Finance and Economic

Local builder Clayco Inc. was recognized by the Design-Build Institute of America for its work on the Chevron NorthPark Office Building Project near New Orleans. The project received this year’s national Design-Build Award for exceptional construction of the 300,000-square-foot, fast-tracked Chevron headquarters building.

Chevron moved most of its business operations and a staff of 750 from downtown New Orleans to the new building on the north shore of Lake Pontchartrain at Covington, La., outside the most hurricane-prone area.

Clayco is a real estate development, design and construction firm. It has branch offices in the Chicago and Detroit areas.

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As the economy continues to wobble, Canadian retailers are offering deeper discounts and keeping their stores open longer in hopes of capturing whatever holiday shoppers might be in the market for this year.

Wal-Mart Canada says it’s dropping a "record number" of prices between now and Christmas to help Canadians stay on budget this holiday season.

Sears Canada is offering what it calls "Boxing Day" pricing on a wide range of items this weekend.

The price-cutting comes as a new survey suggests this will be the worst season for holiday shopping since 2005.

Just under six in 10 Canadians say they plan to spend the same amount as they did last year, about one-third plan to spend less and eight per cent plan to spend more, according to TNS Canadian Facts.

"We often hear talk of so-called cautious optimism. But these results suggest now is a time for cautious negativism. Clearly, the floor hasn’t collapsed but it might be time to start looking for cracks," TNS vice-president and research director Michael Antecol said in a statement.

The Toronto-based research firm’s Consumer Confidence Index now stands at 95.5 points. That’s down 2.5 points since last month and down 3.7 points since August cash advance in one hour.

The numbers have slipped in all categories, TNS also said. Consumers are less confident about the present and the future and also say they’re less likely to make a big purchase at this time.

Retailers are responding.

Wal-Mart Canada said it expects to cut prices on more than 18,000 items this month, 20 per cent more price cuts than the year earlier period.

"We know this has been a tough year for Canadians, so we have made every effort to drop our prices and help Canadians make their dollars go farther this holiday season," Walmart Canada president and chief executive officer David Cheesewright said in a statement.

"In every department in our stores, from electronics to toys to housewares to food, we offer everyday low prices as well as special holiday pricing."

Meanwhile, Sears Canada says this weekend’s Boxing Day prices will be available on everything from clothing to electronics.

The department store retailer said it’s also keeping selected stores open later to give customers more time to shop.

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Home Depot Inc posted a higher-than-expected quarterly profit and raised its full-year outlook as the top home improvement chain cut costs to offset weak demand for big-ticket remodeling projects.

Although the company is seeing “some positive signs of stabilization,” Chief Executive Officer Frank Blake warned there was “still a great deal of pressure” in the housing and home improvement markets.

Home Depot and smaller rival Lowe’s Cos Inc have suffered from the prolonged U.S. housing slump. On Monday, Lowe’s said it did not expect a market recovery to begin until the middle of 2010.

Home Depot said net profit fell to $689 million, or 41 cents a share, in the third quarter ended on November 1 from $756 million, or 45 cents a share, a year earlier.

Analysts on average were expecting earnings of 36 cents per share, according to Thomson Reuters I/B/E/S.

Sales fell about 8 percent to $16 low cost payday loans.36 billion, beating the analysts’ average forecast of $16.28 billion.

Home Depot has been quicker to cut costs and constrict inventory levels than Lowe’s, and in some cases has benefited as housing markets improved in regions where it has a heavy presence.

Same-store sales fell 6.9 percent in the third quarter, with those at U.S. stores down 7.1 percent.

For the full year, Home Depot sees earnings of about $1.55 a share from continuing operations before items, down about 13 percent from the prior year. It had earlier forecast a decline of 15 percent to 20 percent.

Home Depot said it still expected sales to fall by about 9 percent this year.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)

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Japan’s trade minister apologized on Monday for disclosing market sensitive third-quarter GDP figures to oil industry executives ahead of its official release, in an embarrassing slip for a government that took power two months ago.

