world summary: stocks improve ahead of fomc meetin

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    RWE News
    8:47:020 2/02/2005
    Sydney - Wednesday - Feb 2: (RWE Australian Business News) - US
    sharemarket investors pushed head overnight as financial markets waited
    expectantly for the Federal Open Market Committee to determine interest
    rates before making major commitments.
    Traders seemed optimistic that the Fed will abide by its
    original promise of a measured increase or 25 basis points when the FOMC
    announces its decision tomorrow morning our time.
    It will be the fifth rise in the Fed Fund rate since last June.
    In the meantime, there was an air of cautious confidence in the
    stockmarket on the back of some good quarterly results and corporate
    developments including American Express Co, which plans to hive off its
    financial advisory unit.
    Other good news emerged from the oil price retreat.
    March crude fell $1.08 to $47.12 barrel on the New York
    Mercantile Exchange, close to its session low of $47.10.
    Wall Street saw the Dow up 62 points and the S&P 500 up 8 while
    the Nasdaq composite added 6 and the 100 index improved 4.
    Meanwhile, the economic data did little for financial markets
    after the Institute for Supply Management reported that its factory
    manufacturing index fell to 56.4 in January from 57.3 in December.
    The redeeming feature was a a stronger employment component,
    which showed the labour market index jumped to 58.1 from 53.3.
    In addition, construction spending was higher than expected.
    US construction spending rose 1.1 per cent in December after the
    market was expecting a 0.5 per cent rise.
    The reading for the previous month was revised to 0.3 per cent.
    Analysts, though, are now predicting earnings growth in S&P 500
    companies will slow to 9.7 per cent in the year ahead, against 20 per
    cent last year.
    In other news the auto industry has had mixed fortunes in
    January after makers posted the best advances in December for three
    However, this was not sustained in January, reflected by sales
    downturns posted by Ford Motor Co, Toyota Motor Corp and Honda Motor Co.
    Ford was hardest hit, losing 12 per cent, while Nissan bucked
    the trend and rose 6.1 per cent.
    Reuters has reported the global economy looks to have booked a
    booming 5 per cent growth rate last year, the fastest in three decades
    and almost 1.5 percentage points above the average of the last 20 years.
    Treasuries were subdued, reflected by the 10-year cash barometer
    edging up a point to 4.14 per cent.
    The US dollar has been shaky, although the gold price slipped $1
    to $420.80 oz on COMEX.

    WALL STREET ... settled higher, gaining 62 points to 10,551.94
    on the Dow Jones Industrial Average. The broadly-based S&P 500 finished
    8.14 in front at 1189.41. The Nasdaq composite ended 6.29 ahead at
    2068.70 and the 100 index gained 4.03 to 1523.66. Treasuries barely
    moved after better employment numbers in the ISM. The 10-year cash paper
    fell 3/32 ticks to 100 29/32, lifting the yield a point to 4.14 per

    US DOLLAR ... is mixed against key currencies in New York. It is
    selling at 103.62 yen, up from 103.63 yesterday in NY. The euro is at
    1.3050 (prev 1.3032) and sterling at 1.8832 (prev 1.8834). The greenback
    is at 1.1904 Swiss francs (prev 1.1892).

    AUSTRALIAN DOLLAR ... is firmer against the US dollar. The
    Aussie is changing hands at US77.52c, up 22 points on last night's local
    close. High for the session was US77.51c and low was US76.88c. Crosses
    were mixed. The yen is at 80.27 (prev 80.28), 0.5937 euros (prev 0.5945)
    and 41.15 pence on sterling (prev 41.15).

    AUSTRALIAN SHAREMARKET ... will be looking to extend this week's
    strong gains today. The market climbed to record highs yesterday, led by
    resource leaders and banks, in bullish trading ahead of reporting
    season. The All Ordinaries rose 20.5 to a record close of 4127.2 after
    setting a new intraday high at 4130.2. The ASX 200 went as high as
    4130.9 and finished 20.4 in front at a record close of 4127.7. Futures
    were firmer overnight and the March SPI 200 rose 7 to 4118. The Reserve
    Bank will reveal this morning whether it decided to do anything with
    interest rates at yesterday's board meeting. Analysts say once again,
    don't hold your breath. In the sharemarket, Alumina is expected to
    release its full-year results today. Traders will be keeping an eye on
    John Fairfax, whose shares put on 13c to $4.54 yesterday, triggering
    speculation of corporate action ahead of expected changes to media laws.

