Spanish yields hit 7% in auction. The eurozone debt contagion has taken an increasingly firm hold in Spain, where the maximum yield in a 10-year bond auction hit a euro-era high of 7.088%. French borrowing costs also rose in a sale of short-term debt. Eurozone debt yields in the secondary market have continued to rise, with the turmoil causing widening fissures between Germany and France over the ECB's role in solving the crisis.
Fitch warns on U.S. exposure to eurozone. Fitch yesterday said that the credit worthiness of U.S. banks faces a "serious risk" of worsening if the crisis spreads beyond the five most-troubled nations of Greece, Ireland, Italy, Portugal and Spain. While Fitch said "U.S. banks have manageable direct exposures to the stressed European markets," the agency's note sent U.S. shares tumbling in the last hour of trading.
Applied gives earnings warning as profit slumps. Applied Materials' (NASDAQ:AMAT) FQ4 EPS fell 41% to an in-line $0.21 while revenue dropped 24% to $2.18B, slightly above forecasts, with earnings hit by weak demand at the company's solar and electronic display businesses. Applied predicted lower-than-expected FQ1 results and said the difficult economic environment would continue to hurt the company throughout FH1. However, CEO Michael Splinter did say that the overall business would strengthen in FH2. Shares -2.5% post-market.
Delphi, Angie's List set to start trading. Delphi Automotive (NYSE:DLPH) is poised to makes its NYSE debut today after pricing its IPO at $22, the lower end of its range. The listing will generate $530M for the autoparts company and give it a market cap of around $7.2B. On Nasdaq, Angie's List (NASDAQ:ANGI) raised $114.3M after selling shares at $13 a piece, the top end of its range; the Internet company's market cap is around $700M.
Pfizer gets pneumonia vaccine boost. An FDA advisory panel has backed extending to the over-50s the use of Pfizer's (NYSE:PFE) Prevnar 13 vaccine for helping to prevent pneumonia. Should it win FDA approval, which is contingent on an ongoing trial, the drug could add almost $2B in sales in 2015. It's already approved for young children.
Parties struggle to forge debt deal as deadline approaches. With just a week to go until automatic spending cuts kick in, Democrats and Republicans on the Congressional "supercommittee" are still deadlocked over how to make $1.2T in budget savings. Still, these deadlines tend to concentrate minds, and the GOP's Jeb Hensarling has vowed not to give up hope "until that (final) stroke of midnight."
Chu set to face grilling over Solyndra. Energy Secretary Stephen Chu is due to today appear before a Republican-led House committee, where he will probably have to fend off accusations of political cronyism and incompetence in the government's $535M loan guarantee to Solyndra. Chu's appearance comes a day after the bankrupt solar-panel company postponed an auction of its California manufacturing plant until January as it didn't receive any acceptable bids by last night's deadline.
Authorities issue subpoenas in MF Global probe. Federal prosecutors have issued subpoenas for MF Global (OTC:MFGLQ) records, sources say, as the Justice Department intensifies its criminal investigation into the firm's collapse. Meanwhile, a bankruptcy judge will today consider a request by the trustee supervising the liquidation of MF Global to release $520M of frozen customer money.
GE to deepen software presence. GE (NYSE:GE) plans to invest $1B in software development over the next three years as it seeks to make its industrial equipment more productive. While GE already earns $2.5B from software, the latest move highlights the growing role of the field in industrial businesses.
Report: Yuan could challenge dollar in 5-10 years. With China laying the groundwork for internationalization of the yuan, the renminbi could "mount a challenge" to the dollar in 5-10 years, a Congressional report says. The yuan still has much catching up to do, though, as it accounts for 0.3% of international currency trading while the dollar is involved with 85%.
U.K. sells Northern Rock at a loss. The British government has agreed to sell Northern Rock, the first U.K. bank to be rescued during the financial crisis, to Richard Branson's Virgin Money for an initial £747M ($1.2B). The price could rise to as much as £1B in the future, although this would still be below the £1.4B the state injected into the bank.
Google launches music service to challenge Apple. As expected, Google (NASDAQ:GOOG) has launched a music service which allows users to store and stream up to 20,000 songs in the cloud. It features deep Google+ and Android integration, and contains an iTunes (NASDAQ:AAPL) Match-like ability to stream songs users own without them having to upload the music. But unlike iTunes Match, the service is free.
Apple audits suppliers over environmental concerns. Apple (AAPL) has commissioned an audit of the environmental practices of its suppliers in China after critical reports by activists. The move comes as Apple attempts to balance between its famed secrecy and the potential for bad publicity.
In Asia, Japan +0.2% to 8480. Hong Kong -0.8% to 18817. China -0.2% to 2463. India -1.9% to 16462.
In Europe, at midday, London -2.5%. Paris -1.8%. Frankfurt -2.0%.
Futures at 7:00: Dow -0.6%. S&P -0.75%. Nasdaq -0.6%. Crude -0.9% to $101.69. Gold -1% to $1757.10.
Thursday's economic calendar:
8:30 Housing Starts
8:30 Initial Jobless Claims
10:00 Philly Fed Business Outlook
10:00 E-Commerce Retail Sales
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Earnings Results: Companies that beat EPS expectations last night and today include Applied Materials (AMAT), Limited Brands (LTD), NetApp (NASDAQ:NTAP).