Europe remains the focus of attention across all financial markets in the run-up to the June 17 Greek election that could go a long way to determining the country's membership of the euro as well as the future of the single currency zone.
On Wednesday, the leaders of the 27 European Union countries will hold an informal meeting in Brussels. The summit is expected to focus on ways to kick start the region's faltering economy.
"There have been lots of comments from various officials regarding the wish of the EU for Greece to remain in the eurozone, the need to agree upon a growth agenda to go alongside the austerity agenda and of course on common euro bonds," said Gary Jenkins, managing director of Swordfish Research.
With that backdrop, stocks have recovered this week after a parlous few sessions.
In Europe, France's CAC-40 closed 1.9 percent higher at 3,084.09, while Germany's DAX rose 1.7 percent to 6,435.60. The FTSE 100 index of leading British shares ended up 1.9 percent at 5,403.28, helped by figures showing that the annual inflation rate dropped to 3 percent in April, its lowest level since February 2010. The International Monetary Fund, however, issued a tough assessment of U.K. economic policy on Tuesday, urging authorities to do more to boost demand in the economy.
In Greece, political uncertainty and a gloomy prediction by the Organization for Economic Cooperation and Development pushed shares on the Athens Stock Exchange to their lowest level in 22 years on Tuesday, 1.6 percent down at 536.
Wall Street also advanced following Monday's gains — the Dow Jones industrial average was up 0.3 percent at 12,543 while the broader S&P 500 index rose 0.6 percent to 1,323.
Europe's debt crisis as well as developments in Greece has the potential to knock the rebound in sentiment witnessed so far this week.
"Markets are by no means out of the woods, however, and much uncertainty will remain ahead of Greece's election in just less than a month," said Mitul Kotecha, head of global strategy at Credit Agricole CIB.
If a new government fails to follow through with an austerity plan agreed to by prior Greek leadership, the country could lose a promised multibillion euro bailout from international lenders. Greece's default could send shockwaves throughout Europe. The OECD's top economist warned on Tuesday that the 17-country eurozone risks falling into a "severe recession" and called on governments and Europe's central bank to act quickly to stop the slowdown spilling over into the global economy.
The organization now forecasts a longer and deeper contraction in the eurozone than in its November report, with the eurozone economy expected to shrink in 2012, and only manage a feeble recovery in 2013.
Earlier, Asian markets posted sizeable gains. Japan's Nikkei 225 index rose 1.1 percent to close 8,729.29 and Hong Kong's Hang Seng added 0.6 percent to 19,039.15. South Korea's Kospi climbed 1.6 percent to 1,828.69.
Hopes that China will announce new measures to boost growth also helped push shares higher. Investors were encouraged by weekend statements from Chinese Premier Wen Jiabao, who promised to spur the world's second-largest economy, a shift from previous rhetoric about curbing inflation.
In the oil markets, benchmark oil for June delivery was down 77 cents at $92.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.09 to settle at $92.57 in New York on Monday.
In currencies, the euro slipped to $1.2736 from $1.2793 late Monday in New York. The euro hit a four-month low against the dollar last Thursday. The dollar was up at 79.97 yen from 79.36 yen.—
Pamela Sampson contributed to this report from Bangkok.
Facebook stocks in freefall: Drops from $38 to $31 per share in three days - Examiner
Slideshow: SpaceX Dragon blasts off from Cape Canaveral.
See the incredible launch
Victoria 'financial education' firm has another (questionable) deal for you - The Vancouver Sun
In March, I wrote about a Victoria-area financial planning firm that has caused its clients a whole lot of financial grief.
Wealth by Design describes itself as a "financial services education and capital-raising company." It holds seminars and "boot camps" where it purportedly teaches attendees how to become "financially free within 10 years or less."
Not coincidentally, it offers an array of investment products that will purportedly help attendees achieve that goal.
At the time of my column, the firm's chief executive was Stephen McClure, who was supposedly so financially adept that he "became financially free at the age of 32."
