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Marchionne raises Fiat Chrysler stake as Ferrari spin-off nears

MILAN (Reuters) – Fiat Chrysler Automobiles (FCA) (FCAU.N) Chief Executive Sergio Marchionne has increased his voting stake in the carmaker to nearly 1 percent after benefiting from a stock grant plan, just as the company readies to spin off luxury brand Ferrari.

The stake makes him one of the largest individual shareholders in FCA (FCHA.MI), the world’s seventh-biggest carmaker, whose share price has soared 75 percent since the Ferrari spin-off was announced in October.

A higher stake will also increase Marchionne’s sway at Ferrari, of which he is the chairman. As part of the spin-off, only 10 percent of Ferrari will be offered to the market, with the remainder of FCA’s stake in the iconic brand distributed to current FCA shareholders.

The divorce from Ferrari will also pave the way for a tie-up between FCA and another global carmaker as the industry embarks on a much-needed consolidation to cut costs, analysts have said.

Marchionne now holds 14.4 million common shares in the company, a filing this week with Dutch market regulator AFM showed, after receiving 2.3 million shares in a final installment of a stock grant program approved in 2012.

The shares bonus had a total value of 31.2 million euros ($35 million) at Wednesday’s closing price.

This equates to a 0.85 percent voting stake based on FCA’s total share capital of 1.69 billion shares, including loyalty shares, according to Reuters calculations. The 62-year-old holds 1.1 percent of FCA if only common shares are counted.

Marchionne is widely credited with turning around the fortunes of both Fiat and its U.S. arm Chrysler and has been the CEO of both since Chrysler emerged from bankruptcy in 2009.

Fiat took full control of Chrysler last year and the merged FCA moved its primary listing to New York in October. Marchionne has vowed to stay at the helm of FCA until 2018.

Marchionne plans to invest 48 billion euros over five years to 2018 to turn Jeep, Maserati and Alfa Romeo into global brands that will allow FCA to rival Volkswagen (VOWG_p.DE) and BMW (BMWG.DE) by strengthening its position in the fast-growing and high-margin market for premium cars.

(Reporting by Agnieszka Flak and Stefano Rebaudo; Editing by Mark Potter)

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Oil edges higher towards $62, ample supplies still weigh

LONDON (Reuters) – Oil edged up on Thursday towards $62 a barrel as expectation of a coming recovery in global demand countered a further jump in U.S. crude stockpiles which underlined currently ample supplies.

The U.S. government’s latest supply report released on Wednesday said domestic crude inventories rose last week to 434.1 million barrels, hitting a seasonal record high for the seventh week.

Brent crude LCOc1 rose 8 cents to $61.71 by 9.46 a.m. ET, after jumping more than 5 percent on Wednesday. U.S. crude CLc1 fell 96 cents to $50.03 following a more than 3 percent gain in the previous session.

“At present, it would appear that Brent is bottoming out at $60 per barrel,” said Carsten Fritsch, analyst at Commerzbank. “The renewed sharp rise in U.S. crude oil stocks … points to a market that is still oversupplied.”

Brimming U.S. crude supplies are increasing the discount at which U.S. crude is trading to Brent. The spread CL-LCO1=R reached $11.81 on Thursday, the widest since January 2014.

Brent collapsed in 2014, falling from $115 reached in June on global oversupply. The decline deepened after the Organization of the Petroleum Exporting Countries (OPEC) chose to defend market share against rival supply sources, rather than cut its own output.

The price has rallied more than 35 percent from a near six-year low of $45.19 reached in January, supported by signs that lower prices are starting to reduce investment in U.S. and other non-OPEC supply.

A growing number of OPEC officials are making cautiously hopeful comments on the demand outlook. This week, Saudi oil minister Ali al-Naimi said demand was growing, while a Gulf OPEC delegate said it would rise more strongly in the second half of 2015.

OPEC officials including Naimi had been making more bearish comments. The Saudi minister was quoted in December as saying OPEC would not cut output even if oil fell to $20.

“No more talk of $20 from al-Naimi,” said Olivier Jakob, oil analyst at Petromatrix. “Analysts calling for $20 a barrel oil will be more shy now.”

