Bharti Faces Hurdle on Zain Nigeria in $10.7 Billion Purchase

Bharti Airtel Ltd.’s plan to buy most of the African assets of Kuwait’s Zain for $10.7 billion may face challenges even before it begins its due diligence.

India’s largest wireless company’s plan can’t include Zain’s Celtel Nigeria B.V. unit until an ownership dispute with Econet Wireless Holdings Ltd. on that business is resolved, Econet Chief Executive Officer Strive Masiyiwa said.

“Zain Nigeria is not for sale,” Masiyiwa said in an interview in Johannesburg today.

For Bharti, troubles in Nigeria, Africa’s most-populous nation and the continent’s fastest-growing telecommunications market, may be an indication of what it might be up against in the 15 countries where it’s seeking to take over Zain’s operations. Kuwait’s Mobile Telecommunications Co., or Zain, and Bharti said in statements today that they will hold exclusive talks until March 25 on the assets.

“If there are 15 companies in which you are taking a stake, then there are going to be 15 different complexities,” said Jigar Shah, senior vice president of Kim Eng Securities Pvt. in Mumbai. “It’s doubtful that a company like Bharti hasn’t foreseen this.”

Bharti fell as much as 9.6 percent in Mumbai trading, the most since Oct. 6. Zain shares were suspended from trading in Kuwait. They last traded on Feb. 11 when they advanced 3.9 percent to 1,080 Kuwaiti dinars. The stock has soared 23 percent in the last week, giving the company a market value of 4.64 billion Kuwaiti dinars ($16 billion). link....

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Stocks slide, but Dow holds 10,000

Stocks dipped Tuesday as a stronger dollar and some disappointment about DuPont and Coca-Cola's results gave investors a reason to retreat from the recent rally.

A weaker-than-expected housing market report added to the downward pressure.

The Dow Jones industrial average (INDU) lost 50 points, or 0.5%, according to early tallies, after ending the previous session at the highest finish since Oct. 3, 2008.

The S&P 500 (SPX) index lost 7 points, or 0.6%, after ending Monday's session at the highest point since Oct. 2, 2008. The Nasdaq composite (COMP) fell 13 points, or 0.6%, after ending the previous session at the highest point since Sept. 26, 2008.

After the close, Yahoo (YHOO, Fortune 500) reported higher quarterly earnings that beat forecasts on weaker revenue that also beat forecasts.

Also after the close, Sun Microsystems (SUN, Fortune 500) said it was cutting 3,000 jobs related to its purchase by Oracle (ORCL, Fortune 500).

Tuesday brought quarterly results from five Dow components: DuPont, Pfizer, Coca-Cola, Caterpillar and United Technologies. Apple and Texas Instruments were among the names who reported after the closing bell Monday.

Stocks gained Monday, with the Dow reclaiming 10,000 in response to a weak dollar, higher commodity prices and some earnings optimism. But the path higher over the last week has been choppy as investors have sifted through a mix of profit reports. That choppiness put pressure on stocks Tuesday. link....

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Obama to nominate Ben Bernanke for second Federal Reserve term

Bernanke has brought the US economy 'back from the brink', Obama will say. Photograph: Larry Downing/Reuters

US Federal Reserve chairman Ben Bernanke will be nominated for a second term by Barack Obama later today.

The move was welcomed by analysts who said it would provide stability at a critical time for the economy, ending any lingering concerns about who will lead America's central bank.

Obama will interrupt his holiday in Martha's Vineyard, Massachusetts, to make the announcement with Bernanke at his side at 9am local time (2pm BST).

"Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall," the US president will say. "Taken together, all of these steps have brought our economy back from the brink. They are steps that are working."

Bernanke's appointment to a new four-year term must be confirmed by the Senate, which is controlled by Obama's Democrats. An expert on the Great Depression, he has lowered US interest rates to near zero and pumped hundreds of billions of dollars into the economy to lift it out of its deepest downturn since the 1930s. The recession now appears close to an end, but economic recovery is fragile, with unemployment and home foreclosures still rising.

