Microsoft Boosts Dividend to 16 Cents, Gets Debt-Sale Approval

Sept. 22 (Bloomberg) -- Microsoft Corp. raised its quarterly dividend by 3 cents, or 23 percent, to 16 cents a share and got approval from its board to sell as much as $6 billion in additional debt.

“This higher dividend, combined with our ongoing share repurchase program, reflects our commitment to returning capital to our shareholders and our confidence in the long-term growth of the company,” Microsoft Chief Financial Officer Peter Klein said yesterday in a statement.

Microsoft is planning to sell debt this year to pay for dividends and share repurchases because much of its cash is held overseas, a person familiar with the matter said last week. The company will try to raise as much as possible without jeopardizing its debt rating of AAA, the highest available, said the person, who declined to be named because the plans are confidential and not completed.

The dividend increase was a sign Microsoft is confident in its ability to generate cash, said Brent Thill, an analyst at UBS AG in San Francisco.

“While not as high as some Street expectations, it was a larger incremental increase than the 2-cent dividend hike Microsoft’s board approved in fiscal year 2009,” he said in a note to clients.

‘Meaningful’ Acquisition?

Thill, who recommends buying Microsoft shares, estimates the company will generate $25 billion in free cash flow in the current fiscal year. Based on that, Microsoft could potentially increase its share repurchases beyond his $12 billion estimate for the year or pay for a “meaningful” acquisition, he said.

Bloomberg data had indicated the company would increase its quarterly dividend by 2 cents a share, while Heather Bellini, an analyst at ISI Group, predicted an increase of 4 cents. A quarterly dividend of 16 cents would yield 2.5 percent.

Microsoft fell 28 cents to $25.15 yesterday in Nasdaq Stock Market trading. The shares have dropped 17 percent this year.

A debt offering may come before the end of the company’s fiscal year, which closes next June, and could come as soon as this calendar year, the person familiar with the matter said.

Issuing $6 billion probably wouldn’t put the rating at risk, according to data compiled by Bloomberg. The company, based in Redmond, Washington, is under pressure to return more cash to shareholders amid declines in its stock price this year.

Cash Hoard

Microsoft reported $36.8 billion in cash and short-term investments at the end of last quarter. Much of that is held overseas, forcing the company to pay taxes on the money if it uses it for dividends or stock repurchases. Bellini estimates that about 74 percent of Microsoft’s cash is overseas.

Microsoft said yesterday that in the 10 years through June, it had returned almost $170 billion to investors through dividends and share repurchases. The company began its dividend in 2003 and offered a $3-a-share special dividend in 2004.

Microsoft sold its first debt in May 2009, a $3.75 billion offering, in a bid to diversify its capital structure and add to its cash pile for acquisitions, capital expenses and share buybacks. The sale was comprised of $2 billion of 2.95 percent, 5-year notes; $1 billion of 4.2 percent, 10-year debt; and $750 million of 5.2 percent, 30-year bonds.

In June, Microsoft said it would sell $1.15 billion of convertible senior notes due in 2013 and use the proceeds to retire some of its commercial paper.

Jobless rate rises in Maryland, Virginia, steady in D.C.

Unemployment rates in Maryland and Virginia rose in August, according to federal government data released Tuesday, signaling a setback for the Washington area's economic recovery and highlighting the fragile state of the U.S. labor market.

In Maryland, the jobless rate jumped to 7.3 percent after holding for two straight months at 7.1 percent, according to the U.S. Bureau of Labor Statistics. The state lost a net of 5,700 jobs in August, officials said, even though the number of positions that were added was three times the national average.

Virginia's unemployment rate rose to 7.0 percent, from 6.9 percent in July, reflecting a net loss of 2,700 jobs. The District's jobless rate remained at 9.9 percent even as the city lost thousands of positions from such steady job creators as professional and business services employers.

The jurisdictions' job losses pale in comparison with the tens of thousands of cuts during the peak months of the recession, and the jobless rates in Maryland and Virginia are well below the 9.6 percent national average. Still, the apparent shift in momentum was a discouraging sign for some economists and experts who earlier this year had pointed to falling unemployment rates as evidence that recovery was taking hold.

"That is not the direction we want to be going," said Sara Kline, associate economist at Moody's Analytics. "Overall, I'd say it's not a good report. The contraction is concerning, something to keep an eye on."

The local jobs picture parallels trends in the national unemployment rate, which rose a tenth of a percentage point in August. Similarly, the nation is experiencing a sluggish recovery: Private-sector jobs are being created, but not quickly enough to put a significant number of unemployed people back to work.

Even though the District's unemployment rate didn't rise, the city's data still reflect a troubling trend. The number of employed residents dropped by 2,900, while the number of the unemployed fell by only 200. Labor experts said this suggests that many long-term unemployed people became discouraged, stopped looking for work and were no longer counted in the data - a reversal of a scenario that played out earlier in the year.

In Maryland and Virginia, the rising unemployment levels were not caused by long-term "discouraged" job seekers who were again counted when they resumed their job search, as has been the case at times in the past year. In both states, employment declined while unemployment increased.

The data in all three area jurisdictions reflect the dismissal of temporary workers involved in the federal census and, in the case of the District, the end of the city's summer youth jobs program. But experts say the numbers also reflect decreases in private sector jobs and a possible retrenchment among some employers about increasing their payrolls.

Maryland lost 3,000 jobs in retail, 2,200 in professional and business services, 1,700 in education and health services and 1,700 in government. It gained 2,000 jobs in construction and 1,000 in financial activities.

Virginia lost 6,000 jobs in government, 1,300 in professional and business services and 1,300 in leisure and hospitality. It gained 1,400 in education and health services, and 1,100 in construction.

The District lost 2,000 jobs in professional and business services in August, 1,500 in education and health services and 800 in leisure and hospitality. It gained 400 jobs in construction and 100 in financial activities.

"There's concern about the recovery - it is moving forward but at a much slower pace," said Ann D. Lang, senior economist at the Virginia Employment Commission. "The housing market and labor market are so slow in returning - that worries employers and consumers."

Nationwide, the state with the highest unemployment rate was Nevada, at 14.4 percent, while North Dakota had the lowest rate, at 3.7 percent. North Carolina gained the most jobs in August, adding 18,600. Michigan lost the most, shedding 50,300.

