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, email@example.com or 1-212-617-5392. The main number for the department is 1-212-617-4300.
TOP BUSINESS NEWS
Major companies due to report earnings after the 16:00 close of regular trading in New York: Visa Inc. (V), Norfolk Southern (NSC)
U.S. Stocks Little Changed as Europe Offsets Economic Reports
U.S. stocks were little changed, following the biggest drop in three weeks for the Standard & Poor’s 500 Index, as concern over European debt-crisis talks offset better-than-forecast economic reports. Developing. US-STOCKS-FINAL to move by 17:00.
Impasse on Greek Debt Relief Threatens EU Crisis Summit Deal
European Union talks with banks on bondholder losses as part of a second Greek bailout were deadlocked, an EU official said, dimming the chances for a comprehensive crisis-fighting strategy at tonight’s summit.
German Chancellor Angela Merkel doused expectations of a breakthrough, saying on the way into the meeting at EU headquarters in Brussels that “work’s not been done yet, but everyone’s coming here today with the goal to progress quite a bit.”
The Greek deadlock darkens the summit’s prospects, since deals on recapitalizing banks and bolstering the 440 billion- euro ($608 billion) rescue fund hinge on steering debt-laden Greece back toward financial health. 750. Moved at 12:05. By Aaron Kirchfeld and James G. Neuger. Also see BERLUSCONI- FRAYING-COALITION-EARLY-VOTE.
Ex-Goldman Sachs Director Rajat Gupta Indicted for Fraud
Former Goldman Sachs Group Inc. director Rajat Gupta was accused by U.S. prosecutors of conspiracy and securities fraud, making him the highest-ranking executive charged in a nationwide crackdown on insider trading centered on Raj Rajaratnam, co- founder of hedge fund Galleon Group LLC.
Gupta, who also sat on the board of Procter & Gamble Co., was charged with five counts of securities fraud and one count of conspiracy to commit securities fraud in an indictment unsealed today in Manhattan federal court. The U.S. Securities and Exchange Commission also sued Gupta today. 1380. Moved at 13:05. By Patricia Hurtado, David Glovin and Chris Dolmetsch.
Corzine’s MF Enters Distress With 18% Yields: Corporate Finance
MF Global Holdings Ltd. is looking into options that might include selling itself after investors pushed bonds of the futures brokerage that is trying to become an investment bank into distressed territory for the first time yesterday.
Evercore Partners Inc. is advising MF Global on the review of its business, said a person with knowledge of the matter, who declined to be identified because the discussions are private. The hiring of Evercore was first reported by the Wall Street Journal. Its 6.25 percent bonds due in August 2016 have fallen into distressed territory this week, yielding 17.83 percent, or 16.8 percentage points more than comparable-maturity Treasuries.
MF Global, headed by former Goldman Sachs Group Inc. leader Jon Corzine, reported its biggest quarterly loss ever yesterday. The day before, Moody’s Investors Service cut its credit ratings on concern that the broker won’t meet earnings targets and may not be able to manage investments in European sovereign debt. 900. Moved at 12:25. By Matthew Leising.
U.S. Economy: Durable Goods Orders Help Sustain Expansion
Orders for U.S. durable goods other than transportation gear rose in September by the most in six months, indicating manufacturing will help sustain an economy hobbled by 9.1 percent unemployment.
Demand for goods meant to last at least three years, excluding airplanes and automobiles, climbed 1.7 percent, according to figures from the Commerce Department issued today in Washington. Another report from the department showed purchases of new homes rose more than forecast. 950. Moved at 12:05. By Alex Kowalski. Also see ECONOMY-NEW-HOME-SALES.
GRAPHIC: US_ECO_HOME_SALES_NEW_102611. Graphic shows the number of new homes sold in the U.S. and their median price over time. Available now in two sizes: 1C X 4 in. (45.9 mm X 114.3 mm) and 2C X 3.75 in. (96 mm X 95.25 mm)
Amazon’s Apple War Costs Investors $11 Billion as Shares Slump
Amazon.com Inc.’s escalating pursuit of Apple Inc. squeezed its profit forecast for this quarter, prompting investors to erase as much as $11 billion from the company’s market value.
