Economy-Finance

UPDATE 1-Firefighters hold line on two California wildfires

(Recasts first paragraph, adds updated containment figures,details throughout)

By Gina Keating

LOS ANGELES, July 4 (Reuters) - Exhausted Californiafirefighters worked on Friday to contain two wildfiresthreatening homes along the coast before sundown, when shiftingwinds were expected to give the blazes more power.

Fire crews have been battling a siege of more than 1,000blazes that have blackened nearly a half million acres acrossthe state since lightning storms in early June ignited drought-and disease-plagued brush and trees.

The Basin Complex and Gap fires, burning about 170 miles(273 km) apart, are being fed by dense, tall grass and brushchaparral in steep, rocky terrain that has not burned in someplaces for more than half a century.

The Gap fire, considered the state’s top priority becauseof its proximity to homes in Goleta, a town of about 30,000about 100 miles (160 km) northwest of Los Angeles, burnedwithin a few feet of dozens of homes overnight and stillthreatens some 2,600 homes.

The fire started on Tuesday evening along a ridge in theLos Padres National Forest, about 3 miles north of Goleta, andhas since grown to 5,400 acres (2,185 hectares). The cause isstill under investigation, said U.S. Forest Service spokesmanStanton Florea.

Fire crews on the ground spent Friday afternoon buildinglines around the main blaze and clearing brush around homes andbuildings, while air crews tried to smother flames with waterand fire retardant in the fire’s path.

“(The afternoon) is when the fire is most active,” Floreasaid. “The humidity has come up a little today. That helped.” 

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Peru mining strike support collapsing

By Jean Luis Arce and Dana Ford

LIMA (Reuters) - Support was collapsing for Peru’s nationwide mining strike on Friday as employees at several big mines returned to work, against the wishes of labor federation leaders who vowed the walkout would continue.

At a time when metals prices are sky-high, Peru’s miners want the national Congress to pass a bill that would lift caps on profit-sharing. They also want a shorter work day and improved retirement rules.

The protests are the latest sign of calls on President Alan Garcia to spread the wealth from the country’s six-year economic boom or risk losing support of labor and the poor for his free-market policies at a time when leftist parties are positioning for elections in 2011.

So far, the nationwide strike has hit some key mines but affected production at only a few as a number of companies used temporary workers.

Disagreements among unions in the federation about whether to continue the strike led government officials to say it would end soon. But the leader of the walkout said it would go on until Congress promises to act on a bill that would give workers a bigger slice of profits.

“No union should take a position that differs from that of the federation,” Luis Castillo, leader of the federation, told Reuters. “We have punished … unions that have negotiated or lifted their strikes without permission from the federation.”

Despite internal differences, he said the walkout that started Monday would carry on, adding: “The strike continues.”

Global copper prices MCU3 rose to record highs before easing back this week amid worries that supplies would be crimped from Peru, the world’s No. 2 supplier. 

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Chance discovery points to crib death cause

By Michael Kahn

LONDON (Reuters) - An imbalance of a key brain chemical could cause crib death, researchers said on Thursday in what they called a chance discovery.

They created mice whose sudden deaths resembled crib death in humans, and found that the key may be an out of balance self-regulating system controlling the nerve-signalling chemical serotonin.

Writing in the journal Science, they said they hoped their experiment can help doctors pinpoint human babies at high risk of Sudden Infant Death Syndrome (SIDS), also known as cot death.

“At first sight the mice were normal,” said Cornelius Gross of the European Molecular Biology Laboratory in Italy, who led the study.

“But then they suffered sporadic and unpredictable drops in heart rate and body temperature. More than half of the mice eventually died of these crises during a restricted period of early life. It was at that point that we thought it might have something to do with SIDS.”

SIDS is a leading cause of death in babies under a year old in the developed world, yet its root cause remains a mystery. Healthy-looking infants can often die in less than an hour.

Smoking around infants and during pregnancy seems to be linked with SIDS, and campaigns to put babies to sleep on their backs instead of prone dramatically reduced crib death rates in several countries.

Cautioning parents about overheated rooms and minimizing bedding materials that could cause suffocation also may have reduced rates, but SIDS still kills one in every 2,000 babies globally. 

