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Ford says it will reach global sales of 9.4 million vehicles by 2020

DETROIT (Reuters) – Ford Motor Co (F.N) will increase its global sales to 9.4 million vehicles by 2020 from 6.2 million vehicles in 2013, said Jim Farley, Ford’s sales chief.

Farley spoke at a gathering of Ford investors near its headquarters in Dearborn, Michigan on Monday.

(Reporting by Bernie Woodall; Editing by Meredith Mazzilli)

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With Pimco’s Gross out, Allianz tries to reassure investors

FRANKFURT/NEW YORK (Reuters) – Top executives of Pimco and its German parent, Allianz SE, scrambled on Monday to stem the outflow of money after the stunning exit of star bond manager Bill Gross last week, but even after months of internal strife Allianz said it plans to let Pimco continue to steer its own ship.

DoubleLine Capital, an investment firm that has been a major rival of Pimco, reported that it had its second biggest net inflow day ever on Friday, the day of Gross’s surprise departure.

On Monday, the chief executive of Pacific Investment Management Co., Doug Hodge, and its newly installed chief investment officer, Dan Ivascyn, who stepped into the post with Gross’ resignation on Friday, held calls with financial advisers from both Morgan Stanley and Merrill Lynch to try to stem the flow of client assets.

Los Angeles-based DoubleLine Capital took in between $400 million and $500 million in net inflows on Friday alone, Chief Executive Jeffrey Gundlach told Reuters. Investors continued shifting money to DoubleLine at a hectic pace on Monday, another source at the firm said.

Frankfurt-based insurer Allianz said it remains fully committed to Pimco but does not plan to step up its oversight of the Newport Beach, California-based operation it acquired about 15 years ago, even after Gross’ departure to join far-smaller rival Janus Capital Group capped months of turmoil.

Before the 70-year-old Gross left Pimco, the firm was managing nearly $2 trillion of assets. Its flagship bond fund, the Pimco Total Return Fund, the world’s largest fixed-income portfolio, long run by Gross personally, accounted for more than $220 billion alone.

On a conference call, top Allianz and Pimco executives tried their best to play down the departure of Gross, who has been dubbed the “Bond King” for his prowess in the fixed-income market. For the first time they also gave specifics about a long-simmering rift with Gross, saying there had been differences over the strategic direction of Pimco, which had prompted Gross to leave.

But despite the upheaval, which started eight months ago with the abrupt resignation of Pimco CEO Mohamed El-Erian following a row with Gross, Allianz gave no indication that it would exert greater control over the firm, as some investors have demanded.

Allianz Chief Executive Michael Diekmann, pressed on the issue of control, said it was important that the German group was not “over-managing or micro-managing a very successful unit.”

Allianz has long granted broad independence to Pimco, but Gross’ departure showed that the approach was not without risk. His resignation hit Allianz shares hard on Friday, knocking them 6 percent lower. They stabilized on Monday, closing up about 0.25 percent.


Gross co-founded Pimco in 1971, turning it into the world’s biggest bond investor. Allianz bought Pimco for $3.3 billion in 2000 and now garners nearly a third of its profits from Pimco.

But over the past year, as bonds lost their appeal amid rock-bottom interest rates, Gross appeared to lose his reading on the bond market. The Total Return Fund has lagged the benchmark Barclays index over the last year and it trails 75 percent of rival funds, according to fund tracker Morningstar.

In August alone, the Total Return Fund had outflows of $3.9 billion, marking a 16th straight month of outflows.

At the same time Gross’ increasingly erratic behavior led Pimco to begin to distance itself from him in meetings with clients. Some investors began to see Gross as a liability amid reports of clashes with Pimco colleagues, most notably El-Erian, who remains an adviser to Allianz after leaving Pimco in January.

“It became clear over the course of this year that Pimco’s leadership and Bill had fundamental differences about how to take Pimco forward,” Hodge said on Monday, pointing to rifts over strategic direction, management style and media strategy.

“Those were the ones that broadly were at issue with Bill and as a result, his decision to resign.”

Hodge said he had spent the weekend reaching out to big institutional clients to reassure them, adding that the “vast majority” were standing by Pimco.


Pension funds, fund analysts, and wealth managers signaled that the changes in Pimco’s leadership and investment management have prompted them to review their decision to invest with the firm.

The North Dakota Retirement and Investment Office plans to meet with Pimco this week, David Hunter, the NDRIO executive director and chief investment officer, said in an email to Reuters. NDRIO oversaw $9.4 billion in total assets as of June 30. Approximately $490 million of that was with Pimco as of the end of August, Hunter said.

Morningstar, whose star rating system is influential among wealth advisers, said that it was reviewing its ratings of all Pimco managed funds, while money management firms announced that they are no longer sending additional client assets to the firm.

