Business Headlines For September 10, 2009

Geithner Gearing Up To Shift Gears

WASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner said on Thursday the economy has regained enough strength to allow a shift in strategy from rescue to preparing for future growth.

“As we enter this new phase we must begin winding down some of the extraordinary support we put in place for the financial system,” he said in prepared remarks for delivery to the Congressional Oversight Panel for the bank bailout fund.

Geithner said banks that got capital injections in the form of taxpayer-provided funds have repaid more than $70 billion, reducing the government’s total investment to $180 billion. “We now estimate that banks will repay another $50 billion over the next 12 to 18 months,” he added.

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PG To Slash Prices In Order To Boost Sales

By ANJALI CORDEIRO

Procter & Gamble Co. said it will cut prices and increase promotions across nearly 10% of its portfolio, and the consumer-products company expects the moves to drive sales growth.

Speaking at a Barclays conference, P&G executives said the company is likely to return to organic sales growth in its second quarter, which ends in December. For the second quarter, P&G expects organic sales growth of 1% to 4%.

That follows two quarters of organic sales declines. Organic sales are a closely watched measure that exclude the impact of acquisitions and other items.

Speaking to investors during a conference call, Chief Executive Bob McDonald and Chief Financial Officer Jon Moeller announced measures to boost market share.

The company is being watched closely, particularly on pricing and efforts to revive sales. P&G, which in recent years has increased its emphasis on higher-end products, has been hurt during the recession as consumers shifted to less-expensive competitors and private-label offerings. P&G lost market share in some categories. In particular, the shifts in consumer spending hurt the company’s key laundry category and its higher-priced Tide brand.

On Thursday, the company said it will reposition its Cheer detergent brand to target consumers looking for bargains and will cut prices 13%. P&G already has announced a test for a less-expensive version of Tide called Basic. The company says lower commodity costs and a moderation in pressures from foreign-exchange translation are giving it some financial flexibility to improve marketing and change prices.

For fiscal year 2010, P&G confirmed previous guidance for organic sales growth of 1% to 3%. P&G now expects fiscal 2010 earnings per share in the range of $3.99 to $4.12, including a one-time gain of 44 cents a share from the sale of the company’s pharmaceutical business, which will be partially offset by 10 cents to 12 cents of earnings dilution related to the transaction.

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Stocks Move Higher After Morning Indecision

By Jeff Kearns

Sept. 10 (Bloomberg) — U.S. stocks rose for a fifth day, the longest streak for the Standard & Poor’s 500 Index since November, as a raised forecast for oil demand boosted energy shares and jobless claims slid to the lowest level since July.

Chevron Corp. and Exxon Mobil Corp. advanced as the International Energy Agency said Chinese consumption and stronger-than-expected oil use in the U.S. will boost demand. Consumer and technology shares rose as Procter & Gamble Co. forecast earnings that topped estimates and analysts recommended Yahoo! Inc. The S&P 500 advanced above its highest close since Oct. 6 after weekly jobless claims decreased by 26,000 to 550,000, lower than economists forecast.

“The jobs number was another confirmation that the economy may have reached the bottom,” said Wasif Latif, who helps oversee $90 billion at USAA Investment Management Co. in San Antonio.

The S&P 500 added 0.3 percent to 1,036.51 at 12:33 p.m. in New York. The Dow Jones Industrial Average increased 26.23 points, or 0.3 percent, to 9,573.45. Europe’s benchmark index rose 0.2 percent while Asia’s rallied 1.4 percent.

The S&P 500 jumped to an 11-month high yesterday as Goldman Sachs Group Inc. recommended industrial companies and investor Michael Price said he’s finding value in American equities. The benchmark index for U.S. equities has rebounded 53 percent from a 12-year low on March 9 amid signs the recession is easing and better-than-estimated earnings at companies from Johnson & Johnson to Goldman Sachs…….

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Chart of the Day

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Asian Markets Rise Quite Nicely on Earnings Speculation

By Patrick Rial

Sept. 10 (Bloomberg) — Asian stocks rose, sending the MSCI Asia Pacific Index to the highest level since the collapse of Lehman Brothers Holdings Inc., as profit from China Yurun Food Group rose and Texas Instruments Inc. lifted its forecasts.

