Economic Calendar

Wednesday, May 2, 2012

Facebook Said to Begin IPO Road Show as Soon as Next Week

By Brian Womack - May 2, 2012 4:56 AM GMT+0700

Facebook Inc. (FB), owner of the world’s most popular social-networking service, expects to begin marketing its initial public offering to investors as soon as next week, according to a person with knowledge of the matter.

The person declined to be identified because the plans haven’t been made public. Facebook executives will use the so- called road show to outline their business to prospective investors, a process that typically ends within about two weeks.

A collage of profile pictures in the break room at the new Facebook Data Center on April 19, 2012 in Forest City, North Carolina. Photographer: Rainier Ehrhardt/Getty Images

May 1 (Bloomberg) -- Bloomberg’s Cory Johnson reports that Facebook will begin marketing their share sale as soon as next week. He speaks with Bloomberg’s Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

That timing indicates that Facebook could complete the IPO before the end of the month, after filing an updated S-1 with regulators by the end of this week. Facebook filed in February for an IPO that could give it a value of $75 billion to $100 billion, people with knowledge of the plans have said. The Menlo Park, California-based company, which has more than 900 million users, is seeking $5 billion in what would be the largest Internet IPO on record.

Facebook executives would use the road show to discuss growth prospects that lifted sales 45 percent to $1.06 billion in the first quarter. They’ll also face questions over the rise in costs that trimmed net income 12 percent to $205 million in the March period.

The company plans to list its shares on the Nasdaq Stock Market and plans to trade under the symbol “FB.”

Jonathan Thaw, a spokesman for Facebook, declined to comment. The technology blog AllThingsDigital earlier reported that the road show may start next week.

To contact the reporter on this story: Brian Womack in San Francisco at

To contact the editor responsible for this story: Tom Giles at


Rupert Murdoch Not Fit to Lead News Corp., Lawmakers Say

By Robert Hutton and Amy Thomson - May 2, 2012 1:45 AM GMT+0700

News Corp. (NWSA) Chairman Rupert Murdoch is “not a fit person” to lead a major international company, U.K. lawmakers said, after his British unit misled Parliament about the extent of phone hacking at its News of the World tabloid.

Murdoch “turned a blind eye and exhibited willful blindness to what was going on in his companies,” the House of Commons Culture Committee said in a report today that split lawmakers along party lines on critical findings. “This culture, we consider, permeated from the top throughout the organization and speaks volumes about the lack of effective corporate governance at News Corp.”

News Corp. CEO Rupert Murdoch. Photographer: Justin Sullivan/Getty Images

May 1 (Bloomberg) -- Niri Shan, who leads the media law practice at Taylor Wessing LLP in London, talks about a report from the U.K. House of Commons Culture, Media and Sport Committee that deemed News Corp. Chairman Rupert Murdoch "not a fit person" to lead a major international company. Conservative members of the committee opposed the verdict on Murdoch’s fitness to run a company. Shan speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

News Corp. CEO Rupert Murdoch. Photographer: Justin Sullivan/Getty Images

The report may increase the likelihood that U.K. regulator Ofcom concludes News Corp. is unfit to hold a broadcasting license and asks the company to reduce its 39 percent stake in British Sky Broadcasting Group Plc. (BSY) The phone-hacking scandal prompted News Corp. to abandon a 7.8 billion-pound ($12.7 billion) bid for the rest of BSkyB, the U.K.’s biggest pay- television provider, last year. Tim Bale, a Sussex University politics professor, said he was surprised by the report’s strong language.

“It’s clearly not good news,” he said in a phone interview, adding that the report contained “really serious” accusations. “They clearly must have been hoping that the committee would have been more measured and more cautious.”

‘Hard Truths’

While the report contained “hard truths” for News Corp., it has already confronted the problems documented in it by conducting internal reviews of its newspapers, providing evidence to authorities and setting up internal controls to prevent hacking or bribery from occurring in the future, the New York-based company said in a statement today.

The company’s investigations into its Times, Sunday Times and Sun newspapers uncovered “no evidence of illegal conduct other than a single incident reported months ago,” Murdoch said in a separate statement. About a dozen reporters at the Sun have been arrested, though not charged, in a police investigation into bribery. News Corp.’s internal investigators have been handing over information to the police.

“We certainly should have acted more quickly and aggressively to uncover wrongdoing,” Murdoch said. “We deeply regret what took place and have taken our share of responsibility for not rectifying the situation sooner.”

‘Above the Law’

Three executives at the News International unit -- Les Hinton, Tom Crone and Colin Myler -- gave misleading testimony to the committee in 2009, the panel said in London. The company failed to disclose documents and made statements that “were not fully truthful,” and Murdoch, 81, and his son James must ultimately take responsibility, the lawmakers said.

The 11-member committee has been working on its report since July, when the Murdochs were summoned to testify about their roles in the scandal. Father and son told a media-ethics inquiry last week that underlings, particularly Crone and Myler, were to blame for their failure to detect any wrongdoing at the now defunct newspaper.

“The News of the World and News International misled the committee about the true nature and extent of the internal investigations they professed to have carried out in relation to phone hacking,” the panel said. “Their instinct throughout was to cover up rather than seek out wrongdoing.”

The six Labour and Liberal Democrat lawmakers on the committee voted to conclude that Rupert Murdoch is “not a fit person” to lead a major international company and the four members of Prime Minister David Cameron’s Conservative Party voted against it. One of them, Louise Mensch, said they “felt that was ultimately outside the scope of a select committee.”

Conservative Dissent

“Rupert Murdoch clearly is a fit and proper person to run an international company,” said Philip Davies, another dissenting Conservative. “He’s been running businesses since before I was born. We’ve seen absolutely no evidence to suggest that Rupert Murdoch was aware these things were going on.”

Labour’s Tom Watson argued those in charge needed to take responsibility. “We found News Corp. carried out an extensive cover-up of its rampant law breaking,” he told reporters. “The two men at the top of the company need to answer for that.”

The division along party lines may lead to further suggestions that Cameron and his Conservatives are too close to Murdoch. Culture Secretary Jeremy Hunt is under pressure to resign following the publication of e-mails last week which showed his office had been providing information to News Corp. about the government’s position on the BSkyB bid when Hunt was in charge of deciding on whether it should be allowed.

