Intercontinental rejected $10 bln offer from U.S. suitor - Sky

The world's largest hotelier, class="mandelbrot_refrag">Intercontinental Hotels Group (IHG), has rejected a 6 billion pound ($10.1 billion) takeover offer from a U.S. bidder, Sky News reported, citing unidentified sources.

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Sky said IHG's board met a few weeks ago to consider the offer, but turned it down on the grounds it was too low.

A spokeswoman for IHG, which runs 4,700 class="mandelbrot_refrag">hotels with brands such as Crowne Plaza, Holiday Inn and Intercontinental, declined to comment on the report.

Sky said the identity of the bidder was unclear, but cited analysts as saying it might have been Starwood class="mandelbrot_refrag">Hotels & Resorts or a specialist investment fund such as Starwood Capital.

 
 
 

Sky said IHG was braced for the bidder to return with a new offer, or for a rival suitor to come forward.

($1 = 0.5938 British Pounds) (Reporting by Li-mei Hoang; Editing by Mark Potter)

DEALTALK-Some elephant hunting tips for Warren Buffett

Far be it from us to offer tips to class="mandelbrot_refrag">Warren Buffett, the most celebrated stock picker of his age, but here goes:

The Oracle of Omaha has suggested he will hunt for his next "elephant" - his favorite word for big acquisitions -- among energy companies. That could dovetail with the bet he made in 2009 when he bought Burlington Northern Santa Fe railroad, which has turned into an indirect play on the U.S. oil production renaissance: BNSF moves about a third of oil-by-rail, a surging segment of freight rail.

 
 
 

So, we have some ideas. Reuters screened for U.S. and Canadian companies with relatively low debt and market capitalizations above $5 billion, among other criteria.

First, because Buffett's class="mandelbrot_refrag">Berkshire Hathaway has about $49 billion to spend, he's said he's looking at capital intensive companies, which offer plenty of chances to put that money to work.

He might like a hot niche like oilfield services or pipelines: good candidates could be Baker Hughes in drilling services or Williams Partners in oil and gas distribution, which would also expand the scope of his recently rebranded class="mandelbrot_refrag">Berkshire Hathaway Energy unit.

Alternatively, he could opt for a safer play by scooping up another regulated utility to add to previous purchases such as NV Energy in Nevada and MidAmerican Energy, which serves customers in eleven states and added about $1.47 billion to Berkshire's profits in 2013. While not spectacular earners, regulated utilities tend to be steady, reliable cash generators, a feature Buffett likes. One candidate could be Pinnacle West Capital, though it may be a little smaller than what he's looking for.

None of Baker Hughes, Williams Partners and Pinnacle West responded to requests for comment.

"Electric generation, electric transmission and long-haul pipelines - they're being about as blunt as they can be that they're going to grow" in that area, said Kevin Birzer, a senior managing director at Tortoise Capital Advisors, which specializes in energy investments.

PINNACLE

Check out Pinnacle West, owner of the Arizona Public Service Company, which provides electricity to about 1.1 million customers and trades at a discount to peers by several measures, including price-to-cash flow and price-to-earnings. Between the company's $6.1 billion market cap and its $3.6 billion in net debt, for an enterprise value of $9.7 billion, the company may be smaller than Buffett wants.

Still, analysts from TheStreet Ratings noted Pinnacle West's reasonable debt and good cash flow from operations in calling the company a buy earlier this month.

"We feel these strengths outweigh the fact that the company has had sub-par growth in net income," they wrote in a report dated May 18.

BAKER HUGHES

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If Buffett wants a company more closely tied to oil production, he could opt for Baker Hughes.

With a market cap of about $30 billion and net debt of about $3.9 billion, Baker Hughes' enterprise value of $33.9 billion comes in at the high end of what Buffett could spend while leaving himself the $20 billion cash cushion he's said he wants.

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Even so, that large a deal might require him to team up with an outside partner as when he bought H.J. Heinz, an option Buffett has said he may pursue again.

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Baker Hughes, which supplies oilfield services such as drill bits and fuel additives and has annual revenue above $22 billion, is trading at a discount to peers on several key metrics, including ratios measuring its enterprise value against both sales and class="mandelbrot_refrag">earnings before interest, taxes, depreciation and amortization, or EBITDA, according to Reuters data.

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Its first-quarter class="mandelbrot_refrag">earnings beat expectations on a 7 percent increase in North American revenue, with better North American margins even as well count dropped.

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The company also has significant presence overseas, including the Middle East, Latin America and Asia, offering a chance to broaden Berkshire's geographic reach.

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One risk may be that Baker Hughes will be too closely tied to oil prices and the capital expenditure cycle for major petroleum producers for Buffett's taste.

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WILLIAMS

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In that case, Williams Partners could appeal.

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Williams, which focuses in part on class="mandelbrot_refrag">natural gas and oil transportation, has a market cap of about $22.8 billion, but with $8.3 billion of debt, its enterprise value is not all that much lower than Baker Hughes, about $31.1 billion.

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Also like Baker Hughes, Williams, with total revenue of about $6.7 billion last year, scores well on a number of relative valuation markers, trading at discounts to peers on price-to-earnings and price-to-cash flow.

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The company keeps generating cash thanks to "the combination of a core interstate gas transmission system and a liquids-leveraged midstream class="mandelbrot_refrag">business," according to class="mandelbrot_refrag">Morningstar.

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That's an important attribute given its debt-to-equity ratio of 0.8, which is a bit above the industry norm.

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Negotiating a deal with Williams could be complicated, given its status as a limited partnership 70 percent owned by Williams Cos.

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But the company has another advantage Buffett likes - a wide moat, or competitive advantage, thanks to its ownership of the Transco gas mainline, which runs from Texas to New York.

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"We think of the Transco pipeline system as a classic wide-moat asset, one that presents a highly attractive set of organic growth opportunities," the class="mandelbrot_refrag">Morningstar analysts wrote.

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So, Warren, what do you think? If you wind up picking these companies and they work out for you, let me know! I'm at Luciana.Lopez@ThomsonReuters.com. (Reporting by Luciana Lopez; Editing by Dan Burns and John Pickering)

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AOL to invest in Israeli start-ups

class="mandelbrot_refrag">AOL Inc said on Sunday it is starting a programme in class="mandelbrot_refrag">Israel to assist start-ups, and that it will invest at least $100,000 in as many as 10 projects at a time.

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The Internet giant already has a development centre in class="mandelbrot_refrag">Israel, and its new project, called Nautilus, is meant to give "maximum freedom to entrepreneurs" and "grant them access to all the class="mandelbrot_refrag">tools and connections of a global company", said Hanan Laschover, chief executive of class="mandelbrot_refrag">AOL Israel.

AOL will escort each start-up, which will be chosen from a variety of fields that are connected to its global activities, for a period of a year, the company said.

The first investment will be in Take&Make, AOL said in a statement, a start-up that has developed a platform for "do-it-yourself" videos. (Reporting by Ari Rabinovitch)

 
 
 

Business aviation picks up, but jet surplus persists

class="mandelbrot_refrag">Business aircraft are taking to the skies again as many economies around the world improve, but a surplus of jets delivered just before the recession means the equivalent of 2,750 jets remain parked in hangars.

