Today's Headlines

Bloomberg:

• ECB Keeps Rate at 1% as Euro-Area Recovery Stalls. The European Central Bank left interest rates on hold as the region’s economic slump deepens. ECB policy makers meeting in Barcelona today kept the benchmark interest rate at a record low of 1 percent, as predicted by all 58 economists in a Bloomberg News survey. “The latest data suggest the euro area is slowly sliding toward a deeper recession,” said James Nixon, chief European economist at Societe Generale SA in London. At the same time, “with overnight rates already very low, it is hard to see how cuts in interest rates would meaningfully boost growth.” Austerity measures aimed at taming the sovereign debt crisis have pushed the Netherlands and Spain back into recession and prompted French voters to revolt against President Nicolas Sarkozy with an election looming on May 6. The ECB, which has already pumped more than 1 trillion euros ($1.3 trillion) into the banking system, may be reluctant to add to stimulus as it presses governments to take responsibility for the crisis.
• European Power Volumes Declines in April, Broker Group Says. European power handled by London-based brokers declined 2.8% in April from a year earlier, according to the London Energy Brokers' Association. Volumes dropped to 535.7 terawatt-hours from 551 in April last year, the industry group said in its monthly report sent by e-mail today. Volumes in Germany, the region's largest market, dropped 2% to 351 terawatt-hours while 53 terawatt-hours were bought and sold in the UK, it said.
• EU Elections Spur Uncertainty, El-Erian Says: Tom Keene. European elections are driving up market uncertainty as austerity measures have slowed economic growth while failing to resolve the region’s crisis, according to Pacific Investment Management Co.’s Mohamed El-Erian. “There is much more awareness of what needs to be done,” El-Erian, the chief executive officer of the world’s largest manager of bond funds, said in an interview on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “That’s the good news. The bad news is you’re doing it in a very difficult political context.”
• US Services Slowdown Signals U.S. Growth May Be Cooling: Economy. Service industries in the U.S. expanded less than projected and consumer confidence weakened, signaling the world’s largest economy may be cooling. The Institute for Supply Management said today its non- manufacturing index fell to a four-month low of 53.5 in April from 56 in March. The median forecast of economists surveyed by Bloomberg News was 55.3. A reading above 50 in the Tempe, Arizona-based group’s gauge signals expansion. The Bloomberg Consumer Comfort Index fell to a two-month low last week. “The economy has recently lost some momentum, and a weaker services sector is completely consistent with that,” said Shugg, whose forecast for the ISM gauge was among the lowest. “Consumer spending is softening somewhat.” Today’s report showed the ISM non-manufacturing survey’s measure of new orders decreased to 53.5, the lowest in six months, from 58.8. The employment gauge dropped to 54.2, the weakest this year, from 56.7 in the prior month.
• Consumer Comfort in U.S. Declines to Lowest Level in Two Months. Consumer confidence dropped last week to a two-month low as more Americans grew concerned about their personal finances. The Bloomberg Consumer Comfort Index fell to minus 37.6 in the week ended April 29 from minus 35.8, surrendering gains that had lifted it to a four-year high last month. Views on finances sank to the lowest point since January and more households said it was a bad time to buy needed items.
• Announced US Job Cuts Rise 11% From Year Ago, Challenger Says. Employers in the U.S. announced more job cuts in April than a year earlier, led by education and government agencies. Planned firings rose 11 percent to 40,559 from April 2011, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc.
• Jobless Claims in U.S. Decline More Than Forecast. Fewer Americans than forecast filed applications for unemployment benefits last week, easing concern the job market was taking a turn for the worse. Jobless claims fell by 27,000 to 365,000 in the week ended April 28, a one-month low, from a revised 392,000 the prior period, Labor Department figures showed today in Washington. The median forecast of 46 economists surveyed by Bloomberg News called for 379,000 applications.
• Oil Falls on 'More Uncertain' European Economic Outlook. Oil tumbled the most in almost a month as European Central Bank President Mario Draghi said the euro area’s economic outlook has become “more uncertain.” Prices dropped as much as 2.4 percent as Draghi said the region’s economic forecast is subject to downside risks, though the ECB still expects a gradual recovery this year. The central bank held its benchmark interest rate at a record low of 1 percent. Oil’s loss accelerated after data showed U.S. service industries expanded at a slower pace than projected in April. “There are still a lot of worries about Europe,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “Some of the latest comments from the ECB are indicating downside risk but they are not looking to do anything at this time.” Crude for June delivery fell $2.26, or 2.1 percent, to $102.96 a barrel at 12:02 p.m. on the New York Mercantile Exchange. It touched $102.65 earlier in the biggest intraday drop since April 4. Prices have declined 7.3 percent in the past year.
• Iran Embargo Impossible to Meet as Ships Need Its Oil. Europe’s oil embargo on Iran is having unforeseen consequences in the shipping market, making it almost impossible to determine if vessels are using fuel that violates the sanctions. Supplies from Iran are a “vital blending component” to make ship fuel, known as bunkers, according to Barclays Capital. The nation accounted for about 8 percent of bunkers exported last year to Asia, the largest market, and about a third of the supply at Fujairah in the United Arab Emirates, the Middle East’s biggest refueling port, Barclays estimates.
• GM(GM) First-Quarter Profit Falls as Losses in Europe Widen. General Motors Co. (GM), the world’s largest automaker, said first-quarter profit slid 61 percent on widening losses in Europe. Net income declined to $1.32 billion from $3.37 billion a year earlier, Detroit-based GM said today in a statement.
• Buffett Trails S&P 500 for Third Straight Year. Berkshire Hathaway Inc. (BRK/A) shareholders missed out on better returns from the Standard & Poor’s 500 Index by sticking with Chairman Warren Buffett after each of his last three annual meetings. Berkshire fell 2.4 percent from the firm’s April 30, 2011, meeting through yesterday, compared with the 2.8 percent advance in the S&P 500. (SPX) This year’s gathering, planned for May 5 in Omaha, Nebraska, concludes three years in which Berkshire climbed about 32 percent, trailing the S&P 500’s gain of around 60 percent.

