NEW YORK | Fri Sep 28, 2012 7:09pm EDT

NEW YORK (Reuters) - Hedge funds and other big speculators have pulled more than $5 billion from U.S. commodity markets, cutting their net long position for the first time in six weeks after sending oil, metals and crop prices to multimonth highs, trade data showed Friday.

The profit-taking in the week to September 25 was the biggest in four months by the so-called "money managers" in commodities, according to data issued by the Commodity Futures Trading Commission (CFTC) and calculated by Reuters.

It was the first major snap in managed money net longs that had built up since early July in anticipation of stimulus measures from the Federal Reserve and the European Central Bank.

In that period, hedge funds and other speculators pumped about $30 billion into U.S. commodities, by Reuters' estimates, creating new bullish milestones in crude oil, gold, copper and soybean prices.

Reuters' calculations of the CFTC's Commitment of Traders data showed the value of the net long position held by money managers in some 22 U.S. commodity markets fell to $112.3 billion in the week to September 25, from $117.8 billion in the week ended September 18.

The figures are calculated by Reuters based on the change in net positions from a week ago, multiplied by the contract's value at the end of the period. Because most investors trade commodities on margin, the change in the value of positions is not directly equivalent to total investment.

In contract terms, the decline during the week to September 25 was 87,955 contracts, or nearly 6 percent lower from the previous week.

OIL LEADS LOSSES, GOLD SHINES

Oil accounted for much of the loss. Reuters' calculations showed a net outflow of $3.4 billion, or 36,885 contracts, in crude oil futures held by money managers on the New York Mercantile Exchange.

Speculators were also bearish on natural gas, soybeans, raw sugar, cotton and arabica coffee -- trimming net longs or adding to net shorts in these markets.

The profit-taking did not mean that money managers were done on commodities, said some analysts, who placed high hopes on an even bigger rally down the road in markets such as gold due to inflationary pressure.

Managed money's net long in U.S. gold hit near seven-month highs on bets that major central banks would keep pumping money to stimulate growth.

"Gold is being utilized as a protest by investors against governments which are failing miserably to solve their deficit and debt problems," said Jeffrey Sica, chief investment officer of SICA Wealth Management, which has over $1 billion in assets.

Gold closed lower on Friday, but the precious metal posted its biggest quarterly gain in more than two years.

The 19-commodity Thomson Reuters-Jefferies CRB index, a bellwether for the asset class, also had its best quarter since the first quarter of 2011.

Monthly data issued separately by the CFTC on Friday showed the net length across U.S. commodity markets rose by $8.8 billion in August to $209 billion.

The CFTC figures account for only a portion of the investor capital invested in commodity markets worldwide. Much of the rest are invested in over-the-counter contracts, physical exchange funds or credit notes, or via banks, which are classified differently by the CFTC.

(Editing by Jim Marshall)

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NEW YORK | Fri Sep 28, 2012 7:09pm EDT

NEW YORK (Reuters) - Hedge funds and other big speculators have pulled more than $5 billion from U.S. commodity markets, cutting their net long position for the first time in six weeks after sending oil, metals and crop prices to multimonth highs, trade data showed Friday.

The profit-taking in the week to September 25 was the biggest in four months by the so-called "money managers" in commodities, according to data issued by the Commodity Futures Trading Commission (CFTC) and calculated by Reuters.

It was the first major snap in managed money net longs that had built up since early July in anticipation of stimulus measures from the Federal Reserve and the European Central Bank.

In that period, hedge funds and other speculators pumped about $30 billion into U.S. commodities, by Reuters' estimates, creating new bullish milestones in crude oil, gold, copper and soybean prices.

Reuters' calculations of the CFTC's Commitment of Traders data showed the value of the net long position held by money managers in some 22 U.S. commodity markets fell to $112.3 billion in the week to September 25, from $117.8 billion in the week ended September 18.

The figures are calculated by Reuters based on the change in net positions from a week ago, multiplied by the contract's value at the end of the period. Because most investors trade commodities on margin, the change in the value of positions is not directly equivalent to total investment.

In contract terms, the decline during the week to September 25 was 87,955 contracts, or nearly 6 percent lower from the previous week.

OIL LEADS LOSSES, GOLD SHINES

Oil accounted for much of the loss. Reuters' calculations showed a net outflow of $3.4 billion, or 36,885 contracts, in crude oil futures held by money managers on the New York Mercantile Exchange.

Speculators were also bearish on natural gas, soybeans, raw sugar, cotton and arabica coffee -- trimming net longs or adding to net shorts in these markets.

The profit-taking did not mean that money managers were done on commodities, said some analysts, who placed high hopes on an even bigger rally down the road in markets such as gold due to inflationary pressure.

Managed money's net long in U.S. gold hit near seven-month highs on bets that major central banks would keep pumping money to stimulate growth.

