Today's Headlines

Bloomberg: 

• Euro-Area Unemployment Increases to Record 12.1% Amid Recession. The euro-area jobless rate rose to a record in March, increasing pressure on the European Central Bank to take additional measures to boost growth. The euro-area unemployment rate advanced to 12.1 percent from 12 percent in the previous two months, the European Union’s statistics office in Luxembourg said today. That’s in line with the median of 31 economists’ estimates in a Bloomberg News survey. Soaring unemployment “cannot be ignored, because this is the biggest fragmentation that is happening in Europe,” ECB Vice President Vitor Constancio said on April 25. “It’s even worse in what regards youth unemployment.” Today’s report showed that 19.2 million people were jobless in the euro area in March, up 62,000 from the previous month. Youth unemployment was at 24 percent.
• German Unemployment Climbs in Sign Economic Recovery Delayed. German unemployment rose for a second month in April, adding to signs that Europe’s largest economy is struggling to recover from a slump at the end of last year. The number of people out of work climbed a seasonally adjusted 4,000 to 2.94 million, the Nuremberg-based Federal Labor Agency said today. Economists predicted an increase of 2,000, according to the median of 29 estimates in a Bloomberg News survey. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent.
• Slovenia Bank Rescue at 20% of GDP Means No Escaping EU Aid. Slovenia, the first former Communist nation in the euro zone, is facing a typically capitalist dilemma: whether to protect creditors of big banks. Rising loan losses resulting from a housing bust and a second recession in two years have left a hole of about 7.5 billion euros ($9.8 billion) at Slovenia-based lenders, investment bank Keefe Bruyette & Woods estimates. That’s a lot for a 35 billion-euro economy: A bank bailout would push government debt above 70 percent of economic output. Even after a successful domestic debt sale two weeks ago, the country may need assistance from the European Union, and holders of bank bonds, including the most senior creditors, could be forced to take losses, according to Raoul Ruparel, head of research at London-based Open Europe. Such a bail-in, which would be the second in the euro zone, after Cyprus, risks deepening divergence in the monetary union by keeping borrowing costs higher in economically weak nations.
• Fiat Industrial Cuts 2013 Goals on Iveco Europe Truck Sales. Fiat Industrial SpA (FI), the truck and tractor maker spun off from car manufacturer Fiat SpA (F) in 2011, cut earnings and sales targets for 2013 as a recession in Europe led to a first-quarter loss at the Iveco vehicle unit. Revenue will rise as much as 4 percent, compared with a previous forecast of 5 percent, Turin, Italy-based Fiat Industrial said today in a statement. The trading profit margin will amount to 7.5 percent to 8.3 percent of revenue, versus an earlier range prediction of 8.3 percent to 8.5 percent. Amid a recession in the 17 countries sharing the euro, demand for commercial vehicles in Europe fell for a 15th consecutive month in March. MAN SE (MAN), the region’s third-largest producer, lowered its earnings forecast for 2013 on April 26 because of the contraction. Industrywide first-quarter sales of trucks weighing more than 3.5 tons dropped 17 percent to 64,198 vehicles, according to the ACEA trade group. “The news is clearly negative and not discounted,” said Gabriele Gambarova, an analyst at Banca Akros in Milan. “Iveco encountered more difficult market conditions.” Fiat Industrial dropped as much as 5.1 percent to 8.59 euros, the biggest intraday decline since March 19, and was trading down 4.7 percent at 4:20 p.m. in Milan, valuing the manufacturer at 10.5 billion euros. 
• European Stocks Fall, Trimming 11th Straight Monthly Gain. European stocks declined, paring an 11th straight month of gains, as a report showed business activity in the U.S. unexpectedly shrank this month. Lonmin Plc tumbled 5.7 percent after shuttering a South African platinum furnace. Fiat Industrial SpA sank the most in 11 months after cutting its 2013 earnings target. UBS (UBSN) AG surged the most in six months as profit exceeded analysts’ projections. Deutsche Bank AG rallied the most since September after Germany’s largest lender announced plans to raise as much as $6.5 billion in capital.
• IBM(IBM) Raises Dividend 12%, Adds $5 Billion in Stock Buybacks. International Business Machines Corp. (IBM), the biggest computer-services company, boosted its dividend 12 percent and approved $5 billion in stock buybacks, rewarding investors after a disappointing earnings report. The dividend of 95 cents a share will be payable on June 10 to shareholders of record on May 10, IBM said today from its annual meeting in Huntsville, Alabama. With the additional buyback funds, IBM has $11.2 billion in its repurchase program. 
• Yellen Has the Right of First Refusal at Fed, Meyer Says. Federal Reserve Vice Chairman Janet Yellen has the “right of first refusal” to become the next leader of the central bank when Ben S. Bernanke’s term ends in January, said former Fed governor Laurence Meyer. Meyer, speaking at a Bloomberg Link panel in Washington, said it’s “a bit surprising” that Bernanke couldn’t manage his calendar to allow him to take part in this year’s Fed conference in Jackson Hole, Wyoming.
• Dollar Drops on Weak Data as Fed Meets; Euro Gains on ECB Bets. The dollar fell versus most major peers as business activity in the U.S. unexpectedly shrank for the first time in more than three years amid bets the Federal Reserve won’t slacken its bond buying under quantitative easing. 
• Copper Users Press London Exchange to Reduce Warehouse Backlogs. A group of industrial copper users is pressing the London Metal Exchange to reduce growing queues at warehouses that they say are contributing to supply constraints and rising fees.

