AP – NEW YORK – The price of natural gas jumped yesterday after a major producer said it is aggressively cutting production.

Chesapeake Energy told investors its production cuts are “actually higher” than the minimum of 500 million cubic feet per day it announced last month.

Investor relations chief Jeffrey Mobley said at an energy conference in Colorado that the company will push many of its natural gas operations to the sidelines until “what is hopefully a higher gas price environment” in the future.

If prices remain weak, Chesapeake may limit natural gas production by up to a billion cubic feet per day.

Natural gas futures rose by US$0.03, or 1.2 per cent, to finish at US$2.48 per 1,000 cubic feet in New York. Prices surged by more than 5 per cent earlier in the day after Mr Mobley suggested that Chesapeake was increasing the production cuts beyond what was previously announced last month. The company clarified the statement later in the day.

Analysts said yesterday’s announcement by Chesapeake shows that energy companies are watching the market closely and will aggressively manage supplies to push prices higher.

“Perhaps this won’t be the end,” PFGBest analyst Phil Flynn said.

“If prices stay low, maybe they’ll drop production even more.”

The government reported earlier in the day that natural gas supplies fell last week by 78 billion cubic feet. That was less than analysts expected, and supply levels remain nearly 33 per cent higher than the five-year average. AP

Bloomberg – Natural-gas companies risk causing serious environmental damage from hydraulic fracturing unless they commit to the best engineering practices, a task force named by Energy Secretary Steven Chu concluded.

Regulations to protect public health will work best when drillers embrace techniques that avoid “undesirable consequences,” according to a draft report today by a subcommittee of the Secretary of Energy Advisory Board. The increased use of fracturing, or fracking, which forces water and chemicals into rock, raises the potential for a “serious problem,” the panel found.

The report offered recommendations for companies involved in fracking, such as Chesapeake Energy Inc. and Southwestern Energy Co., to follow, and guidelines for state regulators that oversee drilling.

“While many states and several federal agencies regulate aspects of these operations, the efficacy of the regulations is far from clear,” according to the report. “Effective action requires both strong regulation and a shale-gas industry in which all participating companies are committed to continuous improvement.”

The Environmental Working Group in Washington, which advocates for clean air and water, questioned the findings of a panel it said was dominated by the gas industry. The Independent Petroleum Association of America in Washington, which represents oil and gas companies, said the report marks “a useful starting point,” for discussions.

‘Disruptive Activities’

Communities “need to fully understand that there will be disruptive activities during drilling and industry needs to improve its response to local concerns,” Barry Russell, chief executive officer of the group, said in a statement.

In fracturing, millions of gallons of chemically treated water and sand are forced underground to break up rock and allow gas to flow. Advances in the technology have, in a few years, pushed gas from shale to almost 30 percent of U.S. production from a “negligible amount,” according to the report, which will be given to Chu on Aug. 18.

“What we’re recognizing in the report is the dramatic scale and speed which the growth of the industry has realized,” Kathleen McGinty, a subcommittee member who led President Bill Clinton’s Council on Environmental Quality, said in an interview. “Unless the imperatives that are sometimes articulated in regulation take deep root in every action out there, you will experience problems.”

Marcellus Shale

Lower drilling costs have lured companies to develop the Marcellus Shale, a formation from New York to West Virginia that includes regions not typically associated with gas production. The growth of fracking has raised questions “about whether both current and future production can be done in an environmentally sound fashion that meets the needs of public trust,” according to the report.

To resolve the concerns, the panel recommended creating an industry organization “dedicated to continuous improvement” of practices, such as measuring and reporting air pollution, minimizing water use and improving well casing and cementing. The subcommittee urged reducing emissions that contribute to ozone and called for a national database at a start-up cost of $20 million to link sources of public information on fracking.

The report underscores differences in public perception of the potential consequences of gas fracking. Industry advocates say the technique hasn’t caused a major incident for more than 60 years, though current techniques were introduced less than a decade ago. Opponents cite failures and accidents that result in tainting drinking water.

