- Dell settles with the SEC. Dell (DELL) agreed to pay $100M to settle accounting charges by the SEC, and CEO Michael DEll will pay $4M to settle disclosure-related allegations. Regulators had alleged that Dell improperly hid the effect of massive payment from Intel (INTC) earlier this decade that inflated earning and misled investors. Dell neither admitted nor denied wrongdoing.
- Probe turns to two BP managers. Two BP (BP) managers have been named "parties of interest" in a federal probe of the Deepwater Horizon oil rig disaster, indicating they're potential targets of the investigation. Robert Kaluza, a BP employee overseeing operations on the rig, and Patrick O'Bryan, BP's vice president in charge of drilling, are the first BP employees to be named as targets in the case; five employees of Transocean (RIG) had previously been named. While the probe continues, BP's relief efforts in the Gulf have temporarily ceased, delayed by tropical storm Bonnie which could reach the well site by tomorrow. Premarket: BP +2.3%, RIG +1.5% (7:00 ET).
- SEC caves on bond ratings. The SEC moved to restore some calm to bond markets, temporarily allowing sales to go forward without credit ratings in bond offering documents. Ratings agencies S&P, Moody's and Fitch are refusing to let bond issuers use their ratings, saying the new financial reform laws create too much risk for them. Since major parts of the bond markets legally require a rating, the SEC will allow a six-month exemption, calling it a "transition period" but giving little guidance as to what will happen at the end of six month.
- NY sues BofA. The State of New York has sued Bank of America (BAC) on its own, rather than joining an existing class-action suit, over the Merrill Lynch takeover and subprime mortgage exposure. The state, which has one of the nation's largest pension funds, hopes to recover more money in a stand-alone case, potentially as much as tens of millions of dollars. Premarket: BAC +0.7% (7:00 ET).
- Pay czar to blast bank payments. Pay czar Ken Feinberg is expected to release a report today citing 17 financial firms for making $1.6B in "ill-advised" payments during the financial crisis. Firms on the list are said to include Goldman Sachs (GS), JPMorgan (JPM) and Citigroup (C). However, as Feinberg doesn't have the authority to demand the money be returned, the report is mostly to put political pressure on the firms and to push them to impose more limitations on payouts.
- Jobless benefits extended. Obama signed a six-month extension of emergency jobless benefits yesterday, just hours after the House approved the $34B measure. The move restores aid to nearly 3M people whose checks had been cut off since the program expired in early June, but puts further pressure on an already-bloated government budget.
- SEC watchdog broadens Goldman settlement probe. SEC Inspector General David Kotz has broadened an ongoing probe into the agency's settlement with Goldman Sachs (GS) to include the timing of the settlement. Some lawmakers have accused the SEC of playing politics with its lawsuit against Goldman, and the settlement was announced on the same day the Senate passed the financial reform bill.
- Mattel loses Bratz ruling. A federal appeals court ruled that Mattel (MAT), maker of the Barbie doll, was wrongly granted ownership of the popular Bratz dolls and that rival MGA Entertainment can continue to sell them. The decision could lead to a new trial over control of the franchise that generated $1B in annual sales at its peak. In his ruling, Chief Judge Alex Kozinski wrote "America thrives on competition; Barbie, the all-American girl, will too."
- Murphy Oil to sell refining business. Murphy Oil (MUR) said it would sell its three refineries to focus on oil and gas exploration and its U.S. retail business. Refiners have been hurt by the global economic slowdown, and Murphy called the refineries "nonstrategic assets." A sale could bring in at least $1.5B. In after-hours trading, MUR rose 2.3%.
- Green Dot's dapper debut. Prepaid debit-card provider Green Dot (GDOT) priced above its $32-35 range in a $164M IPO, and saw shares rise 22.2% yesterday to $43.99. It's a windfall for owners like Wal-Mart (WMT) and investors have high hopes for Green Dot, which has doubled earnings every year since 2006. However, the excitement may have gotten out of hand, as even at the midpoint of its original IPO range, the stock's P/E of 27 was higher than competitors like Visa (V).
- Investors unamazed by AMZN earnings report. Shares of Amazon (AMZN) fell over 13% in after-hours trading, following the company's Q2 earnings miss (see details below). An increase in operating expenses contributed to the EPS miss, and discounted merchandise may have played a role as well as Amazon faced increased competition from traditional stores like Wal-Mart (WMT) and over its e-reader from companies like Apple (AAPL) and Barnes & Noble (BKS).
- U.K. GDP grows 1.1%. The U.K.'s economy grew a much stronger-than-expected 1.1% in Q2, according to a government release earlier this morning, handily beating estimates of +0.6% and marking the fastest growth in four years. The increase in output was due mainly to increases in business services and finance and construction. The British economy expanded by 0.3% in the previous quarter. The pound is +1.2% vs. the dollar (7:00 ET).
- Hungary shuns IMF, ratings agencies hover. Hungary's prime minister Viktor Orban indicated he won't renew a safety net with the IMF and will back out of a commitment to cut the budget deficit to EU-prescribed levels next year. Hungary's belief that it can access capital markets without the IMF is a "myth," said one economist, and Moody's has put Hungary's Baa1 sovereign rating under review for possible downgrade.
