Finance and Economic

OTTAWA

A round of confidence-building corporate deals supported global stocks Tuesday, despite fresh tightening measures in China as inflation there jumped to a three-year high and another savage credit rating downgrade of Greece.

Over the past two months, the economic news flow has turned distinctly negative, particularly from the U.S., and many investors think the surge in share prices in the early part of the year may have been overdone.

Some relief came from corporate deals that prompted investors to look for potential takeover targets. In particular, news that Avis Budget has agreed to buy its European counterpart Avis Europe in a $1 billion deal has helped fuel hopes that further corporate activity will emerge in the days to come, especially now that many companies have shored up their cash positions following the recession.

“Companies with healthy balance sheets are clearly looking for sound investments,” said Will Hedden, sales trader at IG Index.

Though Avis Europe is not part of the FTSE 100 of leading British shares, its takeover helped buoy sentiment and the index was up 0.4 percent at 5,797. Germany’s DAX was 1.6 percent higher at 7,197 while the CAC-40 in France rose 1 percent to 3,846.

Wall Street was poised for a solid opening, too _ Dow futures were up 0.6 percent at 11,954, while the Standard & Poor’s 500 futures rose 0.8 percent to 1,276.

How the U.S. opens could well hinge on retail sales figures, which are released an hour before the bell. U.S. retail sales figures for May will provide an insight into the state of the U.S. economic recovery _ consumer spending accounts for around 70 percent of the U.S. economy.

Expectations are not rosy. The headline figure is expected to show a monthly 0.4 percent decline, which if true would represent the first decline since last June. However, when car sales are stripped out, U.S. retail sales are expected to rise by 0.3 percent.

In currency markets, investors continue to monitor developments surrounding the Greek debt crisis ahead of next week’s meeting of eurozone finance ministers in Brussels, where a fresh Greek bailout is on the agenda.

An unscheduled meeting of the eurogroup ministers Tuesday has stoked speculation that they are preparing to work out a way for the private sector to increase its share in helping Greece, a move the European Central Bank has so far opposed. The meeting takes place just a day after Standard & Poor’s downgraded its rating on Greece’s debt to triple C, the lowest of any sovereign in the world.

Tuesday’s meeting takes place amid signs that policymakers in Europe have divergent views on how to deal with the Greek crisis, with the European Central Bank and the German government, in particular, at odds on getting Greece’s bondholders to share the burden of the bailout.

By late morning London time, the euro was 0.2 percent firmer at $1.4439.

Earlier in Asia, Japan’s Nikkei 225 index rose 1.1 percent to close at 9,547.79 while South Korea’s Kospi rose 1.4 percent to 2,076.83. Hong Kong’s Hang Seng fell less than 0.1 percent to 22,496.

In mainland China, shares advanced after the government announced that inflation in May was 5.5 percent. Though that was the highest in almost three years, it was not as high as some forecasts had suggested. The benchmark Shanghai Composite Index gained 1.1 percent to 2,730.04, while the Shenzhen Composite Index of China gained 1.6 percent to 1,128.42.

Even though headline inflation did not rise as much as anticipated, China’s central bank increased the reserves banks are required to hold by a further 0.5 percentage point to a record 21.5 percent of deposits. The sixth increase this year is designed to help keep a lid on inflation.

There was some relief in the markets that China did not raise interest rates though that is expected to happen again soon.

“Although Chinese tightening is not generally welcomed by the markets, a gradual slowdown in the economy is a far better scenario than a hard-landing,” said Jane Foley, an analyst at Rabobank International.

Oil prices recouped some recent lost ground though fears over the pace of the global recovery remain.

Benchmark crude for July delivery was up 99 cents to $97.39 in electronic trading on the New York Mercantile Exchange.

____

Pamela Sampson in Bangkok contributed to this report.

Source

With rotating strikes at Canada Post now in its second week and delivery service slated to be cut back, Labour Minister Lisa Raitt met with the two sides Friday, urging them to break the impasse.

World stock markets moved lower Friday over concerns global economic growth is slowing, despite news of a narrower U.S. trade deficit that sent Wall Street up after a weeklong slump.

Oil prices hovered near $102 per barrel, while the dollar rose against the euro and fell against the yen.

