>>>Weekly Market Update: The New Neutral

Weekly Market Update: The New Neutral

- Aggressive buying in government bond markets had many wondering if they should pay heed to warnings of a potential short squeeze this week. The action in US treasuries knocked the S&P500 off of all-time highs and sent the 10-year benchmark yield as low as 2.472%, matching the lows seen last October. A panicky reaction to weak European GDP numbers and a trial balloon in Athens regarding possible retroactive capital gains taxes on bond sales sent the 10-year bund yield momentarily below 1.30%. In addition, weak April China industrial output and fixed asset investment data also added to the scramble. The equity slide was more muted in Europe and Asia, and by Friday most US and global indices rebounded driven by options expiration. PIMCO chief Bill Gross made his mark on the week publishing his big new call on the next phase for the global economy: the 'New Neutral,' featuring "low returns but less downside risk than expected and an end to bull markets as we've known them." For the week, the DJIA lost 0.6%, the S&P500 slipped less than 0.1% while the Nasdaq added 0.5%, breaking the tech heavy index's three week losing streak.

- Inflation data out this week (coupled with the strong April NFPs) shows the Fed finally seems to be getting what it wants. April core CPI (which strips out volatile food and energy costs) rose to 1.8% from 1.7% in March, putting the measure at a 13-month high. April wholesale prices measured by the core PPI index were up to 1.9% from 1.4% in March, for the biggest m/m increase in the series since September 2012. At the same time, an NFIB's survey of small-business optimism for April showed sentiment at its best level since before the recession began in December 2007.

- Big retail chains Walmart, Macy's and Kohl's offered disappointing first quarter numbers, but after seeing countless earnings reports out over the last month citing the deleterious impact of winter weather on business, this comes as no surprise. On the other hand, former retail basket case JC Penny reported its second consecutive quarter of comp growth after nine straight quarters of decline. Weather was no excuse for the weak April US advance retail sales report's scant 0.1% gain, although the March numbers were revised to 1.5% from 1.1% prior, making the month's advance the biggest gain in the series in four years.

- Deere cut its equipment sales outlook for 2014 and its outlook for certain regional sales. Note that in its first quarter, agricultural equipment net sales declined 12% y/y. Net profit and revenue fell on a y/y basis, although earnings declined less than expected. According to Deere, the agricultural economy remains in a relatively healthy condition but farm income is forecast to be lower than last year.

- After several quarters of offering weak guidance, Cisco managed to post better than expected Q3 results and solid guidance for Q4. Nevertheless, as emerging markets challenges persist, the company still forecast a y/y decline in Q4 revenue even if it managed to top its own guidance and consensus targets.

- On Thursday, the FCC voted 3-2 to adopt new rules for governing broadband internet service. As written, the proposals would allow ISPs to enter 'paid prioritization' deals, giving some firms a 'fast lane' to customers, while also specifically prohibiting them from knowingly slowing data. The proposed rules are open to public comment for four months before a final vote, and the comments came fast and furious after the vote. Big telecoms seemed fairly content with the new structure, while a broad spectrum of large and small tech firms condemned it, claiming that it effectively gutted the principle of net neutrality.

- Hillshire Brands reached a deal to acquire Pinnacle Foods in a cash and stock transaction valued at $6.6 billion, including Pinnacle's outstanding net debt. The combined company would have about $6.6 billion in annual sales and maintain leading positions in frozen and refrigerated grocery categories. Deal making in the healthcare sector continues unabated: Kindred Healthcare made an unsolicited offer to buy Gentiva Health Services for about $514 million in cash and stock, and Abbot said it would acquire Latin American company CFR Pharmaceuticals for $2.9 billion.

- Only a portion of India's 550 million votes have been counted after national elections held over the last several weeks, but as of Friday the Indian National Congress, which has dominated for most of the post-Independence era, conceded the contest to Narendra Modi's Bharatiya Janata Party (BJP). The BJP will hold at least 272 out of 543 seats in parliament, meaning it could rule alone without a coalition government, the first party to do so since 1984. Rumors that Modi had won a supermajority drove India's Sensex up 6.1% early on Friday, before the index gave up most gains.

