1 of 4. Trader Fred Demarco works on the floor of the New York Stock Exchange, October 12, 2012.

NEW YORK | Fri Oct 12, 2012 8:12pm EDT

NEW YORK (Reuters) - Stocks wrapped up their worst week in four months, led lower on Friday by financial shares as results from Wells Fargo and JPMorgan ignited concerns about shrinking profit margins for big lenders.

Shares of Wells Fargo (WFC.N) fell 2.6 percent to $34.25 and JPMorgan Chase & Co (JPM.N) lost 1.1 percent to $41.62 as concerns grew over their lower net interest margin - the difference between what a bank pays on deposits and what it makes on loans - which could narrow further as the Federal Reserve keeps interest rates near zero.

The lackluster market reaction came even though both Wells Fargo and JPMorgan, the two largest U.S. financial stocks by market value, reported record profits.

"Bank shares as a group have had a nice move (up) this year so far," said Ken Polcari, managing director at ICAP Equities in New York. "Guidance is cautious so people are taking money off the table."

The results sparked a selloff in other bank shares. An S&P financial index .GSPF, down 1.4 percent, represented the worst performer of the S&P 500's top 10 sectors. The KBW Bank index .BKX lost 2.5 percent.

Polcari said the low volume that came with this week's decline indicated this was not a sign of panic. Since hitting a near five-year intraday high of 1,474.51 on September 14, the benchmark S&P 500 Index has fallen 3.1 percent.

"If we keep getting negative reports, selling will pick up," he said.

Expectations are low for S&P 500 companies' results. Quarterly earnings are forecast to fall 3 percent from a year ago, compared with a 2.1 percent drop estimated at the start of the month, according to Thomson Reuters data.

The Dow Jones industrial average .DJI edged up 2.46 points, or 0.02 percent, to 13,328.85 at the close. But the S&P 500 .SPX fell 4.25 points, or 0.30 percent, to finish at 1,428.59. The Nasdaq Composite .IXIC dipped 5.30 points, or 0.17 percent, to 3,044.11.

The S&P 500 closed right above its 50-day moving average, barely enough to avoid going into the weekend with a technical red flag hanging over the market.

Despite several encouraging data points this week, the benchmark S&P 500 fell 2.2 percent - its worst weekly performance since the week ended June 1.

Shares of Workday Inc (WDAY.N), a cloud computing company that has yet to turn a profit, soared nearly 74 percent to $48.69 in their market debut, driving some tech analysts to question the lofty valuation.

Advanced Micro Devices Inc (AMD.N) fell 14.4 percent to $2.74 a day after the chipmaker said its third-quarter revenue probably fell 10 percent from the previous quarter as a weak global economy and a growing preference for tablets slams the PC industry.

About 5.5 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.52 billion shares.

On the NYSE, about seven issues fell for every four that rose. On the Nasdaq, almost two issues fell for every one that advanced.

Earlier in the session, the market was supported by Thomson Reuters-University of Michigan data showing U.S. consumer sentiment unexpectedly rose to its highest in five years in October, in the latest in a string of encouraging signs about the economy.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

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An elderly man walks with his cane amid shoppers at the Glendale Galleria shopping mall on Black Friday in Glendale, California November 28, 2008.

CHICAGO | Thu Oct 11, 2012 9:18am EDT

CHICAGO (Reuters) - Last October seniors got some really good news about their Social Security cost-of-living adjustment. This October? Not so much.

This year seniors have benefited from the robust 3.6 percent 2012 Social Security cost-of-living adjustment (COLA). Adding to the good news, they learned Medicare premiums wouldn't take much of a nick out of their inflation raise.

Next year, the Social Security COLA for 2013 is expected to be 1.4 percent - and for many seniors, much of that will be eaten up by a higher Medicare Part B premium.

We won't get the final word on the 2013 Social Security COLA until October 16, after the Bureau of Labor Statistics (BLS) releases inflation numbers for September. But it's not looking good for retirees on a fixed income.

To reach the yearly COLA adjustment the Social Security Administration averages together third-quarter inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). July and August reports are pointing toward a COLA of just 1.4 percent.

However, many seniors won't even get that much because of the interplay of the COLA and premiums for Medicare Part B, which covers outpatient services. These two go hand in hand since the premium is deducted from most seniors' benefits.

