France and Greece reject austerity. European markets, particularly in Greece, and U.S. stock futures have fallen after French and Greek voters resoundingly rejected austerity. In France, Francois Hollande won the presidency from Nicolas Sarkozy, who became the ninth European leader to be booted out in two years. In Greece, the two pro-bailout parties gained just 32% of the vote, down from nearly 80% in 2009. Opinion: What Hollande's victory means for the euro.
Ally unit ResCap on verge of bankruptcy. Ally Financial's mortgage unit, ResCap, is considering filing for bankruptcy by next Monday, when it must repay some debt, and it's considering asset sales, Reuters reports in a long piece about Ally's inability to recover from the financial crisis. Ally, which still owes the government $12B for its bailout, also faces losing business from key customers GM (NYSE:GM) and Chrysler (FIATY.PK). Opinion: High yield mortage REITs are still a buy.
Top Stock News
Icahn profits from LightSquared woe. Carl Icahn has made a handy profit by selling his $250M debt holding in LightSquared to investment firm Sound Point for $0.60 on the dollar after buying it a few months ago when it was trading in the low $0.40s, Reuters reports. Meanwhile, LightSquared's remaining creditors have given it another week's grace to avoid defaulting on $1.6B of debt. Opinion: 5 top buys by Carl Icahn.
Yahoo in talks to sell Alibaba stake but CV controversy weighs. Yahoo (NASDAQ:YHOO) is reportedly negotiating to sell a 15%-25% stake in Alibaba (OTC:ALBCF) back to the Chinese e-commerce company in a deal that would avoid the complexities that stalled previous talks but would mean that Yahoo would pay tax. However, the controversy over Scott Thompson's CV could complicate matters. Dan Loeb wants Thompson fired by high noon. Opinion: Yahoo board may have made its last mistake.
Disney's superheroes outmagic Harry Potter. "The Avengers," Disney's (NYSE:DIS) multi-superhero flick, has smashed records for North American opening weekends by generating $200.3M in sales, well above the previous record of $169.2M taken in by the final Harry Potter film. Globally, the Avengers has earned $641.8M in just 12 days, helping to make up for the debacle that was "John Carter." Opinion: Disney's Marvel acquisition is paying dividends.
Berkshire won't be friending Facebook for IPO. Berkshire Hathaway's (NYSE:BRK.A) annual meeting over the weekend produced lots of tidbits, including Warren Buffett saying that Wal-Mart may have botched its Mexico probe and that Berkshire recently considered a $22B deal. The sage of Omaha also spent hours of quality time advising Mark Zuckerberg recently, but he won't be buying Facebook (NASDAQ:FB) shares, nor Apple's (NASDAQ:AAPL) or Google's (NASDAQ:GOOG). Opinion: Berkshire Hathaway is not mispriced.
Treasury to sell $5B worth of AIG shares. The Treasury is set to take more steps in its efforts to exit AIG (NYSE:AIG), saying it intends to sell 163.9M shares at $30.50 each vs. the company's Friday close of $32.83. The transaction will lower the government's stake to 63% from 70%, with AIG set to buy $2B worth of stock from the $5B total being sold. Opinion: Will AIG buy the full stake?
Micron closes in on Elpida with $2.5B bid. Reuters has firmed up speculation that Micron (NASDAQ:MU) has won the exclusive right to bid for Elpida after offering over ¥200B ($2.5B) for the bankrupt Japanese chipmaker. Micron has also promised to keep Elpida's two main factories in Japan open and to guarantee jobs for the company's employees, at least for now. A deal would enable Micron to more than double its market share. Opinion: Micron: A new buy-and-hold tech stock.
LG, Google join to fight yet-to-emerge Apple TV threat. LG Electronics (OTC:LGEAF) plans to launch a Google-powered (GOOG) Internet-enabled TV in the U.S. in two weeks as part of an aggressive push by the duo to defend against Apple (AAPL) and its rumored iTV. Opinion: Smart TVs are a threat to consoles.
Spain mulls cash injection in banks. Spain may consider pumping government money into its banks, PM Mariano Rajoy has said in an apparent change of policy. First on the list may be Bankia, which just wrote down a chunk of its real estate assets and is considered one of the nation's weaker banks. Shares were off 4.8% midday while Madrid was +0.7%. Opinion: Secrets of the Spanish banking system.
UBS looks to sell toxic debt with $1.5B face value. UBS (UBS) is betting that demand has rebounded for toxic mortgage debt and is seeking buyers this week for CDOs assembled in 2007. The securities carry a face value of $1.5B and are tied to skyscrapers, malls and hotel loans. UBS has a precedent: the NY Fed's record $7.5B sale of similar bonds that it acquired in the 2008 bailout of AIG (AIG). Opinion: Time for a commercial real estate ETF?
Statoil joins the "scramble for the Russian Arctic." Statoil (NYSE:STO) has signed a potential $100B cooperation deal with Rosneft to develop the country's offshore energy resources. The agreement is similar to ones signed by Exxon and Eni, and follows Russia's authorization of the relevant tax breaks. Opinion: Rosneft tries the hostage strategy with Statoil.
Barclays to launch Internet retail bank in U.S. Barclays (NYSE:BCS) plans to dip its toes into the U.S. market with the launch of an online savings bank, and intends to attract customers by offering interest rates of around 1% on deposits. Opinion: The future of global finance.
Bank failures this year rise to 23. Security Bank of North Lauderdale, Florida has become the 23rd U.S. bank failure of the year. Banesco USA of Coral Gables will buy the bank's $101M in assets and assume its $99.1M in deposits. The cost to the FDIC is an estimated $10.8M. Opinion: Small banks less likely to repay TARP.
Top Economic & Other News
EU's Rehn acknowledges reality but will Germany? EU Economic Commissioner Olli Rehn has signaled that the eurozone could give its recession-hit members breathing room in complying with deficit rules so that they can try to spark growth. "The pact entails considerable scope for judgment...when it comes to its concrete application," Rehn said. He may only be swimming with the tide, given the voter anger across Europe. Opinion: Draghi's 'growth pact' equals internal devaluation.
In Asia, Japan -2.8%. Hong Kong -2.6%. China flat. India +0.5%.
In Europe, at midday, London closed. Paris -0.2%. Frankfurt -0.9%.
Futures at 7:00: Dow -0.5%. S&P -0.5%. Nasdaq -0.5%. Crude -0.7% to $97.80. Gold -0.2% to $1642.20.
Today's economic calendar:
10:00 Employment Trends Index
3:00 PM Consumer Credit
6:00 PM Fed's Lacker: "Technology, Unemployment and Workforce Development in a Rapidly Changing World"
Notable earnings before today's open: BSFT, CAR, CNK, CTSH, DISH, FTR, HFC, LPX, NOG, SYY, TSN