Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Euro Weakens as Greek Aid Plan Falters; Stocks, Crude Decline
By David Merritt
March 18 (Bloomberg) -- The euro weakened and Greek stocks and bonds fell on concern a bailout plan for the region’s most indebted country is unravelling. The yen and dollar appreciated while oil declined.
The euro slipped against 14 of its 16 most traded counterparts, depreciating 0.6 percent against the yen at 11:25 a.m. in London. Greece’s ASE Index of stocks slid 3.1 percent and the extra yield investors demand to hold the nation’s debt instead of German bunds increased. Oil fell as much as 1 percent. Futures on the Standard & Poor’s 500 Index declined 0.1 percent.
Greece should turn to the International Monetary Fund if it needs aid, Michael Meister, a lawmaker with Chancellor Angela Merkel’s Christian Democratic Union, said in an interview in Berlin. That contradicts comments from leaders including Jean- Claude Trichet, Jean-Claude Juncker and Nicolas Sarkozy, who have said the region should solve its own financial problems as officials contemplate establishing a European Monetary Fund.
“It appears that the rift between Greece and Germany is much deeper than assumed and Greece could be much closer to turning to the IMF than previously assumed by the market,” a team led by Hans Guenter Redeker, global head of foreign- exchange strategy at BNP Paribas SA in London, wrote in a report today. “This brings the recent optimism regarding the euro to an abrupt halt.”
Greek Spread
The 16-nation currency dropped 0.5 percent to $1.3667. The euro has weakened 4.8 percent this year and the ASE declined 7.8 percent as Greece struggled to finance its budget deficit, which at 12.7 percent of gross domestic product is the biggest in the EU. The difference in yield, or spread, between 10-year Greek bonds and bunds widened to 396 basis points in January, the most since before the euro’s introduction in 1999. The gap widened 13 basis points today, to 313.
The yen climbed 0.5 percent to 123.36 per euro and less than 0.1 percent to 90.26 against the dollar, strengthening against 15 out of 16 of its most-traded peers.
The MSCI World Index of 23 developed nations’ stocks fell 0.2 percent. In Asian trading, Canon Inc., which counts Europe as its biggest market, lost 2.8 percent in Tokyo. Mitsui Fudosan Co., Japan’s largest developer, dropped 2.4 percent after Morgan Stanley downgraded the stock.
Three stocks declined for every two that advanced on the Stoxx Europe 600 Index, which was little changed. Total SA, the third-largest European oil company, fell 0.8 percent in Paris after Goldman Sachs Group Inc. recommended selling the shares. National Bank of Greece SA, the nation’s biggest lender, plunged 5.1 percent in Athens, its biggest drop in three weeks.
Glaxo Gains
Declines were limited as GlaxoSmithKline Plc, Britain’s biggest drugmaker, jumped 2.6 percent. Novartis AG abandoned the U.S. rights to an asthma drug that would rival Glaxo’s Advair.
U.S. futures were little changed after the S&P 500 yesterday reached its highest level since September 2008. A report from the Labor Department at 8:30 a.m. in Washington may show that the cost of living in the U.S. rose at a slower pace in February, restrained by lower gasoline prices and a stagnant home-rental market. The consumer price index may have climbed 0.1 percent after a 0.2 percent increase in January, according to the median forecast of 79 economists in a Bloomberg survey.
Another report from the Labor Department, also set for 8:30 a.m., may show initial claims for unemployment insurance benefits dropped to 455,000 last week, the fewest in two months, from 462,000 the prior week, according to the survey median.
Emerging Markets
The MSCI Emerging Markets Index fell 0.1 percent, snapping a two-day advance. Turkish bonds dropped for the first time in six days and the lira weakened for the first day in five after the Taraf newspaper reported prosecutors are ready to file a second attempt to outlaw Prime Minister Recep Tayyip Erdogan’s governing party. Turkey’s ISE National 100 index of stocks fell 1.3 percent.
Teva Pharmaceutical Industries Ltd. rose 1.5 percent in Tel Aviv. The Israeli drugmaker is close to an agreement to buy Ratiopharm GmbH for about 3.5 billion euros ($4.78 billion), ending a nine-month battle for Germany’s second-biggest maker of generic medicines, two people with knowledge of the sale said.
Oil prices retreated from a 10-week high after the dollar gained and a government report yesterday showed rising U.S. crude inventories. Crude oil for April delivery dropped 52 cents, or 0.6 percent, to $82.41 a barrel in electronic trading on the New York Mercantile Exchange.
Copper for delivery in three months fell 0.4 percent to $7,502 a metric ton on the London Metal Exchange. Aluminum, zinc and tin also declined. Wheat dropped 1.4 percent to $4.8875 a bushel in Chicago and corn retreated 1 percent to $3.7025 a bushel.
To contact the reporter on this story: David Merritt in London on dmerritt1@bloomberg.net.
Last Updated: March 18, 2010 07:27 EDT
Copper Falls in London as Dollar Gains on Concern About Greece
By Anna Stablum
March 18 (Bloomberg) -- Copper fell in London as the dollar strengthened on concern that Greece will fail to secure financial assistance from the European Union.
The dollar rose against the euro for a second day, climbing as much as 0.7 percent. Gains by the U.S. currency make dollar- priced commodities more expensive for holders of other monies. Raw materials from oil to wheat declined.
“The impact that the volatility in the euro is having is substantial for all commodity markets,” Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London, said by phone. “They are all moving in lock step with what is happening in Greece and the result in the euro-dollar rate.”
