Drug therapy ‘restores breathing’ after spinal injury

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A drug-based therapy appears to restore breathing in rats paralysed from the neck down by a spinal injury, according to scientists.

They hope their “exciting but early” findings could ultimately help free patients from ventilators.

The pioneering work, in Cell Reports, suggests the brain may not be needed for respiration if a nerve pathway in the spine can be awakened.

More studies are now needed to better understand and exploit this system.

‘No brain’ breathing

Normally, messages to and from the brain control breathing.

If the spinal cord is damaged high up in the neck, these messages can’t get through and a person will need mechanical assistance or a ventilator to breathe.

Experts have been looking at ways to repair spinal cord damage to reconnect with the brain, but the latest therapeutic approach, being explored at Case Western Reserve University, is entirely different.

Dr Jerry Silver and colleagues believe they have found an alternative nerve pathway for breathing in the spinal cord itself.

The researchers used a drug and a light therapy known as optogenetics to dial up this spinal system.

It appeared to control the body’s main muscle of respiration – the diaphragm, a dome-shaped sheet of muscle that sits underneath the lungs, separating the chest from the abdomen.

The live adult rats that they studied had severed spinal cords, meaning the brain could not be the source of the diaphragm movement or breathing that the researchers saw after they administered the therapy.

They believe the treatment works by stopping other nerve signals that would normally silence the spinal system that they found.

Dr Silver said: “This is a primitive response that has been kept in the spinal cord for emergencies, like gasping and screaming in response to danger.”

Although the researchers say the movements they saw resembled breathing, it’s not clear yet if it would be enough to sustain life. They plan more animal studies to check.

Dr Silver said: “Ultimately, the goal of this research would be to free people with these neck injuries from having to use mechanical ventilators.

“Infections and other complications from mechanical ventilators are a leading cause of death after spinal cord injuries.”

Dr Thomas Becker, an expert in neuroregeneration at Edinburgh Medical School, said: “This is an important discovery on the fundamental working of the spinal cord.

“Understanding the spinal network is the first step toward future therapies.

“This knowledge could be used for future therapies to restore breathing in patients who lost nerve connections from the brain as a consequence of spinal cord injury.”

Concern over norovirus increase by Betsi Cadwaladr health board

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The largest health board in Wales is urging people to be alert to the symptoms of norovirus, amid concerns over a rise in cases this year.

Last November, a major outbreak of the winter vomiting bug hit Wrexham Maelor Hospital and two community hospitals run by Betsi Cadwaladr health board.

The outbreak closed nine hospital wards in north Wales alone.

The sickness bug costs the UK economy £15m every year, according to researchers at Bangor University.

More than 130 patients were affected in north Wales last November and the outbreak resulted in 192 “lost bed days” – occasions where beds were unavailable to new patients.

Tracey Cooper, assistant director of nursing for infection prevention at the health board, said there were already reports of norovirus cases at care homes in north Wales.

“Estimates of the number of people affected are difficult to get because most people who have norovirus stay at home,” she said.

‘2.9m cases annually’

“We monitor what’s happening in the southern hemisphere through the summer, because their summer is our winter and vice versa.

“What we’ve seen this summer is they’ve had increasing numbers of norovirus and also increasing numbers of flu and very severe flu.

“Usually what they get in our summer, we then get in winter.

“So we are expecting to see an increased number of people affected by norovirus and an increasing number of people with flu and severe flu.”

Researchers at Bangor University in Gwynedd have estimated there are 2.9m cases of norovirus in the UK annually.

They calculate the cost to the economy is £15m every year, although other estimates place the cost much higher.

Humans do not develop immunity to norovirus, meaning people can catch it repeatedly.

It spreads easily, and can be transferred to different surfaces by touch.

Exclusive: Microsoft responded quietly after detecting secret database hack in 2013

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(Reuters) – Microsoft Corp’s secret internal database for tracking bugs in its own software was broken into by a highly sophisticated hacking group more than four years ago, according to five former employees, in only the second known breach of such a corporate database.

The company did not disclose the extent of the attack to the public or its customers after its discovery in 2013, but the five former employees described it to Reuters in separate interviews. Microsoft declined to discuss the incident.