Fox News:

• Obama walks back 'red line' stance on Syrian government using chemical weapons. President Obama, who earlier said use of chemical weapons by Syria on its people would be a “red line” requiring action by the U.S., walked the stance back on Tuesday, saying he needs more information on the reported attacks before responding.
• Special forces could've responded to Benghazi attack, whistle-blower tells Fox News. A military special ops member who watched as the deadly attack on the U.S. Consulate in Benghazi unfolded last September told Fox News the U.S. had highly trained forces just a few hours away, and said he and others feel the government betrayed the four men who died in the attack. Speaking on condition of anonymity, and appearing in a Fox News Channel interview with his face and voice disguised, the special operator contradicted claims by the Obama administration and a State Department review that said there wasn’t enough time for U.S. military forces to have intervened in the Sept. 11 attack in which U.S. Ambassador to Libya Chris Stevens, an embassy employee and two former Navy SEALs working as private security contractors were killed. “I know for a fact that C-110, the EUCOM CIF, was doing a training exercise in … not in the region of North Africa, but in Europe,” the operator told Fox News' Adam Housley. “And they had the ability to act and to respond.”

CNBC: 

• The Fed Is Destroying Jobs: Ken Griffin. Ken Griffin, the head of the Chicago-based hedge fund Citadel, is not at all pleased with Ben Bernanke. According to Griffin, low interest rates have encouraged businesses to invest in technology that reduces the demand for human labor. Meanwhile, health care reforms have increased the cost of human capital—so it's a double whammy.
• Sex Superbug Could Be 'Worse Than AIDS'.

Zero Hedge:

• Apple(AAPL) Files Bond Prospectus, Names Goldman Lead Underwriter.
• Europe's Scariest Chart Leaves 1 in 4 Young People Unemployed. (graph)
• Case-Shiller Composite Rises 0.3% In February, Back To September 2010 Levels. (graph)
• Chicago PMI Implodes To 49, First Sub-50 Print Since September 2009. (graph)
• Symantec(SYMC) Flash-Crash Destroys Over $1.5 Billion In Less Than A Second. (graph)
• US Homeownership Rate Drops To 1995 Levels. (graph)

Business Insider: 

