MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Thursday, May 24
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8:03 PM Japan's core consumer price index rose 0.2% from the prior year, identical to its gain for March. Expectations were for a 0.1% rise. On a monthly basis, core CPI was also 0.2% higher, led by a 2.1% rise in clothing and footwear. Overall CPI rose 0.1%, for a 0.4% year-on-year gain. [Global & FX] 2 Comments
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7:40 PM In the face of a nasty Greek exit from the euro zone, investors have little choice now but to cling to low-yielding U.S. government debt, says Pimco's Bill Gross. Despite our own debt mess, a flight from risk assets is going to continue to send money into Treasurys. "It's what we call the cleanest dirty sheet," Gross says, "At the moment the cleanest dirty shirt is the United States." [Global & FX] 12 Comments
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7:21 PM 3D Systems (DDD) acquires Bespoke Innovations, a startup based in San Francisco, California that develops proprietary, integrated scan, design and print technology designed to deliver custom fit prosthetics, orthotics and orthopedic devices, for an undisclosed sum. The company also reafirms its forecast, saying the acquisition will not be material to its revenue for the remainder of 2012. Shares -3% AH. [Tech, Healthcare, M&A] Comment!
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7:14 PM Delcath Systems (DCTH) said it plans to sell shares of its common stock and warrants to purchase shares to raise funds to develop and commercialize its medical devices and specialty pharmaceutical products. [Healthcare] Comment!
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7:02 PM Nvidia (NVDA) claims its quad-core Tegra 3 processor has been designed into 30 smartphones. That's twice as many design wins as were claimed last year by the Tegra 2, which saw sales fizzle due to weak demand for high-end Android tablets. It's added 13 of the Tegra 3 smartphones have unsubsidized prices below $300 - that could prove important, given the high-end design wins claimed by Apple and Samsung's in-house chips, and Qualcomm's MSM8960. (earlier) [Tech] 1 Comment
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6:45 PM The E.U. will make a final ruling on June 27 regarding a $1.1B fine levied on Microsoft (MSFT) in '08 for failing to comply with an order to share information about its server OS products to guarantee networking software interoperability, and release a version of Windows that doesn't feature Windows Media Player. The ruling could have implications for Intel's (INTC) attempts to overturn a $1.33B fine levied in '09. [Tech] 2 Comments
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6:35 PM The loss of Japan's nuclear power plants is luring buyers eager for cheap U.S. shale gas, potentially enriching U.S. companies such as Sempra Energy (SRE) and Dominion Resources (D). But companies hoping to export LNG don't yet have permission from the Department of Energy to ship to countries such as Japan that lack free-trade agreements with the U.S. [Energy, Global & FX] 2 Comments
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6:31 PM H-P's (HPQ) layoffs are being conducted on the basis of salary and aren't weighing factors such as skills and performance, upset employees tell BI. It's also claimed cronyism is playing a big role in the layoff decisions. Deutsche's Chris Whitmore notes past restructurings have done little to improve's H-Ps competitive positioning, or cut its dependence on weak markets. 9K of H-P's 27K job cuts will occur this fiscal year, and result in $400M in cash charges. (more on HPQ) [Tech] 4 Comments
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6:16 PM Lehman Brothers (LEHMQ.PK) strikes a deal to buy the 26.5% stake it doesn't already own in apartment giant Archstone from BofA (BAC) and Barclays (BCS) for $1.58B, WSJ reports, ending the high-stakes chess game between Lehman and Sam Zell's Equity Residential (EQR). But Zell won't walk away empty handed, as his firm will get $150M in the deal. [Financials, M&A] 5 Comments
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6:15 PM Facebook (FB) paid over $80M to buy social gifting app developer Karma, sources tell Bloomberg Businessweek. Karma, whose purchase was announced on IPO day, could help Facebook finally turn e-commerce into a meaningful revenue stream, courtesy of affiliate fees on recommended purchases. Given the challenges Facebook's ad business is dealing with, many are hoping e-commerce turns into major a growth opportunity. [Tech, M&A] Comment!
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6:03 PM Chip contract manufacturer UMC, which has long played second fiddle to larger Taiwanese rival TSMC (TSM), has broken ground on an $8B fab expansion plan that will manufacture chips at cutting-edge process nodes. TSMC has a head start on UMC and other rivals in producing chips using a 28nm process, and is having trouble meeting demand. Chip equipment makers are counting on strong orders from contract manufacturers to offset weak demand elsewhere. [Tech] 1 Comment
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6:00 PM On the hour: S&P flat. 10-yr +0.02%. Euro +0.04% vs. dollar. Crude -0.17% to $90.8. Gold -0.15% to $1557.55. Comment!
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5:53 PM Relational Investors, owner of a 6.6% stake in aerospace manufacturer Esterline (ESL +3.9%), plans to push for a sale of the company, an SEC filing says. Relational objects to ESL's poor use of capital, overpaying for acquisitions, and “inadequate disclosure and communications with analysts and institutional investors." [M&A] Comment!
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5:46 PM As Suntech's (STP) CEO warns of the potentially devastating impact of European tariffs, Auriga notes recently-imposed U.S. tariffs had an immediate retroactive impact on Suntech's Q1 results to the tune of $0.11/share. The firm adds Suntech's U.S. module manufacturing ops will limit the future impact of the tariffs, but still doesn't expect the company to turn a profit until 2014 on account of intense price pressure. It has a PT of $3, or just 1x book value. [Tech, Quick Ideas] Comment!
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5:39 PM Noble Corp. (NE) says it is budgeting for capital spending to grow to $2.3B from $1.9B next year, unless it decides to build a new offshore drilling rig to add to the 11 now in the works. CEO David Williams says new rigs are attractive now due to stronger demand, a general capital shortage, and the financial crisis driving out speculative rig builders who could otherwise flood the market. [Energy] Comment!
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5:27 PM Following the guidance-driven bloodletting seen today, BMO thinks NetApp (NTAP -12.3%) could be a buyout target. The networked storage giant is now worth just ~$6.5B and trades at just ~5x free cash flow after backing out net cash. FBN, which is upgrading NetApp, feels the same way, and believes gross margin improvement and layoffs could result in guidance being conservative. (more on NTAP) (transcript) [Tech, M&A, Quick Ideas] Comment!
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5:20 PM Strong new commitment, or politically correct charm offensive? Goldman says it plans to channel investments totaling $40B over the coming decade into renewable energy projects. The firm's new target would average out to $4B/year, which may look impressive but it already invests in clean technology - $4.8B worth in 2011. [Energy] 1 Comment
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5:14 PM Starboard Value fires another salvo in its proxy fight against AOL's management and board by posting a 96-page presentation (.pdf) that highlights AOL's massive online media losses, and suggests its efforts to turn a profit on Patch are doomed. The inability of AOL's properties to drive search traffic on AOL.com is also criticized, as are AOL's compensation policies. Starboard's presentation comes a day after the WSJ took a close look at Patch's missteps. [Tech] Comment!
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5:00 PM On the hour: S&P +0.08%. 10-yr +0.02%. Euro -0.38% vs. dollar. Crude -0.13% to $90.83. Gold -0.08% to $1558.55. Comment!
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4:58 PM Comcast's (CMCSA) NBCUniversal subsidiary is in "serious negotiations" to buy Microsoft's (MSFT) stake in MSNBC.com, and could gain full control of the site by this summer, multiple sources tell Adweek. Such a deal could be another example of Microsoft's efforts to reduce the giant losses posted by its Online Services division. [Tech, Consumer, M&A] 2 Comments
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4:58 PM More on Semtech (SMTC) Q1 misses across the board on a 4.7% decline in total Y/Y revenue. Net earnings slid 90% as expenses and a purchase accounting adjustment related to its acquisition of Gennum Corp. weighed on margins and bottom-line results. The firm also sets Q2 guidance that straddles current Street estimates, saying it expects to earn between $0.37 - $0.45 per share on revenue of $146 - $154M. Street expectations are for an EPS of $0.41 on revenue of $149M. Shares -3.2.% AH. [Tech, Earnings, On the Move] Comment!
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4:53 PM Nothing was accomplished at today's EU summit as officials play for time - hoping Greek (and French legislative) elections in June bring more political support for the bailout regime and a move towards "economic union." The trouble is the pace at which not just Greece, but the EU economy is unraveling. Can they wait another month, and what happens if the elections don't go the right way? [Global & FX] 2 Comments
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4:50 PM Bazaarvoice (BV) is acquiring rival PowerReviews for $128M ($31M in cash and $97M in stock) up-front and 1.6M shares worth of options. PowerReviews provides customer review, Q&A, and social media engagement/analytics solutions for 1,100+ retailers. Along with the move, which follows Oracle's purchase of rival Vitrue, Bazaarvoice is guiding for FQ4 revenue of $31M-$31.5M, above a $28.3M consensus. With PowerReviews in tow, it expects FQ1 revenue of $32.5M-$33M and FY13 revenue of $137M-$139M. [Tech, M&A, Earnings] Comment!
