Thursday, January 31, 2013

Today's Headlines

Posted by Gary .....at 3:22 PM
Bloomberg: 
  • Monte Paschi Rating Cut by S&P on Concern Losses May Increase. Banca Monte dei Paschi di Siena SpA (BMPS), the Italian lender facing a government investigation stemming from money-losing structured deals, had its credit rating cut by Standard & Poor’s. Losses on the transactions “may be higher than initially anticipated” and demonstrate “a risk of management weaknesses,” S&P said today in a statement. The Siena-based lender had its long-term grade cut to BB from BB+ and remains on watch negative, which means it may be downgraded again. 
  • Spain Lifts Short-Selling Ban on Stocks After IBEX 35 Rallies. Spain lifted a ban on short-selling stocks as the benchmark IBEX 35 Index (IBEX) rallied and the country’s banks took steps to repair their balance sheets. Authorities won’t extend restrictions that expired today, the stock market regulator, known as CNMV, said in an e-mailed statement today. Short-sellers sell borrowed shares with plans to buy them back later at a lower price, a practice some politicians and investors blame for roiling markets.
  • European Stocks Trim Month Gain. European stocks fell for a second day, paring their biggest monthly advance since July, as companies from AstraZeneca Plc to Banco Santander SA (SAN) slid after reporting earnings. AstraZeneca lost 3.2 percent after the drugmaker forecast that profit and sales will slide this year. Santander and Royal Dutch Shell Group Plc both declined more than 2.5 percent as fourth-quarter earnings missed analysts’ estimates. The Stoxx Europe 600 Index (SXXP) retreated 0.5 percent to 287.22 at the close, as more than two stocks fell for every one that rose.
  • OPEC January Crude Production Falls to 15-Month Low in Survey. OPEC crude oil production declined to a 15-month low as Saudi Arabia reduced output because of waning demand from consumers, a Bloomberg survey showed. Output in the 12-member OPEC slipped 525,000 barrels, or 1.7%, to an average 30.479 million barrels a day this month from a revised 31.004 million in December, the survey of oil companies, producers and analysts showed. The December total was revised 430,000 barrels a day lower mostly because of the change to the Saudi number. "OPEC members are cutting because of concern about demand and a surplus in stockpiles and are responding to a lack of market interest," said Sarah Emerson, managing director of Energy Security Analysis Inc. in Wakefield, Massachusetts.
  • Consumer Comfort in U.S. Falls for Fourth Straight Week. Consumer confidence fell again last week, raising the risk that the payroll tax increase that kicked in at the start of the year will make it difficult to sustain a pickup in spending. The Bloomberg Consumer Comfort Index dropped to minus 37.5 in the period ended Jan. 27, the fourth consecutive decrease and the lowest reading since October. 
  • Business Activity in U.S. Grew More Than Forecast in January. Business activity in the U.S. expanded more than forecast in January, a sign manufacturing picked up at the start of the year. The MNI Chicago Report’s business barometer rose to 55.6 this month, the highest since April, after 50 in December. The median forecast of 48 economists surveyed by Bloomberg was 50.5.
  • Jobless Claims in U.S. Rose 38,000 Last Week to 368,000. Claims for U.S. unemployment benefits increased more than forecast last week, nearly erasing a slide in the prior two weeks and reflecting the difficulty of adjusting the figures for swings at the start of a year. Initial jobless claims rose 38,000 in the week ended Jan. 26, the most since Nov. 10, to 368,000, the Labor Department reported today in Washington. Economists forecast 350,000 filings, according to the Bloomberg survey median.
  • Troubled Companies Seen Winning Lifelines in ‘Fragile’ Market. While U.S. icons from Hostess Brands Inc. to Eastman Kodak Co. (EKDKQ) succumb to bankruptcy, credit markets awash with cash are allowing many of the riskiest companies to stay afloat, pushing off restructurings and raising the stakes for investors pursuing higher returns. Junk-bond sales soared to a record last year and speculative-grade borrowers raised the most in loans since the 2007 peak, while business bankruptcies fell 22.4 percent to 57,500 compared with 2011. Chapter 11 cases, where companies reorganize or sell assets, dropped by 12.4 percent, according to data compiled from court records by Epiq Systems Inc. At the same time, storied U.S. brands struggling with legacy liabilities and outdated products proved vulnerable.
  • Gross Says Credit-Based Markets Running Out of Energy. Bill Gross, manager of the world’s biggest bond fund, said investors are increasingly at risk as global financial markets run out of energy and time. “The countdown begins when investable assets pose too much risk for too little return,” Gross wrote in his monthly investment outlook posted on Newport Beach, California-based Pacific Investment Management Co.’s website today. The record monetary stimulus of the Federal Reserve, triggering near-zero interest rates, has crippled savers and prior business models that were based on a positive real return, he said. Real growth of the economy has suffered in the process as net interest margins at banks fall, insurance companies struggle to make returns and pension funds are increasingly underfunded. 
  • Biggest IPO Since Facebook(FB) Tests Pfizer’s(PFE) Pigs and Dogs Strategy. Pfizer Inc. is taking its animal- health unit public in the biggest U.S. initial offering since Facebook Inc., a bet that growing affluence means more spending on caring for livestock and pets. Pfizer’s Zoetis Inc. is seeking to sell 86.1 million shares today for $22 to $25 each, giving the unit a market value of about $11.8 billion at the midpoint of the range, regulatory filings show.
