Japanese shares plunge again. A late sell-off in an already weak market caused the Nikkei (EWJ) to close -5.2%, taking the index's losses since the volatility began late last week to over 14%. Fears about the end of the Fed's QE program and the market undergoing a correction are cited as reasons for the turbulence, as well as the falling dollar-yen (FXY), although the equity-currency relationship seems to have become reciprocal.
Dish raises Clearwire offer to $4.40 a share. Dish (DISH) has increased its offer for Clearwire (CLWR) to $4.40 a share, easily trumping Sprint's (S) revised $3.40 bid. The proposal values Clearwire at about $6.3B and comes before its minority shareholders vote on Sprint's offer on Friday. The bid raises the question as to what Dish is up to, given that it's also trying to acquire Sprint. Clearwire's shares were +21.55% premarket.
Berkshire unit to buy NV Energy in $5.6B deal. Berkshire Hathaway (BRK.A) subsidiary MidAmerican Energy has agreed to acquire NV Energy (NVE) in a deal valued at $5.6B, with the offer of $23.75 a share representing a 23.2% premium to the Nevada utility's closing price yesterday. The transaction includes the assumption of about $4.5B in debt. Upon its completion, MidAmerican will have assets of $66B, while its regulated electric and gas utilities will serve 8.4M customers. NVE's shares were +24% premarket.
Top Stock News
EMC ups repurchase program to $6B. EMC (EMC) has increased the size of its buyback program to $6B - authorized over three years to December 2015 - and plans to repurchase $3.5B worth of stock by the end of FQ2 2014. The company has also initiated a quarterly dividend of $0.10 a share and intends to alter its capital structure to include more debt while still "maintaining a strong investment-grade profile." Shares were +2.2% premarket.
GE Capital CEO Michael Neal set to leave. GE Capital CEO Michael Neal is reportedly expected to step down this summer after eight years in the job as parent company GE (GE) looks to pare back the unit. Candidates to replace Neal include GE Capital COO William Cary and Mark Begor, the head of the unit's real-estate division.
Fiat in talks to borrow $10B to buy Chrysler. Fiat (OTCPK:FIATY) is reportedly in negotiations with major banks to borrow up to $10B that the Italian carmaker would use to acquire the 41.5% of Chrysler it doesn't own and refinance the companies' debts at lower interest rates. The banks include Bank of America (BAC), Deutsche Bank (DB), Goldman Sachs (GS) and BNP Paribas (OTC:BNPZY). Fiat's purchase of the holding is being held up by a legal dispute over the value of the stake.
Costco net profit jumps 19% to $459M. Costco's (COST) FQ3 net profit climbed 19% to $459M as EPS of $1.04 beat consensus, but while revenue grew 8% to $23.55B, the figure missed expectations. Comparable sales increased 5%, but were limited by changes in gasoline prices and forex rates. Costco operated 627 warehouses at the end of the quarter and plans to open another nine by the end of the fiscal year.
TI board set to OK spin-off of wire-line unit. Telecom Italia's (TI) board is expected to approve the spin-off of the company's wire-line operations today, with the carrier considering selling a 30% stake to state bank Cassa Depositi e Prestiti. The unit, which is valued at $18B, plans to make $13B in fiber investments over 10 years to modernize its infrastructure. The sale would help TI lower its $37B net debt burden.
Blackstone plans to withdraw $400M from SAC Capital. Blackstone (BX) reportedly intends to pull almost $400M out of SAC Capital, or double the amount that was expected earlier this month. Any Blackstone withdrawal of the money, which would represent the bulk of its cash with the hedge fund, could prompt an exodus by other clients, with the latest deadline for a decision set for Monday. Blackstone's deliberations come amid an intensifying insider-trading probe into SAC.
Net profits at U.S. banks hit record. Net profits at U.S. banks increased almost 16% on year to a record $40.3B in Q1, helped by lower litigation costs and accounting moves related to legal settlements. Net operating revenue rose slightly from recent quarters to $171B, while net interest margins fell to 3.27%, the lowest since Q4 2006. A problem the banks could face is that their income could be squeezed if and when interest on short-term loans starts to rise.
