US STOCKS-Oil's fall, techs' gain drive stocks higher

Reuters: [2008-05-15 23:48:00]

(Updates close with Intel gains, oil shares' rise and CBS deal)

*Oil pullback eases inflation worries

*Microsoft shares jump as Icahn seeks Yahoo control

*Intel gains after price target increase

By Caroline Valetkevitch

NEW YORK, May 15 (Reuters) - U.S. stocks rose in light trading on Thursday, pushing the S&P 500 to its highest close since January, as a pullback in oil prices eased concerns about inflation and a battle to control Yahoo Inc <YHOO.O> helped the tech sector.

The Nasdaq also had its best close since Jan. 3. Shares of chip maker Intel Corp <INTC.O> jumped 4.7 percent after Lehman Brothers raised its price target on the stock, citing strength in notebooks and servers.

Crude oil futures fell to below $122 a barrel during the session, but shares of energy companies gained as investment bank UBS sharply raised its projection for oil prices. Shares of Exxon Mobil Corp <XOM.N> advanced 1.6 percent to $91.30.

News late in the session that key members of the U.S. Senate reached a deal on a housing rescue plan raised hopes for the beleaguered home market.

Financier Carl Icahn started a proxy battle to get control of Yahoo and force it to strike a deal with Microsoft Corp <MSFT.O>. Other deal news included CBS Corp's <CBS.N> plan to buy CNET Networks <CNET.O>.

"Tech is doing great ... That's very encouraging and the Nasdaq chart is the strongest one out there right now," said Joe Saluzzi, co-manager of trading at Themis Trading, in Chatham, New Jersey.

The Dow Jones industrial average <.DJI> shot up 94.28 points, or 0.73 percent, to end at 12,992.66. The Standard & Poor's 500 Index <.SPX> rose 14.91 points, or 1.06 percent, to 1,423.57. The Nasdaq Composite Index <.IXIC> climbed 37.03 points, or 1.48 percent, to close at 2,533.73.

Trading volume continued to be very light on the New York Stock Exchange, with about 1.20 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion. On Monday, NYSE volume hit its low for the year at 1.05 billion.

SOXX UP, CNET SOARS

Intel was up $1.13 at $24.97, while the Philadelphia Stock Exchange index of semiconductors <.SOXX> rose 2.1 percent.

June crude <CLM8> dipped 10 cents to settle at $124.12. Traders said a surprisingly large increase in U.S. natural gas inventories contributed to crude's fall. Earlier this week, U.S. crude hit an intraday record at $126.98 a barrel.

"Oil sold off, which was nice, even though it's still very high. That's part of what happened," said Todd Leone. head of listed trading at Cowen & Co. in New York.

In the sweeping housing rescue plan, the two largest U.S. housing finance companies, Fannie Mae <FNM.N> and Freddie Mac <FRE.N>, would backstop a government mortgage insurance fund, two industry sources told Reuters. Shares of home builders surged after the news. An index of home builders <.DJUSHB> rose 3.7 percent.

On the Nasdaq, Yahoo shares gained 2.3 percent to $27.75, while Microsoft rose 1.7 percent to $30.45.

When talks between Microsoft and Yahoo ended earlier this month, the software company was offering $33 a share for Yahoo, but the Internet company was holding out for $37.

Shares of CBS slid 2.4 percent to $24.23 on the NYSE, while shares of CNET surged 43.5 percent to $11.41. CNET was the Nasdaq's second-biggest percentage gainer.

JC PENNEY SHINES

Retailers benefitted after JC Penney Co Inc <JCP.N> said its earnings in the current quarter could top analysts' forecasts. The outlook drove JC Penney's battered stock up 4.7 percent to $46.32 even though it posted a 50 percent profit drop in the first quarter. For details, see [ID:nN15204424]

Data painted a mostly weak picture of the U.S. economy. A report showed softer-than-expected U.S. industrial output for April and a manufacturing report from the New York Federal Reserve Bank was also weak. Meanwhile, initial jobless claims rose slightly more than expected in the latest week.

Volume on Nasdaq was stronger than on the NYSE. About 2.22 billion shares traded, above last year's daily average of 2.17 billion.

Advancing stocks outnumbered declining ones by a ratio of about 7 to 3 on the NYSE and by 8 to 5 on Nasdaq. (Additional reporting by Jennifer Coogan, editing by Jan Paschal) ((caroline.valetkevitch@thomsonreuters.com; +1 646 223 6393; Reuters Messaging:caroline.valetkevitch.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 3-Toronto stocks yanked higher by robust resources

Reuters: [2008-05-15 23:35:00]

(Adds details, quotes)

*Index closes at record high

*Resource and financial sectors rally

By Leah Schnurr

TORONTO, May 15 (Reuters) - The Toronto Stock Exchange's main index popped up more than 1 percent on Thursday, propelled further into record high territory by strong resource and financial shares.

