NEW YORK (AFP) – Wall Street stocks vaulted higher Monday as investor sentiment was helped by a Group of 20 decision to maintain stimulus measures to hasten economic recovery from recession.
The Dow Jones Industrial Average rose a hefty 203.52 points (2.03 percent) to end at 10,226.94, logging its best closing level since October 3, 2008.
The blue-chip index earlier soared to an intraday peak of 10,228.23.
The Nasdaq composite jumped 41.62 points (1.97 percent) to 2,154.06 and the broad-market Standard & Poor's 500 index added 23.77 points (2.22 percent) to 1,093.07. The two indices are still below their October 19 closing levels.
Market sentiment was lifted by a weekend decision by G20 finance ministers to stick to emergency stimulus support measures despite signs that the world was emerging from a long financial maelstrom, analysts said.
It acted as a "impetus," said Patrick O'Hare of Briefing.com as the ministers "tempered the market's concerns about stimulus measures being withdrawn too soon."
Together with last week's US Federal Reserve announcement that interest rates will likely remain at exceptionally low levels for an extended period, it "effectively sent a message that easy money policies will remain the rule and not the exception," O'Hare said.
Elizabeth Harrow of Schaeffer's Investment Research said the market was also boosted by equity news as "positive developments for a pair of Dow members fanned the bullish flames."
She cited a near reported deal between conglomerate General Electric and cable operator Comcast to create a joint venture to own GE's NBC Universal valued at about 30 billion dollars.
Adding to market optimism was fast-food titan McDonald's reporting a 3.3 percent rise in same-store sales for October amid robust results from around the globe which offset a weak month on the home front, she said payday loans.
Analysts at Charles Schwab & Co said the rally underscored "resiliency in the face of a disappointing October labor report" on Friday.
Wall Street stocks ended with slender gains Friday as investors shrugged off the labor report showing US unemployment jumping to 10.2 in October for the first time since 1983 despite narrowing job losses.
Some analysts say the market is gaining confidence slowly that an economic recovery will take root soon. Others say last week's rally after two weekly losses remains fragile.
The broad US stock market is up more than 66 percent from its March 9 lows. Among gainers was GE, rising 3.39 percent to 15.85 dollars, and Comcast, gaining 3.84 percent to 15.15 dollars.
US giant Kraft Foods fell 0.93 percent to 26.53 dollars as it launched a hostile 9.8-billion-pound (16.4 billion dollar) bid for Cadbury which the British confectioner rejected as "derisory."
The cash and stocks offer matches the terms of Kraft's informal bid in September but changes to currency and stock market values since then made the formal bid less than the original offer of 10.2 billion pounds.
Cadbury's US shares rose 0.42 percent to 50.71 dollars.
Aerospace group Northrop Grumman gained 2.98 percent to 53.93 dollars following its decision to sell its advisory services unit TASC.
Telecom operator Sprint Nextel jumped 20.35 percent to 3.43 dollars on reports it might be close to spending an additional one billion dollars to build out its fourth-generation wireless network.
Bonds were mixed. The yield on the 10-year US Treasury bond fell to 3.486 percent from 3.503 percent on Friday and that on the 30-year bond rose to 4.401 percent from 4.394 percent. Bond yield and prices move in opposite directions.
(Reuters) – Stock index futures pointed to a higher open on Wall Street on Monday, with futures for the S&P 500 up 0.9 percent, Dow Jones futures up 0.8 percent and Nasdaq 100 futures up 0.8 percent at 5:10 a.m. EST.
Finance ministers and central bankers of the Group of 20 on Saturday pledged to prepare strategies to end emergency support for their economies, but to keep the aid flowing until recovery was assured.
Kraft Foods Inc (KFT.N) is expected to formalize on Monday a hostile takeover bid for Britain's Cadbury Plc (CBRY.L) valued at roughly 10.2 billion pounds ($16.7 billion), sources familiar with the situation said on Sunday.
General Electric Co (GE.N). and Comcast Corp (CMCSA.O) have agreed on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far, a source familiar with the matter said on Sunday.
