By Steve Holland and Jeff Mason

  WASHINGTON (Reuters) - Al Qaeda leader Osama bin Laden was killed in a firefight with U.S. forces in Pakistan on Sunday, President Barack Obama announced, ending a nearly 10-year worldwide hunt for the mastermind of the September 11 attacks.

  " Justice has been done," Obama said in a hastily called, late-night White House speech revealing the death of the elusive head of the militant Islamic group behind a series of bloody attacks in cities across the world.

  His death, confirmed by officials in Pakistan, was a huge symbolic blow to al Qaeda, which has been beaten back but is still a threat in many countries.

  It prompted jubilant flag-waving celebrations in Washington and New York. It was the biggest national security victory for Obama since he took office in early 2009 and could give him a political boost as he seeks re-election in 2012.

  Obama may now find it easier to wind down the nearly decade-old war in Afghanistan, begun after the September 11, 2001, attacks on New York and Washington that killed nearly 3,000.

  But the operation could complicate relations with Pakistan already frayed over U.S. drone strikes in the west of the country and the jailing of a CIA contractor accused of killing two Pakistani men.

  Obama said U.S. forces led a targeted operation that killed bin Laden in a compound in Abbotabad north of Islamabad. No Americans were killed in the operation and they took care to avoid civilian casualties, he said.

  A senior administration official said it was believed that three adults besides bin Laden were killed, including an adult son of bin Laden.

  Bin Laden's death triggered a travel alert for Americans worldwide, the U.S. State Department said, warning of the potential for anti-American violence.

  Thousands of people gathered outside the White House, waving American flags, cheering and chanting " USA, USA, USA." Car drivers blew their horns in celebration and people streamed to Lafayette Park across from the street, as police vehicles with their lights flashing stood vigil.

  " I'm down here to witness the history. My boyfriend is commissioning as a Marine next week. So I'm really proud of the troops," Laura Vogler, a junior at American University in Washington, said outside the White House.

  Similar celebrations erupted in New York's Ground Zero, site of the World Trade Centre twin towers felled by hijacked airplanes on September 11.

  Many Americans had given up hope of ever finding bin Laden after he vanished in the mountains of Afghanistan in late 2001.

  Intelligence that originated last August provided the clues that eventually led to bin Laden's trail, the president said. A U.S. official said Obama gave the final order to pursue the operation last Friday morning.

  " The United States has conducted an operation that killed Osama bin Laden, the leader of al Qaeda and a terrorist who is responsible for the murder of thousands of men, women and children," Obama said.

  CAPTURED DEAD

  Former President George W. Bush, who vowed to bring bin Laden to justice " dead or alive" but never did, called the operation a " momentous achievement" after Obama called him with the news.

  Martin Indyk, a former U.S. assistant secretary of state for near eastern affairs, described bin Laden's death as " a body blow" to al Qaeda at a time when its ideology was already being undercut by the popular revolutions in the Arab world.

  Other experts were more cautious. " It changes little in terms of on-the-ground realities -- by the time of his death bin Laden was not delivering operational or tactical orders to the numerous al Qaeda affiliates across the world," said Rick Nelson of the Centre for Strategic and International Studies in Washington.

  Statements of appreciation poured in from both sides of Washington's often divided political divide. Republican Senator John McCain declared, " I am overjoyed that we finally got the world's top terrorist."

  Said former President Bill Clinton: " I congratulate the president, the national security team and the members of our armed forces on bringing Osama bin Laden to justice after more than a decade of murderous al Qaeda attacks."

  Having the body may help convince any doubters that bin Laden is really dead.

  The United States is ensuring that bin Laden's body is being handled in accordance with Islamic practice and tradition, a U.S. official said.

  Bin Laden had been the subject of a search since he eluded U.S. soldiers and Afghan militia forces in a large-scale assault on the Tora Bora mountains of Afghanistan in 2001.

  The trail quickly went cold after he disappeared and many intelligence officials believed he had been hiding in Pakistan.

  While in hiding, bin Laden had taunted the West and advocated his militant Islamist views in videotapes spirited from his hideaway.

  Besides September 11, Washington has also linked bin Laden to a string of attacks -- including the 1998 bombings of American embassies in Kenya and Tanzania and the 2000 bombing of the warship USS Cole in Yemen.

