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Taiwan, China to sign financial agreement: report

TAIPEI (AFP) --

Taiwan is expected to forge an agreement on financial cooperation with China "soon", in yet another sign of evolving ties between the two former bitter rivals, it was reported Sunday.

A senior Taiwanese official in charge of relations with China said over the weekend the formal signing of the agreement, which calls for closer banking, insurance and securities cooperation, "could take place soon," local media reported.

Negotiations on the agreement "are almost completed," said Chiang Pin-kung, chairman of the quasi-official Straits Exchange Foundation.

The foundation and its Chinese counterpart, the Association for Relations Across the Taiwan Strait have been authorised separately by their governments to handle exchanges in the absence of official contact between the two sides.

Relations between China and Taiwan have improved markedly since May 2008, when the China-friendly Ma Ying-jeou assumed the presidency, pledging to push for closer economic cooperation and allow in more Chinese tourists.

The two sides held their first direct dialogue in 10 years in Beijing in June last year, leading to regular direct flights across the Taiwan Strait and measures to boost tourism.

Taiwan has governed itself since 1949 at the end of a civil war, but Beijing regards the island as a renegade province awaiting reunification with the mainland.

Australia stimulus needed for recovery: Treasurer

SYDNEY (AFP) --

Withdrawing Australia's government stimulus now would interrupt the recovery underway, Treasurer Wayne Swan said Sunday as he warned the country was not immune to the risks to the global economy.

Swan said the government's 70 billion dollar (64 billion US) stimulus, credited with helping Australia avoid a recession, had already peaked and was gradually winding down.

But he said although the nation had posted 0.6 percent growth in the June quarter -- the best in the developed world -- and maintained relatively low unemployment, the domestic boost was still needed.

"If we were to simply withdraw stimulus that would pull the rug out from under recovery and that would result in far higher unemployment," Swan told the Australian Broadcasting Corporation from London.

"We are not immune from what is going on in the global economy this year or next year."

Swan said while there were some encouraging signs for the world economy, the International Monetary Fund had forecast that the pace of recovery was likely to be sluggish.

"I don't think there's anybody over at the G20 doing victory laps, particularly when you look at the United States' economy where unemployment has hit something like 10 percent plus," he said in reference to the group of 20 leading economies which met in Scotland on Saturday.

"You've got the British economy which has had something like six quarterly contractions in a row. So people here are cautious."

The Australian government has come under pressure to remove the stimulus, particularly after the central Reserve Bank of Australia lifted interest rates from 50-year lows in October and unemployment unexpectedly dropped to 5.7 percent in September.

But Swan said the Reserve Bank was "entirely comfortable with our fiscal policy" and business investment remained weak.

"One of the reasons we've done so well is that many employers out there know that through our stimulus there is a pipeline of activity which they can use to keep workers on and also to invest in capacity," he said.

"And they're depending upon that pipeline."

Advertisers face resistance to on-line tracking

by Daniel Silva MADRID (AFP) --

Campaigners are stepping up efforts to curb online tracking of Internet use by firms that deliver adverts tailored to the specific interests of consumers, as polls reveal widespread unease with the practice.

Corporations have always collected personal data on the people who buy their products but in the past this information came from sources such as magazine subscriptions and warranty cards, experts at a three-day privacy conference that wrapped up Friday in Madrid said.

Now it is flowing at breakneck speed into databases from multiple online sources, from dating services to newspaper websites, giving companies the unprecedented power to create detailed profiles of their customers, in many cases without their being aware of it, they added.

"There are so many grey areas in advertising that if the end user knew about it all, it would make their hair grey," said Jorg Polakiewicz, the head of the law reform department at the Council of Europe, a European rights watchdog.

The body is working on a new legal instrument on consumer profiling that it hopes will assist its 47 member states to better protect individuals from abuses, he added. So far only a few member states have legislation in place.

In the United States, Rick Boucher, the Democratic chairman of the House of Representatives' Energy and Commerce Subcommittee on Communications, Technology and the Internet, announced in September that he planned to introduce privacy legislation to regulate this so-called behavioral targeting of consumers.

The move towards greater regulation comes as surveys in the United States and Europe show that a majority of consumers on both sides of the Atlantic are against corporations monitoring their Internet use for marketing purposes.

Two-thirds of Americans object to targeted online ads, according to one of the first independent surveys to examine the issue carried out by the University of California and University of Pennsylvania and published last month.

In the European Union 60 percent of people are concerned about the commercial use of data, according to a European Commission survey carried out in April, said Willemien Bax, the deputy director general of European Consumers' Organization BEUC which is pushing for tougher restrictions.

