Energy stocks push major indexes higher

NEW YORK (AP) — Energy companies drove major indexes higher Monday after Alpha Natural Resources made a bid for rival coal producer Massey Energy and Exxon Mobil reported strong earnings.

Alpha offered $7.1 billion in cash and stock for Massey and the nation’s fourth-largest coal producer by revenue accepted it. That sent Massey’s stock up 11 percent in early trading, making it the best performer in the Standard & Poor’s 500 index.

Other major coal companies, including Consol Energy Inc. and Peabody Energy Corp., rose by more than 2 percent.

The Massey deal suggests “maybe coal isn’t dead,” said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group. It also raises hopes for similar deals in the future.

Energy stocks also got a lift after Exxon Mobil Corp. reported its most profitable quarter since the record third quarter of 2008. That sent its shares up about 1 percent in early trading.

The Dow Jones industrial average rose 11, or 0.1 percent, at 11,833. The Standard & Poor’s 500 index rose 3, or 0.3 percent, at 1,279. The Nasdaq composite index fell 3, or 0.1 percent, at 2,683.

Treasury prices fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 3.35 percent from 3.33 percent late Friday.

Investors were also encouraged after the Commerce Department reported that Americans increased their spending sharply in December. Consumer purchases for all of 2010 rose at the fastest pace in three years.

But the unrest in Egypt continued, and concerns remained about Egypt’s impact on oil prices, especially if the Suez Canal, a key route for oil tankers and cargo ships, may be closed.

“The market wants to work its way higher,” said Sam Stovall, chief investment strategist of Standard & Poor’s. “The big worry is the unknown — the cascading effects that could occur.”

Oil prices rose 27 cents to $89.61 in morning trading.

Investors will get several additional updates on the economy later in the week, including reports on auto sales, construction spending, factory orders and employment for January.

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World markets sink as protests escalate in Egypt

Escalating protests in Egypt jarred world financial markets today. Stocks fell while the dollar, Treasurys and gold rose as investors sought to reduce their exposure to risk.

The Egyptian government’s response to escalating street protests unnerved investors. The military was deployed in an effort to restore order and the headquarters of the ruling party was on fire. Thousands of people defied a curfew, and Internet and cell phone service has been cut off.

Earlier, riot police fired tear gas, rubber bullets and used water cannons to disperse crowds that had gathered in the largest challenge to Egyptian president Hosni Mubarak’s thirty-year rule. Investors have been concerned that the collapse of the Tunisian government Jan. 14 could lead to challenges to other authoritarian governments in the Middle East.

“The safety trade is back,” said Jeffrey Frankel, president of broker Stuart Frankel & Co. “Gold is up. Oil is up. Anything related to overseas is getting hit.”

Prices of Treasury bonds, considered one of the safest assets, rose sharply. The yield on the benchmark 10-year Treasury note fell to 3.32 percent from 3.38 percent late Thursday. Bond yields fall when their prices rise.

The dollar rose 0.6 percent against an index of six other currencies as investors sought safety. Gold rose 1.6 percent to $1,339.50 and crude oil rose 4.4 percent to $89.42 a barrel.

The Egyptian stock market was closed for a holiday. It fell 10.5 percent Thursday.

The MSCI World Market index, the broadest measure of the world’s stock markets, slumped 1.3 percent.

“Traders are watching this flare-up in the Middle East and using it as a reason to take profits,” said Doug Godine, managing director at Signal Hill, an investment bank. Prior to this week, the Dow Jones industrial average had been up for eight straight weeks.

Disappointing earnings reports also helped send stocks lower. Ford Motor Co sank 12 percent after its earnings fell short of Wall Street’s projections. Amazon.com Inc. fell 8.5 percent after reporting that higher costs cut down its profit margins. Microsoft Corp. lost 4 percent after it said that the profitability of its Windows division was falling.

The Dow Jones industrial average fell 138 points, or 1.2 percent, to 11,852 in afternoon trading.

The Standard & Poor’s 500 index fell 18, or 1.4 percent, to 1,281. All 10 company groups that make up the S&P index fell.

The Nasdaq composite index fell 61, or 2.2 percent, to 2,694. The index was not updated nearly an hour after the market opened due to technical problems.

A lower than expected report on the U.S. economy helped lead to a market sell-off as well. The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 3.2 percent between October and December. That was below the 3.5 percent that analysts had forecast.

