World financial news

Treasury yields were about two basis points away from a nine-month high as the U.S. prepared to sell $72 billion of debt this week starting tomorrow.

The difference between 2- and 10-year rates widened to the most in almost a year as economists said reports this week will show consumer confidence climbed and initial claims for jobless benefits fell. An unexpected decline in the U.S. jobless rate in January spurred speculation employment will improve in 2011.

“Treasury yields will rise,” said Hiroki Shimazu, a Tokyo-based economist at Nikko Cordial Securities Inc., a unit of Sumitomo Mitsui Financial Group Inc., Japan’s third-largest publicly traded bank. “The pace of recovery in the labor market is picking up.”

Benchmark 10-year notes yielded 3.64 percent as of 9:47 a.m. in Tokyo, according to BGCantor Market Data. The 2.625 percent security maturing in November 2020 traded at 91 23/32. The rate climbed to 3.66 percent on Feb. 4, the highest since May 4 cash advance loan no fax.

The spread between 2- and 10-year yields increased to as much as 2.93 percentage points today, the widest since Feb. 18 last year.

The Treasury will auction $32 billion of 3-year notes tomorrow, $24 billion of 10-year debt the next day and $16 billion of 30-year bonds on Feb. 10.

The University of Michigan consumer sentiment index may have increased as the economy showed signs of picking up and stocks gained. The preliminary February reading rose to 75 from 74.2 in January, according to the Bloomberg survey median before the Feb. 11 report.

Labor Department data Feb. 10 will show new applications for unemployment benefits declined by 5,000 last week to 410,000, the surveys show. The unemployment rate fell to 9 percent in January from December’s 9.4 percent, the Labor Department said Jan. 4.

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Japanese housewives’ “secret savings” fell 18 percent to the lowest in three years in 2010 as slumping family incomes and rising prices for food and energy forced them to tap reserves, a survey shows.

The value of so-called hesokuri, the cash and investments that housewives stash without telling their husbands, fell to an average 3.1 million yen ($37,700) in 2010 from 3.7 million yen a year earlier, the lowest since 2007, according to a Sompo Japan Insurance Inc. report published today. Women traditionally handle family finances in Japan, collecting their husbands’ paychecks and making investment decisions.

Higher energy bills sparked by the country’s hottest summer on record and an 18 percent jump in vegetable prices prompted housewives to tap savings and cut pocket money doled to husbands from their bonuses. The use of savings to manage everyday expenses reversed last year’s trend of using hesokuri funds for one-time purchases such as travel or dining out, the report said.

“Because they’re charged with household finances, housewives can tell where Japan’s economy is going,” Minoru Sugiyama, an official at Sompo Japan who helped lead the survey, said in an interview. “Japanese people will be more defensive this year after cutting expenses and facing falling income. Family finances and Japan’s economy seem to be getting worse.”

Income Squeeze

Household confidence has slumped for six straight months as the economic recovery loses steam. Japan’s gross domestic product contracted at an annual 0.8 percent pace last quarter after consumer stimulus programs ended, according to the median estimate of economists surveyed by Bloomberg.

While some food prices rose last year, the country has struggled for more than a decade with deflation that has squeezed corporate earnings and workers’ pay, weakened consumption and made debts harder to pay off. Wages dropped at an average 1 percent pace in the past decade, and monthly pay slid 0.2 percent in November, Labor Ministry data show.

Housewives gave their husbands a smaller share of this winter’s bonuses to spend, today’s report showed, with the allocation falling 5.5 percent from a year earlier to 69,000 yen, the lowest since 2003.

Among the 500 respondents to the survey, 141 said the increase in vegetable prices had the biggest impact on their family budgets last year. The rise in energy bills due to torrid summer was the second and higher tobacco taxes ranked third.

Hot Weather

The average price of vegetables jumped last year in part because of hot weather, according to the Ministry of Agriculture. Onions rose 42 percent to 125 yen a kilogram, potatoes climbed 37 percent and tomatoes increased 21 percent.

Japan in 2010 had the hottest summer since records started in 1898, according to the Japan Meteorological Agency. Ten Japanese power companies sold 84.9 billion kilowatt hours in August, up 9.2 percent from a year earlier, according to the Federation of Electric Power Companies of Japan.

About 37 percent of housewives said declining cash flow forced them to use the secret savings to cover living expenses, while 21 percent used it to pay for one-time luxury spending — almost the exact inverse of a year earlier, the survey said.

