http://www.bloomberg.com/apps/news?pid=20601087&sid=a_gcwg4mTV4w&refer=home U.S. Stocks Rally, Sending Dow Average to Record; Lennar Gains By Lynn Thomasson Oct. 1 (Bloomberg) -- U.S. stocks rallied, sending the Dow Jones Industrial Average to a record, as investors speculated the worst may be over for banks and construction companies hurt by subprime mortgage losses. Lennar Corp. and D.R. Horton Inc., the two biggest U.S. homebuilders, advanced after Citigroup Inc. said the industry's 50 percent decline this year has made the stocks attractive. Citigroup led financial shares higher after the largest U.S. bank said it expects ``a normal earnings environment'' in the fourth quarter and former Federal Reserve Chairman Alan Greenspan said the credit slump may be ending. The Dow's record caps a six-week recovery from a slump that helped wipe out almost $2 trillion in U.S. market value. The 30- stock gauge added 191.92, or 1.4 percent, to 14,087.55, above its previous closing high of 14,000.41 set on July 19. The Standard & Poor's 500 Index increased 20.29, or 1.3 percent, to 1,547.04, 0.4 percent shy of a record. The Nasdaq Composite Index gained 39.49, or 1.5 percent, to 2,740.99, the highest in six years. ``The market has realized that yeah, we had some problems with subprime, but it's not the end of the world,'' said Lincoln Anderson, who helps manage $150 billion as chief investment officer of LPL Financial in Boston. ``With that behind us, you think, `Where do we stand?' Where we stand is with excellent fundamentals, and that's what's helping the market.'' Stocks, which last week completed their fifth straight quarterly advance, also rose after manufacturing grew in September at the slowest pace in six months and a gauge of prices declined, increasing expectations the Fed will cut interest rates at its next meeting. The S&P 500 has rallied 4.8 percent and the Dow has added about 5.1 percent since the Fed reduced its benchmark rate by 0.5 percentage point on Sept. 18. Homebuilders Rally Homebuilders advanced after Citigroup unit Citi Investment Research advised buying shares of Lennar, D.R. Horton, Pulte Homes Inc., Centex Corp. and Ryland Group Inc., saying the builders may rally. ``It is precisely when things have gotten this bad that the stocks start looking good,'' wrote Citi analysts led by Stephen Kim. Lennar gained 62 cents to $23.27. D.R. Horton rose 65 cents to $13.46. A gauge of homebuilders in S&P indexes climbed 4.3 percent as all 15 members increased. Countrywide Financial Corp., the largest U.S. mortgage company, added 95 cents, or 5 percent, to $19.96. Citigroup rose $1.05 to $47.72. ``We expect to return to a normal earnings environment in the fourth quarter,'' Chief Executive Charles Prince said after the bank reported third- quarter profit fell 60 percent because of $5.9 billion of credit and trading losses on loans and mortgage-backed securities. 'The Bad News is Out' The bank helped push the S&P 500 Financials Index up 2.1 percent, the biggest advance among 10 industry groups. Merrill Lynch & Co., the third-largest securities firm, jumped $2.59 to $73.87. JPMorgan Chase & Co., the third-biggest U.S. bank, added 99 cents to $46.81. Financial stocks are collectively the worst performers in the S&P 500 with a 4.9 percent loss this year. ``What you've finally seen is all the bad news is out,'' said Jerry Jordan, who helps oversee $500 million at Hellman Jordan Management Co. in Boston. ``You've got a situation where they've kitchen-sinked the quarter and everything that could be bad is now out there.'' Stocks also climbed as news of deals, including Nokia Oyj's $8.1 billion purchase of digital mapmaker Navteq Corp., spurred speculation that takeovers will reaccelerate. `Cheering Some of the Deals' ``The market is cheering some of the deals that were announced this morning, especially the Nokia-Navteq one,'' said Ryan Larson, senior equity trader at Voyageur Asset Management in Chicago. ``People are really relieved that deals are going to continue.'' Nokia American depositary receipts, each representing one share of the biggest mobile-phone maker, rose 3 cents to $37.96. Navteq lost $1.52 to $76.45. ABN Amro Holding NV completed the $21 billion sale of its Chicago-based LaSalle unit to Bank of America Corp., moving a step closer to sealing the biggest bank takeover. Bank of America climbed 37 cents to $50.64. An average of 65 takeovers of publicly traded U.S. companies, worth a combined $107.1 billion, were announced each month in the first seven months of 2007, data compiled by Bloomberg shows. The pace of acquisitions slowed in August and September, with the value of announced deals plummeting 82 percent to an average of $18.8 billion a month. The number of announced takeovers also declined by a third to 43 deals a month in August and September. Utilities Gain Utility companies gained 1.6 percent as a group. Exelon Corp. Chief Executive John Rowe said his company, the largest operator of U.S. nuclear power plants, is interested in mergers and acquisitions, Crain's Chicago Business reported. Rowe told investors and analysts at a conference yesterday that he'd be willing to give up the chief executive officer's position in a merger, Crain's reported, citing an unnamed person who was at the gathering. Exelon climbed 43 cents to $75.79. McDonald's Corp. reached a record, gaining $1.54 to $56.01. The