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UPDATE 1-Cemex to raise Mexico cement prices by 5 pct-source

(Updates with details, quote, background)

MONTERREY, Mexico, July 4 (Reuters) - Mexico’s Cemex(CX.N: Quote, Profile, Research, Stock Buzz) (CMXCPO.MX: Quote, Profile, Research, Stock Buzz), the world’s No. 3 cement producer, plans toincrease its local cement prices by an average of 5 percentstarting on Monday, a source close to the company said onFriday.

“This increase is due to higher world energy costs and thebig impact on the company’s costs,” the source told Reuters.

Building material distributors consulted by Reuters in thenorthern Mexican city of Monterrey, where Cemex is based, saidthe price of a 110-pound (50-kg) bag of cement will rise toabout 105 pesos ($10.19) from the current 100-peso averageprice.

Cemex, which has operations in more than 50 countries,faces a housing slowdown in its key European and U.S. marketsand is also trying to reduce costs following its takeover lastyear of Australia-based building materials company Rinker.

Mexico represents 16 percent of Cemex’s total annualsales.

Cemex last increased Mexican cement prices in December 2007with an average 10 percent hike. ($1 = 10.3 pesos) (Reporting by Gabriela Lopez; Editing by Jonathan Oatis)

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Cemex to raise Mexico cement prices by 5 pct-source

MONTERREY, Mexico, July 4 (Reuters) - Mexico Cemex’s (CX.N: Quote, Profile, Research, Stock Buzz)(CMXCPO.MX: Quote, Profile, Research, Stock Buzz), the world’s No. 3 cement producer, plans toincrease its local cement prices by an average of 5 percentfrom Monday, a source close to the company said on Friday. (Reporting by Gabriela Lopez)

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Brazil stocks creep up after worst week in a year

(Recasts; updates prices)

SAO PAULO, July 4 (Reuters) - Brazilian stocks crept higheron Friday, after its worst week in nearly a year, in a sessionlow in liquidity due to U.S. Independence Day holiday, whilethe national currency also firmed.

The Sao Paulo Stock Exchange’s benchmark Bovespa index.BVSP edged up 0.16 percent to end at 59,365.35 points afterfalling 7.7 percent this week as financial worries kept globalstock markets under pressure.

Brazil’s currency, the real BRBY, firmed 0.19 percent to1.608 per dollar.

State-run oil company Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz), the topweighted blue-chip listing in the Bovespa, helped underpin themarket, rising 1.53 percent to 43.20 reais as U.S. crude pricescame off their highs, but kept above $144 a barrel onThursday.

Vale, Bovespa’s second most heavily-weighted play, rose 1.2percent to 43.21 reais.

Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz) (RIO.N: Quote, Profile, Research, Stock Buzz) began on Friday a series ofmeetings with potential investors in its $15 billion globalshare offer and said it will take orders for the deal from July11-15.

The local market regulator has cleared the offer. Theshares on offer will be priced after book-building is closed onJuly 16 and will only begin trading after that.

Interest rate futures <0#DIJ:> on the BM&F commodities andfutures exchange in Sao Paulo were broadly higher as analystscontinue to bet on more rate hikes in Latin America’s largesteconomy. 

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UPDATE 3-Toronto stock index falls on resources, BCE climbs

(Adds details)

*TSX falls as resource shares drop with commodities

*BCE soars after it finalizes funding at C$42.75 a share

*With U.S. markets closed, thin volumes lead to volatility

By Cameron French

TORONTO, July 4 (Reuters) - The Toronto Stock Exchange’smain index retreated on Friday as softer commodity pricespulled down energy and materials issues, while telecoms giantBCE (BCE.TO: Quote, Profile, Research, Stock Buzz) provided an upward push.

With U.S. markets closed, many Toronto traders startedtheir weekend early, leading to thin volumes that accentuatedthe market’s volatility, analysts said.

“America is closed. Whenever that happens, nothing much isgoing to happen in Canada,” said Douglas Davis, president atDavis-Rea in Toronto.

The S&P/TSX composite index .GSPTSE fell 133.18 points,or 0.94 percent, to close at 14,010.39. 

