Thursday, May 31, 2012

Business big wig: expect Apple iPhone 5 from September - Itproportal

Business big wig: expect Apple iPhone 5 from September - Itproportal

Chatter amongst Apple enthusiasts appears to be increasing in response to the heavily publicised release of the latest Samsung flagship phone, the Galaxy S3, which finally hit stores in the UK and across Europe yesterday.

Speculation surrounding the launch of Cupertino's next generation offering, the iPhone 5, is now understandably hitting the fore of the rumour mill, with high-level business analysts entering the fray with their predictions as well.

Forecasting for the Royal Bank of Canada, Amit Daryanani is the latest to get the hamster wheel whirling, throwing his prediction for an autumn launch and the consumer electronics titan's continued growth into the public domain earlier this week.

Releasing an investor report, Mr Daryanani points to Apple's consistent product release cycle as all but assuring a September or October release for their latest flagship device, which is likely to be imbued with 4G/LTE technology.

"In our view, consumers are becoming aware of the product cycle and we believe this should cause increased seasonality in the product as consumers await updated and fully remade iPhones," he says.

In recent years, Apple has released a complete product remodel bi-annually - so the iPhone 4 in 2010 - with significant product updates like the 4S occurring on the off year.

Daryanani also believes Apple will continue to grow its smartphone brand and increase its share of the market due to its "loyal subscriber base," and continued adoption in developing international markets like China.

"In our view, the iPhone represents a seamlessly synched enterprise and consumer product that should continue to gain market share in the near and long term," he adds.

It is taken as almost a given by industry insiders at this stage that sales of the next iPhone will be astronomical, and an additional kick is expected in the US due to Cupertino's recent announcement that it will enter the pre-paid market in partnership with Leap Wireless' Cricket service.

Working on the assumption of a mid-autumn release this year, the iPhone 5's sales will be visible in Apple's financial records from early 2013.

In addition to the frenzy surrounding the latest release from one its biggest rivals, yesterday's appearance by new CEO Tim Cook at the D10 conference, coupled with the imminence of the company's WWDC, has given Apple fan boys a glut of speculative material.

Budget 2012: This is not a budget for jobs, says business - Daily Telegraph

But businesses were left "disappointed" that the Government did not throw in more measures to help them more hire young people.

Unemployment is expected to peak at 8.7pc, or 2.8m, this year, before falling to 6.3pc by 2016-17, the Office for Budget Responsibility (OBR) said. Its forecast for jobs is largely unchanged since November.

Businesses were hoping the Government would cut national insurance contributions for any business hiring someone aged 25 and under.

However, Mr Osborne did say the Government would test a new enterprise loans scheme for young people who wished to start their own business. The £10m loans system would work in the same way as the UK student loans scheme, widely used by young people going to university.

The Budget 2012 seemed to favour young people starting-up their own firms rather than rely solely on the private sector to create jobs.

But business leaders warned the Chancellor did not go far enough to help cut youth unemployment.

John Longworth, director-general of the British Chambers of Commerce, said: "We are disappointed that the Chancellor did not announce additional measures to incentivise businesses to employ more young people.

While the freeze in the youth rate of the National Minimum Wage is a welcome step [announced on Monday], an extension of the Youth Contract would have encouraged more companies to take on and train young people seeking to break into the world of work."

The youth enterprise loan scheme was a welcome idea, he said, adding businesses up and down the country stood ready to support and mentor young people wanting to take their first leap into business.

John Philpott, chief economic adviser at the CIPD, said: "The Chancellor has redrawn the boundaries of taxation but, judging by the central forecast of the Office for Budget Responsibility (OBR), his budget has done nothing to change the big picture outlook for growth and jobs overall, while ironically shifting the balance of the economic recovery away from business investment and toward household consumption and public spending.

"Most worryingly of all the OBR has significantly downgraded its forecast for growth in business investment between now and 2016 while raising its forecast for growth in household consumption and government spending and investment.

"If the OBR is proved right the economy doesn’t appear to be rebalancing in the way we were supposed to expect, which casts an element of doubt on the Chancellor’s claim that the budget will enable Britain to ‘earn its way’ to recovery.

“Although this is a budget that rewards work, it doesn’t on the face of things look like a budget for growth and jobs."

However, other experts were more optimistic the Budget 2012 would stimulate growth and investment.

Douglas McWilliams, chief executive of the Centre for Economics and Business Research, said it was one of the "best ever" budgets for growth.

Changes to planning law would help create 200,000 new jobs as new homes were built by 2015, he said.

Elsewhere, the OBR said the number of people claiming Jobseekers' Allowance is expected to fall by almost 150,000 in 2014, saving £0.9bn, but this is largely due to the way the benefits are calculated rather than the effect of any policy measure.

It also predicted that 20,000 more public sector workers would lose their jobs by 2016-17, taking the total to 730,000 as a result of the austerity measures. At the same time, the private sector would create 1.7m jobs, leading to a net 1m rise in employment over the period, the indepedent forecaster said.

Employment experts remain sceptical the private sector can absorb all the public sector job losses, however.

Money market fund assets rise to $2.572 trillion - Yahoo Finance

NEW YORK (AP) -- Total U.S. money market mutual fund assets rose by $7.87 billion to $2.572 trillion for the week that ended Wednesday, the Investment Company Institute said Thursday.

Assets of the nation's retail money market mutual funds fell by $4.27 billion to $887.46 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell $2.93 billion to $701.97 billion. Tax-exempt retail fund assets fell $1.33 billion to $185.49 billion.

Meanwhile, assets of institutional money market funds rose $12.13 billion to $1.685 trillion. Among institutional funds, taxable money market fund assets rose $12.73 billion to $1.599 trillion; assets of tax-exempt funds fell $600 million to $86.37 billion.

The seven-day average yield on money market mutual funds was 0.03 percent in the week that ended Tuesday, unchanged from the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westborough, Mass.

The 30-day average yield was also unchanged from last week at 0.03 percent. The seven-day compounded yield was flat at 0.03 percent. The 30-day compounded yield was unchanged at 0.03 percent, Money Fund Report said.

The average maturity of portfolios held by money market mutual funds fell to 45 day from 46 days in the previous week.

The online service said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation's 10 largest markets showed the annual percentage yield available on money market accounts was unchanged from last week at 0.13 percent.

The North Palm Beach, Fla.-based unit of Bankrate Inc. said the annual percentage yield available on interest-bearing checking accounts was unchanged from the week before at 0.06 percent. said the annual percentage yield on six-month certificates of deposit was also unchanged at 21 percent from the previous week. The yield on one-year CDs was unchanged at 0.33 percent. It fell to 0.52 from 0.53 percent on two-and-a-half-year CDs. It was flat at 1.12 percent on five-year CDs.

Business rallies behind Wisconsin governor in recall election - The News & Observer

His opponents look at his six-figure campaign contributions from Las Vegas and Houston and call him the "rock star of the far right." Perhaps, but he also is popular with leaders of Wisconsin Manufacturers and Commerce, the state's largest business organization, which is spending $3 million to help him survive.

"People recognize you've got to have bold and courageous people in politics to take on the status quo and say, 'This isn't working,' " said Kurt Bauer, president of the organization. "If we can't do it in Wisconsin - if we recall Gov. Walker for doing something that was difficult but necessary - it's a bad omen for the rest of the nation."

