MARKET SNAPSHOT: U.S. Stock Market Welcomes Bailout Plan; Indexes Off Early Highs

By Kate Gibson

U.S. stock indexes rocketed higher Friday, with the major stock indexes wiping out a week of shattering losses, as Wall Street cheered the government's effort to unfreeze credit markets as well as plans to move against short sellers.

The major stock indexes climbed above the level at which they stood before the start of the watershed week, which saw the Dow Jones Industrial Average (DJI) lose about 800 points in the first three days of trading.

But at least one analyst questioned whether the weekly gain would remain intact at the end of the day.

"Panic buyers, most likely the shorts, were wiling to pay any price and they sure did," said Elliot Spar, option-market strategist at Stifel Nicolaus & Co., describing the burst higher, especially among financial shares.

"If details of the grand plan are revealed over the weekend, it may create a sell on the news on Monday morning. I suggest traders with big profits from yesterday lighten up before the close," said Spar.

Up more than 400 points early on, the Dow industrials was recently up 336.76 points at 11,356.45, with 24 of its 30 components in the green.

American International Group Inc. (AIG) was flying 56.5% higher, with major shareholders of the giant insurer said to be pursing a bid to pay off the federal government's loan to AIG in time to avoid the government taking an 80% stake in the company, the Wall Street Journal said in an online report.

Citigroup Inc. (C) also bolstered the Dow, up 23.7%, followed by Bank of America Corp. (BAC), recently ahead 17.7%.

UPDATE: Chipotle Profit Hit By U.S. Economy, Food Costs

By Matt Andrejczak

SAN FRANCISCO (Dow Jones) -- Chipotle Mexican Grill, Inc. warned Friday its third-quarter profit and sales will be hurt due to cash-strapped U.S. consumers and surging food costs. Its shares tumbled 18% in early trading.

The U.S. restaurant industry is facing leaner times as consumers are spending less money to eat out. So far, casual sit-down restaurants have been harder hit than the fast-food sector.

Chipotle, which sells burritos, tacos and other quick-service dishes, said it expects third-quarter net income to fall slightly below the year-ago figure of 62 cents a share. Analysts polled by FactSet Research had expected Chipotle to earn 72 cents a share in the quarter.

Denver-based Chipotle (CMG) said it faces further sales deceleration at its 775 fast-food outlets. The company said comparable restaurant sales, or sales at outlets open at least one year, will be in the "mid to low single digits."

Its previous forecast called for mid-single-digit increase. To combat rising costs for food-ingredients, Chipotle also said it plans to implement a national pricing strategy for its menu.

LATIN AMERICAN MARKETS: Mexican, Brazilian Equities End Higher; Mixed For The Week

By Carla Mozee

Major Latin American markets finished higher Friday but mixed for the week. Mexican stocks were slightly higher despite a sharp decline in shares of Cemex SAB following a weak forecast from the cement maker.

Mexico's IPC fought off earlier losses to finish up 35 points, or 0.14%, at 25,558.41. The result was enough to snap a three-day losing streak, but not enough to keep the index from posting a weekly loss, of 1.4%.

Cemex (CX) shares put in the worst performance Friday, down 7.5% after the company late Thursday issued a third-quarter forecast that disappointed analysts. Among its projections, sales will be $5.9 billion, or flat compared with the year-ago period, and earnings before interest, taxes, depreciation and amortization will be about $1.25 billion, down 3% from last year.

EBITDA for 2008 will come in between $4.6 billion to $4.7 billion, with about half of the decline due to a lower-than-expected performance in its U.S. operations, said Cemex. Its results will also reflect a negative foreign- exchange effect of roughly $100 million, largely because of the weaker euro.

Credit Suisse noted Friday that the company may face a higher effective tax rate because of a Mexican Supreme Court decision overturning a ruling that protected the company from paying taxes related to investments in offshore tax havens.

MARKET SNAPSHOT: U.S. Stocks Fall As Oil Rises, Financials Woes Return

By Nick Godt

U.S. stocks fell early Monday morning, as rising crude oil prices fueled uncertainty about the economy, while worries about ailing financials were rekindled by several media reports.

The Dow Jones Industrial Average (DJI) fell 43 points, or 0.5%, to 11,605 in early action, with 26 of its 30 components falling. The benchmark index was pulled lower by General Motors Corp. (GM), AIG (AIG), and Hewlett Packard (HPQ).

Shares of Exxon Mobil Corp. (XOM) rose 0.7%.