"It's very smart; it will be encouraging for the market," said Jim Awad of Zephyr Management in New York. "He's viewed very positively – he saved us from depression and the economy is recovering. The White House has been shrewd in reappointing him to retain confidence in the recovery of the economy and financial markets."

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Yen Falls as Recovering Global Economy Boosts Demand for Yield

The yen weakened for a third day against the euro as improving economic data and central bank comments that the global recession is abating spurred investors to buy higher-yielding assets.

The Japanese currency declined the most versus the South Korean won and Australian dollar as stocks extended a rally after Federal Reserve Chairman Ben S. Bernanke said last week chances for near-term growth “appear good.” The euro rose against 12 of the 16 most-traded currencies before a report that economists said will show European industrial orders fell at a slower pace.

“We’ll see a continuation of the risk rally and that’s consistent with yen weakness,” said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London, the biggest foreign exchange trader. “The economic data has been sufficiently strong to persuade even the more bearish in the market.”

The yen weakened to 135.72 per euro as of 8:43 a.m. in London from 135.21 in New York on Aug. 21. It earlier declined to 136.09 per euro, the weakest level since Aug. 14. The Japanese currency also dropped to 94.89 per dollar from 94.38. The dollar appreciated to $1.4301 per euro from $1.4326.

The MSCI World Index of shares rose 0.7 percent, its fifth straight gain, as every stock market in Europe opened higher, sending the region’s Dow Jones STOXX Index up 0.6 percent. The Standard & Poor’s 500 Index gained 2.2 percent last week, touching a 10-month high, as a report showed sales of existing U.S. homes climbed.

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Geithner: 2008 bailout not aimed at Goldman -WSJ

U.S. Treasury Secretary Timothy Geithner on Friday denied that emergency government action taken last year to shore up the U.S banking system was tailored to the interests of Goldman Sachs (GS.N) or any other firm.

"We have been forced to do just extraordinary things and, frankly, offensive things to help save the economy," Geithner said in an interview with The Wall Street Journal and Digg, an online site where users share and rate articles.

"I am completely confident that none of those decisions ... had anything to do with the specific interest of any individual firm, much less Goldman Sachs," he said.

The U.S. Congress, acting on the urgent advice of then Treasury Secretary Henry Paulson, a former Goldman Sachs chief executive, last year put up $700 billion to prevent the banking system from collapsing amid a global credit crisis

The Treasury, under Paulson, and the Federal Reserve also crafted a massive bailout of insurer American International Group (AIG.N), that enabled it to pay counterparties, including Goldman, billions of dollars that might otherwise have been lost.

Geithner, who was president of the Federal Reserve Bank of New York during the crisis and therefore close to all of decisions that were taken, said government had a duty to act in the face of such a grave threat in order to prevent an even worse outcome.

"The basic imperative...in a crisis like this (is) to protect people who are innocent of the mistakes that brought us to this place," he said in the interview. link....

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Economy Is 'Leveling Out,' Bernanke Says

Chairman Ben S. Bernanke rendered his most positive assessment of the economy yet in a speech Friday and gave credit in part to his own institution's handling of the worst economic crisis in decades.

The U.S. and global economy "appear to be leveling out," Bernanke told an audience of some of the world's leading economists and central bankers, and "prospects for a return to growth in the near term appear good." He warned, however, that the recovery is "likely to be relatively slow at first," with unemployment declining only gradually.

The idea that the economy is starting to improve was bolstered Friday by a report that sales of existing homes soared 7.2 percent in July to the highest level in two years. Bernanke's comments and the housing news sent Standard & Poor's 500-stock index up 1.9 percent to a new high this year.

But the meat of Bernanke's speech was not about the stabilizing economy, but rather an extensive defense of the Fed's handling of the financial crisis and recession. It is part of a broader effort to shore up confidence in the central bank, which has come under fire in Congress and in public opinion polls for its role in various bailouts.

