U.S. Stocks, Japan ETF Drop, Yen Up as Earthquake Shakes Tokyo

April 07, 2011, 3:25 PM EDT

By Michael P. Regan and Inyoung Hwang

April 7 (Bloomberg) -- Stocks fell, pulling the Dow Jones Industrial Average down from an almost three-year high, equity futures slid in Tokyo and the yen rose as another earthquake shook Japan. Oil topped $110 a barrel and commodity indexes rose to the highest levels since 2008.

The Dow slipped 29.06 points, or 0.2 percent, to 12,397.69 at 3:20 p.m. in New York and the Standard & Poor?s 500 Index dropped 0.2 percent. The iShares MSCI Japan Index Fund, an exchange-traded security tracking the nation?s equities, lost 0.7 percent, paring a drop of as much as 1.7 percent after Japan canceled a tsunami warning. Ten-year Treasury note yields were little changed at 3.55 percent after rising earlier. The yen strengthened against 15 of 16 major counterparts.

Equities turned lower after a magnitude-7.1 aftershock, one of the strongest since the devastating earthquake March 11, struck Japan today 215 miles (345 kilometers) northeast of Tokyo. At least three nuclear facilities lost some outside power. Stocks also retreated amid growing concern an impasse over the federal budget may lead to a shutdown of the U.S. government.

?Investor pysches are a little fragile,? said James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, which oversees $108 billion. ?It?s not surprising investors stepped to the sideline until they could find out whether this new earthquake would cause significant damage,? he said. ?We?re working through the issues on the budget deal. That?s not a significant negative, but we?d probably like to see that resolved without a shutdown.?

Japan Futures

Nikkei 225 Stock Average futures expiring in June were at 9,505 in Chicago, down 0.9 percent from the closing level of 9,595 in Singapore. The Chicago contracts slid as low as 9,420. The Japanese currency appreciated more than 0.8 percent versus the New Zealand dollar and Swedish krona, the biggest gains among 16 major peers, as the earthquake caused investors to seek a haven in the currency and unwind risky bets financed with borrowed yen.

Cisco Systems Inc., Alcoa Inc. and General Electric Co. lost at least 1.1 percent to lead the Dow?s drop after the earthquake. The cost to protect Cisco?s debt climbed as Chief Executive John Chambers reiterated that the largest maker of networking equipment needs to make a ?major change? to rectify mistakes. Credit-default swaps on the company?s debt rose 3.4 basis points to 65.9 basis points as of 10:53 a.m. in New York, the highest since Aug. 31, according to data provider CMA.

The Markit CDX North America Investment Grade Index , which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, increased 1 basis point to a mid- price of 93.8 basis points, according to index administrator Markit Group Ltd.

Shutdown Concern

The U.S. House approved a stopgap spending bill to keep the government open through next week, although President Barack Obama said he would veto the measure and a shutdown still looms.

A failure by Congress to extend the government?s spending authority, which expires tomorrow, would force the closure of national parks, monuments and museums. Federal agencies -- such as the National Labor Relations Board -- that don?t protect lives, property or national security also would be shuttered.

Earlier gains in U.S. stocks came after improving retail sales and a drop in jobless claims bolstered optimism in the economy.

Bed Bath & Beyond Inc. surged 11 percent after the home furnishings retailer forecast earnings that beat analysts? estimates. Costco Wholesale Corp. climbed 3.7 percent as comparable-store sales at the largest U.S. warehouse club increased at almost twice the forecast rate. Newmont Mining Corp. rose 2.8 percent on plans to increase gold output and link its dividend to the price of the metal.

Jobless Claims

Applications for jobless benefits fell 10,000 in the week ended April 2 to 382,000, the fewest since Feb. 26, Labor Department figures showed today. Economists projected claims would be little changed at 385,000, according to the median estimate in a Bloomberg News survey.

The euro slid against 14 of its 16 most-traded peers after the European Central Bank increased its benchmark rate to 1.25 percent from a record low of 1 percent, in line with the prediction by all 57 economists in a Bloomberg survey. The shared currency weakened from its strongest level in more than a year versus the dollar, slipping 0.2 percent to $1.4300, after ECB President Jean-Claude Trichet said today?s increase wasn?t necessarily the ?first of a series.?

?Hint of Irony?

The ECB increased its key interest rate today for the first time since 2008 even as Portugal aimed for a bailout that may be worth as much as 75 billion euros ($107 billion), two European officials with knowledge of the situation said. Record- high borrowing costs made the nation the third in the euro region to seek a rescue package.

?There is more than a hint of irony that Portugal has been forced to ask for a bailout on the day that the ECB is expected to hike interest rates,? Jane Foley, a senior foreign-exchange strategist at Rabobank International in London, wrote in a report before the ECB?s decision. ?While it can be argued that a 25 basis-point hike will not make an enormous difference for funding costs in the region, the peripheral crisis does underline the question mark over how high the ECB can push interest rates over the next year or so.?

European Stocks

The Stoxx Europe 600 Index erased earlier gains after the earthquake, ending the session down 0.3 percent. Hochtief AG tumbled 7.9 percent after Germany?s biggest builder warned of losses at its Australian unit. Bayerische Motoren Werke AG led auto-industry shares lower. Banks limited the selloff after Portugal sought an EU bailout.

Banco Espirito Santo SA and Banco Comercial Portugues SA, Portugal?s biggest publicly traded lenders, climbed more than 4 percent each. The yield on the government?s 10-year bond rose six basis points to 8.60 percent after LCH Clearnet Ltd. said it will impose an extra 15 percent deposit charge for clients holding ?long? positions, or bets on gains, in Portuguese debt.

The MSCI Emerging Markets Index was little changed near its highest level since June 2008, after a seven-day, 5.7 percent gain. Russia?s Micex Index retreated 0.8 percent from the highest in almost three years. Egypt?s benchmark gauge lost 0.9 percent

Crude rose as much as 1.5 percent to trade above $110 a barrel for the first time in 30 months as a fire burned at Libya?s Sarir field, bolstering concern that unrest in North Africa and the Middle East will spread, curbing shipments.

Coffee and nickel also advanced more than 1.3 percent to lead the Thomson Reuters/Jefferies CRB index of commodities to the highest level since September 2008.

--With assistance from Mark Shenk and Lu Wang in New York, Greg Chang in San Francisco, James Rowley in Washington, Brian K. Sullivan in Boston and Stephen Kirkland in London. Editors: Michael P. Regan, Chris Nagi

To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net. Inyoung Hwang in New York at ihwang7@bloomberg.net;

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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Berkshire Hathaway's Dave Sokol resigns

Dave Sokol, who ran several of Berkshire's businesses, including Mid-American Energy, resigned from Berkshire on Monday. In a statement announcing the departure late Wednesday, Mr Buffett revealed that Mr Sokol purchased shares in chemicals maker Lubrizol shortly before he recommended to Mr Buffett that Berkshire invest in the company. In the middle of March, Berkshire announced the $9bn (�5.6bn) takeover of Lubrizol.

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The Budget's message: get saving now

He said some reforms proposed by the Budget ? such as a simplified flat-rate pension ? could help encourage such habits.

Fortunately, the Budget also created saving and investment opportunities to help consumers achieve these goals and build short-term and long-term savings. The question now is whether cautious savers, or more gung-ho investors, should take advantage of some of these schemes.

INDEX-LINKED SAVINGS CERTIFICATES

Although it wasn't mentioned in the Budget speech, many savers will be cheered by National Savings & Investments relaunching its popular Index-Linked certificates this year. These products were hugely popular with investors last year, as inflation started to creep up again, but were withdrawn last summer.

These five or three-year savings plans guarantee to pay a rate at least equal to inflation, as measured by the retail price index ? so savers know they can get risk-free real returns on their money. (NS & I is backed by the Government, so people know that, provided the country does not go bankrupt, their money is safe.)

