Alcoa Inc
The aluminum producer reported a third-quarter profit of $268M, or 33 cents a share, down from $555M, or 63 cents a share, in the prior-year period.

Merrill Lynch & Co. Inc
Analysts see more losses for the brokerage, which has agreed to be acquired by Bank of America. Fox-Pitt Kelton analyst David Trone said he expects Merrill to report total quarterly write-downs of $8.5B.

Monsanto Co
The agricultural seeds and products giant said that it lost $172M in its fourth-fiscal quarter, less than analysts’ expectations, but that sales surged 35% to $2.05B, beating analysts’ expectations.

Costco Whsl Corp
The discount retailer reported a 7% increase in same-store sales and a 7% increase in fourth-quarter profit to $398M, though both were short of analysts’ expectations.

The euro is underpinned by renewed risk appetite demand in the yen carry (euro-yen). Offers seen just above overnight highs at $1.3743 ($1.3750 offers), with additional offers seen to $1.3800.

Terri Belkas, currency analyst at FXCM- "Fed Chairman Ben Bernanke opened the door to rate cuts during a speech on Tuesday, while a record decline in consumer credit suggests spending may fall signficantly through the end of the year."

The Dow and S&P 500 fall to fresh session lows. Selling interest is broad-based.
The Nasdaq 100 is outperforming on a relative basis with a 0.9% decline. The index is benefiting from strength in BlackBerry device maker Research In Motion (RIMM 56.49, +1.44). RIM announced that its touch screen BlackBerry device will be released this fall. RIM is not included in the S&P 500 because it is a Canadian-based company.

The yen rose to a three-year high against the euro and gained versus the dollar on concern interest-rate cuts by global central banks may fail to boost confidence, encouraging the sale of higher-yielding assets.
The Federal Reserve reduced its target lending rate by a half-percentage point to 1.5 percent, while the European Central Bank and the central banks of the U.K., Canada, Sweden and Switzerland also reduced rates. Separately, China's central bank lowered its key one-year lending rate.
The Bank of Japan held its target lending rate at 0.5 percent yesterday, compared with 7.5 percent in New Zealand and 5.75 percent in Norway. The Reserve Bank of Australia cut its cash rate by 1 percentage point to 6 percent yesterday.
``They waited too long to sort these things out,'' said Scott Ainsbury, a portfolio manager who helps manage $14.6 billion in currencies at New York-based FX Concepts Inc. ``It's not enough. You buy nothing else but the dollar and the yen.''
``It's a war on many fronts,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``Rate cuts are a small part of the solution. There's no silver bullet.''
The Fed also reduced its rate on direct loans to banks, the discount rate, by a half-point to 1.75 percent. The U.S. central bank said yesterday it would set up a special vehicle to buy commercial paper to help revive the corporate-debt market.
Finance ministers and central bankers from the Group of Seven nations will meet in Washington on Oct. 10 to discuss the financial crisis. Measures to stabilize global stock markets will be on the agenda, according to a Japanese official who briefed reporters on condition of anonymity before the central banks' announcement. The G-7 comprises Canada, France, Germany, Italy, Japan, the U.K. and the U.S.
``The actions are a good sign for the upcoming G-7 meeting,'' said Hans-Guenter Redeker, the London-based global head of currency strategy at BNP Paribas SA, France's biggest bank. ``It's showing that some sort of coordination may be taking place.''

"FOMC is likely to cut the fed funds target rate an additional 50bp at the October FOMC meeting...With the economy expected to weaken sharply into 2009, and with inflation receding, we expect the Fed to continue to cut interest rates to 0.5% by the end of Q1 2009."

The major indices extend their losses in choppy trade. Volume is heavy, with 562 million shares already exchanging hands on the NYSE.
Crude prices are down 2.5% to $87.81 per barrel after the government's weekly energy report showed higher than expected stockpiles. Crude prices are down 40% from their all-time high of $147.27 that was reached on July 11.
Energy stocks (-1.1%) went on the retreat in conjunction with crude prices.
The Dow is underperforming, with Bank of America (BAC 21.74, -2.02) acting as a drag.
BofA shed more than 25% on Tuesday after it preannounced disappointing earnings, gave a dour outlook, cut its dividend by 50% and announced plans to sell $10 billion in common stock to shore up capital. Today, BofA is down 8.5% after its common stock offering was priced at just $22.00 -- 31.7% less than the Monday's closing level announcement and 7.5% below yesterday's closing level. As a result, the offering is highly dilutive to existing shareholders, prompting the drop in the stock.

