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Dec 21, 2012

NYT Business Afternoon Update (December 21, 2012).: Retailers Try to Adapt to Device-Hopping Shoppers


 Business Afternoon Update




Retailers Try to Adapt to Device-Hopping Shoppers

By CLAIRE CAIN MILLER and STEPHANIE CLIFFORD
Online merchants are trying to figure out how to tie together the several methods a customer may use on the way to buying something.

Wall Street Slides After Fiscal Setback

By NATHANIEL POPPER
Stocks slumped, depressed by the setback late Thursday in Washington on progress toward a budget deal.
Media Decoder Blog

Murdoch Publishing Wing Shows Loss of $2.1 Billion

By AMY CHOZICK
News Corporation's regulatory filing gave potential investors a peek at the challenges facing the new entity.

Gene-Altered Fish Moves Closer to Federal Approval

By ANDREW POLLACK
The Food and Drug Administration concluded that a genetically engineered salmon would have "no significant impact" on the environment.

Ex-SAC Fund Manager Indicted in Insider Trading Scheme

By REUTERS
A federal grand jury in New York returned an indictment Friday against Mathew Martoma, who was previously charged in what prosecutors have called the "most lucrative" insider trading scheme ever.

DealBooK P.M. Edition (December 21, 2012).: Breakup Fees in NYSE's Deal With ICE Show Lessons From Past



Friday, December 21, 2012
TOP STORY
Breakup Fees in NYSE's Deal With ICE Show Lessons From Past
Breakup Fees in NYSE's Deal With ICE Show Lessons From Past If the $8.2 billion sale falls apart on antitrust grounds, ICE will owe NYSE Euronext a breakup fee of $750 million. That's about a 9.1 percent breakup fee, on the high side for major deals.
  • DEALBOOK »
  •  
    DEALBOOK HIGHLIGHTS
    Weighing the Consequences of a Money Fund Overhaul As regulators press to overhaul money market funds, investors may have to find alternative places to park their cash. Such a shift could have important consequences for the financial system.
    Apollo Unit to Buy Aviva's U.S. Unit for $1.8 Billion A unit of Apollo Global Management agreed on Friday to buy the American operations of Aviva, the British insurer, for about $1.55 billion in cash.
    Pinnacle to Buy Ameristar Casinos for $869 Million Pinnacle Entertainment agreed on Friday to buy Ameristar Casinos for $869 million in cash, in a bid to more than double in size.
    After Latest Scandals, British Lawmakers Call for Tougher Bank Rules Regulators in Britain should have the powers to completely split up banks, a government-commissioned report concluded on Friday, adding that proposed changes to the rules do not go far enough to prevent a future crisis.
    General Electric to Buy Avio for $4.3 Billion General Electric agreed on Friday to buy the Italian aerospace company Avio for $4.3 billion, acquiring a long-time partner in its jet engine business.
    LOOKING AHEAD
    A Long Winter Nap From E-Mail DealBook's Morning Agenda and afternoon E-mails are off next week, but the DealBook web site will be updated through the holidays with the latest deal news. Both E-mails will return on Wednesday, Jan. 2, 2013.
    Quotation of the Day
    "Banks need to be discouraged from gaming the rules. All history tells us they will do this unless incentivized not to."
    A report commissioned by the British government.

  •  
  •  

BIV | Today's Business News (December 21, 2012.2): Exclusive: Government deliberately left LDB bidders in dark over privatization cancellation.





Politics and Policy

Exclusive: Government deliberately left LDB bidders in dark over privatization cancellation

Bureaucrats were given detailed instructions not to tell shortlisted liquor distribution bidders why the privatization was suddenly ... READ MORE

Technology

 

How much would it cost to use Facebook ad-free?

A Vancouver digital marketing agency has uncovered some surprising results in its search to answer that question ... READ MORE

Retail and Manufacturing

 

Headline-hitting B.C. brewery hires former VBOT boss

Fast-growing and controversy-prone brewery PWB has appointed Darcy Rezac, former longtime head of the Vancouver Board of Trade, as its vice-president of ... READ MORE

More News...

   

Carl’s Jr. set to open first of 25 Metro Vancouver restaurants

B2Gold to merge with CGA Mining

Engineer sues golf course for $529,000

MarketWatch | Wall Street at Close Report (December 21, 2012).: U.S. stocks slide as budget hopes dim

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch) — U.S. stocks fell sharply on Friday, denting weekly gains, after a Republican proposal to avert the fiscal cliff did not find support, reducing hopes for a budget deal before 2012 ends.

”If there is any policy maker that is not taking the fiscal cliff seriously, he should check with the Congressional Budget Office or check with any economist you can name, because it is very serious and it will lead to a recession if we go off the cliff,” said Hugh Johnson, chairman of Hugh Johnson Advisors LLC. “It’s for real.” 

The CBO forecasts a recession in the first half of next year should the White House and Congress fail to reach a deal. 

After falling as much as 189 points, the Dow Jones Industrial Average DJIA -0.91%  shed 120.88 points, or 0.9%, at 13,190.84, a level that has it up 0.4% from the week-ago close.
All but two of the Dow’s 30 components finished in the red, led by Bank of America Corp. BAC +0.27% , down 2%. 

Tallying a 1.2% weekly gain, the S&P 500 Index SPX -0.94%  lost 13.54 points, or 0.9%, at 1,430.15, with consumer shares hardest hit among its 10 major sectors.
The Nasdaq Composite Index COMP -0.96% retreated 29.38 points, or 1%, at 3,021, leaving it up 1.7% on the week. 

