US STOCKS-Wall St to open higher on euro zone fund optimism - Reuters UK US STOCKS-Wall St to open higher on euro zone fund optimism - Reuters UK

Tuesday, July 10, 2012

US STOCKS-Wall St to open higher on euro zone fund optimism - Reuters UK

US STOCKS-Wall St to open higher on euro zone fund optimism - Reuters UK

Tue Jul 10, 2012 2:24pm BST

* Spanish yields ease on German court hopes

* Alcoa tops estimate to begin earnings season

* Applied Materials adjusts outlook, shares drop

* AMD drops in premarket after warning

* Futures up: Dow 45 pts, S&P 3.4 pts, Nasdaq 11 pts (Adds quote, updates prices)

By Chuck Mikolajczak

NEW YORK, July 10 (Reuters) - U.S. stocks were poised to open modestly higher on Tuesday on optimism Germany's top court will approve the euro zone's new bailout fund, enabling a more flexible use of the latest rescue plan.

The German Constitutional Court will consider whether Europe's new bailout plan and budget rules are compatible with national law in a process influencing not just how to tackle the euro zone debt crisis, but how much deeper European integration can go.

German Finance Minister Wolfgang Schaeuble told the court on Tuesday that any significant delay in approving the permanent bailout fund could fuel financial market turbulence.

Spanish bond yields backed off the 7 percent level, which has forced other countries to seek a bailout, on hopes the plan will be approved as a lengthy delay could once again rattle markets.

The FTSEurofirst 300 index was up 1.1 percent in a broad rally, putting the index on track for its first gain in the past five sessions.

" Everyone is going to sit and wait because potentially (the court) could say it doesn't work," said Ken Polcari, Managing Director, ICAP Equities in New York.

" It's baby steps - it is going in the right direction but at any moment it could be derailed, that is why you have the lack of commitment."

Futures were initially lower after data in China showed import growth slowed sharply in June to 6.3 percent, well short of the 12.7 percent increase forecast. Europe is the largest trade partner for China and the data underscored the effect the euro zone debt crisis has had on growth.

S&P 500 futures rose 3.4 points and were above 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 gained 45 points, and Nasdaq 100 futures added 11 points.

Alcoa Inc late on Monday kicked off quarterly earnings season with revenue and profit that beat Wall Street's expectations even though prices for its aluminum are at nearly two-year lows, and it forecast growing demand in the aerospace and auto sectors. Shares of the aluminum giant rose 0.6 percent to $8.81 in premarket trade.

Intel Corp will spend more than $4 billion on up to 15 percent of ASML and bankroll the Dutch company's research into costly next-generation chipmaking technology, a major vote of confidence in the European firm. U.S.-listed shares of ASML jumped 8.3 percent to $52.49 and Intel dipped 1.4 percent to $25.80 in premarket.

Advanced Micro Devices tumbled 8.5 percent to $5.14 in premarket after the chipmaker slashed its outlook for second-quarter revenue after seeing disappointing sales in China and Europe.

Applied Materials Inc dropped 6.7 percent to $10.27 in premarket after the chip-gear maker revised its 2012 outlook.

Mako Surgical Corp plunged 39.8 percent to $14.81 in premarket after the company posted lower-than-expected sales of its surgical robot for the second quarter in a row and cut its sales forecast for the full year after the close on Monday. (Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)

Rupee gains as stocks rally, exporters sell - Reuters India

MUMBAI | Tue Jul 10, 2012 6:53pm IST

MUMBAI (Reuters) - The rupee rallied on Tuesday, snapping a four-session losing streak, buoyed by strong gains in local stocks and dollar sales by exporters.

Local stocks posted their highest close since mid-March, helped in part by data showing foreign institutional investors were net buyers of 2.5 billion rupees in Indian shares on Monday, for a preliminary total of 58.2 billion rupees for the month.

Traders also said heavy dollar sales were spotted from exporters, particularly from software services exporters as well as a large petrochemical company.

The strong recovery in the rupee comes after the rupee fell 2.8 percent over the previous four sessions as worries about the global economy pummelled risk assets worldwide.

"The stock markets are looking up and exporters came in and sold mid-session," said N.S. Venkatesh, treasury head at IDBI Bank.

He expects the rupee to trade in a 55.25-55.80 band to the dollar for the week.

The partially convertible rupee closed at 55.39/40 as per the SBI closing rate, up nearly 1 percent from its Monday's close of 55.92/93.

Global risk factors will continue to be key for the rupee's outlook.

The euro steadied near a two-year trough against the dollar and hit a five-week low versus the yen on Tuesday after a meeting of finance ministers offered no positive surprises while a German court hearing kept the market nervous.

Domestic data will also be important, in the lead up the Reserve Bank of India's policy decision on July 31. Concerns about India's current account and fiscal deficits and slowing growth had sent the rupee to a record low late last month.

