Britain Lowers NatWest Stake with $1.5 Billion Share Sale

UK Government Investments (UKGI), the state-owned company that controls the shares, said the they were priced at 190 pence, 4% below Monday’s closing price of 197 pence.

NatWest has been majority state-owned following a 45 billion-pound bailout in 2008 during the financial crisis. The sale crystallises a further hefty loss of around 1.8 billion for taxpayers, with shares well below the 502 pence bailout level.

The move edges the bank closer to private ownership, reducing the government’s holding from 60% previously.

The government’s last sale of stock to outside investors was in 2018, although NatWest directly bought back 1.1 billion pound of shares last month to reduce the state’s holding from 62%.

NatWest shares fell around 4% in early trading to around the latest sale price. They are also below the 2018 sale price of 271 pence a share.

The government said it continued to keep all options and timings under review for future sales.

NatWest’s stock price has more than doubled since hitting a low of 90.5 pence in September, as optimism has built about prospects for Britain’s economic recovery from the COVID-19 pandemic.

NatWest, formerly Royal Bank of Scotland, has long argued it is unrealistic to expect a profit on the bank’s rescue, which was needed to stabilise Britain’s financial system.

The bookrunners on the sale were Barclays, Citigroup, Goldman Sachs and Morgan Stanley. Rothschild & Co is acting as adviser to UKGI.

Two months ago, Britain’s financial regulator said it had started a criminal action against NatWest over allegations it failed to detect suspicious activity by a customer depositing nearly 400 million pounds over five years, mostly in cash.

($1 = 0.7084 pounds)

(Reporting by Iain Withers; Editing by Rachel Armstrong, Jason Neely and Pravin Char)

Exclusive: Tesla Puts Brake on Shanghai Land Buy as U.S.-China Tensions Weigh

With 25% tariffs on imported Chinese electric vehicles imposed on top of existing levies under former President Donald Trump still in place, Tesla now intends to limit the proportion of China output in its global production, two of the four people said.

Tesla had earlier considered expanding exports of its China-made entry-level Model 3 to more markets, including the United States, sources told Reuters, a plan that had not previously been reported.

Tesla currently ships China-made Model 3s to Europe, where it is building a factory in Germany.

Tesla’s Shanghai factory is designed to make up to 500,000 cars per year, and is currently producing Model 3 and Model Y vehicles at a rate of 450,000 units per year.

In March, Tesla refrained from bidding on a plot of land across the road from the plant as it no longer aimed to boost China production capacity significantly, at least for now, three of the people said, declining to be named as the discussions were private.

In a statement to Reuters, Tesla said its Shanghai factory was “developing as planned”.

The Shanghai city government, a key supporter in Tesla’s establishment of a wholly-owned factory in China – the first and only foreign passenger car plant not required to form a joint venture – did not respond to a request for comment.

Tesla had never declared an intention to acquire the land, which is about half the size of the 200-acre (80 hectare) plot housing Tesla’s current facility and would enable the company to lift capacity by another 200,000 to 300,000 cars, said two of the people.

Tesla’s China sales are surging despite mounting regulatory pressure in the country after consumer disputes over product safety and scrutiny over how it handles data.

It generated $3 billion in revenue in China in the first three months of this year, more than tripling year-earlier sales and accounting for 30% of total revenue.

LAND PLANS

Led by mercurial CEO Elon Musk, Tesla is known for shifting gears on strategy, including in China.

Construction documents posted on a government website in March show Tesla is revamping its plant in Shanghai to add capacity.

Tesla still has land, designed for production but now used for parking, at its Shanghai site. One of the people said Tesla could expand its capacity beyond 500,000 on its existing site. Another said Tesla may acquire more land for more car production lines in the future.

Separately, Tesla is building facilities to repair and reproduce key components such as electric motors and battery cells and build EV chargers at its Shanghai plant.

The Shanghai government has been talking to several companies to sell the land for new-energy commercial vehicle production, said a person with direct knowledge of the matter.

Tesla faces intensifying competition in China with domestic players such as Nio Inc, which is considering making mass market products under another marque.

Even before the trade war tariffs, relatively few China-made cars were shipped to the United States.

General Motors Co sells its China-made Buick Envision in the United States, paying the additional 25% tariff, although the SUV is not a high volume model.

($1 = 6.4310 Chinese yuan renminbi)

(Reporting by Zhang Yan in Shanghai and Yilei Sun and Tony Munroe in Beijing; additional reporting by Hyunjoo Jin in San Francisco; Editing by Lincoln Feast.)

Softbank Leads $1 Billion Investment in Britain’s THG

The deal gives Softbank a stake of just under 10% in the Manchester-based company formerly known as The Hut Group, and an option to invest a further $1.6 billion into THG’s Ingenuity business.

