The following are the day's top business stories:
1. U.S. Employers Add Fewer Jobs Than Forecast, Bolstering Fed Stimulus Plans 2. Stocks in U.S., Commodities Gain as Dollar Weakens After Employment Data 3. Bernanke Won't Rule Out Further Asset Purchases, CBS's `60 Minutes' Says 4. UBS Says Naratil to Replace Cryan as Finance Chief, Ermotti to Run Europe 5. Kinnucan Gets Subpoena in Insider Probe After Refusing to Wiretap Clients 6. Massey's Blankenship to Retire Dec. 30, Be Replaced by President Phillips 7. Blackstone's Schwarzman Said to Relocate Residence Temporarily to Europe 8. JPMorgan's One Equity Partners Is Said to Plan Sale of Columbian Chemicals 9. Build America Bond Program Extension Added to Senate Bill on Bush Tax Cuts 10.Obama Health Plan May Entice Canadian Doctors to Move South: Chart of Day 11.Cathay Chief Tyler Bequeaths Deeper China Ties, Stock Gain in Move to IATA 12.Tweeting Restrictions Risk Leaving Brokers With Not Much to Say to Clients
1. U.S. Employers Add Fewer Jobs Than Forecast, Bolstering Fed Stimulus Plans
Employers added fewer jobs than forecast in November and the unemployment rate rose to 9.8 percent, pointing to economic weakness that´s likely to keep the Federal Reserve pumping money into the financial system. Payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, Labor Department figures showed today in Washington. The jobless rate rose to a seven-month high, while hours worked and earnings stagnated. Two-year Treasury securities climbed and the dollar weakened as the data contradicted recent reports showing manufacturing growth and stronger holiday sales. The unexpected gain in unemployment is likely to intensify political debate over extending Bush-era tax cuts, as well as the Fed´s $600 billion program of asset purchases intended to spur growth. "We haven´t gotten the pace of job growth to an acceptable level," Bruce Kasman, chief economist at JPMorgan Chase & Co. in New York, said in an interview. "This is the kind of report that validates the Fed doing what they are doing."
2. Stocks in U.S., Commodities Gain as Dollar Weakens After Employment Data
U.S. stocks rose and commodities extended their biggest weekly rally in more than a year as a slide in the dollar boosted prices of oil and metals, helping equities overcome an early drop that followed an unexpected rise in the jobless rate. The Standard & Poor´s 500 Index climbed 0.3 percent to 1,224.71 at 4 p.m. in New York, adding to gains in the last half hour after CBS reported that Federal Reserve Chairman Ben S. Bernanke hasn´t ruled out extending the central bank´s asset- purchase program beyond $600 billion. The Dollar Index lost 1.5 percent for its biggest drop since July. Oil rallied to a 25- month high near $89 a barrel and the S&P/GSCI commodity price index climbed to the highest level in more than two years. The Dow Jones Industrial Average and S&P 500 added to gains of more than 3.2 percent over the previous two days that came as optimism in the economy was boosted by home sales and retail purchases that topped projections and the Fed´s assessment that the recovery was gaining steam in most regions. Earlier declines today came after the Labor Department said U.S. payrolls increased by 39,000 last month, trailing the median economist projection in a Bloomberg survey for a gain of 150,000 jobs. "The fact that stocks rallied despite a bad jobs report is a good indication," said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. "People are starting to get focused on the other economic data points that show that the economy is going to surprise positively. It´s a reason to buy into the rally. It´s a bad place for anyone who´s betting against stocks."
3. Bernanke Won't Rule Out Further Asset Purchases, CBS's `60 Minutes' Says
Federal Reserve Chairman Ben S. Bernanke defended the Fed´s decision to purchase $600 billion in Treasury securities and didn´t rule out expanding the program, in an interview for CBS television´s "60 Minutes," the network said. "He explains why the Fed announced its intention to buy $600 billion in Treasury securities, defending against charges the move will lead to inflation and not ruling out the purchase of more," according to a press release today from CBS. The interview with CBS journalist Scott Pelley was filmed Nov. 30 in Columbus, Ohio and will air Dec. 5. At its Nov. 3 meeting in Washington, the Fed announced the program to purchase about $75 billion a month of Treasury securities through June. The Fed´s Open Market Committee said it would "regularly review the pace of its securities purchases and the overall size of the asset-purchase program."
