Iran’s powerful Revolutionary Guard began military exercises Saturday in the country’s south, the latest show of force after threats to close the strategic Strait of Hormuz in retaliation for tougher Western sanctions.
Plans for new Iranian naval games in the Persian Gulf off the country’s southern coast have been in the works for weeks. State media announced new maneuvers in southern Iran involving ground forces, but it was not immediately clear whether they were part of the planned naval training missions scheduled for this month or a separate operation.
The latest military maneuvers got under way following stern warnings by Iran’s Supreme Leader, Ayatollah Ali Khamenei, about any possible U.S. or Israeli attacks against Tehran’s nuclear facilities. It also comes after Western forces boosted their naval presence in the Gulf led by the American aircraft carrier USS Abraham Lincoln.
Iran officials and lawmakers have repeatedly said that their country would close the Strait of Hormuz at the mouth of the Persian Gulf in retaliation for sanctions that affect Iran’s oil exports. They have as yet made no attempts to disrupt shipping through the waterway, the route for one-fifth of the world’s crude oil, and the U.S. and allies have said they would respond swiftly to any attempts at a blockade.
Last month, Iran’s navy wrapped up 10 days of exercises in the Gulf, but the Revolutionary Guard _ which is directly under control of the supreme leader _ represents a significantly stronger military force and controls key programs such as missile development. Iranian state media announced the new maneuvers, but gave no further details.
Khamenei, in a speech nationally broadcast on Friday, staked out a hard line after suggestions by Israel that military strikes are an increasing possibility if sanctions fail to rein in the Islamic Republic’s nuclear program.
He pledged to aid any nation or group that challenges Israel and said any military strikes would damage U.S. interests in the Middle East “10 times” more than they would hurt Iran. The comments also may signal that Tehran’s proxy forces _ led by Lebanon’s Islamic militant group Hezbollah _ could be given the green light to revive attacks on Israel as the showdown between the archfoes intensifies.
The West and its allies fear Iran could use its uranium enrichment labs _ which make nuclear fuel _ to eventually produce weapons-grade material. Iran insists it only seeks reactors for energy and medical research.
Israel has so far publicly backed the efforts by the U.S. and European Union for tougher sanctions that target Iran’s crucial oil exports. But Israeli leaders have urged even harsher measures and warn that military action remains a clear option despite Western appeals to allow time for the economic pressures and isolation to bear down on Iran payday loans with no fax.
Iran’s oil minister repeated claims that an EU oil embargo will not cripple Iran’s economy, claiming Saturday that the country already has identified new customers to replace the loss in European sales that accounted for about 18 percent of Iran’s exports.
Rostam Qassemi also reinforced Iran’s warning to Saudi Arabia and other fellow OPEC members against boosting production to offset any potential drop in Tehran’s crude exports, saying the cartel should not be used as a political weapon against a member state.
Although Israel has raised the strongest hints that it is likely to start a military campaign, Khamenei reserved some of his strongest comments for Israel’s key U.S. ally.
“A war itself will damage the U.S. 10 times” more in the region, said Khamenei.
Khamenei claimed Iran, however, could only emerge stronger. “Iran will not withdraw. Then what happens?” asked Khamenei. “In conclusion, the West’s hegemony and threats will be discredited” in the Middle East. “The hegemony of Iran will be promoted. In fact, this will be in our service.”
On Thursday, Israel’s defense minister, Ehud Barak, suggested the world is increasingly ready to consider a military strike if sanctions fail. The head of the country’s strategic affairs ministry, Vice Premier Moshe Yaalon, also suggested Iran’s main military installations are still vulnerable to airstrikes _ even as Iran starts up a new uranium enrichment facility deep in a mountainside bunker south of Tehran.
Yaalon’s comments appear to reinforce earlier suggestions by other Israel officials that the window for a possible attack is closing and Israel would need to strike by summer to inflict significant setbacks on Iran’s nuclear facilities. The officials spoke on condition of anonymity under standing guidelines.
At Ramstein Air Base in Germany, U.S. Defense Secretary Leon Panetta said sanctions remain the best approach to pressure Iran. But he told U.S. airmen Friday that Washington keeps “all options on the table and would be prepared to respond if we have to.”
