By Yigal Grayeff and the Market Currents team
Kodak files for Chapter 11. The once mighty Eastman Kodak (EK) has filed for bankruptcy protection, and has obtained a $950M, 18-month credit facility from Citigroup that will enable it to continue operating during Chapter 11 and pay its 17,000 workers. Despite inventing the digital camera, the 130-year-old photographic pioneer failed to fully take advantage of its patented technology, which is used in almost every smartphone and tablet, as well as in virtually all digital cameras.
Canada to look east after Keystone rejection. Canada may turn to China in order to "diversify" its energy exports following President Obama's rejection yesterday of TransCanada's (TRP) Keystone XL Pipeline, as relying less on the U.S. would strengthen the country’s "financial security." Currently, 99% of Canada’s crude exports go to the U.S. Meanwhile, TransCanada will move ahead with an alternate route and will be able to reapply for approval of the pipeline.
eBay beats forecasts but gives cautious outlook. eBay (EBAY) shares rose 2.4% postmarket after the e-commerce giant beat expectations as adjusted EPS in Q4 rose 15.4% to $0.60 and revenue jumped 35% to $3.4B. eBay's performance was boosted by strong growth at PayPal, improved productivity and a campaign to promote its expanded retail offerings. However, the company gave a conservative outlook for Q1 that was below consensus, warning that weakness in the EU may overshadow strong e-commerce growth.
France, Spain hold strong bond auctions. France has passed its first test following S&P's downgrade last week, attracting strong demand and obtaining lower yields in an auction of €7.965B ($10.28B) of medium-term bonds. Meanwhile, Spain sold over €6.6B ($8.46B) of bonds with maturities of up to 10 years, with demand beating forecast and yields roughly in line with expectations.
Greece, creditors could forge deal by weekend. Greece could reportedly reach a deal with private creditors for a voluntary debt swap by the end of the week. The sides will continue their talks today after an intensive session last night. Greece needs to seal the agreement in time to meet a debt repayment of €14.5B ($18.5B) in March.
Earnings at tech giants seen mostly growing. It's a big day of earnings for tech bellwethers today, with Google (GOOG), IBM (IBM), Intel (INTC) and Microsoft (MSFT) all due to report. Google is forecast to post a 16% climb in EPS to $9.03 on a 31% jump in revenue to $8.4B; IBM's numbers are seen at $4.62 and $29.7B vs. $4.18 and $29B; analysts forecast Intel's figures at $0.61 and $13.7B vs. $0.59 and $11.46B; and Microsoft's EPS is expected to be unchanged at $0.77, with revenue rising to $21B from $20B.
Inflation seen rising slightly. CPI data for December is due out this morning, with economists expecting that inflation rose 0.1% after it held steady in November as retailers slashed prices to strengthen holiday sales. Core CPI is seen at +0.1% vs. +0.2%.
BankUnited calls off sale. BankUnited (BKU) has decided not to proceed with a possible sale of the company, and will "continue to pursue its original plan to build the premier bank throughout Florida as an independent institution."
Ericsson to take $160M hit after mobile loss. Sony Ericsson (SNE, ERIC) posted a Q4 pretax loss of €247M ($316.6M), a far cry from the €41.7M profit analysts had expected and the €31M profit in Q3. The business, which is being fully acquired by Sony over the next few weeks, blamed tough competition, the global slowdown and restructuring costs. Ericsson will take a $160M Q4 hit to its operating income as a result of Sony Ericsson's surprise loss.
Analyst: BP to pay U.S. $20B-$25B over oil spill. BP (BP) is likely to agree to pay the Justice Department $20B-25B to settle all criminal and civil charges related to the Deepwater Horizon spill, according to leading industry analyst Martijn Rats. In a research note, Rats pegged a 70%-80% chance the company will reach a settlement between BP's FY results on Feb. 7 and the start of legal hearings on Feb. 27.
Iran won't try to close Hormuz - for now. Iran said the Strait of Hormuz won't be closed...unless the country's security is endangered. If "foreign powers want to create trouble in the Persian Gulf," then "all the options are or would be on the table."
House rejects debt ceiling increase but it won't matter. In "a largely symbolic vote aimed at staking out election-year positions on government spending," the House yesterday rejected by 239-176 - not enough to avoid President Obama's veto - the $1.3T increase in the federal debt limit. Ron Paul, as always, voted against the hike but called the vote a "farce" because lawmakers already gave Obama the power to lift the cap.
In Asia, Japan +1.0% to 8640. Hong Kong +1.3% to 19943. China +1.3% to 2296. India +1.2% to 16644.
In Europe, at midday, London +0.3%. Paris +0.9%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.3%. Crude +0.9% to $101.52. Gold +0.25% to $1664.00.
Thursday's economic calendar:
8:30 Consumer Price Index
8:30 Initial Jobless Claims
8:30 Real Earnings
8:30 Housing Starts
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Earnings Results: Companies that beat EPS expectations last night and today include eBay (EBAY), Plexus (PLXS), SLM (SLM), UnitedHealth (UNH), Xilinx (XLNX), Southwest Airlines (LUV), BlackRock (BLK), BB&T (BBT).
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