November pay growth including bonuses in the private sector was 4.2%, compared with 3.3 % for the public sector. In addition, in the year to November 2007 consumer prices increased below the rate of earnings growth by 2.1%.

Of the FTSE 100 index stocks British Land Company led gainers with a rise of 4.37% followed by increases of 4.32% in British Airways, of 3.63% in Home Retail Group, of 3.53% in Reckitt Benckiser, and in Taylor Wimpey of 3.52%.

Retailers also rose on strong employment and earnings figures. Next Plc increased 0.15% and Kingfisher Plc soared 2.86%.

Antofagasta Plc led decliners in FTSE 100 index with a drop of 6.80% followed by losses in 6.63% in Rio Tinto, of 5.84% in Kazakhmys Plc, of 5.67% in London Stock Exchange, and of 5.59% in Xstrata.

Commodity stocks fell as crude oil and metal prices declined. Vedanta Resources slipped 5.28%, BHP Billiton slumped 5.26% and Anglo America shed 5.14%.

Bloomberg news reported today that the European Commission raided pharmaceutical companies including AstraZeneca and GlaxoSmithKline to investigate if patents and lawsuit settlements were improperly used to keep generic drugs off the market.

BP said today it will begin a study to build a colossal 500-megawatt hydrogen power plan in the Abu Dhabi, United Arab Emirates. Analyst estimate the plant will be worth $2 billion.


[R]1:00PM New York – Ambac fell 33% after it cuts its dividend and plans to raise $1 billion.[/R]

Ambac Financial Group (ABK: chart) reported its first quarterly loss, replaced its chief executive, and plans to raise $1 billion to stem the loss of capital.

Ambac said that its fourth quarter loss will be $143 million after-tax or $32.82 per share and operating profit will be $5.80 per share. Ambac estimated that the book value per share at the end of 2007 will be at $21.00.

The Company also announced the results of its fourth quarter fair value review of its outstanding credit derivative contracts. Ambac’s estimate of the fair value or “mark-to-market” adjustment for its credit derivative portfolio for the quarter ended December 31, 2007 amounted to an estimated loss of $5.4 billion, pre-tax, $3.5 billion, after tax.

Of the estimated $5.4 billion pre-tax mark-to-market loss, approximately $1.1 billion represents estimated credit impairment related to certain collateralized debt obligations of asset-backed securities transactions. These transactions are backed primarily by mezzanine level subprime residential mortgage-backed securities that have been internally downgraded to below investment grade.

The company also announced a plan to raise $1 billion to strengthen its capital base after rating agencies threatened to lower its rating on the company.

Ambac is expected to meet or exceed Fitch Ratings’ current triple-A capital requirements for the Company. The Company noted that its existing capital position currently meets or exceeds the triple-A capital requirements of both S&P and Moody’s. As part of its capital initiative, Ambac also said that it will reduce the quarterly dividend on its common stock from $0.21 per share to $0.07 per share.

Ambac insured bonds with approximate value of $560 billion may be in jeopardy if rating on Ambac is lowered.

Ambac also replaced its chief executive Robert J. Genader with Michael A. Callen effective immediately till a permanent replacement is found. Only three weeks ago Gemader has said that the company dividend is not going to be cut.



[R]10:00AM New York – U.S. stocks declined as JP Morgan and Wells Fargo reported sub-prime loan losses and Intel revenue growth disappointed investors.[/R]