Khamenei answered by repeating Iran’s declarations that it will never roll back its nuclear program, which he had earlier said was now part of the country’s “identity” and a cornerstone of its technological endeavors. On Friday, Iran said it successfully sent a small satellite into orbit in the third such launch in recent years, state media reported.
“From now on, in any place, if any nation or any group confronts the Zionist regime, we will endorse and we will help. We have no fear expressing this,” said Khamenei, using the phrase widely used by Iran’s leader to describe Israel.
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The Hyundai Elantra edged out the Ford Focus and Volkwagen Passat Monday to win the 2012 North American Car of the Year award.
The prestigious industry award was announced at the start of the North American International Auto Show in Detroit, which hosts media previews this week and opens to the public on Saturday.
The Land Rover Range Rover Evoque won the North American Truck of the Year, beating the BMW X3 and Honda CR-V.
Jaguar Land Rover North America President Andy Goss said it’s a tremendous honor and humbling for the company, which has had finalists but never a winner in the 19th annual independent awards program.
“We’re going to market the hell out of this,” said a smiling Goss on a stage above the four-cylinder sport-utility vehicle. The U.S. is the world’s largest Range Rover market.
Fifty automotive journalists voted on the winning vehicles from a group of finalists, and the vehicles must be all new or substantially changed to be eligible. Organizers accept no advertising, though automakers capitalize on the marketing value of the honors low interest rate personal loans.
John Krafcik, Hyundai’s North American CEO, said the award won’t help the compact’s sales much because the company already is selling as many Elantras as it can make at its factory in Montgomery, Ala. But the award should help solidify the brand’s image in the eyes of the American public, especially in the highly competitive compact car segment.
“It should be helpful for our brand going forward,” he said.
The company is looking at ways to boost production at the Montgomery plant, but Krafcik said Hyundai plans to focus on maintaining quality at the factory before deciding on any increases.
Hyundai sold more than 186,000 Elantras last year, nearly a 41 percent increase over 2010 figures.
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Carmaker Volkswagen AG says net profit more than tripled in the second quarter on stronger sales in emerging markets and the United States, but warns that the outlook is difficult.
Net profit reached euro4.78 billion ($6.86 billion), far above the euro1.35 billion recorded in the same quarter a year ago.
Despite rising sales, the company fell just short of analyst estimates on some earnings figures, and chief executive Martin Winterkorn warned the months ahead would challenge the company payday loan lenders.
VW shares are trading down 6 percent.
Revenues rose 21.5 percent to euro40.3 billion. The company said Thursday that unit sales rose strongly in emerging markets such as Russia, Turkey, South Africa, China and Argentina. U.S. sales also rose.
As the jobless rate inches up and the economic recovery sputters, investors looking for a few good stocks may want to follow the money _ or rather the TV, the beloved Fender guitar, the baubles from grandma, the wedding ring.
Profits at pawn shop operator Ezcorp Inc. have jumped by an average 46 percent annually for five years. The stock has doubled from a year ago, to about $38. And the Wall Street pros who analyze the company think it will go higher yet. All seven of them are telling investors to buy the Austin, Texas, company.
Is the economy still just in a soft patch? A hard patch? Will the market rise or drop? Even experts are just guessing. In investing, it’s often better to focus on what you can safely predict, even if that safety is found in companies that thrive on hard times. One good bet: The jobless aren’t likely to find work anytime soon. And companies profiting from their bad fortune will continue to do so.
Among them:
_ Stock in payday lender Advance America Cash Advance Centers (AEA) has doubled from a year ago, to just under $8. Rival Cash America International Inc. (CSH) is up 64 percent, to $58. Such firms typically provide high interest loans _ due on payday _ to people who can’t borrow from traditional lenders.
_ Profits at Encore Capital Group, a debt collector that targets people with unpaid credit cards bills and other debts, rose nearly 50 percent last year. Encore has faced class action suits in several states, including California, over its collection practices. The Minnesota attorney general filed a suit in March. No matter. The stock (ECPG) is up 59 percent from a year ago, to more than $30.
_ Stock in Rent-A-Center (RCII), which leases televisions, couches, computers and more, is up 57 percent from a year ago to nearly $32. Nine of the 11 analysts covering the company say it will rise further and that investors should buy it.
