WASHINGTON (MarketWatch) -- After several months of improvement in housing, manufacturing and sales, the U.S. economic recovery appeared to sputter in October, leading investors and analysts to re-evaluate whether their forecasts were too rosy.

The economic data to be released in the holiday-shortened week ahead could provide a few more "what-were-we-thinking?" moments. All in all, though, the data shouldn't kill hopes for modest growth while we wait for the private sector to start hiring again.

Last week, a "reality check" rippled through the markets following weak data on housing starts and industrial production, said Nigel Gault and Brian Bethune, U.S. economists for IHS Global Insight. They expect further "mixed and somewhat ambiguous" reports in the coming week, but, on whole, they say "the evidence is still positive and continues to point to a nascent recovery" that will need "strong policy support" for some time.

MarketWatch consensus See economic calendar date report forecast previous Nov. 23 Existing-home sales 5.74 million 5.57 million Nov. 24 GDP revision 2.8%  3.5% Nov. 24 Consumer confidence 45.5 47.7 Nov. 25 Jobless claims 495,000 505,000 Nov. 25 Durable goods orders 0.5% 1.4% Nov. 25 Durables ex-transportation 0.4% 1.2% Nov. 25 Personal income 0.1% 0.0% Nov. 25 Consumer spending 0.6% -0.5% Nov. 25 New home sales 390,000 402,000 Nov. 25 Consumer sentiment 67.0 66.0 Housing

Even four years after the peak, the state of the housing market remains central to the medium-term outlook.

Construction, sales and prices picked up over recent months after hitting generational lows, boosted in part by federal policies and in part by improvement in some of the fundamentals. But the weakening in the October data ahead of the anticipated expiration of the federal home-buying subsidy has put the strength of those fundamentals to the test.

The home-buyer tax credit, of course, has now been extended and even expanded. But buyers and builders didn't know that in October.

Last week, we found out that builders cut back on permits and starts on single-family homes in October, in anticipation that the tax credit would expire on Nov. 30.

This week, we'll get October data on sales of new and existing homes.

Economists surveyed by MarketWatch expect sales of existing homes to rise about 3% to a seasonally adjusted annual rate of 5.74 million. It would be the highest sales rate since June 2007. And it would reflect some sales of buyers rushing to get in ahead of the Nov. 30 deadline. Existing-home sales are recorded at closing.

By contrast, sales of new homes are recorded when the contract is signed, which is at least a month and often much more before the sale closes. To close on a sale before Nov. 30, a buyer would have had to sign contract in September or early October at the latest.

In part because the deadline would have passed for most buyers in October, sales of new homes are projected to have declined about 3% to a seasonally adjusted annual rate of 390,000, the survey says easy payday loans. Sales of new homes have underperformed compared with existing homes, probably because buyers can get a better deal on a foreclosed home or on a home owned by someone who needs to sell, fast.

Federal policies are clearly supporting the market, but there is uncertainty about how strong it would be without the support. Economists for Barclays Capital say that sales of existing homes would have risen 10% without the tax credit, instead of the 24% that has been recorded with it.

Although home prices have fallen and mortgage rates are very low, the housing market faces considerable problems. Foreclosures continue to rise and vacancy rates are at record levels, which mean prices could fall another 5% to 10% by the middle of 2010, according to Jan Hatzius, chief economist for Goldman Sachs.

If prices, sales and construction do sag, banks are likely keep credit extremely tight, which in turn could weigh on the pace of recovery, Hatzius said.

GDP revisions

The other big story for the week could be the revision to third-quarter growth figures. Last month, the Commerce Department said real gross domestic product grew at a 3.5% annualized rate, the first gain in a year. On Tuesday, that figure is likely to be revised to about 2.8%.

The revision comes from more complete data. In the first go-around, the government statisticians must estimate many of the key inputs for September, including foreign trade, inventories and construction spending. Now that those data have been released, it's clear the first estimates were too big.

The largest source of revisions will come from nonresidential construction spending and net exports. Spending on nonresidential structures was weaker than first thought, while imports were stronger than believed, suggesting that more of the gains from increased sales in the third quarter accrued to foreign producers, rather than domestic companies. Inventories will be revised lower.

"Despite the likely downward revision, we still believe that the third quarter will prove to be the first quarter of recovery and that it demonstrates a decisive turn in the economy," wrote economists for Barclays Capital.

Economists see the economy growing at a pace just above its long-term trend. They expect GDP to grow 2.5% in the fourth quarter, 3% in the first quarter of 2010 and 3.5% in the second quarter. That's a far cry from the 6% growth seen in typical V-shaped recoveries, but it's better than a poke in the eye with a sharp stick.

Of course, those are just forecasts. No one really knows for sure how the economy will do over the next 12 to 18 months.

Economic Preview: Do weaker data show recovery is stalling?

BARCELONA/SAN FRANCISCO (Reuters) – Chip stocks fell on Thursday after Bank of America Merrill Lynch downgraded the sector on a possible inventory correction, although two of Europe&&9;s top chipmakers were upbeat about recovery prospects.

BofA Merrill Lynch lowered its 2010 growth forecast for the global semiconductor industry and downgraded 10 chipmakers, including Intel Corp (INTC.O), turning more cautious on the group on expectations of a modest overshoot in global supply chain inventories.