The housewives plan to save money by cutting costs of food using spices to and cheap stretch meals. Some 233 respondents said they will use more bean sprouts to cook meals, while 80 housewives will consider tofu for breakfast and dinner, compared with 72 last year and 40 a year earlier. Five said they plan to use traditional seasonings on plain rice to stretch budgets.

More people said total financial assets, excluding hesokuri savings, dropped last year than people who said those assets rose, and the average decline per family was 1.2 million yen, the research said.

Sompo Japan DIY Life Insurance Co., a venture between Sompo Japan Insurance Inc. and Dai-Ichi Life Insurance Co., targeted 57,000 Japanese housewives in their 20s through 50s from Dec. 10 to Dec. 14. Of those, 8,300 responded to the survey, of which 500 answers were used. The average age of participants was 39.7.

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Energy prices dropped Thursday after the government said oil and natural gas supplies fell less than expected last week.

Benchmark crude for February delivery lost $1.28 to settle at $89.84 per barrel. It was the first time in more than a week that oil settled below $90.

Oil has surged for most of December as U.S. petroleum consumption ticked higher and traders looked forward to 2011, when oil is expected to touch $100 per barrel and perhaps go higher.

Rising oil prices have pushed gasoline pump prices higher. They were up again on Thursday. The national average for a gallon of regular hit $3.07, about six cents higher than a week ago and 45 cents more than a year ago. Drivers across the country pay a range of prices at the pump. In California you’ll pay about $3.32 a gallon. In New York gas goes for around $3.30 a gallon. The average is $2.91 in Texas and $2.82 in Colorado.

Some analysts think the national average will hit $3.75 by spring.

The price of benchmark crude tumbled Thursday after the Energy Department’s Energy Information Administration weekly supply report. The EIA said oil supplies declined by 1.3 million barrels last week. A drop in supplies often supports higher prices, but analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., thought the drop would be bigger _ around 3.2 million barrels.

Investors worried that the report showed demand for energy was not continuing to pick up, despite positive economic news. The Labor Department on Thursday said the number of people applying for unemployment benefits fell to 388,000, the lowest level in almost two and a half years.

Meanwhile, Freddie Mac said a fixed-rate 30-year mortgage rose to 4.86 percent, the highest since May. That raised concerns about whether higher mortgage rates would slow the recovery of the housing market.

The EIA also released its weekly report on the nation’s natural gas supplies, which showed they shrank by 136 billion cubic feet. That’s less than analysts expected and a relatively small dent in total supplies of more than 3.2 trillion cubic feet, eight percent above the five-year average. Milder weather across most of the country over the next 10 days should reduce heating demand and keep a lid on natural gas prices.

On the Nymex, natural gas rose 5.1 cents to settle at $4.338 per 1,000 cubic feet. In other energy trading, heating oil gave up 3.61 cents to settle at $2.4854 per gallon. Gasoline gained 0.14 cent to settle at $2.3918 per gallon.

In London, Brent crude fell $1.05 to settle at $93.09 per barrel on the ICE Futures exchange.

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Russian news reports say that a judge has found former oil tycoon Mikhail Khodorkovsky guilty in his second trial, a verdict that would likely keep Russia’s former richest man behind bars for several more years.

The Interfax and ITAR-Tass news agencies report that the judge said Monday in the opening pages of his verdict that Khodorkovsky has been found guilty.

Khodorkovsky is nearing the end of his eight-year sentence after being convicted of tax fraud in a case seen as punishment for challenging the Kremlin power.

The conviction on charges of stealing oil from his company and laundering the proceeds could keep him behind bars until 2017.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

A Russian judge has started delivering the verdict in the second trial of jailed oil tycoon Mikhail Khodorkovsky, once Russia’s richest man whose case is seen as punishment for challenging the Kremlin best payday advance.

Khodorkovsky, who once headed Russia’s biggest oil producer, is nearing the end of his eight-year sentence after being convicted of tax fraud.

But he can be kept behind bars at least until 2017 if the judge convicts him on charges of stealing all the oil from his company and laundering the proceeds.

Vladimir Putin, who was president during Khodorkovsky’s first trial and is now prime minister, has shown no sign of softening his attitude, and hopes for an acquittal are low.

The reading of the verdict began Monday but may take days to complete.

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Best Buy Co.’s third-quarter net income fell more than expected as it lost sales of TVs and laptops to competitors. It also cut its full-year outlook Tuesday.

