Best financial sourse

Microsoft Corp on Thursday filed five civil lawsuits in Seattle, Washington against alleged “malvertisers.”

Malvertising is the term used to describe harmful online advertising and works by camouflaging malicious code as harmless online advertisements, Microsoft’s associate general counsel Tim Cranton wrote in a blog.

“The lawsuits allege that individuals using the business names “Soft Solutions,” “Direct Ad,” “qiweroqw.com,” “ITmeter Inc” and “ote2008.info” used malvertisements to distribute malicious software or present deceptive websites that peddled scareware to unsuspecting Internet users,” he said guaranteed high risk personal loans.

Cranton added that names of specific individuals behind these activities were not known and the lawsuits were being filed to help uncover the people responsible.

(Reporting by Santosh Nadgir in Bangalore; Editing by Jon Loades-Carter)

Read more

U.S. producer prices rose more than twice as much as expected in August on the biggest surge in gasoline prices in more than 10 years and prices declined less than expected compared with a year ago, a government report showed on Tuesday.

The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate jumped 1 freecreditreport.7% last month and fell 4.3% from August 2008. Analysts expected producer prices to rise 0.8% on the month and to fall 5.3% on the year. 

Source

Stocks ended higher Monday as investors ultimately shook off the day’s jitters about China’s trade rift with the U.S. just ahead of the anniversary of the collapse of Lehman Brothers.

The Dow Jones industrial average (INDU) gained 21 points, or 0.2%. The S&P 500 (SPX) index gained 6 points, or 0.6%. The Nasdaq composite (COMP) gained 11 points, or 0.5%.

Stocks took a breather Friday after a five-session winning streak that left the major indexes at the highest levels in nearly a year. But after that selloff, investors were wary Monday. A choppy session ended with only slim gains.

Higher commodity prices have supported the most recent leg of the advance, boosting the underlying stocks. Gains in technology and financial shares added to the advance.

But oil services, tech and financial shares struggled Monday, limiting the market’s movement.

Tuesday brings the August retail sales report from the Commerce Department and, the Producer Price index (PPI), a measure of wholesale inflation, and the Empire State manufacturing index.

China: The U.S. and its largest trading partner are facing a growing rift, even as the countries continue to collaborate as part of a global effort to tackle the economic slowdown.

Late Friday, President Obama, responding to complaints from labor unions, said the U.S. would impose tariffs of up to 35% on tires from China.

On Sunday, China said it would begin the process of imposing tariffs on U.S. cars and chicken meat. On Monday, China asked the World Trade Organization to get involved.

The conflict precedes the Group of 20 meeting of leaders of the largest and fastest-growing economies in the U.S. next week.

Global markets tumbled, with major European and Asian markets ending lower.

The trade spat and slide in global markets gave a boost to the U.S. dollar, which has been sliding versus other major currencies lately.

President Obama: The president spoke Monday on Wall Street about financial services reform on the eve of the one-year anniversary of the collapse of Lehman Brothers.

Obama said that the economy is returning to normal, but that it will take time. He also said Wall Street must take steps to rebuild its relationship with the public and make sure that it doesn’t engage again in the kind of behavior that led to the crisis.

One-year later: Tuesday is the anniversary of the collapse of Lehman Brothers and buyout of Merrill Lynch by Bank of America, events that were seen as turning a recession into a full-blown crisis on a level not seen since the 1930s.

On that day, the Dow plunged 504 points as financial shares tumbled, credit seized up and investors panicked.

Stocks zigzagged through the week, but managed to end with just slim declines that Friday thanks to some government actions. They included the Fed jumping in to save AIG (AIG, Fortune 500) from bankruptcy and the establishment of an early version of the TARP bank bailout plan.

For a look at what the government has been doing over the last year to manage the crisis, click here.

Company news: Eli Lilly (LLY, Fortune 500) said its cutting around 5,500 jobs as part of a bigger plan to save $1 billion by 2011. Shares ended modestly higher.