Skeptical Report

The report was skeptical of Murdoch’s claim the hacking and the cover-up had all been at too low a level for him to know about. “In his testimony to us and also the Leveson Inquiry, Rupert Murdoch has demonstrated excellent powers of recall and grasp of detail, when it has suited him,” the committee said.

Ofcom has said it will draw upon the report for its decision on News Corp.’s fitness to hold a broadcasting license. The regulator asked News Corp. last week to provide documents from civil phone-hacking lawsuits as it decides whether the matter has compromised the company’s ability to run BSkyB, and it said today it will assess the new evidence.

The lawmakers are “not the people ultimately to decide whether someone is a fit and proper person, and it’s not over until the fat lady, in other words a regulator, sings,” Sussex University’s Bale said.

45 Arrests

Police probes into phone and computer hacking and bribery have led to about 45 arrests, including former News of the World editors Rebekah Brooks and Andy Coulson, once Cameron’s communications chief. News Corp. closed the Sunday tabloid in July and later replaced it with a Sunday edition of the Sun.

After the hacking scandal first became public in 2006, with the arrest of a reporter, Clive Goodman, and a private investigator, Glenn Mulcaire, the company’s “containment approach” was to blame the crime on one “rogue reporter,” the panel said. It then shifted blame to “certain individuals,” including Myler and Crone, “whilst striving to protect more senior figures,” notably 39-year-old James Murdoch, News Corp.’s deputy chief operating officer.

Myler and Crone “cannot be allowed to carry the whole of the blame as News Corp. has clearly intended,” the committee said. “The whole affair demonstrated huge failings of corporate governance.”

The two men, summoned before the Culture Committee last September, denied having misled it in 2009.

Hinton’s Role

Hinton didn’t tell the truth about payments to Goodman and the extent of his knowledge of the voice-mail allegations, the lawmakers said today. Crone misled the panel about the significance of the first legal settlement with a victim of hacking, while he and Myler lied about their knowledge of the participation of other News of the World employees in criminal activity, according to today’s report.

“I stand by the evidence that I gave the committee,” Myler said in an e-mailed statement today.

Crone said the same, adding that the committee was misinterpreting his earlier testimony.

“I accept that there are valid criticisms of my conduct in this matter, but for the second time in a week, I seem to be the subject of serious allegations which lack foundation,” he said.

In a separate statement, Hinton said he also denied the accusations. “I have always been truthful in my dealings with the committee and its findings are unfounded,” he said.

Contempt Vote

Parliament as a whole will be asked to vote on whether the men are guilty of contempt. The committee chairman, John Whittingdale, said it wasn’t clear what the punishment could be, because no one has been found guilty of it for decades.

BSkyB gained 1.9 percent to close at 691 pence in London trading. That was below the 700 pence per share News Corp. offered to pay last year for the remaining 61 percent stake.

Analysts including Sanford C. Bernstein’s Claudio Aspesi said today Murdoch could decide to sell the stake in the pay-TV operator. BSkyB had risen as high as 850 pence before newspaper reports in July that News of the World employees intercepted murder victim Milly Dowler’s voice mails in 2002.

News Corp. rose as much as 2 percent in New York. The stock had risen 9.9 percent this year before today.

Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

To contact the reporters on this story: Amy Thomson in London at; Robert Hutton in London at

To contact the editor responsible for this story: Anthony Aarons at


Occupy Protesters Hit U.S. Streets Amid Music, Tear Gas

By Henry Goldman, Pham-Duy Nguyen and Esme E. Deprez - May 2, 2012 9:34 AM GMT+0700

Demonstrators took to the streets in May Day protests across the U.S., sending a singing “Guitarmy” to Manhattan’s Union Square and smashing windows in Seattle.

Organizers said the events marked a springtime resurgence of Occupy Wall Street, and they punctuated their message with trombones, hand-held drums, a San Francisco kayak flotilla and a crowd a half-mile long moving down Manhattan’s Fifth Avenue. Calls for a global general strike with no work, no school, no banking and no shopping were heard in Toronto, Barcelona, London, Kuala Lumpur and Sydney.

A demonstrator affiliated with the Occupy Wall Street movement holds up a sign in front of the Bank of America Corp. tower in New York on May 1, 2012. Photographer: Scott Eells/Bloomberg

May 1 (Bloomberg) -- Jeffrey Brewer, an Occupy Wall Street protester, talks about the movement and its goals as Occupy Wall Street demonstrators took to the streets in May Day protests after a drenching rain in New York, gathering in Bryant Park and outside banks with slogans decrying inequities of wealth. (Source: Bloomberg)

May 1 (Bloomberg) -- Occupy Wall Street protestors march in Oakland, California, and demonstrate in front of banks. Oakland police later used tear gas to end the confrontation. (Source: Bloomberg)

May 1 (Bloomberg) -- Michael Villeggiante, president of Local 10 of the International Longshore & Warehouse Union, talks with Bloomberg's Alison Vekshin about labor demonstrations that canceled ferry service in San Francisco. (Source: Bloomberg)

May 1 (Bloomberg) -- Keith Minnar, a resident of Auburn, Washington, and Mia Harrison, an assistant manager at an American Apparel Inc. store, talk about a protest they witnessed in downtown Seattle today. (Source: Bloomberg)

May 1 (Bloomberg) -- Occupy Wall Street demonstrators began May Day protests amid steady rain in New York, gathering in Bryant Park and outside banks to call attention to the inequities of wealth. Betty Liu reports Bloomberg Television's "In The Loop." (Source: Bloomberg)

May 1 (Bloomberg) -- Thomas Brown, chief executive officer at Second Curve Capital LLC and a Bloomberg contributing editor, talks about the resurgence of the Occupy Wall Street protests. Brown, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses possible job cuts at Bank of America Corp. (Source: Bloomberg)

May 1 (Bloomberg) -- Tom Morello, guitarist for rock band Rage Against the Machine, speaks at New York City's Union Square about his participation in the Occupy Wall Street "May Day" demonstrations. (Source: Bloomberg)

Occupy Wall Street protesters during a May Day rally in front of the Bank of America building on May 1, 2012 in New York City. Photographer: Monika Graff/Getty Images

A wet sign reads "Welcome to May Day" near demonstrators affiliated with the Occupy Wall Street movement in New Yor. Photographer: Scott Eells/Bloomberg

A member of Occupy Wall Street stands in front of Bryant Park in New York on May 1st 2012. Photographer: Peter Foley/Bloomberg

Occupy SF, a splinter group of Occupy Wall Street, paddle kayaks and join members of IBU ILWU local 10 and 75 to protest against the Golden Gate Ferry Service in front of the San Francisco Ferry Building in San Francisco on May 1, 2012. Photographer: David Paul Morris/Bloomberg

In Oakland, California, police used gas to break up confrontations with demonstrators, some bearing shields made out of garbage cans cut in half. In New York, a crowd of thousands gathered at Union Square in anticipation of marches on Wall Street and police said they made about 34 disorderly conduct arrests by 9 p.m.