Shares of the largest U.S. electronics chain fell nearly 12 percent in premarket trading.

The company, which benefited when Circuit City went out of business last year, is facing stepped-up competition from online and discount stores.

Best Buy said its market share in TVs, mobile computing and video game software fell. Americans are also buying fewer TVs and other electronics. Best Buy said there were larger than expected industry declines in key U.S. consumer electronics categories for the three months ended Oct. 31.

Revenue in stores open at least 14 months fell 5 percent in the U.S., hurt by lower revenue from TVs and entertainment hardware and software. Best Buy sold fewer TVS, and prices have fallen as the industry works through a glut in TV supply.

That was partly offset by strength in mobile phones and tablet computers.

Net income in the fiscal third quarter, which ended Nov. 27, the Saturday after Thanksgiving, fell 4 percent to $217 million, or 54 cents per share, from $227 million, or 53 cents per share, last year. Analysts polled by Thomson Reuters, on average, expected 61 cents per share.

Revenue fell 1 percent to $11.89 billion, from $12.02 billion last year. Analysts expected revenue of $12.45 billion.

Revenue in stores open at least 14 months fell 3.3 percent.

The measure is considered an important measure of a retailer’s financial health because it excludes stores that open or close during the period.

The company now expects net income of $3.20 to $3.40 per share, from a prior range of $3.55 to $3.70 per share, hurt by lower revenue in the U.S. Analysts expect $3.59 per share.

Share fell $4.88, or 11.7 percent. To $36.82 in premarket trading.

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Business fell at all but one local casino in November, compared with last year.

Casino Revenue (in millions) Change from Nov. ‘09

Ameristar $22.2 -5.87 pct.

Argosy Alton $5.8 -7.83 pct.

Casino Queen $9.6 -11.67 pct.

Harrah’s $20.6 -12.95 pct.

Lumi?re Place $12.8 -22.14 pct.

President $0 *

River City $13.5 *

Total $84.5 2.67 pct.

* President Casino closed in June, but was included in 11/09 total. River City Casino opened in March and was not included in 11/09.

Source: Missouri Gaming Commission, Illinois Gaming Board

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Research In Motion???s BlackBerry PlayBook, the tablet designed to compete with the iPad from Apple, is winning corporate customers months before its debut.

Insurer Sun Life Financial has agreed to buy as many as 1,000 PlayBooks, and the Canadian banking unit of ING Groep says it is also committed to purchasing the device. Companies including Manulife Financial are testing the product, set to go on sale next quarter.

RIM first found success selling its BlackBerry smartphone to companies and is counting on such endorsements as it tries to challenge Apple???s dominance of the booming tablet market. RIM, based in Waterloo, Ontario, is betting on the PlayBook???s security features, such as e-mail encryption, to win over companies used to working with the BlackBerry.

???The encryption was really the clincher in opting for the PlayBook,??? said Tom Reid, a Sun Life senior vice president. Sun Life plans to buy 500 to 1,000 PlayBooks initially and may increase that number as it begins to use it more widely, he said.

Natalie Harrison, an Apple spokeswoman, had no immediate comment. Last month, Apple said more than 65 per cent of the Fortune 100 companies are deploying or piloting the iPad, including Procter & Gamble, Lowe???s and Hyatt Hotels 500 payday loan.

Apple sold 3 million iPads in the first 80 days after the product debuted in April, showing there???s demand for a device that straddles the gap between laptops and smartphones like the BlackBerry and iPhone. Apple had a 95 per cent share of the tablet market last quarter, according to Strategy Analytics.

Besides adding a revenue source, the PlayBook is a chance for RIM to regain some momentum from Apple, whose iPhone has stolen market share from the BlackBerry and is beginning to win some corporate customers. Citigroup and Bank of America are considering whether to let employees use the iPhone as an alternative to the BlackBerry, three people familiar with the plans said this month.

Toronto-based Sun Life, Canada???s third-largest insurer, plans to let new pension plan members register directly on the RIM tablet and has already built a PlayBook application, the world???s first, Reid said.

For Amsterdam-based ING???s Canadian unit, familiarity with the BlackBerry makes the PlayBook appealing, Chief Information Officer Charaka Kithulegoda said.

???The PlayBook fits very nicely into the current infrastructure, architecture, security policies, everything that we have in place,??? said Kithulegoda. ???At the end of the day it comes down to these things.???

He said ING aims to buy an undisclosed number of PlayBooks for employees and is also building a banking app for customers.

