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Emerging debt-Argentine spreads narrow, Venezuela gains with oil
Reuters: [2008-05-19 23:11:00]
By Daniel Bases
NEW YORK, May 19 (Reuters) - Investors pushed Argentine sovereign debt higher on Monday in case a deal is made between striking farmers and the government while rising oil prices propelled Venezuelan bonds higher.
Record high oil prices viewed through the prism of energy company profits pushed stock prices higher and helped lift emerging market equity indexes to their best levels this year and in the case of Latin America another record high.
Trading volumes however were low on Tuesday, leaving price movements exaggerated, traders said. Turkey, one of the more heavily traded credits, had a market holiday that contributed to the dearth of volume.
Yield spreads on the benchmark JPMorgan Emerging Markets Bond Index Plus <11EMJ><.JPMEMBIPLUS> were unchanged at 256 basis points over slightly stronger U.S. Treasuries.
Argentine spreads narrowed by 13 basis points to 539 basis points on the JPMorgan index.
Farmers in Argentina, the world's No. 2 corn exporter and No. 3 soy supplier, went on strike for the second time in two months on May 8 over a sliding-scale export tax that farmers say effectively caps prices for their goods. A farm leader said on Monday there was consideration in the ranks to restart talks with the government.
"No one wants to be short in the event there is a resumption of negotiations between the government and the farmers. I think this is just tactical speculative flows... Any sign they are willing to move back to the table to negotiate should be interpreted positively," said Paul Biszko, senior emerging markets analyst at RBC Capital Markets in Toronto.
Argentina's benchmark Discount Bonds rose 1.0 point in price to bid 83.00 on Monday <ARGGLB33=RR>.
Venezuela's yield spread on the EMBI+ index narrowed by 7 basis points to 640 basis points as the surging price of oil - above $127 a barrel -- fills Caracas' coffers with more oil revenues.
Venezuela's benchmark 2027 bond <VENGLB27=RR> rose 0.75 points in price to bid 89.938, yielding 10.471 percent.
"Yield spreads are pretty flat and trading volumes are low. Emerging stocks are following broader market averages higher and oil is giving a boost to Venezuela," said one credit trader in New York.
The rise in oil prices and the follow-through positive impact on energy company profits was one reason cited for a rise in global stock markets.
In emerging markets, where oil is often the big export, the Morgan Stanley Capital International emerging markets stock index <.MSCIEF> climbed 0.75 percent on Monday to its best closing level since mid-December.
MSCI's Latin American stock index closed up 1.26 percent on Monday, lifting the index to its third successive record close <.MILA00000PUS>.
One market that will draw more focus in the coming months is Turkey, which faces major political upheaval if the country's Constitutional Court says the ruling AK Party and its leaders breached the nation's secular constitution by supporting Islamist activities. The AK Party denies the charges and says they are politically motivated.
A government minister, speaking to Reuters said that the Islamist-rooted AK Party now believes the chances for its survival are bleak and has begun planning how to return to power as a new movement.
(For full story, click on [ID:nL18278566])
Turkish assets have been sold off but the selling pressures have subsided for the time being. RBC's Biszko believes that may not last through through the middle of the year.
"The fact is this is still two to three months away at the earliest, so no one is really concerned about it yet. As we near closer to July or August, I think that would be the timing we would be looking at to scale down exposure," Biszko said. ((daniel.bases@reuters.com; +1 646 223 6131; Reuters Messaging: daniel.bases.reuters.com@reuters.net)) Keywords: MARKETS EMERGINGDEBT/
NASA sets space shuttle liftoff for May 31
Reuters: [2008-05-19 22:51:00]
By Irene Klotz
CAPE CANAVERAL, Fla., May 19 (Reuters) - NASA cleared the space shuttle Discovery on Monday for launch on May 31 to deliver the centerpiece of Japan's space program, a massive laboratory named Kibo, to the International Space Station.
Liftoff is scheduled for 5:02 p.m. EDT (2102 GMT) from the Kennedy Space Center in Florida, with docking at the space station expected two days later.
"Right now we're in great shape," said the launch director at the U.S. space agency, Mike Leinbach.
