[R]09:45AM Wall Street opened lower on weak retail sales and economic concerns. Intel pressured the Dow.[/R]

Wall Street showed considerable weakness at opening Friday, reflecting weaker-than-forecast August retail sales, as well as economic and financial concerns, sparked by U.K. lender Northern Rock which approached the Bank of England for emergency funding. The Commerce Department said that retail sales rose 0.3%, but all the gains were for cars and trucks. According to another government report, industrial production rose 0.2% as U.S. factories, mines and utilities increased output.

Dow member Intel (INTC: chart) pressured the blue-chip average and tech sector after Merrill Lynch downgraded the chipmaker, sending its stock down 1.6%. American Express (AXP: chart) was also driven lower by analyst comments. The stock fell 2.6%, pushing the Dow further lower after Merrill Lynch cut its rating on the stock on worries about weak U.S. employment.

Among other early movers, Genentech (DNA: chart) declined 1% after an FDA advisory panel said it would review an application for its Avastin breast cancer drug. Liz Clairborne (LIZ: chart) lost 0.6% on plans to sell four brands to Li & Fung USA.

In global economic news, China's central bank lifted its key interest rates to cool the nation's economic growth and inflationary pressures. In the first minutes of trading, the Dow Jones industrial average fell 90.80, or 0.68%, to 13,334.08. The Standard & Poor's 500 index 8.43, or 0.57%, to 1,475.52, and the Nasdaq composite index fell 19.36, or 0.74%, to 2,581.70. Bonds rose, with the yield on the benchmark 10-year Treasury note fell to 4.41% from 4.48% late Thursday.

[R]Industrial production rose less than expected in August.[/R]

Industrial production rose less than expected in the month of August, according to a report released by the Federal Reserve on Friday. At the same time, the report showed that capacity utilization came in above economist estimates. The report showed that industrial production rose 0.2 percent in August following an upwardly revised 0.5 percent increase in July. Economists had expected production to increase by 0.3 percent, which would have matched the increase originally reported for the previous month. The modest increase in production was largely due to a sharp rise in production in the utilities sector, which rose 5.3 percent after falling 1.7 percent in the previous month.

Unusually hot weather contributed to the rebound in production by utilities. The rebound in production by utilities was partly offset by decreases in manufacturing and mining production, which fell 0.3 percent and 0.6 percent, respectively. As mentioned above, the report also showed that the capacity utilization rate came in at 82.2 percent, unchanged from an upwardly revised reading for the previous month. Economists expected the rate to edge up to 82.0 percent from the 81.9 percent originally reported for July. Capacity utilization in the utilities sector jumped to 87.9 percent in August from 83.6 percent in July, while the manufacturing and mining sectors both showed decreases in capacity utilization.


[R]09:00AM U.S. stock futures declined on renewed financial markets concerns, as well as lower-than-expected retail sales and Intel downgrade.[/R]

U.S. stock futures reversed from gains, pointing to a weaker opening Friday, dragged down by renewed concerns about the U.S. financial markets amid news of a foreign lender''s difficulties. U.K. lender Northern Rock was forced to approach the Bank of England for emergency funding, sending the British pound lower.

Retail sales figures and a broker downgrade of Intel exerted additional pressure. The Commerce Department said that August retail sales rose 0.3%, but all the gains were for cars and trucks. Excluding motor vehicles, sales fell 0.4%, which was lower than expected.

Among stocks in focus, Intel (INTC: chart) dropped 2.1% in pre-open trade after Merrill Lynch downgraded the chipmaker to neutral from buy, citing valuation. The same broker also downgraded American Express (AXP: chart), cutting its rating on the stock to neutral on worries about weak U.S. employment.

S&P 500 futures slipped 9.5 points at 1,488.50 and Nasdaq 100 futures fell 13 points at 2,011.50. Dow industrial futures eased 60 points.


[R]7:00AM New York, 8:00 PM Tokyo - Japanese stocks spike for the second day, with exporters buoyed by weakened yen. Thawing concerns of continued worsening of the global credit markets also lifts financial stocks. Oil and metal prices continue to rise. Toyota plans to invest 100 billion yen to build new car factory in 2009 in Japan to meet rising global demand. [/R]

Japanese stocks rose for the second day led by exporters buoyed by the weakening yen against a basket of major currencies. Financial markets were also on the rebound owing to fading concern of further turmoil in the global financial markets. Japan close up at 1.9%. Of the 225 Nikkei index stocks, 177 rose, 42 declined and the remaining 6 traded unchanged.

In Tokyo trading, the Nikkei 225 advanced by 1.9%, or 306.23 to 16,127.42. The broader Topix index gained 1.4% to 1,544.71. Export oriented stocks rallied after yen slipped to 115.10 to the dollar. A rally stocks prompted the slump in bonds. Japan’s 10-year bonds declined the most in two months. The yield on the benchmark 10-year bond rose 4.5 basis points to 1.575%. However, gains that were recorded by stocks largely offset the Wednesday’s tepid trading that was weighed down by news that Japan’s economy shrank by an annualized 1.2% in the second quarter. Core consumer prices, which are a measure of inflation, also fell by 0.1%.

Commodities and oil prices also continued to scale record highs lifting stocks in the sectors. Zinc soared 4%, copper rose 1.6% and oil touched a second day high of $80.09 a barrel.

Of the Nikkei 225 index stocks, beer producing company Sapporo Holdings paced gainers, rising 7.85% on news that U.S. hedge fund Steel Partners is still pursuing bid for the company. Toyo Seikan soared 6.85%, while Sumitomo Metals Mining gained 6.84%, boosted by an increase in nickel prices by 3% and increased income forecast by 46% to 89 billion for the six months ending September 30. Tokai Carbon Company and Sanyo Electric completed the top five gainers, adding 6.05% and 5.71% respectively.