Why some people can run on little sleep and get so much done

For a small group of people -- perhaps just 1% to 3% of the population -- sleep is a waste of time.

Natural "short sleepers," as they're officially known, are night owls and early birds simultaneously. They typically turn in well after midnight, then get up just a few hours later and barrel through the day without needing to take naps or load up on caffeine.

They are also energetic, outgoing, optimistic and ambitious, according to the few researchers who have studied them. The pattern sometimes starts in childhood and often runs in families.

While it's unclear if all short sleepers are high achievers, they do have more time in the day to do things, and keep finding more interesting things to do than sleep, often doing several things at once.

Nobody knows how many natural short sleepers are out there. "There aren't nearly as many as there are people who think they're short sleepers," says Daniel J. Buysse, a psychiatrist at the University of Pittsburgh Medical Center and a past president of the American Academy of Sleep Medicine, a professional group.

Out of every 100 people who believe they only need five or six hours of sleep a night, only about five people really do, Dr. Buysse says. The rest end up chronically sleep deprived, part of the one-third of U.S. adults who get less than the recommended seven hours of sleep per night, according to a report last month by the Centers for Disease Control and Prevention.

[More from WSJ.com: How Much Sleep Do You Need?]

To date, only a handful of small studies have looked at short sleepers -- in part because they're hard to find. They rarely go to sleep clinics and don't think they have a disorder.

Normal Sleeper Most adults have normal sleep needs, functioning best with 7 to 9 hours of sleep, and about two-thirds of Americans regularly get it. Children fare better with 8 to 12 hours, and elderly people may need only 6 to 7. Wannabe Short Sleeper One-third of Americans are sleep-deprived, regularly getting less than 7 hours a night, which puts them at higher risk of diabetes, obesity, high blood pressure and other health problems. Short Sleeper Short sleepers, about 1% to 3% of the population, function well on less than 6 hours of sleep without being tired during the day. They tend to be unusually energetic and outgoing. Geneticists who spotted a gene variation in short sleepers were able to replicate it in mice -- which needed less sleep than usual, too.

A few studies have suggested that some short sleepers may have hypomania, a mild form of mania with racing thoughts and few inhibitions. "These people talk fast. They never stop. They're always on the up side of life," says Dr. Buysse. He was one of the authors of a 2001 study that had 12 confirmed short sleepers and 12 control subjects keep diaries and complete numerous questionnaires about their work, sleep and living habits.One survey dubbed "Attitude for Life" that was actually a test for hypomania. The natural short sleepers scored twice as high as the controls.

There is currently no way people can teach themselves to be short sleepers. Still, scientists hope that by studying short sleepers, they can better understand how the body regulates sleep and why sleep needs vary so much in humans.

"My long-term goal is to someday learn enough so we can manipulate the sleep pathways without damaging our health," says human geneticist Ying-Hui Fu at the University of California-San Francisco. "Everybody can use more waking hours, even if you just watch movies."

Dr. Fu was part of a research team that discovered a gene variation, hDEC2, in a pair of short sleepers in 2009. They were studying extreme early birds when they noticed that two of their subjects, a mother and daughter, got up naturally about 4 a.m. but also went to bed past midnight.

Genetic analyses spotted one gene variation common to them both. The scientists were able to replicate the gene variation in a strain of mice and found that the mice needed less sleep than usual, too.

[More from WSJ.com: What's a Good Night's Sleep Worth to You?]

News of their finding spurred other people to write the team, saying they were natural short sleepers and volunteering to be studied. The researchers are recruiting more candidates and hope to find more gene variations they have in common.

That All-Nighter Feels Good -- Temporarily Sleep deprivation makes most people grumpy. It's sometimes used as a form of torture. Oddly enough, it can also bring on temporary euphoria, according to a study in the journal Neuroscience last month. Researchers had 14 healthy young adults stay up all night and all the next day and then compared their reactions with 13 subjects who had slept normally. In one test, sleepless subjects asked to rate a series of images uniformly saw them as more pleasant or positive. "We saw this strange lopsided shift," says lead author Matthew Walker, an associate professor of psychology and neuroscience at the University of California-Berkeley. Brain scans also showed that the subjects who had pulled all-nighters had heightened activity in the mesolimbic pathway, a brain circuit driven by dopamine, a neurotransmitter that typically regulates feelings of pleasure, addiction and cravings. The boost of dopamine after an all-nighter may help explain why sleep deprivation can alleviate major depression in about 60% of patients, although the effect is only temporary. "As soon as they get recovery sleep, all that mood elevation is lost," says Dr. Walker. Could the sleep-deprived brain be somehow compensating for the lack of downtime with a surge of dopamine to keep on going? Scientists don't yet know. Earlier studies have also shown that sleep deprivation amplifies activity in the amygdala, the primitive emotional center of the brain, and reduces it the prefrontal cortex, where higher, more rational thought occurs. It may be that the brain reverts to a more basic mode of operating when it is sleep deprived, Dr. Walker speculates. Alternatively, he says, "we know that different parts of the brain are more sensitive than others to sleep deprivation. It may be that the prefrontal cortex just goes down first." Although the feelings of euphoria sound great, Dr. Walker warns that operating more on emotion than reason can be very risky. "You are all gas pedal and no brake," he says. That can be dangerous, indeed, if you are in a job that requires both long hours and difficult decision making.

Potential candidates for the gene study are sent multiple questionnaires and undergo a long structured phone interview. Those who make the initial screening wear monitors to track their sleep patterns at home. Christopher Jones, a University of Utah neurologist and sleep scientist who oversees the recruiting, says there is one question that is more revealing than anything else: When people do have a chance to sleep longer, on weekends or vacation, do they still sleep only five or six hours a night? People who sleep more when they can are not true short sleepers, he says.

To date, Dr. Jones says he has identified only about 20 true short sleepers, and he says they share some fascinating characteristics. Not only are their circadian rhythms different from most people, so are their moods (very upbeat) and their metabolism (they're thinner than average, even though sleep deprivation usually raises the risk of obesity). They also seem to have a high tolerance for physical pain and psychological setbacks.

"They encounter obstacles, they just pick themselves up and try again," Dr. Jones says.

Some short sleepers say their sleep patterns go back to childhood and some see the same patterns starting in their own kids, such as giving up naps by age 2. As adults, they gravitate to different fields, but whatever they do, they do full bore, Dr. Jones says.

[More from WSJ.com: Using a Sleep Monitor to Track Healthy Sleep]

"Typically, at the end of a long, structured phone interview, they will admit that they've been texting and surfing the Internet and doing the crossword puzzle at the same time, all on less than six hours of sleep," says Dr. Jones. "There is some sort of psychological and physiological energy to them that we don't understand."

