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Despite fears that snowstorms in February would dampen sales, the nation’s stores posted their strongest results on Thursday since late 2007, suggesting the beginnings of a broad recovery in retailing.

Nearly every major chain turned in robust figures, beating analysts’ expectations and recording the sixth consecutive monthly sales increase. Even long-struggling stores and sectors came back from the dead.

“If anybody was wondering about the real state of the consumer, this is their answer,” said John D. Morris, a retailing analyst with BMO Capital Markets. “The consumer is coming back.”

The results provoked a measure of skepticism, however. A major reason they looked so good was that they were being compared with the deep declines of February 2009. That tempered industry professionals’ enthusiasm, as did the continuing high rate of unemployment, which strongly correlates with consumer spending.

Moody’s Investors Service said in a research note on Thursday that while retailers reported “modestly positive results, we remain unconvinced that this is evidence of a sustainable trend.”

Analysts at Moody’s said that in the year ahead, many consumers would be forced to increase their savings to pay off debt, and that the weak credit market would continue to squeeze consumers.

With February always a slow sales month, retailing analysts said the major test of the nascent recovery in retailing would come at the end of April. Over the next two months, they will be looking to see whether consumers are willing to open their wallets for spring clothes and Easter-related treats and decorations.

But for now, the February results are the best news in retailing in many months.

Comparing this February to last, the industry reported a 4 percent increase in sales at stores open at least a year, according to Thomson Reuters. Analysts polled by the company had expected stores to do well, in contrast to last year’s 4.7 percent decline. Even so, the results exceeded their expectations by more than 1 percent.

The International Council of Shopping Centers, a trade group, published its own figure, saying the industry had a 3.7 percent increase — the strongest since November 2007, when sales grew 4.9 percent by that group’s measure.

Had the weather been better, the results would probably have been even more robust. Retailers have a tendency to blame snow and rain for lackluster sales. But Michael McNamara, vice president for research and analysis at SpendingPulse, an information service of MasterCard Advisors, said this time the retailers’ lament was justified. He pointed out that sales in the Northeast and Middle Atlantic states — hit by repeated storms — account for about 25 percent of all retailing in the United States.

Macy’s, for instance, reported a 3.7 percent increase at stores open at least a year but said that its February increase would have been about 5 percent if not for the storms.

The retailing industry’s 4 percent increase in February was the best monthly percentage jump that the chains had collectively posted since the end of 2007. But that does not mean the stores have returned to the sales levels they hit at the peak of the boom. Sales fell so far in the recession that stores have climbed only part of the way back fast payday loans.

Still, the improvement last month was not only pervasive, it included categories of merchandise that had been hurt most by the downturn.

For example, sales of luxury goods not including jewelry peaked in 2007, and while they have yet to climb back to that level, they rose by double digits last month. Sales of luxury goods increased 15.2 percent year-over-year, according to SpendingPulse. “You’re just growing off of an absolutely tiny sales base last year,” Mr. McNamara said.

The February results continue a positive trend for the sector. Sales were up 8.1 percent in January and 5.5 percent in December, compared with the same months the previous year.

February sales at Saks stores open at least a year, a measure of retail health known as same-store sales, increased 2 percent. Same-store sales in the specialty retail segment of Neiman Marcus, which includes Neiman Marcus and Bergdorf Goodman stores, increased 5.1 percent. At Nordstrom, which offers a wider range of prices than Saks and Neiman Marcus, sales rose 10.3 percent.

As expected, stores that sell brand names at a discount thrived. Analysts said that while luxury retailing was enjoying an uptick, value was still king. Same-store sales rose 11 percent at Ross Stores and 10 percent at TJX Companies, which owns chains like TJ Maxx, Marshalls and Home Goods.

Other clothing purveyors showed improvement. Same-store sales climbed year-over-year at nearly every major department store chain, a long-struggling sector, including Macy’s and Kohl’s (both up 3.7 percent), Dillard’s (up 2 percent), J. C. Penney (up 1.2 percent) and Bon-Ton (up 0.5 percent). Stein-Mart was an exception, posting a 9.3 percent decline.

There were also increases at most specialty clothing stores and retailers that cater to teenagers, including Aeropostale (up 7 percent), American Eagle Outfitters (up 6 percent), Buckle (up 5.1 percent), Wet Seal (up 4.7 percent) and Gap (up 3 percent).

Abercrombie & Fitch, the worst-performing chain for much of the recession, reported a 5 percent same-store sales increase.

Same-store sales rose by double digits at Zumiez (up 11.2 percent) and Limited, which owns chains like Victoria’s Secret and Bath & Body Works (up 10 percent). Hot Topic was an exception, with sales sinking 7 percent.

Yet even as some consumers bought discretionary items like shirts and sneakers, they continued to be frugal-minded, driving sales at stores that sell food and other necessities at low prices.