world's biggest hamburger chain forecast its expanded offering of drinks will boost sales by more than $1 billion annually, Crain's Chicago Business reported, citing documents obtained by the publication. About six stocks advanced for every one that fell on the New York Stock Exchange, making it the broadest rally since Sept. 18. Some 1.4 billion shares changed hands, 14 percent less than the three-month daily average. Fourth Quarter Gains Today's rally came on the first trading day of the fourth quarter. The S&P 500 has bigger gains on average during the fourth quarter than at any other time of the year, according to data compiled by the Stock Trader's Almanac going back to 1950. The index has posted gains in 11 of the past 12 fourth quarters. Not all investors are convinced the rally will last. David Tice, who runs the $786 million Prudent Bear Fund, said stocks are poised to fall on slower U.S. economic growth and a tightening credit market. The S&P 500 may drop at least 40 percent in the next 12 months, he said. ``There were massive write-downs here at Citi,'' said Tice. ``We've impaired confidence in Wall Street finance.'' Walgreen Co. fell the most in at least 27 years, plunging $7.08, or 15 percent, to $40.16. The largest U.S. drugstore chain reported an unexpected 3.8 percent drop in fourth-quarter net income, hurt by higher expenses and lower profits from generic drugs. Other drugstore chains also fell. CVS Caremark Corp. slipped $2.48 to $37.15. Rite Aid Corp. lost 15 cents to $4.47. Manufacturing Report In economic reports, the ISM's index of factory activity fell more than forecast to 52 in September from 52.9 in August. A reading over 50 signifies growth and the index averaged 53.9 in 2006. The report showed the institute's measure of prices paid dropped to 59 from 63, showing inflation may be easing. The Russell 2000 Index, a benchmark for companies with a median market value of $647 million, advanced 2.4 percent to 824.74. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, gained 1.4 percent to 15,575.76. Based on its advance, the value of stocks increased by $267.3 billion. (remember the 2 TRILLION that got wiped out) Everything is o.k. now.... PARTY ON!!!!!! Oh and don't you dare even consider buying PMs ... (because you can't eat it ) JMHO
[FONT=palatino, times new roman, georgia, times]Tuesday, October 2, 2007 [/FONT] <hr size="1"> <!-- writer and photo option --> <hr noshade="noshade" size="1"> <!-- end option --> [FONT=palatino, times new roman, georgia, times][FONT=Verdana,][SIZE=-1]NEW WORLD DISORDER[/FONT] [FONT=Palatino,][SIZE=+2]Are Iran, Russia, China behind dollar's free-fall?[/SIZE][/FONT] [FONT=Palatino,][SIZE=+1]Some see 'Currency Cold War' meant to bring U.S. to its knees[/SIZE][/FONT] [/SIZE][/FONT]<hr size="1"> [FONT=palatino, times new roman, georgia, times][SIZE=-1]Posted: October 2, 2007 1:00 a.m. Eastern <!-- end deck --> [/SIZE][/FONT] <hr size="1"> <!-- © 2000 WorldNetDaily.com--> [FONT=palatino, times new roman, georgia, times][SIZE=-1] <!-- copyright --> © 2007 WorldNetDaily.com <!-- end copyright --> [/SIZE][/FONT] <table align="right"> <tbody><tr> <td width="210"> </td> </tr> </tbody></table> [FONT=palatino, times new roman, georgia, times]WASHINGTON – The hottest selling book in China right now is called "Currency Wars," which makes the case that the U.S. Federal Reserve is a puppet of the Rothschilds banking dynasty and it has persuaded some top officials Beijing should resist America's demands to appreciate its own undervalued currency, the yuan. [/FONT] [FONT=palatino, times new roman, georgia, times]This might not be news of concern to most Americans if the U.S. dollar were not in precipitous free-fall, having reached record laws against the euro yesterday. [/FONT] [FONT=palatino, times new roman, georgia, times]What would it mean if China ever threw its economic weight around by dumping dollars in a major way? [/FONT] [FONT=palatino, times new roman, georgia, times]Suffice it to say it is referred to in some quarters as China's financial "nuclear option," because it would be the economic equivalent of detonating a thermonuclear weapon in the world's financial markets. [/FONT] [FONT=palatino, times new roman, georgia, times]But the American dollar's fate is hardly in the hands of the Chinese alone. Other foreign parties suspected of participating in a new "Currency Cold War" are Iran, Russia and Venezuela. [/FONT] [FONT=palatino, times new roman, georgia, times](Story continues below) [/FONT] [FONT=palatino, times new roman, georgia, times]Diane Francis, a financial reporter for the National Post in Canada, says it plainly and boldly: "There is a Currency Cold War being waged by Russia, Iran and various allies such as Venezuela." [/FONT] [FONT=palatino, times new roman, georgia, times]The grand strategy being engineered by Vladimir Putin, she writes, is to force the use of euros as the international monetary standard as a transition to the Russian ruble. [/FONT] [FONT=palatino, times new roman, georgia, times]"This is simply a monetary version of the old Cold War, minus the missiles," she writes. [/FONT] [FONT=palatino, times new roman, georgia, times]Experts don't see any short-term reprieve for the falling value of the dollar. Kathy Lien, chief currency strategist with DailyFX.com in the US, told Bloomberg she expects the American dollar to slide even