Investors wondering whether another camp tech bubble bursts

1:00 PM another, bubble, bursts, investors, whether, wondering No Comments

Is Facebook still fall? Weigh Pacific Crest securities analyst Evan Wilson and Michael Pachter, Wedbush securities analyst, with trade across the social network company.

The share price value of some of the most well known social media stocks in the doldrums, investors in these companies have itself a question recently: we have again fool get?

During the so-called Internet bubble plowed before a decade investors like money in scores of new Internet companies, which had virtually no sales growth, bets, that technology would change the world and the new dot-coms eventually would turn a profit.

After the collapse of some dotcom names such as Amazon.com, but eventually again and move higher, but in many cases, investors have been proved wrong and the companies, which in investing, had collapsed.

Some are now proposes an another dotcom bubble in the social media space is brewing. The best known example, the, is to show the, Facebook. After years of speculation, that the social media giant public would go did fallen 53 percent in May and since then the stock price and count, flush away from more than 50 billion $ market value.

Facebook's share price hit a new all-time low Tuesday, fall under $18 for the first time, even though it is up here in after-hours trading on news of the company had started, investors and its own employees as its stock price spirals after to calm down.

In a regulatory filing that said social network its CEO Mark Zuckerberg sell not shares of the company for a year, and promised not to sell, one almost to cover tax liability is $2 billion. Social networking moves back effectively buy million shares which will probably bolster its schwachelnde share price this fall and allow the employees in their camp weeks earlier than planned to cash.

Facebook's losses since the initial public offering are not quite as dramatic as that of the other social-media company, which went public last year, including online-gaming site Zynga, the stock price has last 71 percent since the IPO in December year decline, and GroupOn, which has seen the value of the shares diving 84 percent since the IPO in November last year.

The sharp decreases have less with shaky business models and more to do with sky-high expectations for the companies in the emerging social media space, to do, said Jay Ritter, Professor of finance at the University of Florida and expert on initial public offerings.

"Facebook is money making;" It has a successful business model. "As a company, it has continued to perform, although (the Manager) difficulty, money earn with mobile users have had", Ritter said. "The problem has been for investors at a price purchased, divided into very optimistic expectations (for the company)."

S & P Capital IQ equity analyst Scott Kessler is also optimistic. Recently updated he his views on Facebook a "buy," saying that he thinks that much about the potential threat of Facebook's share price as a result of time "depends on a so-called" for the most important investors in the company, is made. The period prevented some early investors-usually venture capital investors and insiders from the sale of million shares that they own in Facebook.

The company focuses more on the monetization of their mobile users now, and in this context, it "better than expected" running, he told CNBC Tuesday, adding that the share price to a level has declined, which makes it even more attractive.

"We see a pretty attractive rate now," he said.

A more moderate view of Internet companies a good sign for the industry is, analysts say. It suggests that technology has evolved since the speculative days of the dotcom boom.

A bright spot in the social media space is LinkedIn, a social network to manage your professional identity and looking for a job. The stock is currently more than 14 percent from the IPO successfully took advantage of a niche in the social media in May of 2011. LinkedIn, Ritter said.

In contrast to this fighting online game site Zynga, to convince investors that it can sustain growth, he added. And perhaps the biggest victim of overly high expectations website is daily deals GroupOn, which went public in November 2011 to great fanfare and with a value of $13 billion. It has since about three quarters every day much shed its market value on concerns about the growth of the business of.

"Groupon high cost, and this is one of the issues which continue as well can be their business model a question mark over," Knight said.

Picking winning stocks is a difficult task, even for professionals, of course.

Knight notes that their share prices by at least 50 percent of their asking prices on their sixth month birthday saw fall 49 companies that moved exchange between 2001 and 2010.

They lost 49 companies 63.1 percent on average in the first six months of public companies, but in the next 18 months on average had a rest, positive with an average return of 22.5 percent during these 18 months.

Knight adds that, if an investor bought shares of technology heavyweights like Microsoft and had held the returns of stock Oracle if it was the 1980s, and "on the ride" losses would have compensated.

Venture capitalists expect that most businesses to lose money that they invest, but they they "10 baggers"-companies such as Google, who call their initial investment as much as 10 times, Ritter said back account.

"If there were a simple rule for fund managers, consistently beat the market it would be easy" he said. "And the proof is that it it just don't."

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Company increased profits without this spring

4:30 AM Company, increased, profits, spring, without No Comments

NBCNews.com of the cartoonist, relies on the lack of recruitment of profitable companies.

Despite a virtual freeze in spring company U.S. were the increasing profit and the total volume and services produced by 1.7 percent.

How to make more things to and serve more customers without more employees of these companies?

She not asked employees to work more hours. She asked her harder work. And they not out throwing hand.

The Labor Department reported Wednesday that productivity of the workforce U.S. much faster clip than previously accepted rose to one in the second quarter. Productivity - which simply measures the volume of goods produced per worker per hour and services - jumped at an annual rate of 2.2 percent. That was faster than many economists had expected.

Since the recession ended in June 2009, employers have been U.S. ruckweise setting. In the first three months of the year, job growth took offer significant hope that the labour market had begun to recover. Companies added also overtime, expand the total number of hours worked by 3.1 percent.

But this setting spree and extension of the work week ground to a halt this spring. In April, may and June, U.S. payrolls only 239,000 new jobs - adding less than the month of January alone. Overtime also froze; the number of hours worked by only 0.1 per cent.

Despite freezing the jobs and working hours this spring, companies pushed US more profit from their activities. Corporate profits rose by 6 percent in the previous year in the second quarter.

And while they workers produce more asked, a weak labor market helped keep the line on wages companies. The Government economic wage measure, known as unit labour costs, rose only 1.5 percent in the second quarter after rising 6.4 percent rate in the first quarter. Unit labour costs have barely moved since the recession ended 2007.

Companies more profit from the same number of workers to resume a squeeze, have them little incentive to their payrolls. It not good for the future setting Iraku.

But some economists believe that the increase in productivity may be only temporary.

"When mediocre growth during a virtual hiring freeze is reached, as the case was in the second quarter, the increase in productivity is usually temporary and payback is typically in the following months," said Erik Johnson, an economist with IHS global insight.

Last year, the productivity has increased 1.2 percent. This is far below the average productivity growth of 3 per cent in 2009 and 2010 resulted. These gains were a result of massive redundancies slashed costs in the face of falling demand during the recession as companies. With personnel cut to the bone, the pace of layoffs has slowed sharply.

Even if future productivity gains are hard to prove, companies likely remain reluctant to hire until they see a convincing pickup final demand for their products and services. This happens two in General or attacks three years after a recession as demand from consumers.

There have been some recent signs of the strengthening of economic activity of the demand. Car sales have risen this year to risk higher mileage models, to help blunt have been looking for impact fuel prices as buyers with ageing clunkers. Sale of residential property, which in General will help lead economic recovery, have also begun this year alive.

But the current expansion cycle remains one of the weakest on record. Almost four years after growth in 2009 the economy continued hardly recovered, viewed tonal range when the recession began.

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Ensure growth which increases productivity for the setting

1:00 PM Ensure, growth, increases, productivity, setting, which No Comments

By NBC News staff and wire reports
Companies displaced more work from staff in the spring than first thought, what this setting could remain means later in the year in the doldrums.

The Labor Department reported Wednesday non-agricultural business productivity rose at an annual rate of 2.2 percent in the second quarter from a first estimate of 1.6 percent. Productivity slipped in the first quarter to 0.5 percent pace.

Rising productivity can increase corporate profits. It can slow down even jobs if it means that companies become more and more of its current employees and need to add any employees.

Yet there how much companies from their staff can squeeze limits. If this happens, productivity slows down, companies must typically rent to keep more workers with the demand.

One of the reasons productivity is improved in the second quarter slowed the setting, only 75,000 jobs a month from April to June. This is down from an average 226.000 per month in the first quarter.

U.S. employers added 163,000 jobs in July, the best month in five months to hire. The unemployment rate slightly up to 8.3 percent. Setting probably speed up from this level will not except again attracts growth or productivity slows down, economists say.

The Government will publish August employment report on Friday. Economists forecast that 135,000 jobs the economy last month added to, and the unemployment rate of 8.3 percent remained.

The Federal Reserve closely follows changes in productivity and labor costs to ensure that inflationary pressures are not always out of control.

Last year, the productivity has increased 1.2 percent. This is far below the average productivity growth of 3 per cent in 2009 and 2010 resulted. These gains were a result of massive redundancies slashed costs in the face of falling demand during the recession as companies.

Economists said typical productivity during and after a recession. Companies tend to shed workers in the face of falling demand and to increase output from a smaller workforce. When the economy starts to grow, demand should increase and finally, companies add workers, if they want to keep.

Reuters and associated press contributed to this report.

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Search treading water before Europe meet

5:00 AM before, Europe, Search, treading, water No Comments

Peter Andersen, Congress asset management of Senior VP, explains the importance of honest with your portfolio Adviser, to get the most profit from the stock market.

Shares closed Wednesday little changed, with investors reserved to big bets before a crucial meeting of the European Central Bank, to make the new policies, the debt crisis in the euro zone contain help could announce.

Stocks seesawed between positive and negative territory during the entire session, but in general kept constant on media report that a bond-buying would unveil European policy want to reduce crippling borrowing costs in the debt troubled euro-zone economies.

These reports offset a sell-off at FedEx Corp., the late Tuesday cut its first-quarter profit view of weakness of the world economy. The stock, which is displayed as a proxy for business activity, fell.

"FedEx only one company is one whose warning is indicative of the global economic downturn, what we do with that", said Leo Grohowski, chief information officer at BNY Mellon wealth management in New York.

