Wednesday, October 22, 2014

consumers may do more of their spending online

 U.S. consumers may do more of their spending online than ever before this holiday season, adding pressure on shopping malls already struggling to lure traffic.
44% of the average consumer’s shopping will be on the web, compared with about 40% last year, according to a survey released today by the National Retail Federation. That proportion, which includes browsing sessions where shoppers don’t make a purchase, is the highest since at least 2006, when the NRF first asked the question.
“Online has done a much better job of captivating the consumer with prices and early promotions,” Marshal Cohen, chief industry analyst at consulting firm NPD Group Inc., said in an interview. “The more people spend online, the less people are in the stores, and the less the impulse purchasing.”
U.S. retail sales are expected to rise 4.1% to $617 billion in November and December, the most in three years, according to an earlier report by the NRF. Employment gains are lifting consumer confidence and giving more shoppers the money to buy gifts this year. Given the online shift, brick-and- mortar stores may miss out on a chunk of this resurgence in spending.
According to the NRF, consumers also will spend less on themselves this holiday season, with 57% planning to spend $126.68 on non-gifts, down from $134.77 last year. On top of that, the survey found that shoppers will be more discerning, with 36% planning to check products and prices before they buy, the highest proportion in at least four years.

Tuesday, October 21, 2014

eBay cuts outlook

EBay Inc (EBAY.O) on Wednesday joined Wal-Mart Stores Inc (WMT.N) in cutting its outlook for the all-important holiday season, suggesting that the fourth quarter may turn out to be weaker than some analysts predicted as recently as last week.
The warnings from two of the retail industry's most influential players comes as investors re-assess the state of the global economy after weak data this week from the two largest countries, the United States and China.
EBay and Wal-Mart blamed divergent factors such as food stamp reductions and unfavorable search-engine optimization for the lower outlooks.
Both complained about the stronger dollar putting the skids on their forecasts, lowering the value of overseas sales once converted into the U.S. currency.
But analysts say stagnant incomes are also prompting U.S. consumers to curtail spending.
"EBay, especially on the marketplaces side, is actually suffering from company-specific setbacks," Wedbush Securities analyst Gil Luria said. "But overall, if e-commerce was growing faster or as fast as it was last year or a couple years ago, it would have probably helped them hide that."

EBay's fourth-quarter outlook was undercut by the strength of the dollar against the British pound, the euro and the Australian dollar, which together account for 35 percent of eBay's volume.
The stronger dollar alone forced eBay to cut its fourth-quarter revenue outlook by $120 million. Coupled with slower-than-expected growth in its marketplaces division, eBay was forced to lop off $300 million from its annual revenue forecast.

"As expected, (retail) sales have accelerated in the second half of the year, though economic signals remain mixed and consumers are still facing headwinds such as weak income growth," Moody's analyst Michael Zuccaro wrote on Wednesday.

Monday, October 20, 2014

Netflix Inc signed up fewer video streaming subscribers

Netflix Inc signed up fewer video streaming subscribers than forecast for the quarter that ended in September as its U.S. growth slowed markedly, sending its shares plunging as much as 27 percent.
The company blamed a $1 price hike to $8.99 a month for discouraging new sign-ups. It lured 3.02 million new streaming customers globally, versus the 3.69 million it projected in July.
Netflix attracted about 980,000 new customers in the United States, its largest market, down from 1.29 million in the same period a year earlier.
The news came after Time Warner Inc's HBO said on Wednesday it will offer new competition next year with a streaming service that does not require a pay TV subscription.
"Year-on-year net additions in the U.S. were down," Netflix said in a quarterly letter to shareholders. "As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago."
Shares of Netflix fell 25 percent to $333.53 in after-hours trading, from their $448.59 close on Nasdaq.
Netflix, waving off fears that a standalone HBO would draw users away, argued that many will subscribe to both services because they offer different shows.
"It is likely we both prosper as consumers move to Internet TV," the company's letter said.
Chief Executive Reed Hastings said in an interview that he expected other premium channels such as Showtime and Starz to sell programming directly to consumers. CBS-owned Showtime said it was weighing such a move. Starz has announced plans to offer that type of service overseas.
Netflix has invested in original series such as "House of Cards" and "Orange is the New Black" to compete with HBO, Inc and on-demand offerings from pay TV providers.