Sprint Nextel Corp (S.N) is preparing to pump at least $1 billion more into Clearwire Corp., the Wall Street Journal reported on Sunday, citing two people familiar with the matter. Sprint's joint venture partners on Clearwire, a group which includes Comcast Corp (CMCSA.O), Intel Corp (INTC.O), Time Warner Cable Inc (TWC.N) and Bright House Networks LLC, are prepared to kick in another $500 million, the paper reported.
The auto sector will be in the spotlight after data showed China's passenger cars sales in October surged 75.8 percent from a year earlier, extending the explosive growth in recent months as government incentive policies continued to lure customers loan until payday.
Oil rose more than $1 to above $78 a barrel on Monday, recouping some of the previous session's near 3 percent loss, on fears a powerful hurricane would cut U.S. oil and gas supplies and also lifted by the falling dollar.
The dollar fell on Monday after the G20 meeting and U.S. unemployment data did little to alter the view that U.S. rates would stay low for a while, supporting shares and the Australian and New Zealand dollars.
Japan's Nikkei average (.N225) gained 0.2 percent on Monday, while European shares were up 1.5 percent in morning trade, led by financial institutions such as insurer Allianz (ALVG.DE) as well as commodity-related stocks like Rio Tinto (RIO.L) as metal and oil prices rose.
On the earnings front, Electronic Arts (ERTS.O), Tesoro Corp. (TSO.N) and Rockwell Automation (ROK.N) featured among the few companies due to report results on Monday.
U.S. stocks rose 3 percent for the week after ending Friday's session slightly higher, shrugging off government data showing the unemployment rate hit 10.2 percent -- the highest in 26-1/2 years.
The Dow Jones industrial average (.DJI) gained 17.46 points, or 0.17 percent, to end at 10,023.42. The Standard & Poor's 500 Index (.SPX) rose 2.67 points, or 0.25 percent, to 1,069.30. The Nasdaq Composite Index (.IXIC) added 7.12 points, or 0.34 percent, to close at 2,112.44.
(Reporting by Blaise Robinson; Editing by Hans Peters)
ZURICH (Reuters) – Authorities in Britain and Australia have requested information from UBS after the Swiss bank agreed in August to disclose some 4,450 client names to settle a U.S. tax case, the bank confirmed on Sunday.
UBS said in a note to its third-quarter financial statement, published last week, that tax and regulatory authorities in a number of jurisdictions had requested information on cross-border wealth management services provided by UBS and other banks.
The British and Australian tax authorities confirmed that investigations were underway, Swiss newspaper Sonntag reported on Sunday, but said they declined to give further details.
UBS only said in its statement that the British and Australians had requested information on offshore services from UBS and other Swiss and non-Swiss financial institutions.
"UBS is cooperating with these information requests strictly within the limits of financial privacy obligations under Swiss law. It is premature to speculate on the outcome of any such inquiries," it said.
The Sonntag newspaper said Credit Suisse declined to comment on whether it had also been contacted no fax payday loan.
The U.S. investigation into how UBS helped rich Americans hide money in Switzerland has hurt the bank's reputation and prompted offshore customers to withdraw assets, with the bank reporting last week that third-quarter net outflows totaled 36.6 billion Swiss francs ($36 billion).
The Sonntag newspaper said that the Swiss tax authorities would on November 17 reveal the precise criteria determining which UBS client data is handed over to the U.S. authorities.
That is also the day that the bank is due to present its new strategy at an investor day, which Sonntag said would include a focus on growth in Asia and a return to profitability in its slimmed-down investment bank.
A UBS spokeswoman declined to comment on the details of the investor day.
($1=1.015 Swiss francs)
(Reporting by Emma Thomasson; Editing by Greg Mahlich)
OMAHA (AP) Berkshire Hathaway,Warren Buffett’s company, said Friday that its third-quarter profit tripled as the improving economy and stock market boosted the value of its derivative contracts.
Berkshire said it generated $3.2 billion, or $2,087 per share, in net income. That’s up significantly from last year’s $1.1 billion, or $682 per share.
Most of the swing in earnings is related to unrealized gains in the value of Berkshire’s derivatives, some of which are tied to credit defaults and some of which are tied to equity markets fast cash.
Berkshire’s insurance companies performed well, but its other operating companies struggled.
Berkshire owns more than 60 subsidiaries and it has major investments in such companies as Coca-Cola and Wells Fargo.
