Treasuries Posting Best Returns Since 2002 as Subprime Losses Stir Concern

(Bloomberg) -- So much for the bear market in
Treasuries.

Yields on 10-year notes fell below where they started in
January after climbing to a five-year high in June. Government
securities are on track to return 5.3 percent this year, the best
performance since gaining 12 percent in 2002, Merrill Lynch & Co.
index data show.


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Wall Street CEOs See `No Clear Signs' of Crisis as Subprime Woes Intensify

(Bloomberg) -- On Wall Street, where the most
lucrative credit markets are barely limping thanks to the worst
housing slump in a decade, there isn't a chief executive officer
who will tell you there is a crisis.

A few weeks after Merrill Lynch & Co. CEO Stanley O'Neal
said he saw ``no clear signs'' that rising delinquencies on
subprime U.S. mortgages were hurting the rest of the debt
markets, borrowing costs for non-investment grade companies rose
to the highest in eight months. ServiceMaster Co., US
Foodservice and 19 other companies have canceled bond sales
because nobody wants to buy them.


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Merrill Lynch 2nd qtr profit up 31 percent

(Reuters) - The company easily beat earnings and revenue estimates. Merrill Lynch shares are down 6 percent this year. They rose more than 2 percent immediately after the company released its results, but the stock eased slightly in midday trading.




Merrill Lynch Chief Financial Officer Jeff Edwards said the company is diversified enough that it can overcome a still-shaky market for subprime mortgages and collateralized debt obligations. The company is a leading collateralized debt obligation underwriter and participates in subprime lending through its First Franklin Financial franchise.


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US STOCKS-Futures flat, Merrill rises after earnings

(Reuters) - NEW YORK, July 17 - U.S. stock index futures were
little changed on Tuesday before data on inflation and as
higher-than-expected earnings from Merrill Lynch & Co.
helped offset concern about the subprime mortgage market.




Stock futures trimmed earlier losses after Merrill Lynch,
the world's largest brokerage, reported earnings and revenue
that beat Wall Street estimates. For details, see
[ID:nN17259618]. Merrill's shares rose more than 2 percent
before the opening bell.


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U.S. Stock Futures Advance on Earnings; Merrill, Coca-Cola Gain

(Bloomberg) -- U.S. stock-index futures rose after
Merrill Lynch & Co., Coca-Cola Co. and Johnson & Johnson reported
second-quarter profit that beat analysts' estimates.

Merrill Lynch, the third-biggest U.S. securities firm,
climbed after saying higher trading revenue and investment-
banking fees increased earnings. Coca-Cola, the largest soft-
drink maker, advanced after earnings were boosted by sales in
Europe and Japan. J&J, the biggest maker of health-care products,
also gained.


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US futures hint at Wall St fall, inflation data due

(Reuters) - Earnings season is getting into full swing, with several
major blue chips due to report on Tuesday, including top
chipmaker Intel Corp , Merrill Lynch and Yahoo
Inc. .




Economic data include wholesale inflation for June, which
may give a taste of Wednesday's report on consumer inflation
that is usually more influential in reinforcing the market's
expectations on the course of U.S. monetary policy.


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UPDATE1-Genpact sees $16-$18/share price band for 35.3 mln IPO

(Reuters) - Genpact is offering about 17.6 million shares in the IPO,
while some stockholders are offering the remaining shares, the
company said in an amended filing with the U.S Securities and
Exchange Commission.




Morgan Stanley, Citigroup, JP Morgan, Wachovia Securities,
Merrill Lynch & Co., Banc of America Securities, Credit Suisse,
Deutsche Bank Securities and UBS Investment Bank were
underwriting the IPO, Bermuda based Genpact said.


Read more at Reuters.com Government Filings News

U.S. Notes Little Changed; Fed's Bernanke May Reinforce Inflation Concern

(Bloomberg) -- U.S. Treasury notes were little
changed before a speech today by Federal Reserve Chairman Ben S.
Bernanke, who may say inflation is still a risk to the economy.

Notes have fallen this month as traders bet prices for goods
and services are rising fast enough to keep policy makers from
cutting the benchmark interest rate from a six-year high.
Treasuries dropped 0.4 percent so far in July, adding to losses
in May and June, according to Merrill Lynch & Co. data.


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Korea Exchange Bank to Sell Dollar Debt After Moody's Boosts Credit Rating

(Bloomberg) -- Korea Exchange Bank, controlled by
U.S. buyout firm Lone Star Funds, plans to sell dollar-
denominated bonds after Moody's Investors Service lifted its debt
rating by three levels.

Seoul-based Korea Exchange hired Calyon, HSBC Holdings Plc,
Merrill Lynch & Co. and Morgan Stanley to arrange the sale of the
five-year floating-rate notes, according to an e-mail sent to
investors today by the underwriters. Korea Exchange will set
terms after marketing the securities to investors in Singapore on
July 11 and Hong Kong on July 12, the e-mail shows.


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UPATE 1-Validus sets IPO at 15.7 mln shares, $24-$26 each

(Reuters) - The Bermuda-based provider of reinsurance plans to sell
13.4 million shares, while stockholders plan to sell an
additional 2.2 million shares, according to an amended filing
with the U.S. Securities and Exchange Commission.




Goldman Sachs and Merrill Lynch are lead underwriters, the
filing said. Validus intends to list its stock on the New York
Stock Exchange under the symbol "VR" .


