Dish abandons bid for Clearwire. Just days after giving up on its attempt to acquire Sprint (S), Dish (DISH) yesterday withdrew its offer for Clearwire (CLWR) as well. The decision clears the way for the latter's shareholders to approve Sprint's $5-a-share proposal. One question now is whether Dish will turn its attentions to T-Mobile USA (TMUS) in its bid to enter the cellular market.
EU fin mins agree on rules for bank rescues. At the second time of asking, EU Finance Ministers have agreed on measures to deal with failing banks. The proposals include imposing losses of up to 8% of a bank's total liabilities on shareholders, creditors and then deposits of over €100,000, after which governments will be able to supply funds of up to 5% of liabilities. EU leaders are set to approve the measures at a meeting today.
U.S. states have pension gap of $980B - Moody's. U.S. states have a combined pension shortfall of $980B, Moody's calculates, or the equivalent of 66% of their income on average, including money from federal block grants and aid. Nebraska has the smallest gap relative to revenue with a shortfall of 7%, while Illinois - not surprisingly - has the largest hole with 141%. Moody's intends to take account of the underfunded pension schemes when assigning credit ratings.
Top Stock News
IPOs pared back after markets throw a wobbly. The turbulence in the markets has caused companies to scale back their IPOs. Building-supplies firm HD Supply (HDS) has priced its listing at $18, below an original range of $22-$25, while IT supplier CDW (CDW) priced its offering at $17 after reducing the range to $17-$18 from $20-$23 and removing 4.65M shares from the deal. HD Supply is raising $957.5M at a valuation of $3.31B and CDW is raising $395M at a market cap of $2.86B.
Barnes & Noble to delay FY13 10-K. Barnes & Noble (BKS) won't file its FY 2013 annual report on time, due to a previously announced accounting review that could lead to restatements. The book retailer has also amended its credit agreement with several banks, with the changes placing limits and conditions on B&N's dividend payments and buyback activity.
Bidding battle brews for Empire State Building. The owners of the Empire State Building (ESB) have received an offer of $2.1B from a consortium comprising real-estate investors Philip Pilevsky and Joseph Tabak, and a Middle Eastern group. The bid for the tower, which is also in the process of being listed as part of a REIT, trumps a $2B proposal from property tycoon Rubin Schron but is still below the $2.53B valuation that an independent appraisal calculated.
FDA recalls Medtronic pump after 14 deaths. The FDA has recalled Medtronic's (MDT) SynchroMed infusion pump following the death of 14 patients since 1996 due to flaws in the device. Eleven patients died because of the inadvertent injection of a drug into subcutaneous tissue rather than into the pump, while two died from a blockage and another because of an electrical short.
Zimmer confirms intention to take Men's Wearhouse private. Ousted Men's Wearhouse (MW) co-founder and Chairman George Zimmer has confirmed that he has asked the company's board to consider taking the company private in order to preserve the "unique culture and values" critical to the retailer's success. Zimmer accused the board and management of "eroding the principles and values that have made The Men's Wearhouse so successful."
Proposed changes could make insurers' earnings more volatile. The Financial Accounting Standards Board is due to propose changes to accounting rules for insurers that could cause increased earnings volatility and lower sales growth. Insurers would have to recognize premium revenue over time, when insurance is being provided, rather than when it is received, while the reporting of costs might be delayed as well. Every time a company releases earnings, it may have to change its assumptions about its expected income and expenses.
Top Economic & Other News
French unable to give Gallic shrug to woeful economy... French consumer confidence has unexpectedly dropped to a record low of 78 in June from 79 in May, indicating that the French consumer can't be relied upon to help lift the economy out of its slump. The state auditor has added to the gloom, forecasting that the government's 2013 public deficit will be near to 4% of GDP, above its target of 3.7% and the EU goal of 3%.
...while German unemployment stays near to unification low. Unemployment in Germany has continued to provide a bright contrast to the depressing economic picture outside the country, staying steady at 6.8% in June and coming in slightly under consensus of 6.9%. The number of people out of work unexpectedly fell by 12,000 to 2.943M vs a rise of 17,000 in May and expectations for an increase of 8,000.
Credit crunch spreads to China's "Main Street." Despite efforts by the People's Bank of China to ease the credit crunch in the country's financial markets, the WSJ finds anecdotal evidence that the liquidity squeeze has spread to the wider economy. As a result, companies have increasingly used bankers' acceptances, which are short-term bank-issued guarantees, to pay their bills instead of cash. The acceptances are "relatively easy to get as they don't show up on banks' balance sheet," says a purchasing manager.
Alpha-Rich Stock Movers and Great Calls
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In Asia, Japan +3% to 13214. Hong Kong +0.5% to 20440. China -0.1% to 1950. India +1.7% to 18868.
In Europe, at midday, London +0.4%. Paris flat. Frankfurt +0.2%.
Futures at 6:10: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.3% to $95.77. Gold flat at $1229.30.
Today's economic calendar:
8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:45 Bloomberg Consumer Comfort Index
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
12:30 PM Fed's Lockhart: U.S. Economic Outlook
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM USDA Ag. Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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