- BASF buys Cognis. BASF (OTC:BASFY) agreed to buy specialty chemical firm Cognis for €3.1B ($3.8B). The purchase will help move BASF away from commodity chemicals that competitors produce more cheaply and push it towards high-margin businesses like personal care and cosmetics. Cognis is owned by Goldman Sachs (GS), Permira Advisers and SV Life Sciences, and its sale is among the largest deals in the chemical industry this year as M&A begins to recover.
- AT&T cleared to buy Verizon assets. AT&T (T) received regulatory approval yesterday for its purchase of Verizon Wireless' (VZ, VOD) wireless spectrum license. The $2.35B deal will bring AT&T as many as 1.6M new customers and expand its network in primarily rural service areas across 18 states.
- Judge overturns deepwater drilling ban. U.S. District Judge Martin Feldman ruled against the six-month moratorium on deepwater drilling in the Gulf of Mexico, saying the Interior Department assumed, incorrectly, that just because one rig failed, all companies and rigs constitute an imminent danger. Interior Secretary Ken Salazar said he would issue an order within days to effectively reinstate the ban, and a White House spokesman said the ruling will be appealed. Offshore drillers saw their shares spike briefly following the court's decision, but for the most part, shares closed down, as drillers are wary of resuming operations during such an uncertain appeals process. Hornbeck Offshore Services (HOS), the firm that originally brought the suit, closed -1.5% in yesterday's trading.
- Petrobras delays share sale. Brazilian oil giant Petrobras (PBR) postponed a $25B stock offering until September because of a delay in a related deal to buy oil reserves from the government. Petrobras is buying the rights to up to 5B barrels of oil from the Brazilian government using stock, but industry regulators won't set a price on the oil reserves until the end of August. The delay is a setback to Petrobras' 2010 investment plan, and could lead to further postponements if the offering is scheduled too close to the presidential election in October.
- Bank tax gains momentum. The U.K. rolled out a new bank levy that will go into effect in January and raise around £2B ($3B) annually. The tax, to be based on the size of banks' balance sheets, will apply to both U.K. banks and the U.K. operations of foreign banks. France and Germany pledged to introduce similar measures. As the idea of a bank tax gains international momentum, banks such as Deutsche Bank (DB), Bank of America (BAC) and Goldman Sachs (GS) have indicated that they will look to see how much of their balance sheets can be moved offshore to countries like Switzerland and Japan.
- Last push on reform. Rep. Barney Frank and Sen. Chris Dodd aim to reconcile the House and Senate financial overhaul bills by tomorrow. Frank said the timing is necessary to allow the package to be presented at this weekend's G-20 summit and to get the bill signed into law by July 4. Several big issues must still be addressed, including derivatives regulation and which banks should be required to post higher capital requirements.
- Another probe for Google's Street View. The U.K. police have joined the growing list of officials investigating Google's (GOOG) Street View wireless data-gathering, following a formal complaint from Privacy International. Regulators from Germany, France, Spain, Italy, Canada and Hong Kong are looking into the matter as well, along with as many as 30 U.S. states.
- Prosecutors go after Madoff's aides. Widening their net on the Bernie Madoff case, federal prosecutors filed civil lawsuits yesterday accusing two of Madoff's longtime back office employees of "knowingly perpetuat[ing]" the fraud. The lawsuits seek to seize around $5M in assets from employees Annette Bongiorno and JoAnn "Jodi" Crupi.
Earnings: Tuesday After Close
- Adobe (ADBE): FQ2 EPS of $0.44 beats by $0.01. Revenue of $943M (+33.8%) vs. $906M. Shares -2.3% AH. (PR)
- Jabil Circuit (JBL): FQ3 EPS of $0.40 beats by $0.07. Revenue of $3.5B (+32.2%) vs. $3.2B. Shares +8.9% AH. (PR, earnings call transcript)
- Red Hat (RHT): Q1 EPS of $0.18 in-line. Revenue of $209M (+19.9%) vs. $203M. Shares +0.3% AH. (PR, earnings call transcript)
- In Asia, Japan -1.9% to 9923.7. Hong Kong +0.2% to 20857. China -0.7% to 2570. India flat at 17756.
- In Europe, at midday, London -0.5%. Paris -0.6%. Frankfurt -0.2%.
- Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.4%. Crude -0.4% to $77.51. Gold +0.4% to $1246.20.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
10:00 New Home Sales
10:30 EIA Petroleum Inventories
1:00 PM 5-Year Note Auction
2:15 PM FOMC Announcement
2:30 PM Hearing: U.S.-China Economic Ties
- Notable earnings before Wednesday's open: KMX, RAD
- Notable earnings after Wednesday's close: BBBY, DRI, NKE, PAYX
Seeking Alpha's Market Currents team contributed to this post.
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