An excess of jets is depressing prices for planes, particularly older ones, and clouding the outlook for manufacturers of new jets, such as Bombardier Inc, Gulfstream and Cessna.

Some companies are cutting back on corporate jet travel and reducing executives' use of corporate jets for personal trips.

 
 
 

With so many jets not being flown, businesses are finding it more difficult to justify new purchases, said Rolland Vincent, president of Rolland Vincent Associates, a jet consulting firm that works with Utica, New York-based JetNet.

"It's like having a lot of cars in your driveway," Vincent said. "If you don't use them that much, you're not going to be out shopping for another one."

The recovery in class="mandelbrot_refrag">business flying is uneven around the world, and prone to setbacks. A global survey of private aircraft, including helicopters and charters, showed a 2 percent decline in the hours flown in the first quarter, from a year ago.

Flight hours in Asia, Europe and the Middle East rose in the past year through March, but declined in the United States and Latin America, according to the survey by Jet Support Services Inc (JSSI), a Chicago-based company that supplies service and support for aircraft.

The harsh U.S. winter played a big role in depressing demand for flying, while political issues in Eastern Europe and slower economic growth in Asia affected flying in those regions, JSSI said.

But demand should "bounce back" in the spring, said Neil Book, chief executive of JSSI. "As the overall class="mandelbrot_refrag">economy ramps up, we expect to see overall flight hours increase more quickly," he said.

Indeed, the longer term trend in operations tracked by the Federal Aviation Administration shows U.S. flying steadily picking up.

In the United States, which is by far the largest business-aircraft market, business jet flights rose about 3.4 percent in the 12 months through March, according to the FAA's tracking of takeoffs and landings. That's a sharp upswing from the prior 12-month period, when flights rose only about 0.3 percent.

But because the industry was cranking out jets at a high rate from 2005 to 2009, the amount of flight time per plane remains well below the peak of 2007, just before the financial crisis.

Some companies are throttling back on personal plane use, or shifting to less expensive options than owning, including new "club membership" plans that don't involve capital outlays that can cost hundreds of thousands or millions of dollars annually.

Several class="mandelbrot_refrag">S&P 500 companies said in recent filings that they have set limits on executive use of corporate jets. Many already require executives to reimburse the company for personal use of the plane beyond a set limit of hours or dollars.

class="mandelbrot_refrag">Danaher Corp, for example, recently curtailed personal use of the corporate jet by its chief executive and chief financial officer, but raised salaries to compensate for loss of the perk.

Some companies also said they are leasing jets or using fractional ownership plans, rather than owning planes outright.

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Wheels Up, a plane serviced launched last August, uses a club membership instead of fractional ownership, and cuts the cost substantially. He said some of the demand comes from companies that have given up ownership of some form.

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"We've definitely had people joined from other ownership programs," said Rod Williams, president of Wheels Up. (Reporting by Alwyn Scott; Editing by Ken Wills)

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FEATURE-Quality issues push e-cigarette production to U.S. from China

Some of the leading U.S. producers of electronic cigarettes are moving their manufacturing to the United States from class="mandelbrot_refrag">China in response to growing concern about quality and the prospect of tighter federal regulations.

In recent weeks, some of the best-selling U.S. e-cigarette companies, including closely held Mistic and White Cloud, announced that they would move production to new, highly automated U.S. factories that would enable them to track ingredients and quality more closely. As a fringe benefit, they even expect costs to be lower than in class="mandelbrot_refrag">China, the country that invented the battery-powered cartridges that produce a nicotine-laced inhalable vapor.

"People are concerned about quality," said Bonnie Herzog, a senior analyst at Wells Fargo Securities, who expects more manufacturing to shift to the United States.

 
 
 

"There is varying quality among all these different brands," she said. "I think regulation will standardize these products because they will be forced to improve."

The shift has gained momentum since April, when the U.S. Food and Drug Administration proposed rules that would require, among other things, manufacturers that want access to the U.S. market to register with the agency and list the ingredients in their products.

"As a general rule, the FDA regulation will require more control over the manufacturing process," said Bryan Haynes, an attorney at Troutman Sanders, a law firm in Richmond, Virginia, that represents e-cigarette companies. He said more companies plan to move production to the United States because it "could make compliance easier".

Many of these companies already produce the nicotine-laced liquid used in e-cigarettes in the United States and then ship it to China, where the battery-powered devices are assembled. Most batteries will continue to be made in China.

E-cigarettes are considered a crucial class="mandelbrot_refrag">business for the three major U.S. class="mandelbrot_refrag">tobacco companies, which have bought or developed their own brands in recent years to offset shrinking sales of conventional tobacco cigarettes. Compliance with new U.S. regulations has become a top priority.

U.S. sales of e-cigarettes are expected to outpace sales of class="mandelbrot_refrag">tobacco cigarettes by 2020, in part because of the perception they are safer to smoke.

Their advocates say e-cigarettes are a safer alternative to smoking traditional cigarettes since they do not produce lung-destroying tar. But there is little data about the long-term health effects of the products.

class="mandelbrot_refrag">Reynolds American Inc is the only one of the nation's three largest tobacco companies to make its e-cigarettes in the United States, at a factory in Kansas. It currently sells its Vuse brand in two states but expects to expand nationwide this summer.

Lorillard Inc's blu brand is assembled in China but the liquid is produced in the United States. Reuters reported earlier this week that Reynolds was in active discussions to buy Lorillard. Blu is the top selling e-cigarette brand in the country, with about half of the market share.

class="mandelbrot_refrag">Altria Group Inc makes the liquid for its MarkTen in Richmond, Virginia, and manufactures the brand in China. It also expects to sell the e-cigarettes across the United States this summer.

To be sure, most e-cigarettes are still made in China. Many companies are pleased with production in China and have no plans to move their operations. NJOY, for example, produces the liquid for its NJOY brand in the United States and assembles the devices in China.

"We adhere to our own 'gold standard,' which covers quality control practices and tests of every NJOY product," Craig Weiss, the company's chief executive, said in an email.

In May, Tarpon Springs, Florida-based White Cloud said it would move manufacturing to an automated plant in the United States that would make production much faster and more precise.

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"We can delivery a much more uniform product because we're not reliant on someone's eye," said Rob Burton, director of corporate and regulatory affairs at White Cloud Electronic Cigarettes. The company, like many other manufacturers, has been hand-filling the liquid into the devices in its Chinese facility.

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Burton said White Cloud would like U.S. regulators eventually to approve the product as a medical device for smoking cessation. The new design, he said, should provide "consistent vapor delivery".

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John Wiesehan, Mistic's chief executive, said his company was moving production even though it was satisfied with the quality of the products made in China. He conceded, however, that there was a perception of inferior quality with Chinese-made products. "I wanted to remove that stigma," he said.

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Mistic officials expect to cut costs by moving production to the United States because the company won't have to ship the fluid and could reduce the number of workers it employs.