Central Bank sources told of Reuters that the ECB was ready on seniority status on bonds to give the it buying under a new program, it will agree on Thursday at the Governing Council meeting.

Previously, Bloomberg reported that the ECB would unveil a unlimited, sterilized program of bond purchases with the broad support of its Council members. The ECB was expected that carefully given on the disclosure of the size of its bond-buying, opposition from Germany's Central Bank.

More details of the plan are of the ECB Chairman Mario Draghi to Thursday meet shown, but booked shows some analysts that the ECB may decide only after the Federal Constitutional Court rules on the region no new steps announce bailout funds on 12 September to wait.

"These reports help turn around the market despite FedEx, while some of the rhetoric from Europe was however positive, we must now see follow-through in actions," said also, who helps $171 billion in assets to monitor.

Shares received a boost, in the last few months on expectations that start ECB buying Spanish and Italian Government bonds to the pressure on the markets for government bonds of these countries would make it easier and that take on the Federal Reserve, new impetus is to prop up the economy. The S & P is about 7 percent since the beginning of June.

Nokia and Microsoft Corp. took the wraps from the most powerful Smartphone on Wednesday, but not investors the new Lumia impress in what the last big shot to win again may have been dominated a market from Apple, Samsung and Google.

U.S.-listed shares of Nokia fell while Microsoft was little changed.

Shares of Facebook Inc. had a rest of absolute depression, after the company promised not to sell, one almost to cover tax liability of $2 billion and said that it may take weeks earlier than planned, employees of money in their camps is move, nervous investors and its own staff as its stock price spirals after to calm down from its IPO price of $38.

Reuters contributed to this report.

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America's disappearing jobs

10:38 PM Americas, disappearing, jobs No Comments

Paul Sakuma / AP

A manufacturing technician produces chips in a clean room at Intel headquarters in Santa Clara, Calif. Robots, however, are typically better at this type of work than humans

By Michael B. Sauter, Lisa Uible & Alexander E.M. Hess, 24/7 Wall St.
Between 2010 and 2020, the United States is expected to add nearly 20 million new jobs. That represents a 14.3 percent increase in labor. A good part of that change has to do with population growth, as well as the growth of several sectors. Certain medical and personal care jobs will grow by 50 percent or more as the baby boomer population ages and their needs increase. Other occupations, however, will decline considerably.

Changes in population and technology also will lead to certain jobs shrinking dramatically or even becoming obsolete -- if they are not already. Using Bureau of Labor Statistics (BLS) information on thousands of separate occupations, 24/7 Wall St. identified 10 job categories that will shrink by at least 14 percent, and in some cases by much more than that. These are America’s 10 disappearing jobs.

No single occupation category is projected to lose more jobs than postal service workers. The evolution and increasing use of digital communication has taken a toll on delivered mail. As a result, the government has implemented planned cuts to the number of postal employees. As of 2010, there were approximately 524,000 USPS positions in the country. By 2020, the BLS expects that number will decline by nearly 140,000, or 28 percent.

There will be more severe declines within certain postal occupations. Postal Service mail sorters, processors and processing machine operators increasingly are being replaced by more efficient mail-sorting machines, and their numbers are projected to decline by more than 50 percent by 2020.

A review of the remaining categories is a who’s who of job sectors that are increasingly becoming obsolete. Two of the 10 positions are in the declining print business. Three are in the textile repair or manufacturing industry, which continues to move jobs overseas.

24/7 Wall St. looked at data from the Bureau of Labor Statistics Occupational Employment Matrix on the projected growth or decline of more than 800 different occupations between 2010 and 2020. To avoid insignificant percentage changes, we excluded all jobs that had less than 10,000 positions as of 2010. We ranked all remaining positions by the projected decline of jobs by 2020 as a percentage of 2010 employment. For positions that were too similar, or fell into the same category, we included the broadest category. For example, postal service workers is a job category that includes several categories, many of which are expected to decline a great deal. In this case, we discussed postal service workers as a whole, mentioning occupations within the category that will lose the most jobs.

These are America’s disappearing jobs.

1. Postal service workers

Percent decrease: -26.4 percent 2010 jobs: 524,200 Total job loss (2010-2020): -138,600 Median annual wage: $53,090
It is not news to anyone that the U.S. Postal Service is suffering. In August of this year, the USPS announced that it was losing $57 million a day in the third quarter. The USPS cannot afford to hire more workers and many jobs will be replaced by machines to save money on salaries and benefits. There will be a decline of 48.5 percent in the number of mail sorters and processors because their functions are being automated. Similarly, there will be a decrease of 48.2 percent in the number of postal service clerks as a result of the drop in first-class mail use. The number of mail carriers is expected to fall by 12 percent, as their areas for delivery can expand as the volumes of mail contract. Because postal workers are considered government employees, their wages and benefits are quite good for the lack of an education requirement.

2. Sewing machine operators

Percent decrease: -25.8 percent 2010 jobs: 163,200 Total job loss (2010-2020): -42,100 Median annual wage: $20,600
Sewing machine operators use machinery to manufacture and decorate garments and a range of other products. By 2020, more than one quarter of such jobs will no longer exist, as the number of operators falls to 121,100. Further, only a handful professions are projected to lose a larger number of jobs than sewing machine operators, where 42,100 positions are expected to be lost. Among all jobs typically requiring less than a high school diploma, none is projected to lose more jobs, either as an absolute number or as a percentage of 2010 workers.

3. Shoe and leather workers

Percent decrease: -23.1 percent 2010 jobs: 13,300 Total job loss (2010-2020): -3,100 Median annual wage: $23,980
The number of shoe and leather workers is expected to decline by more than 23 percent this decade from 2010 to 2020. The profession has witnessed a steady fall in the number of jobs over the past few decades because of the drop in the price of manufacturing -- these days, people are inclined to buy new shoes rather than repairing old ones, unless the shoes or bags are very expensive or one of a kind. Most laborers in this field therefore specialize in luxury products in big cities across the country, where there is a larger market for their services. On the bright side, there is hope for shoe workers that have experience working with fitting shoes for orthopedic reasons. As the populations ages there will be an increased need for these services.

4. Communications equipment operators

Percent decrease: -22 percent 2010 jobs: 164,000 Total job loss (2010-2020): -36,100 Median annual wage: $25,570
Most communications equipment operators either are telephone operators who provide customers with directory or billing information, or switchboard operators who relay calls. The BLS expects the number of telephone operators to decrease by 16.6 percent by the end of the decade and the number of switchboard operators to decline by 23.3 percent over the same time frame. Though the total number of operators is expected to fall by 36,100 by 2020, there will still be a projected 33,600 job openings as many workers decide to retire or otherwise leave a profession that paid a median annual wage of just $25,570.

5. Semiconductor processors

Percent decrease: -17.9 percent 2010 jobs: 21,100 Total job loss (2010-2020): -3,800 Median annual wage: $33,130
Despite a growing demand for semiconductors, the job outlook for semiconductor processors is rather somber. Semiconductors need to be produced in a clean room and with the utmost precision. And robots are typically better at this type of work than humans in bunny suits, the standard uniform for semiconductor processors. In addition, many of the manufacturing facilities are expected to move overseas, where costs are lower. Most of these positions require an associate’s degree and completion of a training program. The median income for semiconductor processors is slightly lower than the national median income for all occupations.

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The manufacturing sector shrinks for third straight month

12:00 PM manufacturing, month, sector, shrinks, straight, third No Comments

Production shrank at its sharpest clip in more than three years in August, the third month of contraction in a row, and companies hired the fewest workers since the end of 2009 a survey showed on Tuesday.

For supply management said, on that its index of national factory activity 49,6 in August fell Institute by 49,8 in July.

The reading fell shy of 50.0 average estimate in a Reuters poll of economists. A reading below 50 indicates contraction in the sector.

The index component employment fell its lowest level since November 2009 from 52,0 in July on 51,6.

"It is that the index of new orders again deteriorate without question a soft report on production and what is particularly worrying,", said Tom Porcelli, Chief U.S. economist for RBC capital markets. "It has become increasingly clear that the manufacturing sector is losing momentum." "This soft report payrolls leads in Friday will solidify when we see an other soft order report only additional measures the Fed."

New orders, a forward-looking sub-index fell to 47.1 in August, the worst result since April 2009. It amounted to 48 in July.

The exports index ticked up to 47 remained last month of 46.5 in July but in contraction, as recession in parts of Europe and slower growth in Asia to undermine demand U.S. were.

"Since everything we is international in terms of the demand by our label, a little slowdown expected tracks, especially with the euro zone still under pressure and emerging relatively experiencing growth, slowly", said Patrick O'Keefe, Director of economic research at j.j Cohn O'. "The domestic new orders for the production were a bit, but not robust so it is not unexpected somewhat more cautiously to see something."

Reuters contributed to this report.

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Stocks' activity to pick up as Wall Street returns from vacation

4:00 PM activity, returns, stocks, Street, vacation No Comments

CNBC's Sue Herera looks ahead to what are likely to be next week's top business and financial stories.

On Friday, Federal Reserve Chairman Ben Bernanke said that the central bank stands ready to bolster the economy if necessary, although he stopped short of giving an explicit signal of more monetary easing.

Stocks rallied after Bernanke's speech to an annual conference of central bankers in Jackson Hole, Wyoming, with major indexes gaining more than 1 percent in the late morning session. At the end of the day the Dow Jones industrial average was up 0.7 percent, while the Standard & Poor's 500 Index was up 0.51 percent and the Nasdaq Composite Index up 0.6 percent.