Wall Street Journal:

• China Activists See Crackdown for Dissident's Escape. China has ramped up pressure on supporters of blind activist Chen Guangcheng, including one ally who was told on Thursday that she would be confined to her home, amid fears of further retaliation for Mr. Chen's high-profile escape from house arrest. Some allies and relatives of Mr. Chen were detained in the immediate days after his escape from home imprisonment in China's eastern Shandong province on April 22. That pressure was renewed with his emergence from the U.S. Embassy in Beijing on Wednesday.
• Warnings Signs Rise for Big Lenders in Asia. When Indonesian tanker operator B.L.T. froze payments on $2 billion of debt earlier this year, blaming a global economic slowdown, the default hit some of the world's biggest banks.
• Minxin Pei: Communist China's Perilous Phase. Disunity among the ruling elites and the rising defiance of dissidents signal that one-party rule could be nearing its end.
  

CNBC.com:

• 'Taxmaggedon' Deal Unlikely Before Year End: Orszag. Congress is unlikely to reach a deal before the end of the year that would derail the coming "taxmaggedon," when several pivotal tax cuts expire, former White House budget director Peter Orszag said. The former head of President Barack Obama's Office of Management and Budget — and current vice chairman of global banking for Citigroup — contradicted consensus belief that Washington will be able to avoid what Federal Reserve Chairman Ben Bernanke has called the “fiscal cliff.” Instead, he said an agreement is unlikely between now and the presidential election, nor will a deal get done during the lame duck congressional session following. Any deal likely won't come until 2013, Orszag said.
• Copper at One-Week Low as Global Growth Worries Weigh. Copper fell to a one-week low on Thursday on uncertainty about U.S. economic growth and after a bond sale by Spain failed to ease investor concerns the heavily indebted nation may hinder euro zone recovery, denting the outlook for metals demand. Three-month copper on the London Metal Exchange slipped to $8,228.50 at 1410 GMT, down 0.9 percent from a $8,305 close on Wednesday. It earlier fell to its lowest level since April 26 at $8,211 a metric ton (1.1023 tons). Prices, which had rallied by more than 14 percent by early February, have since shed 5 percent, trimming the year's gains to around 9 percent. "There is still a whole host of uncertainties in the market. There are troubles in the euro zone, and with non-farm payrolls out of the U.S. tomorrow, there is a lot of scope for volatility in commodity markets," said Societe Generale analyst Robin Bhar.
• Why Small Business Owners Are Hesitant to Hire.
  

Business Insider:

• Scott Brown is Destroying Elizabethe Warren, And She's Getting Blasted for Claiming Native American Blood.
• Albert Edwards: This Is The Biggest Bubble In Recent History, And It's Heading For The Mother Of All Hard Landings.
• Draghi Just Destroyed Dreams of Near Term ECB Action.
• The iPhone 5 Will Be Taller, Thinner, And Have A 4-Inch Screen.
  

Zero Hedge:

• Previewing The First of Many Greek Elections.
• Non-Manufacturing ISM Slides, Posts Biggest Miss In 12 Months. (graph)
  

New York Times:

• U.S. Retail Sales Slow Unexpectedly. The 19 chains tracked by Thomson Reuters reported a thin 0.8 percent increase in sales at stores open at least a year, missing the 1.5 percent gain that analysts were expecting. Combined with strong sales at the start of the year, the lackluster April results indicated that an early burst of consumer spending did not last long. “While projections were that consumer spending would continue to accelerate, there are signs that it may be slowing,” said Alison Jatlow Levy, a retail strategist at the consulting firm Kurt Salmon.
• Societe Generale Profit Drops 20% in First Quarter.
  

