There has been a rise in cost of shielding corporate bonds from default with the surge in the rate of unemployment coupled by the increase in oil prices, which has now gone beyond $139 per barrel, fueling concerns that the ailing US economy will worsen still.

On benchmark indexes, credit-default swaps increased, which was its fourth for the week, as it hikes the cost of debt protection costs to nearly two-month high. Contracts that are linked to American International Group Inc. have risen on hunch that that US regulators are scrutinizing company credit swaps accounting connected with subprime mortgages. The cost of shielding bank debt also increased, which was led by some of the most prestigious financial institutions such as Lehman Brothers Holdings Inc. and Wachovia Corp.

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There is a growing concern regarding the discouraging payrolls reports, for five months in a row now, might trigger a series of corporate defaults, aggravated further by surging materials and fuel costs plus strained bank balance sheets.

“This is a sign of real softness in the labor market. There are forces at work - oil prices, housing prices, difficulty getting a job when you have been laid off and the credit crunch - that are going to make things worse,” according to chief US economist Roger Kubarych, Unicredit Global Research.

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Investors that deal in options and derivatives markets are speculating that Lehman Brothers Holdings Inc. has yet to fall even further based on concern that the securities firm needs outside financing to nurse its balance sheet back to health.

A two-month high bearish outlook for options traders amid serious financial problems as Lehman reports the company’s first quarterly loss from the time the firm went public in 1994. The firm’s debt protection costs during the previous week has skyrocketed to 240 basis points from 150 basis points in the credit-default swaps market.

Lehman is without doubt likely to raise equity capital in the wake of this crisis. The firm’s second-quarter loss is about 50 cents per share during the third week of June.

As Lehman may need outside financing, the company has set its eye on overseas investors such as those from South Korea. The previous day, company shares fell 9.5 percent to $30.61 that translates to 53 percent loss this year.

Lehman put options trading escalated to 283,676 contracts. This further translates to four times the 20-day average. Bearish bets outnumbered bullish ones by 1.6-to-1.

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In Europe there is a rising risk of debt default, which are utilized in leveraged buyouts. This came about as companies struggle their way to settle huge amount of debts, as reported by Standard & Poor’s.

During the first quarter, we can see that inflation has indeed taken its toll on European companies as the cash to obligations ratio dwindles to 2.2 times debt from a ratio of 2.5 the previous year and was at 4 in the year 2003, according further to Standard & Poor’s.

The cash-coverage ratios are the greatest concern for the investor today. The rate at which these ratios have declined is nothing short of alarming as they approached the level of what experts call “record-thin” levels.

The warning made by S&P agrees with Moody’s Investors Service’s prediction regarding an increase in high-risk and high-yield debt defaults in Europe to 3.9 percent by the end of 2008 based from 0.7 percent in February.

In April, the global defaults as regards junk bonds surged to 1.29 percent, which was the highest ever in a span of one year based from March’s 1.14 percent.

During the second quarter, as regards nine high-yield European borrowers, Standard & Poor’s pared down its ratings from four during the comparable period the previous year.

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CAC 40 Index of France increased by 38.38, or 0.8 percent, to 5,014.28 in Paris. This has a 0.4 percent extension of this month’s gain. There was also a 0.8 percent gain for the SBF 120 Index.

The results for France this week were varied, unlike Asian stocks that seemed to follow a uniform trend, some stocks gained while others declined:

