Business news with words department+economy+prices. 30 news.

WALL Street skidded yesterday after the assassination of Pakistani opposition leader Benazir Bhutto and after the Commerce Department's durable goods orders exacerbated concerns about the US economy. The major indexes each lost well over 1 percent and the Dow Jones industrial average fell 192 points. Bhutto's assassination raised the possibility of increasing political unrest abroad, always an unsettling prospect for investors who have already been contending with domestic economic concerns for months. Oil prices rose following the news, and that unwelcome inflationary trend only added to Wall Street's uneasiness. Meanwhile, the government said orders for durable goods, big-ticket items from commercial jetliners to home appliances, rose by just 0.1 percent last month. Economists had been looking for a rise of 2.2 percent. Still, November saw the first rise in durable goods orders in the last four months. The Labor Department said the number of workers seeking unemployment

OIL prices drifted higher in light holiday trading yesterday after predictions of a drop in crude inventories raised new supply concerns. With little other news to motivate buying or selling, investors focused on forecasts by analysts including Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, who predicted crude inventories fell by 1.5 million barrels last week. Tim Evans, an analyst at Citigroup Inc, predicted that crude stocks fell by 2 million to 3 million barrels. The Energy Department's Energy Information Administration reports oil inventories on Thursday this week, a day late due to Christmas. Light, sweet crude for February delivery rose 82 cents to settle at US$94.13 a barrel on the New York Mercantile Exchange after falling as low as US$92.50 earlier. Prices rose more than US$2 on Friday after the government reported consumer spending jumped more than expected in November, raising hopes that the economy will weather the crisis roiling

OIL prices jumped in light trading yesterday after the government reported that consumer spending surged last month, raising hopes that the US economy will weather the crisis roiling credit markets and that demand for oil and gasoline will strengthen. The Commerce Department said consumer spending jumped 1.1 percent in November, the biggest one-month gain since 2004 and well above analyst expectations for an 0.7 percent increase. Light, sweet crude for February delivery rose US$2.25 to settle at US$93.31 a barrel on the New York Mercantile Exchange. Oil prices were also supported by stocks, which rose yesterday, and a slightly weaker dollar. Energy investors often view stock market moves as reflective of overall economic sentiment. Also, oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling. Many observers blame oil's rise last month to near US$100 on speculators

STOCKS sold off yesterday after a jump in consumer inflation raised concerns about how much freedom the Federal Reserve has to continue cutting interest rates. The Dow Jones industrial average gave up more than 178 points. The Labor Department said the consumer price index rose 0.8 percent in November amid a spike in gasoline prices. The report also found large increases in the cost of clothing, airline tickets and prescription drugs. The report raises questions about the Fed's options for priming the economy. The Fed this week lowered interest rates and announced a plan to align with other key central banks and offer loans to pressed lenders around the world. But while it wants to stimulate the U.S. economy and make lending easier among banks wary of faltering debt, the Fed also has to keep a watchful eye on inflation. Robert Dye, senior economist at PNC Financial Services Group, said the economic readings this week painted a mixed picture for investors, spurring some of the

STOCKS finished mixed in another volatile session yesterday after a spike in wholesale prices touched off inflation concerns and partially overshadowed a strong increase in retail sales last month. Despite the uneven economic news, a strong forecast by Honeywell International Inc propped up the Dow Jones industrial average. Wall Street, which has this week paid close attention to steps by the Federal Reserve to stoke greater movement in moribund credit markets, again looked to fresh economic data for signals about the health of the economy. In one unwelcome development, prices at the wholesale level jumped 3.2 percent in November -- their biggest increase in 34 years -- after a steep rise in wholesale gasoline prices. The news wasn't all bad, however. The Commerce Department said retail sales rose in November by the largest amount in six months, and a Labor Department report showed a drop in new claims filed by those seeking jobless benefits. The modest movement on Wall

Shoppers flocked to stores last month, ignoring higher gas prices and a sluggish economy, the Commerce Department said Thursday. But wholesale...

CRUDE oil fell below US$90 a barrel on Friday in the biggest weekly loss in two and a half years on concern that slowing economic growth will cut energy demand. Saudi Oil Minister Ali al-Naimi said supplies in the market were "ample." Consumer spending in the US rose less than forecast in October and incomes increased at the slowest pace in six months, the United States' Commerce Department said in Washington. Al-Naimi, speaking in Doha, said oil prices didn't reflect actual production and consumption trends, Bloomberg News reported. "The market is simply becoming more concerned about a possible recession that could reduce petroleum demand," said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. "We have been seeing evidence for some time of a weakening economy and weakening oil demand." Crude oil for January delivery fell US$2.30, or 2.5 percent, to settle at US$88.71 a barrel at 2:45pm on the New York Mercantile

Gasoline could soon top $3.50 a gallon in California, but a large swath of the economy is affected as well. Nationwide fuel costs surged again in the last week, the Energy Department said Tuesday, pushing prices higher than they've ever been at this time of year.