"This (Bernanke speech) was in line with what we were expecting. He left the door open but didn't announce anything explicit. He doesn't intend to front-run his own FOMC (policy) meeting," said Liz Ann Sonders, New York-based chief investment strategist at Charles Schwab Corp, which has $1.6 trillion in client assets.

Investors are now awaiting comments from European Central Bank President Mario Draghi after the bank's meeting on Thursday. Many investors will look to the ECB meeting to glean strong clues on what to expect from the Federal Open Market Committee's own policy meeting the following week on Sept 12-13.

"Between now and mid-September, we'll be focusing on the ECB, though the next FOMC meeting is also around the time that the German court meets, so we'll be getting news on both those fronts. Any news from Europe will drive markets more than domestic news, with the exception of the payroll report," Sonders said.

The all-important U.S. non-farm payrolls report is due on Friday. With Bernanke citing poor improvement in the labor market as part of the reason the U.S. economy faces "daunting" challenges, Friday's data could be a game changer, according to market participants.

In the euro zone, following the European Central Bank policy meeting on September 6, a German Constitutional Court will rule on the euro zone's permanent bailout fund on September 12, which may affect the ECB's bond-buying plans.

But there was further uncertainty within the ECB over President Mario Draghi's bond-buying plan on Friday after German central bank chief Jens Weidmann reportedly threatened to resign, piling pressure on Draghi to mollify opposition.

There are "growing hopes that Draghi has overcome Bundesbank opposition to announce a bond buying plan at next Thursday's ECB meeting," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

But "what Draghi may have put in front of Weidmann is the notion that no actual purchases may ever occur as long as the market understands what it is up against in terms of coordinated, decisive policy response from the ECB."

In a holiday shortened week, with U.S. markets closed on Monday for the Labor Day holiday, Friday's employment report will be the final major economic report to impact the results of the upcoming FOMC meeting.

"Unless there is a sharp weakening in the labor markets, something our data do not indicate, the Fed will sit on the sidelines at the ready to act only if things get really bad," said Steve Blitz, Chief Economist at ITG Investment Research in New York.

A Reuters survey forecast nonfarm payrolls rose by 125,000 for the month of August.

In July, nonfarm payrolls added 163,000 workers, breaking three months of job gains below 100,000 and offering hope for the ailing economy. At the same time, a rise in the unemployment rate to 8.3 percent kept alive the possibility that the Federal Reserve could provide additional stimulus to the economy.

"The Beige Book prepared for the September 12-13 meeting of the Federal Open Market Committee (FOMC) offered little evidence of a material improvement in broad labor market conditions through Aug 20," Wilkinson said.

"Indeed, the trend in jobless claims has largely moved sideways over the summer. We forecast that total nonfarm payrolls increased by 110,000 in August, with the unemployment rate holding steady at 8.3 percent," he said.

Other economic data next week include the Institute for Supply Management manufacturing survey and construction spending on Tuesday; non-farm productivity and labor costs on Wednesday; the ADP private-sector employment report and weekly jobless claims on Thursday.

For the week the Dow was down 0.5 percent, while the S&P 500 was down 0.3 percent and the Nasdaq was down 0.1 percent. For the month, the Dow rose 0.6 percent, the S&P 500 gained 2 percent and the Nasdaq climbed 4.3 percent, its best monthly performance since February.

Copyright 2011 Thomson Reuters.

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Bernanke: With unemployment this bad, Fed can do more

9:30 AM Bernanke, fed, unemployment No Comments

Ted S. Warren / AP

Federal Reserve Chairman Ben Bernanke, left, and Stanley Fischer, governor of the Bank of Israel speak outside the symposium on Friday in Jackson Hole, Wyo.

By PAUL WISEMAN, Assocaited Press
JACKSON HOLE, Wyo. -- Chairman Ben Bernanke made clear Friday that the Federal Reserve will do more to boost the economy because of high U.S. unemployment and an economic recovery that remains "far from satisfactory."

He also argued that the Fed's moves so far to keep interest rates at record lows and encourage borrowing and spending have helped bolster the economy.

Bernanke stopped short of committing the Fed to any specific move, such as another round of bond purchases to lower long-term rates. But in a speech at an annual Fed conference in Jackson Hole, Wyo., Bernanke said that even with rates at super-lows, the Fed can do more.

After Bernanke's comments were released at 10 a.m. Eastern time, stocks initially gave up most of their earlier gains. But as investors digested the speech, stocks bounced back. By late morning, the Dow Jones industrial average was up more than 100 points. Broader stock indexes also surged.

Bernanke noted that further action carries risks but says the Fed can manage them. The Fed "should not rule out" new policies to improve the job market, he said.

The most dramatic step the Fed could take would be another round of bond buying. This is known as quantitative easing, or QE. In two rounds of QE, the Fed bought more than $2 trillion of Treasury bonds and mortgage-backed securities. Many investors have been hoping for a third round — QE3— to be unveiled as soon as the Fed's next policy meeting in September.

In light of Bernanke's comments Friday, some analysts said that might be a stronger possibility now.

"Bernanke has taken a further step along the path to more policy stimulus, most likely a third round of asset purchases (QE3) to be announced at the mid-September FOMC meeting," said Paul Dales, senior U.S. economist at Capital Economics.

At the same time, the Fed chairman avoided hinting of any one policy move or any timetable.

"This is really all he could say," says Steven Ricchiuto, chief economist at Mizuho Securities. "He is not at liberty to promise anything without the (policy) committee's approval, and there seems to be various opinions on the committee about the best way forward."

In his speech, Bernanke cited studies showing that the Fed's first two rounds of bond purchases created at least 2 million jobs.

"It is important to achieve further progress, particularly in the labor market," Bernanke said. "The Federal Reserve will provide additional policy accommodation as needed."

That remark echoed what the Fed had said in a statement after its most recent policy meeting, July 31-Aug. 1. Since then, somewhat stronger economic news had led some analysts to say the Fed might now feel less urgency to act. But Bernanke's reiteration Friday of the Fed's readiness to provide more help suggested that his economic outlook remains dim.

The U.S. economy is still struggling to grow. It expanded at a tepid 1.7 percent annual rate in the April-June quarter, the government estimated Wednesday.

The minutes of the Fed's July 31-Aug. 1 policy meeting showed that officials spoke with increased urgency about the need to provide more help for the U.S. economy.

The policy committee decided that action "would likely be warranted fairly soon" unless it saw evidence of "a substantial and sustainable strengthening" of the economy. After it meets in mid-September, the Fed's policy committee will meet once more, in late October, before the November elections.

QE3 isn't the Fed's only option. It already plans to keep short-term interest rates near zero through late 2014 unless the economy improves. It could settle for extending that pledge into 2015.

Mark Zandi, chief economist at Moody's Analytics, is among those who think the Fed will extend its timetable for record-low rates into 2015 at the September policy meeting. And unless the economy improves, Zandi expects the Fed to launch another round of bond purchases after the election.

Bernanke's comments Friday made clear that the economy has a long way back to full health.

"Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time," he said.

At the end of every August, economists and central bankers convene in the Rocky Mountains at a symposium organized by the Federal Reserve Bank of Kansas City. They present papers and argue about economic issues. But mostly, they wait to see what the Fed chairman has to say.

In August 2010, Bernanke hinted during his remarks at Jackson Hole that the Fed might begin a second round of bond purchases, a policy called quantitative easing, or QE2. The Fed started buying bonds three months later.

Many analysts think a third round of bond purchases — QE3 — would include both Treasurys and mortgage-backed securities.

Below, a CNBC panel discusses how markets may react to the speech and if Bernanke is laying the ground for more activism from the Fed.

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Consumer sentiment hits three-month high

2:00 PM consumer, sentiment, threemonth No Comments

Consumer sentiment climbed to a three-month high in August as households made progress paying down debt, but future expectations remained grim, a survey on Friday showed.

The Thomson Reuters/University of Michigan's final reading on overall consumer sentiment this month rose to 74.3, its highest since May and above economists' expectations of 73.6. In July, the number stood at 72.3.

Buying was bolstered by price discounts and low interest rates, the survey found. But the biggest source of optimism was tied to success in trimming debt.

"Rather than citing income changes, consumers were more likely to cite favorable shifts in the amount of their outstanding debt and the value of their assets," survey director Richard Curtin said in a statement.

The survey's barometer of current economic conditions rose to 88.7 from 82.7, the highest since January of 2008.

However, the survey's gauge of consumer expectations fell to 65.1 from 65.6, the lowest level since December of 2011.

Half of those surveyed said their financial situation was worse than it was five years ago and the majority anticipated no wage gains during the year ahead, the survey showed.

The one-year inflation expectation rose to 3.6 percent from 3 percent in July, while the survey's five-to-10-year inflation outlook was at 3 percent, compared with 2.7 percent last month.

Reuters contributed to this report.

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Facebook hits another low after downgrade

7:00 AM after, another, downgrade, Facebook No Comments

The FMHR traders offer reasons why the market is fading despite Ben Bernanke's remarks at Jackson Hole. Meanwhile Facebook's price target gets cut to $15 from $25 at BMO. And Dennis Gartman, The Gartman Letter, offers insight on the commodities rally f...

Shares of Facebook are down again Friday, hitting a new all-time low after BMO Capital Markets cut its price target on the social networking company.

Facebook stock price was lately down 4.4 percent at $18.25. The social network’s share price hit a new low of $18.19 Friday, and is down 52 percent from its May 18 initial offering price of $38.

BMO Capital Markets noted that several lock-up expirations over the next year will weigh on Facebook’s stock price. BMO cut its price target by $10 to $15, and said Wall Street sentiment on Facebook is now much worse than advertiser sentiment.

"We expect investor attention to return to fundamentals after the technical challenges presented by lock-up expirations over the next six months have been absorbed by the stock," BMO analysts said in a research note.