China Yurun Food Group Ltd., the country’s biggest hog processor, jumped 7.4 percent after first-half profit rose 37 percent. Elpida Memory Inc., Japan’s largest computer memory maker, gained 3.4 percent after chipmaker Texas Instruments raised its third-quarter sales and earnings forecasts. Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., gained 5 percent after saying it is seeing “pretty strong” re-orders from retailers.

“Investors are looking to upcoming earnings reports where we’re likely to see a fair number of companies lifting forecasts,” said Junichi Misawa, who helps oversee about $3 billion of Japanese equities at STB Asset Management Co. in Tokyo. “The market should stay strong into the end of the year, although after that we could see a pullback as stimulus measures run their course.”

The MSCI Asia Pacific climbed 1.2 percent to 116.88 as of 7:24 p.m. in Tokyo. It earlier touched 117.37, the highest intraday level since Sept. 10, 2008. That date is five days before Lehman filed for bankruptcy, helping to cause the credit market seizure that dragged the global economy into recession. The MSCI gauge has surged 65 percent in the past six months on speculation growth is recovering.

Japan’s Nikkei 225 Stock Average climbed 2 percent. Hong Kong’s Hang Seng Index gained 1.1 percent. Benchmark indexes throughout Asia rose, except in Pakistan and China. The Shanghai Composite Index sank 0.7 percent, the first drop in eight days…..

European Markets Trade Lower Led By Retailers & Basic Resource Producers

By Daniela Silberstein

Sept. 10 (Bloomberg) — U.S. stock-index futures declined, indicating the Standard & Poor’s 500 Index may drop from an 11- month high, as Monsanto Co. forecast lower earnings. European stocks retreated, while Asian shares advanced.

Monsanto Co., the world’s largest producer of seeds, fell 3 percent. Yahoo! Inc. climbed 2.4 percent after Bank of America Corp. recommended buying shares of the second-most popular U.S. Internet search engine. Schlumberger Ltd. and Exxon Mobil Corp. rose as crude oil gained for a fourth day.

Futures on the S&P 500 expiring this month slipped 0.2 percent to 1,030.7 as of 11:25 a.m. in London, after rising as much as 0.5 percent earlier. Dow Jones Industrial Average futures decreased 0.1 percent to 9,527. Nasdaq-100 Index futures lost less than 0.1 percent to 1,665.5.

The S&P 500 yesterday jumped for a fourth straight day as Goldman Sachs Group Inc. recommended industrial companies and investor Michael Price said he’s finding value in American equities. The benchmark index for U.S. equities has rebounded 53 percent from a 12-year low on March 9 as reports from consumer confidence to home sales signaled the recession is easing and companies from Johnson & Johnson to Goldman Sachs posted earnings that beat analysts’ estimates.

“It’s become clear that the worst is over and we won’t get back to the scenario in spring,” said Urs Eilinger, Zurich- based chief investment officer at Infidar Investment Advisory Ltd., which manages about $3.2 billion. “September will probably end relatively flat but we could see markets gain another 10 percent by the end of the year.”

Oil Trades Narrowly @ Roughly $72

Oil prices rose to almost $72 a barrel Thursday, helped by a weaker U.S. dollar, steady OPEC production levels and a new report predicting a less severe slump this year in global oil demand.

By midday in Europe, benchmark crude for October delivery was up 50 cents to $71.81 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the day, the contract peaked at $72.44. On Wednesday, the contract rose 21 cents to settle at $71.31.

Crude has jumped from $68 a barrel in two days as the dollar weakened to its lowest level this year. Because crude is priced in the U.S. currency, it becomes cheaper when the dollar falls. Some investors also use commodities like oil and gold as a hedge against inflation and dollar weakness.

The euro was slightly lower Thursday at $1.4532 after breaking through $1.46 on Wednesday, its highest level in a year. The British pound also fell marginally to $1.6525 compared with $1.6569 late Wednesday in New York.

The Organization of Petroleum Exporting Countries confirmed early Thursday at its meeting in Vienna that it would keep crude output unchanged.

OPEC said “market fundamentals have remained weak” and that “whilst there are signs that economic recovery is under way, there remains great concern about the magnitude and pace of this recovery,” especially in the West.

“Since the market remains oversupplied and given the downside risks associated with the extremely fragile recovery, (OPEC) once again agreed to leave current production levels unchanged for the time being,” said an OPEC statement released at the end of the meeting.

Meanwhile in Paris, the International Energy Agency said the slump in global oil demand in 2009 would be less severe than previously forecast and predicted consumption would rise in 2010 as the world economy stabilizes.

