LONDON (MarketWatch) -- European stocks traded in a tight range Wednesday after setting fresh 14-month highs in the previous session, with Swiss pharmaceutical company Basilea falling sharply after a setback on a key drug.

The Dow Jones Stoxx 600 index fell 0.1% to 253.97 after Tuesday marked the index's highest close since October 2008.

Among the main country indexes, the German DAX 30 index fell 0.1% to 6,004.58, the French CAC 40 index dipped 0.03% to 3,959.52 and the U.K.'s FTSE 100 index rose 0.1% to 5,441.15.

Basilea was the standout faller, with its shares dropping 28% after the company, which holds the patent on ceftobiprole, said the U.S. Food and Drug Administration had rejected Johnson & Johnson's application to market the drug.

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The FDA said some of the data underpinning the drug application were "unreliable or unverifiable," and recommended that two new studies be carried out, according to a statement from Basilea.

There were relatively few other big movers in Europe, though Bank of Ireland lost 2.7% in Dublin in a mixed session for European bank stocks.

Airlines were also mostly lower, with Ryanair Holdings down 1.5% and easyJet down 1% in London and Air France-KLM down 0.6% in Paris.

Shares in Japan Airlines had earlier plunged around 25% in Tokyo on concerns that the struggling group may file for bankruptcy protection.

Among stocks rising Wednesday was medical-supplies distributor Euromedis Group , which gained 9.6% in Paris after reporting an 11% rise in its fiscal first-quarter revenue.

Europe Markets: European shares in tight range as Basilea slumps

PARIS &S212; Spyker Cars, the tiny Dutch automaker whose last-ditch bid for Saab was rejected Friday by General Motors, came back Sunday with a renewed offer for the struggling Swedish icon, which G.M. has said it plans to shut down.

A spokesman for G.M. reacted cautiously to Spyker&S217;s new offer, which many industry insiders consider a long shot. However, he said other potential buyers had expressed interest in Saab since Friday&S217;s announcement.

&S220;We continue to wind down Saab but during that process we&S217;ve received several expressions of interest and we evaluate these offers as they come, but beyond that we&S217;re not making any comment,&S221; said Chris Preuss, the G.M. spokesman.

G.M. said Friday that it did not think a deal could be concluded by its Dec. 31 deadline because of concerns about Spyker that arose during the final negotiations. G.M. said that left it no alternative but to begin winding down Saab&S217;s operations in Trollhattan, Sweden.

Upping the ante Sunday, Victor Muller, Spyker&S217;s chief executive, said he had presented G.M. with an 11-point proposal that addressed the automaker&S217;s concerns. He imposed a deadline of his own of 5 p.m. Eastern Standard Time on Monday for G.M. to respond to his offer.

&S220;Despite our collective 11th-hour set-back, we are returning to the table with a renewed offer that addresses every known issue brought to light during the initial negotiations and that has the full backing of the Saab Management,&S221; Mr. Muller said in a statement.

Publicly, G.M. executives declined to identify their problems with Spyker, but several officials familiar with the negotiations said G.M. was troubled by Spyker&S217;s reliance on Russian loans to finance the deal, as well as the fate of its proprietary technology under Spyker.

The biggest investor in Spyker is the Russian bank Convers Group, which is controlled by Alexander Antonov, a tycoon who was shot seven times and reportedly lost a finger in a failed assassination attempt in Moscow in March.

His son Vladimir, 34, is a top executive at Convers and chairman of Spyker.

In the first half of 2009, Spyker borrowed &S364;11.6 million, or $16.6 million, from Bank Snoras, a Lithuanian bank also controlled by the Antonovs.

Another snag had been the question of whether Spyker could win a &S364;400 million loan from the European Investment Bank that had been part of an earlier plan to sell Saab to Koenigsegg, a Swedish maker of high-end sports cars. That deal collapsed last month.

