The New York attorney general's office is probing the relationship between Fidelity Investments and Goldman Sachs Group Inc in connection with the sale of auction-rate securities, The Wall Street Journal reported.

The oil company Petrochina Co Ltd reported first-half net profit fell 34.5%, amid rising losses in its refining business mainly due to Chinese domestic price controls.

The oil company ConocoPhillips is expected to sell the remainder of its 600 company-owned gasoline stations to closely held PetroSun West for $800M, exiting low-margin U.S. retail-gasoline sales, to focus on finding new supplies of crude.

Citigroup downgraded the shares of the parent of American Airlines - AMR Corporation, the world's largest carrier, to “sell” and said ``significant risks remain'' for U.S. carriers.

The stock market extends its recent advance as crude prices (+0.6%, $116.96) give up the majority of their 2.9% advance.
Despite the retreat in oil prices, energy stocks are still holding onto a decent gain of 0.9%. Refiners (+4.7%) are up the most, as refining companies make a larger profit when the spread between gasoline and crude prices widens.
All ten sectors are posting a gain, led by financials (+1.8%) and telecom (+1.8%). Consumer staples (+0.4%) and healthcare (+0.1%) are underperforming on a relative basis.

The euro rose from a six-month low versus the dollar as European Central Bank council member Axel Weber said discussion about a reduction in interest rates is ``premature'' and crude oil prices increased for a third day.
The currency also advanced on speculation its largest monthly decline against the greenback since its 1999 debut was too big to sustain. The dollar gained versus the yen as orders for U.S. durable goods unexpectedly rose last month.
``In order for the euro to go lower, the market has to see an indication of ECB rate cuts, which require inflation to come lower,'' said Matthew Kassel, director of proprietary trading at ING Financial Markets LLC in New York. ``We are finding equilibrium.''
The euro advanced as traders reduced speculation that the ECB will cut its 4.25 percent main refinancing rate next year. The implied yield on the Euribor futures contract expiring in September 2009 rose 14 basis points, or 0.14 percentage point, to 4.46 percent, after falling 6 basis points yesterday. The yield averaged 18 basis points above the ECB's benchmark from 1999 to August 2007.
Crude oil for October delivery rose 1.5 percent to $118 a barrel on forecasts Tropical Storm Gustav will strengthen as it enters the Gulf of Mexico, home to 26 percent of U.S. production.
The Dollar Index dropped even as the Commerce Department reported that bookings for U.S. goods made to last several years increased 1.3 percent in July after a revised gain of the same amount in the previous month. The median forecast of economists was for no change in durable goods orders.
The euro has fallen 8 percent from a record of $1.6038 set on July 15 as the European economy shrank in the second quarter and crude oil declined 20 percent from its all-time high reached last month. The currency has dropped 5.8 percent against the dollar in August, the biggest monthly decline since the European currency began trading.

Trading around $1.4675 and near US session lows of $1.4665 seen in a brief lurch lower just ahead of the European close. Flows described as light, the dollar's progress from here probably contingent upon the performance of dollar-yen around the Y110.00 level, a trader says. Dip to lows in euro flushed known bids and stops around the $1.4670 area and leaves room to $1.4635 area of overnight lows where some demand interest will materialize.

"A somewhat discordant note was struck by the year-over-year change in the ratio of shipments to inventories, which deteriorated slightly. We have found this to have leading properties for the manufacturing sector; this could indicate some weakness in the manufacturing sector ahead."

Investors seemed to take a measured response to oil prices, which spiked following a weak inventory report and in response to Tropical Storm Gustav, which headed for the Gulf Coast.
Orders for big-ticket manufactured goods jumped for a second straight month, the government reported Wednesday. Orders rose 1.3% in July, easily outpacing the 0.1% gain economists were expecting, on average. The rise was in line with the upwardly revised 1.3% increase reported in June.
The strength was largely due to a rise in demand for commercial aircraft, as well as for motor vehicles. Experts don't expect demand for autos to stay strong, considering the tough industry conditions. A category of the report seen as a proxy for business spending also rose soundly, seeing its best results in three months.
While the strong durables report was a positive, investors remained concerned about the spike in oil prices as Tropical Storm Gustav neared the Gulf of Mexico and U.S. oil facilities.
U.S. light crude oil for October delivery rose $2.64 to $118.91 a barrel on the New York Mercantile Exchange. Investors also took in the weekly inventory report, which showed a surprise drop in crude supplies and a bigger-than-expected decline in gas supplies.
In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.82% from 3.77% late Tuesday. Prices and yields move in opposite directions.
COMEX gold for October delivery rose $4.50 to $828.70 an ounce.

