European shares jump on U.S. budget deal

* FTSEurofirst 300 up 1.3 pct, highest since May 2011

* Miners top gainers, copper up strongly

* Euro STOXX 50 volatility index drops 14 pct

By Tricia Wright

LONDON, Jan 2 (Reuters) - European shares rallied across the board at the start of the new year after U.S. lawmakers approved a deal to prevent a fiscal crunch that had threatened growth in the world's largest economy.

The Republican-controlled House of Representatives late on Tuesday finally approved a bill that will raise taxes on top U.S. earners, fulfilling President Barack Obama's re-election promise and avoiding $600 billion in broader-based tax hikes and spending cuts.

Asian shares rose strongly overnight on the news, while copper prices climbed 2.2 percent, with robust manufacturing data from top metals consumer China also aiding the mood.

The FTSEurofirst 300 rose 1.3 percent at 1,148.97 by 0914 GMT, hitting levels last seen in May 2011.

Uncertainty as to whether U.S. politicians would manage to hammer out a deal to avoid the fiscal cliff had cast a shadow over market sentiment in the last weeks of 2012.

"The U.S. news allows some apprehension to be reduced and although we have been confident of a deal being announced last minute we can now see more aggressive buying in today's session," Atif Latif, director of trading at Guardian Stockbrokers, said.

The Euro STOXX 50 Volatility Index, or VSTOXX, Europe's widely-used measure of stock market risk aversion, dropped 14 percent on Wednesday following the U.S. budget deal.

The VSTOXX - which is used to measure the cost of protecting stock holdings against corrections - tumbled to 18.45.

China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high and adding to evidence of a move back toward growth in the world's biggest metals consumer.

That helped basic resources stocks put in a solid showing on Wednesday, the top performing sector with a 3.1 percent advance.

The euro zone's blue-chip Euro STOXX 50 firmed 49.54 points, or 1.9 percent, to 2,685.47.

The Euro STOXX 50 climbed 13.8 percent in 2012, while the FTSEurofirst 300 rose 13.2 percent, boosted by bold measures from central banks to resolve Europe's debt crisis and revive global growth.

Among technical strategists there was optimism as to how 2013 would proceed.

"We've started the year on a positive note, and it does look like the market is pushing on towards 2,722," Barclays Capital's chief European technical strategist Phil Roberts said, referring to the Euro STOXX 50.

The 2,722 level in technical analysis is an equality target - the point at which the rally from the low in 2011 to the high in March 2012 is replicated off the low in June 2012.

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European shares jump on U.S. budget deal

* FTSEurofirst 300 up 1.3 pct, highest since May 2011

* Miners top gainers, copper up strongly

* Euro STOXX 50 volatility index drops 14 pct

By Tricia Wright

LONDON, Jan 2 (Reuters) - European shares rallied across the board at the start of the new year after U.S. lawmakers approved a deal to prevent a fiscal crunch that had threatened growth in the world's largest economy.

The Republican-controlled House of Representatives late on Tuesday finally approved a bill that will raise taxes on top U.S. earners, fulfilling President Barack Obama's re-election promise and avoiding $600 billion in broader-based tax hikes and spending cuts.

Asian shares rose strongly overnight on the news, while copper prices climbed 2.2 percent, with robust manufacturing data from top metals consumer China also aiding the mood.

The FTSEurofirst 300 rose 1.3 percent at 1,148.97 by 0914 GMT, hitting levels last seen in May 2011.

Uncertainty as to whether U.S. politicians would manage to hammer out a deal to avoid the fiscal cliff had cast a shadow over market sentiment in the last weeks of 2012.

"The U.S. news allows some apprehension to be reduced and although we have been confident of a deal being announced last minute we can now see more aggressive buying in today's session," Atif Latif, director of trading at Guardian Stockbrokers, said.

The Euro STOXX 50 Volatility Index, or VSTOXX, Europe's widely-used measure of stock market risk aversion, dropped 14 percent on Wednesday following the U.S. budget deal.

