Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

By Yigal Grayeff and the Market Currents team

Facebook may file for IPO today. Facebook is expected to file a preliminary prospectus for a $5B IPO this morning, IFR reports, although the company could eventually raise that lower-than-anticipated figure. Facebook plans to finalize the listing process by May, and while it's unclear what its valuation will be, recent trading in the social network's stock on private exchanges indicates a market cap of over $80B.

Sony names Kazuo Hirai as CEO. Sony (NYSE:SNE) has appointed frontrunner Kazuo Hirai to replace Howard Stringer as CEO in April, with Stringer to remain at the company as Chairman. Hirai is credited with reviving Sony's loss-making videogame business; following his appointment, the struggling company is expected to accelerate its strategy of aligning its consumer-electronics operations with its music, movie, games and services businesses.

NYSE to stay American after EU blocks tie-up. Deutsche Boerse (OTCPK:DBOEY) and NYSE Euronext (NYSE:NYX) are ending their merger after the European Commission not unexpectedly blocked the tie-up. The EC backed the argument that the deal would stifle competition in the European exchange-traded derivatives market. To soften the blow, NYSE will resume a program to buy back $550M in shares.

Amazon's net profit plunges as the spending goes on. Amazon's (NASDAQ:AMZN) glorious lack of concern about the short term continued in Q4 as the company's inordinate spending once again crimped profits. EPS plunged 54% to $0.38, while operating expenses rose 38% and headcount surged 67%. EPS handily beat forecasts but a 35% increase in revenue to $17.43B missed expectations and helped cause shares to slump 7.8% premarket. A weak Q1 outlook hasn't helped the mood. Kindle unit sales almost trebled in Q4, although there was no word about Kindle Fire sales.

Sprint gives LightSquared FCC ultimatum. Sprint (NYSE:S) has told LightSquared it has until mid-March to receive FCC clearance to build its 4G LTE cellular network, or Sprint will terminate their 15-year network-sharing deal. LightSquared's prospects took a major hit two weeks ago following the release of a critical letter that was supported by nine government agencies. Without LightSquared, Sprint will need Clearwire's (CLWR) spectrum to build out its LTE network.

Romney rebounds with strong win in Florida. Mitt Romney has got his campaign for the GOP's presidential nomination back on track by comfortably beating Newt Gingrich in the Florida primary. "President Obama wants to grow government and continue to amass trillion dollar deficits," Romney said following his victory. "I will not just slow the growth of government, I will cut it...And without raising taxes, I will finally balance the budget."

California faces cash crunch. It's not just Greece that might run out of money in March - California could do so as well, as tax collections trail budgeted amounts. The state needs $3.3B for next month and the first two weeks of April, but will not need to issue IOUs to creditors as it did in 2009. Controller John Chiang said the current shortfall can be managed through payment delays and borrowing.

Refinery strike averted after new labor deal agreed. The United Steelworkers union last night struck a new labor deal with refiners just hours before the existing contract expired. The agreement averted a strike that could have closed as much as 6% of the U.S.'s refining capacity. The deal now needs ratification by the union's membership.

Obama seeks to revive housing market with refinancing plan. President Obama is expected to lay out today a fresh attempt to revive the housing market by letting millions of homeowners refinance their mortgages with lower-interest federally insured loans. Borrowers would qualify even if they are in negative equity, although Obama is likely to face opposition over plans to levy a bank tax to pay for the proposal, and the increasing exposure to mortgage losses that the taxpayer would face.

Investigators trace missing MF Global cash. Investigators have worked out what happened to nearly all of the $1.2B of client money that disappeared from MF Global (OTC:MFGLQ), tracing it to the firm's banks, trading partners, and securities customers, The New York Times reports. However, recovering the cash will be tricky, as some of the recipients were entitled to payouts from MF Global.

Hopes increase that China will avoid hard landing. China's manufacturing activity increased in January, according to official figures, as PMI rose to 50.5 from 50.3 in December. That beat expectations for a contraction. However, the HSBC PMI data indicated that activity shrunk in January with a reading of 48.8. The official number supports hopes China will avoid a hard landing, although HSBC said its survey "confirmed the still weak growth momentum of manufacturing."

Eurozone factories also show signs of life. Eurozone manufacturing PMI rose to 48.8 in January from 46.9 in December, with signs of recovery in Germany (51) and Austria (51.8), where PMI returned to expansion territory. Meanwhile, contraction eased in Italy (46.8), Spain (45.1) and the Netherlands (49), although the figures still show the sharp disparity between the north and the south.

Today's Markets:
In Asia, Japan +0.1% to 8810. Hong Kong -0.3% to 20333. China -1.1% to 2268. India +0.6% to 17301.
In Europe, at midday, London +1.4%. Paris +1.6%. Frankfurt +2.0%.
Futures at 7:00: Dow +0.7%. S&P +0.6%. Nasdaq +0.55%. Crude +0.8% to $99.29. Gold +0.5% to $1749.00.

Wednesday's economic calendar:
Auto sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
8:30 Fed's Plosser: Economic Outlook
9:00 Treasury Refunding Quarterly Announcement
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Petroleum Inventories

Earnings Results: Companies that beat EPS expectations last night and today include Amazon.com (AMZN), Broadcom (BRCM), Cytec Industries (NYSE:CYT), C.R. Bard (NYSE:BCR), Manitowoc (NYSE:MTW), Seagate Technology (NASDAQ:STX), Silgan (NASDAQ:SLGN), Unisys (NYSE:UIS), W.R. Berkley (NYSE:WRB), AOL (NYSE:AOL), Nasdaq (NASDAQ:NDAQ), Autoliv (NYSE:ALV), Aetna (NYSE:AET), Thermo Fisher (NYSE:TMO), Enterprise Products Partners L.P. (NYSE:EPD), BE Aerospace (NASDAQ:BEAV).

Those in line include Mueller Water Products (NYSE:MWA), Hershey Foods (NYSE:HSY).

Those that missed forecasts include AFLAC (AFL - operating earnings), C.H. Robinson (NASDAQ:CHRW), NiSource (NYSE:NI), Whirlpool (WHR - missed on revenue).

For full real-time earnings coverage, please click here.

Notable earnings before Wednesday's open: AET, ALV, AOL, ARW, BEAV, BEN, ENR, EPD, GIB, HBI, HSY, MAN, MPC, NDAQ, NI, NOC, ST, TMO, TUP, WHR

Notable earnings after Wednesday's close: ALL, AMP, BMC, CCK, CDNS, EA, EQR, GMCR, GTAT, ISIL, JDSU, LVS, QCOM, TSO, VMC

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