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By Anirban Sen and Prakhar Srivastava (Reuters) -The U.S. Department of Justice has launched an inquiry into the collapse of bankrupt auto parts maker First Brands Group, a person familiar with the matter told Reuters on Thursday. The Justice Department is probing the company and its dealings with creditors, and has sent an inquiry to First Brands, the person said. The probe is at an early stage, the source said, adding that it is common for U.S. prosecutors to look into companies that publicly disclose losses that affect a large group of investors. No evidence of wrongdoing has been established so far, the source added. There is no guarantee that the inquiry will result in a full-blown investigation that will lead to charges being filed against the company. The Financial Times was first to report earlier on Thursday that the DOJ was probing First Brands. First Brands, which makes filters, brakes and lighting systems for the automotive industry, filed for bankruptcy protection last month after its lenders began investigating irregularities in the company's financial reporting. The company has $11.6 billion in total liabilities, according to court documents. The auto parts maker has separately appointed a special committee of independent board directors to investigate its off-balance sheet financing arrangements and whether its invoices were factored in multiple times. The DOJ did not immediately respond to a request for comment, while First Brands declined to comment. Financial troubles at First Brands and the recent bankruptcy of subprime lender Tricolor Holdings, have rattled debt investors and stoked fears of broader stress in corporate debt markets, according to bondholders and bankruptcy experts. Some of the financial firms exposed to First Brands include Jefferies, which disclosed $715 million in exposure through Leucadia Asset Management, and UBS, which is assessing exposure on more than $500 million tied to the company. (Reporting by Prakhar Srivastava in Bengaluru and Anirban Sen in New York; Editing by Shailesh Kuber)

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By Savyata Mishra (Reuters) -Levi Strauss raised its full-year profit forecast on Thursday, but the projection fell short of Wall Street expectations, sending shares of the denim-maker down about 6% in extended trading. The company now expects fiscal-year 2025 adjusted profit per share in the range of $1.27 to $1.32, up from its prior forecast of between $1.25 and $1.30 per share. The mid-point was below an estimate of $1.31, according to data compiled by LSEG. The forecast assumes U.S. tariffs will remain at 30% for China and 20% for other countries through the year-end. Tariffs impacted the company's gross margins by 80 basis points in the reported quarter, CFO Harmit Singh told Reuters, adding that the impact would be 130 basis points in the fourth quarter, which includes the crucial holiday season. The company, which sources the bulk of its products from South Asia – including Bangladesh and Pakistan – has undertaken modest price hikes and secured inventory ahead of the key holiday season to limit disruptions from volatile trade policies.  Levi has leaned into full-price sales through its direct-to-consumer channel, broadened its product offerings and kept a tight leash on stock-keeping units, or SKUs, an industry term for inventory.  Robust international demand helped cushion some tariff pain, with quarterly revenues in Asia and Europe growing 12% and 5%, respectively. Globally, DTC sales witnessed 9% growth, while online sales jumped 16%. San Francisco, California-based Levi Strauss reported a 7% rise in net revenue for the quarter ended August 31 to $1.54 billion, beating analysts' estimate of $1.50 billion, according to data compiled by LSEG. Adjusted profit came in at 34 cents per share, from 33 cents per share in the same period last year. Operating margin improved to 10.8% from 2.3% a year earlier, driven by higher DTC as well as full-price sales. (Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)

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By Diego Oré and Emily Green MEXICO CITY (Reuters) -Mexico's Congress will hold off approving proposed tariff hikes on nearly 1,500 products from China and other Asian countries while Mexico holds talks with those countries and considers changes to the proposal, President Claudia Sheinbaum said on Thursday.   Sheinbaum sent the proposal – which seeks to increase tariffs by up to 50% on cars, textiles, clothing, plastics, steel, and other products – in early September to the lower house of Congress, where her Morena Party holds a large majority. Many analysts saw the move as an attempt to placate U.S. President Donald Trump.  But since then, China – Mexico’s second-biggest trading partner after the U.S. – has criticized the proposal, saying it would undermine investor confidence. China warned Mexico it would take "necessary measures" to safeguard its "legitimate rights and interests." PROPOSAL UNDER REVIEW On Thursday, Sheinbaum said her government was analyzing potential changes to the tariff hikes.   "We are holding these meetings with different countries to see if we can adapt what we are presenting to Congress for approval this year," she said during her daily press conference. Her comments came a day after Ricardo Monreal, leader of Morena in the Chamber of Deputies, told reporters that Congress would "pause" the proposal for now and pick it up again at the end of November. “We are reviewing the proposal very seriously,” he said. Morena legislators, who spoke on condition of anonymity, told Reuters the tariffs would not be approved by Congress in their current form and that the plan would likely have to be softened. It was unclear what changes there might be. Any adjustments could create holes in the government’s 2026 budget, as Mexico’s Finance Ministry projected the proposed tariffs would generate $3.76 billion.  The proposed tariffs would affect imports from countries Mexico does not have trade agreements with, including China, South Korea, India, Indonesia, Russia, Thailand, and Turkey. VEHICLE, AUTO PARTS TARIFFS COULD JUMP As currently drafted, tariffs on light vehicles would rise to 50% from 15%-20%, and on auto parts to 10%-50% from the current zero-35%.  Some analysts estimate the increased tariff on cars would primarily affect electric vehicles manufactured in China and sold in Mexico, hitting BYD and Tesla the hardest. The Sheinbaum administration argues the tariff increases are a means of protecting Mexico’s domestic production, although they also come amid pressure from the U.S. for Mexico to curtail business with China. One Morena politician who spoke on condition of anonymity said approval of the tariffs has been delayed amid concern that they could boost consumer prices and harm Mexican businesses.  The person said that long-term, they believe Mexico is moving toward a plan for the U.S., Canada, and Mexico to impose matching tariffs on China. (Reporting by Diego Oré and Emily Green; Additional reporting by Ana Isabel MartínezEditing by Rod Nickel)

