News Archive


Japan January manufacturing PMI at 8-year high


TOKYO (Reuters) – Japanese manufacturing activity grew in January at the fastest pace in nearly eight years as new orders for goods expanded at a record rate, a sign of robust domestic demand before an increase in the sales tax in April.

The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 56.6 in January from 55.2 in December.

The index remained above the 50 threshold that separates expansion from contraction for the 11th consecutive month and reached the highest level since February 2006.

“Evidence from panelists suggested that the upcoming rise in the sales tax was a key factor driving the recent expansion, as customers order early to avoid the higher tariff,” said Claudia Tillbrooke, economist at Markit.

“However, the continued expansion of employment, suggests a degree of confidence in the longevity of the current upturn.”

The output component of the PMI index rose to 61.1 from 58.3 in December to reach the highest since the data series began in October 2001.

The index for new export orders fell to 52.8 in January from 55.7 in the previous month.

Prime Minister Shinzo Abe’s government will raise the 5 percent sales tax to 8 percent in April to pay for rising welfare costs.

Since the middle of last year, sales of apartments, houses, cars and durable goods have been rising as consumers look to buy big-ticket items before the tax increase.

Some economists worry the tax hike may hit consumption harder than expected later in the year, and speculate the Bank of Japan may have to add additional stimulus to the economy soon to limit the damage.

However, the governor of the Bank of Japan last week dismissed the need for additional monetary easing as prices are headed toward its inflation target and as overseas economies and demand recover.

(Reporting by Stanley White; Editing by Kim Coghill)

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Traffic jump boosts Chipotle restaurant sales, stock soars


(Reuters) – Chipotle Mexican Grill Inc (CMG.N) said on Thursday an increase in customer visits contributed to bigger-than-expected growth in quarterly sales at established restaurants, and its shares rose nearly 13 percent in extended trading.

News that the fast-growing burrito chain is considering menu price increases in the third quarter contributed to the stock gain because such a move could further boost the chain’s sales results.

The fast-growing burrito chain said sales at restaurants open at least 13 months, a closely watched gauge of industry performance, rose 9.3 percent during the fourth quarter, better than the 6.7 percent expected by analysts, according to Consensus Metrix. Most of the restaurant sales growth came from increased traffic, Chipotle said.

Chipotle’s results landed after some major restaurant chains reported cooling or falling sales for the latest quarter. Traffic to brick-and-mortar stores also posted a steep drop during the holiday season, as shoppers shopped online from the comfort of their couches.

U.S. same-restaurant sales at Starbucks Corp (SBUX.O) were up 5 percent, mainly because of traffic gains. Still, that result softened from the prior period.

Elsewhere, sales at McDonald’s Corp’s (MCD.N) U.S. restaurants open at least 13 months fell 1.4 percent in the fourth quarter, when overall traffic to its global restaurants declined.

Chipotle’s fourth-quarter net income increased nearly 30 percent to $79.6 million, or $2.53 per share, matching analysts’ average estimate, according to Thomson Reuters I/B/E/S.

Food costs were 33.9 percent of revenue, an increase of 40 basis points, due mostly to higher avocado costs, but also to costs for tomato and corn salsa. Those increases were partially offset by lower dairy and steak costs.

A price increase in the ballpark of 3 percent to 5 percent is likely in the third quarter to help offset higher food costs, although no decision has been made, Chief Financial Officer Jack Hartung said.

Chipotle, known for using antibiotic-free meats and organic produce when possible, was the first major U.S. restaurant chain to announce plans to remove food ingredients containing genetically modified organisms, or GMOs, from its supply chain.

“As of now, all of our cooking oils used in North America are made from ingredients that are not genetically modified, and there are only a few key steps left before all of our food is made without genetically modified ingredients,” said Steve Ells, Chipotle’s founder, chairman and co-CEO.

The company plans to finish removing GMO ingredients from its corn and flour tortillas by the end of this year, Ells said.

Chipotle raised its 2014 forecast to call for low to mid single digit same-restaurant sales increases, excluding any menu price increases. Its prior call was for an increase in the low single digits.

Executives also plan to open 180 to 195 new Chipotle restaurants in 2014, more than ever before.