Last year the Part B premium rose by a modest $3.50 per month, which meant seniors kept most of that large 3.6 percent COLA. For example, a senior receiving the average monthly Social Security benefit ($1,177) received a net 3.3 percent increase.

Experts expect the Part B premium to rise from 5 percent to 10 percent in 2013; the Medicare trustees said earlier this year that a 9.2 percent increase was most likely. That translates to a $9.20 monthly increase over this year's $99.90 premium. That means some seniors will see no net increase at all, while many others will get far less than 1.4 percent.

"It certainly isn't going to be enough to face the higher heating bills and all the other higher expenses seniors will face next year," says Mary Johnson, a Social Security and Medicare policy analyst for the Senior Citizens League (SCL), a nonpartisan consumer advocacy group.

The likely paltry COLA will also add to the debate over what measure of inflation is most appropriate for determining Social Security's annual benefit adjustments.

WHO PAYS THE FREIGHT

Here's how it works. By law, most Medicare enrollees can't be charged a Part B premium that produces a net reduction in Social Security benefits. Assuming the Social Security and Medicare percentages come in as forecast, this "hold harmless" feature would protect seniors with Social Security benefits of $625 or lower, according to SCL.

Seniors with higher benefits would see a small inflation raise. A senior with a $1,000 monthly benefit would see a 0.48 percent net increase after the Part B adjustment; for a $1,500 monthly benefit, the net COLA would be 0.79 percent.

The hold-harmless provision doesn't protect three groups of beneficiaries: high-income seniors, new enrollees in Medicare this year (whose benefits can't decline from one year to the next), and low-income seniors who are eligible for Medicare and Medicaid. (This last group doesn't pay the premium out of pocket anyway; state Medicaid programs pick up the costs.)

High-income beneficiaries include individuals with annual income starting at $85,000 (single filers) or $170,000 (joint filers), and move up from there.

This group pays full freight on the Part B premium, plus an income-based surcharge. And the surcharges aren't limited to Part B: Extra premiums also are charged for prescription drug plans (Part D) and Medicare Advantage plans (Part C).

THE UNCOLA

This year's small COLA will figure in Washington's discussion of selecting the best inflation measure for determining Social Security's annual benefit adjustments.

Many advocates for seniors argue that the CPI-W understates the inflation that affects seniors - mainly their healthcare expenses. They've been pushing for adoption of a more realistic measure that better reflects seniors' costs - an experimental index maintained by the BLS called the CPI-E (for elderly).

Meanwhile, the key federal deficit reduction plans that have been advanced in Washington advocates moving in the opposite direction. These plans have recommended adopting a measure of inflation called the "chained CPI." That index would rise more slowly than the current measure (the CPI-W).

That debate is apt to continue for some time. Meanwhile, next year's COLA looks like an "October surprise" for seniors on Social Security.

(The writer is a Reuters columnist. The opinions expressed are his own.)

(Editing by Chelsea Emery and Prudence Crowther)

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A man looks at his iPad while sitting in a cafe in central Beijing June 6, 2012.

SAN FRANCISCO | Fri Oct 12, 2012 6:17pm EDT

SAN FRANCISCO (Reuters) - Apple Inc will host an event on October 23 where it is expected to unveil a smaller iPad that will take on the less expensive devices offered by Amazon.com Inc and Google Inc, a source familiar with the matter said on Friday.

Wall Street analysts have predicted for months that Apple was planning a smaller, less costly version of its popular iPad to take on cheaper competing devices, a move that analysts say might hurt its margins, but prevent its rivals from dominating an increasingly important computing segment.

The source did not specify what the product would be and an Apple spokesman declined to comment, but tech blog AllThingsD reported earlier on Friday that Apple would launch the mini iPad at the event. The device is expected by many experts to have a screen between 7 and 8 inches.

A smaller iPad will directly compete with e-commerce company Amazon's Kindle Fire HD tablet and Google's Nexus 7. Both devices have 7-inch screens and sell for $199. The first Kindle Fire, launched last year, grabbed about a fifth of the U.S. tablet market.

The consumer device company is gearing up to unveil a new product at a major October 23 event, said the source, who declined to be named, only days before Microsoft Corp unveils Windows 8 and its new Surface tablet on October 26.

The Nexus 7, manufactured by Asustek Computer Inc, has also seen a successful start, with the tablet selling out soon after launch.

One Wall Street analyst said he had seen the smaller tablet, dubbed iPad mini by the media, while visiting component suppliers in Asia.

