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U.S. stocks ended a choppy day of trading lower Monday, as a dismal economic outlook overshadowed earlier optimism fueled by takeover talk.

After starting the session sharply higher and seesawing throughout the day, the Dow Jones industrial average (INDU) lost 39 points, or 0.4%, the S&P 500 (SPX) ticked down 4 points, or 0.4%, and the Nasdaq (COMP) composite dropped 20 points, or 0.9%.

It’s been a rocky ride for Wall Street over the past couple of weeks, as investors have shifted their focus between positive company news and gloomy economic readings.

Disappointing reports on jobs, manufacturing and economic activity battered confidence last week, dragging the Dow and S&P lower for the second straight week.

With little economic news on tap Monday, investors turned their attention to talk about takeover activity. But an early comeback failed to gain steam, ending in yet another down day for the three major indices.

"We’re trying to reverse some of those losses," said Steven Goldman, a market strategist at Weeden & Co. "But since economic data has been showing gradual signs of weakness there’s still an overshadowing concern that will likely keep any rally narrow and in a defensive tone."

Economy: No major economic releases were scheduled Monday, so investors were already looking ahead to the government’s revised reading of GDP due Friday, said Dave Rovelli, managing director of U.S. equities at Canaccord Adams.

Gross domestic product (GDP), the broadest measure of the nation’s economic activity, is forecast to be revised down to an annual rate of 1.4%, a significant drop from its previous reading of 2.4%.

"Everybody knows it’s going to be revised down, so everybody is nervous and just waiting for that number," said Rovelli. "But because it’s the last two weeks of August and stocks tend to drift higher when trading volume is so light, you may see the market start to rally until that GDP number comes out."

Last week, investors were hit with a slew of dismal indicators, including a report showing that weekly jobless claims surged to the highest level since November high risk personal loans.

Companies: Hewlett-Packard put in a bid early Monday for data-storage company 3PAR, offering $1.6 billion, a 33.3% premium on the offer proposed by rival Dell last week. Shares of 3PAR (PAR) spiked nearly 45%, while Dell’s (DELL, Fortune 500) stock slipped 1% and shares of HP (HP) fell 2%.

Shares of fertilizer producer Potash (POT) closed slightly higher after its board of directors told shareholders to reject a hostile takeover bid of $38 billion from mining company BHP Billiton (BHP), saying "superior offers or other alternatives are expected to emerge." Shares of BHP fell less than 1%.

The Gulf Coast Claims Facility, led by Kenneth Feinberg, will take over the BP oil spill claims process Monday. The claims will be paid using the $20 billion escrow account established by BP (BP). Shares of the oil company dipped less than 1%.

World markets: European shares closed higher. The CAC 40 in France rose 0.8%, Britain’s FTSE 100 gained 0.8% and the DAX in Germany was up 0.1%.

Asian markets slipped. Japan’s benchmark Nikkei index ended down 0.7%, the Hang Seng in Hong Kong fell 0.4% and the Shanghai Composite edged lower 0.1%.

Currencies and commodities: The dollar rose against the euro and the U.K. pound, but fell versus the Japanese yen.

Oil futures for October delivery slipped 72 cents to settle at $73.10 a barrel. Gold for December delivery edged down 30 cents to $1,228.50.

Bonds: Treasury prices were higher, and the yield on the 10-year note fell to 2.60% from 2.62% late Friday. Bond prices and yields move in opposite direction.

Market breadth: Market breadth was negative. On the New York Stock Exchange, losers outnumbered winners by two to one on volume of 865 million shares. On the Nasdaq, decliners beat advancers by nearly three to one on volume of 1.7 billion shares. 

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ST. LOUIS — Boeing Machinists chose to remain on the job instead of walking out on strike — a move that was met with a mix of cheers and jeers inside the Chaifetz Arena on Sunday.

"The membership spoke," said Gordon King, president and directing business representative for the International Association of Machinists District 837. "Ultimately, it is their choice."

The union represents more than 2,500 Boeing Machinists in the St. Louis area. Union negotiators had recommended the workers reject the latest contract proposal, but King said he knew the vote could go either way.

The vote was 1,237 in favor of the contract and 838 opposed.
The result was a far cry from the vote taken just two weeks ago, when the union overwhelmingly rejected Boeing’s previous offer by a 3-to-1 margin. Since then, the fear of going on strike during a recession began to weigh more heavily on many union members, King and several union members said.

Boeing’s 4 1/2-year proposal will raise Machinists’ salaries an average of 3.6 percent a year and increase pension payments for those already employed by the company.