Given that George Osborne said in his Budget that inflation is likely to remain at its current level for the rest of the year, and could indeed still increase slightly e_SEnD this announcement will provide relief for many savers, particularly pensioners who can't afford to risk their capital and often use the interest they receive on savings to supplement a pension.

According to Moneyfacts, the financial data provider, there are just eight savings accounts that allow savers to get a better return than the consumer price index, the Government's preferred measure of inflation, currently running at 4.4pc. But these accounts are all Isas, so the amounts that can be saved each year are limited (�5,100) and all require customers to lock money away for at least four years.

NS & I hasn't given a date when savings certificates will be available again. Demand is likely to be high and they could sell out quickly.

ISA AND PENSION INVESTMENTS

Mr Osborne said the main aim of this Budget was to kick-start the economy and help the private sector grow. One of the main tools for doing this was an unexpected cut to corporation tax, which will fall from 28pc to 26pc in April. He said that over the long term this will be reduced to just 23pc ? giving Britain one of the lowest rates of corporation tax.

But this isn't just good news for British businesses looking to cut costs and boost profits. It could also help many investors, who own a small slice of these corporations through pensions and Isas.

Ben Yearsley, an investment manager of Hargreaves Lansdown, said: "This announcement has got to be good news for companies and great news for UK investors."

He said it should help boost dividend payments as these are paid out of after-tax profits. A cut in this tax should mean there is more money to pay dividends, he said, which is good news for the thousands of investors who buy popular equity income funds. (This assumes that companies pass on the spoils of this tax cut with their shareholders.)

He added: "Whether you're investing in big blue chips or smaller companies, this Budget is good news for investors who buy British."

SOPHISTICATED INVESTORS

Mr Osborne announced a significant overhaul to the enterprise investment scheme. People investing in this scheme ? which plugs money directly into start-up business ? will be able to claim 30pc tax relief on contributions up to �1m.

Previously only 20pc tax relief was available on investments of �500,000. Given that these schemes also allow people to defer capital gains, and after two years any investment is free of IHT, it isn't hard to see the attraction for wealthier investors.

The downside is that these can be highly illiquid investments ? with no guarantee of when you can withdraw your money.

Find the top-selling ISAs and get 0% commission when you order online at Telegraph ISA-fund Supermarket.

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Three Key Trends for Women's Clothing Retailer Ann Taylor

The online sales of adult apparel in the U.S. grew almost 10% in 2010, far outstripping the 1.9% growth in the overall apparel market, according to research firm NPD's February 2011 report on the US apparel market. This is great news for Ann Inc. (formerly Ann Taylor Stores Corp.) as well as retailers Aeropostale, American Eagle Outfitters, J.Crew Group, and Limited Brands.

We currently have a $28.46 Trefis price estimate for Ann Taylor, which is about in line with the current market price. Below are the 3 key trends that we believe have significant implications to ANN's business.

Online Apparel Retail Growing at Double Digit Rate

Ann Taylor witnessed tremendous growth in its online channel with sales for both Ann Taylor and LOFT e-commerce increasing by more than 50%. Identifying the increasing significance of its online channel and the tremendous growth potential it offers, Ann has planned a significant investment of $25 million in its online channel for 2011 and expects to derive an increasing share of its sales from the e-commerce channel.

We believe, Ann Taylor's e-commerce revenues will continue to increase at a double digit rate of 15% going forward. You can drag the chart above to see the impact of different e-commerce sales growth scenarios on ANN's stock.

Saturation of Women's Apparel Market in the U.S.

The women's apparel market in the U.S. is mature and has historically witnessed a low but stable growth rate of just over 2% annually. However, after a decline of 5% in 2009 during the recession, women have once again led the way in the fashion apparel market increasing women's apparel sales by close to 3% in 2010.

However as both of Ann's primary brands approach market saturation, ANN has been working on new outlets for its products like factory stores and online stores and newer fashion styles in order to keep growth from stalling.

As a result, we estimate that Ann Taylor's revenue per square foot will slow in the future keeping in line with the overall growth in the women's apparel market in the U.S.

Increasing Competition from Department Stores & Specialty Retailers

The women's apparel retail industry is highly competitive, with the number of players increasing year after year. While ANN has made progress by upgrading its Ann Taylor store and fine-tuning its Loft brand, expanding market share may prove to be difficult as the company faces increasing competition from department stores (Nordstrom, Macy's) and specialty retailers (Chico's FAS, Talbots, Abercrombie & Fitch, Limited Brands, GAP).

See our complete analysis of Ann Taylor.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.

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Stocks fall after another earthquake hits Japan (AP)

NEW YORK ? Stocks fell Thursday after a 7.4-magnitude earthquake struck off the coast of northern Japan. The losses moderated slightly after a tsunami warning was lifted.

The Dow Jones industrial average fell as many as 96 points in morning trading before recovering some of its losses. Japan's stock market had already closed by the time the earthquake struck.

The quake rattled investors, partly since it struck near the same area as the massive earthquake that triggered devastating tsunami on March 11. Stock indexes pared their losses after the impact of the latest quake appeared to be less than initially feared.

The Dow fell 56 points, or 0.4 percent, to 12,367 in afternoon trading. The broader S&P 500 fell 5, or 0.4 percent, to 1,330. The Nasdaq composite index fell 5, or 0.2 percent, to 2,795.

In the U.S., economic news was mostly positive. The Commerce Department said 382,000 people applied for unemployment for the first time last week. That was the third drop in four weeks. The decline in applications suggests layoffs are slowing.

Major retailers also reported better-than-expected sales for March at stores that have been open at least a year. Analysts had predicted declines because of cold weather and higher gas prices.

Costco Wholesale Corp. rose 4 percent after reporting a 13 percent gain in sales. Limited Brands Inc. rose 1 percent after it said its revenue increased 14 percent because of strong sales at its Victoria's Secret stores. Nordstrom Inc. and Macy's Inc. also rose about 1 percent.

Bed Bath & Beyond Inc. rose 11 percent, the most of any stock in the Standard & Poor's 500 index. The home furnishings retailer posted strong results late Wednesday and said it expected earnings to rise 10 percent to 15 percent this year.

Constellation Brands Inc. rose 6 percent. The maker of Robert Mondavi wine and Svedka vodka recovered from a loss in the same quarter a year ago and reported a double-digit increase in wine sales in North America.

KLA-Tencor fell 5 percent, the most out of any company in the S&P 500. The chip manufacturer gets 14 percent of its revenues from Japan.

Netflix, Inc. also fell, dropping 3 percent a day after the home-entertainment company announced its decision to pay nearly $1 million per episode to stream the TV series "Mad Men." Dish Network Corp. emerged as a new competitor after announcing it would buy Blockbuster Inc. out of bankruptcy.

Bond prices rose, sending their yields lower. The yield on the 10-year Treasury note fell to 3.54 percent from 3.55 percent late Wednesday.

The European Central Bank raised its main interest rate by a quarter point to 1.25 percent, a day after Portugal asked for a bailout. The Bank of England kept its main interest rate unchanged at 0.5 percent.

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Berkshire Hathaway's Dave Sokol resigns

Dave Sokol, who ran several of Berkshire's businesses, including Mid-American Energy, resigned from Berkshire on Monday. In a statement announcing the departure late Wednesday, Mr Buffett revealed that Mr Sokol purchased shares in chemicals maker Lubrizol shortly before he recommended to Mr Buffett that Berkshire invest in the company. In the middle of March, Berkshire announced the $9bn (�5.6bn) takeover of Lubrizol.

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European Central Bank raises interest rates for first time in nearly three years despite Portugal bailout

The ECB also raised its deposit rate by 25 basis points to 0.5pc, and increased its marginal lending rate by the same amount to 2pc.

ECB President Jean-Claude Trichet will talk about the reasoning behind the bank's decision at a news conference starting at 1.30pm London time.