And it comes as speculation heats up over whether President Obama will reappoint the chairman when his term expires Jan. 31.

"History is full of examples in which the policy responses to financial crises have been slow and inadequate," Bernanke said at the annual symposium sponsored by the Kansas City Fed. By contrast, in the current crisis "policymakers in the United States and around the globe responded with speed and force to arrest a rapidly deteriorating and dangerous situation." link.....

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Clothing makers beat estimates, but outlooks mixed

Phillips-Van Heusen Corp (PVH.N), Gymboree Corp (GYMB.O) and Hot Topic Inc (HOTT.O) posted better-than-expected quarterly results on Wednesday but gave disappointing outlooks, sending shares of the clothing manufacturer and retailers down in after-hours trade.

But shares of Limited Brands Inc (LTD.N) rose 1 percent after the operator of the Victoria's Secret and Bath & Body Works chains forecast a full-year profit range that was better than analysts were expecting.

At Limited Brands, adjusted earnings of 19 cents in the second quarter beat the 16 cents expected, on average, by Wall Street. Net income fell 27 percent to $74.3 million.

Earlier on Wednesday, Perry Ellis International (PERY.O), known for its men's clothes, reported a narrower-than-expected loss and forecast full-year profit above Wall Street estimates, sending shares up 17 percent to $10.45.

Phillips-Van Heusen, a manufacturer that owns the Calvin Klein brand, said its adjusted profit was 60 cents per share, above the 44 cents analysts expected, according to Reuters Estimates. The company cited cost cuts, tightened inventory and strength in its wholesale and retail sportswear businesses.

The company raised its earnings forecast for the full year to a range of $2.30 to $2.40 per share from a prior view of $2.05 to $2.30 per share.

Still, the new range did not reflect an equal gain from the strong second-quarter performance, suggesting that the company was being somewhat conservative in its projections, said Wedbush Morgan analyst Jeff Mintz.

The company's shares fell 1 percent to $34.85 after hours.

At Hot Topic, which sells rock n' roll-inspired apparel, accessories and music, a quarterly net loss per share was a penny better than expectations, while a third-quarter earnings outlook fell just below Wall Street's view. Shares fell 2.2 percent after hours.

Wall Street Strategies analyst Brian Sozzi wrote that Hot Topic faced difficult comparisons with the prior year on margins and same-store sales in light of last year's launch of clothes tied to the successful "Twilight" series. link.....

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OIL FUTURES:Crude Settles +3.7% As Equities Rise

Crude oil futures prices rose 3.7% Tuesday, led by a rebound in U.S. equities prices.

Light, sweet crude oil for September delivery on the New York Mercantile Exchange settled $2.44 higher at $69.19 a barrel. The rise was the biggest since July 31. ICE North Sea Brent crude oil for October delivery settled up 2.6%, or $1.83, at $72.37 a barrel.

The recovery in share prices provided the spark for the turnaround in crude, which had fallen 5.3% over the previous two days to its lowest settlement since July 29.

"The two-day downswing resulted in some oversold conditions and risk-taking is coming back in the market in the form of higher commodity and equity prices," said Adam Klopfenstein, senior market strategist at Lind-Waldock.

September crude, which expires at Thursday's settlement, traded to a high of $69.58 a barrel, coming just short of settling above its 10-day moving average, which would be a clear technical sign pointing to still further gains.

"Closes above the 10-day moving average crossing at $69.75 are needed to confirm that a short-term top has been posted," said Tony Rosado, a broker at GA Global Markets.

The October contract, which will become the spot contract Friday, is attracting more trading volume, and settled at $71.09 a barrel, up 3.3%, or $2.28.

Following Tuesday's settlement, the American Petroleum Institute reported a surprise steep 6.134 million-barrel drop in crude oil stocks, while a rise was expected. September crude jumped 89 cents from the settlement, to $70.08 a barrel, the highest intra-day level since Friday.

