By Yigal Grayeff and the Market Currents team
P&G to sell Pringles to Kellogg for $2.7B. Procter & Gamble (NYSE:PG) has said it has agreed to divest Pringles to Kellogg (NYSE:K) for $2.7B, with Diamond Foods (NASDAQ:DMND) announcing that it has ended its attempt to purchase the snack-food unit.
Italy sinks into recession, eurozone contracts. Italy entered recession in Q4 as GDP dropped a quarterly 0.7%, adding to a fall of 0.2% in Q3. The eurozone shrank 0.3% in Q4, its first contraction since Q2 2009, although it was a smaller pullback than had been expected. Germany's economy shrank as well but France provided some cheer by unexpectedly growing 0.2%.
Cook fuels hopes of Apple dividend. Tim Cook has added fuel to rising hopes that Apple (NASDAQ:AAPL) will pay a dividend by saying that the company's board is discussing what it should do with its giant cash pile, which is probably over $100B at this point. Cook also hinted at the possibility of an Apple TV, and suggested the iPhone's "halo effect" has been boosting iPad sales.
Greek party chief bows to EU demands over bailout. Antonis Samaras, the favorite to be Greece's next PM after a vote in April, will today send a letter to the EU pledging to abide by the country's bailout terms, Reuters reports. Samaras' pronouncements that he'd try to renegotiate if elected caused EU finance ministers to cancel a meeting for today, but they will speak by phone and are due to meet on Monday. Meanwhile, discontent among Greece's private creditors to the proposed bond swap is growing, with some possibly open to court action to fight it.
Fed OKs Capital One's purchase of ING ops. The Fed has approved Capital One's (NYSE:COF) plan to acquire ING's (NYSE:ING) U.S. online banking unit, but in a nod to criticism the deal would create the next too-big-to-fail banking giant, COF has been ordered to ensure that its risk management and compliance structure keep up with its growth and complexity.
Zynga tops forecasts but makes $435M net loss. Zynga's (NASDAQ:ZNGA) shares were -8% premarket despite the social gaming company beating Q4 earnings forecasts with adjusted EPS of $0.05 and revenues that jumped 59% to $311.2M. However, Zynga swung to a net loss of $435M from a profit of $42M, due to a $510M expense related to stock-based compensation. Zynga's user base increased, as did the number of users paying for virtual goods, but R&D costs also skyed nine-fold as the company developed more games.
Shareholders sue Illumina over Roche bid. Shareholders have filed a class action suit against Illumina (NASDAQ:ILMN), alleging its directors adopted a poison pill plan against a takeover by Roche (OTCQX:RHHBY) based on bad advice from Goldman Sachs. Illumina had "inexplicably chosen to receive" the advice despite Goldman's financial conflict of interest.
Libor probe finds collusion between firms. The Libor investigation by global regulators has exposed flaws in banks' internal controls that may have allowed traders to manipulate interest rates around the world, Bloomberg reports, with the probe also finding email evidence of potential Libor collusion between firms. Banks may face civil fines as a result, although probably not this year. There has been no move toward criminal charges.
Major investors increase tech positions. Some of the world's biggest investors boosted their technology holdings during Q4, with Warren Buffett adding to positions in Intel (NASDAQ:INTC) and IBM (NYSE:IBM), and George Soros increasing his stakes in Google (NASDAQ:GOOG) and Yahoo (NASDAQ:YHOO). Other heavyweights such as David Tepper and David Einhorn piled into Apple (AAPL). One exception was John Paulson, who, after a string of heavy losses, liquidated his losing position in H-P (NYSE:HPQ).
Deal agreed to extend payroll tax cut. A bipartisan negotiating panel is today expected to sign a deal to extend the payroll tax cut through this year, clearing the way for the House to vote on the measure, possibly this week. Democrats and Republicans have also agreed to cut the maximum number of weeks to collect unemployment benefits from 99 to 73 by the end of 2012.
Analysts exclude Apple from their calculations. Apple's (AAPL) gargantuan size has prompted some analysts to analyze overall corporate earnings while excluding the tech giant's impact. Earlier this month, for example, UBS noted that for the companies in the S&P 500, earnings were on track for a 6.6% year-on-year gain in Q4. Factor out Apple's earnings, and the number drops down to just 2.8%.
In Asia, Japan +2.3% to 9260. Hong Kong +2.1% to 21365. China +0.9% to 2367. India +2.0% to 18202.
In Europe, at midday, London +0.2%. Paris +1.1%. Frankfurt +1.2%.
Futures at 7:00: Dow +0.5%. S&P +0.5%. Nasdaq +0.6%. Crude +0.8% to $101.58. Gold +0.65% to $1728.90.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
8:30 Empire State Mfg Survey
9:00 International Capital Flow
9:15 Industrial Production
9:15 Fed's Fisher: 'Overview of Fed Operations and the Texas Economy'
10:00 Hearing: President’s Budget for FY 2013 (Geithner)
10:00 NAHB Housing Market Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC minutes
Earnings Results: Companies that beat EPS expectations last night and today include Given Imaging (GIVN), Heineken (HINKY.PK), MetLife (NYSE:MET), Rush Enterprises (NASDAQ:RUSHA), Valmont Industries (NYSE:VMI), Zynga (ZNGA), Wellcare Group (NYSE:WCG), Henry Schein (NASDAQ:HSIC), Teva Pharmaceutical Industries (NYSE:TEVA).
Those in line include Curtiss-Wright (NYSE:CW).
For full real-time earnings coverage, please click here.
Notable earnings after Wednesday's close: A, AEM, CAR, CBS, CF, CLF, CLWR, CTL, EQIX, ETE, ETP, FRT, GG, GGC, HBI, KGC, MAR, NTAP, NTES, NVDA, OI, TEX, TRN, VMC, WFR
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