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Jul 27, 2012

European Markets at Close July 27, 2012: Europe stocks lifted by ECB hopes, U.S. Data

    Spanish and Italian bond yields retreat sharply on Friday, as a French newspaper reports that the European Central Bank is preparing to buy government debt from the countries, while stocks further are underpinned by better-than-expected U.S. growth data. 12:19 p.m. Today

 Europe stocks lifted by ECB hopes, U.S. data

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ADVFN III World Daily Markets Bulletin

ADVFN III World Daily Markets Bulletin
Daily world financial news

Friday, 27 July 2012

US Market Reports
Stocks Holding On To Strong Gains In Mid-Day Trading
7/27/2012 12:00 PM ET
After ending the previous session sharply higher, stocks have seen some further upside during trading on Friday. The markets have benefited from a positive reaction to a report showing stronger than expected second quarter GDP growth.
The major averages have moved roughly sideways in recent trading, hovering near their best levels of the day. The Dow is up 106.10 points or 0.8 percent at 12,994.03, the Nasdaq is up 34.94 points or 1.2 percent at 2,928.19 and the S&P 500 is up 14.99 points or 1.1 percent at 1,375.01.
The strength on Wall Street comes on the heels of the release of a report from the Commerce Department showing that the pace of U.S. economic growth slowed by less than anticipated in the second quarter.
The report said GDP increased by 1.5 percent in the second quarter compared to an upwardly revised 2.0 increase in the first quarter. Economists had been expecting GDP to increase by about 1.2 percent.
The stronger than expected GDP growth reflected positive contributions from consumer spending, exports, non-residential fixed investment, private inventory investment, and residential fixed investment.
While the report points to continued economic growth, analysts noted that the slowdown still leaves the door open for further stimulus from the Federal Reserve.
Meanwhile, Thomson Reuters and the University of Michigan released a separate report showing that consumer sentiment deteriorated by less than previously estimated in the month of July.
The report showed that the consumer sentiment index for July was upwardly revised to 72.3 from the mid-month reading of 72.0. Despite the upward revision, the index remains down compared to the final June reading of 73.2 and is well below the nearly five-year high of 79.3 seen in May.

Among individual stocks, shares of Merck () are up by 3.1 percent after the drug giant reported better than expected second quarter earnings. The company benefited from an increase in sales of its diabetes drugs.
Biotech giant Amgen () is also trading higher after reporting second quarter results that exceeded analyst estimates and raising its full-year guidance. Shares of Amgen are up by 3.8 percent.
On the other hand, shares of Facebook () have come under pressure after the social networking giant reported second quarter results that came roughly in line with analyst estimates but disappointed investors by failing to provide guidance. Facebook has tumbled by 11.5 percent on the day.
Sector News

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Stimulus Hopes Lift TSX To 3-week High - Canadian Commentary
7/27/2012 11:20 AM ET
Canadian stocks were extending gains for a third session Friday morning on expectations of more stimulus measures from both sides of the Atlantic. Yesterday, ECB governor Mario Draghi said the central bank will do whatever is needed to preserve the euro. The comments also raised speculation that ECB, in its upcoming meeting next week, will take drastic measures to tackle the debt situation in the region.
The S&P/TSX Composite Index gained 84.29 points or 0.72 percent to 11,724.04, after adding nearly 200 points or 1.50 percent in the past two sessions.
The price of Crude oil was ticking higher Friday morning, with Crude for September adding $0.60 to $89.99 a barrel.
In the oil patch, Progress Energy Resources Corp. (PRQ.TO) surged over 12 percent to C$22.62 after announcing that PETRONAS International Corporation Ltd has hiked its take over consideration price from C$20.45 per share to C$22.00 per share.
Niko Resources gained 9 percent, while Celtic Exploration and ARC Resources (ARX.TO) were adding around 5 percent each.
Among financial plays, National Bank and TD Bank moved up around 1 percent each.
The price of gold was firm near its monthly high Friday morning as the dollar was trading mixed, with gold for August gaining $4.10 to $1,619.20 an ounce.
In the gold space, Alamos gold Inc. gained 8 percent.
Eldorado gold gathered 5 percent despite reporting a much lower second-quarter net income of $46.6 million or $0.07 per share compared to $74.9 million or $0.14 per share in the same period last year. Further, the company lowered its 2012 gold production guidance to 660,000 ounces from a previous estimate of 730,000 to 775,000 ounces.
Transportation and logistics services provider TransForce Inc. (TFI.TO) soared 9 percent after posting higher second quarter net income of C$34.1 million or C$0.34 per share versus C$26.2 million or C$0.27 per share a year ago. Adjusted net income increased to C$0.38 per share from C$0.27 per share last year. Analysts were expecting the company to report loss of C$0.36 per share for the quarter.
Integrated wood products company Tembec Inc. (TMB.TO) moved up 5 percent even after slipping into the red in third quarter, reporting net loss of C$5 million or C$0.05 per share, compared to a net profit of C$17 million or C$0.17 per share last year. Analysts were expecting the company to report loss of C$0.03 per share for the quarter.
TransCanada Corp. (TRP.TO) added 1 percent after posting second quarter net income of C$272 million or C$0.39 per share, lower than C$353 million or C$0.50 per share a year ago.

