News Archive

Stocks head for worst quarter since euro crisis, dollar reigns

LONDON (Reuters) – World markets were in hesitant mood on Tuesday as investors wondered what China’s response would be to civil unrest in Hong Kong, while the U.S. dollar eased off the throttle after its biggest quarterly gain in six years.

Like most corners of the world, Europe saw limited appetite for risk early on before euro zone inflation data ECONG7 and after what has been the toughest quarter for global stocks since the peak of the euro crisis.

The FTSEurofirst 300 .FTEU3 index of top European shares started up 0.2 percent at 1,374.36 points, but it was barely changed on the month despite this month’s interest rate cut and new dump of cheap funding from the European Central Bank.

German government bonds DE10YT=TWEB, Europe’s benchmark in the fixed income market, were also set for their first rise in yields in seven months while the euro was staring at its biggest monthly drop since February 2013. [GVD/EUR][FRX/]

“Each time we have seen market consolidations this year, there has been an upward readjustment just a few weeks later. Will this time be different? I’m not convinced,” said Yannick Naud, portfolio manager at Sturgeon Capital in London.

On a broader scale, MSCI’s 45-country All World stock index .MIWD00000PUS, was on course for a drop of almost 3 percent on the month and its and biggest quarterly fall since Q2 2012 when the euro zone’s debt crisis was at its most intense.

As well as signs the era of record low interest rates is finally coming to an end in the world’s largest economy, the United States, investors have also had to cope with a host of global geopolitical difficulties in recent months.

In the latest of those tensions, tens of thousands of pro-democracy protesters blocked Hong Kong streets on Tuesday, in one of the biggest political challenges to Beijing since the Tiananmen Square crackdown 25 years ago.

Hong Kong’s Hang Seng Index .HSI shed another 1.3 percent to its lowest in three months. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.3 percent having already fallen sharply on Monday.

The unrest was an added complication for investors amid long-standing concerns about the health of China’s economy.

An HSBC survey of manufacturing (PMI) for September disappointed slightly by showing a final reading of 50.2, steady on August but down from its preliminary 50.5.

One bright spot was a measure of new export orders which climbed to a 4-1/2-year-high of 54.5. The official version of the PMI is due on Wednesday and analysts look for a steady outcome around 51.0. ECONCN

Chinese shares have been less troubled by events in Hong Kong, perhaps because news and images of the protests are hard to come by on the mainland. The Shanghai index .SSEC inched up 0.1 percent to near a 19-month peak.


The U.S. dollar hovered at a four-year peak against a basket of major currencies .DXY and its gains of 3.5 percent so far this month were the largest since February 2013 and in six years on a quarterly basis. FRX/

The scale of the gains tempted profit-takers on Tuesday and the dollar took a small step back to 109.42 yen JPY= and off a six-year high of 109.75 hit overnight.

The euro came within a whisker of its November 2012 trough of $1.2661 EUR= before edging back up to $1.2678.

Investors awaited September inflation data for the euro zone due at 5 a.m. EDT, seeking cues on the likely response from the ECB when it meets in Naples on Thursday.

One of the worst-performing major currencies this month was the New Zealand dollar, which is down nearly 7 percent.

Data on Monday confirming the Reserve Bank of New Zealand had intervened to weaken the currency sent it as low as $0.7708 NZD=D4, before a bounce to $0.7802.

The stronger U.S. dollar has been a heavy weight on many commodities since it makes them more expensive for buyers using other currencies.

Spot gold XAU= was down at $1,216.50 an ounce, not far from last week’s trough at $1,206.85 and poised to post its sharpest monthly loss since June 2013.

U.S. crude oil CLc1 eased a couple of cents to $94.55 a barrel, after managing a modest rally on Monday. Brent LCoc1 nudged up 5 cents to $97.25 but remained uncomfortably close to its recent two-year low.

Oil prices on both sides of the Atlantic were on track for their third monthly loss in a row due to ample supply and subdued demand in Europe and China.

(Additional reporting by Lionel Laurent; Editing by Angus MacSwan)

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China OKs iPhone 6 sale after Apple addresses security concerns

BEIJING (Reuters) – The iPhone 6 will be sold in China from Oct 17, after rigorous regulator scrutiny led to Apple Inc (AAPL.O) reassuring the Chinese government that the smartphones did not have security “backdoors” through which U.S. agencies can access users’ data.

