(Reuters) – Stocks cut losses heading into the close on Wednesday of European markets, in choppy trading driven by increased fears about Europe’s debt crisis.

The S&P 500 earlier had fallen sharply to test support at around 1,340 before recovering of its losses just ahead of the close of stock trading in Europe.

The Dow Jones industrial average .DJI was down 62.48 points, or 0.48 percent, at 12,869.61. The Standard & Poor’s 500 Index .SPX was down 6.27 points, or 0.47 percent, at 1,357.45. The Nasdaq Composite Index.IXIC was down 10.59 points, or 0.36 percent, at 2,935.68.

(Reporting by Edward Krudy; Editing by Jan Paschal)

(Reuters) – Home prices rose in March for the first time since last July, helped by tighter housing inventory, data analysis firm CoreLogic said on Tuesday.

CoreLogic’s home price index gained 0.6 percent from February, but was still down 0.6 percent compared with March a year ago.

Excluding sales of distressed properties, prices climbed 0.9 percent on a yearly basis. Homeowners in danger of foreclosure, or in “distress”, often sell their homes at significantly reduced prices.

“This spring, the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices”, Mark Fleming, chief economist at CoreLogic, said in a statement.

Of the top 100 statistical areas measured by population, 57 showed year-over-year declines, down from 65.

The closely watched S&P/Case Shiller index released in late April showed a rise in U.S. single-family home prices in February for the first time in 10 months, with a gain of 0.2 percent on a seasonally adjusted basis.

(Reporting By Leah Schnurr; Editing by Leslie Adler)

(Reuters) – Dutch telecom group KPN NV (KPN.AS) hit back at a surprise stakebuilding attempt by Mexico’s America Movil (AMXL.MX), saying it was substantially undervalued by the 3.2 billion euros ($4.2 billion) plan designed to give the Mexican group a base for possible European expansion.

America Movil, the telecoms group controlled by tycoon Carlos Slim, is seeking a stake in KPN of up to 28 percent and sees it as a long-term investment that would give it a presence in Europe at a time when the Mexican group has run out of opportunities to expand at home.

But KPN said the offer was pitched too low. “KPN is of the opinion that 8 euros per ordinary KPN share substantially undervalues the company,” it said in a statement on Tuesday. “KPN will seek further clarification as to America Movil’s intentions … In the meantime, KPN will explore all strategic options.”

The deal, which if successful could give America Movil seats on KPN’s supervisory board, would also grant it a presence in Germany, where KPN has been trying unsuccessfully for years to merge its E-Plus unit with Telefonica-owned (TEF.MC) O2 Germany.

KPN shares surged more than 20 percent to their highest since early April, bouncing from a seven-year low set earlier this month.

Yet for KPN, the entry of Slim as a major investor will not solve the structural problems it has been grappling with, including tough competition in its home market and a lack of critical scale in the foreign markets where it remains.

America Movil, which has already built up a 4.8 percent stake in KPN by buying shares in the open market, is the biggest mobile operator in Latin America and a major cash cow for Slim.

The Mexican tycoon, ranked by Forbes magazine as the world’s richest man, has built his empire by purchasing troubled companies and turning them around.

“America Movil is a long-term investor, we think if the company (KPN) executes (its strategy) well, it will perform well,” Carlos Garcia Moreno, America Movil CFO, told reporters on Tuesday, adding there was scope to cooperate in areas like roaming, content, marketing and procurement.

Moreno said it was too early to say whether America Movil would do any other deals in Europe, but suggested KPN would allow it to get a closer look at European markets.

“KPN is the target for our first investment. Europe is facing some times which are economically challenging. We have a long-term investment horizon. We’ve taken our time. This one seems to make a lot of sense,” Moreno told reporters.

Moreno said the Mexican company had few opportunities to expand in Latin America, while Europe appeared attractive because of a similar cultural identity.

Some analysts said the approach could be a prelude to a full takeover offer.