Copper for delivery in three months fell $54, or 0.7 percent, to $7,480 a metric ton at 9:42 a.m. on the London Metal Exchange. Copper for May delivery slid 0.7 percent to $3.394 a pound on the Comex in New York. All of the six main metals traded on the LME dropped, led by zinc.
Concern about Greece’s ability to reduce its budget deficit has caused the euro to slump 4.4 percent against the dollar in 2010. The single European currency weakened today after a Greek official was cited as saying the country had little hope of aid from a European Union summit next week and may seek help from the International Monetary Fund.
China’s Economy
“Where you have a strengthening dollar, because the euro is weakening, that is not good for base-metal prices,” Brown said.
Concern about the possibility of an overheating economy in China, the world’s biggest copper user, also contributed to the drop, according to Brown. LME copper slid to a two-week low of $7,270 a ton on March 15 on concern that interest rates might increase in the Asian nation.
“We are slightly cautious about the situation in China, with inflation being a potential problem,” Brown said. “We don’t think the Chinese authorities are in a position to support growth as strong as they would like.”
Stockpiles of copper in LME-monitored warehouses fell for a 12th day to 524,175 tons, the lowest level since Jan. 18. The streak of declines is the longest since June.
“Generally we think the outlook is a little bit better,” Brown said. Demand traditionally increases in the second quarter, particularly from China, he said.
Zinc, Lead
“We are optimistic on all the base metals,” he said. “We particularly like copper, zinc and lead.”
Zinc for three-month delivery on the LME fell 0.9 percent to $2,327 a ton. Lead dropped 0.4 percent to $2,245 a ton.
Commodities drew $3.98 billion of investment last month, almost 29 times January’s amount, favoring investments linked to indexes over exchange-traded products, Barclays Capital said. Total commodity assets under management, also bolstered by price gains, expanded to $255 billion after dropping $12 billion to $245 billion in January, it said. Inflows in January were $139 million.
Nickel fell 0.2 percent to $22,214 a ton. BHP Billiton Ltd., the world’s biggest mining company, said its Australian Kwinana refinery may not restart for two weeks after shutting down on March 15.
Aluminum for three-month delivery fell 0.2 percent to $2,290 a ton and tin dropped 0.7 percent to $17,620 a ton.
To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.
Last Updated: March 18, 2010 05:56 EDT
Gold May Drop for a Second Day as Stronger Dollar Cuts Demand
By Nicholas Larkin and Glenys Sim
March 18 (Bloomberg) -- Gold, little changed in London today, may decline for a second day as a strengthening dollar curbs demand for the metal as an alternative investment.
The dollar gained as much as 0.7 percent against the euro amid concern that Greece will fail to secure financial assistance from the European Union. Gold typically moves inversely to the greenback.
“The weaker euro has lent further pressure to gold and silver this morning and will continue to provide short-term direction,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. While a drop below the 100-day moving average at $1,118 “could trigger additional technical related pressure,” dips will likely find “strong support.”
Gold for immediate delivery added $1.26, or 0.1 percent, to $1,121.61 an ounce at 9:15 a.m. local time. Bullion for April delivery was 0.2 percent lower at $1,121.60 on the Comex in New York.
Michael Meister, the chief finance spokesman for German Chancellor Angela Merkel’s party, said yesterday that Greece should turn to the International Monetary Fund if it needs aid. Greece may seek aid from the IMF during the April 2-4 weekend, Dow Jones Newswires reported.
“As long as there isn’t a clear resolution of the debt issue in Europe, gold will continue to be supported in the current range,” Wang Honggang, a metals analyst at CIFCO Research Institute, said from Hubei today. “The performance of the dollar and the euro will drive gold for now.”
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, were unchanged for a fifth day at 1,115.51 metric tons yesterday.
Among metals for immediate delivery in London, silver fell 0.4 percent to $17.385 an ounce. Platinum declined 0.2 percent to $1,628.57 an ounce and palladium lost 0.5 percent to $476.25 an ounce.
To contact the reporterS on this story: Glenys Sim in Singapore at gsim4@bloomberg.net; Nicholas Larkin in London at nlarkin1@bloomberg.net.
Last Updated: March 18, 2010 05:25 EDT
U.S. Index Futures Are Little Changed; Bank of America Drops
By Daniela Silberstein
March 18 (Bloomberg) -- U.S. stock-index futures were little changed after a German official said Greece should turn to the International Monetary Fund if it requires a bailout and as investors awaited inflation figures and weekly jobless claims.
Bank of America Corp., the biggest U.S. bank by assets, and Wells Fargo & Co. both fell more than 0.5 percent. Nike Inc. climbed 1.6 percent after saying profit more than doubled.
Standard & Poor’s 500 Index futures expiring in June slipped 0.1 percent to 1,159.7 as of 11:08 a.m. in London. Dow Jones Industrial Average gained less than 0.1 percent to 10,665 and Nasdaq-100 Index futures declined less than 0.1 percent to 1,933.
U.S. stocks rose yesterday, sending the Dow Jones Industrial Average to the highest level since October 2008, on evidence the economic recovery isn’t stoking inflation.
“Greece is not off the table,” said Urs Eilinger, Zurich- based chief investment officer at Infidar Investment Advisory Ltd., which manages about $3.2 billion. “We haven’t had a clear commitment that Greece will be helped. After markets reached new highs investors question what the next fear could be and whether the rally was justified. A negative surprise today could put more pressure on the market.”