• LEON BLACK: The Market Is Pricey, 'So We're Selling Everything That's Not Nailed Down'.
• OBAMA: Guantanamo Bay Is Not Necessary To Keep America Safe.
• Researchers Have Stumbled On A Massive Lithium Mine That Could Meet All US Demand.
• NBC Is In Such Rough Shape, It Could Just Stop Broadcasting.
• Why Investor Demand For Apple's(AAPL) Bonds Is Out Of This World — In One Chart.
• Chicago PMI Report Has Some Seriously Bad News On Jobs. (table)

Reuters: 

• Cummins(CMI) profit drops sharply, shares tumble 5 pct. Cummins Inc reported a sharper-than-expected drop in first-quarter earnings on Tuesday, citing weak demand for its turbines and engines, especially from the mining and oil and gas industries. The company's shares tumbled 5 percent in morning trading.
• METALS-Copper shows steepest monthly fall since last May.
• Empty shops, tight wallets threaten France with recession. French consumers bought fewer cars, tables and chairs, and clothes in the first part of the year, challenging the government's pledge to steer the euro zone's second largest economy away from recession. Consumer spending accounts for more than half of France's output and is the motor of the economy. It fell last year for the first time in 19 years. Record unemployment is still pushing households to keep their wallets closed. An unexpected rebound in March, largely due to heating staying on through cold weather, was not enough to stop a 0.4 percent January to March quarterly decline. The data prompted Jacques Creyssel, head of the FCD business federation, to warn of a fresh contraction in purchasing power this year. 

Telegraph:

• Germany will think twice before saving France next time. The Franco-German axis that has driven EU affairs ever since Schuman and Adenauer in the early 1950s is collapsing before our eyes.
• Spain sinks deeper into recession. Spain sunk deeper into recession, official data confirmed on Tuesday, as economic output contracted in the first three months of 2013 for the seventh successive quarter.

Bear Radar

Style Underperformer:

• Large-Cap Value -.27%

Sector Underperformers:

• 1) Gold & Silver -1.93% 2) Homebuilding -1.30% 3) Education -1.28%

Stocks Falling on Unusual Volume:

• SBS, AVEO, MPC, CIE, PFE, RIO, BBL, TNAV, LGCY, BNCL, XYL, TFX, PFMT, BWLD, PCL, MAS, CMI, EGOV, NEM, SLCA, ANV, AEIS, PBI and NUAN

Stocks With Unusual Put Option Activity:

• 1) AVEO 2) PBI 3) ESRX 4) GNW 5) NUAN
  

Stocks With Most Negative News Mentions:

• 1) GRMN 2) CPTS 3) PBI 4) NUAN 5) DISH
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.14%

Sector Outperformers:

• 1) Networking +.97% 2) Oil Tankers +.69% 3) Retail +.68%
  

Stocks Rising on Unusual Volume:

• UBS, IRF, DB, MPWR, SU, WAIR, OIS, HTWR, MGAM, HPY, GTLS, IVZ, DPZ, BBY, AVP, TXRH, VSH and AGCO

Stocks With Unusual Call Option Activity:

• 1) HNZ 2) LTD 3) PSX 4) NUAN 5) SIRI
  

Stocks With Most Positive News Mentions:

• 1) T 2) OXY 3) HTWR 4) IBM 5) CNH
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Tuesday Watch

Evening Headlines 
Bloomberg: 

• Italy’s Letta Plans to Follow EU Budget Rules, Prepares Tax Cuts. Italian Prime Minister Enrico Letta is heading to Berlin on his second full day in office to present his economic growth plan to German Chancellor Angela Merkel. The program calling for tax cuts for business, consumers and homeowners won a confidence vote in the Italian Parliament yesterday and garnered the approval of bond investors, who pushed 10-year government yields to the lowest in two-and-a-half years. Merkel and Letta will hold a press conference at 6 p.m. and then speak over dinner. 

• U.K. April Consumer Confidence Unexpectedly Declines, GfK Says. U.K. consumer confidence unexpectedly declined in April as inflation (UKRPCJYR) extended its run above the Bank of England’s goal, increasing households’ concern about their personal finances. A sentiment index by GfK NOP Ltd. fell one point to minus 27, the London-based group said in a report today. Economists had forecast no change, according to the median of 19 estimates in a Bloomberg News survey. A gauge of how consumers see their finances over the next year fell to minus 7 from minus 6.