Oracle Rises After Corporate Spending Fuels Software, Sun Sales

Oracle hired Mark Hurd, the former CEO of Hewlett-Packard Co., on Sept. 6 as co-president responsible for sales, marketing and customer support. Kimberly White/Bloomberg

Play Video

Sept. 16 (Bloomberg) -- Brent Thill, analyst at UBS AG, talks about first-quarter earnings at Oracle Corp. Oracle reported profit and revenue that beat analysts’ estimates as sales of database software and Sun Microsystems server computers helped it capitalize on a recovery in information-technology spending. Thill talks with Carol Massar and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Play Video

Sept. 16 (Bloomberg) -- Renny Ponvert, chief executive officer of Management CV, talks about Oracle Corp.'s decision to hire Mark Hurd, who formerly ran Hewlett-Packard Co., as co-president. Ponvert speaks with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Oracle Corp., the second-largest software maker, rose in late trading yesterday after its first- quarter results and sales forecast topped analysts’ estimates, helped by an expansion into computer hardware.

Excluding acquisition costs and other expenses, earnings climbed to 42 cents a share last quarter, beating the 37-cent average of projections compiled by Bloomberg. Oracle indicated that sales will be at least $8.4 billion in the current period. Analysts had estimated $8.21 billion.

The company is counting on hardware to spur a new wave of growth, underpinned by its acquisition of Sun Microsystems Inc. this year. Oracle is assembling more prepackaged systems, which combine its software with Sun’s servers. By adding salespeople and engineers and moving away from low-end machines, Oracle aims to squeeze more sales and profit from hardware, which generated $1.7 billion last quarter.

“We can dramatically improve margins and double the top line,” Chief Executive Officer Larry Ellison said on a conference call, without giving a timeframe for the growth.

Oracle rose 4.7 percent to $26.55 in extended trading. The shares, up 3.4 percent this year, had closed at $25.36 on the Nasdaq Stock Market.

The company, based in Redwood City, California, reports sales that include deferred revenue from acquired businesses and don’t conform to generally accepted accounting principles. On that basis, sales in the period ended Aug. 31 jumped 50 percent to $7.59 billion. Analysts on average predicted $7.32 billion.

Bigger Deals

“Deals seem to be getting a little bigger,” President Safra Catz said on the conference call.

Oracle is capitalizing on a recovery in corporate information-technology spending by offering a range of software products assembled through acquisitions. The hiring this month of Mark Hurd, who formerly ran Hewlett-Packard Co., may help the company manage Sun and expand into new areas of hardware. Oracle bought Sun for $7.3 billion in January.

Oracle’s earnings add evidence that corporate spending has supplanted consumers as the main driver of demand for computers and software.

Intel Corp., the largest supplier of computer chips, said on Aug. 27 that its third-quarter revenue will be below its previous forecast, partly because of weaker-than-expected demand for consumer personal computers. Dell Inc. also cited weakness in U.S. consumer demand for PCs when its second-quarter gross margin fell short of projections.

Profit Forecast

Excluding some costs, profit will be 45 cents to 47 cents a share this quarter, Catz said. Analysts had estimated 45 cents. Sales will grow 43 percent to 47 percent from a year earlier, excluding the effect of currency fluctuations, she said.

“They surprised across the board, line by line,” said Sasa Zorovic, an analyst at Janney Montgomery Scott LLC in Boston. He recommends buying the shares and doesn’t own them. “IT spending is recovering, and in the past couple of quarters Oracle has done better than the overall IT environment.”

Oracle is the largest seller of database software, second to SAP AG in business applications, and the No. 2 provider of application-connecting middleware -- after International Business Machines Corp. Its goal for Sun, a money loser at the time of the acquisition, is to contribute $1.5 billion in operating income during its first year in the fold.

Combined Products

The company will unveil “two high-end systems that combine Sun hardware with Oracle software” at next’s weeks Oracle OpenWorld show in San Francisco, Hurd said in a statement.

Investors are looking for clues from Oracle about whether Hurd’s hiring signals more hardware acquisitions, Zorovic said.

“To what extent will Sun be the first of many in hardware?” Zorovic said.

Net income in the fiscal first quarter rose 20 percent to $1.35 billion, or 27 cents a share, from $1.12 billion, or 22 cents, a year earlier. Sales in the year-earlier period were $5.06 billion.

New software license sales, an indicator of future revenue, rose 25 percent to $1.29 billion. David Hilal, an analyst at FBR Capital Markets in Arlington, Virginia, predicted $1.12 billion.

Sales of new database and middleware licenses rose 32 percent to $937 million. Business applications license revenue increased 10 percent to $349 million.

Corporate technology spending will increase 2.9 percent this year to more than $2.4 trillion, after a 5.9 percent decline last year, according to market-research firm Gartner Inc. in Stamford, Connecticut.

Support Contracts

Ellison has bought more than 65 companies since early 2005. That’s increased the types of programs Oracle can sell and added customers who eventually buy support contracts, providing a stream of profitable revenue.

Oracle hired Hurd on Sept. 6 as a co-president responsible for sales, marketing and customer support. HP filed a lawsuit on Sept. 7 seeking to block Hurd from working at Oracle. Serving as an Oracle president would make it “impossible” for him to avoid using or disclosing HP’s trade secrets and confidential information, according to the state court complaint.

The suit hasn’t prevented Hurd from starting work at Oracle.

“Hurd fits well into Oracle’s next challenge -- competing in the market for integrated hardware and software systems,” FBR’s Hilal said in a note to clients. He rates Oracle “outperform.”

Japanese Bonds Pare Advance After Government Intervenes in Currency Market

Japan’s 10-year bonds pared earlier gains as stocks rallied after the nation intervened in the currency market for the first time since 2004.

Ten-year yields climbed from a two-week low as the Nikkei 225 Stock Average surged the most in seven weeks, damping demand for the relative safety of government debt. Bonds rose earlier after Moody’s Investors Service said Prime Minister Naoto Kan’s policy strategy supports the stable outlook on Japan’s debt ratings. Kan defeated Ichiro Ozawa in the ruling party’s leadership election yesterday.

“The currency intervention prompted investors to take profit, weighing on the bond market,” said Kazuya Ito, a fund manager at Daiwa SB Investments Ltd. in Tokyo. “The size of the intervention hasn’t become clear, and there may be a sell-off of the dollar again to test the authorities’ resolve. So, people can’t continue to sell bonds.”

The yield of the benchmark 10-year bond fell 4.5 basis points to 1.06 percent as of 1:38 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The 1 percent security due September 2020 rose 0.403 yen to 99.457 yen. The yield earlier dropped as much as 6.5 basis points.

Ten-year bond futures for December delivery gained 0.55 to 141.85 on the Tokyo Stock Exchange. The Nikkei 225 gained 2.5 percent, the most since July 28.

