Tokyo stocks flat, BOJ's ETF buying helps mood

(Reuters) - Japanese stocks were flat on Wednesday as investors, emboldened by the central bank's purchases of exchange-traded funds, hunted for bargains, offsetting worries about euro zone debt woes that have led to renewed strength in the yen.

The Bank of Japan purchased 22.1 billion yen ($275 million) in Japanese ETFs the previous day, part of its asset-buying scheme to support the economy, and it has typically bought whenever the Nikkei stock average falls more than 1 percent, as it did on Tuesday.

"A further sell-off seems to have stopped for now," said Yumi Nishimura, a senior market analyst at Daiwa Securities, adding that the central bank's move was reassuring to investors.

As European debt woes mounted, the dollar briefly plunged below 79.00 yen for the first time since mid-March, before recovering to around 79.40 yen. The euro stood at 111.37 yen after dropping 1.4 percent to 110.98 yen.

"People are now used to seeing the dollar dipping below 80 yen, but the question is whether this strong yen trend is temporary or is it one that will last for a while," said Yutaka Miura, a senior technical analyst at Mizuho Securities.

"If it lasts for a week, the Nikkei may fall toward 9,500."

The benchmark Nikkei .N225 was flat at 9,926.81 at the midday break after rising as high as 9,973.23, while the broader Topix index .TOPX added 0.2 percent to 858.92.

Moody's cut Ireland's credit rating to junk on Tuesday, warning that the debt-laden country would likely need a second bailout, while European officials, for the first time, refused to rule out default by Greece.

Investors fear the crisis could overtake the bigger European economies of Spain and Italy, though some Tokyo-based fund managers were hopeful that the impact on domestic equities would be limited.

"While such global economic fears remain, there are hopes for strong earnings for the April-June quarter, so the Tokyo market may not fall sharply this month," said Naoki Fujiwara, a fund manager at Shinkin Asset Management.

Chip-related shares slipped after Microchip Technology Inc (MCHP.O) tumbled 12 percent on Tuesday, a day after the chipmaker cut its first-quarter outlook hurt by lower automotive production and weakness in consumer and computing end markets.

Advantest Corp (6857.T) shed 0.9 percent to 1,515 yen in active trade, while Tokyo Electron (8035.T) fell below its 25-day moving average, losing 1.1 percent to 4,320 yen. Tokyo Seimitsu (7729.T) dropped 2.2 percent to 1,495 yen.

But some exporters rose on bargain hunting, with Toshiba Corp (6502.T) rising 1.0 percent to 416 yen and Sony Corp (6758.T) adding 0.3 percent to 2,143 yen.

Shares of Mitsui & Co (8031.T) made their biggest daily gain in the last three weeks, adding 2.3 percent to 1,435 yen, after the trading house said it would launch a rival offer for Singapore port operator Portek International (PKIL.SI), outbidding Philippines' International Container Terminal Services Inc (ICT.PS).

Shares in mobile social gaming company DeNA (2432.T) gained 2.0 percent to 3,765 yen after Morgan Stanley Mitsubishi UFJ Securities hiked the firm's rating to "overweight" from "equal weight," citing its overseas expansion and attractive valuations.

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Wall Street rallies on jobs data, retailers

(Reuters) - Wall Street jumped on Thursday after signs of life in the labor market and strong sales at some U.S. retailers lifted optimism in the economy ahead of Friday's key June jobs report.

Data from payrolls processor ADP showing U.S. private hiring increased by more than double expectations coupled with a fall in new claims for jobless benefits raised hopes that a recent slow down in the U.S. economy may only be temporary.

The reports also fueled speculation that Friday's non-farm payrolls report from the Labor Department would provide more evidence of an improving labor market, a key factor if markets are to rally into the end of the year.

"If tomorrow's report follows through on today's positive ADP report and comes in above 125,000, that could be enough to push equity markets through the top end of the trading range that we have been in since February and March," said Michael Sheldon, chief market strategist at RDM Financial.

The S&P 500 is likely to run into strong overhead resistance at mid-1,300, according to technical analysts at UBS, about where the index found a ceiling on Thursday,

"Failure to break out above major supply will promptly lead to a near-term trading range between 1,258-1,263 and 1,340-1,345," the analysts said in a research note.

Retailers were among the best performers after several top companies reported better-than-expected sales gains for June, using bargains to lure shoppers in an uncertain economy.

Target Corp (TGT.N) shares jumped 6.5 percent to $51.59 and Macy's Inc (M.N) added 3.2 percent to $29.80. The S&P retail index .RLX gained 2.1 percent.

The Dow Jones industrial average .DJI gained 81.32 points, or 0.64 percent, to 12,707.34. The Standard & Poor's 500 Index .SPX added 11.53 points, or 0.86 percent, to 1,350.75. The Nasdaq Composite Index .IXIC rose 33.33 points, or 1.18 percent, to 2,867.35.

Employers are expected to have added 90,000 jobs in June in Friday's Labor Department report, according to a poll of economists by Reuters.

The ADP report showed the private sector added 157,000 jobs last month, exceeding expectations for a gain of 68,000.

Stocks have recovered sharply from losses in May and June when the S&P 500 fell around 7 percent. Thursday marks a continuation of a rally last week that pushed the index up 5.6 percent as more investors come to the view that a recent slowdown in the U.S. economy will reverse in the second half.

"That is precisely the kind of number the market needs in order to bolster confidence that our soft patch is brief and behind us," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey. "It's definitely the type of green light the market is looking for to move higher."

Major brokerages raised their price targets on Visa Inc (V.N) a day after the world's largest card processing network said the impact from the Federal Reserve's new debit fee rule was "manageable." Visa's stock rose 1.5 percent to $89.52.

There were some glimmers of a potential compromise that would avoid a debt default as President Barack Obama and top congressional leaders searched for ways to break a deadlock over spending and taxes.

However, a small team of U.S. Treasury officials is discussing options to stave off default if Congress fails to raise the country's borrowing limit by an August 2 deadline, sources familiar with the matter said on Wednesday.

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Energy stocks push major indexes higher

NEW YORK (AP) — Energy companies drove major indexes higher Monday after Alpha Natural Resources made a bid for rival coal producer Massey Energy and Exxon Mobil reported strong earnings.

Alpha offered $7.1 billion in cash and stock for Massey and the nation’s fourth-largest coal producer by revenue accepted it. That sent Massey’s stock up 11 percent in early trading, making it the best performer in the Standard & Poor’s 500 index.

Other major coal companies, including Consol Energy Inc. and Peabody Energy Corp., rose by more than 2 percent.

The Massey deal suggests “maybe coal isn’t dead,” said Kim Caughey Forrest, equity research analyst at Fort Pitt Capital Group. It also raises hopes for similar deals in the future.

Energy stocks also got a lift after Exxon Mobil Corp. reported its most profitable quarter since the record third quarter of 2008. That sent its shares up about 1 percent in early trading.

The Dow Jones industrial average rose 11, or 0.1 percent, at 11,833. The Standard & Poor’s 500 index rose 3, or 0.3 percent, at 1,279. The Nasdaq composite index fell 3, or 0.1 percent, at 2,683.

Treasury prices fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 3.35 percent from 3.33 percent late Friday.

Investors were also encouraged after the Commerce Department reported that Americans increased their spending sharply in December. Consumer purchases for all of 2010 rose at the fastest pace in three years.

But the unrest in Egypt continued, and concerns remained about Egypt’s impact on oil prices, especially if the Suez Canal, a key route for oil tankers and cargo ships, may be closed.

