LONDON/NEW YORK (Reuters) - IntercontinentalExchange Inc agreed as part of its $8.2 billion takeover of NYSE Euronext to pay the New York Stock Exchange operator a termination fee of $750 million if it fails to gain antitrust clearances, suggesting a high level of confidence the deal will go through.
Big Board parent NYSE could get out of the arrangement for a fee of $300 million if a sweeter deal were to come along, according to a regulatory filing on Friday.
ICE failed last year to buy NYSE in a joint bid with Nasdaq OMX Group . At the time, NYSE was involved in year-long pursuit to sell itself to Frankfurt's Deutsche Bourse. In the end, regulators killed both deals, saying they would be anti-competitive.
On its own, Atlanta-based ICE lacks the massive equities operations of Nasdaq or Deutsche Bourse, so there is less overlap between the two exchanges, antitrust lawyers said, making regulatory approval far more likely.
Some in the industry have suggested that CME Group could table a competing offer for NYSE, but they said that would not be likely for several reasons, including the break-up fee.
People familiar with the deal said other issues include potential antitrust concerns and the fact that under the latest agreement, NYSE's Liffe business will do all its clearing through ICE regardless of whether the deal goes through.
"The clearing deal they signed is like a second break-up fee," one of the people said.
Also, CME has not been known for making large deals. "It does not seem to be in its DNA," said Adam Sussman, director of research at Tabb Group.
NYSE CEO Duncan Niederauer acknowledged a higher bid could come along, but that NYSE would not chase after a deal unless it was almost certain it would pass regulatory muster.
"If we did that for another year and at the end we are told, 'we are not going to allow you to do this because of the overlap of your businesses,' we would look beyond foolish," he said in an interview on Thursday.
FOUR-WAY BATTLE
The deal, announced Thursday, would give 12-year old commodities and energy bourse ICE a powerful presence in Europe's lucrative financial derivatives market through control of NYSE Liffe, Europe's second-largest futures exchange, and a major advantage over U.S.-based rivals CME and Nasdaq.
All three want to challenge Deutsche Boerse's European dominance. A shake-up in banking regulation is expected to increase demand sharply for clearing financial derivatives through such exchanges.
"The deal would place a bigger and more aggressive competitor on Deutsche Boerse's doorstep," said Richard Perrott, an analyst at Berenberg Bank.
Regulatory changes in the wake of the financial crisis are forcing banks to channel derivatives business through clearing houses and regulated exchanges to ensure their risk positions can be better monitored than they were when bank dealers were trading complex contracts directly among themselves.
The reforms are expected to be fully operational in Europe in 2014.
ICE's takeover of NYSE Liffe will give it an advantage of existing presence in Europe over Chicago-based CME, owner of the world's largest futures market, and New York's Nasdaq, both of which plan to open their own London-based exchanges next year.
THE PRIZE
While the New York Stock Exchange, an enduring symbol of American capitalism, is NYSE Euronext's prestige business, London's Liffe is the real jewel in the crown.
With profits from stock trading significantly eroded by new technology and the rise of other places for investors to trade, the stock market businesses like NYSE are less valuable to ICE.
The company has said it will try to spin off NYSE's Euronext European stock market businesses in a public offering. This has generated speculation, which the company has denied, that it may also have little interest in the NYSE trading floor on Wall Street.
NYSE made an operating income of $473 million from Liffe in 2011 on revenues of $861 million compared to an income of $533 million on revenues of $1.3 billion from its equities business.
ICE's Jeff Sprecher will be CEO of the combined organisation and Duncan Niederauer, the NYSE Euronext CEO, will be president - a post he said he plans to remain in until at least 2014. The two are longtime friends.
ICE started out as an online marketplace for energy trading before Sprecher initiated a string of acquisitions, from the London-based International Petroleum Exchange in 2001, to the New York Board of Trade and, most recently, a handful of smaller deals, including a climate products exchange and a stake in a Brazilian clearing house.
A combined ICE-NYSE Euronext would leapfrog Deutsche Boerse to become the world's third largest exchange group with a combined market value of $15.2 billion. CME Group has a market value of $17.5 billion, Thomson Reuters data shows.
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Stocks sink after Republicans cancel budget vote
Labels: BusinessNEW YORK (AP) — Investors sent Washington a reminder Friday that Wall Street is a power player in talks to avoid the "fiscal cliff."
Stocks fell sharply after House Republicans called off a vote on tax rates and left federal budget talks in disarray 10 days before sweeping tax increases and government spending cuts are scheduled to take effect.
The Dow Jones industrial average lost as much as 189 points before closing down 120.88 points, or 0.9 percent, at 13,190.84. The Standard & Poor's 500 index fell 13.54 points to 1,430.15. The Nasdaq composite index declined 29.38 to 3,021.01.
The House bill would have raised taxes on Americans making at least $1 million per year and locked in decade-old tax cuts for Americans making less. Taxes will rise for almost all Americans on Jan. 1 unless Congress acts.
House Speaker John Boehner had presented what he called "Plan B" while he negotiated with the White House on avoiding the sweeping tax increases and spending cuts, a combination known as the fiscal cliff.
But Boehner scrapped a vote on the bill Thursday night after it became clear that it did not have enough support in the Republican-led House to secure passage. He called on the White House and the Democratic-led Senate to work something out.
The market's decline demonstrated that investors' nerves are raw as they await a resolution.
"Where we are today, the market would be satisfied with the announcement of a stopgap measure," said Quincy Krosby, a market strategist at Prudential Financial. "The more the clock ticks, the more the market is saying, 'Just give us something.'"
Sal Arnuk, a partner at Themis Trading, suggested that the sharp drop in stocks early in the day might have been an overreaction. The Dow was down as much as 189 points, and before the market opened, stock futures suggested a decline of 200 points or more.
"It's not a surprise that they weren't able to come to an agreement," he said. I don't think most of Wall Street anticipated that they would come to an agreement."
Other markets registered their concern, but the reaction was not extreme. The yield on the benchmark 10-year U.S. Treasury note fell 0.04 percentage point to 1.76 percent.
The price of gold, which some investors buy when fear overtakes the market, climbed, but only by 0.9 percent. Gold rose $14.20 to $1,660.10 an ounce.