THG owns beauty retailer Lookfantastic, makeup brand Illamasqua and beauty box service Glossybox, as well as supplements firm Myprotein.

The equity placing was priced at 596 pence per share and was oversubscribed, with THG raising a total of $320 million from other investors. THG shares soared as much as 14% at the open on Tuesday.

The cash injection comes less than a year after THG’s London listing and will be used to fund further acquisitions. The company also announced it agreed to buy Bentley Laboratories LLC, a New Jersey-based prestige beauty developer and manufacturer, for $255 million.

THG Ingenuity is THG’s technology arm that provides e-commerce services to other companies. If Softbank exercises its option to invest in that division, it would give the Japanese technology conglomerate a 19.9% interest in THG Ingenuity at a valuation of $6.3 billion.

The equity fundraising was led by Barclays, Citigroup, Goldman Sachs and Jefferies.

(Reporting by Nandakumar D in Bengaluru and Rachel Armstrong and Anna Irrera; Editing by Shailesh Kuber; Editing by Kim Coghill and Louise Heavens)

Spain’s Acerinox Expects Further Profit Rise in Q2 on Higher Steel Demand

“The good performance of industries related to consumer goods and consuming stainless steel as well as the situation of inventories, make us optimistic regarding the second quarter,” Acerinox said in a statement.

Its order portfolio was up 80% from a year ago and up 40% from the first quarter of 2019.

Its first-quarter net profit rose to 78 million euros ($95 million) from 28 million euros a year earlier, the company said.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to 161 million euros from 85 million and the company said it expects that to rise in the second quarter.

Those results topped the net profit of 64 million and EBITDA of 143 million expected by analysts, Refinitiv Eikon data showed.

Acerinox shares were down 2.3% in early trading in Madrid.

The industrial rebound from the contraction last year triggered by the pandemic has boosted demand for raw materials such as steel.

Acerinox’s largest rival ArcelorMittal last week reported a decade-high profit for the first quarter and said it expected global demand for steel this year to grow by between 4.5% and 5.5%.

($1 = 0.8240 euros)

(Reporting by Inti Landauro; editing by Jason Neely)

Thyssenkrupp Raises Outlook as Recovery Boosts Demand, Prices

By Christoph Steitz and Tom Käckenhoff

The group now expects adjusted earnings before interest and tax (EBIT) to reach a mid triple-digit million euro amount in the year to September, having previously forecast to almost break even.

Thyssenkrupp swung to an adjusted EBIT of 220 million euros ($267 million) in the second quarter, compared with a 279 million loss last year, helped by higher prices for its products, that have also supported other sectors across Europe.

Shares were indicated 1% higher in pre-market trade.

The submarines-to-bearings maker is emerging from years of crisis during which it lost two CEOs, warned on profits numerous times and sold its elevators division – its crown jewel – to private equity.

“But we also know that we still have a lot of work to do. So we’re not sitting back. The realignment of Thyssenkrupp remains a journey of many small steps – and we’re taking those steps,” Chief Executive Martina Merz said.

The group’s steel division, Europe’s second-largest after ArcelorMittal, swung to adjusted earnings before interest and tax of 47 million euros, compared with a 181 million euro loss in the same period last year.

Thyssenkrupp is considering spinning off the division after several attempts to merge or sell it, including to Britain’s Liberty Steel, have failed.

($1 = 0.8235 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Riham Alkousaa, Maria Sheahan and Kim Coghill)

Oil Falls on India COVID Crisis, Easing of Pipeline Outage Fears

By Shu Zhang

U.S. West Texas Intermediate (WTI) crude futures fell 45 cents, or 0.69%, to $64.47 a barrel at 0654 GMT, after gaining 2 cents on Monday.

Brent crude futures dropped 43 cents, or 0.63%, to $67.89 a barrel, after climbing 4 cents on Monday.

Oil was retreating amid weak sentiment as Asian stocks suffered a tech-led selloff and the market shrugged off concerns about a temporary shutdown of the Colonial Pipeline, said DailyFX strategist Margaret Yang.

Colonial Pipeline, which transports more than 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, said on Monday it was working on restarting in phases with “the goal of substantially restoring operational service by the end of the week.”

It has begun manually operating its 700,000-barrel-per-day multi-product fuel line between Greensboro, North Carolina, and Maryland for a limited time using existing inventories.

“The rally in oil prices was short-lived as the Colonial Pipeline disruption seems it will not have a prolonged impact,” Edward Moya, senior market analyst at OANDA, said in a Tuesday note.

The U.S. gasoline futures contract and U.S. heating oil futures, which spiked after the outage, have retreated to pre-Friday levels on the prospect of the restart.

