Filed at 7:57 p.m. ET

TOKYO (AP) -- Business confidence among Japanese companies has improved for the third straight quarter, but not enough to convince them to spend, the central bank said Monday.

In the Bank of Japan's closely watched "tankan" quarterly survey of business sentiment, the main index for large manufacturers stands at minus 24. Three months ago the index stood at minus 33.

The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable. The result beats Kyodo News agency's average market forecast if minus 27.

The mood has been tempered by the yen's recent climb, which reduces the value of overseas profits for companies like Toyota Motor Corp. (NYSE:TM) and Sony Corp. (NYSE:SNE) Companies remain reluctant to restart investing in new factories, equipment or workers, the survey showed.

The yen hit a 14-year high of 84.83 against the dollar on Nov. 27. The dollar has recovered somewhat since then, trading above 89 yen Monday morning saving account payday loan.

Major manufacturers and non-manufacturers reduced their capital spending plans and now expect to cut expenditures by an average 13.8 percent this fiscal year through March 2010.

The sentiment index for big non-manufacturers inched up to minus 22 from minus 24 in September.

Sentiment among medium-sized manufacturers stood at minus 30 from minus 40, while the reading for small manufacturers was up slightly to 40 from minus 52 in September.

The Bank of Japan surveyed a total of 10,116 companies between Nov. 9 and Dec. 11, of which more than 99 percent responded.

The tankan helps the central bank guide monetary policy, though board members are not expected to change the central bank's key interest rate, now at 0.25 percent, for the time being.

Confidence Up at Japanese Manufacturers

ULAN BATOR

A pungent odor like turpentine wafts over the hillsides north of the Mongolian capital. It comes from the sharilj, a wild plant that has taken over the scalloped landscape, a telltale sign of overgrazing since the plant is inedible for sheep and goats.

Sukhtseren Sharav has a herd of 150 goats and 100 sheep, and as they chew their way through everything else, and the sharilj spreads, he must shepherd them ever higher into the mountains to find fresh grazing land.

The lack of foraging terrain is not Mr. Sharav&S217;s only worry. The price for cashmere, the wool made from the fleece of his goats, has plunged 50 percent from last year. The price of flour, his most essential food staple, has more doubled.

These are hard times for Mongolia&S217;s cashmere industry, which provides jobs and income for a third of the country&S217;s population of 2.6 million and supplies about 20 percent of the world&S217;s market for the fluffy, feather-light fiber, prized for its warmth, delicate feel and long wear.

To compensate for low prices, herders have been increasing supply by breeding more goats &S212; a classic vicious circle. Mongolia&S217;s goat population is now approaching 20 million, the highest ever recorded.

Environmentalists and social scientists say this is destroying biodiversity and pastureland, and undermining herding livelihoods. But goats are hardier than other livestock, breed faster and can survive on sparser resources: so, the more the land is degraded, the more herders are driven to switch from cows, camels or other less destructive herds &S212; another vicious circle.

Mixed into the problem is climate change. According to Erdene-Ochir Badarch, environment officer of the World Bank, rainfall on the Mongolian steppe has become increasingly erratic, resulting in the disappearance of 600 Mongolian rivers and 700 lakes. This too may be a chicken-and-egg problem. Increasing aridity and loss of plant species may itself be contributing to the dwindling rains.

In a study funded by the World Bank, Dennis Sheehy, a rancher from Oregon with a doctorate in range management, last year measured two of Mongolia&S217;s four major ecological zones &S212; desert and forest steppe &S212; to determine changes in the composition of species compared with an earlier study made in 1997.

Mr. Sheehy found a 34 percent loss in plant species in the Gobi Desert and about a 30 percent loss in Mongolia&S217;s forest steppe.

&S220;Two conditions have created the loss in species: the proportion of goats in the herd in the last 10 to 12 years, and the areas are becoming increasingly arid,&S221; Mr. Sheehy said. &S220;The plant species that had disappeared were most palatable to all livestock, but especially to goats,&S221; he added. &S220;There are too many of them.&S221;

The problem with goats is not only what they eat. In arid regions, their sharp hooves have been accused by environmentalists of piercing the soil surface, known technically as the cryptobiotic crust, a tangle of gray-brown material composed of fungi, mosses, lichens and bacteria which helps to retain moisture. Once the crust is torn, strong northwesterly winds carry away the sand underneath in dust storms that are contributing to the spread of the desert, according to a 2003 World Bank report.

Still, large parts of Mongolia remain in good shape, notably in the eastern parts of the country, and some researchers, including Andrei Marin, a doctoral student preparing a thesis on climate-change adaptation at the Institute of Geography, part of the University of Bergen in Norway, caution against jumping to conclusions about cause and effect low fee payday loans.

Mr. Marin says the 10-year timetable for Mr. Sheehy&S217;s comparative study may be too short to measure environmental shifts, and a 25-year span would be more meaningful.

The reasons goats are proliferating are as much about nurture as nature, Mr. Marin said by telephone from Bergen. When the country shifted from a planned socialist economy to a market economy and a parliamentary democracy, it largely retreated from supporting the livestock industry, leading herders to increase the size of the goat herd to finance rising expenses, he said.

&S220;Government subsidies for transportation, boarding schools and a hay reserve have disappeared to a large extent,&S221; he said.

Adding some complexity to the debate, land degradation, as a term, lacks a precise and widely accepted definition, and environmentalists urge a note of caution when discussing it.

&S220;There are seven different ways to measure desertification in Mongolia,&S221; said Tony Whitten, a biodiversity specialist with the World Bank in East Asia and the Pacific.

Yet another layer of the problem is the dysfunctionality of Mongolia&S217;s cashmere marketing.

China is the largest buyer of Mongolia&S217;s raw and washed cashmere by far, taking an estimated two-thirds of all exports &S212; one-third legally and one-third smuggled to avoid export taxes.