Bank of England policymakers held rates despite a surge in inflation. The majority of the Monetary Policy Committee members continue to judge the economic recovery as too shaky to withstand higher rates.

They are betting that inflation of 4.4pc - more than double the target - will ease once oil and food prices come down.

Most economists were expecting the Bank of England to leave rates unchanged. Simon Ward, Henderson's chief economist, was the only one of 67 forecasters polled by Reuters to forecast a rates rise.

Howard Archer of IHS Global Insight said the decision "indicates that serious concerns and uncertainties over the growth outlook deterred the MPC from acting despite the pressure for higher interest rates coming from elevated and still rising consumer price inflation".

The MPC, which sets interest rates, said last month that a rise in oil prices, fanned by tension in the Middle East and North Africa, had increased risks to both inflation and growth.

Three of the nine MPC members voted to raise interest rates last month, but economist says there is little evidence so far that Britain's economy has enjoyed a strong rebound from the shock contraction at the end of 2010.

Economists believe this is needed to convince Mervyn King, the Governor of the Bank of England, and the majority on the MPC that it is time to raise rates.

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Is it time for hotel boom?

The Indian hotel industry is in an upbeat mood. A slew of major international brands are lining up with open wallets and cheque-books, reports CNBC-TV18's Swati Khandelwal Jain.

International hotel giants want to make Indian hospitality their own. And each one of them, from Carlson to Hilton, to Marriot to Starwood, are ready to jump into what is, for them, one of the most important and fastest growing markets in the world.

Hubert Joly, president and CEO, Carlson, said, "India is our top focus, given the size of the country, the economic expansion, the growth of travel and tourism. Today we have 34 hotels in operation. We are going to open 19 hotels this year and we continue to have a goal to have at least 100 hotels in operation by 2015."

Frits Van Paasschen, president and CEO, Starwood Hotels & Resorts, said, "India is our fourth largest market today around the world as a country and the second fastest growing. We had about 25 hotels a year ago and we expect to be close to 50 by the end of next year. So you would be imagining a doubling from 25 to 50 hotels over a three-year period. We believe that there is another doubling from 50 to 100 hotels in the two to three years after that."

Christopher J Nassetta, president and CEO, Hilton Worldwide, said, "From 5 hotels today we plan to have 10 at the end of this year and 15 at the end of next year and 50 plus over the next four or five years."

Simon Copper, president and MD - Asia Pacific, Mariott International, said, "I would say over the next three years we will double our representation in the market."

Not to be left behind, domestic players are also angling for a bigger piece of the pie. Indian Hotels and Oberio feel 2012 will be a better year in terms of growth and margins. With a revenue target of USD 2 billion, India Hotels, for instance, wants to increase room count to 20,000 over the next 5 years.

Raymond Bickson, MD and CEO, Taj Hotels and Resorts Palaces, said, "I think margins are picking up."

Rattan Keshvani, president, Trident, said, "This year we are all looking at about a 15-20% growth in the topline which is going to be a combination of occupancies and rates. I think the occupancies are stable now and because the occupancies are stable we can expect rates to start climbing."

Funding, which was a big problem, is also melting away. Nearly 50% of the projects are now being financed by big private equity players and investment bankers.

Manav Thadni, Chairman, HVS India, said, "This is the first time we have got around 14-15 bankers out here and they are looking to lend to the industry."

The numbers say it all. With investments of USD 10.3 billion, 82,000 new jobs being created and 60,000 rooms to be added over the next five year, clearly makes India a hot spot for both Indian and international hotel majors.

Also read: Room inventory to grow by 600 keys: Hotel Leela

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Consumer Alert: Spring is Used Car Scam Season

Spring is traditionally a busy shopping season for those looking for a new car, but it's also open season on consumers for scammers looking to take unsuspecting victims for a ride, warns a consumer watchdog.

The National Consumers League, a Washington, D.C.-based nonprofit watchdog, says its Fraud Center has reported an increase in complaints about used car scams, and cautions consumers not to fall victim to fraudsters during the upcoming peak car-buying season.

"Scam artists prey on consumers in search of a bargain, and these scams are no exception," John Breyault, Director of the Fraud Center, said in a statement. "Unfortunately, the only person that's getting a steal are the con artists themselves."

The NCL's Fraud Center has been tracking scams and issuing alerts about consumer fraud since 1992. Since January 2011, Fraud Center has received more than 100 complaints from consumers nationwide about used-car ripoffs, with reported losses totaling more than $290,000.

Most used car scams reported to the Fraud Center involve online classified listings on popular sales and auction sites including craigslist, eBay or Yahoo! Autos. These questionable listings often involve late-model luxury brands priced far below their regular market value.

When consumers contact shady sellers, the con artists tell them they aren't local and tell victims payment for the car (which often involves "shipment") must be sent via wire transfer. This in itself is a huge red flag, and as Consumer Ally has repeatedly warned readers, never, ever wire money to someone you don't know.

Used car con artists often pretend to be a members of the armed services as well, and claim they're either deployed or preparing to ship out. This time-tested lie helps build trust, tugs on patriotic heartstrings, and allows fraudsters to insist on swift payment.

"Scam artists are imaginative, and they have tricks aplenty to get a victim to trust them," said Breyault. "However, consumers can protect themselves by recognizing the most common red flags involved in these scams and never, ever rush to buy."

The NCL says consumers can avoid used car scams by being on the lookout for the following red flags:

• The seller asks for payment via wire transfer or bank transfer.
• The car is offered at a price well below common market value (such as Kelley Blue Book value).
• The seller demands urgent payment, since they are or will soon be relocating overseas.
• The seller says that they are located overseas, but have an American middleman or online escrow service that will hold the money until the vehicle is delivered.
• The seller refuses to meet in person or communicate over the phone.
• The seller's email or instant messages contain multiple grammatical or spelling errors.
• The seller claims the transaction is insured by a "protection program" associated with a real site (such as eBay, Google Checkout, PayPal, etc.) or another online payment system.

Victims of used car scams or any other kind of fraud are encouraged to file a complaint with the NCL at www.fraud.org.

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General Motors: We're (Almost) No. 1!

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By any standard, General Motors (NYSE: GM) had a pretty good year in 2010. The company got back on solid financial ground, it got a (we hope) real non-interim CEO, it launched several impressive new products, and it posted solid growth in its two biggest markets.

For Toyota (NYSE: TM), on the other hand, 2010 seemed like a year to forget. The company saw its U.S. sales fall sharply, lagged GM and others in China, faced big challenges in Japan, and suffered through a global PR nightmare and a long list of expensive recalls.

Yet Toyota still led GM in global sales when all was said and done. The company's 30,000-vehicle lead wasn't much in context -- each automaker booked well over 8 million sales -- but it was enough for the Japanese giant to retain the global sales crown for the third straight year.

But if GM couldn't regain the lead when Toyota was down in 2010, does it have a chance in 2011?

Roughly equal shares of the pie
As you might expect, GM's PR folks said the automaker doesn't care whether it's No. 1 or not. And it's true that GM's current management has been at pains to emphasize measures such as profitability over market share and sales totals, a welcome change from the company's sales-at-any-price past.

But sales leadership is still an important symbol, and GM is going to look to take its recovery to the next level in 2011. Although several major new products are still a year or more away, big things are expected from new global marketing chief Joel Ewanick, starting with what is rumored to be a massive ad blitz during this weekend's Super Bowl. �

Certainly, the General's lead in the U.S. seems safe for the moment, with Toyota having dropped to third place behind Ford (NYSE: F) -- something that shows no sign of changing anytime soon. And GM's outsized lead in China seems more likely to be threatened by Volkswagen than by Toyota, which, like rival Honda (NYSE: HMC), is well behind both in the local sales rankings.

