US STOCKS-Wall St climbs with Fannie and oil; Disney up late

Reuters: [2008-05-06 23:53:00]

(Updates close with volume and advance/decline figures)

By Ellis Mnyandu

NEW YORK, May 6 (Reuters) - U.S. stocks rose on Tuesday as Fannie Mae's <FNM.N> reassuring comments about the credit and housing markets buoyed financial shares, while record crude oil prices lifted shares of energy companies.

Speculation that Microsoft Corp <MSFT.O> could resume takeover talks with Yahoo Inc <YHOO.O> fed a rebound in technology shares. Yahoo gained 5.5 percent, while Microsoft rose 2.1 percent, leading the S&P 500's advance.

After an early retreat, the session turned positive when top executives of Fannie Mae, the largest U.S. home finance company, said the worst of the credit market turmoil erupting from the real estate slowdown may have passed. That mitigated earlier concern about its huge quarterly loss, and propelled a broad rally in financial stocks.

Fannie Mae climbed almost 9 percent, and smaller rival Freddie Mac <FRE.N> gained 7.1 percent.

Oil struck above $122 a barrel for the first time, carrying energy shares higher with it and outweighing a retreat in sectors sensitive to high fuel costs, such as airlines and retailers.

"When I came to work today, we thought Fannie Mae's stock will be trading south of $25, but somehow the investing public got news that they had a pretty positive conference call," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore, Maryland.

"There's a lot of people that are eyeing the financials right now, so if you're going to play the financials, Fannie Mae and Freddie Mac have to be among them."

The Dow Jones industrial average <.DJI> finished up 51.29 points, or 0.40 percent, at 13,020.83. The Standard & Poor's 500 Index <.SPX> ended up 10.77 points, or 0.77 percent, at 1,418.26. The Nasdaq Composite Index <.IXIC> closed up 19.19 points, or 0.78 percent, at 2,483.31.

Immediately after the closing bell, there was more encouraging news that could help stocks extend their advance. Walt Disney Co <DIS.N> posted a stronger-than-expected quarterly profit, sending its shares up more than 3 percent in after-hours trade from their close at $33.73 on the New York Stock Exchange.

Disney, one of the world's largest media companies and owner of the ABC television network, ESPN all-sports cable TV network and Disney theme parks in Florida and southern California, is seen as a bellwether of consumer spending.

Cisco Systems Inc's <CSCO.O> shares jumped more than 2 percent after the bell from their Nasdaq close of $26.33 as the network equipment maker also posted a profit that topped estimates.

In the regular session, Fannie Mae shares finished at $30.81, while Freddie Mac shares closed at $27.33. Other financial standouts were insurer American International Group Inc <AIG.N>, which rose 2.1 percent to $48.40, and JPMorgan Chase & Co <JPM.N>, the No. 3 U.S. bank, whose stock added 0.4 percent to $48.20.

The optimism from Fannie Mae's comments also contributed to a rise in the shares of home builders, with the Dow Jones home construction index <.DJUSHB> up 2 percent for the day.

Shares of D.R. Horton Inc <DHI.N>, the largest U.S. home builder, jumped 5.5 percent to $16.85 even as the company posted a quarterly loss of $1.3 billion and halved its dividend. For details, see [ID:nN06454667]

Energy shares rose after U.S. crude oil hit a record above $122 a barrel. A stronger-than-expected profit from independent oil and gas company Anadarko Petroleum Corp <APC.N> also buoyed the energy sector.

Exxon Mobil shares rose 0.6 percent to $90.07, while ConocoPhillips <COP.N> climbed 1.8 percent to $88.74 and Chevron Corp's <CVX.N> shares gained 1.3 percent to $96.87, while Anadarko shares climbed 9.4 percent to $74.53.

Shares of oil services company Schlumberger Ltd <SLB.N> jumped 2 percent to $103.58. The oil index <.OIX> shot up 3.3 percent.

Investment bank Goldman Sachs <GS.N> said in a research note that the price of oil could shoot up to $200 a barrel within the next two years as part of a "super-spike" driven by poor growth in oil supplies.

"Energy prices are going to stay high until -- a) we get some production on line, which there's none that I know of -- or b) until we have a serious recession," said Sasha Kostadinov, portfolio manager at Shaker Investments in Cleveland, Ohio.

