(Reuters) – Darden Restaurants Inc (DRI.N) posted a 6 percent drop in quarterly earnings, partly hurt by the hurricane Irene, but reaffirmed its full-year earnings outlook.

The company said Irene hurt sales at established Red Lobster, Olive Garden and LongHorn Steakhouse restaurants and estimated the storm reduced quarterly earnings by about 2 cents per share.

Orlando, Florida-based Darden earned $106.8 million for the first quarter, or 78 cents from continuing operations.

Sales were 1.94 billion, up about 7.5 percent.

Darden also said it sees full-year earnings per share growth from continuing operations toward the lower end of its previously announced range of 12 to 15 percent.

Shares of the company closed at $46.98 Tuesday on the New York Stock Exchange.

(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Sayantani Ghosh)

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NEW YORK (Reuters) – Stock index futures pointed to a slightly higher open on Wednesday as investors remained cautiously optimistic about progress on plans to lessen the euro zone’s debt woes.

International auditors headed to Greece to scrutinize new austerity measures they must endorse for Athens to get the next tranche of aid.

German Chancellor Angela Merkel suggested that parts of a planned new 109-billion-euro ($148.6 billion) rescue for the debt-laden country could be reopened, depending on the outcome of the audit.

Recent efforts to solidify a euro zone rescue fund and alleviate the region’s sovereign debt crisis lifted stocks on Tuesday for a third consecutive session and came after four straight days of losses for the benchmark S&P 500.

“At least they are doing something and for the moment it has taken away the fear of a collapse for now,” said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

“It is certainly interesting that we had that nice rally yesterday and gave it all back late afternoon but it just shows how nervous the markets are and it is tough to commit. We will probably continue like this until there is a little more clarity and who knows when that comes.”

Market volatility could remain as traders react to European headlines.

Analysts also said equities would be supported by quarter-end “window dressing,” when portfolio managers drop underperforming stocks and buy outperformers.

S&P 500 futures rose 3.7 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures gained 35 points, and Nasdaq 100 futures added 4.5 points.

In the latest economic data, new orders for long-lasting U.S. manufactured goods slipped in August on weak demand for motor vehicles, but a rebound in a gauge of business spending suggested the economy would avoid another recession.

In the latest quarterly earnings reports, spicemaker McCormick & Co Inc posted a profit that topped estimates, while discount chain Family Dollar Stores Inc recorded higher quarterly income.

Darden Restaurants Inc, parent of the Red Lobster and Olive Garden chains, posted a 6 percent drop in earnings.

Family Dollar shares slid 8 percent to $53.75 and Darden ticked up 2 cents to $47 in premarket trade.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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ATHENS (Reuters) – Greece’s lenders are sending a team to Athens to inspect a government austerity plan they want implemented in exchange for aid, while Germany suggested a new bailout may have to be renegotiated.

Facing a wave of strikes and protests, Greece’s Socialist government is accelerating its debt strategy to meet the terms of an International Monetary Fund and European Union rescue deal so it can receive a new loan next month and avoid bankruptcy.

The “troika” team of inspectors, which had threatened to cut off aid if Athens did not move faster, will begin talks on Thursday on a plan demanded by lenders to deepen budget cuts and raise taxes, which has set off protests not seen since June when riot police fought running battles with activists.

“I can confirm the Eurogroup (of euro zone ministers) will hold an additional meeting as soon as possible, still in October, to discuss the situation of Greece and consider the disbursement of the next tranche,” a European Commission spokesman said in Brussels, announcing the troika’s return.

German Chancellor Angela Merkel suggested that parts of a planned new 109-billion-euro ($148.6 billion) rescue for the debt-laden country could be reopened, depending on the outcome of the troika’s audit.

“We have to wait and see what the troika … finds and what it will tell us (whether) we will have to renegotiate or not,” she told Greek state television NET, without elaborating.

Several hundred activists affiliated with the Greek Communists converged on the finance ministry on Wednesday waving a banner saying “We won’t pay!.” They planned to burn bills for a new one-off income tax introduced this summer, while Athens and other parts of the country were hit by transport strikes.

