Archive for December, 2009

U.S. loans to boost nuclear industry seen soon (Reuters)

Monday, December 28th, 2009 | Finance News

WASHINGTON (Reuters) –
The Obama administration is poised to announce loan guarantees to help kick-start the country's nuclear power industry, which hasn't built a new plant in more than three decades.

Congress authorized $18.5 billion for nuclear loan guarantees in 2005, hoping to revive development of the carbon-free source of energy. Investments in nuclear power has dried up on soaring costs following the 1979 accident at Three Mile Island.

But earlier this year, the U.S. Energy Department signaled it was keen to aid the industry and narrowed the list of those likely to receive loan guarantees to four: Southern Co, Constellation Energy, NRG Energy and SCANA Corp.

"When DOE issues their first loan guarantee, that's going to send an important signal to private-sector financing, and Wall Street in particular," said John Keeley, a spokesman for the Nuclear Energy Institute.

Southern, which wants to build two reactors at the Vogtle plant in Georgia, is expected to be awarded the first loan guarantee.

Energy Department officials would not give a specific date on when the details will be announced but said they were committed to restarting the nuclear industry.

"We are on track to announce the first loan guarantee soon," said Stephanie Mueller, a department spokeswoman.

The money allotted would probably support construction of about two to three plants. A nuclear power plant can cost $6 billion to $7 billion to build, according to industry estimates.

Even after receiving a guarantee, the companies would still have to complete the licensing process and secure private financing before construction begins.

Barring major delays, actual construction of a plant would not start before 2011, with the first new plant coming on line around 2017 or 2018, according to the nuclear institute.

The nuclear trade group has called for $100 billion in additional loan guarantees for low carbon energy sources to help support replacing aging reactors and to help reduce greenhouse gas emissions.

U.S. utilities that hope to build new reactors will have to overcome rising construction costs, uncertain cost recovery from customers and lower power demand caused by the recession.

Critics of nuclear power say the projects are too expensive and too risky to receive billions of taxpayer dollars. Environmentalists also raise concerns about the disposal of nuclear waste.

(Additional reporting by Eileen O'Grady in Houston and Tim Gardner in Washington; Editing by Christian Wiessner)

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Asian shares up on econ outlook, dollar hovers (Reuters)

Monday, December 28th, 2009 | Finance News

SINGAPORE (Reuters) –
Japanese shares hit a four-month high, leading gains in Asian stocks on growing investor optimism about the global economy, while the U.S. dollar held firm against the yen and euro.

Signs of a recovery in the United States also lifted oil prices to a four-week high.

European stock index futures pointed to a higher open, as stocks track gains in Asia and in commodities, with futures for the DJ Euro Stoxx, for Germany's DAX and for France's CAC were up 0.9-1.1 percent.

The MSCI index of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) rose just over 0.7 percent in thin trade as markets in Australia and New Zealand remained shut for holidays.

The Thomson Reuters index of Asia ex-Japan equities was up 0.6 percent (.TRXFLDAXPU).

The MSCI index has rallied 65 percent this year, driven by waves of foreign capital inflows trying to cash in on Asia's faster-than-expected economic recovery.

By contrast, the Dow Jones industrial average (.DJI) has risen 20 percent while the FTSEurofirst 300 index (.FTEU3) of leading European shares has gained almost 25 percent.

Chinese stocks led gains, with the Shanghai Composite Index (.SSEC) jumping 1.7 percent, lifted by Premier Wen Jiabao's comments on Sunday that Beijing was committed to seeing through its stimulus package to help cement the economic recovery.

The Shanghai index has gained 5 percent after falling to a seven-week low on Tuesday.

"Wen's comments ... gave the market the impression that China's loose money policy will not change at least for the first quarter of next year," said a senior dealer at a big Chinese stockbroker.

"In addition, both the economy and corporate earnings are improving. Investors feel assured of a decent stock market performance at least early next year."

NIKKEI AT FOUR-MONTH HIGH

Japan's Nikkei average (.N225) rose 1 percent to its highest in four months on data showing factory output rising for the ninth straight month in November and on stable currency moves.