Apple won approval to sell the phones after also addressing risks of personal information leaks related to the operating system’s diagnostic tools, China’s Ministry of Industry and Information Technology (MIIT) said on its website on Tuesday.

The iPhone 6 and 6 Plus were released on Sept 19 in the United States and elsewhere, but regulatory delay meant Chinese consumers had to wait. The initial lack of a China launch date caught analysts by surprise because of Apple’s repeated comments about the importance of the world’s biggest smartphone market.

Apple and other American technology companies have been subject to greater scrutiny in China after former U.S. National Security Agency contractor Edward Snowden last year revealed spying and surveillance campaigns, including programs that obtained private data through U.S. technology firms.

In July, Chinese state media accused Apple of providing user data to U.S. agencies and called for ‘severe punishment’. Apple responded by publicly denying the existence of backdoors.

The notice of approval for the iPhone 6 could potentially mark the ministry’s first for a specific smartphone, suggesting Apple is subject to more scrutiny than its peers in a year in which the U.S. tech giant will release a new phone on all three of China’s major mobile networks for the first time.


The MIIT said it conducted “rigorous security testing” on the iPhone 6 and held talks with Apple on the issue, and that Apple shared with the ministry materials related to the potential security issues.

One of the concerns the MIIT raised was over a third party’s ability to take control of a computer that had been given trusted access to the phone by a user. They also queried Apple on the ability of staff repairing iPhones to access user data through background services.

Apple told the MIIT it had adopted new security measures in its latest smartphone operating system, iOS 8, and promised that it had never installed backdoors into its products or services to allow access for any government agency in any country, the MIIT said.

Apple earlier this month was hiring a head of law enforcement in Beijing to deal with user data requests from China’s government, after it last month began storing private data on Chinese soil for the first time.


With regulatory approval from the world’s largest smartphone market, analysts expect the iPhone 6 and 6 Plus to sell well in China, where many people prefer phones with larger screens.

The phone will be made available on all three of China’s state-owned wireless carriers: China Mobile Ltd (0941.HK), China Unicom Hong Kong Ltd (0762.HK) and China Telecom Corp Ltd (0728.HK). Together, the three had more than 1.27 billion mobile subscribers in August.

“iPhone 6 and iPhone 6 Plus customers will have access to high-speed mobile networks from China Mobile, China Telecom and China Unicom,” Apple Chief Executive Tim Cook said in a press release on Tuesday.

The iPhone 6 will be available in gold, silver and gray with a suggested retail price of 5,288 yuan ($860.16) for the cheapest model with 16GB of storage. The iPhone 6 Plus, in the same colors, will be 6,088 yuan ($990.29) for the cheapest model, also with 16GB of storage. The most expensive iPhone 6 Plus with 128GB storage will be 7,788 yuan ($1,266.82).

The phones will also be available online and by reservation from Apple stores.

Apple sold a record 10 million iPhone 6 handsets in the first weekend after their launch, which excluded China. Last year, the U.S. tech firm sold 9 million iPhone 5S and 5C models in 11 countries, including China, in the same period.

The Cupertino, California-based company said iPhone sales in China grew 50 percent during in April-June from a year earlier, effectively salvaging an otherwise lackluster quarter. The strong sales came despite signs that Chinese consumers were waiting for the next-generation iPhone 6, analysts said.

(1 US dollar = 6.1477 Chinese yuan)

(Additional reporting by Beijing Newsroom; Editing by Miral Fahmy and Christopher Cushing)

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China final Sept HSBC PMI steady on firmer global demand but risks remain

BEIJING (Reuters) – China’s vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed on Tuesday, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks.

The final HSBC/Markit Manufacturing Purchasing Managers’ Index(PMI) hovered at 50.2 in September, unchanged from the August reading which was a three-month low, but lower than a preliminary reading of 50.5.

A sub-index measuring new export orders, a gauge of external demand, expanded to a 4-1/2-year-high of 54.5, though domestic demand appeared soft. The 50 mark separates expansion from contraction in activity on a monthly basis.

