MARKET SNAPSHOT: U.S. Stock Market Welcomes Bailout Plan; Indexes Off Early Highs

By Kate Gibson

U.S. stock indexes rocketed higher Friday, with the major stock indexes wiping out a week of shattering losses, as Wall Street cheered the government's effort to unfreeze credit markets as well as plans to move against short sellers.

The major stock indexes climbed above the level at which they stood before the start of the watershed week, which saw the Dow Jones Industrial Average (DJI) lose about 800 points in the first three days of trading.

But at least one analyst questioned whether the weekly gain would remain intact at the end of the day.

"Panic buyers, most likely the shorts, were wiling to pay any price and they sure did," said Elliot Spar, option-market strategist at Stifel Nicolaus & Co., describing the burst higher, especially among financial shares.

"If details of the grand plan are revealed over the weekend, it may create a sell on the news on Monday morning. I suggest traders with big profits from yesterday lighten up before the close," said Spar.

Up more than 400 points early on, the Dow industrials was recently up 336.76 points at 11,356.45, with 24 of its 30 components in the green.

American International Group Inc. (AIG) was flying 56.5% higher, with major shareholders of the giant insurer said to be pursing a bid to pay off the federal government's loan to AIG in time to avoid the government taking an 80% stake in the company, the Wall Street Journal said in an online report.

Citigroup Inc. (C) also bolstered the Dow, up 23.7%, followed by Bank of America Corp. (BAC), recently ahead 17.7%.

UPDATE: Chipotle Profit Hit By U.S. Economy, Food Costs

By Matt Andrejczak

SAN FRANCISCO (Dow Jones) -- Chipotle Mexican Grill, Inc. warned Friday its third-quarter profit and sales will be hurt due to cash-strapped U.S. consumers and surging food costs. Its shares tumbled 18% in early trading.

The U.S. restaurant industry is facing leaner times as consumers are spending less money to eat out. So far, casual sit-down restaurants have been harder hit than the fast-food sector.

Chipotle, which sells burritos, tacos and other quick-service dishes, said it expects third-quarter net income to fall slightly below the year-ago figure of 62 cents a share. Analysts polled by FactSet Research had expected Chipotle to earn 72 cents a share in the quarter.

Denver-based Chipotle (CMG) said it faces further sales deceleration at its 775 fast-food outlets. The company said comparable restaurant sales, or sales at outlets open at least one year, will be in the "mid to low single digits."

Its previous forecast called for mid-single-digit increase. To combat rising costs for food-ingredients, Chipotle also said it plans to implement a national pricing strategy for its menu.

LATIN AMERICAN MARKETS: Mexican, Brazilian Equities End Higher; Mixed For The Week

By Carla Mozee

Major Latin American markets finished higher Friday but mixed for the week. Mexican stocks were slightly higher despite a sharp decline in shares of Cemex SAB following a weak forecast from the cement maker.

Mexico's IPC fought off earlier losses to finish up 35 points, or 0.14%, at 25,558.41. The result was enough to snap a three-day losing streak, but not enough to keep the index from posting a weekly loss, of 1.4%.

Cemex (CX) shares put in the worst performance Friday, down 7.5% after the company late Thursday issued a third-quarter forecast that disappointed analysts. Among its projections, sales will be $5.9 billion, or flat compared with the year-ago period, and earnings before interest, taxes, depreciation and amortization will be about $1.25 billion, down 3% from last year.

EBITDA for 2008 will come in between $4.6 billion to $4.7 billion, with about half of the decline due to a lower-than-expected performance in its U.S. operations, said Cemex. Its results will also reflect a negative foreign- exchange effect of roughly $100 million, largely because of the weaker euro.

Credit Suisse noted Friday that the company may face a higher effective tax rate because of a Mexican Supreme Court decision overturning a ruling that protected the company from paying taxes related to investments in offshore tax havens.

MARKET SNAPSHOT: U.S. Stocks Fall As Oil Rises, Financials Woes Return

By Nick Godt

U.S. stocks fell early Monday morning, as rising crude oil prices fueled uncertainty about the economy, while worries about ailing financials were rekindled by several media reports.

The Dow Jones Industrial Average (DJI) fell 43 points, or 0.5%, to 11,605 in early action, with 26 of its 30 components falling. The benchmark index was pulled lower by General Motors Corp. (GM), AIG (AIG), and Hewlett Packard (HPQ).

Shares of Exxon Mobil Corp. (XOM) rose 0.7%.

Crude-oil prices moved higher amid worries that Tropical Storm Fay could reach installations in the Gulf of Mexico. The September-dated light crude contract tacked on 70 cents to $114.46 a barrel, having peaked at $115.35.

The U.S. dollar was broadly steady after strong gains in the last couple of weeks and ahead of the latest data on housing, due later in the session, and inflation data due Tuesday.

Financial shares gave up some of their strong gains from Friday. Lehman Brothers (LEH) lost 4% after The Wall Street Journal said it could lose $1.8 billion during the quarter.

Separately, newsweekly Barron's said it's growing more likely that the U.S. government will recapitalize Fannie Mae (FNM) and Freddie Mac (FRE), wiping out investors.

Both Fannie and Freddie lost over 10%.

CURRENCIES: Dollar Rallies To Multiple-month Highs

By Steve Goldstein

The dollar's rally extended to multiple-month highs on Friday as U.S industrial output grew the most in 10 months and as traders continued to react to data that showed economies of five of the Group of Seven nations contracted.

In earlier action, the dollar rose to an intraday high of 110.65 Japanese yen, the highest level since January. The euro fell to an intraday low of $1.4663, the lowest since February, and the British pound fell to as low as $1.8510, the weakest since July 2006.

The dollar index (DXY), which measures the greenback against a basket of currencies, rose to an intraday high of 77.25, its highest level since December.

"The perception that the fundamental picture has tilted in favor of the U.S. dollar has continued to help drive" the greenback up, said Marc Chandler, a currency strategist at Brown Brothers Harriman.

Friday's U.S. industrial production data showed the output of U.S. factories rose 0.4% in July, the best gain in 10 months, the Federal Reserve reported.

Overall, industrial production at the nation's factories, mines and utilities increased a seasonally adjusted 0.2%, as expected, despite a 1.9% drop in output of utilities.

Separately, manufacturers in New York state said business improved slightly in early August, the New York Federal Reserve Bank reported Friday. The Empire state index rose to 2.8 in August from negative 4.9 in July.