The broader market is extending its downturn as declining issues outnumber advancers in the S&P 500. In turn, the majority of the major economic sectors continue to trade with losses.
At midweek, the best performing economic sectors have been energy, health care, and utilities. Week-to-date, energy is up 3.0%, health care is up 0.6%, and the utilities sector is up 2.3%. They are also the only three sectors trading in positive territory today, up 1.1%, 0.2%, and 0.8%, respectively.

BBH analyst Marc Chandler says April FOMC minutes "seem slightly more hawkish than the market expected" and may be a reason stocks dipped. He says "The 25 bp rate cut that was delivered was said to be a "close call", which reinforces the sense that policy is on hold now. Many officials saw the risk of an economic contraction in H1, but this seems less likely now... The Fed also raised its core inflation forecast to 2.2%-2.4% from 2.0%-2.2%."

Several members said no more ease unless data indicate "a significant weakening." Text also says mkts improved and econ data were as expected, though housing continued to weaken and infl data were mixed. FOMC is worried about up-drift of infl expectations. There was little change in staff econ forecasts, tho FOMC lowered theirs (see below). Dissenters: Plosser worried about fast money supply growth, Fisher concerned about "adverse feedback loop" where lower FF lowers US$ and raises import prices and inflation. Apr Econ Projections: '08 real GDP ests lowered to +0.3-1.2% (was +1.3-2.0% in Jan); core PCE prices now 2.2-2.4% (was 2.0-2.2% in Jan) but expected to decelerate in 2009-10. Unemploymt remains high. Risks are for lower growth, higher unemployment.

The euro headed for its biggest two- day gain versus the dollar since March after German business confidence unexpectedly rose, bolstering speculation the European Central Bank won't cut interest rates.

The British pound fell against all of the major currencies after minutes from this month's Bank of England meeting signaled policy makers remain reluctant to lower interest rates to stimulate growth. Currencies of commodity-exporting nations including Australia and Canada surged as crude oil rose above $132 a barrel.
``The euro is heading back to $1.60,'' near the all-time high of $160.19 set on April 22, said Adam Boyton, a senior currency strategist in New York at Deutsche Bank AG. ``Interest- rate differential and high oil prices are supporting the euro.''
``The dollar rally was a bit premature,'' said Robert Sinche, head of global currency strategy at Bank of America Corp. in New York, in an interview on Bloomberg Radio yesterday. ``There have been some glimmers of hope that maybe the U.S. economy was not as soft as some previously thought, but we think that conclusion was a bit premature.''
The minutes of the Federal Reserve's April 30 meeting, to be released today, may show policy makers voiced concern that rising commodity prices could fan inflation. Central bankers at that session cut the benchmark interest rate for overnight loans between banks by a quarter-percentage point to 2 percent.
Futures on the Chicago Board of Trade show traders see an 88 percent likelihood the Fed will keep its target rate for overnight lending between banks at 2 percent on June 25. The balance of bets is for a reduction to 1.75 percent.
``It is understandable for the dollar to weaken,'' said Satoru Ogasawara, foreign exchange analyst and economist at Credit Suisse Group in Tokyo. ``The Fed thinks downside risks to the economy are persistent.''

JPM points out the FOMC minutes will contain the third quarterly FOMC economic projections. JPM expects "GDP growth in 2008 (Q4/Q4 % change) will be marked down" by 0.5 pt and 2009 growth could get marked up. "Headline PCE inflation will be marked up by almost 3/4 percentage point, in our estimate, due mostly to rising energy prices." But core PCE prices are tracking ests.