The yen weakened to as low as 85.09 per dollar today after earlier appreciating to 82.88, the strongest since May 1995. A stronger yen reduces the value of overseas sales at Japanese companies when repatriated.

Finance Minister Yoshihiko Noda confirmed the intervention and told reporters in Tokyo the move was unilateral. Chief Cabinet Secretary Yoshito Sengoku said the ministry considers 82 per dollar to be the line of defense.

Kan’s Victory

Bonds still gained for the day on speculation Kan’s victory over Ozawa yesterday will allow him to implement measures to trim the nation’s debt levels.

Kan, a former finance minister, has said he will consider doubling the sales tax to tackle the world’s largest public debt. He vows to end Japan’s prolonged struggle with deflation.

Thomas Byrne, senior vice president at Moody’s, said in an e-mail that Kan’s strategy supports the stable outlook on Japan’s Aa2 rating and the focus will be on whether he can follow through on and flesh out his fiscal plans.

Ten-year yields had gained more than 20 basis points since Ozawa expressed his intention on Aug. 26 to challenge Kan. Ozawa, who heads the DPJ’s largest faction, has said the government may have to issue more bonds for spending measures to boost the economy.

Breakeven Rate

The so-called breakeven rate shows investors’ projections for inflation were little changed even after Kan’s victory.

“Intervention alone can’t put the yen in a sustainable depreciation trend,” said Junichi Makino, a senior economist at Daiwa Institute of Research Ltd. in Tokyo. “It worked today, but it doesn’t guarantee it will be effective tomorrow. We can’t really expect effective measures from the government to turn around Japan’s economic stagnation and beat deflation.”

Traders see prices falling an average 0.98 percent over the next five years, as measured by the difference in yields between inflation-linked bonds and conventional debt. The so-called breakeven rate has been negative for at least a year.

The United Nations said in its annual Trade and Development report yesterday a continuation of the global expansionary fiscal stance is necessary to prevent a deflationary spiral. Deflation, a general drop in prices, enhances the purchasing power of the fixed payments from debt.

“It’s very difficult to maintain an economic recovery while restructuring a nation’s finances,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., which manages about $57 billion. “It’s desirable to take account of the risk” of a global deflationary spiral.

India Minister: Hope to Resolve BlackBerry Issue in Two Months

NEW DELHI -- India hopes to resolve the issue of access to Research In Motion Ltd.'s BlackBerry services within the two-month time frame provided by the government, the federal communications minister said Tuesday.

"Home Ministry has extended the time frame for RIM. We are periodically reviewing," A. Raja told reporters on the sidelines of an industry conference.

The government had threatened to ban BlackBerry if the Canadian company failed to come up with tools to monitor the services by the end of August.

However, it extended the deadline for another two months from Sept. 1 after RIM provided solutions for local security agencies to monitor the company's BlackBerry corporate email service. RIM had already provided access to other services such as messenger and chat.

On Aug. 30 India said it would start using the solutions from Sept. 1, assess their feasibility and effectiveness, and review the situation in 60 days.

Separately, Mr. Raja said the Telecom Commission--a part of the Department of Telecommunications--will consider moves to offer relief to companies that received licenses to offer second-generation mobile services in early 2008, but haven't been able to roll out services within the mandatory time frame.

"In the last operator's meeting, it was highlighted bailout provisions may be done. It will be discussed in the telecom commission," Mr. Raja said.

GoDaddy.com Goes on the Auction Block

GoDaddy.com, the closely held website that registers Internet domain names, has put itself up for sale in an auction that could fetch more than $1 billion, people familiar with the matter said.

Qatalyst Partners, the boutique firm run by veteran technology banker Frank Quattrone, has been hired to shop the Go Daddy Group Inc., which runs the world's largest domain name registrar, these people said. Private-equity firms are expected to bid for the company, which currently has more than 43 million domains under management.

GoDaddy.com and Qatalyst representatives did not immediately respond to requests for comment.

Based in Scottsdale, Ariz., GoDaddy.com is owned by Bob Parsons, who founded the company in 1997 and is its chief executive—a man the company website describes as "not shy to speak his mind." The company is well known for its edgy advertising, including Super Bowl commercials and ads featuring different "Go Daddy Girls," including racing car driver Danica Patrick.

In addition to registering domain names, GoDaddy.com sells e-commerce, security and other services to people and businesses looking to manage their online presence. The company posted revenue between $750 million and $800 million in 2009, according to people familiar with the matter.

Two smaller competitors, Register.com and Network Solutions, have both been in private-equity's hands. Earlier this year, technology-focused buyout firm Vector Capital sold Register.com to another web registration and design provider , Web.com Inc., for $135 million. Network Solutions is owned by General Atlantic Partners.

Private-equity firms are attracted to the business because of the steady cash flow from monthly fee-based subscriptions and the potential for "up-selling" customers additional features to enhance their websites.

Banks may get to fix interest rate on savings a/c

MUMBAI: Guaranteed return on savings banks deposits may soon be a thing of the past. The Reserve Bank of India has moved a step forward in its proposal to deregulate this interest rate.

After mooting the idea, the central bank has now set up a working group to look into the modalities of deregulation, said RBI deputy governor Usha Thorat at a Ficci-IBA seminar in Mumbai on Wednesday. “An important consideration is whether deregulation of savings rates would draw more population into the fold of formal banking system,” she added.

Deregulation would mean that banks would have the freedom to set the interest rate on savings accounts based on their need for funds. At present, the rate of interest on savings deposits is mandated by RBI at 3.5%.

Since banks have put in place a system where interest rate is calculated on daily balances, a transition to deregulated interest rates on savings account does not have any technical challenges. Most banks are in a position to determine their liquidity requirement and price their savings deposits accordingly.

Former RBI deputy governor SS Tarapore has been a strong proponent of freeing interest rates on savings deposits. In a recent article in a business publication, Mr Tarapore had said: “The interests of small depositors have been, for all practical purposes, bartered away. With the Consumer Price Index (CPI) showing a year-on-year increase of 13-14% and the Wholesale Price Index (WPI) an increase of 10%, the interest rate on savings bank accounts of 3.5% reflects high negative rates of return. A rock-like savings bank deposit rate of 3.5%, irrespective of the overall situation, reflects policy paralysis.”

Bankers are unwilling to comment on whether the savings rate will rise or fall if interest rates are freed. Individually, most banks want to reduce the cost of savings deposits as these are operational accounts with several free services. But at the same time, there is a fear that an upstart may introduce high rates to increase marketshare, forcing others to follow suit.