“The market wants to work its way higher,” said Sam Stovall, chief investment strategist of Standard & Poor’s. “The big worry is the unknown — the cascading effects that could occur.”

Oil prices rose 27 cents to $89.61 in morning trading.

Investors will get several additional updates on the economy later in the week, including reports on auto sales, construction spending, factory orders and employment for January.

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World markets sink as protests escalate in Egypt

Escalating protests in Egypt jarred world financial markets today. Stocks fell while the dollar, Treasurys and gold rose as investors sought to reduce their exposure to risk.

The Egyptian government’s response to escalating street protests unnerved investors. The military was deployed in an effort to restore order and the headquarters of the ruling party was on fire. Thousands of people defied a curfew, and Internet and cell phone service has been cut off.

Earlier, riot police fired tear gas, rubber bullets and used water cannons to disperse crowds that had gathered in the largest challenge to Egyptian president Hosni Mubarak’s thirty-year rule. Investors have been concerned that the collapse of the Tunisian government Jan. 14 could lead to challenges to other authoritarian governments in the Middle East.

“The safety trade is back,” said Jeffrey Frankel, president of broker Stuart Frankel & Co. “Gold is up. Oil is up. Anything related to overseas is getting hit.”

Prices of Treasury bonds, considered one of the safest assets, rose sharply. The yield on the benchmark 10-year Treasury note fell to 3.32 percent from 3.38 percent late Thursday. Bond yields fall when their prices rise.

The dollar rose 0.6 percent against an index of six other currencies as investors sought safety. Gold rose 1.6 percent to $1,339.50 and crude oil rose 4.4 percent to $89.42 a barrel.

The Egyptian stock market was closed for a holiday. It fell 10.5 percent Thursday.

The MSCI World Market index, the broadest measure of the world’s stock markets, slumped 1.3 percent.

“Traders are watching this flare-up in the Middle East and using it as a reason to take profits,” said Doug Godine, managing director at Signal Hill, an investment bank. Prior to this week, the Dow Jones industrial average had been up for eight straight weeks.

Disappointing earnings reports also helped send stocks lower. Ford Motor Co sank 12 percent after its earnings fell short of Wall Street’s projections. Amazon.com Inc. fell 8.5 percent after reporting that higher costs cut down its profit margins. Microsoft Corp. lost 4 percent after it said that the profitability of its Windows division was falling.

The Dow Jones industrial average fell 138 points, or 1.2 percent, to 11,852 in afternoon trading.

The Standard & Poor’s 500 index fell 18, or 1.4 percent, to 1,281. All 10 company groups that make up the S&P index fell.

The Nasdaq composite index fell 61, or 2.2 percent, to 2,694. The index was not updated nearly an hour after the market opened due to technical problems.

A lower than expected report on the U.S. economy helped lead to a market sell-off as well. The Commerce Department reported that U.S. gross domestic product grew at an annual rate of 3.2 percent between October and December. That was below the 3.5 percent that analysts had forecast.

Sara Lee Corp. fell 2.2 percent after announcing a plan to split into two companies. One, a food and retail business, will keep the Sara Lee name and also operate the Jimmy Dean and Hillshire Farms businesses. The other, which has yet to be named, will hold the current company’s beverages and baked goods lines. The company had considered selling the whole business but was unable to get a satisfactory price for it.

The Associated Press NEW YORK — Stocks are rising in early trading after a report showed that the U.S. economy is growing.

The Commerce Department said Friday that U.S. gross domestic product grew at an annual rate of 3.2 percent between October and December. That’s up from 2.6 percent in the previous quarter.

Microsoft Corp. rose 2.4 percent after its fourth quarter earnings beat analysts’ estimates. But Ford Motor Co. lost 7 percent after its revenues fell short of Wall Street’s projections.

The Dow Jones is up 7 points, or 0.1 percent, to 11,997 in morning trading. The S&P 500 is up 1, or 0.1 percent, to 1,300. The Nasdaq composite is flat at 2,755.

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Durable goods orders rebound in May

WASHINGTON (AP) — U.S. businesses boosted their orders for machinery, electronics products and airplanes in May. The pickup suggests manufacturing is rebounding after the Japan crises made parts scarce and slowed production of some factory goods temporarily.

Orders for long-lasting manufactured products increased 1.9 percent in last month, the Commerce Department said Friday. A key category that signals business investment plans rose 1.6 percent.

The stronger demand follows a revised 2.7 percent decline in April that was largely the result of supply disruptions caused by Japan's March 11th earthquake and tsunami. The inability to get critical component parts in such industries as autos and electronics slowed U.S. manufacturing.

"The rebound in orders for new durable goods in May will help ease any fears that the economy is headed for a double-dip recession," said Paul Ashworth, chief U.S. economist at Capital Economics.

But Ashworth said the new report did not change his belief that "economic growth has slowed sharply over the past few months."

Orders for autos and auto parts rose 0.6 percent in May after having fallen 5.3 percent in April. The rebound in May in both autos and broader categories supports the view that the April lull was temporary.

A wide range of industries showed strength in May. Businesses boosted their orders for machinery 1.2 percent and demand for computers rose 1.3 percent. Communications equipment jumped 3.6 percent increase.

Businesses boosted demand for transportation products 5.8 percent. Much of that increase reflected a 36.5 percent surge in orders for commercial aircraft, a very volatile industry which had reported a big decline in production in April. Excluding the volatile transportation category, orders would have risen 0.6 percent in May after dropping 0.4 percent in April.

The capital goods category excluding aircraft is viewed as a proxy for business investment. It rose 1.6 percent after a 0.8 percent drop in April. Economists believe this category will show strength as companies respond to a one-year tax break aimed at spurring capital spending.

Manufacturing has been one of the strongest sectors of the economy since the recession official ended two years ago. However, there are concerns that the production pace could slow in coming months as businesses decide to scale back their restocking of inventories.

A closely watched gauge of manufacturing activity from the Institute for Supply Management showed manufacturing dipped to 53.5 in May from 60.4 in April. Readings above 50 indicate manufacturing is continuing to expand. Regional manufacturing surveys put out by the Federal Reserve Banks of New York and Philadelphia also showed recent weakness.

But as production returns to more normal levels in Japan, economists are forecasting that disruptions to factory production in the United States will ease in coming months.

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Stocks dip as job market worries continue

NEW YORK—What began with a steep drop in the stock market ended with a modest decline Thursday. The Dow Jones industrial average lost just 60 points after being down nearly 240 points earlier in the day.
A jump in the number of people applying for jobless benefits and plummeting oil prices drove stocks lower at the market open. By 11 a.m., the Dow was down 234 points. Then came late afternoon reports that Greece may have reached a deal for a new austerity plan. The Dow made up nearly 100 points between 2:45 and 3 p.m. alone.

The Dow finished with a loss of 59.67 points, or 0.5 percent, to 12,050. The Standard & Poor's 500 index, down as many as 24 points, closed down just 3.64, or 0.3 percent, to 1,283.50.

Since late April, reports on manufacturing, retail sales, home sales and other economic indicators have come in weaker than economists anticipated. Europe's debt problems and a slowing growth rate in China have also raised concerns about the global economy. On Wednesday, Federal Reserve Chairman Ben Bernanke said problems plaguing the economy may last longer than previously thought.

As a result, the stock market has fallen six of the last seven weeks. The S&P 500 is down 5.9 percent from its high for the year of 1363.61 in April.

