Following in the footsteps of the right to request flexible working, the Government has recently published its proposals on a new right for employees to request time off for training.

The core proposal is that employees with at least 26 weeks continuous service would have the right to ask their employer to allow them time away from their job to undertake relevant training.  The right will apply to any training that helps an employee be more productive and effective at work and that helps their employer to improve productivity and business performance.

The new right will operate in a similar way to the current right to request flexible working, in that employers will have to properly consider any requests but will be able to reject them for one or more acceptable business reasons. Employers will not have to pay employees for the time spent training, or for the cost of any training course.

It is proposed that this new legislation will be in place by 2010. The Government estimates that 400,000 applications will be made each year and that around three quarters will be granted.

A copy of the consultation paper is available here and the deadline to submit any comments is 10 September 2008.

Posted: July 4th, 2008 under Employment/HR.
Comments: none

FTSE 100	5476.6, +50.28	Dow	11288.5, +73
FTSE 250	8656.4, -1.81	Nasdaq	2426.1, +1.7
FTSE All Share	2768.71, +20.44	S&P 500	1262.9, +1.4
Nikkei	13894.4, +30.9	Hang Seng	25914.2, +247.9
Oil (Brent)	$134.6	Gold	$934.15
Base Rate	5%	10 Yr Gilt	5.01%
£/$	1.9823	£/€	1.2623

 

Markets

London - After a initial rise at the open, the FSTE has now slumped and is down over 61 in what looks like could be another volatile session. With all but a handful of stocks in decline Marks and Spencer lead the fallers following a downgrade from Citigroup to a ’sell’ from a ‘buy’ with other retailers following suit after John Lewis announced store sales had fallen for a seventh week out of eight.

New York - The Dow moved into a bear market this week, though it finished yesterday with a bounce, as General Motors’ stock tried to fight back from its lowest levels since the 1950s. The Dow rose 73 to 11288.5, the Nasdaq added 1.7 to 2426.1 while the S&P gained 1.4 to 1262.9.

With the S&P on the brink of a bear market and on Thursday hitting its lowest intraday mark in more than a year, the only question now seems to be how low stocks will go before the next bull move starts.

Yesterday, the economic outlook darkened yet again after reports showing that unemployment remained at an elevated 5.5% rate in June, while other data showed contraction of the services sector. Initial claims for jobless benefits rose by 16,000 to 404,000, after seasonal adjustments, in the week that ended June 28, the US Labour Department said.

The European Central Bank warned about economic-growth worries even as it increased interest rates, indicating the twin pressures on central banks. Shares of GM finished yesterday’s truncated session at 10.12, up 14 cents, or 1.4%, taking back a modicum of its 15% loss Wednesday. The strongest stocks on the Dow were from the commodities and industrial sectors that also suffered a heavy sell off on Wednesday.
United Technologies rose 1.36, or 2.3%, to 61.05; Alcoa rose 67 cents, or 2.1%, to 32.78.

Tokyo - Tokyo stocks ended marginally lower today, marking a 12th consecutive day of losses.

Trading was directionless, with many participants away from the market ahead of Independence Day in the US.

However, shares in the real estate sector were battered, led by a 28% drop in Urban Corp. as credit worries continued to roil the sector after the collapse of Suruga last month.

Hong Kong - Hong Kong stocks were showing good gains intra-day led by Chinese Banks after Industrial & Commercial Bank of China issued a positive earnings estimate. The Hang Seng ended the morning up 234 points at 21477.

Economics

Nothing scheduled for today.

Corporate

Shares in troubled mortgage lender Bradford & Bingley slumped this morning after a Moody’s downgrade prompted US investment firm TPG to withdraw its capital injection plan. TPG had planned to invest £179m in B&B in return for a 23% stake in a move that formed part of an overall capital injection plan aimed at raising £400m. The plan upset at least four major shareholders who backed a rival proposal from UK restructuring firm Resolution Ltd that was rejected by B&B management.

