>>> US Close Dow-0,81% S&P -1,13% Nasdaq -1,40%

Closing Summary: Russell 2000 Leads Stocks Lower Again

Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.

There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups finished above their respective lows.

Top-weighted financial (-1.5%) and health care (-1.6%) sectors trailed throughout the session, which emboldened sellers and prevented dip-buyers from turning the tide. Interestingly, the largest S&P 500 sector, technology, outperformed with a loss of 0.9% even as the tech-heavy Nasdaq (-1.4%) lagged.

The outperformance of the tech sector was largely due to big gains in the shares of MasterCard (MA 790.57, +26.96) and Visa (V 205.66, +6.23). The pair posted respective gains of 3.5% and 3.1% after MasterCard announced a 10-1 stock split, increased its quarterly dividend by 83.0%, and announced a new share repurchase program in the amount of $3.50 billion. Furthermore, Visa's strength contributed to outperformance of the price-weighted Dow Jones Industrial Average (-0.8%).

Even though the Dow outperformed, only five index components finished in positive territory and Visa was the only listing that added more than 1.0%. Other advancers included Coca-Cola (KO 40.13, +0.28) and Procter & Gamble (PG 84.02, +0.37) while the broader consumer staples sector eked out a gain of 0.2%.

Finding shades of green in other areas proved particularly difficult today as bonds and commodities sold off. The 10-yr note fell 10 ticks, sending its yield higher by four basis points to 2.84%. Crude oil (-1.1% to $97.40) and gold futures (-0.7% to $1252.50/ozt) also retreated while copper bucked the trend, climbing 0.6% to $3.286/pound.

With stocks ending on their lows, the CBOE Volatility Index (VIX 15.36, +1.45) finished at its highest level since mid-October.

Participation was right in-line with average as just over 725 million shares changed hands on the floor of the New York Stock Exchange.

Among news of note, negotiators in Washington secured a two-year budget agreement that aims to reduce sequester cuts by $63 billion and lower the deficit by roughly $20 billion. The deal has yet to receive full Congressional approval with votes in the House and the Senate expected to take place next week.

The weekly MBA Mortgage Index ticked up 1.0% following last week's 12.8% fall.

Separately, the Treasury budget deficit declined to $135.20 billion in November from $172.10 billion in November 2012. Since the data are not seasonally adjusted, the November deficit cannot be compared to the decline in October. consensus expected the budget deficit to fall to $140.00 billion.

The Congressional Budget Office released their budget preview earlier in the week and predicted a shortfall of $140 billion. The market was well aware of the CBO's forecast, therefore the reaction to the budget data was limited.

Tomorrow, weekly initial claims, November Retail Sales, and November export prices ex-agriculture and import prices ex-oil will all be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of the October Business Inventories report. • Nasdaq +32.6% YTD • Russell 2000 +29.7% YTD • S&P 500 +25.0% YTD • DJIA +20.9% YTD

(BFW) Ulysse Nardin Sees 2013 Sales Rising Less Than 10%, Temps Says

--> could be seen as negative for luxury sector watch SWATCH (UHR VX)

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Ulysse Nardin Sees 2013 Sales Rising Less Than 10%, Temps Says 2013-12-12 07:47:45.312 GMT

By Thomas Mulier Dec. 12 (Bloomberg) -- CEO Patrik Hoffmann “cautiously optimistic” and expects “single-digit” percentage gain in sales this yr, Le Temps reports. * Watchmaker exceeded targets this yr, Hoffmann tells Temps in interview * “We’re satisfied, even if the situation has become more complicated. Everything has become harder” * Co. has 460 employees, boosted staff 10% in 2013 * Nardin, which depends on Swatch ETA components for 40% of production, plans to reach total independence as it makes more mechanisms * 25% of sales from Americas, 25% in Europe and Mideast, 25% from Asia and 25% from Russia and former Soviet republics * Brand makes about 25,000 watches a year, sold for CHF7,000 and up, and has capacity to produce about 30,000 * Annual sales exceed CHF200m, analysts estimate: closely held co. doesn’t report figures: Temps

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

To contact the reporter on this story: Thomas Mulier in Geneva at +41-22-317-9201 or tmulier@bloomberg.net

To contact the editor responsible for this story: David Risser at +44-20-7673-2513 or drisser@bloomberg.net

FT : Hedge holdings soar despite returns trailing behind equities

Hedge holdings soar despite returns trailing behind equities

Hedge fund managers are attracting billions of dollars of fresh investments and launching new vehicles, even though their performance has fallen behind roaring equity markets this year.
Interest in hedge funds among institutional investors, particularly pension funds, has increased as equity market valuations have risen sharply and bond market returns are threatened by future interest rate rises.

