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Sep 26, 2012

DealBook Afternoon Edition -September 26, 2012-. Glencore's Sweetened Bid for Xstrata May Have an Unpalatable Condition



Wednesday, September 26, 2012
TOP STORY
Glencore's Sweetened Bid for Xstrata May Have an Unpalatable Condition The $90 billion merger of Glencore and Xstrata is on shaky ground, as the two sides struggle to come to terms over the makeup of the combined management team. The negotiations are going down to the wire. After getting an extension on the initial deadline, Xstrata now has until Oct. 1 to decide whether to accept Glencore's sweetened bid.
  • DEALBOOK »
  •  
  • DEALBOOK HIGHLIGHTS
    Dean Foods Explores Sale of a Dairy Unit Dean Foods announced Wednesday that it was exploring the sale of the Morningstar business, which sells milk and other dairy products under various regional brands.
    Mexico Unit of Banco Santander Rises Slightly in Debut Shares of the unit, Grupo Financiero Santander México, rose 3.4 percent to $12.60 at the opening of New York Stock Exchange trading amid the choppy environment for initial public offerings.
    BUZZ TRACKER
    Beyond Wall St., Curbs on High-Speed Trading Advance Several nations, including Canada, Australia and Germany, have adopted or proposed a wide range of limits on high-speed trading, saying they have learned from problems in United States markets, reports Nathaniel Popper for The New York Times.
    LOOKING AHEAD
    Economic Reports Data to be released on Thursday will include weekly jobless claims, durable goods for August, second-quarter gross domestic product (final) and pending home sales for August.
    Corporate Earnings Companies scheduled to report results on Thursday include Discover Financial Services, Nike and Research in Motion.
    Overseas On Thursday, the two-day Paris auto show begins; and the International Monetary Fund will release parts of its world economic outlook report.

    DealBook Video
    Business Day Live: Violence Erupts as Greeks Strike to Protest Austerity
    Business Day Live: Violence Erupts as Greeks Strike to Protest Austerity Economic protests in Greece and Spain turn violent. | American Airlines vs. its pilots. | An I.M.F. report looks at fiscal stability. | Meg Whitman on her efforts to revive Hewlett-Packard.

     

Stocks and markets in the News | Wall Street at Close Report -MarketWatch -September 26, 2012-.

Minneapolis homes - U.S. stocks fall, S&P 500 still on losing streak Major indexes end lower, with the S&P 500 Index locking in a fifth day of losses, its longest such streak since July, as austerity unrest in Europe sparked investor concern.

ADVFN III World Daily markets Bulletin -September 26, 2012-.




ADVFN III World Daily Markets Bulletin

Daily world financial news



Wednesday, 26 September 2012



US Market

Stocks Adding To Yesterday's Steep Losses In Early Trading

Stocks have
 moved mostly lower in early trading on Wednesday, extending the sharp
downward move seen over the course of the previous session. The major
averages have dipped into negative territory, although the Dow is
posting only a modest loss.

Currently, the major averages are all in the red, but the Dow is down only 3.84 points or less than a tenth of a percent at 13,453.71. The Nasdaq is down 13.08 points or 0.4 percent at 3,104.65 and the S&P 500 is down 4.09 points or 0.3 percent at 1,437.50.

The
 early weakness on Wall Street reflects lingering concerns about the
financial situation in Europe, with the yield on Spain's ten-year bond
climbing above 6 percent.

It now seems increasingly likely that
Spain will seek a bailout despite widespread public protests against
austerity measures for the 2013 budget set to be unveiled on Thursday.

Adding to the concerns about Europe's debt crisis, German newspaper Bild reported
 that Bundesbank is preparing a lawsuit against the European Central
Bank claiming that the central bank is overstepping its mandate in
launching the latest round of bond purchases.

While the focus is
largely on Europe, trading could be impacted by the release of the
Commerce Department's monthly report on new home sales in the U.S., with
 economists expecting sales to climb to an annual rate of 380,000 in
August from 372,000 in July.

However, the impact of the report
may be limited due to its backward-looking nature, with many traders
looking ahead to future data to determine the effectiveness of the
Federal Reserve's recent announcement of another round of quantitative
easing.

Philadelphia Fed President Charles Plosser warned Tuesday that the additional stimulus is not likely to do much to benefit growth or employment.

Gold stocks
 have shown a notable move to the downside in early trading, dragging
the NYSE Arca Gold Bugs Index down by 1.9 percent. The weakness among
gold stocks come as the price of the precious metal is falling by more
than $20 an ounce.

Significant weakness has also emerged among steel stocks,
 which are extending a recent downward move amid concerns about global
demand. Computer hardware, oil service, and networking stocks have also
come under pressure, while strength is visible among utilities stocks.

In overseas trading, stock markets across the Asia-Pacific region saw notable weakness during trading on Wednesday. Japan's Nikkei 225 Index plummeted by 2 percent, while Hong Kong's Hang Seng Index ended the day down by 0.8 percent.

The major European markets have also shown substantial moves to the downside on the day. While the U.K.'s FTSE 100 Index has tumbled by 1.4 percent, the German DAX Index and the French CAC 40 Index have plunged by 1.8 percent and 2.2 percent, respectively.