An EGM planned for Monday to vote on the TPG injection plan has been cancelled. The TPG investment and a £258m rights issue, at 55 pence a share was B&B’s second capital injection plan.

It originally intended launching a straight rights issue of £300m at 82 pence a share. That plan was abandoned after B&B’s shares skirted dangerously close to the rights issue price, and because the lender found that its business wasn’t performing as well as previously thought. This prompted speculation that underwriters Citigroup and UBS had threatened to back out of the deal. Moody’s is downgrading B&B’s senior unsecured and long-term debt ratings to Baa1 from A3 while maintaining the short-term rating at P2. Moody’s said this reflected the a substantial deterioration in the bank’s asset quality so far in 2008 as well as the expectation that it will weaken further during the rest of the year, as well as B&B’s obligation to acquire mortgages from GMAC RFC - mortgages which have displayed significantly faster deterioration of asset quality than the bank’s own-originated loan portfolio. The downgrade gave TPG the right to pull out of its earlier deal.

Despite TPG’s withdrawal, B&B said it will still raise the £400m, but now through an enlarged rights issue, supported by a number of the group’s largest shareholders, including M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Invest.

BSkyB is thinking about making a £2.5bn bid for pay-TV service Digital+, which is owned by Promotora De Informaciones, or Prisa. The possible bid has created a debate among officials at BSkyB and News Corp, which owns a 39.1% stake in BSkyB and is looking into other possible acquisitions in Europe. There hasn’t been a decision on the Digital+ bid yet, sources said, but BSkyB could get financing for the deal due to its good cash flow.

Origin Energy said today its board plans to recommend that shareholders reject BG Group’s hostile A$13.8bn bid, and a separate plan to look at options for its key coal seam gas assets are progressing well. BG unveiled A$15.50-a-share hostile bid last week, the same price that was rejected by Origin’s board after friendly takeover talks just over a month ago. At the time of rejecting the friendly approach, Origin invited proposals as to how best to exploit its coal seam gas or CSG reserves, with options ranging from the sale of its gas tenements to partnership in an LNG project. Origin chairman Kevin McCann said in a statement today that the process is progressing well, with expressions of interest due by 1000 BST Friday.

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: July 4th, 2008 under Asset Management.
Comments: none

FTSE 100	5479.90, -146	Dow	11382.26, -32.25
FTSE 250	8920.80, -225	Nasdaq	2304.97, +11.99
FTSE All Share	2782.81, -72.88	S&P 500	1284.91, +4.91
Nikkei	13286.37, -176.83	Hang Seng	21823.56, -278.45
Oil (Brent)	$134.6	Gold	$941.45
Base Rate	5%	10 Yr Gilt	5.16%
£/$	1.9930	£/€	1.2579

Markets

London - UK stocks closed sharply lower on Tuesday, with banks, led by RBS, falling on worries about further losses in the sector, while oils and miners slipped after recent gains. The FTSE100 closed 146 points lower at 5479.9 after touching its lowest level in more than three months. Banks suffered heavily after new figures showed Britain’s manufacturing sector contracted in June at its sharpest pace since 2001, while house prices fell for an eight straight month, darkening an already bleak economic outlook. Barclays, RBS, HBOS, HSBC, Lloyds TSB and Standard Chartered were down between 2 and 5.1 percent. Shares in UBS fell to a 10 year low amid speculation it may announce more write downs for the second quarter, potentially of around $5bn. Deutsche Bank fell on worries of more write downs and the threat that revenue will remain under pressure for many months due to the credit crunch, dealers said.

The mining sector was the poorest performing sector, with Anglo American, BHP Billiton, Rio Tinto, Xstrata and Vedanta Resources falling between 3.6 and 4.8 percent after a recent rally. Eurasian Natural Resources closed nearly 12 percent lower after a rival said that Q3 ferrochrome prices settled 6.8 percent higher, less than expected.

Energy stocks slipped after strong gains in recent session on record high crude above $143 a barrel. BP lost 2.4 percent, Royal Dutch Shell lost 2.3 percent BG Group slid 3.5 percent and Tullow Oil lost 5.1 percent.

