Business & Financial News

Wall Street closed down Tuesday but reduced its losses quite considerably.

The Dow Jones lost 100.20 points (0.89%) to 11,140.06. The S & P 500 drops 8.67 points (0.74%) to 1165.30. The Nasdaq Composite Index gives 6.50 points (0.26%) to 2473.83.

These data are likely to vary even slightly.

The new CEO does not rule Eiffage sale or closure of loss-making subsidiaries to consolidate the early resumption of the performance of the construction group observed in the first half.

Peter Berger, the designated successor of the president and founder of the number five European construction and concessions Jean-François Roverato, also announced for the energy division Forclum a savings plan to reduce by 3 to 4% overhead by 2013-2014.

"We will, on public works sectors, particularly energy, continue and even intensify our efforts and recovery plans so that the performances, which are stabilized, can go up significantly," said Peter Berger in a meeting with analysts.

"I do not exclude in particular on non-strategic subsidiaries deficit repeatedly stops or transfers," he added.

Eiffage, whose margins were negatively impacted in recent years by economic conditions and difficulties in the execution of certain contracts, including hospitals, also assured that he would in future be more selective in order intake .

"We anticipate a marked increase in free cash flow, the best three years, and therefore reduced our net debt due to a combination of debt reduction highways that will continue and the sale of certain assets that are PPP mature, "added Peter Berger.

RESUMPTION OF ACTIVITY CONFIRMED

Eiffage end of June showed a net debt to total 14.42 billion euros, 13.6 billion of debt lodged in the concessions.Autoroutes Paris Rhin Rhône conducted in the first half to three bond issues, the first step in the process of refinancing debt in February 2006 when privatisaton of French motorways.

"We will begin September 13 and 12 talks with banks to begin the process of refinancing Eiffarie and APRR, our goal is to finish the first quarter of 2012, that is to say again in advance before the final deadline is early 2013, "continued Pierre Berger.

Eiffage confirmed its objective of a return to growth in its turnover this year in view of a first half marked by an upturn after two consecutive years of contraction over the same period.

The group identified the first six months of the year an EBIT of 451 million euros, up 9.5% thanks to strong margin growth in the concessions. Its order book grew by 5% year on year.

In contrast, bond issues made by APRR in the first half came to adding to the financial burden of the company, bringing to 43 million euros against 70 million a year earlier net income, group share, a drop of 38 6%.

Prior to publication, the action Eiffage closed up sharply (7.48% to 33.90 euros), giving a market capitalization of around three billion euros. Since the beginning of the year, the title has sold about 4%, after declining 16% over the whole of 2010.

European shares ended down Thursday after three sessions in a row to rebound in the wake of Wall Street, where the departure of Executive Steve Jobs of Apple weighs on the coast.

The CAC 40 index finished down 0.65% at 3,119 points, after gaining 1.6% up in volumes that have accelerated shortly after the opening of Wall Street to finish at a level of 102% of their average last three months.

Other European stock markets, London has lost 1.44% and 0.25% Milan. Victims of several rumors, including one referring to a general ban on short sales in Germany denied by Berlin, Frankfurt fell 1.71%.The pan-European Euro Stoxx 50 index yielded 0.98% after opening up 0.6%.

On Wall Street, the S & P 500, Dow Jones and Nasdaq lost 1.1 to 1.2% at 6:17 p.m..

"The market plays to be afraid before Bernanke's speech tomorrow.The question is whether the Fed chairman will have the means to announce something solid while the United States are in a liquidity trap, "said Yves Marc, seller actions at Global Equities.

ADJUSTMENT SHOULD CONTINUE TO BACK

As for values, the bank (0.58%), the only growing sector, have benefited from the investment of $ 5 billion (3.5 billion) of Berkshire Hathaway in Bank of America.

This investment could be the harbinger of a more massive return of investors to the market this autumn, says Fabrice Cousté, CEO of CMC Markets France.

