Business Blog Posts

The Commerce Department said on Tuesday orders for manufactured goods increased 0.7 percent after dropping a revised 0.7 percent in October.

Economists polled by Reuters had forecast factory orders slipping 0.1 percent in November from a previously reported 0.9 percent decline in October. Orders have risen in four of the last five months.

Manufacturing has been the star performer during the recovery from the worst recession since the 1930s and continues to expand. Factories appear to be ramping up activity to meet a pickup in demand from consumers and businesses.

Analysts have forecast economic growth at an annual pace of between 3 percent and 3.5 percent in the fourth quarter after a 2.6 percent expansion in the third quarter.

U.S. financial markets had little reaction to the data. Stocks were little changed as optimism over the economic outlook was offset by a decline in consumer stocks.

U.S. Treasury debt prices edged higher The euro climbed to a three-week high against the dollar.

On Monday the Institute for Supply Management said its index of national factory activity climbed to a seven-month high in December, hoisted by sturdy gains in new orders and production.

The Commerce Department report showed orders excluding transportation increased 2.4 percent in November, the highest since March, after a 0.1 percent gain the prior month.

Unfilled orders at factories increased 0.6 percent in November after rising 0.7 percent the prior month. Shipments increased 0.8 percent, rising for a third consecutive month, while inventories gained 0.8 percent after rising 1.1 percent in October.

The department revised durable goods orders for November to show a much smaller 0.3 percent fall rather than the previously reported 1.3 drop. Excluding transportation, orders for durable goods increased a bigger 3.6 percent in November instead of 2.4 percent.

Orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence, increased 2.6 percent after 3.2 percent decline in October.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

BP shares were up 5.6 percent to 491.7 pence by 1351 GMT (8:51 EST).

The Daily Mail newspaper, citing sources close to the Anglo-Dutch group, reported Shell weighed an opportunistic bid for BP as crude gushed into the Gulf last summer, but was discouraged by the potentially uncapped legal liabilities.

The newspaper said Shell could yet bid for BP if another suitor emerged but Europe's largest oil company by market value was unlikely to be the "first mover" for number two, BP.

Dealers and analysts including Mic Mills, head of electronic trading at ETX Capital, said BP was also being boosted by comments late on December 31 from the lawyer running BP's gulf oil spill compensation fund that suggested damages payments could be half the expected level.

Ken Feinberg, the independent administrator of the $20 billion fund set up by BP told Bloomberg Television about half the fund's assets should be adequate to cover claims for economic losses.

One dealer said the news reports focused minds on the fact BP shares were cheap compared to rivals. "BP remains cheap and vulnerable at these levels but I do not think a bid is likely."

BP shares trade on a price-earnings ratio of 6.5 times, consensus 2011 earnings, while Shell trades at 8.9 times, partly reflecting the fact BP's actual earnings could be far lower if it was found to have been grossly negligent in causing the oil spill which would boost legal costs and fines.

However, Feinberg's comment highlighted how the picture could also be brighter than the company has predicted.

The reports come ahead of a final report, to be released January 11, by the National Commission on the BP Deepwater Horizon Oil Spill, which was convened by President Barack Obama to uncover what led to the U.S.'s worst ever oil spill.

Comments by Commission members and documents previously released by the Commission suggest the report will be highly critical of BP, and could lead the way to multi-billion dollar federal fines.

Analysts and industry sources said during the crisis last summer it was likely that both U.S. oil giant Exxon Mobil and Shell -- the only companies considered large enough to mount a bid -- would run some calculations on a possible bid for BP.

However, the two notoriously conservative companies were seen as likely to be discouraged by the open-ended nature of BP's liabilities.

Now BP's shares have rebounded 65 percent from their June low at 296 pence, to give BP a market value of around $140 billion, a bid would be much harder to mount, especially for Shell which is worth over $210 billion.

Exxon has a market value of almost $370 billion.

The attorney-general group expects to reach five separate agreements with the five largest servicers, the news agency said, quoting Miller, who heads the multi-state probe.

Miller could not be immediately reached for comment by Reuters outside regular U.S. business hours.

The other three large servicers are Citigroup Inc, Wells Fargo & Co and Ally Financial Inc.

The group has had at least one face-to-face meeting with representatives from all five of the largest banks and will reach individual settlements rather than a global agreement with the servicers, Bloomberg reported.

Mortgage servicers have come under fire in recent months for abuses of the foreclosure process.

All 50 state AGs formed a joint probe in October to investigate the use of "robo-signers" in foreclosure proceedings.

