(Reuters) – Federal prosecutors investigated Galleon Group hedge fund founder Raj Rajaratnam on suspicions of insider trading more than a decade before he was charged with securities fraud, the Wall Street Journal reported, citing legal filings.

However, the prosecutors were unable to prove their suspicions, the paper said.

The investigation stemmed from suspicions that arose in the 1990s within chip maker Intel Corp (INTC.O) that Rajaratnam was receiving tips from an Intel insider.

Intel could not immediately be reached for comment by Reuters outside regular U low fee payday advance.S. business hours.

The Sri Lankan-born billionaire was arrested on October 16 and accused by prosecutors of generating millions of dollars of illegal profits in the largest U.S. hedge fund insider trading case on record.

Rajaratnam has denied the charges.

(Reporting by Santosh Nadgir in Bangalore; Editing by Muralikumar Anantharaman)

Prosecutors investigated Rajaratnam a decade ago: report

TOKYO/AMSTERDAM (Reuters) – Japan&&9;s Canon (7751.T) plans to buy Dutch copier and printer maker Oce (OCEN.AS) for 730 million euros (&&6;1.09 billion), challenging rivals Ricoh (7752.T) and Xerox (XRX.N) in a hunt for growth during the sector downturn.

Copier and digital camera maker Canon and Oce said in a joint statement Monday that Canon intends to offer 8.60 euros per share, or 730 million euros, for Oce&&9;s outstanding shares. The offer represents a premium of 70 percent to Oce&&9;s Friday close.

Canon&&9;s offer follows little over a year after Japan&&9;s Ricoh, the world&&9;s largest copier maker, bought U.S. office equipment distributor Ikon Office Solutions, a deal which hit Canon&&9;s U.S. operations hard as Canon machines had represented 60 percent of the products Ikon handled before the acquisition.

Canon, Oce and rivals have suffered from the economic slump, which forced companies to cut spending, including costs on copying and printing.

Oce, which was loss-making in the past two quarters, has been cutting costs and jobs and has not paid a final 2008 dividend, while Canon and Ricoh reported sharp falls in their quarterly profit last month.

"The deterioration of the economic market circumstances has influenced the performance of the industry but it was not the initiator for the strategic review process which, after thorough and careful evaluation, led to this proposal of joining forces with Canon," Oce CEO Rokus van Iperen told reporters.

Canon and Oce products are mutually supplementary, with the Japanese company having strength in regular office machines and mid- to lower-end production printers, while Oce excels in high-end production printers and advertisement-use large-sized printers, the Tokyo-based company said.

Production printers, or digital commercial printers, are used to print such documents as product manuals and direct mail quickly and in large volume, and are a fast-growing segment of the global printer market.

Oce shares were up 68.5 percent at 8.53 euros by 1119 GMT, after earlier reaching their highest level since June last year.

Including debt and other obligations, the deal values Oce -- which competes with Xerox (XRX payday loans.N) and Konica Minolta Holdings (4902.T) -- at about 1.5 billion euros (&&6;2.2 billion), Van Iperen said.

HP, KYOCERA POSSIBLE COUNTERBIDDERS

Analysts said the deal was good for Oce shareholders, as it solved most or all of the problems the company faced due to the drop in demand. They were divided about a possible rival offer.

SNS Securities said in a note Hewlett-Packard (HPQ.N) and Kyocera (6971.T) had sufficient financing options for a counter bid, while Ricoh and Konica Minolta currently had high debt levels and relatively low earnings generation.

Petercam analyst Eric de Graaf, however, said it was unlikely that another bidder would emerge because of the bid price and commitment of some shareholders and Oce&&9;s boards.

Preference share holders Ducatus, ASR and ING -- which together hold 19 percent of Oce&&9;s share capital -- agreed to sell their interests to Canon, while Oce shareholder Bestinver Gestion S.A. has agreed to tender its 9.5 percent stake.

Oce&&9;s management and supervisory boards support and will recommend the intended offer, Oce and Canon said.

Canon, the world&&9;s largest digital camera maker, is Japan&&9;s 6th-most valuable company with market capitalization totaling &&6;50 billion. Its printers and copiers accounted for 65 percent of total revenues in 2008.

Analysts said the deal is positive for Canon, while potentially negative for rival Japanese copier and printer maker Konica Minolta, which is in a business alliance with Oce.

"Konica Minolta procures high-end production printing machines from Oce, while Oce procures lower-end machines from Konica Minolta," Mizuho Securities analyst Ryosuke Katsura said.

"(The) chances are Canon machines will replace Konica Minolta gear in this relationship," he said.

Shares in Canon closed down 1.5 percent at 3,370 yen ahead of the announcement, underperforming the benchmark Nikkei average (.N225), which gained 0.2 percent.

(&&6;1=89.60 Yen)

(&&6;1=.6685 euros)

(Editing by Joseph Radford, Mike Nesbit and Simon Jessop)

Canon seeks printer power with $1.1 billion Oce bid

WASHINGTON, Oct. 16 (Xinhua) -- The U.S. federal deficit of the 2009 fiscal year reached a record high of 1.42 trillion U.S. dollars, the Treasury Department announced Friday.

The U.S. government imbalance for the fiscal year ending Sept. 30, 2009, more than tripled last year's record. As a portion of the economy, the deficit accounted about 10 percent, the highest since World War II.

For fiscal year 2009, the government collected 2.1 trillion dollars in revenues, a 16.6 percent drop from 2008, while government spending jumped to 3.52 trillion dollars, up 18.2 percent over 2008.

The Treasury Department projected that the deficits would total 9.1 trillion dollars over the next decade unless corrective action is taken.

Treasury Secretary Tim Geithner pointed to the skyrocketing federal debt as a result of the government's actions to tackle the worst economic recession since the Great Depression of the 1930s.

The Obama Administration launched a 787-billion-dollar stimulus bill to boost the economy and another 700 billion dollars to stabilize the financial system since the president took office at the beginning of the year.

Besides, Geithner said, the debt was also a heritage of the George W. Bush period.

The 2009 deficit was largely the product of the spending and tax policies inherited from the previous Administration, according to the department.

"This year's deficit is lower than we had projected earlier this year, in part because we are managing to repair the financial system at a lower cost to taxpayers," Geithner said.

"It was critical that we acted to bring the economy back from the brink earlier this year," White House budget director Peter Orszag said in a statement. "The president recognizes that we need to put the nation back on a fiscally sustainable path."

President Barack Obama has vowed to reduce the deficit once the economy returns to growth and the unemployment rate starts falling.