Sprint (S, Fortune 500) shares rallied 11% on published reports that Deutsche Telekom, the owner of T-Mobile USA, is interesting in acquiring the U.S. based phone carrier.

Oil and gold: The stronger dollar dragged on dollar-traded commodities Monday, with oil and gold prices retreating.

U.S. light crude oil for October delivery fell 43 cents to settle at $68.86 a barrel on the New York Mercantile Exchange.

COMEX gold for December delivery fell $5.30 to settle at $1,001.10 an ounce, remaining above the key $1,000 level.

Bonds: Treasury prices fell, raising the yield on the benchmark 10-year note to 3.38% from 3.35% late Friday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners beat losers two to one on volume of 1.21 billion shares. On the Nasdaq, advancers beat decliners eight to five on volume of 2.19 billion shares. 

Source

Morgan Stanley Chief Executive John Mack is stepping down and will be replaced by James Gorman, one of the investment bank’s co-presidents.

Mack, 64, will remain as chairman of Morgan Stanley (MS, Fortune 500), whose management has drawn criticism from some quarters lately after a string of recent losses.

Mack had told the bank’s board that he planned to step down from the CEO post when he turned 65 in November, the bank said in a statement Thursday.

Gorman, 51, who runs Morgan Stanley’s brokerage and has been overseeing its expansion through a joint venture with Citigroup’s Smith Barney (C, Fortune 500) unit, has long been seen as a front runner for the top job at Morgan Stanley.

"Gorman has really earned his stripes," said Anton Schutz, president of Mendon Capital Advisors in Rochester, New York, which owns Morgan Stanley shares. "He did a great job at Merrill, he’s doing a good job at Morgan Stanley, and the timing for a change seems to be good, because we’ve made it through the worst of the crisis."

Prior to joining Morgan Stanley in 2006, Gorman had held a series of positions at Merrill Lynch & Co (MSPX), including leading its global private client business from 2001 to 2005.

Walid Chammah, another Morgan Stanley co-president who had also for a time been a candidate for the top job, was named chairman of Morgan Stanley International. 

Source

Arbitration in the brokerage industry is run by the Financial Industry Regulatory Authority, which regulates brokerage firms.

One investor who has been through securities arbitration said it wasn’t a consumer-friendly experience.

"It’s still overwhelming when you go through the process," said C.B. Lee, a banker from Sherman, Texas, who went to arbitration in 2007 over his claim that his stockbroker was churning his account.

Lee had more than $1 million in his brokerage account at one point and "was left with a fraction of that amount after the broker’s conduct," said Richard Lewins, Lee’s attorney in Dallas. Lee ultimately settled his claim.

Lewins, a former stockbroker, said everything about securities arbitration put investors at a disadvantage.

"The forum is run by the industry’s self-regulatory organization, FINRA," said Lewins.

"One-third of the people deciding your case come from the industry you are bringing your claim against, and the remaining two-thirds are business professionals who rarely look like the people they are asked to relate to, the claimant totally free credit score."

Through July, 45 percent of cases that went before FINRA arbitrators this year resulted in the customer’s being awarded damages, according to the agency.

FINRA’s officials defend their arbitration process as fair.

Cases involving more than $100,000 are heard by three arbitrators — two "public arbitrators" with no ties to the brokerage business and one who does.

"The industry arbitrator often can recognize bad conduct when he or she sees it and offer that expertise to the panel," said George Friedman, FINRA executive vice president and director of dispute resolution.

"We think the industry arbitrator has value, but we’re doing something to address the perception," he added.

Todd Saltzman, deputy director of case administration at FINRA, said the agency was conducting a two-year pilot program to see if there was a better way to appoint arbitration panels in investor cases.

Source

FedEx Corp., the world’s second-largest package delivery company, on Friday offered a signal that the global economy is improving, as it raised its first-quarter earnings forecast on better-than-expected international shipments and cost cuts.

The company’s performance is seen as a key indicator of overall economic health, but FedEx hesitated to predict when a recovery may ramp up.

