Skeptical kids can doubt whether Santa Claus exists. But for stock-market statisticians, there's not much debate: The year-end lift known as the Santa Claus rally is no myth.

The stock market typically posts modest, but reliable, gains in late December into the beginning of early January.

"It's pretty much like clockwork," says Jeff Hirsch, editor of the Stock Trader's Almanac, which tracks market trends. "And when it doesn't happen, it can be a very helpful warning of impending trouble."

This year the stock market began December in somewhat typical fashion with a stagnant first half of the month. The Standard & Poor's 500 Index is up just 0.6 percent so far in December, and the Dow Jones industrial average is down 0.2 percent.

That leaves room for the market to snap back by the end of the year, although stocks are still facing headwinds from lingering doubts about the economy as well as trepidation among investors about the huge gains logged so far this year. The S&P is already up 22 percent in 2009, the Dow 18 percent.

The entire period around the end of the year, though, has a bullish track record.

Consider:

&S226; November through January tends to be the best three-month span for stocks. Over the past four decades the average gain from Nov. 20 through the end of January has been 4.2 percent, or an annualized rate of 23 percent, according to James Stack, president of InvesTech Research in Whitefish, Mont.

&S226; December is the best single month, with the Standard & Poor's 500 stock index averaging a 1.6 percent gain. The first December after a bear market ends performs even better, averaging 3.1 percent.

&S226; The S&P has increased an average of 1.5 percent during the seven trading days that start with Christmas Eve and end with the first two days in January since 1950. That's the widely recognized period for the Santa Claus rally, as first identified in 1972 by Stock Trader's Almanac founder Yale Hirsch, Jeff's father.

&S226; Stocks went up in 12 of the last 15 of those year-end periods saving account payday loan.

To better understand what drives the Santa Claus rally, let's look at the variety of positive factors for the stock market that usually come together around this time of the year.

The holidays are the strongest retail season of the year, giving a boost to the economy while also generating positive headlines. Year-end investment reports also tend to offer upbeat outlooks for the coming year, and often plug hot stock picks just as investors are repositioning their portfolios.

And since lots of investors are already in a good mood this time of year anyway, more people tend to be buying rather than selling around the holidays.

"It's one of the most reliable rallies of the year," says Scott Marcouiller, senior equity strategist for Wells Fargo Advisers. "The probability is very high that we get a move up before the end of this year."

Also, investors who might normally sell stocks for tax purposes late in the year could be more likely to hold off this time around. Since this stock market rally is only nine months old, any gains from stocks bought this year would be considered short-term profits by the IRS. That would mean a much higher tax rate than gains on assets held for more than a year.

Even those who aren't interested in buying stocks during the holiday season would do well to keep an eye on the market. In years when there hasn't been enough enthusiasm for a Santa Claus rally, it's often been a sign that turmoil lies ahead.

After 1999, for example, when there was no Santa Claus rally, the market tanked in 2000. And a late-year drop two years ago was a forerunner to a disastrous 2008.

Some market experts take dim views of trends based on the calendar. But the Santa Claus rally still has plenty of believers on Wall Street.

Santa Claus rally could still show up this year

The cost of unwinding Bernard L. Madoff&S217;s estate for the benefit of his victims is climbing, with a total of almost $25 million in new fee requests filed on Monday with the federal bankruptcy court in Manhattan.

If the new bills are approved and added to those approved last summer, the legal tab for the first 10 months of the liquidation will rise to almost $40 million.

All the approved bills will be paid by the Securities Investors Protection Corporation, an industry-financed agency that oversees brokerage firm bankruptcies.

&S220;Contrary to what has mistakenly been reported by the news media and on blogs,&S221; none of these expenses will be paid with money that would otherwise go to reimburse victims, the primary fee application emphasized.

Therefore, it continued, the expenses will have &S220;absolutely no impact&S221; on the amount victims ultimately receive.

The fee applications were from Irving H. Picard, the court-appointed trustee for the Madoff estate; Baker &&8; Hostetler, his lawyers; AlixPartners, the consultant handling claims; a law firm handling Mr. Madoff&S217;s personal bankruptcy; and eight foreign law firms tracking assets overseas. The consultant and law firms also applied for $400,000 in out-of-pocket expenses.

Mr. Picard also submitted his second interim report to the court on his work as trustee, a 79-page review of developments in the case since Mr us fast cash. Madoff&S217;s arrest on Dec. 11, 2008.

In that report, Mr. Picard briefed the court on the status of 14 lawsuits he has filed to recover assets taken from Madoff accounts before the fraud collapsed. He also &S220;anticipates filing extensive additional litigation based on investigation conducted by the trustee&S217;s counsel and consultants,&S221; he said.

The new fee applications will be reviewed on Dec. 17 at a hearing before Judge Burton R. Lifland, who has already approved just less than $15 million in fees and expenses in the complex case.

All of the firms submitting fee applications to the court have agreed to a 10 percent discount from their usual rates, except for a firm in Gibraltar, which has discounted its rate by 20 percent. In addition, 20 percent of the approved payments will be held back until the conclusion of the liquidation, unless the court decides otherwise.

As of Oct. 31, SIPC had spent $557.6 million on the Madoff liquidation, $94. 2 million of which was for administrative expenses. That is more than the agency spent on all the other 321 liquidations it has handled since its creation in 1970.

Rising Bill in Unwinding of Madoff’s Assets

SAN FRANCISCO/LOS ANGELES (Reuters) – Wal-Mart Stores Inc (WMT.N) is helping "well over 1,000" of its apparel suppliers secure financing based on the strength of its own credit rating.

