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Editors: Bloomberg News moves a combined business/general news budget at 13:30 New York time each business day. Graphics and photos can be found at www.bloomberg.com/photos or www.bloomberg.com/newsfeed.
Stories identified with the prefix PUBLISH in the slug have been shaped for newspaper use, and the suffix -TRIM indicates the original version has been shortened. All move times are New York time. Inquiries should be directed to Jon Bixby in content syndication, firstname.lastname@example.org or number for the department is TOP BUSINESS NEWS
Most U.S. Stocks Fall Amid Concern Over European Debt Crisis
Most U.S. stocks fell, erasing gains in the Standard & Poor’s 500 Index, amid growing concern leaders are divided over how to handle Greece’s debt crisis. Developing. US-STOCKS-FINAL to move by 17:00. By Whitney Kisling and Inyoung Hwang. Also see GLOBAL-MARKETS-WRAP, US-OIL-MARKET.
EU Proposes Financial-Transactions Tax to Start in 2014
The European Union proposed a financial-transactions tax that would take effect in 2014 and raise about 57 billion euros ($78 billion) a year, prompting renewed opposition from the U.K.
The proposal would apply a tax of 0.1 percent on trading of stocks and bonds, with a 0.01 percent rate for derivatives contracts, the European Commission, the EU executive, said today in Brussels. Those minimum rates would apply throughout the 27- nation bloc. The measure would deliver “a fair contribution from the financial sector,” EU Tax Commissioner Algirdas Semeta said.
European governments are split over the merits of a transactions tax, while British banks warn that an EU-only measure would drive business to other regions. The U.K., home to Europe’s biggest financial center, has opposed the move, which requires the unanimous support of all EU countries. The U.K. Treasury reiterated today that such a levy would need to apply globally. 870. Moved at 10:30. By Rebecca Christie.
EU Split Over Push for Bigger Bank Haircuts in Greek Bailout
The European Commission is resisting a push to impose bigger writedowns on banks’ holdings of Greek government debt than those agreed at a July 21 summit, a European official said.
The commission, the European Union’s executive body, opposes ideas that are being floated by some government officials to get banks to accept bigger so-called haircuts and doesn’t want to have talks about any such attempt, the official said on condition of anonymity because the deliberations are private. Germany and the Netherlands are leading a drive by as many as seven euro-area countries for more private-sector involvement in the second Greek package, the Financial Times reported today. 340. Moved at 10:10. By Rebecca Christie. Also see EP-BUDGET- VOTE.
Amazon Unveils $199 Kindle Fire Tablet, Taking on Apple IPad
Amazon.com Inc., the world’s largest online retailer, unveiled its Kindle Fire tablet computer, taking aim at Apple Inc.’s bestselling iPad with a device that’s smaller and less than half the price.
The Kindle Fire will have a 7-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad, Amazon executives said in interviews with Bloomberg Businessweek. The device, a souped-up version of the Kindle electronic- book reader, will run on Google Inc.’s Android software, the Seattle-based company said.
Chief Executive Officer Jeff Bezos is betting he can leverage Amazon’s dominance in e-commerce to pose a real challenge to Apple’s iPad, after tablets from rivals such as Hewlett-Packard Co. and Research In Motion Ltd. have fallen short. 1000. Moved at 12:10. By Brad Stone and Danielle Kucera.
Mortgage Survivors Get Bargains as Price-Drop Danger Eases
Cynthia and Gerald Matthews left a booming property market in Ottawa, the Canadian capital, to buy a home in Bloomington, Indiana, where real estate prices are beginning to recover from a five-year slump.
“It was much cheaper than we thought it would be,” said Cynthia Matthews, who got a 5 percent discount off the $196,999 asking price of the three-bedroom, brick neo-Colonial style house, and a mortgage rate close to 4 percent. “To say it’s a buyer’s market would be an understatement.”
People like the Matthewses who are able to survive the scrutiny of mortgage lenders are getting the best deals of the five-year U.S. housing bust, and perhaps the best deals of a generation, after a 31 percent decline in home prices since 2006. It’s the bright side of an otherwise bleak real estate market: Good houses at cheap prices are plentiful, while loan rates are hovering at record lows. 1800. Moved at 10:00. By Kathleen M. Howley.
American Funds’ Flagship Loses Top Rank as Stock Pickers Shunned
Growth Fund of America has lost its status as the largest U.S. equity mutual fund, a position it held for six years, as investors are turning away from Los Angeles-based parent Capital Group Cos. and its tradition of picking stocks.
The $139 billion Vanguard Total Stock Market Index Fund last month overtook the $137 billion Growth Fund of America, whose $3.3 billion of withdrawals in August were the most of any fund, according to data from researcher Morningstar Inc. Investors pulled $73 billion, or 8.6 percent of the money held by American Funds, in the 12 months ended Aug. 31, the heaviest proportion among the 15 biggest fund families. 1400. Moved at midnight. By Christopher Condon and Charles Stein.