Facing such a dominant buyer, Mongolian traders tend to get the short end of the bargain even in good times, accepting prices far below market value for high-quality fleeces and passing on the pain to the producers; and in the past year, times have not been good. As the global economic crisis shrank Chinese clothing exports, Chinese cashmere purchases effectively ground to a halt, just as another rain failure was pushing the herders into longer and more expensive migrations in search of grazing land.

&S220;Climate change and globalization interacted to severely curtail the adaptive capacity of the herders,&S221; Mr. Marin said.

Whatever the exact mix of causes, Mr. Sheehy says, the result is the same: a situation that poses a major risk to sustainability, with too many goats, and too much livestock in general.

The total Mongolian livestock herd numbers about 44 million animals, but Mongolia is haunted by the decimation of its herds when four successive years of summer drought, from 1999 to 2002, were followed by cold and snowy winters, killing off 9 million animals &S212; a disaster from which many smaller herders have still not recovered.

&S220;We&S217;re predicting that with any significant drought, the whole livestock pastoral system will crash,&S221; he said. &S220;Especially in central Mongolia, where there is not much resilience &S212; it is on the verge of a breakdown.&S221;

But the solution is easier envisaged than done: reduce livestock numbers, when herders are hard up for cash, and introduce modern market management to a country that has never known it.

&S220;Everyone thinks there are too many goats. But no one does anything about it,&S221; Mr. Sheehy said.

An earlier version of this article said that a study last year of Mongolian ecosystems was funded by Sony. In fact, the study was funded by the World Bank.

Special Report: Business of Green: Pastoralism Unraveling in Mongolia

LONDON (MarketWatch) -- TomTom shares have lost their sense of direction over the last month, with the stock down by more than a third, as worries about competition and third-quarter earnings lead the stock off route.

TomTom , the Dutch-listed personal satellite navigation firm, has seen its shares swing like a winding road: from a low of 2.12 euros in March, then, after it cut debt by selling discounted shares to investors, rising to 13.35 euros on Sept. 11.

But now the stock is back on its way down, skidding to 6.95 euros a share on Friday, a downturn of 35% from late October levels.

Analysts have focused on two areas in the last few weeks -- results and the threat of increased competition from Internet search engine giant Google .

Taking past performance first, on Oct. 28 TomTom reported that its net income fell 47% in the third quarter of 2009, to 31 million euros, below analyst forecasts for a profit of 36.4 million euros.

Revenue fell 15% to 365 million euros in the quarter, missing a 369 million euro analyst forecast compiled by Dow Jones Newswires.

The company's results were hit by lower selling prices for its key navigation products in the quarter, with average prices to 99 euros, a 27% fall from year-earlier levels and a 12% drop from the second quarter.

"The decline was driven by price decreases across a number of products, partly in anticipation of promotional activities in the fourth quarter. We continue to expect that the rate of [average price] decline for the full year will be slower than in 2008," TomTom said.

Writing about TomTom's third-quarter results, Societe Generale analysts said "sales were slightly disappointing and management did not offer any exciting fourth-quarter outlook. In our view this has tempered a lot of the enthusiasm built over the past months around a recovery in the personal navigation device industry."

Future profits were very much also on the minds of TomTom investors on that day after Google revealed that it has upgraded its smartphone software to include a free navigation feature.

In a blog posting, Google said that it will launch Google Maps Navigation, which provides turn-by-turn directions and can be found within Google's Android operating system.

"Obviously the market for such handsets initially will be limited, but Google is resetting the price benchmark for navigation services at $0.00, which puts TomTom's business model into question," said the analysts at Societe Generale.

They called Google's move an "extremely negative development" for TomTom.

Julian Chillingworth, chief investment officer of Rathbone Unit Trust Management, said he's stayed from buying TomTom. "I am slightly dubious about technology companies with one product offering," he said.

But there are some hope for a u-turn in the stock.

Rival Garmin reported results on Nov paydayloans. 4 and said that its third-quarter profit rose a much-stronger-than-forecast 26% to $215 million.

"Garmin reported a strong increase in the gross and operating margin of its automotive business on the back of solid average selling prices, lower component prices and tight cost control," said analyst Martijn den Drijver at SNS Securities.

Also, Garmin noted that European markets improved markedly in the third quarter compared to the first half of 2009, he said.

"Given that TomTom's largest market is Europe that should be seen as positive as Garmin's market share in Europe has remained steady at 20%," den Drijver at SNS Securities. TomTom has a market share of around 44% in Europe.

Additionally, the average selling price news from Garmin suggests that TomTom's lower third-quarter average price is likely to be a one-off.

"TomTom explained that the ASP was due to earlier than normal promotions and the depreciation of the U.S. dollar," he said.

On valuation metrics, TomTom appears cheaper than Garmin. TomTom trades on 11.2 times estimated 2010 results and 9.0 times 2011 earnings. In contrast, Garmin trades on 12.4 times 2010 earnings and 13.4 times 2011 results, according to FactSet data.

There are questions about how successful Google's move will be as well.

"We do not know yet how fast smart phone manufacturers will adopt the Android operating system," said den Drijver.

He said that Samsung, Sony Ericsson, HTC, Motorola and LG all have some Android models but "these are not major players in the smart phone market, which is dominated by Nokia, Research In Motion and Apple who have a combined market share of over 76%." In addition, consumers can use TomTom's navigational product over Apple's iPhone.

He also said smart phones "continue to be a sub-optimal means of navigation in a car due to the small screen size, low battery life, inferior speaker quality and complicated pricing."

Still, "sentiment-wise, Google's announcement obviously does not help as it implies that maps have become a commodity," he said.

Will James, a fund manager at Standard Life Investments, made a similar point.

"The idea of commoditization has suddenly raised the question about how to monetize maps. Google can leverage their strong position in advertising," said James, whose employer is the group's 17th-largest holder, according to FactSet data.

But he still holds out hopes for the company.

"I think that the market is worrying about something that is quite a long way off," he said. "You can argue a lot of this is in the price. TomTom will continue their penetration into the car market and it will probably bring them closer to Apple."

European Stocks to Watch: TomTom stock loses its way

SAN FRANCISCO – The Gymboree Corp. on Thursday said its third-quarter sales at stores open at least a year fell 4 percent, but the children's retailer nevertheless raised its profit forecast for the period.