Microsoft Corp <MSFT.O> and Yahoo Inc <YHOO.O> were both among the Nasdaq's top five advancers as speculation continued that pressure from Yahoo's shareholders would revive takeover talks. Shares of Microsoft, which abandoned its bid for Yahoo at the weekend, ended at $29.70, while Yahoo closed at $25.72.

But higher energy costs threatened to crimp consumer spending. Wal-Mart Stores Inc <WMT.N>, the world's biggest retailer, was the top drag on the Dow. Wal-Mart's stock fell1.1 percent to $56.35.

On the New York Mercantile Exchange, June crude <CLM8> settled at $121.84 a barrel, up $1.87, or a gain of 1.56 percent for the session. Earlier, NYMEX June crude climbed as high as a record $122.73 a barrel, which eclipsed Monday's intraday record of $120.36.

Compared with a year ago, U.S. crude oil futures prices are up $59.91 a barrel -- or almost 97 percent.

Volume on the New York Stock Exchange was modest, with about 1.23 billion shares changing hands, below last year's estimated daily average of 1.90 billion. On the Nasdaq, about 2.21 billion shares traded, above last year's daily average of 2.17 billion.

Advancers outnumbered decliners on the NYSE by a ratio of almost 2 to 1, while on the Nasdaq, about three stocks rose for every two that fell. (Editing by Jan Paschal) ((Ellis.Mnyandu@thomsonreuters.com; +1 646 223 6085; Reuters Messaging:ellis.mnyandu.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com)) Keywords: MARKETS STOCKS

UPDATE 4-High-flying crude gives boost to Toronto stocks

Reuters: [2008-05-06 23:10:00]

(Adds details, quotes)

By Leah Schnurr

TORONTO, May 6 (Reuters) - Oil and gas companies led the way higher for the Toronto Stock Exchange on Tuesday, helping the main index climb nearly 1 percent as crude oil prices notched another record high.

Suncor Energy <SU.TO> was among the biggest gainers, up C$4.62, or 4 percent, at C$121.12 as the price of oil flew up over $122 a barrel on a weaker U.S. dollar and concerns over supply.

The Toronto market's heavily weighted energy sector jumped 3.3 percent. Canadian Natural Resources <CNQ.TO> was up C$4.05, or 4.6 percent, at C$92.00, and Canadian Oil Sands Trust <COS_u.TO> added C$3.68, or 8.3 percent, to C$48.18.

Crude settled up $1.87 at $121.84 a barrel, easing back from a record $122.73 reached earlier in the day. However, Goldman Sachs forecast oil could hit $200 a barrel within the next two years.

"How high can it go? Who knows," said Andrew Martyn, portfolio manager at Davis-Rea.

The S&P/TSX composite index <.GSPTSE> closed up 139.96 points, or 0.98 percent, at 14,414.30 with half its 10 main sectors higher.

The materials sector, home to resource issues, rallied 1.2 percent, while the base metals mining subindex gained 2.4 percent, pulled up by oil's momentum. Teck Cominco <TCKb.TO> rose C$1.48, or 3.2 percent, to C$48.18.

"The mining sector, the gold sector also got boosted, meaning that the whole commodities game seems to be back for who knows how long," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"We keep saying it's a fad, but (the oil price) comes down and starts to move back up," said Nakamoto, noting that ultimately it's underlying supply and demand that will make a price level sustainable.

Methanex <MX.TO> shares jumped C$3.02, or 12.4 percent, to C$27.40 after the methanol supplier upped its quarterly dividend by 11 percent and said it will buy back up to 10 percent of its common stock.

Fertilizer company Potash Corp of Saskatchewan <POT.TO> was up C$3.03, or 1.5 percent, at C$199.39, and competitor Agrium <AGU.TO> rose C$2.52, or 3 percent, to C$86.75.

Sun Life Financial <SLF.TO> weighed on the index after the insurer warned of a difficult year ahead as it reported that credit market troubles and a strong Canadian dollar stung its operating earnings.

Sun Life finished down C$1.76, or 3.6 percent, at C$47.44, while the financial sector overall gave up 0.5 percent.