• Why the China Dream Might Be a Mirage. If global economists are distraught over the gloomy numbers coming out of China, imagine how Xi Jinping must feel.

• Japan-to-Korea Output Misses Estimates as Taiwan Cools. Japanese and South Korean industrial output was less than estimates in March and Taiwan’s first-quarter growth was half the forecast pace as weakness in global demand limits recoveries in Asian economies. In Japan, production climbed 0.2 percent from the previous month, the trade ministry said in Tokyo today. That was less than the median 0.4 percent forecast in a Bloomberg News survey of 27 economists. South Korea’s output fell 2.6 percent, a separate report showed. Taiwan’s gross domestic product rose 1.54 percent. Today’s data add to signs of a cooling global economy after U.S. gross domestic product rose less than forecast in the first quarter and China reported an unexpected slowdown. “Overseas demand gathered momentum in the past few months, but the pace of growth is moderating a bit now,” said Junko Nishioka, chief economist at Royal Bank of Scotland Group Plc (RBS) in Tokyo and a former Bank of Japan official. “Shipments of cars to the U.S. are slowing.” 

• North Korea Holds South’s Factory Officials Citing Unpaid Wages. North Korea refused to allow seven South Koreans to leave a shuttered industrial park until a dispute involving unpaid wages and bills is settled, prolonging the dispute over the jointly-run project. Of the 50 managers remaining at the Gaeseong zone, 43 crossed the border at midnight for the first time in nearly a month, South Korea’s Unification Ministry said in a text message. The North has blocked access since April 3 and South Korean President Park Geun Hye last week decided to pull out.

• China Surprise Gauge Sees Aussie Below Parity: Chart of the Day. China's economic slowdown and falling commodity prices will help snap the Australian dollar's record 10-month stretch above parity with its U.S. counterpart, according to Brown Brothers Harriman. Citigroup's Economic Surprise Index for China slid to negative -27.9, a level unseen since October, signaling actual economic data lagged behind the median estimates in Bloomberg surveys of analysts. "In addition to China, considering the current state of commodity prices, I see strong demand to reduce long positions on the Aussie," said Masashi Murata, a currency stategist in Tokyo at Brown Brothers. 

• Copper Set for Worst Month Since May as Demand Concern Grows. Copper dropped, poised for the biggest monthly decline since May, as weakness in Japanese and South Korean industrial output added to global demand concerns. Copper for delivery in three months on the London Metal Exchange fell as much as 0.7 percent to $7,104 a metric ton and was at $7,128 at 10:26 a.m. in Tokyo. The metal has retreated 5.5 percent this month. Futures for delivery in July on the Comex were little changed at $3.2265 per pound. Markets in China are closed through May 1 for public holidays.

Wall Street Journal:

• Female DNA Found on Bomb in Boston. Investigators Unsure Whether Evidence Means a Woman Aided in the Attack; Russians Allege Suspect's Ties to Jihadists. Investigators have found female DNA on at least one of the bombs used in the Boston Marathon attacks, though they haven't determined whose DNA it is or whether its presence means a woman helped the two brothers suspected in the bombings, according to U.S. officials briefed on the probe. In another development, Russian officials revealed details about contacts between the older brother and suspected Islamist radicals in the Caucasus, including Internet exchanges that led to concerns by investigators that he was trying to join up with jihadist fighters. 

• Daniel Kessler: The Coming ObamaCare Shock. Millions of Americans will pay more for health insurance, lose their coverage, or have their hours of work cut back.

• Debt and Growth. Attacking Reinhart-Rogoff to revive the spending machine. Perhaps you've read that America's debt burden is no longer a problem. Former White House economist Larry Summers says the U.S. should borrow even more money today because interest rates are low, and his Keynesian brethren are busy trying to discredit economists Kenneth Rogoff and Carmen Reinhart for their famous claim that a country's economic growth begins to fall when debt hits 90% of GDP. Time for Stimulus 5.0!

