www.bloomberg.com Top News Sat, 15 Mar 2003, 10:08am EDT By Morag MacKinnon

Sydney, March 14 (Bloomberg) -- Australian bonds and the currency had their biggest losing week of the year as the U.S. struggled to win support from the United Nations Security Council to give Iraq an ultimatum to disarm.

The Australian dollar this week shed more than 2 U.S. cents, ending its run as the world's best-performing currency in 2003 in its worst week against the U.S. dollar since September 2001. Bonds fell, pushing yields to their biggest weekly gain since Jan. 3. Stocks gained on the week.

The yield on the benchmark 10-year bond dropped to a two-year low earlier this week as investors sought debt's haven on speculation the U.S. may lead a military attack on Iraq as soon as next week. In response to opposition from Security Council members, the Bush administration yesterday signaled it may extend diplomatic efforts to disarm Iraq, sending yields higher.

``The more conciliatory tone we are seeing from the White House has encouraged people to diminish their expectations for war, which is seeing equities bid and bonds sold,'' said Greg McKenna, a market strategist at National Australia Bank Ltd.

The 6.5 percent bond maturing in May 2013 fell 0.620, or A$6.20 per A$1,000 face amount, to 109.109 at 5:25 p.m. in Sydney. Its yield rose 8 basis points to 5.33 percent, a 19 basis point gain on the week. The yield on the 7.5 percent bond maturing in July 2005 rose 9 basis points to 4.56 percent. A basis point is 0.01 percentage point.

The Australian dollar bought 59.53 U.S. cents. The currency has lost almost 3 percent of its value against the dollar this week.

``Extra Mile''

President George W. Bush ``is willing to go the extra mile for diplomacy,'' and debate on a United Nations ultimatum for Iraq may go into next week, White House spokesman Ari Fleischer said yesterday.

Speculation about a U.S.-led attack on Iraq had spurred demand for the safest securities. Australian government bonds maturing in between 7 and 10 years have returned investors 9.6 percent this year, while Australia's benchmark S&P/ASX 200 index has dropped 8.4 percent.

Australia's S&P/ASX 200 stock index today had its biggest one- day gain since Aug. 7. It closed the week higher for the fourth time this year. Gains in stocks crimped demand for the safety of government debt.

The markets have anticipated a fair amount of war risk,'' said Julian Foxall, who helps manage A$8 billion ($4.8 billion) in global bonds at Pimco Australia Ltd. Pimco Australia is part of Pacific Investment Management Co., a unit of Allianz AG. They just want to lighten up on that risk position.''

www.sfgate.com Wednesday, March 12, 2003
(03-12) 18:13 PST MEXICO CITY (AP) --

Mexican stocks trimmed losses in the last leg of trading Wednesday but still closed lower for the fifth session in a row, as poor sentiment over geopolitical issues continued to drag share prices into negative territory.

The market's key IPC index closed down 11.13 points, or 0.2 percent, to 5,809.97 points. At the end of 2002, the IPC stood at 6,127.09.

Volume was a modest 60.1 million shares worth 723.5 million pesos, compared with Tuesday's 58.5 million shares worth 801 million.

Among individual issues, market bellwether Telmex L shares closed down 7 centavos, or 0.4 percent, to 15.76; while its wireless sister company America Movil L shares fell 12 centavos, or 1.6 percent, to 7.45.

Advancers include construction concern ICA nominal shares, up 7 centavos, or 4.1 percent, to 1.76. Wireless phone carrier Iusacell V shares hit a record low Wednesday, dropping 1 centavo, or 2.9 percent, to 34 centavos.

BUENOS AIRES, Argentina (AP) -- Argentine stocks continued their losing streak Wednesday, led by a large decline in market leader Perez Companc, which late Tuesday reported a loss for the fourth quarter.

The decline of 2.87 points, or 0.5 percent, in the large-cap Merval Index to a close of 554.78 followed a 0.7 percent slide Tuesday and a 3.5 percent drop Monday.

A slightly more stable performance Wednesday in world markets, whose recent declines had started to weigh on Argentine stocks, may have helped stabilize local markets a bit but the overall tone remained weak, with uncertainty ahead of April elections beginning to play a role.

Perez Companc shares led the market lower, declining 3.4 percent to 2.25 pesos.

Banks were mixed Wednesday, with Banco Frances losing 2.3 percent to close at 4.30 pesos, but Banco Galicia rose 0.4 percent to close at 0.698 while Bansud was unchanged at 1.30.

The broader General Index was down 43.61 points, or 0.2 percent, at 26,775.60 points. Volume was a thin 26.7 million.

SANTIAGO, Chile (AP) -- Share prices on the Santiago Stock Exchange closed slightly higher in light trade Wednesday as investors remained wary about the possible effects of a new financial sector scandal.

Chile's blue-chip Ipsa index closed up 0.6 percent at 1,018.85 points, while the narrower Inter-10 index of more liquid, internationally traded Chilean shares rose 0.3 percent to 101.18, and the broader IGPA index ended up 0.3 percent at 5,070.99 points.

Volume fell to 7.1 billion pesos from 7.70 billion posted in the previous session.

