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May 6, 2013

MarketWatch I Asia Markets Latest News May 6, 2013.


HONG KONG (MarketWatch) -- Hong Kong and mainland Chinese stocks on Tuesday dropped to give away some of the previous session's gains, with banks and some metals producers among the decliners. The Hang Seng Index fell 0.2% to 22,872.13 and the Hang Seng China Enterprises Index gave up 0.4% to 10,955.42. Shares of Agricultural Bank of China Ltd. shed 0.8% and Industrial & Commercial Bank of China Ltd. eased 0.7%, while HSBC Holdings PLC fell 0.2% ahead of its quarterly results later in the day. Weakness in gold and copper futures during the Asian session helped weigh on some metals producers, with Jiangxi Copper Co. off 0.8% and Zijin Mining Group Co. down 0.9%. China's Shanghai Composite fell 0.5% to 2,221.28.
 Hong Kong stocks pull back, with banks lower

Japanese stocks shoot higher to lead gains for Asian markets as investors return from a four-day weekend to catch up with central-bank decisions, strong U.S. jobs data and a weaker yen level.
 Japan stocks soar after holiday, but Sydney slips

 LOS ANGELES (MarketWatch) -- Stocks in Australia swung between small gains and losses early Tuesday as investors awaited an interest-rate decision from the country's central bank. The S&P/ASX 200 was down 0.1%. Banking stocks were lower, with shares of Commonwealth Bank of Australia and Westpac Banking Corp. each down 0.7% and Australia & New Zealand Banking Group off 1.5%. In the sector, Australia's banking regulator said it won't delay the implementation of new minimum liquidity standards, breaking from international regulators who had decided on a 2019 implementation deadline for global banks. Gains among most mining stocks limited the loss on the ASX 200, as BHP Billiton Ltd. rose 1% and Newcrest Mining Ltd. climbed 2.4%. Meanwhile, shares of Billabong International were halted at the surfwear retailer's request, saying the move was related to possible transactions involving the company. The halt will be in effect until Thursday or when the company makes an announcement. Billabong has been in talks with potential buyers. Turning back to the interest-rate front, just two of 18 economists surveyed by The Wall Street Journal expect a cut in the interest rate from 3%. The Australian dollar traded around $1.0242, slipping from $1.0252 late Monday.
 Australia stocks seesaw ahead of rate decision

U.S. regulators eye Bitcoin supervision: GATA I THE GATA DISPATCH May 6, 2013.

U.S. regulators eye Bitcoin supervision

By Tracy Alloway, Gregory Meyer, and Stephen Foley
Financial Times, London
Monday, May 6, 2013

Senior officials at a top US financial regulator are discussing whether Bitcoin, the controversial cyber-currency, might fall under their regulatory remit.

Bitcoin "is for sure something we need to explore," Bart Chilton, one of the five commissioners at the Commodity Futures Trading Commission (CFTC), told the Financial Times. A person familiar with the CFTC's thinking said that the regulator is "seriously" examining the issue.

Four-year-old Bitcoin is attracting the interest of regulators amid volatile booms and busts in the value of the cyber-currency and fresh media interest. Intensified regulatory scrutiny could pose challenges for proponents of Bitcoin, who have praised the currency for its independence from traditional authorities.

In March, a branch of the US Treasury Department said that all firms that exchange or transfer the virtual currency will be considered "money services businesses."

That means they must provide information to the government and introduce policies to prevent money laundering. It could also make it risky for other financial institutions to do business with firms that are not in compliance.

Since the ruling, at least three companies in North America have reported having their business accounts closed by their banks. Bitfloor, a New York-based Bitcoin exchange, said it was shutting down entirely, and it has not yet been able to return funds to customers.

Roger Ver, founder of and an angel investor in Bitcoin start-ups, said that he knew of some entrepreneurs who had moved to Panama to explore setting up operations outside of the US.
"Even if US regulations make it hard for Bitcoin businesses to operate in the US, that doesn't mean it will make it difficult for people to use Bitcoin as a currency in the US. Bitcoin is a world currency," he said.

The CFTC regulates derivatives contracts and, under Dodd-Frank financial reform, has sweeping authority to oversee retail foreign exchange dealers.

CFTC jurisdiction generally does not extend to cash markets unless exchanges list derivatives contracts based on them. For example, the agency monitors physical oil transactions insofar as they influence crude futures traded on the New York Mercantile Exchange.

One person familiar with the discussions said Bitcoin would not become subject to CFTC jurisdiction unless it becomes the basis for a derivatives contract. The use of Bitcoin to pay for ordinary goods is outside the commission's bailiwick.

