Alcatel-Lucent, Bouygues, Rexel, Sanofi: French Equity Preview

The following stocks may rise or fall on the Paris stock exchange. Symbols are in parentheses after company names and prices are from the last close.

France's CAC 40 Index fell 32.26, or 0.6 percent, to 5,803.9. The SBF 120 Index also fell 0.7 percent.

Alcatel-Lucent SA (ALU FP): The world's largest maker of telecommunications equipment reports earnings before the market opens in Paris. The company may report a loss of 129.4 million euros, according to the average of nine analyst estimates compiled by Bloomberg, hurt by falling investment in wireless networks and costs to fire employees. The shares were unchanged at 6.63 euros.

Alstom SA (ALO FP): The world's second-largest train maker won a contract worth 220 million euros to supply 30 commuter trains to Spanish rail transport operator Renfe. The shares dropped 15 cents to 164.99 euros.

Colas SA (RE FP): The road-building unit of Bouygues SA, France's second-biggest construction company, said its board of directors named Herve Le Bouc as chairman and chief executive. The shares added 1.94 euros, or 0.6 percent, to 317.97 euros.

Neotion (ALNEO FP): The company, which develops decoder chips for the digital television market, postponed a planned share sale to an unnamed foreign partner. The company said it is still in talks and has 3.7 million euros in loans ready in case the talks fail. The shares fell 48 cents, or 8.7 percent, to 5.02 euros.

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BP, Celsis, Reuters, Tate & Lyle: U.K., Irish Equity Preview

The following stocks may rise or fall in U.K. markets today. Stock symbols are in parentheses and prices are from the last market close.

The benchmark FTSE 100 Index fell 47, or 0.7 percent, to close at 6,659. The FTSE All-Share Index lost 23.31, or 0.7 percent, to 3,419.32.

Ireland's ISEQ Index declined 32.34, or 0.4 percent, to close at 7,835.09.

U.K. Companies:

British Airways Plc (BAY LN): Europe's third-biggest carrier's plans to introduce an airline flying between Europe and New York may be thwarted by U.S. Federal Aviation Administration moves, the London-based Times reported, without saying where it obtained its information. BA's stock dropped 3.25, or 0.7 percent, to 434.5.

BP Plc (BP/ LN): Europe's second-largest oil company by market value is in talks with the Abu Dhabi government to find a ``green energy'' process to generate electricity, the London- based Times reported, without saying where it got its information. BP's stock decreased 11.5 pence, or 1.8 percent, to 622.5.

Celsis International Plc (CEL LN): The U.K biotechnology company whose rapid detection kits are used to test for bacteria in vaccines is announcing earnings. Celsis' stock rose 3 pence, or 1.4 percent, to 212.5.

Nord Anglia Education Plc (NAE LN): The U.K school owner is announcing earnings. Nord Anglia's stock retreated 5.75 pence, or 1.5 percent, to 378.

Resolution Plc (RSL LN): Pearl Group Ltd. urged Standard Life Plc to clarify the terms of its offer for Resolution. Resolution's stock added 1 penny, or 0.1 percent, to 729.

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Hong Kong's Hang Seng Index Extends Record; Banks, Cnooc Gain

Hong Kong's stocks rose, leaving the Hang Seng Index set for a fourth straight record close. China Construction Bank Corp. led mainland lenders higher on speculation the nation's economic boom will spur borrowing.

China Eastern Airlines Corp., the nation's third-largest carrier, climbed after profit almost doubled in the last quarter.

``The blue chips have been announcing results that are beating estimates, which is supporting the market,'' said Chris Tang, chief investment officer of Marco Polo Pure Asset Management in Hong Kong, which manages $200 million in assets.

Cnooc Ltd. climbed after crude oil yesterday topped $93 a barrel in New York. Sun Hung Kai Properties Ltd. paced declines among the city's property developers, the market's best performers of the past week, after it announced plans to sell new shares.

The Hang Seng Index added 44.97, or 0.1 percent, to 31,631.87 as of 2:56 p.m. in Hong Kong, after yesterday closing above 31,000 for the first time. The gauge has surged 55 percent since the start of trading on Aug. 20, when China said it would allow some citizens to invest directly in the city's stocks.

