Merck, Schering-Plough's Vytorin Misses Study Goal

(Bloomberg) -- Merck & Co. and Schering-Plough Corp. said their combination cholesterol drug Vytorin did no better job of reducing the risk of stroke by clearing arteries of plaque buildup than did Zocor, an older generic medicine that forms part of Vytorin.

The study examined the carotid artery and found ``no statistically significant difference between treatment groups,'' the companies said in a release distributed today by Business Wire. If that artery is blocked, it can cut blood supply to the brain and cause a stroke. The 720-person trial, called Enhance, is looking at the highest possible dose of Vytorin for patients with a genetic predisposition to high cholesterol.

The drugs had similar safety profiles, the companies reported. The results were submitted to the American College of Cardiology for presentation to a meeting in March.

 

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Mine go ahead for Uranium One

(FIN24) - Uranium One, the Canada-based uranium producer with a secondary listing on the JSE, on Friday received Australian governmental approval to proceed with the establishment of a new uranium mine.

The mine will be developed at Uranium One's Honeymoon Uranium Project, near Broken Hill in South Australia, at a capital cost of A$66m or R401m.

"Construction work on infrastructure at the Honeymoon site will be carried out according to our schedule of commencing production later this year," the company was quoted as saying by the Australian Associated Press (AAP).

The mine, which was rubber-stamped by the Uranium One board in August 2006, is expected to produce up to 400 tonnes of uranium oxide annually and generate about A$40m or R243m a year in exports.

Australia's fourth uranium mine will have a life of up to seven years. With nearly 40% of the world's uranium, Australia has the potential to make a major contribution to security in global energy supplies.

"Our industry remains optimistic that, over time, it will be able to expand operations to help meet the world's clean energy needs and, at the same time, help offset the cost of structural adjustment that may accompany Australia's own efforts to deal with its greenhouse emissions," Australian Uranium Association executive director Michael Angwin told AAP.

The Australian government's approval of the Honeymoon uranium mine comes after last year's decision by Australia's new federal government to ban the construction of nuclear power reactors, but allow additional exports of uranium to other countries.

Uranium One originally expected to start off production at Honeymoon in the first quarter of 2008, but in August said this would be delayed to the second quarter after a decision to modify the technology used in the treatment plant.
 

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U.S. Stocks Decline; American Express, Tiffany Fall on Outlooks

(Bloomberg) -- U.S. stocks fell as lower-than- estimated profit forecasts at American Express Co. and Tiffany & Co. heightened concern the economy is shrinking and sent the Standard & Poor's 500 Index to its worst start since 1991.

American Express, the third-largest U.S. credit-card network, fell in New York Stock Exchange trading after its projection for first-quarter earnings trailed analysts' estimates by 3.2 percent. Tiffany, the second-biggest luxury jewelry seller, lost the most in more than three years after holiday sales growth shrank to 8 percent. Countrywide Financial Corp. retreated after Bank of America Corp. agreed to buy the mortgage lender for less than its market value.

The Standard & Poor's 500 Index slipped 9.68, or 0.7 percent, to 1,410.73 as of 12:52 p.m. in New York, extending its decline this year to 3.9 percent. The benchmark for U.S. equities has dropped for three straight weeks, the longest streak since August. The Dow Jones Industrial Average decreased 163.79, or 1.3 percent, to 12,689.3. The Nasdaq Composite Index dropped 28.17, or 1.1 percent, to 2,460.35. About two shares declined for every one that rose on the NYSE.

``There was this perception that the upper-end consumer was resistant to the economy, and that may be starting to roll over,'' said Matthew Kaufler, who helps manage $2.6 billion at Clover Capital Management in Rochester, New York. ``Housing has been in recession, the financial institutions are also feeling it, and now you have signs that the consumer is starting to buckle. We seem to be in a rolling recession.''

 

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Tony Blair to join JPMorgan: source

(Reuters) - Former British prime minister Tony Blair is expected on Thursday to join U.S. bank JPMorgan Chase & Co Inc as a senior adviser, according to a person familiar with the situation.

JPMorgan declined to comment. The Financial Times in London first reported the move on its Web site, saying it would be the first of a series positions Blair expects to take in the private sector.

