Today Stock Market News

BOSTON (MarketWatch) — Drug stocks inched higher in early trading Tuesday while shares of Vical Inc. soared on news that animal studies have shown its new H1N1 flu vaccine to be highly effective. The NYSE Arca Pharmaceutical Index was up nominally at 264.10 and the NYSE Arca Biotechnology Index advanced 0.5% to 704.91. Shares of Vical were up 20% at $2.65.

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A roundup of the latest breaking business news and information Tuesday.

NEW YORK (MarketWatch) — Romania’s central bank lowered its benchmark interest rate by 50 basis points to 9.0% on Tuesday, meeting market expectations. The central bank also reduced the minimum reserve requirements on leu-denominated liabilities of credit institutions to 15% from 18%, according to a statement posted on the bank’s Web site.

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\Forcing U.K. banks to shrink or split themselves up may do little to avoid future crises and could even significantly harm the country’s economy, bankers and a regulator said Tuesday.

NEW YORK (MarketWatch) — J.P. Morgan Chase is considering raising its investment bankers’ salaries to match hikes at rivals like Citigroup and Bank of America and retain talent, the New York Post reported on Tuesday. The New York Post is owned by News Corp., which also owns the publisher of this report.

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Stocks expected to move significantly in trading on Tuesday include Apollo Group, H&R Block, Emulex, Exco, General Mills, Johnson & Johnson, Schnitzer Steel and Vical.

BG is to pay $1.3 billion to Exco as the U.K. natural-gas producer teams up with the Dallas explorer to develop U.S. shale gas.

NEW YORK (MarketWatch) — American Airlines parent company AMR Corp. is raising about $520 million in new financing to help pay for 16 new Boeing Co. jetliners. In a government filing late Monday, AMR said the class A pass through certificates will have an expected principal distribtuion window of 6 months to 10 years. Long-term value is 48.7%, but pricing has yet to be determined. Joint bookrunners on the deal are Goldman Sachs Group Inc. and Morgan Stanley , with Calyon Securities as the co-lead manager.

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The Walt Disney Co. will spend HK$3.5 billion ($449 million) to fund an expansion of the Disneyland theme park in Hong Kong, as part of a strategy to attract more visitors and counter criticism of the park’s small size and lack of appeal to the growing number of mainland tourists to the city.

Carrefour CEO Lars Olofsson on Tuesday detailed plans to reinvent the “hypermarket” format in France and to streamline the group’s organization as he updated investors for the first time on the retailer’s efforts to improve its price image in its home market.

TEL AVIV (MarketWatch) — Schnitzer Steel Industries Inc., the Portland, Ore., provider of recycled metal products, swung to a fiscal-third-quarter net loss from a year-earlier profit on 58% lower revenue. For the quarter ended May 31, the loss was $1.5 million, or 5 cents a share, compared with net income of $62 million, or $2.14, in the year-earlier quarter. Revenue fell to $411.8 million from $972.1 million. A survey of analysts by FactSet Research produced consensus estimates of a profit of 11 cents a share on revenue of $378 million.

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LONDON (MarketWatch) — Porsche Automobil Holding said a loan request for 1.75 billion euros ($2.5 billion) from the German state-backed KfW has been denied. Porsche said it will look for alternative financing and won’t reapply.

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Annual consumer price inflation across the 16-nation euro zone turns negative.

LONDON (MarketWatch) — French drugmaker Sanofi-Aventis said Tuesday that it is considering a plan for voluntary staff departures. The firm will not be laying off staff, it said as it outlined a new R&D model under which it will combine its discovery research establishments in France. Preclinical activities in some sites of Spain, the United Kingdom, the United States and Japan will also be reorganized, with divestment or reconversion solutions sought for certain activities. The firm is also reevaluating the resources needed for central group functions located in the Paris area.

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All Nippon Airways asks Japan’s Transport Ministry to reconsider its decision to approve government guaranteed financing to Japan Airlines.

LONDON (MarketWatch) — Annual inflation in the 16-nation euro zone turned negative for the first time on record in June, falling 0.1%, the statistics agency Eurostat said Tuesday in a preliminary estimate. Economists had forecast a 0.2% decline.

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A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

The dollar edges down against major counterparts in Tokyo Tuesday, but stays in a narrow range.

LONDON (MarketWatch) — European aircraft maker Airbus on Tuesday confirmed that Yemen Airways flight IY626 crashed near the Comoro Islands. It said the aircraft involved, an A310-300, was first delivered from the production line in 1990 and had been operated by Yemenia since October 1999. It had accumulated around 51,900 flight hours in some 17,300 flights and was powered by Pratt & Whitney engines PW4152. Airbus said no further detail was available at this point but that it had dispatched a team to the Comoro Islands.

