Business news with words department+government+prices. 20 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

GOVERNMENT subsidy support for meat production will be stable even when pork prices fluctuate, the Ministry of Finance said yesterday. Speaking at an online press conference, Zeng Xiao'an, deputy director of the MOF's Department of Economic Development, said the government would take subsidies for piglet keepers into a long-term mechanism framework. "It does not matter whether pork prices are rising or falling, the supportive policies will be successive," said Zeng. "We will only adjust the strength of the policies based on real conditions," Zeng said when asked about the policies' time limit. To combat escalating inflation, China pledged to draw up a series of measures, including more subsidies for farmers. From July next year to the end of June in 2009, subsidies for each reproductive female piglet will be raised from 50 yuan (US$6.75) to 100 yuan, said Zeng. Also, the central government will allocate 2.5 billion yuan next year to support the

SAN FRANCISCO (MarketWatch) -- Treasurys were slightly lower Monday, pushing up yields, as firm stock prices decreased the appeal of fixed-income assets in extremely thin pre-holiday trading. U.S. bond trading will end early on Monday, and overnight Japanese and German markets were closed Monday for holidays. "With the holiday-shortened week, our expectations for any paradigm shifting events are pretty light," said David Ader, U.S. government bond strategist at RBS Greenwich Capital. "With the bench players now in the field until the New Year, we would err on the side of limited conviction for any moves over the next few trading sessions." The benchmark 10-year Treasury note was down 7/32 at 100 12/32, with a yield of 4.2%. The 30-year bond was down 10/32 at 106 9/32 with a yield of 4.61%. The two-year note was down 2/32 at 99 26/32 with a yield of 3.21%. On Wednesday, the Treasury Department will sell $22 billion in two-year notes, and on Thursday, it will sell $13 billion in five-year notes.

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

CRUDE oil futures rose yesterday after the government said stocks of crude and heating oil fell sharply last week while gasoline inventories jumped. In its weekly inventory snapshot, the Energy Department's Energy Information Administration reported crude stocks dropped by 7.6 million barrels last week, much more than the 1.5 million barrel decline analysts surveyed by Dow Jones Newswires, on average, had expected. Much of the decline was due to a sharp drop in imports, almost a million barrels a day, because fog closed the Houston Ship Channel last week, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. "That's basically what drew crude supplies lower," Ritterbusch said. Traders expect crude supplies will rebound in next week's report, which will reflect deliveries that were delayed by the fog, Ritterbusch said. Meanwhile, investors were focusing on other aspects of the report, which were mixed. For instance, heating oil

HOUSING prices in 70 major Chinese cities jumped by 10.5 percent in November, according to an official with the country's top economic planning body. The growth rate was the largest monthly rise since July 2005 when China started to cover more cities in its monthly housing price survey. From January to November, housing prices grew by 7.3 percent year on year, with the cost of new homes jumping 7.9 percent, Cao Changqing, director of the pricing department under the National Development and Reform Commission, said in an online interview. Rising property prices, driven up by speculation, have become a major concern for Chinese citizens. "Despite falling sales, housing prices in parts of Beijing, Shanghai, Guangzhou and Shenzhen still remain high," he said. Prices are expected to remain stable as macro-control policies are starting to yield results, Cao said. The government introduced a string of policies to cool off the red-hot real estate market.

OIL futures rose sharply yesterday after the government reported unexpected declines in stocks of crude and heating oil last week and the Federal Reserve announced a plan to help banks weather the credit crisis. Crude supplies fell 700,000 barrels during the week ended December 7, according to a weekly inventory report from the Energy Department's Energy Information Administration. Analysts had expected a 100,000 barrel increase. And supplies of distillates, which include heating oil and diesel fuel, fell 800,000 barrels; analysts had expected inventories to rise by 300,000 barrels. "Traders are concerned about that drop in distillate supplies," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago. Earlier, the Fed said it was working with other central banks to try to counter the credit crisis. That alleviated some of investors' disappointment that the Fed on Tuesday cut interest rates by just a quarter percentage point. Many investors had hoped for a

OIL futures fell yesterday to their lowest level in six weeks after a mixed government inventory report failed to offset a belief that supplies are growing faster than demand. Investors shrugged off OPEC's decision to keep production levels steady, a possible sign prices have peaked for the year, analysts said. In its weekly inventory report, the Energy Department's Energy Information Administration said crude supplies plunged by 8 million barrels last week, much more than the expected 700,000 barrel decline. That caused oil prices to jump briefly above US$90 a barrel. But other aspects of the report weighed on prices as the day wore on. Crude supplies grew at the closely-watching Nymex delivery terminal in Cushing, Oklahoma. Inventories of heating oil rose when analysts had expected a decline, and gasoline supplies rose more than expected. "Overall, this is a mixed report," said Tim Evans, an analyst at Citigroup Inc, in a research note. Earlier yesterday,