The UK property price data also weighed on housebuilders, with Taylor Wimpey, Persimmon, Redrow, Bovis Homes and Bellway all closing lower.

Wolseley fell 4.3 percent, also weighed by a price target cut from Goldman Sachs, while Kingfisher lost nearly 5 percent.

New York - US stocks closed higher on Tuesday, with the Dow and Nasdaq pushing off bear market levels, after GM reported a June sales loss that was steep, but not as steep as had been expected. A bounce in some of the recently battered financial stocks also helped the market recover.

The DJIA closed 32.25 points lower at 11382.26, the S&P500 gained 4.91 points higher to close at 1284.91 and the Nasdaq added 11.99 points finishing at 2304.97.

Stocks were volatile throughout the session, turning higher in the late morning after a report showed a surprise pickup in manufacturing activity and then sliding again in the early afternoon as the bank sector slumped. Stocks recovered again in the late afternoon after GM reported that US sales fell 18 percent in June versus a year ago. While that continued the string of big losses for the auto sector, the figure was shy of the 25 percent decline analysts had been looking for. The Dow and the Nasdaq both briefly fell to levels that meet the technical definition of a bear market before bouncing back a little.

Ford Motor reported June US sales slipped 28.1 percent, reflecting the impact of high oil prices and a lack of investor confidence.

Lehman Brothers rose as investor’s mulled talk that the bank may need to put itself up for sale and at a discount. Such concerns sent the stock plummeting on Monday, but Lehman bounced back Tuesday after Morgan Stanley started coverage of the stock with an outperform rating.

American Express gained after UBS upgraded it to neutral from sell as part of a broader upgrade of the credit card sector, saying that the stock is now fairly valued relative to the difficult outlook.

CIT Group rallied on news it is selling its home lending business to Lone Star Funds for $1.5bn and the assumption of $4.4bn in debt. CIT is also selling its mobile home mortgage business for $300m to Vanderbuilt Mortgage and Finance.

UBS slipped after the company said it will reshuffle its board following big sub prime mortgage losses.

In economic news, the Institute for Supply Management said its manufacturing index rose to 50.2 in June beating forecasts for a slide to 48.6. The report showed a big jump in the prices manufacturers pay for raw materials, reflecting the run up in oil prices and other inflationary pressures.

A separate report showed a decline in May construction spending, although it was not as big a decline as had been expected US light crude for August delivery rose 97 cents to settle at $140.97 a barrel on the NYMEX, an all time closing high. The contract moved close to the all time trading record of $143.67 per barrel hit Monday before trimming gains.

The national average price for a gallon of regular unleaded gas rose to a record $4.087 from a record $4.086 the previous day.

In currency trading, the dollar fell versus the euro and the yen Treasury prices fell, raising the yield on the 10 year note to 4 percent from 3.97 percent.

COMEX gold for August delivery rose $16.20 to settle at $944.50 an ounce.

Tokyo - The Nikkei average fell 1.3 percent today to set its longest losing streak in more than 40 years, as worries about the global economy hit exporters such as Canon Inc. Shipping firms extended recent losses after freight charges on the Baltic Dry Index dropped over 2 percent and on worries high oil prices would hurt demand from emerging markets. The Nikkei average closed 176.83 points lower at 13286.37, the lowest close since April 16. It logged its 10th straight negative day and it’s longest

Economics

US ADP employment change (Jun) 13.15 bst

ADP employment has been notably stronger than the official private payroll figures so far this year, with an average monthly increase of 31,000 from January through May, while official BLS private payrolls have dropped by 79,000 per month. A soft ADP reading of 50,000 is expected, suggesting an even weaker result for private payrolls (HSBC est -110,000)

US Factory orders (May) 15.00 bst

Durable goods orders were flat in May, as an increase in aircraft demand offset a pullback in machinery orders. A 1.1 percent rise is expected for non durable orders, boosted by further increases in the oil prices. Total factory orders are seen rising 0.6 percent.