Fees, Taxes ‘Appropriate’

Fees and taxes are “an appropriate” way to fund better enforcement of environmental regulations, the report found.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/08/10/bloomberg1376-P9OQL7XLVIHXHC8JA_NMLENF-20110811181618-7VQJBQUJ38GQAOOTEEAT7JR4UM.DTL#ixzz1UkEdBpHo

Barrons – The technicals are giving a green light once again to the temporarily depressed energy stock sector.

The past month has been tough for crude oil and its related stocks. But conditions appear to have changed for the better.

Although bruised, a popular exchange-traded fund tied to energy-related stocks found its footing and looks to beat the broad market once again.

Several technical factors came together over the past week to keep the bulls interested in the oil and gas sector. For the Select Sector SPDR-Energy (NYSE: XLE – News), the most important was the pickup in demand as prices reached their bottom.

In February, this ETF settled into a trading range between $73 and $80 a share. In May, even though oil futures plunged from $114 a barrel to $95 in a matter of days, oil stocks did not violate any technical levels. In other words, investors found their weakness to be a buying opportunity.

Even more interesting was the intraday reversal to the upside seen May 17. Early that day, prices dipped below the bottom of the trading range—normally a bad sign. However, by noon, buyers resumed control and sent prices steadily higher into the close. This change of mood just as the ETF was on the verge of breaking down was bullish. Indeed the market never looked back.

To be sure, the energy sector is not its old self from last year. For example, the “buy at any price” attitude of a momentum-driven market is gone. Technical indicators measuring such momentum are only in neutral territory.

There are also still a few hurdles to overcome. The most important is the top of the trading range still looming overhead. So far in 2011, this price level brought out the sellers so we have wait to see if demand stays strong the next time it is challenged.

One way to reduce risk when the market is still caught in a range is to look for stocks that appear ready to play catch up. One such candidate is equipment maker Cameron International (NYSE: CAM – News).

Cameron peaked in March at roughly 62, but slid steadily to a low of roughly 47 in May (see Chart 2). Although price action this month remained weak, internal technical changes were brewing.

For example, money started flowing back into the stock early in the month even as prices eased lower. More volume changed hands on days when prices rose than on days when they fell, suggesting growing demand.

Momentum indicators also improved. Again, as prices eased lower, such indicators as the relative strength index, a widely-watched measure of the pace of daily price changes, started to climb. This suggested that the sellers were exhausted and buyers were getting more interested.

Energy stocks may not be top market leaders at this time but they have found stability, if not renewed strength. With crude oil above $102 a barrel in Tuesday’s trading, energy stocks do seem to be back in the hunt.

Getting Technical Mailbag: Send your questions on technical analysis to us at online.editors@barrons.com. We’ll cover as many as we can, but please remember that we cannot give investment advice.

Michael Kahn, mutual fund co-manager, author of three books on technical analysis, former Chief Technical Analyst for BridgeNews and former director for the Market Technicians Association, also blogs at www.quicktakespro.com/blog.

E-mail us at online.editors@barrons.com

LOS ANGELES (AP) — Shares in energy companies involved in oil and natural gas services fell on Monday after an analyst said the sector is ripe for continuing consolidation.

Mergers and acquisition deals in the sector began to ramp up in 2010 and surged the first three months of the year, says Citigroup Global Markets analyst Robin Shoemaker.

Now, rising oil prices are setting the stage for more transactions, Shoemaker says in a research note on Monday, arguing that oil prices are the most reliable leading indicator of consolidation in the sector.

Nine transactions with a total value of $13 billion took place in the first quarter, including Ensco PLC’s proposed acquisition of Pride International for $8.7 billion.

That’s up from $7.3 billion in the fourth quarter and $3.4 billion in the third quarter of last year.

Shoemaker estimates that $8 billion to $13 billion in deals could transpire each quarter for the rest of this year. The analyst anticipates more stock deals than cash deals.

