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U.S. consumer confidence pulls back from multi-year high

NEW YORK (Reuters) – U.S. consumer confidence fell more than expected in February, pulling back from a multi-year high according to a private sector report released on Tuesday.

The Conference Board, an industry group, said its index ofconsumer attitudes fell to 96.4 from an upwardly revised 103.8 in January. The February reading was the lowest for the index since September, and was below economist expectations for a reading of 99.6, according to a Reuters poll.

The January figure was originally reported as 102.9 and was the highest since August 2007.

(Reporting by Ryan Vlastelica; Editing by Meredith Mazzilli)

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U.S. services sector activity jumps in February: Markit

NEW YORK (Reuters) – The U.S. services sector expanded in February at its fastest pace since October, with businesses reporting customers boosting orders because of improving economic conditions, an industry report showed on Tuesday.

Financial data firm Markit said its preliminary, or “flash,” reading of its Purchasing Managers Index for the service sector rose to 57.0 in February from a final reading of 54.2 in January.

The report far outpaced forecasts, which called for a February reading of 54.0, according to a Reuters survey of economists. A reading over 50 signals expansion in economic activity.

Markit’s reading of new business at service companies in February surged to 56.7 from 51.7 in January, which was the lowest reading in the history of the Markit services sector series dating to October 2009.

“While parts of the East Coast have struggled in the face of adverse weather, other regions basked in unusually warm temperatures, boosting business above seasonal norms,” said Chris Williamson, chief economist at Markit in a statement. “Activity levels surged higher and inflows of new business boomed as a result.”

Markit last week said its flash U.S. Manufacturing Purchasing Managers Index rose to 54.3 in February, up from January’s final reading of 53.9.

“Alongside the upturn signaled by the sister ‘flash’ manufacturing PMI survey, the improved performance of the service sector in February means the economy looks to be enjoying yet another spell of robust growth in the first quarter,” Williamson said.

The surveys portray U.S. gross domestic product as growing at 3 percent or more on an annualized basis, Williamson said.

The service index’s employment component also rose in February and remained above 50, the level which separates expansion from contraction.

Markit’s seasonally adjusted flash U.S. Composite PMI Output Index rose to 56.8 in February, its best monthly reading since October, from 54.4 in January.

(Reporting By Michael Connor in New York; Editing by Meredith Mazzilli)

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Oil rises to $60 after Libya’s largest field shuts

LONDON (Reuters) – Brent crude oil rose more than $1 to around $60 a barrel on Tuesday after Libya’s largest oilfield stopped production.

The Sarir oilfield in Libya shut because of a power cut, in a further blow to exports from the OPEC member.

Brent LCOc1 for April was up $1.10 at $60.00 a barrel by 1435 GMT, recovering from an earlier low of $58.10. U.S. crude CLc1 was up 60 cents at $50.05.

Traders and analysts said that while lower output from Libya was providing some support, fast-rising oil stocks in the United States still pointed to a market that was heavily over-supplied.

The market traders awaited U.S. oil inventory data due later on Tuesday and on Wednesday to see whether it would show another large increase.

“The fundamental backdrop is still bearish,” said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding there was a “huge over-supply in the market”.

A Reuters survey forecast that figures from the American Petroleum Institute on Tuesday, and the U.S. government’s Energy Information Administration on Wednesday, would show U.S. crude stocks rose by 4 million barrels to a record last week.

“We expect another strong increase in U.S. crude inventories to be reported,” Fritsch said.

Huge increases in domestic oil production have left the U.S. oil market with a fuel glut, exacerbated by a refinery strike that has squeezed demand for crude.

The United States is in the fourth week of its largest refinery strike for 35 years, affecting 12 plants accounting for a fifth of national production capacity. Talks to end the strike are not expected to resume this week.

“Spreads for crude oil are becoming severely altered by the refinery strikes,” analysts at Singapore brokerage Phillip Futures said in a note to clients, adding that the strike had reduced demand for U.S. crude and helped widen its discount below Brent, the North Sea benchmark.

The spread between Brent and U.S. crude CL-LCO1=R stood at $9.95 a barrel at 1435 GMT, after hitting $10.27 on Monday, its widest since March 2014.

A report in the Financial Times on Monday quoted Nigeria’s oil minister as saying the country would call an OPEC extraordinary meeting if prices dropped further, offering some support to oil prices.

But delegates to the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that the producer group had no plans to meet before June.