In early European trading, Britain’s FTSE 100 dipped 0.2 percent to 5,844.60, Germany’s DAX lost 0.2 percent to 7,1456.01 and France’s CAC-40 dropped 0.7 percent to 3,853.49.

Shares in New York appeared headed for more losses as Dow Jones industrial futures lost 25 points to 12,019 and S&P 500 futures dipped less than 3 points to 1,279.10.

Trading was slightly less somber in Asia. Japan’s Nikkei 224 index rose 0.5 percent to close at 9,514.44, with vehicle makers posting gains. Toyota Motor Corp., the world’s No. 1 auto maker, rose 0.9 percent. Smaller rival Honda Motor Co. gained 1.1 percent and Nissan Motor Corp. was up 1.8 percent.

Shares of microchip maker Renesas Electronics Corp. gained 0.6 percent. The company said production at a plant damaged by the March 11 earthquake would return to pre-disaster levels in late September, one month earlier than anticipated, Kyodo News agency reported.

Elsewhere, though, markets were dragged down by fears of a global economic slowdown.

“I think it’s just the lingering caution that’s been pervading the market the last few weeks. There’s nervousness that the global economy is slowing down,” said David Cohen, an economist with Action Economics in Singapore.

“The Japanese are turning it around, and the market is still looking for a rebound of growth from the second half of the year in Japan,” Cohen said. “But I think people are still concerned about the U.S., and maybe that China is less of an engine than it was previously.”

South Korea’s Kospi index slid 1.2 percent to 2,046.67 after the Bank of Korea raised its key interest rate for the fifth time in less than a year amid a bid to fight inflation. At a monthly monetary policy meeting, the central bank lifted the benchmark base rate to 3.25 percent from 3 percent.

The action dampened investment sentiment, because traders _ believing that rate hikes discourage growth and hurt stock prices _ often take fright.

Hong Kong’s Hang Seng was 1.3 percent down to 22,315.47 as banking shares dropped.

The Bank of China Ltd., one of the country’s four major state-owned commercial lenders, lost 0.5 percent. Agricultural Bank of China Ltd., the country’s biggest rural lender, lost 0.2 percent. Industrial and Commercial Bank of China, the world’s biggest bank by market value, was down 0.2 percent.

Australia’s ASX/S&P 200 rose 0.3 percent to 4,562.10. Benchmarks in Singapore, Taiwan and the Philippines fell, while those in New Zealand, Thailand and mainland China rose.

The Shanghai Composite Index edged up less than 0.1 percent to 2,705.14, while the Shenzhen Composite Index gained marginally to 1,113.32. Shares in chemicals and heavy industries led the gains.

“The market is weak, gains are hard to come by but losses come easily. Investors also are expecting a rise in the consumer price index when it is released next week, fearing that could bring more monetary tightening measures,” said Liu Kan, an analyst at Guoyuan Securities, based in Shanghai.

Petrochina, the country’s biggest oil and gas company and the Shanghai benchmark’s biggest component, gained a mere 0.2 percent. Huaneng Power International, one of several big state-owned electricity generators, gained 6.2 percent.

On Wall Street, a report that U.S. exports hit a record in April sent stocks sharply higher Thursday as investors hoped the economic recovery may not be as sluggish as grim economic reports in the past week have suggested.

Stocks have been slipping since mid-April as investors become concerned that the U.S. economy has hit a soft patch. Rising oil prices, Japan’s tsunami and nuclear disaster and the risk that Greece might default on its debt have led investors to lower their forecasts for U.S. growth this year.

The Dow Jones industrial average rose 0.6 percent to close at 12,124.36. The Standard & Poor’s 500 index rose 0.7 percent to 1,289.00. The Nasdaq composite rose 0.4 percent to 2,684.87.

Thursday’s gains broke a six-day losing streak and marked the first time stocks rose in June. Stocks had dropped following poor reports on manufacturing, home sales, hiring and consumer confidence.

Benchmark crude for July delivery was down 36 cents to $101.56 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.19 to settle at $101.93 a barrel on Nymex on Thursday.

In currencies, the euro slipped to $1.4483 from $1.4509 in late trading Thursday in New York. The dollar fell to 80.07 yen from 80.26 Japanese yen.

Source

Stock futures are rising as investors await a raft of government reports about the state of the economy. The market’s major indicators have fallen for six straight sessions.