Same-store sales were strong at discount chains like Costco (up 9 percent), BJ’s Wholesale Club (up 7.5 percent), and Target (up 2.4 percent). Wal-Mart, the nation’s largest retailer, does not report monthly sales. Costco said in a statement that customer traffic increased by about 3 percent and that the average transaction amount rose 1 percent.

The International Council of Shopping Centers expects the industry to post a 2.5 percent same-store sales increase in March. Easter, which is a week earlier this year than last, will most likely help increase sales. So might tax refunds.

Despite Storms, Stores Beat Expectations With Relatively Strong Gains

NEW YORK – An industry trade group says the manufacturing sector expanded in February for the seventh straight month, but at a slower pace than in the previous month.

The Institute for Supply Management said Monday its manufacturing index read 56.5 last month, slightly slower than the 58.4 growth in January. It was also slower than the 58 level expected by economists polled by Thomson Reuters.

A reading above 50 indicates expansion guaranteed approval cash loans. It was the seventh consecutive month of growth.

ISM says its employment measure grew for the fourth time in five months.

A pickup in business investment in equipment and software, increases in exports and slower cutbacks of inventories is helping drive production gains.

Manufacturing grows in Feb., but at slower pace

LONDON (MarketWatch) — The European Commission on Monday denied reports that a European Union plan was in the works to provide 20 billion to 25 billion euros ($27 billion to $33.8 billion) in aid to Greece as uncertainty lingers over how Athens’ European partners plan to ensure the nation will meet its debt obligations.

The Focus Will Be On Greek Bond Yields This Week

An expected bond offering will gauge investor appetite for Greek paper. If yields rise too far the country’s debt problems will get worse and the euro will suffer.

A weekend report in Germany’s Der Spiegel magazine and a story reported by the Financial Times Deutschland on Monday said Germany was working with its E.U. partners on a package.

“There is no such plan because Greece has not requested a single euro in financial aid,” a spokesman for the European Commission, the E.U.’s executive arm, told a news conference in Brussels, according to Reuters.

A spokesman for the German Finance Ministry said no decision had been made regarding aid for Greece, reports said.

The euro saw choppy trade and changed hands in recent action at $1.3610, little changed versus the U.S. dollar. The single currency has been under heavy pressure amid sovereign-default worries, dropping around 10% versus the dollar since November.

It remains unclear what authorities plan to do if investor confidence takes another hit, said Kenneth Broux, market economist at Lloyds TSB.

“I think the ECB and the E.U. are still very unclear about what the assistance would look like. And I think that is weighing on the market,” he said.

European Union leaders earlier this month pledged to support Greece, but offered no details of how an aid package would work. E.U. finance ministers last week said Greece must show progress toward slashing its budget deficit in a report due on March 16, or have further deficit-reduction measures imposed on top of the government’s austerity program.

Toe-dipping

Greece, meanwhile, is expected to put forward a 3 billion to 5 billion euro syndicated 10-year-bond issue as early as this week, the Financial Times reported on Saturday.

Such a move would allow Greece to “dip its toe in the water” and could prove to be a decisive moment for market sentiment, said Peter Dixon, economist at Commerzbank.

“Either it would confirm the view from Athens that the government should comfortably be able to raise the required funds, or it would trigger the need for support from other euro-zone countries,” he said.

Greek Prime Minister George Papandreou on Sunday told the BBC in a television interview that the country isn’t looking for an E personal humidifier.U. bailout, saying that the nation instead needs political support as it attempts to slash its deficit.

“Give us the time, give us the support — and I’m not talking about financial but political support — in order to show you that what we’re saying is being implemented and we are credible again,” Papandreou said.

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“We don’t have at this point a need for borrowing. Our borrowing needs are covered until mid-March. What we’re saying is simply that we need the help so we can borrow at the same rate as other countries, not at the high rates that undermine the possibility for” cutting the deficit, he said.

Greek government bonds have come under heavy pressure since late last year after it was revealed the nation’s 2009 deficit was near 13% of gross domestic product, more than four times the euro-zone’s 3% limit.

Greek debt was downgraded by all three major ratings agencies in December and the yield demanded by investors to hold Greek 10-year debt over benchmark 10-year German bunds remains above three percentage points.

Eurostat still waiting for swaps info

Separately, Eurostat didn’t receive information from Greece regarding its use of currency swaps and its impact on the country’s deficit figures by a Feb 19 deadline, a spokeswoman for the European Union statistical agency said Monday in an email.

Eurostat received information from Greek authorities regarding a previous request from Jan. 21, but were told by Greek authorities that the requested swap-related information could not be sent due to a four-day strike by workers at the Ministry of Finance.

Eurostat on Sunday requested the information be sent “as soon as possible,” the spokeswoman said.

