SUKE English Channel, Replica Watches

By Michael P. Regan and Rita Nazareth

(Corrects size of S&P 500’s drop in third paragraph of story that moved yesterday.)

Aug. 11 (Bloomberg) — U.S. stocks surged, reversing most of yesterday’s plunge, and Treasuries sank as an unexpected drop in jobless claims and higher-than-estimated earnings tempered concern the economy is slowing as Europe’s debt crisis widens. The Swiss franc slid on plans to temporarily peg it to the euro.

The Standard & Poor’s 500 Index jumped 4.6 percent to 1,172.64 at 4 p.m. in New York. The Stoxx Europe 600 Index rallied 3.2 percent, rebounding from a two-year low. Treasuries extended losses as demand weakened at an auction of 30-year bonds, sending the benchmark 10-year note yield up 22 basis points to 2.32 percent. The franc slid at least 4.8 percent against all 16 major peers. Gold retreated from a record above $1,800 an ounce, while zinc and lead rallied.

The S&P 500 rebounded after plunging 17 percent from July 22 through yesterday amid concern about Europe’s debt crisis and a political battle over the U.S. debt ceiling that prompted S&P to cut the country’s credit rating. Both European shares and the Russell 2000 Index of small American companies entered a bear market this week, falling at least 20 percent from their previous highs, as two and 10-year Treasury yields reached record lows.

“If there is no recession, stocks are discounting an awful lot of bad news right now,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which oversees $3.8 billion, said in a telephone interview. “The jobless claims report is another indication that the economy is growing at a moderate pace. Still, the market is very fragile. So much of what’s moving the market is centered in Europe,” he said. “Is this is a repeat of the 2008 financial crisis? I don’t think so.”

Short-Selling Ban

After the close of U.S. trading today, the European Securities and Markets Authority said in a statement that Belgium, France, Italy and Spain plan to impose a ban on short selling or on short positions as the region sought to restore investor confidence in the markets.

U.S. equity futures erased losses before markets opened today after first-time applications for jobless benefits decreased 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The Labor Department said the number of people on unemployment benefit rolls and those getting extended payments also dropped.

Cisco, News Corp. Rally

Cisco Systems Inc. rallied 16 percent, the most in nine years, as the world’s largest maker of networking equipment reported profit that topped estimates after the company cut jobs and pared its businesses. News Corp. jumped 17 percent for its biggest gain since October 2008 as the owner of Fox television and the Wall Street Journal reported better- than-estimated earnings and increased its dividend 27 percent, cushioning investor losses stemming from a phone-hacking scandal at its London paper News of the World.

The Dow Jones Industrial Average rallied 423.37 points, or 4 percent, to 11,143.31 after sliding almost 520 points yesterday. This week’s trading marks the first time the Dow has moved more than 400 points either up or down for four days in a row.

JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. rallied more than 6 percent to pace a rebound in banks as all 81 financial shares in the S&P 500 advanced. The group sank to a two-year low on Aug. 8.

Earnings Season

Concern the economy is slowing as Europe’s debt crisis spreads has overshadowed a second-quarter reporting season that has seen per-share earnings top estimates at three-quarters of the 429 companies in the S&P 500 that reported results since July 11. Net income has increased 16 percent for the group on a 13 percent surge in sales, data compiled by Bloomberg show.

A rout in global equity markets since July 26 erased $7.9 trillion in market value through yesterday and made stocks in Europe and the U.S. the cheapest relative to earnings in about 2 1/2 years. Central bankers are trying to restore investor confidence, with the Federal Reserve pledging to keep interest rates near zero through at least mid-2013 to bolster U.S. growth and the European Central Bank buying bonds to cap borrowing costs.

France, Italy, Spain and Belgium plan to ban short selling, the ESMA said in a statement on its website. “They have done so either to restrict the benefits that can be achieved from spreading false rumors or to achieve a regulatory level playing field, given the close inter-linkage between some EU markets,” it said.

‘Unfounded Information’

France’s stock market regulator said that rumors had been circulating about French financial companies and that the spreading of “unfounded information” may lead to punishment. The market turbulence has led Turkey to curb short sales and threaten “severe penalties” for stock manipulation Fake Watches, joining nations from Greece to South Korea in trying to stem bearish bets after the worst tumble in global shares since 2008.

“It had been rumored around today, so not as if it’s coming out of left field Fake Watches,” Michael James, a managing director at Wedbush Securities Inc. in Los Angeles, said in an e-mail. “But I would be surprised if it didn’t have a positive impact on European markets at least to start the day.”