The program, outlined in a November 2 letter to suppliers, was designed to address concerns about liquidity, company spokesman John Simley said.

"We didn&&9;t want our suppliers to be in a position where they could not secure financing at an attractive rate," he said.

Under its "Supplier Alliance Program," an eligible supplier can go to a bank with a purchase order from Wal-Mart and the bank can arrange for financing based on Wal-Mart&&9;s strong financial position.

The retailer, which has a AA credit rating, said it has partnered with Wells Fargo & Co (WFC.N) and Citibank Inc (C.N) to provide the program.

"We&&9;re not underwriting and we&&9;re not extending our (credit) rating," he said.

Factors buy receivables -- or the right to receive money owed by retailers -- from suppliers at a discount so that those suppliers continue to have working capital.

But worries about the health of factors has heightened following the November 1 bankruptcy of CIT Group Inc (CITGQ easy payday loans.PK), a major player in the factoring industry.

"We know that many of our suppliers are dependent upon factoring and financing companies that are reportedly in financial distress," Wal-Mart wrote in its letter to supplies.

"We are contacting you as part of our effort to proactively minimize the exposure of our supplier base to the financial difficulties of any particular factoring source."

Wal-Mart&&9;s ultimate goal with the program though is to keep its own costs down.

"It gives us a more secure supply of the things we need to sell and, if the suppliers are getting a little bit better rate because their loan was negotiated on the strength of our financial position, we can lower our costs and that can be passed on in the form of lower prices," Simley added.

(Reporting by Nicole Maestri and Lisa Baertlein; editing by Leslie Gevirtz and Andre Grenon)

Wal-Mart helps apparel suppliers secure financing

WASHINGTON (Reuters) – Bank regulators closed Gateway Bank of St. Louis, in St. Louis, Missouri, and Prosperan Bank, of Oakdale, Minnesota, on Friday, the 118th and 119th U.S. bank to fail this year.

The Federal Deposit Insurance Corp said Gateway Bank of St Louis had &&6;27.7 million in assets and &&6;27.9 million in deposits. The bank&&9;s sole office will reopen on Saturday as a branch of Central Bank of Kansas City, Missouri, which assumed Gateway&&9;s assets bad credit payday advance.

The FDIC entered into an agreement with Alerus Financial NA, of Grand Forks, North Dakota, to assume all of Prosperan&&9;s &&6;175.6 million in deposits and about &&6;173.9 million of its &&6;199.5 million in assets.

(Reporting by Charles Abbott; editing by Carol Bishopric)

U.S. regulators close Gateway Bank, Prosperan Bank

HONG KONG &S212; Asian stock markets fell on Thursday as worries about the global economic recovery had investors eagerly awaiting the U.S. monthly jobs report that is due on Friday.

The Nikkei 225 stock average in Tokyo lost 1.2 percent with Canon and other exporters slipping as investors, prompted by a slightly stronger yen, locked in profits before the release of U.S. jobs data.

But Nissan Motor rose 1.1 percent after the automaker revised its annual outlook to a profit from a loss on Wednesday as soaring sales in China helped drive quarterly earnings beyond market expectations.

The benchmark Nikkei lost 113.63 points to 9,730.68 in late morning trading and appeared headed for its lowest close in a month. The broader Topix shed 0.7 percent to 874.78.

As expected, the Federal Reserve reiterated its intent to keep U.S. interest rates low on Wednesday. Though Wall Street rallied in response, it soon lost steam, with investors turning their eyes to jobs data to be published Friday.

&S220;A lot of investors are likely to be stay on the sidelines ahead of the jobs data, given that the September figures were worse than expected, and this is likely to keep stocks weak until then,&S221; said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Seoul shares turned lower after a brief rebound the day before, weighed down by caution over the pace of an economic recovery and as the firmer won hammered exporters like LG Electronics.

Investors are on the lookout for fresh economic data to restore confidence in stocks as they awaited the U.S. monthly jobs data and the Bank of Korea&S217;s monthly rate-setting meeting next week online pay day loans.

&S220;Investors are looking at the first batch of fourth-quarter indicators now that we are unsure about whether markets will remain solid in November or not,&S221; said Kim Seung-han, a market analyst at HI Investment & Securities.

The Korea Composite Stock Price Index dropped 1.1 percent to 1,563.07 points.

Shares in LG Electronics, the maker of mobile phones and flat-screen TVs, dropped 2.3 percent. Samsung Electronics shed 1.6 percent, after it told the Korea Exchange that it would make a $1.3 billion down payment to Qualcomm under a new licensing agreement.

Australian shares extended losses to be 0.5 percent lower on Thursday, with banks and miners mixed amid a market consolidation after strong gains between March and October.

The benchmark S&P/ASX 200 index fell 20.8 points to 4,519.3.

Major sectors like banks and miners saw mixed fortunes as the market continues its broad consolidation after posting strong gains between March and October.

Hong Kong stocks fell 0.4 percent, tracking losses in other Asian markets, although the Chinese property developer Evergrande Real Estate rose in its trading debut. Evergrande traded at 4 Hong Kong dollars versus its IPO price 3.50 dollars.

Shanghai stock markets rose 0.3 percent. The Taiex in Taipei edged up 0.07 percent amid concerns over shrinking trade volumes, but computer memory chip makers like Nanya Tech surged on positive October sales and an upbeat fourth-quarter outlook.

Reuters

Stock Markets Drop in Asia

HONG KONG, Oct. 23 (Xinhua) -- A survey on Friday showed 30 percent of business owners in Hong Kong expect a profitable fourth quarter, the most optimism seen since the financial turmoil erupted in the third quarter of last year.