I found this puzzling, as many of the investments he recommended were disasters.
One was Merendon Mining, which was part of an alleged Ponzi scheme perpetrated by Milowe Brost and Gary Sorenson, who are now facing criminal fraud charges in Calgary.
Another was a charitable donation tax-deduction scheme called the Canadian Humanitarian Trust, which was disallowed by Canada Revenue Agency.
Yet another was an investment in Ontario-based Borealis International Inc., which was shut down by the Ontario Securities Commission.
With a string of losers like this, I wondered how McClure could have achieved financial freedom at such a young age.
Alas, he confessed, it was all a mistake: he was not "financially free" after all. He had invested in the same deals and had suffered similar losses.
McClure recently told me he was "laid off" as the firm's CEO on April 20, the month after my column was published. One client told me McClure is now claiming to be on the verge of personal bankruptcy.
I wanted to ask Denise Andison - the founder, owner and chief operating officer of Wealth by Design - how her chief executive could sell so many bad investments and make such bogus claims about being "financially free" with no apparent repercussions until he was outed by The Vancouver Sun, but she never returned any of my calls.
Wealth by Design is now promoting another questionable investment offering. It's a Victoria-based company called One World Polymers Corp., which purportedly purchases and ships waste plastic to recycling plants in other countries.
Or at least that's the plan. It's not clear that One World is actually in business. The company was only incorporated in March, which suggests it is still in the development stage. I repeatedly requested a copy of the company's offering memorandum, which would presumably tell the tale, but neither Wealth by Design nor One World responded to my queries.
I am not surprised that neither firm responded. They are not operating at arm's-length. Andison, who runs Wealth by Design, also serves as chief operating officer of One World. Gary Lahnsteiner, who works as a "wealth coach" at Wealth by Design, also serves as chief marketing officer of One World. The two companies also share the same office in Victoria. They are also jointly promoting the investment. In March, they held a dog-and-pony show for about 100 prospective investors at the Grande Pacific Hotel in Victoria. Another investor meeting was held at the Victoria office on April 30.
Stocks: Focus on Greece, growth and tech - KSAT 12
U.S. stocks face a tough road Wednesday as investors worry about Greece leaving the eurozone and a slowdown in Asian economies. Technology stocks may come under pressure after Dell reported weak sales, sending its shares plunging nealry 13% in premarket trading.
And investors will be keeping close tabs on Facebook and the unfolding saga, as investigators look into whether Morgan Stanley, the lead underwriter for Facebook's initial public offering last week, shared a negative assessment of the social network with major clients ahead of the IPO.
Dow Jones industrial average, S&P 500 and Nasdaq futures were 0.7% lower ahead of the opening bell. Stock futures indicate the possible direction of the markets when they open at 9:30 a.m. ET.
European leaders are due to meet in an ad hoc summit to address the latest problems with European sovereign debt, amid growing worries that Greece is moving closer to dropping the euro and what the contagion effects an exit might have on other economies.
Former Greek prime minister Lucas Papademos told Dow Jones Newswires late Tuesday that Greece is considering preparations to leave the eurozone.
Adding further pressure on world markets, the World Bank cut its estimates for growth in the Asia-Pacific region, including China. It now forecasts a growth of 7.6% this year -- down from 8.2% in 2011, and 10% as recently as 2010.
On the domestic front, weak earnings, sales and guidance from Dell late Tuesday sparked a sell-off in its shares, as well as shares of rival Hewlett Packard. HP is set to report its own results after the bell Wednesday, when it is expected to also announce deep staff cuts.
The computer and printer maker is also widely expect to announce mass layoffs along with its report.
U.S. stocks ended flat Tuesday, turning lower during the final hour of trading on reports about Greece's preparations to leave the eurozone.
World markets: European stocks were sharply lower in morning trading. Britain's FTSE 100 tumbled 1.9%, as did France's CAC 40. The DAX in Germany lost 1.8%.