"While we believe the correction will likely prove short and shallow, we think any hint of a correction in the supply chain could punish (semiconductor) stocks," BofA Merrill wrote in a note to clients.

The downgrade came two weeks after Morgan Stanley analyst Mark Lipacis noted that the good news for many semiconductor stocks had already been "baked in" and PC component suppliers would have a difficult time beating expectations.

Auriga analyst Daniel Berenbaum said notions of a strong rebound for the industry next year may not be realistic.

"Things wound up better this year than some of our worst fears, but I think demand has been pulled forward," he said. "I&&9;m concerned that everybody expects a corporate PC refresh in 2010 -- maybe it&&9;ll happen, maybe it won&&9;t happen, but I do believe it&&9;s already built into stocks."

Shares of chipmakers fell across the board on Thursday. Bellwether Intel dropped 4.5 percent, smaller rival Advanced Micro Devices Inc (AMD.N) 2.7 percent and Infineon Technologies AG (IFXGn.DE) fell 7 percent. The DJ STOXX European Technology Index (.SX8P) shed 2.9 percent and the Philadelphia semiconductor index (.SOXX) fell 3.5 percent.

German chip group Infineon was bullish on its fiscal 2010 outlook, saying sales could grow by more than 10 percent if the world economy continued to grow at its present pace. But analysts weren&&9;t convinced.

Traders saw as negative remarks by Infineon Chief Executive Peter Bauer that the company would need to boost profit margins well above 10 percent as it seeks to generate sustainable earnings amid the current recovery quick cash.

"Despite Infineon beating consensus estimates, we expected better numbers for the fourth quarter, as well as a more optimistic outlook for the running quarter, following bullish statements from competitors," Sal Oppenheim analyst Juergen Wagner wrote, keeping a "reduce" rating on the stock.

Dutch chip equipment maker ASML Holding NV (ASML.AS) -- whose order book is viewed as a barometer for major chipmakers such as Intel or Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) -- also said that it still expects order intake in October-December to be at least on the same level as in the previous quarter.

But shares in ASML closed down 6.14 percent after BofA Merrill Lynch downgraded the stock to "neutral" from "buy."

Around the globe, chipmakers are recovering from a prolonged downturn. Samsung Electronics Co Ltd (005930.KS), the world&&9;s top maker of memory chips and LCD screens, in late October posted its best quarterly net profit and forecast a strong 2010 due to global turnaround in the sector.

Earlier this week, research firm Gartner raised its forecasts for the chip market in 2009, saying it now sees it falling 11.4 percent to &&6;226 billion, compared with a previous forecast for a 17 percent fall.

Next year Gartner sees the market growing 13 percent.

Taiwan&&9;s TSMC, the world&&9;s top contract chip maker, also posted its biggest quarterly net profit in a year last month and was bullish about future capital spending, aiming to invest &&6;2.5 billion on upgrading its technology.

(Additional reporting by Tenzin Pema, S. John Tilak in Bangalore; Nicola Leske in Barcelona and Hakan Ersen and Tyler Sitte in Frankfurt; Editing by David Cowell and Gerald E. McCormick)

Chip stocks fall on downgrade, CEOs talk recovery

Hot News: U.S. Q3 seen revised down on widening trade deficit

Most U.S. stocks ended the week with losses, but the Dow Jones Industrial Average notched a small rise for the period thanks to gains on Friday in health care stocks and consumer-related shares. Tech shares were the biggest losers on the week.

The Dow fell 14.28 points or 0.1% on Friday to close at 10,318.16. For the week the index rose 0.5%. The Nasdaq Composite fell 10.78 points or 0.5% to close at 2,146.04 on Friday for a weekly loss of 1%. The broader Standard & Poor's 500 Index dropped 3.52 points or 0.3% to close at 1,091.38. For the week the benchmark index fell 0.2%.

Stay tuned to MarketWatch over the weekend for the latest on the health care reform bill and all the rest of the news you need. Our weekend features include a look at the market for initial public offerings and an examination of how discount airlines are ramping up their Web sites to attack the bigger carriers on a new front.

Please take a few minutes to view our weekly look ahead videos.

U.S. Week Ahead: Housing Data, Holiday Sales

Europe's Week Ahead: LSE, Remy Cointreau Report

Asia's Week Ahead: GDP, Auto Makers In Focus

-- Christopher Noble, assistant managing editor

Visit to the East

President Barack Obama appears to have come away with few tangible gains on the economic and trade front during his first state visit to China, although his message on Internet freedom and human rights are likely to resonate on Chinese Web sites in coming months, analysts say. Some China-watchers cautioned it was too early to say if Obama's trip to the country will make less of an impression than Bill Clinton's 1999 visit. Read more about Obama's trip East.

Debt for sale

Companies are bombarding the bond market with debt sales this month, pushing issuance above $40 billion, as they take advantage of low rates to build acquisition war chests, prepare to buy back stock and build up cash to finance growth. Lockheed Martin Corp. , Cisco Systems Inc. , Waste Management Inc. and Kellogg Co. are among the corporations that have collectively sold $42 billion in debt this month, including $24 billion last week. Read more about the latest moves in the corporate-bond market.

Buying a home on deadline

House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather. This winter, however, might be different, thanks to the extended -- and expanded -- first-time home-buyer tax credit. Here are five tips on tapping the new tax credit.