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"You're in the beginning stages of this industry," Wiesehan said. "And we're developing standards as we speak." (Additional reporting by Malathi Nayak and Toni Clarke; Editing by Frank McGurty and Peter Galloway)

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In North American rail towns, some try to stop oil trains

Albany, New York Sheriff Craig Apple assured a room of concerned citizens that county emergency crews were prepared to handle an oil-train accident involving three or four tank cars.

Firefighters have been training to combat railcar fires with foam, and evacuation plans are detailed in a 500-page emergency response plan, Apple told residents in a May 12 address.

But he was blunt about the potential impact of a larger derailment: "Look, let's face it, there's going to be mayhem."

 
 
 

Albany's tracks handle as much as a fourth of the oil pumped from North Dakota's booming Bakken Shale, or up to several 100-car trains per day, each carrying 70,000 barrels.

It is one of several spots along North America's new oil-by-rail corridors where residents and officials are restless, following six fiery derailments in the past 10 months. Some want to limit or halt the traffic, fearful that existing precautions will not prevent deadly blasts, air and waterway pollution, or nuisances including nasty odors.

Since trains play a growing role in getting oil from landlocked North Dakota and central Canada to mostly coastal refineries, efforts to stop them could boost shipping costs or slow the pace of North America's oil boom. This could hit the bottom line of drillers like Continental Resources or refiners like Phillips66.

The opposition extends beyond traditional hotbeds of environmental activism, to oil shipping or processing hubs like Albany, Philadelphia and St. John, New Brunswick in Canada, home to the country's largest refinery.

Efforts to stop oil trains are a new battle front for several major environmental groups that have campaigned to block the Keystone XL pipeline from bringing crude south from Canada's oil sands. With Keystone in limbo, U.S.-bound rail shipments of Canadian oil have risen 20-fold since 2011, the U.S. Congressional Research Service estimated.

With U.S. oil production at a 28-year high, new pipelines in booming shale areas like North Dakota's Bakken have not kept up. This has also pushed more crude onto trains.

Opposition movements have scored a few small victories. Albany County has temporarily halted plans by energy logistics firm Global Partners to install boilers at its rail terminal to make oil flow faster out of tank cars.

The Port of Portland, Oregon issued a blanket rejection of any proposals for class="mandelbrot_refrag">crude oil transfer or storage facilities, and states including California, Washington and New York are reviewing oil-train safety. One project, a $110 million rail terminal proposed by refiner class="mandelbrot_refrag">Tesoro Corp and Savage Cos. in Washington, is over budget and behind schedule, in part due to an extended state review.

Oil-train opponents are adopting tactics that helped to stall Keystone XL, including street protests and demands for detailed environmental studies.

But curbing oil trains may prove far trickier. Rail hubs face much less red tape than major new pipelines, and unlike pipeline operators, railroads usually are not required to submit comprehensive oil-spill response plans.

OIL ABOARD

U.S. cargoes have risen more than 50-fold since 2008, to around 1 million barrels a day. Volumes may reach 3 million barrels a day in 2016 -- more oil than OPEC member class="mandelbrot_refrag">Venezuela pumps daily -- unless pipeline class="mandelbrot_refrag">construction speeds up, Matt Rogers, a director at class="mandelbrot_refrag">business consultancy McKinsey, told an energy conference last week. (For a map of operating and planned U.S. oil-train terminals and a timeline of derailments, click: link.reuters.com/zyt59v )

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California may receive 25 percent of its oil by rail in 2016, up from 1 percent now, according to the state's Energy Commission.

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About 60 oil-train terminals already exist along the 140,000 miles of U.S. rail tracks, and at least 30 more are planned, including eight in California.

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Phyllis Fox, a well known U.S. air quality expert, said many hubs won quick approval in towns or cities that did not recognize potential hazards.

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"They get the district to rubber stamp it," Fox said.

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The shipping trend drew little public scrutiny until a runaway oil train killed 47 people in Lac Megantic, Quebec last July.

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That and subsequent derailments have ignited a debate between regulators, railroads, drillers, refiners and railcar makers about who is responsible for preventing more disasters.

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Railroads say older tank cars known as DOT-111s, which have gained a reputation for exploding during derailments, should be "aggressively" phased out. Shippers say railroads must improve their infrastructure. Others suggest that volatile Bakken shale crude may be to blame.

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In January, the U.S. Department of Transportation warned of Bakken crude's fire risks, drawing rebukes from oil companies who say it is as safe as other U.S. varieties. This month, DOT issued a statement "strongly urging" shippers to use newer, safety-enhanced railcars for Bakken cargoes. But regulators did not ban older cars from handling it.

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The DOT has ordered railroads to inform states about large rail cargoes of Bakken crude traveling through, following complaints about lack of disclosure.

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"I don't think anyone has fully addressed the safety of these things," said Read Brugger of environmental group 350 Maine, which wants to ban oil trains in the state. "People don't think they should be coming through our towns and cities and along our bodies of water."

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Derailments have continued. A fiery April 30 oil-train accident in Lynchburg, Virginia was the worst yet to affect a U.S. city. Tank cars carrying Bakken crude toppled into the James River, a source of regional drinking water, leaking 25,000 gallons and setting the river ablaze. The exploding cars included newer models with enhanced safety features like reinforced class="mandelbrot_refrag">steel plates.

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In January, oil-laden tank cars derailed on a rail bridge in Philadelphia, prompting a local protest.

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Hours before Sheriff Apple's speech in Albany, four tank cars derailed at low speed in a rail yard near the city's bustling Ezra Prentice housing complex.

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Canadian Pacific, the yard's operator, said there was no oil leak or fire. The railroad was fined $5,000 for failing to report the incident until five hours later.

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Albany County Executive Dan McCoy, a former firefighter, said he will seek jail time for rail workers who fail to report future incidents within an hour.

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SCARY FOOTAGE, CRUDE ODORS

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North American railroads are among the world's most efficient. The Association of American Railroads says 99.997 percent of hazardous material cargoes arrive without incident.

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But video from Lac Megantic shows the town center reduced to rubble, and images from derailments this year in North Dakota and Virginia feature fireballs up to 60 feet high.

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Some worry about more insidious risks. In St. John, the site of Canada's biggest refinery, air quality incidents have risen since operator Irving Oil built about 145,000 barrels per day of rail unloading capacity three years ago, regulatory filings show.

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Julie Dingwell, who lives nearby, said foul smells from the new terminal - the destination for the ill-fated Lac Megantic train - have kept her indoors several times over the past year.

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Weeks after the Quebec disaster, St. John residents called the fire department as Irving unloaded a batch of high-sulfur Alberta crude from rail cars, filings show.

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"You immediately think disaster," Dingwell said. "I've lived in this industrial city most of my life, so I know bad smells. That smell was beyond."

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This February, Irving sent scores of apology letters to homes nearby. "We sincerely apologize for any inconvenience these odours may have caused you and your family," they say.

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The terminal has begun using a liquid product called Ecosorb, made by Omni Industries, to neutralize the odors, an Irving official said in an email obtained by Reuters in April.

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An Irving spokesperson did not respond to requests for comment.