Inmet Mining <IMN.TO> was the biggest net gainer on the day, rising C$6.25, or 9.3 percent, to C$73.75. Fertilizer company Potash Corp of Saskatchewan <POT.TO> was also among the leaders, finishing up C$5.28, or 2.7 percent, at C$204.50.

Gold producers also jumped, benefiting from rising gold prices. Agnico-Eagle Mines <AEM.TO> was up C$3.38, or 5.3 percent, at C$67.29, while the gold subindex gained 3.6 percent.

The S&P/TSX composite index <.GSPTSE> closed up 201.75 points, or 1.38 percent, at 14,828.06 with all but one of its 10 main sectors moving higher.

The surge helped the benchmark climb further into record territory, continuing the week's trend after it broke last summer's record high on Monday.

The financials sector, the biggest group on the index by weight, rose 1.6 percent, with Toronto-Dominion Bank <TD.TO> rising 94 Canadian cents, or 1.4 percent, to C$68.51, and Canadian Imperial Bank of Commerce <CM.TO> up 83 Canadian cents, or 1.1 percent, at C$74.84.

Adrian Mastracci, portfolio manager and president at KCM Wealth Management Inc., in Vancouver, said that banks were helped by easing trepidation over what problems may be still lurking in the financial sector.

"I think as investors look at more news being disseminated, as some of the financials have reported the potential losses that they're going to take, I guess they feel that we know more of the situation," Mastracci said.

"The more they know, they more they feel better about the prospects going forward, and I think there's some of that in there today."

On the downside, FirstService Corp <FSV.TO> tumbled C$2.77, or 12.2 percent, to C$19.96 after the property services firm swung to a fourth-quarter loss as it was stung by unfavorable market conditions.

The telecoms sector was the only group in negative territory, giving up 0.2 percent.

Shares of Lundin Mining <LUN.TO> added 68 Canadian cents, or 8.8 percent, to C$8.38 after it reported first-quarter profit rose, helped by rising copper and lead prices, as acquisitions increased production.

The Toronto benchmark has climbed more than 20 percent from the lows seen in January, when it dipped below the 12,000 mark amid worries over the health of the U.S. economy and troubles in the financial and credit markets.

Since then it has been spurred higher by red-hot commodities prices, and recent optimism that the worst of the credit problems have been seen. Analysts have also noted that the current round of corporate results generally have been better than had been feared.

"We're getting to the end of earnings season and we got through this without any terribly nasty surprises," said Rick Hutcheon, president and chief operating officer at RKH Investments.

"I think that the mood of investors is probably starting to gain a little traction, and that we're starting to feel a little more optimistic that perhaps the worst of the credit issues are beginning to recede."

Market volume was 441 million shares worth C$8.1 billion. Advancers outpaced decliners 985 to 655. The blue chip S&P/TSX 60 index <.TSE60> closed up 13.14 points, or 1.51 percent, at 884.73.

In New York, stocks were up as a pullback in oil prices calmed worries about inflation. The Dow Jones industrial average <.DJI> closed up 94.28 points, or 0.73 percent, at 12,992.66, and the Nasdaq Composite Index <.IXIC> rose 37.03 points, or 1.48 percent, to 2,533.73. ($1=$1.00 Canadian) (Editing by Peter Galloway) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

Mexico bonds gain as price worries ebb; stocks up

Reuters: [2008-05-15 23:21:00]

(Recasts, adds details and closing prices)

* Bond prices gain as inflation fears recede

* Tortilla price hike may be tamer than feared

MEXICO CITY, May 15 (Reuters) - Mexican bond prices rose on Thursday, mostly recovering from recent losses as investors worried less about the impact on inflation from a forecast that corn tortilla prices would rise, while stocks rose.

The government's benchmark 10-year peso bond <MX10YT=RR> rose 0.395 of a point in price to bid 98.058, pushing its yield down 6 basis points to 8.04 percent.

The benchmark IPC stock index <.MXX> gained 0.66 percent to 31,542.97 points, while the peso <MXN=> <MEX01> firmed 0.11 percent at the official central bank close to 10.476 per dollar.

Bond investors fear accelerating inflation could push the central bank to raise interest rates this year.

Worries were further stoked after producers of corn flour tortillas on Wednesday said they will soon raise prices for the Mexican staple.

Some media reports said tortilla prices, eaten for almost every Mexican meal, could rise by as much as 40 percent citing a small tortilla-maker group.

The news spooked bond investors, who dumped long-term bonds on Wednesday, pushing the yield on the 10-year bond up 7 basis points. But yields edged down on Thursday as investors questioned how big the increase could be and when it could hit.

"There has been a knee-jerk reaction to these tortilla prices," said Siobhan Morden a local market strategist at ABN AMRO in New York.

Morden added that it seemed likely that the government would be able to structure a new pact with producers to keep tortilla prices down, as it did in early 2007 and renewed several times in the last year.

