Business Blog Posts

Automatic Data Processing (ADP) is set to release its March employment report at 1215 GMT (8:15 a.m. ET). Economists in a Reuters survey expect 203,000 jobs were created in March versus 217,000 new jobs in February. The figures will give an indication about Friday's widely watched nonfarm payroll numbers.

The Mortgage Bankers Association will release the Weekly Mortgage Market Index for the week ended March 25 at 1100 GMT. The mortgage market index read 524.4 and the refinancing index was 2,471.2 in the previous week.

U.S. chemicals company DuPont (DD.N) extended its $6 billion takeover bid for Denmark's Danisco (DCO.CO) by four weeks and said shareholders of 6 percent of Danisco's stock had accepted the offer.

Challenger, Gray & Christmas Inc will release its report on job cuts for March at 1130 GMT. Challenger reported 50,702 layoffs in the previous month.

Family Dollar's (FDO.N) quarterly earnings report will show how well the company did in keeping shoppers coming back to its nearly 6,900 stores.

TIBCO Software Inc (TIBX.O) fell 7.2 percent after the bell on Tuesday as its first quarter results and outlook failed to impress investors.

Japan upgraded its safety standards for nuclear power plants, the first official acknowledgement that norms were insufficient when an earthquake wrecked one of its facilities, triggering the world's worst atomic disaster since Chernobyl in 1986.

Toyota Motor Corp (7203.T) and Honda Motor Corp (7267.T) took fresh steps to scale back production or reduce orders of some parts in North America as supplies remain disrupted after the March 11 Japan earthquake.

Brent crude was steady near $115 on Wednesday, after falling as much as 0.6 percent on indications that higher fuel prices were weighing on consumer confidence in top user the United States, where crude inventories rose more than expected last week.

European shares hit a three-week high on Wednesday, with the pan-European FTSEurofirst 300 .FTEU3 index of top shares rising 0.9 percent.

Japan's Nikkei stock average .N225 rose 2.6 percent, hitting its highest since a post-quake panic sell-off, as the yen softened against the dollar, but investors said the gains may be short-lived as bargain hunting by foreigners winds down.

On Tuesday, the Dow Jones industrial average .DJI and the Standard & Poor's 500 .SPX both rose 0.7 percent, while the Nasdaq Composite .IXIC added 1 percent.

(Reporting by Atul Prakash; Editing by Hans Peters)

Although not an official policy statement, the paper by Xu Hongcai, a department deputy director at the China Center for International Economic Exchanges, offered a window onto the domestic pressures bearing on Beijing to move away from a dollar-centric global economy.

The China Center, a top government think tank, has represented the Chinese government in organizing a forum on Thursday in Nanjing that will bring together finance ministers, central bankers and academics from the Group of 20 wealthy and developing economies.

Xu's paper, "Reform of the international monetary system under the G20 framework," was published in Chinese on the center's website this week (www.cciee.org.cn).

"Nations around the world have no way of restricting dollar issuance by the Federal Reserve. The current international monetary system lacks both stability and fairness," Xu wrote.

He said the global monetary system had fallen into a "dollar trap." While it would be sensible to reduce dollar holdings in official currency reserves, nations cannot easily cut back, because doing so would only lead the dollar to weaken and so hit the value of their assets, he said.

CHINA'S DILEMMA

China's dollar dilemma is particularly acute, though Xu did not say as much. China had $2.85 trillion in foreign exchange reserves at the end of last year, more than any other country. About two-thirds are estimated to be invested in dollars.

Beijing has repeatedly warned that loose U.S. monetary policy threatens the dollar, but it has continued to accumulate dollar assets at the same time, adding about $260 billion of Treasury securities last year, according to U.S. data.

With the Chinese government determined to limit yuan appreciation, it must buy a large amount of the dollars streaming into the country from its trade surplus and recycle those into U.S. investments.

Xu was not shy about proposing ways to remake the global monetary system.

For a start, he said diversification was needed, with several reserve currencies. Other countries could reinforce these currencies' status by buying or selling them to keep their exchange rates stable, Xu said.

He said the International Monetary Fund should also play a policing role.

"If any international reserve currency depreciates, the IMF would be responsible for issuing a timely alert, increasing international pressure to force the country in question to take measures to stabilize its currency," he said.

LITTLE SUPPORT

Xu's call for regular intervention to keep key currencies steady is unlikely to find much support among developed economies, which have come to view a system of floating, largely market-determined exchange rates as the most stable underpinning of the global economy.

Renewed demand for shares came despite concerns the global economy could be hurt by Japan's struggle to contain the world's worst nuclear crisis in decades, conflicts in Libya and the Middle East and Europe's festering sovereign debt problems.

Concerns over those risks have eased, for now, with expectations that stocks worldwide will move higher into the new quarter, analysts and traders said.

"Global equities are stronger and it's risk-on again," a trader at a U.S. investment bank said.

Japan's Nikkei index .N225 rose 2.4 percent in afternoon trading, after two days of losses. So far in March, it has shed 8.8 percent, heading for its worst month since May 2010. Year to date, the benchmark has fallen 5.3 percent.

Among individual stocks, Tokyo Electric Power (9501.T) was the spotlight again, tumbling nearly 18 percent on concerns that the operator of the quake-stricken nuclear reactors in northeastern Japan may be nationalized.

Other Asian equities have recovered from their losses since a devastating earthquake and tsunami hit northeast Japan on March 11. MSCI's index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 1.5 percent on the day. It has risen 4.0 percent so far in March and up 0.6 percent this year.