“We believe the 28 percent stake could be a first step to try to gain full control of KPN,” SNS Securities said in a research note. “Buying an incumbent operator is politically not without risk, which may explain the cautious approach of first acquiring a 28 percent stake.”

One investment banker involved in the telecom sector said Slim had been looking to invest in Europe for several years.

“What they achieved today really matches their strategy, as they always wanted to start with a moderate investment and see what happens,” the banker said.

“It would make no sense for Slim to make a full bid for KPN right now. Instead, it is very shrewd from a non-European company to start with a minority stake and increment it over time … From Slim’s perspective, the stock is cheap and it’s a good asset.”

VERY LOW PRICE

One European telecoms executive said the move was an inexpensive way for America Movil to enter Germany, where E-Plus is the second-smallest player. “You get Germany at a very, very low price,” he said.

He added the entry of Slim as a major shareholder would almost certainly end any remaining ambitions for a merger of E-Plus and O2, whose parent Telefonica is a major rival to America Movil in Latin America. “If I was Carlos Slim I wouldn’t buy 28 percent of KPN in order to get rid of E-Plus.”

Shares of KPN, which traces its origins back to the Dutch government’s construction of telegraph lines in 1852, hit a seven-year low earlier this month, traded up 17.1 percent at 7.592 euros by 1533 GMT. America Movil stock was down 6 percent at 17.54 pesos, after touching a six-month high on Monday.

KPN, which has 45 percent market shares in the Netherlands in fixed line and mobile, posted coreearnings of 5.1 billion euros in 2011 and free cash flow of 2.45 billion.

But the company has been hit by a string of problems under Chief Executive Eelco Blok, a keen sailor and KPN-lifer who took the helm in April 2011, and has faced criticism from analysts, regulators, politicians and the public.

Analyst Ulrich Rathe at brokerage Jefferies in London noted KPN had underperformed the sector on a total return basis by 29 percent over the past year. “That is relative to a sector which has suffered a lot,” he said.

KPN has been struggling to reverse a decline in revenue, profit and market share in its fixed-line and mobile operations as it faces intense competition on its home turf. Its chief financial officer unexpectedly quit in January, citing disagreements over internal governance.

KPN and other mobile phone operators in the Netherlands are under antitrust investigation for possible price-fixing, while the local telecoms regulator put KPN under close supervision in December saying it may have broken the law to the detriment of consumers and competitors.

Another potential negative is that the Netherlands may get a fourth mobile operator at the next auction of mobile licenses later this year, since the regulator has set aside a chunk of spectrum at a low price for a new entrant.

Further competition could mean KPN’s mobile business in its key home market will become structurally less profitable.

Under pressure from shareholders to improve performance, KPN has started to look at divestments including the possible sale of its Belgian subsidiary.

Sources familiar with the company’s plans say KPN is mulling the sale of BASE, Belgium’s smallest operator, and wants 1.8 billion euros for it.

Earlier this month, Der Spiegel reported that E-Plus was in early talks to sell thousands of cell phone towers to a financial investor to raise funds for network expansion.

Those divestments could be put on hold if America Movil wants to use KPN as a foothold for expansion in Europe, one person familiar with KPN’s thinking said.

MERGER TARGET

KPN has been rumored as a takeover or merger target in the past, most recently in September 2011 when Belgacom (BCOM.BR) said a merger with KPN could make sense.

The Dutch firm has snubbed three bid attempts, KPN’s former chief executive Ad Scheepbouwer said last year, but he declined to give names of the companies involved.

Spain’s Telefonica has been most often cited as a possible buyer of KPN. The two firms held merger talks in 2000 which collapsed after KPN said it felt the Telefonica board was not committed to the proposed link-up.

A source familiar with KPN’s M&A talks said it had continued to seek tie-ups or strategic investors to boost its performance, including Chinese telecoms companies.

KPN is struggling to hold on to its market share as it invests in infrastructure in the Netherlands. As part of a major cost-reduction plan it aims to shed between 4,000 and 5,000 full time jobs, or up to 16 percent of the total, by the end of 2013.

