News Archive


Pimco equity chief plans hires as expansion picks up


LONDON (Reuters) – Pimco’s new global equity chief plans a first batch of new hires that could see her investment team grow by half as the U.S. bond powerhouse boosts its stock offering – and one of those running money will be her.

That equity expansion strategy has been honed in the three months since French-born Virginie Maisonneuve was hired by then-Chief Executive Mohamed El-Erian – before a high-profile bust-up with Chief Investment Officer Bill Gross led to El-Erian’s departure.

And Maisonneuve has no plans to change tack – despite concern from investors, and parent Allianz (ALVG.DE), about the firm’s direction in light of the managerial squabble, and as several of its flagship bond funds saw billions of dollars leave.

Maisonneuve has not spoken to El-Erian since he left, but she said boss Gross supported the planned expansion of the firm’s equity unit, whose funds account for just $9.1 billion of Pimco’s total $1.94 trillion in assets under management.

“If you want to be a very large player in the equity market, you need to have commitment over a very long period of time, and that is what clients would look for – it’s just the way it is,” said Maisonneuve, who joined from Schroders (SDR.L) in January.

“If you look at who has built sizeable platforms in equities, it takes time, 10-15 years, when people have been at it for 50 years. So that’s just a reality … I’m not saying we’re going to wait 10 years before we do something. My ambition is high and I want to drive equities to a very sizeable level of assets, but that’s going to take time.”

The need for good news in the equity sphere has recently been thrown into stark relief. Two of Pimco’s leading bond funds propped up the performance charts at the end of the third quarter, data from Morningstar showed.

By comparison, its equity funds – the oldest of which was only launched in May 2010 – have done rather better. Its long-short equity fund, for example, is in the top-quartile of performers according to Thomson Reuters Lipper data.

Maisonneuve is confident on the outlook for the market and advised to buy the market on any pullback.

BOUTIQUE BOOST

Maisonneuve said she plans to hire between 10 and 16 people to help boost her investment staff of around 30, an operational size she considers “quiet nice if you look at it as a boutique”.

Those would be split between some of her team’s existing funds, which consist of a long-short fund, two dividend-focused funds, an emerging markets fund and a “Pathfinder” fund which invests in stocks deemed significantly undervalued.

The staff are currently split across London, New York and the home of Pimco, Newport Beach, California – which Maisonneuve visits regularly and into which she often dials for a weekly conference call with her five-strong deputy CIO peer group, all of whom share El-Erian’s duties as part of a global committee.

While unwilling to put a number on the ultimate size of Pimco’s equity business, or its ratio to the bond side of the asset ledger, the 27-year veteran of financial markets is clear growth is unlikely to be got by buying a bulky rival.

“I’ve been lucky with the MA experience I’ve had, but if you look at the big ones, it’s not always clear that it adds value,” she said, preferring instead to bring on “small teams, the same way Pimco has done it (before)”.

That organic growth will also involve creating a range of hybrid products to make best use of the credit analysis expertise that exists at the company, and which is already used by several of her equity funds, she said.

“You can … think about going up and down the capital structure, saying: ‘I like this company, what do I buy? The bond or the equity?’. And I think if there’s one firm in the world who’s going to be set up to build these hybrid products, it’s Pimco.”

With lots of resumes landing on her desk, both physically and electronically – “a lot of people are sending them to the headhunting firm that we’ve hired, or directly on my LinkedIn account” – Maisonneuve is confident of Pimco’s allure.

And new hires based in London could well find themselves sharing fund management duties with the boss, investing in line with several of her major thematic bets – demographic change, emerging market growth and the low-carbon economy – using a so-called growth at a reasonable value strategy.

“My passion is investment,” she said, “(but) it won’t be mine, it will be mine and the team; it’s always a team game.”

(Editing by Pravin Char)

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Apple, Samsung make final pitches to U.S. jury in patent trial


SAN JOSE, California (Reuters) – Apple has vastly exaggerated the importance of its patented iPhone features, a Samsung attorney said on Tuesday as the two companies delivered closing arguments to jurors after a month-long trial over mobile technology.

