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SAN FRANCISCO — After months of feverish speculation, Steven P. Jobs introduced Wednesday what Apple hopes will be the coolest device on the planet: a slender tablet computer called the iPad.

For all the hoopla surrounding it, however, the question is whether the iPad can achieve anything close to the success of the iPhone, which transformed the cellphone and forced the industry to race to catch up.

Apple is positioning the device, some versions of which will be available in March, as a pioneer in a new genre of computing, somewhere between a laptop and a smartphone. “The bar is pretty high,” Mr. Jobs acknowledged. “It has to be far better at doing some key things.”

Half an inch thick and weighing 1 1/2 pounds, the device will vividly display books, newspapers, Web sites and videos on a 9.7-inch glass touch screen. Giving media companies another way to sell content, it may herald a new era for publishing.

But the iPad, costing $499 to $829, also lacks some features common in laptops and phones, as technology enthusiasts were quick to point out. To its instant critics, it was little more than an oversize iPod Touch. A camera is notably absent, and Flash, the ubiquitous software that handles video and animation on the Web, does not work on the device.

Another thing missing is an alternative to the AT&T data network, which is already buckling under the strain of traffic to and from iPhones. Some versions of the iPad can, for a monthly fee, use a 3G data connection like cellphones, but the only carrier mentioned was AT&T.

The event, in typical Apple style, was tightly scripted and heavy on theatrics. Mr. Jobs, a consummate showman, presented the iPad to an enthusiastic crowd of around 800 employees, business partners and journalists. It was only his second public appearance since an absence last year for health reasons.

Mr. Jobs posited that the iPad was the best device for certain kinds of computing, like browsing the Web, reading e-books and playing video.

The iPad “is so much more intimate than a laptop, and it’s so much more capable than a smartphone with its gorgeous screen,” he said in presenting the device to a crowd of journalists and Apple employees here. “It’s phenomenal to hold the Internet in your hands.”

One question Apple faces is whether there is enough room for another device in the cluttered lives of consumers.

“I think this will appeal to the Apple acolytes, but this is essentially just a really big iPod Touch,” said Charles Golvin, an analyst at Forrester Research, adding that he expected the iPad to mostly cannibalize the sales of other Apple products.

Mr. Colvin said book lovers would continue to opt for lighter, cheaper e-readers like the Amazon Kindle, while people looking for a small Web-ready computer would gravitate toward the budget laptops known as netbooks.

But other analysts say they have heard similar criticism before — once aimed at the iPhone, which has now been bought by more than 42 million people around the world. These believers say Apple’s judgment on the market is nearly infallible.

“The target audience is everyone,” said Michael Gartenberg, vice president for strategy and analysis at Interpret, a market research firm. “Apple does not build products for just the enthusiasts. It doesn’t build for the tens of thousands; it builds for the tens of millions.”

Apple says the iPad will run the 140,000 applications developed for the iPhone and the iPod Touch, but the company expects a new wave of programs tailored to the iPad no fax pay day loans. Michel Guillemot, the chief executive of Gameloft, said he was looking forward to developing a catalog of games exclusively for the device.

“This will provide a gaming experience that has never been achieved before,” Mr. Guillemot said after demonstrating Nova, a shoot-’em-up game for the iPad. “For the first time, we have a large, high-definition screen that is truly mobile. This is only the starting point.”

One of the most significant applications for the iPad may be Apple’s own creation, called iBooks, an e-reading program that will connect to Apple’s new online e-bookstore.

Mr. Jobs said Apple so far had relationships with five major publishers — Hachette, Penguin, HarperCollins, Simon & Schuster and Macmillan — and was eager to make deals with others. Publishers will be able to charge $12.99 to $14.99 for most general fiction and nonfiction books.

Apple’s announcement that it was diving into the growing e-book business put the company on a collision course with Amazon. Mr. Jobs credited Amazon with pioneering e-readers with the Kindle but said “we are going to stand on their shoulders and go a little bit farther.”

John Doerr, a Silicon Valley venture capitalist who serves on Amazon’s board and is also an adviser to Apple, said there could be room for both companies, noting that Amazon sells many books to iPhone owners who use its Kindle application, which will also work on the iPad.

“I don’t think Jeff Bezos is going to leave the e-book business,” he said, referring to Amazon’s chief executive, “and I don’t think it will be confined to the Kindle.”

Three models of the iPad, $499 to $699, will connect to the Internet only via a local Wi-Fi connection. Three other versions will include 3G wireless access and will be available later in the spring, costing an additional $130 and requiring a data plan from AT&T. Owners of the iPhone who already pay at least $70 a month to AT&T will not be getting any breaks.

Other companies have sold tablet computers for years, but they never caught on with consumers. In 2001, Bill Gates predicted at an industry trade show that tablets would be the most popular form of PC sold in America within five years.

“The fact that he and Microsoft didn’t deliver is surprising,” said Tim Bajarin, a longtime industry analyst. “It has taken Apple to bring this to consumers and make it work.”

Apple has been working on a tablet computer for more than a decade, according to several former employees. Improved technology has helped the company to finally bring a model to market, as has the ubiquity of wireless networks.

The success of the iPhone and its cousin, the iPod Touch, have shown a path for tablets. People have been willing to pay to customize those devices with applications, turning them into video game machines, compasses, city guides and e-book readers.

The iPad will be a big opportunity for software developers, said Raven Zachary, president of Small Society, an iPhone development company based in Portland, Ore. “Although I think some of us were a bit surprised we only have 60 days until it launches to develop for it.”

Jenna Wortham contributed reporting from New York.

iPad Blurs Line Between Devices

SAN FRANCISCO -- Oil futures turned modestly higher Wednesday as investors assessed the latest reports on oil and refined product inventories. Oil for March delivery, which had remained lower for much of the morning session as equities floundered, recently traded 12 cents higher at $74.83 a barrel. Heating oil and gasoline futures also gained, while natural gas fell. The Energy Information Administration said midmorning crude oil inventories fell last week, contrasting with a supply gain forecast by analysts . But gasoline inventories rose slightly more than expected and distillate supplies also gained, at odds with an expected drop in the supplies that include heating oil.