WALL Street twisted its way through another difficult session yesterday, discouraged about the economy's prospects but still managing a higher finish after some concerns about the beleaguered financial sector lifted late in the session. Word shortly before the close that Citigroup Inc.'s board plans to meet in an emergency session over the weekend helped that stock and other financials pare sharp losses. yesterday's session ended a week made turbulent not only by bad news from the financial sector but also by spiking commodity prices and comments from the Federal Reserve that it might be less generous with interest rate cuts in the coming months. A highly anticipated Labor Department report showing employers added 166,000 jobs in October _ the most in five months and nearly double what analysts had been expecting _ didn't give stocks much of a lift a day after a sharp pullback as investors' unease about the financial sector seemed to blanket trading. Wall Street was clearly

THE prospect of a stronger US economy and word of possible new UN sanctions against Iran sent crude oil futures back above US$96 a barrel yesterday. The Labor Department reported that employers boosted payrolls by 166,000 jobs in October, the biggest increase in months and double what economists had forecast. Meanwhile, October's unemployment rate held steady at 4.7 percent. Separately, the Commerce Department said factory orders rose 0.2 percent in September, better than the 0.4 percent decline analysts were expecting. "It suggests that concerns about the economy ... are overblown a little bit," said Michael Lynch, president of Strategic Energy and Economic Research Inc., in Winchester, Massachusetts. Oil futures added to their gains late yesterday when the British Foreign Office said the U.N. Security Council has agreed to draft a new sanctions resolution that could be passed in November if Iranian cooperation with the International Atomic Energy Agency does not

CRUDE oil prices shot higher and then retreated yesterday, reaching a new record of US$96 a barrel before concerns about the US economy and France's decision to release oil from its strategic petroleum reserve motivated investors to cash in some of their recent gains. The Commerce Department's report that consumer spending rose by 0.3 percent in September, less than the 0.4 percent increase analysts expected, raised the prospect of a slowing economy that could depress demand for oil. And downbeat news about manufacturing came from the Institute for Supply Management, which said industrial activity grew in October at the weakest pace since March. Still, oil prices have surged 20 percent in one month, and when any market rises that far that fast, investors tend to sell to lock in some of their gains. The Federal Reserve's decision to cut interest rates a quarter-percentage point on Wednesday got a mixed reception in the oil market but probably contributed to some of Thursday's

NEW YORK Wall Street plunged in early trading today as surging oil prices and slower growth in consumer spending erased optimism about the Federal Reserve's positive take on the economy just a day earlier. The Dow Jones industrials skidded more than 200 points. Inflation fears revived as crude oil vaulted to a record $96 a barrel. Meanwhile, a report from the Commerce Department indicated consumers scaled back their spending in September as worries mounted about a worsening housing market and further credit market turmoil. That combination led investors to retreat from Wednesday's rally,

WASHINGTON (MarketWatch) - The U.S. economy shook off the worst housing downturn in a generation to grow at a 3.9% annual pace in third quarter, the best performance in six quarters, the Commerce Department estimated Wednesday. The increase in gross domestic product was better than the 3.4% gain expected by economists surveyed by MarketWatch. Growth was well-balanced in the period from July to September, with strong contributions from consumers, exports, capital spending, military spending, and inventory building. Housing investments continued to be a major drag. Despite rising worries about commodity prices, the GDP price index, the broadest measure of price changes in the economy, rose just 0.8% annualized, matching a nine-year low. Consumer prices rose 1.7%, while core consumer prices, which exclude food and energy prices, rose 1.8%, just within the Federal Reserve's target zone.

PRICES paid by US consumers rose more than forecast in September as food and energy costs climbed, while the core measure that excludes those items showed inflation remains contained. The 0.3-percent gain followed a 0.1-percent decline in August prompted by falling oil prices, the Labor Department said yesterday in Washington. So-called core prices rose 0.2 percent for a second month in line with forecasts. With inflation under control, Federal Reserve policy makers have leeway to consider cutting their benchmark rate again later this month to keep the economy growing in the face of a deepening housing recession. Fed Chairman Ben S. Bernanke this week reiterated the central bank would "act as needed" to foster sustainable growth along with price stability, Bloomberg News said. "A slower economy and additional slack in the labor market should help keep inflation under control," Ethan Harris, chief economist at Lehman Brothers Holdings Inc in New York, said