Sara Lee Corp. fell 2.2 percent after announcing a plan to split into two companies. One, a food and retail business, will keep the Sara Lee name and also operate the Jimmy Dean and Hillshire Farms businesses. The other, which has yet to be named, will hold the current company’s beverages and baked goods lines. The company had considered selling the whole business but was unable to get a satisfactory price for it.

The Associated Press NEW YORK — Stocks are rising in early trading after a report showed that the U.S. economy is growing.

The Commerce Department said Friday that U.S. gross domestic product grew at an annual rate of 3.2 percent between October and December. That’s up from 2.6 percent in the previous quarter.

Microsoft Corp. rose 2.4 percent after its fourth quarter earnings beat analysts’ estimates. But Ford Motor Co. lost 7 percent after its revenues fell short of Wall Street’s projections.

The Dow Jones is up 7 points, or 0.1 percent, to 11,997 in morning trading. The S&P 500 is up 1, or 0.1 percent, to 1,300. The Nasdaq composite is flat at 2,755.

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Durable goods orders rebound in May

WASHINGTON (AP) — U.S. businesses boosted their orders for machinery, electronics products and airplanes in May. The pickup suggests manufacturing is rebounding after the Japan crises made parts scarce and slowed production of some factory goods temporarily.

Orders for long-lasting manufactured products increased 1.9 percent in last month, the Commerce Department said Friday. A key category that signals business investment plans rose 1.6 percent.

The stronger demand follows a revised 2.7 percent decline in April that was largely the result of supply disruptions caused by Japan's March 11th earthquake and tsunami. The inability to get critical component parts in such industries as autos and electronics slowed U.S. manufacturing.

"The rebound in orders for new durable goods in May will help ease any fears that the economy is headed for a double-dip recession," said Paul Ashworth, chief U.S. economist at Capital Economics.

But Ashworth said the new report did not change his belief that "economic growth has slowed sharply over the past few months."

Orders for autos and auto parts rose 0.6 percent in May after having fallen 5.3 percent in April. The rebound in May in both autos and broader categories supports the view that the April lull was temporary.

A wide range of industries showed strength in May. Businesses boosted their orders for machinery 1.2 percent and demand for computers rose 1.3 percent. Communications equipment jumped 3.6 percent increase.

Businesses boosted demand for transportation products 5.8 percent. Much of that increase reflected a 36.5 percent surge in orders for commercial aircraft, a very volatile industry which had reported a big decline in production in April. Excluding the volatile transportation category, orders would have risen 0.6 percent in May after dropping 0.4 percent in April.

The capital goods category excluding aircraft is viewed as a proxy for business investment. It rose 1.6 percent after a 0.8 percent drop in April. Economists believe this category will show strength as companies respond to a one-year tax break aimed at spurring capital spending.

Manufacturing has been one of the strongest sectors of the economy since the recession official ended two years ago. However, there are concerns that the production pace could slow in coming months as businesses decide to scale back their restocking of inventories.

A closely watched gauge of manufacturing activity from the Institute for Supply Management showed manufacturing dipped to 53.5 in May from 60.4 in April. Readings above 50 indicate manufacturing is continuing to expand. Regional manufacturing surveys put out by the Federal Reserve Banks of New York and Philadelphia also showed recent weakness.

But as production returns to more normal levels in Japan, economists are forecasting that disruptions to factory production in the United States will ease in coming months.

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Stocks dip as job market worries continue

NEW YORK—What began with a steep drop in the stock market ended with a modest decline Thursday. The Dow Jones industrial average lost just 60 points after being down nearly 240 points earlier in the day.
A jump in the number of people applying for jobless benefits and plummeting oil prices drove stocks lower at the market open. By 11 a.m., the Dow was down 234 points. Then came late afternoon reports that Greece may have reached a deal for a new austerity plan. The Dow made up nearly 100 points between 2:45 and 3 p.m. alone.

The Dow finished with a loss of 59.67 points, or 0.5 percent, to 12,050. The Standard & Poor's 500 index, down as many as 24 points, closed down just 3.64, or 0.3 percent, to 1,283.50.

Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the economy may last longer than previously thought.

As a result, the stock market has fallen six of the last seven weeks. The S&P 500 is down 5.9 percent from its high for the year of 1363.61 in April.

"This is no longer looking like a small soft patch. It's beginning to look more like quicksand," said Lawrence Creatura, a stock portfolio manager at Federated Investors.

The continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.

"400,000 is the magic number and we've been above it for 11 weeks," Creatura said.