In his statement Sunday, Mr. Muller said Spyker, whose specialty sports cars retail for roughly a quarter-million dollars each, could complete the deal without the European Investment Bank&S217;s help.

&S220;The new offer eliminates the need for an E.I.B. loan approval prior to year-end, for example, which will allow the deal to be concluded within G.M.&S217;s deadline,&S221; he said.

&S220;Our company motto is nulla tenaci invia est via &S212; for the tenacious no road is impassable,&S221; Mr. Muller added. &S220;And we intend to remain true to that throughout these negotiations as we bid to secure Saab&S217;s future and revive the company.&S221;

In Trollhattan, which was hit hard by Friday&S217;s announcement, the new Spyker offer provoked a brief flurry of hope.

&S220;It&S217;s good news, of course, but it&S217;s difficult to say too much,&S221; said Paul Akerlund, chairman of the IF Metall union at Saab, which represents about 1,500 of the automaker&S217;s 3,500 employees in Trollhattan infrared heaters. &S220;Now we&S217;re waiting to see what G.M. says, but we know Spyker really wants to buy Saab.&S221;

&S220;People still have hopes but they&S217;re waiting on G.M.,&S221; he added.

Saab was set to introduce a new version of its 9-5 luxury sedan in showrooms in April, the first update of the company&S217;s top-end car in 12 years. But G.M. said Friday the car would not make it to market if Saab does indeed shut down.

The region around Trollhattan and Gotenburg in western Sweden is home to both Saab and Volvo, and Saab&S217;s collapse would devastate the network of parts makers and other firms that supply the two companies.

On Saturday, the Swedish press reported that a consortium of local investors was considering a new bid for Saab, which, along with Volvo and Ikea, is among the country&S217;s best-known brands.

Even as the Saab drama plays out, Volvo Car is in the final stages of being sold by Ford Motor to Zhejiang Geely Holding of China.

After G.M.&S217;s decision to walk away Friday, Mr. Akerlund said, &S220;some people were frustrated, some were angry and some were sad. Maybe this new offer can help so we can have a solution at the end of the day.&S221;

Since the beginning of the year, G.M. has been trying to unload Saab, which has been a perennial money-loser despite a devoted following in Scandinavia, the northeastern United States and parts of Europe.

With sales of just 93,000 cars worldwide, Saab proved too small to draw the interest of bigger automakers that are looking to global alliances to achieve new economies of scale. That left the field of bidders to far smaller companies like Koenigsegg and now Spyker.

Turning around Saab would be a huge challenge for Spyker, given G.M&S217;s. inability to turn a profit at the subsidiary as well as Spyker&S217;s lack of experience in mass car manufacturing. Spyker sells 30 to 50 high-performance sports cars a year, which are made to individual order.

&S220;It&S217;s something of a long shot, and I wonder if Spyker has the depth of management to deal with a company the size of Saab,&S221; said Peter Wells, co-director for industry research of the Center for Automotive Research at Cardiff University in Wales. &S220;I don&S217;t think Spyker can float Saab for a significant amount of time,&S221; he said.

The longer Saab&S217;s fate hangs in the balance, he added, the longer the odds of saving it.

&S220;Every day that goes by the brand gets more damaged, especially in the eyes of consumers,&S221; Mr. Wells said. Despite Saab&S217;s famously loyal customer base, he said, &S220;it&S217;s very difficult to recover from that.&S221;

Even if the Spyker bid fails &S212; and other buyers don&S217;t emerge to rescue Saab &S212; G.M. said warranties will still be honored and Saab owners around the world will still be able to find parts and service.

In all, 1,100 dealerships worldwide will be affected, including about 200 in the United States.

Tiny Automaker Renews Saab Offer

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

WASHINGTON (Reuters) – The U.S. Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday.

"I think the Fed has done an extraordinary job and it&&9;s done a huge amount (to bolster employment). There&&9;s just so much monetary policy and the central bank can do. And I think they&&9;ve gone to their limits, at this particular stage," Greenspan said on NBC&&9;s "Meet the Press."

