Top Stories: Business and Finance
The following are the day's top business stories:
1. U.S. Payrolls Miss Forecast, Showing Labor Market Recovery May Take Years 2. Yellen Says Fed's Asset Purchases to Create 3 Million Private Jobs by 2012 3. U.S. Stocks Advance for Sixth Straight Week as Economic Data Beat Forecast 4. Liberty Media's Starz `In No Rush' to Renew Netflix Deal for Movies Online 5. Renault Electric Car Leaks Said to Pose Risk to Nissan, LG Chem Technology 6. IGate-Led Group Said to Near Takeover of India's Patni Computer Systems 7. Bank of England to Keep Stimulus as Inflation Prompts Rate Forecast Change 8. Florida, Arizona Banks Seized by Regulators in First U.S. Failures of 2011 9. Carlos Slim's Minera Frisco Jumps 34% in Two Days of Trading After Spinoff 10.Asian Stocks Rise a Fourth Week as Dollar, U.S. Reports Boost Exporters 11.Ride-Pimping Entrepreneur Seeks First Billion by 30 With Asian Streetwear 12.Most Read on Bloomberg: Treasuries Drop; Goldman's Facebook Holding, Snow
1. U.S. Payrolls Miss Forecast, Showing Labor Market Recovery May Take Years
Employers in the U.S. added fewer jobs than forecast in December, confirming Federal Reserve Chairman Ben S. Bernanke´s view that it could take "four to five more years" for the labor market to completely mend. Payrolls increased 103,000, less than the median projection of 150,000 in a Bloomberg News survey, Labor Department figures showed yesterday in Washington. The jobless rate fell to 9.4 percent, partly reflecting a shrinking workforce as discouraged Americans stopped looking for work. Faster job growth is needed to keep consumers spending and ensure a self-sustaining recovery in the world´s largest economy. Bernanke, in Senate testimony after the report, said it may take five years for the labor market to "normalize fully," indicating the Fed won´t depart from its strategy of pumping $600 billion into the financial system. "We are seeing a moderate labor market improvement; it´s not especially rapid," said Andrew Tilton, an economist at Goldman Sachs Group Inc. in New York, which forecast a 100,000 increase in payrolls. "As GDP growth accelerates in 2011, we are likely to see the labor market pick up steam as well," he said, although "it will be a very long time before the Fed changes course."
2. Yellen Says Fed's Asset Purchases to Create 3 Million Private Jobs by 2012
The Federal Reserve´s two rounds of asset purchases totaling $2.3 trillion will have helped boost private payrolls by about 3 million jobs through 2012, said Fed Vice Chairman Janet Yellen. Policy makers´ November decision to start a second round of purchases of $600 billion in Treasuries "is intended to support economic recovery from an exceptionally deep recession," the 64-year-old central banker said in a speech today in Denver. "I believe it will be effective in fostering maximum employment and price stability." Yellen gave the most detailed accounting yet of the benefits the central bank sees from its stimulus, adding her voice to a defense of the policy by Chairman Ben S. Bernanke and other officials. Republican lawmakers and officials in China, Germany and Brazil have criticized the purchases, saying they threaten to weaken the dollar and stoke asset-price bubbles. Yellen, appearing at the Allied Social Science Associations annual meeting, dismissed concerns that the purchases will ignite inflation, saying weak labor demand will be helpful in "mitigating the risk" and the Fed can "tighten policy when needed" by increasing the interest rate it pays on excess bank reserves.
3. U.S. Stocks Advance for Sixth Straight Week as Economic Data Beat Forecast
U.S. stocks advanced for the sixth straight week, the longest streak since April, as stronger-than- estimated employment and service sector data lifted confidence in the world´s largest economy. The Standard & Poor´s 500 Index fell yesterday after a Labor Department report showed the nation added fewer jobs than forecast and two banks lost a foreclosure case. Bank of America Corp. and Hewlett-Packard Co. led gains in the Dow Jones Industrial Average, as the lender climbed 6.8 percent after settling loan disputes. Alcoa Inc. rallied 6.7 percent after Deutsche Bank AG raised the stock to a "buy" and Jim Cramer named it 2011´s "top stock." The S&P 500 climbed 1.1 percent to 1,271.50 in the five days ended Jan. 7, the biggest weekly gain in four weeks. The benchmark gauge for U.S. stocks jumped on Jan. 5 to 1,276.56, its highest close since Sept. 2, 2008. The Dow added 97.25 points, or 0.8 percent, to 11,674.76. "By and large, the economic data continues to improve," said Mark Dow, who helps manage $3.5 billion at Pharo Management LLC in New York. "Risky assets had a really nice run since September onward, and a lot of people were worried about a choppy start to the year. With everyone concerned about a correction, it makes it harder to get that correction, so we´re seeing this grind higher."