Shares of game publisher Zynga, which derives most of its revenue from Facebook, slid 2 percent to just under $3 amid reports that executives Bill Mooney and Brian Birtwistle have left the company amid slowing sales and a weakening stock price.

Reuters contributed to this report.

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Knight OKs Nasdaq's $62 million Facebook payout

1:00 PM Facebook, Knight, million, Nasdaqs, payout No Comments

Knight Capital Group said Thursday it will accept the Nasdaq stock market’s $62 million payback plan for companies that suffered losses on Facebook’s botched market debut in May.

The largest trader of U.S. shares by volume, Knight said it suffered losses far in excess of the Nasdaq’s proposed payout as a result of the confusion that surrounded the Facebook public stock offering.

Technical hiccups on the Nasdaq stock exchange on Facebook’s first day of trading led to a delayed opening for the stock and left investors wondering if their orders to buy or sell the social network’s stock went through.

Knight and several other market-making firms and brokerages said they lost a total of upwards of $500 million as a result of the trading glitch. Knight alone said it lost over $35 million.

Knight said it would rather see the Nasdaq cover all trading losses by its member firms, but supports Nasdaq's move to increase the payback fund to $62 million from an earlier offer of $40 million. Knight’s change of heart came in regulatory filing dated Aug. 29.

However, Knight said it rejects a stipulation that it must waive the right to sue the Nasdaq to receive compensation.

A trading error at Knight earlier this month cost the company $440 million and brought it to the brink of collapse. It avoided going out of business by clinching a deal worth $400 million with a group of investors.

Reuters contributed to this report.

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Barclays taps new CEO amid ongoing scandals

8:30 PM Barclays, ongoing, scandals No Comments

Barclays has picked its retail boss Antony Jenkins to be its new CEO, who will succeed Bob Diamond after he stepped down in wake of a Libor rate rigging scandal, with CNBC's Kayla Tausche.

The U.K.’s Barclays Bank appointed Antony Jenkins, the head of its retail and business banking division, as its new chief executive Thursday as the bank continues to grapple with a number of scandals.

Jenkins succeeds Bob Diamond, an American banker who resigned in early July after an alleged interest-rate rigging scandal resulted in a $450 million payout by Barclays to settle accusations brought by U.K. and U.S. regulators.

“We have made serious mistakes in recent years and clearly failed to keep pace with our stakeholders' expectations,” Jenkins said in a statement.

“We have an obligation to all of those stakeholders -- customers, clients, shareholders, colleagues and broader society -- and a unique opportunity to restore Barclays reputation by making it the ‘go to’ bank in all of our chosen markets,” he added. “That journey will take time, we have much to do, and I look forward to getting started immediately.”

The appointment of Jenkins, who is British and associated with the retail side of the bank, is a clear sign that Barclays is looking to distance itself from the rate scandal that was seen as a consequence of Diamond’s expansion into more risky investment banking.

Diamond turned Barclays into a major player on Wall Street, but some British regulators and politicians had blamed the bank’s regulatory lapses on a culture of excessive risk-taking they say Diamond introduced.

Jenkins’ appointment raises questions about the future of the investment banking arm at the bank, and is a sign that the bank is looking to return to its retail banking roots amid increased political pressure.

On Wednesday, Barclays said the U.K.’s fraud prosecutors have started a criminal investigation into payments between Barclays and Qatar Holding, a unit of the Qatar Investment Authority. The probe adds to a continuing regulatory investigation into dealings between the two parties.

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Isaac pushes gas prices higher for holiday

2:00 PM higher, holiday, Isaac, prices, pushes No Comments

NBC's Tom Costello reports on the recent spike in prices at the pump as travelers hit the road for the Labor Day weekend.

By Richard Satran, NBC News contributor
Updated at 2:57 p.m. EDT: Gas prices jumped again Thursday in the wake of Hurricane Isaac, leaving drivers facing the prospect of costly fillups as they take to the highway for a final summer spin over Labor Day weekend.

Prices climbed two cents a gallon to $3.82 nationally to a record for this time of year and are likely to edge higher still in coming days, the American Automobile Association said. The gains came on top of a five-cent surge Wednesday when Isaac pounded the oil-rich Gulf Coast region. The price has risen steadily from the summer low of $3.33 on July 2.

Consumers are likely to get a price break soon as oil and gas companies gradually restart their Gulf operations, but AAA said drivers should expect to pay a few more pennies by the end of the holiday weekend.

Isaac spared heavily populated New Orleans from the devastation wreaked by Hurricane Katrina seven years ago. But this week’s storm caused widespread damage and dumped more water in the region than its sister storm seven years ago, according to the National Weather Service. Thousands remain stranded and power outages have been widespread.

Up to 50,000 people in Louisiana were ordered to evacuate Thursday as a dam seemed ready to give way across the state line in Mississippi.

Drivers caught a break, though, as the storm appears to have spared the region's many refineries and oil rigs, unlike the devastation that affected the industry for months after Katrina in 2005. As a result, AAA analysts expect pump prices to decline quickly after the holiday.

“We would expect prices to be going back down by mid-September,” said Michael Green, AAA public relations manager. “We can’t estimate exactly how much. “

Isaac’s slow journey through the Gulf and Louisiana’s energy-refining heartland is still driving prices higher across the land, but from initial assessments the storm appears to have had no lasting damage on energy infrastructure, he said. Refineries and rigs shut down as a precautionary measure.

One refinery in Belle Chasse, La., was flooded, according to wire reports.

“It’s a little early to say for certain but it appears they were relatively unharmed,” said Green. “It’s still to be seen when there are deeper assessments, but so far there are no reports of anything significant. That’s good news for the oil refiners.”

As the storm headed north, Illinois Attorney General Lisa Madigan warned gas stations owner against price gouging after complaints against some Southern outlets in the storm’s path.

“I’m putting (gasoline station) retailers on notice that these circumstances are not an excuse to gouge customers at the pump,” said Madigan. “My office will be closely monitoring gas prices to ensure gas station owners are operating legally.”

Despite the storm and the higher gasoline costs, nearly 33 million Americans still plan to travel for Labor Day, said AAA. That would be a 3 percent rise in traffic from a year ago. Americans have been driving more on major holidays this year than they did during the depths of the recent recession, the association reports.

Amid higher fuel demand and low gasoline inventory, prices have been pushing higher, although consumers will get a break soon due to a recent jump in refinery output, said Green. Refiners have had a relatively trouble-free season and were able to boost supplies to move to gas stations ahead of the storm season.

With the end of summer, there will be fewer drivers are on the roads, as well, further reducing fuel demand. The change of season also means stations can sell less expensive gasoline than the ozone-friendly mix they are required to pump in summer months.

Another storm could tip the scales once again. The official end of the hurricane season is Oct. 31.

“There is still a chance of more storms but Labor Day is generally considered the peak,” said Green.

For gasoline prices, it looks like high time is this weekend.

(This story has been corrected from a previous version.)

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Bernanke unlikely to tip Fed hand in speech

7:00 PM Bernanke, speech, unlikely No Comments

Getty Images

Federal Reserve Chairman Ben Bernanke's address Friday in Jackson Hole, Wyo., will be closely scrutinized for hints of future central bank action.

It is annual rite rite of late summer: The Federal Reserve chairman flies far beyond the Beltway to scenic Jackson Hole, Wyo., for a major address on monetary policy.

When central bank chairman Ben Bernanke takes part in the ritual Friday, his influential audience will be hanging on every word, listening for any hint of what policymakers might do next month to spur the sluggish economy. Pundits and the few journalists invited will quickly rush out to expound on Bernanke's speech, taking advantage of the telegenic setting against the Teton mountains.

But don't hold your breath. Most Fed watchers expect Bernanke to avoid tipping his hand ahead of the Sept. 12-13 rate-setting meeting, especially given recent signs of a slight firming in the economy.

The title of the Friday morning speech, "Monetary Policy Since the Crisis," suggests Bernanke "might take a broad ‘lessons learned’ approach” rather than lay out potential next steps, Goldman Sachs economists said in a note.

In part that is because the Fed has little ammunition left after five years of slashing interest rates to rock-bottom levels and injecting cash into the economy through other means. But also it is because economic data are beginning to show signs of improvement, and central bankers will want to gather as much data as possible before acting.

In particular the August jobs data, due to be published Sept. 7, could be key to Fed thinking.

“If the chairman's thought process is anything like ours, he has not yet decided whether to press for a substantive easing move as soon as Sept. 13,” Credit Suisse chief economist Neal Soss said in a recent note.

Investors are waiting to see whether the Fed will go forward with a third round of bond buying, aka quantitative easing, aka QE3.

At its last meeting, which ended Aug. 1, Fed policymakers agreed they were ready to act “fairly soon unless incoming information pointed to a substantial and sustainable strengthening” of the economy, according to minutes released last week.

Since then, data has shown that the housing market continues to rebound, and the economy grew at a slightly faster pace last spring than previously reported.

“It is not clear whether these positive developments are compelling enough to postpone what had looked like a strong chance of a September 13 QE3 announcement,” Soss said, referring to the past month's worth of data.

Indeed, the Fed itself issued a report Wednesday that showed manufacturing activity slowing in many parts of the country in July and August.

Joseph Gagnon, senior fellow at Peterson Institute for International Economics, noted that Bernanke probably will at least want to study upcoming employment and manufacturing data before making any decisions.

“What he might say (Friday could) give us a hint of how he views the incoming data," Gagnon said.

The uncertainty of what the upcoming numbers will show could lead to a speech that disappoints investors hoping for a road map.