Barry Burden, a professor of political science at the University of Wisconsin-Madison, noted that Walker was elected in the 2010 Tea Party revolt, a powerful reaction against President Barack Obama's stimulus legislation, health-care overhaul and federal deficits. After proposing, fighting for and winning passage of Act 10, a budget repair bill that greatly restricted the organizing rights of public employee unions - and facing demonstrations of up to 100,000 people - Walker became "a poster child for that new face of the Republican Party," Burden said.

Like the labor unions on the opposite side of the political divide, business leaders, fiscal conservatives and Republican activists see the June 5 recall election as a watershed event. For them, it is a test of whether a leader who took necessary actions to resolve their government's fiscal crisis can long endure.

To help Walker, business is stepping up in a way never before seen in Wisconsin.

State law suspends campaign contribution limits for candidates facing recall, opening the door to big donations for a statewide race.

Casino magnate Sheldon Adelson, who almost singlehandedly bankrolled Newt Gingrich's presidential campaign, has given Walker $250,000. So has Amway founder Richard DeVos of Florida. Diane Hendricks, owner of ABC Supply Co. in Beloit, Wis. Gave $500,000, as has Bob Perry, a Houston homebuilder and backer of the "Swift Boat" attacks on Democratic presidential nominee John Kerry in 2004. Checks for $100,000 have come in from donors as far away as Massachusetts and Arkansas.

The size of the individual contributions to Walker are unprecedented. So is the fact that three-fifths of all contributions reported thus far have come from outside the state, said Mike McCabe, head of the Wisconsin Democracy Campaign, which tracks fundraising and spending by state officials and outside groups.

McCabe reported Thursday that spending in the governor's race is at $62 million and counting - $29 million by Walker, $4 million by all the Democratic candidates combined, and $29 million more by outside interest groups on both sides. The previous high for an election for governor was $37 million for the 2010 race between Walker and Democrat Thomas Barrett.

Dick Uihlein of Lake Forest, Ill., CEO of Uline, a shipping supplies distributor that is expanding in Wisconsin, said he views Walker as the kind of leader his own state needs to solve its deep, perennial budget woes. Uihlein gave Walker $25,000. He believes the changes the first-term governor proposed to restrain public unions are necessary, and Walker's persistence in the face of tumult only made Uihlein's admiration grow.

"If what is being done here is causing states and the country to go under, then something has to change," Uihlein said. "We're at a crossroads here."'

Walker will go anywhere to extol what he considers his good news on employment, as he did in a recent visit to a small computer firm in Hartland, east of Milwaukee.

Speaking to a gathering of workers at EmbedTek, Walker rolled out the topic of the day - revised job numbers that contradicted a series of negative federal jobs reports - and told employees that their success at adding several jobs to their firm is a "great story" that fits in with Wisconsin's upward trend.

"Since I've been in office, the unemployment rate has consistently gone down, to 6.8 percent, which is two points lower than Illinois," he said. "Revenues are up, and the state has a surplus of $154 million."

Bauer, of Wisconsin Manufacturers and Commerce, said that while former Democratic Gov. Jim Doyle was supported by only 10 percent of members in the group's surveys, Walker's approval among state business owners runs in the mid-90s. His ability to deliver on a manufacturers' tax cut and regulatory and tort overhauls cemented that support, Bauer said.

Bauer sees progress at the local level from school districts freed from limits imposed by law or contract and believes Walker's strike hit unions where it hurt.

"It was like Delilah cutting off Sampson's hair," he said. "When you take away collective bargaining rights, you take away two things they hold dear - money and power. That's what this recall is about - money and power."

The governor's message, and the war chest he has amassed to deliver it, appear to be selling. Marquette University Law School's most recent poll, released on Wednesday, showed Walker with a 7-point lead over Barrett.

Butch Schultz of Hudson, retired from 3M in Maplewood, wore a Green Bay Packers sweatshirt while performing volunteer chores recently at Walker's offices in Hudson. He said he believes Walker won his support by taking decisive action in the midst of a budget crisis. "It may have been blunt, but it was what was needed," Schultz said. "Where did we quit teaching people to balance the budget, balance your checkbook?"

As business suffers, David Cameron retreats - Daily Telegraph

Taken together, these two factors deter employers from recruiting new staff and hinder businesses from developing the higher productivity on which sustainable growth depends. And far from making things better, the past decade has seen a steady increase in the level and complexity of employment law. Beecroft’s report would have reduced the amount of regulation in a comprehensive and principled way – and, by doing so, would have introduced new certainty and confidence.

That confidence matters, because businesses are far too short of it at present. British businesses collectively hold about £750 billion in cash. To reach its fiscal targets, the Government needs a steep rise in investment – the rate at which they spend that money. Speaking last week, David Cameron said that he leads “a Government resolutely committed to being on the side of enterprise, entrepreneurs, businesses large and small, wealth creation of all types and descriptions”. To many, that is clearly not the case. A full-blooded Beecroft Review would reassure such people, just as a pale imitation would reinforce their concerns.

Taking a step back, today’s news adds to a sense of unease about what the Coalition is actually trying to achieve. This is a Government that claims to have deregulation at its heart, fired by a Tory belief in free markets and a Lib Dem distrust of central direction. It has a policy to stop the growth in regulation (so-called “One In, One Out”) and to reduce the stock of it (the “Red Tape Challenge”). In general, it is supposed to have rejected an old approach based on more debt and higher state spending, and to be looking for real growth via higher productivity.

Recently, however, we have seen a weakening in the Government’s position. Last autumn, the Chancellor pushed his deficit reduction target from the end of this Parliament into the middle of the next. Last week, the Prime Minister hinted at new borrowing to finance infrastructure – exactly the way that Gordon Brown justified his record spending increases. At the same time, the retreat over the NHS has cast a long shadow over the Coalition’s commitment to public-service reform, and its changes to the planning system are taking much longer than expected.

In recent days, the Prime Minister has urged his European counterparts to take action by saying that the eurozone is “at a crossroads”. He should hold his own Government to account in the same terms. Given the challenges facing the country, it is surprising that he needed an independent report to propose changes to employment law at all. Now that he has it, it will be remarkable if he does not implement it – and then keep up the pressure.

Mr Cameron is right that the country’s basic economic problems are due to poor productivity rather than lack of government action. He will know, however, that the contrary view is growing in popularity (and, indeed, capable of winning elections in other countries). The more his policies focus rigorously and consistently on improving the efficiency of the economy, the more successful they will be.

Andrew Haldenby is director of the independent think tank Reform

Bankia SA : Money flies out of Spain, regions pressured - 4-traders (press release)
05/31/2012 | 10:34pmA Spanish flag flutters in the wind near a statue of Columbus in Madrid

Spaniards alarmed by the dire state of their banks are squirreling money abroad at the fastest rate since records began, figures showed on Thursday, and the credit ratings of eight regions were cut.

Spain is the next country in the firing line of the euro zone's debt crisis, with spendthrift regions and shaky banks threatening to blow a hole in state finances and pushing funding costs towards levels that signal the need for a bailout.

The European Commission gave new help on Wednesday, offering direct aid from a euro zone rescue fund to recapitalize Spanish banks and more time for Madrid to reduce its budget deficit.

That helped lower the risk premium investors demand to hold Spanish 10-year debt rather than the German benchmark on Thursday, but it remained close to the euro-era record, at 520 basis points.