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4:48 PM Chesapeake Energy (CHK) extends its late-session rally, +2.3% AH, as CNBC reports BlackRock has boosted its stake in the company to 4M-5M shares; as of March 31, BLK owned ~883K shares. Earlier, Bloomberg reported Carl Icahn had taken at least a 4% stake in CHK. [Energy, On the Move] 1 Comment
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4:38 PM The percentage of bulls in the AAII Investment Sentiment Survey rises 6.9 points to 30.5% in the week ended May 23. The bear camp loses a similar amount, now at 38.7%. The bulls remain well below their long-term average of 39%, the bears above their average of 30%. 1 Comment
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4:37 PM More on VeriFone (PAY): FQ2 beats on a per share basis on a 62% jump in total revenue. Net earnings fell 43% however, as restructuring and acquisition-related costs continued to weigh on bottom line margins. Shares -7.8% AH. [Earnings, Global & FX] 1 Comment
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4:37 PM Delphi Automotive (DLPH) agrees to acquire the motorized vehicles division of FCI Group in a transaction valued at ~$972M. DLPH expects the acquisition to be accretive to 2013 EPS by $0.24. [M&A] Comment!
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4:27 PM Having just struck a major partnership with Verifone, PayPal (EBAY) is announcing 15 new retail partners for its offline payment solutions. Prominent names include Abercrombie, American Eagle, Barnes & Noble, Foot Locker, J.C. Penney, Office Depot, and Toys "R" Us. Home Depot has already done a commercial launch of PayPal's solutions. [Tech, Consumer] Comment!
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4:11 PM American Capital Mortgage (MTGE -2.6%) manages to claw back some of its big early loss after a secondary offering of 11M shares which raised $253M. As tipped two days ago, a price premium of about 10% over book value is too enticing for mREIT managements not to do a secondary. (PR) [Financials] Comment!
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4:11 PM China Kanghui Holdings (KH): Q1 EPS of $0.20 beats by $0.01. Revenue of $13.1M (+21.6% Y/Y) beats by $0.35M. (PR) [Earnings, Healthcare] Comment!
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4:10 PM Market recap: Stocks bounced off losses after Italian PM Monti said most leaders at the EU summit backed joint eurobonds and he'd push Germany to support them (good luck with that). Earlier, talk that China’s biggest banks may fall short of loan targets was driving stocks lower. The euro tumbled to a 22-month low near $1.25; crude oil eased back above $90. NYSE losers slightly outnumbered gainers. [Top Stories] 3 Comments
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4:09 PM InterDigital (IDCC) issued the following response to the announcement by Huawei that they filed a complaint with the European Commission, claiming abuse of patents essential to the 3G standard: "InterDigital has not seen the complaint that was filed, so we can offer no specific response to whatever issues might be raised in the complaint," said Lawrence Shay, President of InterDigital's patent holding subsidiaries. [Tech] 1 Comment
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4:08 PM rue21 (RUE): Q1 EPS of $0.46 beats by $0.03. Revenue of $205.6M (+18% Y/Y) beats by $1.5M. Shares -2.9% AH. (PR) [Earnings, On the Move] Comment!
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4:06 PM In addition to NetApp's poor guidance and H-P's Autonomy issues, F5 (FFIV -7.9%) has been hit by a downbeat note from Deutsche's Brian Modoff that has implications of other enterprise IT names. Modoff says his checks with IT buyers and resellers indicate macro worries are affecting the spending plans of major enterprises, and stand to affect F5's FQ3 and 2H results. However, he's still bullish on F5's ADC and security businesses, and potential to grow software sales. (Dell) (Cisco) [Tech, On the Move] Comment!
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4:01 PM At the close: Dow +0.32% to 12537. S&P +0.25% to 1322. Nasdaq -0.38% to 2839.
Treasurys: 30-year -0.36%. 10-yr -0.18%. 5-yr -0.12%.
Commodities: Crude +1.07% to $90.86. Gold +0.7% to $1559.25.
Currencies: Euro -0.4% vs. dollar. Yen +0.16%. Pound +0.13%. Comment! -
3:58 PM Chesapeake (CHK +2.6%) shares rally into the close on a Bloomberg report that Carl Icahn has purchased at least a 4% stake in the company. Note that the latest quarterly disclosure of Icahn's holdings showed no CHK shares; he had reported a 5.8% stake in Dec. 2010. [Energy, On the Move] 5 Comments
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3:54 PM SEC staff will not recommend any enforcement action against Lehman or any of its former executives after completing a probe of possible financial fraud there, reports Bloomberg. "Repo 105 is magical," tweets Josh Brown, "It makes losses disappear long enough to file a 10Q, then they come back until the next Q is due." [Financials] 9 Comments
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3:48 PM Contributing to today's drop in LinkedIn (LNKD -5.3%) is a cautious note from ITG, which thinks the company's pricing and volume have dipped in Q2. This leads ITG to think LinkedIn, which has beat the guidance set for each of its first 4 post-IPO earnings reports, will only report in-line sales. And that, it thinks, could disappoint investors who have given the company a sky-high valuation. [Tech, On the Move, Quick Ideas] Comment!
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3:46 PM Education-related stocks show weakness after indications from Congress are that the Senate won't approve two bills that would limit student loan interest rates from soaring in July. In harm's way: EDMC, CECO, STRA, ESI, DV, NAUH, APOL, BPI, APEI, COCO, LINC, LOPE, CPLA. [Consumer, On the Move] Comment!
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3:44 PM Shares of companies with significant exposure to China, such as Joy Global (JOY -7%) and Cliffs Natural Resources (CLF -4.5%), are sliding today on signs (I, II, III) the country's factory activity is poised for a seventh straight month of contraction. JOY also may be hurt by two analyst price reduction calls a week ahead of its May 31 earnings report. [On the Move] Comment!
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3:37 PM Apple (AAPL) EMEA chief Pascal Cagni has resigned, according Le Figaro. It's claimed Cagni, who was hired in 2000 by Steve Jobs, tendered his resignation yesterday. Apple's European sales totaled $11.3B in FQ2, or 24% of global revenue. [Tech] 2 Comments
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3:33 PM InterDigital (IDCC -3.6%) slumps after China's Huawei, one of several phone vendors it's suing, files an antitrust complaint with the E.U. accusing InterDigital of refusing to license key patents under FRAND licensing terms. Samsung and Motorola have already come under fire for leveraging FRAND-covered patents in their IP disputes with Apple and/or Microsoft. [Tech, On the Move] 1 Comment
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3:31 PM Alaska Air (ALK +4.3%) unveils its new do-it-yourself bag tagging service at Seattle-Tacoma International Airport in a move that will cut overhead and simplify the checking-in process for customers. The TSA has approved the carrier to offer the service at more airports this summer. [Consumer] Comment!
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3:28 PM Italian PM Monti hits the tape, telling Dow Jones a majority of the EU states favor common eurobonds. Unfortunately, tweets ZH, the ones that oppose them are the ones that pay the bills. [Global & FX] 6 Comments
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3:26 PM Westlake Chemical (WLK +2.4%) is upgraded to Neutral from Sell by UBS, which believes the stock has pulled back more than the market due to concerns that natural gas increased while oil prices declined. The firm notes the ratio of WTI oil price to U.S. natural gas dropped from 55x to 36x; "a ratio in the 5.0s is not sustainable," it says, and the stock "got ahead of itself." [Quick Ideas, On the Move] Comment!
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3:20 PM In shades of Fannie and Freddie, Spain's bailout of Bankia - originally slated at about €5B, then €7-10B, and now €15B - may grow further as the lender is expected to request even more tomorrow to meet a viability plan set up by new management. [Global & FX, Financials] Comment!
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3:15 PM PetroChina (PTR -1.2%) Chairman Jian Jiemin says the Chinese energy giant plans to focus on storage and refinery assets in the Americas this year, according to China Daily, but plays down reports PTR has been in talks to buy Valero's (VLO -1.7%) refinery in Aruba. Jian says that while the project may be worth a look, he is unaware of any deal. [Energy, On the Move] Comment!