People’s Wealth Management, which has approximately $300 million invested with Pimco, is now sending dollars that were once marked to Pimco to a Fidelity bond fund, said Karissa McDonough, a fixed income strategist at the firm.

Despite his lackluster performance this year, some advisers were in the process of following Gross to Denver-based Janus, where Gross will take over a new and relatively tiny bond fund starting in October.

“The only time we really lost money is when we didn’t listen to Bill Gross,” said Ronald Knipping, principal of Michigan-based Rehmann Financial, which manages about $3.5 billion for retail investors.

“He may underperform some times, but we haven’t made a bad mistake so far,” he added.

(Additional reporting by Jennifer Ablan, Jed Horowitz and Luciana Lopez; Writing by David Randall and Kathrin Jones; Editing by Dan Burns and Leslie Adler)

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Wall St. ends down on Hong Kong tensions, Ford outlook

NEW YORK (Reuters) – U.S. stocks ended lower on Monday following protests in Hong Kong that added to worries about Chinese growth and after a disappointing forecast from Ford Motor Co(F.N).

The SP consumer discretionary sector.SPLRCD, down 0.6 percent, had the most losses. Ford shares fell 7.5 percent and the stock was the SP’s biggest percentage decliner after it lowered its outlook late during the session, saying North American margins will be at the low end of its previous guidance.

But the market ended well off its lows as worries about tensions in Hong Kong started the day off with losses of nearly 1 percent.

“The market continues to get hit with a lot of negative news, and the latest was the problems in Hong Kong,” said Bucky Hellwig, senior vice president at BBT Wealth Management in Birmingham, Alabama.

But investors might take a more upbeat view of the market heading into the fourth quarter and ahead of third-quarter earnings, he said.

“Seasonally, we’re entering perhaps a favorable period for the equity market,” Hellwig added.

The Dow Jones Industrial average .DJI fell 41.93 points, or 0.25 percent, to 17,071.22; the SP 500 .SPX lost 5.05 points, or 0.25 percent, to 1,977.8; and the Nasdaq Composite .IXIC dropped 6.34 points, or 0.14 percent, to 4,505.85.

The largest percentage gainer on the New York Stock Exchange was Athlon Energy Inc(ATHL.N), which rose 24.80 percent, while the largest percentage decliner was Civeo Corp(CVEO.N), down 49.59 percent.

Besides Ford, the most active shares on the NYSE included Brazil’s Petrobras (PBR.N), down 10.69 percent to $14.70.

On the Nasdaq, Tibco Software Inc (TIBX.O), up 21.2 percent at $23.65; Apple Inc(AAPL.O), down 0.6 percent at $100.11, and Zynga Inc(ZNGA.O), down 1.4 percent at $2.79, were among the most actively traded.

Declining issues outnumbered advancing ones on the NYSE by 1,801 to 1,271, for a 1.42-to-1 ratio on the downside. On the Nasdaq, 1,502 issues fell and 1,183 advanced for a 1.27-to-1 ratio favoring decliners.

The benchmark SP 500 index posted 13 new 52-week highs and 12 new lows. The Nasdaq Composite recorded 40 new highs and 129 new lows.

(Editing by Nick Zieminski and Andre Grenon)

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Boeing to shift some defense work out of Washington state: sources

WASHINGTON (Reuters) – Boeing Co (BA.N) plans to announce further streamlining of its defense business on Tuesday, moving significant portions of its defense operations out of Washington state, according to multiple sources familiar with the matter.

The consolidation would focus on defense support services and would not affect Boeing’s P-8A spy plane or KC-46 aerial refueling tanker programs, the sources said. Both programs are built on commercial jetliners made in the Puget Sound region of Washington state.

Many of the workers affected will be shifted to the company’s commercial jetliner operations, which are growing, said one of the sources on Monday.

Boeing declined to comment.

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.

“We’re hearing from managers and members that the company is going to make an announcement that a large amount of Puget Sound defense work is about to be moved out of the state,” said Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace (SPEEA).

About two dozen machinist jobs are expected to move to Huntington Beach, California, according to a source familiar with the matter. Boeing’s machinist workforce numbers about 31,000, but only a few hundred work on defense.

It was not immediately known where other work would be relocated or how many workers would be affected. About 2,258 of SPEEA’s 21,900 members in the state work in Boeing Defense, Space and Security, the union said.

The move is part of Boeing’s effort to cut an additional $2 billion in costs from its defense business on top of $4 billion in reductions already announced in recent years in response to dwindling U.S. defense spending and increasing competition.

Defense analyst Loren Thompson said Boeing’s plan was to move as many of the defense jobs as possible to its booming commercial operations, which 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 reduce costs in its defense business to help offset revenue dragged lower by declining military spending.

The company is also seeking to increase its foreign sales of weapons.

