Stock index futures signal further gains

Tue Mar 27, 2012 5:56am EDT

Stock index futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.25 percent, Dow Jones futures up 0.29 percent and Nasdaq 100 futures up 0.36 percent at 0920 GMT.

European stocks .FTEU3 were up around 0.7 percent, while Japan’s Nikkei average .N225 jumped 2.4 percent to hit its highest closing level since a massive earthquake and tsunami triggered a radiation crisis a year ago, buoyed by indications the U.S. Federal Reserve may keep its supportive monetary policy.

Brent crude held steady above $125 while the dollar stayed near a one-month low against a currency basket on Tuesday after Bernanke kept the door open for more monetary easing, though debt worries left the euro struggling to extend gains versus the U.S. currency.

The European Commission has opened an in-depth investigation into the proposed acquisition of Goodrich Corp (GR.N) by United Technologies Corp (UTX.N), both U.S. aviation equipment makers, the European Union’s executive said on Tuesday.

Apple Inc (AAPL.O) Chief Executive Tim Cook has jetted into China for talks with government officials as he seeks to clear up a pile of problems in the firm’s biggest growth market, from its contested iPad trademark to treatment of local labor.

Orders flowed normally through BATS Global Markets on Monday, bringing a sigh of relief that the core trading business of the nation’s third-largest stock exchange remains on track despite a high-profile trading snarl on Friday.

Discount retailer Dollar General Corp (DG.N) said it will buy back about $300 million in shares from Buck Holdings L.P., the company’s controlling shareholder.

Bausch & Lomb said it agreed to buy Ista Pharmaceuticals Inc (ISTA.O) for about $500 million in cash to broaden its portfolio of eye health products.

On the macro front, investors awaited the S&P/Case-Shiller Home Price Index for January, due at 1300 GMT, while the Conference Board releases March consumer confidence at 1400 GMT.

The S&P 500 rebounded from its worst week so far this year to retake a four-year high on Monday after Federal Reserve Chairman Ben Bernanke signaled supportive monetary policy will remain even though the job picture has begun to improve.

The Dow Jones industrial average .DJI shot up 160.90 points, or 1.23 percent, to 13,241.63 at the close. The Standard & Poor’s 500 Index .SPX gained 19.40 points, or 1.39 percent, to 1,416.51. The Nasdaq Composite Index .IXIC climbed 54.65 points, or 1.78 percent, to 3,122.57.

(Reporting by Blaise Robinson; Editing by Hans-Juergen Peters)

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Enbridge, Enterprise to double Seaway pipeline capacity

Tue Mar 27, 2012 3:52am EDT

(Reuters) — Enbridge Inc (ENB.TO) and Enterprise Products Partners LP (EPD.N) will more than double the capacity of the Seaway Pipeline, easing a major oil glut in the United States that has led to an unprecedented distortion in crude markets.

The expansion would add 450,000 barrels per day (bpd) of capacity to the Seaway system, raising its capacity to 850,000 bpd by mid-2014, Enbridge said in a statement.

The company also plans to increase the size of its Flanagan South Pipeline from Flanagan, Illinois to Cushing, Oklahoma, to a 36-inch diameter line with an initial capacity of 585,000 bpd.

The estimated cost on the Flanagan line would increase to $2.8 billion from $1.9 billion. Enbridge’s share of the cost of the Seaway pipeline twin line and extension is expected to be about $1 billion.

The companies are racing to unlock a glut of crude in the U.S. Midwest, which has built up over the year due to rising supplies from Canada and North Dakota.

The ballooning inventories at Cushing, the storage hub for U.S. crude oil traded on the futures market, has led to a greater price difference between U.S. crude and the European benchmark Brent.

U.S. crude’s discount to Brent hit a record near $28 in October. The spread is now around $18 a barrel.

«Enbridge’s Gulf Coast Access projects give Bakken and western Canadian producers timely, economical and reliable options to deliver a variety of crudes to refinery hubs throughout the heart of North America and now as far as the Gulf Coast,» said Patrick D. Daniel, chief executive officer, Enbridge, said in a statement.

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Map on North America oil pipeline projects:

link.reuters.com/puw94s

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Seaway is the first project on the drawing boards of many companies expected to alleviate the glut in the oil hub of Cushing, Oklahoma.

The reversed Seaway line could be in service at an initial capacity of 150,000 bpd by the second quarter of 2012, Enbridge had said in November after purchasing ConocoPhillips’ (COP.N) stake in the pipeline for $1.5 billion. Station additions and modifications needed to ramp up flow rates to 400,000 bpd will be completed by early 2013.

The southern leg of TransCanada Corp’s (TRP.TO) Keystone XL is also looking to drain the Cushing glut.

