The following are the day's top business stories:
1. Ireland Seeks Aid Accord Before Markets Open as Investors Flee Bank Bonds 2. Black Friday Sales Are Little Changed From '09 as Early Openings Fall Flat 3. Dollar Strengthens Most in Three Months on Debt Concern, Tensions in Korea 4. European Stocks Post Biggest Decline in Eight Weeks as Debt Unease Worsens 5. Juncker Sees No Parallels Between Ireland, Portugal After Budget Overhaul 6. GM Offering Increases to $23.1 Billion After Underwriters Exercise Option 7. U.S. Stocks Drop on European Debt, China Rates, Korean Peninsula Tensions 8. Madoff Investors Sued by Bankruptcy Trustee Over Alleged Fictitious Profit 9. Marks & Spencer Reliance Plans to Open 50 Indian Stores in Next Five Years 10.Treasuries Head for Second Monthly Decline Amid Signs of Stronger Economy 11.Otsuka Said to Tell Investors IPO Funds Will Be Used for Drug Acquisitions 12.Most Read on Bloomberg: FBI Raids Hedge Funds, Korea Clash Raises Tension
1. Ireland Seeks Aid Accord Before Markets Open as Investors Flee Bank Bonds
Ireland is pushing to conclude talks for an international rescue package today as European Union officials race to stop the country´s financial crisis from spreading to the rest of the euro region. The Irish government wants to reach an agreement before markets open tomorrow to stamp out the "uncertainty" that´s unsettling investors in the euro region, Energy Minister Eamon Ryan told Dublin-based broadcaster RTE yesterday. European finance ministers plan to meet from around 1 p.m. in Brussels, EU officials said on condition of anonymity. Prime Minister Brian Cowen´s government is finalizing a bailout agreement that may amount to 85 billion euros ($113 billion) after more than 50,000 people took to the streets of Dublin yesterday to protest budget cuts. As Ireland´s crisis spreads to Portugal and Spain, investors are looking for details on the interest rate Ireland will pay on its loans and the fate of senior bondholders in the country´s banks. "The euro is under threat here," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. "The market has got it into its head that it is going to pick off one country at a time."
2. Black Friday Sales Are Little Changed From '09 as Early Openings Fall Flat
Black Friday sales were little changed, rising 0.3 percent, from last year, as U.S. retailers´ efforts to lure customers by opening early failed, ShopperTrak said. The early holiday sales and promotions boosted sales and traffic for the first two weeks of this month through Nov. 13 by 6.1 percent and 6.2 percent, respectively, ShopperTrak said in a statement on its Website. Shoppers nationwide spent $10.69 billion yesterday, Bill Martin, founder of Chicago-based research firm ShopperTrak, said in the statement. Black Friday is the day after Thanksgiving Day in the U.S. and the traditional beginning of holiday season buying. Hundreds of people lined up at individual stores across the U.S. to take advantage of special deals as they face down a slow economic recovery. Sears Holdings Corp. and Toys "R" Us Inc. started their Black Friday "doorbuster" sales on Thanksgiving Day to attract consumers after two years of dampened shopping enthusiasm since the recession.
3. Dollar Strengthens Most in Three Months on Debt Concern, Tensions in Korea
The dollar gained the most since August against six major counterparts as concern that Europe´s debt problem will worsen and military action in Korea will escalate boosted demand for the U.S. currency as a refuge. The greenback rose against the yen for a fourth straight week, the longest streak in 20 months, after North Korea shelled a South Korean island and said "escalated confrontation" will lead to war. The euro fell for a third week versus the greenback as investors speculated Portugal and Spain will be the next European countries to need a financial rescue. The U.S. added jobs in November for a second month, data next week may show. "The euro has further to fall against the dollar," said Kathy Lien, director of currency research at online currency trader GFT Forex in New York. "If there is a war amongst the Koreas, the yen would fall off aggressively against the dollar." The Dollar Index rose for a third week, gaining 2.4 percent, the most since the five days ended Aug. 13, to 80.382. IntercontinentalExchange Inc. uses the gauge to track the U.S. currency against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona. It reached 80.522 yesterday, the strongest level since Sept. 21.
