US STOCKS-Index futures off on China worries, France caution


* China growth slows more than expected* IBM falls after earnings fail to impress* Futures: Dow off 21 pts, S&P off 3.9 pts, Nasdaq up 11.25By Edward KrudyNEW YORK, Oct 18 (Reuters) - S&P 500 stock index futures eased modestly on Tuesday after a Moody’s warning on France’s credit rating and a slowdown in China’s growth revived concerns over a worsening debt crisis in Europe and a hard landing for Asian economies.* Adding to market anxiety, International Business Machines Corp’s quarterly results failed to impress investors used to a robust showing from the technology bellwether. That added to worries over lackluster corporate information technology spending. IBM shares fell 4.6 percent to $178 in premarket trade.* China’s economic growth slowed in the third quarter to its weakest pace since early 2009. Gross domestic product rose 9.1 percent in the quarter from a year earlier, but was down from 9.5 percent in the previous period.* Moody’s cautioned it may slap a negative outlook on France’s Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.* “Growth concerns in China along with renewed euro debt concerns are bringing some hesitation into the futures market,” said Andre Bakhos, director of market analytics at Lek Securities in New York. “However, investors are looking for some key earnings reports that could change investor perception.”* S&P 500 futures fell 3.9 points and were below 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 dropped 21 points, but Nasdaq 100 futures rose 11.25 points.* Investors awaited September’s Producer Price Index, due at 8;30 a.m. EDT (1230 GMT).* Corporate earnings remained in high gear, with results coming early Tuesday from Bank of America Corp .* Results are also due from Apple Inc , Intel Corp , Goldman Sachs Group Inc , and Johnson & Johnson.* U.S. planemaker Boeing Co predicted more sales cancellations for its delayed Dreamliner 787 after a Chinese airline scrapped 24 orders, but said the overall order book for the new long-range aircraft remained strong.* U.S. stocks suffered their worst loss in two weeks on Monday after comments from Germany’s finance minister renewed investor fears over Europe.

Protesters in Lisbon surround parliament


It was one of the biggest turn-outs in any country and followed the centre-right government’s announcement on Thursday of a new batch of austerity measures.More than 20,000 people marched in Lisbon from central Marques de Pombal square to surround the Sao Bento Palace housing the National Assembly.”This debt is not ours!” and “IMF, get out of here now!”, they chanted.Banners read: “We are not merchandise in bankers’ hands!” or “No more rescue loans for banks!”.A group of youths broke into the parliament shouting “Invasion, invasion!” Riot police brought the situation under control without any more violence than some pushing and shoving.About 20,000 people also rallied in Oporto, Portugal’s second city.The austerity measures included pay cuts in the public sector, which infuriated workers across the country. Debt-ridden Portugal had to impose tough tax hikes and spending cuts to meet its fiscal goals set under a 78-billion-euro EU/IMF bailout.”We are sick of always being the ones who pay the bill in this crisis. It’s never the banks, it’s always the people,” said 46-year-old construction worker Antonio Rui.”There is no lack of reasons for people to take to the streets and there’s a lot more people here today than we expected,” said Joao Labrincha, one of the organizers of the rally and coordinator of the “Precarious Generation” movement.”The prime minister just showed that he had lied when he promised that taxes would not rise and that holiday bonuses would not be cut. People feel betrayed by that,” he said.The country’s two main unions will meet on Monday to discuss future labour action to protest against the measures, and could call a general strike. Protests have been peaceful in Portugal so far and analysts generally do not expect the sort of violent strife as seen in Greece or Italy.

