Archive for the 'world' Category

18
Mar

Bernanke: Fed should oversee big and small banks

By alfredlester Closed
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WASHINGTON (MarketWatch) - The Federal Reserve needs to supervise banks of all sizes so it can stay on top of the markets and the economy, the central bank’s chairman, Ben Bernanke, said in testimony prepared for a hearing on Wednesday.

“The Federal Reserve’s participation in the oversight of banks of all sizes significantly improves its ability to carry out its central banking functions, including making monetary policy, lending through the discount window, and fostering financial stability,” Bernanke said in testimony prepared for a House Financial Services Committee hearing about the Fed’s role in bank supervision.

A Look at the Fed’s Bank Examiners

WSJ’s Dennis Berman and colleague Evan Newmark take on the Fed — namely the Federal Reserve Bank of Philadelphia, which Berman recently visited in the hopes of better understanding the people securing the front lines of the broken financial system.

“Because of its wide range of expertise, the Federal Reserve is uniquely suited to supervise large, complex financial organizations and to address both safety and soundness risks and risks to the stability of the financial system as a whole.”

Bernanke continues to defend the Federal Reserve from Senate legislation that seeks to remove some of its authority to oversee banks paperless payday loans. The bank reform bill introduced by Senate Banking Committee Chairman Christopher Dodd, D-Conn., on Monday would remove the Fed’s oversight of smaller state-chartered banks, permitting it to only continue to oversee and conduct on-site exams for 35 largest banks with $50 billion or more in assets.

That wording, however, is an improvement from the Fed’s point of view, over the legislation Dodd introduced in November. That original bill would have removed all the Fed’s supervision authority over banks so it could concentrate only on monetary policy. The House bank reform bill approved in December retains the Fed’s authority to supervise banks and conduct monetary policy. Dodd plans to have senators on the banking committee vote on the bill next week. He hopes to have legislation approved by the full Senate by spring.

The Fed oversees roughly 5,000 bank holding companies and about 850 state-chartered banks.

Bernanke: Fed should oversee big and small banks

14
Mar

Retail sales rise as shoppers fight winter blues

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WASHINGTON (Reuters) – U.S. retail sales rose unexpectedly last month despite heavy snow storms that were thought to have kept shoppers at home and bolstered hopes of a sustainable economic recovery.

Optimism about Friday's report was tempered by a slip in consumer confidence early this month. Worries about stubbornly high unemployment held back sentiment, even though the economy appears to be on the cusp of creating jobs.

"The manufacturing recovery is starting to broaden out to the key consumer area of the economy. Consumers are keeping up their end of the bargain to ensure the recovery from recession is a sustainable one," said Chris Rupkey of the Bank of Tokyo-Mitsubishi in New York.

Sales rose 0.3 percent, the Commerce Department said, as consumers bought an array of goods from necessities to luxury items. Analysts had expected sales to slip 0.2 percent. January sales, however, were revised down to a gain of 0.1 percent from the previously reported 0.5 percent rise.

U.S. stocks initially rose on the retail sales data but lost steam, and major indexes ended flat on the surprise drop in consumer confidence. U.S. government debt prices rose as investors focused on the weak sentiment data, while the dollar tumbled to a one-month low against the euro.

The sales report was the latest in a series of data hinting at building underlying strength in an economic recovery that has been largely driven by government stimulus and a swing toward inventory building by businesses.

Officials from the Federal Reserve meet on Tuesday and are expected to hold overnight interest rates in a range of zero to 0.25 percent and maintain a pledge to keep them ultra-low for an "extended period" to foster a more robust recovery.

Stronger data, however, could spark a lively discussion at the meeting, as some officials have raised concerns about the inflationary impact of keeping rates too low for too long.

Treasury Secretary Timothy Geithner said on Friday the economy was gradually strengthening across the board, but cautioned it would take time to fully recover.

The rise in spending came even as consumers were turning more sour. Thomson Reuters/University of Michigan's Surveys of Consumers' index on consumer sentiment slipped to 72 cash advance to savings account.5 from 73.6 in February. That was below market expectations for 73.6.

LABOR MARKET KEY

Economists, however, warned against placing too much weight on the dip in sentiment, saying it was not a good predictor of future sales. Consumer spending has continued to surprise on the upside even with confidence trending lower.

"What is more important is what happens in the job market and that market is improving. February was distorted by storms, but the underlying trend is up and March will be strong," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.

