News Archive


Wall Street puts finishing touch on best week since March


Wall Street rose on Friday and capped off its strongest week since March after U.S. Federal Reserve Chair Janet Yellen said an interest-rate hike would likely be appropriate “in the coming months.”

Yellen’s is the most important voice in a chorus of policymakers recently suggesting that the U.S. economy has improved enough to warrant tighter borrowing costs, with a growing number of investors now expecting a hike in June or July.

While higher interest rates choke liquidity in stock markets, many investors see a potential rate hike as a vote of confidence that the struggling U.S. economy is finding its legs.

“As we look at our place in the global economy, things just seem to be improving to a point where it certainly looks likely that June or July will be the next launching point,” said Paul Springmeyer, portfolio manager at the Private Client Reserve of U.S. Bank.

“With the increased strength, we should get up off of those historically low levels where we are.”

After Yellen’s speech, traders raised their expectations of a June rate hike to 34 percent from 30 percent, according to CME Group.

The Fed next meets on June 14-15.

Data on Friday showed U.S. economic growth slowed in the first quarter, although not as sharply as initially thought.

All of the 10 major SP sectors rose, with the telecom .SPLRCL and financial .SPSY indexes leading the gainers.

The Dow Jones industrial average .DJI climbed 0.25 percent to end at 17,873.22 points and the SP 500 .SPX gained 0.43 percent to 2,099.06.

The Nasdaq Composite .IXIC added 0.65 percent to 4,933.51.

For the week, the SP 500 rose 2.3 percent and the Dow added 2.1 percent, the best weekly performance for both since March. The Nasdaq gained 3.4 percent for the week, its best weekly result since February.

For 2016, the SP 500 is up 2.7 percent.

Friday’s volume was muted as investors checked out ahead of a long weekend, with U.S. stock markets closed on Monday for the Memorial Day holiday.

Just 5.6 billion shares changed hands on U.S. exchanges, well below the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Cyber security firm Palo Alto (PANW.N) dropped 12.36 percent after a wider-than-expected quarterly loss.

GameStop (GME.N) fell 3.93 percent after the video-game retailer forecast lower-than-expected revenue and profit for the current quarter.

Advancing issues outnumbered decliners on the NYSE by 2,034 to 974. On the Nasdaq, 1,905 issues rose and 896 fell.

The SP 500 index showed 22 new 52-week highs and no new lows, while the Nasdaq recorded 73 new highs and 19 new lows.

(Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)

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Yellen says Fed rate hike likely appropriate in coming months


CAMBRIDGE, Mass. The Federal Reserve should raise interest rates “in the coming months” if the economy picks up as expected and jobs continue to be generated, U.S. central bank chief Janet Yellen said on Friday, bolstering the case for a rate increase in June or July.

“It’s appropriate … for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate,” Yellen said during an appearance at Harvard University.

Her comments, while balanced, suggested the powerful Fed chair is on board with several of her colleagues who in recent weeks have said the central bank is preparing to follow up on an initial policy tightening in December.

Although Yellen expressed caution about too steep a rise in U.S. rates, she sounded more confident than she has in the past that the U.S. economy has rebounded from a weak winter and that inflation would edge higher toward the Fed’s 2 percent target.

“The economy is continuing to improve … growth looks to be picking up,” Yellen told a group of professors and alumni at the Ivy League college in Cambridge, Massachusetts. She expects the labor market to continue to improve despite much progress because “further gains are possible,” she said under an open-air tent on campus.

Prices for U.S. Treasuries fell after Yellen’s remarks, while stocks rose. The U.S. dollar .DXY was trading higher against a basket of currencies.

The probability of a rate hike at the Federal Open Market Committee’s June 14-15 meeting rose to 34 percent from 30 percent before Yellen’s remarks, according to CME Group, where the futures contracts are traded.

Bets on a rate increase at the July 26-27 policy meeting edged up to 60 percent, more than double the estimate from a month ago.

