>>> US After Hours

After Hours Summary: MU +7.3%, APOL +4.3%, TISI +2.2%, TCS -7.4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: MU +7.3%, APOL +4.3%, TISI +2.2%

Companies trading higher in after hours in reaction to news: ARTC +10.9% (announced entry into a deferred prosecution agreement; to pay $30 mln fine to the U.S. Department of Justice), CEC +10.6% (Reters reporting co is considering a potential sale), ENZY +4.3% (announced 'New Food Raw Material' certification for K-REAL krill oil in China), LRN +2.2% (announced intent to create new company led by Ron Packard ; LRN appointed Nate Davis to replace departing CEO Ron PAckard), F +1.3% (CEO Alan Mulally said he will not leave for Microsoft (MSFT), to stay at Ford at least through 2014)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: TCS -7.4%

Companies trading lower in after hours in reaction to news: RBCN -6.0% (announced sale of $28.2 mln of common stock), MSFT -1.3% (Ford CEO Alan Mulally said he will not be leaving Ford to potentially head Microsoft), PM -0.5% (seeing headlines that China plans to place a ban on public smoking by year end)

>>> US Close Dow+0,64% S&P+0,61% Nasdaq+0,98%

Closing Market Summary: S&P 500 Logs First Gain of 2014

The S&P 500 settled higher by 0.6%, notching its first advance of 2014. Despite today's gain, the index remains lower by 0.6% through the first four sessions of the year. The benchmark index notched its high during the initial 90 minutes before spending the remainder of the session in a narrow range. Meanwhile, the Nasdaq (+1.0%) inched to a fresh high during the late afternoon.

Nine of ten sectors registered gains while materials (-0.2%) spent the day in negative territory. The sector was pressured by steelmakers with Market Vectors Steel ETF (SLX 47.63, -0.21) falling 0.4%. Outside of materials, most of the remaining cyclical groups posted solid gains. The financial sector was an exception as Bank of America (BAC 16.50, -0.16), Goldman Sachs (GS 178.29, -1.08), and JPMorgan Chase (JPM 58.32, -0.68) weighed. Bank of America lost 1.0% after spiking 7.0% over the past three sessions while JPMorgan Chase fell 1.2% after announcing its settlement stemming from the Madoff case will reduce fourth quarter net income by roughly $850 million. For its part, Goldman Sachs settled lower by 0.6% after Societe Generale initiated the stock with a ‘Sell' rating. Elsewhere, the technology sector (+0.9%) finished among the leaders even asits top component, Apple (AAPL 540.04, -3.89), lost 0.7%, ending below its 50-day moving average. Other large-cap names picked up the slack as Google (GOOG 1138.86, +21.54) and Oracle (ORCL 37.85, +0.38) advanced 1.9% and 1.0%,respectively. The outperformance of technology gave a boost to the Nasdaq, which also drew strength from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 226.93, +3.11) jumped 1.4%. In turn, the health care sector (+1.0%) settled in the lead. Other countercyclical groups held up fairly well as utilities (+0.9%) outperformed while consumer staples (+0.5%) and telecom services (+0.5%) settled just behind the S&P 500. Treasuries registered modest gains as the 10-yr yield slipped one basis point to 2.95%. Today's economic data was limited to the November trade deficit, which narrowed to $34.3 billion from a downwardly revised $39.30 billion (from $40.60 billion) while the consensus expected the deficit to come in at $40.40 billion. The decline in the trade deficit in November combined with the downward revision to the October data will likely boost our fourth quarter GDP estimates. Unfortunately, most of the decline in the trade deficit was likely temporary. A large drop in petroleum-based demand was a catalyst for a significant contraction in imports. Meanwhile, a significant portion of export growth came from the unstable sales of civilian aircraft and aircraft engines. Among news of note, the U.S. Senate approved Janet Yellen's nomination to lead the Federal Reserve with a 56.26 vote. Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while December ADP Employment Change will be reported at 8:15 ET. The FOMC minutes from the December meeting will be released at 14:00 ET and the day's data will be topped off with the Consumer Credit report, which will cross the wires at 15:00 ET.

o DJIA -0.3% YTD o S&P 500 -0.6% YTD o Russell 2000 -0.6% YTD o Nasdaq -0.6% YTD

FT : Political battle in Turkey continues with fresh arrests

Political battle in Turkey continues with fresh arrests

The two sides in the deepening battle within the Turkish state traded blows on Tuesday, with the government removing or transferring police officers and proposing new rules for top judges and prosecutors even as fresh arrests were made in the most recent in a series of corruption probes. The latest phase in the political crisis provoked by the confrontation between Prime Minister Recep Tayyip Erdogan and the police, prosecutors and judges came as Fitch Ratings, the rating agency, warned that "if the corruption scandal drags on, it could weaken the government and undermine its ability" to manage the economy. But the agency added that the crisis had "not yet had a material adverse impact on the macroeconomic outlook".

