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Euro Zone Orders Rise but Hiring Continues to Lag

LONDON — Strong orders for manufactured goods helped factory activity in the euro zone rise in August at the fastest pace in over two years, leading to backlogs of work for the first time since mid-2011, a survey showed on Monday.

But data on employment showed that companies remained reluctant to hire and eager to reduce costs, a sign of persistent nervousness about the recovery in the euro zone economy.

Markit Economics, a data and analysis firm that compiled the figures, said conditions had improved across all major economies in the 17-nation bloc except for France.

New orders came in at their quickest rate since May 2011, Markit said, suggesting the momentum will continue.

The firm’s Purchasing Managers’ Index of manufacturing companies jumped to 51.4 from 50.3 in July. A reading above 50 signifies expansion.

“Although gains are still only modest, companies reported the strongest improvement in business conditions for just over two years, with a pickup in new orders growth suggesting the upturn will be sustained into September,” said Chris Williamson, Markit’s chief economist.

The euro zone escaped from an 18-month recession last quarter with growth of 0.3 percent, supported by stronger than expected expansions in Germany and France, although a Reuters poll last month suggested growth would be weak for some time.

A subindex measuring output, which feeds into the wider composite index due on Wednesday and is seen as a good indicator of growth, rose to a 27-month high of 53.4 from July’s 52.3.

That growth in output is likely to continue next month as the new orders index jumped to 53.3 from 50.8 in July, its highest level since May 2011. For the first time in 27 months factories built up a backlog of work.

The Markit survey comes after data on Friday showed that optimism in the euro zone’s economy improved sharply in August, although unemployment remained stubbornly high in July, particularly in the bloc’s weaker member states.

The purchasing index released on Monday showed that manufacturers reduced head count for the 19th month in August and at a sharper rate than in July.

“The fact that companies remain reluctant to take on staff — due to the need to cut costs to boost competitiveness and offset rising oil prices suggests that there’s a long way to go before the recovery feeds through to a meaningful job market improvement,” Mr. Williamson said.

DealBook: Re/Max Files for I.P.O. as Housing Market Continues Upswing

Investigation Continues Into Fire on Boeing 787

Britain’s Air Accidents Investigation Branch, which is responsible for investigating civil aviation incidents, said the airliner, operated by Ethiopian Airlines, had been moved to a secure hangar and that a full investigation was under way.

In addition to the British investigators leading the inquiry, a team from Boeing was on site along with representatives from the airline and from two American government agencies, the Federal Aviation Administration and the National Transportation Safety Board.

The fire, which broke out Friday, caused no injuries or significant damage but did disrupt travel in Britain and elsewhere. Heathrow airport said that around 40 flights had been canceled on Saturday as it cleared its backlog of delays after planes were left in the wrong location.

But the repercussions for Boeing could be more significant. Investors, mindful that hazards with the jet’s batteries had led to the grounding of the entire fleet from January to April, reacted nervously, sending Boeing’s shares down 4.7 percent on Friday.

Smoke came from the plane, named the Queen of Sheba, eight hours after it had been parked in a remote space at Heathrow and about four and a half hours before it was scheduled to depart for Ethiopia. No passengers were on the plane, which was connected to an external ground power source, according to people briefed on the incident.

It was also not clear if any maintenance was under way or how long the fire had been burning, though it was intense enough to burn through its carbon-composite skin on the top of the fuselage near the tail.

That area was not next to either of the plane’s new lithium-ion batteries, which caught fire or emitted smoke in two earlier incidents that led to the grounding of the first 50 787s. Unless they were charging, aviation experts said, the batteries would not have been in use if the plane were connected to ground power.

A team of British safety investigators began examining the plane shortly after the fire was put out. But no one involved — the investigators, Boeing, the airline or the airport — commented on the possible cause of the fire.

Other experts said that some of the plane’s wiring, and the oxygen systems for passengers, would have passed through the damaged area, which was above the rear galley. It was also possible the fire migrated from another part of the plane, they said.

Richard L. Aboulafia, an aviation consultant at the Teal Group in Fairfax, Va., said the possibilities ranged from “something pretty benign,” like a lit cigarette or a coffee machine left on, to a serious flaw in the plane’s new electrical system, which includes other innovative components besides the batteries. Or, he said, it could be something “not as easy or as terrible,” like a component that was installed incorrectly.

The Heathrow incident was not the only problem aboard a 787 on Friday. Thomson Airways, a charter airline, said that one of its Dreamliner planes traveling from Manchester Airport in England to Orlando-Sanford International Airport in Florida had to turn back “as a precautionary measure.”