The database contained descriptions of critical and unfixed vulnerabilities in some of the most widely used software in the world, including the Windows operating system. Spies for governments around the globe and other hackers covet such information because it shows them how to create tools for electronic break-ins.

The Microsoft flaws were fixed likely within months of the hack, according to the former employees. Yet speaking out for the first time, these former employees as well as U.S. officials informed of the breach by Reuters said it alarmed them because the hackers could have used the data at the time to mount attacks elsewhere, spreading their reach into government and corporate networks.

“Bad guys with inside access to that information would literally have a ‘skeleton key’ for hundreds of millions of computers around the world,” said Eric Rosenbach, who was U.S. deputy assistant secretary of defense for cyber at the time.

Companies of all stripes now are ramping up efforts to find and fix bugs in their software amid a wave of damaging hacking attacks. Many firms, including Microsoft, pay security researchers and hackers “bounties” for information about flaws – increasing the flow of bug data and rendering efforts to secure the material more urgent than ever.

In an email responding to questions from Reuters, Microsoft said: “Our security teams actively monitor cyber threats to help us prioritize and take appropriate action to keep customers protected.”

Sometime after learning of the attack, Microsoft went back and looked at breaches of other organizations around then, the five ex-employees said. It found no evidence that the stolen information had been used in those breaches.

Two current employees said the company stands by that assessment. Three of the former employees assert the study had too little data to be conclusive.

Microsoft tightened up security after the breach, the former employees said, walling the database off from the corporate network and requiring two authentications for access.

The dangers posed by information on such software vulnerabilities became a matter of broad public debate this year, after a National Security Agency stockpile of hacking tools was stolen, published and then used in the destructive “WannaCry” attacks against U.K. hospitals and other facilities.

After WannaCry, Microsoft President Brad Smith compared the NSA’s loss to the “the U.S. military having some of its Tomahawk missiles stolen,” and cited “the damage to civilians that comes from hoarding these vulnerabilities.”

Only one breach of a big database from a software company has been disclosed. In 2015, the nonprofit Mozilla Foundation – which develops the Firefox web browser – said an attacker had gotten access to a database that included 10 severe and unpatched flaws. One of those flaws was then leveraged in an attack on Firefox users, Mozilla disclosed at the time.

In contrast to Microsoft’s approach, Mozilla provided extensive details of the breach and urged its customers to take action.

Mozilla Chief Business and Legal Officer Denelle Dixon said the foundation told the public about what it knew in 2015 “not only inform and help protect our users, but also to help ourselves and other companies learn, and finally because openness and transparency are core to our mission.”

The Microsoft matter should remind companies to treat accurate bug reports as the “keys to the kingdom,” said Mark Weatherford, who was deputy undersecretary for cybersecurity at the U.S. Department of Homeland Security when Microsoft learned of the breach.

FILE PHOTO: An advertisement about the Microsoft Cybercrime Center plays behind a window reflecting a nearby building at the Microsoft office in Cambridge, Massachusetts, U.S. on May 15, 2017. REUTERS/Brian Snyder/File Photo

Like the Pentagon’s Rosenbach, Weatherford said he had not known of the Microsoft attack. Weatherford noted that most companies have strict security procedures around intellectual property and other sensitive corporate information.

“Your bug repository should be equally important,” he said.

ALARM SPREADS AFTER INTERNAL PROBE

Microsoft discovered the database breach in early 2013 after a highly skilled hacking group broke into computers at a number of major tech companies, including Apple Inc, Facebook Inc and Twitter Inc.

The group, variously called Morpho, Butterfly and Wild Neutron by security researchers elsewhere, exploited a flaw in the Java programming language to penetrate employees’ Apple Macintosh computers and then move to company networks.

The group remains active as one of the most proficient and mysterious hacking groups known to be in operation, according to security researchers. Experts can’t agree about whether it is backed by a national government, let alone which one.

More than a week after stories about the breaches first appeared in 2013, Microsoft published a brief statement that portrayed its own break-in as limited and made no reference to the bug database.

“As reported by Facebook and Apple, Microsoft can confirm that we also recently experienced a similar security intrusion,” the company said on Feb. 22, 2013.