Oil Edges Higher In Choppy Trading

FORT LAUDERDALE, Fla. – Citrix Systems Inc. on Wednesday posted a 47 percent jump in fourth-quarter profit as sales rose across all its business lines.

But the company, which provides software and equipment for streamlining computer systems, issued a forecast at the low end of Wall Street expectations, and shares fell in after-hours trading.

Citrix said net income for the final three months of 2009 rose to $88.1 million, or 47 cents per share, from $60.1 million, or 33 cents per share, in the 2008 fourth quarter. There were about 2 percent more shares outstanding in the 2009 quarter, which slightly reduced per-share results.

Adjusted for expenses related to acquisitions, restructuring and stock-based compensation, the company said it earned $123 million, or 66 cents per share in the 2009 fourth quarter.

Revenue rose 9 percent to $451.2 million, from $415.7 million in the year-earlier period.

Analysts polled by Thomson Reuters, on average, expected profit of 52 cents per share, on revenue of $431.5 million. Those estimates did not reflect stock-based compensation expenses, and analysts typically exclude other one-time items from their forecasts.

Citrix said product license revenue increased 4 percent to $168.3 million. Revenue from license updates rose 6 percent to $156.4 million.

Online services revenue grew 18 percent to $82 million. It's smallest unit, technical services, which is comprised of consulting, education and technical support, had revenue growth of 20 percent, to $44.5 million.

On a geographic basis, revenue increased in the Americas region by 7 percent, in Europe, the Middle East and Africa by 3 percent, and in the Pacific region by 21 percent payday loans online.

For the year, Citrix earned $191 million, or $1.03 per share, up 7 percent from $178.3 million, or 96 cents per share in 2008. Annual revenue rose 2 percent to $1.61 billion, from $1.58 billion the prior year.

Citrix forecast first-quarter profit between 23 cents and 25 cents per share. Adjusted profit is expected to fall at 39 cents to 40 cents per share.

The company expects first quarter revenue in the range of $405 million to $410 million.

Analysts, on average, expect profit of 40 cents per share, with estimates falling between 34 cents and 45 cents. Wall Street projects revenue for the quarter at $403.8 million, with estimates ranging from $395.8 million to $421 million.

For the full year, Citrix predicted a profit of $1.33 to $1.34 per share, and adjusted profit in the range of $1.87 to $1.90 per share. Revenue is expected to fall between $1.74 billion to $1.76 billion.

The average full-year profit estimate from analysts is $1.88 per share, with forecasts ranging from $1.77 to $2.10. Wall Street expects full-year revenue of $1.74 billion, with estimates ranging between $1.71 billion and $1.82 billion.

In aftermarket electronic trading, Citrix shares fell 98 cents, or 2.3 percent, to $41.00. The stock closed regular trading down 10 cents at $41.98, and has ranged between $20 and $44.01 in the past 52 weeks.

Citrix Systems posts 47 percent jump in 4Q profit

SAN FRANCISCO -BMC Software late Wednesday reported its fiscal third-quarter net income rose to $110.7 million, or 59 cents a share, from a gain of $83.8 million, or 44 cents a share, in the same period last year. Excluding one-time items, the company would have reported earnings of 76 cents a share in the latest quarter. Revenue increased to $508.1 million from $488 free business cards.4 million last year. Analysts surveyed by FactSet Research estimated a profit of 55 cents a share on revenue of $492.5 million for the software company. BMC expects adjusted full-year earnings of $2.64 to $2.72 a share.

BMC Gains $110.7 Mln Profit In Third-quarter

HONG KONG — Shares in Rusal, the aluminum giant controlled by Russian oligarch Oleg V. Deripaska, plunged 11 percent in their trading debut in Hong Kong on Wednesday, weighed down by a market slump that has seen many of the world’s leading stock indexes fall below where they began the year.

Rusal raised $2.2 billion in the initial public offering last week, making it the largest in many months in Hong Kong. The I.P.O., the first in Hong Kong this year, is also the first primary listing for a non-Asian company in the city, which emerged as one of the biggest I.P.O. venues last year thanks largely to a flurry of listings from Chinese companies.

A number of Russian companies, particularly those operating in relative geographic proximity to China in Siberia, or selling commodities across the border, are eager to follow Rusal’s lead and also tap Chinese capital markets. These include the Russian state railroad, which operates the only rail line from the Far East to Europe.

Rusal, caught up in tortuous debt-restructuring negotiations last year that were among the largest in Russian history, eventually managed to get the go-ahead for a listing after regulatory hold-ups pushed the timing into 2010.

A number of high-profile investors, including the New York hedge fund manager Paulson & Co. and Nathaniel Rothschild, the European banking family heir, bought into the offering. But concerns over Rusal’s debt pile of $14.9 billion and other risks prompted the Hong Kong Securities and Futures Commission to limit the company’s share purchases to batches starting at 1 million Hong Kong dollars, or $129,000, to discourage small investors from the offering.

Rusal shares finished their first day of trading at 9.66 Hong Kong dollars, below the I.P.O. price of 10.80. Speaking to reporters in Hong Kong on Wednesday, Mr. Deripaska said the performance was “reasonable” in light of recent global market declines, Reuters reported.

The Rusal I.P.O. price was set Friday before mining and metals shares swooned globally, said Mark Rubenstein, a deputy chief analyst at Metropol in Moscow, and by the time of the stock started trading the drop was expected. It should not weigh against the broader strategy of Russian companies trying to sell their shares in Hong Kong, he said.

“That it was placed successfully, that is important,” he said. “If it moves in line with the market, that is all it needs to do.”