"We actually had the opportunity to play with a pilot iPad Mini used by one of the vendors," Topeka Capital analyst Brian White said. "This 7.85-inch iPad Mini fit our hands like a glove and we were easily able to tuck the device in our sport coat, offering consumers a more mobile iPad experience for certain use cases."

Apple events are typically among the most-watched items on the industry calendar, monitored by consumers and technology investors alike. The event in two weeks, however, comes at a time of volatility for the popular technology stock.

Apple shares closed up 0.25 percent at $629.714 on the Nasdaq market, barely recouping significant losses suffered over the past three weeks as investors cashed out after it touched an all-time high of $705.07 on September 21.

While the stock is up 55 percent this year, it is currently down 10 percent from its record high. Wall Street analysts have cited concerns about disruptions of iPhone supplies after a riot in September at one of the plants operated by its main contract manufacturer, Foxconn Technology, and sharp criticism from consumers about errors in its Maps service.

MARGIN RISK?

Apple's fiscal fourth quarter financial results are scheduled to be released on October 25, two days after the event, offering analysts a rare opportunity to grill executives about a new product just after details are made public.

A smaller iPad could be a risk to Apple's industry-leading margins, given that neither Amazon nor Google has been known to make much money from the smaller tablets.

Amazon's first Kindle Fire just about breaks even, according to IHS iSupply estimates. But the internet retailer sells a lot of content - music, books - through the Kindle line.

Google has said that its $199 Nexus 7 is being sold at cost and has no profit margin.

Apple earned gross margins of 23 percent to 32 percent on its U.S. iPad sales between October 2010 and the end of March 2012, a court filing by Apple in a recent patent trial against Samsung Electronics Co Ltd revealed in July. The company's margins on U.S. iPhone sales are almost double those of the iPad, averaging between 49 percent and 58 percent.

Sterne Agee analyst Shaw Wu said that, if Apple prices the smaller tablet between $299 to $349, it could maintain the current margins.

"The biggest cost in a tablet is the display," he said. "On a mini, the display will be a bit cheaper.

If the tablet is priced below $299, Apple could still maintain a decent margin if it offers 8 GB of storage instead of the minimum 16 GB storage it has in the current iPad, Wu added.

A mini version of the iPad marks a departure for the company that now has just one 9.7-inch iPad, although it does come with various storage options and starts at $499.

Late Apple founder Steve Jobs famously derided the 7-inch screen as unwieldy for tablet applications, saying the devices should come with sandpaper so that users can file down their fingers to use them.

But an internal email revealed during the patent trial showed that Internet chief Eddy Cue argued there was a market for a 7-inch tablet and that Apple should have one. The email, sent in early 2011 to top Apple executives, said Jobs had warmed up to the idea.

Struggling Silicon Valley technology icon Hewlett Packard Co was among the first to show, albeit unwittingly, that there was indeed a healthy market for cheap tablets. Sales of the TouchPad took off after the company slashed the price to $99 from $399 and $499 after deciding to kill the product.

(Reporting By Poornima Gupta and Jennifer Saba; Editing by Gerald E. McCormick, Marguerita Choy and Andre Grenon)

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Fri Oct 12, 2012 5:41pm EDT

n">(Reuters) - Two of the nation's biggest banks, Wells Fargo & Co and J.P. Morgan Chase & Co, made record profits over the last three months from a sharp rise in mortgage lending, though performance stumbles elsewhere left investors worried about how long those profits can last.

Both banks reported double-digit increases in third-quarter earnings on Friday, as record-low interest rates and an uptick in the housing market drove a boom in mortgages.

But analysts said those record earnings might not be sustainable, as each bank posted declining margins that suggest they may have a harder time earning as much in the future.

J.P. Morgan shares closed the day down 1.1 percent at $41.62, while Wells Fargo declined 2.6 percent to $34.25. Both underperformed the broader market, which was essentially flat.

The issue is the "net interest margin," or the spread between what the banks earn from loans and what they pay out on deposits. That margin contracted in both cases.

"You have a battle between net interest margin and mortgage banking," said Marty Mosby, an analyst at Guggenheim Securities, referring to the tension between profit-drivers now and potential future results.

MORTGAGES ON THE MOVE

The mortgage market dragged on banks during the worst of the financial crisis but has become a bright spot of late. After the Federal Reserve said in September it would buy huge quantities of mortgage bonds every month for the foreseeable future, rates fell sharply and loan applications soared.