7/27/2012 11:20 AM ET
On the negative side, independent power producer Capital Power Corp. (CPX.TO) eased 0.50 percent after reporting a wider second quarter net loss of $32 million or $0.57 per share compared to a loss of $25 million or $0.67 per share in the comparable period last year. However after adjusting for one-time items and fair value adjustments, earnings were C$5 million or C$0.07 per share compared to C$3 million or C$0.07 per share last year. Analysts were expecting the company to report loss of C$0.25 per share for the quarter.
Largely hurt by C$54.4 million (pre-tax) of costs related to the Maple Group Acquisition Corporation's proposed acquisition of TMX Group and the proposed merger with London Stock Exchange Group, Canadian stock market operator TMX Group Inc. (X.TO) reported a sharply lower second-quarter net income, that declined to C$1.8 million from C$54.7 million in the year ago quarter. On a per share basis, net income was C$0.02, down from C$0.73 in the prior year quarter. The stock slipped 0.50 percent.
Electronics products company Celestica Inc. inched down 0.25 percent despite posting second quarter IFRS net earnings of $45.7 million or $0.21 per share versus $23.6 million or $0.11 per share last year. Non-IFRS adjusted net earnings per share were $0.27, up from $0.22 last year. Analysts were expecting the company to report loss of C$0.24 per share for the quarter.
Paper products company Domtar Corp. (UFS.TO) moved down 2 percent even after announcing that its second-quarter net earnings rose to $59 million or $1.61 per share, from $54 million or $1.30 per share in the 2011 period. Excluding items, the company had earnings before items of $98 million or $2.37 per share.
In economic news from south of the border, the U.S. Commerce Department said gross domestic product grew at 1.5 percent in the second quarter. That marks a slowdown from the 2 percent growth posted for the first quarter, but a smaller contraction than most economists' prediction of just 1.2 percent growth for the quarter.
Elsewhere, unemployment rate in Spain increased in the June quarter, the latest figures from the statistical office INE showed. The rate rose to 24.63 percent in the second quarter from 24.44 percent in the first quarter. This was almost in line with economists' forecast of 24.65 percent.

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European Markets Rise On Optimism, Earnings

The European markets are modest to notably higher in afternoon trading Friday, after European Central Bank President Mario Draghi's comments lifted stocks in the previous session. Corporate reports from across the region influenced sentiment, ahead of the release of the U.S. GDP data.

Draghi on Thursday said the bank is prepared to take whatever measures needed to preserve the euro. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," he told an investment conference in London. "And believe me, it will be enough," he stated.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.97 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.66 percent.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.89 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is gaining 0.67 percent.

The German DAX is adding 0.21 percent and the UK's FTSE 100 is rising 0.20 percent. The French CAC 40 is climbing 1.22 percent and Switzerland's SMI is gaining 0.73 percent.

In Frankfurt, Commerzbank is losing 1.9 percent and Deutsche bank is falling 0.6 percent.

Siemens is down 0.6 percent after Barclays cut the stock to ''Equalweight" from "Overweight." S&P Equity raised Vossloh to "Hold" from "Sell." The stock is losing 2.7 percent.

Gea Group is dropping 3.7 percent. UBS lowered its rating on the stock. ThyssenKrupp is climbing 1.1 percent. Linde is gaining around 1 percent after reporting higher profit for the first half of the year.

In Paris, EADS is surging 6.2 percent after second-quarter profit nearly quadrupled and the firm lifted its forecast.

Michelin is gaining around 6 percent. The tire maker said profit in the first half of the year increased significantly from last year, supported by a rise in revenues.

Lafarge is gaining 4.4 percent. The cement giant reported an adjusted flat profit for the second quarter, as revenue grew 5 percent.

Renault, Total and PPR are gaining notably after announcing results.

UBS cut Peugeot to "Neutral" from "Buy." The stock is down 1.4 percent.

Saint-Gobain is plunging over 11 percent and Vallourec is losing close to 9 percent after results discouraged investors.

In London, Anglo American is declining over 4 percent after announcing a plunge in first-half profit. Pearson is falling 3.8 percent after profit declined in the first half of the year. Barclays is climbing 5.6 percent. The company reported higher profit for the second quarter.

ITV is climbing 3.2 percent. Weir Group is advancing 2.9 percent.

Nokia is up 6 percent in Helsinki after Samsung said reportedly beat Apple, Inc. (AAPL) in second-quarter smartphone shipments.

In economic news, Germany's flash inflation data is due at 8.00 am ET, which may have some impact on the markets. Economists forecast EU harmonized inflation to ease to 1.9 percent in July from 2 percent in June. On a monthly basis, the harmonized index is seen rising 0.4 percent.

Asia Market Reports
Asian Stocks Rally On ECB Pledge

Asian stocks rose sharply on Friday on speculation central banks will announce additional steps to spur global growth. European Central Bank chief Mario Draghi vowed unconditional support for the beleaguered euro, boosting speculation that the central bank may unveil some concrete plans when its rate-setting governing council meets on August 2.

During a speech in London, Draghi sent out strong signals that the central bank is much more open now to policy action, which markets interpreted that it will soon engage in purchases of Italian and Spanish government bonds. Government bond yields fell sharply and the euro rallied on Thursday after the ECB comments.

