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Exclusive: Stifel in lead to buy Barclays’ U.S. wealth unit


Investment bank Stifel Financial Corp (SF.N) is in advanced negotiations to acquire Barclays Plc’s (BARC.L) U.S wealth management unit, according to three people familiar with the situation.

Stifel is now negotiating key aspects with Barclays, although a deal is not certain and Barclays could go back to other bidders that have made offers, the people said this week.

A deal for the business – the former brokerage arm of Lehman Brothers – could come as early as next week, the people said.

The price being discussed could not be learned.

The sources requested anonymity because the matter is not public, and a spokeswoman for Stifel and a spokesman for Barclays declined to comment.

Barclays has been reaching out to potential acquirers for the business for several weeks because it views it as non-core, sources told Reuters.

Stifel Chairman and Chief Executive Ron Kruszewski has acquired several, mostly troubled retail brokerage and investment banking firms since 2005. The once low-key St. Louis firm that specialized in municipal bonds is now a national presence serving individual investors and middle-market companies.  

Kruszewski, a fireman’s son who became CEO in 1997, has paid relatively low prices for the acquisitions, but often provides generous pay packages to retain employees of the firms.

A deal between Stifel and Barclays would come on the heels of Stifel’s agreement in February to buy Alabama-based Sterne Agee Group for about $150 million.

Sterne Agee has about 730 brokers, who together with those now working at Barclays Wealth Americas, would bring the Stifel brokerage force to more than 3,000.

(Additional reporting by Jed Horowitz, Liz Dilts and Mike Stone in New York. Editing by Andre Grenon and Christian Plumb)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/8cjEew5stZg/story01.htm

Strong sales could shift Ford, GM to higher gear


NEW YORK Shares of U.S. automakers may finally be able to accelerate.

Investors are closely awaiting next week’s May sales data, expected to come in near record levels. Meeting those forecasts could be enough to lift the sector – among the cheapest in the market – putting the sting of product recalls and tepid recent growth in the rear view mirror.

Estimated sales of 1.6 million new cars and trucks in May would make for a seasonally-adjusted annual rate of 17.4 million vehicles, according to Edmunds.com, a car buying platform.

“This is going to be one of the best months ever,” said David Kudla, chief investment strategist of Mainstay Capital Management in Grand Blanc, Michigan. Kudla sees May sales approaching $40 billion, not far from the $40.3 billion record in August 2014.

Weak auto results contributed to flat overall retail sales in April, but May is expected to represent a rebound. Lower gas prices could boost demand for sports utility vehicles and trucks, which have higher price tags and better margins.

There is also pent-up demand for new vehicles as consumers have been holding on to their cars for longer since the financial crisis. The average age of U.S. cars is now between 10 and 11 years, Kudla said.

The timing of the Memorial Day holiday also helped May sales, according to Jessica Caldwell, senior analyst at Edmunds.com in Santa Monica, California.

“Because there was a full week of May after the holiday weekend, shoppers had plenty of time to take advantage of the deals being widely communicated in dealer and automaker marketing messages,” Caldwell said.

Credit for auto loans is expanding, a positive sign for the sector, noted Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

“The strong dollar created a headwind, and GM had some high-profile product recalls, but given current trends, I would expect sales growth to continue.”

Both GM and Ford appear undervalued at current levels. GM’s forward price-to-earnings ratio is 7.62, well below the SP 500’s 17.4 ratio, while Ford’s P/E is 8.77, according to Thomson Reuters data.

Both also rank among the cheapest SP 500 stocks per StarMine’s intrinsic value, which looks at anticipated growth over the next decade. GM is the fourth-cheapest stock in the SP by this metric, with StarMine estimating that shares should trade at $81.69, more than twice its Thursday closing price of $36.39. StarMine calculates that Ford is the 10th cheapest stock in the SP, and that it would need to rise 79 percent to meet its intrinsic value.

Despite that, shares of Ford are down 1.7 percent in 2015, underperforming the SP’s 2.6 percent rise. GM is up 3 percent on the year, thanks largely to a $5 billion stock buyback program announced in March.

While auto stocks could rally if the sales come in as expected, it could spell bad news for the broader market, as any sign of consumer strength could nudge the U.S. Federal Reserve into raising interest rates more quickly that is currently anticipated. Most analysts expect the first rate hike to come later this year, but opinions are split on whether it will occur in September or December.

“Good data would make the Fed raise rates sooner. I believe the stock market would sell off (on strong auto data) because it would shorten that timeline,” said Battle who expects a rate hike in the fall.

(Reporting By Sinead Carew and Ryan Vlastelica; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/o457b-xQS1Q/story01.htm

Wall St. ends down after weak economic data but gains in May


U.S. stocks closed lower on Friday as data showed the economy contracted in the first quarter but indexes still posted gains for the month.

Transportation shares also weighed on the market, extending recent losses. The Dow Jones transportation average .DJT fell 0.8 percent, putting it just shy of correction territory, almost 10 percent below its 2014 high.

