Today's Headlines

Bloomberg:

• Consumer Confidence in U.S. Rose More Than Forecast in April. Confidence among U.S. consumers increased more than forecast in April, signaling the improving labor market is helping Americans weather rising fuel costs. The Conference Board’s confidence index rose to 65.4 from a revised 63.8 reading in March, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called projected an advance to 64.5. The group’s measure of present conditions increased to 39.6, the highest since November 2008, from 37.5 a month earlier. The gauge of expectations for the next six months rose to 82.6 from 81.3. The share of consumers who said jobs are currently plentiful rose to 5.2 percent from 4.6 percent. Those who said jobs are hard to get decreased to 41.8 percent, the fewest since January 2009, from 44.4 percent. The percent of respondents expecting more jobs to become available in the next six months decreased to 17.5 from 19.6 the previous month. The share expecting incomes to rise over the next six months improved to 16.7 percent from 15.2 percent. The share of Americans planning to buy a house over the next six months increased to 5.5 percent, matching the record high reached in January 1978. Data go back to 1964. Intentions to purchase automobiles and appliances also improved.
• 3M Boosts Forecast as Renewable Energy Helps Top Estimates. 3M Co. (MMM) boosted its full-year earnings forecast after first-quarter profit surpassed analysts’ estimates. Profit this year will be $6.27 to $6.47, excluding pension- related expenses, compared with a February forecast of $6.17 to $6.42 a share, the St. Paul, Minnesota-based maker of Scotch tape said today in a statement. Sales increased about 20 percent at the industrial and transportation division, whose products include films for solar panels and windows, and at the electronics and communications unit, which makes films for smartphones. 3M said the earthquake and tsunami in Japan will curb 2011 profit by 10 cents to 13 cents a share, and favorable currency translation will help offset that. “The year has started off better than we would have expected,” Stephen Tusa, a JPMorgan Chase & Co. analyst in New York, wrote today in a note.
• IBM Boosts Dividend, Authorizes $8 Billion for Stock Repurchases. International Business Machines Corp. (IBM), the biggest computer-services provider, increased its quarterly dividend 15 percent and set aside more money for share buybacks, sending the stock to a record. The quarterly payout will rise by 10 cents for the second straight year, to 75 cents a share, IBM said today in a statement. IBM added $8 billion to the stock-repurchase plan, bringing the total authorized by the board to $12.7 billion.
• UPS's(UPS) Next-Day Delivery Gains Show Improvement in 'Core Economy'. United Parcel Service Inc. (UPS)’s next- day package shipments rose in the first quarter as business customers refilled stockpiles to meet higher demand from the recovering economy, Chief Financial Officer Kurt Kuehn said. Boxes shipped using the UPS’s Next Day Air service climbed in the “mid-single digits” as companies sought to restock goods faster after adapting to leaner inventory during the recession, Kuehn said in a telephone interview. The gains reflect “some of the increased velocity in the core economy with manufacturing and finished goods,” Kuehn said.
• Greek Deficit Tops Forecasts as Euro-Area Debt Reaches Record. Greece’s budget deficit exceeded goverment estimates and the euro area’s overall debt reached a record, narrowing Europe’s options for putting an end to the fiscal crisis. Greece’s shortfall was 10.5 percent of gross domestic product in 2010, higher than a 9.4 percent estimate made by the Greek government in February, official European Union figures showed today. Greek bond yields surged, rekindling speculation that a debt write-off or extension of the country’s repayment timelines will be the only way out of the fiscal trap. "I don’t think that Greece will succeed in this consolidation strategy without any restructuring in the future, or perhaps also in the near future,” Lars Feld, a member of the German government’s council of economic advisers, told Bloomberg Television’s Nicole Itano in Frankfurt. “Greece should restructure sooner than later.” Two-year Greek yields rose as much as 64 basis points to 23.65 percent, before slipping back to 23.41 percent as of 11:13 a.m. in London. Ten-year yields reached 15.26 percent. Portugal’s two-year note yields touched 11.62 percent, before easing to 11.53 percent. All of the yields reached records. The cost of insuring debt sold by Greece and Portugal rose to records, according to traders of credit-default swaps. Contracts on Greece jumped 13 basis points from April 21 to 1,345 basis points, signaling a 66 percent chance of default within five years, according to CMA. Portuguese swaps climbed six basis points to 666. Debt rose in all 16 countries using the euro last year to 85.1 percent of GDP from 79.3 percent in 2009, today’s Eurostat report showed. Aggregate euro-area debt moved closer to the 90 percent level that economists Kenneth Rogoff and Carmen Reinhart say can weigh on long-term growth prospects. Greece’s debt ballooned to 142.8 percent of GDP, the highest in the euro’s 12-year history, the EU figures showed. Ireland’s debt surged the most, by 30.6 percentage points to 96.2 percent of GDP.
• Food Costs Seen Reaching a Record High This Year as Inflation Accelerates. Global food prices may rise 4.4 percent to a record by the end of the year, driven by demand for meat, oilseeds and grains used to make ethanol, adding to costs that mean inflation is accelerating from the U.S. to China. The United Nations’ Food Price Index may climb to 240 points from 229.84 last month, said William Adams, a fund manager at Zurich-based Resilience AG, which has $22.2 million of assets. Global corn stockpiles are shrinking the most in seven years, inventories of nine edible oils will drop to the lowest since 1974 and U.S. beef stocks will be the smallest since 1999, the U.S. Department of Agriculture estimates. “The stockpiles are being severely depleted,” said Adams, who correctly forecast gains in heating oil and gasoline prices last year. “Eventually it gets to the consumer. The U.S. government isn’t subsidizing pork chops like it is ethanol.”
• Vertex(VRTX) Rises After FDA Staff Says Hepatitis C Drug is Effective. Vertex Pharmaceuticals Inc. (VRTX) rose 12 percent in intraday trading after U.S. regulators said the company’s experimental hepatitis C drug cures more patients than current therapies.