The S&P 500 closed at 1,150.23 on Jan. 19, the highest level since October 2008, and then plunged 8.1 percent through Feb. 8 on concern that European nations including Greece will fail to pay back debt and speculation that the Fed will need to rein in emergency stimulus measures as the economy improves. The index has since erased that loss and extended its rebound since March 9, 2009, to 72 percent.
Greece
Michael Meister, the chief finance spokesman for German Chancellor Angela Merkel’s party, said attempting a Greek rescue without the IMF “would be a very daring experiment.”
Greece may seek aid from the IMF over the April 2 to April 4 Easter weekend, Dow Jones said today, citing a senior Greek official it didn’t name.
The cost of living in the U.S. probably rose at a slower pace in February, restrained by lower gasoline prices and a stagnant home-rental market, economists said before a government report at 8:30 a.m. in Washington.
The consumer price index may have climbed 0.1 percent after a 0.2 percent increase in January, according to the median forecast of 79 economists in a Bloomberg News survey. Other reports today may show fewer Americans applied for jobless benefits, manufacturing in the Philadelphia region accelerated and a gauge of the outlook for growth climbed.
Bank of America
Bank of America dropped 0.9 percent to $17.12 in early New York trading. Wells Fargo, the largest U.S. home lender, slipped 0.6 percent to $30.36 in Germany.
Nike climbed 4.8 percent to $74.30 in New York. The world’s largest maker of athletic shoes said third-quarter profit more than doubled, beating analysts’ estimates, as North America posted a sales increase for the first time in a year.
Broadcom Corp. advanced 1.8 percent to $34.20 in Germany. The maker of semiconductors for wireless headsets and television set-top boxes was upgraded to “buy” from “neutral” at Goldman Sachs Group Inc.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
Last Updated: March 18, 2010 07:10 EDT
Oil 82.37
Oil 82.37
Futures
North/Latin America
INDEX VALUE CHANGE OPEN HIGH LOW TIME
DJIA INDEX 10,672.00 +9.00 10,665.00 10,684.00 10,645.00 08:01
S&P 500 1,160.80 -0.20 1,160.80 1,164.00 1,157.10 08:01
NASDAQ 100 1,934.00 +0.00 1,935.25 1,936.25 1,931.00 08:01
Futures
North/Latin America
INDEX VALUE CHANGE OPEN HIGH LOW TIME
DJIA INDEX 10,672.00 +9.00 10,665.00 10,684.00 10,645.00 08:01
S&P 500 1,160.80 -0.20 1,160.80 1,164.00 1,157.10 08:01
NASDAQ 100 1,934.00 +0.00 1,935.25 1,936.25 1,931.00 08:01
sorry to hear that...you ft trading now or looking for another FLEX?
I've been so busy here at hopkins the last few weeks I've had very little time to trade...off to Tampa this weekend for an anesthesiology interview..
how have you been...?
and the saga continues...
Gm all
djia -60 oil 78.21
U.S. Economy: Consumer Prices Increase Less Than Anticipated
By Timothy R. Homan
Feb. 19 (Bloomberg) -- The cost of living in the U.S. rose in January less than anticipated and a measure of prices excluding food and fuel fell for the first time since 1982, indicating the recovery is generating little inflation.
The consumer-price index increased 0.2 percent for a fifth straight month, led by higher fuel costs, Labor Department figures showed today in Washington. Excluding energy and food, the so-called core index unexpectedly fell 0.1 percent, reflecting a drop in new-car prices, clothing and shelter.
Retailers such as Wal-Mart Stores Inc. have reduced prices to lure customers at a time when most employers are reluctant to hire. Restrained inflation will allow Federal Reserve policy makers to keep the benchmark interest rate close to zero to help support the recovery.
“The broader picture remains one of subdued inflation, and this gives the Fed ample reason to stay on the sidelines until at least very late in the year,” said Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, who forecast no change in the core index.
Economists projected the consumer-price index would rise 0.3 percent in January from a month earlier, according to the median of 78 estimates in a Bloomberg News survey. Estimates ranged from no change to a gain of 0.6 percent.
The core index, which fell for the first time since December 1982, was forecast to rise 0.1 percent, according to the Bloomberg survey.
Treasuries, Stocks
Stocks trimmed losses, with the Standard & Poor’s 500 Index declining 0.1 percent to 1,105.78 at 10:55 a.m. in New York, after falling as much as 0.5 percent.
Federal Reserve Bank of New York President William Dudley said the world’s largest economy is recovering with stronger- than-expected growth and fewer job losses.
“We currently expect that the economy will keep expanding but at a somewhat slower growth rate than during the second half of 2009,” Dudley said today in a speech in San Juan, Puerto Rico. “With modest growth, we expect price pressures to remain well contained.”
Dudley also said after his speech that the Fed’s increase yesterday of the discount rate was a “small technical change” that doesn’t signal a shift in monetary policy. The Fed’s Board of Governors raised the rate for direct loans to banks by a quarter-point to 0.75 percent, effective today.
Compared with January 2009, the CPI rose 2.6 percent after climbing 2.7 percent the previous month. The year-over-year gains in the consumer price index have been getting bigger as crude oil prices increase from an almost five-year low in December 2008.
Higher Energy Costs
Energy costs jumped 2.8 percent in January, led by higher prices for fuel oil and gasoline, today’s report showed. The cost of crude oil on the New York Mercantile Exchange averaged $78.40 last month, up from $74.60 in December. Gasoline prices increased 4.4 percent, the most since August.