Read more at Reuters.com Government Filings News

AMB, Centennial, ECI, New York Times, Schwab, Vornado: U.S. Equity Movers

(Bloomberg) -- The following is a list of companies
whose shares are having unusual price changes in U.S. exchanges
today. Stock symbols are in parentheses after company names.
Share prices are as of 1:10 p.m. New York time.

Real estate investment trusts advanced after UBS AG said the
stocks may jump 21 percent as a group in the next 12 months and
Merrill Lynch & Co. upgraded Vornado Realty Trust (VNO US).


Read more at Bloomberg Stocks News

Bear Stearns May Take on $3.2 Billion of Hedge Fund Loans, People Say

(Bloomberg) -- Bear Stearns Cos. may take over about
$3.2 billion of loans that banks and securities firms made to one
of its money-losing hedge funds to prevent creditors from seizing
more assets, according to people with knowledge of the plan.

Bear Stearns, the biggest broker to hedge funds, offered to
assume the loans after Merrill Lynch & Co. took assets that
backed $850 million in credit lines, said the people, who
declined to be named because the proposal is confidential. Lehman
Brothers Holdings Inc. and JPMorgan Chase & Co. also put some of
their collateral up for sale.


Read more at Bloomberg Bonds News

Yen Trades Near Four-Year Low Versus Dollar on Carry Trade, Interest Rates

(Bloomberg) -- The yen traded near the weakest level
in more than four years against the dollar on speculation Japan's
lowest interest rate among major economies spurred investment
funded by loans in the currency.

Japan's yen dropped yesterday as investors put on the so-
called carry trades. A rise in U.S. stocks may spill over into
Asian equities after Merrill Lynch & Co. backed away from a
threat to dump about $850 million of securities it seized from
Bear Stearns Cos. hedge funds, easing concern over losses in the
mortgage bond market.


Read more at Bloomberg Currencies News

Merrill Backs Away From Plan to Sell $850 Million Bear Assets, Person Says

(Bloomberg) -- Merrill Lynch & Co. backed away from
a threat to dump about $850 million of securities it seized from
Bear Stearns Cos. hedge funds, according to a person with
knowledge of the firm's plans.

Merrill sold a small portion of the collateralized debt
obligations through an auction, said the person, who declined to
be identified because the decision hasn't been announced. The
firm plans to hold onto the remaining securities for now, the
person said, without being more specific.


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Most U.S. Stocks Fall on Concern About Losses in Mortgage Securities

(Bloomberg) -- Most U.S. stocks fell for a second
day on concern the paralysis of two Bear Stearns Cos. hedge
funds may spark losses in mortgage securities.

Citigroup Inc., American International Group Inc. and
Merrill Lynch & Co. led declines. Nokia Oyj, the biggest mobile-
phone maker, slipped after an analyst cut his recommendation on
the shares.


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FFCB to sell $1 billion 2-yr designated bonds Friday

(Reuters) - The joint lead managers on the sale are Merrill Lynch and
Nomura Securities International.




Read more at Reuters.com Bonds News

BHP eyeing Alcan, sources say

(Reuters) - The emergence of BHP as a possible white knight in the face of Alcoa Inc.'s $28.7 billion hostile offer for Alcan came as Alcoa's stock hit a six-year high on a report that the U.S. aluminum company, and not its Canadian rival Alcan, was a target of BHP. Alcoa stock eased to close less than 1 percent higher.




The sources told Reuters that BHP, which trades in Australia and London, has hired Merrill Lynch & Co. to explore the possibility of buying Alcan, but stressed that such a move is not definite.


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Wachovia added to lawsuit over brokerage sweeps

(Reuters) - NEW YORK, June 15 - Wachovia Corp. , which agreed last month to buy A.G. Edwards Inc. for $6.8 billion, has been added to a federal lawsuit accusing large U.S. brokerages of moving customers' idle cash into low-yielding accounts to boost profits.



The lawsuit, which seeks class-action status, says Wachovia, Citigroup Inc. , Merrill Lynch & Co. , Morgan Stanley and Charles Schwab Corp. automatically sweep cash into bank accounts that pay low rates, rather than money market or savings accounts yielding 4 percent to 5 percent.


Read more at Reuters.com Mergers News

Wall Street Gets Boost From SEC Regulation, May Earn Another $4.4 Billion

(Bloomberg) -- Never mind that Wall Street's profit
growth in the second quarter probably was the worst in two
years. A new regulation relieving capital restraints may enable
the biggest U.S. securities firms to make the rest of 2007
exceptional for shareholders.

Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch &
Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. have
the potential to earn $4.4 billion more annually as early as
next year by moving money out of safe investments into higher-
returning bets, said Dorothy Leas, a former treasurer at Paine
Webber Group Inc. and Cowen Group Inc. The earnings gain, which
would equal 14 percent of the New York-based firms' record
profits of 2006, follows a rule change that allows them to hold
less money in reserve for potential losses.


Read more at Bloomberg Currencies News

Coles Credit Default Swaps Are Attractive on Takeover Risk, Merrill Says

(Bloomberg) -- Investors should buy credit-default
swaps linked to Coles Group Ltd., Australia's second-biggest
retailer, because a takeover led by Wesfarmers Ltd. may push its
debt rating below investment grade, said Merrill Lynch & Co.

The contracts, used to speculate on a borrower's ability to
repay debt, are near the lowest since December. Three potential
bidders left a rival buyout group last week after examining Coles
Group's finances. Wesfarmers, Australia's second-biggest home
improvement retailer, has a 12 percent equity stake in Coles and
must decide whether to submit a bid this month.


Read more at Bloomberg Bonds News