Merkel, Sarkozy eurozone pledge again short on details. Angela Merkel and Nicolas Sarkozy yesterday made yet another pledge to take action to solve the eurozone's debt crisis, saying they would formulate a plan by early next month to recapitalize European banks and accelerate economic coordination in the currency bloc. However, the German and French leaders provided no details, with sources saying they still have to resolve differences over who will pay for the recapitalization and how deeply to restructure Greece's debts.
Euro attention turns to Slovakia. While France and Germany slug out the details over the eurozone's rescue fund, Slovakia has become the latest of the smaller countries to threaten the future of the region. Leaders of the governing coalition are due to meet later today in an attempt to persuade the SaS party, a junior partner, to support the expansion of the fund. However, it seems that SaS chief Richard Sulik will take some convincing: "The greatest threat to the euro is the bailout fund itself," Sulik told Spiegel Online.
Dexia to be rescued. The Merkel-Sarkozy talks were given extra urgency by the woes of Dexia (OTC:DXBGF), whose rescue was agreed to by France, Luxembourg and Belgium last night. The latter's government will buy the bank's Belgian business for €4B ($5.4B) and all three countries have provided a combined guarantee of €90B to secure borrowing over the next 10 years. Belgium will take responsibility for 60.5% of the total, a pledge that could hit its Aa1 rating: on Friday, Moody's warned it may downgrade Belgium because of the burden it was set to take on.
Superior Energy to buy Complete Production for $2.7B. Oil-field services company Superior Energy (NYSE:SPN) has agreed to buy Complete Production (NYSE:CPX) for $2.7B in cash and stock, with the $32.90-a-share offer representing a 61% premium to Complete's closing price on Friday. The transaction will combine Superior's presence in oil-producing regions around the world with Complete's expertise in hydraulic fracturing, and provide stronger competition to the Big Four service companies: Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI) and Weatherford (NYSE:WFT).
Alibaba looking to buy out Yahoo stake. Alibaba is interested in buying Yahoo's (NASDAQ:YHOO) 40% stake in the Chinese company, and has held talks with Singaporean investment company Temasek about providing the financing, Bloomberg reports. Yahoo’s holding in Alibaba, which is also interested in participating in a consortium that will buy the U.S. portal, is worth an estimated $13B. Yesterday, Reuters revived speculation that Yahoo founder Jerry Yang is looking to take the company private with the help of private-equity firms.
Yahoo withdraws from Hulu auction. Sidetracked by its own potential sale, Yahoo has withdrawn from the auction to buy online video Web site Hulu, The Wall Street Journal reports. The list of those still in the running following the latest bidding deadline last week comprises Dish (NASDAQ:DISH), Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG), with the latter prepared to offer over $2B. However, Hulu's owners - News Corp. (NASDAQ:NWSA), Walt Disney (NYSE:DIS), Comcast (NASDAQ:CMCSA) and Providence Equity Partners - still may decide not to sell the company and are considering other options.
Dow, Aramco sign accord for $20B plant. Dow Chemical (NYSE:DOW) and Saudi Aramco signed a deal over the weekend that advances their plans to build one of the world's biggest chemical plants in Saudi Arabia. Costing $20B, of which the firms will provide $12B, the facility is expected to start production in 2015 and earn annual revenue of $10B within a few years of opening. The companies hope to raise the rest of the money for constructing the factory via an IPO of the joint venture company that will operate the plant.
Hedge fund Q3 performance worst since crisis. The value of assets at hedge funds fell an average of 5.5% in Q3 2011, Hedge Fund Research says, with violent market swings helping cause the worst quarter since the depths of the 2008 financial crisis. And in the first nine months of 2011, funds focused on equities only provided the same returns as the S&P 500. In September, just two strategies made money out of 18 tracked: funds specializing in shorting stocks rose 6.9%, while those that took a quantitative approach to betting on interest rates and currencies inched up 0.2%.
Chrysler closing in on new labor deal. Chrysler (FIATY.PK) and the UAW are due to discuss the final details of a new labor contract today, with a vote of union members possibly occuring by the end of the week. The UAW has summoned local leaders from Chrysler factories to meet in Detroit, where union President Bob King will update them on a framework for an agreement, The Wall Street Journal reports. Meanwhile, Ford (NYSE:F) workers started voting on their tentative agreement at the weekend.
Pre-orders for new iPhone set to hit record. Initial sales of Apple's (NASDAQ:AAPL) iPhone 4S are likely to beat those for the previous version of the device, with AT&T (NYSE:T) and Sprint (NYSE:S) reporting strong preorders after the product became available on Friday. AT&T said it sold over 200,000 iPhone 4S (AAPL) devices within 12 hours. The iPhone 4S will be available in shops this Friday.
Two more banks closed. Regulators closed two banks on Friday, bringing to 76 the number of failures in 2011 compared with 129 by this time last year. The banks were in Minnesota and Missouri, with the cost to the FDIC's insurance fund expected to be a combined $189.7M.
In Asia, Japan closed. Hong Kong flat at 17711. China -0.6% to 2345. India +2.0% to 16557.
In Europe, at midday, London +0.9%. Paris +0.9%. Frankfurt +0.3%.
Futures at 7:00: Dow +1.1%. S&P flat. Nasdaq +1.2%. Crude +2% to $84.65. Gold +1.9% to $1666.60.
Monday's economic calendar:
No events scheduled.
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