Among the energy services companies Shoemaker sees as the most likely takeover targets this year are Weatherford International Ltd., Dresser-Rand Group Inc., FMC Technologies Inc., Superior Energy Services Inc., Helmerich & Payne Inc. and Rowan Cos. Inc.

Without a strong turnaround this year, Weatherford could opt to put itself up for sale and would be an attractive takeover candidate for multiple potential buyers, Shoemaker wrote.

Shares in Weatherford and the other energy companies slipped Monday amid an overall market decline following Standard & Poor’s warning that it might lower its rating on U.S. government debt because of the mounting budget deficit.

– Weatherford fell 23 cents to $20.79;

– Dresser-Rand slipped 83 cents to $50.64;

– FMC Technologies fell 51 cents to $45.20;

– Superior Energy dipped 67 cents to $39.27;

– Helmerich & Payne tumbled 8 cents to $66.96; and

– Rowan Cos. fell $1.10, or 2.7 percent, to $39.63.

Bloomberg – Halliburton Co., the second-largest oilfield-services company, was subpoenaed by the U.S. Environmental Protection Agency after failing to provide requested information on hydraulic fracturing.

Halliburton was the only one of nine companies that didn’t respond to the inquiry about hydraulic fracturing, a drilling technique that shoots water, sand and chemicals into shale rock under high pressure to extract natural gas, the EPA said in an e-mailed statement today. The environmental regulator is gathering data for a congressionally mandated report on the effects of fracturing on drinking water.

“Halliburton has failed to provide EPA the information necessary to move forward with this important study,” the agency said in the statement. “Today EPA issued a subpoena to the company requiring submission of the requested information that has yet to be provided.”

Halliburton, based in Houston, called the agency’s request for data overly broad. The company said it has already turned over almost 5,000 pages of documents to the agency and fulfilling the full request would require preparing about 50,000 spreadsheets.

“We have met with the agency and had several additional discussions with EPA personnel in order to help narrow the focus of their unreasonable demands so that we could provide the agency what it needs,” Teresa Wong, a Halliburton spokeswoman, said in an e-mailed statement. “Halliburton welcomes any federal court’s examination of our good-faith efforts with the EPA to date.”

Half of Supply

Gas from shale may total half of the U.S. natural-gas supply by 2035, up from 20 percent today, according to IHS Cambridge Energy Research Associates, an Englewood, Colorado- based adviser to energy companies. Expansion of fracturing has produced opposition in communities where residents say water mixed with chemicals may taint local drinking water.

The Independent Oil & Gas Association of New York, an industry group whose directors include representatives from Halliburton, says fracturing is safe. Environmental groups such as the New York-based Natural Resources Defense Council say the chemicals used are often toxic, citing cases in Wyoming and Pennsylvania where residents were told not to drink well water.

Clean Energy

President Barack Obama is promoting U.S. natural-gas reserves as an opportunity to advance a national “clean- energy” agenda. EPA Administrator Lisa Jackson has said she will inform the public immediately if environmental dangers from fracturing are discovered.

Halliburton fell 21 cents to $33.22 at 4:01 p.m. in New York Stock Exchange composite trading. Halliburton has also been a focus of inquiries by Congress and a presidential panel for its role in providing cement work for the BP Plc well that failed in the Gulf of Mexico, creating the largest U.S. offshore oil spill.

The EPA asked the nine companies in September to disclose the chemicals used to dislodge underground natural gas. Halliburton said at the time it would comply with the EPA’s request.

Schlumberger Ltd., the largest provider of oilfield services, and Key Energy Services Inc., both based in Houston, were among companies that complied with the EPA’s request, according to the agency.

The EPA said the following companies also provided the data voluntarily: BJ Services Co., which was acquired this year by Baker Hughes Inc.; Complete Production Services Inc.; Patterson- UTI Energy Inc.; RPC Inc.; Superior Well Services Inc. and Weatherford International Ltd.

