Greek banks discuss new rollover plan (Reuters)

Frankfurt/London (Reuters)-European banks and finance officials are discussing a proposal to replace the existing Greek debt with a different type of link to circumvent provisions of credit rating agencies on a scheduled rollover, two senior European banking sources said on Friday.

The proposal provides for a voluntary rollover of debt securities of a composition of different credit and not comparable to avoid moving agencies in Greece default status, sources told Reuters on Friday.

"Only by a completely different composition would bond rating agencies see restructuring as a volunteer and not declare insolvent, Greece," said a senior banker.

Banks, insurers and national finance officials have held meetings this week to seek a solution to the crisis of sovereign debt of Greece.

An elderly German banking source said that banks were still examining a variety of proposals and that they wouldn't agree to commit to any rollover agreement without a signal from rating agencies that there would be no default value.

French President Nicolas Sarkozy said on Friday that French banks and insurance companies were willing to participate in a voluntary rollover of Greek debt.

German private creditors were invited by the Ministry of Finance of the country to submit data on their exposure and their intentions to roll the debt early next week, two other sources familiar with the meetings said.

Euro-zone Governments are discussing a second rescue package for Greece that would run from 2011 to 2014 and would amount to 120 million euros (170 million dollars), including up to 30 billion euro by the private sector.

Germany and France, along with Greek banks themselves, are the largest holders of Greek State debt and therefore more exposed to any default.

There was increasing pressure in countries like Germany, Finland and Netherlands for aggressive steps to force banks to share the burden of a new aid package, after taxpayers coughed all the money in the previous round.

(Reporting by Alex Chambers, Jonathan Gould and Philipp Halstrick; editing by Patrick Graham)

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Exclusive: Citi affect customer "standard" monitoring (Reuters)

NEW YORK/BOSTON (Reuters)-after a massive data breach last month, Citigroup did not offer its customers hacked the same degree of protection identity theft that provide many other companies, privacy advocates and critics.

For customers interested in Citigroup, which had more than 360,000 credit card accounts exposed last month, has sent letters this month with tips on protecting yourself against identity theft.

But unlike other large u.s. companies, violated by cybercriminals, Citigroup did not offer to buy or give all customers affected one year of credit monitoring services, preventive file according to a sample of a letter, the Bank sent to many customers and filed with the regulators in Maine.

A year of monitoring has become a standard that offers large companies after customer information is violated, to reassure customers and to protect them from identity theft, privacy advocates and consumers, he said.

"Consumers might wish to turn to Citibank and ask them to do more. It has become rather trivial to offer credit monitoring these days, "Ruth Susswein, Deputy Director of the national consumers ' priorities for action, told Reuters.

"This is really what standard they can do," he said.

The Bank did remind consumers that could put a fraud alert on their credit file, which tells creditors to contact the consumer before allowing an account must be opened in their name.

Credit monitoring services typically do more, such as tracking consumer credit reports for signs that their identities were stolen and giving them early warnings of theft.

Letter to Citigroup clients offers special services for customers that consider their identities have been stolen. Bank spokesman Sean Kevelighan said that clients by calling a toll free number mentioned in the letter would be automatically offered services including at least six months of monitoring.

Hackers failed to steal social security numbers with the Citi data breach. In general, when they have been compromised social security numbers, there is little risk of new account fraud, said Paul Stephens, Director of policy and advocacy for Privacy Rights Clearinghouse, a San Diego non-profit that records violations.

But the facilities are relatively inexpensive and offers now seem to be the norm after most of the violations, he added.

The Bank, already facing legal pressure on its disclosure delayed fracture, now faces additional criticism from supporters who call his reply miser.

"Citigroup has need to take this latest violation more serious than what they have," said Marc Rotenberg, Executive Director of the Electronic Privacy Information Center.

Rotenberg, who testified this week before the Senate Banking Committee of the United States for cybersecurity in the financial sector, told Reuters that companies generally require additional steps such as reducing the amount of personal information held on file.

OPEN RECORDS

Citigroup, the third largest u.s. Bank, including a sample of the letter sent to holders of 703 accounts in Maine, in a filing with the Office of the Attorney General William Schneider. Maine is one of a number of States that require organizations to report when personal data is compromised. Officials provided the letter to Reuters in response to an open records request.

In his letter Citigroup advises customers to "remain vigilant over the next 12 or 24 months of your account activity monitoring" and tells them that they can put a "fraud alert" on their credit files.

Kevelighan said did not directly because the Bank did not make an offer wider free credit monitoring to date.

He said the Bank is "detection rate of satisfaction for nearly 90 percent with customers by contacting us in particular, were influenced by this," based on evaluations by customer service agents who manage their calls. He also reiterated that customers would not be responsible for any unauthorized use of their Citi accounts.

Citigroup said its cyberattackers not stealing social security numbers of its customers or card security numbers and "none of the data violated was sufficient to perpetrate fraud."

Privacy and security experts, said hackers could still find ways to use customer names, account numbers and email addresses to steal their identity.

"We still think that the violation is very serious," said Rotenberg.

Monitoring was not always common. TJX Companies initially refused to offer the service after it disclosed a violation of important data in 2007, but eventually offered three years of monitoring for some customers as part of a settlement of a class-action lawsuit.

Now the offers are more standard. Other documents from Maine delineate a myriad of other breaches of the data to dozens of companies, universities and other organizations. In many cases, companies mentioned that would free credit monitoring as part of their response, such as when the RiverSource funds unit of Ameriprise Financial said a former employee was unable to return the electronic devices containing client names and social security numbers.

(Edited by Steve Orlofsky)

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Oil, world stocks tumble on signs of dismal economy (Reuters)

NEW YORK (Reuters)-oil prices plunged, falling global stocks and euro shred more than 1.0 percent Thursday after the news of disappointing private sector activities in Europe and China, coupled with an increase in unemployment claims of the United States, sent a shiver through the global financial markets.

Exacerbating fears of slower growth were expected from the International Energy Agency to release 60 million barrels of oil from the strategic inventories.

"It could be a signal to their overall level of concern about slower global economy," said Omer Esiner, senior market analyst at Commonwealth Foreign Exchange in Washington.

Further diminished and European equities and debt prices of Government on both sides of the Atlantic extended gains after initial claims for State unemployment benefits rose more than expected last week.

