WASHINGTON (Reuters) – Senator Pat Toomey is urging businesses to push back against efforts by U.S. securities regulators to impose new rules on the money market fund industry, which he says could "wipe out" the products.

Speaking to an audience at the U.S. Chamber of Commerce on Wednesday, he expressed frustration that the U.S. Securities and Exchange Commission is trying to move ahead on sweeping money market fund reforms.

"I think that money market funds are under attack. I think there is a concerted effort to impose very, very, very troublesome regulations that in some cases I think do threaten the viability of the product itself," said Toomey, a Pennsylvania Republican and member of the Senate Banking Committee.

"I think we should push back very aggressively."

Toomey said he would consider introducing legislation pushing back on the reforms, if necessary.

The $2.6 trillion money market fund industry came under scrutiny during the financial crisis after a run on the Reserve Primary Fund caused it to "break the buck" when its net asset value fell below the $1-per-share mark.

The SEC moved to shore up the industry with new regulations in 2010, including tightening credit quality standards, shortening the maturities of fund investments and imposing a new liquidity requirement.

But SEC Chairman Mary Schapiro and banking regulators have said those are not enough. Staff at the SEC last month circulated two early draft plans for either a capital buffer coupled with a holdback on redemptions or a floating fund valuation.

The two competing plans have met with some resistance internally from three SEC commissioners, and they have also prompted a major backlash from money market fund industry players and U.S. businesses that rely on the funds for their short-term funding needs.

Critics say the recent regulations adopted in 2010 have worked well so far, and that money market funds have since weathered some major storms such as the European debt crisis.

They also fear redemption holdbacks, capital buffers or other changes could drive investors out of money market funds into bank accounts.

There have also been warnings that the reforms intended to reduce risk could unintentionally do the opposite by stoking another round of consolidation in the industry.

On Tuesday, the U.S. Chamber and a group of corporate treasurers took to Capitol Hill to meet with lawmakers to discuss their concerns about the money market fund proposals. Later on Wednesday, they are expected to head to meetings with U.S. regulators.

Toomey said if the SEC proceeds with some of the reforms in the works, he will call for congressional hearings to "give as much public scrutiny to this as possible."

(Reporting By Sarah N. Lynch, editing by Dave Zimmerman)

(Reuters) – The chairman of the Securities and Exchange Commission is eyeing two potential plans to bolster the stability of money market funds, but their fate remains uncertain due to internal disagreement at the SEC over the need for more regulations.

Last month, agency staff circulated early drafts for either a capital buffer or a floating fund valuation, both aimed at preventing runs on money market funds and investor losses in the $2.6 trillion industry, people familiar with the matter said.

Regulators began to focus on new rules for the money market fund industry after the Reserve Primary Fund "broke the buck" in 2008, at the height of the financial crisis, when its net asset value below the $1 mark.

In 2010, the SEC adopted a series of new rules in response to that event, including tightening credit quality standards, shortening the maturities of fund investments and imposing a new liquidity requirement.

The industry and several SEC commissioners have questioned whether any further changes are required.

One of the new plans, favored by some SEC staff and banking regulators, would consist of both a capital buffer requirement and a 30-day hold-back on redemption requests by investors.

Under that proposal, funds would need to maintain a 1 percent capital cushion and they would hold back 3 percent of investor funds for 30 days after a redemption request.

The alternative plan calls for a floating net asset value to help curb investor complacency over the stable $1-per-share value that funds currently quote.

The concepts were first discussed by SEC Chairman Mary Schapiro in a major speech to the brokerage industry last November.

The Wall Street Journal reported on Tuesday that the SEC would unveil the plans in the coming weeks.

SEC staff are hoping to put both plans out for public comment, but would anticipate only adopting one of the two proposals, people with knowledge of the matter told Reuters. The goal is to unveil them sometime in the spring.

Schapiro, the Federal Reserve and other members of the Financial Stability Oversight Council, have argued that more changes are needed to prevent a run on money market funds.

