ECONOMY & MARKETS

Crude Oil Falls More Than $2 as Dollar Rebounds

Blue-chip stocks dipped on Monday as a 2 percent drop in oil prices dragged the energy sector lower and investors locked in profits after Friday's rally.

Worries about a U.S. economic downturn and its fallout across the world eased on Monday, lifting the dollar and Asian stocks although European shares took a breather after a five-session rally.

Stocks were little changed on Monday as caution before the quarterly earnings reporting season offset a boost from falling crude oil prices.

Shares of Web search leader Google Inc. hit a new benchmark of $600 in early trading on Monday, fueled by investor confidence in the strength of its Internet advertising technology. Google shares briefly hit $600 for the first time, a key threshold for the company which priced at $85 per share at its initial public offering in 2004.

Stock futures were little changed on Monday as investors paused after major indexes hit record highs on Friday and before the start of the quarterly earnings reporting season.

Asian stocks outside of Japan hit record highs on Monday, but the dollar headed lower after a solid U.S. jobs report failed to dampen expectations for a further cut in interest rates. European markets were also expected to rise. European stock markets were set to open slightly higher, extending five straight days of gains, but with Japanese markets closed and no major economic data expected out of the United States due to the Columbus Day holiday, trade was expected to be light.

The U.S. federal budget deficit fell to $161 billion in fiscal 2007 from $248 billion the prior year as growth in tax receipts, fueled by capital gains and other non-withheld income, outstripped spending growth, the Congressional Budget Office said on Friday.

The dollar posted the biggest weekly gain against the euro in more than a month on signs the economy is weathering the housing slump.

Treasury debt prices plunged on Friday after a much stronger reading on the labor market suggested the Federal Reserve might not need to cut interest rates later this month.

Stocks barely budged on Thursday as investors shied away from making big bets before Friday's jobs data that could shed light on the economy and the outlook for interest rates.

World stocks held just below this week's record high on Thursday while the euro was steady as investors bet the worst of the credit crisis is over and looked to the European Central Bank chief for clues on monetary policy.

Stocks were little changed on Thursday as investors paused before Friday's key employment report that could shed light on the economy and the outlook for interest rates and corporate profits.

The dollar fell on Thursday, snapping a three-day rally, as dealers anticipated Friday's September U.S. payrolls data may still keep the Federal Reserve on track to cut interest rates later this month.

Shares in Nintendo Co Ltd hit a record high on Wednesday after Goldman Sachs initiated coverage of the maker of the Wii game console with a buy rating, while speculation the firm could raise its earnings forecast again gave it an extra boost.

The dollar rose to a one-month high against the yen on Wednesday after economic reports reflected growth in U.S. employment in September, boding well for Friday's non-farm payrolls data.

Stocks declined slightly on Wednesday as a broker's weak outlook on some chip makers weighed on the sector, while data showing continued growth in the services sector helped limit losses.

Global stocks hit a fresh peak for a third straight session on Wednesday as worries about a credit squeeze continued to recede, while the dollar pared recent gains as investors awaited upcoming major U.S. economic data. Caution ahead of U.S. non-manufacturing numbers and retail sales in Europe due later in the day were seen keeping a lid on European markets.

U.S. Treasuries made small gains on Tuesday after an industry report said the number of pending home sales fell more than expected, causing concern that the housing crisis could deepen even more.

The dollar's two-day rally against the euro ended ahead of a key U.S. service sector report due later Wednesday.

Japan's Nikkei stock average is expected to move in a narrow range on Wednesday, with profit-taking likely to prevent the index from going further beyond 17,000.

Blue-chip stocks fell on Tuesday as investors booked profits following a record reached in the previous session, but in the broader market, bank stocks and home builders gained as investors bet the worst of the credit squeeze may be over.

The dollar rose on Tuesday from record lows as investors trimmed bets of further declines in the U.S. currency ahead of key economic data later this week.

Home builder stocks rallied for a second consecutive day on Tuesday as investors gambled that the struggling U.S. housing market, with a chance of further interest-rate cuts, may have bottomed out and now is the time to buy, investors said.

Stocks edged lower on Tuesday as a drop below $80 a barrel in oil hurt energy shares, offsetting optimism about further interest rate cuts fueled by the latest disappointing news on housing.

Global stocks hit a record high on Tuesday, lifted by financial companies after subprime losses detailed by big banks, including Citigroup Inc, raised hopes that the worst of the credit squeeze may be over.

Japan's Nikkei stock average rose 1.2 percent on Tuesday, clearing the 17,000 level for the first time in nearly eight weeks as gains on Wall Street and a softer yen pushed up exporters such as Sony Corp.

Oil prices fell sharply toward $80 a barrel on Monday as investors took profits from the near-record highs of last week and weighed the threat of a deeper economic slowdown in the United States.

Shares of Fluor Corp rose to an all-time high on Monday, a day after reports that the big U.S. engineering and construction company was still in talks with Kuwait National Petroleum Co (KNPC) for parts of a tender for its planned 615,000 barrels per day al-Zour refinery.