The impending Apple iPad 3 announcement may be getting everyone
Oil prices rose to a fresh nine-month high near $109 a barrel Friday in Asia amid signs the U.S. economy is improving against a backdrop of elevated tensions in the Middle East over Iran’s nuclear program.
Benchmark crude for April delivery was up 75 cents to $108.58 per barrel midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.55 to settle at $107.83 in New York on Thursday.
Brent crude was up 50 cents at $124.22 per barrel in London.
The government said Thursday that the number of people seeking unemployment benefits last week was unchanged and that the four-week average was the lowest in four years.
Traders brushed off evidence that crude demand in the U.S. remains weak. The Energy Department’s Energy Information Administration said Thursday crude inventories rose 1.6 million barrels last week and that oil demand has dropped 6.7 percent from a year ago.
“The ability of crude to post new highs in the face of what appeared to be a bearish EIA report attests to the underlying strength of this price advance,” energy trader and consultant Ritterbusch and Associates said in a report. “The oil market has evolved into somewhat of a self perpetuating cycle in which new highs beget new buying that forces new highs.”
Crude has jumped from $96 earlier this month amid growing tension over Iran’s nuclear program and fears global crude supplies could be disrupted. Some analysts expect economic sanctions by the U.S. and Europe and countermeasures by Iran will help keep crude prices elevated this year.
“There is a relatively high and growing probability to a scenario in which there is no resolution in 2012, in which oil prices grind higher along with a gradual escalation of tension,” Barclays Capital said in a report.
In other energy trading, heating oil rose 0.1 cent to $3.29 per gallon and gasoline futures added 0.8 cent to $3.30 per gallon. Natural gas fell 3.2 cents to $2.59 per 1,000 cubic feet.
Singapore
Greece’s finance minister says all pending issues in its international creditors’ requirements for the country’s second bailout will be completed ahead of a Wednesday evening conference call between eurozone finance ministers.
Evangelos Venizelos said that “very few” issues remained and would be wrapped up before the call at 6p.m. Greek time (1600GMT) Wednesday.
The call is being held instead of a meeting between the ministers, which was called off Tuesday because Athens had not met all the requirements, including plugging a euro325 million ($427.99 million) financing gap and providing written guarantees from the governing coalition’s party leaders.
Venizelos made the comments after a meeting with President Karolos Papoulias, who he said will give up his presidential salary to help in the crisis.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
ATHENS, Greece (AP) _ The leaders of the two parties participating in Greece’s governing coalition have prepared written assurances committing to implement the terms of Greece’s new bailout _ a key requirement demanded by international creditors, officials said Wednesday.
Socialist leader George Papandreou signed the letter Tuesday night, and Conservative head Antonis Samaras prepared his letter Wednesday morning and was to send it within the day, the officials said.
A meeting of eurozone finance ministers that had been expected Wednesday on Greece’s second multibillion bailout was postponed. Jean-Claude Juncker, who chairs the ministers’ meetings, said Tuesday night that “further technical work” was needed from Athens. This included providing the written assurances and detailing how Greece will plug a euro325 million ($428 million) financing gap, he said.
Wednesday’s meeting had been expected to give the green light for a bond-swap deal with private creditors designed to slice some euro100 billion ($132 billion) off Greece’s debt.
The swap deal, which will take several weeks to implement, has to be finalized by March 20, when Greece faces a euro14.5 billion ($19.1 billion) bond redemption that it cannot pay.
Instead, the ministers will hold a conference call Wednesday evening, and will meet in person in Brussels next Monday.
In Athens, a government official said the issue of the euro325 million gap was expected to be resolved within the day. On Tuesday, government spokesman Pantelis Kapsis said the funds would come “from spending cuts from ministries, from areas including defense.”
The bond swap deal is an integral part of Greece’s second international bailout, worth euro130 billion ($171 billion) in loans, without which the country faces a default that could drag down other economically vulnerable eurozone countries and threaten Europe’s single currency itself.
The country has been surviving since May 2010 on funds from a first, euro110 billion ($145 billion) package of rescue loans. But harsh austerity measures demanded in return for the emergency loans have hammered Greece’s economy, leaving it in a fifth year of recession. Official figures Tuesday showed that the Greek economy shrank by 7 percent on the year in the fourth quarter of 2011.
The austerity measures, which have included repeated waves of tax hikes and cuts to salaries and pensions, have also led to an explosion of public anger, with strikes and demonstrations often turning violent.
On Sunday, rioters burned buildings in central Athens and clashed with riot police while lawmakers approved a new round of austerity, slashing the minimum wage and planning mass layoffs in the civil service as part of requirements for the second bailout.
Firefighters doused smoldering buildings and cleanup crews swept rubble from the streets of central Athens on Monday following a night of rioting during which lawmakers approved harsh new austerity measures demanded by bailout creditors to save the nation from bankruptcy.
Police said rioters destroyed or damaged more than 110 buildings, of which 50 were burned. They included nine listed as national heritage buildings, mostly in the neoclassical style, while 30 stores were looted.