Until last month, SBI was offering a mere 2.5% on term deposits up to 45 days which was one percentage point lower than the 3.5% on overnight savings deposits. Last month, the rate was revised to 4%.

“On one hand, savings accounts provide banks with low-cost funds of an enduring nature which facilitate asset-liability management and help lower lending rates. On the other hand, the costs not currently recovered in handling such accounts have to be considered as well,” Ms Thorat said, highlighting various issues that would have to be dwelt upon.

Totally freeing rates could, in situations where there is a virtual monopoly of banking, lead to lowering rates in some areas while leading to increase in other areas.

“It would need to be ensured that there is no discrimination between different customers of the same bank. Transparency in cost recovery could facilitate deregulation — this would also need to be non-discriminatory across locations,” she said. All these issues would be dealt with by the working group.

Car Sales in India Rise 33% to Record on Nissan, Volkswagen's New Models

India’s passenger car sales rose to a record for the second consecutive month in August as economic growth and new models from Nissan Motor Co. and Volkswagen AG boosted demand.

Domestic sales rose 33 percent from a year earlier to 160,794 units, the Society of Indian Automobile Manufacturers said in a statement in New Delhi today. The jump is the 19th consecutive increase, according to data compiled by Bloomberg.

Ford Motor Co. and Maruti Suzuki India Ltd. are among carmakers who unveiled at least 10 models in India this year as expansion in the world’s third-fastest growing major economy stokes demand. India’s government estimates annual vehicle sales may double to 3 million by 2015, helped by rising incomes and the creation of new jobs.

“The Indian consumer now has more models to choose from,” said Deepesh Rathore, New Delhi-based India managing director at IHS Automotive. “Going forward, most customers expect interest rates to rise, and therefore they want to lock in purchases at current rates.”

Domestic passenger vehicle sales, which include vans and sport-utility vehicles, gained 34 percent to 204,227, the statement said. Vehicle exports declined 7.4 percent to 38,279.

Nissan, which began selling the Micra small car in July, sold 1,182 units. Volkswagen sold 3,211 units of Polo last month after introducing the hatchback earlier this year.

The surge in car sales, stoked by a doubling of per-capita income in India over the past eight years, has also brought in industrywide waiting lists for the first time in more than a decade.

India’s economy may expand 8.5 percent in the year to March 31, the most in three years, the central bank said on July 27. That’s encouraged a consumer spree in the second-most-populous nation fueling the second-fastest inflation rate in the Asia Pacific and prompting the bank to raise rates four times in six months to try to damp price gains.

Making mortgage payments on an underwater loan? You deserve a break too.

The government has bailed out Wall Street firms, giant banks, creditors of Fannie Mae and Freddie Mac - and is trying to bail out people who've defaulted or are about to default on their mortgages.

But let's say you're part of a hardworking family that has done nothing wrong except buy a home when the housing bubble was at its peak a few years ago. Your mortgage is now way underwater, but you're still making payments because you want to stay in your home - and you're honorable. You're paying for everyone else's bailout, but because you have no equity in your house, you can't refinance to take advantage of the ultra-low mortgage rates that Uncle Sam's bailout strategy has produced. To use the technical term, you're being screwed.

Enter Keith Gumbinger, a leading mortgage expert, with an interesting proposal for how the government can help you, help the housing market and even help whoever owns your mortgage. Gumbinger, a vice president at the HSH Associates mortgage consulting firm, wants the federal government to issue what he calls "value gap coverage." It would reduce your interest payments, reduce your incentive to walk away from your mortgage and show that behaving well doesn't make you a sucker.

"This is for people who are underwater on their mortgages but still current on them and have every intention of remaining so, and hope to remain in their homes for the foreseeable future," says Gumbinger. "These people are being compelled to pick up the tab for reckless borrowers and failing banks, and get absolutely no help from anywhere for themselves. How about a reward for doing the right thing for a change?"

Let me show how this would work, using HSH numbers that I've rounded for simplicity's sake. Say you bought a house for $350,000 in July 2006 - those were the days of 100 percent financing, so you borrowed $350,000 on a 30-year, fixed-rate mortgage at 6.8 percent. The house is now worth $280,000, but your mortgage balance is $334,000. The current rate for a 30-year, fixed-rate loan, if you could get one, is 4.7 percent.

Under Gumbinger's plan, you'd get a new $280,000 mortgage at 4.7 percent, and the government would guarantee the other $54,000, on which you'd pay 4.7 percent interest to the current mortgage holder. This would reduce your payments by $6,700 a year, or roughly 25 percent. Your mortgage holder wouldn't have to take a write-down, because the shortfall would be guaranteed by Uncle Sam. You get lower payments, preserve your credit rating and save your pride by not becoming a deadbeat.

The government is probably on the hook, in one way or another, for some of your shortfall now. This way, everyone gets breathing space for the home market to recover. The government's exposure would shrink over time as house prices began to rise modestly (or so we hope) and your payments gradually reduced the principal on your loan. You wouldn't have any equity in your house until its market value exceeded the loan balance plus the government's guarantee. But then again, you don't have any equity now.

Gumbinger says there are many differences between his proposal and the government's latest mortgage relief effort, including the fact that theirs requires mortgage holders to take a writedown, and his doesn't. You can find Gumbinger's detailed plan, with the fees he proposes to cover costs,

Sure, this plan isn't perfect. Among other things, we'd have to make sure people didn't immediately sell their house, stick the government with the $54,000 bill, then buy another house with a low-down-payment FHA mortgage to reduce monthly payments and have all the equity upside.

But Gumbinger's idea strikes me as a better place to start than current restructuring programs, which sound great but somehow don't seem to work out.

How much would this cost the government? Who knows? But it has to be cheaper financially and socially than leaving millions of honorable homeowners at higher risk of foreclosure and forcing them to pay above-market rates on underwater loans.

OIL FUTURES: Crude Up On Higher Asia Shares; Focus On Inventory

SINGAPORE (Dow Jones)--Crude-oil futures were higher in Asia Thursday, helped by stronger Asian equity markets, but gains were limited on concern that high U.S. oil stockpiles and Europe's sovereign debt problems would continue to overshadow positive data about the global economy.

Investors are focused on whether U.S. President Barack Obama will follow through on his recent proposals to stimulate the U.S. economy through infrastructure spending and tax credits, said Jonathan Barratt, managing director at Commodity Broking Services in Sydney. "If the market smells a rat, investors are going to start selling aggressively," he said, adding that oil markets have been "remarkably resilient."