Fox News:

• Obama administration officials threatened whistle-blowers on Benghazi, lawyer says. At least four career officials at the State Department and the Central Intelligence Agency have retained lawyers or are in the process of doing so, as they prepare to provide sensitive information about the Benghazi attacks to Congress, Fox News has learned. Victoria Toensing, a former Justice Department official and Republican counsel to the Senate Intelligence Committee, is now representing one of the State Department employees. She told Fox News her client and some of the others, who consider themselves whistle-blowers, have been threatened by unnamed Obama administration officials. “I'm not talking generally, I'm talking specifically about Benghazi – that people have been threatened,” Toensing said in an interview Monday. “And not just the State Department. People have been threatened at the CIA.” 

• Babies treated worse than sick dogs, prosecutor alleges at abortion doc murder trial. Closing arguments in the murder trial of an abortion provider alternated between the defense's insistence that Dr. Kermit Gosnell's office was no "house of horrors" to the prosecution's brutal depiction of the deaths of a woman and four viable babies.

MarketWatch.com: 

• Record stock gains mask weak U.S. corporate sales outlook.

CNBC:

• Flood of Easy Money Putting This Region at Risk. The risk of asset bubbles in Southeast Asia's fastest-growing emerging economies is rising, warn economists, pointing to red flags including surging domestic credit growth and rapidly rising property prices. 

• Algorithms Replacing Wall Street Analysts, Investors. 

• Herbalife(HLF) Earnings Beat but Q2 Outlook Falls Short.

• $3.3 Billion Lost in Unemployment Fraud: Study. Unemployment fraud is costing the government billions of dollars in paid benefits to people who are still working, no longer alive or are behind bars, according to a new report.

Zero Hedge: 

• Why The Fed's Buy-And-Hold (No Sales) Exit Is Not Feasible. 

• "Freely Traded Markets Are An Anachronism; Fundamental Rules No Longer Apply". (graphs)

• Weaponized America: Sturm, Ruger(RGR) Backlog Doubles; Gun Production, Shipments Surge. (graphs)

• IceCap Asset Management: "Achtung Baby". (graphs)

• Presenting: The Housing Bubble 2.0. (graph)

Business Insider: 

• Marc Andreessen Describes How Google(GOOG) Glass Will Revolutionize Health Care. 

• MEREDITH WHITNEY: Something's Got To Give As Muni Bonds Enter A 'Negative Feedback Loop From Hell'. 

• There Could Be As Many As 10,000 Drones Above US Skies By 2020.  

• Newest Member Of Dzhokhar Tsarnaev's Defense Team Known For Saving Clients From The Death Penalty. 

• NYSE Trader Explains The Dangers Of Anonymous Trading In Dark Pools.

Reuters:

• Japan March retail sales fall 0.3 pct year/year. Japanese retail sales fell 0.3 percent in March from a year earlier, government data showed on Tuesday, down for a third straight month, in a sign the economic recovery is proceeding at a slow pace. The fall compared with the median market forecast for a 0.6 percent annual increase.

• Express Scripts(ESRX) profit tops Wall St view, ups forecast. Express Scripts Holding Co on Monday reported higher-than-expected first-quarter earnings, helped by greater use of more profitable generic medicines, and the pharmacy benefit manager raised its full-year forecast. 

• Riverbed(RVBD) results miss estimates as customers cut spending. Riverbed Technology Inc reported quarterly results below analysts' estimates due to weak spending by businesses and the U.S. government, and it forecast a lackluster second quarter, sending its shares down 8 percent.

Financial Times:

• Fed faces calls for radical reform. A senior Republican congressman has called for everything from the gold standard to a price level target to be on the table in a 100th anniversary review of the Federal Reserve’s mandate. Kevin Brady, who chairs the joint economic committee, wants Congress to appoint a bipartisan commission that could lead to a radical change in the mandate of the world’s largest and most important central bank.

