Asian shares rise as earnings eyed

TOKYO (Reuters) - Asian shares rose on Wednesday as investors resumed buying after taking profits from a sharp rally at the start of the year while warily bracing for corporate earnings season to kick off in full force.
European shares were seen following Asia's lead with a modest rise, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open as much as 0.3 percent higher. U.S. stock futures suggested a firmer Wall Street start with a 0.1 percent gain.
The yen's rebound as part of broader market position adjustments was also short-lived, with the dollar erasing earlier losses to rise 0.5 percent to 87.48 yen on sustained expectations of further monetary easing in Japan.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent. Hong Kong shares were among the top gainers with a 0.5 percent climb, bouncing from their lowest in a week as Chinese banks were supported by a brokerage upgrade. Shanghai shares rose 0.3 percent.
"We are running into chart resistance now, so investors are looking to rotate into laggards. There is no need to be too bearish right now, at least in the first quarter," said Hong Hao, Bank of Communication International Securities' chief strategist.
Australian shares ended up 0.4 percent to break a three-day losing streak.
Alcoa Inc, the largest aluminium producer in the U.S., with customers in a wide range of industries, launched the U.S. earnings season on Tuesday. It reported a fourth-quarter profit of $242 million, in line with Wall Street expectations.
U.S. corporate profits are expected to be higher than the third quarter's lacklustre results, but analysts' estimates are down sharply from where they were in October.
Credit Suisse said in a research note that Asian equity market price indices may start to catch up with earnings estimates which had been outperforming market prices, suggesting further upside scope for Asian share prices.
The consensus earnings forecast so far is flat in January, following virtually flat revisions in December, it said.
"It was the persistent EPS downgrades that led to the gap between equity market price indices and EPS. These flat revisions could act as a catalyst for equity market price indices to converge with EPS," Credit Suisse said.
Data flows were light with Australian retail sales surprisingly fell 0.1 percent in November from October, against forecasts for a 0.3 percent rise on the month, sending the Australian dollar down to session lows of $1.0486 from $1.0517 before the data was released.
China will release its December trade data on Thursday, which includes initial estimates for metals imports and exports.
U.S. crude and Brent both eased 0.1 percent to $93.03 a barrel and $111.86 respectively.
"What we're seeing in the oil markets is the cautious sentiment playing up ahead of some key economic events this week," said Ker Chung Yang, senior investment analyst at Phillips Futures Pte in Singapore.
YEN STAYS WEAK
Japan's benchmark Nikkei stock average erased earlier losses to end 0.7 percent higher, bolstered by the yen's resumed weakness. The dollar had risen about 12 percent over the past two months against the yen, contributing to the Nikkei's 22 percent jump in the same period.
Expectations of much bolder monetary easing from the Bank of Japan to help Tokyo beat deflation under new Japanese Prime Minister Shinzo Abe have encouraged investors to sell the yen.
But as trading resumed from year-end holidays, analysts and traders said markets were ripe for position adjustments.
"After a good run in risk assets since December, we entered in a phase of consolidation which is moving from Japanese equities to short JPY positions," said Sebastien Galy, FX strategist at Societe Generale in New York, in a note, adding that the dollar could consolidate to 85 yen but must first take out the first Fibonacci retracement at 85.75 yen.
Yen crosses which had been bought the most, including the yen/Korean won, are the most exposed to the correction.
"Such a washout in JPY crosses is the opportunity many long-term investors will be waiting for to continue their switch into strategic short yen positions," he said.
The dollar earlier on Wednesday fell as low as 86.825 yen, having scaled its highest since July 2010 at 88.48 on Friday. The euro also added 0.2 percent to 114.475 yen, off the day lows of 113.55. The euro last week hit 115.995 yen, its highest since July 2011.
The Bank of Japan will consider easing monetary policy again at its January 21-22 meeting, by likely boosting buying of government bonds and treasury discount bills, while considering a doubling of its inflation target to 2 percent.
The euro held steady against the dollar at $1.3086, ahead of Thursday's European Central Bank policy meeting and Spanish and Italian bond auctions toward the end of the week.
Sentiment turned cautious in Asian credit markets, with the spread on the iTraxx Asia ex-Japan investment-grade index widening slightly by 1 basis point.

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UK stocks stage recovery on positive U.S. earnings

* FTSE 100 up 0.4 percent
* Miners gain after Alcoa says sees brighter 2013
* Lloyds Banking shines after UBS upgrade
* J Sainsbury drops after trading update
LONDON, Jan 9 (Reuters) - Britain's top shares rose on
Wednesday, boosted by banking stocks and miners as a reassuring
start to the U.S. earnings season boosted investors' appetite
for riskier assets.
The FTSE 100 was up 24.33 points, or 0.4 percent, at
6,077.96 by 0907 GMT, resuming a rally that took it to its
highest closing level since early February 2011 on Friday,
having slipped on Monday and Tuesday of this week.
Miners gained as investors welcomed news that
Alcoa, the largest aluminium producer in the United
States, posted in-line fourth-quarter earnings after the Wall
Street close on Tuesday and offered a positive outlook for 2013.
But it kept a cautious tone as worries linger over a looming
U.S. budget confrontation.
"The comments from Alcoa... put people more into a risk-on
perspective. But if you wanted to buy (the market) on the Alcoa
results it's probably tempting fate somewhat because it's (just)
one set of results," Andy Ash, head of sales at Monument
Securities, said.
"I think a lot of what we are seeing is new year flows, so
retail (investors) putting money into equity funds ...- and you
don't want to fight against that. But that tends to run out in
the third week of January which coincides with (when the
reporting season gets under way in earnest)."
Banks led blue chips higher, with Lloyds
Banking Group the best performer, up 3.3 percent as
traders cited the impact of a UBS upgrade to "buy" from
"neutral" with an increased target price of 60 pence.
"Lloyds' investment strategy is simplest of the UK domestic
banks. The story is defined with the group focused on
execution," UBS said in a note.
"We think Lloyds will deliver rising margins, falling costs
and falling provisions, which will provide a very strong upswing
to profitability and EPS momentum over the next few years."
J Sainsbury suffered early falls, off 2.5 percent
and relinquishing the previous session's advance as it issued a
trading update which prompted Seymour Pierce to cut its rating
on the stock to "reduce".
Britain's No. 3 supermarket met forecasts for underlying
sales in the Christmas quarter, though growth did slow from its
first half in a highly competitive festive market.
"We suspect Sainsbury will struggle to outperform in 2013 as
Tesco continues its fight back and there is some margin
vulnerability as momentum slows," Seymour Pierce said in a note.
Many of Britain's grocers are finding the going tough as
consumers fret over job security and a squeeze on real incomes,
and with the retail market showing minimal growth, store groups
are battling to take market share off each other.
For a graphic showing UK retailers' share price performances
click on: http://link.reuters.com/mat94t
Tesco, which reports on Thursday, shed 0.8 percent.