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LONDON (Reuters) -Citi said on Thursday it was going long into Argentina's BONTE 30 bonds following intervention by the U.S. Treasury to shore up the country's currency, adding it saw room for local assets to continue gains ahead of a key legislative vote.  "Markets rally not only on the possible future announcement, but on the news that U.S. Treasury intervention has begun," Citi's Ivan Riveros said in a note to clients, noting that the upcoming midterm elections on October 26 still pose a risk. Citi was betting on Argentina's BONTE 30s, the note said, referring to a 30-month note denominated in pesos but subscribed in U.S. dollars.  "While local markets will remain vulnerable to the mid-term election risk, the U.S. Treasury intervention means there will be room for local assets to continue decompressing risk prior to October’s elections," Citi said.  (Reporting by Karin Strohecker; editing by Rodrigo Campos)

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(Reuters) -Levi Strauss raised its full-year sales and profit forecasts on Thursday, banking on strong demand for wide-leg denim bottoms in Europe and the Americas despite higher tariffs. The denim-maker now expects fiscal-year 2025 organic net revenue from continuing operations, excluding Dockers, to rise about 6%, compared to its prior target of a 4.5% to 5.5% increase. Retailers including Levi, American Eagle Outfitters and Abercrombie & Fitch have benefited from a resurgence in Y2K-inspired styles and casual wear, with Gen Z and younger millennials driving sales of baggy, loose-fit apparel. Levi has leaned into full-price sales through its direct-to-consumer channel, broadened its product offerings and kept a tight leash on stock-keeping units, or SKUs, an industry term for inventory.  Robust international demand helped cushion some tariff pain, with quarterly revenues in Asia and Europe growing 12% and 5%, respectively. Globally, DTC sales witnessed 9% growth, while online sales jumped 16%. The company, which sources the bulk of its products from South Asia – including Bangladesh and Pakistan – has undertaken modest price hikes and secured inventory ahead of the key holiday season to limit disruptions from volatile trade policies.  It projects adjusted profit per share in the range of $1.27 to $1.32, up from its prior forecast of between $1.25 and $1.30 per share. The forecast assumes U.S. tariffs will remain at 30% for China and 20% for other countries through the year-end. Shares of the company fell 7% in extended trading. The stock has gained nearly 42% so far this year. San Francisco, California-based Levi Strauss reported a 7% rise in net revenue for the quarter ended August 31 to $1.54 billion, beating analysts' estimate of $1.50 billion, according to data compiled by LSEG. Adjusted profit came in at 34 cents per share, from 33 cents in the same period last year. Operating margin improved to 10.8% from 2.3% a year earlier, driven by higher DTC as well as full-price sales. (Reporting by Savyata Mishra in Bengaluru; Editing by Pooja Desai)