SINGAPORE'S inflation accelerated in October to the highest since 1991, suggesting the central bank will allow the currency to strengthen further to curb consumer price gains. The consumer price index jumped 3.6 percent from a year earlier, after gaining 2.7 percent in September, the Department of Statistics said yesterday. The figure exceeded all estimates by economists surveyed by Bloomberg News, where the median forecast was a 2.8 percent gain. Prices rose 1.3 percent from September. The Monetary Authority of Singapore last month said it would allow a "slightly" faster appreciation in its currency, aiming to damp decade-high inflation by making imports cheaper. The government this week said it expects consumer prices to rise next year at more than double the 2007 pace. "The risks of inflation are clearly to the upside," said Joseph Tan, Asia strategist at Fortis Bank SA in Singapore. "We can expect the Singapore dollar to get stronger, and we don't

CRUDE oil futures closed down in choppy trading yesterday, failing to breach US$100 a barrel after the government reported that crude oil inventories at a key Midwest oil terminal rose for the first time in weeks. The news helped offset the market impact of an overall drop in crude oil stocks. Light, sweet crude for January delivery fell 74 cents to settle at US$97.29 a barrel on the New York Mercantile Exchange. Stocks of distillates, including heating oil, also dropped more than expected last week, the Energy Department's Energy Information Administration reported. That could mean more bad news for heating oil customers already expecting costs to rise 22 percent this winter. Heating oil futures fell 0.27 cent to settle at US$2.6874 a gallon on the New York Mercantile Exchange after earlier hitting US$2.7154, a new record. Crude prices -- which rose as high as US$99.29 on the New York Mercantile Exchange earlier Wednesday and broke the previous intraday record of US$98.62

ENERGY futures fell yesterday after the government reported unexpected increases in crude oil and gasoline inventories last week and OPEC forecast fourth-quarter demand for oil would be less than expected. In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories rose by 2.8 million barrels during the week ended November 9. Analysts surveyed by Dow Jones Newswires, on average, had expected a decline of 300,000 barrels. That helped send light, sweet crude for December delivery falling 66 US cents to settle at US$93.43 a barrel on the New York Mercantile Exchange after trading off more than US$2 a barrel earlier. Crude prices have been volatile this week, falling more than US$3 on Tuesday and rising more than US$2 on Wednesday after hitting a record of US$98.62 one week ago. The drop in crude was limited, however, by an unexpectedly large drop in heating oil supplies, a mixed report on Iran's compliance with UN demands over

WASHINGTON Consumer inflation posted another elevated reading in October as energy prices shot up by the fastest pace in five months. The Labor Department reported Thursday that its Consumer Price Index rose by 0.3 percent last month, the second straight month with inflation at that level. The acceleration was occurring because of another jump in energy prices and continued increases in food costs. Meanwhile, the government said that the number of laid off workers filing claims for unemployment benefits rose by 20,000 last week to 339,000, the highest level in four weeks.

OIL futures extended their declines yesterday on expectations that the government's weekly fuel inventory report will show crude supplies increased last week. Analysts surveyed by Dow Jones Newswires on average predict that crude inventories rose by 300,000 barrels during the week ended October 19. However, estimates vary widely, ranging from an increase of 2 million barrels to a decrease of 2 million barrels. The Energy Department's Energy Information Administration will issue its inventory report Wednesday. Futures have declined every day since crude prices rose to a record above US$90 a barrel last week. Tuesday's retreat came as traders shrugged off initial concerns about a possible Turkish incursion into northern Iraq in search of Kurdish rebels. Concerns about a disruption in Iraqi crude sent oil prices higher early Tuesday, but the fact the gains didn't hold was a sign the market may be due for a correction, or sharp move lower, analysts said. "I think the

U.S. consumer prices rose at the sharpest rate in four months during September, the government reported Wednesday, as energy costs picked up after three months of decline. The Labor Department said the Consumer Price Index, the most broadly used gauge of inflation, rose at a 0.3 percent rate last month after declining 0.1 percent in August.

