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  • Obama limits exec pay. Obama will announce today a policy of capped compensation for top executives at companies receiving 'exceptional' federal aid in the future. The cap will go into effect at $500,000 annually. Any additional compensation will have to be paid in restricted stock that won't vest until taxpayers have been paid back. The new cap will also require increased transparency in the use of corporate jets, office renovations, holiday parties and golden parachute offers. The cap will not be applied retroactively to companies that have already received rescue money.
  • Backing toxic assets. Toxic-asset guarantees are gaining momentum as talks continue on possible bank-rescue plans. Treasury's Geithner is skeptical of setting up an official 'bad bank' and the guarantees would focus on troubled illiquid assets without taking them off banks' balance sheets. Senator Charles Schumer called debt guarantees 'a favorite choice' vs. a bad bank plan that could cost as much as $4T. Not everyone is on board, however. Former Fed governor Mishkin is one of the supporters of the bad bank idea, warning "you have to make sure that when all is said and done, you actually have financial firms that are either healthy and the ones that are not healthy can’t stay in business." Obama will likely release a comprehensive plan sometime next week.
  • Live Nation Ticketmaster? Sources say Ticketmaster (TKTM) and Live Nation (LYV) are in merger talks and could announce a deal as early as this week. Combining the two companies would create a music industry powerhouse with a combined market value of over $700M and ties to over 200 artists. If the companies move forward with a merger, they could potentially face antitrust issues from managers, record companies, ticketing companies and concert promoters. Talks are said to be in an advanced stage, but it is not yet clear which company will be acquiring the other.
  • AT&T eyes wireless assets. Verizon Wireless (VZ) needs to divest around $3B in wireless assets as part of its purchase of Alltel Corp., and rival AT&T (T) is emerging as a strong bidder. Though other companies are interested in the assets as well, AT&T is in the strongest financial position and could walk away with a large chunk of the assets. Critics say the assets, including 2.1M wireless subscribers in 22 states, shouldn't be transferred from one giant telecom provider to another since it's not in the interest of consumers. The Department of Justice has already said it will examine the sales to make sure there are no competitive issues.
  • Panasonic pans to loss. Panasonic (PC) warned it will post an annual loss of ¥380B ($4.2B) vs. previous guidance for a ¥30B profit, and will cut 15,000 jobs as it faces slowing demand and a stronger yen. Panasonic is the world's No. 1 plasma TV maker but the strong yen has taken away the company's competitive edge overseas. "Sales fell in all our business segments in the third quarter," said Panasonic director Makoto Uenoyama. "We expect sharper sales declines in this quarter, and profits are likely to shrink in every segment."
  • Mining giant takes profit hit. BHP Billiton (BHP) reported H1 profit fell a larger-than-expected 57% on the costs of closing mines and plants after a precipitous fall in metal prices. Net income fell to $2.6B. CEO Marius Kloppers said reduced demand for steel will have a 'pronounced impact' on this half's earnings along with the weak outlook for the global economy. Cashflow from operations rose 74% to $13B, and the company raised its H1 dividend 41% to $0.41.
  • Elpida may seek aid. Japan's Elpida (OTC:ELPDF), the world's third-largest maker of memory chips, may seek public funds under a Japanese government program designed to help non-financial companies during the global economic crisis. Elpida could ask for hundreds of millions of dollars and would likely be granted the money in exchange for issuing stock to the Development Bank of Japan. Elpida has been hit by falling chip prices and declining demand. Shares +6.2% in Tokyo.
  • Retail sales. Retail chain store sales rose 1.6% from a week ago, ICSC reported, and dropped 2.5% Y/Y. "Though January ended with a solid sales increase for the week, sales volatility clearly continues for retailers and the industry amid a weak year-over-year trend." According to Redbook, national chain store sales fell 2.7% in the first four weeks of January, worse than the expected 2.2% fall. Sales -2.3% Y/Y. Bad weather hurt sales, though snack foods and beverages got a Super Bowl bump.
  • Home sales improve. December's pending home sales rose 6.3% to 87.7, NAR said, citing improved affordability conditions. The gain, "spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month."
  • Mortgage apps rise. Mortgage applications rose 8.6% from a week ago, MBA says, on a seasonally adjusted basis. The average interest rate on 30-year fixed-rate mortgages increased to 5.28% from 5.22%.