Occupy Wall Street is alive,” said Cynthia Price, a 48- year-old real-estate investor, as she marched down Broadway past City Hall. “The challenge is now what do we do to really make a difference?”

Her sign read: “Sorry for the inconvenience. We’re trying to change the world.”

Storm’s Center

Occupy groups across the U.S. have protested economic disparity and high foreclosure and unemployment rates that hurt average Americans while bankers and financial executives received bonuses and taxpayer-funded bailouts. In the past six months, similar groups, using social media and other tools, have arisen in Europe, Asia and Latin America.

In New York, the city whose Wall Street is synonymous with a financial system protesters said discredited itself in the 2008 crash, the Occupy movement has relied on demonstrations and marches since Nov. 15. That was the day that police ousted hundreds of protesters from their headquarters in Zuccotti Park near Wall Street, where they had camped for months.

Organizers described the May Day events as a coming together, with activists also calling for more open immigration laws, expanded labor rights and cheaper financing for higher education. Financial institutions remain primary targets.

JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Goldman Sachs Group Inc. (GS) held $8.5 trillion in assets at the end of 2011. That’s equal to 56 percent of the U.S. economy, compared with 43 percent in 2006, according to the Federal Reserve.

Waltzing for Justice

At JPMorgan Chase’s building on Park Avenue in Manhattan, about 40 protesters waltzed to a 12-piece band featuring trumpets, flutes, trombones, drums and an alto saxophone.

Thousands made their way down Fifth Avenue from Bryant Park to Union Square, including the squadron of about 20 guitar- strummers singing Woody Guthrie’s “This Land is Your Land.” At Union Square, they met guitarist Tom Morello of Rage Against the Machine, a rock band with radical politics.

“Some people have the freedom to choose, and they chose to buy a Lamborghini, while others are choosing which Dumpster to pick their dinner from,” Morello said in an interview.

The crowd in the three-block-square park was shoulder to shoulder at 5 p.m. local time. Organizers said as many as 20,000 were present; there was no official count.

Long March

About 6:30 p.m., columns of marchers headed toward Wall Street. Police herded them through closed intersections as onlookers poked their heads from apartment windows. Hundreds of officers walking, on scooters and in vans and unmarked sedans brought up the rear. Plastic handcuffs hung off their pants. Some were in riot gear.

Gustavo Maria Giugale, a banking lawyer visiting New York on business from Buenos Aires, said he sympathized with the protesters as he watched them assemble in midtown Manhattan.

“The interests of capital and employees must merge,” Giugale said as he sipped espresso at a cafe, dressed in pinstriped suit, Hermes tie and Burberry coat. “It’s a matter of striking the right balance.”

Occupy-related events were planned in 115 cities throughout the U.S., from college towns such as Amherst, Massachusetts, and Ann Arbor, Michigan, to Los Angeles, Houston, and Philadelphia. In Chicago, about 1,000 protesters escorted by police cruisers and helicopters and a dozen mounted officers marched two miles into downtown.

Broken Glass

In Seattle, a group of about five people in black broke ranks with an Occupy march and broke windows in three storefronts and half a dozen cars as they threw flares.

“These protesters are under the umbrella of anarchists, but what do they really stand for?” said Michael Aycock, 43, who watched from across the street as protesters spray-painted and broke glass. “There are plenty of jobs out there, but these people are not interested. It’s the age of entitlement.”

Mayor Mike McGinn signed an emergency order allowing police to seize any item that might be used as a weapon, such as flag poles, said his spokesman, Aaron Pickus.

In downtown Los Angeles, demonstrators rode a bus labeled “Queers Against Foreclosure,” while hundreds of others advocated the legalization of illegal immigrants.

Ten protesters were arrested at Los Angeles International Airport about 1 p.m. for blocking Century Boulevard, a major access road, said Rosario Herrera, a police spokeswoman.

In Oakland, police used tear gas against a crowd that had surrounded and thrown objects at officers as they attempted to make arrests, Karen Boyd, a spokeswoman for the city, said in a statement.

As many as 5,000 protesters marched downtown at about 6 p.m., she said. At least nine people were taken into custody during the day, Boyd said. Vandalism was reported at Bank of America and Bank of the West offices, and protesters broke windows of a police van and punctured tires of a news vehicle.

Takes All Kinds

Karen Hancock, a 63-year-old Oakland resident, said she had grown frustrated with a stalled economy that kept her from finding a job and by U.S. wars. She was arrested in a January demonstration. Today, as protesters taunted police, she said she was untroubled by potential mayhem.

“I don’t like violence, but if you just stand on the sidelines with a poster, it never gets us anywhere,” Hancock said. “It takes all these kinds of people and these kinds of actions.”

Across the bay in San Francisco, morning ferry service was canceled due to demonstrations. As 65 workers picketed the waterside Ferry Building, accompanied by a seven-piece band and a juggler, Occupy protesters in eight kayaks approached, chanting “We are the 99 percent!” and displaying flags reading “99%,” “Health Care!” and “Dignity.”

To contact the reporters on this story: Henry Goldman in New York at; Pham-Duy Nguyen in Seattle at; Esme E. Deprez in New York at

To contact the editor responsible for this story: Stephen Merelman at


RIM Releases BlackBerry Prototypes to Kick Off New Smartphone

By Hugo Miller - May 1, 2012 8:30 PM GMT+0700

Research In Motion Ltd. (RIM), trying to pull out of a sales slump, moved a step closer to the debut of a new BlackBerry smartphone by releasing as many as 2,000 prototypes to developers.

