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World stocks dip, long bond gains as Fed 'Twists' again - Yahoo Finance
By Steven C. Johnson
NEW YORK (Reuters) - Major stock indexes fell on Wednesday while Treasuries trimmed losses after the Federal Reserve extended monetary stimulus to keep the U.S. recovery from stalling.
Analysts said investors had expected the U.S. central bank to extend its bond-buying program - dubbed "Operation Twist" - but said some were disappointed that it stopped short of more aggressive measures to boost growth in the face of slower U.S. hiring and a festering European debt crisis.
In Operation Twist, which was to end this month, the Fed sells short-term debt it holds to buy longer-term bonds in hopes of lowering long-term borrowing costs.
Fed Chairman Ben Bernanke said that policymakers were ready and able to do more if needed, reiterating what he said in the past, but offered few specifics.
"The most dovish investors were looking for something a little more concrete about the path to more easing, but so far, Bernanke has sounded non-committal," said Standard Chartered currency strategist Mike Moran. "He's leaving the door ajar, but that's still a slight disappointment for some."
John Canally, investment strategist and economist at LPL Financial, said "there were a lot of guys out there with the finger on the 'sell' button unless they saw balance-sheet expansion."
The Fed's caution cleared the way for investors to take profits after four straight days of U.S. stock gains.
With half an hour of trading left, the Dow Jones industrial average was down 49.65 points, or 0.39 percent, at 12,787.68. The Standard & Poor's 500 Index was down 6.24 points, or 0.46 percent, at 1,351.74. The Nasdaq Composite Index was down 9.76 points, or 0.33 percent, at 2,920.00.
The MSCI index of global stocks reversed earlier gains to fall 0.1 percent.
The euro fell 0.2 percent to $1.2661 as profit-taking erased earlier support from reports that Greek conservatives had succeeded in forming a coalition government.
Bond prices also swung from gains to losses throughout the day, with the 30-year Treasury bond last up 13/32 to yield 2.71 percent. The benchmark 10-year U.S. Treasury note was down 4/32, the yield at 1.63 percent.
U.S. crude oil for July delivery fell $2.23, or 2.65 percent, to $81.06 per barrel. The July contract will expire at Wednesday's close.
"Crude futures have been following the stock markets, which have been strong in anticipation of the Fed move," said Mark Anderle, trader for TAC Energy in Dallas. "Now that the Fed's done it, we're going through the 'buy the rumor, sell the news' phase."
SIGNS OF PROGRESS IN EUROPE
Whatever disappointment markets felt after the Fed was tempered by signs that Europe's leaders were making progress on a long-term plan to resolve the continent's debt crisis.
The FTSE Eurofirst 300 index of top European shares rose 0.5 percent after hitting a one-month high in the previous session.
German government bond yields also retreated from record lows after European leaders said they were aiming to hammer out a plan next week to integrate the region's banking sectors.
The United States and other nations have long urged Europe to embrace common banking supervision and deposit insurance to break the cycle of indebted governments having to take on more debt to bail out troubled banks.
A proposal to use the euro zone's new rescue fund to buy sovereign debt and reduce governments' borrowing costs helped ease selling pressure on other European bond markets.
Spain's 10-year government bond yield, a gauge of the compensation investors demand to lend to the government, fell 27 basis points to 6.93 percent. The equivalent Italian yield fell 15 basis points to 5.77 percent.
Spot gold fell $15.17, or 0.94 percent, to $1602.20. Gold hit its 2012 high around $1,790 in February when the Fed said it would keep interest rates near zero through 2014.
U.K. Stocks Advance for Fourth Day; Invensys, ITV Rally - Bloomberg
U.K. stocks increased for a fourth day, extending a six-week high, amid speculation the Federal Reserve may expand support for the economy and as Bank of England policy makers said more stimulus is likely.
Invensys Plc surged 28 percent after the company was said to be evaluating options, including a sale. ITV Plc (ITV) climbed 3 percent amid reports that a private-equity company might be interested in acquiring the broadcaster. Aer Lingus Group Plc soared 15 percent in Dublin after Ryanair Holdings Plc (RYA) said it will make another attempt to buy the Irish airline. Kesa Electricals Plc (KESA) sank 5 percent after the retailer’s profit fell.
