STOCKS NEWS US-Credit Suisse turns more cautious on equities

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For U.S. stock market report double-click [.N] 0706 ET 03June2009-Credit Suisse turns more cautious on equities ------------------------------------------------------------------------------

Credit Suisse on Wednesday said it was turning more cautious on equities, taking its equity weightings down to benchmark from overweight. The firm wrote that it remained concerned about the economic backdrop, and that a recent rise in bond yields had undermined their valuation.

"We believe that US trend GDP is lower (2.25-2.5 percent) and the scope for policy error is large," it wrote. "The recent rise in bond yields is worrisome - on our analysis, each 1 percent on ten-year yields takes 0.5 percent off GDP growth (and requires a 10 percent fall in house prices to leave affordability unchanged). We believe we are in an upward sloping W-shaped recovery."

The firm kept its year-end target of 920 for the S&P 500 .SPX, and said that "downside and upside risks to equities are now quite symmetrical" and that it believed strongly that the lows had been seen.

Reuters Messaging: @reuters.net 0700 ET 03June2009-PepsiCo may walk away from bid for bottler ------------------------------------------------------------------------------

PepsiCo (PEP.N) late Tuesday hinted that it could walk away from its proposed takeover of Pepsi Bottling Group (PBG.N), even as the bottler attempted to make a case for a higher bid.

"PepsiCo has a track record of being a disciplined buyer and will maintain that disciplined approach in this transaction," PepsiCo said in a statement. "If in the future PepsiCo remains a stockholder in a public PBG, PepsiCo intends to maintain a disciplined stance with regard to the commercial arrangements between PBG and PepsiCo."

The comments came after Pepsi Bottling raised its outlook for the year and laid out reasons why PepsiCo's offer was too low.

For details, see [ID:nN02518140]

Shares of PepsiCo closed Tuesday at $54.92 while Pepsi Bottling closed at $33.99.

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net 0655 ET 03June2009-Economic indicators for June 3 ------------------------------------------------------------------------------

Economic indicators on tap for Wednesday include: weekly MBA purchase data and mortgage market data, May challenger layoff and ADP national employment data, durable goods data for April, April factory orders and May ISM non-manufacturing data.

For details, see [ECI/US]

Reuters Messaging: ryan.vlastelica.reuters.com@reuters.net 0650 ET 03June2009-Earnings diary for June 3 ------------------------------------------------------------------------------