Drs. Jones and Fu stress that there is no genetic test for short sleeping. Ultimately, they expect to find that many different genes play a role, which may in turn reveal more about the complex systems that regulate sleep in humans.

Benjamin Franklin, Thomas Jefferson and Leonardo da Vinci were too busy to sleep much, according to historical accounts. Winston Churchill and Thomas Edison came close but they were also fond of taking naps, which may disqualify them as true short sleepers.

Nowadays, some short sleepers gravitate to fields like blogging, videogame design and social media, where their sleep habits come in handy. "If I could find a way to do it, I'd never sleep," says Dave Hatter, a software developer in Fort Wright, Ky. He typically sleeps just four to five hours a night, up from two to three hours a few years ago.

"It's crazy, but it works for me," says Eleanor Hoffman, an overnight administrator at Bellevue Hospital Center in New York who would rather spend afternoons playing mahjong with friends than sleep anymore than four hours. Sometimes she calls her cousin, Linda Cohen, in Pittsburgh about 4 a.m., since she knows she'll be wide awake as well -- just like they were as kids.

"I come to life about 11 at night," says Mrs. Cohen, who owns a chain of toy stores with her husband and gets up early in the morning with ease. "If I went to bed earlier, I'd feel like half my life was missing."

Are you a short sleeper? For more information on the genetic study, contact Dr. Jones at chris.jones@hsc.utah.edu

Managing your wealth in uncertain times

Managing personal savings and investments is a quandary for many people. Finding your way through the hurly-burley of financial markets can be unnerving. But letting your money just sit there isn’t an option either. Low savings rates increase pressure for higher returns elsewhere.

But will interest rates remain low for much longer? Is the dizzying high of the stock market for real? Is it foolhardy to invest bank savings in the market? As people get richer the task of managing and retaining wealth becomes more complex. So how do you approach this?

Investors should take a long term perspective. Over time, various types of investments of asset classes will earn different rates of returns and risk, or losses. A well-diversified portfolio of investments matched to a person’s requirements and risk tolerance can lay the foundation for long term financial security.

This is wealth management. Stock picking and market timing are not consistent sources of returns. Avoid the temptation to chase markets and seek professional investment advice if you want to build wealth.

With recent changes announced in the Budget proposals, it is likely that Sri Lankans will be able to gain global investment exposure from early 2011. This will pave the way for truly diversified portfolios. This is an exciting period for Sri Lankan investors. However, investing globally also takes expertise, to understand the risks and rewards of various asset classes. Seek professional advice to make sure you and your investments match.

Prudent wealth management

Wealth management is about matching an investor to a portfolio. It is not stock picking or investing wisely in real estate. A concentrated portfolio faces greater risk of loss than a well-diversified one.

Wealth management begins by understanding yourself, understanding markets and finding a balance between capital preservation and future growth in your investment portfolio. It is important to do this in the context of your ability to tolerate losses and other constraints. The most important aspect of investing is to match the investor with a portfolio that is well diversified through asset allocation and suits individual needs and wants.

Know your weaknesses

Humans are emotional and operate on rules of thumb. When it comes to investing, this can be a risk. There is a large body of literature called behavioural finance which focuses on exactly this. Some of the key findings are that our behavioural biases figure prominently in our investment decisions and can lead to poorly diversified portfolios, because we are over-confident of our ability to pick winning stocks, or we don’t sell falling stocks, because we don’t want to realise the loss. There are many other examples. The message is to be precise and rational when making investment decisions.

Investors are often motivated by fear or hope. Fearful investors desire capital preservation. Hopeful investors aim for high returns even if it means more risk. In reality, there needs to be an optimal balance between the two.

Investors will often hold very concentrated holdings in one ‘winning’ stock. While this may be a great way to riches, there is also a risk the company may fail. One off events can have serious impacts on a company. For example, the global financial crisis has eroded returns on many financial service companies, which seemed bullet-proof only a few years earlier.

Wealth management means managing risks to your wealth and maximising returns.

Know who you are first

Know your goals and constraints before you start investing. In professional wealth management, the starting point is an Investment Policy Statement (IPS). The IPS is a detailed document that lays out an investor’s financial goals, appetite for risk, ability to take risk and constraints.

Financial goals can be short or long term and are sometimes conflicting. They can range from retirement, sending children to a university abroad or an Alaska cruise. It is important to prioritise your goals and ensure that the investments match them. For example, make less risky investments for goals you cannot do without, but take more risk with the Alaska cruise.

Risk is often difficult to identify and is prone to misunderstanding. Risk is the probability of loss. With fixed deposits, the risk of losing your capital is low, but erosion of your purchasing power is high due to inflation as the upside is also limited. With equities, there is a risk that you could lose money, but there is also a good chance of higher returns than fixed deposits. Different assets and investments exhibit varying degrees of risk. Cash and bonds are typically low risk, while equities and private equity are higher risk.

The ability to take risk and appetite for risk can be different for different investors. An investor close to retirement may have a large enough nest-egg that he or she may wish to take more risk. However, there is little time before retirement to recover from a market fall, so their ability to take risk is low. Conversely, a young person should invest in higher risk assets, because they can easily recover from market falls. However, some young people may not want to take too much risk, because they are saving for a first home or a car.

It is important to also know your other constraints. For example, some may wish to bequeath to their children or donate to charities. This may mean a larger than otherwise retirement fund.

Match yourself to a portfolio

After a thorough self-examination in an IPS, the next step is to make investments. The investments should be such that they meet your return requirements and also your risk profile. The key driver for sustainable returns over the long term is asset allocation and diversification.

There is a large body of literature that shows the benefits of diversification and asset allocation. In fact asset allocation is the most important driver of long term returns. Fund manager selection or stock picking are much smaller contributors. There is some scope for tactical changes in the portfolio to match market conditions. For example, a professional wealth manager will reduce exposure to equities when markets are hot and increase exposure after markets have fallen sharply.

In constructing a portfolio, particularly for high net worth individuals, it is important to have a well-diversified portfolio. There is a dizzying array of investment products out there. The typical breakdown is between traditional and alternative assets. Traditional assets include equities and bonds, both local and global. But there is also a large range of investment options, including commodity Exchange traded Funds (ETFs) such as oil and gold, real estate investment trusts (REITs), currency ETFs and private equity.

Many assets move in opposite directions. Building a portfolio with a number of assets that respond to different economic and policy signals can reduce risk and smooth returns. This is why literature focuses so profoundly on diversification and asset allocation. A professional wealth manager will find a selection of assets that together maximise long term expected returns depending on the investor’s risk tolerance level.