  (Additional reporting by Patricia Zengerle, Arshad Mohammed, Alister Bull, Missy Ryan, Mark Hosenball, Richard Cowan, Kristin Roberts, Andrew Quinn and Tabassum Zakaria Writing by Steve Holland editing by David Storey and Philip Barbara)

* Kimberly-Clark, Johnson Controls down after outlooks

  * Major European markets closed for Easter weekend

  * New home sales up more than expected, prices fall

  * Indexes: Dow, S& P down 0.2 pct, Nasdaq up 0.02 pct

  * For up-to-the-minute market news see (Updates to midday, changes byline)

  By Ryan Vlastelica

  NEW YORK, April 25 (Reuters) - U.S. stocks fell on Monday on signs some corporate outlooks were being strained by inflation concerns, including consumer products maker Kimberly-Clark Corp.

  The market's decline in a low-volume session followed some strong earnings last week, which helped pushed the Dow to a high for the year. The S& P 500 has moved to the top end of its recent trading range where it is facing resistance.

  Of S& P 500 companies that have reported, 75 percent beat analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

  " Generally numbers have come in much better than expected so far this season, on both the top and bottom line," said Eric Green, senior portfolio manager at Penn Capital Management in Philadelphia.

  " But everyone is watching margins because of the energy price situation," he said.

  Both Kimberly-Clark and Johnson Controls Inc tumbled after weak forecasts. Kimberly fell 3.5 percent to $63.71 after cutting the low end of its full-year outlook, while Johnson said its third-quarter would be hit by the earthquake in Japan, sending the stock down 3.5 percent to $39.32.

  The Dow Jones industrial average was down 55.97 points, or 0.45 percent, at 12,450.02. The Standard & Poor's 500 Index was down 5.49 points, or 0.41 percent, at 1,331.89. The Nasdaq Composite Index was down 6.34 points, or 0.22 percent, at 2,813.82.

  The CBOE VIX volatility index rose 8.7 percent after falling last week to its lowest level since 2007.

  Kimberly-Clark is one of the companies most exposed to rising commodity costs because its products contain oil-based materials and paper.

  RadioShack Corp fell to $15.64, down 1.2 pct, after the electronics retailer reported a first-quarter profit that fell from the prior year and sales that were below consensus.

  For more earnings news, see http://r.reuters.com/dup98r

  On the upside, SanDisk Corp rose 3 percent to $50.48 in its first session after raising its 2011 margin outlook late on Thursday.

  This week is another hectic one for earnings with 180 S& P 500 companies set to report, including Amazon.com, Coca-Cola Co, Microsoft Corp and Exxon Mobil Corp.

  The U.S. Federal Reserve is meeting this week and will hold the first of four press conferences per year on Wednesday. Investors are looking for clues about the direction of monetary policy when the Fed's bond buying program ends in June.

  " There are some nerves ahead of that meeting, which could result in some profit taking before then," Green said.

  Traders noted that activity would likely be subdued as many major European markets remain closed over the long Easter weekend. About 2.07 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq as of midday, below average for this point in the session. (Additional reporting by Edward Krudy Editing by Kenneth Barry)

* Fed expected to finish QE2, then hang on to its bonds

  * FOMC meets mid-week Bernanke to hold news conference

  * Fed bought $7.4 bln maturing 10/2016 to 3/2018

  * Auctions of 2-, 5-, 7-year notes set for this week

  (Adds Fed purchase, updates prices)

  By Ellen Freilich

  NEW YORK, April 25 (Reuters) - U.S. government debt prices rose on Monday, helped by the view that even as Federal Reserve approaches the end of its second phase of bond buying, it will hold on to its portfolio -- and thus its current level of monetary accommodation -- for some time.

  The Fed is still in the second phase of quantitative easing, known as QE2, a $600 billion bond purchase program intended to help spur economic growth.

  Bonds reached session highs after the Fed bought $7.24 billion in Treasuries maturing October 2016 to March 2018.

  Stock market losses also made bonds look more appealing.

  Markets expect the Fed to complete its QE2 purchases by mid-year, and many analysts say the Fed will hold the size of its balance sheet steady by reinvesting maturing assets after June to avoid a passive tightening -- an issue likely to be discussed at its April 26-27 meeting.