The API also said gasoline stocks fell 847,000 barrels and distillate stocks rose by 1.529 million barrels. Refiners lifted operations relative to capacity by 0.9 percentage point, the API said.

The market will look for confirmation of the API data when the Energy Department's Energy Information Administration releases its weekly data at 10:30 a.m. EDT on Wednesday.

With September crude near its expiry, October crude challenge resistsance near $72.25 a barrel if the EIA confirms the decline in crude, Rosado said.

Analysts surveyed by Dow Jones Newswires expect that data for the week ended Aug. 14 will show crude stocks rose by 1.5 million barrels, amid a slim 0.2 percentage-point rise in refinery operations relative to capacity. Gasoline stocks are expected to show a drop of 800,000 barrels, while distillate stocks (heating oil/diesel) are expected to rise by 500,000 barrels.

September RBOB gasoline futures traded to a high of $2.0150 a gallon, and settled at $2.0002 a gallon, up 4.87 cents, or 2.5%, the biggest single-day gain since Aug. 3 and its highest level since Aug. 12. The contract ended just below its 10-day moving average of $2.0076 a gallon, which would have confirmed that a near-term floor had been put in place, Rosado said. link......?

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UBS to Give 4,450 Names to U.S.

Swiss bank UBS AG will hand over some 4,450 names of U.S. account holders as part of a U.S.-Swiss tax-evasion settlement and investigation that could produce a total 10,000 account identities.UBS and the governments of the U.S. and Switzerland agreed on a final settlement last week, but the details weren't made public until Wednesday. UBS isn't expected to pay a monetary fine as part of the settlement.

Separately, the Swiss government said it is exiting its six-billion Swiss franc ($6.46 billion) investment in the bank, made as part of a rescue package the height of the financial crisis. It was lining up investors to buy its 332 million shares late Wednesday, and the sale was expected to be completed soon.

No details on the sale price were given. The government needs to sell the shares at around 13 francs each to break even on its investment, bankers say. The announcement came well after stock markets had closed. UBS shares shed 0.9% to 16.90 francs in Zurich.

As part of the tax settlement, U.S. tax authorities will file a treaty request with the Swiss government to obtain the data on the American UBS clients, IRS Commissioner Doug Shulman said on a conference call with reporters. The Swiss government will then direct UBS to turn over the account data to the IRS, the agency said.

Mr. Shulman said the legal agreement allowed the IRS to obtain substantially all the information it was interested in. link.....

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Los Angeles toy importer settles federal safety claims

A Los Angeles firm agreed to pay $31,500 to settle allegations that it imported and sold toys that were hazardous to young children, the Consumer Product Safety Commission said.

TGH International Trading Inc. brought more than 11,000 toys into the U.S. from March 2005 to June 2006 that contained small parts that presented a choking hazard to children. Many of the hazardous toys were seized at the Port of Long Beach by federal officials before they could reach store shelves, the agency said, and those that did reach stores were recalled.

The Consumer Product Safety Commission said Monday that it wasn't aware of any incidents or injuries involving toys that were distributed.

TGH refused to comment on the settlement. But in agreeing to pay the $31,500 civil penalty, the company denied that it had violated federal law.

This not the company's first run-in with the commission.

In 2003, TGH was cited for delivering about 50,000 hazardous children's toys -- a violation that took place from 1994 to 2002. In the same 2003 notice, the company was cited for delivering about 59,000 baby rattles that posed a choking hazard. link.....

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Collision Probe Encounters More Trouble as Agencies Feud

A public squabble between federal accident investigators and the national air-traffic controllers union escalated Monday, threatening to complicate the probe of the fatal midair collision between a sightseeing helicopter and a small plane over the Hudson River along Manhattan.

The National Transportation Safety Board, which is in charge of the high-profile investigation, took the unusual step of kicking all controllers off the industry-government group gathering facts about what led to the Aug. 8 crash. Nine people died in the accident.The move was prompted by a Friday news conference and subsequent public statements in which leaders of the controllers' union repeatedly challenged the accuracy of the safety board's chronology of events, which was released last week.

