News Archive


Toshiba faces shareholders with no chip unit deal signed


CHIBA, Japan Japan’s Toshiba Corp (6502.T) faced shareholders at its annual meeting on Wednesday with no deal in hand for the sale of its prized flash memory chip unit and a long list of humiliating setbacks to apologise for.

Scrambling to cover billions of dollars in cost overruns at its bankrupt Westinghouse nuclear unit, Toshiba had pledged to have a signed definitive agreement for the $18 billion sale of the unit – the world’s No. 2 producer of NAND chips – by the shareholders meeting.

But the conglomerate said in a statement on Wednesday that talks with some members of the preferred bidder consortium – which is led by Japanese government investors and includes U.S. private equity firm Bain Capital – were taking time.

Prospects for a quick and smooth deal have become highly uncertain as Western Digital Corp (WDC.O) which jointly runs Toshiba’s main semiconductor plant, is vehemently opposed to a sale that does not include it and is seeking a U.S. court injunction to prevent any deal that does not have its consent.

Underscoring tensions between the two business partners, Toshiba CEO Satoshi Tsunakawa lambasted Western Digital at the shareholders meeting.

“Western Digital has been interfering with no due cause in the process of the chip unit sale with its request for arbitration and its lawsuit,” he said.

Further complicating matters, Western Digital and U.S. private equity firm KKR Co LP (KKR.N) resubmitted an offer for the semiconductor business on Tuesday, in an eleventh hour effort to prevent a deal with the preferred bidder.

While Toshiba said late last week that it was open to talks with its U.S. chip partner, its response to the resubmitted bid has been to only say that is continuing to talk with its preferred bidder.

Western Digital said it will provide debt financing to facilitate a sale as part of the resubmitted bid. It was not immediately clear if terms of the offer had significantly changed from one tabled earlier this month that Western Digital has said met Toshiba’s minimum requirement of 2 trillion yen ($18 billion).

Sources with knowledge of the matter have said a state-backed fund, the Innovation Network Corp of Japan (INCJ), and the Development Bank of Japan (DBJ) which are currently part of preferred bidder consortium – would be invited to join Western Digital’s resubmitted offer.

While it was not immediately clear what parts of the talks with the preferred bidder consortium were taking time, sources familiar with the matter have said some Toshiba board members are concerned about technology leaks to South Korean chip rival SK Hynix Inc (000660.KS), which is part of the consortium and will provide Bain with financing.

Western Digital has also said it is strongly opposed to SK Hynix’s participation and has threatened further legal action.

In addition to failing to sign a deal for the chip unit, Toshiba last week flagged a net loss of around $9 billion for the year ended in March with negative shareholders’ equity of around $5.2 billion, both worse than expected.

It has also yet to have auditors sign off on its annual results due to a prolonged probe at Westinghouse and its shares are set to be demoted to the second section of the Tokyo Stock Exchange from Aug. 1.

Toshiba’s shares were mostly flat in morning trade, giving the company a market value of 1.25 trillion yen ($11 billion). The stock has lost some 34 percent since last December when the company flagged huge losses at its U.S. nuclear power operations.

($1 = 112.1100 yen)

(Reporting by Makiko Yamazaki, Taro Fuse and Kentaro Hamada; Editing by Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/j_cMmgF97HA/us-toshiba-accounting-idUSKBN19I308

‘Pharma bro’ Martin Shkreli’s notoriety slows New York jury selection


NEW YORK Jury selection in the New York trial of former drug company executive Martin Shkreli will enter its third day Wednesday, after some potential jurors said they could not be fair to a man who gained notoriety by raising the price of a life-saving drug more than 5,000 percent.

U.S. prosecutors have accused Shkreli, dubbed the “pharma bro,” of running a Ponzi-like scheme at his former hedge fund and a drug company he once ran. Shkreli has pleaded not guilty to charges of securities and wire fraud.

The difficulty of finding a jury became apparent on Monday, with potential jurors variously describing Shkreli as “evil” and a “snake.” More jurors cited the length of the trial, expected to last up to six weeks, as a hardship.

The ensuing headlines prompted Shkreli’s lawyer, Benjamin Brafman, to ask U.S. District Judge Kiyo Matsumoto in Brooklyn on Tuesday morning to declare a mistrial. She refused.

The trouble continued Tuesday, as Matsumoto asked potential jurors left over from Monday whether they had been exposed to negative media reports about the previous day. Several who said they had were dismissed.