  Fed policy makers who favor accommodation " seem to be in the lead, which leads us to expect no substantial shift in the (policy) statement," from the central bank's two-day meeting this week, said David Ader, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.

  The Fed policy meeting ends on Wednesday with a news conference with Fed Chairman Ben Bernanke.

  Benchmark 10-year notes rose 11/32 in price, their yields easing to 3.37 percent from 3.41 percent on Thursday. The market was closed on Friday for a holiday.

  " (There's a) fundamental bias that the data is indeed slowing and higher gas prices will take their toll on the consumer," Ader said.

  Data on Monday showed new U.S. single-family home sales increased more than expected in March, but there was little immediate reaction in bond prices.

  Other economic reports likely to evoke somewhat muted market reaction this week include consumer confidence, durable goods and the Chicago purchasing managers index.

  The Treasury's three note auctions, further refinements of monetary policy expectations, and a first report on U.S. first-quarter gross domestic product growth, however, could add some volatility to the week's trading.

  Supply from Treasury note auctions totaling $99 billion -- $35 billion in two-year notes on Tuesday, $35 billion in five-year notes on Wednesday, and $29 billion in seven-year notes on Thursday -- will be partially offset by $52.6 billion in maturing debt, leaving $46.4 billion of net cash needs, Ader said. Four Fed buybacks, month-end demand, and a persistent short-base should also support prices, he said.

  Bond prices even seem to reflect some of the longer-term fiscal challenges the United States faces.

  " The market reaction to the S& P outlook revision suggested that investors had already gone a good way toward pricing in the fiscal difficulties in the United States," said Robert Tipp, chief investment strategist for Prudential Fixed Income, the latter with $240 billion in assets under management.

  In that context, a move that pushes 10-year yields through the recent 3.34 percent low toward the 3.25 percent range-bottom is achievable, Ader said.

  Still, analysts said the technical landscape was broadly constructive with momentum favoring lower yields, albeit nearing overbought levels.

  The 10-year chart shows volume built near the 3.40 percent level, which is also near the 3.41 percent 30-day moving average and a focal point, Ader said.

  (Editing by Padraic Cassidy)

* Regional big caps pull back in subdued trade

  * Thai developers surge on government measures

  * Market investors await U.S. Fed meeting this week

  By Viparat Jantraprap

  BANGKOK, April 25 (Reuters) - Major Southeast Asian stock markets were flat to lower on Monday, led by regional big-caps in cautious trading ahead of the U.S. Federal Reserve's meeting this week.   ( continue to print more money QE 3 comin soon !!)

  Investors appeared wary of increasing exposures in risky assets. Turnover in Malaysia dropped to one-third of the 30-day average, with volume of Thailand and Indonesia each around 0.8 times the average.

  " News flows are light and we don't have a lot of leads from overseas. People are watching the Fed's meeting for signs of whether it will tighten policy," said Chaiyaporn Nompitakcharoen, head of research at Bualuang Securities in Bangkok.

  Most regional indexes were holding in a range and not straying from highs set last week. Singapore's Straits Times Index inched down 0.2 percent, just a shy of three-month highs.

  Indonesia's index eased 0.3 percent, slightly coming off an intraday record peak. Malaysia's main index eked out slim gains and the Thai SET index ended nearly unchanged not far from its 15-year highs.

  The Philippine index climbed 1.3 percent to the highest in almost six months and Vietnam jumped 2 percent to a one-month high.

  Asian stock markets were sluggish as they reopened after the long Easter weekend, with the MSCI Asia ex-Japan nearly unchanged by 1017 GMT.

  Markets are looking to a news conference by Federal Reserve Chairman Ben Bernanke on Wednesday after the bank's two-day policy meeting to see how the central bank plans to exit from its super-easy monetary policy.

  " With investors now expecting the Fed to raise rates late this year at the earliest, fund flows tend to favour Asia in the second quarter," said Bualuang's Chaiyaporn.

  Southeast Asia reported further foreign inflows on Monday, continuing from late last week. Indonesia took in $25.2 million inflows, according to Thomson Reuters data. Malaysia added $12.3 million and Thailand gained $25.7 million, exchange data showed.

