Forex Exxon to sell part of Tonen stake for about $3.9 billion:sources

Forex Exxon to sell part of Tonen stake for about $3.9 billion:sources RELATED QUOTES Symbol Price Change TRI 27.82 -0.10 XOM 85.83 -0.94 By Taro Fuse and Emi Emoto TOKYO (Reuters) - Exxon Mobil (NYSE:XOM - News) plans to sell a large part of its 50 percent stake in TonenGeneral Sekiyu KK (:5012.T) back to its Japanese refining partner in a deal that could be worth about 300 billion yen ($3.9 billion), and will make an announcement as early as Monday, four sources with direct knowledge of the matter said. Exxon Mobil will retain about a 20 percent stake in TonenGeneral but the deal will mark a de facto retreat from the world's third-largest economy by the U.S. oil giant, which is focusing its resources on emerging markets and development of natural resources. The move could also spark realignment among Japan's oil refiners, which have been cutting capacity to cope with falling demand caused by a weak economy and a shift to more efficient and environmentally friendly forms of energy, analysts have said. Reuters reported earlier this month that Exxon was in talks to sell part of the stake back to TonenGeneral. TonenGeneral, which imports and distributes Exxon oil in Japan, ranks as the country's No. 2 refiner behind JX Holdings (:5020.T). Smaller rivals include Idemitsu Kosan Co (:5019.T), Cosmo Oil (:5007.T) and Showa Shell (:5002.T). Exxon and TonenGeneral aim to complete the deal around summer, the sources told Reuters on condition of anonymity. TonenGeneral will seek funds from Sumitomo Mitsui Banking Corp, Sumitomo Trust Banking, Bank of Tokyo Mitsubishi UFJ and Mitsubishi Trust Bank to buy back the stake, the sources said. ($1 = 76.7350 Japanese yen) (Reporting by Taro Fuse and Emoto Emi; Writing by Kaori Kaneko; Editing by Chris Gallagher and Ed Lane)