Smoke still rose from the remains of a landmark 1870 building which had housed one of the capital’s most loved cinemas, the Attikon, since 1916. About 100 people held a candle-light protest outside the gutted structure late Monday.
“Criminals targeted all that was best in the city of Athens, its neoclassical monuments,” said Thanassis Davakis, cultural policy chief of the conservative New Democracy party, a coalition government partner. “The damage must be swiftly redressed and the city’s memory restored.”
The stench of tear gas still hung in the air on Monday, choking passers-by, while traffic lights at many major intersections were out after being smashed. The Athens municipality said cleanup crews had gathered an estimated 40 tons of broken marble and rocks from the streets of the center, while railings, drainage covers and paving stones from sidewalks also suffered extensive damage.
More than 170 people were hurt in the rioting which also broke out in other Greek cities. Authorities said 109 police needed medical care after being injured by gasoline bombs, rocks and other objects hurled at them, while at least 70 protesters were hospitalized.
Police arrested 79 people _ including a 14-year-old _ and detained a further 92, while in several cases they had to escort fire crews to burning buildings after hooded and masked protesters prevented access, injuring four firefighters. Police also said they were investigating a complaint from a businessman that rioters demanded money to leave his establishment intact.
A police statement said the suspects would be charged with offenses ranging from attempted murder and possession of explosives to looting.
“(The rioters) intentionally picked traditional buildings to burn,” New Democracy leader Antonis Samaras said. “These scum must know that when the time comes I will rip off their hoods.”
Athens Traders’ Association head Panaghis Karellas demanded the dismissal of Public Order Minister Christos Papoutsis, and said afflicted shopowners should receive state compensation.
“Once again, those in positions of responsibility, even though they should have been prepared, were unable to fulfill their duty and secure the well-being of citizens and visitors, cultural landmarks and historic buildings, public and private property and our country’s international image,” the association said in a statement.
The ESEE national commerce confederation said most of the badly damaged shops will very likely never open again. “The center of the capital looks as if it has been bombed,” an ESEE statement said.
The rioting began Sunday afternoon after more than 100,000 protesters marched to the parliament ahead of a vote on drastic austerity measures that include axing one in five civil service jobs over the next three years and slashing the minimum wage by more than a fifth no fax cash advance.
Lawmakers approved the bill in a 199-74 vote, to the relief of investors who pushed the Athens stock index up 4.7 percent.
The vote was crucial for the country to secure euro130 billion ($172 billion) in new rescue loans and avoid a potentially catastrophic default next month _ bankruptcy could push Greece out of Europe’s euro currency union, drag down other troubled eurozone countries and further roil global markets.
The new bailout deal, which has not yet been finalized, will be combined with a massive bond swap deal to write off half the country’s privately held debt, reducing Greece’s debt load by about euro100 billion.
However, it could take time before the country receives any of the cash. For both deals to materialize, Greece has to persuade deeply skeptical creditors it has the will to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.
Eurozone finance ministers meet on Wednesday to discuss the issue, after refusing to approve the plan during a meeting last week, saying Athens had to first approve the new austerity measures.
But German Finance Ministry spokeswoman Marianne Kothe said the ministers will not make a final decision on the second aid package Wednesday. She said the bond swap agreement must be finalized first, and the ministers will focus on measures “necessary for the second Greek package.”
Before signing off on the bailout, the eurozone ministers also want Greek political leaders to commit in writing to uphold the austerity plan even after the general election in April. Government spokesman Pantelis Kapsis said the written guarantees are needed by Wednesday.
Although the bill passed the Parliamentary vote, there was strong dissent among the majority Socialists and rival Conservatives who make up Greece’s interim coalition government. The Socialists and Conservatives expelled the 22 and 21 lawmakers respectively, reducing their majority in the 300-member parliament from 236 to 193.
Germany gave the vote result a cautious welcome, with Foreign Minister Guido Westerwelle describing it as “a first significant step along the right road.”
“However, the actual difficult work with implementing the reforms that have been agreed on is only just starting now,” he said. “That is the decisive precondition for Germany and the other euro partners being able to stand by Greece with a further rescue package.”
The new austerity comes after two years of deep spending cuts and repeated tax hikes that have sent unemployment soaring to more than 20 percent and left the country struggling through a fifth year of recession.
Those measures were taken in return for a first, euro110 billion ($145 billion) package of rescue loans, but despite the cutbacks, Greece repeatedly failed to meet its targets in reducing its debt and deficit and increasing economic competitiveness.
____
Geir Moulson and Juergen Baetz in Berlin and Nicholas Paphitis in Athens contributed to this report.
PepsiCo announced plans on Thursday to cut about 8,700 jobs as part of an effort to save some $1.5 billion in costs.
PepsiCo said the new cost-cutting plan will occur in 30 countries through 2014. PepsiCo spokesman Jeff Dahncke said that less than 2,000 of the job cuts will occur in the U.S., where the company employs 100,000 workers.
PepsiCo’s (, Fortune 500) stock slipped 4% in morning trading.
PepsiCo, which is based in Purchase, NY, noted that the job cuts represent less than 3% of its 300,000-strong global work force. The company still has numerous job openings listed on its web site.