Olli Rehn, the E.U.’s top economic affairs official, last week ordered Greece to provide the data after news reports said Goldman Sachs had helped the government use currency swaps and other instruments designed to hide debt levels in the past.

Greek authorities have insisted the measures were allowed at the time under Eurostat rules, which were subsequently tightened.

E.U. denies Greek-aid details in the works

WELLESLEY, Mass., Feb. 19 – WELLESLEY, Mass., Feb. 19 /PRNewswire-USNewswire/ — The world faces daunting problems, from energy needs to medical research to clean water and more. Without a doubt, the answers lie in the ability of our educational system to rise to these challenges. With that goal, Babson College, Olin College of Engineering and Wellesley College will co-sponsor an interdisciplinary regional summit, "Educational Imperatives of the Grand Challenges," Wednesday, April 21, from 8:30 am to 4:30 pm in Houghton Chapel at Wellesley College (http://grandchallengesummit.olin.edu).

The summit will bring together educators, business leaders, scientists, engineers, students, government officials and policy makers to discuss the changes necessary at all levels in the educational system to prepare students with the skills and perspectives necessary to tackle global problems in energy, health, the environment and other critical areas.

The meeting is part of a national series being held in various regions of the country this spring and fall (http://www.grandchallengesummit.org) focusing on "Grand Challenges," 14 critical global problems identified by the National Academy of Engineering (NAE) that must be solved to maintain national security, improve global living standards and ensure a sustainable future (http://www.engineeringchallenges.org).

Speakers include U.S. Chief Technology Officer Aneesh Chopra, Harvard Business School "disruptive innovation" expert Clayton Christensen, Stanford economics professor and Charter Cities advocate Paul Romer, MIT appropriate technology proponent Amy Smith and Sharon Nunes of IBM's Systems and Technology Group. Award-winning NPR Correspondent Linda Wertheimer will moderate.

"This summit will be an opportunity for us to come together to show how we can prepare the next generation to address our toughest global challenges," said Babson College President Leonard A guaranteed payday loan. Schlesinger. "We also can demonstrate through this summit how working beyond our natural boundaries empowers institutions and individuals within them and ultimately can move us much closer to solving the problems our society needs solved."

"While technology will play a key role in confronting each of the grand challenges, it cannot solve them alone," said Richard K. Miller, president of Olin College. "Solving these problems will require unprecedented levels of cooperation and holistic approaches. Global solutions — not new

technologies — must be the objective, and these require innovation and cooperation among many fields."

"Modern complex problems require complex solutions, and a broader education makes those solutions possible," said Wellesley College President H. Kim Bottomly. "Insights occur when knowledge is integrated across the disciplines to approach global issues in a new way. To gain acceptance of new innovation you must understand human behavior. To develop the most appropriate innovations you must understand their social, psychological, political and economic ramifications. Engineering, business leadership and the liberal arts are a natural and powerful partnership for our times."

Provided by Newswise, online resource for knowledge-based news at www.newswise.com

SOURCE Babson College

Boston Area Colleges Sponsor Summit on Transforming Education to Meet Critical Global Challenges

LONDON (MarketWatch) — U.S. stock futures were stronger Tuesday after a three-day break, with investors returning to a rally in commodity prices, notably gold.

S&P 500 futures rose 4.4 points to 1,083.50 and Nasdaq 100 futures added 8.25 points to 1,791.50. Futures on the Dow Jones Industrial Average rose 31 points.

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U.S. stocks rose last week, with the S&P 500 rising 0.9% to snap a four-period losing run.

Investors are returning to a rally in gold prices — up some $26 an ounce in electronic trade — and firmer commodity prices across the board. In euro terms, gold rose to an all-time high of 818 euros an ounce.

The dollar index fell 0.2%. The euro recovered somewhat as European finance ministers demanded fresh budget cuts from Greece if a review of the country’s debt-slashing measures doesn’t meet approval next month.

The New York Federal Reserve’s Empire State Index for February, along with the National Association of Home Builders’ housing market index, also for February, will be released Tuesday, as will securities inflows for December easy pay day loans.

Earnings also are due from companies including Merck & Co. , Kraft Foods and Qwest Communications .

Terra Industries on Monday accepted a $4.1 billion takeover bid from Norway’s Yara. See full story.

Barclays reported a surge in profit as the U.K. bank said 2010 has started out more strongly than 2009. See full story.

Virgin Calls On Europe To Be Tougher On BA, AA

Virgin Atlantic CEO Steve Ridgway shares his views on DOT’s decision to tentatively approve antitrust immunity to British Airways and American Airlines and what Virgin’s game plan is going forward.

AMR may advance as the American Airlines parent received tentative approval for antitrust immunity on transatlantic flights with partners British Airways and Iberia, with the airline only forced to divest four slots at London’s Heathrow Airport.