If deemed adequate by the inspectors, the new austerity drive will secure an 8-billion-euro loan Greece needs to pay bills and salaries in October and bring it closer to starting a second bailout agreed in July.

As a condition of the visit and to resolve the row with the lenders, the Greek government had promised to send a written assurance outlining its new plan to meet its bailout targets. Its contents have not been made public.

Germany has repeatedly said negotiations about the details of the second rescue deal can begin only when the troika says Greece has qualified to receive the tranche expected in October, the sixth under a first bailout agreed in 2010.

At the same time, leaders from around the world have urged euro zone capitals to end a tortuous debate and create a safety net big enough to prevent Greece’s problems from spreading to other euro members and triggering a fresh global downturn.

DEBT SWAP DEBATE DEEPENS

The second bailout aims to ease Greece’s debt burden by imposing a 21 percent loss on private Greek bondholders.

After intensifying debate among economists and policymakers that only a 50 percent loss would make the country’s debt viable, more investors have signed up to the bond exchange plan, Greek financial daily Naftemporiki reported.

Citing an unidentified finance ministry official, it said Greece’s weeks-long struggle to lure private bondholders into the rescue plan had ended with it reaching the 90 percent participation target.

The finance ministry declined to comment on the report.

There is no agreement yet among euro zone governments on whether a renegotiation is needed, including more pain for Greece’s bank creditors, or on a U.S.-sponsored plan to leverage the bloc’s rescue fund to give it more firepower.

Germany’s Bundestag (lower house) will vote on Thursday on widening the scope of the European Financial Stability Facility bailout fund, as agreed by the EU leaders on July 21.

Merkel faces a revolt within her conservative camp and may have to rely on support from the opposition Social Democrats and Greens to get the measure approved, damaging her authority.

STRIKES GRIP GREECE

Late on Tuesday, police dispersed about 1,000 anti-austerity protesters with tear gas in Athens’ Syntagma Square, the epicenter of anti-austerity protests.

Taxi drivers, bus and tram operators staged strikes on Wednesday, causing long traffic jams leading into the ancient city center and forcing luggage-hauling tourists scrambling to find rides to the airport.

Other trades ranging from craftsmen, printers and tax officials also staged stoppages and activists planned marches on

parliament and the port of Piraeus later in the day.

“I’ve been trying to find a job for a year now and it’s impossible,” said Maria Kappa, a graduate of the School of Philosophy in Athens. “I don’t see the rich people hurt by this austerity, it’s always the poor who have to pay.”

Lawmakers opened the way to the troika visit on Tuesday by passing a property tax bill. That piles the pressure on Greeks suffering from several waves of belt-tightening and deepens an economic downturn heading into its fourth year.

Prime Minister George Papandreou’s 154 Socialist deputies forced the measure through in the 300-seat parliament.

In the accelerated strategy, the government will cut the 730,000 public workforce by a fifth, reduce the public wage bill by 20 percent, as well as lower overall pensions by 4 percent in addition to a 10 percent cut already agreed in previous plans.

It will also now extend the new real estate tax until 2014, two years longer than originally planned, after the troika judged Greece’s estimate that it would raise 2 billion euros a year to be too high.

(Writing by Michael Winfrey; Editing by Peter Millership/Mike Peacock)

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NEW YORK (Reuters) – A federal judge narrowed a $1 billion lawsuit against owners of the New York Mets baseball team by the trustee seeking money for Bernard Madoff’s victims, and cast skepticism on how much might ultimately be recovered.

Tuesday’s ruling by U.S. District Judge Jed Rakoff in Manhattan could help the trustee, Irving Picard, force Mets owners to turn over their alleged $300 million of “fictitious profits” from investing with Bernard L. Madoff Investment Securities LLC, where they were once customers.

But he said Picard could pursue $700 million of principal from the owners, including Fred Wilpon and Saul Katz, only by proving they “willfully blinded themselves” to “red flags” of Madoff’s epic Ponzi scheme, reflecting a lack of good faith.

Team owners had sought to dismiss the lawsuit, claiming they did not suspect Madoff was running a Ponzi scheme, and never bought insurance to protect themselves against fraud.