Electricity Holding Enersis ended unchanged at 57 pesos and subsidiary Endesa ended up 0.8 percent at 182. Both firms announced Tuesday that they reached a deal with four local banks for a syndicated loan worth US$2.30 billion as part of a debt restructuring plan.

Retailer D&S rose 1.2 percent to 420 and telecommunications company Entel ended up 1.7 percent at 3,080.

CARACAS, Venezuela (AP) -- Venezuelan shares ended mostly unchanged Wednesday with the IBC General Stock Index closing at 8,177 points, up about 0.02 percent.

The market's biggest stock, telephone giant CA Nacional Telefonos de Venezuela, ended at 2,303 bolivars per share, up three bolivars in trades worth roughly US$12,000.

The company's American Depositary Receipts, worth seven common shares apiece, were down 0.73 percent at US$9.47 each in late afternoon trade on the New York Stock Exchange.

www.nytimes.com By BLOOMBERG NEWS

ASHINGTON, March 12 (Bloomberg News) — The trade deficit narrowed in January from a record as Americans bought fewer foreign-made goods in a slowing economy and exports rose, the Commerce Department reported today.

The trade gap in goods and services was $41.1 billion, trailing only a revised $44.9 billion deficit in December, the department said. For all of last year, the deficit reached a record $435.7 billion.

Growth forecasts are slipping as consumers rein in spending and business investment is stagnant, suggesting that Americans may buy fewer imported goods. Economic growth may ebb this year to 2.3 percent from 2.4 percent in 2002, a U.C.L.A. study said. In February, manufacturing slowed, 308,000 jobs evaporated and consumer confidence reached a nine-year low.

"We will see less inventory building in the first quarter and therefore fewer imports," given the prospect of war with Iraq and the slowing economy, said Elisabeth Stoegmueller, a Dresdner Kleinwort Wasserstein economist in New York who projected that the deficit would narrow to $41.5 billion. "It comes down to final demand in the end, and that is just not picking up yet."

Imports fell 2 percent in January, to $123 billion, led by declines for autos and consumer goods, while exports rose 1.6 percent, to $81.9 billion, helped in part by a weaker dollar. The dollar has fallen 26 percent against the euro and 9 percent against the yen in a year, making American goods less costly relative to European and Japanese products.

Economists had forecast a deficit of $43.4 billion compared with $44.2 billion in December.

Imports of autos and parts dropped 4.9 percent in January, to $16.8 billion. Americans bought 3.9 percent less in imported consumer goods, and companies spent 1.1 percent less on capital goods like telecommunications equipment and computers.

Rising oil prices, spurred by political discord in Venezuela and war expectations in the gulf region, pushed the value of petroleum imports to $7.4 billion from $7 billion the previous month. The price of oil surged nearly 15 percent, and the number of barrels imported fell to 268.4 million from 289.3 million as Venezuelan exports dropped.

Shipments abroad of consumer goods rose 6.9 percent in January, to $7.4 billion, led by a surge in pharmaceuticals. Foreign companies bought 2.5 percent more capital goods.

www.thestreet.com By Aaron L. Task Senior Writer 03/12/2003 06:28 PM EST

The disparity between chaotic world events and Wednesday's ultimately positive session for stocks brings about a perfect Buffalo Springfield moment: You know, "Stop, hey, what's that sound? Everyone look what's going down."

For what it's worth, what's going down are major global stock proxies (save the Nikkei 225, which enjoyed a technical bounce Wednesday). European bourses got rocked again, with London's FTSE 100 shedding 4.8%.

Great Britain, the U.S.' staunchest ally in the Iraq situation, offered some new proposals to resolve the diplomatic bottleneck in the United Nations, including a televised mea culpa by Saddam. Meanwhile, Serbia's prime minister was assassinated, there were protests against U.S. troops in Turkey, and little improvement of ongoing crises in Venezuela, the Korean peninsula and Israel. ("There's battle lines being drawn. Nobody's right if everybody's wrong.")

Despite all that, program-related buying, some shrewd technically driven short-covering and a touch of unjustified optimism sent major stock proxies modestly higher and well off their session lows Wednesday. The Dow Jones Industrial Average finished up 0.4% to 7552.07 after trading as low as 7416.64. The S&P 500 gained 0.4% to 804.19 vs. its nadir of 788.90 and the Nasdaq Composite ended up 0.6% to 1279.24 after trading as low as 1253.22 and breaching its Feb. 13 intraday low of 1262.

ExxonMobil (XOM:NYSE - news - commentary) was among the Dow's biggest restraint, falling 1.5% after J.P. Morgan downgraded several major oil producers. Royal Dutch (RD:NYSE ADR - news - commentary) fell 3.4% and the Amex Oil & Gas Index lost 2.2%.

Other individual movers included Black Box (BBOX:Nasdaq - news - commentary) , which tumbled 37% after warning its fiscal fourth-quarter results would not meet expectations.

Shares were bolstered early by false rumors of Osama bin Laden's capture and later by CNN's report that the U.S. is only one Security Council vote away from the nine needed for passage of a second resolution. U.N. support for the use of force against Iraq is considered critical for British Prime Minister Tony Blair, who is facing stiff political opposition to the alternative. Either way, the U.S. wants a vote by week's end, CNN reported.

