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Fruit and vegetable producer Fresh Del Monte Produce Inc posted a higher-than-expected quarterly profit, mostly on tax benefits and lower interest expense, but its net sales missed expectations due to weak demand across most of its businesses.

For the third quarter, net income attributable to the company was $28.6 million, or 45 cents a share, compared with $29.3 million, or 46 cents a share, a year ago.

Excluding items, quarterly profit was 61 cents a share.

Net sales fell 8 percent to $766.2 million. Banana sales rose 5 percent, but this was offset by declining sales of most fresh fruits and vegetables and prepared food.

Analysts on average were expecting earnings of 37 cents a share, before special items, on revenue of $819 million, according to Thomson Reuters I/B/E/S.

The company, whose rivals include Chiquita Brands International Inc and the recently listed Dole Food Co Inc, saw tax benefits of $12.8 million in the quarter, compared with tax expenses of $2.6 million last year.

Fresh Del Monte’s shares closed at $21.92 Monday on the New York Stock Exchange.

(Reporting by Mihir Dalal in Bangalore; Editing by Himani Sarkar)

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The European Central Bank kept its interest rates at a record-low 1.0 percent on Thursday and its head Jean-Claude Trichet is expected to caution against hopes of a speedy economic recovery.

The decision met analyst expectations — all 82 economists in a Reuters poll had expected interest rates to stay on hold in October for the fifth month running, with most expecting them to stay unchanged until late next year.

“This was no surprise at all,” said Nomura economist Laurent Bilke. “The ECB has signaled there wouldn’t be any additional monetary policy stimulus but that they are not ready for a rate hike yet.”

Financial markets were largely unchanged after the decision.

The Governing Council’s Venice meeting was the second of two held annually outside its Frankfurt base and marks the first anniversary of coordinated rate cuts by major central banks in the aftermath of the Lehman Brothers collapse.

The Reserve Bank of Australia on Tuesday became the first Group of 20 central bank to raise rates after the recession hit.

While most analysts expect the next ECB rate move to be a hike, they forecast that it will not happen before the third quarter of next year. But tighter liquidity conditions may push up market rates before that, futures pricing shows.

The Bank of England also kept its rates on hold on Thursday, as was widely expected quick pay day loan.

Attention now turns to Trichet’s news conference, where he is seen confirming that current policy settings are appropriate. Markets will listen for any clues on the timing and order of the ECB’s exit strategy.

“Current rates are appropriate, that is a key sentence that will probably stay until well into next year,” Bank of America economist Holger Schmieding said.

The ECB is unlikely to detail its exit strategy, just to repeat that it can exit when needed, he added.

Trichet’s comments on how governments should wind back their extra spending and how the ECB will take fiscal exit into account in its monetary policy decisions will also be key.

“They will definitely not do any explicit coordination (between fiscal and monetary exit strategies),” Schmieding said, but added: “There might be actually be a case that if fiscal policy is tightened in 2011, the ECB may take that into account and thus have an indirect impact on its rate policy.”

DOLLAR WEAKNESS

Trichet’s comments on economic recovery will also face close scrutiny. The euro zone economy shrank by a revised 0.2 percent in the second quarter of the year, and analysts expect it to have grown 0.3 percent in the July-September quarter. 

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The nation’s service sector expanded in September for the first time in more than a year, according to a report from a purchasing managers’ group released Monday.

The Institute for Supply Management’s non-manufacturing index rose to 50.9 last month from 48.4 in August. Economists surveyed by Briefing.com had expected a reading of 50, which is the point at which the index reflects expansion.

It was the second consecutive month of improvement in the index, which last indicated expansion in August 2008.

The services sector, which includes businesses such as banks, airlines and restaurants, makes up the bulk of economic activity in the United States.

The ISM’s new orders index, which measures requests for services such as construction labor, rose 4.3 points to 54.2. The business activity index added 3.8 points to 55.1 last month.

Both measures are now at their highest levels since before the recession began, according to Tim Quinlan, an economic analyst at Wells Fargo.

Those gains "suggest that businesses outside of manufacturing are transitioning from recession to recovery," Quinlan wrote in a research report.

The index that measures employment in the sector edged up less than one point to 44.3, but it remains well below the level indicating job growth in the sector.

"Jobs are still a major concern," said Ryan Sweet, senior economist at Moody’s Economy.com. "The employment index is weak and points toward a very slow improvement in the labor market."

