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TOP BUSINESS NEWS
U.S. Stocks Advance Amid Optimism Over Progress on Europe Crisis
U.S. stocks rose, giving the Standard & Poor’s 500 Index the biggest three-day gain since August, amid optimism that European officials were making progress in containing the region’s debt crisis. Developing. US-STOCKS-FINAL to move by 17:00. By Rita Nazareth. Also see GLOBAL-MARKETS-WRAP, US-OIL- MARKETS.
Trichet Says ECB to Buy Covered Bonds, Offer Year-Long Loans
European Central Bank President Jean-Claude Trichet, fronting a policy decision for the final time, said the ECB will resume covered-bond purchases and reintroduce year-long loans for banks as the sovereign debt crisis threatens to lock money markets.
The ECB will spend 40 billion euros ($53 billion) on covered bonds starting next month and will offer banks two additional unlimited loans of 12 and 13-month durations, Trichet said at a press conference in Berlin today after policy makers left the benchmark interest rate at 1.5 percent. He also said the ECB will continue to lend banks as much money as they need in its regular refinancing operations at least until July 2012. 860. Moved at 10:45. By Matthew Brockett and Jana Randow. Also see EU-BANKS-MERKEL.
Apple Looks to Overseas Growth to Stay on Top Without Jobs: Tech
Steve Jobs built Apple Inc. into the world’s most valuable technology company with easy-to-use products that transformed the computing, wireless and music industries. The company will look for overseas growth to extend that legacy and remain an investor favorite.
Apple, which said its visionary founder died yesterday at 56, aims to maintain its expansion in markets such as China, fueling sales of the iPhone and iPad. The company also stands to gain from updated versions of those best-sellers and the new iCloud service, which makes it easier for its gadgets to share information -- and harder for users to switch to rival devices. 1000. Moved at 10:40. By Adam Satariano. Also see COOK-JOBS- LEGACY, JOBS-BIOGRAPHY-RELEASE, APPLE-CUE, APPLE-GRIEF, JOBS- WOZNIAK, APPLE-SHARES-RISE, APPLE-JOBS-TIMELINE.
U.S. 30-Year Mortgage Rate Falls Below 4% for First Time
Mortgage rates in the U.S. fell, sending longer-term borrowing costs below 4 percent for the first time on record, as stricter credit standards and the slowing economy hold back a housing rebound.
The average rate for a 30-year fixed loan dropped to 3.94 percent in the week ended today from 4.01 percent, Freddie Mac said in a statement. That’s the lowest in the McLean, Virginia- based company’s records dating back to 1971. The average 15-year rate declined to 3.26 percent from 3.28 percent last week. 380. Moved at 10:30. By Prashant Gopal.
Target, Limited Brands September Sales Beat Analysts’ Estimates
Target Corp. and Limited Brands Inc. reported September sales that surpassed analysts’ projections as promotions and cooler weather drove purchases.
Revenue at Target, the second-largest U.S. discounter, climbed 5.3 percent, surpassing the average projection for a 3.9 percent gain from analysts surveyed by Retail Metrics Inc. Limited Brands, owner of the Victoria’s Secret chain, posted an 11 percent increase in same-store sales, beating the 4.9 percent average estimate. 510. Moved at 11:15. By Matt Townsend.
Jobless Claims in U.S. Climbed Less Than Forecast Last Week
Claims for U.S. unemployment benefits rose less than forecast last week to a level that shows companies may be starting to slow the pace of dismissals.
Applications for jobless benefits increased by 6,000 in the week ended Oct. 1 to 401,000, Labor Department figures showed today. Economists projected 410,000 claims, according to the median estimate in a Bloomberg News survey. The monthly average dropped to the lowest level since the end of August. 600. Moved at 8:45. By Timothy R. Homan.
Consumer Comfort Index in U.S. Caps Worst Quarter Since 2009
Consumer confidence last week capped the worst quarterly performance in more than two years, when the U.S. economy was still in a recession.
The Bloomberg Consumer Comfort Index rose to minus 50.2 in the week ended Oct. 2, from the prior period’s minus 53 that was the second-lowest level on record. The gauge averaged minus 48.4 from July through September, the third-worst quarterly reading of all time and the weakest since minus 49.9 in the first three months of 2009. 970. Moved at 9:45. By Shobhana Chandra.
Worst Oil Industry Slump Since Lehman May Herald Takeovers
The oil and gas industry’s worst slump since the financial crisis heralds a surge of takeovers for Goldman Sachs Group Inc. and Sanford C. Bernstein Co. as Asia buyers put $150 billion in cash to work.