Leveraged Bitcoin transactions that settled in more than two days -- so-called "rolling spot" transactions -- would also fall under CFTC jurisdiction, the person said.

Said Mr Chilton, the commissioner: "In essence, we're talking about a type of shadow currency, and there is more than a colourable argument to be made that derivative products relating to Bitcoin falls squarely in our jurisdiction."

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Latest U.S. jobs report is fabrication, Embry and Roberts say: GATA I THE GATA DISPATCH May 6, 2013.

Latest U.S. jobs report is fabrication, Embry and Roberts say

3p ET Monday, May 6, 2013

Interviewed today by King World News, Sprott Asset Management's John Embry remarks that the U.S. government's latest jobs report is a complete fabrication, as noted yesterday by former Assistant U.S. Treasury Secretary Paul Craig Roberts:

"There isn't one single thing that has happened in the big picture since gold was $1,900 at the end of August 2011 that is remotely negative for gold," Embry says. "I don't care what aspect you look at." The recent attack on gold, Embry adds, "has been an absolute takedown because the United States is scared to death of losing its reserve currency status or seeing its currency get annihilated."
An excerpt from the interview is posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

A Homemade Style of Terror: Jihadists Push New Tactics: The New York Times Global Update May 6, 2013.

The New York Times International Herald Tribune
May 6, 2013
Compiled 20:45 GMT

Global Update

News Analysis

A Homemade Style of Terror: Jihadists Push New Tactics

Qaeda propagandists have provided online education to teach their devotees in the United States how to carry out smaller-scale solo attacks, like the Boston bombings.

Workers Claim Racial Bias in Farms' Hiring of Immigrants

Americans, mostly black, who live near large-scale farms say they are illegally discouraged from applying for work and treated badly by employers who prefer foreigners' malleability.

Syrian Rebels Say They Downed Helicopter Amid New Claims on Chemical Weapons

The claims came as Syria's civil war threatened anew to spread beyond its borders following an Israeli airstrike near Damascus.

Video: A Glass Ocean

Diving into today's oceans, one scientist looks for modern day mirrors to sea creatures frozen in glass in the late 1800s.

Op-Ed Columnist

Syria Is Not Iraq

Our errors in Iraq should not keep us from doing the right thing this time.

Protests in Bangladesh Seeking Antiblasphemy Law Turn Deadly

Islamist protesters demanding an antiblasphemy law clashed with the police in Dhaka and Chittagong, leaving at least 19 people dead and 100 injured.

Syria Blames Israel for Fiery Attack in Damascus

Israel would not confirm that it had carried out the airstrikes, but the four explosions near the Syrian capital demonstrated a firepower more potent than any seen before in the country's civil war.

Airstrikes Tied to Israel May Be Message to Iranians

Strikes on military warehouses and other installations in Syria appear to underscore Israel's determination to keep advanced weapons out of Hezbollah's hands.

Bank of America and MBIA Agree to $1.7 Billion Settlement

Bank of America has reached a deal with MBIA over disputes stemming from insurance coverage of mortgage-backed securities.

YouTube Said to Be Planning a Subscription Option

The Web site was expected this week to announce a plan to let some video makers convert fans to paying customers.

E.U. Rules Against Patent Play by Google's Motorola Unit

The European Union on Monday made a preliminary antitrust finding against Motorola Mobility, saying it had abused its dominance in wireless patents by seeking an injunction against Apple in Germany.

Accessories No Longer Tethered to Apple

Manufacturers are gravitating toward wireless connections for Apple's products, which is helping the market for competitors' mobile devices.

Investor Group Buys BMC for $6.9 Billion

BMC Software agreed on Monday to sell itself to a group of investors led by Bain Capital and Golden Gate Capital for about $6.9 billion, completing a campaign by an activist hedge fund to push the company into a deal.

How to Say Thanks? Return a Club to Glory

Hull drew, 2-2, with Cardiff on Saturday, the last day of a 46-game season in what is called The Championship, but is really the second division of English soccer.

One Race Down, It's Off to Next for Orb

Shug McGaughey shipped his newly crowned Kentucky Derby champion, Orb, to his home base in New York to prepare for the May 18 Preakness Stakes.

Kerr Wins Kingsmill on Second Hole in Playoff

Cristie Kerr made a short par putt on the second hole of a sudden-death playoff with Suzann Pettersen to win the L.P.G.A.'s Kingsmill Championship.

Wrongfully Convicted Often Find Their Record, Unexpunged, Haunts Them

Across much of the country, sealing or clearing a criminal record after a wrongful conviction is a tangled and expensive process, advocates and former prisoners say.

