Treasuries erased losses as German and French finance ministers meet before a summit of regional leaders to discuss ways to contain the European debt crisis, stoking demand for government debt.
U.S. 10-year yields rose earlier on speculation record-low yields may limit demand as the government auctions $99 billion of coupon-bearing debt this week starting tomorrow. The U.S. will start this week
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Facebook’s IPO is causing a frenzy among investors eager to get a piece of the social networking website.
Whether it’s a good idea to jump in when FB debuts Friday on the Nasdaq is another story.
"Investors shouldn’t invest in any one stock unless they can afford to lose it all," said Jay Ritter, professor of finance at the University of Florida. "With a growth company like Facebook, there is a lot of upside potential, but there is also substantial downside risk if the company fails to meet expectations."
Buying shares during the initial public offering process is particularly challenging for small investors. Shares of an IPO are primarily distributed to the institutional investors, mutual funds and hedge funds which are the biggest clients of the major Wall Street banks that are underwriting the offering.
While Facebook is making an effort to make some of its hotly sought after shares accessible to all, they’ll still be hard to come by.
The demand is so strong that Facebook raised the target price range for its stock to between $34 and $38 per share, from the $28 to $35 range it set earlier this month. And early Wednesday, Facebook said it will sell 25% more of its shares.
Sterne Agee analyst Arvind Bhatia says there’s a buying opportunity for investors if they’re able to snag Facebook shares within the IPO offering range. But to those who have to wait until Facebook shares begin trading on the open market on Friday, Bhatia urges caution.
Facebook IPO is no safe haven
Given all the hype, experts anticipate that the company will have a strong debut.
For example, when Groupon () went public last November, the stock opened at $28, 40% above its IPO price, and surged as much as 56% on its first day of trading when it hit an all-time high of $31.14.
If investors had purchased shares of Groupon during their first day of trading, they’ve likely had a tough time booking decent returns. The stock has been trading below its IPO price for months, and is currently 40% below its IPO price.
Similarly, Zynga () shares surged as much as 15% during their market debut in December, but ended up closing that day 5% below the IPO price. Shares are now trading more than 14% below the IPO price.
"I would say it’s better for individual investors to generally avoid playing the IPO game until a few quarters after the company goes public so that its stock is a bit more established," said Bhatia. "Or they need to be able to stomach a lot of volatility."
Seniors clamoring to invest in Facebook IPO
If you’re daring enough to try buying Facebook shares on opening day, there are a few ways to protect yourself.
For example, by using a so-called limit order, you can set a ceiling for the purchase price that you’ll be comfortable paying, said Tom Schrader, managing director at Stifel Nicolaus.
If the stock stays above your limit, or if other limit orders snatch up all the shares available at the limit price, the trade won’t be executed. You can also specify whether you want to consider buying the stock with the limit order just at the open or throughout the trading day.
On the flip side, if you nab some shares and want to sell them at a certain price, you can use a limit order that sets a floor on the sales price that you’re willing to accept, helping you prevent selling your shares for less than you want.
The hard part is determining what’s a fair price for a share of Facebook. Morningstar’s analyst Rick Summer pegs fair value for the stock at $32.
"The enthusiasm for Facebook is not misplaced, but the market may be underestimating near-term challenges for the company," he said.
How small investors can get in on Facebook IPO
In particular, Summer noted that while Facebook will be able to translate its immense user base - over 900 million a month — into massive growth over the long run, "the ability to further monetize current users represents a significant hurdle which must be overcome."
Concerns are particularly high about the company’s ability to monetize the growing number of users that are accessing Facebook on mobile devices.
"We see mobile monetization as a significant long-term growth opportunity for Facebook, but with some initial challenges," said Sterne Agee’s Bhatia, whose price target for Facebook’s stock over the next 12 months is $45. "For example, it is not yet clear if most of the mobile advertising growth will be incremental or will cannibalize online advertising."
Advertising accounted for 85% of Facebook’s total 2011 revenue, but to-date, most of Facebook’s ads have been display ads: banners, images and other graphics, ignoring mobile devices.
Another worry among analysts is Facebook CEO Mark Zuckerberg’s tight grip on the company. After the IPO, the young billionaire will control about 57% of the voting power.
Morningstar’s Summer notes that Facebook’s recent purchase of Instagram for $1 billion reportedly happened with little involvement from the company’s board of directors.
"If Mr. Zuckerberg loses discipline in allocating the company’s capital, there can be no guarantee that any such mechanism would prevent the company from destroying shareholder value," he said.
Following an IPO-induced pop, Summer said the focus on these looming challenges may lead to stock price declines and "ultimately create a very interesting buying opportunity for the shares at a later date."
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British Prime Minister David Cameron says he discussed News Corp.’s bid to take full control of a British broadcaster with James Murdoch, but denies promising to support the deal in return for favorable coverage from the media giant’s newspapers.
A judge-led inquiry into media ethics in Britain has raised questions about the government’s links to News Corp., particularly as it deliberated on whether the firm should be authorized to take full control of British Sky Broadcasting, in which it holds a 39 percent stake.