• Air France-KLM Group (AF FP), which is Europe’s biggest airline, advanced 99 cents, or 6.1 percent, to 17.19 euros as crude oil declined extremely low in two weeks due to an overall reduction in fuel demand, which for the airline company, meant reduced fuel costs.
• Michelin SA. The much reduced crude oil prices has indeed redounded to the benefit of this company. The tiremaker, which needs oil to manufacture synthetic rubber, was able to gain an additional 50 cents, or 0.9 percent, to 57.50 euros.
• Total SA, the third-biggest European oil company, came down 36 cents, or 0.6 percent, versus 56.09 euros.
• Alcatel-Lucent SA (ALU FP), which supplies telecommunications equipment, gained 13 cents, or 2.8 percent, to 4.86 euros. It may be of interest to note that the company is gearing up to sue Microsoft Corp. for $419 million after Microsoft allegedly committed a patent violation as regards its Xbox video-game player.
• Carrefour SA (CA FP) surged high in seven days as it gained 68 cents, or 1.5 percent, to 45.07 euros. The company revealed plans of selling natural gas and electricity in Belgium.
• Electricite de France SA (EDF FP), which produces and supplies power, is on its third-week advance as it attained 1.58 euros, or 2.3 percent, to 69.58 euros. Analysts say that electricity rates in Europe will soon increase up to 10.
• Natixis SA (KN FP) advanced 19 cents, or 2 percent, to 9.78 euros. The bank said it might be forced to cut jobs about 850 out of 22,000. This statement came out because of huge financial losses the investment bank incurred due to writedowns on subprime-infected assets.

Renault SA (RNO FP) is on an eight-day high as it advances 2.00 euros, or 3.1 percent, to 66 euros. This car manufacturer will work, in a joint venture, with Suez SA’s Sita waste unit to recycle cars, by virtue of a European Union antitrust approval.

Actively traded Asian stocks in the United States surged after showing a remarkable week-long performance. Toyota Motor Corp. has escalated production of vehicles while JPMorgan Chase & Co. forecasted an increase in Infosys Technologies Ltd.’s prices of shares.

A 1.2 percent to a 163.98 one-week high rise has been attained by the Bank of New York Co.’s Asia ADR Index.

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For the Nikkei 225 Stock Average futures, which expires June, we have these data:

• Chicago 14,370;
• Singapore 14,375; and
• Osaka, Japan 14,370.

Toyota posted the largest gain in a span of two weeks that added 2.9 percent to $102.05. this in turn was the most influential regarding the index’s advance.

As surging fuel costs triggered exports of gas-efficient cars to North America, Toyota has been leading gains in domestic vehicle production the previous month, as reported by Japan Automobile Manufacturers Association.

Infosys, second-biggest software-services provider in India, made a huge leap by 8.3 percent to $49.11, the most it’s ever done from April 15. JPMorgan analysts reveal that the company’s revenue outlook has tremendously improved, prompting them to hike by 27 percent their year-end target price.

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The falling prices of oil have decreased corporate bonds’ risk protection costs from default, easing up the concern regarding energy costs eating up consumers’ and companies’ cash alike.

There has been a decrease in credit-default swaps on the Markit CDX North America Investment Grade Index of 125 companies in the U.S. and Canada by 5.5 basis points to 101.5 basis points as they traded in New York, as revealed by Deutsche Bank AG. A rise would mean that there is degradation as regards the perceived credit quality.

The Markit LCDX index, a US leveraged loan market indicator that increases with improving confidence, gained 0.3 percentage point to 99.05, as reported by Goldman Sachs Group Inc.

Being contracts conceived to protect bondholders against default, credit-default swaps pays buyer at face value in return for the securities that underlies or the equivalent in cash in case a company should default in relation to the debt agreements.

Crude oil fell $2.48 per barrel, or 1.9 percent, to $126.37 per barrel that helped fuel a surge in US stock index futures. Oil prices were at their lowest since May 19, at an excess of $5 contract losses in a span of two days.

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A number of U.S. carriers that include United Airlines parent UAL Corp. incurred losses in New York trading, taking a benchmark stock index to its lowest week since the terrorist attacks on Sept. 11, based on speculations that the risk for bankruptcy is increasing.

The sudden rise this week by 2.3 percent (86 percent 12 months) in jet fuel prices has been stripping the airlines of cash and prompting analysts to increase their loss estimates’ scope.

“We view the value of the stocks as primarily coming from the chance that fuel prices plummet before the carriers must seek bankruptcy court protection. This is certainly one possible outcome, but we are not holding out much hope,” said analyst Kevin Crissey, UBS Securities LLC.