Also on the downside, BlackBerry maker Research In Motion <RIM.TO> slid C$2.37, or 1.8 percent, to C$132.25.

Market volume was 393 million shares worth C$7.6 billion. Advancers outpaced decliners 890 to 693. The blue chip S&P/TSX 60 index <.TSE60> closed up 8.71 points, or 1.03 percent, at 855.12.

On Wall Street, stocks rallied after U.S. home finance company Fannie Mae <FNM.N> sought to reassure investors over the outlook for the credit and housing markets.

The Dow Jones industrial average <.DJI> rose 51.29 points, or 0.4 percent, to 13,020.83, while the Nasdaq composite index <.IXIC> was up 19.19 points, or 0.78 percent, at 2,483.31. ($1=$1.00 Canadian) (Editing by Rob Wilson) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

Keywords: MARKETS CANADA STOCKS

Chile stocks slip on weak growth data, oil; peso firms

Reuters: [2008-05-06 23:08:00]

(Adds quote, details, closing stock figures)

SANTIAGO, May 6 (Reuters) - Chilean stocks closed lower for a second day on Tuesday, after oil prices hit record highs and following weak local growth data.

Chile's peso gained as the dollar retreated from a two-month high.

On the stock exchange, the all-market IGPA index <.IGPA> retreated 0.60 percent to 13,883.35 points, while the blue-chip IPSA index <.IPSA> fell 0.73 percent to 2,957.49 points.

"Domestic growth data was weak and foreign investors have been getting rid of retail," said Marcelo Ogaz. "And with oil at historic highs airlines worldwide are falling."

March economic growth reported on Monday fell to 0.7 percent year on year, well below expectations, while oil prices touched new all-time highs on Tuesday.

Transport company losses included LAN Airlines <LAN.SN> down 2.35 percent, and shipper Vapores <VAP.SN> closing 2.5 percent lower.

Drinks bottler Andina <AND_pb.SN>, down 2.54 percent, and department store chain Ripley <RIP.SN> falling 1.65 percent led declines among consumer stocks.

Paper and wood pulp producer CMPC <CAR.SN> saw its shares retreat 2.04 percent.

Of Chile's 40 blue-chip stocks, 30 ended lower.

The Chilean peso <CHILJ> <CLP=CL> closed 0.43 percent higher at 466.50/467.00 per dollar compared with Monday's close at 468.50/469.00.

"The peso's rise is a correction due to profit-taking after the dollar's recent gains," a broker said. "The market seems confused about what the dollar's equilibrium price should be, which makes the exchange rate volatile."

Chile's central bank bought $50 million worth of dollars on Tuesday, a continuation of the daily purchases begun on April 14 as part of an $8 billion currency intervention program.

The peso, which had appreciated by about 15 percent against the dollar since the beginning of the year, has seen its gain fall to about 6.7 percent. (Reporting by Lisa Yulkowski and Froilan Romero; Editing by Diane Craft) ((lisa.yulkowski@reuters.com; +56-2-370-4250)) Keywords: MARKETS CHILE/

Argentine stocks rise on oil prices; bonds fall

Reuters: [2008-05-06 23:06:00]

BUENOS AIRES, May 6 (Reuters) - Argentine stocks rose on Tuesday as record crude oil prices lifted energy-related shares, while the peso and bonds finished weaker.

The MerVal index <.MERV> of leading stocks ended up 1.02 percent at 2,127.09 points. Volume on the broad market was a healthy $49.7 million and of active issues, 76 advanced, 22 declined and 17 were unchanged.

U.S. crude oil futures ended above $121 a barrel amid supply concerns and a report by investment bank Goldman Sachs predicting oil could rise to $150 to $200 a barrel.

"The record price helped Petrobras and Tenaris," said Marcelo Paccione, an analyst at ConsultCapital.

The MerVal also got a boost from stronger-than-expected first-quarter earnings from steelmaker Siderar <SID.BA>, he said.

On Monday, Siderar reported its net profit in the first three months of the year rose by 87.5 percent to 566.1 million pesos due in part to higher sales. Siderar shares closed 0.75 percent higher at 26.1 pesos.