Lower profit at Home Depot

Home Depot Inc. reported that its fiscal third-quarter profit fell a less-than-expected 8.9%, after the home-improvement retailer controlled expenses. The company also raised its full-year outlook, even though its implied fourth-quarter forecast fell short of Wall Street expectations. Read more about Home Depot's results.

More losses for GM

Fresh out of bankruptcy, General Motors Co payday loan lenders. reported a third-quarter loss of $1.15 billion this week, as government stimulus programs helped the automaker increase its sales and reduce inventory. Further, the company said it would begin paying down its debt to the U.S. and Canadian governments in December, ahead of schedule, thanks to improving global economic conditions and stabilizing industry sales. Read more about GM's results.

Nestlé takes aim at Starbucks

An instant-coffee war is brewing. A month after Starbucks' Via Ready Brew invaded Nestlé's jealously guarded turf, the giant Swiss food maker has mounted a spirited counteroffensive, passing out free samples of its Nescafé Taster's Choice instant coffee across several key U.S. cities. It's hard to fathom the marketing muscle Nestlé and Starbucks are throwing behind their rival instant brews. But the stakes are enormous. Read more about the instant-coffee market.

Google and Microsoft software battle

Google Inc. and Microsoft Corp. kicked their battle for personal computing supremacy into a higher gear, with Microsoft bragging about strong sales of its latest operating system and Google promoting its contrasting approach to PC operating systems. Read MarketWatch's story about Google and Microsoft's operating system battle.

God Save the Queen

This week, Britain's Labour government detailed a legislative agenda that includes measures to cap bankers' pay and to attack the budget deficit as the nation prepares for an election that must take place by June. Opposition leaders branded the Queen's Speech, written by the government and delivered by Queen Elizabeth II in the House of Lords, as pre-election grandstanding. The Queen's Speech is the central part of the official state opening of Parliament, which marks the beginning of a new, annual parliamentary session. Read more about the Queen's Speech.

Citi makes a move from Claren Road

Citigroup Inc. recently redeemed its investment with Claren Road Asset Management after helping launch the hedge-fund firm in 2005, according to two people familiar with the matter. Citi redeemed all of its investment, roughly $250 million, the people said on condition of anonymity. The decision to withdraw wasn't driven by Claren Road's performance, which has been solid through the financial crisis. Claren Road told one person that Citigroup pulled its investment as part of a broader decision to redeem holdings from outside hedge funds. Read more about Claren Road.

Reform is from Venus

Two women have emerged as leading thinkers and doers in the post-financial crisis world. Sheila Bari of the Federal Deposit Insurance Corporation and Elizabeth Warren who leads Congress's oversight for the $700 billion bank bailout package have been leading the charge for meaningful reform in the face of resistance from the old boy network.

Top Ten: MarketWatch's top stories of the week, Nov. 16-20

Hot News: Casual Male Retail Group posts smaller 3Q loss

WASHINGTON &<51; Flights over much of the eastern United States were delayed Thursday by a pre-dawn failure in a fairly new communications system, which led to the shutdown of a computer that accepts flight plans from the airlines and feeds them to air traffic controllers.

It was the fourth major systemwide disruption attributed to the communications system, which the Federal Aviation Administration began putting into service earlier in this decade as a way to cut costs and assure reliability.

But when it failed, at about 5 a.m. Eastern time on Thursday, the airlines had to send flight plans by fax, and the controllers typed them into their computers, sort of a hunt-and-peck exercise that was so cumbersome that many planes were delayed more than an hour. But there was no risk to planes in flight, according to the F.A.A.

By mid-morning the system was working again, but the backlog caused widespread airport delays.

The crucial computer that was knocked out, the National Airspace Data Interchange Network, situated in Atlanta and with a backup in Salt Lake City, had also failed in August 2008, with a similar result, but for a different reason.

Flight plans typically consist of hundreds of alpha-numeric characters giving the flight number, type of equipment, takeoff location and various intermediate points, with altitudes. When the first failure happened at about 5 a.m. &<51; a router, according to the F.A.A. &<51; it knocked out not only the computer that handles flight plans, but one that sorts through &S220;notices to airmen,&S221; or F.A.A. alerts about short-lived problems like equipment failures or runway closings, and delivers them to pilots.

By early afternoon, the F.A.A.&S217;s online status board was showing the problem limited to the Northeast. The computer that handles the flight plans was repaired by around 9 a low interest payday loans.m., but by then a huge backlog developed.

&S220;It may take many hours for the system to catch up,&S221; the National Air Traffic Controllers Association said in a statement, adding, &S220;Airport efficiency is being cut by at least half in places like New York - J.F.K.&S221;

Airlines reported problems in other areas as well. Around the country, planeloads of passengers heard pilots blame the air traffic system as they sat on the tarmac.

AirTran Airways, based in Orlando, Fla., quickly announced that passengers with tickets for Thursday could rebook without charge, as is commonly done in storms.

The aviation agency&S217;s data processing system has a variety of problems. While it was hailed as a marvel when it was introduced decades ago, much of it is written in obsolete computer language and the agency has been slow to provide updates. And with a requirement for up-to-the-minute, round-the-clock performance, parts of the system have crashed while technicians tried to install upgrades, like uninterruptible power supplies, or software fixes.

Each failure causes frustration. At LaGuardia Airport in New York on Thursday morning, Gilbert Valdez, a teacher a the University of Tricosi in Chicago, who flies in four or five times a year, showed up early for his 2 p.m. flight home because he had heard about the disruption.

