European confidence in the economic outlook fell to the lowest in more than two years and German factory orders plunged as the euro area
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Stronger reports on the job market and manufacturing sent stocks slightly higher Thursday.
The Dow Jones industrial average rose 45.33 points, or 0.4 percent, to 11,868.81. The Dow lost 360 points over the past three days on worries that Europe’s latest plan to keep its currency union intact would fail.
Jack Ablin, chief investment officer at Harris Bank, said the upturn reflects a shift in investors’ attention back to recent signs of strength in the U.S. economy.
“We’re not completely insulated (from Europe), but trouble there doesn’t necessary spell problems for us,” Ablin said.
The number of people applying for unemployment benefits dropped last week to 366,000, the lowest level since May 2008. That’s a sign that layoffs are easing, a first step toward bringing down the unemployment rate, which currently stands at 8.6 percent.
A widely watched index measuring regional manufacturing from the New York branch of the Fed jumped to the highest level since May, far more than economists were expecting. A similar report from the Philadelphia branch also increased faster than analysts anticipated.
“The base of the economy is getting stronger,” said Steven Malin, an associate at money manager Aronson Johnson Ortiz.
FedEx Corp. reported that its quarterly income nearly doubled on strong growth in online shopping during the holiday season. FedEx is seen as a bellwether for the economy. Its stock jumped 8 percent.
The Standard & Poor’s 500 rose 3 no fax payday loans.94 points, or 0.3 percent, to 1,215.76. The gains were broad. All but two of the 10 industry groups in the index rose. Utilities and health care rose the most. S&P’s indexes measuring technology and energy stocks edged down less than 0.3 percent each.
The Nasdaq rose 1.70 points, less than 0.1 percent, to 2,541.01.
In corporate news, Michael Kors Holdings Ltd. jumped 21 percent to $24.20 on its first day of trading. The initial public offering valued the fashion design company at $3.8 billion.
Novellus Systems Inc. jumped 16 percent. The semiconductor equipment maker said late Wednesday that it was being acquired by rival Lam Research Corp. Lam fell 8 percent.
Rite Aid Corp. rose 3.5 percent. The drugstore chain announced that losses had narrowed in its third quarter.
European markets rose slightly, a day after big declines, as an auction of Spanish government bonds drew strong demand from investors. Germany’s DAX rose 1 percent; France’s main stock index rose 0.6 percent.
The euro rose against the dollar, moving back above $1.30, a day after hitting an 11-month low. The yields on Spanish and Italian government fell, a sign that investors were less worried about the ability of those countries to pay back their debts.
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Olympus Corp. faces a deadline to report revised earnings Wednesday to avoid being removed from the Tokyo stock market after a whistle-blower questioned fees and acquisitions that turned out to be part of a deception to hide $1.5 billion in investment losses.
Former President and Chief Executive Michael Woodford, who has been in the limelight for first raising questions about exorbitant fees and acquisitions, is back in Tokyo to meet investors and legislators, and to try to lead a turnaround at the camera and medical equipment maker.
Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after going public with his doubts about massive consulting fees on the acquisition of British medical equipment maker Gyrus Group in 2008 and other spending.
He was in Japan last month to meet police and other investigative authorities. He has said he wants to fix Olympus and has expressed hopes shareholders will back him.
Olympus President Shuichi Takayama has said Woodford lacks the right teamwork style to lead the company, although now acknowledges the positive side of Woodford’s whistleblowing. Olympus initially denied any wrongdoing and lambasted Woodford.
No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.
Meeting the Wednesday deadline for a revised earnings report is a must for Olympus to stay on the stock exchange, but it could still be delisted if seriously dubious accounting is found fast cash.
A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.
As of 2003, Olympus had racked up 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s, according to the company.
The overpriced fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, Olympus says.
Japanese magazine Facta was first to report the dubious money.
Tsuyoshi Kikukawa, who was behind Woodford’s appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.
Last month, Olympus dismissed Executive Vice President Hisashi Mori, saying he was involved in the cover-up along with Kikukawa. A company auditor also resigned.
Olympus stock plunged after the scandal broke but has since recouped some of those losses on optimism it might not be booted off the Tokyo Stock Exchange.
Two telecommunications giants now control the Toronto Maple Leafs, the biggest prize in Canadian sport.