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LONDON (MarketWatch) — Shares of Laird dropped after the U.K. electronics company said first-half comparable revenue dropped by around 35% on constant currency terms, with second-quarter revenue worse than the first as the bankruptcy filings of Chrysler and General Motors hurt its antennae business. In sterling terms, revenue dropped by around 15%, the company said. First half profit margins will be lower than in the first quarter. It does expect a demand pick-up in the second half.

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TEL AVIV (MarketWatch) — A plane bound from Yemen with 153 people on board crashed into the sea on Tuesday as it was attempting to land in bad weather at the Comoros Islands, news reports say. The jet was an Airbus A310-300 from the state carrier Yemenia, the reports say. An official from the airline told Reuters that it was unclear whether anyone had survived the crash. The Comoros archipelago is located between Africa’s southeast coast and the island of Madagascar.

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LONDON (MarketWatch) — SKF , the Swedish ball-bearing producer, said it’s cutting an additional 900 jobs by closing a factory in Fontenay-le-Comte, France that makes small ball bearings primarily used in applications such as household appliances and electrical motors, and by cutting more jobs in areas such as India, the U.K. and Sweden where it’s already reduced headcount. SKF will take restructuring charges of around 700
million krona ($91 million), including 480 million krona in the second quarter, in a move that SKF says will save the firm 300 million krona per year.

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Elpida Memory will receive $521 million, much of it as part of Japan’s new recapitalization program for struggling non-financial companies.

LONDON (MarketWatch) — U.K. house prices edged up 0.9% in June, the Nationwide Building Society said Tuesday, bringing the annual rate of decline down to 9.3%, from 11.3% in May. The average price of a U.K. house is now 156,442 pounds, compared to 154,016 pounds in May. The Nationwide said that that three month on three month rate of change - a smoother indicator of the short-term price trend - turned positive for the first time since December 2007. Martin Gahbauer, the Nationwide’s chief economist said that, while it is encouraging to see that prices are no longer seeing steep falls, there are still many obstacles in the way of a genuine and sustainable price recovery. “With the stock of property available for sale likely to eventually increase, house purchase demand will need to rise more convincingly from current levels to prevent a possible relapse in price levels,” he said.

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LONDON (MarketWatch) — Music and book retailer HMV Group said Tuesday that its fiscal-year net profit fell to 44.2 million pounds, from 89.0 million pounds a year ago. Last year, the firm recorded an exceptional gain of 48.3 million pounds related to the trading and sale of its Japanese operations. “Against a difficult economic environment, the group delivered sales and profit growth, driven by good trading in our largest business, HMV UK & Ireland,” it said. HMV added that it continues to make good progress on its three-year transformation plan.

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TEL AVIV (MarketWatch) — Exco Resources Inc., the Dallas oil and gas company, definitively agreed to sell a half interest in its Haynesville shale and other natural-gas assets in Louisiana and Texas to BG Group of the U.K. for $655 million. “In addition, BG Group will fund $400 million of capital development on Exco’s behalf, with BG Group paying 75% of Exco’s drilling and completion costs on the deep rights until the $400 million commitment is satisfied,” the company said in a statement on Tuesday. And the two companies have agreed in principle to a deal in which Exco will sell BG a half interest in its midstream business in the area for $249 million cash. This deal excludes the Vernon Field midstream assets. Exco will use the $904 million of proceeds to pay Exco Operating Co.’s $300 million senior unsecured term loan, and to pay down the parent’s credit lines.

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Crude-oil futures rally further in Asian electronic trading, spurred by concerns over supplies after an attack on an oil platform in Nigeria.

The chief financial officer of India’s top motorcycle maker is confident of a 10% growth in sales this year, even as bad weather forecasts threaten to get in the way. of deficient rainfall threaten the strength of India’s economic recovery.

The success of Nokia Corp.’s latest effort to build a stronger foothold in the U.S. hinges on how well the company exploits assets it plans to buy from Nortel Networks Corp., the bankrupt Canadian supplier.

Google is entrenched in our culture, a tough issue for Microsoft as it seeks to get users to try Bing or to switch to using it all the time.

The Bernie Madoff spectacle, once compelling for illustrating the grandeur and scope of his fraud, is in danger of losing its relevance, says David Weidner.

The Federal Reserve says it will use ‘all available tools’ to promote an economic recovery. The trouble with this statement is that its tools are simply not enough without some assistance from the rest of the government.

Analysts expect China’s manufacturing activity to have accelerated in June, adding to a picture of an improving economy.

LOS ANGELES (MarketWatch) — Emulex Corp.’s board of directors issued a statement Monday, saying it will review the terms of the revised offer from Broadcom Corp. to buy the company at $11 a share in cash, and that stockholders should wait for its recommendation before tendering shares. “The Emulex Board will make its recommendation … in due course,” it said. Emulex shares closed up 2.6% at $10.88 Monday, but rose in after-hours trade to $11.18.