4. European Stocks Post Biggest Decline in Eight Weeks as Debt Unease Worsens
European stocks had their biggest weekly decline in eight weeks as concern mounted that peripheral euro area countries can´t repay their debt and North Korea fired shells on South Korea for the first time since the 1950-53 war. Banks and insurers led the decline as investors waited to find out how much Ireland will borrow from the European bailout fund and as the cost of insuring Portuguese government debt rose to a record. Bank of Ireland Plc tumbled 45 percent, the largest weekly drop in the benchmark Stoxx Europe 600 Index. Banco Santander SA plunged 12 percent and BNP Paribas SA lost 8.5 percent. The benchmark Stoxx 600 fell 1.1 percent this past week, the biggest weekly drop since September. The gauge has still rallied 15 percent since its low this year in May as investors speculated that the world economy will grow after companies reported better-than-estimated results and central banks from the U.S. to Japan announced more stimulus measures to prop up the economic recovery. "After Ireland, Portugal is a likely candidate for aid with Spain close behind," John Plassard, head of European equities at Louis Capital Markets LP, said. "Amid these problems, the geopolitical problem between the two Koreas is the cherry on the cake in a bad week."
5. Juncker Sees No Parallels Between Ireland, Portugal After Budget Overhaul
Luxembourg´s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said Portugal´s situation is different from that of Ireland, which last week sought international aid, Belgian newspaper L´Echo reported. "There are no parallels whatsoever between Ireland and Portugal," Juncker said in an interview to be published in today´s edition. "The budgetary reform plan Portugal put on the table is quite consistent. And the banking sector shows signs of robustness." Portuguese bonds have dropped as the government struggles to convince investors it can avoid the fate of Ireland and Greece, which have asked for European Union bailouts this year. Portuguese Finance Minister Fernando Teixeira dos Santos said yesterday that governments can´t impose a bailout on his country after the Financial Times Deutschland reported that it´s being forced to seek aid On the question of extending the European Financial Stability Facility, Juncker said that "even if some could see it as wise to prolong the existence of this mechanism, some member nations see that differently." He said that he favours the creation of a permanent crisis mechanism.
6. GM Offering Increases to $23.1 Billion After Underwriters Exercise Option
General Motors Co. said the total value of common and preferred stock sold in its initial public offering reached $23.1 billion after underwriters exercised an option to purchase more shares. The banks bought an additional 71.7 million common shares at $33 each for $2.37 billion and 13 million more preferred shares for $650 million, GM said in a statement yesterday. The amount of common and preferred shares sold was more than the $22.1 billion raised by Beijing-based Agricultural Bank of China Ltd. this year in the biggest IPO of common stock in history. The underwriter´s purchase increases the amount of stock sold by the U.S. Treasury in the IPO to $13.6 billion, bringing Chief Executive Officer Dan Akerson closer to his goal of returning the $49.5 billion the automaker received in a taxpayer bailout. Detroit-based GM´s shares have climbed 2.4 percent since the company originally raised $20.1 billion on Nov. 17. "There is a lot of demand right now for the automakers," said Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas in Norfolk, Virginia, which manages about $1.6 billion. "The stock has held up very well," since GM began trading, he said.
7. U.S. Stocks Drop on European Debt, China Rates, Korean Peninsula Tensions
U.S. stocks fell this week, led by banks, amid concern that an Irish financial bailout will fail to stem Europe´s debt crisis, China will raise interest rates to cool inflation and the Korean peninsula conflict will escalate. "Those things paint a pretty grave image," said Peter Sorrentino, who helps oversee $13.8 billion at Huntington Asset Advisors in Cincinnati. "They serve to keep the real fundamental investors on the sidelines because they´re reasons not to take a risk." JPMorgan Chase & Co. and Bank of America Corp. led declines in the Dow Jones Industrial Average, both losing more than 4.6 percent, after Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened a rerun of the Greek debt crisis. Hewlett-Packard Co. limited losses for the benchmark, rising after its profit forecast exceeded estimates. The Standard & Poor´s 500 Index slid 0.9 percent this week to 1,189.40 as 8 of 10 industry groups declined. The Dow lost 1 percent to 11,092, with 25 of its 30 companies falling. Both equity gauges are up more than 6.3 percent this year.
