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MARKETWATCH FRONT PAGE

BP PLC Chief Executive Tony Hayward appears to be on his way out of the troubled oil company even as efforts resume to permanently kill the blown-out well that has been pouring crude into the Gulf of Mexico since late April.
See full story.

European markets may welcome stress test results

Test results likely to inspire opening gains on Monday, even if the credibility and rigor of the tests continue to generate controversy.
See full story.

Second quarter gets no respect

The second quarter is getting no respect. Only a few weeks ago, the quarter was strutting along the beach. Now even economists are kicking sand in its face.
See full story.

Private sector must drive economy now: Geithner

Treasury secretary says investment expanding, job growth returning.
See full story.

U.S. stocks upbeat on earnings, cautious on data

The stock market is in a better, yet still risky place as Wall Street readies for an even larger flood of corporate results in the days ahead.
See full story.

MARKETWATCH COMMENTARY

Motorola’s stock has been on a tear lately, but the good times may not last for the smart phone maker, writes Therese Poletti.
See full story.

MARKETWATCH PERSONAL FINANCE

More help is on the way for unemployed homeowners struggling to make their mortgage payments, thanks to funding tucked into the financial reform legislation signed by President Obama on Wednesday.
See full story.

NewsWatch: CEO Hayward may go as BP board meets: reports

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) – Weatherford International led oil service shares on the plus side on Tuesday, as the company issued bullish comments on its outlook.

After starting the session in the negative column, oil service shares moved up as the broad energy sector drew strength from higher crude oil prices as well as the comments from Weatherford
/quotes/comstock/13*!wft/quotes/nls/wft
(WFT
15.55,
+0.49,
+3.24%)
.

Oil rose 75 cents, or 1%, to $77.65 a barrel on contracts for September delivery, currently the most actively traded contract. Earlier in the morning, oil had traded down about 1%, reaching a low on the day of $76.05 a barrel.

The gains by oil and energy stocks came despite losses in the broad equity market. The Dow Jones Industrial Average
/quotes/comstock/10w!i:dji/delayed
(DJIA
10,090,
-63.72,
-0.63%)
fell 87 points, or about 0.9% at midday.

Blue-chip energy components Exxon Mobil
/quotes/comstock/13*!xom/quotes/nls/xom
(XOM
58.22,
-0.21,
-0.36%)
and Chevron
/quotes/comstock/13*!cvx/quotes/nls/cvx
(CVX
71.72,
-0.28,
-0.39%)
both gave ground, down by 0.5% to $58.13 and by 0.6% to $71.54, respectively.

The NYSE Arca Oil Index
/quotes/comstock/10t!xoi.x
(XOI
942.45,
-0.36,
-0.04%)
dipped 0.3% to 940.

The NYSE Arca Natural Gas Index
/quotes/comstock/10t!xng.x
(XNG
502.75,
+3.15,
+0.63%)
rose 0.3% to 501.

The Philadelphia Oil Service Index
/quotes/comstock/10y!i:osx
(OSX
178.29,
+2.61,
+1.49%)
rose 1.5% to $178.34.

Back in the spotlight over the Deepwater Horizon disaster, BP PLC
/quotes/comstock/13*!bp/quotes/nls/bp
(BP
35.01,
-0.74,
-2.07%)
shares fell 2.5% to $34.87.

The company may be considering a new plan to kill off its leaking well in the Gulf of Mexico, according to a Wall Street Journal report. BP may pump drilling mud into the well to clog it up, similar to a failed “top kill” operation attempted weeks ago. The newer method is being called a “static kill.”

With a containment cap now in place to stop the leak, BP may pursue the killing option as it works to complete relief wells. BP said the well pressure inside the casing rose to 6,825 pounds per square inch.

Weatherford jumped 3.4% to $15.57. The company reported a second-quarter loss of $26.6 million, or 4 cents a share, from income of $42 million, or 6 cents a share in the year-ago period. Excluding items, earnings in the latest quarter totaled 11 cents a share. Revenue climbed to $2.4 billion from $2 billion. The company beat the Wall Street earnings target of 7 cents a share. It also said its outlook for North America “appears constructive” and that it customers are “planning to accelerate activity in international markets.”

Weatherford also said it hasn’t laid anyone off despite a deepwater drilling moratorium in the Gulf of Mexico.

Separately, El Paso Pipeline Partners L.P.
/quotes/comstock/13*!epb/quotes/nls/epb
(EPB
30.66,
+0.62,
+2.06%)
said it will pay a quarterly cash distribution of 40 cents a unit for the second quarter. El Paso Pipeline Partners added 1.4% to $30.46.