"It is very important that consumers are firmly in control of their personal data. I think it is unacceptable that our profiles are built up and we cannot see what they are," she said.

Some major corporations have reacted to the concerns by imposing their own limits on the use of online tracking of consumers.

Visitors to Web pages belonging to Procter & Gamble, the world's largest household products maker, "must opt in to have an online relationship" with the company, according to the firm's global privacy executive, Sandra R. Hughes.

The company also has set up a privacy education Web page and it provides consumers with examples of what kind of adverts and discounts they will receive if they agree to provide personal details.

But Jeffrey Chester, the executive director and founder of the Center for Digital Democracy, a US consumer watchdog group, said such efforts to self-regulate are largely a failure and stricter legal safeguards are needed.

"Self-regulatory schemes are inadequate, they fail to address the key issues," he said.

Nobel laureate says global crisis a chance to change

by William Ickes WOLFSBURG, Germany (AFP) --

Nobel Peace Laureate Muhammad Yunus calls the global economic crisis "an excellent opportunity to reflect and redesign" businesses, and devote creative ones to solving social problems.

Yunus, who with his Grameen Bank -- which gives tiny loans to the very poor to help start businesses -- won the 2006 Peace Prize, told media here on Saturday: "Any problem has a potential of being addressed with a social business."

"Social business being a business where you don't make money," he explained. "Zero profit for the investors."

The ground-breaking "microcredit" banker from Bangladesh is backed by corporations like food giant Danone, global water group Veolia, sportswear company Adidas, software pioneer SAP and academics at Kyushu University in Japan.

The first Global Grameen Meeting of companies, foundations, think-tanks, scientific experts and other institutions was hosted by Europe's largest carmaker Volkswagen at its headquarters in Wolfsburg, northern Germany.

Grameen is a Bengali word for village, and "was chosen to indicate that big projects may start small," a statement said.

The forum's ambitious goal is to eliminate poverty by 2030 in both the developing world and advanced economies.

Ideas that sprouted on the Indian sub-continent are being transplanted in Germany, Europe's biggest economy, and in France, where Danone will draw on its experience with Yunus in Bangladesh to launch a project for the poor in Paris.

"It's really a source of inspiration," Danone representative Emmanuel Faber told a press conference in the company of Yunus and the other groups.

He underscored the "new processes, new ideas, new ways of working that social business has driven into the mainstream way of Danone doing business."

The big group's have not decided to ditch profits altogether but are setting up subsidiaries to work on the social business model in addressing problems with the environment, health care, nutrition and unemployment.

"Each one is dedicated to solving a particular social problem," Yunus said.

Hans Reitz, co-founder with Yunus and director of the Grameen Creative Lab that brought together varied sectors to brainstorm for solutions, said his group would launch seven small companies in Germany with no more than five to seven employees.

"You can start small and give it a try, find out if it works or if it doesn't work," he said, and share the results across what Faber said was now "a global network of people thinking along these lines."

Faber quoted Danone founder Antoine Riboud as stressing "there could not be long-term wealth creation without social progress."

Peter Graf of SAP warned meanwhile that if they failed to act on global issues, there was "a danger of companies losing their social license to do business."

He called the threat "hugely underestimated as the public gets more and more aware of the crises that we are facing."

Danone plans to launch a project to have 300 people deliver fresh dairy products to Paris area shops on electric-powered tricycles.

The drivers would be ex-convicts or others faced with marginal living situations and the plan would cut carbon dioxide emissions from delivery vans withdrawn from circulation, he said.

In Germany, Reitz is experimenting with business loans to 15-year-old school children to show them they could later be self-employed.

Making cakes, candles and music CDs allowed German and immigrant youth to "start a small business and create an identity," he said.

"You can create a job for others, you don't have to wait to have a job," Reitz stressed as the eurozone struggles to reduce chronic unemployment.

Yunus believes social businesses can unite public sector and charity goals with the dynamics of an enterprise.

"If you can design businesses, bring the power of business, and the technology of businesses and the creativity of businesses to bear on a problem, maybe we can solve it," he said.

China's new Nasdaq-style board sees wild start

by Allison Jackson BEIJING (AFP) --

China's new Nasdaq-style market saw a week of wild yo-yo swings as frenzied investors sent the start-up shares to "ridiculously" high levels, analysts say, warning a correction is on the cards.

The 28 stocks on the ChiNext board in the southern boomtown of Shenzhen repeatedly tripped circuit-breakers in place to curb rampant speculation as keen buyers ignored warnings from regulators to trade in a "rational" way.