US stocks rose for a fifth straight week, the longest stretch of gains since May, after minutes from the Federal Reserve and better-than-expected retail sales bolstered hopes that the economy will keep expanding. Wal-Mart Stores Inc, the world's largest retailer, climbed to a two-month high after boosting its third-quarter profit forecast. Yum! Brands Inc, owner of the Pizza Hut and Taco Bell restaurant chains, jumped the most since September 2005 on earnings that topped analysts' estimates. Exxon Mobil Corp, the biggest oil company, led a gauge of energy shares to a record after crude prices rose to an all-time high. Minutes from the Fed's September 18 policy meeting showed central bankers avoided language that might have suggested the economy would fall into a recession. The Commerce Department said retail sales added 0.6 percent last month, from the 0.2 percent gain predicted by analysts in a Bloomberg News survey. "The consumer is a staying force, earnings growth is

THE US trade deficit narrowed more than forecast in August as exports climbed to a record for a sixth consecutive month. The gap shrank 2.4 percent to US$57.6 billion, the smallest since January, from a revised US$59 billion in July, the Commerce Department said yesterday in Washington. Foreign companies, benefiting from growing demand and a weaker dollar that's made American goods less expensive, have been snapping up Boeing Co aircraft and General Electric Co turbines. Rising exports will help keep the economy from falling into recession even as the housing slump persists. "The dollar is continuing to decline, which is giving a huge boost to competitiveness," Nigel Gault, chief US economist at Global Insight Inc in Lexington, Massachusetts, said before the report. Economists had forecast the deficit would narrow to US$59 billion, from a previously reported US$59.2 billion in July, according to the median of 74 forecasts in a Bloomberg News survey. Prices of goods

ASIAN stocks gained, led by Japanese exporters, after the yen reached a two-month low against the US dollar. BHP Billiton Ltd and Inpex Holdings Ltd fell after oil and copper prices extended their biggest drops in seven weeks. Honda Motor Co, which gets more than half of its sales from North America, climbed to an eight-week high. The Nikkei 225 Stock Average rose as Japan's market, which was closed on Monday, caught up with a rally fueled by a pickup in US hiring. "The improving US outlook has prompted a strengthening in the dollar; that's positive for exporters," said Yoji Takeda, who helps manage about US$900 million at RBC Investment (Asia) Ltd in Hong Kong. Benchmarks in Australia, South Korea, Singapore and Pakistan climbed to records while those in Hong Kong, India, Malaysia, Thailand and Pakistan also rose. They fell elsewhere in the region. The Morgan Stanley Capital International Asia-Pacific Index rose 0.2 percent to 166.04 as of 4:30pm in Tokyo, after earlier gaining as much as 0.5 percent. A measure of materials producers was the biggest drag on the index. "We've seen some weakening in commodity prices over the past few days and that's being reflected in the related stocks," Takeda said. The Nikkei 225 added 0.6 percent to 17,159.90. KK DaVinci Advisors led real estate-related shares higher after Goldman Sachs Group Inc offered to buy Simplex Investment Advisors Inc. US stocks slid on Monday, sending the Standard & Poor's 500 Index 0.3 percent lower. The index rose to a record on Friday after the Labor Department said the number of jobs in the country rose by 110,000 last month, more than the 100,000 additions forecast by economists in a Bloomberg News survey. "Concern about a slowdown in the US economy is easing," said Fujio Ando, who helps oversee US$365 million at Chiba-Gin Asset Management in Tokyo. "The strong jobs data also spurred dollar-buying. That's also positive for Japanese exporters." The yen recently traded at 117.35 per US dollar, compared with 116.59 at the market close on Friday in Tokyo. A weaker yen boosts the value of exporters' dollar-denominated sales when converted into the Japanese currency. Honda rose one percent to 4,020 yen (US$34.28), set for the highest close since August 15. Sony Corp, the maker of the Vaio computer and the PlayStation game console, added 0.5 percent to 5,820 yen. BHP, the world's largest mining company, fell 0.7 percent to A$44.40 (US

THE biggest quarterly rally for US government securities in five years is getting an extraordinary boost from the burgeoning reinvestment of petrodollars by the Organization of Petroleum Exporting Countries. OPEC members increased their holdings of Treasuries 12 percent this year through July to US$123.8 billion, Treasury Department data show. The prospect that OPEC's share of US debt is growing is based on the 31 percent rise in oil since December, which will raise OPEC revenue four percent to US$630 billion this year and nine percent to US$688 billion in 2008, according to estimates by the US Department of Energy. Petroleum exporters are adding to holdings of US debt three times faster than other foreign investors, the Treasury data show. Yields on 10-year notes are 21 basis points lower because of the additional petrodollar reinvestment, New York-based consulting company McKinsey & Co said last week. "Oil revenues are up; they're still in dollars, and they have to be put to work," said David Ader, head of US government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital, one of the 21 primary dealers that underwrite US government debt. "It bodes well for US debt." Demand from oil exporters may help drive yields lower even as signs that the US economy is weathering the worst housing market in 16 years reduce investor expectations for lower interest rates. The chances that the Federal Reserve will lower its target rate for overnight loans between banks this month fell to 48 percent from 74 percent a week ago, based on prices at the Chicago Board of Trade. The yield on the benchmark 4 3/4 percent note due in August 2017 rose four basis points last week to 4.64 percent, according to New York-based bond broker Cantor Fitzgerald LP. The price, which moves inversely to the yield, fell 10/32, or US$3.13 per US$1,000 face amount, to 100 7/8. A basis point is 0.01 percentage point. The note was little changed at 4.63 percent yesterday. OPEC's windfall suggests there will be demand for US debt from international investors even as the dollar falls to a record low versus the euro, Michael Pond, a debt strategist at Barclays Capital Inc, told Bloomberg News. Among foreign holders only Japan, China and the United Kingdom own more Treasuries than the 12 members of OPEC, which supplies more than 40 percent of the world's crude. Oil exporters eclipsed Asian nations last year as the biggest source of global capital for t