Wells Fargo, by far the largest mortgage lender in the country - three times the size of its closest peer - made $139 billion in mortgages in the three months ending in September, up $50 billion from a year earlier.

There is a limit to that growth, though, warned J.P. Morgan Chief Executive Jamie Dimon.

"We don't expect to count on high margins and mortgage origination forever," Dimon said on Friday. The refinancing trend, he added, will continue "next quarter, maybe for a couple of quarters after that, but it won't last much longer."

SMALLER WHALES

Besides the good news about the housing market, J.P. Morgan also reported that losses are shrinking rapidly from the bad trades engineered by the so-called London Whale, which cost the bank almost $6 billion in the first half of the year.

The losses cast a harsh light on Dimon, the chief executive viewed by some as a potential leading candidate for U.S. Treasury secretary in a second Obama administration. He has apologized repeatedly, and at length, for failing to catch the problem before it grew so big.

The nation's largest bank by assets posted net income of $5.71 billion, or $1.40 a share, up 34 percent from a profit of $4.26 billion, or $1.02 a share, a year earlier.

Analysts on average had expected a profit of $1.24 a share, according to surveys by Thomson Reuters I/B/E/S. Barclays Capital said it was the 17th time in the last 18 quarters that the bank beat Wall Street's forecasts.

Net interest margin contracted to 2.43 percent in the quarter, 4 basis points less than the prior quarter and 23 basis points lower than a year earlier.

Wells Fargo, the nation's fourth-largest bank by deposits, earned $4.9 billion in the quarter, 22 percent more than a year earlier. Per-share earnings of 88 cents just beat the average Wall Street forecast of 87 cents, although revenue missed estimates by some $270 million.

Wells, Warren Buffett's favorite bank, stumbled on the net interest margin. It fell 25 basis points to 3.66 percent in the third quarter. That was a sharper drop than expected, though bank executives insisted they were unconcerned and that investors should focus on overall profitability.

Keefe, Bruyette & Woods analyst Frederick Cannon, in a research report for clients, said the strength in mortgages was good but the weakness in the interest margin was more important.

(Reporting by David Henry in New York and Rick Rothacker in Charlotte, N.C.; additional reporting by Dan Wilchins and Jed Horowitz in New York; writing by Ben Berkowitz; editing by Matthew Lewis)

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n">(Reuters) - The Investment Company Institute on Thursday issued the following money market mutual fund assets report:

"Total money market mutual fund assets decreased by $1.38 billion to $2.562 trillion for the week ended Wednesday, October 10, the Investment Company Institute reported today. Taxable government funds decreased by $3.89 billion, taxable non-government funds increased by $4.64 billion, and tax-exempt funds decreased by $2.13 billion.

Retail: Assets of retail money market funds decreased by $2.90 billion to $886.96 billion. Taxable government money market fund assets in the retail category decreased by $190 million to $186.11 billion, taxable non-government money market fund assets decreased by $1.84 billion to $512.00 billion, and tax-exempt fund assets decreased by $860 million to $188.84 billion.

Institutional: Assets of institutional money market funds increased by $1.52 billion to $1.675 trillion. Among institutional funds, taxable government money market fund assets decreased by $3.70 billion to $670.47 billion, taxable non-government money market fund assets increased by $6.49 billion to $924.21 billion, and tax-exempt fund assets decreased by $1.27 billion to $80.78 billion.

ICI reports money market fund assets to the Federal Reserve each week. Revisions are due to data adjustments, reclassifications, and changes in the number of funds reporting. Weekly money market assets for the last 20 weeks are available on the ICI website."

NOTE: ICI's Web site is www.ici.org

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1 of 8. Singer Jennifer Hudson performs a medley during the taping of ''We Will Always Love You: A Grammy Salute To Whitney Houston'' at the Nokia theatre in Los Angeles, California October 11, 2012. The program will air on November 16.

LOS ANGELES | Fri Oct 12, 2012 2:05pm EDT

LOS ANGELES (Reuters) - Whitney Houston was given a final sendoff by the Grammys on Thursday as Halle Berry, Britney Spears, Jennifer Hudson, Usher and other stars shared their memories and performed in homage to the late singer.

Academy-award winner Berry made a tearful introduction at the "We Will Always Love You: A Grammy Salute to Whitney Houston" special, and praised the "unforgettable" performer.

