The Star Online: Business
The Star Online: Business |
- Oil price rises
- $5bil deal for Australian coal company long awaited
- US stocks rise on hopes for more stimulus from Fed
| Posted: 30 Aug 2011 05:42 PM PDT NEW YORK (AP) - Oil rose to near $89 per barrel Tuesday on expectations that supplies will be tighter in the wake of Hurricane Irene. The storm forced several refineries and petroleum terminals to reduce production or shut down altogether. The East Coast may deal with lower fuel supplies in coming weeks, and traders are betting oil and gasoline prices will rise. Meanwhile, another tropical storm - Katia - is strengthening to a hurricane out in the Atlantic and may eventually head toward the U.S. Nobody wants to sell "when a month from now people will be talking about another monster hurricane," said Michael Lynch, president of Strategic Energy & Economic Research. Benchmark West Texas Intermediate crude rose $1.63 to finish at $88.90 per barrel in New York. Brent crude jumped $2.14 to end at $114.02 per barrel in London. "There is clearly a worry about the contribution of some key northeastern refineries," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. OPIS said that Sunoco's refineries in Marcus Hook and Philadelphia have slowed fuel production. ConocoPhillips refinery in Trainer, Pennsylvania, cut back on production as well, while its Linden, New Jersey, facility was shut down. Hess Corp.'s Port Reading, New Jersey, refinery also cut production. Analysts note that U.S. energy demand likely will decline after Hurricane Irene as massive flooding keeps many people off roads along the East Coast and in the Northeast, and millions of others remain without power. Also on Tuesday a private firm said consumer confidence in August was at its lowest level since April 2009. That could point to lower fuel demand as well. Analysts say, however, that it may not affect prices until refineries are back to full production. In other Nymex trading, heating oil rose 5.94 cents to finish at $3.0767 per gallon and gasoline futures increased by 7.2 cents to end $2.8415 per gallon. Natural gas picked up 7.9 cents to finish at $3.909 per 1,000 cubic feet. |
| $5bil deal for Australian coal company long awaited Posted: 30 Aug 2011 05:41 PM PDT ST. LOUIS (AP) - The deal for Peabody Energy, the world's biggest private-sector coal company, and a partner to buy Australia's Macarthur Coal for more than $5 billion concludes more than a year of pursuit and continues widespread consolidation in that energy sector. Macarthur, a major producer of pulverized coal coveted by steel producers, said Monday that it is recommending its shareholders accept a revised bid of $16 per share - a 44 percent premium over the stock's $11.8 close on July 11 before it was made - from St. Louis-based Peabody and Luxembourg's ArcelorMittal, the world's largest steelmaker. ArcelorMittal already is Macarthur's second-biggest shareholder, with a 16 percent stake. Twice spurned by Macarthur over the past year and a half, Peabody believes the sweetened deal would bolster Peabody's growing Australia operations, which already produce much of the coal sent to customers in the Asia-Pacific region - notably China and India - and which have been a key revenue driver for Peabody. Macarthur would be swallowed up by a new holding company owned 60 percent by Peabody and the rest by ArcelorMittal. While calling the deal "slightly on the expensive side," Brean Murray, Carret & Co. analyst Jeremy Sussman wrote in a research note Tuesday that "this likely transaction makes a lot of strategic sense for Peabody." The combination would give the U.S. company "precious" Australian terminal space while making Peabody a bigger player in producing the coal used in steelmaking. Sussman affirmed his "buy" rating on Peabody stock and his target price of $81 apiece. "We believe there is a very likely chance that this deal goes through as is," Sussman wrote. Macarthur said Monday that a better bid still could arise, but there was no certainty one would. The offer from Peabody and ArcelorMittal includes a "no-talk" limitation, meaning Macarthur is banned from talking to other potential buyers. The deal comes on the heels of Alpha Natural Resources Inc.'s purchase of struggling Massey Energy Co. in a $7.1 billion buy announced in June. Alpha, the nation's fourth-largest coal producer by revenue, said then that the acquisition will offer greater access to international markets. Peabody, undertaking what it has called its biggest expansion in its 128-year history, considers the deal for Macarthur - with roughly 270 million tons of coal reserves - "a major step," Peabody chairman and CEO Gregory Boyce said. Aditya Mittal, ArcelorMittal's chief financial officer, urged Macarthur shareholders to accept the joint offer. Peabody, which fuels roughly one-tenth of all U.S. electricity generation and more than 2 percent worldwide, also has signed an agreement to develop a huge Chinese surface mine expected to produce 50 million tons of coal a year for decades. Sussman, in his research note, said such ventures should "help Peabody further cement its status as the bellwether of the coal space." Peabody shares rose 4 cents to close at $48.63 on Tuesday and climbed another 8 cents after hours. |