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MOVING WEST

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Some 3,000 miles to the west, oil-by-rail is gathering steam along the Pacific Coast, a region long reliant on sea-borne oil imports with no pipeline links to the Bakken.

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class="mandelbrot_refrag">Tesoro Corp., which already ships oil by-rail to its Anacortes, Washington refinery, is seeking approval for a 360,000 barrel per day facility in Vancouver, Washington, population 165,000. It faces a months-long delay during a state environmental review. Its approval rests with Democratic Governor Jay Inslee, who has not taken a position on the project.

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Tesoro has participated in more than 100 community meetings, a company spokeswoman said, adding that the project would boost energy independence and create hundreds of jobs.

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Further north in Washington's Grays Harbor County, fishermen, tribal groups and environmentalists oppose plans by three firms to inaugurate oil-by-rail terminals. Their proposed sites are on an estuary in an earthquake zone, opponents say.

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Three trains carrying grain have derailed in the county since late April, prompting a Federal Railroad Administration probe.

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"We got lucky this time," said Arthur Grunbaum of the Friends of Grays Harbor group. "We won't be if class="mandelbrot_refrag">crude oil is permitted."

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Ed Johnstone, a fisherman who represents the Quinault Indian Nation on policy matters, said that allowing oil-trains would violate the Quinaults' land rights treaty. They have appealed to federal officials to nix the projects.

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With each new derailment, the opposition to oil trains is coalescing, said Diana Bailey of the Natural Resources Defense Council, one of the leading national environmental groups and a major opponent of Keystone XL.

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"It's no longer 'not in my backyard.' Now it's 'not in anyone's backyard,'" she said. (Reporting by Joshua Schneyer in Albany, New York; Rory Carroll in Vancouver, Washington; and Richard Valdmanis in St. John, New Brunswick. Editing by Jonathan Leff and David Gregorio)

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'X-Men' overpowers 'Godzilla' on way to holiday weekend win

The "X-Men" mutant superheroes smashed into U.S. and Canadian theaters and collected $90.7 million in ticket sales through Sunday, keeping monster hit "Godzilla" at bay and heading toward a decisive win over a long holiday weekend.

"X-Men: Days of Future Past" was expected to bring in $110 million by the end of the U.S. Memorial Day holiday on Monday, distributor 20th Century Fox said. The movie has already earned a global total of $261.8 million after opening at No. 1 in all 119 countries around the world.

Last week's winner, monster movie remake "Godzilla", dropped to second place with $31.4 million through Sunday, according to estimates from box office tracking firm Rentrak. Its sales were projected to reach $39 million by Monday.

 
 
 

Romantic comedy "Blended" claimed the No. 3 spot, taking in $14.2 million and on pace for about $17 million through Monday.

"X-Men: Days of Future Past" is the seventh movie in the blockbuster Marvel Comics franchise about mutant superheroes.

In the latest installment, Hugh Jackman's sharp-clawed Wolverine travels back in time to try and save the mutants from future destruction. To alter history, he is drawn into battle with the blue, shape-shifting Mystique, portrayed by Jennifer Lawrence in the $200 million film.

The movie scored the fifth-biggest Memorial Day weekend opening in history, Rentrak said.

"Godzilla," a remake of the classic 1954 Japanese monster movie, stars Aaron Taylor-Johnson as a naval officer who battles the rampaging beast.

"The film is holding strong even with huge competition in the marketplace and will have just under $160 million in North America through Monday," said Paul Dergarabedian, senior media analyst at Rentrak.

"Blended" reunites Adam Sandler and Drew Barrymore as single parents who have a bad blind date, then find themselves staying at the same African resort with their kids.

Rounding out the chart leaders, the Seth Rogen comedy "Neighbors" landed in fourth place with $13.9 million. Superhero sequel "The Amazing Spider-Man 2" was fifth with $7.8 million.

"X-Men" was released by 20th Century Fox, a unit of Twenty-First Century Fox. "Godzilla" was produced by class="mandelbrot_refrag">Time Warner Inc's Warner Bros. and Legendary Pictures.

Warner Bros. also released "Blended." Universal Pictures, a unit of class="mandelbrot_refrag">Comcast Corp, released "Neighbors." Sony Corp's movie studio distributed "Spider-Man 2." (Reporting by Lisa Richwine and Chris Michaud; Editing by Lynne O'Donnell)

RPT-Wall St Week Ahead-Fear strikes out on Wall Street

Whatever investors are worried about right now, those concerns are not showing up in Wall Street's fear gauge. That scares some. On the other hand, it more than likely means that class="mandelbrot_refrag">stocks will keep taking things slow and steady.

The class="mandelbrot_refrag">CBOE Volatility Index, or VIX, closed on Friday at 11.36, its lowest level since March 2013. That means investors see less risk ahead, particularly with the class="mandelbrot_refrag">S&P 500 ending at a record high again on Friday.

 
 
 

With the typically slow summer months just ahead and little on the horizon to shake the market from its current course, investors could be looking at even lower VIX levels, some analysts said.

"It's not that there's no likelihood of a correction. It's that people don't perceive anything to derail the train at this point," said Andrew Wilkinson, chief market analyst at class="mandelbrot_refrag">Interactive Brokers LLC in Greenwich, Connecticut. "So I think people are beginning to wonder: Are we heading back to single-digit volatility?"

The class="mandelbrot_refrag">S&P 500's record high and the drop in the VIX are not the only signs that fear is not a factor on Wall Street.

Volume is down as well. class="mandelbrot_refrag">S&P 500 E-mini class="mandelbrot_refrag">futures volume was below the 1.52 million daily average of the past year on every day last week except Tuesday.

The market's gain has come despite concerns about a slowdown in class="mandelbrot_refrag">China and weakness in small-cap names. Typically small-cap stocks lead the market's advance when the U.S. economy is improving.

However, the recent selloff in small-cap stocks, which drove the Russell 2000 index briefly into correction territory in mid-May, seems to have slowed. The Russell gained 2.1 percent last week, its biggest weekly bounce in more than a month. The index is less than 7 percent below its record close of 1,208.65 in early March.

At the same time, the Dow Jones Transportation Average hit record territory late Friday, nearly breaking above the 8,000 level.

"One of the reasons the VIX is so low, we haven't really done anything this year. We haven't moved an awful lot," said J.J. Kinahan, chief derivatives officer of TD Ameritrade in Chicago.

For the year, the S&P 500 has gained just 2.8 percent.

To be sure, some analysts say the lack of volatility suggests a complacency that could encourage excessive risk-taking. New York Federal Reserve Bank President William Dudley and Dallas Fed President Richard Fisher have both expressed such concerns in recent days.

"The lower the VIX, the more overbought the market gets, leaving it vulnerable to some kind of setback," said Donald Selkin, chief market strategist at National Securities in New York.

But the lack of volatility is also showing up in the foreign-exchange and commodities markets, according to Bespoke Investment Group analysts. They noted lower implied volatility in options in the foreign-exchange market as well as recent stability in the PowerShares Deutsche Bank Agriculture Index exchange-traded fund.