4. UBS Says Naratil to Replace Cryan as Finance Chief, Ermotti to Run Europe
UBS AG, Switzerland´s largest bank, said Tom Naratil will replace John Cryan as chief financial officer, while Sergio Ermotti will join from UniCredit SpA to run Europe, the Middle East and Africa. Naratil, the CFO and chief risk officer of UBS´s wealth- management Americas unit, will replace Cryan, 49, on June 1, the Zurich-based bank said in an e-mailed statement today. Cryan, CFO since September 2008, is leaving to "pursue other interests outside of UBS," the company said. "John has made an outstanding contribution," Chief Executive Officer Oswald Gruebel, 67, said in the statement. "In the midst of the financial crisis in 2008 he accepted the role of group CFO and his knowledge and expertise were instrumental in the task of rebuilding UBS´s financial strength." UBS racked up more than $57 billion of writedowns and losses during the credit crunch, second among European banks after Royal Bank of Scotland Group Plc, and needed a government rescue. The bank returned to profit in the final quarter of last year, and recorded the first net client inflows at its wealth- management units in more than two years last quarter.
5. Kinnucan Gets Subpoena in Insider Probe After Refusing to Wiretap Clients
John Kinnucan, the analyst who refused to cooperate with an FBI request to wiretap clients, said he was subpoenaed as part of a federal probe into possible insider trading. The information request was delivered today and seeks e- mails, financial and trading records, client contracts and other documents for the past two years, Kinnucan said in a telephone interview. Kinnucan said he´s cooperating and has not been accused of any wrongdoing. "I´m happy to do it because I think it´s going to demonstrate my innocence," he said in the interview. News of the subpoena was reported earlier today by Business Insider. Kinnucan, whose Portland, Oregon-based Broadband Research LLC provides research on technology companies to hedge funds and mutual funds, told clients in October that he was visited by federal officials, who asked him to secretly tape a conversation with a fund manager they were targeting. Kinnucan, who wouldn´t name the manager, refused to tape the conversation.
6. Massey's Blankenship to Retire Dec. 30, Be Replaced by President Phillips
Massey Energy Co. Chief Executive Officer Don Blankenship will retire as of Dec. 31, the company said in an e-mailed statement. Massey President Baxter F. Phillips Jr. will succeed him as CEO, the company said. Blankenship, 60, has worked at Massey for almost three decades and served as chairman and chief executive since Nov. 30, 2000, the Richmond, Virginia-based company said. Admiral Bobby Inman, 79, lead independent director on the Massey board, will become non-executive chairman. "After almost three decades at Massey it is time for me to move on," Blankenship said in a statement. "Baxter and I have worked together for 28 years and he will provide the company great executive leadership." Last month, Massey, owner of the Upper Big Branch mine in West Virginia where 29 people died in April, said its board of directors ordered a review of strategic alternatives "to enhance shareholder value," a process that may lead to sale of the company.
7. Blackstone's Schwarzman Said to Relocate Residence Temporarily to Europe
Blackstone Group LP Chairman Stephen Schwarzman will relocate temporarily to Europe as the world´s largest private-equity company increasingly pursues deals outside the U.S., according to a person familiar with his plans. Schwarzman, 63, will work in Europe initially for about four to six months, while continuing to spend about the same amount of time he already does in the New York office, said the person, who declined to be identified because the plans are private. Blackstone, based in New York, has offices in Paris, London, and Dusseldorf, Germany, according to its website. Blackstone, created in 1985, has expanded businesses such as real estate, funds of hedge funds and corporate advisory while looking further afield for transactions. The firm´s European holdings include Madame Tussauds operator Merlin Entertainments Group, Europe´s largest theme park company. Peter Rose, a spokesman for the firm, declined to comment on Schwarzman´s plan, which was reported earlier today by Reuters.
8. JPMorgan's One Equity Partners Is Said to Plan Sale of Columbian Chemicals
One Equity Partners LLC, the buyout arm of JPMorgan Chase & Co., plans to sell U.S. carbon black manufacturer Columbian Chemicals Co., said two people with direct knowledge of the matter. India´s Aditya Birla Group is among potential bidders for the world´s third-largest maker of the material used in tires and synthetic rubber, said one of the people, declining to be identified because the matter is confidential. A transaction may be valued at more than $500 million, the person said. Columbian Chemicals, based in Marietta, Georgia, may compete for bidders with the carbon black unit of Germany´s Evonik Industries AG. Billionaire Kumar Mangalam Birla´s company and India´s Phillips Carbon Black Ltd. are considering making offers for Evonik, the world´s No. 2 maker of carbon black, in a deal likely to be valued at more than $700 million, two people familiar with the matter said earlier this week. Pragnya Ram, a Birla Group spokeswoman in Mumbai, declined to comment on "market speculation." JPMorgan spokesman Justin Perras also declined to comment.