The quarterly business tendency survey by the Hong Kong government's Census and Statistics Department found 30 percent respondents expect their business situation to be better in the fourth quarter over the third, with 17 percent forecasting it to worsen.

The proportion of respondents expecting their business situation in the fourth quarter to be better than the preceding quarter grew to 30 percent, as compared with 11 percent and 20 percent in the second and third quarter.

The retail sector has the most favorable outlook, followed by the financing and insurance sector. However, 38 percent of respondents in the construction sector expect business to fall.

Consistent with the expectations on the overall business situation, respondents in most of the surveyed sectors expect an increase in volume of business or output in the fourth quarter new car loans. Significantly more respondents in the retail sector, and financing and insurance sector, expect their volume of business to increase, as against those expecting it to decrease.

Respondents in most surveyed sectors have a favorable employment outlook for the fourth quarter. Yet more respondents in the import-export trade, and the wholesale and information and communications sectors, expect employment to fall.

More respondents in the real estate, retail, accommodation and food services, and transportation, storage and courier services sectors expect their selling price or service charge to rise, than those expecting it to go down. More respondents in the construction sector expect their tender price to decline, than those expecting it to rise.

HK business forecast better for Q4: survey

WASHINGTON &<51; The House Financial Services Committee voted on Thursday to create an agency to protect consumers from predatory lending, deceptive credit card terms and other abuses.

By a 39-to-29 vote, the panel moved regulatory legislation a crucial step forward on what was likely to be a long road toward final passage by the full Congress. President Obama, who has put financial regulation high on his domestic agenda, has said he wants a bill on his desk before the end of the year.

Barney Frank, the Massachusetts Democrat who heads the committee, said after the vote that he was optimistic of final passage either late this year or early in 2010. Mr. Frank said he was confident that the pillars of the legislation would remain intact.

&S220;No bill I&S217;ve ever had to share with anyone else has been everything I liked,&S221; Mr. Frank said, predicting that action in the House would create momentum in the Senate.

The House panel also approved, by voice vote, a provision to impose new regulations for credit cards by Dec. 1, instead of mid-February, after Democratic members complained that lenders had been raising interest rates in anticipation of the legislation.

Mr. Obama immediately issued a statement lauding the committee action. &S220;This bill has now passed a major hurdle, and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change,&S221; the president said.

&S220;They are doing what they always do &<51; descending on Congress, using every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made.&S221;

Later, the White House issued a statement calling passage of the bill by year&S217;s end essential. &S220;And we think a central part of regulatory reform is a consumer finance protection agency that looks out for, in all of this, normal, everyday consumers,&S221; said Robert Gibbs, the president&S217;s chief spokesman pay day advance.

Mr. Gibbs said he understood that Senators Christopher J. Dodd of Connecticut and Richard C. Shelby of Alabama, the chairman and ranking Republican, respectively, of the Senate Banking Committee, were working &S220;quickly and expeditiously to ensure financial regulatory reform is something that happens and is written into law.&S221;

The House committee vote on creating a consumer financial protection agency was mostly along party lines. Two Democrats voted against the measure (Travis Childers of Mississippi and Walt Minnick of Idaho) and one Republican voted for it (Michael N. Castle of Delaware).

The vote came a day after the committee voted to give the federal government the power to block states from regulating large national banks in some circumstances. That vote came after committee members reached a compromise on how much authority state regulators should have.

The Obama administration opposed any efforts by the federal government to pre-empt state officials from imposing more rigorous banking standards. A group of Democrats with close ties to the banking industry sought a complete federal pre-emption, which would have the effect of sharply limiting any state regulation of banks.

Under the compromise offered by two House Democrats, Melvin Watt of North Carolina and Dennis Moore of Kansas, and approved by voice vote, the Office of the Comptroller of the Currency, which regulates national banks, would be able to override the states, but only if it found that the state law &S220;significantly&S221; interfered with federal regulatory policies.

On another issue that has been hotly debated for months, the House Agriculture Committee on Wednesday approved a measure to regulate derivatives, the arcane financial instruments that have been linked to the current financial crisis. The Financial Services Committee approved a similar measure last week. (The agriculture panel has jurisdiction because many derivatives involve trading in farm commodities.)

Vote Backs a Financial Oversight Body

Hot News: SEC mulls ways to shed light on dark pools

NEW YORK &S212; Digital-era icons like Google and Twitter have made life more efficient &S212; and fun. But they also guzzle vast amounts of energy.

Scattered around the world are scores of data centers that sift through the endless streams of information that keep the Internet and office computers running. In the United States alone, those data centers accounted for 1.5 percent of the country&S217;s electricity use in 2006 &S212; more than the entire state of Massachusetts. And their power use could nearly double over five years, according to government reports.

Experts say that data centers present an obvious opportunity to improve efficiency.

&S220;It&S217;s becoming a big deal,&S221; said Dale Sartor, an energy efficiency expert at Lawrence Berkeley National Laboratory near San Francisco. He noted that in some cases, the energy costs of a server over its useful life of three or four years exceeded the initial cost of the server itself.

Some of the largest opportunities lie in the way data centers are kept cool. The buildings &S212; many of which are enormous &S212; must typically be kept below 80 degrees Fahrenheit (26.7 Celsius), so that the chips work at maximum efficiency. And that requires a great deal of energy.