Bank of Spain data showed a net 66.2 billion euros ($82.0 billion) was sent abroad in March, the most since records began in 1990. The figure compares to a 5.4 billion net entry of funds during the same month one year ago.

Spaniards are worried about the health of their banks, hit by their exposure to a 2008 property crash, and have been sending money to deposit accounts in stronger economies of northern Europe.

Spain's Economy Minister Luis de Guindos however said the data was more a reflection of the troubles of the banking sector to fund itself externally than deposits flying abroad.

The capital flight data predates the nationalization of Spain's fourth biggest lender Bankia in May when it became clear the bank could not handle losses from bad real estate investments, compounded by a recession.

Spain's centre-right government has contracted independent auditors to assess the health of its financial system in an effort to restore faith in its banks.

Spain must lay out its restructuring plans for Bankia to the European Commission (EC), a spokesman for the EU executive arm said on Thursday. He added that a domestic solution to the country's bank crisis would be better than a European rescue.

The government said on Wednesday it would finance a 23.5 billion euro rescue of the bank through the bank fund, FROB but senior debt bankers said that the syndicated bond market is currently closed for Spanish agencies.


The prospect that Spain might not be able to handle losses at its banks has pummeled shares and the euro, although both regained some stability on Thursday.

De Guindos said that the future of the euro would be at stake in the next few weeks in Spain and Italy, adding that the rumors that Spain was negotiating financial assistance with the International Monetary Fund were "complete nonsense."

"The battle of the euro is being fought right now in Spain and Italy," he said at an event in Sitges, in the north-eastern region of Catalonia.

He also said Germany should help correct imbalances in the euro zone created by a loose monetary policy over the last decade and by the non-respect by Berlin of the stability and growth pact in 2003.

"We need to correct decisions which favored Germany... Germany has to assume its part," he said, adding that decisions in this respect would be taken in the next few days.

The Spanish government also hopes to clear doubts on Friday about how it plans to ease financing problems among its 17 autonomous regions.

Treasury ministry sources said a mechanism to back the regions' debt would be agreed at the weekly cabinet meeting and figures showing they were on track to meet their spending cuts targets would be released.

Fitch Ratings downgraded eight regions on Thursday, warning that a failure from the government to adopt new measures would result in further ratings cuts.

Spain's Deputy Prime Minister Soraya Saenz de Santamaria was meeting U.S. Treasury Secretary Timothy Geithner and International Monetary Fund Director General Christine Lagarde in Washington on Thursday.

The deputy PM will outline Spain's measures to tackle its crisis during the meetings, which were scheduled before Spain's situation reached boiling point, a government spokesman said. ($1 = 0.8069 euros)

(This version of the story has been corrected in the fifth paragraph to say data was for March not last month)

(Writing by Julien Toyer; Editing by Diana Abdallah)

By Nigel Davies and Sonya Dowsett

STOCKS NEWS SINGAPORE-Baker Tech surges on court ruling - Reuters

STOCKS NEWS SINGAPORE-Baker Tech surges on court ruling - Reuters

Thu May 31, 2012 10:06pm EDT

Shares in offshore marine company Baker Technology Ltd jumped as much as 20 percent to a one-month high after a Singapore court ruled in its favour in a lawsuit.

Baker Technology shares were 14.6 percent higher at S$0.315, with over 6 million shares traded. This was 14 times its average daily volume over the last five sessions.

Singapore's high court dismissed a lawsuit filed by rigbuilder Sembcorp Marine Ltd to stop Baker from selling a stake in PPL Shipyard to a consortium of buyers including Yangzijiang Shipbuilding (Holdings) Ltd.

"With the conclusion of the lawsuit, and barring a successful appeal by SembMarine, Baker would finally be able to recognise a deferred gain of S$58.2 million from the sale of PPL Holdings," said DMG & Partners in a note.

This would lift Baker's net tangible assets per share by 8 Singapore cents to S$0.32, the broker said.

To read related story click

0951 (0151 GMT)

(Reporting by Charmian Kok in Singapore;


8:49 STOCKS NEWS SINGAPORE-Index futures down 0.6 pct

Singapore index futures were 0.6 percent lower, indicating a weaker start for the benchmark Straits Times Index .

Asian shares eased on Friday, with China's factory activity data and a U.S. jobs report due later in the session making investors cautious as the escalating euro zone debt crisis threatened to further undermine growth worldwide.

To read related story click

(Reporting by Charmian Kok in Singapore; (Editing by Michael Perry)

World stocks up tepidly as traders brush off woes - Yahoo Finance

BANGKOK (AP) -- Asian stocks struggled for firm footing Friday as investor nerves were tested by fizzling economic growth in China, but European markets headed higher as traders kept fingers crossed that Greece would avoid financial chaos.

Italian Premier Mario Monti's comment Thursday that Greece was likely to stay in the euro currency union helped buoy Europe markets, said Stan Shamu of IG Markets in Melbourne in an email. But he added that "perhaps we are just really tired of hearing how bad things are and just needed something to uplift."

In any event, European markets headed higher. Britain's FTSE 100 rose 0.5 percent to 5,376.35. Germany's DAX rose 1.1 percent to 6,384.10 and France's CAC-40 added 0.9 percent to 3,064.09.

Wall Street appeared set for a higher open, with Dow Jones industrial futures rising 0.2 percent to 12,558 and S&P 500 futures gaining 0.3 percent to 1,326.20.

Earlier in Asia, however, gains were stanched by media reports that some of China's biggest banks will miss their annual lending targets for the first time in seven years, analysts said. Hesitation to take out loans suggests companies are delaying investment due to uncertainty about the economic outlook.

Japan's Nikkei 225 index rose 0.2 percent to 8,580.39. Hong Kong's Hang Seng gained 0.3 percent to 18,713.41 and South Korea's Kospi added 0.5 percent to 1,824.17.

But Australia's S&P/ASX 200 shed 0.7 percent to 4,029.20. Benchmarks in mainland China, Singapore, Taiwan, Indonesia and New Zealand also fell.

Chinese economic growth fell to a nearly three-year low of 8.1 percent in the first quarter and factory output in April grew at its slowest pace since the 2008 crisis, raising the threat of job losses and possible political tensions.

On Thursday, a private survey of Chinese manufacturers showed activity weakened further in May.

Peng Yunliang, a Shanghai-based analyst, said the reading was "worse than expected and contributed to the loss" among mainland Chinese shares. The Shanghai Composite Index fell 0.7 percent to 2,333.55 while the Shenzhen Composite Index lost 1.2 percent to 935.05.

Worries were also to the fore in Europe, where seven of the 17 countries that use the euro currency are in recession. Greece will go bankrupt shortly without an international bailout and could exit the euro — a financial event that could harm bigger troubled economies like Spain and destabilize Europe's banks.

Despite potentially disastrous outcomes, European leaders failed to find an agreement on how to fix the financial crisis at their latest summit Thursday.

Among unresolved issues was whether euro countries should issue a collective bond. That would allow every country to borrow funds at the same rate, substantially lowering the costs for the more indebted countries. But Germany, the biggest euro economy, opposes the idea.

"One solution maybe the joint euro bond but of course Germany is against it," said Francis Lun, managing director of Lyncean Holdings in Hong Kong. "And with disagreement in Europe, I doubt the EU's ability to solve its current problem. So, I think that is the uncertainty that everybody is worried about."