The figure is an important gauge of retail health, because it measures performance at existing stores, rather than newly opened ones.

Net sales for the quarter ended Oct. 31 rose 2 percent, to $265.6 million, from $261.3 million a year ago.

Analysts polled by Thomson Reuters, on average, were expecting sales for the quarter of $273 business cards.5 million

Gymboree now expects third-quarter profit between $1.10 and $1.13 per share, up from its prior forecast of between $1.05 and $1.10 per share. Analysts project a profit of $1.10 per share.

The company plans to report full third-quarter results on Nov. 18.

Gymboree shares fell $2.36, or 5.4 percent, to $41.17 in morning trading.

Gymboree 3rd-qtr sales comparison falls 4 percent

Hot News: Dow, S&P 500 open up on data optimism

LONDON (AFP) – London stocks ended down on Tuesday as news of a 0.6 percent fall in wholesale prices across the Atlantic shook the market.

The FTSE 100 index dropped 0.72 percent to 5,243.40 points.

Barclays was the most traded stock with traders exchanging 168 million shares, followed by Royal Bank of Scotland which saw 164 million units switch hands.

Retailer Sainsbury was the session&&9;s star performer gaining 17.7 pence -- or 5.36 percent -- to finish at 347.8.

Pearson added 36.5 pence -- or 4.44 percent -- to stand at 858 american family insurance.5.

The top casualties were Autonomy Corp, falling 138 pence -- or 8.65 percent -- to finish at 1457. Barclays was down 18.3 pence -- or 4.79 percent -- to end at 363.75.

Sterling gained ground against both the euro and the dollar.

At 15:58, sterling was trading at $1.6427, up from $1.6423 at Monday&&9;s close. The pound climbed against the euro, rising to 1.1003, up from 1.0959 over the same period.

FTSE 100 down

ACCESS to a fast Internet connection has become more than a convenience. It&S217;s being enshrined in some countries as a legal right of all citizens. Finland, for example, announced last week that it was moving up its timetable to next year from 2015 for guaranteeing broadband access to all, according to YLE, the Finnish broadcasting company.

Congress is clearly irritated that the United States has not done well in the international broadband Olympics. Other countries have national plans to accelerate the diffusion of broadband; America does not. So Congress has given the Federal Communications Commission a mandate to produce a plan with specific recommendations by next February.

We shouldn&S217;t get caught up, however, in a space-race panic. We&S217;ve actually done surprisingly well making a broadband connection accessible to a vast majority of American households. No less than 96 percent of households either subscribe to or have access to broadband service, according to an F.C.C. task force, which presented a status report to the commission last month.

The report does not play up the fact that almost all homes have, or could have, broadband service.

Nor does it highlight the actual median speed of 3 megabits a second among households that now have broadband, (which is based on data that probably understates the speeds substantially). The authors seem happily caught up in the thrill of playing an international game of catch-up.

The most interesting question here is the one that the F.C.C. can&S217;t answer: Why have 33 percent of American households that have access to broadband elected not to subscribe? The reasons &S220;are not well understood,&S221; the report says. A survey focusing on the nonadopters is under way.

We do know that adoption levels vary by age, income, education and race. Perhaps the F.C.C.&S217;s survey of nonadopters will show that low income is the main barrier to access. In that case, means-tested subsidies could remove that obstacle.

But age is clearly another factor. Survey data supplied by the Pew Internet and American Life Project show that just 30 percent of Americans who are 65 or older use broadband, compared with 77 percent of the 18-to-29 age group. (Which raises an interesting question itself: only 77 percent?)

The F.C.C.&S217;s own survey of nonadopters is likely to confirm that many older people are simply not as comfortable with newer technology. But it may also reveal that there is an irreducible core of people, spanning ages and income levels, who simply do not want to use the Internet.

And maybe that won&S217;t change, no matter how many social workers knock at their doors, and no matter how many years pass after Internet service has come to be accepted by their neighbors as a utility as essential as water and electricity. South Korea&S217;s experience as a broadband pioneer is suggestive. The task force looked at 22 countries with broadband plans, seeking best practices that were well suited to the United States, and South Korea&S217;s broadband initiative was of particular interest fast payday loan no faxing.

In 1999, South Korea began to help low-income and elderly households get PCs and become connected, and the outcome could be described as quite successful: &S220;Today, 83 percent of households in Korea have adopted broadband access,&S221; the report says. But one can also look at the remaining 17 percent and wonder what has prevented those households from getting online, despite the strenuous efforts of a government that has been a world leader in the broadband race.

The F.C.C. has invited comments and suggestions for its broadband initiative and has received about 41,000 pages in response, from individuals and businesses. Google proposes that every American have access by 2012 to a connections of 5 megabits a second (Mbps) &<51; in both directions. It also suggests that several cities be selected to test the installation in every household of 1-gigabit-a-second connections &<51; or more than a thousand times faster than the speed that the F.C.C. uses to define downstream &S220;broadband.&S221;

What exactly one could do with such a gloriously fast connection is not detailed. Then again, even the recent F.C.C. report, which does its best to list exciting possibilities that come into view with each increment of broadband speed, struggles to come up with many examples beyond 5 Mbps. Streamed classroom lectures, for example, require 1 to 5 Mbps; with 10 Mbps, the lectures come in high definition.

The estimated costs for universally upgrading the minimum speed of the nation&S217;s broadband connections to 3 Mbps would be about $20 billion, according to the report. Getting to 10 Mbps would be $50 billion. To play in the same league as Finland, with its 100 Mbps service promised to every citizen by 2015, would require $350 billion.

FINLAND occupies a compact 130,558 square miles, versus more than 3.5 million for the United States. The economics of broadband deployment are greatly affected by physical distances. With some understatement, the F.C.C. report says, &S220;the economics of providing broadband to the rural U.S. are challenging.&S221;

In a news release introducing the task force report, the F.C.C. calls broadband &S220;the infrastructure challenge of our time,&S221; which seems a wee bit overstated, given the decrepit state of our bridges, highways, railroads and schools. It also blithely overlooks the fact that the infrastructure is already in place to provide speeds of 3 to 10 Mbps to 94 percent of American households.