Telegraph:

• Italian showdown with Germany as Enrico Letta rejects 'death by austerity'. Italy’s new premier Enrico Letta is on a collision course with Germany after vowing to end death by austerity, and warned that Europe itself faces a “crisis of legitimacy” unless it charges course.

Evening Recommendations 

• None of note

Night Trading

• Asian equity indices are unch. to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 107.0 -4.5 basis points.

• Asia Pacific Sovereign CDS Index 87.0 -1.0 basis point.

• FTSE-100 futures +.27%.

• S&P 500 futures -.04%.

• NASDAQ 100 futures +.02%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (NYX)/.56

• (PFE)/.55

• (X)/-.22

• (VLO)/.99

• (AMG)/2.03

• (PBI)/.44

• (COCO)/.05

• (AGCO)/.88

• (CMI)/1.86

• (AVP)/.14

• (DBD)/.17

• (FDP)/.95

• (DDD)/.21

• (THC)/.30

• (ZTS)/.33

• (AET)/1.38

• (HOT)/.53

• (ODP)/.04

• (OSK)/.86

• (TRW)/1.43

• (DPZ)/.55

• (BXP)/1.21

• (JLL)/.23

• (EQR)/.63

• (IACI)/.68     

Economic Releases
8:30 am EST

• The 1Q Employment Cost Index is estimated to rise +.5% versus a +.5% gain in 4Q. 

9:00 am EST

• The S&P/CS 20 City MoM% SA for February is estimated to rise +.9% versus a +1.0% gain in January. 

9:45 am EST

• The Chicago Purchasing Manager Index for April is estimated to rise to 52.5 versus 52.4 in March.

10:00 am EST

•  Consumer Confidence for April is estimated to rise to 61.0 versus 59.7 in March.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Eurozone Unemployment Rate, China Government Manufacturing PMI, US Loan Officer Survey, Canada GDP report, NAPM-Milwaukee for April, weekly retail sales reports, Needham Healthcare Conference and the Barclays Retail/Consumer Discretionary Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology shares in the region. I expect US stocks to open modestly higher and weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Less Eurozone Debt Angst, Central Bank Hopes, Short-Covering, Healthcare/Commodity Sector Strength

Broad Market Tone:

• Advance/Decline Line: Higher
  

• Sector Performance: Most Sectors Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 13.51 -.73%

• ISE Sentiment Index 160.0 +41.69%

• Total Put/Call .89 unch.

• NYSE Arms .71 -44.13%

Credit Investor Angst:

• North American Investment Grade CDS Index 76.18 -2.6%

• European Financial Sector CDS Index 152.99 -3.94%

• Western Europe Sovereign Debt CDS Index 94.33 -.97%

• Emerging Market CDS Index 233.15 -2.61%

• 2-Year Swap Spread 13.75 -.5 bp

• TED Spread 22.75 -.25 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -18.0 -.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.

• Yield Curve 146.0 +1 bp

• China Import Iron Ore Spot $134.10/Metric Tonne unch.

• Citi US Economic Surprise Index -5.3 +7.1 points

• 10-Year TIPS Spread 2.36 -2 basis points

Overseas Futures:

• Nikkei Futures: Indicating +46 open in Japan

• DAX Futures: Indicating +48 open in Germany

Portfolio: 

• Higher: On gains in my retail/biotech/tech/medical sector longs

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Euro-Area Economic Confidence Falls More Than Forecast. Economic confidence in the euro area decreased more than economists forecast in April as the 17- nation currency bloc struggled to emerge from a recession and the bailout of Cyprus renewed debt-crisis concerns. An index of executive and consumer sentiment dropped to 88.6 from a revised 90.1 in March, the European Commission in Brussels said today. That’s the lowest since December. Economists had forecast a decline to 89.3, according to the median of 26 estimates in a Bloomberg News survey. Business confidence and investor sentiment in Germany, Europe’s largest economy, dropped more than expected in April. European Central Bank President Mario Draghi said on April 19 that the economic situation in the bloc hadn’t improved since the beginning of the month. At the same time, Draghi expects the economy to recover from a recession later this year and economists forecast growth in the second quarter, a separate Bloomberg survey shows. 

