Finance Blog number 1

Drugmaker Merck says it has received a subpoena from federal prosecutors investigating the company’s marketing of three drugs acquired through its 2009 acquisition of Schering Plough.

Merck & Co. Inc. disclosed the request for information from the Department of Justice in a regulatory filing Monday morning. The government is investigating marketing and selling of the brain cancer drug Temodar and hepatitis C drugs PegIntron and Intron A. The probe involves company activities between 2004 and today. Merck, based in Whitehouse Station, New Jersey, said it is cooperating with the government.

Merck and Schering Plough completed their merger in November 2009.

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A car bomb outside a Christian church wounded 23 people on Tuesday morning, police said, as security forces found and disabled vehicles packed with explosives outside two other parishes in northern Iraq.

The bombing and the two averted attacks in the northern city of Kirkuk signal continued violence against Iraqi Christians, nearly 1 million of whom have fled since the war began in 2003.

“The terrorists want to make us flee Iraq, but they will fail,” said the Rev. Haithem Akram, the priest of one of the churches that was targeted. “We are staying in our country. The Iraqi Christians are easy targets because they do not have militias to protect them. The terrorists want to terrorize us, but they will fail.”

The assault began at 6 a.m., when the car blew up outside the Syrian Catholic church, severely damaging the church and nearby houses, said police Col. Taha Salaheddin.

The parish’s leader, the Rev. Imad Yalda, was the only person inside at the time of the blast and was wounded. The 22 other wounded were people whose nearby homes were hit by the blast, said Kirkuk police chief Maj. Gen. Jamal Tahir cash advance today.

Following the blast at the Syrian Catholic church, police discovered two more car bombs parked outside the Christian Anglican church and the Mar Gourgis church, both in downtown Kirkuk.

The ethnically and religiously mixed city of Kirkuk is located 180 miles (290 kilometers) north of Baghdad. Sunni extremists often target Christians who are seen as unbelievers.

Violence against Christians stepped up late last year, climaxing in the Oct. 31 siege of a Catholic cathedral in downtown Baghdad that left 68 dead and scored wounded when al-Qaida suicide bombers held worshippers hostage for hours before detonating their explosives belts.

Since then, the Vatican and the U.S. Congress have pleaded for Iraq’s government to do more to protect Christians in Iraq.

A State Department report says Christian leaders estimate that 400,000 to 600,000 Christians remain in Iraq, down from a prewar level of as high as 1.4 million by some estimates.

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Drugmaker Bristol-Myers Squibb Co. said Thursday that its second-quarter profit fell nearly 3 percent due to higher taxes and increased costs for production, marketing and administration. Those were partly offset by a 14 percent jump in sales.

The company, which sells blockbuster blood thinner Plavix, still beat Wall Street expectations, and it increased its earnings-per-share forecast for 2011 by 8 to 10 cents.

New York-based Bristol-Myers said net income was $902 million, or 52 cents per share, down from $927 million, or 53 cents a share, a year earlier. Excluding a total of $69 million in one-time restructuring and licensing charges, it would have made 56 cents per share.

Analysts surveyed by FactSet were expecting, on average, 55 cents per share and revenue of $5.05 billion.

Revenue totaled $5.43 billion, up from $4.77 billion in 2010’s second quarter, on strong increases for most drugs and encouraging initial sales for a new cancer medicine.

“This performance demonstrates the success of our biopharma strategy in delivering short-term results and in positioning the company for the future,” Chief Executive Lamberto Andreotti said in a statement.

The company raised its full-year profit forecast to $2.08 to $2.18 per share, or $2.20 to $2.30 per share excluding one-time items. In January, it gave a forecast of $2 to $2.10 per share, or $2.10 to $2.20 excluding one-time items.

Bristol also confirmed its forecast of $1.95 per share, excluding one-time items, for 2013. That’s the first full year after generic competition starts slashing Plavix revenue.

Andreotti noted the company has had three new products approved in three months: just-launched Yervoy for advanced skin cancer, Nulojix for preventing rejection of transplanted kidneys and Eliquis, an anticlotting drug approved in Europe for preventing dangerous blood clots after knee or hip replacement surgery. Bristol and partner Pfizer Inc. plan to apply for U.S. approval of Eliquis later this year.

