 

Earlier reports also said activists have made unprecedented calls for mass protests against the kingdon's absolute monarchy on Friday. Protests are also planned in other Gulf countries such as Yemen, Kuwait and Bahrain on Friday, after the day's religious prayers. 

In London, Brent crude [LCOCV1  115.50    0.07  (+0.06%)   ] fell 51 cents to settle at $115.43 a barrel, in trading between $113.52 and $116.55.

On the New York Mercantile Exchange, U.S. light, sweet crude [CLCV1  102.78    0.08  (+0.08%)   ] for April settled down $1.68 at $102.70, after moving earlier between $100.62 to $105.06. 

Oil prices came under pressure early Thursday as the dollar strengthened on renewed Euro zone credit worries, but analysts said fears persisted that prolonged conflict in Libya could do long-lasting damage its oil infrastructure. 

Oil prices were also hit by data showing that China, the world's second largest oil importer, unexpectedly posted the largest trade deficit in seven years, stirring global economic growth worries.

Hangseng Today

Meski dibuka dengan gap-down, secara teknikal indeks Hang Seng masih bisa untuk sedikit rebound di awal perdagangan hari Jumat, terkait para investor masih banyak yang membeli saham di harga pelemahan-nya menjelang data inflasi Cina.

Namun potensi koreksi setelah mencapai level tinggi kemungkinan terjadi karena terpengaruh anjloknya bursa Wall Street semalam dan angka inflasi Cina yang telah muncul diatas ekspektasi.

Bias terlihat masih netral dalam jangka pendek, ini terukur dari sinyal yang berlawanan antara MACD dan stochastic pada grafik berikut. Dibutuhkan break ke atas 23520 untuk memicu momentum bullish lanjutan kembali menguji area 23680.

Sementara pecah ke bawah 23360 dan garis bawah channel bullish akan membawa Hang Seng kembali dalam range area 23045 – 23680.

Resistance Level : 23520, 23680, 23880

Support Level       : 23360, 23240, 23045

Trading Range       : 23045 – 23680

Hangseng test Level

Hang Seng diprediksi mengikuti penurunan saham Asia lainnya akibat pelemahan Wall Street tadi malam, sementara kekisruhan politik yang terjadi di Saudi Arabia diperkirakan akan membebani sentimen perdagangan pasar ekuiti, menurut Conita Hung, kepala riset Delta Asia Securities.

Ia memprediksi indeks akan mencoba level 23,300. "Investor juga masih akan melihat bagaimana performa pasar Cina menjelang data CPI bulan Februari yang dirilis hari ini," katanya. Melambungnya harga minyak masih akan berlanjut terkait masih berlangsungnya kekisruhan politik di Timur Tengah yang tampaknya akan menambah tekanan terhadap perusahaan pertambangan minyak dan maskapai penerbangan, katanya.

HSI ditutup turun 0.8% di 23,640 di hari Kamis.

Krisis Hutang Zona Eropa Kian Intens Jelang Peretemuan Uni Eropa

Jerman menolak desakan untuk menaikkan dana bantuan zona Eropa setelah Moody’s memangkas peringkat hutang Spanyol hari Kamis dan pasar kembali menekan Portugal pada malam menjelang pertemuan blok Eropa. Euro melemah ke level rendah mingguan, resiko premium obligasi Spanyol melebar dan credit default swap Spanyol, Yunani, dan Portugal naik seiring kecemasan baru mengenai zona Eropa yang menghantam pasar keuangan.

Pemimpim di zona Eropa diharapkan dapat mendukung rencana pelunakan oleh Jerman-Perancis untuk mendorong kompetitif ekonomi pada pertemuan di Brussels hari Jumat, namun nampaknya tidak dapat mengatasi perbedaan tajam pada jumlah dan jangkauan dana bantuan. Pejabat di Jerman melemahkan ekspektasi atas gebrakan baru, mengatakan keputusan yang diambil hari Jumat tidak akan menguatkan European Financial Stability Facility. "Pemerintah Jerman tidak percaya bahwa ini saat yang tepat untuk mediskusikan ini semua," ucap salah seorang pejabat Jerman dalam briefing menjelang rapat.