But Toyota is the undisputed king of its home market, and its small-car subsidiary Daihatsu has a strong emerging-markets presence of its own, with plants in places such as Indonesia and Venezuela. Auto sales in Japan have slumped recently but are expected to pick up as the year goes on, and Toyota is likely to be the biggest beneficiary.

But really, both of these companies have the same basic problem, and the first one to solve it is likely to be 2011's global sales leader.

It's the product, stupid
Economic cycles rise and fall, and different markets have different strengths and priorities, but ultimately, automakers thrive or dive on the strength of their product line. A company with fresh new products that excite customers will see sales (and usually, profits) go up -- and conversely, a company with a product line that's starting to look a little stale will generally see sales sag.

Ford made a point of investing heavily in new products during the worst of the economic downturn, and it paid off with big sales gains for the Blue Oval during 2010. GM and Toyota, on the other hand, are offering product lines that are starting to look a little dated. A recent report from Edmunds pointed out that many car-shoppers have little product loyalty, shop mainly on features, and will tend to dismiss offerings that lack the latest technology -- a description that applies to much of Toyota's product line, at least in the U.S., as well as several key GM offerings.

As I've noted elsewhere, GM is well on the road to catching up, but the heart of GM's new-product offensive is still a year or two (or three) away. Toyota, on the other hand, has promised 11 new or updated products for the U.S. in 2011 -- and when we look back in a year's time, those new models could turn out to be the difference.

Add GM and Toyota to My Watchlist today to stay on top of all of our Foolish coverage as this global war of giants unfolds.

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U.S. foundation giving steady in 2010: report (Reuters)

NEW YORK (Reuters) ? U.S. foundations made $45.7 billion in grants in 2010 and are expected to give away up to 4 percent more this year amid a fragile economic recovery, a top philanthropic research group said on Thursday.

Giving from the country's 76,000 grant-making foundations was almost unchanged last year from 2009, and remained 2.1 percent below a record $46.8 billion in 2008, the Foundation Center said.

Foundation assets grew about 5 percent last year to $621.4 billion, but remain 9 percent below their pre-financial crisis high of $682.2 billion recorded in 2007.

The group's report, "Foundation Growth and Giving Estimates," said that giving held steady for the past couple of years due to a recovering stock market, foundations drawing upon endowments and cutting administrative costs.

The top U.S. foundations by giving include the Bill & Melinda Gates Foundation, the AstraZeneca Foundation, the Ford Foundation, the GlaxoSmithKline Patient Access Programs Foundation and the Susan Thompson Buffett Foundation.

"Foundations provided stability for non-profits during a time of crisis," said Foundation Center President Bradford Smith. "Many made extraordinary efforts to maintain their giving levels, while other, often newer foundations even increased their giving."

Independent foundations gave $32.5 billion in 2010 and corporate foundations gave $4.7 billion, both down less than 1 percent from 2009, while giving by community foundations fell 2 percent to $4.1 billion.

The Foundation Center forecast giving would grow 2 percent to 4 percent this year, with half the 1,065 foundations surveyed expecting to increase their grant-making in 2011. About 17 percent saw grants remaining unchanged and 30 percent expected a decrease.

"These additional dollars will help to seed the many promising endeavors put on hold during the depths of the economic crisis," said Steven Lawrence, director of research at the Foundation Center and principal author of the report.

The report stressed that demand for funds from U.S. foundations had grown considerably in recent years, adding to pressure on philanthropic groups.

"Beyond the long-term challenges foundations regularly address ... the economic downturn slashed government revenues at all levels, leaving political leaders and the organizations they support scrambling to replace lost dollars," it said.

(Editing by Daniel Trotta and Laura MacInnis)

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European Central Bank raises interest rates for first time in nearly three years despite Portugal bailout

The ECB also raised its deposit rate by 25 basis points to 0.5pc, and increased its marginal lending rate by the same amount to 2pc.

ECB President Jean-Claude Trichet will talk about the reasoning behind the bank's decision at a news conference starting at 1.30pm London time.

Bank of England policymakers held rates despite a surge in inflation. The majority of the Monetary Policy Committee members continue to judge the economic recovery as too shaky to withstand higher rates.

They are betting that inflation of 4.4pc - more than double the target - will ease once oil and food prices come down.

Most economists were expecting the Bank of England to leave rates unchanged. Simon Ward, Henderson's chief economist, was the only one of 67 forecasters polled by Reuters to forecast a rates rise.

Howard Archer of IHS Global Insight said the decision "indicates that serious concerns and uncertainties over the growth outlook deterred the MPC from acting despite the pressure for higher interest rates coming from elevated and still rising consumer price inflation".

The MPC, which sets interest rates, said last month that a rise in oil prices, fanned by tension in the Middle East and North Africa, had increased risks to both inflation and growth.

Three of the nine MPC members voted to raise interest rates last month, but economist says there is little evidence so far that Britain's economy has enjoyed a strong rebound from the shock contraction at the end of 2010.

Economists believe this is needed to convince Mervyn King, the Governor of the Bank of England, and the majority on the MPC that it is time to raise rates.

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Markets fall after Japan aftershock (Reuters)

NEW YORK (Reuters) ? U.S. stocks fell on Thursday after Japan suffered a major aftershock, which caused injuries and renewed concerns about industrial supply disruptions and nuclear power.

Investors sought protection against further market declines, which sent the CBOE Volatility Index VIX (.VIX) up 2.2 percent to 17.27. VIX futures also rose as investors bet the index could rise above 20 by May.

The earthquake, measured at magnitude 7.4, caused no tsunami or detectable damage at the Fukushima Daiichi nuclear plant, but investors remained cautious after Japan's 9.0 deadly earthquake and tsunami on March 11. For details, see

"It got people thinking that maybe this is not finished yet, and this is of a bigger scale than what we had expected," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

The VIX, which often moves inversely to the S&P 500, measures the cost of hedges or protection investors are willing to pay against a fall in the S&P 500. The heavy call volume suggests expectations for more anxiety in the future.

The iShares MSCI Japan Index ETF (EWJ.P) dropped 0.9 percent, rebounding off earlier lows, while dollar-denominated Nikkei futures slid 1.2 percent.

The Dow Jones industrial average (.DJI) was down 61.91 points, or 0.50 percent, at 12,364.84. The Standard & Poor's 500 Index (.SPX) was down 5.35 points, or 0.40 percent, at 1,330.19. The Nasdaq Composite Index (.IXIC) was down 5.97 points, or 0.21 percent, at 2,793.85.

Stocks had been mostly flat prior to the news of the quake, with the S&P 500 encountering strong technical resistance that stymied gains after a larger-than-expected drop in weekly jobless claims and March retail sales that topped expectations.

"The consumer seems to be hanging in there despite higher gas prices," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.

Among retailers, Costco Wholesale Corp (COST.O) beat expectations, and its shares gained 3.4 percent to $77.57. Macy's Inc (M.N) rose 0.3 percent to $25.26 while Target Corp (TGT.N) fell 2 percent to $49.93.

Bed Bath and Beyond Inc (BBBY.O) surged 10.1 percent to $54.37 a day after it forecast full-year earnings growth that would beat Wall St expectations.

U.S.-listed shares of Japanese stocks fell, but some analysts said they might buy on the weakens.

"I'm looking at auto manufacturers, and I'm definitely looking to buy Honda if it gets cheap enough," said Tim Hartzell, chief investment officer for Houston-based Sequent Asset Management.

New York-traded shares of Honda Motor Corp (HMC.N) rose 0.2 percent on volume that neared its 50-day average.

(Reporting by Angela Moon, Editing by Kenneth Barry)

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FTSE edges up 0.14% at open (AFP)

LONDON (AFP) ? London shares steadied at the start of trading on Thursday, along with markets across Europe, as traders awaited a major interest rate decision by the European Central Bank and reacted to Portugal's bailout request.

The FTSE 100 index gained a modest 0.14 percent to 6,049.83 points in opening deals.