The IEA said Thursday that crude demand would reach 84.4 million barrels a day this year, down 2.2 percent from 2008 levels – but better than the 2.7 percent decline the agency forecast previously.

The IEA also raised its forecast for oil demand in 2010 to 85.7 million barrels a day, or half a million barrels a day more than its previous forecast.

In other Nymex trading, gasoline for October delivery was steady at $1.83 a gallon, and heating oil gained 0.95 cent to $1.80 a gallon. Natural gas rose 4.3 cents to $2.87 per 1,000 cubic feet.

In London, Brent crude was up 62 cents to $70.45 on the ICE Futures exchange.

BoK Keeps Rates Unchanged

BoE Keeps Rates Unchanged

China Stays Steadfast on Supporting Stimulus Fpr Economy

By Bloomberg News

Sept. 10 (Bloomberg) — China’s Premier Wen Jiabao said the nation “cannot and will not” pull back from policies designed to revive the world’s third-biggest economy.

Stimulus measures have “yielded initial results and we have arrested the downturn in economic growth,” Wen said today in the keynote speech at the World Economic Forum in Dalian, a city in northeastern China.

The Chinese economy is rebounding from its slowest expansion in almost a decade on record lending in the first half and a 4 trillion yuan ($586 billion) stimulus package. Falling exports, overcapacity in manufacturing and elevated unemployment have restrained the recovery.

“The worst has passed, now it’s about whether China can maintain the strong momentum of a recovery that’s primarily been driven by policy stimulus,” said Wang Qing, chief Asia economist for Morgan Stanley in Hong Kong. “Very weak external demand is the key concern.”

Wen said the government will continue with a moderately loose monetary policy and a “proactive” fiscal policy.

He said he saw “the light of dawn” for a recovering world economy and added that domestic demand is playing a bigger role in China’s economy.

The government said yesterday that the employment situation remains “grave,” underscoring the need to promote economic growth to create jobs and preserve social stability as the Communist Party prepares to celebrate 60 years of rule on Oct. 1…..

Chevron Completes LNG Deal For $60 bln

By Dinakar Sethuraman and Jason Scott

Sept. 10 (Bloomberg) — Chevron Corp.’s Gorgon liquefied natural gas project completed agreements to sell stakes in the Western Australian venture and A$70 billion ($60 billion) of the fuel to Japan and South Korea.

Chevron, which has the right to sell half of the output from the 15 million metric ton-a-year plant, will ship almost 3 million tons of LNG annually to Tokyo Gas Co.,Osaka Gas Co. and GS Caltex Corp. starting in 2014, it said in a statement today.

Chevron and its partners in the A$50 billion venture, Royal Dutch Shell Plc and Exxon Mobil Corp., are “just a matter of weeks” from making a final decision on whether to proceed with the project, the head of Chevron’s Australian operations said Sept. 1. The Japanese and South Korean contracts could deliver A$70 billion in exports to Australia, Prime Minister Kevin Rudd said in Parliament today.

“Gorgon’s highly likely to go ahead now, and I’d be expecting an announcement with a week from Chevron and its partners that it will proceed,” Mark Greenwood, a Sydney-based energy analyst for JPMorgan Chase & Co., said in a phone interview today. “I think they’ll come out with their final capital cost number. There’s a lot of details I’d like to know, but I’m not sure how much will be revealed. There are a lot of contractors that stand to do well from this.”

Tokyo, Osaka

Tokyo Gas, Japan’s largest natural-gas distributor, will buy 1.1 million tons annually of Gorgon LNG from Chevron and Osaka Gas 1.375 million tons over 25 years. Tokyo Gas agreed to take a 1 percent stake in the project and Osaka Gas 1.25 percent, the San Ramon, California-based company said. South Korea’s GS Caltex Corp. will buy 500,000 tons a year for 20 years, without becoming an investor.

Tokyo Gas, Osaka Gas and Chubu Electric Power Co. agreed in 2005 to buy a combined 4.3 million tons a year of the cleaner- burning fuel from Chevron’s Gorgon venture to secure supplies as competition for the fuel intensifies with China and India. The utilities currently buy LNG from Australia’s North West Shelf LNG project operated by Woodside Petroleum Ltd.

Chubu Electric, Japan’s third-largest generator, is in talks to buy less than 1 percent of the Gorgon project, and aims to complete discussions with Chevron within the year, Yuji Kakimi, general manager at its fuel department, said last month. Chubu agreed to buy 1.6 million tons a year of LNG from Gorgon for 25 years.

