>>> US Close : Dow+0,67% S&P+0,60% Nasdaq+0,27%

Closing Summary: Financials Lead Stocks Higher

The major averages finished the Thursday session on an upbeat note with the Dow Jones Industrial Average (+0.7%) in the lead. Small caps underperformed with the Russell 2000 adding 0.1% while the S&P 500 settled higher by 0.6% with nine sectors posting gains.

Stocks began the day on the defensive amid cautious action overseas, but were quick to erase their early losses. The S&P 500 climbed out of the red during the first hour of action with most European indices following suit.

The early advance was powered by the heavily-weighted financial (+1.7%) and technology (+0.7%) sectors, both of which continued their outperformance into the close. Outside of the two, the telecom services sector (+2.5%) was the only other area of relative strength, but it bears noting the group accounts for just 3.0% of the entire S&P 500.

Financials began the trading day ahead of the remaining cyclical groups and never relinquished their standing. Major sector components posted solid gains with JPMorgan Chase (JPM 60.11, +1.81) and Morgan Stanley (MS 32.79, +0.98) ending in the lead. The significant strength of the sector reflected the expected benefit from higher rates and a presumption that stress test results would show that most banks meet the Fed's capital ratio standards. Accordingly, the results, which were released after the close indicated that 29 of 30 banks passed while Zions Bancorp (ZION 32.99, +1.02) failed.

For its part, the technology sector was powered by chipmakers. Intel (INTC 25.42, +0.41) jumped 1.6% while the broader PHLX Semiconductor Index surged 1.9%. Even though most large components outperformed, that was not the case with the largest sector member—Apple (AAPL 528.70, -2.56)—which lost 0.5%.

The underperformance of Apple weighed on the Nasdaq (+0.3%) as the index could not keep up with the broader market. Biotechnology also pressured the Nasdaq Composite as indicated by a 0.5% decline in the iShares Nasdaq Biotechnology ETF (IBB 258.25, -1.22).

Elsewhere, biotechnology also factored into the underperformance of the health care sector (-0.02%), which spent the day in negative territory. Outside of health care, industrials (+0.2%) and utilities (+0.1%) spent the bulk of the session in the red, but erased their losses ahead of the close.

The industrial sector underperformed amid weakness in transports. The Dow Jones Transportation Average shed 0.1% with FedEx (FDX 136.50, -1.88) trailing the remaining index components. The stock ended lower by 1.4% despite being upgraded to ‘Market Outperform' at Avondale this morning. Interestingly, the logistics company reported disappointing earnings ahead of Wednesday's open, but the stock ended yesterday's session little changed.

Meanwhile, the utilities sector lagged as higher rates weighed. Elevated rates also took a bite out of homebuilders, sending the iShares Dow Jones US Home Construction ETF (ITB 24.57, -0.41) lower by 1.6%.

Treasuries spent the entire session in a narrow range with the benchmark 10-yr yield ending unchanged at 2.77%.

Also of note, President Obama announced additional sanctions on 16 Russian officials as well as individuals with close ties to Vladimir Putin while also targeting Bank Rossiya, which is believed to have close ties to the Kremlin. The president also signed an executive order that permits the use of sanctions against specific sectors of the Russian economy. In a swift response, Russia announced sanctions of their own against ten U.S. officials.

Economic data included weekly initial claims, February existing home sales, February Leading Indicators, and the March Philadelphia Fed Survey:
The weekly initial claims level increased to 320,000 from an unrevised 315,000 while the consensus expected the claims level to increase to 330,000. Prior to the last couple weeks, the initial claims level—absent unexpected seasonal biases—was bounded between 330,000 and 340,000. The latest data show a slight downward move from that range, which could be the start of another stage in the improvement in labor market conditions.
Existing home sales fell to a seasonally adjusted annualized rate of 4.60 million in February from an unrevised 4.62 million in January. That was exactly what the consensus expected. For the second consecutive month, the National Association of Realtors blamed extreme winter weather conditions as a primary catalyst for the weakness in sales demand. While sales did drop in winter weather-related areas like the Northeast and Midwest, sales in the South and West still remain well below their December levels. Even if sales recover in the weather-affected areas, overall demand remains below the 5.1 million - 5.3 million that was seen last spring and summer.
The Leading Indicators report for February increased 0.5%. That followed a 0.1% increase in January, and was better than the 0.3% uptick expected by the consensus.
Manufacturing activity in the Philadelphia region ended a temporary contraction in March as the Philadelphia Fed's Business Outlook Survey increased to 9.0 from -6.3 in February. The consensus expected the index to increase to 2.0.
There is no economic data of note on tomorrow's schedule but it is worth mentioning that quadruple witching will be taking place.