4. Liberty Media's Starz `In No Rush' to Renew Netflix Deal for Movies Online
Liberty Media Corp.´s Starz premium cable channel is "in no rush" to renew an agreement supplying Netflix Inc. with movies to stream over the Internet, Starz Chief Executive Officer Chris Albrecht said. "This is a big decision and we want to get it right," Albrecht said yesterday in an interview in Pasadena, California, where television critics are meeting. "This is a deal that has a lot of ramifications in the media industry." Netflix is shifting its movie-rental business online as it seeks to lower the cost of mailing DVDs. Its deal with Starz, which expires this year, provides Web rights to films from Hollywood studios including Walt Disney Co. and Sony Corp. Renewing it will depend on formal discussions with Netflix that haven´t yet started, Albrecht said. "Netflix has been a great partner for us and if the deal makes sense they may continue to be," Albrecht said. "We don´t need this deal for our profitability."
5. Renault Electric Car Leaks Said to Pose Risk to Nissan, LG Chem Technology
Suspected leaks of Renault SA electric-car secrets may have compromised Japanese affiliate Nissan Motor Co.´s battery blueprints, as well as designs by LG Chem Ltd. and Better Place, two people with knowledge of the matter said. Three executives accused by the French carmaker of knowingly passing on strategic data had access to designs for Nissan and LG power packs and battery-management systems supplied by California-based Better Place, the people said. They asked not to be identified because the investigation is ongoing. Renault has fallen victim to an "organized, international ring," and while the carmaker believes data on vehicle architecture and costs may have been passed to foreign competitors, battery technologies appear not to have been leaked, Chief Operating Officer Patrick Pelata told Le Monde in an interview. Pelata discussed the matter at length with his Nissan counterpart Toshiyuki Shiga and "reassured him about the technology we share," he was quoted as saying. "We continue to be updated by Renault on their internal processes and will handle accordingly if there is any impact to Nissan," Nissan spokesman Simon Sproule said today in an e- mailed statement.
6. IGate-Led Group Said to Near Takeover of India's Patni Computer Systems
IGate Corp. and Apax Partners LLP are close to buying a controlling stake in Patni Computer Systems Ltd., in the second-biggest takeover of an Indian technology company, two people with direct knowledge of the matter said. The founding Patni brothers and private-equity firm General Atlantic LLC are set to sell their holdings at about 503.5 rupees a share, valuing the acquisition at about 42 billion rupees ($925 million), one of the people said, declining to be identified because the talks are private. The deal may be announced as early as Jan. 10, the people said. The acquisition will enable Fremont, California-based IGate, which vied with Carlyle Group for control of Patni, to add clients and expand in India after dropping out of the race for Satyam Computer Services Ltd. in 2009. The sale marks the exit of Chairman Narendra Patni and his family from a company that has lagged behind rivals including Tata Consultancy Services Ltd. IGate, owned by former Infosys Technologies Ltd. executive Phaneesh Murthy, will borrow about $500 million to fund the acquisition, one of the people said. London-based Apax will invest as much as $500 million in convertible securities sold by iGate, the person said.
7. Bank of England to Keep Stimulus as Inflation Prompts Rate Forecast Change
U.K. economists predict the Bank of England will keep its bond program and key interest rate on hold next week after above-target inflation prompted some analysts to bring forward forecasts for increases in borrowing costs. Policy makers will leave the size of the bank´s bond holdings unchanged at 200 billion pounds ($311 billion) on Jan. 13, according to all 39 economists in a Bloomberg News survey. They will also keep the rate at a record low of 0.5 percent, all 61 economists in a separate survey said. Citigroup Inc., Societe Generale SA and BNP Paribas SA said this week the central bank may raise interest rates faster than previously anticipated to tame inflation. Nevertheless, the pace of the increases may be tempered as the government implements the biggest budget squeeze since World War II to reduce the deficit. "Growth will be fairly disappointing and it´s going to be aggravated by these interest-rate hikes, but enough´s enough on the inflation front," Alan Clarke, an economist at BNP Paribas in London, said in a telephone interview. "The focus needs to be much more heavily on inflation given the constant bad news" on consumer prices.