“If [jet fuel] prices continue to go higher, some of the airlines could be at risk of bankruptcy by early next year,” according to Philip Baggaley, Standard & Poor’s analyst.

The biggest US carriers may be in for a $7.2 billion operating loss in 2008. Northwest Airlines Corp., US Airways and AMR are most definitely the ones who will seek protection under Chapter 11 bankruptcy.

It’s a No-Brainer that every business needs a website, and so I won’t launch into a saga about the reasons for having one. What we can talk about it, how expensive is it? If you do a bit of searching, you’re going to find that the price ranges that are offered to you vary from as little as under a thousand dollars, to over twenty thousand.

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The reason for this variance, is that the site owner usually doesn’t give all the requirements at the beginning. As a result, you might be paying more for features that you don’t really need. Nonetheless, you need to be willing to shell out at least $5,000 for a reputable site, says Curt Schwab, president of Blue Water Media.

It’s important to decide what sort of capability you want your site to have. But even with the lowest requirements, you’re going to want a great design. Also, a major component nowadays is to have your site on the best search engines. This is not easy, and requires ongoing maintainence. Find out if your website designer provides these services as well.

You also need to find someone who is accountable. Gauge their response systems via email, or phone. This is why it helps to work with someone reputable, as they have the experience, as well as the support staff. So putting in a few hundred dollars more to get great customer service is totally worth it.

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Harley-Davidson, Inc. (NYSE: HOG) Board of Directors has approved a cash dividend increase of $0.33 per share for the second quarter of 2008, at the Annual Shareholder Meeting in Milwaukee, April 26, 2008, the company said.

All items of business presented to shareholders were approved at the meeting. The dividend is payable June 20, 2008, to shareholders of record as of June 5, 2008, representing a 10 percent increase over the previous dividend paid March 18, 2008.

During the meeting, the shareholders approved the re-election of George H. Conrades, Sara L. Levinson, George L. Miles, Jr., and Jochen Zeitz as Class II Directors. Also, Ernst & Young LLP was ratified as the Company’s independent registered public accounting firm for calendar year 2008.

Based in Milwaukee, Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell) and Harley-Davidson Financial Services (HDFS). Harley-Davidson Motor Company produces heavyweight motorcycles and offers a line of motorcycle parts, accessories, general merchandise and related services.

Second-largest U.S. carrier United Airlines has raised domestic airfares by 3 to 5 percent Thursday to cope with soaring fuel costs. This is the airline’s third attempt to jack up the fare in just over two weeks, which may encourage other airlines to follow suit.

The increase, which applies everywhere in the U.S. except to and from Hawaii, is “part of our effort to pass on increases in our commodity costs that will help offset the significant and rapid rise in fuel,” said United spokeswoman Robin Urbanski.

The move comes just two days after Delta Air Lines Inc. Chief Executive Richard Anderson said domestic carriers need to raise tickets 15 to 20 percent just to break even at existing fuel prices. United parent UAL Corp., Delta and other major carriers reported billions of dollars in combined quarterly losses in recent days.

“This is the most challenging financial period in the history of the industry, just at the same time we have this unprecedented surge in jet fuel prices with no end in sight, we’re bumping up against a weakening economy,” said John Heimlich, chief economist of the Air Transport Association.

No other carrier immediately announced it was following suit. American Airlines, the nation’s largest carrier, and Southwest said they were evaluating the move.

United’s corporate parent earlier this week said it lost $537 million during the first three months of the year because of increased fuel costs. The carrier called the current environment “extraordinarily difficult” for airlines, and said it planned to cut flights and slash 1,100 jobs in an effort to cut costs.

The loss was worse than investors had been expecting, and the company’s shares shed a third of their value in a matter of hours. A rally among airline stocks Thursday won back only a fraction of those losses.

UAL shares rose $1.45, or 10.4 percent, to close at $15.40.