Nasdaq Composite +3.4% YTD
Russell 2000 +3.3% YTD
S&P 500 +1.3% YTD
Dow Jones Industrial Average -1.5% YTD

RTR - With cars, drivers, Google revs up home delivery --> -ve for AMZN, FDX, UP

--> -ve for AMZN, FDX, UPS...

(Reuters) - When Google started testing a free same-day shopping delivery service in San Francisco last year, industry observers were surprised by the company's foray into a notoriously tricky and decidedly low-margin real-world business.

Others raised their eyebrows when orders of one or two items, such as toothpaste or a can of soda, sometimes arrived in a bag big enough to hold a week's worth of groceries.

It was a rookie mistake, one that underscores how Google is wading into unfamiliar territory -- a business, now contested by seasoned hands Amazon.com Inc and eBay Inc. that claimed many victims during the first dotcom boom.

For Google, which dominates the wildly profitable Web search advertising business, dispatching drivers and delivering packages seems like an expensive diversion with an uncertain payoff. One of the biggest disasters of last decade's dotcom crash, Webvan, bled hundreds of millions of dollars on just such a business until it failed.

Online shopping is an area that Google, which has ambitions to dominate every aspect of the Web, has traditionally had a limited presence in. Traffic lost to Amazon and eBay, which are using same-day service to lock in consumers for the main business, means customers lost for Google's other services.

As e-commerce grows, Google wants at least to get its hands on data about online shoppers, so it can expand and improve its main business, search advertising. Its successful foray into mobile phone software was driven partly by a similar philosophy to guard its search franchise. Now its Android system ensures Google search is on most smartphones globally.

After more than a year of testing, and hiccups such as on packaging, Google is preparing to expand its delivery service.

Unfazed by the ghosts of defunct home-delivery operations Webvan or Kozmo.com, Google is ramping up its Shopping Express with radio ads touting the service in the San Francisco Bay Area. It recently took its blue-and-white Priuses and vans to Los Angeles in a limited trial and is considering moving into New York, according to a person familiar with the matter.

"Same-day delivery doesn't have to be a luxury. It's a convenience that everyone should be able to enjoy, and that means across lots of stores, across lots of cities and across lots of products," said Tom Fallows, director of product management for Google Shopping Express. Fallows wouldn't say when Google delivery cars might come to New York, but he confirmed that the company plans to enter more cities.

"We are eagerly starting to move forward on some of our next steps for expansion," he said. He declined to discuss the economics for Google.

Google is also experimenting with ways to deliver perishable groceries such as milk and eggs -- items that require special temperature-controlled storage and delivery gear, and which are already available through Amazon's rival Fresh service -- though Fallows said it's too early to say whether that might ultimately become part of the service.

Google has "tens of thousands" of users of the service in the San Francisco Bay Area placing thousands of orders a day, according to the person with knowledge of its delivery business.

"This is a play that will take many years before it turns in any way profitable. But it's something worth doing if they can establish the marketplace and the other hooks into the business," the person said.

THE LAST MILE

Google Shopping Express lets consumers buy products online from more than a dozen stores in the San Francisco Bay Area, including Staples, Costco, Blue Bottle Coffee and Toys R Us, and have the goods at their doorsteps that same day.

Couriers or contract drivers pick the orders up from retail stores throughout the day. Google collects an undisclosed commission from the retail stores for each sale.

For now, consumers pay nothing for the convenience, thanks to a free six-month membership trial offered by Google. Google will likely extend the free trial until it has perfected the service and is ready to charge a subscription fee, said Fallows.

With nearly $60 billion in cash, Google can afford to experiment with same-day delivery, similar to the way it is building out high-speed fiber networks in some cities.

