Yields 4% Draw Janney, Northern Trust as Hop Sales

U.S. bonds business investment grade are attracting investors bet a struggling labor market will help contain inflation after yields rose above 4 percent for the first time since early August.

Yields on the debt of borrowers in Bentonville, Arkansas-based Wal-Mart Stores Inc., the maker of computer software to Oracle Corp. in Redwood City, California, have increased from an average of 3.53 November 4 percent, the lowest in history, as gains in manufacturing sales and retail sales data indicated an improvement in the economy, according to the rate of Bank of America Merrill Lynch, which tracks over of 4,400 bonds.

U.S. unemployment, which rose in November to the highest level since April, may take five years to fall to a normal level, while it is possible that the Federal Reserve will buy more than $ 600 million Treasury bonds announced last month, Chairman Ben S. Bernanke said in an interview broadcast yesterday. increased demand caused yields on corporate bonds to tighten in relation to public debt in the past three days last week to the widest since October 21.

"The soft economic news actually put a bid in bond prices," said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which has $ 50 billion in assets under management. "Bonds of Love weakened the prospects for economic data."

Spreads Shrink

The extra yield investors demand to own corporate bonds with investment grade bonds instead of Treasuries fell to 179 basis points, or 1.79 percentage points, from 03 December 182 to the end of November in the U.S. . UU. reported that the unemployment rate rose to 9.8 percent, Bank of America Merrill Lynch index data show. The increase in unemployment led to speculation that consumers will have character of expenditure, keeping inflation accelerates and the erosion of fixed-income payments of bonds.

"In investment grade credit is attractive here," Nicholas said Finkelman, who helps oversee $ 3.5 billion of bonds as a money manager in New York, Inc., based Ryan Labs, which last week bought debt securities issued by American International Group Inc.

Elsewhere in credit markets, spreads on corporate bonds across the world widened 5 basis points last week to 176 basis points, according to Bank of America Merrill Lynch Global Broad Market Corporate Index. yields reached 177 basis points on November 30, the highest since 08 September. Yields rose to an average of 3.83 percent from 3.7 percent.

European Divisions

Italy and Spain led an increase in the cost of insuring bonds sold by the most indebted countries in Europe against the failure of the divisions arising in the best way to limit the spread of the crisis in the region with budget deficits.

Officials disagree on whether to raise 750 million euros ($ 1 billion) bailout fund and introduce European bond joint meeting in Brussels.

Swaps credit-default in Italy rose 10 basis points to 219, while contracts linked to Spain rose 10.5 basis points to 307.5, according to data provider CMA. The Markit iTraxx Index SovX Western European governments swaps rose 15 basis points to 6.25 183.

Swaps credit-default tend to fall as improving investor confidence and rising as it deteriorates. Contracts pay the buyer face value if a borrower defaults on its obligations, less the value of the defaulted debt. A basis point equals $ 1,000 annually on a contract protecting $ 10 million of debt.

The Standard & Poor's / LSTA U.S. leveraged loan 100 Index fell 0.05 cent to 91.76 cents, after falling as low as 91.61 on November 30. Prices in the index, which measures the 100 largest dollar loans first lien leveraged, have fallen 92.72 cents on Nov. 9, the highest since May 3. leveraged loans and junk bonds are rated below Baa3 by Moody's Investors Service or below BBB-by S & P.

Emerging Markets

In emerging markets, the relative yields fell 12 basis points to 240 basis points, the biggest drop in four weeks, according to JPMorgan Chase & Co. index data.

The U.S. bond sales investment grade rose to $ 17.1 million last week, up from 14.25 billion U.S. dollars in the previous two weeks.

Westpac Banking Corp., raised $ 2.5 billion in an offering of three parts, the largest U.S. Corporate bond sales by a foreign bank in six weeks. The Sydney-based lender's $ 1 billion over five years, three percent notes rose 0.7 percent in the December issue price from 2 to 100.6 cents, according to Trace, the bond information system The price of the Financial Industry Regulatory Authority.

AIG Sale

AIG sold $ 2 billion of bonds in its bid for the first time since the insurer was rescued by the U.S. government in 2008.

The company based in New York for $ 1.5 billion of 6.4 percent notes due December 2020 rose 0.7 percent in the November issue price from 30 to 100.45 cents, monitoring data show. The bond is rated A3 by Moody's, the seventh level of investment grade, and an equivalent A-by S & P.

European efforts to combat the deficit will also help prevent inflation, helping prop up prices here, according to William Dennehy, managing director of fixed income funds with Chicago-based Northern Trust Corp., which has $ 150 billion in assets under management.

"We like investment-grade credit this content," said Dennehy, who said Northern Trust was the purchase of newly issued bonds last week.

Fed officials on November 12 began a second round of purchases of assets to support the growth of the economy, reduce unemployment and prevent deflation. The Fed has kept its benchmark rate in a range from zero to 0.25 percent for two years.

The Labor Department reported on 03 December that the economy created 39,000 jobs in November, less than the most pessimistic forecast of 87 economists surveyed by us. The median forecast of the survey was more than 150,000 jobs.

Bernanke Interview

"At the rate we're going, it could be four, five years before we are back to a normal unemployment rate" of 5 percent to 6 percent, said Bernanke s CBS "60 Minutes" program. The purchase of more bonds than expected is "certainly possible," said Bernanke, 56. "It depends on the effectiveness of the program" and the outlook for inflation and the economy.

Corporate profits are headed for its best annual performance since 1988, with analysts forecasting a 37 percent growth this year. He estimates the coming year will see an increase of 14 percent, according to projections compiled by us.

bonds of the company must overcome the public debt in 2011 as yields remain compelling relative decline, net sales and profit values of quantitative easing by the Fed, Barclays Capital analysts led by Eric Miller wrote in a report of 03 December.

Spreads remain wider

Spreads on high quality corporate bonds are still above the average of about 92 basis points in 2007, before credit markets began to freeze. Yields on U.S. debt investment grade government bonds exceed 250 basis points next year, the analysts wrote.

investment grade bonds have returned 9.52 percent this year, while Treasury bonds have gained 6.88 percent, Bank of America Merrill Lynch index data show.

The net amount of corporate bonds issued is expected to plummet by 30 percent to 285 billion U.S. dollars of debt, excluding those from U.S. banks, is redeemed, Barclays analysts said.

"The amount of fixed income assets available to buy next year will be lower," said Jeffrey Meli, co-head of U.S. credit strategy at Barclays Capital in New York. "This is one of the most important drivers of performance for the next broadcast year of investment grade. There will be less paper to buy."

Read more »

Euro worse to come as Trichet fails to ease the crisis, meteorologists Top Di

The most accurate currency strategists say that the euro is the worst annual performance since 2005 was extended until next year as the crisis of sovereign debt in the region undermines economic growth.