The latest company changes included removal of language requiring employees to pay for dependent medical care coverage during extended leaves of absence and caps to nonformulary name-brand drugs.

In a released statement, Boeing officials said the vote "allows us to keep delivering on our commitments to our customers." The Machinists in St. Louis work on the F/A-18 Super Hornet, the EA-18G Growler, the F-15 fighter jet and the C-17 Globemaster transport plane.

Boeing officials said their goal was to produce a contract that "recognizes both the significant contributions of our employees and the competitive environment in which we must compete to keep jobs here in St. Louis."

A strike would have only magnified what has been a difficult period for Boeing’s St. Louis-based defense business, which has been dealt setbacks in recent Pentagon budgets.

Defense Secretary Robert Gates opposes continued production of the C-17. Last year, the Pentagon scaled back Army modernization and missile-defense programs in which Boeing was a major player.

But Boeing also is working toward securing another multiyear order of locally built F/A-18 fighter jets.

As a strike loomed during the past week, Boeing offered a key concession, removing language requiring employees to pay for dependent medical care coverage during extended leaves of absence and capping the costs of nonformulary name-brand drugs.

But the most contentious issue — pension benefits — was left unchanged empire payday loans. Instead of a pension, Boeing will offer new hires after January 2012 an enhanced 401K contribution plan.

Though they accepted the provision in the new contract, current Machinists and retirees worry that the change means that their pensions, too, will be placed in peril in the future.

"I’m scared to death that they’re going to freeze the defined-benefit pension plan we have right now and end up selling it to an insurance company and turn it into an annuity," King said. "And then what’s going to happen from there, a good possibility of losing what they’ve got."

Maintenance worker Herman Ward of Florissant, a 24-year Boeing employee, said he was relieved the contract was accepted. He was concerned that a work stoppage would have resulted in the elimination of his job. He said he supported the company’s contract offer in both votes this month.

"There’s a possibility that when you go out, you won’t get back in," Ward said of a strike. "There are outside contractors ready to take our jobs … I could not afford to take a chance of losing everything that I’ve worked so hard to get just because another decision someone else wanted to make for us."

Several groups of workers gathered in the Chaifetz Arena parking garage following the vote. Some refused to give their names to reporters. Few would say how they voted. Many expressed relief that the negotiations were over.

"We have a job," said one Machinist between sips of beer. "The way things are right now, you should be thankful you have a job."

But Boeing flight mechanic Peggy Chapin of Granite City said she was disappointed by the outcome — even though both she and her husband, Tom, also a Boeing Machinist, would have been on strike at the same time.

"I think they’re scared," she said of fellow union members moments after Sunday’s vote. "I can understand the economic times and everything. Everybody’s scared. Sometimes you’ve got to stand up and fight for what you believe in."

U.S. Sen. Christopher "Kit" Bond, R-Mo., said in a statement that he was glad that fight did not take the form of a strike, noting the importance of Boeing’s contributions to national defense. "Our nation’s warfighters and our allies depend on the dedicated and skilled Machinists of Boeing," he said.

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Pinnacle Partners LLC of Quincy, Mass., filed Friday to liquidate under Chapter 7 of the U.S. bankruptcy code.

The company listed assets of less than $50,000 and liabilities in the range of $1 million to $10 million.

The major creditor with a secured claim — a pair of mortgages totaling $600,000 — is South Shore Savings Bank.

A major unsecured creditor is Pinncon LLC of Braintree, listed as holding a claim valued at $103,000.

Pinnacle is represented in the bankruptcy by David B. Madoff of Madoff and Khoury in Foxborough.

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Ready for another government bailout? Taxpayers could be on the hook within the decade if current state pension system isn’t reformed.

Even if they continue to rake in the projected 8% in annual returns, pension funds in at least seven states — Illinois, Louisiana, New Jersey, Connecticut, Indiana, Oklahoma, and Hawaii — could dry up by 2020, and 31 states could be in trouble by 2030, according to a recent study by Northwestern University economist Joshua Rauh.

Promised benefit payments are so astronomical that raising taxes would still fall short. The only solution would be to call on the federal government for a bailout, according to the study.

"This is a problem of monumental proportion," said Rauh, an assistant professor of finance at the Kellogg School of Management. "Given that we see the same issue in many states, the total size of a federal rescue plan could exceed the seriousness of the recent economic crisis and potentially cost more than $1 trillion total."

In Illinois, Rauh says the pension funds could be insolvent by 2018 at the current rate cash advance companies. And in the following years, the state will owe government workers $14 billion — more than half of the state’s projected revenue for 2010.