Gold fell almost 2.0 percent to hit lowest levels in nearly and the euro hit an all-time low against the Swiss franc as anxiety for Greece and a slowing U.S. economy dampened the investors ' risk appetite and encouraged an offer for security.

The euro fell 1.3% to $ 1,451, the lowest level in about a week and also hit a new record low at 1.1873.

"The claims (jobless U.S.) just added fuel to the fire here ... you two months now stuck in this range and they just won't budge. That is certainly a disappointment, "said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

Compounding the worry, the private sector in the euro zone grew only modestly, and would be reduced without the support of Germany and France, while the sector of China barely extended even as inflation eased, purchasing managers ' indices (PMI) has shown.

The data comes a day after the Federal Reserve of the United States said that the pace of recovery of the United States was proceeding more slowly than it had expected, but no new aid for its economy, once the purchase programme of its link expires this month pledged.

"Bernanke's Outlook cautious (President Ben) and persistent turmoil for the American economy that could linger until the end of the year, including concerns about Greece, hit market sentiment," said David Watt, senior currency strategist at RBC Capital Markets in Toronto.

World stocks as measured by the MSCI World equity index of all countries were down 1.1 percent, leaving the index plate so far this year.

On Wall Street, the Dow Jones industrial average fell 166.76 points, or 1.38 percent, to 11, 942.91. The stock index & Poor Standard of 18.01 was down 500 points or 1.40%, to 1, 269.13. The Nasdaq Composite Index dropped 35.95 points or 1.35 percent, to 2, 633.24.

Brent crude oil Futures and United States extended losses in volatile trading after the Labor Department report showed initial claims rose 9,000 to a seasonally adjusted 429.000. Economists had expected claims to come in at 415,000.

In London, ICE Brent crude oil for August delivery fell $ 109.06 $ 5.15 per barrel. The New York Mercantile Exchange, the August contract fell $ 4.08 91.33 per barrel.

Gold spot fell from 1.99% to a minimum of 1 session, $ 518.40 per ounce. Prices later barred a little $ 1, 524.46.

Treasury of the United States cut short an early advance after the IEA announced that it would release of strategic crude reserves.

The United States Treasury note of 10-year benchmark price was up to cede 2.92% 16/32.

Bunds had already earned after signs of a slowdown in growth in the euro area has raised fears about the ability of Greece and other countries to combat the debt crisis.

Bund Futures rallied to a session high of 35 126.56, the ticks of the day, pushing yields of 10 years to 2.92%.

(Additional reporting by Steven c. Johnson and Robert Gibbons in New York; Lucia Mutikani in Washington; Jonathan cable, Kirsten Donovan and Brian Gorman in London; Written by Herbert Lash)

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Asia moves to tap oil reserves (Reuters)

TOKYO (Reuters)-Asian Nations moved to release emergency oil stocks on Friday as part of a rare global action coordinated by consumer countries to prevent high energy prices of the wonderful a stuttering economic recovery.

The move, led by Washington and criticized by the oil industry as an unnecessary distortion of markets, suggests a fundamental change in the industrialized nations to intervene in the markets of raw materials as an instrument of economic policy.

Brent oil prices cutting back up on Friday after tumbling to a four-month closing low on Thursday, reflecting doubts that the unexpected decision by the International Energy Agency of 60 million barrels to release during the next month would have a long-term impact.

Japanese economy Minister Kaoru Yosano said the move was a warning to speculative buyers, but oil Minister s. Jaipal Reddy of India questioned that the action would have an impact.

"Even if there is a slight increase in production (supply), these gains will not be available to us because of the unbridled speculation on financial markets in the world," he said. "We don't know if this (weaker oil prices) is a stable trend."

The release of Commons is only the third in the history of the Agency which was established as a counter weight exporting Group OPEC 37 years.

Asian IEA members, Japan and Korea has said that next week will begin releasing the oil reserves in line with the objectives of the Agency.

Japan will cut the reserve requirement for oil companies from 7.9 million barrels over the next 30 days and South Korea will release 3.46 million barrels, which together provide approximately 19 percent of the target of the IEA.

Australia and New Zealand, the remaining members of the Asia-Pacific region, are participating.

The news follows a group of 20 agreement, struck in Paris on Thursday, transparency and coordination of the food market policy to tackle soaring food prices by boosting farm output.

The G20 deal is another sign that global policymakers are reaching beyond the traditional instruments of economic policy to sustain global growth.

The world economy, was recovering from the 2008-2009 financial and economic crisis, showed signs of losing traction in recent months and the Federal Reserve acknowledged that this week cut its forecast of growth in the world's largest economy.

The costs of raw materials of high that SAP the spending power of consumers and squeeze profit margins of producers are accused of much of the slowdown.

SCARCE OPTIONS

Industrialized Nations managed to pull their economies from the brink of depression by distribution of trillions of dollars in stimulus packages and reducing borrowing at record lows.

But that left rich economies from Japan to the United States with huge debt and some policy options if they were to weaken once again their economies.

While the release of oil was led by United States and other developed nations, booming emerging powers like China and India also are set to benefit who seek to contain stubbornly high inflation without sacrificing too much growth.

"To a certain extent, that will help you to reduce certain Asian countries facing inflation pressure and is also good news for the global economic recovery," said Gong Jialong, former President of an organ which represents the body of China's petroleum industry.

Gong and others, however, opposed the move which will increase the supply of approximately 2.5 percent currency market intervention. It's not something that could reverse a trend, but it might help prevent excessive price moves.

"The impact hoped for is not to cause a downward trend in commodity markets, but rather to prevent potential increases resulting from increased demand third quarter, said PFC energy consulting company with offices in Washington.

Seasonal demand ramps up oil in the third quarter as refineries prepare for winter in the northern hemisphere, when the peak heating according to consumption.

Another factor, suggesting that the IEA decision will impact only short-term prices is that oil is an incremental increase in demand now that many countries are turning from nuclear energy production after the crisis of Japan, said a Japanese Government official.

"Demand for fuel will increase globally with more countries able to rely on nuclear power, the more that initially had hopes."That means prices have more reason to climb over the decline, he said. He declined to be identified because he is not allowed to speak to the media.

JPMorgan Chase, however, said that even some cooling effect of prices would be a boon for the world economy.

"If our projections are made, the release of the IEA provides the equivalent of a stimulus of 140 billion dollars for consumers," it said in a statement. "The release will prove to be challenging for the global economy, particularly in the United States and emerging markets."

