By Yigal Grayeff and the Market Currents team
Romney squeaks by in Iowa vote. Mitt Romney has struck first blood - just - in the race to be the GOP Presidential candidate, edging out Rick Santorum in the Iowa caucuses by eight votes. Santorum's surprise second-place finish indicates continuing conservative unease with Romney, although with the latter being a Wall Street favorite, SA author Markos Kaminis reckons the results could boost markets.
Reliance, Apollo eye $8.1B El Paso unit. India's Reliance and P-E firm Apollo Global (NYSE:APO) are among the companies in discussion to buy El Paso's (EP) oil and gas exploration and production unit, Bloomberg reports. Kinder Morgan (NYSE:KMI) is looking to sell the business, whose value is estimated at around $8.1B, to help finance its $21B acquisition of El Paso.
Tech giants threaten to go "nuclear" over piracy act. Some tech giants are so opposed to the Stop Online Piracy Act [SOPA] that there's been talk of a "nuclear option" whereby Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Yahoo (NASDAQ:YHOO), eBay (NASDAQ:EBAY) and others would simultaneously go dark to protest the legislation. With the Senate scheduled to debate SOPA on January 24, the blackout would most probably happen a day earlier.
Yahoo could name PayPal's Scott Thompson as CEO. Yahoo (YHOO) is poised to name a CEO, possibly as soon as this morning, Kara Swisher reports, and the leading candidate is apparently PayPal President Scott Thompson, a dark horse whose name has barely been mentioned in the CEO-search speculation.
Ecuador court rejects Chevron appeal over $18B decision. A provincial appeals court in Ecuador has rejected Chevron's (NYSE:CVX) efforts to overturn an $18B judgment for the spilling of chemicals into the Amazon River basin. Chevron could now take the latest decision to the next level of Ecuador’s judiciary, although even if the firm ultimately loses, investors don't think the outcome will "cost the company," as Chevron doesn't have material assets in the country.
UniCredit sets terms of capital raising. UniCredit (OTCPK:UNCFF) has approved the terms of its closely watched share issue, with plans to offer 3.86B new shares at a steep 43% discount to current prices. The Italian bank is looking to raise €7.5B ($9.8B) as it seeks to meet capital requirements. The terms of the offer signal how expensive it could be for other banks to follow suit.
Fed to open up even further. As part of its efforts to be more open, the Fed will start announcing four times a year how long it plans to keep short-term interest rates at existing levels. RBS analyst John Briggs believes that the move, which was disclosed in the minutes of the FOMC's December meeting, could also influence the shape of the Treasury yield curve - the forecasts could more directly push yields in a direction that will help the Fed meet its policy goals.
MF Global cash could be with JP Morgan. Just days before its collapse, MF Global unloaded hundreds of millions of dollars of securities to Goldman Sachs, but was unable to get its hands on at least part of the cash as its clearing firm, JPMorgan, withheld the funds, Reuters reports. It's possible these transactions and the withheld money could explain some of the unaccounted funds at the firm.
Acme Packet plummets on profit warning. Acme Packet (NASDAQ:APKT) was -17% premarket after it lowered its 2011 guidance yesterday, estimating revenue of $308M-$310M vs. a consensus of $318M, and EPS of $1.03-$1.05 vs. a consensus of $1.14. "Our results were impacted by uncertainty in the North American service provider market," CEO Andy Ory said.
TiVo surges on AT&T settlement. TiVo (NASDAQ:TIVO) jumped 14% in post-market trading after AT&T (T) agreed to pay about $215M to settle a patent lawsuit, with around $51M to be paid up front and then the rest via regular payments through 2018.
Corporate tax intake lags profits. Even as company profits rise well above pre-crisis peaks, the government's corporate tax take hasn't kept up - clocking in at just $200B in the 12 months ending in November compared with a $380B peak. One factor, notes Ed Yardeni, is that firms are making more from overseas operations and keeping that money abroad.
Swiss bankers accused in $1.2B tax cover up. U.S. prosecutors yesterday accused three Swiss bankers of conspiring with wealthy U.S. taxpayers to hide over $1.2B from tax authorities. According to the indictment, the bankers, from a firm that wasn't identified, tried to capture business lost by UBS.
Kodak faces de-listing. The NYSE has told Eastman Kodak (EK) that it has six months to get back into compliance or risk de-listing because its stock has traded below $1 for the last 30 trading days. To restore compliance, Kodak's shares would have to trade at $1 on the closing day of one of those six months, and at $1 on average over the 30 days leading up to the close.
BP stops payments over oil spill. BP (NYSE:BP) has halted payments from its $20B Gulf oil spill compensation fund until a federal court clarifies an order issued in December. To date, the fund has paid or approved for payment a total of $7.71B.
Liz Claiborne to change name. Liz Claiborne (LIZ) is changing its name to become Fifth & Pacific Companies to better communicate its strategic focus on growing its three global lifestyle brands and to reflect the sale of its Liz Claiborne namesake brand to J.C. Penney. The change goes into effect around May 15, and the new ticker will be FNP.
In Asia, Japan +1.2% to 8560. Hong Kong -0.8% to 18727. China -1.4% to 2169. India -0.4% to 15883.
In Europe, at midday, London flat. Paris -0.6%. Frankfurt -0.7%.
Futures at 7:00: Dow -0.2%. S&P -0.2%. Nasdaq flat. Crude -0.7% to $102.24. Gold flat at $1600.30.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Factory Orders
Earnings Results: Companies that beat EPS expectations last night and today include Team Inc. (NYSE:TISI)
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