More worrisome, the survey showed further weakness in the job market, with the sub-index for manufacturing employment shrinking for the 11th consecutive month, which is bound to concern China’s Communist leaders.

The world’s second-largest economy has stumbled this year as a slowdown in the housing market further weighs on softening domestic demand.

With the property market expected to cool further, economists believe policymakers will have to roll out more stimulus measures in coming months to meet the government’s 2014 growth target of around 7.5 percent.

“Overall, the data in September suggests that manufacturing activity continues to expand at a slow pace,” said Qu Hongbin, chief economist for China at HSBC.

“We think the risks to growth are still on the downside and warrant more accommodative monetary as well as fiscal policies.”

Despite the strong surge in export orders, the overall output level fell to its lowest in four months, but managed to hold above the 50-point level.

Shares in Shanghai .SSEC gave up modest early gains and dipped into the red after the report.


Despite a run of weak economic readings, Chinese leaders have said repeatedly that no dramatic change in policy is imminent.

Premier Li Keqiang said earlier this month that China cannot rely on loose credit to lift its economy and would continue to make only “targeted adjustments” to boost activity.[ID:nL3N0RA2IY]

The latest worrying data came at the weekend, with news that profits at China’s industrial companies fell in August from a year earlier. Many of the country’s biggest firms are already receiving heavy subsidies from the state. [ID:nL3N0RS03I]

A flash PMI by HSBC/Markit that was released last week had showed factory employment skidding to a six-year-low in September. Tuesday’s survey showed the sub-index was revised up markedly in the final version, though it showed the labour market was shrinking nonetheless.

A soft labour market is a worry for Chinese policymakers, who fear that rising unemployment could fuel social unrest and threaten the government’s grip on power.

“The domestic economy is very weak and is being brought down by the property market,” said Tao Wang, an economist at UBS in Hong Kong.

“But until there is clear evidence of weakness in the labour market, the authorities won’t be responding,” she said in reference to the soft employment data in the PMI.

China will release its official factory PMI on Wednesday. It is also expected to show growth steadied. [ID:nL3N0RR32J]

The official PMI is focused on larger factories that belong to the government, as opposed to the HSBC/Markit PMI survey which is biased towards smaller manufacturers in the private sector.

Smaller firms are facing greater financial stresses as some cash-strapped customers are taking longer to pay their bills. Smaller companies are also having more trouble getting credit as banks grow more cautious in the face of mounting bad loans and fears of defaults.

The Industrial and Commercial Bank of China (1398.HK) (601398.SS), the country’s biggest bank, said 80 percent of new non-performing loans in the second quarter came from the manufacturing and wholesale sectors.

China’s banking regulator said on Sunday it had issued revised internal control guidelines for banks to ensure that appropriate risk management controls are adopted, while increasing penalties for any violations.

Issuance of the guidelines came days after China’s central bank began a targeted program to make available 500 billion yuan ($81.6 billion) in short-term funds to China’s five biggest banks to help the economy by keeping borrowing costs affordable.

(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Kim Coghill)

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Retirement plan advisers set to flee Pimco after Gross exit

(Reuters) – Bill Gross’s sudden departure from Pimco and the Total Return Fund he ran for 27 years was the last straw for Jim Phillips, president of Retirement Resources, a Peabody, Massachusetts-based firm that advises 401(k) plans with $50 million to $100 million in assets. He’s advising clients to head for the exits.

After 16 straight months of outflows and a 3.49 percent return over the past year, worse than 75 percent of its peers, the $222 billion Total Return Fund (PMBIX.O) is failing Phillip’s standards when it comes to meeting the retirement needs of his customers.

“We do not have ongoing confidence in the way the fund is being managed,” Phillips said. “We are recommending to clients that we replace this fund with another one.”

Philips said he joined a conference call Monday with Pimco chief executive Doug Hodge and some of the company’s portfolio managers, but said the conversation “doesn’t change any actions that we have planned.”

About 27,000 of the largest corporate 401(k) plans in the country had money in the Total Return Fund as of the end of 2012, according to the most recent data from BrightScope, which ranks retirement plans. The roster includes Wal-Mart’s $18 billion plan, the largest in the country by assets, as well as Raytheon’s and Verizon’s.

