Archive for November, 2010

Retailers hope Cyber Monday sustains shopping

Monday, November 29th, 2010 | Finance News

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NEW YORK/SAN FRANCISCO (Reuters) – Retailers from Amazon.com Inc to Target Corp offered steep online discounts to shoppers on Cyber Monday, aiming to win additional sales after a strong start to the holiday shopping season over the weekend.

Shares of Amazon rose as much as 2.6 percent to an all-time high of $181.84, while smaller rival Overstock.com surged 8.1 percent and Web jeweler Blue Nile gained 5.3 percent on indications of strong traffic to retail sites.

The Monday after the U.S. Thanksgiving holiday was dubbed Cyber Monday five years ago to get consumers to focus on online shopping. But retailers have been increasingly offering online deals on Thanksgiving Day and over the holiday weekend as well.

"I would expect Cyber Monday to be as strong as sales were this weekend," said Maggie Taylor, a senior credit officer with Moody's Investors Service.

Despite competition from other days over the Thanksgiving weekend, Cyber Monday is still a big draw and could generate $900 million to $1 billion in sales, according to Jefferies analyst Youssef Squali.

Last year, Cyber Monday sales were $887 million, according to analytics firm comScore, which plans to release Cyber Monday data on Wednesday. Total 2009 U.S. online sales were $130 billion.

EBay Inc's PayPal unit reported a 21 percent rise in total payment volume on Cyber Monday over last year as of 11 am PST. It said that data point, which measures the total value of goods sold, was 34 percent higher on Cyber Monday than on Black Friday of this year.

Meanwhile, IBM Coremetrics reported that online sales as of 12:00 pm PST rose 15 percent year over year.

"The data does suggest that consumers are spending more time online this year with their spending plans, which would bode well for Amazon," analyst Hamed Khorsand of BWS Financial wrote in a note to investors.

Amazon.com deals included a TomTom portable GPS navigator for $89.99, a discount of 61 percent, a Canon flash memory Camcorder for $229 after a 40 percent discount and Barbie Fashion Fairytale Palace at $64.99 instead of $114.99.

Walmart.com did not indicate how much it had marked down items, but offered a Playstation 3 video game console bundle for $388 and a Philips 22-inch LCD HDTV for $209, among other deals.

For a graph on historical Web sales over the Thanksgiving weekend, click here: http://r.reuters.com/fuc67q.

WHO WAITED FOR MONDAY?

Consumers headed to stores as well as to their computers this Thanksgiving weekend, with online sales from Thursday through Sunday up 14.4 percent versus the same period last year, according to IBM Coremetrics.

Caris & Co analyst Sandeep Aggarwal said that was encouraging for e-commerce, which in recent years has outperformed brick-and-mortar retail but can still be hit by cautious consumer spending.

"Increasing online traffic, continuation of accelerated adoption of e-commerce and some improvement in average order size are the key highlights of this year's holiday season," Aggarwal wrote in a note to investors.

He said Amazon, eBay and GSI Commerce, which helps retailers sell online, stood to benefit.

Blue Nile Inc Chief Executive Diane Irvine said Cyber Monday was a bigger selling day for the online diamond seller than Black Friday, the day after Thanksgiving when retailers hope sales will turn bottom lines to black from red. She said Blue Nile's online traffic rose 20 percent.

But she added, Blue Nile's biggest selling day is December 20 -- just five days before Christmas when consumers hustle to place orders.

ComScore found that online spending on Thanksgiving Day rose 28 percent from a year ago to $407 million. The company expects overall online sales for November and December to rise 11 percent to $32.4 billion, compared with the same time last year.

The National Retail Federation said about 33.6 percent of those who shopped during the 4-day holiday weekend bought goods online, up 15 percent from the same time last year. The group estimated that of the $365.34 consumers spent on average, about 33 percent went to online businesses compared with 30.2 percent last year.

A survey by America's Research Group showed that 18.1 percent of those polled said they would buy online on Monday, compared with 25 percent a year ago.

That may be because many consumers shopped over the weekend, the group's president, Britt Beemer, said.

Traditional retailers with websites are competing more fiercely for online sales. Some are drawing consumers to their stores via online purchases. For example, Best Buy and Wal-Mart allow shoppers to buy online and pick up those purchases in stores.

Wal-Mart, the world's largest retailer, is also going head-to-head with Amazon by offering free delivery of certain merchandise during the holidays.

(Editing by Michele Gershberg, Matthew Lewis and Richard Chang)

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Wall Street slips as euro concerns linger

Monday, November 29th, 2010 | Finance News

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NEW YORK (Reuters) – Stocks edged down in a low-volume session on Monday on worries Europe's credit crisis will spread despite a weekend agreement to bail out Ireland.

But stocks finished well off their lows of the day as the dollar retraced some of its earlier gains and energy and financial stocks rallied late in the session.

While stocks tracked movements in the euro on Monday, a strong U.S. jobs report on Friday could bring the focus back to the economy and break the strong tie between U.S. equities and the euro.

The correlation between the euro and stocks has become more pronounced in recent weeks as the euro zone's debt problems resurfaced, with traders selling the euro and stocks together.

"Tell me what the euro's going to do and I'll tell you where the (stock) market is going to go," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

Banks and energy stocks outperformed the wider market as crude oil futures rose 2.3 percent and banks recovered some of their recent losses.

The KBW bank index rose 1 percent, helped by Bank of America (BAC.N) , which climbed 1.5 percent to $11.31, while Exxon Mobil (XOM.N) reversed earlier losses to close up 0.3 percent at $69.45

Light volume added to volatility, and traders turned their attention to technical markers in the absence of more fundamental news. The S&P 500 bounced off its 50-day moving average, preserving the lower end of its recent trading range.