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Global shares buoyed by Alcoa earnings, dollar gains on yen

012. REUTERS/Issei Kato
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LONDON (Reuters) - World shares staged a modest recovery from two days of losses on Wednesday after aluminum giant Alcoa opened the U.S. earnings season with an optimistic outlook for world demand.
However, with European and British central banks due to hold policy meetings on Thursday, the same day Spain will test demand for its debt and China releases its latest trade data, investors were in a cautious mood.
Alcoa, the largest aluminum producer in the United States, rose 1.3 percent in after-hours trade after it reported a fourth-quarter profit in line with Wall Street expectations and revenues that beat forecasts.
The results lifted Asian stock markets and pushed Europe's FTSE Eurofirst 300 index <.fteu3> up around 0.2 percent in early trade, leaving the MSCI world equity index <.miwd00000pus> up 0.1 percent. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.2 percent higher.
U.S. stock futures were up 0.15 percent, suggesting a firmer start on Wall Street. <.l><.eu><.n>
Corporate profits are expected to be higher than the third quarter's lackluster results, but analysts' estimates are down sharply from where they were in October.
"Expectations are quite low going into the earnings season as we saw a lot of downward guidance in the past few months. There is potential for an upside surprise to come through," said Robert Parkes, equity strategist at HSBC Securities.
SOVEREIGN DEBT TEST
In European fixed income markets German Bund prices dipped slightly as investors prepared for the government's auction of 5 billion euros' worth of new five-year bonds following successful debt sales in Austria, the Netherlands and Ireland on Tuesday.
Investors were also looking ahead to Spanish and Italian bond auctions on Thursday for the new year's first test of market appetite for peripheral euro zone debt.
The Spanish auction could also provide clues on the timing of a much anticipated request by Madrid for fresh financial aid from the ECB. [ID:nL5E9C46KK]
The dollar meanwhile climbed against the yen, moving back towards a 2-1/2 year high hit last week, on expectations of a much bolder monetary easing from the Bank of Japan at its next meeting later this month.
The U.S. currency was up 0.7 percent at 87.61 yen, above a near one-week low of 86.82 hit earlier in Tokyo.
"No one is going to want to be short yen going into the BOJ meeting," said Derek Halpenny, European head of FX research at Bank of Tokyo-Mitsubishi.
Sources familiar with the BOJ's thinking told Reuters the central bank was likely to adopt a 2 percent inflation target at the meeting, double its current goal, and issue a statement with the government pledging to pursue bold monetary easing steps.
The BOJ will also consider easing monetary policy again this month, probably through a further increase in its 101 trillion yen ($1.2 trillion) asset buying and lending programme, the sources said.
The euro held steady against the dollar at $1.3080, with most analysts forecasting the European Central Bank will keep interest rates on hold on Thursday, though some believe rates will be cut later this year.
CHINA DEMAND EYED
Brent crude oil slipped around 0.3 percent to below $112 per barrel as the market awaited the latest trade data from China, the world's biggest energy consumer, due on Thursday.
"What we're seeing in the oil markets is the cautious sentiment playing up ahead of some key economic events this week," said Ker Chung Yang, senior investment analyst at Phillips Futures in Singapore.
However, iron ore jumped to its highest since October 2011, stretching a rally that has lifted prices by more than a third since December as China replenished stockpiles and as supply in the spot market remained limited.
Iron ore, a raw material used to make steel, has now risen 83 percent since falling to below $87 in September.

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Stocks open lower, pushing S&P 500 down from high

NEW YORK (AP) — Stocks are opening lower on Wall Street Monday, pushing the Standard & Poor's 500 index down from the five-year high it reached Friday.
The Dow Jones industrial average fell 55 points to 13,379 as of 10:30 a.m. EST Monday. The S&P 500 dropped six points to 1,460. The Nasdaq composite fell eight points to 3,093.
Bank of America bucked the downward trend. The stock rose after the bank said it had reached an agreement to settle claims from the government agency Fannie Mae over mortgage investments that lost value after the housing crash. Bank of America will pay the agency $3.6 billion and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide unit sold to agency from Jan. 1, 2000 through Dec. 31, 2008. The stock rose 2 cents to $12.13.
The S&P 500 closed at a five-year high Friday after a report showed that hiring held up in December during the tense fiscal negotiations in Washington, with employers adding 155,000 jobs in the month. Stocks surged at the start of last week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that came to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.
Investors will get a better feel for outlook for corporate America this week as earnings reports start coming in. Aluminum producer Alcoa Inc. will launch the reporting season for the fourth quarter of 2012 on Tuesday after the markets close.
The yield on the 10-year Treasury note rose 1 basis point to 1.91 percent. The yield on the note climbed to an eight-month high of 1.97 percent in intra-day trading Friday, according to prices from Tradeweb, an operator of fixed income markets.
Other stocks making big moves:
— Lowe's Cos. fell 68 cents to $34.90 after Canaccord cuts its rating on the company to "sell" from "hold," saying that the home improvement company's efforts to improve stores and sales won't be successful.
— Walgreen Co. gained 65 cents to $37.83 after Jefferies analyst Scott A. Mushkin raised his rating on the drugstore chain to "buy" from "hold," saying the company's profits may get a boost from the flu season, Medicare drug plans and the health care overhaul.