"You cannot ask a central bank to do more than it is capable of without very dire consequences," Greenspan continued, saying the United States faced a serious long-term threat of inflation unless the Fed begins to pull back "all the stimulus it put into the economy."

Greenspan, who headed the central bank from 1987 to 2006, also expressed concern about a congressional effort he said would "very significantly compromise" the Fed&&9;s independence.

The House of Representatives on Friday passed sweeping financial reform legislation that includes a provision allowing a congressional watchdog agency to audit the Fed&&9;s monetary policy operations.

That reflects concerns the Fed did not do enough to head off the worst U.S. economic downturn since the Great Depression easy online payday loans.

"What you will be getting is a monetary policy more dedicated to political short-term considerations, not to the longer-term considerations which the Federal Reserve Act is specifically constructed to do," Greenspan said.

Greenspan said he expected the U.S. unemployment rate, which is currently at 10 percent, to "be significantly lower a year from now" but still very high.

The U.S. Census Bureau&&9;s plan to hire close to 800,000 workers by April will take several tenths of a percent off the unemployment rate, he said.

The recovery in the stock market over the last six to nine months helps by putting many individuals and companies in a stronger position to spend money, he said.

The Federal Reserve will have to begin raising interest rates from current very low levels as both the economy and loan demand improve, he said.

"Remember, loan demand has been very dull because businesses are very heavily liquidating inventories. That&&9;s coming to a halt and when that happens loan demand will come back and the pressures on short-term interest rate will begin to grow," Greenspan said.

(Editing by Doina Chiacu)

Fed can do no more to cut unemployment: Greenspan

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

NEW YORK (Reuters) – Gold retreated from a record high above &&6;1,120 an ounce on Thursday and global stocks lost ground as doubts about a lasting economic recovery underpinned the dollar.

Stocks slumped as the U.S. dollar strengthened against other currencies, also on technical factors.

The yellow metal pushed to a record high on the momentum of months of dollar weakness, only to drop &&6;15.35 to &&6;1,102.40 as the currency recovered. A weak greenback makes metals priced in dollars less expensive for holders of other currencies.

Gold&&9;s rally from near &&6;800 an ounce in January and the upcoming yearend also prompted investors to book profits.

"Gold&&9;s weakness (on Thursday) was a reflection of profit-taking after the metal&&9;s recent impressive run," said Peter Buchanan, commodities analyst at CIBC.

The dollar also rose after the euro failed to break through and hold above the psychologically important 1.50 level. The euro declined 0.92 percent to &&6;1.4843. The dollar rose 0.56 percent against the Japanese yen, to 90.32 yen.

Prospects that U.S. interest rates will remain at negligible levels for some time are expected to continue weighing on the dollar. It rebounded 0.67 percent against a basket of major currencies on Thursday but is still down nearly 1 percent this month and 14.5 percent since early March.

With a light economic data calendar on Thursday, apart from strong Australian jobs numbers that boosted the Aussie dollar to a 15-month high, the broader market consolidated.

In the U.S., the Labor Department reported that first time claims for unemployment insurance fell to 502,000 in the latest week from 514,000 in the previous period. That was less than forecast, but supported the view of a fragile recovery ay day loans.

STOCKS WEAKER

World stocks weakened, with the MSCI all-country world index (.MIWD00000PUS) down 0.9 percent and the emerging market component (.MSCIEF) off 1.36 percent.

The main U.S. indexes drifted lower. The Dow Jones Industrial Average (.DJI) busted a six-session rally as a stronger dollar hurt commodity shares. Wal-Mart Stores Inc (WMT.N), the world&&9;s biggest retailer, forecast holiday profit that could miss Wall Street expectations but its shares still managed a slight gain.

The Dow Jones average fell 93.79 points, or 0.91 percent, to 10,197.47. The Standard & Poor&&9;s 500 Index (.SPX) declined 11.27 points, or 1.03 percent, to 1,087.24 and the Nasdaq Composite Index (.IXIC) edged lower by 17.88 points to 2,149.02.