Standard Chartered Plc, the forecaster superior general of the six quarters ended September 30 from data compiled by us predicted that the euro may weaken to less than $ 1.20 in mid-2011 of $ 1.3352 today. Westpac Banking Corp., the second most accurate is "bearish in the short term," and No. 3 Wells Fargo & Co. cut its forecast at the end of last week.

The currency of 16 nations first weekly gain against the dollar from 05 November may be short-lived amid growing concern that more nations will need bailouts. The European Central Bank President Jean-Claude Trichet, delayed the final of emergency stimulus measures last week and increased purchases of public debt as "acute" market tensions led the Spanish bond yields and Italians at the highest levels in relation to German bonds since the euro began in 1999.

"We will have a continuation of the problems that Ireland, Portugal, Spain and others are suffering," said Callum Henderson, head of Standard Chartered currency research in Mexico. "The bottom line is these are countries with relatively large debt, large budget deficits, current account deficit, which does not have its own currency and can not reduce interest rates. The only way out of this is to have a significant recession. "

Sentiment Reverses

Ireland's budget deficit will rise to over 32 percent of gross domestic product this year, including the cost of rescuing the country's banks, European Commission data showed on November 29. Spain's deficit will be 9.3 percent in 2010. total debt of Portugal, will reach nearly 83 percent of GDP this year from about 76 percent in 2009, according to the commission.

Just last month, the euro reached $ 1.4282, the strongest level since January, as traders sold the dollar on speculation the Federal Reserve lowers the dollar by printing more money to purchase $ 600 billion Treasury bonds called quantitative easing.

Now, those concerns are being overshadowed by the possibility that the European economy slows next year as governments impose austerity measures to reduce the budget deficit, while officials unit bond investors away with talk of force them to take losses as part of future bailouts.

Risk Investment

The demand for options granting the right to sell the euro over the next three months in relation to procurement that achieves the highest level since June last week. The hazard rate of investment called Delta fell 25 percentage points negative 2.5225 0.5725 negative in October.

European banks pay the highest premium dollar loans through the swap market since May of last week, a sign the outlook for the euro may deteriorate. The price of swaps every two years between exchange between euros and dollars reached at least 51.8 points on 01 December, from minus 20.9 the 4th of November.

"We have plenty of time to go" before the European situation is resolved, John Taylor, president of FX Concepts LLC, the world's largest currency hedge fund, said on 02 December in funds New York hedge Link Conference organized by us. "That means that the market will be shaken."

Taylor predicted some nations may leave the common currency. stronger members "have to say enough, guys, leave the euro," he said. "The risk that Spain and Italy will get into trouble will cause the euro to become very weak."

The region's economy may expand 1.4 percent next year compared with 2.5 percent in the U.S., according to the median estimate of more than 20 economists in surveys.

"Market Tensions

"The uncertainty is high," Trichet told reporters after the ECB left its benchmark interest rate by 1 percent to 2 December. "We have tensions and we have to consider."

The ECB will keep the banks that offer as much money as they want in the first quarter for up to three months at a fixed interest rate, Trichet said. That marks a change from last month, when he said the ECB could begin to limit access to their funds.

While the euro rose 1.3 percent against the dollar last week, is 5.6 percent below November 4. For the year, has fallen by 6.8 percent after a gain of 2.51 percent in 2009.

Westpac predicts the euro may weaken to $ 1.2650, $ 1.2670 in one month, said Lauren Rosborough, senior currency strategist in London. The bank expects the Fed's plan with option to buy bonds to weigh on the dollar, according to Robert Rennie, chief analyst at Westpac in Sydney.

'Source of negativity "

"As we move into next year, we see the quantitative easing in the U.S. as a continuous source of negativity to the U.S. dollar," said Rennie. "We have the euro to $ 1.35 in March and $ 1.38 in June."

Unlike the Fed, the ECB is not carrying out quantitative easing. That helped keep the euro from this year's game reached low of $ 1.1877 on June 7.

Outside the most accurate forecasters, strategists do not dare to reduce their estimates. Although the euro fell 6.9 percent last month, the median estimated mid-2011 of 41 strategists surveyed by us rose to $ 1.36 from $ 1.35.

Germany is doing to some of the weakness of the economies of Greece, Ireland, Portugal and Spain. Last week, the Nuremberg-based Federal Labor Agency said the number of unemployed Germans fell a seasonally adjusted 9.000 to 3,140,000, the lowest level since December 1992. German business confidence rose to a record in November as domestic spending increases, the Ifo institute in Munich said on 24 November.

Trichet signal

Trichet said Nov. 30 that investors are underestimating the determination of policy makers "to bolster stability in the region. He said in Paris on December 3 that the governments of the euro area needs a" quasi "fiscal union.

"There will be enough political will to find measures that bind the system together," said Jane Foley, senior currency strategist based in London at Rabobank International, one of the most bullish on the euro among the most accurate forecasters. "The euro's out of this stronger."

Foley said the euro will strengthen to $ 1.40 in the first quarter and $ 1.45 in late June.

Traders are anticipating further declines as the U.S. economy accelerates.

Diverging economies

U.S. jobs created in November for the second consecutive month, the Labor Department data showed in Washington Dec. 3. Two days earlier, the Institute for the factory index for Supply Management showed manufacturing expanded for a month 16. By contrast, GDP growth in Europe slowed to 0.4 percent in the third quarter from 1 percent in the three months ended June 30, according to figures from the EU on December 2.

While most indebted nations in the euro region to cut spending to bring their deficits under control, a weaker euro will be needed to protect their economies, said Ian Stannard, senior currency strategist in London at BNP Paribas SA, the fifth most accurate predictor . The bank said the euro trading at $ 1.25 in late June and $ 1.20 in the third quarter.

The reduction of the link members of the euro zone, including Ireland and Spain have accelerated after EU leaders agreed on 29 October to consider the proposal of German Chancellor Angela Merkel, to force bondholders to share the cost of the bailouts in the future.

Wells Cortes

The crisis prompted Wells Fargo to reduce its target for the first quarter of the euro to $ 1.37, $ 1.38 against the November forecast of 1.41 dollars, said Nick Bennenbroek, chief currency strategist in New York. He sees the currency at $ 1.25 by end of next year.

The debt crisis "will remain with us for longer, so we lower our goals," he said. "The movement in the euro has been particularly rapid and can say that the currency markets have pushed the panic, so I feel it is exaggerated. We expect the euro to fall over time, but we expect the decline to be more orderly than has been the case recently. "

Companies participating in the ranking were compared on the basis of seven criteria: six forecasts at the end of each quarter to the end of the next, from March 2009, plus an annual estimate that was made in late September 2009 for the exchange rate as September 30, 2010.