Cameron told BBC television Sunday that had chatted about the takeover bid with James Murdoch at a Christmas party, but insisted he had not brokered any tit-for-tat deal with him or his media mogul father Rupert Murdoch.
Laclede Group Inc., the owner of Missouri’s largest natural gas utility, overcame one of the mildest winters on record to post a higher fiscal second-quarter profit.
Net income for the three months ended March 31 rose 6 percent to $29.7 million, or $1.32 a share, from $27.9 million, or $1.25 a share, for the same period last year, the St. Louis-based company said.
Sales fell more than a third to $358.2 million.
Earnings for the company’s gas utility, Laclede Gas Co totally free credit score., fell slightly to $25.9 million as customers ran their furnaces less because of the warmer winter.
The company’s wholesale natural gas marketing business more than made up the difference, more than doubling its profit to $3.8 million.
Europe may add an annex to its budget treaty spelling out how countries can boost growth as the bloc shifts its emphasis on tackling the debt crisis, a German government official said.
Steps to raise competitiveness along with structural reforms are likely to feature in the prescriptions for growth, with a target date for completion by the June 18-19 Group of 20 leaders
Parts of the Canadian housing market, especially condominiums in some major cities, have seen prices jump to levels that warrant caution, the head of the country
Spain will restore border checks and suspend the treaty that makes the EU frontier-free for travelers as it hosts a European Central Bank meeting next month.
An Interior Ministry official said Friday the so-called Schengen Treaty will be suspended right before and during the May 3 meeting in Barcelona. The bank’s governing council meets outside its Frankfurt headquarters periodically.
Spain is suspending the accord because it believes large numbers of protesters will come to Barcelona, in particular people from Italy and Greece, which are reeling under austerity measures guaranteed fast personal loans.
The official spoke on condition of anonymity in line with ministry policy.
Barcelona saw riots during a March 29 general strike. A beefed-up police presence is planned for the ECB meeting.
Iran is signaling a possible compromise offer heading into critical talks with world powers deeply suspicious of its nuclear program: offering to scale back uranium enrichment but not abandon the ability to make nuclear fuel.
The proposal _ floated by the country’s nuclear chief as part of the early parrying in various capitals before negotiations get under way Friday _ suggested that sanctions-battered Iran is ready to bargain. But this gambit, at least, appeared to fall short of Western demands that Iran hand over its most potent nuclear material.
Still, the public jockeying ahead of the talks pointed to an attempt to ease a standoff that has rattled nerves and spooked markets with seesaw oil prices and threats of Israeli military strikes. The talks involving Iran and the five permanent U.N. Security Council nations plus Germany, to be held in Istanbul, are the first direct negotiations on Tehran’s nuclear program since a swift collapse more than 14 months ago.
Despite far-reaching complexities, the dispute effectively boils down to one issue: Iran’s stated refusal to close down its uranium enrichment labs.
For Iran, uranium enrichment is a proud symbol of its scientific advances and technological self-sufficiency. Iran’s president, Mahmoud Ahmadinejad, called the nuclear program on Sunday “a locomotive” for other showcase projects such as Iran’s space effort.
The U.S. and its allies contend that the same sites that make fuel for reactors could also eventually churn out weapons-grade material. Iran has repeatedly insisted that its nuclear program is for peaceful purposes only.
The ideas put forth late Sunday by the nuclear chief, Fereidoun Abbasi, are an attempt to at least acknowledge this huge divide.
Abbasi said Tehran could eventually stop its production of the 20 percent enriched uranium needed for a research reactor, used for medical research and treatments. But, he added, Iran would continue enriching uranium to lower levels of about 3.5 percent for power generation.
The framework addresses one key Western concern. The U.S. and others worry the higher-enriched uranium could be turned into warhead strength _ more than 90 percent enriched _ in a matter of months.
Yet Abbasi also directly snubbed a demand backed by the U.S. and some other countries. They want Iran’s stockpile of 20 percent-enriched uranium to be transferred out of the country. Abbasi indicated that it would remain in Iran.
“Such a stockpile could enable Iran to make a bomb in the future, should it decide to do so,” said Meir Javedanfar, an Iranian-born political analyst now based in Israel.
“Unless an agreement is reached whereby this stockpile is transferred abroad for conversion into nuclear fuel or, at the very minimum, placed under international supervision in an another country, it will be very difficult for the (world powers) to accept Iran’s current offer,” he said.
Last week, U.S. Secretary of State Hillary Rodham Clinton said it was up to Iran to show that its claim of rejecting nuclear weapons is “not an abstract belief but it is a government policy.”
“And that government policy can be demonstrated in a number of ways, by ending the enrichment of highly enriched uranium to 20 percent, by shipping out such highly enriched uranium out of the country, by opening up to constant inspections and verifications,” she said at a conference in Istanbul to seek ways to aid opposition forces in Syria _ Iran’s main Arab ally.
Clinton will not be attending Friday’s conference on Iran. The State Department’s third-ranking diplomat, Under Secretary of State for Political Affairs Wendy Sherman, will lead the U payday loan companies.S. delegation.
