US commodities trader Enron Wednesday halted online metals trade at 1600 GMT, traders in London said. "You can already see a huge drop in liquidity. Copper jumped immediately. It will leave a huge hole in the market," said one London metals analyst. The red metal traded at $1,544-56/mt, basis LME three-months, at 1655 GMT, up from its open at $1,538/mt.
The other base metals sat tight as the market awaited direction, noted one trader. "Enron's online system went down after the shares stopped trading and the metals rallied, in particular copper, as Enron was rumored to be short," commented an LME ring dealing member. The suspension of online trade followed a halt in trade of Enron shares on the New York Stock Exchange at 1558 GMT at 2.70/share.
The suspension of trade came after Enron's share price plummeted following a report from Standard & Poor's that said it had slashed Enron's long-term corporate credit rating to junk bond status (1605 GMT). Trading resumed at 1627 GMT.
Shares of Dynegy, which was in negotiations to buy Enron, were trading at $30.20/share Wednesday, off 9% from Tuesday's close of $40.89. Enron spokespersons were unavailable for immediate comment, while sources inside Dynegy said that it was pulling out of its deal to buy Enron. They said management would announce the pullout soon |
