World financial news

Nashville-based wellness program operator Healthways Inc. said Wednesday it will acquire Navvis & Co., a local company that advises health systems on strategy and other issues, for $28.7 million.

The price is made up of $23.7 million in cash and $5 million in Healthways stock. Healthways said it expects to close the deal by Aug. 31. It will have a negligible effect on Healthways’ profit in 2011, the company said.

Navvis, based in Clarkson Valley, will stay in the area instant payday loans. The local company’s CEO Mike Farris also will remain with Navvis.

Navvis advises health systems on organization, strategy, partnerships, physician alignment, and service and facility development.

Shares of Healthways fell 13 cents to $12 on Wednesday.

Source

Anglo American is exploring a bid for Macarthur Coal that would challenge St. Louis-based Peabody Energy Corp.’s $4.9 billion offer for the Australian miner, said two people with knowledge of the matter.

Anglo American, part owner of the world’s biggest platinum and diamond producers, is studying Macarthur’s finances, said one of the people, who declined to be identified as the talks are private.

Buying Brisbane-based Macarthur would give Anglo steelmaking-coal mines in Australia as prices trade near a record. Peabody and its bidding partner, ArcelorMittal, took their offer directly to Macarthur shareholders after talks with the board collapsed.

“Acquisition of metallurgical coal fits with Anglo’s strategy,” Peter Davey, London-based head of metals and mining research at Standard Bank Group Ltd., said by telephone. “They have the firepower because they were a bit stingy on dividends.

Maybe they kept the money for this instance potentially.”

Anglo American doesn’t comment on speculation, said Emily Blyth, a London-based spokeswoman. She also said the company “does examine growth opportunities in our core commodity groups across geographies.”

Macarthur rose 48 cents, or 3 no faxing payday loans.1 percent, to $16.15 in U.S. over-the-counter trading.

Peabody and ArcelorMittal are bidding $16.02 a share. Macarthur directors had snubbed that offer earlier, demanding $18.61.

ArcelorMittal, based in Luxembourg, is Macarthur’s second- biggest shareholder, with about 16 percent. Brokers including RBS Morgans Ltd. have said a rival bid may include Macarthur’s largest investor, Citic Group. Citic is receiving advice from Macquarie Group Ltd., said one person familiar with the matter.

If successful, the Peabody group’s bid for Macarthur would be the second-largest coal takeover this year, second only to Alpha Natural Resources Inc.’s $7.1 billion purchase of Massey Energy Co. in June. This year has yielded almost 50 coal transactions globally, with a combined value of more than $20 billion.

“We will see more of these kind of deals because large-cap companies like BHP Billiton, Anglo have a lot of cash,” Davey said. “The recent shake-out in the market is bringing a lot of opportunities for housekeeping in terms of buying out minorities.”

Source

Marlboro maker Altria Group says its net income fell about 57 percent in the second quarter on charges related to lease transactions by one of its subsidiaries.

The owner of the nation’s biggest cigarette maker, Philip Morris USA, reported Wednesday that it earned $444 million, or 21 cents per share, for the period ended June 30. That’s down from $1.04 billion, or 50 cents per share, last year.

Excluding one-time items, earnings were 53 cents per share, matching analyst estimates.

But revenue, excluding excise taxes, tumbled nearly 8 percent to $4 billion. Analysts expected revenue of $4.36 billion

The company, based in Richmond, Virginia, says it sold less than one percent fewer cigarettes than a year ago and 2 percent less smokeless tobacco like Copenhagen and Skoal.

Source

MAPLEWOOD

Tens of thousands took to the streets of the capital on Monday, demanding that the president’s sons leave Yemen as pressure rose for the wounded leader being treated outside the country to step down.

Ahmed Saleh, 42, is a one-time heir apparent to his father, who was badly wounded in an attack earlier this month. A ruling party official had said last week the president would return home soon from medical treatment in Saudi Arabia despite reports that he was heavily burned.

In his absence, pressure has been mounting at home and abroad for President Ali Abdullah Saleh to step aside after nearly 33 years in power.

His son Ahmed Saleh commands the elite Presidential Guard, the country’s best equipped and trained military unit. The force has played a key role in protecting his father’s regime since pro-democracy protests erupted in February.

The protesters on Monday called for Ahmed Saleh to leave, along with his brother Khaled, who is also an army commander. Their demonstration led to the closure of major streets in the capital. Most stores shuttered down, but there were no immediate reports of clashes with security forces.

More than 100 influential religious clerics and tribal leaders have called for the president’s ouster and elections to choose a new leader, saying he is unfit to return to his post.

Militants, meanwhile, are taking advantage of the internal strife in Yemen to overrun parts of the country.