The idea of investing in companies catering to the hard-up might not be palatable to some people. But it is profitable.
Mark Montagna, an analyst at Avondale Partners in Nashville, has developed what he calls “value retail” index of 11 companies _ dollar stores, off-price shops and clothing and footwear chains favored by shoppers looking for deals. The index is up 149 percent since February 2009, which marked the lowest month-end closing value for the S&P 500 during the recession.
Desperation stocks continue to be lifted by a drumbeat of bad news. Consumer spending, adjusted for inflation, has fallen for two months in a row _ the first back-to-back fall since November 2009. On Friday, the government reported the unemployment rate rose to 9.2 percent in June, sending stocks in tailspin. On top of that, one in seven Americans now live below the poverty line, a 17-year high.
“It’s been a good year,” says John Coffey Jr., a Sterne Agee analyst, referring to the companies he follows, not the economy. Coffey created a stir late last month when he issued a report arguing shares of Ezcorp (EZPW), which also makes payday loans, were worth a third more than their price and urged investors to buy. The stock rose 7 percent in just a few hours.
The next day a widely followed survey showed consumer confidence at a seven month low.
“Here we are celebrating the second year of recovery and confidence is at levels consistent with a recession,” says David Rosenberg, an economist at money manager Gluskin Sheff. “The folks in the survey are probably not the same folks shopping at Tiffany’s.” (That company’s stock is also up nearly 50 percent since March, to about $82.)
But they probably are shopping at Dollar General Corp. Stock in the discount retailer recently hit $34.13, up 50 percent from its IPO in late 2009. And it may be worth about a third more, at least according Avondale’s Montagna.
“People are broke. They’re all chasing value. It’s a seismic shift in mindset,” he says.
Some experts think these down-and-out stocks are just as likely to fall now instead of rise. It’s not that they think the recovery will turn brisk and people will get jobs and shop elsewhere. It’s that things could get worse _ making customers too poor to borrow or buy even from these outfits. Rent-A-Center, the furniture store, is already suffering. Some of its core low-income shoppers have seen money they would have spent leasing a couch or cocktail table eaten up by rising food and fuel bills.
But not to despair. According to Nick Mitchell, an analyst at Northcoast Research, wealthier customers, say those making $45,000, are feeling so strapped lately that they’re starting to rent furniture, too.
Montagna, the Dollar General bull, says he’s seeing people earning $70,000 or more at that chain, too. Even he shops there now.
“If I’m driving past one, I stop in,” he says, adding triumphantly, “I just bought toothpaste _ Crest _ two tubes for $4.”
39 Stereotaxis-17.3%
40 Build-A-Bear Workshop-17.4%
41 Insituform Technologies-17.5%
42 Reliv International-18.7%
43 MEMC Electronic Materials-30.1%
44 Isle of Capri Casinos-31.4%
45 Furniture Brands International-33 Low fee payday loans.0%
46 Brown Shoe-40.9%
47 CPI-49.2%
48 Spartech-49.8%
Merck & Co. says its first-quarter profit more than tripled despite only slightly higher sales because of much lower restructuring and merger costs.
The results beat Wall Street expectations. Merck’s stock rose 61 cents in premarket trading to $36.38.
The maker of Singulair for asthma and allergies and Januvia for diabetes says net income was $1.04 billion, or 34 cents per share, up from $299 million, or 9 cents a share, in 2010’s first quarter.
Revenue edged up 1 percent to $11.58 billion. That includes several billion dollars from products acquired when Merck bought Schering-Plough Corp. in November 2009 for $49 billion.
Excluding numerous one-time items, net income was $2.86 billion, or 92 cents per share.
Analysts forecast earnings per share of 84 cents and revenue of $11.38 billion. Analysts typically exclude one-time items in their estimates.
The $1.82 billion in net charges included $1.58 billion in merger-related writedowns on the value of assets and research, $126 million in restructuring costs and a $500 million payment to settle arbitration with Johnson & Johnson over rights to two drugs.
Merck raised the bottom end of its 2011 adjusted profit forecast by 2 cents, predicting $3.66 to $3.76 per share.
“It is clear that Merck’s business momentum is building, and we continue to demonstrate the ongoing value of the merger,” Chief Executive Kenneth Frazier said in a statement.