  Among bright spots, Thai low-end housing developers advanced thanks to a government low interest-rate package aimed at helping low income earners, led by a 8.3 percent surge in Pruksa Real Estate . [ID:nSGE7311] and [ID:nB7E7F803O]

  Investors took profits on recent rallying big-caps, pulling Thailand's third-largest bank, Kasikornbank , down 0.8 percent and Indonesia's biggest firm, Astra International , off 1.6 percent.

  Among losers, Singapore shopping mall owner CapitaMalls Asia fell 2.7 percent after it reported worse-than-expected quarterly earnings. For Asian Companies click For Asia-Pacific News click For South East Asia Hot Stock reports, click

(Refiling to add dropped word to first paragraph)

  WASHINGTON, April 25 (Reuters) - New U.S. single-family home sales increased more than expected in March and the supply of new houses on the market hit their lowest since August 1967, a government report showed on Monday, but prices fell from a year ago.

  The Commerce Department said sales rose 11.1 percent to a seasonally adjusted 300,000 unit annual rate, after an upwardly revised 270,000 unit pace in February.

  Economists polled by Reuters had forecast new home sales climbing to a 280,000-unit pace last month from a previously reported record low 250,000 unit rate. (Reporting by Lucia Mutikani Editing by Neil Stempleman)

* Brent crude oil rises above $124

  * Major European markets closed for Easter weekend

  * Indexes: Dow, S& P down 0.1 pct, Nasdaq up 0.02 pct (Updates to open)

  By Edward Krudy

  NEW YORK, April 25 (Reuters) - Wall Street stocks were little changed on Monday near three-year highs after recent strong earnings, although surging oil prices pressured stocks in what was likely to be a low volume day, with major European markets closed.

  Of S& P 500 companies that have reported, 75 percent beat analysts' expectations. That is just above the average over the past four quarters but well above the average of 62 percent since 1994, according to Thomson Reuters data.

  The Dow hit a high for the year last week and is trading near a three-year high. The S& P 500 has moved to the top end of its recent trading range where it is facing resistance at its last high for the year.

  Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, said higher oil prices were offsetting the positive momentum from earnings. He said the market could give up gains as the day progresses. " I could see some profit-taking after the advance we've had," he said.

  Brent crude oil rose above $124 a barrel, pushed higher by an escalation of violence in the oil-producing Middle East, as well as post-election unrest in OPEC member Nigeria.

  This week is another hectic one for earnings with 180 S& P 500 companies set to report their quarterly scorecard.

  Among companies reporting on Monday, RadioShack Corp's quarterly profit fell due to weakness in its T-Mobile business and higher costs related to the roll-out of its wireless kiosks in Target stores. The shares fell 1.7 percent to $15.59.

  The Dow Jones industrial average slipped 16.88 points, or 0.13 percent, to 12,489.11. The Standard & Poor's 500 Index fell 1.46 points, or 0.11 percent, to 1,335.92. The Nasdaq Composite Index gained 0.49 point, or 0.02 percent, to 2,820.65.

  (Editing by Kenneth Barry)

  * Dollar seen under pressure if Fed decision disappoints

  * Japanese importers' bids help lift dollar

  * Aussie hits 29-year peak on rising commodity prices (Updates prices, adds quotes, graphic, changes byline, dateline, previous TOKYO)

  By Julie Haviv

  New York, April 25 (Reuters) - The dollar fell further against the euro on Monday and could test its all-time low against a basket of currencies this week if the U.S. Federal Reserve shows no sign of changing its easy monetary policy.

  With many markets closed for Easter and no major U.S. economic reports on the calendar, the April 26-27 Federal Open Market Committee meeting will be the key event risk this week as traders try to gauge the direction of U.S. policy.

  Market participants will look to the post-meeting news conference by Fed Chairman Ben Bernanke on Wednesday -- the first regularly scheduled news briefing by a Fed chief in the U.S. central bank's 97-year history -- to see how the Fed plans to exit from its ultra-loose policy.

  " The bond and currency market reaction is still an unknown and a significant risk," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto.

  The dollar index, which measures the currency's value against six major currencies, traded flat at 73.972 but many trader says it could test a three-year low of 73.735 hit last week. A break of that could open the way for a test of the record low of 70.698 hit in 2008.

  Nevertheless, currency speculators pared bets against the U.S. dollar for a fourth straight week, according to data from the Commodity Futures Trading Commission released Friday.