Meanwhile, sentiment is weighed down by the rapid spread of coronavirus infections in India, which has increased calls for the government of Prime Minister Narendra Modi to lock down the world’s second-most populous country.

The World Health Organization has classified the coronavirus variant first identified in India last year as one of global concern, with some preliminary studies showing that it spreads more easily.

On the positive side for crude, analysts are expecting data to show U.S. crude inventories fell by about 2.3 million barrels in the week to May 7, following an 8 million-barrel drop the previous week, according to a Reuters poll.

Gasoline stocks are expected to have fallen by about 400,000 barrels, six analysts estimated on average ahead of reports from the American Petroleum Institute industry group on Tuesday and the U.S. Energy Information Administration on Wednesday.

OPEC is also expected to publish its monthly oil market report on Tuesday, which will include April production numbers.

(Reporting by Shu Zhang and Sonali Paul; Editing by Tom Hogue and Gerry Doyle)

Exclusive-Foxconn’s IPhone Output in India Down Amid COVID Surge

The Foxconn facility in the southern state of Tamil Nadu produces iPhones specifically for India, the world’s No.2 smartphone market.

Tamil Nadu is one of the worst hit states in the second coronavirus wave engulfing India. Officials imposed a full lockdown in the state from Monday, closing public transport and shuttering shops, to try slow surging infections.

More than 100 Foxconn employees in the state have tested positive for COVID-19 and the company has enforced a no-entry ban at its factory in the capital of Chennai until late May, one of the sources said.

“Employees are only allowed to leave but not to enter the facility since yesterday,” the person said. “Only a small part of output is being kept.”

More than 50% of the plant’s capacity had been cut, both sources said, declining to be named as they were not authorised to speak to the media.

They did not specify the plant’s capacity and it was unclear how many workers were at the facility, which provides dormitory accommodation for employees.

Taipei-based Foxconn, the world’s largest contract electronics maker and a major supplier to Apple, said a small number of employees at one of its facilities in India tested positive for COVID-19 and the company was providing them with support, including medical assistance.

“Foxconn places the health and safety of our employees as our highest priority and that is why we have been working closely with local government and public health authorities in India to address the challenges that we and all companies are facing in dealing with the COVID-19 crisis,” it said in a statement to Reuters.

Foxconn declined to comment on factory output or specific staffing levels. Apple did not immediately respond to a request for comment.

Foxconn’s shares fell as much as 6.2% after the Reuters report. The stock closed down 5.31%, outpacing a 3.8% fall in the broader market on concerns about rising COVID-19 cases in Taiwan.

India has benefited from Apple’s move to shift some areas of production from China to other markets as it navigates a trade war between Washington and Beijing, with Apple announcing in March it had started the assembly of the iPhone 12 in India.

While Apple’s share of the budget phone-dominated India market is small, CEO Tim Cook said in January that India business doubled in the December quarter compared to the previous year, helped by an online store launch.

Foxconn similarly said strong smartphone sales contributed to a stronger-than-expected performance in the fourth quarter amid the work-from-home trend.

Market research firm Canalys said that growth in India extended through the first quarter, with Apple shipping more than a million iPhones. Demand for the iPhone 12 was supported by local assembly and attractive finance offers, Canalys said.

COVID-19 CRISIS

However, the outlook has been dimmed by the coronavirus crisis engulfing India, where COVID-19 cases and deaths have surged at a record pace in recent weeks. The country has recorded around 22.66 million infections and more than 246,000 deaths, with experts saying the true figures could be far higher.

Foxconn is not the only producer affected. Nokia and Chinese smartphone maker OPPO last year suspended production at factories in India after workers tested positive for COVID-19.

Taipei-based tech research firm TrendForce on Monday trimmed its global smartphone production growth forecast to 8.5% from 9.4%, citing the coronavirus impact in India on major vendors including Samsung and Apple.

“Smartphone brands are therefore expected to closely monitor their inventories of whole devices and adjust their subsequent production plans accordingly,” TrendForce said in a report, adding it could revise the forecast lower still if the outbreak continues to hit local production and sales in the second quarter.

(Reporting by Taipei newsroom and Yimou Lee; editing by Jane Wardell)

Sterling Surges Above $1.41, Helped by Scotland Relief and Dollar Weakness

By Elizabeth Howcroft

Pro-independence parties won a majority in Scotland’s parliament on Saturday, which Scottish leader Nicola Sturgeon said gave her a mandate to push ahead with plans for a second independence referendum.

But the pound strengthened as market participants did not interpret this as a near-term risk as Sturgeon’s party did not win an outright majority. Sturgeon said that her first task was to deal with the COVID-19 pandemic.