Elsewhere in Europe Frankfurt's DAX 30 dipped 0.04 percent to 7,212.46 points and in Paris the CAC 40 edged up 0.01 percent to 4,048.70.

The European Central Bank was set to raise its interest rates on Thursday for the first time since July 2008 as concern over inflation trumps fears of collateral damage to weaker eurozone economies.

The benchmark rate for the 17-nation zone has been at a record low 1.0 percent since May 2009.

Eurozone member Portugal has meanwhile finally decided to request financial assistance from the European Union, paving the way for a third bailout of a eurozone country after Ireland and Greece.

Analysts have said that Portugal, which requested help late on Wednesday, could require a package worth 70 billion euros (100 billion dollars), compared with 85 billion for Ireland and 110 billion for Greece.

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U.S. foundation giving steady in 2010: report (Reuters)

NEW YORK (Reuters) ? U.S. foundations made $45.7 billion in grants in 2010 and are expected to give away up to 4 percent more this year amid a fragile economic recovery, a top philanthropic research group said on Thursday.

Giving from the country's 76,000 grant-making foundations was almost unchanged last year from 2009, and remained 2.1 percent below a record $46.8 billion in 2008, the Foundation Center said.

Foundation assets grew about 5 percent last year to $621.4 billion, but remain 9 percent below their pre-financial crisis high of $682.2 billion recorded in 2007.

The group's report, "Foundation Growth and Giving Estimates," said that giving held steady for the past couple of years due to a recovering stock market, foundations drawing upon endowments and cutting administrative costs.

The top U.S. foundations by giving include the Bill & Melinda Gates Foundation, the AstraZeneca Foundation, the Ford Foundation, the GlaxoSmithKline Patient Access Programs Foundation and the Susan Thompson Buffett Foundation.

"Foundations provided stability for non-profits during a time of crisis," said Foundation Center President Bradford Smith. "Many made extraordinary efforts to maintain their giving levels, while other, often newer foundations even increased their giving."

Independent foundations gave $32.5 billion in 2010 and corporate foundations gave $4.7 billion, both down less than 1 percent from 2009, while giving by community foundations fell 2 percent to $4.1 billion.

The Foundation Center forecast giving would grow 2 percent to 4 percent this year, with half the 1,065 foundations surveyed expecting to increase their grant-making in 2011. About 17 percent saw grants remaining unchanged and 30 percent expected a decrease.

"These additional dollars will help to seed the many promising endeavors put on hold during the depths of the economic crisis," said Steven Lawrence, director of research at the Foundation Center and principal author of the report.

The report stressed that demand for funds from U.S. foundations had grown considerably in recent years, adding to pressure on philanthropic groups.

"Beyond the long-term challenges foundations regularly address ... the economic downturn slashed government revenues at all levels, leaving political leaders and the organizations they support scrambling to replace lost dollars," it said.

(Editing by Daniel Trotta and Laura MacInnis)

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World stocks unfazed by ECB hike, Portugal plea (AP)

LONDON ? Global markets were unfazed Thursday by the European Central Bank's first interest rate increase in nearly three years and Portugal's request for a bailout.

Both pieces of news had been widely predicted, although the timing of Portugal's bailout plea came earlier than anticipated given the country has no government.

There are even hopes that Portugal's long-awaited request may stabilize the situation within the 17-country eurozone for a while as fears of contagion to other countries, such as much bigger Spain, have diminished.

Those hopes have helped support the euro of late alongside the prospect of higher interest rates.

By mid-afternoon London time, the euro was trading 0.3 percent lower at $1.4289. On Wednesday, the euro hit a 15-month high of $1.4349 on the prediction that the ECB would raise borrowing costs. As a result, the decision to increase the main interest rate to 1.25 percent from 1 percent caused barely a whimper in the markets.

Higher interest rates would not necessarily mean that the euro would be backed if other central banks were also doing so. But with the U.S. Federal Reserve showing few signs that it's planning to change tack, the euro has been buoyant against the dollar.

Better-than-expected figures showing weekly jobless claims in the U.S. fell by 10,000 last week to 382,000 are unlikely to lead to much of a change in the Fed's thinking on their own. The monthly payrolls figures are more important when assessing the outlook for U.S. monetary policy.

The response in bond and stock markets over Portugal's bailout request has been equally relaxed. In Portugal, the bailout request has been met with an element of relief and the country's main stock index was up 1.5 percent, making it the best performer in the eurozone.

"Portugal's bailout appears to have been entirely priced into markets, as there was little reaction to the announcement," said Benjamin Reitzes, an analyst at BMO Capital Markets. "Attention will now turn entirely to Spain, though the decline in yields and credit default swap spreads so far this year suggest markets aren't concerned about contagion."

Elsewhere in Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,052 after the Bank of England kept its main interest rate unchanged at a record low of 0.5 percent. Germany's DAX was 0.3 percent higher at 7,235 while the CAC-40 in France rose 0.5 percent to 4,068.

In the U.S., the Dow Jones industrial average was up 0.1 percent to 12,432 soon after the open while the broader Standard & Poor's 500 index rose 0.2 percent to 1,338.

Earlier in Asia, Tokyo's Nikkei 225 index rose less than 0.1 percent to close at 9,590.93 even though the Japanese economy got a boost when the Bank of Japan, in a widely expected decision, kept its key interest rate unchanged at near zero and extended emergency loans to financial institutions affected by the earthquake and tsunami crisis.

Hong Kong's Hang Seng index was marginally down at 24,281.80, while South Korea's Kospi fell 0.2 percent to 2,122.14.

In the oil markets, the apparent stalemate in Libya, which accounts for a little under 2 percent of the world's daily oil production, kept oil prices high.

Benchmark crude for May delivery was up 12 cents at $108.95 a barrel in electronic trading on the New York Mercantile Exchange, a little shy of its 30-month high of $109.15.

___

Pamela Sampson in Bangkok contributed to this report.

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Bank of England holds rates at record low

The Monetary Policy Committee, which sets interest rates, said last month that a rise in oil prices, fanned by tension in the Middle East and North Africa, had increased risks to both inflation and growth.

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It?s Not Just Autos: Shortage of Japanese Parts Puts U.S. Economy at Risk, Tonelson Says

The devastating earthquake and tsunami that hit Japan last month is slowly starting to have a bigger impact on U.S. manufacturing.

Toyota announced Monday that its North American plants would likely have to close later this month due to supply disruptions in Japan. Honda, Nissan and Ford have already announced temporary plant shutdowns and Chrysler could be next in line.

But the impact of Japan's disaster on U.S. manufacturing has been vastly underestimated and goes far beyond the auto and electronics industries, says Alan Tonelson, research fellow at the U.S. Business and Industry Council and author of Race to the Bottom.

A new report by the Council found that "many of the highest rates of dependence on Japan are found in non-electronics capital goods sectors ? industrial machinery and components vital to high-value production throughout the domestic U.S. manufacturing base."

The report ? entitled A Supply-Chain Earthquake? American Industrial Dependence on Japanese Manufactures ? cites these market-share figures for the sectors unrelated to electronics and automobiles that come from Japanese imports:

• Metal cutting machine tools = 21% of U.S. market-share comes from Japan
• Turbines for generating energy = 14.8%
• Metal-forming machine tools = 12.7%
• Plastic and rubber making machinery = 11.2%

"If you go to most small- and medium-sized factories in this country in particular, you are going to see a wealth of foreign made machine tools many of which are coming from Japan," Tonelson tells Aaron in the accompanying interview. "[Therefore] if we have supply chain disruptions due to the Japanese earthquake ? that is likely to affect much of the advanced high-value manufacturing sector because these machine tools and bearings and forgings, etc. are such an integral of advanced manufacturing today."

