Indian industrial production unexpectedly contracted in March as weaker domestic demand and sliding exports hurt the economy, undermining the central bank
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Japan may cancel its multibillion-dollar plans to buy dozens of F-35 stealth fighter jets from the United States if prices continue to rise or delays threaten the delivery date, its defense minister said Wednesday.
Defense Minister Naoki Tanaka said failure by manufacturer Lockheed Martin to deliver on time at current price levels would force Tokyo to consider switching to a different aircraft.
Japan announced late last year that it would purchase 42 F-35 jets in a deal expected to cost more than $5 billion. The next-generation fighter is set to become the centerpiece of the U.S. military and allied air forces around the world, but the program has been plagued by delays and its cost overruns.
Japan hopes to receive its first F-35s in 2016, at a cost of about $120 million per plane.
“I think we will reach a formal agreement before the summer,” Tanaka told a session of Parliament. “If we cannot reach an agreement at that time, this would create a great deal of uncertainty for our national defense and preparedness. We would naturally have to view the possibility of canceling our plan or selecting another aircraft.”
Lockheed Martin, in conjunction with Northrop Grumman and BAE Systems, is building 2,400 F-35s for the U payday advance low fees.S. as well as partner nations. But the cost of the program has jumped from $233 billion to $385 billion. Some estimates suggest that it could top out at $1 trillion over 50 years.
Lockheed is building three versions of the F-35 _ one each for the Navy, Air Force and Marine Corps. The plane would replace Cold War-era aircraft such as the Air Force F-16 fighter and the Navy’s F/A-18 Hornet.
Last January, then-Defense Secretary Robert Gates had put the Marines’ version of the aircraft on a two-year probationary period because of “significant testing problems.”
His successor, Leon Panetta, ended the probation late last month.
But the Pentagon has said it will slow its purchases of the fighter to save money, which has raised concerns abroad. Slowed production could lead to delays in delivery to foreign buyers, and could make the planes more expensive to produce.
German business confidence probably rose to the highest in seven months in February as progress in taming Europe
Technology analyst John Kinnucan was arrested Friday on allegations of trading on information about many of the nation’s leading tech companies, resulting in illicit gains of nearly $110 million.
Kinnucan faces both criminal and civil charges. He was arrested at his Oregon home and is awaiting transfer to New York, according to the U.S. Attorney’s office for the Southern District of New York, which is conducting an ongoing probe into insider trading. The Southern District includes the nation’s major stock exchanges and is taking the lead on insider trading probes nationwide.
In January, seven hedge fund managers and investment professionals were indicted in New York, charged with sharing insider information when making trades. Last year, Raj Rajaratnam, founder of the Galleon Group hedge fund, was found guilty and sentenced to 11 years in prison and fined a record $92.8 million. The SEC alleges the Galleon case resulted in $91 million in illicit gains, less than in Kinnucan’s case.
The Securities and Exchange Commission alleges that Kinnucan befriended and rewarded insiders at various technology companies, including Apple (, Fortune 500), Dell (, Fortune 500), Fairchild Semiconductor (), Marvell Technology (), and Western Digital (, Fortune 500), in order to gain information, which the SEC claims he then sold to clients, primarily portfolio managers and analysts at prominent hedge funds and investment advisers.
"The information he obtained and passed along to clients was not the result of research. It was inside information Kinnucan bought from company insiders," said Janice Fedarcyk, FBI assistant director-in-charge. "That kind of information beats research every time. The only problem is it isn’t legal."
In late 2010, Kinnucan took the unusual step of announcing on TV and in an e-mail to clients that he had been contacted by FBI agents, whom he mocked as "fresh-faced eager beavers."
He said he was approached at the end of October 2010 and asked to wear a wire in an insider-trading investigation targeting certain hedge funds. He shut down his Portland, Ore.-based firm, Broadband Research Corp., soon after that disclosure. Kinnucan and members of his former firm could not be reached for comment Friday.