"If the VIX index is pricing in too little volatility, then why is it wrong to do so?" Bespoke analysts wrote.

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(Wall St Week Ahead runs every Sunday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com ) (Reporting by Caroline Valetkevitch; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)

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Filling up on petrol station offices

Seeking a place to work out of the office that is quieter than a bustling coffee shop and provides drinks, printers, Wi-Fi and even petrol?

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Regus, a provider of ready-to-use office space, thinks it has the answer.

It has teamed up with Shell class="mandelbrot_refrag">Germany to open up workplace hubs and lounges in 70 petrol stations in and around Berlin that will provide Wi-Fi hotspots, scanners, printers, phone charging and even meeting rooms, depending on the space available.

 
 
 

"You already see people working in class="mandelbrot_refrag">Starbucks, hotel lobbies. They want facilities they're not getting there though, such as printers, phone charging, the ability to sit somewhere quiet and make a phone call," Phil Kemp, global managing director for Regus Third Place told Reuters.

The hubs are what Regus terms the 'third place' for workers, the first and second being the office and the home. Working in this way is a trend that is being driven by the explosion in tablet class="mandelbrot_refrag">computers and smartphones.

"People are no longer bound by the nine-to-five, or having to physically be in an office," Kemp said.

"With a mixture of the office, home and third place, you can be there to pick up the children from school, get to that important event and cut down on commuting times," he added.

The Shell deal is part of a wider strategy to bring these third places to air, road, rail and class="mandelbrot_refrag">retail locations all over the world.

Regus has already set up hubs within four class="mandelbrot_refrag">Staples office stores in the UK, and has a series of workhubs on the rail network in the Netherlands. It is in talks with airports too, but has not announced any deals yet.

"We're trying to do this globally; we'll focus on Western Europe and the United States initially and then look to spread further," Kemp said.

Regus doesn't break down numbers for its Third Place activities, saying it is too soon as the unit is still in the start-up phase. Overall the group has revenue of 1.24 billion pounds, generated from over 1,500 locations in 100 countries.

(Reporting by Victoria Bryan. Editing by Peter Myers)

U.S. appeals court revives lawsuit vs United Airlines over wheelchair

A U.S. appeals court on Tuesday revived a lawsuit against United Continental Holdings Inc's United class="mandelbrot_refrag">Airlines that was brought by a woman who claimed she was not promptly provided a wheelchair in an airport when she asked for one.

The opinion, from the 9th U.S. Circuit Court of Appeals in San Francisco, said federal law did not pre-empt the woman's personal injury claims under state law.

A representative for United could not immediately be reached for comment.

 
 
 

Mark Meuser, an attorney for plaintiff Michelle Gilstrap, who has difficulty walking, said some lower court judges had disagreed about whether individuals should be able to bring claims for injuries in an airplane or terminal.

"This is a really big deal for disabled Americans across the country," Meuser said.

Gilstrap had difficulty walking due to a collapsed disc in her back and osteoarthritis, according to the court opinion. During two separate plane trips in 2008 and 2009, she alleged that United failed to supply a wheelchair on some occasions.

She also said United agents yelled at her, doubted whether she really needed a wheelchair and ordered her to stand in line, which she could not do because of her condition.

Gilstrap sued, and a Los Angeles federal judge dismissed her case. In Tuesday's three-judge ruling, the 9th Circuit said Gilstrap could not pursue her claims under the Americans for Disabilities Act.

However, the court ruled that Gilstrap's claims, including emotional distress and negligence, under state law were not pre-empted by the Air Carrier Access Act. The appeals court remanded the case for further proceedings.

The case in the 9th Circuit is Michelle Gilstrap vs. United Air Lines Inc., 11-55271.

(Reporting by Dan Levine; Editing by Lisa Von Ahn)

Norway's Arctic idyll shivers at oil plans

Oil companies seeking new class="mandelbrot_refrag">Arctic areas for exploration face a battle with environmentalists, fishermen and hotel owners over Norwegian islands where jagged snow-capped peaks rise sheer from the sea.

With oil production falling to a 25-year low this year and the state depending on oil revenues, Norway's ruling Labour Party is warming to drilling in Lofoten's pristine waters, setting up the issue as the year's biggest political fight ahead of elections in September.

"We've already got the winning lottery ticket by living in class="mandelbrot_refrag">Norway. We shouldn't want to be even richer," said Erling Santi, a fisherman in Svolvaer, Lofoten's main town.

 
 
 

"Oil drilling could drive the fish away," said Santi who is also the managing director of Saga Fish, a cod packing plant.

Norway is one of the world's most prosperous nations with per capital GDP in excess of $100,000 but the fortunes of remote Lofoten, 1,000 kilometres (600 miles) north of Oslo, have been mixed. Unemployment remains above the national average and its young leave the area in search of jobs.

Lofoten has been off limits for exploration since Norway first struck oil in 1969, reflecting fears about nature in a scenic class="mandelbrot_refrag">Arctic region that is a spawning ground for the world's richest cod class="mandelbrot_refrag">stocks and home to sea eagles and puffins.

BP Plc's ( id="symbol_BP.L_0">BP.L) Gulf of class="mandelbrot_refrag">Mexico spill in 2010, the worst offshore spill in U.S. history, may have added to scepticism.

After Prime Minister Jens Stoltenberg came down in favour of studying drilling last month, Norway's top three parties on left and right are now open to the idea, pitting them against smaller parties and many of Lofoten's own residents.

The fight will also be a test for how the industry and politics handle the move northward, with sights firmly set on the high Arctic, including the frozen Svalbard archipelago.

VIKINGS

Backers say oil and gas finds are getting scarcer and that new technology means the risks of accidents are low enough to explore waters off Lofoten and the neighbouring Vesteraalen islands where cod has been king since Viking days.

"We need Lofoten but most of all, Lofoten needs the oil industry," said Knut Saeberg, chief financial officer CFO.L of North Energy ( id="symbol_NORTH.OL_2">NORTH.OL), which is based in Alta higher in the Arctic. He said Lofoten needed jobs to counter a drift away.

Eivind Holst, the Conservative mayor of the Svolvaer region where the crest of arms depicts a large cod, said he was in principle in favour of oil and gas, partly as a source of jobs.

Lofoten's population has fallen to 24,000 people from above 30,000 in the early 20th century, with many moving to cities.

"There isn't necessarily a contradiction between running an industry and enjoying nature. It just has to be done carefully," he said. "Tourists don't come to Lofoten to see oil platforms in the midnight sun."

A ban on seismic surveys in the cod spawning season early each year and use of sub-sea installations were among measures that would protect fish class="mandelbrot_refrag">stocks and tourism if the planned assessment gave a green light, he said.

_0">

A government report suggested that oil and gas in Lofoten could create 400 to 1,100 new jobs to the northwestern region. Hammerfest to the north has boomed as the landing area for gas from Statoil's ( id="symbol_STL.OL_3">STL.OL) Snoehvit field, he noted.

_1">

"The longer you wait, the fewer benefits you get," he said. "And there hasn't been an accident like the Gulf of class="mandelbrot_refrag">Mexico here - knock on wood." He rapped his knuckles on a wooden table for good luck.

