The PremiereTrade Market Wrap for 10/29/07

Federal Reserve Chairman Ben S. Bernanke and the board of Fed governors sound as if they'd prefer to just say no to an interest-rate cut this week but the financial markets may not let them. Policy makers from Bernanke on down have avoided signaling they want to reduce benchmark lending rates at their Oct. 30-31 meeting, ever since lowering them by a larger-than-anticipated half percentage point in September. The decision is scheduled to be announced at 2:15 pm Eastern on Wednesday afternoon.

Oil prices rose above $93 a barrel to a new trading high in Asia after Mexico's state oil company said it was suspending about a fifth of its oil production due to a storm. Light, sweet crude for December delivery rose as much as $1.34 to $93.20 a barrel, a new intraday record, in early afternoon Asian electronic trading on the New York Mercantile Exchange. It later slipped back to $92.82 a barrel.

General Motors Corp. (G) said it will set up a $250 million alternative-fuel research center in Shanghai amid efforts by global automakers to produce commercially viable alternatives to gasoline engines. Global automakers are stepping up research into fuel cells, biofuels, diesel and other power sources.

Stan O'Neal, Merrill Lynch & Co.'s (MER) beleaguered chief executive has decided to leave the firm and was negotiating the terms of his departure. The Merrill board is expected to conduct a broad-based search, both internally and externally, for O'Neal's replacement.

In Forex News Today

The dollar slipped lower against the euro, reaching a record low, then continued its slide in morning European trading, as markets looked for signals from the Federal Reserve about a likely rate cut this week. The European currency has been climbing steadily against the dollar all year, soaring to new highs almost weekly since August on the back of market fears over the U.S. economy's health because of the subprime credit crisis and increasingly disappointing economic reports.

But the euro's rise, which makes goods from the U.S. much cheaper to buy and shopping for U.S.-bound tourists ideal, can hurt exports from countries that use the euro, particularly Germany and France. Earlier this month, a survey looking at German investor confidence showed strong concern about exports. The strength of the euro risks making European exports less competitive.

The Hong Kong dollar hit the upper end of its trading band for the first time, prompting the Hong Kong Monetary Authority to refute speculation that it would abandon its peg against the US dollar. The U.S. currency slid to its weakest in 33 years versus the Canadian dollar and a 23-year low against Australia's dollar. Yields on two-year Treasuries are now the lowest among bonds of the Group of Seven nations excluding Japan after traders raised bets the Fed will reduce rates on Oct. 31. The yen weakened against all but one of the 16 most-traded currencies as gains in stocks spurred so-called carry trades.

Scheduled Economic Reports (Tuesday)

Retail Chain Index (week of Oct 27th), Consumer Confidence (Oct), the FOMC Meeting begins

In Earnings News

Verizon Communications Inc. (VZ), the nation's second largest telecommunications company, reported third-quarter earnings fell by a third from a year ago due to tax charges. Verizon earned $1.27 billion, or 44 cents per share, in the July-September period.

Humana Inc. (HUM) said its third-quarter profit nearly doubled from a year ago, as income from its government segment surged, aided by a one-time gain and improvements in its commercial business. Net income grew to $302.4 million, or $1.78 per share. Analysts expected $1.49 a share.

Office Depot Inc. (ODP) said it is delaying its third-quarter earnings results due to an independent review of vendor program funds by its audit committee. The review primarily relates to the timing of the recognition of certain funds. The company was scheduled to release its third-quarter results tomorrow; a new date wasn't released. As a result, Office Depot shares lost more than 10 percent on the announcement.

Scheduled Earnings Reports (Tuesday)

Procter & Gamble, Colgate Palmolive, DreamWorks Animation, AirTran Holdings, Fresh Del Monte, Chipotle Mexican Grill, MGM Mirage, Avon Products, Martin Marietta, Goodyear Tire & Rubber, Liz Claiborne, Sirius Satellite Radio

Stocks in the News

Alton USA Energy (ALJ), the Dallas refiner and retailer of petroleum products, estimated third-quarter earnings at 23 cents to 29 cents a share.

Brookfield Homes Corp (BHS) reported a third-quarter profit of $1.6 million, or 6 cents a share, down from $27.6 million, or $1.03 a share, in the year-earlier period.

Coca Cola Bottling (COKE) reported third-quarter profit of $5.3 million, or 58 cents a share, up from $4.9 million.