Shkreli, 34, rose to fame in 2015 by raising the price of anti-parisitic drug Daraprim to $750 a pill, from $13.50, when he was chief executive of Turing Pharmaceuticals. The move sparked outrage among patients and U.S. lawmakers.

Shkreli’s upcoming trial is not about Turing but about Shkreli’s management at his previous drug company, Retrophin Inc, and the hedge fund MSMB Capital Management between 2009 and 2012.

Prosecutors said Shkreli lied about MSMB’s finances to lure investors and concealed devastating trading losses from them. They said he paid the investors back with money stolen from Retrophin, which he founded in 2011.

Tuesday’s jury questioning suggested Turing might come up anyway. One juror, a pharmacist, was dismissed after saying he was familiar with the company, and that he would compare any testimony about drug pricing to his own knowledge.

Shkreli himself may have complicated the jury selection. While most criminal defendants lie low, he has sought public attention since his December 2015 arrest, lashing out at critics and boasting of his wealth on social media. He was banned from Twitter in January for harassing a journalist.

One juror was dismissed on Tuesday after saying he was familiar with Shkreli’s Twitter account.

“Unfortunately, the Twitter history is just horrific,” Brafman said.

(Reporting by Brendan Pierson in New York; Editing by Tom Brown)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/l37pyoUYpL4/us-usa-crime-shkreli-idUSKBN19I31T

‘What’s the rush’ on interest rate hikes, asks Fed’s Kashkari


With inflation low and wages showing little sign of an upward surge, the U.S. Federal Reserve should not be raising interest rates, Minneapolis Fed President Neel Kashkari said on Tuesday.

“What’s the rush?” Kashkari asked at an event at Michigan Technological University in Houghton, Michigan, adding that neither wage nor inflation data is giving any sign that the economy is about to overheat and indeed may suggest that there is still some slack in the labor market.

The Fed raised rates twice this year, including earlier this month, and Kashkari dissented both times.

He disagrees with Fed Chair Janet Yellen, who sees unemployment at a 16-year low and projects inflation will necessarily move toward the Fed’s 2 percent target. Yellen says the Fed needs to keep raising rates to prevent inflation from overshooting.

Though Kashkari failed to persuade his colleagues in June that they should leave rates alone, he continues to make his case for it. On Tuesday, he repeated his view that with inflation weakening in recent months, “I don’t see what we are so worried about.”

“Why are we trying to cool down the economy, when there may still be some slack in the job market, and there is still some room to run on the inflation front?” he said. “We’re not seeing wages climb very fast, and we’re not seeing inflation. That tells me the economy is not on the verge of overheating.”

(Reporting by Ann Saphir; Editing by Leslie Adler and Jonathan Oatis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/NdulizrUC6w/us-usa-fed-kashkari-idUSKBN19I2XU

Nestle plans $20.8 billion share buyback amid Third Point pressure


LONDON/ZURICH Nestle (NESN.S) plans to buy back as much as 20 billion Swiss francs ($20.8 billion) worth of shares over three years, it said on Tuesday, days after U.S. activist shareholder Third Point LLC began a campaign to boost performance at the company.

The New York-based hedge fund, controlled by billionaire investor Daniel Loeb, disclosed a $3.5 billion stake in the company on Sunday when it started pushing for Nestle to more aggressively boost performance and buy back shares.

Nestle, maker of Gerber baby food and Perrier water, said its announcement was the result of a review of its priorities that had begun in early 2017. It did not mention Third Point in its statement, and Third Point declined to comment on the announcement.

However, Nestle’s Chief Executive Mark Schneider, who took over at the start of the year, said at the company’s first-quarter results presentation in April that he understood from meetings with shareholders they wanted to see “meaningful steps towards improved combinations of growth rates and margins”.

These comments and the fact that buyback plans take time to get regulatory approval before being announced mean that Nestle would have submitted the plan before Third Point made its position public late on Sunday.

Kepler Cheuvreux analyst Jon Cox said there was no big surprise in the company’s statement, but it had initially planned to release this at its investor day in September.

It was not clear, however, whether feedback that Loeb might have given in a meeting earlier this month was taken into consideration when Nestle crafted the final buyback plan, which will start on July 4.

Vontobel analyst Jean-Philippe Bertschy did not see the announcement as a direct result of Third Point.

“We rather see today’s announcement as a thorough strategic review triggered by CEO Mark Schneider, approved by the board,” he said, noting that this was Nestle’s second-biggest buyback following 25 billion Swiss francs in 2007. The company has bought back 47 billion francs worth of shares since 2005.