Burlington Northern Rates Get U.S. Review After Buffett Takeover
Burlington Northern Santa Fe, purchased by Warren Buffett’s Berkshire Hathaway Inc. last year, is facing scrutiny by the U.S. government after complaints that the railroad tried to pass on $7.6 billion in acquisition costs to shippers.
The Surface Transportation Board said today it will examine regulatory effects of the price Berkshire paid for Burlington Northern, including the railroad’s rates. Coal shippers said earlier this year that Fort Worth, Texas-based Burlington Northern is seeking to use government accounting methods to recoup some of Berkshire’s costs from railroad customers. 220. Moved at 13:45. By Natalie Doss.
Emirates Adds U.S. Routes to Revive Challenge Halted by 9/11
Emirates, the biggest international airline, will add flights to Seattle and Dallas in a revival of plans to establish a major route network to the world’s largest economy that it shelved after the 2001 terror attacks.
Emirates will begin daily services from Dubai to Dallas starting Feb. 2 and to Seattle from March 1 and may add U.S. cities including Atlanta, Boston, Chicago, Detroit, Philadelphia and Washington, President Tim Clark said today in an interview. 1110. Moved at 12:40. By Chris Jasper and Steve Rothwell.
Coffee Falls in Rout as Starbucks Cup Costs $1.50: Commodities
Farmers from Vietnam to Brazil will supply a record robusta crop in the marketing year that begins next month, extending a slump in coffee futures that spurred Kraft Foods Inc. and J.M. Smucker Co. to cut prices.
Production will rise 5.4 percent to 3.29 million metric tons (54.9 million 60-kilogram bags) in the 2011-12 season, the U.S. Department of Agriculture estimates. Vietnam and Brazil, the biggest producers, will reap the most beans ever. Robusta traded on the NYSE Liffe exchange in London fell 26 percent since March, and will drop another 5 percent to $1,884 a metric ton by Dec. 31, according to the mean in a Bloomberg survey of 16 brokers, traders and analysts. 920. Moved at 6:40. By Isis Almeida.
Chesapeake Has ‘Phenomenal’ Production in Utica Shale Wells
Chesapeake Energy Corp. drew as much as 1,425 barrels a day of oil and petroleum liquids from one of its first four wells in Ohio’s Utica Shale, a “phenomenal” rate, according to an analyst.
Peak output from the well in Harrison County, Ohio, also included 9.5 million cubic feet per day of gas, Oklahoma City- based Chesapeake said today in a statement. Two other wells also yielded at least 980 barrels per day of liquids and another, near the Ohio border in Pennsylvania, produced gas, it said.
“The rates were phenomenal,” said Michael Bodino, Dallas- based head of energy research for Global Hunter Securities LLC, who rates the shares “buy” and owns none. “With $80-a-barrel oil and the rates they are putting up, we think this will be a highly economical play.” 360. Moved at 10:10. By Jim Polson.
Madoff Trustee May Be Limited to $386 Million Mets Recovery
The trustee liquidating Bernard Madoff’s firm “appears” to be able to seek about $386 million from the owners of the New York Mets, a Manhattan federal judge said today in a court filing.
U.S. District Judge Jed Rakoff dismissed much of the billion-dollar claim by the trustee, Irving Picard, in a ruling yesterday. Rakoff clarified that decision in an order today. The defendants include Sterling Equities Inc. partners Fred Wilpon and Saul Katz. 240. Moved at 12:30. By Bob Van Voris and Linda Sandler.
Demand for U.S. Capital Goods Rises by Most in Three Months
Orders for U.S. capital goods climbed in August by the most in three months, a sign business investment continues to support the recovery.
Bookings for goods like computers and communications gear, excluding military hardware and aircraft, climbed 1.1 percent, the most since May, a Commerce Department report showed today in Washington. Demand for all durable goods dropped 0.1 percent, less than forecast. 640. Moved at 10:30. By Bob Willis.
Darden to Revamp Olive Garden Menu in Bid to Lure Frugal Diners
Darden Restaurants Inc., operator of the Red Lobster and LongHorn Steakhouse chains, plans to revamp Olive Garden’s menu with less expensive items to lure more frugal consumers.
Olive Garden will introduce “a new core menu featuring even more everyday affordability to ensure the brand remains accessible to as many families as possible,” Chief Operating Officer Andrew Madsen said today on a conference call. Darden also will highlight cheaper options in its promotions and begin advertising a panini sandwich meal for $6.95 at lunch, he said. 200. Moved at 12:15. By Leslie Patton.
TOP GENERAL NEWS
Obama Jobs Plan Prevents 2012 Recession in Survey of Economists
President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year, according to economists surveyed by Bloomberg News.
The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said. 1450. Moved at 4:50. By Timothy R. Homan.
States Appeal to U.S. Supreme Court on Obama Health Law
States challenging President Barack Obama’s health-care overhaul asked the U.S. Supreme Court to intervene, saying a federal appeals court didn’t go far enough when it invalidated a portion of the law.
Adding to calls for the high court to determine the fate of the law, the 26 states, led by Florida, said today that the entire measure should be invalidated. The Justice Department signaled earlier this week that it will file its own Supreme Court appeal in the case. 350. Moved at 13:15. By Greg Stohr.