“The market has basically judged that she’s certainly not walking away with a very, very strong mandate for a imminent referendum,” said Ned Rumpeltin, head of European currency strategy at TD Securities.

Any second referendum on Scottish independence requires the approval of the British government and Prime Minister Boris Johnson has ruled this out.

At 1423 GMT, the pound was up 1.1% on the day at $1.4125, having crossed the key $1.40 level for the first time since February during the Asian session, and risen above $1.41 during the European morning session.

Versus the euro, it was up 1% at 86.035 pence per euro, having earlier hit 85.97.

Analysts said the move in the pound versus the dollar was also due to dollar weakness, as the greenback dropped to a two-month low after a disappointing U.S. employment report.

Sterling’s gains could also be a delayed reaction to the Bank of England raising its forecast for British economic growth at its meeting last week, some analysts said.

The BoE slowed the pace of its trillion dollar bond-purchasing programme on Thursday, but stressed it was not reversing its stimulus.

“We read the move as more of a legacy as the market is moving towards the Bank of England’s bullish set of UK forecasts and now greater confidence in the soft dollar environment,” ING FX strategists wrote in a note to clients.

Johnson is due to set out the next phase of lockdown easing in England, with the changes to begin on May 17.

“The re-opening of the dominant UK services sector as lockdown restrictions are removed is expected to provide a further boost for sterling,” said Stuart Cole, head macro economist at Equiti Capital.

Sterling-dollar FX futures volumes are up 57.4% so far in May compared to the same period in May 2020 and there were $10.9 billion of sterling-dollar futures traded on Friday, which is above the year-to-date average of $7.8 billion, according to data from CME.

Elsewhere, CFTC positioning data showed that speculators reduced their net long position on the pound in the week to May 4.

(Reporting by Elizabeth Howcroft; Editing by Gareth Jones, Steve Orlofsky and Alison Williams)

Weak U.S. Bookings Hurt Marriott Profit, China Shines

By Shreyasee Raj

It is a long road to recovery for Marriott and its smaller rival Hilton, analysts have said, as the hotel operators rely heavily on business travel, which remains weak due to border curbs in many countries.

Marriott, which gets about three quarters of its revenue from the United States and Canada, said its RevPAR, a key measure for a hotel’s top line performance, fell 46.3% in the region, sending its shares down as much as 3.8%.

Greater China was the only market that showed positive occupancy growth as RevPAR surged nearly 77%, while it plunged 80% in Europe, making the continent the worst performing region due to the fresh restrictions that have been imposed.

“While recovery trajectories vary from region to region, the resiliency of demand has been most keenly demonstrated in mainland China, where occupancy is near the pre-pandemic level,” Chief Executive Officer Tony Capuano said.

“Given rising COVID cases and strict restrictions in many countries (in Europe), 25% of the region’s hotels are currently closed,” he told analysts.

Last week, rival Hilton had said Asia, including China, was its only market with positive quarterly occupancy rates and the smallest year-over-year fall in RevPAR.

Marriott, which owns the JW Marriott and Ritz-Carlton brands, said more than 95% of its hotels were open globally.

The hotel operator’s adjusted profit fell 33% to $296 million in the first quarter, below market expectation of $305.6 million, according to IBES data from Refinitiv.

Total revenue halved to $2.32 billion and missed Wall Street estimate of $2.36 billion.

(Reporting by Shreyasee Raj in Bengaluru; Editing by Arun Koyyur)

Malaysia Sues Deutsche Bank, JP Morgan, Coutts over 1MDB

By Rozanna Latiff and Joseph Sipalan

1MDB is claiming $1.11 billion from Deutsche Bank (Malaysia) Bhd, $800 million from J.P. Morgan (Switzerland) Ltd and $1.03 billion from a Swiss-based Coutts unit, and interest payments from all of them, according to the lawsuit.

The claims are premised on “negligence, breach of contract, conspiracy to defraud/injure, and/or dishonest assistance”, 1MDB said in the documents, filed at a Kuala Lumpur court on Friday.

The three companies did not immediately respond to a request for comment on the claims in the lawsuit.

Malaysia’s finance ministry said on Monday that 1MDB and a former unit had filed 22 civil suits seeking to recover more than $23 billion in assets from entities and people allegedly involved in defrauding the fund and its ex-subsidiary. It did not identify any of the individuals or entities being sued.

Malaysian business daily The Edge first reported the suits against the banks and others.

JP Morgan and Coutts declined to comment on the report.

A Deutsche Bank spokesperson said: “We have not been served any papers, and we are not aware of any basis for a legitimate claim against Deutsche Bank.”

The lawsuit seen by Reuters did not detail the banks’ role in 1MDB’s affairs.

