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Fears over Greece's political and financial crisis

2012-05-16T17:59:49Z

NEW YORK (Reuters) - Stocks fell in a volatile session on Wednesday as news that the European Central Bank had stopped providing liquidity to some Greek banks unnerved investors ahead of the release of minutes from the Federal Reserve later in the day. The Dow Jones industrial average dropped 4.35 points, or 0.03 percent, to 12,627.65. The Standard & Poor's 500 Index dropped 2.07 points, or 0.16 percent, to 1,328.59. The Nasdaq Composite Index dropped 13.53 points, or 0.47 percent, to 2,880.23. (Reporting By Edward Krudy, editing by Dave Zimmerman)

FBI's Mueller confirms JPMorgan preliminary probe

2012-05-16T16:03:08Z

WASHINGTON (Reuters) - FBI Director Robert Mueller on Wednesday confirmed that the agency has opened a "preliminary investigation" into JPMorgan Chase & Co , the nation's largest bank. JPMorgan disclosed last week that it had suffered a multibillion-dollar trading loss due to a failed hedging strategy. A person familiar with the matter said on Tuesday that the FBI's New York office has opened a preliminary probe into the loss, which has been estimated at more than $2 billion. Mueller was testifying before the Senate Judiciary Committee. ...

Exclusive: ECB stops operations with some Greek banks

2012-05-16T17:52:16Z

BERLIN/FRANKFURT (Reuters) - The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday, confirming news earlier reported exclusively by Reuters. The news sent the euro lower against the dollar, fanning concerns among investors and in Greece that the country may have to leave the euro zone. ...

AIG to sell AIA shares after lock-up ends in September

2012-05-16T15:50:30Z

(Reuters) - Bailed-out insurer American International Group Inc will sell its shares in Asian insurer AIA Group Ltd after a lock-up period expires in early September, Chief Executive Bob Benmosche said on Wednesday. Benmosche said the shares "will be liquidated after September 4," according to a transcript of AIG's annual shareholder meeting on its website. He said the sale would help decrease volatility in AIG's earnings. AIG spun off two-thirds of AIA in 2010 as part of a package of asset sales to repay its $182 billion U.S. government rescue. ...

Housing, industrial data point to steady growth

2012-05-16T16:03:59Z

WASHINGTON (Reuters) - Groundbreaking for U.S. homes rebounded in April and factory activity gained steam, suggesting a moderate pick up in economic growth early in the second quarter. The reports on Wednesday were the latest in a series to dampen fears that the recovery in the world's largest economy was stagnating after tepid job growth last month. The Commerce Department said housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units. In a separate report, the Federal Reserve said production at the nation's mines, factories and utilities rose 1. ...

Apple readies iPhone with bigger screen: sources

2012-05-16T16:40:32Z

TOKYO (Reuters) - Apple Inc plans to use a larger screen on the next-generation iPhone and has begun to place orders for the new displays from suppliers in South Korea and Japan, people familiar with the situation said on Wednesday. The new iPhone screens will measure 4 inches from corner to corner, one source said. That would represent a roughly 30 percent increase in viewing area, assuming Apple keeps other dimensions proportional. Apple has used a 3.5-inch screen since introducing the iPhone in 2007. ...

Facebook boosts IPO size by 25 percent, could top $16 billion

2012-05-16T14:42:30Z

NEW YORK/SAN FRANCISCO (Reuters) - Facebook Inc increased the size of its initial public offering by almost 25 percent, and could raise as much as $16 billion as strong investor demand for a share of the No.1 social network trumps debate about its long-term potential to make money. Facebook, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, said on Wednesday it will add about 84 million shares to its IPO, floating about 421 million shares in an offering expected to be priced on Thursday. ...

Shareholders sue JPMorgan Chase over trading loss

2012-05-16T14:28:33Z

NEW YORK (Reuters) - JPMorgan Chase & Co was the target of two separate lawsuits by shareholders on Wednesday, accusing the bank and its management of excessive risk that led to trading losses of at least $2 billion. A spokesman for JPMorgan Chase declined to comment on the lawsuits, which were filed in U.S. District Court in Manhattan, days after Chief Executive Jamie Dimon's May 10 statement that a "failed hedging strategy" caused the massive loss over the last month. ...

GE Capital gets OK to resume dividend to parent

2012-05-16T13:57:33Z

(Reuters) - General Electric Co's finance arm won regulatory approval on Wednesday to resume returning some of its profit to the parent company, a move that came earlier than some analysts had expected and could clear the way for GE to speed up stock buybacks and raise its shareholder dividend. GE Capital plans to pay a $4.5 billion special dividend to the largest U.S. conglomerate later this year, which investors described as a sign that its regulator, the Federal Reserve, has confidence in the unit's financial position. ...