The VSTOXX - which is used to measure the cost of protecting stock holdings against corrections - tumbled to 18.45.

China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high and adding to evidence of a move back toward growth in the world's biggest metals consumer.

That helped basic resources stocks put in a solid showing on Wednesday, the top performing sector with a 3.1 percent advance.

The euro zone's blue-chip Euro STOXX 50 firmed 49.54 points, or 1.9 percent, to 2,685.47.

The Euro STOXX 50 climbed 13.8 percent in 2012, while the FTSEurofirst 300 rose 13.2 percent, boosted by bold measures from central banks to resolve Europe's debt crisis and revive global growth.

Among technical strategists there was optimism as to how 2013 would proceed.

"We've started the year on a positive note, and it does look like the market is pushing on towards 2,722," Barclays Capital's chief European technical strategist Phil Roberts said, referring to the Euro STOXX 50.

The 2,722 level in technical analysis is an equality target - the point at which the rally from the low in 2011 to the high in March 2012 is replicated off the low in June 2012.

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This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

European shares jump on U.S. budget deal

* FTSEurofirst 300 up 1.3 pct, highest since May 2011

* Miners top gainers, copper up strongly

* Euro STOXX 50 volatility index drops 14 pct

By Tricia Wright

LONDON, Jan 2 (Reuters) - European shares rallied across the board at the start of the new year after U.S. lawmakers approved a deal to prevent a fiscal crunch that had threatened growth in the world's largest economy.

The Republican-controlled House of Representatives late on Tuesday finally approved a bill that will raise taxes on top U.S. earners, fulfilling President Barack Obama's re-election promise and avoiding $600 billion in broader-based tax hikes and spending cuts.

Asian shares rose strongly overnight on the news, while copper prices climbed 2.2 percent, with robust manufacturing data from top metals consumer China also aiding the mood.

The FTSEurofirst 300 rose 1.3 percent at 1,148.97 by 0914 GMT, hitting levels last seen in May 2011.

Uncertainty as to whether U.S. politicians would manage to hammer out a deal to avoid the fiscal cliff had cast a shadow over market sentiment in the last weeks of 2012.

"The U.S. news allows some apprehension to be reduced and although we have been confident of a deal being announced last minute we can now see more aggressive buying in today's session," Atif Latif, director of trading at Guardian Stockbrokers, said.

The Euro STOXX 50 Volatility Index, or VSTOXX, Europe's widely-used measure of stock market risk aversion, dropped 14 percent on Wednesday following the U.S. budget deal.

The VSTOXX - which is used to measure the cost of protecting stock holdings against corrections - tumbled to 18.45.

China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high and adding to evidence of a move back toward growth in the world's biggest metals consumer.

That helped basic resources stocks put in a solid showing on Wednesday, the top performing sector with a 3.1 percent advance.

The euro zone's blue-chip Euro STOXX 50 firmed 49.54 points, or 1.9 percent, to 2,685.47.

The Euro STOXX 50 climbed 13.8 percent in 2012, while the FTSEurofirst 300 rose 13.2 percent, boosted by bold measures from central banks to resolve Europe's debt crisis and revive global growth.

Among technical strategists there was optimism as to how 2013 would proceed.

"We've started the year on a positive note, and it does look like the market is pushing on towards 2,722," Barclays Capital's chief European technical strategist Phil Roberts said, referring to the Euro STOXX 50.

The 2,722 level in technical analysis is an equality target - the point at which the rally from the low in 2011 to the high in March 2012 is replicated off the low in June 2012.

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Top Goldman Sachs execs get shares on New Year's Eve

Lloyd Blankfein, chairman and CEO of The Goldman Sachs Group, delivers remarks at an event sponsored by the Economic Club of Washington in Washington, July 18, 2012.