The lawsuit has threatened the owners’ hold on the Mets, which are losing tens of millions of dollars a year, prompting them to try selling part of the Major League Baseball team.

Talks to secure a $200 million minority investment from Greenlight Capital hedge fund manager David Einhorn broke down three weeks ago.

A spokeswoman for Picard said the trustee had no comment pending a “thorough evaluation” of the opinion. Lawyers for the Mets owners were not available for comment.

Mario Cuomo, the former New York governor mediating the dispute, also had no immediate comment.

Rakoff dismissed nine of 11 counts in what he facetiously called Picard’s “short and plain” 373-page complaint against Wilpon, Katz and others at their firm Sterling Equities.

One surviving claim alleges actual fraud, and the other would subordinate the defendants’ claims against the Madoff firm’s bankruptcy estate to other creditor claims. Among the dismissed claims were some alleging “constructive fraud.”

Rakoff ordered both sides to appear at a hearing Wednesday to discuss what is next in the case. He indicated last month that a trial could begin in March.

HARD TO INVESTIGATE

But in his ruling, Rakoff said the trustee could face an uphill fight to show that Wilpon and Katz failed to act in good faith, and intentionally turned a blind eye to Madoff’s fraud.

“If, simply confronted with suspicious circumstances, (an investor) fails to launch an investigation of his broker’s internal practices — and how could he do so anyway? — his lack of due diligence cannot be equated with a lack of good faith,” the judge wrote.

Summarizing Picard’s amended complaint filed on March 18, Rakoff said the trustee sought to hold Mets owners responsible for their alleged pursuit of “substantial short-term profits,” even as they tried to curb risk by considering fraud insurance and creating their own hedge fund to limit exposure.

“Although the defendants vehemently deny these accusations,” Rakoff wrote, “the amended complaint, while less than overwhelming in this regard, pleads sufficient allegations to survive a motion to dismiss so far as this claim of willful blindness is concerned.”

Picard has filed more than 1,050 lawsuits on behalf of former Madoff customers seeking in excess of $94 billion.

Rakoff oversees the largest of these lawsuits, a $58.8 billion case against defendants including Bank Medici AG founder Sonja Kohn and Italy’s UniCredit SpA.

Another judge is reviewing Picard’s $19.9 billion case against JPMorgan Chase & Co, once Madoff’s main bank.

Madoff, 73, is serving a 150-year prison term. He pleaded guilty in March 2009 to running his Ponzi scheme.

The case is Picard v. Katz et al, U.S. District Court, Southern District of New York, No. 11-03605.

(Reporting by Grant McCool and Jonathan Stempel in New York; Editing by Robert MacMillan, Bernard Orr)

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LONDON (Reuters) – Former BP (BP.L) boss Tony Hayward is considering whether to step down from the board of Russian oil joint venture TNK-BP but has yet to inform the British oil company of any decision, a spokesman for the company said.

The announcement followed Hayward’s return to the oil business last week, when his investment vehicle Vallares (VLRS.L) announced an agreement to acquire Turkish explorer Genel Energy.

The enlarged group will likely be big enough to enter the FTSE 100 index of blue-chip London-listed companies.

A spokesman for BP, responding to a report in the Sunday Telegraph, said it had been aware for some time that Hayward may be considering his future on the board of TNK-BP. The spokesman said were Hayward to leave the board of the joint venture, he would be replaced by another BP-nominated director.

In an interview with the Sunday Telegraph, Hayward said he did not have any plans to step down from either TNK-BP (TNBP.MM) or the board of Glencore (GLEN.L). However, the paper quoted people close to Hayward as saying he was expected to inform BP of his intention in the coming weeks.

The paper said Hayward did not believe he would have the time to devote to TNK-BP.

Hayward quit as BP chief executive after its blown-out Macondo well caused the worst ever offshore oil spill in the United States. As part of the crisis, Hayward was vilified by much of the American press for a string of comments, including when he said he wanted to get his “life back.”

