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TOP BUSINESS NEWS
Major companies due to report earnings after the 16:00 close of regular trading in New York: Amazon.com (AMZN), DreamWorks Animation SKG Inc. (DWA)
U.S. Stocks Fall on Disappointing Economic Data as UPS Slumps
U.S. stocks fell, halting a three-day rally in the Standard & Poor’s 500 Index, after United Parcel Service Inc. slumped and economic reports missed estimates as investors awaited tomorrow’s European summit. Developing. US-STOCKS-FINAL to move by 17:00. By Rita Nazareth. Also see GLOBAL-MARKETS-WRAP, US- OIL-MARKETS.
Italy Pressured by EU to Boost Economy as Germany Prepares Vote
European leaders increased pressure on Italian Prime Minister Silvio Berlusconi to specify how he will reach budget- reduction targets as German lawmakers prepared to vote on a revamped euro-area bailout package that officials raced to complete before a summit tomorrow.
Italy needs to back up commitments with “specific actions” and come up with “clear timing,” European Commission spokesman Amadeu Altafaj said in Brussels today after a crisis cabinet meeting in Italy late yesterday failed to announce steps to spur growth. 640. Moved at 9:55. By Chiara Vasarri and Patrick Donahue.
U.S. Economy: Consumer Confidence Sinks, Home Prices Stagnate
Consumer confidence in the U.S. unexpectedly sank and home prices stagnated, showing why the Obama administration and some Federal Reserve policy makers are pivoting to stem a housing slump that is threatening the economic recovery.
The New York-based Conference Board’s household sentiment index slumped to 39.8 in October, the lowest level since March 2009 and less than the most pessimistic forecast in a Bloomberg News survey, the group’s data showed today. Property values in 20 cities were little changed in August from the prior month and down 3.8 percent from 2010, according to S&P/Case-Shiller. 850. Moved at 12:00. By Bob Willis and Shobhana Chandra.
GRAPHICS: US_ECO_HOME_PRICES_YOY_102511. Graphic shows the S&P/Case-Shiller home-price index over the past 60 months and a breakout of the latest year-over-year percent change for each of the 20 cities reflected in the index. Available now in two sizes: 1C X 5.25 in. (45.9 mm X 133.35 mm) and 2C X 5 in. (96 mm X 127 mm); US_ECO_HOME_PRICES_MOM_102511. Graphic shows the S&P/Case-Shiller home-price index over the past 60 months and a breakout of the latest month-over-month percent change for each of the 20 cities reflected in the index. Available now in two sizes: 1C X 5.25 in. (45.9 mm X 133.35 mm) and 2C X 5 in. (96 mm X 127 mm)
Inflation Peaking in U.S. With Most Prices Tumbling: Commodities
The biggest rout in commodities since the global recession may be a sign that the fastest U.S. inflation in three years is peaking.
The Standard & Poor’s GSCI Index of 24 commodities entered a bear market last month after sliding more than 20 percent from a two-year high in April, on concern that slower growth will cut demand. A slump in the gauge from a 2008 record preceded a drop in inflation, while a 2009 rebound caused the consumer price index to climb. Raw materials fell 12 percent in September as the CPI rose 3.9 percent from the same month a year earlier, the most since 2008. 1820. Moved at 11:15. By Whitney McFerron.
Netflix Drops Most Since 2004 After Losing 800,000 Customers
Netflix Inc. dropped the most in seven years after the video-rental service said it lost 800,000 U.S. subscribers in the third quarter, more than expected, and predicted more cancellations over a price increase.
Netflix plunged 37 percent to $75.28 at 9:39 a.m. New York time, for the biggest intraday decline since October 2004. The stock closed at an all-time high of $298.73 on July 13, according to Bloomberg data.
The outlook suggests Netflix has been unable to contain a subscriber revolt over a price increase and aborted plan to force subscribers into separate streaming and DVD services. The company now forecasts losses in 2012 because of costs to offer content in the U.K. and Ireland, and will delay further expansion until profitability is restored. 560. Moved at 10:25. By Cliff Edwards.
Madoff Claims Tumble 17% in Trading Prompted by Rakoff Opinion
Claims against Bernard L. Madoff Investment Securities LLC fell by at least 17 percent in value after U.S. District Judge Jed Rakoff ruled that the firm’s trustee can only try to recover money customers took out in the last two years of the con man’s swindle.
Irving Picard, the trustee hired for the recovery, has filed more than 1,000 suits seeking about $100 billion, including suits for fictitious profits over the last six years of Madoff’s operation, for principal from investors who allegedly had reason to suspect Madoff was a fraud, for money that flowed through feeder funds and overseas banks, and for “preferences,” sums that Madoff paid in the 90 days before bankruptcy. 1000. Moved at 9:25. By Bill Rochelle.
SAC Capital Netted $14 Million in Trading Flagged by Finra
SAC Capital Advisors LP, the hedge fund run by billionaire Steven A. Cohen, made at least $14 million in the past 10 years on suspicious trades, according to the Financial Industry Regulatory Authority.