Asian markets ended lower following the World Bank's cut on growth forecasts. The Shanghai Composite slipped 0.4%, while the Hang Seng in Hong Kong lost 1.3% and Japan's Nikkei tumbled nearly 2%.
Companies: Automaker Ford Motor had its debt upgraded out of junk bond status by Moody's late Tuesday -- an important benchmark for the automaker that will lower its borrowing costs, and allow it to reclaim collateral it put up for a credit line.
Homebuilder Toll Brothers reported better-than-expected earnings and revenue that was in line with forecasts. It also upped its guidance for the second quarter.
Financial stocks were under pressure early Wednesday, with shares of JPMorgan Chase, Bank of America and Citigroup all down more than 1% premarket.
Economy: New home sales for the month of April are expected to come in at an annual rate of 339,000, up from 328,000 in the month prior. The report follows a strong report on sales of existing homes Tuesday, in which sales climbed 10%.
Currencies and commodities: The dollar gained against the euro and the British pound, but lost ground versus the Japanese yen.
Oil for July delivery slipped 83 cents to $91.02 a barrel. Officials from six world powers are due to hold talks with Iran in Baghdad on Wednesday about its nuclear program, raising hopes that there might be an deal that would end sanctions against Iran.
Gold futures for June delivery tumbled $20.80 to $1,555.80 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury was slightly higher, knocking the yield down to 1.74% fro 1.79% Tuesday.
US STOCKS-Futures hit by euro zone, Dell concerns - Reuters UK
* Stage set for Hollande-Merkel showdown at EU summit
* Papademos clarifies euro remarks but concerns remain
* Dell revenue outlook weighs on sentiment
* Facebook advised analysts to cut forecasts pre-IPO
* Futures down: S&P 8.6 pts, Dow 88 pts, Nasdaq 19.25 pts
NEW YORK, May 22 (Reuters) - U.S. stock index futures fell on Wednesday ahead of a meeting of European leaders and on concerns over Greece's future in the euro zone.
A weaker-than-expected revenue forecast from computer maker Dell also weighed on investor sentiment.
* Leaders of the 27 EU countries are to meet in Brussels later in the day for a summit expected to deal with Europe's economic woes but also ways to prevent debt-mired Greece from skidding into a chaotic bankruptcy. The leaders are to consider ways to generate growth and discuss the idea of regional bonds to be jointly underwritten by all euro zone member states. However, Germany has already reiterated its opposition to such a move.
* Dell Inc shares fell 12.9 percent to $13.13 in premarket trade, a day after the company forecast disappointing second-quarter revenue as U.S. and European corporate tech spending weakens and consumer personal computer sales continue to shrink.
* Fears that Greece may have to leave the euro grew after Dow Jones earlier quoted former prime minister Lucas Papademos as saying Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone. His clarification in a television interview later offered little respite.
* Facebook Inc will also be eyed, after sources said that while company officials traveled the country to talk up the company's $16 billion initial public offering, the social networking giant advised analysts for underwriters to reduce revenue and earnings forecasts. The stock was off 2.4 percent at $30.27 in premarket trade.
* S&P 500 futures lost 8.6 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 88 points, and Nasdaq 100 futures fell 19.25 points.
* Ariba Inc will also be in the spotlight after top European software company SAP AG said it plans to buy Ariba in a deal valuing the business and commerce network company at $4.3 billion, its latest maneuver against Oracle in the fast-growing Internet-based computing market.
* Wells Fargo & Co does not employ the same kind of hedging strategy that has triggered a trading loss of at least $2 billion at rival JPMorgan Chase & Co, the bank's chief risk officer said on Tuesday.
* PetSmart Inc posted a better-than-expected quarterly profit and raised its full-year outlook on strong sales across all its product categories, sending its shares up 8 percent in after-market trade.
* On the macro front, investors awaited home price index for March, due at 10:00 a.m ET (1400 GMT), as well as new home sales for April, also due at 10:00 a.m. ET.