But critics said the government lacks of the political will to take necessary steps to balance its budget, such as raise taxes and cut spending short term personal loans.

The U.S. federal deficit is unsustainable if the government does not impose fiscal discipline, observed William Gale, senior fellow of the Washington think tank Brookings Institute.

Other economists believe that the debt and unemployment are key problems that will test the future of the Obama administration. New York-Wall Street rallies on Federal Reserve??s positive predictive of U.S. economy

U.S. stock rallied on after the Federal Reserve's positive predictive of a more stable economy.

The Federal Reserve said in the latest statement, which followed its decision to leave interest rates unchanged at record low levels of 0.25 percent, that economic activity is "leveling out." Full story U.S. federal deficit hits $1.38 trln

WASHINGTON, Sept. 11 (Xinhua) -- The U.S. federal deficit has topped 1.38 trillion dollars with one month left in this fiscal year, according to Treasury Department statistics released on Friday.

The Department reported that the U.S. federal government spent 111.4 billion dollars more than it made in August, pushing the red ink so far in the current fiscal year to a new record. Full story U.S. Federal Reserve launches new credit card rules

WASHINGTON, Sept. 29 (Xinhua) -- The U.S. Federal Reserve (Fed) Board on Tuesday proposed new rules to protect consumers who use credit cards from a number of potentially costly practices.

"This proposal is another step forward in the Federal Reserve's efforts to ensure that consumers who rely on credit cards are treated fairly," said Federal Reserve Governor Elizabeth A. Duke. "The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts." Ful story
Special Report: Global Financial Crisis

U.S. federal deficit hits record high of $1.4 trln

NEW YORK (Reuters) – U.S. stock index futures rose more than 1 percent on Wednesday following forecast-beating results from Intel Corp (INTC.O) and ahead of earnings from JPMorgan Chase & Co (JPM.N).

After the bell on Tuesday, Intel, the world&&9;s largest chipmaker, posted a quarterly outlook and results that were better than expected, boosting optimism over a technology sector recovery. Its shares were almost 5 percent higher in premarket trade.

JPMorgan shares climbed 1.8 percent before the bell shortly before it was due to report results. Later this week, other major banks will also post results, including Citigroup (C.N), Bank of America (BAC.N) and Goldman Sachs (GS.N).

S&P 500 futures rose 13.70 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 98 points, and Nasdaq futures rose 21.25 points.

Oil surged for a fifth straight day on Wednesday to a 2009 high above &&6;75 a barrel, boosted by a weak dollar and surprisingly strong China trade data that underscored a recovery in the world&&9;s second-largest oil user payday loan.

The dollar tumbled to a 14-month low versus the euro and a currency basket, hurt by persistent expectations for low U.S. interest rates as well as investor appetite for commodity currencies.

Overseas, Japan&&9;s Nikkei average dipped 0.2 percent, hit by profit-taking after five days of gains and with exporters pressured by a stronger yen. European stocks (.FTEU3) rose 1.9 percent in morning trade, led by tech and commodity-related shares.

On the macroeconomic front, investors were bracing for U.S. monthly retail sales, due at 8.30 a.m. ET. Later in the session, the focus will shift to the Federal Reserve&&9;s minutes from its meeting of September 22-23, to be released at 2 p.m. ET.

U.S. stocks retreated on Tuesday after disappointing sales from Johnson & Johnson (JNJ.N) rattled investors and raised worries about the strength of company earnings, snapping the S&P 500&&9;s six-day winning streak.

(Reporting by Edward Krudy, editing by W Simon)

Stock futures sharply higher after Intel Q3; JPMorgan eyed

A day after the Obama administration proclaimed significant progress in its effort to spare troubled homeowners from foreclosure, an oversight panel on Friday sharply criticized the program and declared it would leave millions of Americans vulnerable to losing their homes.

In a report mild in language but pointed in substance, the Congressional Oversight Panel &<51; a watchdog created last year to keep tabs on taxpayer bailout funds &<51; said the administration&S217;s program would, &S220;in the best case,&S221; prevent &S220;fewer than half of the predicted foreclosures.&S221;

The report rebuked the administration for failing to shape a program that addressed the most significant engines of the foreclosure crisis &<51; soaring joblessness and exotic mortgages with low introductory interest rates that give way to sharply higher payments over the next three years. Many of those mortgages are too large to qualify for modification under the administration&S217;s plan. People who lose their jobs often lack enough income to qualify for relief.

The administration&S217;s plan appears &S220;targeted at the housing crisis as it existed six months ago, rather than as it exists now,&S221; asserted the oversight panel in its report. &S220;The panel urges Treasury to reconsider the scope, scalability and permanence of the programs designed to minimize the economic impact of foreclosures and consider whether new programs or program enhancements could be adopted.&S221;

In a telephone briefing with reporters, the oversight panel&S217;s chairwoman, Elizabeth Warren, said the administration&S217;s housing program was so limited that it was unlikely to keep pace with the growing wave of foreclosures.

&S220;Even when Treasury&S217;s programs are running at full speed, foreclosures are estimated to outpace modifications by about two to one,&S221; Ms. Warren said. &S220;It simply isn&S217;t clear that the programs in place will do enough to tame the crisis and have a significant impact on the broader economy.&S221;

The Treasury acknowledged that its anti-foreclosure program was limited, with the effect of rising unemployment not fully checked. But the department said other relief efforts, like extended jobless benefits and continued health insurance for people who lose work, were better suited to alleviating economic distress than the housing program.

&S220;In developing this program, it was critical that we address challenges that could be solved quickly with the tools available to us to ensure the most effective use of taxpayer money,&S221; said Meg Reilly, a Treasury spokeswoman.

The administration&S217;s decision to limit the cost of its one program aimed at helping homeowners could become more contentious as the foreclosure crisis grinds on. Populist anger has flashed over the rescues of major institutions including Citigroup and the American International Group &<51; the most prominent components of a $700 billion taxpayer-financed bailout &<51; while homeowners struggle.

&S220;These Treasury people are all from Wall Street, and they&S217;re not doing anything but protecting Wall Street,&S221; said Melissa A. Huelsman, a Seattle lawyer who represents homeowners fighting foreclosure. &S220;They don&S217;t care in the least about protecting homeowners.&S221;

When the Obama administration began its $75 billion Making Home Affordable program in March, it said the plan would spare as many as four million households from foreclosure. On Thursday, Treasury announced that 500,000 homeowners had since had their payments lowered on a trial basis, celebrating this as a milestone.

But the report from the oversight panel directly challenged the administration&S217;s characterizations.