After a massive debut surge for all shares on October 30, with some soaring as much as 210 percent amid feverish buying, subsequent sessions saw stocks see-sawing up and down by the 10 percent limit in place on all Chinese bourses.

"I think it was crazy -- the rise was ridiculously high," said Peter Lai, a director of DBS Vickers in Hong Kong. "Chinese investors are not very rational."

Yan Li, a Beijing-based analyst at Southwest Securities, said the casino-style trading "shows that investors lack an understanding of the risks".

"Traditionally Chinese investors tend to chase after new stocks and such a trend will continue. I think the ChiNext board is very likely to see big fluctuations in the future," Yan said.

Ahead of the start of ChiNext trade, the chairman of the China Securities Regulatory Commission, Shang Fulin, cautioned investors by saying start-up stocks have potential for strong growth -- but also unstable financial results.

The long-awaited board is expected to give small and medium-sized companies access to financing and encourage private equity firms and venture capitalists to back start-ups, in the tradition of New York's Nasdaq.

The first 28 companies to list on the board, ranging from movie producers to medical equipment makers, raised about 16 billion yuan (2.3 billion dollars) in their initial public offerings -- more than double initial forecasts.

Market observers had been worried that ChiNext would draw funds away from the main boards and depress share prices.

But so far, the second board appears to have had little impact on main board trading, with China's benchmark Shanghai Composite Index finishing at its highest closing level in nearly three months on Friday.

Analysts, warning of the risks of excessive speculation and overinflated stock prices on the new board, pointed to the price-to-earnings ratio of some companies, which exceeded 100 -- compared with about 30 on the main board.

"There are good companies on the board but they are too expensive at the moment," La Bo, a Shenzhen-based analyst at Great Wall Securities, told AFP.

"The overall valuation of the board will come down eventually."

For DBS' Lai, a correction in share prices is "unavoidable".

"Many domestic investors do not understand ChiNext companies' financial figures and their business prospects. It's more about speculation," he said.

Hundreds of companies are reportedly lining up to list on ChiNext. The regulatory commission has already approved the draft initial public offering prospectuses of Zhejiang Hexin Flush Information Network and Wuxi Boton Belt.

"These are very early days but the basic direction, I think, is very sound," said Ardo Hansson, lead economist at the World Bank in Beijing.

"It is a welcome addition to the different instruments in capital markets... but people need to know what they are getting into."

iPhone disappoints in China launch: analysts

SHANGHAI (AFP) --

The official launch of Apple's iPhone in China has been disappointing at best for mobile operator China Unicom, with the grey market still booming and competitors offering worthy alternatives, experts say.

Unicom unveiled Apple's iconic handset in Beijing on October 30, but the few hundred people who braved the cold wind and rain to snap up the iPhone paled in comparison to hordes seen in New York in 2007 or Tokyo and Hong Kong last year.

Vendors and experts say the high price, disabled WiFi and wide range of other options has so far dogged sales in the world's biggest cell phone market of nearly 720 million users.

Unicom said last week that it had sold 5,000 units in the first weekend, but has released no figures since.

"The market was obviously expecting more, based on what happened with the debut of iPhone" in other countries, Bertram Lai, a Hong Kong-based analyst with CIMB-GK Securities, told AFP.

"The introduction of a more expensive, less usable iPhone with fewer functions is not going to be very exciting for the market."

Unicom, the country's second-largest mobile operator by subscribers, is offering a number of contract deals that bring the price of the iPhone down -- but it still costs more than 500 dollars, out of range for most consumers.

Without a subscription, the handset can cost up to 1,000 dollars.

iPhone's WiFi functions have been disabled to comply with Chinese government regulations -- another downside for tech-savvy buyers who know they can easily find fake and smuggled versions that will offer them more complete options.

Liu Dongping, the Shanghai-based business director for vendor Quickway Industrial Corp. Ltd., said he had sold dozens of Unicom iPhones so far, but called the lack of WiFi a "critical problem".

"Unicom's iPhone has got a lukewarm response from the market so far," Liu said, also pointing to the limited gaming software available on the handset.

"Most customers who are interested in buying iPhones are high-end customers. They are smart enough to understand how quality varies with price and model."

Unicom has high hopes for iPhone, and has said it wants to sell five million handsets over three years to boost its revenue per user, but analysts are not so sure it can meet that objective.

China Mobile -- which boasts 508.4 million subscribers as opposed to 142.8 million for Unicom, according to company data -- offers its own OPhone smartphone, powered by the Google-backed Android operating system.