We&S217;ve built it, but not all have come. Some may never come.

Let&S217;s not assume that their and their nation&S217;s future will be hopelessly blighted if they don&S217;t.

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.

Digital Domain: Broadband Now! So Why Don’t Some Use It?

LONDON (AFP) – European stock markets edged lower on Thursday, the first day of the fourth quarter, as investors paused after London&&9;s biggest-ever quarterly gain on economic recovery hopes, dealers said.

The FTSE 100 index eased 0.47 percent to 5,109.80 points in late morning trade.

Frankfurt&&9;s DAX 30 slid 0.38 percent to 5,653.47 points and in Paris the CAC 40 drifted 0.61 percent lower to 3,772.21 points.

The DJ Euro Stoxx 50 index of top eurozone shares dipped 0.59 percent to 2,855.64.

London&&9;s FTSE had surged by a record-breaking 21 percent during the third quarter, which ended on Wednesday, as investors were heartened by mounting evidence that the global economy was on the mend.

German shares jumped 15 percent and French stocks soared by 17 percent in value in the three months to the end of September.

"The FTSE 100 has enjoyed its best ever quarter, adding 21 percent over the last three months, leaving many to ask the question whether the rally can now continue," said analyst Ben Potter at financial betting firm IG Index.

"Certainly any pick up in mergers and acquisitions activity will lend support across the board, whilst higher resource prices will support the heavyweight mining and petrochemicals sectors."

However, European equities had fallen for the second day running on Wednesday, after publication of worse-than-expected jobs data in the United States, which is the world&&9;s biggest economy.

Despite ending in negative territory, the London FTSE has now gained about 15 percent since the start of 2009.

ODL Securities analyst John Murphy also questioned whether the rally was sustainable.

"A stellar run has left the markets looking healthy, but investors are still asking themselves if it is a bubble, and if so, when will it burst?" Murphy commented easy payday loans.

"Whilst it is important to appreciate the past, one needs to keep looking forward, and as we enter October, will talk of crashes become a self-fulfilling prophecy?"

Wall Street shares fell for the second consecutive day on Wednesday after data showing a steep drop in private sector payrolls fuelled increased jitters on the economic outlook.

The Dow Jones Industrial Average shed 0.31 percent to close at 9,712.28 in a roller-coaster session.

Despite ending the day on a deficit, the Dow closed the third quarter with an impressive 15 percent gain -- its best quarter since 1998.

Meanwhile in Asia on Thursday, Japanese shares sank 1.53 percent, hitting a two-month low in the wake of losses on Wall Street and signs that Japanese firms plan to curb their investment, dealers said.

Tokyo&&9;s benchmark Nikkei-225 index ended at 9,978.64, the weakest close since July 24.

The Nikkei had closed the third quarter on Wednesday with a slender gain of 1.7 percent.

Hargreaves Lansdown analyst Richard Hunter said the upcoming third-quarter company results season would prove crucial for stocks.

"Over the next few weeks, third-quarter earnings will gradually take centre stage. These results will have a major bearing on where markets go next," he said.

On the foreign exchange market, the European single currency fell to 1.4576 dollars in Thursday morning deals.

European equities slip at start of fourth quarter

After falling sharply in early trading, stocks made a swift recovery and clawed their way by Wednesday afternoon, bolstered by gains in the prices of commodities like oil, copper and gold. Shares were mixed in early afternoon trading.

The rebound came as mutual funds and traders closed the books on a second straight quarter of gains. The Dow has gained some 1,300 points since the beginning of July, and the broader Standard &&8; Poor&S217;s 500-stock index is up some 15 percent. Those follow similarly strong gains in the spring.

At 1:50 p.m., the Dow Jones industrial average was up about 12 points or 0.1 percent, and the broader Standard &&8; Poor&S217;s 500-stock index was floating just above neutral. The Nasdaq, which had been down 1 percent, was up 0.4 percent.

Shares of technology and basic-materials companies, which would be among the earliest beneficiaries of an economic rebound, were tugging the markets higher.

The gains came despite some early worries about two lesser-known barometers of the economy, which came in weaker than expected. The figures spooked investors, causing some to reel in positions in more aggressive corners of the market, such as financial and industrial stocks.

A report on business activity in the Midwest dipped back into negative territory in September, defying forecasters&S217; hopes for more gains. And a report on private-sector job losses by ADP Employer Services said the economy shed 254,000 positions in September, more than expected, raising questions about whether the government&S217;s unemployment report on Friday would be weaker than expected.

Although economists predict the unemployment rate will hit 9.8 percent, they are also hoping that the pace of job losses will slow to 180,000.

A slump in the Institute for Supply Management&S217;s Chicago Purchasing Managers Index in September raised questions about the stability of the recovery.

&S220;These are some bad numbers,&S221; said Joseph Saluzzi, the co-head of trading at Themis Trading. &S220;A turn south in P.M.I. when you thought the economy was picking up? That&S217;s not good.&S221;

On Wall Street, where expectations can matter just as much as actual performance, the weaker figures have clashed with investors&S217; hopes for a sharp bounce off the bottom. Economic gauges like home sales, industrial output, manufacturing and trade revved back up this summer, raising hopes that the faltering economy was getting its stride back.

The day&S217;s numbers came on the heels of a drop in sales of previously owned homes and a decline in orders for manufactured goods like civilian aircraft and electronics, and offset enthusiasm from a better-than-expected report on the economy&S217;s overall output this spring.

The Commerce Department reported that the gross domestic product &<51; a billboard number that tallies the country&S217;s economic output &<51; shrank by an annual rate of 0 credit reports free.7 percent from April through June, a revision from earlier estimates of a 1 percent contraction.

It was a sizable improvement from the pace of decline in the first quarter, when the economy shrank at a rate of 6.4 percent as the financial crisis sent shock waves through the economy and caused businesses and consumers to virtually lock down spending and investment.