Analysis: Key to Universal-EMI decision: Has music business lost control?

2012-05-16T14:54:20Z

WASHINGTON (Reuters) - On the face of it, Universal Music Group's bid to buy a big chunk of EMI stands to make the world's leading music company an even more formidable force, combining Universal's star lineup of Lady Gaga and Rihanna with the British company's deep library of The Beatles, Pink Floyd and Katy Perry. Certainly the fierce opposition from rival Warner Music Group, consumer groups and independent music companies makes it seem that way. They have all vowed to fight it tooth and nail, telling U.S. ...

Euro crisis leaves door open for more BoE easing

2012-05-16T14:59:04Z

LONDON (Reuters) - The escalating danger from the neighboring euro zone debt crisis prompted the Bank of England on Wednesday to keep alive the prospect of more help for an ailing British economy it said was growing more slowly than expected. At a news conference after unveiling the bank's latest economic forecasts, Governor Mervyn King also took aim at the euro zone, which is struggling to contain a renewed risk of Greece falling out of the currency bloc. "The euro area is tearing itself apart without any obvious solution," he said. ...

FBI probes JPMorgan, shareholders back Dimon

2012-05-16T16:37:10Z

TAMPA, Florida (Reuters) - The FBI has opened an inquiry into the multibillion-dollar trading losses at JPMorgan Chase, stepping up pressure on the bank after key U.S. agencies said they were looking into high-risk trades that first drew regulators' attention last month. The news did little to spook investors, who sent the stock higher Tuesday, or shareholders, who backed embattled Chief Executive Jamie Dimon at the bank's annual shareholders meeting, with a vote rejecting a proposal to split the jobs of CEO and chairman. ...

Swatch eyes single or double digit sales growth

2012-05-16T12:49:13Z

BIENNE, Switzerland (Reuters) - Swatch Group , the world's biggest watchmaker, is expecting high single or double-digit sales growth this year as demand from China and for middle and lower-price products holds up in the face of global economic uncertainty. "We are trying to beat the 8 billion Swiss franc ($8.51 billion) mark this year, which would translate into another record year", Swatch Chief Executive Nick Hayek told reporters on the sidelines of the company's annual general meeting on Wednesday. The company had sales of 7.14 billion francs last year. ...

Saudis, soaring costs may keep oil above $100

2012-05-16T14:57:55Z

LONDON (Reuters) - Oil industry executives and bankers are assuming oil prices will stay above $100 a barrel in the year ahead, despite mounting economic worries, as any fall below that level would trigger a cut in Saudi Arabia's output and force closures at high-cost projects around the world. A straw poll by Reuters of oil executives, traders, bankers and fund managers showed seven respondents predicting Brent crude trading at $100-$120 a barrel in the next 12 months. Four respondents saw prices at $120-$140 and only four at $80-$100. ...

Industrial output in April rises most in over a year

2012-05-16T13:28:25Z

WASHINGTON (Reuters) - Industrial production posted its fastest growth in over a year in April, boosted by surging output at utilities and a rebound in manufacturing, the Federal Reserve said on Wednesday. Industrial output grew 1.1 percent last month, the most since December 2010 and nearly twice the pace expected by analysts polled by Reuters. The Fed also revised its estimates for prior months, saying production contracted 0.6 percent in March and expanded 0.4 percent in February. The Fed previously said production was flat in February and March. In April, manufacturing output rose 0. ...

Housing starts add to recovery signs

2012-05-16T13:06:42Z

WASHINGTON (Reuters) - A rebound in groundbreaking for homes in April suggested the housing market recovery was gaining some traction, even though permits for future building fell. The Commerce Department said housing starts increased 2.6 percent to a seasonally adjusted annual rate of 717,000 units. March's starts were revised up to a 699,000-unit pace from a previously reported 654,000 unit rate. Economists polled by Reuters had forecast housing starts rising to 680,000-unit rate. Compared to April last year, residential construction was up 29.9 percent. ...

Mortgage refinancing applications jump; rates fall: MBA

2012-05-16T11:05:00Z

NEW YORK (Reuters) - Applications for U.S. home mortgages surged last week, driven by increased demand for refinancing as interest rates hit fresh lows, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 9.2 percent in the week ended May 11. The MBA's seasonally adjusted index of refinancing applications spiked up 13.0 percent. But the gauge of loan requests for home purchases slipped 2.4 percent. ...