For every share rising, more than three fell on the New York Stock Exchange, where nearly 1.9 billion shares traded. 

Composite volume topped 4.8 billion. 

Shares of Research In Motion Ltd. RIMM -1.83%  fell almost 23% a day after the company’s fiscal-third-quarter results, which beat estimates, but left investors fretting about changes to its high-margin services business and costs tied to the approaching launch of its new BlackBerry platform. 



What happens next in fiscal talks? Damian Paletta discusses political ramifications of the cancellation of the Boehner 'Plan B' vote and prospects for an agreement by Jan. 1. 

Friday’s economic data was positive, especially a 0.7% November rise in orders for durable goods, according to Johnson. Read: Durable-goods orders jump in November.
Still, investors would bypass the report, because the “focus is so overwhelmingly on Washington,” he said. 

Those fiscal-cliff concerns found their way into a gauge of consumer sentiment, which fell in December. The University of Michigan-Thomson Reuters consumer-sentiment index declined to a final December reading of 72.9, the lowest level since January. Read: Consumer sentiment sinks in December. 
 
House Speaker John Boehner on Friday said House members, the Senate and President Barack Obama must continue work to avert the looming fiscal cliff of tax increases and spending cuts.

The Ohio Republican spoke a day after he dropped a proposal to allow higher taxes on yearly income of $1 million and up, because he did not have enough votes to pass it, with the House then going into recess. There are plans to return Dec. 27 in the event there is some sort of deal to consider.

“It’s hard to imagine that we could have policy makers in elected office that are such ideologues in this day and age. But we do have them and shame on them,” commented Johnson. 

The president and some legislators understand the importance of not going over the fiscal cliff, so “there’s a chance we forge an agreement in the Senate which will pass the House, not with the hardened Republican caucus, but with a consortium of Democrats and Republicans,” he added.
President Obama was expected to give a fiscal-cliff statement at 5 p.m. Eastern time.

Kate Gibson is a reporter for MarketWatch, based in New York.


ADVFN III World Daily Markets Bulletin (December 21, 2012).

ADVFN III World Daily Markets Bulletin  
Daily world financial news

Friday, 21 December 2012


US Market
Stocks Sell Off At The Open Amid Fiscal Cliff Worries

Stocks moved sharply lower at the start of trading on Friday amid renewed concerns about the looming fiscal cliff. The major averages showed notable moves to the downside, more than offsetting the modest gains posted in the previous session.

The major averages have recently bounced off their lows for the young session but remain firmly negative. The Dow is down 123.44 points or 0.9 percent at 13,188.28, the Nasdaq is down 44.14 points or 1.5 percent at 3,006.25 and the S&P 500 is down 14.65 points or 1 percent at 1,429.04.

The sell-off at the open came after House Speaker John Boehner, R-Ohio, scrapped plans to hold a House vote on his "Plan B" legislation due to a lack of support among members of his own party.

The legislation would have extended the Bush-era tax cuts for people making up to $1 million, although Democrats claimed it would raise taxes on millions of working families by eliminating certain tax credits.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff."

With the House going into recess until after Christmas, Boehner's inability to get the legislation passed has led to renewed concerns about whether Congress will be able to reach an agreement.

The focus on the developments in Washington has overshadowed a batch of upbeat economic data, including a report showing a bigger than expected increase in durable goods orders.

The Commerce Department said durable goods orders increased by 0.7 percent in November following a 1.1 percent increase in October. Economists had expected orders to increase by 0.5 percent, matching the increase that had been reported for the previous month.

Excluding a 1.1 percent drop in orders for transportation equipment, durable goods orders surged up by 1.6 percent in November compared to a 1.9 percent jump in October.


The Commerce Department also released a separate report showing a much bigger than expected increase in personal income in November.

Networking stocks are seeing substantial weakness in early trading, with the NYSE Arca Networking Index down by 2.7 percent. The loss by the index comes after it ended the previous session at its best closing level in over seven months.

Electronic storage, semiconductor, and steel stocks are also posting steep losses, moving to the downside along with most of the major sectors.

In overseas trading, stock markets across the Asia-Pacific region came under pressure during trading on Friday. Japan's Nikkei 225 Index ended the day down by 1 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index is down by 0.6 percent, the U.K.'s FTSE 100 Index is down by 0.8 percent and the German DAX Index is down by 0.9 percent.

In the bond market, treasuries have moved notably higher amid the renewed fiscal cliff worries. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.4 basis points at 1.746 percent.

Canadian Market
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TSX Dips At Open Friday

Toronto stocks dipped at open Friday amid selling across a variety of sectors, with the S&P/TSX Composite Index losing 15.22 points or 0.12 percent to 12,373.49. BlackBerry maker Research In Motion dived 15 percent after reporting adjusted net loss for the latest-quarter.

The Diversified Materials Index lost over 1 percent, with Teck Resources shedding 2 percent. First Quantum Minerals and Inmet Mining slipped about 1 percent each.

In the financial space, National Bank, Bank of Montreal and Royal Bank were down around 1 percent each. In the oil patch, Niko Resources lost about 6 percent and Pacific Rubiales Energy was down about 2 percent.

Cogeco Cable Inc. shed nearly 2 percent after announcing that it would acquire PEER 1 Network Enterprises by way of takeover bid of C$3.85 in per share, in cash.

Among gold plays, Royal Gold  was down 1.50 percent, while Seabridge Gold was gaining 2 percent. Barrick Gold and Agnico-Eagle Mines were up about 1 percent each.