Chipotle sales rose 12.6 percent to $556.28 in extended trading after closing at $493.96.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Steve Orlofsky and Andre Grenon)

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Amazon warns of possible first-quarter loss, stock falls


SEATTLE (Reuters) – Amazon.com Inc missed Wall Street’s profit estimates for the crucial holiday period and cautioned investors about a possible operating loss this quarter, pushing its shares down more than 4 percent on Thursday.

The world’s largest Internet retailer, which has spent heavily to forge new markets in cloud computing and digital media, expects operating results for the current quarter to range from a $200 million loss to a $200 million profit, compared with a $181 million profit a year ago.

Amazon has been trying to sustain its red-hot pace of growth by investing heavily in its retail and distribution network across the globe, while expanding into the technology realm with Kindle digital devices, cloud computing services and online media.

That has taken a toll on its bottom line. With revenue growth slowing as Amazon achieves unprecedented scale, analysts said investors may be getting impatient.

“Amazon’s gotten so many hall passes on earnings,” said Colin Gillis, an analyst at BGC Financial, adding that pressure on the company to produce profit is now rising. “Perhaps the market expectations for them to deliver income, as their revenue growth slows” is increasing, said Gillis.

Executives on Thursday told analysts they were considering an increase in prices for its “Prime” two-day shipping service in the United States, which also includes free video streaming on demand and a book-lending library.

But they had made no final decision on that.

PATIENCE A VIRTUE?

The company posted net income of $239 million, or 51 cents per share, compared with $97 million, or 21 cents per share, in the year-ago quarter. Analysts had expected 66 cents, on average.

Net sales grew 20 percent to $25.6 billion in the fourth quarter, versus expectations for just above $26 billion and slowing from the 24 percent of the previous three months.

North American net sales in particular grew 26 percent to $15.3 billion, from 30 percent or more in the past two quarters.

International sales rose just 13 percent, below Wall Street expectations for around 14 percent to 15 percent growth.

The company forecast revenue of $18.2 billion to $19.9 billion in the first quarter, a conservative outlook relative to Wall Street’s expectation for about $19.7 billion in sales.

Shares in Amazon were down almost 4 percent at $388, from a close of $403.01 on the Nasdaq. The stock was down more than 10 percent at one point in extended trading.

Fourth-quarter income from operations rose to $510 million from $405 million in the same quarter of 2012.

(Reporting by Bill Rigby and Edwin Chan; editing by Andrew Hay)

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Target representative guarded in U.S. panel briefing: sources


WASHINGTON (Reuters) – A Target Corp (TGT.N) representative briefed Congressional investigators by telephone on Thursday about the retail chain’s recent massive data breach, but offered few fresh details, citing continuing law enforcement investigations.

Isaac Reyes, an official with Target’s government relations department, spoke by phone to officials from the House of Representatives Oversight Committee, two sources familiar with the session told Reuters.

The oversight committee, chaired by California Republican Darrell Issa, has broad jurisdiction to investigate the activities of both government agencies and private business.

During the call, Reyes offered little fresh information about how the breach occurred or who Target believed was behind it.

Target spokeswoman Molly Snyder told Reuters that during the briefing the company provided as much information as it could about the breach in which some 40 million credit and debit card records plus personal information of 70 million customers were stolen.

“As we have briefed elected officials and their staffs over the past few weeks, we have been providing them with updates on the ongoing criminal and forensic investigation to the extent we are able to share them,” she told Reuters.

In the call, Reyes said that the U.S. Justice Department had informed Target about the breach on December 12 of last year. But he declined to say if the retailer itself had learned of the problem earlier, the sources said, who declined to be identified because the briefing was closed to the public.

He also told investigators the company believed it had complied with every one of the patchwork of requirements set out in state laws and regulations regarding the disclosure of such data breaches to authorities and consumers.

At present there is no federal law or regulation setting nationwide rules for when consumers and law enforcement agencies must be notified of serious data breaches, though Congress has been considering related legislation for years.

Four Senate Democrats, led by Commerce Committee Chairman Rockefeller and Select Intelligence Committee Chairman Dianne Feinstein, on Thursday introduced a bill aimed at better protecting consumers from data breaches.

This is the third such bill introduced on Capitol Hill since the Target data breach. The three bills are versions of legislation which had been introduced in previous years but failed to gain traction.

The sources familiar with the House committee briefing said that Reyes indicated the company was willing to turn over documents to Congressional investigators, and that it could start doing so within a few days.