Analysis: Seaway helps bridge record oil gap, but analysts far apart

2012-05-16T12:21:39Z

HOUSTON/NEW YORK (Reuters) - Just ahead of the Seaway oil pipeline restarting in reverse to clear a bottleneck of crude in the U.S. Midwest, Wall Street analysts have rarely been more divided over the outlook for one of the hottest oil market bets in years triggered by the glut. For some like Goldman Sachs, the reversal of Seaway's flow set for Thursday is a seminal moment, marking the first major pipeline to ship oil directly from the Midwestern trading and storage hub at Cushing, Oklahoma, to Houston in the country's main refining center on the Gulf Coast. ...

GM to drop Facebook ads due to low consumer impact

2012-05-16T10:51:22Z

DETROIT/SAN FRANCISCO (Reuters) - General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public, with a source familiar with the matter saying the automaker had decided Facebook's ads had little impact on consumers. The decision by GM, the third-largest advertiser in the United States, marks the first highly visible crack in Facebook's strategy and underscores doubts about whether advertising on Facebook works better than traditional media. ...

BHP warns commodity markets to cool further

2012-05-16T08:09:32Z

SYDNEY (Reuters) - BHP Billiton said it expects commodity markets to cool further and that investors have lost confidence in the longer-term health of the global economy, in the most cautious comments yet from the world's biggest miner. BHP also put the brakes on a plan announced by Chief Executive Marius Kloppers in 2011 to spend $80 billion over five years to expand its iron ore, coal, energy and base metals divisions, banking on continuing high demand from its main market, China. "It is all about appropriate allocation of capital. ...

U.S. stocks trim gains, euro flat on ECB talk

2012-05-16T17:40:16Z

NEW YORK (Reuters) - U.S. stocks gained on Wednesday on encouraging U.S. housing and industrial production data but the euro faltered and government debt pared losses as uncertainty over Greece's future in the euro zone kept investors on the defensive. The European Central Bank has stopped funding operations for some Greek banks, euro zone central bank sources told Reuters, adding to concerns that Greece's financial difficulties could wreak havoc in Europe and elsewhere. The ECB declined to comment. ...

Obama has assets in JPMorgan accounts: White House

2012-05-15T23:23:08Z

WASHINGTON (Reuters) - President Barack Obama has $500,001 to $1 million in a JPMorgan Chase private client asset management checking account, according to financial disclosures released by the White House on Tuesday. Obama said this week that JPMorgan was "one of the best managed banks there is" despite its $2 billion trading loss being investigated by the Securities and Exchange Commission. "This is a checking account used by the president and the first lady," said White House spokeswoman Amy Brundage. ...

EADS hit by Airbus A380 wing cracks charge

2012-05-16T06:42:10Z

PARIS (Reuters) - Airbus parent EADS took a charge of 158 million euros for the cost of overcoming wing cracks on the A380 superjumbo as it posted better-than-expected first-quarter results on Wednesday buoyed by resilient aircraft and helicopter demand. The move, following 105 million euros ($134 million) covered by an existing warranty provision, reflects efforts by Europe's leading aerospace group to draw a line under the episode in balance sheet terms but leaves Airbus facing a potential drag on operating profit for the next two years. ...

Foreclosed Americans find way back to homeownership

2012-05-16T13:59:15Z

NEW YORK (Reuters) - When Jennifer Anderson's family could no longer afford their mortgage and lost their home, she expected many years to pass before they would again become property owners. But less than two years later, in March, they purchased a $297,000 house outside Phoenix, Arizona, after qualifying for a loan backed by the U.S. government. They joined a small but growing number of Americans who are making a surprisingly quick return to homeownership after defaulting on their loans or being forced into short sales that cost their banks money. ...

S&P 500 in third straight drop, J.C. Penney off late

2012-05-15T21:26:21Z

NEW YORK (Reuters) - Stocks fell for the eighth day in the past 10 on Tuesday as uncertainty stemming from the political stalemate in Greece gave investors another reason to be cautious and sellers came out in force late in the session. The S&P 500 fell for the third straight session as attempts to form a government in Greece fell apart, raising the possibility of a rejection of the bailout terms spelled out by the European Union for the fiscally troubled nation. ...

Analysis: Euro twilight zone beckons for Greece

2012-05-16T05:48:15Z

LONDON (Reuters) - Speculation about an endgame in Greece's protracted crisis has flooded markets with euro exit scenarios this week, but investors reckon there's still every chance that uncertainty will simply drag on for months. Seeking clear-cut outcomes to the euro saga to date has proven fruitless for investors, who have instead been forced to live with the "muddle through" of European politics. ...