"Gold is being utilized as a protest by investors against governments which are failing miserably to solve their deficit and debt problems," said Jeffrey Sica, chief investment officer of SICA Wealth Management, which has over $1 billion in assets.

Gold closed lower on Friday, but the precious metal posted its biggest quarterly gain in more than two years.

The 19-commodity Thomson Reuters-Jefferies CRB index, a bellwether for the asset class, also had its best quarter since the first quarter of 2011.

Monthly data issued separately by the CFTC on Friday showed the net length across U.S. commodity markets rose by $8.8 billion in August to $209 billion.

The CFTC figures account for only a portion of the investor capital invested in commodity markets worldwide. Much of the rest are invested in over-the-counter contracts, physical exchange funds or credit notes, or via banks, which are classified differently by the CFTC.

(Editing by Jim Marshall)

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Fri Sep 28, 2012 6:05pm EDT

n">(Reuters) - Bank of America Corp agreed on Friday to pay $2.43 billion to settle claims it hid crucial information from shareholders when it bought investment bank Merrill Lynch & Co at the height of the financial crisis.

The settlement, among the biggest of its kind to stem from the 2008 meltdown, underscores how Bank of America is still suffering from decisions it made during the crisis, even as competitors are moving on.

The second largest U.S. bank likely lost money in the third quarter in large part because of the agreement, while other major banks, including JPMorgan Chase & Co and Wells Fargo & Co are expected to earn billions of dollars each.

As Lehman Brothers failed in September 2008, Bank of America agreed to buy Merrill Lynch. But in the weeks after that agreement, the bank tried unsuccessfully to scrap the deal. Merrill Lynch generated more than $15 billion of losses and its executives agreed to award employees up to $5.8 billion of bonuses.

Bank of America's shareholders voted to approve the deal in December 2008. After the merger closed, Bank of America shares fell sharply, and investors sued, saying Merrill's losses and bonuses should have been disclosed before the vote.

Bank of America denied the lawsuit's allegations, but CEO Brian Moynihan said the bank agreed to settle to remove uncertainty and put the case behind it.

The Merrill Lynch deal, as well as the bank's 2008 purchase of subprime lender Countrywide Financial, have ended up costing Bank of America billions, with the bank's mortgage business alone losing more than $35 billion since the Countrywide deal.

But the Merrill Lynch acquisition has also given much needed revenue to Bank of America. While the bank does not break out its results from Merrill Lynch, its wealth management and investment banking units, which owe much of their business to Merrill, generated nearly $160 billion of revenue from 2009 through June, or 43 percent of the bank's overall revenue.

Friday's settlement, which requires court approval, would resolve a case set for an October 22 trial in U.S. District Court in Manhattan. Investors sued the company and executives including former Chief Executive Ken Lewis, but Bank of America said it was footing the bill for the settlement.

At a brief hearing before Judge Kevin Castel on Friday afternoon, the judge told lawyers, "This is, needless to say, a good development," referring to the settlement. Few expect the settlement to face the obstacles that Bank of America experienced in 2009 when settling with the Securities and Exchange Commission over this same acquisition. A judge rejected the bank's initial settlement and forced both parties to renegotiate it.

LONG-SOUGHT DEAL

In September 2008, Bank of America's Lewis told his shareholders that buying Merrill Lynch was a real opportunity. The investment bank had the biggest retail brokerage on the Street, which gave Bank of America a new channel for selling products like credit cards.

As the deal started to look bad toward the end of 2008, Lewis tried to back out of it. But then-Treasury Secretary Henry Paulson pressured him to go through with the transaction. In January 2009, when Bank of America closed on its Merrill Lynch purchase, it received a $20 billion government bailout to shore up its balance sheet.

Bank of America has since repaid the money. Lewis retired at the end of 2009.

The deal helped the financial system but hurt Bank of America's shareholders, said Gary Townsend, chief executive of Hill-Townsend Capital in Chevy Chase, Maryland. Bank of America shares have slid more than two-thirds since the Merrill deal was announced in September 2008.

"It's good to get a bad tooth removed. But the question is, 'How expensive was Ken's mistake back in 2008?,'" Townsend said.

Lewis, when contacted by Reuters, declined to comment on the settlement.

The Merrill deal was valued at $50 billion when announced, but the final price was around $29.1 billion as Bank of America's shares fell.

Bank of America's acquisitions have continued to bring it pain. Since the financial crisis, the bank has agreed to pay more than $16 billion in 12 settlements with mortgage investors and other accords linked to takeovers, counting an $8.5 billion pact that still needs court approval.

On top of that $16 billion, Bank of America is on the hook for $11.8 billion in payments, mortgage modifications and loan refinancings as part of a $25 billion settlement this year over allegedly faulty handling of foreclosures.