"In terms of functionality, you have (instant messaging system) QQ on the OPhone and access to the China Mobile app store," which has 100,000 applications customised for Chinese users, Lai said.

"I think that's a very strong competitive force against the iPhone," he said.

China Mobile's 3G standard is not compatible with iPhone, but owners of smuggled handsets can still use them with China Mobile SIM cards on the carrier's 2G network -- another hurdle for Unicom to overcome, he explained.

Wang Guoping, a Beijing-based analyst for Galaxy Securities, sounded a more optimistic note for Apple, saying that since the Unicom launch, the price of smuggled iPhones had surged, showing sustained customer interest in the brand.

"Smuggled iPhones beat Unicom's in terms of cheap price and WiFi, but Unicom may be able to compensate with better after-sale customer service and maintenance," Wang said.

"It's very hard to say how sales will be in the future -- we just have to take a wait-and-see attitude."

Strike threatened at Arizona supermarkets

PHOENIX, Nov. 7 (UPI) --

Two supermarket chains in Arizona are preparing for a possible strike by advertising for temporary employees.

Fry's Food Stores, a subsidiary of Kroger, began running ads Saturday, The Arizona Republic reported. Safeway Arizona plans to do the same next week, a spokeswoman said.

A one-year extension of a contract that expired in 2008 ended Oct. 31. The United Food and Commercial Workers Union Local 99, which represents most of the stores' hourly workers at both chains, has set a strike deadline for 6 p.m. next Friday.

Jim McLaughlin, the head of the union, said his members make between $7.05 and $12.05 an hour.

Some of our members haven't had a raise in six years, McLaughlin said.

A critical issue is a company demand that union members make contributions to their health plan. McLaughlin said they effectively do so now because of their low wages.

Small businesses on front line in Obama's jobs fight

WASHINGTON (AFP) --

With unemployment fast becoming one of US President Barack Obama's biggest domestic challenges, focus is shifting from "too-big-to-fail" manufacturing and financial giants to struggling small businesses.

After months of high-level intervention to save mega-firms like General Motors and Goldman Sachs, Obama's economic team is now looking at small firms amid discouraging indicators about their health.

This week the White House received word that the official US unemployment rate passed the symbolic 10 percent mark to 10.2 percent in October, the highest level in 26 years.

Obama called the figure "sobering" and quickly said his administration was considering steps to spark job growth and to "increase the flow of credit to small businesses."

ADP, a data monitoring firm, this week reported more bad news: that three quarters of jobs lost between September and October in the private sector were in firms with fewer than 500 employees.

Hit with a double whammy of wizened access to bank lending and reduced consumer spending, small business bankruptcies in September increased by 44 percent versus the same month in 2008, according to Equifax, another data monitoring firm.

While it is unclear what form Obama's small-business assistance might take, some lawmakers have lobbied for a small-business tax credit that would rally firms to hire staff.

The scale of Obama's task could hardly be larger. According to government figures, in 2003 firms with fewer than 500 employees accounted for 97 percent of US exports.

The US Census Bureau says firms with one to four employees make up the largest section of the country's 25 million-plus companies.

And the stakes were made clear last week when CIT, a multi-billion-dollar lender to small and medium-sized companies, filed for bankruptcy.

On receiving that news, traders around the world expressed their concern by dumping the dollar, sending the currency plummeting against the euro and yen.

But if the scale of the problem is overwhelming, then so too is the depth.

Mark Zandi, chief economist at Moody's Economy.com, a ratings agency, warned in a blog that small firms were still "struggling to obtain credit," and were dependent on dysfunctional financial markets.

Hoping that small firms might soon be taking on more hires, Zandi warned that "a more worrisome possibility is that firms are so shell-shocked that they won't resume hiring."

But Zandi also offered a glimmer of hope for Obama, stating that a small-firm recovery could spur on the wider economy.

In an article which appeared in The New York Times he pointed out that companies with fewer than 20 employees created 40 percent of new jobs during the last economic boom, between 2003 to 2007.

Staff at struggling German retail giant agree to tighten belts

BERLIN (AFP) --

Employees of the embattled German department store chain Karstadt, owned by the insolvent retail group Arcandor, agreed Saturday to take salary cuts as part of a last-ditch effort to save their jobs.

Staff representatives and Arcandor's judicial administrator agreed on cost cuts of 150 million euros over three years.

Staff at the loss-making stores notably agreed to give up bonus holidays and 75 percent of their Christmas bonus, said Cornelia Hass, a spokeswoman for the services trade union Verdi.