Stocks struggled Wednesday morning, giving up earlier gains, as oil spiked past $130 a barrel, following a weaker-than-expected weekly supply report.
Oil hits new record: U.S. light crude oil for July delivery rose $1.02 to $130 a barrel on the New York Mercantile Exchange after the weekly supplies report showed a surprise drop in crude oil and gasoline inventories and a weaker-than-expected buildup in distillates, used in heating oil. Earlier, prices hit a record $130.47.
Oil prices have been climbing lately amid ongoing supply concerns and the weakness in the dollar, which makes dollar-traded commodities such as oil less expensive.
Gas hits 13th straight record: The national average price for a gallon of regular unleaded gas rose to a record $3.807 from the previous day's high of $3.80, according to AAA.
Company news: Time Warner, the parent company of CNNMoney, will receive a $9.25 billion dividend as part of its legal and structural separation from Time Warner Cable.
After the close Tuesday, Hewlett-Packard reported a small rise in quarterly profit that matched preliminary figures it announced last week. Shares fell 1.6% Wednesday morning.
Boeing and Hewlett-Packard were among the other big Dow losers.
AMR shares slumped 12% after its American Airlines unit said it was cutting capacity by 11% to 12% in the fourth quarter due to record-high oil prices.
Treasury prices slumped, raising the yield on the 10-year note to 3.82% from 3.83% late Monday.

Susumu Kato, chief strategist at Calyon: “Once the financial market turmoil calms down, the BoJ has to start adjusting interest rates, which are still at exceptionally low levels compared to the economic fundamentals and prices. We believe a rate hike may take place before the end of this year.”

The major indices fall to session lows, although the S&P 500's loss is modest. The Dow is posting a larger decline of more than a half percent as Boeing (BA 82.10, -3.04) and Hewlett-Packard (HPQ 45.42, -1.04) come under selling pressure.
Crude prices have bounced from the unchanged mark to a gain of 1.4% at $130.80 per barrel due to the unexpected drop in crude inventories. This marks a fresh all-time intraday high. Crude oil prices are up 15.2% in May, the largest monthly gain since October 2007.

Trading holds near Y163.00, with stops above this morning's Y163.15 high looking vulnerable. If triggered, Techs highlight next level of resistance at Y163.48 (76.4% Y164.96-Y158.67), this year's highs just shy of Y165.00 then coming into play on an extended move.

EUR/USD $1.5400
USD/JPY Y103.35, Y103.00, Y110.50
GBP/USD $1.9600
AUD/USD $0.9500
USD/CAD C$0.9900

Stocks looked set for a lower open Wednesday as crude prices shot to a new record above $130 a barrel. Crude futures kept climbing Wednesday, with the front-month contract touching a new trading record above $130 a barrel in electronic trading. The government is due to report its weekly inventory report at 14:30GMT. The rise in crude prices could push oil stocks higher.
In corporate news, General Motors reached an agreement with workers at its Kansas City, Kan., assembly plant Tuesday that could help it end a string of labor problems.
Tech giant Hewlett-Packard reported higher profits late Tuesday, but shares fell in after-hours trading as investors remained nervous over how the company will integrate newly acquired Electronic Data Systems.
Media conglomerate Time Warner, parent of CNNMoney.com, detailed plans of the spinoff of its cable arm. Time Warner will receive a hefty $9.25 billion dividend as part of the separation of Time Warner Cable.

- Signs worst of market turmoil is behind us
- Global economic prospects uncertain, especially in U.S
- Can't rule out new bank losses.

the next data was issued
08:00 DE IFO business climate index (May) 103,5 102.1 102.4
08:30 UK Bank of England Minutes 8:1
08:30 UK M4 money supply (April) provisional 0.7% 0.8%
08:30 UK M4 money supply (April) provisional Y/Y 11.2% 11,9%
08:30 UK PSNCR (April), bln 0.99 12,7
11:00 CAD CPI excluding food and energy (April) Y/Y 1.5% 1.3%
11:00 CAD CPI (April) 0.8% 0.4%
11:00 CAD CPI (April) Y/Y 1.7% 1.4%
11:00 CAD CPI excluding food and energy (April) Y/Y 0.3% 0.2%

The euro rose one cent against the dollar and climbed to the highest in three weeks versus the U.K. pound after German business confidence unexpectedly increased.

The euro also gained versus the Japanese yen after the Munich-based Ifo institute said its business-climate index rose in May. The yen advanced to the highest in more than a week against the dollar as a decline in European and Asian stocks prompted investors to pare holdings of higher-yielding assets funded in the Japanese currency. The Australian dollar rose to a 24-year high against the U.S. currency.

