- Wells Fargo to repay TARP. Wells Fargo (NYSE:WFC) shares were buffeted by speculation yesterday amid rumors of a secondary offering, but the bank said it plans to repay its $25B in TARP funds by the end of the year without raising additional equity. According to CEO John Stumpf, "we are now earning capital so quickly, organically, we don't want to dilute our existing shareholders." Stumpf said the money would be repaid 'shortly' but declined to provide a date. Shares +0.6% premarket (7:00 ET).
- Regulators may delay Oracle-Sun deal. Less than two days before a key deadline, the European Commission is reportedly weighing whether to delay Oracle's (NYSE:ORCL) planned $7.4B takeover of Sun Microsystems (JAVA) over concerns about Oracle's access to Sun's MySQL database. A delay in regulatory approval would put Oracle months behind schedule and give competitors like Hewlett-Packard (NYSE:HPQ) and IBM (NYSE:IBM) more time to lure away hardware customers. U.S. antitrust authorities approved the deal last week.
- BP's 'giant' oil find. BP (NYSE:BP) announced this morning a 'giant' oil discovery in a very deep well drilled in U.S. waters in the Gulf of Mexico, but said an appraisal is necessary to determine the exact size and commerciality of the find. BP is already the largest individual producer in the area. Shares +3.6% premarket (7:00 ET).
- RHJ sweetens Opel bid. As General Motors continues to stall over its Opel decision, RHJ International (OTCPK:RHJIF) has raised its bid for the unit. The company is now willing to offer GM €300M ($431M) in cash for a 50.1% stake, €25M more than its initial bid. RHJ also said it would ask for only €3.2B in state aid, down from €3.8B, and would repay the loans in 2013, a year earlier than previously planned.
- MBA: Time for a Fannie/Freddie overhaul. The Mortgage Bankers Association, a major industry trade group, is calling on lawmakers to break Fannie Mae (FNM) and Freddie Mac (FRE) into several smaller, privately held companies that would issue mortgage securities with an explicit government guarantee. The new companies would have to pay fees into a federal insurance fund which would kick in only in the event of catastrophic losses. Fannie and Freddie both fell more than 17% in trading yesterday, following an earlier analyst report that the firms have 'no fundamental value remaining,' and are continuing to trade down premarket. FNM -5%, FRE -4.2% (7:00 ET).
Last clunkers boost for auto sales. August U.S. motor vehicle sales reached their highest pace in twelve months thanks to a large boost from the cash-for-clunkers program. Firms sold 1.3M cars and light trucks in August, pushing the annualized selling pace to 14.09M vehicles vs. July's 11.24M. However, analysts are expecting a September slowdown following the end of the clunkers program. Here's the breakdown:
-Ford (NYSE:F): +17% to 176,323 vs. consensus of +39%, excluding 5,826 units at Volvo, a second straight increase. Model standouts: Fusion sales: +131.6%; Focus +55.9%; Flex +106.5%.
-Chrysler: -15% to 93,222 units. Chrysler brand vehicles -23% to 18,619; Jeep -6% to 22,041; Dodge down to 52,562 units.
-General Motors: -20.2% to 246,479 vehicles. Pontiac +23.3% to 29,921 units; Chevrolet -9.2% to 168.130. Cadillac -55% to 6,931. Buick -51.7% to 8,612.
-Honda (NYSE:HMC): +14.2% to 161,439 vehicles, vs. consensus of +3.2%, its second-best month ever. Honda Fit +194.1% to 13,593; Civic +49.6% to 43,294; CR-V +58.3% to 30,284.
-Toyota (NYSE:TM): +10.5% to 225,088 vehicles, vs. consensus of +8.9%. Toyota brand +15.2% to 202,196; Lexus -18.8% to 22,892. Toyota passenger cars +32.4% to record 142,529 units. Toyota light trucks -12.1%. Hybrids +28.6%.
-Nissan (OTCPK:NSANY): -2.9% to 105,312 vehicles. Nissan brand vehicles +0.2% to 97,580; Infiniti -30.2% to 7,732.
-Daimler (DAI): -10.5% to 18,734 units. Mercedes-Benz -7.5% to 17,112; Smart car sales -33% to 1,622.
-Volkswagen (OTCPK:VLKAY): +11.4% to 24,823, its best sales month since December 2005. Jetta +14.8%.
-Kia: +60.4% to 40,198 vehicles. Sportage more than doubles, to 7,558 units.