The touch-screen devices, which have a 4.2-inch display and resemble a scaled-down version of the PlayBook tablet, are being distributed today to developers at RIM’s BlackBerry Jam event in Orlando, Florida. The prototypes lack the physical keyboard that has been a hallmark of most BlackBerrys.

A prototype of Research in Motion Ltd.'s new BlackBerry 10 device. Source: Research in Motion Ltd. via Bloomberg

“What we’re doing is giving them hardware they can build on, so they can feel confident that the work that they do, the behavior they see on their applications, will carry forward onto the launch hardware,” said Christopher Smith, a vice president in charge of handheld application platform and tools at Waterloo, Ontario-based RIM. (RIMM)

The new BlackBerry 10 lineup, due to hit stores this year, is the linchpin of RIM’s strategy to revive growth. Sales at the company tumbled 25 percent last quarter, with U.S. revenue plummeting more than 50 percent. The old BlackBerry, best-suited for checking e-mail and other business functions, had struggled to keep up with the Web capabilities and apps of Apple Inc. (AAPL)’s iPhone and Google Inc.’s Android devices.

The prototypes will come loaded with an early version of the BlackBerry 10 operating system. That will help developers start building apps before the official release, Smith said. Even so, the test systems won’t look exactly like the finished product, he said.

No Release Date

“It’s not going to be the same hardware platform, but it’s certainly going to be representative,” Smith said. RIM hasn’t said when the first BB10 phone will be released beyond indicating it will be in the latter part of 2012.

RIM is releasing a developer tool kit that includes software called Cascades, which will help build graphic-rich applications. It also offers support for HTML5, the broadly popular programming language.

The app developers that have already pledged to create apps for BlackBerry 10 include mobile search-engine maker Poynt Corp. (PYN) and video-game company Gameloft SA. (GFT)

“We’re seeing a lot of excitement and I expect it to continue,” Smith said.

To contact the reporter on this story: Hugo Miller in Toronto at

To contact the editor responsible for this story: Nick Turner at


Lacker Says Fed May Have to Tighten With Unemployment at 7%

By Joshua Zumbrun and Matthew Winkler - May 2, 2012 12:29 AM GMT+0700

Federal Reserve Bank of Richmond President Jeffrey Lacker said the central bank needs to be ready to raise interest rates even if joblessness exceeds 7 percent.

Speaking in an interview today at the Bloomberg Washington Summit hosted by Bloomberg Link, he said the Fed will probably have to raise rates in mid-2013. Adding more monetary stimulus now would raise inflation risks without doing much to boost growth, he said.

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, speaks at the Bloomberg Washington Summit in Washington, D.C. on May 1, 2012. Photographer: Joshua Roberts/Bloomberg

May 1 (Bloomberg) -- Federal Reserve Bank of Richmond President Jeffrey Lacker talks about the outlook for the U.S. economy, monetary policy and the banking industry. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

Unemployment “could well be above 7 percent, and I think we have to prepare for that,” Lacker said. “I think it’s a misconception to think we have to get unemployment all the way down to five or some number like that before we raise rates.”

Lacker has cast the only dissenting vote at each of the Federal Open Market Committee’s policy meetings this year. He has opposed the Fed’s statement that economic conditions will probably warrant “exceptionally low” levels of the federal funds rate at least through late-2014.

It is “really tricky” for the Fed to find “that time when interest rates need to rise to prevent inflation pressures from emerging, before you see them emerge, before you see inflation move up steadily,” he said.

Lacker said he expects economic growth to accelerate, although “it’s not a gangbusters recovery by historical standards.”

Labor Markets Healing

“Labor markets are likely to continue to heal, the unemployment rate is likely to continue to fall,” he said. “That’s going to lead to consumers, households having greater confidence over time.”

Stocks have rallied on better-than-forecast corporate profits and signs of economic strength. The Standard & Poor’s (SPX) 500 Index has risen more than 12 percent this year, the best start to a year since 1998.

The index rose 1.1 percent to 1,413.82 at 12:56 p.m. in New York after a report showed that U.S. manufacturing unexpectedly expanded in April at the fastest pace in 10 months.

Yields on 10-year Treasury notes rose from almost the lowest level in three months after the figures, climbing 4 basis points, or 0.04 percentage point, to 1.95 percent.

Employers increased payrolls by 635,000 from January through March, the biggest quarterly gain since the first three months of 2006.

Jobs Report

The Labor Department will release its April jobs report on May 4. The economy added about 160,000 jobs and the unemployment rate held at 8.2 percent, according to the median forecasts in a Bloomberg survey of economists. In March, employers added 120,000 jobs, the fewest since October.

Economic growth in the U.S. slowed to a 2.2 percent annual pace in the first quarter from 3 percent in the final three months of 2011, according to a Commerce Department report last week. While the biggest gain in consumer spending in more than a year helped bolster growth, it was restrained by a diminished contribution from business inventories and a drop in government spending.

Fed Chairman Ben S. Bernanke last week said the central bank is “prepared to do more” if needed to boost the economy, after leaving its policy unchanged. Lacker said more Fed stimulus would be unwise.

“For us to provide more monetary stimulus at this point would likely raise inflation risks and not likely do much for growth,” Lacker said.

Second-Longest Serving

Lacker, 56, has been president of the Richmond Fed since 2004 and is the second-longest serving among all 12 regional bank presidents after Cleveland’s Sandra Pianalto. He was an assistant professor of economics at Purdue University in West Lafayette, Indiana, before joining the Richmond Fed in 1989 as an economist in the research department.

Central bankers last week upgraded their forecasts for economic growth and unemployment.

Officials forecast the jobless rate would average 7.8 percent to 8 percent in the final three months of this year versus a forecast of 8.2 percent to 8.5 percent in January, according to central tendency estimates. The new forecasts are still far above policy makers’ estimates for full employment, which range from 4.9 percent to 6 percent.

Fed officials estimated the economy will expand 2.4 percent to 2.9 percent this year, compared with a January forecast of 2.2 percent to 2.7 percent.