The theory, popular now with Russian companies, is that Chinese investors are eager to invest in Russian mines and oil companies but had been reluctant to put money into the sometimes murky Russian stock exchanges low fee payday loans. That is attracting to Hong Kong Russian companies that might previously have sought to list in London or New York. China last year surpassed Germany as Russia’s largest trading partner.

Russian Railways, the world’s largest railway company and operator of the Trans-Siberian railway connecting Asia to Europe, is considering taking two subsidiaries public and could list in Hong Kong, an adviser to the company said. Along with Russian Railways, Ilyushin Finans, an aircraft leasing company partially owned by the Russian financier Aleksandr Lebedev, is also considering listing in Hong Kong to raise about $200 million, according to a spokesman.

“Clearly, there’s a trend of Russians discovering Asia,” Dimitry Afanasiev, a lead attorney for Rusal who negotiated the listing in Hong Kong, said in a telephone interview Wednesday. “And Asians are slowly warming up their feet to deal with the Russians.”

The overall Hong Kong market staged a sixth successive day of declines Wednesday, with the Hang Seng index dropping 0.4 percent.In mainland China, the Shanghai Composite index dropped 1.1 percent, dragged down by continued nervousness about the Chinese authorities’ efforts to rein in bank lending in a bid to quash inflation.

Those concerns — combined with worries about U.S. President Barack Obama’s plans for tighter restrictions on banks — have helped drag stocks around the world down for days.

“The last couple of weeks have thrown up prospects of U.S.-led banking regulation and simmering sovereign credit concerns. Neither directly challenges the strong domestic fundamentals of Asian economies, though Asia of course cannot escape the fact of its export leverage to developed economies, nor of the state of global liquidity in so far as it impacts portfolio flows,” wrote Patrick Bennett, a strategist at Société Générale in Hong Kong, in a note on Wednesday. “While there is uncertainty, we must expect some defensive positioning in Asian markets.”

Andrew E. Kramer reported from Moscow.

Rusal Shares Slump With Market in Opening Day of Trading

SAN FRANCISCO (MarketWatch) -- The Canadian dollar is on track to hit parity with the U.S. dollar, a rise that would underscore the strength of Canada's economy compared with that of the United States, as well as the country's vulnerability to swift changes in commodities prices.

Analysts are forecasting that the Canadian dollar will trade on equal footing with the U.S. dollar within the next few months, largely based on investor demand for assets linked to rising commodities prices.

Oil prices are forecast surge to $100 a barrel, but not until next year. Emerging market demand is helping to erode a glut of oil, and when mature economies in the OECD recover from recession, prices could breach the key $100 mark.

The loonie, the nickname for the gold-colored coin that replaced the paper dollar in 1987, is now trading at 94.11 U.S cents. It would have to rise about 6% to trade at one American greenback, or at parity.

"Our forecast is for [the loonie] to hit parity by the end of the first quarter," said David Watt, currency strategist for RBC Capital Markets. "There's a chance it could hit before that."

Some are forecasting the Canadian dollar will shoot well above its U.S. counterpart.

Michael Woolfolk, senior currency strategist at BNY Mellon, said he expects the Canadian dollar to hit parity by midyear and rise to $1.10 U.S. dollars by the end of the year.

Such gains would increase the purchasing power of Canadian consumers. But they could curb Canada's export growth and cool inflation, taking pressure off the Bank of Canada to raise rates. Higher rates tend to make a currency more valuable.

The currency's gains also may be checked if Chinese efforts to slow lending growth foster more concerns about the pace of the global economic recovery. That's what happened last week, as expectations Chinese authorities were moving to raise borrowing costs caused a 4.7% drop in oil futures and a 2.3% decline in the loonie.

The loonie fell again Tuesday after reports that Chinese authorities had required some banks to restrain lending -- a blow to metals and other commodities prices. Read more on China's moves.

"If China is tapping the brakes now, that would certainly upend the bullish views on commodities," Watt commented.

Rising prices of commodities like oil and gold, as well as a weak U.S. dollar, helped drive up the loonie 22% by the end of last year from the March lows.

Plus, investors sought the loonie to get exposure to Canadian economic strength. Its economy experienced a less severe recession than the United States, with no housing market crash. Its banking sector avoided the type of debilitating financial crisis experienced in the States as well as in the United Kingdom.

"The Canadian economy is not as structurally impaired as the U.S. or the U.K.," according to RBC's Watt. "It creates a sense that Canada is less exposed to the fickleness of foreign investors that are causing uncertainty in other locations."

Some countries are diversifying their reserves into Canadian dollars. Russia, which has been outspoken about wanting to unload some of its U.S. dollars that it makes exporting oil and natural gas, said last week that it was buying loonies.

Jeff Rosenberg, head of global credit strategy at BofA Merrill Lynch Global Research, discusses the impact of Obama's proposal on banks, 2010 credit outlook, and balance sheet retooling of investment grade and high yield companies no fax pay day loan.

A rise to equal weighting with the U.S. dollar would bring the loonie back to a level last sustained in May 2008. When it hit par nine months before, in September 2007, it had matched its U.S. counterpart for the first time in 31 years.

Further weakness in the American dollar, which fell about 16% from early March through the end of last year, is likely, some analysts say.

They're expecting the buck, which has risen 0.9% this month as measured by the U.S. dollar index , to reverse lower once U.S. stocks start rising again.

Such a dynamic would be in keeping with a trend in place for most of last year, when the greenback fell as investors added to "riskier" positions such as stocks, emerging markets and other assets.

"Once the U.S. stock market resumes its uptrend, the U.S. dollar will continue its downtrend," said Katherine Beattie, a senior technical analyst who tracks currencies for Action Economics. "As the U.S. dollar weakens, the Canadian dollar will just go to par."

Since March, the U.S. dollar has declined 18% against the Canadian dollar, while the S&P 500 Index gained 64% and oil has doubled.

