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  • Strauss-Kahn arrest clouds Greek bailout talks. Dominique Strauss-Kahn is due to be arraigned in Manhattan this morning on attempted rape charges, which his lawyer said he will deny. Across the Atlantic in Brussels meanwhile, where the IMF managing director was supposed to have been, Greece will plead for a boost to its €110B ($155B) bailout in talks with European finance ministers and the IMF. In exchange for giving Greece extra money or more time to pay back its official loans, Germany and other donor countries are demanding deeper budget cuts and are considering making bondholders share the costs. During the talks, the finance ministers are also set to approve Portugal's €78B rescue and to nominate Bank of Italy Governor Mario Draghi as the ECB's next president.
  • Breaking: Nasdaq, ICE withdraw their proposal to buy NYSE Euronext. Nasdaq (NASDAQ:NDAQ) and ICE (NYSE:ICE) said they're withdrawing their bid for NYSE Euronext (NYSE:NYX) because "it became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies." (PR)
  • U.S. to hit debt limit today. The Treasury is expected to announce plans to stop issuing and reinvesting government securities in certain state pension plans as part of efforts to ensure the U.S. won't default despite hitting its $14.3T debt ceiling today. The actions will give the government until August 2 to increase the limit, although many Congressmen, especially Republicans, want a deal on reducing the deficit before they'll agree to raise the ceiling. However, confusion exists about how close Congressional leaders and the White House are to a deal. Joe Biden said last week that the contours of an agreement were taking shape, but GOP House Speaker John Boehner said yesterday that he was "not seeing any real action."
  • BP attempts to save Rosneft Arctic partnership. BP (NYSE:BP) could today announce a deal to buy out its Russian billionaire partners in its joint venture TNK-BP in a deal worth $30B or more, sources said. Any agreement would salvage BP's $16B share swap and Arctic exploration deal with Rosneft, which AAR, the company formed by BP's TNK-BP partners, had blocked through an injunction. The buyout would give Rosneft the 50% share in TNK-BP owned by AAR in return for cash and substantial stakes in BP and Rosneft. The latter has opposed a compromise in which TNK-BP would replace BP in exploring the Arctic, saying the JV has no experience in drilling for oil offshore. BP has until today to finalize its co-operation with Rosneft unless it can gain a second extension to the deadline.
  • Joy to buy LeTourneau for $1.1B. Mining equipment maker Joy Global (JOYG) has agreed to acquire LeTourneau Technologies from Rowan Companies (NYSE:RDC) for $1.1B in cash. Joy said it expects to close the purchase within 60 days, adding that LeTourneau will add to its profit this year, excluding transaction and other costs. LeTourneau supplies machinery for oil and gas drilling, as well as for mining, and generated $815M of revenue in 2010.
  • Yahoo and Alibaba in talks to solve differences. Yahoo (NASDAQ:YHOO) and China's Alibaba (OTC:ALBCF), in which the U.S. company holds 43%, yesterday attempted to assuage market concerns about their strained relationship. The companies issued a short statement saying that along with Softbank, Alibaba's other major shareholder, the sides are in talks to "resolve the outstanding issues related to Alipay," Alibaba's online payments unit. Last week, Yahoo disclosed that Alibaba had transferred control of Alipay to Alibaba CEO Jack Ma for an as yet undetermined amount and without telling the board. The move sent Yahoo's shares tumbling on fears it would diminish the value of its stake in Alibaba.
  • DuPont finally succeeds in Danisco acquisition. DuPont (NYSE:DD) has completed its tender offer for all the outstanding shares in Danish food-ingredients and enzymes maker Danisco (OTC:DNSCY) in a deal valued at 34.3B kroner ($6.49B). DuPont has received acceptances representing 92.2% of Danisco's shares. The acquisition will bring in revenues that will offset an expected decline in profits at DuPont's pharmaceutical unit as its licenses expire, and create synergies with its agribusiness. DuPont's success took time in coming, with the company making an initial offer for Danisco in January.
