Global stocks mixed as U.S. drama continues. U.S. stock futures were higher at the time of writing after Democrat and GOP Senate leaders Harry Reid and Mitch McConnell respectively appeared to be close to a deal to raise the debt cap and finance the government. However, that was the case early yesterday as well before negotiations were called off and then re-opened. Investors in Asia and Europe appeared to be more cautious, with stocks in those regions mainly lower.
Intel falls despite beating expectations. Intel's (INTC) Q3 earnings topped forecasts as EPS came in at $0.05 and revenue edged up 0.2% to $13.48B, while net profit slipped slightly to $2.95B. Intel gave Q4 revenue guidance that was below consensus, saying that its outlook reflects the caution the company is seeing in customer order patterns, as well as their efforts to "keep inventory levels lean." However, Intel also said that the enterprise PC market has strengthened and appears to have bottomed out. Notwithstanding, shares were -1.4% premarket.
Twitter chooses NYSE, losses soar. As rumored, Twitter (TWTR) has chosen to spurn the tech-heavy Nasdaq (NDAQ) in favor of the NYSE (NYX, ICE) for its IPO. In an updated S-1, the micro-blogging site also said that its Q3 net losses widened to $64.6M from $21.6M a year earlier, although sales more than doubled to $168.6M, while 70% of ad revenue came from mobile.
Top Stock News
Regeneron, Sanofi drug slashes "bad" cholesterol almost in half. A drug developed by Regeneron Pharmaceuticals (REGN) and Sanofi (SNY) cut levels of the "bad" LDL cholesterol by 47% in a Phase III trial of 103 patients. In contrast, cholesterol in subjects who took Merck's (MRK) Zetia fell just 15.6%. Regeneron and Sanofi's treatment, called Alirocumab, is part of a new class of injectable cholesterol medicines that block a protein called PCSK9. Such drugs could each generate sales of $3B or more.
Advance Auto Parts looks to buy General Parts for over $2B. Advance Auto Parts (AAP) reportedly intends to acquire closely held General Parts International, which owns the Carquest chain, for more than $2B in a deal that would create one of the largest providers of aftermarket auto-parts in North America. The combined company would have annual sales of $9.2B, similar to those of market leader AutoZone (AZO). The transaction would boost the sales that Advance Auto earns in the larger and faster growing commercial sector to 55% of its total revenue from 40%.
Alcatel-Lucent CEO warns that company is fighting for survival. Alcatel-Lucent (ALU) "could disappear," CEO Michael Combes said yesterday as he sought to explain the latest in a series of "turnaround" plans that the perennial loss-maker has been enacting since Alcatel merged with Lucent in 2006. Under Combes' program, Alcatel-Lucent intends to lay off 10,000 workers, including 900 in France. That has caused protests from French ministers and workers, over 1,500 of whom yesterday marched about the issue. Alcatel-Lucent's shares were -3.95% premarket.
Yahoo beats on income, misses on revenues. Yahoo's (YHOO) Q3 EPS came in at $0.34 and topped forecasts even as revenue slipped 1% to $1.08B and missed consensus, with the company's core display and search ads business remaining soft. Yahoo also gave Q4 revenue guidance that was below Street expectations. However, shares rose 1.1% premarket after the firm said that it will be required to sell fewer Alibaba shares following any IPO of the Chinese company. Alibaba's Q2 net profit surged 145% on year to $717M and its revenue jumped 61% to $1.74B.
Plains GP Holdings raises $2.82B in IPO. Shares in Plains GP Holdings (PAGP) are due to debut on the NYSE today after the Houston-based company raised $2.82B in the largest U.S. IPO this year. Plains GP, which was created to pay dividends on behalf of oil-and-gas Master Limited Partnership (MLP) Plains All American Pipeline (PAA), sold 128M shares at $22 each, the low end of the prospective range of $22-25. There is also a greenshoe option for another 19M shares.
Top Economic & Other News
Eurozone inflation falls to lowest since early 2010. Eurozone CPI dropped to a 3 1/2 year low of 1.1% in September from 1.3% in August and fell even further away from the ECB's target of just under 2%. That could leave the bank room for further easing, and, goodness knows, even a spot of government-bond buying if it so wished.
Fitch puts U.S. rating on negative watch. Fitch placed the United States' AAA credit rating on Rating Watch Negative yesterday, citing "political brinkmanship and reduced financing flexibility" that could increase the risk of a U.S. default. Dow futures plunged on the news, but as noted above, they were back in the green early today.
Indian central bank chief expects Q4 pickup. Raghuram Rajan, the head of the Reserve Bank of India, believes that his country's stuttering economy will pick up in Q4, due to the resumption of stalled projects and a good monsoon season. Around $115B worth of resource projects were halted due to a review of transparency and environmental policy, but about half of these have now been re-authorized. The monsoon will lead to a "bountiful harvest," with activities such as animal husbandry and poultry also strengthening.
Alpha-Rich Stock Movers and Great Calls
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Alpha-Rich Stocks To Watch
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In Asia, Japan +0.2% to 14467. Hong Kong -0.5% to 23228. China -1.8% to 2193. India closed.
In Europe, at midday, London -0.6%. Paris -0.9%. Frankfurt -0.1%.
Futures at 6:20: Dow +0.4%. S&P +0.4%. Nasdaq +0.1%. Crude flat at $101.18. Gold +0.4% to $1278.50.
Ten-year Treasury Yield -1 bps to 2.72%.
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