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Japan's Nikkei 225 Drops on Takeda Suspension; Sekisui Rallies

Japan's Nikkei 225 Stock Average fell for the first time in three days, led by shares of Takeda Pharmaceutical Co. after U.S. drug regulators recommended patient studies on one of its most promising experimental medicines be suspended.

Takeda, Japan's largest drugmaker, fell by the most in two decades and at least three brokerages cut their recommendations on the stock. Toshiba Corp. led declines by companies whose earnings disappointed investors, prompting two brokerages to lower their rating on the shares.

Indexes pared losses in the afternoon as Sekisui House Ltd. led gains by homebuilders after the Yomiuri newspaper said the government may relax regulations that slowed the construction of new homes.

``Japanese pharmaceutical companies are relatively small compared to international counterparts, so a single drug can have a big impact on earnings,'' said Masaki Iso, who oversees about $7.3 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``The negative effect from the tighter regulations has mainly hit the construction sector.''

The Nikkei 225 fell 47.07, or 0.3 percent, to 16,651.01 at the close of trading in Tokyo. The broader Topix index rose 0.72 point to 1,607.21, after dropping as much as 1 percent.

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Bond Funds With $155 Billion Imperiled If U.S. Court Voids Law

Municipal-bond investors may be owed billions of dollars, and bond funds holding $155 billion rendered obsolete, as the result of a U.S. Supreme Court fight over state tax powers.

And that might be just the beginning of upheavals in the $2.5 trillion market in debt issued by state and local governments to pay for schools, roads, sewers and other civic works.

The justices hear arguments Nov. 5 on whether Kentucky violates the Constitution by taxing income earned on out-of- state bonds while exempting interest on ones issued by its own cities, school districts and other debt-issuing authorities. Barring such preferential treatment would force 42 states, including New York and California, to either tax their own bonds or give identical breaks to out-of-state bonds.

``It would result in a substantial reconfiguration of the municipal-bond market,'' says Gerard J. Lian, executive director of the Morgan Stanley/Van Kampen tax-exempt mutual fund group, which manages $15.8 billion. In a career spanning more than two decades in the business, ``it would rank up there as the biggest event that I can remember,'' he says.

A ruling against Kentucky would let holders of out-of-state bonds demand billions of dollars in tax refunds, according to a brief filed by the other 49 states. New York alone would face $200 million in claims. The court will rule by July.

pennystockforum.org

UBS Loses Investor Confidence as Biggest Fund Manager

UBS AG, the Zurich-based banking giant that manages the most money for the rich, is getting no respect from its shareholders who are beginning to wonder what happened to their investment.

The 145-year-old Swiss icon ranks as Europe's biggest bank by assets, has Aaa-rated debt and oversees $2.8 trillion for clients, the same amount as the U.S. government's annual budget. Until two years ago, UBS avoided the volatile fixed-income securities that drove earnings to records across Wall Street.

The decision to abandon that strategy and invest in mortgages just as the U.S. housing market started to collapse erased 21 percent from UBS's share price in the past 12 months and cost the jobs of Chief Executive Officer Peter Wuffli, his finance chief Clive Standish and investment-banking head Huw Jenkins. The man charged with restoring the bank's performance, 43-year-old Marcel Rohner, must now persuade investors that UBS can combine the less predictable income of an investment bank with the stability of a money manager.

``UBS was always supposed to be stable, and this year the losses are worse than at other banks,'' said Francoise Mensi, who helps manage more than $1.7 billion at Neuchatel, Switzerland- based Banque Bonhote & Cie. and has been selling UBS shares.

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Resolution Withdraws Support for Standard Life Bid

Resolution Plc, the target of the biggest takeover fight for a U.K. insurer since 2000, dropped its support for an offer by Standard Life Plc after rival Pearl Group Ltd. made a higher bid.