Australia’s LNG Growth

Australia, the world’s sixth-biggest LNG supplier last year according to BP Plc’s 2009 energy review, and Papua New Guinea will boost output of LNG to as much as 100 million metric tons from about 20 million tons to together become the world’s biggest LNG producer, Bernstein analyst Neil Beveridge said in a report dated Sept. 9. That would require an investment of about $100 billion, he said.

Exxon has signed a contract to supply gas from Gorgon to PetroChina Co. valued by the Australian government at A$50 billion and will sell the rest of its share of output to India’s Petronet LNG Ltd….

U.K. Home Prices Bounce 0.08%

By Jennifer Ryan

Sept. 10 (Bloomberg) — U.K. house prices rose for a second month in August as low borrowing costs lured homebuyers, a report by Halifax showed.

Home values climbed 0.8 percent to an average of 160,973 pounds ($266,000) after rising 1.2 percent in the previous month, the division of Lloyds Banking Group Plc said in a statement today. The median forecast of 14 economists in a Bloomberg News survey was for a 1 percent increase. Prices were down 7.6 percent from a year earlier.

The report adds to evidence that the property slump is easing. Mortgage approvals rose to a 15-month high in July. The Bank of England will probably continue a plan to buy 175 billion pounds of bonds with newly created money to cement the economy’s recovery from the worst recession in a generation.

“Demand for housing has increased since the start of the year due to better affordability and low interest rates,” Martin Ellis, housing economist at Halifax, said in the statement. “This, together with low levels of property available for sale, has boosted house prices over the last few months.”

The central bank will maintain the size of its bond purchase program, according to all 35 economists in a Bloomberg News survey. Policy makers will also keep the benchmark interest rate at a record low of 0.5 percent, all 60 economists in a separate survey said. The bank announces the decision at noon in London today.

WSJ Reports The FDIC Will Wind Down Debt Guarantee For Banks

By DAMIAN PALETTA and MARK GONGLOFF

WASHINGTON — The Federal Deposit Insurance Corp. is preparing to wind down an emergency program it launched last year, which could become an early test of how the banking industry will fare without extraordinary government assistance.

The FDIC’s program, which guaranteed debt issued by banks, is credited with helping to stabilize the financial system during last year’s turmoil. The agency said it was considering either letting the debt-guarantee program expire on Oct. 31, or continuing it for another six months for “emergency” purposes. The latter would require case-by-case approval from FDIC Chairman Sheila Bair and a hefty fee from participants. “As domestic credit and liquidity markets appear to be normalizing and the number of entities utilizing the Debt Guarantee Program has decreased, now is an important time to make clear our intent to end the program,” Ms. Bair said.

The debt-guarantee program is a part of the Temporary Liquidity Guarantee Program, which Ms. Bair reluctantly agreed to implement last fall under pressure from then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. Many credit it with helping bring the banking industry back from the brink of collapse because it allowed banks, for a fee, to issue new debt with government backing that protects investors in the event of a collapse.

Banks leapt at the opportunity. As of Sept. 4, there was $304.14 billion in FDIC-backed debt outstanding, including promissory notes, commercial paper and unsecured portions of secured debt. To enact the program, the FDIC had to cite a “systemic risk” to the economy. The agency has collected roughly $9.3 billion in fees from banks that have participated, and to date has not faced any guarantee payouts.

Banks need to issue debt to fund their operations. When credit markets seized last year, the cost of issuing debt spiked because of worries that banks would later go bust. Many government officials and bankers believe the FDIC’s program allowed banks to access funding at a time when they otherwise would have been frozen out.

As worries about the stability of the banking system have eased, many financial firms have been able to issue debt relatively cheaply without government backing. The program’s largest users have issued more than $81.3 billion in medium-term debt outside of the program, according to data provider Dealogic. The number of government-backed deals, which hit a high of 60 in the first quarter, fell to eight in the third quarter.

The FDIC discussions represent an early example of how the banking industry and the federal government are gingerly unwinding their interconnected relationship. Next week, a government guarantee protecting investors against losses on money-market mutual funds is also set to expire, and officials say they expect to let it do so. In other areas, such as the housing market, government support will be harder to withdraw.