DEEPEN CONSUMER CONCERN

The IEA's decision was the culmination of a plan that President Barack Obama set in motion more than a month ago and show concern for discussion among rich Nations on the economic damage from high energy costs.

Obama drew immediate criticism from the oil industry and Republicans, who called it an inappropriate misuse of stocks that risks leaving the Government with less ammunition should a deeper crisis of supply to emerge.

Oil prices have increased 20 percent last year, pushing the prices of gasoline retailing U.S. $ 4 a gallon.

While Brent crude oil reached over $ 125 in April, has since fallen sharply. After dropping a further 6 percent on Thursday, prices are only slightly higher in mid-February, just before the Libyan conflict began.

The IEA said the action would fill shortages caused by the conflict and Libyan oil quickly get to the market while Saudi Arabia makes good on his promise to pump more oil.

The 28-nation Agency will decide whether to release more oil in a month.

The two previous releases followed by abrupt shortage caused by the first Gulf war in 1991 and by Hurricane Katrina in 2005, and the global response was swift. In this case, it was more than 3 months from the moment of Libya's exports stopped.

The United States will provide 30 million barrels from its huge-727 million barrel crude reserve, about 1.5 days of consumption of the United States, with Europe providing 30 percent in crude and refined products and the rest from OECD Nations.

(Reporting by Rie Ishiguro and Leika Kihara in Tokyo Cho Mee-young in Seoul, Rob Taylor in Canberra, his ancestor Beckford in Wellington, Simon Webb in Singapore, Lan Xin Shou and Wang to Beijing and Nidhi Verma in New Delhi; Editing by Neil Fullick)

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Fundamental for the reform of custody risk retention: Treasury (Reuters)

WASHINGTON (Reuters)-regulators want to ensure that mortgage lenders keep some risk on the loans they originate, as is crucial to strengthen the housing finance system, a senior Treasury official said on Friday.

"We are committed to implementing reforms risk retention so thoughtful that ensures a constant access to mortgage credit for borrowers with low and middle income and protects the health of the housing market still fragile," Treasury under Secretary Jeffrey Goldstein said in remarks prepared for delivery at the Conference of mortgage.

"Best practices for underwriting mortgages are good for consumers, good for the financial industry and good for the economy," said Goldstein.

The Treasury is involved in implementing requirements from reform bill Dodd-Frank Wall Street for curbing recruitment at financial firms. He invited the Federal regulatory legislation to establish new guidelines for lenders and originators of loans securitized, the types of tools that has fueled the financial crisis of 2007-2009.

The proposed rules are intended to reduce risk-taking forcing lenders to take on a share of 5 percent loan bundled for investors in the secondary market. Regulators proposed an exemption for so-called qualified residential mortgages when borrowers make payments down 20 percent.

Critics say that the rules would keep potential buyers first time out of the real estate market and drive up borrowing costs because lenders would charge higher rates for the loans that do not qualify for exemption. A commentary on the rule proposal expires on August 1.

The new rules are proposed jointly by six federal regulators: the Federal Reserve, the Department of housing and urban development, the FDIC, the Federal Housing Finance Authority, the Securities and Exchange Commission and the Office of the Comptroller of the currency.

An unlikely Alliance of mortgage and consumer groups-including the American Bankers Association, the Center for responsible lending and the national Community Reinvestment Coalition-have submitted a petition to make changes and regulators say the proposal could make it harder for borrowers to find affordable home loans.

Goldstein said regulators were trying to balance access to credit with strengthening the resilience of the housing finance system. Risk retention rules are "important" part of that effort, he said.

"Fundamental Flaws of the securitization market and the original model to deploy were a key factor for the housing bubble that helped plunge the worst recession since the great depression," said Goldstein.

He said that the final rule will address the main problem seen in financial crisis: a "lack of alignment of interests between the creators and securitizers compared to investors". (Reporting by Margaret Chadbourn; Editing by Ramya Venugopal)

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China's Wen says prices under control: report (Reuters)

London/BEIJING (Reuters)-Chinese Premier Wen Jiabao played his most optimistic this year on the fight against inflation Beijing, saying that he expects the price pressures to decline steadily as the country maintains its vibrant economic growth.

In an opinion piece published in Friday's Edition of the newspaper Financial Times, Wen wrote that it was "confident price increases will be firmly under the control of this year", and that China is "fully capable of sustaining economic growth steady and fast".

Wen's comments came as he kicks off a tour in Europe affected by debt and a timely response to investor concerns that China, in its struggle to tame close to three years of high inflation, could tighten monetary policy to the detriment of economic growth.

"There is concern, if China can curb inflation and bolster its rapid development," said Wen. "My answer is an emphatic yes."

"China has made capping price increases the priority of macroeconomic regulation and introduced a series of policies. These have worked, "he said.

"The general price level is included in a controllable range and should fall steadily".

But some analysts said it was too early for China to declare victory in the fight against inflation and investors cautioned against thinking that Wen was signaling an imminent change in monetary policy.

Lu Ting, an economist at Merrill Lynch-Bank of America, argued that Wen could have deliberately sounded so positive as he knew that he was addressing foreign readers of the Financial Times.

In Chinese culture, there is a tendency to play up the accomplishments, when it comes to the outside world and the pendulum swing the other way to underscore the challenges when talking about one of your own, Lu said.

"Readers should read the article with a grain of salt," he said. "Despite these positive messages from Wen, could be wrong to expect the Chinese Government to change its political position soon."

Lu said it still expects China to raise interest rates again this year. That is more or less in line with market forecasts for a rise of 25 basis points in benchmark lending rates and an increase of 50 basis points of deposit rates.

On the global economy, Wen said that he was recovering from turmoil seen in financial crisis, but said many uncertainties remained, and that the recovery was fragile.

He pointed to uneven global growth, stubbornly high unemployment in developed economies, mounting debt risks and inflationary pressures.

"While the shock of the crisis is still in the end, new risks have emerged," said Wen. "The world must cooperate closely to meet the challenges."

LOOKING AT RATE RISE YET

Latest comments on inflation in China Wen were marked a shift from his comments in March, when he warned about the growing expectations of inflation and price compared to a tiger that is difficult to cage, once it is left out.

China's inflation raced to a 34-month high of 5.5% in the year to may and should accelerate to 6 percent in June or July.