The numbers for the second quarter appeared to get a lift from the government&S217;s $787 billion stimulus package. Federal, state and local governments spent more, and business spending on equipment and software was better than first reported. Military spending rose, and American exports posted a narrower drop than imports, a balance that lifts the government&S217;s G.D.P. figures.

Economists were heartened by the final revisions after an earlier adjustment found no change in the pace of contraction in the second quarter.

&S220;I think it sets the stage for a stronger rebound in the third quarter,&S221; Mark Vitner, a senior economist at Wells Fargo, said. &S220;The stimulus program may be flowing through a little bit quicker than people had thought. State and local governments were so hard-pressed, and when the stimulus package passed it provided some immediate relief.&S221;

Many expect the economy to bounce back sharply &<51; at least on paper &<51; in the third quarter because of stimulus programs like the $8,000 first-time homebuyer tax credit and the $3 billion cash-for-clunkers program. Many economists anticipate that businesses will begin rebuilding their depleted inventories to make up for month after month of cost cutting.

But none of this suggests that businesses will be creating many jobs anytime soon.

The Federal Reserve chairman, Ben S. Bernanke, has said the economy will feel very weak for some time, and many economists say millions of people will remain out of work even as the economy posts gains. The national unemployment rate, already at 26-year highs, is expected to climb to 9.8 percent when the government reports its monthly job figures on Friday.

Personal spending, which accounts for 70 percent of the economy, fell at a rate of 0.9 percent in the second quarter as people worried about job losses and tried to rebuild their guttered finances. And even though consumers thronged car dealerships when offered government rebates of $4,500 and are buying homes with the tax credits, many economists believe this spending will end once the taxpayer-financed enticements dry up.

Stocks Recover From Early Losses

Hot News: Disney Tries to Pull the Storybook Ritual Onto the Web

BEIJING, Sept. 20 (Xinhua) -- China's major state-owned enterprises (SOEs) under the supervision of the central government reported a 30-percent fall in net profit last year, the country's state assets supervisor said over the weekend.

A total of 141 SOEs under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council reported a net profit of 696.18 billion yuan (101.96 billion U.S. dollars) last year, down 30.8 percent from a year ago, the commission said in an online statement.

Yet, total assets of the 141 SOEs rose for the fifth consecutive year since 2004. Assets of the 141 state firms were worth 5.56 trillion yuan at the end of 2008, up 8.6 percent from the previous year.

Net profit of centrally administered SOEs had been rising for four years in a row from 2004 to 2007, but it fell last year as the global financial crisis struck no fax cash advance.

The commission said 83 out of the total 141 were able to report a year-on-year growth in net profit last year.

These 141 SOEs also turned in taxes worth 1.04 trillion yuan last year, up 18.6 percent from a year ago.

The total assets of centrally administered SOEs were augmented by 2.6 trillion yuan in the past five years, or at an annualized average of 13.7 percent from 2004 to 2008. Special Report: Global Financial Crisis

China's major SOEs report 30% fall in profit last year

HONG KONG (Reuters) – Asian stocks retreated from 13-month highs on Friday as a conflicting picture about the strength of U.S. economic recovery stopped investors from extending this week&&9;s rally but gave some respite to a battered U.S. dollar.

European stocks futures were down 0.4 percent while U.S. equity futures were 0.3 percent lower, pointing to a weak start for shares in Europe and the United States.

Investors in Japan were cautious ahead of a stretch of public holidays early next week even though the Bank of Japan deputy governor, Hirohide Yamaguchi, said a positive business cycle was starting and signaled the central bank could soon withdraw emergency support for corporate funding.

"A pickup in the global economy is expected to continue for some time," Yamaguchi told a forum in Tokyo.

The Nikkei index (.N225) fell 0.7 percent, breaking a three-day rally.

Shares in Shanghai (.SSEC) were down 1.7 percent by early afternoon as investors fretted about the prospect of a sharp rise in shares from upcoming IPOs and worried that recent gains may be overdone.

Stock market jitters took pressure off the dollar, which held above one-year lows reached on Thursday against a basket of currencies (.DXY), although analysts said its respite could be temporary.

"We are seeing a bit of a pullback but the broader U.S. dollar weakness remains intact as it turns to be the currency for carry trades," said Jonathan Cavenagh, currency strategist at Westpac in Australia.

OPTIMISM TEMPERED

Investors across Asia stood back after equities hit their highest level in 13 months on Thursday. While there is growing confidence the global economy is on an uptrend there is uncertainty about the strength of that recovery.

Data on Thursday showed U.S. housing starts hit their highest level last month since November, but a rise in the number of Americans drawing long-term unemployment compensation tempered optimism for a sharp rebound in the world&&9;s biggest economy.

The MSCI index of Asia Pacific stocks traded outside Japan ( bad credit payday advance.MIAPJ0000PUS) dipped 0.6 percent, after surging 80 percent since mid-March when markets started to rally on investors&&9; hopes that the financial crisis had bottomed out.

Shares in Korea bucked the region as the KOSPI index (.KS11) eked out a 0.3 percent gain, helped by foreign investors picking up shares before global index compiler FTSE promotes South Korea&&9;s share market to developed market status, from advanced emerging market, from Monday.

Japanese government bond futures rebounded in early trade as Tokyo stocks fell, but December 10-year JGB futures were virtually flat by late afternoon at 138.55.

Finance Minister Hirohisa Fujii said the government could cut new JGB issuance this fiscal year when the new government reviews an extra budget compiled by the previous government, but gave no details.

Gold edged up to &&6;1,012.20 an ounce from its New York close at &&6;1,011.45, but below an 18-month high of &&6;1,023.85 on Thursday.

Seen as a hedge against potential inflation, gold is likely to stay firm and many market participants still expect it to break through its record high of &&6;1,030.80.

Otherwise, commodity (.CRB) prices slipped on uncertainty about the strength of the global economic recovery and the oil price edged down 34 cents to &&6;72.13 a barrel.