Only companies with at least four forecasts of a currency pair qualified for it, and only those who qualified in at least five of the eight pairs were included in the ranking of the best general predictors.

Read more »

The biggest drop in copper inventories in six years

The biggest drop in copper inventories in six years, is aggravating the scarcity prices head towards record highs, making the metal a first selection of Goldman Sachs Group Inc. and Morgan Stanley.

The demand will outpace supply by 367,500 tons next year, enough to cables, pipes and equipment at about 1.8 million U.S. households, according to the median forecast of 12 analysts surveyed by us. The stock may fall to a record low of using less than a week, said Michael Widmer, metals analyst at London-based Bank of America Merrill Lynch. Global exchange inventories fell by 22 percent this year, heading for the biggest drop since 2004.

Prices advanced 34 percent since 30 June, even as the International Monetary Fund forecasts slower growth in the world, the U.S. unemployment trapped near its highest level in more than a quarter century and China, which uses two of every five tons of copper, braking and increased loan interest rates. Now, banks Credit Suisse Group, Barclays Capital provides higher prices, with the median of a survey of a record average of $ 8,542 a tonne by 2011, 15 percent more than this year.

"Copper is the most attractive" base metals, said Ian Henderson, who manages about $ 8 billion in assets to JPMorgan Chase & Co. in London, including shares of Freeport-McMoRan Copper & Gold Inc. and BHP Billiton Ltd., the mining second and third largest. "I do not expect any decrease in demand for copper in 2011 and there is little in the way of new mines coming on stream."

Smart Phones

Prices rose by 18 percent this year, reaching $ 8,725 a ton on the London Metal Exchange today. That compares with an increase of 6.5 percent in the MSCI World Index of shares, a 6.9 percent return on Treasury bills and an increase of 16 percent of GSCI Standard & Poor's 24 future raw materials. Prices reached a record $ 8,966 a tonne on 11 November.

Demand for the metal, used in everything from smartphones to the brake pads will increase by 4.2 percent next year, compared with a gain of 2.6 percent in production, said Barclays Capital report of 11 November. Supplies fell 363,000 tonnes short of demand in the first eight months of this year, the Lisbon-based International Copper Study Group said in a report of 23 November.

Mining companies have failed to keep pace with demand because new reserves are increasingly difficult to find and the quality of the ore is low, which means less metal is extracted from each ton of earth. average scores dropped to about 1.1 percent this year from 1.6 percent in 1990, according to Guildford, England-based researcher Brook Hunt, a firm Wood Mackenzie.

Largest mine

Production at Escondida, the largest copper mine, will be reduced by up to 10 percent in the 12 months ended in June due to lower grades, Melbourne-based BHP Billiton, the largest shareholder, said in a statement on 25 August.

Freeport-McMoRan, the largest producer in the list, 21 October, said its copper sales in North America was reduced to 1.1 billion pounds this year from 1.2 million pounds in 2009. Indonesia sales likely to decline to 1.2 million pounds from 1400 million, the Phoenix-based company said.

"The most important copper reserves that are being produced today come from 100 year old mine, with few exceptions," said Freeport Chairman James R. Moffett in a conference call on November 17.

analysts forecast the shortage is not yet reflected in the futures markets. Copper for delivery in December 2011 traded at $ 8.555 on 3 December at the LME, down 1.9 percent from the benchmark contract for delivery in three months.

Goldman predicts that prices of $ 11,000 to buy the contract then and December 2011 is one of seven recommendations in commodities, according to a report by December 1.

Bailout

The earnings forecast could be prevented by slowing growth. Prices fell by 7.7 percent in three days last month on concern measures to control inflation China may curb demand for metals and that Ireland will need a bailout plan.

The prices now may be biased by who owns metal. An unidentified company held 50 percent to 79 percent of LME stocks for delivery from December 1, the data show bag. Buyers of that day paid the biggest bonus in two years for immediate delivery, in relation to the three-month contract. Total inventories 324 375 tonnes available, the exchange said Dec. 6.

Record prices could encourage users to substitute cheaper materials. Global consumption may be 100,000 tonnes less than expected in 2011, and 250,000 tonnes short of predictions in 2012, due to the substitution of plastics in aluminum alloys in the pipes and air-conditioning, Credit Suisse said on 20 October.

Hybrid cars

Substitution can take place on 3 percent of demand this year and next, according to London-based Rio Tinto Group. The new applications in electric and hybrid cars should offset some of that, Andrew Harding, chief executive of copper in Rio de Janeiro, said Nov. 26. The average North American car contains about 23 kilograms (51 pounds), while an electric car uses about 75 kilograms, he said.

The tripling in prices since December 2008 is also encouraging the use of scrap, alleviating shortages highlighted by the fall of this year from 22 percent in inventories monitored by exchanges in London, Shanghai and New York. The supply of metal wires and electronic products rose 25 percent in the first eight months, the International Copper Study Group reported in November.

The greatest threats to higher prices are China tighten its monetary policy and a worsening debt crisis in Europe, said Bank of America Merrill Lynch Widmer, whose March forecast the average price this year has a precision of 2 percent.

China Economy

China may raise bank reserve requirements to deal with capital inflows and a possible increase in credit at the beginning of 2011, Li Daokui, a central bank adviser, said on 3 December. The bank pushed the rate of one-year loans to 5.56 percent in October, the first increase since 2007.

However, manufacturing grew at a faster pace for the fourth consecutive month in November, according to the federation of logistics in the nation. China's economy will expand by 9 percent in 2011, compared to 10 percent this year, according to the median of 18 economists surveyed by us. Would still be more than three times the speed of the U.S., the second largest copper user, according to the survey.

Consumption in China, India, Brazil and the Middle East will expand at an average annual rate of 7 percent per capita by 2015, according to Barclays Capital.

"Where is all the copper is coming back?" Said Tom Patton, director general of Quaterra Resources Inc., a Vancouver-based company developing the mine in North America. "New sources have 10 to 15 years to implement."

Increased demand

Aurubis AG, the largest foundry in Europe, is also predicting increased demand next year.

"We now see a very positive order flow for the next year," said Bernd Drouva, executive director of the Hamburg-based company, e-mail. "Every dive in the price of copper is recognized by customers as an opportunity for new orders."

Demand from Asia helped Santiago-based Codelco, the largest producer, increased the surcharge on sales to China next year by 35 percent, more than the increase of 23 percent for Europe, industry officials, said last month. Buyers pay the fee above the LME price of copper for immediate delivery.

The gain is driving shares of mining companies. Freeport-McMoRan rose 36 percent on the New York Stock Exchange this year, outpacing the 9.8 percent gain in the S & P 500.