Understand your portfolio

Once your portfolio is all set up, it is important to review it regularly. Make sure you understand your portfolio, whether it is aggressive or conservative and whether the asset allocation is really providing the diversification you need. Compare your returns against benchmarks, like bank deposit rates but not returns on a single stock. Once a year, reassess yourself and your portfolio – make sure you still belong together. If not, reflect the changes in your personal circumstances in your portfolio.

Managing wealth

Managing wealth is about making an informed and long term investment decision that matches your needs and risk profile with an investment portfolio. The key to long term returns is diversification through appropriate asset allocation.

The universe of investments is large and risks vary. Investors have conflicting goals and risk profiles. Aligning everything can be a complex task. Seek advice from a qualified investment professional if you can’t do it yourself.

Managing wealth is not about getting rich quick, or speculating on the stock market. Wealth management is a well considered journey to prosperity.

Ravi Abeysuriya is Chief Executive Officer at Heraymila Securities Ltd., a subsidiary of Heraymila Investments Ltd. (HIL) UAE. HIL directly manages over 260 million dollars of private and public investments on behalf of Abdulaziz Al Mashal’s family office.

SEC weighs new rules for private companies' stock

Market regulators consider easing rules for private companies that issue stock

DALLAS (AP) -- The Securities and Exchange Commission is considering whether to ease rules on private companies that issue shares.

Chairman Mary Schapiro said in a speech Friday that she has asked the SEC staff to review the rules. The changes might make it easier for companies such as Facebook and Twitter to raise money by issuing stock, without facing costly reporting requirements imposed on public companies.

Private companies can keep their finances secret if they have fewer than 500 shareholders. If they have more, they must provide details on their companies and finances.

The new rules might replace the process by which technology companies and other startups offer shares publicly through initial public offerings. Companies that have IPOs must disclose financial details about themselves.

Earlier this week, Schapiro sent a letter to Rep. Darrell Issa, R-Calif., notifying him of the review. Issa, who is chairman of the House Oversight and Government Reform Committee, had previously raised concerns with Schapiro that the current rules discourage investment and limit economic growth

The current rules are designed to stop insiders from trading shares using information that is not available publicly. In her letter to Issa, Schapiro said the agency must walk a fine line, protecting investors from insider trading while making it easier for private companies to raise money.

Companies "should not be overburdened by unnecessary or superfluous regulations," Schapiro said in the letter. "At the same time, all offerings must, of course, provide the necessary information and protections to give investors the confidence they need to invest in our markets," she said.

The staff review aims to develop ideas to reduce companies' cost of compliance without sacrificing investor protection, she said.

In addition to Facebook and Twitter, the rules would affect the daily discount site Groupon and Zynga, the maker the online game "FarmVille."

Many of these companies are startups in name only. They have thousands of employees and estimated billions of dollars in yearly revenue. But they have put off going public. That's partly because they already have access to capital from deep-pocketed investors and venture capitalists.

Going public also requires a time commitment from top executives. Facebook's 26-year-old CEO, Mark Zuckerberg, seems to prefer keeping his focus on the company's product development, rather than cashing out through an IPO or answering analysts' questions about earnings and revenue in quarterly conference calls.

Facebook has been trying to put off reaching the 500-shareholder threshold. For example, it has barred current employees from selling their shares. Nonetheless, it has indicated that it is likely to file its IPO plans by the end of April 2012.

Before the companies' IPOs, shares of privately held companies can be traded on private stock exchanges, such as SecondMarket, based in New York, and SharesPost, based in San Bruno, Calif. The shares are generally sold by former employees or early investors in these companies, and often there are more buyers than sellers. Only institutional investors or high net-worth individuals -- those worth more than $1 million -- can buy the shares.

Wagner reported from Washington. AP Technology Writer Barbara Ortutay in New York contributed to this report.

Stocks waver as government shutdown looms

Stocks waver as oil jumps above $112; government shutdown hangs over the market

NEW YORK (AP) -- A surge in oil and the threat of a government shutdown weighed on stocks Friday.

Investors kept one eye on Washington, where Republicans and Democrats were in the final day of talks to reach a budget agreement. Without a deal, the federal government is expected to stop all services that aren't considered essential. That means most economic reports would be suspended. Sales of debt would continue.

Benchmark crude oil jumped $2.49 to settle at $112.79 per barrel on the New York Mercantile Exchange. That's the highest price since Sept. 22, 2008.

Over the past two months, most stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.

The Dow Jones industrial average lost 29.44 points, or 0.2 percent, to close at 12,380.05. The Standard & Poor's 500 index slipped 5.34, or 0.4 percent, to 1,328.17. The Nasdaq composite lost 15.72, or 0.6 percent, to 2,780.42.

The Dow ended the week flat, while the S&P and Nasdaq lost 0.3 percent. All three indexes made gains in the previous two weeks.

Transportation companies fell. Delta Air Lines Inc. dropped 3.9 percent, and United Parcel Service Inc. lost 1 percent. Energy companies rose, leading the 10 industry groups within the S&P 500. Occidental Petroleum Corp. rose 2.6 percent, and Anadarko Petroleum Corp. rose 1.6 percent.

Todd Salamone, director of research at Schaeffer's Investment Research, said most stocks tend to rise along with oil prices over the long term. "The recent breakdown in the pattern has largely been due to fears of supply shocks," he said. "But the oil rally could also be attributed to a stronger world economy."

World markets rose broadly. The Euro Stoxx 50, an index of European blue chips, gained 0.7 percent. Japan's benchmark Nikkei index rose 1.9 percent.

Expedia Inc. rose 13 percent, the most in the S&P 500 index, after it said it would split off its TripAdvisor.com division.

More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.7 billion shares.

Government lets Google buy travel software company

Approval of travel software deal underscores broader antitrust concerns about Google

WASHINGTON (AP) -- Google Inc. won government clearance with restrictions Friday for its $700 million purchase of airline fare tracker ITA Software in a deal that will give the Internet search giant a key role in online travel.

Google promises to give consumers more choices and better ways to search for plane tickets as it incorporates ITA technology, which powers the reservation systems of most major U.S. airlines and many popular online fare-comparison services, including Kayak, TripAdvisor and Hotwire.

The company had to accept significant conditions, though, in a sign that federal antitrust officials are becoming more concerned about whether Google's enormous clout as a major gateway to the Internet has the potential to stifle competition broadly online.

As Google expands far beyond its core search business into specialized markets such as travel, companies operating in all corners of the Web -- and government regulators as far away as Europe -- are taking notice.