Apple, however, argued that the South Korean company could not have competed in the smartphone market without unfairly copying its flagship product. The two tech leaders also sparred over how Google’s work on the software used in Samsung phones affects Apple’s patent claims.

Apple Inc and Samsung Electronics Co Ltd have been litigating around the world for three years. Jurors awarded the iPhone maker about $930 million after a 2012 trial in San Jose, California, but Apple failed to persuade U.S. District Judge Lucy Koh to issue a permanent injunction against the sale of Samsung phones.

The current case involves five Apple patents that were not in the 2012 trial and which cover iPhone features like slide to unlock and search technology. Apple is again seeking to ban sales of several Samsung phones, including the Galaxy S III, as well as roughly $2 billion in damages.

Samsung also claims Apple violated two patents on streaming video. It is seeking to ban the iPhone 5, and asserted a $6 million damages claim.

In court on Tuesday, Samsung attorney William Price said some of Apple’s patented technology in the case was never even incorporated into the iPhone. That undermines Cupertino, California-based Apple’s claim for billions in damages.

Another Samsung attorney, John Quinn, suggested that Apple devised its $2 billion request to artificially inflate the value of the technology in the case and confuse the jury.

“They’ll be dancing in the streets in Cupertino if you give them 100 million,” Quinn said.

But Apple attorney Harold McElhinny said Samsung’s copying of Apple technology has greatly harmed the iPhone maker and turned the smartphone market into a two horse race.

“Unlike in fairly tales, we know that Samsung’s illegal strategy has been wildly successful,” McElhinny said.

Additionally, Apple attorney William Lee said Samsung’s low damages request on its own patents was meant to cheapen intellectual property in general. Samsung paid its expert witnesses about $5 million in fees in order to seek $6 million in damages, Lee said.

“Does that make sense?” Lee said. “Only in one circumstance: if you’re trying to devalue patents, all patents.”

Samsung’s phones run on the Android mobile operating system developed by Google Inc. Google is not a defendant in the case, but during the trial Samsung pointed out that some of the features Apple claims to own were actually invented by Google. Samsung called a handful of Google executives to testify on its behalf.

McElhinny said the fact that Google developed Android is irrelevant to Apple’s ability to collect damages from Samsung. Google agreed to reimburse Samsung for some of those costs, he said.

“At the end of the day Google will not be an issue for you,” McElhinny said.

However, Samsung’s Quinn said Apple sued Samsung because the iPhone maker did not want to fight Google, another iconic Silicon Valley company, “in our backyard.”

The jury began deliberating on Tuesday and a verdict could be reached at any time. If either company proves patent infringement, they could then ask Koh to order a sales ban.

The case in U.S. District Court, Northern District of California is Apple Inc vs. Samsung Electronics Co Ltd, 12-630.

(Reporting by Dan Levine; Editing by Richard Chang)

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Spring expected to usher in strong U.S. job growth


WASHINGTON (Reuters) – U.S. employment likely rose at its fastest clip in five months in April and the jobless rate probably dropped in a show of strong economic momentum after a gloomy winter.

Nonfarm payrolls probably advanced by 210,000 jobs this month, stepping up from a 192,000-gain in March, according to a Reuters survey of economists. That would leave hiring well above its first-quarter average of 177,667 jobs per month.

The unemployment rate is forecast slipping one-tenth of a percentage point to 6.6 percent, a five-year low previously touched in January.

“It would reinforce the impression that some of the weakness we saw in the economy over the winter was weather-related and temporary,” said Josh Feinman, chief global economist at Deutsche Asset Wealth Management in New York.

The economy stumbled badly in the first quarter as an unusually cold and disruptive winter took its toll.

However, data ranging from retail sales to industrial production suggest the economy is now out of hibernation and economists are predicting growth will top a 3 percent annual pace in the second quarter.

