Business & Money News

Premier Ed Stelmach begins laying out his plans for Alberta’s energy royalties tonight in a televised address, his first official response since a divisive report was issued five weeks ago.

A government-appointed panel rocked the oil and gas industry when it concluded Albertans were not getting their fair share, and called for the royalty rates charged to energy companies to increase by 20 per cent or about $2 billion a year. Premier Ed Stelmach speaks to reporters in Edmonton Tuesday.
(CBC)

Oil and gas companiesoppose any changes, coming out with almost daily proclamations that royalty hikes will force them to cut jobs and billions of dollars in investment in booming Alberta.

Stelmach has said the big oil lobbying won’t intimidate him, but Alberta NDP Leader Brian Mason doesn’t buy it.

“I haven’t heard him say it lately,” said Mason. “He gave the oil industry a whole month to mount their campaign. He’s created a political situation that’s very difficult for himself.”

The premier says the government’s response will be balanced between what Albertans deserve for the province’s resources, and the interests of the big oil and gas companies. ‘He’s created a political situation that’s very difficult for himself.’Brian Mason, Alberta NDP leader

“Everybody writes about the pressure, but this is just part of the job of serving the province as premier,” Stelmach said.

His firsttelevised addressto the province, recorded earlier,begins at 6:40 p.m. MT. He will release more details of his royalty responseat a news conference Thursday afternoon.

Political watchers believe the royaltyregime puts Stelmach’s leadership to the test, and may turn out to be a definingissue for the premier, who has had the top job for just 10 months and is rumoured to be gearing up for a fall election.

Doubts surrounded the future of Iran’s foreign minister, Manouchehr Mottaki, yesterday after the departure of the country’s chief nuclear negotiator appeared to signal a significant power shift to President Mahmoud Ahmadinejad. A day after Ali Larijani resigned as secretary of the supreme national security council, speculation grew that the foreign minister, a career diplomat, may be the next to go as the president tightens his grip on nuclear policy.

Mr Larijani quit after differences with the president over Iran’s negotiating strategy. Despite being staunchly opposed to abandoning the country’s uranium enrichment programme - which the west suspects is designed to build a nuclear bomb - Mr Larijani favoured diplomatic engagement to relieve international pressure, in contrast to the president’s defiant approach.

Western diplomats in Tehran were adopting a “wait and see” approach yesterday to the appointment of Mr Larijani’s successor, Saeed Jalili, 42, a hawk and close ally of the president. But analysts said the president, who has declared Iran’s nuclear case “closed”, had gained control over the issue and predicted a more inflexible posture in the face of UN security council demands to suspend enrichment.

The foreign minister is believed to have been frozen out of major decision-making, and rumours of his impending departure have circulated for weeks. “Mr Mottaki has a diplomatic background, but the president is looking for people with a special military and intelligence background,” said a political analyst, Issa Saharkhiz. “They plan to give a tough, uncompromising reaction to the UN security council sanctions, and for this they want people with less diplomatic backgrounds and who least believe in dialogue with western nations.”

Mr Larijani played a key role in the release of the 15 British sailors and marines who strayed from Iraq into Iranian territorial waters last spring. That paved the way for a secret meeting in Europe between him and Tony Blair’s foreign policy adviser, Nigel Sheinwald.

But the Foreign Office played down the significance of the move. “At the end of the day I don’t think it’s a question of individuals,” a spokesman said. “The Iranians are quite clear on what the international community expects of them.”

U.S. Treasuries ended little changed on Friday, but posted their best month in more than five years as investors saw tighter credit markets inevitably pushing the Federal Reserve toward an interest rate cut.

Bonds traded lower through much of the day Friday as investors turned from the perceived safe-haven of government debt to buy stocks after Federal Reserve Chairman Ben Bernanke bolstered hopes of an interest rate cut.

But bonds recovered some ground late Friday as stocks retreated from the days’s highs.

Bernanke remarks late Thursday signaled an openness to rate cuts.

Normally, expectations of lower interest rates would push bond prices higher and yields lower. On Friday however the rally in stocks through much of the day set the tone, as investors considered the possibility that lower official interest rates might throw a bit of a lifeline to struggling financial companies.

Benchmark 10-year notes were yielding 3.94%, unchanged from Thursday.

November has proven a banner month for bond prices as investors have snatched up lower risk investments. Yield on the 10-year note posted its biggest one-month fall since September 2002.

Bond traders were buzzing Friday about talk the U.S. Treasury Department was finalizing a plan with mortgage industry leaders that would hold interest payments steady for many subprime borrowers facing higher rates and possible foreclosure. But traders said they were unclear how it could work.

A benign reading in the Fed’s favored inflation measure Friday did nothing to hurt rate-cut hopes.

The government said the core personal consumption expenditure index, which does not include food and energy prices, rose 1.9% in October on a year-over-year basis, which is within the Fed perceived comfort zone for inflation of 1% to 2%.

Data on Friday also showed business activity in the Midwest expanded at a faster-than-expected pace in November, but that U.S. construction spending fell by more than expected in October.

Two-year notes traded flat in price for a yield of 3.02%, while 30-year bonds traded 29/32 lower in price for a yield of 4.39%, up from 4.34%.