"Despite some encouraging signs in the global economy, it is difficult to predict the timing and pace of any economic recovery," Chief Financial Officer Alan Graf Jr. said in a statement.

The Memphis, Tenn.-based company said it expects earnings of 58 cents per share for the first quarter ended Aug. 31. That’s down 53 percent from a year ago, but well above the company’s previous prediction of 30 cents to 45 cents per share.

On average, analysts were looking for a quarterly profit of 44 cents per share.

FedEx said it raised its forecast because of increased international priority packages and "strict cost management."

The company has cut salaries, laid off workers and made other cuts in the face of slowing demand.

The company’s international priority shipments are delivered between one and three business days.

International package shipments can be an indicator of how well economies are moving because they measure consumer and business activity.

Source

Efforts by private equity firms to sell stakes in portfolio companies through initial public offerings continued late this week as two North American companies took steps toward coming to market.

Talecris Biotherapeutics Holdings Corp, controlled by private equity firm Cerberus Capital Management LP CBS.UL, on Friday set terms for its planned $849.3 million IPO, signaling it was likely to price it within weeks. The company is based in North Carolina.

Dollarama Inc, backed by private equity firm Bain Capital, filed late on Thursday for an initial public offering on the Toronto Stock Exchange. The retailer is based in Montreal, Canada.

A source close to the Dollarama deal said the IPO would raise some C$300 million ($278 million) and that underwriters hoped to close the offering by mid-October.

The prospective deals are the latest in a string of private equity backed IPO filings in North America, as buyout firms look to take advantage of improved markets to exit investments.

U.S. retailer Dollar General Corp, backed by private equity firm Kohlberg Kravis Roberts & Co KKR.UL, said in August it was looking to raise up to $750 million in an IPO.

Other deals in the pipeline include a prospective $1.15 billion IPO by independent oil exploration company Cobalt International Energy Inc, whose owners include Riverstone Holdings LLC and The Carlyle Group CYL.UL.

A number of recent IPOs in the United States were by companies owned by private equity firms, such as chipmaker Avago Technologies Ltd, owned in part by KKR, that raised $745 free instant credit report.2 million in August, and Emdeon Inc, which makes and licenses health records management systems and is partly owned by General Atlantic Partners.

Talecris, which produces plasma-derived protein therapies, said in the filing it would use the IPO proceeds to pay down debt and to pay Cerberus a special dividend of $760 million.

Talecris estimated it would sell 44.7 million shares for between $18 and $20 per share, according to a prospectus filed with the U.S. Securities and Exchange Commission. It plans to list on Nasdaq under the symbol “TLCR.”

Talecris was formed in 2005 when German drug and chemicals group Bayer sold its blood products unit to Cerberus and Ampersand for about $590 million.

About 35 percent of shares being sold are held by existing shareholders, and the company said in the filing that it expects net proceeds from the IPO to be $514.8 million.

The Talecris IPO lead underwriters are Morgan Stanley, Goldman Sachs & Co, Citi and J.P.Morgan.

While the Talecris prospectus did not specify a date for pricing, a company typically comes to market within two or three weeks of setting terms of its IPO.

Dollarama is 80 percent controlled by Boston-based Bain Capital, which bought its stake in a leveraged buyout deal in 2004. Bain provided about C$364 million of equity for the C$1.05 billion deal, according to media reports at the time. 

Read more

Federal Reserve Vice Chairman Donald Kohn said on Thursday the U.S. central bank was developing tools to move away from its extremely loose monetary policy, but such an exit would not happen any time soon.

“Any combination of these tools, in addition to the payment of interest on reserves, may prove very valuable when the time comes to tighten the stance of monetary policy,” Kohn said in discussing a paper presented at the Brookings Institution.

“As the FOMC has said, that time is not likely to come for an extended period,” he said, referring to the Fed’s monetary policy-setting Federal Open Market Committee.

