Archive for April, 2009

Fiat CEO again in U.S. for Chrysler talks: source (Reuters)

Thursday, April 9th, 2009 | Finance News

TURIN (Reuters) –
Fiat (FIA.MI) Chief Executive Sergio Marchionne is again in the United States for talks with potential partner Chrysler (CBS.UL), a source close to the company said on Thursday.

Marchionne "left last night," the source said.

He may have a meeting with Chrysler executives in New York, where an auto show is currently underway.

Fiat and Chrysler are trying to finalize a partnership by the end of April which would help the U.S. car maker avoid bankruptcy.

On Wednesday, Chrysler Vice Chairman Jim Press said his company was working around the clock to complete the deal.

He took a drive in a Fiat 500 small car at the auto show in New York on Wednesday.

The company has been given until the end of this month to complete the deal with Fiat by a U.S. presidential task force.

Marchionne was in the United States for discussions at the beginning of this month.

The framework of the deal is for Fiat to take a stake in Chrysler that would start at 20 percent in return for access to its small-car technology and vehicle platforms.

(Reporting by Gianni Montani, writing by Jo Winterbottom)


European investors await Bank of England (AP)

Thursday, April 9th, 2009 | Finance News

LONDON – European stock markets rose only modestly Thursday despite earlier hefty gains in Asia — which included a near 4 percent rally on Tokyo's Nikkei following details of a new stimulus package — as investors remained cautious ahead of a Bank of England interest rate decision and the long Easter weekend.

The FTSE 100 index of leading British shares was up 24.17 points, or 0.6 percent, at 3,949.69, while Germany's DAX rose 50.44 points, or 1.2 percent, to 4,408.36. France's CAC-40 was 17.28 points, or 0.6 percent, higher at 2,938.34. All three indexes are closed for the Good Friday public holiday, and the FTSE won't actually be reopening until Tuesday.

The main point of interest in European markets will be the Bank of England's rate decision at midday London time (1100 GMT). Though the bank is expected to keep its benchmark rate unchanged at 0.5 percent, investors will be focusing on what the Bank says about its quantitative easing strategy, in which the central bank can buy up to 75 billion pounds of financial assets from commercial banks in the hope that they will use the money to start lending again.

Earlier in Asia, Japan's Nikkei 225 stock average added 321.05 points, or 3.7 percent, to 8,916.06 for its highest close in three months, while Hong Kong's Hang Seng climbed 426.55, or 3 percent, to 14,901.41.

Investors across Asia were buoyed by the news that Japan's ruling party is seeking a stimulus package that is substantially bigger than originally announced, involving 15 trillion yen ($150.4 billion) in new fiscal spending. The measures, should they win final approval, would equal some 3 percent of the country's gross domestic product.

"Markets welcomed the move but it may be some time before this optimism is felt across the broader economy," said Neil Mellor, an analyst at Bank of New York Mellon.

There was also some encouragement offered by the news that Japan's machinery orders — an indicator of how much the country's companies plan to spend — rose in February for the first time in five months. Core private sector machinery orders grew 1.4 percent in February from the previous month to 728.1 billion yen ($7.3 billion), the government said.

In addition, there was upbeat data from China where auto sales hit a monthly record of 1.11 million vehicles in March, exceeding U.S. sales for the third month in a row, as tax cuts and rebates for small car purchases lured buyers back into showrooms. Shanghai's main index closed 32.49 points, or 1.4 percent, higher at 2,379.88.

Despite some losses this week, stocks around the world are still trading much higher than they were just a month ago, amid some tentative optimism that the worst of the global economic downturn may have passed.

However, David Buik, senior strategist at BGC Partners, said there was a lot of potential bad news out there that could fuel a further nasty retreat, especially if corporate earnings come in worse than anticipated.

Next week, he said, could be a testing time for markets, as many U.S. banks are set to post their results, including Citigroup Inc., Goldman Sachs Inc. and JPMorgan Chase & Co.

"Have any of the schemes implemented by the US government started to pay dividends?" said Buik.

The fairly subdued tone in Europe is expected to carry through into New York, when Wall Street opens.

Dow futures were 45 points, or 0.6 percent, higher at 7,838, while the broader Standard & Poor's 500 futures rose 5.3 points, or 0.6 percent, to 827.90.

On Wednesday, insurance and technology shares led Wall Street higher in a volatile day. The Dow Jones industrials rose 47.55, or 0.6 percent, to 7,837.11, while the S&P closed 9.61, or 1.2 percent, higher at 825.16.

Elsewhere in Asia, South Korea's Kospi rose 4.3 percent to 1,316.25. Elsewhere, Australia's benchmark gained 1.4 percent, Taiwan's jumped 4.1 percent and Singapore advanced 2 percent.

Oil prices rose above $51 a barrel Thursday. Benchmark crude for May delivery rose $1.86 to $51.24 a barrel on electronic trading on the New York Mercantile Exchange.

Meanwhile, the dollar edged back up towards the 100 yen mark from 99.72 yen, while the euro rose to $1.3315 from $1.3297.


AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.


U.S. banks holding up, but may still need aid: report (Reuters)

Wednesday, April 8th, 2009 | Finance News

(Reuters) –
The U.S. banking industry seems to be in better shape than many people think, the New York Times said, citing officials involved in federal "stress tests."

However, many of the largest American lenders probably need to be bailed out again, either by private investors or the federal government, the paper said.

After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, the paper cited the officials as saying.

All 19 banks undergoing the exams will pass them, the paper cited the regulators as saying, adding that if the examiners determine that a bank needs "exceptional assistance," the government will provide it.

There is a wide range of results among the institutions, the paper cited several people involved in the process as saying.

Some federal and industry officials told the paper that regulators may use the results to prod reluctant banks to sell assets under the Treasury's bailout program.

The Treasury plans not to reveal stress test results until after earnings season to avoid spooking equity investors, a person familiar with the process told Reuters on Tuesday.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Rupert Winchester)