The Department of Energy just reported that crude oil inventory levels for the week ended Aug. 22 fell 177,000 barrels. Analyst forecast an increase of 1.1 million barrels. Gasoline stockpiles fell 1.2 million barrels. Crude prices were up 1.8% to $118.31 per barrel just prior to the release.
The major indices had rebounded into positive territory thanks to mostly broad-based buying interest and then hold near highs upon the release of the energy data. Nine of the ten sectors are posting a gain. Energy (+1.5%) and telecom (+1.4%) are leading the way. Only healthcare (-0.2%) remains in the red.

"the resilience of capital goods spending in face of tight credit conditions, a poor growth outlook and declining business confidence continues to surprise" but suggests exports will be cut by lower growth overseas.

"U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.1 million barrels from the previous week. At 305.8 million barrels, U.S. crude oil inventories are in the middle of the average range for this time of year.

Cable pushes down to $1.8415, with reported Eastern European stops sub $1.8425 targeted and triggered, one trader reports. Bids seen placed toward $1.8400, a break below to open a deeper move back toward lows at $1.8370.

"Although exports are booming, construction and motor vehicles are very weak. Therefore, it is too early to tell if this is a change in trend."

Futures rebound to session highs on the release of a better-than-expected durable goods report: S&P futures vs fair value: +3.1. Nasdaq futures vs fair value: +6.3. Just reported, July durable goods orders rose 1.3% month-over-month, compared to the expected unchanged reading. Excluding transportation, orders rose 0.7%, versus the expected 0.7% decline. Meanwhile, Crude oil futures (+1.7%, $118.27) climb higher as the National Oceanic and Atmospheric Association says that tropical storm Gustav is on track to hit Louisiana early Monday as a category four hurricane.
The Energy Information Administration and the American Petroleum Institute are slated to release their weekly report on crude oil inventories and gasoline supplies at 14:35 GMT. A survey from energy research firm Platts estimates that crude inventories will rise by 1.5 million barrels and gasoline stocks will drop by 2.8 million barrels.

Surges to Y109.50 area in the wake of the durable goods data, the pair largely reversing overnight losses and absorbing offers and stops clustered around Y109.40. Further offers seen at Y109.90.

The dollar fell from a six-month high against the euro and retreated versus the yen before a government report that may show U.S. durable goods orders stalled in July.
Euro extended its gains as ECB WEBER said that EMU economy to be robust after dry spell. Не also does not expect inflation to slow with weaker growth and thinks, that ECB rates more accomodative than neutral.
The U.S. currency also declined from a two-year high against the British pound on concern credit-market losses will spread after the Federal Deposit Insurance Corp. said the number of problem banks increased 30 percent to the most in five years. The dollar, which advanced 7.5 percent from a record low versus the euro on July 15, also slid as oil rose for a third day.
``The dollar looks overbought given its recent sharp gains,'' said Michael Klawitter, a currency strategist in Frankfurt at Dresdner Kleinwort, the investment bank owned by Allianz SE, Europe's biggest insurer. ``The market has also become too complacent about dollar risks and the FDIC's warning on further bank failures serves as a reminder that the outlook for the economy isn't so great.''

EUR/USD having got support at $1.4670 gained ahead of the US opening to $1.4770. Offers $1.4790, $1.4800/10. Bids $1.4670.

Orders ex transport were +0.7% (up in 4 of last 5 mos) and ex defense +2.8%, also showing recovery.

Moving back above Y109.00 ahead of the US data, though so far the move comes with a lack of momentum with offers in the Y109.20/30 area untested on this move. Stops are noted through Y109.40, with a break exposing the Asian high at Y109.73.

Squeezes up to stg0.7995, as cable struggles to keep in step with euro-dollar react gains, following hawkish comments from ECB Weber. Offers seen placed between stg0.8000/05, a break above to open a move on toward stg0.8015/20.

Airline and automakers impacted by recovery in crude oil prices and housebuilders and financials also weaker. Natixis, announced that it is planning a E3.7bln rights offer, with report in La Tribune saying the bank may offer new shares at a discount of between 30-40%, citing an unidentified source. Also noted is report that the Federal Deposit Insurance Corporation (FDIC), may have to tap the Treasury for funds to carry it through an anticipated wave of bank failures. CAC-40 is down 58pts (-1.2%), Xetra-DAX is down 86pts (-1.2%) and FTSE-100 is down 33pts (-0.60%).

- ECB's July rate hike was aimed at bringing CPI below 2.0% in around 18 months.