Food costs, which account for about 15 percent of the CPI, increased 0.2 percent in January, reflecting higher prices for dairy products, meat and fruits and vegetables.
Shelter costs that include lodging away from home and rental properties fell 0.5 percent. Owners-equivalent rent, one of the categories used to track rental prices, fell 0.1 percent last month after no change.
New-car prices fell 0.5 percent in January, the most since August, and apparel costs dropped 0.1 percent. Medical-care costs rose 0.5 percent in January, the biggest gain in two years.
Airline Fares
Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets. Airline fares fell 2.5 percent in January, the most since February 2009.
The CPI is the broadest of the three monthly price gauges from the Labor Department because it includes goods and services. Reports this week showed 1.4 percent gains in both the cost of imported goods and wholesale prices in January. Both increases were more than anticipated.
Even with higher production and material costs, U.S. companies are reluctant to pass on the expenses to consumers. Wal-Mart, the world’s largest retailer, reported fourth-quarter sales yesterday that trailed its projection after cutting grocery and electronic prices.
The Bentonville, Arkansas-based company reduced the cost of laptop computers, along with turkeys and cranberry sauce for holiday meals, to attract shoppers living paycheck to paycheck. “We see the influence of the paycheck cycle as pronounced now as it’s been in the past,” Chief Financial Officer Tom Schoewe said on a call with reporters.
To contact the reporters on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Last Updated: February 19, 2010 10:57 EST
Djia +17. Oil 79.29
always nice when a girl says to you "have a nice VD" lol
US Sen Reid Hopes To Complete Job-Creation Bill This Week: 2/9/2010 2:48:39 PM
By Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Senate Majority Leader Harry Reid (D., Nev.) said Tuesday he hopes to complete work on a roughly $80 billion job-creation bill by the end of the week, even though he expects the Senate to be closed Wednesday due to a severe winter storm heading toward the nation's capital.
Xerox Corp Sees Expanding Earnings By 15%-20% On ACS Deal>XRXLast update: 2/9/2010 2:40:02 PM
Obama Says Willing to Consider GOP Health Care Ideas
Published: Tuesday, 9 Feb 2010 | 2:09 PM ET By: Reuters with AP
President Barack Obama said Tuesday that he is willing to consider Republican proposals on a U.S. health care overhaul but that he has some key goals that must be met in any final agreement.
In a rare appearance in the White House press briefing room, Obama said he was willing to meet Republicans half-way but is not prepared to have another year of partisan wrangling on health care.
Obama said he's willing to work on medical malpractice limits — favored by Republicans.
But Republicans have to come around on the need for comprehensive legislation to reduce costs, expand coverage and rein in insurance company practices, he said.
—AP contributed to this report
Copyright 2010 Reuters. Click for restrictions.
U.S. Stocks Rally on Growing Prospects for Bailout of Greece
By Rita Nazareth
Feb. 9 (Bloomberg) -- U.S. stocks rallied, sending the Dow Jones Industrial Average back above 10,000, as prospects for a bailout of Greece eased concern that deteriorating government finances will derail the global economic recovery.
Financial shares in the Standard & Poor’s 500 Index reversed an earlier drop and climbed 1.1 percent as a group, led by JPMorgan Chase & Co. and Wells Fargo & Co. Freeport-McMoRan Copper & Gold Inc. and ConocoPhillips rose at least 3 percent as metals gained and oil rebounded to near $74 a barrel. Coca-Cola Co. jumped 3.6 percent after sales grew in China and India.
“Stocks will continue grinding higher,” said John Carey, a Boston-based money manager at Pioneer Investment Management, which oversees more than $200 billion. “The business environment is very encouraging. Earnings are decent and demand is coming back. We do seem to be experiencing economic recovery. There’s some speculation Greece is going to be helped out in some way. That also helps.”
The S&P 500 climbed 1.4 percent to 1,071.28 at 2:25 p.m. in New York. The Dow increased 171.48 points, or 1.7 percent, to 10,079.87 after earlier rallying as much as 2.3 percent for its biggest intraday gain since July 23. Five stocks rose for each that fell on the New York Stock Exchange.
Benchmark indexes surged to their highs of the session as European officials held out the prospect of aiding Greece. Olli Rehn, who takes over as European Union economic affairs commissioner tomorrow, said support for Greece will be discussed in coming days. Michael Meister, a German legislator from Chancellor Angela Merkel’s Christian Democrats, said lawmakers in that country are considering financial assistance.
Sovereign Debt
U.S. stocks retreated yesterday amid concern that growing deficits and sovereign debt at some European governments will slow the recovery from the first global recession since World War II. The S&P 500 has fallen for four straight weeks, the longest losing streak since July, and is down almost 7 percent from a 15-month high on Jan. 19.
Fitch Ratings analyst Brian Coulton said an EU bailout for Greece is a “possibility” and not “assured.” He spoke on a conference call today. U.S. equities trimmed gains earlier, and European shares erased most of a rally, after Fitch Ratings analysts also said the U.K. needs to pledge further measures to rein in its budget deficit, and the medium-term outlook for Greece is “cloudy.”
Wholesale Inventories
Benchmark indexes remained higher after the Commerce Department reported that inventories at U.S. wholesalers unexpectedly fell in December after the biggest increase in more than five years, indicating distributors had trouble keeping up with demand. The 0.8 percent decrease in stockpiles followed a revised 1.6 percent gain in November that was the largest since July 2004. Sales climbed 0.8 percent.
