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Indexes Improve In Late Trading

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The main indexes firmed up in late trading, although volume remained lower.

At 3 p.m. ET, the Dow and NYSE composite showed a 0.4% increase. The S&P 500 and Nasdaq — which made a big move around 2:30 p.m. — moved up 0.3%.

Nasdaq volume was tracking 10% lower and NYSE trading 5% lower. It appeared the market would log a second straight day of advances on weaker volume.

Stocks acted better following a speech by Dallas Fed President Richard Fisher. A globalized economy, he said, created a buffer against price pressures by raising productivity.

“Globalization raises the economy’s speed limit, allowing policymakers to relax a little and let the economy expand at rates that might once have been considered unsustainable,” Fisher said in remarks to be delivered to the Houston World Affairs Council.

Fertilizers led industry groups as Potash () rose 6.71 to 183.87. Gold and silver, pharmaceuticals and solar-power stocks also were among the day’s leaders.

In late stock action, SWS Group () jumped 1.21, or 5%, to 25.58. The investment banker tumbled nearly 30% from February to March. It is nearing resistance at its 50-day moving average.

Chindex International () headed higher for the fifth straight session. The medical equipment distributor is expected to deliver full-year 2007 profit of 32 cents a share, that’s up from 2 cents in 2006.

On the downside, Psychiatric Solutions () tumbled 1.11 to 38.93 on heavy trading. The stock slipped below its 50-day moving average, where it had found support three times this year. The provider of mental health care services was working on a third consolidation since breaking out in September.

Aluminum Corporation of China () dropped 1.17 to 29.44, on pace to snap a 10-session win streak. Microstrategy () lost another 1.01 to 115.04, sliding further beneath its 50-day line. The stock is now 11% below a 129.10 buy point.

1 p.m. ET update: Stocks Bounce Back, Pare Losses

The stock market rebounded after a slow start Friday, erasing early losses and trading mixed.

At 12:40 p.m. ET, the Nasdaq had cut its loss to 0.1%. The S&P 500 was up 0.1%. The Dow industrials banked a 0.2% gain, while the small-cap S&P 600 was trading flat.

NYSE volume was tracking 5% below Thursday’s level at this time of day. Nasdaq turnover was down 10%.

In economic news, producer prices jumped 1% in March, following February’s 1.3% gain. That topped economists’ expectations of a 0.7% gain. The core PPI, which excludes food and energy prices, came in flat, vs. estimates of a 0.2% gain. Data on consumer prices will be out Tuesday.

Economic gauges and inflationary measures have impacted stocks lately. Wednesday’s release of the minutes from the latest Federal Reserve meeting hinted at the Fed holding off on cutting interest rates in the near future.

That triggered a distribution day among the major indexes. Stocks snapped back Thursday, but did so in disappointingly lighter volume.

Makers of solar-powered technology continued to thrive. Trina Solar () jumped 2.45 to 57.43 on volume 25% above normal levels. The stock, which went public Dec. 19, has tripled since its IPO date. It hit an all-time high Friday.

Chinese solar cell maker JA Solar (), another recent new issue, vaulted 1.44 to 23.07 on five times its normal trade.

IT services outsourcer Infosys Technologies () gapped up and gained 1.09 to 54.62 as volume quadrupled. After breaking out of a base Jan. 11, the stock undercut that pattern last month, resetting its base count. Infosys is battling to overcome resistance at its 50-day moving average.

On the downside, dress shirt maker Phillips-Van Heusen () sank 1.42 to 57.15 in brisk trade. The stock has held above its 50-day line in recent weeks, but it’s struggled against resistance near 60.

11:00 a.m. ET update: Stocks Little Changed In Morning Trading

The major stock indexes were narrowly mixed in morning trade Friday. Early gains from tame core producer prices were erased by a worse than expected read on consumer sentiment. But stocks worked their way off session lows.