(Reuters) – California Public Employees' Retirement System, knew it was paying uncompetitive rates on foreign-exchange trades as early as 2003, the Wall Street Journal said, citing a consultant who advised the largest U.S. public pension fund.
Last month, California's attorney general sued State Street Corp (STT.N), contending that State Street Bank and Trust overcharged Calpers and the California State Teachers' Retirement System for the costs of executing foreign currency trades since 2001.
State Street has denied any allegations of wrongdoing.
"We were hired in the third quarter of 2003 by Calpers to write a report on FX pricing from their custodians," Neil Record, chief executive of UK fund firm Record Currency Management (RECL guaranteed payday loans.L), told the Journal.
"We submitted that report at the end of 2003 ... and we found uncompetitive pricing," the paper quoted Record as saying.
Record declined to tell the Journal the name of the banks that his firm audited.
Calpers declined to specifically comment to the paper on the issue. Reuters could not immediately reach the pension fund for comment regular U.S. business hours.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Lisa Von Ahn)
LONDON (Reuters) – The Bank of England said on Thursday it would expand its quantitative easing program by 25 billion pounds ($41.5 billion) to help kick-start Britain's recession-hit economy.
The increase brings the central bank's total asset-buying program to 200 billion pounds, the equivalent of more than 14 percent of Britain's economic output.
The BoE also left interest rates unchanged at a record low of 0.5 percent, as expected.
Two-thirds of analysts had predicted the BoE would expand its asset-buying scheme, but opinion had been split on whether the increase would be 25 billion or 50 billion pounds payday loans.
Conflicting signals over the health of Britain's economy had made this week's decision a difficult one to call. Britain's economy contracted unexpectedly in the third quarter, making the current recession the longest since records began more than 50 years ago, but more forward-looking surveys have painted a brighter picture.
(Editing by Mike Peacock)
Bank of England expands quantitative easing, holds rates steady
Filed at 6:33 a.m. ET
FRANKFURT (AP) -- German carmaker BMW AG said Tuesday its net income fell 74 percent in the third quarter as it continued to be affected by the global economic downturn.
BMW, the world's biggest luxury car company by sales, said net income for the period amounted to 78 million euros ($115 million), down from 298 million euros in the July-September period of 2008.
BMW's share price slid 7.1 percent to 31.20 euros in Frankfurt after the earnings announcement as net income came in well below the consensus estimate of around 150 million euros.
The Munich-based company said it delivered 7.2 percent fewer cars during the July-September period and that its revenue fell 6.6 percent to 11.8 billion euros from 12.6 billion euros in the July-September period of 2008.
''Although there are some emerging signs that the lowest point of the current economic downturn has been passed, the BMW group only expects the situation to stabilize at a low level during the last quarter of 2009,'' BMW said in its report.
''For the time being at least, it cannot be assumed that an enduring recovery has taken hold. Nevertheless the BMW group has performed well despite the difficult business environment,'' the company said.
BMW said that total car sales would likely be between 10-15 percent lower than in 2008 provided there are no further economic setbacks. The company's brands include its namesake BMW cars, the Mini compact and the super-luxury Rolls-Royce brands. The company also builds BMW motorcycles.
Despite the likely sales decline, BMW said it expected to report a positive result for the financial year 2009 and to maintain its leading position in the premium segment bad credit payday advance.
BMW said net income for the first nine months of the year fell 96 percent to 47 million euros from 1.3 billion euros in the January-September period of 2008 as the company saw a large pretax loss on its automobile business during the period.
Revenue for the first nine months declined 10 percent to 36.2 billion euros from 40.4 billion euros.
Automobile group production for the first nine months of the year was 21 percent lower at 907,429 compared to almost 1.2 million cars in the same period a year ago.
Motorcycle production was also 21 percent lower during the first nine months of 2009 at 65,909 from 83,845.
The company said it had also reduced its work force by 5.3 percent to 98,358 employees at September 30, compared with 103,850 employees at the end of September 2008.
Observers are looking forward to the group's new models including a Mini coupe and a new Rolls Royce model called the Ghost, which should add to future revenue.
BMW has said the order book on the new super-luxury Ghost -- which is a step below the top of the line Phantom -- is developing well. It hopes to start selling that new car next year.
