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
Major companies due to report earnings after the 16:00 close of regular trading in New York: Allstate Corp. (ALL)
U.S. Stocks Decline Amid Growing Concern About European Funding
U.S. stocks declined, trimming the biggest monthly advance since 1987 in the Standard & Poor’s 500 Index, on concern European leaders will struggle to raise funds to contain the region’s sovereign debt crisis. Developing. US-STOCKS-FINAL to move by 17:00. By Rita Nazareth. Also see GLOBAL-MARKETS-WRAP, US-OIL-MARKETS.
MF Global Files for Bankruptcy After Bets on European Debt
MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.
The New York-based firm listed total debt of $39.7 billion and assets of $41 billion in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan. Its finance unit, MF Global Finance USA Inc., also filed, with debt of as much as $50 million and assets of as much as $500 million. By Tiffany Kary.
Bonds Beat Stocks Over 30 Years for First Time Since 1861
The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that’s happened since before the Civil War.
Fixed-income investments advanced 6.25 percent this year, almost triple the 2.18 percent rise in the Standard & Poor’s 500 Index through last week, according to Bank of America Merrill Lynch indexes. Debt markets are on track to return 7.63 percent this year, the most since 2002, the data show. Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago. By Cordell Eddings.
Profits Top Estimates for 11th Quarter as Analysts See Rally
American companies are beating Wall Street profit estimates for the 11th straight quarter, enough to revive a bull market that analysts say will eclipse any rally in the past 12 years.
A total of 222 out of 298 Standard & Poor’s 500 Index companies that reported results since Oct. 11 have exceeded forecasts for the third quarter, according to data compiled by Bloomberg. Price targets for companies in the index from more than 10,000 estimates suggest the S&P 500 will advance 13 percent to 1,447.93, a year from Oct. 28’s close. By Whitney Kisling.
Economy Revives as Consumer Shows What’s Done Refutes Sentiment
Americans’ urge to shop is overriding anxiety about the economy.
While household-sentiment measures are at levels typically observed during a recession, an increase in spending during the third quarter boosted growth to the highest level of the year, Commerce Department figures showed Oct. 27. The schism partly reflects consumer ire with the government’s failure to reduce 9.1 percent unemployment or stem rising deficits, said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management.
“Emotionally based indicators are suspect,” Paulsen said. “There is a lot of anger out there. In a calmer time, these indicators might provide a better guide. Consumers are scared to death, but they are still spending.” 1500. Moved at 13:00. By Steve Matthews and Cotten Timberlake.
Business Activity in U.S. Grows as Factories Lift Recovery
Business activity in the U.S. expanded in October at about the same pace as in the prior month, a sign overseas demand and business investment will help keep the economy expanding.
The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 58.4 in October from 60.4 the prior month. A level of 50 is the dividing line between expansion and contraction. The group’s employment gauge climbed to a six-month high. 710. Moved at 10:22. By Bob Willis.
Groupon IPO a Must as Cash Needs Climb With Investor Tally: Tech
Groupon Inc.’s decision to push ahead with an initial public offering as other startups hold off may be driven more by necessity than choice: The company needs cash to keep growing and is nearing the number of shareholders that requires it to report financial results.
Groupon is seeking to raise as much as $540 million, saying it won’t need to use the money for at least a year and has no urgent cash needs. Even so, the biggest provider of online daily deals owed almost twice as much to merchants at the end of September as it held in cash. Marketing costs rose 37 percent in the latest quarter, four times as quickly as its cash pile. 1250. Moved at midnight. By Ari Levy.
MetroPCS May Be No Answer for U.S. Concerns With AT&T Deal
MetroPCS Communications Inc., the wireless carrier looking to expand, may struggle to become a viable replacement for T- Mobile USA as AT&T Inc. tries to win government approval to buy the company from Deutsche Telekom AG.
MetroPCS has less than one-third the customers of T-Mobile, the fourth-largest U.S. wireless carrier, and covers less than half the U.S. population. The company would need to spend as much as $10 billion for wireless spectrum and customers to compete with Verizon Wireless, Sprint Nextel Corp. and AT&T, said Michael Mahoney, senior managing director and portfolio manager at San Francisco-based Falcon Point Capital LLC. That is probably beyond its capability, he said. 1060. Moved at 11:15. By Olga Kharif and Scott Moritz.