At 10:40 a.m. ET, the Nasdaq slipped 0.1% and the S&P 500 was up less than 0.1%. NYSE volume was tracking x and Nasdaq volume was tracking x.

In economic news, producer prices jumped 1% in March, following February’s 1.3% gain. That exceeded economists’ expectations of a 0.7% rise. The core PPI, which excludes food and energy prices, came in flat, vs. estimates of a 0.2% gain.

Data on consumer prices will be out Tuesday.

Elsewhere, the University of Michigan’s sentiment index fell to 85.3 in April from 88.4 in March, below expectations of 87.5.

Jones Soda () gapped up and popped 1.84, or 7% to a new milestone of 27.55. Volume was tracking more than 16 times above average. The Seattle-based beverage firm was featured in Thursday’s The New America.

Brush Engineered Materials () tacked on 1.81 to a record high of 55.53, on volume three times average levels. First Albany started coverage of the specialty metals firm with a buy rating. Brush will report earnings on April 26. Analysts see profit surging 152% to 68 cents a share.

JA Solar () jumped 1.32 to 22.95, an all-time high. The Chinese maker of solar cells followed through after clearing a six-week consolidation Thursday. Shares came public in February at 15 a share.

On the downside, Silicon Motion Technology () dropped 1.24, or 5%, to 21.38, slicing its 50-day moving average. The maker of memory chip controllers has lost about 21% since March 21. Its industry group, Electronics-Semiconductor Equipment, fell 1.4%.

Perini () fell 2.19, or 5%, to 39.25 after Morgan Joseph cut the construction firm to hold from buy. The stock briefly slipped below a 39.11 buy point of a base-on-base pattern.

United we stand, Salmond tells his new parliament

ALEX Salmond invited his political opponents to forge a new consensual era of Scottish politics yesterday, using his maiden speech as First Minister to call for an end to the dogmatic party divisions which have characterised parliamentary business since devolution.

Aware that he will have to run Scotland with little more than a third of its MSPs, Mr Salmond appealed to all the MSPs in the chamber to work together in the country’s best interests.

And, in a move that will infuriate Gordon Brown, the likely next Prime Minister, the SNP leader said he felt significant progress could be made if the parties united to call for more powers for the parliament.

Mr Salmond was elected as First Minister at precisely 11:11am yesterday morning. The outcome, although expected, was greeted with jubilation on the SNP benches and in the public gallery, from where his wife Moira, father Robert and sister Gail were all watching.

His victory, which came with the aid of votes from Scotland’s two Green MSPs, will enable him to form a minority SNP administration.

The Nationalists are 18 seats short of a majority in the 129-member parliament.

In his speech, Mr Salmond stressed the ties and causes which united MSPs of many parties, not the divisions between them.

“We are not divided. We have a sense of ourselves. A sense of community. And above all, a sense of the ‘common weal’ of Scotland,” Mr Salmond declared. “We are diverse, not divided,” he said.

And he added: “There is a broad consensus on the need for this parliament to assume greater responsibility for the governance of Scotland, and there is an understanding that we are engaged in a process of self-government - and an awareness of the distance already travelled.”

Jack McConnell picked up on Mr Salmond’s theme, saying: “Voltaire once said that governments need both shepherds and butchers and I think Alex may need to be more of a shepherd than a butcher in his new role, looking around this flock here and trying to secure majorities for his policies.”

He also gave a clear hint in his speech that he intended to stay on as Labour leader in Scotland, at least for the near future.

“I am very proud to lead the largest and most experienced opposition that this parliament has ever had and I look forward to that job,” he said.

But the former First Minister also took the opportunity to warn Mr Salmond that he did not have an “unconditional” right to govern.

After leaving the chamber, Mr Salmond told his supporters:

“You think you can imagine what it’s going to be like but, when you imagine, it’s never quite the reality. It’s a wonderful day.”

Mr Salmond went on from the parliament, where his party were still celebrating his election as First Minister, to St Andrew’s House, the home of the civil service in Scotland.