To dodge a bailout, Rauh says the state pension system needs an overhaul that includes allowing states to issue tax-subsidized pension funding bonds for the next 15 years if they consent to other reform measures.

For starters, states must agree to close defined benefit plans to the 1 million new workers who start state jobs annually, and instead offer defined contribution plans and guaranteed access to Social Security, to which only a quarter of public workers currently contribute. Rauh estimates the total cost to the federal government would be about $75 billion.

"Existing pensions would become more secure and new workers would get more than an empty promise, while the country would avoid another massive taxpayer-financed bailout," Rauh said. 

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Walgreen Co. announced Wednesday it is buying New York-based rival drugstore chain Duane Reade Holdings Inc. to expand its reach in the metropolitan area.

The $1.1 billion cash transaction, which includes some debt and is pending regulatory approval, is Walgreen’s largest retail acquisition to date and is expected to close in the current fiscal year ended Aug. 31.

Through the deal, Deerfield, Ill.-based Walgreens (WAG, Fortune 500) drugstore, which currently operates 70 stores in New York City out of 7,100 nationwide, will acquire all 257 Duane Reade locations in New York City, as well as its corporate office and two distribution centers.

"Duane Reade is a compelling strategic acquisition that will immediately provide Walgreens with a leading position in the largest drugstore market in the United States," said Walgreens chief executive and president Greg Wasson in a statement. "The transaction is consistent with the capital allocation objectives we outlined last fall, which included investing in strategic opportunities that reinforce the company’s core strategies and meet return requirements."

The deal will also give Walgreens an edge over its national rival CVS Caremark (CVS, Fortune 500), which operates just over 7,000 drugstores across the nation.

"Walgreens lags its rival CVS in the New York metro area," said Craig Johnson, retail industry expert and president of retail consultancy Customer Growth Partners. "So this deal now allows Walgreens to leapfrog over its competitor and give it the kind of dominance in New York City that it has in Chicago, where it is headquartered."

Duane Reade, owned by private equity firm Oak Hill Capital Partners, boasts the highest sales per square foot in the retail drugstore industry in the nation, and its sales reached an unaudited $1.8 billion in 2009.

"We are very pleased that this national leader has recognized the successful transformation under way at Duane Reade," said Duane Reade chief executive and chairman John Lederer in the statement.

Customer Growth Partners’ Johnson said the deal will also benefit shoppers.

"This is also a win-win for consumers. Walgreens is bringing the skill, capital and management strength of one of the top two pharmacies operating in the country to Duane Reade," he said. "This will certainly enhance the merchandise and shopping experience for Duane Reade consumers."

Duane Reade, which opened its first location on Broadway between Duane and Reade streets in Manhattan in 1960, will continue to operate under its name after the transaction closes. About 60% of Duane Reade stores are located in Manhattan, while 30% are in outer boroughs and 10% are outside the city.

Though Walgreens expects acquisition charges will lower its earnings per share during the first 12 months after the deal closes, the drugstore projects it will help cut costs by between $120 million and $130 million by the third year.

Shares of Walgreens fell 1% in early trading.  

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MONTREAL–Bombardier Aerospace says a lack of new orders will force it to lay off an additional 715 workers at its Montreal-area facilities next year as it reduces production of its CRJ regional jets.

Thursday’s announcement came two weeks after Bombardier president, Pierre Beaudoin, warned of impending job losses. The cuts are in addition to 4,360 layoffs previously announced this fiscal year for the firm’s worldwide operations.

"The economic circumstances and the situation with the airline industry continue to make it difficult to get new CRJ orders," spokesman Marc Duchesne said.

The 715 layoffs include about 40 employees affected by the reduced output rate for its Bombardier 415 amphibious aircraft.

About 200 of the affected workers are administrative. The remaining 515 are unionized employees who can now exercise their rights to bump workers with less seniority.

The move doesn’t reduce production of business jets, which decreased earlier this year as the company forecast deliveries would fall by 25 per cent this year.

Any additional cuts to business jet production, should they be required, could be announced Dec. 3 when the company discloses its third-quarter results immediate payday loans online. There were 116 regional jets in Bombardier’s backlog of orders as of July 31.

A campaign to increase that total attracted just one letter of interest for 22 CRJ700s from American Airlines. But Duchesne said the layoffs don’t mark the death of the CRJ. Bombardier’s latest market forecast calls for 5,800 planes over the next 20 years.

Benoit Poirier of Desjardins Securities said the reduced production rate was widely expected. Bombardier doesn’t disclose daily production rates or aircraft production forecasts. But Poirier said in a note on Thursday that he expects Bombardier will deliver 52 regional jets this fiscal year, ending Jan. 31, and 45 in fiscal 2011. It has delivered 37 so far this year.