(Reporting by Alex Lawler and Jane Xie; Editing by William Hardy and Mark Potter)

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Lower gasoline prices dampen U.S. consumer inflation

WASHINGTON (Reuters) – U.S. consumer prices fell over the past year for the first time since 2009 as gasoline prices continued to tumble, which could allow a cautious Federal Reserve more room to hold off on raising interest rates.

Other data on Thursday showed a rebound in business investment spending plans and a steadily firming labor market, suggesting the move into deflation territory would be brief. In addition, gasoline prices have been rising in recent weeks.

“We believe the Fed will wait until September before achieving liftoff on interest rates and, even then, the process of normalization will move at a glacial pace,” said Diane Swonk, chief economist at Mesirow Financial in Chicago.

The Labor Department said its Consumer Price Index fell 0.1 percent in the 12 months through January, the first decline since October 2009 and a sharp deceleration from December’s 0.8 percent rise.

The CPI dropped 0.7 percent from December, the largest fall since December 2008. It had slipped 0.3 percent in the prior month.

U.S. stocks were trading marginally lower, while prices for the longer-dated 30-year bond rose. The dollar rose against a basket of currencies.

Fed officials, who have long viewed the energy-driven drop in inflation as transitory, could take comfort from a rise in underlying price pressures last month.

The U.S. central bank has a 2 percent inflation target and tracks a price measure that is running even lower than the CPI.

Fed Chair Janet Yellen told lawmakers this week that the central bank’s policy-setting committee “needs to be reasonably confident that over the medium-term inflation will move up toward its 2-percent objective” before it starts to raise interest rates.

The so-called core CPI, which strips out food and energy costs, rose 0.2 percent last month after December’s 0.1 percent pain. Economists, however, believe the effects of lower energy prices and a strong dollar still have to work their way through to the core CPI, which could mean tame readings ahead.

“It will be some time before the Fed gets the necessary confirmation that inflation will move back to target in the medium term,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

The core CPI was lifted by increases in the cost of shelter, recreation and apparel prices. In the 12 months through January, the core CPI rose 1.6 percent after a similar gain in December.


Softer global demand and increased shale oil production in the United States have caused an oil glut, causing crude prices to plummet.

Domestic gasoline prices plunged 18.7 percent in January, the biggest drop since December 2008, after falling 9.2 percent in December. Gasoline prices have now declined for seven straight months.

Separately, the Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending intentions, increased 0.6 percent last month after a revised 0.7 percent fall in December.

“Companies are laying in supplies to meet the demand from consumers down the road, so this is a positive for the outlook,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

“The economy looks on solid footing to start the year, with orders picking up and yes, there is some inflation out there.”

Business investment has been hurt by a softening global economy, as well as a strong dollar, which has dented the overseas profits of some companies. Lower crude oil prices also are undercutting demand for equipment in the oil field.

Shipments of core capital goods, which are used to calculate equipment spending in the government’s gross domestic product measurement, fell 0.3 percent last month after rising 0.3 percent in December.

Business spending was a drag on growth in the fourth quarter, holding the economy to a 2.6 percent annualized growth pace. First-quarter growth is currently forecast at around a 2.3 percent rate.

Another report from the Labor Department showed initial claims for state unemployment benefits increased 31,000 to a seasonally adjusted 313,000 in the week ended Feb. 21. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 11,500 to 294,500 last week.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Paul Simao and Andrea Ricci)

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Dunkin’ Brands’ K-Cup packs to be sold online and at retail stores

(Reuters) – Dunkin’ Brands Group Inc (DNKN.O) said its Dunkin’ K-Cup packs would now be available online and across retail stores in North America through an expanded agreement with J.M. Smucker Co (SJM.N) and Keurig Green Mountain Inc (GMCR.O).

Dunkin’ K-Cup packs are currently available only in Dunkin’ Donuts restaurants in the United States.

Keurig exclusively produces Dunkin’ K-Cup, while Smucker currently makes and distributes Dunkin’ Donuts brand bagged coffee.

Under the new agreement, Smucker will market K-Cup packs to grocery chains, mass merchandisers, club stores, drug stores, dollar stores and home improvement stores.

Keurig will market the Dunkin’ K-Cup packs to specialty stores and office superstores.

Dunkin’ Brands said the K-Cup packs will be sold online by various retailers starting spring.