If the full fiscal cliff takes effect, economists say it could drag the United States into recession next year. The impact would be gradual, though, and a recession is not a sure thing.
Most people would receive only slightly less money in each paycheck. And the tax increases and spending cuts could be retroactively repealed if a deal comes together after Jan. 1.
If budget talks dragged on, many businesses might put off investment or hiring, and consumer spending could suffer. That's why most economists say it would be crucial to reach a deal within roughly the first two months of 2013.
"Believe you me," Krosby said, "if you think that there is a recession in the offing you are going to see this market sell off. It's sell off first, ask questions later."
It was not the first time that Wall Street worried about the fiscal cliff talks.
On the day after the election, when voters returned divided government to power, the Dow dropped 312 points. On Nov. 14, when President Barack Obama insisted on higher tax rates for the wealthy, the Dow dropped 185 points.
The sharp drop in stocks Friday was reminiscent of, although much smaller in scale than, what happened Sept. 29, 2008, during the financial crisis.
The House defeated a proposed $700 billion bailout of the U.S. financial industry, and the Dow plunged 777 points, its worst one-day decline. Four days later, the House, shaken by what had happened on Wall Street, passed a modified bill.
Stocks closed lower Friday in Asia after House Republicans canceled their vote. The Nikkei index in Japan fell almost 1 percent, and Hong Kong's Hang Seng Index dropped 0.7 percent. Stocks were also lower in Europe.
Among stocks making big moves:
— Walgreen, the nation's largest drugstore chain, slumped $1.24, or 3.3 percent, to $36.31. It filled fewer prescriptions and absorbed costs tied to acquisitions and Superstorm Sandy. The results were worse than financial analysts had been expecting.
— BlackBerry maker Research in Motion dropped $2.21, or 15.8 percent, to $11.74. The company said it won't generate as much revenue from telecommunications carriers once it releases the BlackBerry 10.
— Nike, the world's largest maker of athletic gear, jumped $6.10, or 6.2 percent, to $105.10. It said strong demand in North America led to a 7 percent increase in revenue in the three months ended Nov. 30, balancing out economic weakness in Europe and a slowdown in growth in China.
— Micron Technology dropped 6.9 percent, the biggest decline in the S&P 500 index. The semiconductor maker reported a loss late Thursday as weaker demand for personal computers and an oversupply of certain chips hurt its sales. The stock lost 47 cents to $6.32.
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Titan Advisors withdraws funds from SAC Capital - WSJ
Labels: Business(Reuters) - Titan Advisors LLC has decided to withdraw all of its money from the hedge fund firm SAC Capital Advisors LP, the Wall Street Journal reported on Friday, as SAC faces scrutiny because of several employees linked to insider-trading charges.
It's unclear how much money Titan, an asset-management firm based in New York, had invested with SAC for its clients, although it has $3 billion invested in hedge funds overall, according to a March securities filing.
In its article, the Journal cited clients who said they were told that Titan would withdraw investments in SAC. The withdrawal is notable because Titan Advisors founder George Fox was one of the early investors in SAC Capital, the Journal said.
Fox did not respond to a voicemail message. A spokesman for SAC Capital said the firm did not have a comment.
SAC is run by billionaire Steven A. Cohen, and came to prominence in the late 1990s for its outsized returns. The firm has posted returns of roughly 30 percent a year since its inception.
But more recently, SAC Capital has garnered attention for employees' run-ins with regulators and criminal authorities investigating insider-trading on Wall Street.
On Friday, ex-SAC fund manager Mathew Martoma was indicted by a grand jury in New York, becoming the seventh former SAC employee to be charged or implicated in insider-trading schemes.
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Wall Street ends lower after "fiscal cliff" setback
Labels: BusinessNEW YORK (Reuters) - U.S. stocks finished lower on Friday after a Republican plan to avoid the "fiscal cliff" failed to gain sufficient support on Thursday night, draining hopes that a deal would be reached before 2013.
Still, stocks managed to rebound from the day's lows near the end of the session, and for the week, the three major U.S. stock indexes still ended higher, with the S&P 500 gaining 1.2 percent.
Trading was volatile because of waning confidence in the prospect of a deal out of Washington, and in part, as the result of the quarterly expiration of options and futures contracts. The CBOE Volatility Index <.vix> or VIX, the market's favorite barometer of investor anxiety, finished below its session high.
Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday. It was the latest setback in negotiations to avoid $600 billion in tax hikes and spending cuts that some say could tip the U.S. economy into recession.
"The failure with Plan B was disappointing, if not terribly surprising, but now there's a real lack of clarity about what will happen, and markets hate that," said Mike Hennessy, managing director of investments for Morgan Creek in Chapel Hill, North Carolina.
The Dow Jones industrial average <.dji> dropped 120.88 points, or 0.91 percent, to 13,190.84 at the close. The Standard & Poor's 500 Index <.spx> fell 13.54 points, or 0.94 percent, to 1,430.15. The Nasdaq Composite Index <.ixic> lost 29.38 points, or 0.96 percent, to 3,021.01.
"Amazingly, this sharp decline today may not actually change the technical picture much - unless the decline gets worse," said Larry McMillan, president of options research firm McMillan Analysis Corp, in a research note.
For the week, the Dow gained 0.4 percent and the Nasdaq climbed 1.7 percent.
On Friday, Herbalife dropped for an eighth straight session. Investor Bill Ackman recently ramped up his campaign against the company. The stock skidded 19.2 percent to $27.27 and has lost more than 35 percent this week.
Plan B, which called for tax increases on those who earn $1 million or more a year, was not going to pass the Democratic-led Senate or win acceptance from the White House anyway. But it exposed the reality that it will be difficult to get Republican support for the more expansive tax increases that President Barack Obama has urged.
Still, the declines of about 1 percent in the three major U.S. stock indexes suggest that investors do not believe the economy will be unduly damaged by the absence of a deal, said Mark Lehmann, president of JMP Securities, in San Francisco.
"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.
"I think if you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."
Banking shares, which outperform during economic expansion and have led the market on signs of progress on resolving the fiscal impasse, led Friday's declines. Citigroup Inc fell 1.7 percent to $39.49, while Bank of America slid 2 percent to $11.29. The KBW Banks index <.bkx> lost 1.19 percent.
Volatility on Friday was exacerbated in part by "quadruple witching," the quarterly expiration of stock index futures and options, stock options and single stock futures contracts.