“We found a small number of computers, including some in our Mac business unit, that were infected by malicious software using techniques similar to those documented by other organizations. We have no evidence of customer data being affected, and our investigation is ongoing.”

Inside the company, alarm spread as officials realized the database for tracking patches had been compromised, according to the five former security employees. They said the database was poorly protected, with access possible via little more than a password.

Concerns that hackers were using stolen bugs to conduct new attacks prompted Microsoft to compare the timing of those breaches with when the flaws had entered the database and when they were patched, according to the five former employees.

These people said the study concluded that even though the bugs in the database were used in ensuing hacking attacks, the perpetrators could have gotten the information elsewhere.

That finding helped justify Microsoft’s decision not to disclose the breach, the former employees said, and in many cases patches already had been released to its customers.

Three of the five former employees Reuters spoke with said the study could not rule out stolen bugs having been used in follow-on attacks.

“They absolutely discovered that bugs had been taken,” said one. “Whether or not those bugs were in use, I don’t think they did a very thorough job of discovering.”

That’s partly because Microsoft relied on automated reports from software crashes to tell when attacks started showing up. The problem with this approach, some security experts say, is that most sophisticated attacks do not cause crashes, and the most targeted machines – such as those with sensitive government information – are the least likely to allow automated reporting.

Editing by Jonathan Weber and Edward Tobin

Exclusive: Microsoft responded quietly after detecting secret database hack in 2013

Published by:

(Reuters) – Microsoft Corp’s secret internal database for tracking bugs in its own software was broken into by a highly sophisticated hacking group more than four years ago, according to five former employees, in only the second known breach of such a corporate database.

The company did not disclose the extent of the attack to the public or its customers after its discovery in 2013, but the five former employees described it to Reuters in separate interviews. Microsoft declined to discuss the incident.

The database contained descriptions of critical and unfixed vulnerabilities in some of the most widely used software in the world, including the Windows operating system. Spies for governments around the globe and other hackers covet such information because it shows them how to create tools for electronic break-ins.

The Microsoft flaws were fixed likely within months of the hack, according to the former employees. Yet speaking out for the first time, these former employees as well as U.S. officials informed of the breach by Reuters said it alarmed them because the hackers could have used the data at the time to mount attacks elsewhere, spreading their reach into government and corporate networks.

“Bad guys with inside access to that information would literally have a ‘skeleton key’ for hundreds of millions of computers around the world,” said Eric Rosenbach, who was U.S. deputy assistant secretary of defense for cyber at the time.

Companies of all stripes now are ramping up efforts to find and fix bugs in their software amid a wave of damaging hacking attacks. Many firms, including Microsoft, pay security researchers and hackers “bounties” for information about flaws – increasing the flow of bug data and rendering efforts to secure the material more urgent than ever.

In an email responding to questions from Reuters, Microsoft said: “Our security teams actively monitor cyber threats to help us prioritize and take appropriate action to keep customers protected.”

Sometime after learning of the attack, Microsoft went back and looked at breaches of other organizations around then, the five ex-employees said. It found no evidence that the stolen information had been used in those breaches.

Two current employees said the company stands by that assessment. Three of the former employees assert the study had too little data to be conclusive.

Microsoft tightened up security after the breach, the former employees said, walling the database off from the corporate network and requiring two authentications for access.

The dangers posed by information on such software vulnerabilities became a matter of broad public debate this year, after a National Security Agency stockpile of hacking tools was stolen, published and then used in the destructive “WannaCry” attacks against U.K. hospitals and other facilities.

After WannaCry, Microsoft President Brad Smith compared the NSA’s loss to the “the U.S. military having some of its Tomahawk missiles stolen,” and cited “the damage to civilians that comes from hoarding these vulnerabilities.”

Only one breach of a big database from a software company has been disclosed. In 2015, the nonprofit Mozilla Foundation – which develops the Firefox web browser – said an attacker had gotten access to a database that included 10 severe and unpatched flaws. One of those flaws was then leveraged in an attack on Firefox users, Mozilla disclosed at the time.

In contrast to Microsoft’s approach, Mozilla provided extensive details of the breach and urged its customers to take action.

Mozilla Chief Business and Legal Officer Denelle Dixon said the foundation told the public about what it knew in 2015 “not only inform and help protect our users, but also to help ourselves and other companies learn, and finally because openness and transparency are core to our mission.”

