The Tokyo skyline

The Tokyo skyline

Earnings to set tone for stocks in week ahead

NEW YORK (Reuters) – With Wall Street stuck in a range since May, the start of second-quarter earnings season next week could prove to be a decisive factor for determining how much faith investors should have in an economic recovery.

After a rally of as much as 40 percent for the S&P 500 on expectations the economy will begin to turn around by year end, analysts will hone in on companies' projections to see if their hopes are corroborated.

The light menu of economic data will help keep the spotlight on earnings releases, with bellwethers Alcoa (AA.N) and Chevron (CVX.N) posting their quarterly scorecards. Of even more importance will be any outlook companies give for what they expect to see for the rest of the year.

A large U.S. Treasury auction could buoy the market if it shows there is good demand for government debt. Concern that the appetite for debt is waning as the government tries to fund its stimulus efforts was soothed by solid demand in last week's record $104 billion auction of Treasury securities.

Well Said earns some respect

Well Said earns some respect

Global recession nearing bottom, OECD says

PARIS (AP) — The deepest global recession in over 60 years is close to bottoming out, but recovery will be weak unless governments do more to remove uncertainty over banks' balance sheets, the Organization for Economic Cooperation and Development (OECD) said Wednesday.

In its half-yearly economic outlook, the Paris-based organization said it expects its member countries' economies to shrink by 4.1 percent this year, with only government rescue measures heading off an even worse decline.

That is a slight improvement from the OECD's last forecast in March of a 4.3 percent decline this year and is the group's first upward revision to its forecasts in two years, Secretary General Angel Gurria said at a news conference in Paris.

"A really disastrous outcome has become more of a remote risk," said OECD acting economics department head Jorgen Elmeskov.

But the recovery "is likely to be both weak and fragile for some time," Gurria said.

Apple CEO Jobs at work on Monday: witness

SAN FRANCISCO/NEW YORK (Reuters) – Apple Inc Chief Executive Steve Jobs was at the company's headquarters on Monday, underscoring speculation the pancreatic cancer survivor may have returned to work.

Jobs, who has been on medical leave since January, was seen by a Reuters reporter leaving the Apple campus in Cupertino, California dressed in his trademark black turtleneck and jeans. He walked out chatting with another person before climbing into a black car that then drove off.

Speculation has mounted that Jobs could be back at work soon, fueled in part by a Wall Street Journal article last weekend that said the CEO had a liver transplant two months ago.

On Monday, Jobs, 54, was also cited in an Apple press release for the first time in months, triggering talk that the man considered the visionary behind Apple's innovation machine had returned from his leave of absence.

NAB eyes wealth mgt growth with $660 million Aviva buy

SYDNEY (Reuters) – National Australia Bank Ltd (NAB.AX) will pay $660 million for most of British insurer Aviva Plc's (AV.L) Australian businesses to become the country's dominant investment platform provider and insurance underwriter.

NAB, the country's biggest lender, pipped AMP Ltd (AMP.AX) and others to clinch the deal -- its first acquisition under new CEO Cameron Clyne.

NAB, which has identified wealth management, insurance and its advisory business as key growth areas, said on Monday the purchase would dent its Tier-1 capital by about 15 basis points, but forecast A$70 million in annual pre-tax savings.

Aviva, the world's fifth-biggest insurer, joins a growing list of global companies exiting Australia to focus on their domestic markets in the grip of a global financial crisis.

A sale could help Aviva ease worries about its capital position, which has been a cause of investor concern after the group left its 2008 dividend unchanged in March.

Stanford indicted in massive U.S. fraud case

RICHMOND, Virginia (Reuters) – Texas billionaire Allen Stanford, three associates and a top Caribbean regulator were indicted on fraud, conspiracy and obstruction charges in an elaborate $7 billion pyramid scheme to bilk investors, U.S. Justice Department officials said on Friday.

A federal judge in Virginia ordered Stanford, a flamboyant 59-year-old financier, to be transferred to Houston for a hearing on whether he should be granted bail on charges he orchestrated the fraud through his bank on the Caribbean island of Antigua.

He could face life in prison if convicted on all of the charges brought by a grand jury in Texas, Assistant Attorney General Lanny Breuer told reporters in Washington.

Stanford, who surrendered to FBI agents outside his girlfriend's house in Virginia late on Thursday, entered a Richmond federal courtroom in ankle shackles and sat straight with his chin in his hands during a brief hearing before U.S. Magistrate Hannah Lauck.

RIM outlook disappoints, sending shares lower

TORONTO (Reuters) – Research In Motion (RIM.TO) (RIMM.O) offered investors an outlook on Thursday that fell short of some expectations, sending the BlackBerry maker's stock sliding 5 percent even as the company reported a higher quarterly profit that topped forecasts.

The share price's drop may reflect concern over a competitive landscape that has become more cluttered with alternatives to the BlackBerry, as well as lingering doubts about the impact of the global economic slowdown on both consumer and corporate spending

Earlier this month Apple Inc (AAPL.O), a major rival in the consumer market, said it would cut the price of older models of its popular iPhone. Palm (PALM.O), a weaker competitor that could be gaining traction, recently launched its well-received Pre handset.

While some investors may not be so sure, RIM's outlook is still robust, said independent technology analyst Carmi Levy. It shows the Waterloo, Ontario-based company is still confident of its ability to keep pace with the competition, he said.

Big four emerging economies meet for first summit

YEKATERINBURG, Russia (AFP) — Leaders from emerging giants Brazil, Russia, India and China are set to meet for the first summit of their informal BRIC grouping in a show of unity in the face of a sharp global slowdown.