Demand can also be promoted if JP Morgan, BlackRock Inc. and Foundation Securities Ltd. products become publicly traded by metal backed. These funds could store up to 250,000 tons, Aurubis said in a report of 15 November. Similar products backed by gold accumulated 2,098 tonnes since it began in 2003, equivalent to nine years of U.S. mining production.

"The real story is metal and we called this the decade metals," said Mari Kooi, executive director of Wolf Asset Management LLC, told Hedge Fund Link Newsletter and investors in New York on 2 December. "What we have is an implementation of the scarcity of metals."

Read more »

Gold trades near record U.S. economy concerns may need more stimulus

Gold rose near a record in New York on concern the U.S. economy may need more stimulation, increasing the demand for wealth protection. Silver rose to a maximum of 30 years.

The dollar rose against the euro, European officials expressed disagreement about the necessary steps to stop the crisis of sovereign debt. Federal Reserve chairman, Ben S. Bernanke said the central bank may increase purchases of Treasury to bolster the economy. Gold futures, which generally move inversely to the dollar traded up 1 percent from a record $ 1424.30 an ounce established on 9 November.

Bernanke's comments "are largely bullish for precious metals," wrote Walter de Wet, an analyst at Standard Bank Plc in London, in a report. "More liquidity means a new impulse to the precious metals, gold in particular, and the weak dollar."

Gold futures for February delivery was up $ 13.80, or 1 percent, at $ 1,420 an ounce and was quoted at $ 1,415.50 at 8 am on the Comex in New York. The metal for immediate delivery in London was little changed at $ 1,414.45.

Spot prices reached a record of 902.6464 pounds sterling. The dollar rose 1.2 percent against the euro.

"Without a stronger dollar, gold is likely to trade higher," said Peter Fertig, owner of Quantitative Hainburg Commodity Research Ltd., Germany, today by phone.

Currency Devaluation

Bernanke said that unemployment may take five years to fall to a normal level and the Fed buys Treasury bonds beyond the $ 600 billion announced last month is possible, according to a transcript of an interview with CBS Corp s . '"60 Minutes" program. Gold is set for an annual gain of 10 º after the government spent billions of dollars and kept interest rates low to boost economies. European finance ministers are meeting today in Brussels.

"Given that most degrading of fiat currency is back on the agenda, it seems likely that the precious metals, especially gold and silver, are ready for further gains," said James Moore, analyst at TheBullionDesk.com, in London, in a report.

Gold is likely to advance to $ 1,500 next year on demand from investors and central banks, Bank of America Merrill Lynch said in a report dated 3 December. Prices are up 29 percent this year.

Silver for March delivery in New York added much as 2.4 percent to $ 29,975 an ounce, the highest since March 1980 and closed at $ 29,795. The metal is 77 percent this year and futures reached a record high of $ 50.35 in 1980, a year after the Hunt brothers tried to corner the market.

Ratio Falls

An ounce of gold bought as little as 47,326 ounces of silver in London today, at least since February 2007. Silver will average $ 29.50 next year as investors buy more metal and industrial growth is driving demand, the Bank of America Merrill Lynch, said.

"There is a certain impact on the replacement of silver as investors also see the metal as a store of value, like gold," said Ben Westmore, an analyst at National Australia Bank Ltd., today by phone from Melbourne.

Palladium for March delivery fell 0.9 percent to $ 763.15 an ounce, after reaching $ 780 on 3 December, the highest since April 2001. Platinum for January delivery was 0.3 percent, to $ 1723.20 an ounce. Average of $ 2,000 Platinum and Palladium will average $ 775 next year, according to Bank of America Merrill Lynch.

Read more »

Jerome Dodson

For Jerome Dodson at Parnassus Investments, growing public pessimism about the economy in 2010 convinced him to buy shares. Walter Allianz RCM Technology Fund prices ruled out a recession after business executives said he was improving. Columbia Investment Management Advisors LLC, said Tom Galvin cash register made something impossible to happen.

nearly 10 percent unemployment and falling home sales will not deter U.S. administrators best performing funds this year, delivering average gains of 28 percent. They are optimistic in 2011, encouraging participation in oil producers, suppliers of temporary help and Internet enterprises.

"When everyone is depressed is absolutely the best time to buy stocks," said Dodson, who oversees $ 4500000000 as president of Parnassus in San Francisco. "Everyone was moaning and groaning this summer. At that time, had he been able to divorce yourself from your emotions and buy stocks, would have been great. Just buy, and that's what we did."

Dodson, Galvin, Francisco Claro de Wells Capital Management Inc., Dennis Lynch, Morgan Stanley and George Whitney at Royce & Associates LLC all won 92 percent of their peers by holding 50 percent and industrial stock consumption, the best performing groups in 2010, represented in 500 of Standard & Poor's. Price, which invests primarily in technology providers, 30 percent returned to investors through last week, driven by a concentration of 51 percent of Apple Inc. and a gain of 94 percent in the business software provider Salesforce.com Inc.

Firm

The best money managers were buyers, even as unemployment, which was near the highest since 1983, sent the S & P 500 to a low of 1022.58 in July 2010. Dodson, Price and Galvin said they were betting profit growth, increased cash balances and lower ratings than the average bull market remain intact.

"This year has provided many opportunities for re-entry," said George, the chief investment officer of New York, co-Royce chief and manager of the $ 4200000000 cheap Royce Value Fund, which has returned 27 percent this year and 99 percentile of its peers during the past five years. "Valuations are pretty good, fundamentals are pretty good. There are lots of things that are happening in the market that are positive."

The S & P 500 traded at 15.3 times earnings on 3 December, compared with an average of 16.4 since 1954. The multiple has declined from a peak of 18.8 in March, increased profits faster than stock prices.

New Normal

Mohamed El-Erian and Bill Gross at Pacific Investment Management Co. in 2009 warned that the gains in stocks and bonds lower than historical averages in the coming years. El-Erian, co-chief investment officer of the company president Newport Beach, California, which oversees the world's largest bond mutual fund, said in June 2009 that investors should prepare for an environment of lower growth and performance , hampered by the growing public deficit and regulations.

"We summarize these insights in the sentence:" A bumpy ride to a new normal , We also are careful to specify more than one stage. In fact, the bumpy ride to a new normal scenario, while the most probable, is given a probability of 55 to 60 percent during the past 18 months. We have also detailed the specific characteristics and the likelihood of the three other scenarios that involve both a faster recovery or the risk of relapse. "

Media Vuelta

U.S. actions have returned 6.2 percent a year since 1900 before dividends, as inflation-adjusted data produced by the London Business School and Credit Suisse Group AG in Zurich.