The minutes of the April 29/30 FOMC meeting are due at 1800GMT.

-Danger of inflation comes above all from second round effects
-Stability oriented cen. banks prevent 2nd rd effects w/timely action
-Once wage-price spiral hits, it's hard to maintain infl. expectations
-Almost all surveys say m- to long-term eu infl. expectations anchored
-ECB will continue to pursue a monetary policy aimed at price stability

EUR/USD $1.5400
USD/JPY Y103.35, Y103.00, Y110.50
GBP/USD $1.9600
AUD/USD $0.9500
USD/CAD C$0.9900

The euro climbed to the highest level in more than three weeks against the dollar and the U.K. pound after German business confidence unexpectedly increased.
The euro also advanced against the Japanese yen after the Munich-based Ifo institute said its business-climate index rose in May, giving the European Central Bank more reason to raise interest rates. The yen rose to the highest in more than a week against the dollar as a decline in Asian stocks prompted investors to pare holdings of higher-yielding assets funded in the Japanese currency.
The yen rose the most against the Brazilian real and the British pound on concern oil prices close to $130 a barrel and the collapse of the subprime-mortgage market will hamper global growth.
The minutes of the Fed's April 30 meeting, to be released today, may show policy makers voiced concern about a slowing economy. Central bankers at that session cut the benchmark interest rate for overnight loans between banks by a quarter- percentage point to 2 percent.
The dollar may fall to 102.57 yen later today according to the technical analysis of its price chart, said Pak Lai Ng, a technical analyst at Forecast Singapore Pte.
The currency is likely to extend declines after breaking below a trend line connecting its 12-year low of 95.76 yen on March 17 and its May 12 low of 102.57 yen, Ng said. Failure of first support at this low would trigger a double top pattern, suggesting the dollar may then fall to 100 yen in the next two weeks, he said. Support is a level where buy orders may be clustered.

- Will take right decisions to keep rates, inflation low
- UK economy will be one of fastest growing in G7 in 2008

Option barrier at C$0.9850 triggered as the Canadian dollar boosted by the release of stronger than expected inflation data. Rate trades to a low of C$0.9825, currently holding backa t C$0.9840. If rate can hold below C$0.9850 seen opening a deeper move toward C$0.9810/00. Offers now seen placed at C$0.9870/80, more toward C$0.9900.

European equity bourses are higher on Wednesday, with FTSE-100 leading the charge given it is heavily weighted in commodity stocks. Oil stocks are outperforming, taking cue from fresh record highs in crude oil prices today, with WTI Nymex crude oil hitting $129.74. Elsewhere, German stocks are also higher after stonger than expected German Ifo survey, with E.ON the main gainer, which hit 4-month highs on back of record power prices. CAC-40 is up 23pts (+0.45%), Xetra-DAX is up 26pts (+0.37%) and FTSE-100 is up 60pts (+0.97%).

Resistance 3: Y105.50Resistance 2: Y105.00
Resistance 1: Y104.50
Current price: Y103.26
Support 1: Y103.10

Support 2: Y102.60

Support 3: Y102.00

Comments: Dollar trades near session low on Y103.10. Below losses may extend down to Y102.60 and Y102.00. Resistance comes at May 19 high on Y104.50 with a break above will point to further rise up to Y105.00.

Resistance 3: Chf1.0570
Resistance 2: Chf1.0480
Resistance 1: Chf1.0390

Current price: Chf1.0331

Support 1: Chf1.0330
Support 2: Chf1.0280

Support 3: Chf1.0220

Comments: Dollar tests strong support which comes at Chf1.0330. Break under will point to a further decline to channel support line from Mar 17 on Chf1.0280 and then – to Chf1.0220. Strong resistance is around Chf1.0390. Above there is a room for a rise to Chf1.0480 and Chf1.0570 (May 19 high).