  The Fed is expected to confirm its $600 billion asset purchase program known as QE2 will end as scheduled in June. The program is a bane for the dollar since it is tantamount to printing money, so an indication that it may end it earlier would be a positive for the beaten-down currency.

  Once QE2 concludes there will be some upward pressure on yields however, with U.S. monetary policy still notably weak, an extended dollar rally is not likely, Sutton said.

  " This is the medium-term risk the near-term risk lies in the wording of the statement, any shift in tone, the press conference itself and the FOMC's updated set of forecasts," she said.

  In early morning New York trade the euro was up 0.3 percent at $1.4604, not far from a 16-month high of $1.4649 hit last week.

  With interest rate differentials a prime driver of currencies, the dollar will also benefit if the Fed turns more hawkish in light of growing inflationary pressures.

  If Bernanke indicates that the Fed's accommodative policy may continue for the foreseeable future, the dollar will likely see selling pushing the EUR/USD towards the key $1.5000 figure, strategists said.

  The Australian dollar, meanwhile, rose to a fresh 29-year high of $1.0777 as gold and commodities prices continue to rise, before slipping back. It last traded at $1.0734.

  Gold hit a lifetime high well above $1,500 an ounce while silver surged 4 percent on the U.S. futures market.

  A combination of upbeat global growth, signs of weaker U.S. growth and the prospect of dovish Fed policy is expected to support fund flows to higher-yielding currencies such as the euro and the Australian dollar from the U.S. unit, traders said.

  " I doubt there's much dollar carry trade out there but when market players are eager to take risk, they tend to look to interest rate gaps on speculation that the dollar could be used as a funding currency," said Kimihiko Tomita, the head of foreign exchange at State Street Capital Markets.

  Against the yen, the dollar ticked up 0.1 percent to about 81.92 yen, helped by expectations of Japanese investor buying, including by asset management firms which tend to launch new investment trusts at the end of the month.

  USDJPY has weakened from roughly 85.50 since early April with recent support seen just below 82, Scotia's Sutton said.

  Some analysts say worries about rising U.S. debt and political bickering in Washington over how to tackle the budget deficit are also undermining the dollar, making it easier for speculators to sell the currency, although there is no evidence that foreign investors are dumping U.S. assets. (Additional reporting by Gertrude Chavez Dreyfuss in New York and Hideyuki Sano in Tokyo Editing by James Dalgleish)

* Unveiling new Wii at E3 game expo in June in U.S.

  * Wii sales fall to 15.1 mln from 20.1 mln in 2010/11

  * Stock to be under pressure on results, forecast-analyst (Rewrites fourth paragraph)

  By Isabel Reynolds

  OSAKA, Japan, April 25 (Reuters) - Nintendo Co Ltd said it would launch a successor to its aging Wii game console in 2012 as it struggles to win back users from rivals Microsoft and Sony and seeks to reverse a slump in profits.

  Nintendo said Monday that it expects profits to remain almost flat in the current financial year, despite the launch of its much-touted 3D-capable handheld games device, whose sales in Japan have been overshadowed by the devastating March 11 earthquake.

  The maker of the DS handheld game player, which is also facing competition from smartphone and tablet makers including Apple Inc, said Monday it will demonstrate the Wii's replacement in Los Angeles on June 7 at the E3 game show.

  Nintendo is looking to repeat past successes in the gaming market. The Wii took the industry by storm five years ago by offering motion-based gaming that appealed to a broad audience rather than just " core" video game fans.

  This time around, however, Nintendo will find it harder to sidestep its competitors and must also contend with a burgeoning smartphone market that didn't exist in 2006, said Mitsushige Akino, Chief Fund Manager at Ichiyoshi Investment Management.

  " Core users and game lovers will certainly buy it, but I think it will be hard to capture buyers outside of that group," he said.

  Monday, the company revealed quarterly profit of just 12 billion yen, down from 59.9 billion yen a year earlier, as it slashed prices and the strong yen hurt the value of its sales abroad. Having sold 86 million units of the Wii since its launch in 2006, sales last business year slipped by a quarter to 15 million.

  " We believe that the share price will come under pressure as the market digests the weak Q4 results and company projection for the year to March 2012," analyst Jay Defibaugh of MF Global said in a research note.

  Nintendo sees first half profit for the current financial year down more than 63 percent on the previous year, with a bounce back in the second half.