The market valuation of U.K. and North American exploration company reserves has dropped 23 percent this year to the lowest since 2008, Bloomberg data shows, while Brent crude prices gained 8 percent to $102 a barrel. The dislocation between crude and company valuations is “extreme” and may lead to twice as many deals as usual, Goldman said last month. 830. Moved at 12:10. By Brian Swint.
Gross Trails Index Fund as Top Managers Miss Treasuries Rally
Bill Gross’s Pimco Total Return Fund, the world’s biggest mutual fund, is trailing a low-cost Vanguard index fund this year as some of the top bond investors were blindsided by the rally in Treasuries.
Gross’ fund returned 1.5 percent this year through Oct. 4, compared with 8.9 percent for the $10.4 billion Vanguard Intermediate Term Bond Fund, which outperformed 99 percent of intermediate bond funds tracked by Chicago-based Morningstar Inc. The Vanguard fund, which tracks an index rather than trying to beat it, topped managers including Loomis Sayles & Co.’s Dan Fuss and TCW Group Inc.’s Tad Rivelle. 1600. Moved at midnight. By Charles Stein.
U.S. Apartment Vacancy Drops to Five-Year Low as Rents Increase
U.S. apartment vacancies fell to a five-year low in the third quarter, enabling landlords to increase rents even as tepid job growth slowed leasing in what is usually a strong season for demand, Reis Inc. said. 800. Moved at midnight. By Hui-yong Yu and Katie Spencer.
TOP GENERAL NEWS
Health Law Not Main Cause of Premium Increase: BGOV Barometer
Opponents of the 2010 health-care law cited this year’s jump of more than 9 percent in insurance premiums as evidence the legislation is driving up costs.
The BGOV Barometer shows the 2010 legislation raised premiums for employer-provided health coverage 1.8 percent, accounting for less than a quarter of this year’s increase, according to an analysis by the Commonwealth Foundation, a Washington-based research group that supported the overhaul. 640. Moved at12:25. By Carol Eisenberg. Editors: this Bloomberg Government story moved earlier and is being made available to newspapers today.
GRAPHICS: BGOV_BAROMETER_100611. Graphic shows yearly increases in the average annual premium for family health coverage in the U.S. since 2000. Size: 1C X 1in. (45.9 mm X 25.4 mm); BGOV_LOGO_07251. Bloomberg Government logo Size: 1C X 2in. (45.9 mm X 50.8mm). Available now.
Senate Advances China Yuan Bill House Speaker Calls ‘Dangerous’
The Senate advanced legislation letting U.S. companies seek duties to compensate for an undervalued Chinese yuan, setting up a vote on the measure as soon as today.
The Senate approved 62-38 a motion limiting debate on the bill backed by Democrats such as Senators Sherrod Brown of Ohio and Charles Schumer of New York and Republicans including Lindsey Graham of South Carolina and Jeff Sessions of Alabama.
The legislation, opposed by business groups such as the U.S. Chamber of Commerce, may stall in the House. Republican Speaker John Boehner of Ohio said today that the bill could start a trade war. Developing. By Eric Martin.
Obama Says Jobs Plan Can Protect U.S. Economy From Downturn
President Barack Obama said Congress needs to pass his $447 billion jobs bill quickly to “guard against another downturn” in the U.S. economy if the European debt crisis worsens.
“Our economy really needs a jolt right now,” Obama said in remarks at a White House news conference. He also said he’s “comfortable” with a proposal by Senate Democrats to impose a surtax on people making at least $1 million a year to pay for his plan. 600. Moved at 11:30. By Roger Runningen and Hans Nichols.
Obama to Run Against ‘Do-Nothing’ Congress If Job Bill Fails
Phil Schiliro, then the White House congressional liaison, put his boss on notice last year. One hurdle stood between him and the start of his re-election campaign: lifting the debt ceiling.
While President Barack Obama couldn’t control the European financial crisis or the Arab Spring, the fight over the nation’s borrowing limit was forewarned. Yet the White House didn’t engage immediately; got pulled into fruitless negotiations over a broader budget deal; and finally had to make major concessions at the brink of default.
The fight over raising the debt limit is one example of the administration’s strategic missteps that have contributed to the record-low approval ratings for Obama and sparked internal White House dissension. 1630. Moved at 12:50. By Julianna Goldman.
Romney, Perry Each Seek Momentum as Next Republican Debate Looms
Mitt Romney and Rick Perry are grappling for momentum in the Republican presidential race, competing for donors, supporters and attention as the field of candidates has solidified and they prepare for a debate next week focused on the U.S. economy.