OIL futures retreated from a record US$89 a barrel yesterday, ending lower after government data showing larger-than-expected gas and oil supplies outweighed worries about tension in northern Iraq. Trading was volatile throughout the session as oil futures were buffeted by a number of headlines, including news that Turkey's parliament approved a government plan to attack Kurdish rebels in northern Iraq and word of an explosion at a small refinery in Montana. Reports by the Energy Department, the International Energy Agency and the Organization of Petroleum Exporting Countries over the past week have all supported a view that oil supplies are falling as demand is growing. But the Energy Department's inventory report yesterday countered those perceptions. "Inventories are rising, not falling," said Tim Evans, an analyst at Citigroup Inc. in New York. "Demand is falling, not rising." Light, sweet crude for November delivery fell 21 cents to settle at

PETROLEUM futures rose sharply yesterday and oil prices passed US$83 a barrel after the US government reported an unexpected decline in crude oil inventories. Prices were also supported by an International Energy Agency report that concluded oil inventories held by the world's largest industrialized countries have fallen below a five-year average, and by concerns that clashes between Turkish forces and Kurdish rebels could affect Iraqi oil supplies. "No news was bearish today," said James Cordier, president of Liberty Trading Group in Florida. "Really, that's all investors need right now to push energy prices higher." The weekly inventory report from the US Energy Department's Energy Information Administration said crude supplies fell by 1.7 million barrels in the week ended October 5. Analysts surveyed by Dow Jones Newswires on average expected oil inventories to rise by 1 million barrels. While the report also concluded that refinery activity and

OIL futures rose sharply yesterday after the government predicted that a colder winter ahead will help lift worldwide demand for crude during the fourth quarter. In a monthly report, the Energy Department's Energy Information Administration estimated that global demand for oil will be 1.8 million barrels a day higher in the fourth quarter than it was during the same period last year. The report follows a prediction Thursday from the US National Oceanic and Atmospheric Administration that temperatures in the US will be 1.3 percent colder than last year, although they'll be 2.8 percent warmer than average. "Initially, traders are relying on the Energy Information Administration (report)," said Tim Evans, an analyst with Citigroup Inc. in New York. However, Evans also said of Tuesday's trading, "I think there may (also) be a technical element to this." Oil prices declined more than US$2 a barrel on Monday, and have been volatile in recent days. Analysts say investors are engaged in a battle over whether oil supplies are adequate to meet fourth quarter demand. Some investors feel prices have peaked for the year and are due to begin a seasonal decline, while others feel prices could rise again and set new records. When prices held above US$78 on Monday, that may have emboldened some of the more bullish investors to try to push prices to new highs, Evans said. Light, sweet crude for November delivery rose US$1.24 to settle at US$80.26 a barrel Tuesday on the New York Mercantile Exchange, while gasoline futures rose 2 cents to settle at US$2.0202 a gallon. November heating oil rose 2.57 cents to settle at US$2.1853 a gallon, while natural gas for November rose 1.7 cents to US$6.863 per 1,000 cubic feet. In London, November Brent crude rose 91 cents to settle at US$77.49 a barrel on the ICE Futures exchange. At the pump, meanwhile, gas prices slipped 0.2 cent overnight to a national average of US$2.765 a gallon, according to AAA and the Oil Price Information Service. Retail prices have slid in recent weeks as consumer demand for gasoline has fallen. In addition to reacting to Tuesday's EIA predictions about future demand, traders are anticipating Thursday's EIA report on petroleum inventories. Crude oil inventories are expected to have gained 1 million barrels in the week ended Oct. 5, according to a Dow Jones Newswires survey of analysts, while refinery use is expected to have fallen by 0.1 percentage point to

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 People's Bank of China's research department raised its economic growth forecast yesterday and said inflation will probably accelerate to 4.6 percent this year. The economy may expand 11.6 percent this year, according to the report published in the China Securities Journal, faster than the agency's June estimate for a 10.8-percent expansion. Inflation this year will quicken to 4.6 percent from 1.5 percent in 2006 and up from the 3.2 percent forecast previously. The trade surplus will widen to about US$250 billion this year from US$177.5 billion in 2006. The forecasts put pressure on central bank Governor Zhou Xiaochuan to raise lending and deposit rates for the sixth time this year to cap surging asset prices and cool the overheating economy, said Bloomberg News. The bank on Thursday raised interest rates on some home mortgages and increased minimum down payments in an effort to cool property price gains. "The central bank may need to raise key interest rates again" to cool inflation, said Tao Dong, chief Asia economist at Credit Suisse Group in Hong Kong. "In three months from now, the economy will be cooler than it is right now." The government is also concerned that a surge in lending is creating a bubble, which would drive up bad loans should it collapse. Investment in real-estate development jumped 29 percent in the first eight months of this year. The rate on loans for second homes and on commercial real estate was pushed to at least 1.1 times "benchmark" rates that the People's Bank of China didn't specify in a statement at midnight on Thursday. Buyers will have to pay not less than 40 percent of a property's value as down payment, up from 30 percent. Until now, banks were barred from charging less than 90 percent of the benchmark rates for mortgages. Interest rates on loans for first homes are unchanged. The decision by the central bank and the China Banking Regulatory Commission is "to prevent credit risks and protect the borrower's repayment ability," according to the statement on the People's Bank of China Website.