Global Investing News Briefs

CVC Buys Barclays’ iShares for $4.4 Billion; Larry Summers: “Free Fall” Ending Within Months; IBM Best in India IT; Wal-Mart Misses Estimates; Jobless Claims Down; GM May Reduce Offer to Bondholders; KC Fed Prez: Hoenig: Banks Won’t Need More Bailouts; Trustee for Madoff Clients Wants $150 Million Back; Dow Logs Fifth Week of Gains

  • Barclays Plc (BCS) has agreed to sell its iShares unit to CVC Capital Partners Ltd. for $4.4 billion, but retain a 20% stake in the exchange-traded fund (ETF) vehicle, Bloomberg reported. The United Kingdom’s third-largest bank was in desperate need for capital after refusing government financing to avoid nationalization.
  • White House economic advisor Lawrence Summers said stimulus and financial rescue efforts will lift the U.S. economy from its “free fall” within a few months. Speaking to the Economic Club of Washington, Summers also said that unemployment may continue to rise and that the economy needs to reach a 2.5% growth rate to remain stable, Reuters reported. 
  • International Business Machines Corp. (IBM) has expanded its information technology operations in India, capturing the top spot in the country’s IT market, Bloomberg reported. And as India’s economy reaccelerates, IBM’s efforts may prove more profitable. “They’ve beaten their competition relatively handily,” Kaufman Bros.’s Karl Keirstead told Bloomberg. “There’s a cachet in using IBM.”
  • Wal-Mart Stores Inc. (WMT) missed March sales estimates, saying it was hurt by Easter (and its accompanying sales) arriving in April this year compared to March last year. Comparable sales for U.S. stores rose 0.6%, well below its 3.3% target, MarketWatch reported.
  • Initial claims for state unemployment insurance benefits fell to a seasonally adjusted 654,000 last week, from 674,000 the week before, the Labor Department said yesterday (Thursday).  But workers staying on benefit rolls after drawing an initial week of aid jumped to a record 5.84 million in the week ended March 28 from 5.75 million the prior week.
  • General Motors Corp. (GM) will make a new offer to bondholders for a debt restructuring that may be far worse than terms the automaker had provided previously, CNBC reported yesterday (Thursday).  CNBC said it had learned that a new offer may include no cash, no new debt and perhaps as little as 10% to 20% equity in the company, much less than its previous offer which included cash and up to 90% of GM equity.
  • U.S. banks are unlikely to need more taxpayer money, Federal Reserve Bank of Kansas City President Thomas Hoenig said yesterday (Thursday).  Hoenig said government stress tests of banks’ ability to withstand a deeper recession will indicate the banks can make do on their own in the future, Bloomberg reported. Hoenig repeated his view that the government shouldn’t prop up failing financial institutions.
  • Irving Picard, the trustee liquidating Bernard Madoff's brokerage, filed a lawsuit yesterday (Thursday) seeking the return of $150 million the firm transferred to an offshore investor in October, Reuters reported.  Picard is ramping up efforts to use bankruptcy law to try to "claw back" funds taken by Madoff’s clients that he says should be returned and used to help compensate other customers of the jailed swindler.
  • U.S. stocks jumped higher yesterday (Thursday), with the Dow Jones Industrial Average logging its first five-week stretch of gains since October 2007. The Dow rose 246.27 points, or 3.1%, to finish at 8,083.38, up 0.8% for the week. The Standard & Poor’s 500 Index added 31.40 points, or 3.8%, to end at 856.56, a 1.7% rise from last Friday's close. And the Nasdaq Composite Index climbed 61.88 points, or 3.9%, to 1,652.54, a weekly rise of 1.9%.