“Since the August meeting, I think the data has improved enough to push off QE3, but we may see something on the rate guidance front,” said Michael Gapen, director of U.S. economics and asset allocation for Barclays.

"I think the market after the minutes is very focused on the question of when, and I don't think he’s going to give much clarity on that," said Lewis Alexander, chief U.S. economist for Nomura.

The “benefits and costs” of monetary stimulus measures mentioned in the latest Fed minutes gave some analysts hope that Bernanke, in his speech Friday, will catalog the different actions the Fed is considering and potentially indicate which actions are at the top of the list.

Besides adding to the money supply via either finite or open-ended purchases of Treasuries or mortgage-backed securities, Bernanke could discuss a commitment to keeping rates low even further into the future, discount window lending and changing the rate the Fed pays banks to warehouse their cash reserves with it. Already the Fed is on record that it plans to keep interest ratest at current "exceptionally low levels" at least through late 2014.

CNBC's Steve Liesman, provides a preview of Fed chief Bernanke's speech at Jackson Hole and whether investor are likely to hear hints of additional quantitative easing.

In discussing the costs, Bernanke could certainly mention the potential for inflation over the next few years. The chairman also might broach the topic of whether an increase in the money supply would overheat the stock market, otherwise distort financial markets or encourage poor financial decision-making.

Investors will also miss the chance to get insight from Europe's top central banker after European Central Bank President Mario Draghi withdrew from the Jackson Hole conference Tuesday. Draghi had been scheduled to speak Saturday to an audience intensely interested in how European policymakers plan to turn around the eurozone's ailing economy.

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Economy is running neither hot nor cold

10:00 AM economy, neither, running No Comments

By NBC News staff and wire reports
The economy tossed up more mixed signals Thursday, continuing a pattern of lukewarm performance that could play into the hands of the Republicans as they assail President Barack Obama's record on the economy.

While consumer spending took its biggest jump in five months as the third quarter got started in July, jobs remained a dark cloud. New claims for unemployment benefits were flat in the latest week, suggesting that hiring is still struggling to pick up momentum.

Recent data on housing and retail sales suggest the economy fared better early in the third quarter but was not strong enough to take additional monetary easing by the Federal Reserve off the table.

"The economy does not seem to be faltering or going into reverse," said Chris Rupkey, an economist with Bank of Tokyo-Mitsubishi in New York. "But for a Fed that thinks the economy is not good enough, the economic data today is not consistent with 3 percent-plus growth or a falling unemployment rate."

Thursday's reports on the economy came as former Massachusetts Gov. Mitt Romney was getting set to accept the Republican Party's official nomination at the convention in Tampa, Fla., Thursday night. Romney has been touting his business experience as he tries to unseat Obama in the White House.

The Labor Department reported that seasonally adjusted initial claims for unemployment benefits were an unchanged 374,000, higher than the 370,000 that economists had expected. The four-week moving average, which smooths out wrinkles in the data, rose 1,500 to 370,250.

Jobless claims have risen by 10,000 in August, suggesting some moderation in the pace of job growth this month after payrolls increased 163,000 in July after a slim 64,000 gain in June.

The state of the labor market, particularly the unemployment rate, could determine whether the Federal Reserve will offer additional monetary stimulus to the economy at its Sept. 12-13 policy meeting. Economists are divided on whether the Fed will announce a third round of bond purchases to spur faster economic growth.

The unemployment rate, which ticked up to 8.3 percent in July, has been stuck above 8 percent for more than three years, the first time this has happened since the Great Depression.

Although housing and retail sales data suggest that economic activity picked up early in the third quarter, business spending is weakening and inflation is slowing.

On the bright side, the rise in consumer spending perhaps provides a glimmer of hope for the economy over the next few months.

"The improvement in spending activity suggests that overall economic activity may be off to a fairly decent start in the third quarter," said Millan Mulraine, senior macro strategist at TD Securities in New York.

The Commerce Department said on Thursday that consumer spending increased 0.4 percent in July after a flat reading in June. Last month's rise in consumer spending, which accounts for 70 percent of U.S. economic activity, was in line with economists' expectations.

When adjusted for inflation, consumer spending increased 0.4 percent, also the largest increase since February. Real consumer spending dipped 0.1 percent in June and last month's increase was an encouraging sign after consumption growth slowed by the most in a year in the second quarter.

The mixed data doesn't make the Fed's decision-making any easier, however. Fed Chairman Ben Bernanke is heading for Jackson Hole, Wyo., where he is scheduled to give a speech Friday that many hope will provide clues about whether the Fed will do more to aid the sluggish economy.

Reuters contributed to this report.

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At convention, seeking solutions to job shortage

2:30 PM convention, seeking, shortage, solutions No Comments

Tom Brokaw moderates a panel discussion on the jobs crisis and the initiatives companies, nonprofits and foundations have undertaken to address it. Panelists include John Kasich, Brad Smith, Judith Rodin, Laura Ingraham, Scott Case, Sanford Shugart, and Arianna Huffington.

A strange thing happened just outside the Republican convention: A civil conversation about the economy broke out.

Media doyenne Arianna Huffington, whose Huffington Post website is closely aligned with progressive causes, hosted a panel discussion alongside the convention in Tampa, Fla., with a distinctly nonpartisan tone around the theme of how to solve the job crisis.

Despite the nearby convention, the event, hosted by the Huffington Post, NBC News and Microsoft, took a mostly neutral tone, focusing on solutions and successes rather than stoking party flames. A similar event will be held in conjunction with next week's Democratic convention in Charlotte, N.C.

"Having a job is not just about economic security, it’s about emotional security and cultural security for the country," said moderator Tom Brokaw, an NBC News special correspondent.

Huffington said the purpose of the event was to tell people that they “can no longer be bystanders” in finding ways to end the jobs crisis.

The stubbornly high unemployment rate, currently 8.3 percent, has provided Republican challenger Mitt Romney with one of his most potent weapons in his race to unseat Democratic President Barack Obama.

Panelists returned often to the theme of education and its role in driving the economy.

Ohio Gov. John Kasich, a Republican, suggested that if his state could get private businesses to divulge more of their plans, he could push schools to match their needs.

"If you can forecast and move academics to be consistent with training people (in) what they are born to do … it will be a tremendous benefit to our state," he said.

Kasich also pointed to predominantly African-American urban centers as an overlooked area of growth, and said entertainer Jay-Z's involvement with the Brooklyn Nets could serve as an inspiration.

Kasich provided the lone exception to the generally nonpartisan tenor of the discussion when he took a brief swipe at business regulations that drew an applause from the crowd.

Scott Case, founder of an advocacy group called Startup America, pointed to the value of entrepreneurs.

“If you look at the last 30 years, all the net new jobs were created by companies that were less than five years old," he said, arguing that such commercial successes should be celebrated more widely, not just in Silicon Valley and New York.

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Consumer debt eases despite growing student debt

9:30 AM consumer, despite, eases, growing, student No Comments

A decrease in the amount owed on mortgages helped drive overall U.S. consumer debt lower in the second quarter, even as Americans kept piling up student loan debt, data showed on Wednesday.

Total consumer debt fell 0.5 percent to $11.38 trillion compared to the first three months of the year, the New York Fed said in its quarterly household debt and credit report.

Since the financial crisis and recession, Americans have been paring back the large amount of debt they amassed during the housing boom.

Student debt has been the exception. Student loans have increased by $303 billion since the third quarter of 2008, at the same time as other forms of debt have fallen by $1.6 trillion.

In the second quarter, student debt rose $10 billion to $914 billion.

Auto loans also increased in the quarter, rising $13 billion to $750 billion.

Consumers kept paring real estate-related debt. Mortgage balances fell 0.5 percent to $8.15 trillion, while balances on home equity lines of credit dropped by 3.7 percent, or $23 billion.

Mortgage originations rose to $463 billion, a positive sign for a housing market that has been hampered by tight access to credit.

Overall delinquency rates improved, falling to 9 percent from 9.3 percent, as rates improved for mortgages, credit cards and auto loans. Credit card delinquencies stood at 10.9 percent, the lowest level since the last quarter of 2008.

1.8 percent of mortgage balances fell into delinquency, unchanged from the previous quarter.

Student loan delinquencies increased for the second quarter in a row. Loans that were 90 days or more behind increased to 8.9 percent from 8.7 percent.

The number of credit account inquiries over six months - an indicator of consumer credit demand - fell 2 percent to 167 million inquiries.

Copyright 2011 Thomson Reuters.

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Economy's growth rate revised upward, a bit

1:30 PM Economys, growth, revised, upward No Comments

By NBC News staff and wire reports
The economy's pace was more like a turtle than a snail in the second quarter.

The Commerce Department reported Wednesday that it had revised slightly upward its initial estimate for second quarter gross domestic product to a rate of 1.7 percent from 1.5 percent. The first quarter's pace remained at 2.0 percent.

The government report attributed the increase to exports and personal spending which offset sluggish state and local government spending and slow restocking of inventories by businesses wary of the economic environment at home and overseas.

The report also showed that after-tax corporate profits unexpectedly rose at 1.1 percent rate after sinking 8.6 percent in the first quarter.

While the composition of economic activity was fairly favorable, growth remains well below the 2-2.5 percent rate required every quarter to hold the unemployment rate steady, which could compel policymakers at the Federal Reserve to offer additional stimulus at their September 12-13 meeting.

Speculation the Fed would loosen policy further had been dampened by a pick-up in job growth and a rebound in retail sales in July, but other data on business spending and inflation supported more action.

Chairman Ben Bernanke could offer more clarity in the near-term outlook for monetary policy when he gives a speech at the Kansas City Fed's high-profile gathering in Jackson Hole, Wyo., at the end of the week.