Most prominently, the panel had grave uncertainty about whether large numbers of the trial loan modifications &<51; which typically run for three months &<51; would successfully be converted to permanent terms easy fast payday loans.

As of the beginning of September, only 1.26 percent of trial modifications that had made it through the three-month trial period had become permanent, the report found. Of course, very few of those trial loans had reached their three-month expiration because the program only recently began processing large numbers of applications. As of Sept. 1, the Obama plan had produced 1,711 permanent loan modifications.

Some homeowners complain they have received trial modifications only to have them canceled for what seem dubious reasons &<51; checks sent but supposedly never received, documents once in the file but suddenly missing.

&S220;We&S217;re on the phone arguing with mortgage companies every day,&S221; said Dan Harris, chief executive of Home Retention Group, a company that negotiates with mortgage companies for loan modifications on behalf of homeowners, adding that trial modifications for four of his clients had been canceled over the last month. &S220;It&S217;s incredible.&S221;

Major mortgage companies say they have significantly increased staffing to better manage the flow of paperwork, while notifying customers of the need to send in fresh documents to make their trial modifications permanent. But the companies offer no assurances that a large number of trial modifications will indeed become permanent.

&S220;The process is too new,&S221; said Dan Frahm, a spokesman for Bank of America. &S220;We don&S217;t know the number.&S221; He estimated that 15 percent to half of all trial modifications would fail to become permanent.

The Treasury expressed hopes that a newly streamlined process that allowed borrowers to submit documents to mortgage companies more easily would help make large numbers of trial modifications permanent.

&S220;We are intent on working with servicers to ensure that eligible borrowers receive permanent modifications,&S221; said the department spokesperson, Ms. Reilly.

The oversight panel&S217;s report expressed chagrin that the vast majority of loan modifications did not lower loan balances, leaving many homeowners still &S220;under water,&S221; or owing more than their homes were worth.

This tends to lower all property values, the report noted, because underwater borrowers have less incentive to care for their homes, and greater reason to stop making payments and default.

An Obama administration official who spoke on condition of anonymity, citing a lack of authorization to speak publicly, said the Treasury would have preferred that the program focused more on writing down principal balances but ultimately opted against it because &S220;that would make it significantly more expensive to the taxpayer.&S221;

In Wauwatosa, Wis., Theresa Lutz, 47, has been seeking to lower the payments on her home for several months. She is a graphic designer whose working hours were cut last summer. In September, her employer cut her salary by 6 percent. That has made it difficult for her to pay her monthly mortgage of $1,307.

As Ms. Lutz described it, her mortgage company, Wells Fargo, initially agreed to lower her payments. But then, last week, the bank informed her that she would have to come up with a fresh $3,000 to compensate the investor who owned her loan.

A Wells Fargo spokesman, Kevin Waetke, said that information had been conveyed &S220;in error&S221; and &S220;the customer has been notified that payment does not need to be made.&S221;

As Ms. Lutz struggled to clarify her agreement with Wells Fargo, she expressed dismay at news of the oversight panel&S217;s report, and its finding that not enough help seemed to be on the way.

&S220;It looks to me like Wall Street is too invested in our government,&S221; she said. &S220;Big business is winning out over the average person.&S221;

Panel Says Obama Plan Won’t Slow Foreclosures

RIO DE JANEIRO &<51; Environmental groups hailed a decision this week by four of the world&S217;s largest meat producers to ban the purchase of cattle from newly deforested areas of Brazil&S217;s Amazon rain forest.

At a conference on Monday in S&>27;o Paulo organized by Greenpeace, the four cattle companies &<51; Bertin, JBS-Friboi, Marfrig and Minerva &<51; agreed to support Greenpeace&S217;s call for an end to the deforestation.

Brazil has the world&S217;s largest cattle herd and is the world&S217;s largest beef exporter, but it is also the fourth largest producer of greenhouse gas emissions. Destruction of tropical forests around the world is estimated to be responsible for about 20 percent of global greenhouse gas emissions.

Greenpeace contends that the cattle industry in the Amazon is the biggest driver of global deforestation. But the Brazilian government, while pushing ambitious goals to slow deforestation in the Amazon, is also a major financer and shareholder in global beef and leather processors that profit from cattle raised in areas of the Amazon that have been destroyed, often illegally, according to Greenpeace.

The four cattle producers agreed on Monday to monitor their supply chains and set clear targets for the registration of farms that supply cattle, both directly and indirectly. They also said they would devise measures to end the purchase of cattle from indigenous and protected areas, and from farms that use slave labor.

Environmental groups called the decision a major step forward for climate protection.

&S220;This agreement shows that in today&S217;s world someone that wants to be a global player cannot be associated with deforestation and with slave labor,&S221; said Marcelo Furtado, executive director of Greenpeace in Brazil fast payday loans.

The agreement came after the release in June of a report by Greenpeace, &S220;Slaughtering the Amazon,&S221; which detailed the link between forest destruction and the expansion of cattle ranching in the Amazon.

The report led some multinational companies, including shoe manufacturers like Adidas, Nike and Timberland, to pledge to cancel contracts unless they received guarantees that their products were not associated with cattle or slave labor in the Amazon. Beef customers like McDonald&S217;s and Wal-Mart also pressed producers to change their practices in the Amazon, Mr. Furtado said.

Blairo Maggi, the governor of Mato Grosso, the Brazilian state with the highest rate of deforestation in the Amazon and the country&S217;s largest cattle herd, said Monday that he would support efforts to protect the Amazon and provide high-resolution satellite imagery to help monitor the region.

Mr. Furtado said that the Brazilian Association of Supermarkets had also signed on to the agreement, further ensuring compliance by the meat producers.

Conspicuously missing from Monday&S217;s announcement was the government of President Luiz In&>25;cio Lula da Silva of Brazil. The government is struggling to reconcile its social and development goals in the Amazon with its desire to be a major player in global climate change talks.

Giants in Cattle Industry Agree to Help Fight Deforestation

Hot News: Neiman Marcus holiday catalog nods to recession

NEW YORK (Reuters) – The Dow and S&P 500 suffered their worst one-day fall in three months on Thursday after economic reports fueled fears about the recovery&&9;s strength.

The pullback occurred a day after stocks ended the third quarter with strong gains, with the Dow and S&P each up 15 percent from the previous quarter.

Cyclical stocks, which are sensitive to the economy&&9;s cycles, were among the worst performers, including technology and bank shares. The KWB bank index (.BKX) dropped 5 percent while an index of semiconductors (.SOXX) fell 4.8 percent. Airlines also fell sharply, with an airline index (.XAL) down 8.3 percent.