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U.S. stocks slip before earnings; oil dips

 U.S. stock prices fell on Monday on worries about disappointing company results while world oil prices dipped on profit-taking, but signs of improvement in the global economy capped the losses.
The dollar fell against the yen after rallying to a 2-1/2- year high last week, which some traders reckoned was overdone. But it strengthened against the euro on speculation over whether the European Central Bank might signal future interest rate cuts when ECB officials meet on Thursday.
After a jolt of confidence from last week's budget deal in Washington, investors turned their focus to corporate profits in the last three months of 2012, when growth in American holiday spending and corporate investments were tepid.
"We have a cautious market entering fourth-quarter earnings season," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "I think it's going to be a disappointing one this time around."
Uneasiness about weak corporate results emerged even as data on Friday showed U.S. employers kept up a steady pace of hiring in December and the vast services sector had expanded.
The three major U.S. stock indexes opened lower. The Dow Jones industrial average was last down 39.87 points, or 0.30 percent, at 13,395.34. The Standard & Poor's 500 Index was down 4.78 points, or 0.33 percent, at 1,461.69. The Nasdaq Composite Index was down 4.93 points, or 0.16 percent, at 3,096.73.
After touching a 22-month peak last week, the FTSE Eurofirst index of top European shares was down 0.44 percent at 1,162.
MSCI's broad world equity index fell 0.28 percent but was still not far from an 18-month peak scaled when investors returned to the market after the immediate U.S. fiscal crisis was averted by a political deal in Washington.
The pullback in equities also spurred selling in oil, gold and other risky assets.
Brent crude futures slipped 38 cents or 0.31 percent to $110.93 per barrel after rising 0.6 percent last week, while U.S. oil futures dipped 8 cents or 0.1 percent to $93.01.
Spot gold was down 0.6 percent at $1,646.44 an ounce, though above Friday's $1,625.79, its lowest price since August.
In the currency market, the euro was little changed against the dollar at $1.3076, erasing early losses. It held above a three-week low of $1.2998 hit on Friday.
Analysts predicted it would stay around those levels until after the ECB meeting. Some expect the ECB to point to the prospect of easier rates early this year, contrasting with signals from Federal Reserve policymakers that the U.S. central bank it may pursue less-accommodative policies in the future.
The Bank of Japan is also expected to take major steps to stimulate that country's economy later this month as the new government aims to end deflation and recession.
The yen was weaker against the greenback, last down 0.4 percent at 87.83 yen.
Expectations of less-easy monetary policy from the Fed later this year underpinned weakness in U.S. government debt. The yield on benchmark Treasury 10-year notes ticked up to 1.915 percent, which was 6 basis points below the eight-month high set last Friday.

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Stocks slip, pulling S&P 500 below its 5-year high

NEW YORK (AP) — Stocks are lower in midday trading on Wall Street, pulling the Standard & Poor's 500 index down from a five-year high it reached Friday.
Nine of the 10 industry groups in the S&P 500 were lower. Only health care stocks rose.
At midday Monday, the Dow Jones industrial average was down 61 points at 13,374.
The S&P 500 was down six at 1,460. The Nasdaq composite was off seven points at 3,095.
Lowe's fell 68 cents to $34.90 after Canaccord cuts its rating on the stock to "sell" from "hold," saying that the home improvement company's efforts to improve its stores and sales aren't working.
Fourth-quarter corporate earnings reports start to roll in late Tuesday when aluminum maker and Dow component Alcoa releases its results.

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S&P 500 index closes at a five-year high

NEW YORK (AP) — The Standard & Poor's 500 index is closing at its highest level in five years as the stock market extends a New Year's rally.
The S&P 500 closed at 1,466 Friday, the highest since Dec. 31, 2007, before the financial crisis.
That's a gain of seven points on the day. The index is up 4.6 percent over the past week after lawmakers passed a last-minute budget agreement that avoided a set of drastic tax increases and government spending cuts.
The Dow Jones industrial average ended up 43 points at 13,435. The Nasdaq rose just one point to end at 3,101, held back by a decline in Apple.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was higher than average at 3.4 billion shares.

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S&P 500 finishes at 5-year high on economic data

NEW YORK (Reuters) - The benchmark Standard & Poor's 500 index ended at a five-year high on Friday, lifted by reports showing employers kept up a steady pace of hiring workers and the vast services sector expanded at a brisk rate.
The gains on the S&P 500 pushed the index to its highest close since December 2007 and its biggest weekly gain since December 2011.
Most of the gains came early in the holiday-shortened week, including the largest one-day rise for the index in more than a year on Wednesday after politicians struck a deal to avert the "fiscal cliff."
The Dow Jones industrial average <.dji> gained 43.85 points, or 0.33 percent, to 13,435.21. The Standard & Poor's 500 Index <.spx> rose 7.10 points, or 0.49 percent, to 1,466.47. The Nasdaq Composite Index <.ixic> edged up 1.09 points, or 0.04 percent, to 3,101.66.
For the week, the S&P gained 4.6 percent, the Dow rose 3.8 percent and the Nasdaq jumped 4.8 percent to post their largest weekly percentage gains in more than a year.
The CBOE Volatility index <.vix>, a measure of investor anxiety, dropped for a fourth straight session, giving the index a weekly decline of nearly 40 percent, its biggest weekly fall ever. The close of 13.83 on the VIX marks its lowest level since August.
In Friday's economic reports, the Labor Department said non-farm payrolls grew by 155,000 jobs last month, slightly below November's level. Gains were distributed broadly throughout the economy, from manufacturing and construction to healthcare.
Also serving to boost equities was data from the Institute for Supply Management showing U.S. service sector activity expanding the most in 10 months.
With the S&P 500 index at a five-year closing high, analysts said any gains above the index's intraday high near 1,475 in September may be harder to come by.
"We are getting to a point where we need a strong catalyst, which could be earnings, it could be three months of good economic data, it could be a variety of things," said Adam Thurgood, managing director at HighTower Advisors in Las Vegas, Nevada.
"What is going on right now is this conflicting view of fundamentals look pretty good and improving, and then you've got these negative tail risks that could blow everything up," Thurgood said.
He referred to "a fiscal superstorm brewing" of issues still left unresolved in Washington, including tough federal budget cuts and the need to raise the government's debt ceiling all within a couple of months.
The rise in payrolls shown by the jobs data did not make a dent in the U.S. unemployment rate still at 7.8 percent.
A Reuters poll on Friday of economists at Wall Street's top financial institutions showed that most expect the Fed in 2013 to end the program with which it bought Treasury debt in an effort to stimulate the economy.
A drop in Apple Inc shares of 2.6 percent to $528.36 kept pressure on the Nasdaq.
Adding to concerns about Apple's ability to produce more innovative products, rival Samsung Electronics Co Ltd is expected to widen its lead over Apple in global smartphone sales this year with growth of 35 percent. Market researcher Strategy Analytics said Samsung had a broad product lineup.
Eli Lilly and Co was among the biggest boost's to the S&P, up 3.7 percent to $51.56 after the pharmaceuticals maker said it expects its 2013 earnings to increase to $3.75 to $3.90 per share, excluding items, from $3.30 to $3.40 per share in 2012.
Fellow drugmaker Johnson & Johnson rose 1.2 percent to $71.55 after Deutsche Bank upgraded the Dow component to a "Buy" from a "Hold" rating. The NYSEArca pharmaceutical index <.drg> climbed 0.6 percent.
Shares of Mosaic Co gained 3.3 percent to $58.62. Excluding items, the fertilizer producer's quarterly earnings beat analysts' expectations, according to Thomson Reuters I/B/E/S.
Volume was modest with about 6.07 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly below the 2012 daily average of 6.42 billion.
Advancing stocks outnumbered declining ones on the NYSE by 2,287 to 701, while on the Nasdaq, advancers beat decliners 1,599 to 866.