The Labor Department will release its monthly jobs report, which is closely watched by financial markets around the globe, on Friday at 8:30 a.m. (1230 GMT)

Federal Reserve officials meeting on Tuesday and Wednesday will not have access to the data, but it could add to an ongoing debate over whether the U.S. central bank is moving too slowly in reducing its monetary stimulus.

Economists expect payrolls growth to trend around 200,000 per month for the remainder of this year, a level they say is consistent with economic growth in the 2.5 percent to 3.0 percent range.

‘IN GOOD SHAPE’

“It’s enough to bring down the unemployment rate. It doesn’t say the labor market is in great shape, but it does say it’s in good shape,” said Joel Naroff of Naroff Economic Advisors in Holland, Pennsylvania.

Naroff said the jobless rate could decline to around 6 percent at the end of the year if employment growth averaged 200,000 to 225,000 jobs per month.

“You have to start asking what is full employment and how far are we going to be from full employment at the end of the year. That’s (Fed Chair Janet) Yellen’s conundrum, when do you start pulling the trigger?”

Yellen has pointed to the unusually large number of Americans who are either suffering a long spell of unemployment or who are working part-time because they are unable to find full-time work as justification for maintaining an extraordinarily easy monetary policy.

The private sector, which in March had regained all the jobs lost during the 2007-09 recession, is expected to account for all of April’s anticipated job gains.

Outside of government payrolls, which are forecast to have been flat for a second straight month, job gains in April are likely to have been as broad-based as they were in March.

Manufacturing employment likely rebounded after dipping in March. Another month of solid gains in construction payrolls is expected, but the hiring trend could slow in the months ahead as residential construction loses some steam.

Average hourly earnings probably rose 0.2 percent in April after being flat the prior month.

“There are certain sectors with upward wage pressure due to skills mismatch, but we don’t believe it can translate to a meaningful move higher in overall wage growth given the amount of underutilization in the labor market,” said Michael Hanson, a senior economist at Bank of America Merrill Lynch in New York.

The length of the workweek likely held steady at 34.5 hours in April after bouncing back in March from its winter-depressed levels.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

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Siemens says to make Alstom offer if it can see its books


PARIS/FRANKFURT (Reuters) – Germany’s Siemens (SIEGn.DE) said on Tuesday it would make an offer to French engineering group Alstom (ALSO.PA) if it is given four weeks to examine its books and draw up a detailed plan to rival a move by General Electric (GE.N).

The interest in Alstom from U.S. competitor GE has triggered a fierce national debate about the fate of power turbine and train manufacturing in France – both integral to the nation’s engineering pedigree.

Siemens said it had sent a letter to Alstom in the afternoon after its managing and supervisory boards had decided to make an offer.

“The prerequisite for this offer is that Alstom agrees to give Siemens access to the company’s data room and permission to interview the management during a period of four weeks, to enable Siemens to carry out a suitable due diligence,” it said.

It gave no further details of its plans, but at the weekend Siemens approached Alstom with a proposal to exchange part of its train business plus cash for Alstom’s power arm. In a short letter, it had outlined its proposal worth $14.5 billion.

A source close to the discussions said a board meeting at Alstom had started early on Tuesday evening.

Sources close to the talks had said earlier that the French firm was likely to give Siemens two to three weeks to draw up a detailed plan to buy its power business.

Sources say Alstom already has a $13 billion cash offer from GE for its power business, which generates 70 percent of sales.

France’s Socialist government has declared that it must have a say in the outcome, as thousands of jobs are at stake and state-owned utility EDF (EDF.PA) and the national railways are major clients of Alstom.

“There aren’t only financial interests at stake in this matter; there are also industrial, social and human interests,” Economy Minister Arnaud Montebourg said after a meeting with unions. “The government does indeed intend to defend our country’s interests.”

“CHAMPIONS”

Alstom CEO Patrick Kron presented GE’s interest to Montebourg last week. The company’s shares were suspended and are due to resume trading on Wednesday.