Stocks rallied last week, pushing the S & P 500, an increase of 3 percent, to 1,224.71, after U.S. retailers reported sales that beat analysts' estimates, made in China and enlarged European policy makers extended an emergency loan program in Europe. The Institute for Supply Management's report showed U.S. manufacturing extended for a month 16 in November. The Labor Department said December 3 that employers added 39,000 jobs in November, less than the most pessimistic forecast of economists surveyed by us.

The S & P 500 lost 0.2 percent to 1,222.10 at 10:05 New York time.

Dodson, whose fund is ranked the third best in diversified U.S. equity on data through November 12, returned 28 percent this year. Finisar Corp. purchased companies, the manufacturer of Sunnyvale, California, network equipment fiber optic for Administaff Inc., a provider of human resource services in Kingsville, Texas, speculating who will win as the economy improves in 2011.

Peak unemployment

Clear Wells said that unemployment had peaked signs were reasons for optimism in 2010. The proportion of American workers can not find a job reached a maximum of 26 years of 10.1 percent in October 2009 and has since fallen to 9.8 percent, according to Labor Department data.

"If you have this high unemployment rate, we are more likely to go to an unemployment rate of 11 percent or are we likely to go to a rate of 8 percent or 7 percent rate over time?" said. "The higher you are in terms of some indicators, such as the unemployment rate, the more chance you could find."

Sure bought shares in New York, Monster Worldwide Inc., the world's largest online recruitment, as its shares rose by 33 percent this year. The company returned to profit in the third quarter and earn money throughout the coming year, according to the average estimate of analysts compiled by us.

Free Cash Flow

Lynch, head of reversing the growth of Morgan Stanley Investment Management Inc., said he hoped for companies with the highest yields of free cash flow, or earnings after capital expenditures divided by share price, which had the potential to increase revenue and decrease the financial crisis. Internet-based companies such as Norwark, Connecticut-based travel agency Priceline.com Inc., were among the best examples, he said.

"Our portfolio is full of solid companies with strong balance sheets and sustainable competitive advantage," said Lynch, whose six billion U.S. dollars in Morgan Stanley Institutional Fund Trust Mid Cap Growth Fund has returned 31 percent this year, more than 96 percent of their peers.

The S & P 500 is up 21 percent from its 2010 low in July including dividends. Its total return since December 31, 1912 percent also hit corporate bonds investment grade, which returned 9.5 percent since the beginning of the year. Treasury bonds have been less so with a 2010 yield of 6.9 percent, according to Bank of America Merrill Lynch indexes.

Technology shares

Citrix Systems Inc., a software developer in Fort Lauderdale, Florida that cost $ 1,170,000,000 added to the Allianz RCM Technology Fund, is up 69 percent year to date, the third largest increase in inventories of technology in the S & P 500. RCM technology increased 30 percent this year in the 95 percentile.

"At the end of the first quarter began to buy a more aggressive portfolio," said Price. "We were hearing a lot of concern about a double dip, but actually was pretty good company as we saw with the reports of the third quarter. It was like we read in the headlines and saw the concerns, but we also heard many of our companies tell us 'No, business is good. "So there was the panic of our core holdings."

S & P 500 companies represent about 10.6 percent of its market value in cash, with the third quarter marked the eighth consecutive record corporate reserves, according to estimates and data from Howard Silverblatt , senior index analyst at S & P. The executives are experiencing better than expected earnings, more than 70 percent of S & P 500 exceeded expectations this quarter.

Beating estimates

This is the sixth in a row that more than 70 percent higher than forecast, the longest stretch since at least 1993. The U.S. economy is projected to expand 2.5 percent in 2011 and 3 percent in 2012, according to 63 economists surveyed by us .

"We invest in high quality, high growth and are well positioned today - perhaps better than any time in the last 10 years - because they have better balance sheets in a world where cash is king," said Stanford, Connecticut-based Galvin, 3.5 billion U.S. dollars which occupies the bottom 98 percentile of its peers this year. "You need to have strong balance sheets to invest in new developments and bring to market new products that are gaining market share even in an economy that is showing little lift."

The outflow of funds

Mutual funds that invest in U.S. equities outputs have been every week since the beginning of May, a total of more than $ 80 million, according to data and estimates compiled by the Washington-based Investment Company Institute. Professional investors were also cautious, as futures on the Chicago Board Options Exchange volatility index showed in September that the populations of interest would fall never been greater.

For Dodson on Parnassus, George Royce and course of Wells Capital Management, the negative feeling was a sign opposite where the action of buying. Falls in stock prices given the opportunity to acquire stock in the below-average valuations and wait for bearish investors to change their minds.

"This summer, when people began to worry about a double dip recession, one of the areas most was aggressively sold technology stocks, so we added some semiconductors," said George. "We are value investors and nonconformists. When you have a lot of negative press and people worry about the market, they tend to get better grades in stocks."

George said he bought Fairchild Semiconductor International Inc. and the S & P 500 was reduced by 16 percent between April and July. The South Portland, Maine-based maker of chips that convert and regulate power electronic devices is 78 percent since July 2 and has posted nine consecutive quarters of better-than-projected earnings.

"People are focused on: Is the company doing well and growing fast, and if the answer was 'Yes', who bought the shares," said San Francisco prices. "There was all this overwhelming issue macro like the last two years. That's a great development. If you navigate this environment and the economy continues to improve, the actions that make their way higher in 2011."

Read more »

Market Gores Bear That Was not pessimistic as S & P 500 Rebounds 20%

Investors who attended the warnings about falling home sales, record deficits of the EU budget and the devaluation of U.S. dollar may regret the nurse after the bear market of 2010 did not.

500 Standard & Poor's gained 9.8 percent this year through last week and 20 percent since hitting its low of 2010 on July 02, defying the naysayers by Robert Prechter to Albert Edwards and Nouriel Roubini, who expected economic slowdown hurt equities. The Bulls, who looked like losers when the benchmark for U.S. stocks fell 16 percent between April and July, were claimed by the rebound that added $ 2.6 trillion in value.

Expansion of factory production, retail sales and earnings that topped forecasts and the Federal Reserve's commitment to buy 600 billion U.S. dollars of Treasury bonds drove the progress of the economy continued to recover from the worst financial crisis since the Great Depression. investment funds to U.S. equities at least $ 1 billion in assets returned a median 7.7 percent in the last five months.

"You still have an investment culture that is still too immersed in the most recent experience rather than rationally based on the evidence of the day," said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management Inc., which manages $ 342 million. "We had a terrible crisis of '08," he said. "It is amazing to me that the slowdown in recovery brought first-deflation depression mentality of revenge."