further, forcing more lending rates cuts in the U.S. to stave off recession. [/FONT] [FONT=palatino, times new roman, georgia, times]"It seems like every single passing day we have a new record low in the dollar, and a new record high in the euro, and it's driven by the fact that U.S. data is continuing to deteriorate," she said. [/FONT] [FONT=palatino, times new roman, georgia, times]If other nations do not follow the U.S. in cutting rates, the slide in the value of the dollar would most likely continue. [/FONT] [FONT=palatino, times new roman, georgia, times]If the dollar trend continues spiraling downward, the risk is that nations like China – or Japan or Saudi Arabia – which have been buying U.S. Treasury bonds and thereby funding America's deficit, would stop that practice. [/FONT] [FONT=palatino, times new roman, georgia, times]That would be the nuclear option. [/FONT] [FONT=palatino, times new roman, georgia, times]China, with $1.3 trillion in foreign exchange reserves as a result of the massive and growing $260 billion U.S. trade deficit, has taken huge losses with the falling dollar, given that some 80 percent of China's $1.3 trillion in foreign reserves is held in U.S. dollar assets, largely in U.S. treasury securities. [/FONT] [FONT=palatino, times new roman, georgia, times]Meanwhile, Song Hongbing, the author of China's runaway bestseller, "The Currency Wars," says he's pleasantly surprised at the 200,000 copies his book has sold. He is probably not eager to see the dollar punished as he lives in Washington, D.C. [/FONT] [FONT=palatino, times new roman, georgia, times]"I never imagined it could be so hot and that top leaders would be reading it," he says during a book tour in Shanghai. "People in China are nervous about what's going on in financial markets, but they don't know how to handle the real dangers. This book gives them some ideas." [/FONT] [FONT=palatino, times new roman, georgia, times]Among the research findings that shocked him most was that the Fed is a privately owned and run bank. [/FONT] [FONT=palatino, times new roman, georgia, times]"I just never imagined a central bank could be a private body." [/FONT] [FONT=palatino, times new roman, georgia, times]Some, meanwhile, are standing on the sidelines cheering the currency wars – seeing them as a way of reducing the power and influence of the "imperialistic" U.S. [/FONT] [FONT=palatino, times new roman, georgia, times]Rohini Hensman, who describes himself as "independent scholar, writer and activist based in India and Sri Lanka," says it's about time the U.S. got its comeuppance. [/FONT] [FONT=palatino, times new roman, georgia, times]"As the bombs started falling on Iraq in 2003, I wrote and circulated an appeal entitled 'Boycott the Dollar to Stop the War!,' arguing that although the military strength of the U.S. was enormous, its economy was in a mess; with a massive gross national debt, the only reason it could finance its foreign wars and occupations was because of the inflow of over a billion dollars a day from countries accumulating foreign exchange reserves in dollars because it was the world's sole reserve currency. The denomination of the oil trade in dollars made it additionally desirable. With the advent of the euro, however, there was the possibility of an alternative world currency; therefore individuals, institutions and countries opposed to the war on Iraq should refuse to accumulate dollars or use them outside the U.S., because these were activities that helped to finance U.S.-Israeli aggression against Palestinians, Iraqis and Afghanis. After the World Social Forum meeting in 2004, the Boycott Bush Campaign adopted the dollar boycott as part of its strategy." [/FONT] [FONT=palatino, times new roman, georgia, times]In early trading today, the dollar advanced slightly, prompting gold prices back from 28-year highs set yesterday. The dollar's value against a basket of six major currencies rose slightly to 77.950 from a lifetime low of 77.657 a day earlier. The dollar traded at $1.4223 per euro, stronger than a record low on Monday of $1.4283. [/FONT] [FONT=palatino, times new roman, georgia, times]WND has reported the Federal Reserve is in a dilemma. [/FONT] [FONT=palatino, times new roman, georgia, times]The stock market has demanded rate cuts, wanting to return to the free credit policies of the Federal Reserve that fueled the liquidity bubble that has boosted home prices and pumped the Dow Jones Industrial Average since 9/11. [/FONT] [FONT=palatino, times new roman, georgia, times]Yet, the Fed giving in to stock market demands and lowering rates threatens an international dollar sell-off that could lead to a dollar collapse. [/FONT] [FONT=palatino, times new roman, georgia, times]Former Fed Reserve Chairman Alan Greenspan also sparked controversy by suggesting in his recently published book, "The Age of Turbulence," the euro is rivaling the dollar as the international foreign exchange reserve currency of choice. [/FONT] [FONT=palatino, times new roman, georgia, times]The Wall Street Journal recently quoted a rule of thumb advanced by Harvard University economist Kenneth Rogoff, a former chief economist for the International Monetary Fund. According to Rogoff’s "back-of-the-envelope" calculation, a 20 percent drop in the dollar's exchange value reduces Americans' income by 3 percent, adjusted by inflation. [/FONT]