Malaysian and U.S. investigators say at least $4.5 billion was stolen from 1MDB between 2009 and 2014, in a wide-ranging scandal that has implicated high-level officials, banks and financial institutions around the world.

Malaysian authorities have previously said there were billions of dollars more that were unaccounted for.

The lawsuits come after Malaysia recovered nearly $5 billion in assets following deals over the past three years with U.S. bank Goldman Sachs, which helped 1MDB raise billions of dollars in funds, audit firm Deloitte and others.

In 2017, Switzerland’s financial watchdog FINMA said the Swiss subsidiary of JPMorgan had committed serious anti-money laundering breaches over business relationships and transactions linked to 1MDB. JPMorgan said at the time it has since increased training and made improvements in monitoring and surveillance.

Last year, Swiss authorities convicted a former Coutts banker for failing to report suspicious transactions linked to 1MDB.

The Edge also reported those being sued by 1MDB include former Malaysian Prime Minister Najib Razak, who founded the fund.

Najib said in a Facebook post on Monday that the claim seemed intended to bankrupt him, and suggested that the lawsuit was politically motivated.

Last year, Najib was found guilty of corruption and money laundering in a 1MDB-linked case. He denies wrongdoing and is appealing the verdict.

(Reporting by Rozanna Latiff and Joseph Sipalan; additional reporting by Marwa Rashad in London; Editing by Martin Petty and Pravin Char)

Jack Ma Makes Rare are Visit to Alibaba Headquarters in Hangzhou

The billionaire has kept an extremely low profile since delivering a speech in October in Shanghai criticizing China’s financial regulators, which set off a chain of events that led to the shelving of what would have been a record $37 billion initial public offering of Alibaba’s affiliate Ant Group.

On Monday, Ma was seen in an open-air campus shuttle bus with a number of Alibaba executives, according to a photograph taken by an employee at the event, viewed by Reuters. Wearing a blue T-shirt, white trousers and a pair of Chinese-style cloth shoes, Ma was smiling.

“It’s so exciting to see Jack,” said the employee, declining to be named.

“It’s a pity there was no chance to take a photo with him.”

China’s most famous entrepreneur, Ma enjoyed cult-like status among staff even after stepping down as chairman in 2019.

Ma, who is based in Hangzhou, disappeared from public view for three months before surfacing in January, speaking to a group of teachers by video, which sent Alibaba shares surging, but has not made any other public appearances since then.

Last month, regulators imposed a sweeping restructuring on Ant Group, while Alibaba was hit with a record antitrust fine of 18.2 billion yuan ($2.84 billion) after an investigation found it abused its market dominance.

($1 = 6.4110 Chinese yuan renminbi)

(Reporting by Sophie Yu and Tony Munroe; Editing by Susan Fenton)

Chipotle Raises Average Hourly Wage, Looks to Hire 20,000 Workers

Several U.S. chains, including Taco Bell and McDonald’s, are adding benefits or running hiring events to lure applicants as people, flushed with stimulus checks, are wary of returning to work.

U.S. job growth unexpectedly slowed in April, even as the leisure and hospitality industry added 331,000 jobs. Hiring at restaurants and bars accounted for more than half of that.

Raising the minimum wage to $15 an hour has also been on U.S. President Joe Biden’s agenda. He had even tried to plug it into the COVID-19 relief bill signed in March, but Congress stripped it from the package.

Late last month his administration took the first step, signing an order to raise wages to $5 for federal workers. (https://reut.rs/3o5odW9)

Chipotle said it would offer a $200 employee referral bonus for crew members and $750 for apprentices or general managers.

The starting wage ranges from $11-$18 and the latest average hourly wage increase will be $2, the company said.

The chain saw a surge in sales since the pandemic as consumers looking for diet-friendly options and new menu items like the carne asada or cauliflower rice ordered in or picked up their meals in stores.

(Reporting by Nivedita Balu in Bengaluru)

BP Says It Will Stick with Top U.S. Oil Lobby After Climate Shift

By Ron Bousso

BP, which plans to sharply cut its oil output and boost its renewable energy capacity over the next decade, said in a report that despite “uneven progress”, the API was “heading in the right direction”.

The API has faced growing pressure from member companies and activist groups to change its policies relating to climate change and drilling regulations.

The trade group started to shift some of its positions as the climate-focused Biden administration came to power this year. In March it said it supports a carbon price as one measure to mitigate climate change risk.

BP said it was “encouraged” by the API’s support for federal regulation on limiting emissions of methane, a potent greenhouse gas and its support for carbon pricing as well as improving its transparency.

“API’s progress has been uneven at times but, on the whole, the organization has moved considerably over the past year and is heading in the right direction,” BP said in the report.

“We will continue to make our case – as members – to influence API on climate and many other areas relevant to our business in the US.”