The Institute for Supply Management&&9;s index of national factory activity declined in September from August&&9;s reading, and although the latest reading still indicated growth, it was sharply below economists&&9; forecast in a Reuters poll.

Data on jobless claims also was worse than expected.

"There was disappointment from the ISM this morning. It missed expectations," said Mike O&&9;Rourke, chief market strategist at BTIG in New York.

"With the last quarter ending, a lot of people were holding stuff up for window dressing and now you&&9;re seeing profit-taking," he added. "We&&9;ve had a tremendous run up."

Analysts said the news added to anxiety ahead of Friday&&9;s September jobs report from the government, the month&&9;s biggest data release.

The Dow Jones industrial average (.DJI) tumbled 203.00 points, or 2.09 percent, to end at 9,509.28. The Standard & Poor&&9;s 500 Index ( make quick cash.SPX) slid 27.23 points, or 2.58 percent, to 1,029.85. The Nasdaq Composite Index (.IXIC) lost 64.94 points, or 3.06 percent, to 2,057.48.

It was the third straight day of declines for stocks and the Nasday&&9;s worst fall since June 22, just before the market suffered a modest pullback.

All 30 Dow components finished in the red, with the Dow&&9;s biggest decliners including JPMorgan Chase & Co (JPM.N), down 5.6 percent at &&6;41.37, and Boeing Co (BA.N), down 3.8 percent at &&6;52.11.

Bank of America Corp (BAC.N) shares slipped 4.2 percent to &&6;16.21 after Chief Executive Ken Lewis said he was retiring after months of being dogged by a series of government investigations into the company&&9;s acquisition of Merrill Lynch. The company did not name a successor. The news was announced late on Wednesday.

Heavy equipment maker Caterpillar (CAT.N), down 3.7 percent at &&6;49.45, also ranked among the Dow&&9;s biggest decliners.

Among the Nasdaq&&9;s major losers were tech bellwethers Apple Inc (AAPL.O), down 2.4 percent at &&6;180.8599; Qualcomm Inc (QCOM.O), down 5.1 percent at &&6;42.70 and Microsoft (MSFT.O), down 3.3 percent at &&6;24.88.

The ISM&&9;s manufacturing reading fell to 52.6, below economists&&9; forecast of 54.0, and August&&9;s 52.9.

The S&P 500, however, is still up 52.2 percent from its 12-year closing low on March 9.

(Editing by Jan Paschal)

Wall Street marks worst day in 3 months as Q4 begins

PARIS &S212; The idea that France is a hotbed of worker militancy, hobbled by industrial action, is misplaced, according to Xavier Darcos, the country&S217;s labor minister.

Despite a recent string of escalating action by workers &S212; from strikes to so-called bossnappings, where employees took managers hostage, along with threats by workers to blow up plants &S212; the French are not particularly militant, he said during a wide-ranging interview.

&S220;There has been a significant &S216;deunionization,&S221;&S217; Mr. Darcos said. &S220;The labor unions have changed.&S221;

Comparative data from the U.S. Bureau of Labor Statistics show that union membership in France, at about 8 percent of salaried workers in 2003, is well below that of other economic powers, including Germany, where 23 percent of such workers are unionized, and the United States, where 12 percent are.

Further, France has been less affected by industrial action than a number of its peers, Mr. Darcos said.

According to the Organization for Economic Cooperation and Development, France lost an average 100 days a year to strikes per 1,000 workers from 2000 to 2004. That ranked it below Spain, Italy and Canada but still well above Germany, Britain and the United States.

While union membership is low, there is a tradition of strong labor activism here, which appears to be rooted in the national psyche, the construction of the modern state and the worker protections built into law, allowing unions often to slow restructuring through workers&S217; councils.

&S220;Why do Americans like rodeo?&S221; was Mr. Darcos&S217;s joking response when asked why the French appear to be wedded to strong workers&S217; rights. &S220;The French are very attached to a certain social model because it is a part of their history.&S221;

The main unions, he said, are &S220;conflictual&S221; but &S220;responsible&S221; and offer a &S220;counterview to liberalism.&S221;

&S220;We believe in liberalism,&S221; he said, &S220;in the sense that market law is good for the economy, but it isn&S217;t enough on its own. It isn&S217;t humane enough.&S221;

While French labor protection adds to security &S212; making layoffs difficult &S212; it may also generate stress in the workplace, experts say instant payday loans. Many employees seem to be holding on to jobs for which they feel ill-equipped or where companies don&S217;t want them.

The economic crisis, restructuring and outsourcing have only added to the insecurity.

&S220;Stress is a problem all rich, developed countries are facing,&S221; Mr. Darcos said. &S220;The U.S. faces it like France.&S221;

Still, he admitted that companies like France T&>33;l&>33;com &S212; with its string of highly publicized suicides &S212; may have underestimated the human dimension of restructuring.

&S220;We are in a transforming economy,&S221; he said, &S220;and the evaluation tools used are a bit of date.&S221;

Nonetheless, a job, even a highly stressful one, is better than unemployment, he said.

&S220;For us, unemployment is the absolute failure,&S221; Mr. Darcos said. &S220;We prefer to have people who don&S217;t feel totally happy at work, or to work part-time, rather than people being unemployed.&S221;

The unemployment rate in France stood at 9.8 percent in July, up two percentage points from a year earlier. It probably would have been even higher without government programs to subsidize keeping workers in the auto industry and others on the payroll, at least part time.

What of the controversial 35-hour work week law, which was enacted in 1998? President Nicolas Sarkozy proclaimed its death in 2008, but in reality he merely softened its constraints by moving to eliminate taxes paid by employees and employers on overtime.

Despite the law, E.U. data show that last year the French worked a 41-hour week on average, putting the country 13th among the 27 nations in the bloc. (No.1 was Austria with 44 hours.)

There is no intention to dismantle the legal framework, Mr. Darcos confirmed. &S220;What we have done is to allow employees, who want to, to work more and differently.&S221;

Alice Pfeiffer contributed reporting.

Labor Minister Sees 'De-Unionization' in France

SYDNEY &S212; The Chinese state-owned chemical firm Sinochem bid $2.5 billion on Monday for the Australian farm chemicals group Nufarm, looking to gain a global footprint in a deal that could again test investment ties between China and Australia.

The bid sent Nufarm shares up nearly 10 percent to 12.22 Australian dollars in morning trade, though still substantially below the offer price of 13 dollars, reflecting concerns that the deal still has many hurdles to clear, including due diligence and both shareholder and regulatory approvals.

The major regulatory risk is Australian foreign-investment approval, which has been difficult to predict, especially when state-owned Chinese firms seek to take control of local assets.