That would be well above the inflation target 2011 China's 4 percent, did not mention that Wen on Friday.

Some analysts have noted, however, that the official inflation target of China's malleable that certain objectives may violate the Central Bank. For example, Beijing has for years defeating the objective of economic growth of 8 percent.

Because wages in China are expected to rise in coming months and a stubbornly buoyant property market that has kept housing prices to record levels, economists doubted China can rest easy in its anti-inflation campaign anytime soon.

"Inflation could peak in June or July, but there are many underlying factors which could push up prices as labour costs and inflation of the agricultural product," said Hua Zhongwei, an analyst with securities Huachuang in Beijing.

Still, shares of Hong Kong and Shanghai rebounded Friday morning after Wen's remarks on inflation. Shares in China were among the worst performers in Asia this year on persistent concerns of further tightening policy to combat price pressures.(.HK)

(Reporting by Paul Hoskins in London, Koh Xin Gui Qing and Zhou in Beijing; Editing to Jacqueline Wong)

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EU to pressure Greece amid talks of toppling of Bank (Reuters)

Athens/Brussels (Reuters)-new Greece's Finance Minister met EU officials and the IMF Thursday to address gaps in its austerity plans with EU leaders, insisting that tough measures are taken in exchange for financing to avoid bankruptcy.

Euro-zone Governments are meanwhile constraints banks and insurers to keep exposure to Greek sovereign debt when their bonds mature as part of a planned rescue according to Athens.

Inspectors from the International Monetary Fund and the European Commission, European Central Bank has met Finance Minister Evangelos Venizelos in an attempt to smooth out differences on the bailout program, which wants to change to appease an angry public.

"There is a gap of 3.8 billion euros out of the total package of 28 billion that should be discussed with the troika," a legislator who took part in a parliamentary Committee with the Minister told Reuters. Athens has approved a five-year austerity plan 28.3 billion in tax increases, spending cuts.

Officials say Venizelos, promising a fairer tax system, would backpedal on plans to lower the threshold of income tax and to raise oil-heating sets that would create a financing gap.

While not against changes in principle, there must be robust, credible alternative measures to bridge the gap, said an EU source.

The stakes are high with signs of economic slowdown in emerging Europe even without the threat of a Greek default and the contagion that would follow.

"The risk of a severe financial crisis and the beginning of a new recession are very high right now," Jyrki Katainen, officially sworn in as Minister Wednesday, was quoted as saying by public broadcaster YLE.

Combination batting and moral support, EU leaders gathering in Brussels say Greek Prime Minister George Papandreou, who will release the next 12 billion euros (US $ 17.2 billion) in emergency aid, on 3 July, to prevent running out of money, provided the Athens Greek Parliament adopts key economic reforms in a crunch vote in Parliament next week.

Senior official EU economic, Olli Rehn, said Europe was ready to help Greece return to economic growth, "but the first thing is that Greece must help itself, so that other Europeans can help Greece. This is the bottom line. "

While Papandreou expressed confidence for the public vote, the Slovak Minister Iveta Radicova said he had expressed doubts in a private phone call Wednesday.

"Papandreou has serious doubts whether the necessary steps will in Parliament," said the Slovak Radicova the European Affairs Committee of Parliament.

The Greek crisis is set to dominate EU Summit, the fourth this year, as the 27 leaders grope for a solution to the debt woes that have forced the Greece, Portugal and Ireland to seek bailouts.

There are no any formal decision on Greece, but the rally will be monitored intensively by financial markets for any message you send to the EU if the plan can work.

Investors are skeptical. Five-year credit default swap on the Greek government debt 138 basis points has risen to 2.025 bps, according to Markit data monitor, implying a more than 80 percent probability of default during that period.

The US Federal Reserve Chairman Ben Bernanke said on Wednesday that much more than the future of Greece was at stake.

"If there were a failure to resolve this situation, would pose threats to the European financial system, the global financial system, and drive European politics, would guess, well," he said.

Default is Greek would force European banks and Governments take large losses, spread the infection to other sovereigns eurozone stressed and potentially plunge the economy of the world's largest trading bloc in the world, already slowing, into recession.

GET BANKS ON BOARD

Papandreou's reshuffled the Government won a confidence vote in Parliament earlier Wednesday, one of several obstacles on the path to avoid a default.

On 28 June, Parliament will vote on a package of privatization, tax increases and spending cuts and Finance Ministers of the eurozone will review progress on 3 July to release the next tranche of loans.

Despite calls EU and IMF to Greek political leaders to unite behind the program, all opposition politicians voted against the Government a vote of confidence, and 20,000 protesters chanted insults outside Parliament.

EU leaders Conservatives were planning to exert strong pressure on the Greek opposition leader Antonis Samaras, to support the bailout in a pre meeting on Thursday.

Although Greece is able to convince the EU and the IMF is fully committed to making budgetary adjustments, this will buy has asked the Government just truce of a few months and most economists expect will eventually by default.

Greece accepted a package of 110 billion euro of EU/IMF loans in May 2010 and now needs a second bailout of similar dimensions to its financial obligations until the end of 2014, when it hopes to return to the capital markets for funding.

Euro area Member States, led by Germany, insist every second aid package should include the involvement of the private sector. But the rating agencies said they would treat a voluntary rollover of debt default is selective, potentially starting a chain reaction of turbulence on the markets. ? "We are working on a solution that is based on a voluntary rollover and I predict that it will create a credit event," said Rehn.

The meetings on Wednesday, banks and insurers in Germany, France, Spain and Belgium were invited by the national central banks to roll over their Greek debt voluntarily when the bonds mature, said banking and Government sources.

French-Belgian Banking Group that Dexia is ready to roll the exposure to Greek debt, the largest Belgian Bank, adding to the list of banks prepared in principle to take part in a financial source said.

The medium-term economic reform agreed by Athens provides for the collection of 50 billion euros by selling state companies and includes 6.5 billion of spending cuts and tax rises in 2011.

Although Greece reaches its objectives-and has already lost many still won't be able to manage their own debts, amounting to 150 percent of gross domestic product.