Still, the larger-than-expected rise in the overall number could mean that U.S. gross domestic product will come in at a 3% annual rate of growth during the third quarter, according to Sweet.

Prices paid by service sector firms fell sharply in September. The prices index sank 14.3 points to 48.8, indicating a significant reversal and decrease in prices paid from August, according to the report.

The ISM said 15 of the 18 service sectors in the survey expect to derive some benefit from the government’s economic stabilization program.  

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Chrysler Group LLC still plans to shutter eight North American plants according to its initial schedule, Chief Executive Sergio Marchionne said on Thursday, as he dismissed recent reports that a Detroit-area plant would get a reprieve.

Marchionne, who is also the head of the Italian carmaker Fiat SpA, said the No. 3 U.S. automaker will stay with business decisions it made at the time of its April 30 bankruptcy filing, and would advise the U.S. autos task force of its updated turnaround plan.

Under its previously announced restructuring plan, Chrysler said it would close eight auto plants in North America, aimed at steering the faltering automaker toward recovery.

In the past week, reports have said that Chrysler’s Sterling Heights, Michigan plant slated for closure at the end of 2010 would remain open until at least 2012 as the company revamped the two sedans made there — the Chrysler Sebring and the Dodge Avenger.

“There are no plans on my desk that the decision is going to be reversed,” Marchionne told reporters at an appearance at Chrysler’s global headquarters.

Chrysler is offering an update to the White House’s autos task force this week, a U.S. Treasury official said on Tuesday.

“I think we are going to advise them of the fact, that, based on the current assessment of conditions, there is absolutely no need today to go up there and revisit that decision,” said Marchionne.

“And, if and when that need were to arise, then we will look at this as part of a wider set of choices that may or may not include Sterling Heights.”

Marchionne said Chrysler is working on the final details of a five-year turnaround plan to be unveiled in November. The company emerged from bankruptcy on June 10 by selling most of its assets to a group led by Fiat, which took a 20-percent ownership stake in Chrysler and full management control.

Marchionne said Chrysler is in a “cleansing process” similar to one that he led in 2004 when he started a successful turnaround of Fiat, and Chrysler’s weak September sales results do not reflect the true viability of the company.

Chrysler on Thursday reported a 64-percent plunge in September U.S. sales, compared to a year earlier.

He said a combination of factors including the end of the U.S. “cash for clunkers” buyer-incentive program and reduced incentive spending led to depressed sales figures for September.

“We are not bleeding like people think we are,” Marchionne said.

“The future (for Chrysler) is going to be a lot better” than what last month’s sales figures would indicate, he said.

After the “cleansing process” that includes an emphasis on cutting costs, Marchionne said “We need to go back and make products that people want.” 

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Hungary’s central bank will probably cut the benchmark interest rate to the lowest in 18 months today to help the first European Union country to secure a bailout last year overcome its worst recession in 18 years.

The Magyar Nemzeti Bank in Budapest will lower the two-week deposit rate to 7.5 percent from 8 percent, a third consecutive monthly reduction, according to 10 analysts in a Bloomberg survey. Two expect a cut to 7.25 percent. The decision will be announced at 2 p.m.

Policy makers have trimmed 1.5 percentage points off the key rate since July and have said they will continue to ease monetary policy as long as financial stability is maintained. The central bank expects the recession to slow inflation to its target next year.

“The current market situation provides sufficient room for the continuation of the easing cycle, without any threat to financial stability,” Gyorgy Barta and Sandor Jobbagy, economists at the Budapest-based unit of Intesa SanPaolo SpA, said in a note to clients.

Twenty of the 53 central banks tracked by Bloomberg eased monetary conditions in the past three months to fight the recession, including east European countries such as Russia, Ukraine and the Czech Republic in August and September.

IMF Bailout

Hungarian policy makers held rates unchanged between January and June to protect the slumping currency. Investors sold off the forint and the country’s stocks and bonds last year, citing concern about the nation’s ability to repay its debt.

Hungary in October secured a 20 billion-euro ($29 billion) emergency loan from the International Monetary Fund, the EU and the World Bank and the central bank lifted the benchmark rate to 11.5 percent from 8.5 percent in an emergency move.