Top seller Plavix, which faces generic competition next May, had sales jump by 15 percent to $1.87 billion, and bipolar disorder treatment Abilify rose 12 percent to $706 million. Rheumatoid arthritis drug Orencia, Baraclude for hepatitis B and Sprycel for leukemia were all up by more than 25 percent, for a total of $713 million. Yervoy brought in $95 million.

But blood pressure drugs Avapro and Avalide, hurt by supply problems that have been mostly resolved, saw sales drop 18 percent to $251 million.

The company’s tax rate jumped to 27 percent, from 20.4 percent a year ago, boosting income taxes to $483 million.

For the first six months, Bristol-Myers reported net income of $1.89 billion, or $1.10 per share. That was up 13 percent from $1.67 billion, or 96 cents per share, in the first half of 2010. Revenue was up 9 percent, to $10.45 billion from $9.58 billion.

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Eurozone leaders are moving closer to signing off on a second bailout for Greece but markets are fretting that any deal that emerges later Thursday may imply a Greek debt default after a plan to slap a tax on banks appears to have been shelved.

Reaching a deal _ it had looked unlikely earlier this week _ became easier after Germany and France agreed on a common position on how to get banks and other investors to share the burden of a second rescue during last-ditch talks in Berlin Wednesday.

The offices of German Chancellor Angela Merkel and French President Nicolas Sarkozy did not release any details on their common plan, but the prime minister of Luxembourg said it was unlikely to include a tax on banks to help pay for the second rescue package.

“I have the impression that there is no agreement on a banking tax,” Jean-Claude Juncker, who as the chairman of the Eurogroup is one of the key officials of the currency union, said as he arrived in Brussels.

Juncker’s comments sparked a bout of euro selling in the markets, as investors now think that any private sector involvement may well mean that the credit rating agencies will consider that Greece will be in default of its debts. By late morning, the euro was 0.8 percent lower at $1.4150, having earlier traded above $1.42.

Juncker conceded that the final deal could well see the agencies slapping a “selective default” rating on the country.

That could trigger fresh financial turmoil, especially if the European Central Bank insists on cutting Greek banks from emergency support, as it threatened to do if the country is considered to be in default.

Leaders have been struggling to find an agreement that makes sure that banks and other private investors help pay for a bailout, without triggering panic on financial markets that the crisis could spread to larger economies like Spain or Italy.

Juncker also said that any deal should include more “flexibility” for the currency union’s bailout fund. Such flexibility is usually shorthand for lower interest and longer maturity for bailout loans as well as wider powers for the fund, such as the ability to buy up distressed bonds.

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Stock markets are opening sharply lower amid fresh fears about the global economy and ahead of the start of earnings season.

The Dow Jones industrial average is down 119 points, or 0.9 percent, at 12,537, in opening trading. The Standard & Poor’s 500 index is down 14, or 1.0 percent, at 1,330. The Nasdaq composite is down 29, or 1.0 percent, at 2,830.

Worries about possible European debt defaults have spread beyond Greece, Ireland and Portugal to Italy and Spain cash advances pay day loan. New concerns also arose about the U.S. where lawmakers face an Aug. 2 deadline to avoid an unprecedented U.S. debt default.

A report Friday saying far fewer jobs than expected were added in June compounded fears that the U.S. economy was in worse shape than economists thought.

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A strong earthquake with a magnitude of 7.1 has hit off the northeast Japan coast, prompting a tsunami warning.

The quake hit at 9:57 local time (0057 GMT) and a warning of a possible tsunami was issued for most of the northeastern coastline. The epicenter of the quake was in the Pacific Ocean off the coast of Japan’s main island, Honshu.

Japan’s northeast coastline was devastasted by an earthquake and tsunami on March 11 that left nearly 23,000 dead or missing and touched off a nuclear crisis at a badly damaged facility in Fukushima.

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The banks that are most important to global financial stability will be required to hold extra capital on their balance sheets to protect them _ and the global economy _ from financial crises under new rules proposed Saturday.

Global central bank heads have proposed rules that would require the world’s biggest banks to hold an extra 1 percent to 2.5 percent of capital on their balance sheets, depending on their size. The goal of requiring larger cash buffers is to prevent another shock to the global financial system like the one that occurred in 2008 when Lehman Brothers collapsed.