He met Sir John Elvidge, the Permanent Secretary, and then unveiled his slimmed-down ministerial team.

However, the new sense of consensual politics appeared to dissolve as soon as Mr Salmond announced that he was trimming the previous nine departments to just six.

Mr McConnell immediately criticised the plans as a “badly prepared rearrangement”.

“This is change for change’s sake, but the impact could be very damaging.”

The new First Minister took a congratulatory telephone call from Douglas Alexander, the Scottish Secretary, but by last night he had still not heard from either the Prime Minister Tony Blair or Mr Brown.

Soon after Mr Salmond’s election in the parliamentary chamber, the Queen signed the warrant appointing him as Scotland’s First Minister.

The Queen will see Mr Salmond in person in Scotland next week.

Today, Mr Salmond will perform a ceremony in the Court of Session before the Great Seal of Scotland which will give him the legal power to run the Scottish Executive.

He will later undertake his first official engagement, an environmental announcement at Longannet Power Station.

Cardinal Keith O’Brien, head of the Catholic Church in Scotland, welcomed the SNP leader’s appointment.

“I am sure that he will work for the good of all the people of this country,” he said.

Matt Smith, the Scottish secretary of Unison, congratulated Mr Salmond and asked for an early meeting with representatives of the new administration.

Friends of the Earth Scotland welcomed the appointment of what they described as a “tough on climate change, anti-nuclear” First Minister and they urged all MSPs to support the new Executive’s environmental plans.

Surprises spice up the expected rewards for loyalty in top team

THE new slimmed-down Cabinet for Scotland saw Alex Salmond award trusted lieutenants with senior posts but also a few surprise faces.

The new First Minister has reduced the number of departments from nine to six by merging certain portfolios.

But the breakdown of departments was already causing concern yesterday. Opposition politicians said twinning transport with climate change could cause a conflict of interest and de-coupling enterprise from higher education was a mistake.

However, Mr Salmond insisted the new government would be more focused.

“It sends a signal for the rest of the public administration in Scotland,” he added.

OFFICE OF THE FIRST MINISTER

Mr Salmond has two deputies. BRUCE CRAWFORD will need all his diplomatic skills as minister for parliamentary business. As minister for Europe, external affairs and culture, LINDA FABIANI has a huge portfolio with responsibility for Gaelic, architecture and the arts.

HEALTH AND WELLBEING
NICOLA STURGEON will be deputy first minister as well as cabinet secretary. This means leaving Shona Robison, who was expected to get the role, out of the cabinet. Instead she will take on a junior post as public health minister. Stewart Maxwell,who first proposed the public smoking ban, is minister for communities and sport.

FINANCE AND SUSTAINABLE GROWTH

As expected, the most important role goes to former leader JOHN SWINNEY. His deputies are the SNP’s economic brains: Jim Mather as minister for enterprise, energy and tourism, and Stewart Stevenson as minister for transport, infrastructure and climate change.

EDUCATION AND LIFELONG LEARNING

As the former spokeswoman on education, FIONA HYSLOP was an obvious choice as cabinet secretary. Her deputies are more unexpected. Maureen Watt, the minister for schools and skills, has been in Holyrood for just over a year and Adam Ingram, minister for children and early years, is an unshowy character.

JUSTICE

After serving as justice spokesman, KENNY MACASKILL was rewarded with the job, fresh from winning the SNP’s first seat in Edinburgh. His deputy, Fergus Ewing, was expected to get a senior role, although minister for community safety was an unusual move.

RURAL AFFAIRS

RICHARD LOCHHEAD, the Nationalists’ former fisheries spokesman, has landed a senior role as cabinet secretary but his inexperience may tempt some opposition politicians to try to target him for attacks. Michael Russell, the author, commentator and former television producer, makes a comeback as minister for the environment.