Amazon’s operations could lose $200 million in the fourth quarter as costs mount, the Seattle-based company said yesterday. The shares fell 11 percent to $203.30 at 9:44 a.m. New York time, the biggest intraday drop since July 23, 2010.
The company is taking on Apple in the market for tablet computers and sales of digital songs, books and movies. To gain an edge in tablets, Amazon is selling its new Kindle Fire device for as low as $199 -- less than half the price of Apple’s cheapest iPad. At that price, the company will lose $10 per device, research firm IHS Inc. estimates. 910. Moved at 10:05. By Danielle Kucera.
Hewlett-Packard Challenges Intel Picking ARM Server Chips: Tech
Hewlett-Packard Co., the largest computer maker, is planning to sell servers based on ARM Holdings Plc technology, two people familiar with the matter said, posing a challenge to Intel Corp.’s dominance.
Hewlett-Packard is working on the chips with Austin, Texas- based Calxeda Inc., a company partly owned by U.K.-based ARM, said the people, who declined to be identified because the plans haven’t yet been made public.
The move would escalate ARM’s rivalry with Intel, which accounts for about 90 percent of the processors used in servers, the powerful machines that run websites and corporate networks. ARM aims to enter the $9 billion server-processor market by building chips that will help companies rein in the cost of maintaining expanding fleets of servers. 520. Moved at 9:45. By Ian King and Aaron Ricadela.
Lexus Ranked Best Luxury Auto Brand While Porsche Plunges: Cars
Toyota Motor Corp.’s Lexus brand took back the top spot among luxury brands in Consumer Reports reliability ranking, beating BMW, Mercedes-Benz and Porsche, which fell the most of any vehicle line.
Winning the luxury crown as well as the top spot among al brands with its youth-oriented Scion line may help Toyota restore confidence among consumers following two years of falling U.S. sales, recalls, unflattering reviews and producti lost because of the March earthquake in Japan. 820. Moved at 8:40. By David Welch and Alan Ohnsman.
WellCare Joining Universal as Bait With Aging Boomers: Real M&A
Aetna Inc.’s dearth of Medicare customers as baby boomers reach retirement age is transforming WellCare Health Plans Inc. and Universal American Corp. into takeover targets.
Cigna Corp.’s $3.8 billion deal to buy Healthspring Inc. this week has left Aetna with the fewest Medicare customers among the five largest U.S. health insurers, according to data compiled by Bloomberg. Buying Coventry Health Care Inc., with 1.37 million Medicare customers, or WellCare, with 1.07 million, would give Aetna’s 837,000-member program the biggest boost, the data show. Universal American, which primarily manages Medicare plans, is the cheapest U.S. health insurer relative to earnings. 1710. Moved at 10:15. By Pat Wechsler, Devin Banerjee and Jeffrey McCracken.
Furniture Recovery Stalls as Housing Values, Confidence Sink
The U.S. furniture industry hasn’t emerged from the recession because a “gridlock in housing” has sapped spending on couches and home items, said Furniture Brands International Inc. Chief Executive Officer Ralph Scozzafava.
Revenue at Furniture Brands, the maker of the Broyhill, Lane and Thomasville lines, is projected to drop for a fifth straight year in 2011, to $1.15 billion, according to the average of analysts’ estimates compiled by Bloomberg.
Demand won’t recover without a rebound in housing sales and consumer confidence, Scozzafava said. Home prices in 20 U.S. cities declined more than forecast in August, spotlighting the housing slump’s drag on the economic recovery. 470. Moved at 9:40. By Chris Burritt.
Nokia Shows Lumia Windows Phones in Bid for Share From Apple
Nokia Oyj, the Finnish handset maker seeking to revive its lineup of smartphones in the race against Apple Inc., introduced its first handsets powered by Microsoft Corp.’s Windows Phone software.