Total Return holds $88.3 billion of the $3 trillion in 401(k) assets listed in BrightScope’s database of more than 50,000 of the largest plans, the biggest mutual fund in the database.

Wal-Mart didn’t return calls and Raytheon and Verizon declined to comment for this article.

Phillips isn’t alone in his dissatisfaction with the fund – investors have pulled $25 billion from Total Return Fund so far this year. But a bad year that began with a public falling out between Gross and top deputy Mohamed El-Erian in January and has now seen the Pimco co-founder quit is causing many 401(k) plan consultants and advisers to put the Total Return Fund on their watch lists, and in some cases start replacing it.

Though companies usually make decisions about where to invest their retirement funds during investment committee meetings, which typically occur quarterly, Gross’ exit could prompt companies to have meetings or calls sooner than scheduled, said Martin Schmidt of H2Solutions, a Wheaton, Illinois-based consultant for 401(k) plans with assets from $150 million to $4 billion.

“I have sent out emails to clients telling them that we need to start looking at alternatives,” Schmidt said. He said he hasn’t heard from anyone at Pimco.

Once an employer decides to switch a fund out of its plan, it can take three to five months to make the change and give employees the required 30-days’ notice.


Gross’s new fund, the $13 million Unconstrained Bond Fund from Janus Capital, is unlikely to be the destination for any funds that decide to jump ship on Total Return, given that it’s only been in operation since May and has produced a negative 0.95 percent return since inception, according to Morningstar.

“We have to see at least a three-year track record and we actually prefer five,” said Troy Hammond, president and chief executive officer of Pensionmark Retirement Group, a Santa Barbara, California-based adviser that serves over 2,000 small 401(k) plans across the country.

There is also the question of whether Gross will have the same level of support and resources at Janus as he did at Pimco.

“If Bill were leaving with the top 10 people from Pimco, like Jeffrey Gundlach did when he left TCW, that would be different,” said Mendel Melzer, chief investment officer for The Newport Group, a Heathrow, Florida-based consultant to institutional investors, including 401(k) plans with assets between $20 million and $1.5 billion. “But this is just Bill Gross leaving on his own and it is hard to say that the track record he accumulated at Pimco should translate into the Janus fund.”

Melzer is advising clients to see how the new Pimco team does with the Total Return Fund, which has been on Newport’s watch list since earlier this year.

“We will keep it on a very short leash,” Melzer said. “If it does not improve in the next two quarters we will look at alternatives.”

(Reporting by Jessica Toonkel; editing by Linda Stern and John Pickering)

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Strong dollar, rising volatility mark third-quarter markets. Same again in fourth quarter?

LONDON (Reuters) – The biggest scramble for dollars and sharpest rise in currency volatility for years were the hallmarks of financial markets in the third quarter, developments which have intensified worries that the final three months of the year might be equally bumpy.

The dollar’s 7-percent surge was its biggest quarterly rise since the same period in 2008, when the collapse of Lehman Brothers triggered the global financial crisis and a worldwide rush into the U.S. currency.

The swing of such a magnitude in the world’s reserve currency, which is used to price almost everything in global commerce from Apple shares to zinc, permeated all financial markets. It lifted volatility, and crushed the value of commodities and emerging market currencies in the process.

The biggest gainer from 22 assets and market instruments tracked by Reuters was China-listed A-shares, which rose 16.1 percent, and the biggest loser was Brent crude oil futures, which fell almost 14 percent. More than half of the 22 fell.

Much of what the fourth quarter holds will hinge on how much faith investors retain in their collective belief that the U.S. economy will outperform its peers, the Federal Reserve will soon raise interest rates, and the dollar will strengthen further.

Contrast that to the euro zone, where deflation fears grew in the third quarter, the European Central Bank eased historically loose policy even further and, remarkably, 10-year German government bond yields fell below 1 percent.

“The dollar move is not going to hurt the U.S. economy in any appreciable way, certainly not at this point,” Deutsche Bank chief U.S. economist, Joe LaVorgna, said, noting that the United States is producing much more of its own energy and so slashing its import bill and trade deficit.

“This is all good. The Fed has been perpetually disappointed by the evolution of the economy, but monetary policy has to be forward-looking,” he said.