- Last weekend's 'independence' referendums in Eastern Ukraine came and went without much impact (most notable was the very tepid reception they got in Moscow), and this week there has been a distinct feeling that most parties involved in the crisis are looking for ways to de-escalate. There has been more troubling violence, but also late in the week thousands of steel workers and miners came out into the streets in the East in support of a united Ukraine and to help local police impose order. On the energy front, Putin insisted that Russia would still demand prepayment for Ukraine gas deliveries starting June 1st, even as both sides appeared to be working for a solution to the gas question. Negotiations between Russia, the EU and Ukraine on Ukraine's outstanding bill and future rates for gas are slated to take place on Monday, May 26th, and Russia PM Medvedev said the Kremlin is ready to talk about terms of payments if at least part of the nation's gas debt is paid.

- Tensions between China and its neighbors flared up this week after China placed an oil rig near the Paracel Islands - claimed by both Hanoi and Beijing - and began building an airstrip on one of the islands. There were reports that Chinese ships rammed Vietnamese coast guard vessels attempting to patrol near the oil rig. The actions triggered widespread protests in Vietnam that heavily damaged foreign factories, some run by Chinese firms but also a few run by Taiwanese and South Korean companies. Taiwan tech manufacturer Hon Hai - which manufactures Apple's iPhones and iPads, among many other mobile devices - told its workers in Vietnam to take a three-day leave of absence beginning on Saturday.

- On Tuesday morning, reports made the rounds that the Bundesbank was finally giving a green light to ECB stimulus action in June if 2016 inflation forecasts were lowered. EUR/USD came into the week around 1.3760 and plummeted to 1.3700 on the news. The Buba pooh-poohed the report, calling it nothing new, but in a major policy speech the next day Bundesbank President Weidman acknowledged that there was a slight deflation risk at the moment and said he would support ECB action if it was needed. Weidman stopped short of endorsing QE, calling it not the best solution to deal with low inflation.

- Advance Q1 GDP data from several European states and overall Eurozone advance GDP report were pretty weak. Besides Germany and Poland, every European state that reported missed expectations and all the peripheral states reporting saw negative q/q growth. Analysts said that the disappointing data will be another element pressuring the ECB to act in June to keep growth on track and fight deflationary risks.

- Cable hit one-month lows under 1.6750 after the Bank of England quarterly inflation report was a bit dovish, diminishing the risk of an early rate hike. The BOE left its growth and inflation forecasts broadly unchanged, meaning a rise of its main benchmark rate is still expected in the first half of 2015.

- The Shanghai Composite hit a two-week high above 2,050 on Monday but quickly retreated on the heels of an underwhelming set of economic data on Tuesday. China Industrial output growth of 8.7% missed the 8.9% consensus, while fixed asset investment YTD growth was the slowest on record at 17.3%, below the 17.7% estimate. Secondary data from the mainland were similarly tepid: CNY770B in April new lending was below CNY800B forecast, power consumption grew less than 5% and non-performing loans in the banking sector for the first quarter spiked up by the biggest margin since 2005. Kynikos' Jim Chanos reiterated his bearish call on the China property sector and Fitch affirmed its below-the-official-target 7.3% GDP forecast for 2014 after the "almost universally weaker" round of economic indicators.

>>> US. Close Dow+0,27% S&P+0,37% Nasdaq+0,52%

Late Surge Leads to Positive Close

The stock market lumbered and slumbered through most of Friday's session, but it woke up late in the day and ended on an upbeat note. The major indices all scored modest gains, the most notable of which was the Russell 2000, which ducked into correction territory again with an early 0.7% decline only to come rallying back to finish Friday up 0.4% and out of the "correction zone."

There wasn't a specific news catalyst behind the late surge. The explanation that it was related to options expiration activity can't be dismissed and it would fit in line with other explanations that included short-covering activity, the ability of the Russell 2000 to fight back once again from a notable decline, and renewed buying interest in some of the market's most influential sectors that had been lagging for most of the day.

The financial sector is a case in point. It was down 0.5% with about an hour to go in the trading session and it finished the day up 0.1%. Similarly, the technology sector, which was nearly flat entering the final hour, ended the session up 0.6%. The energy sector (-0.3%) was the only sector to end with a loss.

The major indices had been confined to tight trading ranges for most of the session as big moves were reserved largely for individual stocks like J.C. Penney (JCP 9.69, +1.32), which rallied after the embattled retailer reported better than expected earnings results and guidance.

The telecom services sector (+1.4%) was the only sector that had been showing any notable strength throughout the day. That was owed primarily to Verizon (VZ 49.07, +1.11), which benefited from the disclosure that Berkshire Hathaway established a new position in the stock during the first quarter. Otherwise, there wasn't a lot of movement of note in the remaining sectors until the final 90 minutes.

