Cypriot crisis heading for endgame. Cypriot Finance Minister Michael Sarris has left talks with Russia about a possible rescue empty handed, with the latter saying they're not interested in Cyprus's offshore gas reserves. However, Prime Minister Dmitry Medvedev has apparently said the door to a deal is not closed. Meanwhile, the EU has objected to a proposal to take over pension funds as part of a Troika bailout. The situation is fast-changing, but the ECB's Monday deadline remained the same at the time of writing.
German business confidence unexpectedly falls. Germany's closely watched Ifo Index of business confidence has unexpectedly dropped in March for the first time in five months, falling to 106.7 from 107.4 in February. The decline was due to the uncertain outcome of the Italian elections and partly because of the Cyprus crisis. However, Ifo economist Klaus Wohlrabe remains sanguine. "We shouldn't read too much into that - this is not yet a turning point," he said.
BP to repurchase $8B in shares. BP (BP) intends to buy back $8B in stock after the completion yesterday of the sale of its 50% stake in TNK-BP (OTC:TNKBF) to Rosneft (OTC:RNFTF), following which the U.K. company was left with $12.5B in cash and a 19.75% stake in the Russian oil major. The $8B is equivalent to the value of BP's original investment in TNK-BP. Shares were +3.2% premarket.
Top Stock News
Asian, European shares mostly lower. Asian and European shares have mostly fallen as the crisis in Cyprus continues to boil, although U.S. stock futures were green premarket. Japanese stocks dropped especially sharply while the yen firmed up after new Bank of Japan governor Haruhiko Kuroda yesterday offered no new details about how he's going to print his country out of deflation.
Peltz builds up stakes in Pepsi and Mondelez. Nelson Peltz's Trian Fund Management has reportedly spent at least $2B in buying stakes in Pepsi (PEP) and Mondelez (MDLZ), prompting fevered speculation as to what the activist investor is up to. One theory is that Peltz will push a merger of the companies, another is that he'll press Pepsi to break up, or that he'll just sit there and do nothing.
ING faces $1.16B in Cyprus exposure. ING (ING) shares have fallen more than 2% in Amsterdam after the bank disclosed about $1.16B of exposure to companies registered in Cyprus. However, ING said its credit risk is limited, given that most of the firms are domiciled out of the country and that the exposure is limited to letters of credit and very short-term maturity items.
Cole rebuffs American Realty's $5.7B bid. Cole Credit Property Trust has turned down a $5.7B acquisition offer from American Realty Capital Properties (ARCP), slating the proposal for being misleading and "deliberately designed to disrupt" Cole's business. The deal would create the biggest publicly traded REIT in the net lease sector, but Cole prefers to buy its external adviser, Cole Holdings, after which the plan is to go public.
Nike shares sprint higher after profit soars 55%. Nike (NKE) shares jumped 8.2% premarket after the sports-wear company's FQ1 EPS of $0.73 beat consensus and net profit soared 55% to $866M. Revenue climbed 9% to $6.2B but missed expectations as North American sales growth of 18% helped offset continued weakness in China, where revenues slumped 9%. "The U.S. business continues to be just phenomenal," said Morningstar analyst Paul Swinand. However, "for real long-term growth to be solid, it has got to come from China and emerging markets."
EU informally probes Apple over carrier deals. EU regulators are examining informal complaints from telecom carriers that the agreements which Apple (AAPL) imposes on operators breach antitrust rules and harm competition. The EU is focusing on France, although other countries may be included in the probe. One complaint is that Apple forces providers to buy a minimum number of iPhones; it then jacks up the price with each new version.
Mexico's lower house OKs telecom reform bill. Mexico's lower house of Congress has approved a telecom bill that will give authorities the power to force dominant players to sell assets, create an independent regulator and ease restrictions on foreign investment. The law will hit America Movil (AMOV) in the telecom market and Groupo Televisa (TV) in the broadcast market, although investors are hoping that America Movil will be able to compensate by being allowed to enter the TV sector.
U.K. online gambling company gets Nevada permit. As expected, Nevada has granted 888 Holdings (OTC:EIHDF) a gambling license to operate in the state, making the U.K.-listed company the first online gaming firm to receive a permit in the U.S. The move could have repercussions for Caesars Entertainment (CZR) and WMS Industries (WMS) - both of which have a partnership with 888 - Century Casinos (CNTY), Zynga (ZNGA), International Game Technology (IGT) and others.
Obama's honey coated exhortation charms Israeli investors. President Obama's visit to Israel, which is continuing through today, appears to have sparked Israeli shares even as global markets sell off. iShares MSCI Israel (EIS) has risen 1.03% over the recent five-day period while counterparts elsewhere have been falling.
Top Economic & Other News
Household net worth drops 36% in six years. The median net worth of American households dropped to $69,000 in 2011 from $82,000 in 2000 and $107,000 in 2005, a census report shows. Meanwhile, debt in households headed by older people more than doubled during the decade to a median $26,000 from $12,000, largely because of mortgage loans. The trend increases worries about the financial well-being of older Americans, whose retirement funds have been hit by the recession and rock-bottom interest rates.
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In Asia, Japan -2.4% to 12339. Hong Kong -0.5% to 22115. China +0.2% to 2328. India -0.3% to 18736.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt +0.1%.
Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.6% to $92.99. Gold -0.2% to $1611.10.
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