- BofA faces mortgage suit. Bank of America (NYSE:BAC) is facing a lawsuit claiming the bank concealed defects in the recording of mortgages, and that failure to disclose these defects hurt investors when BofA had to temporarily discontinue foreclosures last fall. The plaintiff, a union benefit plan that purchased nearly 25,000 BofA shares last year, is seeking class action status for the suit. BofA declined to comment. Premarket: BAC -0.6% (7:00 ET).
- BofA may have Balboa buyer. QBE Insurance (OTCPK:QBEIF) is said to be in talks to buy U.S. insurer Balboa from Bank of America (BAC) in a deal that would include both upfront payments and an additional payment contingent on Balboa's future performance. The insurer could sell for as much as $1.5B-2B. Though a deal could be reached this week, analysts believe QBE, Australia's largest insurance group, would have to raise new equity to fund more than half the deal, and that may be a tough sell for investors who have watched QBE's shares fall by one-third since the end of 2009.
- Wall Street pushes for century bonds. Wall Street is pushing the government to lock in low interest rates for several decades by issuing very long-term bonds that would mature in as many as 50 or 100 years. Doing so would allow the government to benefit from historically low rates while pushing some of its significant debt into the future, but there's political risk involved in deferring debt payments to future generations. Treasury officials signaled they were open to the idea of bonds that extended beyond thirty years, but dismissed the idea of 'century bonds' which would mature in 100 years.
- Fifth Third nears TARP exit. Fifth Third Bancorp (NASDAQ:FITB), one of the largest banks still holding TARP funds, announced it had repurchased the $3.4B in preferred stock held by the Treasury, bringing it close to exiting the bailout program. The government still holds warrants to purchase more than 43.6M shares, which Fifth Third is looking to repurchase as well. TARP has now recovered $243B of the $245B in bailout funds that were initially disbursed, and the Treasury believes TARP will result in a $20B profit for taxpayers.
- Profit jumps at Deutsche's I-bank. Pretax profit at Deutsche Bank's (NYSE:DB) investment bank jumped to €625M ($862M) from €398M in the year-earlier period, thanks to higher revenue from fixed-income and equities trading. Revenue from sales and trading rose 30% to €2.44B as asset values rebounded. In comparison, trading results declined 8% on average at Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS) and Bank of America (BAC) during the same period. Premarket: DB +2.85% (7:00 ET).
- Shell falls short. Royal Dutch Shell (NYSE:RDS.A) reported Q4 adjusted profit rose 48% to $4.1B, short of the $4.7B analysts had expected, because of lower refining margins, higher taxes and weaker trading results. Net income increased to $6.8B from $2B in the year-earlier period on higher oil prices. CEO Peter Voser said the company is 'on track' to raise output by 11% between 2009 and 2012 as it works on new projects across the world. Premarket: RDS.A -2.7% (7:00 ET).
- Copper climbs to $10,000. After climbing 30% in 2010, copper continues its ascent, reaching a record high of $10,000 per metric ton as investors bet the global recovery will lead to increased demand for industrial metals. Mining companies have found it difficult to keep pace with rising demand, and some analysts believe copper supplies this year will fall short of demand by 822,000 tons, more than double last year's deficit.
- Debt ceiling debacle delayed, a little. The U.S. is on track to hit its $14.29T debt limit by the end of May, slightly later than originally forecast because tax revenues have been stronger than expected. Lawmakers from both sides of the aisle agree a default would be a 'financial disaster,' and an increase in the debt ceiling is nearly guaranteed, but Republicans (and some Democrats) are demanding cuts in government spending as the price of approving an increase.
