Wall Street Breakfast: Must-Know News

Includes: DIA, GLD, QQQ, SPY, USO
by: Mary Hunt
Mary Hunt
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

  • France, U.K. GDPs improve. France's GDP was up 0.6% in Q4 of 2009, according to government statistics released this morning, but the country still recorded an economic contraction of 2.2% for 2009. U.K. GDP for Q4 of 2009 came in at a better than expected +0.4%; the Office of National Statistics attributes the economy's expansion to growth in services, agriculture and construction. For the year, British economic contraction stood at -4.9%, which was an improvement from the estimated -5%. After a quick opening bounce, however, both countries' markets resumed a downward trend.
  • Iron ore prices go much higher. Iron miners including Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP) have ended the 40-year-old system of annual contracts and have signed new agreements with Asian steel mills to price iron ore on a quarterly basis. Vale and Sumitomo Metal Industries (OTC:SMMLY) agreed to new prices for the quarter beginning April 1 that represent a 90% price jump, as Credit Suisse predicted. China is resisting the price increases, and a judge yesterday blamed the collapse of the annual-price talks on Rio Tinto (RTP) executives convicted of bribery and trading secrets. Premarket (6:45 ET) RTP +1.5%; BHP +1.16%; VALE +3.12%.
  • Treasury details its get-out-of-Citi plan. The Treasury confirmed its plan to sell all of its 27% stake in Citigroup (NYSE:C) - 7.7B shares - in 2010, through an orderly sale at various times and at market prices, orchestrated by Morgan Stanley (NYSE:MS). Citi shares tumbled 3% on 175% of recent daily volume. The government won't estimate potential profits, but it could make $8B - which would be the biggest profit of the bank bailout program.
  • Regulator probes Wall Street repos. The SEC is questioning some two dozen firms about whether they used Lehmanesque repurchase agreements to move assets off their balance sheets in the past three years - and where those deals were done and with which counterparties. Lehman Brothers' use of "Repo 105s" let it shift $50B off the balance sheet, altering its leverage ratios. The agency will make the firms' responses public.
  • China's 'missed opportunity.' Australian Prime Minister Kevin Rudd lamented China's lack of transparency in the Rio Tinto (RTP) case and said "serious unanswered questions" remain surrounding the conviction of four employees for bribery and stealing commercial secrets. "We really have no insight into what the four people allegedly did," Gabriella Stern writes. At best, the cost and risk of doing business in China has just risen significantly; at worst, it's another move down a slippery slope toward a dangerous conflict with China.
  • New Apple phone to end AT&T's lock. Apple (NASDAQ:AAPL) is producing new iPhones for summer, The Wall Street Journal reports, including a phone based on CDMA, the wireless technology used by such competitors to AT&T (NYSE:T) as Verizon Wireless (VZ, VOD) and Sprint (NYSE:S). AT&T has had an exclusive carrier arrangement for the phone since its 2007 launch. Various rumors have Apple producing an "iPhone HD" with a custom processor, multitasking support and a front-facing camera.
  • Greece pays up for bond offering. Beleaguered Greece paid more than it would have cared to in a €5B seven-year bond sale Monday, its third syndicated offering of the year. Terms gave the bond a yield just over 6%, compared with 2.67% paid on comparable German bunds. Greek officials had hoped the premium they paid over German offerings would be no more than two percentage points. The government got €6B in orders, compared to €15B for 10-year bonds issued on March 4 with a premium over existing debt.
  • A chance for the yuan. World Bank President Robert Zoellick says China's efforts to make its economy more consumer-driven could become an opportunity for Beijing to revalue its currency, adding to the weight of opinion that attempts to convince the Chinese of the benefits of renminbi appreciation. But Europe is unlikely to join any yuan offensive, and Asian countries probably will keep silent for fear of economic or political repercussions from their influential neighbor.
  • Cisco gets acquisition OKs. Cisco Systems (NASDAQ:CSCO) cleared its last hurdles in a $3.4B acquisition of Norway's Tandberg, securing approvals from the EU and the Justice Department. Cisco had to divest itself of a "telepresence" standard the company made for interoperability with competitors. Separately, Cisco said it secured its biggest telepresence deal, with Bank of America (NYSE:BAC) agreeing to buy 200 units.
  • Personal spending rises, on flat income. Personal spending rose 0.3%, in line with expectations, while personal income remained flat in February vs. consensus of a 0.1% gain, the Commerce Department reported. It was the fifth straight monthly increase in spending.

Today's Markets

  • In Asia, Nikkei +1.0% to 11097. Hang Seng +0.65% to 21375. Shanghai +0.15% to 3128. BSE -0.8% to 17565.
  • In Europe at midday, London +0.05% to 5713. Paris +0.17% to 4007. Frankfurt +0.16% to 6166.
  • Futures: S&P +0.19%. 10-yr +0.04%. Euro -0.05% vs. dollar. Crude +0.12% to $82.27. Gold -0.01% to $1111.40.

Tuesday's Economic Calendar

Seeking Alpha editors Jason Aycock and Carl Surran contributed to this post.

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