More than 300 companies in the S&P 500 have reported fourth-quarter earnings since Jan. 11, and about 77 percent have beaten analysts’ estimates, according to data compiled by Bloomberg. The economy in the U.S. expanded 5.7 percent in the fourth quarter, the fastest pace in six years, the Commerce Department said Jan. 29.
“Flows will come to equities,” Binky Chadha, chief U.S. equity strategist at Deutsche Bank AG, told Bloomberg Radio. “We think that stage of the easy money is over. There’s still plenty of upside, but it’s going to be more about picking sectors and stocks. The key is not to buy just quality, but quality stocks that are cheap looking at the earnings power of these companies. For the year as a whole we’re optimistic.” He forecasts the S&P 500 at 1,325 by year-end.
Commodity Producers
Freeport-McMoRan, the world’s largest publicly traded copper producer, advanced 4.3 percent to $72.14. Copper rose for a second day in New York, gaining 2.7 percent, on speculation that demand may swell on increased imports of metal into China, the world’s largest user.
Exxon Mobil Corp., the largest U.S. energy company, gained 1.5 percent to $65.28 as crude oil rallied 2.6 percent in New York before a report due tomorrow that may show U.S. inventories of diesel and heating oil contracted last week. ConocoPhillips shares advanced 3 percent to $48.81.
Coca-Cola rallied 3.6 percent to $54.57. The world’s largest soft-drink maker reported fourth-quarter profit that met analysts’ estimates as sales by case volume grew 29 percent in China and 20 percent in India, helping boost global volume 5 percent and offsetting declining volume sales in North America. Revenue increased 5.4 percent to $7.51 billion, topping the average analyst estimate by 3.5 percent.
Caterpillar, Monsanto
Caterpillar Inc. rose 6 percent to $53.82. The world’s largest maker of bulldozers was raised to “overweight” from “underweight” at Morgan Stanley.
Monsanto Co., the world’s largest seed producer, gained 2.9 percent to $76.34. The shares were raised to “buy” from “neutral” at Bank of America Corp.’s Merrill Lynch Global Research, which cited “attractive” prospects in the corn-seed business and an improved outlook for the Roundup weed-killer.
NYSE Euronext rallied 5.4 percent to $23.71. The largest owner of stock exchanges posted profit of $172 million for the fourth quarter as derivatives trading buoyed revenue and the company cut expenses after a $1.59 billion writedown last year.
MetLife Inc. rose 4.2 percent to $35.06. The biggest U.S. life insurer may use stock to fund more than half of the planned $15 billion purchase of an American International Group Inc. life insurance unit, said three people with knowledge of the matter.
AIG added 3.8 percent to $22.99.
Biggest Gain
Harman International Industries Inc. had the biggest gain in the S&P 500, surging 14 percent to $40.57. The maker of audio systems for homes and vehicles posted adjusted profit of 40 cents a share in the fiscal second quarter, five times higher than the average analyst estimate in a Bloomberg survey.
Electronic Arts Inc. plunged 9.5 percent to $15.82. Fiscal 2011 profit, excluding some items, will be 50 cents a share to 70 cents a share, the Redwood City, California-based video-game maker said in a statement after the close of trading yesterday. That’s less than the $1 a share projection of Michael Pachter, an analyst at Wedbush Morgan Securities in Los Angeles.
GameStop Corp. lost 5.1 percent to $18.69. The video-game retailer was downgraded to “Neutral” from “Outperform” at Credit Suisse.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.
Last Updated: February 9, 2010 14:26 EST
Toyota Extends Recalls to Prius Hybrids to Fix Brake Software
By Yuki Hagiwara, Makiko Kitamura and Alan Ohnsman
Feb. 9 (Bloomberg) -- Toyota Motor Corp. will recall 437,000 Prius and other hybrid cars globally to fix faulty braking systems on four models, adding to almost 8 million vehicles the company is repairing for separate defects.
The world’s biggest carmaker will halt sales of Lexus HS250h sedans, as well as the Prius plug-in and SAI models sold only in Japan, said President Akio Toyoda, speaking at a Tokyo press conference.
The action threatens to further tarnish Toyota’s reputation as a leader in gasoline-electric hybrids, a technology it plans to offer on all models. Toyota, grappling with its worst recall crisis, has lost about $31 billion in market value since Jan. 21, when it began taking back millions of vehicles for defects linked to unintended acceleration.
“This is part of Toyota’s turn in the barrel,” said Eric Noble, president of Car Lab, an industry researcher in Orange, California. “This is part of Toyota’s turn in the barrel. One would presume now that’s its come to Prius, they’ve finally touched the bottom.”
The Prius, which starts at $22,800, is a high-profile model for the automaker, the cornerstone of a planned line of hybrids. It’s a popular environmental car for celebrities, such as actors Leonardo DiCaprio and Cameron Diaz.
Toyota has recalled almost 8 million vehicles on five continents to repair defects that have been linked to unintended acceleration. Those recalls may cut demand for the company’s vehicles by 100,000 units, Toyota said last week.
Corolla Steering
Toyota’s Corolla sedan is also being reviewed by the U.S. after driver complaints about steering to determine if a defect investigation is warranted, a government spokeswoman said today. The National Highway Traffic Safety Administration has recorded more than 80 complaints about Corolla steering for 2009 and 2010 models, according to the agency’s online database.