In Paris, Crédit Agricole jumped 4.81%, moving up and the top 40 increases in the ACC after publishing quarterly results better than expected, loads of Greece finally being advanced by less important.

"The adjustment of the markets continues and it seems likely that this adjustment continues in the fall," warned in a note Philippe Mimran, head of securities at managements UFG-LFP.

"The bond markets have clearly voted for a depressed economy, with real rates marginally positive German and American frankly negative," he adds.

The downturn in equity markets was also reflected in the yields of bonds rated.The performance of the 10-year German Bund dropped below the 2.2% to 2.179% against 2.188% yesterday.

That of the French OAT with the same maturity has returned around 2.86% after flirting with 2.95% in session, following the announcement of measures to improve public finances by the Prime Minister, François Fillon.

Market pressure on Italy has intensified Tuesday, endangering the ability of the second most indebted country in the euro area to fund and push the Italian authorities to meet urgently.

Italian bond yields rose to 10 years in meeting its highest level since the creation of the single currency, 11 years ago, reaching approximately the same level as the Spanish paper rate with the same maturity, also increased.

This catching highlights in the eyes of the market, concerns about the ability to Rome to meet its deadlines are supplanting concerns about Madrid.

The benchmark index of the Milan Stock Exchange Tuesday touched their lowest level in 27 months, weighed down by the collapse of banks with strong exposure to the Italian debt.The title of Unicredit fell 4.43% to 1430 GMT, while Intesa Sanpaolo yielded 3.36%.

For its part, the pan-European FTSEurofirst 300 index reached a low of 10 months, investors feared that the global economic downturn that seems sketched out does not penalize further European countries in trouble with their finances.

"The fear of the market, see the world falling into recession again (…) and in the euro area, the peripheral markets are those who will suffer most," said Alessandro Giansanti, strategist for ING in Amsterdam.

Zapatero defer taking vacation

According to a source familiar with the matter, the Italian Minister of Economy Giulio Tremonti was to preside on Tuesday a meeting of the Financial Stability Committee, with representatives of the Bank of Italy, the financial markets authority (Consob) and the insurance regulator (ISVAP).

This meeting comes on the eve of a statement to parliament by Silvio Berlusconi, President of the Council, the country's economic situation.Wednesday morning, Jean-Claude Juncker, Eurogroup President Giulio Tremonti will meet in Luxembourg.

In Spain, the President of the Government Jose Luis Rodriguez Zapatero decided Tuesday to delay his departure on vacation, to follow the latest developments in the crisis, including the new surge in the risk premium attached to debt in Madrid.

The yield spread between Spanish and German bonds to 10 years rose above the symbolic threshold of 400 points, a level not seen since the creation of the euro area, before retreating.

For its part, the Italian paper to 10 years has seen its performance surpass the 6% above which have increased concerns about the ability of Rome to pay.

"The above 6% was seen as a yellow line for Italian yields, and now it is crossed, people do not want to accept any risk apart from Germany," said one trader.

Consequence of this strong demand for German bonds, the 10-year Bund was stopped Tuesday to offer a premium vis-à-vis inflation, a first for over half a century.

While most European leaders are on vacation, several international institutions have given verbal support to Rome and Madrid face this new fever.

The European Commission (EC) has expressed "confidence in the ability" of both countries to take steps to keep their finances afloat.

Angel Gurria, Secretary General of the OECD, said in an interview with Reuters that Italy kept its budget under control and was taking the right decisions to reduce its deficit.

DOUBTS ABOUT THE PLAN HELP TO GREECE

Italy is under fire of the markets because of its slow growth and its debt ratio, which represents 120% of its gross domestic product (GDP), the second highest ratio in the euro area behind Greece with nearly 160% of its GDP.

In addition, political instability in the center-right coalition in power in Rome fueling market concerns, including legal proceedings initiated against the president Silvio Berlusconi.