In the bond market, treasuries have
 shown a strong upward move, extending a recent winning streak. As a
result, the yield on the benchmark ten-year note, which moves opposite
of its price, is down 4.8 basis points at 1.634 percent.







Canadian Market
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TSX Dips At Open Wednesday

Toronto stocks
 moved lower at open Wednesday amid selling across a variety of sectors,
 with the S&P/TSX Composite Index losing 66.85 points or 0.55
percent to 12,190.33.

Among gold stocks, Royal Gold, Barrick Gold, Agnico-Eagle Mines and Goldcorp. were down nearly 2 percent each.

The Diversified Materials Index lost over 1 percent, with Inmet Mining, First Quantum Minerals and Teck Resources shedding around 1 percent each.

In the oil patch, Vermilion Energy, Pacific Rubiales Energy and Baytex Energy Corp. lost around 2 percent each.

Bombardier Inc.
 slipped over 1 percent even after it said it secured $158 million worth
 of orders from Israel Railways for additional 72 double-deck coaches.

Onex Corp.
 slipped 0.50 percent after announcing that it would acquire
KraussMaffei AG, a manufacturer of plastic and rubber processing
equipment, for 568 million euros.

Meanwhile, Research In Motion gained over 4 percent.

The
 price of crude oil was extending losses for a third session Wednesday
morning as traders await cues from the official inventories data due out
 later today. The EIA will come out with its U.S. crude oil inventories
report for the weekended September 21. Analysts expect crude oil
inventories to jump by 1.5 million barrels and gasoline stocks are seen
unchanged. Crude for November shed $1.28 to $90.09 a barrel.

The price of gold was
 moving lower Wednesday morning as the U.S. dollar was extending gains
versus a basket of currencies. Gold for December lost $17.40 to
$1,749.00 an ounce.

In corporate news from Canada, Onex Corporation said it would acquire KraussMaffei AG, a manufacturer of plastic and rubber processing equipment, for 568 million euros.

Bombardier Transportation of Bombardier Inc. said it secured $158 million worth of orders from Israel Railways for additional 72 double-deck coaches.

Diversified services provider IBI Group Inc.
 announced the adoption of a dividend reinvestment plan, which allows
eligible shareholders to direct that their cash dividends be reinvested
in additional common shares of the company.







European Market
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European Markets Firmly In The Red As Debt Worries Intensify

The European markets
 are firmly in the red in afternoon trading Wednesday, as worries about
the effectiveness of stimulus measures killed risk appetite, amid
clashes in Spain over austerity measures. Banks and miners are under
pressure.

Spain's capital Madrid witnessed clashes between riot
police and thousands of demonstrators outside Parliament. The protesters
 were attempting to form a human chain around parliament as a sign of
protest against the government's handling of the financial crisis.

The
 development comes amidst preparations by the Spanish government headed
by Mariano Rajoy to announce the 2013 budget on Thursday. It is said to
include more painful austerity measures aimed at reducing the country's
widening budget deficit by more than 60 billion euros by 2014.

The
 benchmark Spanish 10-year bond yields moved closer to the 6 percent
level after Catalan regional government called for a referendum to
decide whether it should be vested with more autonomy.

Philadelphia Federal Reserve President Charles Plosser
 said Tuesday that the Fed's third round of quantitative easing is not
likely to do much to benefit growth or employment. He said the move
risks the central bank's credibility.

Meanwhile, a report in German newspaper Bild said the Bundesbank was
 preparing a lawsuit against the European Central Bank, claiming that
the central bank is overstepping its mandate in launching the latest
round of bond buying program, known as the Outright Monetary
Transactions.

In economic news, French consumer confidence
 dropped slightly in September to 85 from 86 in August, weighed down by
households' weak assessment about future economic situation as well as
labor market conditions, Insee said. The index was forecast to remain
steady at 86.

Germany's Federal Statistical Office is
scheduled to release flash inflation data at 8.00 am ET. EU harmonized
inflation is expected to slow marginally to 2.1 percent in September
from 2.2 percent in August.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 1.93 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is falling 1.09 percent.

The German DAX is declining 1.56 percent and the French CAC 40 is dropping 2.01 percent. The UK's FTSE 100 is losing 1.15 percent and Switzerland's SMI is falling 0.90 percent.

In Frankfurt, Deutsche Bank is declining 3.2 percent and Commerzbank is falling 3 percent. Infineon Technologies is losing 3.1 percent. Jefferies cut the stock to "Underperform" from "Hold." Continental is losing 2.8 percent. Schaeffler Verwaltungs GmbH sold 20.8 million shares of the company on Tuesday.

Morgan Stanley removed Lufthansa from "Best Ideas List.'' The stock is losing 1.1 percent. Volkswagen, BMW and Daimler are declining between 2 percent and 1.5 percent.

In Paris, Credit Agricole, Societe Generale and BNP Paribas are declining between 4.5 percent and 3.2 percent. Grocery retailer Carrefour is declining 4 percent, carmaker Renault is losing 3.7 percent and telecom equipment firm Alcatel Lucent is dropping 3.5 percent.