Energy companies like Exxon Mobil and Chevron Corp. led the market downward after oil prices tumbled nearly 5 percent. Oil dropped after the International Energy Agency said 60 million barrels of oil would be released from reserves to make up for the loss of Libyan exports. Oil prices had spiked following unrests in Middle East and North Africa, raising concerns that higher fuel costs would slow the world economy.

Companies like Netflix, Priceline.com and others in the consumer discretionary industry were mostly up. Overall, the group rose 0.4 percent. Investors are betting that a drop in oil costs could lead consumers to spend more money on things like movies, restaurants and clothing. Netflix was up 2.9 percent. Chipotle Mexican Grill gained 2.2 percent.

Companies that benefit from lower fuel costs also rose. Airline stocks like United Continental Holdings Inc. and AMR Corp, the parent company of American Airlines, rose more than 4 percent.

The two indexes most tied to economic growth fared better than the broader market. The tech-focused Nasdaq composite index was up 17.56, or 0.7 percent, to 2,686.75. And the Russell 2000 index of small companies gained 0.4 percent. For the week, both are up 2.7 percent.

"We're starting to see that the supply-chain disruptions caused by the tragedy in Japan are easing a bit, and the biggest beneficiaries of that are technology and auto-supply companies" which tend to be smaller businesses, said Burt White, the chief investment officer at LPL Financial.

Among the most active stocks, Bed Bath & Beyond gained 5.3 percent after the home furnishings retailer posted a 31 percent jump in income. The company also raised its earnings forecast for the rest of the year, in part because of cost controls it has in place. ConAgra Foods Inc. fell 0.2 percent. The owner of Slim Jim and Hebrew National brands cut its earnings estimate for the current quarter.

Government bond prices were higher as traders shifted money into investments that are considered safe, pushing long-term interest rates lower. The yield on the 10-year Treasury note sank to 2.90 percent, near its low mark for the year. Bond yields fall when their prices rise.

Even so, portfolio manager Creatura says that the recent market slide could represent a chance to pick up some stocks on the cheap. Current prices already reflect reaction to most of the economy's problems, he says. "The most fearful times can be the best times to invest," he said. "It's not only what you buy, it's the price you pay that matters."

Three stocks fell for every two that rose on the New York Stock Exchange. Volume was slightly above average at 4.4 billion.

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Obama Says Gay Couples Deserve Same Rights as All

Treading carefully, President Barack Obama praised New York state lawmakers who were debating landmark legislation Thursday to legalize gay marriage, saying that's what democracy's all about. But as expected, the president stopped short of embracing same-sex marriage himself, instead asking gay and lesbian donors for patience.

"I believe that gay couples deserve the same legal rights as every other couple in this country," the president said at a Manhattan fundraiser, his first geared specifically to the gay community. Coincidentally, the long-planned event occurred just as lawmakers in Albany were debating legislation that would make New York the sixth and by far the largest state to legalize gay marriage.

That served to spotlight the president's own views on same-sex marriage, a sore point with gay supporters who've otherwise warmed to Obama. The president has said his views are "evolving," but for now he supports civil unions, not same-sex marriage.

Obama said progress will be slower than some people want, but he added that he was confident that there will be a day "when every single American, gay or straight or lesbian or bisexual or transgender, is free to live and love as they see fit.

"Traditionally marriage has been decided by the states and right now I understand there's a little debate going on here in New York," he said to laughter. New York's lawmakers, he said, are "doing exactly what democracies are supposed to do."

The lawmakers ended their session late Thursday in Albany without voting on the bill.

As Obama spoke a handful of people shouted out "marriage!" And Obama said, "I heard you guys." He never directly mentioned gay marriage.

Obama said there were those who shouted at him at events about other causes of the gay community, such as the need for anti-hate crimes legislation and for the repeal of the "don't ask, don't tell" ban on openly gay military service, and both of those have since been achieved.

Obama also has won favor by instructing the Justice Department to stop defending in court a law defining marriage as between a man and a woman.

Obama told of receiving a letter last year from a teenager in a small town. He said the boy was a senior in high school who was gay and was afraid to come out. The boy wondered to the president why gays shouldn't be equal like everyone else.

"So, yes, we have more work to do," Obama said. "Yes, we have more progress to make. Yes, I expect continued impatience with me on occasion."

He said teenagers such as the one who wrote to him "remind me that there should be impatience when it comes to the fight for basic equality. We've made enormous advances just in these last two and half years. But there's still young people out there looking for us to do more."

In a direct appeal for votes, Obama said: "With your help, if you keep up the fight, if you will devote your time and your energies to this campaign one more time, I promise you we will write another chapter in that story. ... I'll be standing there, right there with you."