WTI Nymex crude oil is at $87.60, down $2.36.

"U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 8.1 million barrels from the previous week. At 302.6 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year.

Shortly after the opening bell, the Dow, Nasdaq, and S&P 500 fell 2.5%, 2.7% and 2.3%, respectively. The market is currently trading near recently reached highs, when the Dow, Nasdaq and S&P 500 were up 1.9%, 2.1%, and 2.2%, respectively.
Just reported, August pending home sales rose 7.4% month-over-month on a seasonally adjusted annual rate, compared to the expected decline of 1.3%. Pending home sales were down 2.7% in July. Pending sales are up 8.8% compared to last year. Pending home sales is released by the National Association of Realtors and is based on signed real estate contracts for existing single family homes, condos and co-ops.
All ten of the economic sectors are posting a gain. The energy (+2.5%) and material (+3.3%) sectors are showing the most strength. The defensive-oriented consumer staples sector (+0.3%) is underperforming on a relative basis.
In commodity trading, oil is down 1.0% to $89.13 per barrel ahead of the government's weekly energy inventory report at 10:35 ET. Gold is up 4.2%, benefiting from the global rate cut and economic concerns. Commodities as a whole are down 1.0%. The dollar is down 0.3%.

Spot gold is trading at $917.75/oz, near the day's high of $919.20 and up from an overnight low of $879.20. A move above the Sept 29 high of $920, would set the stage for a larger rally toward the $987.75 high seen July 15.

Co-ordinated 50 bp rate cuts from the Fed, ECB, BoE and others at 1100GMT provided a welcome boost to carry trades after another turbulent morning in fx.
Fed lowered its main rate 50 bp to 1.5%. BOC, SNB, RIKSBANK also cut rates. BOE cuts by 50 bp In First Coordinated Move Since Nov 2001. BOC cuts overnight rate 50bp as part of coordinated global central bank effort. Overnight rate now stands at 2.50%
Aggressive sales of Aussie-yen and kiwi-yen in particular had knocked all of the yen pairs lower, dollar-yen dipping to a Y98 handle, while euro-yen slumped to Y134.20. Aussie hit lows at
$0.6459, some 700-points away from the Asian highs, with kiwi tumbling to $0.5791 in dire liquidity. A slight recovery by the end of the morning was then boosted on the rate cut news as stocks rallied. Dollar-yen moved from Y99.40 to a Y101 handle, with euro-yen rallying from Y135.40 to Y138.35 in volatile trade. Dollar-yen trades around Y100.80 at time of writing, with the cross at Y138.10, while euro-dollar has given back a portion of the late morning gains to trade around $1.3680.

Franco Shao, chief analyst at ForexCycle.com - "EURUSD breaks above the resistance of the down trend line, and might be forming a short term cycle bottom at 1.3443 level on 4-hour chart. Sideways consolidation in a range between 1.3443 and 1.3906 would be seen in a couple of days. As long as 1.3906 resistance holds, the rise from 1.3443 is treated as correction to down trend, and deeper decline could be seen to 1.3200 zone after consolidation. Only rise above 1.3906 will indicate that the fall from 1.4867 has completed."

S&P futures vs fair value: -30.00. Nasdaq futures vs fair value: -53.80. European markets are down around 4%.

Nicole Elliott, senior technical analyst at Mizuho Corporate Bank - "Trying to form a ‘double bottom’ against the 1.7400 area but getting no help from the government. One-month at-the-money implied volatility at 17.90% is at its highest in at least 15 years. Cable is oversold and bearish momentum has halved since mid-September."

-- Says rate cuts should help restore confidence
-- Says rate cuts "consistent" with Oct. 2 statement
-- Says cuts address lack of confidence.

Economist Ian Shepherdson at HFE says rate cuts were "a co-ordinated show of force" due to ntensifying market turmoil. He predicts more cuts to come: "The playbook to avoid depressions says rates need to be as close to zero as possible, banks have to be rescued, public spending has to rise and free trade must be maintained." He calls for Fed funds to be lowered to 1% by yr-end and 0.5% by Q1:09.