The paper, on the Fed’s track record since the failure of investment bank Lehman Brothers at this time last year, noted the central bank’s massive expansion of its balance sheet would not lead to inflation due to its ability to pay interest on reserves that are held with it by commercial banks.

“Paying interest on reserve balances also has important benefits and will play a key role in our exit from unusually accommodative policies when the time comes,” Kohn said.

Critics say the doubling in size of the Fed’s balance sheet to around $2 trillion since last September will lead to higher consumer prices when growth picks up and banks begin to lend out these excess reserves, fueling another credit bubble.

But the Fed argues that its ability to pay interest on reserves will break this linkage.

“Raising the interest paid on those balances should provide substantial leverage over other short-term market interest rates because banks generally should not be willing to lend reserves in the federal funds market at rates below what they could earn simply by holding reserve balances,” Kohn said.

This position was supported in the paper by Columbia University economist Ricardo Reis.

However, he did caution that the increase in the balance sheet was not without risks, and warned that if this led to credit losses at the Fed, it could force the Fed to go hat in hand to the U.S. government, compromising its policy independence.

Kohn added this outcome “seems extremely remote,” and he argued that the Fed would continue to earn substantial net profits on its balance sheet for the next few years in all but the most distant scenarios.

“Short-term interest rates would have to rise very high very quickly for interest on reserves to outweigh the interest we are earning on our longer-term asset portfolio. With the global economy quite weak and inflation low, a large and rapid rise seems quite improbable,” Kohn said.

Reis also argued that the Fed could target higher inflation in order to lean against the risk that the severe U.S. recession pushes the country into a Japan-style deflation, where falling prices inflicted a decade of stagnation.

Kohn said this might work in the perfect environment of an economic model, but was a bad idea in the real world.

“A policy of achieving “temporarily” higher inflation over the medium term would run the risk of altering inflation expectations beyond the horizon that is desirable. Were that to happen, the costs of bringing expectations back to their current anchored state might be quite high,” he said. 

Read more

Sunburned and barbecued out, Wall Streeters returning to work Tuesday face the first big challenge to the six-month-old rally.

Even after a down week on Wall Street, punctuated by a mixed August jobs report, the S&P 500 remains 50% above the 12-year lows hit in March.

Stocks churned in a narrow range for most of August, ending the month higher. But with fewer people around and trading in August, the market rally didn’t really face much of a challenge. That won’t be the case in September.

"The fall campaigns begin next week for Wall Street, Congress and students," said Scott Armiger, portfolio manager at Christiana Bank & Trust Company. "Everyone has to conduct business, pass laws or study."

Armiger said he doesn’t put much stock in the markets’ seesawing over the last two weeks. Trading volume has been low, as is typical of late summer when many market pros on the sidelines.

"The week ahead will tell us more about where we stand," he said.

The week is fairly light on economic reports, with readings on the trade gap, weekly jobless claims and consumer sentiment being the standouts. Congress reconvenes on Tuesday. Wednesday night, President Obama will speak to the nation and the Congress on health care reform.

"We’ve had some artificial demand created by all the stimulus, but when you take that away, will there be enough fuel for real demand to take its place?" said Dave Hinnenkamp, CEO at KDV Wealth Management. "The market is looking at the data and trying to figure it out."

Hinnenkamp said that stocks are likely to seesaw or even slide five or ten percent over the next month or two, until the next batch of earnings come out and the initial readings on third-quarter GDP growth are released.

Month of meltdowns: September is typically a tough one for Wall Street, with the Dow industrials, Nasdaq composite and S&P 500 all posting their biggest percentage losses for the year, according to the Stock Trader’s Almanac.

The month tends to be weak as the "back to work" mentality also tends to bring in a certain "cleaning house" momentum.

This particular September also ushers in a series of dubious anniversaries for Wall Street.

This Monday, Labor Day, is the one-year anniversary of the government’s takeover of mortgage lenders Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500).

On Sept. 8, 2008, the Bush Administration put the companies under a government conservatorship and replaced both chief executives. The two companies owned or backed half a billion in mortgage debt and had lost billions in the housing collapse.