The rules were proposed by the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision. The committee is part of the Bank for International Settlements, an umbrella organization for the world’s central banks.

The cash buffers that giant global banks would have to hold would be in addition to an existing requirement that all banks hold 7 percent of their assets in reserve.

The Group of Governors said in a statement Saturday that the proposed requirements would discourage banks from becoming so big that their failure could destabilize the global financial system.

“This will contribute to enhancing the resiliency of the banking system and help mitigate the wider spill-over risks of global systemically important banks,” Jean-Claude Trichet, President of the European Central Bank and chairman of the Group of Governors, said in a statement.

Banks would have three years, from the beginning of 2016 until the end of 2018, to meet the new requirements.

The Group of Governors also agreed on a method for determining banks’ importance to the banking system, though it did not disclose details. The group said its package of recommendations would be announced near the end of July.

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European stocks were helped Friday by an easing in tensions over Greece’s debt crisis after a big Cabinet reshuffle and suggestions that Germany has softened its stance over the need for private creditors to shoulder a part of a second Greek bailout.

The centerpiece of Prime Minister George Papandreou’s wide-ranging Cabinet reshuffle was the appointment of long-time rival Evangelos Venizelos to finance minister and deputy prime minister.

Papandreou will be hoping that the move brings an end to a damaging 48-hour political crisis that raised fears that Greece could run out of money in less than a month.

The reshuffle came after a seven-hour meeting between Socialist lawmakers and Papandreou on Thursday, at which they demanded that the prime minister remove inexperienced loyalists from the Cabinet and replace them with more experienced party veterans, mostly in their late-50s.

The hope in the markets is that Papandreou has done enough to get austerity measures through Parliament, which are necessary for the country to get more bailout funds.

Further relief came from news that Germany may be backing off from its tough stance to get private creditors to take their share of any future second bailout of Greece.

In a press conference with French President Nicolas Sarkozy, Germany Chancellor Angela Merkel agreed that private investors should be part of the solution but that their participation had to be on a “voluntary” basis.

“Markets are currently taking this as a positive step,” said UBS analyst Chris Walker.

In Europe, the FTSE 100 index of leading British shares was up 0.3 percent at 5,713 while Germany’s DAX rose 0.7 percent to 7,156. The CAC-40 in France was 1.1 percent higher at 3,835.

Greek stocks were doing particularly well, with the main ATHEX index up 3.6 percent.

Wall Street was poised for a solid opening, too _ Dow futures were up 0.7 percent at 11,976 while the broader Standard & Poor’s 500 futures rose 0 personal loans for people with bad credit.8 percent to 1,273.

The euro was also a big gainer, climbing 0.5 percent on the day to $1.4284. On Thursday, it had fallen below $1.41 for the first time in three weeks as investors fretted about a possible Greek debt default.

Greece’s debt crisis has been the main driver in markets this week, but with a seemingly calmer mood Friday, investors may turn to U.S. economic data later for more direction. A run of weak U.S. economic news has weighed on stock markets over the past few years.

The University of Michigan’s monthly consumer confidence survey could well be a catalyst to how markets end the week. The consensus in the markets is that the headline index will rise modestly to 74.5 in June from the previous month’s 74.30.

“Any signs of improving demand from U.S. consumers would have wide reaching implications and the hope is that with oil prices tumbling, lower petrol costs will free up cash for discretionary spending,” said Ben Critchley, senior sales trader at IG Index.

Oil prices continued to push lower Friday, with the benchmark rate on the New York Mercantile Exchange down another $1.22 to $93.76 a barrel.

Earlier in Asia, before the reshuffle and the German comments, stocks pushed lower.

Japan’s Nikkei 225 index closed 0.6 percent lower at 9,351.40 while Hong Kong’s Hang Seng index fell 1.2 percent to 21,695.26.

Mainland Chinese shares fell to their lowest level so far this year as investors reacted to news of a rise in the rate for Chinese central bank’s three-month bills on Thursday, seen as a cue that an interest rate hike may be in the offing.

The Shanghai Composite Index fell 0.8 percent to 2,642.82, while the Shenzhen Composite Index fell 1.1 percent to 1,085.11.