Importantly, the ability to deliver purchases into buyers' hands on the same day closes the "last mile" between an online business and a customers' home. That removes a key advantage of traditional retailers today: instant gratification.

As Amazon spends billions on fulfillment centers and eBay contracts couriers around the country, the danger is Google may be left out of one of the hottest new areas of online growth.

The eBay Now service, available in the San Francisco Bay Area, New York, Chicago and Dallas, charges $5 per order and delivers goods within one to two hours. Amazon charges a $299 annual fee for Prime Fresh, which lets consumers order anything from fresh salmon to digital cameras, with free same-day delivery for orders more than $35. It's available in Los Angeles, San Francisco and Seattle. Amazon's separate Local Express service lets Prime members in 10 U.S. cities pay $3.99 per item for same day delivery.

Google's Shopping Express is being tested as a standalone delivery service, but many people expect the eventual goal is to integrate home deliveries as a feature in the search engine. A consumer doing research about camping tents on Google, for example, might see an ad that lets them order one and have it delivered to their doorstep the same day.

"It's just another way of to make search more powerful," says BGC Partners analyst Colin Gillis. And it gives Google more insight about users, such as valuable information about which visitors its website "convert" into buyers after clicking one of its search ads.

MAGIC WAND?

Amazon, eBay and Google have been mum on progress. But there's evidence to suggest that consumers may be taking to it.

Family-owned Palo Alto Toy & Sport, which Google identified to Reuters as a participant in Google Shopping Express, has increased sales by 15 percent, said manager Miguel Natario. The increase in sales has more than paid for an additional employee hired to pick the 30 to 40 additional daily orders from store shelves and prepare them for the Google driver pickup.

Among the most popular items? Helium-filled Mylar balloons, a party essential that sells for about $4 to $5 each. "I get inflated balloon orders every single day," said Natario.

The real test will come when Google asks users of Shopping Express to open their wallets and pay for home deliveries.

Google may need to put in place some restrictions if it hopes to make same-day delivery a viable business.

Paying drivers to crisscross town delivering packs of gum or tubes of toothpaste is not a sustainable business, said Kenneth "Skip" Trevathan, former chief operating officer of Kozmo.com, an online delivery service that expanded to several cities in the 1990s before going out of business.

"Unless they've got a magic wand of some kind that we didn't have, I just don't see how they can make money off that," Trevathan said. He predicts Google may have to impose a minimum order or tack on an additional fee for smaller orders.

Unlike many Internet businesses in which being first to grab market share is key to success, growing too big too fast can be fatal in the delivery game, said David Vernon, a Sanford Bernstein analyst. A small order that forces the delivery person to drive to the other side of town can do more harm than good.

"Last mile" economics are among the most complex metrics in the industry. Too much time between deliveries or poorly planned packing can inflate costs, especially for same-day orders.

A difference in the time between deliveries of just a few minutes can double shipping cost, according to an October analysis of Amazon's delivery service by Marc Wulfraat, a consultant who specializes in logistics networks.

"Getting a bunch of revenue that doesn't drive density in your routes is actually worse, because you're adding costs faster than you're adding revenue," said Vernon.

For Google, the key is to get that lag down. That's where mapping technology and a wide network come in handy.

"If you think about the fact that there are more than a billion people using Google maps to help them drive around town, we have a ton of information for optimal routes and traffic patterns," Fallow said.

Equipped with Android smartphones, Google couriers receive "step-by-step" driving directions. Deliveries per hour have increased by more than a factor of six since Shopping Express began, thanks to ongoing improvements in the software, and Fallow expects more improvements.

Orders for a single tube of toothpaste aren't ideal, but they are offset by the "broader basket" of customer orders and the annual spending of each customer. Google's delivery service is not so different from a traditional retail business, he said.

"Stores sometimes sell particular items as a 'loss leader' in order to over time earn the broader business of that shopper," he said.

