Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
Rio Tinto CEO quits as company takes $14B charge. Rio Tinto (NYSE:RIO) Chief Executive Tom Albanese is stepping down and being replaced by Iron Ore CEO Sam Walsh after Rio took a $14B non-cash impairment charge in its 2012 earnings report following problems with its Mozambique coal interests and its aluminum assets. Doug Ritchie, who led the acquisition and integration of the Mozambique operations, is also leaving. He and Albanese will receive no payoff. Shares were -0.8% premarket.

Global regulators ground Boeing's Dreamliners. The FAA and regulators in Europe, Japan, India and Qatar have ordered the airlines under their jurisdictions to ground their 787 jets until Boeing (NYSE:BA) can resolve problems with the aircraft's lithium-ion batteries. Analysts fear that the issue could require a redesign of electrical systems and that the production of the planes could be delayed. Still, Boeing, which has won orders for 850 Dreamliners, isn't expected to receive cancellations. Shares were -2.9% premarket.

BofA earnings beat forecasts but revenues miss. Bank of America's (NYSE:BAC) net Q4 EPS came in at $0.03 while revenue of $18.89B missed by $3.51B. Adding back numerous (mostly litigation-related) charges and taking out non-operating related gains, the bank earned $0.21. Consensus was for $0.02.

Top Stock News
Dell suitors close in on financing for buyout. Private-equity firm Silver Lake and its partners are close to lining up $15B in financing for a buyout of Dell (NASDAQ:DELL), reports Bloomberg. At least four large banks - Credit Suisse (NYSE:CS), Royal Bank of Canada (NYSE:RY), Barclays (NYSE:BCS) and Bank of America (BAC) - could provide a bridge loan, with the lenders informally gauging interest in the paper from debt investors.

eBay earnings top forecasts as mobile grows strongly. eBay's Q4 earnings beat expectations despite net profit falling to $751M from $1.98B, when eBay sold Skype, with EPS coming in at $0.70 and revenue climbing 18% to $3.99B. eBay provided Q1 guidance that was below consensus but 2013 forecasts that were in line. The company enjoyed a strong performance from its mobile offerings as its marketplace payment volume reached $13B last year, topping the firm's $10B projection. PayPal also performed well, with sales rising 24%. Shares were +1.7% premarket.

Dow Chemical faces $3B antitrust damages if it loses lawsuit. Dow Chemical (NYSE:DOW) could have to pay damages of over $3B if it loses a trial in which it is accused of conspiring to fix the price of urethane chemicals, which are used in foam products, from at least 1999-2003. The plaintiffs are seeking $1B+, an amount that would be trebled under antitrust law. While Dow is going to court, other defendants settled, with Bayer (OTCPK:BAYZF), Huntsman (NYSE:HUN) and BASF (OTCQX:BASFY) paying a combined $149M.

AT&T mulls European acquisition. AT&T (NYSE:T) is reportedly considering acquiring a European telecom operator and is casting its eye on Holland's KPN (OTCPK:KKPNY) and the U.K.'s Everything Everywhere. With share prices depressed because of the economic slump, AT&T reckons it might be worth buying into Europe before the data market matures to the same level as in the U.S.

GM to invest $1.5B in North America in 2013. GM (NYSE:GM) intends to invest $1.5B in its North American facilities this year as part of an $8B global program, adding to the $10.2B the car-maker has spent on the continent since its 2009 bankruptcy. GM also reckons it can cut the cost of producing the Chevrolet Volt plug-in hybrid by thousands of dollars.

Intel's profits seen falling. Intel's (NASDAQ:INTC) Q4 earnings are due out after the bell today, with analysts expecting that EPS fell to $0.45 from $0.64 while revenue dropped to $13.52B from $13.89B. Intel is struggling to overcome a falling market for its PC chips and the European economic slump, although it is benefiting from a shift to new data-center technologies. The chipmaker is also about to undergo a leadership change with the departure of CEO Paul Otellini. Analysts don't expect an announcement about his successor today.

Top Economic & Other News
Consumer regulator to outline new mortgage rules. The Consumer Financial Protection Bureau is today due to unveil rules that will require mortgage servicers to improve their efforts to ensure that struggling borrowers are able to keep their homes. Among other things, lenders will have to assess homeowners for all loan-assistance options and not those "that are most financially favorable for the servicer."

Editors' Picks
A Recent History Lesson: How To Play The Dell Acquisition
IBM: Despite Shenanigans, Big Blue's Still Got It
Commodity Prices Continue To Be A Key Issue

Today's Markets:
In Asia, Japan +0.1% to 10610. Hong Kong -0.1% to 23340. China -1.1% to 2285. India +0.7% to 19964.
In Europe, at midday, London +0.1%. Paris +0.9%. Frankfurt flat.
Futures at 7:00: Dow flat. S&P +0.2%. Nasdaq +0.2%. Crude +0.5% to $94.68. Gold -0.1% to $1682.10.

Today's economic calendar:
8:30 Housing Starts
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
12:05 PM Fed's Lockhart speaks at the Bloomberg Globlal Markets Summit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: APH, ASML, BAC, BBT, BLK, C, FAST, FITB, HBAN, PNC, TSM, UNH

Notable earnings after today's close: ASBC, AXP, COF, INTC, PBCT, XLNX

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