| US stocks rise on hopes for more stimulus from Fed Posted: 30 Aug 2011 05:39 PM PDT NEW YORK (AP) - The mere discussion of more economic stimulus from the Federal Reserve was enough to send stocks higher Tuesday. The Dow Jones industrial average rose 20 points, its third day of gains. Minutes from the Fed's latest policy meeting on Aug. 9 showed that central bank officials discussed a variety of options to bolster the economy, including buying more Treasury bonds. In the end, they decided to keep interest rates low until at least mid-2013. The news that more aggressive action was being considered gave investors a reason to buy stocks. "They want to see stimulus and they hope stocks will go higher," said Joseph Saluzzi, co-head of stock trading at Themis Trading. The Federal Reserve has purchased Treasury bonds twice in the past as a way to keep long-term interest rates low. The Fed's first bond-buying program was in 2008, at the height of the financial crisis. The second, announced last August, helped to push the Dow up 28 percent through April 29. Lower interest rates on bonds give investors an incentive to move money out of bonds and into stocks and other assets. Stocks were mixed for much of the day Tuesday after an index of consumer confidence plunged in August to the lowest level since April 2009. Trading volume was also lighter than normal because many investors are on vacation. The Dow Jones industrial average rose 20.70 points, or 0.2 percent, to close at 11,559.95 Tuesday. The Dow was down as many as 109 points five minutes after the consumer confidence report came out at 10 a.m. It traded mixed for most of the day and turned higher in the last hour of trading. The Dow has risen for three days straight, and six out of the last seven. Boeing Co. rose 2.2 percent, the most of the 30 companies in the Dow, after the aircraft maker said it received approval from its board to build a version of its workhorse 737 jet with a redesigned engine. That should help it compete better with rival Airbus. The Standard & Poor's 500 rose 2.84 points, or 0.2 percent, to 1,212.92. The Nasdaq composite index rose 14, or 0.6 percent, to 2,576.11. Companies that rely most heavily on consumer spending had some of the biggest losses. Retailers Kohl's Corp. and Lowe's Cos. each fell 2.2 percent. Best Buy Co. Inc. fell 0.8 percent. The sharp fall in the measure of how U.S. consumers feel about the economy could mean weaker sales for retailers and makers of consumer goods like clothes and shoes. Retailers are in the midst of the critical back-to-school shopping season, which can account for as much as 25 percent of their annual revenue. Trading volume, or the number of shares bought and sold, was lower than usual. About 3.97 billion shares exchanged hands on the New York Stock Exchange, almost a third less than Aug. 8, when stocks plunged on massive volume after the U.S. government's credit rating was downgraded. Low volume is worrisome because it suggests that relatively few investors are driving the stock market's gains or losses. That creates the risk for bigger price swings, said Stephen Carl, principal and head of equity trading at The Williams Capital Group. A lack of volume also indicates that some investors don't believe that stocks are worth buying right now. Stocks have swung widely in August. The Dow was down as much as 7.4 percent for the year on Aug. 10, but it is now down 0.2 percent. On Monday the Dow soared 254 points, its fourth-largest gain this year. Insurers rose the most after it became clear the damage from Tropical Storm Irene wasn't as bad as analysts had feared. Bond prices have also been volatile. The yield on the 10-year Treasury note briefly fell to a record low below 2 percent on Aug. 18 on a very weak report on manufacturing in the Northeast from the Philadelphia Federal Reserve. On Tuesday, the yield fell to 2.18 percent, down from 2.27 percent late Monday. |
| You are subscribed to email updates from The Star Online: Business To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 ulasan:
Catat Ulasan