Rigel Pharmaceuticals may advance after reaching a deal to license its rheumatoid arthritis drug to AstraZeneca for as much as $1.25 billion before royalties.

The pan-European Dow Jones Stoxx 600 rose 0.6%, and strong results from Westpac helped the Australian S&P/ASX 200 rise 0.5%. China, Hong Kong, Taiwan and Singapore were closed for Lunar New Year.

Indications: U.S. stock futures stronger after three-day break

HONG KONG (MarketWatch) — When China began its massive stimulus and bank-lending program, almost immediately its equity markets moved higher. But rather than this being an example of the Efficient Market Theory at work, the explanation was the more messy unintended consequences — the huge bank-lending effort was spilling directly into the stocks and not just building roads and railways.

When that stimulus goes into reverse, you might expect equity markets to follow. So far, they’re right on cue. Shanghai’s benchmark share index has fallen 9% this year, and last week, China XD Electric became the first A-share to fall on its debut in nearly four years. In Hong Kong, the Hang Seng Index is now testing the psychologically important 20,000-point level, and there have also been IPO casualties, the latest being SouthGobi , which debuted with an alarming 11% fall on Friday.

Only days ago, accountants were forecasting Hong Kong and Shanghai would again lead the world with record IPOs this year. This may need to be rethought. Already stories have been circling that regulators in Shanghai are planning another moratorium on new issues to shore up the market, while in Hong Kong, at least one IPO luncheon was abruptly cancelled last week.

As the first month of 2010 has progressed, investors have grown rattled as Beijing’s exit strategy from its stimulus program has taken on an increasingly desperate look. First we had a hike in reserve requirements for banks before it was reported that all new loans for the rest of the month had been banned, amid reports new lending had already reached 1.45 trillion yuan in the first three weeks — nearly 20% of the full-year target.

It also appeared mainland Chinese banks were scrambling to raise fresh capital and drop lending projects. Bank of China’s proposed fund raising ballooned from an initial 40 billion yuan ($5.86 billion) to a stock offering of up to 230 billion Hong Kong dollars ($29.6 billion). The new frugality has led to China shelving some of its high-speed rail infrastructure projects, according to a report last week in the South China Morning Post.

The need for Beijing to find a change of gear for the economy has taken on greater urgency after the consumer price index came in 1.9% higher for last December, up from a 0.6% rise a month earlier.

At the same time authorities do not want to stall the economic recovery. This, to some extent, is no different from governments around the world seeking a painless exit from last year’s giant stimulus programs — but for China’s unbalanced economy, withdrawal could be particularly challenging payday loan companies. According to Morgan Stanley Asia Chairman Stephen Roach, who spoke in Hong Kong recently, stimulus investment and bank lending accounted for almost 95% of China’s growth in 2009.

Another complication China faces is that, unlike many countries coming out of the deep global recession, it has to tighten into a potential property-market bubble after steep price-rises last year. It may look as if it all doesn’t quite add up, although some brokers say there is no need to worry.

CLSA’s strategists argue the tightening noise is just a speed bump in a bull market, and those with a view extending beyond two months should buy more interest-rate-sensitives in China, such as property and bank stocks. They add that talk of a slowdown or “collapse” in residential property sales this month should be ignored, as the Chinese government wants to see a cooling off, as authorities hope to use the continuing residential-property development cycle to drive economic growth.

A new report from HSBC research also dismisses concerns over tightening, saying regulators are only seeking to smooth quarterly lending, not restrict loans. They suggest a good way to assess the current period of tightening is to look back to 2004, when Beijing also raised interest rates. Then, the H-share market bottomed one month after the first tightening measure with a 15%-20% correction, although less reassuringly, the A-share market entered a two-year bear market.

Fast forward to today and added into the mix is a general weakening in emerging-market equity risk appetite for global investors, as the U.S. dollar strengthens and uncertainty over new regulation on banking and capital movements overhangs the market.

We can expect news on policy coming out of Beijing to be watched closely in the days ahead. It’s odds-on that regulators will tread carefully so as not to destabilize equity markets further with planned cash calls for banks and a new listing pipeline ahead.

Still, while authorities may find its possible to efficiently control bank lending by decree — and even to do so with year-end gross domestic product numbers — stock markets and property markets are quite different animals.

Craig Stephen’s This Week in China: Low follows stimulus high in China

LONDON (MarketWatch) — European shares traded lower on Friday with investors cautious after a mixed start to the U.S. fourth-quarter earnings season.

The pan-European Dow Jones Stoxx 600 index traded down 0.6% at 257.39.

“Overall, the market has been strong since the beginning of the year and I think that we could see a bit of profit-taking,” said Stephen Taylor, strategist at Dolmen Stockbrokers.