After the counter-proposal from Siemens emerged at the weekend, Montebourg and President Francois Hollande arranged meetings with the parties in Paris on Monday.

On the Frankfurt stock exchange, Siemens shares closed up 0.6 percent, compared with a 1.5 percent rise in shares on the blue-chip DAX .GDAXI index.

Just over a week before Siemens boss Joe Kaeser presents his future vision for the Munich-based conglomerate, investors in Siemens were skeptical about a potential deal.

“We would have preferred a less risky strategy of organic growth,” said Tim Albrecht, fund manager at DWS Investment.

A fund manager who declined to be named said: “Until last week, Alstom was seen as dead, and its products were not thought to be competitive.”

“A purchase would be a 180-degree turn. If Siemens does this, they need very good arguments to justify it strategically.”

The German government has said an Alstom-Siemens tie-up could offer “great opportunities”. Montebourg described it as creating “two European and global champions”, but Paris has not ruled out a deal with GE.

Some investors may also be wary of a French-German deal, given problems with previous cross-border tie-ups, such as EADS (AIR.PA) and drugmaker Aventis, which were both plagued at times by battles for control.

A tie-up between Alstom, with a market capitalization of $11.5 billion, and Siemens, worth $144 billion, could raise antitrust questions, say some analysts.

However, some analysts and investors said they see Siemens’ move as primarily defensive.

Rob Virdee, analyst at Espirito Santo Investment Bank, said the offer looked like a move to stop GE’s expansion in Europe.

The French government denied a media report of another option that would involve selling some of the state’s holdings in power utility EDF to finance an operation that would include a recapitalization of the company.

(Additional reporting by Arno Schuetze and Sabine Wollrab in Frankfurt, Irene Preisinger in Munich, Benjamin Mallet, Mark John, Geert de Clerq and Gregory Blachier in Paris, and Lewis Krauskopf in New York, Sophie Sassard in London; Writing by Andrew Callus and Mark John and Madeline Chambers; Editing by Geert De Clercq and Will Waterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/hAhCQnO1jD4/story01.htm

Barclays dealmaker McGee quits as U.S. head


LONDON (Reuters) – Hugh ‘Skip’ McGee, one of the British bank Barclays’ (BARC.L) highest earners, has quit as head of its Americas business, the bank saying he did not want to oversee the task of establishing a new holding company required under tougher U.S. rules.

The departure of the former Lehman Brothers dealmaker coincides with pressure on Barclays Chief Executive Antony Jenkins to cut staff pay after shareholders last week rebelled against a decision to increase bonuses.

Jenkins said the bonus rise was needed to prevent an exodus of U.S. investment bankers, and McGee’s exit is likely to raise concern that some of his former Lehman colleagues will join him.

Barclays said McGee had decided to step down due to the increased amount of time he will need to spend in the next two years on regulations, compliance, legal and operational issues.

The bank has to establish an intermediate holding company by July 2016, which imposes more stringent rules on the U.S. arms of foreign banks and will require them to hold more capital.

Joe Gold, currently head of client capital management, will take over as the head of Barclays’ Americas business from May 1. Barclays said the role had been restructured and Gold would report to the co-CEOs of Barclays’ corporate and investment banking operations, Tom King and Eric Bommensath.

Barclays hired Gold in 2001 from the failed Enron energy trading business to help lead its expansion into commodities, and he ran its European power and gas trading in London before moving to New York to develop its U.S. commodities business.

Jenkins said Gold understood the fast-changing regulatory landscape and would be helped by non-executive director Stephen Thieke, who previously worked for the Federal Reserve Bank of New York, to set up the holding company.

McGee, 53, was awarded nearly 9 million pounds ($15 million) of shares last month under bonus plans from prior years, the highest payout among the bank’s executives. His full pay details are not disclosed.

McGee joined Barclays when it bought the U.S. arm of Lehman when the investment bank collapsed in 2008 and became head of its Americas operations in March 2013.