Rivals and regulators alike are worried that Google could use its control over the Internet's dominant search engine to extend its monopoly into travel and other markets by steering users to its own sites and services and burying links to rivals far down in its search results. Indeed, Google's search results already highlight some of its own specialized services, including mapping, video and finance.

Although Justice Department officials did not tackle that danger outright Friday, they laid the groundwork for a potential government investigation into manipulation of Internet search results. Google agreed to ongoing federal monitoring of its behavior to win government approval.

"They clearly decided that they want to keep an eye on Google," said Thomas Barnett, an attorney who represents Expedia Inc., which opposed the ITA deal in a coalition with other online travel services including Microsoft Corp.'s Bing, Travelocity, Kayak Software Corp. and Farelogix Inc. Expedia owns TripAdvisor and Hotwire services.

"The ability to use search dominance to exclude competitors is not unique to travel," added Barnett, who was head of the Justice Department's antitrust division when it threatened a lawsuit to block Google from entering into a search partnership with Yahoo Inc. in 2008.

The agreement with the Justice Department comes at a time of mounting government scrutiny of Google's behavior in Washington and beyond.

The European Commission and the Texas attorney general are looking into whether Google manipulates search results to extend its monopoly into other online businesses. The European investigation started after competitors -- U.K.-based price comparison site Foundem, French legal search engine ejustice.fr and Microsoft-owned shopping site Ciao -- complained that their services were being buried in Google searches. The Senate Judiciary Committee's antitrust subcommittee also is investigating whether Google gives its services favorable treatment in search results.

In addition, a federal judge last month rejected a proposed legal settlement that would have given Google the digital rights to millions of out-of-print books after determining that the agreement would have violated U.S. copyright laws and given Google's already-dominant search engine an unfair advantage over its rivals.

And just last week, the Federal Trade Commission announced a landmark agreement with Google to settle charges that it deceived users and violated its own privacy policy when it launched a social networking service called Buzz last year. The settlement requires Google to adopt a comprehensive privacy program and submit to independent audits of that program every other year for the next 20 years.

Eric Goldman, academic director of the High Tech Law Institute at the Santa Clara University School of Law in Silicon Valley, said the agreements with Justice and the FTC "collectively indicate that the U.S. government has more and more hooks into Google and is subjecting Google to greater oversight and reduced operational freedom."

Nonetheless, Friday's approval by the Justice Department makes ITA the latest major deal that Google has managed to clear with Washington. Other big purchases include the 2007 acquisition of Internet advertising network DoubleClick and last year's purchase of mobile ad service AdMob, both of which were approved by the FTC without any conditions.

Google has said it wants to use ITA to improve its search results for travel and doesn't plan to sell airline tickets or book other travel arrangements on its own site. Rather, ITA would enable the company to command higher ad rates from airlines, hotels, rental car agencies and other leisure services trying to reach travelers.

Google offered a hint about what could be coming in a blog post Friday. It suggested that by simply typing in "flights to somewhere sunny for under $500 in May" into Google, a user would get not just a set of links but also flight times, fares and a link to sites for buying the trip.

To win Justice Department clearance, Google agreed to license ITA's software to other companies on fair terms through 2016. And it would continue to invest in research and development of new products, which it would also have to license. Google had previously promised only to honor all of ITA's current contracts, which expire over the next few years, leaving ITA customers to worry that Google would keep its innovations for itself. Under the terms of the approval, any disputes would be subject to binding arbitration.

Google also agreed to establish a separation between ITA and other Google operations to ensure that it cannot misuse proprietary customer data or technology that resides on or runs through ITA servers.

But most significant, the government will monitor Google to ensure it does not engage in anticompetitive behavior, which could include manipulation of search results. The company will be subject to broad requirements to report to government officials on its online travel operations, including travel search and advertising. In addition, the government will establish a forum for complaints about Google's behavior. This could eventually pave the way for a broader investigation of Google by either Justice or the FTC.

The coalition of online travel services that had expressed concerns about the ITA acquisition praised the government conditions, calling them a "significant step in the right direction." Still, the group added in a statement that although "consumers won this round, but we must remain vigilant" to ensure that Google does not abuse its search monopoly.

Google says it understands that it will face more government scrutiny as it grows bigger. But the company argues that most of the accusations of anticompetitive behavior come not from users, who like its services, but from competitors that are not pleased with their search rankings. And that, the company, is not necessarily an antitrust problem.

"We built Google for users, not websites," the company said in a statement.

AP Airlines Writer Samantha Bomkamp in New York and Technology Writer Jordan Robertson in San Francisco contributed to this story.

NYSE gets a facelift, its future unknown

Landmark stock exchange building undergoing major renovation as bidding war escalates

NEW YORK (AP) -- What do you do when a cathedral of capitalism becomes antiquated? You turn it into New York's best party space.

The New York Stock Exchange has lost most of its famous shoulder-to-shoulder bustle in the age of computerized trading. So it's hoping its status as an icon of American finance will be a popular draw for cocktail receptions, analyst presentations and other festivities.

The exchange, where traders have nervously watched tickers and shouted orders for more than 100 years, is already available for some events. It wants to expand to 1,000 a year, double the number from three years ago.

Think black tie, not Black Monday.

"Planners are always looking for something that's different and unique, and there's only one stock exchange," said Ken Edwards, an executive at SmartSource Rentals who serves as the president of the New York chapter of a national meeting planners organization. "From an experience standpoint, that it's getting a facelift now is an absolute sign that they think that there's a recovery going on."

In addition to the trading floor, the exchange rents out updated meeting spaces to companies and charities. They include vaulted-ceiling dining rooms and a lounge with gilt-edged walls that used to be a club for stock traders. Company officials wouldn't say what they were spending on the renovations, which are expected to be finished by the end of next year.

It's a renovation borne out of necessity. Hosting meetings is a small part of the company's overall profits, but shows how far the building has come from its days as the center of the daily churn global capitalism. Since the last renovation of the building in 1995, the business model of the stock exchange has changed drastically.

Fewer traders than ever actually work on the floor. Steven Grasso, the director of institutional sales at Stuart Frankel & Co., compared stepping onto the floor of the New York Stock Exchange for the first time in 1994 to walking out of the dugout at Yankees Stadium. Traders stood shoulder to shoulder on the trading floor, screaming at each other and into telephones, their feet littered with discarded orders.

"Now, I can do more with my hand-held device than I ever could back then," he says, swinging his arms wide on the trading floor.

No other trader was within 10 feet of him.