President Barack Obama has pledged to accelerate approval of the southern leg of the pipeline, seeking to deflect criticism that his rejection of the full project helped drive up gasoline prices.

Separately, Enbridge said the Flanagan South Pipeline will be constructed along the route of Enbridge’s existing Spearhead Pipeline between the Flanagan Terminal, southeast of Chicago, to Enbridge’s Cushing Terminal in Oklahoma. The pipeline is expected to be in service by mid-2014.

(Reporting by Arpita Mukherjee and NR Sethuraman in Bangalore; Writing by Manash Goswami; Editing by Himani Sarkar)

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EU investigates United Technologies bid for Goodrich

BRUSSELS | Tue Mar 27, 2012 4:00am EDT

BRUSSELS (Reuters) — The European Commission has opened an in-depth investigation into the proposed acquisition of Goodrich Corporation by United Technology Corporation (UTC), both U.S. aviation equipment makers, the European Union’s executive said on Tuesday.

The Commission said preliminary investigations showed potential competition concerns regarding the markets for engine controls and AC power generators.

The parties would have very high combined market shares in these areas, the EU’s competition watchdog said.

The Commission said it also had concerns about the removal of Goodrich as an independent supplier of fuel nozzles and engine controls, as well as in the area of aftermarket services.

The Commission now has 90 working days, until 9 August 2012, to take a final decision on whether the proposed transaction would reduce effective competition in the European Economic Area, it said.

«The aviation equipment industry is already concentrated and is characterized by high barriers to entry,» said JoaquГ­n Almunia, the EU’s competition regulator.

«We need to make sure that competition is preserved and incentives to innovate remain,» he said in a statement. «We must also prevent a rise in input prices for aircraft and engine manufacturers as well as other aviation equipment suppliers.»

UTC intends to acquire the whole of Goodrich for a purchase price of $18.4 billion, in one of the largest transactions in the aerospace industry in recent years, the Commission said.

(Reporting By Sebastian Moffett)

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Yuan Appreciates as China Plans to Allow More Flexibility

TheChinese yuan advanced today asChina’s President Hu Jintao assured US President Barack Obama that thecountry will allow amore flexible exchange rate andafter thenation’s central bank set therecord reference rate.
set thefixing at6.2840 yuans per dollar today. That’s thehighest level since theend ofthedollar-peg in2005. Theyuan is allowed totrade attherange of0.5 percent oneither side ofthefixing.
inameeting inSeoul yesterday that China is going to”let themarket play agreater role” andincrease flexibility ofthecurrency.
USD/CNY dropped from 6.3160 to6.3080 asof10:57 GMT today after it climbed ashigh as6.3331.
Ifyou have any questions, comments oropinions regarding theChinese Yuan,
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BobbY Corner-Open Market.March.26.2012

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
FXDD provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record.
Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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Australian Dollar Gains as Fed Considers Dropping of Monetary Easing

TheAustralian dollar rose, erasing its previous losses, asstocks gained andprices forraw materials increased asmarket sentiment gradually turns torisk appetite andonthespeculation that theFederal Reserve may reduce stimulus fortheUS economy.
, President ofthe
, thought that it may be time todrop themonetary easing:
With numerous monetary policy actions still onthetable, andothers still affecting theeconomy with alag, it may be especially difficult toremove policy accommodation attheappropriate pace andattheappropriate time. One may want toapproach such asituation with caution.
Bullard considered theUS economy is recovering fast enough toexist without excessive stimulus.
Consumer spending is not recovered, it’s still quite weak relative towhere it was before thecrisis. Interms ofdebt andconsumption andso onwe’re still way low relative tothepatterns before.
Crude oil gained onconcerns about disruption ofsupplies from Iran. Metals, including gold, silver, platinum, andcopper also advanced. TheAussie profited from therally ofcommodities andalso from expansion ofcarry trade asspeculators were buying theyen tobuy assets denominated intheAustralian currency.
AUD/USD rose from 1.0395 toclose at1.0465. AUD/JPY went up from 85.85 to86.16, following thedrop to85.17. EUR/AUD closed lower from 1.2689 to1.2673, while earlier it advanced ashigh s 1.2754 — thehighest rate since December 30.
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Forex Techniques with Shawn Powell and Jason Galano March 21 2012

Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
FXDD provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record.
Past performance is no guarantee of futures results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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Japan’s AIJ chief admits loss cover-up, apologizes

By Chikafumi Hodo

TOKYO | Tue Mar 27, 2012 5:09am EDT

TOKYO (Reuters) — The president of Tokyo-based money manager AIJ Investment Advisors admitted to Japanese lawmakers on Tuesday to covering up losses of $1.3 billion in clients’ pension money, but said he had no intention of cheating his clients.