About 8.59 billion shares changed hands on major U.S. exchanges, more than the daily average of 6.47 billion daily in 2012, in part because of the "quadruple witching" expiration.
The day's round of data indicated the economy was surprisingly resilient in November; consumer spending rose by the most in three years and a gauge of business investment jumped.
But separate data showed consumer sentiment slumped in December. The S&P Retail Index <.spxrt> fell 1.2 percent.
U.S.-listed shares of Research in Motion sank 22.7 percent to $10.91 after the Canadian company, known as the BlackBerry maker, reported its first-ever decline in its subscriber numbers on Thursday alongside a new fee structure for its high-margin services segment.
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Wall Street Week Ahead: A lump of coal for 'Fiscal Cliff-mas'
Labels: BusinessNEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.
A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.
Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.
Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.
"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.
"The markets still basically believe that something will be done," he said.
If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.
For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average up 0.4 percent, the S&P 500 up 1.2 percent and the Nasdaq Composite Index up 1.7 percent.
Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.
IT COULD GET A LITTLE CRAZY
Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.
If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.
"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.
"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."
Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.
Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index overcame a technical level by confirming its close above 1,000 for a second week.
"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.
"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."
Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.
The PHLX defense sector index hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.
Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.
U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.
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James and Bosh feel Heat have plenty of room to improve
Labels: SportsMIAMI (Reuters) - LeBron James and Chris Bosh feel the defending champion Miami Heat have work to do if they are to reach peak form in time for the National Basketball Association (NBA) playoffs, but both embrace the challenge.
The Heat (16-6) trail only the New York Knicks (19-6) in the Eastern Conference just past the quarter-mark of the NBA's regular season but Bosh is well aware his team is not playing at the same level compared to this point last season.
"No, not right now. We have to pick it up a little bit to catch ourselves from last year," Bosh, Miami's third-leading scorer and top shot-blocker, told Reuters.
"It's a new year, we just have to slowly build and get back to that place. As long as we continue to win games now and then we are primed and ready come playoff time, I'll be happy."
Of Miami's six losses in the 2012-13 season, two have come at the hands of a Knicks team that made some key offseason moves with the hopes of denying the Heat a trip to the NBA Finals.
For Miami, a key issue that needs attention is defense, particularly rebounding. The component of the game was in clear evidence during Tuesday's win over the Minnesota Timberwolves, where the Heat were outrebounded 52-24.
"There are some improvements, we do have to get better at a lot of things - defense, defensive rebounding, three point field goal percentage, we have to do a better job," said Bosh.
The 6-foot 10-inch Bosh, who switched from power-forward to center this season, says having areas to improve on keeps the team from getting complacent throughout the NBA's long, 82-game regular season.
"I'm glad that we have things to work on because, especially coming off a championship win, you don't want to be 'oh, we are a perfect team, it's perfect everything is great,'" said Bosh.
"You want to have something to work on, you don't ever want to get comfortable, you want to feel like someone is chasing you."
'CHALLENGING MYSELF'
Bosh says he applies a "one more for the championship" motivational approach in training and James, the NBA's reigning Most Valuable Player, has certainly taken that notion to heart.
James, who has been pushing himself physically this season by adding extra workouts and cycling to games and shootouts, agrees the Heat have lots of room for improvement.
"Everything, defensively continue to grind, continue to communicate, continue to rebound, offensively don't turn the ball over, be efficient looking for shots," he said.
"Right now we are getting better, we are going to use each and every game, we aren't going to cut any corners to get better, right now.
"We are not where we want to be in April for sure, but that's OK. We don't want to be peaking now, the thing for us is we don't want to be taking steps back".
There are certainly no signs of James going backwards or even easing off - he has scored at least 20 points in every game this season and as well as his cycling, has taken to the gym after defeats, such as this month's home loss to the Knicks.
"I'm just challenging myself. I feel that if I can be in the best condition I can be in that it is going to help the team automatically," said James. "I feel like if I am in the best shape and keeping my game under wraps, then we are going to be a better team."
The Heat visit the Dallas Mavericks later on Thursday and face biggest test of their form yet on Christmas Day when they host the Oklahoma City Thunder in a rematch of last season's final. The Thunder (21-4) own the NBA's best record and are riding a 12-game winning streak.
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The Heat (16-6) trail only the New York Knicks (19-6) in the Eastern Conference just past the quarter-mark of the NBA's regular season but Bosh is well aware his team is not playing at the same level compared to this point last season.
"No, not right now. We have to pick it up a little bit to catch ourselves from last year," Bosh, Miami's third-leading scorer and top shot-blocker, told Reuters.
"It's a new year, we just have to slowly build and get back to that place. As long as we continue to win games now and then we are primed and ready come playoff time, I'll be happy."
Of Miami's six losses in the 2012-13 season, two have come at the hands of a Knicks team that made some key offseason moves with the hopes of denying the Heat a trip to the NBA Finals.
For Miami, a key issue that needs attention is defense, particularly rebounding. The component of the game was in clear evidence during Tuesday's win over the Minnesota Timberwolves, where the Heat were outrebounded 52-24.
"There are some improvements, we do have to get better at a lot of things - defense, defensive rebounding, three point field goal percentage, we have to do a better job," said Bosh.
The 6-foot 10-inch Bosh, who switched from power-forward to center this season, says having areas to improve on keeps the team from getting complacent throughout the NBA's long, 82-game regular season.
"I'm glad that we have things to work on because, especially coming off a championship win, you don't want to be 'oh, we are a perfect team, it's perfect everything is great,'" said Bosh.
"You want to have something to work on, you don't ever want to get comfortable, you want to feel like someone is chasing you."
'CHALLENGING MYSELF'
Bosh says he applies a "one more for the championship" motivational approach in training and James, the NBA's reigning Most Valuable Player, has certainly taken that notion to heart.
James, who has been pushing himself physically this season by adding extra workouts and cycling to games and shootouts, agrees the Heat have lots of room for improvement.
"Everything, defensively continue to grind, continue to communicate, continue to rebound, offensively don't turn the ball over, be efficient looking for shots," he said.
"Right now we are getting better, we are going to use each and every game, we aren't going to cut any corners to get better, right now.