To contact the reporter on this story: Kim Chipman in Washington at Kchipman@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at LLiebert@bloomberg.net.

NEW YORK (AP) — By unlocking decades’ worth of natural-gas deposits deep underground across the United States, drillers have ensured that natural gas will be cheap and plentiful for the foreseeable future. It’s a reversal from a few years ago that is transforming the energy industry.

The sudden abundance of natural gas has been a boon to homeowners who use it for heat, local economies in gas-rich regions, manufacturers that use it to power factories and companies that rely on it as a raw material for plastic, carpet and other everyday products. But it has upended the ambitious growth plans of companies that produce power from wind, nuclear energy and coal. Those plans were based on the assumption that supplies of natural gas would be tight, and prices high.

Billions of dollars’ worth of plans to build wind farms and nuclear reactors have been delayed or scuttled, including Constellation Energy’s Calvert Cliffs nuclear project in Maryland. The company signaled this week it was in peril because of higher-than-expected financing costs.

And coal power, already struggling under tighter environmental regulations, is now under even more pressure. Natural gas emits fewer dangerous chemicals and about half as much carbon dioxide as coal.

The new natural gas discoveries, mostly beneath states in the East, South and Midwest, have kept prices remarkably low, even as demand has begun to come back since the end of the recession.

“We once thought we could face gas shortages and (electricity) brownouts. Now we are facing an enormous oversupply of natural gas,” said Fadel Gheit, senior oil and gas analyst at Oppenheimer and Co. “We have not scratched the surface of potential of gas in the U.S. and across the world.”

The U.S. uses natural gas to produce 21 percent of its electricity. Coal is the dominant fuel, accounting for 48 percent of the electricity mix. By 2015 natural gas is predicted to reach 25 percent while coal is expected to fall to 44 percent.

In the middle of the last decade, natural gas looked to be in short supply. Production in the U.S. was slowing, imports from Canada were rising and plans for importing liquefied natural gas from the Middle East and elsewhere were drawn up.

Natural gas, which had traded at about $2 per 1,000 cubic feet in the 1990s, hit nearly $15 in 2005. It is now about $3.50, driven lower by reduced industrial power demand and rising production by drillers who are learning to make a profit from shale gas at ever lower prices.

Starting in about 2006, after decades of work, natural gas drillers like Devon Energy, EOG Resources and XTO Energy, now owned by ExxonMobil, perfected methods first tried in 1981 that now allow them to cheaply drill down and then horizontally into gas trapped in formations of shale never before thought accessible.

To release the trapped gas, drillers inject a slurry of water, sand and hazardous chemicals deep into the ground to break up rock and create small escape channels, a process known as hydraulic fracturing, or “fracking.”

There is a fear that fluids or wastewater from fracking could contaminate drinking water supplies. Congress has asked the Environmental Protection Agency to study the issue.

But in just a few years, a number of shale gas fields around the country are suddenly producing gas, including the Barnett field in Texas, the Fayetteville field in Arkansas, the Haynesville field in Louisiana and the massive Marcellus field that stretches from Western New York through Pennsylvania, Eastern Ohio and West Virginia.

While these developments are almost certain to boost U.S. gas production for years to come, they will have little effect on imports of foreign oil, at least in the short term. There are proposals to use more natural gas as a transportation fuel, but it is now used mainly to generate electricity, heat homes, and as an industrial feedstock.

A recent study by the Massachusetts Institute of Technology on the future of natural gas found that 80 years’ worth of global natural gas consumption could be developed profitably with a gas price of $4 or below.

Plans for nuclear plants and wind farms were made under the assumption that gas prices would average $7 to $9. At that level, electricity prices would be high enough to make wind and nuclear power look affordable. Now many of these projects suddenly look too expensive.

Plans for three dozen new nuclear plants were drawn up in the middle of the last decade, and the nuclear industry hailed what it called a renaissance. Lawmakers, aiming to help stave off high electricity prices, authorized an $18.5 billion loan guarantee program to help the nuclear industry begin building new plants after two decades of inactivity.