Hedge funds have brought in $360bn this year through investment profits and inflows from investors, an increase of 15.7 per cent on their assets under management since the end of 2012, according to figures from the data provider Preqin.
The growth comes as investors lower their expectations of returns from hedge funds but continue to view them as a way of diversifying their portfolio away from bonds and equities.
As a result, hedge fund managers are positioning themselves for another bullish year in 2014. A quarter are planning to launch new funds next year, and an overwhelming majority expect further inflows from wealthy individuals and institutional investors, according to Preqin’s survey of fund managers and investors.
“We are seeing a shift in how investors view hedge funds,” said Amy Bensted, head of hedge funds at Preqin. “Pre-2008, investors thought of them – and hedge funds marketed themselves – as a source of additional returns.
“Now, they are not seen just being for humungous, 20 per cent-plus returns, but for smaller, stable returns over many years.”
The data, which will be published in Preqin’s 2014 Global Hedge Fund Report in January, shows hedge funds’ assets have risen to almost $2.7tn this year, with growth coming almost exclusively in North America.
The increase includes investor inflows of about 5 per cent of the $2.3tn in assets under management at the end of 2012, with a further 10-11 per cent from investment returns.
Those returns compare poorly to the returns on offer from equities. The FTSE All-World Index has risen 17 per cent this year, and the US S&P 500 is up 27 per cent. The Barclays Aggregate, however, which measures the global bond market, has returned minus 2 per cent this year.
The forthcoming survey also reveals that the proportion of total industry assets coming from institutional investors is the highest it has ever been, at 66 per cent, up from 63 per cent last year.
While hedge funds were once the preserve of wealthy investors, a wave of money from corporate and public pension funds has forced managers to install an increasingly expensive compliance and reporting infrastructure.
Fund managers are also increasingly offering bespoke investment options for institutional clients, including individually managed accounts and mutual funds.
“Investors feel more secure allocating to hedge funds,” Ms Bensted said. “You now have more options as an investor, not just offshore co-mingled accounts, you have your pick of how to get access to these funds.”

(BFW) Edenred Estimates Cut at Goldman on Latam FX, Lowers to Neutral

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Edenred Estimates Cut at Goldman on Latam FX, Lowers to Neutral 2013-12-12 07:41:10.958 GMT

By Heather Burke Dec. 12 (Bloomberg) -- Edenred’s Latam exposure may boost organic growth, be largely offset by FX depreciation, Goldman says, cuts to neutral from buy. * Cuts 2014 EPS est. by 8%, 2015 by 16%, 2016 by 22%, mostly due to Goldman’s Latam economists’ FX estimates for Brazil, Venezuela * PT lowered to EU25.70 from EU27.50 (implies ~2% upside to yday close) * Organic issue vol. growth may rise 12.5%/yr 2014-2017 * NOTE: Latin America & Caribbean comprised ~49% of total 2012 rev., ~63% operating income: Bloomberg data * Stock up ~8.2% YTD vs SBF250 up 14% * NOTE Nov. 12: Edenred Raises Low End of Issue Vol. Organic Growth Target

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

To contact the reporter on this story: Heather Burke in London at +44-20-7673-2044 or hburke2@bloomberg.net

To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

>>> What to look at today

US Market closed on their lows...3rd day in a row...Russel -3.6% MTD for December...see some borader profit taking all across sectors...VIX @ 15.36 +10.4%...Facebook +5.3% after hours after news of joining SP 500...Asia still weak following Us Markets and more noise of Tapering in December...Nikkei -1.12% Shanghai-0.06%...