Resistance 3: $1.9900
Resistance 2: $1.9770
Resistance 1: $1.9710Current price: $1.9665
Support 1: $1.9630
Support 2: $1.9580
Support 3: $1.9450Comments: Cable consolidates. Resistance is around Tuesday’s highs on $1.9710 with a break above will target $1.9770. Keylevelcomesat$1.9900 (May 02 high).The nearest support comes at session low on $1.9630. Stronger level is around 50% of the rise from May 19 at $1.9580. Below losses may extend to May 19 lows on $1.9450.

Resistance 3:$1.6010
Resistance 2: $1.5880
Resistance 1: $1.5740
Current price: $1.5721

Support 1: $1.5640
Support 2: $1.5500
Support 3: $1.5450

Comments: Euro trades lower resistance which comes at session high on $1.5740 with a break above will open the way to $1.5880 and then – to $1.6010. Support is near session lows on $1.5640, then – around $1.5500. Break under will extend losses to $1.5450.

A survey of analysts shows the following calls:
- crude oil stocks up 900,000 barrels
- gasoline stocks up 500,000 barrels
- distillates stocks up 1.45 million barrels

The Bank of England's Monetary Policy Committee split 8-1 in favour of leaving Bank Rate unchanged at its May meeting, with MPC MemberBlanchflower backing a cut of 25bp. The minutes make clear that the majority of the MPC was concerned that, with inflation already at 3% in April, a rate cut could create the misleading impression that the MPC was not sufficiently focused on meeting the CPI target: "A further reduction in Bank Rate this month could create the impression that the Committee was trying to stabilise output growth rather than maintaining its focus on the inflation target."

EUR
Bids: $1.5655/45, $1.5600/1.5590
Offers: $1.5740

JPY
Bids: Y103.00, Y102.60
Offers: Y103.50/70, Y104.20

GBP
Bids: $1.9650/40, $1.9600
Offers: $1.9680, $1.9700, $1.9720

AUSSIE
Bids: $0.9580
Offers: $0.9620/25, $0.9650

1.Will be scope to cut rates later, but no urgency
2.Euro rise a concern, but export are still positive
3.Germany firms in good position to cope with euro.

The yen rose to a one-week high against the dollar and climbed against the euro as a decline in stocks prompted investors to pare holdings of higher-yielding assets funded in the Japanese currency.
The yen gained against the Australian dollar and the British pound on concern oil prices above $129 a barrel and widening credit-market losses will hamper global growth. The dollar fell against the euro on concern Federal Reserve minutes due today will highlight concern the U.S. economy will slow.
The euro gained yesterday against the dollar by the most in more than a month as Wolfgang Franz, president of the ZEW Center for European Economic Research and one of five economic advisers to the German government, said the European Central Bank may have to ignore the economy's weakness and increase interest rates to curb inflation.

EUR/USD tested $1.5680, but failed to break above and retreated to $1.5630/40.
GBP/USD weakens from $1.9700 to $1.9630.
USD/JPY printed low at Y103.10, sliding from Y103.70.

A report due at 10 a.m. in Munich today from the Ifo institute is forecast to show the business-climate index in Europe's biggest economy fell to 102 in May from 102.4 in April and 104.8 in March, according to economists.

Japan's benchmark stock indices ended Wednesday's session lower, weighed by the weaker dollar and overnight falls in the US. However, prices ended modestly above their session lows. The benchmark Nikkei was down 233.79 points, or 1.65%, at 13926.30. The broader-based TOPIX was down 29.75 points at 1370.09.

Stock market fixing:
Nikkei 225 -109.52(-0.8%)14,160.09
Topix-4.41(-0.3%)1,399.84
DAX 30 -107.44(-1.5%)7118.50
САС 40 -87.22(-1.7%)5054.88
FTSE 100 -184.90(-2.9%)6191.60
Dow -199.15(-1.53%)12829.01
Nasdaq -23.83(-0.95%)2492.26
S&P -13.17(-0.92%)1413.42
10YR +13/323.78%100 24/32
OIL NYMEX +1.65(+1.30%)$128.70