(Additional reporting by Martin Santa in Bratislava, Deighton and Robert-Jan Bartunek, in Brussels, George Georgiopoulos and Lefteris Papadimas in Athens; Written by Mike Peacock, editing by Janet McBride)

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Wall Street reversed sharp sell-off after Greek deal (Reuters)

NEW YORK (Reuters)-stocks closed off session Lows so Thursday on news Greece agreed to an austerity plan for five years, but lingering economic uncertainties ultimately led S & P 500 less, while maintaining a downward trend.

Nearly 30 percent of the daily volume traded in the last hour. That coincided with the turnaround in the market and news of Greece, which laid the basis for a resolution of credit problems in Athens that have hurt investor sentiment around the globe.

"The agreement on the austerity plan, which is really what has the market going," said Paul Hickey, co-founder of bespoke investment group of Harrison, New York.

The question now remains if the soaring end day is a harbinger of renewed interest in buying or if it was only a pause before sale returns in the coming days.

"We're going title for title, which is typical of a market pullback," said Hickey. "There is a lot of tangible evidence for investors to go now."

S & P 500 fell in less than a half-point of its 200-day moving average-a line the Bulls were able to hold since last September. Technical analysts monitor that level as an indication of the long-term trend, and a tight consistency under it could trigger sell more.

"It is certainly positive and encourages people," said Hickey.

Sources with knowledge of the talks told Reuters that Greece has won the support of a team of inspectors from the European Union and International Monetary Fund for his new austerity plan of five years after committing a further cycle of tax increases and spending cuts.

The Dow Jones industrial average (.DJI) fell to 59.67 points, or 0.49 percent, to end at 12.050. The Poors 500 (Standard &.SPX) lost points 3.64 or 0.28%, up to 1, 283.50. But the Nasdaq Composite (.17.56 IXIC) earned points, or 0.66 percent, to close at 2, 686.75.

An analysis on measurement showed that the S & P 500 posted the strongest comeback in nearly a year, in the days when the benchmark fell more than 1 percent. From its session low, the index rose more than 20 points in closing.

Dow swings covered 233.79 points intraday low to high session. For the second straight day, the Nasdaq managed to finish the session in positive territory for the year.

MICRON AND ORACLE LATE AUTUMN

After the closing bell, Micron Technology (MU.O) actions fell nearly 13 percent as the company's quarterly revenue fell short of expectations.

Oracle Corp. (ORCL.O) fell 3.3 percent share in extended trading as investors were disappointed that beat his profit estimates with a narrower margin than in recent quarters.

Earlier in the day, markets were sold during the regular session as oil's slide to a trimester down triggered declines in a market already bad after comments from Federal Reserve Chairman Ben Bernanke on Wednesday on a recovery of economic slowdown.

Skepticism remained despite the deal Greek as details were not yet known and any agreement still had to win a vote in Parliament.

"When is 3 hours on a Thursday afternoon and short sellers see this title (affair of Greece), they cover questions before and after," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

He said, since there was already a plan pending a vote, the difference might be a change in terms that might make it easier to move to the Parliament in Athens next week.

U.S. crude oil Futures settled at $ 91.02 a barrel, down $4,39 or disable 4.6 percent, after the International Energy Agency said it will release 60 million barrels of strategic oil stocks. For details, see

The slide in oil prices was exacerbated by a rise of 0.7 percent in US dollar index (.DXY), which tracks the performance of the greenback against a basket of major currencies. In times of stress, the flight to safety that pushes the top dollar makes oil more expensive, undermining further the demand for crude and other commodities priced in dollars.

Give some support to the market, oil prices tumbling raised an index of stocks of airlines (.XAL) of 2.4%.

Bets that the lower prices at the pump will open the wallets of consumers boosted the retail sector index P (S &.RLX) by 1.4 per cent.

S & P BOUNCING KEY SUPPORT

Bounce & P's 500 outside its 200-day moving average was the second in a week. Last Thursday, a brush with that level enticed buyers and the reference index closed in black for the day. The 200-day moving average now coincides with the intraday high of 262.60 1, 2010, giving extra support.

"What it means is that if you make trading momentum, you can place bets, and a lot of big money is doing, momentum trading," said George Feiger, CEO of Contango Capital Advisors in San Francisco.

"But the story of the big picture remains the same. We are looking at the growth of small and very small return in stocks for the coming years. "

His view differs from median of 46 respondents equity strategists in the last week, which showed an expectation of an increase of 11 percent in the S P 500 & for the year, which would take 1,400.

Economically, the United States claims for unemployment insurance rose more than expected last week, suggesting little improvement in the labour market. Other data showed sales of new homes fell in May.

About 8.31 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the average so far this year of 7.57 billion.

Declining stocks outnumbered advancing ones on the New York Stock Exchange in a ratio of 17 to 13. But on the Nasdaq, about seven rosa stocks fell for every six.

(Reporting by Rodrigo Campos; Further notification from Ashley Lau; Editing by Jan Pasquale)

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EU leaders appoint Dragons ECB President until 2019 (Reuters)

Brussels (Reuters)-EU leaders have formally appointed Mario Draghi of Italy to be the next President of the European Central Bank, draft Summit conclusions EU showed on Friday.

The decision clears the way for Dragons, 63, to take over from Jean-Claude Trichet when French steps at the end of October, after eight years in the job.

"The European Council appointed Mr Mario Draghi, Chairman of the European Central Bank from November 1, 2011 to October 31, 2019," showed a draft conclusions obtained by Reuters.

In a press conference late Thursday, Herman Van Rompuy, President of the European Council, said that the Dragons had not been discussed during the first day of a two-day summit but that his appointment was on the agenda of talks Friday.

In recent weeks, French officials had expressed concern about the appointment of Dragons, worried for Italy to finish with two members of the Executive Board of the ECB. Lorenzo Bini Smaghi is already on the six-member Panel that sets interest rates, with 17 other euro zone Central Bank Governors.

French officials had suggested that Bini Smaghi should replace Dragons as head of the Italian Central Bank, paving the way for a French person be appointed to the Board of Directors.

In April, Italian premier Silvio Berlusconi promised French President Nicolas Sarkozy that Italy would yield place to Bini Smaghi on Board of the ECB to a French candidate, in exchange for France's support for the President of Dragons.

The problem was that Berlusconi did not first consult Bini Smaghi, whose eight-year mandate ends in may 2013 BCE. Bini Smaghi has refused to leave, creating a situation of discomfort for Berlusconi that remains unresolved.

Officials said the wait time was that Italy would solve the situation with Bini Smaghi when Dragons takes over in November, although it is not clear how.