The U.S. Attorney’s office and the SEC would not comment on Kinnucan’s actions in 2010.
Optimism over upcoming U.S. jobs figures helped stocks and the euro to rally on Friday despite further evidence that the 17-nation eurozone is heading for recession.
Following a run of fairly strong U.S. economic data, investors are increasingly confident that the world’s largest economy is over a soft patch from last summer, helping to offset the global economic impact wrought by Europe’s ongoing debt crisis.
Figures released Friday provided further evidence that the eurozone is heading for a recession. Eurostat, the EU’s statistics office, said retail sales dropped 0.4 percent during the month, in contrast to expectations for an increase of the same amount.
The December data reinforced expectations that the eurozone contracted during the fourth quarter of the year. Eurostat is due to publish its first estimate for the quarter on Feb. 15.
The highlight of the day in the markets will be the monthly U.S. nonfarm payrolls data. Expectations are that the U.S. economy generated around 150,000 jobs during January. Though that is unspectacular for an economy recovering from its worst recession since World War II, the amount of jobs being created is up from levels seen just a few months ago.
“Volatility is likely to remain low until these figures are out, with traders opting to sit and await news rather than heavily commit themselves,” said David Jones, chief market strategist at IG Index.
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,823 while Germany’s DAX rose 0.4 percent to 6,682. The CAC-40 in France was 0.5 percent higher at 3,394.
Wall Street was also poised for a solid opening, though how it actually performs will hinge on the payrolls data, which are released an hour before the bell free credit score. Dow futures and the S&P 500 futures were both up 0.2 percent.
The euro was also garnering support alongside stocks _ when appetite for risk is elevated, the euro often finds favour. It was trading 0.3 percent higher at $1.3177 despite the retail sales disappointment.
The focus on the U.S. has proved a welcome diversion for some traders from monitoring the daily grind of Europe’s debt crisis, where much hinges on whether Greece can secure a deal with its private creditors, as is anticipated. A deal is expected soon, though that has been the official line for a few weeks.
Earlier in Asia, the picture was mixed.
Japan’s Nikkei 225 index fell 0.5 percent to close at 8,831.93 but Hong Kong’s Hang Seng ended marginally higher at 20,756.98.
Mainland Chinese shares extended gains fueled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8 percent to 2,330.41 while the Shenzhen Composite Index added 1.5 percent to 878.29.
Oil markets were also relatively subdued. Benchmark oil for March delivery was up 40 cents to $96.76 per barrel in electronic trading on the New York Mercantile Exchange.
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Pamela Sampson in Bangkok contributed to this report.
Manufacturing in India and China improved in December, a sign the world
Yemeni President Ali Abdullah Saleh was in Saudi Arabia on Wednesday to sign a U.S.-backed power transfer deal mediated by Gulf Arab states to resolve the impoverished country’s crisis, Yemen’s state television reported.
Saleh has repeatedly promised to sign the Gulf-brokered agreement, only to change his mind every time. Under the deal, Saleh would step down and transfer power to the vice president in exchange for immunity from prosecution.
The TV said Saleh arrived in the Saudi capital Riyadh on Wednesday morning but did not say when the deal would be signed. It said that along with Gulf Arab representatives who sponsored the agreement, European and American envoys would also attend the signing.
Saleh has clung to power despite an 8-month-old uprising, mass protests calling for his ouster and a June assassination attempt that left him badly wounded and forced him to travel to Saudi Arabia for more than three months of hospital treatment.
But things appeared to be shifting on Tuesday, when the U.N. secretary-general’s envoy to Yemen, Jamal bin Omar, said all parties had agreed on a plan that would have Saleh step down.
“All parties agreed today on the Gulf initiative and the implementation of its mechanism,” bin Omar said after meetings with Yemen’s vice president, Abed Rabbo Mansour Hadi, in Sanaa.
Security in Yemen has unraveled amid the uprising against Saleh’s 30-year reign. The situation is particularly bad in the south, where al-Qaida militants _ from what is perhaps the world’s most active branch of the terror network _ have taken control of entire towns, using the turmoil to strengthen their position.