He said that, after 21 years at Lehman and Barclays, he was looking forward to “my next challenge”, but did not specify what that would be.

The Texan has spent most of his career advising investment bank clients in the energy sector, including advising on Kinder Morgan’s $21 billion purchase of El Paso Corp. He also worked on Verizon’s $130 billion takeover of Vodafone’s stake in their joint venture, Verizon Wireless.

“He has been the longest-serving head of investment banking on Wall Street, and our most senior client-facing executive, responsible for driving some of the industry’s highest profile transactions,” Jenkins said.

Jenkins has pledged to cut costs and improve profitability in the investment bank, and will on May 8 unveil details of his plan, which is expected to include the loss of thousands of jobs.

($1 = 0.5950 British Pounds)

(Additional reporting by Jonathan Leff in New York; Editing by Kevin Liffey)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/PiHo-EAYZ9s/story01.htm

GE trumpets 40-year jet engine venture to bolster Alstom bid


PARIS (Reuters) – As General Electric (GE.N) tries to convince French leaders to back its offer to rescue engineering firm Alstom (ALSO.PA), it hopes that three letters will convince them of its good will: CFM.

The initials mask a successful U.S.-French venture that will soon mark 40 years making jet engines.

Co-owned by GE and Snecma, a unit of French aerospace group Safran (SAF.PA), CFM has grown from a risky attempt to break into new civil markets into an aviation powerhouse with 26,000 units sold and a CFM-powered jet taking off every two seconds.

General Electric Chief Executive Jeff Immelt brought up the engine supplier during a meeting with French President Francois Hollande to press GE’s $13 billion offer on Monday, a person with knowledge of the discussions said.

Immelt “stressed that CFM is an excellent example of co-operation”, the person said, asking not to be identified.

By doing so, he not only boasted of GE’s French credentials in the face of a rival offer from Germany’s Siemens (SIEGn.DE).

He also implicitly addressed French concerns over “economic sovereignty” by comparing his bid to a previous episode in which the United States agreed to share its own sensitive technology.

Although now established in the aircraft industry, the creation of CFM in 1974 was so sensitive that it only went ahead after intervention by U.S. President Richard Nixon and French counterpart Georges Pompidou – one of the few points of agreement at an inconclusive Reykjavik summit a year earlier.

That’s because the Pentagon had opposed plans to build a new engine with the French, in which GE’s contribution was to be closely related to an engine conceived for the B-1 bomber.

Under a compromise deal, the first CFM engine tests were conducted in the United States away from the gaze of French engineers, who remained barred for some time from looking inside the sealed casing of the engine’s “core” section supplied by GE.

CFM has managed to thrive, breaking sales records even as France and the U.S. fought over trade and high-profile tie-ups such as Vivendi Universal and Alcatel-Lucent went wrong.

It was the brainchild of two industrialists with colorful war records: a German-born fighter engineer who fought for the allies and was made a U.S. citizen by an act of Congress, Gerhard Neumann, and a French resistance hero called Rene Ravaud who lost an arm when the British bombed Brest in western France.

It sailed unnoticed through the industry’s biggest battles: a record trade dispute between its customers Airbus and Boeing, and a patriotic contest in which Boeing won the right to supply American tankers to the U.S. Air Force, whose existing fleet had quietly run on partially French-designed CFM engines for years.

DRIVING FORCE

Although three out of four medium-haul jets sold today have CFM engines, the firm is so low-key that few passengers will be aware of its name.

But it has been a driving force behind some of the aerospace industry’s most important changes, including huge increases in reliability for the workhorse short- and medium-haul jets that paved the way for low-cost airlines.

Now, its main U.S. rival, Pratt Whitney (UTX.N), is stepping up competition with a new generation of engines, prompting CFM to focus on plans for its own new engine series known as LEAP.

After a push from leaders followed by a slow start that nearly saw CFM wound up, Immelt will hope that the firm’s success shows what can be done in industrial politics.