Earn China to reform, grow economy, IMF eyes freer yuan

Earn Chinese Vice-Premier Li Keqiang gestures as he talks to European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy at the Great Hall of the People in Beijing February 15, 2012. REUTERS/How Hwee Young/PoolView Photo Chinese Vice-Premier Li Keqiang gestures as he talks to European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy at the Great Hall of the People in Beijing February 15, 2012. REUTERS/How Hwee Young/Pool By Kevin Yao and Koh Gui Qing BEIJING (Reuters) - China cannot delay tough economic reforms, Vice Premier Li Keqiang said on Sunday, underscoring the top leadership's push for market-based change after the sacking last week of an ambitious provincial leader who wanted a bigger state role in the economy. Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable, with a focus on boosting domestic demand and pursuing structural reforms to make growth more stable and balanced. 'China has reached a crucial period in changing its economic model and (change) cannot be delayed. Reforms have entered a tough stage,' Li said, echoing comments made by Wen last week. 'We will make policies more targeted, flexible and forward-looking to maintain relatively fast economic growth and keep price levels basically stable,' Li said in a speech at an economic policy conference, attended by top Chinese officials, the head of the IMF and dozens of foreign business leaders. He said China would 'deepen reforms on taxes, the financial sector, prices, income distribution and seek breakthroughs in key areas to let market forces play a bigger role in resource allocation'. Li's renewed emphasis on reform-led growth comes after Wen said slower growth and bolder political reform must be embraced to keep the world's second largest economy from faltering and to spread wealth more evenly, promising to use his last year in power to attack discontent that he warned could end in chaos. Wen told a news conference at the end of the National People's Congress (NPC) that growth would be made more resilient to external pressures, domestic property and inflation risks deflated and 10.7 trillion yuan ($1.7 trillion) in debt racked up by local governments dealt with, while also promoting political change. He cut China's official 2012 growth target to 7.5 percent, down from the 8 percent targeted in each of the last eight years, aiming to create leeway to deliver reform of items including subsidies, without igniting inflation. China's annual rate of inflation cooled to 3.2 percent in February, below the government's 4 percent target for the first time in more than a year. But policymakers remain particularly sensitive to elevated commodity prices, given China's huge imports of raw materials. PRO-GROWTH POLICIES CRUCIAL Zhang Ping, head of the country's top planning agency, the National Development and Reform Commission, told the Sunday conference that economic policies maintaining relatively fast growth were key to the country's future. 'First of all, we need to maintain steady and relatively fast economic growth -- development is the key for resolving all problems in China,' Zhang said. The government would maintain prudent monetary and pro-active fiscal policies, and stand ready to fine-tune settings -- a consistent refrain from China's leaders since the autumn of 2011. The show of unity over pro-market reform took on new significance last week when China's central leadership moved to bolster control over the southwest city-province of Chongqing after ousting its contentious but popular chief, Bo Xilai. The calls for unity with the ruling Communist Party's top leaders were emblazoned on the front pages of Chongqing newspapers on Saturday. They made no mention of Bo, removed from power after a scandal when his Vice Mayor Wang Lijun took refuge in February in a U.S. consulate until he was coaxed out. After arriving in Chongqing in 2007, Bo, 62 and a former commerce minister, turned it into a bastion of Communist revolutionary-inspired 'red' culture and egalitarian growth, winning national attention with a crackdown on organized crime. His self-promotion and revival of Mao Zedong-inspired propaganda irked moderate officials. But his populist ways and crime clean-up were welcomed by many residents and others who hoped Bo could try his policies nationwide. Li said that while the overall trend of China's economy was stable with sound fundamentals, it faced structural obstacles that must be overcome, adding that Beijing would push forward structural reforms while encouraging technological innovations to generate new sources of economic growth. CURRENCY REFORM CARROT International Monetary Fund managing director, Christine Lagarde, dangled an additional reform carrot at the same economic forum on Sunday, saying that the yuan could become a global reserve currency with the right mix of market-oriented structural change. 'What is needed is a roadmap with a stronger and more flexible exchange rate, more effective liquidity and monetary management, with higher quality supervision and regulation, with a more well-developed financial market, with flexible deposit and lending rates, and finally with the opening up of the capital account,' Lagarde said. 'If all that happens, there is no reason why the renminbi (yuan) will not reach the status of a reserve currency occupying a position on par with China's economic status.' China, the world's biggest exporting nation and the second-largest importer, has long wanted to break the dollar's dominance as the principal global unit of cross-border trade, in part to battle internal inflation risks and also to enhance Beijing's influence on the international financial system. China's has a closed capital account system and its currency is tightly controlled. Although Beijing has increased the use of the yuan to settle cross border trade, undertaking a series of reforms in recent years to that end, yuan settlement was only about $300 billion in 2011, which Chinese exports were worth about $1.9 trillion. Li said he expected China's total trade to maintain double-digit growth this year. The government has an official target of 10 percent growth in both imports and exports for 2012. Exports are a key source of demand and jobs for China's vast factory sector and have been a principal driver of wealth creation for much of the last decade in the wake of the country's accession to the World Trade Organization. China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand drove the drop. Li said that there were some encouraging signs emerging about the pace of global economic recovery, and forecast that China's total trade would top $10 trillion in the five years 2011-2015, but added that the outlook was not certain, with efforts to resolve Europe's debt crisis still evolving. Economists expect China's annual economic growth to slow to close to 8 percent in the first three months of 2012, down from 8.9 percent in the last quarter of 2011. That would be the fifth successive quarter of slower growth and leave China on track to end the year with its weakest expansion in a decade. A raft of economic indicators in the last two weeks have signaled that China's economy is on a gentle glide lower and on course to avoid a so-called hard landing. (Writing by Nick Edwards; Editing by Don Durfee and Jonathan Thatcher)