The news comes as Britain’s prime minister, David Cameron, travels to Russia for a visit focused on business and trade. Cameron will travel with more than 20 business executives, including BP chief executive Bob Dudley.

BP has been engaged in a spat with its partners in TNK-BP, who have alleged billions of losses due to BP’s failed plan to establish a parallel joint venture with state-controlled Rosneft.

Last week, black-clad special forces raided BP’s Moscow offices and searched for documents related to the failed Rosneft deal.

(Reporting by Kate Holton; Editing by Dan Lalor)

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THESSALONIKI, Greece (Reuters) – Greek Prime Minister George Papandreou said on Saturday he would do whatever it takes to rescue his country from bankruptcy and stay in the euro zone, as doubts in Europe grew over its membership in the bloc.

Sending a message to international lenders increasingly frustrated with delays in reforms and missed fiscal targets, Papandreou said his government was determined to take the difficult decisions and make the sacrifices needed.

“We decided to fight the battle to avoid a disaster for the country and its people and to stay in the euro,” he said in his annual economic speech at a trade fair in the northern city of Thessaloniki. “Any delay and wavering is dangerous for the country.”

Anger at the country’s failure to meet fiscal targets under its EU/IMF bailout has reached boiling point, prompting senior euro zone policymakers to cast doubt on its ability to avoid default or even its membership in the single currency.

The embattled premier, who was heckled by angry labor unions on Friday, said he would redouble efforts to fight endemic tax evasion, a main hurdle in achieving fiscal targets.

His Finance Minister Evangelos Venizelos said earlier Greece may even take additional fiscal measures in 2011 to make up for budget deficit slippage that threatens the disbursement of an 8 billion euro EU/IMF loan tranche.

Venizelos pledged to further cut the civil service payroll, push privatizations and deepen labor market reforms.

Civil servants, who have seen about a fifth of their wages slashed, will suffer more after the government decided to put thousands of them in a so-called “Labor Reserve,” in which they will draw 60 percent of their salary and possibly face dismissal if they find no other public sector job within a year.

But austerity measures are throwing the economy into an ever deeper recession. GDP will shrink by more than 5 percent this year, Venizelos said, topping earlier projections in its third straight year of contraction.

PUBLIC DISCONTENT

More than 20,000 protesters gathered in the northern city to mark Papandreou’s speech. Police fired tear gas at youths smashing shop windows and setting fires on the main shopping streets. Police said 106 people were detained.

Demonstrations were organized by civil servants, students, taxi drivers and even football fans. Some restaurants in the city shut down to protest a VAT hike that took effect earlier this month.

“We are suffering an unprecedented tax raid … we deeply worry about tomorrow,” George Kasimatis, chairman of Greece’s Chamber of Commerce Federation, told Venizelos during the conference.

About 7,000 police were patrolling the city’s streets, cordoning off the fairgrounds. Ministers canceled plans for their usual walkabouts in the city and Papandreou avoided touring the fair in the morning, as prime ministers traditionally do on the event’s first day.

While vowing to keep its side of the bargain, the Greek government sharply criticized its EU partners for delaying ratification of a second, 109-billion-euro bailout for the country, agreed by euro zone leaders on July 21.

“Europe must rise to the challenge and move toward implementing the July 21 decisions, to put an end to the Sisyphean ordeal the Greek people is going through,” said Development Minister Mihalis Chrysohoidis.

“Doing nothing is disastrous for all of us,” he added.

A G7 source said the troika (EU/IMF/ECB), which suspended talks with Athens last week in frustration at Greece’s struggle to stick to its deficit reduction plan, would probably come up with a form of words in its next report to allow the next tranche of bailout funds to be paid.

But the working assumption is that Greece will not avoid default indefinitely.

However, a bond swap plan for private bondholders, which is part of the second bailout plan and is supposed to ease Greece’s debt payments was progressing well, Venizelos said.

“The private sector is responding very well to the PSI (private sector involvement),” he said, without elaborating, one day after an initial deadline for banks to express interest in the scheme expired.

(Additional reporting by George Georgiopoulos and Yannis Behrakis; Writing by Dina Kyriakidou; Editing by Janet Lawrence)

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