The payout will thus increase 5% from the first-quarter payment of 38 cents a unit, and 21% above 33 cents in the year-ago second quarter. The distribution will be paid Aug. 13 to holders of record as of the close of business on July 30.

On the earnings front, Peabody Energy Corp.
/quotes/comstock/13*!btu/quotes/nls/btu
(BTU
42.37,
+0.06,
+0.14%)
reported a higher second-quarter profit on 24% higher revenue.

Net income reached $206.2 million, or 76 cents a share, from $79.2 million, or 29 cents, in the year-earlier period. Revenue was $1.66 billion against $1.34 billion.

Earnings from continuing operations more than doubled for the St. Louis coal producer, reaching 76 cents a share from 32 cents. Adjusted earnings from operations also rose, climbing to 69 cents a share from 50 cents.

A survey of analysts by FactSet Research yielded consensus estimates of 64 cents a share for profit and $1.69 billion for revenue.

In addition, Peabody now expects to earn an adjusted 75 cents to $1 a share in the third quarter and $2.60 to $3.15 a share for the year. The FactSet-compiled consensus estimates show analysts looking for 94 cents and $3.09 a share, respectively.

Shares of Peabody Energy fell 0.2% to $42.21.

Steve Gelsi is a reporter for MarketWatch in New York.

Energy Stocks: BP mulls well kill, Weatherford up on results

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) — Halliburton Co.’s second-quarter net income climbed 83% on an uptick in its North American land-drilling business and overseas growth, but the company also signaled Monday that the drilling moratorium in the Gulf of Mexico would have an impact on profits for the year.

Shares of Halliburton added more than 4% in pre-open trading.

The Houston-based oil-services giant
/quotes/comstock/13*!hal/quotes/nls/hal
(HAL
27.51,
-0.59,
-2.10%)
earned $480 million, or 53 cents a share, up from $262 million, or 29 cents, in the year-ago second quarter. Earnings from continuing operations totaled 52 cents a share.

Quarterly revenue reached $4.39 billion from the prior year’s $3.49 billion.

Analysts had expected Halliburton to earn 36 cents a share on revenue of $4.08 billion, according to the consensus in a survey of estimates by FactSet Research.

Looking ahead, Halliburton said the Gulf of Mexico oil leak will “usher in a new regulatory climate.”

The government’s deepwater-drilling ban, a safety measure ordered in the aftermath of the Deepwater Horizon disaster, will have the effect of subtracting 5 cents a share to 8 cents a share from earnings for each of the next two quarters, the company said.

For the coming quarter, analysts have expected Halliburton to earn 38 cents a share.

“The events in the Gulf of Mexico have not stifled our enthusiasm for increased deepwater activity in the coming years,” the company said.

Toward this end, Halliburton said it’s using a new test facility at its Duncan, Okla., manufacturing center to see how its proprietary field equipment holds up “under the most strenuous simulated conditions.”

Comparing its performance to the previous quarter, Halliburton reported a 24% increase in North American revenue, as it benefited from a rise in U.S. land-rig usage as well as better pricing.

Looking ahead, Halliburton said it sees more moderate growth in U.S. land-rig growth more likely.

“Activity in the dry gas basins may slow due to weak natural gas fundamentals, which should be partially offset by the continued growth of oil- and liquids- rich reservoirs,” Halliburton said.

Meanwhile, quarterly international revenue increased 11% on a sequential basis. The rate of overseas growth may be more weighted toward the end of the year as customers assess spending plans in light of current economic conditions, the company said.

Steve Gelsi is a reporter for MarketWatch in New York.

Halliburton profit up 83%, sees Gulf impact

By Polya Lesova, MarketWatch

FRANKFURT (MarketWatch) — Relief over GlaxoSmithKline’s legal bills as well as upbeat J.P. Morgan Chase results helped turn London stocks higher on Thursday.

The U.K. FTSE 100 index
/quotes/comstock/23i!i:ukx
(UK:UKX
5,252,
-1.64,
-0.03%)
reversed early losses to trade 0.1%, or 3.9 points, higher to 5,257.22.

The index had started off in the red after China said Thursday that its second-quarter gross domestic product grew 10.3% over the same period a year earlier, slowing from the 11.9% annual growth recorded in the first quarter.
Read more on China.

The news from China, which is one of the world’s leading consumer of many commodities, weighed on the mining sector and other Chinese exposed firms.

Shares of Kazakhmys PLC
/quotes/comstock/23s!e:kaz
(UK:KAZ
1,058,
-13.00,
-1.21%)
fell 1.1%, and InterContinental Hotels
/quotes/comstock/23s!e:ihg
(UK:IHG
1,139,
-21.00,
-1.81%)
, which generated 19% of its first-quarter revenue from the Asia-Pacific region, slipped 2.1%.