Oil France loses AAA-rating in blow to eurozone

Oil PARIS (AP) -- France's finance ministry says Standard & Poor's has cut the country's credit rating by one notch to AA. France's loss of its AAA-rating deals a heavy blow to the eurozone's ability to fight off its debt crisis. The country is the second-largest contributor to the currency union's bailout fund. S&P in December put 15 eurozone countries on creditwatch and other downgrades were expected later Friday. The cut in France's creditworthiness could also hurt President Nicolas Sarkozy's re-election chances. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below. ROME (AP) -- Europe's ability to fight off its debt crisis was again thrown into doubt Friday when the euro hit its lowest level in over a year and borrowing costs rose on expectations that the debt of several countries would be downgraded by rating agency Standard & Poor's. Stock markets in Europe and the U.S. plunged late Friday when reports of an imminent downgrade first appeared and the euro fell to a 17-month low. The fears of a downgrade brought a sour end to a mildly encouraging week for Europe's heavily indebted nations and were a stark reminder that the 17-country eurozone's debt crisis is far from over. Earlier Friday, Italy had capped a strong week for government debt auctions, seeing its borrowing costs drop for a second day in a row as it successfully raised as much as euro4.75 billion ($6.05 billion). Spain and Italy completed successful bond auctions on Thursday, and European Central Bank president Mario Draghi noted 'tentative signs of stabilization' in the region's economy. A credit downgrade would escalate the threats to Europe's fragile financial system, as the costs at which the affected countries — some of which are already struggling with heavy debt loads and low growth — could borrow money would be driven even higher. The downgrade could drive up the cost of European government debt as investors demand more compensation for holding bonds deemed to be riskier than they had been. Higher borrowing costs would put more financial pressure on countries already contending with heavy debt burdens. In Greece, negotiations Friday to get investors to take a voluntary cut on their Greek bond holdings appeared close to collapse, raising the specter of a potentially disastrous default by the country that kicked off Europe's financial troubles more than two years ago. The deal, known as the Private Sector Involvement, aims to reduce Greece's debt by euro100 billion ($127.8 billion) by swapping private creditors' bonds with new ones with a lower value, and is a key part of a euro130 billion ($166 billion) international bailout. Without it, the country could suffer a catastrophic bankruptcy that would send shock waves through the global economy. Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos met on Thursday and Friday with representatives of the Institute of International Finance, a global body representing the private bondholders. Finance ministry officials from the eurozone also met in Brussels Thursday night. 'Unfortunately, despite the efforts of Greece's leadership, the proposal put forward ... which involves an unprecedented 50 percent nominal reduction of Greece's sovereign bonds in private investors' hands and up to euro100 billion of debt forgiveness — has not produced a constructive consolidated response by all parties, consistent with a voluntary exchange of Greek sovereign debt,' the IIF said in a statement. 'Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach,' it said. Friday's Italian auction saw investors demanding an interest rate of 4.83 percent to lend Italy three-year money, down from an average rate of 5.62 percent in the previous auction and far lower than the 7.89 percent in November, when the country's financial crisis was most acute. While Italy paid a slightly higher rate for bonds maturing in 2018, which were also sold in Friday's auction, demand was between 1.2 percent and 2.2 percent higher than what was on offer. The results were not as strong as those of bond auctions the previous day, when Italy raised euro12 billion ($15 billion) and Spain saw huge demand for its own debt sale. 'Overall, it underscores that while all the auctions in the eurozone have been battle victories, the war is a long way from being resolved (either way),' said Marc Ostwald, strategist at Monument Securities. 'These euro area auctions will continue to present themselves as market risk events for a very protracted period.' Italy's euro1.9 trillion ($2.42 trillion) in government debt and heavy borrowing needs this year have made it a focal point of the European debt crisis. Italy has passed austerity measures and is on a structural reform course that Premier Mario Monti claims should bring down Italy's high bond yields, which he says are no longer warranted. Analysts have said the successful recent bond auctions were at least in part the work of the ECB, which has inundated banks with cheap loans, giving them ready cash that at least some appear to be using to buy higher-yielding short-term government bonds. Some 523 banks took euro489 billion in credit for up to three years at a current interest cost of 1 percent. ___ Steinhauser contributed from Brussels. AP Business writer David McHugh in Frankfurt contributed.

