Wednesday, December 01, 2010

Today's Headlines

Posted by Gary .....at 3:07 PM

Bloomberg:
  • Companies in U.S. Added 93,000 Jobs in November, ADP Says. Companies in the U.S. boosted payrolls more than forecast in November, propelled by increased hiring at small businesses, data from a private report showed today. Employment increased by 93,000, the most since November 2007, after a revised 82,000 rise in October that was almost double the initial estimate, according to figures from ADP Employer Services. The median projection of 40 economists surveyed by Bloomberg News called for a 70,000 gain last month. Small firms added more workers than at any time since the recession began in December 2007. “There’s just a feeling that maybe we’ve turned a corner” in the labor market, Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said in a conference call with reporters. “It looks to me as if hiring is beginning to pick up. I do expect these employment numbers to get firmer” in 2011, he said.
  • Italy, Spain Lead Drop in Debt Risk on ECB Bond Buying Bets. Italy and Spain led a decline in the cost of insuring against losses on European government debt on speculation the European Central Bank will boost bond purchases to calm markets. Credit-default swaps on Belgium, Portugal and Ireland also fell from record high levels, helping to push down the region’s benchmark index of sovereign swaps from an all-time high. A gauge of subordinated bank debt risk dropped from a 20-month peak. Investors are hedging bets bonds will fall after ECB President Jean-Claude Trichet signaled policymakers may step up their response to the region’s debt crisis when they meet tomorrow. The ECB bought Irish and Portuguese government bonds today, according to traders with knowledge of the transactions. Credit-default swaps on Italy tumbled 41.5 basis points to 226.5, and Spain decreased 46 to 318, according to data provider CMA. Belgium declined 13 basis points to 192, Greece dropped 36.5 basis points to 928.5, Ireland was down 48 at 558, while Portugal was 63 lower at 479. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments declined 12 to 189. The Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers fell 10.5 basis points to 161 and the subordinated index dropped 27 to 284.5, according to JPMorgan Chase & Co. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings declined 25 basis points to 501. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings decreased 5.5 basis points to 112, JPMorgan prices show.
  • Fed Says U.S. Economy Gains Strength in 10 Out of 12 Regions. The Federal Reserve said the economy gained strength across much of the U.S. as hiring improved, manufacturing expanded and retailers anticipated a stronger holiday shopping season. Five Fed banks, including Boston and San Francisco, said the economy grew “at a slight to modest” rate, while five others, including New York and Chicago, reported a “somewhat stronger pace of economic activity.” Conditions were reported as “mixed” in the Philadelphia and St. Louis regions.
  • Employers in U.S. Announce Most Job Cuts in Eight Months, Challenger Says. Employers in the U.S. announced plans in November to cut 48,711 jobs, the most in eight months, as government agencies trimmed payrolls. Compared with the same month last year, planned firings dropped 3.3 percent, according to Chicago-based Challenger, Gray & Christmas Inc. This month’s downsizing marks the smallest year-over-year decline since May 2009 when job cuts increased by 7.4 percent from a year earlier.
  • U.S. Manufacturing Expands for 16th Straight Month. Manufacturing in the U.S. expanded for a 16th consecutive month in November, a sign the world’s largest economy is gaining traction as the year draws to a close. The Institute for Supply Management’s factory index was little changed at 56.6 after 56.9 in October, the Tempe, Arizona-based group said today. “Businesses are starting to feel better about the outlook and so they’re willing to spend more on investment as well as to hire,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “We had strong growth early in the year, a little bit of a hiccup in the middle and now things are starting to come back again.” The ISM’s U.S. new orders index eased to 56.6 from 58.9, while the production index fell to 55, the lowest level since June 2009, from 62.7. The employment gauge was little changed at 57.5 from 57.7, and the index of export orders dropped to 57 from 60.5. The measure of orders waiting to be filled held at 46 and the index of prices paid fell to 69.5 from 71. The inventory index increased to 56.7 from 53.9, while a gauge of customer stockpiles rose to 45.5 from 44.
  • Fed Names Recipients of $3.3 Trillion in Aid During Crisis. The Federal Reserve, under orders from Congress, today named the counterparties of about 21,000 transactions from $3.3 trillion in aid provided to stem the worst financial panic since the Great Depression. Bank of America Corp.(BAC) and Wells Fargo & Co.(WFC) were among the biggest borrowers from one program, the Term Auction Facility, with as much as $45 billion apiece. Some aid went to U.S. units of foreign institutions, including Switzerland’s UBS AG, France’s Societe Generale and Germany’s Dresdner Bank AG.
  • Fannie, Freddie Spar With Regulators on Foreclosures. Federal banking regulators said they are pushing lenders to suspend foreclosure proceedings while distressed borrowers seek new mortgages. Acting Comptroller of the Currency John Walsh said in testimony prepared for a congressional hearing today that his agency is directing national bank servicers to suspend foreclosures for borrowers actively seeking to qualify for loan modifications.
  • Commodities Climb to Two-Week High on 'Positive' Global Economic Reports. Commodities jumped to a two-week high as higher-than-estimated job growth in the U.S. private sector and expanding Chinese and European manufacturing bolstered optimism in the global economy. The Reuters/Jefferies CRB Index of 19 raw materials jumped 1.7 percent to 306.63 at 11:45 a.m. New York time, the highest level since Nov. 12. Grains and industrial prices led the rally. Wheat soared as much as 7.9 percent, and cotton rose more than 3 percent.
  • Carry Trade Losses Rise to Most in Two Years Amid Europe Sovereign Crisis. Foreign-exchange losses from carry trades climbed to the highest level in more than two years as hedge funds and other large speculators unwound bets that the euro will strengthen amid Europe’s sovereign-debt crisis. Royal Bank of Scotland Plc’s index for carry trades, whereby investors tap cash where borrowing costs are low to invest in higher rates elsewhere, fell 9.7 percent in November, the biggest drop since October 2008.
  • U.K. Manufacturing Expands at Fastest Pace in 16 Years.
  • European Banks Dominated Use of Fed's Commercial Paper Program. The U.S. subsidiaries of European financial institutions, led by Zurich-based UBS AG and Brussels- based Dexia SA were among the largest users of a government program to provide emergency short-term funding to U.S. companies and banks during the credit crisis. Six European banks were among the top 11 companies that sold the most debt overall to the the Commercial Paper Funding Facility. They sold a combined $274.1 billion, according to data made public today by the U.S. central bank. UBS sold $74.5 billion, the most among all borrowers. The largest U.S.-based user was insurer American International Group, selling $60.2 billion. UBS’s figure of $74.5 billion represents the company’s total sales over the life of the program. The bank’s CPFF borrowings peaked at $37.2 billion, an amount the firm rolled over, or re-sold at maturity, once. Other companies rolled over debt in the program as well.
  • iPhone is Most Desired Smartphone in U.S., Nielsen Says.
  • GM(GM), Ford(F) U.S. Sales Rise as SUV, Truck Demand Increases. General Motors Co., Ford Motor Co. and Chrysler Group LLC all reported improved sales in November as demand for pickups and sport-utility vehicles pushed the industry toward matching its fastest sales pace of the year. GM’s deliveries in the month climbed 11 percent to 168,739, the Detroit-based company said today in a statement. Sales of its Chevrolet Equinox and GMC Terrain SUVs gained 60 percent. Ford’s sales rose 20 percent to 147,338, fueled by a 55 percent boost in sales of the Edge SUV. Chrysler and Nissan Motor Co. both reported light-truck gains as they boosted results.

