Wall St. Breakfast's Pre-Market Snapshot:
U.S. Futures As of 8:53 AM EST
S&P 500: +4.40; 1,552.10
NASDAQ 100: +3.00; 1,972.75
Dow: +39.00; 13,792.00
NIKKEI 225: +0.99%; 18,149.52 (+178.03)
HANG SENG: +2.69%; 21,582.89 (+565.84)
S&P/ASX 200: +0.79%6,343.40 (+49.60)
BSE SENSEX 30: -0.58%; 14,080.14 (-82.57)
FTSE 100: +0.08%; 6,738.00 (+5.60)
CAC 40: +0.05%; 6,108.22 (+2.94)
XETRA-DAX: +0.47%; 8,068.05 (+37.41)
Commodity Futures (Reuters/Jefferies CRB)
Oil: -0.75%; $67.49 (-$0.51)
Gold: +0.47%; $661.80 (+$3.10)
Natural Gas: -1.01%; $7.84 (-$0.08)
Silver: +0.38%; $13.31 (+$0.05)
U.S. Breaking News — see today's Wall Street Breakfast for earlier news
BHP's Incoming CEO Expresses Interest In Bidding For Alcoa
The Time of London reported Monday morning that Anglo-Aussie metal miner BHP Billiton's incoming CEO, Marius Kloppers, wants to revive a plan to bid for U.S. aluminum giant Alcoa. It is not believed BHP has yet formally approached Alcoa with the $40 billion offer. The news sent shares of Alcoa 3% higher in European trading; NYSE shares were 2.76% higher in pre-market trading as of 8:05 a.m. EST. Alcoa is itself embroiled in a bid for Canadian rival Alcan, in hopes it could become too big for a takeover. Alcan's board has thus far rejected Alcoa's $33 billion bid.
Sources: Times of London, MarketWatch, TheStreet.com
Commentary: Alcoa Stays Put on Alcan Bid, Shares Surge on Bid War Speculation • Alcan Rejected Marriage Proposal; Now Alcoa Has Something to Prove • Alcan Shares Climb On Rio Tinto, Norsk Hydro Bid Speculation
Stocks/ETFs to watch: BHP Billiton (NYSE:BHP), Alcoa (NYSE:AA). Competitors: Alcan (NYSE:AL), Rio Tinto plc (RTP), Anglo American plc (AAUK), Companhia Vale do Rio Doce (NYSE:RIO). ETFs: Materials Select Sector SPDR (NYSEARCA:XLB), iShares Dow Jones US Basic Materials Index (NYSEARCA:IYM), Vanguard Materials VIPERs (NYSEARCA:VAW)
Conference call transcripts: Alcoa Q1 2007 Earnings Call Transcript
Boeing Announces 737/777 Orders, Aerospace MOU with Abu Dhabi
Boeing announced more than $4.4 billion of aircraft orders (at list price) Monday, in addition to a memorandum of understanding [MOU] with Abu Dhabi's Mubadala Development Company PJSC. This news comes as rival Airbus reported $27b worth of orders from Qatar and US Airways. Boeing received a $3b order from Jakarta-based Lion Air for an additional 40 737-900ER airplanes, bringing its total order to 100. Separately, GE's Commercial Aviation Services ordered six 777 freighters at approximately $1.4b, increasing its total order to 39, with 15 delivered to-date. The CEO of the division told Bloomberg at the Paris Air Show that although the planes have not been placed with customers yet, the company expects demand from the Middle East, SE Asia and Latin America. Boeing's MOU with Abu Dhabi-based Mubadala was signed at the Paris show. Financial details were not reported, but coverage by MarketWatch says the focus of the MOU is for production of advanced material aerospace components and raw materials in Abu Dhabi. Shares of Boeing lost 0.8% to $98.15 in normal trading Friday.
Sources: Bloomberg, I, II, MarketWatch I, II, III
Commentary: Boeing Taken Apart By The Little Parts • Airbus Secures Large A350 Sale To US Airways, Hopes To Build Momentum • Boeing's Conflicted Future: Why Are Insider Executives Selling?
