Energy Futures Waver, Gas Prices Rise

Energy futures fluctuated Thursday, buffeted by slower-than-expected economic growth figures and Wednesday's government report of a sharp decline in inventories.

Selling by investors to lock in profits from the previous day's rally also pressured prices, analysts said.

Gas prices at the pump, meanwhile, climbed again overnight. Retail prices, which typically lag the futures market, are rising as retailers buy gasoline to supply drivers over the coming Labor Day weekend.

"People are expecting the one last surge in demand," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.

But longer-term demand concerns remain. Second-quarter gross domestic product rose 4 percent in the second quarter, slower than many analysts had expected. And jobless claims rose unexpectedly last week to the highest level since spring.

"The concern is that we're going to see some weakness," Lynch said.

Energy investors worry that a slower economy means less demand for oil and gasoline.

Light, sweet crude for October delivery fell 29 cents to $73.22 a barrel on the New York Mercantile Exchange, while September gasoline fell 4.13 cents to $2.0595 a gallon. Both contracts alternated between gains and losses.

Gasoline and oil futures rose sharply Wednesday after the government reported surprisingly large declines in inventories of both on an unexpected drop in refinery activity.

In London, October Brent crude fell 33 cents to $71.80 a barrel on the ICE Futures exchange.

At the pump, meanwhile, gas prices rose 1.1 cents overnight to a national average of $2.769 a gallon, according to AAA and the Oil Price Information Service. Gas prices peaked at $3.227 in late May as refineries struggled to produce enough gas to meet peak summer driving demand.

With the summer almost over, refiners are switching over to produce more heating oil, analysts say. That has some analysts worried anew about gasoline inventories, which are at 2-year lows. But others think the inventory drop is a natural reaction by refiners to lower anticipated fall demand.

"We would not get too concerned about gasoline right now," wrote MF Global UK Ltd. analyst Edward Meir in a research note. "The U.S. driving season is officially ending after one 'last hurrah' this coming weekend."

Retail prices are responding in part to the futures market, where prices has risen over the last week in response to lower gasoline supplies. But contributing to higher prices is buying by retailers anticipating a jump in demand over the holiday weekend, analysts said.

In other Nymex trading, heating oil futures fell 1.09 cents to $2.031 a gallon, and natural gas futures rose 8.9 cents to $5.67 per 1,000 cubic feet after the government reported that inventories rose by 43 billion cubic feet last week, slightly less than analysts were expecting.

Natural gas supplies are at record levels, which has kept prices below year-ago levels. Heating oil inventories, on the other hand, are lower than they were a year ago, which has driven prices higher. The result could be lower heating bills this winter for natural gas customers, and higher bills for heating oil customers.
Source : http://www.forbes.com

FEATURE-US immigrants worry as families face deportation

When 300 U.S. immigration agents surrounded the chicken processing plant where Danny Alvarez-Reyes works, he did the only thing he could think of: he gave his coat to a scared friend determined to hide in the walk-in freezer.

Alvarez-Reyes, 27, works legally at the Koch Food plant near Cincinnati and could only watch as co-workers were rounded up during a raid on Tuesday that netted 160 illegal workers.

But after an exhausting day trying to help his friends' families, Alvarez-Reyes was still worried about the five co-workers he watched hide in the giant freezer.

"I don't know if they ever got out, that's all I want to know," he said, gathering with friends at a neighborhood taco restaurant to rehash the trauma of the day and trade rumors about who will be deported.

A day after one of the largest workplace immigration raids in Ohio, the Hispanic community in Cincinnati's suburbs was scrambling to track down missing family members and arrange care for children whose parents were caught up in the raid.

U.S. Immigration and Customs Enforcement said the raid was the culmination of a two-year investigation of Koch Foods, suspected of knowingly hiring undocumented workers. The company said it was cooperating.

"Koch Foods is committed to complying with all immigration laws, and we look forward to resolving this matter quickly," it said in a statement.
Source : http://today.reuters.com

No US dollar sell-off, Chinese central bank official says

China sought yesterday to dampen speculation it will conduct a massive sell-off of US dollar holdings, with a central bank official saying the US dollar remains a mainstay of its foreign exchange reserves.

In an interview carried by the government's Xinhua news agency, an unnamed official with the People's Bank of China said US dollars and government bonds are "an important part of China's foreign reserve investments."

China's US$1.3 trillion in foreign exchange reserves are the largest in the world and are believed to be comprised largely of dollar assets, potentially giving Beijing enormous sway over the dollar's value worldwide.

A report in the British newspaper the Daily Telegraph last week that quoted Chinese government economists as saying China would dump its dollar holdings in the event of a trade war with Washington added to jitters in stock markets already unnerved by volatility in US share markets.