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3:11 PM A Greek exit from EMU is imminent says Bank of Tokyo-Mitsubishi, with market chatter setting the timing for the weekend of June 2. The bank takes note of the relentless fall in the euro and comments from the Bundesbank that the exit will be controllable. The euro -0.5% and looking like it wants a $1.24 handle. [Global & FX] 4 Comments
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3:09 PM Toro (TTC +7.5%) pops on a strong FQ2 report earlier today. Net earnings rose 14% Y/Y as unseasonably warm weather and an accelerated Spring helped boost sales of grounds-care equipment. The company also raises its FY12 forecast, now expecting an EPS of approximately $4.30, in the lower end of its previously announced guidance range of $4.30 - $4.35, but still better than Street estimates of $4.29. The company also expects revenue growth of 7% - 8% Y/Y. [Earnings, On the Move] Comment!
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3:01 PM CVR Energy (CVI -1.8%), now controlled by Carl Icahn, begins the process of trying to sell the nitrogen fertilizer company by hiring Jefferies to solicit bids. CVR says the 60-day process begins immediately and that Icahn is willing to consider any offer of at least $35/share. [Energy, On the Move] 2 Comments
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3:00 PM On the hour: Dow -0.39%. 10-yr -0.12%. Euro -0.45% vs. dollar. Crude +0.88% to $90.69. Gold +0.4% to $1554.65. Comment!
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2:57 PM A new Greek poll shows the anti-bailout Syriza party gaining support, now garnering 30% of the vote against 26% for 2nd place New Democracy. The poll also shows 85% of Greeks prefer to stay in the euro. Another poll has Syriza and ND neck and neck with 23.5% of the vote. [Global & FX] 2 Comments
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2:53 PM A new study from MasterCard confirms a trend of slowing luxury spending - seen in earnings reports from jewelry sellers Tiffany (TIF -4.4%) and Signet Jewelers (SIG -4.5%) - with sales only increasing 1.8% in April after gaining 6.7% in Q1. Analysts say the supposedly non-cyclical wealth effect isn't holding up against economic headwinds. On watch: COH, KORS, EL, HESAF.PK. [Consumer] Comment!
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2:49 PM Google's (GOOG) rumored Nexus tablet will ship next month, Digitimes reports. It's added the 7" device, which a past report suggested will sell for $199, is expected to have 2012 shipments of just 2M-2.5M - IDC has estimated the 2012 tablet market will total 106M units. Between competition from the 9.7" iPad, the Kindle Fire, the Nook Tablet, and perhaps also an "iPad Mini," as well as Apple's (AAPL) huge lead in available tablet apps, Google has its work cut out for it. (also) [Tech] Comment!
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2:48 PM Gevo (GEVO +5%), the biofuels company backed by oil company Total (TOT) and chemical maker Lanxess (LNXSF.PK), begins startup of the world's first commercial biobased isobutanol production plant. Isobutanol may be blended with gasoline or refined into jet fuel, specialty chemicals or other products typically derived from petroleum. [Energy, On the Move] Comment!
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2:43 PM Shares of Dynasil (DYSL +24%) soar after announcing that it's entered into a technology collaboration agreement with the Mayo Clinic to develop therapeutic hypothermia core cooling technology designed to protect the brain during cardiac arrest and traumatic brain injury. Separately, Dynasil and Mayo Clinic are also working together on a blood storage technology designed to extend the shelf life of blood products. [Healthcare, On the Move] Comment!
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2:40 PM IMAX (IMAX -0.7%) and Lion Gate (LGF +0.1%) announce The Hunger Games will be digitally re-mastered into the IMAX format and released in China. The film be one of the first Hollywood features to be released in the nation under a new revenue-sharing agreement allowing Western distributors to collect up to 25% of its take. [Consumer] Comment!
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2:36 PM Deutsche Telekom (DTEGY.PK) CEO Rene Obermann says his company is open to merging struggling T-Mobile USA with a rival, but rules out a complete sale. T-Mobile, whose planned sale to AT&T was thwarted by regulators, was recently rumored to have discussed a merger with MetroPCS (PCS). Some think a deal with Sprint (S) is a possibility in spite of 3G network compatibility issues. [Tech, M&A] Comment!
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2:31 PM PPG Industries (PPG +1.6%) gains on an upgrade to Buy on valuation at BofA/Merrill, citing reduced raw material cost pressures, potential for margin expansion and share gains. [On the Move] Comment!
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2:24 PM Forum Energy (FET -0.4%) is initiated at Buy by Deutsche Bank, which says the stock fills an investment void in the oil service space as a high quality small-midcap name with leverage to secular industry growth themes and "one of the highest quality management teams [it has] seen in a company this size." FET has enjoyed several positive outlooks recently, but shares have barely budged. [Energy, Quick Ideas] Comment!
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2:17 PM Microsoft's (MSFT) hit Kinect sensor may be getting some serious competition from Leap Motion, developer of a hands-free motion control solution that can control what's shown on a display with accuracy up to 1/100 of a millimeter. Leap's hardware, which also supports gestures such as pinch-to-zoom, is expected to cost $70, and has received heavy developer interest. Microsoft is reportedly prepping a more advanced Kinect that can read lips and detect emotions. [Tech] Comment!
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2:09 PM Procter & Gamble (PG -0.2%) CEO Bob McDonald says the company will stop chasing profits in emerging market until it stabilizes its 40 largest business lines. While the company has been able to grow sales faster in emerging markets, it still generates less profit than in developed markets due to price sensitivity and fierce competition. [Consumer] 5 Comments
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2:06 PM H-P (HPQ +1.8%) has given up most of the gains that followed its FQ1 beat and layoff plans. Concerns the $10B Autonomy purchase may be proving disastrous are probably playing a role. Not only did H-P report Autonomy, which was posting decent growth at the time of the acquisition, see a major Y/Y drop in license revenue, H-P fired founder Mike Lynch in response. The Guardian's sources indicate Lynch and his team didn't mesh well with H-P's "bureaucratic" culture. (transcript) [Tech, On the Move] 1 Comment
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2:05 PM Chesapeake Energy (CHK -1.2%) has put 504K acres in the DJ Basin in Wyoming and Colorado up for sale, as it seeks to raise cash to close a $9B-$10B funding shortfall. The DJ Basin deal includes oil and gas production from 29 wells CHK operates and an interest in 24 non-operated wells. [Energy, On the Move] Comment!
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1:51 PM Cowen says Thermo Fisher's (TMO +1.6%) current valuation represents a primo buying opportunity . The firm says its risk/reward profile is even more attractive following its analyst day, citing expectations for improved earnings growth, increased market share, and management's belief shares are undervalued. [Healthcare, On the Move] 1 Comment
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1:51 PM Mark Cuban discloses he bought 150K Facebook (FB) shares at $33, but says the purchase is a trade, not an investment. Cuban also provides downbeat commentary about Facebook and its disappointing IPO: he predicts the offering will further discourage retail investors from participating in the market, and joins Jim Cramer in predicting mobile usage is bad news for the company. He also sees mobile's monetization challenges as a problem for Google (GOOG) and other online ad sellers. [Tech, Quick Ideas] 10 Comments
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1:43 PM TD Bank's (TD -0.7%) earnings beat contrasts with Royal Bank of Canada (RY -4.1%), where earnings rose just 5% and missed expectations. The divergence: RBC's exit from the U.S. consumer market, while TD reported record profits from its American unit. [Financials] Comment!
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1:43 PM Nvidia (NVDA) announces its first 4G LTE baseband chip, the fruits of its 2011 acquisition of Icera, has been qualified for use on tablets running on AT&T's (T) LTE network. The product faces tough competition from Qualcomm (QCOM), whose baseband chips are used in 4G iPad models. A chip combining an Icera baseband with an Nvidia Tegra app processor is due in 2013. [Tech] Comment!
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1:38 PM McDonald's (MCD -0.5%) won't have to be a profit-making company and the surrogate parents for millions of kids after all, as a shareholder resolution to assess the effects of products and marketing on children's health fails to land more than 6.4% of the votes at the company's annual meeting. Execs did say that new healthier choices for Happy Meals could be part of Mickey D's menu in the future. [Consumer] Comment!
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1:33 PM Facebook (FB +1.1%) is set to unveil a standalone photo-sharing app called Facebook Camera. The product of Facebook's photos team, the app doesn't feature any Instagram integration (the acquisition is still being reviewed by the FTC), but it does borrow heavily from the startup, and drives home the extent to which Facebook saw it as a direct rival. Facebook's mobile use is soaring, though this brings with it some monetization challenges. [Tech] Comment!