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Pamela Sampson in Bangkok contributed to this report.

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Portugal’s Social Democrats unseated the Socialist government in an emphatic election victory Sunday, according to projections, giving the center-right party a strong mandate to enact a grinding austerity program amid a euro78 billion ($114 billion) bailout expected to pitch the country into deep recession.

Jose Socrates, the Socialist leader and the country’s prime minister for the past six years, conceded defeat long before official results were in.

“The Socialist Party lost these elections,” Socrates said in a speech, adding he would resign as party leader.

The Social Democratic Party collected between 38 and 42.5 percent in the ballot compared with about 25-29 percent for the center-left Socialists, according to an exit poll by broadcaster TVIndependente.

State broadcaster RTP’s projections were broadly similar, while the S.I.C channel gave the Social Democrats 40-41 percent and the Socialists 28-29 percent.

The Social Democrats had asked for a clear endorsement at the ballot box that would give them a strong mandate to make tax hikes and welfare cuts and introduce longer-term economic reforms such as making it easier to hire and fire workers _ a proposal parties on the left have balked at.

However, the result would leave the Social Democrats just shy of an absolute majority in the 230-seat Parliament where it will need approval for its policies.

Social Democrat leader Pedro Passos Coelho, probably the country’s next prime minister, may invite the smaller, conservative Popular Party to form a coalition government and bolster his party’s parliamentary support. The Popular Party was projected to come third with 11-14 percent.

Turnout was around 60 percent, the projections said, in line with recent elections.

As in Ireland, where the governing party lost heavily in an election after taking a bailout, the Socialists who have been in power for the past six years appeared to pay heavily for the country’s economic downturn.

The winner faces the formidable task of trying to nurse the debt-wracked country of 10.6 million back to financial health after a decade of negligible growth when it borrowed more than it could afford.

The next government inherits a record jobless rate of 12.6 percent and an anticipated economic contraction of 4 percent over the next two years in what is already one of Europe’s poorest countries. Necessary welfare and pay cuts, tax hikes and promises of strikes from trade unions will also present tough challenges.

Given its continuing difficulties, Portugal still hasn’t escaped the possibility of a financial catastrophe.

The new government must move quickly to enact more than 200 measures over the next two years, cutting expenditure and reforming social and economic sectors in accordance with the bailout terms. At the same time, it has to find a way to engineer the fresh growth that will allow it to free itself from debt in the long term.

Any sign that Portugal is not abiding by the terms of its bailout agreement with its eurozone partners and the International Monetary Fund will likely add fuel to Europe’s debt crisis. There are already signs of bailout fatigue among the continent’s wealthier nations, with Greece’s financial future remaining uncertain as its original bailout appears too small.

With reforms billed as vast changes in Portuguese expectations and way of life, keeping the political peace in Portugal won’t be easy.

The election _ the country’s second in two years _ came after months of political squabbles over how best to reduce the debt burden. Opposition parties refused to accept the Socialist government’s austerity plans, prompting the administration to resign and worsening Portugal’s financial plight.

All three main parties gave their blessing to the bailout deal, though they differ over how to meet the debt targets and other issues such as the possible privatization of public services.

The Portuguese Communist Party and its like-minded rival the Left Bloc, which are each projected to get less than 10 percent of the vote, have fought against the bailout demands but could potentially support the Socialists in Parliament against a right-of-center coalition.

The left-of-center parties are especially disinclined to accept reforms which scrap long-standing welfare entitlements and make it easier to hire and fire workers _ a measure the Social Democrats views as crucial.

Luisa Diogo, a 56-year-old high-school teacher, said the country’s near future is already mapped out and she felt “sad and powerless” while facing years of hardship.

“Europe is changing. All those postwar policies designed to give dignity to the old, the infirm and the unemployed are being taken away,” she said after voting in Lisbon.

The Bank of Portugal has predicted that economic hardship will be “particularly severe” in coming years, with an “unprecedented” drop in family income.

Over the past decade Portugal recorded average annual growth below 1 percent. It took advantage of cheap loans as a member of the 17-nation eurozone to build up debt, which financed its western European lifestyle of welfare entitlements and job security.

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NEW YORK, N.Y.