By Julie Haviv Julie Haviv – Tue Oct 26, 8:01 pm ET

NEW YORK (Reuters) – Data on Tuesday underscored the fragility of the economic recovery, with consumer confidence rising but still weak and home prices falling again after gaining earlier in the year.

The reports reinforced the belief the Federal Reserve will embark on another round of monetary policy stimulus to support the economic recovery, possibly as soon as next week.

Consumer confidence rose slightly in October but remained near historically low levels as concerns about the labor market persisted.

The Conference Board, an industry group, said its index of consumer attitudes rose to 50.2 in October from a revised 48.6 in September.

The Federal Reserve, which has already injected $1.7 trillion into the economy by purchasing mortgage-related and government bonds, meets on November 2-3.

Another round of quantitative easing, dubbed ‘QE2′, is expected to focus on Treasury debt.

The labor sector — U.S. unemployment rate remains stubbornly high at 9.6 percent — is one of the primary reasons the housing market remains fragile.

President Barack Obama could lose control of Congress in U.S. mid-term elections on Tuesday due to voter anxiety over the jobs market and housing sector.

Prices of U.S. single-family homes fell for a second month in August, hovering around recent lows after the expiration of popular homebuyer tax credits, according to a Standard & Poor’s/Case-Shiller report on Tuesday.

The price drop is largely a payback from the tax credits, which induced gains earlier this year.

“At this point the big factor out there is the foreclosure situation and it certainly doesn’t look very good. We have a lot of excess supply to work through, a lot of potential foreclosures and what appears to be an increasing legal mess,” David M. Blitzer, chairman of the index committee at Standard & Poor’s, told Reuters Insider. “It’s going to take quite a while to get housing back on its feet.”

The housing market has been struggling since home buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.

U.S. stocks were lower, with soft commodity prices and disappointing results from the steel sector weighing on materials stocks. The Standard & Poor’s 500 Index (.SPX) was down 0.25 percent

U.S. Treasury debt fell in price after a two-year note auction, while the U.S. dollar extended gains versus the euro.

Another report on Tuesday showed home price gains in August [ID:nWBT014211]. The U.S. Federal Housing Finance Agency home price index is calculated using purchase prices of houses financed by Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB).

Home prices in August reflected conditions before banks temporarily halted foreclosures due to questionable documentation. Home prices may benefit from fewer foreclosures in the mix, but any rise should prove to be temporary.

The housing market, however, remains highly vulnerable to setbacks and most economists believe a recovery will be elusive until the labor market improves.

FED EASING NOT A DONE DEAL

Some hope for the U.S. economy came by way of several major U.S. companies on Tuesday.

Ford Motor Co (F.N) posted a higher-than-expected quarterly profit on Tuesday and accelerated plans to cut debt and borrowing costs to bring the automaker closer to an investment-grade credit rating.

DuPont (DD.N), the world’s fourth-largest chemical maker by revenue, reported a higher-than-forecast quarterly profit and boosted its 2010 earnings forecast above Wall Street’s expectations.

Additionally, three U.S. industrial companies posted better-than-expected profits on Tuesday and provided generally upbeat assessments of the global economic recovery, suggesting Europe and North America may finally be stabilizing.

The upbeat outlooks could serve to fuel arguments that the U.S. Federal Reserve may not need to pump more money into the financial system next week and might wait longer.

“I think it’s still possible that QE2 is not a done deal for November, even though the market has been trading as if it is,” said Brian Dolan, chief economist at Forex.com in Bedminster, New Jersey,

“This is one of the last bullets the Fed has in its gun and it’s going to be very reluctant to fire it unless circumstances are really dire,” he said. “It might be put off until the first quarter. I think the market has started to consider that this week.”

Nevertheless, an overwhelming majority of economists still see the need for economic stimulus and expect clarification next week.

(Additional Reporting by Wanfeng Zhou, Ernest Scheyder and Steven Johnson in New York, Bernie Woodall and David Bailey in Detroit and James B. Kelleher in Chicago; Editing by Andrew Hay)
By Julie Haviv Julie Haviv – Tue Oct 26, 8:01 pm ET

NEW YORK (Reuters) – Data on Tuesday underscored the fragility of the economic recovery, with consumer confidence rising but still weak and home prices falling again after gaining earlier in the year.

The reports reinforced the belief the Federal Reserve will embark on another round of monetary policy stimulus to support the economic recovery, possibly as soon as next week.