Netflix also is pushing into original movies, financing four Adam Sandler films and a sequel to martial-arts drama "Crouching Tiger, Hidden Dragon."

Sunday, October 19, 2014

Cyber-criminals have infected ATMs in Russia, Europe, United States, India, and China

Kaspersky Lab
Kaspersky Lab (Photo credit: Wikipedia)
Cyber-criminals have infected ATMs in Russia, Europe, United States, India, and China with malware to empty cash stored in the machines, Kaspersky Lab researchers said this week.
Attackers unlock the ATM case, possibly with a default master key, and use a bootable CD to infect the machiene with the Tyupkin malware, Kaspersky Lab researchers said in a post on SecureList Tuesday. The malware is designed to accept commands in the middle of the night Sundays and Mondays, and quiet the rest of the week, making it difficult to detect.
Malware's PathOnce the malware is loaded onto the ATM, attackers can see how much money is still in the cassettes in the machine. The attacker has to be physically in front of the ATM to enter a specially generated six-digit PIN generated by the malware in order to withdraw money. They can take up to 40 bills at a time without having to swipe an ATM card or enter any account information, Kaspersky Lab said. Approximately 50 machines have been infected this way, according to the report, which was part of a joint investigation with Interpol.
"A unique six-digit combination key based on random numbers is freshly generated for every session. This ensures that no person outside the gang could accidentally profit from the fraud. Then the malicious operator receives instructions by phone from another member of the gang who knows the algorithm and is able to generate a session key based on the number shown. This ensures that the mules collecting the cash do not try to go it alone," according to the blog post.
Interestingly, if the wrong key is entered, the malware disables the entire network. Kaspersky researchers were not sure why the network was disabled. It could be a way to delay remote investigators from analyzing the malware.

Saturday, October 18, 2014

World Wide Web Consortium (W3C) is working to develop open standards

The World Wide Web Consortium (W3C) is working to develop open standards that will enable companies and individuals to make secure payments over the web. Today (Wednesday 15 October) it launched a Payments Interest Group, which it hopes will attract industry participants from banks and card providers, e-commerce companies, merchants, the suppliers of browsers and digital wallets, telecoms operators and other interested parties, including regulatory bodies.
The W3C says its payments platform will cover "international low-value remittances, general retail payments, bill payments, and utility payments. The group will study the current gaps in Web technology regarding usability, security, and privacy, and recommend new work to fill those gaps."
It has no plans to develop its own digital wallet, and so on. However, it will develop open standards that enable different products to interoperate. It recognises that some industry giants already have payments systems — including Apple and Google — but the W3C aims to attract thousands of smaller suppliers. If the open "web commerce API" is strong enough, most companies will want to use it, if only to save development time.
The W3C has already spent about four years organizing discussions about web payments, but it’s a very complex area. It requires a range of technical developments including signed HTTP messages, secure messaging, identity credentials and digital receipts, as well as a payments infrastructure. Some of this work is being done by different groups, including the cryptography and NFC working groups.
The W3C says there are problems with the systems in use today. One is poor usability: it reckons that "the average shopping cart abandonment rate is 97 percent on mobile devices". Another is fraud. It says: "The rate of fraud in 'card not present' transactions (such as those common for transactions via Web sites) is 10 times higher than that when physical cards are used. These risks must be addressed if online commerce is to flourish."
The W3C system will include the facility for in-app payments. The web is becoming less important to smartphone and tablet users, who tend to prefer apps. The app stores also attract developers who see them as a way to monetize their work.