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Casey Anthony prosecution to rest Wednesday

A forensic expert said Tuesday that heart-shaped stickers were found in Casey Anthony's bedroom but didn't testify whether the items were linked to a similar outline observed on duct tape on the body of the Florida woman's slain 2-year-old daughter.

Even so, the stickers shown at the 25-year-old's murder trial over the objection of defense lawyers were powerful images just before the prosecution wraps up its case. Prosecutors plan to rest Wednesday after some last-minute housekeeping items.

The defense is expected to call its first witness Thursday, assuming a standard motion it plans to file asking for the judge to throw out the case is denied.

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The prosecution detailed during several weeks of testimony in the trial, which has gained national attention, a largely circumstantial case. Prosecutors have said the girl was murdered and speculated she was suffocated, though a medical examiner testified the means by which the death occurred were undetermined.

Prosecutors have been able to build their case on Casey Anthony's conduct and the lies she told about her daughter's whereabouts during the month Caylee Anthony was missing. Soon it will be the defense team's turn to counter the evidence. The defense maintains the girl drowned in a pool.

Tuesday's testimony included discussion of some of the physical evidence investigators found.

Crime scene investigator Alina Burroughs told jurors the heart-shaped stickers were found in a box and a scrapbook, along with a letter addressed to Caylee Anthony.
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Another investigator previously testified she noticed the outline of a heart on one of three pieces of duct tape while examining it under ultra-violet lighting. There were no pictures taken of what she saw, though.

Neither investigator conclusively linked the stickers to the outline. Also, the description of the outline appeared to be a different size than the stickers found in the defendant's bedroom.

FBI quality control manager Catherine Theisen testified that a hair strand found in the trunk of Casey Anthony's car showing signs of human decomposition was a DNA match to hairs found with toddler Caylee Anthony's decomposed skull. The trunk hair and skull hair also were DNA matches to skin cell samples taken from Casey Anthony.
Also Tuesday, the defendant's mother, Cindy Anthony, took the stand for the third time.
Story: FBI examiner found heart shape on Caylee Anthony duct tape

She started crying as the prosecutor asked her about a photo of Caylee Anthony in which the child was wearing the shirt found with her remains in December 2008. Cindy Anthony said the first time she ever saw that shirt was when she gave her deposition after the child went missing.

Later, a tattoo artist testified that Casey Anthony had a tattoo of the words "Bella Vita," or "beautiful life" in Italian, etched on her back on July 2, 2008. She returned on July 15 and scheduled another appointment for a few days later. Her daughter was reported missing on July 15, 2008, though, according to the tattoo artist, Casey Anthony told him she planned to bring her daughter in with her during her next appointment.

"She didn't seem upset or anything. She was happy for the most part," the tattoo artist, Bobby Williams, told jurors.

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US Open 2011: Rory McIlroy goes into final round of at Congressional with massive eight-shot lead over Y.E Yang

Record-breaking Rory McIlroy goes into the final round of the US Open today with a massive eight-shot lead over South Korea’s Y.E Yang.  

 Lee Westwood and Jason Day both fired 65s for a share of third place but it is McIlroy who continues to dominate the tournament, his 68 taking him to 14 under par, by two shots the lowest aggregate in the history of the event.

Watched by his father Gerry in the gallery, McIlroy was brilliantly efficient rather than spectacular, extending his overnight lead by two.

Playing alongside Yang, McIlroy rolled in four straight pars before his first birdie at the fifth. His bogey at the par-3 tenth was the only blight on his card.

The delayed start meant that McIlroy was hanging around until ten minutes to four in the afternoon, time enough, according to his manager, Andrew Chandler, to fire up the lap top and answer his emails before leaving his rented house for the drive to the course. His arrival triggered the first signs of McIlroy mania with the autograph hunters thrusting out hopeful pens.

There was hysteria, too, in the locker room with some of his colleagues drawing comparisons with Tiger Woods. “He’s that good,” Graeme McDowell, the defending champion and fellow Northern Irishman, said. Westwood must wish he could have Thursday back. His 65 yesterday was ten shots better than his opening round. After a quiet outward nine the world No 2 exploded down the home stretch with a hat-trick of birdies and an eagle in successive holes. 

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Paul wins straw poll, Huntsman 2nd

Rep. Ron Paul of Texas has won the presidential straw poll at the Republican Leadership Conference.
The perennial libertarian candidate won 612 votes from the gathering that brings presidential candidates, party elders, grassroots activists and donors. Coming in second place was former Utah Gov. Jon Huntsman, who served three Republican administrations and then worked as President Barack Obama's ambassador to China.
Huntsman got 382 votes, but did not address the conference. Aides said he was ill.
His wife, Mary Kaye Huntsman, came to meet privately with activists.

