Today's Headlines

Bloomberg:

• S&P 500 Pares Drop on Greek Poll. U.S. stocks reversed losses as a Greek opinion poll showed support for the largest pro-bailout party and a report indicated the International Monetary Fund has started discussing contingency plans for a rescue of Spain. The Standard & Poor’s 500 Index slipped 0.3 percent to 1,309.66 at 12:49 p.m. in New York, trimming an earlier drop of 1.1 percent. The index is down 6.3 percent in May, poised for its worst month since September. The Dow Jones Industrial Average erased a decline of as much as 103 points. A Greek opinion poll before June 17 elections showed New Democracy, the largest pro-bailout party, leading Syriza, which calls for the cancellation of the country’s bailout terms. Of 1,128 people surveyed by Marc SA for Athens-based Alpha TV, 26 percent said they’d vote for New Democracy, 24.3 percent for Syriza and 12.5 percent for the Pasok party, which also supports the bailout program.
• Italian Leaders Press for German Action to Fight Crisis. Italy’s prime minister and central bank chief pressed Germany to back more aggressive efforts to snuff out the escalating debt crisis, setting up a south-north showdown over how to stabilize the 17-nation euro economy. Warning that six decades of European integration are at stake, Italian Prime Minister Mario Monti called on German Chancellor Angela Merkel to take steps to halt the financial rot before a backlash builds against budget cuts. Monti and Bank of Italy Governor Ignazio Visco pushed Germany to give up its opposition to direct euro-area aid for hard-hit banks. “Countries that are at the core of the system and which have had the huge merit of instilling the culture of stability to the European Union in the first place, most notably Germany, should really reflect deeply but quickly,” Monti said by video link to an European Union conference in Brussels today. “Europe should really accelerate the efforts, as the European Commission is doing, in order to limit the contagion.”
• ECB's Paramo Says Spain Has Room On Bank Recapitalization. European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said Spain has room for maneuver in recapitalizing its banks through its Fund for Orderly Bank Restructuring. “The government has front-loaded the issuance program this year so there is some room in case of need for public funds through the FROB,” Gonzalez-Paramo, 53, said in an interview in Frankfurt today, his final day at the ECB. “There is now progress on the external evaluation of the banking-sector needs and these will be known in one month’s time.”
• Euro Break-Up Firewalls Difficult to Build in East, Capital Says. Eastern European policy makers would struggle to build firewalls against contagion from a disorderly break-up of the euro because of short-term debt owed to western parent banks in foreign currencies, Capital Economics Ltd. said. In a worst-case scenario following a potential Greek exit from the euro, eastern European nations may need to resort to International Monetary Fund aid, Neil Shearing, chief emerging- markets economist at London-based Capital, wrote in an e-mailed note today. Strategies such as the Vienna Initiative and swaps with the European Central Bank have “significant barriers” as western lenders are “in the eye of the storm,” he wrote.
• Announced U.S. Job Cuts Jump 67% From Year Ago, Challenger Says. Job cuts announced in the U.S. jumped in May by the most in eight months, led by computer companies. Planned firings surged 67 percent from May 2011 to 61,887, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. It marked the fourth year-over-year increase so far in 2012. Employers have announced 245,540 reductions since Jan. 1, 20 percent more than a year earlier, the report said.
• U.S. Labor Market Cools As Jobless Claims Rise: Economy. The number of Americans applying for unemployment benefits rose to a one-month high and companies hired fewer workers than forecast, casting doubt on the vigor of the labor market. First-time claims for unemployment insurance payments increased by 10,000 to 383,000 in the week ended May 26, Labor Department data showed today. Private employment climbed by 133,000 in May, Roseland, New Jersey-based ADP Employer Services said. The median estimate of 39 economists surveyed by Bloomberg News called for an advance of 150,000.
• Economy In U.S. Expanded Less Than Previously Estimated. Gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate, revised Commerce Department figures showed today in Washington. The report also showed corporate profits rose at the slowest pace in more than three years and smaller wage gains at the end of 2011.
• Business Activity in U.S. Unexpectedly Grew at Slower Pace. Business activity in the U.S. expanded in May at the slowest pace in more than two years as orders and production cooled. The Institute for Supply Management-Chicago Inc. said today its barometer decreased to 52.7, the lowest since September 2009, from 56.2 in April. Readings greater than 50 signal growth. Economists projected the purchasing managers’ gauge would rise to 56.8, according to the median of 55 estimates in a Bloomberg News survey. While demand for automobiles continues to fuel factory output, the debt crisis in Europe and a slowdown in China may cause some businesses to cut back on spending and hiring.
• Goldman's(GS) Blankfein To Testify as Gupta Trial, US Says. Goldman Sachs Group Inc. (GS) Chief Executive Officer Lloyd Blankfein will testify at the insider- trading trial of the bank’s former director Rajat Gupta, a prosecutor said.
• India Growth Slows to 9-Year Low as Rupee Drops to Record. India’s economic growth weakened to a nine-year low last quarter, hurt by an investment slowdown that has undermined the rupee and jeopardized Prime Minister Manmohan Singh’s development agenda. Bonds climbed and stocks fell. Gross domestic product rose 5.3 percent in the three months ended March from a year earlier, compared with 6.1 percent in the previous quarter, the Central Statistical Office said in a statement in New Delhi today. The median of 31 estimates in a Bloomberg News survey was for a 6.1 percent gain.
• Romney Calls Solyndra A 'Symbol of Failure' for Obama. Presumptive Republican presidential nominee Mitt Romney visited the closed facilities of Solyndra LLC, the solar-panel manufacturer that went bankrupt after receiving a $535 million loan guarantee, and called the company a “symbol of failure” for the Obama administration. Romney, 65, spoke today outside the factory Solyndra constructed with government funds at its headquarters in Fremont, California, terming it “the Taj Mahal of corporate headquarters.” The campaign didn’t disclose the speech location until Romney arrived. “This building, this half-a-billion dollar taxpayer investment, represents a serious conflict of interest on the part of the president and his team,” Romney said. The former Massachusetts governor has repeatedly criticized the Obama administration’s decision to extend a $535 million loan guarantee to Solyndra, saying it was part of a pattern of rewarding companies and people that supported him with taxpayer dollars. The family foundation of Obama fundraiser George Kaiser was Solyndra’s biggest investor.