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Stocks gain, pushing the S&P 500 to 5-year high

The Standard & Poor's 500 closed at its highest level in five years Friday after a report showed that hiring held up in December, giving stocks an early lift.
The S&P 500 finished up 7.10 points at 1,466.47, its highest close since December 2007.
The index began its descent from a record close of 1,565.15 in October 2007, as the early signs of the financial crisis began to emerge. The index bottomed out in March 2009 at 676.53 before staging a recovery that has seen it more than double in value and move to within 99 points of its all-time peak.
The remarkable recovery has come despite a halting recovery in the U.S. economy as the Federal Reserve provided huge support to the financial system, buying hundreds of billions of dollars' worth of bonds and holding benchmark interest rates near zero. Last month the Fed said it would keep rates low until the unemployment rate improved significantly.
"Without the Federal Reserve doing what they did for the last few years, there would be no way you'd be near any of these levels in the index," said Joe Saluzzi, co-head of equity trading at Themis Trading. "I would call this the Fed-levitating market."
The Dow Jones industrial average finished 43.85 points higher at 13,435.21. It gained 3.8 percent for the week, its biggest weekly advance since June. The Nasdaq closed up 1.09 point at 3,101.66.
Stocks have surged this week after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome, which could have pushed the economy back into recession.
The Labor Department said U.S. employers added 155,000 jobs in December, showing that hiring held up during the tense fiscal negotiations in Washington. It also said hiring was stronger in November than first thought. The unemployment rate held steady at 7.8 percent.
The jobs report failed to give stocks more of a boost because the number of jobs was exactly in line with analysts' forecasts, said JJ Kinahan, chief derivatives trader for TD Ameritrade.
"The jobs report couldn't have been more in line," Kinahan said. "The market had more to lose than to gain from it."
Among stocks making big moves, Eli Lilly and Co. jumped $1.84, or 3.7 percent, to $51.56 after saying that its earnings will grow more than Wall Street expects, even though the drugmaker will lose U.S. patent protection for two more product types this year.
Walgreen Co., the nation's largest drugstore chain, fell 61 cents, or 1.6 percent, to $37.18 after the company said that a measure of revenue fell more than analysts had expected in December, even as prescription counts continued to recover.
Stocks may also be benefiting as investors adjust their portfolios to favor stocks over bonds, said TD Ameritrade's Kinahan. A multi-year rally in bonds has pushed up prices for the securities and reduced the yield that they offer, in many cases to levels below company dividends.
Goldman Sachs reaffirmed its view that stocks "can be an attractive source of income," and warned that there is a risk that bonds may fall. In a note to clients, the investment bank said that an index of AAA rated corporate bonds offers a yield of just 1.6 percent, less than the S&P 500's dividend yield of 2.2 percent.
The 10-year Treasury note fell, pushing its yield higher. The yield on the 10-year note fell 2 basis points to 1.91 percent. The note's yield has now climbed 52 basis points since falling to its lowest in at least 20 years in July.
Other notable stock moves;
— Accuray Inc. plunged $1.37, or 20 percent, to $5.41 after the radiation oncology equipment company reported weak sales and said it would cut 13 percent of its staff.
— Lululemon, a yoga apparel maker, dropped $3.14, or 4.2 percent, to $71.95 after Credit Suisse predicted slowing momentum and downgraded its stock.
— Finish Line Inc., an athletic footwear and clothing company, fell $1.58, or 8.3 percent, to $17.18 after it reported a small loss after sneaker trends changed and customers didn't take to its new web site launched in November. Analysts had forecast a profit.

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Earnings from McDonald's, Microsoft sink stocks