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $74.79 a barrel at 0634 GMT, up $0.12 in the Globex electronic session. October Brent crude on London's ICE Futures exchange rose $0.08 to $78.25 a barrel.

Meanwhile, most traders have likely priced in weaker U.S. oil inventory data, due later today from the U.S. Energy Information Administration.

"We have a difficult time seeing it coming out as a bullish report," said Peter Beutel, president of Cameron Hanover, in a note to subscribers. "Estimates suggest that stocks will remain at or near multidecade highs."

Crude stocks are expected to rise by 1 million barrels, according to the average estimate of 15 analysts polled by Dow Jones Newswires. Gasoline inventories may fall by 800,000 barrels, while distillate stocks, which include heating oil and diesel, are expected to rise by 500,000 barrels.

"Another significant expansion in the year-over-year supply deficit appears inevitable, while the surplus against the averages is likely to shrink," Jim Ritterbusch, president of Ritterbusch & Associates, said in a note. "We are maintaining a short-term neutral view, while at the same time suggesting an eventual downside price breakout that could carry nearby crude values toward the $70 area," he said.

Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--fell 17 points to $1.9377 a gallon, while October heating oil traded at $2.0870, 53 points higher.

ICE gasoil for September changed hands at $660.50 a metric ton, unchanged from Wednesday's settlement.

GLOBAL MARKETS: European Stocks Expected To Open Lower

LONDON (Dow Jones)--European stocks are expected to open lower Thursday, after Wall Street's gains were pared late in the day Wednesday and fresh concerns surfaced about the weakness of the global economy.

The Federal Reserve's Beige Book, released Wednesday, provided evidence that U.S. economic growth is tapering off, although stocks managed to close higher overall.

"The latest Beige Book clearly highlights the softer pace of the recovery," said Yelena Shulyatyeva, economist at BNP Paribas.

"Overall, the Beige Book indicated that the economy is recovering; however, at a very modest pace. While some sectors of the economy continue growing moderately, others, such as housing and bank lending, continue to face significant headwinds."

Ben Potter, market strategist at IG Markets, called London's FTSE 100 index to start down 14 points, or 0.3%, at 5416, Frankfurt's DAX down 27 points, or 0.4%, at 6137 and Paris's CAC-40 down 15, or 0.4%, at 3662.

However, Potter said any negative sentiment could be short-lived, particularly if the main Asian bourses finish with their bullish mood intact.

Asian stocks markets were mostly higher Thursday, although Chinese banks and property developers fell on persistent concerns that Beijing would roll out further tightening measures.

Japan's Nikkei Stock Average was up 0.8% and Australia's S&P/ASX 200 was 1.0% higher. South Korea's Kospi Composite was up 0.2% and Hong Kong's Hang Seng Index gained 0.6%. But China's Shanghai Composite Index fell 1.1%.

U.S. stocks rose Wednesday, with JPMorgan Chase, Alcoa and Boeing among the leaders. The Dow Jones Industrial Average rose 0.5% to 10,387.01, its fifth gain in six sessions. The Nasdaq Composite added 0.9% to 2228.87 and the Standard & Poor's 500 index gained 0.6% to 1098.87, with its financial and industrial sectors leading to the upside.

The gains came as stocks recovered some of the ground lost in Tuesday's slump. They remain well in the black for the month following better-than-expecting readings on the labor market and manufacturing last week.

There was little additional economic data driving the market Wednesday, although the Beige Book report from the U.S. central bank showed the U.S. economic recovery has continued, albeit "with widespread signs of a deceleration compared with preceding periods." Meanwhile, President Obama unveiled a mix of business tax cuts and infrastructure programs to boost the economy.

In the European foreign exchanges, the euro was a little weaker and the yen a tad firmer Thursday ahead of the weekly U.S. jobless claims data due later in the session. The median forecast in a Dow Jones poll of economists put claims at 470,000 for the week ending Sept. 4, barely changed from 472,000 the previous week.

By 0630 GMT, the euro was trading at $1.2686, down from $1.2721 late in New York trading Wednesday. The dollar bought Y83.54, down from Y83.88.

Spot gold was at $1255.15 per troy ounce, unchanged from New York. October Nymex crude oil futures were up nine cents at $74.76 per barrel. December bunds were up 0.14 at 131.39.

On the economic agenda, U.K. trade data are due at 0830 GMT and the Bank of England rate announcement is at 1100 GMT. The rate is expected to be held at its historical low of 0.5% again. U.S trade and the initial jobless claims data are due at 1230 GMT.

GS Fined $30.9 million By FSA

Goldman Sachs (NYSE: GS) has been fined £20 million ($30.9 million) by the Financial Services Authority (FSA), following an investigation into the US investment bank’s international business.

GS failed to tell the UK watchdog that one of its staff members in the UK was facing fraud charges by the Securities and Exchange Commission in New York. Goldman Sachs has admitted to the mistake and has agreed to pay the fine, which represents among the highest fines levied by the UK regulator.

The FSA began an investigation into GS in April after the SEC charged Goldman with civil fraud for misleading investors in a mortgage-backed security known as Abacus.

S.Korea freezes key interest rate

SEOUL — South Korea's central bank on Thursday unexpectedly left its key interest rate unchanged due to growing uncertainty about the strength of the global economic recovery.

Contrary to market predictions, Bank of Korea governor Kim Choong-Soo and fellow policymakers froze the benchmark seven-day repo rate for September at 2.25 percent.

In July the bank had raised the rate for the first time since the start of the world downturn, increasing it to 2.25 percent from a record low of two percent to forestall inflationary pressure.

"The Korean economy is expected to continue its solid growth, aided by robust exports and recovery in consumption and facility investment, but the possible economic slowdown in major economies and the eurozone debt crisis will act as downside risks to growth," the bank said in a statement.

It said it would "take into account overall financial and economic conditions at home and abroad" in future policy decisions.

Kim told reporters the current rate was not "desirable", suggesting a possible tightening to come. But without mentioning a figure, he said it might take some time for the rate to return to a "neutral level" given the uncertainty over the economic recovery.

The International Monetary Fund last week said a more neutral rate for South Korea would be around four percent. It called for a "carefully calibrated" exit from supportive policies.

Asia's fourth largest economy has rebounded strongly from the slowdown. The IMF upgraded its 2010 growth forecast to 6.1 percent from 5.75 percent, while the central bank is predicting 5.9 percent.

But the finance ministry Tuesday struck a cautionary note about the export-driven economy, saying it faced greater downside risks.

It highlighted economic uncertainties overseas and possible fluctuations in raw material prices.

