*

Hitt og þetta 22. september 2006

EUROPEAN MORNING BRIEFING: US Data Spooks Markets

US SUMMARY: Philly Fed Factory Index Plunge Hits Stocks

DJIA 11533.23 loss 79.96 dn 0.7%
NASDAQ 2237.75 loss 15.13 dn 0.7%
S&P 500 1318.03 loss 7.15 dn 0.5%
Dow Future 11611.00 loss 12.00 dn 0.1%
NASDAQ Future 1654.25 loss 0.50 0.0%
S&P Future 1329.00 loss 1.25 dn 0.1%
Euro-USD 1.2792 gain 0.0010 up 0.09%
10-Yr US Treasury: 4.64% down 0.09
(Futures values, Treasury, EUR/USD Data as of 0450 GMT)
Wall Street fell sharply Thursday after the Philadelphia Federal Reserve surprised investors by announcing that its broadest measure of manufacturing activity dropped to a negative reading for the first time since April 2003. That renewed investors' fears that the economy could be cooling too quickly. The dollar was lower, while Treasurys and oil gained.

STOCKS: The pullback after Wednesday's big stock rally illustrates how sensitive Wall Street remains to any news that might squelch hopes of a gradual economic slowdown. Investors are concerned the Fed has slowed the economy too quickly as it sought to contain inflation. Earlier, the index of leading indicators fell in August for the second straight month.

"As long as we are data-dependent, the market is going to be vulnerable to some significant swings," said Alan Gayle, senior investment strategist and director of asset allocation for Trusco Capital Management.

"The Fed has put their stake in the ground with their forecast of decelerating growth and easing future inflation pressures," Gayle said, predicting the markets will be nervously awaiting corporate earnings news and economic data in the coming weeks.

The market's reaction to economic numbers reflects concerns about large swaths of the stock market, such as energy, said Subodh Kumar, chief investment strategist at CIBC World Markets.

"Basically, what the market is reflecting as it has through most of this quarter is that the cyclical growth aspects are cooling down," he said. He wouldn't be surprised by further declines.

"It's too early to bottom fish in cyclical areas. I'd much rather stay in areas where you're seeing evidence of restructuring and quality growth delivery," he said, mentioning health care, telecommunications services and information technology.

FOREX: The dollar opens mixed after falling sharply Thursday following the weaker-than-expected manufacturing activity data in the Philadelphia region.

With no major U.S. data scheduled for release Friday, traders may decide to correct Thursday's response, giving the dollar a boost going into the weekend.

BONDS: Treasury prices rallied Thursday, with yields pushed to six-month lows following the decline in the Philadelphia Fed business conditions index.

"The market is rightfully interpreting this number as giving an increased chance of the Fed easing policy" in coming months, said Bernd Wuebben, director of relative value strategy at BNP Paribas in New York.

Wuebben said that a broad range of investors came into the market after the Philadelphia Fed data, with speculative and institutional investors looking to snap up Treasurys.

"Clearly people wanted to buy" and the survey number was an ideal catalyst for doing so, he said.

"We've had a whole host of weak numbers," said Tom di Galoma, managing director and head of Treasurys at Jefferies & Co. "I think the housing recession is starting to become a full-fledged reality, and at some point as we near Christmas, the Fed will be looking at easing policy."

With the economy showing signs of a sharper than expected softening and Fed policy on hold, the 10-year note yield could move back toward a range of 4.50%-4.60%, said John Canavan, economist at Stone & McCarthy.

OIL: Prices rose 85 cents to $61.59 a barrel on the New York Mercantile Exchange.

ASIAN SUMMARY: US Slowdown Concern Sinks Shares

USD-Yen 116.38 gain 0.10 up 0.09%
AUD-USD 0.7560 loss 0.0010 dn 0.1%
Nikkei 225 15644.16 loss 190.00 dn 1.2%
Hang Seng 17562.53 loss 57.44 dn 0.3%
S&P/ASX 200 4941.20 loss 18.20 dn 0.4%
Taiwan Index 6874.61 loss 15.28 dn 0.2%
S.Korea Kospi 1346.14 loss 20.65 dn 1.5%
JGB Yield 1.6400% up 0.0500
(All values as of 0450 GMT)
STOCKS: Asian stocks headed lower Friday, tracking the overnight fall in U.S. markets fueled by data suggesting the American economy may be slowing more rapidly than expected.

"We've seen many omens that the U.S. economy is slowing down, so the market is now discounting this," said Shinichi Ichikawa, chief equity strategist at Credit Suisse in Tokyo. "The Japanese economy still depends on the global economy, and especially the United States."

In corporate news, after two months of exploratory talks, General Motors, Renault and Nissan Motor have made little progress toward a grand alliance, according to people familiar with the matter.

FOREX: Now little changed, the dollar's upside momentum against the yen slammed into a wall after the Philly Fed debacle, forcing investors to rethink their positions. The growing likelihood for a Fed rate cut soon left investors unwilling to hold long-dollar positions. For now, the dollar is trading in a range of Y115.00 to Y117.00.

U.S. Treasury Secretary Henry Paulson met Friday with Premier Wen Jiabao as China's chief central banker affirmed pledges to open its financial markets and eventually end controversial currency controls. There has been little reaction on the currency markets.

BONDS: Prices of Japanese government bonds rallied on data that fueled talk that the U.S. economy will slow significantly, prompting the Fed to cut rates soon.

METALS: Spot gold traded at around $586.10, up around $3, but has to close above its 200-day moving average of $593.20 to reverse its bearish state. In base metals, copper futures were little changed.

OIL: Prices rose 23 cents to $61.82 in Asian trading Friday as crude futures continued to rebound on short covering and technical factors from a midweek fall on a surge in U.S. distillate supplies.