Abbasi also insisted that Iran will never close down its new underground enrichment facilities south of Tehran, saying it would be “illogical” for the West to raise such a demand.
It’s unclear, however, whether Abbasi was conveying a real negotiating position or simply testing the waters.
The proposal came from an unconventional venue, airing just before midnight on a state-run TV channel for Iranians and other Farsi-speakers abroad. Iran has used its array of government-controlled media, such as its Arabic-language Al-Alam channel, to make regional and international policy statements.
Abbasi said production of uranium enriched up to 20 percent is not part of the nation’s long-term program _ beyond amounts needed for its research reactor in Tehran _ and insisted that Iran “doesn’t need” to enrich beyond the 20 percent levels.
“The job is being carried out based on need,” he said. “When the need is met, we will decrease production and it is even possible to completely reverse to only 3.5 percent” enrichment levels.
Meanwhile, Foreign Minister Ali Akbar Salehi was quoted on the Iranian parliament’s website Monday as saying he hopes for some progress in the talks. But he warned that Iran would not accept preconditions _ an apparent reference to last year’s impasse.
The U.S. and its allies have sought to press Iran to suspend uranium enrichment in exchange for receiving reactor-ready fuel from abroad. Iran has pushed back by refusing to curtail enrichment, which is permitted under the U.N. treaty overseeing the spread of nuclear technology.
“We will honestly try to have the two sides conclude with a win-win situation in which Iran achieves its rights while removing concerns of five-plus-one group,” Salehi said, using the name often used for the five permanent Security Council members and Germany. “But imposing any conditions before the talks would be meaningless.”
Abbasi’s remarks also could be a bid to tone down the rhetoric.
Last week, Iranian lawmaker Gholam Reza Mesbahi Moghadam claimed Tehran has the know-how and the capability to produce a nuclear weapon, but would never do so. Iran’s supreme leader, Ayatollah Ali Khamenei, also has said that Iran does not seek nuclear arms and described them as against the tenets of Islam.
“The Iranians themselves have said, at the level of the supreme leader, that they don’t have any weapons intention,” U.S. State Department spokeswoman Victoria Nuland said Monday. “Well, if that is in fact the case, then it ought be relatively straightforward for them to demonstrate that to the international community’s satisfaction, and that’s what we’re talking about when we see them.”
After a protracted flap over the venue for the talks, Iranian state TV reported Sunday that both sides had agreed on Istanbul. It said a second round would be held in Baghdad, and that its timing would be decided during the meeting in Turkey. This suggested that Iran views the process as a potential slow, step-by-step series of talks.
The venue still has to be formally confirmed by the European Union’s foreign affairs chief Catherine Ashton. But a diplomat familiar with the preparations for the talks confirmed to The Associated Press on Monday that Istanbul had been chosen for the first round.
The diplomat demanded anonymity because he was not authorized to disclose the information ahead of the formal announcement.
Fisker automotive executives said Wednesday the company is open to building its new Atlantic electric car someplace besides the former General Motors factory in Delaware where they originally planned the car’s assembly.
While they say they are still committed to the former GM plant, Fisker spokesman Russell Datz told CNNMoney that the company is flexible enough to make the car elsewhere, should a better offer materialize.
Company chairman Henrik Fisker told CNNMoney on Tuesday that the automaker has secured about $400 million in private equity financing.
Prior to Tuesday’s announcement, Fisker had been waiting on funding from a $529 million U.S. government loan so it could begin retooling the Delaware factory. The plant used to make the Pontiac Solstice, Saturn Sky and Opel GT convertibles for GM (, Fortune 500).
Fisker has already received $193 million of the government money and recently began selling its luxury, $103,000 plug-in "range extended" electric car called the Karma.
But the rest of the money has been held up due to what Fisker says were some missed production targets with the Karma guaranteed pay day loans.
The Karma is assembled in Finland.
Vice President Joe Biden, Delaware Gov. Jack Markell and Fisker CEO Henrik Fisker were together in 2009 to announce plans for the Delaware production facility.
At the time, union workers were promised the chance to fill many of the 2,000 factory jobs producing the plug-in electric sedan.
Besides the money issues, Fisker has experienced other problems of late.
They include a battery recall and some less-than-positive reviews of the Karma. Critics say the car does not perform as well as it should to justify its price.
The DOE has also come under intense scrutiny for its loan program in light of Solyndra, the failed solar panel maker that got a $535 million government backed loan.
CNNMoney’s Peter Valdes-Dapena contributed to this report.
Bank of England policy makers will maintain the size of their bond-buying program next week amid a split over whether the economy needs more stimulus, economists forecast.
The nine-member Monetary Policy Committee led by Governor Mervyn King will hold the target at 325 billion pounds ($521 billion) on April 5, according to all 39 economists in a Bloomberg News survey. They will also leave their key interest rate at a record low of 0.5 percent, said all 53 economists in a separate poll.
Divisions have emerged as a surge in oil prices threatens to stoke an inflation rate now in its third year above target while Europe
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