_2">

OIL OUTPUT HALVED

_3">

Oil output by Norway, the world's number seven exporter, fell to 1.5 million barrels per day in January and even a string of big finds, set to come online in the second half of the decade, will only halt the rate of decline.

_4">

"The industry needs access to new areas on a regular basis to sustain activities," said Einar Gjelsvik, chief executive of Noreco, an oil producer. ( id="symbol_NOR.OL_4">NOR.OL)

_5">

Lofoten could hold 8 percent of Norway's undiscovered oil and gas resources, the Norwegian Petroleum Directorate says.

_6">

It says that seismic tests have identified 50 prospects off Lofoten that could hold recoverable reserves or around 1.27 billion barrels of oil equivalent.

_7">

"We are developing new technology to reduce the risk," said Leif Borge, CFO of Aker Solutions ( id="symbol_AKSO.OL_5">AKSO.OL). "Down the road, it's probably an important area."

_8">

Norway's worst oil spills were the Ekofisk Bravo blowout in the North Sea in 1977 that spilt 80,000 barrels and a spill of 27,500 barrels at the Statfjord field.

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"You can never be relaxed about safety but you can see that Norway's controls are so much better than the Gulf of Mexico," said Geoff Turbott, CFO at Lundin Petroleum ( id="symbol_LUPE.ST_6">LUPE.ST). "Opening the area is many years away and even from then, the first drilling is 3-4 years away."

_10">

An opinion poll by InFact in February showed that 49 percent of almost 1,100 people in Nordland county, which includes Lofoten, opposed oil and gas production off the islands with 34 percent in favour and others undecided.

_11">

It also showed that 44 percent favoured an environmental impact assessment with 43 percent opposed. Lofoten's people will be consulted but will not decide on oil and gas.

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Lofoten has Arctic winter darkness that complicates drilling but the warm Gulf Stream current keeps it ice free. It is warmer than where the Exxon Valdez tanker ran aground off Alaska in 1989, even though it is further north.

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Less chilly waters mean any oil would break down faster. "The problems for drilling here are the fish, the birds and the coastline," said Truls Gulowsen, head of Greenpeace Norway. "It's not typical of the Arctic."

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The relative warmth makes Norway an exception for Arctic drilling - Shell has abandoned drilling off Alaska for this year after a string of setbacks in 2012.

_15">

Tourism operators fear that oil and gas could undermine class="mandelbrot_refrag">business. "The oil can wait. We have had some big oil finds in recent years," said Ola Skjeseth, the biggest local hotel manager who runs 500 beds around Lofoten.

_0">

He said he was especially opposed to any oil or gas terminal on the islands, saying it would contradict publicly funded class="mandelbrot_refrag">advertising campaigns that call Lofoten "the world's most beautiful coast" with white beaches and saw-tooth mountains.

_1">

And in winter, more tourists are starting to visit, hoping to see the northern lights, particles from the sun that can produce a show of green, pink and violet across the night sky.

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Prime Minister Jens Stoltenberg's decision to favour an environmental impact study aligns Labour with the opposition right-wing Conservatives and the Progress Party. That makes a study likely after the September election, unless the balance of power falls to a small party opposed to drilling.

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Mayor Holst said that a melt of Arctic sea ice caused by global warming was a bigger environmental threat than oil and gas because it raising risks of shipwrecks, including tankers, on a likely new route between the Pacific and the Atlantic.

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That would be a turnaround for Lofoten, which has sometimes benefited from shipwrecks. Some old buildings in Svolvaer are built with timber washed from 19th century Russian wrecks - cold means trees don't grow big and thick enough on the islands.

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(Editing by William Hardy)

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Carnival puts cruise fleet under microscope after ship fire

class="mandelbrot_refrag">Carnival Corp ( id="symbol_CCL.N_0">CCL.N) ( id="symbol_CCL.LCCL.L) has launched a comprehensive review of its entire fleet after a fire crippled one of its ships last month, and will share its findings across the industry, Carnival class="mandelbrot_refrag">Cruise Lines' chief executive told a conference on Tuesday.

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The engine-room fire disabled the Bahamian-flagged Carnival Triumph in the Gulf of class="mandelbrot_refrag">Mexico, leaving it adrift with more than 4,000 passengers and crew aboard. The accident made headlines around the world and comedians had a field day with the ensuing plumbing problems.

"We've started a comprehensive review of our entire fleet," Carnival class="mandelbrot_refrag">Cruise Lines President and Chief Executive Gerry Cahill told the annual Cruise Shipping Miami conference.

 
 
 

"It will take us a little bit of time to complete it but you can rest assured that it is our highest priority in the entire organization, it is the thing we are most focused on and we will come up with some solutions that we can implement across our fleet," he said.

The company has assembled teams of fire safety experts, naval architects, electrical and mechanical engineers and engine manufacturers to conduct its own investigation, Cahill added.

The Triumph was on its way back to Galveston, Texas, when a leak in a fuel return line caused a fire in the aft engine room. The ship has two independent engine rooms but the fire damage knocked out both, Cahill said.

A diesel generator kicked in to run emergency services, but could not run what Cahill described as "hotel services", most notably the plumbing in the cabins.

Cahill said the company investigation would focus on fire prevention and suppression, engine-room backup systems, and on figuring out what hotel service facilities could be run with emergency generators.

Carnival is cooperating with ongoing investigations by the U.S. Coast Guard and National Transportation Safety Board and the Bahamian government, as well as a review by the Cruise Line International Association CLIA.L, he added.

class="mandelbrot_refrag">Carnival Corp is the world's largest cruise line, with 100 ships under brands that include Carnival, Cunard, Holland America, Princess, Seabourn and Costa.

RIPPLE EFFECT

Cruise executives frequently say the attention lavished on their competitors' new ships creates a rising tide of demand that benefits them all. Accidents cause similar ripples throughout the industry.

"The recent Triumph incident affects all of us," said Christine Duffy, president and chief executive of CLIA, which represents 58 cruise lines worldwide. "Even though such incidents are rare, we don't underestimate their impact."

Nonetheless, industry projections are chronically rosy. Cruising is a $36 billion industry worldwide, part of a $9.9 trillion global travel industry that represents 9 percent of global GDP, according to the World Travel and Tourism Council.

Some 20 million people took cruises last year and CLIA projects this year's total will rise 3.3 percent to hit 20.9 million.

"We have been the fastest-growing segment inside the travel industry," Duffy said.

_0">

Despite tough economic times, passenger numbers have risen every year over the last decade, she said. North America is still far and away the biggest source of cruise passengers, though the percentage from outside North America rose to 31 percent last year, from 9 percent in 2000.

_1">

Industry officials expect strong growth in class="mandelbrot_refrag">China and other parts of Asia, where tens of millions, if not hundreds of millions, of people are moving into the middle classes and eager to see the world.

_2">

"They may not be comfortable going on their own but are comfortable going on one of our ships," Duffy said.

