Biofuels Stock and Financial Outlook for August 31

August 31, 2007

Biofuels stocks will be looking to rise today on the strength of Lehman Brothers’ upgrade of the ethanol sector from “Neutral” to “Positive” and a suggestion that passage of favorable energy legislation this year is greater than 50/50.

US biodiesel producers, and refiners will be looking for more investor interest after Volvo announced a new demonstration line of trucks designed for alternative fuels. Ethanol stocks will look to capitalize on stabilizing corn prices, and all sectors may get a lift on news from Nielsen that the term “sustainability” has increased 169% on the Nielsen BuzzMetrics Report for the second quarter.

The nation’s first renewable fuels standard, RFS, goes into effect on September 1st. The program requires that 4.7 billion gallons of US fuels will have to be blended with alternative fuels.

The broader markets were down slightly yesterday, with the Dow Jones industrials down 0.4%, or 50.56 points, to 13,238.73, while the S&P 500 was down 6.14 points to close at 1457.64%. The Nasdaq managed a small gain for the day, up 2.14 points to 2565.30.

The markets are likely to be dominated today by continued speculation about potential rate cuts by the Federal Reserve, and a proposal expected from the White House today aimed at easing the fast-rising rate of subprime mortgage defaults.

The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 1.89% percent yesterday to 102.23 as an improved outlook for ethanol overshadowed increasing worries about the credit market that dragged down the market as a whole.

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Written by Jim Lane · Filed Under Biofuels Digest Index (BDI), Stock & Financial Outlook