The rate currently holding back around earlier Asian highs of $1.4744. Offers between $1.4745/55 have been filled and stops near $1.4760 get absorbed. A break higher to open a move on toward $1.4800/10.

- ECB inflation forecasts may be revised up slightly for 2008-09
- Must assure collateral framework not abused
- Aim to take decision on collateral framework in fall (

The dollar fell from a six-month high against the euro and retreated versus the yen before a government report that may show U.S. durable goods orders stalled in July.
The U.S. currency also declined from a two-year high against the British pound on concern credit-market losses will spread after the Federal Deposit Insurance Corp. said the number of problem banks increased 30 percent to the most in five years. The dollar, which advanced 7.5 percent from a record low versus the euro on July 15, also slid as oil rose for a third day.
``The dollar looks overbought given its recent sharp gains,'' said Michael Klawitter, a currency strategist in Frankfurt at Dresdner Kleinwort, the investment bank owned by Allianz SE, Europe's biggest insurer. ``The market has also become too complacent about dollar risks and the FDIC's warning on further bank failures serves as a reminder that the outlook for the economy isn't so great.''
The euro may rise to between $1.4800 and $1.4850 over the next couple of days, Klawitter said.
Bookings for U.S. goods made to last several years were unchanged in July, compared with a gain of 0.8 percent in June. The Commerce Department report releases the figures at 1230GMT. Personal spending rose 0.2 percent, less than half the 0.6 percent increase in June, a report may show Aug. 29, according to a separate survey.
``The prospects for the U.S. economy are still poor and it will continue to slow,'' said Katie Dean, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``There's not a lot of reasons to own dollars.''

-- ECB rates more accomodative than neutral.

Resistance 3: Y111.80
Resistance 2: Y110.70
Resistance 1: Y110.30
Current price: Y108.85
Support 1: Y109.00
Support 2: Y107.70
Support 3: Y106.60

Comments: USD/JPY remains under 7-months highs Wednesday with techs hasn't changed much. Strong support comes near Monday’s lows on Y109.00 with a break under opens the way to channel support line from Aug 15 at Y107.70. Key support is near channel line from Jul 16 at Y106.60. Resistance is near Y110.10/30 (Monday’s high and channel line from Aug 15), with a break above will target Aug 15 highs on Y110.70. Strong resistance remains at highs 2008 on Y111.80/90.

Resistance 3: Chf1.1240
Resistance 2: Chf1.1080
Resistance 1: Chf1.1000
Current price: Chf0.0952
Support 1: Chf1.0920
Support 2: Chf1.0880
Support 3: Chf1.0820

Comments: In general, USD/CHF holds within the upward channel from Jul 16, limited today by Chf1.0880/Chf1.1240 (key support/resistance respectively). Support is around Chf1.0920 (Monday’s low). Below correction may widen to channel support line on Chf1.0880 with a break under accelerates to last week’s lows on Chf1.0820. Minor resistance comes at session highs near Chf1.1000/10 with stronger – on Tuesday’s high at Chf1.1080/85 (trend resistance line from Mar passes here too). Above key resistance comes at Chf1.1240 (the upper bound of the channel from Jul 16).

Resistance 3: $1.8660
Resistance 2: $1.8580
Resistance 1: $1.8450
Current price: $1.8447
Support 1: $1.8330
Support 2: $1.8240
Support 3: $1.8160

Comments: GBP/USD continues to rebound, challenging strong resistance zone between $1.8440/50 (23.6% Fibo of $1.8800 - $1.8330 decline). Above the target comes at Monday’s high on $1.8580/90 and further – at $.8660. Strong support is around $1.8330 with a break under will strengthen the pressure on pound and widen its losses initially to $1.8240 and then – to Jul 2006 lows on $1.8160/70.

Resistance 3:$1.4880
Resistance 2: $1.4800
Resistance 1: $1.4740
Current price: $1.4716
Support 1: $1.4680
Support 2: $1.4560
Support 3: $1.4440
Comments: Despite EUR/USD sell-off in EU trade Tuesday amid the Ifo institute's confidence index fell to three-years lows in August (94.8 versus the median 97.2), the rate managed to cover the most of losses till the NY close. Minor resistance is around session highs on $1.4740 with a break above will open the way to Monday’s high on $1.4800 and then – to strong resistance near $1.4880/00 (Friday’s high and 23.6% Fibo of $1.6030 - $1.4560 decline). Support is near $1.4680. Below losses may widen to yesterday’s low on $1.4560/70. Key support comes at Feb lows on $1.4440.