The latest layoffs will begin in January and will last through the first two quarters of the next fiscal year.

Bombardier said costs associated with the layoffs will be about $10 million (U.S.). On the TSX, Bombardier shares fell 18 cents to $4.60.

The Canadian Press

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Porsche SE is headed for a second consecutive annual loss in the billions of euros, as the hangover lingers from ex-Chief Executive Wendelin Wiedeking’s failed takeover of Volkswagen AG.

The indebted automotive holding company created as a vehicle for the acquisition will stay deeply in the red as it is forced to deconsolidate its Volkswagen stake and much of its Porsche AG sports car business, officials said on Wednesday.

The complex untangling at Porsche — now set to merge in 2011 with its 51-percent owned Volkswagen unit — cemented its reputation as a financial black box that scarcely resembles its roots as a maker of sports cars such as the 911 Turbo.

As its debt mounted just as car markets collapsed, Porsche was forced to drop its takeover and agree a merger with Volkswagen. The first step is selling to VW a 49.9 percent stake in the Porsche AG sports car business by the end of this year.

“To take into account the rather unlikely possibility that the merger does not take place after all, the parties concerned have incorporated a put/call structure into the transaction concept,” said Hans Dieter Poetsch, finance chief of both Porsche SE and Volkswagen.

This includes transferring the remaining 50.1 percent of Porsche AG to Volkswagen by no later than 2014, he added fast cash advance loan.

Poetsch warned on Wednesday that the deconsolidation loss in the fiscal year to July would be triggered if VW’s home state of Lower Saxony once again gets the right to appoint two members to VW’s supervisory board at the next annual meeting.

According to International Financial Reporting Standards, this would mean Porsche would have to book its VW stake at market value, he told Porsche’s annual news conference.

“This would give rise to a considerable loss based on the current market price,” Poetsch said.

Including the sale of the minority stake in the sports car business, the structural changes in its consolidated statements would lead to a loss “in the low single-digit billion euro range.”

Porsche SE posted a group net loss of about 3.6 billion euros ($5.37 billion) for the fiscal 2008/09 year. Net debt at the end of its fiscal year on July 31 was 11.4 billion euros.

Porsche shares were barely changed by 1306 GMT while the DJ Stoxx European car sector index dipped 0.2 percent.

(Editing by David Holmes)

($1=.6708 Euro)

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Russia is unlikely to change the structure of its reserves from dollars and euros even as currencies including the yuan gain more importance in regional trade, VTB Group Chief Executive Officer Andrei Kostin said.

“Inevitably with the growth and importance of other economies like China or other BRIC countries’ economies, the role of their currencies should be more important,” said Kostin, who heads Russia’s second-biggest bank, in an interview yesterday in Singapore. “We think that the yuan and the ruble can be currencies in which we conduct bilateral trade. But as a reserve currency, I think the central bank is still dividing mainly between the dollar and the euro.”

The ruble gained 0.2 percent against the euro to 42.8600, the strongest level in almost ten months, at 1:12 p.m. in Moscow. The Russian currency was little changed against the dollar.

Russia has sought to promote regional currencies in trade and finance to reduce the risks posed by the dominance of the dollar. Medvedev has blamed the global financial crisis on an over-reliance on the U.S. currency and the U.S. role in the financial system.

“Things are changing for sure and I think the crisis showed the weaknesses of being dependent on only one currency,” said, Kostin who was accompanying President Dmitry Medvedev at the Asia-Pacific Economic Cooperation forum. ‘There is more concern among many investors, even in Russia, that America is printing too much money and that could devalue it.”

State-run VTB is Russia’s second-biggest bank after OAO Sberbank.

Border Arrangements

Prime Minister Vladimir Putin traveled to China last month to strengthen a relationship forged by Russian oil exports to Asia’s largest energy consumer. The total value of oil deals signed with Chinese companies this year is about $100 billion, according to the Russian government.

China, the world’s fastest-growing major economy, has signed 650 billion yuan ($95 billion) in currency-swap agreements since December with Argentina, Belarus Hong Kong, Indonesia, Malaysia and South Korea, encouraging greater use of its currency guaranteed online payday loans.

Russia already has agreements that allow the use of the ruble and yuan in cross-border trade, First Deputy Central Bank Chairman Alexei Ulyukayev said on Oct. 23. Russia is also in talks with India and Brazil to use their currencies in trade.

Dominique Strauss-Kahn, the managing director of the International Monetary Fund, said today that the yuan may in future be added to the basket of currencies that set the value of IMF monetary units, called special drawing rights.