--FED LOWERS FED FUNDS RATE 50BP TO 1.5%
--FED CUTS DISCOUNT RATE 50BP TO 1.75%
--BOC, SNB, RIKSBANK ALSO TO CUT RATES}
--BOJ EXPRESSES SUPPORT FOR OTHER CB POLICY ACTIONS}
--FED ACTION TAKEN AFTER 10-0 VOTE IN CONFERENCE CALL
--JOINT CB STATEMENT SAYS INFLATION PRESSURES MODERATING
--CBS SAY FINANCIAL CRISIS HAS AUGMENTED DOWNSIDE GROWTH RISKS
BOE Cuts By 50BPS In First Coordinated Move Since Nov 2001
BOC cuts overnight rate 50bp as part of coordinated global central bank effort. Overnight rate now stands at 2.50%

The global economy is headed for a recession next year as the U.S. expansion almost grinds to a halt, the International Monetary Fund forecast before a Group-of-Seven meeting this week. Australian home-loan approvals dropped to a seven-year low in August, according to government figures reported today.
Shares tumbled across the Asia-Pacific region today, extending a global sell-off that's wiped out more than $5 trillion of market value in the past week.
The Australian and New Zealand dollars slumped to their lowest level in more than five years against the greenback as investors sold higher-yielding assets on concern frozen credit markets will stall the global economy.
``The Aussie is a barometer of global financial market sentiment so it takes a particularly hard hit,'' said Richard Grace, chief currency strategist at Commonwealth Bank of Australia in Sydney. The Australian dollar has lost 17.6 percent since the beginning of October and 33 percent since hitting a 25-year high on July 16.
The Australian and New Zealand currencies are popular targets for the carry trade, where investors seek higher returns on investments funded in countries with lower borrowing costs. The risk is that exchange-rate fluctuations erase profits.

Markets off their worst levels though, with the FTSE-100 outperforming after the UK government announced a Stg50.0bln bank rescue package. FTSE-100 fell 7.8% at the open before recovering, with HBOS a top gainer on hopes that its acquisition by Llyods TSB is still on course. FTSE-100 is now down 202pts (-4.45%), CAC-40 is down 196pts (-5.18%) and Xetra-DAX is down 329pts (-6.00%).

Nicole Elliott, senior technical analyst at Mizuho Corporate Bank - "Hovering nervously above a new recent low at 1.3444 in what is a potential C leg of an A, B, C-type correction where C is 0.6% of A. With EU27 finance ministers delivering absolutely nothing, zero, nul points, in terms of helping in this crisis well, with friends like these… The Euro is oversold and bearish momentum its strongest ever, one-month at-the-money implied volatility at 19.00% is at a new record high. Stand aside if possible."

Goldman Sachs note a number of changes to their interest rate views, implying a new round of global monetary policy easing. "In addition to expecting a further 150bp-200bps or rate cuts in China, we now expect the Fed to cut rates by 100bps by the end of 2009 Q1. We also expect the CB and Bank of England to join the party by cutting rates by 75bps and 150bps respectively over the next 12 months (we expect the BoE to cut rates by 25bp on Thursday). The risks are also skewed to looser policy in Sweden, Norway and the other peripheral economies over the next several months (although Denmark hiked 40bp yesterday, this was more of a sign of their commitment to the fixed exchange rate.) Given the current very fragile state of markets, we would not rule out some form of coordinated easing amongst the major central banks in the near future, including the Bank of Japan (which we now forecast will cut 25bp this quarter)", writes Binit Patel at Goldman Sachs.

--DIW sees no sign of recession in Germany
--Sees 2008 GDP growth at +1.9%; 2009 at +1.0%
--Economic slowdown not mainly due to financial crisis
--Private consumption to support growth due to slowing inflation
--Government must prevent failures of systemically important banks
--Don't expect spillover of financial crisis into real economy

--Association Keeps 2008 GDP forecast unchanged at +1.9%
--Association sees leeway for ECB rate cuts, given slowing growth, infl.