Economic disappointments

The pessimists gained a proof of its concern this summer. Economic surprise index Citigroup U.S. fell below 64.3 in August from 43.4 in April positive and debt crisis of Europe calls on speculation that slower growth. readings of negative economic reports mean missing forecasts.

A. Gary Shilling, who predicted the collapse of the housing market, said in August that the economy "has much more gas" and may enter into a second recession. While the gross domestic product growth slowed to a rate of 1.7 percent in the second quarter, accelerated to 2.5 percent in the third quarter, according to Commerce Department data.

The economy must be expanded by 5 percent, given the depth of the recession, and investors should avoid stocks to corporate revenue growth accelerates, Shilling said last week.

"We are in a period of slow growth, probably, deflation, and quite a few problems in other places like Europe than the U.S. dollar and Treasuries will be the safe havens," said Shilling, president of investment research firm A. Gary Shilling & Co. in Springfield, New Jersey. "Stock markets have been anticipating a much faster growth ahead of what is likely to get, and there could be some disappointment."

Expanding Economy

U.S. grow by 2.7 percent in 2010, 2.5 percent in 2011 and 3 percent in 2012, according to the median of 63 estimates of GDP in a survey. The National Bureau of Economic Research September 20, said the biggest decline since the 1930s ended in June 2009.

The S & P 500 is up 8 percent in September from Prechter recommends keeping cash, because pessimism lead people away from investors. Technical analysis, or the process of using price charts to forecast investment, shows that the S & P 500 will fall, said last week. Investors must wait six years before the purchase of shares, he said.

The S & P 500 fell 0.1 percent to 1,224 at 10:26 am in New York.

"Bottoms are usually acute, while the tops often take time to play out," he wrote Prechter, Executive Director Elliot Wave International in Gainesville, Georgia. "It's perfectly normal that an increase in GDP after the stock rises. You can not use the GDP to make the purchase and sale decisions in the stock market."

The drop to 450

Edwards, global strategist at London-based Societe Generale, which warned this year that the world was entering another recession and deflation was a possibility, said in August that the S & P 500 would fall to about 450. It increased 17 percent since then.

"The structural bear market has not reached the final," Edwards wrote in a note dated 26 August, a day before Fed Chairman Ben S. Bernanke signaled he could buy more bonds. "The stock market has shrugged off many of the weaker data is abundant, and has not joined the bond market in motion perception. The stock market when they collapse like a house of cards it is."

Edwards did not respond to an e-mailed request for comment last week.

Manufacturing Report

The Institute for Supply Management's report last week showed that U.S. manufacturing extended for a month 16 in November. Pending sales of existing U.S. homes unexpectedly rose by a record 10 percent in October, the National Association of Realtors said on 2 December. While the Labor Department said December 3 that the American non-farm payrolls expanded by 74 percent below the median economist estimate, the S & P 500 rose 0.3 percent.

Roubini, co-founder of Roubini Global Economics LLC, who recommends selling shares before the S & P 500 fell to 57 percent from its record high in October 2007, said in July that the market will fall and has occupied its bearish outlook on the world economy during 2010. The economy will suffer as Americans cut debt, spend less and save more, which means an "anemic" recovery, said last month.

"Roubini Global Economics is not called the markets, but comments on the fundamental direction", according to a statement of 03 December the company based in New York.

The S & P 500 rose 3 percent between November 1926 and 03 December, the biggest weekly advance in a month.

"Many think it bears too obsessed with the age-old problems facing the economy and ignoring the cyclical upturn," said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees U.S. $ 63 billion. "At the end of the day, if you are involved with the action or not, the answer is: 'Yes, you should."

Read more »

Stock Market Maker Standards to stop Stub Rates Take Effect Today

Citing obligations to improve the market prices of securities in force today as part of an attempt by regulators to prevent a repeat of the May 6 crash.

The rules require market makers to submit bids and within 8 percent of the prevailing price for the largest U.S. stocks. That the prohibition of contributions stub or placeholder applications ranging from pennies to thousands of dollars that were adopted in response to rules that require merchants to keep the bids and offers. Quoted piece led to a "significant proportion" of the nearly 20,800 stores canceled on May 6 when $ 862 billion in shareholder value was wiped briefly in 20 minutes, regulators said.

"The rules will result in the elimination of quotes and citations piece black eye piece were 6 May," said Chris Isaacson, chief operating officer of Bats Global Markets, Kansas City, the currency trader based in Missouri accounting for 10.2 percent of U.S. volume of shares last month. "They were an anachronism. This is a good change for the market."

Stub contributions were used for the first time in the Archipelago Exchange in 2002, when the place joined the Intermarket Trading System, which operated an order routing network that connects the exchanges. SUS requires markets to provide prices on both sides, or both supply and demand, according to Jamie Selway, a managing director of Investment Technology Group Inc. in New York and ArcaEx Chief Economist at the moment. The site began operating as an electronic communications network called in 1997.

Former Regulation

"Heel appointments are an artifact of the old rules," Selway said. "They were never intended to trade." The new rules also establish a buffer of liquidity that will "eliminate the routes clearly wrong that cause stop trade," he said, referring to circuit breakers introduced in June by Standard & Poor's 500 companies and then expanded to the Russell 1000 Index and more than 300 exchange-traded funds.

SUS was dissolved in 2007 when the Securities and Exchange Commission renewed stock trading and forced the New York Stock Exchange to become faster and more automated. NYSE acquired Archipelago Holdings Inc. in 2006 in a deal that made the 214 - year-old, Grand Council of publicly traded companies. NYSE Euronext became a full merger in 2007.

As trade in the first half of the last decade away from dealer markets and to what is known as books to limit, where the liquidity comes from the intermediaries and their clients, some market makers who had requirements citing two sides began the expansion of its margins, or the difference between offers and demands presented to the trade, said Selway. Quoted piece eliminating the need to update several times from one side of the event and made the job easier, "said Selway.

Low rates

The new rules probably will not increase liquidity at the best prices on the market, said Isaacson. By requiring contributions guarantee that liquidity will prevent the problem of avoided transactions that occurred on 06 May, he said.

New York Stock Exchange was the only place I did not cancel that day operations. Designated market makers and the curbs that operated only prevent the exchange of stock prices to plunge into the New York Stock Exchange, often by a break of trading stocks for a few seconds or minutes.

For securities subject to the switches in a single action, market makers now have to place orders by 8 percent of the best selling domestic and place applications that do not exceed 8 percent of the best domestic supply between 9:45 am and 3:35 pm New York time.

Gran Banda

During the first 15 minutes and last 25 minutes of the day, market makers must quote in 20 percent of domestic supply or best offer, or NBBO. If a stock is in the trading program cuts, companies should budget by 30 per cent of the NBBO. Suspension of trading safeguards five minutes if a guarantee of 10 percent moves within a period of five minutes.