"The Chairman has long called for reform of money market funds to avoid the destabilizing events that occurred following the breaking of the buck of the Reserve Primary Fund in 2008," SEC spokesman John Nester said on Tuesday.

"As a first step of reform, the SEC adopted meaningful measures to increase the resiliency of money market funds by shortening their maturities and enhancing their liquidity. As a second step, the Chairman is advocating structural reforms to money market funds to address their susceptibility to runs and provide a buffer against losses," Nester said.

To put these latest proposed reforms out for comment, the SEC needs approval from at least three of the five commissioners.

But three commissioners have expressed some doubts about the need for more reforms, with at least some of them unlikely to even agree to propose a rule, let alone vote to implement one, one person familiar with their thinking said.

Part of their concern stems from the fact that the SEC already acted to put new rules on the books in 2010 and that the latest proposals might harm the industry.

"As far as I know, these issues were fully vetted in 2010," said Dan Gallagher, the SEC's newest commissioner, in an interview with Reuters last week. "There has to be data that shows the need to act in this space or data that shows that you don't. But I just haven't seen that yet."

Money market fund executives have said the proposals could drive investors out of money funds and into bank accounts and reduce a key source of credit for U.S. businesses.

Fidelity Investments has warned regulators that more than half of its money-fund clients would move some or all of their assets out of the investments if the net asset value of the funds were allowed to fluctuate.

The U.S. Chamber of Commerce is due to host a discussion on money market reforms on Wednesday.

(Reporting by Sarah N. Lynch; Editing by Tim Dobbyn)

CAIRO – Egypt’s benchmark stock index fell over 2 percent Thursday, paring an earlier plunge stemming from deadly soccer riots the night before that left 74 dead and rekindled fears of fresh instability akin to the unrest that has battered the country and its economy in the year since the ouster of Hosni Mubarak.

The benchmark EGX30 index shot down about 4.6 percent within minutes of the start of trade, but rebounded as bargain hunters stepped in. The index closed down 2.2 percent, at 4,584 points.

The declines halted a rally in the market over the past week that had been fueled by newfound optimism after the peaceful passing of the one year anniversary of the Jan. 25 uprising that pushed Mubarak from power. Investors had also found cause to cheer in the convening of the country’s first post-Mubarak parliament — a legislature that was seated after Egypt’s freest elections in decades.

But the riots by football fans late Wednesday in the Mediterranean city of Port Said reignited simmering criticism of the country’s military rulers, with witnesses saying the police stood idly by while the violence broke out after the match. Parliament convened an emergency session — a move also mirrored by the Cabinet.

“There are a lot of fears, a lot of concerns, a lot of potential clashes,” said Mustafa Abdel-Aziz, senior broker with Mideast investment bank Beltone Financial’s brokerage division. “But we’re seeing the market react much better than it should” given the night’s violence.

Abdel-Aziz said that the early sell-off triggered buying interest, with investors stepping in to snap up deals.

In a market that ended 2011 over 45 percent below its level at the end of 2010, the recent gains have offered a measure of optimism as the country pushes ahead with a rocky transition to democracy that has been defined by continued protests and a growing mistrust of a military that had been hailed at the start of the uprising as heroes.

The violence in Port Said, however, reflected how fragile the gains could be at a time when Egypt’s economy is reeling from the overall effect of the uprising. The protests and associated violence have hammered the country’s chief foreign currency sources — foreign investment and tourism.

Meanwhile, Egypt’s net international reserves were down 50 percent year-on-year by the end of December, leaving wide open questions about how the country will raise new cash to bridge a widening deficit and worries over the balance of payments. It is now discussing with the International Monetary Fund a $3.2 billion loan.

The Finance Ministry on Wednesday said it would secure $1.1 billion in aid from the European Union and the World Bank. While Egyptian media have reported the loans appear to be a done deal, an EU financial official in Cairo told The Associated Press that the EU portion of the aid — known as Macro-financial Assistance — was predicated on Egypt securing the IMF loan.

An EU team was scheduled to come to Cairo on Feb. 22 for discussions, the official said, speaking on condition of anonymity because he was not authorized to discuss the issue.

