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HONG KONG (Reuters) � China's Sinochem Corp is in early talks with banks to finance its likely bid for all or part of Potash Corp of Canada (POT.TO), a newspaper reported on Saturday, in a sign that China is serious about derailing BHP Billiton Ltd's (BLT.L) $39 billion hostile bid.

Sinochem, which has hired Citigroup (C.N) and Deutsche Bank (DBKGn.DE) to explore options to foil BHP's bid, was not actively searching for cash, but it was entertaining loan proposals from global and Chinese banks, the South China Morning Post reported.

"We are talking to Sinochem about a big loan. They need to put financing in place, so that if they decide to make an offer, they can convince Potash's board they are good for the money," the newspaper quoted a managing director at a mainland bank.

The newspaper did not name the banker.

Last month, BHP launched a hostile $130-a-share offer for Potash (POT.N), the world's largest fertilizer maker. The Saskatoon, Saskatchewan-based company flatly rejected the bid as "grossly inadequate" and has filed a lawsuit against BHP in an attempt to stymie a takeover.

Interest in Potash is being fueled by an expected surge in fertilizer demand from China, India and other emerging economies due to rising food consumption.

Sinochem could not be reached for a comment immediately. BHP has received antitrust clearance from the U.S. Federal Trade Commission to proceed with its bid.

"We have approached Sinochem about lending very substantial amounts to support this potential deal. They are interested, but have made no firm commitments," the newspaper also quoted another unnamed banker as saying.

Potash's U.S.-listed shares gained 0.4 percent to close at $146.00 on Friday, representing a 12.3 percent premium to BHP (BHP.AX) offer price.

(Reporting by Denny Thomas; Editing by Nick Macfie)

NEW YORK (Reuters) � Stock investors will head into next week wondering if September will end as strongly as it began for the market, with manufacturing and personal income data among the top indicators on tap.

The data will be watched for further clues on whether the economic recovery is still on track and to see if the market's recent rally has support.

Friday's advance left the three major U.S. stock indexes with gains for the fourth week in a row, boosting investors' confidence that the upward move will continue.

The Standard & Poor's 500 index (.SPX) is up 9.5 percent since the end of August. Its move above the 1,130 level on Monday represented a technical breakout that analysts said suggested further gains were likely.

If the rally holds, it would make September the best month for the S&P 500 since at least March 2000, and the best September for stocks since 1939, according to Reuters' data.

"Sentiment has turned sharply higher over the past few weeks after very bearish readings last month," said Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.

The data next week includes two manufacturing reports -- one from the Institute for Supply Management and another from the ISM-Chicago, better known as the Chicago Purchasing Managers Index. A Commerce Department report on personal income and spending is also on the agenda.

The last ISM manufacturing report "helped propel the markets higher," Sheldon said, so "any disappointment could be a setback" for stocks.

OF FACTORIES AND PERSONAL FINANCE

Tepid demand amid a U.S. unemployment rate of 9.6 percent is expected to have caused a slowdown in manufacturing activity in September. The Institute for Supply Management's manufacturing index probably dropped to 54.5 in September from 56.3 in August, according to a Reuters poll of economists. A reading above 50 indicates expansion.

Data next week is also expected show moderate gains in personal income and consumer spending in August, consistent with views of an economy that is on a slow growth path, but not contracting. Both reports are due on Friday.

Next week also brings consumer confidence data, on Tuesday, as well as the Thomson Reuters/University of Michigan's final September reading on its consumer sentiment index on Friday.

The final figures on second-quarter gross domestic product will be out on Thursday, with the Reuters poll forecasting growth at an annual rate of 1.6 percent -- matching the second, or preliminary, reading on the quarter's GDP.

On Friday, September domestic car and truck sales will be reported. A rise in total vehicle sales to an annual rate of 11.50 million units is seen versus August's 11.43 million.

READING THE S&P'S SIGNALS

The S&P 500's move above 1,130 this week let the broad index break out of its recent trading range.

Technical analysts are watching 1,173 as the S&P 500's next level of resistance. That level represents the high following the May 6 flash crash. Another level to watch is 1,220, the S&P 500's high for this year.

"What's so important about moving above a trading range is it signals a willingness to buy at higher prices. That type of evidence is supportive of further upside," said Chris Burba, short-term market technician at Standard & Poor's in New York.

But "after such a huge run since late August, the odds of taking a breather here are increasing," he said.

For the week, the Dow Jones industrial average (.DJI) ended up 2.4 percent, while the S&P 500 gained 2.1 percent and the Nasdaq (.IXIC) climbed 2.8 percent.

Next week also marks the end of the third quarter and options analysts expect fund managers to try to pick up some of the quarter's better performers.

"A lot of option traders are anticipating window dressing, which is helping the winners of the last quarter, specifically Apple Inc (AAPL.O), Netflix (NFLX.O), Amazon,com (AMZN.O) and some material names, such as Freeport McMoRan (FCX.N) and Vale (VALE5.SA) (VALE.N)," said Steve Claussen, chief investment strategist at online brokerage OptionsHouse LLC in Chicago.

The earnings slate is light, with just a handful of S&P 500 companies expected to report results, including Jabil Circuit (JBL.N), Paychex (PAYX.O), Walgreen (WAG.N) and Family Dollar Stores (FDO.N).

(Reporting by Caroline Valetkevitch, with additional reporting by Rodrigo Campos, Lucia Mutikani and Doris Frankel; Editing by Jan Paschal)

WASHINGTON (Reuters) � Regulators seized three corporate credit unions on Friday and will repackage about $50 billion in troubled assets to sell on the open market.

The National Credit Union Administration said the three corporate credit unions, which provide clearing services to retail credit unions, were critically undercapitalized.

Barclays Capital will manage the securitization plan, the regulator said, adding that a securitization trust will be created to issue guaranteed notes backed by the U.S. government.

NCUA Chairman Debbie Matz said the agency also put in place on Friday regulations requiring corporate credit unions to hold higher levels of capital and setting risk limits.

The seizure of the three corporate credit unions comes after the NCUA last year took over two other such institutions, citing a critical deterioration in their finances.

Corporate credit unions are the retail credit union's credit union, providing services including lending, and check and payment clearance services.

Corporate credit unions have experienced more troubles than their retail counterparts because they did not face the same restrictions on permitted investments, leading to big losses in certain securities during the financial crisis.

The institutions seized on Friday were Members United Corporate Federal Credit Union of Warrenville, Illinois; Southwest Corporate Federal Credit Union of Plano, Texas; and Constitution Corporate Federal Credit Union of Wallingford, Connecticut.

The NCUA insures credit union and consumer deposits up to $250,000 per account.

(Reporting by Dave Clarke and Karey Wutkowski; Editing by Tim Dobbyn)