Hoard of Cash Lets Qaddafi Extend Fight Against Rebels

The Libyan leader Col. Muammar el-Qaddafi has “tens of billions” in cash secretly hidden away in Tripoli, allowing him to prolong his fight against rebel forces despite an international freeze on many of the Libyan government’s assets, according to American and other intelligence officials.

Colonel Qaddafi has control over the huge cash deposits, which have been stored at the Libyan Central Bank and other banks around the Libyan capital in recent years, the officials said.

Since the protests and fighting erupted, some of the money may have been moved into Colonel Qaddafi’s Tripoli compound, Bab Al Azizia, according to one person with ties to the Libyan government. While United States intelligence officials said they could not confirm such a move, one official said that Colonel Qaddafi “likely has tens of billions in cash that he can access inside Libya.” 

The money — in Libyan dinars, United States dollars and possibly other foreign currencies — allows Colonel Qaddafi to pay his troops, African mercenaries and political supporters in the face of a determined uprising, said the intelligence officials, speaking on the condition of anonymity. 

The huge cash reserves have, at least temporarily, diminished the impact of economic sanctions on Colonel Qaddafi and his government. The possibility that he could resist the rebellion in his country for a sustained period could place greater pressure for action on the Obama administration and European leaders, who had hoped that the Libyan leader would be forced from power quickly. 

President Obama’s national security team met at the White House on Wednesday to discuss how to oust the Libyan leader, including the possible imposition of a no-flight zone, but made no decisions, according to the White House press secretary, Jay Carney. 

The United States has relied so far on imposing financial pain on the Qaddafi government, freezing nearly $32 billion of Libya’s assets, according to Treasury Department officials. The United Nations and the European Union have imposed separate sanctions and have frozen assets as well.

But those actions have been limited to funds in the international banking system and to business investments outside of Libya. Inside the country, the intelligence officials said, Colonel Qaddafi has amassed a huge rainy day fund of cash. 

Kenneth Barden, a lawyer who specializes in Middle East financing and advises financial institutions on ways to guard against money laundering, said there were indications that Colonel Qaddafi had moved billions of dollars in assets just days or weeks before the outbreak of violence in Tripoli, apparently to protect his family wealth from global sanctions. 

“The money that is kept in Qaddafi’s name is probably small,” Mr. Barden said, “but he’s got a lot in the names of family members and close associates.”

But Colonel Qaddafi probably began hoarding liquid assets far earlier, officials said. He has built up Libya’s cash reserves in the years since the West began lifting economic sanctions on his government in 2004, following his decision to renounce unconventional weapons and cooperate with the United States in the fight against Al Qaeda. That led to a flood of Western investment in the Libyan oil and natural gas industries, and access to international oil and financial markets. 

Colonel Qaddafi, however, apparently feared that sanctions would someday be reimposed and secretly began setting aside cash in Tripoli that could not be seized by Western banks, according to the officials. He used the Libyan Central Bank, which he controls, and private banks in the city. He also directed that many government transactions, including some sales on the international oil spot market, be conducted in cash. “He learned to keep cash around,” said the person with ties to Libyan government officials, who asked to remain anonymous for fear of putting them in jeopardy.

The reserves are likely to prove even more critical to Colonel Qaddafi as the government’s revenues dwindle from oil production. 

With the unrest, Libya is pumping just 300,000 to 400,000 barrels of oil a day, down sharply from its typical production of 1.8 million barrels a day, according to Holly Pattenden, head of oil and gas analysis at the Business Monitor International in London.

Serangan gaddafi

pasukan Muammar Gaddafi meluncurkan sebuah pemboman yang intens di kota-kota minyak timur Libya Ras Lanuf, Es Sider dan Brega pada hari Kamis di garis depan serangan yang melibatkan pesawat tempur, tank dan kapal.