The Microsoft matter should remind companies to treat accurate bug reports as the “keys to the kingdom,” said Mark Weatherford, who was deputy undersecretary for cybersecurity at the U.S. Department of Homeland Security when Microsoft learned of the breach.

FILE PHOTO: An advertisement about the Microsoft Cybercrime Center plays behind a window reflecting a nearby building at the Microsoft office in Cambridge, Massachusetts, U.S. on May 15, 2017. REUTERS/Brian Snyder/File Photo

Like the Pentagon’s Rosenbach, Weatherford said he had not known of the Microsoft attack. Weatherford noted that most companies have strict security procedures around intellectual property and other sensitive corporate information.

“Your bug repository should be equally important,” he said.

ALARM SPREADS AFTER INTERNAL PROBE

Microsoft discovered the database breach in early 2013 after a highly skilled hacking group broke into computers at a number of major tech companies, including Apple Inc, Facebook Inc and Twitter Inc.

The group, variously called Morpho, Butterfly and Wild Neutron by security researchers elsewhere, exploited a flaw in the Java programming language to penetrate employees’ Apple Macintosh computers and then move to company networks.

The group remains active as one of the most proficient and mysterious hacking groups known to be in operation, according to security researchers. Experts can’t agree about whether it is backed by a national government, let alone which one.

More than a week after stories about the breaches first appeared in 2013, Microsoft published a brief statement that portrayed its own break-in as limited and made no reference to the bug database.

“As reported by Facebook and Apple, Microsoft can confirm that we also recently experienced a similar security intrusion,” the company said on Feb. 22, 2013.

“We found a small number of computers, including some in our Mac business unit, that were infected by malicious software using techniques similar to those documented by other organizations. We have no evidence of customer data being affected, and our investigation is ongoing.”

Inside the company, alarm spread as officials realized the database for tracking patches had been compromised, according to the five former security employees. They said the database was poorly protected, with access possible via little more than a password.

Concerns that hackers were using stolen bugs to conduct new attacks prompted Microsoft to compare the timing of those breaches with when the flaws had entered the database and when they were patched, according to the five former employees.

These people said the study concluded that even though the bugs in the database were used in ensuing hacking attacks, the perpetrators could have gotten the information elsewhere.

That finding helped justify Microsoft’s decision not to disclose the breach, the former employees said, and in many cases patches already had been released to its customers.

Three of the five former employees Reuters spoke with said the study could not rule out stolen bugs having been used in follow-on attacks.

“They absolutely discovered that bugs had been taken,” said one. “Whether or not those bugs were in use, I don’t think they did a very thorough job of discovering.”

That’s partly because Microsoft relied on automated reports from software crashes to tell when attacks started showing up. The problem with this approach, some security experts say, is that most sophisticated attacks do not cause crashes, and the most targeted machines – such as those with sensitive government information – are the least likely to allow automated reporting.

Editing by Jonathan Weber and Edward Tobin

Dow tops 23,000-mark for the first time on strong earnings

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(Reuters) – The Dow Jones Industrial Average breached the 23,000-mark for the first time on Tuesday, powered by strong earnings from UnitedHealth and Johnson & Johnson.

The blue-chip index has surpassed four similar 1,000-point milestones this year, indicating investor faith in the bull-run despite lofty stock valuations.

The broader market, however, was weighed down by losses in industrial, financial and technology stocks.

Shares of the largest U.S. health insurer (UNH.N) touched a life high, rising as much as 5.83 percent, after the company reported a stronger-than-expected profit and raised its full-year earnings forecast.

That, along with a 2.6 percent rise in Johnson & Johnson (JNJ.N), led a 1 percent gain in the S&P healthcare sector .SPXHC.

Goldman Sachs (GS.N) dipped 2.07 percent despite reporting a profit beat and smaller-than-expected trading revenue fall. Morgan Stanley (MS.N) rose 0.92 percent as its wealth management business insulated the bank from weakness in trading revenue.

“There was some good earnings, real good economic data in spite of the hurricanes,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

Trader Peter Tuchman wears a Dow 23,000 hat, after the Dow briefly traded above 23,000, at his post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 17, 2017. REUTERS/Brendan McDermid

“We’re not seeing a market that’s galloping along here. The market from a technical perspective is tired. What you’re seeing is some hesitancy but not any major declines.”