Such disruptions -- over and beyond those of car and electronics -- certainly would not bode well for the U.S. economic recovery. "When you consider the number of advanced manufacturing industries that are so heavily reliant on Japanese capital equipment, so many different types, you'd have to say [a double-dip recession] is a very real possibility," he says. "We also have to remember that these high-value U.S. manufacturing industries generate an out-sized share of the economies best-paying jobs ? especially for working class people."

But there may be a silver lining to this story.

Should shortages continue, Tonelson hopes that U.S. manufacturers can adapt to fill the growing supply gap. But, in order for that to happen, he says there has to be some major shifts in policy-making that would support jobs here at home, rather than (continuing to) sending them overseas.

Tell us, do you think the U.S. should be less reliant on foreign made goods?

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More signs of Fed discord on rate policy (Reuters)

ROANOKE, Virginia (Reuters) ? Two top Federal Reserve officials offered conflicting views on interest rates on Thursday, one arguing they should stay low for a long time and another saying a rate hike could be in the cards this year.

Richmond Federal Reserve Bank President Jeffrey Lacker, an inflation hawk, said inflation risks have risen in the last six months, potentially warranting some form of monetary tightening before the end of the year.

"Rate hikes by year end are certainly a possible outcome given what we see with momentum in economic growth and given how inflation risks seem to have evolved," Lacker, an inflation hawk, told reporters after a speech.

In contrast, Cleveland Fed Bank President Sandra Pianalto, speaking in Rome, said the Fed should keep its federal funds target rate very low for a long while to come, and complete its $600 billion bond purchase program as scheduled

Pianalto said she saw no evidence that sharp rises in food and energy prices would lead to lasting inflation, though the Fed is watching for any signs of an unanticipated spillover.

"My outlook for economic growth and inflation assumes that we complete our asset purchase program as originally scheduled, and keep our federal funds rate target at exceptionally low levels for an extended period," Pianalto said.

The Fed's bond purchases are scheduled to end in June.

"I don't expect recent rises in food and energy prices to cause a broad spillover into a wide array of consumer prices, or in other words a lasting increase in inflation," said Pianalto. She said underlying inflation would rise only gradually toward 2 percent by 2013.

Lacker was not as sanguine. He said the Fed should consider selling some of its mortgage bond holdings potentially early in its exit strategy.

"The housing finance market can easily withstand a substantial liquidation of our MBS holdings," Lacker said. "I don't think we should fear tanking the housing market

In response to the crisis and the ensuing recession, the Fed has bought well over $2 trillion in mortgage and government bonds. Lacker favors a return to holding only Treasuries, since he worries that the housing bond buys blurred the line between monetary and fiscal policy.

The U.S. economy expanded 3.1 percent in the fourth quarter, a solid clip but not enough for a country still digging its way out of a deep hole. U.S. unemployment has come down rather rapidly in recent months, but remains at an elevated 8.8 percent.

(Additional reporting by Gavin Jones in Rome; Editing by Neil Stempleman)

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Google Reinvents YouTube Again with Premium Video Channels

In 2006, Google (GOOG) bought Internet video powerhouse YouTube for $1.65 billion. The search giant claims the deal was a financial success. Management says that YouTube's revenue rose to nearly $1 billion last year, and it hints that the site may be profitable. But Google doesn't have to break out YouTube as a unit in its quarterly financial statements, and profits within divisions of big firms always depend what expenses the parent assigns. For example, who pays for the video storage and bandwidth costs for YouTube -- the video site or Google?

Google's latest move to boost the site and raise revenues is to create premium video channels on YouTube, several media outlets are reporting. The premium zone would include as many as 20 sections of content, all streamed to TVs, PCs, and portable devices. That makes YouTube's new model sound just like those of nearly every challenger in the premium video market, from Netflix (NFLX) and Comcast (CMCSA) to Amazon (AMZN), Apple (AAPL) and Hulu.

Google has battled with content-creating companies in the past. Viacom (VIA) sued YouTube for copyright infringement to the tune of $1 billion. Some observers thought that the legal action would ruin YouTube, but a federal court ruled in favor of Google last year.

Google has one advantage over its competition in the online video race: viewers. According to Comscore, in February, Google video sites had 141 million unique U.S. visitors, and almost all of that traffic was to YouTube. Those visitors accounted for 1.8 billion viewing sessions. No other U.S. video site even came close. So if size matters, Google may be able to get a large share of the premium video content delivery market.

But size may not matter as much as consumers' mindsets. Many people think of YouTube as primarily the online home of grainy, amateur clips of laughing babies, dancing dogs, and music videos. It's a reasonable perception: YouTube has for the most part been a collection of an odd mix of home videos since it was founded. Google will have to change that image if it hopes to get large numbers of consumers to visit YouTube looking for premium video. And old images die hard -- especially on the Internet.

Tagged: google, home video, hulu, laughing baby, music videos, pay wall, PayWall, premium video, profits, streaming video, unique visitors, YouTube

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World stocks unfazed by ECB hike, Portugal plea (AP)

LONDON ? Global markets were unfazed Thursday by the European Central Bank's first interest rate increase in nearly three years and Portugal's request for a bailout.

Both pieces of news had been widely predicted, although the timing of Portugal's bailout plea came earlier than anticipated given the country has no government.

There are even hopes that Portugal's long-awaited request may stabilize the situation within the 17-country eurozone for a while as fears of contagion to other countries, such as much bigger Spain, have diminished.

Those hopes have helped support the euro of late alongside the prospect of higher interest rates.

By mid-afternoon London time, the euro was trading 0.3 percent lower at $1.4289. On Wednesday, the euro hit a 15-month high of $1.4349 on the prediction that the ECB would raise borrowing costs. As a result, the decision to increase the main interest rate to 1.25 percent from 1 percent caused barely a whimper in the markets.

Higher interest rates would not necessarily mean that the euro would be backed if other central banks were also doing so. But with the U.S. Federal Reserve showing few signs that it's planning to change tack, the euro has been buoyant against the dollar.

Better-than-expected figures showing weekly jobless claims in the U.S. fell by 10,000 last week to 382,000 are unlikely to lead to much of a change in the Fed's thinking on their own. The monthly payrolls figures are more important when assessing the outlook for U.S. monetary policy.

The response in bond and stock markets over Portugal's bailout request has been equally relaxed. In Portugal, the bailout request has been met with an element of relief and the country's main stock index was up 1.5 percent, making it the best performer in the eurozone.

"Portugal's bailout appears to have been entirely priced into markets, as there was little reaction to the announcement," said Benjamin Reitzes, an analyst at BMO Capital Markets. "Attention will now turn entirely to Spain, though the decline in yields and credit default swap spreads so far this year suggest markets aren't concerned about contagion."

Elsewhere in Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,052 after the Bank of England kept its main interest rate unchanged at a record low of 0.5 percent. Germany's DAX was 0.3 percent higher at 7,235 while the CAC-40 in France rose 0.5 percent to 4,068.

In the U.S., the Dow Jones industrial average was up 0.1 percent to 12,432 soon after the open while the broader Standard & Poor's 500 index rose 0.2 percent to 1,338.

Earlier in Asia, Tokyo's Nikkei 225 index rose less than 0.1 percent to close at 9,590.93 even though the Japanese economy got a boost when the Bank of Japan, in a widely expected decision, kept its key interest rate unchanged at near zero and extended emergency loans to financial institutions affected by the earthquake and tsunami crisis.

Hong Kong's Hang Seng index was marginally down at 24,281.80, while South Korea's Kospi fell 0.2 percent to 2,122.14.

In the oil markets, the apparent stalemate in Libya, which accounts for a little under 2 percent of the world's daily oil production, kept oil prices high.

Benchmark crude for May delivery was up 12 cents at $108.95 a barrel in electronic trading on the New York Mercantile Exchange, a little shy of its 30-month high of $109.15.

___

Pamela Sampson in Bangkok contributed to this report.