Signals SEC probes exchanges and electronic trading firms ties

Signals SEC probes exchanges and electronic trading firms ties (Reuters) - The U.S. Securities and Exchange Commission has launched a probe into the ties between stock exchanges and certain electronic trading firms, the Wall Street Journal reported on Saturday, citing people familiar with the matter. BATS Global Markets Inc, a U.S. exchange operator that is planning an initial public offering, said in a government filing cited by the Journal that it got a request from the U.S. regulator's enforcement division for information on the use of order types and its communications with certain market participants. The SEC also asked BATS for details about its information technology systems and trading strategies, the filing said. The inquiry also was examining communications BATS has with certain members affiliated with certain stockholders and directors, the paper reported. (Reporting By Debra Sherman in Chicago; Editing by Eric Beech)

Oil Obama seeks power to merge agencies

Oil WASHINGTON (AP) -- President Barack Obama on Friday took aim at his government's own messy bureaucracy, prodding Congress to give him greater power to merge agencies and promising he would start by collapsing six major economic departments into one. Pressing Republicans on one of their own political issues, Obama said it was time for an 'effective, lean government.' Obama wants the type of reorganizational authority last held by a president when Ronald Reagan was in office. Obama's version would be a so-called consolidation authority allowing him to propose only mergers that promise to save money and shrink government. The deal would help Obama considerably by entitling him to an up-or-down vote from Congress in 90 days. Still, final say would remain with lawmakers, both on whether to grant Obama this fast-track authority and then in deciding whether to approve any of his specific ideas. 'We can do this better,' Obama declared in an event with business owners at the White House, even presenting slides to help make his case. 'So much of the argument out there all the time is up at 40,000 feet, these abstract arguments about who's conservative or who's liberal,' Obama said. 'Most Americans — and certainly most small business owners — you guys are just trying to figure out how do we make things work, how do we apply common sense. And that's what this is about.' In an election year and a political atmosphere of tighter spending, Obama's move is about more than improving a giant bureaucracy. He is attempting to directly counter Republican arguments that he has presided over the kind of government regulation, spending and debt that can undermine the economy — a dominant theme of the emerging presidential campaign. Republicans have often aligned themselves with smaller government. So politically, Obama is trying to put the onus on Republicans in the House and Senate to show why they would be against the pursuit of leaner government. From Capitol Hill, a spokesman for Sen. Mitch McConnell of Kentucky, the top Republican in the Senate, pledged Obama's plan would get a careful review. But the spokesman, Don Stewart, also said: 'After presiding over one of the largest expansions of government in history, and a year after raising the issue in his last State of the Union, it's interesting to see the president finally acknowledge that Washington is out of control.' Obama has an imperative to deliver. He made the promise to come up with a smart reorganization of the government in his last State of the Union speech last January. At the time, Obama grabbed attention by pointing out the absurdity of government inefficiency. In what he called his favorite example, Obama said: 'The Interior Department is in charge of salmon while they're in fresh water, but the Commerce Department handles them when they're in saltwater. And I hear it gets even more complicated once they're smoked.' The White House said the problem is serious for consumers who turn to their government for help and often do not know where to begin. Not in decades has the government undergone a sustained reorganization of itself. Presidents have tried from time to time, but each part of the bureaucracy has its own defenders inside and outside the government, which can make merger ideas politically impossible. That's particularly true because 'efficiency' is often another way of saying people will lose their jobs. Obama hopes to enhance his chances by getting Congress to give him the assurance of a clean, relatively speedy vote on any of his proposals. There is no clear sign that Obama would get that cooperation. He spent much of 2011 in utter gridlock with Republicans in Congress. In the meantime, Obama announced Friday that Karen Mills, the administrator of the Small Business Administration, would be elevated to Cabinet-level rank. But her job would essentially disappear if Obama has his way. If he gets the new fast-track power to propose legislation, Obama's first project would be to combine six major operations of the government that focus on business and trade. They are: the Commerce Department's core business and trade functions; the Small Business Administration; the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; and the Trade and Development Agency. The goal would be one agency designed to help businesses thrive. The White House says 1,000 to 2,000 jobs would be cut, but the administration would do so through attrition; that is, as people routinely leave their jobs over time. The administration said the merger would save $3 billion over 10 years by getting rid of duplicative overhead costs, human resources divisions and programs. The name and potential secretary of the new agency have not been determined. The point, the White House says, is not just making the government smaller but better by saving people time and eliminating bureaucratic nightmares. The idea for the consolidated business agency grew out of discussions with hundreds of business leaders and agency heads over the last several months. Brendan Buck, a spokesman for House Speaker John Boehner, R-Ohio, said streamlining government was always a potentially good idea but expressed wariness about whether Obama's plan would really help business. 'American small businesses are more concerned about this administration's policies than from which building in Washington they originate,' Buck said. 'We hope the president isn't simply proposing new packaging for the same burdensome approach.' According to the White House, presidents held such a reorganizational authority for about 50 years until it ran out during Reagan's presidency in 1984. Obama has a series of other ideas about consolidating departments across the government, to be rolled out later.

