U.K. Stocks Rebound, Paced by Prudential, Resolution; Barclays Advances

(Bloomberg) -- U.K. stocks climbed, rebounding from
last week's decline, led by Friends Provident Plc after Resolution
Plc said its in ``advanced'' talks to merge with the insurer.

Prudential Plc and Legal & General Group Plc paced the gains
after UBS AG recommended investors buy the shares. Barclays Plc
rose after the bank increased its offer for ABN Amro Holding NV.


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Asian Stocks Rise for First Day in Four; BHP, JFE Holdings Gain on Metals

(Bloomberg) -- Asian stocks rose for the first time
in four days, led by BHP Billiton and Zijin Mining Group Co.,
after copper, gold and oil prices gained.

JFE Holdings Inc., Japan's second-biggest steelmaker, and
Posco climbed after UBS AG said slowing global production is
``supportive'' of prices. China, the world's biggest consumer of
steel, today reported its economy grew in the second quarter at
the fastest pace in 12 years.


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European Bank Stocks Advance, Led By ABN Amro; Saipem, Technip Decline

(Bloomberg) -- European bank stocks rose, led by ABN
Amro Holding NV after Royal Bank of Scotland Group Plc sweetened
its 71.1 billion-euro ($98.1 billion) offer for the Dutch lender.

ABN Amro jumped the most in three months. Oil-services
companies paced declines in energy shares after UBS AG cut its
recommendations on Saipem SpA and Technip SA following their
``strong performance.'' BT Group Plc, the U.K.'s largest phone
company, and drugmaker GlaxoSmithKline Plc climbed after
brokerages lifted their recommendations on the shares.


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U.K. Stocks Gain, Led by Royal Bank of Scotland, Vodafone, Barclays

(Bloomberg) -- U.K. stocks advanced, led by
Vodafone Group Plc after UBS AG increased its price estimate for
shares of the world's largest mobile-phone company.

Royal Bank of Scotland Group Plc rose after a Dutch court
cleared ABN Amro Holding NV's sale of its LaSalle Bank. The
ruling is a setback for a Royal Bank of Scotland-led bid for the
Amsterdam-based bank in the world's biggest banking takeover.


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Baht to Gain From Decade-High as Rate Cuts Spur Stock Demand, UBS Says

(Bloomberg) -- The Thai baht will extend its gains
from the highest in almost a decade as interest-rate cuts prompt
overseas investors to buy the nation's stocks, UBS AG said.

The currency, which traded at 33.20 per dollar at 10:57 a.m.
in Bangkok, will climb to 33 within a month, said Nizam Idris, a
Singapore-based strategist at UBS, the world's second-biggest
currency trading firm. The baht has gained 3.8 percent over the
past month, the best performance among 42 currencies in the
Asia-Pacific region.


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Israeli Bonds Rise for Fifth Day on Confidence That Shekel Will Strengthen

(Bloomberg) -- Israel's benchmark Shahar bond rose
for a fifth day as investors expressed confidence that the shekel
will strengthen against the dollar.

The Israeli currency reached a nine-year high against the
dollar in mid-May and has since slid 8 percent. It will probably
maintain its strength now or rise as the dollar weakens further
in international markets, UBS AG said.


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Australian Stocks Drop for Second Day, Led by Caltex, Brambles Industries

(Bloomberg) -- Australian stocks fell for a second
day, led by Caltex Australia Ltd. after the company's first-half
profit forecast missed some analysts' expectations.

Brambles Industries NV slid after UBS AG cut its rating after
the company yesterday posted disappointing European sales.


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European Stocks Rise, Led by Axa, Financial Shares; BHP, ThyssenKrupp Gain

(Bloomberg) -- European stocks rose for the first
time in six days as renewed takeover speculation lifted mining
and steel companies.

BHP Billiton Ltd. led mining companies higher after UBS AG
said mergers and acquisitions in the industry ``will continue to
accelerate.'' ThyssenKrupp AG fueled a rally by steelmakers after
Interfax reported the world's biggest stainless steelmaker is
interested in acquisitions to expand. Axa SA, Rodamco Europe NV
and Deutsche Bank AG led gains by financial-related companies,
among the hardest hit in last week's sell-off.


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U.S. Stock Futures Fall Before Services Report; Bed Bath & Beyond Declines

(Bloomberg) -- U.S. stock-index futures fell after
Bed Bath & Beyond Inc. said first-quarter profit missed its
forecast and as investors awaited a service-industry report that
may reduce the chances of an interest-rate cut this year.

Bed Bath & Beyond tumbled after the largest U.S. home-
furnishings retailer said profit fell short of its April
prediction as home sales slumped. Juniper Networks Inc. dropped
after UBS AG downgraded the world's second-biggest maker of
equipment for directing Internet traffic.


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UBS Hedge Fund Loss Ensnares Wuffli With Mess Reprising Long-Term Capital

(Bloomberg) -- UBS AG Chief Executive Officer Peter
Wuffli spared no expense when he agreed two years ago to let
John Costas, the top-ranking American at Switzerland's largest
bank, start an internal hedge fund.

Wuffli gave Costas $3.5 billion, 80 top traders and 40
support staff for the Dillon Read Capital Management LLC
venture. Costas hired another 130 people and leased space in
London, Singapore, Tokyo, Connecticut and Manhattan, where his
corner office on the 22nd floor has a view of St. Patrick's
Cathedral. By the time he was done, Dillon Read's 250 employees
received bonuses averaging $1 million a year, or almost three
times the comparable payout at Goldman Sachs Group Inc.


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