Spain warns Argentina over YPF nationalization. Spain has vowed to take legal measures against Argentina following the latter's plan to seize a majority share in YPF (YPF). The move was "arbitrary" and "discriminatory," said Spain's foreign minister. YPF is 57%-owned by Spain's Repsol (REPYY.PK), whose own largest shareholders are already struggling Spanish banks, led by Caixabank with a 12.8% stake. Click here to read what SA author Caiman Valores believes Argentina's impending expropriation of YPF means. (Sources - WSJ, ZeroHedge)
Spanish borrowing costs surge in debt auction. Spain has sold €3.2B of 12- and 18-month bills, with the 12-month priced to yield 2.62% vs. 1.4% one month ago and the 18-month 3.11% from 1.71%. The auction beat hopes for €3B in sales - as good an excuse as any to buy sharply sold-off Spanish shares, which were +0.8% midday in Europe. Yields on 10-year bonds were -17 bps at 5.90% in the secondary market. (Source - Reuters)
Top Equities News
Billions at stake over status of pharma reps. The Supreme Court yesterday heard arguments about whether pharmaceutical representatives who promote their companies' medicines at doctors' offices are "salesmen" and therefore not entitled to overtime pay. If the court decides otherwise and the reps should be given overtime, the drug companies could face billions of dollars of liabilities. The defendant is GlaxoSmithKline (GSK). (Source - NYT)
Delta on verge of buying refiner. Delta (DAL) could enter the refining business as early as this week, CNBC reports, with a source saying the airline is on the cusp of finalizing the $100M-$125M purchase of Conoco's (COP) shuttered Philadelphia-area refinery. Delta remains hopeful that the acquisition can help it save a portion of the billions it spends on jet fuel each year, although many are skeptical.
Mixed results forecast for IBM and Intel. Tech bellwethers IBM (IBM) and Intel (INTC) are due to report Q1 earnings after the close today, with IBM's EPS expected to have grown to $2.65 from $2.41 last year and revenue to have edged up 0.7% to $24.77B. Intel's EPS is seen falling to $0.50 from $0.56 and its revenue slipping 0.1% to $12.48B as the moderate growth in the PC market continues to weigh. For IBM and Intel earnings previews from SA author WhisperNumber, as well as those for Yahoo (YHOO), please click here.
Investors hope for more turnaround details at Yahoo. Yahoo (YHOO) is also due to release Q1 results after the bell, when it is expected to report unchanged EPS and revenue of $0.17 and $1.06B respectively. Investors will be focusing on the earnings call, when they hope to hear more from CEO Scott Thompson about how he plans to revive Yahoo's revenue with a leaner company. (Source - AP)
Hulu to play against the big boys. It's a ritual that's usually for established cable channels and network broadcasters, but on Thursday Hulu will pitch original progamming to advertisers. The online video company is also expected to announce that its $8-a-month Hulu Plus service has topped 2M subscribers for the first time. However, there's still a tension between Hulu and some of its owners, Disney (DIS), News Corp.'s (NWSA) Fox and Comcast’s (CMCSA) NBCUniversal. (Source - NYT)
Chesapeake spinoff aims to raise $862.5M in IPO. Chesapeake Oilfield Services, a spinoff of Chesapeake Energy (CHK), plans to raise $862.5M in an IPO and will trade under the symbol COS. Chesapeake Oilfield handles a small fraction of CHK's oilfield service needs, and generated net income of $19.8M in 2011 on revenue of $1.3B (+60% on year).
SEC approved small credit rater despite concerns. The SEC approved Egan-Jones as a credit-rating agency in 2007 despite serious concerns about the firm's internal procedures and staffing levels, The Wall Street Journal reports. Egan-Jones sparked a sell-off in November of Jefferies Group's shares after downgrading the company in a report that may have contained inaccuracies.
Top Economic & Other News
$60B pledge from Japan to help IMF reach $400B goal. While Spanish borrowing costs soar, IMF chief Christine Lagarde hopes the IMF will reach "critical mass" this week in raising more than $400B from contributing governments. The fund will be helped by confirmation from Japan that it will provide $60B and so become the largest donor yet - excluding crisis-hit Europe - to the IMF's campaign to bolster its resources for the second time in three years. (Sources - Reuters, Bloomberg)
Buffett Rule falls in the Senate. With a 51-45 vote, Senate Republicans yesterday blocked the "Buffett Rule" to make those earning $2M annually pay federal tax of at least 30%. The measure fell nine votes short of the 60 required for the debate to continue. (Source - CNBC)
Eurozone inflation revised up. Eurozone inflation came in at 2.7% in March, unchanged from February but above a preliminary estimate of 2.6%. (Source - Eurostat)
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In Asia, Japan -0.1%. Hong Kong -0.2%. China -0.9%. India +1.2%.
In Europe, at midday, London +0.8%. Paris +1.5%. Frankfurt +1.1%.
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.4%. Crude +0.7% to $103.63. Gold +0.4% to $1655.80.
Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:30 Housing Starts
8:55 Redbook Chain Store Sales
9:15 Industrial Production
For full real-time earnings coverage, please click here.
Notable earnings before Tuesday's open: AMTD, CMA, EDU, FRX, GS, GWW, JNJ, KO, NTRS, OMC, STT, USB, USG
Notable earnings after Tuesday's close: CREE, CSX, EWBC, FULT, IBM, INTC, LLTC, STX, SYK, URI, YHOO