The fire on the Ethiopian 787 forced Heathrow Airport to temporarily suspend arrivals and departures while fire crews responded to the incident at 4:36 p.m. local time. Once the fire was extinguished around 6 p.m., the runways reopened.

Friday’s incidents took place about two months after the 787 Dreamliners returned to the skies after being grounded over the battery problems. One of the new lithium-ion batteries caught fire on a 787 parked at a Boston airport on Jan. 7, and another began smoking in midflight nine days later, forcing a 787 to make an emergency landing in Japan.

Stephen Castle reported from London, and Christopher Drew from New York. Jad Mouawad contributed from New York.

Fox Rothschild Continues Steady Climb Up Am Law 200

Only two of the six Pennsylvania firms on the Am Law 200 were able to improve their position on the annual ranking of firms based on gross revenue, despite all of the firms seeing rises in that metric.

Pot magazine lawsuit continues in Colo.

DENVER (AP) - Colorado will have to answer a complaint about treating marijuana magazines like pornography, even though state officials have announced that the restriction is unconstitutional and won't be enforced.

Products Liability Fight Over Restatement Continues

Attorneys told me that the state of products liability law in Pennsylvania is extremely uncertain in the first part of my series on hot issues in products law. The state of uncertainty was triggered because the U.S. Court of Appeals for the Third Circuit has twice opined in the last three years that the state Supreme Court is likely to adopt provisions of the Restatement (Third) of Torts, while the Pennsylvania high court has not squarely dealt with whether the Third Restatement should replace the Restatement (Second) of Torts.

Products Liability Fight Over Restatement Continues

Attorneys told me that the state of products liability law in Pennsylvania is extremely uncertain in the first part of my series on hot issues in products law. The state of uncertainty was triggered because the U.S. Court of Appeals for the Third Circuit has twice opined in the last three years that the state Supreme Court is likely to adopt provisions of the Restatement (Third) of Torts, while the Pennsylvania high court has not squarely dealt with whether the Third Restatement should replace the Restatement (Second) of Torts.

Market Continues to Climb, Defying Fears of a Sell-Off

The stock market rose on Wednesday, with the Dow Jones industrial average closing above 15,000 for a second day after breaching that level for the first time on Tuesday.

Scott Wren, a senior equity strategist at Wells Fargo Advisors, predicted more gains in the short term, but he also said a pullback was likely at some point because the rise in the market was beginning to overstate the improvement in the economy.

Stocks have defied predictions that a sell-off would follow the spring surge as signs emerged that growth could be set for a slowdown. The Dow and the Standard & Poor’s 500-stock index have gained every month of the year and are trading at nominal record highs.

Materials and information technology companies gained the most of the 10 industry groups in the S.& P. 500 index. Materials rose 0.9 percent, and I.T. rose 0.8 percent. The two industry groups have surged in the last month after lagging the index for the first three months of the year.

That suggests that investors are moving from the so-called defensive stocks — which offer good dividends and can grow regardless of the state of the economy — into industries that will benefit more if the economy accelerates.

The Dow industrials rose 48.92 points, or 0.3 percent, at 15,105.12. The Dow is 15.3 percent higher for the year. The S.& P. 500 index rose 6.73 points, or 0.4 percent, at 1,632.69, extending its advance for 2013 to 14.5 percent.

The Nasdaq composite index advanced 16.64 points, or 0.5 percent, to 3,413.27, putting its gain so far this year at 13 percent.

Among the stocks on the move on Wednesday, AOL plunged $3.68, or 8.9 percent, to $37.74 after the company reported earnings that fell short of the forecasts of Wall Street analysts who follow the stock. Subscription revenue fell 9 percent.

Wendy’s fell 34 cents, or 5.6 percent, to $5.78 after it reported a 2 percent rise in revenue to $603.7 million, short of the $615 million forecast of analysts.

Whole Foods climbed $9.39, or 10.1 percent, to $102.19 after the natural foods store chain said its fiscal second-quarter net income rose 20 percent. The company also raised its profit forecast for the full year.

Electronic Arts, which makes the Madden football games and SimCity, jumped $3.15, or 17.1 percent, to $21.56 after it projected profits for the current fiscal year that were higher than analysts were expecting.

In the bond market, interest rates eased. The price of the 10-year Treasury note rose 4/32 to 102 3/32, while its yield slipped to 1.77 percent, from 1.78 percent late Tuesday.