The U.S. agency wants “to determine if a safety defect investigation is warranted, as is standard procedure with all complaints,” Karen Aldana, spokeswoman for the agency, said in an e-mail.
The first U.S. congressional hearing on Toyota’s recalls, scheduled for tomorrow, was postponed because of a snowstorm forecast for Washington. The House Oversight and Government Reform Committee’s meeting was rescheduled for Feb. 24, according to statement e-mailed today by Kurt Bardella, a spokeswoman for Representative Darrell Issa of California, the panel’s senior Republican.
Japan Recall
In Japan, Toyota will call back 223,068 hybrids to repair computers in anti-lock brake systems, according to a notice filed to Japan’s Transport Ministry today. The vehicles to be repaired are 199,666 2010 Prius hybrids, 10,820 SAIs, 12,423 Lexus HS250h cars and 159 Prius plug-in hybrids, according to the filing to the ministry.
“We will redouble our commitment to quality,” Toyoda, 53, said in Tokyo today. “I would like to apologize again to our customers who are worried about Toyota’s quality and safety.”
When the latest version of the Prius came out, Toyoda called it the “future of Toyota cars.” Last year it was Japan’s top-selling vehicle when deliveries almost tripled to 208,900.
The carmaker faces at least 49 lawsuits filed on behalf of customers in the U.S. and Canada seeking a range of damages in sudden-acceleration cases. It also faces at least 13 lawsuits brought by individuals claiming deaths or injuries.
Moody’s Investors Service placed Toyota’s Aa1 senior unsecured long-term rating on review for possible downgrade today. Problems with Toyota cars and recalls may have “longer term impacts,” affecting pricing power and market share in key markets, Moody’s said in a statement.
Profit Forecast
The company on Feb. 4 predicted a return to profit in the fiscal year ending March 31, even as it said recalls may cost 100 billion yen ($1.12 billion). The full-year net income forecast of 80 billion yen took into account the cost of recalls linked to unintended acceleration. It didn’t include a 2010 Prius recall, Toyota said at the time.
Including lost sales during the vehicle repairs, Toyota forecast about $2 billion in total costs. Lawyers for customers say the tally will be higher.
People who purchased Toyota vehicles in the U.S. have filed at least 41 class-action lawsuits against the automaker, seeking damages that range from loss of car value to a return of profits. Toyota faces at least 13 individual lawsuits claiming deaths or injuries caused by unwanted acceleration of vehicles. Customer lawyers said they’re considering filing dozens more.
Demanding Cash
In similar class actions against carmakers, some customers settled claims by taking discount coupons for future purchases, most of which were never used. Toyota customers will demand cash, said attorney Michael Louis Kelly, who has filed two such suits in California.
“The damages could be in the billions of dollars in the loss of value alone,” Kelly said in an interview. “I don’t think we’re talking about coupons under any circumstances.”
A separate suit seeking class-action status was filed in federal court in Los Angeles yesterday on behalf of U.S. investors, claiming Toyota made “materially false and misleading statements,” related to unintended acceleration, causing the automaker’s American depositary receipts to trade at inflated levels before the Jan. 21 recall announcement.
Toyota said it will recall about 133,000 Prius 2010 models and 14,550 Lexus HS250h hybrids in the U.S. to update software in the vehicle’s anti-lock brake system. No other Toyota, Lexus, or Scion vehicles are involved in this, Toyota said in a statement.
‘Own Words’
Toyoda plans to travel to the U.S. and “will try to explain with my own words,” he said.
He must provide a “proper report” in the U.S. and the recalls must not cause a “foreign-relations problem,” Japan’s Transport Minister Seiji Maehara told reporters today. Maehara said he will meet with John Roos, the U.S. ambassador to Japan, tomorrow to discuss Toyota.
“Toyota is finally taking measures,” said Mamoru Kato, an analyst at Tokai Tokyo Research Center in Nagoya, Japan. “This is fueling optimism that Toyota is moving in a clear direction to avoid further consumer anxiety.”
Toyota rose 2.9 percent to 3,375 yen at the close of trading in Tokyo. The stock has declined 19 percent since Jan. 21. Toyota’s American depositary receipts, each representing two ordinary shares, rose $2.04, or 2.8 percent, to $74.89 at 1 p.m. in New York Stock Exchange composite trading.
NHTSA Complaints
The U.S. Transportation Department is also investigating reports of Prius brake failures. The National Highway Traffic Safety Administration received 124 reports from consumers, including four saying crashes occurred with two “minor” injuries, according to an investigation document.
Sudden acceleration of Toyota vehicles has been linked to 19 deaths in the past decade, according to Henry Waxman, the U.S. House of Representatives’ Energy and Commerce Committee chairman.
Toyota Motor Europe said it will recall 52,903 Prius cars in Europe to modify software used to manage the anti-lock brake system. The Toyota City, Japan-based carmaker said last week it modified braking software on newly built Priuses in late January.
The model, driven by U.S. actor DiCaprio and Apple Inc. co- founder Steve Wozniak, is the world’s best-selling hybrid car. Toyota has sold 197,000 units of the latest version in Japan and 103,200 in the U.S., according to the company.
Icy Roads
Toyota has been investigating reports that Prius owners driving at low speeds on bumpy or icy roads may experience moments where the car continues to coast for about a second after the brakes are applied, because of the anti-lock brake system. The carmaker has said it received complaints about Prius brakes through dealers starting in the last few months of 2009.
Toyota said today it stopped shipments of the Lexus HS250h and SAI hybrids from a factory in southern Japan to inspect their braking systems.