The World Bank said Thursday that Egypt had asked for $1 billion in aid and that discussions would begin with the government on the request.

Separately, the Egyptian Central Bank held its benchmark interest rate unchanged, in a move London-based Capital Economics said appeared to reflect the government’s confidence in securing the IMF loan.

But Capital Economics said in a research note that while there have been indications that investors are more optimistic, the country continues to face risks from devaluation pressure on the pound and continued political instability.

For investors, the macroeconomic concerns appear to have been factored into their investment strategy, said brokers.

But what’s “not quantifiable is the extended tension between the police, the protesters and the army,” said Abdel-Aziz. “Definitely, if there’s an extended tension in this relationship, you could see another wave of selling.”

NEW YORK (Reuters) – Wall Street edged lower

on Thursday as housing and financial stocks lost ground after weaker-than-expected housing data gave investors reason to pause after a recent rally.

Housing-related stocks declined after data showed sales of new single-family homes fell for the first time in four months in December and were below Wall Street expectations. The data followed Wednesday's soft pending home sales report and dented optimism that the housing market may have reached a bottom.

"Clearly we have had some decent housing data. (But) now we've had, a little bit today and yesterday, a potential slowdown," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"It does seem like a little bit of profit-taking on the weak housing data."

Toll Brothers Inc (TOL.N) lost 2.7 percent to $22.61. The PHLX housing sector index (.HGX) dipped 0.8 percent. Banks, which stand to benefit from a recovery in housing, also fell. The KBW Bank index (.BKX) dropped 1.5 percent. SunTrust Banks Inc (STI.N) shed 4.5 percent to $20.65 after Deutsche Bank lowered its rating on the stock.

Stocks rose at the start of the session after data showed orders for durable manufactured goods rose more than expected in December, while unemployment benefit claims last week rose only moderately.

The Federal Reserve's vow on Wednesday to keep interest rates near zero at least until the end of 2014 also underpinned stocks, leading investors to bet more money would be driven into risky assets. The benchmark S&P index was up more than 5 percent for the year.

Caterpillar Inc (CAT.N) kept the Dow in positive territory as its shares gained 3.5 percent to $112.89. The manufacturer posted a jump in quarterly earnings that far exceeded Wall Street expectations on increased global demand for construction machinery and mining equipment.

The Dow Jones industrial average (.DJI) gained 40.11 points, or 0.31 percent, to 12,797.07. The Standard & Poor's 500 Index (.SPX) slipped 0.93 point, or 0.07 percent, to 1,325.12. The Nasdaq Composite Index (.IXIC) shed 1.50 points, or 0.05 percent, to 2,816.81.

3M Co (MMM.N), a conglomerate with operations throughout the economy, reported higher-than-expected quarterly earnings as demand from industrial and transport markets offset weak sales to makers of consumer electronics. The shares rose 1.6 percent to $87.90.

This is one of the busiest weeks of earnings season, with 117 S&P companies expected to report. According to Thomson Reuters data, 59 percent of the 152 companies in the S&P 500 that have reported earnings beat analysts' forecasts, down from the 70 percent beat rate in recent quarters at this stage.

AT&T Inc (T.N) posted a $6.7 billion quarterly loss on a break-up fee for its failed T-Mobile USA merger and a pension-related charge on top of costly subsidies for smartphones. The shares fell 2 percent to $29.61.

Amgen Inc's (AMGN.O) shares fell 1.3 percent to $68.32 and weighed on the Nasdaq after the world's largest biotechnology company said it would pay more than $1 billion to buy Micromet Inc (MITI.O), a deal that would give it access to the company's novel cancer treatment technology.

Micromet's shares jumped 31.9 percent to $10.92 and were the most heavily traded on Nasdaq.

(Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)

SAN MATEO, Calif. – Guidewire Software quickly found a following in its stock market debut Wednesday.

The insurance software maker’s stock jumped to $18 within their first few hours of trading, a 38 percent gain from the initial public offering price of $13.