Data showed the U.S. economy contracted at a 0.7 percent annual rate in the quarter, a sharp turnaround from the earlier estimate of growth of 0.2 percent.

Weak reports on factory activity in the Midwest and consumer sentiment for May suggested that the growth pace was modest early in the second quarter.

“We had some weak numbers, but it’s the end of the month for the trading of May, which can sometimes cause a selloff. It’s also Friday and Greece worries are still in the marketplace,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

U.S. Treasury Secretary Jack Lew repeated warnings on Friday not to minimize the global stability risk of Greece sliding out of the euro zone.

The Dow Jones industrial average .DJI fell 115.44 points, or 0.64 percent, to 18,010.68, the SP 500 .SPX lost 13.4 points, or 0.63 percent, to 2,107.39 and the Nasdaq Composite .IXIC dropped 27.95 points, or 0.55 percent, to 5,070.03.

For the month, the Dow was up 1 percent, the SP 500 was up 1.1 percent and the Nasdaq gained 2.6 percent.

For the week, stocks posted losses, however. The Dow was down 1.2 percent, the SP 500 fell 0.9 percent and the Nasdaq lost 0.4 percent.

Weighing on the market Friday, shares of Bristol-Myers Squibb (BMY.N) tumbled 6.6 percent, its biggest daily drop since 2012, following a company presentation at a cancer meeting. The stock had gained 8.5 percent this month before the presentation.

Humana (HUM.N) jumped 20.3 percent to a record high after a source said it is considering selling itself.

Intel (INTC.O) was up 1.3 percent to $34.46. People familiar with the matter said it has resumed talks to buy programmable-chip maker Altera Corp (ALTR.O) and is close to a $16 billion deal. Altera rose 4 percent to $48.85.

Declining issues outnumbered advancing ones on the NYSE by 2,097 to 945, for a 2.22-to-1 ratio on the downside; on the Nasdaq, 1,723 issues fell and 1,039 advanced for a 1.66-to-1 ratio favoring decliners.

The SP 500 posted 16 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 77 new highs and 36 new lows.

About 7 billion shares changed hands on U.S. exchanges, above the 6.1 billion daily average for May, according to BATS Global Markets.

(Additional reporting by Sweta Singh in Bengaluru; Editing by Savio D’Souza and Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/38CIXPBxoBA/story01.htm

GM recalls heavy duty trucks with Takata air bags


DETROIT General Motors Co (GM.N) is recalling about 375,000 heavy duty pickup trucks equipped with passenger-side air bag inflators made by Takata Corp (7312.T), the U.S. automaker said.

The trucks are 2007 and 2008 model Chevrolet Silverados and GM Sierras.

Subaru will expand its recall of 2004 and 2005 model Impreza compact cars with Takata air bags to about 80,000 from 20,000, the unit of Japan-based Fuji Heavy Industries (7270.T) also said on Friday.

Both companies said they have received no reports of inadvertent deployments of air bags in the vehicles.

The latest actions follow an agreement last week between Takata and U.S. safety regulators to expand the recalls of vehicles with potentially faulty Takata air bag inflators.

The inflators have exploded with too much force, sending shrapnel into the vehicles. Six people have been killed, all of them in Honda Motor Co (7267.T) cars.

Twelve incorrect deployments of Takata air bags have occurred in Toyota and Honda vehicles in Japan since 2011, Nikkei reported on Friday, citing a Japanese transport ministry official. No injuries were reported in these incidents.

Takata air bags have been the subject of U.S. Congressional hearings held late last year. Another hearing, before the Subcommittee on Commerce, Manufacturing and Trade, will be held next Tuesday.

On Thursday, five automakers expanded recalls by several million vehicles with Takata air bags.

No root cause for the defect has been found.

Takata managers want the automakers to share some of the blame for the malfunctioning air bags, sources told Reuters this week, as well as some of the financial burden.

(Reporting by Bernie Woodall; Editing by Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/MJEl5iLqnIE/story01.htm

Bank of America to improve compliance practices, pay $30 million fine to OCC


Bank of America Corp (BAC.N) agreed with U.S. regulators to improve its compliance practices and pay a fine for violations in lending rules toward military personnel.

The Office of the Comptroller of the Currency (OCC) asked the No. 2 U.S. bank by assets to pay a penalty of $30 million due to non-home loan compliance with the Servicemembers Civil Relief Act (SCRA) and unsafe non-home debt collection litigation practices.

The OCC, which regulates and supervises all national banks, also ordered “remediation” to about 73,000 affected customer accounts.

“The enforcement action is intended to correct deficiencies in the bank’s practices and procedures related to its SCRA- compliance program,” the OCC said on Friday.

The order covers collections litigation from several years ago for a small percentage of credit card and deposit overdraft customers who defaulted on their account, BofA said.

BofA shifted its compliance group to risk oversight group from the legal department earlier this year after regulators warned big banks to adopt more ethical internal cultures.