The Lumia 800, featuring a curved display and available in cyan, black and magenta, will sell for about 420 euros ($585) excluding taxes and subsidies. Nokia also showed a 270-euro Lumia 710 and introduced the Asha family of lower-priced phones at the Nokia World event in London today. 900. Moved at 6:50. By Diana ben-Aaron.
Wal-Mart to Close New York Apparel Office in Focus on Basics
Wal-Mart Stores Inc., the world’s largest retailer, is closing its New York apparel office as it works to reduce costs and focus on more basic clothing.
The office on Broadway between 37th and 38th Streets opened in 2009 and has about 275 employees handling functions including product development and buying for Bentonville, Arkansas-based Wal-Mart. Those functions will be transferred to offices in the company’s hometown by Feb. 1, according to a memo obtained by Bloomberg. 400. Moved at 11:05. By Matthew Boyle.
Biggest Hedge Funds to Open Secrets to Regulators in 2012
The U.S. Securities and Exchange Commission responded to objections from hedge funds and private-equity funds by dialing back demands in its new rule calling for fund advisers to report internal information to regulators.
Revising its proposal from January -- approved in a unanimous vote today -- the agency eased thresholds for defining which large funds will have to report the most information starting next year. It also allows private-equity funds to report less often than initially proposed. 460. Moved at 11:40. By Jesse Hamilton.
TOP GENERAL NEWS
Clean-Energy Developers Reaped Excess U.S. Aid, Auditors Find
The Obama administration overpaid renewable power developers in a federal grant program, including $2.08 million distributed to a unit of Acciona SA, a Spanish maker of wind turbines, according to government investigators.
The excess payment to EcoGrove Wind LLC, a unit of Acciona, was uncovered in an audit by the U.S. Treasury Department’s inspector general. EcoGrove received a $67.9 million grant in October 2009 for a wind farm in Illinois through a program to promote clean power created in the economic stimulus bill that year. 1160. Moved at 12:45. By Jim Efstathiou Jr.
Perry Offers Tax-Cut Choice to Minimize Harm of Simple System
Texas Governor Rick Perry’s 20 percent flat-tax plan avoids one of the pitfalls of similar single-rate proposals by protecting any filers from a guaranteed tax increase. In the process, it retains some tax complexity and ensures federal revenue collections will fall.
The Republican presidential candidate’s plan would create a $12,500 per-person exemption with only a few other deductions, offering a boon to high-income taxpayers who would face lower rates and no longer pay taxes on investment income. People could choose that regime or continue to file under the current code. 1340. Moved at midnight. By Richard Rubin.
TransCanada Pipeline Threatened by Proposed Nebraska Re-Routing
TransCanada Corp.’s Keystone XL pipeline may be threatened by legislation in Nebraska that would re-route the $7 billion project designed to bring Canadian crude to refineries on the Gulf of Mexico.
At a special session on Nov. 1, Nebraskan lawmakers will consider a bill aimed at forcing Calgary-based TransCanada to move the pipeline to the state’s eastern edge, a step that company officials said may put the project in jeopardy.
Ranchers in Nebraska and environmentalists have raised concerns that the pipeline’s path in the state across a freshwater aquifer and marshy terrain pose unacceptable risks in the event of an oil spill. The state’s governor and both U.S. senators oppose the project’s route. 1050. Moved at 12:00. By Bradley Olson.
Tuition Jumps 8.3% Doubling Inflation as Obama Plans Debt Relief
Tuition and fees at U.S. public universities soared 8.3 percent this year, twice the rate of inflation, to an average $8,244, a College Board report found. Nonprofit private college costs rose 4.5 percent to $28,500.
Surging tuition has left the average college graduate with more than $20,000 in loans, according to the College Board. In response, President Barack Obama’s administration said late yesterday that it will use its executive authority to reduce loan payments for millions of students. 920. Moved at midnight. By John Hechinger and Janet Lorin.
BUSINESS NEWS FEATURES
IBM’s Rometty Breaks Ground as Company’s First Female Leader
International Business Machines Corp.’s Virginia “Ginni” Rometty has grown throughout her career by taking on challenges she’s never faced before. Now she’ll tackle something no one has ever done.