9. Build America Bond Program Extension Added to Senate Bill on Bush Tax Cuts
A one-year extension of the U.S. Build America Bond program, the fastest-growing segment of the $2.8 trillion municipal-debt market, was included in a Senate bill to maintain expiring tax cuts for middle-income Americans. In the latest move to keep the subsidy alive, U.S. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, included it with extensions of dozens of other tax breaks set to end. A continuation of the bond program hadn´t been contained in previous bills to prolong the income-tax cuts, the dominant issue facing Congress before the current session concludes. The subsidy, which expires Dec. 31, was created by President Barack Obama´s 2009 economic-stimulus plan. More than $173.5 billion of the taxable securities have been sold, according to data compiled by Bloomberg. The U.S. pays 35 percent of the interest costs on the debt. The Senate bill would cut that rate to 32 percent. Republicans may oppose the measure because it doesn´t extend breaks for the wealthiest taxpayers. "It still all hinges on whether the president and Republicans in the Senate reach some kind of deal," said Jim Currie, the director of federal relations for the Lexington, Kentucky-based National Association of State Treasurers.
10.Obama Health Plan May Entice Canadian Doctors to Move South: Chart of Day
Canadian doctors may be enticed to return to the U.S. after President Barack Obama´s health-care legislation passed earlier this year, expanding care. The CHART OF THE DAY shows how more physicians have moved to Canada from the U.S. than left over the past six years, capped by the biggest net change in 16 years in 2009, according to data from the Canadian Institute for Health Information. Now, with stretched resources at home and Obama´s health- care law giving 32 million people access to Medicare -- just shy of Canada´s population of 34 million -- the risk is that doctors again decide to leave, Jeff Turnbull, the president of the Canadian Medial Association and chief of staff of The Ottawa Hospital, said in an interview. "I´m afraid that as you start to provide increasing services to those Americans that need care, once again America is going to start to pull Canadian doctors back," Turnbull said. "The balance is going to shift. You´ll see doctors move."
11.Cathay Chief Tyler Bequeaths Deeper China Ties, Stock Gain in Move to IATA
Cathay Pacific Airways Ltd. Chief Executive Officer Tony Tyler will leave after three years in the job having navigated the slump, extended the carrier´s reach in China and outshone Singapore Airlines Ltd. in the stock market. Tyler, 55, will depart the world´s third-biggest airline by market value to become head of the International Air Transport Association trade body, according to a statement yesterday. He´ll be replaced by Chief Operating Officer John Slosar. During his time as CEO, Tyler has spent billions of dollars on planes from Airbus SAS and Boeing Co. while returning Cathay to profit following the first loss in a decade as deeper ties to mainland China helped it weather the recession. That has helped shares of the carrier jump 21 percent since he became chief on July 1, 2007, compared with a 10 percent drop at Singapore Air. "Beyond all the other challenges involved in running an airline, Tyler has had to manage the relationship with China," said Tim Coombs, managing director at Aviation Economics in London. "Cathay was an offshoot of a big British trading company with a massive history, and he had to manage it into something quite different culturally and from a business point of view."
12.Tweeting Restrictions Risk Leaving Brokers With Not Much to Say to Clients
Social media sites such as LinkedIn and Twitter are redefining the way businesses reach their customers. Securities firms are largely absent from the revolution. Regulators and company rules at brokerages have slowed the adoption of social media by the financial services industry, said Margaret Paradis, a New York-based partner at law firm Baker & McKenzie, who advises brokers and fund managers. Firms banning employees from using sites such as Facebook, LinkedIn and Twitter are limiting access to cheap and easy-to-use competitive tools, she said. "Networks and referrals are how this business is done, said Stacey Haefele, president and chief executive officer of New York-based wealth marketing firm HNW Inc. ``By ignoring social media, you risk not being out there where your clients are.´´ About 84 percent of U.S. brokerage firm employees polled by HNW said they don´t use social media because company and industry regulations make it too burdensome, she said. The U.S. Securities and Exchange Commission, which regulates the securities industry, says all broker stock recommendations must be ``suitable" for individual clients by measuring their risk tolerance, security holdings, income, net worth and investment objectives, according to the agency´s website. Sending a stock pick on Twitter or posting it on Facebook generally breaks this rule, said David Sobel, executive vice president and compliance officer at New York- based Abel/Noser Corp., which helps clients lower trading costs and does allow its employees to use LinkedIn for networking.
-0- Dec/04/2010 00:35 GMT