“In the context of low interest rates and strong cash flow generation, share buybacks offer a viable option to create shareholder value,” the company said.

The volume of monthly share buybacks will depend on market conditions but will probably occur mostly in 2019 and 2020, so Nestle can consider acquisitions before then, it said.

The company now expects to increase its level of debt to about 1.5 times earnings before interest, taxes, depreciation and amortization (EBITDA) by 2020. That would be up from about 0.8 times last year.

HOPES OF CHANGE

Nestle shares had jumped 4 percent on Monday, adding some $10 billion in market value before falling 1.6 percent on Tuesday, on hopes the push by Third Point would speed up changes under Schneider, who joined the company last year and took over as CEO in January.

On Tuesday, Nestle said it will focus any capital spending on high-growth food and beverage categories including coffee, petcare, infant nutrition and bottled water, as well as growth opportunities in consumer healthcare.

It said this month’s announcement that it may sell its U.S. confectionery business was consistent with that approach. It also recently formed a joint venture with RR Ice Cream to manage its ice cream business.

“The company will continue to adjust its portfolio in line with its strategy and growth objectives,” Nestle said. There are other parts of Nestle’s business that analysts have speculated could be sold, including its U.S. frozen food business.

Billions of dollars worth of assets are up for grabs as the global packaged food industry adapts to change. For example, Unilever (ULVR.L) is selling its margarine and spreads business and Reckitt Benckiser (RB.L) is selling its mustard business.

Kepler’s Cox said the fact that the company said it was targeting spending in consumer healthcare meant “it could be seen on the prowl for assets like Johnson and Johnson’s consumer health as well as Bayer’s consumer health business”.

TOO BIG TO SHAKE?

The pressure placed on the world’s largest food group, Europe’s most valuable company, shatters perceptions that the Swiss giant with over 2,000 brands is too big to shake up.

CEO Schneider, who had met Loeb this month, seemed to hint at that last week when he told a conference in Berlin: “Size alone does not protect you from the winds of change.”

Coupled with a shock $143 billion takeover bid from Kraft Heinz for Unilever in February, it shows the impatience of some investors about how multinationals are adapting to change.

Loeb, who has taken on giants such as Yahoo and Sony (6758.T), has argued that even though Nestle has exposure to promising categories such as coffee and pet food, its shares have underperformed rivals in recent years as it has “remained stuck in its old ways”.

“It is rare to find a business of Nestle’s quality with so many avenues for improvement,” Loeb said in the letter to the fund’s investors.

Nestle should set a target for margin growth to improve productivity, double its leverage to fund share buybacks, shed non-core assets and sell the 23 percent stake it owns in French cosmetics group L’Oreal (OREP.PA), he said.

Whereas Unilever and Danone have recently set margin targets for 2020, Nestle has not. It has announced a productivity program to save 1.8 billion Swiss francs by 2020, but has not yet said how much of that would fall to the bottom line.

Analysts have said that Schneider, who will lay out his strategy at an investor event in September, had already seemed more open to listening to the concerns of longtime shareholders, many of which were echoed by Third Point.

Daniel Hauselmann, head of Swiss equities at GAM Investment Management, said much of what Third Point suggested was already being done.

“Nestle is no sleeping giant that does not look after its shareholders,” he told Reuters. “I think Nestle should stick to its strategy.”

($1 = 0.9618 Swiss francs)

(Additional reporting by John Miller and Angelika Gruber in Zurich and Michael Flaherty in New York)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ef8v-70DpVg/us-nestle-thirdpoint-idUSKBN19I2AC

Madoff settlements reach $12 billion with new accords


NEW YORK The trustee recouping money for Bernard Madoff’s victims on Tuesday announced nearly $371 million of new settlements with two groups of offshore funds that invested with the imprisoned Ponzi schemer, boosting the total recovery to about $12 billion.

Irving Picard, the trustee, said Lagoon Investment Ltd agreed to repay $240.7 million from an account through which Hermes International Fund Ltd invested with Madoff, while Thema Fund Ltd and an affiliate agreed to repay $130.1 million.

Picard announced the settlements with British Virgin Islands-based Lagoon and Bermuda-based Thema one day after revealing more than $23 million of settlements with the estates of Madoff’s late sons Andrew and Mark, and entities affiliated with the Madoff family.

Lagoon and Thema were among many feeder funds that sent customers’ money, often without their knowledge, to Bernard L. Madoff Investment Securities LLC.

