Stock futures hold losses after data


NEW YORK |
Thu Jun 28, 2012 8:47am EDT

NEW YORK (Reuters) – Stock futures held their losses on Thursday after as weekly jobless claims data came in about as expected.

Futures had previously been down after a German finance ministry spokesman said an earlier report that Germany has changed its position on euro bonds was not true.

The number of Americans filing new claims for unemployment benefits fell last week, government data showed on Thursday, but remained too high to signal any major improvement in the labor market.

SP 500 futures fell 6.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 83 points and Nasdaq 100 futures fell 10 points.

(Reporting by Ryan Vlastelica; Editing by Dave Zimmerman)

U.S. first quarter final GDP growth unrevised at 1.9 percent


WASHINGTON |
Thu Jun 28, 2012 8:50am EDT

WASHINGTON (Reuters) – The U.S. economy slowed as expected in the first quarter, but a less robust pace of consumer spending and export growth than previously estimated could dampen the economic outlook for the current period.

Gross domestic product increased at a 1.9 percent annual rate, the Commerce Department said in its final reading on Thursday, unchanged from its estimate last month. That was in line with economists’ expectations.

However, when measured from the income side, the economy grew at a 3.1 percent pace in the first quarter, up from 2.6 percent in the previous quarter.

The tepid first-quarter pace of GDP growth was a step-down from the October-December period’s 3.0 percent rate.

It also reflected a slightly less sturdy accumulation of inventories by businesses and slower pace of investment in equipment and software than previously estimated.

Consumer spending, which accounts for about 70 percent of U.S. economic activity, increased at a 2.5 percent rate in first quarter, rather than the previously reported 2.7 percent pace.

There are signs that consumer spending slowed in the second quarter, with retail sales falling in April and May.

Business inventories increased $54.4 billion, instead of $57.7 billion, adding only 0.10 percentage point to GDP growth compared with 0.21 percentage point in the previous estimate.

Excluding inventories, the economy grew at a revised 1.8 percent rate in the first quarter, rather than 1.7 percent and up from 1.1 percent in the fourth quarter.

Exports grew at a 4.2 percent rate instead of 7.2 percent.

While the careful of management of inventories could be a boost to second-quarter growth, the mild downward revision to consumer spending underscores the loss of momentum in the economy that has been evident in weak hiring and slowing factory activity.

Second-quarter growth is forecast around 2 percent, but with global demand cooling amid Europe’s debt woes and an uncertain fiscal policy path at home forcing households to be cautious, even that estimate might be too optimistic.

Business spending on equipment and software was revised down to show a 3.5 percent growth rate instead of the previously reported 3.9 percent. Anecdotal evidence suggests the pace softened in the second quarter.

The drag from the revisions to consumer spending, equipment and software, exports and inventory accumulation was offset by upward revisions to investment in residential and nonresidential structures.

Import growth was lowered by 3.4 percentage points to a 2.7 percent rate. While that supported growth during the quarter, it was a sign of weakening domestic demand.

Government spending fell at a 4.0 percent rate, instead of the previously reported 3.9 percent.

The department also revised after-tax corporate profits to a 5.7 percent rate of decline instead of 4.1 percent.

That was still the biggest decline since the fourth quarter of 2008 and reflected the end of a special tax bonus that allowed U.S. companies to accelerate the depreciation of assets.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Malaysia’s Petronas to buy Canadian gas producer


TORONTO |
Thu Jun 28, 2012 8:20am EDT

TORONTO (Reuters) – Malaysia’s state oil association on Thursday concluded to buy Canada’s Progress Energy Resources Corp (PRQ.TO) for C$4.8 billion ($4.7 billion) to accelerate a pot of healthy gas for trade to Asian markets.

The understanding by Malaysia’s Petronas follows a arrangement of a corner try with Progress final year to rise a partial of Progress Energy Resources Corp’s Montney shale resources in a foothills of northeastern British Columbia. Progress owns shale fields in a provinces of British Columbia and Alberta.

Petronas PETR.UL pronounced a Canadian subsidiary, Petronas Carigali Canada Ltd, would compensate C$20.45 for any share of Calgary-based Progress. That represents a 77 percent reward to Progress Energy’s Wednesday close.

Including debt, a transaction is valued during about C$5.5 billion, a companies pronounced in a matter on Thursday.