Ahead of the opening bell Thursday, Dow Jones industrial average futures are up 41, or 0.3 percent, at 12,071. Standard & Poor’s 500 index futures are up 5, or 0.4 percent, at 1,282. Nasdaq 100 futures are up 8, or 0.3 percent, at 2,255.

The Labor Department will report on the number of new applications for unemployment benefits last week cheap business cards. The number is expected to dip slightly from last week to 419,000. A number below 375,000 signals jobs are growing.

The government will report on the size of the trade deficit in April. Economists expect the deficit to have widened slightly from its March level.

Source

Wal-Mart Stores Inc. unveiled a $15 billion share buyback program Friday as it sought to reassure shareholders at its annual meeting that the world’s largest retailer is still growing.

The buyback will replace a previous $15 billion repurchase plan begun a year ago. The company bought back 244 million shares worth $12.9 billion under that program.

“This reflects the strong financial performance of your corporation,” said Charles Holley, Wal-Mart’s executive vice prsident and chief financial officer in an address to shareholders and associates packed in a University of Arkansa arena about 30 miles from its Bentonville headquarters.

The news comes after the company increased in March its dividend in its current 2012 fiscal year from $1.21 to $1.46 per share, an increase of 21 percent that returned $1.3 billion to shareholders.

The shareholders’ meeting maintained the tradition of being part pep rally, part business, with actor Will Smith serving as master of ceremonies. The 2011 “American Idol” winner, Scotty McCreary, also appeared.

About 16,000 people packed the arena, including Wal-Mart employees from 15 countries.

“You are legendary for your rowdiness,” Smith bellowed in warming up the crowd.

In Wal-Mart’s business, international sales are sizzling, but the company is still trying to reverse a two-year sales slump at home, with no clear sign of when that will happen.

“We made a lot of progress over the last 11 months,” said Bill Simon, president and CEO of Wal-Mart’s U.S. business in an address to shareholders. “We have the right plan.”

He noted that two-thirds of the business has seen gains in a key measure of sales, most of which is coming from groceries.

But he cautioned, “You certainly can’t predict the weather and the economy.”

Wal-Mart’s flagship business is hurting because it’s still smarting from the mistakes it made on pricing and selection more than two years ago. The company has been racing to restock thousands of items it culled as part of its overzealous bid to clean up its stores two years ago. It’s also gone back to its “Everyday Low Price” roots.

Wal-Mart is also battling increasing threats from competitors, particularly online rivals like Amazon.com and dollar chains, which have expanded their assortments and become more competitive on price.

Wal-Mart’s low-income shoppers have also seen their financial problems shift. A year ago, they were worried about losing their jobs. Now, rising gas prices and other household costs are squeezing their budgets and making it tough to stretch their remaining dollars to the next payday.

Thursday’s reports on May sales from major retailers, including rival Target Corp., provided more evidence that inflationary pressures are causing shoppers to pull back on discretionary items like clothing and home goods.

On Thursday, Simon told a media gathering that low-income shoppers are going through a “prolonged malaise.” Such financial woes could stall Wal-Mart’s campaign to turn its U.S. business around.

Wal-Mart’s fears have deep repercussions, because it’s a bellwether of consumer spending and accounts for nearly 10 percent of all nonautomotive retail dollars spent in the U.S.

Shares of Wal-Mart have tracked closer to its profits than its domestic sales this past year, and its robust international business, fueled by Mexico, China and Chile, has propped up revenue and profits. Wal-Mart shares are up almost 4 percent over the past 12 months. But they peaked in late January and have lost almost 7 percent since the company said it would not predict when U.S. revenue at stores open at least a year will begin growing, after setting a target date for last holiday season and missing it. That revenue measure has had eight straight quarters of declines.

Walmart stores account for 62 percent of the company’s revenue, which reached $418 billion in its latest fiscal year ended Jan. 31; international makes up 26 percent.

Walmart’s CEO of the company’s international division attributes its success to focusing on what shoppers want.

“It’s about finding the right item,” said Doug McMillon.

McMillon noted that the company’s fastest-growing division is working to expand its international Internet shopping business and is also growing through acquisitions.

The company is preparing to close on a $2.4 billion purchase of a majority interest in South African retailer Massmart, which operates in 14 countries.

The company’s overall revenue is also getting a lift from its improving Sam’s Club division, which has enjoyed five straight quarters of improving gains in stores open at least a year. Sam’s Club has benefited from better quality merchandise, from higher grade sirloin steak to trendier fashion labels.

