- Shell stake sale puts Woodside in play. Shell (NYSE:RDS.A) announced this morning plans to sell around a third of its stake in Woodside Petroleum (OTCPK:WOPEY) for $3.3B, and said it would hold its remaining 24.3% stake in Woodside for at least a year, though it might sell its holdings earlier in the event of a takeover. The surprise move effectively puts Australia's largest oil and gas firm in play, and follows speculation last week that Woodside might be a takeover target as its CEO prepares to step down next year. Premarket: RDS.A -1.6% (7:00 ET).
- More buzz on an AOL-Yahoo tie-up. Media reports continue to buzz about a possible tie-up between AOL (NYSE:AOL) and Yahoo (NASDAQ:YHOO), with sources saying AOL has retained financial advisers to explore strategic options including a deal with Yahoo (and looking at other options as well). However, the reports may be making a mountain out of a molehill: Sources say Yahoo isn't actively eliciting or reviewing proposals, isn't in active discussions with AOL, and AOL hasn't reached out to Yahoo with a proposal. Skeptics also note that any tie-up between the two firms would be immensely complicated for many reasons, including the difficulty of spinning off Yahoo's Asian assets and the fact that AOL's $2.7B market cap is dwarfed by Yahoo's $21.9B. Premarket: YHOO -0.8% (7:00 ET).
- SEC scrutinizes Citi debt funds. The SEC is reportedly investigating certain Citigroup (NYSE:C) debt funds in order to determine whether the bank adequately disclosed the funds' risk levels to investors. Regulators have also subpoenaed Citigroup's former brokers for testimony. At issue are debt funds which invested in muni bonds and mortgage debt and which saw values fall as much as 77% during the credit crisis; three former brokers, who resigned in 2008 over Citi's handling of the funds, have reportedly told the SEC that the funds had been mismanaged and risks hadn't been properly disclosed. Premarket: C -0.9% (7:00 ET).
- Amazon opts for bulk buying with Quidsi deal. Amazon (NASDAQ:AMZN) is said to have reached a deal to buy Quidsi, owner of Diapers.com and Soap.com, for $540M. The purchase reflects a growing consumer trend of purchasing bulk items online, as well as Amazon's tendency to use acquisitions (like last year's Zappos buy) to significantly boost its presence in certain categories. The deal could be announced as soon as this morning. Premarket: AMZN -0.3% (7:00 ET).
- Qantas extends Airbus grounding. Qantas today extended the grounding of its Airbus (OTCPK:EADSY) A380 fleet by 72 hours, after experiencing two engine failures in the past week. CEO Alan Joyce said engineers have found “oil where oil shouldn’t be” on three Rolls-Royce (OTCPK:RYCEY) Trent 900 engines on separate aircraft, and that "our top priority is making sure we have the continued safe operation of the aircraft. If this takes a bit longer, we'll take longer."
- Reliance, GE sign power plant deal. GE (NYSE:GE) signed a $750M contract with Reliance Power over the weekend to supply turbines for a 2400MW power plant project to be located in the southern Indian town of Samalkot. GE is turning to emerging markets to boost growth, and CEO Jeff Immelt said he thinks the company's India business "can now grow at 30% for several years." All told, Reliance said its deals with GE and other U.S. firms will result in more than $2B of manufacturing exports from the U.S. to India over the next two years, while Pres. Obama, who was present during the announcement, said the deals barely scratched the business potential between the two countries and dubbed India as the market of the future. Premarket: GE -0.2% (7:00 ET).
- Berkshire ready for another buy? Berkshire Hathaway (NYSE:BRK.A) may be ready for another major acquisition after its cash holdings jumped 23% to $34.5B in Q3, the highest level in more than two years. To put the figure in perspective, when Berkshire's cash holdings rose to $30.6B at the end of 2009, the company announced a $26.5B stock-and-cash takeover of railroad Burlington Northern around six weeks later. "Berkshire’s acquisition appetite is voracious, yet disciplined," says one analyst, so an acquisition isn't guaranteed, but given that Berkshire doesn't pay a dividend or buy back stock, an acquisition may seem preferable to a steadily growing cash pile.
- World Bank chief wants revised gold standard. Robert Zoellick, president of the World Bank, believes leading economies should consider readopting a modified global gold standard to guide currency movements. In a Financial Times op-ed, Zoellick wrote gold could serve as "an international reference point of market expectations about inflation, deflation and future currency values.” Though the gold standard idea gets discussed from time to time, most policymakers and economists believe it will lead to overly tight monetary policy.
- Focus shifts to eurozone debt woes. The Fed's QE2 announcement and Friday's stronger-than-expected nonfarm payrolls have put Europe back in the spotlight, as investors shift their focus back to the eurozone's debt problems. As of 7:00 ET, the euro was down 1.1% against the dollar with Irish pension issues and Greek elections adding "new elements of uncertainty in the eurozone," though the dollar's rally is unlikely to last unless there's a longer-term improvement in the U.S.' economic outlook.
- Ashland sells distribution unit. Ashland (NYSE:ASH) is selling its global distribution unit to TPG Capital for $930M, a move that Ashland said reflects its "strategic direction and completes a major step in our multi-year transformation into a high-performing specialty chemicals company." The deal is expected to close before the end of March.
- Friday's failures. Four bank closures on Friday brought this year's failures to 143 so far, surpassing 2009's total of 140 and marking the most failures in a year since the S&L crisis. The four closures (I, II, III, IV) will cost the FDIC's insurance fund around $254M; the fund has lost around $21B so far this year, compared to $36B in 2009, as this year's failures have been smaller banks on average.
Earnings: Monday Before Open
- Quicksilver Resources (NYSE:KWK): Q3 EPS of $0.17 beats by $0.01. Revenue of $238M (+15%) vs. $218M. (PR)
- In Asia, Japan +1.1% to 9733. Hong Kong +0.3% to 24964. China +1.0% to 3160. India -0.7% to 20852.
- In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt flat.
- Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.3%. Crude -0.5% to $86.43. Gold -0.5% to $1391.30.
Monday's Economic Calendar
8:00 SIFMA Conference (FDIC's Bair, SEC's Schapiro, Fed's Warsh...)
12:30 PM Fed's Bullard: Monetary Policy and Inflation Outcomes
1:00 PM Results of $32B, 3-Year Note Auction
1:45 PM AFP Conference: Treasury and Finance (Fed's Fisher)
- Notable earnings before Monday's open: AGAM, FTR, KWK, LPX, SYY, WCRX
- Notable earnings after Monday's close: GSS, HOLX, LDK, MDR, PAAS, PCLN, QGEN, RAX, SLW, UDR
Seeking Alpha's Market Currents team contributed to this post.
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