Bond traders beefing up their U.S. TreasuriesFor the first time, Wall Street's biggest bond-trading firms hold more U.S. Treasuries than corporate securities, signaling concern the economy's rebound will be too slow to sustain record demand for riskier assets. The 21 primary dealers that trade directly with the Federal Reserve held a total of $74.7 billion of Treasuries as of Dec. 28, compared with $61.1 billion of company debt, according to Fed data. The aggregate position in U.S. government bonds has increased from a $38.6 billion bet against the securities in May, while corporate holdings have tumbled 50 percent from $121.8 billion.
Companies' buybacks dwarfed new equityStocks are getting scarcer in the United States for the first time since the bull market began as companies cut share sales to the lowest level since 2006 and buy back equity at the fastest pace in four years. Amgen, Hewlett-Packard and 1,971 other U.S. companies repurchased $397 billion of stock last year, while they issued $169 billion of new equity, data compiled by Birinyi Associates and Bloomberg show. The combination reduced the Standard & Poor's 500 index divisor, a measure of outstanding shares, by 0.6 percent last quarter, the first drop since March 2009. Shrinking supply supports prices and shows valuations are so low that executives would rather buy back shares than spend the cash to expand, according to Columbia Management Investment Advisers and USAA Investment Management Co.
Kraft will slice 1,600 jobs through the yearKraft Foods Inc., the food company planning to split in two this year, said it'll eliminate 1,600 jobs and reported preliminary profit for 2011 that trailed some analysts' estimates. The job cuts will take place in North America through the year, the Northfield, Ill.-based company said. About 20 percent are vacancies that will remain unfilled, the company said. The reductions move Kraft, the world's second-largest food manufacturer, a step closer to splitting into a snack foods business and a grocery business.
Airbus: New orders probably will declineAirbus, which had record orders in 2011 to extend its lead over Boeing, said that demand for its new aircraft will likely drop by more than 50 percent this year as an initial flurry of A320neo purchases wanes. The European planemaker won 1,419 orders last year, beating its previous high of 1,341 in 2007, the Toulouse, France-based company said in a presentation. Airbus, a unit of European Aeronautic Defence & Space Co., delivered a record 534 planes, ahead of budget, and predicted deliveries will rise to 570 aircraft in 2012.
Opposition builds to stock exchange mergerThe European Union's competition commissioner, Joaquin Almunia, won support from European government representatives on an advisory panel in his effort to block a merger between NYSE Euronext and Deutsche Boerse, a move that is one of the last stages before a formal decision on the deal is made early next month. For months, the European Commission has raised concerns about the creation of the world's biggest stock exchange company, which would operate both the New York Stock Exchange and the Frankfurt Stock Exchange along with other markets. The advisory panel's recommendation is not binding.
Inspector General Kotz to leave SECThe inspector general of the Securities and Exchange Commission, who has been a thorn in the side of the agency over its fumbling of early inquiries into the Madoff and Stanford cases, will leave the commission at the end of January to join a private investigations firm. H. David Kotz, who has been inspector general for the SEC since December 2007, will join Gryphon Strategies, an investigative company, as a managing director in its Washington office, he said Tuesday.
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