While Dragons, a highly respected economist and banker, won widespread support for his candidacy in recent months, there were doubts early in the process his nationality and occupation with Goldman Sachs (GS.N) might obstruct its path work best Europe's central banks.

In appearances before the European Parliament's Finance Committee, the Dragons made it clear that his role at Goldman Sachs, between 2002 and 2005 did not involve the sale of financial instruments but was largely a consultative position.

He also stressed his experience in the financial stability Oversight Board of Europe and emphasised the common thinking that he shares with Trichet on monetary policy and the risks to the financial system of a failure to address Greece's debt crisis.

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Exclusive: Deutsche Cooking of top trader sparks probe (Reuters)

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NEW YORK (Reuters) – In the fall of 2009, Deutsche Bank quietly fired one of its top derivative traders in London after a colleague in New York complained about finding "substantial trading anomalies" in a multibillion dollar portfolio of high-risk credit default swaps managed by the German-based bank, Reuters has learned.

The bank dismissed Alex Bernand after a quick internal investigation prompted by the employee's complaint led to the discovery of improper trading in one of Bernand's personal brokerage accounts, according to documents seen by Reuters and interviews with people familiar with the situation.

The documents, part of a Sarbanes-Oxley whistleblower action filed against Deutsche in May 2010 by the employee in New York, also reveal that the Securities and Exchange Commission opened an inquiry last year into a related allegation that some of the assets in the derivatives portfolio overseen by Bernand may have been improperly valued in order to hide trading losses.

Deutsche bank spokeswoman Renee Calabro declined to comment on Bernand's dismissal. But she said the allegation that some assets in the bank's derivatives book had been improperly valued was investigated by the bank and is "wholly unfounded."

The SEC investigation and Bernand's October 2009 firing, neither of which has been previously reported, come as Deutsche is aggressively winding down the portion of its derivatives trading business that Bernand had overseen. Earlier this month, the bank reported in an investor presentation that its plan to unwind its "high-risk" credit correlation portfolio "is well ahead" of schedule. The bank first announced a plan to begin "de-risking" some of its derivatives trading desks in late 2008.

In January, Deutsche settled the whistleblower case by agreeing to pay $900,000 to trader Matthew Simpson and promoting him to managing director shortly before he voluntarily agreed to leave the bank in April. It was the largest Sarbanes-Oxley whistleblower settlement for a complaint filed in 2010. Simpson, who now works for Rochdale Securities in Stamford, Connecticut, did not return a phone call seeking comment.

UNFOUNDED ALLEGATION

"This complaint, which is over a year old, has been the subject of a thorough investigation, and we believe that any allegations about financial misreporting are wholly unfounded," said Calabro, who declined to comment on the terms of the settlement with Simpson. "The bank is cooperating with the SEC on its review of the matter."

An SEC spokesman declined to comment.

Bernand, who lives in France, also declined to comment. On his LinkedIn profile, Bernand describes himself as an "independent philanthropy professional."

Simpson's and Bernand's names were redacted from the whistleblower documents seen by Reuters, but their identities were confirmed by two people familiar with the situation.

In its settlement agreement with Simpson, Deutsche also denied "any wrongdoing in connection with the matter." In light of the settlement, the U.S. Department of Labor in February closed its investigation into Simpson's claim that he had been retaliated against by some of his superiors for bringing the allegations of improper trading to the attention of the bank's compliance department.

The firing of Bernand, a one-time rising star in the derivatives world, is something of an embarrassment for Deutsche. In 2006, the bank issued a press release to trumpet his hiring from Bank of America as its global head of credit correlation. At BofA, Bernand had pretty much built the Charlotte, North Carolina-based bank's structured credit trading business from scratch.

Inside Deutsche, the portfolio that Bernand oversaw from London was called the "exotics book," because many of the derivatives in the portfolio were tied to complex securities. At its peak, the portfolio was one of the largest on Wall Street with the assets underlying the trades valued in the tens of billions of dollars.

ILLUSORY PROFITS

The bank's credit correlation desk specialized in using credit default swaps to make proprietary trades that were aimed at hedging some of the bank's exposure to potentially risky corporate bonds, leveraged loans, currencies, indexes and commercial paper. Many of the trades put on by correlation traders involve synthetic collateralized debt obligations (CDOs), financial instruments that use credit default swaps to get exposure to various bonds and other assets.

Some have blamed credit default swaps -- a type of derivative that is supposed to provide a level of insurance against an underlying asset going bad -- with exacerbating the global financial crisis because they increase the level of risk on balance sheets of the world's major banks. However, the synthetic CDOs traded by the correlation desk were not like the more popular variant of CDOs which were stuffed with subprime mortgage securities.

Janet Tavakoli, a Chicago-based derivatives consultant who has written several books on credit derivatives and structured products, said many bank managements did not fully appreciate the illusory nature of the trading profits being generated from derivatives correlation desks before the financial crisis. She said those profits often disappeared and turned into losses when the underlying assets turned south.

"The thing about correlation desks is that it will appear you are making a lot money from trades, but it is all money at risk," said Tavakoli. "I call this kind of trading an invisible hedge fund."

In an early 2010 regulatory filing, Deutsche attributed some of the rise in the bank's value-at-risk, or VAR, at the end of 2009 to a "recalibration of parameters in the Group's credit correlation business."

On Wall Street, VAR is one metric used by a bank to estimate how much money it could conceivably lose in a day if all of its trading bets and hedges went awry. It's an imperfect measurement, but one followed by most industry analysts.

A person familiar with Deutsche said the bank is winding down the credit correlation desk to both reduce its risk profile and better comply with the so-called Volcker Rule's ban on proprietary trading in the United States.

The bank's internal investigation into Simpson's allegations was overseen by the big New York law firm Fried Frank.

The revelation that the SEC is investigating the valuations used for some of Deutsche's derivatives portfolio comes at an awkward time. Over the past few months, the bank has taken some high-profile lumps for its role in contributing to the financial mess.

A Senate report released in April faulted Deutsche for continuing to churn out collateralized debt obligations and other securities backed by subprime mortgages even as the housing market in the United States was starting to crumble. The report from the Senate's Permanent Subcommittee on Investigations said Deutsche aggressively marketed CDOs to its client, "despite the negative views of its most senior CDO trader" about the failing health of the housing market.