America Movil, which said it already owns 4.8 percent of KPN’s stock, said it would make a cash offer of 8 euros per share for the additional stock, a premium of roughly 23 percent to Monday’s closing KPN share price.

Maurice Mureau, asset manager at Dutch brokerage and asset management firm Keijser Capital, said he did not expect a rival offer to appear.

“At this price, this is a good moment to say goodbye to KPN shares, so we are selling half our stake this morning,” Mureau said. “KPN’s business model is under pressure. They are losing share in the traditional telephone market and the new business in internet is not fully compensating for that.

“The competition is only getting tougher and things could go any direction,” Mureau added. “All-in-all a good time to get out of the stock.”

Deutsche Bank is advising America Movil on the KPN deal, which would also involve handling the tender offer if that goes ahead, while Clifford Chance is advising it on legal matters.

The deal would be the second major move on a Dutch company in recent months by an acquirer based in the Americas, after United Parcel Service Inc (UPS.N) announced plans to buy TNT Express NV (TNTE.AS) for 5.2 billion euros.

Previous Mexican investments in the Netherlands include a deal sealed in February for plastic pipe maker Mexichem (MEXCHEM.MX) to buy Wavin (WAVIN.AS) for 531 million euros.

($1 = 0.7663 euros)

(Aditional reporting by Anthony Deutsch; with Robert-Jan Bartunek in Brussels; Sophie Sassard and Georgina Prodhan in London; Ioan Grillo, Tomas Sarmiento and Dave Graham in Mexico City; Editing by Richard Pullin and David Holmes)

(Reuters) – A $1 trillion oil-fired trade windfall couldn’t be better timed to help Chinese companies climb the value chain and rebalance the economy of the world’s biggest exporter.

Fast growing countries producing oil and other commodities, are taking advantage of the windfall from the recent surge in prices and buying roughly half of the $2 trillion worth of goods sold by China overseas.

But, more importantly for the economy, they are buying the value-added products that Beijing wants its export-oriented factories to focus on – construction equipment, heavy infrastructure goods and telecom network equipment, for instance.

“Commodity exporting countries have had a windfall after commodity price rises and they are now recycling this back into the global trade system,” Yao Wei, China economist at Societe Generale in Hong Kong, told Reuters.

“The silver lining to China’s exports is really the other emerging economies,” she said.

China’s export-led expansion of the last decade has been largely a function of processing trade – importing materials and components for assembling products that are then shipped overseas.

And now the source of value in Chinese exports is shifting.

New orders are increasingly coming from developing economies buying industrial goods to build out infrastructure, products with a large element of domestic added value, using locally-made components that China once imported.

This shift in the trade focus potentially benefits the domestic economy even more as skills and product lines are upgraded to satisfy demand from a new customer base.

HIGHER SHARE OF VALUE-ADDS

Analysts at consultancy GK Dragonomics calculate that the share of domestic value added in processed exports is 30-50 percent, but 70-90 percent for what it calls “normal” exports.

Those normal exports, products assembled from locally made components that China previously imported, represented about 48 percent of the total of Chinese goods shipped overseas in 2011, versus 41 percent between 2001 and 2005.

Add together the effect of increasing the amount of domestic value added to exported goods and the new destinations to which China is shipping them, and it could underpin export growth, jobs and wealth creation for another decade.

“The Chinese government’s eagerness to encourage these trends is thus quite understandable,” a recent GK Dragonomics study said.

Still, Beijing’s likely share of the $1 trillion petro-dollar boost to global trade anticipated by analysts at UBS, after Brent crude’s 14 percent gain since 2011’s trough in August, is unlikely to fuel a surge in economic growth.

Even if China rakes in $100 billion, in line with the roughly 10 percent share it has in the global export market, Asia’s biggest economy remains on course for its slowest full year of expansion in a decade, with economists polled by Reuters forecasting a consensus 8.4 percent growth in 2012.

But more emerging market demand is exactly what will help Beijing rebalance its export-oriented economic model – albeit not necessarily in the import-led way that leaders of stuttering developed economies hope to see.