However, investigators expressed doubt that, given the company’s unwillingness to get into details of the breach during Thursday’s briefing, Target will turn over much revealing material.

Representatives of Target have held similar phone briefings with state attorneys general, although details of these have not been made public. Several states have banded together to probe the Target data breach.

The briefings come as executives of Target and Neiman Marcus NMRCUS.UL, another retailer which recently suffered a major data breach, prepare for personal appearances at Congressional hearings next week.

(Additional reporting by Alina Selyukh in Washington and Jim Finkle in Boston; editing by Ros Krasny)

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NY court lets lawsuit against Goldman over Timberwolf CDO proceed


NEW YORK (Reuters) – A New York state appeals court on Thursday refused to dismiss a $1.07 billion lawsuit accusing Goldman Sachs Group Inc (GS.N) of selling securities as the financial crisis began that it expected to lose value.

The lawsuit, brought by Australian hedge fund Basis Yield Alpha Fund, says Goldman made misleading statements and omissions about collateralized debt obligations known as Timberlake and Point Pleasant. It claims Goldman sold the securities as a way to offload subprime mortgages it knew were toxic and also sought to profit by shorting the securities.

In its ruling, a five-judge appeals panel said a lower court rightly declined to dismiss the fraud claims, rejecting Goldman’s view that they should be thrown out because of disclosures and risk disclaimers in its offering circulars.

If the fund’s allegations are true, “there is a ‘vast gap’ between the speculative picture Goldman presented to investors and the events Goldman knew had already occurred,” Justice Dianne Renwick wrote in the decision on behalf of four judges on the court. A fifth judge concurred with different reasoning.

The court dismissed negligent misrepresentation, unjust enrichment and rescission claims against Goldman. But it also refused to order the case into arbitration, as the bank had sought.

“This is an excellent decision affirming that sellers of securities have to speak honestly and cannot use the fine print to avoid responsibility,” said Eric Lewis, a lawyer who represents Basis Yield. “Goldman knew they had fixed the race. The securities were designed to fail.”

Goldman has said the losses were caused by the collapse of the housing market, not misrepresentations.

“We are confident that we will ultimately prevail on the remaining claim by Basis, which was one of the world’s most sophisticated investors in mortgage products,” said Goldman spokesman Michael DuVally.

Basis Yield Alpha Fund brought the lawsuit in 2011 seeking to recoup $67 million in losses that contributed to the fund’s insolvency. The lawsuit also seeks $1 billion in punitive damages.

Timberwolf was cited in a scathing 2011 U.S. Senate panel report that faulted Goldman and other banks for pushing debt they expected to perform poorly.

The report said Goldman kept marketing Timberwolf even after Thomas Montag, an executive who is now Bank of America Corp’s co-chief operating officer, called Timberwolf “one shitty deal” in an email to a colleague.

Goldman’s CDO practices also have drawn regulatory scrutiny. In April 2010, it agreed to pay $550 million to settle U.S. Securities and Exchange Commission charges it sold the risky Abacus CDO while letting hedge fund billionaire John Paulson bet against it. The bank did not admit wrongdoing.

LIBYA CASE

The bank also was sued in London’s High Court last week for allegedly exploiting a lack of financial knowledge at Libya’s sovereign wealth fund, which became a Goldman client in 2007.

In court documents seen by Reuters on Thursday, the Libyan Investment Authority claims Goldman took advantage of the fund’s “financially illiterate staff” when it encouraged investment in more than $1 billion in trades that ended up worthless. Goldman has said the claims are without merit.

In its complaint, the Basis Yield fund said it entered $80.8 million of credit default swaps related to “triple-A” and “double-A” rated Timberwolf debt. It said it bought $12.3 million of “triple-B” rated debt tied to subprime residential mortgages in a CDO known as Point Pleasant 2007-1.

Within weeks, the transactions began to lose value, and Basis Yield began to liquidate within two months. It said it lost $56.3 million on Timberwolf in under six weeks, and $10.8 million on Point Pleasant in less than three months.

Basis Yield was managed by Sydney-based Basis Capital Funds Management Ltd.

The case is Basis Yield Alpha Fund v. Goldman Sachs Group, Inc et al, New York State Supreme Court, New York County, No. 652996/2011.