Europe Tries To Recapitalize Banks Without Injecting Capital
Europe’s largest banks may raise just a tenth of the total capital shortfall estimated by regulators, fueling concern policy makers’ plans to bolster the region’s lenders could fail.
European Union leaders ordered banks last week to increase the ratio of “highest quality” capital they hold by the end of June, creating a shortfall of 106 billion euros ($148 billion). Of Europe’s 28 largest lenders, only eight will need to raise a total of 11 billion euros from investors, Huw Van Steenis, a Morgan Stanley analyst, wrote in an Oct. 28 report.
Rather than tapping investors or governments, firms are trying to hit the 9 percent core capital target by adjusting risk-weightings, limiting dividends, retaining earnings, reducing loans and selling assets. Banks had threatened to curb lending, risking a recession, to meet the goal rather than take government aid that would bring limits on bonuses and dividends. 1260. Moved at 7:50. By Liam Vaughan and Gavin Finch. Also see EUROPE-CRISIS-G20, RESCUE-PLAN-EUROPEAN-CREDIT.
Draghi in Battle Mode on Day One as Debt Crisis Torments ECB
Jean-Claude Trichet had almost four years to settle into the role of European Central Bank president before being thrown into crisis-fighting mode. Mario Draghi goes to battle on day one.
Draghi, who succeeds Trichet tomorrow, becomes chief guardian of the euro with its 17-nation economy facing the risk of recession, a victim of the two-year-old sovereign debt crisis politicians are struggling to fix. As ECB president, he will be the second most powerful central banker in the world after Federal Reserve Chairman Ben S. Bernanke, and a key figure in the struggle to restore investor confidence in Europe’s monetary union. 1500. Moved at 5:15. By Jeff Black and Simon Kennedy.
China Online Sales Seen Tripling Driving Warehouse Surge: Retail
China’s largest online retailers expect sales to as much as triple next year, setting off a rush for warehouse space that’s pushing up rents in the world’s fastest-growing major economy.
“Everyone wants more warehouses,” Ji Wenhong, chief executive officer of luxury goods seller xiu.com, said in an interview. “Any warehouse bigger than 20,000 square meters will be leased the second it’s out on the market.”
Wal-Mart Stores Inc.-backed Yihaodian is looking for more space in anticipation of need. 360buy.com, China’s second- largest e-commerce company by sales, plans to invest as much as 6 billion yuan ($943 million) over the next three years to build seven distribution centers as the Beijing-based company expects 2011 sales to triple from last year to 30 billion yuan. 970. Moved at 7:30. By Bloomberg News.
Disney Licenses Older Shows to Amazon’s Video Streaming Service
Walt Disney Co., owner of the ABC TV network and Disney Channel, will license a limited number of its older TV shows to Amazon’s Prime streaming video service, the world’s biggest Internet retailer said in a statement.
Disney will license more than 800 episodes of such shows as ABC’s “Lost” and “Grey’s Anatomy” and “Phineas and Ferb” from its Disney Channel. The titles will be available for the holidays, Amazon’s director of video content acquisition, said in the statement. The service will have almost 13,000 episodes by early next year, he said.
Disney also extended its agreement with Netflix to add older movies and TV shows for that service as well, according to a separate statement. Episodes from Disney and ABC series will be made available to Netflix 30 days after the final episode of each season airs, according to that statement. 190. Moved at 3:35. By Ronald Grover.
Blavatnik Said to Pull EMI Bid After Failing to Reach Terms
Warner Music Group owner Len Blavatnik withdrew his bid for EMI Group’s recorded music business after failing to agree on a price with owner Citigroup Inc., two people with knowledge of the situation said.
Warner Music offered about $1.5 billion, less than the $1.7 billion sought by Citigroup, said the people, who requested anonymity because the talks are private.
The two sides may still resume talks, one person said. New York-based Citigroup has been fielding offers separately for EMI’s recorded music and publishing assets. The bank took control of London-based EMI, the record label of Coldplay and Katy Perry, in February after the previous owner failed to comply with loan terms. 560. Moved at 5:10. By Andy Fixmer and Zachary R. Mider.