The tablet is expected to connect to ING???s BlackBerry server computer ???out of the box,??? meaning the company won???t have many of the security worries it would face with an unfamiliar device, Kithulegoda said.

The PlayBook will sell for ???under??? $500, said RIM co-Chief Executive Officer Jim Balsillie. The iPad starts at $499 for a model with 16 gigabytes of memory and the price climbs for versions with more storage. The initial PlayBook version will connect to the Internet through either a Wi-Fi connection or by tethering it to a user???s BlackBerry.

Manulife, North America???s third-largest insurer, is testing the PlayBook as part of RIM???s PlayBook early-developer program, said Tom Nunn, a spokesman for the Toronto-based company. Manulife plans to use the PlayBook ???to leverage our past investment??? in BlackBerrys, said Nunn no credit check payday loans.

PlayBook features built to appeal to business users are its twin cameras that enable videoconferencing, and a 7-inch screen that makes the device more portable and easier to fit in a bag or jacket pocket than the iPad.

Apple CEO Steve Jobs said last month devices like the PlayBook are ???dead on arrival??? because they are too small to compete with the iPad, which has a 9.7-inch screen.

That prompted RIM to post a clip of the PlayBook???s performance on the Web, comparing it to the iPad in performing several tasks, including surfing the Web and playing video. Balsillie said the clip shows the PlayBook is three to four times faster than its Apple rival.

ING???s Kithulegoda is sold on the PlayBook???s features. He just wants it to come to market faster and said he???s in talks with RIM to get the PlayBook as soon as he can for a trial.

???Yesterday would have been better, but I???ll settle for next year,??? he said.

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General Motors returned to life as a public company Thursday with a stock offering worth potentially US$23 billion, considerably more than anticipated when the largest U.S. automaker began preparing for its IPO.

The stock started public trading above the IPO price. In New York, the stock (NYSE: GM) was at US$35.72 and in Toronto (TSX: GMM.U) they were at US$35.84 shortly after the markets opened Thursday.

GM set a price of US$33 per common share on Wednesday, at the high end of a range and a day after it raised the number of shares it will offer to satisfy investor demand.

The U.S. government, the Canadian federal and Ontario governments and other owners will raise a total of $18.2 billion by selling at the IPO price. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.

The U.S. Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 per cent to about 33 per cent. The stock sold through the IPO would be worth about $13.6 billion.

Canada???s federal and Ontario governments have owned a combined 11.67 per cent of General Motors since last year???s bailout of the automaker. They???re reducing that stake to below 10 per cent by selling about 35 million shares through the IPO.

Canadian Industry Minister Tony Clement and Finance Minister Jim Flaherty have said they???re in no hurry to sell more GM shares at this time, since they been advised that the stock may be worth more in future.

The head of GM Canada??? largest union, CAW national president Ken Lewenza, said Thursday he supports the idea of having a continuing government role in the auto sector.

???We would encourage the Canadian government to take their time,??? Lewenza said in an interview with BNN, a specialty business cable channel.

???In fact, we would encourage the Canadian government to do what other countries are doing, like in China and Korea, and have some stake in the automobile industry.???

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The economy showed signs of pulling out of its slow-growth rut as initial jobless benefit claims hit a four-month low last week and the trade gap narrowed more than expected in September.

The reports on Wednesday were the latest in a recent stream of data to suggest the U.S. economy is tentatively beginning exit summer doldrums.

“Two months ago, three months ago there was a real growth scare and people were talking about a double dip (recession),” said Jim O’Sullivan, chief economist at MF Global in New York. “Now, the numbers are not only not showing double-dip, but they’re showing reacceleration.”

The number of workers filing new claims for state unemployment aid fell to 435,000 in the week ended November 6 from a revised 459,000 in the prior week, the Labor Department said. Economists had looked for claims to come in at 450,000.

The bigger-than-expected drop took a four-week moving average of claims — a better indicator of underlying trends — to its lowest level since just before Lehman Brothers filed for bankruptcy in September 2008.

At the same time, the number of people still receiving regular state benefits after an initial week of aid fell to 4.3 million in the week ended October 30, the lowest level since November 2008.

The news followed a report on Friday showing private firms hired workers in October at the fastest pace since April. Still, analysts say the pace of job creation is not enough to pull down the United State’s 9.6 percent unemployment rate.

Concern over the anemic job market was a factor behind the Federal Reserve’s decision last week to pump an extra $600 billion into the U.S. economy through Treasury bond purchases.