Policy makers rolled back that increase by July, when they resumed rate cuts after a six-month pause as the forint strengthened from a record low against the euro in March. The currency has gained 14 percent since then, making it the fourth- best performer in the past six months of the 26 emerging-market currencies tracked by Bloomberg.

CDS

Hungarian credit default swaps linked to five-year bonds, the cost of protection against a default, fell to 215.5 basis points on Sept. 25 from as much as 638 basis points in March and 408 basis points on April 14, when Prime Minister Gordon Bajnai took over after the recession toppled his predecessor.

Hungary will be able to return to market financing after measures to curb the budget gap regained investor confidence, Bajnai said in an interview on Sept. 23.

“If there’s no sudden downturn in the markets, then I would expect Hungary to be able to fund itself,” he said. “Hungary has understood this crisis, turned around its economy. Hungary will be one of those economies in 2011, 2012 that will come out of this crisis fastest in the region.”

The economy will probably contract 6.7 percent this year and 0.9 percent next year before returning to growth in 2011, according to the central bank. The recession means there is “no inflationary pressure” and the annual rate of consumer price increases is set to fall to the bank’s 3 percent target next year, the central bank said in the minutes of last month’s rate- setting meeting.

The annual inflation rate unexpectedly fell to 5 percent in August from 5.1 percent in July as an increase in the value- added tax rate had a less pronounced impact as retailers were reluctant to pass on the increase to customers because of slumping demand.

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The first responsibility of the U.S. Securities and Exchange Commission is to protect long-term investors if their interests conflict with short-term traders, the head of the SEC said in a letter revealed on Monday.

“I firmly agree that the commission’s focus must be on the protection of long-term investors,” SEC Chairman Mary Schapiro said in a Sept 10 letter to Senator Ted Kaufman, Democrat of Delaware.

Kaufman had asked the SEC to review what he called “questionable” developments in the structure of capital markets such as so-called dark pools, flashes, and co-location.

Schapiro said that vigorous competition among short-term traders can lead to important benefits for long-term investors but that if their interests conflicted, the SEC had a “clear responsibility” to uphold the interests of long-term investors.

The SEC has been examining market structure issues and is probing aspects of trading and transparency at “dark pools,” where large block trades are done away from central exchanges.

It is also reviewing co-location, where firms rent space at exchanges like NYSE Euronext in an attempt to shave valuable microsecond from trading times.

On Thursday, the SEC is expected to consider a proposal that would ban the use of flashes, or when exchanges flash buy and sell orders to member firms before revealing them publicly.

Schapiro said the SEC must keep a careful watch on the rapid advancements in trading technology to ensure that sophisticated traders are not favored and that federal rules keep pace with market developments.

(Reporting by Rachelle Younglai, editing by Leslie Gevirtz)

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The Obama administration on Friday stepped up its efforts to curb environmental damage from surface coal mining, announcing plans to give 79 permit applications in four states additional scrutiny.

The U.S. Environmental Protection Agency said it wants to make certain the proposed mines won’t cause water pollution and violate the Clean Water Act before permits are issued by the Army Corps of Engineers.

Most of the permits are for mines in Kentucky, the nation’s No. 3 coal-producing state. Also on the list are operations in No. 2 coal producer West Virginia, Ohio and one mine in Tennessee.

The action targets a practice known as mountaintop removal mining. The highly efficient mining method involves blasting away mountaintops to expose multiple coal seams and, in most cases, burying intermittent streams with excess rock.

"Release of this preliminary list is the first step in a process to assure that the environmental concerns raised by the 79 permit applications are addressed," EPA Administrator Lisa Jackson stated.

Environmental groups cheered the administration, which they’ve criticized for not banning such mining altogether.

"We applaud this action," Sierra Club spokeswoman Mary Anne Hitt said.

The coal industry says the decision jeopardizes tens of thousands of jobs.

"By deciding to hold up for still further review coal mining permits pending in West Virginia, Kentucky, Ohio and Tennessee, the agency damages a weak economy struggling to recover in the worst recession in postwar history," National Mining Association President Hal Quinn said in a statement.

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Airbus on Tuesday rejected U.S. calls to renounce government loans for its next airliner after the WTO gave a preliminary ruling against earlier loans, while a Boeing executive hit out at unfair “subsidies.”

In an unpublished draft ruling on Friday, the World Trade Organization said government loans used to develop planes such as the A380 superjumbo were “actionable” subsidies harming rival Boeing, according to sources familiar with the case.

