Biofuels Stock and Financial Outlook for September 4

The US stock market reopens today after the Labor Day holiday with the broader markets prepared to move downwards at the opening, but with biofuels sector unlikely to move sharply until it is clear whether remarks by President Bush and Fed chairman Ben Bernanke have eased fears of a credit crunch brought on by the sub-prime mortgage meltdown. A slowdown in capital formation has hampered US production capacity expansion.

Reports on US manufacturing, construction spending and auto sales are scheduled for Tuesday.

The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 0.4% Friday to 102.61 as credit crunch fears subsided on the heels of supportive pronouncements by President Bush and Federal Reserve Chairman Ben Bernanke.

At the Friday bell, VeraSun (VES) was up $0.30 to $12.95, Aventine (AVR) up $0.15 to $14.31, while US BioEnergy (USBE) was down $0.10 to $10.41. Sector giant Archer-Daniels-Midland (ADM) was up $0.11 to $33.70, while Earth Biofuels (EBOF.OB) was up sharply and Better Biodiesel (BBDS.OB) was up 5.9% to $1.80.

In the broader markets, the Dow Jones Industrials were up 119.01 to 13,357.74, the S&P 500 rose 16.35 to 1473.99, and the Nasdaq was up 31.06 to 2596.36.

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