Sluggish consumer spending had fed worries the economy's recovery from the worst downturn in seven decades could falter when support from government stimulus and the swing in the inventory cycle disappears.

Motor vehicle and parts purchases extended their decline last month, falling 2 percent, likely reflecting a drop in demand by consumers nervous about vehicle recalls by Toyota Motor Corp. Excluding motor vehicles, retail sales rose 0.8 percent, building on a 0.5 percent rise the prior month.

Even more encouraging, core retail sales — which correspond most closely with the consumer spending component of the government's gross domestic product report — increased 0.9 percent after rising 0.6 percent in January.

"This implies that personal consumption is on track to exceed 2.0 percent for the first quarter of the year and bodes well for a greater than 3.0 percent print on gross domestic product," said Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut.

A second report from the Commerce Department showed business inventories were unchanged in January after falling by 0.3 percent in December.

Inventories are a key component of gross domestic product changes over the business cycle and a sharp slowdown in the pace of inventory liquidation handed the economy its fastest growth rate in six years in the fourth quarter.

(Additional reporting by Glenn Somerville in Washington and Caroline Valetkevitch in New York; Editing by Chizu Nomiyama)

Retail sales rise as shoppers fight winter blues

12
Mar

Financial Stocks: Regional banks gain, Citi stock pares gains

By alfredlester Closed
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SAN FRANCISCO (MarketWatch) — U.S. regional bank shares added to weekly gains Thursday, while Citigroup shares moved higher as investors cheered Chief Executive Vikram Pandit’s relatively upbeat outlook.

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The gains in bank stocks helped the financial sector outperform the broader market. The Financial Select Sector SPDR Fund , an exchange-traded fund that tracks the financial stocks in the S&P 500 , rose 0.5% while the broader index added 0.2%.

Shares of Huntington Bancshares added 2.9%, Fifth Third Bancorp rose 2% and KeyCorp rose 2.8%.

Regional banks had rallied in the previous session after a report suggested Britain’s Barclays was hunting for a retail bank acquisition. Also, several bank executives were speaking at a Citi investment conference in New York City this week.

News Hub: Credit Markets Come Back to Life

Credit markets are showing signs of life after a year of lows and two years after the collapse of Bear Stearns auto loan. Grianne McCarthy tells the News Hub panel why U.S. companies are feeling more confident about the economy.

Citigroup shares climbed 4% to $4.12 after Pandit said that the banking giant should be able to cover future credit losses in its troubled local consumer lending business. There are “early signs of improvement” in the division, he said at the conference. See story on Citi CEO’s remarks

The stock came off its intra-day high of $4.16 after the CEO said the U.S. government may sell its 27% stake in the banking giant. See pulse on possible government sale of Citi stake

Citi shares have advanced 18% this week and 25% for the year-to-date, bolstered by reports Wednesday that a sale of trust preferred securities had gone well.

The SPDR KBW Bank ETF has benefited from the rally in Citi and other banks. That ETF is up about 19% for the year-to-date and is one of the best-performing ETFs in recent months. Read more about financial and bank ETFs

Earlier this week, the KBW Bank ETF hit a fresh 52-week high. On Thursday, it rose as high as $25.21. Its next hurdle is $25.44, which it last traded in November 2008.

Financial Stocks: Regional banks gain, Citi stock pares gains

08
Mar

The Female Factor: Awareness Rises, but Women Still Lag in Pay

By alfredlester Closed
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PARIS — Companies in the United States, Spain, Canada and Finland lead the world in employing the largest numbers of women from entry level to senior management, according to a report set to be published Monday by the World Economic Forum. Yet the report also found that, despite increasing awareness of gender disparities in the workplace, women at many of the world’s top companies continued to lag behind their male peers in many areas, including pay and opportunities for professional advancement.

Moreover, many of these companies have yet to implement policies to address these gaps, despite pressure from many of their governments to do so.

The forum, based in Switzerland, surveyed 600 heads of human resources offices at the largest employers in 20 countries representing 16 different industries.

The poll assessed companies according to a range of criteria, including rates of female representation, whether the companies measured or set targets for gender balance in pay or promotion, and whether they offered benefits, like paid family leave, to promote work-life balance for their employees.

The findings, which were timed to coincide with the 100th anniversary of International Women’s Day, follow the announcement Friday by the European Union of an initiative aimed at significantly narrowing the union’s average 18 percent gender wage gap, which has changed little in the past 15 years.