(Additional reporting by Jane Xie in Singapore; Editing by Christopher Johnson and Dale Hudson)

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U.S. home prices rise in December: S&P/Case-Shiller

NEW YORK (Reuters) – U.S. single-family home prices rose in December, led by strong increases in the western half of the United States, a closely watched survey said on Tuesday.

The SP/Case Shiller composite index of 20 metropolitan areas gained 4.5 percent in December from the prior year. This was above a Reuters poll of economists that forecast a rise of 4.3 percent, as well as the 4.3 percent growth rate in November.

“While prices and sales of existing homes are close to normal, construction and new home sales remain weak,” David Blitzer, chairman of the index committee at SP Dow Jones Indices, said in a statement.

“The softness in housing is despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.”

(Reporting by Ryan Vlastelica; Editing by Meredith Mazzilli)

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Firms see drone sales in Gulf surging after U.S. eases export policy

Abu Dhabi (Reuters) – U.S. drone makers are expecting a surge in sales of military and civilian drones to Gulf states after the State Department eased export rules last week, industry executives said on Tuesday.

U.S. aerospace and arms companies have been pressing the U.S. government for years to ease restrictions on foreign sales of unmanned aerial vehicles – UAVs or drones – arguing that other countries such as Israel are overtaking them.

Critics argue that drone strikes kill too many civilians and violate sovereignty.

General Atomics won a $200 million contract in 2013 from the United Arab Emirates for supply of an unspecified number of predator drones, the first such sale in the region. Deliveries can now begin around April 2016, Frank Pace, the company’s president, aircraft systems, said.

“With this new policy, we see a lot more activity, we are talking to a lot more countries in the Middle East,” he said on the sidelines of the International Defence Exhibition in Abu Dhabi.

The company is also in talks with Saudi Arabia and some other countries, he said, declining to be more specific.

Other U.S. manufacturers were equally upbeat and joint ventures were in their sights with Gulf partners aiming to develop domestic capabilities.

Lockheed Martin (LMT.N) is aggressively pitching for joint ventures, Lockheed’s country director for Jordan, Iraq, UAE Pakistan, James Hedges, said.

“This region is a growing market, we are actively working on contracts,” he said without elaborating. The firm has an existing joint venture with Mubadala’s MUDEV.UL aerospace unit, owned by the Abu Dhabi government.

UAE firms such as Adcom Systems, Abu Dhabi Autonomous Systems Investments (Adasi) and International Golden Group are already building UAV operational and maintenance capabilities in ventures with firms from the United States, France and Spain.

“In the next five years, we will see increased use of unmanned systems and we are looking at new partnerships,” Adasi chief executive, Ali al Yafei, said, noting that the UAE is investing in both military and civilian systems.

“With a growing threat from extremist groups, the advantages that UAVs offer in providing surveillance and even strike capabilities, are compelling,” Teal Group’s director-corporate analysis, Philip Finnegan, said.

The group sees a $4.5 billion UAVs market over the period from 2014 to 2023 in the Middle East, representing about 10 percent of the global UAVs market during that period.

(Editing by Louise Ireland)

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Dollar inches up on Yellen hopes, Greek breather

LONDON/NEW YORK (Reuters) – The dollar edged lower and bond yields fell after U.S. Federal Reserve Chair Janet Yellen said on Tuesday it would be several months before the Fed expects to raise interest rates, while European equity markets gained after Greece produced a list of proposed economic reforms.

In a subtle change of emphasis in how the Fed has been speaking about its plans for rate increases, Yellen said its policy-setting committee is considering interest rate hikes “on a meeting by meeting basis.”

She added, however, that a rate increase is not likely for at least the next couple of meetings, and that the first hike would not necessarily come after the Fed removes the word “patient” from its forward guidance. Short-term rate futures indicate the market expects the first hike in September, the same as before Yellen’s testimony.

“It’s pretty evenhanded,” said Thomas Simons, money market strategist at Jefferies Co. “She is trying to increase flexibility in policy and forward guidance and doesn’t want to be nailed down as hawkish or dovish. The choppy market reaction indicates she succeeded because we are having a hard time interpreting that.”

The greenback jumped initially but paired gains and was later up 0.02 percent against a basket of currencies .DXY. U.S. 10-year Treasury yields initially rose to about 2.11 percent, but subsequently declined to 2.05 percent.

Wall Street stocks moved higher. The Dow Jones industrial average .DJI was up 65.47 points, or 0.36 percent, at 18,182.31. The Standard Poor’s 500 Index .SPX was up 3.75 points, or 0.18 percent, at 2,113.41. The Nasdaq Composite Index .IXIC was up 1.32 points, or 0.03 percent, at 4,962.29.