&S220;It&S217;s kind of nerve wracking because I don&S217;t want to be stranded at LaGuardia,&S221; Mr. Valdez said. &S220;I just want to get home.&S221;

Micheline Maynard contributed reporting from Detroit, and Brian Knowlton from Washington.

Backlog of Flight Delays After Computer Problems

ST. LOUIS (Reuters) – A senior U.S. Federal Reserve official said on Wednesday the central bank may start tightening financial conditions by adjusting its extensive purchase programs, rather than by raising interest rates.

"The market&&9;s focus on interest rates is disappointing, given quantitative easing," Bullard said, according to excerpts of remarks prepared for delivery to a group of bankers. "Markets should be focusing on quantitative monetary policy rather than interest rate policy," he said.

"The main challenge for monetary policy going forward will be how to adjust the asset purchase program without generating inflation while interest rates are near zero," Bullard said business card.

Medium-term inflation hinges on what the Fed will do with this program, he said.

The Fed has committed to buy up to &&6;1.725 trillion in mortgage-related securities by the end of March.

Inflation is still low, but commodity prices are volatile and uncertainty over inflation is elevated compared with the fall of 2008, Bullard said.

The expansion of the Fed&&9;s balance sheet has helped restore financial health after the crisis, but it creates an inflation risk, he said.

(Reporting by Mark Felsenthal, Editing by Chizu Nomiyama)

Fed's Bullard: Shrinking reserves key to exit

SAN DIEGO (MarketWatch) -- The Federal Housing Administration is considering a variety of changes -- including requiring larger down payments for FHA-insured mortgages, demanding higher credit scores of FHA borrowers and upping FHA mortgage premiums -- to manage risk as it deals with losses in its capital reserve fund, FHA Commissioner David H. Stevens said Saturday.

"Nothing is off the table," Stevens said at the National Association of Realtors' annual conference, being held in San Diego this weekend. "I will consider everything, and I've already made several risk changes to manage the portfolio."

Yet while there is concern about the FHA's finances, its situation doesn't resemble the losses seen in the subprime mortgage market, he said.

A report released in the past week showed that the FHA has sustained significant losses from loans made before this year, as the country's foreclosure problem deepened. Its capital reserves have fallen below the threshold mandated by Congress.

By law, FHA must have two reserve accounts, Stevens explained to the Realtor audience. One is to hold funds to pay all forecasted losses, he said.

Then, "there's a secondary account, it's an excess valve that is used to pay unforecasted losses," he said. The creation of the secondary account is why FHA is "still standing while many others did not survive this tumultuous time," he said.

That secondary account is also the cause of concern.

The independent study projected that the secondary account was 0.53% of the total insurance in force this year -- below the 2% statutory threshold, according to a news release from the U.S. Department of Housing and Urban Development. That said, by combining both accounts, FHA holds $31 billion in reserves, or more than 4.5% of total insurance in force.

The study concluded that under most economic scenarios, the FHA's reserves would remain above zero. Still, some have compared FHA's troubles to those that brought down the subprime market -- a comparison Stevens says isn't fair.

Stevens said quality of FHA loans is much better than risky subprime products that became popular during the real-estate boom.

FHA-backed mortgages are for principal residences, borrowers have to fully document their income, and nearly all of them are 30-year fully amortizing fixed-rate mortgages, he said. That contrasts with poor performing subprime and Alt-a loans that required little if any income documentation and often involved low teaser rates that skyrocketed when the introductory period was over, he said payday loans with no fax.

And recently, the overall credit quality of FHA borrowers has crept up: The average borrower's FICO score today is 693, compared with 633 two years ago.

Taking action

Even though FHA is considering a variety of ways to address the reserve situation, Stevens also said it's important not to jump to conclusions and "overcorrect."

"I am modeling everything right now and looking at impacts. If you are concerned about defaults in the FHA portfolio, there are only a few primary areas that you can look at. One is the [mortgage insurance] premium, second is the qualifying guidelines -- the credit score and the down payment," he said in an interview following his speech.

"But we're doing it all with an eye on our No. 1 priority, which is to get the housing market back on track ... getting stability back in the housing system is the most important thing," he said.

Those in the real-estate industry are concerned about any action that would reduce available mortgage money. If down payment requirements for FHA rise, for example, that will take some prospective buyers out of the market and slow a recovery, said Helen Hanna Casey, president of Howard Hanna Real Estate Services, during an earlier panel on Saturday.

FHA popularity

To give an idea of FHA's recent popularity, half of the FHA's current portfolio was originated this year, Stevens said.

In the second quarter, nearly 50% of all first-time buyers in the market used a loan insured by the FHA. FHA-insured loans typically require a 3.5% down payment, which can be helpful for those buying their first home.

FHA backed about $360 billion in mortgages in 2009 and forecasts it will back $400 billion next year, Stevens said.

But FHA won't play this large of a role in the lending market forever. And it shouldn't, Stevens said.

"We are a counter-cyclical provider of capital to the housing finance system, and for it to be this large is concerning to everyone in the administration. We're filling the role and will continue to fill the role, but ultimately have to be concerned about private capital returning to the system," Stevens said.