Picard said the recovered sums represent money withdrawn in the six years before Madoff’s fraud was uncovered in December 2008.

Like many other former Madoff customers that settled with Picard, Lagoon and Thema will be entitled to share in distributions from the Madoff firm’s liquidation.

Picard had previously recovered more than $11.6 billion for Madoff customers who he estimates lost $17.5 billion.

The trustee and Baker Hostetler have been awarded more than $889 million of compensation for their work on Madoff matters through Nov. 30, 2016, according to an order signed by U.S. Bankruptcy Judge Stuart Bernstein, who oversees the process.

A hearing to consider approving the settlements with Lagoon, Thema and the Madoff sons’ estates has been set for July 26.

Andrew Madoff died of cancer in September 2014 and Mark Madoff committed suicide in December 2010. Bernard Madoff, 79, is serving a 150-year prison term.

The case is Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789.

(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/x5M-fQqgHTs/us-madoff-settlement-idUSKBN19I2ZA

U.S. antitrust lawsuit against Qualcomm to proceed, judge rules


The Federal Trade Commission’s antitrust lawsuit against Qualcomm Inc (QCOM.O) can proceed, a federal judge ruled late on Monday, meaning the iPhone chip supplier must now wage a fight with U.S. regulators even as it contests a separate $1 billion lawsuit filed by Apple Inc (AAPL.O).

U.S. District Judge Lucy Koh of the Northern District of California in San Jose denied Qualcomm’s motion to dismiss the FTC’s lawsuit, saying the agency’s allegations would amount to anticompetitive behavior on Qualcomm’s part if proved true.

In response, Qualcomm said the case is still in its early stages. “FTC will have the burden to prove its claims, which we continue to believe are without merit,” Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement on Tuesday.

The FTC sued Qualcomm in January, alleging the company engaged in anticompetitive tactics to maintain a monopoly on the chips that let cell phones connect to mobile data networks.]

The FTC highlighted Qualcomm’s “no license, no chips” policy under which the San Diego company refuses to sell chips unless customers also sign a patent license agreement and pay Qualcomm fees. Qualcomm refused to grant licenses to its rivals in order to keep a monopoly, the FTC alleged.

Qualcomm asked Koh to throw out the case, arguing that even if all the FTC’s allegations were true, they would not amount to wrongdoing.

Qualcomm, the largest independent maker of chips used in smartphones, is a major supplier to Apple and Samsung Electronics Co Ltd (005930.KS) for modem chips that connect phones to wireless networks.

Intel Corp (INTC.O) and Samsung Electronics Co Ltd (005930.KS), which are not parties to the case, filed briefs opposing Qualcomm’s attempt to the have the case dismissed.

Koh rejected Qualcomm’s arguments, ruling that the FTC had “adequately alleged” anticompetitive behavior.

“We look forward to further proceedings in which we will be able to develop a more accurate factual record,” Qualcomm’s Rosenberg said in the statement.

Separately, Apple sued Qualcomm for $1 billion in January. Last week, Apple argued Qualcomm’s chip licenses are invalid under a ruling last month from the U.S. Supreme Court. Apple’s contract manufacturers such as Foxconn stopped paying Qualcomm as that case proceeds, which in turn prompted Qualcomm to sue the contract manufacturers.

In addition to the complaint from the FTC, Qualcomm has faced a series of antitrust rulings and investigations from regulators across the globe, including China and South Korea.

The FTC’s case is No. 5:17-cv-00220 in the Northern District of California.

(Reporting by Stephen Nellis in San Francisco; Editing by Matthew Lewis)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/_Xv1qhWpsyw/us-qualcomm-lawsuit-idUSKBN19I2QL

Google faces years of EU oversight on top of record antitrust fine


BRUSSELS/FRANKFURT Beyond a headline-grabbing 2.4 billion euro ($2.7 billion) fine EU antitrust regulators have leveled against Google, the internet giant is likely to be shackled for years by Tuesday’s precedent-setting decision defining the company as a monopoly.

The ruling opens the door for further regulatory actions against more crucial parts of Google’s business – mobile phones, online ad buying and specialized search categories like travel – while easing the standard of proof for rivals to mount civil lawsuits showing Google has harmed them.

So far, investors have shrugged off the EU’s threatened crackdown, with Google’s holding company Alphabet’s shares down 1.8 percent in early U.S. trade amid a continued selloff in technology stocks. The stock has doubled in the two years since European authorities vigorously stepped up investigations of it.