Still, the J.P. Morgan earnings news helped lift banking giant HSBC Holdings
/quotes/comstock/23s!a:hsba
(UK:HSBA
641.20,
+1.50,
+0.23%)
, which rose 0.4%, though Barclays
/quotes/comstock/23s!a:barc
(UK:BARC
307.00,
-6.55,
-2.09%)
was stuck in negative territory with a 1.9% retreat.
See J.P. Morgan story.

GlaxoSmithKline
/quotes/comstock/23s!a:gsk
(UK:GSK
1,206,
+24.00,
+2.03%)

/quotes/comstock/13*!gsk/quotes/nls/gsk
(GSK
36.35,
+0.63,
+1.76%)
shares gained 2% as the drug giant revealed it was setting aside $2.4 billion to cover various legal bills, including settlements over Avandia, the diabetes drug that a U.S. panel recommended stay on the market late Wednesday.

“It is especially encouraging in light of the more pessimistic expectations ($6 billion) for Avandia legal damages,” said analyst at U.K. broker Killik & Co.
See full story.

Shares of energy giant BP PLC
/quotes/comstock/13*!bp/quotes/nls/bp
(BP
36.18,
-0.70,
-1.90%)

/quotes/comstock/23s!a:bp.
(UK:BP.
398.90,
-2.10,
-0.52%)
edged down 0.7%.

Traders digested news that the U.S. House committee on natural resources has agreed measures that would prevent BP from new offshore drilling for seven years.

Also, the firm received government approval to pressure-test the latest containment system on its blown Gulf of Mexico oil well.

Shares of Experian PLC
/quotes/comstock/23s!e:expn
(UK:EXPN
649.00,
+15.50,
+2.45%)
, the credit checking firm, gained 2.5% after the firm said that revenue for the three months to June 30 rose 9%.

Outside the FTSE 100, shares of Dimension Data Holdings PLC
/quotes/comstock/23s!a:ddt
(UK:DDT
121.70,
+20.10,
+19.78%)
rallied 20% to 122 pence. Nippon Telegraph and Telephone Corporation made an all-cash offer to buy Dimension Data for about £2.1 billion, or 120 pence a share.

Shares in Gartmore
/quotes/comstock/23s!e:grt
(UK:GRT
104.00,
-6.10,
-5.54%)
dropped 5.5% after the U.K. fund manager said late Wednesday that its former star manager Guillaume Rambourg has resigned in order to focus on concluding an investigation into his conduct by the Financial Services Authority.
See full story.

Polya Lesova is a reporter for MarketWatch, based in Frankfurt.

London Markets: Glaxo, HSBC nudge London stocks higher

By Steve Goldstein, MarketWatch

LONDON (MarketWatch) — Speculation that BP will be sold in parts or a whole gave a further lift to the embattled oil giant’s shares Monday as the company said that the cost of cleaning up the Gulf of Mexico oil spill reached $3.5 billion.

BP
/quotes/comstock/23s!a:bp.
(UK:BP.
385.15,
+20.35,
+5.58%)

/quotes/comstock/13*!bp/quotes/nls/bp
(BP
34.05,
+0.31,
+0.92%)
shares rose 4% to 379 pence, marking a 25% gain from the closing low on June 29. Even so, the oil giant’s stock price is still down 42% since the Deepwater Horizon rig exploded on April 20, triggering the worst oil spill in U.S. history.

Speculation in the market again focused on what BP may sell.

The Sunday Times (of London) newspaper said Exxon Mobil
/quotes/comstock/13*!xom/quotes/nls/xom
(XOM
58.78,
-0.03,
-0.05%)
and another firm, that it believed to be Chevron
/quotes/comstock/13*!cvx/quotes/nls/cvx
(CVX
71.84,
+1.43,
+2.03%)
, had sought U.S. regulatory clearance to make a bid worth as much as £100 billion, or roughly $150 billion.

The newspaper said there was no certainty Exxon would make a move even if it did receive U.S. government backing, but the talks signaled interest from the Houston oil giant.

The newspaper also reported BP is in talks to sell its stake in the Prudhoe Bay project in Alaska as well as other American assets for 8 billion pounds, to Apache
/quotes/comstock/13*!apa/quotes/nls/apa
(APA
87.88,
+0.48,
+0.55%)
. The newspaper didn’t discuss how such a deal could affect the publicly traded BP Prudhoe Bay Royalty Trust
/quotes/comstock/13*!bpt/quotes/nls/bpt
(BPT
96.19,
+1.94,
+2.06%)
, which distributes royalties on a portion of the oil produced from the field.

Meanwhile, the U.K. government has hinted it may allow a bid for BP.