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1:27 PM Could things get any more harried with trading on Sirius XM Radio (SIRI -0.5%)? While entrenched analysts argue that the stock is range bound at $2 and options activity gets frenzied, Liberty Media still circles about trying to gain control and CEO Mel Karmazin interestingly proclaims "our stock sucks." Just to add a little icing to the cake, the company wants to trade under a new symbol - SXM - to better reflect the combined company. [Consumer] 2 Comments
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1:26 PM Treasurys dip a little further in the middle of the curve after the seven-year note auction came at a record low yield. The 30-year yield +0.03 to 2.86%; 10-year +0.02 to 1.77%; five-year +0.03 to 0.775%. [U.S. Economy] Comment!
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1:23 PM Airbus (EADSF.PK) scraps a plan to increase A320 production to 44 a month from 40 currently and will instead settle for 42 . The airplane maker cited worries about the world economy - which has not seemed to affect the commercial jet sector too much until now - the ability of carriers to fund aircraft acquisitions, and the capacity of parts providers. Comment!
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1:17 PM While the case can be made for additional accommodation, says FRBNY chief Dudley in a speech, the costs at this point are likely to exceed the benefits. He stands ready to change his mind towards more ease should things slow down, but would also consider tightening policy earlier than expected if growth gets stronger. (earlier on CNBC) [U.S. Economy] Comment!
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1:15 PM Sigma Designs (SIGM +6.8%) posts a healthy gain after beating FQ1 estimates and guiding on its earnings call for FQ2 revenue of $61M-$67M - boosted by the acquisition of bankrupt Trident's HDTV chip business, and thus not comparable to estimates. The chipmaker says it's seeing strong traction for its home streaming and IPTV processing chips. It adds it has cut the Trident unit's staff by 1/3 since the acquisition. [Tech, Earnings, On the Move] Comment!
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1:10 PM Biogen (BIIB +0.3%) hovers in the green on positive comments out of BMO Capital this morning. The firm believe the stock is poised to move higher due to several upcoming catalysts, including the company's R&D day on June 12 and two upcoming data releases. The firm expects the stock to make a move towards $145 over the near term. [Healthcare] Comment!
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1:07 PM Having last week closed a deal to buy 63 local newspapers from Media General for $142M, Warren Buffett has told Berkshire Hathaway's (BRK.A) editors and publishers that the company "will probably purchase more papers in the next few years," focusing on "towns and cities with a strong sense of community." 5 Comments
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1:04 PM The Treasury sells $29B in seven-year notes at a record-low 1.203%. Bid-to-cover ratio of 2.8, vs. a recent average of 2.58; indirect bidders take 42.7%, vs. a recent 38.7%. Direct bidders take 15.7%, vs. a recent 15.5%. [U.S. Economy] 2 Comments
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1:00 PM On the hour: Dow -0.25%. 10-yr -0.13%. Euro -0.31% vs. dollar. Crude +1.35% to $91.11. Gold +1% to $1563.85. Comment!
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12:59 PM As Research In Motion's (RIMM) smartphone share crumbles, the popularity of BlackBerry Messenger (BBM) is going down with it, even if many continue to swear by its messaging and contact-list features. Former co-CEO Jim Balsillie reportedly wanted to license BBM (along with access to RIM's network) for use on third-party platforms, but new chief Thorsten Heins put an end to those plans. Heins "decided RIM shouldn't pursue licensing deals in general," it's claimed. [Tech] 3 Comments
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12:56 PM A strong rally in airline stocks (NYSE Arca Airline ETF +4.2%) still has legs with US Airways (LCC +9.1%) and United Continental (UAL +5.2%) leading the charge. Comments from JPMorgan's Jamie Baker that earnings estimates don't reflect the positive impact of lower jet fuel prices are helping tip sentiment in the sector. [On the Move, Consumer] 1 Comment
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12:44 PM S&P cuts MEMC Electronic Materials' (WFR -3.6%) credit rating two notches to B+ from BB, two levels below investment grade, citing “continued weakening of the solar power sector." MEMC says it is disappointed with S&P's move, "but we are comfortable that our cash and liquidity position is sufficient to meet our current cash need." [Tech, On the Move] Comment!
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12:36 PM Millennial Media's (MM) Q1 Mobile Mix Report drives home the disproportionate and growing share of mobile web traffic and ad viewing claimed by tablets. Ad impressions served by Millennial to non-phone devices (primarily tablets) rose 33% Q/Q, and now make up 20% of all impressions. With the iPad dominating tablet web traffic, that's a bit of a problem for Millennial, due to iAd competition, and a bigger problem for Google (GOOG), due to its search revenue-sharing deal with Apple (AAPL). [Tech] 3 Comments
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12:30 PM Three lunchtime reads:
1) Nervous investors look beyond positive U.S. economic signs
2) China is a black box of misinformation
3) Time to enforce Sarbanes-Oxley in the JPMorgan scandal [Global & FX, U.S. Economy] Comment! -
12:25 PM GE expects its 2012 revenues in Brazil to jump 30% this year from $3.7B in 2011. The conglomerate plans to set up a factory in EBX Group's Acu port in Rio de Janeiro to produce equipment for the oil, gas and energy industries. As noted earlier, GE will provide $300M to an EBX investment fund. Comment!
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12:18 PM China's banks may fall short of their 2012 loan targets, say several officials, thanks to a drying-up in demand from their biggest customers - large state-owned firms. Bank loans dove 33% April and the May figures may be worse, with only ¥34B ($5.4B) advanced through May 20 (¥682B was loaned in April). The news seems to have hit stocks and the aussie dollar, off 40 pips in a few minutes. [Global & FX] 3 Comments
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12:13 PM Netflix (NFLX) is a "frenemy" of the cable industry, Cox CEO Patrick Esser maintains. While admitting Netflix is a content rival, Esser also notes 40% of Cox's broadband customers streamed Netflix content in March. Netflix content chief Ted Sarandros (previous) admits his company is cannibalizing some cable viewing, while adding Netflix's investments in original programming are due to its inability to license content from the likes of HBO and Showtime. [Tech, Consumer] 2 Comments
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12:12 PM As Kinder Morgan (KMI -1.6%) completes its acquisition of El Paso, it now expects to see cost savings of $400M/year from the deal, up from its previous estimates of $350M in savings. KMI also expects to declare dividends of at least $1.40/share for 2012, up from its previous plan of $1.35. [Energy, M&A] Comment!
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12:10 PM Disney's ESPN extends its deal to broadcast the annual hot dog eating contest sponsored every 4th of July sponsored by Nathan's Famous (NATH +0.6%) through 2017. Rather surprisingly to some, the mouth-stuffing event garners high ratings and has given Nathan's a great deal of publicity. [Consumer] Comment!
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12:07 PM Human Genome (HGSI -2.4%) slips on a BMO downgrade to Market Perform. THe firm believes the risk of GlaxoSmithKline (GSK) dropping its offer has increased and the likelihood of an significant price increase or a contingent value right for darapladib has been reduced. The firm lowers its price target to $13 from $17. [Healthcare, On the Move] Comment!
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12:05 PM GE (GE -0.6%) will use the entire $4.5B "special dividend" that it's receiving from GE Capital for buybacks, Jeff Immelt has told investors. That should add ~$0.03 a share to GE's 2013 earnings, estimates Citigroup, which reiterates its "buy" recommendation on the company.
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12:00 PM On the hour: Dow -0.05%. 10-yr -0.18%. Euro +0.01% vs. dollar. Crude +1.5% to $91.25. Gold +1.35% to $1569.25. Comment!
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11:59 AM Calling the stock a potential "four-bagger," Jefferies starts coverage of XPO Logistics (XPO +5.5%) at Buy with a $23 price target. New CEO Brad Jacobs has created billions of dollars of value in multiple industries via an aggressive growth template, the firm says, adding that while execution risk is high, shares could hit $70 if XPO achieves its full business plan. [Quick Ideas, On the Move] Comment!
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11:58 AM Starbucks (SBUX -0.2%) has been outed in New York City where a stealth store inside a Macy's location sells beer and wine without displaying the trademark mermaid logo and limited menu. As more branded Starbucks stores pop up unannounced around the country, the company will get a better idea how beer and wine fits into its future. [Consumer] 2 Comments
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11:53 AM Looking to cut costs in the face of plunging revenue and significant cash burn, Nokia (NOK) has broken up its annual Nokia World conference, typically a big gathering, into several smaller events. Moreover, the first event will be invitation-only. VentureBeat's Sean Ludwig isn't pleased. [Tech] 1 Comment
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11:53 AM Europe closes nicely higher as oversold conditions overpower an initial fall on ugly economic data (which may cause the ECB to act). Stoxx 50 +1%, Germany +0.5%, France +1.2%, Italy +0.9%, Spain +1.4%, U.K. +1.6%. Euro is flat after some big rumor-mill-induced swings, buying $1.2583. [Global & FX] Comment!