>>> Nike beats by $0.04, beats on revs; futures orders +14% ex-FX, above estimat

Nike beats by $0.04, beats on revs; futures orders +14% ex-FX, above estimates 

* Reports Q3 (Feb) earnings of $0.76 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.72; revenues rose 12.7% year/year to $6.97 bln vs the $6.81 bln consensus.
* Revenues for the NIKE Brand were $6.6 billion, up 14 percent on a currency neutral basis powered by growth in every geography and key category.
* Revenues for Converse were $420 million, up 16 percent on a currency neutral basis, mainly driven by strong performance in our largest direct distribution markets: the United States, China and the United Kingdom.
* Gross margin expanded 30 basis points to 44.5 percent. Gross margin benefitted from higher average prices and continued growth in the higher margin Direct to Consumer business, partially offset by higher product input costs, unfavorable foreign exchange rates, and higher discounts, reflecting actions to clear excess inventory in select markets.
* Worldwide futures orders for NIKE Brand athletic footwear and apparel scheduled for delivery from March 2014 through July 2014 totaled $10.9 bln, 14% higher (ex-FX) YoY vs. expectations for ~12.5% growth.
* Despite the negative impact of changes in FX, earnings per share for the quarter were up 4 percent due to higher revenues driven by strong demand for NIKE, Inc. brands, gross margin expansion, a lower tax rate and slightly lower average share count, partially offset by the impact of higher SG&A investments in NIKE, Inc. brands and business capabilities.
* During Q3, NIKE repurchased a total of 10.4 million shares for ~$788 million as part of the four-year, $8 billion program approved by the Board of Directors in Sept 2012. As of the end of the third quarter, a total of 39.6 million shares had been repurchased under this program at a cost of ~$2.5 billion, an average cost of $63.21 per share.

Barron's : Profit from a Big Move in Tiffany Shares

Profit from a Big Move in Tiffany Shares

Consider an options play tied to expectation of earnings-related volatility in the stock.
A
Tiffany's 5% stock rally in the past month may be a warm-up for what the jeweler stock holds in store.

Goldman Sachs is telling clients Friday's earnings report could be unusually volatile. Tiffany (ticker: TIF) has said it will detail fiscal 2014 plans when it reports fiscal fourth-quarter earnings. The stock has moved on average almost 6%, up or down over the past eight earnings reports.

To position for a big stock move, Goldman's derivatives strategists are telling clients to buy the April $92.50 put and call that expires April 14. The stock was recently at $92.79.

Tiffany is expected to report consensus earnings of $1.52 a share on revenue of $1.3 billion, according to the analysts who follow the stock. The stock is priced at about 22 times forward earnings, and it is trading just beneath a 52-week high of $94.88 set March 6.

By buying the straddle – that is a put and call with the same strike price and expiration – investors create a position that proves profitable if the stock moves sharply in either direction. In reality, straddles can be heartbreaker trades because the stock must move more than the cost to buy the put and call.

The straddle cost $7 when the stock was at $92.79. For the trade to prove profitable, the stock must move more than $7, up or down.

When Goldman recommended the trade, the straddle cost $6.35 and the stock was at $92.67. That the straddle has increased in price even though the stock has barely budged shows how the options market quickly adjusts volatility in reaction to reports from influential strategists or events.

Another way to wager on Tiffany using Goldman's approach is buying Tiffany's March $92.50 straddle that expires Friday. The trade captures earnings, but then expires at the close. The straddle recently cost about $5.

Despite Goldman's flip-the-coin trading approach to Tiffany's earnings report, the options market is braced for Tiffany's stock to decline. The most widely-held options are bearish puts that would increase in value if the stock fell below $85 by March 21.

The popularity of puts likely reflects investor interest in hedging gains. The stock has recently rallied, and could sharply decline if Tiffany's outlook is less robust then expected, or startles investors with dour information about global consumer spending.

Investors with bearish views can simply look to buy a put that is slightly below the stock price to play a down move.

Contrarian investors can take a different approach. All of the widespread negativity may indicate the stock is poised to rally.

Aggressive traders can simply buy Tiffany's April $92.50 call on the assumption that the big put-buying is a sign of support. The logic may seem bizarre, but many investors believe that significant put action indicates investors do not want to sell a stock even if it declines on news. Why? Because puts increase in value when stock prices decline. So buying the put offsets any potential decline.

Bottom line: Tiffany's has outperformed the stock market in the past one- and three-years. Friday's earnings report, and especially the 2014 outlook, will be critical to determining if that outperformance continues. The options market offers investors many options to express their views.

