By Greg Peel

The Dow closed up 37 points or 0.3% while the S&P gained 0.4% to 1215 and the Nasdaq fell 0.2%.

Beijing has spent the last two years tightening monetary policy and lending conditions, and as result it has become increasingly difficult for smaller players in the Chinese Miracle to secure renminbi loans. To overcome this difficulty a popular strategy has been to borrow money outside of China and with the proceeds buy copper. A copper stockpile then becomes physical collateral against a previously unavailable renminbi loan.

This black or "grey" lending market has developed to the point a lot of Chinese are sitting on a lot of copper. But yesterday Beijing announced it would crack down on such activity. One assumes those holding a loan against their copper will now have to sell the copper to pay back the loan.

Last night copper fell 5.5% on the LME. Tin fell 2%, aluminium and nickel 3%, lead 4% and zinc 5%. The falls came at a time when base metals markets are jittery over Europe and increasingly concerned about slowing Chinese growth. They also came on a day when the French and German stock markets fell 2.5%. The reason for European stock weakness was, yet again, a spurious newspaper report.

Germany's Die Welt reported last night that the German government hadn't ruled out again delaying the EU summit. The summit had already been shifted back over a week to this Sunday, and given Wednesday night's news was that talks between the usual suspects had stalled, the newspaper report was not unbelievable. Nor was it the least bit encouraging.

The report also had the Dow down over 100 points at lunch time. But then, yet again, an official clarification needed to be made. A joint statement from Paris and Berlin announced that the summit would go ahead as planned. There would nevertheless be no announcement made at the end of the summit, but rather a "definitive" plan would be announced on Wednesday following another meeting.

Earlier in the week Angela Merkel had warned that the deadline for any announcement was the November 3 meeting of G20 leaders in Cannes. Merkel was trying to play down the apparent market view that the world would be saved by Monday. So to commit to a definitive announcement by Wednesday actually brings that deadline forward, one might suggest. It's good news, because having to wait until November 3 would only be a recipe for more volatility based on ill-informed media speculation. We still now have to wait for Wednesday, so we're back to five more sleeps.

The French-German announcement came after European stock markets and the LME had closed. Wall Street still had the afternoon left however, and the Dow bounced to close up 37. This past week we haven't really gone anywhere other than up and down a lot. The same can't be said for copper.

If Wall Street was at all able to focus solely on what's going on at home, the news has been mostly good this week. Earnings reports have been mixed but not nearly as bad as some had feared. Economic data, on the other hand, have been quite positive. Last night the release of the Philadelphia Fed manufacturing index showed a jump to plus 8.7 from minus 17.5 last month in this zero-neutral measure. It is the first positive reading in three months. The Conference Board leading economic index showed an increase 0.2% in September to mark the fifth straight month of indicative growth. The pace of growth has nevertheless been falling, from 0.3% in August and 0.6% in July.

This month tougher new regulations on "jumbo" mortgages (bigger than about US$700k) came into effect in the US and these were blamed for a 3% fall in new home sales in September, which met forecasts.

When base metals prices were falling last night the euro was weak and the US dollar index higher. The later Wall Street bounce saw the euro rally again and the dollar index fall 0.25% to 76.93. The Aussie is 0.2% higher at US$1.0247 which would suggest currency markets expect base metals to recover somewhat when they get the chance tonight. All things being equal that is. Brent oil finished up US$1.37 to US$109.36/bbl last night while West Texas fell US81c to US$85.30/bbl.

Oil markets had closed before the news came through this morning that Gaddafi had been in Sirte all along, and is now deceased. In theory this should mean lower oil prices as expectations grow for a rapid return to once normal Libyan production and export.

Gold has continued to lose favour this week as a safe haven against European disaster, the closer we get to the "definitive" plan. It was down US$20.70 to US$1621.20/oz.

The SPI Overnight was up 13 points or 0.3%.

After the bell, Microsoft (Dow) posted a result largely in line with expectations. Its shares are down 1% in the after-market. Tech stock weakness has been the theme ever since Apple's poor result earlier in the week, and last night shares in PC leader Dell fell 5% on reports that the floods in Thailand will disrupt the supply of relevant components.

Eurozone finance ministers are meeting tonight, and then the EU summit begins on Sunday. We now know not to expect anything until Wednesday, which is a bit like telling a kid Christmas is being held off for a couple of days. The US reporting season rolls on next week.

On the local front, today sees a full-year result from Ten Network ((TEN)) and quarterly reports from Woodside ((WPL)) and News Corp ((NWS)).

I'll be appearing on Sky Business today at 2pm and Rudi will appear on the BRR network's Round Table at 3pm.