Consumer confidence rose slightly in October but remained near historically low levels as concerns about the labor market persisted.

The Conference Board, an industry group, said its index of consumer attitudes rose to 50.2 in October from a revised 48.6 in September.

The Federal Reserve, which has already injected $1.7 trillion into the economy by purchasing mortgage-related and government bonds, meets on November 2-3.

Another round of quantitative easing, dubbed ‘QE2′, is expected to focus on Treasury debt.

The labor sector — U.S. unemployment rate remains stubbornly high at 9.6 percent — is one of the primary reasons the housing market remains fragile.

President Barack Obama could lose control of Congress in U.S. mid-term elections on Tuesday due to voter anxiety over the jobs market and housing sector.

Prices of U.S. single-family homes fell for a second month in August, hovering around recent lows after the expiration of popular homebuyer tax credits, according to a Standard & Poor’s/Case-Shiller report on Tuesday.

The price drop is largely a payback from the tax credits, which induced gains earlier this year.

“At this point the big factor out there is the foreclosure situation and it certainly doesn’t look very good. We have a lot of excess supply to work through, a lot of potential foreclosures and what appears to be an increasing legal mess,” David M. Blitzer, chairman of the index committee at Standard & Poor’s, told Reuters Insider. “It’s going to take quite a while to get housing back on its feet.”
Larger version

The housing market has been struggling since home buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.

U.S. stocks were lower, with soft commodity prices and disappointing results from the steel sector weighing on materials stocks. The Standard & Poor’s 500 Index (.SPX) was down 0.25 percent

U.S. Treasury debt fell in price after a two-year note auction, while the U.S. dollar extended gains versus the euro.

Another report on Tuesday showed home price gains in August [ID:nWBT014211]. The U.S. Federal Housing Finance Agency home price index is calculated using purchase prices of houses financed by Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB).

Home prices in August reflected conditions before banks temporarily halted foreclosures due to questionable documentation. Home prices may benefit from fewer foreclosures in the mix, but any rise should prove to be temporary.

The housing market, however, remains highly vulnerable to setbacks and most economists believe a recovery will be elusive until the labor market improves.

FED EASING NOT A DONE DEAL

Some hope for the U.S. economy came by way of several major U.S. companies on Tuesday.

Ford Motor Co (F.N) posted a higher-than-expected quarterly profit on Tuesday and accelerated plans to cut debt and borrowing costs to bring the automaker closer to an investment-grade credit rating.

DuPont (DD.N), the world’s fourth-largest chemical maker by revenue, reported a higher-than-forecast quarterly profit and boosted its 2010 earnings forecast above Wall Street’s expectations.

Additionally, three U.S. industrial companies posted better-than-expected profits on Tuesday and provided generally upbeat assessments of the global economic recovery, suggesting Europe and North America may finally be stabilizing.

The upbeat outlooks could serve to fuel arguments that the U.S. Federal Reserve may not need to pump more money into the financial system next week and might wait longer.

“I think it’s still possible that QE2 is not a done deal for November, even though the market has been trading as if it is,” said Brian Dolan, chief economist at Forex.com in Bedminster, New Jersey,

“This is one of the last bullets the Fed has in its gun and it’s going to be very reluctant to fire it unless circumstances are really dire,” he said. “It might be put off until the first quarter. I think the market has started to consider that this week.”

Nevertheless, an overwhelming majority of economists still see the need for economic stimulus and expect clarification next week.

(Additional Reporting by Wanfeng Zhou, Ernest Scheyder and Steven Johnson in New York, Bernie Woodall and David Bailey in Detroit and James B. Kelleher in Chicago; Editing by Andrew Hay)

by Roland Jackson Roland Jackson   – Fri Oct 8, 7:44 am ET

LONDON (AFP) – The dollar traded near an eight-month low against the euro on Friday and stock markets slid ahead of key US data and as major powers gathered in Washington to avert a damaging global “currency war.”

With recovery painfully slow, recent weeks have seen nations from Japan to Colombia intervene to stop their currencies from rising to levels that would make exports prohibitively expensive, sparking talk of a currency war among key trading nations.

“It is a very real threat, and it will be in focus this weekend at the IMF/World Bank series of meetings in Washington,” said GFT analyst David Morrison.