"She inspired a generation of little girls and women to believe in their own dream and to know that they had within themselves the greatest gift of all. I was one of those little girls who then became a woman who never ever, ever, stopped loving Whitney Houston," Berry said.

The event was attended by Houston's daughter Bobbi Kristina Brown, who was joined by boyfriend Nick Gordon and sister-in-law Pat Houston.

Noticeably absent was Houston's mother, Cissy, and her brother Gary. Record label executive Clive Davis, who discovered the late singer, sat alongside the family in the front row.

The tribute comes towards the end of a year in which the music world was rocked by Houston's sudden death at age 48 in February. She was found dead in a Beverly Hills hotel bathtub on the night before the Grammy awards, from what authorities said was accidental drowning brought on by cocaine use and heart disease.

A homage to Houston was quickly put together at the Grammy awards in February with Jennifer Hudson singing a heart-felt rendition of "I Will Always Love You" on a stage lit by a single spotlight. Later in May, R&B star Jordin Sparks, who co-starred with Houston in the late singer's final movie "Sparkle," sang the same song at the Billboard Music Awards in tribute.

There was no mention of Houston's turbulent personal life and history of drug abuse on Thursday as the Grammy organizers decided to focus on the late singer's career achievements and best-known performances, including her rendition of the "Star-Spangled Banner" at the 1991 Superbowl.

Hudson on Thursday channeled Houston's style from the 1980s with big hair and a glittering blazer, performing more uptempo numbers with a medley of "I'm Every Woman," "How Will I Know" and "I Wanna Dance With Somebody".

R&B star Usher sang "I Believe In You And Me" and gospel singers Cece Winans and Yolanda Adams delivered a rousing performance of "Count On Me," which had Houston's family in tears.

Canadian singer Celine Dion was on the bill to perform on the night but was unable to make it, taping her rendition of "The Greatest Love Of All" in Canada to air during the televised special.

The event organizers decided to leave Houston's best-known song, "I Will Always Love You," to the late singer, showing a tape of her singing at the 1994 Grammy awards.

Presenters at the event shared their memories. Pop star and "X Factor" judge Spears said her version of Houston's "I Have Nothing" scored her a deal with a record label and started her career.

The audience were also treated to exclusive interviews from the early days of Houston's career, showing her talking about fame, philosophy and religion.

The one-hour CBS special will be aired on November 16.

(Reporting By Piya Sinha-Roy, editing by Elaine Lies and Andrew Heavens)

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Fri Oct 12, 2012 10:15pm EDT

n">(Reuters) - Bankrupt solar firm Solyndra has filed a lawsuit against three U.S.-listed Chinese solar players, including Suntech Power Holdings Co (STP.N), seeking $1.5 billion in compensation due to monopolization by these firms, according to court documents filed on Thursday.

The lawsuit was filed against Suntech, Trina Solar Ltd (TSL.N) and Yingli Green Energy Holding Co (YGE.N) claiming that the trio's panel prices moved in tandem - falling 75 percent in four years in the U.S.

Solyndra, which claims in the lawsuit that the trio were involved in predatory pricing and price fixing, filed for bankruptcy a year ago as it could no longer compete with plunging prices of solar panels imported from China.

U.S. solar companies launched a complaint last year alleging protectionism from Beijing for Chinese panel makers, sparking trade disputes between the two countries.

As a result of the ongoing tryst, the U.S. slapped steep final duties on billions of dollars of solar energy products from China earlier this week.

Defendants - Suntech, Trina and Yingli - came to the U.S. and raised money from the stock market and deployed that capital to "destroy" American solar manufacturers, said Solyndra in the suit filed in a Northern California district court.

"We just received notice of this complaint, but from our initial review, these are unwarranted and misguided claims from a company that has a clear history of failed technology and achievements," said Robert Petrina, Managing Director, Yingli Green Energy Americas.

The other two Chinese companies named as defendants were not available for comment outside of business hours.

Solyndra has sold everything from its remaining inventory and assembly equipment to office computers in a bid to raise money to repay creditors.

The Obama administration came under fire for missing signs of financial trouble at the California-based Solyndra and approving nearly $535 million in loans in a bid to spark a clean energy industry and create jobs through stimulus spending.

