Economic Calendar

Saturday, June 9, 2012

Papandreou Sees Greece Staying in Euro as Austerity Eased

By Sara Eisen and Caroline Salas Gage - Jun 9, 2012 4:27 AM GMT+0700

Former Greek Prime Minister George Papandreou predicted that Greece will stay in the euro zone and that the austerity measures required by the nation’s bailouts might be eased.

George Papandreou, Greece's prime minister, in Thessaloniki, Greece. Photographer: Kostas Tsironis/Bloomberg

June 8 (Bloomberg) -- Former Greek Prime Minister George Papandreou says that world leaders must fix the crisis in Greece in order to prove Europe's other market problems can be fixed, too. He spoke with Bloomberg TV's Sara Eisen. (Source: Bloomberg)

Former Greek Prime Minister George Papandreou speaks during an interview in New York on June 8, 2012. Photographer: Louis Lanzano/Bloomberg

“We can have some modifications to the program,” Papandreou said in an interview with Bloomberg Television. “Whether we can stretch out the fiscal adjustment for another year or so will take a little bit of pain out.”

Greece on June 17 will hold its second national election in six weeks, a vote that may determine whether the country stays in the euro area. The inconclusive May 6 ballot showed gains for parties, led by Syriza, that oppose terms of the country’s bailouts from the European Union and the International Monetary Fund.

Papandreou, 59, said some of the claims being made by Greek politicians about reneging on the budget-cutting accords should be taken with “a grain of salt,” and they are creating unrealistic expectations for overhauling the agreements. Papandreou said he hopes whoever wins the elections “acts responsibly,” and he didn’t predict the outcome.

Greece has “a few weeks” before its government runs out of money so this is “a make-or-break period,” Papandreou said. A Greek exit from the euro would result in hyperinflation and bank runs as well as lower growth and wages, he said.

Bloomberg Television’s Inside Track will air the full interview on June 11 at 6 a.m. in New York.

Obama Comments

President Barack Obama said today it is in “everybody’s” interest for Greece to stay in the euro, and he warned Greece that its hardships will increase if the nation exits.

U.S. stocks rose, driving the Standard & Poor’s 500 Index to the biggest weekly gain since December, while oil and the euro fell as investors awaited weekend talks by European finance officials for news of a potential bailout of Spain.

The Standard & Poor’s 500 Index advanced 0.8 percent to 1,325.58 at 4 p.m. New York time, extending its rally this week to 3.7 percent. It had fallen as much as 0.6 percent today.

Oil for July delivery fell 72 cents, or 0.8 percent, to settle at $84.10 a barrel on the New York Mercantile Exchange. The euro weakened 0.5 percent to $1.2500 after Spain’s credit ranking was cut three steps by Fitch Ratings yesterday.

Spain is poised to become the fourth country in the 17 nation euro-area to require emergency assistance as the currency bloc’s finance chiefs plan weekend talks on a potential aid request to shore up the nation’s lenders.

Spanish Banks

“We have to find a way to recapitalize the Spanish banks,” Papandreou said. Politicians must make “decisions in time to calm the market,” and “can’t be behind the curve this time.”

Papandreou, whose father founded his Socialist Pasok Party in 1974, stepped down as prime minister in November and helped put together a new government to bridge differences with European Union leaders and officials after his proposal of a referendum on the terms of Greece’s second European bailout roiled markets.

“I did all that I could do,” Papandreou said, adding the “personal costs” were “worth it” to serve his country. “Now it’s up to the next government to take this package and run with it.”

To contact the reporters on this story: Sara Eisen in New York at; Caroline Salas Gage in New York at

To contact the editor responsible for this story: Chris Wellisz at


S&P 500 Caps Best Week in 2012 Amid Optimism on Spain

By Rita Nazareth - Jun 9, 2012 3:42 AM GMT+0700

U.S. stocks rose, giving the Standard & Poor’s 500 Index its biggest weekly rally in 2012, on optimism that weekend discussions among European finance officials may result in a bailout for Spain to shore up its lenders.