Despite a lack of specifics in the minutes of the most recent Fed meeting, investors still remain hopeful and betting on further easing from the U.S. Federal Reserve as it holds a two-day policy meeting starting July 31.

Japan's Nikkei index gained 1.5 percent to hit a one-week high, as investors increased bets that the ECB will cut its main policy rate at the upcoming meeting on August 2. ECB President Draghi's comments that the central bank would "do whatever it takes to protect the euro" raised expectations that the central bank will intervene directly to buy bonds in a bid to revive the ailing economic bloc.

Exporters such as Sony, Nintendo and Mazda Motor jumped 3-6 percent as the yen eased against the euro on the back of Draghi's pledge. Canon advanced 1.9 percent after falling sharply in the previous session on earnings concerns.

Toshiba rallied 4.9 percent on a Nikkei report that its first-quarter operating profit could exceed 10 billion yen, more than double the profit recorded in the corresponding period last year. Nissan Motor rose 2.8 percent despite reporting a steeper-than-expected 19.7 percent drop in quarterly operating profit.

Social networking site operators like Gree and DeNA plunged 7-10 percent after Facebook said it incurred a net loss of $157 million in the April-June quarter because of stock compensation expenses following its IPO. Chipmaker Advantest erased early gains to end down a whopping 9.4 percent on institutional selling.

In economic news, retail sales in Japan rose 0.2 percent from a year earlier in June, the Ministry of Economy, Trade and Industry said. That was well shy of forecasts for an increase of 1.1 percent following the 3.6 percent surge in May. A separate report showed that the country's deflation accelerated in June, with consumer prices falling 0.2 percent from a year earlier, compared to a 0.1 percent drop in May.

China's Shanghai Composite index moved in a narrow range before ending 0.1 percent higher on bargain hunting in blue-chip financials. Hong Kong's Hang Seng index climbed 2 percent, marking its biggest gain in a month.

Australian shares rallied after U.S. and European stocks posted steep gains overnight on the back of positive comments from the ECB chief. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index rose about 1.5 percent each. Resource stocks rose sharply despite falling iron ore prices, which fell to an eight-month low on Wednesday on lingering worries over Chinese growth momentum. BHP Billiton rose 1.5 percent, Rio Tinto climbed 3 percent and smaller rival Fortescue Metals jumped 3.8 percent.

In the financial sector, Commonwealth, NAB, Westpac and ANZ rose 1-2 percent, while investment bank Macquarie Group advanced 2.1 percent and insurer QBE edged up 0.6 percent.

Billabong ended flat after the struggling surfwear retailer agreed to allow private equity suitor TPG to conduct due diligence on its books. Wesfarmer, Woolworths and David Jones rose 1-2 percent. Qantas added half a percent on reports the airline is prepared to sacrifice its 17-year partnership with British Airways in a bid to secure an alliance with Emirates. Phone company Telstra gained 0.8 percent after increasing phone line rental fees for households.

Seoul shares rallied, with the benchmark Kospi climbing 2.6 percent on optimism that the eurozone debt crisis will come under control. Samsung Electronics jumped 5.2 percent after reporting a record profit of $5.9 billion for the June quarter, boosted by rampant sales of its Galaxy S mobile phone and improved margins in its TV business. Shares of L G Display soared 7.3 percent.

New Zealand shares rose for a third consecutive session on optimism over Europe's moves to ease its burgeoning debt crisis. The benchmark NZX-50 index rose half a percent, with heavyweight Fletcher Building gaining a percent ahead of next week's release of the Christchurch City Council's draft central city plan.

Gold miner OceanaGold soared 5.3 percent on solid second-quarter earnings results, Australian food ingredient maker Goodman Fielder rallied 3.3 percent and Xero, the cloud accounting platform, advanced 3.3 percent, while rubber goods and milking equipment manufacturer Skellerup Holdings retreated 1.4 percent, phone company Telecom lost a percent and retailer Warehouse Group fell 0.8 percent.

Elsewhere, India's benchmark Sensex was last trading up 1.1percent, Indonesia's Jakarta Composite was up nearly 2 percent and the Taiwan Weighted average climbed 2.2 percent, while Malaysia's KLSE Composite ended little changed with a positive bias. Singapore's Straits Times index was down 0.2 percent.

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Crude Hovers Near $90

The price of crude oil was ticking higher Friday morning as traders await cues from today's economic data.

Light Sweet Crude Oil (WTI) futures for September delivery, edged up $0.33 to $89.72 a barrel. Yesterday, oil settled higher after reports emerged that European Central Bank President Mario Draghi has vowed to do whatever needed to preserve the euro.

Yesterday, Mario Draghi said "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro." He added "And believe me, it will be enough." Mario Draghi, addressing the Global Investment Conference in London, The central bank chief's comments boosted markets and the euro.

This morning, the U.S. dollar was steady versus the euro, while continued to move lower against sterling. The buck was lingering near a weekly low versus the yen and trading flat against the Swiss franc.

The euro erased some of its recent gains against most of its major rivals after a report showed that the Spanish jobless rate hit a record level of 24.6 percent in the second quarter.

Unemployment rate in Spain increased in the June quarter, the latest figures from the statistical office INE showed. The rate rose to 24.63 percent in the second quarter from 24.44 percent in the first quarter. This was almost in line with economists' forecast of 24.65 percent.