Companies in the S&P 500 started today’s session trading at 11.3 times estimated profits, near the cheapest since March 2009. Europe’s Stoxx 600 was valued at 9.1 times projected earnings.

The slide in equities has sent executives at banks and investment firms scrambling to halt the spread of panic.

‘So Much Better’

Bank of America Corp. Chief Executive Officer Brian T. Moynihan said yesterday the lender will meet its capital targets because economic conditions are “so much better” than they were during the financial crisis in 2008-2009. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told CNBC yesterday that the fundamental strength of the economy is “still here.” Bank of America’s shares are down 53 percent from their 2011 high in January, while JPMorgan has lost 25 percent from a February peak.

Brian Rogers, chairman and chief investment officer of T. Rowe Price Group Inc., warned in an e-mail to investors last night that “emotional responses to financial downturns rarely produce good results.”

“While we’re experiencing a perfect storm of political dysfunction, slowing economic growth, and the debt downgrade, the market backdrop is very different from that of 2008 when we were truly in the crosshairs of a global financial crisis,” Rogers wrote to investors with the company, which had $521 billion under management as of July 26. “The sharp decline has been so sudden that I believe a good portion of the decline is behind us. Nonetheless, markets will remain volatile.”

Insider Buying

More executives at S&P 500 companies are buying their stock than any time since the depths of the credit crisis after valuations plunged 25 percent below their five-decade average.

Sixty-six insiders at 50 companies bought shares between Aug. 3 and Aug. 9, the most since the five days ended March 9, 2009, when the benchmark index for U.S. equities reached a 12- year low, according to data compiled by Bloomberg. Morgan Stanley Chief Executive Officer James Gorman and two other managers purchased 175,000 shares of the New York-based bank as the stock fell to the lowest level since March 2009, according to filings with the U.S. Securities and Exchange Commission.

Today’s gains in stocks and drop in Treasuries pulled the S&P 500’s dividend yield back below the rate on the 10-year Treasury. The dividend payout, currently at 2.22 percent, rose above the 10-year yield for the first time since May 2009 yesterday, according to data compiled by Bloomberg.

Credit-Default Swaps

Even as bank stocks rallied today, the cost to protect against a default by a U.S. lender rose and a benchmark gauge of corporate credit risk reached a 14-month high amid fear that Europe’s debt crisis will infect the global financial system.

Credit-default swaps on Bank of America, the nation’s biggest lender, surged to the highest since April 2009 before paring the gain. The cost to protect against defaults by European financial companies reached a record, and a swaps index that gauges the perceived risk of owning junk bonds, which falls as sentiment deteriorates, is at about the lowest level in more than a year.

Banks in the Stoxx 600 climbed 3.9 percent as a group, reversing an earlier tumble that dragged them to the lowest level since April 2009. Societe Generale SA rose 3.7 percent after tumbling 9.1 percent earlier and 15 percent yesterday. The French bank is among lenders being targeted by investors because of its perceived dependence on short-term funding, analysts said.

France’s top credit ratings were affirmed yesterday by all three major rating firms amid concern the country’s creditworthiness was in doubt, and Societe Generale issued a denial of “all market rumors” as its stock slumped.

‘Dented’ Confidence

“The mix of euro doubts and rating fears in recent days and weeks may have dented the confidence of funding counterparties, which has then fed back into equity markets,” Royal Bank of Scotland Group Plc analysts including Stefan Stalmann said in note to clients today.

U.S. Treasuries retreated after the 10-year real yield, which accounts for inflation, dropped to negative 1.45 percent yesterday, approaching the lowest since 2008. The 30-year Treasury 30-year bond yields rose 26 basis points to 3.77 percent as demand waned at today’s auction of the debt.

The first auction of the securities since S&P cut the U.S. credit rating on Aug. 5 produced a yield of 3.750 percent, compared with the average forecast of 3.622 percent in a Bloomberg News survey of eight primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 2.08, compared with an average of 2.64 at the past 10 sales. Yesterday’s auction of 10-year debt drew a record low yield.

‘Didn’t Show Up’

“People didn’t show up for this one,” said Scott Sherman, an interest-rate strategist at Credit Suisse Group AG in New York, one of 20 primary dealers that trade directly with the Federal Reserve. “The Fed fixing the Fed funds rate for two plus years provided a lot of support for the front and intermediate parts of the curve, but it increases inflation expectations because there is concern that the fed is tying their hands further if inflation worries arise.”

The Swiss franc tumbled the most against the euro since the shared European currency was introduced in 1999, losing as much as 5.7 percent, and sank 4.8 percent against the dollar. Swiss central bank Vice President Thomas Jordan said policy makers could peg the franc for the first time in more than three decades as they struggle to stem a record-breaking rally. The dollar appreciated 0.1 percent to 76.93 per yen after yesterday approaching the postwar low of 76.25.