It trades just behind rival Apple as the world’s most valuable stock with a $666 billion market capitalization.

The real sting is not from the fine for anti-competitive practices in shopping search but the way the EU has thrown the issue back to Google to solve, meaning the company won’t be able to comply through an easy set of technical steps.

In effect, the Commission is forcing Google to demonstrate that rivals have made substantial inroads into its businesses before there is much chance of it being let off the regulatory hook. EU competition chief Margrethe Vestager promised Google was in for years of monitoring to guard against further abuses.

“Just being put on notice can limit Google’s strategic options into the future,” said Matti Littunen, a digital media and online advertising analyst with Enders Analysis in London.

The EU’s 2004 ruling that Microsoft Corp had abused its dominant market position in Windows and other markets is now seen as having curtailed the software giants moves over the subsequent decade to expand more quickly into emerging markets such as online advertising, opening the way for Google’s rise.

Putting the onus on the company underlines regulators’ limited knowledge of modern technologies and their complexity, said Fordham Law School Professor Mark Patterson.

“The decision shows the difficulty of regulating algorithm-based internet firms,” he said. “Antitrust remedies usually direct firms that have violated antitrust laws to stop certain behavior or, less often, to implement particular fixes.

“This decision just tells Google to apply ‘equal treatment,’ not how to do that”.

WARNING SHOT

The EU ruling is a warning shot for two on-going EU probes into Google’s Android mobile operating system and AdSense ad system could turn out, said Richard Windsor, an independent financial analyst who tracks competition among the biggest U.S. and Asian internet and mobile players, including Google.

“If the European Union turns around and says Google can no longer bundle its Google Play app store as a default feature on many Android smartphones, this opens up the market to other handset makers to put their own software and services front and center on their phones,” he said. Littunen of Enders Analysis agreed, saying while Google may be able to meet EU objections in the AdSense case by making relatively modest changes to its advertising systems to enable website customers to run ads from Google advertising rivals, the Android case has many complicated factors with no easy solution.

More importantly, Google must find ways change its business practices without harming its very lucrative advertising business model, which accounted for around 85 percent of the $90.3 billion in revenue of parent company Alphabet in 2016.

“The EU’s identification of ‘super-dominance’ in internet search throughout the European Economic Area is confirmed and will provide a cornerstone for assessment of other ongoing cases, especially regarding Android and AdSense,” said Jonas Koponen, competition chief at Linklaters law firm in Brussels.

“This could result in a profound change to the company’s business models,” he predicted.

Yet another worry for the company could be a wave of lawsuits in the future.

“We can expect to see a series of damages claims brought by the rivals that were excluded from the market by Google’s conduct,” said Peter Wills, co-head of competition law for Bird Bird in London, setting the stage for national court battles.

With the EU’s Vestager giving no ground in her record demand last year to collect 13 billion euros in unpaid taxes from Apple and stopping Google from squeezing out rivals, other tech giants will probably think twice before testing her further.

(Editing by David Evans)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6SSFM-P4d50/us-eu-google-antitrust-outlook-idUSKBN19I2MO

Delaware top court rules for Chicago Bridge in Westinghouse dispute


WILMINGTON, Del The Delaware Supreme Court ruled in favor of Chicago Bridge Iron Co (CBI.N) on Tuesday in a $2 billion dispute with Westinghouse Electric Co that stems from cost overruns at a pair of unfinished U.S. nuclear power plants.

The two companies have been sparring over a 2015 deal in which Westinghouse, a unit of Japan’s Toshiba Corp (6502.T), bought the Shaw nuclear construction business of Chicago Bridge.

Pittsburgh-based Westinghouse later sought an adjustment to the closing deal price by questioning Chicago Bridge’s historical accounting, which Chicago Bridge said amounted to an attempt to recut the deal.

Westinghouse and Chicago Bridge agreed that an independent auditor would review post-closing adjustments to the deal price, a process that is underway.

Tuesday’s ruling will prevent Westinghouse from bringing to the auditor issues tied to historical accounting, which made up the bulk of Westinghouse’s claim for $2 billion as a post-closing adjustment.

Westinghouse spokeswoman Sarah Cassella said the company was reviewing the ruling.

Chicago Bridge did not immediately respond to a request for comment.

Chicago Bridge shares shot about 37 percent higher to $19.66, on track for their biggest one-day percentage gain since 2008. The stock had tumbled 50.5 percent since May 8 as investors were anxious about the legal case as well was weak earnings.