The FTSE 100 Index rose 35.98 points, or 0.6 percent, to 5,622.29 at the close of trading in London, the highest since May 4. The gauge has still fallen 5.8 percent from its 2012 high on March 16 as concern mounted that Greece will leave the euro area. The broader FTSE All-Share Index advanced 0.7 percent today, while Ireland’s ISEQ Index slipped 0.3 percent.
“As the global economy teeters on the brink, and the euro- zone crisis festers away in the background, the hope for many is that Helicopter Ben and his band of policy makers at the Fed will unleash a new round of stimulus, or at the very least tweak the language of their statement to make it more accommodative,” Chris Beauchamp, a market analyst at IG Index in London, wrote in e-mailed comments. “We had an appetizer this morning when the Bank of England published the minutes of its latest policy meeting.”
Operation Twist
Fed Chairman Ben S. Bernanke and fellow policy makers will expand Operation Twist beyond $400 billion to spur growth and buy protection against a worsening sovereign-debt crisis in Europe, according to a Bloomberg News survey of economists.
Fifty-eight percent of respondents in a June 18 poll said the Fed will prolong the program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio. The current plan ends this month.
The Federal Open Market Committee ends its two-day meeting today with a statement scheduled for release at 12:30 p.m. in Washington. Sixty percent of the economists surveyed said the Fed probably won’t start a third round of large-scale bond purchases, also known as quantitative easing.
Bank of England Governor Mervyn King and three other policy makers were overruled in a push to expand the bank’s bond- purchase program as a majority said more stimulus was likely to be needed to address risks from the euro crisis, according to minutes of its June 6-7 meeting published today.
Bond Purchases
The Monetary Policy Committee voted 5-4 to keep its bond- purchase target at 325 billion pounds ($511 billion). Most MPC members “judged that some further economic stimulus was either warranted immediately or would probably become warranted to meet” their 2 percent inflation target.
Euro-area leaders at the Group of 20 summit in Mexico yesterday pledged to take “all necessary policy measures” to defend the currency union. The leaders of the world’s 20 biggest economies endorsed a road map for tighter integration to cut borrowing costs and prevent further economic damage.
Antonis Samaras, leader of Greece’s New Democracy party, was sworn in as prime minister today after Greek political leaders agreed on a coalition that will seek relief from austerity measures tied to international loans.
New Democracy, which won a June 17 election with almost 30 percent of the vote, will join forces with the socialist Pasok party, which finished third, and the sixth-place Democratic Left. They will hold 179 seats in the 300-member parliament, ending a period of political limbo that began with an inconclusive May 6 election.
Invensys, ITV
Invensys (ISYS) rallied 28 percent to 257 pence, the biggest gain since 2001. The British maker of rail signaling and industrial automation systems is evaluating options including a sale after Emerson Electric Co. expressed interest in buying some or all of the company, said people familiar with the situation.
Emerson is mainly interested in Invensys’s Foxboro unit, which makes meters and control systems, and not the rail unit, said one of the people, who asked not to be identified as talks are private. Still, Emerson would consider a deal for the whole company to get the Foxboro business, that person said.
ITV climbed 3 percent to 76.5 pence, its highest level this month. Newspapers including the Financial Times and the Guardian reported speculation that the media company might be a takeover target for a private-equity company. ITV spokeswoman Mary Fagan declined to comment.
ITV ‘Attractive’
“I can easily justify and rationalize why it would be attractive to a private-equity buyer,” said Alex DeGroote, an analyst at Panmure Gordon in London. “The probability of such a sale however is low. Execution and borrowing is tough in this environment.”
Aer Lingus (AERL) jumped 15 percent to 1.09 euros in Dublin trading as Ryanair, Europe’s biggest discount airline, said it will make an offer that values the carrier at 694 million euros ($883 million).
Ryanair intends to make an all-cash bid of 1.30 euros a share. It already holds a 29.8 percent stake acquired in 2006 and 2007. Aer Lingus said investors should take no action.
Sage Group Plc (SGE), the U.K.’s biggest software maker, rose 5.5 percent to 267.5 pence, gaining for a fourth consecutive day after purchasing a controlling stake in Folhamatic to enter Brazil for the first time.