“The due transaction will mix Petronas’ poignant tellurian imagination and care in building LNG infrastructure with Progress’ endless knowledge in radical apparatus growth to build a clever and growing, world-class appetite business formed in Canada,” Datuk Anuar Ahmad, conduct of a gas and energy business for Petronas, pronounced in a statement.

In April, Progress denied it was in talks with Petronas, after news emerged that it was deliberation a offer to buy a Canadian natural-gas producer.

Last year Petronas paid C$1.07 billion ($1.08 billion) for a half seductiveness in shale-gas fields owned by Progress, and a dual affianced to investigate a feasibility of exporting liquefied healthy gas to Asia.

Shares of Progress sealed during C$11.55 on Wednesday on a Toronto Stock Exchange, nearby a median of their trade operation over a past 52 weeks.

(Reporting By Euan Rocha in Toronto and Aftab Ahmed in Bangalore; Editing by Maju Samuel)

Glasenberg’s dealmaker reputation during forgiveness of Qatar


LONDON |
Thu Jun 28, 2012 8:26am EDT

LONDON (Reuters) – By rejecting Glencore’s (GLEN.L) desired merger of miner Xstrata (XTA.L), Qatar could also put paid to a repute of Ivan Glasenberg, arch executive of a line trader, as unqualified dealmaker.

Those who have worked with him on takeovers – and conflicting him fortifying a companies he targeted – contend Glasenberg’s self-belief is second to none. That, and awkward determination, means he routinely gets his way.

But this time he appears to have been wrong-footed, meditative a support of vital Xstrata shareholder Qatar Holdings was in a bag.

“Did Glencore misread a Qataris? Absolutely,” pronounced one landowner informed with a mining sector, though not concerned in a deal. “Qatar does not like a limelight, so they contingency feel flattering strongly to finish adult going public.”

Apparently undeterred by a rejection, Glasenberg showed small penchant for compromise, vouchsafing it be famous he would not overpay.

Glencore’s position had not changed, a chairman informed with a matter said, and a association would rather travel divided than offer more. Bankers pronounced such speak was a customary MA tactic and to be approaching of any association in such negotiations.

It is not usually Glasenberg’s lane record that is underneath a microscope following Qatar Holdings’ warn direct for improved terms for a takeover. The bankers advising him might also have been held napping.

The stakes are high for all involved, with banking teams operative on a understanding station to remove out on a compensate day value adult to $130 million if a $26 billion understanding collapses. Xstrata was due to compensate adult to $80 million to a financial advisers, while Glencore might have to bombard out adult to $50 million.

With price income in shelter after a 25 percent tumble in worldwide MA volumes in a initial half of a year, such compensate days are some-more critical than ever for bankers struggling to pierce in income for their increasingly cost-conscious employers.

The multiple of Glencore and Xstrata would arrange as a biggest-ever finished understanding in a zone dirty with a skeletons of unsuccessful deals. These embody a $144.5 billion antagonistic bid for Rio Tinto (RIO.L) by BHP Billiton in 2008, and BHP Billiton’s some-more new $39.7 billion offer for Canada’s Potash (POT.TO).

Glasenberg is not a usually executive to have been unprotected by a disaster to get “Glenstrata” sanctified by shareholders.

His conflicting series during Xstrata, CEO Mick Davis, was not listening to a mood song over executive compensate when he cumulative himself a $45 million three-year influence package to sign a miner’s understanding with Glencore. The mining organisation was forced to modify it to an all-share, performance-related package after an annoying shareholder outcry.

Qatar Holdings, that has remained wordless for months as it built adult a second-largest interest in miner Xstrata – about 11 percent – pushed a understanding to a margin on Tuesday, perfectionist improved terms before it would support a deal.

The resources account is partial of a new multiply of investors in a mining sector, focused on formulating long-term value and behaving on motivations that are infrequently during contingency with a some-more countless physique of investors looking during a shorter timeframe.

Despite a apparent blow to Glasenberg’s plans, sidestep account managers pronounced it was too shortly to contend he had been outwitted by a Qataris.

“Glasenberg is always a smartest male in a room and always one step forward of everyone. We don’t know what is going on behind sealed doors,” a sidestep account manager who owns Xstrata batch said.