Sales were driven by strong performance from Singulair, Januvia, Remicade for immune disorders and other key drugs. Their growth was partly offset by lower sales of former blockbuster heart drugs Cozaar and Hyzaar, which got generic competition last year.
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Libyan rebels have pushed into the strategic oil town of Brega as a government envoy begins a trip to Europe to discuss an end to the fighting.
Brega has been the site of battles during weeks of back-and-forth battling along Libya’s eastern coast.
The rebels, backed by airstrikes, have been making incremental advances. On Monday, the town was under rebel control.
An envoy of Moammar Gadhafi told Greece’s prime minister Sunday that the Libyan leader was seeking a way out of the crisis no fax cash advance. Abdul-Ati al-Obeidi will travel next to Turkey and Malta in a sign that Gadhafi’s regime may be softening its hard line in the face of the sustained attacks.
Congress has approved $6 billion in spending cuts as part of legislation to keep the government running for three more weeks and give President Barack Obama and congressional leaders time to negotiate a far more sweeping package of reductions demanded by Republicans.
The bill easily passed the Senate by a 87-13 vote, but patience is running out on both sides with stopgap funding measures that keep the government open for two or three weeks at a time.
The White House and Capitol Hill Republicans remain far apart on larger legislation to cover the day-to-day operations of the government until the 2012 fiscal year begins in October.
Government agencies have generally been operating at last year’s levels for almost half of the budget year. But Thursday’s measure _ combined with $4 billion in cuts from a two-week extension passed earlier this month _ means that Congress has cut $10 billion since Republicans took over the House in January.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
A divided Congress readied a spending bill for President Barack Obama that would keep the government open for three more weeks in hopes that budget talks between the White House and House Republicans will produce a longer-term deal.
The stopgap measure awaiting Senate approval Thursday includes $6 billion in cuts to domestic spending in the budget year that ends Sept. 30. Some GOP conservatives want deeper reductions and an immediate fight over the budget, but both Democratic and Republican leaders support the latest temporary extension.
The measure would buy time for talks about passing larger legislation to cover the day-to-day operations of the government until the 2012 budget year begins.
Talks have gotten off to a slow start, however, with disputes over how much to cut. Also at issue are proposals to cut off taxpayer aid to Planned Parenthood, block money to clean up the Chesapeake Bay, and bar the government from shutting down mountaintop mines it believes will cause too much water pollution.
Some Democrats say the GOP cuts could lead to widespread furloughs of federal workers and cost jobs if public works money is trimmed.
“How much more can we cut before we have no funds to pay employees to monitor our borders and ports? How much more before we have to cancel the construction of dams, bridges, highways, levees, sewers, and transit projects and throw thousands of private sector workers on to the street?” said Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii guaranteed high risk personal loans.
Both sides say they’re tired of running the government in two- and three-week installments. Expectations are rising that a confrontation is ahead when the latest measure would run out on April 8.
Senate Republican leader Mitch McConnell of Kentucky said Wednesday he would do everything in his power to make sure that Congress acts on the Pentagon’s budget by that time. He said that after this temporary measure, further legislation to fund the government will have to include the $500 billion-plus Pentagon budget.
McConnell said House GOP leaders have assured him that any future budget bill _ whether it’s a full-year measure endorsed by President Barack Obama or one more stopgap measure _ will contain the defense money. Such a scenario could give Republicans leverage because Democrats wouldn’t want to be accused of blocking the Pentagon’s budget.
Defense Secretary Robert Gates has grown increasingly anxious as his budget has stalled in the quarrel between Democrats and Republicans.
The House passed the temporary extension Tuesday by a 271-158 vote despite opposition from some tea party-backed conservatives who said it “kicks the can down the road” instead of imposing steep and immediate spending cuts.
Fifty-four Republicans opposed the bill, which meant that Democratic support was required to pass it _ a prospect that GOP leaders must avoid to maintain leverage in future rounds.
“If this 54 is the tail that wags the dog, they’re in trouble,” said the No. 2 House Democrat, Rep. Steny Hoyer of Maryland.
Speaker John Boehner, R-Ohio, could yield to conservatives and try to rally Republicans behind legislation that the White House won’t accept, or he could negotiate with Democrats and anger supporters in the tea party movement.
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