U.S. MARKET AVERAGES

Market continued its roller coaster in tandem with the oil price movement. The grip of oil on the trader psychology is palpable. Traders ignored data from the Labor Department on initial claims on unemployment and report on index of Leading Indicators. Markets reached its low at mid-day as oil climbed above $68 per barrel and gold crossed $475 per ounce. With the change in direction of Hurricane Rita, market sighed a breath of relief in the hope that the refineries and oil infrastructure will be spared.

The Hurricane Rita, at category four, has potential to be one of the deadliest and dangerous hurricanes ever to hit the Gulf of Mexico region. And no one is taking chances. Exxon Mobil shut their largest refinery located in Texas. Eleven refineries are totally shut and three are partially shut and other eighteen are in the direct path of Rita. With app 26% of Gulf of Mexico oil and gas production infrastructure in the direct path of Rita. Stakes are high.

Market still showed its resilience during the last half hour of trading. The buyers were busy bidding up shares in home builders, retailers, casinos and financial stocks.

The long-term rate of 10-year notes fell again during the session. In the last two days they have fallen eleven basis points to 4.17% even after Fed’s increase of interest rate on Tuesday by 25 basis points.


MOVERS AND SHAKERS

General Mills (GIS) advanced 1.4% after posting first-quarter results that were over the expectations. The company also restated its profit prospect for year 2006.

Sprint Nextel (S) gained 2.3% after the telecommunications company narrowed its forecast for cost savings for the recently joined company by 20%.

Cognos Inc. (COGN) dropped 4.7% after the company posted yesterday a second-quarter earnings that were below analyst predictions, and presented a worst-than-expected third-quarter outlook.

Scholastic Corp. (SCHL), the New York publisher, announced a lower first-quarter loss and repeated its earnings forecast for fiscal 2006. The loss for the quarter ended August 31 fell to $21.2 million from $50.5 million a year earlier.

Ingersoll-Rand (IR) could gain in early trading after the company was upgraded at UBS to buy from neutral, citing valuation. The company fell 1.3% yesterday.

ECONOMIC NEWS

Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 17. The report showed that claims increased only modestly compared to a significantly upwardly revised figure for the previous week.
The Labor Dept. said that jobless claims rose to 432,000 from the previous week's revised figure of 424,000. Economists had expected claims to rise to 450,000 from the 398,000 originally reported for the previous week.

The upward revision to the previous week's figure reflected an increase in claims made by people dislodged by the Hurricane Katrina disaster.

The report also showed that the 4-week moving average rose to 376,250 from the previous week's revised average of 347,250. This marks the sixth consecutive increase for the less volatile moving average.

The Labor Dept. also said that continuing claims rose to 2.666 million from the preceding week's revised level of 2.578 million.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks ended mostly in the red on sharp declines of U.S. stock markets overnight and soaring oil prices, boosted by threatening Hurricane Rita. The Nikkei fell 0.3%, dragged by consumer-electronics group Sony Corp. and other decliners like Advantest Corp., Honda Motor. Across the region, South Korea’s Kospi added 0.3% and Australia’s All Ordinaries gained 0.2%. Markets in Hong Kong, Shanghai and Singapore finished down.

European markets closed largely down, reflecting surging oil prices as Hurricane Rita threatens to hit key refineries in the Mexican Gulf The German DAX 30 declined 0.5% on post-election economic uncertainty. The French CAC 40 lost 0.5%, dragged by beverage producer Pernod Ricar and insurer AXA. In contrast, oil heavy London’s FTSE gained 0.3% as oil majors, mining stocks, and retailers provided support.