Other commodity-based currencies have fared even better against the greenback: The Australian dollar gained 42% against its American counterpart since March, and the New Zealand dollar gained 44% over the same period.

A few years ago, American visitors to Canada enjoyed 40% discounts north of the border. Those days could be over soon. "It's so difficult to stop a currency when it's in a very strong mood," Beattie of Action Economics said.

Key to expectations of a stronger loonie is the Bank of Canada, which has kept interest rates at a record low of 0.25% since April. The central bank has said it has no plans to move rates until at least the end of the second quarter.

The Bank of Canada isn't anticipated to take any extraordinary measures to weaken the loonie, and it will probably raise Canadian interest rates when the U.S. Federal Reserve does so later this year.

Other factors could derail the loonie's rise, though. Kathy Lien, director of currency research at Global Forex Trading, said that recent trade and employment data out of Canada shows that the recovery is not as strong as it was originally thought.

"All the reasons that the loonie would hit parity have been thrown out of the window," she added.

In December, Canada's consumer-price index rose 1.3%, less than analysts expected.

With inflation under control, Lien said she expects the Bank of Canada to delay raising the rates even longer.

The country's central bank has noted recently that a strong loonie poses a threat to Canada's export-dependent economy.

"Persistent strength of the Canadian dollar could act as a significant further drag on growth and put additional downward pressure on inflation," the Bank of Canada said in a statement.

Canada's loonie on bumpy path to U.S. parity

LONDON -- Amylin Pharmaceuticals was upped to buy from hold at Citi on optimism over the potential for approval of its diabetes drug as Novo Nordisk's Victoza was approved ay day loans.

Amlyin Pharma Upped To Buy At Citi

LONDON – Is it possible to have too much ABBA?

Knowing me, knowing you, the answer is no.

The spangly Swedish quartet that gave the world "Waterloo" and "Dancing Queen" has sold 400 million records since its 1970s heyday and spawned the hugely successful stage and film musical "Mamma Mia!"

And now there's ABBAWORLD — a new museum-cum-theme park in London with enough music, mementoes and memory-lane appeal to satisfy even the most fervent ABBA fan.

ABBAWORLD's Swedish organizers promise the exhibition — which opens to the public on Wednesday — will be "a place for total interaction" with the band. The celebration kicks off Tuesday night with a party attended by band members Bjorn Ulvaeus and Anna-Frid "Frida" Lyngstad.

"It started with, 'How do we give the visitor a big hug in each room?'" said Magnus Danielsson, president of Touring Exhibitions, the company behind ABBAWORLD. "This is going to be more like going to 'Mamma Mia!' than going to an exhibition. We want people to sing and dance."

ABBA's music is inescapable throughout ABBAWORLD, from the exuberance of "Dancing Queen" through the melancholy of "Knowing Me, Knowing You" to the heartbreak of "The Winner Takes It All" — reminders that the band started off as two married couples and ended as two divorced ones.

The exhibition tells the band's story in 25 rooms spread over 30,000 square feet (2,800 sq. meters). Glass cases contain spangly costumes in silk, satin and spandex. Visitors can see recreations of Polar Studios, where the band recorded, and the seaside cabin near Stockholm where Ulvaeus and Benny Andersson composed the band's hits.

One corner holds the helicopter pictured on the cover of the 1976 album "Arrival."

An ambitious interactive element lets visitors take quizzes, recreate the band's sound at a mixing desk, or dance and sing alongside an animated ABBA via "holographic video" technology. The gift shop features Abba T-shirts, teddy bears, jigsaw puzzles and figurines — along with CDs.

An audioguide — narrated by Swedish actor Stellan Skarsgard, one of the stars of the film version of "Mamma Mia!" — traces ABBA's story, from the members' amateur teenage bands to stardom. The breakthrough came in 1974, when the band was the surprise winner of the 1974 Eurovision Song Contest with "Waterloo" — a song that brought ABBA's mix of bouncy pop melodies, multilayered harmonies and slightly silly lyrics to the world new car loan rates.

The members of ABBA drifted apart in the 1980s and have vowed not to reunite.

Band members Andersson, Ulvaeus, Lyngstad and Agnetha Faltskog all support the project and have donated memorabilia and recorded interviews that are played on screens throughout the exhibition.

ABBAWORLD organizers hope to create a place of pilgrimage to match the Elvis shrine of Graceland or Liverpool's Beatles Story — albeit a moveable one. They plan to send the exhibition on tour after its London run — currently scheduled through March — and create new versions of it in Australia and New York by the end of the year.

The exhibition arose after plans for a permanent museum in Sweden bogged down.

Not bad for a band long considered uncool, even by Swedes.

"I was a big ABBA fan when I was a kid," Danielsson said. "But I got picked on when I changed schools, so I switched to hard rock."

The band's pop genius is now accepted — if not loved — by critics.

"I do understand that they made great pop music in the 1970s," said Neil McCormick, music critic for the Daily Telegraph. "But that much cheerfulness in one place and that much inanity I can do without.

"They did one thing, they did it pretty well and they flogged it until you never need to hear it again."

You will hear it again, though — since ABBA's appeal now spans several generations, from those who lived through the '70s, or bought the 1992 greatest-hits collection "ABBA Gold," or saw "Mamma Mia!" on stage or at the movies.

"My first girlfriend, when I was about seven, forced me to act as Bjorn in a fun day at school, playing a tennis racket," said Mats Daleskog, senior director of production for Touring Exhibitions. "Most of us have a lot of memories — bad and good — with ABBA songs."

___

On the Net: http://www.abbaworld.com

Mamma Mia! ABBAWORLD theme park opens in London

NEW YORK (Reuters) – The U.S. Federal Reserve's balance sheet rose to a record in the latest week, boosted by its ongoing efforts to support the mortgage market, Fed data released on Thursday showed.