Rometty, 54, will become the first female chief executive officer in IBM’s 100-year history. The Armonk, New York-based company said yesterday she will succeed Sam Palmisano in the role effective Jan. 1. Palmisano, who has been CEO since 2002, will remain chairman.
In an interview, Rometty said she has grown the most in her career through “experiential” learning.
“I learned to always take on things I’d never done before,” she said. 1340. Moved at 10:25. By Carol Hymowitz and Sarah Frier.
Samuel Palmisano, CEO of International Business Machines Corp. poses with Senior Vice-President Virginia Rometty at IBM’s corporate headquarters in Armonk, New York. Photographer: Jon Iwata/IBM via Bloomberg.
San Francisco Dining’s ‘Golden Age’ Lifts Retail Real Estate
San Francisco’s wave of new restaurants is driving the retail property market as tourism and technology firms bolster a dining revival throughout the city.
Almost 300 eating, drinking and food-related establishments have opened in the last two years, spurring a surge in demand for street-level real estate, according to Cushman & Wakefield Inc. The retail vacancy rate, already the lowest in the U.S., will drop further and rents are poised to rise as more businesses seek space, said Ryan Severino, senior economist at research firm Reis Inc.
“The city is firing on all cylinders and we don’t have a lot of space that’s turn-key ready or easy to convert,” said Kazuko Morgan, head of retail at Cushman’s San Francisco office. Food deals account for a third of the brokerage’s retail business in the city, she said. 1300. Moved at 10:25. By Dan Levy and Hunter Holcombe.
Billionaire Living Out of Tote Bag Amasses Fortune to Give Away
Nicolas Berggruen can’t sit still.
An hour into our interview, at the poolside restaurant of the Hotel Cipriani in Venice, Italy, the billionaire investor glances at the lunchtime crowd drifting over from their sun loungers. He fidgets. His fingers pirouette along the table edge. Polishing off a cappuccino that’s heaped with mounds of whipped cream, he suggests we move.
Berggruen selects a pair of wicker sofas on a patio outside the hotel bar. “It is better here, no? A little cooler,” he says. Five minutes later, he decides we are too close to a boisterous group. So we move again, this time to a table tucked discreetly into the corner of a deserted veranda on the far side of the hotel, Bloomberg Markets magazine reports in its December issue.
Berggruen, 50, lives his whole life this way, always on the move, as he seeks out companies to buy from Berlin to Bangalore to Brisbane. For the past decade, the dual American and German citizen has had no fixed home address. He constantly roams the world on his Gulfstream IV jet, living out of five-star hotels. Most of the time, he carries only a small tote bag containing clothes and his BlackBerry. 1100. Moved at 13:25. By Jeremy Kahn.
PHOTOS: Nicolas Berggruen poses for a portrait in New York. Photographer: JB Reed.
GENERAL NEWS FEATURES
Nurse Making $269,810 Demonstrates California’s Overtime Binge
Jean Keller earned $269,810 last year working as a nurse at a men’s prison on California’s central coast by tripling her regular pay with overtime hours.
Keller got more overtime in 2010 than any other state employee. In all, California’s public workers collected $1.7 billion of extra pay last year, more than half of it in overtime, state payroll data show. The rest was for unused vacation and union-negotiated benefits such as clothing allowances, physical-fitness incentives and special compensation in recognition of a “complex work load.”
California paid the additional wages -- enough to fund the average salaries of about 25,000 teachers -- as it faced a $19 billion deficit and cut school spending and services for poor children and the elderly. The state may have to trim the academic year by seven days and eliminate some student busing if revenue shortfalls persist.
The extra compensation underscores a broader trend in California, where government workers are paid more than in other states for similar duties. Among them: city managers whose pay is higher than the governor’s, prison doctors who make more than counterparts in other states and Los Angeles firefighters who collect twice the national mean. 2270. Moved at midnight. By Michael B. Marois.
-0- Oct/26/2011 17:33 GMT