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Refinery fire in Indiana may have spooked investors

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The major indexes have started giving back about one-third of today's gains in the past hour on what may be a sign of continued jitters among investors for acts of terrorism.

At approximately 02:49 PM EST, Reuters reported that BP-Amoco (NYSE:BP) $38.91 +0.93% said that a fire at its 410,000 barrel- per-day refinery in Whiting, Indiana, has been contained, while adding that the refinery has not been shut down.

"There is a fire at the plant and we have it contained. The plant continues to operate," said a BP spokesman.

BP officials did not comment immediately on details of how the fire started, number of persons injured (if any), or what part of the plant was affected. The refinery is located near Chicago.

CNBC reported that a catalytic converter may have overheated and ignited the blaze.

The news came when the Dow Industrials (INDU) 8,006 +1.23% was still hovering near its WEEKLY R1 level of resistance of 8,053, and not far from our 11:00 intra-day update. With the Dow now up 97-points and giving back about 70-points from its session high, I'm left to wonder if the recent pullback isn't from some institutional selling near a "zone of resistance" as discussed this morning, or perhaps some trader's initial "fears" of potential terrorism at the refinery. All indications current hitting the newswires is that the fire is an accident, and not terrorist related.

The broader S&P 500 Index (SPX.X) 847 +1.47% is currently up 12.5 points and off its best levels of 852 and not unlike the Dow has edged lower in the last hour of trade. The tech-heavy NASDAQ-100 Index (NDX.X) 1,005 +2.42% holds above the psychological 1,000 level, but looks to have softened from its highs of 1,013, taking lead from some late weakness in both the Dow and SPX.

In prior months, utilities along with U.S.-based oil refineries underwent heightened security precautions on the thought that they might become terrorist targets from any "terrorist cells" located in the U.S..

Treasuries finished their session mixed with the longer-dated 30- year futures (us03h) 112'200 +0.25% and 10-year futures (ty03h) 114'285 +0.05% reversing earlier losses to finish in marginally positive territory. Meanwhile, the shorter-dated 5-year (fv03h) 113'045 -0.01% finished fractionally positive.

Sector action remains broadly positive with the Defense Index (DFX.X) 140.47 -1.11% the only sector now in the red. The Gold/Silver Index (XAU.X) 72.26 +0.18% now holds a marginally positive gain. As mentioned earlier, the XAU.X has been hovering either side of unchanged for the bulk of today's session.

Jeff Bailey

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