- NYSE, Deutsche Boerse in merger talks. NYSE Euronext (NYX) confirmed it's in advanced talks with Deutsche Boerse (OTCPK:DBOEY) about a merger that would create the world's largest exchange by revenues. Deutsche Boerse would reportedly hold around 60% of the new company. Confirmation of the merger negotiations came just hours after London Stock Exchange (OTCPK:LDNXF) agreed to buy TMX Group (OTC:TMXGF), the owner of the Toronto Stock Exchange, for $3.2B, and follows the Singapore Exchange's (OTCPK:SPXCF) $8.3B bid for Australia's ASX (GM:ASXFF) in October 2010. It also prompted Hong Kong Exchanges and Clearing (OTCPK:HKXCY), the world's most valuable market operator, to say it would consider international alliances. In yesterday's trading, NYX +14%, OTCPK:DBOEY +9.3%. Other operators buoyed by the news: NDAQ +6.7%, ICE +4.15%, CBOE +4.25%.
- PetroChina buys into shale project. PetroChina (PTR) is buying 50% of a shale gas project from EnCana Corp. (ECA) for C$5.4B ($5.4B), the latest and largest of a string of Chinese investments in foreign natural gas assets. Little political opposition is expected, as the partial stake is seen as less threatening than an all-out acquisition. Shares of PetroChina fell 2.85% in Hong Kong, as analysts called the all-cash deal relatively pricey. Shares of EnCana jumped 10.5% in after-hours trading.
- Twitter's heady valuation. Google (GOOG), Facebook and other firms have reportedly held low-level takeover talks with Twitter that value the company as high as $10B. This is a significant valuation jump for Twitter, which raised $200M in December 2010 in a financing round that valued the company at $3.7B. It's also a remarkable valuation considering the company had $45M in revenue last year, according to sources, but lost money as it spent on hiring and data centers. Twitter reportedly believes it can grow into a $100B company.
- Hackers hit oil firms. Hackers, apparently based in China, have carried out a "coordinated, covert and targeted" campaign of cyber espionage against major Western energy firms, according to a report to be issued later today by cybersecurity firm McAfee. The attacks, which are still occurring, have been going on since at least 2009, but may have started as early as 2007; in that time, the hackers have accessed such sensitive information as project financing and bidding documents and proprietary information about field operations. Law-enforcement agencies said they're aware of the incidents and are investigating. McAfee declined to identify the five multinational firms.
- SRA International scouts buyers. SRA International (SRX) is reportedly running a narrow sale targeted at mostly private-equity buyers. The company has already received several potential takeover offers, sources said, and is opening up its books to a limited number of suitors. SRA Chairman Ernest Volgenau is not on the committee reviewing offers; he controls 70% of the company's voting stock and is said to be reluctant to sell to a strategic buyer. Shares spiked around 12% in midday trading on the sale speculation, before closing +3.5%.
- Rio boosts profit, doubles dividend. Rio Tinto (RIO) reported H2 profit more than tripled to $8.5B as the global economic recovery lifted prices for iron ore and copper. The company plans to spend $13B on expansion and new mines in order to boost output and take advantage of rising commodity prices. The global miner also announced it would more-than-double its annual dividend to 108 cents per share from 45 cents, and return $5B to shareholders by 2012. Investors had been clamoring for higher dividends and share buybacks, but shares are down premarket: RIO -2.5% (7:00 ET).
- Clearwire abandons retail strategy. Clearwire (CLWR) has reportedly decided to abandon its retail strategy, and will focus instead on being a wholesale network provider of fast wireless service. The move is a victory for Sprint (S), which owns a non-controlling majority stake in Clearwire and which has been pushing Clearwire to spend its limited capital on finishing the expansion of its network. Sources said Clearwire's new goal is to turn cash flow positive as quickly as possible, which could take 12-18 months, and complete the network.
- Cisco disappoints on margins, outlook. Cisco (CSCO) beat earnings expectations (see details below), but saw its shares tumble as earnings fell 18% in the quarter and revenue growth flattened out. Gross margins dipped to 62.4% from 64.3%; CEO John Chambers said much of the pressure behind Cisco's gross margins stemmed from new product launches, and Chambers expects the margins to improve over time. Looking ahead, Cisco expects EPS of $0.35-0.38 in the current quarter vs. analysts' expectations of $0.40. Premarket: CSCO -8.7% (7:00 ET).
- SEC probes link between ETFs, insider trading. The SEC is reportedly investigating whether some traders are using ETFs to cover up acts of insider trading. One such example would be when a trader finds out information about a company, buys an ETF that includes the company's stock and then shorts the rest of the stocks in the ETF; the practice, known as ETF stripping, would allow the trader to benefit from movement in the company's stock without having to buy the stock directly. Regulators are concerned a growing number of insider traders are turning to this approach.
- BofA may dodge WikiLeaks torpedo. Bank of America (BAC) may not need to worry quite so much about an impending data dump from WikiLeaks that founder Julian Assange said could "take down a bank or two." Sources close to Assange said he himself doesn't know if the data he has on hand, supposedly obtained from a BofA executive's hard drive in 2006, contains any big news or scandals. Assange has told the sources that the material is somewhat dated and not self-explanatory, and will require a significant amount of work by financial experts to determine whether the material is newsworthy.