The unarmed protesters have held their ground with remarkable resilience, flocking to the streets of Sanaa and other Yemeni cities and towns to demand reforms from the autocratic government and braving a violent crackdown by government forces that has killed hundreds.
But their uprising, inspired by other Arab revolts in the region that saw longtime rulers of Egypt and Tunisa go, has at times been hijacked by Yemen’s two traditional powers _ the tribes and the military _ further deepening the country’s turmoil.
Breakaway military units and tribal fighters have been battling in Sanaa with troops loyal to Saleh, in fighting that has escalated in recent months.
An impoverished nation of some 25 million people, Yemen is of strategic value to the United States and its Gulf Arab allies, particularly Saudi Arabia. It sits close to the major Gulf oilfields and overlooks key shipping lanes in the Red and Arabian seas.
Chrysler is counting on a new Jeep sport utility vehicle and its strong brand name to help withstand uncertainty in the European auto market and expand into new markets in China and Russia, the automaker’s chief executive said Wednesday.
The company announced plans to spend $500 million at its Ohio assembly complex that will make the new model and add 1,100 jobs by late 2013. The expansion is part of a $1.7 billion investment to build the new Jeep.
Chrysler CEO Sergio Marchionne said Jeep is becoming the star of its European market and that sales have been doubling.
“It’s the best brand Chrysler owns by a long margin,” he said. “It’s got a glorious history.”
Italian automaker Fiat SpA, which now controls Chrysler, has been hit hard this year by slumping overall sales in Europe. It has been turning more toward business in the United States and Brazil, said Marchionne, who is CEO of both companies.
He said next year will be even worse in Europe. “The majority of the growth and expectations around Fiat are unfortunately outside the European context,” he said
Marchionne said that he’s confident the leaders forming the Italy’s new government can help it avoid financial disaster, but he added that instability there could influence where it locates its new headquarters when Fiat combines with Chrysler.
He is working toward bringing the two automakers together and faces the thorny political issue of where to base the company. The instability in Italy can’t be overlooked, he said Wednesday.
“I would be lying to you if I told you it didn’t,” he said. “It’s one of the things we’ll look at. That’s not to say the current situation would force us to move away from Italy. We’re committed to the industrial back bone of the country.”
Premier Mario Monti formed a new Italian government on Wednesday puts bankers, diplomats and business executives in charge instead of politicians. The former European Union competition commissioner said economic growth is a top priority and will put out an emergency plan Thursday
“Monti has all of the qualities to get this done,” Marchionne said. “It’s in the interest of every Italian to get behind him.”
Whether the country can recover soon depends on its political forces, he said. “If they do, it can be done relatively quickly,” he said. “The execution may take longer, but the plan can be put in place.” `
Sales of the stylish Fiat 500 mini car have been far below expectations in the United States since its debut in March, Marchionne said. It’s Fiat’s first vehicle in the U.S. since it pulled out of the market in 1983.
He blamed the low sales on a lack of dealerships selling the Fiat and said more are coming on line.
While Fiat is struggling, Chrysler is moving toward its first annual profit since 2005 behind strong third quarter sales of its new or revamped Chrysler, Dodge, Jeep and Ram cars and trucks.
Marchionne thinks the Jeep brand can continue to grow worldwide behind its unique history. Originally made for the military, workers in Toledo have been producing Jeeps since 1941.
“The horrible thing about Jeep is it hasn’t been exploited internationally,” he said. “It’s off-road capabilities are unique in the marketplace and we need to preserve that going forward.”
No decision has been made on what the new model will be called. Marchionne said it will be more technologically advanced than the Jeep Grand Cherokee.
The assembly plant in Ohio that now has 1,800 workers makes the Jeep Wrangler and Liberty along with the Dodge Nitro and will be central to the company’s future and its SUV exports, Marchionne said.