In fact, building up the customer base in oil exporting countries ensures that China gets back a huge amount of the money it spends every year on fuel – buying in around 5 million of the 9 million barrels per day it consumed in 2011, China’s oil bill last year was about $200 billion.

A study by the International Energy Agency into rising oil revenues on import demand from members of the Organisation of the Petroleum Exporting Countries (OPEC) shows that, compared to the period 1970-2000, every additional dollar spent by China on fuel imports generates 64 cents of demand for its exports.

Analysts at Societe Generale reckon it is this oil-related import growth, driven by the still relatively elevated price of crude, that has helped global trade volumes manage a stealthy sequential gain in momentum in recent months.

“Despite a weak outlook for global GDP growth, there are several factors that suggest the period of stagnating global trade may well be behind us,” they wrote in a report last week.

“Specifically we expect oil prices to remain elevated, suggesting that strong import demand from the Middle East should persist for some time.”

DIVERSIFY, REBALANCE

One reason why Beijing is encouraging this diversification of its customer base to the Middle East and other emerging economies is the unreliability of demand from the European union, where recession fears have reared up once again.

It is growth elsewhere that makes the case for rebalancing higher up the value chain and across geographies all the more compelling.

Research by HSBC’s trade and receivables finance department forecasts an acceleration in global trade growth in the Asia Pacific driven by emerging economies inside and outside the region, with demand flat in Europe and North America.

The bank forecasts 86 percent expansion in the volume of total trade in the next 15 years, but the infrastructure trade component of that will grow by 110 percent in the same period.

Plug into that and China should see its share of global trade jump by a quarter to 12.3 percent from 9.8 percent in 2011 and become the world’s single biggest trading nation by 2016.

It could certainly help counteract the lingering risks to growth from the EU, where Asian aggregate exports fell 5.2 percent year-on-year in March, while still managing a 4.6 percent expansion globally, according to an analysis by Nomura.

“Our assessment is that the economies in Asia ex-Japan are generally experiencing green shoots of recovery, but we are cognizant that they could quickly wilt if the recession in the euro area deepens,” said the bank’s chief Asia economist, Rob Subbaraman, in a note to clients.

(Editing by Ramya Venugopal)

(Reuters) – Berkshire Hathaway Inc is adding to its shareholdings of two U.S. companies amid a market dip, billionaire investor Warren Buffett said on Monday.

Buffett, Berkshire’s controlling shareholder, also forecast record results this year for Berkshire’s largest non-insurance businesses, among them the railroad BNSF and the utility MidAmerican.

In an interview on cable television network CNBC from just outside his conglomerate’s home base in Omaha, Nebraska, he dismissed the dip in European shares after weekend elections in France and Greece.

“It’s going to be very, very difficult to resolve their problems,” he said of the euro zone countries, but he insisted they would do so eventually.

Buffett declined to identify the two portfolio stocks Berkshire was purchasing more of. He said Berkshire spent $60 million buying stocks last Friday would buy more today. It was not clear if the $60 billion was spent on just two stocks.

Over the weekend, Berkshire held its annual shareholder meeting in Omaha, a festival-like event that draws nearly 40,000 people for an hours-long question-and-answer session with Buffett and Berkshire Vice Chairman Charlie Munger.

It was during that session that Buffett revealed he had very nearly made an acquisition of more than $22 billion recently, which would have been one of his biggest ever.

The 81-year-old Buffett, recently diagnosed with early-stage prostate cancer, spent much of the day assuring shareholders he was in good health.

While Buffett has his acolytes, not everyone was impressed with his performance. Australian hedge fund manager John Hempton, in a post on his blog on Saturday, said the day was full of the usual questions on politics, economics and the like.

“I got all this — and for the most part I got the usual homily answers. (The same questions were asked last year and the year before and the year before that. Answers can be got from meeting notes),” Hempton wrote.

During the CNBC interview, Buffett reiterated his support for Wal-Mart Stores Inc, saying a scandal over bribe payments in Mexico did not change his opinion of the stock. He is Wal-Mart’s fifth-largest shareholder.