BGR:

• Apple's(AAPL) 'iTV' Might Not Launch Until 2014. Rumors surrounding the imminent launch of an Apple-branded HDTV have been swirling for the better part of a year, and while some industry watchers expect the “iTV” to launch as early as this summer, one analyst suggests that we’re still more than a year away from seeing Apple launch an iOS-powered television. JP Morgan analyst Mark Moskowitz said on Thursday that his firm does not believe Apple will release an HDTV in the near future.

Huff Post:

• The Fed's Jelly Donut Policy by David Einhorn. A Jelly Donut is a yummy mid-afternoon energy boost. Two Jelly Donuts are an indulgent breakfast. Three Jelly Donuts may induce a tummy ache. Six Jelly Donuts -- that's an eating disorder. Twelve Jelly Donuts is fraternity pledge hazing. My point is that you can have too much of a good thing and overdoses are destructive. Chairman Bernanke is presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn't giving us energy or making us feel better. Instead of a robust recovery, the economy continues to be sluggish. Last year, when asked why his measures weren't working, he suggested it was "bad luck."

Reuters:

• Schroders Fears Euro Zone Hit to Investor Demand. Blue chip investment manager Schroders is bracing for a downturn in investor appetite as the euro zone crisis escalates, after net inflows in its asset management arm helped cap a fall in first quarter profit. Chief Executive Michael Dobson told Reuters in an interview that the company had a strong quarter in its institutional business and a turnaround in retail flows after two quarters of outflows, but it was wary of events in Europe. "You can trace investor demand pretty closely to what's happening in the euro zone and, below, reflected in equity markets," he said. "There are signs of a slowdown. The impact of market uncertainty is seen most immediately in the retail sector, but it also impacts institutional clients."
• Spanish Banks' Toxic Asset Transfer To Be Voluntary. The transfer of Spanish banks' toxic real estate assets into holding companies to value and sell them off will be on a voluntary basis, the economy ministry said on Thursday. Spain, to reassure investors the ailing lenders won't need another rescue, said last week the banks would park their problem assets into liquidation structures within weeks but sources had so far said the move would be compulsory.
• Fed's Plosser Offers 'Optimistic' View of U.S. Growth. The U.S. economy will likely grow at a 3 percent pace this year and next, pushing unemployment down and keeping inflation at or above the Federal Reserve's 2 percent target, Philadelphia Fed President Charles Plosser said on Thursday. That view from Plosser, a leading inflation-focused hawk at the U.S. central bank, suggests a policymaker poised to push for a change to the Fed's near-zero interest rate policy sooner than its current projection of late 2014.
• Alpha Natural(ANR) Cutting Coal Output, Targets. Coal miner Alpha Natural Resources Inc posted a wider-than-expected quarterly loss and cut its 2012 production target, but it forecast that the market for steelmaking coal would improve later this year. The company said on Thursday that because of weak demand from power utilities for its thermal, or steam coal, it would further cut production and double exports of coal used to generate electricity.

Telegraph:

• Iran 'imported over £350 million of weapons in three years'. Iran imported weapons worth over £350 million in the space of three years despite being the target of a United Nations arms embargo, Oxfam will disclose on Thursday.
• Debt Crisis: Live.
  

Globe and Mail:

• Google's(GOOG) Splashes Out $200 Million to Promote 'Premium' Channels. In a flashy presentation to advertisers, YouTube promoted its new channels of original programming, while pledging to spend $200-million to help market them. That's roughly twice what the Google Inc.-owned video site has spent launching some 100 channels of niche-oriented programming. The channels are an ambitious initiative from YouTube, approximately halfway through its rollout.

Shanghai Daily:

• Housing Index Posts Fall in April. SHANGHAI'S existing housing index fell again in April, extending its weakness for the seventh straight month. The index, which tracks price variations of previously-occupied homes, lost 2 points, or 0.09 percent, from March to 2,575 last month, the Shanghai Existing Index Office said yesterday. On an annual basis, the index lost 16 points, or 0.59 percent, weakening for the second consecutive month. "We've noticed a rather slack market sentiment last month as home seekers continued to expect further cuts after the government vowed again to stick to its property curbs. At the same time, an increasing number of home owners have begun to trim their discounts amid a rebound in buyers' inquiries since March," said Lu Bei, an analyst at the office. "Very likely, the market will be dominated soon by a prevailing wait-and-see sentiment."

CRI English:

• Chinese Authorities Target Journalists Involved in Blackmail. Chinese authorities have announced a three-month special campaign against journalists involved in blackmail or demanding pay-offs in news reporting. The crackdown from May 15 will target so-called news reporting and blackmail journalism activities by fake press entities or journalists, and kickback-oriented practices by accredited media organizations and people.