Schlumberger earnings climb, but slowdown looms.

Schlumberger Ltd, the world's largest oilfield services company warned on Friday that the credit crisis and softening global economy would dampen energy spending into next year.

The weaker market conditions come on the heels of a quarter when crude oil prices surged to record levels, peaking at $147 per barrel in July.

That helped boosted Schlumberger's third-quarter profit by 13 percent, the company said on Friday, as energy producers spent heavily to capture the high prices. The results met Wall Street expectations.

Since then, both crude oil and natural gas prices have fallen by more than 50 percent, raising investors' fears that energy companies would slash spending on exploration and production projects that are the core business of the oilfield services sector.

Brisk natural gas drilling activity across North America during the quarter helped offset the damage from hurricanes that ripped through the oil and gas operations in the Gulf of Mexico, but gas producers were already beginning to pare back operations.

"The recent rapid deterioration in credit markets will undoubtedly have an effect on our activity though we anticipate this will largely be limited to North America and in some emerging exploration markets overseas," Schlumberger Chief Executive Andrew Gould said in a statement.

A global economic slowdown is an increasing concern. Although it is difficult to forecast how that would affect spending in the energy sector, Gould said, "we anticipate a slowing in the rate of increase in customer spending."

Schlumberger and peers such as Halliburton Co and Baker Hughes Inc had seen steady profit growth in recent years as their energy producing customers spent heavily to pull oil and gas out of the ground and take advantage of a long-term rise in prices.

PROFIT ON TARGET

At Schlumberger, third-quarter net profit rose to $1.53 billion, or $1.25 per share, from $1.35 billion, or $1.09 per share, a year earlier. The results met the analysts' average forecast, according to Reuters Estimates.

Revenue increased 22 percent to $7.26 billion. Analysts were expecting $7 billion.
Operating profit at the oilfield services arm rose 13 percent to $1.7 billion, while the WesternGeco seismic unit, which measures underground oil and gas reservoirs, saw earnings climb 16 percent to $355 million.

Schlumberger said earlier this month that it had yet to see any pullback in exploration and production spending from customers, but it was watching intently for any signs of budget cuts.
With its relatively lower exposure to the struggling North American natural gas market, Schlumberger looks well placed, analysts at Pritchard Capital Partners said. But the company's stock valuation of about 10 times estimated 2009 earnings close is already nearly twice that of rivals.

Pritchard said in a note on Thursday that Halliburton and Baker Hughes offered qualities similar to Schlumberger, but with more attractive 2009 multiples of 5.1 and 5.4, respectively.
Shares of Schlumberger have lost 46 percent in 2008, compared with a 54 percent drop for Halliburton, a 55 percent slide for Baker Hughes and a 52 percent drop in the Philadelphia Stock Exchange oil services index.

Economic crisis of 2008

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Halliburton, WellDynamics take on StatoilHydro work

Halliburton Co. and its joint venture company, WellDynamics Inc., have secured about $900 million in contracts from Norwegian oil company StatoilHydro for work in the North Sea.

Houston-based Halliburton (NYSE: HAL) and Spring-based WellDynamics will provide completion equipment and services, tubing conveyed perforating services and SmartWell completion technology for oil and gas fields on the Norwegian continental shelf.

Work is expected to start in September and last up to nine years if all option periods are exercised.

WellDynamics is a joint venture company of Halliburton International Inc. and Shell Technology Ventures Fund 1 BV (managed by Kenda Capital BV).

Stocks advance as deal talk increases

NEW YORK - Wall Street advanced Monday following reports of potential corporate deals — including news that Washington Mutual Inc. might get a $5 billion investment from private equity firms.

Washington Mutual, the nation's largest thrift, is in talks with buyout shop TPG Inc. and other investors about selling a stake in itself in return for cash, according to The Wall Street Journal. The company, which has suffered big losses tied to subprime mortgages, would become the latest U.S. financial institution to reach such a deal.

Ahead of the first-quarter earnings season — which begins with aluminum company Alcoa Inc.'s results after the market closes Monday — the report was an auspicious sign. Investors are growing more optimistic that stocks and the companies that issue them may be starting to recover from a long slump due to tight credit and a sluggish economy.