The jobless rate rose to 8.3 percent in July from 8.2 percent the prior month. The weak economy could be a stumbling block to President Barack Obama's quest for a second-term in office in November.

First-quarter economic growth was revised up to show strong export growth, despite slowing global demand. Trade contributed 0.32 percentage point to GDP growth instead of subtracting a third of a percentage point, as previously reported.

That helped to offset the drag from inventories. Business inventories increased $49.9 billion instead of $66.3 billion and subtracted 0.23 percentage point from GDP growth in the April-June period. However, the careful management of stocks can be a boost to the economy in the third quarter.

Excluding inventories, GDP rose at a 2.0 percent rate rather than 1.2 percent. In the first quarter, final sales of goods and services produced in the United States increased at a 2.4 percent pace.

There were also upward revisions to growth in consumer spending, which was bumped up to a 1.7 percent pace from the previously reported 1.5 percent. That was a step-down from the 2.4 percent pace recorded in the first quarter.

Investment in the construction of nonresidential structures was stronger than previously reported. But growth in business investment in equipment and software was lowered to a 4.7 percent pace, the slowest since the third quarter of 2009, from 7.2 percent previously.

Spending by businesses on equipment and software has slowed sharply from a peak of 18.3 percent in the third quarter of last year.

That appears to have intensified early this quarter, with a measure of business spending plans falling sharply in July. The pullback likely reflects worries of deep government spending cuts and higher taxes scheduled to kick in at the start of 2013, as well as troubles from the debt crisis in Europe.

Growth in spending on homebuilding was cut to an 8.9 percent rate from 9.7 percent. The decline in government spending was not as deep as previously reported, with defense outlays falling at a 0.1 percent rate instead of 0.4 percent.

Though consumer spending was revised up, inflation pressures remained muted.

A price index for personal spending rose at an unrevised 0.7 percent, the slowest pace since the second quarter of 2010. It rose 2.5 percent in the first quarter.

A core measure that strips out food and energy costs advanced at an unrevised 1.8 percent pace, slowing down from 2.2 percent in the prior quarter.

Reuters contributed to this report.

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Yelp shares surge as insiders hold on to stock

7:30 PM insiders, Shares, stock, surge No Comments

Shares of consumer reviews website Yelp Inc recorded their biggest one-day advance on Wednesday, the day insiders were free to sell their holdings, surprising investors.

The stock rose 20 percent to $21.84 with more than six-and-a-half million shares traded, putting it on track for its busiest day since its debut in March. Shares rose as high as $22.89, and the rally briefly bumped the stock back above its debut price of $22.01 a share.

Part of the stock's rise may be related to the relatively high percentage of shares being borrowed for shorting purposes. About 97 percent of the shares available for borrowing for short bets were borrowed. This only amounts to about 4 percent of the total shares outstanding, according to Data Explorers, a Markit company.

"I haven't seen a good old-fashioned tech short-squeeze in a long time, but this has all the behavior of that," said Mike Shea, managing partner and trader at Direct Access Partners LLC in New York.

About 53 million shares were eligible for sale at the end of the lockup period. Similar ends to restrictions on selling by insiders and underwriters have pressured other technology companies. Facebook Inc was hit hard after its initial lockup period ended two weeks ago.

"People felt it would be a lock - pun intended - that you'd see the stock get hit when the lockup ended, and that clearly didn't happen," Shea said. "So now everyone is running for cover."

With the stock shooting higher, shorts may have been forced to cover their bets to avoid the short squeeze that costs them more money, and apparently added to a sharp upward movement in a stock's price.

The advance comes in contrast to other social media stocks, including Facebook and Groupon Inc , both of which have struggled to convince investors that they will be able to monetize their user bases. Facebook, in particular, faces questions over its mobile platform.

Yelp, in comparison, earlier this month raised its revenue outlook and posted second-quarter earnings and sales that beat expectations as it signed up more advertisers and expanded into new markets.

"There's a different mentality for Yelp than Facebook, and I'm not surprised that having a bigger float of shares is interesting buyers today," said Todd Schoenberger, managing principal at the BlackBay Group in New York.

Facebook, in results released last month, posted a dramatic slowdown in revenue growth and alarmed investors by declining to give financial forecasts. When the social media company's lockup ended last week, company director Peter Thiel cashed out most of his stake, selling about $400 million of shares.

Groupon similarly disappointed in its results, contributing to a sell-off that put the provider of daily deals off almost 84 percent from an all-time closing high reached in November.

Copyright 2011 Thomson Reuters.

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Fed says economy grew slowly in July

12:30 PM economy, fed, July, slowly No Comments

WASHINGTON -- The U.S. economy continued to grow gradually in July and early August, but manufacturing activity was softening in many areas of the country, the Federal Reserve said on Wednesday.

In its Beige Book report of anecdotal information on business activity collected from contacts nationwide, the U.S. central bank said retail activity, including auto sales, had picked up since the last report.

"Reports from the twelve Federal Reserve districts suggest economic activity continued to expand gradually in July and early August across most regions and sectors," the Beige Book said.

The economic snapshot was prepared for use by Fed officials at their upcoming policy meeting on Sept. 12-13, when policymakers will debate whether further central bank bond purchases are warranted to spark a stronger recovery.

The economy grew at a 1.7 percent annual rate in the second quarter, supported by exports and investment in the construction of nonresidential structures. The pace was a slowdown from the 2.0 percent rate set in the first quarter.

The Beige Book captured the beginning of the third quarter and suggested the speed of the recovery was falling short of what was needed to spur faster hiring. "Most districts reported that employment was holding steady or growing only slightly," the Fed said.

It also noted that manufacturing was softening in many districts, matching findings from recent regional factory surveys. Much of the slowdown is blamed on weak demand overseas, especially in Asia.

"Many districts reported some softening in manufacturing, either a slowdown in the rate of growth or a decline in the level of sales, output or orders," the Fed said. "Across the districts, few manufacturing firms reported any major hiring or layoffs."

Copyright 2011 Thomson Reuters.

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Ex-Google Exec helps companies to avoid life students

7:30 AM avoid, companies, ExGoogle, helps, students No Comments

Four months after leaving Google, the former head of the business enterprise has help to avoid a new mission - college graduates, the big companies like Google.

Upstart, graduates a service that can be in the form of restricted on Wednesday University Launches money from other people online so that they can start their own businesses, pursue a research project or a personal dream to chase rather than to a "safe" job in the corporate world.

"There is this overwhelming desire, is not the traditional way of bolting itself at a table and climbing the corporate ladder," upstart said founder Dave Girouard.

But he said that too many graduates have must they pay back and feel not College loans, they can get a chance.

Part social network, part offers Crowdfunding service in the style of the Kickstarter, upstart an online forum where the participants personal profiles with pulling their background and goals in the hope of at least five donors after.

The people behind - notable, alumni or other accredited investors - to deploy financing agreed usually $20,000 to $50,000 in exchange for a share of the graduate future income over a period of time will range from 10 years. Upstart determines that allocated the part of future annual income levied on the basis of the total and the qualifications of the person, including academic and field of study.

Girouard found funding is different from a loan, because there no guarantee for the repayment are.

"It is a contract that quota has some payments really," he said.

Upstart is the latest example of so-called Crowdfunding and peer-to-peer lending online services that have sprouted in recent years. Kick start, people online to build money for "creative projects" such as movies, clothing and even robots can, has $250 million promised projects by more than 2 million people since launch 2009 according to the company seen.

Upstart is not just about young people with capital, but to connect them with people behind who can act as mentors, Girouard said.

Girouard, who President of Google's online applications, which competes with Microsoft Corp, said large companies offer many important advantages for some graduates, but go company is not right for everyone.

New graduates setting out on their own can finance provide a way, college loan payments or take over cost of living for a year.

The maximum annual income obtained, a borrower on the hook for can be seven percent and a borrower is more than 15 percent of the total liability never for repayment received. No payments must be made in the years when the quality of annual income is less than $30,000, according to the company.

Upstart, the came with a team, which includes several former Google employees started, received $1,750 million seed capital from investors including Kleiner Perkins Caufield & Byers, Dallas Mavericks owner Mark Cuban, and Google ventures.

The service will first of all for students and graduates from five schools - Dartmouth College (Rhode Iceland) School of design, Arizona State University, University of Michigan and University of Washington but hopes came to many further expand in the first year.

And with the U.S. unemployment rate now in the fourth year of 8 percent, Girouard is so think it a good time to enter of the workforce to outside the box.

"In the year 2011, there was zero net job growth in large enterprises," Girouard said. "You have such a really ugly situation, where children of tons of stand in line... and they are in line for orders, essentially no longer exist, or are actually harder to get."

Copyright 2011 Thomson Reuters.

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Merkel tried to calm uproar over eurozone plans

12:30 PM Eurozone, Merkel, plans, tried, uproar No Comments

By Noah Barkin and Paul Carrel, Reuters
BERLIN/FRANKFURT – Angela Merkel trying a growing storm over eurozone crisis on Sunday after the Bundesbank governing compared buying bond plans to a dangerous drug and a conservative ally of German leader to calm strategy said that Greece should leave the currency block in the next year.

The comments show of Central Bank Chairman Jens Weidmann and a senior figure in the Bavarian Christian Social Union (CSU), Alexander Dobrindt, mounting unease in Germany with the policy used to fight the three-year debt crisis.

Domestic criticism has reduced Merkel's room for manoeuvre at a time when much more help and policy makers crawl Greece to prevent that infection enveloping large countries such as Spain and Italy.

Two days after the Greek Prime Minister Antonis Samaras Berlin visits and an impassioned plea for politicians not to talk about the possibility of a Greek euro exit made it Merkel a warning to allies, who have said the euro zone would better off without its weakest link.