Signals Analysis: Oil price rise raises specter of global recession

Signals Analysis: Oil price rise raises specter of global recession LONDON (Reuters) - A jump in energy prices is jamming the slow-turning cogs of an economic recovery in the West, but that may be nothing compared to the economic shock an Israeli attack on Iran would cause. Oil rose to a 10-month high above $125 a barrel Friday, prompting responses from policymakers around the world including U.S. President Barack Obama, watching U.S. gasoline prices follow crude to push toward $4 a gallon in an election year. Europe may have more to fear as its fragile economic growth falters and Greece, Italy and Spain look for alternative sources to the crude they currently import from Iran, where an EU oil embargo, intended to make Iran abandon what the West fears are efforts to develop nuclear weapons, comes into force in June. In euro terms, Brent crude rose to an all-time high of 93.60 euros this week, topping its 2008 record. 'The West's determination to prevent Iran acquiring nuclear weapons is coming at a price - a price that might include a second global recession triggered by an oil shock,' said David Hufton from the oil brokerage PVM. In dollar terms, oil prices are still some $20 a barrel short of their 2008 record of $147. But the latest Reuters monthly survey will Monday show oil analysts revising up their predictions for Brent crude by $3 since the previous month. Such a change is big in a poll of over 30 analysts, and last happened at the peak of the Libyan war in May. Ian Taylor, head of the world's biggest oil trading house Vitol, told Reuters this week prices could spike as high as $150 a barrel if Iran's arch-enemy Israel launched a strike at its nuclear facilities - an option Israel has declined to rule out. 'I used to think this would never happen,' Taylor said, 'but everyone you speak to says the Israelis will have a go at striking at Iranian nuclear sites. 'The day that happens, you have to believe the Iranians throw a few mines in the Strait of Hormuz and, for a few hours at least or maybe more, I cannot see a scenario where prices would not be at that sort of level ($150).' The U.N. nuclear watchdog said Friday Iran had sharply stepped up its uranium enrichment, which Iran insists is solely for civilian purposes. Israel has warned that, by putting much of its nuclear program underground, Iran is approaching a 'zone of immunity,' but it has also said any decision to attack is 'very far off.' Wall Street bank Merrill Lynch said this week that oil prices could climb to $200 over the next five years. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> So far this year, dollar prices for Brent crude have risen by more than 15 percent, pushed up mainly by fears about Iran. The loss of supply from three small and mid-sized producers suffering internal turmoil - Syria, Yemen and South Sudan - has added to the supply worries. WEAK GROWTH, HIGH PRICES A stabilization of the U.S. economy may explain some of the rise in oil prices, but the global economy is growing far more slowly now than at this time last year, yet crude prices are just as high. World equities and oil have typically been closely correlated since 2008 because both were driven by global demand. However, as oil prices start to respond to supply problems, the correlation is evaporating, and the global economy is already paying a high price. Data published this week showed unexpectedly weak activity in Europe's most powerful economy, Germany, and in France, sparking fresh worries that the region could tip into recession. Few have forgotten that in 2008, within six months of hitting its all-time high, oil plunged as low as $35 a barrel with the onset of the global credit crisis. In the United States, demand for refined oil products is close to its lowest level in nearly 15 years, indicating that motorists are cutting back their mileage. 'The price spike is going to be a challenge for politicians in the West running for re-election,' said Olivier Jakob from the Petromatrix consultancy. He said developed countries would find it hard to justify a release of strategic oil stocks similar to what they did in 2011. Unlike a year ago, when Libyan oil exports were disrupted by a war, this year 'there is ... instead a voluntary restriction on buying from a specific country,' said Jakob. Other than a release of oil stocks, developed countries could resort to yet another round of monetary easing, to which emerging markets will respond with quantitative tightening, price controls and subsidies, said analysts from HSBC. 'In terms of fiscal health, it would seem that Asia is better placed than other regions to deal with an oil price shock,' HSBC said in a note last week.