The Fed's balance sheet -- a broad gauge of its lending to the financial system -- rose to $2 no teletrack payday loan.274 trillion in the week ended January 13 from 2.216 trillion in the prior week.

(Reporting by Burton Frierson, Editing by Chizu Nomiyama)

Fed's balance sheet liabilities hit record

LONDON (MarketWatch) -- European Central Bank President Jean-Claude Trichet on Thursday made clear he sees no prospect whatsoever that deficit worries will prompt Greece, or any other nation, to exit the European single currency.

But he also made clear that Greece and other countries that may find themselves in desperate financial straits can't expect to receive any special treatment from the Frankfurt-based ECB.

Asked at his monthly news conference about speculation among market watchers that a nation could eventually leave or be forced out of the euro, Trichet said he would not comment on an "absurd hypothesis."

Earlier, the ECB Governing Council voted to leave its official interest rates unchanged, holding its key lending rate at a record low 1%. The decision was widely anticipated.

Trichet also stuck to expectations for a modest but potentially bumpy recovery from the euro zone as it crawls out of a deep recession.

Trichet said he anticipates "an 'uneven' recovery, with only 'moderate' growth rates, and 'subdued' inflation, with risks on both still seen as 'broadly balanced,'" noted Ken Wattret, an economist at BNP Paribas. "This is a scenario indicative of no rush to raise the refinancing rate."

Unsurprisingly, Trichet was peppered with questions about Greece. The Greek government late last year revised its budget-deficit estimate sharply upward, saying the gap would hit 12.7% of gross domestic product payday cash advance loans. That's more than four times the limit the European Union imposes. Greece is expected this month to submit to the European Commission a plan to bring the deficit below the 3% level in three years.

Earlier this month, an ECB executive-board member, Juergen Stark, warned that EU member countries wouldn't bail out Greece. Athens's woes have highlighted concerns about other peripheral euro-zone nations, including Portugal, putting renewed pressure on the euro.

The single currency was slightly lower versus the dollar after initially rising amid Trichet's news conference and weaker-than-expected U.S. retail-sales data. The euro changed hands at $1.4484, down 0.1% on the day. Read Currencies.

Trichet sought to play down the impact of Greece's woes on the broader euro-zone economy, saying the nation's output equaled 2.5% to 3% of total euro-zone GDP.

The euro zone's combined budget deficit, meanwhile, looks set to run between 5.5% and 7% of GDP, which compares well with other major economies.

Still, Trichet said governments need to take "bold" and "courageous" decisions to get their fiscal houses in order, and he offered little prospect of outside help.

"The problem is not to get help, but to help oneself," he said.

ECB's Trichet: Greek euro exit 'absurd hypothesis'

HONG KONG — Google is far from alone among Western companies in its growing unhappiness with Chinese government policies, although it is highly unusual in threatening to pull out of the country entirely in protest.

Western companies contend that they face a lengthening list of obstacles to doing business in China, from “buy Chinese” government procurement policies and growing restrictions on foreign investments to widespread counterfeiting.

These barriers generally fall into two broad categories. Some relate to China’s desire to maintain control over internal dissent. Others involve its efforts to become internationally competitive in as many industries as possible.

Google, which complained Tuesday about attacks on its computers from China and called for an end to censorship of search results, is not the first company to run afoul of the Communist Party’s fears of social instability and strong desire to keep tabs on dissidents and limit freedom of expression.

China has long restricted the sale of foreign movies, books, songs and other media, and it continues to do so while appealing a World Trade Organization ruling in August that these policies violate China’s legally binding commitments to the international free trade system. More recently, China has sought to strengthen its domestic encryption industry — for which the government has easy access to all the decryption codes — while withholding the government certification that foreign-owned encryption companies in China need to sell their products to many users.

Jörg Wuttke, president of the European Chamber of Commerce, said that no E.U. companies had pulled out of China yet. But the encryption dispute would be the most likely cause if any did in the near future, he said.

Duncan Clark, the chairman of BDA, a Beijing consulting firm that advises major telecommunications and technology companies, said that Google’s difficulties were indicative of broader troubles for foreign companies in China.

“There has been a raft of decisions and unpredictability, a kind of unpleasantness about what’s happening here,” Mr. Clark said. “There has been this received wisdom that no one can afford not to be in China, but that is being questioned now — there’s kind of an arrogance that’s characterizing government policy toward multinationals.”

To be sure, doing business in China has never been easy. Foreign companies have long complained of being cheated by joint venture partners who set up parallel businesses on the side or abscond with assets. Many other countries also have policies that favor home-grown companies, although the opportunity for industrialized countries to do so is limited because they operate under tighter W.T.O. rules than China.

Chinese officials and academics dispute whether government policies are discriminatory toward foreign companies. Hu Yong, an associate professor of journalism and communication at Peking University, said that the government was leery of the rapid expansion of the Internet and mistrustful of private Chinese companies as well as foreign businesses.

“I think, in the information technology sector, not only foreign companies are under very heavy pressure, but also private domestic companies,” he said. “The general trend is that the government wants state-owned companies to occupy major positions in this field.”

Other strains between China and the West over commercial policies have been over government policies that shield Chinese companies from international competition. These policies allow companies to grow in a large home market and prepare to export to less-protected markets abroad.

The newest frictions, particularly in the past year, have been over government procurement policy. When China joined the W.T.O. in November 2001, it promised to negotiate as quickly as possible to join the W.T.O.’s side agreement requiring free trade in procurement. But it has never actually done so, leaving the Chinese government free to use its enormous buying power to steer contracts to Chinese-owned companies.

David Barboza reported from Shanghai. Michael Wines contributed reporting from Beijing.

Foreign Firms Bristle at Beijing’s Rules

SAN FRANCISCO (MarketWatch) -- A row between Argentina's president and the head of its central bank is giving investors a fresh reason to avoid Argentine stocks, which had rallied on government efforts to rebuild the country's image with international creditors.