Traders work at the New York Stock Exchange. Photographer: Scott Eells/Bloomberg

June 8 (Bloomberg) -- Stocks fell, the euro declined and oil headed for the longest weekly losing streak in 13 years after Federal Reserve Chairman Ben S. Bernanke damped expectations for monetary stimulus and German exports dropped. U.S. Treasuries and the yen rallied. (Source: Bloomberg)

June 8 (Bloomberg) -- Michael Aronstein, the president of Marketfield Asset Management, talks about investment strategy and stock market outlook. Aronstein speaks with Betty Liu, Dominic Chu and Josh Lipton on Bloomberg Television's "In the Loop." (Source: Bloomberg)

Wal-Mart Stores Inc. (WMT), JPMorgan Chase & Co. and Intel Corp. (INTC) advanced at least 1.8 percent to pace gains among the biggest companies. Facebook Inc. (FB), the operator of the world’s largest social network, climbed 3 percent after researcher ComScore Inc. suggested that marketers can use the site effectively to spur purchases. Alpha Natural Resources Inc. (ANR) retreated 2.6 percent as the nation’s second-biggest coal producer said it is shutting mines in Kentucky and closing U.S. regional offices.

The S&P 500 advanced 0.8 percent to 1,325.66 at 4 p.m. New York time, reversing an earlier decline of as much as 0.6 percent. It rallied 3.7 percent this week. The Dow Jones Industrial Average increased 93.24 points, or 0.8 percent, to 12,554.20. About 5.8 billion shares changed hands on U.S. exchanges today, or 15 percent below the three-month average.

“The risk-on trade emerged,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “There’s more of a conviction that something is going to happen with Spanish banks that’s going to be positive. Anything that could address the situation in a favorable way could have a positive impact.”

European Central Bank Vice President Vitor Constancio said today that a Spanish request is “awaited” and will be “exclusively directed at the recapitalization of banks.” The bid may come as soon as tomorrow when finance ministers hold a conference call, according to a person familiar with the plans who declined to be identified.

Economic Data

Earlier today, U.S. equities joined a global slump as German exports dropped in April for the first time this year as weaker global growth curbed demand. French business confidence and Italian output also declined. The trade deficit in the U.S. narrowed in April as a drop in imports overshadowed the first decline in exports in five months.

“Short-term investors aren’t enamored with risk,” said Lawrence Creatura, who helps oversee $363.6 billion as a Rochester, New York-based fund manager at Federated Investors Inc. “The economic data coming out of Europe just served as a reminder that all is not well yet.”

The S&P 500 rallied this week as China cut interest rates and European Central Bank President Mario Draghi said officials stand ready to act. Most stocks fell yesterday as an early gain fizzled after Federal Reserve Chairman Ben S. Bernanke said the central bank will assess the economy before deciding if more stimulus is needed.

Biggest Gains

Telephone, financial and technology shares had the biggest gains among 10 groups in the S&P 500 today. Wal-Mart Stores, the world’s largest retailer, rose 3.6 percent to $68.22. Intel, the biggest chipmaker, added 1.8 percent to $26.41. JPMorgan advanced 2.7 percent to $33.68.

Facebook rose 3 percent to $27.10. Companies marketing to Facebook users who have signaled they “like” a business or have mentioned a brand in a post can have a “a statistically significant positive lift on people’s purchasing,” ComScore said in a blog post. The findings counter a Reuters/Ipsos poll earlier this week that showed sagging interest in the site and a minority of users being influenced by advertising when deciding what to buy.

Chesapeake Energy Corp. (CHK) rallied 2.9 percent to $18.36. The U.S. energy explorer, which is facing a $22 billion cash shortfall because of falling natural-gas prices, agreed to sell its pipeline interests to Global Infrastructure Partners for more than $4 billion.

Internal Probe

Separately, shareholders rejected the re-election of two directors involved in the internal probe of Chief Executive Officer Aubrey McClendon’s personal finances.

Navistar International Corp. (NAV) advanced 18 percent to $28.36. Carl Icahn disclosed he boosted his stake in the maker of International brand trucks.

Quiksilver Inc. (ZQK) climbed 12 percent to $2.74. The maker of clothing for skateboarders and surfers climbed after avoiding a wipeout in its European sales. It posted second-quarter revenue growth in constant currency in the region while rivals reported declines.

Alpha Natural Resources dropped 2.6 percent to $9.32. Operations will end at eight mines in Kentucky, including four owned by affiliates and four contract facilities, and production will be cut at others. The moves will reduce thermal-coal shipments by 2 million tons this year and 4 million tons in 2013, Alpha said. About 150 jobs will be eliminated.

Analyst Downgrade

NetApp Inc. (NTAP) retreated 3.1 percent to $30.33. The seller of hardware and software for storing data was downgraded at Barclays Plc. The share-price estimate is $34.