* U.S. stocks closed mostly flat on Tuesday after volatility late in the session, with weakness in materials and energy shares offsetting strength in financials. (Reporting By Angela Moon, editing by Dave Zimmerman)
Money becomes new church battleground - The Guardian
The Rev Paul Perkin seemed bewildered by the question: what was his take on the latest scheme for conservative evangelical churches to withhold money from the rest of the Church of England in order to keep it out of the hands of liberals, gay people or women priests?
"I can't talk about that," he said. "You'll have to ask James Paice." Both men are vicars in south London. And both are directors of the company set up last month to implement this scheme, the Southwark Good Stewards Company. It is the latest, and perhaps the most serious, move in a bitter power struggle within the CofE and the wider Anglican communion.
Not contributing to central funds could represent a serious threat to the rest of the CofE, whose cohesion depends in part on a redistribution of money from rich, largely suburban and middle-class parishes to the inner cities and the countryside where congregations are too small and the buildings too old to be economically sustainable.
Although the Good Stewards Company claims not to be separating from the rest of the CofE, this reading is plausible only if you assume it is the rest of the CofE that has separated from Christianity.
The money will be made available only to churches that commit themselves to a rejection not just of homosexuality, but of liberalism: they must sign "in good faith" a declaration that they will "reject the authority of those churches and leaders who have denied the orthodox faith in word or deed … Pray for them and call on them to repent and return to the Lord." Such people include the present archbishop of Canterbury, Rowan Williams.
The involvement of Perkin in this protest brings it very close to the heart of the institutional church. His is one of the most prosperous and well connected parishes in England: St Mark's, Battersea Rise, in south London, which hosted an international meeting of conservative bishops last month. Apart from encouraging others to hold back money, it is also preparing a network of sympathetic lawyers in case the church fights back.
St Mark's has a long history of financial and political links with conservative churches outside England, but it also stands very close to the central networks of the CofE. Until last year, the church's most senior civil servant, William Fittall, who is the secretary general of its governing body, the General Synod, was a regular worshipper there, a licensed reader who sometimes preached for them.
Before last month's meeting, the congregation were treated to a sermon from the archbishop of Sydney, Dr Peter Jensen, one of the leaders of the conservative movement, who said: "The world has invaded the church. So the contest we have, as Bible-based, Bible-believing Christians, is on two fronts. It is against the world, but it is also against those in the church who have come to terms with the world, who have made their peace with the world, who have compromised with the world, who have given up biblical standards in order to be thought well of in the world."
He warned the congregation they would be vilified, discriminated against, and turned into second-class citizens for their beliefs. "Alas, the truth of the matter is that there are occasions in which the church is being used to persecute the church," he said.
Last year, the evangelical parties blocked the appointment as bishop of Southwark of the two liberal candidates, Jeffrey John, who is gay, and Nick Holtam, who is sympathetic to gay marriage. The compromise candidate, Christopher Chessun, has failed to promote any evangelicals in his first year in office. This month 100 of them demanded, and got, a meeting with the bishop to complain about this.
Even those among conservatives who do not support the financial boycott, and they are a majority, now feel aggrieved at the lack of promotion for evangelicals.
And among the others, the dream of financial independence from the rest of the church has been nurtured for years.
The Rev Richard Perkins, who runs a small independent but still Anglican chapel in Southwark, once blogged: "Why would you give money to a corrupt central administration that'll use it to fund ministries which we oppose? … We shouldn't fund heresy. That's disgraceful."
These tensions are mirrored in the wider Anglican communion, which the conservatives hope to control because they far outnumber the liberal churches of the Anglo-Saxon world. They believe they speak for the true CofE, never mind what the archbishop of Canterbury or the synod may decide. They have set up a body calling itself the Anglican Mission in England.