NEW YORK (AP) -- Poor earnings reports from three companies in the Dow Jones industrial average — Microsoft, General Electric and McDonalds — sent indexes down sharply Friday, marking a sour end to an otherwise strong week in the stock market.
McDonald's led a broad drop in the Dow, falling 3 percent. The Dow was down 151 points at 13,397 shortly after noon.
"I'm concerned about corporate earnings, but I'm not alarmed yet," said Doug Cote, chief market strategist at ING Investment Management in New York.
Cote cautions that it's still early in reporting season, but what's worrying is that companies have reported an overall drop in earnings so far. "And once you get one quarter of negative earnings, it's a precursor," he said. "It's the cockroach theory: if you find one, there's probably many more."
The Standard & Poor's 500 sank 17 points to 1,440 and the Nasdaq composite dropped 52 points to 3,020. All 10 industry groups in the S&P 500 fell, led by materials and technology stocks.
McDonald's profit sank as a strong dollar hurt international results, which account for two-thirds of its business. The fast-food giant's stock lost $3.51 to $89.35.
Microsoft's income fell 22 percent as PC sales took a dive and as troubles in Europe took their toll. Its stock lost 67 cents to $28.82.
General Electric, another economic bellwether, fell 3 percent. The company reported stronger profits early Friday but its revenue missed Wall Street's expectations. Orders for new equipment and services sank, mainly because wind turbine orders have fallen because a key U.S. federal subsidy for wind power expires at the end of the year.
GE's stock lost 60 cents to $22.21.
Analysts currently expect companies in the S&P 500 to post their worst earnings results since the third quarter of 2009, according to S&P Capital IQ. Banks and consumer discretionary companies are projected to report the best growth. Analysts expect companies dealing in metals and other materials to report the worst results, followed by energy companies.
But it's technology companies like IBM, Intel and Google whose weak results have grabbed the most attention so far.
Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday. That snapped a four-day run of gains for the Dow. Google fell again Friday, giving up $14.14 to $680.86.
The Dow is still up 0.6 percent for the week. The S&P 500 up is up 0.8 percent.
In other Friday trading, the yield on the 10-year Treasury note slipped to 1.77 percent from 1.83 percent late Thursday.
Among other stocks making big moves, Chipotle Mexican Grill plunged 14 percent after the burrito chain forecast that revenue growth would slow sharply next year. The stock had been a favorite among investors thanks to super-fast growth in recent years. The stock fell $41.32 to $244.61.

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McDonald's Canada Reveals How They Make Famous Fries

McDonald's Canada is at it again, demystifying their french fry recipe "from the farm to all the way to the fryer."
In their new behind-the-scenes video, Scott Gibson, manager of the company's supply chain, takes customer questions on their world-famous fries.
Gibson addresses the first question asking whether or not the potatoes used by the fast food restaurant are real. Standing in the middle of the Levesque farm with farmer Angelo Levesque, the two discuss how the potatoes are harvested and sorted at the farm. Then they are then brought to McCain, the company's fries supplier, to be prepped before heading to stores.
SLIDESHOW: Fast Food Ads vs. Reality: How Do They Size Up?
Mario Dupuis, production manager at McCain, describes how they prepare the fries by washing the potatoes to remove the rocks and the dirt and put them through a "peeling system."
Afterwards, they are cut and blanched "to remove the natural sugars from the strips, this will prevent some variation in the color once we cook the product," said McCain.
Next they are washed in a textural solution to give it the "nice even coat we see in the restaurants," said McCain, adding they also use an ingredient on the strips to prevent the fries from greying or oxidizing. Afterwards, they are then dried and fried for 45 to 60 seconds. Finally, they are frozen, packaged and shipped to stores.
Once in stores, the fries are deep-fried in 100 percent vegetable oil. They are salted with about 1 tablespoon of salt per four orders of medium fries. For those concerned about salt intake, Gibson suggests that customers can order their fries without the salt.

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Apple’s New iPad Mini Is Pricey but That Won’t Deter Fans: TechCrunch’s John Biggs

It's officially here: The iPad mini, the subject of endless speculation and rumors over the past year, made its debut Tuesday at the California Theater in San Jose, Calif. The iPad mini starts at $329 and hits store shelves Nov. 2. Pre-sales begin Oct. 26. It boasts a 7.9-inch display, weighs 0.68 pounds and is 7.2mm thick. The design closely resembles the iPod Touch and comes in both black and white.
Related: Get Ready for a Big Week in Tech: Apple & Facebook Earnings, Mini iPad, Windows 8 & More
As is the case with all Apple products, there is an option to pay up for more hardware. Here are the price points:
$329 for 16GB
$429 for 32GB
$529 for 64GB
In mid-November Apple will roll out the Wi-fi and 4G mini for $459 for 16GB, $559 for 32GB, and $659 for 64GB.
The iPad mini screen measures 1,024x768, the same resolution as the iPad 2. It also includes a dual-core A5 processor, a front-facing FaceTime HD camera, Apple's "Lightning" connector and a 5-megapixel back camera. A fully charged iPad mini will get 10 hours of battery life.
Apple (AAPL) stock was trading nearly two percent lower after the iPad mini presentation.
Related: Why Apple's Stock is Dropping
John Biggs, East Coast editor of TechCrunch, says the Apple event lacked the shock and awe of previous product announcements.
"Everybody was expecting an iPad mini and we got an iPad mini," he says in an interview with The Daily Ticker. "To see an iPad mini pop up is no huge surprise."
Biggs says the new mini may be pricey but it would not deter Apple devotees and tech "dorks" from adding to their Apple collections. The smaller screen will attract consumers who use tablet devices for reading -- "it's Apple's e-reader" -- Biggs says, and the new mini is not likely to cut into sales of the larger iPad versions, which still feature bigger screens and a higher resolution display.
The starting price for the iPad mini is $130 more than the Kindle Fire HD and Nexus 7 — Apple's two main competitors in the e-reader space. Most Apple insiders and analysts were expecting a lower entry point for the mini, says CNET's Brian Tong, and consumer sticker shock could drag down sales expectations. The mini's price would have been even higher if Apple made it with a retina display, he adds.
"It will sell well but won't break records," Tong says. "It will sell because it's Apple. Never underestimate the Apple consumer."
Microsoft will unveil its first tablet device, Surface, next week.
Related: Microsoft Launches Its Own Tablet--and Admits Apple Was Right
Biggs says the Surface's size and user-face are more conducive to typing, an important feature for some consumers. The tablet market may be expanding but there's still only one winner, according to Biggs — Apple. "You're getting the premium product," he says.

Read More..