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11:50 AM Bank Q1 net profit rose 23% to $35.3B - the highest since Q2 2007 - as revenue rose 3.1% to $169.6B, the FDIC says in is quarterly report. However, loan balances fell $56.3B (0.8%) after three consecutive quarterly increases. Lower provisions for bad loans were a factor in the profit improvement. (PR) [Financials] Comment!
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11:46 AM Heavily-shorted Pandora (P +16.8%) soars thanks to its FQ1 beat, which was fueled by share gains and better monetization, and strong FY13 guidance. Needham (Buy) sees the results as evidence Internet radio is a "winner-take-most" market, while Maxim Group (Buy) thinks they indicate Pandora's sales investments are paying off. SA's Rocco Pendola is encouraged by Pandora's earnings call commentary, which he sees as more proof of the company's disruptive impact on the radio industry. [Tech, On the Move, Quick Ideas] Comment!
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11:44 AM Italy’s Eni (E +0.6%) says it has made a significant oil discovery in Egypt's Western desert, striking more than 250 ft. of net pay at its Emry Deep prospect. Eni plans further appraisal drilling at the find, which it now estimates to hold 150M-250M barrels of oil in place. [Energy, Global & FX] 1 Comment
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11:44 AM The "Death of Equities?" John Authers and Kate Burgess explore the end of more than a half-century "passion for equities," as institutions shed stock exposure for fixed income. The authors suggest stocks' relative cheapness is more about low bond yields, and unless said yields are going to go negative, any tailwind to equity prices from fixed income is about used up. (see also) 4 Comments
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11:38 AM Following years of prodigious spending, health insurers, doctors and hospital are making efforts to halve the growth in the U.S.'s $2.7T healthcare bill to bring it more in line with inflation. One problem, though, is that the more tests and procedures doctors and hospitals do, the more money they get. [Healthcare] 2 Comments
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11:27 AM Ship Finance International (SFL +4.7%) shares, up 55% YTD, jump after reporting a rise in Q1 profit on a new cash sweep agreement with tanker firm Frontline. The owner and operator of ships for the maritime and offshore industries says the VLCC tanker market has continued healthy so far in Q2, so it sees another "significant" cash sweep contribution in Q2. [Energy, On the Move] Comment!
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11:25 AM PayPal's (EBAY) tie-up with payment-processing rival Verifone (PAY) is all about fending off Square, suggests Owen Thomas. PayPal, while expanding its offline partnerships, doesn't have Verifone's retail reach, and Verifone can't match PayPal's low cost structure. While PayPal and Verifone have each released rival offerings (I, II) to Square's credit-card reader, their deal is an attempt to halt Square's efforts to move upmarket and sell retailers on a soup-to-nuts payment solution. [Tech, Consumer] 1 Comment
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11:24 AM Onyx Pharmaceuticals (ONXX +4.7%) says that Bayer (BAYRY.PK) has submitted a New Drug Application to the FDA seeking approval for the oral multi-kinase inhibitor regorafenib for the treatment of patients with metastatic colorectal cancer. Regorafenib is a Bayer compound, and Onyx will receive a royalty on global net sales. Separately, Bernstein initiates the shares with an Outperform rating. [Healthcare, On the Move] Comment!
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11:15 AM Repsol (REPYY.PK) says some of the areas it is exploring off the coast of Brazil contain more than 1B barrels of oil and gas, a development it hopes will help persuade investors its future remains bright even after Argentina's nationalization of YPF. But the areas may not start producing large amounts of oil and gas - and substantial cash flow - for several years. [Energy, Global & FX] Comment!
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11:11 AM Nissan (NSANY.PK) recalls over 194K vehicles sold by Isuzu because of defective parts, according to a filing the company made in Japan. The recall covers Caravan and Como vans produced between May 2001 and July 2011. [Global & FX, Consumer] Comment!
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11:04 AM Corsair Components has postponed its IPO, citing market conditions. The company, which provides computer components with a focus on gaming hardware, had intended to sell 6.9M shares for up to $14 each, but will wait until the environment improves. Corsair follows TVAX Biomedical, Tria Beauty and others in deciding not to list at the moment. [Tech] Comment!
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11:03 AM Chinese sovereign wealth fund CIC is in "advanced talks" to buy up to a $2B stake in Alibaba (ALBCF.PK), Reuters reports. The e-commerce giant would use the funds to help buy back half of Yahoo's (YHOO) 40% stake in the company for $7.1B, per the terms of Sunday's deal. Alibaba, valued at $35B in the Yahoo deal and eying an IPO, posted 2011 revenue of $2.8B, nearly 2/3 of which came from its Taobao auction site. [Tech] Comment!
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11:01 AM May Kansas City Fed Manufacturing Survey: Rise to 9 from 3 in Apr, 9 in Mar. New Orders 10 vs. -8 previous, Production 17 vs. 0 previous. Backlogs -3 vs. -5 previous. [U.S. Economy] 1 Comment
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11:00 AM On the hour: Dow +0.13%. 10-yr -0.19%. Euro +0.01% vs. dollar. Crude +1.44% to $91.19. Gold +1.51% to $1571.75. Comment!
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10:58 AM Never before has the price gap between natural gas and diesel been so large, making trucks powered by natural gas an alluring option for company fleets. Examples: Waste Management (WM) says 80% of its truck purchases in coming years will be fueled by nat gas, and Ryder (R) is expanding its program of renting out nat gas trucks and is introducing them in clusters it operates for big retailers. [Energy] 1 Comment
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10:52 AM Over 50% of medical insurance policies sold to consumers don't match up to the requirements of the federal health law that's due to take effect in 2014, a study from the Commonwealth Fund shows. The law, which is being reviewed by the Supreme Court, will improve the terms of the policies for individuals, although it could lead to higher premiums. [Healthcare] Comment!
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10:52 AM InterMune (ITMN -1.4%) sells its Actimmune interferon gamma-1b business to privately held Vidara Therapeutics International for $55M in cash plus a two-year royalty stream. The company had stopped active development for Actimmune several years ago, preferring to focus its efforts on other R&D operations such as its Pirfenidone treatment for idiopathic pulmonary fibrosis. [Healthcare, On the Move] Comment!
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10:51 AM Nike (NKE +0.6%) plans to increase its ties to the Olympic movement after taking on criticism that it doesn't play the requisite political games with movers and shakers in the international governing bodies. The company also has its eyes on becoming a major sponsor of the 2016 Summer Games in Brazil, according to execs. [Consumer] Comment!
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10:50 AM Adam Lashinksky, author of a recent book on Apple's (AAPL) business culture, provides an inside look at how the Tim Cook era is unfolding. For better and/or worse, Apple is becoming "a more normal company" under Cook, Lashinsky suggests. Some of the changes: Cook engages with investors in a way Jobs didn't; engineers have to share more decision-making authority with managers; and the company now has a dedicated M&A team. [Tech] 6 Comments
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10:38 AM Noble Energy (NBL -0.2%) is upgraded to Buy from Hold at S&P Capital IQ, which foresees several years of double-digit production and cash flow growth. NBL has a deep prospect inventory, the firm says, and its "near/mid term growth prospects, geographic scope, margin expansion and superior cash flow generation warrant a premium." [Energy, Quick Ideas] Comment!
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10:37 AM Shares of Melco Crown (MPEL +2.8%) trade higher after the company catches an upgrade from Nomura to Buy to go along with a price target boost to $17.50. Analyst Charlene Liu cites the company's potential to improve margins and see new facilities and VIP junkets add revenue to its coffers. [On the Move, Consumer] Comment!
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10:30 AM Watson Pharmaceuticals (WPI +2.8%) gains on an upgrade to Outperform on valuation at Wells Fargo. Wells says that on deeper analysis, it has higher confidence in the company's ability to hit EPS targets following the Actavis acquisition. The firm also raises its price target range to $84 - $90 from $75 - $79. [Healthcare, On the Move] Comment!
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10:29 AM NetApp's poor guidance is hurting both storage-related names and infrastructure vendors seen as having strong cloud/virtualization exposure, as fears of an IT spending slowdown grow. Also, while the Street is pleased overall with H-P's results, the poor showings from its server business and Autonomy enterprise search unit might not be going over well. EMC -4.1%. STEC -3.8%. BRCD -2.8%. CVLT -4.9%. FFIV -5.5%. VMW -4.5%. CTXS -3.9%. [Tech, On the Move] Comment!