The cooling equipment alone can consume 25 percent of the power that goes into a data center, said Christian Belady, an efficiency specialist at Microsoft. &S220;So if there&S217;s anything we can do to eliminate that, right there we use 25 percent less power.&S221;

Companies are innovating in this area, not least by using a tool that is ancient and free: the weather. Last month, Microsoft opened a data storage center in Dublin, which it said would take advantage of the Irish chill to achieve greater efficiencies. The system brings in air via large, high-up ducts that are controlled by valves, so it works somewhat like an attic fan, Mr. Belady said.

Nonetheless, he said, the company has backup systems in case the temperature spikes or the air is smoky.

Other Internet giants are making similar moves. In June, Yahoo announced that it would locate a data center in Buffalo, New York, to take advantage of the &S220;micro-climate&S221; to cool the servers entirely with outside air. And Google has a data center in Belgium where, according to Niki Fenwick, a spokeswoman, &S220;the local climate allows us to efficiently cool the data center without needing to use electricity to power chillers.&S221;

She noted, however, that &S220;not all Google data centers can be located in cold climates, because we want our tools to be as fast as possible.&S221; (In other words, the transmission of data can slow down over long distances.)

A number of companies, including Microsoft, Yahoo and Deutsche Telekom&S217;s T-Systems, are also locating their data centers near hydroelectric plants, allowing them to play up the virtues of renewable power (though hydropower is often less expensive than conventional power, at least in the United States, so there is a bottom-line reason too).

Traditionally, many data centers have been designed &S220;like a vault,&S221; according to Andres Carvallo, the chief information officer for Austin Energy, a utility in the heart of Texas&S217;s high-tech &S220;Silicon Hills&S221; that runs a rebate program to encourage companies to buy more efficient data center equipment no credit check payday loan. In other words, he explained, they had no access to the outside air.

That is changing. &S220;There&S217;s certainly a renaissance around designing a data center,&S221; Mr. Carvallo said.

Companies are indeed innovating. In Uitikon, Switzerland, I.B.M. is using the waste heat from a data center to keep a swimming pool warm.

Mr. Belady of Microsoft said that his company was pushing its suppliers to build servers that could work in higher temperatures &S212; up to 95 degrees Fahrenheit (35 Celsius) &S212; allowing Microsoft to build systems that use the outside air closer to the Equator.

Mr. Belady also emphasized the importance of pushing companies to measure the effectiveness of their power or energy usage, so that they could understand how much power or energy actually makes it to the number-crunching equipment, rather than going toward cooling or other auxiliary uses. Today, only about 10 percent of data center operators make such measurements, he estimated.

There is also innovation surrounding the management of the power supply to the chips, which goes through a number of transformations, said Mr. Sartor of Lawrence Berkeley National Laboratory. For example, he said, interruptible power supplies can often be bypassed, thus avoiding losses associated with converting power from alternating current to direct current and back to alternating current. In this regard, &S220;Europeans, like so many areas of efficiency, are typically ahead&S221; of the United States, he said.

Meanwhile, the need for more computations continues to grow. Mr. Sartor cited an example in his backyard: Whereas earlier this decade a supercomputer at Lawrence Berkeley National Laboratory used a few hundred kilowatts of power, its needs are projected to grow to 17 megawatts over the coming years.

&S220;We&S217;re talking about tens of millions of dollars to power our new supercomputer facility, and that starts catching management&S217;s concern,&S221; he said.

&S220;We are dramatically improving the efficiency of computation. The situation is that our appetite for computation is going up way faster than the efficiency is going up.&S221;

One piece of good news is that cooperation has increased in recent years among companies eager to tackle the data center efficiency problem. A number of cross-company consortiums, like the Green Grid, have sprung up (a symposium is being held this week in the Silicon Valley to discuss data center efficiency, with participation from several large multinational companies).

&S220;Everybody recognizes that we have to drive efficiency as an industry, not just as individuals,&S221; said Mr. Belady of Microsoft.

Green Inc. Column: Seeking Energy Savings at the Heart of the Internet

LONDON – European markets rose modestly Monday ahead of an expected solid start to the week on Wall Street and after upbeat survey data from the services sector helped offset the gloom from last week's worse than expected U.S. jobs data.

In Europe, the FTSE 100 index of leading British shares was up 5.22 points, or 0.1 percent, at 4,993.92 while Germany's DAX rose 16.87 points, or 0.3 percent, at 5,484.77. The CAC-40 in France was 8.06 points, or 0.2 percent, higher at 3,657.96.

Wall Street was also set to open higher later — Dow futures were up 44 points, or 0.5 percent, at 9,479 while the broader Standard & Poor's 500 futures rose 6.2 points, or 0.6 percent, at 1,027.90.

In Europe, sentiment was buoyed by surveys showing further improvements in the services sector despite further subdued retail sales data for the 16 countries that use the euro. The purchasing managers' index — a broad gauge of business sentiment — for the eurozone showed the services sector expanded in September for the first time in 16 months, while the equivalent British survey showed the rate of growth rising.

The reports helped reinforce expectations that both the eurozone and Britain likely emerged from recession in the third quarter, although analysts warned not to expect a strong rebound in growth, with another dip activity possible later in the year.

Most attention on Wall Street later will be on a similar survey on the U.S. from the Institute of Supply Management.

The consensus of economists' forecasts is for the main index to rise to 50 in September from August's 48.4. If it does rise to 50 then that would mean the U.S. services sector is no longer shrinking — 50 is the threshold between expansion and contraction.

"With ISM data expected to come in at 50 it could be a day of gradually clawing back some of the ground lost last week," said David Jones, chief market strategist at IG Index.