(Reporting by Karen Freifeld; Editing by Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jq69f6iKx9c/story01.htm

Goldman CEO receives estimated $23 million pay package


NEW YORK (Reuters) – Lloyd Blankfein, chief executive of Goldman Sachs Group Inc (GS.N), received restricted stock worth $14.7 million this week as part of his 2013 bonus, Goldman reported in a regulatory filing on Thursday.

Goldman’s board of directors typically awards executives 70 percent of their bonus in stock and 30 percent in cash, suggesting that Blankfein also received a roughly $6.3 million cash bonus. Goldman does not disclose the full details of executives’ pay packages until it files its proxy statement.

The restricted stock bonus of 88,422 shares awarded to Blankfein is worth $14.7 million, based on Goldman’s closing price of $166.25 on Tuesday, when Goldman said it granted the award.

Combined with a salary of about $2 million, Blankfein’s total pay package for last year was roughly $23 million, up about 10 percent from the $21 million he received for 2012.

The restricted stock units are delivered in three equal installments over three years, and generally cannot be sold for five years, Goldman said in a Form 4 filing with the U.S. Securities and Exchange Commission.

(Reporting by Lauren Tara LaCapra; Editing by Leslie Adler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/3QoSIO7rb8I/story01.htm

Analysis: Supply test looms for Obama’s darling natural gas


NEW YORK (Reuters) – While the United States is sitting on a bounty of natural gas, the wild volatility of prices this winter could soon become a regular feature as growing demand begins to test supply, potentially curbing plans to increase exports and switch power plants to gas from coal.

Ample reserves have depressed prices since 2008, but sudden surges in consumption could jolt the market as early as 2015 when new exports coincide with higher domestic demand and lagging production for the fuel championed by President Barack Obama in his State of the Union speech on Tuesday.

Signs of strain have already emerged. The coldest winter in decades pushed prices for natural gas, which is used to heat homes and produce electricity, to four year highs and exposed inadequacies in the pipeline network. Some prices in the poorly supplied northeast of the country rose to all-time highs above $120 per million British thermal units on January 21, more than $100 higher than the previous week.

“As demand comes, we are sitting here fat, dumb and happy,” said Vikas Dwivedi, an energy market strategist at Macquarie Group. “But you need a price signal ahead of time to stimulate the production growth.”

Dwivedi predicts a first period of high prices to last for up to 6 months in 2016 and be followed by continual unpredicted surges as new projects demanding natural gas come online.

The current price spike and any future volatility will not alter the decades’ worth of supply – thanks to new techniques such as fracking to release oil and gas from shale deposits – so the long-term outlook should remain the same.

Exports of natural gas to Mexico are expected to double in the next two years, just as companies begin shipping liquefied natural gas from new export projects to Europe and Asia. At the same time, more gas will be used at home in industry and electricity generation as coal plants retire.

In all, U.S. demand for gas, including domestic use and exports, could rise by 15 percent by 2018, according to Reuters estimates. Meanwhile, after a 20 percent growth in supply because of booming shale drilling since 2007, production increases are expected to slow to only 2.1 percent in 2014 and 1.3 percent in 2015.

BRIDGE FUEL

In the State of the Union address, Obama called for more trucks to switch to natural gas and the creation of more jobs in the sector. He described natural gas as “the bridge fuel that can power our economy,” on the way to a less carbon-intensive future.

But the big supplies have pushed down prices of contracts for delivery this year and in the future, dampening investment in pipelines and drilling, despite potential demand rises in the coming years. Prices for delivery in 2018 are lower than today, according to Reuters data.

The largest contributor to demand will be exports of liquefied natural gas (LNG). Spurred by the low cost of American natural gas compared with European and Asian supplies, more than a dozen companies have submitted proposals to build export plants.

The government, wary that exports will push domestic prices higher, has not said how many projects will be approved. But the four projects allowed so far have the capacity to export 7.1 billion cubic feet (bcfd) of natural gas by 2018, more than 10 percent of today’s daily 70 bcfd supply.

Even though it is difficult to assess how many projects will be built – local permitting can be contentious, construction takes up to five years, and only one of the four approved projects is being built – LNG developers are signing deals with potential buyers across the globe. These deals depend on U.S. construction and export permits.