(11-30) 19:16 PST Pasadena, Calif. (AP) —

A spokeswoman at the California Institute of Technology says biologist Seymour Benzer, whose groundbreaking work on genes and human behavior won him major awards and renown in scientific circles, has died at age 86.

Caltech spokeswoman Jill Perry says Benzer died of a stroke Friday morning.

Benzer’s genetics research led to major discoveries in the exploration of diseases like Alzheimer’s and Parkinson’s.

His findings also bridged the gap between DNA and the structure of the gene, which ultimately led to the Human Genome Project.

Perhaps Benzer’s best-known work was a study using fruit flies to determine how genes affect sleep patterns. Benzer and a student injected genes from normal fruit flies to fix those with sleep problems.

Watch today’s Markets Desk video.

Stocks seesawed in midday trading Tuesday as volume ran about even on the NYSE and higher on the Nasdaq.

At 1:02 p.m. the Nasdaq was up less than 0.1%. The S&P 500 was up 0.4%; the Dow was up 0.2%. The NYSE composite was up 0.7% as energy stocks rose.

The small-cap S&P 600 continued a recent trend of leading the weakness as it retreated 0.3%.

Oil futures jumped to a new record $97.07 a barrel after bombings in Afghanistan and an attack on a Yemeni oil pipeline heightened supply worries.

Metals and alternative-energy stocks also were higher.

Among the big gainers on heavy volume were Global Sources Limited (), up 0.93 to 34.37; Sunpower Corp. (), up 17.40 to 146.63; and Mastercard (), up 13.36 to 199.29.

Losers on heavy trade included Novatel Wireless (), down 4.58 to 21.84 and Citigroup (), down 1.11 to 34.79.

11:15 a.m. ET Update: Indexes Reverse Early Gains

By Vincent Mao

Stocks turned lower in early trading Tuesday as gains from a higher open faded.

At 10:55 a.m. ET, the Nasdaq fell 0.4% after rising as much as 0.6%. The Dow and S&P 500 slipped 0.1% each.

Volume was tracking lower on the NYSE and higher on the Nasdaq.

Crude oil hit a new record high of $96.80 a barrel. A sliding dollar and expectations of lower inventories fueled gains.

Yahoo () reversed early gains, falling 1.38 to 29.98. The Internet search firm was up on news that Alibaba.com nearly tripled in its Hong Kong debut. Yahoo has a 39% stake in Alibaba’s parent company and bought $100 million in Alibaba.com shares.

Baidu.com () also turned tail. Shares tumbled 14.01 to 402.87.

On the upside, SunPower () gapped up, rallying 9.77, or 7%,to a record high of 139. The solar power systems maker jumped following positive comments from RBC Capital Markets.

Mindray Medical International () jumped 1.20 to 37.83, bouncing back from Monday’s 8% decline. Credit Suisse lifted the maker of patient monitoring devices to outperform from neutral.

Ctrip.com International () gained 1.41 to a new peak of 59.47 ahead of its earnings report Wednesday. Analysts expect profit of 17 cents a share on revenue of $40.8 million.

10:15 a.m. ET Update: Stocks Higher In Early Trading

By Vincent Mao

The major stock indexes opened higher Tuesday, but they have pulled back slightly.

At 10:04 a.m. ET, the NYSE composite led with a 0.8% gain. The S&P 500 rose 0.6%. Meanwhile, the Nasdaq and Dow picked up 0.4% each.

Priceline.com () rose 1.74 to 90.74, on pace to snap a three-session decline. The online travel firm reports earnings on Thursday. Analysts expect $1.28 a share on sales of $386.1 million.

Research In Motion () climbed 2.60 to 130.57 in brisk trading. Credit Suisse upgraded the smartphone maker to outperform from neutral.

On the downside, Novatel Wireless () gapped down, tumbling 4.14, or 16%, to 22.28 in heavy trade. The network gear maker lost ground despite delivering Q3 results ahead of views.

Cooper Tire & Rubber () gapped down, skidding 2.90, or 14%, to 18.10. Before the open, the company reported Q3 earnings and sales below views.

9:15 a.m. ET Update: Higher Start On Tap For Stocks

By Vincent Mao

Stock futures pointed at a higher open Tuesday. Nasdaq futures climbed 12 points vs. fair value, S&P 500 futures gained 4 points and Dow futures rallied 32 points.

No economic reports are on tap for the day.

The dollar sunk to a new low against the euro.

Crude oil bounced back after falling 2% Monday. The December contract gained $2.24 to $96.22 a barrel, right at record highs.

Citigroup () edged lower in pre-market trading. Bank of America cut the financial services giant to neutral from buy. That’s its third downgrade of the month. On Monday, Citigroup fell nearly 5% to a four-and-a-half-year low after it said it would take up to $11 billion in write-downs.

Charles River Laboratories () jumped 5% in the preopen. The provider of clinical services to the biomedical market delivered Q3 earnings and sales ahead of views. Charles also raised its full-year profit and revenue outlook.

First Solar () vaulted 10% in pre-market trading. Late Monday, the solar cell maker signed a long-term supply contract that’s expected to generate sales of about $1 billion.

MasterCard () charged up 4% in the pre-market. Deutsche Bank lifted the credit card company to buy from hold.

WMS Industries () fell 5% in pre-open trading. Late Monday, the gaming machine maker reported fiscal Q1 earnings in line with views. But it guided Q2 sales below analysts’ estimates.