GLOBAL MARKETS-Stocks, euro rise on crisis hopes, US data


* Brent rises toward $113 on optimism over debt crisis* Euro extends gains against dollar after U.S. sales data* Bonds succumb to rising equity markets, retail sales (Adds fresh prices)By Herbert LashNEW YORK, Oct 14 (Reuters) - Global stocks gained and the euro strengthened on Friday on growing optimism that Europe is on track to resolve its festering sovereign debt crisis and after data showed a surprising surge in U.S. retail sales.Group of 20 finance ministers and central bank chiefs began two days of talks in Paris on Friday which investors hope will provide a basis for a draft plan in time for a European Union summit on Oct. 23. For details, see [ID:nL5E7L300R]The benchmark S&P 500 was on track for back-to-back weekly gains for the first time since early July and gold headed toward its strongest weekly rise in over a month.The euro rose 0.7 percent to $1.3866.”Right now we are trading on hopes of a decisive policy response,” said Jens Nordvig, head of G10 FX strategy at Nomura Securities in New York.To be sure, investors do not expect a comprehensive strategy to Europe’s debt crisis to come out of the meetings. But a report early in the session that said U.S. retail sales grew by 1.1 percent in September, the fastest pace in seven months, boosted investor sentiment on the economy’s prospects.The data, coupled with earnings from Google (GOOG.O) late Thursday that trounced analysts’ expectations, led investors to shrug off a rating downgrade on Spain by Standard & Poor’s and an unexpected slump in U.S. consumer confidence in October.The data also was expected to help lift forecasts for growth in gross domestic product even though investors said a resolution to Europe’s debt crisis was more important.”The data hasn’t mattered for a couple of months. It matters here and there, but most of what today is, is Europe,” said John Canally, investment strategist for LPL Financial in Boston.”Just getting the details of this plan out there and making the details work is the most important thing,” Canally said.Stocks on Wall Street pared some early gains but shares in Europe rose almost 1 percent.The Dow Jones industrial average .DJI was up 110.92 points, or 0.97 percent, at 11,589.05. The Standard & Poor’s 500 Index .SPX was up 13.76 points, or 1.14 percent, at 1,217.42. The Nasdaq Composite Index .IXIC was up 32.18 points, or 1.23 percent, at 2,652.42.Google shares jumped 5.8 percent to $591.43 after the Internet search giant said robust growth at its mobile business and a strong emerging market lifted its third quarter, allaying worries that a slowing Europe was hurting business. [ID:nN1E79B24M]In Europe, the FTSEurofirst 300 .FTEU3 index of top regional shares closed up 0.95 percent at 975.52 points, while MSCI’s all-country world equity index .MIWD00000PUS gained 1.1 percent.The increased appetite for risk also lifted the price of crude oil more than 3.0 percent and pushed down the U.S. dollar and government debt, usually beneficiaries of bearish news.”The outlook is good and getting better by the day. Risk is back on,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.Brent crude LCOc1 rose above $114 a barrel, propelled by hopes that European leaders would soon agree on how to curtail the long festering euro zone debt crisis. [ID:nL3E7LE0E5]Early hints that China may loosen credit as inflation cools also boosted gains while investors mostly ignored a preliminary reading of U.S. consumer sentiment that sagged to 57.5 from 59.4 in September, a Thomson Michigan survey showed.November Brent crude LCOc1 rose $3.56 to $114.67 a barrel on the day of its expiry, while U.S. crude CLc1 was up $2.47 at $86.70 a barrel.U.S. Treasury debt prices fell.The benchmark 10-year U.S. Treasury note US10YT=RR was down 13/32 in price to yield 2.23 percent.Spot gold prices XAU= rose $16.24 to $1,682.40 an ounce. (To read Reuters Global Investing Blog click here; for the MacroScope Blog click on blogs.reuters.com/macroscope; for Hedge Fund Blog click on blogs.reuters.com/hedgehub)

UPDATE 1-US should help more homeowners -Treasury official


While she stopped short of offering any new proposals, Mary Miller, assistant Treasury secretary, said low interest rates created room for greater action in housing, which has been at the epicenter of the struggling U.S. economy.”The housing crisis has been long and painful, and there’s still more work to be done,” Miller said in remarks prepared for deliver to the CFA Institute in Boston.She said the Obama administration “is interested in reviewing all of the barriers to refinancing” loans backed by Fannie Mae and Freddie Mac , the government-owned mortgage finance providers, in order to assist more homeowners realize savings.Any changes to the existing Home Affordable Refinance Program should not cause investors in mortgage bonds to get cold feet, she said. May investors have worried they could take a hit.”The terms of the HARP program have been known to the market since program inception, and should not introduce new issues,” Miller said.Investors in these securities have already enjoyed a much longer holding period than historical prepayment levels might have allowed, she added.Miller also addressed an initiative that housing regulators have floated to rent, sell or dispose of foreclosed homes controlled by Fannie Mae and Freddie Mac.”We think there is an opportunity to address the backlog of unsold homes by creating a process for moving real estate owned by the government to new private owners, with a particular interest in creating rental options,” Miller said.The Federal Housing Finance Agency put out a request for information to solicit the best ideas on how to accomplish sales of foreclosed homes to perhaps turn them into rental properties back in August. About 4,000 comment letters were received, Miller said.”Clearly there is interest here, and we look forward to supporting the FHFA as they move ahead,” she said.