Last year, executives from bankrupt Solyndra LLC testified that a flood of cheap Chinese solar panels kept it from realizing $1.2 billion in contracts it announced in 2008.

The lawsuit is Solyndra, LLC v. Suntech Power Holdings Co Ltd et al, U.S. District Court, Northern District of California, No. 12-05272.

(Reporting by Thyagaraju Adinarayan and Divya Lad in Bangalore; Editing by Bernard Orr and Michael Perry)

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Two men chat in front of a polka dot covered Sotheby's signage, part of an installation by Japanese artist Yayoi Kusama, at Sotheby's newly opened gallery in Hong Kong May 18, 2012.

HONG KONG | Tue Oct 9, 2012 12:12pm EDT

HONG KONG (Reuters) - Sotheby's sold HK$2 billion ($258 million) worth of Asian and Chinese artwork and luxury goods in its autumn sales in Hong Kong on Tuesday, a 37 percent decline from the same period last year as the market consolidates on a weaker China economy.

The tally was also some 18 percent less than the $316 million Sotheby's sold in its Hong Kong spring sales.

The modest showing comes as two major Chinese auction houses muscle into the Hong Kong market for the first time, posing a fresh competitive threat for Sotheby's and rival Christie's whose revenues in Hong Kong have soared on the Chinese art boom in recent years, but which may now be difficult to sustain.

Anchoring the five-day auction series was again Chinese imperial ceramics with a pair of yellow ground famille-rose double-gourd Qianlong vases fetching HK$107 million ($13.7 million) while a pair of turquoise-glazed "pomegranate" vases from the Qianlong period that sold for HK$23 million from the prominent J.M. Hu collection of Qing monochrome wares.

Faring less well, however, were pieces of lesser quality and minor flaws amid more discriminating bidding, with buyers indifferent to some porcelain pieces from even great old European collections such as the Meiyintang.

"It's still quite strong, but more selective," said John Berwald, a London dealer in the room. "It's not so crazy and I think it's better like this. It has just lost some of its exuberance," added Berwald who bid for several Qing wares.

China last year accounted for nearly 44 percent of global auction revenue, according to the French government's Conseil des Ventes art market report, and is a vital driver for the global art market now, making Sotheby's results a stress test of sorts with broader art sector repercussions.

But the market has been dogged by a proliferation of issues including a large-scale Chinese customs probe into tax evasion on art imports that has cooled recent sentiment, while high art taxes, complex regulations, widespread fakes and market manipulation remain tangible risks.

China's annual economic growth is expected to slow for a seventh straight quarter to the weakest level since the global financial crisis, with luxury demand having waned substantially.

"To cool down a bit is a good thing," said Zheng Hong, a mainland Chinese buyer at the ceramics sale. "Last year, it was too high ... China's economy is weakening, property and other sectors are not booming as before, so this is a natural result."

In Sotheby's contemporary Asian art sales, demand was again patchy, even for blue chip artists with 27 percent of lots going unsold, though master works like a 1992 painting by Liu Wei, "Revolutionary Family Series - Invitation to Dinner," made an artist record of $2.24 million, while Indonesian modern artist Lee Man Fong's "Fortune and Longevity" also fetched a record $4.4 million after competitive bidding.

Sotheby's fine Chinese paintings sale was strong with 97 percent of works sold by lot, including auction favourite, Chinese ink master Zhang Daqian's "Swiss Peaks; calligraphy in Xingshu", and Fu Baoshi's "Lady at the Pavilion" that each sold for HK$23 million.

New Hong Kong auction debutante China Guardian, now ranked among the world's top four auction firms is shaking up the landscape in older Chinese paintings, having sold some of the most expensive ink brush paintings in the world in recent years including Qi Baishi's "Eagle Standing on Pine, 1946" that fetched 425 million yuan ($57.2 million) in a Beijing sale.

At Guardian's debut Hong Kong auction on Sunday, a landscape series by Chinese ink painting master Qi Baishi, "Album of Mountains and Rivers, 1922" sold for HK$46 million, helping the Chinese house notch up an eye-catching HK$455 million sales total, nearly a quarter that of Sotheby's overall autumn tally.

Sotheby's, however, recently forged a breakthrough partnership with a Chinese art firm to enter the mainland Chinese market in Beijing for the first time, which could lead to fully fledged sales early next year and let them take on Guardian in their home base.