European banks came under pressure after the release of fourth-quarter earnings from U.S. banking giant J.P. Morgan, with Societe Generale shares down 2.9%, Deutsche Bank shares down 3.7% and Barclays shares down 2.2%.

J.P. Morgan reported that it earned more than analysts expected in the fourth quarter, but its credit costs remained high and it set aside nearly $2 billion to cover consumer-loan losses. Read more on J.P, Morgan results.

“There’s still a lot of risk with financials; their balance sheets are complicated,” said Taylor.

The German DAX index declined 2% to 5,872.96, the French CAC-40 index moved down 1.3% at 3,964.34 and the U.K. FTSE 100 index fell 0.6% to 5,466.05.

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Asian stocks ended broadly higher. U.S. stocks retreated. Shares rose on Wall Street Thursday ahead of results out from Intel Corp., .

The world’s biggest chipmaker posted a jump in fourth-quarter profit and topped Wall Street estimates after higher sales for PC processors. See full story.

Carrefour , Europe’s largest retailer, rose 3.7%, after it reported late on Thursday a 1% rise in fourth-quarter sales to 25.99 billion euros. Latin American sales growth offset a stagnant performance in its home market of France.

Carrefour, which twice lowered its earnings outlook for the year, estimates operating profit of 2 free business cards.78 billion euros, down from 3.3 billion euros in 2008 but above its previous estimate of the “bottom end of the 2.7 billion euro to 2.8 billion euro range.” Read more on Carrefour.

Back with earnings-related decliners, shares of Man Group fell 6.1% in London after it said that its funds under management declined around 4% to $42.4 billion at the end of December after redemptions from institutional investors and a negative performance from its AHL fund. Read Man Group story.

Business-software giant SAP fell 3.2% after it was downgraded to equal weight at Morgan Stanley. The brokerage said the German software giant will want to re-energize its top line through more investment.

Vodafone Group shares were down 1.4%.

The wireless telecom giant’s Verizon Wireless venture with Verizon Communications lowered its basic wireless service fee by about $29 a month on Friday. Read more on Verizon Wireless move.

Autos were also lower, with Renault down 3% and BMW shares down 1.2%..

Taylor at Dolmen said he’s cautious on companies that sell relatively high-priced consumer products. “They had a good rally last year, but I think that they may underperform,” he said.

And QinetiQ shares dropped nearly 12%. The U.K. defense and intelligence group said orders from the U.K. and U.S. governments have been delayed, so the normally seasonally strong second half won’t occur. Its second-half performance is seen broadly similar to the first. Read more on order delay.

However, media stocks were higher, with newspaper publisher Daily Mail and General Trust up 5.5% on the London Stock Exchange after upgrades at UBS and Credit Suisse.

In addition, Pearson shares were up 1.4% after the publisher of the Financial Times said that its majority-owned unit, Interactive Data Corp., is mulling strategic options.

Europe Markets: Europe shares lower after mixed earnings

NEW YORK (Reuters) – Billionaire investor Wilbur Ross on Thursday said he was not considering buying American International Group's (AIG.N) mortgage insurance unit United Guaranty.

"It is certainly the case that we're not buying the division," Ross said in an interview with Reuters Insider. "We do think the mortgage insurance space is an interesting one and we hope to be in it at some point, but we have no transaction right now."

Ross, chairman and chief executive of private equity and turnaround firm WL Ross & Co, said the firm's latest fund was around 60 percent invested, and he expects it to be fully invested long before the end of the year payday cash loan.

Ross also said he was "quite possibly" interested in teaming up with Richard Branson's Virgin Money to bid for state-owned British bank Northern Rock.

Ross was part of a group led by Virgin that bid for Northern Rock in 2008.

(Reporting by Michael Erman, editing by Maureen Bavdek)

Investor Wilbur Ross not buying AIG unit

Hot News: Fed makes the case for keeping its power intact

CHICAGO (Reuters) – Cadbury's (CBRY.L) board of directors has been actively talking to the boards of Hershey (HSY.N) and other potential bidders as it seeks a rival offer to Kraft's (KFT.N) hostile takeover bid, a source familiar with the discussions said on Wednesday.

Cadbury is seeking not only a higher price than the $16.8 billion offered by Kraft, but also a merger partner that would let the British chocolatier have some management say in a combined company, the source said payday loan company.

Spokesmen for Hershey and Cadbury declined comment.

(Reporting by Brad Dorfman; Editing by Gary Hill)

Cadbury board actively talking to potential bidders

TORONTO – The Canadian mortgage insurance business of American International Group Inc. will be sold to a private investor group headed Ontario Teachers’ Pension Plan, the groups said Tuesday.

Terms of the transaction were not disclosed.

AIG’s sale of the Canadian mortgage division is the latest business unit to be sold by the insurance giant, which has been selling assets and spinning off divisions in an effort to help repay a government bailout package received last year when it was on the brink of collapse.