The Fed raised its key benchmark interest rate in December for the first time in nearly a decade, but has held off since then due to concerns earlier this year about a global economic slowdown and financial market volatility.

Those concerns have subsided somewhat in recent months.

In recent weeks, several Fed policymakers have reacted to stronger U.S. economic data including on housing and retail sales by putting a rate hike squarely on the table for either June or July. Earlier on Friday, the government revised higher its first-quarter GDP growth estimate to 0.8 percent, from 0.5 percent.

Yellen’s comment “reinforces the signals on early rate hikes communicated recently by her FOMC colleagues,” Mohamed El-Erian, chief economic adviser at Allianz, said via Twitter of the policy-making Federal Open Market Committee.

Weak oil prices and a strong dollar have been blamed for helping to keep U.S. inflation below the central bank’s target.

On Friday, Yellen said those factors “seem like they are roughly stabilizing at this point and my own expectation is that … inflation will move back up over the next couple of years to our 2 percent objective.”

Still, she cautioned against hiking rates too quickly given the Fed’s benchmark remains low at 0.25-0.5 percent currently. “It is important to be cautious … because if we were to trigger a downturn or to contribute to a downturn, we would have limited scope for responding,” Yellen said.

The economy has not seen “much improvement in wage growth which is suggestive of some slack in the labor market,” Yellen added just before receiving the Radcliffe Medal from Harvard’s Radcliffe Institute for Advanced Study.

Yellen was introduced by former Fed Chair Ben Bernanke, to whom she said Americans owe “an enormous debt of gratitude” for guiding the economy through the 2007-2009 financial crisis.

Now in her third year as Fed chair, Yellen was speaking just hours before the Memorial Day long weekend, and joked that her comments would be brief so as not to delay Wall Street money managers hanging on her words.

She has a second public appearance scheduled for June 6 in Philadelphia, just a week before the next policy decision.

(Additional reporting by Howard Schneider in Washington; Editing by Paul Simao and Chizu Nomiyama)

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U.S. economic growth revised higher in first quarter


WASHINGTON U.S. economic growth slowed in the first quarter although not as sharply as initially thought, as a surge in home building and steady inventory accumulation partially offset the drag from a steep decline in business investment.

Gross domestic product rose at a 0.8 percent annual rate as opposed to the 0.5 percent pace reported last month, the Commerce Department said on Friday in its second GDP estimate for the January-March period.

That was the weakest growth since the first quarter of 2015. The economy grew at a rate of 1.4 percent in the fourth quarter.

But a sharp upward revision to income growth and a rebound in corporate profits in the first quarter brightened the picture. When measured from the income side, the economy grew at a 2.2 percent rate after expanding at a 1.9 percent pace in the fourth quarter.

Economists said strong income growth, together with signs the economy was picking up steam in the second quarter, could give the Federal Reserve the ammunition to raise interest rates as early as next month. The U.S. central bank increased rates in December for the first time in nearly a decade.

“This gives us more confidence that growth will hit its marks in the second quarter … enough forward speed for the Fed to continue with its gradual pace of rate hikes,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.

Minutes from the Fed’s April 26-27 policy meeting, published last week, showed most of its policymakers considered it appropriate to raise rates in June if data continued to point to an improvement in second-quarter growth.

Similar sentiments were echoed by Fed Chair Janet Yellen, who said on Friday the U.S. central bank could hike rates “in the coming months,” if the economy and the labor market continued to improve.

The Fed raised its benchmark overnight interest rate in December for the first time in nearly a decade.

The dollar .DXY rose to a two-month high against a basket of currencies, while prices for U.S. Treasuries fell. U.S. stocks were trading higher.

The upward revision to first-quarter GDP growth also reflected a modest hit from trade than previously estimated.

The economy has been hurt by a strong dollar and sluggish global demand, which have eroded export growth. It has also been squeezed by lower oil prices, which have undercut profits of oilfield companies like Schlumberger (SLB.N) and Halliburton (HAL.N), forcing them to slash spending on equipment.