Wall Street Journal:

• IMF Begins Talk On Spain Contingency Plans - Sources. The European department of the International Monetary Fund has started discussing contingency plans for a rescue loan to Spain in the event that the country fails to find the funds needed to bailout its third-largest bank by assets, Bankia SA, people involved in the handling of the Spanish crisis said Thursday. Both the EU and IMF want to avoid having to bailout Spain at all costs, the people said, but initial planning is under way given that the country is struggling to raise a EUR10 billion shortfall in funds to bail out Bankia.

CNBC.com:

• Most Retailers Top Sales Estimates for May. Most retailers posted solid sales gains in May, with chains such as Target, TJX, and Limited topping analysts' estimates for the month. "Retailers rebounded from a soft April turning in solid May same-store sales results this morning fueled by decent weather conditions, robust Mother's Day selling and enticing Memorial Day weekend promotions," said Ken Perkins of Retail Metrics, in a research report.
• Teamsters Invest Heavily in Private Equity. Hoffa made this blistering criticism of GOP presidential nominee Mitt Romney and his career in private equity at Bain Capital on May 7th: “He represents everything that is wrong with our financial system. He made his money as CEO of Bain Capital by destroying U.S. businesses, sending good-paying American jobs overseas and filling his pockets with millions while putting workers out on the street.” But it turns out that the Teamsters themselves make plenty of money from private equity through investments made by their regional pension funds, which are independently administered.
• Worried Spaniards Sending Billions of Euros Abroad.
  

Business Insider:

• Presenting the Most Unemployed City in Every State.
• Epic Retail Sales Plunge in Greece.
  

Zero Hedge:

• The Monster Has Awakened.
• The 4 Greek Election Scenarios.
• Equities Underperform as Credit Roundtrips Ending Miserable May for Europe.
  

Le Monde:

• The French government is preparing a bill that will restrict companies' ability to cut jobs for purely financial reasons, Arnaud Montebourg, the minister for Productive Recovery, said in an interview. "If certain companies accepted less spectacular profitability levels, these jobs could be saved," Montebourg said.
  

De Tijd:

• The European Commission has "serious doubts" over the breakup plan of Dexia SA. One sticking point for the commission is the structure of the deal around Dexia's French unit, Dexma. A possible stalemate looms between France and Belgium over temporary guarantees.