After falling to a series of all time lows against the dollar in recent days – including a drop to TL2.194 on Monday – the Turkish lira recovered in mid-afternoon trading to TL2.160, while the leading stock exchange index edged up 1 per cent on the day. In an overnight move, the government shifted about 350 police officers from their positions in Ankara, its latest attempt to weed out what Mr Erdogan describes as a "parallel state" – a reference to law enforcement officials belonging to the movement of Fethullah Gulen, an Muslim preacher who was previously allied with the ruling AK party. Many of those transferred were moved from specialist positions in departments such as organised crime and intelligence to posts within the traffic police. Hurriyet, the newspaper, said that 1700 police officers have been transferred in the cities of Istanbul, Ankara and Izmir alone since the first corruption arrests were made on December 17. On Tuesday night the AK party proposed in legislation to parliament to make changes to the country’s high council of judges and prosecutors, a body which has differed with Mr Erdogan over the crisis. Turkish media also reported big shifts of personnel in the finance and education ministries on Tuesday. But, in a sign of the challenges facing the government as it seeks to establish control over the police force, law enforcement authorities carried out a series of arrests in Izmir on Tuesday morning as part of a probe into possible corruption at the state railway authority. Binali Yildirim, the AK party mayoral candidate for Izmir in March elections, suggested the timing of the arrests was politically suspect, and two police chiefs involved in the operation were removed later in the day. "The government is panicking," said Kadri Gursel, a Turkish columnist. "Because they don’t have time to thoroughly investigate where the Gulenists are or who are the real Gulenists, they are emptying the police force wholesale. It is a battle that no one is winning. Everyone is losing – losing legitimacy." In a further sign of the difficulties facing Mr Erdogan’s administration, prosecutors late last week managed to enforce a court order freezing the assets of seven businessmen close to the government as part of the broader corruption probe, even though the changes to the country’s police force and the prosecution service have effectively prevented investigators from carrying out searches of suspects’ houses or from calling them in for questioning. The businessmen themselves, several of whom are seeking financing for plans to build and operate a huge new airport for Istanbul, have denounced allegations against them – which have not been formally served – as baseless. Meanwhile, Mr Erdogan himself has shown no appetite for compromise, declaring his goal of defeating what he terms a "judicial coup". Over the weekend, the prime minister revealed that Mr Gulen had sent a letter that appeared to plead for an end to hostilities – but Mr Erdogan appeared to reject it. In the letter, written on December 22, Mr Gulen suggested a truce in return for an end to the public campaign against his movement: "If media broadcasts that can be seen as black propaganda are stopped, I believe my friends will also prefer serenity," he was reported as saying by the Turkish press.

(BFW) Software M&A Likely to ‘Come Back Stronger’ in 2014: UBS

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Software M&A Likely to ‘Come Back Stronger’ in 2014: UBS 2014-01-07 14:34:39.533 GMT

By Beth Mellor Jan. 7 (Bloomberg) -- Software sector M&A likely to pick up in 2014, with size and volume of deals likely to increase, UBS analysts led by Brent Thill say. * Pent-up demand for deals to help accelerate innovation in key areas (cloud/SaaS, security, Big Data, social and mobile); large multiples becoming less of a deal breaker * Likely targets include Jive, Qlik (potential interest from SAP, Oracle, IBM), Guidewire (possible interest from ORCL, SAP), Marin Software (Salesforce.com, IBM, ORCL) * In same report, UBS upgrades Splunk and Workday to buy from neutral; cuts Check Point Software to neutral from buy * NOTE: Dec. 3, FBR said expects “very active” software M&A in 2014 * NOTE: Earlier, Microsoft to acquire cloud-based customer engagement solution co. Parature; Oracle to buy SDN provider Corente; yday, Palo Alto acquired antihacking co. Morta Security

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--Editor: Beth Mellor

To contact the reporter on this story: Beth Mellor in New York at +1-212-617-3078 or bmellor@bloomberg.net

To contact the editor responsible for this story: Joanna Ossinger at +1-212-617-7789 or jossinger@bloomberg.net

(UBS) Technical Outlook for 2014....Have a look, really interesting...