Traders will look to the release advance estimate of second quarter GDP data from the U.S. Commerce Department, due out at 8:30 am ET. Economists expect GDP growth of 1.2 percent for the quarter following a 1.9 percent increase in the previous quarter.

GATA | THE GATA DISPATCH: Douglas Keenan: My thwarted attempt to tell of LIBOR shenanigans

Douglas Keenan: My thwarted attempt to tell of LIBOR shenanigans

By Douglas Keenan
Financial Times, London
Thursday, July 26, 2012

In 1991, I began trading for Morgan Stanley, the investment bank, in London. I was trading bonds, derivatives, and related securities. One of those securities was based on the three-month Libor rate: the interest rate at which banks can borrow money for three months from each other. Morgan Stanley does not trade on the interbank market so I could not directly borrow or loan money at Libor rates. What I could do, however, was trade a futures contract on the three-month Libor rate.

As an example of how a futures contract works, consider the following. Suppose that we are concerned about three-month Libor rates increasing in the future; in particular, we are concerned about what the three-month rate will be in September. If that rate is, say, 1 per cent, we can agree today to effectively lock it in. If, come September, the actual three-month rate is 2 per cent, then our contract will ensure we can still borrow at 1 per cent. Futures contracts on three-month Libor were -- and are -- traded on the London International Financial Futures Exchange (Liffe, now part of NYSE Euronext). There was a standard contract for the month of September. That contract had its rate settled on the third Wednesday of the month, at 11 o'clock.

In 1991 I had live trading screens that showed the Libor rates. In September of that year, on the third Wednesday, at 11 o'clock, I watched those screens to see where the futures contract should settle. Shortly afterwards, Liffe announced the contract settlement rate. Its rate was different from what had been shown on my screens, by a few hundredths of a per cent.

As a result, I lost money. The amount was insignificant for me, but I believed that I had been defrauded and I complained to Liffe. Liffe explained that the settlement rate was not determined by what rates were actually in the market. Instead, the British Bankers Association polled banks, asking them what the rates were. The highest and lowest quoted rates were discarded and the rest were averaged, giving the settlement rate. Liffe explained that, in doing this, they were adhering to the terms of the contract.

I talked with some of my more experienced colleagues about this. They told me banks misreported the Libor rates in a way that would generally bring them profits. I had been unaware of that, as I was relatively new to financial trading. My naivety seemed to be humorous to my colleagues.

Simply put, then, it seems the misreporting of Libor rates may have been common practice since at least 1991. Although the difference between the reported rate and the actual rate might seem small, the total amount of money involved is material, given that Libor rates affect contracts worth hundreds of trillions. Also important is what such misreporting says about the culture of finance.

During 1991, at the London office of Morgan Stanley, the head of interest rate trading was a person who has been at the centre of the current scandal: Bob Diamond. I do not recall discussing Libor misreporting with Mr Diamond but since the misreporting was common knowledge among traders, I presume he was aware. (That, however, is not a criticism of Mr Diamond: what could he have done about this?)

There have been two distinct motivations for banks to misreport Libor rates. One motivation is discussed above: to directly increase profits. The other motivation arose during the 2008 financial crisis: to mask liquidity problems.
Libor misreporting has been going on for decades. Why have investigations only recently begun? It seems highly implausible that all the investigating agencies could have been unaware for decades. Indeed, the regulators have a reputation among traders of being like Potemkin villages. I suspect what has happened is that, after the financial crises of 2008, the agencies decided they ought to perform more of their stated duties. That would also explain why the investigations appear to be ignoring any misreporting in years before 2005: to cover up the illusoriness of their earlier work.

One of the investigations is being undertaken by the House of Commons Treasury Committee. I telephoned the Committee on July 3 and spoke with a Committee specialist. I told the specialist about the foregoing and said that I was willing to testify under oath. The specialist seemed extremely interested. They said they were to have a meeting about the Libor scandal and would call me back afterwards.
I did not hear back, however, so I telephoned to ask what was happening. My testimony was not wanted, the specialist told me.

The writer is an independent mathematical scientist and a former Morgan Stanley trader.

* * *

GATA | THE GATA DISPATCH: EU may criminalize commodities price distortion

EU may criminalize commodities price distortion

Then all they'd have to do is find someone willing to enforce the law.
* * *
By Barbara Lewis
Thursday, July 26, 2012

BRUSSELS, Belgium -- Manipulating international commodity benchmarks such as Brent crude oil would be a criminal offence, punishable by jail, under a set of reforms the EU Commission has proposed in response to the rigging of a major interest reference rate.
The commission, the EU's executive arm, announced on Wednesday plans to tighten supervision of financial benchmarks after a scandal involving interbank lending rate Libor, used to set prices for trillions of dollars of financial products.

The benchmarks the commission wants to make more "reliable, transparent, and credible" also include commodities such as gold, cocoa, and Brent crude.

It would become an offence to transmit false or misleading information, provide "false or misleading inputs, or any action which manipulated the calculation of a benchmark," if the European Parliament and 27 EU member states endorse the proposals.

Although not cited specifically, that could include false reporting to oil price reporting agencies like Platts, the leading assessor of benchmark prices for physical Brent and other cash oil markets.
The proposals could be agreed quickly, possibly by the end of the year, as amendments to existing proposals on regulating market abuse.

