Business Blog Posts

Fears that Europe's debt crisis could spiral out of control have pushed stocks off two-year highs hit earlier this month. Since November 5, the S&P has fallen 3.1 percent after running up 17 percent over the two months before that. At Friday's close, the S&P 500 was down 0.9 percent for the week, almost matching the Dow's 1 percent drop.

However, those fears have been countered by signs of a gathering recovery in the labor market at home. The government's nonfarm payrolls report on Friday is set to be another sign of a turnaround in hiring that could boost stocks through the end of the year.

Anecdotal evidence suggests holiday shopping got off to a good start. The S&P retail index .RLX rose more than 5 percent in the run up to "Black Friday," the day after Thanksgiving, when Americans traditionally take shopping malls by storm.

Retail stocks' gains are a sign of an increasingly bullish view of the U.S. consumer after a string of stronger indicators on jobs, sentiment and spending.

"The consumer is more confident and they are spending a bit more money, and I think retail as a whole is perking up," Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas said, adding that retail stocks "look relatively cheap to us, and I think sales are going to surprise to the upside."

Friday's payrolls report is expected to show the economy added 140,000 jobs in November, according to economists polled by Reuters. If that forecast is met, the jobs data will fit a pattern of growing strength in the labor market.

In October, companies hired at their fastest pace since April, the government's payrolls data showed, while the latest weekly initial claims for unemployment benefits have dropped to their lowest in over two years. November consumer sentiment rose to the highest level since June. October consumer spending also gained.

BLACK FRIDAY ANYTHING BUT BASIC

Early anecdotal evidence from Black Friday suggested shoppers were spending and that discounts were not as deep this year as last, potentially helping to lift retailers' margins as they look for the best holiday season in three years.

Black Friday marks the start of the holiday spending when U.S. retailers traditionally turn a profit, or go into the black for the year.

The National Retail Federation said that nearly 60 million Americans planned to hit the stores over the weekend, while another 78 million might join the crowds of shoppers. The NRF will provide an update later on Sunday.

Retailers on the front lines will publish same-store sales data on Thursday when they will likely comment on the weekend's events.

"It seems the American consumer is back with a vengeance," said Kim Caughey Forrest, a senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. "If we are to believe CEOs of retailers, they feel they can support margins with prices that are attracting consumers."

Shares of Amazon.com (AMZN.O), a favorite online retailer, have run up 12 percent since mid-November, and hit an all-time high of $177.25 in the middle of last week.

Finance ministers from the 16-nation euro zone, anxious to prevent financial market contagion from engulfing Portugal and Spain, met to endorse an emergency loan package to help Dublin cover bad bank debts and bridge a massive budget deficit.

A German government source said the ministers were also discussing Portugal and its possible need of an EU bailout.

Under pressure to take dramatic action to arrest a systemic threat to the euro, the leaders of Germany and France, the EU's two central powers, agreed in principle with top EU officials on the broad lines of a permanent crisis-resolution mechanism.

Crucially, private bond holders would be expected to share the burden of any future sovereign debt restructuring of a euro zone country on a case-by-case basis, the source said.

The heads of the European Commission, the European Central Bank, the European Council and euro zone finance ministers discussed the Franco-German proposal by telephone on Sunday.

All 27 EU finance ministers were expected to endorse the broad outlines of the longer-term plan before markets open in Asia on Monday, the source said.

"You know that we have a very serious situation, we have to do our utmost to protect the foundations of our economic recovery," EU Monetary Affairs Commissioner Olli Rehn told reporters on arrival for the Brussels talks.

He said ministers would go beyond endorsing the EU/IMF aid package for Ireland and "discuss the systemic response to this crisis." But it was unclear how much detail would be announced about a long-term financial safety net.

The lack of detail in an earlier Franco-German deal on a permanent crisis mechanism, agreed last month, and talk of private investors having to take losses, or "haircuts," on the value of sovereign bonds, helped drive Ireland over the cliff.

EU sources said a team of specialists from the Commission, the ECB and the International Monetary Fund had finalized a deal with Irish authorities in Dublin after 10 days of negotiations.

However, some key details, notably the interest rate and the term of the loans, expected to be between three and six years, would be finalized by ministers. French Economy Minister Christine Lagarde said the loans would total 85 billion euros.

"The assistance to Ireland is nearly done," she told reporters. "We just have a little fine-tuning to be done, notably on interest rates."

The EU sources said 35 billion euros was earmarked to help restructure and recapitalize Ireland's shattered banks while 50 billion euros would go to help fill the hole that guaranteeing bank debts has blown in public finances.

CONVINCE MARKETS

The planned sale of the 60 percent interest, which sources previously said was under discussion and which was for a price in line with analysts' estimates, brings to $21 billion the amount that BP has raised, or agreed sales on, in recent months.

BP has said it expects the costs of the Gulf of Mexico oil spill -- the United States' worst ever -- to hit $40 billion and said it would sell assets worth $25-$30 billion by the end of next year to pay for it.

Bridas already owns a 40 percent stake in Pan American Energy, which BP said was Argentina's second-largest producer of oil and gas.

