By Yigal Grayeff and the Market Currents team
Yahoo overhaul continues as Chairman and three directors quit. As expected, Yahoo (YHOO) Chairman Roy Bostock is stepping down in a boardroom shake-up that also includes the departure of three other directors and the recruitment of two. The overhaul follows years of criticism of Yahoo's board for its missteps as the company ceded ground to Google and Facebook, and it comes after the recent departure of Jerry Yang and the appointment of new CEO Scott Thompson.
RBS restructuring costs £38B so far. RBS's (RBS) restructuring since it almost collapsed in 2009 has so far cost £38B ($60.5B), CEO Stephen Hester has told employees in an email. Hester also told BBC radio that he considered resigning during the recent furor over his £1M ($1.59M) bonus. Hester declined the payout, as accepting it would have been "damaging" to RBS, although he thinks the bank's management should be rewarded for defusing the "biggest time bomb in history."
ECB backs down over Greek bonds. With Greece's private creditors set to take a large haircut, the ECB has made a major concession by agreeing to exchange the government bonds it has bought in the secondary market at a price below face value rather than for the full amount, The Wall Street Journal reports. The concession could cut Greece's debt by up to €11B, although individual EU central banks are not taking part.
Mortgage crisis costs major banks $72B. The combined costs of problematic mortgages and foreclosure abuse at five banks that were among the leading lenders during the real-estate boom exceed a combined $72B, a Bloomberg analysis shows. BofA (BAC) has the biggest bill, $41.8B, with the other banks being Wells Fargo (WFC), Citigroup (C), JPMorgan (JPM) and Ally Financial. "It’s a colossal failure of basic banking," Legal & General credit analyst David Knutson said.
Santorum sweeps to shock victories in three states. Rick Santorum has caused an upset in the GOP nomination race by surprisingly winning Colorado, Minnesota and Missouri, although none of the contests will result directly in the awarding of delegates. Nonetheless, the votes spark doubts about the claim of Mitt Romney, the Wall Street favorite, to be the unstoppable front-runner.
German exports slide 4.3%. German December exports plummeted a monthly 4.3% after rising 2.6% in November and came in far worse than the consensus of -1%. It's the sharpest fall since the height of the financial crisis in January 2009, and on top of plunging industrial output figures, points to recession at the eurozone core.
Three Japanese firms mull integrating chip ops. Renesas Electronics (OTCPK:RNECY), Fujitsu (OTCPK:FJTSY) and Panasonic (PC) have begun discussions toward integrating their system chip operations. The move is aimed at ensuring the survival of the Japanese chip industry by creating a globally competitive company.
Disney's profit tops forecasts but sales undershoot. Disney's (DIS) FQ1 EPS rose 12% to $0.80 and comfortably beat forecasts, although revenue edged up just 1% to $10.78B and missed expectations. Disney benefited from a 10% rise in sales at its Parks & Resorts operations, although its Studio Entertainment and Interactive Media (gaming) divisions recorded declines, while there was slower growth at its Media Networks and Consumer Products businesses. Shares -1.4% in AH trading.
Nokia wields the knife again. Nokia (NOK) intends to slash 4,000 jobs at plants in Finland, Hungary and Mexico. The cuts are part of a plan to lower costs and help get products to market more quickly by moving smartphone assembly closer to suppliers in Asia. The latest layoffs bring to over 30,000 the number of cuts announced under CEO Stephen Elop.
Amazon, Viacom to introduce Internet video service. Amazon (AMZN) could announce this week a deal with Viacom (VIA) to launch an online video subscription service, Reuters reports. The move follows hints dropped by Viacom CEO Philippe Dauman last week on a conference call.
Cisco's recovery likely to have continued in FQ2. Cisco (CSCO) is expected to report continued progress in its turnaround when it releases its FQ2 results after the bell today, with analysts predicting that EPS climbed 16% to $0.43 and that revenue increased 7.9% to $11.23B. Industry checks by Shaw Wu of Sterne Agee indicate healthy demand, while product updates should have helped Cisco even as Juniper Networks (JNPR) has stumbled.
In Asia, Japan +1.1% to 9016. Hong Kong +1.5% to 21018. China Shanghai +2.4% to 2348. India +0.5% to 17707.
In Europe, at midday, London +0.2%. Paris +0.5%. Frankfurt +0.7%.
Futures at 7:00: Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude +1.2% to $99.56. Gold flat at $1749.10.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
10:40 Fed's Williams: 'The Federal Reserve and the Economic Recovery'
1:00 PM Results of $24B, 10-Year Note Auction
Earnings Results: Companies that beat EPS expectations last night and today include CB Richard Ellis Group (CBG), Cerner (CERN), Disney (DIS), Life Technologies (LIFE), Netgear (NTGR), Time Warner (TWX), Cognizant Technology Solutions (CTSH), Statoil (STO), Sanofi (SNY - business net income).
For full real-time earnings coverage, please click here.
Notable earnings after Wednesday's close: AKAM, ATML, BDN, BMR, CBL, CINF, CSCO, CVA, CXW, EFX, FMC, FNF, GGP, GRPN, ILMN, KIM, MTD, NWSA, ONNN, ORLY, PAA, PRU, RE, TCO, V, WFM
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