"We are not where we want to be in April for sure, but that's OK. We don't want to be peaking now, the thing for us is we don't want to be taking steps back".
There are certainly no signs of James going backwards or even easing off - he has scored at least 20 points in every game this season and as well as his cycling, has taken to the gym after defeats, such as this month's home loss to the Knicks.
"I'm just challenging myself. I feel that if I can be in the best condition I can be in that it is going to help the team automatically," said James. "I feel like if I am in the best shape and keeping my game under wraps, then we are going to be a better team."
The Heat visit the Dallas Mavericks later on Thursday and face biggest test of their form yet on Christmas Day when they host the Oklahoma City Thunder in a rematch of last season's final. The Thunder (21-4) own the NBA's best record and are riding a 12-game winning streak.
Barring setback, Redskins' RG3 looks good to go
Labels: SportsASHBURN, Va. (AP) — Robert Griffin III looks good to go.
The Washington Redskins rookie had a full practice Thursday for the second straight day as the team prepares for this week's game against the Philadelphia Eagles.
"I like what I see," coach Mike Shanahan said. "If there is no setback, he should be ready to go."
Griffin missed Sunday's win over the Cleveland Browns with a sprained right knee. On Wednesday, he had his first full practice since the injury, and coaches and doctors were eager to see how the knee would respond.
"There wasn't a setback today, so that's a good sign," Shanahan said.
Also Thursday, right tackle Tyler Polumbus remained unable to practice as he recovers from a concussion. Linebacker London Fletcher (sprained left ankle), linebacker Lorenzo Alexander (right shoulder) and defensive end Stephen Bowen (torn biceps) were limited, and linebacker Rob Jackson returned to practice after the birth of his baby girl.
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The Washington Redskins rookie had a full practice Thursday for the second straight day as the team prepares for this week's game against the Philadelphia Eagles.
"I like what I see," coach Mike Shanahan said. "If there is no setback, he should be ready to go."
Griffin missed Sunday's win over the Cleveland Browns with a sprained right knee. On Wednesday, he had his first full practice since the injury, and coaches and doctors were eager to see how the knee would respond.
"There wasn't a setback today, so that's a good sign," Shanahan said.
Also Thursday, right tackle Tyler Polumbus remained unable to practice as he recovers from a concussion. Linebacker London Fletcher (sprained left ankle), linebacker Lorenzo Alexander (right shoulder) and defensive end Stephen Bowen (torn biceps) were limited, and linebacker Rob Jackson returned to practice after the birth of his baby girl.
Placido Polanco agrees to $2.75M deal with Marlins
Labels: SportsMIAMI (AP) — Former All-Star third baseman Placido Polanco agreed to a $2.75 million, one-year contract Thursday with the Miami Marlins, plugging the final hole in the team's projected lineup following a payroll purge.
The 37-year-old, who can earn an additional $250,000 in performance bonuses, battled injuries this year and hit .257 with two home runs and 19 RBIs in 90 games with the Philadelphia Phillies. The 15-year veteran is a career .299 hitter with 103 homers.
Other projected starters include Logan Morrison at first base, Donovan Solano at second, Adeiny Hechavarria at shortstop, Jeff Brantly at catcher, Giancarlo Stanton in right field, Justin Ruggiano in center field and Juan Pierre in left field.
Hanley Ramirez played 90 games at third this year for Miami before being traded in July. That was part of the salary purge by the Marlins, who pared $146.5 million in future payroll when they swung a trade last month that sent former NL batting champion Jose Reyes, former NL ERA leader Josh Johnson and left-hander Mark Buehrle to Toronto.
The Marlins have a projected 2013 payroll of about $45.75 million. Their payroll on opening day this year was $112 million, not including money received in the Carlos Zambrano trade, but the team finished last in the NL East and drew smaller crowds than expected in its new ballpark.
Polanco was chosen to start in the All-Star game for the second time in 2011, but went only 10 for 58 (.172) after June 30 this year. The Phillies declined a $5.5 million option on Polanco after the season, and he received a $1 million buyout.
Polanco was the 2006 AL championship series MVP for Detroit, and he also played for St. Louis. He has 2,044 hits, and he has won two Gold Gloves at second base and one at third.
A native of the Dominican Republic, Polanco has a home in Miami and attended Miami-Dade Community College.
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The 37-year-old, who can earn an additional $250,000 in performance bonuses, battled injuries this year and hit .257 with two home runs and 19 RBIs in 90 games with the Philadelphia Phillies. The 15-year veteran is a career .299 hitter with 103 homers.
Other projected starters include Logan Morrison at first base, Donovan Solano at second, Adeiny Hechavarria at shortstop, Jeff Brantly at catcher, Giancarlo Stanton in right field, Justin Ruggiano in center field and Juan Pierre in left field.
Hanley Ramirez played 90 games at third this year for Miami before being traded in July. That was part of the salary purge by the Marlins, who pared $146.5 million in future payroll when they swung a trade last month that sent former NL batting champion Jose Reyes, former NL ERA leader Josh Johnson and left-hander Mark Buehrle to Toronto.
The Marlins have a projected 2013 payroll of about $45.75 million. Their payroll on opening day this year was $112 million, not including money received in the Carlos Zambrano trade, but the team finished last in the NL East and drew smaller crowds than expected in its new ballpark.
Polanco was chosen to start in the All-Star game for the second time in 2011, but went only 10 for 58 (.172) after June 30 this year. The Phillies declined a $5.5 million option on Polanco after the season, and he received a $1 million buyout.
Polanco was the 2006 AL championship series MVP for Detroit, and he also played for St. Louis. He has 2,044 hits, and he has won two Gold Gloves at second base and one at third.
A native of the Dominican Republic, Polanco has a home in Miami and attended Miami-Dade Community College.
AP IMPACT: Steroids loom in major-college football
Labels: SportsWASHINGTON (AP) — With steroids easy to buy, testing weak and punishments inconsistent, college football players are packing on significant weight — 30 pounds or more in a single year, sometimes — without drawing much attention from their schools or the NCAA in a sport that earns tens of billions of dollars for teams.
Rules vary so widely that, on any given game day, a team with a strict no-steroid policy can face a team whose players have repeatedly tested positive.
An investigation by The Associated Press — based on interviews with players, testers, dealers and experts and an analysis of weight records for more than 61,000 players — revealed that while those running the multibillion-dollar sport say they believe the problem is under control, that control is hardly evident.