Eur$ 1.3796 S&P Fut -0.07% European fut -0.48%

>>> Keep an eye on :
- ITALY : Italy Plans to Sell 30-40% of Post Office to Mkt in 2014: Sole
- AKZA NA : Akzo Nobel to Sell 67 of 72 German Decorative Paints Stores
- AZN NA : Bristol, AstraZeneca Win FDA Panel’s Backing for Metreleptin
- BAF GY : Co. posts EU4.1m FY13 Ebitda after loss; proposes special div. of EU1.50/shr, indicated 20% higher
- BDT GY : Bertrandt FY13 Sales Rise 10%; Div. Plan Matches BDVD Forecast
- BRY LN : Brady Exploration Ends Deal Talks With Energy Equity Resources
- CLS1 GY : Celesio Says EU23/Shr Offer Is Fair, Reasonable
- DAI GY : Pischetsrieder to Join Daimler Supervisory Board: Handelsblatt
- DIE BB : D’Ieteren to Buy Beerens VW Concessions in Belgium, De Tijd Says
- FUM1V FH : *FORTUM SELLS ELECTRICITY DISTRIBUTION BUSINESS FOR EU2.55 BLN
- GENP FP : Stallergenes Oralair Gets FDA Advisory Committee Support
- GOG LN : Go-Ahead Sees FY Forecast ‘Slightly’ Ahead of Plan
- GSZ FP : GDF Suez Plans to Sell U.S. LNG in Asia in 2017, Nikkei Says
- HEIA NA : Heineken Offers to Buy UB Group Stake in United Breweries: CNBC
- MOSB LN : Moss Bros Trading In Line With Market Ests.; Margins Fall
- ORP FP : Orpea Shares Offered at EU40.34 to Market in Placing, Terms Show
- UG FP : *PEUGEOT-GM CUT SAVINGS TARGET TO $1.2B BY 2018 FROM $2B
- UG FP : Peugeot Confirms It’s Studying Capital Increase, Partnerships ( Reuters talking of 3.5bi,)
- ROG VX : Roche, Prothena to Collaborate on Parkinson’s Treatment
- RMG LN : Royal Mail, Ashtead Group to Join FTSE 100 Index
- SAN FP : Sanofi Gets EMA Approval for Broadline Cat Parasite Treatment
- SGP LN : SuperGroup 1H Underlying Pretax In Line With Ests.
- TLSN SS : TeliaSonera CEO Sees Continued Consolidation, DI Reports
- FP FP : *TOTAL SIGNS ACCORD FOR OFFSHORE OIL EXPLORATION IN OMAN
- VOD LN :Verizon Agrees to Settle Suit Over Vodafone Stake Purchase
- WOL AV : Wolford Issues Profit Warning After 1H Loss Widens
- WOOD LN : Wood Group Says On Track for 2013 Ebita Growth Target 10%-15%
- WPP LN : WPP Buys Majority Stake in Social Marketing Agency Social Lab

>>> Brokers Upgrades & Downgrades

>>> Up
*ANSALDO RAISED TO OUTPERFORM VS NEUTRAL AT MEDIOBANCA
*BASHNEFT RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*CREDIT SUISSE RAISED TO BUY VS HOLD AT HELVEA/BAADER BANK
*EFG INTL RAISED TO BUY VS HOLD AT HELVEA/BAADER BANK
*ERICSSON RAISED TO BUY VS SELL AT SOCIETE GENERALE
*IMAGINATION RAISED TO NEUTRAL VS SELL AT UBS
*TATNEFT RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*TRYG RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*WALLENSTAM RAISED TO NEUTRAL VS REDUCE AT SWEDBANK

>>> Down
*AFFINE CUT TO HOLD VS BUY AT KEPLER CHEUVREUX
*EDENRED CUT TO NEUTRAL VS BUY AT GOLDMAN
*LECTRA CUT TO HOLD VS BUY AT SOCGEN
*NOKIA CUT TO HOLD VS BUY AT SOCIETE GENERALE


>>> PT Change
*ERG PT Raised to EU11 vs EU10 at Kepler Cheuvreux
*Inditex PT Raised to EU124 vs EU119 at Raymond James

>>> Initiation
*ALLIANZ RATED BUY AT COMMERZBANK, PT EU150; WAS UNDER REVIEW
*ARM RATED NEW OUTPERFORM AT FBR
*BLUE SOLUTIONS RATED NEW NEUTRAL AT HSBC
*DIXONS RETAIL REINITIATED BUY AT INVESTEC, PT 60P
*UMICORE RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT EU32


>>> Country Sector Stock Call
*LOGITECH ADDED TO EXANE’S TACTICAL SMALL & MID CAP LIST

*EU Banks Need to Deliver EPS Upgrades by 2Q14: Mediobanca

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: AVNR -18.4% (also announced that PRIME, its phase II clinical trial of the investigational drug AVP-923 (dextromethorphan / quinidine) for the treatment of central neuropathic pain in patients with multiple sclerosis did not meet the primary efficacy endpoint), CENT -9.4% (light volume), LH -6.7%, JOY -4.4%, MIND -2.8% (light volume),COST -2.5%, CNI -1.1%, HRB -1%.

Select metals/mining stocks trading lower: AU -3.2%, GOLD -2%, BHP -0.9%, GDX -0.6%, SLV -0.5%, VALE -0.5%, BBL -0.4%, GLD -0.3%.

Other news: GEVO -20.5% (announces proposed public offerings of common stock, convertible senior notes and warrants), ALSN -5% ( announces sale of 12.5 mln shares of common stock by selling stockholders), AWAY -3.5% (announces intention to file registration statement for public offering of common stock: HomeAway to offer 5.5 mln, selling stockholders to offer 518,630; Bloomberg discusses that AWAY may be a possible takeover target by Priceline (PCLN) or other travel cos ), EJ -3.3% (announces proposed offering of $180 mln convertible senior notes), TTM -2.8% (still checking), RBS -2.4% (confirms Bostock to resign as Group Finance Director), IEP -1.7% (mentioned cautiously in Barron's), CHL -1.6% (still checking), TRLA -1.5% (intends to offer $150 million aggregate principal amount of its convertible senior notes due 2020), DGX -1.5% (following LH results), POST -0.4% (announces pricing of convertible preferred stock), TA -0.4% (prices public offering of 6.5 mln common shares at $9.25 per share), GSK -0.4% ( to invest GBP 200 mln into UK manufacturing, according to reports ), CAT -0.3% (following JOY results), .