  • LSE remains committed to TMG merger despite counterbid. The London Stock Exchange (OTCPK:LDNXF) today said it remains committed to its $3B merger with TMX Group (OTC:TMXGF) after a group of Canadian banks and pension funds made a preliminary $3.7B counter offer. Maple includes banks that have opposed the LSE deal on the grounds that it would put control of TMX into foreign hands. Experts questioned the rationale of the move, saying the sole purpose of Maple's bid appeared to be to prevent the LSE deal. "They are going to have to make a case for doing this other than just blocking the LSE bid," said a senior trading strategist. LSE's shares rose 2.7% in London on speculation that it could become a bid target if the TMX merger unravels.
  • Amylin sues Eli Lilly. Amylin (AMLN) has filed a suit against Eli Lilly (NYSE:LLY), alleging Lilly "is engaging in anticompetitive activity and breaching its strategic alliance agreements with Amylin to maximize commercialization of exenatide," which is currently marketed as Byetta.
  • AIG share sale attracts interest. AIG's (NYSE:AIG) $9B stock sale has attracted indications of interest from investors for about half the offering, sources said. Most of the indications were at an average price of about $30 a share, above the Treasury's breakeven price of $28.70 and close to AIG's Friday closing price of $30.42. AIG and the Treasury, which owns 92.1% of the insurer, plan to sell 300 million shares in the offering, with an option to increase the number of shares sold by 15%.
  • Chrysler to rebalance refinancing. Chrysler is expected to restructure its proposed $6B refinancing package after investors showed hesitation over the $3.5B loan portion of the transaction but gave a strong response to the $2.5B bond element, sources said. The automaker is therefore likely to rebalance the package to reflect the reaction of investors, who have been wary of the loan aspect because of the large size and the company's prospects. The refinancing deal, which Chrysler hopes to complete this week, would help the automaker repay its debt of more than $7B to the U.S. and Canadian governments. Meanwhile, a $1.5B revolving line of credit that Chrysler is raising is understood to be fully subscribed.
  • Sony restarts PlayStation network. Sony (NYSE:SNE) has resumed partial operation of its PlayStation Network and Qriocity entertainment services in the U.S. and Europe after suspending them almost a month ago due to an intrusion that led to a breach of data on over 100M users. Sony has now beefed up security for PlayStation Network, which generates roughly $500M a year in revenue, and Qriocity, and hired a chief information security officer in a newly created position. Meanwhile, a source said the hackers carried out the attack using Amazon's (NASDAQ:AMZN) Web Services cloud-computing unit.
  • Army opens Mississippi spillway, diverting floods away from refineries. Residents, businesses and farms in Louisiana's Atchafalaya River basin are bracing themselves for massive flooding after the U.S. Army opened a spillway on the Mississippi River at the weekend. The move is aimed at preventing the deluge from inundating New Orleans and Louisiana capital Baton Rouge, as well as eight refineries and at least one nuclear power plant. The refineries make up about 12% of the U.S.'s capacity for producing gasoline and other fuels. However, opening the spillway could lead to the flooding of around 18,000 acres of cropland.

Earnings: Monday Before Open

  • Lowe's (NYSE:LOW): Q1 EPS of $0.34 misses by $0.02. Revenue of $12.18B (-1.6% Y/Y) misses by $0.3B. (PR)

Today's Markets

  • In Asia, Japan -0.9% to 9558.3. Hong Kong -1.4% to 22961. China -0.7% to 2850. India -1.0% to 18345.
  • In Europe, at midday,London -0.9%. Paris -1.5%. Frankfurt -1.3%.
  • Futures at 7:00: Dow -0.4%. S&P -0.4%. Nasdaq -0.2%. Crude -1.9% to $97.79. Gold -0.15% to $1491.30.

Monday's Economic Calendar

  • Notable earnings before Monday's open: JCP, LOW
  • Notable earnings after Monday's close: URBN

The SA Currents team contributed to this post.


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Source: Wall Street Breakfast: Must-Know News