Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:40 AM EST
S&P 500: +7.60; 1,406.60
NASDAQ 100: +9.25; 1,773.25
Dow: +57.00; 12,268.00
NIKKEI 225: +1.59%; 17,009.55 (+265.40)
HANG SENG: +1.65%; 19,266.74 (+313.24)
S&P/ASX 200: +0.40%; 5,859.70 (+23.40)
BSE SENSEX 30: +1.73%; 12,644.99 (+214.59)
FTSE 100: +0.44%; 6,157.80 (+27.20)
CAC 40: +0.75%; 5,422.35 (+40.19)
XETRA-DAX: +0.93%; 6,641.23 (+61.36)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.68%; $56.72 (-$0.39)
Gold: +0.26%; $655.60 (+$1.70)
Natural Gas: -0.82%; $6.87 (-$0.06)
Silver: +0.26%; $13.25 (+$0.035)
Breaking News — see today's Wall Street Breakfast for earlier news
AtheroGenics Heart Drug Misses Primary Endpoint, Shares Plummet
AtheroGenics Inc. said this morning its AGI-1067 heart drug failed to achieve its primary endpoint in a 6,000+ patient trial. The primary target of the study was "a statistically significant relative risk reduction in... cardiovascular death, resuscitated cardiac arrest, non-fatal myocardial infarction, non-fatal stroke, use of coronary revascularisation (bypass surgery) and for angina pectoris (acute chest pain)." Analysts had been skeptical that the drug would achieve its primary goal, but agreed that if it did, it was a potential blockbuster. The company said that the drug did reduce a combination of cardiovascular death, heart attack and stroke. The drug's fate from this point on will likely hinge on the statistical strength of its secondary benefits. Russell Medford, CEO: "We're obviously disappointed we didn't meet the primary endpoint, but we are optimistic about the results of the trial and we do look forward to continuing development of what we think is an important drug with the goal of improving patient care." AtheroGenics shares are down 63% to $2.90 in pre-market trading as of 8:42 EDT.
Sources: Press Release, Wall Street Journal, MarketWatch
Commentary: AtheroGenics: No Guts, No Glory • The Short Case On AtheroGenics • AtheroGenics: The Clock Is Ticking
Stocks/ETFs to watch: AtheroGenics Inc. (AGIX). Competitors: GlaxoSmithKline plc (GSK), Novartis AG (NVS), Pfizer Inc. (PFE), Johnson & Johnson (JNJ). ETFs: Pharmaceutical HOLDRs (PPH), iShares Dow Jones US Pharmaceuticals (IHE)
PetroChina's Annual Earnings Rise, But Fall Short of Estimates
PetroChina's 2006 annual profit increased 6.6% to 142.2 billion yuan ($18.4b), on a 25% rise in revenue to 688.98 billion yuan. Analysts' median profit estimate was 149.8 billion yuan, according to a Bloomberg survey. It achieved record production of oil and natural gas, and benefited from a global rise in oil prices, which set a record last year at an average of $66.25/barrel. PetroChina's average realized crude price was $59.81, a 23.7% year-over-year increase, but was offset by higher exploration and production costs and a 29.2 billion yuan loss at its refining and marketing business. In a statement, PetroChina said it "will continue to strengthen its oil and gas exploration and development and further consolidate and upgrade its resource bases so as to maintain growth in production." PetroChina will reportedly apply for an A-share listing in China, but the date is not fixed. Its final dividend will be 0.155 yuan per share, compared to 0.180/share in 2005.
Sources: Bloomberg, Forbes XFN-Asia newswire, MarketWatch
Commentary: Time to Step on the Gas: PetroChina is a Steal • Berkshire on Selling Its PetroChina Stake: "And Then What?" • Beijing Ready to Take on More Risk with Foreign Reserves
Stocks/ETFs to watch: PetroChina (PTR). Competitors: Chevron (CVX), CNOOC (CEO), Sinopec (SHI). ETFs: iShares FTSE/Xinhua China 25 Index (FXI), PowerShares Gldn Dragon Halter USX China (PGJ), BLDRS Emerging Markets 50 ADR Index (ADRE).
Related: PetroChina earnings announcement [.pdf]
Chrysler Union Opposition Presents Problem for Sale to Private Equity - WSJ
Both American and German union leaders tied to DaimlerChrysler are voicing opposition to the sales of the parent company's North American division, Chrysler Group, to private equity, fearing private equity will be more likely to cut jobs in an attempt to return the company to profitability. The union opposition puts a potential hurdle in front of potential bids from private equity groups Cerberus Capital Management LLC and the tandem Blackstone Group and Centerbridge Partners LP. Chrysler is expected to begin receiving a variety of bids by the end of March. Asked why he was opposing the sale of Chrysler to private equity, Gerd Rheude, head of a German DaimlerChrysler truck plant's work council and seat-holder on the company's supervisory board, said "it's important for us that Chrysler won't be cut in pieces, but that we find a way of securing the jobs of our American colleagues."
Sources: Wall Street Journal
Commentary: Activity Surrounding a Chrysler Offer 'Accelerating' - WSJ • The Dating Game: Magna Likes Chrysler • Large Private Equity Meets With Chrysler
Stocks/ETFs to watch: DaimlerChrysler (DCX). Competitors: Ford (F), General Motors (GM), Toyota (TM), Honda (HMC), Nissan (OTCPK:NSANY)
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Rise, Led by Canon, Toyota on Yen Slide; BHP Billiton Gains Asian stocks gained, rebounding after a third straight weekly loss. Canon Inc. (CAJ) and Toyota Motor Corp. (TM) led Japanese exporters higher after the yen weakened against the dollar.
• Bank of China Says 2006 Profit Jumped More Than 50 Percent on Tax Credit Bank of China Ltd., the nation's second-largest, said 2006 profit may have risen by more than 50 percent, buoyed by a tax credit and an expanding economy. The shares rose in Shanghai and Hong Kong.
• Hong Kong's Towngas Says 2006 Net Income Rises 11 Percent to $750 Million Hong Kong & China Gas Co., the city's only piped-gas supplier, said profit increased 11 percent last year.
• Steel Shares Give Sell Sign as China Exports Rise, Say Credit Suisse, UBS Steel is beginning to collect rust in the stock market.
European Headlines (via Bloomberg.com)
• European Stocks Advance on Takeover Outlook; ABN Amro, Altadis Pace Gains European stocks rebounded from last week's losses on speculation ABN Amro Holding NV (ABN) will be acquired and Imperial Tobacco Group Plc (ITY) will raise its bid for Altadis SA.
• TUI Agrees to Buy First Choice to Create Company With 27 Million Customers TUI AG, Europe's biggest tour operator, will buy First Choice Holidays Plc to fight competition from Internet bookings and discount airlines, mirroring a combination of two rivals last month.
• Wolseley's European Expansion Offsets U.S. Construction Slump; Shares Gain Wolseley Plc (WOS), the world's biggest distributor of plumbing and heating equipment, said a surge in European sales helped limit a decline in earnings prompted by a U.S. housing slump. The stock rose as much as 6.6 percent.
• Deutsche Postbank Profit Doubles to $361 Million on Stake Sales, Lower Tax Deutsche Postbank AG, Germany's biggest consumer bank by clients, said fourth-quarter profit more than doubled, helped by higher interest income, gains from stake sales and lower taxes.