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10:27 AM The chatter over at automobile industry blog AutoDiscovery.com is that not only is General Motors (GM -0.8%) bringing back the Cadillac Escalade (contrary to some reports) - but that a new higher-priced model will include an upgrade of luxury options and a more powerful engine. [Consumer] 1 Comment
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10:25 AM As Royal Dutch Shell (RDS.A +0.8%) buys time to consider its response to PTT's bid for Cove Energy (CNVGF.PK), it must choose whether to make further divestments and/or delay its Australian LNG interests to pursue its Mozambique ambitions. RBC says PTT's offer values Cove's stake in a major gas field off Mozambique's coast at $3.4/boe vs. a normal valuation of $2.5-$3/boe for such assets. [Energy, Global & FX] Comment!
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10:20 AM Alere (ALR +1%) gets a lift from an upgrade to Outperform at Wedbush this morning, citing the company's progress in resolving its FDA issues around cardiology test manufacturing following yesterday's release of its 8-k. [Healthcare, On the Move] Comment!
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10:19 AM Shares of Phillips-Van Heusen (PVH +7.1%) run up an outsized gain following its moderate earnings beat and Q2 guidance. Jim Cramer tweets a "huge short squeeze" is behind the action. [On the Move, Consumer] Comment!
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10:18 AM Tiffany's (TIF) 9% plunge following its earnings report and profit warning is a buying opportunity, says Oppenheimer, as Q1 sales held up, input costs are easing, and comps will soon moderate, while the firm also believes the new guidance is attainable. [On the Move, Earnings, Consumer] Comment!
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10:17 AM The IEA reports U.S. carbon emissions fell by 450M metric tons in the past five years, but global emissions continue to rise, now at 31.6B metric tons. IEA attributes U.S. improvement to “policy driving greater efficiency and technology making shale gas production viable.” But abundant U.S. natural gas was more than offset by added coal burning in China and India. [Energy, Global & FX] 1 Comment
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10:11 AM The dive in the Swiss franc was the result of a small sell order, and not from a policy move, says a trader. The euro/franc cross has been pinned to CHF 1.2010 for much of the past month, so it didn't take a whole lot to move it. The cross remains higher, however, now at CHF 1.2037. [Global & FX] Comment!
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10:09 AM Microsoft (MSFT) has won a German injunction on the sale of Motorola Mobility (GOOG) Android devices, after a court ruled Motorola is infringing a patent related to the brilliant innovation of breaking up and reassembling a text message. The ruling comes after the ITC banned the U.S. import of Motorola devices infringing another Microsoft patent, and suggested (pending a final ruling) the Xbox 360 should face an import ban for violating Motorola patents. [Tech] 2 Comments
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10:08 AM GE plans to invest $300M for a 0.8% equity stake in a fund run by Brazilian industrial group and GE customer EBX Group, which intends to spend $50B over the next ten years in infrastructure and natural resources projects. Comment!
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10:06 AM General Mills (GIS +0.7%) buys Brazilian firm Yoki Alimentos for 1.75B reais ($857M) in a deal that will help the company increase its presence in Latin American food markets. As part of the arrangement, the company will assume 200M reais ($98M) in outstanding debt. [M&A, Consumer] Comment!
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10:00 AM On the hour: Dow -0.16%. 10-yr -0.16%. Euro -0.06% vs. dollar. Crude +0.85% to $90.67. Gold +1.3% to $1568.55. Comment!
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10:00 AM Greece's exit from EMU would be a good example for others, says the Bank of Russia's Mikhail Shvetsov, speaking in Milan. He also says Greece has plans for a parallel currency. "Merkel to Greece: come to mama, Putin to Greece: come to daddy," writes ZH. [Global & FX] 5 Comments
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9:57 AM Zillow's new negative equity report shows nearly 16M U.S. homeowners, or 31.4% of all homeowners with a mortgage, were underwater in 2012 - a bit better than 2011's 32.4% but higher than estimates from CoreLogic and others. “It’s a $1.2T problem," Zillow's Stan Humphries says. “We think 2012 is going to be a great year for home sales, but a mixed picture for prices." [U.S. Economy] 2 Comments
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9:57 AM NetApp (NTAP -12.6%) has pared some of the losses seen due to the poor FQ1 guidance that came with its FQ4 beat, but still remains off sharply. Brean Murray is downgrading shares to Hold, citing concerns about revenue visibility and operating expenses. Needham remains bullish, and notes Asia-Pac and U.S. commercial were strengths, but admits there's weakness within defense, financial services, and some top accounts. (also) (transcript) [Tech, On the Move, Quick Ideas] Comment!
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9:56 AM Shares of jewelry sellers Blue Nile (NILE -3.1%) and Zale (ZLC -3.5%) fall lower after the word from Tiffany is that U.S. sales were weak. (Earlier: Signet feels the pull of Tiffany's gravity) [On the Move, Consumer] 1 Comment
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9:50 AM The $100M trading profit that underwriters are reported to have made by "greenshoe" short positions on Facebook may seem "like a giant conflict of interest," outside of Wall Street writes Fortune's Stephen Gandel, but no rules were broken and the potential trades were even disclosed in Facebook's prospectus." [Financials, Consumer, Tech] 4 Comments
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9:46 AM United Airlines (UAL +3.5%) continues to stumble in its efforts to combine the United and Continental reservation systems. The issue has escalated beyond just sitting as fodder for message board complaints and now threatens revenue, according to reports. An especially prickly group - elite frequent fliers - make up 25% of the carrier's revenue and are viewed as increasingly susceptible to bailing out on UAL if their travel schedules are disrupted. [Consumer] Comment!
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9:43 AM An increasing number of forecasters in Reuters' monthly survey expect Brent crude to average less than $100/bbl next year thanks to Europe’s debt crisis, slowing Chinese economic growth and a possible resolution of the Iranian nuclear crisis. Macroeconomic risk from Europe will need to fade before crude oil market fundamentals dominate pricing again, says one. [Commodities, Energy, Global & FX] 3 Comments
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9:39 AM "Price stability is the benchmark of well-being," says Mario Draghi in a speech (that thought must be very comforting to Greeks at the moment). The ECB's extraordinary steps averted a bank collapse, he says, but it is not the central bank's job to keep insolvent banks afloat. Continued EU integration needs "a brave leap of imagination." [Global & FX] Comment!
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9:38 AM Though reiterating a Market Perform on H-P (HPQ +4.7%), BMO sees it as a better play than Dell (DELL -0.6%), following H-P's FQ1 beat and restructuring announcement. Dell's efforts to improve margins "will take too long to play out," BMO argues, whereas H-P will get a boost over the next few quarters from its restructuring. The fact Dell is underperforming a bit this morning suggests the Street takes H-P's results as evidence Dell's problems are partly of its own making. (HPQ transcript) [Tech, Quick Ideas] Comment!
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9:31 AM At the open: Dow +0.19% to 12521. S&P +0.26% to 1322. Nasdaq +0.17% to 2855.
Treasurys: 30-year -0.26%. 10-yr -0.16%. 5-yr -0.07%.
Commodities: Crude +1.15% to $90.94. Gold +1.64% to $1573.75.
Currencies: Euro +0.13% vs. dollar. Yen 0.%. Pound -0.12%. Comment! -
9:30 AM New York Yankees President Randy Levine denies rumors in baseball and banking circles that the Steinbrenner family are considering selling the team. However, sources indicate that the family's eyes have been lit up by the $2.175B that the Los Angeles Dodgers fetched in April, with experts saying that the Yankees could be worth $3B. Comment!
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9:29 AM Coeur d'Alene (CDE) says full production has resumed at its Palmarejo Mine after a group of employees who had been blocking access to the mine agreed to return to work. The temporary shutdown is not expected to have a material impact on 2012 production at Palmarejo. [Commodities] Comment!
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9:23 AM That whoosh in the Swiss franc (nice pic here) comes on rumors about a Swiss tax on bank deposits to come into effect on June 1. [Global & FX] 5 Comments
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9:16 AM Ku6Media (KUTV) +34.7% premarket after announcing an agreement with Chinese SNS website Kaixin001.com. KUTV says it is assisting Kaixin001 in adding a new video sharing function by supplying technology support to all video uploading activities on Kaixin001. [Tech, On the Move] Comment!
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9:15 AM Market preview: EU shares and U.S. stocks are higher despite some awful eurozone and Chinese PMI data. S&P Benchmark +0.1%. It could be because the EU says it wants Greece to stay in the eurozone, although they are planning for a "Grexit." Following earnings, H-P is +7.6% and Pandora is +17%, but NetApp is -13% and Tiffany is -8.2%. Later: Kansas City Fed Mfg Survey, Fed's Dudley [Top Stories, On the Move] Comment!