STMicroelectronics is declining 3.2 percent. S&P Equity cut its rating on the stock.

In London, Among miners, Kazakhmys, Vedanta and Anglo American are losing between 3.1 percent and 3 percent. Russian steelmaker Evraz is falling 3.7 percent. Royal Bank of Scotland is declining 3 percent and Barclays is losing 2.9 percent. Standard Chartered is down 2.6 percent.

ICAP
 is declining 4.2 percent as the inter-dealer broker expects revenues
for the first half to be about 14 percent lower than the previous year.

London Stock Exchange is falling 1.4 percent after stating that trading remained subdued in the 5-month period ended August 31.

Myriad Group is plunging 17.6 percent in Zurich. The software developer launched a rights issue of 10.0 million Swiss francs and reported a wider loss for the first half of the year.







Asia Market

Asian Stocks Extend Declines On Mounting Growth Worries

Asian stock markets
 fell across the board on Wednesday, as continued tensions between China
 and Japan, lingering uncertainty over when Spain will seek a bailout
and apprehensions about the effectiveness of recent central-bank actions
 cast a shadow on global growth prospects.

International ratings agency Standard & Poor's Corp.
 on Tuesday lowered its 2012 and 2013 growth expectations for the euro
zone, reflecting concerns that the region is entering a new period of
recession. The International Monetary Fund is set to lower its growth
estimates for the global economy next month when it updates its
projections.

Concerns over Europe's economic situation also
weighed on risk appetite as thousands of protesters marched on Madrid's
parliament building expressing angst against a new round of harsh
austerity measures the government prepares to unveil in its draft budget
 plan for 2013 on Thursday. Spain, meanwhile, is set to disclose the
results of a stress test of 14 Spanish banking groups by Oliver Wyman on
 Friday, which along with the new structural reforms expected to be
unveiled will determine whether the country will ask for a full bailout.

German finance minister Wolfgang Schaueble called on Spain to make a decision on whether it needed a bailout, saying the country needs to regain confidence of the markets.

In
 Greece, trade unions have called a nationwide general strike today to
protest against planned new spending cuts worth nearly 12 billion euros
over the next two years that Greece has promised international creditors
 in an effort to secure its next tranche of aid.

Japanese shares
 fell to a two-week low, as many stocks went ex-dividend and the yen's
continued strength on global growth concerns weighed on export-reliant
companies. The Nikkei average fell over 2 percent to end below
the 9,000 mark for the first time since Sept. 13, with aviation stocks,
electronics makers and transport equipment companies suffering the
biggest losses.

The broader Topix index also lost 2
percent, weighed down by domestic political uncertainty after the main
opposition party chose former prime minister and security hawk Shinzo
Abe as its new leader, strengthening calls for a hard line against
China. The ruling party is expected to suffer a serious setback in
general elections expected this year due to the upcoming tax hikes.

Toyota and Nissan fell
 about 3 percent each amid reports that they are scaling back production
 in China after the foreign ministers of China and Japan held stern
talks on a bitter territorial dispute but made no breakthrough.
China-related Komatsu and Hitachi Construction Machinery also fell over a
 percent each.

Sony tumbled 4.5 percent after Standard
& Poor's Ratings Services downgraded its long-term credit ratings on
 the company by one notch, citing a slow recovery in the company's
mainstay consumer electronics business. Exporter Canon plunged 4.5
percent, Honda Motor slumped 4.2 percent and Panasonic dropped 2.5
percent.

China's Shanghai Composite index fell 1.2 percent
 to its lowest level since early 2009 as caution crept in ahead of the
upcoming extended "Golden Week" holiday staring September 30. Hong
Kong's Hang Seng index ended down 0.8 percent, dragged down by
retailers after fashion retailer Esprit Holdings reported
weaker-than-expected annual results.

Australian shares fell modestly on worries about Spain's fiscal strains ahead of Thursday's budget. The benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 0.3 percent each, with gains in defensive stocks limiting further downside. Mining stocks extended their recent losses on pessimism about global growth prospects in light of the continuing downturn in China. BHP Billiton fell 1.3 percent, Rio Tinto lost 2 percent and gold miner Newcrest edged down 0.3 percent.

Banks also drifted lower, a day after the Reserve Bank of Australia said the domestic financial system was well placed to cope with any shocks from abroad. Westpac edged down marginally, ANZ slipped 0.2 percent and NAB retreated 0.6 percent, while Commonwealth added 0.1 percent. Nexus Energy
 ended on a flat note after Seven West Media chief executive and former
Woodside boss Don Voelte joined its board as non-executive chairman.

Seoul
 shares hit a two-week low on growth worries following hawkish comments
from Federal Reserve Bank of Philadelphia President Charles Plosser. The
 benchmark Kospi average fell 0.6 percent, dragged down by
builders amid reports which indicated that Kukdong Engineering &
Construction may go bankrupt due to ongoing problems with liquidity.