London-based BP, led by CEO Bernard Looney, last year quit the main U.S. refining lobby and two other trade groups but stuck with the API despite saying it was only “partially aligned” with its policies.

BP will publish a comprehensive review of its membership of the API and other associations next year.

France’s Total in January became the first major global energy company to quit the API due to disagreements over its climate policies and support for easing drilling rules, saying it would not renew its 2021 membership.

Total’s stance put pressure on other European oil majors that have set out strategies to sharply reduce carbon emissions.

Royal Dutch Shell also chose to extend its API membership despite “some misalignment” with its climate stance.

BP’s interim report also reviewed its participation in four other associations which were partly aligned with its policies including the Australian Institute of Petroleum and the Canadian Association of Petroleum Producers.

BP said it was encouraged by progress made by all four groups over their climate stances.

(Reporting by Ron Bousso; Editing by Alexander Smith)

Tyson Foods Expects Costs to Hit Profit as Lifts Revenue Outlook

Higher raw material costs have led U.S. meat producers to raise prices, while demand recovers after an easing of pandemic-led restrictions on dining out.

Overall, Tyson said it expects fiscal 2021 revenue to reach $44 billion to $46 billion. Revenue had previously been forecast at the upper end of a $42 billion to $44 billion range.

Tyson Chief Executive Dean Banks warned, however, that rising costs will pressure profits later this year.

“We’re seeing substantial inflation across our supply chain, which will likely create margin pressure during the back half of the year,” he said.

Tyson said for the second quarter ended April 3, sales rose about 4% to $11.30 billion from a year earlier, exceeding forecasts from analysts, who were on average expecting $11.19 billion, IBES data from Refinitiv showed.

Higher prices helped Tyson’s chicken segment post 4.6% sales growth, while pork rose 16.7%, even as volumes dropped.

In beef, Tyson’s largest business, sales rose 1.7% from a year ago to $4 billion, as prices climbed 7.5% and volumes fell 5.8%. Tyson said it now expects its beef division to post improved fiscal 2021 results compared to last year.

“Commodity beef drove the beat,” Credit Suisse said.

Net income attributable to Tyson increased to $476 million, or $1.30 per share, from $376 million, or $1.03 per share, a year earlier. Excluding items, Tyson earned $1.34 per share, compared with estimates of $1.12.

Shares in Tyson, which are up 22% this year, were around 3% lower following the results.

(Reporting by Praveen Paramasivam in Bengaluru and Tom Polansek in Chicago; Editing by Shounak Dasgupta, Shinjini Ganguli and Alexander Smith)

Dow Hits Record High as Materials, Energy Stocks Jump

By Medha Singh and Sruthi Shankar

Copper miner Freeport-McMoran, aluminum producer Alcoa and steelmaker United States Steel Corp gained between 2.7% and 5.8% as copper prices touched a record high and aluminum scaled a new peak. [MET/L]

The materials sector added 1.3% to hit an all-time high, while the energy index jumped to a more than one-year peak after a cyber attack on top U.S. pipeline operator Colonial Pipeline shuttered a fuel network that transports nearly half of the East Coast’s supplies, lifting oil prices. [O/R]

“A lot of the inflation fears are overdone,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. “There is a big difference between commodity price and inflation at the consumer level. It generally takes a gigantic increase in prices of raw materials to even have a tiny effect on consumer price index.”

The S&P 500 and the Dow ended at record closing highs on Friday as an unexpected slowdown in monthly jobs growth fueled bets that the U.S. Federal Reserve would remain accommodative for longer.

With latest economic reports depicting that the U.S. economy is not recovering at the explosive pace as previously forecast, inflation numbers and retail sales data this week could chart the next course for U.S. equities.

“Markets are certainly priced to perfection here. We’re likely to see some back and forth,” Brown added.

Economy-linked financials, industrials and healthcare hit fresh peaks and provided the biggest boost to the S&P 500.

At 10:00 a.m. ET, the Dow Jones Industrial Average was up 239.08 points, or 0.69%, at 35,016.84, the S&P 500 was down 1.76 points, or 0.04%, at 4,230.84.

The tech-heavy Nasdaq Composite was down 182.68 points, or 1.33%, at 13,569.56.

Technology, communication services and consumer discretionary that house megacap technology-related stocks including Apple Inc, Alphabet Inc and Tesla Inc were the only S&P sectors in the red.

Cybersecurity firm FireEye rose 3.3% as industry sources said the company was among those helping Colonial Pipeline to recover from one of the most disruptive digital ransom schemes reported.

Tyson Foods Inc dropped 2% after the U.S. meat processor warned rising costs would start to hit profits.