Japan's stocks fell the most in a week, led by developers, after Credit Suisse Group lowered its rating on the sector saying a slowdown in bank lending could trim demand for building projects.
Sumitomo Realty & Development Co. the nation's third-biggest developer, fell the most in a week. Sapporo Hokuyo Holdings Inc. led a decline by banks after the regional lender forecast net income to fall 28% this year. Kobe Steel Ltd. surged to a four-month high after Credit Suisse raised its rating.
Sumitomo Realty & Development Co. sank 4.7% and was the biggest loser on the Nikkei. Mitsui Fudosan Co., Japan's biggest developer, slid 2.4%, while No. 2 Mitsubishi Estate Co. dropped 3.6%.
Sapporo Hokuyo declined 4.6%, the biggest loser among 85 banks included in the Topix. The company yesterday said turmoil in the financial market and the sluggish stock market will cause profit to fall this year. Towa Bank Ltd. slid 4.3%, the most since April 10.

European stocks fell as record oil prices weighed on the outlook for profits and analysts said the financial-market turmoil isn't over.
Air France-KLM Group, Europe's largest carrier, sank the most since March as crude topped $129 a barrel. Yell Group Plc tumbled 26% after the U.K. publisher cut its dividend and reported a drop in earnings in a ``very difficult economic environment.'' BHP Billiton Ltd. slumped the most in four months after a Morgan Stanley analyst said weaker Chinese demand may result in ``soft'' metal prices in the coming weeks.
Air France sank 4.9%. Ryanair Holdings Plc, Europe's largest discount carrier, slipped 6.1%.
Deutsche Bank AG, Germany's biggest bank, fell 1.3% and UBS AG, Europe's largest bank by assets, dropped 1.6%.
Marks & Spencer Group Plc fell 5%. The U.K.'s biggest clothing retailer reported slowing second-half profit growth, cut staff bonuses and predicted ``difficult'' conditions as British consumers pare spending.

Spiking commodity prices sent stocks on Wall Street lower Tuesday, as investors took a look at oil prices at more than $129 a barrel.
Steadily rising commodity prices have raised worries about how further pricing pressure will hit an already strained consumer.
Before the bell the Producer Price Index gained 0.2% in April, short of economists' expectations and following a rise of 1.1% in the previous month. But prices excluding food and energy costs rose 0.4%, twice what was expected.
Corporate news: Home Depot reported sharply lower sales and earnings that nonetheless topped forecasts.
Target reported weaker earnings due to tepid sales and higher costs. However, results topped forecasts.
Staples reported higher earnings that met forecasts on higher sales that topped estimates.

The dollar fell the most in almost two months against the euro as the price of oil rose above $129 for the first time and speculation increased that the European Central Bank will keep interest rates high.
The euro gained after an adviser to the German government said European policy makers may raise borrowing costs as soon as the financial crisis ends.
The Producer Price Index gained 0.2% in April, short of economists' expectations and following a rise of 1.1% in the previous month. But prices excluding food and energy costs rose 0.4%, twice what was expected.
The euro gained after a government report showed German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in almost two years in April on energy costs.
The single currency briefly pared gains after an industry report showed investor confidence in Germany unexpectedly fell. The ZEW Center for European Economic Research said its index of investor and analyst expectations declined to minus 41.4, from minus 40.7 in April. Economists expected a gain to minus 37, according to a survey.
The Japanese currency held gains earlier after the Bank of Japan kept its benchmark interest rate at 0.5%. Governor Masaaki Shirakawa told a press conference inflation risks are rising globally.

EUR/USD fellto$1.5560 afterweaker-then-expectedZEW index. Later rate rebounded, printed new session high on $1.5670.
GBP/USD was positive, rising from $1.9530 to $1.9665 before it set stable around $1.9640/50. Later rate refreshed session high and printed new one around $1.9713.
USD/JPY was supported at Y103.70 before it rebounded to Y104.15. But general dollar’s weakness dragged the rate down to Y103.55.

In Europe the focus will be on Germany’s IFO business climate index. Analysts predict index fell to 102.1 in May from 102.4. UK will issue MPC minutes at 08:30 GMT.
Later (at 11:00 GMT) Canada inflation data will be released.
At 18:00 GMT attention will be on FOMC’s minutes, when Fed lowered rate to 2.0%.