Credit: Reuters/Jason Reed

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Groupon shares sink below $20 IPO price

The Groupon smartphone app is displayed on a Motorola Droid Bionic cell phone in Denver November 4, 2011.

Credit: Reuters/Rick Wilking

NEW YORK | Wed Nov 23, 2011 1:53pm EST

NEW YORK (Reuters) - Shares of Groupon Inc fell for a third day on Wednesday, sinking below the company's initial public offering price of $20 less than three weeks after the daily deal company went public.

Groupon's shares fell 14.2 percent to $17.22 on Nasdaq, bringing its decline over the last three days to about 34 percent.

Groupon raised more than $700 million in an IPO in early November, making it the biggest IPO by a U.S. Internet company since Google Inc raised $1.7 billion in 2004.

Analysts have cited concerns about increased competition, a greater availability of the company's stock for short-selling, and a sharp reversal of market sentiment that is taking down more speculative companies.

"The momentum is negative now and it is likely to continue negative until they have something positive about the company," said Edward Woo, a Groupon analyst at Wedbush Morgan.

"There was a lot of negative sentiment heading into the IPO, the IPO surprised a lot of people, it was much stronger than expected," he said.

One reason for that strength was the fact that Groupon sold only about 6 percent of itself in the IPO, creating a scramble for the stock. It was one of the lowest floats of the past decade.

LivingSocial, Groupon's closest rival, which is part owned by Amazon.com Inc, announced plans on Monday to offer more than 20 deals with national merchants over the crucial Black Friday shopping period.

Daily deal companies often subsidize national deals, making them less profitable than offers run with local merchants. The national deals usually bring in lots of new customers, but put pressure on profit margins.

Analyst say Groupon shares were also lower because it became easier this week to short, or bet against, the company.

In the first week after the IPO, there was little stock available for short sellers, who have to borrow shares before they can sell them. If the stock drops, they can buy it back at a lower price, return the shares to the lender and pocket the difference as profit.

Woo has a price target of $22 and a "neutral" rating on Groupon's stock. He says that may come down if the stock is not able to bounce back soon.

"It is a little surprising at how quickly it's happening," said Woo. "But on the other hand the valuation was very high to begin with."

(Reporting by Edward Krudy; Editing by Chizu Nomiyama)

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UPDATE 1-Option players bet on rebound in shares of big banks

* Contrarian bullish option plays pop up across banks

* Call volume in certain banks is above pace into holiday

* Top trades in Financial ETF appear to be bearish plays

By Doris Frankel

Nov 23 (Reuters) - Option traders appear to be betting on a rebound in the shares of big banks whose fortunes have been driven down by growing pessimism over the euro zone's ability to resolve its debt problems.

Sizable activity in upside call options in the December contracts on JPMorgan & Chase Co , Citigroup Inc Barclays PLC , Goldman Sachs Group and Morgan Stanley suggest an imminent reversal in their battered shares.

"Today's call buying in these stocks seems to be a contrary play and reflect expectations for a rebound in the shares before the December expiration in 23 days," said Frederic Ruffy, options strategist at Web site WhatsTrading.com.

Bank stocks took a nose-dive on Wednesday on concerns about the European debt crisis and rigorous stress tests of six large U.S. bank announced by the Federal Reserve on Tuesday, analysts said.

"With such fragile sentiment already in place ahead of the long holiday weekend, investors sold indiscriminately in the financial sector, providing opportunities for contrarian option plays across certain banks," said Andrew Wilkinson, chief economic strategist at Miller Tabak and Co in New York.

While a number of individual stocks in the financial space attracted unusual upside call activity, the top trades in the Financial Select Sector SPDR fund appeared to be bearish plays, Ruffy said.

The XLF dropped 2.9 percent to $11.73 on Wednesday. Traders exchanged about 1.24 million options in the XLF, 2.9 times the average daily levels, as puts outpaced calls by a factor of 2.89:1, according to options analytics firm Trade Alert.