Investors buying the dollar against a basket of six major currencies on July 1 would be 7.4 percent better off today and almost 8 percent in the black if they had bought the dollar against the Japanese yen.

The dollar also rose against the euro, which buckled under the weight of grim views on euro zone growth and inflation.

Throw in the a late flurry of jitters around the Scottish independence referendum this month, and implied volatility in major exchange rates hit their highest levels this year. In the case of short-dated pricing, especially in sterling, it was the most volatile period in years.

Morgan Stanley, global head of currency strategy, Hans Redekerat, expects this to remain a feature of the coming months as the dollar rises further and exchange rates provide the shock absorber to shifting global economic plates.

“Economic decoupling never takes place, so in an environment of non-synchronized global growth the exchange rate always comes back under the spotlight,” he said.

“Two thirds of global funding costs is determined by U.S. dollar funding rates. Volatility is going to stay with us and is going to normalize,” he said.

European assets suffered across the board. The euro fell to a two-year low against the dollar, euro zone stocks lost almost 10 percent and peripheral sovereign bonds slipped.

The exception, of course, were German bonds. The surge in demand for the safest of all euro zone bonds pushed the 10-year yield below 1 percent, and 2-year yields turned negative.

A stronger dollar and rising volatility bodes ill for emerging markets, as investors become less inclined to take risks and more inclined to put their cash in relatively safe and attractive developed markets, notably the United States.

Emerging market local currency bonds fell about 5 percent in the third quarter and most emerging currencies suffered. Brazil’s real fell to a 6-year low on Monday, posting a fall of about 10 percent on the month.

Similarly, high-yield bonds, which had seen unparalleled inflows in the first half of the year, also started to feel the pinch. They fell more than 3 percent in the third quarter.

But some analysts point out that the spike in volatility and the dollar later in the quarter followed the slump in volatility across many equity, bond and currency markets earlier in the period to lows not seen for years, if ever.

“Seen through the lens of history and economics, the recent dollar move is small,” according to Goldman Sachs.

(Editing by Louise Ireland)

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Ford shares tumble on lower profit outlook for 2014-2015

DEARBORN (Reuters) – Higher recall costs in North America and steeper losses in Russia and South America have caused Ford Motor Co (F.N) to slash its forecast for pretax profit this year to $6 billion, from $7 billion to $8 billion previously, executives told investors at a briefing on Monday.

Bob Shanks, Ford’s chief financial officer, also said the company’s 2015 pretax profit is now expected to rise to between $8.5 billion and $9.5 billion, versus analysts’ estimates of $10.6 billion.

Ford shares closed down 7.5 percent at $15.11 on Monday and fell further in after-hours trading to $15.

The No. 2 U.S. automaker revealed the bad news during the first investor day it has held under the leadership of Chief Executive Mark Fields, who took reins of the company from Alan Mulally on July 1. Mulally is credited with reversing a steep decline at Ford and returning it to profitability and an investment grade rating.

Fields said he is not concerned about what he sees as short-term bad news ahead of what he calls “a growth story,” including an increase in Ford’s global auto sales to 9.4 million vehicles by 2020 from 6.2 million in 2013.

He also said that laying out the bad news to investors at a conference center in Dearborn, Michigan near Ford headquarters was a sign of progress from the days when the company delayed action on difficult issues.

General Motors Co (GM.N) plans to host a similar investor day on Wednesday in Detroit.

Ford CFO Shanks said the company’s money-losing operations are targeted to achieve profit margins by 2020 of 7 percent to 9 percent in South America and 3 percent to 5 percent in Europe.

Repairs on recalled vehicles, mainly in North America, will cost the company about $1 billion, and losses in South America are expected to be higher than previously forecast, at nearly $1 billion, Shanks said.

Shanks also said that Ford now expects to lose about $300 million this year in Russia, more than previously expected.

Ford is forecasting a pretax operating profit margin of about 8 percent by 2020, Shanks said, adding that the company targets break-even at two-thirds of wholesale volume by 2018.

Ford said that the company will continue to make losses in South America in 2015, but not as much as this year.

Ford said it is on track for the important launch of the 2015 F-150 pickup truck. The first sales of that truck to U.S. consumers will take place late this year, said Joe Hinrichs, head of Ford’s operations in North America and South America.