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By Mehnaz Yasmin (Reuters) -More global investors are rotating into non-U.S. "value" stocks, fund managers say, as stretched U.S. valuations, rising fiscal strains, and weakening cash flow forecasts make rallying American equities look comparatively less attractive. Investors have withdrawn $152 billion from U.S. growth funds in the first nine months of 2025, even as the S&P 500 advanced into record high territory, already equaling total outflows for all of 2024, LSEG data for September showed.  Asset managers overseeing more than $6 trillion told the Reuters Global Markets Forum that investors expect non-U.S. "value" and small-cap equities to benefit from overseas dovish monetary policy, increased fiscal stimulus, and cheaper valuations.  Outside the U.S., stronger earnings, margins and returns highlight underappreciated fundamentals in small-cap and value stocks alongside already attractive valuations. "From a valuation perspective, we like non-U.S. value stocks – so yes, a factor tilt," Sebastien Page, head of global multi-asset and chief investment advisor at T. Rowe Price told the Reuters Global Markets Forum. The global investment management firm oversees $1.73 trillion in assets, with Sebastien’s multi-asset division accounting for $602 billion. Value stocks appeal to investors seeking stability and income because they trade at low valuations, often pay dividends, and cluster in mature sectors like financials, industrials, and energy. By contrast, growth stocks, including the “Magnificent Seven” and other AI-driven giants that have propelled the S&P 500 to record highs, trade at rich valuations, rarely pay dividends, and appeal to investors who are willing to weather short-term volatility in the search for long-term capital gains. Spreads between value and growth in the MSCI Europe, Australasia and Far East (EAFE) indices point to cumulative outperformance by value, with index levels at record highs, according to MSCI data.  "EAFE Value, especially in dollar terms, has been one of the best-performing asset classes year-to-date. At the same time, by historical standards, the asset class remains cheap," Page said. Growth and value factors diverge by region: growth has historically led in the U.S., while value has dominated overseas.  "At the end of last year, we diversified away from our long U.S. equity position" into Europe, Japan and emerging markets (EM), said John O'Toole, global head of multi-asset solutions at Amundi. "That's not to say we went underweight (on U.S. equities)," O'Toole said, but on long-term valuations, "there's a compelling case to diversify and expose yourself to other performance drivers." Even so, U.S. growth funds continued to dominate performance despite heavy redemptions, as the earnings strength of tech and communication giants, buoyed by artificial intelligence and buybacks, keeps growth in the lead.  Spreads between value and growth in the MSCI USA indices point to continued growth outperformance, MSCI data showed. "In the near term, companies have limited options to hedge against U.S. concentration risk, as U.S. AI capex still dwarfs the rest of the world," said Gary Tan, portfolio manager at Allspring Global Investments.  (Join GMF on LSEG Messenger: ) (Reporting by Mehnaz Yasmin in Bengaluru; Additional reporting by Ankika Biswas and Ankita Yadav; Editing by Divya Chowdhury, Alden Bentley and David Gregorio)

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By Stephen Culp NEW YORK (Reuters) -U.S. stocks ended in negative territory on Thursday as investors, left with no economic data or any sentiment-swaying catalysts, took the opportunity to consolidate ahead of third-quarter earnings season. The S&P 500 and the Nasdaq eased back from Wednesday's record closing highs, but the blue-chip Dow closed with the deepest percentage decline.  "The earnings cycle is upon us and there's a wait-and-see in terms of whether we’ll see the same level of consistency of earnings growth in the coming quarter that we've seen in the last two quarters," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "Couple that with the uncertainty surrounding the lack of data coming out of Washington and how the Fed navigates that, it's natural to see a bit of a pullback." The stock market's pause comes amid a steep rally that has been largely driven by the rise of artificial intelligence technology. The runup has prompted concerns that a bubble is forming, which could be a harbinger of an impending correction. Sunday will mark the current bull market's third anniversary; the benchmark S&P 500 touched the nadir of its current market cycle on October 12, 2022 on the heels of monetary tightening from the Fed. Over that time period, while tech and tech-adjacent megastocks have driven the index nearly 90% higher, history suggests the current bull market has more gas in its tank.  The U.S. government shutdown entered its ninth day, with few signs of progress. Consequently, market participants continue to be deprived of essential economic data. And with the start of third-quarter earnings season just days away, the scarcity of market-moving catalysts is focusing investors' attention on remarks from monetary policymakers for clues regarding the central bank's rate cut intentions through the end of the year. New York Federal Reserve President John Williams favors more interest rate reductions before year-end due to risks facing the weakening labor market, he said in an interview with the New York Times published on Thursday. According to preliminary data, the S&P 500 lost 18.50 points, or 0.27%, to end at 6,735.22 points, while the Nasdaq Composite lost 18.75 points, or 0.08%, to 23,023.95. The Dow Jones Industrial Average fell 238.58 points, or 0.51%, to 46,363.20. On Tuesday of next week, JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo are slated to report quarterly results, marking the unofficial launch of third-quarter earnings season. Analysts currently predict year-on-year S&P 500 earnings growth of 8.8% in the July-September period, weaker than the second quarter's 13.8% and the year-ago quarter's 9.1% annual growth, according to the most recent data from LSEG. Delta Air Lines advanced after it provided an upbeat forecast for the current quarter, after posting stronger-than-expected third-quarter earnings.  Other U.S. carriers also gained, boosting the S&P 1500 Airlines index.  U.S. retailer Costco Wholesale rose after reporting September sales data. Shares of Albemarle gained ground after brokerage TD Cowen raised its price target on the lithium producer and as China tightened export controls on rare earths. (Reporting by Stephen Culp in New York; Additional reporting by Lewis Krauskopf in New York and Niket Nishant and Sukriti Gupta in Bengaluru; Editing by Matthew Lewis)