"There is a very important stretch for us to add 100 shares to each side of the market for most of the issues," said Jamil Nazarali, a managing director and head of electronic commerce in a market-making subsidiary of Knight Capital Group Inc. Where can be a problem for those companies that do a lot of activities, who call the market makers and leave with a very large budget. Will have to decide if they want to be market makers. "

Nasdaq OMX Group Inc. 's main exchange had 136 market makers in October, more than any other place, but below 143 a year ago and 429 in 2000, the company said. The number dropped by all but one year of this decade as some companies merged or dropped from an increasingly competitive business.

Nasdaq, bats

Market makers in places like the Nasdaq and clubs will be able to use exchange systems to automatically update their quotes to ensure they comply with new requirements and limit the risks that move prices. Exchanges will be updated offers and requests to be within the ranges established in the NBBO. While NYSE Arca ended its program offerings provides 1 cent and car sales double last closing price of the action, is developing a system that allows companies to automatically quote a certain percentage of distance the NBBO, according to an announcement.

Citing requirements could pose risks for some firms in less liquid stocks, said Nazarali, who lives in Jersey City, New Jersey. For these actions, the differential between domestic supply and the best offer can be more than 60 percent of the stock price, he said. To meet the new rules, market makers have to quote within that range, forcing it to buy at higher prices or sell for less than they would prefer, he said.

"It will force a lot of people who want to be market makers to post quotes that are far stricter," said Nazarali.

Read more »

Natural gas rose to its highest price in almost four months

Natural gas rose to its highest price in almost four months after weather forecasts showed a colder than normal in the U.S., boosting demand for heating oil.

Oil advanced as much as 3.5 percent after the National Weather Service cut its temperature forecasts for the eastern states in December 1911 to December 15. Gas prices were trading at the lowest level since 2002 in early December.

"Cold weather is the main driver of gas prices," said Brad Flowers, a trader at Kottke Associates Inc., an energy trading company in Louisville, Kentucky. "It seems that below-normal temperatures will be hanging in most of the month, and this is suffocating and the lifting of the sale of gas from the bottom."

Natural gas for January delivery gained 13.7 cents, or 3.2 percent, to $ 4,486 per million British thermal units at 10:36 am in the New York Mercantile Exchange after climbing to $ 4,503, the price highest intraday since 09 August. Gas has risen 7.3 percent since late November.

Temperatures will be well below normal this week and next in the East and Midwest next week, according to Time Commodity Group LLC in Bethesda, Maryland.

New York will have a minimum of 29 degrees Fahrenheit (minus 2 degrees Celsius) on December 8, 5 degrees below average, according to AccuWeather Inc. in State College, Pennsylvania. Chicago will have a minimum of 12 degrees, 13 degrees below normal.

About 52 percent of U.S. households the use of natural gas for heating, according to the Department of Energy.

Gas Supplies

"The weather is colder than expected," said Kyle Cooper, director of research at IAF Advisors in Houston. "Many people had expectations of a warm December."

gas inventories fell 23 billion cubic feet in the week ended on Nov. 26 to 3,814,000,000,000 cubic feet, the Energy Department reported last week.

The drop in stocks was smaller than the average five-year retirement for the week of 36 billion cubic feet, the data show department. A surplus with the average of five years rose to 10 percent from 9.5 percent the previous week.

"The level of storage is still very high, but this is a market driven for a while," said Cooper.

Read more »

European officials divided over the rescue of the Fund Increase

Germany rejected calls for increased European Union 750 million euros ($ 1 billion) of aid funds or enter joint bond sales, saying its refusal to bear the additional costs to end the debt crisis.

With European finance ministers meeting in Brussels today for their monthly meeting, German Chancellor Angela Merkel has rejected pleas from Belgium and central banks to boost emergency fund to save countries like Portugal and Spain to fall prey speculation.

"At this moment I see no need to expand the fund," Merkel told reporters in Berlin today. She said the EU treaties joint bar sales of bonds, which could require borrowing costs in Germany, the lowest in the euro area.

European political discord pushed down the bonds in Spain and Italy today, reversing gains last week after the purchases made by the European Central Bank briefly eased concerns about the crisis from spreading. The ECB bought the most bonds in a week since June, according to a statement.

The yield on the benchmark 10-year-Spain rose 12 basis points to 5.11 percent as of 3:30 pm in London. Italy yields increased 10 basis points to 4.49 percent. The euro stood for a three-session rally, dipping 0.9 percent to $ 1.3295.

"There is no credibility"

Europe has "no credibility" to eliminate the debt restructuring, Kenneth Rogoff, a professor at Harvard University and former chief economist of the International Monetary Fund chief, said in a Television interview broadcast today. "Greece will be very lucky to avoid restructuring, Ireland, Portugal - only they are in denial, saying it can not happen. I really have not drawn clear lines, they have not really said what I wanted to make choices, they do not actually have done. "

Under pressure to protect taxpayers in the biggest economy in Europe, Merkel is drifting back into his role in the early stages of the crisis, when Germany stood firm against an aid package to Greece.

The political confrontation can mount the ECB, with more of the burden of crisis management, said economists at Citigroup Inc., including Juergen Michels and Michael Saunders in London in a December 03 letter sent by e-mail.

"Finally, the ECB will be forced to increase its contribution to the substantial rescue plan," wrote the economists. "We hope that after another round of tensions in the market, the European fiscal policy will eventually come up with additional measures to combat the crisis."

BCE bond purchases

The central bank based in Frankfurt, said today it will set € 1965000000 purchases of bonds last week. While the figure was the highest in 22 weeks, did not include bonds purchased between December 1 and December 3.

The bank is "active" operating in the government bond market, Governing Council member Athanasios Orphanides said today in Nicosia. The ECB will act as needed, said Orphanides, who heads the central bank of Cyprus.

Greece won a bailout of the EU and the IMF 110 million euros in May, the EU leadership to create the three-year facility was used for the first time in Ireland, with a program of 85 billion euros last month.

ECB President Jean-Claude Trichet, said last week that the EU might need to complete the emergency fund, a position echoed by December 4 Belgian Finance Minister Didier Reynders.

Reynders said the IMF also wants the EU to put more money and increase its quota of 250 million euros. IMF spokesman William Murray declined comment. Managing Director, Dominique Strauss-Kahn will attend the meeting tonight in Brussels.

Quad Call

Governor of Bank of Belgium, Guy Quaden, today called up, told reporters in Brussels: "It depends on the politicians to decide that, but personally I am more in favor."

Belgium, with the third highest debt in the euro area came under a speculative attack last week. Its borrowing costs to 10 years rose as high as 139 basis points above Germany on 30 November, the widest spread in at least 17 years.