“As I understand, there is no immediate takeover planned. In the event that there was [an attempt] the areas where the government [can step in] are very narrow unless it is a matter of national security,” said Business Secretary Vince Cable to the U.K. daily, CityAM. “BP is a strong company with a strong cash flow. If there was a takeover attempt, we would look at it but our powers are restricted.”

The asset sale speculation comes as BP said the cost of the response to the oil escape has reached $3.5 billion. That tab includes the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs.

Analysts have said the final BP tab could be as much as $70 billion.

BP on Monday also detailed progress on replacing a containment cap, which it says is proceeding as planned.

More importantly than the short-term collection effort is work on two relief wells, which have the potential to stop the spill altogether.

“Although uncertainty still exists, the first half of August remains the current estimate of the most likely date by which the first relief well will be completed and kill operations performed,” the company said.

Steve Goldstein is MarketWatch’s London bureau chief.

Bid, asset talk spurs further gains for BP

By Sarah Turner, MarketWatch

LONDON (MarketWatch) — European shares posted mild losses on Monday as a bit of caution entered the market following last week’s gains, although deal speculation helped aerospace and defense group Zodiac and oil giant BP to gain ground.

The Stoxx Europe 600 index
/quotes/comstock/22c!sxxp
(ST:SXXP
250.05,
-0.04,
-0.02%)
traded down 0.3% at 249.37.

Last week, the index gained 5.4%, the best weekly performance in more than a yer, as economic data, central bank comments and some details on European bank stress tests buoyed sentiment toward stocks.

Banks and miners were behind much of last week’s gains but both sectors retreated on Monday, with Anglo American
/quotes/comstock/23s!e:aal
(UK:AAL
2,405,
-17.00,
-0.70%)
shares down 1.2% and Deutsche Bank
/quotes/comstock/11e!fdbk
(DE:DBK
48.99,
-0.39,
-0.79%)
shares down 1.2%.

Of the main regional benchmarks, the French CAC-40 index
/quotes/comstock/30t!i:px1
(FR:PX1
3,559,
+4.81,
+0.14%)
declined 0.2% to 3,547.30, the U.K. FTSE 100 index
/quotes/comstock/23i!i:ukx
(UK:UKX
5,150,
+16.75,
+0.33%)
traded flat at 5,133.17 and the German DAX index
/quotes/comstock/30p!dax
(DX:DAX
6,082,
+17.24,
+0.28%)
climbed 0.1% to 6,072.48.

Asian shares were mixed, while U.S. stock futures were pointing to a mild retreat on Monday with Dow Jones Industrial Average futures down 42 points.

Of companies in the spotlight, shares of BP
/quotes/comstock/23s!a:bp.
(UK:BP.
385.15,
+20.35,
+5.58%)

/quotes/comstock/13*!bp/quotes/nls/bp
(BP
34.05,
+0.31,
+0.92%)
jumped 5%.

The oil giant said that the installation of a new sealing cap that is intended to capture more of the leaking oil from its well in the Gulf of Mexico is proceeding as planned.

Also, the Sunday Times newspaper reported, without citing sources, that the oil major is in talks to sell up to $12 billion of assets to U.S. Apache Corp.
/quotes/comstock/13*!apa/quotes/nls/apa
(APA
87.88,
+0.48,
+0.55%)
, including a big stake in Alaska’s Prudhoe Bay. The same newspaper reported that Exxon Mobil
/quotes/comstock/13*!xom/quotes/nls/xom
(XOM
58.78,
-0.03,
-0.05%)
was mulling a takeover bid for the company.

Zodiac Aerospace
/quotes/comstock/24s!e:zc
(FR:ZC
41.26,
+1.48,
+3.71%)
shares climbed 2.9% to 40.95 euros.

The firm said over the weekend that it had received, and rejected, an approach from rival Safran
/quotes/comstock/24s!e:saf
(FR:SAF
21.95,
-0.39,
-1.72%)
, which fell 1.4%.

Safran said that it “acknowledges the reaction of Zodiac’s board while remaining convinced of the obvious logic from an industrial and a strategic perspective.”

Away from potential deals and German airport operator Fraport
/quotes/comstock/11e!ffra
(DE:FRA
37.35,
+0.66,
+1.79%)
rose 1.3% after it said that the total number of passengers at its five majority-owned airports in June rose 11.8% to 9.2 million, with cargo throughput up 27.5% from a year earlier.

“These numbers convincingly show that the finance and economic crisis has been overcome and that the aviation industry — despite several small traffic blips — is back on track to reaching and even exceeding the results of the pre-crisis years,” said CEO Stefan Schulte.

Sarah Turner is a markets reporter for MarketWatch in London.

Europe Markets: Europe stocks edge back; BP, Zodiac climb