>>> Sotheby's Holdings Inc Responds to Third Point (Dan Loeb)

Sotheby's Holdings Inc Responds to Third Point (Dan Loeb)
- Board believes this plan (1 year shareholder rights plan) is an important tool to ensure that all Sotheby's shareholders are treated fairly, including in the context of rapid accumulations by 13D filers. The plan is designed to limit the ability of any person or group to seize control of the Company without appropriately compensating all Sotheby's shareholders. It provides the Board and shareholders with time to make informed judgments. It does not affect trading by passive investors inasmuch as it allows such investors to accumulate as much as 20% of Sotheby's common stock and has no impact on a takeover proposal for the entire company acceptable by the holders of a majority of Sotheby's shares. 
- Company intends to review Third Point's complaint regarding the rights plan once it has been served with it, and continues to believe that the Board's decisions to adopt and maintain the 12-month rights plan are both valid and legal.

>>> US Close Dow+0,56% S&P+0,44% Nasdaq+0,19%

Closing Summary: Stock Market Benefits from Blue Chip Boost

The major indices strung together some modest gains on Tuesday on the back of some strong showings from blue-chip issues and a volatile rebound effort by the beaten-down biotechnology stocks.

The move followed on the heels of a strong outing by major European bourses, which shot up largely in response to some remarks from Bundesbank head, Jens Weidmann, who suggested it was not out of the realm of possibility for the ECB to implement a QE-type program to fight deflation. It would be remiss not to add that ECB President Draghi spoke later in the day and said the ECB is not currently seeing any evidence of deflation.

Mr. Draghi's viewpoint helped the euro recover a good portion of overnight losses, but his view did not lead to a major trend reversal in the US stock market.

There were indeed bouts of trading volatility in today's session. The iShares Nasdaq Biotechnology ETF (IBB 239.44, +0.21) was the standard bearer in that respect as it saw a 4.0% range between its intraday high and intraday low. The ETF, which had dropped as much as 11% over the preceding four sessions, gained just 0.1% on Tuesday. The roller-coaster action in that closely-watched and widely-chased sector kept a lid on things for the Nasdaq Composite, which trailed the blue-chip laden Dow Jones Industrial Average and S&P 500.

Strikingly, it was Big Blue itself -- IBM (IBM 195.04, +6.79) -- that carried the day for the broader market. It surged 3.6% on a few announcements detailing new business activity, yet we suspect it was also accorded a low-beta premium in an environment of late that has featured some material hiccups for high-beta momentum stocks. IBM led all Dow components; however, the blue chip bias was also evident in fellow components like Johnson & Johnson (JNJ 97.38, +2.18), Caterpillar (CAT 98.59, +1.74), Merck (MRK 55.19, +1.41), 3M (MMM 134.06, +1.64), and United Technologies (UTX 115.20, +1.45).

Today's gains were broad-based in nature. Nine out of ten S&P 500 sectors closed the day with a gain. The lone loser was the consumer discretionary sector (-0.6%), which was held back by a relatively weak showing from the apparel and media stocks. Some disappointing second quarter and full-year earnings guidance from Carnival Corp. (CCL 38.02, -1.98) also weighed on the sector.

Notwithstanding the broad-based gains, the financial sector (+0.01%) was a notable underperformer in Tuesday's trading as JPMorgan Chase (JPM 60.93, -0.14), Goldman Sachs (GS 163.25, -2.47), Bank of America (BAC 17.21, -0.16), and Morgan Stanley (MS 31.59, -0.85) all traded lower. Leadership from the industrial (+0.9%), energy (+0.8%), and health care (0.8%) sectors, though, provided an influential offset.

There was a round of economic data today that revolved largely around the housing sector:
The January Housing Price Index from the FHFA increased 0.5%, which followed a revised uptick of 0.7% observed during the prior month.
The Case-Shiller 20-city Home Price Index for January rose 13.2% while a 13.3% increase had been expected by the consensus. This followed the previous month's increase of 13.4%.
New home sales declined 3.3% in February to 440,000 from a downwardly revised 455,000 (from 468,000) in January. The consensus expected sales to fall to 445,000. Commentators will likely point out that the drop in sales was the result of extreme winter conditions, but sales actually increased 36.7% in the frigid Midwest and fell 15.9% in the West. In actuality, sales are running a little ahead of the 12-month average with the drop in February resulting from normal volatility.
The Conference Board's Consumer Confidence Index strengthened in March. The index increased to 82.3 from an upwardly revised 78.3 (from 78.1) in February. The consensus pegged the index at 78.2. The reading put confidence levels at the highest point since January 2008. Typically, confidence levels trend with unemployment, gasoline prices, and the equity market. The increase in volatility in the equity market over the past few weeks did nothing to harm confidence. Instead, consumers relied on more favorable employment conditions.
The stock market seemed to divorce itself from the data on Tuesday, following instead the path of activity in the biotech sector and leading blue chip issues. Similarly, the Treasury market rocked back and forth between negative and positive territory before ending modestly lower at the cash settlement.