The sport's near-zero rate of positive steroids tests isn't an accurate gauge among college athletes. Random tests provide weak deterrence and, by design, fail to catch every player using steroids. Colleges also are reluctant to spend money on expensive steroid testing when cheaper ones for drugs like marijuana allow them to say they're doing everything they can to keep drugs out of football.
"It's nothing like what's going on in reality," said Don Catlin, an anti-doping pioneer who spent years conducting the NCAA's laboratory tests at UCLA. He became so frustrated with the college system that it was part of the reason he left the testing industry to focus on anti-doping research.
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EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
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While other major sports have been beset by revelations of steroid use, college football has operated with barely a whiff of scandal. Between 1996 and 2010 — the era of Barry Bonds, Mark McGwire, Marion Jones and Lance Armstrong — the failure rate for NCAA steroid tests fell even closer to zero from an already low rate of less than 1 percent.
The AP's investigation, drawing upon more than a decade of official rosters from all 120 Football Bowl Subdivision teams, found thousands of players quickly putting on significant weight, even more than their fellow players. The information compiled by the AP included players who appeared for multiple years on the same teams.
For decades, scientific studies have shown that anabolic steroid use leads to an increase in body weight. Weight gain alone doesn't prove steroid use, but very rapid weight gain is one factor that would be deemed suspicious, said Kathy Turpin, senior director of sport drug testing for the National Center for Drug Free Sport, which conducts tests for the NCAA and more than 300 schools.
Yet the NCAA has never studied weight gain or considered it in regard to its steroid testing policies, said Mary Wilfert, the NCAA's associate director of health and safety.
The NCAA attributes the decline in positive tests to its year-round drug testing program, combined with anti-drug education and testing conducted by schools.
The AP's analysis found that, regardless of school, conference and won-loss record, many players gained weight at exceptional rates compared with their fellow athletes and while accounting for their heights.
Adding more than 20 or 25 pounds of lean muscle in a year is nearly impossible through diet and exercise alone, said Dan Benardot, director of the Laboratory for Elite Athlete Performance at Georgia State University.
In nearly all the rarest cases of weight gain in the AP study, players were offensive or defensive linemen, hulking giants who tower above 6-foot-3 and weigh 300 pounds or more. Four of those players interviewed by the AP said that they never used steroids and gained weight through dramatic increases in eating, up to six meals a day. Two said they were aware of other players using steroids.
"I ate 5-6 times a day," said Clint Oldenburg, who played for Colorado State starting in 2002 and for five years in the NFL. Oldenburg's weight increased over four years from 212 to 290.
Oldenburg told the AP he was surprised at the scope of steroid use in college football, even in Colorado State's locker room. "There were a lot of guys even on my team that were using." He declined to identify any of them.
The AP found more than 4,700 players — or about 7 percent of all players — who gained more than 20 pounds overall in a single year. It was common for the athletes to gain 10, 15 and up to 20 pounds in their first year under a rigorous regimen of weightlifting and diet. Others gained 25, 35 and 40 pounds in a season. In roughly 100 cases, players packed on as much 80 pounds in a single year.
In at least 11 instances, players that AP identified as packing on significant weight in college went on to fail NFL drug tests. But pro football's confidentiality rules make it impossible to know for certain which drugs were used and how many others failed tests that never became public.
Even though testers consider rapid weight gain suspicious, in practice it doesn't result in testing. Ben Lamaak, who arrived at Iowa State in 2006, said he weighed 225 pounds in high school. He graduated as a 320-pound offensive lineman and said he did it all naturally.
"I was just a young kid at that time, and I was still growing into my body," he said. "It really wasn't that hard for me to gain the weight. I love to eat."
In addition to random drug testing, Iowa State is one of many schools that have "reasonable suspicion" testing. That means players can be tested when their behavior or physical symptoms suggest drug use. Despite gaining 81 pounds in a year, Lamaak said he was never singled out for testing.
The associate athletics director for athletic training at Iowa State, Mark Coberley, said coaches and trainers use body composition, strength data and other factors to spot suspected cheaters. Lamaak, he said, was not suspicious because he gained a lot of "non-lean" weight.
But looking solely at the most significant weight gainers also ignores players like Bryan Maneafaiga.
In the summer of 2004, Bryan Maneafaiga was an undersized 180-pound running back trying to make the University of Hawaii football team. Twice — once in pre-season and once in the fall — he failed school drug tests, showing up positive for marijuana use but not steroids.
He'd started injecting stanozolol, a steroid, in the summer to help bulk up to a roster weight of 200 pounds. Once on the team, he'd occasionally inject the milky liquid into his buttocks the day before games.
"Food and good training will only get you so far," he told the AP recently.
Maneafaiga's former coach, June Jones, said it was news to him that one of his players had used steroids. Jones, who now coaches at Southern Methodist University, believes the NCAA does a good job rooting out steroid use.
On paper, college football has a strong drug policy. The NCAA conducts random, unannounced drug testing and the penalties for failure are severe. Players lose an entire year of eligibility after a first positive test. A second offense means permanent ineligibility for sports.
In practice, though, the NCAA's roughly 11,000 annual tests amount to a fraction of all athletes in Division I and II schools. Exactly how many tests are conducted each year on football players is unclear because the NCAA hasn't published its data for two years. And when it did, it periodically changed the formats, making it impossible to compare one year of football to the next.
Even when players are tested by the NCAA, experts like Catlin say it's easy enough to anticipate the test and develop a doping routine that results in a clean test by the time it occurs. NCAA rules say players can be notified up to two days in advance of a test, which Catlin says is plenty of time to beat a test if players have designed the right doping regimen. By comparison, Olympic athletes are given no notice.
Most schools that use Drug Free Sport do not test for anabolic steroids, Turpin said. Some are worried about the cost. Others don't think they have a problem. And others believe that since the NCAA tests for steroids their money is best spent testing for street drugs, she said.
Doping is a bigger deal at some schools than others.
At Notre Dame and Alabama, the teams that will soon compete for the national championship, players don't automatically miss games for testing positive for steroids. At Alabama, coaches have wide discretion. Notre Dame's student-athlete handbook says a player who fails a test can return to the field once the steroids are out of his system.