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UPDATE 3-TD Bank hit by UK derivatives charge; trader leaves

(Adds details, background, closing share price)

By Lynne Olver

TORONTO, July 4 (Reuters) - Toronto-Dominion Bank (TD.TO: Quote, Profile, Research, Stock Buzz),Canada’s second-largest bank, said on Friday it will take apretax charge of about C$96 million ($94 million) for themispricing of derivatives by a senior trader who has left theLondon office of its investment dealer unit.

TD Bank said that the charge in its TD Securities unit wastied to credit derivatives that were not properly priced, andsaid the unnamed trader left the bank on June 23.

TD discovered the mispriced credit index swaps the sameday, spokeswoman Simone Philogene said.

The bank said it was cooperating with regulators.

A spokeswoman for Britain’s Financial Services Authoritysaid that it does not comment on individual firms.

TD Bank President and Chief Executive Ed Clark said thebank was “very disappointed” with the loss.

“Our company has a strong risk culture and we deeply regretthis incident. We take this very seriously and will make everyeffort to ensure that this doesn’t happen again.” 

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UPDATE 1-Brazil stocks creep up after worst week in a year

(Recasts and updates prices)

SAO PAULO, July 4 (Reuters) - Brazilian stocks crept higheron Friday, after its worst week in nearly a year, in a sessionlow in liquidity due to U.S. Indepence Day holiday, while thenational currency also firmed.

The Sao Paulo Stock Exchange’s benchmark Bovespa index.BVSP was 0.2 percent higher at 59,365.35 points afterfalling 7.7 percent this week as financial worries kept globalstock markets under pressure.

Brazil’s currency, the real BRBY, rose 0.19 percent to1.608 per dollar.

State-run oil company Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz), the top weightin the Bovespa, helped underpin the market, rising 1.5 percentto 43.20 reais as crude prices came off their highs but keptabove $144 a barrel.

Vale, Bovespa’s second most heavily weighted play, rose 1.2percent to 43.21 reais.

Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz)(RIO.N: Quote, Profile, Research, Stock Buzz) began on Friday a series of meetingswith potential investors in its $15 billion global share offerand said it will take orders for the deal from July 11 to 15.

The local market regulator (CVM) has cleared the offer.The shares on offer will be priced after bookbuilding is closedon July 16 and will only begin trading after that.

Interest rate futures <0#DIJ:> on the BM&F commodities andfutures exchange in Sao Paulo were broadly higher as analystscontinue to bet on more rate hikes in Latin America’s largesteconomy. 

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Argentine stocks inch higher on selective buying

BUENOS AIRES, July 4 (Reuters) - Argentine stocks inchedhigher in light trade on Friday on selective buying in BuenosAires-listed shares of Brazilian state-run energy companyPetrobras and leading bank Banco Patagonia.

The benchmark MerVal stock index rose 0.4 percentto close at 2,006.44 points, cutting its losses for the monthto 4.81 percent.

Trade volume was a slack $4.5 million, the lowest levelsince September 2007.

“There was little activity because of the holiday in theUnited States. Shares that moved belonged to companies thatdon’t trade in New York,” said Leopoldo Olivari, a trader atBacque brokerage.

Banco Patagonia (BPAT.BA: Quote, Profile, Research, Stock Buzz) climbed 4 percent to 2.08 pesoswhile Petrobras (APBR.BA: Quote, Profile, Research, Stock Buzz)(PETR4.SA: Quote, Profile, Research, Stock Buzz) climbed 0.86 percent to105.5 pesos.

Of active issues, 21 rose, 21 fell and 14 were unchanged.

The Fourth of July holiday in the United States broughttrade in Argentine bonds on the local debt market to astandstill, traders said.

In the foreign exchange market, the peso closed mixed.

In formal interbank trade, the peso <ARS=RASL> closed flatat 3.025/3.0275 per dollar. In informal trade between foreignexchange houses, as measured by Reuters, the peso strengthened0.41 percent to close at 3.05/3.0525 per dollar <ARSB=>. (Reporting by Jorge Otaola and Walter Bianchi; Writing byKevin Gray; Editing by Jonathan Oatis)

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