(Reporting by Avik Das in Bengaluru; Editing by Maju Samuel)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/celSdwEr1uM/story01.htm

Dollar Tree to sell 330 Family Dollar stores to Sycamore Partners


Discount retailer Dollar Tree Inc (DLTR.O) agreed to sell 330 Family Dollar Stores Inc (FDO.N) stores to private equity firm Sycamore Partners to get antitrust approval for its $8.5 billion takeover of Family Dollar.

Dollar Tree said the stores represent about $45.5 million of operating income for Family Dollar, adding that Sycamore intends to operate the stores under the Dollar Express banner.

Dollar Tree said in April it identified about 340 stores for divestiture.

The pending acquisition and divestiture remain subject to the Federal Trade Commission’s clearance.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/euX8qCr42ws/story01.htm

Data weighs on Wall St.; indexes post May gains


NEW YORK U.S. stocks fell on Friday as data showed the economy contracted in the first quarter, though major indexes still posted their best month since February.

The Dow Jones industrial average .DJI fell 115.24 points, or 0.64 percent, to 18,010.88, the SP 500 .SPX lost 13.4 points, or 0.63 percent, to 2,107.39 and the Nasdaq Composite .IXIC dropped 27.95 points, or 0.55 percent, to 5,070.03.

In May, the Dow gained 0.96 percent, the SP added 1.05 percent and the Nasdaq rose 2.60 percent.

(Reporting by Caroline Valetkevitch; Editing by Nick Zieminski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/38CIXPBxoBA/story01.htm

Oil leaps 5 percent as dollar rally stalls, U.S. rigs fall


NEW YORK Crude oil prices jumped almost 5 percent on Friday, their biggest rally in 1-1/2 months, as a steady U.S. dollar and a bigger than expected drop in U.S. oil rigs in operation set off a renewed rush of bullish bets.

U.S. crude has risen by as much as $4 a barrel after hitting a one-month low just a day ago, locking in a record 11th weekly gain that was propelled both by declining domestic oil inventories and rapidly shifting sentiment ahead of next week’s OPEC meeting, at which the group is expected to keep production at high levels.

Oil bulls were also enthused by Friday’s rig count data from Baker Hughes, which showed U.S. drillers again reducing the number of rigs in operation this week despite speculation that they would add more. A lower rig count signals potentially lower production.

Brent crude LCOc1 settled at $65.56 a barrel, up $2.98, or 4.8 percent, on the day. It was flat on the week, while for the month, it fell 2 percent.

U.S. crude CLc1 ended at $60.30, up $2.62, or 4.5 percent, on the day, and up about 1 percent on both the week and month.

Tensions in the Middle East after the Islamic State claimed responsibility for a mosque bombing in Saudi Arabia that killed three people added to the market’s support.

“The dollar’s stalling provided the spark for today, and coupled with the bullish crude draws data, the encouraging rig count numbers and Middle East worries, the market just went into a frenzy,” said John Kilduff, partner at New York energy hedge fund Again Capital.

The dollar edged lower against a basket of major currencies .DXY on Friday, after having risen 2.5 percent this month.

Oil bears cautioned that prices could fall again on the global supply glut. Pressure might build by next week if the dollar rallies and OPEC decides not to cut output, they said.

OPEC is expected to maintain a collective output target of 30 million barrels per day and produce 1 million bpd above that. Demand for its oil is much lower, leaving an estimated surplus above 2 million bpd.

“The dollar has been as imperative as anything to recent moves in oil, and OPEC has been over-producing, so I expect another leg lower in prices,” said Tariq Zahir, an oil bear at Tyche Capital Advisors in Laurel Hollow, New York.

(Additional reporting by Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy; and Peter Galloway)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7a7WWqSnEGg/story01.htm

Intel close to deal to buy Altera for $16 billion: sources


Intel Corp (INTC.O) has resumed negotiations to buy smaller chip maker Altera Corp (ALTR.O) and is close to a $16 billion acquisition agreement, people familiar with the matter said on Friday.

The price for Altera could be as much as $54 per share, a 15 percent premium over its Thursday closing price of $46.97. That would value Altera at more than $16 billion, according to one of the people.

Altera shares were up 4.2 percent at $48.96 during Friday morning trading in New York.

The deal could be reached in the coming days, the sources said, cautioning that no agreement was certain and asking not to be identified because the negotiations are confidential. Intel and Altera did not respond to requests for comment.

In April, Altera rejected an unsolicited $54 per share offer from Intel following months of negotiations, sources told Reuters at the time.

Earlier this year, Intel signed a standstill agreement with Altera that expires on June 1, giving the world’s largest chipmaker the option to launch a hostile bid after that, Reuters reported in April.

Avago Technologies Ltd (AVGO.O) agreed on Thursday to buy Broadcom Corp (BRCM.O) for $37 billion, in the largest merger of chipmakers ever.

The New York Post first reported late Thursday that Intel and Altera had restarted talks.

(Additional reporting by Subrat Patnaik and Rishika Sadam in Bangalore)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/LNEvu5N-kMg/story01.htm