US economic growth improves to 2 pct. rate in Q3

WASHINGTON (AP) -- The U.S. economy expanded at a slightly faster 2 percent annual rate from July through September, buoyed by an uptick in consumer spending and a burst of government spending.
Growth improved from the 1.3 percent rate in the April-June quarter, the Commerce Department said Friday.
The pickup in growth may help President Barack Obama's message that the economy is improving. Still, growth remains too weak to rapidly boost hiring. And the 1.74 percent rate for 2012 so far trails last year's 1.8 percent growth, a point GOP nominee Mitt Romney will emphasize.
The report is the last snapshot of economic growth before Americans choose a president in 11 days.
The economy improved because consumer spending rose 2 percent in the July-September quarter, up from 1.5 percent in the second quarter. Spending on homebuilding and renovations increased more than 14 percent. And federal government spending expanded sharply on the largest increase in defense spending in more than three years.
Growth was held back by the first drop in exports in more than three years and flat business investment in equipment and software.
The economy was also slowed by the severe drought this summer in the Midwest. That sharply cut agriculture stockpiles and reduced growth by nearly a half-point.
The government's report covers gross domestic product. GDP measures the nation's total output of goods and services — from restaurant meals and haircuts to airplanes, appliances and highways.
The first of three estimates of growth for the July-September quarter sketched a picture that's been familiar all year: The economy is growing at a tepid rate, slowed by high unemployment and corporate anxiety over an unresolved budget crisis and a slowing global economy.
While growth remains modest, the factors supporting the economy have changed. Exports and business investment drove growth for most of the recovery, but are now fading. Meanwhile, consumer spending has ticked up and housing is adding to growth after a six-year slump.
Consumer spending drives nearly 70 percent of economic activity.
Businesses have grown more cautious since spring, in part because customer demand has remained modest and exports have declined as the global economy has slowed.
Many companies worry that their overseas sales could dampen further if recession spreads throughout Europe and growth slows further in China, India and other developing countries. Businesses also fear the tax increases and government spending cuts that will kick in next year if Congress doesn't reach a budget deal.
Since the recovery from the Great Recession began in June 2009, the U.S. economy has grown at the slowest rate of any recovery in the post-World War II period. And economists think growth will remain sluggish at least through the first half of 2013. Some analysts believe the economy will start to pick up in the second half of next year.

Read More..

Disney buying Lucasfilm for $4.05 billion

LOS ANGELES (AP) — Disney is paying $4.05 billion to buy Lucasfilm Ltd., the production company behind "Star Wars," from its chairman and founder, George Lucas. It's also making a seventh movie in the "Star Wars" series called "Episode 7," set for release in 2015, with plans to follow it with Episodes 8 and 9 and then one new movie every two or three years.
The Walt Disney Co. announced the blockbuster agreement to make the purchase in cash and stock Tuesday. The deal includes Lucasfilm's prized high-tech production companies, Industrial Light & Magic and Skywalker Sound, as well as rights to the "Indiana Jones" franchise.
Disney CEO Bob Iger said in a statement that the acquisition is a great fit and will help preserve and grow the "Star Wars" franchise.
"The last 'Star Wars' movie release was 2005's 'Revenge of the Sith' — and we believe there's substantial pent-up demand," Iger said.
Kathleen Kennedy, the current co-chairman of Lucasfilm, will become the division's president and report to Walt Disney Studios Chairman Alan Horn. Lucas will be creative consultant on new "Star Wars" films.
Lucas said in a statement, "It's now time for me to pass 'Star Wars' on to a new generation of filmmakers."
The deal brings Lucasfilm under the Disney banner with other brands including Pixar, Marvel, ESPN and ABC, all companies that Disney has acquired over the years. A former weatherman who rose through the ranks of ABC, Iger has orchestrated some of the company's biggest acquisitions, including the $7.4 billion purchase of animated movie studio Pixar in 2006 and the $4.2 billion acquisition of comic book giant Marvel in 2009.
Disney shares were not trading with stock markets closed due to the impact of Superstorm Sandy in New York.

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Apple’s New iPad Mini Is Pricey but That Won’t Deter Fans: TechCrunch’s John Biggs

It's officially here: The iPad mini, the subject of endless speculation and rumors over the past year, made its debut Tuesday at the California Theater in San Jose, Calif. The iPad mini starts at $329 and hits store shelves Nov. 2. Pre-sales begin Oct. 26. It boasts a 7.9-inch display, weighs 0.68 pounds and is 7.2mm thick. The design closely resembles the iPod Touch and comes in both black and white.
Related: Get Ready for a Big Week in Tech: Apple & Facebook Earnings, Mini iPad, Windows 8 & More
As is the case with all Apple products, there is an option to pay up for more hardware. Here are the price points:
$329 for 16GB
$429 for 32GB
$529 for 64GB
In mid-November Apple will roll out the Wi-fi and 4G mini for $459 for 16GB, $559 for 32GB, and $659 for 64GB.
The iPad mini screen measures 1,024x768, the same resolution as the iPad 2. It also includes a dual-core A5 processor, a front-facing FaceTime HD camera, Apple's "Lightning" connector and a 5-megapixel back camera. A fully charged iPad mini will get 10 hours of battery life.
Apple (AAPL) stock was trading nearly two percent lower after the iPad mini presentation.
Related: Why Apple's Stock is Dropping
John Biggs, East Coast editor of TechCrunch, says the Apple event lacked the shock and awe of previous product announcements.
"Everybody was expecting an iPad mini and we got an iPad mini," he says in an interview with The Daily Ticker. "To see an iPad mini pop up is no huge surprise."
Biggs says the new mini may be pricey but it would not deter Apple devotees and tech "dorks" from adding to their Apple collections. The smaller screen will attract consumers who use tablet devices for reading -- "it's Apple's e-reader" -- Biggs says, and the new mini is not likely to cut into sales of the larger iPad versions, which still feature bigger screens and a higher resolution display.
The starting price for the iPad mini is $130 more than the Kindle Fire HD and Nexus 7 — Apple's two main competitors in the e-reader space. Most Apple insiders and analysts were expecting a lower entry point for the mini, says CNET's Brian Tong, and consumer sticker shock could drag down sales expectations. The mini's price would have been even higher if Apple made it with a retina display, he adds.
"It will sell well but won't break records," Tong says. "It will sell because it's Apple. Never underestimate the Apple consumer."
Microsoft will unveil its first tablet device, Surface, next week.
Related: Microsoft Launches Its Own Tablet--and Admits Apple Was Right
Biggs says the Surface's size and user-face are more conducive to typing, an important feature for some consumers. The tablet market may be expanding but there's still only one winner, according to Biggs — Apple. "You're getting the premium product," he says.