"This is no longer looking like a small soft patch. It's beginning to look more like quicksand," said Lawrence Creatura, a stock portfolio manager at Federated Investors.

The continued rise in first-time claims for unemployment benefits indicated little improvement in the job market since May, when there was a drop in the number of new jobs created. New applications for unemployment benefits rose to 429,000 last week, from 420,000 the week before.

"400,000 is the magic number and we've been above it for 11 weeks," Creatura said.

Energy companies like Exxon Mobil and Chevron Corp. led the market downward after oil prices tumbled nearly 5 percent. Oil dropped after the International Energy Agency said 60 million barrels of oil would be released from reserves to make up for the loss of Libyan exports. Oil prices had spiked following unrests in Middle East and North Africa, raising concerns that higher fuel costs would slow the world economy.

Companies like Netflix, Priceline.com and others in the consumer discretionary industry were mostly up. Overall, the group rose 0.4 percent. Investors are betting that a drop in oil costs could lead consumers to spend more money on things like movies, restaurants and clothing. Netflix was up 2.9 percent. Chipotle Mexican Grill gained 2.2 percent.

Companies that benefit from lower fuel costs also rose. Airline stocks like United Continental Holdings Inc. and AMR Corp, the parent company of American Airlines, rose more than 4 percent.

The two indexes most tied to economic growth fared better than the broader market. The tech-focused Nasdaq composite index was up 17.56, or 0.7 percent, to 2,686.75. And the Russell 2000 index of small companies gained 0.4 percent. For the week, both are up 2.7 percent.

"We're starting to see that the supply-chain disruptions caused by the tragedy in Japan are easing a bit, and the biggest beneficiaries of that are technology and auto-supply companies" which tend to be smaller businesses, said Burt White, the chief investment officer at LPL Financial.

Among the most active stocks, Bed Bath & Beyond gained 5.3 percent after the home furnishings retailer posted a 31 percent jump in income. The company also raised its earnings forecast for the rest of the year, in part because of cost controls it has in place. ConAgra Foods Inc. fell 0.2 percent. The owner of Slim Jim and Hebrew National brands cut its earnings estimate for the current quarter.

Government bond prices were higher as traders shifted money into investments that are considered safe, pushing long-term interest rates lower. The yield on the 10-year Treasury note sank to 2.90 percent, near its low mark for the year. Bond yields fall when their prices rise.

Even so, portfolio manager Creatura says that the recent market slide could represent a chance to pick up some stocks on the cheap. Current prices already reflect reaction to most of the economy's problems, he says. "The most fearful times can be the best times to invest," he said. "It's not only what you buy, it's the price you pay that matters."

Three stocks fell for every two that rose on the New York Stock Exchange. Volume was slightly above average at 4.4 billion.

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Wall Street adds to losing streak after Bernanke speaks

Stocks extended a losing streak for a fifth day on Tuesday on mounting concerns about the economy after bearish comments from Federal Reserve Chairman Ben Bernanke.

The market, which started off on a positive note after the S&P 500 hit a two-month low in the previous session, reversed course to turn negative after Bernanke started speaking. He acknowledged a slowdown in the economy, but offered no suggestion the central bank is considering any further monetary stimulus to support growth.

Bernanke also issued a stern warning to lawmakers in Washington who are considering aggressive budget cuts, saying they have the potential to derail the economic recovery.

"It's not like the market was expecting a positive comment from him, but not quite this negative, either. But I think the impact would be limited. I don't see this carrying over to tomorrow's market," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Bernanke indicated the latest bout of weakness probably would not last very long and should give way to some growth in the second half of the year.

A batch of weak economic data recently, especially in the job market, has pushed major indexes below their support levels.

The Dow Jones industrial average .DJI slipped 19.15 points, or 0.16 percent, to end at 12,070.81. The Standard & Poor's 500 Index .SPX declined 1.23 points, or 0.10 percent, to 1,284.94. The Nasdaq Composite Index .IXIC shed 1.00 point, or 0.04 percent, to finish at 2,701.56.

CORRECTION SEEN, BUT NO BEAR

The S&P 500 has fallen 4.2 percent from a month ago. But a veteran chief equity strategist said the three major U.S. stock indexes could fall as much as 10 percent from their May highs, suggesting that a low in the market might be not far off.

Barring unexpected shocks, though, a bear market is unlikely, Tobias Levkovich, the Citigroup strategist, told the Reuters 2011 Investment Outlook Summit in New York.

"I think we are in a correction," said the Canadian-born strategist, whose year-end forecast for the benchmark S&P 500 index is 1,400 points.

A 10 percent drop from the May 2nd intraday peak of 1,370.58 would put the S&P 500 at 1,233.52.

Defensive stocks in the healthcare and utility sectors added to gains after Bernanke's comments, but financials and

info technology, sectors closely related to growth, turned negative. The KBW bank index .BKX which rose 1 percent earlier, ended down 0.2 percent.

Volume was thin with 6.67 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.61 billion.

"The problem for institutions on a day like today is the volume being light. Any concerted effort to raise funds (sell positions) could have a disproportionate impact on pricing as buyers will be on the thin side," wrote Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey, in a note to clients.

In company news, International Paper Co (IP.N) launched a $3.3 billion unsolicited offer for rival Temple-Inland Inc (TIN.N). Shares of Temple-Inland shot up 40.4 percent to $29.49, while IP's stock rose 0.4 percent to $29.78. Temple-Inland said it adopted a stockholder rights plan to fend off the hostile takeover.

Advancing stocks outnumbered declining ones on the NYSE by 1,684 to 1,297, while on the Nasdaq, advancers beat decliners by 1,440 to 1,131.

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Wall Street slips for a sixth day on growth concerns

Stocks extended losses for the sixth straight day on Wednesday as investors worried that a slowing economy could deepen the market's retreat.

The latest evidence of a slowdown came in the Federal Reserve's Beige Book, which gives an anecdotal report on the economy. It reinforced Fed chief Ben Bernanke's bearish assessment on growth delivered late on Tuesday.

The market's mood soured when Bernanke gave no hint that the central bank would offer a third round of stimulus to an economy losing steam. The Beige Book said costlier food and energy prices as well as supply disruptions stemming from Japan's earthquake were taking a toll.

Stocks are still up for the year, but the market's recent slide has taken a big bite out of those gains.

The Dow, which on May 2nd was up 10.6 percent for the year when it hit its 2011 closing high, is now up just 4.1 percent.

The S&P 500, which had climbed as much as 8.2 percent for the year at its 2011 closing high on May 2nd, is now up just 1.7 percent. And the Nasdaq, which on May 2nd was up 8 percent for the year when it set its 2011 closing high, is now up only 0.9 percent.

Stocks have come under pressure recently due to a slew of weak economic data, especially in the labor market.

"Investors are re-pricing the slowdown after Bernanke crystallized it," said Jason L. Ware, senior equity research and trading analyst at Albion Financial Group in Salt Lake City, Utah.

On top of that, "the market was hoping for an indication that there may be another round of stimulus but clearly, that's not what they got."

The Fed's $600 billion second round of stimulus, expected to end this month, has been a catalyst for the stock market's advance.

Many of the day's biggest decliners were U.S.-traded Chinese companies after Interactive Brokers Group banned clients from borrowing money to buy some Chinese stocks.

New York-listed shares of Renren Inc fell 13.6 percent to $10.51 and Baidu lost 3.3 percent to $120.67.

Mortgage insurers' shares also fell after MGIC Investment Corp reported disappointing monthly operating statistics.