Xinhua said the central banker's remarks were intended to counter reports in Western media that China "is threatening to carry out a sell-off of US dollars."

The People's Bank does not disclose the composition of its foreign exchange reserves, which have swelled in recent years as China's exports surged and investors poured money into the country to profit from an economy now in its fourth straight year of double-digit growth.

But the reserves have become a political issue both within China and between Beijing and Washington. As the US dollar has fallen in value, the People's Bank has come under pressure to diversify its holdings to maintain the value of the reserves and improve returns.
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Source : http://www.taipeitimes.com

Bancroft Wrangling Intensifies

As a Monday deadline neared for the Bancroft family to decide on Rupert Murdoch's $5 billion offer for Dow Jones & Co., last-minute wrangling by family members and their trustees intensified.

Family lawyers were scrambling Friday to change the voting structure of the biggest Bancroft trust so it would better reflect the views of all the beneficiaries. The trust's overseers include Christopher Bancroft, a prominent family member who has been outspoken in his opposition to the deal. The restructuring could dilute Mr. Bancroft's influence over the stock now held in the trust.

On Friday, another key family trust seen as an important swing vote was planning to oppose the deal, according to a person familiar with the situation. The trust, overseen by a Denver law firm, holds 9.1% of Dow Jones's voting stock and is seen as a seller but wants a higher price.

Meanwhile, several family members engaged via email in an intense exchange about their legacy, their past stewardship of Dow Jones, and the ramifications of voting against the deal. The family met last Monday in Boston to hear presentations about the deal and have been asked to make a final decision by Monday.
Source : http://online.wsj.com

Dow Keeps Tumbling Despite Good News

Wall Street heard good news about the economy yesterday but didn't pay it much heed: The Dow Jones industrial average shed an additional 200 points to finish its worst week in more than four years, potentially creating a snowball effect that could continue next week.

Worries about the corporate and mortgage lending markets overpowered yesterday's strong growth report and solid economic fundamentals. The Dow, made up of 30 blue-chip stocks, lost 208.10 points yesterday, or 1.5 percent. The Dow fell 4.2 percent for the week, closing at 13,265.47. The tech-heavy Nasdaq composite index lost 37.1 points, or 1.4 percent, to end at 2562.24. That was a 4.7 percent drop for the week. And the broader Standard & Poor's 500-stock index lost 23.71 points yesterday to close at 1458.95, down 4.9 percent for the week

At times yesterday, Wall Street tried to recover from Thursday's big losses, but the markets ultimately nosed over and dived in the last half hour of trading.

It's "horrible, disaster, absolutely the worst-case scenario," said Todd Clark, director of trading at Nollenberger Capital Partners. "I figure we're going to have a pretty nasty day on Monday."

Seemingly ignored in what another trader termed yesterday's "carnage" was the release of the Commerce Department's gross domestic product report. The nation's economic output grew at a healthy 3.4 percent annual rate, or slightly more than expected, from April to June, according to the figures.

Also, favorable feelings about income and employment prospects pushed consumer sentiment to a five-month high, according to an index released yesterday by the University of Michigan and Reuters.

Why the seeming disconnect between Wall Street and Main Street?

"Consumers and retail investors look at [market drop] in the paper and say, 'Geez -- I need to sell off,' " Thomson Financial's Jeoff Hall said. He said the markets' dive over the past two days "has very little or nothing to do with the data" that show a growing economy.

The turmoil in U.S. markets rippled around the globe, particularly affecting Asia.

In South Korea, the Kospi index was down more than 4 percent after the worst trading day in years. The Singapore Straits Times index fell 2.4 percent, while the Nikkei stock average in Japan and the Hang Seng index in Hong Kong shed more than 2 percent each. The Shanghai stock index in China was flat.

Wall Street is fixated on problems in the credit markets, analysts said, including the crash of the subprime mortgage market stemming from widespread housing foreclosures and tightened corporate credit that is holding up planned deals. Analysts call the process now underway a repricing of credit, with investors demanding a higher return on loans and bonds perceived as risky.

England's Cadbury Schweppes said yesterday it would hold off on the sale of its U.S. division that makes Snapple because the company was afraid potential buyers may not be able to get financing for the deal at attractive terms.

"The credit markets are driving everything now, from stocks to Treasuries, even to currency," Mark Kiesel, executive vice president at Pimco Bonds, wrote in an e-mail yesterday. "The stock market will not stabilize until the credit market stabilizes."

Inflation measures in yesterday's Commerce report were mixed. The core consumer price index, which excludes food and energy, rose at an annual rate of 1.4 percent, down from 2.4 percent during the first quarter. But a broader inflation measure that includes food and fuel rose at a 4.3 percent annual rate, up from 3.5 percent in the January-to-March period.