Read More..

US economic growth improves to 2 pct. rate in Q3

The U.S. economy expanded at a slightly faster 2 percent annual rate from July through September, buoyed by an uptick in consumer spending and a burst of government spending.
Growth improved from the 1.3 percent rate in the April-June quarter, the Commerce Department said Friday.
The pickup in growth may help President Barack Obama's message that the economy is improving. Still, growth remains too weak to rapidly boost hiring. And the 1.74 percent rate for 2012 so far trails last year's 1.8 percent growth, a point GOP nominee Mitt Romney will emphasize.
The report is the last snapshot of economic growth before Americans choose a president in 11 days.
The economy improved because consumer spending rose 2 percent in the July-September quarter, up from 1.5 percent in the second quarter. Spending on homebuilding and renovations increased more than 14 percent. And federal government spending expanded sharply on the largest increase in defense spending in more than three years.
Growth was held back by the first drop in exports in more than three years and flat business investment in equipment and software.
The economy was also slowed by the severe drought this summer in the Midwest. That sharply cut agriculture stockpiles and reduced growth by nearly a half-point.
The government's report covers gross domestic product. GDP measures the nation's total output of goods and services — from restaurant meals and haircuts to airplanes, appliances and highways.
The first of three estimates of growth for the July-September quarter sketched a picture that's been familiar all year: The economy is growing at a tepid rate, slowed by high unemployment and corporate anxiety over an unresolved budget crisis and a slowing global economy.
While growth remains modest, the factors supporting the economy have changed. Exports and business investment drove growth for most of the recovery, but are now fading. Meanwhile, consumer spending has ticked up and housing is adding to growth after a six-year slump.
Consumer spending drives nearly 70 percent of economic activity.
Businesses have grown more cautious since spring, in part because customer demand has remained modest and exports have declined as the global economy has slowed.
Many companies worry that their overseas sales could dampen further if recession spreads throughout Europe and growth slows further in China, India and other developing countries. Businesses also fear the tax increases and government spending cuts that will kick in next year if Congress doesn't reach a budget deal.
Since the recovery from the Great Recession began in June 2009, the U.S. economy has grown at the slowest rate of any recovery in the post-World War II period. And economists think growth will remain sluggish at least through the first half of 2013. Some analysts believe the economy will start to pick up in the second half of next year.

Read More..

Disney buying Lucasfilm for $4.05 billion

LOS ANGELES (AP) — Disney is paying $4.05 billion to buy Lucasfilm Ltd., the production company behind "Star Wars," from its chairman and founder, George Lucas. It's also making a seventh movie in the "Star Wars" series called "Episode 7," set for release in 2015, with plans to follow it with Episodes 8 and 9 and then one new movie every two or three years.
The Walt Disney Co. announced the blockbuster agreement to make the purchase in cash and stock Tuesday. The deal includes Lucasfilm's prized high-tech production companies, Industrial Light & Magic and Skywalker Sound, as well as rights to the "Indiana Jones" franchise.
Disney CEO Bob Iger said in a statement that the acquisition is a great fit and will help preserve and grow the "Star Wars" franchise.
"The last 'Star Wars' movie release was 2005's 'Revenge of the Sith' — and we believe there's substantial pent-up demand," Iger said.
Kathleen Kennedy, the current co-chairman of Lucasfilm, will become the division's president and report to Walt Disney Studios Chairman Alan Horn. Lucas will be creative consultant on new "Star Wars" films.
Lucas said in a statement, "It's now time for me to pass 'Star Wars' on to a new generation of filmmakers."
The deal brings Lucasfilm under the Disney banner with other brands including Pixar, Marvel, ESPN and ABC, all companies that Disney has acquired over the years. A former weatherman who rose through the ranks of ABC, Iger has orchestrated some of the company's biggest acquisitions, including the $7.4 billion purchase of animated movie studio Pixar in 2006 and the $4.2 billion acquisition of comic book giant Marvel in 2009.
Disney shares were not trading with stock markets closed due to the impact of Superstorm Sandy in New York.

Read More..

Has Obama Been Good for Millionaires?

The question of whether Americans are better off than they were four years ago depends, of course, on the American.
For the 12 million unemployed, the answer is most certainly no.
But for many of America's millionaires, the answer may be more affirmative.
A new study from WealthInsight, the London-based wealth-research and data firm (and yes, they are non-partisan), showed that the United States added 1.1 million millionaires between Jan. 1, 2009 and the end of 2011, the latest period measured. There were 5.1 million millionaires in America at the end of 2011, compared with around 4 million at the end of 2008.
That works out to more than 1,000 millionaires a day under the Obama administration. (They defined millionaires as people with total net worth of $1 million or more, excluding primary residence).
(Read more: Rich Will Spend More Under Romney: Poll)
"It's true that Obama has been good for millionaires, at least in absolute terms," said Andrew Amoils, analyst at WealthInsight. "He certainly hasn't been bad for millionaires."
Amoils said that quantitative easing and financial bailouts especially helped the finance sector, which accounts for the largest share of millionaires. It also helped that markets recovered in 2009.
The timeframe is worth noting. Measured against the 2007 peak, when 5.27 million Americans had a net worth of at least $1 million, the nation lost 165,360 millionaires. Their combined wealth is down six percent, to $18.8 trillion from a peak of more than $20 trillion in 2007.
We don't know how 2012 will turn out, though if stock markets continue to strengthen, the millionaire count for 2012 is likely to increase. Wealth Insight says the number of millionaires in America will grow to more than six million by 2016, and their combined fortunes will jump 25 percent over the same period.
(Read more: Millionaires Give Nine Percent of Income to Charity)
Where did all the millionaires come from between 2008 and 2011?
Mainly from retail, tech and finance -- and in both blue and red states.
Of the sectors adding the largest number of people worth $30 million or more, the retail, fashion, and luxury goods sector ranked first. That was followed by energy and utilities, then tech, telecoms and finance. Transportation and construction saw the biggest drops.
The number of people worth $30 million or more grew 26 percent in Connecticut since 2008, 20 percent in Kansas, 12 percent in Michigan, showing that the wealth creation was nationwide.