CORRECTED-UPDATE 1-Celadon seeks takeover talks with USA Truck


In a regulatory filing, Celadon said it recently asked to meets USA Truck’s management to discuss a possible association between the companies, potentially including a combination of the two.Celadon, which has annual revenue of around $557 million, has not yet had talks with USA Truck and does not know whether the target firm would entertain any such discussions, it said.USA Truck, valued at $86 million, recently said it expected to post a third-quarter loss due to a significant decrease in the efficiency of its truckload operations.Its revenue last year was $387 million.Shares of USA Truck jumped 21 percent to $9.97 on Tuesday on Nasdaq. The stock had dropped sharply in late-August after the company warned of a weak third quarter.Celadon shares rose 4 percent to $9.66, a 3-week high.

ANALYSIS-Small ships to unlock rate boon for bulk owners


By Krishna N Das and Jonathan Saul BANGALORE/LONDON, Feb 8 (Reuters) – Dry cargo shippers with smaller vessels are shifting to more-risk, more-reward spot markets, eyeing rising demand for sugar and grains — commodities well suited to versatile supramax and handysize ships. Ship owners generally prefer long-term charters in a weak market. The Baltic Dry Index <.BADI> o-year lows in recent weeks but confidence has been rocked by South Korean dry bulk group Korea Line Corp <005880.KS> filing for bankruptcy protection, highlighting the risk of charter-party defaults. “Concerns now persist industry-wide, as speculation grows as to whether faults,” Deutsche Bank analyst Justin Yagerman said. “Continued charterer defaults could bring into question many companies’ above-market charters.” Flooding in Australia, the world’s biggest coal exporter, and weather-srupted coal shipments and dented sentiment for capesize vessels — the giants of seaborne trade routes, typically hauling 150,000 tonne cargoes such as iron ore and coal. Demand for grains, though, has soared. Wheat prices in the European Union, the world’s No.2 exporter, a year, aided by a Russian export ban due to drought and strong demand from North Africa and Middle East countries. Global food prices, which hit their highest level on record last month, is a mounting worry for world leaders. Recent catastrophic weather around the globe could put yet more pressure on the cost of food, an issue that has already helped spark protests across the Middle East. Egypt is the world’s biggest wheat importer. Eagle Bulk Shipping , which operates supramax vessels that typically have around half the capacity of a capesize, lowing them to haul a wider range of cargoes, has placed half its ships in the spot market. That strategy has been welcomed by investors, and Eagle Bulk Shipping’s price-to-earnings ratio of almost 35 is the highest among its peers, Thomson Reuters StarMine data shows. “We prefer smaller vessels due to the more favorable supply dynamics, more diverse cargo loading options, record spot fixture activity for the last five months due to a recovering worldwide economy, and the increasing ton-mile in the grain trade,” FBR analyst Doug Garber said in a note. Genco Shipping and Trading could be another to gain from a near-term rebound in day rates — the cost of renting a ship by the day — as it has roughly half its 2011 days in open or linked-to-index charters. Conversely, Diana Shipping , DryShips , Navios Maritime Partners LP and others whose fleets are dominated by bigger ships, have placed more vessels in long-term contracts, hoping for steady returns. Diana and DryShips trade at just above 5 and 8 times forward earnings, respectively. Iron ore and coal are the main drivers of the dry bulk trade, accounting for some two-thirds of demand, but both are highly dependent on China, making the shippers that own bigger vessels more vulnerable to demand swings in the world’s biggest commodity consumer. Sterne Agee expects Baltic Dry Index spot rates to drop 16 percent this year and 9 percent in 2012, noting these declines will be hardest felt by those owning capesizes, where fleet growth is seen at 17 percent this year and 14 percent in 2012. For capesizes, the brokerage forecast a 25 percent fall in spot rates this year to below $25,000 a day. Only three years ago, owners of these vessels could charge day rates in excess of $100,000 a day. Supramax rates are seen dropping about 7 percent to $20,845. “The largest part of the order book concerns the larger ships, the capes. It is actually the capes that are of a bigger concern to everybody in the industry,” said Michael Bodouroglou, chairman and CEO of Greece’s Paragon Shipping Inc , which has smaller supramax and handymax vessels among its fleet. “The panamaxes, the supramaxes and in particular the handies I think they will fare a lot better particularly in the second quarter which is the season where the grain trades pick up from South America etc — these are trades which are accommodated in the smaller sizes,” he told Reuters. The Baltic capesize Index <.BACI> has fallen by two-thirds in the past 3 months to its lowest in more than 2 years. Rates for supramax vessels were faring slightly better, though the Baltic’s supramax index <.BASI> has dropped by a quarter in the last 3 weeks. “In the next few months, a moderate amount of cargo demand is likely to continue to surface, which is likely to result in supramax and handysize rates remaining at healthy levels,” said Jeffrey Landsberg, managing director of dry bulk consultancy Commodore Research. “Global grain demand remains strong and will lend support to rates once the South American export season kicks in to full gear.”