Aviva Advances
Aviva Plc (AV/), an insurer, climbed 4.7 percent to 279.1 pence. The European Union is considering phasing in new capital rules for the life insurance industry over seven years, easing the burden on insurers who had criticized the changes.
The European Commission is considering the change as it negotiates with insurers and members of the European parliament about the transition from the current Solvency I regime to Solvency II rules, Karel van Hulle, the EC’s head of pension and insurance, said today.
Kesa Electricals slid 5 percent to 52.5 pence, the biggest drop in more than a week. The owner of the Darty electronics chain in Europe said profit slumped 42 percent and cut its dividend as tough conditions across France, its largest market, weighed on sales of televisions.
Home Retail Group Plc (HOME), the operator of retail stores, slid 5.3 percent to 87 pence after yesterday surging 24 percent. The stock was cut to neutral from overweight at HSBC Holdings Plc, meaning investors should no longer hold more of the shares than are represented in equity benchmarks.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
Rangers: 'Make right financial choice' urges Charles Green - BBC News
Rangers chief executive Charles Green believes Scottish football should do "what is right financially" as the club await a vote on their future status.
Scottish Premier League clubs will decide on 4 July whether Green's 'newco' Rangers can replace the old club in the top flight.
Green's group will get a vote and Rangers need the support of seven other clubs to gain an SPL place.
"There is no easy solution," Green told the Rangers website.
Charles Green Rangers chief executive“We're not here to make huge profits and to pay those profits out in dividends back to investors”
"It's something we all have to deal with, we all have to take responsibility for and we all have to come up with something that works not just for an individual club but for the whole collective.
"We've always said that we bought the club because we want to play a team in Europe, we want to rebuild the image of this club and everybody wants to play in the Premier League.
"Whether that can happen is out of my control. It's in the hands of the other members of that league."
Should Green not get the necessary support, Rangers would have to apply to the Scottish Football League for the vacancy that would arise in Division Three after various clubs are moved up a division.
Fans of SPL clubs have expressed a desire to see Rangers' application turned down on grounds of sporting integrity, but club chairmen may also be influenced by the potential financial implications of the Ibrox side's absence from the top division.
"My emails are blocked at the moment with fans thanking me for saving their club but making it very clear that Rangers fans will unite whether we play in the SPL the First Division or the Third Division," said Green.
"I know that Rangers fans will not desert this club. But it's important, not just for Rangers but for the whole of Scottish football, because the financial implications for the whole of Scotland, not just for SPL clubs, is a massive, massive problem to face up to.
"I think some of the views we see and some of the comments are not based on business and, of course, the criticism I regularly get burdened with is, for me, every decision is about business.
"It's not about passion, it's not about commitment to a cause.
"It's purely about doing what is right financially because if there is no money - and that doesn't just include Rangers Football Club, it includes the SFA, SPL and the old mantra of going right down to grassroots football - we go out of business."
Meanwhile, Green insists his group, which bought Rangers' assets last week, is "not in here to make a fast buck and disappear".
Former director Dave King has expressed concern about cutbacks, while former manager Walter Smith, who fronted an unsuccessful attempt to gain control of the club, has also been lukewarm about Green's plans.
"The investors who have come in have seen this as an opportunity to rebuild the club, but they see this as a long-term investment," added Green.
"We will be announcing further investors in the next few weeks.
"I'd just like to clear up one issue. We're not here to make huge profits and to pay those profits out in dividends back to investors.
"But this club has to make a profit because any business, whether it's a football club, a petrol filling station or a corner shop, has to do that.
"If it doesn't make a profit, it goes out of business and we haven't spent all our time and resources to acquire this club then allow it to go back the same way within a year."
Pearl Jam's former financial manager charged with stealing from the band - The Guardian
A former member of Pearl Jam's management team has been charged with stealing $380,000 (£242,000) from the band.
Rickey Charles Goodrich was chief financial officer with Curtis Inc, the band's management company, when he is alleged to have taken money from the band's accounts. Prosecutors say he committed the theft beween 2006 and September 2010, when he was fired. He had begun working for Pearl Jam in 2005 and joined Curtis Inc the following year.
Goodrich has been charged with 33 counts of theft, and is expected to enter a plea on 28 June at his hearing at Seattle's King County Superior Court. Prosecutors say he transferred money from company accounts to pay debts he and his wife had accrued. He is also alleged to have used company credit cards to pay for personal items, including family holidays and wine.