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Tsunami worries mount as new earthquake hits Japan

An earthquake measuring 7.4 on the Richter scale has rocked Japan. The epicentre of the quake is of Japan's northeastern coast, and 40 kilometers under-water. The Japan meteorological agency has issued a tsunami warning for a wave of up to one meter. CNBC's Charles Haddock shares details on the tragedy.

Below is a verbatim transcript of Charles Haddocks report. Also watch the accompanying video.

Tokoyo was rattled by the earthquake even though it was some 200 miles away. The epicenter of this 7.4 earthquake was about 70 miles from Fukoshima and the local Tsunami warning has been issued for the area. Now, the area around Fukoshima was build to withstand a 25 foot surge of water. The problem was that the 9.0 earthquake that hit about 4 weeks ago was a 45 foot wave. Therefore, it should be able to withstand the wave. They were just about ready to make some progress in cleaning up and getting the cooling system back in order at the Fukoshima plant. It is know yet what this earthquake has done to that effort.

TEPCO has certainly taken a beating, but no company or country has been through something like this an earthquake of a magnitude of 9.0, tsunami and then a nuclear leak in three to four reactors. They are doing the best they can. They have had some missteps along the way. However, in this week they were making progress. They were able to stop that leak of radioactive water into the Pacific Ocean. They were injecting nitrogen gas into the containment buildings to try to stabilize the atmosphere for the reactors. They still have a lot of water pooling around the reactors and the buildings. They have to get rid of that before they can get in and really repair the infrastructure of the reactor units, try to stabilize them before they can permanently shut them down for good.

It is too early know about casualties from their fresh earthquake. Earlier in the day, they had made a significant effort to try to enter the 12 mile radius around the nuclear plant to try to find more victims from the massive tsunami that swept the region. They wanted to be able to get the bodies out of there before they deteriorated too much and try to bring some condolence to the families of the victims there. That effort obviously has been suspended for the night. We dont know what the earthquake has done to the infrastructure around Fukoshima. Are the roads wiped out? Are the railroads still in a mess? Its night time and information from that region has been hard to get in the best of times. Its certainly not coming forth tonight.

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Warren Buffett?s PR Nightmare: The Sokol Saga Continues

"If questioned about this matter in the future, I will simply refer the questioner back to this release," Warren Buffett declared last week when he announced David Sokol's resignation.

Buffett may have wanted to have the last word, but the controversy isn't going away.

Buffett's claim that Sokol did nothing "unlawful" remains to be determined. The SEC is reportedly weighing an investigation of Sokol's trading in Lubrizol shares ahead of Berkshire Hathaway's bid for the company last month.

However, Sokol clearly violated Berkshire Hathaway's policy that bars company officials from trading in public companies "that may be involved in a significant transaction with Berkshire," The WSJ reports.

The key issue here is that Sokol first acquired Lubrizol shares in December after being pitched the company by Berkshire's bankers at Citigroup. (See: Did Buffett Blow It? The Sokol Story Doesn't Add Up )

Because of the nature of the meeting -- a top Berkshire executive meeting with the firm's M&A bankers -- it's unfair to compare Sokol's Lubrizol trades with Charlie Munger's position in BYD, as some apologists have done. Munger reportedly owned BYD "for years" in a personal account prior to Berkshire's purchase. By contrast, Sokol's fiduciary duty was to the firm and its shareholders in this case, not his personal portfolio.

Buffett: Myth vs. Reality

Given that, Buffett's public statements visa vis Sokol's trades are hard to fathom. If Sokol violated Berkshire's policy, why did Buffett defend his rumored successor and not fire him "for cause"? And does Buffet really think anyone will believe the Lubrizol trades were "not a factor in [Sokol's] decision to resign," as he claimed last week?

Having been the beneficiary of largely glowing coverage over the years ? some it deserved ? perhaps Buffett has started to believe his own press clippings.

Of course, some of this is our own fault. It was na�ve to think that Buffett could become one of the world's richest men merely by being a nice guy who outworked and outsmarted the competition. Arguably, he's done as good a job managing the media as his portfolio, as another legendary investor ? Michael Steinhardt ? suggested on CNBC this week.

But no one is above reproach or above the law and it seems like the time has (finally) come for the investing public ? and once-fawning journalists ? to ask: Is Buffett's image as a purveyor of "homespun wisdom" reality or merely just spin? (See: Will the Real Warren Buffett Please Stand Up? )

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

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Riding on brand Dhoni, Chennai team becomes IPL favorite

Chennai Super Kingsit's a brand that has suddenly acquired a whole lot more punch. Evidence: new sponsors, and exciting merchandise. CNBC-TV18's Swathi Narayanan reports.

Chennai is suddenly hot property. Well, at least, the Chennai Super Kings team is. And it's largely thanks to this cool customer.

Mahendra Singh Dhoni, Captain, Indian cricket team and now Chennai Super Kings' said, "Once you come to Chennai you find its quite hot over here and I am quite well planned ahead of the IPL."

It's not just the hairstyle, or the lack thereof that will energise the team. Despite a four-fold increase in the entry price for sponsors, new sponsors are lining up. Gulf Oil and TI Cycles, to name a few, will join the ranks.

Aircel, which has been a sponsor for three years, has extended its contract for another three years, and Reebok will sponsor the team for another two years.

Ravi Chawla president of Gulf Oil Corp' lubes business said, "At this time, the strategy has been to get into the southern market, after having made our investments in the north and in the south as well we are looking at growth across our segments which are mainly trucks, cars and motorcycles."

Dhoni's presence alone is doing wonders for Chennai Super Kings, making it the fastest growing IPL brand. It's value, which stood at USD 50 million a year ago, and is now estimated at over Rs 100 million.

Rakesh Singh, VP of marketing, Chennai Super Kings, said, "Dhoni is priceless. To give a value to that is impossible. Definitely Dhoni is a super cool captain. And that will come off on any brand."

Merchandising will also receive a fresh thrust. Apart from jerseys and caps, 20 other products will be on offer. "We have player look alike t-shirts from Reebok. We have comic books that will be on sale, notebooks from Bilt for the children. We are basically trying to target the youth and children segment as they are the real supporters," Singh added.

And the team owners are all smiles. Thanks to Chennai Super Kings, the popularity of India Cements has grown in the northern markets that they recently forayed into. Their plant in Rajasthan is running to full capacity and incidentally this plant is located in a place called Mahi!

Tags: IPL, Chennai Super Kings, DLF IPL, Swathi Narayanan, CNBC-TV18, Dhoni, Gulf Oil, TI Cycles, Aircel, Reebok, Bilt, India Cements

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The Frugal Consumer: Three Classic Home Theater Films for Teens

The U.S. economy is recovering, but stagnant incomes mean family budgets are tighter, with less money left for entertainment. And if you're a parent of teenagers, you may not have as much discretionary cash as you once did to spot them $30 or $40 every week for a night out at the movies with a date or friends.

But that creates a dilemma: How does a family stay within its budget without having the young adults conclude that their lifestyle is more austere than the that of the Puritans?

Here's one option: Consider bringing the movie home to the teens via a home theater system. If you have a big-screen TV with a decent pair of speakers, you're halfway there.

If your teens balk at the option, ask them to try it for just one night. Odds are, after a test drive, they'll make it a regular event.

But for it to work, you'll need the second half of the equation: A great movie that young adults will like. Unfortunately, this takes a little research, because Hollywood hasn't produced too many gems lately. Don't fret: The research has already been done here. Listed below are three classic movies -- all available on DVD for less than $15 -- that should please the younger crowd.