That was true for the Treasury market, too. There wasn't a lot of movement there despite the report that housing starts surged 13.2% in April to a seasonally adjusted annual rate of 1.072 mln units (consensus 975,000) while building permits rose 8.0% to 1.08 mln (consensus 1.008 mln).

The Treasury market's steady state after the report, and a weaker than expected University of Michigan Consumer Sentiment report for May, looked to be a distraction for equity traders who were still trying to make sense of Thursday's big drop in yield in the 10-yr note. Some late selling activity, though, had the 10-yr probing its worst levels of the day as stocks were staging a rally heading into the close. The 10-yr note, which had been down four ticks for most of the day, was down nine ticks and yielding 2.52% when the closing bell rang.

Thanks to the late burst of buying interest, the Nasdaq was able to finish the week with a gain. The S&P 500, however, just missed.

Trading volume at the NYSE hit 763 mln shares on Friday, which was the heaviest all week. That was not surprising given the low totals earlier in the week and the kicker provided by the monthly options expiration.

The coming week could be characterized by low volume again. There isn't much on either the economic or earnings calendars and the Memorial Day holiday will be waiting at the end of the week.

* S&P 500 +1.6% * Dow Jones Industrial Average -0.5% * Nasdaq Composite -2.1% * Russell 2000 -5.4%

>>> Red Bull sale increasingly unlikely; internal succession plans in place

Red Bull sale increasingly unlikely; internal succession plans in place - report (translated)

A sale of Austrian energy drink group Red Bull is becoming increasingly unlikely, Format suggested without naming sources for the information. The Austrian magazine pointed out that Dietrich Mateschitz, the co-owner and figurehead of Red Bull, is turning 70 soon, but has shown no signs of slowing down or planning a retreat.

Red Bull is nevertheless already preparing for the time after Mateschitz. For a long time, a sale of Red Bull to one of the large US beverages conglomerates Coca-Cola or Pepsi was seen as the most likely future scenario, the report continued. However, this option seems very unlikely today and such rumours have not surfaced for quite some time, it added. The article noted that Red Bull is expected to find an internal solution involving existing managers and Mateschitz’s son, Mark Gerhardter.

As previously reported, Mateschitz owns a 49% stake in Red Bull, while the remaining 51% stake is owned by the Thailand-based Yoovidhya family.

Red Bull generated a profit of approximately EUR 500m in fiscal 2013.

Source Format

NY Post : Sony woes could spark another battle with Loeb

Sony Corp.’s continued struggles and falling stock price could spark another battle with activist investor Dan Loeb, The Post has learned.
Loeb, the founder of the Third Point hedge fund, may jump back into a battle with the Sony board if shares of the electronics company — down 5.2 percent this year, to $16.39 — continue to tumble, sources familiar with Loeb’s thinking said.
Last summer, Loeb amassed a small stake in the $17 billion company and called for Sony to consider spinning off the firm’s entertainment assets as a way to unleash their true value.
Loeb, in a letter to the Sony board, pointed out several inefficiencies, hence embarrassing executives.
Sony politely declined the spin-off idea but promised to undertake major restructurings and rounds of cost cuts.
Nearly one year later, Sony’s financial situation doesn’t look much different.
“Loeb will be rattling now that the stock has dropped,” said the person familiar with the situation. “This [also] opens the door for other activist investors.”
Sony’s poor financial situation leaves its US chiefs in a tough spot, wondering how to expand their businesses when all the capital has to head back to Tokyo, one person explained.
“It’s going in the wrong direction,” said one source with knowledge of the situation.
“As long as the stock keeps dropping, Loeb’s plan for a spin-off of the entertainment assets is logical,” a second source in the loop said.
This person likened the entertainment assets of Sony to the value of Yahoo!’s Alibaba stake — meaning that the core business adds little to the overall value of the company.
Sony’s move to spin off its television-set business into a new entity is being viewed as a precursor to a possible sale — one move that would fit into Loeb’s vision of a slimmed-down Sony.
Sony’s entertainment assets are valued at roughly $14 billion, sources estimated.
A stock price decline to the $13-a-share neighborhood could bring activists off the sidelines, the person said.
If the entertainment assets were sold, Sony could give its stock price a huge boost and begin a period of reinvestment in its core products.
Sony has continued to say it isn’t interested in selling its entertainment assets and rejected Loeb’s plan for a spin-off soon after its proposal last year.
A Sony spokesman couldn’t be reached for comment.
Third Point declined comment.