Wall Street Journal:

• U.S. Government Efforts to Remove Drug CEO Jolts Firms. A government attempt to oust a longtime drug-company chief executive over his company's marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world. The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration. If the government implements its ban, Forest would have to dump Mr. Solomon, now 83 years old, in order to protect its corporate revenue.
• Lee Warns of Further Inflation for U.S. Former Singapore Prime Minister Lee Kuan Yew said a stronger local currency could help ease inflation in the fast-growing Asian city-state, even as he warned of a continued weak U.S. dollar—and potentially more inflation—in the U.S.
• Nations Pursue U.N. Censure of Syria. Syrians resumed protests Tuesday, less than a day after military tanks and troops killed at least 25 people in the southern city of Deraa, as activists appeared to defy the fear that has sustained the Assad regime for decades. World leaders stepped up condemnation of the escalating violence used by the government of President Bashar al-Assad, who is facing the largest threat to his rule as protests across Syria move into their sixth week.
• Strong Demand Revs Up Ford(F) Profit. Ford Motor Co., showing little impact from rising U.S gasoline prices or the Japan earthquake, said its first-quarter profit rose 22%, fueled by higher vehicle sales and pricing, especially in North America, its most important region.

CNBC.com:

• Hazing at Goldman Sachs(GS).
• 'Crown Jewel' Rig Will Go Ultra-Deep for New Oil. In the scenic resort town of Angra dos Reis in Brazil, Petrobras(PBR) is nearing completion of its latest oil platform, the massive P-56.
• Despite Rally, ETFs That Bet Against Stocks Gain Popularity. Exchange-traded funds that bet against further gains, in fact, have been hugely popular with investors, making the group the fastest-growing fund class in the $1.1 trillion ETF industry. The so-called "inverse" ETFs, which can sometimes pay double or triple the opposite move of the benchmarks they track, have seen a 16 percent growth in assets this year, against 4 percent for the industry as a whole.

Business Insider:

• The Incredible Shrinking New York Times(NYT).
• Turkish President Warns Netanyahu Israeli Security Hinges On Palestinian Peace Agreement.
• If Food Prices Keep Climbing, These Economies Will Be The Next To Crumble.
• A Majority of Egyptians Want to Institute Islamic Law and Cancel the Peace Treaty With Israel.
• Here's Exactly What To Expect From Tomorrow's Fed Press Conference.