Corporate

CRH said today it expects a "high single digit percentage" drop in pre-tax profit this year due to a weak dollar and an economic downturn in the company’s major markets. CRH said dollar weakness, at current levels, would have an "adverse translation impact" of over E80m on profit. The company said "CRH anticipated that full year 2008 reported profit before tax may show a high single digit percentage decline compared with the record 2007 outturn of E1.904bn", it said in a trading statement.

Marks and Spencer reported a 5.3 percent fall in first quarter underlying sales today, and said the head of its food business was leaving with immediate effect. The company said in a trading update that like for like general merchandise sales fell 6.2 percent in the 13 weeks to June 28, with food down 4.5 percent. It said Steven Esom, director of food, was leaving after a "significantly weaker performance" in that business.

Taylor Wimpey said today that the UK housing market would remain weak at least through 2008 and said it had not been able to conclude a satisfactory rising of equity due to market conditions. The company said housing reservations had declined sharply since its last update in April as it announced the departure of finance director Peter Johnson at the end of the year.

John Wood Group said today that energy market remains strong and the company’s positive momentum had continued. The company said "All divisions are performing well, most notable Engineering and Production Facilities and the board is increasingly confident of delivering another year of strong growth".

Informa today confirmed it has received a bid proposal at 506 pence a share from a consortium of private equity firms, valuing the company at £3.4bn including debt. Responding to press speculation, the group said in a statement that an approach had been made by Providence Equity, The Carlyle Group and Hellman & Friedman. The company said "Discussions continue to be at an early stage and there can by no certainty that an offer will be made". The proposed offer values Informa at £2.15bn, or a £3.4bn including net debt. The purchase price would represent at 34 percent premium to Tuesday’s closing price of 378 pence. Informa said the price assumes no dividends or other declared and paid subsequent to the final dividend for 2007.

Balfour Beatty today said that its trading performance will remain strong throughout the year and the company will make good progress in 2008. This progress is due to particularly strong performances from the company’s US and UK construction businesses, along with its UK and Dubai engineering businesses. The company said in a statement that its confirmed order book is up £400m, or 3.4 percent to £11.8bn since the end of last year on new orders. Progress in the rail segment has been good, while the public private partnerships business is performing at anticipated levels.

An Alabama jury ruled on Tuesday that GlaxoSmithKline and Novartis must pay a combined $114.3m for inflating drug prices paid by the state’s Medicaid programme, Bloomberg News reported. Glaxo was ordered to pay $81m in compensatory damages, while Novartis was ordered to pay $33.3m

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: July 3rd, 2008 under Asset Management.
Comments: none

FTSE 100	5479.90, -146	Dow	11382.26, -32.25
FTSE 250	8920.80, -225	Nasdaq	2304.97, +11.99
FTSE All Share	2782.81, -72.88	S&P 500	1284.91, +4.91
Nikkei	13286.37, -176.83	Hang Seng	21823.56, -278.45
Oil (Brent)	$134.6	Gold	$941.45
Base Rate	5%	10 Yr Gilt	5.16%
£/$	1.9930	£/€	1.2579

 

Markets

London - UK stocks closed sharply lower on Tuesday, with banks, led by RBS, falling on worries about further losses in the sector, while oils and miners slipped after recent gains. The FTSE100 closed 146 points lower at 5479.9 after touching its lowest level in more than three months. Banks suffered heavily after new figures showed Britain’s manufacturing sector contracted in June at its sharpest pace since 2001, while house prices fell for an eight straight month, darkening an already bleak economic outlook. Barclays, RBS, HBOS, HSBC, Lloyds TSB and Standard Chartered were down between 2 and 5.1 percent. Shares in UBS fell to a 10 year low amid speculation it may announce more write downs for the second quarter, potentially of around $5bn. Deutsche Bank fell on worries of more write downs and the threat that revenue will remain under pressure for many months due to the credit crunch, dealers said.