The cost-cutting plan is to be examined by Arcandor's creditors during a meeting in Essen on Monday and Tuesday.

Verdi has said 17 out of Karstadt's 126 stores remain threatened with closure. The judicial administrator has already declared Arcandor's mail-order subsidiary Quelle bankrupt.

Arcandor filed for bankruptcy protection in June.

BA cabin crew to vote on strike: union

LONDON (AFP) --

Thousands of British Airways cabin crew are to vote on whether to take industrial action, the Unite trade union said Saturday, in a row over job cuts and new contracts.

The ballot will open on November 16 and close on December 14. Unite would have to give seven days' notice before the start of any action, so strikes could begin just before the Christmas holiday season.

More than 13,300 cabin crew staff will be balloted, with union leaders predicting a big 'yes' vote in favour of action.

"Unite have called the ballot in response to the company's determination to force through a package of measures including contractual changes without agreement of the cabin crew and their union," a spokesman said.

On Friday, British Airways revealed a quadrupling of net losses in its first half, and axed an extra 1,200 jobs in an "essential" cost-reduction programme.

BA posted a loss after tax of 217 million pounds (242 million euros, 361 million dollars) during the six months to September 30 compared with a loss of 49 million pounds during the equivalent period in 2008.

BA suffered an annual loss of 375 million pounds in its 2008-09 financial year, which it blamed on high fuel costs.

Nobel laureate brings Bangladesh business model to Europe

WOLFSBURG, Germany (AFP) --

Nobel laureate Muhammad Yunus brought on Saturday ideas for creating micro "social businesses" from Bangladesh to Germany, with backing from several of the world's leading corporations.

Yunus, who was awarded the 2006 Nobel Peace Prize for his development of micro-credits that allow poor people to start their own companies, said the global economic crisis offered the world "an opportunity to reflect and redesign" ways of doing business.

"What is missing?" he asked a press conference in Wolfsburg, northern Germany, the home of Europe's biggest carmaker, Volkswagen, which hosted the event.

"All business does not have to be done only to maximize profit, there can be other businesses, businesses aimed exclusively at solving problems."

As well as VW and Yunus' Grameen Social Business initiative, food giant Danone, global water group Veolia, sportswear company Adidas and professional software giant SAP were also represented.

Yunus argued that companies that do not aim to make a profit -- a principle of social businesses -- can still make a difference in a world facing problems such as unemployment or chronic dependence on welfare.

"If you can find out how to solve the problem of six unemployed people, you have designed something which can solve the problem of six million unemployed people, because the same thing can be repeated," he explained.

"The issue is how fast we can get out of poverty," both in the developing world and in advanced economies, Yunus added.

Danone representative Emmanuel Faber described a project in Paris to have around 300 people deliver fresh dairy products to shops using electric-powered bicycles.

The workers would be former prisoners or otherwise faced with marginal living situations, and the scheme would reduce carbon dioxide emissions from normal delivery vans and increase distribution of Danone products, he said.

It was an example of "new ways of working that social business has driven into the mainstream way of Danone doing business," Faber explained.

"If you're thinking about your company for the next quarter, you should not enter social business, if you are thinking about your company for the next 50 years, you should definitely be thinking about it," he said.

IMF says stimulus needed to aid 'nascent' recovery

by Ben Perry ST ANDREWS, Scotland (AFP) --

The International Monetary Fund on Saturday said emergency stimulus measures must remain to avoid endangering a "nascent" economic recovery, as the G20 agreed here to maintain support.

"An overarching risk is that the recovery stalls" owing to early exits from record-low interest rates and massive state cash injections, the IMF said in a report to coincide with a meeting of G20 finance ministers in St Andrews.

"Premature exit from accommodative monetary and fiscal policies could undermine the nascent rebound, as the policy-induced rebound could be mistaken for a strong and durable recovery," the IMF said.

The world's largest and top emerging economies on Saturday agreed to maintain stimulus measures to support "uneven" economic recovery.

"The recovery is uneven and remains dependent on policy support, and high unemployment is a major concern," the G20 said in its final communique.

"To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured."

The IMF said that while financial markets were recovering from the crisis, weakness persisted across the banking system -- causing the Fund to predict only a "gradual" recovery from the worst downturn since the 1930s.

"Financial strains could also re-emerge if the recovery falters and efforts to restore health to bank balance sheets are not forcefully implemented.

"Hence, it would be important for G20 countries to maintain policy stimulus until there are clear signs of a durable recovery," the IMF added.