A study by the 27-member union last year estimated that closing the wage gap could lead to a potential increase of 15 percent to 45 percent in gross domestic product.

A 2009 report by the International Labor Organization found an average 20 percent difference in pay for men and women employed full time in the Group of 20 largest developed and developing economies. Yet the World Economic Forum’s report found that 72 percent of the companies in its survey had no systems to track salary differences by gender.

In addition, 60 percent of the companies said they had no affirmative action policies to promote women within their hierarchies and did not measure women’s participation in their work forces.

Companies in India had the lowest percentage of female employees, 23 percent, just below Japan, with 24 percent, the forum’s report found.

Turkey, Austria and Italy rounded out the bottom five, with women representing just 26 percent, 29 percent and 30 percent of their staffs, respectively instant payday loans.

As its focus was on companies, the forum’s survey did not assess the status of women working in the public sector or in education, areas where female representation is traditionally high and where policies to promote gender balance are often institutionalized by law.

Women remained in the minority of senior corporate managers, representing just 5 percent of the chief executives of the 600 companies surveyed. Finnish companies in the sample had the largest proportion of female chief executives, with 13 percent, followed closely by Norway and Turkey with 12 percent and Italy and Brazil with 11 percent.

The high percentage of female chief executives at Turkish companies, despite having relatively low levels of female employment, was due to the fact that many of the biggest companies were controlled by families where women were at the helm, said Saadia Zahidi, co-author of the report and head of the forum’s Women Leaders and Gender Parity Program. In Italy, which reported similarly large numbers of women at the top, the companies surveyed were mainly large, multinational corporations.

In both countries, Ms. Zahidi said, “there is a real dearth of women elsewhere in the corporate hierarchy.”

The forum’s findings also follow a global study of 4,500 business school graduates published last month by Catalyst, a U.S.-based organization that advocates for women in the workplace.

The Catalyst study found that, even in this high-potential group, women consistently lagged behind men in advancement and compensation from their very first professional job. The differences held even in comparing men and women of equal levels of work experience and professional aspiration and in discounting for whether or not they had children.

Herminia Ibarra, a professor of leadership and organizational behavior at Insead, an international business school, and a co-author of the forum’s report, said of the findings, “Study after study shows that, in most countries and industries, women enter the workplace pipeline in representative numbers. Then, something fails to happen.”

The Female Factor: Awareness Rises, but Women Still Lag in Pay

02
Mar

Dividends on the rise after worst-on-record year

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CHICAGO (MarketWatch) — After 2009 saw companies slashing or eliminating dividend payouts left and right, many American firms are beginning to cautiously reinstate — or even raise — theirs in this period of assumed recovery.

While shareholder payouts still lag versus 2008’s, more than a dozen of the S&P 500 have raised or initiated a dividend this year, while only two have decreased or suspended them. And the firms now offering higher payouts represent a wide range of industries, from Coca-Cola to Tiffany and P.F. Chang’s to T. Rowe Price .

And there could be more to come.

“We expect dividend payments to rebound in 2010, including those from the financial sector, as dividends are reinstated, since some companies now have both the ability and incentive to pay dividends,” said Jeffrey Kleintop of LPL Financial Research. “In the current environment, a boost to the dividend payment may signal more confidence in sustained growth by business leaders than their guidance on the earnings outlook, helping to lift stock prices along with the dividend payout.”

That comes after an especially rough spell as “the past two years have been tough on dividends,” Kleintop added. “In fact, 2009 marked the worst year on record for dividends since 1955, resulting in a 21% decline in dividends per share for the S&P 500 companies as a whole.”

In 2008 and 2009, 32 S&P 500 companies suspended their dividends, while only 11 initiated them, but 49 have raised or initiated dividends so far this year. One of the latest is Qualcomm , which announced late Monday that that its quarterly dividend would increase almost 12% to 19 cents a share.

‘2009 marked the worst year on record for dividends since 1955.’

Jeffrey Kleintop, LPL Financial Research

“The strength of our business model is enabling significant investments in our strategic business initiatives while returning capital to stockholders,” said Paul Jacobs, chief executive of the wireless-technologies firm, in announcing the hike. “Since commencing this program in 2003, we have returned $12.6 billion to our stockholders through a combination of dividends and stock repurchases payday advance online.”