FHA considering changes in wake of reserve losses

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

US President Barack Obama (C) stands with other APEC leaders for group photo following their evening dinner in Singapore, 14 Nov 2009Pacific Rim leaders have ended their annual APEC gathering with a vow to seek a sustained economic recovery and reject protectionism.The leaders of 21 Pacific Rim economies gathered around the conference table in Singapore.But the big news came outside their formal sessions - in closed door meetings and one-on-one talks.U.S. President Barack Obama focused on the sidelines, engaging in almost non-stop personal diplomacy.

Obama Discusses Climate ChangeHe began early Sunday, with an unexpected meeting on climate change called by the leaders of Mexico and Australia.Over breakfast, the prime minister of Denmark urged the group to back a different approach to save the upcoming international climate conference in Copenhagen.Severe drought is one of the expected consequence in Africa of climate changeWith negotiations on a new global climate agreement in trouble, there was consensus behind an alternative: adopt a political framework in Copenhagen and fill in the details later.

Obama Discusses Nuclear IssuesThere was also an effort to push forward talks on arms control, with President Obama and Russian President Dmitri Medvedev meeting to talk about a successor to the soon-to-expire 1991 Strategic Arms Reduction Treaty.Mr. Obama said he still believes they can get an agreement by the end of the year. The president said, "I am confident if we work hard, and with a sense of urgency about it that we should be able to get that done and I very much feel as if both sides are trying to work through some difficult technical issues but are doing so in good faith easy payday loans."

Russian President Dmitri MedvedevThey also talked about Iran's nuclear program.  President Obama urged Iran once again agree to a deal to ship its uranium out of the country for processing. "We are now running out of time with respect to that approach. And so I discussed with President Medvedev the fact that we have to continue to maintain urgency," said Mr. Obama.

President Medvedev said he still hopes to convince Iran to accept the nuclear deal. The Russian leader said, "We are prepared to work further and I hope that our joint work will yield positive results."

Obama Discusses BurmaBurma's detained opposition leader Aung San Suu Kyi (r) walks with US Assistant Secretary of State Kurt Campbell after their meeting at the Inya Lake Hotel, in Rangoon, Burma, 04 Nov 2009A short time later, Mr. Obama became the first American president to meet with all 10 members of the Association of Southeast Asia nations - including Burma.He called for political reform in Burma and the release of democracy advocate Aug San Suu Kyi, saying, "I reaffirmed the policy I put forward yesterday in Tokyo with regard to Burma."Mr. Obama's last meeting before leaving Singapore was with Indonesian President Susilo Bambang Yudhoyono. President Obama spent a good bit of his childhood in Indonesia, and has referred to himself as America's first Pacific president.In 2011, he will host the annual meeting of Pacific Rim leaders.   And the president announced in Singapore that he plans to host the gathering in his native state, Hawaii.

Obama Holds Key Talks on Sidelines of APEC

Hot News: As Consumers Trade Down, Champagne Makers Offer Discounts

LONDON – European stock markets awaited direction from Wall Street on Friday despite the news that the recession in the 16-country eurozone was over.

The FTSE 100 index of leading British shares was almost unchanged, down less than a point at 5,275.92 while Germany's DAX fell 12.94 points, or 0.2 percent, to 5,651.02. The CAC-40 in France was 10.64 points, or 0.3 percent, lower at 3,797.43.

Meanwhile in the U.S., Dow futures were 14 points, or 0.1 percent, higher at 10,203 while the broader Standard & Poor's 500 futures rose 2.1 points, or 0.2 percent, at 1,089.40.

On Thursday, U.S. stocks fell by 1 percent as oil prices tumbled and the dollar continued to clamber off recent lows.

"As it stands right now, it would be of little surprise to see something of a sideways drift into the weekend break," said David Jones, chief market strategist at IG Index.

Many analysts think stocks may claw out more gains if the S&P 500 can close about the 1,100 mark. Despite several attempts this week, it has not been able to sustain a break above that level through the end of the session.

"The question investors are asking now is whether we can eventually push higher...or whether recent congestion is a sign that the rally higher is over," said Geoffrey Yu, an analyst at UBS.

Stocks have rallied strongly since March's lows with many of the world's major indexes trading at, or near, their highest levels this year as investors reined in their economic doomsday expectations to factor in a swifter than anticipated global economic rebound.

News that the 16-country eurozone emerged from recession in the third quarter did little to excite investors as the 0.4 percent quarterly rise was less than many had been anticipating, and as growth in some major economies fell short of forecasts. With a rebound in exports partially offset by weak household spending, Germany's economy grew by 0 payday loans.7 percent and France's by 0.3 percent.

Still, the third quarter rise in eurozone output was the first in six quarters and brings to an end Europe's sharpest recession since World War II. Though the eurozone's banks were not at the epicenter of the financial crisis that triggered the global economic downturn, the region suffered as demand for its high-value products fell off a cliff.

Investors also didn't get too excited by the planned merger of British Airways PLC and Spain's Iberia. Both stocks were up only around 2 percent, though they had rallied strongly in the run-up to the announcement.

Earlier, Asian markets closed mixed amid investor uncertainty about the global outlook after Wall Street's losses on Thursday.

Tokyo's Nikkei 225 fell 34.18 points, or 0.4 percent, to 9,770.31 while Seoul's Kospi was off 0.1 percent at 1,571.99. Singapore's market traded flat, while Sydney shed 0.8 percent.