In the southern port of Aden, government forces early Monday killed one Islamic militant and wounded two others in an exchange of fire near the offices of the local branch of the Central bank at Crater, the city’s ancient historic port district, according to security officials. No casualties were reported.

Militants also seized two towns in the southern province of Abyan late last month and attacked a town in a neighboring province last week.

Military officials, meanwhile, on Monday raised to 17 the number of militants killed in fighting in Abyan the previous day and said at least five soldiers, including two senior officers, were killed Monday when a mortar hit their position.

The security and military officials spoke on condition of anonymity because they were not authorized to speak to the media.

Yemen’s political turmoil began with anti-government protests in February. The country is the poorest in the Arab world, suffers numerous internal conflicts and is a potential source of instability for neighboring Saudi Arabia and other oil-rich parts of the Arabian peninsula.

For the U.S. and Europe, the main concern is the al-Qaida offshoot that has found refuge in Yemen’s mountainous hinterlands and has been behind several nearly successful strikes on U.S. targets.

Source

Shoppers are showing signs of pulling back on spending on discretionary items like clothing and home goods as gasoline and groceries eat up more of their paychecks.

Those pressures led many retailers on Thursday to report only modest revenue increases in May, the latest sign of the economy hitting a soft patch.

Retailers that cater to wealthy shoppers and warehouse clubs like Costco that also sell gas reported the biggest gains.

Most of the spring, consumers seemed to shrug off rising prices. Now, gasoline at more than $1 per gallon more than last year and higher grocery bills are “finally taking a bite and affecting sales,” said Ken Perkins, president of research firm Retail Metrics. “It definitely raises the caution flag going into the summer.”

Revenue rose 5.4 percent overall at stores open at least a year among 27 retailers, according to the International Council of Shopping Centers. Excluding gasoline, the figure rose 3.7 percent.

That was within the 3 percent to 4 percent range expected, said Mike Niemira, ICSC chief economist and director of research.

“On the surface, the numbers look pretty good,” Niemira said. “But it is being driven by a very narrow set of retailers.”

The figures are based on revenue from stores open at least one year, a key indicator of a retailer’s health because it excludes results from stores opened or closed during the year.

Niemira expects the June revenue figure to rise 3 percent to 4 percent, excluding fuel.

The May results follow disappointing economic reports on unemployment, housing and consumer confidence that investors worry indicate a softening of the economy. The Dow Jones industrial average skidded 280 points Wednesday, losing more than a quarter of the year’s gains, on rising economic fears, and fell again Thursday.

Consumer spending is closely watched because it accounts for about 70 percent of U.S. economic activity and is critical for a strong economy.

Of 24 retailers, 60 percent missed expectations and 40 percent beat expectations, according to Thomson Reuters. The reports don’t include Wal-Mart Stores Inc., the world’s largest retailer.

Target’s revenue at stores open at least a year rose 2.8 percent, below the 3.5 percent analysts expected, according to FactSet.

“Our guests continue to shop cautiously in light of higher energy costs and inflationary pressures on their household budgets,” Target Corp. CEO Gregg Steinhafel said.

Julie Hart, 35, is feeling the pain. She said she won’t be able to send her 11-year-old son to summer camp this year because of higher prices. The retail worker in Garland, Texas, added that her son’s grandmother, who once lavished gifts on her son, can’t anymore.

“Food and gas are the priority … and there’s nothing else left,” she said.

Stores that cater to middle- and lower-income shoppers fared worse than more expensive stores. Luxury retailer Saks Inc. reported May results jumped 20.2 percent, far higher than analysts expected. Nordstrom Inc. also beat expectations.

Macy’s was another standout. The company’s revenue figure rose 7.4 percent and the company raised second-quarter guidance.

But midpriced department stores, such as Dillard’s, J.C. Penney and Kohl’s all missed expectations.

Weather could have hurt results. May was unseasonably cold and wet, and there were floods along the Mississippi and Ohio rivers and 350 tornadoes reported, according to weather research firm Planalytics.

Summer could be even more difficult, because the surging price of cotton is expected to start showing up in clothing prices. Prices have been creeping up already, Perkins said, but could rise anywhere between 5 percent to 20 percent this summer.

Still, most retailers are still reporting revenue increases, not declines. That’s cause for some optimism, said Chris Donnelly, senior executive in Accenture’s retail practice.

“We’re still seeing growth despite the gas prices and unemployment, inflation and falling home prices,” he said.

Warehouse clubs benefited from rising gas prices, partly because those stores use discounted gasoline to lure shoppers into buying memberships. Costco Wholesale Corp. and BJ’s Wholesale posted strong results.

Still, dollars that go into gas tanks can’t be spent elsewhere.