Guide Software Inc. sold 8.85 million shares in the IPO. The offering raised $115 million, before expenses.

The 11-year-old company is based in San Mateo, Calif. and employs about 200 people. It specializes in software that helps insurers analyze risks and manage claims.

After a history of early losses, Guide Software turned a profit in each of the last two fiscal years. It earned $36 million on revenue of $172 million in the year ending last July.

The stock trades under the ticker symbol GWRE.

NEW YORK (Reuters) – Dow and S&P 500 index futures edged lower on Wednesday as the market continues to show signs of fatigue this week after a strong run from late last year, but the Nasdaq rose on forecast-beating results from Apple Inc (AAPL.O).

Apple's results on Tuesday were a standout in what has otherwise been a fairly lackluster earnings season. So far 58 percent of companies have beat forecasts while at this stage in the third quarter earnings season, 70 percent had beat forecasts.

Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire, said a still uncertain outlook for global growth and a renewed standoff in negotiations to solve Greece's debt crisis was making the market pause after rallying over 20 percent from its October lows.

"We have got an awful long way to go in dealing with the debt and budget problems (in Europe) and the structural problems … will take years to work out," he said.

The euro fell from session highs against the dollar and a one-month high versus the yen as worries the European Central Bank would need to take losses on its Greek bond holdings outweighed a strong German business sentiment survey.

S&P 500 futures fell 3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were off 37 points, and Nasdaq futures rose 18 points.

Apple was up 8.5 percent to $456.10 in pre-market trading after its quarterly results blew past Wall Street's expectations as U.S. consumers snapped up near-unprecedented numbers of iPhones and iPads, sending its shares up into record territory

Countering Apple there was more weakness in industrial names. Shares of Corning Inc (GLW.N) fell 8 percent to $13.45 as manufacturers cut back on the production of big-screen televisions that use the company's glass.

"Up until now there have been pockets of weakness in a handful of companies that have sparked concern among investors," said Andre Bakhos, director of market analytics at Lek Securities in New York.

The U.S. Federal Reserve, which is holding a two-day policy meeting that ends on Wednesday, looks set to keep monetary policy on hold even as it releases forecasts expected to show interest rates will be near zero for at least two more years.

Meanwhile late on Tuesday, U.S. President Barack Obama used his last State of the Union speech before the November election to paint himself as the champion of the middle class, by demanding higher taxes for millionaires and tight reins on Wall Street.

Roche Holding AG (ROG.VX) is offering $5.7 billion in cash to buy U.S. gene sequencing company Illumina Inc (ILMN.O) in a hostile takeover bid that marks a major play by the Swiss drugmaker into the gene technology field. Illumina rose 37.5 percent to $51.82 in pre-market trade.

Planemaker Boeing Co (BA.N) on Wednesday said its quarterly profit rose on stronger commercial airplane deliveries. The shares fell 1.7 percent to $74.10 in premarket trading after running up more than 20 percent since late November.

Diversified U.S. manufacturer Textron Inc (TXT.N) reported a quarterly loss after taking a hefty charge to write down the value of loans on golf courses — a hangover from the financial crisis. Its shares were up 10 percent to $23.70 before the open [ID:nL2E8COAVM]

European shares (.FTEU3) fell 0.7 percent on Wednesday, weighed by the tech sector after a sharp post-results decline for mobile telecoms network gear maker Ericsson (ERICb.ST).

(Reporting By Edward Krudy; Editing by Chizu Nomiyama)

TOKYO – Olympus Corp. will not be kicked off the Tokyo Stock Exchange, but the camera and medical device maker must pay a fine for covering up massive losses with false accounting, exchange officials said Friday.

Olympus will be monitored by the exchange as a security on “Alert” because significant improvements must be made in its internal control systems, it said in an emailed statement.

Olympus faced removal from the stock exchange following revelations of a scheme by the Tokyo-based company to hide 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s.

The scandal came to light late last year after then-President Michael Woodford raised questions about huge payments for financial advice and expensive acquisitions of companies unrelated to the company’s mainstay businesses. Olympus first denied, then affirmed the allegations.