India is set to announce May industrial output on Thursday, with a poll of analysts expecting growth to pick up to 1.8 percent from 0.1 percent in April.

The data will be followed by wholesale price inflation on Monday.

The one-month offshore non-deliverable forward contracts were quoted at 55.68 while the three-month were at 56.32.

In the currency futures market, the most traded near-month dollar-rupee contract on the National Stock Exchange, the United Stock Exchange and the MCX-SX all ended at around 55.5750. The total volume was at $4.4 billion.

(Editing by Rafael Nam and Prateek Chatterjee)

Global stocks drop after China trade growth slows - The Guardian


Associated Press= SINGAPORE (AP) — Stock markets were mostly lower Tuesday after China's latest trade figures suggested a sharper downturn for the world's No. 2 economy amid weakening global demand.

In early trading in Europe, Britain's FTSE 100 added 0.1 percent to 5,631.33. France's CAC-40 was marginally lower at 3,154.70 while Germany's DAX was down 0.2 percent at 6,374.87. Futures augured losses on Wall Street. Dow futures were down 0.3 percent at 12,653 and S&P 500 futures were off 0.4 percent at 1,344.

Stock markets in Asia lost momentum after China said the growth rate for its imports fell in June by half from the previous month's level to 6.3 percent while exports grew 11.3 percent, down from May's 15.3 percent.

China's slowing demand for oil, iron ore and other foreign goods is bad news for other economies that had been looking to relatively strong Chinese growth to help drive demand for their exports.

China cut lending rates last week for the second time in a month in a bid to boost waning economic growth, but some analysts say policymakers have been too slow to react to signs of a sharp slowdown.

"Expectations have been high for a quick turnaround in economic growth but the reality has been a deliberate, ponderous easing that has failed to pre-empt the weaker economic data," said Sean Darby, chief global equity strategist for Jefferies. "Although valuations are appealing, a modest bearish position seems warranted until interest rates move to their cycle lows."

Japan's Nikkei 225 index fell 0.4 percent to 8,857.73 and Hong Kong's Hang Seng was off 0.2 percent at 19,388.28.

South Korea's Kospi slipped 0.4 percent to 1,829.45. Australia's S&P/ASX 200 dropped 0.5 percent to 4,098.0 and China's Shanghai Composite shed 0.3 percent to 2,164.44.

Other analysts argue that investors may be too pessimistic. The U.S. and Europe will likely implement strong monetary stimulus measures if growth slows much further, and many stocks are cheap when valued against their likely earnings, said Garry Evans, global head of equity strategy for HSBC in Hong Kong.

"It's wrong to be too bearish," Evans said. "Central banks offer likely support for equity markets. With valuations this low, indexes can rise in line with earnings growth."

Evans said he expects global stocks to rise 9 percent over the rest of this year.

On Monday, the Dow Jones industrial average closed down 0.3 percent at 12,736.29. The Standard & Poor's 500 fell 0.2 percent to 1,352.46. The Nasdaq composite was down 0.2 at 2,931.77.

Benchmark oil for August delivery was down $1.02 at $84.97 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose $1.54 to settle at $85.99 on Monday in New York.

In currencies, the euro fell slightly to $1.2293 from $1.2309 late Monday in New York. The dollar dropped to 79.29 yen from 79.58 yen.

London's financial lobby machine sways policies - report - Reuters UK

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Swiss stocks - Factors to watch on July 10 - Reuters UK

ZURICH, July 10 | Tue Jul 10, 2012 7:09am BST

ZURICH, July 10 (Reuters) - Swiss stocks are set to open little changed on Tuesday as concerns about flagging global growth offset a better-than-expected start to the U.S. earnings season.

The Swiss blue-chip SMI was indicated to open flat at 6,160 points, according to pre-market indications from bank Julius Baer.

The following are some of the main factors expected to affect Swiss stocks on Tuesday:


* Acino said total revenues in the first half of the year rose by 98 percent to 128.9 million euros ($158.54 million) and it expects full year sales to come in at the top end of guidance of 240 to 260 million euros.

* Sonova said it accepts the decision of the SIX Swiss exchange sanction committee to levy a fine it 2 million Swiss francs for a late disclosure of its profit warning.

* Logitech said its board of directors will ask shareholders at its annual general meeting on Sept. 5, 2012, to approve a one-time dividend, estimated of 0.81 francs per share, distributed out of capital contribution reserves.

* Lonza launches its next generation GS Gene Expression System, which provides up to a 6 week reduction in cell line construction allowing for faster generation of clonal cell lines.


* The Swiss Federal Treasury said on Tuesday it was auctioning a 1.25 percent bond maturing in 2024 and another 1.25 percent bond maturing in 2037 in a tender.