HP Targets Small Business With Phones, Wi-Fi

HP expanded its IP phone and wireless LAN offerings for small and medium-size businesses (SMBs) on Wednesday as part of a broad set of product introductions for those customers.

The company's primary aims with the array of new SMB products, which includes a "microServer" and extends to storage-area networks, are to simplify IT and lower costs for small businesses while increasing their productivity. Wireless LANs have drawn increasing attention as relatively easy networks to deploy and maintain in lieu of wired Ethernet for every employee's workspace. IP (Internet Protocol) phones are advancing into many enterprises and offer the possibility of simplifying communications into one network that carries both voice and data.

On Wednesday, HP brought high-speed, dual-band IEEE 802.11n Wi-Fi technology to SMBs with the HP V-M200 802.11n Wi-Fi Access Point. The V-M200 can operate in the 2.4GHz and 5GHz radio bands at the same time and allows 64 simultaneous users on the wireless LAN. The access point can be managed via a Web browser interface. An access point can present four different SSIDs (Service Set Identifiers) for different groups of users, as well as support four virtual LANs for security between workgroups. Administrators can prioritize traffic from specific wireless communities, according to HP.

The V-M200 access point is available now worldwide and priced starting at US$219, depending on the configuration chosen.

HP also upgraded its IP desk phones with the HP 350x Series IP Phones, designed for organizations of all sizes. Most of the new phone models come with wideband audio technology that can take advantage of the high capacity of Ethernet LANs to deliver higher audio quality than is possible on traditional circuit-switched phones. All but one model has a Gigabit Ethernet port, and the phones can be powered via Ethernet using the IEEE 802.3af standard. The units come with a power-saving mode that can cut energy consumption by 50 percent from the level at peak usage, according to HP.

The new phones work with HP VCX IP Communications servers or servers from other vendors, according to the company. A server at a remote facility can be backed up with one at the central site to maintain reliable communication. IT administrators can deploy and manage the 350x Series phones from a Web browser.

The 350x Series phones are available now in the U.S., Canada, Latin America, Japan and the Asia-Pacific region. The phones are priced starting at $119.

Lenovo ThinkCentre M90p: Bite-Size Business Machine

The Lenovo ThinkCentre M90p is a superslim addition to a home-office or work environment. If size is all that matters in your quest for a new desktop rig, the M90p offers the best performance among systems with a slender physique. However, some competing desktops that are available for less than this PC's $850 price tag (as of August 31, 2010) offer better loadouts and more features.

You might not believe it due to the machine's compact size, but the M90p delivers some of the fastest performance you can find within the business PC (or even mainstream desktop) category. Nestled within this tiny warrior is a 3.33GHz Intel Core i5-660 processor, 3GB of DDR3 memory, and a 500GB hard drive.

The M90p cruised to an eye-opening score of 129 on our WorldBench 6 series of tests--but a number of lower-priced systems, including the $699 Acer Veriton X498G and the $560 Gateway SX2840-01, came within range of the M90p's performance. Although the M90p may be fast, it lacks the superior price-for-performance ratio of its peers. Its gaming performance was par for the course in the category, too, as the M90p failed to produce playable frame rates on our Unreal Tournament 3 benchmark (at 2560 by 2100 resolution and high quality).

Given the M90p's slim size, the interior provides little to talk about. To Lenovo's credit, the case unfolds easily for quick access to the desktop's guts. But it offers no upgradability whatsoever--no free hard-drive bays, no PCI slots, no 5.25-inch bays, zilch. Swapping out the included DVD burner or 500GB hard drive is a fairly simple process, given their location and screwless accessibility on one half of the unfolded case.

Unfortunately, the compactness of the M90p truly proves to be its undoing in regards to the connections it offers--or rather, doesn't offer. The front of the system houses only two USB ports. The rear triples that to six USB ports and throws in a gigabit ethernet port, a VGA connection, and a DisplayPort connection. Really? DisplayPort? We can't fault Lenovo for future-proofing, but perhaps a more widely used connector would have been a stronger choice. As it stands, you're stuck with a lower-quality signal to your display if your monitor doesn't support DisplayPort and you have no DVI-conversion cable.

Lenovo throws a keyboard into the mix that appears to be bigger than the M90p itself. Regardless, it's strictly utilitarian save for its black, gray, and purple coloration; it supplies no additional buttons for controlling your system's volume or launching applications. The included mouse is as plain as a mouse could be.

The M90p offers Lenovo's ThinkVantage Technology software, which performs automated software and hardware-driver updates and manages data backup. You'll also find tools that present detailed system information, monitoring system changes to simplify troubleshooting equipment problems. This software is of most value to businesses that need a streamlined maintenance process.

Svelte and capable, the Lenovo ThinkCentre M90p combines useful software and speedy performance with a minuscule footprint. But unless space is a premium in your home office or workplace, you have some alternatives to consider that could save you a few hundred dollars. Acer's Veriton X498G is the current standout, offering similar performance and business-tailored software for a few hundred dollars less. If you aren't sold on bundled software packages and you would rather rely on your own tools, desktops in the budget PC category--the Gateway SX2840-01, for instance--provide comparable performance for less, though you'd be sacrificing business-friendly functionality.

Grandmother finds business idea in her purse

Anita Crook, the designer of Pouchee - a handbag organizer insert - is pictured in this undated handout photo.

Credit: Reuters/handout

CHICAGO | Wed Sep 8, 2010 1:18pm EDT

CHICAGO (Reuters) - Frustrated that she couldn't find her lipstick, keys and other essentials in a stylish new handbag given to her as a gift by her son, Anita Crook came up with a solution. In 2005 she designed the Pouchee - a pocketbook organizer that Crook expects will fetch her close to $2 million in revenues this year.

"I couldn't find any way to organize it and I thought, well, you know, maybe I could design something," said Crook, 63, who began the company out of her home in Greenville, South Carolina with $10,000 from her savings and the conviction she was filling a need. "I don't look at myself so much as an entrepreneur as I do a problem solver."

Pouchee now offers some 25 different portable organizers under the same name, including those made of faux leather, cotton and custom fabrics. Women can't seem to get enough of the product, which is available in two sizes and has spots for cell phones, credit cards, makeup and keys, as well as metal loops at the top that make it easy to transport from purse to diaper bag or gym tote.

"If women feel like they've got control over at least one area in their life, if they can get their handbags organized, I think it really makes them feel good," said Crook, who said Pouchee helps meet the need for order in a hectic world.

Crook, who studied art in college, turned to a friend's daughter to sew the initial sample for the organizers based on a prototype she designed; before long, she had made contact with a factory representative in New Hampshire who had connections in Asia.