The earnings season is in its final stretch with about 87.2% of 439 S&P 500 companies beating estimates for profit, according to Refinitiv data. Analysts expect overall first-quarter earnings to jump 50.4% from a year ago, their strongest growth rate since 2010.

Advancing issues outnumbered decliners by a 1.32-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded 189 new 52-week highs and no new low, while the Nasdaq recorded 148 new highs and 71 new lows.

(Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Maju Samuel)

Oil Slips as Asia Pandemic Fears Counter U.S. Pipeline Cyberattack

By Alex Lawler

Colonial Pipeline said on Sunday its main fuel lines remained offline after the attack that shut the system on Friday, but some smaller lines between terminals and delivery points were now operational.

“The bullish developments in the U.S. are hiding a worrying COVID-19 trend in Asia,” said Louise Dickson, analyst at Rystad Energy. “If the pipelines come back online quickly this week, the market may be in for a price correction that will make the impact of the pandemic’s spread in Asia more visible.”

Brent crude was down by 37 cents, or 0.5%, at $67.91 a barrel by 1410 GMT. U.S. West Texas Intermediate (WTI) crude CLc1> slipped by 18 cents, or 0.3%, to $64.72. Both benchmarks rose more than 1% last week, their second consecutive weekly gain.

“If the pipelines were to remain out of action for any length of time, this would have far-reaching effects on the oil market not only in the U.S., but also in Europe,” said Commerzbank analyst Carsten Fritsch.

“That said, it is currently assumed that the disruption to the pipelines will be resolved in a matter of days, so the impact should be limited.”

The White House was working closely with Colonial to help it to recover. Commerce Secretary Gina Raimondo said the pipeline fix was a top priority for the Biden administration.

Brent crude has risen more than 30% this year due to supply cuts by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and easing coronavirus movement restrictions in the United States and Europe.

But the worsening pandemic developments in Asia have weighed. Indian coronavirus infections and deaths held close to record daily highs on Monday.

(Additional reporting by Aaron Sheldrick in Tokyo and Florence Tan in Singapore; Editing by Steve Orlofsky and Pravin Char)

Traders Book Tankers in Europe to Ship Gasoline Across Atlantic After Colonial Shutdown

By Ahmad Ghaddar and Ron Bousso

The attack forced the Colonial Pipeline to shut down its entire system on Friday, stoking expectations of gasoline shortages along the U.S. East Coast.

Some smaller lines were restarted Sunday, but Colonial has given no timeline for the restart of its main pipelines.

Two European gasoline traders said the market was taking a cautious approach to see how long the shutdown would last.

“I haven’t seen any big pick up but it would be normal for people to preemptively take vessels on subs,” one trader said. Subs is a term used in the oil market to describe a provisional booking for a tanker.

A second trader said that rallying freight rates amid a flurry of bookings into New York Harbour may have weighed on arbitrage economics from Europe.

European Ebob barge refining margins reached $10.38 a barrel on Monday, up from $9.35 on Friday, according to Reuters calculations.

“Should the … network remain down for more than a few days, the nation’s East Coast and Southeastern markets will start to see supply hiccups and related price spikes, while Gulf Coast refining centres will scramble to place cargoes alternatively,” oil analytics firm Vortexa said in a note.

Vortexa said a potential waiver of Jones Act rules would have a big impact on trade dynamics as it provide a much bigger availability of tankers to transport fuels between U.S. ports.

The act was implemented in 1920 to support jobs in the maritime industry. It requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews.

Vortexa said that tankers already in transit could be diverted to other ports.

The firm has seen the Litasco-chartered Tavrichesky Bridge, carrying 370,000 barrels of gasoline, diverted away from New York toward a new destination of Yorktown, Virginia, near the Colonial-supplied cities of Richmond and Norfolk.

(Editing by Jan Harvey and Louise Heavens)

Indian Auto Dealers Predict Slow Sales Recovery as Virus Spreads to Rural Areas

By Aditi Shah

Auto sales, especially cars and sport-utility vehicles (SUVs), bounced back strongly last year as buyers rushed to buy private vehicles to ensure safety and maintain social distance.

With infections now spreading to rural areas, a recovery is expected to take longer, the Federation of Automobile Dealers Association (FADA) said. The association said it expects sales to return to their peak levels of March 2019 only by fiscal year 2023 – about two years from now.

India’s daily infections are close to record highs with the second wave of COVID-19 spreading from hard-hit cities like New Delhi and Mumbai to rural areas that are home to nearly 70% of the 1.3 billion population but where public healthcare is limited.

Many states have imposed strict lockdowns over the last month while other states have placed curbs on movement of people and shut cinemas, restaurants, pubs and shopping malls.

“India is currently facing one of its toughest times with the second wave of COVID creating a havoc in everyone’s life,” said FADA President Vinkesh Gulati.