"The contrarian positioning in some big banks argues against today's conventional wisdom that European woes will drag down the financial sector," Wilkinson said.

The pattern was evident in several large banks when fresh positions were tracked in out-of-the-money December calls or those options with strike prices above the share value.

For example, one player bought 71,000 December $34 calls on JPMorgan for an average price of 13.5 cents per contract, Ruffy said. JPMorgan shares fell 3.50 percent to $28.38.

The volume in that strike exceeded the 11,015 in open positions, data from option analytics firm Trade Alert showed.

The massive premium purchase was similar to a trade in Citigroup, where Ruffy said 50,000 December $29 calls were bought for 23 cents apiece against 22,015 open contracts.

Citi shares were down 3.88 percent to $23.51.

Seemingly bullish call buying on British bank Barclays emerged in contrast to a 3.85 percent drop in the bank's U.S.-listed shares to $9.24.

More than 30,000 calls changed hands at the December $12 strike in Barclays against open interest of 3,863 contracts.

It appeared an investor bought most of the calls, outright, at a premium of 15 cents apiece and is poised to profit at expiration if shares surpass the break-even price of $12.15, said Interactive Brokers Group options analyst Caitlin Duffy.

Goldman shares ended 1.68 percent lower to $87.89 and the top options trade in the investment bank was 10,000 December $110 calls bought as an opening position for 30 cents against 5,340 in open interest, according to Ruffy.

Impressive call buying spilled over to Morgan Stanley where a buyer paid 22 cents for 22,407 December $16 calls to open a new position when shares were trading near $13.15, said Trade Alert president Henry Schwartz. The stock dipped 3.62 percent to $13.03.

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RPT-UPDATE 2-US bank shares fall on Europe, stress test concerns

* Bank of America shares edge closer to $5 mark

* Six big banks will be tested for Europe exposure

By Rick Rothacker and Joe Rauch

Nov 23 (Reuters) - Bank stocks took a nose-dive on Wednesday on concerns about the European debt crisis and rigorous stress tests unveiled by the Federal Reserve on Tuesday, analysts said.

Bank of America Corp shares fell 4.3 percent to $5.14, near a 52-week low of $5.13 touched in early October. It was the lowest closing price for the bank since March 2009.

Other banks whose shares declined were Citigroup , down 3.8 percent, and Morgan Stanley , down 3.6 percent.

Among regional banks, Regions Financial Corp shares slumped more than 5 percent. The KBW Bank Index closed down 3.4 percent, a steeper decline than the broader market.

The stress tests announced by the Fed are more rigorous than those a year ago, said Jefferson Harralson, an analyst with Keefe, Bruyette & Woods Inc.

"Investors are worried that we won't see a normal resumption of dividends and share buybacks at healthier banks, and for more stressed banks, this could force them to raise capital," Harralson said.

Despite some signs of improvement in the economy and in the health of banks, investors remain worried about factors outside the United States such as the European debt crisis, said Frank Barkocy, director of research at Mendon Capital Advisors.

"There are signs that fundamentals look better, but we have to get these external clouds of concern to dissipate," Barkocy said. "That may take some time."

The cost to insure U.S. bank debt with credit default swaps jumped on Wednesday after a weak German bond sale added to fears that contagion from Europe's debt crisis could spread globally.

Bank of America's CDS costs rose the most, jumping 34 basis points to 471 basis points, or $471,000 per year to insure $10 million in debt, according to data by Markit.

In the stress tests, Bank of America and five other large banks will be measured for their ability to withstand further deterioration in the European debt crisis.

Banks will also be examined for their exposure to investor requests to buy back soured mortgage loans, Harralson noted. "Obviously, Bank of America is the bank that stands out there," he said.

Bank of America Chief Executive Brian Moynihan has taken steps in recent months to settle claims related to mortgage-backed securities, although his most significant initiative, an $8.5 billion agreement with major institutional investors, still needs court approval.