The likelihood of Greece leaving the euro has been growing since early May, when political parties opposed to the terms of the country's financial rescue deprived pro-austerity parties of a majority at the polls. New elections are planned for next month.

A Greek election on June 17 could see anti-bailout political parties gain power, which would raise the likelihood of the country leaving the euro.

Among individual stocks, Japan Tobacco Inc. jumped 5.2 percent a day after announcing an agreement to buy all shares in Belgian tobacco maker Gryson NV this year, news reports said. Japanese retailer Fast Retailing Co., owner of the Uniqlo casual clothing stores, rose 2.4 percent.

But Japanese export shares fell on concerns that a stronger yen will hurt profits.

Sony Corp. sank 4.5 percent and Sharp Corp. lost 1 percent.

Benchmark oil for July delivery was down 45 cents to $91.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 76 cents to settle at $90.66 in New York on Thursday.

In currencies, the euro rose to $1.2591 from $1.2525 late Thursday in New York. The dollar fell to 79.51 yen from 79.58 yen.

Citigroup, Other Big Banks Didn't Learn Much From The Financial Crisis, New Report Suggests - Huffington Post

What did big banks learn after the mammoth bailouts of the financial crisis?

Why, not that much it seems. That's one powerful takeaway from Bloomberg reporter Bob Ivry's tale of a whistleblower awarded $31 million for exposing widespread fraud at Citibank's mortgage unit. The wrongdoing, which Citi admitted to in a February settlement with the U.S. Justice Department, took place long after the financial giant paid back billions of dollars in bailout money from the U.S. government and Federal Reserve.

Read the full report from Bloomberg Markets here.

Citi knowingly misled the federal government into insuring thousands of risky mortgages, costing taxpayers nearly $200 million, the Justice Department claimed. This took place "before, during and after the financial crisis, and even into 2012," Ivry writes in the latest issue of Bloomberg Markets magazine.

Sherry Hunt a senior manager at the bank responsible for spotting fraudulent mortgages spurred the Justice Department to action when she sued Citigroup last year. The feds joined her case under the federal False Claims Act, which encourage whistleblowers by giving them a 25 percent cut of any court award. In February, Citigroup agreed to pay the government $158.3 million, admitting wrongdoing.

The number is just 1.4 percent of the company's 2011 net income, Ivry points out. Hunt's share before taxes and paying her lawyers: $31 million.

Like many other financial institutions during the housing boom, Citi got a little carried away with mortgages. The bank bought bad loans and then turned around and ignored Hunt's quality control group. In fact, the bank went so far as to create a team to dispute the findings of Hunt's team.

That's right, a team inside Citi would flag problematic loans and then another team would essentially de-flag them. The fraud went on long after the crisis.

Ivry writes:

Citigroup behaving badly as late as 2012 shows how a big bank hasn’t yet absorbed the lessons of the credit crisis despite billions of dollars in bailouts, says Neil Barofsky, former special inspector general of the Troubled Asset Relief Program. “This case demonstrates that the notion that the bailedout banks have somehow found God and have reformed their ways in the aftermath of the financial crisis is pure myth,” he says.

Hunt is the latest whistleblower to hit the jackpot. On Tuesday, lawyers for former real estate appraiser Kyle Lagow announced he would receive $14.5 million as part of a settlement announced in February between Bank of America Corp. and the Justice Department over claims of mortgage fraud at Countrywide, which was bought by BofA in 2008.

Check out a graphic from Bloomberg Markets detailing Citi's alleged mortgage fraud below:

STOCKS NEWS SINGAPORE-OCBC cuts Sakari to 'hold' - Reuters UK

Fri Jun 1, 2012 3:41am BST

OCBC Investment Research downgraded its rating on Singapore-listed Indonesian coal mining firm Sakari Resources Ltd to 'hold' from 'buy,' citing lower coal prices.

Shares of Sakari fell 1.38 percent to S$1.42 and have fallen 22.3 percent so far this year.

Sakari's share price has plunged about 32 percent since it reported first quarter results on April 30, underperforming the Straits Times Index's 8.6 percent fall in the same period.

Sakari's share price drop was partly due to its poor earnings in January-March and a continued fall in coal prices, said OCBC, and lowered its target price on the stock to S$1.45 from S$2.29.

The broker cut its coal price assumption by 10 percent to $76 per tonne, resulting in a 48 percent fall in its 2012 earnings forecast for Sakari.

"If coal prices continue to remain depressed or drift lower, this would further jeopardise the company's targeted average selling price of around $85-$90 per tonne for this year," OCBC said.

1017 (0217 GMT)

(Reporting by Leonard How in Singapore;


10:06 STOCKS NEWS SINGAPORE-Baker Tech surges on court ruling

Shares in offshore marine company Baker Technology Ltd jumped as much as 20 percent to a one-month high after a Singapore court ruled in its favour in a lawsuit.

Baker Technology shares were 14.6 percent higher at S$0.315, with over 6 million shares traded. This was 14 times its average daily volume over the last five sessions.

Singapore's high court dismissed a lawsuit filed by rigbuilder Sembcorp Marine Ltd to stop Baker from selling a stake in PPL Shipyard to a consortium of buyers including Yangzijiang Shipbuilding (Holdings) Ltd.

"With the conclusion of the lawsuit, and barring a successful appeal by SembMarine, Baker would finally be able to recognise a deferred gain of S$58.2 million from the sale of PPL Holdings," said DMG & Partners in a note.

This would lift Baker's net tangible assets per share by 8 Singapore cents to S$0.32, the broker said.

To read related story click

0951 (0151 GMT)

(Reporting by Charmian Kok in Singapore;


08:49 STOCKS NEWS SINGAPORE-Index futures down 0.6 pct

Singapore index futures were 0.6 percent lower, indicating a weaker start for the benchmark Straits Times Index .

Asian shares eased on Friday, with China's factory activity data and a U.S. jobs report due later in the session making investors cautious as the escalating euro zone debt crisis threatened to further undermine growth worldwide.

To read related story click

(Reporting by Charmian Kok in Singapore;

Stocks to watch at close on Thursday -


Stocks to watch on the Australian stock exchange at close on Thursday:

BHP - BHP BILLITON LTD - down 20 cents at $31.97

Thousands of workers have ended a week-long strike at six Queensland coal mines but unions say more industrial action is likely.

DJS - DAVID JONES LTD - down four cents at $2.21

Sales at David Jones fell by about three per cent in the three months to April, and the retailer is gearing up for a big end of financial year clearance.

EGP - ECHO ENTERTAINMENT GROUP LTD - up six cents at $4.40

Echo Entertainment chairman John Story says he will fight attempts by billionaire James Packer to kick him out of his job.

FXJ - FAIRFAX MEDIA LTD - steady at 66.5 cents

Fairfax Media has been accused of making "easy instead of smart" cost-cutting decisions by outsourcing production jobs to New Zealand.

GMG - GOODMAN GROUP - down four cents at $3.38

Industrial property owner Goodman Group is set to expand into the United States markets.

MTS - METCASH LTD - down 11 cents at $3.82

Grocery wholesaler Metcash says it will dispute a $23.4 million charge arising from an audit by the tax office.

MYR - MYER HOLDINGS LTD - down 5.5 cents at $1.925

The head of department store chain Myer Holdings says the company can beat its online retail rivals by offering the best of worlds.

