China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Futures rise on HP results, but Lehman slips (Reuters)
2008.08.20By Ellis Mnyandu 15 minutes ago
NEW YORK (Reuters) - Stock index futures rose on Wednesday as news of a solid quarterly profit and outlook from Hewlett-Packard (HPQ.N) , the world's largest computer maker, helped investors battle fears about the credit crisis.
The HP news suggested that technology spending will hold up, particularly as demand from abroad offsets weakness in the United States.
Shares of HP, a Dow component, jumped 3 percent before the bell. A rebound in global commodity prices also positioned shares of energy, mining and other natural resource-based companies to advance in Wednesday's trading.
Another boost was an overnight recovery in Chinese stocks.
"People are upbeat about the Chinese market turning around and of course HP's numbers gave a good face to what's been a tough sell-off for a couple of days," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
"It's always nice to see a bellwether company report solid earnings. It reflects a view that even in times like these there are companies that are doing well."
S&P 500 futures rose 5.10 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.
Dow Jones industrial average futures climbed 46 points and Nasdaq 100 futures gained 7 points.
HP shares rose to $45 before the bell a day after it reported net profit rose 14 percent and forecast fourth-quarter earnings ahead of expectations.
But even with the early positive tone, there was still likely to be caution about the impact of the mortgage crisis on the financial services sector.
Lehman Brothers (LEH.N) Chief Executive Dick Fuld nearly struck a deal to raise almost $5 billion from South Korean wealth funds and institutions, but the pact disintegrated, the New York Post said in a report citing sources familiar with the matter. Shares of Lehman fell 2.1 percent to $12.80.
Goldman Sachs cut outlook estimates on several U.S. banks, including Citigroup (C.N) and JPMorgan Chase & Co (JPM.N), and said Lehman Brothers may take $2.5 billion to $3.5 billion of write-downs in the third quarter.
In other news, Goldman Sachs (GS.N) reiterated its year-end price forecast of $149 a barrel for U.S. crude, and said strong fundamentals were a more important factor than a strengthening U.S. dollar.
U.S. front-month crude was up 66 cents at $115.19 a barrel.
China's main stock index soared more than 7 percent on Wednesday due to hopes that the government would introduce a stimulus package to boost the slowing economy and aid the stock and property markets.
U.S. stocks fell for a second straight session on Tuesday as credit worries hit bank shares and a report showed inflation remains a threat despite slower growth.
(Editing by Kenneth Barry)
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