AIG United Guaranty Mortgage Insurance Company Canada, based in Toronto, is a leading mortgage provider in Canada with assets of about $264 million.

Teachers’ Private Capital is the private investment department of the Ontario Teachers’ Pension Plan, the largest single-profession pension plan in Canada. It is an independent corporation responsible for investing the fund’s assets and administering the pensions of Ontario’s 284,000 active and retired teachers.

AIG, based in New York, was bailed out by the government last fall at the peak of the credit crisis free online credit report. As losses continued to pile up, the government eventually extended AIG an aid package worth more than $180 billion. The government also received a stake of almost 80 percent in AIG in return for the support.

Just last month AIG said it would slash the amount of money it owes the government by $25 billion when it gives the government preferred equity stakes in two of its life insurance companies, American International Assurance Co. and American Life Insurance Co.

The companies will be placed into special holding units as AIG decided whether to complete initial public offerings or sell them privately.

As of Sept. 30, AIG had tapped $122.31 billion of the aid package and owed the government $85.66 billion in loans. The separation of AIA and Alico would reduce the outstanding aid package to $97.31 billion and the amount owed in loans to $60.66 billion.

Shares of AIG fell 8 cents to $29.81 in morning trading.

AIG sells Canadian mortgage insurance unit

Hot News: Bankrupt Factory City Keeps Humming, Courtesy of the Kremlin

TOKYO (Reuters) – The president of Japan Airlines Corp (9205.T) said he is against a bankruptcy proceeding under a state restructuring plan and has no plans to completely withdraw the carrier from overseas flights, the Asahi Shimbun daily reported.

In an interview conducted on Friday and published on Sunday, the Asahi also said JAL President Haruka Nishimatsu preferred Delta Air Lines (DAL.N) as the carrier's overseas partner to American Airlines (AMR.N).

A government-backed turnaround fund has told JAL's main creditors it favors a bankruptcy proceeding as part of a rescue package for Asia's largest carrier by revenue, sources with knowledge of the matter have told Reuters.

But Nishimatsu is against the plan, suggesting tough negotiations ahead between the airline and the Enterprise Turnaround Initiative Corp of Japan (ETIC), the Asahi said.

"The image (of bankruptcy) would affect us and we would lose customers," Nishimatsu was quoted as saying. "If we lose recognition from customers, restructuring would be difficult and this will trouble the ETIC too."

JAL's shares hit a record low last week on expectations that it was headed for bankruptcy.

The Asahi also said Nishimatsu was eyeing an alliance with Delta and the SkyTeam airline group, ending its current ties with American Airlines and the oneworld alliance pay day loans.

The two U.S. carriers have made rival offers of financial aid, keen to gain a greater foothold in Japan and access to JAL's network to the rest of Asia.

"(Switching to SkyTeam) would involve a big process of changing systems, but (we need to consider) whether or not to value Asia," Nishimatsu told the Asahi. "In that sense, SkyTeam has many Asian carriers."

JAL has said it will make a decision on which overseas partner it will choose by early January.

Despite being burdened by unprofitable international routes, Nishimatsu ruled out a complete withdrawal from overseas flights, saying Asian routes offered business opportunities.

Several Japanese cabinet ministers have asked JAL to hand its international business over to rival carrier All Nippon Airways (9202.T), but the transport minister is opposed to the idea, the Mainichi Shimbun reported last week.

(Reporting by Chisa Fujioka; Editing by Jeremy Laurence)

JAL against bankruptcy, favors Delta offer: report

NEW YORK (Reuters) – AOL is in talks to sell its ICQ instant-messaging service to Russian investment firm Digital Sky Technologies, The Wall Street Journal reported on Sunday, citing people familiar with the matter.

According to the report, the discussions are still in the early phase and AOL has reached out to other parties. The value of the sale could be between $200 million and $300 million, the Journal said online payday loans.

A spokeswoman for AOL declined to comment on the story. A spokeswoman for Digital Sky could not be immediately reached for comment.

(Reporting by Michael Erman, editing by Martin Golan)

AOL in talks with Russian investment firm on ICQ

KUWAIT (Reuters) – Kuwait's sale of its stake in Citigroup (C.N) earlier this month was not due to a dispute with the U.S. bank, the Gulf Arab state's finance minister said in published remarks on Sunday.

Mustapha al-Shamali told al-Rai newspaper that there is no dispute between the country's sovereign wealth fund the Kuwait Investment Authority (KIA) and Citigroup.

"The exit of KIA from its stake in Citigroup for $4.1 billion was not due to any dispute between the two parties but it was an opportunistic investment," Shamali was quoted as saying direct payday loans.

The minister's comment comes days after the Financial Times said that the KIA has held internal discussions about scaling back its banking operations with Citigroup.