There are a couple of strategic reasons for the renovation, which comes while the company's future is uncertain. NYSE Euronext Inc. agreed in February to be acquired by a German exchange operator. Last week, however, its longtime domestic rival Nasdaq OMX Group Inc. announced that it had teamed up with derivatives operator IntercontinentalExchange Inc. to offer a 19 percent higher bid. Both proposals are still pending.

NYSE Euronext gets more and more of its profits from companies that list their shares on the exchange or rent out its rooms. The company brought in $3.1 billion in revenue from trading last year, down from $3.5 billion two years ago and the second year of decline. That figure includes both the conventional trading of stocks but also the far more lucrative business of trading more exotic financial instruments like options and futures contracts. At the same time its stock listings business has grown from $395 million to $422 million.

The company now brings in nearly 25 percent less money for each 100 shares handled compared with two years ago. At the same time, the number of shares it handles are dwindling. A decade ago, the trading floor of the New York Stock Exchange accounted for roughly 80 percent of the volume of the blue chip stocks listed on it like General Electric Co. and Procter & Gamble Co. Now, thanks to regulatory changes and the rise of electronic exchanges such as the Kansas City-based BATS, the figure is closer to 25 percent.

The exchange building is seen as an asset that gives the company a premium brand. The prestige and media attention devoted to its trading floor have long allowed NYSE Euronext to charge companies more for listing their shares than its competitors. "The building itself is a part of our legacy and a big part of our (value)," said Joseph Mecane, an executive vice president at NYSE Euronext Inc. who oversees the listings of U.S. companies.

The building and trading floor are attractive for suitors like electronic-only exchange Nasdaq. "The trading floor is fantastic for marketing," said Michael Wong, an analyst at Morningstar. "Every company would like to ring the opening bell at the New York Stock Exchange, and that's an intangible that BATS or another competitor can't duplicate."

The last physical upgrades to the exchange building were completed in 1995. Since then, NYSE Euronext has devoted more of its resources to upgrading its technology. The company opened a 400,000 square feet data center 30 miles outside of Manhattan in suburban Mahwah, New Jersey last year. Its servers are now at the heart of the exchange, routing trade orders coming from humans and computer programs.

Lou Pastina, the executive vice president of operations, said that the renovations to the building are the next logical upgrade. Each of the 11 brown trading posts in the center of the trading floor will be replaced. New, wider versions will have blue countertops, additional screens, and brighter lighting. The wall of dark glass at the front of the building will be replaced with windows that bring natural light onto the trading floor. And in the middle of it all, a small television set will allow CNBC anchors to conduct interviews from the floor itself.

Traders say the upgrades are part of the evolution of the stock market. Better data screens will make day-to-day orders run more smoothly, while the wider trading booths will make it easier to communicate with other human traders during large market swings, said Richard Rosenblatt, the head of Rosenblatt Securities who has worked in the building for decades.

"When I started here, the telephone was considered technology," he said. "The market is always moving forward."

Kremlin rejects FSB proposal to ban Skype, Gmail

Kremlin rejects Russian security service proposal to ban Skype, Gmail, Hotmail

MOSCOW (AP) -- The Kremlin has rejected a proposal by a senior official of Russia's main domestic security agency who said authorities should ban Skype, Gmail and Hotmail because they are a major threat to national security.

The proposal made Friday by a senior official of the Federal Security Service, or FSB, followed cyber attacks on Russia's most popular blogging site and the website of a popular independent newspaper this week.

Commentators saw them as an attempt by authorities to tighten controls on communications before parliamentary elections in December and a presidential vote in March. The Internet has become the main source of independent news and commentary in Russia, where all nationwide television stations and most print media are under state control.

Alexander Andreyechkin, chief of the FSB's information security and special communications department, told a government meeting that encrypted communications providers such as Gmail, Hotmail and Skype "pose a large-scale threat to Russia's security" and proposed to ban them, Russian news agencies reported.

The Kremlin quickly responded that Andreyechkin had expressed his personal opinion and abused his authority by making the statement.

The FSB backtracked Saturday, saying it was not planning any measures to limit Skype and Gmail in Russia.

Communications Minister Igor Shchegolev also said in a statement Friday that his ministry has no plans to ban any Internet services.

But shortly after that, Dmitry Peskov, a spokesman for Prime Minister Vladimir Putin, came to Andreyechkin's defense, saying that what he said wasn't a private viewpoint, but a "well-reasoned position of his agency," according to Russian news agencies.

Putin, who has been accused by critics of rolling back Russia's democratic freedoms during two terms as president in 2000-08, has remained Russia's most powerful politician even after shifting into the premier's job.

Putin and President Dmitry Medvedev have said they would decide later which of them should run for president in the March 2012 election and wouldn't compete against each other, but Putin is widely expected to reclaim the presidency.

Putin, a former KGB lieutenant colonel and an one-time FSB chief, has surrounded himself with veterans of Soviet and Russian security structures. While FSB and other security agencies formally answer to the president, most commentators agree that Medvedev has little control over their activities.

Putin and Medvedev have recently disagreed over a number of domestic and foreign policy issues, but many observers see the differences as a stage-managed attempt to reach different constituencies. Putin's tough posture appeals to average Russians, while Medvedev's statements are intended to please the West and Russia's liberal circles.

Britney Spears this week becomes the first female solo artist in the history of Billboard's pop album chart to amass six #1 albums

Britney Spears this week becomes the first female solo artist in the history of Billboard's pop album chart to amass six #1 albums before her 30th birthday. Spears, 29, achieves the feat with her new album, Femme Fatale, which enters the chart at #1. Until this week, Mariah Carey was the youngest female solo artist to gather six #1 albums. She was 38 when she picked up her sixth #1 album, E=MC2, in 2008.

Only two male solo artists have notched six #1 albums before turning 30. Elvis Presley nabbed his sixth #1 album (1961's Something For Everybody) when he was just 26. Elton John landed his sixth (1975's Captain Fantastic And The Brown Dirt Cowboy) when he was 28.

Only four other female solo artists have amassed six or more #1 albums (no matter their age). Barbra Streisand leads the pack with nine, followed by Madonna with seven and Mariah Carey and Janet Jackson with six each.

Femme Fatale sold 276,000 copies in its first week, which is the second biggest one-week total so far in 2011. Only Adele's 21 sold more copies in one week (352,000). That said, this is the thinnest first-week total for a Spears studio album since her debut album, ....Baby One More Time, sold 121K in its first week in January 1999.

Femme Fatale (great title) sold far fewer copies in its first week than Spears' last album, Circus, which sold 505K copies in December 2008. But it sold nearly as many digital copies (113K for this album, compared to 118K for Circus), which means digital sales accounted for a much higher percentage this time out.