But many investors were remaining cautious ahead of the central bank's monthly policy review, set for Friday at 9 a.m. (1400 GMT).

While analysts unanimously ruled out any change on Friday in the bank's overnight rate from levels of 7.50 percent, according to a Reuters poll, many are expecting the bank to introduce a tightening bias in tomorrow's statement.

In currency trading, traders said investors were exercising caution ahead of the central bank's monthly review on Friday. IXE brokerage said in a note that the peso could strengthen to around 10.43 per dollar, should the central bank introduce a more hawkish tone to its statement.

In stock trading, shares of miner Grupo Mexico <GMEXICOB.MX>, one of the world's largest copper producers, gained 3.13 percent to 79.20 pesos as copper prices rose nearly 2 percent in New York.

Shares of Cemex <CMXCPO.MX>, the top supplier of cement in the United States, gained 1.64 percent to 30.96 pesos. Its New York traded shares added 2.32 percent to $29.57.

Among losing stocks, America Movil <AMXL.MX>, Latin America's biggest cell phone operator, shed 1.14 percent to 30.41 pesos while its New York traded shares lost 0.43 percent to $58.25. (Reporting by Michael O'Boyle) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/

*TOP NEWS* Canada

Reuters: [2008-05-15 23:14:00]

For news and data, double-click on the codes in brackets. 
Access to some items may depend on subscription level. 
.................................................................. 
TOP STORIES 
> CAW reaches deals with GM, Chrysler                 [nN15328011] 
> Auto slump hits Canada factory sales in March       [nN15514480] 
> Air Canada cuts back on its fuel surcharges         [nN15304833] 
> Tougher Canada action needed on polar bears-greens  [nN15370262] 
> Lundin Mining profit rises, stock climbs            [nN15276825] 
> Canadian housing starts seen easing in 2008         [nN15212621]    
> Canadian political deadlock set to drag on          [nN13424304]    
> Watchdog asks BCE to justify Web traffic shaping    [nN15308823] 
> Menu Foods post smaller loss, but sales fall        [nN15300653] 
> FirstService swings to loss in fourth quarter       [nN15200291] 
> Weeping mother urges Taser moratorium in Canada     [nN15311988] 
> Morning-after pill sold over the counter in Canada  [nN15321982] 
    
MARKETS 
> Toronto stocks pulled sharply higher by resources   [nN15334902] 
 > Canada dollar closes at parity, bonds rise        [nN15531880].................................................................. 
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Chile stocks rise as bond yields fall, peso firms

Reuters: [2008-05-15 23:10:00]

(Adds quote, details, closing stock figures)

SANTIAGO, May 15 (Reuters) - Chilean stocks closed higher on Thursday as local bond yields eased, while the peso firmed against the dollar after the central bank executed its daily purchase of greenbacks.

The all-market IGPA index <.IGPA> closed 0.20 percent higher at 13,722.60 points, while the blue-chip IPSA index <.IPSA> gained 0.31 percent to 2,918.57 points.

Global markets turned positive on Thursday after crude oil prices dropped more than $2 a barrel, while local stocks were favored by lower bond yields, which had surged nearly 100 basis points in the prior four weeks.

"Local bond yields fell, which makes stocks more attractive," said Alvaro Pereyra, head of research with the BCI brokerage. "Yesterday's news about U.S. inflation was also a help. The outlook is more benign than it was before."

Chilean inflation-adjusted five-year central bank bond yields <CLBCU5Y=RR> closed at 2.99 percent, after surging as high as 3.2 percent on Monday.

Pereyra said oil prices remained high. "It's still at $124," he said. "Oil prices going forward are still a question mark."

Of Chile's 40 blue-chip stocks, 20 closed higher, 13 fell and seven were unchanged. Transport companies got the biggest boost as the oil price rally took a breather.

Leading shipper Vapores <VAP.SN> jumped 2.59 percent to 800 pesos a share, while dominant air carrier LAN <LAN.SN> <LFL.N> rose 1.28 percent to 5,550 pesos.

Other advances included regional retailer Falabella <FAL.SN> with a gain of 0.77 percent, and industrial conglomerate and wood pulp producer Copec <COP.SN>, up 0.81 percent.

Declines by No. 1 bank Santander Chile <STG.SN>, off 1.51 percent, and leading wine exporter Concha y Toro <CHT.SN>, down 3.11 percent, helped offset blue-chip gains.

The Chilean peso <CHILJ> <CLP=CL> edged 0.24 percent higher to close at 466.90/467.20 per dollar compared with Wednesday's close at 468.00/468.30.

The central bank on Thursday continued with its daily purchase of $50 million on the currency exchange as part of an $8 billion intervention to curb the strength of the peso against the greenback. (Reporting by Lisa Yulkowski; Editing by Leslie Adler) ((lisa.yulkowski@reuters.com; +56-2-370-4290)) Keywords: CHILE MARKETS/