Though the NTSB now seemingly agrees with some of the arguments made by the union representing the controllers -- and changed its account Monday on one important point -- the head of the safety board nonetheless criticized controllers for going public with their complaints.

The dispute focuses on whether a controller at the Teterboro, N.J., airport -- who has been suspended and faces disciplinary action for engaging in a personal conversation at the time of the crash -- had information soon enough to have helped the pilot of the single-engine propeller plane avoid a potential traffic conflict with the sightseeing helicopter.

A supervisor in the Teterboro tower also has been suspended and faces discipline for failing to be at his post when the crash happened.

The safety board reiterated Monday that the controller began the personal call on an official Federal Aviation Administration phone shortly after the plane took off from Teterboro, stayed on it for nearly three minutes, and failed to alert the plane's pilot about a number of aircraft that posed potential hazards in his path.

According to the board's statement Monday, the controller, who hasn't been identified, couldn't see the helicopter on his radar scope until he was in the process of switching the plane's pilot to another frequency used by other controllers. The Teterboro controller continued the phone call until a second before the collision, according to the preliminary timeline. In the interim, a controller from another facility called the Teterboro to warn about a potential collision unless the plane was ordered to change course. The plane's pilot apparently never heard the warning.

On Friday, the safety board said the helicopter was one of the aircraft that initially showed up on the Teterboro controller's radar screen. Under the union's version of events, which the board initially disputed, the Teterboro controller couldn't have alerted the plane's pilot about the helicopter because of the lag in radar coverage.

The board's revised chronology indicates that the helicopter first popped up on Teterboro's radar about 47 seconds prior to the accident. The Teterboro controller made two unsuccessful efforts to reach the plane's pilot. link......

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U.S. Economy: Sales Unexpectedly Fall on Job Losses

Sales at U.S. retailers unexpectedly fell in July, raising the risk that a lack of consumer spending will temper a recovery from the worst recession since the 1930s.

Purchases decreased 0.1 percent, the first drop in three months, as shrinking demand at department stores such as Macy’s Inc. and Wal-Mart Stores Inc. overshadowed a boost from the cash-for-clunkers automobile incentive program, Commerce Department figures showed today in Washington.

A separate government report today showed more Americans than forecast filed claims for unemployment insurance last week, underscoring the threat to spending from the continued deterioration in the job market. Treasury securities jumped and the dollar fell after the reports, and some economists lowered estimates for growth this quarter.

“Until we start seeing job growth, consumers are still going to be very cautious,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, which accurately forecast the drop in purchases excluding automobiles. “It’s premature to talk about the sustainability of a recovery,” he said, until there’s “follow-through on the demand side.”

The gain in Treasuries sent the yield on the benchmark 10- year note down to 3.60 percent at 5:15 p.m. in New York from 3.72 percent late yesterday. The dollar dropped against the Japanese currency to 95.48 yen from 96.07 yesterday. Stocks rose, with the Standard & Poor’s 500 Index increasing 0.7 percent to a 10-month high of 1,012.73.

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Beantown showdown: JetBlue and Southwest face off

NEW YORK -- The cool kids of the airline industry are giving big-city travelers more opportunities to show who they like more.

FILE - In this July 19, 2005 file photo, a JetBlue Airbus flies over a pair of Southwest Airlines' jets from Bob Hope Airport in Burbank, Calif., bound for New York's JFK airport. After years of following similar game plans to lure passengers with fares that are a cut below and customer service that's a cut above, JetBlue and Southwest are going head-to-head in major Northeast markets.

For years, JetBlue and Southwest catered to customers in the same way - with cheap fares and good customer service - but avoided much head-to-head competition in major markets. These days, they are trying to distinguish themselves as they ramp-up competition in places like New York, Washington, Baltimore - and starting this weekend, Boston.