The charging documents claim that hired investigators found Goodrich had claimed to have paid thousands of dollars to band-members and crew that remained unaccounted for. The band's manager had reviewed areas of their cash flow after becoming concerned by Goodrich's management of their money in late 2009.
According to the Seattle Post-Intelligencer, police claim the thefts cost the management company $556,000 (£354,000), including investigative expenses. Kelly Curtis of Curtis Management said, "We are deeply saddened by this situation," but added that he is "looking forward to a resolution".
Pearl Jam are due to headline the Isle of Wight festival this Saturday.
Morning business round-up: UK unemployment falls 51,000 - BBC News
What made the business news in Asia and Europe this morning? Here's our daily business round-up:
Continue reading the main storySpanish and Italian bond yields have fallen, on hopes that eurozone nations have moved closer to a deal on lowering government borrowing costs across the region.
In the final communique from the G20 summit in Mexico, world leaders said the eurozone was taking "important steps... that lead to sustainable borrowing costs".
Media outlets have speculated this will mean rescue funds being used to buy government bonds.
However, G20 leaders gave no details.
Business headlines
In the UK, unemployment fell by 51,000 to 2.61 million in the three months to April, official figures have shown.
The jobless rate fell to 8.2%, the Office for National Statistics (ONS) said.
Overall, there were 29.28 million people in work, up 166,000 on the previous quarter. That was the largest quarterly increase since August 2010.
Private sector employment rose by 205,000 to 23.38 million, but the number of people employed in the public sector fell by 39,000 to 5.9 million, the lowest figure since March 2003.
In Asia, Japan's exports have risen the most in 17 months easing concerns about the impact of a global slowdown on the Japanese economy.
Exports rose 10% in May from a year earlier, boosted by a 38% jump in deliveries to the US.
Shipments to China, Japan's biggest trading partner, also rose for the first time in eight months.
Meanwhile, imports also rose by a better-than-expected 9% during the month, which analysts said was a sign that domestic demand may also be picking up.
In corporate news, Rupert Murdoch's Australian holding company News Limited has bid $2bn (£1.3bn) for James Packer's Consolidated Media Holdings (CMH).
The move is being seen as an attempt by Mr Murdoch to further strengthen his position in Australia's media sector.
A successful bid will give News Limited a 50% stake in Australia's dominant pay-TV business, Foxtel and 100% control of Fox Sports.
CMH shares rose more than 10% after the takeover bid.
The top commodities story was a warning from China that the decline in its rare earth reserves in major mining areas is "accelerating" and that most of its original resources are depleted.
In a policy paper, China's cabinet blamed excessive exploitation and illegal mining for the decline.
China accounts for more than 90% of the world's rare earth supplies, but has just 23% of global reserves.
It has urged those with reserves to boost production of the elements, which are used to make electrical goods.
And in our Business Daily podcast, there's detailed coverage of the Earth Summit in Rio including reports from the world's largest iron ore mine, in the heart of the Amazon rainforest, and from Poland on cutting carbon dioxide emissions.
These Housing Stocks Are Up Over 24% in 2012 - CNBC
Housing stocks have rallied 14 percent from their low at the beginning of the month, and 31 percent so far this year.
In fact, the Dow Jones U.S. Home Construction Index [ITB Loading... () 
] is off only 5 percent from its 2012 high after rallying in June on decent home data.
A read on sentiment Monday illustrated home builders are the most optimistic they’ve been in five years, while data on Wednesday showed that permits for new construction hit their highest level in four years.
Cheap prices and low borrowing rates continue to pace demand and lure potential buyers. Indeed, another report Tuesday showed building permits, or applications to break ground, rose 7.9 percent in May to their highest level since 2008.
Is a housing recovery on the horizon?
“We think the higher construction activity will translate into better new home sales data reported next Monday, and would also expect May pending home sales (contract signings on existing homes) to show strength next Wednesday, which should boost the stocks,” said Credit Suisse analyst Dan Oppenheim.
Here is a look at some of the best performing stocks in the housing sector this year.
US STOCKS SNAPSHOT - Wall St slips as Fed disappoints - Reuters
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
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