To contact the reporters on this story: Joshua Zumbrun in Washington at; Matthew Winkler in New York at

To contact the editor responsible for this story: Chris Wellisz at


U.S. Stocks Gain on Manufacturing as Treasuries Retreat

By Stephen Kirkland and Michael P. Regan - May 2, 2012 3:10 AM GMT+0700

Stocks advanced, sending the Dow Jones Industrial Average to the highest level since 2007, and Treasuries fell as faster growth in U.S. manufacturing fueled optimism in the world’s biggest economy. Oil surged above $106.

The Dow rallied 65.69 points, or 0.5 percent, to close at 13,279.32. The Standard & Poor’s 500 Index rose 0.6 percent to 1,405.82, erasing most of its April loss, as benchmark indexes in the U.K. and Ireland gained more than 1 percent and Denmark’s rose 0.2 percent. Other European markets were closed for a holiday. Ten-year Treasury yields rose three basis points to 1.95 percent. The Australian dollar slid 1 percent to $1.0330 and 10-year note yields slipped as low as 3.53 percent after the nation’s central bank cut interest rates.

A pump housing waits to be shipped from Diversified Tooling Group's American Tooling Center Inc. facility in Grass Lake, Michigan, on April 17, 2012. Photographer: Jeff Kowalsky/Bloomberg

May 1 (Bloomberg) -- Christopher Low, chief economist at FTN Financial, talks about the Institute for Supply Management’s factory index for April, which climbed to 54.8 from 53.4 in March. Low speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)

May 1 (Bloomberg) -- Tony Morriss, head of interest-rate research at Australia & New Zealand Banking Group Ltd. in Sydney, talks about Australia's economy, central bank monetary policy, and the local currency. The Reserve Bank of Australia cut its benchmark interest rate by half a percentage point as inflation pressures abate, delivering a bigger-than-forecast reduction that sent the local dollar and bond yields tumbling. Morriss speaks with Mark Barton on Bloomberg Television's "First Look." (Source: Bloomberg)

May 1 (Bloomberg) -- Jerry del Missier, co-chief executive officer of corporate and investment banking at Barclays, talks about Europe's debt crisis and the region's bond markets. Del Missier, speaking with Erik Schatzker, on Bloomberg Television's "InsideTrack," also discusses the outlook for the French elections. (Source: Bloomberg)

May 1 (Bloomberg) -- Christopher Sheldon, chief investment officer at the Dreyfus Corp., talks about the outlook for the stock market and investment strategy. Sheldon, speaking with Betty Liu, Dominic Chu and Josh Lipton on Bloomberg Television's "In the Loop," also discusses U.S. Treasuries and corporate bonds. (Source: Bloomberg)

May 1 (Bloomberg) -- Shane Oliver, chief economist and head of investment strategy at AMP Capital Investors Ltd., talks about Australia's economy and central bank monetary policy. He speaks from Sydney with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

May 1 (Bloomberg) -- Bloomberg’s Trish Regan, Adam Johnson and Matt Miller report on today’s ten most important stocks including Delta Airlines, Pep Boys and Chesapeake Energy. (Source: Bloomberg)

A trader works on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg

All 10 of the main industry groups in the S&P 500 advanced after growth in American factory output unexpectedly accelerated in April to the fastest pace in almost a year, with the Institute for Supply Management’s index increasing to 54.8 from 53.4 and topping the median economist projection for a drop to 53. The report eased concern that manufacturing is slowing after data from the Federal Reserve Bank of Dallas and the ISM-Chicago trailed estimates yesterday.

“The spike in equity markets and reversal in bond markets following the report’s release underscores the nervousness” that had seeped into investors’ minds, Dan Greenhaus, chief global strategist at broker-dealer BTIG LLC in New York, wrote in a note to clients. “If manufacturing is not weakening as the regional surveys somewhat indicated, that would of course be supportive, in the immediate, of high risk asset prices.”

Greenspan’s Call

Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as corporate earnings increase over time.

“Stocks are very cheap,” Greenspan said today at the Bloomberg Washington Summit, citing very low price-earnings ratios. “There is no place for earnings to grow except into stock prices,” said Greenspan, who served as Fed chairman from August 1987 to January 2006.

Even after rallying 108 percent from its bear-market low in March 2009, the S&P 500 trades for 14.3 times its companies’ reported profits, data compiled by Bloomberg show. The valuation has been below the five-decade average multiple of 16.4 for two years.

Market Leaders

Gauges of energy, financial and commodity companies gained more than 0.5 percent to lead the 10 main S&P 500 industries today. Alcoa Inc., Bank of America Corp. and Intel Corp. rose at least 1.9 percent for the top advances in the Dow. Canada’s S&P/TSX index increased 0.3 percent.

Sears Holdings Corp. surged 15 percent after saying profit excluding some items was as much as $195 million in the first quarter and announcing plans to spin off its Hometown and Outlet stores into a new public company. P.F. Chang’s China Bistro Inc., an Asian-themed restaurant chain, rallied 30 percent after agreeing to be bought by Centerbridge Partners LP for $1.1 billion.

About three quarters of the S&P 500 companies that released results since April 10 have beaten profit projections, according to data compiled by Bloomberg. The Dow managed to post a 0.01 percent gain in April, marking a seventh straight monthly advance to match its longest streak since an eight-month rally in 1994-1995.

The S&P 500 fell 0.4 percent yesterday, snapping a four-day rally and extending the index’s first monthly loss of the year to 0.7 percent, after the ISM-Chicago’s business barometer fell to 56.2, lower than the most pessimistic forecast in a Bloomberg survey, and Spain’s economy entered a recession.

‘Luke Warm’ Recovery

“This is a luke-warm, milquetoast type of recovery,” Carl Riccadonna, a Deutsche Bank AG senior U.S. economist, told Bloomberg Television. “So there are going to be fits and starts along the way. But we’re expanding and we’re at trend growth as of last quarter.”

Thirty-year Treasury bonds also retreated today, sending their yield up three basis points to 3.15 percent. Rates on two- year notes were little changed at 0.27 percent.

For the first time since 2008, bonds were the only major investment class to provide positive returns in April amid renewed concern the global economy is slowing and as widening deficits in Europe threaten contagion.

Fixed-income assets -- from global government debt to junk bonds -- gained 0.7 percent last month including reinvested interest, according to Bank of America Merrill Lynch index data. The MSCI All-Country World Index of stocks lost 1.1 percent including dividends while the S&P GSCI Total Return Index of metals, fuels and agricultural products fell 0.5 percent. The U.S. Dollar Index dropped 0.3 percent.

