2015 04 02 cmyk na 04 - the wall street...

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* * * * * THURSDAY, APRIL 2, 2015 ~ VOL. CCLXV NO. 76 WSJ.com HHHH $3 .00

CriticismMountsOn IranTalks

CONTENTSArts in Review.......... D5Business Education B5Business News.. B2,3,6Global Finance............ C3Heard on the Street C8Opinion.................. A13-15

Small Business.......... B7Sports.............................. D6Style & Travel........ D2-4Technology................... B4U.S. News................. A2-4Weather Watch........ B7World News.......... A6-11

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What’sNews

TheWhite House began dis-cussing options in case of fail-ure to reach a nuclear deal withIran, as diplomats remainedstalled on two key points.A1 Sen. Menendez of New Jer-sey was indicted on corrup-tion charges following an FBIprobe into his relationshipwith a Florida doctor. A4 The Saudi-led bombingcampaign against Houthi reb-els is angering Yemenis, as ci-vilian casualties mount and in-frastructure is destroyed. A6 Islamic State clashedwithrebel groups in a neighborhoodof Damascus, Syria, in a signthemilitant group is trying totake control of the area. A6 California Gov. Brown or-dered statewide reductionsin water use in response to aworsening drought. A3 Arkansas’s governor de-manded changes to “religiousfreedom” legislation statelawmakers had approved. A4 Eleven Atlanta educatorswere found guilty of racke-teering charges in a schooltest-cheating scandal. A3 A spate of armed attacksin Istanbul have raised fear offurther violence in the run-upto Turkey’s June elections. A8Greece faces the prospectof another month starved ofcash after making little prog-ress in talks with creditors. A9Prosecutorswon’t seekcharges against an ex-IRS officialfor contempt of Congress.A4U.S. employers are set to ex-haust a quota for skill-based vi-sas, making a lottery likely. A3

The EU is preparing tomove against Google in

the next few weeks, setting thestage for charges against theU.S. Internet-search giant in afive-year antitrust probe. A1McDonald’s plans to raisewages by over 10% for workersat U.S. restaurants it operates,a fresh sign of increasing wagepressure in the labormarket.A1 A federal judge ordered Al-legiant pilots to halt a plannedstrike that threatened to dis-rupt travel for thousands. B1 U.S. manufacturers werehampered last month bywinter weather and a strongdollar, the ISM reported. A2 Stocks began the secondquarter with a loss on weakeconomic data. The Dow shed77.94 points to 17698.18. C4 Auto sales in the U.S.rose slightly in March over ayear earlier, with Toyotapressing Detroit rivals. B3 The SEC gave a boost towhistleblowers in a settlementwith KBR over restrictiveemployment agreements. C1 Foreign-exchange volatilitylikely boosted profits in bigbanks’ trading units lastquarter, analysts say. C1Prosecutors are looking at apresentation organized by Ack-man on Herbalife’s China oper-ations as part of a probe intopotential stockmanipulation.C1 The CFTC sued Kraft andMondelez over alleged manip-ulation of wheat prices. C1A revived RadioShackwilldebut later this month underStandard General ownership,with an assist from Sprint. B1

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McDonald’s Corp. plans to raisewages by more than 10% for work-ers at U.S. restaurants it oper-ates—fresh evidence of the risingwage pressure in the American la-bor market.

Starting July 1, McDonald’s willpay at least $1 an hour more thanthe local minimum wage for em-ployees at the roughly 1,500 res-taurants it owns in the U.S.

The move follows similar ef-forts by other major U.S. employ-ers includingWal-Mart Stores Inc.,which is raising hourly pay for500,000 workers to at least $10next year, and reflects wider pub-lic pressures over income inequal-ity as well as intensifying competi-tion for low-skilled workers.

The increase doesn’t apply toemployees of franchisees, whichoperate nearly 90% of the 14,350

Please see WAGES page A2

BY ANNIE GASPARROAND ERIC MORATH

To Avoid Duplicates on Prom Night,Shops Say ‘No’ to the Dress

i i i

Stores won’t sell two of the same gownsfor teens’ big dance; tears, threats

“To have someone wear thesame dress, it would be embar-rassing for both of you,” saysAdriana.

Dress registries are the newnorm for dance-goingteenagers from NewYork to California.Many formalwearstores offer registriesas an extra level ofservice that they saybuilds loyalty andhelps differentiatethem from competi-tors, including depart-ment stores. Someteens start their ownregistries using Face-book and Instagram.

The need for theseregistries, both shopowners and teens say,

is the result of pressure from so-cial media and the outsize celeb-rity influence of Hollywood and

Please see PROM page A12

Prom is still a few weeksaway for Adriana Romano. Butthe 16-year-old already knowsthat when she walksinto the Sayre AreaHigh School gymna-sium in Sayre, Pa., onApril 25 that no oneelse will be wearingher dress, a strapless,bejeweled champagne-colored mermaidgown with a blacktulle overlay.

That is becauseBonjulies, the formal-wear boutique whereAdriana and her mompurchased the gown,won’t sell the dress toone of Adriana’s class-mates. The shop keeps a registryof the styles it sells to ensure notwo dresses are sold for thesame event.