Gold fell to near a seven-week low of just below $1,200 an ounce. Expectations for rate hikes this year have curbed gold’s safe-haven appeal in recent weeks.

European stocks .FTEU3 headed for a sixth day of gains after Greece delivered its proposed reforms to the Eurogroup, the euro zone’s finance ministers. If the list is approved, Greece will get a four-month extension of its financial lifeline.

Greece’s stock market .ATG, which was closed on Monday, jumped nearly 10 percent, hitting a three-month high. Greek, Italian and Spanish bond yields all edged lower as the latest bout of euro zone break-up jitters eased.

The reforms included promises not to roll back any ongoing or completed privatizations and assurances that any state spending to address what Greece’s new government has called a “humanitarian crisis” would not hurt the country’s budget.

Oil prices rebounded, with U.S. crude CLc1 up 55 cents at $50.00 and Brent LCOc1 in London up to $60.09 a barrel.

Modest 0.4 percent gains for European shares took the benchmark FTSEurofirst 300 index .FTEU3 to a seven-year high.

Asian share markets crept higher overnight. Tokyo reached another 15-year peak and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ended flat.

(Additional reporting by Wayne Cole in Sydney, Manolo Serapio Jr in Singapore; and Alistair Smout in London; Editing by Larry King and Dan Grebler)

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Comcast revenue rises as it adds video, internet customers

(Reuters) – Comcast Corp, the largest U.S. cable operator, posted fourth-quarter revenue that marginally beat estimates as the company added new video and high-speed internet customers.

The owner of media and entertainment company NBCUniversal also increased its stock buyback program to $10 billion, of which it earmarked $4.25 billion for 2015, and raised its annual dividend to $1.00 per share from 90 cents.

Comcast, which is awaiting approval from U.S. regulators for its $45 billion acquisition of Time Warner Cable, said on Tuesday total revenue rose 4.8 percent to $17.73 billion in the quarter ended December.

That was slightly higher than the $17.68 billion analysts on average had expected, according to Thomson Reuters I/B/E/S.

Net income attributable to Comcast inched up 0.6 percent to $1.93 billion, or 74 cents per share. Earnings was 77 cents per share after excluding items such as favorable income tax adjustments.

Comcast added video customers for the third time in the last five quarters, picking up 6,000 new subscribers from October through December. But that was less than the 46,000 it brought in a year earlier.

The number of new video subscribers is closely watched on Wall Street as pay TV operators fight to keep customers in the midst of competition from streaming video services.

Comcast’s high-speed internet customers rose by 375,000, a similar gain to a year earlier. The company also added 123,000 voice customers during the quarter.

At NBC Universal, revenue rose 2.3 percent to $6.62 billion, boosted by theme parks and the NBC broadcast network.

While the Universal theme park in Florida lured visitors with a new Harry Potter attraction, NBC’s performance has improved with bigger audiences for shows including crime drama “The Blacklist.”

Advertising revenue at cable networks dropped 5.6 percent in the quarter to $857 million amid a decline in ratings that has hit networks across the TV industry. The NBC broadcast network’s ad revenue rose 3.1 percent to $1.66 billion.

Revenue at the film studio fell nearly 11 percent from a year earlier, when the company benefited from home entertainment sales of blockbuster animated film “Despicable Me 2”.

Comcast’s shares closed at $58.21 on Monday on the Nasdaq.

(Editing by Savio D’Souza)

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Exclusive: RBS asks restructuring chief to shrink investment bank

LONDON/HONG KONG (Reuters) – Royal Bank of Scotland (RBS.L) will hand restructuring chief Rory Cullinan the task of overseeing another major scaling back of its investment bank, sources told Reuters, allowing it to focus on lending to British households and businesses.

Cullinan will take over responsibility for RBS’s investment bank from Donald Workman, currently executive chairman for corporate and institutional banking, the sources said. It is not clear what role Workman will take.

Cullinan already runs RBS’s internal ‘bad bank’ and is overseeing the sale of its U.S. business Citizens and its Williams Glynn business in Britain.

The bank, 79 percent-owned by the government, is under pressure from lawmakers to do more to support the domestic economy.

Chief Executive Ross McEwan said last year that he wanted to increase the proportion of assets that RBS holds in Britain to 80 percent of its global business from 60 percent at present.