EUR/USD: $1.4700, $1.4340, $1.4900
USD/JPY: Y109.10, Y109.20, Y109.95, Y110.00
EUR/JPY: Y161.00, Y161.70/75
GBP/USD: $1.8500
AUS/USD: $0.8575, $0.8640
USD/CAD: C$1.0400

EUR
Bids: $1.4685/75, $1.4660/50
Offers: $1.4740/50

The dollar fell from a six-month high against the euro and dropped versus the yen on speculation weakening U.S. business and consumer spending will delay a Federal Reserve interest-rate increase.
The greenback retreated from a two-year high against the British pound as economists forecast U.S. data this week will show declines in durable goods orders and slowing consumption.

EUR/USD printed high on $1.4745 before retreated to $1.4670. Currently rate rebounds with offers on $1.4750.

Japan's benchmark stock indices ended Wednesday's session lower across the board. The benchmark Nikkei 225 was down 25.75 points, or 0.20%, at 12752.96. The broader-based TOPIX was 5.66 points lower at 1223.69.

Stock market fixing:
Nikkei -99.95 -0.8% 12,778.71
Topix -9.90 -0.8% 1,229.35
FTSE -34.90 -0.63% 5,470.70
CAC +12.68 +0.29% 4,368.55
DAX +43.57 +0.69% 6,340.52
DOW +26.62 +0.23% 11,412.87
NASDAQ -3.62 -0.15% 2,361.97
S&P 500 +4.67 +0.37% 1,271.51
10yr Note -0.0700 -0.018% 3.784%
NYMEX Crude Oil +1.16 +1.01% 116.27
Gold +2.40 +0.29% 828.10

Japan's stocks dropped the most in a week, led by financial companies, after HSBC Holdings Plc said real estate failures will increase bad loans at regional banks.
Fukuoka Financial Group Inc., Japan's second-largest regional lender by assets, and Suruga Bank Ltd. slumped after HSBC cut their ratings. Developer Asahi Homes Co. plunged 28%, its sharpest drop in six years, after its largest shareholder filed for bankruptcy. Shimamura Co. led declines by retailers after reporting slower sales.
Fukuoka Financial slumped 4%. Suruga Bank dropped 3.4%. Nomura Holdings Inc., Japan's largest brokerage, fell 2.1%. Orix Corp., Japan's largest non-bank financial company, lost 2.7%.
Asahi Homes plunged 28%, the biggest drop since September 2002. Parent company Sebon Corp. filed for bankruptcy with debt at 60 times its capital, it said yesterday after markets shut. Bankruptcies among property companies more than doubled to 60 in July from a year earlier, according to Tokyo Shoko Research Ltd.

European stocks rose as U.S. reports that showed consumer confidence climbed more than forecast and home sales rebounded overshadowed concern that the U.K. and German economies are slowing.
UBS AG, the European bank hardest hit by the subprime contagion, gained 1.5%, and Nokia Oyj, the world's biggest mobile-phone maker, climbed 2.9%. Alcatel-Lucent SA, the world's largest supplier of fixed-line phone networks, advanced 4.7% as the euro's drop to a six-month low against the dollar boosted the value of European companies' overseas sales.
UBS, the biggest Swiss bank, gained 1.5%. Nokia rallied 2.9%.
Earlier today, the Munich-based Ifo institute said its business climate index declined to 94.8 in August from 97.5 the previous month. Economists had predicted a drop to 97.2. German consumer confidence sank to the lowest in more than five years as soaring energy prices sapped purchasing power and the economic outlook deteriorated, another report showed today.

Stocks ended mixed on Tuesday after Wall Street moved in opposition to crude prices for most of the session and a slew of housing and economic reports left markets at a draw.

Dollar fell Tuesday after Aug FOMC’s minutes hasn’t surprised the market.
Earlier euro came under pressure after a report showed German business confidence worsened more than forecast in August. The Ifo institute's German business confidence index declined to 94.8, the lowest level in three years, from 97.5 in July. Economists expected a drop to 97.2.
The pound declined to its lowest level since July 2006. Data this week may show U.K. home prices fell by the most in almost two decades.
The yen declined against the dollar on speculation Japanese pension funds and institutional investors sold the currency to increase their holdings of Treasuries.