"We are at a crucial stage in the fight against the euro debt crisis," Merkel told public broadcaster ARD in an interview. "My plea is that all their words very carefully weigh."

Dobrindt, whose Partei prepared in the autumn of next year, for a State election in Bavaria and the Federal vote said top-selling German daily Bild that he expected that in the year 2013 left Greece of the euro area. His comments drew a quick rebuke from Foreign Minister Guido Westerwelle, who said that "Mobbing" must stop euro members.

In addition to Greece, makers of President European Central Bank Mario Draghi have plans to bonds Spain and Italy buy have been economical.

The ECB assumes a greater role in the crisis, while Governments, legal and political hurdles to negotiate to coordinate to a longer-term response. Italian head of the Bank should his plans after a Sept. 6 meeting of its 23-member Board detail.

Merkel gave their tacit support of Draghi on a trip to Canada earlier this month and again in the ARD interview, that they believed the policy of the ECB within the framework of its mandate were to ensure to stable prices in the block.

Addicted
But Weidmann, a former economic advisor to Merkel, said in a front page interview with influential German news magazine Der Spiegel, which buys the bond could be against rules against the ECB to provide for Governments almost financing.

"Such a policy for me in the vicinity of State financing of the press" said Weidmann mirror. "In democracies it is parliaments and not the central banks, which should decide on such a comprehensive pooling of risks."

Funding Governments have long a taboo for Germany. Weidmann of's predecessor as Bundesbank Chief Axel Weber, quit last year in protest against the ECB existing, but now dormant bond purchase scheme - the securities markets programme (SMP).

"We should not underestimate the risk that the Central Bank may finance like a drug become addicted,", said Weidmann.

The Bundesbank retains considerable influence within Germany and in the financial markets due to its inflation-fighting credentials, but, as only one of 17 components at the ECB, it is unlikely that it could fail the plan Draghi.

The TV interview asked whether she supported Weidmann, praised Merkel him speak for his doubts out and said that she looked to influence strong Bundesbank within the ECB as positive. But she cared not to show any support for his criticism of Draghi policy.

Money avoid Central Bank sources told of Reuters on Friday, which is setting yield band considering the ECB aims for the new bond purchase program allows you to keep it shielded its strategy and try to speculators.

Weidmann has such yield band targets "sensitive term" but evidence suggests that he have on the Governing Council such reservations isolated was rejected.

"I hardly believe that I am the only one on this one get abdominal pain", he said.

Dobrindt was direct, said Draghi risks as the "currency counterfeiters of Europe" passed into the history books.

Sticking to commitments
With the "troika" of EU, ECB and International Monetary Fund Greece return is prepared to assess the plight of the weakest link in the eurozone Austria's Chancellor said that Athens pay more time to its debt, should be granted, provided that it is to reform.

"I see a good chance we Greeks stick to their agreements with the EU get the but at the same time more time for repayment will come with a result with Greece, definitely," said newspaper Austria Werner Faymann.

"The most important thing is that the Greeks stick on the reforms and savings targets agreed with us." If this is guaranteed, in favour of a delay in repayment, I am ", he said, adding that the delay could be two or three years."

But Germany's economy and Finance Ministers both reaffirmed their opposition to any relaxation of the time frame for Greece, emphasizes that, what would it mean, more time more money there. Samaras has said that he needs more time but not more money.

Samaras caused no promises from Merkel or of the French President Francois hollande, the Greek leaders in Paris met on Saturday. No final decisions on Greece is expected, before the troika delivers his report in October.

Merkel said that she had come from their talks with Samaras convinced that he seriously about the Greek reform drive, but clearly shown that the pressure on Athens was extremely high. "Every day counts," she said.

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UniCredit probed unit HVB on Iran sanctions

4:30 PM probed, sanctions, UniCredit No Comments

US authorities investigate UniCredit German unit HVB as part of a global crackdown on possible violations of sanctions on the Iran, which already has cost a hefty settlement Standard Chartered.

In a statement by e-Mail on Sunday, UniCredit said the New York County District Attorney Office, the U.S. Department of Justice and the U.S. Treasury Department Office of foreign assets control led the investigation.

The Bank was a response to an earlier report in the financial times.

The statement of a particular country not mentioned but a person familiar the situation said the investigation of possible infringements of Iran sanctions involved.

UniCredit said that HVB is a more comprehensive review the historical compliance with U.S. economic sanctions on its own initiative conducting. HVB turned down an opinion on the statement.

"The investigation and evaluation are underway, and further comment at this time it would be inappropriate," UniCredit said.

US authorities have investigated a number of banks to move allegedly billions of dollars in Iran-linked transactions.

British Bank Standard Chartered reaches settlement $340 million this month, after the New York Department of financial services, it charged $250 billion in Iran to hide transactions.

US authorities investigate separately, Royal Bank of Scotland and Commerzbank, Germany's second largest lender.

Commerzbank warned last week that it faced to settle a financial hit could exceed the U.S. spacecraft to violations of sanctions against Iran and others, the provisions.

UniCredit mentioned the U.S. probe in a 463-page brochure for a capital increase in January and his following financial gain.

The documents mentioned but neither HVB, the German bank UniCredit in 2005 acquired or Iran. These details were first reported by the financial times on Sunday.

"It is not possible at this time to the output of the current investigation, including the timing and potential financial implications which it may have on the operating results of the company in each future financial", UniCredit said in its half-year figures on August 3.

Copyright 2011 Thomson Reuters.

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Take us $150 M in Hezbollah money laundering probe

10:00 AM Hezbollah, laundering, money, probe No Comments

NEW YORK--US authorities said on Monday that she suspected of $150 million from a Lebanese Bank, was at the heart of international money laundering seized rules in connection with the Lebanese Shiite Hezbollah group.

In February 2011 the US Treasury the Lebanese Canadian Bank called "primary money laundering concern". The privately owned bank then together with the Lebanese subsidiary of Societe Generale.

Federal prosecutors in Manhattan and the U.S. Drug Enforcement Administration accused Bank officials knowingly in a scheme in which money was sent cars in the United States of various individuals and companies in Beirut from the Lebanon used to buy. The cars were then sold in West Africa, and Hezbollah-linked groups help would smuggle the proceeds in Lebanon authorities said.

Hezbollah is a Shiite Islamist guerrilla and political movement, which with the help of Iran after the Israeli invasion of Lebanon founded in the year 1982.

Washington considers to be Hezbollah a terrorist group. U.S. officials say that it has engaged the distribution and sale of cocaine in West Africa increasingly to drug trafficking to facilitate.

The money was seized corresponding accounts with five different banks in the United States, including Citibank and London Bank Standard Chartered. The five banks have accused any wrong-doing.

A lawyer for the Lebanese Canadian Bank back a call seeking comment does not immediately.

Copyright 2011 Thomson Reuters.

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Germany force Greece day of reckoning

2:30 PM force, Germany, Greece, reckoning No Comments

Editor's Note: this article was to reflect the release of the country, Jean-Claude Juncker represents and add the first name of the German Finance Minister, corrected.

After a short, late summer break are German officials set, drag the bolts back onto Greece, increase the prospects that Athens would leave the euro zone and one cause painful shock to the world economy.

In the last round of talks in Berlin this week to the Greek Prime Minister Antonis Samaras lobbying for a two-year extension of the deeper spending cuts and tax increases when he meets with German Chancellor Angela Merkel, French President Francois hollande and the Luxembourg Prime Minister Jean-Claude Juncker, that the euro-zone finance ministers meet directs.

German officials, but over the weekend, that is, expired time made it clear for the Greek Government. Exclude a different Greek rescue package, said Sunday, German Finance Minister Wolfgang Schauble that Athens only to deal with the economic pain still.

"There can be no help - we do not yet a new (rescue) program," Schauble in Berlin said a public meeting. "There are limits."

But several election rounds of budget cuts have left Greek officials with their own limits. After two years of contraction shrinking Greek economy by more than 6 per cent per year. Previous rounds of budget cuts caused massive, sometimes violent, demonstrations and upended the careers of politicians which they adopt.

The Greek Government must not money, a massive due before year's end to repay a pile of debt. The latest bailout deal, set up by the European Union and the International Monetary Fund have come under Greek officials budget cuts in the next two years EUR 11.50 billion ($14 billion). Those cuts alone represent more than 5 percent of falling gross domestic product of the country.

The pain in addition to facilitate cuts Athens wants two more years expected to cut its budget deficit to below 3% of GDP, of 9.3 percent this year. But more time means more money. Greece bailout extend by two years and another 20 billion euros ($ 24 billion to $60 billion) in addition to the €130 billion ($157 billion) is already paid or obligated, according to estimates by some euro-zone officials and economists costs would.

But the German public has no desire to send more of their savings to Athens after Greece has shown little to no progress in reviving the economy and slowing growth as also Germany. As Europe's largest economy-accounting about 30 percent of gross domestic product in the eurozone-is a German popular support for any Greek aid package of crucial importance.

"I have always said that we help the Greeks, but we can not responsibly throw money into a black hole,", said Schaeuble, reflecting a widely felt atmosphere with German voters.

Now German officials decided after dozens of peaks and repeated failed bailout plans, apparently, that time of reckoning for the countries of the euro area, the issued to free and took too many debts, according to Michael Crofton, CEO has arrived from Philadelphia Trust Co.

"they go hard stand against the euro," he told CNBC. "If you, if you don't do what you said that you do not pay the Piper to do if you do not cut on your budget and your economies impose abstinence, then you'll be gone."

Greece departure from the common currency may once unthinkable, near the city.

