Republicans compete in Iowa as Perry jumps in (Reuters)

AMES, Iowa (Reuters) – Six Republican presidential hopefuls competed on Saturday in the Iowa straw poll, an unofficial test of campaign strength, as Texas Governor Rick Perry formally launched a White House run that could reshape the 2012 race.

Voters swarmed the straw poll site and lined up early to cast a ballot in the nonbinding mock election that traditionally winnows the Republican field of poor performers and boosts those who do better than expected.

Perry issued a statement formally declaring his candidacy ahead of a speech to a gathering of conservatives in South Carolina, another state with an early nominating contest.

"It is time to get America working again," Perry said in the statement. "That's why with the support of my family and an unwavering belief in the goodness of America, I declare to you today my candidacy for president of the United States.

The straw poll and Perry's campaign launch, coming less than six months before Iowa residents hold the first presidential nominating contest, promise to reshuffle the field in the Republican race for the nomination to challenge President Barack Obama in 2012.

Perry, a staunch social conservative with a strong job creation record in Texas, is expected to immediately vault into the top tier of contenders along with front-runner Mitt Romney. Perry visits Iowa on Sunday.

At the straw poll, candidates pleaded for support as dozens of buses carrying supporters rolled into the site. Lines were long at the tents hosted by Tim Pawlenty and Michele Bachmann, who are competing for the votes of the social conservatives who dominate the Iowa nominating contest.

Romney will be on the ballot but chose not to participate after winning the straw poll in 2007. He later lost the Iowa caucuses to Mike Huckabee, who rode the momentum he generated with a surprise second-place straw poll finish.

The poll, a fund-raiser for the state party, created a carnival atmosphere around Iowa State University's basketball arena, where candidates enticed supporters with big-tent entertainment, free food and speeches.

Any Iowa resident over 18 could show up and participate, with many allowing a candidate to buy their $30 ticket. Candidates organized the buses to haul in supporters from around the state in a warm-up for the organizational effort needed in the caucuses.

Clara Bulens of Grinnell said she voted for Bachmann because "she's beautiful, brilliant, very personable and I love her platform."

PALIN NOT A FAN

Not all of the candidates are fans of the event. Sarah Palin, the 2008 vice presidential nominee who is still flirting with a White House run, questioned its validity during a visit to the Iowa state fair on Friday.

"It's not always the tell-tale sign of what the electorate is feeling," Palin said of the poll. "It's who happens to show up and has the time and energy to spend that day for their particular candidate."

Pawlenty and Bachmann have the most at risk. They are vying for the same conservative supporters and both need a win in Iowa's caucuses in 2012 to have a viable path to the nomination.

Bachmann's appeal to both Tea Party fiscal conservatives and social conservatives has shot her to the top of opinion polls in Iowa, but a flat performance by the Minnesota congresswoman could puncture her early momentum.

Pawlenty, the former Minnesota governor, is mired in single digits in state and national polls and needs a strong showing to keep his campaign alive. He ripped Bachmann's record in Congress during a debate on Thursday at the straw poll site.

Four other Republicans -- U.S. Representatives Ron Paul and Thaddeus McCotter, businessman Herman Cain and former Senator Rick Santorum -- also paid the fees and bought tents and speaking time at the event.

Romney, along with former House of Representatives Speaker Newt Gingrich and former Utah Governor Jon Huntsman, did not pay to participate in the straw poll but will be listed on the ballot.

(Editing by Mohammad Zargham)

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MasterCard profit jumps 33 percent, beats Street (Reuters)

CHARLOTTE, North Carolina (Reuters) – MasterCard Inc said second-quarter profit jumped 33 percent, as inflation in the United States lifted spending volume and more international consumers used debit and credit cards. Shares rose as much as 9.4 percent.

The credit- and debit-card processor said signing up two big banks -- SunTrust Banks Inc and Sovereign Bank -- to offer MasterCard debit cards instead of rival Visa Inc's service helped boost revenue in the second quarter, and should help next quarter too.

MasterCard executives told analysts on a conference call that the company benefited from overseas customers using debit and credit cards instead of cash to make payments, a long-term trend. U.S. consumers spent more on gasoline and other goods because of rising prices, increasing payment volumes even as the economy weakened.

Analysts said MasterCard's expanding international business can offset a slowdown in U.S. spending in coming quarters.

"They're getting strength from other areas," said Shannon Stemm, a financial services analyst with Edward Jones.

MasterCard on Wednesday reported second-quarter net income of $608 million or $4.76 per share, up from $458 million, or $3.49 per share, a year earlier.

Analysts expected $4.23 per share, according to Thomson Reuters I/B/E/S.

