Business News Headlines

Messy Facebook debut marks weak day on Wall Street

NEW YORK (Reuters) - Stocks fell on Friday after a sloppy debut by Facebook Inc spoiled hopes that a spectacular open for the most-anticipated stock sale in years would brighten the mood in what has been a gloomy month for equity markets. Shares of Facebook, the social networking giant, were volatile in the busiest day ever for a trading debut. After early gains of more than 10 percent, Facebook shares fell back to the $38 issue price, ending up just 0.6 percent at $38.23. It was the Nasdaq's most actively traded stock, with more than 566 million shares traded. ...

Historic Facebook debut falls short of expectations

SAN FRANCISCO (Reuters) - The historic initial public offering of Facebook Inc did not go as planned on Friday, as the social networking company's sky-high valuation combined with trading glitches left the stock languishing near its offering price at the market close. Facebook shares, which opened up 11 percent, closed at $38.23 after a nail-biting last half hour of trading when the shares dipped to their $38 IPO price. Most investors had predicted a first-day pop. More than 576 million shares changed hands, setting a trading volume record for U.S. market debuts. ...

Analysis: JPMorgan to be haunted by change in risk model

(Reuters) - JPMorgan Chase & Co's decision to radically change the way risk was measured in its Chief Investment Office is likely to dog the bank in the developing crisis over the big trading losses it has suffered. The move, which allowed the bank to disguise the level of risk that the CIO was taking in its trading, could become a major focal point of investigations by the U.S. Securities and Exchange Commission and the FBI, former regulators said. It also will likely become part of investor cases in lawsuits against the bank and its executives. ...

Under pressure, Chesapeake cuts director pay

(Reuters) - Chesapeake Energy Corp , under growing pressure from shareholders to improve corporate governance, reduced the compensation for its outside directors by 20 percent and eliminated their use of its aircraft for personal travel, the company said on Friday. Chesapeake and its board have come under fire in recent weeks after Reuters reported, among other things, that Chesapeake CEO Aubrey McClendon had taken out more than $1 billion in previously undisclosed loans using his interest in company wells. ...

Galleon prosecutor aims to cement legacy in Gupta trial

NEW YORK (Reuters) - It was during a quiet afternoon in the sixth week of the insider-trading trial of hedge fund billionaire Raj Rajaratnam that prosecutor Reed Brodsky sprang one of those rare surprises usually seen only in the movie version of a courtroom drama. Brodsky, a federal prosecutor since 2004, seemed to catch defense lawyers and witness Richard Schutte off guard with a blistering cross-examination in the 2011 trial. The former Rajaratnam right-hand man was forced to admit that the biggest investor in a new hedge fund he launched was none other than the Galleon founder. ...

Banks' rising bad loans add to Spanish troubles

MADRID (Reuters) - Spanish banks' bad loans rose in March to their highest in 18 years, underscoring the problems facing the government as it drafts in independent auditors in an attempt to reassure investors it can clean up the sector. The Bank of Spain said bad loans rose to 8.37 percent of banks' outstanding loans, the highest since August 1994 and up from 8.3 percent in February, which was also revised higher. The data was released before Spain names auditors on Monday to assess how bad the losses are likely to get, and how much cash banks will need to rebuild their balance sheets. ...

GM passes on running TV ads during 2013 Super Bowl

DETROIT (Reuters) - General Motors Co will not advertise in next year's Super Bowl because it is too expensive, the top marketing executive for the U.S. automaker said three days after the company announced it was dropping paid ads on Facebook Inc. The 2013 Super Bowl will be broadcast by CBS Corp, which is selling 30-second ads for as much as $4 million. Spots on NBC's broadcast of this year's National Football League championship game, the most heavily watched annual event on U.S. television, cost about $3.5 million per 30-second spot. NBC is majority-owned by Comcast Corp. ...

Europe thinks the unthinkable on Greece

BRUSSELS/LONDON (Reuters) - European officials are working on contingency plans in case Greece bombs out of the euro zone, the EU's trade commissioner said on Friday, as European share prices tumbled and Germany warned of continuing financial turmoil. German Finance Minister Wolfgang Schaeuble, one of Greece's harsher critics, said market unrest fuelled by the euro zone debt crisis could last another year or two. "Regarding the crisis of confidence in the euro ... in 12 to 24 months we will see a calming of the financial markets," he said. ...