European equity bourses remain under pressure. CAC-40 is down 176pts (-4.72%), Xetra-DAX 232pts (-4.37%) and FTSE-100 is down 160pts (-3.47%).Основные индексы Европы продолжают оставаться под давлением: CAC -176 пп (-4.72%), Xetra-DAX -232 пп (-.37%), FTSE -160 пп (-3.47%).

Japan's benchmark stock indices slumped Weds, weighed by the stronger yen and US stock falls. The Nikkei 225 was down 952.58 points, or 9.38%, at 9203.32. The broader-based TOPIX was down 78.60 points at 899.01.

Japan's stocks slumped, sending the Nikkei 225 Stock Average to its lowest close in almost five years, as the seizure in credit markets curbed demand for the nation's exports and threatened to worsen the economic slowdown.
Sharp Corp., Japan's biggest maker of liquid-crystal displays, dived 9.3 percent after cutting its earnings forecast. Toyota Motor Corp. tumbled 4.9 percent, giving up its spot as the largest automaker by market value to Volkswagen AG. Mitsui O.S.K. Lines Ltd., the nation's second-biggest shipping company, fell 5.1 percent on concern demand will wane.
The Nikkei Average fell 317.19, or 3 percent, to close at 10,155.90 in Tokyo after dipping below 10,000 for the first time since Dec. 10, 2003. The broader Topix index dropped 21.44, or 2.2 percent, to 977.61. More than four stocks retreated for each that gained on the gauge.
The Topix has plunged 22 percent since September as credit turmoil caused the failures of banks globally and slumping commodities dragged down raw-materials producers. Seventy percent of stocks on the Topix sank below their book values as of yesterday, while shares on Tokyo Stock Exchange's main board traded at an average 12.7 times earnings, the lowest since Bloomberg started gathering data in July 1989.
Shares pared declines and the yen fell from a three-year high against the euro after Australia cut interest rates by more than expected, spurring speculation more central banks will lower borrowing costs to protect their economies from the credit crunch.
The Reserve Bank of Australia lowered its overnight cash rate target to 6 percent from 7 percent, double the reduction forecast by economists. The Bank of Japan today kept interest rates unchanged at 0.5 percent.
Sharp retreated 9.3 percent, the most since March 2000, to 910 yen. The Osaka-based company yesterday cut its annual net income forecast by 43 percent, citing lower sales of phones and falling prices for displays.
Toyota dropped 4.9 percent to 3,710 yen, the lowest since March 2004. Mitsubishi Motors Corp., which exports three-quarters of its Japanese production, lost 10 percent to 131 yen. Mazda Motor Corp., which derives more than half its profit from Europe, dived 5.9 percent to 320 yen.
Auto sales fell 27 percent in the U.S. last month as tightening credit and an economic slowdown discouraged buyers, prompting Toyota to offer no-interest loans. In Europe, sales slid 16 percent in August, the biggest monthly drop in nine years.

European stocks fell, sending the Dow Jones Stoxx 600 Index to a four-year low, as concern that banks need more capital overshadowed the Federal Reserve's plan to unlock credit markets by purchasing short-term corporate loans.
Royal Bank of Scotland Group Plc tumbled 39 percent on speculation it will be the next U.K. lender to need government assistance. Barclays Plc lost 9.2 percent. SAP AG declined 7.3 percent after brokerages cut share-price estimates for the world's largest maker of business-management software.
The London interbank offered rate, or Libor, that banks charge each other for borrowing in dollars overnight climbed 157 basis points to 3.94 percent, the British Bankers' Association said today.
National indexes fell in 15 of the 18 western European markets. Germany's DAX slipped 1.1 percent. The U.K.'s FTSE 100 advanced 0.4 percent, while France's CAC 40 gained 0.6 percent.
RBS dropped 39 percent to 90 pence, while Barclays declined 9.2 percent to 285 pence. The Europe Stoxx Banks Index lost 4 percent, the biggest retreat among the 18 groups in the Stoxx 600.
The U.K. government may invest at least 45 billion pounds ($79 billion) in banks including RBS and Barclays to bolster capital depleted by mortgage-related losses, three people with knowledge of the situation said.
Chancellor of the Exchequer Alistair Darling and Bank of England Governor Mervyn King met with banking chief executive officers from RBS's Fred Goodwin to Barclays's John Varley late yesterday to discuss the investment, said the people, who declined to be identified because the meeting was confidential.
RBS and Barclays said in separate statements that they didn't request capital from the government.
Separately, Standard & Poor's cut RBS's credit rating for the first time in 10 years, saying the bank is ``less well positioned than some of its major global peers'' as it seeks capital.
BP Plc and Anglo American Plc led commodity producers higher as oil and metals prices advanced.
BP, Europe's second-largest oil company, gained 4.1 percent to 447.25 pence. Total SA, the region's third-biggest, increased 3 percent to 40.015 euros. Anglo American, the world's fourth- largest diversified mining company, climbed 3 percent to 1,556 pence.