"I didn't see anything fundamental that occurred at 2 (p.m. EST) to cause this rally," said Tim Heekin, director of trading at Thomas Weisel Partners in San Francisco. "When I see a rally in the last hour [or so] , it's often program-related."

Computer-driven buying by "passive indexers" could explain why many participants said Wednesday's session was quiet, although trading volume was up notably from recent levels. Over 1.5 billion shares traded on the Big Board and 1.2 billion in over-the-counter activity.

In addition to program buying, Heekin attributed the advance to an abatement of previously "relentless" selling pressure and some covering of positions by "smart shorts watching technicals." These included the 785-787 level on the S&P futures, which the trader said marked a 75% Fibonacci retracement of the rally off the October lows. (Pit-traded S&P 500 futures traded as low as 788.50 before settling at 805.70.)

On a similarly technical note, some bears may have been cowed by a drop in bullish sentiment in Chartcraft's Investors Intelligence survey to 39.8% from 41.6%. Although bearish sentiment also fell, to 37.5% from 38.2%, a drop below 40% bullishness has coincided with short-term reversals in the recent past, as Jim Cramer has repeatedly noted.

Also, the CBOE Market Volatility Index rose above 40 intraday -- trading as high as 41.16 before settling up 2.4% to 38.99. The VIX hit 40 before inflection points in July and October, although it ultimately moved much higher in both episodes, and the S&P 500 fell at least another 10% before reversing.

Finally, while European bourses remain mired at multiyear lows, U.S. averages remain stubbornly above their October lows, save the Dow Transports. To optimists, that's a bullish sign, or "positive divergence" in technical parlance.

Hard-core bears ("Paranoia strikes deep") say "poppycock" to all this, suggesting a retest, and breach, of the October lows is inevitable, noting market breadth favored decliners in both Big Board and over-the-counter trading. Skeptics also contend there are far too many folks trying to call a bottom for one to materialize, or for any rally to be sustained. Certainly, there's no shortage of bottom-pickers out there.

"If you can see some follow-through [to Wednesday's reversal] , we can say for the very short-term a significant low was put in," Heekin said.

Finally, as alluded to here last night and later confirmed in RealMoney.com's Columnist Conversation, Bob Brinker, of Marketimer, reported Tuesday his "long-term stock market timing model has returned to bullish territory for the first time since January 2000."

"Although additional minor stock market weakness is possible, we believe the market has reached the vicinity of a major cyclical bear market bottom," Brinker wrote in a bulletin to subscribers. He recommended a 100% fully invested position in equity portfolios, and predicted at least 25% gains for the S&P 500 and "significantly greater" gains for the Comp in the next one to three years.

Brinker is certainly a controversial figure. Having written about it at the time, I certainly recall his short-term bullish call on the Nasdaq 100 Unit Trust (QQQ:Amex - news - commentary) in October 2000, which he reiterated in January 2001. Despite the QQQ's dismal performance, Brinker hasn't rescinded that call, to date, according to longtime Brinker watchers and subscribers. The market-timer and radio personality could not be reached for comment.

Clearly Brinker isn't infallible. Then again, who is?

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to Aaron L. Task.

www.bloomberg.com Fri, 14 Mar 2003, 10:22am EDT By Morag MacKinnon

Sydney, March 14 (Bloomberg) -- Australian bonds tumbled, sending yields to a two-month high, after the U.S. signaled it may extend diplomatic efforts to disarm Iraq. Gains in stock futures crimped demand for the safety of government debt.

President George W. Bush is open to extending into next week diplomatic efforts and he seeks a diplomatic solution'' to the confrontation with Iraq, his top aides said. Bush is willing to go the extra mile for diplomacy'' and debate on the Iraq resolution at the United Nations may go into next week, White House spokesman Ari Fleischer said.

``The more conciliatory tone we are seeing from the White House has encouraged people to diminish their expectations for war which is seeing equities bid and bonds sold,'' said Greg McKenna, a market strategist at National Australia Bank Ltd.

The 6.5 percent bond maturing in May 2013 fell 1.249, or A$12.49 per A$1,000 amount, to 108.480 at 8:43 a.m. in Sydney. Its yield rose 15 basis points to 5.4 percent, its highest since Jan. 16. The yield on the 7.5 percent bond maturing in July 2005 rose 14 basis points to 4.62 percent. A basis point is 0.01 percentagepoint.

The futures contract for Australia's S&P/ASX 200 stock index due in March jumped 1.7 percent.

Speculation about a U.S.-led attack on Iraq has spurred demand for the safest securities while Australia's benchmark S&P/ASX 200 stock index has dropped 10.4 percent this year.

The Australian dollar bought 59.46 U.S. cents compared with 59.40 U.S. cents in late Asian trading. The currency has lost 3 percent of its value this week.

``We've had the clean out that we needed,'' said McKenna, who forecasts the currency will extend its 6 percent gain this year and rise as high as 65 U.S. cents by June. He recommends buying the currency when it dips to around 59 U.S. cents.