Economists also believe the model used by the government to strip out seasonal patterns from data is not fully accomplishing its goal despite steps last year to address the problem. The economy has underperformed in the first quarter in five of the last six years.

REGAINING MOMENTUM

The economy appears to have regained momentum early in the second quarter, with retail sales, goods exports, industrial production, housing starts and home sales surging in April.

A report on Friday showed consumer sentiment holding at lofty levels in May, with households’ attitudes towards vehicle and home purchases improving.

The Atlanta Federal Reserve is currently estimating second-quarter GDP rising at a 2.9 percent rate.

Spending on residential construction increased at a 17.1 percent rate in the first quarter, the fastest pace since the fourth quarter of 2012. It was previously reported to have risen at a rate of 14.8 percent.

Residential construction added 0.56 percentage point to first-quarter GDP growth, up from the 0.49 percentage point reported last month.

Businesses accumulated $69.6 billion worth of inventory, instead of the $60.9 billion estimated last month. Inventories cut two-tenths of a percentage point from GDP growth instead of the previously reported 0.33 percentage point.

There was no revision to consumer spending, which accounts for more than two-thirds of U.S. economic activity. Spending increased at a pace of 1.9 percent, a slowdown from the fourth quarter’s 2.4 percent rate. Households were frugal in the first quarter, cutting back on purchases of long-lasting manufactured goods like automobiles. Income at the disposal of households after accounting fortaxes and inflation was revised up to show it jumping at a 4.0 percent rate in the first quarter instead of the previously reported 2.9 percent. Savings were revised up to $782.6 billion from $712.3 billion.

“The softish real consumer spending in the last couple of quarters is probably temporary and spending is likely to rebound in the second quarter, reflecting continued solid income formation,” said Kevin Cummins, senior economist at RBS in Stamford, Connecticut.

After-tax corporate profits increased at a 0.6 percent rate in the first quarter after plunging at an 8.4 percent pace in the fourth quarter, when they were held down in part by a $20.8 billion transfer payment related to the BP (BP.L) oil spill in the Gulf of Mexico in 2010.

Exports were not as weak as initially thought. That, together with a decline in imports, produced a smaller trade deficit, which subtracted 0.21 percentage point from first-quarter GDP growth instead of the 0.34 percentage point reported last month.

A sustained plunge in energy sector investment undercutbusiness spending. Equipment spending tumbled at a steeper 9.0 percent rate, the fastest pace of decline since the second quarter of 2009. It was previously reported to have dropped at a rate of 8.6 percent.

Spending on equipment will likely remain weak in the second quarter, with a report on Thursday showing orders for manufactured capital goods excluding aircraft and defense declined in April for a third straight month.

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

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/myA6xkhHFFc/us-usa-economy-idUSKCN0YI1JQ

Verizon and unions reach tentative deal to end strike


NEW YORK Verizon Communications Inc (VZ.N) and unions representing nearly 40,000 wireline workers have reached a tentative deal “in principle” to end a strike that started April 13th, U.S. Secretary of Labor Thomas Perez said on Friday.

Shares in Verizon, the No. 1 U.S. wireless company, jumped as much as 1.2 percent after the announcement and in afternoon trading were up almost 1 percent at $50.61.

Workers that included network technicians and customer service representatives in the company’s Fios Internet, telephone and television services walked off the job after contract talks hit an impasse. The action was called by the Communications Workers of America and the International Brotherhood of Electrical Workers.

The parties are drafting an agreement that will be submitted to the unions for ratification and workers are expected to be back on the job next week, Perez said in a statement.

Terms of the agreement have not been disclosed.

Sticking points in the contract negotiations had included job relocations, offshoring call-center jobs, pensions and healthcare coverage.

The tentative deal ends the potentially costly and sometime-contentious 44-day strike. The workers had been without a contract since their agreement expired in August and had been without healthcare coverage since May 1.