TOP GENERAL NEWS
Cain Denies Reported Sexual Harassment Allegations as ‘False’
Republican presidential candidate Herman Cain denied a report that he sexually harassed two female employees while he served as head of the National Restaurant Association during the 1990s.
“I have never sexually harassed anyone,” he said in an interview today on Fox News. “It is totally baseless and totally false.”
Cain’s campaign is moving to control any political damage from a Politico report that at least two female employees complained to colleagues and restaurant association officials about sexually suggestive behavior by Cain. The women, unnamed in the report, received separation packages in the five-figure range, the website reported yesterday. Developing. Cain will speak today at a National Press Club luncheon. By Lisa Lerer.
PHOTOS: Cain’s appearance before the National Press Club in Washington.
Palestinians Admitted to Unesco in Landslide Vote
Full Palestinian membership in the UN culture body, Unesco, was approved today in a landslide vote which imperils U.S. funding.
The Palestinian membership application for the Paris-based agency won 107 votes in favor with 14 against and 52 abstentions. Palestine becomes the 195 member state in the group best known for its designation of “world heritage” sites.
The vote at the United Nations Educational, Scientific and Cultural Organization sets the stage for a cutoff of U.S. financial support, which totals about $80 million a year, or 22 percent of the operating budget. 660. Moved at 12:20. By Flavia Krause-Jackson.
Obama Calls for FDA to Act on Drug Shortages and ’Gouging’
President Barack Obama will direct the U.S. Food and Drug Administration to reduce shortages of medicines used by hospitals and prevent “price gouging” by resellers of the treatments, a White House official said today.
Obama plans to sign an executive order “directing the FDA to take action to help further reduce and prevent drug shortages, protect consumers and prevent price gouging,” the White House official said in an e-mail. The official spoke on condition of anonymity because the official announcement won’t be made until later today. Developing. By Drew Armstrong.
More Than 2 Million Without Power After Early U.S. Snowstorm
More than 2 million homes and businesses remained without power in the U.S. Northeast two days after the biggest October snowstorm in decades.
Customers in Connecticut, New York and New Jersey lacked electricity after a record snowfall that began on Oct. 29 brought down trees and downed power lines. At the peak, more than 3 million customers lost power, according to utility websites. 620. Moved at 9:55. By Dan Hart and Jim Polson.
BUSINESS NEWS FEATURES
Iranian Police Seizing Dissidents Get Aid Of Western Companies
The Iranian officers who knocked out Saeid Pourheydar’s four front teeth also enlightened the opposition journalist. Held in Evin Prison for weeks following his arrest early last year for protesting, he says, he learned that he was not only fighting the regime, but also companies that armed Tehran with technology to monitor dissidents like him.
Pourheydar, 30, says the power of this enemy became clear as intelligence officers brandished transcripts of his mobile phone calls, e-mails and text messages during his detention. About half the political prisoners he met in jail told him police had tracked their communications and movements through their cell phones, he says.
“This is a commerce of death for the companies that place this technology in the hands of dictatorships,” Pourheydar says. 4180. Moved at 11:35. By Ben Elgin, Vernon Silver and Alan Katz.
Crumbling Bridges’ $140 Billion Tab Leaves Business Paying Price
Jim Benton, a Jeffersonville, Indiana, jewelry-store owner, says sales fell 40 percent in two weeks after the Sherman Minton Bridge connecting his border community to customers in Kentucky closed Sept. 9.
Fifteen miles from the bridge’s Kentucky side, officials at United Parcel Service Inc.’s Worldport, the world’s largest automated package-handling facility, say they’ve used software to reroute trucks with no substantial impact. That’s not so easy for Benton, who said he’s keeping longer hours and buying less merchandise for the holiday season.
Benton’s plight is playing out for small businesses across the U.S., where 3,538 bridges were closed in 2010, as customers shop elsewhere rather than take detours. With the average U.S. bridge seven years from the end of its useful life, and one- fourth of 600,000 crossings classified by regulators as “structurally deficient,” more places will be hurt by closings, said Barry LePatner, founder of LePatner & Associates LLP, a New York-based construction law and consulting firm. 1060. Moved at 10:05. By Carol Wolf.
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