Fliers stand to benefit as these airlines expand in the Northeast. This rivalry not only pits one popular low-cost carrier against another; it puts further pressure on other airlines to stay competitive with them.

It also means JetBlue and Southwest must find ways to differentiate themselves. Southwest is touting its fewer baggage fees and more extensive nationwide presence, while JetBlue is highlighting its live TV service and its own comprehensive route system.

Just over a month after Southwest began flying out of New York's LaGuardia - eight miles from JetBlue's base at John F. Kennedy International - Southwest begins service on Sunday from Boston's Logan International Airport. In September, Southwest starts service between Boston and Baltimore.

A few years back, their flights mostly crossed paths in places like Burbank, Calif., and Orlando, Fla.

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Porsche buy launches VW drive for world domination

BERLIN — Volkswagen's triumphant bid to take over luxury German carmaker Porsche marks the end of a bitter family power struggle and the start of a drive to become the world's top auto manufacturer.

"VW and Porsche are entering a new era -- the company has the means to become number one," pipping Japan's Toyota by 2018, chief executive Martin Winterkorn said Friday at company headquarters in Wolfsburg, northern Germany.

Volkswagen, already Europe's biggest automaker, and Porsche, maker of the legendary 911 sports car, agreed to a tie-up late Thursday after nearly four years of brinkmanship and infighting.

The full acquisition, which will also entail the Gulf state of Qatar taking a stake in Porsche and which VW estimates will produce three billion euros (four billion dollars) in synergies, should be complete by 2011.

It closes an ugly chapter in the history of Germany's illustrious auto sector that began in late 2005, when two of the industry's biggest names crossed swords in a duel for control of the empire.

In the beginning, it was Porsche that sought to buy VW in a bid to drive down the average carbon dioxide emissions of its fleet before new European anti-pollution legislation comes into effect in 2012.

VW's efficient Polo and Skoda models were to offset Porsche's greenhouse-gas-spewing muscle cars.

Porsche, which already uses VW assembly lines, also aimed to protect its powerful but insular partner against potential foreign investors.

The Stuttgart-based manufacturer tried to acquire 75 percent of the shares in VW but the attempt backfired in May against the backdrop of the financial crisis, which hit the auto market hard and produced a crippling credit crunch. link.....

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Drops in Consumer Confidence, Prices Temper Recovery Hopes

According to the monthly Reuters/University of Michigan Surveys of Consumers, released Friday, the index of consumer confidence fell from 66 points in July to 63.2 in August. The decline itself is less meaningful than the fact that economists expected consumer confidence to rise in August. This means the experts underestimated the pessimism of American consumers, which helped send the stock market down Friday.

"Consumers are facing three major hurdles," Art Hogan, chief market strategist at Jefferies & Co., said in an interview. "They are paying down their debt, their houses are not worth as much as they were two years ago and they're staring down the barrel of 10 percent unemployment."

As a result, Hogan said he expects the five-month stock market rally to "hit a bumpy patch."

Also on Friday, the Labor Department reported that July consumer prices remained stable compared with June but plunged 2.1 percent from July 2008.

Friday's tough consumer news followed a surprise drop in July retail sales and a record jump in home foreclosures reported earlier this week. At the same time, Hong Kong emerged from a yearlong recession on Friday, joining Germany and France, whose economies grew modestly in the second quarter.

Taken together, the week's economic data suggest that a global recovery will be staggered and sluggish in getting off the ground. Consumers -- the engine of the U.S. economy -- are catching few breaks.

Long-term price drops stoke fears of deflation -- the opposite of inflation and a warning sign of a contracting economy. Plunging prices typically go hand in hand with declining wages, creating the sort of persistent misery seen during the Great Depression. link.....

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Asian Shares End Higher On Fed; Commodity Plays Gain

Asian markets ended higher Thursday after the U.S. Federal Reserve indicated the worst was over for the U.S. economy, with resource stocks especially strong on higher metal and crude-oil prices.