(Reporting By Ben Berkowitz; additional reporting by Lauren Tara LaCapra; Editing by John Wallace)

(Reuters) – In the midst of the stock market’s giant first quarter, the best since 1998, investors drove up share prices of money managers expecting booming results. But as the results came in, investors headed for the exits after discovering just how reliant money managers remained on out-of-favor stock funds.

Starting on April 18 with BlackRock Inc (BLK.N), the biggest money manager, and running through May 2 with Franklin Resources Inc (BEN.N), investors were disappointed with underwhelming revenue and profit growth. Across the industry, fund customers gravitated away from higher fee, actively managed stock funds and toward low-fee bond and index funds.

“When you have inflows into fixed-income funds and outflows in equity funds that equates into margin and fee pressure,” said John Miller, a portfolio manager for Ariel Fund in Chicago, which owns shares in Franklin, T. Rowe Price Group (TROW.O) and Janus Capital Group (JNS.N).

Through Thursday, shares of BlackRock had lost 9 percent since the New York firm reported just a 1 percent increase in profit last month. Janus has lost 9 percent since its underwhelming earnings report on April 24. And shares of Franklin, based in San Mateo, California, have traded down 5 percent in the days since it reported.

The share movements show how just how hard it is for many investors to judge fund companies based on broad market currents, said Gib Watson, chief executive of Envestnet Prima, an asset management research company. And the quarter’s results provided a stark reminder that the companies can’t count on equity products as they did in the past.

“Investors remained scarred, scared and conservative coming out of the global financial crisis,” Watson said.

Investors fled equities after many were burned by volatility in recent years, but as usual many are fighting the last war. The Standard & Poor’s 500 Index .SPX finished the first quarter at 1,408.47, up 12 percent from the end of December and up 6 percent from the end of the first quarter of 2011.

Fearful investors missed the rally. Investors pulled $21 billion from actively managed large cap U.S. stock funds during the first quarter of 2012, according to Chicago research firm Morningstar Inc That marked the eleventh straight quarter of net outflows in the high-profit category, which was once the industry’s bread and butter. In all, U.S. stock funds lost $13 billion in the first quarter and $121 billion over the past 12 months.

All other top categories of long-term funds took in money including international stock funds, bond funds, and those that invest in commodities or alternative areas like real estate.

That helped the companies with non-traditional products, according to Goldman Sachs analyst Marc Irizarry. Several managers also looked to impress investors by boosting their dividends in the quarter including T Rowe Price, Invesco and Legg Mason (LM.N), Irizarry noted in a May 3 report.

The higher dividends were “in line with the trend of investors seeking income and flows towards income products,” he wrote.

Shares in several companies have been flat or down since they announced results, driving a decline in the Dow Jones index of U.S. asset managers .DJUSAG since the end of March. In retrospect, the strong stock market in the first quarter boosted

total assets at most of the managers, and that helped bolster fee income. But anticipating even higher earnings, investors drove up shares in big asset managers during the run-up to earnings season.

That only set up companies like BlackRock for disappointment. Shares of the company, the world’s largest asset manager, fell 3 percent on April 18 after it reported a revenue decline of 1 percent to $2.2 billion. Assets rose 5 percent during the quarter but only 1 percent compared with a year earlier.

BlackRock’s problem was that flows went to the company’s indexed funds instead of actively managed accounts that generate higher fees.

Franklin Resources also failed to capitalize on the rising market. Its shares fell 3 percent on May 2 even though it reported a quarterly inflow of $5.6 billion, since the flows fell short of investor expectations.

Flows to U.S. equity funds were just $200 million, for instance, which contributed to an overall flow total that Nomura analyst Glenn Schorr described as good but not great — or, as he put it in the headline of a research note to investors, “Good, but Not Franklinsanity.”

(Reporting By Ross Kerber; Editing by Aaron Pressman and Steve Orlofsky)

(Reuters) – LinkedIn Corp raised its outlook after smashing first- quarter revenue and profit expectations, racking up strong growth from services that help companies find and hire employees.