The biggest users of the debt-guarantee program were General Electric Co. and Citigroup Inc. Others, such as GMAC, the auto and housing lender that is essentially a ward of the state, relied heavily on it. Anne Eisele, a spokeswoman for GE, said the company has issued about $18 billion in debt without government guarantees and had already announced plans to stop using the program.

The FDIC proposed two options Wednesday for its exit strategy. One option is to allow the program to expire as scheduled on Oct. 31. Banks would not be able to issue any new government-backed debt after that date.

The other option is to wind down the program for most banks on Oct. 31, but to allow the FDIC to guarantee debt in “emergency” situations through April 30. Some government officials believe the FDIC might agree to that alternative because it gives the government flexibility if credit markets seize up again. The FDIC said federally insured banks and “certain other entities” participating in the program would be eligible.

The FDIC’s proposal said any company participating in the “emergency” scenario would face an annualized fee of at least 300 basis points, or 3% of the amount of debt issued, substantially more than the 75 basis points initially charged. The FDIC could increase the fee if it felt the case posed a greater risk to the agency.

Automakers Unlikely To Repay Loans

By MEENA THIRUVENGADAM

WASHINGTON — The Treasury Department drove a hard bargain but likely won’t recoup taxpayers’ entire investments in General Motors Co. and Chrysler Group LLC, said a report from a congressional panel overseeing government bailouts of the banking and auto sectors.

The panel, though, commended the Treasury’s efforts to function as a tough negotiator for structuring deals to save the ailing auto makers.

“They may have driven the best bargain they could, but it may not be enough,” said Elizabeth Warren, a Harvard University law professor and the panel’s chairwoman.

The report cited remarks from Obama administration manufacturing adviser Ron Bloom, who previously ran the Treasury’s auto-rescue efforts and indicated last month “it was possible but unlikely that taxpayers would recover all of the money they had invested in Chrysler and General Motors.”…..

ASML Raise 3rd Q Guidance

By MAARTEN VAN TARTWIJK

AMSTERDAM — ASML Holding NV raised its third-quarter forecast Thursday, marking the latest sign of recovery in the semiconductor sector after Texas Instruments Inc. Wednesday raised its third-quarter outlook.

The Dutch semiconductor-equipment maker said that it now expects net sales will be above €500 million ($727.7 million) both in the third and the fourth quarter and expects bookings in the third-quarter will be “significantly above that level.” It was the first time ASML gave a concrete forecast for the fourth quarter.

ASML previously expected sales in the third-quarter to be around €450 million, and in the following quarters to be between €400 million and €500 million.

The company’s shares soared on the news, rising 6.7% to €21.45 and strongly outperforming Amsterdam’s AEX.

The rise in third-quarter bookings is mainly a result of chip makers investing in new technology rather than restocking as “inventories at clients appear to remain very healthy,” company spokesman Lucas van Grinsven said.

Demand for memory chips and data-processors — which are used in mobile phones, DVD’s and video games — has strongly improved and chip makers are now looking to produce faster-working chips at lower costs, Mr. Van Grinsven said.

ASML is the world’s largest maker of lithography systems, which map out tiny electronic circuits on silicon wafers. It counts Intel Corp., Samsung Electronics Co. Ltd. and Taiwan Semiconductor Manufacturing Co. among its customers.

ASML’s announcement comes one day after Texas Instruments said it now expects earnings of 37 cents to 41 cents a share on revenue of $2.73 billion to $2.87 billion, driven by chiefly by analog chips used in consumers electronics and automobiles. TI had previously forecast earnings of 29 cents to 39 cents a share on revenue of $2.5 billion to $2.8 billion.

The company also expects to see sequential growth in embedded and wireless chips, though the wireless segment isn’t expected to grow as quickly as its other units. In July, TI made clear that the huge drop in chip purchases seen earlier in the year was over as the supply chain for tech products was returning to normal.

Coupled with Texas Instruments’ improved forecast, ASML’s news helped boost other European semiconductor stocks. STMicroelectronics NV, Europe’s largest chip maker, rose more than 3% while Germany’s Infineon Techologies AG added 3.5%.

Top Economists State The Worst is Over

WASHINGTON (Reuters) – The U.S. employment picture will stay bleak well into next year long after the recession ends, but the worst of the labor market crisis is over, top private economists said on Thursday.

Private economists polled for the Blue Chip Economic Indicators September survey say the unemployment rate will reach at least 10 percent in early 2010 and “recede from that level only grudgingly over the second half of the year”.