New Zealand shares fell from a 4 1/2-year high, in line with broad-based losses across Asia. The benchmark NZX-50
 index slid 16 points 0.4 percent to 3,809, with Fletcher Building and
SkyCity Entertainment Group pacing the decliners on going ex-dividend.
Shares of the nation's largest construction company fell 3 percent,
while those of SkyCity tumbled 3.6 percent. Among other prominent decliners, stock exchange operator NZX, carpet maker Cavalier and resins maker Nuplex lost 2-4 percent.

Children's
 clothing retailer Pumpkin Patch ended unchanged ahead of its annual
results tomorrow, heavyweight Telecom edged up 0.2 percent and online
auction site Trade Me rose half a percent. New Zealand Oil & Gas gained 0. 6 percent after the company confirmed it would drill the Taranaki oil and gas prospect, Kakapo.

Elsewhere, India's benchmark Sensex was down 0.4 percent, Indonesia's Jakarta Composite index fell 1.1 percent, Singapore's Straits Times was losing 0.7 percent and the Taiwan Weighted average retreated 0.8 percent, while Malaysia's KLSE Composite was up marginally.







Commodities
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Crude Slips Near $90

The price of crude oil
 was extending losses for a third session Wednesday morning as traders
await cues from the official inventories data due out later today.

Light Sweet Crude Oil
 (WTI) futures for November delivery shed $0.68 to $90.69 a barrel.
Yesterday, oil extended losses to settle near a 2-month low as the
dollar rebounded to trade higher after comments from Philadelphia
Federal Reserve President Charles Plosser dampened investor sentiments.
Plosser indicated the Fed may have to raise short-term interest rates
before mid-2015 and believes the current round of quantitative easing
would not do much for the economy.

Tuesday after the market
hours, the API said U.S. crude oil inventories rose 335,000 barrels and
gasoline stocks added 112,000 barrels in the weekended September 21.

This morning, the U.S. dollar was steady near a 2-week high versus the euro and trading higher against sterling. The buck was moving higher versus the Swiss franc, while continued to tick lower against the yen.

In
 economic news, euro zone leading index recorded its first increase in
six months, rising 0.6 percent month-on-month in August to 105.3, the
Conference Board said.

Traders will look to the new home
sales report for August from the Commerce Department, due out at 10 a.m.
 ET. The consensus estimate calls for new homes sales of 380,000
compared to 372,000 in July.

Today during trading hours, the EIA will
 come out with its U.S. crude oil inventories report for the weekended
September 21. Analysts expect crude oil inventories to jump by 1.5
million barrels and gasoline stocks are seen unchanged.



Sales of new single-family houses in August down 0.3% from July's revised level | ESA Residential Sales ( August 2012) pdf.

Economics and Statistics Administration Logo
Sales of new single-family houses in August were 373,000 at a seasonally adjusted annual rate, down 0.3 percent from July’s revised level, but up 27.7% from August 2011.

DealBook Today's Top Headlines -September 26, 2012-.



Morning Agenda BY WILLIAM ALDEN
Libor's New Masters The British banking group that controls Libor is preparing to give up that responsibility, a person with direct knowledge of the matter tells DealBook's Mark Scott.

On Friday, Martin Wheatley, managing director of Britain's Financial Services Authority, is expected to unveil the results of an investigation into Libor after Barclays employees were accused of trying to manipulate the rate. That scandal showed the vulnerability of the rate, which affects more than $360 trillion of financial products. Going forward, tampering with Libor may be a criminal offense.

Mr. Wheatley is also expected to recommend changes in how the rate is overseen. He has hinted at possible changes to the Libor process, saying this summer that "reform may include amendments to the technical definitions used for Libor, the associated governance framework and the role of official regulation." Another prominent regulator, Gary Gensler, chairman of the Commodity Futures Trading Commission in the United States, said this week that "it is time for a new or revised benchmark."
Tesla Brought to Earth On Monday, it was all about lasers and smoke. But on Tuesday, Tesla Motors conceded it would be turning to investors and taxpayers for help.

The electric car company plans to sell five million shares to raise cash, it said in regulatory filings, adding that the federal government agreed to waive some conditions of a $465 million loan. The moves raised questions about the company's long-term viability, DealBook's Peter Eavis reports. The company is run by Elon Musk, the mogul described as "Steve Jobs, John D. Rockefeller, and Howard Hughes rolled into one." Yet for all the hype, Tesla is four to five months behind delivering its Model S sedans to customers.

Tesla's chief financial officer, Deepak Ahuja, said the changes to the government loan were "normal" because the company's business model had evolved. But Tesla's shares fell almost 10 percent on Tuesday, at one point triggering Nasdaq's circuit-breakers, according to MarketWatch.

For a look at other young companies, The Wall Street Journal plans to release a ranking of how 50 venture capital-backed start-ups have fared over the past year.
Santander Prices Mexican I.P.O. Within Expected Range The Mexican arm of Banco Santander staged one of the year's biggest I.P.O.'s on Tuesday, pricing the American portion of its initial public offering at $12.18 a share, in the middle of the expected range, a person briefed on the matter told DealBook. Shares are set to begin trading on the New York Stock Exchange on Wednesday under the ticker symbol BSMX.