The much-stronger-than-expected third-quarter growth figures caused Japanese bond prices to dip after the official release by the Cabinet Office at 8:50 a.m. (6:50 p.m. EST), although they later recovered as analysts warned the outlook was less rosy.

Masayuki Naoshima, the minister of economy, trade and industry, said that he told industry officials about GDP data because of concerns about the economy and he did not know the data was due later.

“I’m sorry. I honestly didn’t know it was due to be released at 8:50 a.m. so I thought it would be OK to talk about it,” Naoshima told reporters.

“I apologize for causing trouble and I’ll be careful from now on.”

Japan’s economy grew 1.2 percent in the third quarter, its fastest pace in more than two years as stimulus lifted consumer spending and capital spending bottomed out.

It was the first GDP data released after Prime Minister Yukio Hatoyama’s new government took power in mid-September in the wake of an election that ousted the long-dominant Liberal Democratic Party.

The government under the LDP had become more careful with handling the GDP data after a newspaper reported the figures ahead of the release a decade ago, forcing policymakers to confirm the figures.

(Additional reporting by Sumio Ito and Yoko Nishikawa; Writing by Yoko Kubota; Editing by Rodney Joyce)

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China on Tuesday restated its long-standing policy to maintain the basic stability of the yuan at a reasonable and balanced level, after President Barack Obama said he would discuss the currency when he visits Beijing.

Asked about Obama’s comments, Foreign Ministry spokesman Qin Gang said China would keep improving the currency’s exchange rate mechanism with a view to gradually making the yuan more flexible.

Qin added that China hoped the United States, as the most important economy in the world, would pursue a stable fiscal policy to keep the dollar’s exchange rate steady and ensure its own growth and that of other nations.

“I want to make it clear that the United States is the number-one economic entity in the world,” he told a regular news conference.

“We hope that … the United States can overcome the difficulties brought by the international financial crisis and at the same time maintain the medium-term and long-term sustainability of its fiscal policy,” Qin said.

Obama told Reuters in an interview in Washington that he would raise the issue of the yuan, which many economists and U.S. manufacturers consider to be undervalued, when he comes to China next week.

But Obama also said the two countries share a common interest in helping to rebalance the global economy in order to deliver sustainable growth, a view echoed by Qin payday advance.

“If you ask me how relations between the two countries are right now, my first answer is: the economies of China and the United States are mutually related, integrated, dependent on each other and getting closer to each other day by day.”

But there are tensions between the two.

U.S. manufacturers complain that Beijing artificially holds the value of the yuan down to make its exports cheaper and American goods more expensive for Chinese consumers.

Economists say this has led to imbalances in the world economy by contributing to big trade deficits in the United States and trade surpluses in China.

Leaders of the Group of 20 developed and emerging economies have pledged to aim for policies to ease these imbalances.

But China has also been angered by recent controls slapped on some of its imports, and Qin issued a new warning against barriers to commerce.

“We urge the U.S. side to make positive efforts with China to resolve frictions and questions in trade, including acknowledging China’s status as a full market economy and halting some protectionist measures,” Qin said.

(Reporting by Emma Graham-Harrison and Yu Le; Editing by Alan Wheatley and Ken Wills)

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Morgan Stanley’s riskier trading operations have stolen the thunder from its growing brokerage — at least for now.

Strong fixed income sales and trading revenue and improved investment banking underwriting results broke a three-quarter losing streak as Morgan Stanley belatedly joined rivals like Goldman Sachs Group Inc in returning to the black after the collapse of the financial sector a year ago.

The New York-based bank reported third quarter net income of $498 million, or 38 cents a share, beating analysts’ average forecast of 27 cents a share, according to Thomson Reuters I/B/E/S.

Morgan Stanley shares were up 7 percent to $34.80 in afternoon trading on the New York Stock Exchange after earlier touching a 13-month high of $35.00.

In the 2008 third quarter the bank earned $7.7 billion, or $7.38 a share, boosted by a one-time accounting gain from declines in the value of its debt.

Scarred by the collapse that claimed competitors like Lehman Brothers, Morgan Stanley has pledged to play a more conservative hand as it develops its brokerage business.