  Nintendo declined to provide further details on the Wii successor.

  " We have decided that it is best to let people experience it for themselves at E3," Nintendo CEO Satoru Iwata, told a news conference.

  " It will offer a new way of playing games within the home," said Iwata, a former game designer.

  In another transition to new-generation hardware, Nintendo this year launched a glasses-free 3D-capable handheld games device, the 3DS, to fend off growing competition from other games companies, as well as makers of smartphones and tablets.

  It must also contend with Microsoft and Sony which have brought new products to the market since the Wii's debut.

  In March, Microsoft said it had sold more than 10 million Kinect motion-sensing game system units worldwide in just over four months, making it the fastest-selling consumer device on record. The infrared camera add-on for the Xbox game console tracks body gestures for video games. Sony's rival motion sensing device is dubbed Move.

  DECLINING SALES

  In the business year just ended, Wii console sales fell to 15.1 million units from 20.1 million a year earlier. It expects sales to fall by a further 2 million units this business year.

  Sales of its non-3D handheld DS shrank by almost 10 million units to 17.5 million, and the company expects that to slide to 11 million this year.

  Nintendo's operating profit fell 52 percent to 171.1 billion yen ($2.09 billion) in the year ended in March from 356.8 billion yen the previous year, below a Thomson Reuters SmartEstimate of 200.8 billion yen.

  SmartEstimates put more weight on recent forecasts by highly rated analysts.

  Nintendo expects operating profit of 175 billion yen for the year to March 2012, compared with a consensus of 215.8 billion yen, based on eight analysts polled by Thomson Reuters I/B/E/S after the March 11 disaster.

  Nintendo shares closed up 0.9 percent ahead of the earnings report in a flat broader market. ($1 = 81.845 Japanese Yen) (Writing by Anshuman Daga and Tim Kelly Editing by Lincoln Feast and Nathan Layne)

* S-LCD to cut capital by $555 mln

  * Move reflects faltering TV sales at Sony-analysts

  * Samsung shares fall 1.7 pct, Sony down 0.4 pct (Corrects typo in paragraph 2)

  SEOUL, April 25 (Reuters) - S-LCD, a flat screen joint venture between Sony Corp and Samsung Electronics , said it would reduce capital by $555 million, as Sony struggles with perennial losses from its TV business and Samsung seeks to shift to a new type of display.

  The global liquid crystal display (LCD) market is struggling with faltering demand, with some analysts forecasting the $100 billion LCD TV industry had already peaked last year and would shrink by 3-4 percent annually, as consumers in advanced countries have already traded their bulky tube TV sets to flat screens.

  LCD is widely expected to give way to new displays such as energy-efficient active matrix organic light-emitting diode (AMOLED), which is increasingly used in high-end smartphones and tablets and touted as a future large-sized TV display.

  In a statement on Monday, S-LCD, which supplies panels to Samsung and Sony, said the move was aimed at improving its capital structure.

  The 50-50 LCD joint venture announced its first capital reduction of 600 billion won ($555 million) after more than tripling its capital to 3.9 trillion won since Sony and Samsung formed the venture in 2004 with 1.26 trillion won to ensure smooth supply of flat screens for Sony.

  " The decision reflects shrinking demand from Sony after the devastating earthquake in Japan last month and the sector's overall shift in focus to OLED display," said Kim Sung-in, an analyst at Kiwoom Securities.

  " Sony has bought around 1.1-1.2 million units of LCD panels every month from the venture but it can't buy that much any more due to weak sales in Japan. With the overall demand for LCD displays set to shrink further, Samsung and Sony are likely to gradually wind up the business and focus instead on OLED," Kim said.

  Sony will not raise its stake in a separate LCD venture with Sharp Corp for at least a year, a Sony source said last week, a move that reflects the industry's growing caution over growing exposure to the LCD industry, which has been in a glut since last summer. [ID:nL3E7FJ03K]

  Sony needs to slash costs as it heads for a seventh straight year of losses in its TV business. Highlighting soft demand from TV makers, Philips Electronics said this month it would transfer its TV business into a joint venture with TPV Technology .