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HONG KONG (MarketWatch) — Hong Kong stocks gained Tuesday, with Chinese banking stocks leading the advance following overnight gains on Wall Street. Refiners and related energy firms such as China Petroluem & Chemical Corp. ( Sinopec) and Cnooc Ltd. rose following a surprise hike in retail Chinese gasoline prices. The Hang Seng Index added 1.7% to 18,842.45, while the Hang Seng China Enterprises Index climbed 2.1% to 11,218.38.

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Chinese refiner stocks rise following a surprise hike in domestic gasoline prices, the second this month.

Oracle manages to quietly spend $1.2 billion buying other companies and assets in fiscal 2009, even as it trimed its headcount.

SAN FRANCISCO (MarketWatch) — A federal jury has ordered Abbott Laboratories to pay $1.67 billion to a Johnson & Johnson unit for violating a patent related to the arthritis treatment Remicade, Johnson & Johnson said late Monday. Johnson & Johnson had alleged that Abbott’s rheumatoid arthritis therapy Humira infringed on a patent held by its unit Centocor Ortho Biotech Inc. Centocor Ortho Biotech President Kim Taylor said in a statement: “We are particularly gratified that the jury recognized our valuable intellectual property.” The Centocor patent in question is co-owned by New York University, according to the statement.

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HONG KONG (MarketWatch) — Asian markets on Tuesday resumed their advance in the wake of overnight Wall Street gains, with energy-related shares climbing on higher crude-oil prices, while a weakened yen supported gains by Japanese exporters. The Nikkei 225 Average rose 1.7% to 9,951.39 in Tokyo, while the broader Topix Index added 1.6% to 929.47. South Korea’s Kospi added 1.2%, Australia’s S&P/ASX 200 advanced 1.1%, and New Zealand’s NZX 50 gained 0.1%.

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SAN FRANCISCO (MarketWatch) — Japan’s unemployment rate hit a five-year high in May, according to government data released Tuesday. The number of unemployed persons rose to 3.47 million, data from the Ministry of Internal Affairs and Communications showed, marking an increase of 28.5% from the same period last year. Seasonally adjusted, the unemployment rate was 5.2%. Economists had expected the jobless rate to come in at 5.1%, according to Dow Jones Newswires. The data suggest Japan is still struggling to emerge from a severe recession.

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SAN FRANCISCO (MarketWatch) — Japan’s overall household spending rose 0.3% in real terms in May compared to the same period last year, according to government data released Tuesday. The result topped median market expectations for a 1.6% decline, according to media reports. The average monthly income per household in Japan, which has been hit hard by a recession, rose 1.4% from the prior year, according to data from the Ministry of Internal Affairs and Communications. The average consumption expenditure rose 1.8% in May, according to the data.

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Shares of Apollo Group climb after the company posts higher quarterly financial results than projected by Wall Street.

Among the companies whose shares are expected to see active trade in Tuesday’s session are Sealy Corp., H&R Block Inc., and Amazon.com Inc.

Gains for Mexico’s stock market and its currency hinge on reforms by the government to stave off ratings downgrades and on firm signs of a U.S. economic rebound, analysts say.

Canadian stocks rise, with gains in oil helping lift the Toronto benchmark, along with gains on Wall Street in the next to last trading session of the quarter.

SAN FRANCISCO (MarketWatch) — Amazon.com Inc. ended relationships with online affiliates in Rhode Island to avoid a new sales tax law in that state, The Wall Street Journal reported Monday on its Web site. Recently, Rhode Island passed a law requiring companies to collect a sales tax on products sold through online-marketing affiliates. On Friday, Amazon reportedly ended affiliate programs in North Carolina as that state was seeking to adopt a similar tax.

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SAN FRANCISCO (MarketWatch) — General Mills’ board on Monday raised the quarterly dividend by 4 cents to 47 cents, bringing the annualized dividend rate to $1.88. The dividend will be paid Aug. 3 to shareholders of record on July 10.

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WASHINGTON (MarketWatch) — Former Treasury Secretary Henry Paulson will testify about Bank of America’s acquisition of Merrill Lynch before the House Committee on Oversight and Government Reform on July 16, the committee announced Monday. Lawmakers have alleged that administration officials pressured B. of A. to complete the purchase in spite of Merrill’s financial troubles. B. of A. closed its deal to acquire Merrill on Jan. 1, after the government agreed to a $138 billion aid package to help B. of A. complete the acquisition. Paulson headed the Treasury while the government deal was under consideration and was expected to testify.

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States have the right to investigate national banks for violations of fair-lending laws, according to a majority of justices on the high court.

Bernard Madoff sentenced to 150 years in prison for orchestrating a massive Ponzi scheme. The punishment that draws a chorus of cheers from people not unlike the investors swindled by the disgraced 71-year-old.