BY ELIZABETH HOLMES

Adriana Romano

McDonald’sTo Raise PayIn Its Stores,JoiningOthers

Iraqi Forces Root Out Militants After Declaring Victory in Tikrit

CAPTURED: A member of Iraqj security forces beats an insurgent Wednesday after the strategic city was retaken with help from Shiite militias. A6

LIQUIDITY STRATEGY: Gov. Jerry Brown ordered a crackdown on waterusage as the state’s long-running drought reached crisis mode. A3

Two Sigma is part of a new frontier in comput-erized investing, in which scientists and engineerswith little formal financial training are trying tofunnel massive computing power into predictingsecurities prices by drawing from clues in newsand data.

“The secret of the markets is they can be pre-dicted,” says Alexander Migdal, a former Sovietphysicist in Princeton, N.J., who writes algorithmsto predict securities prices based on a broad set ofdata, such as news feeds. “Not 100%, of course, butjust enough to make a difference, to make a profit.”

The approach is a form of so-called quantita-tive investing, because its trades rely mainly onmathematical models. But its practitioners differfrom traditional “quants,” who program theircomputers to bet on statistical relationships

Please see PREDICT page A12

NEW YORK—In SoHo offices where robotsoccasionally ply the hallways, dozens of Ph.D.scientists with degrees in fields like astro-physics, immunology and linguistics huddleevery day around computer screens that showbillions of dollars zapping around the world.

Their goal: to give their secretive hedge-fund firm a leg up in investing the $24 billionit has under management. Scientists at thefirm, Two Sigma Investments LLC, programits machines to cull torrents of informationfrom sources like newswires, earnings re-ports, weather bulletins and Twitter.

They then write trading algorithms thatmake stock picks based on what they call“signals” in those data.

BY BRADLEY HOPE

DJIA 17698.18 g 77.94 0.4% NASDAQ 4880.23 g 0.4% NIKKEI 19034.84 g 0.9% STOXX600 398.52 À 0.3% 10-YR. TREAS. À 19/32 , yield 1.866% OIL $50.09 À $2.49 GOLD $1,208.10 À $25.00 EURO $1.0764 YEN 119.75

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Landing the BestFares OnlinePERSONAL JOURNAL | D1

Jason GayFootball’sFull-Year Press

SPORTS | D6

COMPUTERS TRAWLSEAOF DATA FOR STOCK PICKSFundsmanaging billions hunt for investment clues in newswires, weather, Twitter

The White House began dis-cussing its options in case offailure to reach a nuclear dealwith Iran as faltering talksfueled criticism of President Ba-rack Obama’s negotiating strat-egy.

Iranian officials and Secretaryof State John Kerry continuedtheir quest for an agreement inthe Swiss city of Lausanne. ButAmerican lawmakers seized onthe lack of progress lateWednesday to renew calls fortough new sanctions.

The White House said Mr.Obama is prepared to walk awayfrom the negotiations. Alterna-tives to diplomacy include stiffereconomic sanctions, military ac-tion or an extension of the in-terim agreement with Iran thatexpires June 30, the WhiteHouse said—exactly the type ofmeasures that the Obama ad-ministration has said the talkswere intended to avoid.

“In the unfortunate circum-stance that we could find our-selves in, which is that we’re notable to reach an agreement, thenthe president will have to con-sider that range of options,”White House press secretaryJosh Earnest said.

The six world powers negotiat-ing with Iran missed the deadlineTuesday night to conclude a

Please see TALKS page A6

By Jay Solomon andLaurence Norman inLausanne, Switzerland

and Carol E. Leein Washington

Europe’s competition regula-tor is preparing to move againstGoogle Inc. in the next fewweeks, a person familiar with thematter said Wednesday, settingthe stage for charges against theU.S. Internet-search giant in a

BY TOM FAIRLESS IN BRUSSELS ANDALISTAIR BARR IN SAN FRANCISCO

five-year-old investigation thathas stalled three times andsparked a political firestorm.

The European Commission,the European Union’s top anti-trust authority, has been askingcompanies that filed complaintsagainst Google for permission topublish some information theypreviously submitted confiden-tially, according to several peo-ple familiar with the requests.Shopping, local and travel com-panies are among those thathave been contacted, one ofthose people said.

Antitrust experts said the re-

quests were a strong indicationthat formal antitrust chargeswere being prepared.

A decision to file chargesagainst Google would kick off theEU’s highest-profile antitrustsuit since its lengthy campaignthat started a decade ago againstMicrosoft Corp., which paid thebloc €1.7 billion ($1.8 billion) infines through 2012.

A settlement in Google’s caseis always possible. Even if the EUpresses ahead with charges,Google could still strike a deal toresolve the bloc’s concerns thatthe company abuses its domi-

nance in the European searchmarket.

In addition to search, thecommission has been investigat-ing whether Google has been“scraping” content from rivals’sites, and unfairly restricting ad-vertisers and software develop-ers who do business with thesearch giant. A draft conclusionprepared in March 2013 by theEuropean Commission took the“preliminary view” that Google

Please see GOOGLE page A8

EU Girds for Move on GoogleU.S. search giant facesprospect of chargesfrom 5-year probeof antitrust concerns

California to Restrict Water Use

Week of Dec. 27, 2011Start of current drought

Week of March 24, 2015Latest drought situation

Drought intensity:Moderate Severe Extreme ExceptionalAbnormally dry

SanFrancisco

SanFrancisco

San Diego

Los Angeles

Sacramento

Fresno

San Diego

Los Angeles

Sacramento

Fresno

THEWALL STREET JOURNAL.Source: U.S. Drought Monitor

37 millionPeople livingunder droughtconditions

57,648People livingunder droughtconditions

Saudi-led bombing stokes ire inYemen................................................. A6

Beijing looks to clean upe-commerce...................................... B1

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