In corporate news from Canada, Research In Motion reported that its third-quarter GAAP net income plunged to $9 million, or $0.02 per share from $265 million or $0.51 per share, in the same quarter last year. Adjusted net loss for the latest-quarter was $114 million or $0.22 per share. Analysts expected the company to report a loss of $0.35 per share.

Base-metals miner Teck Resources said coal sales for the fourth quarter are expected to exceed prior guidance of 6.2 million tonnes, and that production for the first quarter of 2013 is not expected to be materially impacted by the damage to Berth 1 at Westshore Terminals.

Nigeria focused oil exploration and production company Oando Energy Resources announced that it would acquire ConocoPhillips' Nigerian businesses for approximately $1.79 billion.

Precious metals miner Queenston Mining announced that its shareholders have approved the acquisition of the company by Osisko Mining Corp. in an all-stock deal valued at about C$550 million.

Uranium miner Ditem Exploration said it has sold its 2 percent NSR on an asset called, the Matoush Property to Strateco Resources for C$1 million. Yesterday, the stock jumped 25 percent

Cogeco Cable Inc. announced that it would acquire PEER 1 Network Enterprises by way of takeover bid of C$3.85 in per share, in cash. The purchase price values PEER 1's equity at approximately $526 million on a fully diluted basis.

In economic news, Statistics Canada said inflation recorded its smallest year-over-year gain, rising just 0.80 percent in November. The consumer price index rose 1.2 percent in October. On a seasonally adjusted monthly basis, the CPI decreased 0.2 percent in November after increasing 0.2 percent in October.. Meanwhile, The Bank of Canada's core index rose 1.2 percent in the 12 months to November, following a 1.3 percent increase in October.


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European Markets Drop On Fiscal Cliff Concerns

The European markets are in negative territory on Friday, as the setback in U.S. fiscal cliff negotiations led to investor caution. Unimpressive economic data also dampened sentiment. Banks are particularly under pressure.

The U.S. House of Representatives abruptly went into recess on Thursday after failing to take up a vote on House speaker John Boehner's "Plan B" to avoid the looming fiscal cliff due to a lack of support from members of his own party.

Boehner's "Plan B" legislation would have extended the Bush-era tax cuts for people making up to $1 million, but Democrats claim it would raise taxes on millions of working families by eliminating certain tax credits.

If no agreement can be reached by the end of the year, automatic spending cuts and tax increases will go into effect - measures that many analysts agree would push the country back into recession. The House has now gone into recess until after Christmas.

German consumer sentiment is set to deteriorate in January, as consumers see a difficult period for the economy over the coming months, the results of a survey by market research group GfK showed Friday.

The forward-looking index fell to 5.6 from a revised value of 5.8 for December. The index was forecast to remain unchanged with the originally estimated reading of 5.9 for December.

The U.K. economy grew 0.9 percent sequentially in the third quarter instead of the previously estimated 1 percent expansion, final data from the Office for National Statistics showed. Meanwhile, budget deficit widened to 17.5 billion pounds in November from 16.3 billion pounds a year ago. Economists had forecast a surplus of 16 billion pounds.

The Euro Stoxx 50 index of eurozone bluechip stocks is declining 0.58 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is dropping 0.66 percent.

Switzerland's SMI, the French CAC 40, the German DAX and the UK's FTSE 100 are falling between 0.4 percent and 0.9 percent.

In Frankfurt, Deutsche Bank is declining 2.4 percent and Commerzbank is falling 2.1 percent. ThyssenKrupp is dropping 1.6 percent. HeidelbergCement is falling 1.4 percent.

Bucking the trend, Infineon Technologies is advancing 1.1 percent after JPMorgan raised the stock to ''Overweight'' from ''Neutral.''

Adidas is adding 0.6 percent, following impressive quarterly results from U.S. rival Nike. JPMorgan reinitiated Prosiebensat.1 with a ''Neutral'' rating. The stock is falling 1.2 percent.

In Paris, Alcatel-Lucent is declining 4.3 percent, thus topping the losers. ArcelorMittal is falling 3 percent after announcing a $4.3 billion write-down in the fourth quarter, owing to weakness in Europe.

Technip is receding 1.5 percent. The firm was awarded by Total E&P Norge, a contract for the Martin Linge development project in Norway. The total contract is worth around $1.25 billion, with a Technip share of around $780 million.

Credit Agricole and Societe Generale are losing 2.3 percent and 1.5 percent, respectively.

In London, Steel maker Evraz is declining 3.6 percent. Defense contractor BAE Systems, which announced a contract, is losing 2.6 percent. Royal Bank of Scotland, Lloyds Banking and Barclays are losing between 2.1 percent and 2.6 percent.

Miners Anglo American, BHP Billiton, Rio Tinto, Eurasian Natural Resources, and Vedanta are notably lower. United utilities and Severn Trent are gaining around 1.5 percent each.


Asia Market
Asian Stocks Fall On Fiscal Cliff Uncertainty

Stocks fell across the Asia Pacific region after U.S. House Republicans cancelled a vote on speaker John Boehner's "Plan B" bill, a backup legislation to avert automatic tax increases at the end of the year, for lack of support.

With the House going into recess until after Christmas, the increased uncertainty over prospects for a bipartisan deal overshadowed the positive sentiment stemming from data showing stronger than expected existing home sales growth and a rebound in Philadelphia-area manufacturing activity. Tax cuts will expire and every family will see income taxes automatically going up in January, if Congress fails to act before the end of the year.