(Reporting by Bernie Woodall in Dearborn; Editing by Meredith Mazzilli, Matthew Lewis and Steve Orlofsky)

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Pimco staff ‘frantic and sad’ in wake of Bill Gross sudden exit

NEW YORK, Reuters – Shock and disbelief lingered at Pimco’s sleek Newport Beach, California, headquarters on Monday, 72 hours after the investment firm was rocked by the sudden defection of co-founder Bill Gross to far-smaller rival Janus Capital Group.

As executives worked at damage control and to promote the new faces behind investment decision-making at the $2 trillion asset manager, some employees were struggling to cope with the tsunami that swamped their world on Friday.

“I couldn’t believe it on Friday, and I still can’t believe it now,” one employee who was not authorized to speak publicly told Reuters. “We lost Mohamed El-Erian in January and now Bill Gross. It’s been confusing, frantic and sad.”

The stunning turn of events kept Pimco executives working over the weekend and throughout Monday to soothe clients and staff rattled by the episode, which triggered flashbacks of the departure of El-Erian, once seen as Gross’s heir-apparent.

Pimco Chief Executive Officer Doug Hodge and Group Chief Investment Officer Dan Ivascyn convened a series of conference calls with clients and the media to field questions about the firm’s future and respond to concerns about how they and corporate parent, German insurer Allianz SE, had handled the affair.

After U.S. markets closed Monday, Hodge and Ivascyn were joined by President Jay Jacobs and global credit chief Mark Kiesel for a global staff meeting and video conference with all employees to boost morale, according to a source close to the situation.

A Pimco spokesperson confirmed that Hodge, Ivascyn, Jacobs and Kiesel spoke to all employees and added “that the mood in the firm is energized and focused.”

Among the efforts at containing the fallout was a 90-minute conversation with a Morningstar analyst Eric Jacobson, who has been a supporter of Gross and the firm’s flagship Total Return Fund, the world’s largest bond fund that Gross steered personally for more than a quarter century.

Jacobson would not disclose the substance of the conversation. On Friday he had placed his ratings under review for the flagship fund and all others he had rated.

Since the start of the year, investors have pulled $25 billion from the Pimco Total Return Fund and more than $65 billion over the past 16 months.

Hodge told Reuters on Sunday that Pimco was bracing for more investors to pull money: “The outflows that have happened – and that may happen – we stand by our clients. We are managing assets and are confident that the vast majority of clients will stand with us.”

Meanwhile, the firm worked to scrub out Gross’ cyber footprints, as well. Pimco’s Twitter feed deleted all tweets from Gross, who had once been a prolific tweeter.

His widely followed monthly Investment Outlook pieces, considered a must-read by investment professionals worldwide, were tucked out of sight as well, now residing in an archive section of the Pimco website.

Still, some signs of his long association with Pimco remain. Each of Pimco’s highly prized Morningstar awards – including those honoring Gross – are mounted in the same place at the entrance to the firm’s trading floor.

(Reporting By Jennifer Ablan; Editing by Dan Burns and John Pickering)

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Women lag in venture capital even as they make strides as entrepreneurs

SAN FRANCISCO (Reuters) – Women venture-capital partners are becoming scarcer even as more women entrepreneurs are winning venture cash, according to a report from Babson College.

The report, “Women Entrepreneurs 2014: Bridging the Gap in Venture Capital,” paints a picture of a start-up environment that is making strides in some areas, such as backing female entrepreneurs, even as the percentage of female venture capitalists slips.

About 15 percent of U.S. companies receiving venture-capital investment, meaning cash injections from venture firms in a business’s early days, included at least one woman on the executive team, according to the report. That compares with just 5 percent in 1999.

But just under 3 percent of companies receiving venture cash had female chief executive officers, according to the report.

At venture-capital firms globally, about 6 percent of partners were women, compared with 10 percent in 1999, the study showed. The numbers jibe with a Reuters study last month that showed that declining percentages of venture capitalists are women and that many top firms have no female partners at all.

Many female entrepreneurs say that buttressing the numbers of women venture capitalists is key to advancing the numbers of female entrepreneurs.

The Babson report seemingly backs that up, with women venture capitalists more than twice as likely as men to invest in start-ups with a woman on the management team. Larger, more established venture firms were also more likely to do so.

