- News Corp. cleared for BSkyB buy. British regulators approved News Corp.'s (NASDAQ:NWS) planned $14B takeover of BSkyB (BSYBY.PK) and the firm's proposals to alleviate competition concerns; the two firms will now be able to move forward on negotiating an exact price for the transaction. However, the deal could still be derailed, as media rivals can still challenge the deal in court and British regulators will likely face heavy criticism over their decision and their relationship with Rupert Murdoch's media empire. Among the conditions of the approval, News Corp. will have to spin off the loss-making but influential Sky News channel into a separate company, while giving it a 10-year carriage deal on the Sky TV platform and a seven-year branding agreement to use the Sky name. In London, BSkyB +2.6% (7:00 ET).
- Bidders line up for CitiFinancial. Banco Santander (STD), BlackRock (NYSE:BLK), KKR (NYSE:KKR) and at least 10 other private-equity firms are reportedly forming groups to bid for Citigroup's (NYSE:C) consumer finance unit. The bid deadline is next week, and Citi hopes to get bids for at least $13B. The sale of CitiFinancial is part of Citi's plans to shed non-core assets. Premarket: C +0.65% (7:00 ET).
- Alcatel jumps on takeover rumors. Shares of Alcatel-Lucent (ALU) jumped this morning on vague rumors that a Chinese firm may make a bid for the company. Traders had no additional details on the rumor, and an Alcatel spokeswoman declined to comment. Other factors that may be contributing to the jump: reports that management had a very positive roadshow in the U.S., and a bullish note from Barclays Capital. In France, shares +9.1% on heavy volume. In the U.S. premarket, ALU +4% (7:00 ET).
- SEC probes bank lending. The SEC has asked for information from an unknown number of community and regional banks with large concentrations of commercial real estate loans. Regulators are reportedly trying to determine whether the banks restructured troubled loans in order to make them appear healthier than they really are, using a practice known as 'extend and pretend' or 'amend and pretend.' The SEC is also investigating 'troubled debt restructurings;' the practice is permitted but some banks may have used improper accounting.
- AIG closes MetLife sale. AIG (NYSE:AIG) sold $9.6B of MetLife (NYSE:MET) shares yesterday, producing gross proceeds of about $6.3B. AIG and the Treasury had expected it to take two days to market the MetLife shares but sources said the insurer managed to close the book in just one day. The proceeds will be used to accelerate AIG's repayment of its government bailout. In yesterday's trading, AIG +1.6%, MET -5.7%.
- Bernanke: Budget cuts could slash 200K jobs. Testifying before Congress yesterday, Bernanke said budget cuts proposed by Republican lawmakers could lead to the loss of as many as 200,000 jobs from the economy over two years. The figure is far less than the 700,000 loss Democrats have been warning about, but also a far cry from the job gains Republicans have forecast. Acknowledging concerns about the need for budget cuts, Bernanke said: "I would like to see job creation. What I have been trying to focus on is, we have got to keep our eye on deficit reduction, but we need to think about it in a long-term framework."
- Beige Book: Continued expansion, climbing costs. In the latest Beige Book, all 12 Federal Reserve Districts reported overall economic activity continued to expand at a modest to moderate pace in January and early February, and 11 of 12 saw 'solid growth in manufacturing production.' Labor market conditions continued to 'strengthen modestly' in all districts. There was a possible warning note on inflation, however, as "manufacturers in many districts conveyed that they were passing through higher input costs to customers or planned to do so in the near future... Retailers in some districts mentioned that they had implemented price increases or were anticipating such action in the next few months."
- Jobs unveils iPad 2. As was widely expected, Apple (NASDAQ:AAPL) unveiled its next-generation iPad yesterday, showing off a thinner, lighter tablet with front and back cameras that will debut March 11. What came as a surprise was Steve Jobs' appearance at the event, as Jobs has been on medical leave since January. Shares of Apple ticked up 0.8% yesterday. The bigger stock impact was for firms associated with iPad production or accessories: Zagg (NASDAQ:ZAGG), which makes protective covers for the first-generation iPad, saw shares plummet 24% yesterday because the new iPad includes its own magnetic cover to protect the screen. Shares of Silicon Image (NASDAQ:SIMG), which makes digital processing technology compatible with the iPad, saw shares jump 21.6% yesterday.
- Global food prices climb. Global food prices rose 2.2% in February from the previous month, according to a U.N. report released today, reaching a record high even as volatility in oil markets threatens to push the index higher. It was the eighth increase in the index since June 2010.
- Oil elevated but ticking down on hopes for Libya progress. Crude futures are down this morning, a rare break in the commodity's recent run-up, amid hopes that a mediated resolution might bring an end to turmoil in Libya. A Venezuelan official had said yesterday that Venezuelan President Hugo Chavez spoke to Libya's Gaddafi about creating a bloc of friendly countries to help mediate a resolution to Libya's crisis. No word on Gaddafi's response. Meanwhile, the IEA said ongoing fighting between Gaddafi and his opponents has cut up to 1M barrels/day of the country's crude production, higher than a previous estimate of 750,000 barrels per day. Crude futures -0.4% to $101.83.
Earnings: Thursday Before Open
- Big Lots (NYSE:BIG): Q4 EPS of $1.46 beats by $0.08. Revenue of $1.52B (+3.8% Y/Y) in-line. (PR)
- Canadian Natural Resource (NYSE:CNQ): Q4 EPS of $0.57 misses by $0.12. Revenue of $3.36B (+10.6% Y/Y) beats by $0.51B. (PR)
- Western Refining (NYSE:WNR): Q4 EPS of $0.04 misses by $0.02. Revenue of $1.87B (-4.8% Y/Y) misses by $0.04B. (PR)
Earnings: Wednesday After Close
- Copart (NASDAQ:CPRT): FQ2 EPS of $0.45 in-line. Revenue of $206M (+16% Y/Y) beats by $10M. Shares +0.3% AH. (PR)
- Darling International (NYSE:DAR): Q4 EPS of $0.22 beats by $0.01. Revenue of $227M (+52% Y/Y) in-line. Shares -0.1% AH. (PR)
- Foot Locker (NYSE:FL): Q4 EPS of $0.39 beats by $0.03. Revenue of $1.4B (+5% Y/Y) in-line. Shares +0.4% AH. (PR)
- In Asia, Japan +0.9% to 10586. Hong Kong +0.3% to 23122. China -0.3% to 2904. India +0.2% to 18490.
- In Europe, at midday, London +1.3%. Paris +1.4%. Frankfurt +1.5%.
- Futures at 7:00: Dow +0.8%. S&P +1%. Nasdaq +0.9%. Crude -0.4% to $101.83. Gold -0.7% to $1427.70.
Thursday's Economic Calendar
Chain Store Sales
6:00 Monster Employment Index
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:00 ISM Non-Manufacturing Index
10:30 EIA Natural Gas Inventory
11:00 Fed's Kocherlakota: 'Labor Markets and Monetary Policy'
12:15 PM Fed's Lockhart: 'The Economy and Labor'
2:30 PM Hearing: 'Navigating A Turbulent Global Economy' (Geithner)
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: BIG, CNQ, DLM, HNZ, KR, WNR
- Notable earnings after Thursday's close: KOG, MRVL, NOVL, SLW
The SA Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.