Japanese shares fell for a second straight session, as investors locked in profits before Christmas. The benchmark Nikkei average fell a percent, while the broader Topix index shed 0.7 percent. The yen rose in the wake of the delay in resolving the U.S. fiscal crisis, weighing on export-oriented shares. Fanuc, Nikon, Toyota Motor and TDK lost 2-3 percent.

Real estate and financial shares linked to monetary policy ended on a firm note on speculation about further policy easing. Nomura Holdings posted a modest half a percent gain, Sumitomo Mitsui Financial Group ended flat and Mitsubishi Estate closed up 2.9 percent.

China's Shanghai Composite index ended down 0.7 percent after touching a five-month high early in the session. Heavyweight banks fell sharply due to profit taking and amid asset quality concerns. Hong Kong's Hang Seng index also fell 0.7 percent, led by mainland banking and energy stocks.

Australian shares weakened, dragged down by miners on worries about U.S. fiscal cliff negotiations. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index fell about 0.2 percent each. Global miners BHP Billiton and Rio Tinto shed about 0.9 percent each, while smaller rival Fortescue Metals Group lost 2.7 percent. Gold miner Newcrest ended little changed despite a steep gall in gold prices overnight. Defensives ended flat, with retailer Woolworths and Telstra ending down about 0.2 percent each.

Banks ended higher across the board, with NAB, ANZ, Commonwealth and Westpac gaining between 0.2 percent and 0.8 percent. Oil & gas producer Woodside Petroleum added 0.7 percent and Santos rallied 1.7 percent after U.S. crude futures edged higher in choppy trading overnight, supported by upbeat U.S. data. Origin Energy lost 1.2 percent after the company inked a $US300 million deal to sell part of its future oil and condensate production.

Seoul stocks fell sharply, weighed down by institutional selling in tech shares amid concerns over the stalled U.S. budget talks. The benchmark Kospi average lost a percent to post its first weekly loss in five weeks. Heavyweight Samsung Electronics, which is facing European Union antitrust objections over filing patent lawsuits against rival Apple, tumbled 4 percent, while shares of LG Display fell 3.5 percent.

New Zealand shares snapped a three-day rally, mirroring losses in regional stocks amid the latest setback in talks to avert the U.S. fiscal cliff. The benchmark NZX-50 index fell half a percent.

Refiner New Zealand Refining and Australian food manufacturer Goodman Fielder dropped 3-4 percent as they exited the NZX 50 Index. Market heavyweights Fletcher Building and Telecom lost 2-3 percent, Skellerup tumbled 3.2 percent, PGG Wrightson declined 2.4 percent and Port of Tauranga retreated 1.8 percent, while Chorus and Diligent Board Member Services rose about 3 percent each.

Elsewhere, Indonesia's Jakarta Composite index was down 0.1 percent, while the markets in Indonesia, Singapore, Malaysia and Taiwan were down between 0.4 percent and 1 percent

Commodities
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Crude Slips Below $90 On Demand Concerns

The price of crude oil was moving lower Friday morning as traders were concerned over demand growth after a setback in U.S. fiscal cliff negotiations.

Light Sweet Crude Oil (WTI) futures for February delivery, lost $0.97 to $89.16 a barrel. Yesterday, oil gained nearly 2 percent to settle above the $90-mark for the first time in two months even as investors continued to monitor the U.S. budget talks to avert a fiscal cliff that was caught in uncertainty with both sides refusing to budge. Nonetheless, House Speaker John Boehner expressed optimism of closing a deal with President Barack Obama but demanded the Senate vote on his alternate Plan B tax bill.

The price of gold was lingering around its four-month low Friday morning as risk appetite waned amid a setback in U.S. fiscal cliff negotiations.

Gold for February delivery, the most actively traded contract, edged up $2.80 to $1,648.70 an ounce. Yesterday, gold plunged over 1 percent to settle at a fresh 4-month low as the U.S. budget talks to avert a fiscal cliff were once again stuck in uncertainty, although House Speaker John Boehner expressed optimism of a deal with President Barack Obama while demanding the Senate vote on his alternate Plan B tax bill. The precious metal was also impacted by some mixed macroeconomic data out of the world's largest economy.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,350.52 tons.

This morning, the U.S. dollar was leveling off from its 7-month low versus the euro and a 2-month low against sterling. The buck was hovering around a 20-month high versus the yen and ticking higher against the Swiss franc.

In economic news from the euro zone, Germany's consumer sentiment is set to deteriorate in January, survey results from market research group GfK showed. The forward-looking index fell to 5.6 from a revised value of 5.8 in December. The index was forecast to remain unchanged at 5.9 points, the originally estimated figure for December.

Traders will look to the durable goods order from the U.S. Commerce Department, due out at 8:30 am ET. Economists expect a 0.5 percent increase in durable goods orders for November. Excluding transportation, orders may have risen 0.2 percent.

Separately, the department is due to release its personal income & outlays report for November. Economists expect the report to show that personal income rose 0.3 percent, while personal spending is expected to have increased by 0.4 percent. In October, personal income rose slightly but spending fell by 0.2 percent.




ADVFN III Evening Euro Markets Bulletin (December 21, 2012).


ADVFN III Evening Euro Markets Bulletin
Daily world financial news



London Market Report
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Investors take profits ahead of Christmas

    Market Movers
    techMARK 2,126.82 -0.24%
    FTSE 100 5,939.99 -0.31%
    FTSE 250 12,362.38 -0.49%
While stocks managed to stage a small comeback in afternoon trade, the UK market finished the week on a dull note, with ‘fiscal cliff’ fears dampening the festive cheer ahead of Christmas.