The report comes at a time when difficulties facing women in technology have hit the headlines.

    Examples include statistics showing low numbers of women at companies such as Facebook Inc and Google Inc; a lawsuit by a female founder of dating app Tinder alleging she was pushed aside; and three suits brought by female employees at venture firms alleging harassment or discrimination, or sometimes both.

The report’s authors recommend steps such as encouraging the investors who allocate their money to venture-capital funds to put pressure on venture firms to invest in more start-ups with women on the executive teams. Investors in venture-capital funds are typically endowments, pensions and the like.

Around the United States, women entrepreneurs are majority owners of an estimated 10 million businesses, or 36 percent of all businesses, the report says, citing data from the Small Business Administration.

The authors studied almost 7,000 U.S. companies that received venture funding from 2011 to 2013. For the statistics on percentages of female partners at venture-capital firms, they studied 2,234 firms in the United States and internationally.

(Reporting by Sarah McBride; Editing by Lisa Shumaker)

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Boeing to shift most defense work out of Washington state

WASHINGTON (Reuters) – Boeing Co (BA.N) on Monday said it would move the majority of its defense services and support work out of Washington state to other U.S. cities, affecting the jobs of about 2,000 of its 5,200 defense employees in the Puget Sound region.

The changes, first reported by Reuters earlier Monday, are part of ongoing efforts by Boeing to streamline its defense business, and will not affect its P-8A spy plane or KC-46 aerial refueling tanker programs. Both of those programs are based on commercial jetliners made in the area.

Boeing said the transition could take three years to complete and that it would shift as many affected workers as possible to the company’s growing commercial jetliner operations.

Chris Chadwick, chief executive officer of Boeing Defense, Space and Security, said the decision was difficult but necessary to improve the company’s competitiveness.

“This is necessary if we are going to differentiate ourselves from competitors and stay ahead of a rapidly changing global defense environment,” Chadwick said.

Union officials said the company has scheduled meetings with defense workers at key sites in the Puget Sound region on Tuesday and that managers and workers expect the company to announce work will be transferred to other parts of the country.

The state said the blow would be softened by its efforts to help its hundreds of defense suppliers adapt to declining U.S. defense spending.

“It’s disappointing but we’ve done a lot to mitigate the impact,” said Alex Pietsch, director of the state office of aerospace.

“It shows how lucky we are to have Boeing Commercial Airplanes in the state,” he added, referring to the state’s dominant share of Boeing’s jetliner business.

Last week the state got a $4.3 million grant to help defense suppliers transition to other industries. Last month, Washington established an alliance to help its military bases respond to budget cuts.

The job moves at Boeing are a symptom of reduced U.S. defense spending and “have nothing to do with the business climate in Washington state,” Pietsch said.

Boeing said most of the work would be relocated to Oklahoma City and St. Louis, where similar activities are done already, with a smaller share of the work to go to Jacksonville, Florida, and Patuxent River, Maryland.

In all, Oklahoma City could add about 900 jobs, while St. Louis could add 500 jobs, the company said.

Among the programs shifting to other cities are services and support work for the Airborne Warning and Control Systems (AWACS) program, as well as the F-22 fighter jet, which Boeing built together with Lockheed Martin Corp (LMT.N).

Jim O’Neill, who heads Boeing’s global services business, said shifting the work would allow the company to use its resources more efficiently.

Boeing is moving to cut $2 billion in costs from its defense business, in addition to the $4 billion in reductions announced in recent years in response to dwindling U.S. defense spending and increasing competition.

Defense analyst Loren Thompson said Boeing’s plan to move as many of the defense jobs as possible to its booming commercial operations would reduce the overall impact to the Washington state workforce. “The net job loss will be less than 1 percent,” Thompson said.

“Boeing’s commercial business is growing while its defense business is shrinking, so it’s logical that you would make these sorts of shifts as a way of using the workforce as efficiently as possible,” said Thompson, chief operating officer of the Virginia-based Lexington Institute.

Boeing has sought to cut overhead costs in its defense business to help offset revenue dragged lower by declining military spending.

The company is also trying to pump up arms exports.

(Editing by Matthew Lewis, Steve Orlofsky and Lisa Shumaker)

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