The vehicles included in today’s recall are regular Prius hybrids built between April 20, 2009, and Jan. 27; plug-in Priuses assembled between Nov. 25 and Feb. 5; SAI hybrids made between Oct. 2 and Feb. 8; and Lexus HS250h models from between June 10 and Feb. 8.
To contact the reporters on this story: Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net; Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net;
Last Updated: February 9, 2010 14:08 EST
Italy minister defends boost for McDonald's burger
ROME – Italy's agriculture minister defended his sponsorship of McDonald's new all-Italian burger Monday amid criticism that he is selling out to a multinational corporation and sacrificing Italy's culinary reputation in the process.
Minister Luca Zaia has argued that McDonald's new McItaly burger — using all Italian beef, Asiago cheese and artichoke spread — will pump (EURO)3.5 million ($4.8 million) more a month into the pockets of Italian farmers grappling with tough economic times.
But for a country that gave birth to the Slow Food movement a quarter-century ago and prides itself on its varied, delicious and healthy cuisine, Zaia's enthusiastic support of McDonald's has been hard to swallow.
It didn't help that Zaia and McDonald's executives launched the new burger last month at McDonald's flagship restaurant in Rome's historic center near the Spanish Steps, the chain's first Italian outpost.
The opening of those Golden Arches in 1986 famously inspired a relatively unknown Turin foodie, Carlo Petrini, to launch what became Slow Food — the international movement that embraces local, organic food and home cooking over fast food and the industrialized food chain.
In a recent front-page opinion piece in La Repubblica newspaper, Petrini challenged Zaia and McDonald's to back up their claims of helping Italian farmers with a kilo-by-kilo accounting of how much farmers are actually getting paid out of the deal.
And he chafed at Zaia's suggestion that the all-Italian menu would "globalize the identity of Italian agriculture."
"Taste, like identity, has value only when there are differences," Petrini wrote.
The opposition Democratic Party has also slammed Zaia's use of an official government seal of approval for the new burger. On the McItaly's promotional material is a seal saying "Under the patronage of" the Ministry of Agriculture and Forestry — a highly coveted government endorsement that is more often seen on museum exhibits and cultural initiatives than fast-food containers.
"I think it's legitimate to ask if Minister Zaia is working for Italy or McDonald's," Nicodemo Oliverio, the top Democratic Party lawmaker in the lower Chamber of Deputies' agriculture commission, quipped Monday.
He charged that giving McDonald's such a designation creates a disparity with Italian food companies that may require Italy's antitrust authority to intervene.
Zaia shot back saying the government had long been in partnership with McDonald's to promote other "Made in Italy" products such as parmesan cheese and smoked beef.
Zaia, who relentlessly courts publicity for Italy's agricultural products, has defended his partnership with McDonald's as an important new market for Italy's farmers and a way to reach young Italians who make up the bulk of McDonald's customers.
He said Monday the first week of sales — some 100,000 burgers — had exceeded expectations. In the coming weeks, a new burger featuring smoked bacon and grilled onions, as well as an all-Italian ingredient salad, will be rolled out in McDonald's 392 Italian restaurants.
Oil 73.71
Dow Jones 2:30 PM Averages: DJIA 10082.44 UP 174.05: 2/9/2010 2:30:04 PM
30 INDUS 10082.44 UP 174.05 OR 1.76%
20 TRANSP 3871.66 UP 78.77 OR 2.08%
15 UTILS 369.97 UP 4.34 OR 1.19%
65 STOCKS 3399.91 UP 58.52 OR 1.75%
Fitch: Latin American Structured Finance Outlook Largely Stable in 2010; Problem Spots Persist: 2/9/2010 1:50:00 PM
CHICAGO, Feb 09, 2010 (BUSINESS WIRE) --
The Rating Outlook for Latin American structured finance will remain Stable for most regions and asset types in 2010, according to Fitch Ratings in its annual Outlook report. However, the far-reaching implications of the global financial crisis will leave some regions vulnerable to performance pressure. 'Mexico will continue to show signs of deterioration during the first half of this year, most notably in RMBS,' said Managing Director Greg Kabance. 'Elsewhere, issuance activity is expected to increase in Brazil as this country has been fairly resilient and the least impacted by the global financial crisis.'
Airlines Soar As UAL Reports Strong Jan Passenger-Unit Rev: 2/9/2010 1:53:40 PM
By Shara Tibken
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Airline shares soared Tuesday after United Airlines parent UAL Corp. (UAUA) reported sharply higher passenger-unit revenue in January.