"Overall, I'm getting the sense here that the Street is starting to focus on fundamentals and the timing of a potential recovery in the economy, and trying to move past the credit crisis," said Craig Peckham, market strategist at Jefferies & Co.

That's not to say the market volatility seen over the past several months is over. Peckham said Monday's calm, upbeat trading is a "rather predictable lull" ahead of earnings season, and that investors could grow anxious again if banks reveal bigger losses than expected and in more types of debt than anticipated.

In late morning trading, the Dow Jones industrial average rose 62.45, or 0.50 percent, to 12,671.87.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 8.74, or 0.64 percent, to 1,379.14, and the Nasdaq composite index rose 9.31, or 0.39 percent, to 2,380.29.

Washington Mutual shot up $2.31, or 22 percent, to $12.48.

In other dealmaking news Monday, Microsoft Corp. gave Yahoo Inc. a three-week deadline to agree to a takeover, or Microsoft plans to launch a proxy fight for control of the company.

Yahoo fell 62 cents, or 2.2 percent, to $27.74, while Microsoft rose 9 cents to $29.25. Yahoo said Monday the deal isn't in the best interests of its shareholders, and called Microsoft's proxy threat counterproductive.

Meanwhile, Swiss pharmaceutical maker Novartis AG said it will spend about $38 billion in a two-step bid for a majority stake in U.S. eye-care company Alcon Inc. Alcon rose $4.61, or 3.1 percent, to $153.06, and Novartis fell $1.67, or 3.2 percent, to $50.45.

Last week, stocks advanced as investors found relief in reports that Lehman Brothers Holdings Inc. and Switzerland's UBS AG are selling stock to raise cash and Merrill Lynch & Co. believes it has sufficient cash to continue operating. Despite a report Friday showing the third straight month of job losses in March, the Dow finished last week up 3.22 percent, the S&P 500 index rose 4.86 percent, and the Nasdaq rose 4.20 percent.

On Monday, government bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.53 percent from 3.47 percent late Wednesday.

Light, sweet crude rose $2.50 to $108.73 a barrel on the New York Mercantile Exchange. Gold prices increased, and the dollar gained against most other major currencies.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 396.5 million shares.

The Russell 2000 index of smaller companies rose 4.07, or 0.57 percent, to 717.80.

Overseas, Japan's Nikkei stock average rose 1.18 percent. In afternoon trading, Britain's FTSE 100 added 0.92 percent, Germany's DAX index rose 0.84 percent, and France's CAC-40 rose 0.80 percent.

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NBER's Feldstein says U.S. sliding into recession

NEW YORK (Reuters) - Martin Feldstein, who leads the group that is considered the arbiter of U.S. recessions, said on Monday that he personally believes the economy has been sliding into a recession since December or January.

"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television.
Feldstein said he believes that the recession will linger. "I think it could go on longer" than the "last two recessions (which) lasted eight months peak to trough," he said, adding the current recession could last about twice as long.
He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year.
The NBER, a non-profit research organization, typically declares start and end dates for U.S. recessions. The group has not officially declared the U.S. is in a recession.



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The result of Sub Prime melt down.

Unbelievable! Bear stearns!

How big is the Sub Prime melt down can be? Look Bear Stearns is a well known ompany in US that unable to withstand the melt down may subjected to buyover by other that are rich enough to pay off their bad debt. If the Sub Prime Melt down cannot be control the economy may fall into recession, it will like Japan's property bubbles maybe the next will be a severe deflation in housing value that may lead the economy fall into a halt.

The present world level inflation may cause by US heavy debt that cause by servere credit creation, too much of credit create will cause economy overheat and may lead to bubble.

What can Fed do? the best for Fed is to create more credits to pump into the market, I mean in present situtation. Unless the Govt. want to stop using Dollar policy and coming out a new curency policy that able to help the economy also able to get once and for all problem solved.

Too much Dollar flowing in the world, too many countries using Dollar as a reserve currency for their saving. there is too many US trading partner that trade with US therefore many Dollar is used. let's hope things can turn around fast.