“U.S. natural gas prices have not yet priced a rise in demand because there are too many unknowns at this point. One unknown is the demand for LNG itself,” said Abhishek Kumar, an energy and modeling analyst at Interfax Energy’s Global Gas Analytics in London.

Indeed, export plans are risky and could come under threat if prices rise high enough for exports to not be viable for European and Asian buyers.

At the same time, U.S. exports of natural gas to Mexico are expected to rise by 3.5 bcfd by the end of 2014, nearly doubling from their current rate, according to the U.S. Energy Information Administration.

Coal plants retiring between now and 2018 to make room for cleaner fuels will be replaced by gas-generated power plants requiring 1.9 bcfd, according to the Thomson Reuters North America Natural Gas Research Team.

Though suppliers could ramp up production to meet new demand, they will be delayed if the required infrastructure is not built ahead of time or wells are not ready to flow gas.

Pipeline constraints like those seen between Marcellus shale fields centered in Pennsylvania and New England customers can cause a bottle neck during high demand periods, as evidenced during the arctic cold snap that led to record high prices in the region.

The number of rigs drilling for natural gas has fallen dramatically over the last two years as companies target more lucrative oil. In 2013, the rig count reached 349, its lowest number since 1995. In 2011, the rig count was near 1,000. Some analysts did note that rigs in use today are more efficient and therefore fewer are needed.

Producers currently have an incentive to taper back production to prevent flooding the market and driving down prices, but analysts fear the infrastructure such as pipelines may not be ready when demand peaks.

When it comes to predicting demand, much remains unknown. Should natural gas prices rise far enough to lose their competitive edge, potential customers may cut back. Aaron Calder, a market analyst at Gelber Associates, said utilities who have switched from coal to natural gas may think differently should prices rise.

“Who pays for the very last molecule of gas sets the market, and that’s power generators. We would see utilities hit the breaks on natural gas power generation if prices got too high,” said Calder.

(Editing by Edward McAllister, Peter Henderson and Grant McCool)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/TuEfoJL2Dd0/story01.htm

UPS says no rerun of glitch-marred December: CFO


(Reuters) – United Parcel Service Inc (UPS.N) has vowed to avoid a repeat of last year’s Christmas holiday season when unexpectedly high volume and huge delays frustrated customers who wanted their packages delivered on time.

The No. 1 U.S. courier company is investing in new technology and expanded capacity so that the 2014 holiday season should go smoothly, Chief Financial Officer Kurt Kuehn said on Thursday.

“We’ll be absolutely prepared to have a great peak season this December,” he said in an interview. “We will be very prepared this coming December. I’m not worried about that.”

Last month, the company known for its brown trucks was overwhelmed by the volume of holiday packages, delaying the arrival of gifts around the world and prompting customers to vent their frustrations on social websites.

Kuehn said an increase in last-minute shipping by retailers was also partly responsible for the glitches, and also made it difficult for the company to forecast volumes.

Retailers such as Amazon.com Inc (AMZN.O) guaranteed deliveries by Christmas Day on orders placed as late as December 22.

The unexpected rise in online shopping, combined with bad weather and a shorter holiday shopping season than in 2012, added to the bottlenecks. There were six fewer days between Thanksgiving and Christmas in 2013 than in the previous year.

“In years past retailers had a Web presence but it wasn’t this critical a part of their market strategy,” Kuehn said. “There was a big focus this year, with incentives that drove increased and late demand.”

UPS warned on January 17 of fourth-quarter earnings well below market expectations due to the surge in online shopping that caught the company off-guard and increased its costs.

It said on Thursday that it expects full-year 2014 earnings to increase by 11 to 16 percent over last year.

UPS shares were up 0.7 percent at $95.96 on Thursday afternoon on the New York Stock Exchange.

Kuehn said the rise in last-minute shipping also made it more difficult for UPS to forecast volumes near Christmas.

UPS said global daily deliveries during the 2013 holiday period topped expectations by surpassing 29 million packages on five days, with peak volume exceeding 31 million on December 23.

“We did have a good strong cyber week,” he said, referring to the week after the U.S. Thanksgiving holiday. “Typically the week after that tapers off but this year (2013) the numbers just kept going up till a point where we saw eight days during December U.S. delivery volume exceeded our previous company high which was set in 2012.”