The TSE said that even though the deception was perpetuated over a long period, it “cannot be deemed to have caused significant misinterpretation of profit levels or performance trends” given the size of the company. “The improper accounting practices had generally no effect on sales or operating profit.”

Olympus was also slapped with a 10 million yen ($130,000) penalty because its actions damaged investor confidence in the stock market, the statement said, castigating the company for “using devious methods.”

JERUSALEM – Hackers disrupted the websites of Israel’s stock exchange and national air carrier El Al on Monday in a deepening cyber war launched earlier this month by a group claiming to be Saudis.

Neither website contains sensitive information and trading and flights were not affected. But the ongoing salvos by hackers who use anti-Israel language in their posts has revealed how vulnerable Israel is to cyber warfare, despite its sophisticated computer security units in the military and advanced high-tech sector.

The attacks began earlier this month when hackers identifying themselves as group-xp, a known Saudi hacking group, claimed on an Israeli sports website to have gained access to 400,000 Israeli credit card accounts. The group called it a “gift to the world for the New Year” designed to “hurt the Zionist pocket.”

Israeli authorities said 15,000 accounts were hacked in that episode and credit card information about 6,000 other Israelis was disclosed online a few days later by the same network.

Last week, an Israeli hacker identifying himself as a soldier in an Israeli intelligence unit retaliated by posting information online about hundreds of Saudis, Egyptians, Syrians and others.

El Al Israel Airlines took down its website after the alleged Saudi network linked to previous attacks warned that both sites would be targeted by allied pro-Palestinian hackers, a source close to the company said. The source asked not to be identified because they were not authorized to speak to the media.

The company said in a statement that it was taking security measures to protect the website and that disruptions on the site were to be expected.

Orna Goren, a spokeswoman for the Tel Aviv Stock Exchange, said the site was overwhelmed by electronic requests that slowed it down dramatically but it was still operating. Trading was not affected, she said.

Cyber experts say Israel is a common target for online attackers who oppose the Jewish state and its policies toward the Palestinians.

There have been no confirmed reports of sensitive Israeli government sites being hacked. Several weeks ago, websites of Israeli spy services and other official sites briefly went down, but the government denied hackers were to blame and characterized the event as a technical malfunction.

Israel is a world leader in cyber security, and the Shin Bet internal security agency provides advisory services to sensitive business sectors such as banks and public utilities.

NEW YORK – Everybody knows that January predicts the stock market’s direction for the year and that the best time to sell stocks is at their spring peak. And among stock market experts, it’s a sure bet that the market will soar in the year before an election.

But what passes for stock market wisdom is suspect when given a closer look. The most common error comes when people spot two events and assume that one causes the other.

And it drives economists, math geeks and plenty of money managers nuts.

“If you look at enough data in enough different ways, you’re going to find something that isn’t really true,” says Edward Keon, who leads a mathematics team at Prudential Financial.

The same seasonal patterns seem to pop up year after year. Some are valuable and some meaningless, Keon says — like saying stocks tend to rise or fall depending on the month, the temperature in New York City or who wins the Super Bowl.

People “are simply being fooled by randomness,” says Burton Malkiel, professor of economics at Princeton University and author of the finance classic “A Random Walk Down Wall Street.”

Spend enough time digging through numbers and you’re bound to find some that always take the same path, he says. “But none can reliably predict the future.”

Here’s an examination of some of the oldest Wall Street aphorisms.

___

The claim: As goes January, so goes the year.

The idea is that January works as a barometer for the stock market’s full-year performance: A strong first month often leads to a year of gains, and a weak one to a year of losses.

It comes from Yale Hirsch, father of the Stock Trader’s Almanac, and looks reliable. Since 1929, the calendar year has followed January’s lead 60 out of 83 times, according to Howard Silverblatt, senior index analyst at Standard & Poor’s. That’s a .723 batting average.

The suggestion that January somehow directs the course of the next 11 months is what irks economists and investors, including Dan Greenhaus, chief market strategist at the brokerage BTIG.