Shares in index heavyweight and steelmaker Tenaris <TENA.BA> -- the world's leading producer of seamless steel tubes for the energy industry -- rose 0.77 percent to 88.7 pesos due to optimism about its first-quarter earnings, due later on Tuesday.

The local listing of Brazilian state-run energy Petrobras <APBR.BA> gained 2.8 percent to close at 104.5 pesos.

Argentina's locally traded bonds <AR/BONOS> slipped 0.7 percent on average on Tuesday in light trade marked by investor caution over the outcome of a meeting between farmers and the governemnt aimed at averting a repeat of March's farm strike.

Peso-denominated debt was the hardest hit on Tuesday, with the Par bond plunging 2.9 percent in over-the-counter trade.

Tension over the farm talks also triggered dollar purchases, sending the peso lower.

In formal interbank trade, the peso fell 0.08 percent to 3.1750/3.1775 per dollar <ARS=RASL>. In informal trade between foreign exchange houses, as measured by Reuters, it weakened by 0.24 percent to 3.23/3.2325 per dollar <ARSB=.

About 40 percent of currency trade takes place informally between foreign exchange houses. (Reporting by Jorge Otaola and Walter Bianchi; Writing by Helen Popper; Editing by Leslie Adler) ((helen.popper@thomsonreuters.com; +54-11-4318-0655; Reuters Messaging: helen.popper.reuters.com@reuters.net)) Keywords: MARKETS ARGENTINA/

Mexico peso hurt by credit jitters; stocks gain

Reuters: [2008-05-06 23:04:00]

(Adds quotes, closing prices, details)

MEXICO CITY, May 6 (Reuters) - Mexico's peso weakened on Tuesday amid renewed Wall Street credit jitters, while local stocks gained, led by telecommunications bellwether America Movil.

The peso <MXN=> <MEX01> weakened nearly 0.20 percent at the official central bank close to 10.4995 per dollar while the benchmark IPC stock index <.MXX> gained 0.85 percent to 31,223.42 points.

Fannie Mae, the largest provider of U.S. home financing, reported its third straight quarterly loss and forecast further falls in home prices and continued problems in the mortgage market.

But reassuring comments from Fannie Mae executives about the company's stability helped stocks in New York recover from early losses.

But peso traders in Mexico said the news stirred fears that the worst may not be over for the credit crisis, curbing investor appetite for riskier emerging market assets and serving as a pretext to take profits after the peso's recent gains.

"There is still a worry that the subprime (mortgage) issue is still present and keeps causing damage to the financial sector," said Alejandro Martinez, a fixed-income and currency strategist at HSBC in Mexico City.

Traders also said investors were ruling out the possibility of further interest rate cuts in the United States.

Mexico's peso has gained around 4 percent since the beginning of the year as the spread between the U.S. target interest rate and Mexico's key rate widened to 5.5 percent.

"If you don't have the expectation that the spread could widen further, you don't have that additional attraction," Martinez said.

The U.S. Federal Reserve cut its target rate last week for the seventh time since September in a bid to prop up the stumbling economy, but it signaled that its may pause with its rate cutting cycle.

Also last week, Mexico's central bank revised upward its inflation outlook, which analysts have interpreted as meaning the bank will keep interest rates on hold for some time.

In debt trading, the government's benchmark 10-year peso bond <MX10YT=RR> rose 0.067 of a point in price to 98.914, pushing its yield down 1 basis points to 7.91 percent.

In stock trading, shares of America Movil <AMXL.MX>, Latin America's biggest cell phone operator and the heaviest weighted stock on the IPC, gained 0.72 percent to 30.89 pesos. Its New York-traded shares <AMX.N> edged up 0.44 percent to $58.87.

"The stock was unfairly punished after its first-quarter earnings report, and people are realizing it is cheap," said Gerardo Roman, head of equity trading at Actinver brokerage in Mexico City.

HSBC on Tuesday cut the price target for America Movil's New York shares to $82 from $91, but kept its rating unchanged at "overweight."

Top retailer Walmex <WALMEXV.MX> added 1.56 percent to 44.22 pesos.

Shares of Cemex <CMXCPO.MX> gained 1.79 percent to 30.73 pesos while its New York traded stock <CX.N> added 4.34 percent to $29.10. (Reporting by Michael O'Boyle; editing by Gary Crosse) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/