Indian stocks rallied as investor sentiment remained high after an unexpectedly strong industrial output in June. India's index for industrial production expanded 7.8% from a year earlier in June, after a 2.2% increase in May.

Japanese, Chinese and Hong Kong stocks ended higher, but put on less than they lost Wednesday, with some analysts unsure the day's advance could be sustained.

Although some people think the U.S. economy is stabilizing, "what makes the market nervous is that it's already risen to high levels and there is still a chance for the Fed to change its monetary policy," said Linus Yip, strategist at First Shanghai Securities.

Japan's Nikkei Stock Average of 225 companies gained 0.8% to 10,517.19, China's Shanghai Composite rose 0.9% a day after it slumped 4.7%, and Hong Kong's Hang Seng Index advanced 2.1%, less than Wednesday's 3.0% decline.

India's Sensex rose 3.1% to 15,488.59 in the afternoon, still cheering the 7.8% on-year jump in June industrial output reported Wednesday.

Australia's S&P/ASX 200 ended up 2.1%, New Zealand's NZX 50 added 1.6%, South Korea's Kospi slipped 0.1% and Taiwan's Taiex rose 2.0%. Singapore's Straits Times closed up 1.7%, with Indonesia's main index ended 2.1% higher, Thailand's SET Index was 1.3% higher and Philippine shares were up 1.0%.

UBS analysts noted in a report that Asian markets, excluding Japan, had outperformed the MSCI World index by 37% in the last six months. But they added that although regional fundamentals still looked good, "from a liquidity perspective, a period where Asia performs relatively less well compared to the rest of the world would seem plausible."

U.S. futures were pointing toward another higher opening after Wednesday's gains on Wall Street, with Dow Jones Industrial Average futures up 81 points in screen trade recently.

Commodity plays powered ahead across the region on higher London Metal Exchange base metal prices and anticipation of higher oil prices.

Yunnan Copper jumped by the daily limit of 10% in Shenzhen, with Jiangxi Copper up 8.6% in Shanghai and 3.9% in Hong Kong. Pacific Metals rose 4.1% in Tokyo, Santos was up 3.3% and Alumina gained 3.1% in Sydney, while in Mumbai trading, Tata Steel and Hindalco Industries were both up 3.1%. link.....

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GM predicts 230 MPG for Volt

General Motors Co. predicted Tuesday that its Chevrolet Volt rechargeable electric car will get 230 miles per gallon of gas in city driving.

If confirmed by the U.S. Environmental Protection Agency, which tests for mileage figures posted on new car stickers, the Volt would be the first car to exceed triple-digit gas mileage, a GM official said.

Toyota’s Prius, the most efficient car now sold in the U.S., gets 48 miles per gallon.

The Volt is powered by an electric motor and battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a range of up to of 300 miles. The battery pack can be recharged from a standard home outlet.

The downside is that the Volt is expected to cost nearly $40,000, nearly double the sticker price of some economy hybrids.

The Volt is scheduled to appear in showrooms in late 2010. link.....

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Oil Little Is Changed as OPEC Signals Satisfaction With Prices

Crude oil traded little changed as OPEC’s president said he was content with current prices, signaling the group may keep quotas unchanged when it meets next month.

Crude prices around $70 are “not bad” and are necessary to maintain investment, OPEC President Botelho de Vasconcelos told reporters in Angola yesterday. The Organization of Petroleum Exporting Countries, responsible for 40 percent of global supplies, is due to review production targets at a meeting on Sept. 9.

Crude oil for September delivery traded for $70.96 a barrel, 3 cents higher, in after-hours electronic trading on the New York Mercantile Exchange as of 8:51 a.m. London time. It earlier fell as much as 71 cents, or 1 percent, to $70.22 a barrel.

“OPEC should definitely be satisfied with the current prices, given that they have doubled this year,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “Also, the kind of crude inventory levels we have now would be consistent with prices lower than $70 a barrel.”