Earnings: Thursday Before Open
- Bunge (BG): Q4 EPS of $1.95 beats by $0.36. Revenue of $12.73B (+21.9% Y/Y) beats by $0.62B. (PR)
- EnCana (ECA): Q4 EPS of $0.09 misses by $0.04. (PR)
- Teradata (TDC): Q4 EPS of $0.53 beats by $0.03. Revenue of $548M (+10.5% Y/Y) beats by $16.5M. (PR)
Earnings: Wednesday After Close
- Activision (ATVI): Q4 EPS of $0.53 beats by $0.02. Revenue of $2.6B (+2% Y/Y) beats by $0.19B. Shares -7.3% AH. (PR, earnings call transcript)
- Akamai Technologies (AKAM): Q4 EPS of $0.40 beats by $0.02. Revenue of $285M (+20% Y/Y) in-line. Shares -11.1% AH. (PR, earnings call transcript)
- Allstate (ALL): Q4 EPS of $0.50 may not be comparable with consensus of $0.88. Revenue of $8.1B (+0.4% Y/Y) beats by $1.8B. Shares -4.6% AH. (PR)
- Amkor Technology (AMKR): Q4 EPS of $0.20 misses by $0.06. Revenue of $751M (+12% Y/Y) beats by $15M. Shares -12.2% AH. (PR, earnings call transcript)
- Arris Group (ARRS): Q4 EPS of $0.19 beats by $0.02. Revenue of $266M (-11% Y/Y) beats by $3M. Shares +1.9% AH. (PR)
- Cisco Systems (CSCO): FQ2 EPS of $0.37 beats by $0.02. Revenue of $10.4B (+6% Y/Y) beats by $0.17B. Shares -2.2% AH. (PR, earnings call transcript)
- FLIR Systems (FLIR): Q4 EPS of $0.43 misses by $0.01. Revenue of $434M (+40% Y/Y) beats by $10M. Shares -5.3% AH. (PR, earnings call transcript)
- GSI Commerce (GSIC): Q4 EPS of $0.23 misses by $0.27. Revenue of $537M (+25% Y/Y) beats by $4M. Shares +4.8% AH. (PR)
- Kimco Realty (KIM): Q4 EPS of $0.29 beats by $0.01. Revenue of $215M (+6% Y/Y) beats by $3M. (PR)
- MetLife (MET): Q4 EPS of $1.14 beats by $0.04. Revenue of $14.2B (+7% Y/Y) beats by $0.7B. Shares -1.9% AH. (PR)
- Nuance Communications (NUAN): FQ1 EPS of $0.28 misses by $0.03. Revenue of $317M (+12% Y/Y) misses by $3M. Shares -9.8% AH. (PR, earnings call transcript)
- Prudential Financial (PRU): Q4 EPS of $1.78 beats by $0.30. Revenue of $8.1B (+16% Y/Y) beats by $0.25B. Shares +0.8% AH. (PR)
- Regal Entertainment Group (RGC): Q4 EPS of $0.09 beats by $0.03. Revenue of $661M (-14% Y/Y) misses by $17M. Shares -0.6% AH. (PR)
- SuccessFactors (SFSF): Q4 EPS of $0.00 in-line. Revenue of $61.7M (+46% Y/Y) beats by $5.7M. Shares +6.3% AH. (PR)
- Terex (TEX): Q4 EPS -$0.30 may not be comparable with consensus of -$0.11. Revenue of $1.3B (+31% Y/Y) beats by $0.14B. Shares -5.6% AH. (PR)
- TriQuint Semiconductor (TQNT): Q4 EPS of $0.25 misses by $0.03. Revenue of $253M (+31% Y/Y) beats by $3M. Shares -12.2% AH. (PR, earnings call transcript)
- Whole Foods Market (WFMI): FQ1 EPS of $0.51 beats by $0.05. Revenue of $3B (+14% Y/Y) in-line. Shares +8.5% AH. (PR, earnings call transcript)
- In Asia, Japan -0.1% to 10606. Hong Kong -2.0% to 22709. China +1.6% to 2819. India -0.7% to 17463.
- In Europe, at midday, London -0.9%. Paris -0.9%. Frankfurt -0.4%.
- Futures at 7:00: Dow -0.5%. S&P -0.6%. Nasdaq -0.9%. Crude -0.3% to $86.44. Gold -0.6% to $1357.90.
Thursday's Economic Calendar
- 8:30 Initial Jobless Claims
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
12:00 PM Panel: Public Debt and Fiscal Policy (Lockhart)
1:00 PM Results of $16B, 30-Year Bond Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: BG, BWA, ECA, GT, INCY, LPX, NBL, PEP, PM, S, SNI, SPR, TAP, TDC, TRI
- Notable earnings after Thursday's close: ATHR, CAKE, CEPH, EXPE, IM, KFT, RAX, RSG, TCO, WYNN
The SA Currents team contributed to this post.
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