Three Screen Gems for Teens

American Graffiti (1973). Genre: Romantic/Comedy. Stars: Ron Howard, Richard Dreyfuss. Most teens probably will balk at the thought of watching this film, but recommend it to them, anyway. More than likely, after a few minutes, they'll be 100% engrossed in the movie. Director George Lucas' tribute to his youth in the early 1960s in California's car culture is a masterpiece, combining a brilliant script, issues that teens can identify with (dating, impressing friends, social pressures, growing up), humor, and a classic rock 'n' roll soundtrack. Produced by Francis Ford Coppola, this box office blockbuster redefined how soundtracks are applied to films. Teens who have heard of it but never seen it may dismiss it as "a really old film," but after viewing it, most will probably change their verdict to "I didn't know it was a really good film."

Jaws (1975). Genre: Thriller. Stars: Roy Scheider, Richard Dreyfuss, Robert Shaw. Director Steven Spielberg's adaptation of Peter Benchley's novel is almost certain to keep the teens riveted to the screen. True, the special effects are basic compared to today's technology, but very little else is mediocre in this blockbuster ocean-faring thriller that literally left many Americans scared to swim in the ocean that summer. Jaws has many themes young adults will find appealing: the beach, generational conflict, and the price one pays to do the right thing in the face of social or political pressure. More than likely, your teens will be engrossed from the first few notes of the film's legendary score.

Titanic (1997). Genre: Epic/Romance/Disaster. Stars: Leonardo DiCaprio, Kate Winslet. Director James Cameron combines a love story with social commentary in a fictionalized account of the tragic 1912 ocean liner disaster. The development of the relationship between the supercool DiCaprio and the striking Winslet offers more than enough to interest teens, and the pageantry of the age combined with the film's spectacular visuals should also impress. Note: Given its length (three hours), it's best to schedule an intermission.

OK -- the hard work is done. Now ask your teen to invite their crew over on a Friday or Saturday night, tell them to turn off the smart phones and computers for a couple hours, and enjoy.

Just remember to make a lot of popcorn.

Tagged: American Graffiti, DVD, DVDs, entertainment, films, home entertainment, home theatre, Jaws, movies, teens, Titanic, young adults

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U.S. Stocks Drop on Japan Earthquake, Government Budget Impasse

April 07, 2011, 3:23 PM EDT

By Rita Nazareth

April 7 (Bloomberg) -- U.S. stocks fell, dragging the Dow Jones Industrial Average down from an almost three-year high, as another earthquake shook Japan and a dispute over the federal budget threatened to shut down the American government.

General Electric Co., Cisco Systems Inc. and Alcoa Inc. lost at least 1.2 percent to lead declines in the Dow. The iShares MSCI Japan Index Fund, an exchange-traded security tracking the nation?s equities, dropped 0.8 percent after retreating as much as 1.7 percent. Gap Inc. declined 1.4 percent after the largest U.S. apparel chain reported a 10 percent slump

The S&P 500 lost 0.2 percent to 1,332.63 at 3:19 p.m. in New York, after dropping as much as 0.7 percent. The Dow, which climbed yesterday to the highest level since June 2008, slid 28.53 points, or 0.2 percent, to 12,398.22 today.

?It?s body blow after body blow,? said Matt McCormick, a Cincinnati-based money manager at Bahl & Gaynor Inc., which oversees $3.6 billion. ?The market has faced a series of black swans. We don?t know the impacts of the Japan situation. We don?t know what will happen in the Middle East. In addition, people are skittish because of all the budget discussion and concern about the future of monetary and fiscal policies.?

The S&P 500 rose 6.2 percent in 2011 through yesterday as government stimulus measures, corporate takeovers and higher- than-estimated profits boosted investors? optimism. The benchmark gauge fell on April 5 as minutes from the Federal Reserve?s last meeting spurred speculation central bankers may begin removing record stimulus measures enacted to ensure the economy recovered from recession.

7.1-Magnitude Earthquake

Benchmark indexes slumped today as 7.1-magnitude earthquake minutes before midnight spared the stricken Fukushima Dai-Ichi nuclear plant in Japan, although workers struggling to cool radioactive fuel were evacuated, Tokyo Electric Power Co. said based on its initial assessment. The aftershock was the second- strongest since a record 9-magnitude earthquake and tsunami on March 11. No unusual conditions were observed at the plant afterward, the utility, known as Tepco, and Japan?s Nuclear and Industrial Safety Agency said in statements.

Crude rose above $110 a barrel for the first time in 30 months as a fire burned at Libya?s Sarir field, bolstering concern that unrest in North Africa and the Middle East will spread, curbing shipments. NATO said forces loyal to Muammar Qaddafi caused a fire at the field, according to Al Arabiya television. The conflict in Libya is currently in a stalemate, said Army General Carter Ham, the U.S. commander for Africa.

Stopgap Spending Bill

The U.S. House approved a stopgap spending bill to keep the government open through next week, although President Barack Obama said he would veto the measure and a shutdown still looms. The measure, passed 247-181, would cut another $12 billion in spending this year and fund the Pentagon at current levels through Sept. 30. Senate Majority Leader Harry Reid, a Nevada Democrat, called the bill a ?non-starter.?

House Speaker John Boehner said there was no agreement on a budget reached at a White House meeting with President Obama and Senate Majority Leader Reid. ?We?re not there yet,? Boehner, an Ohio Republican, said outside the White House. Reid, a Nevada Democrat, said he was ?disappointed? that negotiations haven?t resolved the issue. He said the leaders will meet again tonight.

A failure by Congress to extend the government?s spending authority, which expires tomorrow, would force the closure of national parks, monuments and museums. Federal agencies -- such as the National Labor Relations Board -- that don?t protect lives, property or national security also would be shuttered.

Higher Rates

Stock-futures fell before the open of exchanges as European Central Bank President Jean-Claude Trichet said today?s interest-rate increase is not necessarily the start of a series. ?We did not decide that it was the first of a series of interest-rate increases,? Trichet said at a press conference in Frankfurt after the ECB raised its benchmark rate to 1.25 percent from a record low of 1 percent.

The S&P 500 has closed every session this month less than 1 percent below its 2011 high of 1,343.01 set on Feb. 18, causing investors to question whether the index will set a new high or head lower in a so-called double top.

?The big question with the indexes is, will this be a double top or not?? said Kurt Kinker, chief market analyst at Mirus Futures in Chicago. ?We?re holding these 1330s in the S&Ps. And whether they can break out above the February highs or whether they?ll head south, that?s the question.?

Gap Slumps

Gap slipped 1.4 percent to $22.73. Same-store sales dropped 10 percent, compared with the estimated decline of 7.3 percent. Last month?s earthquake and tsunami in Japan, where the retailer has more than 150 stores, cut into results, Chief Executive Officer Glenn Murphy said in a statement.

KLA-Tencor Corp. had the biggest drop in the S&P 500, falling 4.9 percent to $43.93. Citigroup Inc. advised selling rival semiconductor-equipment maker Lam Research Corp.

Lam Research dropped 4.6 percent to $53.75. The maker of chip-manufacturing equipment may disappoint investors when reporting earnings for the current quarter as demand slows, Citigroup Inc. wrote in a note, in which it added the idea of selling the shares its Top Picks Live! list.

Bed Bath & Beyond Inc. gained 11 percent to $54.60. The home furnishings retailer forecast annual earnings of $3.38 to $3.53 a share. That compares with the average analyst projection of $3.33, Bloomberg data show.

Costco Wholesale Corp. rose 3.7 percent to $77.75. The largest U.S. warehouse-club chain reported total comparable sales rose 13 percent in March, beating the 7.4 percent estimate.

Jobless Claims

Fewer Americans filed first-time claims for unemployment insurance last week. Applications for jobless benefits fell 10,000 in the week ended April 2 to 382,000, the fewest since Feb. 26, Labor Department figures showed. Economists projected claims would be little changed at 385,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those collecting extended payments decreased.

?There?s a glimmer of hope that the jobs market is getting better,? said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages about $3 billion in San Antonio. ?There?s no doubt things are getting better from an economic standpoint. The wild card here will be monetary policy.?

--Editors: Nick Baker, Michael Regan

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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