  Since the March 11 earthquake, six analysts have lowered Sony's operating profit estimates for the year to March 2012 by 19 percent on average, according to Thomson Reuters I/B/E/S, as Sony considers a complete two-week summer shutdown of some company premises due to Japan's power shortages. [ID:nL3E7FE08T] [ID:nL3E7FL0P4]

  On Friday, Samsung is expected to report its quarterly profit had dropped to nearly a two-year low as its LCD business is widely expected to report a loss for January-March. [ID:nL3E7F602O] [ID:nL3E7FE02P]

  Panel makers have reduced production after the powerful earthquake on March 11 but demand from TV and computer makers is too weak to absorb even lowered supplies, sending prices of large-sized LCD panels down more than one third over the past year.

  S-LCD said it would cancel 120 million shares to reduce equity capital by 600 billion won to 3.3 trillion won, after having had strong cash flow last year.

  The company reported 11.4 trillion won in 2010 revenue and 204.6 billion won of net profit, up more than 12 times from 16.4 billion won a year ago, resulting in 747 billion won of positive cash inflow last year alone.

  Samsung, the world's top LCD maker, is planning a 5.4 trillion won investment each in LCD and AMOLED this year.

  Shares in Samsung, Asia's most valuable technology company with $136 billion in market value, closed down 1.7 percent and Sony fell 0.4 percent on Monday. ($1 = 1081.050 Korean Won) (Reporting by Miyoung Kim Editing by Anshuman Daga)

DUBAI (Reuters) - OPEC members with spare capacity are ready to pump above agreed limits if there is a need, but the producer group is unlikely to formally change output targets at a meeting in June, Gulf delegates told Reuters on Monday.

  Top producer Saudi Arabia in February raised output above 9 million barrels per day (bpd), around a million bpd more than its OPEC output limit, in response to supply disruption in OPEC member Libya that drove oil prices to their highest since the record rally of 2008.

  But in March, Saudi Arabia scaled back to around 8.3 million bpd, citing oversupply and weaker demand in part because of the earthquakes and nuclear catastrophe in Japan. Its April production figures are not yet public.

  " Floating stocks are higher, and with weaker demand from Japan that led to the cut in Saudi production, as of now it's unlikely that quotas will be changed in June, but Saudi is still ready to supply the market," one Gulf delegate told Reuters.

  " Increasing production is a sovereign issue for Saudi, and it's been said over and over again that Saudi is ready to fill any supply gap," said another Gulf OPEC delegate.

  Saudi's fellow Gulf producers -- including the United Arab Emirates and Kuwait which also hold spare capacity that can be quickly added to the market -- joined it in increasing output earlier this year.

  " This is proof that Gulf countries are ready to act when extra supply is needed and this will always be the strategy even if there is no change in quotas," the delegate said further.

  The delegate did not make clear whether the other Gulf states followed Saudi Arabia's lead in reducing supply after the initial increase.

  OPEC last formally discussed output policy in December and is not scheduled to do so again until June. Members have ruled out holding an emergency meeting before then, even though governments in consumer countries are facing domestic pressure because of high fuel prices.

  Brent prices rose above $124 a barrel on Monday, driven by the ongoing violence in Libya and an escalation of unrest in Syria, which has some oil and has raised concerns in the market of more widespread turmoil.

  OPEC members have repeatedly said the oil market is driven by fear and speculation rather than any shortage of oil.

  " There is no good reason for prices to be where they are right now. If you look at the fundamentals you'll see that the market is oversupplied and demand is not that strong. This is just misinformation," said a third Gulf OPEC delegate.

By Jack Kim

  SEONGNAM, South Korea (Reuters) - South Korea's ruling conservatives face a handful of crucial by-elections on Wednesday as their party seeks to keep its business-friendly policies on track and prevent a resurgent opposition from a clean-sweep of victories.

  Support for President Lee Myung-bak and his Grand National Party (GNP) has declined sharply since the start of the year over ditched plans for a new international airport and squabbling about how to rein-in inflation.

  This week's three by-elections are being closely watched as the last ballots ahead next year's presidential and parliamentary elections. A GNP shutout could force a cabinet reshuffle as the government tries to regain credibility.

  " If the GNP loses the two parliament seats, the leadership will be hard pressed to continue with the status quo," said Yu Chang-sun, an independent political analyst. " The party and the Blue House will likely be headed for a conflict."

  While the results will not directly impact policymaking in Asia's fourth largest economy or unseat Lee, who has another 22 months in office, opinion polls show a growing number of South Koreans are not happy with the way the country is being run.