With a number of major economies already out of recession, countries are considering when best to end emergency measures.

The US Federal Reserve last week decided to hold rock-bottom US interest rates for "an extended period" and to keep trillion-dollar stimulus measures in place to support the United States' fragile recovery from recession.

And with Britain still stuck in its longest recession on record, the Bank of England has decided to keep British borrowing costs at all-time lows and agreed to pump 25 billion pounds (28 billion euros, 41 billion dollars) of new money into the economy.

Britain agreed last week to pump more capital into Royal Bank of Scotland, taking state investment to 45.5 billion pounds, making it the world's biggest bank bailout.

"The global economy has returned to positive growth following dramatic declines," the IMF said in its study on Saturday.

"The recovery is, however, uneven and not yet self-sustaining, notably in advanced economies. Financial conditions have continued to improve, but are still far from normal."

When the time was right, exit strategies "should pave the way for strong, sustained and balanced economic growth," noted the Fund.

"The overall pace of policy adjustment and removal of financial support will depend on the strength of recovery... in each country and enduring financial stability.

"This suggests that the timing of exits will be country specific, although coordination on some specific fronts is desirable," the IMF added.

G20 agrees timetable for monitoring economic policy

ST ANDREWS, Scotland (AFP) --

The world's biggest economies have agreed a timetable on mutual monitoring of each other's economic policy aimed at preventing a fresh financial crisis, a G20 communique said on Saturday.

G20 finance ministers followed up an agreement made at a September summit in Pittsburgh with a roadmap for progress at a meeting in St Andrews, outlining a four-stage programme to be tied-up by November 2010.

World leaders at September's Pittsburgh G20 summit agreed a new system to coordinate economic decision-making and encourage stable, long-term growth.

The new system is designed to ensure there is no repeat of last year's near-meltdown that notably saw the collapse of US investment bank Lehman Brothers.

An update on the "framework for strong, sustainable, and balanced growth" was unveiled on Saturday.

Firstly, the G20 said it planned to set out "national and regional policy frameworks, programmes and projections" by the end of January 2010.

It hopes to make further progress by self-imposed deadlines in April and June of next year, before developing "more specific policy recommendations" in time for a leaders G20 summit in November 2010.

"Our first challenge in using the framework will be the transition from crisis response to stronger, more sustainable and balanced growth, consistent with our goals of sustainable public finances; price stability; stable, efficient and resilient financial systems; employment creation; and poverty reduction," the G20 communique said.

Wall Street rally gets second wind

NEW YORK (AFP) --

Wall Street's gravity-defying rally found new life over the past week, providing optimism for investors heading into what has historically been one of the best periods of the year.

The markets were able to shake off a disappointing report on the US labor market that sparked renewed doubts about the economic recovery.

Some analysts say the market is gaining confidence slowly that an economic recovery will take root soon. Others say the rally, like the recovery, remains fragile.

Over the past week the Dow Jones Industrial Average vaulted 3.2 percent to end Friday at 10,023.42, as the market rebounded from two weekly losses.

The tech-heavy Nasdaq composite advanced 3.29 percent to 2,112.44 and the broad-market Standard & Poor's 500 index rallied 3.2 percent to 1,069.30.

The market rallied for most of the week in anticipation of Friday's labor market report, which turned out to be a disappointment. It showed US unemployment jumped to double digits in October for the first time since 1983, reaching 10.2 percent despite narrowing job losses.

Analysts said the report highlighted slow progress in bringing down unemployment as the economy emerges from recession.

Cary Leahey, senior economist at Decision Economics, said that the stock market has been able to rally on signs of stronger corporate profits, as companies shed workers to boost their bottom line.

"You have a V-shaped recovery in earnings but the V has stalled in employment," he said. "That's why the stock market can rise even when the situation for many Americans is so bad."

Linda Duessel at Federated Investors said, meanwhile, she expects "upside surprises that are not yet priced into stocks."

She said consumer spending is recovering, and this is seen in sales of retail goods as well as automobiles, which have topped most forecasts.

"The jobs picture isn't as clear, but today's October report sported a big jump in temporary hiring, which is a key component of the monthly jobs report that we have been focusing on, as it is a reliable indicator that tends to lead changes in payrolls by 4-1/2 months on average," she said.

Duessel said manufacturing, real estate and credit are all showing positive signs as well.

David Rosenberg, chief economist at Gluskin Sheff & Associates, said the stunning market rally of some 60 percent since March has been fueled by speculative cash and a recovery supported by extraordinary government stimulus.