Bridas was owned entirely by the family of Argentine tycoon Carlos Bulgheroni until CNOOC agreed to buy a 50 percent stake for $3.1 billion in March.

The 60 percent stake BP is selling represents reserves of 917 million barrels of oil equivalent (boe) and production of 143,000 boe per day.

The transaction excludes the shares of Pan American's Bolivian unit, BP said.

U.S. oil major Exxon Mobil Corp is seeking to sell its Argentine unit Esso, which controls hundreds of service stations and a refinery, local daily El Cronista reported last month.

(Editing by David Cowell)

Cyber Monday -- a term coined five years ago for the day many people return to work after Thanksgiving and make online gift purchases on their computers -- remains a prime shopping day online. But its novelty has now been partially eclipsed by e-commerce promotions earlier in the season, including on Thanksgiving itself.

Retailers from BestBuy.com to Walmart.com and Staples.com have even opted to offer Cyber Monday deals one day early, on newly coined "Cyber Sunday."

The key is versatility, online experts say, as well as making sure shoppers heading to the Web always find something to inspire them to click on a sale.

John Thompson, senior vice president and general manager of BestBuy.com, said Cyber Monday remains a "really viable marketing concept," but smart retailers must offer choice.

"There's demand out there, but you have consumers spending their time differently," he said. "If you don't have one group that shops early, you'll have those who say 'I'll enjoy my Thanksgiving and those same deals or as-good deals will be there Cyber Monday.'"

Marketing firms say tactics have changed in luring consumers to buy online. Whereas in prior years a full email inbox of online deals awaited those back at work on Monday, the offers now increasingly come on Black Friday if not before.

Disneystore.com, for one, had a "record sales day" on Thanksgiving, according to Jim Fielding, president of Disney Stores.

U.S. online sales were up 33 percent on Thanksgiving this year, according to web analytics firm IBM Coremetrics.

Just as many promotions are sent via email on Black Friday, the day after Thanksgiving, as on Cyber Monday, according to Responsys. And half of retailers planned to send email on Cyber Sunday as well as on Thanksgiving, the interactive marketing firm found.

PayPal, the online payments unit of eBay, said its first holiday spike in payment volume came on November 15. On Black Friday, total payment volume, or the total value of goods sold, rose 27 percent versus last year.

Online deals will continue throughout the holiday season. Amazon.com, the largest online retailer, said its Black Friday deals would last all week, while Target.com and eBay have set up daily deals through December.

BEST DEAL?

Despite the e-commerce selling season that now extends before and after Cyber Monday, the Monday after Thanksgiving is still a prime focus of retailers.

Nine out of ten retailers planned to offer a promotion for Cyber Monday, Shop.org and BIGresearch found in a survey. That was more than the nearly three-quarters of respondents in 2007.

Fears that Europe's debt crisis could spiral out of control have pushed stocks off two-year highs hit earlier this month. Since November 5, the S&P has fallen 3.1 percent after running up 17 percent over the two months before that. At Friday's close, the S&P 500 was down 0.9 percent for the week, almost matching the Dow's 1 percent drop.

However, those fears have been countered by signs of a gathering recovery in the labor market at home. The government's nonfarm payrolls report on Friday is set to be another sign of a turnaround in hiring that could boost stocks through the end of the year.

Anecdotal evidence suggests holiday shopping got off to a good start. The S&P retail index .RLX rose more than 5 percent in the run up to "Black Friday," the day after Thanksgiving, when Americans traditionally take shopping malls by storm.

Retail stocks' gains are a sign of an increasingly bullish view of the U.S. consumer after a string of stronger indicators on jobs, sentiment and spending.

"The consumer is more confident and they are spending a bit more money, and I think retail as a whole is perking up," said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas, adding that retail stocks "look relatively cheap to us, and I think sales are going to surprise to the upside."

Friday's payrolls report is expected to show the economy added 140,000 jobs in November, according to economists polled by Reuters. If that forecast is met, the jobs data will fit a pattern of growing strength in the labor market.

In October, companies hired at their fastest pace since April, the government's payrolls data showed, while the latest weekly initial claims for unemployment benefits have dropped to their lowest in over two years. November consumer sentiment rose to the highest level since June. October consumer spending also gained.

BLACK FRIDAY ANYTHING BUT BASIC

Early anecdotal evidence from Black Friday suggested shoppers were spending and that discounts were not as deep this year as last, potentially helping to lift retailers' margins as they look for the best holiday season in three years.

Black Friday marks the start of the holiday spending when U.S. retailers traditionally turn a profit, or go into the black for the year.

The National Retail Federation said that nearly 60 million Americans plan to hit the stores over the weekend, while another 78 million might join the crowds of shoppers. The NRF will provide an update on Sunday.

Retailers on the front lines will publish same-store sales data on Thursday when they will likely comment on the weekend's events.

"It seems the American consumer is back with a vengeance," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh. "If we are to believe CEOs of retailers, they feel they can support margins with prices that are attracting consumers."

Shares of Amazon.com (AMZN.O), a favorite online retailer, have run up 12 percent since mid-November, and hit an all-time high of $177.25 mid-week.