&S220;There could be issues, but I think on balance it should be ok,&S221; said Paul Xiradis, chief executive of the fund manager Ausbil Dexia, arguing that Nufarm did not pose the same national interest concerns as China&S217;s recent mining investments.

Australia&S217;s Foreign Investment Review Board has stymied at least two major Chinese investments in Australia this year, both involving local companies that own large mineral deposits.

In contrast, Nufarm is in the manufacturing industry where the foreign investment regime has generally been more liberal.

&S220;It should be quite a do-able transaction from the FIRB&S217;s point of view,&S221; Mr. Xiradis said, referring to the review board.

The main attraction for Sinochem is Nufarm&S217;s global distribution network, which includes businesses in Asia, South America and Europe, analysts say.

Bank of America Merrill Lynch had speculated that an offer between 14 to 16 dollars a share would be accepted by the board.

&S220;Whether it succeeds at that price, it&S217;s hard to say, but I don&S217;t think there&S217;s going to be too many counteroffers payday loans. It has been known that Nufarm is potentially up for sale and no one else has come to the party at this point,&S221; Mr. Xiradis said. Ausbil owns Nufarm shares but declined to divulge the holding.

Nufarm reported a 2.6 percent drop in net profit on Monday and flagged a challenging operating environment in the current year. That cautious outlook could be part of the reason for the lower-than-expected bid, analysts said.

Resource-hungry China has been looking to buy Australian mining companies, including a $2.9 billion bid by state-owned Yanzhou Coal Mining Co for Felix Resource. So far this year, Chinese companies have invested about $5 billion in Australian companies.

Last month, China&S217;s biggest steelmaker, Baosteel, agreed to buy a 15 percent stake in iron ore explorer Aquila Resources for $240 million.

China is Australia&S217;s biggest export market, with two-way trade worth $53 billion last year.

Nufarm said there was still no certainty a deal would proceed, despite its support for the heads of agreement.

It is the second time Nufarm has received an approach from a Chinese firm in two years. In 2007, China National Chemical Corp., China&S217;s leading chemical producer, led a 3 billion dollar approach with the U.S. private equity firms Blackstone Group and Fox Paine Management, but they did not make a formal offer.

Nufarm is being advised by UBS, while the Royal Bank of Scotland is advising Sinochem.

Reuters

Sinochem Makes $2.5 Billion Bid for Australian Chemicals Group

HONG KONG (Reuters) – Asian stocks rose on Thursday as hopes for global economic recovery prompted investors to shift into riskier assets, while oil found support above &&6;71 a barrel following OPEC&&9;s decision to keep output steady.

The investor shift kept the U.S. dollar on the defensive. It hit its weakest value in almost a year on Wednesday and was holding just above that level on Thursday.

As South Korea and New Zealand kept interest rates at record lows, Asian share markets were underpinned by a 0.5 percent gain in the Dow Jones industrial average (.DJI) and the Federal Reserve&&9;s Beige Book survey, which showed the U.S. economy was stabilizing although many key sectors remained weak.

That buoyed sentiment in Japan where the Nikkei index (.N225) gained 1.4 percent even though machinery orders&&9; data pointed to weak capital spending in the world&&9;s No. 2 economy.

The MSCI index of Asia Pacific stocks traded outside Japan (.MIAPJ0000PUS) firmed 0.8 by late morning.

South Korea&&9;s KOSPI index (.KS11) increased 1.4 percent, helped by shipping and shipbuilding companies. Hanjin Shipping (000700.KS) and Hyundai Heavy Industries (009540.KS) rose 4.3 percent and 3.7 percent respectively after a rise in the Baltic Dry Index (.BADI), a key freight indicator.

The Korean won and Korean September treasury-bond futures fell sharply after the Bank of Korea said it would maintain its current easy monetary stance. However, its comments reinforced market expectations it would be one of the first country&&9;s globally to start raising rates, possibly before the end of the year.

"The BOK is probably among the most hawkish banks in the world right now and it might be one of the first central banks to hike interest rates," said Frederic Neumann, Asia economist at HSBC in Hong Kong.

"There is always a risk of being the first mover because it has immediate exchange rate implications. I think to some degree that constrains the ability to hike early and aggressively instant payday loans completely online."

DOLLAR DEFENSIVE

In Australia, a sharp fall in employment in August put pressure on the Aussie dollar but share prices edged up 0.5 percent with energy stocks Woodside Petroleum (WPL.AX) and Santos (STO.AX) gaining 1 percent off the back of firm oil prices.

Oil was quoted at &&6;71.88 a barrel, up more than 40 cents from Wednesday&&9;s closing level. It reached as high as &&6;72.52 after OPEC agreed in Vienna to maintain current output and after the American Petroleum Institute reported a sharp fall in crude stocks.

Growing confidence the worst is over for the global economy continued to push investors into riskier assets, keeping the U.S. dollar under pressure. It dropped to its lowest level in nearly a year on Wednesday against a basket of currencies (.DXY) and was holding just above those levels on Thursday.

Gold prices are benefiting from dollar weakness. Spot gold was trading at &&6;991.7 per ounce by 10:47 p.m. EDT, after topping &&6;1,000 on Wednesday.

New Zealand kept interest rates at a record low 2.5 percent but indicated it was less inclined to cut again.

However, the kiwi dollar fell after Governor Alan Bollard told Reuters that the currency, which hit a one-year high on Wednesday, was overvalued and that markets were premature in pricing in higher rates from early 2010.

China&&9;s Shanghai index (.SSEC) fell 1 percent. Recent volatility in China&&9;s shares has made fund managers cautious about buying, a Reuters poll shows.

Hong Kong&&9;s Hang Seng Index (.HSI) took its cue from Wall Street, rather than China, and was up 1.4 percent.

Taiwan&&9;s benchmark TAIEX index (.TWII) reached a 14-month intraday high after the government named a new cabinet, raising hopes a financial services agreement with China can be signed soon.

Asian stocks rise, oil supported after OPEC

Hot News: AIDS Activists Issue Grades to Drug Companies

LONDON &<51; Determined to become a global food and confectionery giant, Kraft Foods said Monday that it would pursue a $16.7 billion takeover of Cadbury, the British chocolate maker, even after Cadbury rejected that offer as too low.

Shares of Cadbury soared 41 percent in the day&S217;s trading in London, and above the offer price, indicating that investors expected a higher bid from Kraft or a proposal from a rival candy company like Nestl&>33; or Hershey. Some analysts said Cadbury could be worth as much as 43 percent more than Kraft offered.