Oil Quest for the golden cross

Oil Quest for the golden cross RELATED QUOTES Symbol Price Change MA 348.79 +0.96 XOM 85.83 -0.94 PFE 21.48 -0.15 K 49.73 -0.26 TRI 27.82 -0.10 By Rodrigo Campos NEW YORK (Reuters) - January has turned out strong for equities with just two trading days to go. If you're afraid to miss the ride, there's still time to jump in. You just might want to wear a neck brace. The new year lured buyers into growth-related sectors, the ones that were more beaten down last year. The economy is getting better, but not dramatically. Earnings are beating expectations, but at a lower rate than in recent quarters. Nothing too bad is coming out of Europe's debt crisis - and nothing good, either - at least not yet. 'No one item is a major positive, but collectively, it's been enough to tilt it towards net buying,' said John Schlitz, chief market technician at Instinet in New York. Still, relatively weak volume and a six-month high hit this week make some doubt that the gains are sustainable. But then there's the golden cross. Many market skeptics take notice when this technical indicator, a holy grail of sorts for many technicians, shows up on the horizon. As early as Monday, the rising 50-day moving average of the S&P 500 could tick above its rising 200-day moving average. This occurrence - known as a golden cross - means the medium-term momentum is increasingly bullish. You have a good chance of making money in the next six months if you put it to work in large-cap stocks. In the last 50 years, according to data compiled by Birinyi Associates, a golden cross on the S&P 500 has augured further gains six months ahead in eight out of 10 times. The average gain has been 6.6 percent. That means the benchmark is on solid footing to not only hold onto the 14 percent advance over the last nine weeks, but to flirt with 1,400, a level it hasn't hit since mid-2008. The gains, as expected, would not be in a straight line. But any weakness could be used by long-term investors as buying opportunities. 'The cross is an intermediate bullish event,' Schlitz said. 'You have to interpret it as constructive, but I caution people to take a bullish stance, if they have a short-term horizon .' GREECE, U.S. PAYROLLS AND MOMENTUM Less than halfway into the earnings season and with Greek debt talks over the weekend, payrolls data next week and the S&P 500 near its highest since July, there's plenty of room for something to go wrong. If that happens, the market could easily give back some of its recent advance. But the benchmark's recent rally and momentum shift allow for a pullback before the technical picture deteriorates. 'We bounced off 1,325, which is resistance. We're testing 1,310, which should be support. We are stuck in that range,' said Ken Polcari, managing director at ICAP Equities in New York. 'If over the weekend, Greece comes out with another big nothing, then you will see further weakness next week,' he said. 'A 1 (percent) or 2 percent pullback isn't out of the question or out of line.' On Friday, the S&P 500 (Chicago Options:^INX - News) and the Nasdaq Composite (Nasdaq:^IXIC - News) closed their fourth consecutive week of gains, while the Dow Jones industrial average (DJI:^DJI - News) dipped and capped three weeks of gains. For the day, the Dow dropped 74.17 points, or 0.58 percent, to close at 12,660.46. The S&P 500 fell 2.10 points, or 0.16 percent, to 1,316.33. But the Nasdaq gained 11.27 points, or 0.40 percent, to end at 2,816.55. For the week, the Dow slipped 0.47 percent, while the S&P 500 inched up 0.07 percent and the Nasdaq jumped 1.07 percent. A DATA-PACKED EARNINGS WEEK Next week is filled with heavy-hitting data on the housing, manufacturing and employment sectors. Personal income and consumption on Monday will be followed by the S&P/Case-Shiller home prices index, consumer confidence and the Chicago PMI - all on Tuesday. Wednesday will bring the Institute for Supply Management index on U.S. manufacturing and the first of three key readings on the labor market - namely, the ADP private-sector employment report. Jobless claims on Thursday will give way on Friday to the U.S. government's non-farm payrolls report. The forecast calls for a net gain of 150,000 jobs in January, according to economists polled by Reuters. Another hectic earnings week will kick into gear with almost a fifth of the S&P 500 components posting quarterly results. Exxon Mobil (NYSE:XOM - News), Amazon (NasdaqGS:AMZN - News), UPS (NYSE:UPS - News), Pfizer (NYSE:PFE - News), Kellogg (NYSE:K - News) and MasterCard (NYSE:MA - News) are among the names most likely to grab the headlines. With almost 200 companies' reports in so far, about 59 percent have beaten earnings expectations - down from about 70 percent in recent quarters. (Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak and Caroline Valetkevitch; Editing by Jan Paschal)