Barron's : Starbucks May Leapfrog McDonald's in Market Value

Starbucks May Leapfrog McDonald's in Market Value {SBUX US Equity MCD US Equity GRT D <GO>}

McDonald's has been an excellent long-term investment. However, the struggling chain could see its market value eclipsed by Starbucks.

By the end of the current bull market, McDonald's (ticker: MCD) might no longer be America's largest restaurant by market capitalization.

Starbucks (SBUX), now valued at $57.4 billion, would need to rise 66% to match McDonald's $95.1 billion market cap. If recent trends hold, that could happen within a few years. Over the past year, Starbucks has surged 32% while McDonald's has slipped 3%.

McDonald's has been America's largest restaurant operator by market value since at least the 1970s, although the closely held Subway sandwich chain surpassed it in store count in 2011.

McDonald's shares have split seven times since their 1965 debut. An investor who picked up 100 shares during the initial stock offering paid about $2,250. Had he held until the end of 2012, he would have amassed 74,360 shares worth $6.6 million, according to the company.

McDonald's astonishing long-term success stems from countless menu and service innovations that have helped it vie for customers in all income groups during all meal times, and in between, across much of the world.

Results have slowed, however. During the fourth quarter of last year, the company generated flat sales and earnings. Last month, same-store sales, a key measure of improvement at longstanding locations, fell for the fourth straight month. Management says it is working to improve value and streamline menus. Some analysts say McDonald's weathered a deep U.S. recession by heavily promoting its Dollar Menu, which brought in more lower-income customers, who are now struggling amid a widening U.S. wealth gap.

Meanwhile, Starbucks in January said revenues for its first fiscal quarter, which ended Dec. 29, surged 12%. Earnings per share jumped 25%. Same-store sales improved by 5% on a 4% increase in traffic.

There could be plenty more growth ahead. Starbucks plans to test a new ordering system this year that will let customers pay from their mobile phones and predict their arrival time at stores. If successful, it will greatly reduce waiting times during peak hours. Management calls it a potential "holy grail" for driving better sales results, and hopes to roll it out next year.

After some misfires on breakfast menu items like egg sandwiches, Starbucks has had success with La Boulange Bakery pastries, Teavana teas and handcrafted sodas. It's testing evening offerings of wine, beer and gourmet snacks in some markets. It already sells private-label brewed coffee through other restaurants and beans and grounds in grocery stores and as K-cup single serve packs.

It will be many years before Starbucks catches up to McDonald's on profits. Starbucks is expected to earn just over $2 billion during its current fiscal year, which runs through September. McDonald's is projected to earn $5.7 billion in calendar 2014. But investors are currently paying unusually large premiums for companies that are perceived to have plenty of growth potential. Starbucks goes for 28.5 times estimated earnings for its current fiscal year, versus 16.5 times for McDonald's.

Wall Street expects Starbucks to increase earnings per share by close to 20% a year for years to come, more than twice as fast as McDonald's. Starbucks, with about 20,000 stores worldwide, can also open new shops with much less space than McDonald's, which has roughly 35,000 stores. Starbucks plans to accelerate new store openings in the U.S., including an eco-friendly design that consists of a few repurposed shipping containers staggered to create a drive-through.

What could stall Starbucks in its race to pass McDonald's? A market downturn could torpedo stocks with lofty valuations. A return to recession, or a shift in income distribution, could make consumers scale back on pricey lattes. Or McDonald's could come up with a new growth driver. After all, it once owned Chipotle Mexican Grill (CMG), the hottest restaurant on the U.S. stock market, with shares fetching 46 times earnings. Analysts say the burrito chain, whose shares have multiplied more than 10 times in value in eight years, could double its store count from here, and find success with new concepts, like pizza. Chipotle today has a stock market value of about $19 billion. Perhaps McDonald's has another Chipotle in its playbook—and won't sell too early this time.

If Starbucks does eclipse McDonald's in market value in coming years, it will come with a footnote. Dividends shift funds from a company's balance sheet to investor pockets, and so represent a portion of potential stock market value that has been sliced off and returned. Starbucks, which yields 1.4%, began paying dividends only in 2010. McDonald's, which yields 3.3%, has been making—and raising—payments since 1976. Over the past decade alone it has paid out around $20 billion.