The Ontario Teachers’ Pension Plan announced on Friday that will sell its 79.5 per cent stake in Maple Leaf Sports and Entertainment, owners of the iconic Leafs, to Rogers Communications and BCE for $1.32 billion.
The companies made the announcement in a morning news conference at the Air Canada Centre to confirm the blockbuster deal.
“MLSE is truly a world-class organization with some of the most iconic brands and popular sports teams across North America,” said Nadir Mohamed, Rogers president and CEO in a statement.
“This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it.”
“Sports content is king. Let’s face it nobody wants to watch a game two days later,” Mohammed said during the announcement Friday morning. “Between the two organizations I can’t think of anybody that can bring live sports to Canadians wherever they are without missing a second.”
MLSE also owns the Raptors of the NBA, Toronto FC of Major League Soccer, the Marlies of the American Hockey League, the Air Canada Centre, two specialty television channels and Maple Leaf Square, a condominium development adjacent to the arena.
Under the agreement, Rogers and Bell Canada will divide their 75 per cent share of MLSE evenly. And Larry Tanenbaum whose firm, Kilmer Sports, owned 21 cash till payday.47 per cent of MLSE increases its ownership to 25 per cent.
“I am excited to welcome our new partners Bell and Rogers,” said Tanenbaum, who remains as chairman of MLSE, in a statement. “I am proud this is a made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch.”
“It really means we’re moving for those championship teams, the Stanley Cup, that NBA championship,” Tanenbaum said
There were provisions in the existing shareholders agreement that gave Tanenbaum key rights that would make it difficult for any owner with telecommunications properties to take advantage of MLSE’s rich broadcast assets without his approval.
Reports surfaced two weeks ago that Rogers and BCE had been working on an alliance to share control of MLSE, which also owns other sports properties and lucrative broadcast interests.
At that time, Teachers, one of the country’s biggest pension plans with assets of more than $107.5 billion, indicated it was pulling its stake off the market after an extensive search that formally started earlier this year. Teachers’ noted that several parties had made offers.
The Star reported a year ago that Teachers had been quietly talking to possible suitors including Rogers about selling its stake. Teachers’ played down the story but four months later announced that it would formally explore a sale.
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A Russian businessman who owns Portsmouth Football Club has been arrested in London in connection with a Lithuanian money laundering probe.
Lithuanian prosecutors had issued a European arrest warrant for 36-year-old Vladimir Antonov, and his Lithuanian partner Raimondas Baranauskas, probing alleged fraud and money laundering at a bank that local authorities say will have to be liquidated.
Prosecutors said Friday that Baranauskas, 53, had also been detained in London. When asked whether Antonov had been been arrested, London police read a statement saying that two men _ age 36 and 53 _ were arrested in response to a Europe-wide arrest warrant.
British officials do not name suspects until they have been charged.
Police say the two men are due to appear in a London court later Friday.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
VILNIUS, Lithuania (AP) _ Lithuania’s central bank said it would dismantle a bank controlled by a Russian businessman after regulators discovered large sums of money missing.
Lithuanian prosecutors said Friday that Raimondas Baranauskas, minority owner of Snoras Bank, has been detained in London after they had issued a European arrest warrant on Wednesday.
Prosecutors could not say whether Russian citizen Vladimir Antonov, the bank’s majority owner, was also detained. Antonov is the owner of the Portsmouth football club.
The Bank of Lithuania said late Thursday that the dismantling of Snoras was the best solution for the Baltic state’s financial system and economy, which have been jolted after the bank was nationalized and its operations halted.
Bank chief Vitas Vasiliauskas said should not waste taxpayers’ money trying to help “a plane that won’t fly.”
“There is no other way to solve this situation,” he said.
Hundreds of millions of euros (dollars) are believed to have been siphoned off from Snoras and Latvijas Krajbanka, a subsidiary bank in neighboring Latvia.
Janis Brazovskis, an official with Latvia’s Finance and Capital Markets Commission who was appointed to oversee Latvijas Krajbanka, said Wednesday that Antonov’s failed attempt to acquire the troubled Swedish automaker Saab might have triggered the downfall of the two Baltic banks.
He said that approximately 100 million lats ($200 million) were siphoned from the bank to increase its charter capital and finance Antonov’s investment projects _ including the unsuccessful takeover of Saab.
Deposit holders in both countries are now forced to wait in long lines to withdraw money from cash machines, while companies and municipalities have seen the working capital virtually disappear.