"Next thing you know, I've got 2,000 Pouchees coming in from China, and I thought, ‘What am I going to do with them?'" she recalled. "I first started going door-to-door with Pouchees in my car. I was a nervous wreck."

It wasn't' long, however, before Crook discovered her instinct was correct.

Jill Griffin, owner of It's Personal Monogramming and Engraving, a gift shop in Columbia, South Carolina, was one of her first customers, betting on an initial 12-piece order; the organizers jumped off her shelves within the first hour. She quickly phoned Crook to have additional Pouchees delivered.

"It's a constant order for us," said Griffin, herself a Pouchee user. "Women love them and they buy them and give them as gifts."

SELECTIVE STRATEGY

Crook now counts some 1,500 gift shops in the U.S. and Canada as customers, and she has been gaining traction in gift-friendly vacation spots like the Bahamas. The majority of her business is wholesale, although she also sells through her website (pouchee.com). Crook is fiercely loyal to her retailers, offering them a guarantee she will never sell to more than one store in the same zip code. And despite repeated requests from retail chains, you won't find Pouchee at Big Box stores.

"At this point in my business it would be a serious mistake," said Crook. "(Boutiques) don't want to carry the same thing Target is carrying."

The selective approach has paid off. Even during the recession, Pouchee's sales continued to rise about 45 percent each year. Crook has managed the growth without taking on any debt, largely relying on word-of-mouth referrals to promote her product.

One industry watcher said part of the increase is tied to a broader trend: women are buying more handbags than they used to.

"Only a few years ago, women still had the one-bag-at-a-time habit," said Kelly Cook, who blogs about purses at bagsnob.com. "Now that you're switching bags all the time, you are having to deal with reorganizing every time you switch, and that's a big hassle."

Crook has kept her inspiration close to home, with ideas for new products largely coming from personal experience. Tangled jewelry on a trip to Hungary for her son's wedding led to the introduction of a jewelry traveler. Her husband's need to collect sunglasses, loose change and other items in his SUV prompted a console caddy.

Like many entrepreneurs, Crook has learned much about running a small business on the fly and concedes there have been some costly bumps in the road. Last fall she miscalculated inventory needs and had to air ship extra Pouchees from China in order to meet demand for the Christmas holidays, a move that bit into margins.

"We've been known to run out," said Crook, a grandmother of three who runs the company out of 1,200-square-foot warehouse and offices with a staff of four. "I'm going to do what I need to do to get Pouchees into stores."

Simplifying Airline Fees for Business Travelers

Airlines and consumers are in a constant battle these days. As the companies add more fees, travelers get annoyed and try to dodge them. But another good column by Joe Sharkey reveals an important wrinkle in the ongoing war. Firms are becoming frustrated by the lack of transparency and complexity of the new fees, as they budget their business travel. The airlines had better solve this problem fast. They should take a broad approach.

Here's Sharkey with the issue:

The Business Travel Coalition, a consulting group for corporate travel buyers, is releasing a survey on Tuesday showing that two-thirds of business travel purchasers often feel blindsided by fees at the airport, and say that fees make it difficult to budget. In a statement accompanying the survey, Paul Ruden, an executive with the American Society of Travel Agents, says that "comparing air travel costs without fee-transparency is like trying to read a book with half the pages torn out."

Why does this issue matter so much? Business travel has essentially been the savior of the airline industry. Without it, the airlines would be much worse-off. They can't afford to risk more firms forgoing the headaches associated with hidden air travel fees and opting for virtual meetings instead.

Sharkey says a few solutions have been suggested. The coalition calls for Congress to force better transparency. Another group, Association of Corporate Travel Executives likes keeping fees separate, but also wants more clarity. A la carte pricing allows firms to better control their travel costs, says the group.

What the airline industry needs is a robust solution. That would require two products. The first would provide a la carte pricing, but in an easy to compare format, so total cost can be better anticipated. For example, imagine if, when you search for flights on an airline website, it had a series of checkboxes including:

• Taxes
• Meal/Snack
• Carry-on Bag (less than 50 lbs.)
• Checked Bag
• Priority Seating
• Itinerary Change

And so on. If those looking to book travel anticipate any of those costs, then it can provide two prices. The first would be the base fare, and the other would consist of a range for the minimum and maximum price if those potential fees were added. Of course, it would also need a breakdown of those fees which were summed up to get that range, so the borrower could add or subtract them.

Of course, such a change would take some technology, but surely there are computer programmers who could quite easily develop a system like this. All you would need is the fee information from the airlines, which could then be easily added onto their base fares. If a savvy web designer wants to make some money, I would venture to say a website called "AirlineFeeDemystifier.com" that does precisely this would be quite popular. This would provide the transparency so sought after, and also simplify traveling for the businesses that want a broader price comparisons. Everybody wins, except for perhaps any airlines that want their fees to remain hidden. And they should lose.

Second, airlines should think about offering a "no-fee" ticket option. The purpose here would be to provide travelers who don't mind paying a little more money for a hassle-free experience. The ticket price for this option would include any imaginable fee, including over-sized baggage, premium coach seating and boarding, guaranteed carry-on, a checked bag, ticket change fee, etc. This would be a win-win situation. It would probably be common that the fees the consumer would have paid would have been less than the ticket price, but the relative ease of travel will make that premium worth it for some consumers.

This two-prong approach should satisfy pretty much everyone. You hate dealing with fees? Just buy a no-fee ticket. You want more power over pricing? Utilize the fee demystifying query next time you're looking for a flight. Airlines are known to be some of the best price discriminators out there, so it's surprising they're taking so long to get their fee pricing strategy right so to make them even more profitable.

Mixed Reaction To Obama Business Tax Breaks Plan

President Obama is calling for a new tax break for businesses that he says will help boost the economy.

Speaking near Cleveland on Wednesday, Obama said all U.S. companies should be allowed to write-off all the investments they make through 2011.

"This will help small businesses upgrade their plants and equipment, and will encourage large corporations to get off the sidelines and start putting their profits to work in places like Cleveland and Toledo and Dayton," he said.

But some economists and business owners are skeptical. Some think the proposal will be another cash-for-clunkers-style tax break that probably won't have much of a long-term impact.

On the factory floor at Metal Works in Londonderry, N.H., you can hear the economy trying to chug along. Machines are stamping out metal parts for everything from solar panels to military computers to medical devices.

As the economy went into recession, Fred Pierce, the owner and CEO, had to layoff about 100 employees — more than half his workforce. But he has started to hire people back over the past year. He definitely does not have a problem with this latest tax cut proposal from the Obama administration.