The mining sector was the poorest performing sector, with Anglo American, BHP Billiton, Rio Tinto, Xstrata and Vedanta Resources falling between 3.6 and 4.8 percent after a recent rally. Eurasian Natural Resources closed nearly 12 percent lower after a rival said that Q3 ferrochrome prices settled 6.8 percent higher, less than expected.

Energy stocks slipped after strong gains in recent session on record high crude above $143 a barrel. BP lost 2.4 percent, Royal Dutch Shell lost 2.3 percent BG Group slid 3.5 percent and Tullow Oil lost 5.1 percent.

The UK property price data also weighed on housebuilders, with Taylor Wimpey, Persimmon, Redrow, Bovis Homes and Bellway all closing lower.

Wolseley fell 4.3 percent, also weighed by a price target cut from Goldman Sachs, while Kingfisher lost nearly 5 percent.

New York - US stocks closed higher on Tuesday, with the Dow and Nasdaq pushing off bear market levels, after GM reported a June sales loss that was steep, but not as steep as had been expected. A bounce in some of the recently battered financial stocks also helped the market recover. The DJIA closed 32.25 points lower at 11382.26, the S&P500 gained 4.91 points higher to close at 1284.91 and the Nasdaq added 11.99 points finishing at 2304.97.

Stocks were volatile throughout the session, turning higher in the late morning after a report showed a surprise pickup in manufacturing activity and then sliding again in the early afternoon as the bank sector slumped. Stocks recovered again in the late afternoon after GM reported that US sales fell 18 percent in June versus a year ago. While that continued the string of big losses for the auto sector, the figure was shy of the 25 percent decline analysts had been looking for. The Dow and the Nasdaq both briefly fell to levels that meet the technical definition of a bear market before bouncing back a little.

Ford Motor reported June US sales slipped 28.1 percent, reflecting the impact of high oil prices and a lack of investor confidence.

Lehman Brothers rose as investor’s mulled talk that the bank may need to put itself up for sale and at a discount. Such concerns sent the stock plummeting on Monday, but Lehman bounced back Tuesday after Morgan Stanley started coverage of the stock with an outperform rating.

American Express gained after UBS upgraded it to neutral from sell as part of a broader upgrade of the credit card sector, saying that the stock is now fairly valued relative to the difficult outlook.

CIT Group rallied on news it is selling its home lending business to Lone Star Funds for $1.5bn and the assumption of $4.4bn in debt. CIT is also selling its mobile home mortgage business for $300m to Vanderbuilt Mortgage and Finance.

UBS slipped after the company said it will reshuffle its board following big sub prime mortgage losses.

In economic news, the Institute for Supply Management said its manufacturing index rose to 50.2 in June beating forecasts for a slide to 48.6. The report showed a big jump in the prices manufacturers pay for raw materials, reflecting the run up in oil prices and other inflationary pressures.

A separate report showed a decline in May construction spending, although it was not as big a decline as had been expected US light crude for August delivery rose 97 cents to settle at $140.97 a barrel on the NYMEX, an all time closing high. The contract moved close to the all time trading record of $143.67 per barrel hit Monday before trimming gains.

The national average price for a gallon of regular unleaded gas rose to a record $4.087 from a record $4.086 the previous day.

In currency trading, the dollar fell versus the euro and the yen Treasury prices fell, raising the yield on the 10 year note to 4 percent from 3.97 percent.

COMEX gold for August delivery rose $16.20 to settle at $944.50 an ounce.

Tokyo - The Nikkei average fell 1.3 percent today to set its longest losing streak in more than 40 years, as worries about the global economy hit exporters such as Canon Inc. Shipping firms extended recent losses after freight charges on the Baltic Dry Index dropped over 2 percent and on worries high oil prices would hurt demand from emerging markets. The Nikkei average closed 176.83 points lower at 13286.37, the lowest close since April 16. It logged its 10th straight negative day and it’s longest

Economics

US ADP employment change (Jun) 13.15 bst

ADP employment has been notably stronger than the official private payroll figures so far this year, with an average monthly increase of 31,000 from January through May, while official BLS private payrolls have dropped by 79,000 per month. A soft ADP reading of 50,000 is expected, suggesting an even weaker result for private payrolls (HSBC est -110,000)

US Factory orders (May) 15.00 bst

Durable goods orders were flat in May, as an increase in aircraft demand offset a pullback in machinery orders. A 1.1 percent rise is expected for non durable orders, boosted by further increases in the oil prices. Total factory orders are seen rising 0.6 percent.