“Traders have spent much of the day taking profits ahead of the weekend as the last full trading week of 2012 draws to a close,” said senior sales trader Toby Morris from CMC Markets.

“With uncertainty about the outcome of the fiscal cliff talks higher than ever after the fiasco of last night’s cancellation of the Republican vote, investors have adopted a safety first approach, with last night a stark reminder that the current political uncertainty from the US can still lead to erratic moves in a thin market.”

Last night, Republican House speaker John Boehner was forced to withdraw his “Plan B” for dealing with the fiscal cliff due to a lack of support in the House of Representatives.

Boehner had thought that the Republican majority in the lower house would be enough to push through his proposal to avoid the impending automatic spending cuts and increase in taxes despite opposition from President Barack Obama and Democrats.

However, hard-line Republicans refused to support concessions on tax increases that left Boehner’s plan with insufficient votes to push the measure through even through just the House.

Speaking at a news conference today, Boehner said he would not walk away from negotiations over the fiscal cliff.
Economic data fails to give markets a boost
Further dampening the mood this morning was the news that UK gross domestic product (GDP) in the third quarter expanded at a 0.9% rate from the preceding three months. This final estimate was worse the initial 1% increase forecasted.
UK public sector net borrowing was weaker than expected in November, fuelling fear that Britain is moving closer to losing its treasured AAA credit rating. Borrowing came in at £17.5bn in November, £1.2bn higher net borrowing than a year before and above expectations of £16bn

Two surveys of consumer confidence also disappointed this morning: the GfK consumer confidence survey in the UK fell from -22 to -29 in December, missing the -25 forecast; while the forward-looking German GfK survey fell from 5.8 to 5.6 for January, missing the 5.9 estimate.

Meanwhile, the Chinese MNI flash business sentiment indicator fell from 53.78 to 52.23 in November.
FTSE 100: Miners and financials in the red
Miners and financial stocks were bearing the brunt of the bearish mood on markets on Friday as investors cut positions in riskier assets on concerns over the US economy. However, Randgold Resources was bucking the trend as gold prices advanced.
Banks were under the weather after a new report said that government plans to create a ‘ring fence’ between banks’ retail and investment operations fall well short of what is required. The Parliamentary Commission on Banking Standards has called on the government to "electrify" the ring fence to stop banks taking advantage of loopholes. Lloyds and Barclays were both under the weather.

ENRC was being weighed down by a ratings cut by Goldman Sachs to 'neutral' this morning. Meanwhile, insurance giant Aviva fell after selling Aviva USA Corporation - its life, annuities and asset management business - to life insurance holding company Athene Holiding for $1.8bn.

Xstrata was broadly flat despite saying that it is set to boost ore production by a further third at its Lady Loretta mine in north-west Queensland, Australia.

BAE Systems fell as investors shrugged off a £2.5bn deal with the government of Oman to supply of Typhoon and Hawk Advanced JetTrainer aircraft. This comes two days after the company warned that full-year underlying earnings could be hit by three pence per share if it cannot agree on pricing on a large Saudi Arabian Typhoon aircraft contract.

Water providers Severn Trent, United Utilities and Pennon were making gains after regulator Ofwat backed down over changes to water company licences.

Carnival was a high riser too, rebounding after a heavy fall yesterday when the cruise company reported a fall in full-year revenues after what it called its most challenging year ever.
FTSE 250: Regus gains after acquisition
Office space provider Regus gained after launching a fresh bid for smaller peer MWB Business Exchange (MBE) at a much lower price, a year and a half after it withdrew its initial offer.

Through its subsidiary Marley Acquisitions Limited (MAL), Regus is making a cash offer for 61.576p per share of MBE, valuing the company at £40m. Back in May 2011, Regus had made an indicative offer for MBE at 92.36p per share, valuing the company at a much higher price of £60m.

Jefferies said in a research report: "We view this as a strategically sensible transaction for Regus, cementing its leading market position in the UK serviced office market, with considerable potential cross-selling synergies."

High Street betting shop William Hill was under the weather after Numis Securites downgraded its rating for the stock to ‘reduce’.

In contrast New World Resources was on the up, shrugging off a  downgrade from Goldman Sachs to ‘sell’.
AIM/Small Cap Report
FTSE 100 - Risers
Randgold Resources Ltd. (RRS) 6,125.00p +2.68%
Severn Trent (SVT) 1,610.00p +2.61%
Carnival (CCL) 2,442.00p +2.13%
Polymetal International (POLY) 1,176.00p +1.47%
United Utilities Group (UU.) 682.00p +1.19%
Aggreko (AGK) 1,760.00p +1.03%
British American Tobacco (BATS) 3,142.00p +1.03%
International Consolidated Airlines Group SA (CDI) (IAG) 187.90p +1.02%
Xstrata (XTA) 1,051.00p +0.77%
Admiral Group (ADM) 1,200.00p +0.59%

FTSE 100 - Fallers
Evraz (EVR) 257.80p -3.45%
Resolution Ltd. (RSL) 250.10p -2.65%
Compass Group (CPG) 723.00p -2.63%
Prudential (PRU) 872.00p -2.62%
Burberry Group (BRBY) 1,217.00p -2.41%
Diageo (DGE) 1,807.50p -2.22%
Whitbread (WTB) 2,473.00p -1.90%
Lloyds Banking Group (LLOY) 48.33p -1.88%
Petrofac Ltd. (PFC) 1,635.00p -1.68%
Barclays (BARC) 263.00p -1.42%