UAW president sets goal to stem money losses by 2014

NEW YORK (Reuters) - The United Auto Workers aims to break even by mid-2014, as the American union looks to bolster its political and bargaining clout. For the past five years, the UAW has relied heavily on selling its war chest of stocks, bonds and property to bridge the gap between its annual funding and costs. The union believes this approach is untenable in the long run and its goal is to "have it turned around" in two years by adding members and managing costs, UAW President Bob King said in an interview on Friday. ...
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MF Global to get $168 million back from JPMorgan

NEW YORK (Reuters) - JPMorgan Chase & Co , under scrutiny for its ties to collapsed commodities firm MF Global, will return $168 million to the estate of MF's broker-dealer, the estate's trustee announced on Friday. James Giddens, tasked with winding down the estate and recovering as much money as possible for its trader clients who lost money when the firm went bust, said JPMorgan will return "excess collateral" that was held in its estate when the bankruptcy began. ...

Spain's Repsol cancels LNG cargoes to Argentina

BUENOS AIRES (Reuters) - Spain's Repsol has canceled its contract to supply Argentina with liquefied natural gas (LNG), just weeks after the country seized control of the energy company's majority stake in YPF , a document obtained by Reuters on Friday showed. Argentina relies on LNG imports to meet between 20 percent and 30 percent of domestic natural gas consumption. Repsol was to supply 10 cargoes to Argentina this year out of 80 from all suppliers to help meet peak demand from June to September. ...

American Eagle exits children's shops, CFO resigns

(Reuters) - Teen apparel retailer American Eagle Outfitters Inc said it is getting out of the children's clothing business and that Chief Financial Officer Joan Hilson will step down at the end of July. The Pittsburgh-based company is exploring options such as a full or partial sale of 77kids, which includes 22 stores and an online business, it said in a statement on Friday. American Eagle introduced the brand in October of 2008 as an online-only brand. ...

Analysis: More U.S. shareholders call for independent chairmen

Boston (Reuters) - Welcome to the club, Jamie Dimon. Embarrassed by a surprise $2 billion trading loss last week, the chairman and chief executive of JPMorgan Chase & Co faced heightened criticism at the bank's annual meeting on Tuesday. That included 40 percent backing from shareholders for a resolution to strip Dimon of his chairmanship title, up from 34 percent in 2010. With the spring U.S. ...

Japan looks to central bank to pay for Iran oil: Nikkei

(Reuters) - The Japanese government and private sector bank officials are considering asking the Bank of Japan (BOJ) for help in settling Iranian oil transactions, the Nikkei reported. Bank of Tokyo-Mitsubishi UFJ, which handles most of Japan's payments for oil imports from Iran, on Thursday said it had frozen transactions with Iranian banks after being ordered to do so by the New York District Court earlier this month. The move stems from a U.S. court decision in 2007 that ordered Iran to pay more than $2.6 billion to survivors and victims' family members of the 1983 bombing of a U.S. ...

China solar stocks slump again after U.S. trade move

(Reuters) - Solar stocks slumped to fresh lows on Friday as investors continued to punish Chinese solar companies a day after the United States said it would impose new duties on imports from the world's leading solar manufacturer. Suntech Power Holdings was down 4.2 percent, Trina Solar Ltd slid 5 percent and Yingli Green Energy dropped 7.5 percent, extending declines made on Thursday when the U.S. Commerce Department ruled China-based solar companies had violated trade rules and 'dumped' their products in the U.S. at below-market prices. ...

Vale confident will win Brazil double tax case-CEO

RIO DE JANEIRO (Reuters) - Brazilian iron ore miner Vale is confident it will win a dispute over taxes the government claims the company owes on earnings abroad, CEO Murilo Ferreira said on Friday. The government has ordered Vale to pay 30.5 billion reais ($15.19 billion) in tax on profits from its foreign subsidiaries. The company said it already paid the taxes to foreign governments and that Brazil's claim is a form of illegal double taxation. Vale, along with other companies and industry associations, is disputing the back taxes in Brazil's highest court. ...

Kraft cuts Maxwell House coffee prices in U.S.