European shares dropped with the FTSEurofirst 300 (.FTEU3) index off 0.1 percent to 1,014.91.

Investors globally remained fairly bullish, however, with signs parts of the world economy are gaining traction.

The Baltic Dry Freight Index (.BADI), which can be a proxy for world trade patterns, rose 5.5 percent, pushed up by freight of iron ore to China.

"A 10th straight increase for the Baltic Dry and a 15-month high for AUD/USD (Australian/U.S. dollar) do not imply that sentiment is about to turn over," Kenneth Brough, an economist at Lloyds TSB, said in a research note.

U.S. Treasuries climbed after the government wrapped up &&6;81 billion of sales this week, and as falling stocks increased the allure of bonds as a haven from risk.

The yield on the benchmark 10-year Treasury note fell by 0.04 percentage point to 3.44 percent.

Dollar bounce triggers gold fall, stocks drop

Hot News: APEC Ministers say Economic Recovery is Fragile

Deputy commander of the Iranian Revolutionary Guard's ground force, Gen. Noor Ali Shooshtari is among those killed in the attack, Sunday, 18 Oct. 2009

Iranian state media report that a suicide bomber in the troubled southeast killed at least 30 people early Sunday, including six commanders of Iran's elite Revolutionary Guard force.  Iranian state media say the suicide bomb blast killed the deputy commander of the Revolutionary Guards ground forces and the commander of the Guards in the troubled Sistan Baluchistan region, which borders Pakistan.The reports say the attacker targeted people gathering in the city of Pisheen for a reconciliation meeting between local Shi'ite and Sunni leaders.  Minority Sunni groups, in particular ethnic Baluchis, have long complained of discrimination in the Shi'ite dominated country.The chief prosecutor in the region was quoted as saying the Sunni insurgent group Jundallah, or Soldiers of God, claimed responsibility for the attack.  There has been no direct word from the group, which has carried out anti-government attacks in the past.Paul Ingram, co-director of the London-based  British-American Security Information Council, notes that similar attacks have been going on for years.  But he says this one stands out. "This is a very unusual attack in as much as it appears to be a successful attack upon the Revolutionary Guards at such a high level involving so many of the senior officers," he said online cash advance.Iran's speaker of parliament, Ali Larijani, accused the United States of being behind the attacks.   The U.S. State Department condemned what it called "this act of terrorism" and mourned the loss of innocent lives.  It said allegations of U.S. involvement were "completely false." Security analyst Paul Ingram says such allegations are problematic. "It is very difficult to really pin down and there have been these sorts of accusations from the Revolutionary Guards in the past," he said.Ingram notes the Iranian government has an interest in deflecting blame to foreign elements.Tehran is under pressure both at home, over the disputed presidential election in June, and abroad, for its controversial nuclear program, which the United States suspects could be aimed at developing nuclear weapons.  Iran, which denies that charge, has recently agreed to allow western inspectors to look at a newly revealed uranium enrichment facility and has been holding talks with the United States and other western nations on ways to ease concerns about its nuclear program.

Suicide Blast in Iran Kills Top Revolutionary Guard Leaders

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

CHICAGO, Oct. 8 (Xinhua) -- A U.S. bankruptcy judge on Thursday approved the sale of Sun-Times Media Group to a group of Chicago businessmen led by James Tyree.

According to sources of Sun-Times Media Group, the sale is expected to close by the end of October.

Tyree's group, STMG Holdings LLC, offered about 25 million U.S. dollars, 5 million dollars in cash and about 20 million dollars in liabilities, to purchase the publisher of the Chicago Sun-Times and its 50-plus sister papers.

The bid came with a request for steep pay cuts and other concessions from 16 unions, 14 of which have approved the contract changes online cash advances.