Combining Kraft, which makes Oreo cookies, Toblerone chocolates and Ritz crackers, with Cadbury&S217;s Trident gum and Dairy Milk chocolates would create a giant with $50 billion in yearly revenue, spanning the world from the United States and Mexico to Britain and India.

Analysts said that confectionery companies tend to trade at higher values, so adding the chocolate and gum business could enhance Kraft&S217;s allure with investors. But Cadbury said that it had reviewed Kraft&S217;s proposal, which was made public on Monday, and had rejected it because it &S220;fundamentally undervalues the group and its prospects.&S221;

Kraft&S217;s chief executive, Irene B. Rosenfeld, has a deep background in food and beverages, and turned around the chips business at PepsiCo before joining Kraft in 2006.

Nelson W. Peltz and his activist firm, Trian Fund Management, own a stake in Kraft and have nudged it to sell certain assets and bolster the stock price in the past. Mr. Peltz also owns a 3 percent stake in Cadbury and pushed successfully to split off its beverage unit, now known as the Dr Pepper Snapple Group.

Mr. Peltz declined to comment on Kraft&S217;s proposal.

A takeover of Cadbury would help Kraft, the biggest food conglomerate in North America, compete with its larger rival, Nestl&>33;. Cadbury would strengthen Kraft&S217;s market share in Britain and open India, where Cadbury is among the most popular chocolate brands.

It would also expand Kraft&S217;s gum business and give it a global distribution network. Nestl&>33; lacks a gum business and is struggling with declining sales as recession-plagued consumers turn away from its bottled water and ice cream.

Analysts have flagged Cadbury as a potential acquisition for Kraft for several years, but such speculation cooled when Kraft acquired the biscuits and cereal snack unit of France&S217;s Danone in 2007.

Cadbury and Kraft have been doing relatively well in recent months. Cadbury said in February that its confectionery business had proved &S220;resilient&S221; despite price increases because of higher commodity costs. Kraft has benefited from rising sales of its convenience foods, like DiGiorno frozen pizza and Oscar Mayer sandwich meats, as consumers eat more meals at home.

Among Cadbury&S217;s biggest attractions is its chewing gum business, especially in Latin America and Europe, which expanded in 2003 with the acquisition of Adams Confectionery to include Trident and Bubbas bubble gum. Competition then heated up when Mars acquired Wrigley.

For months, Hershey had been mulling a bid for Cadbury, and it has hired JPMorgan Chase as an adviser, according to people briefed on the matter. Some analysts speculated about a possible joint bid by Nestl&>33; and Hershey, allowing Nestl&>33; to take Cadbury&S217;s gum business to compete with Mars with Hershey taking over the chocolate operation.

A Nestl&>33; representative declined to comment and pointed to a statement Monday by Paul Bulcke, the chief executive, that Nestl&>33; had no plans for major acquisitions in 2009 and 2010 no fax cash loans.

The takeover bid could not have come at a worse time for Cadbury&S217;s chief executive, Todd Stitzer. The company is halfway through its plan to increase operating profit margins to about 15 percent in 2011, from about 10 percent in 2007. Cadbury&S217;s shares have risen about 33 percent since it spun off its Dr Pepper beverage unit in 2008.

The company, whose roots can be traced to 1824 when John Cadbury opened a shop in Birmingham, England, to sell tea, coffee and, later, cocoa beverages, is not expected to give in easily. It said that it was &S220;confident in Cadbury&S217;s stand-alone strategy and growth prospects as a result of its strong brands, unique category and geographic scope.&S221;

Speaking in a conference call on Monday, Ms. Rosenfeld of Kraft disagreed. &S220;Cadbury has limited opportunity as a stand-alone entity in this increasingly competitive environment,&S221; she said, adding that Kraft &S220;feels quite confident with the proposal&S221; and &S220;looks forward to continuing the dialogue.&S221; Kraft had not contacted Cadbury investors directly, she said.

Ms. Rosenfeld met Cadbury&S217;s chairman, Roger Carr, on Aug. 28 to discuss a possible combination, Kraft said in a statement. An exchange of letters followed, but after Cadbury rejected Kraft&S217;s proposal, Ms. Rosenfeld decided to make the offer public to encourage further discussions.

Under the proposal, Cadbury shareholders would get &<63;3, or $4.92, in cash and 0.2589 in Kraft Foods shares for each Cadbury share. Kraft said the offer valued the company at &<63;7.45, or $12.22, a share, a premium of 31 percent over Cadbury&S217;s closing price of &<63;5.68 on Friday. In London, shares rose to &<63;7.83 on Monday.

Jeremy Batstone-Carr, an analyst at Charles Stanley in London, called the proposal &S220;somewhat opportunistic&S221; and said &S220;Kraft will need to up its offer to have any serious chance of success, perhaps to 800 pence in cash or higher.&S221;

A report by Sanford C. Bernstein said Kraft was right to go after Cadbury but valued the British company at &<63;8.55 to &<63;10.7 a share, based on Wrigley&S217;s acquisition of Mars in 2008.

A takeover would result in an annual pretax cost savings of $625 million in marketing spending, procurement and research and development, Kraft said in a statement. It would result in higher earnings per share, after all transaction-related costs were included, in the second year, Kraft said.

Kraft said it would finance the deal through debt and was prepared to offer Cadbury shareholders the opportunity to elect, subject to availability, the part they would receive in cash and in new Kraft Foods shares.

Christopher Growe, a food company analyst with Stifel Nicolaus, applauded the Kraft team. &S220;Irene has done a great job transforming this company and bringing Kraft to a point where they could build this bigger business,&S221; he said. &S220;I don&S217;t think Kraft was ready for a transaction of this size a year ago.&S221;

Lazard is acting as lead financial adviser to Kraft. Centerview Partners, Citigroup and Deutsche Bank are other financial advisers, with Citigroup and Deutsche Bank acting as corporate brokers, providing financing. Cadbury&S217;s advisers are UBS, Goldman Sachs and Morgan Stanley.

Michael J. de la Merced, William Neuman and Andrew Ross Sorkin contributed reporting from New York, and David Jolly from Paris.

Rebuff by Cadbury Doesn’t Deter Kraft

SAN DIEGO &<51; The inside of computers has been Intel&S217;s territory, as the world&S217;s biggest maker of microprocessors reminds consumers with its &S220;Intel Inside&S221; campaign.

The cellphone&S217;s guts have been the domain of Qualcomm. As the cellphone becomes more like a computer and the computer more like a cellphone, it was inevitable that the two chip makers would clash.