8. Florida, Arizona Banks Seized by Regulators in First U.S. Failures of 2011
U.S. banking regulators shuttered two lenders, one each in Florida and Arizona, as the banking crisis enters its fourth year. First Southern Bancorp purchased First Commercial Bank of Florida while St. Louis-based Enterprise Bank & Trust bought Legacy Bank of Scottsdale, Arizona, the Federal Deposit Insurance Corp. said yesterday in statements on its website. The closures cost the FDIC´s deposit-insurance fund $105.9 million. "Customers today want to do business with a strong, well- capitalized bank that puts them first and understands their communities," First Southern Chief Executive Officer J. Herbert Boydstun said in a statement. "We are that kind of institution. First Southern Bank has money to lend, and we invite the community to call on us." More than 320 banks have failed since the start of 2008 as the financial crisis drove down home and commercial property values and pushed the unemployment rate above 10 percent. Regulators closed 157 lenders last year and 140 in 2009.
9. Carlos Slim's Minera Frisco Jumps 34% in Two Days of Trading After Spinoff
Billionaire Carlos Slim´s gold and silver producer Minera Frisco SAB led gains today on the benchmark IPC index, extending its advance after being spun off from holding company Grupo Carso SAB yesterday. Frisco soared 5.8 percent to 40.27 pesos at 4 p.m. New York time. The shares have surged 34 percent since they started trading yesterday, based on a pre-spinoff projected value of 33.14 pesos provided by the Mexican stock exchange. Frisco will benefit from "bold expansion plans" and a "strong financial position," Banco Santander SA said in a research note late yesterday. Grupo Carso investors got one share of Frisco and one share of real-estate unit Inmuebles Carso SAB for each share of the original holding company as part of the spinoff. Grupo Carso jumped 3.7 percent to 35.41 pesos. Inmuebles Carso retreated for the second day, dropping 1.5 percent to 11.10 pesos. The benchmark gauge added less than 0.1 percent to 38,600.86
10.Asian Stocks Rise a Fourth Week as Dollar, U.S. Reports Boost Exporters
Asian stocks rose for a fourth straight week as exporters gained on a rising dollar and U.S. economic reports that boosted confidence in the world´s largest economy. Toyota Motor Corp., an automaker that gets more than a quarter of its revenue from North America, gained 7.3 percent in Tokyo. Nissan Motor Co., Japan´s third-biggest carmaker by sales, soared 11 percent, while Hynix Semiconductor Inc., the world´s second-largest computer-memory chipmaker, jumped 8.8 percent in Seoul. Hyundai Motor Co., South Korea´s No. 1 vehicle maker, surged 14 percent. "There are mounting expectations about an economic recovery in the U.S.," said Naoki Fujiwara, who helps oversee $6 billion in Tokyo at Shinkin Asset Management Co. The MSCI Asia Pacific Index rose 0.1 percent this week. The gauge surged to its highest level in 2 1/2 years on Jan. 4 as data on U.S. manufacturing boosted optimism that a recovery in the world´s largest economy is strengthening.
11.Ride-Pimping Entrepreneur Seeks First Billion by 30 With Asian Streetwear
Wearing red Hermes sneakers, a gray smoking jacket-cardigan hybrid of his own design, and five pounds of pure gold draped around his neck, Jonathan Koon walks around his Midtown Manhattan showroom inspecting his new line of high-end denim. Almost a dozen pairs of hand-washed, distressed and abraded jeans from his spring 2011 collection are laid out on a coffee table. Koon picks up one pair and turns a pocket inside out to reveal his signature sartorial touch -- an ancient Chinese poem, "Bringing in the Wine," by the scholar Li Bai, inscribed in the fabric. "It basically says, `If there´s a chance to be happy, or a chance to drink, drink and be happy to your heart´s desire,´" Koon translates. It also describes the philosophy of Koon, 27, who made a fortune with auto accessories and is now turning to Asian streetwear couture, Bloomberg Businessweek reports in its Jan. 10 edition. With the Jan. 3 introduction of his Private Stock clothing line, Koon is hoping Americans will go as gaga for his Hong Kong-inspired jeans as they once did for Italy´s Diesel SpA brand.
-0- Jan/09/2011 00:35 GMT
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