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9:15 AM The WSJ details how one of the institutional investors that was notified by an underwriting bank of cuts to Facebook (FB) estimates, Capital Research & Management, decided not to invest in the IPO as a result. It's added that while such selective disclosure is normally illegal, it isn't for IPOs, due to laws that prevent analysts at underwriting banks from issuing research until 40 days after shares begin trading. FB +1.8%. (previous) [Tech, Financials] 1 Comment
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9:14 AM "Pencil in" another LTRO announcement at the ECB's July meeting, says JPMorgan, also predicting a 25 basis point rate cut for September. The bank cites today's PMI reads as the final straw to stir the ECB to action (then why wait until September?). Something is clearly up in the currency markets, where the euro has spiked higher vs. the dollar and, more interestingly, against the Swiss franc. [Global & FX, On the Move] 1 Comment
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9:09 AM Arch Coal (ACI) +2.3% premarket after Goldman Sachs upgrades shares to Neutral from Sell with an $8 price target. The firm says the risk/reward is more balanced as concerns about thermal volume cuts and its balance sheet are now mostly discounted in the stock. [Energy, Quick Ideas, On the Move] 3 Comments
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9:07 AM Shares of Signet Jewelers (SIG) lose 8.1% in premarket trading after Tiffany's earnings report highlights soft U.S. luxury spending. [On the Move, Consumer] Comment!
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9:05 AM More on Teva (TEVA) 2012 guidance: The EPS of forecast of $5.30-$5.40 is below prior guidance of $5.48-$5.68; revenue prediction of $20B-$21B is below $22B prior. Teva's Europe outlook has been affected by over $1B. If there are businesses that don't fit, "we'll be looking to divest," says CEO Jeremy Levin. [Earnings, Healthcare] 1 Comment
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9:04 AM U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [U.S. Economy, Breaking News] 25 Comments
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9:03 AM Cheniere Energy Partners (CQP) announces the launch of two new credit facilities totaling ~$2B in connection with the construction of the Sabine Pass liquefaction project, as it continues to aggressively raise funds to build the natural gas export facility. [Energy] Comment!
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9:00 AM On the hour: S&P +0.47%. 10-yr -0.16%. Euro +0.05% vs. dollar. Crude +1.45% to $91.2. Gold +1.73% to $1575.15. Comment!
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8:58 AM Teva (TEVA) provides 2012 guidance on a conference call to investors, saying it expects EPS of $5.30-$5.40 vs. consensus of $5.59. It forecasts net revenue of $20B-$21B vs. 21.27B. Breakdown: U.S. $10.5B, Europe $5.8B, ROW $4.2B, Copaxone $3.8B. Shares +1.4% premarket. (PR) [Earnings, Healthcare] 2 Comments
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8:51 AM Dow Chemical (DOW) wins a final and binding $2.2B award from the International Court of Arbitration in a dispute with Petrochemical Industries of Kuwait. "The company's partnership with Kuwait, which includes several... joint ventures, remains strong and will continue to benefit both parties," Dow says. Shares +3.8% premarket. [On the Move] Comment!
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8:46 AM SABMiller (SBMRY.PK) tips off in its latest earnings release that beer drinking in the U.S. remains sluggish, with jointly-owned MillerCoors reporting domestic sales to retailers tailing off 2% Y/Y and sales to wholesalers dipping 3%. While the company blames the high unemployment rate in the U.S. for soft beer sales, the influence of craft breweries remains an underlying factor. [Global & FX, Consumer] 1 Comment
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8:40 AM Best quote from the EU summit: Discussions about eurobonds were "not unheated," says Jean-Claude Juncker. (via Sara Eisen) [Global & FX] 3 Comments
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8:38 AM Moody's affirms France's AAA-rating and its negative outlook, saying it would raise its outlook if the country's debt metrics improve but would cut if its contingent liabilities increase. Moody's adds that France's plan for sustainable finances is positive. [Global & FX, Top Stories] 1 Comment
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8:37 AM Rosetta Genomics (ROSG) shares continue their helium-like rise, +15.2% premarket after yesterday's +51% jump on no apparent news. Shares have climbed seven-fold since the May 16 news that Novitas, the designated Medicare Administrative Contractor for ROSG's miRview mets2 assay, plans to cover the assay for all Medicare beneficiaries. [Healthcare, On the Move] 1 Comment
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8:34 AM How about a show of hands on who thinks the euro is headed lower, asked Goldman's Jim O'Neill at a January hedge fund conference, when the currency was about $1.26. Nearly every hand in the room shot up. Six weeks later, the euro was buying $1.35. "If Europe says something good," writes Upsidetrader, look for a big reversal in the euro, the dollar, and stocks. [Global & FX] 3 Comments
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8:33 AM April Durable Goods: +0.2% vs. +0.5% expected, -3.7% (revised) prior. Ex-transport -0.6% vs. +0.7% expected, -0.8% (revised) prior. [U.S. Economy] 5 Comments
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8:32 AM Initial Jobless Claims: 370K vs. 371K consensus (prior week revised to 372K from 370K). Continuing claims -29K to 3.26M. [U.S. Economy, Breaking News, Top Stories] Comment!
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8:28 AM Talks between the P5+1 world powers and Iran have continued for a second day, although big differences still remain. Iran wants the West to cancel its impending oil sanctions for the negotiations to carry on; the EU and U.S. want the country to halt its production of higher-enriched uranium and reverse its current capabilities. [Energy, Top Stories] Comment!
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8:22 AM eBay (EBAY) strikes a deal with VeriFone (PAY) and Equinox Payments that will help it see PayPal gain wider acceptance at physical retailers. The move could expand PayPal's reach to 40M global payment terminals as it muscles into the competitive market to process payments at stores. [Consumer] Comment!
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8:22 AM "Who could blame" investors for continuing to pull money out of U.S. stock funds, writes Josh Brown of the 13th consecutive week of outflows. After having been beaten up by the bullies on your way to class, one learns to take a different route to homeroom. 2 Comments
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8:21 AM Suntech (STP) CEO Zhengrong Shi says if Europe follows the U.S. in levying punitive tariffs on Chinese solar panel imports, it could deal a "lethal" blow to the industry. Beyond words, China signals it may retaliate against the tariffs, saying U.S. government backing for six clean energy projects in China had violated WTO rules and acted as barriers to trade. [Tech, Energy, Global & FX] 1 Comment
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8:14 AM FRBNY President Dudley - one of the leading doves on the FOMC - sounds a hawkish tone, telling CNBC he doesn't see the need for additional ease at this time. What's changed? He has more confidence the economy is going to keep growing and less worry about a "Japanese-style deflation outcome." [U.S. Economy] 4 Comments
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8:05 AM France's data-protection agency, CNIL, accuses Google (GOOG) of stonewalling in its investigation of the company's new privacy policy, which was implemented despite CNIL asking Google for a delay. The agency says Google's answers to a questionnaire are "are often incomplete or approximate," and has given it a new one to fill in. [Tech, Consumer] 1 Comment
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8:02 AM The majority of steel mills in northern China have halted production, according to an analyst in the coal-trade business, putting more meat behind an earlier story about iron ore and coking coal buyers attempting to back away from orders. Not surprisingly, electricity producers seeing their own stockpiles of coal grow due to slumping demand for juice. [Global & FX] 3 Comments
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8:01 AM Heads may be scratching over at Hasbro (HAS) about a decision by Paramount Pictures to move the release of G.I. Joe: Retaliation from next month until sometime in 2013. The company makes G.I. Joe action figures and planned on seeing the scrapped summer blockbuster pushing sales higher. Shares -1.6% premarket. [Consumer] 1 Comment
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8:00 AM On the hour: S&P +0.21%. 10-yr -0.02%. Euro -0.15% vs. dollar. Crude +0.76% to $90.58. Gold +1.15% to $1566.15. Comment!
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7:53 AM Aluminum producers in the province of Henan (China's largest producing province) have idled about 700K tons of capacity in recent months, says a senior official, with another 500K to be shut by year's end. The country in total has capacity of 23M tons, mostly at the high end of the global cost curve, thus making it particularly susceptible to weaker demand. [Global & FX] Comment!
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7:43 AM Weak Chinese property developers are in survival mode, says S&P, facing "spiraling upward" borrowing costs. Higher-rated companies are also facing higher rates and shorter terms, the agency's Chris Lee says, not expecting much of a property recovery even if the government eases policy. [Global & FX] Comment!
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7:40 AM Monro Muffler Brake (MNRO): FQ4 EPS of $0.33 misses by $0.02. Revenue of $171M (+13.9% Y/Y) misses by $6M. Shares -1.4% premarket. (PR) [Earnings, On the Move] Comment!