Intel wants to get inside smartphones, and Qualcomm, one of the largest suppliers of chips for wireless phones, wants to get into small notebook computers.

&S220;Intel is trying to come down from the computer and bring their software ecosystem along,&S221; said Qualcomm&S217;s chief executive, Paul E. Jacobs. &S220;We&S217;re trying to go up from the phone and build the software ecosystem.&S221;

Qualcomm, which sells about 22 percent of all chips used in wireless devices including the iPhone, BlackBerry Storm and T-Mobile G1, believes it has never been better situated in its 24-year history to break into the market for computing devices.

PCs are evolving into tablet PCs and small laptops, essentially big smartphones that are always on, always connected to the Internet, with all-day battery life &<51; in short, very much like a large iPhone or BlackBerry. Qualcomm calls these devices smartbooks because the design resembles a large smartphone.

Mr. Jacobs sees his company at the center of an industry that is driving the most cutting-edge innovations, as seen in devices like the iPhone and BlackBerry Storm.

&S220;That energy is now coming out of the phone industry,&S221; Mr. Jacobs said. &S220;The PC became so standardized that the degree of innovation was not the same as what you see in the phone space.&S221;

Intel, whose revenue is approximately triple Qualcomm&S217;s, disagrees. &S220;As mobile devices become smarter with PC-like performance, computer and Internet capabilities, this is Intel&S217;s strength,&S221; an Intel spokeswoman, Suzy Ramirez, said.

Qualcomm is counting on its Snapdragon chip to power these devices. Developed by a team of former I.B.M. engineers who worked on the PowerPC microprocessor, it is the first chip of its kind to reach a speed of 1 gigahertz, a significant milestone for ARM, a processor design renowned for using so little power the device&S217;s battery can last all day.

Snapdragon is already being used by Toshiba in its ultra-thin TG01 smartphone that is being sold in Europe. More devices using Snapdragon are expected later this year, Mr free business cards. Jacobs says.

Hardware alone will not win the battle, however. Qualcomm has been working with Google, which developed the Android operating system for cellphones. The fruit of this partnership was T-Mobile&S217;s G1 phone, the first smartphone using Android and a Qualcomm chip.

&S220;There was a lot engineering back and forth,&S221; Mr. Jacobs said. &S220;The thing that we&S217;re doing now is helping them scale. Because they have a relatively small team focused on evolving the operating system.&S221;

What may prove more significant than Android is software that Google will bring out next year: the Chrome operating system, which is intended for larger, computerlike devices to challenge laptops running Windows.

Qualcomm is betting that Google becomes a major operating software company.

&S220;They&S217;re onto what the future of computing is,&S221; said Bill Davidson, Qualcomm&S217;s senior vice president for global marketing and investor relations. &S220;It&S217;s about taking advantage of the computational power that already exists within the Internet.&S221;

He went on: &S220;The whole push for Chrome is to have the much thinner, lighter, smaller client so that you don&S217;t need as much memory to run this big honking OS,&S221; he said, referring to Microsoft&S217;s Windows operating software.

The Qualcomm chip will be designed to work with Chrome to move some of the computing functions off the device to fast computers based in data centers, a model the industry calls cloud computing.

&S220;I think a hybrid model is the model that will work best, where there are certain applications that are downloaded on the device and they live there,&S221; Mr. Jacobs said. &S220;And other ones that are coming up and down through the cloud. We&S217;ll support both.&S221;

It is not going to be a cakewalk to displace the most potent partnership &<51; Microsoft and Intel &<51; in the history of the personal computer.

&S220;One of the key issues is brand,&S221; said Matthew Wilkins, principal analyst for compute platforms research, at the market researcher iSuppli. &S220;Google Chrome OS, Android and ARM are not traditionally seen in PC retail stores. Therefore they will be competing against established and recognized brands: Intel, Microsoft and Windows.&S221;

Intel and Qualcomm Eye Each Other’s Terrain

NEW YORK (Reuters) – Stocks climbed on Tuesday, briefly hitting 2009 highs after strong housing and consumer confidence data, while Ben Bernanke&&9;s renomination as Fed chairman ended uncertainty about the central bank&&9;s leadership as the economy recovers.

Consumer confidence increased more than expected in August, the Conference Board said, while the S&P/Case-Shiller home price index rose in June for a second straight month.

A rebound in home prices and increased consumer spending are considered crucial in order for the U.S. economy to bounce back from its worst recession in decades.

Home builders&&9; shares ranked among the top performers, with Lennar Corp (LEN.N) up 5.4 percent at &&6;15.36 and KB Home (KBH.N) up 5.2 percent at &&6;18.41. The Dow Jones US Home Construction index (.DJUSHB) rose 4.5 percent.

"It suggests that there still more consumers and investors yet to turn or who are maybe increasingly turning positive and that is helping to boost the markets," said Jeff Kleintop, chief market strategist at LPL Financial in Boston.

The consumer confidence data helped drive retail stocks higher. Solid earnings from women&&9;s clothing retailer Chico&&9;s FAS Inc (CHS.N), up 7.8 percent at &&6;12.82, and close-out retailer Big-Lots Inc (BIG.N), up 7.8 percent at &&6;25.91, also bolstered that sector.

The S&P Retail Index (.RLX) gained 2 percent.

The Dow Jones industrial average (.DJI) gained 51.17 points, or 0.54 percent, to 9,560.45. The Standard & Poor&&9;s 500 Index (.SPX) rose 5.15 points, or 0.50 percent, to 1,030.72. The Nasdaq Composite Index (.IXIC) added 9.41 points, or 0.47 percent, to 2,027.39.

U.S. President Barack Obama&&9;s renomination of Ben Bernanke to a second term as Federal Reserve chairman reassured investors, providing continuity when the economy is showing signs of recovering from the recession.

"The alternatives were not good and the choice of Bernanke is very deserved," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

"To some, it was expected. But there is still a sense of relief that it actually happened."

In other economic news, official forecasts said the U.S. national debt will nearly double over the next 10 years. The market&&9;s reaction was muted.

The broad S&P 500 index briefly hit a 10-month intraday high, and remains on track for its sixth straight monthly gain.

(Editing by Jan Paschal)

Wall Street gains on housing, consumers and Bernanke

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SHANGHAI &<51; China formally arrested an Australian citizen and three other employees of the British-Australian mining giant Rio Tinto early Wednesday on suspicion of commercial bribery and trade secrets infringement, ending a diplomatic standoff over whether employees of a foreign company had spied on China.

Prosecutors announced the decision six weeks after the four employees had been detained in Shanghai on allegations that they had violated China&S217;s state secrets law by getting access to confidential documents that gave them an advantage in negotiating iron ore prices with Chinese steel mills.

