Today's Headlines

Bloomberg:

• U.K.’s Top Credit Grade Cut by Fitch on Economy, Fiscal Outlook. Britain lost its top credit grade at Fitch Ratings, which cited a weaker economic and fiscal outlook as it became the second company to cut the country’s rating within two months. Fitch lowered the U.K. to AA+ from AAA with a stable outlook, it said in a statement in London today. It cut its growth projection and forecast that debt would peak at 101 percent of gross domestic product in the fiscal year 2015-2016. “Despite the U.K.’s strong fiscal financing flexibility underpinned by its own currency with reserve-currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with an AAA rating,” Fitch said. 
• Prodi’s Presidential Bid Vulnerable in Secret Ballot. Romano Prodi failed to win the Italian presidency in a parliamentary vote today as his wounded party was unable to maintain discipline and resistance from rival forces intensified. Prodi, the two-time ex-prime minister and former European Commission president, as defections left him more than 100 votes short of a majority in the parliamentary vote in Rome. It was the fourth inconclusive ballot since voting started yesterday and dealt Pier Luigi Bersani, head of the Democratic Party, another defeat in his bid to unlock the impasse.  
• Weidmann Says ECB Would Only Cut Rates If Data Worsen. European Central Bank Governing Council member Jens Weidmann said the bank would only cut interest rates if economic data worsen. “We didn’t change interest rates at our last meeting as they are currently appropriate and in accordance with our assessment of economic developments, price stability and our monetary analysis,” Weidmann, who heads Germany’s Bundesbank, said today at a press conference in Washington. “Of course, we will reassess the adequacy of the rates if the data change.”
• BofA(BAC) Sees ‘Impossible Trinity’ in Markets as Risks Underpriced. Commodities, stocks and bonds are sending conflicting signals on the health of the global economy, an “impossible trinity” that may end with a surge in market volatility, according to Bank of America Corp. The S&P GSCI Spot Index of 24 raw materials has retreated 10 percent in the past two months, while the Standard & Poor’s 500 Index rose 1.4 percent and bond yields in emerging markets and so-called peripheral European nations declined. Commodities are signaling a slowdown in global growth, while stocks reflect expectations of strong U.S. consumer spending and credit markets anticipate greater demand from Japanese households for high-yielding assets, David Woo, the head of global rates and currencies research at Bank of America Merrill Lynch, wrote in a note dated yesterday. It’s unlikely all these markets will prove correct and investors are underestimating the risk of a “major re-alignment” of prices, Woo said. “Something will have to give,” Woo wrote.
• SAP's(SAP) McDermott Sees Choppy Public Spending in U.S., China. SAP AG (SAP), the largest maker of business-management software, projected a difficult market for its government business amid cuts in U.S. federal spending and China’s transition to a new leadership. “It’s going to be choppy out there in the public sector,” co-Chief Executive Officer Bill McDermott said in a telephone interview today. “Chinese purchasing patterns have definitely slowed down.”
• U.S. Hospitals Told to Be on Lookout for H7N9 Bird Flu. U.S. hospitals are being urged to head off a spread of the new H7N9 avian influenza by looking out for people exhibiting flu-like symptoms who have traveled to China or had contact with someone who has the illness.
• Copper Falls to Lowest Since October 2011, Entering Bear Market. Copper slumped into a bear market in London on concern slowing economies from China to the U.S. will reduce demand as supply of the metal expands. Copper for delivery in three months fell 1.4 percent to $6,990 a metric ton by the close on the London Metal Exchange today. That was below the level of $6,992 marking a 20 percent drop from the February 2012 closing high, a common definition of a bear market.
• GE(GE) Falls Most Since 2011 After Power Unit Saps Industrial Profit. General Electric Co. fell the most since 2011 after a first-quarter slide in its Power & Water business pulled total industrial earnings down 11 percent. Profit at GE’s manufacturing businesses fell to $2.94 billion as sales slid 5.7 percent to $22.7 billion, the company said in a statement. The decline was led by a 39 percent drop in earnings at the power and water unit, which makes products including gas-powered and wind turbines. “We planned for a continued challenging environment in Europe, but conditions weakened further,” Chief Executive Officer Jeffrey Immelt said in the statement, with manufacturing and service revenue in the region declining 17 percent.
• Flu Experts Probe H7N9 Outbreak as Cases Double in a Week. Influenza specialists from around the world are converging on China to help authorities identify how people are catching the new H7N9 bird flu strain after the number of reported cases there doubled in the past week. China recorded its 88th H7N9 infection yesterday. Seventeen of the cases have been fatal and “several” patients are in critical condition, according to the World Health Organization. “That’s a fairly high mortality rate,” Michael O’Leary, the WHO’s China representative, told reporters in Beijing today. Less severe cases may have escaped detection, he said. “What we don’t know is the size of the iceberg under this tip.