(Reuters) - Kraft Foods said on Friday it lowered prices on many of its U.S. coffees, including its flagship brand Maxwell House, citing lower green coffee costs since prices peaked last year, making it the second major U.S. roaster to lower its coffee prices this week. The move comes three days after J.M. Smucker Co. cut the cost of well-known brands Folgers and Dunkin' Donuts by an average of 6 percent. It is the second cut to coffee prices since August 2011 for both companies. ...

Mexico's Slim eyeing Telekom Austria stake: report

VIENNA (Reuters) - Mexican billionaire Carlos Slim is eyeing a stake in Telekom Austria and is believed to have held initial talks with its two biggest investor groups, Austrian magazine Format reported, without citing sources. It said Slim had been in touch with Ronny Pecik - who with partner Naguib Sawiris has built a 20 percent stake in Telekom Austria - and Austrian state holding company OeIAG, Telekom Austria's biggest shareholder with a 28.4 percent stake. ...

EBRD-East Europe wary of fresh euro bank crunch

LONDON (Reuters) - A new banking crunch in the euro zone risks another sharp retreat by western parent banks from vulnerable economies in central and eastern Europe, a process that must be slowed to preserve growth, officials from the region said on Friday. Countries backing Europe's development bank for the former communist bloc elected a new president - for the first time from non-euro member Britain - just as fears grow that a Greek exit from the currency could hit emerging Europe's lenders. ...

Wall Street banks facing second-quarter slowdown: analyst

(Reuters) - Wall Street banks will report sharp declines in trading and investment banking revenues in the second quarter because of weaker client activity, JPMorgan analyst Kian Abouhossein said in a report on Friday. Fixed income, currency and commodities trading revenue is likely to be particularly challenged for a group of banks including Goldman Sachs Group Inc and Morgan Stanley , dropping 32 percent from the previous quarter, Abouhossein predicted. ...
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Exclusive: Repsol comes up dry in Cuba offshore well

HAVANA (Reuters) - Spanish oil giant Repsol said Friday that the first of three planned wells in Cuban waters was unsuccessful, a blow to Cuba's hopes for energy independence. "I can confirm that the Repsol well in Cuba has been reported to be unsuccessful and that we are proceeding to plug and abandon the well," a Repsol spokesman told Reuters. Repsol operated the well in a consortium with Norway's Statoil and a unit of India's ONGC , drilling 4,500 meters into the sea bed of the Gulf of Mexico. ...
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Fiat office workers to be laid off for six days in June, July

MILAN (Reuters) - Italian carmaker Fiat said 5,000 office workers at its Mirafiori factory will be laid off for three days in June and three days in July. Car sales in Italy fell 20 percent in the first three months of the year, and are in their fifth year of decline. "When we sell less, we produce less, and therefore our office staff also works less as a consequence," a spokesman said on Friday. Manufacturing workers at Mirafiori in Turin, where Fiat has its executive headquarters, have already been laid off temporarily. ...

China cries foul after U.S. sets tariffs on solar imports

(Reuters) - The United States imposed punitive tariffs on solar panel imports from China, the latest in a series of trade disputes between the world's two biggest economies and sparking accusations by Beijing of protectionism. The new tariffs of around 30 percent, much bigger than had been expected, were set on Thursday by the U.S. Commerce Department after it ruled in favor of local firms which said Chinese exporters were dumping cut-price panels on their market. ...
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Investor group seeks JPMorgan governance changes

NEW YORK, May 18 (Thomson Reuters Accelus) - A labor-backed investor group critical of JPMorgan Chase & Co's corporate governance said the bank has failed to address concerns over its risk oversight and it will try to rally other shareholders for changes after a $2 billion trading loss. CtW Investment Group, which advises labor pension funds holding what it said are 6 million shares in JPMorgan, has advocated for risk governance changes there for more than a year. ...

BMW eyes new production sites abroad: source

MUNICH (Reuters) - Premium carmaker BMW is considering new production sites around the world, with one option being Mexico, a person familiar with the situation told Reuters on Friday. German daily Handelsblatt earlier cited company sources as saying BMW was examining whether to build plants in Mexico and eastern Europe. It said Slovakia's Kosice and Hungary's Miskolc were possible candidates. BMW declined to comment. Earlier this month, it denied reports it plans to build an assembly plant in Slovakia. ...