Rep. Michele Bachmann of Minnesota, a tea party darling, collected 191 votes. Former pizza executive Herman Cain won 104 votes and former Massachusetts Gov. Mitt Romney skipped the event and picked up 74 votes. Former House Speaker Newt Gingrich got 69 votes.

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This week on the global markets – in graphs

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FTSE today: market report live The blue-chip index slipped almost 2pc on Friday, dragged down by mining and commodity stocks.

The FTSE 100 fell 90.54 - or 1.55pc - to 5765.80, while the wider FTSE 250 market dipped 125.60 to 11786.02 after Chinese trade data showed an unexpected drop in copper imports last month.

The blue-chip index was down 0.22pc at 5843.52 during midday trading with troubled resources giant Eurasian Natuaral Resources slipping a further 2.81pc.

Overnight reports suggested that a third independent director is set to quit the board of ENRC over concerns about corporate standards at the Kazakh miner. Mehmet Dalman's resignation will leave only one other independent director on the board.

Elsewhere, ITV retreated 2pc after Berenberg launched it coverage of the braodcaster with a sell rating and price target of 69p.

At the other end of the table,Johnson Matthey, the chemicals and platinum group, remained the biggest riser, up 2.62pc.

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Wall Street adds to losing streak after Bernanke speaks

Stocks extended a losing streak for a fifth day on Tuesday on mounting concerns about the economy after bearish comments from Federal Reserve Chairman Ben Bernanke.

The market, which started off on a positive note after the S&P 500 hit a two-month low in the previous session, reversed course to turn negative after Bernanke started speaking. He acknowledged a slowdown in the economy, but offered no suggestion the central bank is considering any further monetary stimulus to support growth.

Bernanke also issued a stern warning to lawmakers in Washington who are considering aggressive budget cuts, saying they have the potential to derail the economic recovery.

"It's not like the market was expecting a positive comment from him, but not quite this negative, either. But I think the impact would be limited. I don't see this carrying over to tomorrow's market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Bernanke indicated the latest bout of weakness probably would not last very long and should give way to some growth in the second half of the year.

A batch of weak economic data recently, especially in the job market, has pushed major indexes below their support levels.

The Dow Jones industrial average .DJI slipped 19.15 points, or 0.16 percent, to end at 12,070.81. The Standard & Poor's 500 Index .SPX declined 1.23 points, or 0.10 percent, to 1,284.94. The Nasdaq Composite Index .IXIC shed 1.00 point, or 0.04 percent, to finish at 2,701.56.

CORRECTION SEEN, BUT NO BEAR

The S&P 500 has fallen 4.2 percent from a month ago. But a veteran chief equity strategist said the three major U.S. stock indexes could fall as much as 10 percent from their May highs, suggesting that a low in the market might be not far off.

Barring unexpected shocks, though, a bear market is unlikely, Tobias Levkovich, the Citigroup strategist, told the Reuters 2011 Investment Outlook Summit in New York.

"I think we are in a correction," said the Canadian-born strategist, whose year-end forecast for the benchmark S&P 500 index is 1,400 points.

A 10 percent drop from the May 2nd intraday peak of 1,370.58 would put the S&P 500 at 1,233.52.

Defensive stocks in the healthcare and utility sectors added to gains after Bernanke's comments, but financials and

info technology, sectors closely related to growth, turned negative. The KBW bank index .BKX which rose 1 percent earlier, ended down 0.2 percent.

Volume was thin with 6.67 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.61 billion.

"The problem for institutions on a day like today is the volume being light. Any concerted effort to raise funds (sell positions) could have a disproportionate impact on pricing as buyers will be on the thin side," wrote Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, in a note to clients.

In company news, International Paper Co (IP.N) launched a $3.3 billion unsolicited offer for rival Temple-Inland Inc (TIN.N). Shares of Temple-Inland shot up 40.4 percent to $29.49, while IP's stock rose 0.4 percent to $29.78. Temple-Inland said it adopted a stockholder rights plan to fend off the hostile takeover.

Advancing stocks outnumbered declining ones on the NYSE by 1,684 to 1,297, while on the Nasdaq, advancers beat decliners by 1,440 to 1,131.

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Wall Street slips for a sixth day on growth concerns

Stocks extended losses for the sixth straight day on Wednesday as investors worried that a slowing economy could deepen the market's retreat.