Chinese authorities have long refused to grant licenses to Sotheby's and Christie's for the lucrative mainland market, with Beijing topping even New York and London for art and collectibles revenues last year with sales of 6.4 billion euros ($8.30 billion) according to the Conseil des Ventes French government annual art market report.

(Reporting by James Pomfret, editing by Paul Casciato)

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NEW YORK | Fri Oct 12, 2012 5:32pm EDT

NEW YORK (Reuters) - Genworth Financial Inc (GNW.N) plans to sell two of its businesses, including its wealth management business, in an effort to raise capital, according to three sources familiar with the situation.

The Richmond, Virginia-based company wants to sell its Pleasant Hill , California-based wealth asset management business, which has over $20 billion in assets under management and sells its portfolios through about 6,000 third-party advisers around the country.

The sources also said Genworth is looking for a buyer for Altegris, its San Francisco-based alternative investments provider with $3.36 billion in client assets. The sources wished to remain anonymous because they were told about the deal in confidence. Genworth bought Altegris in 2010 for $35 million, plus additional performance-based payments.

Genworth is working with Goldman Sachs & Co (GS.N) as the banker for the deal, said one of the sources, who estimated that if the two businesses were sold together they could be valued at about $400 million.

A Genworth spokesman declined to comment. A Goldman spokeswoman also declined to comment.

A number of private equity investors and potential strategic buyers are looking at the books of the businesses, two of the sources said. It is unclear if both units will be sold to the same buyer, they said.

Genworth, once a part of industrial conglomerate General Electric, is shopping the businesses as it faces increased scrutiny from ratings agencies, largely due to losses in its mortgage business.

On Thursday, Standard & Poor's lowered Genworth's credit rating to BBB- from BBB, putting it just a notch away from junk territory.

Moody's Investors Service Inc has said it is conducting a review for a potential downgrade of the company's senior unsecured debt rating.

Most of Genworth's troubles stem from its U.S. mortgage-guaranty unit, which has accrued about $2 billion in operating losses since 2008, but recently, things have started to look better.

Genworth reported net income of $76 million, or 15 cents per share, in the second quarter, compared with a net loss of $136 million, or 28 cents a share, a year earlier. Net operating losses from the firm's mortgage insurance unit narrowed to $25 million, from $255 million in the comparable period last year.

S&P said it was lowering its rating "to reflect the low earnings level for the organization ... and the difficulty it will face expanding margins globally in the weak economy."

In a statement responding to the S&P downgrade, Genworth said it is "pursuing a number of strategic and financial actions designed to improve returns on capital, simplify our mix of businesses, strengthen capital generation, and increase financial strength and capital flexibility."

The company said it would provide further details about this effort in its third-quarter earnings call on October 31.

In April, the insurer sold its tax and accounting financial adviser unit to California-based Cetera Financial Group.

At the time, the company said the sale would allow it to focus more on "its core turnkey asset management businesses."

Genworth is a Fortune 500 company that sells insurance as well as wealth management services. It bought its turnkey asset management platform, which was called AssetMark Investment Services, in 2006 and merged it with Genworth Financial Asset Management to form Genworth Financial Wealth Management.

Given Genworth's financial situation, it might make sense to offload the wealth management unit because providing turnkey asset management - which involves putting together customized portfolios and handling the back-office functions for financial institutions and advisories - has become increasingly competitive, said Alois Pirker, a research director at Boston-based Aite Group, which studies wealth management trends.

More companies are asking providers to allow them to keep the management of the investments in-house, while having the providers oversee the performance reporting, he said.

This results in less revenue for the providers because they don't collect fees for managing the money, Pirker said.

"It's a tough business to succeed in unless you have the investment dollars," he said.

(Reporting by Jessica Toonkel; editing by John Wallace, Carol Bishopric, Gary Hill)

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NEW YORK | Thu Oct 11, 2012 9:30am EDT

NEW YORK (Reuters) - If your company tells you it's replacing your health insurance with a high deductible plan paired with a health savings account - or adding that option to your benefits menu - you might want to make your first stop the information technology department rather than human resources.

"The guys in finance and the guys in IT - those are the two departments that sign up for higher deductibles," says Helen Darling, president and chief executive of the National Business Group on Health, a non-profit coalition of 325 large employers.

That's because it all comes down to cold, hard math, and the spreadsheet jockeys have probably run the numbers on those plans. While many people shudder at the thought of anything that is "high deductible," these plans can work out in your favor.