Investors didn't appear too concerned by the size of the deal, or by the high degree of control that Santander will have over its Mexican subsidiary. Profit at the Mexican lender has outstripped that of its parent, rising 14.4 percent in the first half of he year.
On the Agenda The head of Santander's Mexican unit, Marcos Martinez, is on CNBC at 9:50 a.m. Roger C. Altman, the former deputy Treasury secretary and current executive chairman of Evercore Partners, is on Bloomberg TV at 7:48 a.m. Phil Angelides, who was the chairman of the Financial Crisis Inquiry Commission, is on CNBC at 4:40.

Data on new home sales for August is out at 10 a.m., after yesterday's home price data gave encouraging signs of a recovery. The Business Roundtable releases its quarterly CEO Economic Outlook Survey at 11 a.m., with the heads of companies giving their expectations for sales and hiring.

Today marks the four-year anniversary of the bankruptcy filing of Washington Mutual, the biggest bank failure in the nation's history.
The Squid and the Whale A well-known diorama at New York's American Museum of Natural History became laden with irony during a charity gala this week that included employees of Goldman Sachs (derided as the vampire squid) and JPMorgan Chase (which employed a trader nicknamed the London Whale).

"I've had to sit here all night staring at a whale," said Jes Staley, JPMorgan's investment banking chairman, according to Bloomberg News. Mr. Staley, Bloomberg reports, "then suggested the whale could be replaced with the squid in the room, which, he clarified afterward, meant Goldman Sachs."

Goldman's president, Gary D. Cohn, who presided over the gala for the NYU Langone Medical Center's Hospital for Joint Diseases and Center for Musculoskeletal Care, replied in kind. "The only squid in the room is over there," he said, according to the report. "I've never been so comfortable in a roomful of JPMorgan people in my life."
Outsmarting a Hedge Fund, Canadian Style It seemed like a clever trade when the American hedge fund Mason Capital Management bet against a proposed share conversion by the Telus Corporation, a Canadian telecommunications company, the Deal Professor writes. But things haven't turned out so well for Mason, which has found a shrewd opponent in Telus. Though the trade is said to be currently profitable, the hedge fund now faces the prospect of potentially losing millions.
Protests in Greece and Spain The New York Times reports: "Clear signs of the political and social cost of the euro zone crisis sent financial markets tumbling Wednesday as debt-laden Greece faced a crippling 24-hour strike and Spain cleaned up after violent protests Tuesday near the country's Parliament. Spanish bond yields approached 6 percent for the first time in months, while European shares and the euro fell sharply, as developments in Greece and Spain sent a new wave of anxiety through the ranks of international investors."
Contact: @williamalden | E-mail
 
MERGERS & ACQUISITIONS »
Yahoo Seen Putting a Focus on Deals Yahoo replaced its chief financial officer, who was known for cost-cutting, in a move that analysts said signaled the company was ready to expand through investments and acquisitions, The New York Times reports. The chief executive, Marissa Mayer, has told employees to expect "acqui-hires," or acquisitions made for talent, The Times says.
BP's Russian Partners Said to Plan to Bid for Stake in Venture The Russian billionaires that own half of TNK-BP plan to make an all-cash offer by mid-October for BP's 50 percent stake, Reuters reports, citing an unidentified person familiar with the matter.
Ameriprise Said to Approach Deal for ING Unit Ameriprise Financial is in advanced talks to buy most of ING's asset management business in Asia, Bloomberg News reports, citing two unidentified people with knowledge of the matter.
Woolworths Sells Dick Smith Electronics Unit The sale, to Anchorage Capital Partners, was said to be worth about $5 million, The Wall Street Journal reports.
INVESTMENT BANKING »
Attempts to Rig Libor, Shown Through Instant Messages "Nice Libor," reads one instant message from the former Royal Bank of Scotland trader Tan Chi Min that was included in a recent affidavit, Bloomberg News reports. "Our six-month fixing moved the entire fixing, hahahah."
Credit Suisse Said to Consider Combining Units Bloomberg News reports that the Swiss bank "is considering combining its asset-management unit with the private and investment banking divisions, a person familiar with the matter said."
Bank of America Said to Plan 40 Job Cuts in Asia
The Return of Neuberger Berman The asset management firm, which once was owned by Lehman Brothers, is now "pursuing the bold expansion strategy once undertaken by Lehman itself," Fortune writes.
Advice for Women on Wall Street Heidi Miller, a longtime lieutenant of Jamie Dimon who retired from JPMorgan Chase in January, told The Wall Street Journal that women in finance should ask for more.
 