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NEW YORK – Wall Street giant Goldman Sachs Group Inc. is reportedly in talks to buy tax credits from Fannie Mae, a government-controlled mortgage financier.
The Wall Street Journal reported Monday the credits, tied to incentives to boost investments in low-income housing, would allow Goldman to lower its tax bill.
A spokesman for Goldman Sachs declined to comment on the report. Its shares rose $1.46 to $171.63 in premarket trading, while Fannie Mae shares were stead ay $1.08.
Goldman has quickly recovered from the peak of the credit crisis last fall and is again reporting multibillion dollar quarterly profits. The New York-based investment bank earned $3.03 billion during the third quarter.
Goldman has been under the microscope for its resilience as stock and credit markets bounce back faster than the consumer banking sector and the broader economy.
It received $10 billion in government aid last fall and changed its regulatory status to access government funding. It quickly repaid the $10 billion this year as its profits bounced back.
Fannie Mae, which was taken over by the government last fall at the peak of the credit crisis, is still in a dire situation business card. It continues to need funding from the government and its operations are closely monitored by its regulator, the Federal Housing Finance Agency.
Because Fannie Mae continues to lose money, it has been unable to take advantage of the credits to reduce its tax burden.
Selling the credits would enable Fannie Mae to pocket some much-needed cash and reduce the amount it has to borrow from the Treasury Department, the Journal reported. It could also provide Fannie Mae with fresh resources to finance more mortgages, according to the report.
Fannie Mae and fellow mortgage giant Freddie Mac were taken over by the government last fall and the pair own or back most mortgages in the U.S. As the housing market collapsed and mortgage defaults skyrocketed, the companies faced billions of dollars in losses and were unable to remain afloat without major government support.
PARIS — Two avatars, Leto Yoshiro and Enchant Jacques, met in the virtual world of Second Life in 2005. They married online the same year and built a house together on an island they had brought out of the waves that covered much of that world.
In real life, Leto was a film producer from Michigan, Enchant an accountant from England. In 2008, after three years together for the couple, several real-life encounters and thousands of hours logged in, Leto died of liver failure while awaiting a transplant.
About six months later, the island where they had lived, along with everything on it, was erased under the terms of service that Leto had signed with Linden Lab, the company that created the platform for Second Life. It had been bought in his name in Linden dollars — on Friday, $1 bought 259 Linden — and Enchant decided she could not pay the fees to maintain it. All that remains are a few objects of which she had copies.
“We had an island we shared,” Enchant said during an interview. For privacy reasons, she asked that neither her real name nor Leto’s be published. Referring to Second Life, she said, “S.L. did leave it there longer than I expected, but one day it was just gone.”
Change the names and the platform, and almost everybody online will someday face a situation like this. While an e-mail account or a Facebook profile is not quite as spectacular as a mansion with a view of the virtual sea, it is equally erasable — and its legal status as property just as problematic — after the person who created it has died.
And we are not just talking sentimental value. The worth of the U.S. virtual goods market is expected to surpass $1 billion this year, according to a report released last month by analysts at Inside Virtual Goods. The global market is thought to be five or six times as much.
What is more, virtual worlds and social networks like Facebook are not so far apart, and they are getting closer all the time. FarmVille, a game on Facebook where people can manage virtual crops together, said it had 62 million users last month. It started in June.
But after you buy the farm, what happens to the one you built?
Off-line, the post office does not send someone to burn your correspondence after an obituary appears in the paper. The deed and title company does not send a crew to tear down your home. But online, under the agreements that users accept, that can be the default setting.
“When you have a real, tangible sword or gold coin, you can have an exclusive right to that object and the law can recognize that,” said Greg Lastowka, a law professor at Rutgers University in New Jersey who is writing a book on property rights and virtual goods. “But when you have the mediation of the network software and the owner of the virtual environment, they have an interest as well. They’re caught in the middle.”
By their very names — MySpace, YouTube — companies promote a sense of ownership about content that users create. But control of digital assets is often disputed, and the mediators — whether they provide e-mail services, social networking or virtual real estate — have a big say.
“Access and control are the two big levers,” said Devan R. Desai, a visiting fellow at the Center for Information Technology Policy at Princeton University in New Jersey and professor at the Thomas Jefferson School of Law in California. “Assuming it’s yours, can you access it, and how easy is it to move it around?”