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Obama Wins 2012 Election: Why Your Taxes Are Going Up

When President Obama and the new Congress begin to tackle important legislation and federal policy in January, one of the key issues will be how to reform America's byzantine tax code.
Obama campaigned on a platform to raise taxes on the wealthiest Americans, declaring that millionaires and billionaires need to "pay their fair share." The president proposed the highly controversial "Buffett Rule," which would make sure those individuals earning more than $1 million a year would pay at least 30% of their income in federal taxes.
Related: Do the Rich Have a Moral Obligation to Pay Higher Taxes? Gov. Jerry Brown Says 'Yes'
The top individual tax rate is currently 35% but few U.S. households and individuals actually pay that much; various tax deductions and loopholes reduce one's tax burden.
According to the Obama campaign, the richest 400 taxpayers in 2008 (who each made more than $110 million that year) paid an average income tax rate of just 18%. In 2009 over 20,000 U.S. households with more than $1 million in income paid a federal tax rate of less than 15%.
Obama has vowed to raise the top income tax rate for individuals to 39.6% and let the Bush-era tax breaks end for the highest income earners. The majority of Americans — those who are lower to middle class — could also see a 2% tax increase if Congress allows the temporary payroll tax holiday to expire at the end of the year.
Related: Here's Why Your Taxes Are Going Up 2% Next Year: Just Explain It
Nearly half of voters support raising taxes on incomes over $250,000, according to Tuesday night's exit polls.
Len Burman, a professor of public affairs at Syracuse University and a co-founder of the bipartisan Tax Policy Center, believes higher tax rates play just a small role in resolving the nation's budget woes.
"In the long term [Obama] is going to need to raise taxes on more than just the rich," Burman says in an interview with The Daily Ticker. "The budget problem isn't going to be solved without broader-based tax increases, preferably done in the context of tax reform and also serious entitlement reform. We're not going to be able to solve this on the tax side alone."
Burman, who recently co-wrote the new book "Taxes in America: What Everyone Needs to Know," says tax rates do not need to be raised for any income group if Congress and the White House would agree on one simple change: raising the capital gains rate, i.e. the profits from the sale of an investment. Assets, such as stocks, art or real estate, that are held for at least a year are currently taxed at a special 15% rate; Obama wants to raise that to 20%.
"The problem with a low tax rate on capital gains is not that it allows Mitt Romney and Warren Buffett to pay very low taxes but that it creates this huge opportunity for tax sheltering," he notes. "There's a whole industry that's devoted to coming up with these schemes. [Raising capital gains rates] could make the tax system more progressive and allow for lower tax rates" and a reduction in the deficit Burman says.
Obama's tax proposal also targets the Alternative Minimum Tax, the Estate Tax and as well as many personal tax credits and itemized deductions. Obama would make permanent the 2007 AMT patch and index it for inflation. He would raise the estate tax to 45% from 35% on estates worth more than $3.5 million. He would lower the corporate tax rate to 28% from 35% and provide a refundable $3,000 credit per added employee for companies that expand their workforce. He would tax carried interest as ordinary income.
Related: Corporate Tax Loopholes=Corporate Socialism: Pulitzer Prize Winner David Cay Johnston
A divided Congress refused to compromise with Obama during his first term and could very well dismiss the president's tax reforms for the next four years. Republicans are loathe to raise taxes by even a penny and Obama has said he would veto any budget bills that did not include tax increases. Neither party wants to raise taxes in a weak economy. But the options available for reducing the deficit and generating new revenue are few and far between.

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Apple’s New iPad Mini Is Pricey but That Won’t Deter Fans: TechCrunch’s John Biggs

t's officially here: The iPad mini, the subject of endless speculation and rumors over the past year, made its debut Tuesday at the California Theater in San Jose, Calif. The iPad mini starts at $329 and hits store shelves Nov. 2. Pre-sales begin Oct. 26. It boasts a 7.9-inch display, weighs 0.68 pounds and is 7.2mm thick. The design closely resembles the iPod Touch and comes in both black and white.
Related: Get Ready for a Big Week in Tech: Apple & Facebook Earnings, Mini iPad, Windows 8 & More
As is the case with all Apple products, there is an option to pay up for more hardware. Here are the price points:
$329 for 16GB
$429 for 32GB
$529 for 64GB
In mid-November Apple will roll out the Wi-fi and 4G mini for $459 for 16GB, $559 for 32GB, and $659 for 64GB.
The iPad mini screen measures 1,024x768, the same resolution as the iPad 2. It also includes a dual-core A5 processor, a front-facing FaceTime HD camera, Apple's "Lightning" connector and a 5-megapixel back camera. A fully charged iPad mini will get 10 hours of battery life.
Apple (AAPL) stock was trading nearly two percent lower after the iPad mini presentation.
Related: Why Apple's Stock is Dropping
John Biggs, East Coast editor of TechCrunch, says the Apple event lacked the shock and awe of previous product announcements.
"Everybody was expecting an iPad mini and we got an iPad mini," he says in an interview with The Daily Ticker. "To see an iPad mini pop up is no huge surprise."
Biggs says the new mini may be pricey but it would not deter Apple devotees and tech "dorks" from adding to their Apple collections. The smaller screen will attract consumers who use tablet devices for reading -- "it's Apple's e-reader" -- Biggs says, and the new mini is not likely to cut into sales of the larger iPad versions, which still feature bigger screens and a higher resolution display.
The starting price for the iPad mini is $130 more than the Kindle Fire HD and Nexus 7 — Apple's two main competitors in the e-reader space. Most Apple insiders and analysts were expecting a lower entry point for the mini, says CNET's Brian Tong, and consumer sticker shock could drag down sales expectations. The mini's price would have been even higher if Apple made it with a retina display, he adds.
"It will sell well but won't break records," Tong says. "It will sell because it's Apple. Never underestimate the Apple consumer."
Microsoft will unveil its first tablet device, Surface, next week.
Related: Microsoft Launches Its Own Tablet--and Admits Apple Was Right
Biggs says the Surface's size and user-face are more conducive to typing, an important feature for some consumers. The tablet market may be expanding but there's still only one winner, according to Biggs — Apple. "You're getting the premium product," he says.

Read More..