Tsarnaev's Body Ready for Burial. But Where?

Gov. Deval Patrick said he did not want the Boston bombing suspect to be buried in Massachusetts, and sentiment was growing that the body should be sent to Russia.

Girl's Death by Gunshot Is Rejected as Symbol

At the funeral for a 2-year-old who was shot by her 5-year-old brother in a small Kentucky town, there was anger at those who have judged a lifestyle that includes firearms for children.
Op-Ed Contributors

Intervene With Western Aid

Assistance to the Syrian opposition to allow it to build a government-in-waiting will help ease the war's aftermath.
Op-Ed Columnist

The Chutzpah Caucus

Looking for realism in all the wrong places.

The Chinese Dreams: The Economist I New Selected Articles from the May 6th, 2013

The EconomistMonday May 6th, 2013 Editor's picks

A selection of new stories from
Analects: The role of Thomas Friedman
Banyan: A tawdry victory
Pomegranate: Cutting loose
Democracy in America: The unmentionables
The Economist explains: Who really runs Wikipedia?

The role of Thomas Friedman
Where do China's dreams come from?
A tawdry victory
Plenty to worry Malaysia's ruling coalition, even in election victory
Cutting loose
Two massacres and two bombing raids punctuate a significant week in Syria's long-running civil war
Democracy in America:
The unmentionables
Barack Obama and Enrique Peña Nieto are focusing on issues other than drugs and violence
The Economist explains
Who really runs Wikipedia?
Given that no one is precisely in charge of anything, who has responsibility for the accuracy or intent of any entry?

DealBook P.M. Edition May 6, 2013: 2 Big Banks Face Lawsuit on Mortgages. Home |Business Day| Video The New York Times

Monday, May 6, 2013
Eric Schneiderman, New York's attorney general.
2 Big Banks Face Lawsuit on Mortgages Eric T. Schneiderman, New York's top prosecutor, is poised to accuse Wells Fargo and Bank of America of violating the terms of a $26 billion national mortgage settlement, his office said.
For the latest updates, go to »

The 'Mad Men' I.P.O. A back-of-the-envelope valuation of the fictional advertising agency Sterling Cooper Draper Pryce, circa 1968, as DealBook takes a step into Don Draper's world.
A Bank of America branch in San Francisco.
Bank of America and MBIA Agree to $1.7 Billion Settlement Bank of America has reached a deal with MBIA over disputes stemming from insurance coverage of mortgage-backed securities.
White Collar Watch: On Wall Street, Recovering Money From Rogue Employees Peter J. Henning says that SAC Capital is one of several firms that are seeking to insert provisions in employment contracts allowing them to recover compensation from employees who violate the law.
China Insider: China's Changing Internet Landscape Bill Bishop says that China was on vacation much of last week for the May 1 Worker's Day holiday, but executives at two of China's most important online companies were busy completing a deal that may reshape the country's Internet.
In Hong Kong, Firms Bulk Up on Bankers to Bolster I.P.O.'s As Hong Kong tries to spur a revival in a lackluster I.P.O. market, companies are hiring armies of underwriters to manage even midsize listings in a bid to maximize returns.
Investor Group Buys BMC for $6.9 Billion BMC Software agreed on Monday to sell itself to a group of investors led by Bain Capital and Golden Gate Capital for about $6.9 billion, completing a campaign by an activist hedge fund to push the company into a deal.
Breakingviews: BMC Deal Shows How an Activist Strategy Can Work Robert Cyran says that the hedge fund Elliott Management has again successfully pushed a technology firm into selling itself.
Apollo's Profit Rose 72% in First Quarter The private equity giant Apollo Global Management said first-quarter profit increased 72 percent, to $792 million, as the value of its holdings rose and the firm sold some of its investments.
Crestwood to Merge With Inergy to Create $7 Billion Firm The combined company will provide pipeline and other services in some of the biggest oil and gas drilling areas in North America.
Economic Reports Data to be released on Tuesday include HSBC, Société Générale, Walt Disney, Electronic Arts and Whole Foods.
Corporate Earnings Companies scheduled to release quarterly results on Tuesday include Newell Rubbermaid, Moody's, Berkshire Hathaway, Leucadia National and Orbitz Worldwide.
In the United States On Tuesday, the Senate Commerce Committee will hold a hearing on credit reports; the House Energy Committee will hold a hearing on the global energy landscape; and the House Science Committee will hold a hearing on the Keystone XL pipeline.
For the latest updates, go to »

MarketWatch I Wall Street at Close Report May 6, 2013.: U.S. stock rise; S&P 500 extends record climb

By Kate Gibson, MarketWatch 
NEW YORK (MarketWatch)U.S. stocks mostly advanced on Monday, continuing the S&P 500 index’s record run above 1,600 after the April jobs report exceeded expectations. 