Serangan pada port minyak dikirim kegelisahan melalui pasar minyak karena ketakutan ini bisa menandai strategi baru dengan Gaddafi untuk menargetkan fasilitas minyak, mengganggu pasokan dari produsen OPEC dan mengirim harga minyak mentah dunia lebih tinggi.

Namun sejauh ini tidak ada tanda-tanda kampanye yang disengaja untuk mengganggu pasokan minyak lebih luas atau menghancurkan infrastruktur minyak.

Athough Ras Lanuf dan Brega telah menyerang sejauh fasilitas sendiri telah diselamatkan. Es Sider telah terpukul.

Bom atau misil mendarat beberapa kilometer (mil) dari kilang minyak Ras Lanuf dan dekat dengan bangunan gedung Emirates Kilang Minyak Libya Perusahaan dekat garis depan di timur di mana pemberontak dan pasukan pemerintah sedang berperang.

"Satu bom mendarat di sebuah rumah sipil di Ras Lanuf," pemberontak tempur Izeddine Sheikhy kepada Reuters. Ia mengatakan pemboman itu tampaknya telah datang dari arah laut.

"Saya melihat kapal kemarin dan hari ini. Rudal sedang dipecat dari mereka," kata pemberontak tempur Mohd Fadl.

koresponden Reuters juga melihat serangan udara dari pesawat di atas Ras Lanuf, sekitar 590 km (370 mil) timur Tripoli.

Saksi mata mengatakan itu menghantam pos pemeriksaan dekat kota timur. Tidak ada laporan segera tentang korban.

Memperluas serangan lebih ke wilayah yang dikuasai pemberontak di bagian timur Libya, Gaddafi pesawat tempur membom kota minyak Brega pada hari Kamis, pemberontak dilaporkan.

Brega belum ditargetkan untuk beberapa hari. Kota ini sekitar 90 km (56 mil) timur Ras Lanuf. "Ada saja serangan udara pada Brega-dua jet, dua bom," kata pemberontak tempur Mohamed Othman, berbicara melalui telepon.

Hassan Bulifa, anggota dewan Libya timur's Arab Gulf Oil Co (Agoco), sebuah unit negara perusahaan minyak National Oil Corp, mengatakan kepada Reuters Agoco adalah mengatur minyak pasar langsung kepada pembeli asing bukan melalui induknya milik negara.

Garis depan telah pindah ke bolak-balik antara Ras Lanuf dan kota strategis Bin Jawad, sekitar 60 km (38 mil) barat.

"Saya melihat roket-roket yang berasal dari perahu di dekat pelabuhan Es Sider," kata pejuang Adel Yahya, menambahkan: "Ada revolusioner di Es Sider dan dekat dengan Bin Jawad Gaddafi pasukan juga di pinggiran Bin Jawad, tapi di sisi barat.. "

Pemberontak, yang telah sangat-sangat luas wilayah di timur dan yang menjadi lebih terorganisir, telah berhenti dari mengambil jalan menuju pantai barat target berharga, Sirte, Gaddafi kampung, oleh tank dan pesawat tempur.

Di push dari kota Benghazi kedua Libya, di mana pemberontakan dimulai dan di mana para pemberontak kini memiliki markas mereka, tentara pemberontak dari pembelot dan relawan muda ditangkap kota minyak dari Brega dan Ras Lanuf.

Pada instalasi Lanuf Ras, insinyur terbakar off gas beracun dalam kasus hit langsung, kata pemberontak, menambahkan ada beberapa dekat-misses pada hari Kamis. Gerbang yang dijaga oleh penjaga dan tumpukan asap mengepul menunjukkan itu berfungsi.

Pekerja di kilang lainnya menyatakan keprihatinan tentang bom yang dijatuhkan di fasilitas dan berapa banyak kerusakan dapat disebabkan ke daerah sekitarnya.