Friday, October 17, 2014

HBO will offer a stand-alone streaming service

english: This is the american HBO brand logo. ...
english: This is the american HBO brand logo. ® 2008 Home Box Office, Inc. All Rights Reserved. portugu√™s: Este √© o logotipo da marca estadunidense HBO. ® 2008 Home Box Office, Inc. Todos os Direitos Rervados. (Photo credit: Wikipedia)
HBO will offer a stand-alone streaming service to customers in the U.S. next year, removing a big brick from the shaky foundations of the cable-TV industry. ”It’s time to remove all barriers to those who want HBO,” said HBO Chief Executive Richard Plepler at Time Warner’s (TWX) investor meeting on Wednesday, Oct. 15.
Specifics are practically nonexistent. Plepler didn’t say how much such a service would cost, whether it would include a full slate of content, or even how people would buy it. A spokesman for HBO declined to give any additional details. But his remarks should be enough to strike fear into the likes of Comcast (CMCSA) and Cablevision (CVC), whose business models are based on maintaining barriers to highly coveted cable programming.
The biggest open questions are about how HBO pursues a more direct relationship with customers than it has had in the past. The cable network has hinted it would work with broadband providers to make it possible for subscribers to pay an additional fee to get the streaming service, even if they don’t pay for cable TV. Internet-service providers (which are often the same as cable-TV providers) want to stay in the loop, and maintaining good relations with them is still important for HBO. Selling a new streaming product this way would probably help appease them. And it would also save HBO from having to build its own infrastructure for billing and customers relations—although everyone is still going to blame HBO when the service goes down during Game of Thrones.
But HBO could decide it wants to deal directly with customers. Simply opening up its HBO Go website to anyone with a credit card would be the most straightforward thing to do from the customer’s perspective. It would also benefit HBO, which right now gets some information about what’s being watched but has no access to the valuable demographic data that drive decisions at Netflix (NFLX) and other players in the streaming-video industry.
While this seems like a pure win for people who want to live without cable, there are clear limitations for cord-cutters. So far HBO has taken a liberal approach to people sharing accounts on its streaming website, which is supposed to be available only to HBO’s cable subscribers. Once it starts offering a paid streaming service, however, the company could decide that the free ride for password sharers is over. There are simple steps HBO could quickly take to make the practice much more difficult, such as banning simultaneous users on a single account and tracking log-in locations to identify suspicious activity.

Thursday, October 16, 2014

Volatility in the market

Volatility has suddenly returned to U.S. stocks, and for the first time all year it doesn't appear that the weakness in equities will go away quietly in the span of a few days.
While the S&P 500 is still up 3.1 percent for the year, the index is off about 5 percent from its record high reached in mid-September, and closed out this week at the lowest level since May 23.
"We're still in a bull market, but in the near term things are a little bit dicey, and I don't think the decline is over with yet," said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida. The S&P also posted back-to-back intraday moves of more than 40 points this week for the first time in three years. Wall Street's fear gauge, the CBOE Volatility Index .VIX, ended at 21.24 on Friday, its highest level since early February.
Investors said they were concerned about the eventual end of Federal Reserve stimulus, as well as weak growth overseas and its potential effect on U.S. earnings. The slide in oil prices has also served as a harbinger for poor demand, and investors in general got caught betting heavily on further market gains at a time when this stew boiled over.
The volatility recalls the last major period of big market gyrations in the second half of 2011, when the first-ever credit downgrade of the United States and the threat of a debt default kept investors on their toes for several months. It is unclear whether the current turmoil will last as long.

"What is interesting about what is going on is that you have several themes all feeding into the same action, and that action is to mitigate risk," said Peter Kenny, chief market strategist of Clearpool Group in New York.