Even as it cuts costs, the company said it plans to boost its spending on advertising and marketing by $500 million to $600 million this year, "with particular focus on North America."
PepsiCo is also planning to hike its dividend by 4%, to $2.15 per share, payable in June 2012, and to repurchase at least $3 billion in shares this year.
The job cuts are happening even as Chief Executive Indra Nooyi said the company experienced 8% annual growth in earnings per share over the last five years, and returned about $30 billion to shareholders in the form of dividends and share repurchases.
The company’s plan to cull its work force follows a recent report from the U.S. Labor Department saying that the economy gained 243,000 jobs in January, knocking down the unemployment rate to 8.3%.
Nuts! Diamond Foods boots CEO
On Thursday, the Labor Department said that adjusted initial claims — the number of unemployed workers applying for government assistant — dipped to 358,000 in the week ended Feb. 4. That’s a decline of 15,000 from the prior week.
Still, it’s too early to tell whether the good employment news is a trend or a temporary blip.
Greece
Valuations for U.S. equities have been stuck below the five-decade average for the longest period since Richard Nixon
World stock markets were mostly higher Thursday after the U.S. central bank pledged to keep interest rates low until late 2014 to nurture the country’s stubbornly slow economic recovery.
Benchmark oil hovered below $100 per barrel while the dollar fell against the euro and the yen.
European shares were higher in early trading. Britain’s FTSE 100 rose 0.3 percent to 5,741.56. Germany’s DAX was 0.4 percent higher at 6,451.53 and France’s CAC-40 added 0.5 percent to 3,335.07. But ahead of the opening bell on Wall Street, Dow Jones industrial futures fell 0.1 percent to 12,672 and S&P 500 futures shed 0.2 percent to 1,317.90.
Gains were muted in Asia. South Korea’s Kospi rose 0.3 percent to 1,957.18.
Hong Kong’s Hang Seng Index jumped 1.6 percent to 20,439.14 on its first trading day since the Chinese New Year holiday. Benchmarks in Thailand, Singapore and New Zealand also rose.
Japan’s Nikkei was 0.4 percent lower at 8,849.47 as a weakening dollar pressured the country’s exporters. Benchmarks in Malaysia and the Philippines also fell.
Markets in Taiwan and mainland Chinese remained closed for the Chinese New Year. Markets in India and Australia were closed for public holidays.
On Wednesday, the U.S. Federal Open Market Committee said it was unlikely to raise interest rates before late 2014. It had previously said it expected to keep rates low into the middle of 2013.
The Fed cut rates to near zero in December 2008, during the financial crisis, and has held them there ever since. The announcement was a sign that the Fed expects the economy, which is improving, to need significant help for three more years.
Analysts said some stock buyers rejoiced that the Fed was leaning toward promoting economic growth.
“With the FOMC sending out a strong signal that monetary policy is likely to remain accommodative for even longer than previously expected, risk assets are in a very good position,” Stan Shamu of IG Markets in Melbourne said in an email.
Energy shares got a boost after crude briefly topped $100 per barrel on Wednesday. South Korea’s oil refiner S-Oil Corp. rose 3 percent, while China National Offshore Oil Corp., known as CNOOC, rose 2.2 percent in Hong Kong.
Hong Kong-listed Zijin Mining Group, China’s largest gold miner, jumped 5.6 percent amid rising prices in the precious metal.
But Japanese export shares didn’t fare so well. Low interest rates in the U.S. would likely weigh on the dollar, giving the tenaciously strong yen another unwelcome boost.
Yamaha Motor Corp. sank 2.3 percent, while Sony Corp. lost 1.4 percent. Toshiba Corp. was 1.2 percent down.
Lee Kok Joo, head of research at Phillip Securities in Singapore, said the Fed announcement would likely have only a short-term effect on equities.
“Beyond that, you still need to look at the macro picture,” he said, referring in particular to the sovereign debt crisis in Europe. “Things are still pretty uncertain in the European region.”
Greece, which faces an important bond repayment deadline in March, is struggling to reach a deal with creditors to prevent a chaotic default on its massive debts. A default could trigger a financial crisis in Europe and beyond.
Private sector investors that hold a large part of Greece’s debt are being asked to swap their existing bonds with new ones of a reduced value, longer maturity and lower interest rate. Greece needs the deal if it is to avoid default this spring.
Benchmark crude for March delivery was up 37 cents to $99.77 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose by 45 cents to finish at $99.40 per barrel in New York on Wednesday. At one point it was as high as $100.40.
The prospect of low interest rates dragged on the dollar, since it reduces the returns that investors get from holding assets denominated in that currency. The euro rose to $1.3110 from $1.3084 late Wednesday in New York. The dollar fell to 77.57 yen from 77.81 yen.
The U.K. economy shrank more than economists forecast in the fourth quarter as manufacturers cut output and services stagnated, leaving Britain on the brink of another recession.
Gross domestic product fell 0.2 percent from the third quarter, when it increased 0.6 percent, the Office for National Statistics said in London today. The median forecast of 33 forecasts in a Bloomberg survey was for a drop of 0.1 percent. Public-sector strikes over pensions on Nov. 30 had
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