Australia Rate Cut

The Australian dollar weakened against all 16 of its most- traded peers today, falling 0.6 percent versus the yen.

The Reserve Bank of Australia lowered its key rate to 3.75 percent from 4.25 percent, the biggest reduction in three years. RBA Governor Glenn Stevens and his board cut the overnight cash rate target to a two-year low of 3.75 percent from 4.25 percent, the deepest reduction in three years.

The half-point cut was “judged to be necessary in order to deliver the appropriate level of borrowing rates,” Stevens said in a statement today. In the next year or two, “inflation will probably be lower than earlier expected” and within the RBA’s target range of 2 percent to 3 percent, he said. The cut came after manufacturing data in Australia and the U.K. weakened and rose less than estimated in China.

‘Nice Surprise’

“It’s a nice surprise and it was the right move,” Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages almost $100 billion, said about the RBA decision. “Given the weakness that we’ve seen across the board in manufacturing and retail, a quarter point cut wasn’t going to be enough. They have done the right thing.”

The FTSE 100 advanced for the fifth time in six days as two shares gained for every one that dropped. Lloyds Banking Group Plc (LLOY) rose 8.3 percent as Britain’s biggest mortgage lender said first-quarter profit more than doubled, beating analyst estimates. BP Plc, Europe’s second-biggest oil company, dropped 0.8 percent after profit declined. Man Group Plc slid 5.5 percent as the hedge-fund manager reported $1 billion in client outflows in the first quarter.

Missing Estimates

Japan’s Nikkei 225 dropped 1.8 percent to a 10-week low as Sharp Corp., the nation’s largest producer of liquid-crystal displays, plunged 9.3 percent after forecasting a wider-than- estimated loss. Tokyo Electron Ltd. tumbled 8.3 percent after the chip-equipment maker said profit fell more than expected.

Natural gas rallied more than 3 percent, extending gains after rising 4.5 percent yesterday, as cooler weather forecast for next week may ease a glut and the Energy Department said production in the lower 48 states fell 0.6 percent in February. Copper added 0.4 percent to settle at $3.8435 a pound and oil climbed 1.2 percent to a one-month high of $106.16 a barrel.

Most Asian and European markets were closed for public holidays. China’s Purchasing Managers’Index rose to 53.3 from 53.1 in March, the statistics bureau and logistics federation said today. That’s the highest reading in a year and compares with the 53.6 median forecast in a Bloomberg News survey of 27 economists.

To contact the reporters on this story: Stephen Kirkland in London at; Michael P. Regan in New York at

To contact the editor responsible for this story: Nick Baker at


Greenspan Says U.S. Stocks ‘Very Cheap,’ Likely to Rise

By Steve Matthews and Tom Keene - May 2, 2012 12:18 AM GMT+0700

Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as corporate earnings increase over time.

“Stocks are very cheap,” Greenspan said today at the Bloomberg Washington Summit hosted by Bloomberg Link, citing “a very low price-earnings ratio.”

Alan Greenspan, former chairman of the U.S. Federal Reserve, speaks at the Bloomberg Washington Summit in Washington, D.C. on May 1, 2012. . Photographer: Joshua Roberts/Bloomberg

May 1 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan talks about the outlook for U.S. stocks, bonds and Federal Reserve Monetary Policy. Greenspan, speaking with Tom Keene at the Bloomberg Link Washington Summit, also talks about the U.S. housing market and federal budget reduction. (Source: Bloomberg)

“There is no place for earnings to grow except into stock prices,” said Greenspan, who served as Fed chairman from August 1987 to January 2006.

Stocks have rallied on better-than-forecast corporate profits and signs of economic strength. The Standard & Poor’s (SPX) 500 Index has risen more than 12 percent this year, the best start to a year since 1998.

The index rose 1.1 percent to 1,413.83 at 12:57 p.m. in New York after a report showed that U.S. manufacturing unexpectedly expanded in April at the fastest pace in 10 months.

The S&P 500 trades for 14.3 times reported income from its companies, or 13 percent below the average since 1954, according to data compiled by Bloomberg News.

Another valuation metric, known as the Fed model because it was derived from a July 1997 report from the central bank, shows U.S. equities are close to the cheapest level ever relative to debt. The technique compares the earnings yield for stocks with Treasury rates.

Bull Market

Profit for S&P 500 companies has represented 7.2 percent of the index’s price on average in 2012, or 5.91 percentage points more than yields on 10-year Treasuries, according to Fed model data compiled by Bloomberg. That compares with the average difference of 0.03 percentage point and the record high of 6.99 points when the bull market started in March 2009, according to data compiled by Bloomberg going back to 1962.

Greenspan said the rising stock prices create a “wealth effect” that boosts consumer spending and the overall economy. “So equities play a hugely important role, which I think is grossly underestimated,” he said.

In a separate interview on Bloomberg Television’s “Surveillance Midday” with Tom Keene, Greenspan said a lack of long-term investment in housing and nonresidential construction was hurting employment.

“Housing at this stage as you know is moving nowhere,” he said.

Market Balance

The former Fed leader, who opposed excessive financial regulation as a central banker, said the best thing U.S. policy makers can do is refrain from interventions that prevent markets from settling to a proper balance.

“Allow markets to heal,” he said. “Markets have been consistently bombarded with all sorts of policy decisions,” which “has clearly prevented markets from adjusting.”

Treasury 10-year yields rose from almost the lowest level in three months after the Institute for Supply Management said its factory index climbed to 54.8 last month, exceeding the most optimistic forecast in a Bloomberg survey, from 53.4 in March. Readings greater than 50 signal growth.

The 10-year yield rose three basis points, or 0.03 percentage point, to 1.95 percent, according to Bloomberg Bond Trader pricing. It touched 1.90 percent before the manufacturing report.

The former central banker’s comments on equities haven’t always been timely. In 1996, Greenspan said the stock market may reflect “irrational exuberance” when the Dow Jones Industrial Average was above 6400. The index peaked at over 11,700 in January 2000, before technology stocks slumped.