The closing remains contingent upon approvals by the two other bargaining units, which are expected to be reached in the coming days, the company said.

"We're very pleased and very excited with this result," said Sun-Times Media Group interim CEO Jeremy Halbreich. "It could not have happened without the dedication and hard work of our employees."

Bankruptcy judge approves Sun-Times Media sale to Tyree group

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

NEW YORK (Reuters) – U.S. stocks could hit more speed bumps this week if the start of the third-quarter earnings season offers little evidence that the economic recovery is gaining strength.

With second-quarter earnings primarily boosted by cost-cutting, investors want to see if the latest quarterly results will show an improvement in revenues. That&&9;s a priority for investors because revenue growth is deemed a crucial indicator of consumer and corporate spending.

Aluminum company Alcoa Inc (AA.N), a Dow component, is scheduled to post quarterly results on Wednesday after the market&&9;s close, marking the unofficial kickoff of the latest earnings parade.

The other marquee names on this week&&9;s brief earnings calendar are PepsiCo (PEP.N), Yum Brands Inc (YUM.N), Costco Wholesale Corp (COST.O) and Monsanto Co (MON.N).

Investors are clamoring for more solid signs of economic stability after the Standard & Poor&&9;s 500 (.SPX) has climbed 51.5 percent from a 12-year closing low on March 9.

SHOW US THE MONEY

By that score, the latest quarterly earnings are a high-stakes endeavor, with investors saying to Corporate America: "Show us the money."

William Rutherford, president and chief investment officer of Rutherford Investment Management in Portland, Oregon, said that "earnings have to be good enough to justify the run-up we&&9;ve had.

"We haven&&9;t got all the problems solved by any means," he added. "We&&9;re still going to see bumps along the way."

Indeed, a string of surprisingly weak economic reports in recent days gave investors a cold reminder that the recovery will not be without hitches, even with the massive stimulus from the government.

On Friday, dour news came from the government&&9;s nonfarm payrolls report showing that U.S. employers shed far more jobs in September than expected. The jobs data put the stock market&&9;s bulls on the defensive. And this week could be just as daunting if there are few positive surprises.

The benchmark S&P 500 suffered its second straight weekly drop on Friday, and it is down 4.3 percent from its September 22 close, its highest finish since the current rally began.

"The next big thing we&&9;re going to talk about is earnings," said Ryan Detrick, senior technical strategist at Schaeffer&&9;s Investment Research in Cincinnati, Ohio savings account payday loans. "Usually after the first couple of days, you get a feel as to what the overall trend is going to be."

Thomson Reuters data show that third-quarter earnings are forecast to drop 24.7 percent from a year earlier, a projection that gives companies a low hurdle to overcome following a surprisingly improved second quarter.

MERGER WATCH AND BERNANKE

More takeover deals could also dictate this week&&9;s market action -- if there are any, according to analysts.

A flurry of takeovers over the last two weeks has dominated the headlines as companies jostle to bolster their revenue streams in an uncertain economy.

"With many companies&&9; growth challenged, we are seeing the tip of the iceberg in M&A," said Scott Billeaudeau, portfolio manager at Fifth Third Asset Management in Minneapolis.

Notable deals in the past week included Xerox Corp&&9;s (XRX.N) planned purchase of Affiliated Computer Services Inc

(ACS.N).

On Thursday, Mexican brewer and bottler FEMSA said it was in talks with several companies about a possible deal involving its beer business.

This week&&9;s economic calendar is light. But on Monday, the spotlight will be on the Institute for Supply Management&&9;s September index of activity in the vast U.S. services sector.

According to a Reuters poll of economists, the ISM non-manufacturing index, or services index, is forecast to have rebounded to 50.0, the dividing line between contraction and growth, after hitting 48.4 in August.

Investors also will pay attention to monthly sales reports, due on Thursday, from major retailers to assess how consumers are faring as the job market remains weak.