FTSE 250 - Risers
African Barrick Gold (ABG) 454.00p +4.61%
Euromoney Institutional Investor (ERM) 889.50p +4.16%
Regus (RGU) 109.00p +3.81%
Menzies(John) (MNZS) 642.50p +3.63%
PZ Cussons (PZC) 378.10p +3.19%
Salamander Energy (SMDR) 183.30p +3.15%
New World Resources A Shares (NWR) 304.00p +3.09%
Telecity Group (TCY) 797.00p +2.77%
FirstGroup (FGP) 209.00p +2.55%
COLT Group SA (COLT) 100.90p +2.23%

FTSE 250 - Fallers
Moneysupermarket.com Group (MONY) 159.80p -5.89%
Ruspetro (RPO) 72.25p -5.62%
Talvivaara Mining Company (TALV) 101.60p -4.78%
Centamin (DI) (CEY) 40.88p -4.28%
Essar Energy (ESSR) 117.80p -4.23%
Home Retail Group (HOME) 128.90p -4.23%
Dairy Crest Group (DCG) 378.20p -3.91%
Carpetright (CPR) 669.50p -3.67%
Howden Joinery Group (HWDN) 170.00p -3.57%
Workspace Group (WKP) 296.00p -3.27%


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European Markets Fell On U.S. Fiscal Cliff Concerns

The European markets ended Friday's session in negative territory. Investor sentiment was impacted by the U.S. fiscal cliff negotiations and the failure of the Republican "Plan B" effort. With the end of the year rapidly approaching, hopes for a timely solution are dissolving. However, the markets did pare their early losses following statements made by John Boehner, which suggested that he has not given up on the negotiations. Shares of European banks were among the worst performers at the end of the week.

The U.S. House of Representatives abruptly went into recess on Thursday after failing to take up a vote on House speaker John Boehner's "Plan B" to avoid the looming fiscal cliff due to a lack of support from members of his own party.

Boehner's "Plan B" legislation would have extended the Bush-era tax cuts for people making up to $1 million, but Democrats claim it would raise taxes on millions of working families by eliminating certain tax credits.

Boehner stated Friday that he will continue to look for ways to resolve the fiscal cliff and that he will continue to try and work out a deal with the President. He also stated that it is now up to President Obama and Senate Majority Leader Harry Reid to come up with a bill for the House to consider.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.30 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.27 percent.

The DAX of Germany fell by 0.47 percent and the CAC 40 of France dropped by 0.15 percent. The FTSE 100 of the U.K. decreased by 0.30 percent and the SMI of Switzerland finished lower by 0.34 percent.


In Frankfurt, Deutsche Bank declined by 1.79 percent and Commerzbank fell by 3.41 percent. Infineon Technologies climbed by 0.10 percent, after JPMorgan upgraded the stock to ''Overweight'' from ''Neutral.''

Adidas gained 0.28 percent, following impressive quarterly results from U.S. rival Nike. JPMorgan reinitiated Prosiebensat.1 with a ''Neutral'' rating. The stock finished down by 2.87 percent.

In Paris, ArcelorMittal declined by 2.73 percent. The company announced a $4.3 billion write-down in the fourth quarter, owing to weakness in Europe.

Technip dropped by 0.97 percent. The firm was awarded by Total E&P Norge, a contract for the Martin Linge development project in Norway. The total contract is worth around $1.25 billion, with a Technip share of around $780 million.

Credit Agricole and Societe Generale decreased by 2.51 percent and 2.07 percent, respectively. BNP Paribas also lost 1.99 percent.

In London, defense contractor BAE Systems, which announced a contract, fell by 0.85 percent. Royal Bank of Scotland decreased by 0.79 percent and Barclays lost 1.71 percent. Lloyds Banking Group dropped by 2.08 percent and HSBC finished down by 0.20 percent.

Mining stocks turned in a weak performance. Anglo American fell by 0.48 percent and BHP Billiton lost 0.63 percent. Rio Tinto decreased by 0.14 percent, Eurasian Natural Resources declined by 1.39 percent, and Vedanta Resources lost 0.43 percent.

A leading indicator of the Eurozone economy increased in November after falling in the previous months, suggesting that the short-term outlook has moderately improved, data from a survey by the Conference Board showed Friday.

The leading economic index increased to 105.3 in November from 104.7 in October, which was lower than September's reading of 105.

German consumer sentiment is set to deteriorate in January, as consumers see a difficult period for the economy over the coming months, the results of a survey by market research group GfK showed Friday. The forward-looking index fell to 5.6 from a revised value of 5.8 for December. The index was forecast to remain unchanged the originally estimated reading of 5.9 for December.

France's business confidence improved for the second straight month in December in line with expectations, data from the statistical office Insee showed Friday. The business confidence indicator for the manufacturing industry rose to 89 from November's score of 88. The figure matched economists' expectations.

The U.K. economic recovery was slightly weaker-than-estimated in the third quarter on downward revisions to manufacturing and services output. Due to the weak activity, government revenues remained subdued and in turn widened the budget gap.

The U.K. economy grew 0.9 percent sequentially in the third quarter instead of previously estimated 1 percent expansion, final data from the Office for National Statistics showed Friday.