Pearl increased its all-cash offer for the company to 4.93 billion pounds ($10.2 billion), or 720 pence a share, on Oct. 26 and raised it stake in Resolution to 24 percent from 16.5 percent. Resolution withdrew its backing for Standard Life's cash-and-stock bid of 713.6 pence a share that needs the approval of 75 percent of Resolution's shareholders, the company said in a statement today.

``Pearl seems to hold most the cards at present,'' Sanford C. Bernstein & Co. analyst Bruno Paulson said in an e-mailed note to clients today. Standard Life may be able to make its offer all cash and stymie Pearl by selling its Canadian operation that is valued at about 1 billion pounds, Paulson said. He rates Standard Life shares ``outperform.''

Standard Life is considering restructuring its bid for Resolution to reduce the number of shareholders needed to approve the offer for what would be the U.K.'s biggest insurance takeover since CGU bought Norwich Union Plc for 7.4 billion pounds in 2000 to create Aviva Plc, Britain's largest insurer.

microcapreview.org

Ospraie's Anderson Dives Into Commodities, Survives Swoon

For Dwight Anderson, it was the kind of death-defying ride he hadn't experienced since the last time he jumped out of a helicopter on skis in Alaska. In the first five months of 2006, Anderson's commodities hedge fund firm, New York-based Ospraie Management LLC, suffered a series of setbacks that led to the closing of one of its funds and a 19 percent loss in Anderson's flagship $3.6 billion Ospraie Fund. ``Every single major position we had -- equities, agriculture, energy, precious metals and base metals -- lost money,'' says Anderson, 40, referring to losses in April and May 2006. ``It was highly stressful. You just feel a fatigue in your whole body.''

Ospraie, the world's biggest commodities hedge fund firm, with $7 billion under management, recovered from that crisis -- only to be hit by another much less severe downdraft in July and August, when the U.S. credit markets seized up in response to rising defaults in subprime mortgages. ``August was a very difficult month for commodity hedge funds,'' says David Friche, portfolio manager at Geneva-based Banque SYZ & Co., which invests more than $8.5 billion in hedge funds. ``The fundamentals of demand and supply weren't in place, and people were selling commodities just to get cash.''

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India May Keep Interest Rates Unchanged Amid Capital Controls

India's central bank will probably keep all three of its policy rates unchanged for the second time this year amid expectations curbs on foreign capital will prevent excess cash from reigniting inflation.

The Reserve Bank of India will hold its overnight borrowing rate at 6 percent and leave its lending rate at 7.75 percent, according to all but three of 22 analysts in a Bloomberg survey. Fifteen expect no change in the level of reserves lenders must set aside. The decision is due at noon in Mumbai tomorrow.

Governor Yaga Venugopal Reddy has managed to drag inflation down to a five-year low by raising interest rates nine times since October 2004 and lifting the cash-reserve ratio on four occasions. He's now getting help from the stock-market regulator, which is clamping down on record foreign inflows that have pushed the rupee to a 9 1/2-year high and increased money supply.

learnstock-market.com

Absolute Capital Says Investors Back Changes to Funds

Absolute Capital Management Holdings Ltd., the hedge-fund manager that halted withdrawals after its investment chief quit, said shareholders in four funds backed a restructuring that restricts redemptions for a year.

Absolute Capital stopped withdrawals from seven equity funds after co-founder and co-chief investment officer Florian Homm, 48, quit last month. Following Homm's abrupt departure the company's shares dropped by two-thirds and investors tried to remove $100 million.

The day after Homm left, the company told investors that the funds held over-the-counter U.S. stocks that couldn't be sold at the prices the firm had on its books. During meetings in the Cayman Islands on Oct. 27, investors in four funds voted in favor of restricting withdrawals to allow time to sell the illiquid securities, the company said in a Regulatory News Service statement today.

``The investors are being held hostage,'' said Colin McLean, who helps oversee about $1.8 billion at SVM Asset Management in Edinburgh. ``They didn't really have a choice.''

microcaparticles.com

Treasury Rally Augured by Aversion to Borrowing Costs

The real mavens in the U.S. bond market may be your next-door neighbors, and they say now's the time to buy Treasuries.