Obama: Open To New Ideas On Health InsuranceLast update: 2/9/2010 1:39:52 PM
2nd UPDATE: Portugal, Greece, Spain Sovereign CDS Tighten: 2/9/2010 1:31:11 PM
By Mark Brown
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--The cost of insuring the sovereign debt of Greece against default fell Tuesday, after it emerged that German politicians would discuss possible aid for Greece, although no final decision has been taken. Members of the Christian Democratic Union and Christian Social Union's parliamentary party will meet Wednesday to discuss emergency financial support for Greece, a government official told Dow Jones newswires. However, a government spokesman said no decisions on potential aid had been made. Greece's five-year sovereign credit default swap spreads dropped 340 basis points late Tuesday, versus a closing level Monday of 420 basis points, according to data provider Markit, although the market was extremely volatile. At those prices, the annual cost of insuring EUR10 million of Greek sovereign debt for five years has fallen by more than EUR80,000 in one day. Other peripheral euro-zone sovereigns also saw their sovereign CDS spreads tighten Tuesday. After widening dramatically for several days, Portugal's five-year sovereign credit default swap spreads tightened 45 basis points to 200 basis points late Tuesday after the country announced plans for a 10-year, syndicated bond issue. While news of new supply would normally put pressure on spreads, on Tuesday it supported them as markets took it as a sign that Portugal is confident it can get access to the debt market. Spain's five-year CDS tightened 35 basis points to 135 basis points, according to Markit. At one point Tuesday afternoon, traders described Greece's sovereign CDS spreads as "screaming tighter." The SovX Western Europe index, which lets investors buy or sell default insurance on a basket of 15 developed European sovereigns, dropped back below 100 basis points from 109.5 basis points Monday, according to a broker. Even before the German discussions were reported, European sovereign-debt markets had seen "a very strong day," according to one trader. "People are realizing that being short some sovereigns isn't an easy win." "Spreads tightened in the morning then, after some profit-taking, we saw a second wave of buying," the trader added. Financial markets have been speculating on possible support measures that can be announced for Greece ahead of Thursday's summit of European Union leaders. EU Economic Affairs Commissioner Joaquin Almunia told the European Parliament in Strasbourg that the European Commission--the EU's executive arm--"is concerned about the substantial economic and fiscal challenges that Greece faces." "We are probably approaching the end game with regard to potential support for the likes of Greece," Gary Jenkins, head of fixed-income research at Evolution Securities in London, said in a note. "Whilst they may claim that they can solve their own problems, the fact is that raising money in the capital markets is going to be a challenge for them unless markets regain confidence in sovereign debt very quickly," he said. Chris Pryce, analyst at Fitch Ratings, said during a conference call Tuesday that, in "Fitch's view, financing support will be forthcoming from the E.U. and/or Greece's European partners to help prevent a self-fulfilling liquidity crisis." The Greek government also announced measures to cap public-sector salaries and reform the country's tax code in a bid to fix the country's finances Tuesday. -By Mark Brown, Dow Jones Newswires; + 44 (0)207 842 9485, mark.brown@dowjones.com (Michael Wilson in London, Alkman Granitsas in Athens, and Emese Bartha, Patrick McGroarty and Andreas Kissler in Frankfurt contributed to this article.) (END) Dow Jones NewswiresFebruary 09, 2010 13:31 ET (18
Dow Jones 1:30 PM Averages: DJIA 10088.64 UP 180.25: 2/9/2010 1:30:04 PM
30 INDUS 10088.64 UP 180.25 OR 1.82%
20 TRANSP 3875.83 UP 82.94 OR 2.19%
15 UTILS 369.91 UP 4.28 OR 1.17%
65 STOCKS 3401.92 UP 60.53 OR 1.81%
Oil 73.60
German MOF: EU To Discuss Greek Recapitalization StepsLast update: 2/9/2010 1:28:44 PM
Oncolytics Shares Leap For Second Straight Day On High: 2/9/2010 1:02:23 PM
By David Benoit
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Shares of cancer-treatment developer Oncolytics Biotech Inc. (ONCY) have soared this week as increased attention has led to growing excitement about the company's pivotal upcoming clinical trial for its head and neck cancer treatment. Shares of the Calgary company were recently up 11% to $2.90 on nearly six times their typical trading volumes, a day after jumping 9.6% on nearly three times the typical amount of trading. The stock has now gained 23% so far this month, and earlier Tuesday crossed back above $3 for the first time since the middle of November. The stock had fallen after the pricing of an equity offering in November, which was to raise cash for the coming trial. Analysts said there wasn't any specific fundamental change to explain the move Tuesday, but said investors have long been looking toward a late-stage study on Oncolytics' critical cancer therapeutic, Reolysin, for head and neck cancers. The treatment employs a virus that can target the cancerous cells. Over the weekend, business news Web site DailyFinance.com posted an article featuring a largely positive interview with Chief Executive Brad Thompson. The story explained how Reolysin works and quoted Thompson as saying it is "rather straightforward" and has minimal side effects. "Normally, the latest we ever find the virus in the body is a couple of weeks after the first injection, and then it's completely gone," Thompson said, according to the article. The article also said a partnership could be announced by the end of the Phase 3 trial, which would mark a significant accomplishment for Oncolytics. A spokeswoman for Oncolytics said she has received growing interest since the article appeared this weekend, including increased phone calls and emails about the treatment. She said that often happens with news stories about the company. Thompson was also presenting at a conference held in New York on Monday, delivering the company's typical presentation on Reolysin's potential. Versant Partners analyst Douglas Loe said he didn't know of anything specific to drive the shares Tuesday, but after initiating coverage recently, believes the stock could trade closer to $4.25. -By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com; (END) Dow Jones NewswiresFebruary 09, 2010 13:02 ET (18:02 GMT
9999
lol
Djia +209 Oil 73.96
OIL FUTURES: Crude Rises On Stock Market Strength, Storm Forecast 2/9/2010 10:41:42 AM
By Edward Welsch
Of DOW JONES NEWSWIRES
(Dow Jones)--Crude oil futures rose Tuesday, mirroring strength in the stock market and gaining support from expectations of increased heating demand due to a major snowstorm poised to hit the northeastern and mid-Atlantic U.S. Light, sweet crude for March delivery recently traded $1.15 cents, or 1.6%, higher at $73.04 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded $1.29, or 1.8%, higher at $71.40 a barrel.