Weaker commodity markets put pressure on shares of Australian resources companies, such as mining giant BHP Billiton (BHP.AX) which fell 2.3 percent, and helped push the Aussie dollar below Thursday&&9;s one-year high.

But shares in Qantas Airways (QAN.AX) jumped 3.7 percent after positive comments on the carrier from broker RBS.

Qantas was also reported to be teaming up with American Airlines and British Airways (BAY.L) to expand an alliance with cash-strapped Japan Airlines (9205.T), whose shares rose 2.4 percent.

(Additional reporting by Anirban Nag in Sydney and Leika Kihara in Tokyo; Editing by Jan Dahinten)

Asian shares retreat, dollar gains respite

HONG KONG (Reuters) – Asian stocks drifted lower after initially hitting a one-year high on Wednesday and the dollar hovered near a one-year low, with investors taking a breather from moving money into riskier assets in the hope that the global recovery is strengthening.

The dollar has been battered this week as market participants have favored high-yielding investments and emerging markets, steering funds away from the safe-haven U.S. currency. Gold&&9;s surge above &&6;1,000 has also raised worries that money is being shifted out of the dollar.

The Australian dollar slipped after Australian retail sales surprisingly dropped in July and housing lending cooled. That raised doubts about how soon the central bank would start raising interest rates.

"There has been sufficient strength in recent data and in comment from policymakers for a shift to a tightening bias at the October meeting," said Patrick Bennett, Asia FX and rates strategist at Societe Generale, referring to the Reserve Bank of Australia.

"What is appropriately being called into question is the timing and extent of the action that follows."

Asia is at the forefront of unwinding ultra-loose monetary policies put in place to stem the shock from the financial crisis. With the growth revival in some countries proving unexpectedly strong, some policymakers worry that cheap money is fuelling asset bubbles.

Australia and South Korea are among the countries seen closest to pulling the trigger on higher rates, with investors focusing on a Bank of Korea meeting on Thursday for clues on how quickly a rate hike could come.

South Korean authorities are among the most concerned about a property price bubble. A report on Wednesday showed household mortgage lending slowed in August after tighter controls.

Portfolio managers have been undaunted by the prospect of monetary policy being normalized, with the process expected to be a drawn out one as officials remain cautious about the recovery&&9;s staying power.

The MSCI index of Asia-Pacific shares outside Japan ( free 3-in-1 credit report.MIAPJ0000PUS) dipped 0.1 percent and gave up early gains that pushed the benchmark to a one-year peak.

So far this year the MSCI APXJ is up 53 percent, outpacing the nearly 23 percent rise in world shares and 10.5 percent increase in the MSCI index of Japanese shares.

Losses were mild across the region, with Japan&&9;s Nikkei average (.N225) dipping 0.3 percent and South Korea&&9;s KOSPI (.KS11) shedding 0.5 percent.

Technology shares remain among the best performing in Asia.

Hynix Semiconductor (000660.KS) rose nearly 1 percent after Merrill Lynch upgraded its rating on the world&&9;s No. 2 memory chip maker to "buy" from "underperform" and tripled its target price to 30,000 won.

In currencies, the dollar was little changed and held near a one-year low against a basket of currencies at 77.268 (.DXY). The euro was flat at &&6;1.4490 after having jumping as high as &&6;1.4535 the previous day.

The dollar&&9;s slide, which analysts partly blamed on model funds dumping the currency due to the break higher in gold prices, has taken it through chart levels that suggest a deeper drop may be in store.

The dollar index has fallen through the 61.8 percent retracement of its rally from a record low hit in March 2008 to its highs reached in March this year, putting it on track to revisit the record low.

Gold rose &&6;5.50 an ounce to &&6;1000.70 and hovered just below the high of &&6;1007.45 hit on Tuesday, putting it on course to target the record high of &&6;1030 hit in March 2008 when the dollar hit its all-time lows.

Safe-haven government bonds edged up on the dip in stocks.

Korean government bond futures were up 11 ticks at 109.98 after hitting a five-week high of 110 in early trade despite the mounting expectations for a rate hike later in the year.

(Additional reporting by Charlotte Cooper in Tokyo; Editing by Jan Dahinten)

Asia stocks dip from 1-year high, dollar battered

SINGAPORE/TAIPEI (Reuters) – Abu Dhabi&&9;s state-owned ATIC offered to buy Chartered Semiconductor (CSMF.SI) for &&6;1.8 billion, while major shareholders in Hynix (000660.KS) began the sale of a &&6;2.8 billion stake, kick-starting consolidation in a chip sector emerging from its worst ever downturn.

Signs of recovery among semiconductor makers that have been hammered by chronic oversupply and weak demand have prompted expectations that stronger players will take out weaker rivals in an effort to boost market share and better control production.

Loss-making Singapore contract chipmaker Chartered Semi, which makes the chips for Microsoft&&9;s (MSFT.O) Xbox 360 game console, has struggled against bigger Taiwan competitors, and the deal with ATIC may help it tide over its financial woes.

"Consolidation in the foundry business has not progressed as much as it has in the memory or logic sectors," Mizuho Investors Securities analyst Yuichi Ishida said. "I wouldn&&9;t be surprised if consolidation should progress further among foundries as development costs on cutting-edge chips grow."

Bigger foundries, which supply chips for fabless chip designers and chipmakers that own their own plants but are increasingly outsourcing production, could spend more to upgrade technology and win more orders for a new-generation of personal computers, cellphones and flat-screen TVs.

Japan&&9;s Toshiba Corp (6502.T) was in talks with Chartered Semi and Globalfoundries about outsourcing production of some of its next-generation system chips to help cut costs, two company sources said on Monday.

Advanced Technology Investment Co (ATIC), fully owned by the Abu Dhabi government, is growing its investments in the semiconductor industry, currently consisting of a facility in Dresden, Germany and a state-of-the-art facility under construction in New York.

Earlier this year, ATIC spent &&6;2.1 billion on a 55.6 percent stake in Globalfoundries, a joint venture with Advanced Micro Devices Inc (AMD.N).