Euro Watch: Unemployment Continues to Climb in Euro Zone

The euro zone jobless rate rose to 11.8 percent in November from 11.7 percent in October, according to Eurostat, the statistical agency of the European Union. Eurostat estimated that 18.8 million people in the euro zone were unemployed in November, two million more than a year earlier.

Germany has provided momentum to the European economy over the past three years, as strong exports protected the country from the crisis.

But on Tuesday, the Federal Statistics Office in Berlin said that German exports declined 3.4 percent while imports slid 3.7 percent in November from a month earlier. The weakness narrowed Germany’s trade surplus to €14.6 billion, or $19 billion.

German factory orders also fell in November amid weak demand from outside the euro area, the Economy Ministry said Tuesday. Orders, adjusted for seasonal swings and inflation, slid 1.8 percent from October, when they jumped 3.8 percent.

“The November numbers are not a one-off but an extension of the current trend of weakening exports,” Carsten Brzeski, an economist at ING, wrote in a research note Tuesday. He pointed out that German exports had fallen about 4 percent since May.

“Today’s data confirmed our view that exports should have turned from driver of growth into drag on growth,” he wrote.

A separate report from Eurostat showed that retail sales fell 2.6 percent in November from a year earlier, though they gained 0.1 percent from October.

The gloomy reports come as the Governing Council of the European Central Bank prepares to hold a policy meeting Thursday, followed by an interest-rate announcement. Despite a sharp decline in bank lending reported last week, which had some analysts suggesting that the central bank might try new steps to stimulate the economy, economists surveyed by Reuters said they expected the E.C.B. to leave policy unchanged in January as it waited for a clearer picture of economic conditions.

Like their counterparts in the United States, Japan and Britain, the monetary authorities in the euro zone have already opened the spigots, allowing banks to borrow essentially as much as they want at the benchmark rate. Mario Draghi, president of the E.C.B., has pledged to do whatever is necessary to ensure the stability of the euro, including, if needed, buying the sovereign bonds of Spain and Italy to hold their borrowing costs to sustainable levels.

The president of the European Commission, José Manuel Barroso, said Monday in Lisbon that “the existential threat against the euro has essentially been overcome. ”

“In 2013 the question won’t be if the euro will, or will not, implode,” he said.

The central bank’s actions have succeeded in calming markets and driving down government bond yields for embattled countries. The European Commission reported Tuesday that an index of economic sentiment in the euro zone had improved by 1.3 points in December, to 87. “Economic sentiment in the euro area improved among consumers and across all sectors, except retail trade,” the commission reported.

Gilles Moëc, an economist at Deutsche Bank in London, said the data Tuesday were consistent with expectations that the euro zone economy would remain in recession through the winter, with the unemployment rate possibly rising to as high as 12.4 percent.

“We’re still far below the level of growth that would stabilize the labor market,” he said.

But he added that the commission’s report on economic sentiments, as well as recent surveys of purchasing managers, suggested that the downturn in the manufacturing sector had “bottomed out,” making possible a return to growth later in the year.

“External demand seems to be holding up better than we had thought,” Mr. Moëc said. “Now we are to a large extent dependent on what happens in the United States,” he added, referring to the negotiations on spending.

Europe also got a vote of confidence from Tokyo on Tuesday, as Finance Minister Taro Aso said Japan would buy bonds of the European Stability Mechanism, the euro zone bailout fund, as well as sovereign debt in the currency zone.

“The financial stability of Europe will help the stability of foreign exchange rates, including the yen,” Mr. Aso was quoted by the Nikkei newspaper as saying.

Attacking joblessness may require governments to ease back on austerity measures that many economists, including some at the International Monetary Fund, say might have gone too far. In France, President François Hollande has vowed to turn around the flagging labor market, where, according to Eurostat, unemployment was 10.5 percent in November.

Eurostat said Spain, which is suffering from the collapse of a real estate bubble and the impact of a raft of tough austerity measures, had the highest unemployment rate in the bloc, at 26.6 percent. Greece, where the sovereign debt crisis began, was next at 26 percent, according to data released in September. The lowest rates were in Austria, at 4.5 percent; Luxembourg, at 5.1 percent; and Germany, at 5.4 percent.

Worryingly, youth unemployment in the euro zone continued to grow, with 5.8 million people under age 25 classified as jobless in November, up 420,000 from a year earlier.

The Greek prime minister, Antonis Samaras, who was in Berlin for talks with Chancellor Angela Merkel on Tuesday, singled out youth unemployment as one of the biggest challenges Greece faces in reviving its economy. But he said at a news conference before meeting the chancellor that, over all, he was positive.