But industry sources say it may also demonstrate the limits of co-operation whenever sensitive assets or pride are at stake.

CFM is one of two transatlantic partnerships that operated for decades with minimum publicity, the other involving Pratt Whitney and Rolls-Royce (RR.L) until Rolls recently exited.

Alstom is seen unlikely to dodge the limelight in the same way, with thousands of jobs at stake and a history of getting bogged down in front-line politics. A previous crisis over its future topped French political headlines for weeks in 2004.

Secondly, while the jet engine industry has long adapted to the idea that it must forge alliances to share overwhelming development costs, the power-plant industry is still mainly run by national champions, albeit with international activities.

Most importantly, GE’s offer for Alstom’s power turbines appears a very different financial proposition from CFM, which skirted round questions of control by establishing a 50-50 venture and dual U.S. and French assembly lines.

Although the ban on looking inside the engine has long ago been lifted, the separation of roles is so strict that to this day, GE and Safran don’t know each other’s costs on the world’s most-sold jet engine, according to executives in both firms.

The revenues of CFM International are pooled but each partner is responsible for its own costs and keeps its profits.

“It is a partnership in which both companies have stayed on their own territory,” said Jean-Paul Bechat, the former CEO of Safran and a former aide to CFM’s co-founder Ravaud.

Industry experts say such Chinese Walls and a growing market both eased CFM’s relatively trouble-free development, but are not a model that would easily fit Alstom’s entrenched problems.

Whoever buys most of Alstom’s assets is expected to want real control, while Hollande has called jobs and energy security his priorities for a deal.

(Additional reporting by Geert de Clercq; Editing by Giles Elgood)

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

Apple makes final pitch to U.S. jury in Samsung trial


SAN JOSE, California (Reuters) – Samsung transformed the smartphone market only by copying iPhone technology, an Apple attorney said on Tuesday as the two companies delivered closing arguments to jurors after a month-long trial over mobile patents.

Apple Inc and Samsung Electronics Co Ltd have been litigating around the world for nearly three years. Jurors awarded the iPhone maker about $930 million after a 2012 trial in San Jose, California, but Apple failed to persuade U.S. District Judge Lucy Koh to issue a permanent injunction against the sale of Samsung phones.

The current trial involves a fresh batch of Apple patents, which cover iPhone features like slide to unlock and search technology. Apple is again seeking to ban sales of several Samsung phones, including the Galaxy S III, as well as roughly $2 billion in damages.

Samsung also claims Apple violated two of its patents, and is seeking to ban the iPhone 5.

In court on Tuesday, Apple attorney Harold McElhinny said Samsung’s copying of Apple technology has greatly harmed the iPhone maker and turned the smartphone market into a two horse race.

“Unlike in fairly tales, we know that Samsung’s illegal strategy has been wildly successful,” McElhinny said.

While Apple called several engineers to testify at trial, Samsung did not produce any of its own software executives to discuss the creation of its phones, he said.

“None of them were brave enough to come here and face cross examination,” McElhinny said.

Attorneys for Samsung were scheduled to deliver their closing statement later on Tuesday.

Samsung’s phones run on the Android mobile operating system developed by Google Inc. During trial, Samsung pointed out that some of the features Apple claims to own were actually invented by Google, and called a handful of Google executives to testify on its behalf.

The case in U.S. District Court, Northern District of California is Apple Inc vs Samsung Electronics Co Ltd, 12-630.

(Reporting by Dan Levine; Editing by Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/l1c1Iqljv3k/story01.htm

Wall St. climbs, lifted by Merck, Sprint on rosy earnings


NEW YORK (Reuters) – U.S. stocks edged higher on Tuesday following better-than-expected earnings from Merck Co and Sprint Corp.

The Dow Jones industrial average outperformed the broader market as component Merck Co (MRK.N)’s shares jumped nearly 3 percent to $58.31 after its earnings report. [ID:nL2N0NL0F6] Britain’s Reckitt Benckiser Group Plc (RB.L) confirmed talks to buy Merck’s consumer health business, the latest asset up for grabs in a wave of recent pharmaceutical deals.