Last week, sentiment in the markets was jolted by the news that U.S. employers cut 263,000 jobs in September, way more than the 201,000 economists expected. Meanwhile, the unemployment rate increased to a 26-year high of 9.8 percent.

The news suggested companies were still relying on cost-cutting to eke out profits and consumers were still hurting and unlikely to boost their spending anytime soon fast payday loans. It also inspired extra caution ahead of third-quarter earnings reports this week that could shed more light on the U.S. economy's health.

"The risk of earnings disappointments cannot be ignored, and whatever the outcome, the season itself will lead to new questions over current valuations in equity markets globally," said UBS analyst Geoffrey Yu.

"With stocks almost 60 percent off their March lows, and signs of nervousness again coming to the fore last week, a deeper correction could be on the cards," he warned.

Currency markets are looking at the developments in stocks as many of the movements between exchange rates over the last few months have been predicated on how stocks have performed. The dollar, for example, has suffered as share prices have risen amid a rising appetite for risk. Conversely if shares now go into reverse, the dollar may start to benefit.

The dollar did move lower for a while after the Group of Seven finance ministers refrained from mentioning the currency in the communique that followed their meeting in Istanbul on Saturday.

"With the G-7 failing to come up with a strong statement on the dollar, the foreign exchange market remains stuck in recent trading ranges," said Neil Mackinnon, global macro strategist at VTB Capital in London.

By early afternoon London time, the euro was up 0.1 percent at $1.4610 but the dollar rose 0.5 percent to 89.87 yen.

Earlier in Asia, Japan's benchmark Nikkei 225 stock average lost 57.38 points, or 0.6 percent, to 9,674.49, sliding to an 11-week low.

In South Korea, the Kospi dropped 2.3 percent to 1,606.90. India's benchmark fell 1.1 percent, Australia's index was down 0.6 percent and Singapore's benchmark fell 0.5 percent.

Hong Kong's Hang Seng added 53.58, or 0.3 percent, to 20,429.07 after trading in the red for most of the day. Mainland China markets are closed for a weeklong holiday and reopen Friday.

Oil prices remained below $70, with benchmark crude for November delivery down 74 cents at $69.21. The contract fell 87 cents to settle at $69.95 on Friday.

___

Associated Press Writers Carlo Piovano in London and Jeremiah Marquez in Hong Kong contributed to this report.

European stocks edge up on upbeat services data

BEIJING, Oct. 3 (Xinhua) -- China contributed 19.2 percent of the world economic growth in 2007, up from 2.3 percent in 1978, a report by the National Bureau of Statistics (NBS) has said.

It said China tops the world in contribution to the global economic growth.

The report was the 18th by the NBS. It showcased the improving international status and influence of new China over years of development.

According to the NBS, China's gross domestic product (GDP) was 30 billion U.S. dollars in 1952, more than doubling by 1960, and reached 3.86 trillion U.S. dollars in 2008.

China had also become the world's third largest economy in 2008by accounting for 6 payday loan company.4 percent of the global GDP.

Meanwhile, the country's gross national income (GNI) per capital has been catching up with the world average. The GNI per capita was 10.1 percent of the world average in 1978, and 32.3 percent in2008.

In terms of GNI per capita ranking among 209 countries and regions by the World Bank, China was 130th in 2008 at 2,770 U.S. dollars, up 15 places compared 750 U.S. dollars in 1997. Special Report: Global Financial Crisis

China top contributor to world economic growth

BRUSSELS &S212; The Dell executive was sweating bullets at the prospect that chips from Advanced Micro Devices would be used in Dell personal computers instead of chips from Intel, Dell&S217;s main supplier.

In an e-mail message, the executive warned his boss that the scale of retaliation by Intel would be so severe that Dell would &S220;have to bite and scratch to even hold&S221; its 50 percent discount on price of the Intel chips. He warned that using A.M.D. chips in computers for sales to companies would lead Intel to offer an even slimmer discount.

&S220;Boss,&S221; the executive wrote, Intel is &S220;prepared for&S221; all-out war &S220;if Dell joins the A.M.D. exodus.&S221;

The European Commission&S217;s antitrust unit on Monday published the text of this e-mail message, from 2004, and a torrent of similar documents to back up its contention that the record $1.5 billion fine it imposed in May against Intel was justified.

The documents, E.U. regulators argued, clearly show that computer manufacturers were sorely afraid to cross Intel, which holds 77 percent of the global market for computer chips, by buying from A.M.D., Intel&S217;s only serious rival, with 23 percent.

For its part, Intel fired back on Monday, alleging that the commission had engaged in unfair tactics of its own. Intel has appealed the fine in European court, claiming that the commission botched procedures in its investigation of chip sales.

At stake is the strong market position Intel has long maintained over A.M.D., particularly if other antitrust regulators, like the U.S. Department of Justice, follow the European ruling.

Intel said Monday that a report on the antitrust investigation by the commission&S217;s ombudsman, as yet unpublished, would be critical of the commission.

European antitrust lawyers said the public back-and-forth between litigants was unlikely to influence the outcome of the appeal, which will not be heard by the European Court of First Instance in Luxembourg until next year at the earliest.

&S220;I think the commission feels pretty confident about its actions, which appear to be sound and backed up by the evidence in the case,&S221; said Michael Reynolds, an antitrust lawyer in Brussels at the law firm Allen & Overy. &S220;I don't think any public debate is going to have an influence on the appeals court's decision.&S221;

E.U. regulators first began investigating Intel in 2001, a year after A.M.D. filed a complaint with the E.U. authority in Brussels. In two sets of charges, in 2007 and 2008, the commission accused Intel of abusing its dominant position in computer chips by giving large rebates to computer makers, by paying computer makers to delay or cancel product lines and by offering chips for powerful server computers at prices below actual cost.