In London trade, the euro eased to 1.3914 dollars, one day after it had rocketed to 1.4029 dollars — the highest level since late January.

Against the Japanese currency, the dollar stood at 82.34 yen, after tumbling on Thursday to a 15-year low at 82.11.

European stock markets also declined, with investors on tenterhooks ahead of crucial US payrolls figures due at 1230 GMT.

Later on Friday, the world’s top economic powers will gather in Washington and address fears of potentially damaging currency competition amid bleak hopes for a deal between China, the United States and other top nations.

Finance ministers and central bankers from 187 countries will convene for an annual meeting of the International Monetary Fund confronted by warnings that beggar-thy-neighbor policies could wreck the global recovery.

“Given the recent environment of rhetoric about ‘currency wars’, unilateral intervention in foreign exchange markets and the introduction of policies to limit capital flow, there has been a lot of attention focused on what can be expected from this weekend’s meetings,” said Barclays Capital analyst Raghav Subbarao.

The dollar fell sharply this week after Japan adopted further economic stimulus measures, stoking speculation the US Federal Reserve would follow suit with a second round of what is known as quantitative easing — notably the pruchase of bonds and other assets.

Such a move would likely dilute the value of the US unit.

“It was the Bank of Japan which effectively poked the hornets’ nest with its unilateral intervention to stem the rise of the yen,” added Morrison.

“This led to a general outcry from both China and the United States, and saw further interventions from Brazil, Taiwan and South Korea as these countries vied to keep their currencies competitive and their export markets buoyant.”

The summit is set to be dominated by a long running and increasingly bitter dispute between the United States and China — whose weak yuan policies are accused of slowing the global recovery and hurting American jobs.

Ahead of the Washington gathering, China’s yuan on Friday hit its highest level since Beijing vowed to loosen its grip on the unit in June.

The People’s Bank of China set the yuan central parity rate — the middle of the currency’s allowed trading band — at 6.6830 to the dollar, the strongest since policymakers promised limited exchange rate reform.

The yuan strengthened during trading to close at 6.6706 to the dollar, Dow Jones Newswires reported, taking gains since the summer pledge to 2.3 percent.

China has a history of allowing the yuan to strengthen slightly ahead of events at which it expects to come under heightened pressure over the value of the currency, which US and European lawmakers say is grossly undervalued.

Germany argued Friday that the current levels of the yuan and dollar do not reflect “their real value,” according to a spokesman for German Chancellor Angela Merkel.

Rabobank analyst Jane Foley said the United States was correct to call for China to allow the yuan to appreciate.

“Theoretically, US authorities are correct to call for a recalibration of the yuan, insofar as it would help rebalance China’s big surpluses — but the US needs to be careful about pointing the finger too much,” Foley told AFP.

“The term ‘currency war’ was coined by the Brazilians who have been swimming against the tide of foreign inflows seeking higher returns.

“These inflows are clearly making the management of monetary policy difficult for the Brazilian, and the South Korean and Thai authorities. In fact, they could spark asset price bubbles throughout the emerging world.

“The Federal Reserve, which has a policy of proving ample cheap money through quantitative easing, must take some of the responsibility for this.

“Amongst countries with fully convertible currencies, the United States, via the Fed, are currently behaving as the biggest player in the currency war,” she added.

Later Friday, dealers will digest US non-farm payrolls figures for September, which could increase pressure for more Fed stimulus measures if they disappoint the market.

– 1 hr 13 mins ago

NEW YORK/LOS ANGELES (Reuters) – Amazon.com Inc has approached media companies with a proposal for a subscription service that gives users unlimited access to some television shows and movies over the Internet in a bid to rival Netflix Inc, two people familiar with the talks said on Tuesday.

The Seattle-based online retailer has approached media companies including Time Warner Inc, CBS Corp and Viacom Inc, these people say.

It is still not clear if the media companies would agree to Amazon’s proposals which are still at an early stage, according to one person familiar with the talks.

Amazon’s website already features a range of TV shows and movies in its video-on-demand section that are generally available for sale individually from $1.99.

But an Amazon subscription service would likely be similar to Netflix’s online streaming service which works in tandem with its DVD rental business.

Like Netflix most of the TV shows and movies available for streaming would be older because the media companies are wary of devaluing their content, said the same person familiar with the talks.

News of the Amazon proposal was first reported by the Wall Street Journal which said General Electric Co’s NBC Universal was also approached.