For the month of February alone and for all reporting issues — not just the S&P 500 — dividend increases are up 29% from February 2009, although they’re still down 42% from February 2008, noted Howard Silverblatt, senior analyst at S&P Indices.

Regulatory deja vu

The SEC enacts a new rule limiting short sales, after finding an even stricter version ineffective in 2007. Dennis Berman and Evan Newmark discuss the shift.

“February is typically a good month, and this one has come through,” he said. “Actual cash payments are still down year-over-year, but at least it’s starting to go back up.” He added that he expects it will “most likely [be] 2012-13 until we reach 2008 levels.”

For the S&P 500, “it is the best month in two years, with a very impressive three-month run,” he continued. “I expect more good news, but not as much of it over the next few months; I also expect reductions to start next month.”

Josh Peters, editor of Morningstar’s DividendInvestor, said dividends “really bottomed out last summer after a spate of cutting we hadn’t seen since the Great Depression,” including one from Dow Chemical , for the first time in 97 years. At the same time, he noted that some of the mote stable consumer-focused companies, like McDonald’s and General Mills , “continued to raise theirs even during the crash.”

But over the last couple of months, “we have seen less-traditional payers deciding to raise their dividends,” including retailers, restaurant chains and tech firms, he said. “And assuming we don’t tip back into a double-dip recession, we should continue to see more dividend increases than cuts.”

Many companies will have to do so just to stay competitive against other issues in the stock market, he said, especially as more and more Baby Boomers near retirement.

“They have learned that stock prices don’t just go up, and they will want the reliable income,” Peters said. “Compared to 10 years ago, the idea of trying to live off capital gains is truly frightening.”

Dividends on the rise after worst-on-record year

28
Feb

James River Coal 4th-quarter loss narrows

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RICHMOND, Va. – Coal mining company James River Coal Co. said Friday that its fourth-quarter loss narrowed, but the company said its results were hurt by lower rates of production at its mines.

The company also put out 2010 guidance that came up short of analyst expectations.

James River Coal said it lost $3.2 million, or 12 cents per share, compared to a loss of $33.6 million, or $1.26 per share, in the year-earlier quarter.

The company sold $149.5 million worth of coal during the quarter, up from $140.8 million in the 2008 fourth quarter. But company executives said that they were forced to reduce production because of soft coal markets business cards.

Analysts surveyed by Thomson Reuters expected earnings of 44 cents per share on sales of $175.4 million.

For 2010, the company projects earnings of $1.70 to $2.25. That is below the analyst consensus view of $2.93 per share.

James River Coal earned $51 million, or $1.85 per share, for all of 2009.

Shares of the company fell $1.09, or 6.4 percent, to close at $15.91.

James River Coal 4th-quarter loss narrows

25
Feb

Asian Shares Falter on Concerns About U.S. Economy

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SINGAPORE — A tepid rally in Asian shares faltered early on Thursday and the dollar rose after the Federal Reserve chairman Ben Bernanke’s reaffirmation of an extended period of low U.S. rates boosted risk-seeking but also raised some concerns about global growth.

The Nikkei 225 average in Japan rose initially, helped by exporters like Canon and as Toyota Motor reversed most of its losses of the past two days after its chief apologized to consumers and pledged reforms to skeptical U.S. lawmakers at Congressional hearings. Toyota’s U.S.-listed shares jumped 3.9 percent.

But a more than 2 percent slide in Denso Corp. weighed on the broader Tokyo market after authorities said the FBI has raided three Detroit-area Japanese auto parts makers for a sealed federal antitrust investigation, including the Toyota suppliers Denso and Tokai Rika.

“The market welcomed a rebound in U.S. stocks after news that the country will continue its low rate policy,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. “But we’ve seen a series of worse-than-expected economic data from America lately and uncertainty about the outlook for the U.S. economy is increasing.”

The MSCI Asia excluding Japan index fell 0.43 percent by midday, and sectors that fell the most were industrials and technology.

The Nikkei closed 0.95 percent lower.

A report on U.S. new home sales on Wednesday highlighted the Fed’s predicament. Sales slumped more than 11 percent to a record low, suggesting the sector at the center of the financial crisis had yet to fully heal.

Mr. Bernanke’s assessment of the economy was also grim, further curbing the speculation of quicker policy tightening that had been spurred by the Fed’s raising of the discount rate last week.