“I see the glass half-full,” Mr. Samaras said before taking part in an economic conference in Berlin. “We’re delivering and Europe’s helping.”

It was the Greek prime minister’s second trip to Berlin since taking office. The mood appeared lighter than during his visit in August, which came on the heels of calls from within Ms. Merkel’s government for Greece to leave the common currency.

Greece is focusing its efforts on winning back the trust of Europeans, as well as the markets, Mr. Samaras said. But he emphasized that high unemployment, especially among young people, weighed heavily on Greeks.

“I would like to make it clear up front that our country is making enormous efforts and many are paying a high price, in order to get things back on track,” Mr. Samaras said.

Ms. Merkel said that Greece’s European partners must continue to support the country. She was perhaps wary of the fragility of Mr. Samaras’s three-party coalition government, which has been pushing through deeply unpopular reforms.

“We also must do everything to guarantee economic growth, security and jobs,” Ms. Merkel said.

David Jolly reported from Paris. James Kanter contributed reporting from Brussels and Hiroko Tabuchi from Tokyo.

With Hire of 15 Lawyers, Hinckley Allen Expansion Continues

In a climate where clients seek a wider range of expertise from the law firms they hire, along with the economies of scale that only a larger operation can provide, it's not at all unusual to see large chunks of one firm join forces with another.

Exhibit A: earlier this month, there were widespread reports in the Connecticut legal community that 15 lawyers at the Farmington firm of Levy & Droney are moving to the Hartford office of Providence, R.I.-based Hinckley Allen & Snyder, effective January 1.

The attorneys being absorbed by the regional firm, including name partners Coleman B. Levy and John F. Droney, will make the move to the Stilts Building in downtown Hartford. The remaining five Levy & Droney lawyers will be left to fend for themselves. Levy & Droney, a 38-year-old firm that has ranked in the top 25 in Connecticut in terms of annual gross revenues, will reportedly be dissolved in the process.

The move will boost the size of Hinckley Allen's Hartford office to about 35 lawyers. Hinckley Allen, which will have about 155 attorneys once the hirings take place, also has offices in Boston, Concord, N.H., and Albany, N.Y.

The firm entered the Connecticut market with a similar bulk hiring effort in 2008, when it acquired 25 lawyers from the now-defunct New Haven law firm of Tyler Cooper.

Marc A. Crisafulli, managing partner for Hinckley Allen, declined to discuss the most recent hiring deal. But he said the firm has been methodical in expanding its business plan in Connecticut, starting with the Tyler Cooper acquisitions five years ago. That entry into the Connecticut market, he said, was 13 years in the making.

"In Connecticut, like all of our markets, we're always looking to add good people to add to our culture and help us build a more successful firm for the future," Crisafulli said.

The firm's culture, he said, is not one based on growth just for the sake of growing, but rather one built on long-term sustainability. "We're looking for people who are interested in the collective practice of law."

Without discussing the Levy & Droney hires specifically, Crisafulli acknowledged making a decision to bring in lawyers from a single law firm can be a way to add clients, while gaining lawyers who share Hinckley Allen's vision. "For us, it generally starts with people who are known to us," he said. "Usually, someone in our firm has worked with them and has a good personal connection. When we get people that come from smaller firms, it's usually that they are entrepreneurial, they have great client relationships, but they can't provide all the types of services that address the needs of their clients."

For example, Crisafulli said, a smaller firm might have a corporate client who needs expertise in federal law governing pensions under the Employee Retirement Income Security Act. "With ERISA, you can't have someone doing that part time," he said. "If you're a smaller firm, you're not going to have an expert on hand who can help that client. But a firm like ours can."

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Law School Enrollment Continues to Decline

Approximately 8,000 fewer first-year law students will show up nationwide this year compared to two years ago, when enrollment reached an all-time high, according to the American Bar Association. This year's numbers represent a 15 percent decline since then and a 9 percent decline since last year.

Products Liability Fight Over Restatement Continues

Attorneys told me that the state of products liability law in Pennsylvania is extremely uncertain in the first part of my series on hot issues in products law. The state of uncertainty was triggered because the U.S. Court of Appeals for the Third Circuit has twice opined in the last three years that the state Supreme Court is likely to adopt provisions of the Restatement (Third) of Torts, while the Pennsylvania high court has not squarely dealt with whether the Third Restatement should replace the Restatement (Second) of Torts.