ALEX SALMOND’S SPEECH IN FULL

THANK you, Presiding Officer, for your congratulations; and can I now turn to the party leaders to thank them. Firstly, Annabel Goldie. I toasted Annabel Goldie recently at the Scouts and Guides Burns Supper and such was the excellence of her replying to the toast to the lassies that I was sorely tempted to vote for her today. Tempted Annabel, but not seduced.

My wife Moira and wee sister Gail are here today - it’s a good job my big sister is not here, Annabel. But my dad is here today as well.

My father has never seen me in the chamber because he always refused to set foot in the Palace of Westminster; some people say I should have heeded his advice. But I thank my family for their support today.

I thank Nicol Stephen for his typically gracious speech. I listened carefully when you listed all your manifesto commitments. I am not sure the government can afford all of them but we will certainly try our best. Lastly, can I turn to Jack McConnell to thank him for his good wishes. Mr McConnell once said the job of First Minister was to leave Scotland better than how you found it, and I think in terms in particular of the ban on smoking and campaign to tackle sectarianism, Jack McConnell has certainly done that. I applaud your continued efforts in that direction and wish you and Bridget all the best for the future. Thank you very much.

This parliament, as we should remember, is created by the people of Scotland in a referendum. It is bigger than any of its members or any one party.

I believe that Scotland is ready for change and for reform. This is a small nation with a big future. But it is also a small nation with big challenges.

It was said earlier on that Scotland is a divided nation. Given the closeness of the election result, I can understand that in some ways. However, it is not the case.

Certainly, the gap between rich and poor is far too great. We need to grow faster. We need to heal the scars of the past. We need to be greener. We need to be still smarter.

But we are not divided. We have a sense of ourselves. A sense of community. And above all, a sense of the “common weal” of Scotland.

In some ways we’re not even a divided parliament. Of course, in this part of the chamber, we seek independence and equality for Scotland. I’m told not everyone agrees. But there is a broad consensus on the need for this parliament to assume greater responsibility for the governance of Scotland. And there is an understanding that we are engaged in a process of self-government - and an awareness of the distance already travelled.

In 1961, Bashir Ahmad came to Glasgow to drive buses. In 1961, the very idea of a Scottish Parliament was unimaginable. In 1961, the very idea of a Scots Asian sitting in a Scots parliament was doubly unimaginable.

But Bashir is here and we are here, and that part of the community of Scotland is now woven into the very tartan of our parliament. And we are stronger - so much stronger - as a result. We are diverse, not divided.

The nature and composition of this third Scottish Parliament makes it imperative that this government will rely on the strength of argument in parliament and not the argument of parliamentary strength.

Despite all the challenges we will face together, I welcome that as a chance to develop a new and fundamentally more reflective model of democracy.

The days since the election have been understandably dominated by questions over the structure of government - will there be a coalition or will there be a minority government?

Let me say to parliament that what matters more to the people we all represent is less the structure of government and more what we, all of us, achieve on the people’s behalf.

Presiding Officer, all of us in this parliament have a responsibility to conduct ourselves in a way which respects the parliament the people have chosen to elect. That will take patience, maturity and leadership. My pledge today is that any Scottish government led by me will respect and include this parliament in the governance of Scotland over the next four years.

In this century, there are limits to what governments can achieve. But one thing any government I lead will never lack is ambition for Scotland. Today, I commit myself to leadership wholly and exclusively in the Scottish national interest. We will appeal for support policy by policy across this chamber.

That is the parliament the people of Scotland have elected, and that is the government that I will be proud to lead.

Bond Prices Fall On Euro Zone Strength, Fed’s Hawkish Remarks, Risk Rebalancing

U.S. Treasury debt prices fell on Tuesday, with benchmark yields posting 3-1/2 month highs, on a combination of factors including weaker euro zone debt and supply-related hedging.

The Treasury market resumed its recent decline as Bund yields rose to multi-year highs after Germany’s ZEW investor sentiment data reinforced the outlook for strength in the euro zone economy, which could lead to more interest rate hikes by the European Central Bank, analysts said.