Chartered Semi is 62 percent-owned by Singapore investment agency Temasek Holdings (TEM.UL), which is backing the ATIC deal.

TREMENDOUS CHANGE

"The semiconductor industry has undergone tremendous changes over the last few decades. It&&9;s very clear that technology (is) getting more and more complex and more expensive," Douglas Grose, CEO of Globalfoundries, told a news conference.

Abu Dhabi&&9;s bid followed speculation that top memory chipmaker Samsung Electronics (005930 personal loan for poor credit.KS) of South Korea plans to buy U.S. memory chip designer Rambus (RMBS.O), sending Rambus shares sharply higher on Friday.

State-supported Taiwan Memory Co is leading efforts to consolidate the island&&9;s struggling smaller DRAM memory chip makers and has chosen Japan&&9;s Elpida Memory (6665.T) as a technology partner to jointly develop new chips.

ATIC did not rule out a possible merger of Chartered Semi and Globalfoundries, which could create a major rival to TSMC (2330.TW) and UMC (2303.TW), the two Taiwanese firms that control about two-thirds of the &&6;20 billion chip foundry market.

Analysts saw no imminent threat to TSMC (TSN.N) and UMC (UMC.N), but said pricing pressure could intensify if a combined Chartered/Globalfoundries aggressively boosts market share by selling chips at a relatively lower price.

"If they want to get a bigger market share, they might just use a low-price strategy, but that won&&9;t be a good thing for the whole market in terms of pricing," said Kenneth Lee, a vice president at Taiwan&&9;s Fubon Securities Investment Services.

In Taipei, TSMC shares closed up 3.3 percent and UMC gained 4.9 percent on optimism over rising sales in the fourth quarter. Both outpaced the main TAIEX&&9;s (.TWII) 1 percent rise.

Toshiba gained 3.4 percent in a Tokyo market (.N225) up 1.3 percent.

STRUGGLING SECTOR

Korea Exchange Bank (004940.KS) said former creditors, and now shareholders, of Hynix Semiconductor Inc would this week invite bids for a stake in the world&&9;s No.2 memory chipmaker, and planned to pick a preferred buyer by the year-end.

The buyer of the stake will gain control over loss-making Hynix. Steelmaker POSCO (005490.KS) and consumer electronics giant LG Electronics (066570.KS) have been touted as potential acquirers.

Although prospects are brighter for the memory chip sector, battered by a steep 2-½ year downturn and falling prices, analysts were not optimistic about a quick sale of Hynix.

"Hynix couldn&&9;t find a suitable investor for many years, and the situation is unlikely to change all of a sudden," said Peter Yu, an analyst at BNP Paribas in Seoul.

(&&6;1=1.438 Singapore Dollar)

(Additional reporting by Mayumi Negishi in TOKYO, Marie-France Han and Kim Yeon-hee in SEOUL, Editing by Ian Geoghegan)

Abu Dhabi to buy Chartered; Hynix stake up for grabs

Hot News: Asia stocks up on US jobs, Aussie hits 1-year high

LONDON (Reuters) – The G20 will promise this weekend to keep economic support packages in place until recovery is certain and seek to reassure financial markets they have credible plans to withdraw the stimulus when appropriate.

Finance ministers and central bankers from the Group of 20 developed and emerging nations are meeting in London to discuss the economic outlook, curbs on bank bonuses, tighter financial regulation and reform of international institutions.

Since their leaders met in April in the midst of the worst global recession since the Great Depression, prospects for the world economy have improved with growth returning in a number of countries and stock markets powering ahead.

But policymakers are cautious about declaring victory yet.

"Unwinding the stimulus too soon runs a real risk of derailing the recovery, with potentially significant implications for growth and unemployment," said International Monetary Fund chief Dominique Strauss-Kahn at a conference in Berlin on Friday.

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.

"The biggest risk is to think that the job&&9;s done -- that recovery is guaranteed. No country can be complacent -- we&&9;ve got to see this through," British finance minister and meeting host Alistair Darling said late on Thursday.

Still, with interest rates at record lows and trillions of dollars thrown into their economies to fight the crisis, policymakers are also keen to show they have exit strategies in place lest financial markets take fright that inflation will rocket and public finances fall apart.

"Now is not the time to exit. But I would like to make it clear that the ECB has a strategy, and we stand ready to put it into action when the appropriate time comes," said European Central Bank President Jean-Claude Trichet said in Frankfurt.

BONUS CURBS

With unemployment still likely to rise for a while and eat into incumbent government poll ratings, the politicians are also looking for someone to blame and will stress that banks cannot return to business as normal paydayloans.

France, Germany and Britain on Thursday put forward joint proposals to change the bonus culture at banks that many say was the root of the current crisis. These include deferrals and subjecting payments to clawback but fall short of the tax being advocated by some charities.

Ministers who are laying the groundwork for a leaders&&9; summit in Pittsburgh later this month will also look at enhanced regulation of systemically important banks and ways in which these institutions can be wound up if needed without shaking the financial system.

U.S. Treasury Secretary Timothy Geithner is pressing the G20 to back tough new international standards for bank capital and liquidity. The U.S. Treasury said on Thursday a comprehensive agreement should be reached by the end of 2010, with countries implementing the standards by the end of 2012.

Other issues on the table are ensuring the IMF gets the full resources promised to it at April&&9;s London summit when leaders pledged a mammoth &&6;1.1 trillion increase in the lender&&9;s firepower.

Dinner on Friday will discuss how the IMF and the World Bank can be reformed to reflect better the emergence of the new economic powers.

Representatives from Brazil, Russia, India and China will meet on the sidelines of the meeting and Geithner is expected to join them.

U.S. President Barack Obama&&9;s administration also wants to make climate change a big issue for the Pittsburgh summit and will call on fellow G20 members to eliminate fossil fuel subsidies and increase oil market transparency.

(Additional reporting by Noah Barkin in Berlin, Krista Hughes in Frankfurt, writing by Sumeet Desai, editing by Mike Peacock)

G20 to pledge stimulus until economic recovery certain

The simmering conflict between Armenia and Azerbaijan has entered a new theater: the Eurovision Song Contest.