"If the overwhelming consensus is correct that the recession is behind us, then what we have on our hands is the mother of all jobless recoveries," Rosenberg said.

"The stock market has had a history this year of shrugging off weak employment report after weak employment report because the expectation is that we will see further rounds of fiscal stimulus, so it's hard to say what equity investors will do with this latest piece of data."

US Global Investors chief executive Frank Holmes said the market has pulled through what is historically the most difficult period of the year and now faces a generally upbeat season.

"November and December are two of the best months over the past 50 years," he said.

"There are, of course, no assurances, that this year will follow the strong November-December historical trend. In 2007, for instance, the Dow dropped nearly five percent in the last two months of the year as the US and other countries slipped into recession."

Sam Stovall, equity analyst at Standard and Poor's, said the past week "was a good example of how determined both the bulls and the bears are on their near-term positions."

"The market may move to a period of digestion and need a new catalyst, whether it's guidance from companies, news from economic data or any kind of developments in (merger) activity," he said.

Bonds fell on the week. The yield on the 10-year Treasury bond increased to 3.503 percent from 3.392 percent a week earlier and that on the 30-year bond rose to 4.394 percent against 4.236 percent. Bond yields and prices move in opposite directions.

The coming week has a light menu of economic news, including data on the US trade balance. Results are due from retail giant Wal-Mart and the Walt Disney Co.

Yemen joins gas exporters' club

by Mohamed Hasni BALHAF, Yemen (AFP) --

Yemen, one of the world's poorest countries, joined the international club of gas exporters Saturday with pumping starting at a newly built liquefied natural gas plant in the Gulf of Aden.

In a hillside ceremony overlooking the coast, President Ali Abdullah Saleh inaugurated exports by pushing a button giving the order to start pumping LNG from the terminal to a vessel anchored offshore.

The first shipment was to be sent to South Korea, with plans to also supply Europe and North America.

Korean LNG carrier Ecopia was loading 147,000 cubic metres (5,145,000 cubic feet), according to Philippe Hennebelle, production manager at Yemeni Liquefied Natural Gas (YLNG).

"Six shipments are expected to leave before the end of the year," he told AFP.

The 4.5-billion-dollar (3.0-billion-euro) project, involving a 320-kilometre (200-mile) gas pipeline from Maarib in eastern Yemen, is the country's largest ever investment.

The plant, which has France's Total as the main shareholder with a 39.6 percent stake, aims to reach a total production capacity of 6.7 million tonnes of LNG a year.

Yemen, a small oil producer despite its proximity to oil powerhouse Saudi Arabia, is one of the world's poorest countries.

Last year it produced less than 300,000 barrels per day of crude oil, and production is decreasing by five to six percent a year.

The Balhaf plant began production on October 15 with a single liquefying unit but a second is under construction.

Once a second unit comes on line, Yemen will be able to export 6.7 million tonnes of gas annually -- amounting to 180,000 barrels per day (bpd).

"The second unit should start in February-March next year and production will be 40,000 cubic metres per day while it is currently just under 20,000 cubic metres per day," said Hennebelle.

At the opening ceremony, speakers took turns to emphasise the importance of the achievement described by Oil Minister Amir al-Aydarus as the "largest economic project in the history of modern Yemen."

YLNG chief executive Francois Rafin stressed that on top of creating 10,000 jobs, the project would boost Yemeni government coffers by between 30 and 40 billion dollars over about 25 years.

Yemen's oil production has not exceeded 300,000 barrels of crude per day, and is declining by about five percent each year. The country has about 259 billion cubic metres in proven natural gas reserves.

Addressing the ceremony, the Yemeni president spoke of the tough situation his government is facing with Shiite rebels in the north and violent protests in the south, as well as attacks by the Al-Qaeda terror network.

"This is an important strategic project and it is good this project has not been disrupted," Saleh said in reference to inhabitants of the provinces and Shabwa and Maarib where gas is being extracted and processed.

"People in these two provinces have worked with us and have not disrupted the project," he added, stressing "the wealth it generates will benefit all Yemenis."

Yemen starts exporting LNG from new plant

BALHAF, Yemen (AFP) --

Yemen began exporting liquefied natural gas (LNG) from its newly built LNG plant in Balhaf on the Gulf of Aden on Saturday, with the first shipment destined for South Korea.

The South Korean LNG carrier Ecopia will load 147,000 cubic metres (5,145,000 cubic feet), according to Philippe Hennebelle, production manager at the plant which has France's Total as the main shareholder with a 39.6 percent stake.