To address the increasing threat of dollar stores, Wal-Mart is also opening its first of up to 20 Walmart Express stores planned for this year. These stores are about the size of a typical drugstore.

Many analysts are eager for Wal-Mart to ramp up the expansion of these small stores. Rivals like Dollar General and others have been blanketing areas around the country with their own stores.

Simon told shareholders he’s confident about Wal-Mart’s comeback.

“You better get ready, because we’re coming,” he added.

Source

Stocks are closing mixed. Weaker-than-expected sales reports from retailers and another large number of claims for unemployment benefits kept stocks wavering between gains and losses throughout the day.

First-time applications for unemployment benefits, an indication of how many people are losing their jobs, fell slightly last week to 422,000. That was more than economists were expecting and well above the 375,000 level that signals that the economy is adding jobs cash advance loan.

The Dow Jones industrial average lost 42 points, or 0.3 percent, to close at 12,249 Thursday.

The S&P 500 lost 2 points, or 0.1 percent, to 1,313. The Nasdaq composite gained 4, or 0.2 percent, to 2,773.

Slightly more stocks fell than rose on the New York Stock Exchange. Trading volume was 3.9 billion shares.

Source

NEW YORK

Community Health Systems Inc. has ended its effort to buy competitor Tenet Healthcare Corp. after Tenet rejected its latest $4 billion-plus offer.

Franklin, Tenn.-based Community Health said Monday it withdrew its offer to buy Tenet for $7.25 per share. It has also rescinded its effort to put nominees on Tenet’s board of directors.

Tenet shares fell 6 cents to $6.46 in pre-market trading Tuesday.

Community Health has been trying to acquire Tenet since late 2010. It originally made a bid of $6 per share for the Dallas company, and took the bid public after Tenet turned it down. Community Health raised its offer on May 2. The latest bid valued Tenet at about $4 payday loans no teletrack.06 billion.

Tenet also opposed the takeover offer efforts by adopting a “poison pill” stock dilution measure, delaying its annual meeting by six months, and filing a lawsuit that accused Community Health of defrauding Medicare.

Tenet said Monday that he latest offer was still too low. Community Health had said that bid would be its last offer.

Community Health runs about 130 hospitals in fast-growing and non-urban markets, while Tenet’s 49 hospitals are in urban and suburban markets.

Source

U.K. producer prices rose more than economists forecast in April, suggesting inflation pressures may still be building in the economy.

The cost of goods at factory gates increased 0.8 percent from March, the Office for National Statistics said today in London. The median forecast of 12 economists in a Bloomberg News survey was for a 0.7 percent gain. From a year earlier, output prices rose 5.3 percent. Annual input-price inflation accelerated to the fastest since September 2008.

The Bank of England kept its benchmark interest rate at a record low of 0.5 percent yesterday, favoring support for the economy’s recovery over curbing an inflation rate that’s twice its 2 percent target. Nevertheless, with commodities such as crude oil surging, manufacturers may have no choice but to pass on higher costs to customers, feeding price pressures.

“There are underlying pressures for sure,” said David Tinsley, an economist at National Australia Bank in London. “Still, the recovery looks pretty limp and I don’t think there’s a lot of reason to be optimistic there’s going to be a recovery in domestic demand.”

The pound erased its decline against the dollar after the report and traded at $1.6384 as of 9:38 a.m. in London, little changed on the day.

Tax Increases

Tobacco and alcohol output prices jumped 2.6 percent in April from March, the statistics office said, while petroleum products rose 1.3 percent. The gains in tobacco and alcohol were largely due to an increase in taxes in the government’s budget in March.

Input prices rose 2.6 percent in April from March and were up 17.6 percent from a year earlier, the statistics office said. Crude oil was up 38 percent on the year, it said installment payday loans.

Core output prices, which exclude food, drink, tobacco and petroleum, increased 0.6 percent on the month and 3.4 percent on the year. The statistics office revised the monthly and annual increases in March headline output prices to 1.1 percent and 5.6 percent from 0.9 percent and 5.4 percent respectively.

Premier Foods Plc (PFD), the U.K.’s biggest food manufacturer, said on April 27 that first-half gross profit may suffer as it seeks to negotiate price increases to make up for rising costs.

Source