On a related note, the $32 bln 2-yr note auction went okay, drawing a high yield of 0.469% (0.471% when issued) and a 3.20 bid-to-cover ratio. The latter was below the 12-auction average, but there was strong demand from indirect bidders who accounted for 40.9% of the allotment versus a 12-auction average of 25.7%.

A $35 bln 5-yr note auction will be held on Wednesday. In addition, the economic calendar will feature the latest reading for the mortgage applications index and February data for durable goods orders (consensus +1.0%).

Dow Jones Industrial Average -1.24% YTD
Nasdaq Composite +1.4% YTD
S&P 500 +0.9% YTD
Russell 2000 +1.3% YTD
S&P 400 Midcap Index +2.2% YTD

RTR - Russian military holds exercises in breakaway Moldova region: agency

Russian military holds exercises in breakaway Moldova region: agency

(Reuters) - Russia's military staged training exercises on Tuesday in Transdniestria, a breakaway sliver of Moldova that is a focus of tension following Russia's annexation of Ukraine's Crimea region.

NATO's top military commander said on Sunday he was worried that Russia might have its eye on Transdniestria, a largely Russian-speaking region that borders western Ukraine, after seizing Crimea, which has a narrow ethnic Russian majority.

The Interfax news agency quoted a spokesman for Russia's Western Military District, Colonel Oleg Kochetkov, as saying that Russian forces stationed in Transdniestria had "conducted an anti-terrorism drill and practiced operations to rebuff an attack on their military base".

Transdniestria, with a population of half a million, has run its own affairs since 1992 after fighting a brief war against the Moldovan government over fears that it might join Romania after the collapse of the Soviet Union, and Russia has a permanent garrison of peacekeepers there.

Russia has held several military drills during months of political upheaval in Ukraine. Some have brought large Russian forces close to Ukraine's eastern border, adding to concerns of an invasion after President Vladimir Putin secured permission from parliament to send in troops to protect Russians if needed.

Earlier on Tuesday, a spokesman for Russia's Strategic Rocket Forces, responsible for Russia's long-range nuclear arsenal, said around 10,000 troops would take part in exercises until March 29 in western Siberia's Omsk region and Orenburg in the southern Urals, more than 2,000 km (1,200 miles) from Russia's border with Ukraine.

FT : Bundesbank hawk signals backing for QE

Bundesbank hawk signals backing for QE

One of the biggest barriers to the European Central Bank buying government bonds to save the eurozone from deflation was removed on Tuesday, after the head of Germany’s powerful Bundesbank offered his first sign of support for quantitative easing.
In a radical change of stance, Jens Weidmann, the Bundesbank president who is viewed as the ECB’s policy hawk, said a QE programme was not “generally out of the question”.

While he was clear he would prefer purchases of private-sector assets to government debt, he signalled he could back sovereign bond-buying if it conformed with EU law, which prohibits the financing of governments by its monetary authority.
“It should be clear that my assessment [of whether QE violates EU law] will be a strict one,” he told the financial news service Market News International. “Buying not just peripheral bonds but German and French ones as well does not automatically solve the problem of monetary financing.”
Neither Mr Weidmann nor the bulk of the ECB’s rate-setting governing council are likely to call for buying public or private-sector bonds just yet. But the Bundesbank chief’s remarks indicate ECB president Mario Draghi could push through QE without alienating the eurozone’s economic powerhouse – should the risk of a bout of Japanese-style deflation heighten.
Mr Weidmann had in the past objected to the ECB buying government bonds. He was the only policy maker to vote against its “outright monetary transactions” programme, through which it can buy potentially unlimited quantities of sovereign debt.
Now, with the ECB grappling with inflation of less than half its target of just below 2 per cent, the Bundesbank president appears to have softened his position. Ken Wattret, economist at BNP Paribas, said: “The comments sound somewhat more open-minded to the idea of additional policy action from the ECB, including unconventional measures, though with little sense of urgency.”
Low eurozone inflation has stoked calls for the central bank to buy government bonds and embark on other unconventional policy options, such as negative rates on deposits parked in its coffers. The ECB has so far parried the calls, opting to keep policy on hold earlier this month despite unveiling forecasts showing inflation would remain well below its target the year after next at 1.5 per cent.
Mr Weidmann made clear the current policy stance was “appropriate”. And even if the risk of a bout of falling prices rose substantially, he indicated the ECB would have to buy a host of assets, including not just the bonds of governments but also private-sector securities, to win his approval.
Officials in three of the ECB’s directorates – for market operations, legal and economics – are working on proposals for how the central bank could conduct QE and take other unconventional measures.

>>> ECB's Weidmann (Germany): ECB would be in uncharted territory if it were to

ECB's Weidmann (Germany): ECB would be in uncharted territory if it were to adopt QE, ECB needs to respect the limits of its mandate
- Markets are rewarding the eurozone for reform progress, and all indications are that the eurozone recovery will continue. 
- Still too early to say eurozone debt crisis is over. 
- Broad deflation risks are very limited. 
- Current EUR FX level does not warrant monetary policy action. Current ECB monetary policy remains expansive. 
- Economic sanctions on Russia could compound the negative impact on the Russian economy following accession of Crimea