Treasury yields and dollar gained after a report that U.S. President Donald Trump was impressed by his meeting with economist John Taylor, who is considered to favor higher interest rates than current Federal Reserve Chair Janet Yellen.

The equity market, however, was not impacted by a report that Trump is likely to announce his choice before going to Asia in early November.

Slideshow (2 Images)

At 12:33 a.m. ET, the S&P 500 .SPX was down 1.1 points, or 0.04 percent, at 2,556.54 and the Nasdaq Composite .IXIC was down 2.98 points, or 0.05 percent, at 6,621.02.

The Dow Jones Industrial Average .DJI was up 19.47 points, or 0.08 percent, at 22,976.43, after briefly hitting the 23,000 mark, when only eight of its 30 components were making gains.

Nine of the 11 major S&P indexes were lower, led by a 0.42 percent drop in industrials .SPLRCI index.

General Electric’s (GE.N) 1.15 percent fall led losses in the industrial sector, while drop in shares of Microsoft (MSFT.O) and Intel (INTC.O) weighed on the tech sector.

Netflix (NFLX.O) slipped 1.15 percent after touching a record high as more subscribers signed up for its popular original content in the latest quarter.

ht Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

Dow tops 23,000-mark for the first time on strong earnings

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(Reuters) – The Dow Jones Industrial Average breached the 23,000-mark for the first time on Tuesday, powered by strong earnings from UnitedHealth and Johnson & Johnson.

The blue-chip index has surpassed four similar 1,000-point milestones this year, indicating investor faith in the bull-run despite lofty stock valuations.

The broader market, however, was weighed down by losses in industrial, financial and technology stocks.

Shares of the largest U.S. health insurer (UNH.N) touched a life high, rising as much as 5.83 percent, after the company reported a stronger-than-expected profit and raised its full-year earnings forecast.

That, along with a 2.6 percent rise in Johnson & Johnson (JNJ.N), led a 1 percent gain in the S&P healthcare sector .SPXHC.

Goldman Sachs (GS.N) dipped 2.07 percent despite reporting a profit beat and smaller-than-expected trading revenue fall. Morgan Stanley (MS.N) rose 0.92 percent as its wealth management business insulated the bank from weakness in trading revenue.

“There was some good earnings, real good economic data in spite of the hurricanes,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

Trader Peter Tuchman wears a Dow 23,000 hat, after the Dow briefly traded above 23,000, at his post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 17, 2017. REUTERS/Brendan McDermid

“We’re not seeing a market that’s galloping along here. The market from a technical perspective is tired. What you’re seeing is some hesitancy but not any major declines.”

Treasury yields and dollar gained after a report that U.S. President Donald Trump was impressed by his meeting with economist John Taylor, who is considered to favor higher interest rates than current Federal Reserve Chair Janet Yellen.

The equity market, however, was not impacted by a report that Trump is likely to announce his choice before going to Asia in early November.

Slideshow (2 Images)

At 12:33 a.m. ET, the S&P 500 .SPX was down 1.1 points, or 0.04 percent, at 2,556.54 and the Nasdaq Composite .IXIC was down 2.98 points, or 0.05 percent, at 6,621.02.

The Dow Jones Industrial Average .DJI was up 19.47 points, or 0.08 percent, at 22,976.43, after briefly hitting the 23,000 mark, when only eight of its 30 components were making gains.

Nine of the 11 major S&P indexes were lower, led by a 0.42 percent drop in industrials .SPLRCI index.

General Electric’s (GE.N) 1.15 percent fall led losses in the industrial sector, while drop in shares of Microsoft (MSFT.O) and Intel (INTC.O) weighed on the tech sector.

Netflix (NFLX.O) slipped 1.15 percent after touching a record high as more subscribers signed up for its popular original content in the latest quarter.

ht Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

Powell likely next Fed chief, though Yellen best suited: economists

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LONDON (Reuters) – Jerome Powell likely will be the next Federal Reserve chairman, according to a slim majority of economists in a Reuters poll – but most of them said current Fed Chair Janet Yellen would be the best option.