It also ruled that some of the loans, including part of the funds lent by governments to help build the A380, violated an even tougher ban on export aid, the sources said.

The findings, which came in a confidential 1,000-plus page ruling, are the latest chapter in a decades-old battle between Boeing and Airbus for dominance of the global aircraft market, a major source of jobs on both sides of the Atlantic.

The outcome of the case and a European Union counter-claim against alleged U.S. support for Boeing could determine the options for funding Airbus’s next airliner model, the A350.

Washington reacted angrily when Britain, which builds wings for Airbus aircraft, said last month it would provide $565 million in further loans to help develop the mid-sized jet. France, Germany and Spain are expected to follow suit.

Airbus has “absolutely no plans to change the funding for the A350 at the moment,” Christopher Buckley, executive vice-president for Europe and Asia Pacific, said on Tuesday easy payday loans.

“From the Airbus point of view, we strongly believe, as we’ve always done, that reimbursable launch aid is a very good way of launching aircraft programmes,” Buckley told Reuters in an interview at the Asian Aerospace exhibition in Hong Kong.

COMPLEX DISPUTE

Sources familiar with the WTO case said Washington failed in a bid to ensure its complaint applied to future models such as the A350 by describing the loans as one single pot of subsidies.

But a Boeing executive renewed pressure on Airbus to give up loans for the A350, which competes with Boeing’s 787 Dreamliner.

“I think the result of the trade case would determine whether or not that direct subsidies are allowed,” said Rob Laird, vice president of China, East and Southeast Asia sales.

“I assume it will have implications on any new programme that is not yet funded,” he told Reuters in an interview.

The 787 and A350 compete in the jet market’s most promising segment, covering long-range aircraft with 210-350 seats.

Analysts say that could generate thousands of orders worth hundreds of billions of dollars as prosperity returns in coming decades. Airlines have so far ordered 850 787s and 493 A350s . 

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The Toronto stock market closed sharply higher as investors bought shares across most sectors after U.S. Federal Reserve chairman Ben Bernanke said the U.S. economy is on the verge of a long-awaited recovery.

The S&P/TSX composite index closed up 130.67 points to 10,831.18 as sentiment also improved in the wake of oil prices that hit 2009 highs and positive U.S. housing sector data.

Despite the strong showing Friday, the Toronto market lost slight ground for a second week, shedding 16.83 points amid lingering concern about how much support U.S. consumers and Asian economies can lend to a recovery.

During an annual Fed conference in Jackson Hole, Wyo., Bernanke said that "the prospects for a return to growth in the near term appear good."

He did warn, however, that lending is not back to normal, and that the difficulty consumers and businesses are having obtaining loans remain a challenge.

The energy sector rose 1.75 per cent as a strong advance on the main China market and good economic news from Europe helped send the October contract on the New York Mercantile Exchange up 98 cents to US$73.55 a barrel, after rising as much as US$74.72, the high for the year.

Oil prices have risen sharply since data was released Wednesday showing a large drawdown of U.S. crude inventories last week, raising hopes for demand.

Suncor Inc. (TSX: SU) improved $1.05 to $35.53 and Canadian Natural Resources (TSX: CNQ) rose $1.19 to $65.

The Canadian dollar rose 0.46 of a cent to 92.43 cents U.S. and the TSX Venture Exchange was ahead 7.56 points to 1,191.95.

In New York, the Dow Jones industrials surged 155.91 points to 9,505.96, gaining 184.56 points or 1.99 per cent on the week.

The Nasdaq composite index jumped 31.68 points to 2,020.9 while the S&P 500 index gained 18.76 points to 1,026.13.

Though Bernanke's positive assessment on the economy was encouraging, the market's challenges, including rising unemployment and sluggish consumer spending, are certainly far from over.

"You're still losing a quarter of a million jobs a month, you're losing income," observed Andrew Pyle, an investment adviser with Scotia McLeod in Peterborough, Ont.

"Until we stop losing jobs, I think it's ludicrous to talk about expansion in activity because you need something to expand with and if the consumer is still the bulk of the U.S. economy, how do you expect the consumer to deliver solid results without income growth free credit report online."

Meanwhile, a bigger-than-expected jump in U.S. home sales helped give stocks a boost. The National Association of Realtors said sales of existing homes rose 7.2 per cent to a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. Sales had been expected to rise to an annual pace of five million.