  Lee's popularity has fallen from nearly 50 percent late last year when he hosted a G20 summit of world leaders to about 30 percent last week. Opinion polls show that support for Lee's party is also falling.

  Support for the main opposition Democratic Party has jumped around 5 percent since late last year, and overall the liberal parties now lead the two main conservative parties by 4 percentage points, the latest poll from Realmeter, a leading pollster, shows.

  Yu said the ruling party could be headed for a showdown between Lee and the GNP elite over the president's drive to keep his pro-growth policy on track at a time when inflation has surged to a 29-month high, hitting poorer voters.

  One of the GNP's best known figures and frontrunner for the presidential nomination, Park Geun-hye, has distanced herself from this month's campaigning after publicly criticising the monetary policy of the central bank governor, a Lee ally.

  The GNP will contest only two of this week's by-elections, foregoing a run in the third because it is a liberal stronghold.

  Democrats leader Sohn Hak-kyu, running in the traditional GNP stronghold of Bundang district south of Seoul, told Reuters that there is discontent over Lee's business policy and economic agenda that focuses on growth at the expense of containing sharp prices increases.

  Sohn has made no secret that if he wins in Bundang, he will take a shot at the presidency next year.

  Downplaying the impact of surging prices, his opponent, former GNP chief Kang Jae-sup, said inflation was an unfortunate by-product of a modern economy experiencing growth.

  " We need to make sure the benefits of growth can be felt by the working class as we go through economic development," Kang said while campaigning at a local supermarket in Seongnam.

  (Additional reporting by Jeremy Laurence Editing by David Chance and Jonathan Thatcher)

* Syria, small oil producer, stirs fear of wider turmoil

  * Dollar at 29-yr low against Australian dollar

  * Brent technicals point to upside target $127

  (Updates prices, adds OPEC comment)

  By Barbara Lewis

  RABAT, April 25 (Reuters) - Oil rose above $124 a barrel on Monday, pushed higher by an escalation of violence in the oil-producing Middle East and post-election unrest in OPEC member Nigeria.

  Brent gained 33 cents to $124.32 a barrel by 1134 GMT. U.S. crude rose 45 cents to $112.74.

  Brent is again within sight of the peak above $127 a barrel, touched earlier this month, which was the highest since 2008 when the market reached its all-time high of nearly $150 before crashing down to less than $40.

  " Traders fear a long hot summer of discontent across the Middle East," Chris Weafer, chief strategist at Moscow's Uralsib investment bank, wrote in a note.

  " News of the spreading post-election violence in the north of Nigeria is also a price-supporting factor in the oil market."

  This year's rally took off in earnest following the loss of production from OPEC member Libya, which was pumping around 1.6 million barrels per day (bpd) until the outbreak of violence, following a wave of popular unrest across the North African region.

  Early on Monday, NATO forces flattened a building in Muammar Gaddafi's compound, while forces loyal to the Libyan leader have bombarded the western rebel stronghold of Misrata, rebels said.

  Violence also racked Syria, a small non-OPEC oil producer.

  Syrian security forces were reported to have killed hundreds in a crackdown on protests, while in top African oil producer Nigeria more than 500 people were killed in post-election violence, a human rights group said.

  Oil market gains could be capped, however, by expectations high prices will begin to erode demand and limit economic growth.

  A public holiday in many countries on Monday to mark Easter was also expected to curb trading volumes.

  Leading exporter Saudi Arabia has said it has plenty of spare capacity that can be quickly added to the oil market if necessary, but its oil minister said it cut output in March because the market had plenty of oil.

  The Organization of the Petroleum Exporting Countries next meets to formally reassess its output policy in June.

  Delegates told Reuters on Monday they did not expect a formal change in supply policy at the meeting in Vienna on June 8.

  TECHNICAL LEVELS, DOLLAR EFFECT

  Apart from fundamentals of supply and demand, analysts said the market was technically strong and could draw strength from the weakness of the U.S. dollar, which makes dollar-denominated commodities relatively cheap.

  Reuters market analyst Wang Tao said Brent's next target was the high touched earlier this month of $127.02 after it cleared resistance at $124.02.

  The dollar in contrast hit another 29-year low against the Australian dollar.

  Dollar weakness also supported other commodities, pushing gold to another record.