FDA OKs GSK skin cancer drugs. The FDA has approved GlaxoSmithKline's (GSK) Tafinlar and Mekinist drugs for treating melanoma that has spread or can't be surgically removed. The drugs, which are aimed at patients with certain gene mutations, are expected to generate combined annual sales of $622M by 2016, and will compete with Roche's (OTCQX:RHHBY) Zelboraf and Bristol-Myers Squibb's (BMY) Yervoy. GSK's shares were -0.7% at midday in London.
Samsung unveils Galaxy S4's little brother... Samsung (OTC:SSNLF) has unveiled the Galaxy S4 mini, the smaller version of the Galaxy S4 smartphone, which has already achieved sales of over 10M units just a month after being launched. The mini has a 4.3 inch screen - and so is still larger than the iPhone 5 - and an 8 mega-pixel camera. There's no word yet on pricing or launch date.
...while Motorola announces made-in-America smartphone. Motorola (GOOG) intends to introduce a new smartphone called the Moto X in October as it seeks to pull itself back into the top tier of mobile device makers. The handset will be made by Flextronics (FLEX) at a plant in Texas that will employ 2,000 people by August. The Moto X will incorporate two processors to conserve battery life, and include sensors to help it better understand the needs of the user.
Top Economic & Other News
Japan drops tender to buy U.S. grain after GM strain found. Japan has canceled an offer to purchase U.S. grain after authorities found an unauthorized strain of genetically engineered wheat on a farm in Oregon, with South Korea, China and the Philippines monitoring the situation. The wheat was developed by Monsanto (MON), which could face a hefty compensation bill if the boycott spreads - Bayer CropScience had to pay $750M to crop growers in 2011 over contaminated rice. Wheat futures were -0.5% at the time of writing.
Foreclosure sales fall as housing upturn continues. Sales of residential properties in foreclosure dropped 22% on year to 190,121 in Q1, providing further evidence of a recovery in the housing market. Such transactions accounted for 21% of all home sales, down from 25% a year earlier and a peak of 45% in Q1 2009, but still well above an average of less than 5% in 2005 and 2006.
Chinese debt increasingly inefficient. China's broadest measure of credit rose 58% to a record 6.16T yuan ($1T) in Q1, but the debt has become less effective: each $1 of credit added 17 cents to GDP, down from 29 cents last year and 83 cents in 2007. "Less efficient and more highly leveraged borrowers...(are) tying up credit that could be used to generate more growth," says former Treasury economist David Loevinger. The solution is to boost the more profitable private sector.
Alpha-Rich Stock Movers and Great Calls
1) American Realty Capital announced the purchase of CapLease (LSE) on Tuesday. The all-cash deal represents a +32% premium to LSE's close on April 8, when REIT expert Dane Bowler called it out as "an extremely cheap play on the burgeoning industrial REIT space with a discount of 38%."
2) On March 12, Investing501 noted the presence of substantial hidden assets at A.H. Belo (AHC), concluding that the stock had significant upside potential in the long-term. Since then, AHC is +30%.
Alpha-Rich Stocks To Watch
1) Whiting USA Trust (WHX). Longtime energy consultant Michael Cutler works backwards and finds a 40% lower NPV on this misunderstood trust; the stock is still overvalued due to confusion about its distributions.
Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.
In Asia, Japan -5.2% to 13589. Hong Kong -0.3% to 22484. China -0.3% to 2318. India +0.3% to 20215.
In Europe, at midday, London +0.2%. Paris +1%. Frankfurt +0.6%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq +0.1%. Crude -0.4% to $92.74. Gold +0.4% to $1384.70.
Today's economic calendar:
8:30 Initial Jobless Claims
8:30 GDP Q1
8:30 Corporate Profits
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Status
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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