In addition to installing Kibo onto the orbital complex, the Discovery astronauts plan to tackle an assortment of maintenance jobs to help prepare the station for an expanded six-member crew.
Three people now live aboard the station full time, in staggered increments ranging from three to six months.
NASA is in the process of figuring out how to repair a paddle wheel that turns one of the station's solar wing panels which will be needed to fully power the outpost.
Astronauts Michael Fossum and Ronald Garan are scheduled to make three spacewalks during Discovery's nine-day stay at the station.
In addition to installing and outfitting Kibo, the spacewalkers will inspect and troubleshoot the broken solar array rotary joint and replace nitrogen tanks needed to pressurize the station's ammonia cooling system.
"It's an extremely complicated mission," NASA spaceflight chief Bill Gerstenmaier said.
NASA has two years to complete the space station before retiring the shuttle fleet. Eleven flights, including Discovery's, are planned.
Delays building the shuttle's fuel tanks, which were extensively remodeled after the 2003 Columbia shuttle accident, forced NASA to drop one of two more missions to the space station planned this year following Kibo's arrival.
The agency still plans to fly a final servicing call to the Hubble Space Telescope in October. (Editing by Jim Loney and Doina Chiacu) ((jim.loney@reuters.com; +1 305 810 2688; Reuters Messaging: jim.loney.reuters.com@reuters.net)) Keywords: SPACE SHUTTLE/
GLOBAL MARKETS-World stocks at 4-month highs despite rising oil
Reuters: [2008-05-19 22:20:00]
(Adds close of U.S. markets)
* World stocks at four-month high, lifted by energy stocks
* Crude oil prices zig-zag, close above $127 a barrel
* Emerging market stocks at new high, wipe out 2008 losses
By Herbert Lash
NEW YORK, May 19 (Reuters) - Stocks rose to four-month highs around the world on Monday as crude oil trading near record highs boosted energy shares, but U.S. technology shares turned negative after a chip maker said the record oil prices are likely to hurt consumer spending.
Oil closed at a record above $127 a barrel after OPEC's president insisted the producer group would not increase output at its next meeting in September.
Crude's relentless rise bolstered energy-related stocks in Asia, Europe and the United States. Exxon Mobil, the largest publicly traded oil company, led a key U.S. stock index higher.
Emerging market equities hit a high for the year, wiping out their 2008 losses in a new bout of investor confidence.
An economic forecasting gauge that showed the U.S. economy, while weak, has so far managed to avoid recession helped the dollar rebound from a two-and-a-half-week low against the euro. The Conference Board's Leading Economic Indicators index showed a slight April gain of 0.1 percent.
"There's a realization that we haven't seen, at least to date, a significant economic impact from the high oil prices and there is a general comfort level with the economic data," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.
The Dow Jones industrial average <.DJI> rose 41.36 points, or 0.32 percent, at 13,028.16. The Standard & Poor's 500 Index <.SPX> added 1.28 points, or 0.09 percent, at 1,426.63. The Nasdaq Composite Index <.IXIC> fell 12.76 points, or 0.50 percent, at 2,516.09.
With energy prices heading higher recently and the economy still growing, investors looked for companies that can do well in an inflationary environment.
Shares of big manufacturers, including Caterpillar Inc <CAT.N>, also rose, and Exxon was the biggest contributor to the Standard & Poor's 500 Index's upturn.
Technology shares, however, fell after the chief executive of semiconductor maker SanDisk Corp. <SNDK.O> warned on consumer spending levels. CEO Eli Harari told Reuters on the sidelines of a conference in Boston that "with the oil prices hitting $127 a barrel, discretionary spending is going to be affected."
Shares of SanDisk slumped 7.5 percent, while top chip maker Intel Corp <INTC.O> fell 0.5 percent, and No. 2 maker Advanced Micro Devices <AMD.N> lost 2.2 percent.
In Europe energy stocks were among the top weighted gainers. Total <TOTF.PA> rose 3.1 percent and Royal Dutch Shell <RDSa.AS> added 3.2 percent. Among miners, Vedanta <VED.L> added 8.5 percent and Anglo American <AAL.L> gained 4 percent.