Just last month, federal prosecutors in New York filed a civil suit against Deutsche, claiming its MortgageIT subsidiary repeatedly lied about the quality of the mortgages it was issuing to obtain federal guarantees on those iffy home loans. The government seeks to recoup some $1 billion in losses it incurred from insuring the mortgages. Deutsche contends most of the problem loans were issued before the bank acquired MortgageIT in 2007.

Before filing his whistleblower complaint last May, Simpson had built a long track record at Deutsche. Over the dozen years he worked for the bank in New York, he held positions in finance, risk management and then trading. He joined the firm's correlation trading group in 2008 and was responsible for trading derivatives tied to bonds and currencies.

In his whistleblower complaint, Simpson said when he reported his concerns about trading improprieties to Deutsche's compliance department he "expressed concerns for future retaliations."

Among the acts of retaliation that Simpson alleged were being passed over for a promotion in February 2010 and later "stripped" of all his trading and management responsibilities. Calabro said the bank denies Simpson's claim of retaliation.

(Reported by Matthew Goldstein; Editing by Michael Williams and Claudia Parsons)

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Ford, Toyota peaks of key quality survey (Reuters)

DETROIT (Reuters)-problems with new technologies, including an awkward control system for its radio pounded Ford Motor Co (F N) ranking in a closely watched ranking, just a year after the U.S. led his rivals of the mass market.

Reversal of fortune, Japanese automaker Toyota Motor Corp. (7203) namesake brand, which last year, fell to its lowest ever rankings due to a series of damaging the calls, pulled out a corresponding bounce, according to the influential US consumer study published Thursday by J.D. Power and Associates.

U.S. automaker Ford, just to avoid bankruptcy and a Government bailout, saw the slide of the namesake Mark 23-his lowest spot in a decade, down from fifth place last year, which represented, its highest ranking ever. Toyota bounced from 7 to 21 last year.

"Ford is on the Board, certainly in the mass market, to try to bring new technology in vehicles, said the vice President of David Sargent, J.D. Power's global search of the vehicle."With that comes some risk that there will be no unexpected problems and this is exactly what happened.

"There is a large amount of parity between different vehicles and different brands, so if you have a significant problem in a particular area, that can really set back in terms of ranking," he added.

Toyota's luxury brand Lexus captured the top spot, climbing from fourth last year.

J.D. Power study, which faced difficulties from the new record owners of cars in the first 90 days of ownership, was conducted between February and may this year.

The results of the survey, the most comprehensive quality of new cars, are used heavily in the auto industry marketing and are seen as influential in shaping consumer perceptions. It is also seen as a barometer for the values and resale as a proxy for warranty costs.

RESTART A CAR?

Ford customers are automotive audio and internal control systems, too complex or sometimes unusable, Sargent said: "it is not easy to restart a drive as a computer."

Mark Fields, Ford President of the Americas, said Tuesday before the release of the survey that the assessments of the quality of the company would be "mixed" for the year.

Ford has been dinged early in the year when the influential magazine Consumer Reports did not give a rating of "recommended" to his SUV Ford Edge and Lincoln MKX due to the complexity of touch MyFord and MyLincoln touch systems.

Ford has acknowledged these problems, making changes software and customers by offering education at Ford dealers. It also said Tuesday it is working to facilitate the use of voice control systems in its vehicles and make improvements on some of its engines.

"As we see the problems in our reporting, we miss them and quickly address them," fields said.

Ford, whose F-150 pickup truck ranked No. 6 overall before the Toyota Tundra truck at no. 12, reiterated on Thursday moved quickly to address consumer complaints and quality is back on track.

On average throughout the industry, American consumers reported 107 problems to 100 vehicles sold, an improvement from 109 problems last year and a performance of all time best in the history of 25 years of the study.

However, the industry average for the new or redesigned vehicles slid heavily the 10 percent to 122 problems to 100 vehicles, J.D. Power said. The decline was sharper in the engine and transmission, as well as the category audio, navigation and entertainment.

Software to improve fuel efficiency sometimes leads to the engine or transmission "hesitation" when accelerating or changing gears, J.D. Power said.

Meanwhile, rates problem in category audio and entertainment jumped 18 percent, while many consumers complained their hands-free voice-activated systems were not always intuitive or not function properly.

U.S. carmakers in recent years have invested heavily in an attempt to bridge the gap with Japanese carmakers, led by Toyota and Honda Motor Co. (7267. T), which had established a reputation for eliminating defects from engineering and production. However, after finishing on average before the import brands for the first time ever last year, they again this year.

General Motors Co. (GM.N) Cadillac GMC truck and luxury brands were the only ones among top U.S. carmakers to industry average, coming in 9 and 10 seats. Only the top 10 brands in the survey topped the industry average.

GM Chevrolet and Buick brands ranked 14 and 20 of the 32 brands measured. Mark Ford Lincoln finished 17TH, while Chrysler (FIA.Jeep and Dodge brands, Ram, I) classified 16, 22, 25 and 32, respectively.

(Reporting by Bernie Woodall in Detroit, additional editing by Dave Zimmerman)

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Oil dips to lowest since February as IEA taps stocks (Reuters)

NEW YORK (Reuters)-oil prices crashed more than $ 8 for a minimum of four months Thursday after consumer Nations of the world said they would band together to help the global economy by releasing emergency oil reserves for the third time.

Oil prices fell to their lowest since the eruption of the civil war of Libya in February stemmed exports from OPEC member, putting a strain on global supplies of oil. International Energy Agency said it would be helpful to ease the strain releasing 60 million barrels of Government stock, immediately increase global supply of almost 2.5 per cent.

The move shocked traders who had been waiting for the IEA's best exporter Saudi Arabia to give more time to compensate for the deficiency in supply next OPEC meeting failed 8 June, when other members blocked the efforts of the Gulf of excursion.

"I am really surprised. All saying that you have enough stocks. This should keep WTI (U.S. crude) under $ 100 (per barrel), but we really want Brent there this should help, "said Robert Montefusco, at Sucden Financial Broker.

Brent crude Futures for August plunged by more than 8 dollars after news, almost its lowest intraday price since February 22. From 10:03 am EDT was down to $ 7.41 106.80 a barrel set for its biggest fall from a deep crisis on 5 May.

U.S. crude delayed the decline, but still fell 5.20 $ $ 90.21 a barrel, prices more than 20 percent below their early may peak at more than $ 114, the highest since 2008.