OTHER NEWS: Thailand's new military rulers searched for a prominent, corruption-free figure to head an interim government. They continued to purge officials of the fallen regime and sped up investigations into massive corruption under toppled Prime Minister Thaksin Shinawatra, officials and local newspapers said Friday.

The Japanese Cabinet on Friday set a special session of parliament for Sept. 26, when lawmakers were expected to vote for the next prime minister. The parliament will likely elect nationalist Shinzo Abe to replace Prime Minister Junichiro Koizumi.

EUROPEAN OUTLOOK: Stocks Set To Sink; Govt Debt To Rally

Euro-USD 1.2792 gain 0.0010 up 0.09%
Stlg-USD 1.9022 loss 0.0002 dn 0.01%
USD-Franc 1.2425 loss 0.0007 dn 0.06%
(All values as of 0450 GMT)
Worry that the U.S. economy will nosedive is likely to hit European shares but help government bond prices. The euro opens steady after overnight gains on the dollar.

STOCKS: Investors are likely to sell off shares to start over fears the U.S. economy is cooling too quickly.

U.K. spreadbettor IG Index is calling the FTSE down 27 points at 5869, the DAX down 36 at 5926 and the CAC down 28 at 5180.

European stock markets ended higher on Thursday, with automakers and chemicals companies getting a boost from oil futures trading near recent lows and from investors picking up beaten-down telecommunications stocks.

FOREX: The euro opens a bit higher against the dollar, building on its overnight gains that came on the poor U.S. data.

BONDS: Prospects for a U.S. economic slowdown are likely to spur buying in European government debt Friday.

"The U.S. focus is above and beyond the move in the European fixed-income market," said Andre da Silva, senior fixed-income strategist at HSBC.

David Brown, economist at Bear Stearns said growth fears in the U.S. economy might have been overblown and, should U.S. inflation prove persistent, U.S. Treasurys aren't about to start a period of significant outperformance versus their European counterparts.

The current yield differential between 10-year U.S. Treasurys and 10-year German government bonds stands at 92 basis points, and Brown thinks this spread should be 100 basis points wider

European governments bonds rose slightly Thursday, mirroring activity in U.S. Treasurys in the absence of key domestic economic pointers.

CALENDAR: Friday, Sep 22: France Consumers; Euro Orders

GMT Expected Previous
0645 FRA Aug Consumer Spending -0.3%MM +1.7%MM
+4.5%YY +5.6%YY
0645 FRA 2Q Wages
0800 ITA Jul EU Trade Balance -1.63B
0830 UK Aug Motor Vehicle Production
0900 EU Jul Euro Zone Indus New Orders +1.2%MM -2.5%MM
+9.6%YY +5.2%YY
1405 US Pres Bush, Pakistan Pres Musharraf,
Afghan Pres Karzai meet in Washington
N/A GER European Commission Pres Barroso,
Germany Chancellor Merkel, France PM de
Villepin, Belgium PM Verhofstadt and
Hungary PM Gyurcsany attend Bertelsmann
conference on the future of the EU, Berlin

-By Dennis Baker; Dow Jones Newswires; dennis.baker@dowjones.com

(MORE TO FOLLOW) Dow Jones Newswires

September 22, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.


22 Sep 2006 05:45 GMT =DJ EUROPEAN MORNING BRIEFING: Corporate Events

SCHEDULED EVENTS

Actelios (ACT.MI): 1H Earnings

API Group (API.LN): Trading Update

Banca Popolare di Intra (PIN.MI): 1H Earnings

Business Post Group (BPG.LN): Trading Update

Energie Electrique du Simplon (SIM.EB): 1H Earnings

Fidelity Asian Values (FAS.LN): FY Earnings

Fletcher King (FLK.LN): AGM

Fonciere Euris (3849.FR): 1H Earnings

Gresham House (GHE.LN): 1H Earnings

Groupe Minoteries (GMI.EB): 1H Earnings

H.C. Slingsby (SLNG.LN): 1H Earnings

IQ-Ludorum (IQL.LN): 1H Earnings

IS Solutions (ISL.LN): 1H Earnings

Jupiter Dividend & Growth (JDTE.LN): 1H Earnings

Juventus Football Club (JUVE.MI): FY Earnings

Kaufman & Broad (12105.FR): 3Q Earnings

MyTravel Group (MT.S.LN): Trading Update

SIS International (SIS.KO): FY Earnings

Volvo (VOLV): August Truck Deliveries

Waterman Group (WTM.LN): Trading Update


(MORE TO FOLLOW) Dow Jones Newswires

September 22, 2006 01:45 ET (05:45 GMT)

Copyright (c) 2006 Dow Jones & Company, Inc.


22 Sep 2006 05:45 GMT =DJ EUROPEAN MORNING BRIEFING: Div Payments & Ex Div Dates

Antena 3 de Television (A3TV.MC): 1H Dividend Payment Date

Carpetright (CPR.LN): FY 2005 Dividend Payment Date

Clarkson (CKN.LN): 1H Dividend Payment Date

Gibbs & Dandy (GDYO.LN): 1H Dividend Payment Date

International Greetings (IGR.LN): FY 2005 Dividend Payment Date

Pearson (PSO): 1H Dividend Payment Date

Reliance Security Group (RSG.LN): FY 2005 Dividend Payment Date

Scottish & Southern Energy (SSE.LN): FY 2005 Dividend Payment Ddate

SThree (STHR.LN): 1H Dividend Payment Date

UniPapel (UPL.MC): 1H Dividend Payment Date
Wessanen (39531.AE): 1H Dividend Payment Date