- Moody's downgrades Greece. Moody's threw its hat in with S&P and Fitch, which earlier this month cut the government bond ratings of Greece, as the country struggles to emerge from its economic crisis. But, the one-notch cut was less severe than the other two agencies - sparking a rally in Greece's bonds. The less-aggressive move eased concerns that the country's debt would be ineligible as collateral at the ECB. Moody's, which also cut the ratings of several Greek banks, said the government's long-term credit strength was "eroding materially," and cut the bond ratings to A2 from A1. It also issued a Negative outlook and said future ratings decisions will depend on whether the government makes good on deficit-reduction plans.
- State Street expands in Italy. State Street (STT) is paying €1.75B ($2.5B) for the depositary unit of Italy's Intesa Sanpaola, the Italian bank said. State Street is expanding its business overseas by adding hedge-fund and private-equity clients to its roster of money managers. Earlier this month, State Street snapped up Mourant International in the U.K.'s Channel Islands to strengthen its global alternative asset servicing.
- Ticketmaster, Live Nation get EC green light. Ticketmaster (TKTM) and Live Nation (LYV) will be able to merge after all, following a volte-face decision by U.K.'s antitrust regulator. In February, when Live Nation first said it wanted to buy Ticketmaster for $400M in stock, the regulator worried the combined group would have unrivalled power over music fans and prices. But in its final ruling today, the British Competition Commission said that "the merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market." The combination brings together the world's biggest concert promoter with the world's dominant ticketing and artist-management company.
- AIG exec wins big payday. An unnamed AIG (AIG) executive will get $3.26M in a deferred stock grant thanks to a nod from paymaster Kenneth Feinberg. The unnamed top-25 executive will also get an annual long-term incentive award of as much as $1M. "AIG has indicated that the employee is critical to AIG's long-term performance and stability, and that his continued employment by AIG will significantly aid AIG's ability to repay the taxpayer," Feinberg said, explaining his decision.
- More homeowners fall behind. The number of borrowers that fell behind on their mortgages - including the most creditworthy - rose in Q3 as the percentage of current and performing mortgages dropped for the sixth consecutive quarter, a regulatory report said. Those that fell behind on their prime mortgage payments more-than doubled to 3.6% from a year ago. Such troubles could mount as banks and thrifts remain unable to match modifications with the number of struggling borrowers who need help.
- Banks pay for bailout favors. An academic report asserts that U.S. banks that lavished more money on lobbying were more likely to get government bailout money, and that those who had executives serving on Fed boards were also more likely to receive TARP funds. "Political connections play an important role in a firm's access to capital," one of the two authors said. As of late September, nearly 700 financial institutions had received bailouts of $205B under the capital purchase program, the study found.
- Liddell is GM's new CFO. General Motors handed the steering wheel to its new CFO, Chris Liddell, an outsider who is leaving the same job at Microsoft (MSFT). The appointment will help GM bolster a financial operation that's been criticized by the Treasury's auto task force. Liddell oversaw $3B of expense cuts at Microsoft during the past fiscal year.
- Healthcare stocks rally on bill. Healthcare stocks staged a thank-you rally Monday as the Senate looked poised to approve a controversial healthcare bill that is less onerous than many had feared. Aetna (AET) gained 4.7% while Cigna (CI) rose 3.9%, helping to make healthcare one of the day's best-performing sectors. UnitedHealth (UNH) and WellPoint Health Networks (WLP) also rallied. Among other factors, the bill omits a provision for a government-run insurance plan, which managed care companies had fought against because they feared it would put them at a competitive disadvantage to private companies.
- Hackers attack Citi. Citigroup (C) lost tens of millions of dollars to hackers linked to a Russian cyber gang, unidentified government officials say. The FBI has been investigating a computer-security breach at Citi, which is currently 27% owned by the government. The FBI estimates that losses from online crimes in the U.S. topped $260M last year, with one expert saying attacks on corporations are at "an epidemic level." Citi denied the allegations.
- News Corp. aims for Sky. News Corp. (NWS) plans to raise its stake in Germany's Sky Deutschland by indirectly subscribing to a 49M placement of new shares; the sale is expected to generate €110-120M. News Corp. will increase its stake in the company, which now expects to report a net loss in 2011, up to 45.4%. Share proceeds will be used for sales and marketing initiatives, and to increase the rollout of Sky Deutschland's high-definition service, programming and new channels in mid-2010.
- All Nippon gives Boeing a lift. Japan's All Nippon Airways will pay Boeing (BA) some $2B for five 777-200ERs and five 767-300ERs. In a statement, a Boeing official said: "ANA's decision reinforces the value these two great airplanes have delivered for its fleet needs. The 777 and 767 have been proud contributors to ANA's success and will continue to play a vital role in its fleet strategy."
- Walgreen banks on late shoppers. Undaunted by heavy snowfall, Walgreen (WAG) confirmed what the National Retail Federation said recently - that 11th-hour shoppers will still make for a strong end to the holiday shopping season. "I think we're well positioned to take advantage of those last-minute shoppers," Walgreen CEO Greg Wasson said on the company's FQ1 earnings call yesterday. Heavy weekend snow wasn't enough to push NRF to revise its forecast for a 1% drop in holiday sales, and some retailers may extend promotions into Monday and Tuesday to attract shoppers, an NRF official said.
Earnings: Tue. Before Open
- Commercial Metals Company (CMC): FQ1 EPS of -$0.28 misses by $0.24. Revenue of $1.45B (-39%) in-line. "Coupled with an improving economy, the second half of our fiscal year appears more promising, though we believe at modest levels." (PR)
Earnings: Mon. After Close
- Jabil Circuit (JBL): FQ1 EPS of $0.32 beats by $0.03. Revenue of $3.1B (-8%) in-line. Sees FQ2 EPS of $0.20-0.32 vs. $0.19, on revenue of $2.9B-3.1B vs. $2.88B. Shares +6.2% AH. (PR)
Shanghai took a beating in an otherwise strong Tuesday in Asia. Europe markets are higher at midday, and futures are up in another light overnight session.
- Asia: Nikkei +1.9% to 10378. Hang Seng +0.7% to 21092. Shanghai -2.3% to 3051. BSE +0.6% to 16692.
- Europe at midday: FTSE +1.1% to 5350. CAC +0.7% to 3899. DAX +0.4% to 5953.
- Futures: Dow +0.35% to 10378. S&P +0.4% to 1112.50. Nasdaq +0.6%.
Treasurys: 30-year -0.45% to 116-11. 10-year -0.28%. 5-year -0.13%.
Euro flat vs. dollar. Yen +0.15%. Pound -0.1%. Loonie +0.4%.
Crude -0.7% to $73.23. Gold -0.3% to $1,093.
Tuesday's Economic Calendar
- 2:30 OPEC meeting
7:45 ICSC Retail Store Sales
8:30 Q3 GDP, final
8:30 Q3 Corporate Profits, revised
8:55 Redbook Chain Store Sales
10:00 Existing Home Sales
10:00 FHFA Housing Price Index
10:00 Richmond Fed Mfg.
10:00 Mass Layoffs
5:00 PM ABC Consumer Confidence Index
- Notable pre-market earnings: CMC
- Notable post-market earnings: CTAS, MU, RHT, TIBX
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