In nearly two years as CEO, Moynihan has worked to shed assets, streamline operations and build capital to cover mortgage losses and meet new international standards. He has also suffered a number of setbacks, including the Fed's rejection of a dividend increase in March and a backlash this fall over a now-canceled debit card fee.

"I think Brian's trying to get things done and is making good progress," Barkocy said. "Sometimes he says things when he's not on firm ground, and it comes back to bite him in the behind, so to speak."

Mike Mayo, an analyst with CLSA, said the bank's management needs to improve confidence in the company after past miscues. The bank should consider shedding more assets to make it easier to manage, he said, without offering any specific examples.

"There should be no sacred cows in the analysis," Mayo said.

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UPDATE 1-Lupatech shares, bonds plunge on cash crunch

* Lupatech shares down 20 pct, bond prices tumble

* Raising cash to confront "concerns about solvency"

* Company cites support from shareholders BNDES, Petros

By Brad Haynes and Jeb Blount

SAO PAULO/RIO DE JANEIRO, Nov 23 (Reuters) - Shares of Lupatech , one of Brazil's biggest oil industry suppliers, plunged on Wednesday as the company tried to sell assets to meet looming debt payments.

"Although our financial situation in the third quarter has generated concerns about the solvency of the company, we are working hard to balance our capital structure and strengthen our cash position in the short term," Lupatech said in a security filing.

Lupatech shares lost a fifth of their value on Wednesday, their biggest drop in more than two years.

The company's cash crunch comes at a moment of heightened capital-market risk. Banks and investors are cutting lending in an effort to protect themselves from potential losses that could result from sovereign debt-defaults in Europe.

Lupatech is looking to sell auto-industry assets including parts maker Steelinject, which serves as collateral for $275 million of perpetual bonds issued in 2007. The company said it asked bondholders for permission to sell Steelinject, which accounts for less than 1 percent of Lupatech's total assets.

Lupatech 9.875 percent perpetual bonds fell 7.88 points to 36.72 percent of face value bid on Monday according to Thomson Reuters pricing. The yield, a proxy for the company's long-term borrowing costs, jumped to 26.88 percent. A year ago the yield was about 9.5 percent.

Lupatech's short-term debt, consisting of obligations due in the coming 12 months, grew to 313 million reais ($168 million) at the end of September, 74 percent more than three months earlier.

Of that short-term debt, 67 million reais matures by the end of the year. Lupatech had less than 31 million reais in cash and cash equivalents at the end of September.

Lupatech said in its third-quarter earnings statement that it was contracting a four-year financing line worth 60 million reais from major shareholder Petros, the pension fund for employees of state-controlled oil giant Petrobras .

"The company has the full support of its shareholders, among them (state development bank) BNDES and Petros, in all the moves it has made to improve its capital structure," Lupatech said in a statement later on Wednesday.

OFFSHORE INVESTMENTS

Lupatech is one of several oil industry companies that have made big investments to prepare for a spending spree in the industry focused on deep-water discoveries that could make Brazil the world's No.3 producer by 2020.

Petrobras alone, which produces more than 90 pct of Brazil's crude, plans to spend $225 billion on expansion over the next five years to find new oil, build new refineries and expand output - the world's biggest corporate investment plan.

But Petrobras has struggled to increase output in recent years. Revenue has also suffered from government policies fixing gasoline and diesel prices, forcing the company to cut costs in some areas and push back spending in others.

Delays in expansion programs have hurt suppliers such as Lupatech, which took on debt to ramp up investments in anticipation of an offshore oil boom.

Now the company is working to restructure debt as a sovereign debt crisis in Europe is roiling capital markets and banks are paring back credit to shore up balance sheets.

Lupatech closed 20 percent lower at 4.65 reais on Wednesday, while Brazil's benchmark Bovespa stock index declined 1.6 percent. So far this year, Lupatec shares have lost 76 percent.

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