On the SP, energy and financial stocks were among the top gainers, with the energy sector .SPNY up 1.2 percent and the financial sector .SPSY up 0.6 percent.

Sprint Corp (S.N) shares jumped more than 10 percent to $8.18 after the No. 3 U.S. mobile provider reported an increase in quarterly revenue, as expected, due to a new billing plan that lowered wireless expenses.

But Coach Inc (COH.N) reported a sharp drop in North American sales as the upscale leather goods maker continued to lose ground to fast-growing rivals in the U.S. handbags market. The stock slumped more than 8.5 percent to $46.15 and weighed on the SP retail sector .SPXRT which fell 0.2 percent.

Archer Daniels Midland Co (ADM.N) shares fell 3.4 percent to $42.87 after its first-quarter profit and sales missed Wall Street estimates.

Twitter (TWTR.N) is due to report after the market closes Tuesday.

The Dow Jones industrial average .DJI rose 74.85 points or 0.46 percent, to 16,523.59, the SP 500 .SPX gained 7.13 points, or 0.38 percent, to 1,876.56 and the Nasdaq Composite .IXIC added 18.691 points, or 0.46 percent, to 4,093.092.

“The market has grown more volatile, in a sense that it reacts more to daily news like the earnings. In general, the market is trying to figure out a level that investors are comfortable with and that is why we are seeing big daily swings recently,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

The Fed starts a two-day policy meeting on Tuesday and is expected to again scale back its monthly bond purchase program and provide guidance on when it might raise interest rates.

Data showed U.S. consumer confidence dipped in April but remained near a six-year high, while home prices rose in February, suggesting the economy continued to gain momentum after a winter lull.

The Conference Board said its index of consumer attitudes dipped to 82.3, the second-highest reading since January 2008, from an upwardly revised 83.9 in March.

“While the news is hardly a harbinger of gloom, the critical employment measures hidden within the report show little evidence that the labor market is on the cusp of a boom anytime soon,” said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in Greenwich, Connecticut.

(Editing by Bernadette Baum)

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

U.S. consumer confidence near six-year high, home prices rise


NEW YORK (Reuters) – U.S. consumer confidence dipped in April but remained near a six-year high, while home prices rose in February, suggesting the economy continued to regain momentum after a winter lull.

The Conference Board said its index of consumer attitudes dipped to 82.3, the second-highest reading since January 2008, from an upwardly revised 83.9 in March.

An unusually cold and snowy winter disrupted economic activity early in the year.

The expectations index rose to its highest since August, hitting 84.9 in April from an upwardly revised 84.8 in March, while the present situation index fell to 78.3 versus an upwardly revised 82.5 last month.

“While sentiment regarding current conditions may have slipped a bit, consumers do not foresee the economy, or the labor market, losing the momentum that has been building up over the past several months,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.

A separate report showed the SP/Case-Shiller composite index of home prices in 20 metropolitan areas rose 0.8 percent in February on a seasonally adjusted basis, beating the expectation for a 0.7 percent gain according to a Reuters survey.

The monthly price increase mirrored the one in January, while prices were up 12.9 percent from a year ago, compared with a year-on-year gain of 13.2 percent in January.

The rise, however, failed to offset other recent data pointing to a loss of momentum in housing.

“Despite continued price gains, most other housing statistics are weak,” said David Blitzer, chairman of the index committee at SP Dow Jones Indices, who cited new and existing home sales data.

An index of housing sector stocks slipped 0.3 percent Tuesday and is down 10 percent from its 2014 high set in late February

Data last week showed sales of new U.S. single-family homes tumbled to their lowest level in eight months in March, dashing hopes for a quick turnaround in the sector.

(Reporting Rodrigo Campos and Ryan Vlastelica; Editing by Andrea Ricci and Dan Grebler)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/SOiiW8gl0B0/story01.htm