FT : US sanctions threaten freeze on Russian bonds

US Ukraine-related sanctions threaten to bring the secondary market for Russian bonds to a standstill, the head of emerging market debt at BlackRock, the world’s biggest asset manager, has told beyondbrics.

Sergio Trigo Paz said BlackRock had sold all its holdings of Russian bonds, worth “hundreds of millions of dollars”, and that the market for Russian debt was “freezing up”.

“The glue of sanctions is starting to dry,” he said. “People thought sanctions were about visas for oligarchs wanting to visit Disneyland. But they are much more important and any US asset manager [owning Russian bonds] will have their legal people looking very closely at the impact of [Russian individuals and companies] being on the sanctions list.”

Trigo Paz said BlackRock had sold all its Russian local currency and foreign currency sovereign bonds and corporate bonds in a preventive move in mid-April. Russia has one of the largest weightings in widely-benchmarked emerging market bond indices, with 10 per cent of JP Morgan’s GBI-EM index of local government bonds and about 5 per cent of similar hard currency sovereign and corporate bond indices.

“People used to ask how much Greece you had in your funds,” Trigo Paz said. “Now they are going to ask how much Russia you have.”

As is standard for US sanctions, regulations published on May 8 by the US Treasury Department’s Office of Foreign Assets Control (OFAC), state that the assets of any entity in which a named individual owns directly or indirectly a 50 per cent or greater interest, are blocked, “regardless of whether the name of the entity is incorporated into OFAC’s Specially Designated Nationals and Blocked Persons List.”

The worry for investors is that the bonds of a Russian company could be blocked even if that company is not identified on OFAC’s list and that bondholders could be prevented from receiving interest payments.

“All transactions could start to freeze,” said Trigo Paz. “Even companies where individuals on the list own less than 50 per cent are being looked at by compliance officers as a potential risk.”

He said he had heard of one other large asset manager that had sold its holdings of Russian bonds but that, in general, fund managers were underweight Russia without having taken such drastic action.

“We hear that many US banks are trying to keep inventories very light while non-US banks that are long Russian bonds are getting more and more uncomfortable,” he said, noting that the buyers of last resort of Russian bonds would be Russian state-controlled banks, which would also be the bond custodians.

“If sanctions escalate, we don’t know what Russia’s answer would be,” he said. “We hear that Russian banks are repatriating dollar deposits to Russia, which is one reason why the rouble is not selling off as much as expected.”

>>> GM to enter into consent decree with govt on recall; pay substantial fine

General Motors has entered into a consent decree with the U.S. government over the timeliness of its ignition switch recall, CNBC has learned.

As part of the deal, the automaker will pay a fine. The Department of Transportation probe into the recall is expected to continue.

The DoT and the National Highway Traffic Safety Administration are scheduled to hold a press conference regarding GM at 11:15 a.m. ET.

GM has recalled millions of cars in recent months and already taken or announced charges of about $1.5 billion. A faulty ignition switch in some older cars has been linked to 13 deaths, and GM has now expanded a safety push to other models with other defects.

(Challanges) Why is France champion luxury and will continue to be

{http://bit.ly/1gvgw6P} French
{http://bit.ly/1lwolF9} English

Why is France champion luxury and will continue to be

INTERVIEW Bénédicte Sabadie-Faure, partner in charge of Deloitte luxury, an update on trends in an industry that knows no crisis, in which France occupies a prominent place