More than 80 percent of the 52 private forecasters polled say the recession that started in December 2007 has ended. They look for gross domestic product to expand at a brisk 3.0 percent annual rate in the third quarter of 2009 and rise 2.4 percent in the fourth quarter.

This compares to growth rates of 2.2 percent and 2.3 percent respectively forecast in the previous survey.

For the year as a whole, the economy is expected to shrink 2.6 percent, the same consensus for July and August. In 2010 the economy will likely expand at a 2.4 percent pace, the survey said.

The latest survey was taken Sept 2-3, just before the release of the government’s monthly report on jobs last week. In that report, the Labor Department put the jobless rate at 9.7 percent during August, the highest since June 1983, while employers cut 216,000 jobs, the smallest since August 2008.

The private forecasters said they anticipate only a very gradual improvement in labor market conditions and that the economy will continue to shed jobs through the end of this year though at a diminishing pace.

The Blue Chip forecasters, including economists from major corporations, banks, business associations and consulting firms, say lengthening workweeks will give way to job growth, lifting household incomes and boosting consumer spending.

“Firms will respond by beginning to rebuild inventories, accelerating growth in industrial production and eventually encouraging stepped up capital spending as excess capacity is eaten away,” the panel of economists said.

The resumption of economic growth in the second half of 2009 is based on restocking of inventories now at record low levels, a modest rebound in consumer spending and an improvement in residential investment, the survey said.

The projected improvement in consumer spending, which accounts for a third of U.S. economic activity, reflected a surge in light vehicle sales in response to the government’s “cash-for-clunkers” program, the survey said.

The government offered consumers up to $4,500 when they traded in gas-guzzling old cars for more fuel efficient new ones, triggering a jump in demand and an increase in production from automakers.

Foreclosures Persist @ New Highs

By Lynn Adler

NEW YORK (Reuters) – U.S. mortgage foreclosure filings in August hovered near July’s record high despite broad efforts to keep borrowers in their homes and will probably rise for another year, according to a report released on Thursday.

Filings — including notices of default, auction and bank repossession — dipped 1 percent last month from July’s all-time high and were up 18 percent in August from the same month a year earlier, real estate data firm RealtyTrac said.

“The pipeline of early stage foreclosures and delinquent loans is still probably going to overwhelm the system’s ability to quickly modify” terms so struggling homeowners can make their monthly mortgage payments, said Rick Sharga, senior vice president at the Irvine, California-based company.

One in every 357 U.S. households with loans got a foreclosure filing in August.

Though lenders are moving in the right direction, Sharga said, RealtyTrac is revising up its estimate for filings this year and now expects a more prolonged foreclosure crisis.

Some 3.4 million households will get a filing this year, up from the prior estimate of 3 million to 3.2 million, and sharply higher than 2.3 million filings last year.

If the forecast is realized, it will be more than four times the filings in 2005, before the deepest housing crash since the Great Depression began.

“We had been thinking that this year would be the peak, but at the rate things are going right now, it’s appearing more likely that late 2010 might be the peak year before things start to moderate,” Sharga said.

A quick recovery is not in the cards, either.

“I don’t expect it to be that 2010 will peak and 2011 will be the wonderful land of Oz,” Sharga added.”

BANK REPOSSESSIONS DOWN BUT FORECLOSURE PIPELINE FULL

Foreclosures that were delayed by various state and federal moratoria that mostly ended in March have been pushing through the system in the summer.

Meantime, the Obama administration’s housing rescue has slowly started taking hold.

Just 12 percent of U.S. homeowners eligible under the loan modification program have had their loans altered, the Treasury Department said on Wednesday. That share has risen in the month, but Treasury still expects millions more foreclosures.

“The reason the numbers are just phenomenally high is that we’re dealing right now with two concurrent problems,” said Sharga, referring to sour loans made when standards were lax as well as the highest U.S. unemployment rate in 26 years.  Continued…

TXN Surprises Market With Upward Guidance Gift

By Gilbert Kreijger and Clare Baldwin

AMSTERDAM/SAN FRANCISCO (Reuters) – European technology shares rose sharply on Thursday after positive outlook comments from chip maker Texas Instruments (TXN.N) and chip equipment firm ASML (ASML.AS)(ASML.O).

Dutch ASML increased its sales outlook on Thursday, citing improved expectations of consumer demand and higher chip prices in some markets, while Texas Instruments on Wednesday raised its forecast for third-quarter earnings and sales.

