Office Depot, OfficeMax in merger talks. Office Depot (ODP) and OfficeMax (OMX) are reportedly in merger talks in a deal that could generate synergies of up to $700M, which is over a third of their combined market cap. SA Author Quoth the Raven provides "Four Reasons Why Two Wrongs Make A Right." Office Depot's shares were +8.9% premarket. Meanwhile, the retailer is also reportedly in discussion to sell its 50% stake in its Mexican unit to Grupo Gigante, which already owns the other half. The holding may be worth $700M.
Chinese army implicated in cyber industrial espionage. Chinese army unit 61398, also known as "Comment Crew," has been identified as most probably responsible for numerous cyberattacks on U.S. targets, security company Mandiant has alleged in a report. While Mandiant didn't name specific targets, victims include Coca Cola (KO) and VMware's (VMW) RSA, as well as a firm with access to over 60% of oil and gas pipelines in North America.
Top Stock News
Boeing engineers set to complete strike vote. Around 23,000 members of the Speea engineers and technical workers union who work at Boeing (BA) are due to finish voting today on whether to accept the company's latest contract offer and whether to authorize strike action. Speea has recommended that members reject Boeing's proposal, although the union would be unlikely to call a strike before next month if it receives approval to do so.
Amplat halts South African ops after violent clashes. Anglo American Platinum (AGPPY.PK) has suspended production at all its South African operations today due to wildcat strikes after at least 13 people were injured in inter-union violence at one of its mines yesterday. The stoppage follows violent industry wide strikes last year, which cost the mining industry 15B rand ($1.68B) of lost revenue, and comes ahead of wage talks. Platinum futures were +1.2% premarket.
Einhorn and Apple set for court showdown... David Einhorn's Greenlight Capital is due in court today, when it will ask a judge to block a vote of Apple's (AAPL) investors over three different proposals unless they are considered separately. Einhorn is particularly interested in Apple's desire to give shareholders the power to approve the issuing of preferred stock, which he opposes. The vote is scheduled for next week.
...and so are Macy's, J.C. Penney and Martha Stewart. Macy's (M) is scheduled to go to court today to ask a judge to permanently stop J.C. Penney (JCP) from selling certain Martha Stewart Living Omnimedia (MSO) products in its stores. Macy's argues it has exclusive rights to Martha Stewart items in categories such as bedding and cookware. For the latter, being able to sell products at multiple retailers is crucial to reversing falling sales.
NY Fed wants to let BofA off over AIG assets. The NY Fed is apparently trying to let Bank of America (BAC) off the hook for possible sizable legal claims related to former AIG (AIG) mortgage securities held by Maiden Lane II following the insurer's bailout in 2008. AIG has sued BofA to recover some of the $18B losses it suffered on the assets, but the bank argues that AIG gave its right to sue to the NY Fed when it sold the assets. The latter agrees and has released BofA from most of the connected liabilities.
Dell's earnings seen falling. Dell (DELL) is scheduled to release its FQ4 earnings after the bell, with the Street forecasting that EPS fell to $0.39 from $0.51 and that revenue slid 11.9% to $14.12B. The problem for Michael Dell and his co-acquirers in the company's buyout is that if the results are too good, recalcitrant investors might have more ammunition in their quest for a higher offer.
Loeb cuts Herbalife stake as Icahn raises his. Daniel Loeb looks like he might be slowly backing out of the battle of the hedge fund titans over Herbalife (HLF), with his Third Point firm reportedly selling part of its position in the company. The fund disclosed a passive 8.24% stake on January 9. Late last week, Carl Icahn said he'd increased his stake in Herbalife to 13% in what was termed the "St Valentine's Day Massacre of Bill Ackman's Herbalife short." Herbalife's Q4 earnings are due out today, with EPS seen rising to $1.03 from $0.86 and revenue jumping 19.2% to $1.05B.
Top Economic & Other News
German investor sentiment improves again. The ZEW index of German investor expectations has risen for the third month in a row in February, increasing to 48.2 from 31.5 in January and coming in well above consensus of 35. However, the current situation index unexpectedly fell to 5.2 from 7.1. Investors "have made their peace with the weak fourth quarter," says ZEW. "In their opinion the German economy faces fewer headwinds from the euro crisis than throughout the last months."
China seen trying to curb property market further. China is expected to introduce more measures to dampen rising property prices, while several cities have already reportedly tightened credits of housing provident fund loans. The speculation dragged down the main indexes on the mainland and in Hong Kong. It comes after home sales in China's 10 largest cities jumped almost four-fold to 8.5M square meters in the first five weeks of the year.
Abe threatens BOJ independence. Japan's economy and finance ministers today moved to moderate comments yesterday from Prime Minister Shinzo Abe that he could seek to change the Bank of Japan law if it doesn't achieve its 2% inflation target. Finance Minister Taro Aso said the government has no immediate plans to revise the law, nor to buy foreign bonds, which Abe had said was an option. The yen has firmed up on Aso's remarks about the bonds, sending Tokyo shares falling.
Americans recover $13.5T of wealth lost in recession. Americans have regained $13.5T of $16T lost during the recession, Alan Krueger, the Chairman of the White House Council of Economic Advisers, has told the WSJ. "If you destroy that much wealth, people need to rebuild their retirement positions and they need to save for their children's educations," Krueger said. "That is a big challenge for consumption going forward."
Thieves steal $50M in diamonds in airport heist. Armed robbers have made off with $50M worth of diamonds after raiding a Brink's (BCO) truck at Brussels airport as the jewels were being loaded onto a Swiss aircraft. The heist took just a few minutes, with no shots being fired and no-one being injured.
In Asia, Japan -0.3% to 11372. Hong Kong -1% to 23144. China -1.6% to 2383. India +0.7% to 19636.
In Europe, at midday, London +0.3%. Paris +1.3%. Frankfurt +0.9%.
Futures at 7:00: Dow +0.15%. S&P +0.1%. Nasdaq +0.1%. Crude -1.9% to $95.43. Gold +0.3% to $1613.60.
Today's economic calendar:
10:00 NAHB Housing Market Index
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