Twenty percent of Americans who say it's a bad time to buy a house cite high interest rates as a reason, according to a monthly survey of consumers by the University of Michigan in Ann Arbor. That threshold has been exceeded five other times since 1988, each followed by a rally in Treasuries.

While more than 80 percent of the economists surveyed by Bloomberg expect Treasury prices to fall this year, consumer attitudes suggest bonds are a bargain. The last time this many participants said borrowing costs were too high was in July 2006, just as 10-year yields started to decline by more than half a percentage point. Before then, consumers anticipated bond market gains in 1989, 1990, 1995 and 2000.

earnwithmicrocap.com

O'Neal Ouster Makes Mess of Maternal Merrill Lynch

Losing a lot of money for shareholders is the surest way to end a career on Wall Street, as Merrill Lynch & Co.'s Stan O'Neal found out this month after the embattled chief executive officer delivered the worst news in the firm's 93-year history.

The third-quarter loss of $2.24 billion, or $2.82 a share, was about six times more than O'Neal acknowledged on Oct. 5 and derived from $8.4 billion of writedowns for the subprime mortgages, asset-backed bonds and loans gone bad under his watch.

Merrill's result, coming during a credit market shakeout that triggered a run on a British bank and caused Switzerland's largest financial institution to fire its CEO, was the biggest quarterly debacle in the history of the securities industry. That was enough for the 11-person board, nine of whom were handpicked by O'Neal during his five years as CEO, to make it clear the 56- year-old grandson of a former slave is leaving, possibly as early as today, according to a person with knowledge of the directors' discussions.

For Merrill, a firm that over nine decades built a corporate culture that promoted from within and gently nudged its chiefs into distinguished retirement, O'Neal's ouster is an abrupt departure. To his predecessors, many of whom resented his penchant for getting rid of dozens of Merrill loyalists, the losses are a painful reminder of how much has changed at the brokerage they used to call ``Mother Merrill.''

pennyinvest-u.com

Alibaba Raises $1.5 Billion in Share Sale, People Say

Alibaba.com Ltd. raised $1.5 billion in the second-biggest initial public offering sale of an Internet company after Google Inc., said two people with direct knowledge of the matter.

Investors sought more than 180 times the number of shares on offer, the people said. Alibaba.com, the operator of China's largest trading Web site for companies, and its parent sold 858.9 million shares, a 17 percent stake, at HK$13.50 apiece in Hong Kong, the people said. That values Alibaba at about $8.8 billion.

The sale by Hangzhou-based Alibaba, the biggest by a Chinese Internet company, underscores the potential for growth in China. The country may overtake the U.S. as the biggest Web market by users next year, analysts said. The IPO also may lure other local Web businesses to sell stock in Hong Kong, where the Hang Seng Index has jumped 57 percent this year.

``Alibaba is certainly among the most interesting issues to come to market in a long time, given the firm's unique market position, exceptional growth opportunities, and high barriers to competitive entry,'' said Jim Oberweis, who helps oversee $3 billion as president of Oberweis Asset Management Inc. in Lisle, Illinois. Oberweis ordered Alibaba shares.

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South African September Credit Growth Slows to 22.5%

South African credit growth slowed to an annual 22.5 percent in September as higher interest rates and stricter borrowing laws slashed spending on cars and furniture.

Borrowing growth by households and companies slowed from a revised 23.2 percent in August, the Pretoria-based central bank said. Credit was expected to expand 21.6 percent, according to the median estimate of 13 economists surveyed by Bloomberg.

The Reserve Bank increased its benchmark interest rate three times this year to 10.5 percent, concerned that strong consumer spending will stoke inflation. Credit growth in excess of 20 percent for almost two years, and inflation above the 3 percent to 6 percent target range for six months, have added to pressure on the central bank to raise interest rates further.

``There's a moderation in the credit numbers, but not a collapse,'' said Monale Ratsoma, an economist at Absa Group Ltd., South Africa's third-largest bank. ``Inflation dynamics are not looking good. The risks for interest rate hikes have increased significantly.''

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