Oil Fitch cuts Italy, Spain, other euro zone ratings

Oil Fitch cuts Italy, Spain, other euro zone ratings RELATED QUOTES Symbol Price Change TRI 27.82 -0.10 Related Content People wait to enter a government job centre in Malaga, southern Spain, January 27, 2012. REUTERS/Jon Nazca People wait to enter a government job centre in Malaga, southern Spain, January 27, 2012. REUTERS/Jon Nazca NEW YORK (Reuters) - Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years. In a statement, the ratings agency said the affected countries were vulnerable in the near-term to monetary and financial shocks. 'Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status,' it said. Fitch cut Italy's rating to A-minus from A-plus; Spain to A from AA-minus; Belgium to AA from AA-plus; Slovenia to A from AA-minus and Cyprus to BBB-minus from BBB, leaving the small island nation just one notch above junk status. Ireland's rating of BBB-plus was affirmed. All of the ratings were given negative outlooks. Fitch said it had weighed up a worsening economic outlook in much of the euro zone against the European Central Bank's December move to flood the banking sector with cheap three-year money and austerity efforts by governments to curb their debts. 'Overall, today's rating actions balance the marked deterioration in the economic outlook with both the substantive policy initiatives at the national level to address macro-financial and fiscal imbalances, and the initial success of the ECB's three-year Long-Term Refinancing Operation in easing near-term sovereign and bank funding pressures,' Fitch said. Two weeks ago, Standard & Poor's downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, and pushing struggling Portugal into junk territory. With nearly half a trillion euros of ECB liquidity coursing through the financial system, some of which has apparently gone into euro zone government bonds, and with hopes of a deal to write down a slab of Greece's mountainous debt, even that sweeping ratings action had little market impact. The euro briefly pared gains against the dollar after Fitch cut the five euro zone sovereigns but soon jumped to a session high of $1.3208, according to Reuters data, its highest since December 13. Italy is widely seen as the tipping point for the euro zone. If it slid towards default, the whole currency project would be threatened. Italian Prime Minister Mario Monti, a technocrat who has won plaudits for his economic reform drive, said he reacted to Fitch's downgrade of Italy with 'detached serenity.' 'They signal things that are not particularly new, for example, that Italy has a very high debt as a percentage of GDP and they signal that the way the euro zone is governed as a whole is not perfect and we knew that too,' he said during a live interview on Italian television. 'They also say things that give a positive view of what is being done in Italy because there is much appreciation for policies of this government and this parliament,' he said. Fitch said of Italy: 'A more severe rating action was forestalled by the strong commitment of the Italian government to reducing the budget deficit and to implementing structural reform as well as the significant easing of near-term financing risks as a result of the ECB's 3-year Longer-term Refinancing Operation.' (Reporting by Rodrigo Campos, Daniel Bases, Philip Pullela and Pam Niimi, writing by Mike Peacock, Editing by James Dalgleish)