  • InBev Sued by U.S. to Block $20 Billion Grupo Modelo Deal. The U.S. sued to block Anheuser- Busch InBev NV (ABI)’s proposed $20.1 billion purchase of the half of Grupo Modelo SAB it doesn’t already own, saying the deal would hurt competition and raise prices. Shares of both companies plunged after the Justice Department filed a complaint today in federal court in Washington, arguing the transaction violates antitrust law because it would eliminate the “substantial head-to-head competition” that currently exists between AB InBev and Modelo.
  • Immelt-Led Advisory Council on Jobs Allowed by Obama to Expire. President Barack Obama won’t renew the charter of an advisory council on jobs that he formed two years ago with General Electric Co. (GE) Chief Executive Officer Jeffrey Immelt as its chairman. The 27-member President’s Council on Jobs and Competitiveness was part of the administration’s business outreach at a time when the country was dealing with the longest stretch of unemployment rates above 9 percent since monthly records began in 1948.
Fox News:
  • UPS(UPS) Delivers Disappointing 4Q Results, 2013 Guidance. Hit by a $3 billion pension charge, economic bellwether UPS (UPS) said Thursday it swung to a fourth-quarter loss of $1.75 billion and the shipping giant’s adjusted profit and 2013 outlook trailed Wall Street’s expectations.
  • Hagel faces tough questioning from McCain, others during confirmation hearing. Chuck Hagel faced tough questioning from senators Thursday as he tried to convince at least five Republicans to back his nomination for Defense secretary -- but lawmakers, including fellow Vietnam War veteran Sen. John McCain, dug in their heels during a tense confirmation hearing. Another Republican lawmaker accused Hagel of "appeasing our adversaries." But McCain's position on Hagel could be a significant bellwether for his nomination. The two veterans once had a close relationship during their years in the Senate, but politics and Hagel's opposition to increased troop numbers in Iraq divided the two men. It was the troop surge in Iraq that became a flashpoint between McCain and Hagel during Thursday's hearing. McCain repeatedly tried to get Hagel to answer whether he was "right or wrong" when he once called the troop surge a "dangerous foreign policy blunder." 
CNBC: 
  • Main Street Remains Pessimistic, Sees Little 2013 Hiring: Survey. While there's evidence suggesting the jobs market is slowly recovering, a large chunk of small-business owners remain pessimistic and expect the economy to remain stagnant or worsen in 2013, according to a new survey of 600 small firms. Most respondents also said they plan to trim costs, and 87 percent said they did not plan to hire additional employees.  
Zero Hedge: 
  • Short-Term Palliatives And The 5 Terrible Tendencies Of Government. The short-term palliatives we are currently pursuing go against everything a long-term oriented society should aspire to achieve. Today’s policies encourage spending over saving, reward the profligate over the prudent, and support the failing at the expense of the successful. The antidote now being dispensed puts us squarely in uncharted territory in which the risks are outside the range of historical experience. There is no obvious exit and no path to normalcy.
Reuters: 
  • Syria warns of "surprise" response to Israel attack. Syria warned on Thursday of a possible "surprise" response to Israel's attack on its territory and Russia condemned the air strike as an unprovoked violation of international law. Damascus could take "a surprise decision to respond to the aggression of the Israeli warplanes", Syrian ambassador to Lebanon Ali Abdul-Karim Ali said a day after Israel struck against Syria. "Syria is engaged in defending its sovereignty and its land," Ali told a website of the Lebanese militant group Hezbollah. 
AP: 
  • MSNBC Criticised For Editing of Gun Hearing Video. MSNBC invited viewers Wednesday to draw their own conclusions about whether the parent of a Connecticut school shooting victim was heckled at a legislative hearing but didn't address criticism that it aired a deceptively edited video of the event. The NBC-owned cable news network found itself under attack for its editing practices less than a year after three employees of NBC or an NBC-owned station lost their jobs over the editing of a 911 call in the Trayvon Martin case.
Financial Times:
  • Chinese cities put tax heat on steel mills. Cash-strapped local governments in China have started demanding taxes from the country’s steel mills up to two years in advance, an unusual practice that highlights how desperate some cities have become for funds. Chinese mills, which produce nearly half the world’s steel, have traditionally been cash cows for local governments because of the tax revenues they create. But last year, as China’s economy slowed, profits at the country’s biggest steel mills dropped 98 per cent from the previous year, according to the China Iron and Steel Association. Losses reported by unprofitable mills increased more than sevenfold. Yet that did not stop municipalities in northern and northeastern China – also feeling the pinch from the economic downturn – from pressuring some mills to pay tax up to two years ahead of time, according to Zhang Changfu, CISA secretary-general. Unco-operative companies have found themselves subject to audits, investigations, and often big fines.
Handelsblatt:
  • Germany's opposition Social Democratic Party won't support Chancellor Angela Merkel's plan for a fifth euro-area bailout for Cyprus, citing people in the SPD. Some lawmakers from Merkel's CDU, as well as FDP coalition partner, may vote against the plan.
Xinhua:

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