“The market had a pretty good run over the last several years, and here we are at all-time highs,” said Robert Stein, senior managing director of Astor Asset Management in Chicago. 

“I’m not sure it’s supportive of all the fundamentals, but we’re moving from a period of uncertainty to a period of — air quotes here — visible risk. So when you have visible risk, it allows for a larger investment, maybe buying things that when you were uncertain you wouldn’t buy at all,” he said. 

3 years later: lessons from the stock market’s ‘flash crash’
Three years after the Dow dropped nearly 1,000 points in minutes, fears of a repeat occurrence are still omnipresent. Steven Russolillo reports on MoneyBeat. 

U.S. equities are in a bull market that in March entered a fifth year as better-than-anticipated corporate results and three rounds of Treasury purchases by the Federal Reserve has the S&P 500 up roughly 140% from March 2009. 

“We’ll see if the market can digest the new highs, as it transitions from the defensive to cyclical sectors,” Art Hogan, market strategist at Lazard Capital Markets LLC, said of the rotation that surfaced last week. See: Stock-market rally takes a new turn as tech leads.
The rotation into riskier sectors is a healthy one, assuming it continues, as “it shows investors are taking on a higher level of risk,” Hogan said. “What you had was bond-like investors investing in bond-like stocks, so it was very dividend driven.” 

On Monday, the three-year anniversary of the “flash crash” that had the Dow industrials losing almost 1,000 points in less than half an hour, the recently started trend was in play. Read WSJ’s Moneybeat blog on what investors have learned from the flash crash. 
“Three years later, and it [the flash crash] didn’t impact anything, the economy continued to grow and the average 401k-IRA guy probably isn’t impacted by it,” said Stein, who advocates investors view the stock market through the lens of a larger perspective rather than day-to-day events and market moves. 

Investors have moved from consumer staples and other defensive sectors that outperformed the first four months of the year into the worst performing sectors, namely technology, energy and basic materials. 

Financials and technology fared best and utilities and consumer staples led the declines on the S&P 500 index SPX +0.19% , which added 3.08 points to 1,617.50, surpassing Friday’s record close.
The Dow Jones Industrial Average DJIA -0.03%  fell 5.07 points to 14,968.89, with 16 of its 30 components declining. 

Dow component Intel Corp. INTC -0.21%  shares edged lower after the chip manufacturer’s McAfee security unit offered to purchase Finland’s Stonesoft Oyj FI:SFT1V +125.89%  for $389 million.
The Nasdaq Composite COMP +0.42%  rose 14.34 points to 3,392.97. 

For every two shares that fell, roughly three gained on the New York Stock Exchange, where 619 million shares traded. Composite volume topped 3 billion. 

The cost of oil rose, with crude futures CLM3 +0.19%  up 55 cents at $96.16 a barrel on the New York Mercantile Exchange.

Moving targets

Humana Inc. HUM +2.11%  rose 2.1% after J.P. Morgan upgraded shares of the provider of Medicare coverage to overweight from neutral. 

Tyson Foods Inc. TSN -3.33%  slid 3.3% after the meat processor reported second-quarter sales and profit below market expectations. 

Shares of Canada’s Barrick Gold Corp. CA:ABX +1.54% ABX +1.75%  climbed along with the price of gold, with futures for June delivery GCM3 +0.36%  up $3.80 at $1,468 an ounce. 

BMC Software Inc. BMC 0.00%  shares were unchanged after the software maker said it had agreed to be purchased for about $6.9 billion in cash by a private investment group led by Bain Capital LLC and Golden Gate Capital. 

Cliff Natural Resources Inc. CLF +5.52%  gained 5.5% after FBR Capital Markets upgraded the iron-ore producer to outperform from market perform. 

In Europe, stock trading volumes were slim with the United Kingdom closed for a public holiday.
Stocks finished last week with a blockbuster session, with the Dow industrials ending at a record close of 14,973.96, a gain of 142.38 points, while the Standard & Poor’s 500 index SPX +0.19%  for the first time closed above 1,600. The gains came after the Labor Department reported Friday that the U.S. economy created more jobs than expected in April and the unemployment rate declined. Also: See lessons from past Dow milestones
Kate Gibson is a reporter for MarketWatch, based in New York.