Corporate

CRH said today it expects a "high single digit percentage" drop in pre-tax profit this year due to a weak dollar and an economic downturn in the company’s major markets. CRH said dollar weakness, at current levels, would have an "adverse translation impact" of over E80m on profit. The company said "CRH anticipated that full year 2008 reported profit before tax may show a high single digit percentage decline compared with the record 2007 outturn of E1.904bn", it said in a trading statement.

Marks and Spencer reported a 5.3 percent fall in first quarter underlying sales today, and said the head of its food business was leaving with immediate effect. The company said in a trading update that like for like general merchandise sales fell 6.2 percent in the 13 weeks to June 28, with food down 4.5 percent. It said Steven Esom, director of food, was leaving after a "significantly weaker performance" in that business.

Taylor Wimpey said today that the UK housing market would remain weak at least through 2008 and said it had not been able to conclude a satisfactory rising of equity due to market conditions. The company said housing reservations had declined sharply since its last update in April as it announced the departure of finance director Peter Johnson at the end of the year.

John Wood Group said today that energy market remains strong and the company’s positive momentum had continued. The company said "All divisions are performing well, most notable Engineering and Production Facilities and the board is increasingly confident of delivering another year of strong growth".

Informa today confirmed it has received a bid proposal at 506 pence a share from a consortium of private equity firms, valuing the company at £3.4bn including debt. Responding to press speculation, the group said in a statement that an approach had been made by Providence Equity, The Carlyle Group and Hellman & Friedman. The company said "Discussions continue to be at an early stage and there can by no certainty that an offer will be made". The proposed offer values Informa at £2.15bn, or a £3.4bn including net debt. The purchase price would represent at 34 percent premium to Tuesday’s closing price of 378 pence. Informa said the price assumes no dividends or other declared and paid subsequent to the final dividend for 2007.

Balfour Beatty today said that its trading performance will remain strong throughout the year and the company will make good progress in 2008. This progress is due to particularly strong performances from the company’s US and UK construction businesses, along with its UK and Dubai engineering businesses. The company said in a statement that its confirmed order book is up £400m, or 3.4 percent to £11.8bn since the end of last year on new orders. Progress in the rail segment has been good, while the public private partnerships business is performing at anticipated levels.

An Alabama jury ruled on Tuesday that GlaxoSmithKline and Novartis must pay a combined $114.3m for inflating drug prices paid by the state’s Medicaid programme, Bloomberg News reported. Glaxo was ordered to pay $81m in compensatory damages, while Novartis was ordered to pay $33.3m

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

Posted: July 2nd, 2008 under Asset Management.
Comments: none

FTSE 100	5625.9, +96	Dow	11350.01, +3.5
FTSE 250	9145.8, +41	Nasdaq	1280, +1.62
FTSE All Share	2855.69, -43.1	S&P 500	2292.98, +22.65
Nikkei	13463.20, -18.18	Hang Seng	22102.01, +59.66
Oil (Brent)	$134.6	Gold	$928.53
Base Rate	5%	10 Yr Gilt	5.13%
£/$		£/€	1.268

 

Markets

London - UK stocks ended higher on Monday with oil stocks gaining on a record high crude price and miners, led by Anglo American advancing on firmer metals. The FTSE100 closed 96 points higher at 5625.9, but finished the first half of the year nearly 13 percent lower after five years of gains in a row.