EXPECTED LOSS

The bank expects to incur total litigation expenses of about $1.6 billion in the third quarter. It said that expense, a U.K. tax charge and a charge related to improvements in the company's credit spreads would hit quarterly results by about 28 cents per share. That would likely trigger a loss for the period. Analysts had expected profit of 14 cents per share when the bank releases results on October 17, according to Thomson Reuters I/B/E/S.

Lead plaintiffs in the lawsuit included the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teacher Retirement System of Texas. The case was originally filed in 2009 by former Ohio Attorney General Richard Cordray, now director of the U.S. Consumer Financial Protection Bureau.

Four to five million shareholders could be eligible to share in the settlement, said Dan Tierney, spokesman for Ohio Attorney General Mike DeWine. Payouts will depend on the number of shares owned, he said.

Bank of America shares slipped 9 cents to $8.88 on the New York Stock Exchange in afternoon trading.

Prior to this accord, the largest crisis-era investor class action settlement involved allegations Wachovia, now part of Wells Fargo & Co, misled investors about the quality of loans sold before the financial downturn, according to NERA Economic Consulting.

Wells Fargo agreed last year to pay $590 million to resolve that lawsuit, on top of $37 million that auditor KPMG LLP agreed to pay.

Overall, the largest securities fraud settlements in U.S. history include the $7.2 billion agreement with investors stemming from the collapse of Enron; the $6.2 billion WorldCom settlement; and the $3.2 billion agreement over the accounting scandal at Tyco International, according to Stanford Law School's Securities Class Action Clearinghouse.

Under the Bank of America settlement, the bank will also make changes to its corporate governance through January 1, 2015. Some of the changes already were part of a February 2010 settlement with the U.S. Securities and Exchange Commission, including provisions on independence of the board compensation committee and an annual shareholder vote on executive pay.

The plaintiffs' law firms leading the case are expected to apply for $150 million in fees, said Tierney, the Ohio attorney general's spokesman. The law firms include Bernstein Litowitz Berger & Grossmann; Kaplan Fox and Kessler Topaz Meltzer & Check. The fee, which would be subject to court approval, works out to 6 percent of the settlement fund.

(Additional reporting by Grant McCool and Nate Raymond in New York, Tom Hals in Wilmington, Delaware and Tanya Agrawal in Bangalore; Editing by Supriya Kurane, Jeffrey Benkoe and David Gregorio)

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Sat Sep 29, 2012 12:52am EDT

n">(Reuters) - General Motors Co (GM.N) on Friday dismissed claims made in a $3 billion lawsuit filed by Saab's parent that the U.S. automaker deliberately bankrupted the Swedish company by blocking a deal with a Chinese investor.

GM, in a response filed in the U.S. District Court for the Eastern District of Michigan, said the automaker had the legal right to approve Saab's transaction with China's Zhejiang Youngman Lotus Automobile Co.

"The nub of plaintiffs' complaint is that GM declined to approve the transaction plaintiffs proposed to enter into with Youngman," GM said in the filings. "But the relevant contracts did not permit Saab to consummate the proposed transaction without GM's approval."

GM had previously said the lawsuit -- filed last month by Saab parent Spyker(SPYKR.AS) -- was without merit.

Saab, one of Sweden's best-known brands, stopped production in May 2011 when it could no longer pay suppliers and employees. It went bust in December, less than two years after GM sold it to Dutch sportscar maker Spyker.

GM's efforts to kill any sale were made to eliminate a potential rival in China, Spyker had said in the lawsuit.

Spyker Chief Executive Victor Muller said at the time that GM "had it coming" with regard to the lawsuit. Spyker is seeking at least $3 billion in compensatory damages, as well as interest and punitive damages, and legal fees.

For months, Muller tried to pull off a rescue deal with various Russian, Middle Eastern and Chinese investors, Youngman and Pang Da Automobile Trade Co Ltd (601258.SS).

The lawsuit is being funded by an anonymous third party, who will share in any settlement, Muller has said.

Youngman previously declined to comment about whether it was involved with the lawsuit, while Pang Da said it was not.

GM, which operates in China in a partnership with state-run automaker SAIC Motor Corp Ltd (600104.SS), late last year effectively blocked deals with Pang Da and Youngman, Spyker said.

GM said it would stop supplying vehicles and technology to Saab's new owners because it would run counter to the interests of its own shareholders.

Spyker charged GM with interfering in a prospective deal with the Chinese companies by claiming it would no longer license its technology to or build cars for Saab even though the last agreement was structured to exclude the U.S. automaker's intellectual property, according to the lawsuit.

Saab had created its own vehicle platform that did not use any GM technology, so GM's statements that it would not support a deal were "intentionally false" because such support was not needed, Spyker said in the lawsuit.