Shares of MGIC Investment, the biggest mortgage insurer to Fannie Mae and Freddie Mac, fell 20.2 percent to $5.80.

The Dow Jones industrial average dropped 21.87 points, or 0.18 percent, to 12,048.94. The Standard & Poor's 500 Index lost 5.38 points, or 0.42 percent, to 1,279.56. The Nasdaq Composite Index fell 26.18 points, or 0.97 percent, to 2,675.38.

"I think 1,250 is a key level (on the S&P) and, if we get there, likely to provide support for the market, barring any further erosion in the underlying economic data," Ware said.

SHARPER SLIDE FORECAST

Credit Suisse's U.S. equity strategist Doug Cliggott said on Wednesday the S&P 500 could fall roughly 10 percent from its current level, partly due to the approaching end of the Federal Reserve's bond-buying program.

"We would think an index between 1,170 and 1,200 would be a realistic estimate of where we might be headed," Cliggott said at the Reuters Investment Outlook Summit in New York.

His comments followed a bearish tone struck on Tuesday by Citigroup strategist Tobias Levkovich. He said major U.S. stock indexes could fall as much as 10 percent from their May highs. A 10 percent fall is typically described as a market correction.

There were also signs of weakness from corporate America. Communications networking equipment provider Ciena Corp forecast third-quarter revenue below expectations, driving down its stock and others in the sector.

Ciena tumbled 16.2 percent to $20.29, while JDS Uniphase Corp dropped 5.5 percent to $17.40.

Limiting losses, the energy sector rose after talks at the oil cartel OPEC in Vienna broke down without an agreement on a production hike. The S&P 500 energy index rose 0.4 percent, with Exxon Mobil up 1 percent at $80.76.

U.S. crude oil futures rose nearly 2 percent to settle above $100 a barrel.

About 7.45 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 7.6 billion.

Declining stocks outnumbered advancing ones on the NYSE by 2,217 to 784, while on the Nasdaq, decliners beat advancers by 1,920 to 679.

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Toyota forecasts 35 pct profit slide after quake

Toyota Motor Corp forecast a larger-than-expected 35 percent fall in annual profit on Friday and warned the strong yen was making it difficult to justify keeping production in Japan.

The world's largest automaker has struggled to restore output after a massive 9.0 earthquake in March rocked northeastern Japan and forced Toyota and other Japanese automakers to slash output at home and abroad. The ensuing nuclear disaster and power shortages have compounded their woes.

"This is probably another conservative estimate from Toyota, but it's predicting a loss in the fiscal first half so we can tell how serious the damage from the earthquake was," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, adding that shares in the company may fall on Monday.

Toyota said it was looking to ramp up output overseas to claw back lost market share and reiterated its plan to restore output to pre-quake levels by November, helped by a recovery in the supply chain for key parts.

"Once our product supply is back to normal, we can compete with no problem. We have the resources and are fully charged," Toyota's executive vice president, Satoshi Ozawa, said at a briefing in Tokyo.

But Ozawa warned that Toyota was getting hammered by the yen and called on the Japanese government to take action to stem its rise.

The Japanese currency hit a one-month high against the dollar this week and is now about 5 yen stronger than the 85 level it sees as the break even profit for profiting on production in Japan.

Toyota said it expects operating profit to fall 35 percent to 300 billion yen ($3.7 billion) in the financial year to March 2012, well short of the consensus for a 434 billion yen profit in a poll of 23 forecasts by Thomson Reuters I/B/E/S.

The forecast, which the company would have announced in May along with its annual results if not for the earthquake, incorporates a 100 billion yen negative impact from the yen.

"Structural weakness remains for Toyota, as it has a higher portion of domestic production than Honda and Nissan, which makes it vulnerable to the yen's strength," said Park Sang-Won an analyst at Eugene Investment & Securities in Seoul.

Toyota forecast global sales will fall 1 percent to 7.24 million vehicles in the year to March. The figures include sales at truck maker Hino Motors Ltd. and compact car maker Daihatsu Motor Co.

The drop is expected to place Toyota behind General Motors Co and possibly Volkswagen AG in the global vehicle sales rankings this year. Toyota downplayed the possibility.

"We don't see it as necessary to be the largest automaker in the world," Ozawa said. "The most important thing is creating a stable business base."

Toyota said on Friday it expects the dollar to average 82 yen in the current financial year to next March 31, against an averaged currency rate of a 86 yen-per-dollar last year.

Toyota's president, Akio Toyoda, repeatedly said he was committed to keeping production in Japan and protecting jobs.

Ozawa said it was possible that Toyoda was rethinking his position due to the strength of the yen.

"We are in a situation where it its becoming impossible for Japan's manufacturing industry to do businesses," Ozawa said.

"Our president has been saying that he would never want to see Japan's manufacturing fading from view, but he also said recently that he was unable to respond when someone made the comment that Toyota's production should not be handled only in Japan."

Toyota's shares have fallen 7.5 percent since the disaster, underperforming the benchmark Nikkei 225 average, which has lost 6.5 percent. Its shares on Friday rose 0.9 percent to close at 3,300 yen before the company released the profit forecast.

($1 = 80.305 Japanese Yen)

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Euro eases against dollar

TOKYO (AFP) – The euro eased against the dollar amid lingering concerns over the European debt crisis, a reversal after weak US economic indicators sent the greenback lower late last week, dealers said.

The euro fetched $1.4298 in Tokyo morning trade, down from $1.4317 in New York late Friday. The single European currency inched down to 115.58 yen from 115.61 yen. The dollar rose to 80.81 yen from 80.77 yen.

"Investors moved to reap profits following the euro's rise against the dollar late last week," said Dai Sato, dealer at Mizuho Corporate Bank.

"The dollar was sold after weak US economic indicators gave rise to a view that the Federal Reserve may delay steps to bring its monetary policy back to normal from the current ultra-expansionary phase," he said.

Sato added that market activities are expected to remain subdued as New York and London markets will be closed Monday for holidays.

The dollar began falling on Thursday after a report showed US jobless claims rose after two weeks of declines.

Washington also left unrevised its estimate of first-quarter economic growth at a tepid 1.8 percent. Most analysts had expected a rise to 2.0 percent.

The US Federal Reserve has kept rates at zero since December 2008 to boost an economic recovery while the European Central Bank hiked its rates by a quarter point in April and is expected to do so again soon.

Meanwhile, Greece's sovereign debt problem continued to overshadow the single European currency, dealers said.

Greek Finance Minister George Papaconstantinou said Sunday he was confident about receiving the next aid installment, rejecting a German magazine article that cast doubt over the transfer.

The head of the eurozone finance ministers, Jean-Claude Juncker, warned last week that the International Monetary Fund may block the next installment, the fifth tranche in a 110-billion-euro loan package agreed for Greece.

Der Spiegel magazine of Germany reported Sunday that the European Union will follow suit unless Athens does more to fix its public finances.

"It will be news on the EU periphery debt situation that will draw the bulk of the attention," RBC strategists told Dow Jones Newswires.

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Still $100 billion to go for TARP

NEW YORK (CNNMoney) -- It's been a pretty good week for the Treasury Department's bailout program.

Chrysler repaid a $5.9 billion high-interest loan, and Treasury is lowering its ownership stake in bailed-out insurer AIG through a stock sale that will bring in $8.7 billion.

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But the 2008 TARP program is far from a wrap: Taxpayers are still on the hook for $102 billion in loans.

Congress authorized $700 billion for the Troubled Asset Relief Program, but Treasury only paid out $411 billion. Of that amount, including the payments from Chrysler and AIG expected this week, $309 billion has been returned.