• Fiat First-Quarter Profit Falls on Chrysler Earnings Drop. Fiat SpA (F), the Italian automaker that controls Chrysler Group LLC, said first-quarter profit fell 23 percent on costs for new Jeep model rollouts.

• Europe Stocks Rise on Italy, U.S. Consumer-Spending Data. European stocks rose, pushing the Stoxx Europe 600 Index toward its longest streak of monthly gains since 1997, as Italy formed a new government and as U.S. consumer spending unexpectedly increased in March. Aberdeen Asset Management Plc surged to its highest price in 12 years after increasing its dividend. Swedish Match AB jumped the most since January 2009 after posting first-quarter profit that beat estimates. Balfour Beatty Plc dropped to the lowest price in 17 months after lowering its full-year profit forecast. The Stoxx 600 advanced 0.5 percent to 297.39, its highest level since April 2. The benchmark gauge has climbed 1.2 percent in April, its 11th month of gains, as investors bet the region’s central bank will cut rates and as companies reported better- than-expected results.

• Surveillance Cameras Sought by Cities After Boston Bombs. A pedestrian who strolls through Boston’s Financial District, an area of about 40 city blocks, can be seen by at least 233 private and public cameras. In the aftermath of the terrorist bombing there on April 15, Boston Police Commissioner Edward Davis wants even more cameras to boost street-level surveillance, said spokeswoman Cheryl Fiandaca. Other cities, too, now may be spurred to expand their systems, which security specialists said will fuel sales growth in the $3.2 billion video surveillance industry. Such actions increase tensions between law enforcement officials and privacy advocates, who say they worry about Big Brother intrusions into people’s legal activities.

• Hospital Stocks Rally as Medicare Tempers Budget Cut Blow. HCA Holdings Inc. (HCA), Tenet Healthcare Corp. (THC) and other hospital stocks rose the most in at least six months after the U.S. government proposed new Medicare payment rates that would soften the blow of federal budget cuts. HCA, the largest for-profit hospital company in the U.S., rose 5.5 percent to $40.35 at 10:59 a.m. New York time.

• Gold Futures Rise on Fed Stimulus Bets; Platinum Jumps. Gold futures for June delivery rose 1.1 percent to $1,469.90 an ounce at 11:59 a.m. on the Comex in New York. The price headed for the biggest monthly drop since December 2011 after entering a bear market on April 12.

CNBC:

• Bayer to Buy Birth-Control Devices Maker for $1.1 Billion. Germany's Bayer AG has agreed to buy U.S. contraceptive devices maker Conceptus for $1.1 billion, aiming to underpin its position as the world's largest women's healthcare provider. Bayer, whose shares were down 2.3 percent by 0823 GMT, will launch a public tender offer to acquire all Conceptus shares for $31.00 each in cash, in an offer agreed with Conceptus's management, Bayer said on Monday.

• Growth Outlook Leaves Commodity Investors Cold. Investors are staying away from commodities, fearing that the worst is yet to come after prices plunged in April on signs of slower world economic growth. Wealth managers have been pulling money from commodities since the start of the year, culminating in a major sell off in April when investors dumped gold, copper and oil. Poor economic data from China, Europe and the United States has hit global growth forecasts, making investors reassess the demand for raw materials.

• Pending Home Sales Tick Upward in March. Contracts to buy existing homes rose slightly in March, as a historically low supply of for-sale listings nationwide continues to plague the housing market. The Pending Home Sales Index from the National Association of Realtors increased 1.5 percent month to month. It is 7 percent higher than March 2012.