Five songs from Femme Fatale are listed on Hot Digital Songs, but "Hold It Against Me" isn't among them. How can that be? (The smash, which reached #1 on both the Hot 100 and Hot Digital Songs, was #66 on the digital chart last week.) It's the impact of returns due to customers' "Complete My Album" option. Enough fans took advantage of that clever gimmick that the song showed negative sales this week. (Whoever came up with that idea deserves a raise.)

Wiz Khalifa's Rolling Papers debuts at #2, with first-week sales of 197,000. This is the first time that two albums have debuted with sales north of 190K in the same week since Kanye West and Nicki Minaj scored in November. Wiz Khalifa's song "Black And Yellow" tops the 3 million mark in digital sales this week, but that was no guarantee that the album would sell well. There are dozens of examples of artists with giant singles whose albums sold modestly. You really just never know.

Adele's 21 holds at #3 in the U.S. (and may well return to #1 next week). It also holds at #1 in the U.K. for the 10th straight week. It's the first album by a female solo artist to spend 10 consecutive weeks at #1 since the U.K. album chart was introduced in 1956. The old record was held by Madonna's The Immaculate Collection, which held the top spot for nine straight weeks in 1990.

The Official Charts Co., which monitors U.K. sales, notes that 21 sold 250,000 copies in the U.K. this week. That's its biggest weekly total to date, which suggests that the album hasn't run its course at #1. If it spends one more week on top, it will tie Alanis Morissette's Jagged Little Pill and Shania Twain's Come On Over for the longest run at #1 (continuous or not) by a female solo artist. Check back next week and see if Adele does it.

Chris Brown's F.A.M.E. drops from #1 to #4, but here's a stat that may surprise you. The album has sold more copies in its first two weeks (362,000) than Brown's last album, Graffiti, has in its entire run (342,000). Graffiti was released just 10 months after Brown's assault of then-girlfriend Rihanna. Memories fade. Fans forgive.

Radiohead's The King Of Limbs debuts at #6, with sales of 69K copies. The tally consists of 46K CDs and 23K digital copies. The album's previous digital sales, through the band's website, aren't counted in the album's "release-to-date" total.

Snoop Dogg's Doggumentary debuts at #8. It's Snoop's first album since he landed his biggest pop hit, Katy Perry's "California Gurls," which topped the Hot 100 for six weeks last year. This isn't the first Mr. Dogg has played with his stage name in an album title, witness Doggy Style, Tha Doggfather and No Limit Top Dogg.

Two contemporary gospel albums appear in this week's top 10 (perhaps to help us atone for all the "F word" hits). Kirk Franklin's Hello Fear drops from #5 to #9 in its second week. Mary Mary's Something Big bows at #10. It's the third top 10 album for both acts.

Adele and Justin Bieber this week become the first artists to sell 1 million or more albums in the U.S. in 2011 (combining all their releases). Adele has sold 1,070,000 albums since the first of the year. Bieber has sold 1,053,000. These artists don't otherwise have much in common, but that's pop music for you.

My headline for Chart Watch: Songs will be "And Then There Were Four." It has something to do with "E.T." by Katy Perry featuring Kanye West, which tops Hot Digital Songs for the fourth straight week and will probably lead the Hot 100 for the second week. But what does it mean? Check back later today and find out.

Here's the low-down on this week's top 10 albums.

1. Britney Spears, Femme Fatale, 276,000. This new entry is Spears' sixth #1 album; her eighth to make the top 10. Five songs from the album are listed on Hot Digital Songs, topped by "Till The World Ends," which jumps from #18 to #15.

2. Wiz Khalifa, Rolling Papers, 197,000. This new entry is the rapper's third album, but his first for a major label. Seven songs from the album are listed on Hot Digital Songs, topped by "No Sleep," which slips from #2 to #6.

3. Adele, 21, 94,000. The former #1 album holds at #3 in its sixth week on the chart. It has been in the top five the entire time. Three songs from the album are listed on Hot Digital Songs, topped by "Rolling In The Deep," which jumps from #11 to #9.

4. Chris Brown, F.A.M.E., 91,000. The former #1 album drops from #1 to #4 in its second week. Five songs from the album are listed on Hot Digital Songs, topped by "Look At Me Now" (featuring Lil Wayne and Busta Rhymes), which jumps from #8 to #5.

5. Various Artists, Songs For Japan, 71,000. The digital-only compilation jumps from #6 to #5 in its second week; its first full week of sales. The arrival of the CD this week will help push it to #2 next week.

6. Radiohead, The King Of Limbs, 69,000. This new entry is the band's fifth top 10 album.

7. Jennifer Hudson, I Remember Me, 56,000. The album drops from #2 to #7 in its second week. "Where You At" drops from #77 to #149 on Hot Digital Songs.

8. Snoop Dogg, Doggumentary, 50,000. This new entry is Snoop's ninth top 10 album. He scored his first, Doggy Style, in November 1993.

9. Kirk Franklin, Hello Fear, 46,000. The album drops from #5 to #9 in its second week.

10. Mary Mary, Something Big, 42,000. This new entry is the sister duo's third top 10 album, following Mary Mary (#8 in 2005) and The Sound (#7 in 2008).

Five albums drop out of the top 10 this week. The Strokes' Angles drops from #4 to #18, Panic! At The Disco's Vices & Virtues dives from #7 to #32, Mumford & Sons' Sigh No More drops from #8 to #11, Bobby V's Fly On The Wall plummets from #9 to #60, and Lupe Fiasco's Lasers drops from #10 to #16.

The Sucker Punch soundtrack jumps from #31 to #22. It's the week's #1 soundtrack.

Jason Aldean's My Kinda Party jumps from #26 to #23. It's #1 on Top Country Albums for the fourth week. It's the first album by a male solo artist to top the country chart that long since Brad Paisley's 5th Gear in the summer of 2007.

The week's top TV soundtrack is Grey's Anatomy: The Music Event, which debuts at #24. The album features the cast performing such songs as Snow Patrol's "Chasing Cars" and The Fray's "How To Save A Life." (The cast's renditions of those songs enter Hot Digital Songs this week, though in each case, the original hit debuts a little higher.) This is the third album from Grey's Anatomy to make the top 30. Two albums of music that was featured on the show made the top 20 in 2006-2007, when Grey's was at its buzzy peak.

Two volumes of E-40's Revenue Retrievin' debut in the top 50. Graveyard Shift bows at #40. Overtime Shift opens at #42. The albums were just 200 units apart in sales, which suggests that most fans bought both.