The difficulties of Rome and Madrid, two heavyweights in the euro area, also cast doubt on the financing of programs of aid already granted to Greece, Ireland and Portugal under the auspices of the European Union and International Monetary Fund (IMF).

While Italy and Spain to finance yields much higher than the rate of loans granted to Greece (3.5%), the EC said Tuesday that all countries involved would participate in the plan.

"There is no question that a country does not participate in the next tranche of aid to Greece, including Italy and Spain," said the spokeswoman Chantal Hughes EC.

"However, if a country faces a financing cost higher now than when the next tranche of aid will be paid, there is a mechanism for ensuring that this gap is compensated," she said.

Wall Street opened with sharp rebound Monday, boosted by the announcement of an agreement in extremis on raising the U.S. debt ceiling.

In early trade, the Dow Jones advanced 1.06% (130.99 points) to 12,274.02 points.The S & P 500, larger, gained 1.13% (14.85 points) to 1307.13 points while the Nasdaq composite market clinching 1.37% (37.80 points) to 2794.10 points.

Barack Obama announced late Sunday night that the Democratic and Republican leaders had reached a compromise, ruling out the risk that the world's largest economy in default of payment.

The agreement, which must be submitted to a vote of both houses of Congress on Monday, came after the U.S. stocks last week recorded its worst weekly performance in 2011, weighed down by fears of a deadlock in negotiations.

"The agreement is obviously useful in view of the government's ability to pay its debts, and this leads to a relief rally," Judge Wayne Kaufman, John Thomas Financial Analyst in New York, which estimates that the market fell excessively lately.

Despite this last-minute agreement, concerns remain about a possible lowering of the sovereign rating of the United States, as well as the debt crisis in Europe, and some analysts warn that the rebound on Wall Street could be short-lived.

Values, Ford and Amazon advanced 4.0% and 1.4% on positive recommendations from the review of Barron's.

An increase was expected after the ECB increases the warnings on inflation in Europe. Jean-Claude Trichet, President of the ECB

The European Central Bank (ECB) raised its key rate from 1.25% to 1.50%, said Thursday one of its spokesmen. This increase was expected because the ECB had stepped up warnings on inflation since the previous meeting of the Governing Council in early June, where she had left interest rates unchanged after the first increase took place in April for nearly three years.

Moreover, the marginal lending rate of the ECB has increased from 2% to 2.25% and the rate of return on deposits was increased from 0.50% to 0.75%. Inflation in the eurozone reached 2.7% in June as in May after 2.8% in April. Is well beyond the target set by the ECB to keep below 2% over the medium term.

However, these are the statements of Mr.Trichet on the Greek crisis that will be the most anticipated at the press conference should follow the decision on rates from 1230 GMT. The ECB has meant so far that it would accept no solution that seems like a "credit event, a failure or partial failure", such as a result of rescheduling the debt of Greece as requested by Germany.

In exchange for aid, Greece must agree to supervise foreigners see the next wave of privatization, said this weekend the President of the Eurogroup Jean-Claude Juncker. To oversee the new wave of privatizations in the country, Jean-Claude Juncker imagine a system similar to that which coordinated the East German companies.

The Greeks must be prepared to intervene in foreign see how they will deal with privatization that will enable them to pay their debt, said Luxembourg Prime Minister Jean-Claude Juncker in an interview Sunday."The sovereignty of Greece will be greatly restricted," he told the magazine Focus.

"For example, to meet the next wave of privatization, they will adopt a system based on the model of the German Treuhand", an organization created in 1990 to oversee the privatization of East Germany after the collapse of in East Germany, said the President of the Eurogroup. "Do not offend the Greeks. But we must help them. They expressed themselves willing to accept the help of experts in the euro area" to help them carry out economic reforms, he added.

