Today's Headlines

Bloomberg:

• Biden Vows Support for Ukraine as Deal With Russia Frays. Ukraine’s president urged the resumption of an offensive against militants after U.S. Vice President Joe Biden’s visit as an agreement with Russia to ease tensions in the former Soviet republic’s east neared collapse. With eastern Ukraine in control of “terrorists” supported by Russia, the separatists have “crossed the line” after bodies of a local lawmaker and a member of the Batkivshchyna party were found today, acting President Oleksandr Turchynov said in a statement on the parliament website. Biden expressed U.S. support for Ukraine during a visit to Kiev.

• Chinese Bad-Loan Ratio Rises ‘Significantly,’ Huarong Says. China’s bad-loan ratio rose “significantly” in the first quarter, increasing risks for the nation’s banking industry, according to the nation’s largest manager of soured debt. The business environment this year has been “grim and complicated” as lenders face pressures on asset quality, liquidity and lending margins, China Huarong Asset Management Co. Chairman Lai Xiaomin said during an internal meeting on April 15, according to a statement today on the website of the Beijing-based company. China’s slowing economy has made it tougher for borrowers to repay debt, driving up banks’ sour loans for a ninth straight quarter as of December to the highest level since 2008, data from the banking regulator show. New nonperforming loans amounted to more than 60 billion yuan ($9.6 billion) in the first two months of this year, compared with 100 billion yuan for all of 2013, China Business News reported on April 9, citing people it didn’t identify. “The economic indicators we’ve seen so far are quite disappointing and repayment risks are rising across sectors from property to small businesses due to weak demand,” Rainy Yuan, a Shanghai-based analyst at Masterlink Securities Corp., said by phone. “Banks will be hit in such an operating environment but managers of bad assets like Huarong and China Cinda Asset Management Co. stand to benefit” because they can accumulate more sour loans, she said. 

• European Stocks Advance as Glaxo Shares Increase on M&A. European stocks rose the most in seven weeks as health-care companies lead gains amid mergers and acquisitions activity. GlaxoSmithKline Plc rose 5.2 percent after Novartis AG agreed to buy the U.K. company’s cancer-drug business and form a consumer-health venture with Glaxo. AstraZeneca Plc (AZN) jumped the most since August 2011 after reports that Pfizer Inc. discussed acquiring the drugmaker in informal, now-discontinued talks. Royal Philips NV posted its biggest decline in almost a year after the world’s biggest lighting company reported first-quarter profit that missed analysts’ projections. The Stoxx Europe 600 Index added 1.4 percent to 337.03 at the close of trading, bringing its three-day gain to 3.2 percent, the most since June. 

• WTI Oil Falls Most in Three Months on Supply Outlook. WTI for May delivery, which expires today, slid $2.37 to $102 a barrel at 1:12 p.m. on the New York Mercantile Exchange. Futures are heading for the biggest drop since Jan. 2.

• Gold Falls to Lowest in 10 Weeks as Haven Demand Declines. Gold futures for June delivery fell 0.6 percent to $1,281.30 an ounce at 12:31 p.m. on the Comex in New York after touching $1,275.80, the lowest for a most-active contract since Feb. 11.

• Keystone Route Ruling Should Be Overturned, Nebraska Says. A court challenge holding up TransCanada Corp. (TRP)’s Keystone XL pipeline should be dismissed, Nebraska’s governor said, urging his state’s high court to allow the project to move forward. 

• Williams Urges Fed to Avoid Stoking Risk as It Boosts Jobs. Federal Reserve Bank of San Francisco President John Williams said the central bank should avoid encouraging excessive financial risk-taking as it pursues its goals of full employment and stable prices. “We’re exactly on the right track” with current policy, Williams said in an interview yesterday in San Francisco, predicting unemployment will fall to 5.5 percent by the end of next year and inflation will accelerate to about 1.7 percent. Trying to achieve the Fed’s goals sooner “would take policy actions that might have more negative effects,” he said. 

• PE Firms’ Dividend ‘Epidemic’ Intensifies Junk-Debt Alarm. Companies owned by private-equity firms are borrowing money to pay dividends like it’s 2007, adding to concern among regulators that excesses are emerging in the riskier parts of the debt markets. With defaults by the neediest U.S. borrowers approaching record lows, buyout firms are taking advantage of the Federal Reserve’s (FDTR) easy-money policies to extract payouts by piling more junk debt onto the companies they own. The central bank, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have warned in recent months that underwriting standards for speculative-grade issuers are weakening as investors become more willing to accept looser terms.

• McDonald’s(MCD) Sees April Sales Growth After Profit Fell. McDonald’s Corp. (MCD)’s free coffee may have slowed diners’ rush to check out Taco Bell’s waffle tacos. While McDonald’s today posted falling sales at its established U.S. locations and first-quarter profit that trailed analysts’ estimates, the world’s largest restaurant chain is showing some encouraging signs. The March drop in U.S. sales was the smallest in five months, and the company today said global store sales may be “modestly positive” in April, which would be the second straight monthly gain.

Wall Street Journal: 

• Tensions Flare in Eastern Ukraine Despite Biden Warning to Russia. Kiev Accuses Pro-Russian Forces of Killing 'Patriots,' Shooting at Military Plane.

• Crisis in Ukraine. Streaming Coverage:

• Supreme Court Upholds Michigan's Affirmative Action Ban. Justices Decide States Can End Racial Preferences Without Violating Constitution. 

• Shanghai Police Officers to Begin Carrying Guns. Move Illustrates Perception Violence From Crime and Terrorism are Growing in Expanding Urban Areas.

• Abe's Military Push May Please U.S. but Rattle Neighbors. Obama Visit Comes as Japan Re-Examines Constitutional Constraints on Military.

• Deals Reshape Novartis, Glaxo. Drugs Giants Unveil $20 Billion Deal That Will Transform Their Businesses.

CNBC:

• Einhorn: Tech bubble brewing, shorting momentums. David Einhorn has a clear warning for technology investors: we're in a bubble. "Now there is a clear consensus that we are witnessing our second tech bubble in 15 years," Greenlight Capital said in an investor letter Tuesday. "What is uncertain is how much further the bubble can expand, and what might pop it."

• Higher prices 'choke' housing. (video)

ZeroHedge:

• Here Come The Boots On The Ground: US Troops Heading To Eastern Europe.

• Number Of Middle Age Californians Living With Their Parents Soars.

• Tuesday Humor: QE Was For "The Man On The Street" Says Chairman Emeritus Bernanke.

• The Truce Is Over: Ukraine President Urges Restart Of Military Action.

• EU Confidence Hits 7-Year High (Just Don't Tell The Record Number Of Unemployed). (graph)

• Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again.

• Existing Home Sales Drop To Lowest Since July 2012; All-Cash Buyers, Investors Are 50% Of March Transactions. (graph)

• The Squeeze Continues... "Most Shorted" Stocks Are Screaming Higher. (graph)

• Richmond Fed Rebounds But Wages Tumble To 12-Month Lows. (graph)

Business Insider: 

• Putin Has Taken Control Of Russian Facebook(FB).

• Apple's(AAPL) 5.5-Inch iPhone 6 May Be Pushed Back To 2015.

• These 23 Countries Have More Than Doubled Military Spending In The Last Decade.

Reuters:

• Eli Lilly(LLY) to buy Novartis' animal health unit for $5.4 billion. Eli Lilly and Co said on Tuesday it will buy Swiss drugmaker Novartis AG's animal health business for $5.4 billion in cash to strengthen and diversify its Elanco unit. Lilly said it plans to fund the deal with about $3.4 billion of cash on hand and $2 billion of loans.