Today's Headlines

Bloomberg:

• U.S. Payrolls Rose Less-Than-Estimated in May; Unemployment Rate Rises to 9.1%. U.S. employers in May added the fewest number of workers in eight months and unemployment unexpectedly rose to 9.1 percent, underscoring Federal Reserve concerns the expansion is failing to boost the labor market. Payrolls increased by a less-than-projected 54,000 last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier. The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- was little changed at 15.8 percent after 15.9 percent in April. The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more rose as a percentage of all jobless, to 45.1 percent from 43.4 percent.
• The pickup in hiring over the past year has failed to lead to a similar acceleration in wages, one reason why U.S. economic growth will continue to be disappointingly slow this year, according to economist Neil Dutta at BofA Merrill in NY. Twelve-month pay increases have been stuck at 1.8% since February and have hovered in a 1.7%-1.9% range since February 2010.
  
• Greece to Get Next Aid Payment in New Bailout. European Union and International Monetary Fund officials agreed to pay the next installment to Greece under last year’s 110 billion-euro ($161 billion) bailout, paving the way for an upgraded aid package that includes a “voluntary” role for investors. “I expect the eurogroup to agree to additional financing to be provided to Greece under strict conditionality,” Luxembourg Prime Minister Jean-Claude Juncker said after meeting with Greek Prime Minister George Papandreou in Luxembourg today. “This conditionality will include private sector involvement on a voluntary basis.” Papandreou agreed to set up an agency to manage an accelerated asset-sale effort and will make “significant” cuts in public-sector employment, according to a statement released today in Athens.
• Euro Gains to Four-Week High Against Dollar After Greece Gets New Aid Plan. The euro rose to a four-week high against the dollar after Greece was approved more assistance to address its debt crisis and a report showed U.S. employers in May added the fewest jobs in eight months. Europe’s shared currency extended its gains after Luxembourg’s Jean-Claude Juncker, who leads the group of euro- area finance ministers, said they agreed to pay the next installment to Greece under last year’s 110 billion-euro ($161 billion) bailout. The U.S. currency dropped to a record low against the Swiss franc as investors sought haven assets after the jobless rate unexpectedly rose to 9.1 percent. “With the strong growth in the European core, the interest-rate differential and the likelihood that you’re going to get another bailout for Greece, it’s a recipe for euro strength,” said Jessica Hoversen, a New York-based analyst at the futures broker MF Global Holdings Ltd.
• Fukushima Water Found to Have More Radiation Than Released Into Atmosphere. The water level in basements and trenches at Tokyo Electric Power Co.’s Fukushima plant rose and may contain more radiation than is known to have been released into the atmosphere in the worst nuclear crisis since Chernobyl. The amount of contaminated water rose to about 105 million liters (28 million gallons) from 100 million liters on May 18, and may start overflowing after June 20, the company known as Tepco said in a statement today. Radiation in the water is estimated at 720,000 terabecquerels, general manager Junichi Matsumoto said at a media briefing in Tokyo.
• Wal-Mart(WMT) Approves $15 Billion Share Repurchase. Wal-Mart Stores Inc. (WMT) renewed plans to buy back as much as $15 billion of its shares, potentially bolstering the Walton family’s control of the world’s largest retailer. The buyback replaces a previous $15 billion repurchase announced June 4, 2010, Chief Financial Officer Charles Holley said today at Wal-Mart’s 41st annual meeting.
• China Lead Smelters May Idle Capacity as Power Shortage Slows Consumption. Lead smelters in China, the world’s largest producer and consumer, may idle capacity as demand slows amid a power shortage and as the nation clamps down on polluting units, according to Beijing Antaike Information Development Co. “Lead demand has been weak and while we haven’t heard of smelters cutting output, many have brought forward their annual maintenance shutdowns, which is essentially the same thing,” said Hu Yongda, an analyst at state-owned Antaike.
• Economist Dennis Gartman Cuts His Gold Investments in Half, Says 'Nervous'.
  

Wall Street Journal:

• Yemen Presidential Palace Shelled, Saleh Injured. Yemeni opposition fighters shelled the presidential palace on Friday, lightly injuring the president and seriously wounding several top officials, according to government officials. The artillery attack occurred around noontime prayers when President Ali Abdullah Saleh and dozens of senior government officials were gathered in the presidential compound's mosque. Three rocket-propelled grenades fired from a rooftop across the street from the palace hit the center of the mosque, a government official said. President Saleh suffered light injuries to the head, the officials said, countering earlier reports by an opposition television station that the president had been killed.
• EA(ERTS) to Test Its Might Online. Electronic Arts Inc. is starting an online service to sell downloadable games directly to consumers, as one of the world's biggest makers of video games steps up a push to offer more of its wares over the Internet, rather than through discs at stores.
• Fed Governor: U.S. Should Go Beyond Basel III on Bank Capital. Federal Reserve Board governor Daniel Tarullo said Friday that U.S. regulators should set additional capital requirements for financial firms as they look to prevent another crisis. One plan under consideration would set enhanced capital requirements about 20% to more than 100% over Basel III, Mr. Tarullo said in remarks prepared for the Peterson Institute for International Economics, a think tank.