* The S&P-500 trades in one of the longest cyclical bull markets since 2009. The US market is overbought on all
time frames, in our indictor work we have non confirmations forming on all time frames, the market sentiment is
hitting historical extreme levels, the selectivity is increasing and in the outperformer markets/themes we see
charts taking a more and more parabolic shape. All this we see as evidence that the US market is on the way into
an important top in 2014, which from a cyclical perspective we expect to be a 7-year cycle peak, and which
should be the basis for a first cyclical bear market as part of a new secular bull market.
* Tactically, after the anticipated mid December buying opportunity we have been looking for another rally into a
late December/early January top. After having reached our 1850 target, we have now the missing divergences
forming in our daily trend work, which together with the non confirmations on the upper time frame and our
sentiment work at extreme levels gives us conviction that the SPX is on the way into our anticipated early Q1
tactical top. From a cyclical perspective we expect a corrective set back of 5% to 10% into a late January/early
February bottom as the next significant tactical buying opportunity. Looking at our cyclical model and taking into
account market patterns we see the most likely timing for a major market top in later Q2 and/or a deeper summer
top (June) followed by a several months lasting distribution before starting the real correction into later 2014 and
into H1 2015 as our preferred timing for an important market bottom.
* From a price perspective we expect the SPX pulling back to 1730 into a late Q1 low followed by a final rally
towards a 1920 -1970 target zone for a final top into summer. In a potential cyclical bear market into H1 2015 we
see the risk of a 20% to 30% correction, which should send the SPX minimum down to 1570, which is the last
major breakout level in the SPX.
* Small and mid caps are record high overbought and the investor optimism about small and mid caps is extreme in
the US and in Europe. From a style cycle perspective we expect small and mid caps to start underperforming in
H1, which suggests to see a negative surprise in small and mid caps this year, whereas large caps should
outperform, which leaves the door open to still see the one or other overshooting particularly in the hype themes
such as technology, which we expect to move into a big top in 2014.

(BFW) Bafin Slams Deutsche Bank for Monte Paschi Accounting, Welt Says

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Bafin Slams Deutsche Bank for Monte Paschi Accounting, Welt Says 2014-01-07 14:03:14.515 GMT

By Nicholas Comfort Jan. 7 (Bloomberg) -- Deutsche Bank incorrectly accounted for derivative transaction with Monte dei Paschi, Welt reports, citing letter regulator sent to bank in November. * Bafin official Frauke Menke writes in letter that Deutsche Bank providing false information to Bafin and other authorities is unacceptable, German newspaper reports * Errors made due to inefficient communication between departments at co. and were later corrected, Welt says * Inadequate investigation of matter gives impression Deutsche Bank doesn’t take its announced cultural change seriously, Welt cites Menke as saying * Sven Gebauer, spokesman for Bafin, declined to comment on details of Welt report * Regina Schueller, a spokeswoman for Deutsche Bank, also declined comment on the report. “We cooperate with regulatory authorities and, together with them, seek to investigate questions thoroughly and promptly,” she says in e-mailed response to Bloomberg questions * NOTE Dec. 20: Deutsche Bank forfeits EU221m to end a derivative contract with Monte dei Paschi * NOTE Aug. 9: German regulators said to review how banks made loans that didn’t appear on their balance sheets, obscuring the risk

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To contact the reporter on this story: Nicholas Comfort in Frankfurt at +49-69-92041-213 or ncomfort1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at +33-1-5365-5063 or fconnelly@bloomberg.net

>>> Fed's Rosengren (dove, FOMC voter): Fed is missing both of its mandates by l


Fed's Rosengren (dove, FOMC voter): Fed is missing both of its mandates by large margins, monetary policy must remain highly accomodative, exit from stimulus should be very gradual
- US economy to grow around 3% in 2014. US economy is far from where it needs to be.
- Very low inflation warrants patience with Fed policy, low inflation may mean that rates are too high.
- Discouraged workers are partly to blame for lower unemployment rate.
- Full employment in the US is around 5.25%.
- There are significant costs that come with slow recovery.