"Once people see the math, many are won over right away," says Maureen Fay, a vice president at Aon Hewitt, a benefits consulting firm.

Workers may not have much of a choice, the National Business Group on Health says, since 19 percent of employers will be offering high deductible plans as the only option in 2013, as opposed to 17 percent in 2012 and just 7 percent in 2009. Some 54 percent of workplaces will offer the high deductible plans as a choice in 2013. (See Reuters graphic link.reuters.com/zyp23t).

Here's how to make the plans work for you:

1. Get over the initial sticker shock.

High deductible plans are similar to traditional plans in that after you meet the deductible, care is covered at around 80 or 90 percent if you stay in the preferred provider network. But initial out-of-pocket costs are higher; there's a minimum deductible of at least $2,400 for a family, versus an average of around $1,200 at large employers for other plans, according to Mercer, a human resources consulting firm.

While most insurance plans can be paired with pre-tax flexible spending accounts, high deductible plans are instead often matched up with either an employer-funded health reimbursement arrangement (HRA) or an employee-controlled, pre-tax health savings account (HSA), depending on which your employer chooses to offer.

HSAs are gaining ground the fastest, according to Aon Hewitt, mostly because they provide an attractive savings vehicle. The money in HSAs belongs to the account holder forever. An account holder can save it from year to year, and the funds in the accounts are never taxed if used for qualified healthcare expenses.

2. Work the freebies.

Well visits for the kids, annual physicals, yearly mammograms - preventive care is free now, and not counted toward the deductible. Paul Fronstin, director of the Health Research & Education Program at the Employee Benefit Research Institute, says the most important way to work your HSA is to know the details of your plan and what incentives your employer offers. Some will put cash into your HSA for completing things like health surveys, and some will just give a cash contribution with no strings attached.

Some companies also allow you to contribute to a Flexible Spending Account for certain limited, qualified expenses (such as vision or dental expenses) at the same time as an HSA or an HRA, increasing the tax benefits.

3. Know what care costs.

If you're used to a $20 co-pay, researching costs may sound ominous. But it's worth it to find out which mammogram location costs less, or which drugs are cheaper, says Aon Hewitt's Fay. Most health insurance providers have smartphone apps that allow you to check doctors and drug costs, and programs like Quicken can help you keep track of the money going in and out. Keeping receipts and good records could help you down the road, since you can reimburse yourself later from your HSA for past bills that you don't claim against the savings right away.

There is a potential downside here, though. The theory behind high deductible plans is that when people know the cost of care and the dollars are coming out of their own pockets, they spend more wisely. But it might also keep people away from needed care that they can't afford. If you are in one of these plans, make sure you have the cash available to cover services until you meet your deductible.

4. Know your own health.

Conventional wisdom says that young, healthy people like high deductible plans because they only pay for what they use, and they typically use very little. But Fronstin says the plans actually work very well if you have a chronic condition, especially if you know what you spend in a year.

Some families could reach a $3,000 deductible in just a couple of months - have a baby in January and you are set for the year.

And there are mandated out of pocket maximums -- $6,050 for an individual, $12,100 for a family -- for your protection.

5. Choose your HSA custodian wisely.

Just because your employer chooses one home for your account, doesn't mean you have to stay there. A variety of financial institutions can house your HSA, as it's functionally just like retirement savings account. Until you turn 65, you can only use the money for medical expenses or it's subject to income taxes and a 20 percent penalty. Once you hit 65, there are no withdrawal penalties, but you still need to pay income tax if you use the funds for nonmedical expenses.

Every custodian has a different schedule of fees for such things as monthly maintenance and overdrafts. Also, some custodians have more options for investments once you accumulate over $2,000 or so, while others have more flexible options for frequent withdrawals. You can compare account features at sites like HSAfinder (hsafinder.com/).

6. Savers fare better long term.

The maximum contribution for HSAs in 2013 will be $3,250 for individuals and $6,450 for families, with a $1,000 makeup contribution for those older than 55. You can keep making these pre-tax contributions as long as you have a qualifying high-deductible plan, and any money you leave in the account is yours to carry forward, all the way through retirement. So you could end up socking away quite a bit of money that could grow tax free.

(Follow us @ReutersMoney or here Editing by Linda Stern, Jilian Mincerand Steve Orlofsky)

(This is part of a five-story package on employee benefits and open enrollment season.)

View the original article here