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  • Palm stops sweating after H-P deal. Hewlett-Packard (HPQ) agreed to buy Palm (PALM) in a $1.2B deal, saying Palm's webOS operating system will help it compete in the smartphone market. Palm shareholders who watched the beleaguered stock rollercoaster in recent weeks will receive $5.70 in cash for each share of common stock, a 23% premium over Palm's share price before the deal was announced. The buyout news buried Palm's disclosure that it expects revenue for the latest quarter to be $90M-100M, short of its previous forecast of around $150M. Revenue is "being impacted by slow sales of the company’s products, which has resulted in low order volumes from carriers." In after hours trading, HPQ -0.7%, PALM +24.2%.
  • Greek rescue costs ballooning. According to German officials, IMF chief Dominique Strauss-Kahn has pledged to increase Greece's €45B aid package, committing to as much as €120B ($158B) over three years. Meanwhile, Germany's Merkel said talks to help Greece need to speed up, with officials suggesting the terms of the aid could be finalized by this weekend. Economists at Goldman Sachs, JPMorgan and Royal Bank of Scotland suggested Europe needs to think much bigger - something like €600B ($794B) in aid or buying sovereign debt - to extinguish contagion fears sparked by Greece's debt crisis and the recent downgrades to European countries (see more below). Euro +0.3% against the dollar (7:00 ET).
  • Spain downgraded, contagion fears spread. Ratings agency S&P downgraded Spain one notch to AA from AA+ yesterday and maintained a negative outlook, following downgrades to Greece and Portugal on Tuesday. According to a Brown Brothers analysts, more downgrades of Spain are imminent: "Moody’s and Fitch still have Spain as a triple-A credit... When those other two move into double-A range, they will likely cause even bigger ripples than today’s S&P move." Spain, unlike Greece and Portugal, is a major contributor to the eurozone economy, and the eurozone might not be able to mount an effective rescue should a Spanish debt crisis develop.
  • PPL is surprise winner in E.On asset sale. PPL (PPL) said yesterday evening that it will buy E.On's (OTCQX:EONGY) U.S. assets for $6.7B in cash, surprising investors who thought Duke Energy (DUK) had won the three-way competition. The deal, the largest in the power sector in the last two and a half years, will let PPL refocus on steadier, regulated operations and will allow E.On to reduce some of its debt burden. PPL closed -7.7% in regular trading after reports of the deal surfaced earlier in the day, and Duke closed +3.9%.
  • Obama's nominees for the Fed board. Obama is expected to nominate two economists and a lawyer to the Federal Reserve Board today; Janet Yellen (San Francisco Fed president) would become vice chairman, and Peter Diamond (MIT economist) and Sarah Bloom Raskin (Maryland state banking regulator) would also join the seven-member board. Though the nominations aren't expected to create any major shifts in interest-rate policy, the individuals would likely reinforce the Fed's activist leanings as the central bank moves to monitor the financial system, regulate risk-taking, review compensation policies and tighten consumer regulation.
  • Republicans blink on financial reform. For the third day in a row, Republicans unanimously blocked a procedural vote on Wednesday that would have initiated debate on the financial reform bill. However, the Senate stalemate appears to have ended, as Sen. Mitch McConnell (R, KY.) subsequently said Republicans will allow debate to begin. The breakthrough came after lawmakers reached a bipartisan agreement on the idea of resolution authority, with Democrats ceding ground and agreeing to give up on the $50B fund for winding-down failing financial firms. The debate will begin today, with lawmakers still divided on issues including derivatives regulation and consumer protection.
  • FOMC leaves language unchanged. As expected, the Federal Open Market Committee maintained its near-zero rates and said it expects rates to remain at their current levels "for an extended period," keeping the language that has accompanied the rate statement for more than a year. Kansas City Fed's Thomas Hoenig was the lone dissenting vote for the third time this year. The economy has continued to strengthen but resource slack still means inflation will be "subdued for some time." With all but one of the emergency liquidity facilities closed, the last one [TALF] is still set to expire June 30.
  • Goldman in CDO settlement talks. Goldman Sachs (GS) is said to be in talks to settle with a hedge fund investor over CDO losses. The hedge fund, Basis Yield Alpha Fund, claims it lost money and went out of business after investing $100M in a mortgage-backed security that Goldman executives later criticized privately. Though a settlement is far from certain and talks are still in early stages, reports of the negotiations put additional pressure on Goldman and could pave the way for other investors to make similar claims. Premarket: GS +0.9% (7:00 ET).
  • BP oil spill estimates grow. New estimates from the U.S. Coast Guard indicate that the damaged BP (BP) oil well in the Gulf of Mexico is leaking up to 5,000 barrels of crude daily, five times more than the previous estimate, in part because an additional breach in the oil well was discovered. At present, the spill is around 600 miles in circumference and growing, and is expected to reach the shoreline as soon as tomorrow. BP says it's spending $6M daily to fight the leak. Premarket: BP -1.4% (7:00 ET).
  • Lions Gate appeals poison pill ruling. Lions Gate Entertainment (LGF) is seeking to appeal the decision of a Canadian regulatory body which invalidated the company's poison pill plan. Lions Gate has rescheduled its shareholder meeting to May 12 to give the appeals court time to evaluate the company's request.
  • More Toyota recalls. Toyota (TM) is recalling 50,000 2003-model Sequoia SUVs to address an issue with the electronic stability-control system. The same safety issue plagued the company's Lexus GX 460 SUVs, which were recalled last week following a Consumer Reports article that labeled the vehicles unsafe and advised consumers not to buy them.
  • Continental board meets over merger. Continental's (CAL) board reportedly met yesterday and planned a second meeting for Friday to discuss a possible merger with United Airlines (UAUA). The move suggests that the airlines are optimistic about reaching an eventual deal, despite ongoing disagreements about how to price the transaction.
  • Executive shuffle. Merck (MRK) promoted Kenneth Frazier, a senior executive who has been head of the company's human-health unit, to president, signaling Frazier is a likely successor for CEO when current chief executive Richard Clark steps down next year. Separately, Bank of America's (BAC) board chose Charles O. Holliday Jr., a former DuPont CEO and close adviser to BofA chief Brian Moynihan, to be chairman.