Berkshire adds GM, Viacom positions in first quarter

2012-05-15T21:34:05Z

(Reuters) - Berkshire Hathaway added new positions in automaker General Motors and media conglomerate Viacom in the first quarter and cut its stake in chipmaker Intel by 33 percent, the conglomerate said in a quarterly holdings statement on Tuesday. Berkshire also boosted its position in Wal-Mart Stores by 20 percent in the first quarter, just before news broke of a bribery scandal involving the company's Mexican unit. The ice-cream-to-insurance conglomerate is the retailer's fifth-largest shareholder. ...

Chesapeake hikes loan as credit rating fades

2012-05-15T23:29:18Z

(Reuters) - Chesapeake Energy Corp increased a planned loan even as its credit rating deteriorated on Tuesday, adding pressure on the natural gas producer to deliver crucial asset sales. The company, which has sought to soothe investors angered by recent disclosures about its chief executive's potential conflicts of interest, boosted a planned $3 billion bridge loan to $4 billion. There was strong demand for the junk-rated debt that it needs to cover a cash shortfall brought on by the weakest natural gas prices in a decade. Shares in Chesapeake slumped fell 5. ...

Credit Suisse slates more New York layoffs

2012-05-15T23:39:35Z

(Reuters) - Credit Suisse Group plans to fire 126 employees in the New York area, according to a notification the bank sent to New York State's Department of Labor on Tuesday. The layoffs, which will extend through August 6, follow the elimination of jobs of 109 people in New York earlier this year. The filing did not disclose the level of seniority nor the business areas in which the layoffs at its Credit Suisse Securities (USA) unit will occur. A bank spokesman in New York declined to comment. ...

Repsol sues Argentina over giant YPF seizure

2012-05-15T22:59:27Z

MADRID/NEW YORK (Reuters) - Repsol YPF SA , the large Spanish oil and gas company, on Tuesday sued Argentina for seizing control of formerly state-owned energy company YPF SA , in which Repsol held a majority stake. The lawsuit, filed in the U.S. District Court in Manhattan, is part of Repsol's effort to recover more than $10 billion from Argentina over the seizure in a case that could drag on in arbitration and the courts for years. Argentina also faces tens of billions of dollars of other U.S. litigation, largely tied to its sovereign debt default one decade ago. ...

Dollar continues to rally on fears about Greece

2012-05-16T18:17:59Z

Worries that Greece will drop out of the euro currency union continued to push the dollar higher against most other currencies Wednesday.

Dutch lawmaker to try to nix bailout fund in court

2012-05-16T18:17:29Z

Dutch lawmaker Geert Wilders says he will file a lawsuit to block the Netherlands from ratifying the permanent European bailout fund.

Anger, drama at Ratko Mladic's genocide trial

2012-05-16T18:12:59Z

Ratko Mladic was a shadow of the swaggering general who once "held Sarajevo in the palm of his hand" during Bosnia's 1992-95 war as his long-awaited genocide trial opened Wednesday. Yet he still managed to inflame Bosnia's festering war wounds with the flick of his hand.

Skechers agrees to $40M settlement over shoe ads

2012-05-16T18:08:42Z

The government wants you to know that simply sporting a pair of Skechers' fitness shoes is not going to get you Kim Kardashian's curves or Brooke Burke's toned tush.

Fed: Several members could support further easing

2012-05-16T18:02:40Z

Federal Reserve policymakers are open to further efforts to stimulate the U.S. economy if growth falters or threats escalate.

Greece gets caretaker PM until next vote in June

2012-05-16T17:59:31Z

A senior judge was sworn in Wednesday to head Greece's caretaker government for a month as it lurches through a political crisis that threatens its membership in the 17-nation eurozone.

Business events scheduled for Thursday

2012-05-16T17:39:35Z

Major business events and economic events scheduled for Thursday:

Target's 1Q profits up 1.2 percent

2012-05-16T17:24:23Z

Target Corp. raised its profit outlook Wednesday after reporting better-than-expected first-quarter results that were boosted by increased spending on food and cheap chic fashions.

Court official to be appointed Greek interim PM

2012-05-16T17:07:56Z

Greece appointed a senior judge Wednesday to head a caretaker government for a month as it lurches through a political crisis that threatens its membership in the euro.

Google strives to enlighten with new search tool

2012-05-16T17:04:26Z

Google is introducing a new tool, designed to make its search engine smarter.