Moreover, risk rebalancing by mortgage players and ongoing gains in the stock market compounded the day’s selling pressure on Treasuries, analysts said.

Stocks climbed on buying spurred by takeover speculation with the Dow Jones Industrial average setting a record intraday high for a seventh session in a row.

Benchmark 10-year Treasury notes were down 9/32 in price for a yield of 4.83%, up from 4.79% late on Monday. Ten-year yields closed at their highest levels since hitting 4.85% on Feb. 2. Bond yields move inversely to prices.

The lack of top-tier U.S. economic data kept players sidelined, after buyers emerged late Monday, helping to snap Treasuries’ skid of six straight losing sessions.

Meanwhile, a Fed official added to the day’s bearish tone with remarks suggesting that the Fed remains worried about inflation despite recent tame price readings.

Richmond Fed President Jeffrey Lacker said in a CNBC interview that housing would weigh down growth for a couple more quarters. Moreover, he added that the recent easing in core inflation has not been significant enough for the Fed to back down from its current stand on interest rates.

Last year, Lacker was the sole voter on the Fed’s rate-setting committee calling for the Fed to continue raising rates to curb inflation. The Fed has held key short-term U.S. rates at 5.25% since June 2006.

In other cash trading, two-year notes slipped 2/32 in price for a yield of 4.84%, up 3 basis points from late Monday,

Five-year notes fell 6/32 in price for a 4.76% yield versus 4.72% late Monday, while the 30-year bond shed 20/32 to yield 4.98% compared with 4.94% late on Monday

China’s foreign currency reserves top $1 trillion

BEIJING - China’s foreign exchange reserves, already the world’s largest, have passed US$1 trillion, the government announced Monday, amid debate over how the country should use its newfound wealth.

The central bank said its reserves stood at US$1.0663 trillion at the end of December, up more than 30 percent from one year earlier, making this the first country officially to top the US$1 trillion mark.

China passed Japan in early 2006 as the nation with the biggest foreign reserves as Beijing drained money from its economy, stockpiling much of it in U.S. Treasuries in an effort to prevent a spike in inflation as export revenues surged in.

The figure announced Monday by the People’s Bank of China was slightly below estimates by outside experts, who forecast that the reserves would surpass US$1.1 trillion by the end of 2006.

That mountain of money is equal to about 40 percent of China’s annual economic output. Japan’s reserves stood at US$875 billion at the end of December.

The composition of China’s reserves is secret, but economists believe about 70 percent is in U.S. Treasuries, much of the rest in euros and a small amount in yen.

Purchases of assets in other currencies are believed to be growing as the bank diversifies its holdings.

Economist Stephen Green at Standard Chartered Bank in Shanghai said in a report last week that the central bank made an estimated US$29 billion profit last year due to its foreign reserves even after paying interest on its own bonds and other expenses.

The central bank has been buying up tens of billions of dollars worth of currency every month in order to keep the flood of money from China’s trade surplus, which reached a record US$177.5 billion last year, from igniting inflation.

Beijing has begun easing currency controls in an effort to reduce such strains.

Economists are debating how China’s reserves might be put to use to address pressing needs.

Some have suggested that Beijing use the money to buy oil and other resources abroad for China’s booming economy. Others say it could pay for more schools and social programs. 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Finnish March unemployment 7.7 pct vs 8.1 pct year earlier

HELSINKI (Thomson Financial) - The rate of unemployment in Finland in March was 7.7 pct, down from 8.1 pct a year earlier, Statistics Finland (SF) said.

According to the agency, there were 203,000 jobless people in March.

The Labour Force Survey of Statistics Finland added that there were 2.446 mln employed people in the country in March, an increase of 51,000 from the same month a year earlier.

The employment rate stood at 68.7 pct, up from 67.6 pct in March 2006, SF added.

azer.sawiris@thomson.com

afs/hjp

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