Last week, KIA said it had sold its stake in Citigroup, making a $1.1 billion profit.

(Reporting by Rania El Gamal; Editing by Thomas Atkins)

Kuwait finance minister says no dispute with Citi: report

SAN FRANCISCO (MarketWatch) — The retired couple met with Scott Kays in early March as the stock market continued to slide, in need of emotional support as much as financial help. They’d been burned in the meltdown and were ready to sell everything.

Kays was sure that would be a mistake, but he didn’t come down hard. “You don’t sit there and say, ‘It’s nonsense for you to feel this way,’” the Atlanta-based financial adviser explained. “I’d think something was wrong if they weren’t scared.”

Reposition your portfolio for the New Year

Bill Baldwin, president and co-founder of Pillar Financial Advisors, speaks with WSJ’s Daisy Maxey about how his company is repositioning its clients’ portfolios for 2010.

Instead Kays asked questions. He listened. He found common ground. “We’re all hurting,” he recalls telling them. “I understand that. But you can’t let your emotions make decisions for you. Emotional decisions are almost always bad decisions.”

Then Kays hung out his professional shingle and doled out investment facts and logic. Stocks were oversold and undervalued, he suggested, adding that investors likely had seen the worst. Bailing, he told the couple, would mean forfeiting a chance to make back what they’d lost.

The gambit worked. Said Kays: “I think we put enough doubt in their minds for them to question any decision to sell.” Days later, U.S. stocks began their explosive surge.

The stock market may be rational, but those who buy and sell aren’t always. All too often, emotions derail successful investment outcomes. And with studies showing that the pain of financial loss is far greater than the pleasure of monetary gain, emotions can be especially dangerous when an investment portfolio is tanking.

The best investment practitioners play Dr. Jekyll to investors’ Mr. Hyde. They appreciate that investors, faced with abrupt shifts in fortunes, can become overly despondent or euphoric and act rashly. Accordingly, they’ve learned to steer clients through emotional minefields by showing empathy — but also staying cool under pressure.

Here are three steps financial advisers say they take to keep clients on track:

1. Plan ahead

Investors’ risk capacity and risk tolerance are not always equal. Risk tolerance tends to reflect longer-term goals and how a nest-egg will be used in the future. Risk capacity is immediate — reactions to short-term uncertainty that can crack an investor’s composure and torpedo a portfolio.

Investors are more likely to stay on target if they establish their objectives in calmer times.

“Try to figure out what could go wrong and what to do with that while you still like one another,” said Norm Boone, a San Francisco-based adviser. “When things get tighter, you’ve got a means for working these things out.”

An investment policy statement can meet that need, reminding investors of the rational decisions they made before fear or greed grabbed hold. Yet all too often, the investment policy statement tends to be standard issue — boilerplate that outlines risk tolerance, asset allocation, performance objectives and the like.

That’s not good enough for Boone, who advises shredding the standard document and drafting a customized blueprint for the client absolutely free credit report. Determine the client’s investing and life goals, agree on asset allocation and portfolio rebalancing, and work to minimize surprises, he said. Rely on the investment policy statement to cement this understanding, and, importantly, to bring clarity to future communication, portfolio monitoring and allocation adjustments.

“The IPS is the central document to the investment process,” Boone said. “But it has to be a negotiated document. Otherwise it becomes meaningless to one of the two parties. The downside is it takes longer. The upside is that once you have those discussions, you build trust and confidence.”

2. Offer flexibility

Some investors feel empowered by keeping their money in separate pools, or buckets. For example, one bucket follows the core investment allocation, another holds a couple of years’ worth of living expenses in cash to help the client avoid selling in a bear market, while a third gives the account holder an outlet for his or her impulses, however irrational.

Ross Levin, an Edina, Minn.-based adviser, suggests tagging one bucket for income, one for inflation protection, and one for heirs and charity. Another, smaller bucket could be used for the client’s discretion.

The core strategy, of course, is subject to market gales, and in 2008 almost every type of bucket tipped over. Still, such an arrangement can give investors a sense of comfort and control.

“When things get crazy, some clients think they need to do something,” Levin said. “We carve out some money they can experiment with.”

3. Be a financial physician

Advisers should listen and empathize, but stay true to their beliefs. Give clients reasons to respect the advice for which they are paying.

“My role is not to dictate what the client is doing, but to give options in a way that clients can understand,” said Brian Kompelien, a Minneapolis-based adviser. “If that is done, the client has a vested interest and is more likely to stick with it when things get rough.”

When the market tanks, investors’ most extreme fear is that they will run out of money — that they will lose status, be forced to downsize, and all they worked for will be lost. That calls for an adviser who exudes warmth and understands clients’ distress, yet is cool under fire when discussing and making investment decisions.