-Hyundai: +47% to 60,467 vehicles, its monthly record, and its eighth straight month of Y/Y gains. Elantra +116% to 21,673 units.
-Porsche: +9% to 1,526 units. Porsche 911 +92% to 673; Cayenne -34% to 509.
- Buying private banking growth. Credit Suisse (NYSE:CS) and Julius Baer Holding both said they would consider acquisitions to grow their private banking businesses. Credit Suisse declined to comment on whether it planned to bid for ING Group's (NYSE:ING) private banking units in Asia and Switzerland.
- New Nokia phones with Facebook link. Nokia (NYSE:NOK) launched two new phone models today and announced a location-based service deal with Facebook. The X6 and X3 phones will ship next quarter and are priced at €450 ($641) and €115, and a smaller version of the N97 smartphone was unveiled as well. Nokia will also allow users to directly update their Facebook locations and status messages through their Nokia Ovi accounts.
- Freedom falls to bankruptcy. As expected, Freedom Communications, which owns over 30 daily newspapers and 8 TV stations, formally declared bankruptcy. The Tuesday filing was part of a prepackaged plan approved by a majority of the company's lenders.
- MBA apps fall. Mortgage applications fell 2.2% from last week, MBA reported. The average interest rate on 30-year fixed-rate mortgages fell to 5.15% from 5.24%.
- Retail sales decline. Chain store sales fell 0.6% in August from a month before, Redbook reported, in-line with consensus. Sales were down 4.3% Y/Y. According to ICSC, weekly sales were down 0.7% Y/Y and fell 0.5% from the previous week.
- Manufacturing improves. The ISM Manufacturing Index reached 52.9 in August, better than the consensus of 50.5 and an improvement over July's 48.9. The move above 50 marks the first expansion since January 2008, as well as the seventh consecutive monthly increase.
- Construction spending dips down (.pdf). Construction Spending fell 0.2% in July to $958B/year, slightly worse than the consensus of 0%, and 10.5% below the year-ago estimate. For the first seven months, spending was $543.8B, 11.4% below the same period in 2008.
- Home sales tick up. Pending Home Sales rose 3.2% in July to 97.6, the sixth straight monthly gain and better than the +1.5% consensus. The National Association of Realtors noted the recovery is broad-based with housing affordability at record highs.
- Consumer confidence holds steady. ABC's Consumer Confidence Poll came in at -45, matching last week and marking its fourth straight week without a retreat. However, it's still only nine points above its January record low. Only 8% think the economy's not in bad shape, while just 27% think it's a good time to buy things, and 48% rate their personal finances positively.
Earnings: Wednesday Before Open
- Joy Global (JOYG): FQ3 EPS of $1.21 beats by $0.26. Revenue of $956M (+6%) vs. $902M. (PR)
Earnings: Tuesday After Close
- ADC Telecommunications (ADCT): FQ3 EPS of $0.17 beats by $0.03. Revenue of $283M (-26%). (PR)
- Pike Electric (NYSE:PIKE): FQ4 EPS of $0.07 in-line. Revenue of $128.5M (-7%) vs. $129.5M. (PR)
- Take-Two Interactive Software (NASDAQ:TTWO): FQ3 EPS of -$0.66 beats by $0.02. Revenue of $139M (-68%) vs. $125M. (PR)
- VeriFone (NYSE:PAY): FQ3 EPS of $0.26 beats by $0.08. Revenue of $211M (-18%) vs. $202M. Sees Q4 EPS of $0.23-0.25 vs. $0.19 and revenue of $208M-215M vs. $203M. Sees full-year EPS of $0.83-0.85 vs. $0.70 and revenue of $835M-842M vs. $821M. (PR)
Mild-to-moderate losses across the board.
- In Asia, Nikkei -2.4% to 10,280. Hang Seng -1.8% to 19,522. Shanghai +1.2% to 2,715. BSE -0.5% to 15,467.
- In Europe at midday, London -0.15%. Paris -0.6%. Frankfurt -0.4%.
- Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.25%. Crude +1% to $68.76. Gold flat.
Wednesday's Economic Calendar
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
8:30 Productivity and Costs
10:00 Factory Orders
10:30 EIA Petroleum Status
11:30 Fed's Lockhart speaks on lessons of the financial crisis
2:00 PM FOMC minutes
- Notable earnings before Wednesday's open: JOYG
- Notable earnings after Wednesday's close: HOV, PSS, SAI
Seeking Alpha editor Eli Hoffmann contributed to this post.
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