54. Russian Stocks Climb to Record

Russia's benchmark stock index has risen to a record, driven by record oil prices and optimism about earnings.

Moscow's RTS had slumped as the Kremlin tussled with and eventually broke up one of its biggest members, oil and gas firm Yukos.

Investors big and small lost money, Russia's reputation was dented and share prices suffered as a result.

But the drop made stock valuations look more attractive, and the potential for profits now seems to outweigh concerns.

The RTS index climbed as high as 789.48 points - an all-time record - before falling back to trade at 788.36, 0.8% higher than Monday's close.

That takes the RTS's gains to more than 28% this year.

'Peak of Mount Everest'

Most of Russia's biggest companies get their wealth from the nation's natural resources and a surge in global demand has been driving earnings growth.

At the same time, the extra revenues have been helping boost Russia's budget and the government is making strides in its attempts to increase tax collection. The subsequent improvement in Russia's economy is filtering down into the corporate sector, and helping boost consumer and business spending and investor confidence.

Also fuelling positive sentiment have been a number of large and well-received stock offerings.

However, analysts are warning that the gains have come quickly and are unlikely to last very much longer without some more positive economic or corporate news to underpin the market.

"The strength of the bulls is clearly fading, even if they manage to plant their flag on the peak of Mount Everest," said Sergei Suverov, a dealer at Gazprombank.

"The local buyers who are behind this latest rally are preparing to sell," said Roland Nash, an analyst at Renaissance Capital.

55. Treasury Prices Fall as Investors Return to Stocks Rally in Equities Markets Puts Pressure on Bonds

NEW YORK - Prices of U.S. govern­ment securities were lower as gains in European and U.S. equities markets lured investors back into stocks.

A sharp rebound in European stock markets sent Treasurys lower early in the day as investors dumped bonds in favor of equities. The three major stock indexes in Europe rallied Tuesday, with the Frankfurt DAX Index rising 2.7%, the Paris CAC-40 Index gaining 2.8% and the Financial Times-Stock Exchange 100 Share Index jumping 1.9%.

U.S. traders continued that trend, bet­ting that bonds would continue to lose lus­ter in anticipation of a stock-market rally.

"Since the bond market had rallied so much recently in the face of falling equi­ties, people expect the (Treasurys) mar­ket to fall when they see the stock mar­ket rising," said Michelle Girard, Treasury market strategist at Prudential Securities in New York.

By midafternoon, though, technology stocks on the Nasdaq Stock Market had faltered, forcing bond traders to cover short positions.

Earlier Tuesday, a set of retail-sector economic indicators showed a slowing in activity that is generally friendly for bonds, but the market showed little reac­tion.

The Bank of Tokyo-Mitsubishi's Retail Chain Store Sales Index fell 0.2% in the week ended Oct. 21 from the previous week. It was the first time in four weeks that sales at U.S. retailers had declined on a week-to-week basis.

Store sales generally were below ex­pectations for the majority of American retailers, "which caused many retailers to scale back their monthly expectations as well," said Michael Niemira, econo­mist at Bank of Tokyo-Mitsubishi Ltd. in New York.

Redbook Research's latest indicator of national retail sales showed sales up 0.4% in the first three weeks of October compared with the same period in Sep­tember. But the report said that sales had softened from a higher pace earlier in the month.