It was the fourth straight monthly increase and the highest level of sales since August 2007. The rise in sales came amid a sharp decline in home prices.

The Toronto market also received support from other commodity prices that moved higher. The December bullion contract on the Nymex gained $13 to US$954.70 an ounce while September copper climbed 13 cents to US$2.8805 a pound.

The base metals sector climbed 2.15 per cent with Teck Resources (TSX: TCK.B) ahead 49 cents to $28.88.

The gold sector gained 1.3 per cent and Barrick Gold Corp. (TSX: ABX) moved ahead 59 cents to $37.60.

The financials sector was up almost one per cent ahead of earnings reports coming down next week from most of the big banks. TD Bank (TSX: TD) climbed 61 cents to $63.90 and Manulife Financial (TSX: MFC) advanced 61 cents to $22.01.

In other corporate news, German Chancellor Angela Merkel has offered renewed backing for a bid for General Motors Co.'s Opel unit from Canadian auto parts maker Magna International (TSX: MG.A), saying in an interview published Friday that it is "the better concept."

Magna, in a consortium with Russian lender Sberbank, is competing for a majority stake in Opel with Brussels-based investor RHJ International SA and its shares were ahead 89 cents to $51.05.

Switzerland's Lonza Group AG is making a friendly US$458.5-million bid for Canadian drugmaker Patheon Inc. (TSX: PTI). Patheon says the offer trumps a hostile bid from New York based investment firm JLL Partners Inc. But JLL and its affiliate, JLL Patheon Holdings, issued a statement later Friday indicating it would fight the Lonza bid. Patheon shares surged 80 cents or 31 per cent to $3.38.

Open Text Corp. (TSX: OTC) shares rose 21 cents to $41.51 even as it warned that revenues will be lower than expected from its newly acquired Vignette Corp. online software business, but said it remains on track to meet overall growth expectations.

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Energizer Holdings Inc., the Town and Country-based seller of batteries, sunscreen, razors and feminine products, warned of a choppy business outlook on Tuesday when it reported a drop in third-quarter sales. The company also announced a plan to trim overhead costs and slim its manufacturing and sales operations.

The plan will combine voluntary enhanced retirement severance packages with involuntary layoffs. The costs of the restructuring are expected to be in the range of $22 million to $28 million.

Energizer didn’t disclose how many jobs it hopes to trim. The company employs more than 5,200 in the United States as of Sept. 30.

In the third quarter ended June 30, Energizer’s profits were $73 million, or $1.13 a share, versus $66.7 million, or $1.13 a share, in the third fiscal quarter of 2008. A stock offering in May increased the number of outstanding shares, causing earnings per share to remain unchanged.

Net sales fell 6 percent to $998 million.

Ward Klein, Energizer’s chief executive, said the company’s sales and earnings continue to hold up despite a tough economic environment. But he acknowledged "shortfalls" in the company’s battery business, negative effects from currency exchange rates and a "globally weak consumer environment." Energizer said it expects a difficult fourth quarter.

"Longer-term, we need to insure our cost structure remains aligned to the difficult consumer and macro-economic environment that prevails, while maintaining our investment in existing brands and new products," Klein said in a statement cheap business cards.

"It’s been a very difficult nine months for them," said Morningstar analyst Lauren DeSanto. Consumers and retailers are pulling back on spending, and foreign currency exchange rates have at times taken unhelpful turns.

Still, analysts said they were encouraged by Energizer’s results. The stock bumped up 3.4 percent in Tuesday’s trading on the New York Stock Exchange.

"Overall, we were pleased with the quarter," wrote Bill Chappell, an analyst with SunTrust Robinson Humphrey. For one thing, the decline in the battery business was expected, and even in the midst of a decline Energizer was able to hold or grow its market share in most territories.

The bright spot, Chappell wrote, was Energizer’s personal care segment, which saw sales grow five percent, not counting currency fluctuations. Skin, infant and feminine care products led the way.

"It is encouraging to see these businesses finally all post top-line growth," Chappell wrote.

DeSanto concurred, saying Energizer would be in a "much more difficult position" without its 2007 acquisition of Playtex Products, which included feminine products, baby items and sunscreen.

"To see the personal care side holding up as well as it did, that’s good to see."

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