Wall Street Breakfast: Must-Know News

by: SA Eli Hoffmann
SA Eli Hoffmann
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.
  • U.S. markets spent most of the day in positive territory, but ended Thursday relatively flat. Dow +0.1%. S&P 0%. Nasdaq -0.27%. Oil once again traded through but failed to hold $100/barrel, closing down $0.44 to $99.18. Gold gained another $9.10 to $869.10. Ten-year notes were flat.
  • Asia: Japan's Nikkei tumbled 4% on concerns a stronger yen. The Hang Seng gained 2.35%. Shanghai was up 0.78%. Standouts included Nissan (NSANY -9.2%) [see below], Sony (SNE -6.6%), Canon (CAJ -6%), Mitsubishi UFJ Financial (MTU -5%), CNOOC (CEO +5.6%) and PetroChina (PTR +7.4%).
  • European stocks posted modest gains early Friday, reversing a two-day drop. FTSE +0.62%. CAC +0.02%. Dax -0.33%. Rio Tinto (RTP +2.9%) and BHP Billiton (BHP +2.5%) led gains.
  • During Q4, U.K. retailers issued the most negative sales updates in almost two years, with some 22% of retailers posting sales losses.
  1. Major automakers reported lower U.S. sales for December. Ford (NYSE:F) sales fell 9%. GM (NYSE:GM) -5%. Nissan (OTCPK:NSANY) -2.4%. Toyota (NYSE:TM) -1.7%. Honda (NYSE:HMC) 0%. For 2007 GM sales dropped 6%; Ford -12%; Honda +2.5%; Toyota +2.7%; Nissan +4.5%. GM CEO Rick Wagoner says 2008 will be no better.
  2. Boeing (NYSE:BA) sold an industry record 1,413 planes in 2007, topping a previous 1,044. The orders are worth more than $150B at list price. Rival Airbus posts its yearlys later in Jan.
  3. Microsoft (NASDAQ:MSFT) sold 4.3M Xbox 360 consoles in Q4, but said it was "disappointed" with problems at its online gaming service. MSFT said Holiday 2007 was a "blockbuster season for the gaming industry," and that Xbox 360 kept its lead over rivals Wii (OTCPK:NTDOY) and PlayStation 3 (NYSE:SNE) in dollars spent on hardware and software.
  4. Regulators are probing several Wall St. brokerage firms to determine whether they sold CDOs to investors just as the market was collapsing.
  5. Although State Street (STT +8.2%) said it would take a $279M Q4 charge against potential legal liabilities related to subprime investments, investors were more impressed by the firm's Q4 outlook of 30% revenue gains and EPS excluding charges of $4.54-4.57, well ahead of analysts' estimates.
  6. Sinopec (NYSE:SNP) denied a report by China's official Xinhua news agency that 2007 net profit surged to 70 billion yuan ($9.6 billion), saying it doesn't yet have a final figure.
  7. Talbots (NYSE:TLB) will exit its Talbots Kids and Talbots Mens concepts by Sep. after an internal review showed weak potential. TLB expects $100M revenue impact and EPS impact of $0.15-0.18. Quarter-to-date sales are trending below expectations.
  8. WuXi PharmaTech (NYSE:WX) will pay $151M for U.S. medical-research firm Apptec Laboratory Services. The deal will test WX's strategy of renting out inexpensive Chinese scientists to big pharma, because Apptec's American will likely carry a higher price tag.
  9. Only 6,300 people/day tune in to Fox's (NASDAQ:NWS) newly launched business network, according to Nielsen.
  10. Shares of Jackson Hewitt Tax Services (JTX) dropped 23.1% after the IRS said it may ban tax preparers from offering customers refund loans and audit insurance, which may encourage tax fraud. H&R Block (NYSE:HRB) fell 4.6%. JTX notes the proposed rule is in the very early stages, and believes that if it results in regulation, it will not lead to the elimination of refund anticipation loans.
  11. Dutch telecom KPN (KPN) said it is not in merger talks with Spain's Telefonica (NYSE:TEF) dispelling rumors.
  12. Selected Earnings: 1) Monsanto (MON +8.5%): Q1 EPS $0.46 vs. consensus of $0.35. Revenue $2.1B vs. consensus of $1.87B. Sees 2008 EPS $2.50-$2.60 vs. consensus of $2.59. Expects higher free cash flow. 2) Bed Bath & Beyond (BBBY -3.4%, -6.6% AH) Q3 EPS $0.52 in line. Revenue $1.79B vs. consensus of $1.77B. Sees Q4 EPS $0.64-0.67 vs. consensus of $0.78; sees full-year EPS $2.08-$2.11 vs. consensus of $2.20. 3) Global Payments (GPN +1.5% AH) Q2 EPS $0.48 vs. consensus of $0.45. Revenue $304M vs. consensus of $297M. Sees 2008 EPS $1.89-1.96 vs. consensus of $1.94; revenue $1.23B-1.26B vs. consensus of $1.22B. 4) Finish Line (FINL -1.8%, -1.8% AH) Q3 EPS -$0.17 vs. consensus of -$0.15. Revenue $269M vs. consensus of $271M. 5) Q1 EPS $0.22 vs. consensus of $0.21. Revenue of $190M vs. consensus of $191.5M.
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