Be reflective, not reflexive, said Meir Statman, a finance professor at Santa Clara University in California who studies investor behavior. In this way, the best advisers promote both wealth and well-being, and manage both investments and investors.

“The role of advisers is to calm and to guide,” Statman said. “When a client leaves the office, that person had better be calm and collected. Even if the diagnosis is bad — a lack of sufficient funds for retirement — they have a sense of where they stand and a plan for where to go next.”

Weekend Investor: Keeping emotions in check and portfolios on track

Bernard L. Madoff’s enormous Ponzi scheme ended on Dec. 11, 2008, when he was arrested at his Manhattan penthouse. But for some early victims, the date his crime started could matter much more than when it stopped.

A motion pending in federal bankruptcy court in Manhattan contends that Mr. Madoff’s long-term investors cannot accurately calculate their losses until they know whether any of their original profits were legitimate. And to determine that, the motion continues, they must know when the Ponzi scheme began.

The Madoff bankruptcy trustee is calculating investor losses as the difference between the cash paid into an account and the cash taken out.

But if some of an investor’s early profits were in fact legitimate, those earnings should count as part of the cash paid into the Ponzi scheme, the motion argues.

Doing that would mean that some people who do not have a valid claim now — because they took out more than they paid in — could suddenly become “net losers” who got back less than they put in.

Of the 4,903 accounts on the Madoff books, 2,568 of them are classified as net winners with no valid claims.

Depending on the size of their loss, net losers can get up to $500,000 from the Securities Investor Protection Corporation, an industry-financed reimbursement fund, and a share of whatever assets the trustee can collect.

Even some investors already eligible for SIPC compensation could get more if they were credited with legitimate profits earned before the Ponzi scheme began, the motion asserts.

The novel argument is being made by Therese M. Doherty and John Oleske at the firm of Herrick, Feinstein in New York. They represent an obscure, insolvent company called Magnify Inc., which is not related to two other identically named companies in the United States.

“I can confirm that Herrick’s client was a direct investor” with Mr. Madoff since at least 1979, Ms. Doherty said. “Our client has requested that we not further identify it in any way, or discuss the facts relating to its investments.”

The Herrick team argues that “the information available to date” points to a starting date for the fraud sometime in the early 1990s — by which point Magnify already had “a substantial amount” of legitimate profits in its Madoff account, according to the motion.

But that is only one of the publicly available answers to the question of when the fraud started.

Mr. Madoff, in the sworn statement he made when he pleaded guilty in March, said his fraud began in the early 1990s. When his key lieutenant, Frank DiPascali Jr., pleaded guilty in August, he told the judge his crime may have started a few years earlier than that, perhaps in 1989 immediate payday loans online.

Indeed, since Mr. Madoff was accused of giving special treatment to some long-term investors, it is possible that some accounts became part of the Ponzi scheme later than others.

But in court statements and filings, federal prosecutors have consistently asserted that the entire Ponzi scheme was up and running “at least by the 1980s.”

They made that estimate long before the bankruptcy trustee had reconstructed the Madoff account records for the 1980s — even now, only records going back to 1983 are completed. And prosecutors declined recently to explain why they were so certain, even though the date could be quite significant for some Madoff victims.

But other lawyers are clearly intrigued by the Magnify argument.

“It is an interesting, novel and potentially very important thesis that makes perfect sense,” said Richard Levy Jr., whose firm represents a variety of Madoff victims.

“There had to be a starting point,” Mr. Levy continued. “If it wasn’t a Ponzi scheme from the start, I don’t see how you can dismiss the legitimate profits from the initial investments.”

The Magnify motion demands that Irving H. Picard, the trustee liquidating the Madoff estate for SIPC, produce a valid starting date for the fraud before he determines the claims of investors whose accounts may predate the Ponzi scheme.

The Herrick filing also echoes more familiar arguments being made by dozens of other lawyers disputing the way Mr. Picard is calculating investor losses.

Those motions argue that Mr. Picard is violating the SIPC statute and earlier court rulings by calculating investor losses on a “cash-in, cash-out” basis rather using the balances shown on customer account statements before Mr. Madoff’s arrest.

The sum of all of those individual account balances was more than $64 billion. By contrast, Mr. Picard has said that the eligible losses in the fraud, calculated by his formula, total just over $21 billion.

This so-called net equity dispute, which has generated fierce debate among Madoff victims since last spring, is scheduled to come before Judge Burton R. Lifland of United States Bankruptcy Court in Manhattan on Feb. 2.

Lawyers on both sides of the dispute say that any decision by Judge Lifland is certain to be appealed at least to the federal appellate court in New York, which could take up to a year to reach a decision.

Mr. Picard declined to comment on the Magnify argument, saying that he would respond to it and the other pending objections in a formal answer to the court in January.

Start Date Is Critical in Ponzi Plan