The brokerage industry’s self-regulatory body referred trades in 19 companies to the U.S. Securities and Exchange Commission for further investigation, according to Finra documents reviewed by Bloomberg News and to two people briefed on the matter. The hedge fund’s bets -- on stocks including Genentech Inc., ViroPharma Inc. and United Therapeutics Corp. - - drew Finra’s attention because they were made before market- moving events such as acquisitions and the release of clinical- trial results for new drugs. 1410. Moved at 11:05. By Joshua Gallu and Saijel Kishan.
Uranium Deals Prove Most Lucrative on Nuclear Demand: Real M&A
Uranium takeovers are offering investors the biggest potential payoffs, less than a year after the partial meltdown of Japan’s Fukushima nuclear plant.
Hathor Exploration Ltd., the owner of a uranium deposit in northern Saskatchewan, is trading 8.4 percent above a bid from Rio Tinto Group that topped an offer from Cameco Corp. That signals investors are now betting Hathor will extract the biggest price hike of any pending North American deal greater than $500 million, according to data compiled by Bloomberg. Kalahari Minerals Plc, which resumed talks with China Guangdong Nuclear Power Group after a takeover was derailed by Japan’s disaster, would now hand shareholders a higher return than the pre-Fukushima agreement, even with a 5 percent lower offer.
Hathor has become the target of a bidding war, while talks to buy Kalahari, which owns a 43 percent stake in the developer of what will be the world’s third-largest uranium mine, have reignited as energy demand surges in developing nations. China, India and Russia are still constructing or planning to build at least 125 nuclear reactors combined in the wake of the March 11 earthquake and tsunami that caused radiation leaks in Japan. 1400. Moved at 11:10. By Tara Lachapelle.
IBM Adds $7 Billion to Share Buybacks to Boost Investor Returns
International Business Machines Corp., the biggest computer-services provider, added $7 billion to its share- buyback plan to boost per-share earnings and investor returns.
The addition brings the size of the repurchase program to $12.2 billion. IBM had $5.2 billion remaining of its previous repurchase authorization, according to a statement from the Armonk, New York-based company today. Last week, IBM said it had bought back $11.5 billion of stock this year. 290. Moved at 11:10. By Sarah Frier.
Ford Seen Resuming Dividend After Labor-Deal Ratification: Cars
Ford Motor Co., which last week won ratification of a new contract with 40,600 U.S. union workers, may restart its dividend for investors with a 5-cent payout as early as January, according to an analysis by Bloomberg.
A dividend would be Ford’s first since September 2006, the month that Chief Executive Officer Alan Mulally joined the Dearborn, Michigan-based automaker. The decision is no longer predicated on a return to an investment-grade credit rating, Chief Financial Officer Lewis Booth said Oct. 20. 860. Moved at 9:50. By Keith Naughton.
Xerox Third-Quarter Profit Increases 28% on Services Demand
Xerox Corp., the provider of printers and business services, reported third-quarter profit climbed 28 percent on increasing spending by customers.
Xerox is benefiting from its shift in focus to enterprise services after last year’s acquisition of Affiliated Computer Services Inc., the company’s largest ever. 350. Moved at 9:50. By Sarah Frier.
3M Cuts Forecast After Quarterly Profit Misses Estimates
3M Co., the maker of LCD television parts and Scotch-Brite sponges, cut its 2011 forecast after reporting profit that fell short of analysts’ estimates for the first time in 10 quarters. The shares slumped. 500. Moved at 9:35. By Thomas Black.
Delta Air’s Profit Misses Estimates as Fuel Outpaces Fares
Delta Air Lines Inc. reported third-quarter profit that trailed analysts’ estimates as higher fuel costs eroded the benefit from rising fares. The shares tumbled the most in three weeks. 320. Moved at 9:50. By Mary Jane Credeur.
TOP GENERAL NEWS
Perry Tax Cut Plan Offers Simplicity Layered Atop Complexity
Texas Governor Rick Perry’s flat-tax fiscal plan would provide broad tax cuts to households that embrace it while retaining the existing system’s complexity as a choice for others.
The plan, announced today in a speech in South Carolina by the Republican presidential candidate, would create a single tax rate of 20 percent for individuals and a $12,500 per-person exemption. Taxpayers could choose that system or file under the existing tax code with all of its exemptions, credits and deductions, a setup that economist Jared Bernstein described as a “complicated beast” that creates parallel systems. 1000. Moved at 13:20. By Richard Rubin.
Qaddafi Buried in Secret Desert Location at Dawn, NTC Says
Former Libyan leader Muammar Qaddafi was buried in a secret desert location at dawn today without the involvement of his tribe, said Abdel Hafiz Ghoga, deputy head of the National Transitional Council.