Crude-oil prices moved higher amid worries that Tropical Storm Fay could reach installations in the Gulf of Mexico. The September-dated light crude contract tacked on 70 cents to $114.46 a barrel, having peaked at $115.35.

The U.S. dollar was broadly steady after strong gains in the last couple of weeks and ahead of the latest data on housing, due later in the session, and inflation data due Tuesday.

Financial shares gave up some of their strong gains from Friday. Lehman Brothers (LEH) lost 4% after The Wall Street Journal said it could lose $1.8 billion during the quarter.

Separately, newsweekly Barron's said it's growing more likely that the U.S. government will recapitalize Fannie Mae (FNM) and Freddie Mac (FRE), wiping out investors.

Both Fannie and Freddie lost over 10%.

CURRENCIES: Dollar Rallies To Multiple-month Highs

By Steve Goldstein

The dollar's rally extended to multiple-month highs on Friday as U.S industrial output grew the most in 10 months and as traders continued to react to data that showed economies of five of the Group of Seven nations contracted.

In earlier action, the dollar rose to an intraday high of 110.65 Japanese yen, the highest level since January. The euro fell to an intraday low of $1.4663, the lowest since February, and the British pound fell to as low as $1.8510, the weakest since July 2006.

The dollar index (DXY), which measures the greenback against a basket of currencies, rose to an intraday high of 77.25, its highest level since December.

"The perception that the fundamental picture has tilted in favor of the U.S. dollar has continued to help drive" the greenback up, said Marc Chandler, a currency strategist at Brown Brothers Harriman.

Friday's U.S. industrial production data showed the output of U.S. factories rose 0.4% in July, the best gain in 10 months, the Federal Reserve reported.

Overall, industrial production at the nation's factories, mines and utilities increased a seasonally adjusted 0.2%, as expected, despite a 1.9% drop in output of utilities.

Separately, manufacturers in New York state said business improved slightly in early August, the New York Federal Reserve Bank reported Friday. The Empire state index rose to 2.8 in August from negative 4.9 in July.

UPDATE: Bond And Mortgage Insurers Extend Rally

By John Spence

BOSTON (Dow Jones) -- Shares of Ambac Financial Group Inc. rose sharply Friday morning after a ratings agency affirmed its view on the bond insurer and removed the ratings from review for a possible further downgrade.

Standard & Poor's Ratings Services late Thursday affirmed its AA financial strength ratings on Ambac (ABK) and MBIA Inc. (MBI). The stocks were up about 18% and 7%, respectively, in early trading Friday.

Bond and mortgage insurers rallied Thursday after the latest high-profile settlement related to the auction-rate securities mess.

Also Thursday, the Securities Industry and Financial Markets Association decided to allow newly originated jumbo loans to be included in the to-be- announced market for mortgage-backed securities. The move could lend support to the ailing mortgage market.

Shares of PMI Group Inc. (PMI) rallied 50% on Thursday as investors cheered the mortgage insurer's deal to sell some overseas assets.

Other mortgage insurers traded higher in early dealings Friday. MBIC Investment Corp. (MTG) gained 5% and Radian Group Inc. (RDN) was up nearly 9%.

Despite the recent rally, bond insurers are still down heavily so far this year on worsening conditions in the housing and credit markets. Ambac shares are off about 92% over the trailing 12 months through Thursday's close.

Oil Jumps and Financials and Earnings Add to Bulls' Lumps

Despite an afternoon attempt at a recovery, stocks finished lower as crude oil and commodities rose solidly. Financials faltered amid continued fears for the sector, and economic concerns crept higher after a dismal earnings report from Deere & Co, to add to the pessimistic mood on the Street. However, tech issues fared relatively well amid upbeat comments from Applied Materials, and a $1 billion increase in its share buy back program from Nvidia. In other equity news, Best Buy announced it will carry Apple's iPhone, Toll Brothers posted a drop in revenues, backlog, and net signed contracts. Elsewhere, Moody's downgraded the debt of General Motors, and CVS Caremark has agreed to acquire Longs Drug Stores for $2.9 billion. In economic news, retail sales showed signs of slowing, import prices jumped, and business inventories remained thin. Treasuries finished lower. see more

UPDATE 1-Thai consumer confidence recovers in July

BANGKOK, Aug 14 (Reuters) - Thai consumer confidence rose in July after falling for three straight months, boosted by the government's economic stimulus measures, cheaper subsidised petrol and robust exports, a survey showed on Thursday.