To contact the reporters on this story: Steve Matthews in Atlanta at

To contact the editor responsible for this story: Christopher Wellisz in Washington at


U.S. Manufacturing Grows at Fastest Pace in a Year

By Alex Kowalski - May 2, 2012 3:28 AM GMT+0700

Manufacturing grew in April at the fastest pace in almost a year, propelled by a pickup in orders that signaled factories will remain a source of strength for the U.S. expansion.

The Institute for Supply Management’s factory index climbed to 54.8 last month, exceeding the most optimistic forecast in a Bloomberg News survey and the best reading since June, the Tempe, Arizona-based group’s report showed today. Readings greater than 50 signal growth.

Workers at the Columbus Castings facility in Ohio on April 25, 2012. Photographer: Ty Wright/Bloomberg

May 1 (Bloomberg) -- Christopher Low, chief economist at FTN Financial, talks about the Institute for Supply Management’s factory index for April, which climbed to 54.8 from 53.4 in March. Low speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)

May 1 (Bloomberg) -- Bloomberg’s Trish Regan, Adam Johnson and Matt Miller report on today’s ten most important stocks including Delta Airlines, Pep Boys and Chesapeake Energy. (Source: Bloomberg)

The world’s largest economy may pick up after slowing in the first three months of the year as the increase in bookings indicates American assembly lines will keep churning out more goods. Combined with a report showing manufacturing in China also accelerated, the figures sent the Dow Jones Industrial Average to the highest level since 2007 as the data eased concern global growth was slackening.

Manufacturing “continues to be a bright spot in the recovery,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York. “We have yet to see a drop-off in foreign demand for U.S.-manufactured goods, and that comes despite all the concerns of a slowdown in the global economy.”

The Dow gained 0.5 percent to close at 13,279.32 at the close in New York. The yield on the benchmark 10-year Treasury note rose to 1.95 percent from 1.91 percent late yesterday.

Elsewhere, China’s manufacturing expanded for a fifth month in April to reach the highest level in a year. The news wasn’t universally good as a U.K. manufacturing index fell more than forecast in April as export orders fell the most since May 2009.

Survey Results

The median forecast in a Bloomberg News survey of 79 economists projected the ISM index would drop to 53 from a reading of 53.4 in March. Estimates ranged from 52 to 54. The gauge averaged 55.2 in 2011 and 57.3 a year earlier.

The group’s orders gauge climbed to the highest level in a year, while its production measure put it its best performance since March 2011 and employment advanced to a 10-month high, today’s report showed. The group’s export index also improved.

“We seem to have good, strong order books filling up for the next few months, and that bodes well,” Bradley Holcomb, chairman of the ISM’s factory survey said in a telephone interview. “Things are moving forward and moving forward at a good sustainable level, not indicating at this point any slowdowns.”

Auto Sales

Stronger auto production bolstered the U.S. economy from January through March, which may keep supporting manufacturing. Motor vehicle output added 1.12 percentage points to growth, the most since the third quarter of 2009 and accounting for half of the 2.2 percent increase in gross domestic product. Cars last quarter sold at the fastest pace in four years, according to industry data.

The pickup in demand is holding up so far in the second quarter. Chrysler Group LLC led the five largest automakers by U.S. sales in exceeding analysts’ estimates for April. Chrysler’s sales climbed 20 percent and Toyota Motor Corp.’s deliveries rose 12 percent. Purchases were little changed at a 14.38 million annual rate last month after 14.32 million in March, according to data from Ward’s Automotive Group.

Manufacturers mentioned gains in automotive and high- technology industries, the Fed said in its Beige Book business survey, published April 11. The firms “expressed optimism about near-term growth prospects, but they are somewhat concerned about rising petroleum prices,” the Fed said in the report.

Industrial Demand

3M Co. (MMM), the maker of fuel system tune-up kits and Post-it Notes, posted first-quarter profit that beat analysts’ estimates because of rising U.S. auto and industrial demand. The St. Paul, Minnesota-based company’s industrial and transportation unit posted sales of $2.66 billion, an 8.6 percent increase.

At the same time, other areas may not be helping to support manufacturing in coming months. Business spending on equipment and software in the first quarter rose at the weakest in almost three years, a Commerce Department report showed last week.

Overseas demand for U.S. made-goods also risks fading as global growth slows. Spain’s economy contracted in the first quarter, putting the euro region’s fourth-largest economy into its second recession since 2009. The U.K. economy shrank 0.2 percent in the first quarter after contracting 0.3 percent in the prior three months as Britain slid into its first double dip recession since the 1970s.

‘Uneven’ Economy

“The global economy is uneven,” John Faraci, chairman and chief executive officer of International Paper Co. (IP), said during an April 27 earnings call. “We got a recession going on in Western Europe. The growth has slowed in China and India. And North Americas is a recovering but far from fully recovered economic environment.”

Another report today showed construction spending in the U.S. grew less than forecast in March as state and local government agencies continued to pull back. The 0.1 percent increase followed a 1.4 percent decline in February that was larger than previously estimated, the Commerce Department reported. The median estimate of economists surveyed by Bloomberg called for a 0.5 percent increase.

To contact the reporter on this story: Alex Kowalski in Washington at

To contact the editor responsible for this story: Christopher Wellisz in Washington at


Dow Rallies to Highest Level Since 2007 on Manufacturing

By Rita Nazareth - May 2, 2012 3:45 AM GMT+0700

U.S. stocks advanced, sending the Dow Jones Industrial Average to the highest level since December 2007, after a better-than-estimated manufacturing report bolstered investors’ optimism in the world’s largest economy.

JPMorgan Chase & Co. (JPM), Intel Corp. (INTC) and Alcoa Inc. climbed at least 1.8 percent to pace rallies among the biggest companies. The Dow Jones Transportation Average, a proxy for economic growth, increased 1.1 percent. Sears Holdings Corp. (SHLD) soared 15 percent as it forecast a profit after selling some stores in the U.S. and Canada. Stocks pared gains after Apple Inc., the world’s most valuable company, reversed an earlier advance.