Just over half the 40 economists who participated in the survey, taken in the past few days, tipped Fed Governor Powell to be appointed chair by U.S. President Donald Trump when Yellen’s current four-year term ends on Feb 1, 2018.

Powell, a lawyer and former investment banker, has served as a member of the Fed’s Board of Governors since May 2012.

“The most continuity between Fed chairs would be Yellen to Powell. Given where we are in the tightening cycle some consistency would be welcomed by financial markets,” said Ryan Sweet at Moody’s Analytics.

“A regime change can be a little more rattling and unnerving for markets.”

The next most likely choice was Kevin Warsh, who served as a Fed governor during the financial crisis, with 13 forecasts. Yellen received only four.

Also on the list of options, alongside being able to suggest someone else, was Trump’s top economic adviser Gary Cohn, the former chief executive of U.S. Bancorp Richard Davis, Columbia Business School’s Glenn Hubbard, former head of BB&T John Allison and Stanford University professor John Taylor.

They were all chosen by either one or no economist at all.

When asked who would be the best choice, around two-thirds said Trump should allow Yellen to remain in place. Powell was in second place with seven of 37 votes.

There is little daylight between his and Yellen’s thinking and none of the economists polled said Powell would implement the most radical change in policy.

Instead they said Taylor would make the biggest change. Taylor is the author of an interest-rate forecasting model named after him in which rates are tied to inflation and growth. In line with this rule, he has long argued the Fed has kept rates too low for too long because of the risk of unwanted inflationary pressures.

Expectations interest rates would go higher and at a faster clip under his leadership got Warsh the second most votes.

“Warsh and Taylor might be hiking a bit more aggressively in the current environment,” said James Knightley at ING.

The Fed has slowly increased borrowing costs and is expected to raise rates again in December and follow that up with more hikes next year. [ECILT/US]

However, minutes from September’s Federal Open Market Committee meeting revealed policymakers remained divided over the slow pickup in inflation, raising doubts over the future path of interest rate hikes.

An inflation index closely watched by the Fed – the core PCE price index – has been below the central bank’s medium-term target of 2 percent for more than five years.

Trump said late last month he would make a choice “over the next two or three weeks” on who will lead U.S. monetary policy. He has met with four candidates, but his chief of staff said last week he was still some time away from making a decision.

In July, Trump said he might decide to renominate Yellen for a new four-year term, or turn to Cohn. He met with Taylor on Wednesday to discuss the job.

“Probably depends on what Trump has for breakfast that day,” said Scott Brown at Raymond James, when asked who the next chair would be.

Additional reporting and polling by Indradip Ghosh in BENGALURU; Editing by Ross Finley and Chizu Nomiyama

Wall Street banks look beyond trading to drive profits

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NEW YORK (Reuters) – Wall Street rivals Goldman Sachs Group Inc and Morgan Stanley topped analyst expectations on Tuesday, reporting third-quarter earnings gains from a range of products and services despite an industry-wide decline in bond trading.

Goldman’s private equity investments helped fuel its earnings beat, while Morgan Stanley’s wealth management unit delivered record revenue and profit margins. Both reported higher investment banking revenue than the year-ago period and kept a lid on expenses relative to revenue.

Executives at the biggest banks have argued that diverse business lines can offset temporary weakness in one area and that controlling costs can further pad the bottom line.

“This is the goal: that we’re not as reliant on sales and trading businesses,” Morgan Stanley Chief Financial Officer Jonathan Pruzan said in an interview. “In a subdued trading environment we can maintain our (market) share, yet when the market flexes up, we have capacity to participate in this growth.”

Shares of Morgan Stanley, which reported a better-than-expected 11 percent profit rise and topped several of Chief Executive Officer James Gorman’s financial targets, were 0.9 percent higher at $49.40.

For graphic on bank earnings: tmsnrt.rs/1Ry717W

At a conference last month, bank executives cautioned that third-quarter trading results would be weaker because of low bond market volatility and a strong year-ago quarter. That prepared investors and led analysts to revise earnings forecasts lower.

Goldman’s bond trading results were under particular scrutiny from investors, since the fifth-largest U.S. bank is more reliant on trading than competitors and does not have a significant retail operation to offset recent declines.

JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, which beat expectations when reporting results last week, have major consumer operations, while Morgan Stanley has a huge retail brokerage arm that has been expanding into lending.

Goldman’s 26 percent fall in third-quarter bond trading was within the 16 percent to 27 percent declines that Wall Street rivals had reported, but far less than the 40 percent drop some analysts had been expecting.

Overall, the bank reported a 3 percent profit decline that beat Wall Street estimates.

FILE PHOTO: A trader works at the Goldman Sachs stall on the floor of the New York Stock Exchange, New York, U.S. on April 16, 2012. REUTERS/Brendan McDermid/File Photo

EARNINGS DRIVERS

The unit that helped drive Goldman’s earnings beat, called investing and lending, has sharp revenue swings because of the type of assets it holds, ranging from private equity funds to debt securities. Their values fluctuate depending on changes in public markets or Goldman’s decision to sell assets, making results hard to predict.

In notes to clients early on Tuesday morning, a handful of analysts predicted the market would consider Goldman’s earnings beat less impressive because it was fueled by such a volatile business.

FILE PHOTO: The logo of Morgan Stanley is seen at an office building in Zurich, Switzerland September 22, 2016. REUTERS/Arnd Wiegmann/File Photo

“Don’t call it a come back,” Evercore ISI analyst Glenn Schorr titled a note to clients about Goldman’s results. “Goldman Sachs still has some work to do, particularly in (bond trading).”

Goldman shares were down 2.1 percent in afternoon trading.

Morgan Stanley’s earnings beat came from fee-driven businesses that Gorman has long been touting as more stable than trading. The Smith Barney brokerage the bank acquired from Citigroup nearly nine years ago is now consistently delivering at least half of Morgan Stanley’s revenue.

In the third quarter, Morgan Stanley’s wealth management business reported record revenue and a pretax profit margin of 26.5 percent, well above Gorman’s target range of 23 percent to 25 percent.

Gorman said on a call with analysts on Tuesday that he expects that margin to continue to improve as some retention packages paid to brokers expire at the end of this year.

Morgan Stanley’s bond trading revenue also topped Gorman’s $1 billion quarterly target while company-wide return on equity of 9.6 percent was within his target of 9 percent to 11 percent by year-end.

“Morgan Stanley continues to produce strong, balanced results across each of its businesses,” said Instinet analyst Steven Chubak, who predicted that Wall Street peers would raise profit estimates following its report.

For graphic on bank earnings, click: tmsnrt.rs/2zfFTDX

Reporting by Olivia Oran in New York; Additional reporting by Elizabeth Dilts and Sweta Singh; Writing by Lauren Tara LaCapra; Editing by Meredith Mazzilli

New cancer drugs help J&J top profit estimates

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(Reuters) – Johnson & Johnson posted better-than-expected third-quarter earnings, raising its full-year forecast due to growth from new cancer drugs and high-margin treatments picked up in its $30 billion acquisition of Actelion earlier this year.

Shares of J&J, part of the Dow Jones Industrial Average, rose 2.4 percent to $139.37 on Tuesday.

The shares have traded at or near record levels for much of the year. Guggenheim Securities analyst Tony Butler said the stock has historically done well when its high-margin pharmaceuticals business is the main driver of growth, rather than its consumer segment.

Sales at J&J’s pharmaceuticals segment rose 15.4 percent to $9.7 billion in the third quarter. Around half of that growth came from the Actelion deal.

Higher demand for J&J’s blood cancer drugs, Darzalex and Imbruvica, and Actelion’s rare diseases treatments are expected to boost earnings going forward.

The two cancer drugs should continue to capture market share, Guggenheim Securities’ Butler said.

“The oncology business is doing exceptionally well,” he said. “It’s really hard to figure out where that stops for both Darzalex and Imbruvica.”

Still, sales of J&J’s diabetes drug, Invokana, slipped around 10 percent from the second quarter. The company this year was required to add new warnings about the risk of foot and leg amputations and also has had to contend with competition from Eli Lilly and Co’s Jardiance.

Its rheumatoid arthritis drug, Remicade, also had weaker sales in the quarter.