Cyber Monday, or the Monday after Thanksgiving, is traditionally the busiest day for online shopping as workers go back to offices but continue their holiday shopping on personal computers and other devices.

Once it became evident that demand was not going to slow down after Cyber Monday, UPS had to hire 30,000 more seasonal workers than expected, but package volumes had already built up by then, Kuehn said.

UPS has increased investments in capacity expansion by $500 million, a large part of which is a direct reaction to the recent holiday season’s glitches, Kuehn said. Total capital expenditures in 2014 are expected to reach $2.5 billion.

The company is also going to focus on improving communications with key customers as part of the new strategy, while adding technology that makes it easier to estimate volumes.

Kuehn said UPS will implement systems that can track packages on the way from retailers — whereas at present it sometimes has no status updates on packages until they arrive at the UPS sorting lot.

“In some cases the customers hadn’t given us details of how many packages were in certain loads. That was a frustration,” he said.

(Reporting by Nivedita Bhattacharjee in Chicago; editing by Matthew Lewis)

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Wall Street rebounds on tech rally and signs of growth


NEW YORK (Reuters) – U.S. stocks bounced back on Thursday, with the SP 500 and Nasdaq climbing more than 1 percent, helped by gains in the tech sector and data showing the U.S. economy grew as expected in the fourth quarter.

Facebook Inc (FB.O) shares jumped 15.4 percent to $61.76, supporting both the Nasdaq and SP 500. The stock earlier hit an all-time intraday high of $62.50. The social media company delivered its strongest revenue growth in two years on Wednesday, beating analysts’ estimates. The SP tech sector index .SPLRCT, up 1.7 percent, was among the day’s best-performing sectors.

The day’s rebound pushed the SP 500 back into positive territory for the week, while the index was still down nearly 3 percent for the month. Each of the three major U.S. stock indexes dropped 1 percent on Wednesday after the Federal Reserve announced it would reduce its monthly bond purchases by another $10 billion.

Investors also are concerned that recent bold efforts by central banks in emerging economies to stabilize their currencies may not be enough to staunch an exodus of funds from those markets.

“It’s a little bit of a technical bounceback from yesterday,” said Stephen Carl, principal and head of U.S. equity trading at The Williams Capital Group in New York, adding that investors also saw “some good earnings in the tech sector.”

Recent declines have kept the SP 500 below its 50-day moving average.

Adding to support, data showed U.S. gross domestic product grew at an annual rate of 3.2 percent in the fourth quarter, the Commerce Department said on Thursday, in line with expectations.

The Dow Jones industrial average .DJI rose 125.26 points or 0.80 percent, to 15,864.05. The SP 500 .SPX gained 22.51 points or 1.27 percent, to 1,796.71. The Nasdaq Composite .IXIC added 80.98 points or 2.00 percent, to 4,132.41.

Among other gainers, Visa Inc (V.N) shares climbed 1.7 percent to $220.74 after the world’s largest credit and debit card company reported a 9 percent increase in quarterly profit as more people used its cards.

Google Inc (GOOG.O) shares jumped 3.8 percent to $1,149.28, a day after Lenovo Group (0992.HK) said it would buy the Internet search giant’s Motorola handset division for $2.91 billion.

Google is expected to report quarterly results after the bell, along with Amazon.com (AMZN.O), up 5 percent at $403.50, and Chipotle Mexican Grill (CMG.N), up 2.5 percent at $496.65.

Some analysts were recommending large-cap stocks in 2014 over small caps due to the sector’s high valuation and the impact of increased market volatility as the Fed continues to taper its stimulus efforts.

“Since the bear market bottom in March 2009, small cap stocks (as represented by the Russell 2000) have gained a total of 264 percent versus 201 percent for large caps (as represented by the SP 500),” said Mary Ann Bartels, chief investment officer for portfolio solutions at Bank of America Merrill Lynch Wealth Management, in a note to clients.

“However, after years of outperformance, we see a potential change in equity leadership in 2014. In our opinion, attractive relative valuations, improving global economic growth and higher long-term interest rates are all likely to benefit large caps more than their smaller counterparts.”

The day’s economic data also showed the number of Americans filing new claims for unemployment benefits rose more than expected last week, but the underlying trend suggested the labor market continued to heal.

(Editing by Bernadette Baum and Jan Paschal)

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