Under the draft proposals, traders on over-the-counter physical markets and the price assessment agencies -- who collect information on physical trades that help to set benchmark values -- stand to come under greater scrutiny.

Individual EU member states would still be allowed to decide what penalties to set for offences, but it would no longer be possible for them to take a soft stance.

Sanctions have to be "effective, proportionate, and dissuasive," the commission said.
For years, national regulators have turned a blind eye to trading practices, especially in over-the-counter deals, that have pushed up or pulled down reference prices such as Brent. The benchmark is used for pricing more than two-thirds of the world's crude oil.

"By imposing criminal sanctions for serious market abuse throughout the EU we send a clear message to deter potential offenders -- if you commit insider dealing or market manipulation you face jail and a criminal record," the EU commissioner for the internal market, Michel Barnier, said.
"These proposals will heighten market integrity, promote investor confidence and level the playing field in the internal market."

Traders have long argued there is no need for increased regulation of commodity dealing, which they say are rooted in the physical realities of supply and demand, in contrast to major financial markets.

"Physical oil trading is a complex issue," said a senior oil market source, who would only comment on condition of anonymity. "We don't want to have to justify every transaction to a regulator who doesn't understand the nuance of the business."

Another senior oil executive drew a contrast between the oil trade and Libor.

"We're dealing with a liquid, real material. People do not get together to decide the price every day," he said. "And the price-reporting agencies quote a representative, fair value of what has been done."