The University of North Carolina kicks players off the team after a single positive test for steroids. Auburn's student-athlete handbook calls for a half-season suspension for any athlete caught using performance-enhancing drugs.
At UCLA, home of the laboratory that for years set the standard for cutting-edge steroid testing, athletes can fail three drug tests before being suspended. At Bowling Green, testing is voluntary.
At the University of Maryland, students must get counseling after testing positive, but school officials are prohibited from disciplining first-time steroid users.
Only about half the student athletes in a 2009 NCAA survey said they believed school testing deterred drug use. As an association of colleges and universities, the NCAA could not unilaterally force schools to institute uniform testing policies and sanctions, Wilfert said.
"We can't tell them what to do, but if went through a membership process where they determined that this is what should be done, then it could happen," she said.
Read More..
Rules vary so widely that, on any given game day, a team with a strict no-steroid policy can face a team whose players have repeatedly tested positive.
An investigation by The Associated Press — based on interviews with players, testers, dealers and experts and an analysis of weight records for more than 61,000 players — revealed that while those running the multibillion-dollar sport say they believe the problem is under control, that control is hardly evident.
The sport's near-zero rate of positive steroids tests isn't an accurate gauge among college athletes. Random tests provide weak deterrence and, by design, fail to catch every player using steroids. Colleges also are reluctant to spend money on expensive steroid testing when cheaper ones for drugs like marijuana allow them to say they're doing everything they can to keep drugs out of football.
"It's nothing like what's going on in reality," said Don Catlin, an anti-doping pioneer who spent years conducting the NCAA's laboratory tests at UCLA. He became so frustrated with the college system that it was part of the reason he left the testing industry to focus on anti-doping research.
___
EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
___
While other major sports have been beset by revelations of steroid use, college football has operated with barely a whiff of scandal. Between 1996 and 2010 — the era of Barry Bonds, Mark McGwire, Marion Jones and Lance Armstrong — the failure rate for NCAA steroid tests fell even closer to zero from an already low rate of less than 1 percent.
The AP's investigation, drawing upon more than a decade of official rosters from all 120 Football Bowl Subdivision teams, found thousands of players quickly putting on significant weight, even more than their fellow players. The information compiled by the AP included players who appeared for multiple years on the same teams.
For decades, scientific studies have shown that anabolic steroid use leads to an increase in body weight. Weight gain alone doesn't prove steroid use, but very rapid weight gain is one factor that would be deemed suspicious, said Kathy Turpin, senior director of sport drug testing for the National Center for Drug Free Sport, which conducts tests for the NCAA and more than 300 schools.
Yet the NCAA has never studied weight gain or considered it in regard to its steroid testing policies, said Mary Wilfert, the NCAA's associate director of health and safety.
The NCAA attributes the decline in positive tests to its year-round drug testing program, combined with anti-drug education and testing conducted by schools.
The AP's analysis found that, regardless of school, conference and won-loss record, many players gained weight at exceptional rates compared with their fellow athletes and while accounting for their heights.
Adding more than 20 or 25 pounds of lean muscle in a year is nearly impossible through diet and exercise alone, said Dan Benardot, director of the Laboratory for Elite Athlete Performance at Georgia State University.
In nearly all the rarest cases of weight gain in the AP study, players were offensive or defensive linemen, hulking giants who tower above 6-foot-3 and weigh 300 pounds or more. Four of those players interviewed by the AP said that they never used steroids and gained weight through dramatic increases in eating, up to six meals a day. Two said they were aware of other players using steroids.
"I ate 5-6 times a day," said Clint Oldenburg, who played for Colorado State starting in 2002 and for five years in the NFL. Oldenburg's weight increased over four years from 212 to 290.
Oldenburg told the AP he was surprised at the scope of steroid use in college football, even in Colorado State's locker room. "There were a lot of guys even on my team that were using." He declined to identify any of them.
The AP found more than 4,700 players — or about 7 percent of all players — who gained more than 20 pounds overall in a single year. It was common for the athletes to gain 10, 15 and up to 20 pounds in their first year under a rigorous regimen of weightlifting and diet. Others gained 25, 35 and 40 pounds in a season. In roughly 100 cases, players packed on as much 80 pounds in a single year.
In at least 11 instances, players that AP identified as packing on significant weight in college went on to fail NFL drug tests. But pro football's confidentiality rules make it impossible to know for certain which drugs were used and how many others failed tests that never became public.
Even though testers consider rapid weight gain suspicious, in practice it doesn't result in testing. Ben Lamaak, who arrived at Iowa State in 2006, said he weighed 225 pounds in high school. He graduated as a 320-pound offensive lineman and said he did it all naturally.
"I was just a young kid at that time, and I was still growing into my body," he said. "It really wasn't that hard for me to gain the weight. I love to eat."
In addition to random drug testing, Iowa State is one of many schools that have "reasonable suspicion" testing. That means players can be tested when their behavior or physical symptoms suggest drug use. Despite gaining 81 pounds in a year, Lamaak said he was never singled out for testing.
The associate athletics director for athletic training at Iowa State, Mark Coberley, said coaches and trainers use body composition, strength data and other factors to spot suspected cheaters. Lamaak, he said, was not suspicious because he gained a lot of "non-lean" weight.
But looking solely at the most significant weight gainers also ignores players like Bryan Maneafaiga.
In the summer of 2004, Bryan Maneafaiga was an undersized 180-pound running back trying to make the University of Hawaii football team. Twice — once in pre-season and once in the fall — he failed school drug tests, showing up positive for marijuana use but not steroids.
He'd started injecting stanozolol, a steroid, in the summer to help bulk up to a roster weight of 200 pounds. Once on the team, he'd occasionally inject the milky liquid into his buttocks the day before games.
"Food and good training will only get you so far," he told the AP recently.
Maneafaiga's former coach, June Jones, said it was news to him that one of his players had used steroids. Jones, who now coaches at Southern Methodist University, believes the NCAA does a good job rooting out steroid use.
On paper, college football has a strong drug policy. The NCAA conducts random, unannounced drug testing and the penalties for failure are severe. Players lose an entire year of eligibility after a first positive test. A second offense means permanent ineligibility for sports.
