Nike jumps as EPS tops forecasts. Nike (NKE) shares sprinted 6.6% higher premarket after FQ1 EPS of $0.86 beat consensus and profit jumped 38% to $780M, while revenue rose 8% to an expected $6.97B. The new Dow component benefited from robust demand in the U.S. and many international markets, with the basketball, running, soccer and men's training categories performing well. Global futures orders, a leading indicator for top-line growth, rose 8%. However, China continued to be a drag, with sales slipping 0.5% to $574M.
Ford's Mulally tops list of Microsoft CEO candidates. Ford (F) CEO and Steve Ballmer confidante Alan Mulally "has vaulted to the forefront" of the list of potential candidates to succeed Ballmer as Microsoft's (MSFT) CEO, AllThingsD reports. While former Nokia (NOK) chief Stephen Elop is still a top candidate, there has "been a shift in recent weeks toward Mulally," who has shown a knack for corporate turnarounds during his time at Ford and Boeing (BA), although he hasn't worked for a tech company.
Kerry holds private talks with Iranian counterpart. U.S. Secretary of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif had a private discussion over Iran's nuclear program yesterday in what was the highest-level official meeting between the countries since before the Islamic Revolution in 1979. Kerry said the talks, which came after wider negotiations between Iran and major international powers, were "constructive." The improved relations helped send oil lower.
Top Stock News
Dimon-Holder talks make "good progress." Talks between JPMorgan CEO (JPM) Jamie Dimon and U.S. Attorney-General Eric Holder were reportedly "constructive", with "good progress" made. However, the sides are yet to agree on a final deal that would settle many of the numerous investigations into the bank, although not necessarily all of them. Authorities want JPMorgan to pay $7B in fines and $4B in mortgage relief, as well as to admit wrongdoing. The bank, though, wants to avoid such an acknowledgement.
J.C. Penney shares slump following news of stock issue. J.C. Penney (JCP) plans to issue at least 84M shares in a deal that would yield $875.3M at yesterday's closing price of $10.42. There's also an over-allotment option of 12.6M shares. JCP, which is contending with worsening cash burn, intends to use the money for "general corporate purposes." Shares slumped 5.5% premarket.
KKR to buy Panasonic Healthcare for $1.67B. KKR (KKR) has agreed to acquire 80% of Panasonic's (OTC:PCRFF) healthcare unit for ¥165B ($1.67B) in a deal that will be the private-equity firm's largest purchase in Japan. KKR received preferential negotiating rights for Panasonic Healthcare, which provides digital medical-record systems and equipment that measures blood glucose, following two rounds of bidding in an auction.
Violin Memory prices 18M-share IPO at $9. Violin Memory (VMEM) is due to debut on the NYSE today after pricing its IPO at $9 a share, which represents the midpoint of an $8-$10 range. The flash-storage system vendor is raising $162M by selling 18M shares and will have a market cap of $736M. Although Violin Memory operates in a hot market that has seen plenty of M&A activity lately, the IPO has apparently failed to enjoy the price increases that Rocket Fuel (FUEL) and FireEye (FEYE) experienced.
Top Economic & Other News
Government shutdown looms as GOP, Democrats stand firm. Conservative Republicans and Democrats continued to hold their respective positions on the budget and debt-cap yesterday. In the House, GOP representatives won't accept a six-week government spending bill that looks set to pass in the Senate today and would avert a shutdown on Tuesday. The legislation would add funding for Obamacare, which Republicans want to strip out. Markets are getting increasingly nervous, with the cost to insure $10M of U.S. government debt for one year rising six-fold this week.
Japanese core CPI hits five-year high. Japan's core CPI, which excludes fresh food, has increased to its highest level since November 2008, edging up to +0.8% on year in August from +0.7 in July. However, most of the increase was due to rising gasoline prices and the weaker yen, and CPI data that excludes energy as well as food remained negative with a drop of 0.1%. Still, prices of consumer-electronic equipment and other durable leisure goods increased for the first time since 1992.
BOE chief Carney rules out more QE for now. Bank of England Governor Mark Carney doesn't believe the BOE needs to restart its bond-buying program, due to the improvement in the U.K. economy. "Given the recovery has strengthened and broadened, I don't see a case for quantitative easing," Carney said. However, the BOE would consider more QE should the economy falter. The pound was +0.2% at $1.6079 at the time of writing.
Chinese industrial profits climb 24%. The combined profits of large Chinese industrial firms jumped 24.2% on year in August to 483.17B yuan ($78.94B) as growth accelerated from 11.6% in July. In January-August, earnings climbed 12.8% to 3.5T yuan. The profit growth adds to other data indicating that China's economy is improving, although an unofficial Beige Book tells a different story. Chinese and Hong Kong shares rose.
Alpha-Rich Stock Movers and Great Calls
1) On Wednesday, the GeoTeam explained why Global Telecom (GTT) could be in for a big move higher, with recent acquisitions and improving performance as key drivers. The shares are +10.6% to date. Read article »
2) On August 22, Igor Novgorodtsev said Perma-Fix (PESI) had staved off meltdown, and that as Department of Energy spending picked up, the company's shares had major potential. The stock is +49% since. Read article »
Alpha-Rich Stocks To Watch
1) Despite representing an equal claim on earnings and 10x the voting power, Lennar's class B shares (LEN.B) trade 25% below the class A (LEN). Read article »
2) Abercrombie & Fitch's (ANF) issues look purely operational to analyst Shaun Currie, who thinks the low valuation is an invitation for an LBO, with 20% or more upside. Read article »
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In Asia, Japan -0.3% to 14760. Hong Kong +0.3% to 23207. China +0.2% to 2160. India -0.8% to 19727.
In Europe, at midday, London -0.6%. Paris -0.2%. Frankfurt -0.4%.
Futures at 6:20: Dow -0.3%. S&P -0.4%. Nasdaq -0.3%. Crude -0.5% to $102.49. Gold flat at $1323.60.
Ten-year Treasury Yield -2 bps to 2.64%.
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