Argentina's Merval stock index greeted the new year by notching records, the crest of a turnaround that picked up speed in the second half of 2009. The run was partly due to the government's plan to restructure $20 billion in defaulted debt, a move that would settle one of the longest-running -- and bitter -- disputes in emerging markets.

If a resolution emerges despite the political upheaval, consumer-oriented companies such as banks would stand to benefit the most.

But stocks have lost steam since Argentine President Cristina Fernandez de Kirchner last week asked Martin Redrado, president of the central bank, to resign amid disagreements about handling foreign-exchange reserves and debt-service payments. He was later reinstated by a judge.

Kirchner's move hurled the executive branch into a fight with the opposition-controlled congress, and cast a shadow on the debt proposal.

Since the Merval index hit a record closing high of 2,402 on Jan. 5 -- a day before Kirchner called for Redrado's resignation -- the benchmark has lost 2.7%. Read more Latin American markets coverage.

The fight between the executive branch and the central bank "just highlights the fact that Argentina is still a dangerous place to have long-term investments," said Will Landers, a senior portfolio manager at BlackRock who oversees $9 billion in Latin American stocks.

"The government is not moving in leaps and bounds to become more market-friendly," but instead has taken some steps that "15 or 20 years ago, gave emerging markets a bad name," he said.

On Tuesday, a U.S. judge ruling on behalf of the so-called holdout investors froze Argentine central-bank assets in New York, sending Argentine bonds tumbling and ramping up the level of uncertainty around the planned debt swap.

The government has reiterated its willingness to keep on track with the debt restructuring, even as Redrado has kept his reins on the central bank and Argentine courts prepare to rule on the dispute.

That latest turn of events has overshadowed Argentina's progress towards restructuring its remaining defaulted debt.

The government is expected to offer holders of some $20 billion in defaulted bonds -- investors who declined a 2005 debt-restructuring offer following Argentina's multibillion-dollar default four years earlier -- a way to recoup at least some of their losses.

A proposal is anticipated this month, and the offer is expected to be about 50 cents on the dollar. A resolution would allow Argentina to sell bonds overseas again and to shed the status of financial pariah it gained after the 2001 default.

Central bank conflict aside, the sovereign-bond swap proposal and the recent stock gains have put the spotlight on investing opportunities in Latin America's third-largest economy.

Argentine banks are a bright spot. Investors say they stand to benefit from the debt-restructuring proposal both as major holders of government debt, and also from pure demographics.

Citigroup recently increased its earnings-per-share and stock-price targets for Argentine banks, citing "substantial bond-related gains" this year and in 2011 among its reasons business card.

It cautioned, however, that Argentine banks such as Banco Patagonia, Banco Macro, BBVA Frances and Banco Galicia are still high-risk investments.

Argentine banks are still small, and their market penetration is "very low," said Jose Costa, a fund manager at T. Rowe Price in Buenos Aires.

Argentina is still an important economy, and "in the long term, with some changes, it's a sector that could provide good opportunities for growth," he said.

Banks would also benefit from a change in political regime, which could "start a long period of rapid loan growth in Argentina," Citigroup said in a recent report.

The government's unorthodox stances haven't won many friends among investors.

Kirchner, the wife of former president Nestor Kirchner, spooked investors in late 2008 when she nationalized pension funds, significantly decreasing stock trading levels. The populist government has also been accused of manipulating inflation and other macroeconomic data, leading to further distrust.

Even fund managers focusing on Latin America often overlook Argentina altogether, preferring to put money into more stable countries in the region, such as Chile, or heavyweights such as Brazil and Mexico, Latin America's largest and second-largest economies, respectively.

Argentina's most liquid stocks include companies that are based in Argentina, but have most of their revenues coming from elsewhere, such as steel -pipe maker Tenaris SA , steel producer Ternium , and Mercadolibre , Latin America's eBay.

Argentines go to the polls in October 2011, and most observers believe the Kirchners stand a good chance of losing their grip on power. The government has clashed with farmers and a major media conglomerate. It lost control of congress in the 2009 midterm elections.

For the stock market, a low point came last year, as major index provider MSCI Barra demoted Argentina to its frontier market index from its emerging markets index.

The showdown over the central bank president comes at a time when market participants had been pleasantly surprised by the debt-proposal talks. Confident the proposal would go through, the Argentine government last year filed documents with the Securities and Exchange Commission to allow it to eventually sell up to $15 billion in bonds in the U.S.

Argentina defaulted in 2001 and embarked on a high-profile debt exchange in 2005. The restructuring involved a record-breaking $100 billion in debt and hundreds of thousands of individual and institutional investors. They held several separate types of bonds, issued in different jurisdictions and different currencies.

To some, Argentina deftly played the differences between its creditors and the complexities of its debt -- and achieved nearly 75% participation for the proposal, even though what it offered was considered paltry. In the end, most of Argentina's debt holders took 33 cents on the dollar over more losses through litigation.

Those who declined the offer have won several battles in court. But they discovered that winning judgments and court orders for asset seizures was the easy part. To date, not a single holdout has converted favorable court decisions into actual payments.

Emerging Markets Report: Argentine bank row clips goodwill from debt deal

Little by little, regional economies in the United States are gaining strength, the Federal Reserve said Wednesday, though several pillars — housing, real estate and the jobs market — remain weak.

The central bank’s report on economic growth across the country, known as the beige book, described “modest” improvement in 10 of the 12 regions in the nation, noting growth in consumer spending and home sales. But the Fed’s cautious tone suggested that a recovery would be slow and hesitant.

“Through the ups and downs, this is still a moderate recovery,” said James F. O’Sullivan, chief economist for MF Global. “But we’re at the point where strength is feeding on itself, and you’ll see more strength in six months’ time than you’ll see now.”