Ally Financial, Bank of America, Citigroup, JPMorgan and Wells Fargo could not be immediately reached for comment by Reuters outside regular U.S. business hours.

(Reporting by Abhinav Sharma and Santosh Nadgir in Bangalore; Editing by David Holmes)

Shares in Borders Group Inc (BGP.N) will be in the spotlight after the company, which has been seeking financing to fight credit woes, said late on Monday that two top executives resigned, sending its shares falling 8 percent after-hours. Borders shares traded in Frankfurt (BGP.F) were down 4.2 percent.

Japanese stocks led Asian equities higher on Tuesday, and oil prices hovered near a 27-month high, as investors bet the improving U.S. recovery may be reflected in monthly jobs data later in the week.

European stocks were up 0.7 percent in morning trade, with oil major BP (BP.L) hitting a six-month high, up 4.9 percent, after The Daily Mail newspaper reported rival Royal Dutch Shell (RDSa.L) had considered a takeover bid during the Gulf of Mexico oil spill.

The dollar edged broadly higher on Tuesday, with the yen on the back foot after upbeat U.S. data suggested the world's biggest economy will accelerate in 2011.

Miners will be in focus as floodwaters eased in Australia's major coal mining region on Tuesday, allowing some mines to slowly resume production although most remained idle, as devastating floods affect some 200,000 people and force towns to be evacuated.

General Motors (GM.N) said on Tuesday it sold 2.35 million vehicles in China in 2010, up 28.8 percent from a year earlier.

Economic data on tap on Tuesday includes factory orders for November, while Federal Reserve issues minutes from its meeting of December 14.

Investors will also keep a close eye on monthly auto sales figures. Fifteen economists surveyed by Reuters forecast December auto sales of about 12.3 million on the annualized and seasonally adjusted basis tracked by the industry.

U.S. stocks greeted the new year with a rally on Monday as encouraging signs about the outlook for manufacturing around the world prompted investors to inject new money into the market.

The Dow Jones industrial average .DJI gained 93.24 points, or 0.81 percent, to 11,670.75. The Standard & Poor's 500 Index .SPX rose 14.23 points, or 1.13 percent, to 1,271.87. The Nasdaq Composite Index .IXIC climbed 38.65 points, or 1.46 percent, to 2,691.52.

(Reporting by Blaise Robinson; Editing by Hans Peters)

Rival Borders Group Inc (BGP.N), which has been seeking financing to fight credit woes, said on Monday that two top executives resigned. Its shares fell 8 percent after-hours.

Borders has been hurt by an industry-wide decline in sales of physical books and has not developed an e-reader to compete with Amazon's popular Kindle device.

Barnes & Noble said that same-store sales, or sales at superstores open at least 15 months, rose 9.7 percent for the nine-week period ended on January 1.

Barnes & Noble, which put itself up for sale in August, introduced the Nook in 2009 to compete with Amazon.com Inc's (AMZN.O) market-leading Kindle e-reader as it seeks to prove itself viable amid bookbuyers' shift to digital formats.

In the fall, the retailer introduced a well-reviewed, enhanced version of the device, NookColor, which has some functions similar to those of Apple's (AAPL.O) iPad tablet.

Barnes & Noble in November had forecast same-store sales for the entire current quarter, including the holiday period, would rise between 5 and 7 percent.

Barnes & Noble's numbers include Nook devices sold in stores but not on its website. Last week, Barnes & Noble, which operates 717 namesake stores in the United States, said the Nook had become its best-selling single item ever. The retailer said it would release more detailed sales figures on Thursday.

Barnes & Noble stands to win market share from smaller rival Borders, which said last week it would delay payments to some vendors as it seeks to negotiate new loan terms, putting into question publishers' willingness to ship it new books.

According to the Wall Street Journal, Rowman & Littlefield Publishing Group Inc, which publishes its own titles and distributes books for several hundred publishers through its National Book Network, said it would temporarily stop shipping books to Borders.

The New York Times reported that a spokesman for Ingram Book Company, a major book wholesaler, said on Monday the company was still shipping books to Borders.

Last week, Borders said it was delaying payments to some of its vendors, just weeks after the company said it was trying to obtain new financing to avoid violating the terms of its credit agreements early in 2011.

BORDERS' TROUBLES AGGRAVATE

Standard & Poor's analyst Michael Souers downgraded Borders' shares to "sell" from "hold," saying that even if Borders manages to restructure its debt, the new terms would be "onerous."

Souers called Borders' situation "dire" and said its current crisis could benefit Barnes & Noble permanently. He said Borders' lack of a proprietary e-reader was damaging.