>>> Fed's CCAR Summary : 29 of 30 pass stress scenarios; Zions Bancorp falls sho

Fed's CCAR Summary

According to the summary results of bank stress tests announced by the Federal Reserve on Thursday, the largest banking institutions in the United States are collectively better positioned to continue to lend to households and businesses and to meet their financial commitments in an extremely severe economic downturn than they were five years ago. This result reflects continued broad improvement in their capital positions since the financial crisis.Reflecting the severity of the most extreme stress scenario--which features a deep recession with a sharp rise in the unemployment rate, a drop in equity prices of nearly 50 percent, and a decline in house prices to levels last seen in 2001--projected loan losses at the 30 bank holding companies in the latest stress tests would total $366 billion during the nine quarters of the hypothetical stress scenario.

The aggregate tier 1 common capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual 11.5 percent in the third quarter of 2013 to the minimum level of 7.6 percent in the hypothetical stress scenario. That minimum post-stress number is significantly higher than the 30 firms' actual tier 1 common ratio of 5.5 percent measured in the beginning of 2009.Capital is important to banking organizations, the financial system, and the economy broadly because it acts as a cushion to absorb losses and helps to ensure that losses are borne by shareholders, not taxpayers. The Federal Reserve's stress scenario estimates are the outcome of deliberately stringent and conservative assessments under hypothetical economic and financial market conditions and the results are not forecasts or expected outcomes.

WSJ : BlackBerry Suffers Blow as White House Tests Samsung, LG Phones

The White House is testing smartphones from Samsung Electronics Corp. 005930.SE -0.55% and LG Electronics Inc. 066570.SE +0.48% for internal use, a person familiar with the matter said, threatening one of the last and most high-profile strongholds of BlackBerry Ltd. BB.T -0.19%

The devices are being tested by the White House's internal technology team and the White House Communications Agency, a military unit in charge of the President Barack Obama's phone use and overall communications, the person said. The tests are in the early stages, according to the person, and any implementation of Samsung or LG phones is still "months away."

"We can confirm that the White House Communications Agency, consistent with the rest of the Department of Defense, is piloting and using a variety of mobile devices," a Defense Department spokesman said. The spokesman declined to comment on the devices in the pilot test or in use at the White House.

A Samsung spokesman declined to comment on whether its phones were being tested at the White House. "We have seen strong interest from the government sector and are working closely with various agencies to deploy pilot programs that allow these agencies to better understand and estimate the resources needed for a full deployment," the spokesman said.

An LG spokesman said the company wasn't aware of such testing.

President Obama uses a modified BlackBerry, long a point of pride for the Waterloo, Ontario, company. Apple Inc. AAPL -0.48% for the last few years has been chipping away at BlackBerry's once-dominant position in the government sector, and Samsung has invested heavily to win more government customers.

BlackBerry Chief Executive John Chen has said that winning back government customers is a top priority. Mr. Chen said in an interview this month with Bloomberg Television that he had met with officials from the White House to discuss "some of the stuff they like and some of the stuff they would like us to work on."

"For more than a decade, BlackBerry has been securing the U.S. government's mobile communications and only BlackBerry is designed to meet the high security needs of U.S. and allied government agencies," a BlackBerry spokeswoman said.

(BFW) Rockhopper’s 14.2% of Float Traded in 2 Blocks at 103p-Shr Each

+------------------------------------------------------------------------------+

Rockhopper’s 14.2% of Float Traded in 2 Blocks at 103p-Shr Each 2014-03-20 16:18:21.827 GMT

By Benjamin Dow March 20 (Bloomberg) -- Rockhopper vol. jumps to 2,341% of 3-mo. daily avg. after 2 blocks of 18.59m shares each are traded at 11.40am U.K., 4.05pm. * Shares currently trade almost 1% higher at 106p * NOTE: Shareholders with stakes larger than block trades: FIL Ltd. (32.2m), Deutsche Bank (~19.9m), Odey Asset Mgt. (18.9m)

Link to Company News:RKH LN <Equity> CN <GO> Link to Company News:PMO LN <Equity> CN <GO>

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporter on this story: Benjamin Dow in Moscow at +7-495-771-7735 or bdow2@bloomberg.net To contact the editors responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net Gaurav Panchal