_3">

The industry has added 168 new ships since 2000. Twenty-five more oceangoing and river-cruising ships will come on line in the next two years, but the pace is slowing, ending a glut of berths that had led to discounting.

_4">

Kevin Sheehan, chief executive of Norwegian Cruise Line ( id="symbol_NCLH.O_3">NCLH.O), which recently went public, predicted the industry would soon "move pricing to more respectable levels".

_5">

If the class="mandelbrot_refrag">economy holds steady or improves slightly "then this industry will outperform", Sheehan said.

_6">

The cruise line chiefs say their industry is resilient, in part because it has good overall safety.

_7">

Sheehan called it "the safest, safest, safest vacation experience that anybody could ever have".

_8">

Pierfrancesco Vago, chief executive of MSC Cruises, a privately owned European line, suggested vacationers have short memories. Last year's Costa Concordia accident caused bookings in class="mandelbrot_refrag">Italy to plummet, especially scaring away first-time cruisers, he said.

_9">

Bookings are still erratic, but are growing again, in part because cruising is perceived as good value, he said.

_10">

"It's amazing how this 2012 has been forgotten. We've seen already the new wave season, 2013, that the first-comers are coming back again," Vago said. "2013 is looking much better, stronger."

_11">

(Editing by David Adams and Dale Hudson)

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London keeps global edge as top transport finance hub

London remains the top financing centre for the global transport industry, although it faces stiff competition from New York and capitals in Asia Pacific as companies seek to tap more funding sources, a survey showed on Friday.

Some 37 per cent of respondents from the global aviation, rail and shipping sectors ranked London as the key financial centre for transport, followed by New York at 14 percent and Singapore at 7 percent, the survey by international law firm Norton Rose found.

"London and New York remain key financial centres for the transport industry but are looking over their shoulders at Asia which is growing in importance," said Harry Theochari, global head of transport at Norton Rose.

 
 
 

Of those canvassed, 43 percent from the rail industry said London was most favoured as a financing hub, followed by 40 percent in the shipping sector and 31 percent in aviation.

The annual survey by Norton Rose, now in its fourth year, is one of the transport sector's leading barometers of market conditions, especially for the shipping community.

While London has a 300-year history as a leading class="mandelbrot_refrag">finance, insurance and legal centre for the shipping industry, the survey said companies were looking at alternatives due to tough trading conditions, exemplified by a warning last month from Frontline ( id="symbol_FRO.OL_0">FRO.OL), one of the world's biggest tanker operators.

Frontline said it may miss bond repayments due in 2015 and be forced to restructure again if the market's depression continues.

"A dramatic reduction in the availability of debt class="mandelbrot_refrag">finance in the London market means that shipping is increasingly turning to structured finance and private equity," Theochari said.

"This gives New York a distinct advantage, as it has the largest capital class="mandelbrot_refrag">markets in the world and far greater access to private equity than any other global financial centre."

The survey canvassed views from 1,006 participants from a range of companies involved in transport including financiers, ship owners and operators, manufacturers, builders and industry advisors. Those polled comprised 383 from the aviation sector, 314 from rail and 309 from shipping. (Editing by David Holmes)

BlackBerry plans security feature for Android, iPhone

BlackBerry will offer technology to separate and make secure both work and personal data on mobile devices powered by class="mandelbrot_refrag">Google Inc's Android platform and by Apple Inc's iOS operating system, the company said on Thursday.

The new feature could help BlackBerry sell high-margin services to enterprise clients even if many, or all, of their workers are using smartphones made by BlackBerry's competitors. That may be crucial for the company as it has lost a vast amount of market share to the iPhone and to Android devices, such as Samsung class="mandelbrot_refrag">Electronics Co's ( id="symbol_005930.KS_0">005930.KS) Galaxy line.

Jefferies analyst Peter Misek said he expects BlackBerry's device management class="mandelbrot_refrag">software to gain traction this year, and boost revenue next year.

 
 
 

"Supporting devices with the best, most secure, and easiest-to-use mobile solution should enable RIM to transform into what we believe is an attractive model," he said in a note to clients.

The offering could help BlackBerry shore up its profitable services class="mandelbrot_refrag">business. BlackBerry's shares plunged in December after it said it would change the way it charges for services, cutting fees for customers that do not need advanced security and other enhanced features.

The new Secure Work Space feature will be available before the end of June, and will be managed through BlackBerry Enterprise Service 10, the platform that allows BlackBerry's corporate and government clients to handle devices using different operating systems on their networks.

BlackBerry said the feature fences off corporate email, calendar, contacts, tasks, memos, web browsing and document editing from personal apps and content, which could be less secure.

BALANCING ACT

In a bid to regain market share and return to profit, BlackBerry introduced a new line of smartphones powered by its BlackBerry 10 operating system earlier this year.

The touch screen version, dubbed the Z10, is on sale in more than 20 countries, while a device called the Q10, with a physical keyboard, will be available in April.

The new devices have a feature called Balance, which keeps corporate and personal data separate. It allows information technology departments to manage the corporate content on a device, while ensuring privacy for users, who can store and use personal apps and content on the same phone without corporate oversight.

With Secure Work Space, "we're extending as many of these (Balance) features as possible to other platforms," David Smith, BlackBerry's head of mobile enterprise computing, said in a statement.

BlackBerry's move comes as Samsung, whose Galaxy devices have gained great popularity, attempts to make itself a more viable option for class="mandelbrot_refrag">business customers with security features such as Samsung Knox and SAFE, or Samsung for Enterprise.

BlackBerry said Secure Work Space means clients would not need to configure and manage expensive virtual private network VPN.L infrastructure in order to give workers' devices access to data and applications that reside behind corporate firewalls.

"Secure Work Space also offers the same end-to-end encryption for data in transit as we have offered on BlackBerry for many years, so there is no need for a VPN," Peter Devenyi, head of enterprise class="mandelbrot_refrag">software, said in an interview.

SELLING SERVICES

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The new feature could also help stem declines in BlackBerry's service revenue. That business has long been a cash cow for BlackBerry because of the large clients that pay to use its extensive network and security offerings.

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However, the company has been under pressure to reduce its infrastructure access fees, and opted to do so during the transition to BlackBerry 10. Due to the changes, BlackBerry's service revenue is expected to decline over the course of this year.

_2">

Giving its large array of corporate clients the ability to manage BlackBerry devices, along with Android smartphones and iPhones on their networks might encourage both corporate and government clients to continue to pay for and use BlackBerry's device management services.

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BlackBerry plans to report quarterly results on March 28.

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Last week, Chief Executive Thorsten Heins said sales of the Z10 had surpassed BlackBerry's expectations in emerging class="mandelbrot_refrag">markets such as class="mandelbrot_refrag">India, where cheaper entry-level phones are typically popular.

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On Wednesday, the company said it had received an order for 1 million BlackBerry 10 smartphones - the largest order it has ever had from a single customer - and its shares jumped.

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BlackBerry's volatile stock closed up 8.2 percent at $15.65 on the class="mandelbrot_refrag">Nasdaq on Wednesday, while its Toronto-listed shares rose by a similar margin to C$16.04.