In his first public comment since the scandal broke in February, Kazuhiko Asakawa apologized to clients and the financial industry for the cover-up and said he had been confident that the losses could be recovered.

AIJ lost the funds through bad bets on equity and bond derivatives, wiping out the bulk of the $2.4 billion in client assets it was managing, Japan’s financial regulator, the Financial Services Agency (FSA), said last week.

More than 90 corporate pension funds, mostly smaller ones, were invested with the money manager, which was handling pensions for about 880,000 people.

«I want to use this opportunity to apologize to all beneficiaries who believed in our funds and purchased them,» Asakawa told a financial committee of parliament.

Pensions are a sensitive political issue in Japan, a rapidly ageing society that is grappling with how to pay for a swelling population of retirees.

Asakawa said he personally produced a falsified investment report by inflating the asset size and investment results to cover up the fact that his fund was running at a loss.

«I didn’t want to return the money to clients at a loss,» said Asakawa, dressed in a dark blue suit, in response to a question from the committee. «I’m deeply sorry, but I had absolutely no intention to cheat our clients from the beginning.»

LOSSES FROM 2009

The Securities and Exchange Surveillance Commission (SESC) found AIJ’s investment loss totaled 109.2 billion yen ($1.32 billion) from equity and bond derivatives trading conducted between 2002 and 2011.

During the nine-year period, AIJ collected about 145.8 billion yen, mostly from small companies that entrusted their pension funds to the asset manager.

The FSA stripped AIJ of its registration as a discretionary asset manager last week as it was unable to account for most of its assets under management and had falsified its report to investors.

The FSA also ordered Tokyo-based brokerage firm ITM Securities to suspend operations for six months last week for allegedly selling AIJ’s funds to clients with the knowledge that the report by AIJ was false.

ITM President Hideaki Nishimura said he considered himself a victim as he had limited knowledge of how AIJ was managing its funds.

«If I have to choose (between being a victim or a wrongdoer) then I would say I am a victim. I had no knowledge of the investment, although with regard to marketing we did wrong,» Nishimura said.

AIJ’s funds started losing money in about April 2009 and the losses had grown by March 2010, but the funds recorded positive returns after the Lehman shock in late 2008, Asakawa said.

The SESC said Asakawa traded Nikkei 225 futures and options and Japanese government bond futures and options through brokers in Singapore, adding that Asakawa’s basic investment strategy had been to bet against the market trend by shorting JGBs, betting that yields would go up.

Asakawa said he wanted to equally split the remaining assets to holders of his funds.

According to an investigation by the SESC, AIJ held 8.1 billion yen in deposits.

AIJ’s management fees totaled about 2.6-2.7 billion yen over nine years, Asakawa said, adding that he had received a salary of about 70 million yen each year.

($1 = 82.8300 Japanese yen)

(Reporting by Emi Emoto, Noriyuki Hirata and Chikafumi Hodo; Editing by Chris Lewis)

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Zloty Rises with Poland’s Retail Sales

ThePolish zloty erased its earlier losses today after areport showed that retail sales inPoland increase more than was predicted, reinforcing optimistic outlook forthenation’s economy.
Retail sales advanced 13.7 percent inFebruary from ayear ago, compared tothemedian forecast of9.9 percent. Thegrowth was highest inalmost 10 months. TheEuropean Commission predicted that Poland’s economy will grow 2.5 percent this year, thefastest growth intheEuropean Union. Theeconomy expanded 4.3 percent last year, thequickest pace inthree years.
USD/PLN slid from 3.1234 to3.1202 asof11:07 GMT today, while earlier it climbed to3.1410.
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Canadian Dollar Rises as Core Inflation Quickens

TheCanadian dollar erased its losses against its US counterpart ascore inflation data was better than predicted andafter prices forcrude oil jumped. Thecurrency was flat against theJapanese yen andfell versus theeuro.
, while core inflation was 2.5 percent. Inflation was below forecast, while core inflation was above thepredicted value. Onmonth-over-month basis, theConsumer Price Index rose 0.4 percent last month, exactly asforecasters predicted, andcore CPI also advanced 0.4 percent, slightly above forecasts.
Crude oil prices also provided asupport totheloonie. Futures fordelivery ofcrude oil inMay gained $1.53 to$106.88 per barrel. Crude is themain export ofCanada.
USD/CAD traded at0.9976 asof20:53 GMT today after earlier it advanced from 0.9993 to1.0033 — thehighest level since February 27. CAD/JPY was down from 82.61 to82.49 after sliding to81.83, thelowest since March 8. Meanwhile, EUR/CAD rose from 1.3184 to1.3241 andthedaily maximum of1.3287 was thehighest since February 29.
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