In a separate report, the Commerce Department said the U.S. trade deficit narrowed more than expected in September to $44.O billion, despite near record imports from China.

A narrower deficit is positive for U.S. economic growth since it suggests more demand is being met by U.S. production.

Financial markets, however, largely shrugged off the data. Worries over Ireland’s debt load helped push the dollar to one-month high against the euro and the yen and weighed on stocks, which were flat at midday. Treasury prices were little changed.

CHINA IMPORTS STILL NEAR RECORD

Economists said the trade report suggested the U fast payday loan no faxing.S. economy grew a bit more swiftly in the third quarter than the 2 percent annual pace reported late last month.

Many also said trade, which cut into growth last quarter, could be a positive in the final three months of the year. O’Sullivan said the drop in jobless claims suggests growth could pick up to 3 percent as the year draws to a close.

U.S. exports rose slightly in September, a third consecutive monthly gain. Imports fell 1.0 percent.

The rise in exports and decline in imports suggests a drop in the value of the dollar “might be beginning to weave its magic,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, New York.

A weaker dollar helps U.S. exporters by making American products cheaper in world markets, at the same time increasing the cost of foreign goods in the United States.

But continued high imports from China cast a shadow over the data. U.S. imports from China totaled $35.0 billion, just barely below a record set in August, while U.S. exports to the country declined fractionally to $7.2 billion.

The resulting $27.8 billion trade deficit with China, by far the largest the United States had with any trade partner, could revive chances for the Senate to vote on legislation punishing some Chinese imports for Beijing’s currency practices.

The House of Representatives approved the bill in September in the belief that China deliberately undervalues its currency to give Chinese companies an unfair trade advantage.

While many observers believe the bill will fall by the wayside following the November 2 congressional elections, some think its fate depends on whether President Barack Obama can make progress on the issue at a Group of 20 summit that gets underway in Seoul on Thursday.

The U.S. trade gap with China has swelled to $201.2 billion in the first nine months of 2010, compared to $165.9 billion in the same period in 2009.

Washington is pushing Beijing to let its currency rise more quickly in value and take other steps to spur domestic demand. On Wednesday, China ordered its banks to put more money aside as required reserves, a move that could slow Chinese growth.

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Logitech on Wednesday showed off its forthcoming Revue set-top box, which will be one of the first consumer products to take advantage of Google’s new Internet television system.

The Logitech Revue was first announced at Google’s I/O conference in May, but few details were available at the time. On Wednesday, the device was listed for pre-order on Logitech’s website for $300. Dish Network will have advanced integration with Revue, and Dish subscribers will get a reduced rate of $179 for the box.

Pre-ordered Revues are scheduled to ship by the end of October, when the device will also be available in Best Buy (BBY, Fortune 500) stores.

Google TV, which the company announced in May, is Android-based software that gives televisions access to videos, apps and sites from the Web. Users can toggle between regular television channels and Internet content, using Google’s Chrome browser to navigate.

Google (GOOG, Fortune 500) partnered with companies including Logitech, Intel (INTC, Fortune 500), Sony (SNE) and Adobe (ADBE) for its Google TV project. Logitech’s device will launch with pre-installed apps from Netflix, the NBA, Twitter, CNBC, Napster and Pandora.

But Logitech hopes that’s just the start: "With a huge community of developers creating apps for the upcoming Android Market, there’s no telling what your TV will be able to do," the company touts on its website.

Noticeably absent is Hulu.com. Google is reportedly still in talks with the video streaming site, and hopes to reach a deal soon.

Accessories: Logitech also announced add-ons and apps for the Revue box, which comes with a keyboard controller that features a touch pad.

The 6-inch Mini Controller, for $130, offers the same controls in a smaller size. Controller apps will be available for the iPhone, iPad and Android. A $150 TV Cam uses free software to make HD video calls.

Logitech faces immediate competition in the Google TV market. Sony is holding a press event next week to unveil what it calls "the world’s first Internet Television." That product — an HDTV with Google TV built in — was also first mentioned at the Google I/O conference in May.

The Google TV website says the service will be "on sale this fall," points visitors to both the Sony Internet TV site and the Logitech Revue site.

Other companies are also gunning for the TV-meets-Internet market. Last month, Apple announced the second generation of its $99 Apple TV receiver. Meanwhile, Roku’s XDS boxes offer selected Internet video content — but no Web browsing — for as little as $59.  

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