“Hedge supports always consider they are smarter than a arch executive, though not when it comes to Ivan,” he added.

A second sidestep account manager pronounced Glasenberg would do whatever was in a best interests of Glencore, either that was to branch adult some-more or let a understanding die.

“He is one of a many entrepreneur people we have ever seen. He will change what he needs to change to get a best outcome,” a second sidestep account manager said.

BANKING ON A DEAL

The understanding was already proof formidable for bankers before a Qatari move. They are confronting reduce fees due to a singular purpose of former Citigroup (C.N) grandee incited eccentric match Michael Klein.

It was Klein’s ability to get Glasenberg and arch-rival Mick Davis to determine on a gratefulness that put a understanding on a table. Klein is approaching to acquire between $10 million and $15 million for his work and could be called on to assistance well-spoken out a latest wrinkle, sources said.

Klein’s cut of a fees will meant reduction for Citigroup, Morgan Stanley (MS.N), Credit Suisse (CSGN.VX) and BNP Paribas, Glencore’s advisers.

Deutsche Bank (DBKGn.DE), JP Morgan (JPM.N), Goldman Sachs (GS.N), Nomura (9716.T) and Barclays (BARC.L), advisers for Xstrata, will also accept a smaller suit since of Klein’s intervention.

London’s “mining king”, Ian Hannam, a maestro rainmaker who quiescent from JP Morgan final month to quarrel a 450,000-pound excellent imposed by British regulators for flitting on inside information, is also concerned in a transaction, and teams during Citigroup and Morgan Stanley embody maestro UK advisers David Wormsley and Simon Robey, among a biggest names in corporate financial in a City of London.

With stakes so high, all will be banking on Glasenberg display his common ability for removing a understanding done.

“Is he a smartest male in a room? Let’s see where a understanding goes,” a second sidestep account manager said.

(Additional stating by Clara Ferreira-Marques; Editing by Alexander Smith and Will Waterman)

JPMorgan falls 5 percent after trade detriment report


LONDON |
Thu Jun 28, 2012 8:27am EDT

LONDON (Reuters) – JPMorgan (JPM.N) (JPM.F) shares fell 5.3 percent in Frankfurt on Thursday after a journal reported that waste from a unfit credit derivatives trade could strech $9 billion in a worst-case scenario.

The U.S. bank’s shares in New York are also trade down 5.4 percent in pre-market trading.

The story was “likely unsatisfactory today” for a shares, Evercore Partners pronounced in a investigate note.

JPMorgan pronounced in May that it had mislaid $2 billion on a trades, though these waste have mounted in new weeks as a bank has unwound a positions, a New York Times reported on Thursday, citing people briefed on a situation.

An inner news during a bank projected in Apr that a waste could strech $8-9 billion, presumption worst-case conditions, a journal said.

JPMorgan declined to comment.

(Reporting by Sarah White and Douwe Miedema)

News Corp confirms devise to separate in two


Thu Jun 28, 2012 8:05am EDT

(Reuters) – Rupert Murdoch’s News Corp pronounced on Thursday it would pursue bursting a $60 billion media firm into apart publicly traded edition and party companies.

Murdoch will be authority of both companies and will be arch executive of a party business. The association did not name a arch executive for a new edition company.

News Corp’s board, overseen by a 81-year-old Murdoch, met on Wednesday and certified government to pierce forward with a separation, a association said.

(Reporting By Yinka Adegoke; modifying by John Wallace)

Stock futures tumble on limit skepticism, banks eyed


NEW YORK |
Thu Jun 28, 2012 8:47am EDT

NEW YORK (Reuters) – Stock futures hold their waste on Thursday after as weekly jobless claims information came in about as expected.

Futures had formerly been down after a German financial method orator pronounced an progressing news that Germany has altered a position on euro holds was not true.

The series of Americans filing new claims for stagnation advantages fell final week, supervision information showed on Thursday, though remained too high to vigilance any vital alleviation in a labor market.

SP 500 futures fell 6.3 points and were next satisfactory value, a regulation that evaluates pricing by holding into comment seductiveness rates, dividends and time to death of a contract. Dow Jones industrial normal futures mislaid 83 points and Nasdaq 100 futures fell 10 points.

(Reporting by Ryan Vlastelica; Editing by Dave Zimmerman)