"We're always in favor of tax proposals that will help small businesses," he says. "So it's a good thing."

But even with business doing better this month, Pierce says the workload has been erratic. It's hard to have enough confidence to invest a lot of money right now or hire back more people even if that new tax break goes through.

"At the end of the day, we don't need more equipment right now, we need more customers," Pierce says.

Still, some businesses probably would buy some more equipment. When the government throws free money at people through a tax break, it can definitely work.

Last year, the Obama administration's cash for clunkers program to stimulate the auto industry enticed many people to buy cars; same thing with the First Time Homebuyer Tax Credit — people bought more houses. But in both cases, sales fell sharply after the tax break expired.

So that begs the question: Even if this tax credit did get some businesses to buy more equipment, would that really help economy in the long run?

"There is a risk, as there was with cash for clunkers, that they'll spend now, but won't spend later," says Nariman Behravesh, chief economist with the forecasting firm IHS Global Insight. "You're pulling spending forward and then there's always the payback later on as we're seeing now in housing, which did well for a while and then it dropped."

Behravesh is underwhelmed by the latest tax-cut proposal.

"We're very, very skeptical that this will have much effect on the economy or in terms of job creation," he says.

Other economists though think that the temporary stimulus did make a difference in the case of housing. They say it interrupted the free fall in the market, and things would have been much worse without it. Some are more enthusiastic about this latest business tax-break proposal.

"I think it could provide some real stimulus," says Glen Hubbard, an economist at Columbia University who previously serves as the top economic adviser to President George W. Bush.

Hubbard says tax incentives like this one can help get more business moving.

"You're using it to jump-start the economy," he says. "If the president wants to go this route, he has done the nation a favor by pivoting the discussion toward business investment and away from consumption."

Still, there's another big tax issue facing businesses. Those so-called Bush tax cuts due to expire at the end of the year.

Back at his factory, Pierce says if those do expire, that would raise taxes for many small businesses like his.

"It basically is going to raise our tax rate by 13 percent — so in a worldwide economy where we're competing with China and Mexico, we're going to be less competitive next year than we were this year.

"Our gross profit is going to decline by 13 percent — that's a much bigger deal."

So, Pierce feels like the government is offering him a tax break with one hand, but is about to raise his taxes sharply with the other.

Leak: HTC's New Android Targets Global Business Travelers

An upcoming Android-powered phone from HTC and Verizon will support both CDMA and GSM, according to documents leaked in the past few days by the Federal Communications Commission.

As a result, the HTC PD42100 will likely be what's known as a "world phone," since its support for both standards will effectively allow it to operate anywhere on the planet. Users of the new device will be able to tap the CDMA network in the United States, for example, yet they'll also be able to piggyback off of regional and national GSM carriers in other parts of the world.

Also supported by the device will be EV-DO Rev. A 3G, Wi-Fi (802.11 b/g/n/), and Bluetooth, according to the leaked documents. Taken together, such broad support could make the device an ideal one for business travelers.

Android 3.0?

Following a similar leak last month about what appears to be the same phone, the FCC documents also reveal a horizontal slider form factor combined with a full QWERTY keyboard.

With a 4-inch touch screen, the new, red handset looks to be a big one, and Verizon Wireless branding is visible. It also appears to feature a rear-facing camera with single-LED flash, a removable battery and microSD memory expansion capability.

Previous rumors have suggested that the device will feature a 1.2 GHz processor along with Android as the operating system. Which Android version will be used isn't clear, but given that the device isn't expected until early next year, Android 3.0, or "Gingerbread"--which is due in October-- doesn't seem out of the question.

Though it appears to have passed FCC testing, there's been no mention of pricing on the device so far.

International Roaming

HTC has already enjoyed considerable success with its Android-powered EVO 4G, Droid Incredible, Desire and Google-branded Nexus One.

Its alignment with Google's Android, in fact, helped the company achieve 33 percent year-over-year growth recently, including the second-quarter net profits of $269 million it reported in July.

With the new PD42100 device, however, the company seems to be focusing squarely on global business travelers. By using a device that can roam internationally, travelers would no longer need to rent a mobile phone in the countries they visit.

Research in Motion's enterprise-focused BlackBerry device also supports global roaming.

Android on Top

Android, however, is quickly gaining ground in the mobile operating system arena. The Linux-based platform grew by close to 20 percent over the past year, according to market researcher Quantcast, accounting for 25 percent of mobile Web consumption by the end of August.

Research in Motion's operating system, by contrast, fell by 1.6 percent in the past year, while Apple's iOS fell by 11.4 percent.

Analyst firm Piper Jaffray, in fact, expects Android to control more than half of the smartphone market within the next five years, leaving Apple's iPhone with between 20 percent and 30 percent.

Besides contributing to that growth, an Android-powered world phone could also further spur the Android Market, since developers could find a much broader reach for their applications. There are currently more than 100,000 apps in the Android Market.

Japanese Bond Futures Rise a Third Day on Yen, Falling Consumer Sentiment

Japanese bond futures rose for a third day as the yen’s climb to a 15-year high threatened the outlook for exporters’ earnings.

Benchmark 10-year bonds extended this week’s gain after a government report showed consumer confidence declined for a second month. The government will sell 2.4 trillion yen ($29 billion) in five-year notes tomorrow.

“The yen’s appreciation is significant,” said Akira Terabayashi, a Tokyo-based researcher at Norinchukin Research Institute Co. “Ten-year yields are likely to remain in the 1.1 percent range. But it’ll be a different story if the yen continues to strengthen.”

The yield on the 10-year bond fell one basis point to 1.12 percent as of 3:08 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The 1 percent security due September 2020 rose 0.089 yen to 98.921. The yield has retreated 2.5 basis points this week.

Ten-year bond futures for December delivery added 0.08 to 141.86 at the 3 p.m. close of the Tokyo Stock Exchange.

The Japanese currency traded at 83.65 per dollar after appreciating to 83.35 yesterday, a level unseen since May 1995. A stronger yen reduces the value of overseas sales at Japanese companies when converted into their local currency.

Japan’s government said it will seek discussions with China over the nation’s record purchases of Japanese bonds.

Japan is closely watching the transactions and will seek to maintain close contact with Chinese authorities on the issue, Vice Finance Minister Naoki Minezaki told lawmakers in Tokyo. Finance Minister Yoshihiko Noda suggested at the same hearing that it’s inappropriate for China to buy Japan’s bonds without a reciprocal ability for Japanese to invest in China’s market.