Now almost all of those plans have been delayed or shelved. Even companies that are finalists for federal loan guarantees, NRG Energy and Constellation Energy, announced recently that they have nearly stopped spending on their projects.

Constellation announced last week that it was giving up on its loan guarantee application because the federal government’s terms were too restrictive. Analysts say low natural gas prices are making the project uneconomic. NRG chief executive David Crane said he will not pursue the company’s two-reactor project in South Texas if gas prices stay low, even if his project is offered a loan guarantee.

“Clearly $4 gas challenges the economics of just about every other form of electricity generation,” says Richard Myers, vice president for policy development at the Nuclear Energy Institute, an industry group. “If you take a snapshot, today, it looks bleak.”

The wind industry is also suffering. Antonio Mexia, chief executive of the Portuguese utility EDP, which is the third-largest wind power producer in the world and owner of Houston-based Horizon wind, said in a recent interview that the company plans to reduce wind investments by 75 percent in the U.S. between this year and next.

Nationwide, the wind industry installed enough wind turbines to supply electricity to 2.6 million homes in 2009, a record. This year wind turbine construction will likely fall 40 percent, and next year Mexia predicts that it could fall again, by as much as half. Federal subsidies for renewable energy projects reduce costs by some 30 percent, but that is not enough to help the wind-power industry compete with natural gas these days, he says.

In much of the country it is still cheaper to produce power by burning coal than natural gas, but coal, too, is being threatened. Coal power is becoming more expensive because environmental regulations are forcing utilities to install new emission control equipment.

With natural gas so cheap, in many cases it will be less expensive to switch to gas than it will to install new emission equipment and continue to burn coal. Dan Eggers, an analyst at Credit Suisse, wrote in a recent report that 60 gigawatts of coal-fired plants — enough to power 35 million homes — will likely be shut down between 2013 and 2017.

Meanwhile, natural gas drillers are spending money and adding jobs. A recent report by Pennsylvania State University, commissioned by a natural gas industry group, predicts that in 2010 drilling in Pennsylvania’s shale formations will add 89,000 jobs and inject $8 billion in spending into the state.

And consumers of natural gas are welcoming low prices. Analysts predict heating bills this winter could be as low or lower than last year and sharply lower than in recent years. Through the first six months of 2010, average residential gas prices were 9 percent lower than for the same period in 2009 and 18 percent lower than in 2008, according to the Energy Information Administration.

While most signs now point to low and stable natural gas prices for years to come, it is not a sure thing.

If regulations tighten or drilling methods are forced to change over environmental concerns, prices could rise.

Also, when the economy recovers to pre-recession strength, gas demand may rise enough to send prices higher, some analysts say.

“We have plenty of gas,” says George Shiau, a partner and energy expert at the hedge fund Copia Capital. “We’ve yet to test what happens when demand spikes.”

And though burning natural gas for power is far cleaner than burning coal, burning it still produces carbon dioxide. Alternatively, wind and nuclear power generation are carbon-free.

“We don’t want natural gas to become our next big climate problem,” said Ashok Gupta, Senior Energy Economist at the Natural Resources Defense Council.

Bloomberg – Petroleo Brasileiro SA said a discovery in Peru may hold 1.7 trillion cubic feet of recoverable natural gas, enough to more than double the company’s foreign reserves of the fuel.

Petrobras, as Brazil’s state-controlled company is known, discovered gas in the Picha 2X well in Block 58 in Peru’s Cuzco department, according to a regulatory filing today. Gas was found in a previous well, Urubamba 1X, in 2009, Petrobras said.

The find could more than double Petrobras’s 1.2 trillion cubic feet of natural-gas reserves outside of Brazil, based on U.S. Securities and Exchange Commission guidelines. Petrobras says on its website that it has total reserves, including from Brazilian deposits, of 11 trillion cubic feet.