* * *

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Morning Market Briefing

Commentary July 27, 2012
After moving sharply higher in the previous session, stocks could see some further upside in early trading on Friday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 31 points. (Jul 27, 2012) Full Article 
Economic News
South Korea posted an unadjusted record current account surplus of $5.84 billion in June, the Bank of Korea said on Friday. (Jul 27, 2012) Full Article
Core consumer prices in Japan dipped 0.2 percent on year in June, the Ministry of Internal Affairs and Communications said on Friday. That missed forecasts for a flat reading following the 0.1 percent contraction in May. (Jul 27, 2012) Full Article 
China's industrial firms reported a decline in their profits for the third month in a row as slowing economy dampened demand, the latest figures from the National Bureau of Statistics revealed Friday. (Jul 27, 2012) Full Article 
French consumer sentiment deteriorated for the second straight month in July as households turned more skeptic about future economic and labor market conditions. (Jul 27, 2012) Full Article
The unemployment rate in Spain climbed to a new record high in the second quarter of 2012 as recession and stringent austerity measures forced firms to shed more jobs. (Jul 27, 2012) Full Article 
Italy's borrowing cost declined at its short-term bill auction on Friday after the European Central Bank chief vowed to take whatever action needed to protect euro. (Jul 27, 2012) Full Article 
U.S. economic growth slowed in the second quarter of 2012, but still grew by more than most economists had predicted. According to figures released Friday by the Commerce Department, the U.S. gross domestic product grew at 1.5 percent in the second quarter. That marks a slowdown from the 2 percent growth posted for the first quarter, but a smaller contraction than most economists, who predicted just 1.2 percent growth for Q2, had expected. The first quarter data, furthermore, was revise (Jul 27, 2012) Full Article 
Earnings News Inc. (AMZN) said Thursday it expects an operating loss for the third quarter, while reporting a weaker-than-expected profit for the second quarter, as higher costs masked revenue growth. (Jul 27, 2012) Full Article 
Amgen Inc. (AMGN) raised its annual business outlook on Thursday, after it reported a rise in second-quarter earnings that beat expectations, on improved demand for its rheumatoid arthritis and bone drugs. (Jul 27, 2012) Full Article 
Starbucks Corp. (SBUX) on Thursday reported higher results for the third quarter, but below estimates. The coffee giant slashed its profit outlook for the final quarter, citing slowing global economy. (Jul 27, 2012) Full Article 
Facebook Inc. (FB) on Thursday reported a loss for the second quarter, after it took hefty stock compensation charges tied with its IPO. The social-networking company's adjusted earnings rose from last year and matched consensus. (Jul 27, 2012) Full Article 
Thursday, Gilead Sciences Inc.(GILD) posted a decline in second-quarter earnings on higher costs, with 13 percent growth in revenue. The results came in ahead of Wall Street View. (Jul 27, 2012) Full Article 
Samsung Electronics Co. Ltd. (SSNLF.PK, SSNNF.PK)) on Thursday reported a jump in its second-quarter profit, boosted by a surge in smartphone sales. (Jul 27, 2012) Full Article 
Friday, D.R. Horton Inc. (DHI) posted a sharp rise in third-quarter profit, helped by a non-cash tax benefit. Revenue increased 14 percent, but fell below Wall Street expectations. (Jul 27, 2012) Full Article 
Merck & Co. Inc. (MRK) on Friday reported a decline in earnings for the second quarter, as restructuring charges offset top-line growth. Adjusted earnings improved from prior year and topped the consensus. (Jul 27, 2012) Full Article
Friday, Coventry Health Care Inc.'s (CVH) second-quarter earnings dropped from last year, when the Insurer benefited from a legal settlement. However, the results came in above estimates. (Jul 27, 2012) Full Article 
Chevron Corp. (CVX) on Friday reported lower earnings for the second quarter, as revenue declined. (Jul 27, 2012) Full Article
Broker Ratings Changes
FBR Capital Markets Cuts EMCOR Group Inc. (EME) To Market Perform From Outperform With $26 down from $33 Price Target
(Jul 27, 2012) 
Robert W. Baird Downgrades Starbucks Corp. (SBUX) To Neutral From Outperform With $50 down from $65 Price Target
(Jul 27, 2012)
Robert W. Baird Ups AmerisourceBergen Corp. (ABC) To Neutral From Outperform With $46 up from $42 Price Target
(Jul 27, 2012)
Todays WS Events
Aon Corp Q2 12 Earnings Conference Call At 8:30 AM ET
Aon Corp (AON) will host a confernce call at 8:30 AM ET on July 27, 2012 to discuss Q2 12 Earnings results. To access the live webcast, visit (Jul 27, 2012) 
D R Horton Q3 12 Earnings Conference Call At 10:00 AM ET
D R Horton Inc. (DHI) will host a conference call at 10:00 AM ET July 27, 2012, to discuss its Q3 12 earnings results. To access the live webcast, log on at A call can be accessed by dialing 877-407-8033. For replay a call, dial 877-660-6853 with reference account #286, conference ID #396701 (Jul 27, 2012)
DTE Energy Q1 12 Earnings Conference Call At 9:00 AM ET
DTE Energy Co. (DTE) will host a conference call at 9:00 AM ET on July 27, 2012, to discuss Q2 12 earnings results. To access the live webcast, log on to To listen to the call, dial (800) 419-9895 (US) or (913) 312-0643 (International) with passcode 4907918. (Jul 27, 2012)
Legg Mason Q1 13 Earnings Conference Call At 8:00 AM ET
Legg Mason (LM) will host a conference call at 8:00 AM ET July 27, 2012, to discuss its Q1 13 earnings results. To access the live webcast, log on at A call can be accessed by dialing 877-269-7756 (US) or 1-201-689-7817 (International). For replay a call, dial 877-660-6853 (US) or 1-201-612-7415 (International); enter Account number 369 and PIN number 397492 (Jul 27, 2012)
Leggett & Platt Q2 12 Earnings Conference Call At 9:00 AM ET
Leggett & Platt Inc. (LEG) will host a conference call at 9:00 AM ET on July 27, 2012 to discuss its Q2 12 earnings results. To access the live webcast, log on at (Jul 27, 2012) 
Merck & Co Q2 12 Earnings Conference Call At 8:00 AM ET
Merck & Co (MRK) will host a conference call at 8:00 AM ET on July 27, 2012 to discuss Q2 12 Earnings results. To access the live webcast, visit To access the call, dial (706) 758-9928 or (800) 399-7917 with the ID code number 91089609 (Jul 27, 2012)
Principal Financial Group Q2 12 Earnings Conference Call At 10:00 AM ET
Principal Financial Group Inc. (PFG) will host a conference call at 10:00 AM ET July 27, 2012, to discuss its Q2 12 earnings results. To access the live webcast, log on at A call can be accessed by dialing 800-374-1609 (US) or 706-643-7701 (International) with Access Code is 20811. For replay a call, dial 855-859-205 (US) or 404-537-3406 (International) with Access code : 20811. (Jul 27, 2012)
Weyerhaeuser Q2 12 Earnings Conference Call At 10:00 AM ET
Weyerhaeuser Co. (WY) will host a conference call at 10:00 AM ET on July 27, 2012, to discuss Q2 12 earnings results. To access the live webcast, log on to To listen to the call, dial 877-296-9413 (US) or 706-679-2458 (International) with access code - 41406958. For a replay call, dial 855-859-2056 (US) or 404-537-3406 (International) with access code - 41406958 (Jul 27, 2012)  
Stocks To Watch
This railcar seller stock comes on our radar after it reported strong quarterly results and boosted its fiscal 2012 financial forecast. (Jul 27, 2012) Full Article

ESA | Real Gross Domestic Product (GDP): grew at an annual rate of 1.5 percent in the second quarter of 2012.

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Real gross domestic product (GDP) grew at an annual rate of 1.5 percent in the second quarter of 2012, according to today’s advance estimate. This follows a growth rate of 2.0 percent (revised) in the first quarter of 2012.

DealBook | DealB%K Today's Top Headlines: A Deeper Look at Facebook's Earnings Report

Friday, July 27, 2012
A Deeper Look at Facebook's Earnings Report So. Facebook has reported its first earnings report as a public company. And investors apparently didn't like what they saw.

Even though the company essentially met analyst estimates for revenue and adjusted earnings per share, the social network's shares tumbled more than 10 percent in after-hours trading, falling at one point below $24 a share. That's an all-time low in Facebook's two-month existence as a publicly traded corporation.

What gives? There are a couple of interesting items from the earnings announcement, but one pattern that emerges is that Facebook's once-vaunted growth is slowing down.
Facebook Posts a Loss, but Revenue Beats Expectations The bit of good news about revenue was not enough to stop Facebook's shares from plummeting in late trading on Thursday. "With the unprecedented hype around the company's I.P.O., some investors believe more upside would have materialized - higher revenues, higher earnings," said Jordan Rohan, an analyst at Stifel Nicolaus, according to The New York Times.
Facebook's Mobile Mania After warning about mobile in the days before its I.P.O., Facebook trumpeted its mobile efforts in its earnings results, the first since it went public earlier this year.
Barclays' Profit Falls Amid Rate-Rigging Scandal Barclays reported on Friday a 76 percent drop in its net profit during the first six months of the year after the British bank took an accounting charge on its own debt and other one-off costs.