The latest evidence of a slowdown came in the Federal Reserve's Beige Book, which gives an anecdotal report on the economy. It reinforced Fed chief Ben Bernanke's bearish assessment on growth delivered late on Tuesday.

The market's mood soured when Bernanke gave no hint that the central bank would offer a third round of stimulus to an economy losing steam. The Beige Book said costlier food and energy prices as well as supply disruptions stemming from Japan's earthquake were taking a toll.

Stocks are still up for the year, but the market's recent slide has taken a big bite out of those gains.

The Dow, which on May 2nd was up 10.6 percent for the year when it hit its 2011 closing high, is now up just 4.1 percent.

The S&P 500, which had climbed as much as 8.2 percent for the year at its 2011 closing high on May 2nd, is now up just 1.7 percent. And the Nasdaq, which on May 2nd was up 8 percent for the year when it set its 2011 closing high, is now up only 0.9 percent.

Stocks have come under pressure recently due to a slew of weak economic data, especially in the labor market.

"Investors are re-pricing the slowdown after Bernanke crystallized it," said Jason L. Ware, senior equity research and trading analyst at Albion Financial Group in Salt Lake City, Utah.

On top of that, "the market was hoping for an indication that there may be another round of stimulus but clearly, that's not what they got."

The Fed's $600 billion second round of stimulus, expected to end this month, has been a catalyst for the stock market's advance.

Many of the day's biggest decliners were U.S.-traded Chinese companies after Interactive Brokers Group banned clients from borrowing money to buy some Chinese stocks.

New York-listed shares of Renren Inc fell 13.6 percent to $10.51 and Baidu lost 3.3 percent to $120.67.

Mortgage insurers' shares also fell after MGIC Investment Corp reported disappointing monthly operating statistics.

Shares of MGIC Investment, the biggest mortgage insurer to Fannie Mae and Freddie Mac, fell 20.2 percent to $5.80.

The Dow Jones industrial average dropped 21.87 points, or 0.18 percent, to 12,048.94. The Standard & Poor's 500 Index lost 5.38 points, or 0.42 percent, to 1,279.56. The Nasdaq Composite Index fell 26.18 points, or 0.97 percent, to 2,675.38.

"I think 1,250 is a key level (on the S&P) and, if we get there, likely to provide support for the market, barring any further erosion in the underlying economic data," Ware said.

SHARPER SLIDE FORECAST

Credit Suisse's U.S. equity strategist Doug Cliggott said on Wednesday the S&P 500 could fall roughly 10 percent from its current level, partly due to the approaching end of the Federal Reserve's bond-buying program.

"We would think an index between 1,170 and 1,200 would be a realistic estimate of where we might be headed," Cliggott said at the Reuters Investment Outlook Summit in New York.

His comments followed a bearish tone struck on Tuesday by Citigroup strategist Tobias Levkovich. He said major U.S. stock indexes could fall as much as 10 percent from their May highs. A 10 percent fall is typically described as a market correction.

There were also signs of weakness from corporate America. Communications networking equipment provider Ciena Corp forecast third-quarter revenue below expectations, driving down its stock and others in the sector.

Ciena tumbled 16.2 percent to $20.29, while JDS Uniphase Corp dropped 5.5 percent to $17.40.

Limiting losses, the energy sector rose after talks at the oil cartel OPEC in Vienna broke down without an agreement on a production hike. The S&P 500 energy index rose 0.4 percent, with Exxon Mobil up 1 percent at $80.76.

U.S. crude oil futures rose nearly 2 percent to settle above $100 a barrel.

About 7.45 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 7.6 billion.

Declining stocks outnumbered advancing ones on the NYSE by 2,217 to 784, while on the Nasdaq, decliners beat advancers by 1,920 to 679.

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Toyota forecasts 35 pct profit slide after quake

Toyota Motor Corp forecast a larger-than-expected 35 percent fall in annual profit on Friday and warned the strong yen was making it difficult to justify keeping production in Japan.

The world's largest automaker has struggled to restore output after a massive 9.0 earthquake in March rocked northeastern Japan and forced Toyota and other Japanese automakers to slash output at home and abroad. The ensuing nuclear disaster and power shortages have compounded their woes.

"This is probably another conservative estimate from Toyota, but it's predicting a loss in the fiscal first half so we can tell how serious the damage from the earthquake was," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, adding that shares in the company may fall on Monday.

Toyota said it was looking to ramp up output overseas to claw back lost market share and reiterated its plan to restore output to pre-quake levels by November, helped by a recovery in the supply chain for key parts.