Wednesday, October 15, 2014

Pimco had total assets under management of $1.973 trillion

Pacific Investment Management Co., whose co-founder Bill Gross stunningly departed on Sept. 26, said late Friday that the Newport Beach, Calif.-firm had assets under management of $1.876 trillion as of Sept. 30, a 5 percent drop in the third quarter.
Pimco had total assets under management of $1.973 trillion as of June 30, 2014 and total assets under management of $1.92 trillion as of Dec. 31, 2013.
In a statement on its website, Pimco said "changes in AUM (assets under management) are a function of a number of factors, including portfolio returns, currency changes and net client flows."
Gross, one of the bond market's most renowned investors and the former manager of the flagship Pimco Total Return Fund, quit Pimco for distant rival Janus Capital Group Inc (JNS.N).
According to two sources familiar with the matter, he was expected to be fired the next day from the firm he helped launch more than four decades ago and built into a $2 trillion investment powerhouse.
Since Gross's departure, Pimco has seen heavy outflows, with $23.5 billion leaving the Pimco Total Return Fund in September alone.

Tuesday, October 14, 2014

More security breaches

Retailer Sears Holdings Corp said the payment data systems at its Kmart stores had been compromised, the latest in a series of computer security breaches to hit U.S. companies in recent months.
The U.S. Secret Service confirmed it was investigating the breach, which occurred in September and compromised the systems of Kmart, which has about 1,200 stores across the United States. The breach did not affect the Sears department store chain.
Sears said it believes hackers made off with some credit and debit card numbers but that the personal information, debit card PIN numbers, email addresses and social security numbers of its customers remained safe.
Security professionals said they were not surprised to learn that yet another major retailer was reporting a breach, adding they believe many big merchants do not have adequate systems for detecting cyberattacks, which means they still remain easy prey for hackers.
“This is going to continue indefinitely until people change their practices,” said Shawn Henry, a former senior cyber cop with the FBI who is now of the president of cyber forensics firm CrowdStrike Services.
He said that hackers are able to get into networks because they are “so broad and vast” that attackers will always find a way in. Retailers need to do a better job of quickly detecting them before they begin to steal data, he said.
Sears said that the attackers used malicious software that was undetectible using anti-virus software.
Tom Kellermann, chief cybersecurity officer with security software maker Trend Micro, said that retailers need to be prepared to deal with malicious software crafted specifically for the purposes of burglarizing retailers.
“It is debatable whether they had sufficient security in place to thwart these thieves. The real question that needs to be asked is why haven’t they learned the lessons from the attacks on Target and others.”

Kmart, which launched an investigation into the hacking, apologized to its customers on Friday and said it was working with federal authorities, banking partners and security firms in the probe.

Monday, October 13, 2014

Venezuela must pay Exxon Mobil Corp around $1.6 billion

A World Bank arbitration tribunal has determined Venezuela must pay Exxon Mobil Corp around $1.6 billion to compensate for a 2007 nationalization, the award posted on the ICSID website on Thursday showed.
The award is far below the amount of up to $10 billion Exxon had originally sought and also the $6 billion at which the International Centre for Settlement of Investment Disputes (ICSID) capped the case, excluding a tax claim.
A separate decision by the Paris-based ICC in 2012 ordered Venezuela state oil company PDVSA pay Exxon $908 million.
There will be no double compensation for the nationalization of the large heavy crude project in the Orinoco region, the tribunal added.
"The Tribunal takes note in both cases of the Claimants’ representation that, in the event of favorable award, the Claimants are willing to make the required reimbursements to PDVSA. Double recovery will thus be avoided," the ICSID award said.
Still, the decision comes at a bad time for cash-strapped Venezuela, which is already struggling with an economy widely seen as in recession, rampant inflation, and looming bond payments.
Venezuela has the option of seeking to annul the decision. It is unlikely the award will be nullified, but the move would likely buy Venezuela some time and potentially allow for parallel negotiations.
PDVSA declined to comment. Calls and e-mails to Venezuela's Oil Ministry went unanswered.

 Exxon, the world's largest publicly traded oil company, said separately that the decision shows Venezuela "failed to provide fair compensation."