Earnings: Thursday Before Open

  • Aetna (AET): Q1 EPS of $0.77 beats by $0.05. Revenue of $8.5B (-0.9%) vs. $8.6B. Shares +2% premarket. (PR)
  • Burger King (BKC): FQ3 EPS of $0.32 beats by $0.03. Revenue of $597M (-0.5%) vs. $598M. (PR)
  • Eastman Kodak (EK): Q1 EPS of $0.82 misses by $0.08. Revenue of $1.9B (+31%) in-line. (PR)
  • Potash Corp. (POT): Q1 EPS of $1.47 beats by $0.15. Revenue of $1.7B (+86%) vs. $1.5B. Shares -2.8% premarket.
  • Time Warner Cable (TWC): Q1 EPS of $0.60 misses by $0.14. Revenue of $4.6B (+5%) in-line. (PR)
  • Viacom (VIA.B): Q1 EPS of $0.40 beats by $0.02. Revenue of $2.8B (-4%) vs. $2.9B. (PR)

Earnings: Wednesday After Close

  • ACE Ltd. (ACE): Q1 EPS of $2.22 beats by $0.56. Shares +0.4% AH. (PR)
  • Akamai Technologies (AKAM): Q1 EPS of $0.35 beats by $0.04. Revenue of $240M (+14.1%) vs. $230M. Shares +9% AH. (PR)
  • Allstate (ALL): Q1 EPS of $0.69 misses by $0.10. Revenue of $6.3B (-0.2%) vs. $6.2B. (PR)
  • Assurant (AIZ): Q1 EPS of $1.32 beats by $0.28. Revenue of $2.2B vs. $2B. (PR)
  • AvalonBay Communities (AVB): Q1 EPS of $0.96 beats by $0.02. Revenue of $219M (-0.4%) vs. $210M. (PR)
  • Baidu.com (BIDU): Q1 EPS of $2.02 beats by $0.52. Revenue of $190M (+59.9%) vs. $180M. Shares +14.6% AH. (PR)
  • Brandywine Realty (BDN): Q1 EPS of $0.34 beats by $0.01. Revenue of $143M (-2.5%) vs. $139M. (PR)
  • Cadence (CDNS): Q1 EPS of $0.02 beats by $0.01. Revenue of $222M (+7.8%) vs. $215M. Shares +0.1% AH. (PR)
  • CB Richard Ellis Group (CBG): Q1 EPS of $0.01 in-line. Revenue of $1B (+15.3%) in-line. Shares +3% AH. (PR)
  • CBL & Associates (CBL): Q1 EPS of $0.49 beats by $0.03. Revenue of $266M (-1.8%) vs. $262M. (PR)
  • Cliffs Natural Resources (CLF): Q1 EPS of $0.69 beats by $0.16. Revenue of $728M (+56.6%) vs. $690M. Shares +2.1% AH. (PR)
  • Crown Castle (CCI): Q1 EPS of -$0.43 misses by $0.28. Revenue of $444M (+10.3%) vs. $442M. Shares +0.4% AH. (PR)
  • Duke Realty (DRE): Q1 EPS of $0.28 in-line. Revenue of $222M (+2.2%) vs. $216M. (PR)
  • Equifax (EFX): Q1 EPS of $0.56 beats by $0.01. Revenue of $461M (+3.3%) vs. $464M. Shares -2.4% AH. (PR)
  • Equity Residential (EQR): Q1 EPS of $0.51 beats by $0.01. Revenue of $488M (+1.7%) vs. $479M. Shares +2.4% AH. (PR)
  • Express Scripts (ESRX): Q1 EPS of $1.10 in-line. Revenue of $11.1B (+105.5%) vs. $11B. Shares -2.8% AH. (PR)
  • First Solar (FSLR): Q1 EPS of $2.00 beats by $0.37. Revenue of $568M (+35.8%) vs. $541M. Shares +7.7% AH. (PR)