The commission regulators claim that the e-mails released on Monday show a pattern of intimidation that they assert was repeated across the industry as Intel bound its customers in a complex web of rebates and incentives aimed at hobbling A.M.D. A commission official said &S220;all-out war&S221; was a paraphrase of the language in the internal Dell e-mail message, from 2004, as the original wording was too offensive to reproduce in a public document.

The internal documents from executives at Dell, Hewlett Packard, NEC, Lenovo, and Media Saturn Holding, a German electronics retailer, describe how Intel conditioned its rebates on the companies outfitting 80 percent to 100 percent of their desktop and laptop computers with Intel chips.

The e-mail messages also detailed how Intel based rebates to Acer, H-P and Lenovo on those companies delaying the introduction of computers based on A allstate insurance company.M.D. chips.

In one internal company presentation from 2003, Dell noted that switching any part of its supplies to A.M.D. from Dell risked retaliation by Intel that &S220;could be severe and prolonged with impact to all LOBs,&S221; or lines of business.

Another computer maker, Hewlett-Packard, submitted an e-mail to the commission showing an H-P executive pleading with other members of the company to keep quiet about an apparently restrictive agreement with Intel.

&S220;PLEASE DO NOT ... communicate to the regions, your team members or AMD that we are constrained to 5% AMD by pursuing the Intel agreement,&S221; the e-mail message, from 2002, said.

In another e-mail extract, a Hewlett-Packard executive warned his colleagues not to jeopardize payments made to H.P. by Intel by selling A.M.D.-based business desktop computers though certain distributors.

&S220;You can NOT use the commercial AMD line in the channel in any country, it must be done direct,&S221; the e-mail, from 2004, said. &S220;If you do and we get caught (and we will), the Intel money (each month) is gone (they would terminate the deal). The risk is too high.&S221;

E.U. officials would not comment Monday on whether Ms. Kroes published the e-mails to counter complaints by Intel to the European ombudsman, P. Nikiforos Diamandouros, about the commission's handling of the antitrust investigation.

Gundi Gadesmann, a spokesman in Brussels for Mr. Diamandouros, declined to say whether the ombudsman&S217;s report, which has not been published, was critical of the commission. Ms. Gadesmann said a public version of the report probably would be released next month.

Intel said the E.U. ombudsman had concluded in July that a failure to record and preserve evidence at a key meeting amounted to &S220;maladministration&S221; on the part of the commission.

Robert Manetta, an Intel spokesman in London, added Monday that the E.U.&S217;s investigation of Intel had relied &S220;heavily on speculation found in e-mails from lower-level employees that did not participate in the negotiation of the relevant agreements,&S221; and that the e-mails were cited &S220;if they favored the commission&S217;s case.&S221;

Mr. Manetta also said E.U. investigators &S220;ignored or minimized hard evidence of what actually happened, including highly authoritative documents, written declarations and testimony given under oath by senior individuals who negotiated the transactions at issue.&S221; Intel said it planned to present documentation of its claims during the appeal.

The commission insisted on Monday that its investigation had been sound.

&S220;During the proceedings Intel was able to comment fully on all the Commission&S217;s evidence outlined in the decision,&S221; it said in a statement accompanying the published e-mails and documents. &S220;Indeed, the commission went beyond its legal obligations in safeguarding Intel&S217;s rights of defense,&S221; it said.

An official record of Intel&S217;s appeal, published Sept. 9 in an E.U. official journal, shows that Intel has accused the commission of ignoring documents that &S220;were potentially exculpatory of Intel&S221; and of failing to &S220;make a proper note of its meeting with a key witness from one of Intel&S217;s customers, who was highly likely to have given exculpatory evidence.&S221;

Kevin J. O?Brien reported from Berlin.

European Union Lays Out Its Evidence Against Intel

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LONDON (Reuters) – The world cannot be complacent about economic recovery and will need to keep emergency stimulus packages in place well into next year, British Prime Minister Gordon Brown said on Saturday.

Addressing G20 finance ministers and central bankers meeting in London, Brown noted the improvement in the outlook since the height of the banking crisis last year but said more work was needed to ensure an enduring recovery from the worst recession since World War Two.

"The stakes are simply too high to get these judgments wrong, so to decide now that it is time to start withdrawing and reversing the exceptional measures we have taken would, in my judgment, be a serious mistake," he said.

"With more than half of the total five trillion (dollar) fiscal expansion yet to start, I believe the prudent course is for G20 countries to deliver these fiscal plans and the stimulus packages that have been put in place and make sure that they are implemented in full both this year and the next."

While policymakers appear agreed that economic life-support packages need to remain in place, divisions have appeared over the best way to fix the banking system and ensure no repeat of the credit crisis that plunged the world into recession.

The International Monetary Fund now forecasts the world economy to shrink 1.3 percent in 2009, a shade less than its April forecast of a 1.4 percent contraction, and grow 2.9 percent in 2010, revised up from 2.5 percent previously.

Policymakers remain cautious about declaring victory when unemployment is expected to go on rising and the financial system remains fragile after a two-year crisis that toppled some of the world&&9;s best known banks.

BANKING DIVISIONS

Brown said the G20 group of leading and emerging nations had to think not only about the immediate future but also about how to make the world economy safer for the long-term.

"Making the recovery sustainable does mean, in my view, avoiding unsustainable imbalances between countries," he said business card.