Both received boosts this week.
Perry’s campaign said yesterday that the Texas governor raised more than $17 million through Sept. 30, a total likely to exceed his rivals during the year’s third quarter. He also stands to benefit from the announcement yesterday by former Alaska Governor Sarah Palin that she won’t enter the race, giving Perry a chance to compete for uncommitted social and fiscal conservatives who were awaiting her decision. 1400. Moved at midnight. By John McCormick and Jonathan D. Salant.
Harvard Loses Top World University Ranking for First Time
Harvard University lost its top spot for the first time in eight years in a global ranking of higher education institutions, being overtaken by the California Institute of Technology.
Another California institution, Stanford University, tied with Harvard for second spot in the annual table compiled by the London-based Times Higher Education, with data supplied by Thomson Reuters Corp. The University of Oxford climbed to fourth from sixth last year, beating the University of Cambridge at sixth. Princeton University came fifth. 900. Moved at 10:25. By Namitha Jagadeesh.
BUSINSES NEWS FEATURES
Fed Scrutinizes Farm Banks as Soaring Land Draws Bubble Concern
When regulators come knocking at the Bank of Newman Grove, Nebraska, inquiring about loan risks, Chairman Jeffrey Gerhart has a “stress test” ready to show how his portfolio would fare if rural land prices dropped 25 percent. Or 50 percent. Or 75 percent.
“I hope it’s not going to go to heck in a handbag out here but this allows us to look at those worst-case scenarios,” said Gerhart, a fourth-generation banker in the 800-person town two hours west of Omaha, deep in the heart of Nebraska’s corn and soybean belt. He began stress testing his bank’s assets, about 90 percent of which are agricultural, in the last two years after prodding from staffers at the Federal Reserve Bank of Kansas City.
Farmland prices in Nebraska rose 30 percent in the second quarter from a year earlier, according to a survey by the Kansa City Fed, driven by soaring farm income from elevated agriculture commodity prices and record-low interest rates. That’s the high end of increases in cropland valuations of 8 percent or more throughout the region stretching from Oklahoma to North Dakota and from Nebraska to Michigan, according to surveys by three Federal Reserve banks. The Fed banks -- Kansa City, Chicago and Minneapolis -- oversee about three-quarters the nation’s farm banks.
Regulators and bankers like Gerhart are trying to use smarter policies and better information to prevent this asset price surge from forming what Yale economist Robert Shiller called his “dark-horse bubble candidate for the next decade.” 1680. Moved at 9:55. By Joshua Zumbrun.
Black Swan Manager Returning 23% Anticipating Bear Market
Mark Spitznagel pushes the throttles on his new twin-engine Chris-Craft Corsair 28, slicing through Grand Traverse Bay in northern Michigan on a warm day in late July. As the speedboat reaches more than 50 miles per hour, Spitznagel’s blond hair flying in the wind, he churns up a big wake.
Turbulence is where Spitznagel, the founder of hedge fund Universa Investments LP, thrives. On Aug. 4, while Spitznagel is still at his lake house, the Standard & Poor’s 500 Index begins to plunge as weak economic data prompt predictions of a double- dip recession. By noon, Spitznagel, a so-called black swan investor, has spoken with his Santa Monica, California-based firm 15 times by phone to capitalize on its positions to make money while other investors lose it, Bloomberg Markets magazine reports in its November issue. 1040. Moved at 12:10. By Seth Lubove and Miles Weiss.
PHOTO: Mark Spitznagel poses in Michigan in August. Photographer: Peter Yang.
LVMH’s Hublot Seeks Single Woman for $5 Million Watch: Retail
Hublot wants to prove that behind a successful $5 million watch, there’s a woman.
The Swiss brand, which sold a $3 million diamond-laden Big Bang model within a day this year, is upping the ante by creating its most expensive timepiece ever, encrusting it with as many as 300 carats of diamonds to grab the attention of its new target market: ladies’ watches.
“Women are buying more than men, women are buying more often than men and women are very influential over men, so you have three good reasons to work on this population,” Chief Executive Officer Jean-Claude Biver said in an interview. Hublot, bought by LVMH Moet Hennessy Louis Vuitton SA in 2008, aims to present the one-of-a-kind $5 million watch next year. 770. Moved at 14:00. Moved at By Dermot Doherty.
PHOTO: A diamond-encrusted, Hublot Big Bang wrist-watch is shown a handout photograph released to the media in London. Source: Hublot via Bloomberg.
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