The last contract negotiations in 2011 also led to a strike that ended after two weeks as contract talks continued.

Union workers interviewed on Friday said they were relieved by the news of the tentative pact, but still remain wary as the deal terms are undisclosed.

“(The strike’s) been a burden on my family and myself,” said Fitz Boyce, 45, a Verizon field technician, who has been protesting outside Verizon’s Times Square store in New York since the strike started.

Verizon has agreed “to add good union jobs on the East Coast,” the CWA said in a statement.

The agreement is consistent with Verizon’s “objective of creating high quality American jobs,” the company said in a statement.

Verizon and union representatives had been in contract discussions mediated by the U.S. Department of Labor, after Perez, in mid-May, brought both parties back to the negotiating table.

The work stoppage at Verizon stretched across several U.S. East Coast states, including New York and Massachusetts. Verizon said it had trained managers and thousands of non-union employees over the past year to ensure that service would not be disrupted.

Company executives have hinted in recent weeks that the strike could pressure the bottom line, without providing details. Chief Financial Officer Fran Shammo said at a conference earlier in May that new installations and orders had “significantly dropped.” [L2N18L1GL]

Since the strike started the workers picketed outside Verizon stores and a handful of conferences attended by company executives. The strike, one of the largest in recent years, drew the support of Democratic U.S. Presidential candidates Bernie Sanders and Hillary Clinton.

Verizon has shifted its focus in recent years to new efforts in mobile video and advertising, while scaling back its Fios TV and Internet service.

The company has stopped expanding its old landline phone network and the wireline unit generated about 29 percent of company revenue in 2015, down about 60 percent since 2000, and less than 7 percent of operating income.

(Reporting by Malathi Nayak; Editing by Diane Craft)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ilNk1ruFR40/us-verizon-strike-idUSKCN0YI266

Verizon strike seen lowering U.S. May payrolls by 35,000 jobs


WASHINGTON The strike by Verizon Communications Inc (VZ.N) workers will probably trim U.S. non-farm payroll growth in May by at least 35,000 jobs, a Labor Department report showed on Friday.

The department’s monthly strike report showed 35,100 Verizon employees were idle during the survey period for the May payrolls count. Striking workers who do not receive a paycheck during the period are considered unemployed.

The Verizon workers, including network technicians and customer service representatives in the company’s Fios Internet, telephone and television services unit, walked off the job on April 13 in the largest U.S. strike in recent years.

Labor Secretary Thomas Perez said on Friday that Verizon and unions representing the striking workers had reached a tentative deal.

The Labor Department will publish its closely watched employment report for May on June 3.

Economists polled by Reuters expect the data to show payrolls increased by 164,000 workers this month after rising 160,000 in April. The unemployment rate is seen steady at 5 percent.

(Reporting by Lucia Mutikani; Editing by David Gregorio and Lisa Von Ahn)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/lDgzEWd2zXg/us-usa-economy-employment-idUSKCN0YI20W

Konecranes-Terex deal to proceed as China’s Zoomlion drops rival bid


HONG KONG/HELSINKI China’s Zoomlion Heavy Industry Science and Technology Co Ltd (000157.SZ) has abandoned its $3.4 billion bid for U.S. crane maker Terex Corp (TEX.N), clearing the way for a smaller deal between Terex and Finland’s Konecranes (KCR1V.HE).

The decision comes after six months of merger talks between Terex and Zoomlion and marks the latest setback to corporate China’s ambitions to acquire U.S. assets. In March, Anbang Insurance Group Co unexpectedly withdrew its $14 billion offer to buy Starwood Hotels Resorts Worldwide Inc (HOT.N).

Zoomlion and Konecranes had both bid for Terex to help them better cope with cooling Chinese and weak European demand in the cranes business.

Konecranes and Terex had agreed on an all-share merger in August. But Zoomlion emerged publicly as a rival bidder in January and sweetened its unsolicited offer to $3.4 billion in March.