* RBC cuts Panalpina Welttransport Holding AG price target to Sfr 90 from Sfr 100; rating sector perform.

* RBC cuts Kuehne + Nagel price target to Sfr 110 from Sfr 115; rating sector perform.

($1 = 0.8130 euros)

Asia stocks fall on China growth worries - Financial Times

July 10, 2012 11:12 am

Stocks gain on European bailout fund expectations - Daily Telegraph

"Markets had feared that these men would strike down the ESM as unconstitutional, leaving what little plans the EU has to contain the crisis in disarray.’’

The mid-cap index also gained this morning, climbing 92 points to 11,075.

Afren led the risers in that index, surging 8.4pc following a report the company is being eyed by ENI and Exxon Mobil.

SIG, however, dropped 4.8pc after broker Numis cut its recommendation on the company to “hold” from “add”.

The Sheffield-based insulation supplier said that first-half sales were flat and "for the remainder of the year the uneven demand patterns experienced so far are expected to continue with the Olympic Games likely to disrupt trading in the London region during the summer."

Financial Services Workers Aware of Wrongdoing, Law Firm Finds - Bloomberg

Almost one-third of Britain’s financial-services workers are aware of illegal behavior at their companies, and many fear reporting it, a survey by the securities litigation law firm Labaton Sucharow LLP found.

Of 500 senior professionals questioned last month, 30 percent in the U.K. and 22 percent in the U.S. said they had witnessed or had “first-hand” knowledge of wrongdoing, the law firm said today in a statement. Almost 4-in-10 believe their competitors break the law to get ahead, the firm said.

The study focused on corporate ethics, the regulatory landscape and individuals’ willingness to report illegal behavior, the New York-based law firm said. It comes amid U.S. and U.K. probes into whether banks rigged the London interbank offered rate and follows a record 290 million-pound ($450 million) fine for Barclays Plc. (BARC)

“It is shocking that four years after the global economic crisis began there continues to be a fundamental lack of integrity in the financial services industry,” Dominic Auld, a lawyer at Labaton Sucharow, said in the statement.

The survey shows that 30 percent of workers believe their compensation or bonus plans put pressure on them to compromise ethical standards or break the law, the firm said. An equal number said regulators and law enforcement agencies don’t effectively deter such behavior, the report said.

Almost all respondents said they would report illegal activity if they had whistle-blower protection. Only about one- third in the U.K. and half in the U.S. knew the U.S. Securities and Exchange Commission and the U.K.’s Serious Fraud Office’s SFO Confidential program provided such protections, the firm said.

Eighteen percent of U.K. respondents and 15 percent in the U.S. said they would engage in illegal insider-trading if they thought they could get away with it, the law firm said.

The six-day online survey queried directors, senior managers, managers, senior analysts and financial analysts.

To contact the reporter on this story: Erik Larson in London at

To contact the editor responsible for this story: Anthony Aarons at

Farepak customers to receive half of money owed - BBC News

Customers and agents of Farepak, the Christmas savings firm, will ultimately receive half of the money they lost when the company collapsed.

Swindon-based Farepak collapsed in 2006, leaving 114,000 people with total losses of £37m.

Now liquidators BDO have confirmed that final payments will be made to those who lost out at the end of August.

Customers have waited for the end of court cases to see a final settlement reached.

'Hardball' attitude

The government's Insolvency Service had argued that the high-profile collapse of Farepak had been the fault of nine former directors of the company.

At a recent High Court hearing, the service had to admit that its case did not stand up, and the action was dropped.

However, the judge argued that HBOS bank had taken a "hardball" attitude in dealing with the company and was partially to blame for the collapse.

Start Quote

Never in my wildest imagination did I think we would get back 50p in the pound”

End Quote Suzy Hall Unfairpak campaign group

This led to Lloyds Banking Group, which now owns HBOS, to make an £8m payment to the Farepak compensation fund.

Total payment

This has allowed the joint liquidators to bring their investigations to an end, and finalise payment levels.

Farepak collapsed leaving no money available to creditors. However, BDO has confirmed that a payment of about 32p in the pound will be made, which includes a share of the £8m from Lloyds Banking Group.

When added to the 17.5p in the pound given by the Farepak Response Fund charity, set up by the government in 2006, customers will have received a total of approximately 50p in the pound, BDO said.

Former customers and agents who have changed their address since they made their original claim should inform the Farepak claims management team of the alteration.

Suzy Hall, who co-ordinated the Unfairpak campaign, a group set up to support victims in the wake of the crisis, said she was delighted with the final figure, describing it as a "fantastic result".

"Never in my wildest imagination did I think we would get back 50p in the pound. Unfairpak believe we have won."

She also praised the liquidators, who have waived some of their fees and been "very mindful" of costs.

"The demographic of Farepak savers is low-income women so this is absolutely wonderful," she said.

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