  • FMC Technologies (FTI): Q1 EPS of $0.80 beats by $0.16. Revenue of $1.1B (-0.3%) in-line. (PR)
  • Goldcorp (GG): Q1 EPS of $0.22 misses by $0.03. Revenue of $750M (+20.1%) vs. $847M. Shares -0.5% AH. (PR)
  • Green Mountain Coffee Roasters (GMCR): Q2 EPS of $0.60 in-line. Revenue of $325M (+68%) vs. $322M. Shares -14.2% AH. (PR)
  • Illumina (ILMN): Q1 EPS of $0.21 vs. consensus of 0.19 beats by $. Revenue of $192M (+15.9%) vs. $179M. Shares +10.3% AH. (PR)
  • International Coal Group (ICO): Q1 EPS of $0.03 beats by $0.02. Revenue of $289M (-5.4%) vs. $263M. Shares +0.6% AH. (PR)
  • Lincoln National (LNC): Q1 EPS of $0.85 in-line. Revenue of $2.5B (+18.5%) in-line. Shares -2.9% AH. (PR)
  • LSI Logic (LSI): Q1 EPS of $0.14 beats by $0.05. Revenue of $637M (-0.1%) vs. $629M. Shares -2.5% AH. (PR)
  • Owens-Illinois (OI): Q1 EPS of $0.50 beats by $0.03. Revenue of $1.6B (+4.1%) in-line. Shares -1.4% AH. (PR)
  • ONEOK (OKE): Q1 EPS of $1.44 beats by $0.21. Shares +1.3%% AH. (PR)
  • Ryland Group (RYL): Q1 EPS of -$0.33 beats by $0.03. Revenue of $251M (-5.4%) vs. $270M. Shares -3.3% AH. (PR)
  • Service International (SCI): Q1 EPS of $0.13 in-line. Revenue of $531M (+4%) vs. $527M. (PR)
  • Trinity Industries (TRN): Q1 EPS of $0.02 in-line. Revenue of $454M (-42.8%) vs. $445M. (PR)
  • TriQuint Semiconductor (TQNT): Q1 EPS of $0.12 beats by $0.01. Revenue of $180.8M (+52.1%) vs. $175M. Shares -1.8% AH. (PR)
  • Visa (V): Q2 EPS of $0.96 beats by $0.05. Revenue of $1.96B (+18.9%) vs. $1.93B. Raises FY10 net revenue growth outlook, reaffirms EPS growth outlook through FY11. Shares +0.2% premarket (5:52 A.M.) . (PR)
  • Varian Medical Systems (VAR): Q2 EPS of $0.73 beats by $0.05. Revenue of $586M (+5.9%) vs. $579M. Shares -0.8% AH. (PR)
  • VeriSign (VRSN): Q1 EPS of $0.37 beats by $0.02. Revenue of $265M (+4.3%) in-line. Shares -0.4% AH. (PR)
  • Walter Industries (WLT): Q1 EPS of $0.88 misses by $0.01. Revenue of $312M (+10.2%) vs. $305M. Shares -1.2% AH. (PR)
  • Xilinx (XLNX): Q4 EPS of $0.46 beats by $0.01. Revenue of $529M (+33.9%) vs. $521M. Shares -1.5% AH. (PR)

Today's Markets

  • In Asia, Japan -2.6% to 10925. Hong Kong -0.8% to 20779. China -1.1% to 2868. India +0.7% to 17503.
  • In Europe, at midday, London +0.6%. Paris +1.1%. Frankfurt +0.4%.
  • Futures: Dow +0.3%. S&P +0.5%. Nasdaq +0.4%. Crude +1.2% to $84.25. Gold -0.3% to $1168.40.

Thursday's Economic Calendar

Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.


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