Analyst comments: BBRY -3.2% (assumed with Sell from Neutral at Citigroup), BRCD -1% (initiated with a Sell at Citigroup ), CSCO -0.8% (initiated with a Sell at Citigroup)

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: MLNK +12%, VIMC +10%, (receives large order for a SVAC Solution Deployment in Baoding City, Hebei Province), BLIN +9.1%, PPHM +7.9%, SWHC +5.9%, PLAB +4.8%, URBN +3.5%, ( discloses thus far Q4 comparable retail segment net sales are mid single-digit positive), PDLI +1.5%, .

M&A news: SNI +12.6% (Variety report suggesting Discovery (DISCA) bid), VPHM +0.4% (Hart-Scott-Rodino waiting period expires for Shire's (SHPG) acquisition of ViroPharma ), .

Select solar names showing strength: SPWR +0.6% (Total, SunPower (SPWR) and Etrion secure financing with OPIC 70MWp Salvador Solar Project in Chile), TSL +0.6% (announces appointment of new CFO ), JASO +0.6% (announces Mr. Herman Zhao has been appointed the co's new chief financial officer ), .

Other news: CYTR +29.7% (reports highly statistically significant positive results from its Global Phase 2b Clinical Trial), ECTE +22.9% ( announces strategic partnership with Medical Technologies Innovation Asia), BGMD +15.7% (continued strength), NSTG +11.7% (announces adoption of the Prosigna Breast Cancer Assay by leading US clinical laboratories and cancer centers), NRF+10.7% (announces plan to spin-off Asset Management Business into a separate publicly traded company in a tax-free transaction), SPPI +10.2% (presents 'encouraging' FOLOTYN and MARQIBO clinical data), RNN +6.3% (Receives Method Patent for Treatment of Solid Tumor Cancers for Supinoxin), BLDP +4.9% (to supply ElectraGen-ME fuel cell systems for a polot project in Idea Cellular's India telecom network), CGEN +4.6% (Compugen discloses discovery of five potential cancer targets for antibody drug conjugate therapy), MA +4% ( announces capital actions: 10-for-1 split, 83% increase in quarterly dividend, $3.5 bln share repurchase program), ARIA +3.6% (still checking), ALU +3.3% (BlackRock discloses new 10%+ passive positions in 13G; upgraded to Buy from Neutral at Citigroup), QCOR +3.2% (made open market purchases during Q4 of ~500,000 shares of Questcor common stock through Dec 10; the shares were purchased at an average price of $57.21 per share), SNE +2.2% (music licensing deal in India, according to reports), CBI +1.8% (awarded contract for LNG Liquefaction terminal), PLUG +1.6% (continued strength), MCP +1.2% ( announces new Board appointments: Constantine Karayannopoulos to be Board Chair), RGR +1% (following SWHC results), SSNI +1% (Waddell & Reed disclosed 12.3% passive stake in 13G filing out last night after the close), CAM +0.8% ( approves $750 mln increase in share repurchase authorization ), FNSR +0.6% (prices $225 mln of 0.50% of Convertible Senior Notes due 2033; offering was increased by $25 mln), CBOE +0.5% ( declares special cash dividend of $0.50 per share; increases stock repurchase authorization by $100 mln), GM +0.5% (to halt Australia production by 2017), COG +0.5% (Barron's profiles positive view on Cabot Oil & Gas), YNDX +0.2% (announces proposed offering of $600 mln Convertible Senior Notes and a 3 mln share Increase in the Company's Open Market Share Repurchase Plan).

Analyst comments: GRPN +2.6% (upgraded to Outperform from Market Perform at Wells Fargo), EOPN +2.1% (initiated with a Buy at Janney ), XONE +1.8% (initiated with a Buy at Jefferies), RVBD +1.3% (initiated with a Buy at Citigroup), QCOM +1% (assumed with a Buy from a Neutral at Citigroup), VJET +1% (initiated with a Hold at Jefferies; tgt $40), FE +1% (FirstEnergy upgraded to Neutral from Sell at Goldman), FFIV +0.7% (initiated with a Buy at Citigroup ), ARCW +0.7% (initiated with a Buy at Brean Capital), DDD +0.5% and SSYS +0.4% (initiated with a Buy at Jefferies), MMM +0.4% (upgraded to Buy from Neutral at Nomura)