Wall Street Journal:
  • IBM Claims Breakthrough in Laser-Based Chips. A race to transform computers with laser-based communications is accelerating, with International Business Machines Corp. the latest to claim breakthroughs in chips that send data at blazing speeds using pulses of light.
  • Glow From Solar Factories Fails to Match Michigan Town's Hopes.
  • Erdogan Vents Fury at Cable Claims. Prime Minister Recep Tayyip Erdogan of Turkey suggested Wednesday the U.S should fire diplomats who reported claims in leaked State Department cables that he and his family are corrupt, and said he planned to take legal action against them. In a sometimes furious televised address at the start of an investment conference in Ankara, Mr. Erdogan said, "My friends in the judiciary and we are working to do what is necessary about these diplomats. We spoke to the U.S. They did apologize, but it is not enough. The U.S. should do what is necessary about these diplomats."
  • ECB, Goldman(GS), GE(GE) Sought Help From the Fed.
CNBC:
Business Insider:
Zero Hedge:
FrontPageMag.com:
PCWorld:
Politico:
  • House Climate Panel to Be Axed. House Republicans will scrap the committee set up by Speaker Nancy Pelosi to investigate global warming, the panel’s top Republican announced Wednesday. Rep. Jim Sensenbrenner (R-Wis.) made official what many had already expected — the GOP majority will axe the Select Committee on Energy Independence and Global Warming, which Pelosi created in 2007.
  • Obama Reverses on Offshore Drilling. The Obama administration will reverse its decision and not allow drilling off the Atlantic and Pacific coastlines and the eastern Gulf of Mexico for at least another seven years, sources have confirmed to POLITICO.
USA Today:
Reuters:
  • L-3(LLL) CEO Says Considers Acquisitions, Buybacks. L-3 Communications Holdings Inc Chief Executive Michael Strianese said on Wednesday his company is still actively looking for acquisitions but will also consider ensuring shareholder value through share buybacks.
  • FCC Chief Backs Some Rationing of Internet Traffic. Internet service providers would be allowed to ration web traffic on their networks under a strategy unveiled by the top U.S. communications regulator that no longer focuses solely on open access. Federal Communications Commission Chairman Julius Genachowski proposed banning the blocking of lawful traffic but allowing Internet providers to manage network congestion and charge consumers based on Internet usage.
  • Fed's Bullard: Europe a Wake-Up Call for U.S. The debt situation in Europe is a "wake-up call" for the United States to get its long-term fiscal situation under control, a top Federal Reserve official said on Wednesday.
IrishTimes.com:
  • Concern on Debt Contagion Deepens. Global concern about the debt crisis rocking the euro zone mounted today, with Washington sending a top US Treasury envoy to Europe and G20 officials discussing the turmoil in a conference call. A day after investors pushed the risk premiums on Spanish and Italian government debt to new highs, the bond spreads of countries on Europe's southern periphery narrowed and the euro steadied on speculation that the European Central Bank could unveil new anti-crisis steps at a meeting tomorrow. But calmer markets failed to remove deep worries about contagion in the 16-country euro region that has pushed European policymakers onto the defensive and forced them to search for new ways to stabilise their 12-year-old currency project.
CBCNews:
  • CBC Pushes 'Anti-American Melodrama': WikiLeaks. U.S. diplomats in Ottawa wrote to Washington that the CBC pushes "insidious negative popular stereotyping" with "anti-American melodrama" in its entertainment TV programs, according to documents to be released by the website WikiLeaks.

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