Petrobras is exploring for gas in Peru near Camisea, the Andean country’s largest gas fields. Petrobras plans to drill a third well at Block 58 before year-end, Peruvian Energy Minister Pedro Sanchez said in July.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at Pmillard1@bloomberg.net

Shares of NiSource, Inc. (NYSE:NI) booked a new 52 week high today by trading above $17.16, traders are definitely monitoring NiSource’s price action to see if this move attracts further buying into the stock.

NiSource Inc. (NYSE:NI), an energy holding company, thorugh its subsidiaries provide natural gas, electricity and other products and services to customers located within a corridor that runs from the Gulf Coast through the Midwest to New England.

NiSource is currently trading 1.81% versus its previous trading session close, and it has calculated support and resistance at $14.19 and $17.15 respectively. Clearly with this action this range has been penetrated, and traders will be reviewing price action to establish a new tradable range

The overall market index S&P 500 is trading higher by 1.27% from its previous trading close, which means that NiSource stock is outperforming the overall market.

SAN FRANCISCO (MarketWatch) – Crude-oil futures rose Friday, tracking narrow gains in U.S. stocks and buoyed by growth in wholesales inventories that met expectations.

Crude for August delivery added 69 cents to $76.15 a barrel on the New York Mercantile Exchange.

The crude contract fluctuated in early floor trading but gathered steam as U.S. stocks built modest buying momentum. Technology stocks propped up the main equity indexes. Read more about stocks.

Stocks are oil’s “latest hangout buddies,” said Peter Beutel, president of trading advisory firm Cameron Hanover in Connecticut. Prices are likely to move in tandem with stocks in the absence of other news and supply data, he added.

“The assumption is if the stock market is higher, it implies increased economic activity” and therefore more demand for oil, Beutel said.

In the one bit of U.S. economic news out Friday, wholesale inventories rose in May as warehouses were restocked with durable goods, a government report showed. Wholesale sales dropped a little, but they were up 15% from May 2009.

“As long as we have the economy stable — not great, but stable — we are going to see higher oil prices,” said Carl Larry, president of Oil Outlooks and Opinions in Houston. “We know the commercial side of America is growing. … People are buying goods, and these goods have to be made, they have to be delivered, and people have to drive to buy them.”

Oil futures snapped a six-session losing streak early this week amid hopeful signs about the global economic recovery. Reports of boosted global oil demand and a surprisingly large decrease in stockpiles also lent support to prices earlier in the week.

On Wednesday, the Energy Information Administration revised its forecast, saying it underestimated oil consumption in 2009. The agency expects global oil demand to rise by 1.5 million barrels a day in 2010 and 2011.

And on Thursday, the EIA reported a decline of 5 million barrels in the nation’s crude inventories last week.

Meanwhile, natural gas for August delivery reversed higher, adding 4 cents, or 0.8%, to $4.44 per million British thermal units. August reformulated gasoline gained a penny to $2.06 a gallon.

But for the week, natural gas has lost 6% so far. Gasoline futures have gained 3.9% this week.

The dollar index (DXY 83.94, +0.11, +0.13%) , which compares the U.S. unit to a basket of six other currencies, added 0.1% to 83.93. A stronger dollar usually pressures commodities prices as it makes them more expensive to holders of other currencies, but the stock market gains cancelled out that dynamics for Friday.

The euro (CUR_EURUSD 1.2644, -0.0052, -0.4095%) was marginally lower after hitting a two-month high on Thursday.

Claudia Assis is a San Francisco-based reporter for MarketWatch.
Cynthia Lin is a MarketWatch reporter based in New York.

By KRISTINA PETERSON – U.S. stocks climbed as the energy sector rallied and strengthening home sales helped boost sentiment.

The Dow Jones Industrial Average rose 113 points, or 1.10%, to 10137, with all of its components in the black. Walt Disney led the measure’s gains, lifted by comments from Chief Executive Robert Iger who said at an investor conference that it’s too early to discount the ability of media companies to drive revenue from emerging new media platforms.