The FTSEurofirst 300 <.FTEU3> index of top European shares closed 0.96 percent higher at 1,378.29, its fourth positive day in a row and highest close since Jan. 16. Gains in mining and oil shares led the UK's FTSE 100 index <.FTSE> up 1.2 percent.
Markus Steinbeis, head of European equities at Pioneer Investments in Munich, said oil and mining stocks are "one way of protecting your portfolio from a higher inflation."
Steinbeis added: "Many market participants are preparing for rising inflation. They are looking for companies with strong pricing power, which can easily pass on higher prices."
The equity markets were buoyed early by comments from officials in the euro zone's two largest economies -- Germany and France -- that were optimistic.
France is on track to meet a target of between 1.7 percent and 2 percent economic expansion in 2008, said Economy Minister Christine Lagarde. Germany surprised analysts and grew 1.5 percent from January to March, its strongest quarterly expansion since 1996.
Crude oil in New York settled higher at a record close above $127 a barrel in volatile trade before Tuesday's expiration of futures contracts for June.
Near the close, prices fell more than a dollar and then bounced nearly the same, buffeted by pre-expiry selling and a rebounding dollar, as was the case for most of the session.
"Market is still in bull mode technically, leading to additional upside follow-through," said Tom Bentz, an analyst at BNP Paribas Commodity Futures Inc, commenting on the early strength above $127.
Crude <CLM8> for June delivery settled up 76 cents at $127.05 a barrel, after trading from $125.28 to $127.77, just shy of Friday's record high of $127.82.
In London, July Brent crude <LCON8> ended up 7 cents at $125.06 a barrel. Brent crude hit a record $126.34 on Friday.
U.S. Treasury debt prices pared losses and rose in thin trade volume after SanDisk's warning about consumer spending hurt technology shares and bond investors reacted accordingly.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose 6/32 to yield 3.83 percent. The 2-year U.S. Treasury note<US2YT=RR> rose 4/32 to yield 2.40 percent. The 30-year U.S. Treasury bond <US30YT=RR> rose 6/32 to yield 4.57 percent.
The dollar rose against major currencies, with the U.S. Dollar Index <.DXY> up 0.40 percent at 73.057.
The euro <EUR=> fell 0.44 percent at $1.5506, and against the yen, the dollar <JPY=> rose 0.27 percent at 104.31.
U.S. gold ended higher above $900 an ounce after scaling a near-four week peak on the back of inflation fears sparked by record high crude prices.
The June gold contract <GCM8> in New York settled $5.90 higher at $905.80 an ounce, boosted by the metal's inflation hedge appeal as oil settled at record over $127 a barrel.
Gold's close above $900 should lead futures to test the next resistance area of around $925 an ounce, traders said.
MSCI's benchmark emerging market share index <.MSCIEF> rose to a new 2008 high of 1250.99, wiping out all its losses this year.
Asian shares hit a new four-month high as a relentless rise in oil prices bolstered resource shares.
MSCI's measure of Asian stocks outside Japan <.MIAPJ0000PUS> rose 0.4 percent, the sixth consecutive session it has gained. The index earlier hit its highest level since mid-January, but is still down about 5 percent for the year.
Tokyo's Nikkei average <.N225> and shares in Taiwan <.TWII> and Hong Kong <.HSI> gained less than 0.5 percent each. (Reporting by Kristina Cooke, Ellen Freilich and Steven. C. Johnson in New York and Lewa Pardomuan and Jane Merriman in London; Editing by Leslie Adler) ((herb.lash@thomsonreuters.com; +1 646 223 6019; Reuters Messaging: herb.lash.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available
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UPDATE 2-Thomson Reuters to cut 140 journalist jobs
Reuters: [2008-05-19 22:11:00]
(Updates share price, rewords disclaimer)
NEW YORK, May 19 (Reuters) - Global information company Thomson Reuters Corp <TRI.TO> <TRIL.L> plans to cut 140 editorial jobs by the end of the year as its Reuters news service absorbs Thomson Financial News.
More than half the cuts will be in Europe, while the rest will be scattered, Editor-in-Chief David Schlesinger wrote in a memo to employees on Monday.