It would force almost certainly Athens euro to default on much of its debt, which is now about 160 percent of its annual economic output. European Governments and banks, which own about two-thirds that debt would have to write off much of it probably.

With each failed attempt to find a viable solution, stop Greece into the euro area weakened membership. Recently, did European officials more than just think about Greece departure from the common currency.

Europe's Central Bank contingency plans for the possible financial shock began bracing for the prospect, if Greece out is forced. Under the plan, reported over the weekend by Germany's per mirror magazine would that set up which is governing a firewall, debts, bonds of other struggling eurozone countries such as Spain and buy on Italy, setting interest rates on these bonds of threshold values rose.

Such a move could deter speculators from the pressures which would add to prices to a level that larger economies that contribute to the view access over a debt "Infection" included on Europe's core pain. Central bankers have also some form of bank deposits insurance panic withdrawals by private individuals and small businesses to curb whereas drawn.

"I think we are pretty well prepared a Greek exit," said Chris Watling, CEO of Longview economics. "This is something which the European Heads of State and Government have thought about it for two years." The bottom line is that the Greek numbers are not huge. "I think that it is very containable at this stage."

Containable, perhaps, but it will be, not totally painless operation for the financial markets and banking systems after a top official of the European Central Bank.

"A payout of Greece would be manageable," Jorg Asmussen said two German newspapers over the weekend. But "A withdrawal would be not so neat as some imagine." It would be associated with a lower growth and higher unemployment and very expensive. In Greece, all over Europe, and Germany also. "

Gillian Tett, editor-in-Chief of the financial times United States, explains how cost-cutting measures are expected to growth in the euro area cripple and whether Greece will leave the euro.

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1,000 Suicides in connection with Britain's economic slump?

6:30 PM Britains, connection, economic, slump, Suicides No Comments

© Luke MacGregor / Reuters / Reuters, file

A man looks advertisement posted in the window of the recruitment agency in London on 14 March 2012. Britain's economy shrank in the last nine months and produces 4.5 percent less than before the economic crisis now.

LONDON--A painful economic recession, rising unemployment and biting austerity may have driven more than 1,000 people in the UK to commit suicide, according to a study published on Wednesday.

The study, a so-called time-trend analysis, that the expected if pre-recession trends have been continued, reflects the actual number of suicides compared to findings elsewhere in Europe, where suicides on the rise.

"This one murky memory after the euphoria of the Olympics from the challenges we face and those, the forthcoming," said David Stuckler, a sociologist at the University of Cambridge and the study led, published in the British medical journal (BMJ).

The analysis showed that between 2008 and 2010, 846 were more suicides among men in England as would have been expected if previous development continued and 155 more in women.

Between 2000 and 2010, each was 10 per cent increase in the number of unemployed with a 1.4 per cent increase in the number of male suicides per year, the study found.

The analysis used data from the national clinical health outcomes and database of the Office of national statistics.

Stuckler, who worked with researchers from Liverpool University and the London School of hygiene and tropical medicine, said while this kind of statistical analysis could not establish a causal link, the power of associations was strong. Its conclusions were reinforced by other indicators of rising mental health problems, stress and anxiety, he added.

Hundreds of anti-austerity have been an own memory of demonstrators in Greece. 77-Year-old former pharmacist himself killed before the Parliament in Athens. In a note he said Government his pension wiped out cuts and robbed him his would. ITV Martin Geissler reported.

He was also the study showed a small reduction in the number of suicides in 2010 that coincided with a slight increase in male employment.

A survey of 300 family doctors, published by the research group insight on Tuesday showed that 76 percent of those polled on the impact of the economic crisis, that they thought that it was said human nutrients leads to more fear, abortions and abuse made alcohol.

Data showed information that the number of prescriptions for antidepressants in England rose foregone by 9.1 percent in 2010 Centre for health and social care this month by the Government.

One in July published according to study by Stuckler, Europe-wide hot from 2007 to 2009 unemployment increased suicide rates such as the financial crisis and drove and pushed income.

The countries that the worst of a severe economic downturn, such as Greece and Ireland taken saw the dramatic rise of suicides.

In the UK, there is little doubt that got harder times. The economy shrank in the last nine months and produces 4.5 percent less than before the economic crisis now.

Britain has fought, find a way to recover from a deep double dip recession. Recovery could be awakened by the Olympic Games? NBC's Stephanie Gosk reports.

Public debt is well over 1 trillion pounds and will grow to be with austerity pushed by the Government over 90 percent of GDP.

Many British living standards for 40 years and the crisis hard, had the worst squeeze young people with over 20 percent rising youth unemployment has hit.

'Income, status, meaning'
Stuckler of BMJ study found that the number of unemployed men grew on average across the UK by 25.6 percent annually from 2008 to 2010 an increase linked to an annual increase in the male suicides of 3.6 percent.

"A lot of men's identity and purpose is tied up with a job. "It brings income, status, importance..." Stuckler, said in a telephone interview.

"And there is also a pattern in the United Kingdom, where men are three times more likely to suicide than women, while women tend to report much, become depressed and ask for help."

The World Health Organization estimates that every year almost 1 million people die by suicide-a rate of 16 per 100,000, or one every 40 seconds.

UN health body also estimated for every suicide, there are up to 20 attempted.

New figures published on Tuesday also showed that Europe is closer to recession, facing down pulled by the crippling debt problems 17 States that use the euro.

"In Greece get worse things." There is no future for the next few years, "says Christos Christoglou, a Greek inspection engineer who moved to Germany, to find work."

Eurostat, statistics agency of Europe, said that the economies of the euro area and the European Union with 27 countries, a quarterly rate of 0.2 per cent decline in the second quarter of the year. The output for both regions was flat in the first quarter.

"Cost-cutting measures send us into poverty,", said Armando Farias, Member of the Executive Committee of the Confederation of the Portuguese workers. "We need development and investment, and we can not get it in this way." We need to change path. Something needs to be done must quickly and easily. "

Reuters and associated press contributed to this report.

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Competition in China is stiff and cheap iPhone,

1:00 PM cheap, China, Competition, iPhone, stiff No Comments

SHANGHAI--in China's booming market, which is the United States as world's largest overtake set in this year, a large number of little-known local companies are primed with cheap mobile phones, market share of us giant Apple Inc. iPhone to squeeze.

In the current local challenge to the iPhone, Xiaomi starts the successor to its popular MiOne Smartphone, the top end specifications above those of the iPhone 4S--um is likely to have about half of the price of technology on Thursday.

While iPhone sales in China will rise, Apple's market share can stagnate or money that grows the iPhone in just a few affluent Chinese cities, said even diving as the market-changing demographics analyst.

"The sweet spot of affordability in China 800-1,500 Yuan ($ 130$ 240)," said Michael Clendenin, managing director of Shanghai-based consulting firm RedTech advisors. "The ' Lao Bai XING', or man in the street will go for this mid tier phones."

Industry researcher IDC estimates that in China last year smartphones cost less than $200 40 percent of shipments, while $700 cost devices and more 11 percent of the market accounted for.

Apple released a single iPhone model a year at a price - about $800 - equivalent to about two months figures for urban Chinese, half of the Chinese population 1.30 billion make up. Analysts say that the real growth is in China in cheaper smartphones, where a large number of models at different prices to first-time buyers appeal.

"Apple is not China rule, only because the limited models that they have and the price points they addressed", said an analyst at IDC. TZ WONG, "On the basis of these two factors, we think Apple and the number 1 which will be Smartphone in China."

Apple in the January-March Smartphone shipments in China with 17.3 percent market share, trailing Samsung Electronics 19.2 percent, according to market research firm Gartner on the second place.

Smartphones from Xiaomi--founded only two years ago, but has more value than BlackBerry manufacturer research in motion, to private market valuations-proved so popular, that in minutes after going on sale online sold out. The company, founded by CEO Lei Jun, has last month, that its first half-year was sales close to $1 billion, as it sold more than 3 million mobile phones.

Mirroring Apple's annual Worldwide Developers Conference (WWDC), rise where supporters would pay to Steve Jobs listen new products presented, the informal clad Lei MiOne fans goes 199 Yuan ($31.30) on the introduction of Beijing, the proceeds to charity.

Apple's market share by volume has been on a downward trend and the share of the market commanded by his mobile iOS expected operating system is, slip to third place by 2016 from the second this year according to Gartner analyst Sandy Shen--under Android from Google Inc. and Microsoft Corp. Windows.

Apple's iPhone sales in China, the second-largest market, stumbled across storage regulations with the launch of the iPhone 4s in April-June. This additional inventory meant resellers needed to buy not so many iPhones during the quarter and the expected launch later probably held back this year of iPhone 5, with features for advanced Chinese orders.

"Apple's market share is quite stable." It will be flat over the next five years. "Although volume-wise it grows, that is because the overall market is growing", said Shen.

Research firms IDC and Gartner predictions, China's Smartphone shipments 140 million this year meet were topping out in the United States.

Growth is largely by Smartphone, powered by ZTE Corp., Lenovo Group and smaller private companies like Xiaomi, Gionee and Meizu technology.

Meizu cell phones, to sell, for 1,500 yuan in China and Hong Kong are celebrated by Western technology blogs for the supply of high-end smart phones at bargain prices.

Alibaba group, Shanda Interactive and Baidu Inc have launched all smartphones offer of even cheaper models, this year in the life for under 1,000 yuan. Baidu phone, made with retail partners on 899 Yuan ($140), while waterproof Alibaba Smartphone, with Haier Electronics Group, cost 999 Yuan.

"For those with a iPhone or Samsung... it's only a replacement cycle." "But for many people who do not have their first Smartphone, the people are that get" cheap smartphones, said Shen.

Copyright 2011 Thomson Reuters.

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