The report, based on interviews in December and early January, offered mixed signals on consumer spending, a crucial driver of the economy. While the holiday season brought a rush in sales, retailers in places like San Francisco and Philadelphia said the gains were so small compared with precrisis levels that they were not confident spending had resumed, the report said. The Fed characterized consumers as “cautious, price sensitive, and focused on necessities.”

Still, car sales were flat in most regions and increased in some areas, even in the absence of incentives like the government’s cash-for-clunkers program.

Home sales also increased in most areas, the report said, in part because of the lure of a government tax credit for first-time buyers. Much of the growth was in lower-priced homes. Over all, home prices remained about the same and residential construction was weak.

Manufacturing, considered a bellwether sector, showed gains in production and employment in many parts of the country. A surge in exports in the last several months helped increase orders for carmakers and semiconductor companies.

Michael E. Feroli, a senior economist for JPMorgan Chase, said a slowdown in inventory liquidation and strong demand for items including cars and soybeans from Asian countries helped rekindle the manufacturing sector.

Mr. Feroli characterized the outlook for manufacturing as “not enthusiastic,” but he added, “on balance, it’s a little more upbeat.”

As the Fed prepares to meet this month to set monetary policy, there seemed to be little in the report to give policy makers reason to raise interest rates from record lows. Economists expect high unemployment and large amounts of excess capacity in the economy to keep inflation in check.

Unemployment remained a central obstacle in many regions. Last month, the jobless rate nationwide held steady at 10 percent as an additional 85,000 positions were lost. Only New York reported a significant increase in hiring, the report said.

Another challenge is persuading consumers and businesses to borrow again. Since the onset of the crisis, Americans have been reluctant to spend freely and are hoarding more of their earnings. The report said demand for loans remained low and weakened in some regions, while loan delinquencies and defaults continued to rise in many areas.

Real estate agents also face dreary conditions. The commercial real estate market, hit hard by a tide of business failures, remains soft, the report said, leaving agents with a large excess supply.

As vacancy rates climbed, real estate companies in New York and Kansas City reported worsening conditions. Analysts say the market will be slow to recover, and they do not predict a rebound this year.

“It’s a drag,” Mr. O’Sullivan said, “but it doesn’t mean the overall economy won’t grow.”

In the third quarter of 2009, the economy grew at a rate of 2.2 percent. Analysts expect increased spending will help raise that rate closer to 4 or 5 percent for the fourth quarter.

U.S. Regions Show Gains And Softness, Fed Reports

NEW YORK -- The Treasury Department sold $21 billion in 10-year notes on Wednesday at a yield of 3.754%, near the level traders anticipated. Bidders offered to buy 3 times more debt than was being sold, compared to an average of 2.8 in the last three sales of comparable auctions. Indirect bidders, a group that includes foreign central banks, bought 29% of the sale, compared to an average of 45.9% at the last three. Direct bidders -- domestic institutions buying for their own accounts -- purchased 17.3%, the most in at least a year and compared to 5.6% on average recently. More of the auction going to investors instead of primary dealers is positive for the bond market. The broader market remained under pressure before the Federal Reserve's Beige Book is released. Yields on 2-year notes , which move inversely to prices, rose 4 basis points to 0.94%.

Treasury Sells $21 Bln Of 10-year Debt At 3.754%

WASHINGTON/NEW YORK (Reuters) – U.S. securities regulators proposed rules on Wednesday that would require more supervision of unlicensed high-frequency traders who gain unfettered, or "naked," access to public markets.

The Securities and Exchange Commission voted for a proposal that would require brokerages that rent out their access to the markets to have rules in place to protect against potential mishaps from unlicensed traders.

The practice, known as "sponsored" access, is when brokerages that have been approved to trade on an exchange rent their access to traders who are then able to shave milliseconds from the time it takes to access the markets.

"Naked sponsored access", also called "unfiltered" access, is when the brokers do not screen orders en route to markets, making electronic trading even faster.

"We are concerned that order entry errors in this setting could suddenly and significantly make a broker dealer or other market participants financially vulnerable within mere minutes or seconds," said SEC Chairman Mary Schapiro.

The SEC said that the proposed rule would "effectively prohibit" brokerages from providing their clients with naked access to an exchange Low fee payday loans. The proposal is open for a 60-day comment period and will require another commission vote to adopt the rule.

Naked access is now monitored by a patchwork of rules maintained by the exchanges, brokers, and trading firms. Some 38 percent of all U.S. stock trading is estimated to be done through naked access, a portion of which is by high-frequency traders.

The proposal would require broker dealers to implement risk controls and supervisory procedures to manage various risks such as faulty orders.

Brokerages would have to, for example, implement controls to prevent the entry of orders that appear erroneous or exceed credit and capital thresholds.

The controls would have to be applied on a "pre-trade" basis or before orders are routed to an exchange, under the proposed rule.

Brokerages would not be allowed to outsource their supervisory procedures to third parties and would have to document and regularly review their risk management controls and procedures.

(Reporting by Rachelle Younglai and Jonathan Spicer, editing by Gerald E. McCormick and Derek Caney)

SEC proposes "effective" ban on naked access

NEW YORK (Reuters) – Stock index futures were slightly higher on Wednesday, but gains were capped as concerns about the Chinese economy pressured commodity prices.

Chinese shares fell 3 percent, led lower by banks and property issues, after the government raised bank capital requirements in the clearest sign yet it has started to tighten monetary policy for the world's third largest an economy.

Investor concern about China dented commodity prices, as copper hit a two-week low and crude oil fell below $80 per barrel, threatening to weigh on shares of U.S. commodity and industrial companies.

"That is the biggest driver today. If we get any bounce (in commodity prices) we might be able to move forward. But without that, this market is going to be under pressure," said Arthur Hogan, chief market analyst at Jefferies & Co in New York.

S&P 500 futures rose 3 points but 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 rose 10 points, and Nasdaq 100 futures added 3.75 points.