TARP loans were initially used to stabilize credit markets during the height of the financial crisis, and later to bail out automakers and jump start mortgage modification programs.

A couple years ago, it was anybody's guess whether these loans would be repaid. Now, various parts of the program are starting to pay dividends. Others, not so much.

Banks, many of which were on the brink of collapse in 2008, got $245 billion in the bailout bonanza. Not every bank has paid back those loans, and in fact, there is still $23 billion outstanding.

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Foreign investors and PEs may not be able to exit easily

MUMBAI: Many foreign investors and private equity funds putting money in Indian firms will soon discover that pulling out of the country can be a lot tougher than they imagined.

For years, offshore financial and strategic investors have struck deals with their Indian partners to put in place an easy exit arrangement. It gave the overseas investor the right to sell back his equity shares to the promoter of the Indian company where he had invested.

The understanding between the two partners helped closely-held Indian firms attract overseas financial and strategic investors who, in turn, derived comfort from the arrangement. But now, there are clear indications that the Reserve Bank of India will soon shut the exit door.

The central bank, which often has the last word on cross-border fund flows, has recently disapproved the sellback transaction by a foreign investor, said a banker familiar with the case. "The decision can have far-reaching implications. Eight out of 10 private equity deals have such underlying agreements," said Anup Shah, partner at Mumbai-based chartered accountancy firm Pravin P Shah & Co.

Till now, the RBI has been objecting to such deals, particularly by real estate firms, where securities issued by Indian firms (to foreign investors) are debt or quasi debt in nature, such as convertible debentures, optionally convertible bonds, compulsorily convertible papers and preference shares.

"But this is the first time it has objected to sell-back transactions in a plain equity deal. It's an extreme view," said the banker. Legally, a right to sell back securities is executed by giving the foreign investor a put option that he can exercise to sell the shares back to the Indian promoter.

Foreign investors exercised such a right when the local company failed to perform or came out with an initial public offering. Objecting to the put option arrangement, the RBI argued that a put option to the offshore investor meant the money obtained by the local company is not foreign equity but foreign debt, which is governed by stringent rules, particularly in sectors like property.

But the argument was never used against plain equity investment backed by put options. The recent case where the RBI has expressed reservations relates to a put option against a foreign direct investment in the equity of a logistics company which has missed the listing deadline.

"The law of the land allows such options to be used. In fact, there is a 30-year-old government circular which permits such options in joint venture agreements and collaborations between a resident entity and a non-resident investor," said H Jayesh, founder-partner of law firm JurisCorp.

According to investment bankers and legal experts, most foreign direct investments, particularly in unlisted firms, are against special rights given to foreign investors who can exercise such rights under certain conditions. For instance, foreign partners in many Indian insurance companies have a right to raise their stake as and when the government allows a higher foreign ownership in the sector at a pre-agreed pricing formula.

"So long as the shares are sold in accordance with the pricing guidelines of the Foreign Exchange Management Act (FEMA), the regulator should not have any problem," said Shah. The FEMA rules require shares to be sold above a floor price to a foreign investor.

"Some have supported the RBI view in case of convertible debentures. Here, a put option allows the foreign investor to exit before the conversion of the debentures into equity. But in case of pure equity investment, it is difficult to figure out why they should object," he said.

Bankers feel the RBI is often uncomfortable with the language ofthe option agreements that uses terms like the minimum internal rate of return (IRR) that the company has to generate, failing which the put will be exercised.

"It talks about yield and IRR, and the RBI, ever uncomfortable with leveraged money flowing in, reaches a conclusion that the money is loan not equity... But there is also another side to it. Often the local partner, unwilling to pay up, highlights these points in his proposal to the RBI, hoping to wriggle out of the payment commitment. Such cases inevitably end up in arbitration or disputes," said an investment banker.

There is also a growing perception that financial market regulators may be veering around to a common view on put/call option on Indian shares. The Securities and Exchange Board of India , the capital market watchdog, had opposed the agreements on put/call options between Cairn and Vedanta in the $9.6-billion deal where Cairn agreed to sell a majority stake in Cairn India to Vedanta. A few days ago, Sebi circulated a guidance note that opposed such put/call arrangements against Indian shares between two non-resident entities.

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MGM China raises $1.5bn in Hong Kong share flotation

MGM China has raised $1.5bn (£912m) through a share flotation in Hong Kong, as investors look to grab a slice of Macau's gambling boom.

The company priced its stock at HK$15.34 per share, the top end of its expected range.

Gambling revenues in Macau have been rising turning it into the world's biggest gambling market.

MGM China is one of the only six companies that have a licence to operate casinos in Macau.

The company is a joint venture between MGM Resorts International, which owns some of the biggest casinos in the US and Pansy Ho, the daughter of casino mogul Stanley Ho, the largest casino operator in Macau.

Rising profile

The biggest beneficiary of the share sale is expected to be Ms Ho.

According to the previous arrangement, MGM and Ms Ho owned an equal 50% stake in the company.

However, according to an agreement between the two in April, Ms Ho will sell 21% of her stock, hence pocketing most of the cash from the sale.

According to some estimates, this may see her net worth swell to as much as $5bn, propelling her over her father, Stanley Ho, who's fortune is estimated to be around $3bn.

MGM's stake in the company will increase to 51% after the share sale.

More on This Story

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That's $16 million, NOT $16 billion: Possible trader goof may have sparked 1,000-point Dow swing Read more: http://www.nydailynews.com/money/2010/05/

The difference between a B and an M may have caused Thursday's heart-stopping Dow plunge of nearly 1,000 points.

A trader may have accidentally entered $16 billion - instead of $16 million - in a deal involving Procter and Gamble, sparking the massive selloff, according to multiple reports.

"I heard it was a trading error at a big firm," trader Charlie Flood said outside the New York Stock Exchange after the market closed. "Somebody hit a wrong button."

The stock market rebounded from its 998-point nosedive - its biggest point drop ever - to close down 347.80 points, a 3.2% decline, at 10,520.32.

"It was panic," Flood said. "We haven't seen this in a long time."

"It became a frenzy," said Brad Pine, a Manhattan investment adviser.

As fears over Greece's debt crisis spread global economic jitters, Procter & Gamble's share price suddenly - and inexplicably - plummeted nearly 37% to $39.37.

The drop ignited sell orders across the market.

By the close, P&G was off just 2.2%.

Reps from the major U.S. stock exchanges and the Securities and Exchange Commission held an emergency conference call last night to look into potentially mistaken trades involving a number of stocks.

Nasdaq announced it will cancel all trades of stocks at prices that were 60% above or below the last price at 2:40 p.m., or immediately prior.

The crash began just after 2:30 p.m. The Dow went from being down 400 to down 800 in just minutes, eventually slipping below 10,000 to 9,869.

The bottom falling out felt like "what happened in 1987," said investment adviser David Honigstock, referring to the worst day in modern history for the Dow - Oct. 19, 1987, when stocks plunged 22.6%.

"You look at your screen and you see the market in a complete free fall," he said.

By 3:09 p.m., the market had regained 700 points.

Beyond the apparent computer glitch, the troubles in Greece added to the panic selling, with TV stations showing scenes of rioting protesters angry over government austerity measures.

"There was a fundamental concern about the entire European continent," said Peter Boockvar, a strategist at Miller Tabak. "The world is a much more dangerous place right now."

Traders warned of more stomach-churning days ahead as the crisis in Greece continues.