MSCI's world index .MIWD00000PUS rose 0.3 percent, taking its gains for the year so far to more than 3.1percent, with weakness in Asia offset by strong gains early in the year in major indexes in the United States and Europe as investors rotated from emerging markets to large, developed ones.

The yen dipped to a 10-month low against the euro and neared a three-week trough versus the dollar early in Asia, having suffered broad losses after several chart support levels were breached plus expectations of rising rates in Europe and United States.

In recent days, several top U.S. central bank officials said further bond purchases by the Federal Reserve were not needed to support the economy, while European Central Bank President Jean-Claude Trichet signaled his inflation concerns because of rising food and energy prices.

SHIFT TO GRADUAL POLICY TIGHTENING

"We've had comments from the Fed and a shift in sentiment toward the U.S. policy from a rate perspective that has really pushed U.S.-Japan yield differentials, driving the dollar higher," said Mitul Kotecha, head of global FX strategy at Credit Agricole in Hong Kong.

The yield gap between two-year U.S. and Japanese government debt has ballooned over the past 1- weeks to a tad more than 61 basis points, the widest since early February.

Two-year U.S. Treasury yields, which are most sensitive to traders' views on changes in Fed policy, hovered at their highest in six weeks at 0.83 percent on Wednesday, while two-year JGB yields have bounced in a tight range of 0.18 percent to 0.25 percent so far this year.

Traders have been adjusting their books and most investors have moved to the sidelines in advance of the last day of the quarter and Japan's fiscal year. Light volume has heightened intraday volatility across financial markets.

Another report on Tuesday showed home prices fell for a seventh straight month in January but held above their post-housing bust low of April 2009.

The reports added to signs the U.S. economy lost momentum in early 2011, although the impact of high energy prices -- aggravated by unrest in Middle Eastern countries -- is likely to be temporary, economists said.

They point to an improving labor market as underpinning growth.

"We are likely looking at a continuing pattern of 'two steps forward, one step back' in terms of the collective mood, given the sources of uncertainty and risk that will not be easily resolved," said Jim Baird, a partner at Plante Moran Financial Advisors Kalamazoo, Michigan.

The Conference Board, an industry group, said its index of consumer attitudes fell to 63.4 in March after hitting a three-year high of 72.0 in February. The March reading was below economists' expectations for a drop to 65.0.

Rising gasoline prices, boosted by unrest in the Middle East and North Africa, are eroding consumer confidence and raising inflation expectations. A separate survey last week showed morale among households at its lowest in more than a year.

The Conference Board found one-year price expectations rose to their highest since October 2008.

Economists said the jump in inflation expectations was unlikely to trouble the Federal Reserve, which has said price pressure from commodities should be temporary. Core inflation, which strips out food and energy costs, is not far from recent record lows.

In Germany, worries about the global economy and inflation drove down consumer sentiment for the first time in 10 months.

U.S. financial markets were little moved by the data.

LOSING SOME MOMENTUM?

The weaker U.S. confidence survey came on the heels of numbers on Monday that showed consumer spending, adjusted for inflation, rose only modestly in February, pointing to a slowdown in first-quarter economic growth.

"It suggests to me that consumer spending is already tracking at about half the rate of growth in the first quarter as it did in the fourth quarter," said Christopher Low, chief economist at FTN Financial in New York.

The apparent hiccup in growth comes as policymakers at the Fed ramp up a debate on whether the economy is strong enough for the central bank to scale back its massive stimulus program.

The justices seemed sympathetic to Wal-Mart in considering whether a small group of women who began the lawsuit against the world's largest retailer 10 years ago can represent a huge nationwide class.

Justice Anthony Kennedy, a moderate conservative who often casts the decisive vote on the nine-member court, said, "I'm just not sure what the unlawful policy is."

Potentially liability could reach billions of dollars.

Even if Wal-Mart loses at the Supreme Court and then at trial, financial analysts said the Bentonville, Arkansas-based company has more than enough cash to make a big payout with little impact on its profits.

A crowd of protesters gathered outside the court, shouting "Fair pay now" and carrying signs such as "Stop discounting the women of Wal-Mart" and "The women of Wal-Mart are not worthless."

Chris Kwapnoski, a 24-year Wal-Mart employee and one of the named plaintiffs in the case, told reporters after the arguments, "We're not going to lose."

She recalled being told by a manager to "brush the cobwebs off" and "doll up" if she wanted advancement.

"Wal-Mart is trying their level best to keep us out of court so the facts will not be presented to the public at large or before a sitting jury," said Betty Dukes, a Wal-Mart employee in Pittsburg, California, who first filed a law suit against the retailer in 2001.

The court is likely to make a ruling by late June. The decision could change the legal landscape for workplace and other class-action lawsuits, affecting a similar case against Costco Wholesale Corp.

JUSTICE SCALIA: "IS THIS REALLY DUE PROCESS?

Businesses say a Wal-Mart defeat could make every large corporation vulnerable to sweeping allegations of employment bias and would water down class-action requirements.

The Supreme Court is only deciding whether the lawsuit can go to trial as a group. If the court rejects the class-action status, the individual women still can sue, both sides in the case say.

Large class-action lawsuits make it easier for big groups of plaintiffs to sue corporations and they have led to huge payouts by tobacco, oil and food companies.

During the session, some justices strongly questioned the women's arguments.