"It makes sense for countries with large current account deficits to boost exports. It makes sense also for countries with large current account surpluses to increase the demand for goods and services from other countries."

Saturday&&9;s meeting will lay the framework for a leaders&&9; summit in the U.S. city of Pittsburgh later this month.

G7 sources have told Reuters that the G20&&9;s communique, due on Saturday, will likely maintain the pledge to keep policy accommodative for as long as was needed.

Fixing the banking system is proving more divisive.

U.S. Treasury Secretary Timothy Geithner has called for strengthened bank capital requirements aimed at curbing some of the risky lending practices blamed for the crisis.

But French finance minister Christine Lagarde said on Friday she could not see the point. A G7 source told Reuters that Germany was also opposed to the idea.

Both European nations also want to see tight restrictions on bankers&&9; pay to curb excesses which encouraged them to run riot with risk.

French President Nicolas Sarkozy has even called for a global tax but Britain and the United States, with their powerful banking industries, have balked at that idea.

Still, ministers are expected to agree some codes at this meeting on the structure of remuneration at financial institutions, many of which have had to be rescued with billions of dollars of public money.

"Pay and bonuses cannot reward failure or encourage risk taking. It is offensive to the public whose taxpayers&&9; money in different ways has helped many banks from collapsing and is now underpinning their recovery," Brown said.

(Writing by Sumeet Desai; editing by Keith Weir)

G20 united on stimulus, divided on bank reform

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DETROIT (Reuters) – U.S. government incentives likely pushed U.S. auto sales to a 20-month high in August, leaving analysts and the industry guessing how hard a landing to expect with the "Cash for Clunkers" program now exhausted.

Automakers could see the U.S. seasonally adjusted rate of sales, a closely watched indicator of demand for big-ticket items, jump to nearly 16 million vehicles in August under the "clunkers" program, analysts said. That would be the highest monthly sales rate since December 2007.

But with the incentive program ended and only heavily picked over vehicles left in inventories, September is expected to be a much leaner sales month, with the severity of the pullback dependent on the U.S. economy&&9;s health.

The annualized sales rate reached 15.8 million vehicles in August under the program, but likely will drop off the rest of the year, although not back to the lows seen early in 2009, Barclays Capital analyst Brian Johnson said in a note.

"We expect sales for the remainder of the year to fall well below August results, but believe momentum from the program as well as the stabilization in the economy and improvement in consumer confidence could boost sales above the 9.5 million average seen in the first half," Johnson said.

Johnson said the seasonally adjusted annual rate could be in the 10 million unit range in September and 10.5 million vehicles for the fourth quarter.

Among U.S. carmakers, Barclays expects Ford Motor Co (F.N) sales to be up 53 percent in August from a year earlier. General Motors (GM.UL) sales, which were strong in August 2008 due to an incentive program, are expected to be down 9 percent and Chrysler Group LLC (FIA.MI) sales up 2 percent, it said.

For Japanese automakers, Toyota Motor Corp (7203.T) sales are expected to be up 22 percent, Honda Motor Co Ltd (7267.T) sales up 20 percent and Nissan Motor Co Ltd (7201.T) sales up 5 percent, Barclays said.

The top 10 "clunkers" program vehicle sales were dominated by Toyota and Honda, which had three vehicles each on the list, and by Ford with two vehicles.

&&9;CLUNKERS&&9; SUPPORT

Dealers submitted 690,114 new vehicle transactions under the "clunkers" program that started in late July and ran out three weeks into August at a cost of about &&6;2.88 billion.

How many of "clunkers" deals landed in August is not completely clear, though U free instant credit reports.S. Department of Transportation data suggests roughly 450,000 sales in August and 240,000 in July.

Also unclear is how many of those August deals would have been completed without the incentives, and whether they were pulled forward from the near future.

"Our only concern is how much of that will truly be incremental volumes as opposed to just borrowing from the future," Rebecca Lindland, director of automotive research at IHS Global Insight, said in an interview.

IHS Global Insight estimated that about 250,000 vehicles were sales that would not otherwise have been made, though that figure could be higher, Lindland said.

Lindland said the annualized rate of sales could be 14.5 million to 15 million units for August, with September falling back to the 9.5 million unit range. A "significant hit" on sales also is expected in the fourth quarter, she said.

"While we are seeing signs of it getting better, the economy is still not in great shape," Lindland said. "It is getting better as opposed to getting worse but we&&9;re still not driving in the fast lane."

On a percentage basis, automakers still may report that industry sales fell in August from a year earlier. The August selling period wraps up on Monday and has 26 selling days, one fewer than in August 2008.

JP Morgan analyst Himanshu Patel said the seasonally adjusted rate could hit 15.3 million vehicles in August, followed by a hangover to perhaps a 9 million unit monthly selling rate from September to the end of the year.

"While the fast-money crowd may over-react to this likely SAAR decline, it is worth stepping back and remembering that in the nine months pre-clunkers, U.S. retail SAAR showed strong signs of sequential stabilization, all but confirming that a bottom had been found," Patel said in a note.

Edmunds expects a seasonally adjusted annual rate of just over 13 million units, with sales tapering quickly toward the end of August after the "clunkers" program ended.

"Ending August on such a low note does not bode well for September," Edmunds.com Senior Analyst Jessica Caldwell said.

(Reporting by David Bailey, Soyoung Kim and John Crawley, editing by Leslie Gevirtz.)