“The guidance was surprisingly high,” said Ken Sena, an analyst with Evercore Partners. “I think it’s a matter of them being able to use the data they have more efficiently to drive better results for their partners.”

The company increased its 2012 revenue outlook on Thursday by $40 million to a range of $880 million to $900 million.

LinkedIn shares were up 10 percent in after-hours trading at $120.50 from their $109.41 close.

The company, based in Mountain View, California, was one of the first prominent U.S. social networking sites to make a debut in an initial public offering a year ago, whetting the appetites of those eagerly awaiting Facebook’s impending IPO. [ID:nL1E8G3JMT]

With more than 161 million members worldwide, LinkedIn is being closely watched by investors to see if its business model is solid.

LinkedIn shares are up nearly 70 percent year-to-date and are more than double its IPO price of $45.

A combination of international growth expansion and a hiring spree in order to generate more sales are behind the company’s revised forecast, said Kerry Rice, an analyst with Needham & Co.

“LinkedIn has the best value out there,” said Rice about companies seeking employees.

SNAPPING UP SLIDESHARE

LinkedIn also announced on Thursday that it acquired content sharing company SlideShare for $118.75 million in a mix of cash and stock. The service lets professionals upload presentations and share them with others.

The company was started in the living room of former PayPal executive Reid Hoffman, who co-founded LinkedIn in 2002. It makes money by selling services and subscriptions to individuals seeking jobs and companies looking to hire.

LinkedIn reported first quarter revenue rose 101 percent to $188.5 million, besting analysts’ average forecast of $178.58 million, according to Thomson Reuters I/B/E/S.

The top line results were bolstered by the strong performance of the company’s three units.

Revenue at its hiring solutions division, which represents more than half of total revenue, jumped 121 percent, while it grew 73 percent at its marketing solutions unit that sells display advertising.

“I think marketing solutions is the biggest surprise in terms of how much the numbers beat, given the weakness out of Yahoo,” said Herman Leung, a senior analyst with Susquehanna Financial Group, which holds a stake in LinkedIn.

Premium subscriptions — offered to members for more specialized services — saw revenue increase 91 percent.

Excluding special items, first-quarter earnings per share of 15 cents was well above analysts’ expectations of 9 cents per share.

Net income rose to $5 million from $2.1 million in the same quarter a year ago.

(Editing by Bernard Orr, Tim Dobbyn, Andre Grenon and Phil Berlowitz)

(Reuters) – The Obama administration unveiled long-awaited rules on Friday to bolster oversight of so-called “fracking” on public lands, seeking to allay concerns over the technology that has spurred a U.S. boom in shale gas drilling.

The Interior Department proposal would require that companies obtain government approval to use hydraulic fracturing, or fracking, in drilling for natural gas on federal lands.

The rules would not affect drilling on private land, where the bulk of shale exploration is taking place. Still, the administration has said it hopes the rules could be used as a template for state regulators.

The proposal would also require that companies disclose the fluids used in hydraulic fracturing after completing the process, which involves injecting water, sand and chemicals under the ground to extract fuel.

“As we continue to offer millions of acres of America’s public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place,” Interior Secretary Ken Salazar said in a statement.

The administration has walked a fine line on natural gas drilling, lauding the potential of the country’s vast shale gas reserves, while stressing the need to ensure drilling is safe.

Critics say shale gas drilling, and fracking in particular, have fouled water sources and polluted the environment. Green groups and some lawmakers have called for more federal regulation of fracking, which is mostly handled at state level.

Shale gas drillers argue that oversight of the drilling boom is most effectively managed by states and say excessive regulation could staunch production that is creating jobs and helping U.S. energy security.

“The bigger priority for us is to make sure we aren’t overlaying a process here that is going to harm the ability of states to continue their regulation of our production,” said Marty Durbin, of the American Petroleum Institute, an oil and gas industry group.

(Reporting by Ayesha Rascoe; Editing by Dale Hudson and Gerald E. McCormick)