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The shares pared gains on Thursday, falling 2.3 percent to $15.29 in late morning trading on the Nasdaq. In Toronto, its shares were 2 percent lower at C$15.72. (Reporting by Euan Rocha and Allison Martell; Editing by Jeffrey Benkoe, Lisa Von Ahn and Peter Galloway)

_8">

48 hours in Rochester, New York

Synonymous with film photography, lilacs and classical music, Rochester offers an unusual array of attractions for a mid-sized U.S. city that brought industrial prowess to a scenic river gorge on Lake Ontario's southern shore.

From top-ranked golf courses and national-landmark house museums to a children's emporium of play and America's oldest municipal park-garden cemetery, the city in western New York is crammed with surprises for visitors of all interests.

Its glacier-carved linchpin is a trio of waterfalls trumpeting the Genesee River's thunderous descent into Lake Ontario.

Reuters correspondents with local knowledge help visitors get the most out of a short stay in Rochester (pop. 210,855), variously known over two centuries as the Flour City, the Flower City and, less so of late, the World's Image Center.

 
 
 

FRIDAY

5:30 p.m. - Dinner at Dinosaur Barbecue (www.dinosaurbarbque.com), a honky tonk rib joint tucked into a former railroad station overlooking the river. Take in a view of the unstoppable torrent from the adjacent Court Street Bridge before digging in to brisket, cornbread and tomato-cucumber salad.

7 p.m. - Head back across the bridge to Blue Cross Arena (www.bluecrossarena.com) for a dash of ice-hockey escapades hollering on the Rochester Americans. For spring and summer alternatives, catch a Rochester Red Wings baseball game at Frontier Field (www.rochesterredwings.com) or the Rochester Rhinos soccer team at Sahlen's Stadium (www.rhinossoccer.com).

For people who prefer stage or dance, there's Geva Theatre (www.gevatheatre.org) or an occasional hometown performance by the top-notch Garth Fagan dance troupe (www.garthfagandance.org).

9:30 p.m. - End the day with a Genesee cream ale or Finger Lakes Riesling and a twirl on the dance floor at one of an assortment of bars and music halls that abound in the lively East End.

SATURDAY

9 a.m. - Try yogurt and granola plus an egg Danish - caramelized onions baked in fluffy pastry topped with an egg - at Flower City Bread in the Rochester Public Market (www.cityofrochester.gov/publicmarket). This magnet for bargain food shoppers, situated since 1905 on Union Street in the gritty northeast section, has a ring of casual eateries.

10:30 a.m. - Head to the Genesee River at its most spectacular stretch north of downtown for a peek into the city's water-powered origins. Repurposed factories and remnants of a once flourishing flour industry form a ghostly backdrop to the 90-foot (27.4 meter) cascade known as High Falls.

Among panoramic vantage points above the waterfall and its wide gorge basin are a pedestrian bridge and the rooftop patio of a pub-style restaurant in Genesee Beer and Ale brewery (www.geneseebeer.com/brew-house).

For more outdoors adventure, take a short drive north to a path behind Maplewood Park's rose garden that descends close to river level in the nearly 200-foot-deep gorge.

11:30 a.m. - The red-brick Victorian home of women's rights crusader Susan B. Anthony (www.susanbanthonyhouse.org) is a highlight among memorials concentrated in upstate New York that extol women's achievements in molding the nation.

Step into the parlor where Anthony was arrested after daring to vote in 1872. The home contains the trademark alligator bag she carried on frequent travels, and the bed she died in after delivering her "Failure is Impossible" speech in Washington in 1906.

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12:30 - Cross downtown into the South Wedge neighborhood for lunch at Mise en Place (miseenplacemarket.com), a modest grocery-cum-diner with window tables looking out at a string of rib class="mandelbrot_refrag">restaurants, pubs and bakeries along South Avenue. Cheesy Eddie's is a stalwart for cheesecake, while newcomers include The Little Bleu Cheese Shop and Hedonist Artisan Chocolates and Hedonist Artisan Ice Cream.

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1:30 p.m. - Memorial Art Gallery (mag.rochester.edu), located for 100 years in an Italian Renaissance-style architectural gem in the East-side arts district, features an eclectic collection of 12,000 works of art, from Impressionist paintings to metal sculptures by hometown luminary Albert Paley.

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Search out the only full-size Italian Baroque organ in North America, a 600-pipe, fully restored instrument built around 1770 that is played at periodic recitals by students at the acclaimed Eastman School of Music.

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Children in tow? A popular alternative is The Strong (www.museumofplay.org), the second-largest museum devoted to children in the United States. Among dozens of interactive educational exhibits are a butterfly garden, a streetscape from television's Sesame Street and a whaling ship.

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3 p.m. - Stroll from the art gallery along University Avenue. Dawdle over coffee or antiques at the Flatiron building or photo art at Image City Photography Gallery.

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3:30 p.m. - The walk extends to George Eastman House (www.eastmanhouse.org), the world's oldest museum of photography and motion pictures with an archive of 400,000 images stretching back to 1830s daguerreotypes.

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View old cameras, famous original photos and film reels at Eastman's majestic 1905 Colonial Revival mansion and villa-style gardens. The patriarch of popular photography, Eastman founded Eastman Kodak Co, which ruled the world of film photography for over a century but has been brought to its knees by a swift shift to the digital technology it helped pioneer but couldn't capitalize on.

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6:30 p.m. - For a cut-above meal, try the restaurant Good Luck (www.restaurantgoodluck.com). Its tapas-style dishes are meant to be shared, from red lentils to smoked pork shank.

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9 p.m. - Head to The Little (www.thelittle.org) for an indie, foreign or art film in a funky 1929 Art Deco theater on East Avenue.

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SUNDAY

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8:30 a.m. - Start the day with French toast or Eggs Benedict at The Frog Pond (eatatthefrogpond.com/) in the fashionable Park Avenue district.

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10 a.m. - On the edge of downtown is Mount Hope Cemetery (www.cityofrochester.gov/mounthope), a 196-acre arboretum favored by dog walkers, history buffs and curious souls. A classic example of a pre-Civil War "rural cemetery," Mount Hope is a heavily wooded jumble of ridges, ravines and meadows with gravestones and mausoleums set amid fountains, ornate sculptures and stone terraces fringed with wildflowers and pines.

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11 a.m. - Across the street, stroll through Frederick Law Olmsted-designed Highland Park (www.monroecounty.gov/parks-highland.php), famous for its lilac bushes and a floral, food, art and musical festival in May that serves as the true advent of spring in a city where snowfall tops 100 inches (2.5 meters) in a typical winter.

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12:30 - Lunch at The Food Bar in the suburb of Pittsford.

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1:30 p.m. - Tee off at one of the Rochester region's 90-plus golf courses to get a feel for the undulating, tree-framed terrain the world's top golfers will encounter at two majors here this year: the PGA Championship at Oak Hill in Pittsford on August 5-11 and the Wegmans LPGA Championship at nearby Locust Hill from June 3-9 (www.golfrochesterguide.net/). (Editing by Patricia Reaney and Jim Marshall)

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