World stocks recover as Putin eases tensions a bit. Global equity markets have rallied from sharp losses yesterday while gold and oil have fallen following what could be interpreted as a de-escalation of tensions by Russian President Vladimir Putin, who ordered some military units back to their bases after a surprise training exercise that began last week. Some of the drills took place near the border with Ukraine, exacerbating fears about a possible Russian invasion of its neighbor. At a press conference, Putin said his country has no need to use force against Ukraine but retains the right to consider all its options, and it has no intention of annexing Crimea.
BP suffers major blow over Gulf spill claims. BP (NYSE:BP) is facing having to make large amounts of what it feels are unjustified payments after a federal appeals court ruled that Gulf coast businesses can claim compensation for the Deepwater Horizon spill without directly proving that the disaster caused them losses. So far, such claims have cost BP hundreds of millions of dollars. The company has options for further appeal and might be comforted that the panel voted 2-1 rather than unanimously.
Top Stock News
Glencore Xstrata's adjusted profit rises. Glencore Xstrata's (OTCPK:GLNCY) 2013 adjusted net income rose 20% to $3.67B but missed consensus of $3.81B, with the figure boosted by the addition of Xstrata and a strong performance at the company's commodities trading operations. However, Glencore Xstrata swung to an overall net loss of $7.4B from a net profit of $1B in 2012, due to a $7.5B writedown that the firm booked on the acquisition of Xstrata. Shares were +2.6% in London.
Ukraine tensions could create problems for Boeing. Boeing's (NYSE:BA) business illustrates how radically corporate ties between the U.S. and Russia have changed since the Cold War: Boeing has spent around $7B in Russia since 1991 and plans to increase that amount to $27B by 2021. The company operates a major manufacturing joint venture in Russia with VSMPO-Avisma, the world's largest titanium producer, and it has another one planned. Aeroflot, other Russian airlines and leasing companies hold orders for about 100 Boeing planes valued at billions of dollars.
Reuters: Loral hires bank to advise on sale. Loral Space & Communications (NASDAQ:LORL) has appointed i-bank Perella Weinberg to advise the company's board on a potential sale, Reuters reports. Any bid for Loral, which has a market cap of $1.72B, would depend on the support of 38% shareholder MHR Fund Management.
Top P-E execs enjoy bonanza year. The nine founders of four of the biggest private-equity firms in the world earned over $2.6B between them last year, more than double what they took home in 2012. The executives' base pay is relatively low - in the hundreds of thousands - but they earned the huge amounts from dividends and other payouts as soaring markets allowed their firms to make large profits from cashing out portfolio investments. Apollo Global Management's (NYSE:APO) Leon Black earned the most with $546.3M.
More Duke plants cited for violations after coal-ash spill. North Carolina regulators have cited five additional Duke Energy (NYSE:DUK) power plants for lacking the required storm-water permits after a recent spill at one of the company's coal-ash dumps coated 70 miles of the Dan River in toxic sludge. Two other violations were issued on Friday. Still, Duke only face fines of hundreds of thousands of dollars for the breaches.
Top Economic & Other News
Obama looks to expand tax break for the low-paid. President Obama is due to propose expanding the Earned Income Tax Credit to 13.5M childless workers when he unveils his annual $1.014T budget plan today. The 10-year $60B cost would be met by closing two tax loopholes for some self-employed professionals and investment-fund managers. Obama also wants to spend $302B on highways, bridges and transit projects, and increase the minimum wage. However, the president's budget has little chance of being approved as is.
Australia keeps interest rates at 2.5%. As expected, the Reserve Bank of Australia has held its key cash rate at 2.5% for the seventh month in a row and indicated that it will continue the policy amid high unemployment. "On present indications the most prudent course is likely to be a period of stability in interest rates," Governor Glenn Stevens said in a statement. "The bank expects unemployment to rise further before it peaks," he added. The jobless rate is at a 10-year high of 6%.
Japanese salaries begin to creep up. Japanese wages have risen for the first time in almost two years, with base pay inching up 0.1% on year in January, although overall pay dropped 0.2%. Still, the increase in base pay should be encouraging for a government that has been exhorting companies to raise wages as part of the battle against deflation. The figures come as business and union leaders negotiate salaries for the next fiscal year.
Top Ideas: Movers and Great Calls
1) On February 17, in the wake of FDA approval for Auxilium Pharma's (NASDAQ:AUXL) Xiaflex treatment for Peyronie's Disease, hedge-fund manager Chris DeMuth Jr. saw nearly 50% upside in the company's stock on the back of a strong men's healthcare franchise and the potential for huge free cash flow. Shares are +15% since. Read article »
2) Dennis Beaudet called out UR-Energy (NYSEMKT:URG) in early November and predicted a reversal of the headwinds that have hammered uranium producers over the past few years. The stock is +66% to date. Read article »
Top Ideas To Watch
1) Street Smart Investor's first call on Norwegian oil producer DNO International (OTCPK:DTNOF) posted strong returns; new export markets and discoveries mean another 60% upside is likely. Read article »
2) Sonus Networks (NASDAQ:SONS) can compete with entrenched technology leaders, as a shrewd acquisition and new products should drive upside, writes Helix Investment Research. Read article »
Top Ideas are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas, which often move markets. For more information about SA PRO and becoming a subscriber, click here.
In Asia, Japan +0.5% to 14721. Hong Kong +0.7% to 22658. China +0.2% to 2071. India +1.3% to 21210.
In Europe, at midday, London +1.4%. Paris +2.4%. Frankfurt +1.8%.
Futures at 6:20: Dow +1%. S&P +1.1%. Nasdaq +1%. Crude -1.3% to $103.56. Gold -0.9% to $1338.20.
Ten-year Treasury Yield +5 bps at 2.66%
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