"Until we resolve the situation, volatility is here to stay," said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research.

Read more: http://www.nydailynews.com/money/2010/05/07/2010-05-07_thats_16_million_not_16_billion_possible_trader_goof_may_have_sparked_1000point_.html#ixzz0nK7Uzfyg

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Goldman charges puts Wall Street confidence on the line?

April 22, 2010

America's biggest banks are rolling in dough again. The U.S. President is going straight to Wall Street to pitch tough financial reforms to avoid future financial meltdowns. The regulatory body, the S.E.C., is pursuing civil fraud charges against Goldman Sachs. And some people are crying conspiracy. In a rare statement, the head of the S.E.C. said the watchdog does not "coordinate" its "enforcement actions with the White House, Congress or political committees," re-asserting its independence in the face of criticism."

Extraordinary times continue in the financial world. But what on earth is going on? If you believe one analyst we featured on World Business Today, this moment in the global financial crisis may be an important one. Richard Bove, Financial Analyst for Rochdale Securities, fears this could be the start of a pursuit of major financial institutions that could erode confidence in the U.S. financial system.

Bove calls the reaction to the banking crisis in 2008 "hysteria" and says the Goldman transactions may be complex, possibly unsavory, but they are not fraudulent.

"On one side you have a sophisticated investor who wants to short a bunch of mortgages. On the other side, you have two sophisticated investors who've gone through all these mortgages and decided which ones they want to keep, and which ones they don't want to keep. And they made the decision to buy them. The government is not suing the guy who wants to short, or the guy who bought the mortgages. The government is going after the middleman. What's the logic in that?"

Media reports are questioning the strength of the SEC's case. The agency says it has appropriate evidence that will be presented in court, at the appropriate time.

We should not be pre-trying this case in the media. But the questions the case raises are important ones and the voices on it, divergent.

Did somebody hear Richard Bove defend Goldman Sachs as good for society? Yes, you did. And that derivatives, the exotic instruments everyone is so upset about here, are good for the economy because they help drive down risk? Yes, you did.

It's a tough case to make in this climate, but Bove says Goldman should be defending itself as a business that does "societal good," because it "lowers taxes, and adds jobs and business opportunities." However, because of the financial crisis and these charges it is viewed simply as a bunch of greedy bankers who do fraudulent things.

"The U.S. has to raise 1.3 trillion dollars this year to cover the deficit. It has to roll over 3 trillion dollars in existing debt. Who is going to do that? Are we going to have a bunch of small community banks to set up desks in front of their branches and sell savings bonds at 25 dollars a pop? Or do we need a very sophisticated company that can access capital markets all over the globe to raise that money? And if it doesn't raise that money what happens to taxes in the U.S. Somebody has to make that money."

Of course, the courts will decide whether Goldman did anything fraudulent.

Bove is firmly in the camp of those who believe the government's case is weak, but he's quick to add: "I would never defend Goldman Sachs. I would not defend their ethics. I just think in this particular instance they were not guilty of any crime."

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Greece crisis deepens on global market sell-off

By Kevin Voigt, CNN

April 28, 2010 -- Updated 1513 GMT (2313 HKT)

(CNN) -- The eurozone faces its toughest crisis to date as the credit downgrade in Greece spooked global investors and raised the specter that the debt crisis may spiral to other European economies.

Markets from London to New York and Tokyo all tumbled in the immediate wake of Standard & Poor's downgrade of Greece's debt to junk status on Tuesday; the FTSE 100 dropped 2.6 percent before recouping losses.

The Dow Jones Industrial Average fell 213 points to below 11,000 in early trading Tuesday before rallying into positive territory.

Japan's Nikkei closed down 2.57 percent and Hong Kong's Hang Seng index ended the day down 1.47 percent. Markets in Shanghai and Australia were also in negative territory.

European markets followed Asian indexes into the red Wednesday. London's FTSE-100 fell but pulled back into positive territory, but Frankfurt's DAX, and the Paris CAC 40 were all down and Spain's IBEX fell by more than 1 percent.

Greek officials Wednesday morning banned the practice of short selling on the Athens stock exchange as a way to keep speculators from hurting Greek shares even more. The ban will last for two months, until June 28, the Hellenic Capital Market Commission said.

The junk downgrade of Greece's sovereign debt came as a planned bailout by European nations and the International Monetary Fund faced increasing opposition in Germany -- the largest economy of the 16 nations united under the euro currency -- and increased rancor in Greece regarding planned austerity measures to reduce the nation's debt, which stands now at 13.6 percent of the nation's gross domestic product.

Q&A: What does Greece's debt rating downgrade mean

The euro dropped to its lowest level in nearly a year in Wednesday trading in Asia, where it fell to as low as $1.31.

The junk rating now makes it much more difficult and expensive for Greece to try to raise money and debt in world markets. Standard & Poor 's also reduced the debt credit rating of Portugal, heightening fears of a "Greek contagion" that could spread to other European nations.

Greek austerity measures prompt strike

"It's like a domino effect," David Buick of BGC Partners in London told CNN. The downgrade increases the likelihood of a double-dip recession "which we all hope to avoid," he added.

"This is a dangerous process," he said. "All the speculators out there -- they're like rats up a drain pipe -- will make those cracks (in the Eurozone economies) into crevices."

After the credit downgrade, the IMF is considering raising its share of planned assistance to Greece by $10 billion for a total of more than $73 billion. But some analysts say Greece will need even more time and cash to avoid defaulting on its debt payments.

German Chancellor Angela Merkel said Wednesday that Germany would do what it can to help Greece out of the financial "but also Greece has to do its part."

"Obviously what Greece has to do is a difficult thing, but I think they are committed to doing it," the head of the International Monetary Fund, Dominique Strauss-Kahn, said in an appearance with the German leader.

More cash for Greece?

Defaulting on its debt payments is not an option Greece wants to consider if it is to remain among the eurozone economies, former Greece Economics Minister Yiannos Papantoniou told CNN. It also raises the chance strong economies like Germany may walk away from the euro as its currency.

Fact Box

"Junk" rating explained

* Standard & Poor's is among a handful of credit rating agencies who gauge the ability of the issuer to repay debt

* Top rating is AAA

* Anything less than a BBB rating is considered "speculative," or in the parlance of the markets: junk

* Greece sovereign debt is now rated BB+, the same as Azerbaijan, Egypt and Panama

Default and restructuring the debt "is the way out of the euro ... [and] will inflIct lasting damage to Greece because Greece will get a bad name and stigma in the markets for years to come as Argentina has done," Papantoniou said. "Moreover, I'm sure that if Greece is forced to restructure its debt, Germany will come and say, 'Unfortunately gentlemen we can't be part of the same monetary union because your paper is undervalued and ours is strong.'"

Papantoniou was optimistic a bailout would come before Greece defaulted on its debt payment. "This will definitely give some breathing space -- but the problem doesn't end there," he said. "Next year in 2011 Greece will have to go back to the markets and be able to borrow at reasonable rates."

Analysts said it was likely Greece would also need more time to reduce its debt levels. "Anyone who thinks they can take that rickety economy ... and pull it around in one year, they're on a different planet," Buik said.

The pace of the Greece bailout negotiations, which started in January, has exasperated some market watchers.

"I think we're already in pretty disastrous territory even before these latest problems arose," said Vanessa Rossi, a senior research fellow at Chatham House. "Having taken ... several months to even get to the point which Greece is asking for a bailout and assistance -- and now we're not even sure if they're going to get it and under what terms --is a real disaster in and of itself."