Business Insider:

• 6 Jobs Charts You Really Shouldn't Look At If You Don't Want to Lose Your Lunch.
• Revealed: Tawdry Details From The John Edwards Indictment.

Zero Hedge:

• John Paulson Loses Half a Billion in Under 24 Hours. John Paulson's worst nightmare is on the verge of coming true. As reported yesterday, JP is a holder of 34.7 million shares of Sino-Forest, which was halted yesterday after Muddy Waters came out with a report exposing the company as a fraud, and by implication, all the sellside analysts covering the company with a buy rating, not to mention all the funds who had bought into it, as diligenceless monkeys who refuse to actually do their homework and merely follow the leader in the worst example of Wall Street groupthink.

NY Post:

• Businesses Are Afraid to Hire by Charles Gasparino. The problem for the average American worker: Businesses have learned to make money by cutting costs (i.e., jobs) or relocating to China and India. And it's not merely that it's cheaper to operate overseas; a huge part of the problem is the fear that it's going to keep getting more expensive to hire here. Both small-business owners, and analysts who cover these companies tell me that many American businesses would like to stay here, but they see no letup in sight in the endless stream of taxes and regulations coming from an administration most of them consider anti-business.

New York Times:

• China Faces 'Very Grave' Environmental Situation, Officials Say. China’s three decades of rapid economic growth have left it with a “very grave” environmental situation even as it tries to move away from a develop-at-all-costs strategy, senior government officials said Friday. In a blunt assessment of the problems facing the world’s most populous country, officials from China’s Ministry of Environmental Protection delivered their 2010 annual report.

Coyote Blog:

• Outrageous - Hedge Funds Using Obama Administration to Gut Their Short-Selling Targets. Living in Phoenix I know a number of people who work for Apollo (University of Phoenix). They have obviously been appalled by the Obama war on for-profit colleges and the egregiously-flawed report that came out last year. Several have told me they have complained for a while that certain hedge funds were pushing this initiative in order to make money off of short positions on their stock. I thought this was a bit paranoid, but now the accusation is coming from third parties, even those on the Left:

Seeking Alpha:

• ECRI Weekly Leading Economic Index: Sixth Week of Declining Growth. (graphs)

San Francisco Chronicle:

• Greek Debt Plan May Trigger Downgrades, Contagion, SocGen Says. Involving private-sector investors in measures to alleviate Greece's debt crunch risks triggering credit downgrades and higher bond yields for the nation and its peers, according to Societe Generale SA. "We fear that rating agencies would take note of the private participation, which they will interpret as a reduced support from European Economic and Monetary Union partners," Vincent Chaigneau, head of rate strategy in London, and Ciaran O'Hagan, head of European rate strategy in Paris, wrote in an investor report yesterday. "This would lead to another wave of rating downgrades of non-core sovereigns."

Reuters:

• Service Sector Growth Picks Up in May: ISM. The pace of growth in the services sector picked up modestly in May while gauges of new orders and employment climbed, according to an industry report released on Friday. The Institute for Supply Management said its services sector index rose to 54.6 last month from 52.8 in April. The reading came in just above economists' forecasts for 54.0, according to a Reuters survey. The new orders component rose to 56.8 from 52.7, while the employment gauge climbed to 54.0 from 51.9. The prices paid index eased to 69.6 from 70.1, its lowest level since December.

AP:

• Bahrain Police Open Fire at Protestors in Capital. Bahraini police fired tear gas and rubber bullets at protesters marching toward the landmark Pearl Square in the country's capital Friday, two days after authorities lifted emergency rule.

Telegraph:

• OPEC Hints It Could Raise Oil Supplies for First Time in Four Years. Members of Opec, the oil cartel, are seriously considering raising supply for the first time since 2007 in order to dampen prices that are currently above $100 per barrel.

Le Figaro:

• Netflix Inc.(NFLX), the DVD and online film-rental service, plans to expand in Europe. The company plans to start operating in Latin America by the end of this year and in Spain in 2012. Netflix is also interested in the U.K. and France, and may enter those markets at the end of 2012 or the start of 2013.