Greece is now under pressure to quickly set up a program for budget savings of 28.4 billion euros from privatization amounted to 50 billion program that was approved last week by Parliament in spite of violent clashes in the streets of Athens."The measures taken by Athens should be promptly implemented. Privatizations should start immediately, for example," said for its part, the German finance minister, Wolfgang Schauble Saturday.

Jean-Claude Juncker said he believed that the measures taken to help Greece "solve the Greek question." He also recalled that between "1999 and 2010 wages had increased by 106.6%" even though the economy had not grown at the same rate and wage policy had been "totally out of control" and had not taken account of productivity. "

After four consecutive months of decline, the curve of unemployment in France is rising again in May, a reversal in which the government took note and promised to "redouble efforts".

The number of job applicants in category A, those who exercised no activity during the month, increased by 17,700 (+0.7%) last month in France to $ 2,686,800, show Statistics released Tuesday by the Ministry of Labour and job center.

This is the first increase for this category since the start of the year.In one year, the number of unemployed in category rose by 0.3%.

By adding the persons engaged in small (B and C), the increase in the number of unemployed reached 1.0%, 39,400 more people in one month, reaching 4,078,500. On an annual basis, this figure represents an increase of 3.8%.

If we include the overseas departments, the number of job seekers in categories A, B and C reached 4,341,400.A figure up 0.9% over the month and 4.1% year on year.

Xavier Bertrand, Minister of Labour, Employment and Health, noted the increase in a statement, stressing that it "calls into question, however, the downward trend registered since the beginning of the year ".

Between January 1 and May 31, he notes, the number of unemployed fell by Class A 35,700.

The government has set a goal of reducing the unemployment rate in France under the symbolic level of 9.0% by the end of the year, against 9.3% in late 2010.INSEE table on its side on a rate of 9.0% in the fourth quarter.

"Redouble their efforts"

Dominique Barbet, economist at BNP Paribas, stresses the decline of 8.5% of employment repeatedly declared that he says can be explained by the lack of public holidays on weekdays in May and approach the entrance effect of pension reform (July 1), "which could have reduced the need for replacement workers."

The detailed figures for May showed a persistent weakness of the French labor market, namely the difficulty to reduce youth unemployment and that of seniors.

In less than 25 years, the number of jobseekers in Class A has increased by 1.3% last month, but remains down 6.6% year on year.For over 50 years, the increase was 0.9% over one month and reached 12.3% year on year.

Another trend is confirmed: the importance of long-term unemployment. The number of persons unemployed for a year or more increased 0.8% in May for categories A, B and C and rose by 10.5% compared to May 2010.

"The results of May to encourage greater efforts to reduce unemployment," said Xavier Bertrand.

Public policy based in particular on the promotion of learning, improving the economic support of licensees and a better balance between supply and demand by focusing on business "in tension", that is say, lack of labor, like construction or catering.

Christine Lagarde looks set to lead the International Monetary Fund (IMF) this week, despite an unprecedented protest by emerging from the traditional domination of Europe on this post.

An informal poll conducted by Reuters with the voting countries suggests that the French economy minister should get a majority hands down against the candidate of Mexico Agustin Carstens.

The governor of the Mexican central bank raised Friday, however, supported by Canada and Australia, but it should not come to tear this position the hands of the Europeans, who hold between 40 and 47% of voting shares.

The 24 permanent members of the Board of the IMF should conduct an informal survey Monday to determine if one of the two candidates wins a clear majority.

This leadership race of the IMF was one of the most contested in the history of the institution, developing countries have strongly called for a selection process based on the candidate's qualifications and not on nationality, against the opinion of the European group.

The choice of the United States, which have not officially announced which candidate they supported, will be critical over the next two days, the world's largest economy accounting for 17% of the votes in the IMF.

However, we expect the Obama administration that it supports the candidacy of the French Minister for 55 years, thus preserving the tradition that gives the job to the Europeans while those in number two of the IMF and World Bank President is vested with Americans.