Deloitte published Tuesday, May 13 the first edition of the Global Survey Global Powers of Luxury Goods, which ranks the players according to their luxury sales in fiscal year 2012. In this ranking, which lists 75 companies , France possesses 11. Bénédicte Sabadie-Faure, partner in charge of Deloitte's luxury sector, analyzes the main results of the study.
Reveals that the study on the health of the luxury sector?
The study shows that all these luxury groups are highly resistant to a decline in consumption and particularly the French groups. Indeed, in the top 10, we have 3 and when you make a focus on the 11 French groups present in the list of 75 best companies, they outperformed the market with 18.9% of growth against 14.3% in average for the 75 groups.
The place of France in the luxury industry is threatened?
Given the behemoths we have in France, conglomerates they represent number of brands, and the amount of barriers to entry into those markets (market access in premium locations, marketing, innovation , product quality), I do not think that France could be dethroned in the coming years.
What are the main trends driving the luxury sector globally?
The first is that the market is driven by tourism. For France, half of the sales of luxury goods comes from tourism and the tourists come first Chinese (which is not surprising because we know that 40% of the budget concerning Chinese travel shopping) and second the Russians.
Another major trend correlated to the first, knowing that luxury consumption is mainly driven by the BRICS (Brazil, Russia, India, China and South Africa, ed), luxury groups tend to go open stores locally in these countries because they have realized that it increases the consumption of tourists. But what has changed in recent years in their approach to emerging countries is that before they put in place comprehensive openings (for example, they said: "We opened in China") but now they follow a personalized approach city by city, for example by differentiating strategy implementation in Shanghai, and the establishment in Beijing. If consumers in the city are accustomed to the brand, the luxury groups open stores that offer their full range of products, but if they are cities that are not yet familiar with the brand, they offer only the input range. Similarly, brands adapt their products to local customs. Thus, Hermes has launched a line of saris in India and bought the high-end brand Shang Xia in China, which enables it to develop gradually its strategy in China based on this brand. L'Oréal also bought brands already well established locally, such as Yue Sai in China. They are all engaged in a more appropriate local strategy.
The third trend is that there is from brands that are not luxury brands, a propensity to buy more luxury goods. So the luxury brands are forced to differentiate by offering products and exclusive services such as customization. Thus, Louis Vuitton launched the House of luxury in Shanghai, where consumers make the invitation and the opportunity to buy bags designated as they wish. Similarly, on the occasion of his fall parade, Burberry allowed customers to order some products by customizing, which were delivered even before the launch of the collection in store.
Finally, some brands are also starting to play a lot with internet. When groups are not classified according to their turnover, but according to their growth, results are very different. Michael Kors tops, with 65% growth in sales in 2012, which is huge. It is followed by Tory Burch, which shows 56% growth. But when we look at these two brands have done, we realize that they are both very efficient in the use of internet. For example, Michael Kors makes extensive use social networks and advertised on Instagram. Most luxury groups studying many internet. They are forced to go given the rejuvenation of their clients.
For this study, we relied on 2012 figures because we wanted to cover a very wide range of groups. But with the few data we have for 2013, we already see that the major trends in 2013 are not very different from those of 2012.
How is it that luxury companies stand despite decline in consumption?

Mainly through the consumption of customers from the BRICS. When we look at the types of consumers in these countries, a phenomenal enrichment of the middle class is observed. Mature countries are in search of luxury experience rather than purchase. But for emerging countries, which are the new rich, without falling into clichés, seeking above all the attributes for the rich flaunt their purchasing power. And contrary to what one might think, this part of the population does not decrease. When looking at the number of individuals of the so-called class A in the BRIC, it is increasing.
What are the main challenges ahead for the luxury sector?

First of all this will be the true development of differentiated services.Consumers are waiting innovative things. Increasingly, luxury groups openstores that are mostly "flagships", allowing an experience.
Then it will be to manage all the online portion that is still at the beginning, because consumer expectations are very high.
Finally, there will be a subject of access to resources. Groups make a lot of backward integration to secure know-how, but also to secure access to raw materials. For example there is a scarcity of skins. There is also a subject of downstream integration. To appear as premium brands, they must get to keep branding on the entire chain until time of purchase. In fashion, the groups are settled in this strategy and they usually have own stores, but this is less the case for the other branches of luxury. It is being set up in jewelry.For example Swatch bought stores in.
This growing integration does lead to an increase in the number of mergers and acquisitions in the luxury sector, as well as that observed in other sectors such as industry or telecom ?

Clearly, yes. All luxury groups are engaged in the acquisition of local brands well established. In parallel, many investment funds, including Qatar, are interested in the sector. And it is expected that this trend continues.

>>> US Gapping Up

In reaction to strong earnings/guidance: KGJI +33.3%, JCP +17.1% (also tgt raised to $10 from $6 at Deutsche Bank), XGTI +11.5% (also announces New Mexican Patent Award), JWN +10.9% (also upgraded to Outperform from Neutral at Credit Suisse), QUNR +6.7%, ADSK +4.8%, EGLE +4%, AMAT +1.7%, DDS +1% (light volume).

M&A news: OVRL +33.8% (Overland Storage and Sphere 3D enter into definitive merger agreementin transaction with implied value of ~$4.43/share ), RAX +13.6% (following late spike; co has confirmed it hired Morgan Stanley after being approached by multiple parties), DCIN +9.1% (to be acquired by Carmike Cinemas in an all stock transaction; each Digiplex share will be exchanged for 0.1775 shares of Carmike common stock), ABT +1.4% (expands Latin American presence and branded generics portfolio with acquisition of CFR Pharmaceuticals).