U.S. president Barack Obama is to announce plans on Thursday to raise up to $120 billion from major U.S. financial companies to cover expected losses from the taxpayer-funded bank bailout, according to a senior administration official unsecured personal loans.

Kraft Foods Inc (KFT.N) raised its 2009 profit forecast late Tuesday and said it was well positioned to deliver "sustainable top-tier performance, with or without Cadbury.

Kraft's 10.5 billion pound ($17 billion) bid for Cadbury Plc (CBRY.L) was strengthened after Italy's Ferrero decided not to bid for the British chocolatier.

Google Inc (GOOG.O) slipped 1.5 percent in premarket trade after the leading Internet search provider said it may shut down its China website and operations there after it uncovered sophisticated attacks on human rights activists using its Gmail service around the world.

The Federal Reserve releases its Beige Book of regional economic conditions at 2 p.m. EST. Investors will scour the data for insights into the Fed's thinking on the economy.

U.S. stocks slid Tuesday as investors pummeled financial shares on concerns about the potential government levy on banks and after Alcoa Inc (AA.N) reported poor-than-expected results.

(Reporting by Edward Krudy; editing by Jeffrey Benkoe)

Stock futures higher as commods fall on China fears

NEW YORK (Reuters) – The Dow and the S&P 500 ended little changed on Wednesday and the Nasdaq dipped after a report on the vast services sector showed only slight improvement in the U.S. economy.

* Investors opted to book profits from some of the technology bellwethers, including Apple Inc (AAPL.O), whose recent advance propelled the Nasdaq to a fresh 16-month closing high on Tuesday.

* The Institute for Supply Management (ISM) index showed the service sector grew at marginal pace in December, while the ADP Employment Services report indicated 84,000 job losses in the private sector, compared with a forecast for a drop of 73,000 free online credit report. For details, see [ID:nN06314739] * Based on the latest available data, the Dow Jones industrial average (.DJI) rose 1.66 points, or 0.02 percent, to end unofficially at 10,573.68. The Standard & Poor's 500 Index

(.SPX) edged up just 0.62 of a point, or 0.05 percent, to

finish unofficially at 1,137.14.

But the Nasdaq Composite Index (.IXIC) shed 7.62 points, or 0.33 percent, to close unofficially at 2,301.09.

(Reporting by Ellis Mnyandu; Editing by Jan Paschal)

ISM data curbs Wall St; Nasdaq slips

SAN FRANCISCO -- General Motors Co. Chairman and CEO Ed Whitacre told reporters Wednesday that he expects the automaker to turn a profit at some point in 2010 and that he is looking for sales to drive the recovery. "We are focused on the revenue side," he said. "You can always take out more costs." Whitacre reiterated that GM plans to repay the government, now its biggest shareholder, by June. He also said that Chris Liddell, GM's new CFO who was hired away from Microsoft, is considered a likely candidate for the CEO job. As for Saab, Whitacre said he doesn't see a sale taking place before GM shuts down the brand.

GM CEO Targets a Return To Profitability In 2010

WASHINGTON (MarketWatch) -- Recent signs of an improving economy didn't sway Federal Reserve officials from their belief that the recovery would be gradual relative to past recoveries and inflation would remain tame, according to minutes of the latest policy meeting released Wednesday.

Incoming data has started to take a more positive tone in the weeks prior to the Fed's closed-door meeting on Dec. 15-16. After the meeting, the Fed held policy steady and made only cosmetic changes to its policy statement.

Fed officials welcomed the better news but said it did not change their outlook.

The VIX's decline to a 16-month low shows an absence of anxiety on Wall Street, reports Barrons.com's Bob O'Brien.

"Participants expected the economic recovery to continue, but, consistent with experience following previous financial crises, most anticipated that the pickup in output and employment growth would be rather slow relative to past recoveries from deep recession," according to the summary.

Although the November employment report was better than expected, Fed officials observed that "more than one good report would be needed to provide convincing evidence of recovery in the labor market."

The minutes revealed that the Fed's staff boosted its forecast for economic growth in 2010 and 2011. But the faster pace would still not be fast enough to quickly bring down the unemployment rate and other measures of economic slack.

At the same time, the Fed staff continued to expect that core inflation would slow over the next two years. The recent run up in energy prices now boosting consumer price inflation was "transitory," the staff reported no telecheck payday loans.

Data since the December meeting has generally continued to be positive. The FOMC will meet again on January 26-27. Economists generally believe the Fed will start to tighten monetary policy in some fashion in the second half of the year.

There was little discussion at the Fed meeting about policy so far ahead.

The FOMC put off a discussion of "alternative approaches to implementing policy in the longer-run" until this year.

One notable feature of the minutes was that there was a sharp divide among officials about the forecast for inflation longer-term.

In an unusual development, the debate about the price outlook continued long after the formal vote on policy, which usually signals the end of the closed-door gatherings.

The "doves," or Fed officials who are less concerned about a spike in prices, saw continued risk of deflation. They noted that the slowdown in wage cost in 2009 as a factor that would put downward pressure on inflation.

On the other side were the "hawks" or Fed officials known to be worried about rising prices. They argued that the Fed's ultra-low monetary policy and the large Federal budget deficits might cause the public to anticipate higher prices thus making them more likely.

There was also not a lengthy discussion of the Fed's purchases of mortgage-backed securities that is scheduled to end in late March.

Only a few Fed officials pushed to expand the plan and only one thought it should be scaled back.

The Fed: Slow growth, low inflation still best bet: minutes

NEW YORK -- U.S. stocks twisted mildly lower on Wednesday as investors digested a report showing marginal growth in the U.S. services sector in December. Telecommunications services shares weighed the most while material shares advanced on gains in commodity prices. The Dow Jones Industrial Average fell 5.37 points to 10,566.73. The S&P 500 Index fell 1.16 points to 1,135.36. The Nasdaq Composite Index shed 8.6 points to 2,300.11.

U.S. Stock Indexes Dip Into Negative Turf