Earnings: Wednesday Before Open

  • Alcatel-Lucent (ALU): Q4 loss of €3.89B, its eighth straight, including a writedown of €3.91B on goodwill and intangible assets. Analysts expected a profit of €159M net of any writedowns. Sales fell 5.3% to €4.95B, vs. €4.8B consensus. (PR)
  • ITT Industries (ITT): Q4 EPS of $0.82 beats by $0.05. Revenue of $2.9B (+16.5%) vs. $2.7B. (PR)
  • Kraft (KFT): Q4 EPS of $0.43 misses by $0.01. Revenue of $10.77B (+6.2%) vs. $11.29B. Sees 2009 EPS of $1.88 vs. $2.02 due to currency effect and pension costs, partially offset by improved performance. (PR)
  • PP&L (PPL): Q4 EPS of $0.46 in-line. Revenue of $2.5B (+56.6%) vs. $1.5B. (PR)
  • Thermo Fisher (TMO): Q4 EPS of $0.88 beats by $0.05. Revenue of $2.6B (+1.0%) in-line. (PR)
  • Time Warner (TWX): Q4 EPS of $0.23 misses by $0.03. Revenue of $12.3B (-2.7%) vs. $12.7B. (PR)
  • Time Warner Cable (TWC): Q4 EPS of $0.35 beats by $0.03. Revenue of $4.4B (+7.7%) in-line. (PR)
  • Windstream (WIN): Q4 EPS of $0.25 in-line. Revenue of $777.5M (-4.8%) vs. $780.9M. (PR)

Earnings: Tuesday After Close

  • Ace Ltd. (ACE): Q4 EPS of $1.87 beats by $0.07. (PR)
  • Alliance Data Systems (ADS): Q4 EPS of $1.19 beats by $0.03. Revenue of $508M (-2.7%) vs. $528M. Sees 2009 EPS of $5.15-5.20 vs. $5.07. (PR)
  • BRE Properties (BRE): Q4 FFOs of $0.68 misses by $0.04. Revenue of $88.3M (+4.6%) vs. $89.6M. (PR)
  • Centex (CTX): FQ3 EPS of -$5.34 misses by $2.07. Revenue of $872M (-53.4%) vs. $895M. Finishes quarter with $1.47B in cash. "We continued to move with urgency to reduce our cost structure, accelerating overhead reductions and further reducing land-related spending." (PR)
  • Disney (DIS): FQ1 EPS of $0.41 misses by $0.10. Revenue of $9.6B (-8.2%) vs. $10.07B. (PR)
  • Electronic Arts (ERTS): FQ3 EPS of $0.56 misses by $0.32. Revenue of $1.65B vs. $1.9B. To reduce workforce by 11% (1,100 jobs). Sees 2009 EPS of -$0.35 vs. $0.60 and revenue of $4.2-4.25B vs. $4.68B. (PR)
  • Illumina (ILMN): Q4 EPS of $0.24 beats by $0.07. Revenue of $161M (+42.9%) vs. $155M. (PR)
  • Leggett & Platt (LEG): Q4 EPS of $0.03 misses by $0.05. Revenue of $882M (-15.1%) vs. $863M. (PR)
  • Massey Energy (MEE): Q4 EPS of $0.63 misses by $0.16. Revenue of $755M vs. $799M. (PR)
  • MetLife (MET): Q4 EPS of $0.19 beats by $0.05. Revenue of $13.96B vs. $12.51B. (PR)
  • Nalco (NLC): Q4 EPS of $0.36 beats by $0.13. Revenue of $1.03B (-0.3%) in-line. "It will be a difficult year, with expectations for unusually negative currency impacts and continued downward pressure across the global, industrial economy. Our expectation is that we will outperform relative to our competitors." (PR
  • Pioneer Natural Resources Company (PXD): Q4 EPS of -$0.15 misses by $0.21. Revenue of $473M (-11%) vs. $477M. (PR)
  • Riverbed Technology (RVBD): Q4 EPS of $0.19 beats by $0.01. Revenue of $92.2M (+20.8%) vs. $90.2M. (PR)
  • Trimble Navigation (TRMB): Q4 EPS of $0.24 beats by $0.01. Revenue of $268M (-14.3%) vs. $272M. (PR)
  • UnumProvident (UNM): Q4 EPS of $0.63 beats by $0.01. Revenue of $2.32B (-12.1%) vs. $2.62B. Sees 2009 EPS of $2.45-2.55 vs. $2.64. (PR)
  • Yum! Brands (YUM): Q4 EPS of $0.46 beats by $0.01. Revenue of $3.38B (+3.7%) in-line. "It is important to note that we do not need to access the credit markets in 2009 to finance our company and our strong cash flow and balance sheet provide us with the flexibility to successfully navigate through these challenging financial times." (PR)

Today's Markets

  • Asia markets closed in the green. Nikkei +2.7% to 8,039. Hang Seng +2.25% to 13,064. Shanghai +2.3% to 2,108. BSE +0.6% to 9,202.
  • In Europe at midday, London +0.4%. Paris +1.1%. Frankfurt +0.8%.
  • U.S. futures: Dow -0.1%. S&P +0.01%. Nasdaq -0.2%. Crude +1.7% to $41.49. Gold +0.9% to $900.20.

Wednesday's Economic Calendar

Seeking Alpha editor Eli Hoffmann contributed to this post.


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