Cullinan was appointed to run RBS’s ‘bad bank’ in December 2013. He is on track to sell or wind down the majority of the 38 billion pounds ($58.6 billion) of unwanted assets placed within it by the end of 2015, a year ahead of schedule and his success in that role has persuaded McEwan to enlarge his remit, the sources said.

“He’s been phenomenal,” said Bernstein analyst Chirantan Barua. “Given his experience and what he’s delivered, I would not be surprised at all that Ross gives him something more. What is next in line in terms of cutting is the investment bank.”

The bank hopes that slimming down and simplifying its business will enable it to bolster its capital and generate better returns, making it more attractive to investors and easier for the government to return to private ownership.

RBS’s investment bank was built into one of the biggest in the world by former chief executive Fred Goodwin in the years before the financial crisis, and it grew further by the takeover of Dutch bank ABN AMRO in 2007.

Its investment bank had more than 20,000 staff and risk-weighted assets of 278 billion pounds at the end of 2008, almost half of RBS’s massive balance sheet that it has dramatically shrunk in the last six years.


RBS is expected to announce that it will significantly scale back its operations in Asia leaving about 200 staff in the region, down from 2,800 at the end of last year, when it unveils full-year figures on Thursday, the sources said.

The move will mark the latest step in RBS’s sharp retreat from both Asia and investment banking in the past six years following its 45.5 billion pound bailout during the financial crisis.

The bank had more than 12,000 staff in Asia at its peak, which included retail businesses that used to be part of ABN and were mostly sold in 2009.

Cullinan will also take responsibility for managing RBS’s exit from several European markets, the sources said.

RBS has been in Asia Pacific since the 1820s and currently has offices in 10 countries in the region. Singapore is one of its global operational hubs. The bank currently supports clients based in Asia Pacific and execution services in Asian markets for U.S. and European clients.

RBS, which is also expected to announce the appointed of ex-financial regulator Howard Davies as its new chairman on Thursday, is set to report an underlying pretax profit of about 4.1 billion pounds, according to a Reuters poll.

But that is likely to be largely wiped out by a write down on the value of its U.S. bank Citizens of about 4 billion pounds, according to industry sources.

(Editing by Sinead Cruise and Keith Weir)

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Home Depot sets $18 billion buyback, profit beats estimates

(Reuters) – Home Depot Inc (HD.N), the world’s No. 1 home improvement chain, posted a better-than-expected rise in quarterly same-store sales on Tuesday but the company warned that a strong dollar will likely hurt 2015 earnings.

Chairman and Chief Executive Craig Menear said if the U.S. dollar stays at current levels the company expects a negative impact of $1 billion to 2015 sales growth and a hit to earnings of 6 cents a share for the year.

Home Depot shares were up 3 percent at $115.67 in midmorning after rising as much as 5 percent.

Profit beat expectations as an improving job market encouraged Americans to spend more on renovations. Earlier on Tuesday, luxury home builder Toll Brothers Inc (TOL.N) reported a higher-than-expected quarterly profit and raised the low end of its full-year home delivery forecast as housing demand strengthened.

U.S. homebuilders remain upbeat about market conditions, according to a survey by the National Association of Home Builders published last week.

Home Depot also said it would buy back $18 billion of its shares, replacing a $17 billion buyback authorized in 2013.

The company said it expects full-year 2015 earnings of $5.11 to $5.17 per share, after accounting for share buybacks and sales growth of 3.5 to 4.7 percent.

But its fiscal 2015 earnings guidance does not include an accrual for losses related to last year’s data breach, which may include liabilities to payment card networks for reimbursements of card fraud costs.

Home Depot’s data systems were breached between April and September, when hackers stole about 56 million payment cards. The company said net costs related to the breach are pegged at $33 million so far.

Home Depot’s same-store sales rose 7.9 percent in the fiscal fourth quarter ended Feb. 1, beating the average analyst estimate of 5.5 percent, according to research firm Consensus Metrix.

Comparable sales increased 8.9 percent in the United States, where Home Depot has more than 85 percent of its 2,269 stores.

Net income rose 36 percent to $1.38 billion, or $1.05 per share, in the quarter. Excluding items, the company earned $1.00 per share.

Net sales rose 8.3 percent to $19.16 billion.

Analysts on average had expected earnings of 89 cents per share on revenue of $18.7 billion, according to Thomson Reuters I/B/E/S.

Home Depot also raised its quarterly dividend to 59 cents per share from 47.

(Reporting by Nandita Bose in Chicago and Siddharth Cavale in Bengaluru; editing by Savio D’Souza and Matthew Lewis)

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