Elton John's 2007 compilation Rocket Man-Number Ones re-enters the chart at #45 in the wake of American Idol's "Elton John Week." (Elton and Leon Russell also appeared on Saturday Night Live.) Rocket Man sold 13,000 copies this week. American Idol had 24.2 million viewers, which means about one in 2,000 Idol viewers bought the album. (That's the difference between watching TV for free and buying something.)

Elton's album is #1 for the first time on Top Catalog Albums. It's the first album with the magic phrase Number Ones in (or as) its title to top the catalog chart since Michael Jackson's Number Ones led the list for 28 weeks in 2009-2010. George Strait's 50 Number One Hits topped the catalog chart in May 2009. The Beatles' 1 and Elvis' Elv!s: 30 #1 Hits also topped the catalog chart.

Four Elton songs re-enter Hot Digital Songs this week. Details in Chart Watch: Songs.

A 25th anniversary concert rendition of Les Miserables is #1 on Top Music Videos. The concert features such notables as Nick Jonas (of Jonas Brothers) and Lea Salonga (the voice of Disney's Mulan and Princess Jasmine). A "10th Anniversary Concert" of the hit musical topped the Music Video chart for 22 weeks from October 1996 to March 1997.

Hop was #1 at the box-office over the weekend.

Coming Attractions: Hollywood Undead's American Tragedy is expected to be next week's top new entry, with first-week sales in the 60K range. Also due: Asking Alexandra's Reckless & Relentless, Robbie Robertson's How To Become Clairvoyant, Daft Punk's Tron: Legacy Reconstructed, Jim Jones' Capo, Mint Condition's 7 and a reissue of Rush's 1981 album Moving Pictures.

ECB raises rates, faces two-speed recovery

FRANKFURT, Germany (AP) -- The European Central Bank raised its key interest rate Thursday for the first time in nearly three years as it signaled its determination to fight inflation, even as some euro member countries still struggle with debt crises and high unemployment.

The quarter-point increase was widely expected and won't by itself hold back growth much. But Europe's increasingly two-speed recovery will be a challenge for the bank as it decides how high rates should go in coming months.

A day after Portugal finally accepted defeat in its battle to avoid a financial bailout, the ECB raised its refinancing rate to 1.25 percent from a record low of 1 percent, where it had been since May 2009. The refinancing rate determines the cost of central bank credit to commercial banks, and affects other short-term interest rates as well.

Europe's two-speed recovery presents the bank with a difficult challenge in the months ahead, as it seeks to return interest rates to more normal levels from the emergency lows that supported the economy in the wake of the global financial crisis. Higher rates help control inflation but can weigh on growth.

On the one side, Portugal is set to join Greece and Ireland in taking a rescue package and Spain is struggling with a 20 percent unemployment rate. On the other, countries like Germany are enjoying robust growth, booming exports and falling unemployment; leading economic institutes are predicting that the jobless rate will average only 6.5 percent next year, and that's including the former East Germany's lagging economy.

Some parts of southern Germany have unemployment rates at 4 percent or lower, and skill-intensive jobs are going begging. Those numbers indicate that some parts of Europe's biggest economy maybe on the verge of overheating and that's a recipe for higher prices.

Because the European Central Bank's mission is to control inflation, it is raising rates, even though that will put more pressure on hard-hit consumers with mortgages and the collapsed real estate markets in the so-called peripheral countries.

It was clear from bank President Jean-Claude Trichet's comments following the rate decision that the anti-inflation message was most important now, and that it was up to countries on the slow track to go through the painful process of reducing debt.

Trichet said keeping inflation in check would benefit all members. The key for countries in trouble was to stick to the requirements of their bailout agreements with the European Union and the International Monetary Fund.

"We have a number of countries which have to correct their situation, particularly on the fiscal side, not only the fiscal side, but economic policy in general," he said. "Plans are in place and they have to apply the plan."

ING economist Carsten Brzeski said higher rates risked increasing the growth divide as consumers paid more to borrow.

"Higher ECB rates will neither choke off the recovery in the periphery nor will they weigh on public finances but they will not make life of the eurozone periphery easier," he said. "The start of the normalization cycle will increase, not diminish, divergence within the eurozone."

The ECB is worried that inflation, which hit 2.6 percent in March, will remain stuck above its target of "close to, but just under 2 percent." Critics of a rate hike have noted that inflation has been mainly driven by higher oil and food prices, largely external factors the ECB cannot control through its policies.

Trichet said the bank was determined to move pre-emptively to keep higher prices from causing a spiral effect in which higher inflation expectations cause wages to go up, in turn boosting consumer prices further.

The ECB is charting a different course from the U.S. Federal Reserve, which has not yet signaled readiness to begin raising rates from the current rock-bottom 0-0.25 percent.

The Bank of England's monetary policy committee left rates untouched at 0.5 percent at its meeting Thursday even though inflation in Britain is running at 4.4 percent.

Trichet did not commit to a series of increases, but left the door open for what analysts think will be several more by the end of the year. "We did not decide that it was the first of a series of rate increase," he said, adding that each month "we always do what is necessary to deliver price stability."

He did not, however, express the need for "strong vigilance" against inflation -- a term regarded as a signal to markets that rates are going up the next month.

Instead, he said the bank would "monitor very closely" the risks of rising prices, which he said "remain on the upside" -- phrasing that seemed to leave the bank room to pause for a month or two before acting again.

Economist Marchel Alexandrovich at Jeffries International Limited said that the ECB's policy was clearly aimed at the overall economy for now: "With the periphery of Spain, Greece, Portugal and Ireland combining for less than 20 percent of euro area GDP, clearly the ECB's focus is predominantly elsewhere."

He cautioned however that as rates go higher, the impact would be felt more strongly by consumers paying down mortgages in Portugal, Ireland, Spain and Italy than in Germany, France, Belgium and the Netherlands, where fixed-rate mortgages are the norm.

Business borrowing costs would also hit Spain, Portugal and Ireland harder than Germany and France because of higher levels of corporate debt.

"One more reason why the ECB would be wise to tread very carefully in the months ahead," Alexandrovich said.

Stocks fall after another earthquake hits Japan

NEW YORK (AP) -- Stocks fell Thursday after a 7.4-magnitude earthquake struck off the coast of northern Japan. The losses moderated after a tsunami warning was lifted.

The Dow Jones industrial average fell as many as 96 points in morning trading before recovering most of its losses. Japan's stock market had already closed by the time the earthquake struck.

The quake rattled investors, partly since it struck near the same area as the massive earthquake that triggered devastating tsunami on March 11. Stock indexes bounced back after the impact of the quake turned out to be less than initially feared.