Earnings: Friday Before Open
- Ashland (ASH): FQ3 EPS of $1.22 beats by $0.09. Revenue of $2.36B (+16%) vs. $2.30B. (PR)
- Dover (DOV): Q2 EPS of $0.91 beats by $0.13. Revenue of $1.8B (+29.5%) vs. $1.66B. (PR)
- Honeywell International (HON): Q2 EPS of $0.60 may not be comparable to consensus of $0.57. Revenue of $8.2B (+41%) vs. $8B. (PR)
- Schlumberger (SLB): Q2 EPS of $0.68 in-line. Revenue of $5.9B (+7.4%) in-line. (PR)
Earnings: Thursday After Close
- Amazon.com (AMZN): Q2 EPS of $0.45 misses by $0.07. Revenue of $6.6B (+41.3%) vs. $6.5B. Shares -13.7% AH. (PR, earnings call transcript)
- American Express (AXP): Q2 EPS of $0.84 beats by $0.06. Revenue of $6.9B (+12.6%) in-line. Shares -0.7% AH. (PR)
- Bucyrus International (BUCY): Q2 EPS of $0.89 misses by $0.08. Revenue of $869M (+19.9%) vs. $943M. (PR)
- Canadian National Railway (CNI): Q2 EPS of $1.13 beats by $0.14. Revenue of $2.1B (+17.5%) in-line. Shares +0.1% AH. (PR, earnings call transcript)
- Capital One (COF): Q2 EPS of $1.33 may not be comparable to consensus of $0.88. Revenue of $3.9B (-5.9%) vs. $4B. Shares -2.6% AH. (PR, earnings call transcript)
- Cheesecake Factory (CAKE): Q2 EPS of $0.39 beats by $0.01. Revenue of $419M (+2.7%) in-line. (PR, earnings call transcript)
- Chubb (CB): Q2 EPS of $1.41 beats by $0.01. Revenue of $2.9B (+1.4%) vs. $2.8B. Shares -0.1% AH. (PR, earnings call transcript)
- Compuware (CPWR): FQ1 EPS of $0.06 in-line. Revenue of $207M (-3.7%) vs. $219M. Shares -12.2% AH. (PR, earnings call transcript)
- Covanta (CVA): Q2 EPS of $0.17 misses by $0.06. Revenue of $435M (+15.7%) vs. $426M. Shares -0.4% AH. (PR)
- CyberSource (CYBS): FQ1 EPS of $0.23 beats by $0.02. Revenue of $77M (+26.6%) vs. $74M. (PR)
- E*TRADE Financial (ETFC): Q2 EPS of $0.12 beats by $0.23. Revenue of $534M (-14%) vs. $300M. Shares +7.1% AH. (PR, earnings call transcript)
- Federated Investors (FII): Q2 EPS of $0.46 beats by $0.07. Revenue of $232M (-24.6%) vs. $237M. (PR)
- Flextronics International (FLEX): FQ1 EPS of $0.19 beats by $0.01. Revenue of $6.6B (+13.5%) vs. $6.4B. Shares -3.2% AH. (PR, earnings call transcript)
- Informatica (INFA): Q2 EPS of $0.25 beats by $0.02. Revenue of $156M (+32.7%) vs. $144M. Shares +3.5% AH. (PR, earnings call transcript)
- Leggett & Platt, Inc. (LEG): Q2 EPS of $0.34 beats by $0.04. Revenue of $874M (+15.4%) vs. $833M. Shares +0.1% AH. (PR)
- Microsoft (MSFT): FQ4 EPS of $0.51 beats by $0.05. Revenue of $16B (+22.5%) vs. $15.3B. (PR, earnings call transcript)
- Mosaic (MOS): FQ4 EPS of $0.89 beats by $0.02. Revenue of $1.9B (+16.7%) vs. $2.2B. Shares +2.8% AH. (PR)
- NCR (NCR): Q2 EPS of $0.35 beats by $0.08. Revenue of $1.2B (+4.7%) in-line. Shares -0.5% AH. (PR, earnings call transcript)
- Newfield Exploration (NFX): Q2 EPS of $1.06 misses by $0.02. Revenue of $448M (+56.1%) vs. $548M. (PR)
- PMC-Sierra (PMCS): Q2 EPS of $0.20 beats by $0.01. Revenue of $161M (+30.4%) vs. $159M. Shares -2.6% AH. (PR)
- QLogic (QLGC): FQ1 EPS of $0.30 beats by $0.01. Revenue of $143M (+16.1%) vs. $144M. Shares -10.4% AH. (PR, earnings call transcript)
- Rambus (RMBS): Q2 EPS of -$0.11 misses by $0.04. Revenue of $39M (+57.2%) in-line. Shares -3.4% AH. (PR, earnings call transcript)
- Riverbed Technology (RVBD): Q2 EPS of $0.25 beats by $0.03. Revenue of $126M (+38.8%) vs. $119M. Shares +2.4% AH. (PR, earnings call transcript)
- SanDisk (SNDK): Q2 EPS of $1.08 beats by $0.18. Revenue of $1.2B (+61.5%) in-line. Shares -7.2% AH. (PR, earnings call transcript)
- Skyworks Solutions (SWKS): FQ3 EPS of $0.32 beats by $0.02. Revenue of $275M (+44%) vs. $269M. Shares -2.2% AH. (PR, earnings call transcript)
- STMicroelectronics (STM): Q2 EPS of $0.18 beats by $0.03. Revenue of $2.5B (+27%) in-line. (PR)
- Synovus Financial (SNV): Q2 EPS of -$0.36 misses by $0.06. Shares -6.6% AH. (PR)
- In Asia, Japan +2.3% to 9431. Hong Kong +1.1% to 20815. China +0.4% to 2572. India +0.1% to 18131.
- In Europe, at midday, London -0.2%. Paris +0.4%. Frankfurt +3.1%.
- Futures: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude -0.4% to $78.99. Gold +0.2% to $1197.60.
Friday's Economic Calendar
- 10:30 ECRI Leading Index
- Notable earnings before Friday's open: ALV, ASH, BPOP, DLR, DOV, ERIC, F, HON, IR, JCI, KMB, MCD, MHP, SLB, TROW, VZ, WL
Seeking Alpha's Market Currents team contributed to this post.
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