British consumer confidence declined more than expected in December, from an 18-month high, reflecting sharp deterioration in general economic expectations. The consumer sentiment index fell to -29 from -22 in November as four of the five sub-indicators weakened, a survey by GfK NOP showed Friday. The expected reading for December was -25.

The U.K. budget deficit widened to GBP 17.5 billion in November from GBP 16.3 billion a year ago, the Office for National Statistics said Friday. Economists had forecast a surplus of GBP 16 billion.
US Market Report
Stock Under Pressure After Boehner's "Plan B" Fails

Stocks have moved sharply lower during trading on Friday, partly offsetting the strong gains posted earlier in the week. The pullback reflects renewed concerns that the U.S. could be pushed over the looming fiscal cliff.

The major averages are currently posting steep losses, near their worst levels of the day. The Dow is down 166.03 points or 1.3 percent at 13,145.69, the Nasdaq is down 42.84 points or 1.4 percent at 3,007.55, and the S&P 500 is down 19.01 points or 1.3 percent at 1,424.68.

While optimism about a potential budget agreement helped to drive stocks higher earlier in the week, traders are expressing renewed concerns about the fiscal cliff following the latest developments in Washington.

The sell-off on Wall Street comes after House Speaker John Boehner, R-Ohio, scrapped plans to hold a House vote on his "Plan B" legislation due to a lack of support among members of his own party.

The legislation would have extended the Bush-era tax cuts for people making up to $1 million, although Democrats claimed it would raise taxes on millions of working families by eliminating certain tax credits.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff."

With the House going into recess until after Christmas, Boehner's inability to get the legislation passed has led to renewed concerns about whether Congress will be able to reach an agreement.

Unless Congress acts, approximately $600 billion in tax increases and government spending cuts are due to go into effect at the end of the year.

The focus on the developments in Washington has overshadowed another batch of upbeat U.S. economic data, including a report showing a bigger than expected increase in durable goods orders.

The Commerce Department said durable goods orders increased by 0.7 percent in November following a 1.1 percent increase in October. Economists had expected orders to increase by 0.5 percent, matching the increase that had been reported for the previous month.

Excluding a 1.1 percent drop in orders for transportation equipment, durable goods orders surged up by 1.6 percent in November compared to a 1.9 percent jump in October.

The Commerce Department also released a separate report showing a much bigger than expected increase in personal income in November.

Sector News

Most of the major sectors have shown notable moves to the downside on the day, reflecting the broad based selling pressure on Wall Street.

Steel stocks are turning in some of the market's worst performances in mid-day trading, with the NYSE Arca Steel Index down by 2.1 percent. With the loss, the index is pulling back further off the seven-month closing high that it set on Wednesday.

Considerable weakness has also emerged among housing stocks, as reflected by the 2.5 percent loss being posted by the Philadelphia Housing Sector Index. MDC Holdings (MDC) and Masco (MAS) are posting notable losses.

technology stocks have also come under pressure, with Research in Motion (RIMM) helping to lead the way lower despite reporting better than expected third quarter results. Shares of RIM are down by 17.6 percent after ending Thursday's trading at a seven-month closing high.

Banking, oil service, and airline stocks also posting significant losses, giving back ground following recent strength in the sectors.

Other markets

In overseas trading, stock markets across the Asia-Pacific region came under pressure during trading on Friday. Japan's Nikkei 225 Index ended the day down by 1 percent, while Hong Kong's Hang Seng Index fell by 0.7 percent.

In the bond market, treasuries have moved notably higher amid the renewed fiscal cliff worries. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.2 basis points at 1.748 percent.
Broker tips
ITV, Diageo, Regus
Panmure Gordon has said it foresees 'material upside' for terrestrial broadcaster ITV in the New Year, as it reiterated its 'buy' rating and 140p target for the stock.

The broker is anticipating a "very strong start" to the new financial year in terms of advertising growth.

"We are well-known supporters of ITV, and have been gratified by the very strong share price performance this year (over 50% share price, excluding dividend). Our FY 2012-14 forecasts feel increasingly unambitious," analyst Alex DeGroote said.

Credit Suisse has slashed its estimates for drinks giant and Guinness owner Diageo following the cancelled talks to acquire tequila group Jose Cuervo, but has retained its 'outperform' rating for the stock.

With the stock trading at 17.5 times calendar 2013 earnings, in line with peers but with above-average growth and returns, Credit Suisse said that Diageo "remains one of the better long-term investment cases in our consumer staples universe".

Jefferies has reiterated its 'buy' rating and 130p target for office space group Regus following Friday's 40m-pound cash offer for smaller peer MWB Business Exchange (MBE).

"We view this as a strategically sensible transaction for Regus, cementing its leading market position in the UK serviced office market, with considerable potential cross-selling synergies," Jefferies said.

BBC NEWS | Business (December 21, 2012).: Bank reform plans should be tougher, Banking Commission says


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Bank reform plans should be tougher, Banking Commission says

 
Barclays and RBS logos The government is moving ahead with legislation to ring-fence banks' retail and investment arms
Government plans to ring-fence the banks - protecting retail banking from the riskier investment side - "fall well short of what is required", a report has warned.
The Banking Standards Commission wants the government to "electrify" the fence so banks won't try to "game" the rules.

That means regulators having the power to fully break up a bank if it does not follow the ring-fence proposals.

The bank reforms will go before Parliament early next year.
'Electrification'
 
The Parliamentary Commission on Banking Standards, known as the Banking Commission for short, was asked by Chancellor George Osborne to study the draft version of the government's Financial Services (Banking Reform) Bill.

