Dismayed by stock decline, Apple to borrow to return capital. Apple (AAPL) was marginally lower premarket after beating earnings estimates, but offering weak FQ3 guidance. The company is pulling a mini-David Einhorn, saying it will more than double its return of capital to shareholders to $100B through 2015, and announcing it intends to borrow to do so. Einhorn: "We applaud Apple's decision to borrow money ... an idea that was off the table only months ago."
AT&T misses estimates. AT&T (T) fell 1.5% premarket after Q1 revenue came in shy of analyst expectations as landline revenue fell 1.8% and wireless business growth paled in comparison to Verizon (VZ). The company added 296K contract customers in Q1, compared to 677K for Verizon. "AT&T is still on catch-up mode relative to Verizon and the customer gains show it," says analyst Roger Entner. On a better note, the company saw an 18% rise in average revenue per user - ARPU - for wireless customers, a sign smartphone customers are paying more for wireless data.
Stocks tumble then recover following Twitter hoax. A tweet from the Associated Press just before 1:08 PM ET reported two explosions at the White House and said the President had been injured. Minutes later, the AP said its Twitter account had been hacked and the tweet was a fake, and the White House confirmed there were no explosions. In the meantime, accounts based on algorithms from scanning news feeds sold heavily, erasing 145 points from the DJIA in an instant. Within minutes stocks had recovered. The Syrian Electronic Army - which has recently targeted other media groups - took responsibility for the hack.
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Barclays misses analyst profit expectations. Barclays (BCS) posted a 25% Y/Y decline in profit in Q1 to £1.79B, shy of estimates for £2.1B. Profit at its investment banking unit, however, beat expectations as the bank says it's on track to meet targeted cost cuts. "The Barclays thesis can't work unless the returns on the investment bank work, and we like the clear strategy," says Bernstein's Chirantan Barua. Shares are up marginally premarket.
Nintendo Wii U sales shy of target. Nintendo (OTCPK:NTDOY) swung to a profit for the fiscal year ended in March, in part thanks to a weaker yen, but reported sales of just 3.45M Wii U systems, short of the 4M target. The company expects new game launches to spur sales of 9M of the units in this fiscal year. Nintendo, of course, is striving to save its business model of dedicated game consoles and proprietary software amid the explosion of free or inexpensive games available anywhere on smartphones or tablets.
Wal-Mart cuts deal to offer "Man of Steel" tickets. Wal-Mart (WMT) will be the only place to buy tickets to the initial screenings of the next Superman film "Man of Steel" after inking a deal with the filmmaker, Warner Bros. (TWX). Those who purchase tickets will receive a code to preorder the film on Blu-ray, DVD, and digital download, with extra content not otherwise available. Both movie studios and retailers like Wal-Mart are reaching for ways to boost home video sales - off 50% in the past 8 years as consumers turn to online rentals.
Bid for merger of exchanges gets boost. The merger bid between IntercontinentalExchange (ICE) and NYSE Euronext (NYX) received good news as the European Commission indicated its intention to review the deal. The exchanges had been worried it would have to submit to a review process from individual EU states which - on their own - were seen as more likely to oppose the merger.
Lloyds plans IPO to sell branches. Lloyds Banking Group (LYG) announced its intention to sell 632 branches in an IPO after Co-Operative Bank pulled out of an agreement to buy them. Co-Op had been struggling to complete the $1.14B deal since last summer as regulators were concerned its managers didn't have the experience to run the operation and that the bank itself was shy of necessary capital.
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German business sentiment falls in April. Germany's Ifo business climate index fell to 104.4 in April, down from 106.7 in March. It's the 2nd consecutive decline for the index and missed not just consensus estimates of 106.2, but the lowest forecast of the group at 104.4. The Dax was higher midday with the news reinforcing ideas the ECB is set to further ease policy.
ECB ready to cut rates. Momentum is building for the ECB to cut rates at its policy meeting next week, reports Reuters, citing senior sources at the central bank. The meeting is taking place away from the bank's Frankfurt home, and the ECB rarely changes policy at away games, but recent economic data paint a bleak enough picture to allow a move. "Now we are free," says one senior official. "For the next meeting in Bratislava, I would look at rates, certainly."
In Asia, Japan +2,2% to 13826. Hong Kong +1.7% to 22183. China +1.5 to 2218. India closed.
In Europe, at midday, London flat. Paris +0.6%. Frankfurt +0.5%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq +0.2%. Crude +0.7% to $89.81. Gold +1% to $1422.15.
Notable earnings before today's open: ABB, ABX, ASH, ATI, AVY, BA, BYD, CFR, CKSW, COR, CP, CS, CVE, DPS, EDU, ELN, EMN, ERIC, F, FDML, GD, GLW, GRA, HCBK, HES, ICON, LAD, LL, LLY, LO, MDCO, MSI, MTH, NDAQ, NOC, NS, NVS, NYCB, OC, OCR, OSIS, PG, PLD, PX, RES, ROK, S, SO, SVU, TEL, TKR, TMO, TROW, TUP, USG, VLY, VMED, WAB, WHR, WLP, WM, WYN
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