Kirby Daley, senior strategist for Newedge Group, believes the negotiations between the IMF and Germany are slow because the Greece bailout may turn into a blueprint for future bailouts of eurozone nations. "Greece is setting the standard ... whatever they do there, then they may face the same funding levels for Portugal, Spain and Italy."

Moreover, the risks placed on the credit worthiness of Greek debt may risk investor appetite in sovereign debt of nations like the UK, the United States and Japan, Daley said.

"We've been hearing about these issues for years about our kids paying for our debts ... but now it's not our kids, it's us," Daley said.

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Coney Island Getting a $30 Million Italian Makeover

Workers in Altavilla Vicentina, Italy, prepare a ride that will become a new attraction at Coney Island in New York City. More Photos »

By ELISABETTA POVOLEDO

Published: April 23, 2010

ALTAVILLA VICENTINA, Italy — Alberto Zamperla sweeps through the cavernous workshop here where his amusement rides are manufactured while workers measure and bang and solder enormous platforms, oddly shaped beams and assorted fiberglass vehicles.

Spring is a busy time for his company, and attractions are being prepared for the summer season that is about to open in theme parks around the world.

This year, however, one destination has Mr. Zamperla racing against the clock: Coney Island in Brooklyn, where in just a few weeks he will present a new amusement park featuring 22 rides, including the Tickler, a family-oriented roller coaster; the whirly Mega Disko; and Air Race, a heart-gulping aerobatic experience.

Coney Island is the largest investment yet in the 50-year history of the Zamperla Group. Zamperla is the majority shareholder of Central Amusement International, the New Jersey-based company that signed an agreement in February with New York City to build and manage the amusement area. So far, Central Amusement has spent $15 million on the refurbishment of the park, about half of the $30 million it expects to invest.

“Ride manufacturers have been operating rides in parks or fairgrounds for many years,” said Andreas Veilstrup Andersen, executive director of the European office of the International Association of Amusement Parks and Attractions. “However, a project as big as Coney Island is very unusual.”

Time has been tight, with the park’s opening set for the end of May.

“We had a pretty good idea of what we could produce on time,” said Mr. Zamperla, who is chief executive and president. “There’s a lot of pressure, because all eyes are on us. Things just can’t be good, they have to be perfect.”

Luigi De Vita, managing director of the company, added: “When we’re under pressure, we give the best of ourselves.”

Theme parks and amusement parks have a global lure, with about 758 million visitors worldwide in 2007, according to the latest study from PricewaterhouseCoopers on the outlook for entertainment and media. Worldwide revenue in 2007 was $24 billion, the study said.

The Zamperla Group, according to industry experts, is ranked among the top five manufacturers of amusement park rides.

The Coney Island project will be called Luna Park, after the original playground that stood there until World War II. Drawings for the new main gate on Surf Avenue mimic the original design, but flashier.

The park at Coney Island “had its glory but lacked an innovative spirit,” Mr. Zamperla said of a site that in recent decades had become seedy.

In February, Central Amusement won the bid on a 10-year lease to build and operate the park, which sits on a city-owned lot.

“Their specific proposal was a nice blend of honoring the history of Coney Island while developing it as a modern 21st-century amusement park,” said Seth W. Pinsky, president of the New York City Economic Development Corporation.

The Zamperla Group was chosen because it had a sound track record in operating amusement parks, including the Victorian Gardens, a children’s amusement area at Wollman Rink in Central Park in Manhattan. And it was known as the producer of “some of the most exciting rides in the world,” Mr. Pinsky said.

The Zamperla family has been building amusement park attractions in Altavilla Vicentina since the early 1960s. Alberto’s grandfather, Umberto Zamperla, opened one of the first movie houses in Italy, then moved into carnival attractions. His father, Antonio Zamperla, worked in traveling shows before deciding to settle in this Veneto town to start inventing and manufacturing rides.

Alberto Zamperla, 58, the eldest of five children, took the show on the road, so to speak, and there are now factories or sales offices in several countries, including the United States, China and Russia. His group sells to customers in more than 90 countries and now exports about 95 percent of its products.

There are about 185 employees in Italy, with an additional 270 around the world.

The nuts and bolts of the business — its administration as well as its main manufacturing activities — are at the headquarters near Vicenza, an industrial district that is the third-largest exporting center in Italy, according to the local chamber of commerce.

A stroll though the headquarters at Altavilla Vicentina hints at the complexity of producing amusement park rides for the world’s theme parks, including various Disney Parks (“In our business, it’s the best reference you can have,” Mr. Zamperla said), Six Flags theme parks and malls worldwide. Even the late Michael Jackson’s Neverland Ranch has Zamperla rides.

On average, the company spends about one million euros ($1.3 million) a year designing new products, using complicated computer algorithms and mathematical models. The attractions are then built and tested here. Zamperla has dozens of patents on items like merry-go-round decorations and roller-coaster seats.

“This is where ideas are born,” Mr. Zamperla beamed as he looked at the MotoCoaster, a ride being prepared for a dinosaur theme park in Changzhou, China. Each ride requires about a year from design to delivery, he said, and can cost anywhere from 20,000 euros to 6 million euros. The MotoCoaster sells for 3.5 million euros and will be one of the attractions at Coney Island next year.

Demand is growing in new markets, especially in the Middle and Far East. The Zamperla Group has a factory and sales offices in Suzhou, China, to serve the fast-growing Chinese market. “We’re not going to make the mistake of underestimating the Chinese,” he said.

The factory in China produces about four million euros worth of rides for the Chinese market. He exports about the same amount from Italy to China and hopes to reach 20 million euros in sales in two years.

In well-established markets like the United States, long-term success in the amusement ride industry depends on novelty, Mr. Andersen said.

This year, for example, Air Race, an airborne experience that the company describes as “the ultimate thrill ride” will have its debut at Coney Island, alongside more placid family fare. Next year, rides are expected in the Scream Zone, an addition to the park that will feature several Zamperla roller coasters intended mostly for teenagers.

“In the end, all we want to do is build rides that people will enjoy,” Mr. Zamperla said. And Coney Island, he said, “will be the perfect showcase.”

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G-20 Split on the Need for a Global Tax on Banks

Treasury chief Timothy Geithner between Dominique Strauss-Kahn of the I.M.F. and Christine Lagarde, French finance minister.

By SEWELL CHAN

Published: April 23, 2010

WASHINGTON — Proposals to establish a global tax on banks and charge them for the cost of government bailouts divided representatives of the Group of 20 countries during a summit meeting here on Friday.

The perilous fiscal condition of Greece and other countries in Europe, and the need for the world’s big economies to coordinate changes in financial regulation, were the other major topics in the daylong meetings of Group of 20 finance ministers and central bank governors.

“The global recovery has progressed better than previously anticipated, largely due to the G-20’s unprecedented and concerted policy effort,” the officials said in a joint communiqué.

The International Monetary Fund endorsed a proposal this week that would establish a tax on bank profits and on salaries paid to bank executives. Canada, whose banking system withstood the crisis, has led the opposition to the idea, while the Obama administration, which has called for a $90 billion levy to be collected over 10 years from banks that received bailout money, tried to marshal support for it.

“There was not agreement on a global bank tax,” Jim Flaherty, the Canadian finance minister, said at a news conference after the meetings. “Some countries are in favor of that. Some countries quite clearly are not. It depends whether a country has had to use taxpayers’ dollars to bail out banks, for the most part.”