    EUROPEAN SHAREMARKETS ... closed solidly higher across all
    boards on the back of a stronger Wall Street and the relative success of
    the Iraqi elections.
    In London, the blue-chips led the way, as shown by the FTSE 100
    Index, which gained 1.11 per cent compared with the more broadly-based
    FTSE 250's 0.83 per cent rise. The mining sector took off, despite
    London Metals Exchange base metals prices being mostly easier.
    Swiss-based Xstrata rose 4.16 per cent to 963.5p, Anglo American 3.81
    per cent to 12.79 pounds and BHP Billiton 3.42 per cent to 679.5p. Rio
    Tinto advanced 3.21 per cent to 17.03 pounds and Chilean copper miner
    Antofagasta 1.48 per cent to 12.38 pounds. Oil majors Shell and BP rose
    3.34 per cent to 479.0p and 2.68 per cent to 537.0p, respectively, on
    the renewed volatility in oil prices. Normally British Airways would
    have been pressured by a hike in oil but investor optimism pushed its
    shares up by 2 per cent anyway, to 271.0p.
    On the Continent, the car manufacturing sector enjoyed a better
    day. In Frankfurt BMW advanced 1.87 per cent to 32.77 euros and
    Volkswagen 1.58 per cent to 37.39 euros while DaimlerChrysler firmed 1
    per cent to 35.23 euros after receiving a stock rating upgrade from JP
    Morgan to "overweight" from "neutral." The brokerage said
    DaimlerChrysler's 2004 results should lift management's opportunity to
    restore profitability at its Mercedes arm in 2005 as earnings improve,
    new products come on line and costs are reined in. The ongoing merger
    and acquisition discussions by the two rival European stock exchanges,
    Euronext and Deutsche Boerse, and the takeover target, the London Stock
    Exchange continue. The (London) Times newspaper reported that Euronext
    has apparently agreed to keep the LSE quoted in London. Euronext is yet
    to make a firm offer, but is thought likely to offer around 580p a
    share, 50p above Deutsche Boerse's pitch. Euronext shares dropped 1.8
    per cent to 23.99 euros in Amsterdam while Deutsche Boerse eased 0.21
    per cent to 47.55 euros in Frankfurt.
    At the finish, London's FTSE 100 index shot up 53.90 to 4906.20,
    Paris's CAC 40 rose 25.49 to 3939.18 and Frankfurt's DAX gained 25.12 to
    4279.97. Amsterdam advanced 4 and Zurich 27.

    METALS ... are mixed. Spot gold fell $1 to $420.80 and the April
    contract $1.20 to $422.90 oz on COMEX. March silver shed 1.7c to $6.73
    while the active April platinum contract improved $5.10 to $878.90 oz on
    NYMEX. New York March copper fell 1.9c to 141.60c lb. Closing
    three-month London metal prices were copper $3044, tin $17950, lead
    $925, zinc 1288, aluminium $1839 and nickel $14,425 tonne.
    Three-month London Metals Exchange official bid prices were
    mixed. Copper fell $21 to $3062 tonne, lead rose $1.50 to $929.50 and
    zinc lost $16 to $1281. Tin fell $5 to $8015 while nickel gained $80 to
    $14,530 and aluminium ended $2.50 lower at $1841.50 tonne.

    OIL ... settled $1.08 lower at $47.12 barrel for March light
    crude on the New York Mercantile Exchange. Session high has been $48.10
    and low $47.10. Traders have noted the fewer terrorist attacks on oil
    installations in Iraq and Saudi Arabia. In the UK, March brent dropped
    $1.10 to $44.85 barrel on the IPE.

    The CRB index fell 0.84 to 283.91.
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