Co-president James Gorman is set to succeed Chief Executive John Mack — credited with keeping the bank alive during the darkest days of the crisis, but criticized for struggling to manage risk — early next year.

Many analysts view Gorman’s appointment as evidence that Morgan Stanley is trying to dial down the riskier trading business in favor of a steadier stream of income from the wealth management business payday loans with no fax.

MAKING UP GROUND

Morgan Stanley Chief Financial Officer Colm Kelleher said in an interview that the third-quarter results were an “affirmation” that the firm’s strategy was bearing fruit.

The third-quarter rebound came largely because of solid results in trading, a riskier area of the business.

“They made up the ground on the trading side,” said Brad Hintz, an analyst with Sanford C. Bernstein in New York and former treasurer at Morgan Stanley. “The issue that Morgan Stanley faced is they cut too deeply in fixed income and markets came back more quickly than they anticipated.”

Kelleher said during a call with analysts that the firm is about halfway through a hiring spree it initiated earlier this year to restock its trading and sales ranks. Kelleher said more than 400 were expected to be hired.

“It is good that they are starting to see some of the early benefits of that,” said Michael Hecht, an analyst with JMP Securities.

The firm’s institutional securities group, which includes the advisory, underwriting and trading units, posted pre-tax income of $1.3 billion in the quarter. 

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Australia’s central bank signaled it’s prepared to keep raising interest rates and tolerate further appreciation in the nation’s currency to help restrain consumer prices as the economy strengthens.

A “very expansionary setting of policy was no longer necessary, and possibly imprudent,” officials said in minutes of an Oct. 6 meeting, released today in Sydney. Gains in the nation’s dollar, the best-performing this month of the 16 most- traded currencies, “may help contain inflation,” they said.

The minutes drove Australia’s currency above 93 U.S. cents, the highest level in 14 months, as investors bet Reserve Bank Governor Glenn Stevens will boost the overnight cash rate target next month. Stevens unexpectedly raised the benchmark a quarter point to 3.25 percent this month, becoming the first Group of 20 central banker to increase borrowing costs.

“The dollar is well and truly on the way to parity” versus the U.S. currency, said Savanth Sebastian, an economist at Commonwealth Bank of Australia in Sydney. “At this early stage, the Reserve Bank isn’t worried about the currency because their concern is to remove stimulus. Once they get back to a neutral setting and the currency is at parity, they’ll start to look at holding interest rates steady.”

The Australian dollar jumped to 93.11 U.S. cents immediately after the minutes were released from 92.76 cents earlier. It traded at 92.86 cents at 5:12 p.m. in Sydney.

Inflation Threat

Holding rates at their current “very low levels” could threaten the bank’s target of keeping inflation between 2 percent and 3 percent, the Reserve Bank said in the minutes.

Annual core inflation, which excludes food and energy costs, was 4.2 percent in the three months through June, a report showed on July 22. Third-quarter figures will be published on Oct. 28.

Barclays Capital, Citigroup Inc. and National Australia Bank have forecast the Australian dollar will reach parity in six to 12 months.

Investors are certain Stevens will raise the benchmark rate by at least another quarter point on Nov. 3, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange. Chances of a half-point increase next month were 20 percent, the futures showed at 4:28 p.m., down from 26 percent prior to the minutes.

Government Stimulus

Policy makers noted that there was still a possibility the economy’s recent strength was due to the impact of A$42 billion ($39 billion) in government spending and handouts, which “left open the attendant risk that activity might slow as that stimulus faded.”

“It was also likely that the appreciation of the exchange rate would act as a contractionary influence on activity and help contain inflation,” the minutes said.

Philip Lowe, assistant governor at the Reserve Bank, said in Sydney this week the nation’s currency has gained because Australia has “a high return of capital with a lot of investment.”

“We will have a higher average exchange rate than we’ve had over the past couple of decades,” Lowe said on Oct. 19.

Australia’s currency has averaged 72 U.S. cents since being floated in December 1983, according to data compiled by Bloomberg. It has surged 54 percent since hitting a five-year low on Oct. 27 last year.