In its response on Friday, GM dismissed the idea that its technology would not be shared with the other investors under the proposed Spyker deal.

"Putting aside whether this argument is factually wrong, it misses the point," GM said, adding that it had the right to terminate its technology license and supply agreements with Saab if there was a change in control of Saab with GM's prior consent.

"This right was clear and absolute, and did not depend on how GM's technology purportedly was being handled," GM said.

GM bought half of Saab -- which had been making cars since 1947 and built a small, loyal following -- in 1990 and the rest 10 years later. It decided to sell the brand in 2009 after the financial crisis and came close to closing it before Swedish Automobile, then called Spyker Cars, bought Saab in January 2010.

Despite its well-known name, Saab was a niche player whose future had been questioned by analysts. Saab was profitable in only one of the 19 years GM owned it, executives with the Detroit automaker have said.

A consortium called National Electric Vehicle Sweden AB (NEVS) earlier this month closed a deal to buy most of Saab's assets for an undisclosed sum. NEVS plans to build electric cars for the Chinese market based on the Saab vehicle platforms, starting in about 18 months.

(Reporting By Ben Klayman in Detroit; editing by Carol Bishopric)

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A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo.

NEW YORK | Fri Sep 28, 2012 10:23am EDT

NEW YORK (Reuters) - Consumer sentiment rose to its highest level in four months in September as Americans saw better prospects for the job market and economy, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's final reading on consumer sentiment rose to 78.3 from 74.3 in August, the highest level since May.

Still, it was shy of economists' forecasts for 79, according to a Reuters poll, and gave up some of the advance seen in September's preliminary reading when the index climbed to 79.2.

Consumer expectations improved strongly, rising to 73.5 from 65.1, also the highest since May. More consumers expected the unemployment rate to fall than to rise, while twice as many survey respondents expected economic growth than those that anticipated a downturn.

Gains in home values and stock prices have also helped boost confidence and sentiment among households with incomes below $75,000 was at its highest level in five years.

But Americans' assessment of current economic conditions weakened to 85.7 from 88.7 amid concerns over their own finances. Twenty-nine percent said their financial situation had improved this month, down from 30 percent in August. In the year ahead, one-in-four households expected their finances to improve.

Consumers' inflation expectations for a year from now fell to 3.3 percent from 3.6 percent, while the five-to-10-year inflation outlook eased to 2.8 percent from 3 percent.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)

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Entertainer Jay-Z performs on stage at the newly built Barclays Center in the Brooklyn borough of New York September 28, 2012. This is the first event at the new stadium.

NEW YORK | Sat Sep 29, 2012 2:45am EDT

NEW YORK (Reuters) - Rap superstar Jay-Z returned to his home borough for a sold-out concert on Friday night to open Brooklyn's new basketball stadium.

The rapper who grew up just two miles away from the new Barclays Center arena - now the home court of the Brooklyn Nets basketball team - talked about how far he had come in a show sprinkled with emotional speeches.

"I've been on many stages all around the world and nothing feels like tonight," Jay-Z told the cheering audience.

"I'm really overwhelmed by the moment," he said as he described his humble beginnings in Marcy Houses, a Brooklyn public housing project he noted was just 15 minutes away from the arena. "I can't believe that this day has come."

Jay-Z, who raps about the time he spent as a drug dealer, released his first album in 1996. He is now one of the most successful rappers in the world, owns a minority stake in the Nets and has businesses including a clothing label.

He encouraged members of the packed crowd to have their own stab at success.

"I believe everybody in the world is born with genius level talent ... Apply yourself to whatever you're genius at and you can do anything in the world," he said.

It was the first of eight Jay-Z concerts planned for the venue in the arena's first week.

Jay-Z sported the team's jersey and hat as he sang recent hits like Empire State of Mind and returned to his highly acclaimed debut album Reasonable Doubt.

The rapper, whose real name is Shawn Carter, has been heavily involved in the promotion of the 18,000-seat arena, which took years to move from concept to reality partly because it met with legal challenges and opposition from people in nearby residential areas such as Fort Greene and Park Slope.

The stadium, which started construction in 2009, will bring a major professional sports team back to Brooklyn for the first time in 55 years when the Dodgers baseball team moved away from Brooklyn to Los Angeles and became the L.A. Dodgers.

Jay-Z showed off a jersey worn by Dodgers player Jackie Robinson - also the first African American Major League Baseball player.

He paid tribute to deceased rap star and fellow Brooklyn native Notorious B.I.G. by projecting an image of him on the stage and covering two of his songs. Brooklyn hip-hop pioneer Big Daddy Kane appeared later in the evening.

Bob Dylan, Barbara Streisand and the Smashing Pumpkins are all due to appear at the Barclays Center during its first two months.

(Editing by Andrew Heavens)

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