Still, authorities in both Lithuania and Latvia say the two banks’ collapse does not pose a systemic risk since they are mid-sized and the two states have ample reserves to guarantee deposits.
Latvijas Krajbanka was Latvia’s 10th largest bank by assets after it was taken over by regulators on Monday.
Barclays PLC reported a 7 percent rise in net profit in the first nine months on Monday, largely on the back of a one-time boost from investment banking.
The bank reported a net profit of 2.65 billion pounds ($4.25 billion) compared to 2.48 billion pounds a year earlier.
Revenue was up 10 percent to 25.2 billion pounds in part due to a 3 billion pounds credit gain in the third quarter.
The bank said the gain came from widening spreads on Barclays Capital’s structured products, a range of investment products which typically include complex derivatives.
For the third quarter, pretax profit was up from 327 million pounds a year ago to 2.4 billion pounds, again reflecting the one-off gain. Adjusted pretax profit for the quarter was up 5 percent to 1.34 billion pounds, broadly in line with the market consensus.
The adjusted figure excludes the own credit, a 1.8 billion pounds writedown on its stake in the investment firm BlackRock Inc. and other one-time items.
Barclays Capital third-quarter income excluding the gain was down 15 percent to 2.25 billion pounds.
Barclays shares were up 2.9 percent to 207 pence in early trading on the London Stock Exchange.
“Overall, these results are slightly better than we had expected,” said Gary Greenwood, analyst at Shore Capital, who nonetheless rates the shares as “sell.”
The bank reported that it had reduced its exposure to sovereign debt in Spain, Italy, Portugal, Ireland and Greece by 31 percent in the quarter to 8 billion pounds, with about half of the remaining exposure in Italy.
WikiLeaks _ whose spectacular publication of classified data shook world capitals and exposed the inner workings of international diplomacy _ may be weeks away from collapse, the organization’s leader said Monday.
Although its attention-grabbing leaks spread outrage and embarrassment across military and diplomatic circles, WikiLeaks’ inability to overturn the block on donations imposed by American financial companies may prove its undoing.
“If WikiLeaks does not find a way to remove this blockade we will simply not be able to continue by the turn of the new year,” founder Julian Assange told journalists at London’s Frontline Club. “If we don’t knock down the blockade we simply will not be able to continue.”
As an emergency measure, Assange said his group would cease what he called “publication operations” to focus its energy on fundraising. He added that WikiLeaks _ which he said had about 20 employees _ needs an additional $3.5 million to keep it going into 2013.
WikiLeaks, launched as an online repository for confidential information, shot to notoriety with the April 2010 disclosure of footage of two Reuters journalists killed by a U.S. military strike in Baghdad.
The Pentagon had claimed that the journalists were likely “intermixed among the insurgents,” but the helicopter footage, which captured U.S. airmen firing on prone figures and joking about “dead bastards,” unsettled many across the world.
The video was just a foretaste. In the following months, WikiLeaks published nearly half a million secret military documents from the wars in Iraq and Afghanistan. As a whole the documents provided an unprecedented level of detail into the grueling, bloody conflicts. Individually, many raised concerns about the actions of the U.S. and its local allies _ for example by detailing evidence of abuse, torture and worse by Iraqi security forces.
Although U.S. officials railed against the disclosures, claiming that they were putting lives at risk, it wasn’t until WikiLeaks began publishing a massive trove of 250,000 U.S. State Department cables late last year that the financial screws began to tighten.
One after the other, MasterCard Inc., Visa Europe Ltd., Bank of America Corp. Western Union Co. and Ebay Inc.’s PayPal stopped processing donations to WikiLeaks, starving the organization of cash as it was coming under intense political, financial and legal pressure.
Assange said Monday that the restrictions _ imposed in early December _ had cut off some 95 percent of the money he believes his organization could have received.
WikiLeaks spokesman Kristinn Hrafnsson defended the estimate as “conservative,” noting that in 2010 the average monthly donation to WikiLeaks had been more than 100,000 euros ($140,000), while in 2011 the amount had fallen to between 6,000 and 7,000 euros business card.
Each company has given its own explanation for the blockade, expressing some level of concern over the nature of the secret-spilling site. But WikiLeaks supporters often point out that MasterCard and Visa still process payments for fringe groups such as the American KKK or the far-right British National Party and that neither WikiLeaks nor any of its staff have been charged with any crime.
