Nikkei soars anew as BOJ gets busy. The Nikkei (NYSEARCA:NKY) jumped 2.8% to 13,192.59, its highest close since August 2008, while the yen dropped below 99 to the dollar for the first time in four years, as the Bank of Japan began its grand stimulus experiment in its attempt to pull the country out of deflation. The BOJ said it would acquire ¥1T ($10.3B) of Japanese government bonds with maturities of 5-10 years and ¥200B of bonds with maturities exceeding 10 years. At the time of writing, the yen was -1.1% at 98.53 to the dollar.
GE to buy Lufkin Industries in $3.3B deal. General Electric (NYSE:GE) has agreed to acquire Lufkin Industries (NASDAQ:LUFK), a provider of pumps and other equipment to the oil and gas industry, for $88.50 a share in a $3.3B deal. The price represents a 38% premium to Lufkin's close on Friday. "GE (is) putting together (a) soup to nuts oil service company now because of U.S. drilling," Jim Cramer tweeted. Lufkin's shares were +38% premarket, while those of main rival Weatherford International (NYSE:WFT) were +2.1%.
UPS challenges EU over TNT deal. UPS (NYSE:UPS) has appealed the European Commission's decision to block the company's proposed €5.16B purchase of TNT Express (OTCPK:TNTEF), saying that the regulator's case was "factually and legally erroneous." UPS abandoned the bid in January because of the EU's opposition.
Top Stock News
Macy's and J.C. Penney set to return to court. Macy's (NYSE:M) and J.C. Penney (NYSE:JCP) are due to appear in court today following the apparent failure of efforts to negotiate a settlement in their dispute over JCP's deal to sell Martha Stewart products in its stores despite the latter's contract with Macy's. Executives with J.C. Penney are due to testify later in the day.
Google eyes $1B WhatsApp. Google (NASDAQ:GOOG) is reportedly in talks to buy WhatsApp, which is looking for $1B. Acquiring the company would give Google control of a mobile messaging giant with hundreds of millions of users and deals with leading international carriers, as well as a platform that has become a thorn in Facebook's (NASDAQ:FB) and perhaps Skype's (NASDAQ:MSFT) side. It's worth noting, though, that a December Facebook/WhatsApp rumor proved to be unfounded.
Alcoa's earnings seen hurt by falling aluminum prices. It's hard to believe but earnings season is with us already, with Alcoa (NYSE:AA) set to kick off proceedings after the bell. Analysts estimate that Q1 EPS fell to $0.08 from $0.10 last year while revenue slipped 2% to $5.89B, hurt by the seventh quarter in a row of declining or flat raw aluminum prices. The trend comes despite Alcoa's strategy to cut output by closing smelters and production lines.
Chesapeake to keep FTS holding. After saying for two years that it planned to sell its 30% stake in fracking company FTS, Chesapeake (NYSE:CHK) reportedly intends to keep hold of the asset. The stake was once worth $2B but has fallen in value, hurt by FTS's heavy debt load and a slowdown in gas drilling.
CEO pay at major companies rises 2.8%. The median total salary for the 100 highest-paid CEOs of major companies edged up 2.8% to over $14M in 2012, while the cost of perks, such as the use of private jets, jumped 19% to $320,635. Oracle's (NASDAQ:ORCL) Larry Ellison was the top earner, receiving $96.2M in salary, perks and bonuses, and $90.7M in stock options. Other CEOs in the top 10 include HCA's (NYSE:HCA) Richard Bracken and Disney's (NYSE:DIS) Robert Iger.
Arizona bank shut down. Regulators closed Gold Canyon Bank in Arizona on Friday, bringing the total number of bank failures this year to five. The cost to the FDIC's Deposit Insurance Fund is estimated at $11.2M.
Top Economic & Other News
Disability claims spike following recession. The number of people receiving disability benefits has jumped from 7.1M in December 2007 to an estimated 8.9M in March, or 5.4% of the civilian workforce. That compares with just 1.7% in 1970. The latest trend costs 0.6% of national output, or equivalent to around $95B a year. With the disability program giving people little incentive to leave it and find work, Congress has started to make noises about reform.
Illinois set for battle over plugging $100B pension gap. Illinois' Senate is poised to begin a two-month effort today to introduce pension reform that will help address almost $100B in unfunded liabilities. One proposal is to place restrictions on cost-of-living increases on pension payments and another involves asking workers to forgo state-funded healthcare care in retirement. The unions, of course are opposed, while the state's constitution makes it difficult to enact reform.
Affordable Care Act not so affordable for small companies. Small businesses are considering their strategies ahead of the introduction of the Affordable Care Act in January amid fears of a steep rise in costs because of a provision that will force them to provide health coverage to full-time workers. These include dropping coverage for all employees and paying fines instead - as this could prove cheaper - and forcing full-time staff to become part-time.
Portuguese stocks fall after court strikes down austerity measures. Portugal's PSI 20 was -0.8% at around midday in Europe after the country's Constitutional Court struck down proposed austerity measures, including cuts in public-worker wages and state pensions. The government will look to reduce spending in other areas but warned that the decision makes it "very challenging" for the nation to meet its bailout targets.
Crisis prompts Europeans to hoard dollars. The amount of dollar cash in circulation has jumped 42% in the past five years as the proportion held abroad climbed from 56% to nearly 66%. With the eurozone crisis boosting demand since 2010, don't be surprised if the trend strengthens following the raid on Cypriot bank accounts, especially as the EU is preparing a new law that would force haircuts on large deposits in banks that fail.
Italy OKs €40B payment to private sector. Italy has approved a plan to pay €40B to settle a giant outstanding balance with private companies, which became a major problem when bank credit to businesses dried up. The government hopes that paying its bills will stimulate the economy, but said the decision to make good on its commitments wasn't easy. "We have to follow a path between helping our economy recover and maintaining budget discipline," Italy's Economic Minister said.
In Asia, Japan +2.8% to 13193. Hong Kong flat at 21718. China -0.6% to 2212. India -0.1% to 18438.
In Europe, at midday, London +0.3%. Paris +0.7%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.2%. S&P +0.3%. Nasdaq +0.3%. Crude +0.95% to $93.58. Gold +0.1% to $1577.50.
Today's economic calendar:
8:30 Chicago Midwest Mfg. Index
10:00 Employment Trends Index
Notable earnings after today's close: AA
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