One week later brings the anniversary of what many consider to be the accelerant that pushed the recession into full-blown crisis: the collapse of Lehman Bros. and 11th-hour buyout of Merrill Lynch by Bank of America (BAC, Fortune 500). On Sept. 15, 2008, the Dow slumped 504 points, as financial shares tumbled, credit seized up and investors went into panic mode.

Stocks lurched dramatically all week, but managed to end just modestly lower that Friday after a series of government interventions. They included the Federal Reserve jumping in to save AIG (AIG, Fortune 500) from bankruptcy and the establishment of an early version of the TARP bank bailout plan.

One volatile year later, the Dow is still down 13 free credit score.5%, the S&P is down 15% and the Nasdaq composite is down just over 7%.

On the docket

Monday: All financial markets are closed for Labor Day.

Tuesday: The July Consumer Credit report from the Federal Reserve is due in the afternoon. Credit is expected to have fallen for the sixth consecutive month as the recession continues to nip borrowing. Credit likely dipped a seasonally adjusted $4 billion after falling $10.3 billion in June, according to a Briefing.com survey of economists.

Wednesday: The weekly crude oil inventories report is due in the morning, from the Energy Information Administration.

In the afternoon, the Federal Reserve releases its periodic "beige book" survey of the economy, which tracks 12 districts.

The stream of reports showing improvements in housing and manufacturing and continued weakness in the labor market have given investors a picture of the economy in the first half of the third quarter. But the beige book will put that in a broader perspective.

Apple (AAPL, Fortune 500) is expected to introduce iPod Nano and iPod Touch models that include digital cameras, as well as other new updates, at its media event Wednesday. Apple watchers are also eager to see if CEO Steve Jobs will make an appearance now that he is back to work after a six-month medical leave.

Thursday: The July trade gap from the Commerce Department is expected to hold steady at $27 billion. Last month, imports rose for the first time in nearly a year due to higher oil prices, but that was partially offset by stronger global demand for U.S. goods and services. Investors will be looking to see if the trend continues this month.

Also in the morning, the Labor Department releases the weekly jobless claims report. Approximately 556,000 Americans are expected to have filed new claims for unemployment in the previous week versus 570,000 in the previous week.

Continuing claims, a measure of those receiving benefits for a week or more, are expected to continue to rise from the 6.234 million level hit last week.

RealtyTrac releases its monthly report on foreclosures.

Treasury Secretary Timothy Geithner speaks before the Congressional Oversight Panel.

Friday: The initial reading on consumer sentiment from the University of Michigan is due shortly after the start of trading. The index is expected to have risen to 67.3 in September from 65.7 in August.

The Commerce Department is expected to report a drop in wholesale inventories for the 11th straight month, when the July report is released in the morning. Stocks at U.S. wholesalers likely fell 1% in July, according to forecasts, after falling 1.7% in June.

August import and export prices are also due in the morning, while the August Treasury budget is due in the afternoon.

How does your portfolio look nearly one year after the collapse of Lehman Brothers? What investment choices hurt you or helped you the most? What strategy changes are you making for the future? Tell us your story. E-mail realstories@cnnmoney.com and your thoughts could be part of an upcoming story. For the CNNMoney.com Comment Policy, click here. 

Source

Barrick Gold said on Tuesday it will issue $3 billion in stock and use the proceeds to buy back all of its fixed-price gold hedges and a portion of its floating hedges.

Barrick, the world’s top gold producer, will take a $5.6 billion charge to its earnings in the third quarter as a result of a change in accounting treatment for the contracts, it said.

Barrick’s gold hedges, entered years ago to finance projects, have weighed on the company’s shares as the price of the metal has more than tripled over the past seven years payday loans.

Barrick will issue 81.2 million shares at $36.95 a share, a 6 percent discount to the stock’s closing price on Tuesday.

($1=$1.08 Canadian)

(Reporting by Cameron French; Editing by Frank McGurty)

Read more