Rising Yuan

China’s yuan breached the 6.40 level against the dollar for the first time since the nation unified official and market exchange rates at the end of 1993. The central bank raised its reference rate for the currency by 0.27 percent to 6.3991, the biggest advance since November.

Copper, lead and zinc climbed at least 3.3 percent as the strengthening yuan may boost demand in China, the biggest user of the metals. Corn, soybean and wheat prices surged at least 1.9 percent after the government said U.S. farmers will harvest smaller crops than forecast last month following a damaging heat wave.

About three companies declined for every two that rose on MSCI’s Asia Pacific Index, which lost 0.6 percent. The gauge pared an earlier drop of 2.4 percent. Japan’s Nikkei 225 Stock Average fell 0.6 percent, while South Korea’s Kospi Index gained 0.6 percent, reversing losses of as much as 4 percent. Telstra Corp. jumped 5.7 percent after Australia’s largest telephone company posted second-half earnings that beat analyst estimates.

The MSCI Emerging Markets Index climbed 0.9 percent. The 21-country MSCI index has tumbled 18 percent from this year’s high, sending the gauge to less than 10 times analysts’ 12-month earnings estimates, according to data compiled by Bloomberg, marking its cheapest valuation since 2009. Brazil’s Bovespa surged 3.8 percent after the nation’s retail sales slowed less than forecast.

–With assistance from Mark Gilbert and Claudia Carpenter in London and Lu Wang, Nikolaj Gammeltoft, Susanne Walker, Cordell Eddings, Andrew Cinko, Mary Childs and Shannon D. Harrington in New York. Editors: Michael P. Regan, Chris Nagi

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net

Business Exchange E-mail Print READER DISCUSSION

By Mike Dorning and Laura Litvan

(Updates with White House response, Obama comments to CBS and Cornyn comments beginning in fourth paragraph.)

July 12 (Bloomberg) — The top Senate Republican attacked the credibility of President Barack Obama’s efforts to forge a “grand bargain” of spending cuts and tax increases, saying the president himself was an obstacle to an agreement on the debt.

Senator Mitch McConnell and other Republican leaders said Obama is putting an expansion of government ahead of the goal of reaching a bipartisan accord to cut the U.S. deficit. He said Democrats’ “smoke and mirrors” proposals prevented the type of $4 trillion deficit reduction that Obama is seeking.

“As long as this president is in the Oval Office, a real solution is unattainable,” McConnell of Kentucky said on the Senate floor today in his toughest comments about the negotiations since bipartisan talks began.

White House Press Secretary Jay Carney called McConnell’s remarks “unfortunate,” saying, “this president is going to be in office for at least another 18 months, and I think that the American people expect Congress to work with him.”

Carney said Obama has been willing to do “tough things that will not be easy to convince Democrats to go along with.”

Obama has pressed Republican leaders to seek bigger deficit savings than the range between $2 trillion and $2.5 trillion they have targeted and to compromise on their opposition to tax increases. The two parties are in talks aimed at raising the $14.3 trillion U.S. debt ceiling before Aug. 2, the date when the government is projected to exhaust its borrowing authority.

‘Now is the Time’

“Now is the time to deal with these issues,” Obama said at a White House news conference yesterday. “If not now, when?”

In an interview for “CBS Evening News with Scott Pelley,” Obama raised the possibility that the federal government might not be able to pay Social Security and veterans’ benefits if an agreement isn’t reached in time.

“I cannot guarantee that those checks go out on Aug. 3 if we haven’t resolved this issue Replica watches,” Obama said. “Because there may simply not be the money in the coffers to do it.”

The parties are divided over taxes and entitlement programs. In addition to rebuffing Democratic calls for more tax revenue, Republicans are pushing to cut programs such as Medicare and Social Security. The White House has indicated a willingness to consider savings including an increase in the Medicare-eligibility age as part of a larger deal.

‘Something Big’

“I was one of those who had long hoped we could do something big for the country,” McConnell said. “But in my view the president has presented us with three choices: smoke and mirrors, tax hikes, or default. Republicans choose none of the above.”

McConnell’s criticism was echoed by House Speaker John Boehner, an Ohio Republican Fake Watches, who said the “president talks a good game, but when it comes to actually putting these issues on the table and making decisions, he can’t quite pull the trigger.”

McConnell held a private meeting with Senate Republicans to get their views on the negotiations at the White House scheduled to resume at 3:45 p.m. today.