Stevens said last week that experience “counsels against” an approach where policy makers who cut rates rapidly in response to a threat become “too timid to lessen that stimulus in a timely way when the threat has passed.”

Woolworths Chief

“It would go against history to think the low rates we have at the moment will continue ad infinitum,” Michael Luscombe, chief executive officer of Woolworths Ltd., Australia’s largest retailer, said in an interview.

The benchmark rate will rise above 5 percent if policy makers “determine the economy is overheating or inflation is getting out of control,” Luscombe added.

Australia’s economy “had for some time been noticeably stronger than had earlier been expected,” today’s minutes said.

Gross domestic product rose 1 percent in the first half of this year as consumers increased spending, spurred by the central bank slashing borrowing costs by a record 4.25 percentage points between September last year and April.

Policy makers noted that a “sizeable gap” had opened up between the performance of Australia and other developed economies. “The board had to be mindful of local conditions in setting policy,” the minutes said.

Such commentary was “extremely bullish on rate hikes and there wasn’t too much discussion about currency concerns,” said Commonwealth Bank’s Sebastian. “In years gone by, you would have seen discussion about the impact of the Australian dollar and how it’ll curtail growth.”

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Economy Minister Karl-Theodor zu Guttenberg expressed confidence on Saturday that Germany could address EU concerns about a sale of carmaker Opel to Canada’s Magna, saying they did not put the deal at risk.

The European Commission announced late on Friday that Competition Commissioner Neelie Kroes had written to Guttenberg voicing doubts about Germany’s offer to provide 4.5 billion euros ($6.7 billion) in financial aid for Opel as part of the deal with Magna.

In the letter, Kroes said there were “significant indications” that Germany had made the aid for Opel contingent on Magna being chosen as the winning bidder — a stance that would run counter to EU competition rules.

Speaking to reporters in Berlin on Saturday morning, Guttenberg said the deal was “on track” and voiced confidence that Germany could resolve the questions raised by Kroes.

Asked whether her concerns could doom the sale to Magna, he replied: “No, I don’t believe that.”

Magna, a car parts group whose bid for Opel is backed by Russian investors, had been in competition with private equity investor RHJ International, and before that with Fiat and China’s BAIC, for control of the General Motors unit. RHJ was not immediately available for comment.

But the German government said repeatedly it had a “clear preference” for the Magna bid as it offered Opel the most promising future and would protect German jobs.

It linked its offer of 4.5 billion euros in aid for Opel to a Magna takeover, with Chancellor Angela Merkel promising to intervene, if necessary, to ensure Magna won the bid battle.

Under pressure from Germany, GM chose Magna as its preferred bidder last month. Under a deal that had been expected to be signed this week but was delayed amid EU doubts, GM plans to sell a 55 percent stake in Opel to Magna and Russian state-owned bank Sberbank.

GM would retain a 35 percent stake in Opel under the deal and workers would hold the remaining 10 percent.

ROADBLOCK?

Kroes said GM and the trust set up to keep Opel separate from its U.S. parent’s recent bankruptcy in the United States should be allowed to reconsider the decision to sell to Magna.

“GM and the Opel Trust should be given the opportunity to reconsider the outcome of the bidding process,” Kroes said in the statement.

If GM is forced to reopen the bidding for Opel, or the closing of the deal faces significant delays, Opel could face a cash crunch based on previous projections by the automaker.

“GM is very fragile. An Opel bankruptcy and loss of numerous jobs is a realistic scenario if the sale is stopped,” said Ferdinand Dudenhoeffer, an auto expert at Duisburg-Essen University. 

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Shares of large health insurers slumped on Thursday as a budget report issued on a key U.S. Senate healthcare reform bill fueled investor worries that a health overhaul would gain approval.

Nonpartisan budget analysts said late on Wednesday that a Senate Finance Committee health plan would cost $829 billion and cut the budget deficit by $81 billion over 10 years. The bill would meet President Barack Obama’s desire for a healthcare plan that does not increase the deficit, according to the Congressional Budget Office.

Shares of WellPoint Inc fell more than 7 percent, while UnitedHealth Group Inc, Aetna Inc and Humana dropped more than 4.5 percent, bucking a positive overall market.