The Dow was down 37 points, or 0.3 percent, at 12,388 in afternoon trading. The broader S&P 500 fell 3, or 0.2 percent, to 1,333. The Nasdaq composite index fell 2, or 0.1 percent, to 2,798. All three indexes had been higher in earlier trading.

In the U.S., economic news was mostly positive. The Commerce Department said 382,000 people applied for unemployment for the first time last week. That was the third drop in four weeks. The decline in applications suggests layoffs are slowing.

Major retailers also reported better-than-expected sales for March at stores that have been open at least a year. Analysts had predicted declines because of cold weather and higher gas prices.

Costco Wholesale Corp. rose 4 percent after reporting a 13 percent gain in sales. Limited Brands Inc. rose 1 percent after it said its revenue increased 14 percent because of strong sales at its Victoria's Secret stores. Nordstrom Inc. and Macy's Inc. also rose about 1 percent.

Bed Bath & Beyond Inc. rose 11 percent, the most of any stock in the Standard & Poor's 500 index. The home furnishings retailer posted strong results late Wednesday and said it expected earnings to rise 10 percent to 15 percent this year.

Constellation Brands Inc. rose 6 percent. The maker of Robert Mondavi wine and Svedka vodka recovered from a loss in the same quarter a year ago and reported a double-digit increase in wine sales in North America.

Bond prices rose, sending their yields lower. The yield on the 10-year Treasury note fell to 3.54 percent from 3.55 percent late Wednesday.

The European Central Bank raised its main interest rate by a quarter point to 1.25 percent, a day after Portugal asked for a bailout. The Bank of England kept its main interest rate unchanged at 0.5 percent.

LISBON, Portugal (AP) -- Political and economic uncertainty clouded Portugal's future Thursday as it remained unclear who would negotiate the terms of its requested bailout, how much it would be and when it would arrive.

A day after the caretaker government asked for rescue loans from its fellow EU nations, bank stocks that have suffered recently led a rally on the Lisbon stock exchange Thursday. But the yield on Portugal's 10-year bonds barely budged from the unsustainable high of 8.5 percent as investors remained wary of the debt-heavy country's fate.

It was uncertain how much Portugal might receive in a bailout, how soon it could get the cash and -- crucially -- under what terms, as rescue packages come with fiscal policy strings attached and have to be paid back sooner or later.

The country is being run by a caretaker government ahead of a June election, making it hard for foreign negotiators to know who they'll be dealing with for the next four years. Added to that, Portugal is forecast to enter a double-dip recession this year, denying it the growth it needs to pull out of its debt hole. And trade unions, angrily blaming the bailout on bankers, promised more strikes and street demonstrations.

Cabinet Minister Pedro Silva Pereira said Portugal would send its formal request for a bailout to European authorities later Thursday. A delegation from the European Commission and the European Central Bank is expected in Lisbon "very soon" to begin negotiating the terms of a financial rescue package, including how much Portugal might need, he said without elaborating.

Analysts predict Portugal will need up to euro80 billion ($114 billion) -- equivalent to about half its annual gross domestic product.

The country's European partners have long pressed it to accept help, and some were angry that Lisbon left the bailout request so late.

"There is so much obscurity in this and there are so many things that have been handled badly, so first these things have to be sorted out," Sweden's Finance Minster Anders Borg said.

"In this difficult situation, we will end up with complex and arduous solutions, because it isn't possible to create a complete program if you don't have a government and instead it will be about forming different bridge solutions," Borg told reporters in Stockholm. "This means they have put the surrounding world in a very awkward situation."

But German Foreign Minister Guido Westerwelle welcomed Portugal's decision. "This will, we think, tend to calm the situation and it is a contribution to containing the problems and minimizing the danger of contagion," Westerwelle said in a speech in Berlin.

Portugal is already one of the eurozone's poorest countries, and a steep rise in its borrowing costs over the past year has made its financial situation unsustainable. Two rating agencies downgraded its bonds to one notch above junk level in recent days.

That deterioration, which raised the specter of bankruptcy, forced Portugal to announce late Wednesday it is following Greece and Ireland into asking for aid from Europe's bailout reserve and the International Monetary Fund.

Jeremy Batstone-Carr, an analyst at Charles Stanley & Co., said the risk remains that Portugal could soon default.

"The difference is that unlike Greece and Ireland, Portugal is, to all intents and purposes, already bankrupt and has no government to manage either the loan or the austerity program. This takes the peripheral eurozone crisis to another level," he said.

The European Commission, eager to stamp out any sign of a flare-up in the continent's debt woes, said it would act swiftly on any bailout request from Portugal. RBS European Economics said it expected Lisbon to receive a first lump sum by the end of May.

Authorities need to move quickly. Portugal has to repay a euro4.5 billion ($6.4 billion) loan that falls due next week, though analysts expect it can meet that. Then it must come up with almost euro7 billion to roll over a bond and make interest payments in June. Meanwhile, it still needs to collect funds to keep the country running.

There was good news, though, for Portuguese banks which have taken the brunt of investor fears and have had to rely heavily on liquidity assistance from the ECB. Their stock prices surged by up to 5 percent, helping the main Lisbon index rise 1.2 percent and making it one of Europe's best performers.

The outgoing government has battled for 12 months to avert a bailout, introducing tax hikes and cuts in pay and welfare benefits to restore market faith in its prospects. It quit two weeks ago after opposition parties rejected a fresh set of spending cuts.

The main opposition Social Democratic Party has said it supports budget cuts. Its leader Pedro Passos Coelho said he will back a request for "a minimum level of help" ahead of a full bailout, but did not elaborate.

The austerity measures, coupled with a decade of flimsy growth and rising debts, have squeezed domestic spending and worsened Portugal's dire financial condition. Bailout terms would likely tighten those measures, lowering living standards and raising unemployment, which last year stood at a record 11.2 percent.

Marc Ostwald, a market strategist at Monument Securities in London, said it remained to be seen whether the goals of a rescue package are achievable for Portugal.

He said "the more pertinent issue is whether the new government will have the stomach to implement long overdue reforms, which will clearly meet with much public resistance."

Recent policies to reduce the country's debt load have triggered a series protests and strikes, and the civil servants' union announced a walkout on May 6.

Some 340,000 Portuguese are on the minimum monthly wage of euro485 before tax, and 1.4 million take home less than euro600 a month, making further cuts unpalatable for many.

Malin Rising in Stockholm and Geir Moulson in Berlin contributed to this report.

Despite aid request, Portugal's outlook uncertain

Portuguese banks get relief from bailout request but uncertainty over future remains high