Traders work on the floor of the New York Stock Exchange on April 30, 2012. Photographer: Michael Nagle/Bloomberg

May 1 (Bloomberg) -- Christopher Low, chief economist at FTN Financial, talks about the Institute for Supply Management’s factory index for April, which climbed to 54.8 from 53.4 in March. Low speaks with Scarlet Fu on Bloomberg Television's "InBusiness." (Source: Bloomberg)

May 1 (Bloomberg) -- Ronald Sloan, senior portfolio manager at Invesco Ltd., talks about investment strategy and the outlook for the M&A market. Sloan speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." Yra Harris, chief trader and analyst for Praxis Trading, also speaks. (Source: Bloomberg)

The Standard & Poor’s 500 Index advanced 0.6 percent to 1,405.82 at 4 p.m. New York time, the highest level since April 3. The Dow increased 65.69 points, or 0.5 percent, to 13,279.32. The Russell 2000 Index of small companies retreated 0.1 percent to 815.89. About 6.7 billion shares changed hands on U.S. exchanges today, or almost in line with the three-month average.

“The economy is starting to get on its own two feet,” said Wayne Lin, a money manager at Baltimore-based Legg Mason Inc. His firm oversees $643.3 billion. “Manufacturing is forward-looking. It leads what the actual economic activity tends to end up being. It tells us that firms are being a bit less conservative. Confidence is starting to reemerge.”

Stocks rose as manufacturing unexpectedly expanded in April at the fastest pace in 10 months. The report added to optimism after data showed growth in Chinese manufacturing. Investors also watched corporate earnings as 74 percent of S&P 500 companies that reported results since April 10 have beaten projections, according to data compiled by Bloomberg.

Good Value

Today’s gain extended this year’s advance in the S&P 500 to 12 percent. The index still trades at 14.3 times reported earnings, below the average since 1954 of 16.4. Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as earnings increase over time.

“Stocks are very cheap,” Greenspan, who served as Fed chairman from August 1987 to January 2006, said today at the Bloomberg Washington Summit hosted by Bloomberg Link. “There is no place for earnings to grow except into stock prices.”

Better-than-estimated earnings and economic data show the Fed doesn’t need to add monetary stimulus at this time, according to Kevin Rendino, a money manager at New York-based BlackRock Inc. (BLK) The benchmark gauge has more than doubled since reaching a 12-year low on March 2009 (SPX) amid government stimulus.

“We don’t need QE3 right now,” said Rendino, referring to a so-called third round of quantitative easing, or asset purchases to stimulate the economy. His firm oversees $3.68 trillion as the world’s largest asset manager. “We need to have an economy that can stand on its own.”

Harbinger of Gains

Equities rebounded after the S&P 500 halted a four-month gain in April. Yet a rally of more than 10 percent in the first four months of the year has been a harbinger of gains in May, said Bespoke Investment Group. In the 19 times since 1927 that the S&P 500 has had such a start to the year, it has followed with an average gain of 2.2 percent in May, Bespoke data show.

The Morgan Stanley Cyclical Index of companies most tied to the economy rose 1.6 percent. JPMorgan jumped 1.9 percent to $43.79. Intel, the largest chipmaker, climbed 2 percent to $28.95. Alcoa (AA), the biggest U.S. aluminum producer, increased 2.5 percent to $9.97.

Sears Holdings soared 15 percent, the most in the S&P 500, to $62.05. The retailer said first-quarter profit excluding some items was as much as $195 million after selling stores in the U.S. and Canada, compared with a loss a year earlier. It plans to spin off its Hometown and Outlet stores in the third quarter, possibly giving Chairman Edward Lampert an opportunity to hold a larger stake in the new publicly traded company.

Beating Estimates

Archer Daniels Midland Co. rallied 7.1 percent to $33.02. The largest grain processor topped analysts’ profit estimates for the first time in four quarters after international grain sales and oilseed processing in North America improved.

A measure of energy shares had the biggest advance among 10 industries in the S&P 500 today, rising 1.4 percent, as 39 of its 44 stocks gained.

Chesapeake Energy Corp. (CHK) jumped 6.3 percent to $19.60. The company will name an independent chairman to replace Aubrey McClendon and halt an incentive program that allowed the chief executive officer to amass personal stakes in thousands of company-operated wells.

Anadarko Petroleum Corp. (APC) added 2.5 percent to $75.06. The second-largest U.S. independent oil and natural-gas producer by market value said first-quarter profit rose on higher crude prices and a $1.8 billion gain from an Algerian tax settlement.

Bottom Signs

Solar stocks rallied after Citigroup Inc. raised its recommendation on the industry, citing “signs of a near-term bottom.” SunPower Corp. (SPWR) surged 7.8 percent to $6.05. Trina Solar Ltd. (TSL) increased 3 percent to $7.48.

The S&P 500 pared an advance of more than 1.2 percent after Apple (AAPL) fell 0.3 percent to $582.13, capping its fourth straight loss. The shares jumped 2.2 percent earlier today.

Avon Products Inc. (AVP) slumped 8 percent, the biggest loss in the S&P 500, to $19.87. The door-to-door cosmetics seller that’s the target of a $10 billion takeover bid from Coty Inc. reported first-quarter profit that trailed estimates, hurt by higher labor and materials costs.

Emerson Electric Co. (EMR) dropped 6.4 percent to $49.18. The maker of industrial equipment reported second-quarter revenue and profit that missed estimates.

Herbalife Ltd. (HLF) tumbled 20 percent, the most since 2009, to $56.30. The maker of nutritional supplements and weight- management products slumped as hedge-fund manager David Einhorn asked executives why it has stopped providing information tracking certain groups of its distributors in its filings.

Trend Charts

Stock market trend charts and investor sentiment are signaling the S&P 500 may surpass its 2012 high before the rally gives way to a 10 percent decline, according to UBS AG.

The benchmark gauge for U.S. equities is likely to exceed this year’s peak of 1,419.04 and climb to 1,460, after it held last month above its March 6 low, said Michael Riesner and Marc Mueller, Zurich-based analysts with UBS. The S&P 500 halted a five-day slump on April 10 at 1,358.59. Two weeks later, it rebounded from another drop at 1,358.79.

The level of 1,358 “represents a new pivotal support for the SPX,” the analysts wrote in a note yesterday, referring to the S&P 500’s ticker. “As long as the market trades above this level, the U.S. market remains bullish biased,” they said.

To contact the reporter on this story: Rita Nazareth in New York at

To contact the editor responsible for this story: Nick Baker at