Westinghouse bought Shaw for nothing up front, but agreed to accept liabilities related to nuclear plant projects that Shaw was building in partnership with Westinghouse in Georgia and South Carolina.

Billions of dollars of cost overruns at those projects forced Westinghouse to file bankruptcy in March, and have threatened Toshiba with financial ruin.

Westinghouse sought $2 billion from Chicago Bridge as a post-closing adjustment, contending that the infrastructure firm’s historical accounting was not compliant with generally accepted accounting principles, or GAAP.

Chicago Bridge had sought $428 million from Westinghouse as a post-closing adjustment.

Chicago Bridge sued last year in Delaware’s Court of Chancery seeking a declaration that GAAP non-compliance was not an appropriate issue for the independent auditor.

The Court of Chancery ruled for Westinghouse, a decision the Supreme Court said in Tuesday’s ruling opened the way for Westinghouse to make “a wide-ranging” right to challenge Chicago Bridge’s accounting.

“We conclude that the Court of Chancery erred in interpreting the purchase agreement this way,” the Supreme Court wrote.

(Reporting by Tom Hals in Wilmington, additional reporting by Sinead Carew in New York, Delaware; Editing by Bernard Orr and Noeleen Walder)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4fg9laNyuJg/us-toshiba-accounting-westinghouse-chgo-idUSKBN19I1Z2

S&P, Dow pare losses as bank, consumer stocks rise


The SP 500 and the Dow Jones Industrial Average pared early losses in late morning trading on Tuesday as bank and consumer stocks rose on robust consumer confidence data, while the Nasdaq Composite was dragged lower by a fall in technology shares.

Data showed consumer confidence for June rose more-than-expected, which could bolster the Federal Reserve’s case for another rate hike this year.

However, a steep fall in oil prices and a flattening yield curve have added to concerns over inflation, which remains below the Fed’s 2 percent target.

“The consumer remains confident and given that consumers drive two-thirds of the economy, that to me says, perhaps the news of a slowdown may be oversold,” said Brad McMillan, Chief Investment Officer for Commonwealth Financial.

The financial index .SPSY rose 0.89 percent, leading the gainers among the major SP sectors, as investors expect the central bank to look through a slowdown in inflation and continue on their current path for rate hikes.

Bank of America (BAC.N) was up 1.4 percent and JPMorgan (JPM.N) rose 0.8 percent, providing the biggest boost to the SP.

The consumer discretionary index .SPLRCD sector inched up 0.12 percent, with Home Depot (HD.N) boosting the Dow.

Fed Chair Janet Yellen is scheduled to take part in a discussion on global economic issues in London at 1 p.m. ET (1700 GMT). Investors expect Yellen to offer more insight into the state of the U.S. economy.

“I think at this point the Fed is more or less committed to raising rates as they’re more worried about being behind the curve and reloading the gun in case of a recession,” added McMillan.

Philadelphia Fed President Patrick Harker said on Tuesday the Fed rightly plans to raise rates once more this year, given recent inflation weakness is likely temporary.

At 11:03 a.m. ET, the Dow Jones Industrial Average .DJI was up 21.18 points, or 0.1 percent, at 21,430.73, the SP 500 .SPX was up 0.36 points, or 0.01 percent, at 2,439.43.

The Nasdaq Composite index .IXIC was down 15.49 points, or 0.25 percent, at 6,231.66.

The technology index .SPLRCT fell 0.39 percent due to a drop in the shares of Apple (AAPL.O), Microsoft (MSFT.O) and Alphabet (GOOGL.O).

Alphabet fell 1 percent to $962.64 after EU antitrust regulators hit the tech giant with a record $2.7 billion fine.

Since the beginning of the year, the tech index has jumped about 19 percent, making it the biggest force behind the SP’s record-setting rally.

However, the sector has come under pressure of late over concerns about lofty valuations.

Sprint (S.N) rose 5.6 percent after the fourth-largest U.S. wireless service provider was said to be in talks with Charter Communications (CHTR.O) and Comcast (CMCSA.O) about a wireless partnership. Comcast and Charter were down about 0.35 percent.

Advancing issues outnumbered decliners on the NYSE by 1,563 to 1,178. On the Nasdaq, 1,351 issues rose and 1,318 fell.

(Reporting by Tanya Agrawal; Editing by Anil D’Silva and Arun Koyyur)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/-AslOvsmBr0/us-usa-stocks-idUSKBN19I1CT