- Portugal seeks bailout. As with its fellow eurozone debtaholics Greece and Ireland, first there was denial mixed with anger and the pain of withdrawal symptoms, and now there's acceptance. After months of insisting to the contrary, outgoing Portugese Prime Minister Jose Socrates has bowed to the inevitable and turned to the EU for a bailout to relieve the country's crushing debt. Banks from Spain to Germany would have been heavily exposed to any Portuguese default, which could have threatened the stability of the euro. Socrates didn't say how much the government would ask for but analysts predicted it would be up to €80B ($114B). That would be bearable for Europe's finances unless other nations - notably Spain - ask for help too. Euro -0.4% vs. the dollar (7:00 ET).
- ECB poised to raise rates. Despite Portugal's woes, the ECB is expected to raise interest rates today to 1.25% from a record low of 1%. Markets have priced in two further rises to 1.75% by the end of the year as the central bank looks to fight rising inflation while taking care not to cause further pain to the eurozone's battered PIIG economies. The ECB decision will come after the Bank of Japan left its key rate at near 0% and downgraded its economic outlook following last month's earthquake and tsunami. The Bank of Japan also said it would set up a program worth ¥1T ($12B) to offer cheap loans to financial institutions in the regions affected by the disasters.
- GOP and Democrats move closer but so does shutdown. A meeting last night between Republican House Speaker John Boehner, Senate Democratic Leader Harry Reid and President Obama brought the sides closer to agreeing on a budget deal for the rest of the fiscal year but they were unable to cement an agreement that would avert a government shutdown after tomorrow. The administration warned of the damage to the economy of a closure, and pushed Republican touchpoints by noting that it would delay pay to troops fighting in wars. The wrangling doesn't bode well for future talks on the sides' multi-year programs, where they are trillions of dollars apart. This dwarfs the gap of billions of dollars that they are arguing over now.
- NY Fed's auction of AIG bonds successful. The New York Fed has sold 42 former AIG (AIG) sub-prime mortgage bonds with a face value of $1.3B in an auction deemed successful by industry participants. The Fed had offered 52 securities with a face value of $1.5B. Bids easily topped the minimums set by the Fed, while half of the securities were purchased for retail investors and other accounts. This is a more credible sign of demand than if only dealers had participated. The securities were held by Maiden Lane II, a company created in the 2008 bailout of AIG; the insurer's $15.7B offer to buy the entire portfolio was rejected by the Fed last week.
- Ingersoll-Rand to buy back $2B in shares. Ingersoll-Rand (IR) intends to buy back $2B in shares and increase its quarterly dividend by 71% to $0.12 a share. The company is also on track to reduce debt. Premarket: IR +0.4% (7:15 ET).
- Investors enjoy Bed Bath as company increases outlook. Shares in Bed Bath & Beyond (BBBY) sprang 9% in post-market trading after the home goods chain predicted that EPS for the current fiscal year would be 10%-15% higher than the $3.07 it reported for the year ending in February 2011. That would mean a range of $3.38-$3.53, above Street estimates of $3.33. With consumers cutting expenditures because of the recession, one analyst said, they've resumed spending now that the environment has improved. Bed Bath's Q4 net EPS rose to $1.12 from $0.86 a year earlier as revenues increased to $2.5B from $2.24B, with the retailer exceeding analyst forecasts in both parameters.
- Google set to launch cloud music app to rival Amazon. Google (GOOG) appears poised to introduce a service that will allow consumers to store music on the Internet after an almost-finished version of the application was leaked. The service will rival Amazon's (AMZN) Cloud Drive, which was unveiled last week. Google is also working on a major overhaul of YouTube as it prepares for the growth of televisions that let people watch online video, sources say. The video service will highlight 'channels' on its home page, some of which will feature professionally produced original programming. YouTube aims to start rolling out the changes before the end of the year.
- Dell plans $1B global investment. Dell (DELL) intends to invest $1B worldwide in the current fiscal year to build data centers and develop sets of products in areas such as virtualization. The proposed spending comes as Dell aims to boost growth by expanding its businesses outside of computer hardware as its PC business faces growing competition. In China, Dell plans to soon launch 5-inch and 10-inch tablet devices as well as new smartphones. The computer maker is also looking for acquisitions in the country to support its offerings in areas such as storage and cloud computing, but it has not identified any targets yet. Premarket: DELL +0.7% (7:00 ET).
- GE plans largest solar panel plant in U.S. GE (GE) intends to build the largest photovoltaic panel factory in the U.S. in a move that could shake up the country's solar industry and challenge market leader First Solar (FSLR). However, GE will face competition from low-cost, government-subsidized Chinese manufacturers. The conglomerate hopes the plant will start manufacturing in 2013 and will annually produce solar panels that generate 400 megawatts of electricity. GE has already signed customer agreements to supply panels that produce 100 megawatts.
- Prosecution rests in Galleon trial. After five weeks and 18 witnesses, the government has rested its case against Raj Rajaratnam, the hedge fund billionaire accused of insider trading. Jurors have heard 45 secretly recorded telephone conversations between Rajaratnam and his supposed accomplices and colleagues, with many including what appears to be evidence of the insider trading. Rajaratnam is charged with earning $54M on illegal stock trades and, if convicted, faces up to 25 years in prison. His lawyers expect their case to last at least a week.
- Televisa to buy 50% stake in Iusacell for $1.6B. Mexico's Televisa (TV) will acquire a 50% stake in mobile operator Iusacell for $1.6B, a source says. The purchase is the latest move in a bitter battle between Mexico's two largest broadcasters - Televisa and TV Azteca - and the world's richest man, Carlos Slim, who owns America Movil (AMX) and Telefonos de Mexico. The battle is over how to divvy up the country's $35B-a-year telecom and TV-broadcast market as technologies converge.
Earnings: Thursday Before Open
- Pier 1 Imports (PIR): FQ4 EPS of $0.48 beats by $0.01. Revenue of $426.6M (+7.7% Y/Y) beats by $1.1M. (PR)
Earnings: Wednesday After Close
- Bed Bath & Beyond (BBBY): Q4 EPS of $1.12 beats by $0.15. Revenue of $2.5B (+11.6% Y/Y) beats by $0.1B. Shares +9.1% AH. (PR, earnings call transcript)
- In Asia, Japan +0.1% to 9591. Hong Kong -0.0% to 24282. China +0.2% to 3008. India -0.1% to 19591.
- In Europe, at midday, London -0.3%. Paris +0.0%. Frankfurt -0.2%.
- Futures at 7:00: Dow flat. S&P flat. Nasdaq -0.1%. Crude flat at $108.81. Gold -0.04% to $1457.90.
Thursday's Economic Calendar
- Chain Store Sales
3:45 Fed's Pianalto: 'Current Issues in US Monetary Policy'
7:00 BoE Announcement
7:45 ECB Announcement
8:20 Fed's Lacker: Fiscal Trends and Challenges
8:30 Initial Jobless Claims
10:30 EIA Natural Gas Inventory
3:00 PM Consumer Credit
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: PIR, STZ
The SA Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.