Taylor Wimpey ended flat after losing around 5 percent after the company said it was in talks with shareholders and other institutions about raising additional financing, which would most likely be via a placing and open offer. Barratt Developments lost more than 9 percent and Bellway fell 3.8 percent. Fears of a property market crash in Britain mounted after new figures showed approvals for home loans plummeting to a record low and the consumer mood at its bleakest since the onset of the recession in 1990. The Bank of England said mortgage approvals fell 28 percent in May, to just 42,000, around a third of their level a year ago. A survey by Hometrack showed house prices in England Wales fell for a ninth month running in June, leaving them 3.2 percent lower than a year ago.

Energy stocks jumped, tracking strong oil prices. BP, Royal Dutch Shell, BG Group and Cairn Energy added between 0.9 and 4.5 percent.

Miners gained on firmer metals prices. BHP Billiton, Anglo American, Vedanta Resources, Xstrata and Antofagasta rose between 0.5 and 3.8 percent. Rio Tinto rose 2.8 percent after the FT, citing people familiar with the situation, said Lakshmi Mittal, the main shareholder in ArcelorMittal, was looking at entering the takeover battle for the miner. An ArcelorMittal spokesman declined to comment on the report.

Banks continued to suffer, with RBS, HBOS, Barclays, HSBC, Lloyds TSB, Alliance and Leicester and Standard Chartered down between 0.3 and 2.2 percent.

New York - US stocks struggled on Monday at the end of the worst June for the S&P500 and the Dow industrials since the Great Depression, amid rising oil prices and ongoing financial market woes. The DJIA closed just 3.5 points higher at 11350.01, the S&P500 added 1.62 points to close at 1280 and the Nasdaq lost 22.65 points to close at 2292.98. Year to date, the Dow is down 14.4 percent, the S&P500 is 12.8 percent lower and the Nasdaq is off 13.5 percent. Oil stocks Chevron, Exxon Mobil, BP and Sunoco were among the big gainers. Beyond commodities other gainers included biotech and select telecom stocks. But any advance was limited by continued weakness in auto and financial stocks and some selling in technology.

Citigroup, Lehman Brothers and JPMorgan Chase were among the big bank stocks falling. Brokerage Robert W Baird cut earnings and price targets on a number of banks, including Comerica and Wachovia, according to associated press.

H&R Block reported improved quarter sales and earnings that topped estimates, thanks to a strong tax season and the sale of its mortgage unit. The stock gained 3.7 percent.

In economic news, The Chicago PMI rose to 49.6 from 49.1 in the previous months, versus forecasts for a dip to 48. However, any reading below 50 indicates continued weakness in the sector.

In currency trading, the dollar was little changed versus the euro and fell versus the yen.

Treasury prices were barely higher, with the yield on the 10 year note at 3.96 percent.

US light crude for August delivery reached a record high of $143.67 a barrel on NYMEX before pulling back to settle at $140 a barrel, down 21 cents. The national average price for a gallon of regular unleaded gas rose to a record $4.086 from $4.079, the previous day.

COMEX gold for August delivery fell $3 to settle at $928.30 an ounce.  

Tokyo - The Nikkei average closed lower today to set its longest losing streak in nearly four years as exporters fell on a firmer yen, while worries about the economic outlook dampened investors appetite for risk. The Nikkei average fell 18.18 points to close at 13463.20. Bucking the trend, Mitsubishi Corp and other energy linked shares gained after oil hit a new record high above $143 a barrel. The market initially got a boost from the Bank of Japan’s tankan survey that showed business sentiment has worsened less than expected in the past three months.

Exporters fell as a stronger yen curbs their overseas profits when they are brought back home. Canon Inc shed 2.2 percent to Y5,340 and Fanuc lost 4.5 percent to Y9,900.

Major Banks slid after renewed credit worries hit their US peers following analyst reports that predict Merrill Lynch will be forced to raise equity in the third quarter. Mitsubishi UFJ shed 1.3 percent to Y929, while Mizuho Financial Group fell 2.2 percent to Y485,000. Sumitomo Mitsui Financial Group declined 2.1 percent to Y782,000.