Qaddafi died Oct. 20 while trying to escape from his besieged hometown of Sirte. Conflicting accounts emerged over the manner of his death, with Human Rights Watch saying evidence suggests he was executed and NTC Chairman Mustafa Abdel Jalil saying initially that Qaddafi died in “crossfire” and later that he may have been killed by loyalists to silence him. 420. Moved at 9:20. By Ola Galal and Caroline Alexander.
Tunisia Islamic Party Considers Alliances With Secularists
Tunisia’s Islamic Ennahdha party said it is discussing alliances with secular groups following the first elections in an Arab country since uprisings began.
Early results show that Ennahdha, banned until six months ago, won 30 percent of the vote for the 217-seat Constituent Assembly, Abdelhamid Jalase, the party’s campaign director, said yesterday. Ali Aridhi, a member of Ennahdha’s executive bureau, said he expects the party to take as many as half the seats. Official results for the elections, the first since President Zine El Abidine Ben Ali’s ouster in January, haven’t been announced. 570. Moved at 10:20. By Jihen Laghmari and Mariam Fam.
Turkey Seeks Quake Survivors as Snow Nears, Death Toll Rises
Turkish emergency rescue teams are working around the clock as the eastern province of Van braces for snow and the death toll rises after the country’s worst earthquake in more than a decade.
The 7.2-magnitude quake on Oct. 23 killed at least 432 people, Prime Minister Recep Tayyip Erdogan’s office said in a statement on its website, raising the toll from the 279 announced late yesterday. Temperatures in Van will range from 2 to 13 degrees Celsius (36 to 55 degrees Fahrenheit) and this afternoon’s rain is expected to turn to snow in the evening, according to the Turkish State Meteorological Service. 520. Moved at 11:25. By Emre Peker.
Bank Protesters Seeking Bans Move Into City Halls on Both Coasts
Advocates for the poor are using the Occupy Wall Street protests in city halls to push municipalities to divest from banks blamed by demonstrators for the global financial crisis and persistent unemployment in its wake.
San Francisco’s Board of Supervisors weighed such a move yesterday during a hearing in which activists, including supporters of the local Occupy SF encampment, urged the adoption of policies that would prompt big banks into modifying mortgages for struggling homeowners.
Communities from California to New York are considering demands to halt doing business with some of the biggest U.S. banks, or at least to focus attention on their local investment activity. 1520. Moved at midnight. By Christopher Palmeri, Freeman Klopott and Alison Vekshin.
Drugmakers Still Pay to Keep Generics Off Market, FTC Says
Brand-name drugmakers are continuing an “anticompetitive” trend of paying generic-drug manufacturers to delay introducing their lower-cost product according to a Federal Trade Commission report.
Drug companies completed 28 potential deals to delay generics in the fiscal year that ended Sept. 30, according the report released today. That’s just under the record of such agreements in the previous fiscal year, the FTC said.
The agency has been pressing Congress and the courts t limit the deals, which the FTC said delay the introduction cheaper drugs. Drugmakers have said that the agreements cut legal costs and in some cases speed up the introduction of less-expensive drugs. 390. Moved at 12:45. By Jeff Bliss.
BUSINESS NEWS FEATURES
Apple’s Jobs Told Cook Not to Ask ‘What Would Steve Do?’: Tech
When Apple Inc. Chief Executive Officer Tim Cook took the microphone at a memorial tribute to Steve Jobs at the company’s campus last week, he shared a piece of advice Jobs gave him before his death on Oct. 5.
“Among his last advice he had for me, and for all of you, was to never ask what he would do. ‘Just do what’s right,’” Cook said. Jobs wanted Apple to avoid the trap that Walt Disney Co. fell into after the death of its iconic founder, Cook said, where “everyone spent all their time thinking and talking about what Walt would do.”
For Apple, which Jobs co-founded at age 21 and built into the world’s most valuable technology company, that’s easier said than done. The challenge for Cook and his executive team will be to maintain Jobs’s legacy without being hobbled by it, said Jeffrey Sonnenfeld, senior associate dean at the Yale University School of Management. 1120. Moved at 13:00. By Peter Burrows.
Jones New York Seeks Overhaul as Sales Lose Momentum: Retail
The man who fixed Mattel Inc.’s $1 billion Barbie brand aims to do the same for Jones New York, the ailing women’s workwear label owned by Jones Group Inc.
Richard Dickson, president of Jones Group, is applying the same methodology he used at Mattel -- “recognizing what made the brand great” and making it “relevant for today,” he said.
“This is absolutely a brand challenge,” Dickson, 43, said in an interview in his 36th-floor Manhattan office. “We haven’t solved it yet. We are at the beginning of our journey.”
Dickson is trying to win back Jones New York’s traditional customer: 40-plus career women who decamped after Jones moved into weekend and sporty apparel. Dickson is pushing his team to concentrate on office clothes that are more fashionable yet not too trendy or impractical. 1050. Moved at midnight. By Cotten Timberlake.
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