In practice, though, the NCAA's roughly 11,000 annual tests amount to a fraction of all athletes in Division I and II schools. Exactly how many tests are conducted each year on football players is unclear because the NCAA hasn't published its data for two years. And when it did, it periodically changed the formats, making it impossible to compare one year of football to the next.
Even when players are tested by the NCAA, experts like Catlin say it's easy enough to anticipate the test and develop a doping routine that results in a clean test by the time it occurs. NCAA rules say players can be notified up to two days in advance of a test, which Catlin says is plenty of time to beat a test if players have designed the right doping regimen. By comparison, Olympic athletes are given no notice.
Most schools that use Drug Free Sport do not test for anabolic steroids, Turpin said. Some are worried about the cost. Others don't think they have a problem. And others believe that since the NCAA tests for steroids their money is best spent testing for street drugs, she said.
Doping is a bigger deal at some schools than others.
At Notre Dame and Alabama, the teams that will soon compete for the national championship, players don't automatically miss games for testing positive for steroids. At Alabama, coaches have wide discretion. Notre Dame's student-athlete handbook says a player who fails a test can return to the field once the steroids are out of his system.
The University of North Carolina kicks players off the team after a single positive test for steroids. Auburn's student-athlete handbook calls for a half-season suspension for any athlete caught using performance-enhancing drugs.
At UCLA, home of the laboratory that for years set the standard for cutting-edge steroid testing, athletes can fail three drug tests before being suspended. At Bowling Green, testing is voluntary.
At the University of Maryland, students must get counseling after testing positive, but school officials are prohibited from disciplining first-time steroid users.
Only about half the student athletes in a 2009 NCAA survey said they believed school testing deterred drug use. As an association of colleges and universities, the NCAA could not unilaterally force schools to institute uniform testing policies and sanctions, Wilfert said.
"We can't tell them what to do, but if went through a membership process where they determined that this is what should be done, then it could happen," she said.
Cleared Minnesota college coach fights suspension
Labels: SportsMINNEAPOLIS (AP) — A Minnesota college football coach who was cleared of child porn charges is fighting a suspension, his union said Thursday, although neither it nor the university would say what prompted the punishment or shed light on his prospects for reinstatement.
Coach Todd Hoffner received a written notice from Minnesota State University, Mankato late Tuesday afternoon about a 20-day unpaid suspension that begins Jan. 7, the general counsel for the Inter Faculty Organization said in an email to The Associated Press. Connie Howard said the union has filed a grievance challenging the suspension.
Hoffner was put on paid administrative leave after videos of his naked children were found on his university-issued cellphone in August. A judge ruled Nov. 30 that the videos were not pornographic and dismissed the felony charges against Hoffner, accepting his testimony that the videos merely showed his children acting silly after a bath.
"The grievance charges that the university failed to follow progressive discipline and did not have just cause to issue the suspension," Howard wrote. She declined to provide further details and would not say what reason the university gave for Hoffner's suspension, whether it was related to the videos or what his prospects might be for being reinstated as head coach of the Mavericks.
The MnSCU system has a policy prohibiting the use of university-issued cellphones or mobile devices for personal business.
Hoffner was beginning a new four-year contract when he was escorted off a practice field in August, a few days after he returned his malfunctioning phone to the school. University technicians found the videos and notified university officials, who contacted police. Hoffner was not allowed back and had to miss the Mavericks' 13-1 season, including their appearance in the NCAA Division II semifinals Dec. 8. He had a 34-13 record in his first four years at Mankato.
Minnesota State issued a brief statement Wednesday night saying Hoffner's administrative leave ended Monday and he remains on the university's payroll, but Aaron Keen remains acting coach.
"One complaint against the football coach was investigated and the investigation has been completed. One complaint against Mr. Hoffner is pending and is under investigation," the statement said without elaboration.
University spokesman Dan Benson, citing privacy laws, told the AP he couldn't comment on the nature of the complaints.
"The word 'reinstated' would not be accurate," Benson said. "He is no longer on leave. He remains on the payroll ... but he has not assumed duties as the head football coach again at this time."
Hoffner could not be reached immediately for comment Thursday. He does not have a listed phone number. His civil attorney, Chris Madel, was in court and unavailable Thursday. His attorney for the criminal case, Jim Fleming, said he was not directly involved in the personnel case.
Minnesota State athletics director Kevin Buisman did not immediately return a call seeking comment Thursday.
Read More..
Coach Todd Hoffner received a written notice from Minnesota State University, Mankato late Tuesday afternoon about a 20-day unpaid suspension that begins Jan. 7, the general counsel for the Inter Faculty Organization said in an email to The Associated Press. Connie Howard said the union has filed a grievance challenging the suspension.
Hoffner was put on paid administrative leave after videos of his naked children were found on his university-issued cellphone in August. A judge ruled Nov. 30 that the videos were not pornographic and dismissed the felony charges against Hoffner, accepting his testimony that the videos merely showed his children acting silly after a bath.
"The grievance charges that the university failed to follow progressive discipline and did not have just cause to issue the suspension," Howard wrote. She declined to provide further details and would not say what reason the university gave for Hoffner's suspension, whether it was related to the videos or what his prospects might be for being reinstated as head coach of the Mavericks.
The MnSCU system has a policy prohibiting the use of university-issued cellphones or mobile devices for personal business.
Hoffner was beginning a new four-year contract when he was escorted off a practice field in August, a few days after he returned his malfunctioning phone to the school. University technicians found the videos and notified university officials, who contacted police. Hoffner was not allowed back and had to miss the Mavericks' 13-1 season, including their appearance in the NCAA Division II semifinals Dec. 8. He had a 34-13 record in his first four years at Mankato.
Minnesota State issued a brief statement Wednesday night saying Hoffner's administrative leave ended Monday and he remains on the university's payroll, but Aaron Keen remains acting coach.
"One complaint against the football coach was investigated and the investigation has been completed. One complaint against Mr. Hoffner is pending and is under investigation," the statement said without elaboration.
University spokesman Dan Benson, citing privacy laws, told the AP he couldn't comment on the nature of the complaints.
"The word 'reinstated' would not be accurate," Benson said. "He is no longer on leave. He remains on the payroll ... but he has not assumed duties as the head football coach again at this time."
Hoffner could not be reached immediately for comment Thursday. He does not have a listed phone number. His civil attorney, Chris Madel, was in court and unavailable Thursday. His attorney for the criminal case, Jim Fleming, said he was not directly involved in the personnel case.