India names higher with strength in overseas trading -- boosted by election results: IBN +8.3%, SSLT +5.8%, HDB +4.1%, TTM +2.2%, RDY +0.6%,

A few 3-D printing related names are trading higher : DDD +2%, ONVO +1.6%

Other news: LRCX +4.7% (Greenlight Capital disclosed new position), LO +4.3% (Greenlight Capital disclosed new position), DEO +2% (still checking), ARO +1.8% (still checking), CVE +1.8% (positive MadMoney mention), BUD +1.8% (still checking), MAS +1.7% (Third Point disclosed new stake), PLUG +1.7% (positive MadMoney mention), VZ +1.6% (Berkshire Hathaway discloses new 11.02 mln share position in VZ; Third Point disclosed new stake; Paulson & Co disclosed new position), ENZY +1.4% (reports a request for arbitration by AAK), SUNE +1.4% (Greenlight Capital increased position), AHC +1.2% (announces special and regular dividends), HSBC +1.2% (still checking for anything specific), DXCM +0.8% (positive MadMoney mention), MA +0.7% (Berkshire Hathaway increased stake), WMT +0.4% (Berkshire Hathaway increased position; Barron's profiles positive view on Wal-Mart ), UNP +0.2% (announces 2-for-1 stock split; increases 2014 capital expenditures by $150 mln to $4.1 bln), TWTR +0.2% (reports indicate Twitter will not be blocked by Russia; upgraded to Hold at Wunderlich).

Analyst comments: TST +4% (initiated with a Buy at B. Riley & Co.; tgt $4.15 ), TISA +1.8% (initiated with a Buy at ROTH Capital), SMCI +1.4% (upgraded to Buy at Stifel;), NBG +0.7% (upgraded to Overweight from Neutral at JP Morgan), TSS +0.6% (upgraded to Overweight from Equal Weight at First Analysis ), TWTC +0.5% (upgraded to Buy from Neutral at Citigroup), LLL +0.3% (upgraded to Outperform from Neutral at Credit Suisse), KSU +0.3% (upgraded to Buy from Neutral at BofA/Merrill)

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: WWE -24% (also NBCUniversal Cable Entertainment reaches multi-year deal with WWE for MONDAY NIGHT RAW on USA Network and SMACKDOWN on Syfy), ISR -10.6% (disclsoes Q1 in 10-Q: Narrowly misses single estimate), CSIQ -7.2%, ICLD -5.7%, YOD -4.1% (light volume), VJET -2.1%, PAYC -1%, (light volume), KOOL -0.7%.

M&A news: GTIV -1.1% (Gentiva Health Svcs Board of Directors rejects unsolicited proposal from Kindred Healthcare (KND); determines proposal significantly undervalues company and its prospects), PFE -0.2% (AstraZeneca has risks over Pfizer (PFE) tax avoidance strategy, according to reports) .

Solar names lower following CSIQ results: YGE -2.8%, JKS -2.7%, TSL -2.6%, SPWR -1.5%

Select financial related names showing weakness: ING -3%, BCS -1.7%, DB -1.4% (reaches agreement with Blackstone Real Estate Partners VII to sell Nevada Property 1, owner of The Cosmopolitan of Las Vegas, for $1.73 bln ), RBS -1.4%, CS -1.1%.

Metals/mining stocks trading lower: RIO -3.1%, BBL -2.4%, MT -1.7% (planning offer for Zimbabwe Alloys, according to reports), BHP -1.4%, GOLD -1%, SLV -0.5%.

A few China internet names lower: DANG-1.7%, YY -1.5%, SINA -0.5%

Other news: KMDA -8.8% (announces preliminary results from Phase II/III pivotal trial; positive clinically meaningful efficacy signs in the inhaled AAT group including an ~50% reduction in severe exacerbation rates versus placebo), ALU -4.3% and RYAAY -4.2% (still checking), CHK -3.8% (Provides Update on 2014 Asset Sales and Projected Impact on 2014 Outlook; announced additional noncore asset sales; established a five year annual production growth target of 7-9%), GIMO -3.3% (announced that its vice president of engineering, Dave de Simone is leaving; appoints New Senior Vice President of Engineering), ARMH -3.2% (may be attributed to cautious blog mention), GME -2.4% (following NPD data), PT -1.5% (still checking), NOK -1.4% (gapping down despite Greenlight Capital disclosing new position and S&P upgrade), YHOO -0.6% (Third Point closed position).

Analyst comments: CLF -3.1% (downgraded at Macquarie)