"Six shipments are expected to leave before the end of the year," he told AFP.

The 4.5-billion-dollar (3-billion-euro) project, involving a 320-kilometre (200-mile) gas pipeline from Maarib in eastern Yemen, is the country's largest ever investment.

The plant aims to reach a total production capacity of 6.7 million tonnes of LNG a year, exporting to South Korea, Europe and North America.

Yemen, a small oil producer, is one of the world's poorest countries.

Its oil exports are tiny compared with neighbouring Saudi Arabia. Last year it produced less than 300,000 barrels per day of crude oil, and production is decreasing by five to six percent a year.

G20 'agrees timetable' for monitoring economic policy

ST ANDREWS, Scotland (AFP) --

The world's largest and top emerging economies agreed at a G20 meeting here Saturday a timetable on mutual monitoring of their economic policy, a European source told AFP.

"Yes, we have a timetable," the source said when asked whether G20 finance ministers had followed up an agreement made at a September summit in Pittsburgh with a roadmap for progress.

World leaders at September's Pittsburgh G20 summit agreed a new system to coordinate economic decision-making and encourage stable, long-term growth.

The new system is designed to ensure there is no repeat of last year's near-meltdown that notably saw the collapse of US investment bank Lehman Brothers.

A formal announcement on the "framework for strong, sustainable, and balanced growth" was due in a communique to be issued on Saturday at the end of the G20 finance ministers' meeting being held in St Andrews, Scotland.

Deal struck to end Philly transit strike

PHILADELPHIA, Nov. 7 (UPI) --

Pennsylvania Gov. Edward Rendell says a tentative agreement could end Philadelphia's transit strike by Saturday night.

Rendell and U.S. Rep Bob Brady, D-Penn., late Friday announced the deal that will be voted on by the boards of the SEPTA transit system and the striking Transport Workers Saturday afternoon.

SEPTA workers struck four days ago, forcing Philly commuters who use the subway, buses and trolleys to find other ways to get around.

The Philadelphia Inquirer said the tentative five-year contract does not include any wage increases in the first year but offers union members 2.5-percent and 3 percent raises in subsequent years and a $1,250 bonus upon ratification. The deal also increases the members' pension contributions but gives the union more control over job selection.

Given the economic tenor of the times, it's a very good contract, Rendell said.

Wal-Mart prepares for Christmas price cuts

BENTONVILLE, Ark., Nov. 7 (UPI) --

Wal-Mart is preparing a round of Christmas-season price cuts that are making smaller U.S. competitors nervous, analysts say.

With another weak Christmas retailing expected, the giant is using its size and clout to grab yet more business from competitors, offering such deals such as an HP notebook computer for $298 (normally $448) and a Sharp 52-inch flat-panel television for $898 (normally $1,548), the Los Angeles Times reported Saturday.

They put a stake in the ground and said, 'We will not be beat this holiday season,' Joe Feldman, a senior retail analyst at Telsey Advisory Group, told the newspaper. Without question, everyone has to look out for Wal-Mart.

Wal-Mart's pricing strategy will allow consumers to save millions while at the same time keep pressure on its competitors, added Todd Slater, an analyst at Lazard Capital Markets.

But competitors Kmart and Target say they are also dropping their prices.

We're certainly ready to compete, Chris Brathwaite, a spokesman for Kmart's parent company, Sears Holdings Corp., told the Times.

Last year shoppers migrated to us because they were seeking value, Gary Severson, senior vice president of entertainment for Wal-Mart's U.S. division, told the newspaper. I don't see this year being dramatically different.

British Airways to lay off 4,900 workers

LONDON, Nov. 7 (UPI) --

A disastrous summer is prompting British Airways to lay off about 4,900 workers, or 12 percent of its staff, company officials say.

The job cuts -- which surpass the 3,700-layoff target previously announced -- come after BA announced it had lost $485 million in the six months ending Sept. 30, The Times of London reported Saturday.

Analysts told the newspaper the airline's weak six-month performance has put it on track to eclipse its previous record one-year loss of $666 million set last year and would likely have a hard time returning to profitability before 2011.

We see a return to profitability in 2011, but only just and only if cost cutting plans succeed, Nick Cunningham, aviation analyst at Evolution Securities, told The Times.

The figures showed BA's revenues were down 13.7 percent in the past six months, prompting chief executive William Walsh to say: The challenge to the business and to the industry is the big decline in revenues we are seeing. We will see a fall of over ($1.7 billion) in revenue this year and that is largely on the back of the recession as business travel is less and average fares have come down.