Federal Reserve Chairman Ben Bernanke will be on center stage as he is scheduled to give a speech on the U.S. central bank&&9;s balance sheet before a Fed conference in Washington on Thursday. The next day, Fed Vice Chairman Donald Kohn will speak on monetary policy and the financial crisis at the same conference.

(Editing by Jan Paschal )

Wall Street Week Ahead: Stocks may hit earnings speed bumps

HONG KONG (Reuters) – Asian stocks edged higher on Wednesday, with thin summer trading volumes keeping prices choppy and centered on short-term chart targets, while oil hovered near &&6;72 a barrel, capped by a surprising rise in U.S. inventories.

U.S. single-family home prices grew for a second straight month, a report showed overnight, confirming the recovery is on track.

However, having already priced in an upturn in the global economy, investors were looking for more signs that growth can be sustained once the impact of massive government stimulus spending fades.

Volatility in Chinese shares has also kept investors guessing. The Shanghai composite index is down 14 percent so far in August, on track for the biggest monthly decline since the darkest month of the financial crisis in October 2008.

The precipitous move triggered questions on whether other high flying equity markets were due for a correction. However, to what extent a decline in the Chinese market, which is largely closed to foreign investors, matters for global market trends and perceptions of risk is an open question.

Japan&&9;s Nikkei share average drifted up 0.6 percent, within reach of a 10-month high reached earlier in August.

"The (U.S. economic) data is encouraging because it points to continued economic improvement, but the Nikkei won&&9;t rise that much because investors are a bit wary about the chances of an adjustment. After all, it has risen around 50 percent since March," said Kenichi Hirano, operating officer at Tachibana Securities in Tokyo.

Shares of index heavyweight Toyota Motor Corp (7203.T) rose 1.5 percent on a report the carmaker would cut global production capacity and post an operating profit in the 2010 financial year.

However, while news of the output cut shored up the stock, it also reinforced worries about persistent weakness in global consumer demand, which is key to a solid recovery.

The MSCI index of Asia Pacific stocks traded outside Japan rose 0.1 percent (.MIAPJ0000PUS), weighed by weakness in the technology and consumer discretionary sectors -- two of the most expensive segments of the Asian market.

Hong Kong&&9;s Hang Seng index (.HSI) was up 0.3 percent but remained susceptible to ups and downs in the Shanghai composite index (.SSEC), which was up 0.6 percent.

The Ifo survey of German business sentiment is expected to show an across the board pickup later on Wednesday, playing into the story that recoveries are taking hold around the world.

However, in a worrying development, Japan&&9;s exports slipped in July as annual drops in exports to the United States and China accelerated, in a sign that the impact of stimulus measures in major economies worldwide may be starting to wane.

"Things have stopped getting worse, but a return to trend gains in production and trade is a pipe-dream," Patrick Bennett, Asia foreign exchange and rates strategist with Societe Generale in Hong Kong, said in a note.

U.S. oil futures for October delivery were largely unchanged on the day around &&6;72 after a 3 percent drop overnight on profit taking after the market was unable to push crude above &&6;75 a barrel.

Inventory data from the American Petroleum Institute late on Tuesday showed a big buildup in U.S. crude oil stocks last week, keeping a lid on the market.

Still, that appeared only a short-term setback. Analysts raised their 2010 median price forecast for a fifth straight month to &&6;73.39.

The yen edged up in quiet trade, lifted by Japanese exporters and short-term investors.

The U.S. dollar slipped 0.2 percent to 93.98 yen. Sterling fell 0.4 percent to 153.33 yen, and the euro was down 0.2 percent to 134.38 yen.

The Australian dollar inched up 0.1 percent to US&&6;0.8357 and this week has been less reactive to domestic Chinese stock market moves. Earlier in August, sudden drops in the Shanghai market sucked the Australian currency down with it.