Senator John Cornyn, a Texas Republican and member of the Republican leadership team, said the lawmakers discussed options going forward in the talks, which are at a standoff over tax increases. He said Republicans want to pressure Democrats by highlighting some of the ideas they are pushing that aren’t popular with the public and can’t pass Congress.

Senate Votes

He said McConnell is weighing a plan to take some of Obama’s ideas and try to put them before the Senate for a vote.

Another potential option for Republicans is to see whether the Republican-led House would pass a short-term debt limit increase to “put pressure” on Democrats to accept spending cuts, Cornyn said.

Obama yesterday rejected any short-term extension. He also rebuffed a Republican presentation on spending cuts discussed in earlier talks led by Vice President Joe Biden, a Democratic official said. Obama said the total — which a Democratic official put at $1.7 trillion — fell short of both his goal and the threshold Republicans set for a debt-limit increase large enough to carry the nation through the 2012 elections, another Democrat said.

Letter From Chamber

The U.S. Chamber of Commerce, the Business Roundtable and other organizations today released a letter to Obama and Congress urging action “to raise the debt ceiling as expeditiously as possible.”

The letter, which the chamber said was signed by 470 chief executives, supports long-term efforts to reduce federal deficits while saying that failure to increase the government’s borrowing authority “would create uncertainty and fear, and threaten the credit rating of the United States.”

House Democrats met this morning to review the bigger deal that Obama is offering to Republicans even as aides said the Medicare and Social Security compromises Obama has been willing to consider are largely moot given that Republicans refusal to engage on revenue. Democrats said the debt negotiations have become so strained, it may take Wall Street and business groups stepping in with a warning to force an agreement.

“We certainly would hope that the Chamber of Commerce would step up,” said House Democratic Caucus Chairman John Larson of Connecticut. “We have heard from Wall Street but I think they have to be more vociferous and more present in terms of the looming, impending danger.”

U.S. Stocks

U.S. stocks rose, after the biggest two-day drop since March for the Standard & Poor’s 500 Index. The S&P index rose 0.1 percent to 1,320.60 at 12:32 p.m. in New York.

Yields on benchmark Treasury 10-year notes were little changed after surging earlier as concern that Europe’s debt crisis may spread stoked demand for the U.S. government debt’s safety. The 10-year note yield fell as much as 11 basis points to 2.81 percent, the lowest since Dec. 1, before trading little changed at 2.91 percent, at 1:45 p.m. in New York, Bloomberg Bond Trader prices show.

U.S. Treasury Secretary Timothy Geithner said the Obama administration is aiming to reach a deal on raising the debt ceiling as soon as this week.

“We want to wrap up the broad outlines of this agreement by the end of this week, certainly by the end of next week,” Geithner said today at a symposium in Washington.

Republicans have demanded at least a dollar in spending cuts over 10 years for every dollar they agree to raise the debt limit, which would have to go up more than $2 trillion to get through the elections. The Republicans last weekend lowered their objective for deficit reduction to the range of $2 trillion to $2.5 trillion.

Democratic congressional leaders also objected to the figure presented yesterday by Republicans, saying spending cuts that had been discussed in the Biden-led talks were contingent on tax-revenue increases, said a Democratic official.

–With assistance from Heidi Przybyla, Margaret Talev, Hans Nichols, Kate Andersen Brower, Julie Hirschfeld Davis, James Rowley, Roger Runningen, Ian Katz and Cheyenne Hopkins in Washington. Editors: Mark McQuillan, Laurie Asseo.

To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Business Exchange E-mail Print READER DISCUSSION

By Yoshiaki Nohara and Toshiro Hasegawa

Aug. 29 (Bloomberg) — Japanese stocks rose for a third day after Federal Reserve Chairman Ben S. Bernanke indicated the U.S. economy isn’t deteriorating fast enough to warrant additional stimulus.

Fanuc Corp., which gets 75 percent of its sales outside of Japan, rose 0.6 percent. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, advanced 0.6 percent, leading gains in banks. Softbank Corp., Japan’s third-largest mobile-phone operator by revenue Fake Watches, gained 1.7 percent.

The Nikkei 225 Stock Average rose 0.2 percent to 8,816.99 as of 9:09 a.m. in Tokyo. The broader Topix index advanced 0.2 percent to 757.76.

“Bernanke’s speech fell into what people had expected, but by extending the next meeting, it showed they are ready to introduce a measure Replica Watches,” said Kazuhiro Takahashi, a general manager at Daiwa Securities Capital Markets Co. in Tokyo. “U.S. stocks have stabilized, which is a plus for Japanese stocks.”