Hewlett-Packard rose 1.7% after the company received antitrust approval to acquire Palm. Palm, which isn’t a Dow component, edged up 0.5%.

The Dow’s other top gainers Wednesday included Alcoa, which climbed 0.7% and Caterpillar, which rose 1.1%. Both stocks fell Tuesday as investors worried about how the companies could be affected by China’s efforts to slow its growth and economic struggles in the euro zone.

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The Nasdaq Composite climbed 1.3%. The Standard & Poor’s 500-stock index rose 1.3%, with all its sectors in the black, led by the energy and materials sectors. The energy sector’s gains came as crude-oil futures rose above $73 a barrel.

American depositary shares of BP rebounded 3%, erasing part of its Tuesday tumble, which had come as the U.S. Justice Department opened a criminal investigation into the oil spill in the Gulf of Mexico. Among other energy stocks that bounced back from Tuesday’s sharp declines, Halliburton jumped 9%, Smith International rose 7.2% and Schlumberger rose 6.7%.

Investors said while the investigations cast a shadow on the companies in focus, other stocks may have fallen to attractive prices.

“There’s no doubt that the short-term prospects there are cloudy at best, but again there’s some particular sectors [within energy] that would be less affected,” said Jim Dunigan, managing executive of investments at PNC Wealth Management.

Other broad gains came as investors were encouraged by an increase in U.S. pending home sales in April. The result surpassed expectations as buyers signed contracts to collect a government tax credit.

Cautious investors hoped that Friday’s government jobs report would give the market more direction after several days of back-and-forth swings.

“There’s a lack of concensus on the sustainability of the recovery,” Mr. Dunigan said. “We’ll need some positive job numbers in June and we’ll need them in July and August as well. We’re a little bit in no-man’s land at the moment.”

The U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, climbed 0.4% recently. However, other safe-haven assets—Treasurys and gold—were lower. The yield on the 10-year note edged up to 3.30%.

Markets Hub: Energy Sector in Spotlight
3:36
As the oil spill continues to dominate news, other energy companies besides BP are starting to feel market pressure. Dow Jones Newswires’s Paul Vigna, Stephen Wisnefski and Madeleine Lim discuss.

Overseas, Japanese Prime Minister Yukio Hatoyama said he will quit less than nine months after taking office, a change that could fray ties with the U.S. and frustrate other allies seeking greater cooperation and leadership from Tokyo. The Nikkei Stock Average closed 1.1% lower in Tokyo, and the dollar rose against the Japanese yen, following the sudden resignation.

The dollar also strengthened against the euro, which fell to $1.2204. Euro-zone banks placed a record €316.4 billion ($387.1 billion) in the European Central Bank’s ultra-safe overnight deposit facility, ECB data showed Wednesday.

Also in the euro zone, the Greek government announced long-delayed plans to privatize state-owned companies as part of its attempt to fix the country’s public finances and chip away at the public debt. Meanwhile, Germany and France continued to draw apart on regulatory changes Wednesday, when the German cabinet approved an extended ban on certain short-sales of securities.

In the U.S., the first of a series of employment reports was released Wednesday, with outplacement consultancy Challenger, Gray & Christmas saying major U.S. corporations cut 38,810 jobs in May, a 1.3% increase from the 38,326 in job cuts last month. Figures on private-sector employment are due Thursday and the government’s nonfarm payrolls report is set to be issued Friday.

Among companies in focus, Amgen jumped 8.8% after the drug maker received U.S. Food and Drug Administration approval for Prolia to treat osteoporosis in postmenopausal women. The approval comes almost two months earlier than expected.

Collective Brands fell 11%. The footwear retailer’s fiscal first-quarter profit rose 43% on higher margins and international sales growth, but same-store sales declined slightly. The company’s revenue also came in below Wall Street’s expectations.

Write to Kristina Peterson at kristina.peterson@dowjones.com