Beky Hayes, in Austin, Texas, said high gas prices have forced her to put off haircuts, taking her dog to the vet and buying a new bed.

“I’m a musician, and I have to drive my equipment to play a show,” she said. “So higher gas prices have cut into my budget for other things that I need.”

Source

The operator of the Hamaoka nuclear power plant in central Japan says it has agreed to the government’s request to close the facility.

Chubu Electric Power Co. convened a special board meeting Monday to decide whether to accept Prime Minister Naoto Kan’s directive to close the plant’s three reactors while the company builds new safety features.

The facility about 125 miles (200 kilometers) west of Tokyo is known as Japan’s “most dangerous” plant because it sits in an area where a major earthquake is expected within three decades instant payday loans.

The government reached its conclusion after evaluating the country’s 54 reactors for quake and tsunami vulnerability after the March 11 disasters that heavily damaged the Fukushima Dai-ichi plant in northeast Japan.

Source

Stocks are closing higher after Federal Reserve Chairman Ben Bernanke said central bank officials expect the economy to continue recovering this year as the jobs market strengthens.

The Fed expects the economy to grow between 3.1 percent and 3.3 percent this year. That’s below the Fed’s previous forecast in January, but the Fed also said it’s more optimistic about the unemployment rate going lower.

The Dow Jones industrial average rose 96 points, or 0.8 percent, to close at 12,691 Wednesday.

The Standard & Poor’s 500 rose 8, or 0.6 percent, at 1,356. The Nasdaq composite index is up 22, or 0.8 percent, at 2,870.

Three stocks rose for every two that fell on the New York Stock Exchange. Volume was 4.2 billion shares.

Source

A lot of big banks had a free ride to higher earnings the last few quarters. That could be ending soon.

As the economy gets better, investors want to see if banks can improve their core businesses of writing loans, issuing credit cards and advising on corporate deals.

Several major banks including Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. recorded substantial gains in income in recent quarters from accounting adjustments in their loan loss reserves.

Those adjustments, which are perfectly legal, reflected a decline in the likelihood that their borrowers would default on loans. That allowed banks to release cash from reserves that had been set aside to cover future losses, which increased their income.

Of course it’s a good thing in the long run for both banks and the overall economy that borrowers are less likely to default. Now analysts are saying the benefits from these kinds of reserve adjustments may be winding down as the economy continues to improve.

Jason Goldberg, an analyst at Barclays Capital, suspects that some banks may have overdone it with the adjustments. “We wonder if some companies stretched to put up better results” in the fourth quarter, Goldberg wrote in a recent report.

Income at banks with investment banking operations will likely get a boost from a pickup in corporate deals in the first quarter. Consumers are also spending more, which means banks are probably earning more from charging interest and fees on credit cards. Increased demand from consumers also tends to lead to more borrowing from businesses.

But trouble in the housing market is sure to weigh on bank earnings. A sharp increase in mortgage rates over the past six months could hold back income from issuing new mortgages and refinancing existing ones. The average rate on a 30-year mortgage rose to 4.87 percent last week from 4.32 percent at the end of September, according to Freddie Mac.

JPMorgan’s banking analyst Vivek Juneja says he expects the largest drop in income at banks to come from lower fees tied to new mortgages and a drop in the number of refinances.

Last year, revenues at most banks shrank after new regulations reduced their income from fees on debit and credit cards. Lawsuits also increased as investors sued banks for selling them investments that were based on faulty mortgages. Several banks including JPMorgan Chase and Bank of America set aside more money for litigation.

Meanwhile, all 50 state attorneys general are continuing their investigation into allegations that banks bungled foreclosure proceedings. Analysts expect banks to pay fines, but it’s unclear how big they will be. The investigation is sure to be a topic of discussion in executives’ conference calls with analysts.

Higher investment banking revenue should boost earnings at some banks. Global investment banking revenue reached $19 billion in the first quarter, up 19 percent from the first quarter of 2010, according to the research firm Dealogic. Global mergers and acquisitions volume totaled $809 billion in the first quarter, up 28 percent from the same period last year.

Here are the forecasts of analysts surveyed by FactSet and highlights for each of the large banks:

_ JPMorgan Chase will be the first bank to report earnings on Wednesday. It is expected to earn $1.15 per share for the first quarter on revenue of $25 billion. One of the healthiest banks, JPMorgan increased its quarterly dividend by more than any other, to 25 cents a share from 5 cents. JPMorgan is also leading Dealogic’s rankings for mergers and acquisitions.

_ Bank of America Corp. goes next on Friday. The Charlotte, N.C. bank is expected to report earnings of 27 cents per share on revenue of $26 billion. It was the only one of the four largest banks that wasn’t allowed to increase its dividend. The largest writer of home loans and credit cards, Bank of America has struggled to grow during the slow economic recovery. New regulations took away some of its most lucrative sources of income from fees related to overdrafts and late payments.