"Clunkers" may boost U.S. auto sales, but investors look beyond

NEW YORK (Reuters) – Stocks fell on Monday after a sharp drop in Chinese equities called into question whether asset prices have raced ahead of an economic recovery.

The selling mainly hurt shares in industrial and natural resource companies as commodities prices slumped. But financial stocks were also dented on fears they may be over valued after a strong run-up and following bearish comments from Barron&&9;s.

Recent slides in Chinese stocks have caused jitters in global stock markets that have rallied strongly in recent months, with the S&P 500 up around 50 percent since March. A 6.7 percent dive in the Shanghai Composite Index (.SSEC) to a three-month closing low on Monday reignited those concerns.

"Investors in the United States felt it was important for China to help lead the path to economic recovery," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "If their markets are going to misbehave, it opens the question of whether they are going to see a recovery."

The Dow Jones industrial average (.DJI) fell 79.88 points, or 0.84 percent, at 9,464.32. The Standard & Poor&&9;s 500 Index (.SPX) lost 10.65 points, or 1.04 percent, at 1,018.28. The Nasdaq Composite Index (.IXIC) fell 22.64 points, or 1.12 percent, at 2,006.13.

Chinese stocks recorded their second-biggest monthly loss in 15 years, and traders said the sell-off sparked a fall in the price of oil and other commodities on fears demand in the world&&9;s third economy may be weaker than thought.

Oil dropped more than 4 percent to below &&6;70 a barrel, and copper prices slid from 11-month highs.

In New York, shares in natural resource companies fell. Exxon Mobil Corp (XOM no fax payday loan.N) dropped 0.8 percent to &&6;69.51 while miner Freeport-McMoRan Copper & Gold Inc (FCX.N) Inc fell 3.4 percent to &&6;63.24. Caterpillar Inc (CAT.N) fell 2.6 percent to &&6;45.51.

Weighing on the financial sector, Barron&&9;s said the stock of American International Group Inc (AIG.N) was overpriced after soaring more than 50 percent last week and also recommended investors take profits in Citigroup Inc (C.N), which dropped 3 percent to &&6;5.07. AIG fell 6.5 percent to &&6;47.02.

Banc of America-Merrill Lynch cut its rating on the stock of Morgan Stanley (MS.N) to "neutral" from "buy," sending the shares down 3 percent to &&6;28.61.

The announcement of two large mergers failed to lift overall sentiment. Baker Hughes Inc (BHI.N), an oilfield services company, said it would buy smaller rival BJ Services Co (BJS.N) for &&6;5.5 billion, and Walt Disney Co (DIS.N) said it would buy Marvel Entertainment Inc (MVL.N) for &&6;4 billion.

Shares in Marvel, famous for its stable of characters such as Iron Man, Spider-Man and the Fantastic Four, rocketed 26 percent to &&6;48.71 while BJ Services added 7 percent to &&6;16.53.

A regional report that showed manufacturing in the U.S. Midwest was on the cusp of expansion did little to boost sentiment, with all three major indexes falling around 1 percent by mid-morning.

The Institute for Supply Management-Chicago said on Monday its index of Midwest business activity rose in August to 50.0 from 43.4 in July.

(Additional reporting by Leah Schnurr; Editing by Padraic Cassidy)

Wall Street slides as China equities, financials weigh

Afghan policeman (r) keeps watch as election workers shift ballot boxes at polling station in Kabul, 21 Aug 2009 An Afghan election monitoring group says Taliban insurgents have made good on their threat to chop off ink-stained fingers of voters. Meanwhile, international observers are rendering a tentative verdict on the electoral process, calling Thursday's balloting generally positive and democratic. Two voters in Afghanistan's Kandahar province, where there is a significant Taliban presence, had their ink-stained fingers chopped off by insurgents. The head of the country's Free and Fair Election Foundation, Nader Nadery, tells VOA his group's observers reported that the two men were attacked by the Taliban on Election Day. The report came as key international monitors are rendering a tentative assessment of the election process. The U.S.-based National Democratic Institute says aspects of the election "were in accordance with democratic principles." But there were serious flaws that must be addressed before future elections. NDI president Kenneth Wollack was asked if his organization, which has monitored 200 elections worldwide, could consider the elections in Afghanistan to have been free and fair."We have seen too many elections around the world and it is why we reserve a final assessment to an end of a process not as the process is still unfolding," he said.Allegations of voting irregularities are widespread and international monitors acknowledge they were not able to observe firsthand what took place in many provinces because of poor security. The European Union monitoring mission says the violence and intimidation prevented a free election in some parts of the country. It notes turnout was considerably higher in the North where challenger Abdullah Abdullah draws support from Tajiks, but particularly low in the South, a Pashtun stronghold of incumbent President Hamid Karzai.One of the American observers, former U.S. Senator Gary Hart, praises the millions of voters who defied what he calls " a small group of cowardly people in the shadows who hate democracy.""I know of few, if any, mature democracies in the world where faced with the threat of violence and violence itself that turnout for the voters would have been higher than it was here Thursday," he said.The election camps of both President Karzai and challenger Abdullah are claiming their candidates are heading to victory, capturing enough votes to avoid a runoff election. However election officials say tabulations have not been completed and are preliminary. Partial results will not be announced before Tuesday. It may be weeks before full, official voting totals are released. A successful and credible election - with the losers peacefully accepting the outcome - is deemed crucial for Afghanistan. The country is battling an insurgency with the help of 100 thousand foreign troops. Billions of dollars in aid have poured into Afghanistan since the U.S.-led invasion in 2001 ousted the Taliban from power.

Taliban Reportedly Cut Off Fingers of 2 Voters

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