8. Madoff Investors Sued by Bankruptcy Trustee Over Alleged Fictitious Profit
Bernard Madoff´s investors, employees and family members including his wife were sued by a trustee seeking to recover as much as $69 million in fake profits they received before the con man´s firm collapsed. New York attorney Irving Picard, appointed trustee by a federal bankruptcy court, yesterday sued people who allegedly invested with Madoff and withdrew more money than they contributed. Picard, with the approval of the Manhattan judge overseeing the liquidation of New York-based Bernard L. Madoff Investment Securities LLC, has filed such "clawback suits" in an attempt to obtain as much as $17.5 billion for victims of the largest Ponzi scheme in U.S. history. Picard said in a statement late yesterday that those targeted in this latest round of lawsuits are family members and employees, or their relatives. In some of the complaints filed yesterday in U.S. Bankruptcy Court, he didn´t identify the defendants as having such connections to Madoff. "The transfers received by defendant constitute non- existent profits supposedly earned in the account, but, in reality, they were other people´s money," Picard said in a complaint seeking $2.8 million from David Washburn, a Madoff investor. Washburn didn´t return a phone call seeking comment.
9. Marks & Spencer Reliance Plans to Open 50 Indian Stores in Next Five Years
Marks & Spencer Reliance India Pvt., the joint venture between Marks & Spencer Group Plc and Reliance Industries Ltd., plans to open a further 50 stores in India as rising salaries and growing consumer demand make it a priority market for the U.K. retailer. "The last year´s been very successful for us and we´re very pleased with how things are going," Martin Jones, chief executive officer of the local unit, said in an interview in New Delhi today. "We´ve got quite a lot of investment in the country, not just in terms of stores, but we´re now sourcing a lot of our products from India as well." He declined to specify the company´s investment in India. The company will increase its sourcing from South Asia to 70 percent over the next three years from the current 42 percent. The five-year expansion will bring the total number of stores to 70, Jones said. The market for apparel in India is expected to grow to $25 billion this year on increased disposable income and the rise of organized retail, according to a June report by McKinsey & Company.
10.Treasuries Head for Second Monthly Decline Amid Signs of Stronger Economy
Treasuries headed for a second monthly loss as stronger-than-forecast economic data and confidence the Federal Reserve´s $600 billion Treasury purchase program will fuel more growth, reduced demand for the debt. The yield on the two-year note rose for the fourth straight week, the longest period of increases since April 2, as a report on Nov. 24 showed initial jobless claims dropped to the lowest level since July 2008, reinforcing sentiment the employment market is healing. A report on Dec. 3 may show nonfarm payrolls rose by 145,000, according to a Bloomberg survey. "It´s more of a function of the negative sentiment in the Treasury market, given the broader macroeconomic strength," Ian Lyngen, a government bond strategist at CRT Capital Group LLC in Stamford, Connecticut, said Nov. 24. "The market has been under pressure." Ten-year note yields climbed 35 basis points on the month, or 0.35 percentage point, to 2.87 percent yesterday in New York, according to BGCantor Market Data. The price of the 2.625 percent security maturing in November 2020 was at 97 29/32. For the week, 10-year yields were little changed.
11.Otsuka Said to Tell Investors IPO Funds Will Be Used for Drug Acquisitions
Otsuka Holdings Inc., Japan´s largest closely held drugmaker, told investors it will use proceeds from an initial public offering to buy drug and health- food businesses, according to two people who were briefed on the company´s plans. The company is also considering raising its dividend payout after it is listed, Chief Executive Officer Tatsuo Higuchi told at least 200 investors and analysts in Tokyo yesterday, said the people, who attended the meeting. They declined to be identified because the information isn´t public. Yasushi Nakajima, an Otsuka spokesman, declined to comment before the listing. Otsuka aims to raise as much as 226.8 billion yen ($2.7 billion) selling 94.5 million shares including overallotment in what would be the world´s biggest health-care IPO since at least 2006. The Tokyo-based company´s best-selling drug, Abilify, used to treat mental illness, is set to lose patent protection in the U.S. in 2015, making acquisitions attractive to bolster growth. The company is Japan´s fifth-largest drugmaker, after Takeda Pharmaceutical Co., Astellas Pharma Inc., Daiichi Sankyo Co. and Eisai Co. Otsuka, which derives two-thirds of sales from pharmaceuticals, also makes Pocari Sweat drinks and Soyjoy nutrition bars.
-0- Nov/28/2010 00:35 GMT