Reserve Currency

The yuan may be added in a “while,” Strauss-Kahn said at a press briefing in Beijing today. The move would require the currency to be market-based, he said.

While Chinese officials, including central bank Governor Zhou Xiaochuan, have called this year for an alternative to the dollar as the main reserve currency, they maintain controls on the yuan that prevent it for now from becoming a competitor.

Leaders from the APRC, who met in Singapore over the weekend, declined to back U.S. calls for a stronger yuan.

It’s “not easy” to say when the yuan could become convertible, Kostin said.

The currency could become a global reserve currency in about 10 years should the country make it convertible, Russian Finance Minister Alexei Kudrin said on Oct. 24.

While the yuan cannot be freely exchanged, making it impossible to use it for reserves at present, a change in policy would make the currency a “notable and weighty” global reserve currency given China’s trade volumes with others, Kudrin said.

Russia’s reserves, the world’s third largest holdings, are made up of 47 percent dollars, 41 percent euros, 10 percent pounds and 2 percent yen, Ulyukayev said on Nov. 2.

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General Motors expects to announce a market share gain for the third month in a row in October, GM executive director of corporate planning Mike DiGiovanni told reporters on Wednesday.

October will also mark the first year-over-year sales gain GM has managed in 21 months, DiGiovanni said. In September, GM’s sales were down 47% compared to a year earlier.

"When you look at GM’s performance, we’re having a really good October," he said.

The automaker expects its vehicle sales will amount to 20% to 21% of all vehicles sold that month, he said. He expects those numbers to be about 3% higher than Toyota’s and 4% higher than Ford’s, he said.

DiGiovanni credited strong product introductions for the market share rise. Over the past few months, GM has started production on six new or redesigned models: the Chevrolet Camaro performance coupe, Chevrolet Equinox, GMC Terrain and Cadillac SRX small crossover SUVs, Buick LaCrosse luxury sedan and the Cadillac CTS Sportwagon.

Sales of the new 2010 Chevrolet Equinox crossover SUV are strong enough that the automaker is adding a third shift to the Ontario, Canada factory that builds the Equinox and its sister-vehicle the Terrain easy online payday loans.

"We’ve got enough data now that we feel very confident that adding this third shift is the right ting to do, said Susan Docherty, who was recently appointed to head GM’s sales efforts.

An overall improvement in auto sales will also help GM’s bottom line, DiGiovanni predicted.

The market share rise comes despite the fact that GM has shed four of its former eight brands, DiGiovanni said. Only 5% of GM’s October sales came from the four brands that are being shut down, he said, compared to 10% a year ago.

Besides new model introductions, the automaker’s "Truck Month" promotion program has also helped boost sales, Docherty said.

GM still has a much larger percentage of 2009 models on its dealer lots, Docherty said, but part of that is a deliberate strategic decision. The automaker wanted to have more 2009 truck to sell as part of its "Truck Month sales drive. 

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Ford Motor Co. tapped Chinese automaker Geely as its preferred bidder for its Volvo unit, the company announced Wednesday.

Ford has been looking for a buyer for Volvo since December 2008, after a plunge in industry sales forced it to retrench to focus on its core U.S. brands of Ford, Mercury and Lincoln.

Ford (F, Fortune 500) has already sold the Land Rover, Jaguar and Aston Martin brands, as well as its controlling stake in Japanese automaker Mazda.

But the premium Swedish brand Volvo was by far the strongest of the non-core Ford brands, with a well-established reputation for quality and safety and a solid dealership network. Even with doubts about its future, Volvo’s U.S. market share stayed essentially unchanged this year at 0.6%, according to sales tracker Autodata.

Ford cautioned in its statement that there was still much work needed to be done in sales negotiations with Geely and that there was no timeline to close the deal. No terms were announced.

"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand," said Ford chief financial officer Lewis Booth in a statement bad credit payday advance.

China’s auto market now rivals the U.S. in terms of size. But even though sales are growing fast in China, the Chinese auto industry has relatively few exports.

Geely’s interest in breaking into the U.S. market is well documented. It was one of the first Chinese automakers to display its vehicles at the North American International Auto Show in Detroit.

In late 2006, Chrysler Group and Geely announced an agreement to have the Chinese automaker develop a subcompact car that Chrysler could sell in the U.S. market. But that deal ended in 2008 without a vehicle being produced. A Chrysler spokesman said the discussions never progressed very far.

Geely is not the only Chinese company looking to snap up a U.S. brand. Sichuan Tengzhong Heavy Industrial Machinery Co. has reached a definitive agreement to buy the Hummer brand from General Motors. 

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