(Additional reporting by Elaine Lies in Tokyo)

(Editing by Kim Coghill)

Asia stocks edge up; eyes on oil and China

Hot News: Political Risks for German Chancellor as G.M. Wavers on Deal for Opel

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

Hot News: Global Stocks Build on U.S. Data

BERLIN &<51; Chancellor Angela Merkel of Germany is calling on General Motors to choose a winner for Opel, the automaker&S217;s troubled German unit, as early as this week, saying tens of thousands of jobs depended on the decision.

&S220;I regret that there has been no closure over this process,&S221; Mrs. Merkel told German television on Saturday, lamenting that the American company&S217;s board failed to resolve the fate of its European operations when it met Friday in Detroit.

Mrs. Merkel, who faces re-election in about a month, said she favors a bid from Magna International, the Canadian auto-parts manufacturer that is being backed by Russia&S217;s largest state-owned bank. Russia also wants the deal because it would help modernize the nation&S217;s auto industry and give the Kremlin a better foothold in German manufacturing.

General Motors favors another bidder, the Belgian investor R.H.J. International, because it would give G.M. the option of reintegrating Opel once its own financial problems were solved.

Mrs. Merkel telephoned President Obama last week, asking him to encourage G.M. to reach a quick decision. In the spring, she had urged Mr. Obama to spend Treasury money on helping Opel, an idea rejected by the automotive task force, which said it was a decision for General Motors to make.

The governments of Germany and the states where Opel plants are located said last week that they were willing to provide up to 4.5 billion euros, or $6.4 billion, in loan guarantees for Magna to take over Opel, despite Magna&S217;s plan to cut over 3,000 jobs in Germany. The government is also considering providing a 1.5 billion euro credit line that Opel says it needs between now and November.

Germany&S217;s economics ministry, which has been leading the negotiations to sell Opel, said Sunday that the government was sticking to its position. &S220;We support Magna. But right now, we do not know what G.M.&S217;s timetable to continue negotiations is,&S221; a spokesman said.

Under a deal with Magna, G.M. would retain a minority stake of 35 percent, but lose influence over Opel&S217;s production and distribution in Europe. R.H.J International would allow G.M. to keep control over Opel&S217;s technology. G.M. plans to ask Germany for more information about financing options, including money for R.H.J., which Germany has not offered.

Germany&S217;s economics minister, Karl-Theodor zu Guttenberg, told a German newspaper Saturday that he could not understand the delay by G.M. and regretted it.

&S220;We provided G.M. with all the necessary information,&S221; he added.

Mr. Guttenberg had been skeptical about saving Opel because of the extent of G.M.&S217;s financial woes, the poor state of the global car industry and Opel&S217;s lack of competitiveness with BMW, Daimler and Volkswagen. But in the last few months Mr. Guttenberg has changed his opinion and lobbied to save Opel.

Germany Presses G.M. to Decide Opel’s Fate

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Filed at 9:27 a.m. ET

BERLIN (AP) -- The homes of Porsche SE ex-chief executive Wendelin Wiedeking and his former finance chief have been searched as part of a probe into suspicions of market manipulation, prosecutors said Saturday.

The Stuttgart prosecutors' office confirmed a report in Spiegel magazine that the homes of Wiedeking and Holger Haerter had been searched as a routine measure in the investigation.

No further details were available.

Porsche spokesman Frank Gaube said he could not comment on details of the investigation, but reiterated that the firm rejects the allegations.

Last week, Porsche confirmed that both Wiedeking and Haerter were being investigated by Stuttgart prosecutors in connection with the company's unsuccessful attempt to acquire larger automaker Volkswagen AG.

At the time, a spokeswoman for prosecutors, Claudia Krauth, confirmed that an investigation was under way into suspicions of market manipulation and passing on inside information. She declined to give any details.

Porsche's Stuttgart offices were searched last week and prosecutors seized documents.

Wiedeking and Haerter, who had championed Porsche Automobil Holding SE's (OOTC:POAHF) failed drive to take over VW, stepped down last month.

Porsche Ex-C.E.O.’s Home Searched in Criminal Probe

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