Tuesday marked another ugly session for stock investors as a weak outlook from Bank of America (BAC 23.77, -8.45) and cautious comments from Fed Chairman Ben Bernanke overshadowed a Federal Reserve plan to improve liquidity in short-term corporate borrowing.
Stocks rose 1.5% at the open on the Fed's plan to shore up short-term corporate borrowing, but overall economic concerns quickly sank stocks. In the end, the S&P 500 plunged 5.7%, settling at its worst levels, to a new five-year low in broad-based weakness. All ten economic sectors posted a loss, with notable declines in financials (-11.5%), tech (-6.1%) and consumer discretionary (-5.7%).
Fed Chairman Bernanke gave the market little to cheer about in a speech at the National Association for Business Economics annual meeting. He said that economic activity is likely to be subdued through this year and into 2009 and increases in financial market turmoil may extend the period of weak economic performance.
He did leave the door open for a FOMC rate cut on Oct. 29, although fed funds futures had already priced in a cut of at least 50 basis points.
Bank of America, the second largest U.S. financial firm by market cap after JPMorgan Chase (JPM 39.86, -4.14), fell 26% after preannouncing disappointing third quarter earnings and giving a dour outlook regarding the state of the economy. In an attempt to shore up capital in the face of current economic conditions, BofA is cutting its quarterly dividend by 50% to $0.32 and plans to raise $10 billion in a common stock offering.
CNBC reported the common stock offering was seeing weak demand, with an expected pricing of less than $25 per share. The notion that BofA would have to sell stock at a more than 22% discount added to overall investor unease, especially in the financial sector.
The commercial paper market, which many U.S. companies rely on for short-term borrowing, has been under pressure as investors flocked to the safety of Treasuries and away from money market funds. As a result, many companies found it difficult to issue commercial paper, or had to pay a high cost.
In an attempt to bring down the cost of commercial paper costs and improve liquidity, the Fed announced this morning that it created a Commercial Paper Funding Facility, which will provide a liquidity backstop for the strained commercial paper market. The Fed will purchase three-month unsecured and asset-backed commercial paper from eligible issuers. The Fed said it has no limit to how much commercial paper it can buy.
Separately, commodities (+1.0%) staged a modest recovery effort from Monday's 5.0% drop, aided by a 0.8% decline in the dollar. Crude prices rose 2.3% to $89.80 per barrel.
The S&P 500's loss marked its fifth consecutive decline -- its longest losing streak since January. The index has fallen 14.5% over the past five sessions and is down 32.2% this year.

Resistance 3: Y104.70
Resistance 2: Y103.65
Resistance 1: Y103.20
Current price: Y100.15
Support 1: Y100.05
Support 2: Y99.70
Support 3: Y95.88
Comments: The yen rose toward a six-month high against the dollar after the International Monetary Fund said the world economy is headed for a recession next year, with expansion in the U.S. forecast to grind to a halt. The yen also gained on speculation a global stocks sell-off will prompt investors to reduce holdings of higher-yielding assets financed in Japan, known as carry trades. The dollar may weaken further against Japan's currency as the Federal Reserve signals it's prepared to lower interest rates as a credit crisis grips the global economy.
Resistance comes at Y103.20 (50% of the resent fall), Y103.65 (Tenkan line of Ichimoku cloud) and Y104.70 (5-day moving average, Kijun line of Ichimoku cloud).
Support comes at Y100.05/30 (10 April/yesterday's lows)) Key support is at Y99.70 -- 76.4% retracement of advance from Y95.88 and below here support is at Y98.60.