The Finnish company this month scrapped plans for a full merger and instead agreed to buy just part of Terex – its cranes business for ports and factories (MHPS) – for 1.1 billion euros ($1.2 billion).

“Unfortunately, after many months of discussions, Zoomlion was unable to provide a fully financed, binding proposal for the purchase of Terex with or without MHPS,” David Sachs, chairman of the board of Terex, said in a statement.

The latest agreement with Konecranes gave Terex the right to terminate the deal for a fee by the end of the month if its talks with Zoomlion were to proceed.

“Following negotiations, Zoomlion has concluded that Terex’s expectations on the valuation do not adequately reflect the impact of the sale of the MHPS segment,” Zoomlion said in a statement that elaborated on its move.

There had been concerns that, were Terex’s port business to be acquired by Zoomlion rather than Konecranes, the deal would have been scrutinized heavily by the Committee on Foreign Investment in the United States on national security grounds.

Terex shares dropped as much as 21 percent in Friday morning trading in New York. Konecranes shares ended trading on Friday up 3.1 percent in Helsinki, while Zoomlion’s shares ended trading down 0.7 percent.

“We’ve reached the result we wanted, and we are very pleased,” Konecranes Chief Executive Panu Routila told Reuters, adding that the companies would start integration plans after the summer.

Last week, Konecranes shares jumped as much as 18 percent when the modified deal was announced. The merger is expected to close early next year.

A successful acquisition would have put Zoomlion on a more equal footing with cross-town rival Sany Heavy Industry Co Ltd (600031.SS), which has a U.S. assembly plant.

“Without the positive effect due from Terex, Zoomlion will continue to develop slowly at its own pace,” said Jiao Yiding, an analyst at China Merchants Securities in Shenzhen.

Last month, Zoomlion posted a record quarterly loss as Chinese heavy equipment makers battle an historic glut of unsold equipment.

In January, the United States blocked a bid by Chinese-based investment fund GO Scale Capital for Philips’ (PHG.AS) lighting-components business on security grounds.

(Additional reporting by Donny Kwok in Hong Kong, Greg Roumeliotis in New York, and Bengaluru newsroom; Writing by Jussi Rosendahl; Editing by Frances Kerry and Cynthia Osterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/vlgl_Eohp7s/us-terex-m-a-zoomlion-idUSKCN0YI0DC

Monsanto boss could net $70 million from a Bayer takeover


LONDON Monsanto boss Hugh Grant could land more than $70 million if the world’s largest seed company is taken over by German chemicals giant Bayer AG (BAYGn.DE).

The U.S. firm said it was open to engaging in further negotiations with Bayer after turning down its $62 billion bid as “incomplete and financially inadequate” this week.

That $122-per-share offer would allow CEO and Chairman Grant to walk away with a total package of more than $123 million after a takeover, including from the sale of shares and the exercise of options he already owned, a Reuters analysis of Monsanto filings shows.

But $73.5 million of that represents gains the 58-year-old Scot could make as a result of the Bayer courtship, largely thanks to increases in the value of his stock options.

The gains also reflect the rise in the value of his shareholdings and accelerated payout of bonuses that would occur if there is a takeover, as well as a $14.5 million “golden parachute” severance payment he would receive if he loses his job as a result.

There is no certainty that ongoing negotiations will result into a deal although Monsanto’s board has signaled interest in reaching an accord with Bayer. Grant, who is eligible for retirement, said his company firmly endorsed “the substantial benefits an integrated strategy could provide to growers and broader society” after the bid was snubbed on Tuesday.

Even should a deal be struck, it is not certain that Grant would be ousted. But in most takeovers, the CEOs of the targets tend to exit after their companies are sold. The agrochemicals mega-deal between Dow Chemical (DOW.N) and Dupont (DD.N) agreed in December – an unusual case because it was billed as a “merger of equals” of two companies of roughly equal size – will see both CEOs depart.