PBG - PACIFIC BRANDS LTD - up 0.5 cents at 55.5 cents

Chairman of embattled clothing retailer Pacific Brands James MacKenzie will step down from his post in June.

UGL - UGL LTD - up 15 cents at $12.08

QRN - QR NATIONAL LTD - up eight cents at $3.41

RIO - RIO TINTO LTD - down 49 cents at $56.86

Engineering firm UGL has won $190 million in contracts to supply and maintain freight locomotives for four different companies.

Stocks higher on housing but Europe worries linger - Yahoo Finance

NEW YORK (AP) -- Hopes that the U.S. housing market is starting to recover and the economy is on the mend sent stocks higher on Wall Street.

But the gains are being constricted from continuing worries that Greece's political deadlock could fracture the European Union and roil global markets.

The Dow Jones industrial average rose 75 points Wednesday to 12,707. The Standard & Poor's 500 added nine points to 1,340. The Nasdaq composite rose 15 points to 2,908.

Home builder stocks rose after the Commerce Department said builders started work on new homes at an annual pace of 717,000 last month, 2.6 percent more than in March. It was a heartening sign for the beleaguered housing market, which seems to be forming a bottom and starting to recover. Construction rose for both single-family homes and apartments.

Target Corp. rose after a strong earnings report. Target said revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. Though the job market is still shaky, falling gas prices have given shoppers hope.

As signs of a global economic slowdown persist, prices of commodities have come off highs. Oil prices continued their march downwards from $105 in the beginning of the month to $93. Crude oil prices were down $1 on Wednesday. Gold prices fell $18 to $1539, the lowest level since December.

In Europe, a potentially chaotic situation was developing in Greece, where power-sharing talks collapsed Tuesday and new elections were called for next month. There is already concern in other European countries about how a possible Greek exit from the euro would affect the rest of the continent.

On Wednesday, Spain's prime minister warned that the country, which is trembling under a 24.4 percent unemployment rate, could be locked out of international markets due to problems in the EU.

"Right now there is a serious risk that (investors) will not lend us money or they will do so at an astronomical rate," Mariano Rajoy told Spanish lawmakers.

Financial pressures extend well beyond Europe too. The Indian rupee hit a new all-time low against the dollar with investors increasingly seeking a safe place to put their money. The rupee sank to 54.44 against the dollar Wednesday, surpassing the prior low of 54.39 on December 15.

Among other stocks making big moves:

— JC Penney plunged 14 percent, the most in the S&P 500 index, after the retailer reported a bigger-than-expected first-quarter loss. Sales plummeted as shoppers are rejecting their new pricing plan.

— Abercrombie & Fitch fell 11 percent after reporting that its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe.

— General Electric rose 3.6 percent, the most of the 30 stocks in the Dow, after the company said its finance unit will pay a special dividend of $4.5 billion to the parent company this year. It had suspended the payments in 2009 during a freeze in credit markets.

Global stocks investors head for exits - Financial Times

May 31, 2012 6:33 pm

Financial experts explain need for CBN autonomy - Vanguard

FINANCIAL experts said that the autonomy of the Central Bank is a critical to macroeconomic growth and stability.

“The formal autonomy of the central bank is a pre-requisite for macroeconomic stability in Nigeria., said  Samir Gadio, Emerging Markets Strategist, Standard Bank London.

Commenting on-going efforts to amend the CBN Act, he said, “There is such a wide consensus on this concept both in Nigeria and externally that one can only wonder about the real motivations behind the proposed bill to amend the CBN Act. If passed, the new legislation would be a major setback for the reform process and price stability…a setback of such magnitude that it is still unclear whether the authors of the bill genuinely want it to be adopted.

Unlike the present Act which makes the CBN governor as the chairman of the board and the Deputy governors as board members, the proposed amended  CBN bill would provide for the appointment of a Chairman of the CBN Board (in reality a political appointee) and the exclusion of CBN Deputy Governors and Directors from the Board.

Annual budget

Also, the Board would include representatives of the Ministry of Finance and the Accountant-General of the Federation. Furthermore, the bill seeks to divest the Board of the power to consider and approve the annual budget of the central bank.

“Generally, we (RenCap) think all central banks across the world, not just the CBN, should be independent so that they are not influenced in terms of policy direction,” said  Yvonne Mhango , Vice President, Sub-Saharan Africa Economist, Renaissance Capital (RenCap)

“You have the government that has the treasury under their management and controls fiscal policy. Fiscal policy in Africa is a stronger policy tool than the monetary policy and the reason is because monetary policy is a blunt instrument. This is because the transmission mechanism between the financial market and the real economy is very weak.

“So, the government has the fiscal policy and monetary policy should be left for the CBN which should be independent. In Africa, I don’t see why there should be significant appetite to control monetary policy.”

Vice Chairman and Chief Executive Officer, Ancoria Investment and Securities Limited, Dr. Olusola Dada, also said  that all over the world, central banks are independent. Dada advised that the CBN Act should not be amended such that the apex bank will be reporting to the ministry of finance, insisting that the Bank ought to report directly to the Presidency.

“In this era of globalisation, Nigeria cannot afford not to follow the global trend. A truly independent and autonomous CBN has become more imperative for the integration of our financial system with the world economy in general and the West African sub region in particular..

“What is required now is not to erode the financial autonomy of the CBN but rather to build and strengthen relationships that would enhance complementary role between the monetary and the fiscal authorities, and ensure accountability and transparency,” he added.”

Stocks Trade Narrowly Mixed; FB Below $27 - CNBC

Stocks closed lower Thursday with all three major averages logging their worst May since 2010, driven by mounting concerns over the euro zone debt crisis in addition to worries over a slowing U.S. economy.

Meanwhile, Facebook [FB  Loading...      ()   ] recovered to close near $30 a share after dipping below $27 earlier in the session. Meanwhile, S&P Capital IQ lowered its price target on the social networking giant to $27 from $30.

The Dow Jones Industrial Average slipped 26.41 points, or 0.21 percent, to close at 12,393.45. Caterpillar [CAT  Loading...      ()   ] led the laggards, while BofA [BAC  Loading...      ()   ] gained. The blue-chip index failed to log a two-day win streak this month.

The S&P 500 dipped 2.99 points, or 0.23 percent, to end at 1,310.33. The Nasdaq slid 10.02 points, or 0.35 percent, to finish at 2,827.34.

For the month, the Dow and the S&P 500 dropped more than 6 percent, while the Nasdaq plunged nearly 7 percent. The Dow and Nasdaq posted their worst monthly declines since May 2010, while the S&P posted its biggest one-month drop since last September.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped below 24.

Among the key S&P sectors, techs closed lower, while financials climbed.

Stocks started the session lower following a batch of dismal economic reports but cut their losses around noon after a report that the IMF was in talks to provide a rescue loan to Spain. However, the IMF quickly denied the report and said the annual economic talks between the IMF and Spanish authorities will take place next week.

“We’re far from seeing any clarity from Europe, [but] central banks in general are helping to limit our downside,” said Rebecca Patterson, chief market strategist of JPMorgan Asset Management. “[Still,] we need better economic data, Greece resolved and I don’t see any of that happening in the short term.”

On the economic front, weekly jobless claims gained for the fourth-straight week, according to the Labor Department. And the U.S. economy grew at a slower pace than expected in the first quarter, according to the Commerce Department. And business activity in the Midwest slipped in May, according to the Chicago ISM.