Medvedev Hardens Stance to Sideline Rivals for Premier Post
Russian President Dmitry Medvedev hardened his stance on military spending, the issue that triggered Alexei Kudrin’s exit as finance minister, as he seeks to bolster his chances of becoming prime minister next year.
Government officials who question the president’s plan to boost defense spending must quit or “work elsewhere,” Medvedev said yesterday. Russia “isn’t a banana republic” and must maintain a military that reflects its status, he said.
Medvedev agreed last week to swap roles with Prime Minister Vladimir Putin after presidential elections in March. He is trying to fight off possible challenges for the premier’s post in order to push on with his plans to diversify the economy and fight corruption, according to Lilit Gevorgyan, a London-based analyst at IHS Global Insight. 1160. Moved at 11:35. By Scott Rose and Alena Chechel.
Saudi Woman Driver Sentenced to Lash After King Grants Vote
Two days after Saudi King Abdullah’s decision to allow women to participate in elections, two Saudi women were punished for breaking the ban on female driving: One was sentenced to 10 lashes by a court in Jedda another was detained in Riyadh.
The incidents highlight the continuing disparity betwe the rights of men and women in the kingdom. Women may be ab vote and run in the 2015 municipal elections, but they stil can’t drive, argue in court before a judge, travel or get a education or a job without male approval. 920. Moved at 4:50. By Donna Abu-Nasr.
U.S. Arrests 2,900 Illegal Immigrant Criminals in Crackdown
The U.S. arrested 2,900 illegal immigrant criminals over seven days in the largest nationwide crackdown of its kind, according to Immigration and Customs Enforcement.
All of those taken into custody had prior criminal convictions in the U.S., and at least 1,282 had multiple criminal convictions, ICE said in a statement today. More than 1,600 of those arrested had felony convictions, including manslaughter, attempted murder and kidnapping. 200. Moved at 11:45. By Jeff Bliss.
BUSINSES NEWS FEATURES
Nike Betting on Venture Capital in Effort to Step Up Innovation
Nike Inc., the world’s biggest sneaker company, is taking a page from Silicon Valley’s playbook in an effort to cut production costs and foster a new generation of green-technology businesses.
The company is setting up a venture-capital offshoot called the Sustainable Business & Innovation Lab to back startups focused on alternative energies and more efficient approaches to manufacturing. The lab also will seek out companies that promote healthy lifestyles, according to a description on Nike’s site.
Nike is counting on innovation to help it cope with the economic slump and supply constraints. The Nike Free, a lightweight running shoe, helped boost sales 18 percent to $6.08 billion last quarter, topping analysts’ estimates. The company also has sought ways to lower expenses amid rising costs for raw materials, labor and transportation. 630. Moved at 9:00. By Olga Kharif and Matt Townsend. Embargoed for use at 12:01 a.m. Eastern time on Sept. 29.
Felon Forecaster Blogs on Economic Cycles After 11 Years in Jail
Martin Armstrong is a self-taught economist who is starting to build an Internet following from an almost-empty office across the street from Philadelphia City Hall. He’s also an unrepentant felon who spent 11 years in prison for cheating investors out of $700 million and hiding $15 million in assets from regulators.
In Armstrong’s view of the world, where boom-bust cycles occur like clockwork every 8.6 years, what matters is his record as a forecaster, not as a criminal. He called Russia’s financial collapse in 1998, using a model that also pointed to a peak just before the Japanese stock market crashed in 1989. These days, as the European sovereign-debt crisis roils markets worldwide, he reminds readers of his October 1997 prediction that the creation of the euro “will merely transform currency speculation into bond speculation,” leading to the system’s eventual collapse.
“The stuff I wrote about in ‘97 is all coming true,” he said in an interview, the first since being released from jail in March. Armstrong says on a website on which he writes that his 1999 indictment stemmed from “wild and unfounded allegations related to his business in Japan.”
That’s not the view of prosecutors, who said he ran one of the largest Ponzi schemes in history, or of three federal judges, who called him a con artist or cheat. Economists dismiss his cycle theory. 1300. Moved at 13:20. By Zeke Faux and David Glovin.
PHOTOS: Martin Armstrong is shown at his office in Philadelphia on Sept. 12, 2011. Photographer: Paul Taggart.
‘Extreme Couponing’ Shoppers Pose Loyalty Test for Stores: Tech
Extreme couponing, a consumer trend spurred on by the reality TV series of the same name, may make deal-chasing U.S. shoppers less loyal to retailers from Kroger Co. to Staples Inc.
In the first half of this year, U.S. consumers redeemed 1.75 billion coupons for a savings of $2 billion, according to NCH Marketing Sevices. That’s an 18 percent increase from the same period in 2009, when packaged goods companies began stepping up discounts to spur demand, the Deerfield, Illinois- based firm said.
Many consumers are taking their cues from blogs, websites and “Extreme Couponing,” which features regular folks sharing their couponing exploits and starts its second season tonight. By Ashley Lutz.
-0- Sep/28/2011 17:52 GMT