Among rising markets, China's benchmark Shanghai Composite Index added 0.5 percent to 3,187.65, and Hong Kong's Hang Seng recouped its early losses to gain 0.7 percent to 22,553.63.

Oil prices continued to fall in the wake of Thursday's soft U.S. inventory data. Benchmark crude for December delivery was down 27 cents at $76.67 in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.34 to settle at $76.94 on Thursday.

The euro was 0.2 percent higher at $1.4871. Despite the modest advance, the euro is still a ways down from levels earlier this week, when it nearly broke above its 15-month high of $1.5061.

The dollar was 0.6 percent down at 89.76 yen.

__

Associated Press Writers Louise Watt in London and Joe McDonald in Beijing contributed to this report.

European stocks steady ahead of Wall Street open

Finance and trade ministers meeting in Singapore for the Asia Pacific Economic Cooperation forum have agreed the global economic recovery is still fragile and more coordinated efforts are needed for sustained growth. Ministers from 21 Pacific Rim economies discussed sustaining growth and connecting the region.The economic leaders issued a statement saying although most economies are now recovering from last year's financial crisis, the recovery remains fragile and growth over the next few quarters is likely to be uneven. US Treasury Sec. Timothy Geithner (L) talks to a fellow minister at a joint APEC Finance Ministers press conference in Singapore, 12 Nov 2009The United States Treasury Secretary Timothy Geithner says while inflation is low across most major economies there are very high levels of unemployment. He says more efforts are needed to ensure an early economic recovery."Right now the challenge is growth ... let us make sure we have a business confidence restored, private investment expanding again, unemployment coming down, financial sectors definitively repaired. That is our basic challenge now," he said.Geithner says it will take some time to bring down unemployment levels, which in October reached a 26-year high in the United States.The ministers agreed on the need to find new ways for sustaining economic growth, which has largely depended on the U cash til payday loan.S. market.Geithner says the United States is seeing signs of a shift to saving more and borrowing less. He says private investment and exports are growing again."But what it means is, if the world is going to grow at the rate it can in the future, the rest of the world is going to have to shift to more domestic sources of growth, investment, and spending," he said.In the statement, APEC economies with large deficits pledged to encourage private savings, while those with large surpluses pledged to strengthen domestic growth.APEC ministers, including China, also agreed to pursue "market oriented" exchange rates. China has been accused of keeping its currency, the yuan, artificially low to boost exports. But, ministers played down currency exchange concerns.Singapore's Finance Minister Tharman Shanmugaratnam said none of the ministers called for any sudden or significant change in exchange rates, but said they should remain flexible.The finance and trade ministers were meeting before an APEC summit this weekend that is to include U.S. President Obama on his first trip to Asia as president.

APEC Ministers say Economic Recovery Fragile

Hot News: Blockbuster 3Q loss widens, closing 115 stores

SINGAPORE (Reuters) – U.S. Treasury Secretary Timothy Geithner offered fresh reassurances to Asian nations that the Obama administration was committed to a strong dollar and to actions aimed at bolstering its value.

"It&&9;s very important to the United States that we have a strong dollar," he said at a news conference at the Asia-Pacific Economic Cooperation forum, or APEC in Singapore on Thursday. "As growth recovers, (we will) move our fiscal position back into balance."

Soaring budget deficits, which hit a record &&6;1.4 trillion in fiscal 2009 and will likely be near that in 2010, have weakened the dollar because of huge U.S. borrowing to meet the U.S.&&9;s day-to-day spending needs.

For a graphic on the dollar&&9;s downturn, click:

http://graphics.thomsonreuters.com/119/US_USD1109.gif

As he did throughout the past week, at meetings of the Group of 20 in Scotland last weekend and in Tokyo earlier this week, Geithner acknowledged the U.S. carried a special burden for protecting the currency&&9;s value because it is the global reserve currency.

"We bear a special responsibility for being a source of stability and strength in the global economy and we are going to continue to be a voice for reform and we&&9;ll be a strong partner for countries in this region," Geithner said.

The dollar has declined 16 percent against a basket of six major currencies from the highs set in March and is down more than 37 percent from a peak in 2001.

Geithner dismissed a suggestion that pouring hundreds of billions of dollars worldwide into spurring economic activity might lay the ground for a future inflationary surge and said finance ministers must stay focused on getting growth on more solid footing.

"Inflation is low and still moderating across most of the major economies," Geithner said. "The most important thing we need to be doing is try to make sure we are reinforcing this early recovery."

The U.S. Treasury chief said there were promising signs of growth returning to the global economy and credited Asia with leading the recovery but stressed it will have to find future growth in sources other than hard-pressed American consumers.

"The rest of the world is going to have to shift to more domestic sources of growth, investment and spending," Geithner said and singled out China as an example that was already starting to happen.

"China&&9;s external surplus has fallen very sharply, you&&9;re seeing spending and investment in China expand very rapidly," he said no fax payday loan. "These are early signs of not just recovery and growth but a fundamentally necessary and important shift in how the global economy grows."

TINKERING WITH THE YUAN

Geithner avoided saying whether he thought China was signaling a willingness to let its yuan currency rise in value more rapidly in a central bank monetary policy report that said Beijing should consider major currencies in guiding the yuan.

China has effectively pegged the yuan&&9;s value to the dollar since the middle of last year, to the frustration of not only the United States but other Asian nations that have seen their hopes for exports checked as the yuan tracked the dollar&&9;s losses.