The idea for the BRIC (Brazil, Russia, India, China) grouping was spawned after research by a US investment bank suggested the four economies were developing at such pace they could be amongst the world's strongest by 2050.

Presidents Dmitry Medvedev of Russia, Hu Jintao of China, Luiz Inacio Lula da Silva of Brazil and Indian Prime Minister Manmohan Singh will meet in Yekaterinburg, a city some 1,420 kilometers (880 miles) east of Moscow in the Ural Mountains.

It remains to be seen whether the quartet will agree to create a more official format for the grouping, an idea that was never anticipated when the original research was undertaken by Goldman Sachs of the United States.

Retail sales, drop in jobless claims fuel hope

WASHINGTON (Reuters) – U.S. retail sales rose in May for the first time in three months and the number of workers filing new claims for jobless benefits last week hit a January low, fostering hope the recession was abating.

The Commerce Department said on Thursday that sales at U.S. retailers rose 0.5 percent last month, lifted by strong gasoline and building material receipts, after falling by 0.2 percent in April.

A separate report from the Labor Department showed the number of U.S. workers filing new claims for unemployment benefits fell by 24,000 to 601,000 last week, the lowest since the week of January 24.

"The data are less bad. We are on track for growth in the third quarter," said Stephen Gallagher, chief U.S. economist at Societe Generale in New York.

Oil rises above $72 on falling U.S. inventories

SINGAPORE (Reuters) – Oil rose above $72 a barrel on Thursday, heading for a third consecutive day of gains, after data showed falling U.S. crude and product inventories, adding to signs that oil demand may have bottomed out.

Prices have gained more than 5 percent since last Friday's settlement, and more than doubled since last winter's low $30s as investors have started to price in expectations for an economic recovery, which should boost consumption.

U.S. crude stocks fell by a sharp 4.4 million barrels last week, against expectations for a modest draw of 400,000 barrels, while products inventories also dropped, the Energy Information Administration (EIA) reported.

U.S. light crude for July delivery rose 76 cents to $72.09 a barrel by 0447 GMT, a near eight-month high, having gained $1.32 on Wednesday to settle at $71.33 after the U.S. inventory data was released.

Wall Street rallies late, ends flat

NEW YORK (Reuters) – U.S. stocks rebounded late on Monday to end flat, shrugging off lighter-than-expected sales from McDonald's (MCD.N) and lowered iPhone prices from Apple (AAPL.O).

The three major U.S. stock indexes had fallen more than 1 percent before rallying in the last hour of trading, led by bank shares.

Analysts pointed to the S&P 500's recent piercing of its 200-day moving average as a positive sign, giving investors confidence to buy stocks on dips in the market.

"What we're seeing is investors, both institutional and individuals, looking at dips as an opportunity to buy," said Bucky Hellwig, senior vice president at Morgan Asset Management in Birmingham, Alabama.

"It's a sign of the broader strength that's in the market."

The S&P 500 has rallied 39 percent since hitting a 12-year closing low on March 9, leading analysts to speculate a correction was looming, although recent dips have been short-lived.

Fidelity to sell shares of KKR IPOs

BOSTON (Reuters) – Boston mutual fund giant Fidelity Investments and New York private equity firm Kohlberg Kravis Roberts & Co.(KFN.N) have struck a deal to sell shares of KKR initial public offerings to retail customers, hoping for a comeback in the frozen market.

KKR has investments in 50 companies with a combined $200 billion of revenue. But KKR hasn't had an IPO since it took Sealy Mattress Co public in 2006.

Just 10 IPOs have been completed this year, down from 97 at the same point a year ago, according to data from Renaissance Capital, an IPO research specialist.

But the market "may be picking up momentum," said Mark Haggerty, president of Fidelity's capital markets unit, based on the deals so far. "Overall it's moving in the direction we hope," he added.

IPOs tend to be riskier investments, their image strongly tied to the dot-com era, and the recession has all but eliminated them this year.

U.S. job losses slow in May, fueling recovery hope

WASHINGTON (Reuters) – The pace of U.S. job losses slowed sharply last month, the strongest sign to date that the recession is diminishing, even as the unemployment rate hit its highest in nearly 26 years.

The Labor Department said on Friday that U.S. employers cut 345,000 jobs in May, the fewest since September and far less than economists had forecast. They cut 504,000 jobs in April.

However, the unemployment rate raced to 9.4 percent, the highest since July 1983, from 8.9 percent in April, partly because people who had given up looking for work reentered the labor market, a sign economic confidence was returning.

"It keeps hopes alive for a full recovery in the U.S. economy by the second half. It's a step in the right direction," said John Canally, investment strategist and economist for LPL Financial in Boston.

Rio Tinto calls off $19.5-billion deal with Chinalco

Anglo-Australian miner Rio Tinto PLC on Friday scrapped its $19.5-billion (U.S.) deal with Chinese firm Chinalco, choosing instead to raise $15.2-billion in a share sale and setting up a joint production venture with rival BHP Billiton Ltd.

Rio Tinto chairman Jan du Plessis said in a letter to shareholders the planned deal with Chinalco was now dead and his company would pay it a $195-million break fee, thus ending what would have been China's biggest overseas investment to date.

Investors will be offered 21 new shares for every 40 they hold at $28.29 Australian ($22.71 U.S.) each, the company said in a statement posted on the Australian stock exchange. Rio Tinto said the share deal would reduce the company's overall debt, allowing it to meet repayment obligations.

Rio Tinto turned to Chinalco – whose full name is Aluminum Corp. of China – in February to help repair a balance sheet weighed down by $38.7-billion in debt. A payment of $8.9-billion was due in October.