Germany also tried to suppress public debate on possible joint bond sales, after Italy announced its support for "E-Bond" proposed by the Luxembourg Prime Minister Jean-Claude Juncker, the chairman of the meeting tonight euros.

Merkel said the European consultations "should be the goal-oriented and conducted internally, because anything else causes renewed anxiety."

In a commentary in the Financial Times, Juncker and Italian Finance Minister Giulio Tremonti called for the creation of titles sold together to cover half the debt of the euro zone governments.

Two-tier bonds

To deal with the German opposition to subsidize weak fiscal, the bonds of countries with high budget deficits could be converted into European bonds at a discount, Juncker and said Tremonti.

Eurobonds are "intellectually attractive," said EU Economic and Monetary Affairs Commissioner Olli Rehn in Brussels. He noted that the "state of the debate" is not in favor of the idea.

Spanish Economy Minister, Elena Salgado, said today proposed Eurobond issuance set is a "possibility to be explored."

Finance ministers of the 16 euro countries will meet at 5 pm today in Brussels to discuss the next steps, including the shape of a permanent framework for crisis resolution to replace the temporary fund when running in 2013.

The meetings in Brussels two days end tomorrow, when ministers from the 27 EU countries give formal approval to Ireland's aid package designed to stabilize the banking system and push down the deficit.

Read more »

falling U.S Stocks

U.S. stocks fell, snapping a three-day meeting over 500 of Standard & Poor's after Federal Reserve chairman, Ben S. Bernanke said the U.S. economy may need more stimulation.

Bank of America had the biggest drop in the Dow Jones Industrial Average after Nomura Holdings Inc. said the lender runs the risk of credit downgrades in 2011. SanDisk Corp., the world's largest maker of flash memory cards, fell by 2.1 percent after ThinkEquity downgraded LLC for the population. Cisco Systems Inc. rose 2.1 percent after Oppenheimer & Co. upgraded the rating of the largest manufacturer of computer networking.

The S & P 500 fell 0.1 percent to 1,223.77 as of 10:30 am in New York. The benchmark for U.S. stocks increased by 3.7 percent in the last three days. The Dow Jones fell 2.23 points, or 0.1 percent down at 11,379.86.

"There is much to worry about," said Bruce McCain, who oversees 25 billion U.S. dollars as chief investment strategist of the private banking unit of KeyCorp in Cleveland. "The question is - what will take us higher from here especially in light of high unemployment in the U.S. and trouble brewing in Europe. There is much skepticism. While you are receiving financial reports and Corporate pretty good, investors are still unsure about whether to adopt a more aggressive or defensive. "

U.S. stocks rose last week, sending benchmark indexes to their biggest gains in a month, amid improved economic data and the efforts made by the European Central Bank to halt the crisis in the region of the debt. The benchmark for U.S. equity rose 20 percent from its low in July 2010 through December 3 as corporate profits and improving the Federal Reserve expanded its asset purchase program to suppress interest rates and fuel the economic recovery.

Just Enlarge

Bernanke said the economy barely expands to a more sustainable pace and that it is possible that the Fed could expand the purchase of bonds beyond the $ 600 billion announced last month to stimulate growth. He defended the Fed's efforts to bolster a recovery so weak that only 39,000 jobs created in November. The unemployment rate last month climbed to 9.8 percent, the highest since April, the Labor Department said the December 3, three days after Bernanke's interview was recorded.

"We're not far from the level at which the economy is not self-sustaining," Bernanke said in an interview broadcast yesterday by the CBS Corp. s "60 Minutes" program. "It's very close to the border. It takes about 2.5 percent growth just to keep unemployment stable and that's what we're getting."

The Dow Jones fell to 0.4 percent on Friday after the Labor Department said U.S. payrolls increased by 39,000 last month, behind the median forecast of economists in a survey of an increase of 150,000 jobs. The unemployment rate rose to 9.8 percent from 9.6 percent.

"Stall speed"

"That's what everyone is dealing with - where we expect a continued sustained recovery, which is still in the stall speed and you're not getting the recovery you want," said William E. Stone, who oversees about $ 105 billion as chief investment strategist at PNC Wealth Management in Philadelphia. "There is also a hangover from the payrolls report. The numbers were bad and you still have to wait for more evidence that things are improving."

European officials expressed disagreement on steps to stem the debt crisis that Germany is opposed to raising 750 million euros ($ 1,000,000,000,000) rescue fund and the introduction of the joint European bonds. Belgian Finance Minister Didier Reynders told reporters on Dec. 4 that the fund could be extended if the ministers decide to introduce a larger facility when the time expires permanently. Luxembourg and Italy today called for joint development of European bonds. Both proposals were rejected today by German Chancellor Angela Merkel.

Banks decline

European banks fell, sending financial shares U.S. lower. Bank of America fell 0.8 percent to $ 11,764, while Regions Financial Corp. fell 2.1 percent to $ 5.95.

Bank of America, Morgan Stanley and Citigroup Inc. are more at risk of being downgraded by credit rating companies in early 2011, Nomura said. The company cited the pace of recovery, the threat that banks will have to re-purchase mortgages to investors, the crisis of European government debt, reducing the balance sheet and regulatory reform.

SanDisk fell 2.1 percent to $ 47.31 after being downgraded to "hold" from "buy" ThinkEquity. The estimated share price of 12 months is $ 48.

Dollar General Corp. fell 7.6 percent to $ 30.89. The discount retailer with 9,000 stores reported more than 25 million shares will be sold by members of senior management and an entity linked to the directors of the Nashville, Tennessee-based company.

Cisco gained 2.1 percent to $ 19.47 after being raised to "overweight" from "market perform" at Oppenheimer. The 12 - share price estimate is $ 23 month.

Read more »

The euro may fall as low as $ 1.2585 against the dollar

The euro may fall as low as $ 1.2585 against the dollar after it failed to break above key resistance zone, Societe Generale SA, said, citing technical indicators.

"The area bound back $ 1.3445/1.3450 euro and the dollar in turn lower, confirming the short-term risk is down," wrote the technical analysts and Manac'h Fabien Hugues Naka in Paris, in a research note today. "A swim back to last week's low at 1.2970 U.S. dollars remains the most likely scenario."

The euro fell 0.9 percent to $ 1.3288 at 2:51 pm in London. It reached $ 1.2969 on 30 November.

"A break below this low and below the $ 1.2920 call back for a dip in the region $ 1.2585/90 before the attempts of the euro-dollar back to the north," they wrote. That compares with the low U.S. $ 1.2588 August 24.

In technical analysis, investors and analysts study charts of trading patterns to predict changes in the security, commodity, currency or index. Support is on purchase orders may be grouped, and resistance is a level where sell orders may be grouped.

Read more »