"Maybe that&&9;s a question that should go to my Chinese counterpart," Geithner said when asked if he felt the People&&9;s Bank of China was ready to let the yuan appreciate, then went on to praise Beijing&&9;s robust economic growth.

"China&&9;s playing a major role in helping contribute to recovery and the broad thrust of reforms its government has laid out provide a very promising basis for helping obtain a more solid foundation for growth in the future," he said.

China&&9;s latest reference to a possible new set of benchmarks for determining the value of the yuan came shortly before U.S. President Barack Obama is scheduled to visit the country. China&&9;s move would be a departure from recent practice that has seen the currency held steady since mid-2008 around 6.83 per dollar.

But U.S. officials were wary, cautioning that a change in its exchange policies is only one of many reforms China is undertaking and should not be over-estimated.

In a statement, the 21-member APEC endorsed a movement to "market-oriented" exchange rates that was widely seen as a reference to China as well as the necessity for keeping massive global stimulus measures in place until a more stable recovery is assured.

In a later interview on CNBC television, Geithner said the Obama administration needs to borrow "substantially less than we initially anticipated" to bail out the financial system and said that will help get the country&&9;s fiscal house into order.

"That&&9;s going to allow us to devote more to debt reduction," he said without offering any estimate how much less will have to be borrowed. "That&&9;s a fundamentally good thing."

(Additional reporting by Saeed Azhar; Editing by Anshuman Daga)

Geithner stresses strong dollar's global role

COLUMBUS, Ohio – After Richard Handy of Fairfield received an e-mail from a conservative group calling Gov. Ted Strickland's proposed delay of Ohio's income tax cuts a "retroactive tax increase," Handy fired off a few passionate words to some state senators.

"I am absolutely against changing the rules in the middle of the game," wrote Handy in an Oct. 19 e-mail about Strickland's proposal to delay the final 4.2 percent reduction in income taxes to close an $850 million budget gap.

"I am sure the vast majority of Ohioans agree with me in opposing this idiotic proposal ... If Ohio needs more money, STOP SPENDING! That's what budgets are for."

An Associated Press public records request for constituent correspondence to legislative leaders on the tax proposal found that most was fueled by organized interests — the anti-tax group Americans for Prosperity that opposed it, and school teachers and employees and mental health service providers that supported it.

Some Republicans have argued that because current law has the last tax cut in place and because withholding for the tax year has already started, Strickland's tax proposal is a tax increase.

But the relatively light feedback from constituents in comparison to other legislative issues, including the budget earlier this year, suggests that most Ohioans are not particularly inflamed by the tax talk.

Lawmakers considering what to do about the budget gap received both dry form letters distributed among like-minded individuals and more personal — and sometimes humorous — pleas.

"CUT SPENDING! That's what my husband and I are doing, that's what my neighbors are doing," wrote Alice Martin of Huron to Republican Senate President Bill Harris of Ashland on Oct. 20. "I'll bet your wife could explain it to you!"

Peg Carter fired off a few quick words when she was crunched for time.

"I don't have much time here at the library internet because I have ice cream in the car," Carter wrote guaranteed payday loans. "I do think that Ohioans who are still working, are able to accept a tax freeze — in light of your pay cuts — in order to provide help for those who have lost their jobs because of the economy."

The tax proposal approved by the Democratic-controlled House and pending in the Republican-controlled Senate includes a 5 percent pay cut for lawmakers.

Teachers and employees from several school districts used form letters, the most common e-mails sent to legislative leaders on the issue. Democratic lawmakers have said that delaying the tax reduction will protect school funding from both state and federal cuts, even naming the proposal the Education Funding Protection Act.

"My district cannot afford to lose state and federal funding," Debra McRoberts of Westerville told Harris in an Oct. 19 missive. "This will force our district to reduce learning opportunities for students and lead to further elimination of education employees."

The same letter was sent to Harris and House Speaker Armond Budish, D-Beachwood, from school personnel in Mount Vernon, Perrysburg, Sunbury, Shelby, Mansfield and other towns.

Many e-mails sent to Republican leaders opposing the tax proposal called it a "retroactive tax increase," a description the Strickland administration said is inaccurate. Several constituents said they received an e-mail from Americans for Prosperity describing it as "retroactive."

The state constitution bans retroactive laws. And Ohio Department of Taxation spokesman John Kohlstrand noted that "retroactive" is a legal term. He said a retroactive tax hike would be, for example, if lawmakers changed the tax rate for the 2008 tax year after that year is over.

Proposed delay of Ohio tax cuts spurs e-mails

NEW YORK (Reuters) – U.S. stocks added to gains in early trade on Monday, with the Nasdaq and S&P 500 rising 1 percent, after a pledge from the Group of 20 to keep economic stimulus in place bolstered risk appetite.

* Gains were broad-based, with natural resource-oriented companies and technology shares among the biggest advancers.

* The Dow Jones industrial average (.DJI) gained 80.64 points, or 0 payday loans.80 percent, to 10,104.06. The Standard & Poor&&9;s 500 Index (.SPX) rose 9.69 points, or 0.91 percent, to 1,078.99. The Nasdaq Composite Index (.IXIC) added 23.34 points, or 1.10 percent, to 2,135.78.