"The industrial output data was stronger than what the market had expected and that's reinforcing the positive sentiment. The stable dollar/yen moves are also making it easier to pick up exporter shares," said Tsuyoshi Segawa, equity strategist at Mizuho Securities.

Japan's industrial output rose a more-than-expected 2.6 percent in November, the strongest gain in six months as rising exports to Asia bode well for a recovering economy.

That followed upbeat U.S. data on Thursday which showed a drop in initial jobless claims and growth in durable goods orders.

Meanwhile, Japanese government bond futures slid, taking in stride the government's announcement late last week that it plans to issue a record 144.3 trillion yen in treasury debt in the next fiscal year.

U.S. and European markets were shut on Friday for Christmas

after closing at their highest in over a year on Thursday.

The dollar hovered near 91.50 yen, little changed from Thursday's close and was below a two-month high of 91.88 yen set last week as investors covered short dollar positions before the year-end.

The euro edged up to $1.4390, off its 3- month low of 1.4216 hit last week.

The euro is down 4 percent against the dollar so far this month and on course for its biggest monthly fall since January, dented by concerns about sovereign ratings after a third ratings agency downgraded Greece's debt.

U.S. crude oil for February delivery gained 0.8 percent to $78.68 a barrel, highest since December 1 supported also by large declines in U.S. crude inventories.

Gold prices gained up 0.9 percent to $1,113.45 in thin trade.

(Additional reporting by Lu Jianxin in SHANGHAI; Editing by Jan Dahinten)

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U.S. retail holiday sales up 3.6 percent: report (Reuters)

Sunday, December 27th, 2009 | Finance News

MONTREAL (Reuters) –
U.S. retailers posted a better performance during the 2009 holiday shopping season, with sales as tracked by MasterCard Advisors unit SpendingPulse up 3.6 percent.

SpendingPulse figures exclude gasoline and automobile sales. They reflect activity that SpendingPulse tracks in the MasterCard payments networks as well as estimates for other payment forms such as cash and checks.

The increase was fueled by a 15.5 percent surge in online purchases as well as a modest recovery in areas such as luxury spending and women's apparel as tracked by SpendingPulse. In 2008, retailers posted a drop in sales, their worst holiday performance in decades, after a global financial markets crisis.

SpendingPulse has been tracking holiday spending figures since 2002, for the period from November 1 until Christmas Eve.

"Last year the economy and consumer spending were in free fall. This year we're talking about an environment that has stabilized, that has seen a leveling off," said Kamalesh Rao, director of economic research at Spending Pulse.

The spike in online spending stems from greater consumer comfort with e-commerce, as well as from snowstorms that hit the East Coast and the Midwest in the final week before Christmas, stranding many shoppers at home. Online retail sales account for about 5 percent of overall sales.

But Rao cautioned that the return of retail spending was "tentative" and still far below 2007 levels.

Holiday sales can account for between 25 percent and 40 percent of annual sales for many retailers. The National Retail Federation has forecast a 1 percent decline in holiday sales this year.

Luxury sales, which include sales at high end department stores such as Saks Inc (SKS.N) and Nordstrom, (JWN.N) recovered after a bloodbath in 2008, edging up 0.8 percent.

Jewelry sales shot up 5.6 percent and gathered steam in the final days before Christmas, Rao said, aided in part by Wall Street bonuses this year and the stock market's rally in 2009.

"Luxury and jewelry are very sensitive to what's happening in the financial markets," Rao said.

Sales at specialty electronics chains such as Best Buy Co Inc (BBY.N) rose 5.9 percent, in part because of pent up demand after sales fell sharply in 2008, Rao said.

Men's apparel sales rose 3.9 percent, while women's clothing sales edged down 0.3 percent, though sales picked up in December.

Sales at specialty apparel retailers such as Gap Inc (GPS.N) and Abercrombie & Fitch Co (ANF.N) stabilized after 2008's disastrous holiday season, when sales fell by one-fifth. This year, sales edged down 0.4 percent, but showed signs of life after Black Friday this year, rising 2.3 percent between the last Friday in November and December 24.

(Reporting by Phil Wahba; Editing by Valerie Lee)

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