Visa also beat analysts' expectations when it reported quarterly results last week.

MasterCard executives said they would alter their U.S. debit interchange fee structure in advance of new industry fee caps being imposed on those charges later this year.

The fees are charged to merchants for processing a customers' debit card transaction. The so-called Durbin amendment to the 2010 Dodd-Frank financial reform law placed a cap on those fees which takes effect later this year.

MasterCard's U.S. market chief Chris McWilton said the company would institute a two-tiered fee structure by October 1, with fees varying according to the size of the merchant. McWilton did not comment on how the new system relates to the Durbin amendment, or how it will affect revenue.

Last week, Visa said it would introduce a flat network participation fee, and lowered the per-transaction rate for processing all U.S. transactions.

REVENUE

MasterCard's revenue increased 22 percent to $1.7 billion as its cross-border and overseas business grew.

Overall, MasterCard's cross-border transactions rose 19.3 percent, and processed transactions increased 17.4 percent.

The company said it also gained from new processing business in the Netherlands and Brazil.

Total operating expenses increased 20 percent to $782 million. MasterCard said the rise was due to higher personnel costs related to acquisitions.

MasterCard shares were up 8.6 percent at $324.22 on Wednesday afternoon, off an earlier high at $326.46.

(Reporting by Joe Rauch, editing by Gerald E. McCormick, John Wallace and Matthew Lewis)

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Private hiring jumps, sparking recovery hopes (Reuters)

WASHINGTON (Reuters) – Companies hired four times more workers in June than in May, strengthening views the economy was starting to escape the doldrums of the first half of the year.

A drop in the number of Americans filing applications for unemployment benefits last week also offered hope for the labor market, although they remain too high to signal robust growth.

Payrolls processor ADP said on Thursday private sector employment increased 157,000 after a modest 36,000 gain in May, a rise more than double economists' expectations.

With gasoline prices falling, automakers cranking up production and the decline in house values moderating, the dark clouds over the U.S. economy are starting to lift.

The jump in private employment was the latest indication the economy was pulling out of its first-half slump, a view bolstered by better-than-expected June sales at retailers, but analysts still see only a modest recovery ahead.

"It adds to the sense of relief that much of the slowdown that the economy endured during the first half of the year was due to temporary factors and there is not much threat of a double-dip (recession)," said Mark Vitner, an economist at Wells Fargo Securities in Charlotte, North Carolina.

The employment gain, which reflected increases in manufacturing and services jobs, prompted several Wall Street banks to raise their forecasts for the government's closely watched nonfarm payrolls count for June due on Friday.

A Reuters survey conducted last week found that economists were looking for an increase of 90,000 nonfarm jobs after May's meager 54,000 gain. But economists now believe employment probably rose anywhere between 125,000 and 175,000.

"ADP has underpredicted the monthly jobs report by 45,000 on average the last four months ... but ADP estimates have won new credibility after their forecast hit May's weak jobs number correctly," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

JOB GAINS ACROSS THE BOARD

Gains in private hiring last month were largely across the board, although construction and financial services' payrolls shrank. Small businesses, those with less than 50 employees, accounted for most of the hiring, adding 88,000 jobs. Large companies added only 10,000 workers in June, according to ADP.

"While it is just one month's number, it suggests that maybe what happened was a pause in the economic expansion and as we head into the summer months we're going to pick up some momentum," said Joel Prakken, chairman at Macroeconomic Advisers, which produces the report jointly with ADP.

Economic activity in the first six months of the year was curbed by rising commodity prices and supply chain disruptions following Japan's devastating earthquake in March.

With these factors starting to ease, economists expect both growth and employment to rise in the third quarter.

That is starting to show in initial claims for state unemployment benefits, which dropped 14,000 to 418,000 last week. A shortage of parts from Japan forced some auto makers to bring forward their annual retooling shutdowns from July, keeping initial claims elevated.

Still, claims remained above the 400,000 level that is usually associated with a stable labor market for a 13th straight week. Economists expect them to decline considerably in the weeks ahead as auto assembly plants reopen.

"Output and employment are likely to get a little bit of a lift in the third quarter from a rebound in automobile assemblies and a rebound in inventories that would probably carry through most of the second half of the year," said Wells Fargo Securities' Vitner.

Signs of a turnaround in the economy's fortunes were also offered by several U.S. retailers who reported better-than-expected sales gains in June as they lured shoppers with discounts without undercutting revenue.

Macy's Inc, Costco Wholesale Corp, Target Corp and Gap Inc all beat Wall Street estimates.

(Additional reporting by Leah Schnurr in New York; Editing by Andrea Ricci)

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