(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)

Stocks lifted by revived risk appetite

FORT LAUDERDALE, Fla. (AP) &<51; A Florida yacht broker who admitted filing a false federal tax return and concealing millions of dollars in a secret account at the Swiss bank UBS was sentenced Friday to two months in prison.

Judge James I. Cohn of Federal District Court in Fort Lauderdale, Fla., gave the broker, Robert Moran, credit for immediately confessing his crime and for assisting a broad federal investigation of tax evasion at UBS and other offshore banks. Judge Cohn also noted that Mr. Moran, a British-born United States citizen, had paid the $1.9 million in penalties and back taxes he owed.

But the judge said &S220;the public is weary&S221; of people trying to hide wealth from the Internal Revenue Service and rejected Mr. Moran&S217;s request for a sentence of probation only.

Mr. Moran is scheduled to report to prison Jan. 4. The United States Bureau of Prisons has not yet determined where he will serve his sentence, but Judge Cohn recommended that he be held in southern Florida.

In April, Mr. Moran became the first UBS client in the United States to plead guilty after the Swiss bank provided federal prosecutors with about 150 names of Americans suspected of tax evasion best payday advance. The bank later reached a second agreement that calls for disclosure of 4,450 additional United States taxpayers to the I.R.S.

Mr. Moran is the third former UBS client to be sentenced in the last two weeks in South Florida for filing false tax returns. One got house arrest and the other a short prison term. Seven former clients have been charged in the latest crackdown, and dozens more are under investigation.

Mr. Moran, president of Moran Yacht and Ship, which has offices in Fort Lauderdale and Moscow, will lose his yacht broker&S217;s license because of the felony conviction and faces an uncertain business future, Gary M. Bagliebter, his lawyer, said.

In remarks to the judge, Mr. Moran, 58, accepted full responsibility. He had about $3.5 million in his UBS accounts.

&S220;I&S217;m really sorry for opening this foreign bank account and not disclosing it,&S221; Mr. Moran said. &S220;I realize it was a mistake.&S221;

Yacht Broker Sentenced to 2 Months for Tax Evasion

Hot News: Chinas Premier Pledges $10 billion in Loans to Africa

NEW YORK (Reuters) – U.S. stocks jumped on Thursday, pushing the S&P 500 up for a fourth day, as economic data boosted confidence in the recovery and strong results from Cisco Systems (CSCO.O) suggested a rebound in technology spending.

The market&&9;s advance was broad-based, and the Dow ended above 10,000 for the first time in two weeks.

Shares of Cisco, which makes computer network equipment, rose 2.8 percent to &&6;23.93 and helped lead the session&&9;s gains, a day after it posted a stronger-than-expected profit and said business was recovering.

Data showed U.S. non-farm productivity rose more than expected in the third quarter as companies squeezed more output from a smaller pool of labor. A separate report showed fewer U.S. workers filed new jobless insurance claims than forecast last week -- hitting a 10-month low.

The claims report boosted investor sentiment, and created "some anticipation that maybe tomorrow&&9;s employment report may be better than expected," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

The U.S. government is scheduled to release its key monthly jobs report Friday morning, with economists polled by Reuters forecasting a loss of 175,000 jobs in October, sharply below the 263,000 jobs cut in the previous month. But the U.S. unemployment rate is forecast to rise to 9.9 percent in October from September&&9;s rate of 9.8 percent, which was a 26-year high.

The Dow Jones industrial average (.DJI) jumped 203.82 points, or 2.08 percent, to end at 10,005.96. The Standard & Poor&&9;s 500 Index (.SPX) gained 20.13 points, or 1.92 percent, to 1,066.63. The Nasdaq Composite Index (.IXIC) rose 49.80 points, or 2.42 percent, to close at 2,105.32.

CAFFEINE SHOT AFTER THE BELL

After the bell, shares of coffee chain operator Starbucks Corp (SBUX business card.O) rose 1.5 percent to &&6;20 as it posted quarterly results.

During the regular session, tech stocks climbed across the board, with the NYSE Arca Network index (.NWX) up 2.1 percent, while the PHLX Semiconductor index (.SOXX) advanced 2.6 percent.

Shares of DuPont (DD.N) rose 3.7 percent to &&6;33.38 after its chief executive outlined plans for growth in 2010 and after.

In deal news, IMS Health Inc (RX.N) agreed to be bought by TPG and CPP Investment board and helped lift the S&P Healthcare index (.GSPA) 1.6 percent. The deal was valued at &&6;5.2 billion, including the assumption of debt. IMS Health shares surged 23.3 percent to &&6;20.73.

On the downside was CVS Caremark Corp (CVS.N) , which tumbled 20.1 percent to &&6;28.87 after comments from Chief Executive Tom Ryan on weakness in the pharmacy benefit management business.

U.S. retail chains reported October sales that rebounded from the lows in the previous year, but more than half missed Wall Street&&9;s increased expectations as consumers spend selectively headed into the holiday season.

The S&P retail index (.RLX) rose 1.8 percent.

Volume was below average on the New York Stock Exchange, with 1.30 billion shares changing hands, below last year&&9;s estimated daily average of 1.49 billion, while on the Nasdaq, about 2.25 billion shares traded, just below last year&&9;s daily average of 2.28 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of 5 to 1, while on the Nasdaq, about seven stocks rose for every two that fell.

(Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

Stocks rally on economic data, Cisco