SEC probes pre-buyout trade in Heinz options. The SEC is reportedly investigating a surge in trading of Heinz (HNZ) call options on Tuesday, one day before the announcement yesterday that the company is being bought by Berkshire Hathaway (NYSE:BRK.A) and 3G Capital for $28B, or $72.50 a share. A Heinz $65 call option expiring on June 22 apparently had a volume of 2,593 contracts on Wednesday vs an average over the prior 20 days of 13.
Herbalife soars after Icahn increases stake and talks about buyout. Herbalife (NYSE:HLF) shares stormed 25% higher premarket after Carl Icahn said late yesterday that he's bought 14M shares, representing a 13% stake, in the company. Icahn said he has "conducted a significant analysis" and "concluded that the company has a legitimate business model, with favorable long-term opportunities for growth." But here's the catch for the management: Icahn wants talks about strategic alternatives to enhance shareholder value, such as a recapitalization or going private.
G-20 to focus on currency in Russian parley. G-20 Finance Ministers are due to meet in Moscow today and tomorrow, where discussions are set to include how to fund infrastructure building, changing a 2010 Toronto agreement about cutting deficits because many of the commitments haven't been met, and, of course, currency movements. Russia wants "specific" language opposing forex manipulation, although there seems to be little chance that Japan will get singled out.
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CBS shares fall after earnings miss. CBS (NYSE:CBS) shares slipped 1.3% premarket after the TV company's Q4 earnings missed expectations as EPS came in at $0.64, and despite revenue edging up 2% to $3.7B. Net profit rose 6.2% to $393M and ad sales grew 3.4% to $2.42B, boosted by the election season, while affiliate and subscription fees improved 8.6%. On the earnings call, CEO Les Moonves said CBS is in talks with Intel (NASDAQ:INTC) about a programming deal related to the latter's upcoming Web-based TV service.
Japanese shares drop ahead of G-20 meeting. Japanese stocks fell sharply today as the yen traveled in the opposite direction ahead of today's meeting in Moscow of the G-20, whose utterances this week about forex matters have caused all sorts of muddle. Other Asian stocks were fairly flat and those in Europe were mixed; premarket, U.S. stock futures were lower, while the yen was +0.2% vs the dollar. (See below for more details)
Wal-Mart U.K. ops get further enmeshed in horse-meat scandal. Wal-Mart's (NYSE:WMT) U.K. unit Asda has become further ensnared in the meat scandal rocking Europe, saying it is withdrawing its beef bolognese sauce after discovering horse DNA in the product. Asda is also taking three other items from the same supplier, Greencore (OTC:GNCGF), off the shelves as a precaution. In January, Asda withdrew four burger products after horse DNA was found in them.
P&G issues profit warning following Venezuelan devaluation. Procter & Gamble (NYSE:PG) has cut its earnings outlook for the current quarter and 2013, and expects to post one-time charges of $200M-$275M following Venezuela's surprise currency devaluation. P&G isn't the only company to reduce its guidance following the country's action, with DirecTV (DTV) and Merck (NYSE:MRK) also affected.
Tiffany sues Costco over fake rings. Tiffany (NYSE:TIF) is suing Costco (NASDAQ:COST) for allegedly selling rings that the latter falsely advertised as being made by the luxury jewelry seller. Tiffany described the products as "counterfeit diamond engagement rings."
Momentum for Internet sales tax strengthens. Legislators yesterday introduced the Marketplace Fairness Act in the Senate, which would enable states to collect sales taxes for online transactions carried out in their jurisdictions. Many Republicans and major Internet retailers have long opposed such a tax but sentiment has changed after Amazon (NASDAQ:AMZN) and GOP governors including Chris Christie expressed support for a federal bill.
Carnival seen escaping major damage from cruise liner woes. Carnival Corp's (NYSE:CCL) Carnival Triumph cruise liner limped into port last night with the help of tugboats, four days after an engine-room fire left it stricken in the Gulf of Mexico. Talk of overflowing toilets and the vessel turning into a giant Petri dish has been a PR nightmare for Carnival, although the impact on its finances is seen as limited, as are its legal liabilities.
Hedge funds divided over Apple. A worrying trend or a contrarian indicator? Several major hedge funds unloaded their positions in Apple (NASDAQ:AAPL) in Q4, including Dan Loeb's Third Point, Leon Cooperman's Omega Advisors and Thomas Steyer's Farallon Capital. However, David Einhorn's Greenlight Capital raised its stake to 1.3M shares from 1.1M and bought 275,000 call options.
Blackstone stays the course with SAC Capital, for now. Blackstone (NYSE:BX) will keep most of its $550M investment in SAC Capital for another three months as the private-equity firm awaits developments in the government's insider-trading probe into SAC. Blackstone's decision came ahead of a quarterly deadline yesterday for SAC's clients to decide whether to keep their money in the hands of Steve Cohen, who had warned of withdrawals of up to $1B.
Top Economic & Other News
How Pittsburgh recovered from the decline of manufacturing. Pittsburgh, the birthplace of Heinz (HNZ) and U.S. Steel (NYSE:X), was once one of the great U.S. manufacturing cities, but started to decline in the 1970s when its factories began to face competition from lower-wage areas around the world. The NYT shines a light on how Pittsburgh has transformed into "a new economy based on small technology and medical companies with unfamiliar names."
In Asia, Japan -1.2% to 11174. Hong Kong +0.1% to 23445. China closed. India -0.1% to 19468.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt flat.
Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -0.4% to $96.90. Gold -0.5% to $1627.
Today's economic calendar:
8:30 Empire State Mfg Survey
9:00 Treasury International Capital
9:15 Industrial Production
9:50 Fed's Pianalto: Monetary Policy and Economic Outlook
9:55 Reuters/UofM Consumer Sentiment
10:00 E-Commerce Retail Sales
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