In deciding not to pursue state secret charges, Beijing appeared to bow to international pressure after Australian officials complained about a lack of transparency in the case and global investors worried that there could be new risks in doing business in China.

But analysts say the announcement does little to resolve broader questions about how the case unfolded, who is involved or whether politics was a factor in a case that emerged shortly after China and Rio Tinto broke off iron ore negotiations over a price dispute.

&S220;There&S217;s still a lot we don&S217;t know,&S221; said Jack Huang, a lawyer at Jones Day, the international law firm.

What prosecutors said was that the four Rio Tinto employees used &S220;improper means&S221; to gain access to information about China&S217;s state-controlled steel industry and that they engaged in commercial bribery.

Very few other details, such as how much bribery was alleged to be involved, how it was said to work or whether Rio Tinto would face sanctions, were disclosed.

A spokesman for the Shanghai bureau of the prosecutor&S217;s office said Wednesday that the investigation was continuing and that the four employees had not yet been indicted.

The government also suggested in the statement Wednesday that several Chinese steel mill employees could soon be arrested in what appears to be a widening corruption scandal.

Australian officials added more detail Wednesday, saying Chinese officials had informed them that the Rio employees had given bribes but also taken bribes from &S220;individuals not employed by state organizations.&S221;

Rio Tinto, one of the world&S217;s biggest mining companies and one of China&S217;s biggest iron ore suppliers, has strongly denied any wrongdoing in the case.

In a statement released Wednesday, the company&S217;s chief executive, Sam Walsh, said: &S220;Rio Tinto will strongly support its employees in defending these allegations. From all the information available to us, we continue to believe that our employees have acted properly and ethically in their business dealings in China cash till payday.&S221;

But legal experts say bribery is widespread in China. In the first half of this year alone, Beijing says 9,000 government officials were found guilty of graft, and about 24,000 officials were investigated.

However, legal experts also say that most high-level prosecutions here require approval from Beijing&S217;s top leaders and that bribery and corruption cases are often brought to punish political opponents.

&S220;It&S217;s a good way to pick on someone who&S217;s on the wrong side of the traffic,&S221; said Mr. Huang, the lawyer at Jones Day.

Other China experts said the timing of the arrests made it appear the Chinese government was using the case to retaliate against Australia and Rio Tinto, after several Australian officials strongly opposed a deal that would have allowed Chinalco, a major state-owned company, to acquire a large stake in Rio Tinto earlier this year.

The $19.5 billion deal would have been China&S217;s largest overseas investment. But Rio Tinto scrapped the deal after it found alternative financing. Then, last month, China&S217;s steel industry battled with Rio Tinto over iron ore prices in annual negotiations that ended without a deal.

Last weekend, an employee working in China&S217;s State Secrets Bureau, which detained the four Rio Tinto employees in early July, claimed that Rio Tinto employees had cheated and stolen documents that allowed Rio Tinto and other iron ore suppliers to overcharge China by $100 billion over the past six years.

The article was published on a Web site affiliated with the bureau. But it was soon taken down, and the Chinese authorities indicated the author had not had permission to comment on the case.

One thing is clear: China&S217;s iron and steel industry is in disarray. Iron ore negotiations have broken down, and even state-run media have published articles saying the industry is plagued by bribery and corruption.

David Kelly, a professor at the China Research Center at the University of Technology in Sydney, said China must now prepare a legal case against Rio Tinto employees under intense international scrutiny. And he said Beijing would be forced to come to terms with its own steel industry.

&S220;The vagaries of the Chinese iron and steel industry have been exposed now, and they&S217;re going to have to deal with that,&S221; Mr. Kelly said.

China Arrests 4 From Rio Tinto, but No Spying Charges

Hot News: China Charges 4 Employees of Rio Tinto, but Backs Off Allegations of Spying

European stock markets fell modestly Monday as investors stepped back after ending last week on a positive note because of a better-than-anticipated jobs report in the United States. The figures helped Asian markets advance strongly earlier.

The FTSE 100 index in London was down 28 points, or 0.61 percent, while DAX in Frankfurt fell 50 points, or 0.92 percent. The CAC-40 in Paris was 28 points, or 0.78 percent, lower.

In Asia, Tokyo&S217;s Nikkei 225 stock average rose 112.17 points, or 1.1 percent, to a 10-month high of 10,524.26 after an unexpected surge in Japanese machinery orders, while Hong Kong&S217;s Hang Seng jumped 554.15 points, or 2.7 percent, to 20,929.52, its best finish in about 11 months.

On Wall Street, futures indexes were little changed as investors are expected to turn their attention to the Federal Reserve Board meeting that begins Tuesday and earnings from some large retailers.

Amid a spring rally that has now stretched into the summer, investors will continue to hunt for signs of economic improvement to keep sending stocks higher. Better-than-expected earnings reports, along with signs of stabilization in the housing and banking sectors, have buoyed stocks in recent weeks.

To sustain the rally, investors will need to see evidence that consumers are back to buying goods. Consumer spending accounts for more than two-thirds of economic activity and is considered vital to a recovery. Retailers like Wal-Mart Stores and Macy&S217;s report earnings this week.

Daragh Maher, an analyst at Calyon Cr&>33;dit Agricole, said retail sales in the United States should be helped by the government-sponsored &S220;cash for clunkers&S221; subsidy to improve auto sales, though the underlying picture will be considerably less upbeat online payday loans.

Investors will also look to the Fed for indications of how the economy is faring. It is widely expected the Fed will keep key interest rates steady at near zero, but concerns about inflation are starting to grow, which could eventually force the Fed to raise rates.

Though no change in interest rates is expected, investors will be looking to see if the Fed sounds a note of cautious optimism in its accompanying statement and whether it has plans to expand its asset-purchasing program now that the funds are running dry.

&S220;As the week moves on we will see some more high level economic readings but for now it will be a case of taking stock of what was a pivotal week in the stock market recovery,&S221; Jimmy Yates, a dealer at CMC Markets, said.

Last week&S217;s gains have seen many of the world&S217;s major indexes cement their places above key technical levels, Mr. Yates said, which should leave them well-placed for more gains going forward.

Last week, for example, the Dow Jones industrial average added 2.2 percent to hit a 10-month high while the broader Standard &&8; Poor&S217;s 500 index consolidated itself above the 1,000-point mark after government figures showed that only 247,000 jobs were lost in July in the United States &<51; way less than expected &<51; and the unemployment rate unexpectedly fell to 9.4 percent.

European Shares Move Lower at Start of Week

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