(Editing by Matthew Lewis)

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Alibaba options active in U.S. trading debut

NEW YORK (Reuters) – Chinese e-commerce heavyweight Alibaba Group’s options were among the most active on Monday, their first day of trading, with an even mix of bullish and bearish bets.

The mix implies equal numbers of bets on the Alibaba stock climbing or falling from current levels. The company’s shares were down 2 percent at $88.80 on Monday.

Options volume for Alibaba was 122,000 contracts, with 65,000 calls and 57,000 puts traded on Monday, according to data from options analytics firm Trade Alert, making it the day’s tenth most active name in the options market.

The volume was about a third of the one-day record volume of 365,000 contracts on Facebook Inc that traded in its options market debut in May 2012.

“It’s a tame opening for the first day of options trading,” said Brian Overby, senior options analyst at online brokerage TradeKing in Charlotte, North Carolina.

The 30-day implied volatility for the options was at 41.54 percent according to Livevol data. Implied volatility of Chinese Internet stocks Weibo Corp and Baidu Inc were at 60.32 percent and 34.16 percent, respectively.

Implied volatility, a measure of the risk that big moves in the stock pose and a key factor in setting options prices, is typically high for stocks that have recently had their initial public offering.

“I am still showing Alibaba on the easy-to-borrow stocks list so there are not a lot of driving factors to add volatility,” Overby said.

Short sellers, when dealing with a stock that is difficult to borrow, sometimes take to the options market to express their short bias and bet on a drop in the stock’s price.

The annual cost to borrow Alibaba shares has varied widely in the days since its initial public offering on Sept. 19. It started out in the 25 percent region but soon dropped to just 0.2 percent and has stayed at about that level, according to data from SunGard’s Astec Analytics, indicating little difficulty in making short bets in the name.

“In Friday’s session about 8 percent of all shares currently being borrowed were returned,” said Karl Loomes, market analyst at SunGard’s Astec Analytics.

Overall, about 22 percent of shares available for borrowing were being used for short bets, according to data from Markit.

TradeKing’s Overby expects implied volatility for Alibaba’s options to come in and go somewhere toward the 30-25 percent level over the next week.

At a size of more than $25 billion, Alibaba’s IPO is ranked as the world’s biggest with some 368 million shares.

(Reporting by Saqib Iqbal Ahmed; editing by Andrew Hay and Richard Chang)

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Colombian gold miners hit by court ruling

A Colombian court has ruled 11 companies must stop gold mining in a nature reserve, as the country and mining association look to shore up regulation in an industry historically hampered by illegal operators.

The Antioquia superior court ordered the National Mining Agency (NMA) to evict miners from a 50,000ha protected area in the north-western Chocó area, home to the Embera Katío indigenous people. Miners with operations in the area include AngloGold Ashanti Ltd Exploraciones Choco Colombia, Gongora and El Molino, BN Americas reported.

“Since starting operating two and a half years ago, the NMA has not given titles that cross wholly or partly reserved areas,” NMA’s president Natalia Gutiérrez said. The concessions were awarded back in 2008 prior to these areas being classified as protected, Gutiérrez said.

In a 2010-2011 census on Colombian mining activity, Minminas, the mining ministry, registered 14,357 mining production units. 63% of these, or more than 9000, did not have mining titles.

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Exclusive: NY targets Commerzbank employees in sanctions accord

NEW YORK (Reuters) – New York’s financial regulator wants some Commerzbank AG (CBKG.DE) employees to be fired as part of a settlement over allegations the German lender improperly processed transactions with Iran and other countries facing U.S. sanctions, according to people familiar with the matter.

Commerzbank is nearing an agreement to pay some $650 million to U.S. authorities over sanctions-related violations, with almost half going to the regulator, New York’s Department of Financial Services, Reuters has reported.

The bank, which is 17 percent owned by the German government, would join more than a half dozen foreign banks that have already settled with U.S. authorities for similar wrongdoing.

In Commerzbank’s case, the department directed the bank to take steps to terminate a handful of employees who engaged in misconduct, one source said. The source did not reveal the names of executives who may face punishment.

It is also unclear whether the employees will be dismissed or be disciplined in other ways, sources said, in part due to Germany’s strong labor laws and how long ago the alleged misdeeds took place.

Matthew Anderson, a spokesman for the New York regulator, did not return calls for comment. Margarita Thiel, a spokeswoman for Commerzbank, declined comment.

For months, Benjamin Lawsky, superintendent of the department, has said it is necessary to do more than penalize institutions for wrongdoing.

“If you’re not holding individuals accountable, you’re not going to get the full effects of deterrence,” the regulator reiterated at an event in lower Manhattan last week.

In addition to pressing for employees involved in misconduct to lose their jobs, Lawsky said he might seek other sanctions, such as clawing back bonuses. As a regulator, he does not have the power to bring criminal charges.