Reuters also plans to add about 50 new jobs in growth areas, Schlesinger said, adding that the news organization should have about 2,500 employees by year's end.
"When two similar and once competing organisations come together, there is natural overlap and duplication in coverage," Schlesinger wrote.
"Wherever possible, we have worked to minimize job losses and to avoid redundancy by moving people into new roles and cancelling open posts that don't fit within the new organisation," he added.
Britain's National Union of Journalists said it had not ruled out a strike but would negotiate with the company first.
"The NUJ has been pressing hard to have any job cuts carried out through voluntary redundancies and will continue to do so," said NUJ representative Myra MacDonald.
Thomson Reuters had said it would shed jobs after Thomson Corp bought Reuters Group Plc for more than $16 billion in cash and stock on April 17.
Thomson Reuters, which employs 50,000 worldwide, could lose about 1,500 jobs in total, according to a BBC report.
Thomson Reuters is cutting as many as 650 jobs in its content, technology and operations division, according to a memo sent to employees by the head of that group, Peter Moss.
"It is important to emphasize that the number of people leaving the company through redundancies will be significantly less than this, with our current projection being approximately 250 people," Moss wrote.
Thomson Reuters spokesman Frank DeMaria confirmed the statements in the memos.
Thomson Reuters shares closed up 1.63 percent at 1,682 pence in London while its New York-listed shares closed up 0.80 percent at $37.95.
(Reporters and editors involved in writing and editing this report may own Thomson Reuters securities and are bound by the Reuters Code of Conduct, which restricts dealing in securities in companies on which a journalist is reporting)
(Reporting by Robert MacMillan; Editing by Jack Reerink & Ted Kerr)
((robert.macmillan@thomsonreuters.com; +1 646 223 6012; Reuters Messaging: robert.macmillan.reuters.com@reuters.net)) Click on http://blogs.reuters.com/category/themes/mediafile/ to see Reuters MediaFile blog Keywords: THOMSONREUTERS/
Study raises questions about a facial implant
Reuters: [2008-05-19 22:00:00]
CHICAGO, May 19 (Reuters) - An injectable gel used to improve the appearance of lips, cheeks and other facial features may cause swelling, nodules and other problems, researchers in Spain reported on Monday.
The compound, called polyalkylimide, has been used primarily in Europe, said Dr. Jaume Alijotas-Reig, and colleagues at Vall d'Hebron University Hospital and Autonomous University in Barcelona, Spain.
Early reports on polyalkylimide injections indicated there were no significant signs of rejection of the material or adverse reaction to introduction of a foreign substance, the researchers said.
"However, more recent evidence refutes these statements, and so the complete safety of polyalkylimide implant gels can no longer be assured," they added in a small study published in the Archives of Dermatology.
Their findings were based on 25 patients, eight of whom had a previous implant of one kind or another, including silicone breast implants.
The group developed a variety of problems including swelling, hardening and swollen or tender nodules near the injection site, as well as fever, arthritis and dry eyes or mouth a year or more after the treatment.
After nearly two years, 11 of the group appeared to be free of adverse effects but 10 still had recurrent problems, the study found.
"We do not know the real number of cases that have developed delayed adverse effects because of the tendency of many physicians to not report negative events," the researchers said in their report.
The compound, which came on the market in 2001, "is increasingly one of the most commonly used fillers in Europe," they said.
Considering the increased use of the implants, doctors "should be aware that intermediate or delayed adverse effects can occur ... just as they can with collagen, polyacrylamide, polylactic acid or methacrylate," the researchers said, referring to other compounds used as cosmetic fillers.
The compound, sold as Bio-Alcamid, is patented by Polymekon Sri of Brindisi, Italy, and marketed in partnership with Ascente Medical Corp of Toronto, both privately held.
Polymekon's website says studies have proven it safe and effective.
(Reporting by Michael Conlon; editing by Mohammad Zargham) ((Mike.Conlon@thomsonreuters.com ; +1 312 408 8730; Reuters Messaging: mike.conlon.reuters.com@reuters.net))
Keywords: SKIN IMPLANTS/
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