Blair, a key ally of U.S. President George W. Bush, was replaced last year by Gordon Brown as prime minister amid growing discontent over Great Britain's policy in Iraq.

Details of Blair's duties with JPMorgan, the third largest U.S. bank, were not immediately available.

 

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Citigroup and Merrill in talks for foreign capital: report

(Reuters) - Citigroup Inc. (C.N: Quote, Profile, Research) and Merrill Lynch & Co Inc. (MER.N: Quote, Profile, Research) are in discussions to receive more capital from investors, primarily foreign governments, The Wall Street Journal reported on Thursday.

Citigroup could get as much as $10 billion, likely all from foreign governments, while Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund, the report said.

The report also said Citigroup's board is expected to discuss cutting the firm's dividend in half, a move that could save it more than $5 billion a year.

Representatives were not immediately available for comment at either bank.

U.S. banks have been wrestling with huge subprime mortgage losses, prompting some to seek cash from sovereign wealth funds

 

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Recession fears are growing

(Reuters) - Expectations for the weakest consumer spending performance in 17 years during 2008 kept the odds of a recession at nearly 40 percent, a survey of top forecasters showed on Thursday.

Panelists surveyed by the Blue Chip Economic Indicators newsletter have the odds of a recession in the next year at 38 percent, a little weaker than the 39 percent odds forecast a month ago.

But the most recent survey was taken ahead of December's grim unemployment report and the newsletter stated that growth forecasts would have been weaker if taken after release of that data.

"The January 4th news of the first decline in private sector nonfarm payrolls since July 2003 and whopping 0.3 of a percentage point jump in the unemployment rate during December no doubt caused some of our panelists to further trim their forecasts of economic growth this year and heightened speculation about the possibility of a recession," the newsletter stated.

"Whether or not the economy is already in a recession, about to enter one, or manages to muddle through without one, will only be known in the fullness of time," the newsletter wrote.

Based on the Jan 2-3 survey of economists -- taken a day ahead of the government's weak employment report that showed a huge uptick in the December unemployment rate and the weakest job growth in more than four years -- consumer spending this year is expected to grow at the weakest annual pace since 1991.

 

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Freddie Mac's Strength Rating May Be Cut by Moody's

(Bloomberg) -- Freddie Mac, the U.S. mortgage company that reported its biggest loss last quarter, may be downgraded by Moody's Investors Service because the damage from loan defaults could be worse than the ratings company expected.

Moody's said it may lower Freddie Mac's financial strength rating from A-, the second-highest grade. The McLean, Virginia- based company's top Aaa senior long-term debt rating and the Prime-1 rating for its commercial paper or short-term IOUs won't be cut, Moody's said.

Chief Executive Officer Richard Syron has attempted to shore up Freddie Mac's finances by selling $6 billion of preferred stock, slicing its dividend in half and reducing its mortgage assets by $30.9 billion to $701.4 billion in the three months to Nov. 30. The government-chartered company may need to take similar steps again, Moody's said.

Freddie Mac ``may experience higher credit losses than Moody's previous expectations,'' Moody's analysts led by Brian L. Harris in New York said in the report late yesterday. ``In its review, Moody's will focus on Freddie Mac's asset quality and the potential that the company may experience an elevated level of credit charges over the near to medium term.''

Freddie Mac, which owns or guarantees one in five U.S. home loans, and larger competitor Fannie Mae are suffering as the worst U.S. housing slump in 27 years increases defaults. More than 100 mortgage lenders were shut, scaled back or sold last year as U.S. home foreclosures rose to the highest on record.

`Credit Stress'

``People may regard the financial strength rating as a signal as to whether the agency is becoming more or less positive on a particular institution, and that may feed through to the debt rating,'' said Simon Adamson, a financial services analyst at CreditSights Inc. in London.

Any downgrade to Freddie Mac's financial strength rating is unlikely to be severe enough to result in a cut to its senior debt ranking, Moody's said.

U.S. home prices may fall 12 percent from their peak through 2010 in ``the toughest housing correction in our lifetimes,'' Fannie Mae Chief Executive Officer Daniel Mudd said this week.

``Credit stress is most likely to occur in the company's guarantee portfolio,'' Moody's said.

The New York-based rating company's financial strength rating measures the likelihood a company will need financial assistance from a third party, such as the government or its shareholders.

 

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