Five retired English bishops, among them Dr Michael Nazir-Ali, the former bishop of Rochester who was the evangelical candidate for archbishop of Canterbury last time, have promised to act as bishops for those clergy who sign up to the pledge not to accept women bishops or tolerate gay people in the church. It is not at all clear that these arrangements are legal, since the authority of the bishops over their clergy is established by the law of England. But any legal battle would be enormously expensive and time consuming. There is no sign that the rest of the Church of England has the stomach for it.
One crisis is approaching rapidly. This summer the synod must decide whether to accept legislation allowing women to become bishops that will not make special provision for their opponents. The present draft is the product of years of wrangling. If it goes through unamended Nazir-Ali predicts that more clergy will come over to his organisation. They will attempt to leave the rest of the CofE, taking their money and their churches with them – all the while claiming, as their rhetoric already suggests, that it is the rest of the church that has left them.
But if the bishops water down the draft to avoid this open split the other side – a great majority of the church – will probably rebel. Campaigners for women bishops threaten to vote the whole measure down rather than accept amendments that would give them a permanent second-class status. The bishops meet later this month to decide and their space for compromise is vanishingly small.
Sensex ends below 16,000; telecoms stocks hit - Reuters India
Mumbai |
Mumbai (Reuters) - The BSE Sensex and Nifty fell on Wednesday, closing at their lowest since January, as the rupee hit a new record low below the psychologically key 56 level, while global stocks continued to be routed because of fears about the euro zone.
Telecom stocks such as Bharti Airtel (BRTI.NS) were among the big decliners ahead of Thursday's meeting by the telecom ministry to decide on a controversial proposal from a regulatory body to raise spectrum prices in an auction of mobile airwaves.
Traders expect more weakness ahead for Indian stocks, given the rupee has dropped more than 13 percent since its 2012 peak in February, underscoring an urgent need of major reforms to get investors believing again in the India story.
The rupee dropped to a record low of 56.225 to the dollar amid renewed global risk aversion. Indian stocks and the rupee tend to track each other's directions.
"There is lot of uncertainty in the market partly because of European crises and partly because of inaction from of government and Reserve Bank of India," said R.K Gupta, managing director at Taurus Mutual Fund.
The BSE Sensex ended down 0.5 percent at 15,948.10 points, closing at its lowest since January 9 and adding to the 1 percent loss it had clocked in previous session.
The broader 50-share Nifty fell 0.51 percent to 4,835.65 points, its lowest since January 12.
Gupta added market valuations are turning attractive and said he expected a recovery should the government address some of the investor concerns about its fiscal challenges, including about its spending.
Foreign flows to equities were slightly positive in May as of Tuesday's close, but overseas investors were net sellers of around 11 billion rupees worth in April.
Telecom stocks were among the big decliners ahead of the key ruling on Thursday.
The 2G airwave auction must be completed by August after the Supreme Court of India ordered the cancellation of all cellular permits awarded in a scandal-tainted 2008 sale process.
Idea Cellular (IDEA.NS) fell 3.7 percent, while Reliance Communications (RLCM.NS) ended 1.8 percent lower.
Goldman Sachs downgraded Idea Cellular to "neutral" from "buy" and Reliance Communications to "sell" from "neutral", citing the regulatory overhang.
Bharti Airtel dropped 4.4 percent, closing at its lowest since July 2010, hit as well by fears about the impact from a slumping rupee on its overseas debt exposure.
Among other decliners, Reliance Industries (RELI.NS) fell 0.6 percent after exploration partner Niko Resources said they have abandoned the D4 oil and gas block off India's east coast, underlining the production problems in the region.
Auto shares fell on speculation the government could raise fuel prices, adding to worries about a sector facing uncertainty about future sales and rising raw material costs because of the falling rupee.
Tata Motors (TAMO.NS) 1.4 percent, while two wheeler Bajaj Auto (BAJA.NS) ended 1.3 percent lower.
Tata Power (TTPW.NS) shares dropped 2 percent, a day after the company posted a consolidated net loss of 6.3 billion rupees.
(Additional reporting by Manoj Dharra; Editing by Rafael Nam)
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