The University of the Thai Chamber of Commerce (UTCC) said its survey showed these positive factors outweighed political uncertainty caused by protests against Prime Minister Samak Sundaravej and concern over the global credit market crisis.

The recovery in July surprised some analysts, who had expected consumption to remain sluggish due to high inflation.

"It may be premature to say that consumer confidence has returned, but the possibility of oil prices hovering in a lower $100-120 range in the second half and the boost from state stimulus measures should improve sentiment in the months ahead," UTCC poll director Thanavath Phonvichai told reporters.

"One negative factor for the economy is lingering political uncertainty," he said, referring to what might happen now former Prime Minister Thaksin Shinawatra has decided to leave the country without fighting corruption charges against him in court.

The street protests have been aimed partly at Thaksin, seen as the power behind the Samak government.

In a bid to shore up its popularity among urban voters, the government introduced stimulus measures in July for six months, including a cut in consumption tax for petrol, free bus and train rides, and reduced power and water charges.

Adding to the beneficial effects of these measures, world oil prices have fallen sharply in recent weeks.

Finance Minister Surapong Suebwonglee, who has tried to revive consumer confidence as soaring inflation curbed Thais' purchasing power, voiced disapproval of the Bank of Thailand's decision to raise interest rates in July to tackle inflation.

That has led to a rift between the government and central bank over how to tackle inflation, which hit a 10-year high of 9.2 percent in July.

LATIN AMERICAN MARKETS: Commodity Stocks Lift Brazil; Mexico Ticks Lower

By Carla Mozee

Brazilian equities were pulled higher by commodity-related stocks Wednesday, while Mexican stocks edged lower with word from its largest trading partner that retail spending sputtered last month.

Brazil's Bovespa rose 1.5% to 55,326.35. The index is on track to break a four-session losing streak.

Among the strongest price performers of the session were mining giant Companhia Vale do Rio Doce (RIO) and state-run oil firm Petroleo Brasileiro ( PBR).

Vale was up 4.7%, its biggest jump in nearly two weeks. Petrobras shares gained 4.5%. Together, shares of Petrobras and Vale comprise about 24% of Bovespa.

Investment firm Bradespar, one of the controlling shareholders of Vale and the equity arm of Banco Bradesco (BBD), surged 4.5%. Bradespar's shares have declined about 14% since July 31.

The recent pullback in resource prices have weighed on the Brazilian market heavyweights. Vale shares had lost 5.9% over the previous three sessions, and Petrobras shares had lost 3.4% during the same period.

Also, shares of fuel distributor Ultrapar (UGP) picked up 2.6% and steelmaker Companhia Siderurgica Nacional (SID) rose 3.8%.

Resource stocks found their footing Wednesday as crude-oil rose for the first day in four, up around $115 a barrel after the U.S. government reported that supplies for crude, gasoline and distillates fell last week.

Meanwhile, prices for silver rose to above $14.51 an ounce, and copper futures climbed 1.6% to $3.28 a pound. Gold futures jumped nearly 2.1% to $831.50 an ounce in the wake of an 8-day losing streak.

The Reuters/Jefferies CRB Index, (CRB), a benchmark gauging the prices of major commodities, climbed 2%.

UPDATE: CML: UK House Purchase Loans Down 44% On Yr In May

UPDATE: CML: UK House Purchase Loans Down 44% On Yr In May

(Adds details, background.)

LONDON (Dow Jones)--U.K. lending for house purchases increased 2% in May but was substantially lower on the year as the housing market continued to suffer from the credit crisis and concerns about the economic outlook, data from the Council of Mortgage Lenders showed Tuesday.

Loans for house purchase totaled GBP7.9 billion in May, up from GBP7.7 billion in April but down from GBP14.2 billion in May last year, the CML said. The number of mortgages that were completed increased 4% on the month to 52,700, but that was also 44% weaker than in May 2007.

Gross lending fell 6% on the month and 22% on the year to GBP24.5 billion, marking its seventh consecutive monthly drop.

There was a 14% decline in remortgaging loans in May to 71,000, representing a 23% drop on the year, it said.

"Lending levels continue to be lower than last year and any recovery is still some way away, with little sign of the special liquidity scheme increasing the flow of funds to the industry or lowering the cost of funds as hoped," CML Director General Michael Coogan said in a statement.

The Bank of England launched a facility in April to allow banks to swap around GBP50 billion of mortgage-backed and other securities for U.K. treasury bills in an effort to improve the liquidity of the banking system and increase confidence in financial markets.