THE widening gap between crude oil and the relatively low price of gasoline is signaling the first quarterly decline in oil prices in a year. While oil has fallen in the fourth quarter during 13 of the past 20 years because of the transition from peak summer demand, the pressure for another drop in the months ahead is the most intense since 2004 and may defer any rebound to record crude prices until the first half of 2008. Citigroup Inc, Deutsche Bank AG and HSBC Holdings Plc anticipate that oil will slide from last month's record US$83.90 a barrel as gasoline sales weaken to the lowest level this year and a slowing US economy curbs demand. Profits from making fuels are so low that refiners have 12.5 percent of capacity off line, the second-highest rate of the past two decades for this time of year, data from the US Department of Energy show. "Refinery profit margins are being squeezed at a time when significant maintenance is scheduled," said Tim Evans, an energy analyst with Citigroup Global Markets Inc in New York. "The combination of these factors should send crude oil lower." Oil traders and analysts have never been more pessimistic, with 75 percent of respondents anticipating prices will fall, according to a weekly survey by Bloomberg News that started in April 2004. Crude may end the year below US$70 a barrel, compared with US$81.66 at the end of the third quarter, according to a forecast by Adam Sieminski, a global oil analyst at Deutsche Bank in New York. If he's right, a US$1 million investment in crude oil futures in New York would more than double to US$2.3 million, assuming speculators used the exchange's minimum deposit to conduct the transaction. Not everyone forecasts that oil will move lower by the end of the year. Goldman Sachs Group Inc is the most bullish commodities trading firm on oil, forecasting on September 17 that crude will end the year at US$85 a barrel, with a "high risk" of a jump above US$90, according to a report from analysts including Jeffrey Currie in London. Its two current trading recommendations on oil are both money-losers. One of them was to buy the gasoline refining margin, which has lost more than half its value since then, Goldman's research shows.

ENERGY futures fell yesterday as traders expecting a weakening of demand in the coming months cashed in profits from the previous session's rally. While an encouraging employment report suggested the economy is weathering the problems affecting the subprime mortgage industry, many energy traders and analysts question whether demand for oil and petroleum products will be strong enough in the fourth quarter to support US$80 a barrel oil. Others argue that demand for oil will increase as home heating season progresses. While crude inventories have risen for two straight weeks, supplies of gasoline and distillates including heating oil fell last week. Investors betting demand will tighten in the fourth quarter drove oil prices US$1.50 higher on Thursday. Yesterday, light, sweet crude for November delivery fell 22 cents to settle at US$81.22 a barrel on the New York Mercantile Exchange. Futures ended the week down 44 cents a barrel, or 0.5 percent. Trading yesterday was volatile, with prices alternately rallying and falling. "There's profit-taking going on after yesterday's rally," said Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Connecticut. The quick resolution of many of Thursday's West Coast refinery outages also pressured prices yesterday. November gasoline fell 0.29 cent to settle at US$2.0493 a gallon on the Nymex, ending the week down 1.9 cents, or 0.9 percent. Heating oil futures fell 0.78 cent to settle at US$2.2235 a gallon. Both contracts surged more than 5 cents on Thursday. Natural gas for November delivery fell 33.9 cents to settle at US$7.073 per 1,000 cubic feet. Forecasters see little chance that a series of storms strung from the Gulf of Mexico to the central Atlantic will develop into tropical storms that could threaten critical gas and oil infrastructure. In London, November Brent crude fell 7 cents to settle at US$78.90 a barrel on the ICE Futures exchange. Oil prices have been volatile in recent days as investors have battled over whether demand will grow or weaken in the fourth quarter. "It's a stalemate right now," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "People really don't know what the next move will be." Energy Department data suggests demand for gasoline is falling, and many analysts think that's a function of this year's record gas prices. But others argue that falling refinery activity and heating oil inventories sugg