In the wake of a stronger-than-expected start to the holiday shopping season, investors took profits on a two-week rally in retail stocks. The S&P retail index (.RLX) fell 0.7 percent.

The Dow Jones industrial average (.DJI) dropped 39.51 points, or 0.36 percent, to 11,052.49. The Standard & Poor's 500 Index (.SPX) fell 1.64 points, or 0.14 percent, to 1,187.76. The Nasdaq Composite Index (.IXIC) lost 9.34 points, or 0.37 percent, to 2,525.22.

European Union finance ministers endorsed an 85 billion euro loan package to help Ireland bridge its deficit, but investors worried how the 16-nation bloc might handle a wider crisis involving Spain and Portugal.

The CBOE Volatility index (.VIX), known as Wall Street's fear gauge, rose 3 percent to hit its highest level since early October, indicating anxiety among investors was increasing.

The 22-day correlation coefficient between the euro and the popularly traded E-Mini S&P futures has risen to 0.54, which shows a meaningful relationship between the two assets compared with an insignificant 0.06 correlation two weeks ago.

The problems in Europe overshadowed signs of improving sentiment among consumers heading into the high-spend holiday season.

The number of shoppers in stores over the long U.S. Thanksgiving holiday weekend rose 8.7 percent compared with 2009, according to a private survey.

Online retailer Amazon.com Inc (AMZN.O) rose 1.3 percent to end at $179.49 after hitting a record high $181.84 on expectations of solid sales on "Cyber Monday," a day of steep discounts for online shoppers.

FedEx Corp (FDX.N) added 4.7 percent to $91.59 after Credit Suisse raised its rating on the package shipping company.

(Reporting by Edward Krudy; Editing by Kenneth Barry)

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PM faces anger over ‘selling Ireland down the river’

Monday, November 29th, 2010 | Finance News

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DUBLIN (AFP) – Outraged Irish opposition politicians and commentators lambasted Prime Minister Brian Cowen for agreeing to the terms of an EU-IMF rescue deal they slammed as a "sell-out".

Cowen insisted the 85-billion-euro (113-billion-dollar) bailout was the "best deal available" for Ireland, helping to shore up its banks and allowing his government to operate without imposing further tax rises or spending cuts.

But the main opposition Fine Gael party called the agreement "appalling", insisting the 5.8 percent annual interest rate on the loan -- higher than that paid by Greece when it was bailed out in April -- was unaffordable.

"This is a hugely disappointing result for the country. It's hard to imagine how this deal could have been much worse," said Fine Gael finance spokesman Michael Noonan.

"People are right to feel frightened, and worried about the future, when our own government has sold out the country on such lousy terms."

Opposition parties have demanded Cowen quit over his handling of the crisis in the former Celtic Tiger economy, but he insists he will not call an election until early next year, after lawmakers pass a forthcoming budget.

The budget to be presented on December 7 will outline cost-cutting measures for the first year of a four-year plan to save 15 billion euros. Cowen says the austerity plan is a pre-condition to the bailout.

The draconian measures sparked mass protests in Dublin on Saturday and many people digesting the news of the bailout in the Irish capital on Monday were clearly angry.

"It's a farce," said Deirdre, a stay-at-home mother, arguing that the deal had been "rushed through" and agreed at "extortionate lending rates".

A man in his 40s, Enda McMullen, told AFP: "The final act of our government is to shaft its own people. Thanks guys."

Labour Party leader Eamon Gilmore denounced the deal struck Sunday with the European Union and the International Monetary Fund as "a national sell-out".

"This is a sad and sorry day for our country and the direct result of Fianna Fail (Cowen's party) mismanagement and irresponsibility," he added.

Gerry Adams, whose nationalist Sinn Fein party won a fifth parliamentary seat in a by-election last week at the expense of Cowen's party, also called the rescue package a "terrible deal".

He added that plans to raid the National Pension Reserve Fund to pay for Ireland's 17.5-billion-euro contribution to the loan were a "disaster".

Irish newspapers rounded on the bailout Monday, with the Irish Daily Mail saying the country had been "sold down the swanny".

"It is pure fantasy to think the Irish people can afford to pay this bill. The taxpayer is being saddled with all the pain, while the bondholders get off scot-free. It is scandal, pure scandal," said the Irish Sun.

However, the Irish Times said the bailout agreement was "a difficult but essential deal", and the Irish Independent said: "We will face years of hardship but it is well to know the worst."

The governor of the Central Bank of Ireland, Patrick Honohan, has defended the package, saying it sets out a clear economic and financial path for Ireland and insisting the interest rate was realistic.

"People are not trying to scalp you. OK, they are not charging the cheapest interest rates that are ever found but they are trying to ensure that the economy comes back to strength again," he told RTE state radio.

Anglo Irish Bank -- one of those rescued by the state -- will wind down its loan book over a number of years and will agree a revised restructuring plan by January, the central bank said separately in a statement Monday.

Tourism Minister Mary Hanafin said the rate was lower than Ireland would pay if it borrowed on the financial markets, where sliding investor confidence has sent the cost of Irish government bonds soaring in recent weeks.

The bailout was intended to stop the crisis over Ireland's debt spreading to other heavily-indebted eurozone countries such as Portugal and Spain, but those hopes faltered Monday when the euro slumped to a fresh two-month low.

Fine Gael enterprise spokesman Richard Bruton warned: "If Europe sets a cliff too steep for Ireland to scale, it won't solve its own problems no more than Ireland's."

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