Expecting to hear praise for January’s forecasting powers, Greenhaus attacked the idea on his blog Jan. 2, the day before U.S. markets opened for 2012. He took the S&P 500 index’s returns since 1950, including dividends, and found that the four months following January also appeared to work magic. When April is down, the next 12 months return a negative 0.2 percent. When April is up, the S&P 500 returns 12.8 percent. It’s a similar story with February, March and April. But why?

“It’s true that if January is up, the year is up most of the time,” he says. “But if you look at any month, you’ll find the market tends to be up over the next 12 months. And the reason is very simple: the market tends to be up.”

The S&P 500 has climbed in three out of every four years since 1950. Pick nearly any month in which stocks rose and most of the time you’ll find that the year was headed in the same direction.

But what if stocks fall in January? It doesn’t mean the next 11 months will follow. Sometimes, the stock market starts the year in a hole and digs its way out. In 1992, the S&P 500 dropped 2 percent in January, then ended the year with a modest gain of 4.5 percent.

“If you’re starting in the hole, then the 12-month period is starting in the hole,” Greenhaus says. “That should be intuitive. Instead it gets treated as some sort of prognostication tool. It’s just what happens.”

___

The claim: Sell in May and go away.

Like a flock of migrating birds, the stock market tends to travel south or north depending on the season. It rises through the winter months and falls late in the spring. Investors struggle through the summer until November rolls around and the market picks up again.

“Sell in May and go away” is a well-worn saying, but the numbers seem to back it up. Since 1990, the three months starting in July have been the worst quarter for the S&P 500. Last year, the S&P hit its peak on April 29, then hit bottom Oct. 3, right on cue.

Even many skeptics think “sell in May” probably has something going for it — but they can only guess why.

“It’s harder to debunk this one,” says Nick Colas, chief market strategist at ConvergEx Group.

The flow of money into retirement plans and mutual funds may have something to do with it. Colas says databases that track cash moving into stock funds show patterns similar to the stock market trend: A strong start that evaporates as the year progresses.

In the first four months of 2011, Americans added $13 billion to U.S. stock funds, according to the Investment Company Institute. But they pulled $6.5 billion in May and then began withdrawing much more. By the end of the year, retail investors had pulled $131.8 billion out of U.S. stock funds.

Some tie the summer sluggishness to vacation season. Trading desks are thinly staffed in the weeks before Labor Day. Fewer traders means a drop in trading volume, which makes it easier for markets to take bigger swings, often down.

Here’s where that explanation falls short. Traders return to their desks after Labor Day in September and trading picks up. But for all major stock indexes, September is historically the worst month of the year. Since 1950, it’s the only month in which the stock market has fallen more than it has risen.

___

The claim: The third year of a president’s term is great for stocks.

U.S. presidents serve four-year terms, and the third year is usually the best for the stock market. The pattern has been remarkably solid. The Dow Jones industrial average has made gains in every third year of a president’s term since 1939, when President Franklin Roosevelt was nearing the end of his second term in office.

Looking back even further, the Dow has gained 10 percent on average in the third year of a term from 1835 through 2007, according to the Stock Trader’s Almanac. Last year, President Barack Obama’s third in office, the Dow added 5.5 percent. The next best is the election year, when the Dow has gained an average 5.8 percent.

To Keon, managing director of Prudential’s Quantitative Management Associates, the problem with banking on a president’s third term for a market rally is that it only considers two things, the stock market and the president, and ignores everything else.

Keon believes there’s something behind the long-running pattern, just not as much as many believe.

Sitting presidents want to get re-elected and may try to push spending packages to boost the economy, Keon says. He ran a study that examined the effects of interest rates, inflation and other economic activity, and the president’s ability to move markets largely disappeared.

Last year, even though the Dow turned in a modest gain, the larger S&P 500 index was flat. The best performing investments weren’t stocks but those that doubled as hiding spots from turbulent markets: U.S. Treasurys and municipal bonds.

“The market cycle is beyond the control of the political system,” Keon says. “What matters more is investors’ appetite for taking on risk.”