He also said a weak job market and tame inflation warrant low interest rates for “an extended period,” making clear that policy tightening is some time away, which helped the Dow Jones Industrial average rise 0 best humidifiers.89 percent.

The dollar fell initially in Asia but the trade-weighted index soon recovered to 80.96.

Gold was at $1,096 an ounce, far from a the previous day’s high of #1,107.95.

Oil prices also hovered just above the $80 mark but were also off the previous day’s highs at $80.45, a level hit when stock markets rallied on the back of Mr. Bernanke’s remarks despite a bearish report showing a build up in U.S. crude stockpiles.

The euro stayed weak at $1.3483, paring further the gains it had made soon after Mr. Bernanke’s remarks and heading closer to a nine-month low of $1.3442 struck last week.

Worries about a possible downgrade of Greece weighed on the European single currency, pushing it down from above $1.36 on Wednesday.

Standard and Poor’s said it may cut Greece’s BBB+ rating by one or two notches within a month, citing downside risks to growth that could hinder the country’s deficit-cutting plans.

“The Greek situation remains fluid. So acrimonious discussions between Athens and Brussels could easily result in further near term euro slippage,” Citigroup said in a note.

But Citigroup also said that with euro net short positions at a record high, any positive news from Greece in the coming weeks could lead to a bounce in the single currency.

The euro has lost over 10 percent since late November as fiscal woes in Greece intensified in the past few months leading to a huge sell-off by investors.

Reuters

Asian Shares Falter on Concerns About U.S. Economy

Hot News: Targets 4Q profit rises 53.7 percent

21
Feb

NAACP elects Brock, 44, as youngest board chairman

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NEW YORK – The NAACP elected a health care executive as its youngest board chairman Saturday, continuing a youth movement for the nation’s oldest civil rights organization.

Roslyn M. Brock, 44, was chosen to succeed Julian Bond. She had been vice chairman since 2001 and a member of the NAACP for 25 years.

Brock works for Bon Secours Health Systems in Maryland as vice president for advocacy and government relations, and spent 10 years working on health issues for the W.K. Kellogg Foundation. She joins Benjamin Todd Jealous, the 37-year-old CEO of the NAACP, as leader of the 500,000-member organization.

Brock said she plans to focus on pushing for policy changes to eliminate inequality, strengthening the relationship between the national and local NAACP branches and holding people accountable.

“It’s not always what someone is doing to us, but what we are doing for ourselves,” Brock said in an interview.

The departure of Bond, 70, after 10 years as board chairman marks a turning point for the National Association for the Advancement of Colored Pepole.

Bond came of age in the segregated South, helped found the Student Non-Violent Coordinating Committee and was on the front lines of the protests that led to the nation’s landmark civil rights laws. He is a symbol and icon of “the movement,” which was a defining experience for older generations.

In recent years the NAACP has endured criticism that it is old and out of touch. Then Bond brought in Jealous, then 34, as the NAACP’s youngest CEO, and endorsed Brock’s bid for board chairman.

The selection of young leaders “is deliberate, but it’s also fortuitous,” Bond said. “We are lucky to have had this confluence of a young CEO and a young chair. I don’t think we plotted and planned that in 2010 the stars would align this way.”

Jealous said he belongs to a generation “whose greatest accomplishments are in front of them … who are even more hungry for change.”

Bond said the board asked him to run for another one-year term, but he declined.

“Frankly, this is the most difficult nonpaying job I’ve ever had,” said Bond, who has served in the Georgia state legislature, is a member of several corporate boards and a professor at American University and the University of Virginia easy fast payday loans.

Brock was selected in a vote by the 64-person NAACP board. Her opponent was Rev. Wendell Anthony, leader of the NAACP’s Detroit chapter, who withdrew Friday after he was not re-elected to his seat on the board.

Brock graduated from Virginia Union University and has an MBA from Northwestern, as well as master’s degrees in health care administration and divinity.

She described health care as her passion and said the current reform debate hinges on one fundamental question.

“Am I my brother’s and my sister’s keeper?” Brock asked. “That’s the question that we’ve got to ask our legislators. Are we really, really concerned about our neighbors, and about their health, and their children’s health?”

While acknowledging the need to “retool our front line” and develop young civil rights activists, Brock said the wisdom of the older generation is still needed.

“If it were not for that ‘aging’ membership, the NAACP would not be who it is and what it is today,” she said.