The economic data are "positive and inflation is positive to some extent, but I think the market is getting more and more rattled" by problems in the credit markets, said David Dreman of Dreman Value Management. "I think people are really worried that how this is going to turn out. We don't know how bad it's going to be."
Source :http://www.washingtonpost.com

Ex-Qwest CEO Gets Six-Year Sentence

Joseph Nacchio, the former chief of one-time highflier Qwest Communications International Inc. (Q) who was convicted of insider trading, was sentenced Friday to six years in federal prison.

Federal Judge Edward Nottingham also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales.

(This report and related background material will be available on The Wall Street Journal's Web site, WSJ.com.)

Nacchio's attorneys are planning to appeal. The attorneys said they plan to ask the U.S. Bureau of Prisons to allow Nacchio to serve out his sentence in a minimum security prison in Pennsylvania, which is near his New Jersey home and is near to many family members.

"The crimes of which the defendant were found guilty are crimes of overarching greed," Judge Nottingham said. The judge called Nacchio, whose grandparents immigrated to the U.S. from Italy, someone "who rose from immigrant parents and rose to enormous heights by sheer will and talent."

"Perhaps because of his greed he catapulted over the top in this case," the judge said.

In April, Nacchio was convicted in federal court here of 19 counts of insider trading for selling $52 million worth of stock in the spring of 2001 while knowing that his company's finances were in trouble. He also faces a Securities and Exchange Commission civil fraud suit.

For much of the hearing, Nacchio, in a dark suit and blue tie, stood before the judge with a tissue in hand, occasionally wiping his eyes. He declined to speak on his behalf and stood firm when the sentence was announced.

The Nacchio criminal case is among the last of a series of prominent prosecutions of corporate executives brought in recent years.

Prosecutors said Nacchio, a charismatic and blunt CEO who was hand-picked to lead Qwest by its founder Phil Anschutz, maintained an overly optimistic outlook on his company's finances even as the telecom bubble was showing signs of strain in 2000 and 2001 and his underlings told him his optimism might be a stretch. Nacchio resigned in 2002 as Qwest's stock nosedived. The company eventually restated two years of results, eliminating $2.48 billion of revenue for 2000 and 2001.

During his trial this spring, Nacchio's attorneys said the former CEO couldn't have "knowingly and willfully" engaged in insider trading at the time because he was consumed by a suicide attempt by one of his sons. His son's suicide attempt had been a family secret, but he revealed it because his state of mind was an issue.

Nacchio's attorneys also said other Qwest executives' concerns were based on whether they could meet internal revenue targets, which were tied to their bonuses. Nacchio did not testify, and his defense was extremely brief. Nacchio had asked the judge for leniency in sentencing partly based on his son's mental health state, as well as the former executive's "prior good works."

To handle his appeal, Nacchio has hired Maureen Mahoney, a high-profile lawyer best known for her victories before the Supreme Court. She represented Arthur Andersen in 2005 when its criminal conviction was overturned and the University of Michigan Law School in its 2003 defense of its affirmative-action policy.

Mahoney, a former clerk for Chief Justice William Rehnquist and one-time United States Deputy Solicitor General, declined comment on possible appeals. But a recent defense filing from Mahoney seeking to keep Nacchio out of prison pending his appeal lays out the issues that Nacchio is likely to argue to try to overturn his conviction.

His appeal will likely focus on whether the judge erred in instructing the jury about "materiality." In a brief filed earlier this week, Mahoney raises the question of whether the warnings about Qwest's finances conveyed to Nacchio by his executive team were materially different from the sunny outlook he conveyed to investors and analysts.

The brief argues that "predictions are inherently limited and uncertain" and "financial predictions are not materially misleading so long as the company believes them in good faith." The filing also highlights that Qwest's chief financial officer and auditors also signed off on Nacchio's financial guidance.

In the filing, Nacchio's attorneys also object to the judge's exclusion of an expert witness, an economics professor, who they say could have rebutted analysts testifying for the prosecution who said they were upset upon learning about Qwest's questionable accounting practices.

Another issue likely to surface in the appeal is Nacchio's classified defense that he was upbeat about Qwest's financial prospects because he knew the company was going to receive lucrative, secret government contracts. The run-up to the trial was marked by at least seven closed pretrial hearings where classified information apparently was discussed. Judge Nottingham barred some parts of the classified defense, and the matter barely surfaced at trial.

"The rulings effectively deprived the defendant of the opportunity to provide the jury with information that bore directly on his good faith and could have led to an acquittal," the defense filing said.
Source : http://www.smartmoney.com

Apple Blossoms on Strong Q3

Apple easily beat Wall Street predictions for the quarter that ended in June, with revenue rising 24 percent year-over-year to US$5.41 billion. Net income rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents, in the third quarter of 2006.