Wall Street Journal: 

• Boston Gripped by High-Stakes Manhunt. Suspect Still at Large Is Identified as 19-Year-Old of Chechen Background; Older Brother Killed in Shootout. The Boston area remained on lockdown into the afternoon Friday as authorities conducted a manhunt for one of two brothers of Chechen background suspected in Monday's Boston Marathon bombings and a deadly showdown that began unfolding Thursday night. Authorities identified one suspect as 26-year-old Tamerlan Tsarnaev, who was killed in a confrontation with police in Watertown, Mass., according to a U.S. law-enforcement official. A manhunt was on for the second suspect, identified as Dzhokhar Tsarnaev, 19 years old. Both brothers were believed to be involved in the fatal shooting of a Massachusetts Institute of Technology campus police officer during Thursday night's chaotic series of events. Police warned residents that the at-large suspect was armed and dangerous. "We believe this to be a terrorist," said Boston Police Chief Ed Davis. "We believe this to be a man who's come here to kill people. We need to get him in custody."
• The Boston Bombings: Live Updates. 
• Texas Plant Explosion: Live Updates.
• Regulators Worry Mortgage REITs Pose Threat to Financial System.
• Boy Scouts Propose Lifting Gay Ban on Kids, but Not Adults. The Boy Scouts of America on Friday proposed to change their membership policy to allow gay youth into its programs for the first time, but continue to ban gay adults.

Fox News:

• Pakistan's Musharraf lashes out at accusers following arrest. Former Pakistani military ruler Pervez Musharraf criticized allegations against him as "politically motivated" Friday, following his arrest in a case involving his decision to fire senior judges while in power. Musharraf was arrested a day after he made a dramatic escape from a court in Islamabad on Thursday to avoid being detained. Musharraf fled the Islamabad High Court in a speeding vehicle and holed up in his home on the outskirts of the city after a judge rejected his bail and ordered his arrest. It was a new low in Musharraf's troubled return from self-imposed exile last month to attempt a political comeback in the upcoming parliamentary election.

CNBC: 

• McDonald's(MCD) Profit Rises; Falls Short of Wall Street's Hopes. McDonald's on Friday reported first-quarter profit that rose but fell short of market expectations, undermined by weaker international sales and U.S. consumers that appeared to dine out less. 
• IBM's(IBM) Ominous Sign to the Stock Market. IBM's poor earnings performance in the first quarter likely foretells a rough time ahead for the stock market.
• Wall St. Redux: Arcane Names Hiding Big Risk. The alchemists of Wall Street are at it again.
  The banks that created risky amalgams of mortgages and loans during the boom — the kind that went so wrong during the bust — are busily reviving the same types of investments that many thought were gone for good. Once more, arcane-sounding financial products like collateralized debt obligations are being minted on Wall Street.

Zero Hedge: 

• Letter Bomb Intercepted At German President's Residence. 
• The Chart Making The Fed Nervous.
• German Stocks Have Worst Week In 10 Months. (graphs)
• According To 'French' Fitch, France Is Now Rated Higher Than The UK. (graphs)
• Chechen President Statement On Boston Bombers: "Seek The Roots Of Their Evil Inside America".

Business Insider: 

• Dad Wants Bomb Suspect To 'Surrender Peacefully' But Vows That 'All Hell Will Break Loose' If He Is Killed.
• Video From The Crazy Shootout Between Police And Boston Suspects.
• Jim Chanos's New China Presentation Will Have You Convinced The Country Is Doomed For A Hard Landing.
• ANALYST: The Most Shorted Stocks In The Market Are Making A 'Scalded Dog Formation'. 
• 12 Signs The Economy Is Slowing Down.
• PC Makers Are Privately Grumbling That Microsoft(MSFT) Is 'Destroying' The PC Market With Windows 8.
• POLICE CHASE TERROR SUSPECTS ACROSS BOSTON [PHOTOS].

Reuters:

• Fed's Stein backs putting price on bank access to liquidity. Regulators should keep an "open mind" about making banks pay up front for access to central bank liquidity as part of new rules to ensure that big firms can withstand severe financial stress, a senior U.S. Federal Reserve official said on Friday. Fed Board Governor Jeremy Stein, weighing in on the complex issue of liquidity coverage ratios being worked on by the Basle banking committee, also said it made no sense to allow unpriced access to central banks' 'lender of last resort' capacity.
• METALS-Copper falls on economic growth concerns, rising supply.
• INVESTMENT FOCUS-Yen slide echoes '97 emerging crisis for some. While many investors have greeted the prospect of new Japanese money flooding world markets as a windfall, some strategists warn a sliding yen could yet shock Asia and developing countries. 

Telegraph: 

• ECB should limit amount of liquidity in the eurozone, says Wolfgang Schaeuble. The European Central Bank should try to limit the amount of the liquidity in the eurozone, Germany's finance minister has said, as he warned that pumping money into crisis hit economies would not create growth if they were not matched by reforms.

Handelsblatt:

• German Companies See Sustained Weak Euro Area. German small- and medium-sized companies expect euro area economies to remain weak in M/T, potentially impacting cross-border investment plans, citing a TNS Infratest survey for Commerzbank. 81% of 4,000 companies expect weak economic growth in euro area. 68% of respondents expect increasing finance problems for companies.