Many conservatives question the need for an NAACP and say that an association for the advancement of white people would be considered racist.

Brock said the NAACP has erroneously been classified as a black group: “We are not. We are a multiracial, multiethnic organization. So as we move into our second century, our desire is to cast our net broader.”

“‘People of color’ or ‘colored people’ really speaks to those who are falling through the cracks … who feel locked out,” she said.

She said the nation was at a pivotal moment after electing the first black president.

“I’d be the first to say that at the NAACP we have to acknowledge how far we’ve come as a nation in terms of race relations, but also in that acknowledgment, understanding that we’re not where we ought to be, but we thank God we’re not what we used to be.

“We need to draw a line in the sand and say thank you, America … but also challenge America that we still have much more work to do.”

___

Jesse Washington covers race and ethnicity for The Associated Press. He is reachable at jwashington(at)ap.org or http://www.twitter.com/jessewashington.

NAACP elects Brock, 44, as youngest board chairman

Hot News: Is it time to give up your adjustable-rate loan?

10
Feb

Earnings Preview: PepsiCo Inc.

By alfredlester Closed
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NEW YORK – PepsiCo Inc., maker of soft drinks and snacks, reports its fourth-quarter results before the market opens Thursday.

WHAT TO WATCH FOR: Changes in the way consumers are buying snacks and soft drinks as they continue watching their wallets. PepsiCo Inc.’s beverage sales have fallen in North America as people either cut out the expense or started switching to healthier juices and teas. Snack sales have held up better as people buy more food at grocery stores and eat out less often.

Analysts expect PepsiCo to report that its beverage sales remained soft in the fourth quarter. They will focus on the company’s snack division, Frito-Lay, maker of brands like Doritos, where growth could slow in the quarter.

Competition in the snack business is intense, wrote Bill Pecoriello, an analyst who heads ConsumerEdge Research LLC.

“Frito has been losing share even as year-over-year price increases and promotional intensity come more in line with historical norms,” he said short term personal loan.

He said international growth trends need to hold up as well because they have been driving the company’s growth.

WHY IT MATTERS: PepsiCo makes products that people at varying income levels buy, so its results offer a window into how shoppers are spending their money.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters expect PepsiCo to earn 90 cents per share on revenue of $13.27 billion.

LAST YEAR’S QUARTER: PepsiCo reported profit of $719 million, or 46 cents per share a year earlier. Excluding restructuring and other one-time items, the company earned $1.39 billion, or 88 cents per share.

Earnings Preview: PepsiCo Inc.

08
Feb

CIT names ex-Merrill CEO Thain as chairman, CEO

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NEW YORK – CIT Group has chosen former Merrill Lynch CEO John Thain to lead the company as chairman and CEO as the commercial lender continues to restructure its business following a brief stay in bankruptcy protection last year.

CIT Group Inc., one of the nation’s largest lenders to small and mid-sized businesses, says Thain will take the helm immediately. He replaces acting interim CEO Peter J. Tobin, who will remain on CIT’s board.

Thain served as chairman and CEO of Merrill Lynch until its sale to Bank of America was completed in January 2009 bad credit payday advance. He resigned under pressure from the combined company after reports he rushed out billions in bonuses to Merrill employees in his final days as CEO, while the brokerage was suffering huge losses and just before Bank of America took it over.

CIT names ex-Merrill CEO Thain as chairman, CEO

06
Feb

Earnings Preview: Lorillard Inc.

By alfredlester Closed
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RICHMOND, Va. – Lorillard Inc., the nation’s third-biggest cigarette company, reports its fourth-quarter results before the stock market opens Monday.

WHAT TO WATCH FOR: Any sign the maker of Newport cigarettes is losing market share loss among menthols or gaining in the discount segment — and any sign that cigarette volumes are rebounding from sharp drops in volume experienced industrywide in 2009 due to a federal tax hike.

Analysts believe the Greensboro, N.C., company continues to have the industry’s best outlook for profit margin, price per pack and volume.

Despite the Food and Drug Administration’s pending study on the public health impact of menthol, the segment continues to grow as the rest of the cigarette market shrinks. A scientific committee being organized by the FDA must study and issue a report on the public health impact of menthol cigarettes.

The top two U.S. cigarette companies — No. 1 Philip Morris USA, owned by Richmond, Va business cards.’s Altria Group Inc., and No. 2 Reynolds American Inc., based in Winston-Salem, N.C. — are ramping up efforts to grab some of the menthol market away from Lorillard.