PRIVATE EQUITY »
Time Running Out for Private Equity to Invest The industry's "dry powder" that it raised at the peak of the boom typically has a five-year life span, The Wall Street Journal writes.
Onex of Canada Said to Be Near Deal for German Company Onex, the Canadian buyout firm, is eyeing the purchase of KraussMaffei, a German company that makes machinery for processing plastics, from Madison Capital Partners, Bloomberg News reports, citing two unidentified people familiar with the matter.
HEDGE FUNDS »
SAC Manager Said to Have a Role in Insider Scheme Michael Steinberg, a hedge fund manager at SAC Capital Advisors, "is an unindicted co-conspirator in a $62 million insider trading scheme tied to technology stocks, two people familiar with the matter said," according to Bloomberg News.
Morgan Stanley Veteran to Join a New Hedge Fund The former European head of Morgan Stanley Investment Management is set to become the chief executive of a hedge fund being spun out of Citigroup, Financial News reports.
Hedge Funds Express Skepticism Over Fed's Plan
I.P.O./OFFERINGS »
Insiders at Michael Kors Sell Shares The company priced the offering at $53 a share, a discount of 2.8 percent to the shares on the market.
The Venture-Backed I.P.O. Rankings The blog peHUB uses data from Thomson Reuters to determine that Sequoia Capital was behind four companies that either went public or planned to go public since mid-May, leading its rivals.
Marketing Official at Hong Kong Exchange Loses Job A slowdown in I.P.O.'s in Hong Kong has prompted the Hong Kong stock exchange to restructure, The Wall Street Journal reports.
VENTURE CAPITAL »
In Chicago, Tech Companies Flock to an Old Building The New York Times writes that Chicago's Merchandise Mart, "a Depression-era behemoth of limestone, concrete and steel that has long been synonymous with fabric bolts and furniture," is now attracting major technology companies as tenants, as the surrounding area becomes a hub for start-ups.
JPMorgan Invests in Dubai E-Commerce Company JPMorgan Chase and the London-based fund Blakeney Management have invested more than $20 million in Namshi, a clothing retailer in Dubai, Reuters reports.
French Start-Up Valued at $800 Million Criteo, a display advertising company based in Paris, raised about $40 million, AllThingsD reports.
LEGAL/REGULATORY »
Former Programmer Demands That Goldman Cover His Legal Fees A former Goldman Sachs programmer who faces new charges of stealing computer code is demanding that the investment bank cover his mounting legal fees.
Germany Is Expected to Act to Curb High-Speed Trading On Wednesday, Germany is expected to approve draft legislation that would put additional controls on high-frequency trading, The New York Times reports.
Brokerage Firm Accused of Allowing High-Speed Manipulation Hold Brothers On-Line Investment Services agreed to pay $4 million in fines to the Securities and Exchange Commission.
A Tax Shelter Mitt Romney Could Love Gov. Mitt Romney's 2011 tax return highlights the use of a tax planning technique that may have allowed him to avoid Medicare tax liability derived from his employment at Bain Capital, Victor Fleischer writes in the Standard Deduction column.
Adding Up the Government's Legal Bills for Fannie and Freddie The government faces years of legal bills to defend Fannie Mae and Freddie Mac executives accused of misleading investors about subprime mortgages, writes Peter J. Henning in the White Collar Watch column.
Lehman Brothers to Pay Creditors $10.5 Billion The payment represents the second leg of a plan to pay out more than $65 billion, Reuters reports.
Olympus and Former Executives Plead Guilty in Accounting Fraud
Regulator Says Credit Scores Are Flawed The Consumer Financial Protection Bureau said credit scores purchased from reporting firms don't always give an accurate portrait of creditworthiness, The Wall Street Journal reports.

ADVFN III Morning Euro Markets Bulletin -September 26, 2012-.


ADVFN III Morning Euro Markets Bulletin  
Daily world financial news

Wednesday, 26 September 2012

London Market Report
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Stocks tumble on QE3 efficacy fears
Market Movers
  • techMARK 2,125.92 -0.77%
  • FTSE 100 5,816.79 -0.73%
  • FTSE 250 11,806.03 -1.05%
The old adage about the US sneezing and the UK therefore catching a cold is as apposite as ever with the UK market opening lower after a non-voting member of the US Federal Reserve member cast doubts over the efficacy of the Fed's asset purchase programme.

"We are unlikely to see much benefit to growth or employment from further asset purchases," said Charles Plosser, the President of the Philadelphia Fed Bank.

Plosser also suggested that short-term interest rates will need to be hiked earlier than the currently envisaged time frame of the middle of 2015.

Although Plosser is a known hard-liner and his comments therefore did not come as too much of a surprise, they weren't what the market wanted to hear; asset purchases - or quantitative easing (QE)

In company news, first half profits from international home emergency business Homeserve will be higher than in the corresponding period of last year, and therefore higher than some broker estimates. Adjusted pre-tax profit for the six months ending September 30th is expected to be higher than the £23.5m achieved at the interim stage last year, principally due to the benefits of increasing ownership of Domeo from 49% to 100%. Broker Peel Hunt had forecast £20m.

Waste management group Shanks said it now expects results for the year to March 31st 2013 to be slightly below the current range of expectations after market conditions in the UK and Dutch solid waste markets deteriorated significantly in the first half. Shanks said its organics, hazardous waste, and UK municipal businesses continued to perform robustly and in line with company expectations.

Performance across ICAP's voice and electronic businesses has remained more muted than anticipated at the time of the inter-dealer broker's annual general meeting in July. On the plus side, although activity in global markets has remained subdued in the last six months or so, there has been some improvement in trading volumes in September. As a result, group revenue in the six months ending September 30th is expected to be around 14% lower than the previous year.