Evakuasi Heatrow Jatuhkan Sterling

Sterling makin terpuruk setelah televisi Sky News laporkan salah satu terminal di bandara Heatrow sedang dievakuasi. Belum dapat dipastikan penyebab evakuasi, namun berita ini makin perburuk sentimen setelah BoE kembali tahan suku bunga di level rendah 0,5%. Sebagian kecil pelaku pasar sempat ekspektasikan kenaikan suku bunga BOE pada pertemuan Maret demi redam tekanan inflasi. Namun, mereka sepertinya kecewa dengan kebijakan BoE yang tidak mengubah kebijakan moneternya.

Pound Anjlok Pasca Keputusan BoE

Pound tergelincir lebih dari 30 pips terhadap Dollar AS dan melemah terhadap mata uang utama lainnya pasca pengumuman keputusan suku bunga BoE yang tidak berubah, serta mempertahankan program pembelian aset senilai 200 milyar Pound.

GBP/USD anjlok dari area 1.6175 hingga ke 1.6142, sedangkan GBP/JPY beringsut dari posisi tinggi harian di 134.34 ke kisaran 133.95, dan EUR/GBP berhasil pulih dari level rendah harian di 0.8535 untuk beranjak naik lebih tinggi ke area 0.8565.

 

Bank of England memutuskan untuk tetap mempertahankan suku bunga acuan pada tingkat 0,5% untuk 25 bulan berturut-turut, serta mempertahankan program pelonggaran kuantitatifnya tidak berubah pada 200 milyar Pound.

BoE Tahan Bunga 0,5%

BoE kembali menahan suku bunga di level rendah 0,5% dan tidak merubah program pembelian obligasi 200 miliar pounds. Sterling turun 20 pips seiring investor lakukan aksi ambil untung.

Downgrade Spanyol Resahkan Pasar Eropa

Pasar Eropa menjalani sesi perdagangan hari Kamis dengan mencatat penurunan yang cukup signifikan pasca Moody's memangkas rating kredit Spanyol, yang mengangkat masalah krisis hutang kawasan kembali menjadi sorotan.

Indeks Eurostoxx 50 anjlok 1,05%, sementara Indeks DAX Jerman dan CAC Perancis masing-masing kehilangan 0,72% dan 0,8%. Di Inggris, Indeks FTSE bergerak 0,78% lebih rendah setelah 2 jam perdagangan dimulai.

Moody's memangkas peringkat hutang Spanyol sebanyak satu tingkat menjadi ‘AA2’ dari ‘Aa1’ sebelumnya dengan outlook "negatif". Perekonomian negara itu tengah dilanda kekhawatiran terhadap kemampuan pemerintah dalam merestrukturisasi sektor keuangan.

Ancaman bailout Portugal

Portugal berhasil lelang obligasi senilai €1 M bertenor dua tahun, tetapi biaya pinjaman makin mahal sehingga tegaskan kecemasan Lisbon akan segera ajukan bailout. Yield obligasi mencapai 5.993%, lebih tinggi dari lelang sebelumnya 4.086%; rasio bid-to-cover juga turun menjadi 1.6. "Dengan yield yang tinggi sekarang maka ekspektasi Portugal ajukan bailout akan terjaga," ungkap strategis Rabobank Richard McGuire. Yield obligasi pemerintah Portugal bertenor 10 tahun juga cetak rekor 7,78%.

Investor masih jauhi obligasi pemerintah Portugal karena cemas Lisbon akan ikuti jejak Yunani dan Irlandia ajukan bailout. Meskipun demikian, pemerintah Portugal masih yakin tidak butuh dana talangan dan sanggup membayar biaya pinjaman tinggi untuk sementara waktu. "Kurva imbal hasil Portugal praktis datar dan di tingkat tinggi; ini tunjukkan investor masih coba tentukan premi yang layak, tapi investor masih belum bisa lakukan," papar Filipe Silva, manajer Banco Carregosa. "Kondisi serupa juga terjadi di Yunani dan di Irlandia sebelum kedua negara tersebut akhirnya ajukan bailout."