“Investors are looking for signs to strengthen the underlying positive mood on the market,” said Hannu Rauhala, analyst with Pohjola Bank.

Texas Instruments said it was expecting stronger revenue than it had forecast in July in the third quarter, in every segment — boosting shares in its key client Nokia (NOK1V.HE).

Shares in the world’s top cellphone maker were 1 percent higher at 1040 GMT, with chip makers STMicroelectronics (STM.PA) up 1.8 percent and Infineon (IFXGn.DE) up 3.1 percent, lifting the DJ Stoxx European technology shares index 1.1 percent higher.

Shares in ASML, the world’s largest maker of semiconductor lithography machines, which map out electronic circuits on silicon wafers, rose to the highest level since late 2007 after it raised its sales forecast.

ASML said it expected sales above 500 million euros ($728.9 million) in both the third and fourth quarters this year. It had said in July it expected third-quarter net sales of around 450 million euros.

“The second-half outlook for consumer goods has improved compared with the first half. Expectations are turning positive,” an ASML spokesman said.

Late on Wednesday, Texas Instruments raised its earnings estimate to 37-41 cents per share from a previous 29-39 cents, surpassing forecasts of 36 cents a share, according to Reuters Estimates.

And it hiked its third-quarter revenue forecast to $2.73 billion-$2.87 billion from a previous $2.5 billion-$2.8 billion. Analysts had expected $2.68 billion, according to Reuters Estimates.

The two companies’ improved outlooks were the latest sign of a possible consumer rebound, after top chipmaker Intel Corp (INTC.O) raised its outlook for third-quarter revenue and PC-maker Dell (DELL.O) beat earnings expectations last month.

Chipmakers have suffered as the economic downturn has dried up demand for personal computers, cell phones and other electronics. The Semiconductor Industry Association forecast in June that chip sales would fall 21.3 percent to $195.6 billion in 2009.

The top contract chipmaker TSMC (2330.TW)(TSM.N) posted a 7 percent year-on-year fall in August sales on Thursday, but analysts said the company is on track to reach its third-quarter sales target due to rising technology demand.

On Tuesday, its cross-town rival UMC (2303.TW) (UMC.N) posted an 11 percent annual rise in its August sales.

What Do Insiders See ? Or Are They Just Cash Strapped ?

Insider selling for the latest two week period totaled $254MM while insider buying totaled $163MM.  The headline figure is misleading, however, as $150MM of the buying comes from one purchase by Enterprise Products billionaire Chairman, Dan Duncan.   Minus the Duncan purchase, the selling to buying ratio remains at an extraordinarily high level of nearly 20:1.  All in all, corporate insiders continue to exhibit very little confidence in their own shares via the use of their personal dollars.

Click for larger image

Sources: Finviz, insidercow.com

Viewers Liked The Obama Speech Last Night

The question is: Were TV viewers watching Barack Obama last night, or were they watching America’s sweetheart Melanie Oudin finally get knocked out of the US Open?

Because if they were watching Obama, they’re probably more inclined to support his healthcare reforms than they were before, per fresh polling.

TalkingPointsMemo: Going into the speech, 53% of the speech-watchers favored Obama’s proposals. Coming out of it, that support has now risen to 67%. More than seven in ten say Obama clearly stated his goals — which was of course a key goal of the speech itself. And three out of four think it’s somewhat or very likely that Obama will pass most of his proposals through Congress.

However, the speech audience polled was 45% Democratic, only 18% Republican, and the remainder independent. And while Democrats certainly do out-number Republicans, it’s not by that much — meaning that the people who chose to tune in were naturally more sympathetic to Obama to start with than the population as a whole.

The partisan split isn’t a big problem, since Obama’s job was not to convince Republicans, but to convince Democrats to support the plan. And if he gained some ground among indies, while consolidating Dems, then that certainly helps.

I’m an ???? Who Can Not Control Emotion

Besides the speech itself, the other big story of the event was Republican Joe Wilson screaming “liar” in the middle of the speech. Democrats are trying to capitalize on it already, as it reinforces the idea that the GOP is interested in shutting down the opposition (see: the townhall protests).

To be honest, it doesn’t sound that horrible, until you remember they’re in the US Congress, and he’s talking to The President. Certainly it wouldn’t raise any eyebrows in the UK parliament though. Have a listen and let us know what you think:

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