Zero Hedge:

• Latest Chinese Fraud Du Jour: Gulf Resources(GFRE), Price Target $0.00.

NY Post:

• Apple's(AAPL) Parts Grab. Apple CEO Steve Jobs is cracking his $66 billion piggybank to ensure he has enough parts to meet demand for his popular gadgets. The world's No. 1 tech company has committed $11 billion of its enormous cash pile to protect the supply chains for Macs, iPhones, iPads and other gadgets, according to a regulatory filing yesterday. That represents about a 40 percent increase over the previous quarter allocated to locking up its global supply chain of high-tech components for its devices. The aggressive move puts Apple in a position of even greater strength compared to rivals as they all struggle for limited electronics resources.

TechCrunch:

• Google's(GOOG) YouTube Partners With Fox in Movie Rental Expansion.

cnet:

• Expect Apple(AAPL) to Charge for Music Cloud. Music industry insiders told me that Apple has indicated it could offer the service free of charge initially but that company will eventually require a fee. Google is also expected to charge for a similar service.
  

Reuters:

• Silver Down 5%; Gold Slips Ahead of Fed Meeting.

USA Today:

• New Yorkers Lead Pack in Government Benefits. New Yorkers get more government aid per person from social programs than residents of any other state, a USA TODAY analysis finds. The state's Medicaid program is the most expensive in the nation, driving the average cost of all government benefits in New York to $9,442 per person. New York ranks 28th in Social Security payments per person and 9th in Medicare benefits. But the spending on Medicaid, the health program for the poor, is far above that in any other state. Only Washington, D.C., spends more.
• Americans Depend More on Federal Aid Than Ever. Americans depended more on government assistance in 2010 than at any other time in the nation's history, a USA TODAY analysis of federal data finds. The trend shows few signs of easing, even though the economic recovery is nearly 2 years old. A record 18.3% of the nation's total personal income was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs in 2010. Wages accounted for the lowest share of income — 51.0% — since the government began keeping track in 1929. The wage decline has continued this year. Wages slipped to another historic low of 50.5% of personal income in February. From 1980 to 2000, government aid was roughly constant at 12.5%. The sharp increase since then — especially since the start of 2008 — reflects several changes: the expansion of health care and federal programs generally, the aging population and lingering economic problems. Americans got an average of $7,427 in benefits each in 2010, up from an inflation-adjusted $4,763 in 2000 and $3,686 in 1990. The federal government pays about 90% of the benefits. "What's frightening is the Baby Boomers haven't really started to retire," says University of Michigan economist Donald Grimes of the 77 million people born from 1946 through 1964 whose oldest wave turns 65 this year. "That's when the cost of Medicare will start to explode."
• GOP's Gamble on the Budget Pays Off, So Far. A new USA TODAY/Gallup Poll finds that House Republicans, who took a political risk in passing a controversial budget blueprint last week, have survived so far with some key advantages intact as Congress moves toward the debate on raising the debt ceiling, passing the 2012 budget and enacting a long-term deficit plan. Americans are evenly divided between the deficit plan proposed by President Obama and the one drafted by House Budget Chairman Paul Ryan, and those surveyed put more trust in Republicans than Democrats to handle the federal budget and the economy. Pessimistic about the economy and the nation’s course, they overwhelmingly blame too much spending for soaring federal deficits and want to rely more on spending cuts than tax hikes to get it under control.

Telegraph:

• WikiLeaks: Guantanamo Bay Terrorists Radicalized in London to Attack Western Targets. At least 35 terrorists incarcerated at Guantánamo Bay were sent to fight against the West after being indoctrinated by extremist preachers in Britain, secret files obtained by The Daily Telegraph disclose.

Irish Times:

• Average Ireland House Price Could Still Be Overvalued by Up to 30%. Price to income ratios suggest there is a way to go yet before property prices stabilise.

Tea Nea:

• IMF Managing Director Dominique Strauss-Kahn, ECB President Jean-Claude Trichet and European Commission for Economic and Monetary Affairs Olli Rehn may visit Greece next month.

Mehr News Agency:

• Bahrain's charges of spying against an Iranian diplomat are "baseless" and Iran's government may retaliate, said Ramin Mehmanparast, a Foreign Ministry spokesman.