"Once our product supply is back to normal, we can compete with no problem. We have the resources and are fully charged," Toyota's executive vice president, Satoshi Ozawa, said at a briefing in Tokyo.

But Ozawa warned that Toyota was getting hammered by the yen and called on the Japanese government to take action to stem its rise.

The Japanese currency hit a one-month high against the dollar this week and is now about 5 yen stronger than the 85 level it sees as the break even profit for profiting on production in Japan.

Toyota said it expects operating profit to fall 35 percent to 300 billion yen ($3.7 billion) in the financial year to March 2012, well short of the consensus for a 434 billion yen profit in a poll of 23 forecasts by Thomson Reuters I/B/E/S.

The forecast, which the company would have announced in May along with its annual results if not for the earthquake, incorporates a 100 billion yen negative impact from the yen.

"Structural weakness remains for Toyota, as it has a higher portion of domestic production than Honda and Nissan, which makes it vulnerable to the yen's strength," said Park Sang-Won an analyst at Eugene Investment & Securities in Seoul.

Toyota forecast global sales will fall 1 percent to 7.24 million vehicles in the year to March. The figures include sales at truck maker Hino Motors Ltd. and compact car maker Daihatsu Motor Co.

The drop is expected to place Toyota behind General Motors Co and possibly Volkswagen AG in the global vehicle sales rankings this year. Toyota downplayed the possibility.

"We don't see it as necessary to be the largest automaker in the world," Ozawa said. "The most important thing is creating a stable business base."

Toyota said on Friday it expects the dollar to average 82 yen in the current financial year to next March 31, against an averaged currency rate of a 86 yen-per-dollar last year.

Toyota's president, Akio Toyoda, repeatedly said he was committed to keeping production in Japan and protecting jobs.

Ozawa said it was possible that Toyoda was rethinking his position due to the strength of the yen.

"We are in a situation where it its becoming impossible for Japan's manufacturing industry to do businesses," Ozawa said.

"Our president has been saying that he would never want to see Japan's manufacturing fading from view, but he also said recently that he was unable to respond when someone made the comment that Toyota's production should not be handled only in Japan."

Toyota's shares have fallen 7.5 percent since the disaster, underperforming the benchmark Nikkei 225 average, which has lost 6.5 percent. Its shares on Friday rose 0.9 percent to close at 3,300 yen before the company released the profit forecast.

($1 = 80.305 Japanese Yen)

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US STOCKS-Indexes bounce back after six-day losing streakUS STOCKS-Indexes bounce back after six-day losing streak

(Fixes typo in 3rd bullet point)

* U.S. new weekly jobless claims rise, trade gap narrows

* Semiconductor index holds key level

* Equity options put/call ratio closed at 18-month high

* Dow up 1 pct, S&P up 1 pct, Nasdaq up 0.6 pct * For up-to-the-minute market news see [STXNEWS/US] (Updates to late afternoon trade; changes byline)

By Angela Moon

NEW YORK, June 9 (Reuters) - Wall Street turned back a six-day losing streak on Thursday, with the Dow and the S&P 500 bouncing up 1 percent, after data on U.S. exports eased concerns about a stalled economic recovery that had weighed on the market for days.

Investors snapped up beaten-down stocks, especially in growth-related sectors, following days of decline.

A spike in oil prices helped materials and energy stocks to move higher. The S&P materials sector index .GSPM rose 2 percent and the energy index .GSPE gained 1.6 percent. The Morgan Stanley cyclical index .CYC, which is down more than 5 percent in June, rose 1.2 percent.

Several economists said the spike in exports from the United States in April could prompt revisions higher of gross domestic product growth in the second quarter.

But the mood remained fragile as many analysts saw the bounce as temporary and still expected the S&P 500 to retest its March low after a string of data, including the latest payrolls report, provided little room for optimism.

"A test of 1,250 is pretty likely in the next couple of weeks," said John Canally, an investment strategist and economist for LPL Financial in Boston.

Reflecting the bearish sentiment, the daily volume put/call ratio for equity options on the Chicago Board Options Exchange (CBOE) was at an 18-month high as of Wednesday's close, according to data posted on the exchange website, indicating investors are significantly bearish on the stock market. For details, see [ID:nN09151414]

The Dow Jones industrial average .DJI was up 120.14 points, or 1.00 percent, at 12,169.08. The Standard & Poor's 500 Index .SPX rose 13.24 points, or 1.03 percent, at 1,292.80. The Nasdaq Composite Index .IXIC added 16.66 points, or 0.62 percent, at 2,692.04.