McDonald’s Corp. (MCD) dropped 0.7 percent to $87.75. The world’s largest restaurant chain said sales at stores open at least 13 months rose 3.3 percent globally last month, falling short of analysts’ estimates, as sales declined in Japan and China.

Nasdaq OMX Group Inc. persuaded Kraft Foods Inc. (KFT) to move its listing from the New York Stock Exchange, scoring the largest-ever company to switch markets three weeks after it botched Facebook’s initial public offering.

To contact the reporter on this story: Rita Nazareth in New York at

To contact the editor responsible for this story: Nick Baker at


I’ll Have Another Retired From Racing After Belmont Scratch

By Mason Levinson and Eben Novy-Williams - Jun 9, 2012 5:33 AM GMT+0700

I’ll Have Another was scratched from the Belmont Stakes and retired from racing a day before he was to try to become the first Triple Crown winner since 1978, his trainer and owner said.

The horse, which won the Kentucky Derby and Preakness Stakes, the first two races in the Triple Crown, had swelling in his left front leg yesterday, trainer Doug O’Neill said. After looking “perfect” this morning, the swelling returned during a training session and a scan showed “the start of some tendinitis,” the trainer said.

Mario Gutierrez aboard I'll Have Another (9) winning the Preakness at Pimlico Race Course. Photographer: Bill Frakes/Sports Illustrated/Getty Images

June 8 (Bloomberg) -- Bloomberg's Stephanie Ruhle reports that I’ll Have Another is out of the Belmont Stakes, ending the chance for thoroughbred racing’s first Triple Crown champion in 34 years, trainer Doug O’Neill said today. She speaks on Bloomberg Television's "InBusiness." (Source: Bloomberg)

“We were all a bit shocked, but we have to do what’s best for the horse,” J. Paul Reddam, the colt’s owner, said at a news conference at Belmont Park in Elmont, New York. “And if he can’t compete at the top level, he’s done enough.”

The end of I’ll Have Another’s Triple Crown bid might cost Reddam more than $5 million in the horse’s value, according to Baden P. “Buzz” Chace, a bloodstock agent who buys and sells horses for clients.

O’Neill said the sudden turn of events on the track was “far from tragic, but it is very disappointing.”

“Obviously, he’s done so much that it was unanimous between the Reddams, my brother and I, and everyone in the barn to retire him,” the trainer said at the news conference.

Sponsor Problems

The rapid switch from a shot at the sport’s top prize to the end of I’ll Have Another’s career underscores how difficult horse racing sponsorship can be, said Bob Dorfman of Baker Street Advertising in San Francisco.

“The fact that the horse has been scratched from the Belmont -- the vagaries of the sport -- is yet another reason why there are minimal endorsement opportunities for thoroughbreds and their handlers,” Dorfman said.

I’ll Have Another won the Kentucky Derby on May 5 and the Preakness Stakes two weeks later. He was installed this week as the 4-5 morning-line favorite in tomorrow’s Belmont, trying to become the first Triple Crown champion since Affirmed in 1978. Dullahan is now the 9-5 favorite, followed by Union Rags at 3-1.

Dullahan, the third-place runner in the Derby last month, had 5-1 odds before I’ll Have Another was scratched. Union Rags originally had 6-1 odds.

Jockey Mario Gutierrez will be aboard I’ll Have Another tomorrow to lead the post parade for the $1 million race.

It’s the 12th time since Affirmed swept the series that a horse had entered the Belmont after winning the first two legs. The most recent was in 2008, when Big Brown was pulled up in the race by jockey Kent Desormeaux and finished last.

The last horse to win the Kentucky Derby and Preakness and not start in the Belmont was Bold Venture in 1936. The horse was pulled because he bowed a tendon during training at Belmont Park.

Large Crowd

The track had expected a crowd of 120,000 for tomorrow’s card. The New York Racing Association had settled a contract dispute with union workers this week who had threatened to strike and jeopardize the running of the 1 1/2-mile race.

“Hopefully they’ll still have a full house,” O’Neill said in an earlier interview on Dan Patrick’s radio show, where he broke the news of the Belmont scratch. “I hope I’ll Have Another’s defection doesn’t shrink that too much. I’m sure the NYRA people probably want to slap me around a little, but I’ve just got to do what’s in the best interest of the horse.”