FADA said registrations of new vehicles, including cars, SUVs, motorbikes and trucks, for April were 28% lower than March, and sales would continue to remain sluggish in May with some lockdowns extended until the end of the month.

Consumer sentiment in the first nine days of May was “extremely weak” with most of the country under partial or full lockdown, FADA said. The association said that even where car dealerships are open walk-in customer numbers have dropped to 30% of normal levels and many are delaying their purchase decision.

Most automakers, including Maruti Suzuki Ltd, India’s top-selling carmaker, and Hero MotoCorp, the country’s largest motorbike manufacturer, have extended plant shutdowns until May 16 due to a spike in cases.

(Reporting by Aditi Shah. Editing by Jane Merriman)

EU Recovery Fund Success Could The Pave Way for a Repeat: EU Commission

By Jan Strupczewski

The 27 EU nations made an unprecedented agreement last year to jointly borrow 750 billion euros for a fund to help fight the economic slump caused by COVID-19 and address the challenges of climate change.

To overcome the opposition of the EU’s frugal northern states, which have long opposed joint borrowing for fear of financing less strict fiscal policy in the south, the scheme was clearly described as an extraordinary, one-off measure.

But many economists seen it as a foot in the door for more regular joint debt issuance by the AAA-rated EU in future and top Commission officials echoed that view before the European Parliament’s economic and monetary affairs committee.

“The more successful we are in the implementation of this facility the more scope there will be for discussions on having a permanent instrument, probably of a similar nature,” Commission Vice President Valdis Dombrovskis said.

The borrowing, to be done by the executive Commission in the name of all EU countries, is to be repaid over 30 years from new taxes called new own resources. These have yet to be yet to be agreed but could include levies on the digital economy, on CO2 emissions or on imports of goods made using dirty technologies.

“It will have permanent consequences on financial markets because we have this European-denominated debt to be repaid in the next 30 years,” European Economic Commissioner Paolo Gentiloni told the same committee.

“On the future — if this instrument works and we are able to agree on the new own resources to repay this common debt, I think we can have a serious discussion on further initiatives.

“But what is crucial for these further initiatives, is to make this one work and be repaid with new own resources,” Gentiloni said.

For the Commission to start borrowing the money on markets, all EU national parliaments must ratify a decision to increase national guarantees to repay it, in case the new taxes fail to materialise. Eight have yet to do so.

To get the EU cash, which will come partly as grants and partly through ultra-cheap loans, each government must submit a plan of how it intends to spend its share which must conform with EU-agreed rules. So far 14 countries have sent in plans and Dombrovskis said the rest could trickle in by early June.

The plans must include not just spending, but also reforms to make economies ready for the digital age and without CO2 emissions. Dombrovskis said that after initial problems the plans, they in general showed a good balance.

The Commission has two months to assess each plan and EU finance ministers then have one month to endorse a Commission recommendation on it. Dombrovskis said everything was on track for first disbursements from the scheme to be made in July.

(Reporting by Jan Strupczewski; Editing by Catherine Evans)

Insurer of Ship That Blocked Suez Canal says Reduced Claim Still High

The Suez Canal Authority (SCA) adjusted its claim from an initial $916 million in an effort to settle out of court, SCA head Osama Rabie told private TV network MBC Masr on Saturday.

The Ever Given, one of the world’s largest container ships, was jammed across the canal for six days from March 23, stopping traffic in both directions.

The vessel, still loaded with thousands of containers, is being held in a lake between two stretches of the canal amid the dispute about the level of compensation SCA has claimed from the Japanese owner Shoei Kisen.

Rabie said on Saturday there was no immediate prospect of a settlement. “We haven’t seen any response from their side so far, so we are moving forward with the issue, as we were, in the court,” he said.

UK Club said the reduced amount proposed had not been reflected in SCA’s claim filed at court.

“The Ever Given’s owners still have not been provided with evidence that would support a claim of this size, which remains exceptionally large. The Ever Given’s interests continue to negotiate in good faith with the SCA,” it added.

An Egyptian economic court is due to hold a hearing on May 22 to consider the SCA claim for what it describes as losses due to the blockage and costs for dislodging the ship, SCA sources said.

An Egyptian investigation into the incident found no wrongdoing by the SCA or its pilots, the sources said, without elaborating.

One source said the court could authorise the SCA to auction off the ship if the owner rejected any ruling to compensate the canal authority. Rabie has also mentioned such an outcome.

An Egyptian court rejected an appeal by Shoei Kisen against the Ever Given’s detention earlier this month.

(Reporting by Jonathan Saul in London and Yousry Mohamed in Ismailia; Writing by Mahmoud Mourad; Editing by Aidan Lewis and Edmund Blair)