Arab Saudi Pertahankan Alokasi Stabil

Arab Saudi, eksportir minyak mentah terbesar dunia, akan menyediakan suplai dalam volume stabil, stabil dari level dibulan Maret, dikatakan sebuah sumber industri yang mengetahui masalah tersebut hari Kamis.

“Kapasitas alokasi adalah hal yang kami minta saat ini”, dikatakan salah satu sumber tersebut. “Tidak ada perubahan dalam kapasitas alokasi untuk setiap grade dari bulan lalu”.

 

Pergerakan harga secara umum sesuai perkiraan seiring Arab Saudi dan OPEC mengatakan di akhir Februari bahwa kedua belah pihak tersebut akan menyediakan suplai karena adanya gangguan persediaan yang disebabkan ketegangan politik di Libya.

China market

Cina melaporkan defisit perdagangan yang tak terduga sebesar $7.3 miliar, penurunan terbesar dalam 7 tahun, sebuah hambatan untuk pemerintah Cina terhadap argumen AS untuk penguatan Yuan.

Ekspor dibulan Februari naik 2.4% dari tahun sebelumnya, paling tidak sejak 2009 bersama hari libur Imlek yang menghambat pengapalan, dan impor yang naik 19.4%, dilaporkan biro data Bea Cukai hari ini.

Penasehat bank sentral, Li Daokui mengatakan bahwa suplus perdagangan selama 1 tahun penuh akan menyusut dari level 2010 (tahun sebelumnya).

Next Target for Silver $39, But Stop Loss is Key

Which is better – gold or silver? Often consigned as an industrial metal with limited value, silver has outshined gold in the past 18 months. Between July 2010 and January 2011 the COMEX silver futures price rose by 72 percent from $18.00 to $31.00. Silver outperformed gold by more than three times and it continues to do so.

 

Chart analysis shows a significant change in the trend and provides a method to set the next upside target in this speculative bubble.

The silver market was dominated by a strong historical resistance level near $19.00. This capped the trend rise starting in October 2008. Silver first encountered this resistance level in December 2009 and then tested the level several times in 2010 before developing a breakout in July 2010. 

The rise from $19.00 to $31.00 was a smooth continuous trend that carried the price into blue sky territory. The uptrend line defining this trend is used to track the continuation of this trend following the retreat and rebound behavior in January. Blue sky describes the situation where the price is making new all time highs. Investors cannot use historical price activity to establish support and resistance levels, or new profit targets.

The retreat from the peak found support near $27.00. This was also a small consolidation area in the trend in November 2010. The current price rebound from $27.00 has resistance near $31.00, based on the previous peak high. This price activity developed a consolidation band and this chart pattern provides a method for projecting future price targets.

The width of the consolidation band is measured, and this value is projected upwards. This gave us a potential target near $35.00. That rise of 16 percent has already been achieved. The acceleration of this breakout activity and the better rate of return is attracting investors who want better returns. This leverage impact is increased by trading in silver mines and silver producers. 

The width of the consolidation band is projected upwards again to give a new upside target of  $39.00. This double projection method has been successfully applied to other fast moving trends and sets valid targets. However, this double projection method also confirms a speculative bubble so traders follow these rises with tight stop loss conditions. 

The price of silver has again moved above the uptrend line and this is now used as a support level for the rising trend. A close below the uptrend line is particularly bearish because it is associated with the collapse of speculative momentum. 

Historically the demand for silver has been driven largely by the growth of the photography industry and this has collapsed with the rise of digital photography. This destruction of silver demand has not acted a brake on the recent uptrend developments. This disconnection between any obvious changes in physical demand for silver and the silver price also points the way to a speculative bubble. This suggests that silver is a useful trading instrument because bubbles inevitably collapse. For now though, silver will continue to outshine gold in the current market.