Wednesday, April 24, 2013

Today's Headlines

  • German Ifo Sentiment Fell After Winter Chilled Recovery: Economy. German business confidence fell for a second month in April after winter weather hindered the recovery in Europe’s largest economy, adding to signs that the European Central Bank may cut interest rates. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 104.4 from 106.7 in March. Economists in a Bloomberg News survey forecast a decline to 106.2, according to the median of 44 estimates. 
  • Pimco Reduced Its Holdings of Spanish, Italian Bonds, Balls Says. Pacific Investment Management Co. cut its holdings of Spanish and Italian government debt starting last month after a rally in the securities, according toAndrew Balls, the London-based head of European portfolio management. “We’ve been reducing credit risk in our portfolios and in recent weeks we’ve cut Italy and Spain,” Balls said today in a telephone interview. “It’s a function of levels and fundamentals. The spreads look reasonable but not as attractive as they were.”
  • Bird Flu Strain Spreads as Taiwan Reports First H7N9 Infection. Taiwan confirmed an H7N9 bird flu infection in a traveler returning to the island from China, the first incidence of the killer virus spreading outside the mainland. A 53-year-old Taiwanese man tested positive for the latest strain of avian flu after a business trip to the eastern city of Suzhou and returning to Taiwan via Shanghai, Minister of Health Chiu Wen-ta said at a briefing in Taipei yesterday. The patient, who is in critical condition in an isolation room, didn’t come into contact with birds and poultry, Chiu said. The first discovery of the virus outside China, 10 years after an outbreak of the Severe Acute Respiratory Syndrome, or SARS, may lead to increased scrutiny of travelers into and out of the country.
  • Chinese Contracts Reach Four-Year High as Economy Slows: Options. The cost of hedging against swings in Chinese equities has risen to the highest level in almost four years relative to other emerging markets on signs the world's second-largest economy is losing momentum. The difference in implied volatility for the iShares FTSE China 25 Index Fund and the iShares MSCI Emerging Markets Index Fund has more than doubled to 5.12 since Feb., based on data compiled by Bloomberg on three-month contracts with an exercise price closest to the shares. That's the biggest gap since August 2009 for the measure of options costs.
  • LG Electronics Profit Plunges 91% Amid Stagnant TV Demand. LG Electronics Inc. (066570), the world’s second-largest television maker, posted a 91 percent drop in first-quarter profit as a stagnant market hurt TV sales. The shares fell.
  • Jones Group to Close 170 Stores While Trimming 8% of Workforce. Jones Group Inc. (JNY), the owner of the Jones New York, Nine West and Anne Klein fashion brands, will close 170 stores and cut 8 percent of its workforce after first- quarter profit trailed analysts’ estimates.
  • Senate Will Pass Online Tax Bill This Week, Reid Says. The U.S. Senate will pass a bill this week that will let states collect sales taxes from retailers outside their borders, said Senate Majority Leader Harry Reid. Reid, a Nevada Democrat, blamed a “handful” of senators for delaying a final vote on the measure, which attracted 74 supporters on a procedural vote April 22.
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  • 21 people killed in social unrest in China's Xinjiang. Clashes in China's western region of Xinjiang have left 21 people dead, including police officers and social workers, a provincial government official said. Gun fights broke out in Bachu county after police went to search the home of locals suspected of possessing illegal knives, a report on government-run news website Tianshan Net said. The report said 15 of those killed were either police or social workers, including 11 members of China's Uighur ethnic minority, who live mainly in Xinjiang. A further six "gang members" were reportedly shot dead in the violence, while eight more were arrested. A provincial government official said these people were Uighurs but did not confirm their identity. The report said an investigation showed the gang members had been plotting to carry out "terrorist activities", and branded the fighting a "violent terror incident".

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