The S&P had lost more than 6 percent in the last six days leading up to Thursday, while the Nasdaq had nearly erased its gains for the year.

BUYING OPPORTUNITY

CBOE data showed that put/call ratio on equity options rose to 0.99 on Wednesday, which means 99 puts traded for every 100 calls, the highest ratio since Jan. 15, 2009. The average had been between 0.55-0.70 this year.

The high put/call ration signals investors are actively hedging their bets and setting up for further market declines. But as in other cases, extreme bearishness could also be a contrarian indicator.

"A lot of fear came into the market as investors bought puts," said Jay Shartsis, director of options trading at R.F. Lafferty & Co in New York.

"(But) the high ratio identifies a good buy level for stocks. When a ratio turns this high, from a contrarian view, the risk-reward factor is now significantly skewed to the buy side," Shartsis said.

The CBOE Volatility Index .VIX, Wall Street's so-called fear gauge, fell 7.7 percent to 17.35 on Thursday, the largest daily drop since March 21.

The PHLX semiconductor index .SOX bounced off its 200-day moving average and was holding above 410, a key level that offered strong support in March.

Texas Instruments Inc (TXN.N) shares rose 1.3 percent to $33.09 even after the company cut its earnings and revenue forecasts late on Wednesday. [ID:nN08264072]

Reflecting the appetite for tech stocks, shares of Fusion-io (FIO.N) surged 23.4 percent to $23.45 in their first day of trading -- up from an initial public offering price of $19. Earlier, the stock was up as much as 34.2 percent at a session high of $25.50.

But shares of China-based Taomee Holdings Ltd (TAOM.N) fell 5.8 percent to $8.52 in their stock market debut as U.S.-listed Chinese companies come under more scrutiny following a series of accounting scandals. [ID:nN09113007].

Details of Thursday's economic data showed the U.S. trade deficit narrowed unexpectedly in April as U.S. exports rose to a record and imports from Japan tumbled more than 25 percent.

A separate report showed the number of Americans filing new claims for unemployment benefits rose by 1,000 last week, while continued claims fell more than expected. [ID:nN09117731]. (Additional reporting by Rodrigo Campos in New York and Doris Frankel in Chicago; Editing by Padraic Cassidy)

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John Kelly: Community pride rises as era ends

With each passing week, we're seeing more people getting sentimental about the impending end of the space shuttle program. The shuttles are a cultural icon across the country, and certainly more eyes than ever are on the Space Coast as the last flight approaches.

But cultural icon doesn't really cover the kind of effect they have here in Brevard County. It's so much of what we live and breathe. The number of people who approach me about my work writing about the space program always has amazed me, but the numbers are compounding fast as the spotlight brightens for the shuttle program's final act.

Whether you're a lifelong resident, a transplant here or a visiting tourist, it seems the space program is a part of our local pride. The emotion is overcoming people more often lately, not just about the shuttles, but about our nation's entire human spaceflight program. People are hanging farewell signs on businesses. Kids are asking for posters. And visiting musicians are tipping their caps in concerts at the King Center in Melbourne.

No, really. I was chatting with FLORIDA TODAY Sports Editor Mike Parsons last week, and he shared a story like so many I've heard from people in recent months. Since I couldn't tell the story better than Mike, I thought I'd let him share it with you.

"Sometimes it is hard to put huge events into perspective," said Mike, a veteran sports journalist who hails from upstate New York. "Especially something as big as the end of the shuttle program, but it struck me Wednesday night during "Rain," a Beatles tribute at The King Center.

"As the band changes costume, the curtain goes down and they play other music from that time and flash pictures. Martin Luther King Jr., the Vietnam War, John F. Kennedy's famous speech. All got some cheers and claps. They also showed early shuttles taking off and flying. But it was when they showed John Glenn on the moon that really got everyone's attention.

"As the photo hit the screen, the audience erupted. It was a cheer and applause rivaling the band's introduction. It was loud and it was long. It was even a bit emotional.

"That is when it struck me. That was not American history we were seeing, like Vietnam and JFK, that was a piece of Brevard County history. It may have happened millions of miles away, but it is our history.

"No matter where you are from originally or where you live in the county, there is a pride that is attached to the space program.

"That pride showed itself Wednesday night during a music concert. Makes you wonder whether the band stopped for a moment and noticed what was happening.

"As my wife, Michelle, said: 'I bet those pictures usually don't get that sort of reaction.'

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