Grant’s exposure to shares and options means he has an incentive to hold out for the highest possible sale price in any deal, which would not only be in the interests of shareholders but also increase the value of his holdings. A $130-per-share bid, for example, would lift his holdings by another $12 million, the Reuters analysis shows.

A spokesman for St Louis-based Monsanto declined to comment on its compensation scheme.

PAYDAY

The company – which makes the world’s most widely used herbicide, Roundup – has been wrestling with low crop prices and spending cutbacks by U.S. farmers, which have hit its profits.

Before reports about a potential Bayer bid in early May, Monsanto’s shares were trading at around $90. At that price, Grant’s share options were worth around $1 million.

At $122-per-share, they are worth over $49 million.

Other top executives would also benefit from a takeover.

Brett Begemann, president and chief operating officer, could walk away with a total of $36.5 million for his shares and in gains on his options, accelerated bonuses and severance, should a deal be done at $122-a-share and his job terminated.

Such an accord would make him about $20 million better off than he was based on the pre-bid share price.

The other three directors whose total pay is disclosed in filings – Chief Financial Officer Pierre Courduroux, Chief Technology Officer Robert Fraley and General Counsel, David Snively – could walk away with a total of over $56 million in shares, bonuses and severance if a deal goes through.

Any merger of Bayer’s agrochemicals operations with Monsanto’s would be the second “mega-deal” in the industry in recent months after the creation of DowDuPont, a $130 billion giant.

The departing CEOs of Dow Chemical and DuPont will walk away with a combined $80 million.

Dow’ Andrew Liveris will get $52.8 million in cash, stock and other payments, including about $40 million he is already entitled to on his retirement, DowDuPont said in a regulatory filing. DuPont’s Edward Breen will get $27.2 million, DowDuPont said.

(Editing by Pravin Char)

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Automakers recall 12 million U.S. vehicles over Takata air bags


WASHINGTON Eight automakers said on Friday they are recalling more than 12 million U.S. vehicles for defective Takata air bag inflators, widening the largest-ever auto safety effort to more passenger-side devices.

Honda Motor Co (7267.T) is recalling 4.5 million U.S. vehicles while Fiat Chrysler Automobiles NV (FCHA.MI)(FCAU.N) is recalling 4.3 million, according to the documents. The new recall is focused on passenger-side air bag inflators, while prior recalls were for all frontal inflators.

Takata declared 14 million inflators defective in the first phase of its latest recall, and the Friday notice is included in that total.

Under U.S. government pressure, Japan’s Takata Corp (7312.T) this month agreed to declare as many as 40 million additional air bag inflators defective by 2019 in a move that will involve recalls by 17 automakers.

Takata inflators can explode with too much force and spray metal shrapnel into vehicle passenger compartments.

The defective air bag inflators have been linked to at least 13 deaths and more than 100 injuries worldwide. The vehicles being recalled were built between 2002 and 2011 and include pickups, SUVs and cars.

Separately, Takata is in bailout talks with a number of potential investors including private equity firm KKR Co (KKR.N), a source told Reuters on Thursday.

Takata and the automakers say there are no reports of any ruptures involving the vehicles in the latest recall. They are prioritized by the car’s age and the risk of exposure to high humidity. As a result, some owners may not get replacement inflators for several years.

Automakers worldwide had previously recalled about 50 million vehicles with Takata inflators.

Japan’s transport ministry said Friday that automakers will recall approximately 7 million vehicles there, so the total worldwide is approaching 70 million.

Other automakers will issue notices in the coming days.

Before Friday, 14 automakers led by Honda had recalled 28.8 million inflators affecting 24 million U.S. vehicles.

At least 2.3 million of the 12 million vehicles in the latest recall were subject to previous driver side recalls.

Toyota Motor Corp (7203.T) told regulators it is recalling 1.65 million vehicles while Subaru (7270.T) is recalling nearly 400,000 vehicles in the United States.