The results come a month after Barclays announced a $450 million settlement with American and British authorities in connection to the manipulation of the London interbank offered rate, or Libor. A number of the bank's top executives, including its former chief executive, Robert E. Diamond Jr., resigned in the wake of the scandal, which involved some of the firm's traders and senior executives altering Libor submissions for financial gain.

Barclays disclosed on Friday that it was facing a number of class action lawsuits in the United States related to the manipulation of both Libor and the Euro interbank offered rate, or Euribor. The most recent lawsuit was filed at the beginning of July.
  • DEALBOOK » | DealBook: Ex-Barclays Official in Line for $13.6 Million Payout
    Romney Addresses a Financial Crowd in London In remarks at a fund-raiser at the Mandarin Oriental in Hyde Park, Mitt Romney avoided mentioning the scandal over the rigging of interest rates and called the Dodd-Frank law "unnecessary" and "overly burdensome," The New York Times reports.
    Greenwich to Assess Economic Impact of Hedge Funds Officials in Greenwich, Conn., have called for a study of the impact that the financial industry has on the local economy, after the departure of a prominent hedge fund for Miami, The Stamford Advocate reports. "We're not taking these people for granted," said Peter Tesei, Greenwich's top elected official. "It's easy to vilify (them) based upon an image."
    Europe's Central Banker Offers Assurances on the Euro A comment by Mario Draghi, head of the European Central Bank, buoyed markets, but analysts warned the lift could be short-lived. Mr. Draghi said: "Within our mandate, the E.C.B. is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
    Universal Considers Selling Prized Division To help secure approval for its $1.9 billion takeover of EMI, the Universal Music Group may sell Parlophone Records, a move once considered unthinkable, the Media Decoder blog reports.
    Korea Says It Received No Bids for Woori Stake South Korea is encountering challenges in trying to sell a 57 percent stake in Woori Finance Holdings valued at $4.3 billion, Bloomberg News reports.
    Icahn Posts Win as CVR Energy Says It Had No Offers Carl C. Icahn will get to keep -- and run -- CVR Energy, an oil refining company based in Texas, after a 60-day sale process failed to yield any credible bids.
    United Technologies Closes $16.5 Billion Takeover After agreeing to sell certain noncore assets, United Technologies closed its acquisition of the Goodrich Corporation on Thursday, Reuters reports.
    Airline Integration Weighs on United's Profit United Continental Holdings said the combination with Continental Airlines contributed to a fall in second-quarter profit, as the chief executive conceded that the company "added new stress to the system" by implementing various changes at once, The Associated Press reports.
    Senator Raises Concerns Over Cnooc Deal Senator Charles Schumer plans to tell Timothy F. Geithner, the Treasury secretary, that the United States should challenge Cnooc's deal to acquire the Canadian firm Nexen, Reuters reports.
    Boston's WGBH Acquires Public Radio International The deal unites two of the country's largest public broadcasters, The New York Times writes. Financial terms were not disclosed.
    Sanford Weill Flips the Script The New York Times editorial board writes: "Sometimes, in a great national debate, the most powerful voices can be those of the converted. Think of Nixon to China or, more recently, President Obama's declaration of support for same-sex marriage. Now add to the list Sanford Weill, the financier who led the charge for the repeal of the 1933 law that separated commercial banks from investment banks."
    Wall Streeters Challenge Comments by Weill "I don't buy it," said William Harrison, the former head of JPMorgan Chase. "It gets back to management and risk-taking, and you can screw that up at a small bank or a large bank."
    Major Deals Help 2 Banks Outperform Larger Rivals Lazard and Evercore Partners reported Thursday that their core mergers advisory businesses had held up well on the strength of several major transactions.
    Evercore Profit Rises 19% on Advisory Gains Evercore Partners' profit rose 19 percent in the second quarter, as the investment bank's core advisory business posted strong results.
    Nomura Chief Quits Amid Insider Trading Scandal The Japanese bank's chief executive, Kenichi Watanabe, and one of his top lieutenants resigned on Thursday in response to recent revelations that their employees abetted insider trading.
    Nomura's Rank Among Deal Makers Despite the distraction of an insider trading scandal that has resulted in the resignation of Nomura's chief executive, the investment bank has risen three places this year in the worldwide merger league tables.
    Jefferies and Goldman Have Highest Pay on Wall Street Jefferies set aside money in the first half of the year to pay employees an average of $228,407, and Goldman set aside an average of $225,789 for its workers, Bloomberg News reports.
    Fidelity Expands Into Securities Lending The Wall Street Journal reports: "Mutual fund company Fidelity Investments is setting itself on a collision course with rivals by rolling out a pricing service designed to make the roughly $800 billion market for securities lending more transparent, according to people familiar with the firm's plans."
    Wells Fargo Plans to Expand Headcount in Asia The bank said it would increase its workforce in Asia by at least 10 percent over the next three years, Bloomberg News reports.
    Greek Banks Hope Time Heals Bloomberg News notes that a strategy by Greek banks brings to mind the ancient playwright Euripides.