The move came as the oil market has dropped sharply amid concerns over global demand for fuel higher than expected jobless claims United States U.S. growth forecasts lower, and the evidence of a slowdown in Chinese production.

New claims for unemployment benefits United States rose more than expected last week, a Government report showed Thursday, suggesting little improvement in the labour market this month after employment stumbled in May.

The Sell-off followed a move by the US Federal Reserve on Wednesday cut its growth forecast for the world's largest economy.

IEA EYES ECONOMIES

"This interruption of supply has been underway for some time and its effect has become more pronounced as he continued," the IEA said. It is said that the expectations were that Libyan production would remain out of the market for the rest of 2011.

"A greater grip on the oil market is likely to undermine the fragile global economic recovery," he said.

The release of the IEA to 2 million barrels per day (bpd) over the next 30 days, is more than the daily loss of exports of 1.2 million barrels per day of Libya and despite many views that the world is not immediately run out of crude-though many analysts and agencies also agree that markets are tightening this year.

In this context, analysts have said that the use of reserves now-unlike the previous two releases, which immediately followed the first Gulf war and Hurricane Katrina-reported that may have been more interested to temper prices to help a faltering economic recovery.

"The move is significant because it represents a capacity by member countries for the remedy of last resort to high oil prices," said John Kilduff, new capital partners LLC. "Clearly, the peak price of energy is being cited as the reason for the economic slowdown and this is a reaction to that. The Libyan provides good cover interruption. "

(Additional Reporting by Manash Goswami to Singapore and Christopher Johnson in London; editing by Lisa Shumaker)

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Wall Street tumbles on economic worries, oil selloff (Reuters)

NEW YORK (Reuters)-stocks tumbled Thursday, with key indexes falling more than 1 per cent and a volatility indicator, as weak data spiking on the labor market combined with a sharp decline in oil prices triggered a selloff.

Energy stocks took a hit after the International Energy Agency said it would release oil from its strategic reserves. U.S. crude oil Futures fell 5 percent to $ 90.85 per barrel.

The energy sector (& P S.GSPE) fell 3.3% while Chevron Corp. (CVX.N) fell about 4 percent to $ 97.16, the biggest decliner on the Dow. Exxon Mobil Corp (XOM.N) was shut down 3.2 percent to $ 77.30.

The Dow Jones industrial average (.DJI) fell 173.08 points, or 1.43%, to 11, 936.59. the & 500 Index (Standard Poors.SPX) dropped 19.81 points, or 1 percent, at 1.54, 267.33. The Nasdaq Composite Index (.IXIC) fell 38.66 points or 1.45 percent, to 2, 630.53.

New claims for unemployment benefits the U.S. rose more than expected last week, suggesting little improvement in the labour market this month after employment stumbled in May.

The data came a day after Federal Reserve Chairman Ben Bernanke gave a more pessimistic view on the economy, cutting the forecast for U.S. economic growth and not offering no hint of further monetary support. That prompted investors to sell after a four-day rally that has lifted stocks from a minimum of three months.

The CBOE volatility index (.VIX) jumped the 15.4 percent to 20.74.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)

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LSE offers on the knife as TMX battle heats up (Reuters)

London (Reuters)-The London Stock Exchange faces a nail-biting fight for Canadian peer Group TMX rival bidder after aggressive invented Maple sweetened its offer of a breath during the night.

The British stock market, which had hoped to conquer Canadian shareholders of TMX favoring its agreed all-share of 3.3 billion dollar offer with a special dividend of 673.5 million, on Wednesday, saw Maple retaliation a few hours later.

Maple unashamedly nationalistic, which is supported by 13 of the largest financial firms in Canada, touched its unsolicited cash and stock offer C $ 2 per share above 50 dollars vs. a share, valuing its offer of c $ 3.8 billion (3.88 billion).

With one week to go before crucial shareholder vote on the deal LSE agreed, LSE Chief Executive Xavier Rolet is fighting to ensure that the scale and the weight that the bag needs to fight rivals, agile-new market operators and predators.

Some financiers not involved in the deal say that Rolet played his last hand. Betting against an escalation of the war, one said the prospects for securing TMX "doesn't look good."

"Would look bad if they raised and then raised again just a week before the shareholder vote. It would be like a game of tennis, "he added.

Numis Securities analyst James Hamilton said: "I suspect the LSE shareholders approve the deal on 30 June-whereas a close call that way will be TMX shareholders."

Analysts noted that the special dividend of LSE-LSE 84.1 pence per share and C $ 4.0 to TMX share-could add a welcome element of cash to offer agreed, but it also meant that the company would have to borrow to pay for it.

"The dividend LSE has nothing to do with the value of the deal, rather only means cash dividend for shareholders and a business more leverage. The tax benefit is the only way that the dividend is the most interesting, "said Hamilton.

LSE AMBITIONS HANG IN BALANCE

Exchanges of London and Canada say that their relationship will create a transatlantic stock trading powerhouse with a particular specialisation in minerals and raw materials, the existing strength of the Toronto Stock Exchange.

But critics say he would push a key firm in Canada foreign hands, and Maple is pitching itself as a "made-in-Canada".

TMX said he detected a new offer of Maple and would review it.

A spokesman for the LSE declined to comment on Thursday. British actions in the Exchange were flat at 957 pence in midday trade, a FTSE 250 weak bucking. Analysts have long said that the price reflected hopes for market acquisition, LSE.

Exchange, rejected the unwanted attention of bidders before Rolet took the helm of a little over two years ago, would be back in the game if its fails to buy TMX.

"If the LSE doesn't get TMX then someone probably going to come to bid for them," said one of the 50 largest shareholders of the LSE.

American exchange operator Nasdaq OMX, which failed to derail an agreed merger between Deutsche Boerse and NYSE Euronext, has twice tried and failed with hostile LSE acquisitions over the past five years.

Under the offer, shareholders will receive shares of TMX Group LSE 2.9963 for each share TMX, leaving LSE shareholders with 55 percent of the new company and shareholders TMX with 45 percent.

The LSE needs approval from provincial regulators and Federal Minister for industry, Christian Paradis, who must determine whether the offer is of net benefit to Canada.

(Additional Reporting by Victoria Howley and Chris Vellacott)

(Edited by Kirstin Ridley and Erica Billingham)

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