Earnings: Thursday Before Open
- Banco Santander (STD): Q4 EPS of €0.24 misses by €0.01. Revenue of €10.6B (+16% Y/Y) in-line. Shares -1.2% premarket (7:00 ET). (earnings report)
- CIGNA (NYSE:CI): Q4 EPS of $1.15 beats by $0.13. Revenue of $5.43B (+17.1% Y/Y) beats by $0.07B. (PR)
- Dow Chemical (NYSE:DOW): Q4 EPS of $0.47 beats by $0.12. Revenue of $13.77B (+10.5% Y/Y) beats by $1.29B. Shares +2.3% premarket. (PR)
- Starwood Hotels (HOT): Q4 EPS of $0.52 beats by $0.13. Revenue of $1.34B (+7.5% Y/Y) in-line. (PR)
- ON Semiconductor (ONNN): Q4 EPS of $0.22 in-line. Revenue of $579.2M (+16.5% Y/Y) beats by $2.3M. Shares +1.7% premarket. (PR)
- Patterson-UTI Energy (NASDAQ:PTEN): Q4 EPS of $0.37 beats by $0.04. Revenue of $506M (+136.4% Y/Y) beats by $18.1M. (PR)
- Spectra Energy (NYSE:SE): Q4 EPS of $0.47 beats by $0.07. (PR)
Earnings: Wednesday After Close
- Ace (NYSE:ACE): Q4 EPS of $2.05 beats by $0.21. Revenue of $3.4B (+4% Y/Y) beats by $0.07B. Shares -5.1% AH. (PR)
- Affymetrix (NASDAQ:AFFX): Q4 EPS of $0.06 beats by $0.04. Revenue of $84.9M (-4.4% Y/Y) in-line. Shares +2.4% AH. (PR, earnings call transcript)
- Ameriprise Financial (NYSE:AMP): Q4 EPS of $1.21 misses by $0.10. Revenue of $2.6B (+18% Y/Y) misses by $0.07B. Shares -6.4% AH. (PR)
- BMC Software (NASDAQ:BMC): FQ3 EPS of $0.79 misses by $0.01. Revenue of $540M (+6.3% Y/Y) beats by $12M. Shares -3% AH. (PR, earnings call transcript)
- Cadence (NASDAQ:CDNS): Q4 EPS of $0.07 beats by $0.03. Revenue of $249M (+13% Y/Y) beats by $11M. Shares +0.2% AH. (PR)
- Edwards Lifesciences (NYSE:EW): Q4 EPS of $0.55 beats by $0.02. Revenue of $392M (+13% Y/Y) beats by $12M. Shares -1.5% AH. (PR)
- Equity Residential (NYSE:EQR): Q4 EPS of $0.60 beats by $0.02. Revenue of $517M (+12% Y/Y) misses by $8M. (PR)
- Green Mountain Coffee Roasters (NASDAQ:GMCR): FQ1 EPS of $0.18 beats by $0.02. Revenue of $576M (+66% Y/Y) beats by $20M. Shares +17% AH. (PR)
- GT Solar (SOLR): FQ3 EPS of $0.46 beats by $0.08. Revenue of $263M (+51% Y/Y) beats by $11M. Shares -1.8% AH. (PR)
- Hartford Financial (NYSE:HIG): Q4 EPS of $1.06 beats by $0.10. Shares +4.3% AH. (PR)
- International Coal Group (NYSE:ICO): Q4 EPS of $0.05 misses by $0.02. Revenue of $264M (+8% Y/Y) misses by $30M. Shares -4.9% AH. (PR)
- Intersil (NASDAQ:ISIL): Q4 EPS of $0.17 misses by $0.01. Revenue of $194M (+9% Y/Y) misses by $13M. Shares -8.5% AH. (PR)
- Lincoln National (NYSE:LNC): Q4 EPS of $0.82 misses by $0.07. Revenue of $2.7B (+11% Y/Y) in-line. Shares +0.1% AH. (PR)
- NetLogic Microsystems (NASDAQ:NETL): Q4 EPS of $0.45 beats by $0.09. Revenue of $100M (+45% Y/Y) in-line. Shares +7.6% AH. (PR)
- News Corporation (NASDAQ:NWSA): FQ2 EPS of $0.29 beats by $0.01. Revenue of $8.8B (+0.9% Y/Y) beats by $0.06B. Shares +0.1% AH. (PR, earnings call transcript)
- UnumProvident (NYSE:UNM): Q4 EPS of $0.66 misses by $0.03. Revenue of $2.6B (+4% Y/Y) beats by $0.05B. Shares +0.7% AH. (PR)
- Visa (NYSE:V): FQ1 EPS of $1.23 beats by $0.02. Revenue of $2.2B (+14% Y/Y) in-line. Shares -1.2% AH. (PR, earnings call transcript)
- Yum! Brands (NYSE:YUM): Q4 EPS of $0.63 beats by $0.03. Revenue of $3.6B (+6% Y/Y) beats by $0.06B. Shares +2.4% AH. (PR)
- In Asia, Japan -0.3% to 10431. Hong Kong +1.8% to 23909. China +0.3% to 2799. India +2% to 18449.
- In Europe, at midday, London -0.4%. Paris -1.1%. Frankfurt -0.1%.
- Futures at 7:00: Dow -0.05%. S&P -0.1%. Nasdaq -0.2%. Crude +0.9% to $91.71. Gold -0.2% to $1329.20.
Thursday's Economic Calendar
Chain Store Sales
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:00 ISM Non-Manufacturing Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
12:30 PM Bernanke: Economic Outlook
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: AMB, BX, CAH, CI, CVS, DO, DOW, EL, HOT, IP, ITT, K, MA, MCO, MF, MRK, NOV, NYT, ONNN, PLD, PTEN, RAI, RDS.A, SE, SNE, UL, VIA.B
- Notable earnings after Thursday's close: CBG, CFN, CPX, CSTR, JDSU, LIFE, LVS, NCR, NGD, PWER, SIMG, SUN, VRTX
The SA Currents team contributed to this post.
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