This follows last year's recommendation by the Independent Commission on Banking, which was led by Sir John Vickers.

Sir John concluded that ring-fencing was the best way to protect "core" retail banking activities from any future investment banking losses, such as were seen during the global financial crisis.

The government's proposed bill hinged on three main aspects:
  • ring-fencing or protecting retail banking
  • ensuring that bank losses fall on bank creditors and not depositors or taxpayers
  • making banks better able to absorb losses
But the government's draft legislation was a watered-down version of the Vickers report which proposed quite a high degree of separation, said Andrew Tyrie, chairman of the Banking Standards Commission.

"The proposals as they stand [in the Bill], fall well short of what is required," he said.
"What we've done with the Commission proposals is to put back some of that stiff separation into the ring-fence and then make clear that the key problem - that banks are going to be at the ring-fence all the time, which will be a nightmare for regulators - needs to be dealt with," he told the Today programme.

"And the way to do that is to say to banks 'If you don't try to game this ring-fence we won't see the need to separate you.'
"Then they will have a massive incentive then to get to a point where banks have certainty [not to be broken up]."
"That is why we recommend electrification. The legislation needs to set out a reserve power for separation - the regulator needs to know he can use it."
Ring-fencing explained Under the draft bill, ring-fencing would ensure that retail services of a struggling lender can be carried on independently and smoothly even if authorities let the rest of the group fail.

 
Crisis jargon buster
Use the dropdown for easy-to-understand explanations of key financial terms:
Ring-fence
A recommendation of the UK's Independent Commission on Banking. Services provided by the banks that are deemed essential to the UK economy - such as customer accounts, payment transfers, lending to small and medium businesses - should be separated out from the banks other, riskier activities. They would be placed in a separate subsidiary company in the bank, and provided with its own separate capital to absorb any losses. The ring-fenced business would also be banned from lending to or in other ways exposing itself to the risks of the rest of the bank - in particular its investment banking activities.
For example, in the case of a failing banking group, regulators could sell off its core activities - thereby maintaining continuity for depositors - while allowing the rest of the organisation to go through a bankruptcy process.

Secondly, retail deposits (but not pension liabilities) would be ranked ahead of the claims of other bank creditors in the event of a bank insolvency.

Thirdly, banks are to hold a sufficient capital buffer - as outlined by global regulators - which means that if banks do fail, losses can be absorbed by shareholders and other creditors rather than the taxpayer.

Under the draft legislation, the Treasury would have the authority to decide which banks ring-fencing should apply to, as well as specific activities to be undertaken, within ring-fenced banks.
The Prudential Regulation Authority, which will become the UK's regulator for deposit-taking institutions in April under the Bank of England, would have the power to ensure the ring-fenced bank to carry on with its business.

Mr Tyrie has also called on independent reviews of the effectiveness of the ring-fence proposals across all banks to take place at least once every four years.

'Perpetual uncertainty'
 
"Remember at the moment banks will probably behave but in the long run they will find a way to gaming the ring-fence if they don't have a strong disincentive to do so," he told the BBC.
"In 10-20 years time... people will get complacent. At that point it's crucial to have a set of rules to keep banks well away from testing this ring-fence."

Anthony Browne, the chief executive of the British Bankers' Association (BBA), welcomed the report, but warned that uncertainty over banks' prospects could have a negative impact on their ability to lend.
"The risk here is creating uncertainty. If it's perpetually hanging over the banking sector that individual banks or the whole sector could be broken up at some point, then it's going to be difficult to return to having an investable banking sector that can be customer-focused and globally competitive and do what it should be doing, which is lending to homeowners and businesses," he said.

Ed Balls, Labour's shadow chancellor said: "As Ed Miliband and I said at the Labour conference this year, if the letter and spirit of the Vickers proposals are not delivered and we do not see cultural change in our banks, full separation will be necessary.

"The Commission is clearly right to say the jury is still out and to demand a reserve power for full separation of the banks."

'Consensus commitment'
 
The Commission's report comes a month after Mr Osborne urged its members not to send the government's proposed reform "back to square one" by "unpicking" the consensus on how it should be carried out.

A Treasury spokesman said on Thursday evening: "The government is committed to reforming the financial sector and putting in place a regulatory structure that learns the lessons of the past and protects taxpayers in the future."

"It has been committed to building consensus and has consulted widely on these reforms over the last two and half years. The Banking Reform Bill is the next step in that.

"The government is grateful to the Parliamentary Commission on Banking Standards for its scrutiny of the draft bill and notes that it, 'welcomes the government's action to bring forward legislation to implement a ring-fence'."

The spokesman added that the government would study the report and respond in detail when the Financial Services (Banking Reform) Bill is formally introduced to Parliament early next year.

The Commission explained

  • The Parliamentary Commission on Banking Standards was appointed in July following the Libor scandal and other episodes that damaged the reputation of banks in the UK
  • It includes MPs and peers and is chaired by Andrew Tyrie, who also heads the House of Commons' Treasury Committee
  • Members include the next Archbishop of Canterbury, Justin Welby
  • It heard evidence from major figures in the banking sector
  • Evidence included a warning from RBS boss Stephen Hester that ring-fencing banks' retail and investment arms could increase the risk of institutions needing to be rescued
  • But Barclays chief executive Antony Jenkins told the commission that his bank was "embracing" the ring-fencing proposal
  • The commission has also heard from Paul Volcker, a former chairman of the US Federal Reserve, about his US proposals to ensure bank safety