Resistance 3: Y105.50
Resistance 2: Y105.00
Resistance 1: Y104.70
Current price: Y103.40
Support 1: Y103.10
Support 2: Y102.60
Support 3: Y102.00
Comments: Dollar weakens, holding a bit above session low on Y103.10. Below losses may extend down to Y102.60 and Y102.00. Resistance comes at May 19 high on Y104.70 with a break above will point to further rise up to Y105.00.

Resistance 3: Chf1.0570
Resistance 2: Chf1.0480
Resistance 1: Chf1.0400
Current price: Chf1.0380
Support 1: Chf1.0360
Support 2: Chf1.0280
Support 3: Chf1.0220
Comments: Dollar remains under pressure with a strong support comes at Fibo level on Chf1.0360 (50% of Chf1.1104 - Chf0.9640 decline). Break under will point to a further decline to channel support line from Mar 17 on Chf1.0280 and then – to Chf1.0220. Strong resistance is around Chf1.0400 (23.6% of the slide from May 19). Above there is a room for a rise to Chf1.0480 and Chf1.0570 (May 19 high).

Resistance 3: $1.9900
Resistance 2: $1.9770
Resistance 1: $1.9710
Current price: $1.9645
Support 1: $1.9640
Support 2: $1.9580
Support 3: $1.9450
Comments: Cable slides with support comes at $1.9640. Stronger level is around 50% of the rise from May 19 at $1.9580. Below losses may extend to May 19 lows on $1.9450. Resistance is around Tuesday’s highs on $1.9710 with a break above will target $1.9770. Key level comes at $1.9900 (May 02 high).

Resistance 3:$1.5880
Resistance 2: $1.5740
Resistance 1: $1.5680
Current price: $1.5652
Support 1: $1.5640
Support 2: $1.5500
Support 3: $1.5450
Comments: Euro looks positive, despite the weak ZEW index issued yesterday. Resistance comes at session high on $1.5680 with a break above will open the way to $1.5740 and then – to $1.5880. Support is near session lows on $1.5640, then – around $1.5500. Break under will extend losses to $1.5450.

High Low Close
EUR/USD 1.5677 1.5501 1.5652
USD/JPY 104.46 103.44 103.62
GBP/USD 1.9716 1.9479 1.9672
USD/CHF 1.0532 1.0355 1.0365

EUR/JPY 162.99 161.43 162.21
EUR/GBP 0.7977 0.7941 0.7955
GBP/JPY 204.76 202.70 203.87
GBP/CHF 2.0547 2.0385 2.0390

Change % Change Last
Nikkei 225 -109.52 (-0.8%) 14,160.09
Topix -4.41 (-0.3%) 1,399.84
DAX 30 -107.44 (-1.5%) 7118.50
САС 40 -87.22 (-1.7%) 5054.88
FTSE 100 -184.90 (-2.9%) 6191.60
Dow -199.15 (-1.53%) 12829.01
Nasdaq -23.83 (-0.95%) 2492.26
S&P -13.17 (-0.92%) 1413.42
10YR +13/32 3.78% 100 24/32
OIL NYMEX +1.65 (+1.30%) $128.70

08:00 Germany IFO business climate index (May) 102.1 102.4
08:30 UK M4 money supply (April) provisional - 0.8%
08:30 UK M4 money supply (April) provisional Y/Y - 11.9%
08:30 UK M4 lending (April) provisional, bln - +17.4
08:30 UK PSNCR (April), bln - 12.7
08:30 UK BoE meeting minutes (07-08.05)
11:00 Canada CPI (April) - 0.4%
11:00 Canada CPI (April) Y/Y - 1.4%
11:00 Canada CPI excluding food and energy (April) - 0.2%
11:00 Canada CPI excluding food and energy (April) Y/Y - 1.0%
18:00 USA FOMC meeting minutes (30.04)
23:50 Japan Trade balance (April) unadjusted, trln - 1.12