      Chinese Funds Said to Be Near Deal for Dexia Unit Two Chinese private equity funds, Hony Capital and GCS Capital, are approaching a deal to buy the asset management arm of Dexia for about 500 million euros ($613.7 million), The Financial Times reports.
      China Invests $500 Million With Blackstone An arm of China's central bank that oversees currency reserves has committed $500 million to a real estate private equity fund managed by the Blackstone Group, The Wall Street Journal reports, citing unidentified people familiar with the matter.
      Formula One's Uncertain Future A legal scuffle surrounding the chairman of the Formula One Group has created a risk for the private equity firm CVC Capital, which sold a stake in the business in May, The Economist writes.
      Owner of Friendly's Plays Two Roles The private equity firm Sun Capital Partners kept ownership of Friendly's parent company even after it filed for bankruptcy - because the firm was also the chain's biggest lender, The Wall Street Journal reports.
      British Buyout Firm Says It Is Cutting Costs In a quarterly announcement on Friday, 3i said it was making progress with a cost-cutting initiative, as it tries to win back dissatisfied investors, Reuters reports.
      Investors Press Hedge Funds Over Libor Some of the world's biggest hedge funds are responding to concerns from investors by conducting internal investigations to show they were not involved in an effort to rig major interest rates, Reuters reports.
      A Paulson Holding Suffers NovaGold Resources, which is 13 percent owned by John A. Paulson's firm, fell 25 percent on Thursday after comments by the Barrick Gold Corporation, Bloomberg News reports. The decline may have translated into a $48.9 million loss for Mr. Paulson's firm.
      Hedge Funds Can't Figure Out Europe's Crisis The Economist asks why the crisis in the euro zone has "not produced a Monsieur Paulson of its own? Despite more than two years of disarray, funds with double-digit returns are rare; those with triple-digit returns are unheard of."
      Church of England's Pension Commits to Hedge Funds The $1.7 billion pension fund of the Church of England has tapped Winton Capital, Bridgewater Associates and BlackRock Advisors to manage assets, Reuters reports.
      Japanese Firm Pitches Pensions on Hedge Funds Mizuho Global Alternative Investments, which offers clients access to overseas hedge funds, is trying to encourage Japanese pension funds to invest, at a time when pensions are cautious in the wake of a scandal at AIJ Investment Advisors, Bloomberg News reports.
      I.P.O./OFFERINGS »
      Not Quite an I.P.O. Comeback The Wall Street Journal writes: "A trio of firms put in largely lackluster showings Thursday as they hit the exchanges, demonstrating that the market can still be fickle."
    Singaporean Trust Moves Little on Debut The Ascendas Hospitality Trust of Singapore traded at roughly the same value as its initial offering price, despite strong demand for the I.P.O., Reuters reports.
    Steakhouse Company Reduces Size of I.P.O. The Del Frisco's Restaurant Group reduced the number of shares it sold in its I.P.O. and priced them below its expected range, Reuters reports.
    • REUTERS 
      Twitter Experiences Another Outage The Bits blog writes: "A few short weeks after a software bug knocked Twitter offline, the service was unavailable to the majority, if not all, of its 140 million users for several hours on Thursday."
      Forerunner Ventures Raises a $40 Million Fund Forerunner, a venture capital firm whose employees are all female, said it attracted $40 million for its first institutional fund, The Wall Street Journal reports.
      Online Learning Platform Raises $43 Million Open English, which teaches English to non-native speakers, raised a financing round led by Insight Venture Partners, TechCrunch reports.
      Scandals May Cost Banks Their Clout Banks recovered their self-confidence and influence quickly after the financial crisis. But Floyd Norris of The New York Times says that they may fare worse after JPMorgan Chase's hedging losses and the Libor scandal.
      Geithner Faces Senate on Rate-Rigging Scandal Timothy F. Geithner, the United States Treasury secretary, vowed that authorities would forcefully pursue criminal investigations into some of the world's biggest banks.
      Lloyds Receives Subpoenas Over Interest Rates The British bank Lloyds became a focus of the investigation into the rate-rigging scandal, Reuters reports.
      Proposed Settlement Asks Dewey's Former Partners for Cash The Wall Street Journal reports: "On Thursday the team shutting down the firm briefed hundreds of former partners on a new, $90.4 million settlement plan intended to get ex-partners to fork over some of the cash they were paid in 2011 and 2012 as Dewey headed toward bankruptcy."
      Capital One Penalized Over Lending to Military Families Capital One agreed to pay $12 million to resolve claims of violations in lending to military borrowers, Bloomberg News reports. The bank was also fined recently over claims it misled credit card customers.
      Trustee Disputes Fees in Lehman Bankruptcy The Wall Street Journal reports: "Some Wall Street banks and hedge funds asking Lehman Brothers Holdings Inc. to chip in for their legal fees aren't entitled to make such claims in the biggest Chapter 11 case of all time, a government bankruptcy watchdog is arguing."
      Madoff Trustee Looks to Distribute More Money Irving H. Picard is requesting permission from a New York court to distribute an additional $1.5 billion to $2.4 billion to investors who lost money in Bernard L. Madoff's Ponzi scheme, The Associated Press reports.