_ Citigroup goes next on Monday. The New York bank is expected to report earnings of 9 cents per share on revenue of $21 billion. Barclays’ Goldberg hopes to see improvements in its investment banking revenue after disappointing results last quarter. He also expects better results from its global portfolio.

_ Goldman Sachs Group Inc. reports on Tuesday. It is expected to earn $2.39 per share on revenue of $10 billion. Keith Horowitz, an analyst at Citi, expects Goldman’s strength in risk management to be in greater demand from its clients at a time of global political unrest, higher gas prices, and rising interest rates.

_ Wells Fargo is expected to report earnings of 66 cents a share on revenue of $21 billion on Wednesday. Wells has a large mortgage business and is likely to be hurt by any increase in mortgage rates.

_ Morgan Stanley, which reports next Thursday, is expected to earn 42 cents a share on revenue of $8 billion. Horowitz expects Morgan’s investment banking fees to decline 30 percent from the last quarter.

Source

The new iPads have landed — and the throngs turned out to greet them.

Apple maintained an air of mystery about its South by Southwest (SXSW) pop-up shop until the very last minute, waiting until barely an hour before launch time to unveil its logo and transform an anonymous, empty corner store in downtown Austin into the epicenter of iPad 2 mania. By then, the line of waiting shoppers stretched for blocks, tipped off by an article in a local newspaper late Wednesday that revealed Apple’s plans.

Shopper No. 1, Austin local Sweet John Muehlbauer, turned out at 6:30 a.m. to secure his spot at the head of the line. Right behind was a contingent that traveled much further: Four South Africans, who capped off a 35-hour plane trip to SXSW with a nine-hour wait in the iPad line. It was a spur-of-the-moment decision to queue up, but the group made the most of its wait.

"I’m going to get two for myself," declared Graham Bradford, founder of Cape Town-based Web development firm Graydot. "One as a backup. Or I might give one to my future girlfriend. I don’t know who that is yet, but having an iPad 2 should help, right?"

Fifteen minutes before launch time, a squad of Apple employees emerged from the shop — still covered with opaque paper concealing the view inside — and began writing out purchase tickets. Most of those waiting rattled off their requests like a fast-food order: "Two 32 gig white Wi-Fis, one 16 gig Verizon 3G in black …"

But a few customers wanted to drill down into the specs. Tim Street, in from Los Angeles, spent 10 minutes grilling an Apple staffer about prices, data plan options and storage capacity before making his decision: a black 64 GB Wi-Fi iPad and an AT&T 3G 64 GB model, also in black.

The decision took longer than the purchase. At 5:08 p.m., Street emerged from the shop, victoriously waving his iPads aloft. He plans to keep one and share the other around the office at MDialog, a mobile video software developer.

Apple didn’t take pre-orders for the iPad 2, forcing those who wanted to get one right away to hop on line. At the company’s New York City flagship, hundreds turned out. The first half-dozen lined up 24 hours in advance, braving a drizzle and chilly temperatures.

Piper Jaffray analyst Gene Munster says his team counted 1,190 people in line at the shop at 5 p.m. That outnumbered the 730 people in line at launch time for the first iPad in April 2010.

In Austin — where the SXSW Interactive show opened Friday morning, drawing more than 10,000 people to the city — the weather was balmy and the line atmosphere party-like. Many of those waiting already had the first version of the iPad, released less than a year ago, but were eager to trade up to the faster and thinner new model.

But a few were crossing enemy lines. One of the earliest spots in line was held by a shopper wearing an Android t-shirt. Aaron — "I’m not going to give you my last name," he said — had no interest in Apple’s latest gizmo. "I run Android businesses. No way I’m using one," he said.

His plan: Resell the iPads for a $200 markup. He already had one buyer lined up.

Others had no intention of letting their new prize out of their hands. Surrounded by cheering crowds, a media swarm, and a line stretching for blocks, the iPad 2 launch had the air of a historic — or religious — occasion.

IPad D.J. Rana Sobhany lined up to snag two iPads that she plans to press into immediate service for musical sets Friday night.

"Apple has really been pushing the music capabilities of the iPad a lot," she said. This time around, Apple built a lot of native functionality for musical experimentation right into the device: "That really does change everything."

"The poor guys in there are shaking," Graham Bradford reported, emerging from the shop clutching a pair of iPads. "I’m shaking. I’m the first South African to have an iPad!"

-CNNMoney staff reporter Laurie Segall and Fortune writer Philip Elmer-DeWitt contributed to this report. 

Source