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7:38 AM Viacom's (VIAB) Paramount Pictures delays the release of G.I. Joe: Retaliation from June 29 to next year in an unexpected move in light of the marketing and promotion already spent on the film - including a Super Bowl commercial. Though sources tip off that the studio may be looking at converting the film to 3-D to rake in more money, it also leaves it without a major summer release. [Consumer] Comment!
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7:38 AM Signet Group (SIG): Q1 EPS of $0.96 beats by $0.05. Revenue of $900M (+1.4% Y/Y) misses by $12M. Shares -4.7% premarket. (PR) [Earnings, On the Move] Comment!
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7:36 AM MakeMyTrip Limited (MMYT): FQ4 EPS of $0.08 beats by $0.02. Revenue of $47M (+66.8% Y/Y) beats by $16M. Shares +5.4% premarket. (PR) [Earnings, On the Move] Comment!
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7:30 AM Expect the ECB to respond to Greece by holding another LTRO, says Commerzbank's chief economist, adding he expects the bank to take its time about announcing such. "The growing uncertainty is poison for the economy," he says. He predicts a cheaper euro, not because of a run, but because the ECB will have the loosest monetary policy. [Global & FX] 2 Comments
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7:24 AM Southwest Airlines (LUV) plans to start making international flights for the first time with its decision to pick up AirTran's routes to Mexico and the Caribbean. The company is looking to add up to 25 flights days from a new international terminal at Houston's Hobby airport. [Consumer] 1 Comment
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7:22 AM More on China's HSBC PMI: Along with a decline in the headline number were falls in both input and output costs, perhaps giving greater scope for easier monetary policy (full report). Remember, this report covers smaller, privately-owned firms as opposed to the official PMI, where the companies have state support and better access to credit. [Global & FX] Comment!
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7:16 AM More on Tiffany's (TIF) Q1: Comparable-store sales +4%. Regions outside the Americas outperformed, while Americas saw soft sales growth. SG&A expenses up 9% Y/Y. Net inventories increased 27% to $2.2B. Expects to add 24 stores this year. Lowers FY 2012 outlook to $3.70-$3.80, from prior guidance of $3.95-$4.05. Shares -8.1% premarket. (PR) [Consumer, On the Move] Comment!
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7:13 AM Patterson Companies (PDCO): FQ4 EPS of $0.61 beats by $0.05. Revenue of $936.3M (+5.9% Y/Y) beats by $21M. (PR) [Earnings, Healthcare] Comment!
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7:09 AM Peter Lynch had the theory Mondays are typically bad for stocks because the weekend just gives the worrywarts time to worry. Eddy Elfenbein puts the idea to the test and finds the S&P is off 8.23% for all the combined Mondays since April 15, 2011. Tuesdays: The S&P has gained 20.05%. 6 Comments
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7:02 AM Morgan Stanley downgrades Green Dot (GDOT) to Equalweight from Overweight. The move comes in the wake of an announcement of a plan by the CFPB to set rules on fees for prepaid cards. [Consumer] Comment!
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7:00 AM On the hour: S&P +0.46%. 10-yr -0.07%. Euro -0.04% vs. dollar. Crude +1.19% to $90.97. Gold +1.17% to $1566.45. Comment!
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6:57 AM McDonald's (MCD) ups its previously-announced $750M bond sale to $900M and scores near-record low interest rates in the process. The company sold $500M of 3-year notes with a 0.75% coupon and $400M of 7-year notes with a 1.875% coupon. [Consumer] Comment!
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6:44 AM General Motors (GM) says it has no plans to move production from South Korea to Europe after speculation popped up that a move could be in the offing. The topic has become a hot-button issue in South Korea, where the nation's highly-agitated unions have threatened "war" with GM over any loss of production. [Consumer, Global & FX] 2 Comments
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6:39 AM A decision from the EU's second highest court denies an appeal by Mastercard (MA) over excessive interchange fees charged on cross-border card payments. The company failed to convince the court that the fees were fundamental or that a significant number of European banks would stop using Mastercard if they were reduced. [Consumer, Global & FX] Comment!
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6:38 AM Toronto Dominion Bank (TD): FQ2 EPS of $1.82 beats by $0.04. (PR) [Earnings, Financials] Comment!
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6:31 AM U.S. stock futures turn higher ahead of economic releases on jobless claims and durable goods. S&P +0.3%, Dow +0.2%. [U.S. Economy] Comment!
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6:26 AM More on Costco (COST) FQ3: Net profit rose to $386M from $324M, comparable sales +5%, with the retailer enjoying increases in the U.S. and abroad. Costco's earnings came a day after Fitch affirmed its AA- rating, citing the company's strong competitive position, operating performance, and cash flow. [Earnings, Consumer] Comment!
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6:00 AM Overseas: Japan +0.1%. Hong Kong -0.6%. China -0.5%. India +1.9%. London +0.7%. Paris +1.0%. Frankfurt +0.1%. Comment!
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5:25 AM U.S. manufacturers are opposing JPMorgan's (JPM) plans to launch an ETF backed by physical copper, telling the SEC the fund would "grossly and artificially inflate prices" and "wreak havoc on the US and global economy." JPM's regulatory filings suggest its ETF could hold 61,800 tons, or 27% of the copper held in the London Metal Exchange’s global network of warehouses. [Commodities] 8 Comments
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4:33 AM UK Q1 GDP revised down to -0.3% Q/Q from -0.2% preliminary reading. GDP revised down to -0.1% Y/Y from 0.0% preliminary. [Breaking News, Global & FX, Top Stories] Comment!
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4:17 AM Confidence in Germany's business sector ticked down in May, with IFO's Current Assessment coming in at 113.3 vs. 117.5 in April. Business Climate comes in at 106.9 vs. 109.9 prior. [Global & FX] Comment!
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4:10 AM BOJ governor Shirakawa says the bank is committed to easing, but won't do so solely to weaken the yen. Shirakawa adds the "biggest factor affecting currency moves now is investors' risk aversion," and there's no evidence that an expanded monetary base will weaken the currency. Currently: USD -0.13% to ¥79.36. [Global & FX] 1 Comment
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4:04 AM Eurozone flash PMI composite index comes in at 45.9 in May, a 35-month low, vs. 46.6 expected and 46.7 previous. Manufacturing at 45.0 vs. 45.9 prior. Services at 46.5 vs. 46.9 prior. [Breaking News, Top Stories, Global & FX] 4 Comments
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3:50 AM BBVA (BBVA) is considering the sale of its pension businesses in Latin America, calling it an attractive but non-core unit. BBVA is slow-boating it, saying the strategic review will take several quarters and a decision is unlikely to be made this year. [M&A, Financials] Comment!
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3:46 AM German Q1 exports +1.7% Q/Q, a sharp turnaround from -1.5% in Q4. Imports flat Q/Q, up from -0.6% in Q4. [Global & FX] Comment!
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3:32 AM German flash manufacturing PMI at 45.0 in May, down from 46.2 in April. Services unchanged at 52.2. Composite output index at 49.6, down from 50.5 prior and a six-month low. [Global & FX, Breaking News] Comment!
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3:27 AM Shell (RDS.A) extends its $1.8B offer to acquire Cove Energy (CNVGF.PK) to June 13, after Thailand's PTT Exploration came in with a higher $1.9B bid yesterday, sending Cove shares +11.2% in London to 249p, above PTT's 240p/share bid. Some expect Shell to pony up as much as $2.5B; Shell plays coy - it's "considering its options and will make a further announcement if appropriate." (previously) [M&A, Commodities, Top Stories] Comment!
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3:14 AM Rio Tinto (RIO) sticks to its aggressive iron ore expansion plans, confirming its global output capacity could almost double to 450M metric tons by 2016. Despite China's slowing growth, Rio expects strong long-term demand for iron ore - though reports earlier this week said Chinese buyers are deferring or defaulting on coal and iron ore deliveries following a drop in prices. [Commodities] Comment!
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2:05 AM HSBC's flash estimate of China's PMI: 48.7, down from last month's 49.3. If the preliminary reading is confirmed on June 1, it will mark seven months of manufacturing contraction, bolstering the case for more stimulus. [Global & FX] Comment!
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2:01 AM German final Q1 GDP comes in at +0.5% Q/Q and +1.7% Y/Y, both in-line with preliminary readings. [Breaking News, Global & FX] Comment!
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12:00 AM Thursday's economic calendar:
8:30 Durable Goods
8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 Fed's Dudley: 'Regional Economy'
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet 1 Comment
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