Growth has slowed at pizza delivery firm Domino's Pizza. Like-for-like sales in the UK in the third quarter were up by 3.7%, versus 4.1% the year before and 5.7% in the first six months of the financial year.

FTSE 100 - Risers
British American Tobacco (BATS) 3,215.00p +0.37%
Compass Group (CPG) 723.50p +0.21%
SABMiller (SAB) 2,734.00p +0.09%
United Utilities Group (UU.) 729.50p 0.00%
Smith & Nephew (SN.) 693.00p 0.00%
SSE (SSE) 1,397.00p -0.07%
Imperial Tobacco Group (IMT) 2,343.00p -0.09%
British Sky Broadcasting Group (BSY) 750.50p -0.13%
Diageo (DGE) 1,750.50p -0.20%
National Grid (NG.) 692.00p -0.22%

FTSE 100 - Fallers
RSA Insurance Group (RSA) 114.40p -3.62%
Evraz (EVR) 242.60p -2.96%
Vedanta Resources (VED) 1,019.00p -2.67%
Anglo American (AAL) 1,854.00p -2.45%
Kazakhmys (KAZ) 700.00p -2.30%
Royal Bank of Scotland Group (RBS) 263.80p -2.30%
Kingfisher (KGF) 264.10p -2.15%
ARM Holdings (ARM) 572.50p -2.14%
Polymetal International (POLY) 1,046.00p -2.06%
Weir Group (WEIR) 1,774.00p -2.04%

FTSE 250 - Risers
TR Property Inv Trust Sigma Shares (TRYS) 78.75p +9.53%
Barr (A.G.) (BAG) 454.60p +0.93%
JPMorgan Indian Inv Trust (JII) 362.79p +0.89%
ITE Group (ITE) 207.70p +0.73%
Cranswick (CWK) 795.00p +0.70%
Menzies(John) (MNZS) 640.50p +0.55%
Homeserve (HSV) 222.20p +0.50%
Dignity (DTY) 921.50p +0.49%
BTG (BTG) 324.10p +0.40%
Petra Diamonds Ltd.(DI) (PDL) 118.50p +0.34%

FTSE 250 - Fallers
Shanks Group (SKS) 77.20p -14.46%
Imagination Technologies Group (IMG) 475.70p -8.52%
Bumi (BUMI) 160.00p -4.76%
ICAP (IAP) 328.00p -4.62%
Millennium & Copthorne Hotels (MLC) 482.90p -4.38%
Ferrexpo (FXPO) 198.80p -4.33%
Talvivaara Mining Company (TALV) 150.60p -4.20%
Domino's Pizza Group (DOM) 543.50p -3.46%
Afren (AFR) 134.00p -2.90%
St James's Place (STJ) 360.00p -2.68%

UK Event Calendar
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FTSE 100EuronextDax perfCAC 40
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INTERIMS
Panmure Gordon & Co, S & U, Snoozebox Holdings, Trap Oil Group

INTERIM DIVIDEND PAYMENT DATE
British American Tobacco, Lancashire Holdings

INTERIM EX-DIVIDEND DATE
Bovis Homes Group, Braime (T.F.& J.H.) Holdings, Braime (T.F.& J.H.) Holdings (Non-Voting), BrainJuicer Group, Brightside Group, British Smaller Companies VCT 2, Centrica, Christie Group, Derwent London, Dignity, Drax Group, Filtrona PLC, Good Energy Group, H.R. Owen, Invesco Perpetual UK Small Companies Inv Trust, IS Solutions, Kentz Corporation Ltd., M. P. Evans Group, Morgan Sindall Group, Morrison (Wm) Supermarkets, Netplay TV, Networkers International, North American Income Trust (The), Primary Health Properties, Quarto Group Inc., Real Estate Investors, Rotala, RSA Insurance Group, Smurfit Kappa Group, Vitec Group, Wynnstay Group

QUARTERLY EX-DIVIDEND DATE
Africa Opportunity Fund Ltd., Dow Chemical Co, Yamana Gold Inc.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Crude Oil Inventories (US) (15:30)
MBA Mortgage Applications (US) (12:00)
New Homes Sales (US) (15:00)

SPECIAL EX-DIVIDEND PAYMENT DATE
Highland Gold Mining Ltd.

AGMS
Absolute Return Trust Ltd. GBP Shares, Intercede Group, Micro Focus International, Namibian Resources, Sirius Minerals, Sofia Property Fund Ltd., Sweett Group, WYG

TRADING ANNOUNCEMENTS
ICAP, Topps Tiles

UK ECONOMIC ANNOUNCEMENTS
CBI Distributive Trades Surveys (11:00)

FINAL EX-DIVIDEND DATE
Anite, Development Securities, Hansard Global, Oxford Instruments, Photo-Me International


US Market Report
Stocks Close Firmly Negative On Afternoon Sell-Off

Stocks moved sharply lower over the course of the trading day on Tuesday after moving moderately higher in morning trading. Lingering concerns about the global economic outlook weighed on the markets, overshadowing upbeat U.S. consumer confidence data.

The major averages ended the day firmly in negative territory, at their worst levels of the session. The Dow fell 101.37 points or 0.8 percent to 13,457.55, the Nasdaq tumbled 43.05 points or 1.4 percent to 3,117.73 and the S&P 500 slid 15.30 points or 1.1 percent to 1,441.49.