The companies did not disclose financial terms of the agreement, which is expected to take effect in the middle of this year.

Dunkin’ Brands also said it had reached a profit sharing agreement under which certain franchisees would get an equal shares of profit from the sale of K-Cup packs and packaged coffee outside its restaurants.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D’Souza)

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Wall St. little changed after burst of data

NEW YORK (Reuters) – U.S. stocks held near the unchanged mark on Thursday in the wake of a mixed bag of economic data, with the Dow and SP 500 holding just off record highs while the Nasdaq advanced modestly.

U.S. consumer prices fell 0.7 percent in January, the biggest drop since 2008, as gasoline prices tumbled, and weekly jobless claims climbed to 313,000 last week, although durable goods orders rose for last month. The inflation data could provide a cautious Federal Reserve with leeway to keep interest rates low for a bit longer.

The market is “just digesting what we have already received and waiting for what is coming next week to find a better direction of where we are going,” said Gabriela Santos, global market strategist for J.P. Morgan Asset Management in New York.

“We don’t think the market itself has accepted that reality of interest rate hikes in the coming months, so there is a lot of volatility that could come if the messaging starts getting more clear and more aggressive that we could get that rate hike soon.”

The Dow Jones industrial average .DJI fell 15 points, or 0.08 percent, to 18,209.57, the SP 500 .SPX lost 3.29 points, or 0.16 percent, to 2,110.57 and the Nasdaq Composite .IXIC added 7.14 points, or 0.14 percent, to 4,974.28.

After a sluggish start to the year, equities have rebounded sharply in February. Both the Dow and SP 500 are on track for their best monthly performance since October 2011, while the Nasdaq is on pace for its best month since January 2012.

Avago Technologies (AVGO.O) jumped 14.3 percent to $128.77 as the best performer on both the SP 500 and Nasdaq 100 .NDX index after the company reached a deal to acquire Emulex (ELX.N) for $8 per share. Emulex shares surged 26.1 percent to $8.02.

Transocean (RIG.N) shares advanced 1 percent to $16.75 after posting quarterly results. (CRM.N) shares climbed 11.5 percent to $70.08 after the cloud software company reported quarterly earnings and raised its full-year revenue forecast.

Sears Holdings (SHLD.O) reported a narrower quarterly loss as it continued to slash costs and said it would launch a planned property trust by June, raising at least $2 billion for the struggling U.S. retailer. Its shares slumped 8 percent to $34.88.

Earnings are expected after the close from Autodesk (ADSK.O), Gap Inc (GPS.N), Monster Beverage (MNST.O) and Ross Stores (ROST.O).

Declining issues outnumbered advancing ones on the NYSE by 1,637 to 1,220, for a 1.34-to-1 ratio on the downside; on the Nasdaq, 1,325 issues rose and 1,133 fell for a 1.17-to-1 ratio favoring advancers.

The benchmark SP 500 index was posting 29 new 52-week highs and 1 new lows; the Nasdaq Composite was recording 82 new highs and 11 new lows.

(Editing by Bernadette Baum)

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Fed’s Bullard sees spring price rebound, summer rate hike: CNBC

NEW YORK (Reuters) – The Federal Reserve should make a change to its policy statement next month that would allow it to monitor inflation readings through the spring and then hike interest rates some time in the summer, a top Fed official said on Thursday.

St. Louis Fed President James Bullard said on CNBC the U.S. central bank should drop the word “patient” from its statement at a March 17-18 meeting, in order “to provide optionality … going forward.”

“If we take it out, then we can move at any of the meetings during the summer,” he added. “If expected inflation goes back to more normal levels then I’d have confidence that actual inflation would follow behind. Through the spring here we’ll have to see evidence of that.”

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)

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Hedge funds’ $1.4 billion Porsche lawsuit faces dismissal: judge

STUTTGART, Germany (Reuters) – Hedge funds seeking 1.2 billion euros ($1.4 billion) in damages from Porsche SE (PSHG_p.DE) over its botched attempt to take over carmaker Volkswagen (VOWG_p.DE) in 2008 look set to have their case dismissed, according to a German judge.