Minnesota State athletics director Kevin Buisman did not immediately return a call seeking comment Thursday.
McDonald's Canada Reveals How They Make Famous Fries
Labels: BusinessMcDonald'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.
Read More..
Earnings from McDonald's, Microsoft sink stocks
Labels: BusinessNEW 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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Who Owns America’s Debt?
Labels: BusinessAs the U.S. continues to rack up more than $1 trillion of new debt every year, Americans are beginning to worry about who we owe this money to and how much power our creditors have over us.
According to Barry P. Bosworth, a senior fellow at the Brookings Institution, our two biggest foreign creditors are Japan and China.
Although it may seem as though our debt to these countries renders us a puppet on strings, Bosworth says this fear is overblown. The U.S. market is very important to China's economy, so China would be loathe to do anything that might exacerbate tensions or disrupt trade between the two countries. And the same can be said for Japan. China owns $1.15 trillion of U.S. government debt -- more than any other country -- but U.S. taxpayers actually owe less money to China compared to recent years. China holds 10% of U.S. Treasuries, down from 12% two years ago.
Related: China's Slow Growth 'Marks An End of an Era' But No Hard Landing
And what about all the anti-China rhetoric that we hear about on the campaign trail?
Republican Presidential Nominee Mitt Romney has been promising the country that he will declare China a "currency manipulator" on the first day of his presidency--and then enact tariffs as necessary until he forces China to level the trading playing field. Is that something that Romney is actually likely to do if he gets elected?
No, says Bosworth.
Tough talk with respect to China has become standard rhetoric for any presidential challenger. If and when Romney becomes president, his position will likely mellow.
Bosworth also says that the problem with the U.S.-China trade relationship is not, as is commonly believed, that China doesn't play fair. China has actually addressed lots of its unfair practices over the past decade, Bosworth says, while the U.S. is still pursuing the same old self-destructive habits. Until we stop consuming so much and start producing more, Bosworth says, we're in no position to demand anything.
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Google filing error shocks investors, exposes process
Labels: BusinessSAN FRANCISCO/NEW YORK (Reuters) - R.R. Donnelley & Sons Co handles thousands of securities filings a year for corporate clients in a routine process that is invisible to most investors. On Thursday Google and its shareholders found out just what happens when that process goes wrong.
Google issued a statement blaming Donnelley, its filing agent, after the Internet search company's quarterly results were released by the U.S. Securities and Exchange Commission hours ahead of schedule.
Earnings were far less than analysts expected and Google shares immediately plunged as much as 10.5 percent, knocking $26 billion off its market capitalization - the equivalent, as it happens, of about 13 R.R. Donnelleys.
It was quickly obvious that a mistake had been made -- the second paragraph of the filing said "PENDING LARRY QUOTE" instead of an actual quote from Google CEO Larry Page -- but it was not clear why.
Within minutes, though, an unknown prankster set up a "PendingLarry" Twitter feed to hypothesize what the missing quote might be. Among the highlights: "Man, our privacy was WAY violated today."
Donnelley shares lost more than 5 percent after Google started pointing the finger, though they recovered later in the day. The company did not respond to a call for comment, but issued a statement to CNBC in which it said it was investigating the circumstances of the release.
Best known as a provider of printing services, Donnelley is also the top SEC filing agent in the country, handling more than 75,000 submissions this year as of mid-October, according to SECInfo.com.
Filing agents like Donnelley take paper documents and convert them for submission to the SEC in the appropriate format. The company also owns the filing portal EDGAR Online.
WHO GOOFED?
It is far from the first time a company's earnings have somehow gotten out early.
In late 2010 and early 2011, inadvertent releases - usually by a misplaced release on a website - plagued companies like Walt Disney Co (NYS:DIS) and Microsoft Corp (NSQ:MSFT).
The common thread in all of those cases is that investors who are not in the right place at the right time to see the news may suffer for it.
"Some who didn't get a chance to sell will try to, and others will be looking for bargains. I'm sure a lot of Google owners were caught off guard," said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.
After the first question of "who goofed?" was sorted out Thursday afternoon, the second one being asked by investors was "can we sue?"
"Everyone is trying to figure out if there's any legal issue with respect to R.R. Donnelley. Google is halted, Donnelley is down big-time on the news since they're allegedly not supposed to have released the information," said Michael Matousek, senior trader at U.S. Global Investors in San Antonio.
But one plaintiffs lawyer who sues companies on behalf of investors said shareholders would not have a claim against either Google or R.R. Donnelley because the earnings disclosure was likely a mistake.
"There's no fraudulent intent here," said Reed Kathrein with Hagens Berman.
R.R. Donnelley may not be entirely off the hook with Google, however. The company could have a negligence claim to recover any additional costs it incurred in responding to the incident, Kathrein said.
Any potential damages against R.R. Donnelley could be limited, though, by the contract between the two companies.
Late Thursday, Google filed an amended press release with the missing quote and a confirmation that the figures in the original were accurate.
R.R. Donnelley shares were up 2 cents at $10.87 in late trading. Google was down 8.1 percent to $693.94 after trading resumed.
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US housing construction up 15 percent in September
Labels: BusinessWASHINGTON (AP) -- U.S. builders started construction on single-family homes and apartments in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening.
The Commerce Department said Wednesday that builders broke ground on homes at a seasonally adjusted annual rate of 872,000 in September. That's an increase of 15 percent from the August level.
Applications for building permits, a good sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, also the highest since July 2008.
[Click here to see home loan rates in your area.]
The strength in September came from both single-family construction, which rose 11 percent, and apartments, which increased 25.1 percent.
Construction activity is now 82.5 percent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate that is consistent with healthier markets.
Still, the surge in construction suggests builders believe the housing rebound is durable.
Builder confidence reached at a six-year high this month, according to a survey by the National Association of Home Builders. The group's index of builder sentiment rose to a reading of 41. While that's still below the level of 50 that signals a healthy market, it has steadily climbed over the past year from a reading of 17.
Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains.
Record-low mortgage have encouraged more people to buy. And the Federal Reserve's aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future.
Housing is expected to keep improving next year. But many economists say economic growth will stay muted until companies step up hiring and consumers start spending more.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.
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