The early strength on Wall Street was partly due to the release of a report from the Conference Board showing a much bigger than expected improvement in U.S. consumer confidence during the month of September.

The Conference Board said its consumer confidence index jumped to 70.3 in September from a revised 61.3 in August. Economists had expected the index to climb to 64.8 from the 60.6 originally reported for the previous month.

The much bigger than expected increase lifted the consumer confidence index to its highest level since reaching 71.6 in February.

Buying interest remained relatively subdued, however, as traders worried about whether the outlook for the global economy supports further upside for the markets.

The subsequent pullback was partly due to comments by Philadelphia Federal Reserve President Charles Plosser, who warned that the Fed's recently announced third round of quantitative easing is not likely to do much to benefit growth or employment.

Plosser, who is not currently a voting member of the Fed's monetary policy committee, said a small drop in interest rates is not likely to overturn the strong desire to save and induce households to spend more.

"In fact, driving down interest rates even further may encourage consumers to save even more to make up for lower returns," Plosser said.

"Thus, in my view, we are unlikely to see much benefit to growth or to employment from further asset purchases," he added. "If I am right, then conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed's credibility."

Among individual stocks, shares of Staples (SPLS) came under pressure after the office supplies retailer announced that it is embarking on a strategic plan to better serve the needs of its customers and accelerate growth. Staples ended the day down by 4.5 percent.

Staples said it is accelerating the closure of approximately fifteen U.S. stores and plans to close 45 stores and several sub-scale delivery businesses in Europe.

Construction equipment maker Caterpillar (CAT) also posted a notable loss after cutting its guidance for 2015. The company said it now expects earnings of $12 to $18 per share compared to its previous forecast for earnings of $15 to $20 per share.

Meanwhile, shares of Vail Resorts (MTN) turned in a strong performance after the resort operator reported a narrower than expected fourth quarter loss on better than expected revenues. Vail surged up by 8.2 percent on the day.


Wednesday newspaper round-up
Arctic oil, patents, SNB ...
French oil giant Total has warned against drilling for oil in the Arctic, the FT reports. Christophe de Margerie, Total’s chief executive, told the Financial Times the risk of an oil spill in such an environmentally sensitive area was simply too high. 'Oil on Greenland would be a disaster,' he said in an interview. 'A leak would do too much damage to the image of the company.'

With two parties in government, there are twice as many opportunities for ministers to toss out hare-brained schemes to the conference faithful on how to promote growth, suggests Ian King, the Business Editor at The Times. Most never get off the ground, King believes. He suggests the Chancellor of the Exchequer, George Osborne, should widen the scope of plans for a 'patent box' to include software, a sector in which the UK is historically strong. The sector is largely excluded because it uses other forms of intellectual property to win commercial protection. King notes that Aveva, the engineering software supplier and 'an unsung hero of the sector', says that, with the grants it receives locally, it can effectively open a new office in China at no cost.

Switzerland’s central bank has become a conduit for vast flows of capital into German Bunds and other haven bonds, exacerbating the Eurozone’s North-South divide, the Telegraph reports, citing a report by debt-ratings agency Standard & Poor's. The Swiss National Bank had bought €80bn (£64bn) of German, Dutch, French, Finnish and Austrian bonds this year to counter a flood of money entering the country and hold the franc at 1.20 to the euro.

The Independent reports that Silvio Berlusconi, the former Prime Minister of Italy, is back with an attack on the Germans. In one of the few interviews he has given since stepping down, Berlusconi called Germany a "hegemonic state that is dictating rules on discipline and austerity to other European countries".
FX round-up

Dollar firms after Plosser slams QE3
The dollar advanced against major currencies on Tuesday after a US central banker said the Federal Reserve’s latest bond buying programme is unlikely to stimulate economic activity.

The ICE dollar index, which measures the US currency against a basket of six others, advanced to 79.672 from 79.571 on Monday.

In a speech to financial market trade groups in Philadelphia, Federal Reserve Bank of Philadelphia President Charles Plosser said: "We are unlikely to see much benefit to growth or employment from further asset purchases."

While criticising the Fed's new bond buying programme, he added that the central bank may increase interest rates way before the current mid-2015 target.

The greenback was also boosted by some encouraging data on the US housing market. The S&P/Case-Shiller 20-city composite index showed US house prices increased 1.6% in July, to almost a two year high.

Against the Japanese yen, the dollar bought ¥77.78 compared to ¥77.88 on Monday.

Meanwhile the euro recovered from a week low on Tuesday as focus remained on the Eurozone debt crisis, and in particular, any fresh news on a possible bailout for Spain. The nation's Andalucia region may ask for a €4.9bn in financial aid.

Concern about the size of Greece's deficit kept a lid on the euro's recovery after Germany's Der Spiegel said it could as much as €20bn.

The single currency was trading at $1.2926 after earlier touching a low of $1.2885.

Sterling fell to $1.6187 from $1.6212 the previous session while the Australian dollar changed hands at $1.0450 from $1.0421 on Monday.