Treasury Secretary Timothy F. Geithner defended the idea. “We’re trying to establish the basic principle that where governments are exposed to risk in putting out financial fires like this, that taxpayers don’t bear the costs of paying for those actions,” he said, adding, “That is a simple, fair, basic imperative.”

Mr. Geithner said there was “significant support” for the bank tax, but allowed that he understood a “certain lack of enthusiasm” from Canada.

He added, “We’re going to do what’s necessary for the U.S., what’s in our interest, and I think the world’s going to want to watch what we do. And I suspect that’ll provide a basis for other actions across some of the other economies.”

The cautiously worded joint communiqué acknowledged, but sidestepped, the bank tax proposals. It called for further I.M.F. study “on options to ensure domestic financial institutions bear the burden of any extraordinary government interventions where they occur, address their excessive risk-taking and help promote a level playing field, taking into consideration individual countries’ circumstances.”

John Lipsky, the deputy managing director of the I.M.F., said on Friday that the bank tax, if calculated based on the risk banks posed to the financial system, “could help to discourage financial institutions from taking on excessive risk.” Such a fee would also “address the public policy concern that financial institutions are able to privatize gains but socialize costs arising in the financial sector,” he said.

Mr. Lipsky’s boss, Dominique Strauss-Kahn, the top I.M.F. official, caused rumblings on Friday when he suggested that some countries were moving too quickly on reform. He said the Obama administration’s plan “comes too soon” given the need to coordinate responses across countries.

“I read that and I thought, really?” Mr. Geithner said in response. “My sense is that it’s been 15 months — or more than a year — since we started this process in the United States. We’re not moving with excessive haste.”

Mr. Geithner acknowledged that one of the biggest reform elements — forcing banks to hold more capital as a buffer against economic disruptions — was partly beyond the scope of the legislation being debated by Congress. The Basel Committee on Banking Supervision, a global regulatory body, is coordinating discussions around capital requirements in the hope of announcing new standards by the end of this year.

“The core issue there is the quality and quantity of capital and setting standards for that, and also an appropriate cap on leverage,” said Mr. Flaherty. “We agreed that that’s a key element.”

The Group of 20 officials offered few details on the Greek debt crisis, except to support the aid plans of the European Union and the I.M.F. Mr. Flaherty said of the Greeks: “They have undermined the confidence of the markets and it is essential that some steps be taken, that the Greek government work with the I.M.F., and the European Commission of course, to identify a credible, multiyear economic and fiscal program.”

Although India and Brazil this week joined calls by the United States for China to allow the value of its currency, the renminbi, to appreciate, the Group of 20 officials said the topic did not come up in their meetings.

Yoon Jeung-Hyun, the South Korean finance minister who coordinated the meetings, said “there were no specific discussions” of either the renminbi, also known as the yuan, or the euro, which has recently fallen in value.

Even as problems in Europe preoccupied the leaders, officials reported positive developments in some poorer parts of the world.

The I.M.F. projected on Friday that economic output in sub-Saharan Africa would expand by 4.75 percent this year and 5.75 percent next year, up from 2 percent last year.

“The economic slowdown in sub-Saharan Africa looks set to be mercifully brief,” said Antoinette Monsio Sayeh, director of the fund’s African department, adding that “the slowdown has nonetheless entailed considerable social dislocation and suffering.”

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F.D.A. Steps Up Oversight of Infusion Pumps

Federal regulators say they are moving to tighten their oversight of medical devices, including one of the most ubiquitous and problematic pieces of medical equipment — automated pumps that intravenously deliver drugs, food and other solutions to patients.

On Friday, the Food and Drug Administration issued preliminary guidelines that will require producers of the devices, known as infusion pumps, to supply the agency with more test data on them before they can be approved for sale.

Over the last five years, the agency says it has received reports of 710 patient deaths linked to problems with the devices, though F.D.A. officials say they think the number may be significantly higher. Some of those deaths involved patients who suffered drug overdoses accidentally, either because a hospital worker entered incorrect dosage data into a pump or because the device’s software malfunctioned.

An estimated two million infusion pumps are used in hospital and clinical settings and hundreds of thousands more are used by patients in their homes. The pumps use a variety of designs to intravenously deliver food, fluids and drugs like pain medications, insulin and cancer treatments.

The pump-related initiative comes as the Obama administration tries to reinvigorate the F.D.A. after years of criticism by lawmakers and others that it was a rubber stamp for industry. The F.D.A. Center for Devices and Radiological Health, which oversees scores of critical products like heart implants, imaging equipment and infusion pumps, has come under particular scrutiny.

A few years ago, for example, several top scientists at the center contended in letters to lawmakers that their superiors had ignored both their recommendations and policy guidelines in approving the sale of devices. Along with reports of 710 deaths, the center also received more than 10,000 complaints annually about infusion pumps from 2005 to 2009. In that same time frame, manufacturers of infusion pumps issued 79 recalls, among the highest for any medical device.

The center’s new director, Dr. Jeffrey E. Shuren, who has headed the center since August, said in an interview this week that pump manufacturers would soon be required to provide more data about their devices before offering them for sale. He added that the agency had determined that pumps could be made far safer.

He also said that the categorywide approach that the agency was taking toward infusion pumps might soon be extended to other types of medical devices, though he declined to elaborate.

“We need to ratchet up the expectations for medical device manufacturers,” Dr. Shuren said.

The biggest makers of infusion pumps include Baxter Healthcare of Deerfield, Ill.; Hospira of Lake Forest, Ill.; and CareFusion of San Diego.

Representatives of all three companies said the firms were reviewing of the agency’s initiative and could not comment on the specifics. However, they said their pumps were safe and that they looked forward to cooperating with regulators.

“We are committed to partnering with the agency to advance and complete the process for issuing new guidelines for the enhancement of the device review process,” Eric Floyd, Hospira’s vice president for global regulatory affairs, said in a statement.

Under the infusion pump proposal, which could be completed by the end of the year, producers would be required to provide additional data to support the procedures they used to determine the effectiveness and safety of their devices. In addition, companies would have to conduct limited clinical trials to ensure their pumps were not susceptible to misuse or had design elements that could create errors.

Pump producers now typically conduct “simulated” testing of its devices by users to identify bugs. Dr. Shuren indicated that the agency was seeking real-world testing as well.

Infusion pumps normally use software to automatically control both the rate and volume of a medication’s flow. To set a pump for an individual patient’s needs, a doctor, a nurse or other health care worker enters information by using the buttons on a pump’s keypad, which resembles that of a phone.

Pump manufacturers say that most problems occur when a nurse or health care worker enters the wrong data accidentally. F.D.A. officials said, however, that based on their review of pump complaints they thought many deaths and injuries related to the devices were less the result of user error than of product design and engineering.

For example, agency officials said that some pumps were prone to key bounce, a problem in which defective software interprets a single keystroke as two separate presses of that key. For example, instead of dispensing two units of a drug, a pump would dispense 22 units.

Under F.D.A. rules, life-sustaining devices like heart defibrillators must typically undergo clinical trials before they are approved for sale. But the agency clears the sale of many other critical devices like pumps without clinical testing based on a manufacturer’s claim that a new device is similar to a product already on the market.

Agency officials said Friday that they were sending a letter to all infusion pump makers to inform them of their findings and outline the proposed additional requirements companies were be required to meet.

Dr. Shuren said he expected that the new requirements would initially slow down the rate of the agency’s approval for new pumps that manufacturers are seeking to market.

The agency also said it had developed an open-source software code that manufacturers of pumps can use to test the validity of the software they use in their devices.

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