Adding to woes, private-sector jobs growth came in at a disappointingly weak 133,000 from April to May, according to ADP and Macroeconomic Advisors.

The reports come a day ahead of the widely-followed May government jobs. Non-farm payrolls are expected to show a gain of 150,000 in May, according to a Reuters poll, after a small gain of 115,000 new jobs in April, the fewest in six months.

Morgan Stanley [MS  Loading...      ()   ] CEO James Gorman defended his bank’s performance as lead underwriter on Facebook’s public offering, despite waves of criticism from investors and a potential legal review of the deal’s marketing.

In addition, the investment bank plans to buy 14 percent more of Smith Barney from Citi [C  Loading...      ()   ] and will begin a 90-day process determine the fair market value of the additional stake.

Most retailers posted solid same-store sales gains in May, with chains such as Target [TGT  Loading...      ()   ], TJX [TJX  Loading...      ()   ], and Limited [LTD  Loading...      ()   ] topping analysts' estimates for the month.

Meanwhile, Costco [COST  Loading...      ()   ], Buckle [BKE  Loading...      ()   ] and Wet Seal [WTSLA  Loading...      ()   ] all fell short of expectations.

Striking workers at a Caterpillar [CAT  Loading...      ()   ] plant in Illinois rejected the company's latest contract offer, an official with the International Association of Machinists and Aerospace Workers said.

Billionaire investor Carl Icahn, who last year failed to get his nominees elected to the board of Forest Laboratories [FRX  Loading...      ()   ], plans to back another slate of directors at the drugmaker's next shareholder meeting, according to a regulatory filing.

Talbots [TLB  Loading...      ()   ] skyrocketed after private equity firm Sycamore Partners said it will acquire the women's clothing chain in a deal worth about $193 million.

Also on the M&A front, Gaylord Entertainment [GET  Loading...      ()   ] rallied after the company said it will sell the Gaylord hotels brand to Marriott International [MAR  Loading...      ()   ] for $210 million in cash.

U.S. Airways Group [LCC  Loading...      ()   ]and private equity firm TPG Capital may team up to bid for American Airlines' parent, AMR, people familiar with the discussions told Reuters.

Meanwhile, JetBlue [JBLU  Loading...      ()   ] gained after UBS raised its rating on the firm to "buy" from "neutral" and boosted its price target to $8 from $6.

Joy Global [JOY  Loading...      ()   ] tumbled after the mining equipment maker said it expects order rate to moderate and sales to remain unchanged over the next few quarters.

TiVo [TIVO  Loading...      ()   ] slumped after the firm a bigger-than-expected loss and handed in a weak quarterly guidance.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

Coming Up This Week:

FRIDAY: Non-farm payrolls, personal income & outlays, ISM mfg index, construction spending, auto sales, Wal-Mart shareholders mtg

More From

Asian Stocks, Oil Slump on China Manufacturing; Dollar Advances - Businessweek

Asian stocks tumbled, extending the steepest monthly slide since 2008, U.S. equity futures sank and oil slumped after data showed Chinese manufacturing slowed before a U.S. payrolls report today. The Dollar Index climbed to its highest level since 2010.

The MSCI Asia Pacific Index dropped 1.1 percent as of 10:32 a.m. in Tokyo. The Nikkei 225 Stock Average (NKY) fell 1.1 percent. Standard & Poor’s 500 Index futures slid 0.7 percent. Oil futures in New York sank 0.5 percent, the fourth day of declines. The Dollar Index gained 0.3 percent, while Australia’s currency weakened 0.8 percent against the greenback.

A Chinese purchasing managers’ index today showed manufacturing slowed in May. Claims for U.S. jobless benefits unexpectedly increased and the world’s biggest economy grew less than initially estimated in the first quarter. Europe’s policy makers clashed over steps to stabilize the 17-nation economy and Spanish bond yields approached levels that forced Greece, Ireland and Portugal to seek bailouts.

The MSCI Asia Pacific Index dropped for a third day, led by resources companies. The gauge dropped 10 percent in May, the biggest monthly drop since October 2008. World stock markets lost more than $4 trillion last month.

China’s manufacturing Purchasing Managers’ Index was 50.4 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today. The reading compares with the 52.0 median estimate in a Bloomberg News survey of 27 economists and 53.3 in April. A reading above 50 indicates expansion.

Oil traded at its lowest levels since October on speculation slowing U.S. growth and Europe’s debt crisis will reduce fuel demand as supplies rise. Crude for July delivery declined 0.5 percent to $86.11 a barrel in New York.

To contact the reporter on this story: Jason Clenfield in Tokyo at

To contact the editor responsible for this story: Darren Boey at

Stocks flounder after weak GDP, jobs data -

Stocks flounder after weak GDP, jobs data -

U.S. stocks finished in the red Thursday, ending a wretched month on a weak note.

"May is always a difficult month for the market, and this month has lived up to that reputation," said Fred Dickson, chief market strategist at D.A. Davidson, noting that the market has suffered declines in May for three out of the last four years.

This month's sell-off was sparked by escalating concerns about the eurozone debt crisis, with Spain and Greece keeping contagion worries front and center, as well as fears about a slowing U.S. economy. CNNMoney's Fear & Greed Index, which measures investor sentiment, has remained firmly in "extreme fear" territory for more than two weeks.

The Dow and S&P 500 dropped more than 6% in May. In fact, the Dow only booked five positive days this month. The last time this occurred was in January 1968. Meanwhile, the Nasdaq has declined more 7%.

The Dow and Nasdaq logged the worst monthly performance since May 2010, when investors were spooked by the Flash Crash, while the S&P 500 posted its biggest monthly loss since September 2011.

As stocks have tumbled, investors have rushed toward the safety of U.S. Treasuries, pushing the 10-year yield to record lows.

Thursday's market moves were driven by a batch of weak U.S. economic data, including reports on initial jobless claims and regional manufacturing, which cast a cloud over hopes that the domestic economy is improving.

Meanwhile, gross domestic product growth for the first quarter was revised lower to a 1.9% annual rate.

The Dow Jones industrial average finished down 26 points, or 0.2%. The S&P 500 lost 3 points, or 0.2%, and the Nasdaq shed 10 points, or 0.4%.

"The market environment is very fragile, and investor nerves are very fragile," said Dickson. "We're seeing immediate reactions to pieces of economic data and incremental news regarding Europe's banks and broader fiscal problems. Lacking a positive fundamental background, buyers are stepping back even though market valuations look compelling."

Investors also continue to keep tabs on Europe's debt crisis.

Worries about Spain not being able to fund bank bailouts, which could reach a cost of as much as €100 billion, continue to build. The yield on 10-year Spanish debt soared to 6.6% Wednesday, but retreated slightly Thursday.

The International Monetary Fund said it will begin its annual economic review of Spain next Monday.

Investors are also keeping a close eye on Greece, ahead of the country's elections next month, amid concerns that Greek voters could reject austerity measures, which would force their country out of the eurozone.

U.S. stocks also fell sharply Wednesday on heightened concerns about Europe's debt crisis.

Economy: A report on private-sector hiring from payroll services firm ADP showed a gain of 133,000 jobs, less than the 157,000 forecast by economists.

Additionally, the number of people filing for first-time unemployment benefits in the U.S. rose 10,000 to 383,000 in the latest week, which was higher than the expected 368,000 forecast by analysts.