“On balance it’s our view that we consider the lawsuit, or the appeal, to be unpromising for several reasons,” Gerhard Ruf, judge at the higher regional court in Stuttgart, said on Thursday ahead of a hearing of the case.

“We are inclined to dismiss the case,” he added.

Two dozen hedge funds, including Viking Global Investors, Glenhill Capital and Greenlight Capital, a year ago accused investment company Porsche SE of camouflaging a plan to acquire Volkswagen (VW) and secretly piling up a holding in Europe’s largest automaker during 2008.

The case combining 1.36 billion euros in damage claims — one of several civil cases lodged at different German courts seeking more than 5 billion euros in compensation — was rejected by a separate Stuttgart court.

Thursday’s appeal was launched by 19 plaintiffs.

In March 2008, Porsche SE dismissed talk it intended to take over VW, but seven months later revealed it controlled 74.1 percent of VW’s common stock, just short of the 75 percent takeover threshold.

Porsche’s statement caused VW shares to surge to record highs as short-sellers scrambled to cover their positions.

“There is no evidence whatsoever suggesting that short-sellers were deliberately misled,” said Markus Meier of law firm Hengeler Mueller which represents Porsche.

A ruling on Thursday’s appeal will be announced on March 26, the judge said.

(Reporting by Ilona Wissenbach; Writing by Andreas Cremer; Editing by Mark Potter)

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StanChart picks ex-JPMorgan exec Winters as CEO in major overhaul

LONDON/HONG KONG (Reuters) – Standard Chartered (STAN.L) said former JPMorgan (JPM.N) investment bank boss Bill Winters will take over as chief executive in June, replacing Peter Sands in a major management overhaul following two years of problems.

Investors had been pushing for a change at the helm of the Asia-focused bank citing strategic, governance and operational mistakes, and saying Sands had been slow to address troubles including a U.S. fine for breaking sanctions to losses on commodities loans.

Winters, 53, is currently CEO of the Renshaw Bay hedge fund he founded and is one of the most respected bankers in the industry. He has wide experience of investment banking and regulatory issues.

The bank’s two biggest shareholders, Singapore sovereign fund Temasek and Aberdeen Asset Management – who own more than 25 percent between them – welcomed the changes which will also see Chairman John Peace leave next year.

“From what we know at this point, this is an amazingly astute choice,” said Jim Antos, a Hong-Kong based analyst at Mizuho Securities Asia Ltd.

Antos said Winters could force “real change” at the bank and has strong credibility with U.S. and UK regulators, “which is exactly what the bank needs.”

Standard Chartered shares jumped 5 percent on the news of the appointment before trimming gains amid concerns the bank is now more likely to launch a rights issue to address concerns about its capital strength.

By 1244 GMT (7:44 a.m. EST) Standard Chartered shares were up 3 percent at 956 pence. They have fallen 30 percent since the start of 2013.

Analysts said there could be more changes in management, although Peace said Mike Rees, the deputy CEO and head of the wholesale bank, was staying in his role.


Winters, who is originally from New York but has dual U.S. and UK citizenship, will join Standard Chartered’s board in May and take over from Sands the following month. He will be based in London, where he has lived for the past 22 years.

Winters described Standard Chartered as “a special bank”. He will be paid up to 6.9 million pounds ($10.7 million) a year, including a base salary of 1.15 million pounds, the same in an “allowance” and up to 4.6 million in annual bonus.

He will be granted shares to compensate him for any losses when he leaves Renshaw Bay, the London hedge fund and asset manager he founded four years ago named after a bay on a lake in New York State where his grandparents have a cabin. Standard Chartered declined to say how much the compensation could be.

Winters joined JPMorgan in 1983 as a trainee in New York and moved up the ranks to become co-CEO of its investment bank from 2004 until 2009, when he left following a falling out with Chief Executive Jamie Dimon.

Winters then became one of five members of a British government commission that analyzed how banks could be made structurally safer. The panel’s recommendations that firms should separate their domestic retail banking operations is being implemented.

Peace said Winters was “a world class banker” who was strongly respected by regulators and clients.

Investors started calling for change at the top of Standard Chartered early last year. Three of the bank’s top 30 investors told Reuters in December that Sands should be replaced in 2015.

In addition to a potential rights issue, Winters’ early tasks will be to try to make more cost cuts, potentially by reducing its retail banking operations across Asia, analysts said.