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By Caroline Valetkevitch NEW YORK (Reuters) -Major stock indexes eased on Thursday, while the dollar climbed to its highest level against the Japanese yen since mid-February as investors weighed the outlook for Japan's fiscal policies.  Stocks have been mostly rising in recent sessions, with the S&P 500 hitting a record closing high on Wednesday, despite an ongoing U.S. government shutdown and political risk in Japan and France that has made investors nervous.     The euro was also down again against the dollar on Thursday.  Oil prices fell, with investors weighing a ceasefire deal in Gaza that could ease Middle East tensions against stalled peace talks in Ukraine. Safe-haven demand and a weaker dollar drove gold above $4,000 an ounce for the first time this week. Spot gold was last down 1.6% at $3,973.10. The newly elected leader of Japan's ruling party, Sanae Takaichi, said she did not want to trigger excessive declines in the Japanese currency. The dollar briefly eased against the yen after the comments. The greenback was last up 0.24% at 153.04 yen after earlier reaching 153.21, the highest since February 13. In the U.S., the federal government shutdown, which began last week, has left investors without key economic reports.  Despite Thursday's weakness, the stock market remains buoyant, said Adam Sarhan, chief executive of 50 Park Investments in New York, adding that stocks could weaken if the government shutdown lasts for a substantial period of time. "We're in a very strong bull market that refuses to fall in a meaningful fashion," he said. "I'm expecting a pullback at some point but for now the environment is very strong." The Dow Jones Industrial Average fell 297.20 points, or 0.63%, to 46,306.65, the S&P 500 fell 27.40 points, or 0.40%, to 6,726.41 and the Nasdaq Composite fell 62.14 points, or 0.27%, to 22,981.65. JPMorgan Chase CEO Jamie Dimon said there was a heightened risk of a significant correction in the U.S. stock market within the next six months to two years, citing factors including geopolitical tensions, government spending and remilitarization around the world. MSCI's gauge of stocks across the globe fell 4.38 points, or 0.44%, to 991.73.The pan-European STOXX 600 index ended 0.43% lower, dragged down by steep losses in HSBC and Ferrari. French bonds held on to gains from the day before on optimism the country can avoid a snap election. French President Emmanuel Macron’s office said on Wednesday he would appoint a new prime minister within 48 hours.   France's 10-year bond yield was 0.2% higher on the day at 3.529%. The euro was last down 0.64% at $1.1552. U.S. crude futures fell $1.04 to settle at $61.51 a barrel and Brent declined $1.03 to settle at $65.22. The yield on benchmark U.S. 10-year notes rose 1.5 basis points to 4.146%, from 4.131% late on Wednesday. (Additional reporting by Elizabeth Howcroft in Paris, editing by Ed Osmond, Kirsten Donovan, Nia Williams and Aurora Ellis)

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(Reuters) -An outage affecting thousands of users of Microsoft's suite of productivity software on Thursday has eased, according to outage tracking website Downdetector.com. The number of users reporting issues with Microsoft 365 had fallen to over 1,500 as of 3.07 p.m. ET, compared with 17,000 earlier, according to Downdetector, which tracks outages by collating status reports from a number of sources. Downdetector's numbers are based on user-submitted reports. The actual number of affected users may vary. Microsoft 365 said it had rerouted the impacted traffic to healthy infrastructure and is seeing improvements to service health, on its status page on X. Initial reports showed issues accessing Microsoft Teams and Exchange Online. (Reporting by Juby Babu in Mexico City; Editing by Sahal Muhammed)

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(Reuters) -OpenAI said on Thursday the arguments it presented to EU authorities last month mirrored its public statements about competition in the AI space, particularly in the context of antitrust investigations into Alphabet's Google. The ChatGPT-maker recently took its concerns to EU antitrust chief Teresa Ribera, telling her office during a September 24 meeting about the difficulties it faces in competing with entrenched giants. It also urged the regulators to prevent large platforms from locking in users, Bloomberg News reported earlier on Thursday, citing meeting notes. OpenAI said the European Commission was already examining how large, vertically integrated platforms were leveraging existing market positions into AI, including by reviewing specific intercompany agreements. The European Commission and Google did not immediately respond to Reuters requests for comment. The company, which now has more than 800 million weekly ChatGPT users, became the world's most valuable startup – with a $500 billion valuation – after completing a secondary share sale last week. (Reporting by Jaspreet Singh in Bengaluru; Editing by Pooja Desai)

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