Resistance 3: Y111.80
Resistance 2: Y110.70
Resistance 1: Y110.30
Current price: Y109.25
Support 1: Y109.00
Support 2: Y107.70
Support 3: Y106.60
Comments: USD/JPY remains under 7-months highs Wednesday with techs hasn't changed much. Strong support comes near Monday’s lows on Y109.00 with a break under opens the way to channel support line from Aug 15 at Y107.70. Key support is near channel line from Jul 16 at Y106.60. Resistance is near Y110.10/30 (Monday’s high and channel line from Aug 15), with a break above will target Aug 15 highs on Y110.70. Strong resistance remains at highs 2008 on Y111.80/90.

Resistance 3: Chf1.1240
Resistance 2: Chf1.1080
Resistance 1: Chf1.1000
Current price: Chf0.0965
Support 1: Chf1.0920
Support 2: Chf1.0880
Support 3: Chf1.0820
Comments: Dollar weakening Wednesday after yesterday’s FOMC minutes hasn’t surprised the market. Today Durable goods orders report is due to come (at 12:30 GMT). Data will provide brighter picture on consumer activity and economic health. In general, USD/CHF holds within the upward channel from Jul 16, limited today by Chf1.0880/Chf1.1240 (key support/resistance respectively). Support is around Chf1.0920 (Monday’s low). Below correction may widen to channel support line on Chf1.0880 with a break under accelerates to last week’s lows on Chf1.0820. Minor resistance comes at session highs near Chf1.1000/10 with stronger – on Tuesday’s high at Chf1.1080/85 (trend resistance line from Mar passes here too). Above key resistance comes at Chf1.1240 (the upper bound of the channel from Jul 16).

Resistance 3: $1.8660
Resistance 2: $1.8580
Resistance 1: $1.8440
Current price: $1.8447
Support 1: $1.8330
Support 2: $1.8240
Support 3: $1.8160
Comments: GBP/USD continues to rebound, challenging strong resistance zone between $1.8440/50 (23.6% Fibo of $1.8800 - $1.8330 decline). Above the target comes at Monday’s high on $1.8580/90 and further – at $.8660. Strong support is around $1.8330 with a break under will strengthen the pressure on pound and widen its losses initially to $1.8240 and then – to Jul 2006 lows on $1.8160/70.

Resistance 3:$1.4880
Resistance 2: $1.4800
Resistance 1: $1.4720
Current price: $1.4697
Support 1: $1.4640
Support 2: $1.4560
Support 3: $1.4440
Comments: Despite EUR/USD sell-off in EU trade Tuesday amid the Ifo institute's confidence index fell to three-years lows in August (94.8 versus the median 97.2), the rate managed to cover the most of losses till the NY close. Minor resistance is around session highs on $1.4720 with a break above will open the way to Monday’s high on $1.4800 and then – to strong resistance near $1.4880/00 (Friday’s high and 23.6% Fibo of $1.6030 - $1.4560 decline). Support is near $1.4640. Below losses may widen to yesterday’s low on $1.4560/70. Key support comes at Feb lows on $1.4440.

High Low Close
EUR/USD 1.4758 1.4569 1.4642
USD/JPY 109.93 109.11 109.65
GBP/USD 1.8531 1.8329 1.8380
USD/CHF 1.1086 1.0951 1.1000

EUR/JPY 161.48 159.91 160.56
EUR/GBP 0.7977 0.7936 0.7963
GBP/JPY 202.83 200.71 201.57
GBP/CHF 2.0348 2.0207 2.0219

Change % Change Last
Nikkei -99.95 -0.8% 12,778.71
Topix -9.90 -0.8% 1,229.35
FTSE -34.90 -0.63% 5,470.70
CAC +12.68 +0.29% 4,368.55
DAX +43.57 +0.69% 6,340.52
DOW +26.62 +0.23% 11,412.87
NASDAQ -3.62 -0.15% 2,361.97
S&P 500 +4.67 +0.37% 1,271.51
10yr Note -0.0700 -0.018% 3.784%
NYMEX Crude Oil +1.16 +1.01% 116.27
Gold +2.40 +0.29% 828.10

06:00 Germany Import prices (July) 0.7% 1.5%
06:00 Germany Import prices (July) Y/Y 9.3% 8.9%
06:00 Germany Import prices excluding oil (July) Y/Y - 2.5%
07:30 Italy Consumer confidence (August) 95.9 95.8
12:30 USA Durable goods orders (July) 0.2% 0.8%
12:30 USA Durable goods orders excluding transportation (July) - 2.0%
12:30 USA Durable goods orders excluding defence (July) - 0.1%
12:40 Germany CPI (August) preliminary -0.3% 0.6%
12:40 Germany CPI (August) preliminary Y/Y 3.1% 3.3%
12:40 Germany HICP (August) preliminary Y/Y 3.3% 3.5%