The latest batch of jobs reports came before the government's closely watched monthly jobs report, which is due Friday. Analysts surveyed by CNNMoney expect that the U.S. economy added 150,000 jobs in May, including 12,000 government cuts. The unemployment rate is expected to stay at 8.1%.

The Chicago Purchasing Managers Index, which tracks manufacturing activity in much of the Midwest, fell for a third straight month to 52.7, the lowest level since May 2009. The index was expected to come in at 57 for May, up from 56.2 in the month prior. The report is seen as an indicator of what will happen with the national reading on manufacturing from the Institute of Supply Management, due Friday.

Foreclosures accounted for for 26% of home sales during the first three months of the year, according to a report released Thursday by RealtyTrac.

Companies: Shares of Joy Global fell after the mining equipment maker easily beat forecasts but lowered its guidance.

Networking equipment maker Ciena reported earnings that blew past analysts' estimates and issued a forecast in line with expectations, lifting shares.

Shares of TiVo fell after the DVR maker reported a larger-than-expected quarterly loss after the bell Wednesday.

Shares of Facebook hit a fresh low of $26.83 but managed to recover, ending the day up 5% at $29.60.

World Markets: European stocks ended mixed. Britain's FTSE 100 rose 0.2%, the DAX in Germany rose 0.3% and France's CAC 40 dropped 0.1%.

Firms suffer from 'ad hoc' financial reporting system investments - PC Advisor

Inefficient financial reporting is leading to a loss of confidence, high costs and hindered decision-making at large firms, according to research from business consultancy Accenture.

The research shows the majority of companies worldwide have made "substantial" investments in financial reporting systems intended to improve their reporting and filing processes. However, the investments have been made ad hoc, "leaving businesses with ineffective solutions and a lack of visibility, quality and confidence in their financial data", said Accenture.

The "Challenges of Corporate Financial Reporting" report highlights that businesses are unable to fully understand the cost of their financial reporting, with 60 percent of finance professionals unable to identify the total cost.

The report suggests that businesses need to change their investment strategies in order to avoid increased costs, ineffective financial reporting and missed key internal and external deadlines.

The report, jointly published by Oracle, surveyed 1,123 finance professionals at large organisations (employing over 250) in 12 countries, including the UK, USA, France, Germany, Russia and Spain.

The research shows 82 percent of companies have made changes over the last three years to their filing and reporting processes. But despite these investments inefficient spreadsheets (72 percent) and emails (68 percent) are still being used to track and manage reporting on a daily basis, suggesting that new investments are falling short of expectations.

Despite a fifth (21 percent) of finance teams seeing their costs rise across the financial close, reporting and filing processes, 60 percent of respondents admitted they did not know the total cost of managing and publicising financial results.

In addition, 68 percent of respondents admitted they have inadequate visibility of reporting processes, while 84 percent said "they find it difficult" to control the quality of financial data across the course of their reporting.

Not surprisingly, almost three-quarters (71 percent) felt their effectiveness was "limited in some way" by data analysis-related issues.

However, businesses are continuing to take steps to improve financial reporting methods, with 86 percent of companies "likely to make a significant investment" over the next five years.

Scott Brennan, executive director of the Accenture finance and enterprise performance consulting group, said: "These results mirror what we see and experience, and they're illustrative of why companies increasingly find it necessary in today's age of volatility to invest in their performance management."

In other recent Accenture research it was shown that the majority of UK citizens access government services digitally, but that a third are concerned about their personal data as a result.

US STOCKS-Wall St drops on economic growth worries - Reuters UK

Thu May 31, 2012 3:20pm BST

* Initial claims rise, ADP below expectations

* GDP revised downward

* Chicago PMI misses estimate

* Indexes off: Dow 0.5 pct, S&P off 0.8 pct, Nasdaq 1.1 pct (Adds Chicago data)

By Chuck Mikolajczak

NEW YORK, May 31 (Reuters) - Wall Street fell on Thursday after a slew of economic reports indicating the U.S. economy may have stalled and the euro zone's debt crisis cast doubt on global growth prospects.

A report by private payrolls processor ADP showed private employers created 133,000 jobs in May, fewer than the expected 148,000 while new claims for unemployment benefits rose by 10,000 for the fourth straight weekly increase. The data comes ahead of Friday's key payrolls report.

Commerce Department data showed economic growth in the United States was slightly slower than initially thought as gross domestic product was revised down to a 1.9 percent annual rate from last month's 2.2 percent estimate.

Adding to the negative tone, the Institute for Supply Management-Chicago business barometer declined to 52.7 from 56.2 in April, its lowest level since September 2009 and below Wall Street expectations.

"The markets have become less optimistic and much more accustomed to seeing numbers that are just not impressive," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

"It is clear the markets are pricing in a substantial slowdown moving forward in terms of GDP growth, employment gains, productivity gains - it's not encouraging for bulls."

Energy-related stocks were among the worst performers as crude prices slipped 0.8 percent as signs of a slowing slowing global economy heightened demand worries. The PHLX oil service sector index lost 1.9 percent, weighed down by a 2.9 percent drop in Schlumberger NV to $62.27.

European shares, which had steadied, turned negative after the U.S data. The FTSEurofirst 300 was off 0.5 percent.

The European Central Bank increased pressure for a joint fund to guarantee bank deposits in the euro zone, saying the region needed new tools to fight bank runs as the bloc's debt crisis drives investors to flee risk.

The increasing concern over the euro zone's debt crisis coupled with a spate of tepid domestic economic data has put the benchmark S&P index on pace for its worst monthly decline since September.

U.S. equities have been closely linked to the fortunes of the euro, with the 50-day correlation between the currency and the S&P 500 at 0.92. Expectations of an Irish vote in favor of Europe's fiscal pact helped the euro recover from a near two-year low against the dollar.

The Dow Jones industrial average dropped 65.39 points, or 0.53 percent, to 12,354.47. The Standard & Poor's 500 Index lost 11.00 points, or 0.84 percent, to 1,302.32. The Nasdaq Composite Index fell 31.92 points, or 1.12 percent, to 2,805.44.

Many top retailers reported stronger-than-expected sales in May, as shoppers overcame growing anxiety about the U.S. economy and the job market.

Target Corp advanced 0.9 percent after posting better-than-expected May same-store sales. The Morgan Stanley retail index gained 0.3 percent.

Ciena Corp climbed 7.2 percent to $12.74 after the network equipment company posted a surprise second-quarter adjusted profit.

Joy Global Inc slid 7.2 percent to $54.66 after the mining equipment maker said it expects order rate to moderate and revenue to remain flat for the next few quarters. (Editing by Dave Zimmerman)

CANADA STOCKS-TSX slumps on soft U.S. data, Europe - Reuters India

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Materials Stocks Have Taken a Beating, But I’m Still Bullish -

It’s been night and day for materials stocks in 2012. Many stocks in this sector popped early in the year, but have dropped hard recently to right where they were back in December.

So what’s going on? Simply put, many investors are worried the recovery is running out of gas — or worse, that it never was a recovery at all.

As America struggles, regions of Europe slip into recession and China starts to slow down, many are afraid materials companies will see already meager demand dry up and send these companies even lower.

That’s nonsense.

Consider this: Alcoa (NYSE:AA) hasn’t traded under $8.40 since May 2009. And ArcelorMittal (NYSE:MT) hasn’t traded this low since 2004!