The two automakers said they include some discontinued Saab and Pontiac vehicles assembled for General Motors Co (GM.N).

Fiat Chrysler said Friday it is also recalling 933,000 vehicles sold outside the United States for Takata inflators. It told the U.S. National Highway Traffic Safety Administration (NHTSA) that the second phase of the Takata expansion would include 660,000 additional U.S. vehicles.

The new recalls are the result of increasingly aggressive U.S. auto safety regulators. The issue gained new traction after the March 31 death of an 17-year-old high school student in Texas in a moderate crash in her 2002 Honda Civic that police said would have been survivable without the defective air bag.

NHTSA Administrator Mark Rosekind said the latest recall “ensures the inflators will be recalled and replaced before they become dangerous, giving vehicle owners sufficient time to have them replaced before they pose a danger.”

Mazda Motor Corp (7261.T) is recalling 730,000 U.S. vehicles while Nissan Motor Co (7201.T) is recalling 400,000.

Mitsubishi Motors Corp (7211.T) is recalling 38,000 vehicles and Ferrari NV (RACE.MI) is calling back 2,800 U.S. sports cars.

Automakers face challenges obtaining enough replacement parts and getting owners to repair their cars. Through May 20, just 8.5 million inflators have been replaced.

Takata may face still more vehicle recalls.

Under a November agreement with NHTSA, it agreed to phase out the volatile chemical ammonium nitrate used in the recalled inflators.

Takata could be required by 2019 to recall another 50 million U.S. inflators with ammonium nitrate unless Takata can prove they are safe under the NHTSA agreement.

In November, Takata agreed to pay a $70 million fine for safety violations and NHTSA named a former federal prosecutor as an independent monitor to oversee the massive recalls.

The embattled Japanese supplier faces an ongoing U.S. criminal investigation as well as class-action lawsuits and suits filed by the state of Hawaii and the U.S. Virgin Islands.

(Editing by Jeffrey Benkoe and Bernard Orr)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/g6zqxijnMLg/us-autos-takata-recall-idUSKCN0YI144

Dollar rises as world stock markets hold steady


LONDON The U.S dollar rose on Friday while world stock markets were steady, as investors braced for the likelihood of a hike in U.S. interest rates in coming months.

The MSCI All-Country World equity index .MIWD00000PUS edged higher by 0.1 percent.

The pan-European FTSEurofirst 300 index .FTEU3 of leading European shares slipped 0.1 percent but remained in touching distance of a one-month reached earlier this week. [.EU].

“Markets are doing remarkably well given that a U.S. interest rate rise might happen as early as next month,” said Lex Van Dam, hedge fund manager at Hampstead Capital.

The dollar index .DXY rose 0.1 percent and was on track for its best monthly performance since last November, after a string of U.S Federal Reserve officials raised expectations for a hike in interest rates as early as June, given signs of strength in the world’s biggest economy.

Investors were also looking out for further clues on when U.S. rates might go up from a speech due later in the day from Federal Reserve head Janet Yellen.

“I’m not sure if U.S. interest rates will go up in June, but July is quite likely,” said Clairinvest fund manager Ion-Marc Valahu, who added that he had recently canceled some earlier “short” positions that were betting on the dollar losing ground.

A stronger U.S. dollar can often lift European stocks, since a weaker euro EUR= can help European companies to export their goods overseas.

However, some traders said stock markets were unlikely to make much headway in the coming month, given the uncertainty over issues such as future U.S. rate rises and Britain’s June vote on its membership of the European Union.

“With the headwinds of a possible interest rate hike from the Federal Reserve, and the EU referendum in June, there might not be a huge amount of new money coming into the market,” said Manoj Ladwa, head of trading at TJM Partners.

(Additional reporting by Anirban Nag and Alistair Smout in London, and Shinichi Saoshiro in Tokyo; editing by Ralph Boulton)

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