Energy related stocks rose after oil prices hit an all time high of over $143 a barrel, boosting the oil and coal sub index by 2.6 percent. Nippon Oil climbed 2.8 percent to Y733 and oil explorer Inpex Holdings added 2.2 percent to Y1.37m.

Economics

UK Nationwide house prices (Jun)

All the housing market indicators continue to point to falling prices. Monthly declines have gained momentum recently and the Nationwide house price index to have posted a further 1 percent decline in June.

UK PMI manufacturing (Jun) 09.30 bst

UK manufacturers are benefiting from a weaker pound, giving them more scope to raise prices in reaction to higher input costs. The CBI industrial trends survey ticked up in June and a small improvement is expected in this index.

US ISM manufacturing (Jun) 15.00 bst

Last months ISM manufacturing survey rose 1 point to 49.6, while respondent comments were muted on sales and concerned on material prices. Both the Empire manufacturing (-8.7, from -3.2) and Philadelphia Fed surveys (-17.1 from 15.6) have been soft this month. New orders and shipments declined on both surveys, suggesting a pullback in activity. Headline ISM manufacturing is expected to fall to 47.

US Construction spending (May) 15.00 bst

Residential construction continues to drop, but a smaller decline is expected in May, with private residential spending falling by 1 percent. Assuming increases for non residential and public construction, total construction spending is seen falling by 0.1 percent.

Corporate

Tanfield warned today that growth would be at significantly lower levels than previously forecasted, after the global credit crunch hurt demand at its main business. Customer demand at its main powered access division, which makes platforms used on construction sites and oil rigs and which accounts for up to 80 percent of projected revenues, has been hurt by worsening economic conditions. The company said the despite the worsening outlook, it would still report year on year growth. A year ago, it reported pre-tax profits of £5.4m on sales of £36.8m for its six months to end June.

Tanfield said its distributors and customers were suffering from a fall off in demand, as access to credit dried up, resulting in capital freezes and postponement of replacement plans. In its electric vehicles division, Tanfield said that while demand has held up, production has slowed, due to supply chain problems. Tanfield said it will now postpone a planned move to a dedicated electric vehicle site and would revise plans to expand to the US. The expansion is now likely to be executed through a joint venture with a business that already has facilities and infrastructure, it said, adding that is already in talks with a number of parties. Tanfield said turnover for the first six months, amounted to £91m, a 36 percent increase from a year ago.

Northgate said its profit for the 12 months to next April would be at similar levels to last year, due to weaker conditions in the used vehicle market. The company said pre-tax profit for last year rose 5 percent to £79.5m, slightly below analyst’s expectations. Revenues were up 10 percent at £578.5m, ahead of estimates, while the dividend was hiked 10 percent to 28 pence. Chairman Philip Rogerson said the firm would be able to adjust if economic conditions were to worsen. He added "If economic conditions were to deteriorate, we believe our business model has the proven flexibility to enable us to defleet rapidly in order to leave us in a strong financial position when markets improve". ABN AMRO analysts said in a results preview note that both economies were under "significant pressure", putting a "sell" recommendation on the company.

London Scottish Bank said late last night that it was in talks with interested parties about a takeover of the company. London Scottish also said it was trying to raise at least £45m in equity capital. The company added "The group’s future will depend of the outcome of the process to raise additional equity capital and the discussions with interested parties in relation to a possible outcome for the group". London Scottish shares closed 3.7 percent lower at 6.52 pence to value to company at £9.3m. The company also posted first half results showing its continuing operations made a pre-tax loss of £7.4m in the six months to end April, wider than the £6m loss made a year earlier. Chairman Peter Cordrey said "The group continued to trade at a loss due to poor performance of its unsecured consumer credit business, and we expect the poor performance to continue until the restructuring and exit from that business has been affected".

The above details are provided for information only and are not intended to be construed a solicitation for the sale or purchase of any particular investment nor as specific investment advice.

 

Posted: July 1st, 2008 under Asset Management.
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