Amazon did not return calls seeking comment. CBS, Viacom Time Warner and NBC Universal declined to comment.

The Journal reported that in at least one version of Amazon’s proposal, subscriptions could be bundled with its existing Amazon Prime service immediately, giving the service a large number of built-in subscribers.

Prime is a service that offers members free 2-day shipping on most Amazon purchases for $79 a year.

The news comes as more companies try to boost their online TV businesses.

Hollywood studios and media companies are vying to boost their online businesses, in part to stem online piracy of their content and also because of the higher margins they receive on digital sales.

Apple Inc is expected to unveil the latest version of its Apple TV product on Wednesday. The new service is expected to offer TV shows for rent at 99 cents each. Bloomberg said the new service will feature Netflix’s online service. Netflix declined to comment.

Google Inc has also been eyeing a TV or movie subscription service for its YouTube website. It has had ongoing conversations with several studios in the last year as well.

At the same time, studios have reacted with some unease to the shift in distribution of movies and TV shows to the Web, given that they have lucrative deals with cable providers to air that content.

Last year, online sales and streaming of movies amounted to $300 million in the United States, and $340 million for TV shows, according to Adams Media Research.

NBC Universal, News Corp’s Fox Broadcasting and Walt Disney Co’s ABC network have collaborated to offer online streaming of shows at Hulu.com, but one of the fastest areas of digital distribution of Hollywood content has been Netflix’s online streaming service.

(Reporting by Dhanya Skariachan, Jennifer Saba and Yinka Adegoke; and Alex Dobuzinskis in Los Angeles; Editing by Ilaina Jonas, Matthew Lewis and Richard Chang)

Thu Aug 26, 3:51 am ET

TOKYO (AFP) – Japan’s All Nippon Airways Co. (ANA) became the nation’s top air carrier in June, dethroning flagship carrier Japan Airlines Corp. (JAL) on passenger volume and cargo, the Nikkei reported Thursday.

ANA’s passenger figures for both domestic and international flights in June reached 3.65 million, up 10 percent from a year ago, the business daily said.

JAL, going through a court-led restructuring process after filing for a bankruptcy protection, carried 3.55 million passengers in the month, marking a one-percent decline on-year, according to the Nikkei.

ANA logged 30-percent growth in international travelers, the newspaper said.

Meanwhile, JAL continued to reduce flights and withdrew from unpopular routes. Its domestic passengers fell three percent and international passengers increased just six percent, the newspaper said.

Factors related to its bankruptcy such as its tainted corporate image and the end of shareholder perks apparently drove customers away, the Nikkei said.

The carrier is due to submit a finalised turnaround plan to the Tokyo District Court at the end of this month.

Mon Jul 19, 1:52 pm ET

NEW YORK (Reuters) – Fifty-four percent of large U.S. businesses that laid off employees in the past year want to rebuild their workforces but some will have trouble finding sufficiently skilled people to hire, a study said on Monday.

The study by management consulting firm Accenture found about half of large firms plan to return to their pre-recession levels of employment within two years and only 13 percent said they planned to reduce their workforce.

Moreover, those surveyed said they were less concerned about cost control. Companies focused primarily on cost control will decrease from 41 percent in mid-2009 to 18 percent in 2011, the study said.

U.S. companies focused primarily on investment in growth-oriented activities, such as hiring, will increase from 24 percent today to 37 percent within the next 12 months, Accenture said in a news release.

But companies also reported a shortage of skills within the workforce. Idled workers may have fallen behind on skills while out of a job, forcing them and employers to invest in training, Accenture said.

“The outlook is improving. But … companies need to rethink how they equip employees with the skills required to be competitive today,” said David Smith, managing director of the Accenture Talent and Organization Performance practice, said in a statement.

“If you look at an industry like health care where the demand for IT (information technology) skills is growing so fast, there just aren’t that many people with the right IT skills,” Smith said through a spokeswoman.

Skills were particularly lacking within sales and customer service workforces, the survey said. Twenty-seven percent of respondents said their companies lack the skills required of their sales workforce, and 25 percent said a significant proportion of skills in their customer service organizations were out of date.

The study was completed from surveys conducted between January and May with 674 senior executives in 24 countries representing companies with revenues over $250 million. The U.S.-based results were taken from 117 respondents in the United States.

(Reporting by Daniel Trotta; Editing by Doina Chiacu)