Stocks/ETFs to watch: Boeing (NYSE:BA). Competitors: EADS (Paris: 005730). ETFs: iShares Dow Jones US Aerospace & Defense (NYSEARCA:ITA), PowerShares Aerospace & Defense (NYSEARCA:PPA)
Conference call transcripts: Boeing Q1 2007 Earnings Call Transcript
Related: Boeing Orders & Deliveries as of 6/12/07, Commercial Market Outlook
The Finish Line Acquires Genesco for $1.5 Billion
The Finish Line announced Monday it would acquire footwear and accessory retailer Genesco for $1.5 billion, creating a $2.8 billion footware and sportsware retailer. Finish line said it will acquire all outstanding Genesco shares for $54.50 -- a 10% premium to Friday's close, and 37.7% higher than its three-month average. The announcement comes after Genesco rejected two offers to be acquired by Foot Locker Inc., including a $1.37B bid in May, after which Genesco said it would explore strategic options, and Foot Locker said it would no longer pursue the company. Recently, Genesco reported Q1 net earnings dropped 79%, and said it would close as many as 57 underperforming stores. In the press release, Finish Line said benefits of the merger include increased scale ($2.8B revenue), new growth opportunities (Genesco's Journeys, Hat World and Johnston and Murphy lines), and cost savings/operational efficiencies ($15-20 million in annual cost savings). The companies will have 2,870 retail stores in the U.S., Canada and Puerto Rico. Finish Line is financing the merger with $11 million cash and $1.6 billion in financing from UBS. The deal is expected to close in the fall. Genesco shares are up 9.2% to $54.15 in pre-market trading.
Sources: Press release, MarketWatch, Reuters, Dow Jones
Commentary: Finish Line Continues To Struggle • Foot Locker Ends Pursuit of Genesco • Screening for Potential Buyout Targets
Stocks/ETFs to watch: The Finish Line Inc. (NASDAQ:FINL), Genesco Inc. (NYSE:GCO), Foot Locker Inc. (NYSE:FL). Competitors: Stride Rite Corp. (SRR), Gap Inc. (NYSE:GPS), Abercrombie & Fitch Co. (NYSE:ANF), Payless Shoesource Inc. (NYSE:PSS)
Related: The Finish Line is holding a conference call/webcast today at 10:00 ET to discuss the announcement, available at http://www.finishline.com or http://www.genesco.com or 888- 603-6873, conference code 8926590.
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Asian Headlines (via Bloomberg.com)
• Asian Stocks Gain on Yen, Commodities; Toyota Rises, China Reaches Record Asian stocks rose for a third day, driving benchmarks in China, Hong Kong and South Korea to records, as prices of metals and crude oil advanced and the yen weakened against the dollar.
• Auckland Airport in Talks With Canadian Pension Over $2.8 Billion Offer Canada Pension Plan Investment Board may spark a bidding contest for Auckland International Airport Ltd., New Zealand's busiest, after approaching some shareholders with an offer valuing the company at NZ$3.79 billion ($2.8 billion).
• China's Stocks Rise to Record, Completing Rebound From Last Month's Rout China's key stock index rose to a record, having taken less than two weeks to rebound from a rout that erased more than $400 billion of market value.
• New Zealand Dollar Gains Against Yen; Intervention Fails to Curb Demand The New Zealand dollar rose to the highest in 19 years against the yen after central bank intervention failed to halt gains.
• China Merchants, ICBC Among Six Banks Fined for Illegal Stock-Market Loans China's banking regulator fined six banks for making loans that were illegally invested in shares, the first sanctions announced after a yearlong investigation aimed at cooling speculation and curbing financial risks.
European Headlines (via Bloomberg.com)
• European Chemical Stocks Advance, Paced by ICI; Anglo American Shares Drop European chemical stocks gained after Akzo Nobel NV (OTCQX:AKZOY) made an offer for Imperial Chemical Industries Plc. Shares of ICI (NYSEARCA:ICI) surged 16 percent.
• ICI Rejects $14.2 Billion Akzo Nobel Takeover Bid as Too Low; Shares Surge Imperial Chemical Industries Plc (ICI), the U.K. maker of Dulux and Glidden paints, rejected a 7.2 billion-pound ($14.2 billion) bid from Akzo Nobel NV (OTCQX:AKZOY) of the Netherlands as too low.
• Airbus Wins $27 Billion in Orders, Commitments From Qatar, US Airways Airbus SAS, struggling to hold its lead over Boeing Co., won $27 billion in orders and commitments from Qatar Airways and US Airways Group Inc. (LCC), including agreements for the new A350 widebody plane.
• Cinven to Buy 25 U.K. Hospitals From Health Insurer BUPA for $2.85 Billion Cinven Ltd. agreed to buy British United Provident Association Ltd.'s U.K. hospitals for 1.44 billion pounds ($2.85 billion) as the government sends more patients to private facilities to reduce waiting times.
• Embraer Wins $3.1 Billion in E-Jet Orders From Lufthansa, Japan Airlines Empresa Brasileira de Aeronautica SA (NYSE:ERJ), a maker of jetliners for regional airlines, won orders worth as much as $3.1 billion from Deutsche Lufthansa AG and Japan Airlines Corp.