Do we really think these companies are worse off now than back then? Do we really want to ignore that when Alcoa was last priced this low in 2009, as demand was weak and the company was restructuring, it delivered a 35% gain across the next 12 months?

I just don’t get it. Yes, there are many risks to the global economy out there. Yes, we’ve known about weak aluminum and steel demand for years. Yes, we’ve been on the eurozone death watch for months. The story of China’s slowdown, the softness in housing … I get it.

But what’s new here?

Rather than focus on old headlines, I’m interested in the momentum that Alcoa and ArcelorMittal are gaining compared with their crisis-level lows. And you should be too, now that shares are priced at the same levels or lower.

Consider that Alcoa slashed its global work force by 13% in 2009, laying off a massive 13,500 workers. ArcelorMittal also laid off thousands of workers in 2009, cutting output to just 70% of capacity back then and regularly idling facilities to bleed down oversupply ever since.

The restructuring has made both companies soundly profitable once more. And believe it or not, they actually are seeing glimmers of growth.

Alcoa has seen nine straight quarters of year-over-year revenue increases. ArcelorMittal has seen seven in a row. Admittedly, both stocks are forecast to see slight earnings declines in 2012 compared with 2011 if forecasts hold — but those numbers are light-years ahead of 2009. Also, both AA and MT are right around 52-week lows, so it’s hardly like you’re buying a top before a flop.

More good stuff for ArcelorMittal: The steel giant has a forward P/E of less than 5 right now — and a 4.5% dividend to boot!

And for Alcoa: Aluminum buyers in Japan, Asia’s largest importer, just agreed to pay a record premium to aluminum producers next quarter as the nation continues to ramp up its industries and rebuilds in the wake of the disastrous earthquake and tsunami last year. This reinforces my belief that between baseline demand and minimal output, base metal prices like aluminum and steel have nowhere to go but up.

There are risks in these stocks, to be sure. Lingering conflicts between management and union efforts at ArcelorMittal threaten disruptions to the business or increased labor costs. And Alcoa posted its first quarterly loss since 2009 in its fiscal fourth quarter as metal prices tumbled.

There also are some bigger-picture risks to acknowledge for these stocks and the sector in general:

  • Materials stocks are volatile, so even if we see a rally in these stocks across the next few months, it might not last long — as we saw with the jump in the first eight weeks of the year that evaporated just as quickly.
  • Inflation and the dollar can have a big factor on metal prices and the profitability of these companies. Many people (justifiably) think that the dollar’s current strength is simply due to the disaster in Europe rather than the merit of the U.S. itself, and it will only take a few more stupid debt ceiling headlines to change that in a hurry.
  • As many will point out, some of the previous rallies in equities were based on Fed action or sentiment rallies, so investing based on logical assumptions or fundamental trends might never amount to anything.
  • Then there are the Armageddon scenarios where a eurozone meltdown obliterates the global economy — but if you believe that’s the case, frankly, you should be building a bunker instead of reading this article.

However, even with those factors in play, I think the bottom line is that materials stocks like Alcoa and ArcelorMittal are the ultimate cyclical stocks. When the economy ramps up, construction rebounds and durable goods are in demand, these companies will take off.

I, for one, think that a year or two from now we will be in a true self-sustaining recovery — and that means AA and MT are bargains.

Maybe you think it’s a Pollyanna outlook to expect that a recovery is coming at all in the next few years, or maybe you think it’s na├»ve to say Alcoa and Arcellor Mittal have “right-sized” themselves enough to weather any short-term difficulties in the next six months. If so, I would love to hear from you and have you make your case. Please share your thoughts below in the comment section or drop me a line at

But to me, I think it’s a relatively low-risk investment to tread water in AA or MT and wait for sunnier times to lift shares. That’s why I personally own Alcoa stock and think AA is your best stock to hold for the rest of 2012.

Jeff Reeves is the editor of and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at editor@investorplace​​.com or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves owned a position in AA.

US stocks waver; euro dives on Greece turmoil - Yahoo Finance

Stronger news about the U.S. economy stilled the ripples from Europe's latest political impasse Tuesday, pushing U.S. stocks between modest gains and losses.

The euro and European stocks plunged as trading in New York began after efforts to form a government in Greece collapsed. Newly-elected political leaders there disagree about whether to accept more international bailouts and continue with painful spending cuts.

In the U.S., stocks staged a mid-morning rally after word that confidence among U.S. builders rose to a five-year high in May. The index has risen for seven of the past eight months. Homebuilders rallied. Hovnanian Enterprises surged 10 percent, Lennar Corp. 4 percent and KB Home 3 percent.

Earlier, a survey by the New York Federal Reserve found that manufacturing activity in the New York region rebounded this month far more strongly than economists had expected.

The market's early rise deflated briefly, then stocks climbed at midday to new daily highs. By the afternoon, the indexes again were flat for the day.

The Dow Jones industrial average fell 12 points to 12,683 as of 3 p.m. EDT. Losses by most of its components were offset by gains for JPMorgan Chase and Bank of America, shaking off recent losses related to the surprise $2 billion trading loss that JPMorgan announced last week.

The Standard & Poor's 500 index fell two to 1,336. The Nasdaq composite index rose seven to 2,909.

Stocks are having their worst month in the past eight. For the month, the Dow is down 518 points — about 4 percent — after hitting a four-year high on May 1. The average is on track to post its first monthly loss since September, when it fell 6 percent.

If the Dow closes higher, it will be only its second up day since the peak reached on May 1.

The euro fell as low as $1.2730, a four-month low against the dollar, after Greek socialist leader Evangelos Venizelos declared that attempts to form a governing coalition there had failed and new elections will be held next month. If voters elect parties opposed to the terms of the country's financial rescue, Greece could be expelled from the euro, shocking global markets.

Stock indexes in France, Britain and Germany gave up earlier gains after Venizelos' remarks and closed sharply lower.

Aside from fears about Europe, stocks are suffering because a string of weaker economic data in recent weeks has dampened hopes for corporate performance in the current quarter ending June 30, said John Butters, senior earnings analyst at FactSet, a financial data provider.

For the first month of the quarter, as earnings came in strong and stocks rose, analysts' expectations for second-quarter earnings growth held steady at 6 percent, Butters said. In the two weeks since then, as the U.S. economy appeared to soften and Europe's problems reemerged, analysts cut their estimates for S&P 500 earnings growth to 5 percent, he said.

Analysts expect earnings to decline this quarter for half of the 10 industry groups in the S&P 500, Butters said. He said many expect a strong rebound in the fourth quarter as demand returns in emerging markets such as China and India.

Among other stocks making big moves:

— Home Depot slumped 2 percent, the most of the 30 companies in the Dow, after the world's biggest home-improvement company forecast revenue that was below what Wall Street analysts were expecting.

— TJX Cos., which owns the T.J. Maxx, Marshalls and HomeGoods store chains, shot up 7 percent, the most in the S&P 500 index. The discount retailer reported a 58 percent surge in first-quarter income and raised its full-year profit forecast.

— Avon Products Inc. fell 11 percent, the most in the S&P 500 index, after Coty Inc. canceled its unsolicited, $10.7 billion bid for the cosmetics retailer.

— Groupon leapt 6 percent after the online daily discount site reported first-quarter revenue that exceeded analysts' expectations.


Daniel Wagner can be reached at