Anadarko faces bill of up to $14B over Tronox spin-off. Anadarko Petroleum (APC) shares plummeted 11.6% premarket after Manhattan Bankruptcy judge Allan Gropper ruled that the company would have to pay $5-14B in environmental cleanup and health claims. The case relates to the 2005 spin-off by Kerr-McGee (now a unit of Anadarko) of its chemicals business as Tronox, which fell into bankruptcy in 2009 due to old environmental liabilities that it was lumped with. Just three months after the spin-off, Anadarko offered to acquire Kerr-McGee's oil and natural gas assets for $18B.
Coke to split North American ops into two as top exec leaves. Coca-Cola (KO) has announced a major reorganization of its Americas business that includes the departure of the head of that business, Steve Cahillane, who was once seen as a possible successor to CEO Muhtar Kent. Cahillane's exit leaves International boss Ahmet Bozer as the clear number two at the company. The beverages giant also intends to split its North American unit into two as part a strategy to return to a franchise model in the U.S.
House passes two-year budget deal. The House has overwhelmingly approved a two-year budget framework that will remove the threat of a shutdown during the period. John Boehner noted that the measure amounted to a small step toward the GOP's goal of deficit reduction. "Is it perfect? Does it go far enough? No, not at all," Boehner said, but he still urged his colleagues to support the plan. The deal now goes to the Democrat-led Senate, which is expected to authorize the legislation next week.
Top Stock News
Adobe shares jump as cloud service continues momentum. Adobe's (ADBE) FQ4 net profit slumped to $65.3M from $222.3M, revenue dropped 9.6% to $1.04B, and the company provided guidance that fell short of Wall Street expectations. However, shares surged 7.9% premarket after Adobe reported an acceleration of growth in its Creative Cloud online subscription service, which includes Photoshop, Illustrator and Flash, with the company adding 402,000 users vs 331,000 in FQ3. "Investors are giving Adobe's management team credit for its progress despite the light profit to this point," says analyst Josh Olson.
Intel threatened as Google mulls creating own server chips. Google (GOOG) is reportedly thinking about designing its own server processors using technology from ARM Holdings (ARMH). The idea is that with its own chips, Google could better manage the interaction between hardware and software. The move could hurt Intel (INTC), which earns over 4% of its revenue from the search giant, and which has a 95% share of the market for server chips that use PC processors.
Boeing-union talks over 777X labor deal collapse again. Negotiations between Boeing (BA) and the International Association of Machinists & Aerospace Workers over a labor contract have collapsed after three days of talks. A deal would have meant that the company would have decided to build the latest version of the 777 in the Seattle area. Boeing appears to have plenty of other options - it has received bids from 22 states to construct the 777X at 54 possible locations across the U.S.
Texas Industries owners exploring sale of company. Texas Industries' (TXI) majority owners, Southeastern Asset Management and NNS Holding, are considering selling the Dallas-based building materials company. TXI, which has a market cap of $1.67B, could attract interest from rivals such as Vulcan Materials (VMC) and Switzerland's Holcim (OTCPK:HCMLY). TXI's shares jumped 9.3% in post-market trading.
Microsoft adds Qualcomm COO to CEO candidate list. Qualcomm (QCOM) COO/chip division chief Steve Mollenkopf has reportedly been added to Microsoft's (MSFT) list of potential Steve Ballmer replacements. Alan Mulally's candidacy has faded due to concerns about his lack of technology experience, although he could still get the job.
American Water Works names new CFO to succeed Sterba as CEO. American Water Works (AWK) CEO Jeff Sterba will retire in May 2014 and will be replaced by CFO Susan Story. It's a fast promotion for Story, who joined American Water Works in April this year after 30 years at Southern Co. (SO).
Top Economic & Other News
India suffers stagflationary trends. Indian CPI rose 11.2% in November and exceeded consensus of 10%, while industrial production fell 1.8% in October vs expectations for -1.2%. The trends exacerbate the dilemma for the Reserve Bank of India, which is due to meet next week, about how to bring down inflation against a background of weak growth. The data "paint a stagflationary picture of the economy where despite weaker growth, inflation remains elevated due to supply-shocks," says Nomura economist Sonal Varma.
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In Asia, Japan +0.4% to 15403. Hong Kong +0.1% to 23246. China -0.3% to 2196. India -1% to 20716.
In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.3%.
Futures at 6:20: Dow +0.3%. S&P +0.4%. Nasdaq +0.4%. Crude -0.4% to $97.11. Gold -0.1% to $1223.30.
Ten-year Treasury Yield flat at 2.89%.
Today's economic calendar:
8:30 Producer Price Index
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