The talent show, in which television audiences help select a winner from among dozens of European national champions, is supposed to be apolitical. Voters are barred from supporting their country&S217;s representatives in the competition, which is organized by the European Broadcasting Union, a group of public television companies.

But some Azerbaijanis who took impartiality to impressive lengths, voting for the Armenian entry in the 2009 final in May, reportedly were called in to the Azerbaijani National Security Ministry.

&S220;They were trying to put psychological pressure on me, saying things like, &S216;You have no sense of ethnic pride; how come you voted for Armenia?&S221;&S217; one of them, Rovshan Nasirli, told Radio Free Europe. &S220;They made me write out an explanation, and then they let me go.&S221;

Previously, the Armenians had raised tensions by slipping images of a memorial in Nagorno-Karabakh, the enclave at the center of the dispute between the countries, into the video presentation that introduced their representative in a preliminary round faxless payday loan.

Ictimai, the Azerbaijani public television company, said last week that it had been assured that &S220;no one was invited to or interrogated at the Ministry of National Security with regard to the 2009 Eurovision Song Contest.&S221;

&S220;Therefore, all reports on this issue in the media are groundless and continuing them does not follow any logic,&S221; Ictimai said in a statement.

But the European Broadcasting Union said Friday that it would examine the matter further at a meeting in September in Oslo. &S220;Any breach of privacy regarding voting, or interrogation of individuals, is totally unacceptable,&S221; Jean R&>33;veillon, director general of the broadcasting union, said in a statement.

A Song Contest Becomes a Hot Spot in Feud Between Countries

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Nearly a year after its deal to purchase Merrill Lynch, Bank of America is still on the defensive.

The bank, along with the Securities and Exchange Commission, on Monday defended a settlement over the bank&S217;s failure to disclose details about Merrill&S217;s bonuses ahead of a shareholder vote on the merger.

In its court filing, Bank of America said it acted properly when it did not disclose details of the bonuses and said it believed its view would prevail in court if the matter were put to test.

And the S.E.C. said in its filing that the settlement was the result of an &S220;arms-length negotiation.&S221;

The court filings were in response a ruling by Federal District Court Jed S. Rakoff of Manhattan who demanded two weeks ago that the bank and the S.E.C. provide a better explanation of its settlement over the bank&S217;s failure to disclose the bonuses.

Judge Rakoff said the bank&S217;s $33 million settlement with the commission seemed &S220;strangely askew,&S221; and he questioned the S.E.C.&S217;s decision to charge the bank at the corporate level rather than individual executives.

The judge requested that Bank of America supply the names of people who decided last year not to disclose the bonuses. He said he wanted to know the &S220;who, what, where&S221; behind the creation of the bank&S217;s proxy statement, the document provided to shareholders before they voted on the merger.

&S220;I cannot ignore issues of responsibility,&S221; Judge Rakoff said at the hearing on Aug. 10. &S220;Was there some sort of ghost that performed those actions?&S221;

The bank did not detail which of its directors or executives were involved in the proxy disclosure decisions. It did, however, name the law firm that represented it during the merger proxy, Wachtell, Lipton, Rosen &&8; Katz. And the bank said that Merrill Lynch&S217;s firm was Shearman &&8; Sterling.

The bank also listed the names of the directors on Merrill&S217;s compensation committee and pointed out that the S.E.C. did not claim &S220;intentional, knowing or even reckless conduct on the part of Bank of America.&S221;

Merrill&S217;s $3.6 billion in bonuses have been scrutinized in Congressional hearings this summer as well as in documents released by the New York attorney general. And Judge Rakoff said in his hearing that the bonuses seem to have been essentially paid using taxpayer money, since Bank of America had received $45 billion in bailout funds.

But the S.E.C. said that the &S220;extensive publicity&S221; around Merrill&S217;s bonuses did not elevate the standard of review for the case.

And the bank said it was important to focus on the issue of disclosure of the bonuses, rather than their size.

&S220;This case is not about the decision by Merrill Lynch&S217;s board to award the incentive compensation that it did,&S221; the bank&S217;s lawyer, Lewis J. Liman, wrote. &S220;Bank of America recognizes that decision has been the subject of controversy.&S221;

The case, the S.E.C. wrote, is about disclosure and not potential misuse of government funds, adding that bank executives were not responsible for the disclosures.

&S220;The negotiation and preparation of all of the relevant legal documents was handled by the law firms that had advised Bank of America and Merrill in connection with the merger,&S221; the S.E.C. wrote.

&S220;Although the extent to which taxpayer money was used indirectly to pay these bonuses plainly is a matter of public importance, it does not, in and of itself, give rise to a federal securities law violation,&S221; the S.E.C. wrote.

Bank of America spent most of its memo on the defenses it would make in court. The bank said there was no false or misleading information in the proxy. And the bank accused the S.E.C. of seizing on &S220;a single sentence fragment&S221; for the accusations.

Furthermore, the bank pointed to Merrill&S217;s financial statements, which showed last fall that money was still set aside for compensation at similar levels to the previous year, even after the merger was announced. The bank also said shareholders would have known of the bonuses because several media outlets wrote about them in general terms in advance of their payment.

Two legal experts wrote affidavits to accompany the bank&S217;s filing, and both said the bank acted appropriately in its disclosure. One, Morton A. Pierce, the chairman of Dewey &&8; LeBoeuf&S217;s mergers and acquisitions group, was paid for his memo. The other, Joseph A. Grundfest of Stanford Law School, wrote his memo on a pro bono basis because he was concerned the S.E.C. would have a hard time settling future issues if Judge Rakoff did not approve its deal with Bank of America.

The S.E.C. is expected to file its memo to the judge by the end of the day. Then both parties will have two weeks to respond to each other&S217;s filings. If Judge Rakoff does not approve the $33 million settlement, then the S.E.C. will probably drop the case, renegotiate the settlement amount or take it to court.

Bank of America Defends Its S.E.C. Settlement

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