J&J said adjusted earnings, excluding one-time items, rose 13 percent to $1.90 per share. Analysts on average were expecting an adjusted profit of $1.80 per share , according to Thomson Reuters I/B/E/S.

Sales at J&J’s consumer products segment, which makes Band-Aids, Neutrogena beauty products and Tylenol, rose 2.9 percent to $3.4 billion.

The company’s net earnings fell to $3.76 billion, or $1.37 per share, in the quarter from $4.27 billion, or $1.53 per share, a year earlier. The company said it was hurt by amortization and deal-related expenses.

J&J raised its 2017 profit forecast to $7.25 to $7.30 per share, from its previous forecast of $7.12 to $7.22 per share. It now expects revenue of $76.1 billion to $76.5 billion for the year.

Johnson & Johnson has 6 drug manufacturing facilities on Puerto Rico, which was hit by Hurricane Maria last month. It said that while they are all running again, it cannot rule out intermittent shortages of some of its drugs.

Reporting by Akankshita Mukhopadhyay in Bengaluru and Michael Erman in New York; Editing by Anil D’Silva and David Gregorio

MI5 boss: Terror threat at scale never seen before

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The UK is facing a “multidimensional threat” that is rapidly evolving “at a scale and pace we’ve not seen before”, the director general of MI5 has warned.

Andrew Parker said the security service is operating at an unprecedented level and has seen “a dramatic upshift in threats this year”.

“It’s at the highest tempo I’ve seen in my 34-year career,” he said. “Today there is more terrorist activity, coming at us more quickly, and it can be harder to detect.

“We’re now running well over 500 live operations involving around 3,000 individuals known to be currently involved in extremist activity in some way.

“As well as those we are looking at today, risk can also come from returnees from Syria and Iraq and also the growing pool of over 20,000 individuals we’ve looked at in the past in our terrorism investigations.

Video:Parker: ‘We simply can’t stop everything’

“And there will be some violent extremists not yet known to us at all.”

Speaking in central London during a rare public appearance, Mr Parker paid tribute to MI5’s 4,000 intelligence officers and the agents who risk their lives operating undercover to protect the country.

“They get up and come to work every single day to make terrorist attacks less likely and to keep the country safe,” he said.

“They’re constantly making tough professional judgments based on fragments of intelligence, pinpricks of light against a dark and shifting canvas.

“That is the job of MI5. When an attack happens, everyone in MI5 is deeply affected, on a personal and professional level.”

Separately, Mr Parker sat down for television interviews with the UK’s three major broadcasters – the first time any serving British intelligence chief has done so.

Image:Mr Parker warned terror activity is ‘at the highest tempo I’ve seen in my 34-year career’

He told Sky News that tech companies have an “ethical responsibility” to help counter terrorism, adding that he wanted to create partnerships with them.

“All those (technological) developments that we have give opportunities at the edges to terrorists as well,” he said.

“I don’t believe that any of these companies want those unintended side effects. They don’t want to be helping terrorists acquire the materials that they need for online purchasing.

“They don’t want to be helping them in encrypted communication avoid detection by MI5 and they don’t want to have their social media platforms used for terrorist propaganda.”

Mr Parker added that “some helpful action is being taken”, but said there is “a challenge of pace, volume and reach as these technologies continue to develop so rapidly.”

For the first time, the MI5 director general also revealed the existence of a European joint operational centre.

The facility is based in the Netherlands and brings together intelligence officers from Europe’s major agencies.

Image:Tech companies have an ‘ethical responsibility’ to help counter terrorism, Mr Parker said

Mr Parker said the operational centre had prevented attacks and captured more than a dozen terrorists “who might not otherwise have been found in time”.

He added: “We don’t just stand with our European colleagues, we work with them. We share intelligence. We run joint operations every single day.

“Only last week I met again with my counterparts from 30 European security services, known together as the Counter Terrorism Group or CTG, as we decided on the next stages of collective action.”

The joint intelligence centre operates separately to the EU, but the fact that Mr Parker dedicated a significant chunk of his speech to address European co-operation was no accident.

Brexit creates uncertainty for the intelligence agencies, as it does many British organisations.

Mr Parker was honest, he said the threat to the UK is evolving at a scale and pace not seen before.

It is a huge challenge to MI5 – a generational threat and there is no end in sight.