NBC Viewers

Without I’ll Have Another, the race figures to draw fewer viewers on NBC, which said it is “working now to adjust the game plan accordingly.”

“The Belmont Stakes is still an iconic event on the sports schedule, and the NBC Sports Group broadcasts will treat it as such,” the Comcast Corp. network said in an e-mailed statement.

NYRA Chairman C. Steven Duncker issued a statement expressing his disappointment for everyone who wanted to see I’ll Have Another run.

Belmont Stakes Day’s 13 races will be run as scheduled, therefore all tickets are non-refundable, the NYRA said.

All advance wagers on the Belmont Stakes involving I’ll Have Another can by canceled at any mutuel window, the NYRA said. Once the race is declared official tomorrow, most tickets that were not canceled in advance will become refundable.

Advance wagers on the Pick 6 and Pick 4 using I’ll Have Another must be canceled in advance to avoid the automatic assignment of the post-time favorite in place of I’ll Have Another in the race, the NYRA said.

“It’s very disappointing news obviously, but the connections of I’ll Have Another are to be commended for placing their horse’s best interests first and foremost,” Alex Waldrop, president and chief executive officer of the National Thoroughbred Racing Association, said in a statement. “The health and safety of the thoroughbred must always be the paramount consideration regardless of any other circumstances.”

Sports books in Nevada said the news would drastically cut betting interest in the Belmont.

“It’ll be like booking the fifth race at Finger Lakes,” Jimmy Vaccaro, the director of sports operations at Lucky’s Race and Sports Book in Las Vegas, said in a telephone interview. “It’s truly sad. What we miss now is the people who wouldn’t be horse bettors coming out to try to watch history.”

Pending Suspension

O’Neill is facing a 45-day suspension starting no sooner than July 1 for a California racing violation. He was sanctioned after excessive levels of total carbon dioxide were found in a sample from Argenta, a filly who finished eighth in the sixth race at Del Mar Racetrack on Aug. 25, 2010. Under California rules, the trainer is accountable for ensuring a horse’s condition.

O’Neill twice has been found guilty of administering a banned combination of substances that is called a milkshake at a California racetrack, the New York Times said last month. The newspaper also said its analysis found O’Neill-trained horses break down or show signs of injury at more than twice the rate of the national average.

The 3-year-old chestnut colt may have turned $35,000 into $10 million for his owners with even more money spread around the industry had he won tomorrow’s race, Chace, the bloodstock agent, said before I’ll Have Another was retired. The valuation is closer to the lower end of $3 million to $5 million now, Chace said today.

‘Don’t Run’

“It was better he did not run if he wasn’t 100 percent,” Chace said in a telephone interview. “If he had lost the Belmont, it would have hurt him more had he gone to stud.”

Doug Cauthen, owner of Doug Cauthen Thoroughbred Management LLC, said “he’s probably now a $4 to $6 million horse.”

The injury was “absolutely not” life threatening if I’ll Have Another had run tomorrow, according to Larry Bramlage, a veterinarian who works with the Triple Crown races and had discussed the situation with Jim Hunt, the colt’s vet. He said he hadn’t examined the horse himself.

“They don’t break down with this injury and lose their ability to support weight,” Bramlage said in an interview at Belmont Park. “The tendon just gets more inflamed.”

Retirement Move

The time required to recover from the injury made retirement a sensible choice, Bramlage said.

“It takes a while for this injury to heal, it takes almost a year,” he said. “So if he’s going to come back and race, it’s going to be a year. Now you have to give up next year’s breeding season on the chance that he might make it back to the races and do really well for the year after that.”

Bought by Reddam as a 2-year-old, I’ll Have another will still be able to command as much as $40,000 in stud fees, Chace said.

With breeding season over, Reddam said he hasn’t begun to make plans for I’ll Have Another’s post-racing life.

“It’s not an emergency to talk about where he’s going to stand or what he’s going to stand for,” the owner said.

Eleven horses have won the Triple Crown, starting with Sir Barton in 1919. The others are the father and son duo of Gallant Fox and Omaha in 1930 and 1935, War Admiral (1937), Whirlaway (1941), Count Fleet (1943), Assault (1946) Citation (1948), Secretariat (1973), Seattle Slew (1977) and Affirmed.

To contact the reporters on this story: Mason Levinson in New York at; Eben Novy-Williams in New York at

To contact the editor responsible for this story: Michael Sillup at