Italy to keep debt profile outside riskier area

MILAN (Reuters) - The average lifespan of Italian debt, which has fallen during the euro zone crisis as investors favor safer short-term issues, should still be close to the current level of 6.8 years at the end of 2012, a top Italian debt official said. As the average maturity of a country's debts falls, the amount of bonds it has to sell each year rises. This makes it more exposed to a worsening in market sentiment that could push borrowing costs higher, even to unaffordable levels. ...
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LVMH looks to burnish Vuitton mystique and buoy sales

PARIS (Reuters) - French luxury giant LVMH is struggling to retain its image as exclusive and high-end creators of $10,000 alligator handbags and goat-lined fur coats, while opening enough stores and reaching enough customers to keep profits high. Thus far LVMH has managed the balance well, but it is taking no chances, offering customers increasingly expensive and bespoke services in an effort to retain a high-end mystique around brands in danger of becoming ubiquitous. ...

Euro zone market turmoil to last 12-24 months: German finance minister

PARIS (Reuters) - Market turmoil over the euro zone crisis could last another 12 to 24 months, German Finance Minister Wolfgang Schaeuble said on Friday, saying it was up to the Greeks to decide if they wanted to stay in the single currency. Schaeuble said he was confident France's new Socialist government would ratify Europe fiscal pact because policymakers were working on a strategy to improve growth, as demanded by French President Francois Hollande. "Regarding the crisis of confidence in the euro ... ...

Analysis: JPMorgan CEO gets crisis marks but war isn't over

NEW YORK (Reuters) - Shooting from the hip may have got Jamie Dimon into deep trouble -- shooting straight may help to get him out of it. The JPMorgan Chase & Co CEO made the crisis over the bank's trading loss of at least $2 billion far worse because he had assured financial markets back in April that news reports about massive bets the bank's Chief Investment Office had taken were "a tempest in a teapot". It meant that when the bank disclosed the big and probably growing loss on May 10, it not only had to admit a sizable problem, but also that it had been misleading investors. ...

China second quarter GDP growth seen at 7.5 percent: government think-tank

BEIJING (Reuters) - China's annual economic growth could slow to 7.5 percent in the second quarter, largely due to curbs on the property sector and headwinds from external demand, the State Information Center, a government think-tank, said in a report published on Friday. If the GDP forecast is accurate, growth in the second three months of 2012 would be the slowest since the first quarter of 2009, when the global economy was in the grip of the worst financial crisis since the Great Depression. The forecast is in line with the government's official 2012 growth target of 7. ...

FACEBOOK IPO LIVE: The social network goes public

It's Facebook's big day.

Nasdaq glitch confuses investors of Facebook IPO

Some investors who thought they had bought Facebook shares at the opening of trading were left without knowing for hours whether they had received the shares.
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Questions and answers on blockbuster Facebook IPO

A company started in a Harvard dorm room in 2004 has just raised $16 billion and is valued at $104 billion. All that from an initial public offering of stock.

Business Highlights

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Intelsat files plans for public offering

Communications and satellite company Intelsat Global Holdings S.A has filed plans to go public and hopes to raise up to $1.75 billion in the initial public offering of its stock.
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Greek politics, Spain banks test eurozone survival

Chaos in Greek politics and Spanish banking combined this week to underscore just how fragile Europe's economy remains after an eviscerating austerity regime that has spawned unemployment, desperation and misery. And there is no respite in sight, as Germany's finance minister predicted Friday that the crisis could last up to another two years.

News Summary: Europe worries push stocks down

FUN WHILE IT LASTED: May 1, 2012, the Dow Jones industrial average hit its highest point in four years. It was ahead by 8.7 percent for the year that day. Now, it's up by 1.2 percent after Friday's decline.
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Facebook stock debut fails to sizzle

It was barely a "like" and definitely not a "love" from Facebook investors as the online social network's stock failed to live up to the hype in its trading debut Friday.

GM says Super Bowl ads too expensive and bows out

For General Motors, the price isn't right when it comes to an ad during next year's Super Bowl.
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How the major stock indexes fared on Friday

Stocks fell Friday as investors set aside any excitement over the Facebook initial public offering and focused on Europe's debt problems. As recently as May 1, the Dow was up 8.7 percent for the year. Now it's up only 1.2 percent. It has fallen 12 of the last 13 trading days.
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