The determination of the finance committee bill’s impact on the deficit was seen as a “big stumbling block” for drawing support for the legislation, said Avik Roy, healthcare analyst with Monness, Crespi, Hardt & Co.

With the favorable CBO analysis, Roy said, “the fear is that the bill will actually get through, and that increases the risk to the insurers.”

The Senate Finance Committee will vote on the bill next week following the CBO report.

“The successful CBO score increases the likelihood that a reform bill will pass and it also strengthens the (Senate Finance Committee) bill’s position as the bill that will drive the debate,” Wells Fargo analyst Matt Perry said in a research note.

Pressure on the stocks also may have been coming from news that U.S. Democrats were looking at a possible tax on insurers’ windfall profits as part of reform no fax pay day loans.

The share moves continued the declines since mid-September for health insurance stocks, which have proved extremely sensitive to reform developments in Washington.

“We continue to think managed care stocks will remain in flux until the ‘devils in the detail’ are resolved in final legislation,” Goldman Sachs analyst Matthew Borsch said in a research note.

As the reform legislation has evolved, analysts have raised concerns about the status of “individual mandate” that would require people to buy health insurance. Amendments added to the Senate Finance bill have lowered the financial penalties for people if they choose not to buy health insurance.

With insurers being required to enroll people with pre-existing health conditions, the fear is that healthy Americans will choose to pay any penalties instead of insurance premiums. By losing out on that revenue while paying for coverage of the sick, insurers potentially would be hurt by higher medical costs.

“From the perspective of the insurance companies, if you require that everybody has health insurance, then you are able to counteract that tendency of people to only take coverage when they’re sick,” Roy said.

In the finance committee bill, he said, “the provisions around the individual mandate have been weakened.”

(Reporting by Lewis Krauskopf, editing by Dave Zimmerman and Gunna Dickson)

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Amazon.com Inc is introducing Kindle, its wireless electronic reader, for over 100 countries, including China and most of Europe, intensifying a battle for the burgeoning digital book market.

The move, announced on Tuesday, gives the world’s largest online retailer the widest global reach among its competitors, including chief rival Sony Corp.

The Kindle will sell for $279 in other countries.

Amazon also said it would cut prices for its U.S.-only Kindle by 13 percent to $259 from $299, bringing its cost closer to its rivals. The new price is $100 lower than it was a year ago.

Amazon — which regards the Kindle as a pivotal growth driver — said over 200,000 English-language books from a host of publishers as well as more than 85 international and U.S. newspapers and magazines would be available on the international device, which begins shipping October 19.

“Our vision for Kindle is every book ever printed, in print or out of print, in every language, all available within 60 seconds,” Chief Executive Jeff Bezos told Reuters.

“That’s a multi-decade vision,” said Bezos, visiting a Kindle office in the Silicon Valley city of Cupertino.

Analysts have pondered the likelihood of Amazon developing the Kindle into a tablet-like device for tasks like emailing, texting and surfing the Web, thus competing with devices reportedly being developed by Apple Inc.

But Bezos reiterated his intention to optimize the reading experience, saying the company rejects compromise, whether it be a touchscreen that affects legibility or computer displays that eat up too much power.

At the same time, Amazon is working on making Kindle digital books available on more devices. Besides the Kindle, those books can now be accessed on the iPhone or iPod Touch.

“We want you to read your Kindle books on laptops and smartphones, anything with an installed base,” Bezos said. He said he was not “in principle” against making the works available on rival devices like Sony’s, but was focused on platforms with “large installed bases.”

NO MEAN FEAT

E-readers are expected by some to be the hottest gadget this holiday season [ID:nN01298379] and Bezos said he had “a lot of confidence” that it would be a “great holiday quarter for Kindle.”

Forrester Research estimated 3 million e-reader devices would be sold in the United States in 2009, up from an earlier estimate of 2 million. That could double in 2010, bringing cumulative sales to 10 million by end-2010.

The research group predicts that Amazon will take 60 percent market share in 2009, followed by Sony at 35 percent. 

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