OUTSIDER

Japan and China, second and third respectively in terms of influence to vote, have also avoided pronouncing in favor of either candidate.But, as the United States, several IMF officials said the two countries would vote for Christine Lagarde.

Candidate self-proclaimed outsider, Agustin Carstens has highlighted his experience as a former head of the IMF to support his campaign, and his knowledge of the treatment of economic crises in developing countries.

With the rallying of Peru and Chile on Friday, he now has the support of all Latin American countries except Brazil, remained silent.

Supporters of Christine Lagarde put forward political and economic credibility across Europe, key areas of the IMF's efforts to avoid another global economic recession.

The agenda of the minister remains silent on Friday after Wednesday, June 29, the eve of the deadline for appointing the new CEO.

The position became vacant following the arrest and indictment of its former director, Dominique Strauss-Kahn, in a case of sexual assault of a maid in a hotel of New York.

Before his resignation, Dominique Strauss-Kahn oversaw a reform of the IMF votes now giving more voice to the emerging but still less than they demanded. In accordance with the requests of these countries, both candidates have pledged to give more weight to emerging economies in the voting system.

After a very dynamic first quarter, the French economy is expected to mark time before rebounding and reaching 2.1% over the year, exceeding the government's objective, according to INSEE. French managers come to the business district of La Défense

French growth should undergo a brake in the second quarter before rebounding and reaching 2.1% over the year, slightly more than the government's objective, according to new estimates published by INSEE on Thursday. After a very dynamic first quarter in which gross domestic product (GDP) grew by 1%, the French economy would have stalled, says the National Institute of Statistics in its first forecast for the whole of the 2011.

As in other advanced economies, France has experienced the full number of shocks, such as rising commodity prices, the consequences of the earthquake in Japan, or more restrictive economic policies. However, these shocks will be "temporary" said Sandrine Duchêne, head of the economic situation of INSEE. And factors should slow fade in the second half.

After an expected growth of only 0.2% in the second quarter, activity should then bounce back with an expected GDP growth of 0.5% during the last two quarters of the year. Over the whole of 2011, growth would reach 2.1%, slightly higher than the official government forecast (2%).

This performance is consistent with the euro area average. As usual, Germany will remain the locomotive of the region, INSEE provides a 3.7% growth for the country in 2011.Conversely, Spain (+0.7%) and Italy (+0.8%) will be left behind.

Unemployment folds

Over the period, the labor market should continue to improve in France, total employment grew more strongly than in 2010. Unemployment, which stood at 9.2% of the workforce in the first quarter, fell back slightly by the end of the year to 9%.

Household consumption, even in the first quarter supported by a "drag effect" of scrapping, related to the timely delivery of vehicles ordered in late 2010, should fall back sharply in the second quarter, "backlash". She then rebound in the second half, however, at a rate slightly lower than before the crisis, according to Insee.

Traditional engine of French growth, consumption would increase by 1.2% over the year, after rising 1.3% in 2010.Business investment will remain dynamic, while the trade would have a broadly neutral impact on growth.

Household income would be supported by rising employment and wages. The decision to pay a premium to employees in companies distributing dividends is expected to contribute to this increase, according to INSEE.

Inflation of 2.2% trim on the purchasing power

But this acceleration will be partially eroded by the pursuit of expected inflation. To INSEE, the rise in food prices, already substantially since March, is expected to continue in effect until December. On average, inflation should be 2.2% throughout this year, a level higher than the 1.8% forecast by the government.

Thus, household disposable income, which should accelerate in 2011 (+3.3% after +2.0%), would contreblancé by higher inflation.Overall, the purchasing power of households rise by only slightly faster in 2011 than in 2010 (1% after +0.8%).

A greater than expected weakness in the U.S. economy or boost pressure on sovereign debt, however, could darken the picture, warns INSEE. Conversely, if the French households decide to save less this year, would benefit just the consumer, so to growth.