- Kraft closes one deal, sweetens another. Kraft (KFT) announced this morning that it's selling its frozen pizza business to Nestle (OTCPK:NSRGY) for $3.7B in cash and will use the funds to raise its hostile bid for Cadbury (CBY) by 60 pence ($0.97) per share. Additional details on the sweetened offer will be announced by the Jan. 19 deadline for amending the terms of the bid. CBY -1.4% premarket (7:00 ET).
- Apple tablet-mania grows. The hype is growing around Apple's (NASDAQ:AAPL) much-rumored tablet device, with insiders saying the device will be unveiled later this month and will ship sometime in March. Sources claim alternately that the device will have a 10- or 11-inch touchscreen with a price tag of around $1,000, or that it will be a 7-inch screen with a built-in projector. In either case, many are expecting the device to be a game-changer that could eat into the marketshare of both existing tablet computers (from companies like H-P (NYSE:HPQ) and Toshiba (OTCPK:TOSBF)) and e-book readers (Amazon (NASDAQ:AMZN), Barnes & Noble (NYSE:BKS), Sony (NYSE:SNE)). Separately, Apple is expected to announce as soon as today that it will spend $275M to acquire Quattro Wireless, a start-up aimed at smartphone advertising. AAPL +0.4% premarket (7:00 ET).
- Credit Suisse sued for 'loan-to-own.' Credit Suisse (NYSE:CS) is being sued for $24B by four luxury-property owners who accuse the bank of intentionally loading the properties up with debt in order to foreclose on the assets when the debts weren't repaid. The property owners are seeking class-action status for their lawsuit and are asking for damages on behalf of more than 3,000 investors. Credit Suisse denies wrongdoing. CS +1.5% premarket (7:00 ET).
- IRS tightens oversight of tax prep. The IRS has decided to regulate the tax preparation industry for the first time, requiring both independent preparers and individuals at firms like Jackson Hewitt (JTX) and H&R Block (NYSE:HRB) to register, pay fees, pass a competency test and attend annual training sessions. The changes, which won't be in effect this year, are designed to minimize fraud and errors among the 1M+ paid tax preparers.
- H&R Block settles fee lawsuit. H&R Block (HRB) has reached a settlement with New York Attorney General Andrew Cuomo over its Express IRA product, and will refund a total of $11.4M-$19.4M to customers, depending on the number of claims. Cuomo claimed that the tax preparer aggressively pushed "fee-laden retirement accounts that were virtually guaranteed to lose money," with over 600,000 Express IRA accounts opened by H&R Block since 2000.
- Bankruptcies continue to mount. Personal bankruptcies rose by nearly a third in 2009, reaching 1.41M filings as Americans struggled with foreclosures and unemployment. Industry players are divided as to whether 2009 represented a peak or whether bankruptcies will continue apace into 2010.
- Dow Jones merges units. Under the direction of parent company News Corp. (NASDAQ:NWS), Dow Jones & Co. is merging its two largest business units to facilitate greater cooperation between divisions of the company. The merger will bring together the consumer media group, which includes The Wall Street Journal, Barron's and MarketWatch, with Dow Jones' research tools and news wire services in an effort to "make us faster and better than our rivals at identifying and meeting customer needs.”
- Construction spending dips (.pdf). Construction spending fell 0.6% in November to $900.1B/year vs. consensus of -0.5%, and 13.2% below the year-ago estimate. The October figure was revised down to $905.6B from $910.8B. For the 11 months, spending was $868.9B, 12.7% below the same period in 2008.
- Manufacturing expands. The ISM Manufacturing Index registered 55.9 in December vs. 54.8 consensus and 53.6 in November. The Prices index came in at 61.5 vs. 55 prior. Employment 52 vs. 50.8. Inventories 43.4 vs. 41.3. New orders 65.5 vs. 59.9. It marks the fifth straight month of expansion in U.S. manufacturing, and the fastest pace of expansion in more than three years. Reports from Asia and Europe showed similar growth, indicating a global recovery is gaining some momentum.
Asian markets locked in modest gains after yesterday's positive close in U.S. markets. European markets and U.S. futures are rangebound.
- In Asia, Nikkei +0.25% to 10,682. Hang Seng +2.1% to 22,280. BSE +0.7% to 17,686. Shanghai closed.
- In Europe at midday, London +0.5%. Paris +0.05%. Frankfurt -0.1%.
- Futures: Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +0.1% to $81.56. Gold +0.2% to $1120.
Tuesday's Economic Calendar
- Motor Vehicle Sales
7:45 ICSC Retail Store Sales
8:00 Fed's Hoenig discusses gov't bailouts
10:00 Factory Orders
10:00 Pending Home Sales
5:00 PM ABC Consumer Confidence Index
- Notable earnings after Tuesday's close: MOS
Seeking Alpha editor Eli Hoffmann contributed to this post.
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