Assange said his group was being subjected to corporate censorship, a sentiment backed by Dave Winer, a visiting scholar at New York University’s Arthur L. Carter Journalism Institute.
“This was done without due process, without any charges, and has been in place since December last year,” he said in a blog post about the blockade. “If I want to give $100 to WikiLeaks, and if I want to use my credit card to do so, who are they to say I can’t?”
WikiLeaks has recently taken steps to work around the blockade, including a series of auctions and moves toward cell phone-enabled donations. Assange said Monday that his group was switching its focus from soliciting small-time donations, which typically net about $25, to getting money from a “constellation of wealthy individuals.”
He didn’t elaborate, but Assange has several wealthy backers, including Frontline Club founder Vaughan Smith, whose manor house in eastern England has been put at Assange’s disposal while he fights extradition to Sweden on sex crime allegations.
A decision on whether to extradite him is expected in the next few weeks. Speaking to journalists after Monday’s appearance, Assange put his chances of being extradited without the possibility of appeal at “30 percent.”
Also looming in the background is a U.S. grand jury investigation into WikiLeaks’ disclosures. Earlier this month a small California-based Internet provider became the second company to confirm it was fighting a court order demanding customer account information as part of the American WikiLeaks inquiry.
WikiLeaks’ suspected source, U.S. Army intelligence analyst Bradley Manning, remains in custody at Fort Leavenworth prison in Kansas.
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Online:
WikiLeaks: http://wikileaks.ch/
Frontline Club: http://www.frontlineclub.com/
QUOTE OF THE WEEK
“I believe history will remember Steve Jobs as one of the greatest innovators of all time, the Thomas Edison of the 21st century one hour payday loan.”
UBS was under pressure on Friday to explain how its managers failed to catch a $2 billion loss due to rogue trading, with experts calling into question the Swiss bank’s ability to turn around its scandal-hit image.
As police in London obtained a 12-hour extension to question the trader, 31-year-old trader Kweku Adoboli, the bank’s investors and the wider industry wondered about the fallout, both for UBS as a storied Swiss financial institution and for the banking sector.
Commentators and politicians called for senior managers at UBS to take responsibility for the loss, which the bank said could put its third-quarter results in the red. Ratings agency Moody’s put UBS’s credit grade on review for possible downgrade, citing worries over the future of its London-based investment unit.
UBS shares on Friday recovered a fraction of the losses they suffered the day before. Investors took the chance to buy UBS shares cheaply, sending their price up 2.5 percent to 10 Swiss francs ($11.45) on the Zurich exchange by noon. Shares had slumped 10 percent the day before, after the bank said a lone employee had caused the massive loss with unauthorized trades.
Swiss media questioned how one UBS trader could have managed to cause a $2 billion loss without others around him noticing sooner. Respected banking professor Hans Geiger told Swiss television station SF he doubted the lone trader account put forward by UBS.
Police in London continued their interrogation of Adoboli. Normally police cannot hold a suspect longer than 24 hours without pressing charges. But under British law, a police superintendent can extend the 24-hour detention period by up to 36 hours for serious crimes. After that, police would need to get a court order to continue questioning for up to 96 hours more.
UBS spokesman Andreas Kern declined to comment on a report in Swiss newspaper Tages-Anzeiger on Friday, that the entire trading team in London where the alleged unauthorized deals took place had been suspended.
Kern said the paper’s report of fresh job cuts at the investment bank referred to a reduction of about 1,600 posts already announced last month as part of a plan to save some 2 billion francs over the next two years.
The international banking industry has been trying to put stricter controls on its traders in the wake of a 2008 scandal at France’s Societe Generale, when trader Jerome Kerviel gambled away euro4.9 billion ($6.7 billion), and the infamous case of Nick Leeson, who made so many unauthorized trades that it caused the collapse of the British bank Barings in 1995.
Chief executive Oswald Gruebel was brought in two years ago to rehabilitate the bank’s damaged reputation after a series of missteps that included massive losses in the subprime mortgage market and an embarrassing U.S. tax evasion case.
The scandal casts doubt on his ability to improve the bank’s image.
Moody’s ratings agency cited such concerns when on Thursday night it placed UBS’s credit grade on review for a possible downgrade.
Although it said the $2 billion losses would be manageable for a bank the size of UBS, they “call into question the Group’s ability to successfully complete the rebuilding of its investment banking operations.”
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Bob Barr contributed to this report from London.
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