• Why the Jobs Outlook Just Got a Whole Lot Worse. Weak corporate top-line growth is likely to spell an equally troubled bottom line for the 11.7 million unemployed. 

Zero Hedge:

• Euro Area Savings Rate Drops To Record Low, Disposable Income Has Biggest Drop Ever. (graph)

• Spending On Services Jumps By Most Ever As Incomes Disappoint, Savings Rate Near Five Year Lows. (graph)

• Italy: "An Orgy Worthy Of Bunga Bunga". (graph)

• Dallas Fed Implodes: Biggest Drop And Miss On Record Send Market To Intraday Highs. (graph)

• This Is What Passes For A Good Earnings Season In The "New Normal". (table)

Business Insider:

• New Footage Of Attack On Cairo Cathedral Confirms The Coptics' Worst Fear. New footage from a recent attack against Coptic churchgoers in Cairo appears to show police allowing and even participating in the violence.

• CHART OF THE DAY: Corporations Are Now Growing Profits As Sales Actually Fall.

• TAMERLAN TSARNAEV: Here's What Was Known, And Who Knew It, Before The Boston Bombing.

• Most Chinese Cities Don't Need And Can't Afford The Subway Systems They're Building.

• Google's(GOOG) Next-Generation Search App Is Now Available For iPhones And iPads.

• Secretly, Some Wall Streeters Think The Industry Is Greedier Than Ever.

• Facebook(FB) Is Losing Millions Of Users In The US And Other Mature Markets.

• Why Shorting The Aussie Is The 'Trade of the Century'.

• The Horrendous State Of The European Consumer [CHART].

Reuters:

• North Korea holds back seven South Koreans at industrial zone. North Korea held back seven of 50 remaining South Koreans at the suspended jointly run factory zone north of the heavily armed border on Monday, citing last-minute checks on taxes and wages. The North withdrew its 53,000 workers from the complex this month amid spiraling tension between the two Koreas. The North had prevented South Korean workers and supplies from getting in to the zone since April 3.

• Deutsche Boerse(DB) Q1 misses forecasts as trading drags. Deutsche Boerse reported a greater-than-expected 26 percent drop in operating profit for the first quarter as low interest rates and reduced equity market volatility dented the exchange operator's revenue. 

• German, UK banks slam US plans to toughen capital rules. German and British banking lobby groups on Monday slammed plans by U.S. regulators to toughen rules on foreign banks, saying they risk fragmenting banking supervision and causing major disruption to U.S. bank operations. Germany's banking association, BdB, said the push by U.S. regulators to tighten oversight of foreign banks would put European banks at a competitive disadvantage internationally.

• As shale booms, US crude oil exports jump to 13-yr high. U.S. crude oil exports doubled in February to a 13-year high of 124,000 barrels per day (bpd), government data showed on Monday, as shipments of surplus shale crude to Canada gathered pace. Exports jumped from an average of around 60,000 bpd last year, and have soared from less than 10,000 bpd in 2002, as Canada's refineries increase rail or tanker deliveries, monthly figures from the U.S. Energy Information Administration (EIA) showed.

• Moody's: High pace of US public finance downgrades continues. Moody's Investors Service continued to downgrade more public finance ratings than it upgraded in the first quarter of 2013, primarily because of cuts to California local governments, the rating agency said on Monday. "We expect rating activity to continue to be skewed toward downgrades over 2013 as local governments continue to struggle with increasing pension and healthcare costs and constraints on key property tax and state aid revenue sources," Moody's Assistant Vice President and Analyst Eileen Hawes said in a statement.

• Copper supported by policy-easing hopes, physical demand. Copper rose on Monday, extending a recovery from 1-1/2 year lows hit last week supported by hopes for more U.S. and European central bank monetary easing and on signs of life in the physical markets.

Telegraph:

• S&P sees deepening house slump in Spain, France and Holland. Spanish house prices are to fall a further 13pc by the end of next year as the authorities flood the market with a backlog of repossessed properties, Standard and Poor’s has warned.