The office told another bank to terminate employees earlier this year. As part of the $8.9 billion agreement struck in June between U.S. authorities and BNP Paribas (BNPP.PA) over sanctions violations, 13 people were fired or separated from the French bank at the regulator’s behest, and another 32 were otherwise disciplined through demotions, compensation and other sanctions, according to the agency.

Paribas also pleaded guilty to conspiring to violate U.S. sanctions and other charges brought by the Manhattan District Attorney and U.S. prosecutors.

In its deal, Commerzbank is expected to enter into deferred prosecution agreements with state and federal prosecutors, which would suspend criminal charges, Reuters has reported.

Besides the New York regulator, authorities involved include the U.S. Department of Justice, the U.S. Attorney in Washington, D.C., the Manhattan District Attorney, the Federal Reserve and the Treasury Department.

They all declined to comment on negotiations when contacted by Reuters.

Authorities had been hoping to wrap up the deal by the end of the month, sources said, but that timetable may no longer hold. One recent sticking point has been the New York regulator’s demand that an independent monitor be installed at Commerzbank to oversee its work.

Such monitors have become a staple of the agency’s settlements, but may carry additional risk for banks. Standard Chartered Bank, (STAN.L) which settled a similar sanctions probe with U.S. prosecutors and regulators two years ago for $667 million, paid another $300 million to New York in August and agreed to suspend some businesses after failing to fix problems required under the 2012 deal.

Another possible complication is that Manhattan U.S. Attorney Preet Bharara has begun probing lax anti-money laundering controls at Commerzbank, according to one source.

Betsy Feuerstein, a spokeswoman for the Manhattan U.S. Attorney, declined comment.

In 2012, the Federal Reserve Bank of New York entered into an agreement with Commerzbank that required its New York branch to improve compliance with anti-money laundering laws and regulations. After finding the branch still failed to maintain adequate controls, the Fed Reserve issued a cease and desist order last year.

(Reporting By Karen Freifeld; editing by Andrew Hay)

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Americans step up spending, but home market weakens

WASHINGTON (Reuters) – U.S. consumer spending accelerated in August, the government said on Monday, a positive sign for an economy that appears to be firing on nearly all cylinders.

The housing sector remains an exception, however, with a separate report showing Americans signed fewer contracts in August to purchase previously owned homes.

Nevertheless, the rise in household spending offered the latest suggestion that years of exceptionally low interest rates have finally pushed the economy into a higher gear.

Consumer spending rose 0.5 percent last month after being unchanged in July, the Commerce Department said. The growth in August was just above the median forecast in a Reuters poll of economists.

Millan Mulraine, an economist at TD Securities in New York called the data “a further signal that the positive momentum in domestic activity is being sustained.”

Even after adjusting for inflation, spending was 0.5 percent higher, the biggest gain since March. Growth in personal income ticked up 0.3 percent, in line with forecasts.

Some of the strength in spending came from a decrease in the saving rate, which eased back from a 1-1/2-year high in July.

On Wall Street, housing shares .HGX fell even more than the broader stock indexes, which were down sharply as investors focused attention on civil unrest in Hong Kong.


Most investors are betting the U.S. Federal Reserve will raise interest rates next year to keep inflation in check, although Monday’s data gave little sign of growing price pressures.

The Fed’s preferred gauge of inflation was up 1.5 percent in August from a year earlier, down slightly from the reading in July, the Commerce Department data showed. A measure of underlying price pressures which strips out food and energy held at 1.5 percent. That reading had dipped to 1.2 percent earlier this year.

Some policymakers at the U.S. central bank remain concerned that inflation appears stuck well below their 2 percent target.

Chicago Federal Reserve Bank President Charles Evans repeated on Monday his argument that the Fed should be patient when it comes to raising rates.

Data on Friday showed the economy grew at its fastest pace in 2-1/2 years in the second quarter. Still, the housing sector has struggled to recover from the 2007-09 recession when a home price bubble deflated.

In August, contracts to purchase previously owned U.S. homes fell 1.0 percent, the National Association of Realtors said.

The pending home sales index plunged last year after mortgage interest rates spiked, although it has been on a rising trend since this past March.

(Reporting by Jason Lange; Additional reporting by Elvina Nawaguna in Washington and Ann Saphir in Chicago; Editing by Andrea Ricci)

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Ford plans to trim global vehicle platforms from 15 to 9 by 2016: executive

DETROIT (Reuters) – Ford Motor Co (F.N) expects to build about 99 percent of its vehicles on just nine global platforms by 2016, according to product development chief Raj Nair.

The automaker now builds about 90 percent of its vehicles on 15 global platforms, Nair said Monday at a Ford briefing for analysts. Eventually, it plans to reduce the number of platforms to eight.

(Reporting by Paul Lienert in Detroit; Editing by Meredith Mazzilli)

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