Resistance 3: Chf1.1600
Resistance 2: Chf1.1500
Resistance 1: Chf1.1440
Current price: Chf1.1335
Support 1: Chf1.1310
Support 2: Chf1.1210
Support 3: Chf1.1140
Comments: Picture remains unchanged. USD/CHF nearest supports eyed at session's low Chf1.1360 and Chf1.1310 (5-day moving average). Last Friday's low at Chf1.1210 and Chf1.1140 (21-day moving average) look like a stronger levels. Above resent peak Chf1.1500 growth to extend further up to Chf1.1600.

Resistance 3: $1.8000
Resistance 2: $1.7650
Resistance 1: $1.7560
Current price: $1.7461
Support 1: $1.7710
Support 2: $1.7340
Support 3: $1.7300
Comments: The descending trend remains in force as UK consumer confidence fell to a record low in September, according to the Nationwide Consumer Confidence Index. Besides, the UK GDP fell by 0.2% in the three months to September, according to the latest estimates from the National Institute of Economic and Social Research. The institute said that the Bank of England should cut Bank Rate by 50bp at its policy meeting on Thursday but added that this would probably not do much good in the short run.
Firm breach of $1.7410 to confirm downside bias and to open the way down to the area of a Monday's low on $1,7340. Below possible falling to $1,7300.
Resistance is noted on hourly highs at $1.7560. Stronger one at $1,7650 (the Tuesday's session high, and also a level of 23.6 % FIBO of falling $1,8670-$ 1,7330), further up lies $1,7850 (32,8 %). Above the purpose of growth can become $1,8000 (50,0 %).

Resistance 3:$1.3980
Resistance 2: $1.3780
Resistance 1: $1.3670
Current price: $1.3560
Support 1: $1.3445
Support 2: $1.3360
Support 3: $1.3260
Comments: The dollar may accelerate declines as the Federal Reserve signals it's prepared to lower interest rates as a credit crisis grips the global economy. As the nearest support acts the area of Monday's low on $1,3445, further is possible falling to $1,3360 (Aug 2007 low) and $1,3260 (June 2007 low). In case of restoration by the nearest resistance there will be an area $1,3670/00. Further Fibo on $1,3780 (23.6 % of decrease $1,4870-$ 1,3440) and $1,3980 (38,2 %).

Exports Expected To Remain Flat
Business Sentiment Is Even More Cautious
Domestic Demand Likely To Stay Weak

High Low Close
EUR/USD 1.37411.3480 1.3622
USD/JPY 103.27 101.05 101.56
GBP/USD 1.7658 1.7316 1.7514
USD/CHF 1.1487 1.1358 1.1380

EUR/JPY 141.04 136.61 138.28
EUR/GBP 0.7811 0.7707 0.7769
GBP/JPY 181.96 175.99 177.87
GBP/CHF 2.0146 1.9802 1.9934

Change % Change Last
Nikkei -317.19 -3,0% 10,155.90
Topix -21.44 -2.2% 977.61
FTSE +16.03 +0.35% 4,605.22
DAX -60.38 -1.12% 5,326.63
CAC +20.24 +0.55% 3,732.22
Dow -508.39 -5.11% 9,447.11
NASDAQ -108.08 -5.80% 1,754.88
S&P -60.66 -5.74% 996.23
10yr Note +0.8000 +0.234% 3.506%
NYMEX Crude Oil +2.25 +2.56% 90.06
Gold +15.80 +1.82% 882.00

05:00 Japan Eco Watchers Survey: Outlook (Sep) 32
05:00 Japan Bank of Japan Monthly Economic Survey (Aug)
09:00 E15 GDP (Q2) revised, Y/Y 1.4% 1.4%
09:00 E15 GDP (Q2) revised -0.2% -0.2%
09:30 UK BRC Shop Price Index (YoY) (Sep) 3.8%
10:00 Germany Industrial production (August) unadjusted Y/Y 2,6%
10:00 Germany Industrial production (August) adjusted Y/Y -0,6%
10:00 Germany Industrial production (August) adjusted -1.8%
14:00 USA Pending Home Sales (MoM) (Aug) -3.2%
23:50 Japan Machinery orders (August) unadjusted Y/Y -4,7%
23:50 Japan Machinery orders (August) adjusted -3.9%