Oil reached a five-week intraday high of $72.84 a barrel on Aug. 7, and then declined 1.4 percent to $70.93 a barrel, its lowest settlement in a week, as the dollar climbed and gasoline futures dropped the most in seven sessions.

“Oil’s looking a little bit vulnerable to some more downside in the first couple of days this week,” said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. The dollar’s rally “really undermines a lot of these commodities including oil,” he said.

Weak Demand

New York oil futures gained 87 percent in the past six months as rising equity markets buoyed investor confidence, and the falling U.S. dollar made commodities more attractive. Prices reached an eight-month high of $73.38 a barrel on June 30.

Brent crude oil for September settlement traded for $73.98 a barrel, 39 cents higher on London’s ICE Futures Europe exchange as of 8:50 a.m. local time.

Weak demand through late summer and the “massive overhang of stockpiles” in the U.S. may also limit any price gains from storms and hurricanes in the Gulf of Mexico, Hassall said.

U.S. gasoline demand usually peaks June through August. Refiners there cut production in the three weeks ended July 31. Gasoline stockpiles at that date were 2.9 percent higher than a year earlier, while distillate stocks were 24 percent higher. link....

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Rio Tinto shares drop on China spy allegations

Shares in global miner Rio Tinto Ltd fell more than 3 percent on Monday after China stepped up its spying allegations against the company, although Australia's Foreign Ministry said the latest accusations were nothing new.

China's state secrets agency said on its website at the weekend that Rio Tinto had spied on Chinese steel mills for six years, resulting in the mills overpaying $102 billion for iron ore, Rio Tinto's biggest earner.

Rio Tinto declined to comment on the accusations, which followed China's detention a month ago of four Rio employees in Shanghai, including Australian Stern Hu, on suspicion of stealing state secrets.

The company said last month its employees had done nothing wrong. The men remain in detention and have yet to be charged.

"The allegations referred to on the National Secrets Protection Bureau Web site are not new," a spokeswoman for Australian Foreign Minister Stephen Smith said in a statement.

"The government has always said the Stern Hu case was complex and involved serious allegations. The government has urged the Chinese authorities to deal with his case expeditiously," the spokeswoman said, adding Australia would continue to make representations to Chinese authorities over Hu's case. link....

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U.S. Cuts Fewer Jobs Than Forecast

The U.S. unemployment rate fell in July for the first time in 15 months as employers cut far fewer jobs than expected, giving the clearest indication yet that the economy was turning around from a deep recession.

U.S. employers shed 247,000 jobs in July, the Labour Department said on Friday, the least in any month since last August, taking the unemployment rate down to 9.4 percent from June's 9.5 percent.

"It suggests the recession will be ending before the end of the year. There isn't any part of the economy that hasn't shown some slowing in deterioration," said Joe Davis, chief economist at investment company Vanguard in Valley Forge, Pennsylvania.

Recent data ranging from home sales to manufacturing have pointed to an economy starting to dig itself out of one of the worst recessions since the Great Depression of the 1930s.

President Barack Obama, who has seen his standing in public opinion polls slip as Americans fret about the weak economy and high unemployment, said July's jobs report showed the worst "may be behind us." But he cautioned there would be no true recovery as long as the economy continued to shed jobs.

U.S. stocks rallied on the data as investors took the view that the recession was ending. The Dow Jones industrial average ended up 1.2 percent at 9,370.07. The dollar surged, while government bond prices tumbled.

Analysts had expected nonfarm payrolls to fall by 320,000 in July and the jobless rate to hit 9.6 percent. The forecast was made earlier this week before other jobs data, including weekly jobless claims, prompted some analysts to lower their predictions for job losses.

The government revised data for May and June to show 43,000 fewer jobs were lost than previously reported.

"Overall, we view it as a clear signal that the economy was emerging from the recession in July," said Dean Maki, a senior economist at Barclays Capital in New York.

The easing in the unemployment rate could have been the result of the labour force shrinking by 422,000 in July, far more than the 155,000 decline in June, suggesting some jobless workers may have given up looking for work. link....

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