Apple shares roared higher in after-hours trading following the release of the report, with shares up some 9 percent. In morning trading Thursday, the stock was up 8.7 percent to $145.97, a new 52-week high.

The computer-turned-electronics maker was widely expected to beat estimates -- and has gained something of a reputation for guiding lower to make it easier to do so -- and investors were most interested in hearing what Apple had to say about the iPhone, which went on sale on June 29, just a day before the quarter ended.

iPhone Sales

"The iPhone is off to a great start," CEO Steve Jobs said. "We hope to sell our one-millionth iPhone by the end of its first full quarter of sales," which would be at the end of September.

Apple sold 270,000 iPhones in that first wave of sales Email Marketing Software - Free Demo, the company said, though it recognized just $5 million in revenue from the device in the quarter. That number is much more in line with expectations. Apple investors had a scare Tuesday when AT&T (NYSE: T) Latest News about AT&T said it signed up fewer than 150,000 customers for iPhone plans in those first two days.

In fact, on a conference call to discuss Apple's results, CFO Peter Oppenheimer reiterated Apple's previous goal of selling 10 million iPhones worldwide during 2008. Apple did not give sales-to-date figures beyond the first two days of availability.

"Our view is that the starting gun has fired and we're off to a great start," Chief Operating Officer Tim Cook said in a conference call. "Our primary focus is not on the initial sale. We're focusing on building a third great business for Apple, alongside the Mac and iPod," he added.
Mac Attack

"This was the biggest, fastest-selling phone in AT&T's history," telecom analyst Jeff Kagan told MacNewsWorld. "That's not too shabby."

The early sales data are tantalizing to watch, but in the end, what matters is how the iPhone does long-term, added JupiterResearch analyst Michael Gartenberg.

"This is the first move in what will be a long game for Apple," he told MacNewsWorld, adding that before long, the iPhone will likely be a family of products much like it did with the iPod. "Trying to gauge the overall success based on two days of incomplete data is silly."

Apple's data also suggest that the iPhone's release and the hype leading up to it did not dent demand for the iPod, as had been feared. In fact, Apple sold 9.8 million of the devices in the quarter, a 21 percent increase over the same time a year ago. Revenue from the rest of the music-related businesses -- including sales from the iTunes Music Store -- was up 33 percent to $607 million.

The strength in Mac sales was considered by many a highlight of the report. Mac shipments rose 33 percent to 1.76 million, and 51 percent of the customers who bought Macs at Apple stores had never bought an Apple computer before, the company said. Apple's PC-sales growth rate was more than two-and-a-half times the overall growth of PC shipments.

Despite all the attention around the iPhone, "Mac sales are the key foundation of Apple's business," Ovum analyst Carl Gressum said in a research note. The fact that Mac sales held up and even accelerated their growth rate in the face of the launch of Microsoft's (Nasdaq: MSFT) Latest News about Microsoft Windows Vista was an especially good sign, he added.
Details, Details

Apple executives declined to discuss the potential for rolling out additional iPhone models, such as lower-cost alternatives, and the company also did not break out its Apple TV product, the Internet-to-TV device that launched earlier this year.

The company ended the quarter with $13.8 billion in cash, it said.

Apple again forecast fourth quarter results that aim below the targets Wall Street had already set. Oppenheimer said earnings would be around 65 cents per share on revenue of $5.7 billion, while analysts polled by Thomson Financial had pegged fourth quarter numbers at 83 cents per share at $6 billion.

Pressed in the conference call on whether Apple was setting a low bar it could easily clear, Oppenheimer said Apple was expecting to pay higher prices for components and commodities and also cited unspecified "product transitions" that would occur in the current quarter.
Source :http://www.ecommercetimes.com

Think twice about clicking on that e-card

Spammers launched a widespread attack on e-mail inboxes this month. But instead of trying to lure users into opening a corrupted attachment, they're concealing a computer virus in a link to an online greeting card.

Last week, the FBI warned consumers about greeting-card spam; earlier this month, the Federal Trade Commission held a summit on the growth of malicious e-mail. Symantec, an antivirus company, also said it has seen a proliferation of online-greeting-card scams recently.

In most cases, the subject line informs recipients that they've received a greeting card or a postcard from a "friend," "family member," "worshipper," "school-mate" or "neighbour." When the e-mail is opened, there's a link to a Web site that uploads viruses to the recipient's computer.

Now that consumers generally know about the dangers of opening attachments from unknown senders, some hackers have turned to using links instead. Web site links don't generate the same level of suspicion among Internet users, as consumers regularly send online gift cards, share online photo albums and offer birthday wishes via e-mail.

Users of infected computers have few choices beyond buying and installing software to scan and clean their hard drives. Those who receive a purported greeting-card e-mail — but don't recognize the sender — are instructed to delete the e-mail.
Source : http://www.chron.com