–Editors: John McCluskey, Drew Gibson.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

Business Exchange E-mail Print READER DISCUSSION

NEW YORK – US stocks chalked up their best day in nearly two months on Thursday as investors welcomed a string of robust earnings reports, while Greece appeared close to a bailout deal, easing fears about a wider sovereign debt crisis.

News that Greece was readying severe austerity measures to secure a multibillion-euro aid package spurred widespread relief, and the more beaten-down sectors, like banks, recouped recent losses for a second day running.

Continuing the generally favorable earnings season, cellphone maker Motorola Inc beat forecasts and its stock gained 3.5% to $7.16. Visa Inc, reported higher-than-expected profits and raised its revenue outlook, spurring hopes of a revival in consumer spending.

"There is a continuation of this tug of war between the negative bias put into the market by sovereign debt worries out of Europe," said Craig Peckham, equity trading strategist at Jefferies & Company in New York. "Right now, the US corporate fundamental story is winning the battle."

The S&P 500’s percentage gain marked its largest daily advance in nearly two months.

After spiking sharply this week Fake Watches, the CBOE VIX volatility index, Wall Street’s index of choice for gauging market volatility, fell 12.5% — its steepest drop in 14 months.

The Dow Jones industrial average gained 122.05 points, or 1.10%, to 11,167.32. The Standard & Poor’s 500 Index rose 15.42 points, or 1.29%, to 1,206.78. The Nasdaq Composite Index added 40.19 points, or 1.63%, to 2,511.92.

The Dow and the S&P 500 posted their biggest one-day gains since March 5 while the Nasdaq rose the most since January 4.

Bank of America rose 2.9% to $18.30, while the KBW bank index rose 2.4%.

Visa’s stock slid 0.8% to $92.82 after hitting an all-time high at $97.14 on Monday.

In a sign the mood was still cautious, the Dow and the S&P 500 came off session highs after ratings agency Moody’s said a multi-notch credit downgrade for Greece is likely. S&P cut its debt ratings of Greece and Portugal on Tuesday Fake Watches, sparking a sharp sell-off in equities.

Boosting the Nasdaq, Palm Inc surged 26.1% to $5.84 after Hewlett-Packard Co agreed to buy the smartphone maker for $1.2 billion. HP slipped 0.8% to $52.88.

In the health sector, Aetna Inc reported better-than-expected quarterly profit and raised its forecast. The health insurer’s stock rose 2.4% to $31.24, and the Morgan Stanley Healthcare Payors index rose 2.7%.

Higher oil prices during the quarter boosted profits for Exxon Mobil Corp and ConocoPhillips, though Exxon said its earnings were hurt by the health reform legislation.

Exxon’s stock slid 0.8% to $68.66, but shares of ConocoPhillips gained 0.9% to $59.10.

But the energy sector’s gains were limited by fallout from the sunken Deepwater Horizon rig and the oil leak that followed in the Gulf of Mexico. Shares of oilfield services companies Cameron International Corp and Halliburton Co tumbled on fears about their ties to the rig, owned by Transocean Ltd and contracted out to BP Plc.

Cameron International fell 13% to $38.70, Halliburton lost 5.3% to $31.60, while BP’s New York-traded stock lost 8.3% to $52.56. Transocean fell 7.5% to $78.51 in New York.

In a sign more investors are starting to warm to equities, US fund managers increased their already heavy investment in stocks in April and decreased bond allocations, a Reuters poll showed. .

Initial claims for unemployment benefits fell slightly less than expected in the latest week, the government said, but the numbers were less than the previous week.

About 10.67 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above last year’s estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of 3 to 1, while on the Nasdaq, nearly three stocks rose for every one that fell.

Superstar Nora Aunor. File Photo

MANILA, Philippines – Superstar Nora Aunor was rushed to the hospital on Tuesday morning due to difficulty in breathing Fake Watches, entertainment columnist and host Jobert Sucaldito said.

During his radio dzMM show "Mismo," Sucaldito said one of Aunor’s staff informed him about the situation.

“Kaninang umaga parang hindi siya (Aunor) makahinga, that is why she was rushed to the hospital this morning,” he said.

According to Sucaldito, Aunor may have pushed her body beyond its own limits Replica Watch, causing her to suffer from fatigue.

“Kahapon pa kasi siya (Aunor) ubo nang ubo while she was taping for a show sa kabilang network. Tapos gusto na siyang [pag] pahingahin ng kanyang staff, but she wanted to finish the taping,” he said.

Sucaldito added that Aunor’s condition has stabilized after she was transferred to another hospital.

"I checked na with Kuya Boy Palma to check on how she’s doing now. She’s better now. She’s transferred to another hospital to take full rest," he shared.