Lorillard is working to grow its Maverick discount brand as the weak economy and high unemployment have caused some consumers to switch to lower-priced brands.

WHY IT MATTERS: As demand for cigarettes continues to fall, any rebound in volumes could signal consumers are adjusting to April’s 62-cents-per-pack federal tax hike, which most cigarette makers accompanied with price hikes.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters on average expect Lorillard to earn $1.51 per share on revenue of $1.23 billion.

LAST YEAR’S QUARTER: Lorillard reported profit of $1.53 per share on revenue of $1.09 billion.

Earnings Preview: Lorillard Inc.

30
Jan

Davos leaves questions over global bank rules push

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DAVOS, Switzerland (MarketWatch) — Bankers and politicians agreed on little in public during this week’s World Economic Forum gathering of top CEOs and policymakers in the Swiss Alps, other than the desire to see regulations coordinated around the globe.

But some attendees say it’s not clear that’s going to happen.

Bankers and politicians met behind closed doors at the annual meeting Saturday, though the discussions didn’t appear to produce any concrete agreements.

Bankers have acknowledged they are going to see more regulation, said U.S. Rep. Barney Frank, the Democratic chairman of the House Financial Services Committee, after the meeting.

Deutsche Bank chief executive Josef Ackermann, who has emerged as an unofficial spokesman for the bankers at this year’s WEF , told an audience at a panel discussion later Saturday that “something has to happen quickly to restore confidence in the banking system.”

Ackerman, who chairs the forum’s committee of finance CEOs, on Friday said the bankers were in favor of higher capital requirements, better liquidity management and improved market infrastructure, as well as measures that would ensure failed banks could be wound up without bringing down the system. Read about Ackermann’s presentation.

Davos: Jacob Zuma Promotes World Cup at Forum

South African President Jacob Zuma goes on a public relations blitz at the Davos economic forum to promote the World Cup in South Africa. WSJ reporter Roman Kessler has more.

Meanwhile, questions surround the ability of regulators to internationally coordinate new banking rules.

Ensuring some degree of uniformity in new banking rules amid intense public anger around much of the world was always going to be a tough task.

The importance of policy coordination was a “key lesson of the crisis,” International Monetary Fund Managing Director Dominique Strauss-Kahn said on Saturday. “I’m a bit afraid we’re not going in this direction.”

“The big unknown is the attitude of the United States,” said Barry Eichengreen, an economics professor at the University of California Berkeley, in an interview.

The Obama administration’s introduction last week of the “Volcker rule,” a proposal that would limit the size of commercial banks, barring them from trading for their own account and operating private equity and hedge funds,

British Chancellor of the Exchequer Alistair Darling contends that approach wouldn’t solve the problems that created the crisis fast payday loans. He’s put the emphasis on increased capital requirements and “living wills” that would detail how to close down failed banks.

French President Nicolas Sarkozy told Davos bankers and other luminaries earlier this week that the Obama measures were correct, but that no nation could go it alone. Efforts must be coordinated by the Group of 20 nations, which agreed in April that the Basel, Switzerland-based Financial Stability Board would oversee negotiations. Read about Sarkozy’s speech in Davos.

Banks say that a lack of coordination would make for an un-level playing field. Policy makers say banks would game differences in a damaging round of regulatory arbitrage.

European Central Bank President Jean-Claude Trichet told a Davos audience that failure to coordinate measures “would be a catastrophe.”

Frank has said the Obama plan would be passed within months.

In a panel discussion earlier this week, he dismissed ideas that pressing ahead with the plan threatened efforts to coordinate measures across the globe as a “false dichotomy.”

While Frank was in high demand this week, Obama administration officials were thin on the ground in Davos.

On Saturday, Eichengreen introduced a high-powered panel discussion of central bankers and business leaders on the issue of financial reform, noting that the panel lacked only a representative of the Obama administration. “But why should this panel be any different from others here at Davos this year,” he said.

White House economic adviser Lawrence Summers delivered remarks in Davos Friday, but no other high-profile administration officials were in attendance for the event that began Wednesday.

Eichengreen said a U.S. policy that insists on elements of the Obama plan such as the ban on proprietary trading by commercial banks would make it difficult to reach international agreement.

Davos leaves questions over global bank rules push

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