Former McKinsey consultant Sands, 53, steered Standard Chartered through the financial crisis, helping it to 10 years of record earnings. He has been CEO for eight years, making him one of the longest serving CEOs at a major global bank.

Sands could be paid up to 8 million pounds when he leaves, mostly in previous share awards that have not yet vested, although the bank’s recent weak performance means the awards are likely to be much less than the maximum.

“We haven’t got everything right and of course we have faced a huge number of challenges through what has been one of the most tumultuous and turbulent periods in the history of financial markets, but I’m proud of what the bank has achieved,” Sands told reporters on a conference call.

“I’m delighted Bill is going to be taking the mantle from me in June.”

Some investors have urged Standard Chartered to make wider changes in the board, and the bank said Jaspal Bindra, CEO of its Asia business, will also leave this year after 16 years with the bank.

It said a further three long standing directors will step down – Ruth Markland, Paul Skinner and Oliver Stocken – and said two new directors will join the board – Gay Huey Evans and Jasmine Whitbread.

(Additional reporting by Saeed Azhar in Singapore; Editing by Sinead Cruise and Anna Willard)

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Global equities hit new record as cheap money reigns

LONDON (Reuters) – Global equities set a new record high and bond yields sank to fresh lows on Thursday as investors positioned for an extended era of cheap money ahead of the European Central Bank’s looming bond-buying scheme.

There were also signs the euro zone economy may be turning a corner as consumer morale picked up in the bloc’s largest economies and bank lending fell at a slower place.

Central banks’ battle to keep cash flowing into the financial system to avert a deflationary spiral has driven core European government bond yields into or close to negative territory, with German seven-year bond yields the latest to go below zero for the first time on Thursday.

That has pushed investors ever deeper into higher-yielding assets like equities and the MSCI All-Country World equity index .MIWD00000PUS climbed to a new record high of 434.40 points.

Bets that a U.S. rate hike might come later than expected, triggered by comments by Fed chair Janet Yellen this week, also bolstered views that the environment of rock-bottom rates would hold for the near future.

“We think central bank easing efforts will continue to provide liquidity to the markets and expect that could help drive flows into equities globally as investors search for yield,” said Mark Mobius, emerging markets fund manager at Franklin Templeton.

A new record low of -0.003 percent for German seven-year sovereign bonds came after Germany sold its first five-year debt with negative yields on Wednesday and after Irish borrowing rates fell below 1 percent for the first time.

There was also good news from Germany on consumer morale, which rose to its highest level in more than 13 years heading into March as low oil prices fed through to households.

On equity markets, Asian shares slipped back from a five-month high, but in Europe corporate updates from blue chips including Anheuser-Busch Inbev (ABI.BR), Allianz (ALVG.DE) and Deutsche Telekom (DTEGn.DE) saw the pan-European FTSEurofirst 300 .FTEU3 rise 0.3 percent.

About two thirds of the way into Europe’s earnings season, 55 percent of companies have met or beaten profit forecasts. Overall, fourth-quarter earnings are expected to grow by 19.5 percent, according to Thomson Reuters I/B/E/S, which would be Europe’s best season in 3-1/2 years.

The financial sector was also in focus after Asia-focused bank Standard Chartered (STAN.L) said former JPMorgan (JPM.N) investment bank boss Bill Winters will take over as chief executive in June. The bank’s shares were up 2 percent.

Shares of Royal Bank of Scotland (RBS.L) fell 4 percent, meanwhile, after the lender reported a 2014 loss of 3.5 billion pounds.

Emerging markets .MSCIEF got support from Yellen’s comments and a steadier U.S. dollar, with the Russian rouble strengthening for the third straight day.

Greek equities .ATG were down more than 2 percent, with the country’s fate in focus after it said on Wednesday it would struggle to make debt repayments to the International Monetary Fund and the European Central Bank this year.

In commodity markets, Brent crude LCOc1 fell toward $61 per barrel after a rally in the previous session, as bulging U.S. crude stockpiles offset indications of a demand recovery.

London copper prices CMCU3 neared a six-week peak and gold gained for the second day on views of a U.S. rate-hike delay.

(Editing by Susan Fenton)

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