Access was the problem that Lance Cpl. Justin Ellsworth’s family had after he was killed in Falluja, Iraq, in late 2004. Based on the terms of service he had agreed to, Yahoo refused to give the family Mr. Ellsworth’s password or access to his correspondence. A court finally ordered Yahoo to hand over the documents in 2005, which it did, but no definitive ruling on the status of such digital assets was made.
There are good reasons for companies to deny access and erase accounts in the event of unfortunate circumstances bad credit pay day loans. One is privacy. While terms-of-service agreements may favor the providers, they are also designed to protect e-mail and other content from prying eyes.
Until now, companies have responded in an ad hoc manner, trying to protect themselves from liability even as they have changed at the request of users, often going beyond contractual obligations under pressure from the community.
“There is a low grumble,” said Lilian Edwards, a professor at the law school of the University of Sheffield in England, adding that she expected change to come through “an accumulation of good practice.”
After the Virginia Tech shootings in 2006, for example, Facebook realized it needed to change the way it handled users’ deaths and created a way to memorialize profiles, so that friends and family members could continue to visit them and grieve together, posting condolences and thoughts. Before that, presenting a valid death certificate led to erasure, a common practice among other service providers as well.
Sometimes, when real-world deaths meet online environments, the result is less gracious. When a Chinese teenager known as Snowly died of a stroke in late 2005 after spending three consecutive days in a game, her fellow players on World of Warcraft, a virtual world, decided to hold an online memorial. Dozens gathered to pay their respects, and the service was going as planned, until it was attacked by a rival group, and the mourners’ avatars were massacred.
“People were pretty angry,” Mr. Lastowka said.
There are a couple of ways to resolve the question of who has access to what when a person dies. One is for everybody to name a digital executor, who will receive a person’s latest passwords when a death occurs. At the Digital Beyond, a clearinghouse for information about what happens to virtual assets posthumously, the array of services that help pass on one’s digital traces is visible, and growing. The solution is quiet and effective — but if the executor enters an account with the name and password of the deceased without the knowledge of the service provider, that entry may constitute identity fraud, Mr. Desai said.
He said there was another approach: Each time someone created an account, the service provider would ask the user what they wanted to have happen to it at death — erasure or access — and if the choice was access, to name an executor.
“I think we’re heading in that direction,” Mr. Desai said. “It’s an easy way to address this issue on a large scale.”
On a larger scale, the stakes are pretty high. Beyond the users who generate content, and their potential heirs, society at large is putting its own history into ephemeral new media.
“By starting to think this through and set up a better, cleaner system, we’ll enhance what’s arguably one of the most amazing moments in documenting individual histories,” Mr. Desai said.
Michael Wesch, cultural anthropologist at Kansas State University, has studied how new media are changing the way people relate to each other and thinks there is great potential for the traces left behind to speak to future generations.
In one future he imagined, the dead themselves might become avatars: “Computers may gather all those traces, and my son could get online, and have interactions with a computer-generated entity that would simulate what I would be like,” he said. “We’ve had a lot of court cases in the past about how best to preserve our cultural heritage,” Mr. Wesch said. “The future battles could very well be about this type of information and how it’s handled.”
WASHINGTON, Oct. 29 (Xinhua) -- The U.S. recession remained "alive and acute" despite the economy recording its strongest growth in two years, said Treasury Secretary Timothy Geithner on Thursday.
"Unemployment remains unacceptably high for every person out of work. For every family facing foreclosure, for every small business facing a credit crunch, the recession remains alive and acute," Geithner said in testimony before the U.S. House Financial Services Committee.
The Commerce Department reported Thursday that its first estimate of gross domestic product (GDP) in the third quarter showed growth at a seasonally adjusted 3.5 percent from the prior quarter.
The GDP increase ended four consecutive quarterly contractions and was the strongest expansion since the third quarter in 2008, when a US subprime mortgage crisis triggered a global financial crisis that dragged the world economy into the worst recession since 1930s payday advance loans.
The latest unemployment rate stands at 9.8 percent with expectations that it will reach 10 percent in the near future.
"After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the U.S. economy is moving in the right direction. However, this welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered," the White House said in a statement after the release of the third quarter GDP figure.
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