Products Liability Fight Over Restatement Continues

Attorneys told me that the state of products liability law in Pennsylvania is extremely uncertain in the first part of my series on hot issues in products law. The state of uncertainty was triggered because the U.S. Court of Appeals for the Third Circuit has twice opined in the last three years that the state Supreme Court is likely to adopt provisions of the Restatement (Third) of Torts, while the Pennsylvania high court has not squarely dealt with whether the Third Restatement should replace the Restatement (Second) of Torts.

Jones Day Brings On Gide Loyrette Team as Firm Continues Europe Push

Jones Day has secured a boost for its Paris office with the hire of a five-strong Gide Loyrette Nouel finance team led by derivatives heavyweight Alban Caillemer du Ferrage.

Caillemer du Ferrage, who was head of derivatives and market infrastructure at Gide before joining Jones Day Monday, is considered one of the top derivatives advisers in the French legal market.

He specializes in regulatory, structuring and collateral issues relating to OTC derivatives and structured repos and advises on clearing, repository and disclosure matters. The derivatives specialist -- who is top-ranked for derivatives by Chambers and Partners -- is the International Swaps and Derivatives Association counsel for France has worked with clients including independent clearing house LCH Clearnet.

He is joined at Jones Day by of counsel Qian Hu, counsel Karole-Anne Sauvet, and associates Clement Saudo and Mathilde Nicand.

The team will work closely with lawyers in London led by banking and finance co-chair Edward Nalbantian, and the New York team led by Jayant Tambe, co-head of the firm's financial institutions, litigation and regulation practice.

Nalbantian commented: "With experience in matters related to both disputes and transactions, they provide a perspective that will be of immense value to all our clients whether financial institutions, funds or end-users."

The hires come amid an expansive period for Jones Day's European practice. Earlier this year, the U.S.-based giant grew its litigation and arbitration practice with the addition of Paris partner Jean-Pierre Harb from Baker & McKenzie.

Jones Day also earlier this year set up its third German office in Duesseldorf and confirmed plans to launch in Amsterdam in early 2013. The firm also expanded its City litigation practice in the summer with the hire of Christopher Braithwaite and Baiju Vasani from Simmons & Simmons and Crowell & Moring, respectively.

DealBook: After Multi-Billion Dollar Loss, JPMorgan Continues to Revamp

Jonathan Ernst/ReutersBarry Zubrow, who runs the JPMorgan’s regulatory affairs, is expected to cede his position by January.

Two senior executives at JPMorgan Chase are expected to leave by the end of the year, in the latest round of management reshuffling after the bank’s multibillion-dollar trading loss.

Irene Tse — who headed up the North American arm of the chief investment office, the powerful but previously little known unit at the center of the trading mishap — is leaving to start her own hedge fund. Barry Zubrow, who currently runs the bank’s regulatory affairs, is expected to cede his current position by January, according to several current and former executives with knowledge of the move.

The exits come in the aftermath of trading blunder, which stemmed from a soured credit bet. The losses have been a rare black eye for Jamie Dimon, JPMorgan’s chief executive, once considered among the most skilled risk managers on Wall Street.

As chief risk officer at the bank from 2007 to January 2012, Mr. Zubrow has been associated with the trading losses. Ms. Tse, meanwhile, joined the bank in early 2011 from hedge fund Duquesne Capital Management to take over as head of the North American trading desk.

News of Mr. Zubrow’s move was previously reported by the Wall Street Journal.

As it works to move beyond the trading losses and reassure skittish investors, JPMorgan has revamped parts of its organization.

The bank has appointed a new head of the chief investment unit to succeed Ina Drew, one of the most notable casualties of the trading mess. The bank has also promoted a number of younger executives, including Mike Cavanagh and Daniel Pinto to head up a united corporate and investment bank. Mr. Cavanagh is leading the cleanup operation.

During Mr. Dimon’s nearly six-year reign, the bank has undergone a number of management shuffles. Few of the executives who made up Mr. Dimon’s inner circle during the financial crisis – including Bill Winters, Steve Black and Heidi Miller – remain.

A spokesman for the bank declined to comment.

Products Liability Fight Over Restatement Continues

Attorneys told me that the state of products liability law in Pennsylvania is extremely uncertain in the first part of my series on hot issues in products law. The state of uncertainty was triggered because the U.S. Court of Appeals for the Third Circuit has twice opined in the last three years that the state Supreme Court is likely to adopt provisions of the Restatement (Third) of Torts, while the Pennsylvania high court has not squarely dealt with whether the Third Restatement should replace the Restatement (Second) of Torts.