It’s likely the plant will build more vehicles in the coming years, he said. He also didn’t rule out expanding Wrangler production at the plant if sales take off outside the U.S.
Greece’s embattled prime minister and main opposition leader agreed Sunday to form an interim government to ensure the country’s new European debt deal and oversee early elections, capping a week of political turmoil that saw Greece facing a catastrophic default and threatening its euro membership.
Greek leaders had been anxious to end a severe political crisis with some positive result before Monday, when the country heads to a meeting of eurozone finance ministers in Brussels. The initial agreement, which will see Prime Minister George Papandreou step down, came after a week of drama sparked by his announcement he was taking the debt deal to a referendum. He withdrew that plan Thursday after intense opposition from European leaders and his own Socialist lawmakers, many of whom called for him to resign.
Papandreou “has already stated he will not lead the new government,” the statement from the president’s office said.
He is to meet again Monday with opposition leader Antonis Samaras to seek agreement on who will head the new government and who will be included in its Cabinet, the president’s office said.
A planned meeting with the leaders of all political parties represented in parliament, which was to take place Monday evening, was canceled after parliament’s two leftist parties refused to attend, the office said.
The statement came after a late-night meeting between Papandreou and Samaras called by President Karolos Papoulias to end a two-day deadlock. Direct talks had failed to get off the ground as Papandreou had agreed to step aside but only after power-sharing talks settled on a new government makeup, and Samaras insisted he wanted snap elections and would not start negotiations unless Papandreou resigned first.
An opposition conservative party official said Samaras’ party is “absolutely satisfied” with the outcome of the talks and that party officials were to hold meetings late Sunday night with Finance Minister Evangelos Venizelos and his advisers to discuss how long it would take to finalize the new debt deal and when elections could be held.
“Our two targets, for Mr. Papandreou to resign and for elections to be held, have been met,” the official said, speaking on condition of anonymity to discuss the process.
The crisis was sparked after Papandreou’s shock announcement on Oct. 31 that he wanted to put a new European debt deal aimed at rescuing his country’s economy to a referendum. That plan caused an uproar in Europe, with the leaders of France and Germany saying any popular vote in Greece would decide whether the country would remain in the euro direct payday lenders. European officials also said the country would not receive the vital euro8 billion euro installment of its existing euro110 billion bailout until the uncertainty in Athens was over.
Papandreou’s announcement also spooked international markets, leading stock markets to tumble and led to calls in Greece for Papandreou’s resignation _ even from among his own Socialist lawmakers and ministers _ with many saying he had endangered Greece’s bailout.
The prime minister withdrew the referendum plan on Thursday, after Samaras indicated his party would back the new debt deal, which was agreed upon after marathon negotiations in Europe on Oct. 27.
Greece has been surviving since May 2010 on its initial bailout. But its financial crisis was so severe that a second rescue was needed as the country remained locked out of international bond markets by sky-high interest rates and facing an unsustainable national debt increase.
The new European deal, agreed on by the 27-nation bloc on Oct. 27 after marathon negotiations, would give Greece an additional euro130 billion ($179 billion) in rescue loans and bank support. It would also see banks write off 50 percent of Greek debt, worth some euro100 billion ($138 billion). The goal is to reduce Greece’s debts to the point where the country is able to handle its finances without relying on constant bailouts.
Greece’s lawmakers must now approve the new rescue deal, putting intense pressure on the country’s leaders to swiftly end the political crisis so parliament can convene and put the debt agreement to a vote.
“We know that there can be no elections now,” Papandreou had said during an earlier emergency Cabinet meeting, noting that snap polls would delay the approval of the new debt deal. “This cooperation, however, is necessary and will be beneficial for the climate in our country and internationally.”
In return for bailout money, Greece was forced to embark on a punishing program of tax increases and cuts in pensions and salaries that sent Papandreou’s popularity plummeting and his majority in parliament whittled down from a comfortable 10 seats to just three.
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Associated Press writer Nicholas Paphitis in Athens contributed to this report.
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