Facebook to debut with record $104B market cap. Facebook (FB) is due to debut on Nasdaq today with a market cap of $104B, the highest ever for a firm at the time of its IPO. Facebook priced its offering at $38 a share, the top end of an increased range, and will raise up to $18.4B for itself and its investors. A thousand paper millionaire employees will also be created. Opinion: Facebook service providers that stand to gain.
Moody's wields the machete to Spanish banks. As expected, Moody's yesterday cut its ratings on 17 Spanish banks by one-to-three notches. The song remains the same: "Adverse operating conditions...Reduced creditworthiness of the Spanish sovereign...Rapid asset-quality deterioration." Santander (STD) and BBVA (BBVA) were cut but remain the most creditworthy of the nation's lenders. Opinion: How Spain can solve its banking crisis.
EU drawing up contingency plan for Greece leaving euro. The European Commission and the ECB are working on "emergency scenarios" in case Greece leaves the euro, Trade Commissioner Karel De Gucht tells Belgium's De Standaard (via Reuters) newspaper in what appears to be the first official acknowledgement of such plans. Greece may still stay in the euro, though, as a new poll shows the pro-austerity parties being able to form a government. Opinion: Greek index collapse worse than 1929 Dow crash.
Top Stock News
JPM's CIO holds $100B of risky bonds. JPMorgan's (JPM) Chief Investment Office has built up over $100B of positions in complex, risky bonds and structured products, the FT reports, with the CIO's "non-vanilla" portfolio now over $150B. The WSJ, meanwhile, reveals that the CIO's risk manager, who was appointed in February, had little relevant experience at the time and is the brother-in-law of another JPM executive. Opinion: JPMorgan: Understanding the hedge that wasn't.
H-P may slash 30,000 jobs in major overhaul. Hewlett-Packard (HPQ) intends to cut 25,000-30,000 jobs, reports say, or up to 10% of its workforce. H-P's aim is to spend the savings on making the salesforce more efficient and on creating new products, the NYT says. The company is expected to unveil the final plans on Wednesday with its FQ2 earnings report. Opinion: HP climbs on layoff rumors.
Salesforce tops the Street and forecasts more to come. Salesforce.com's (CRM) shares were +7.1% premarket after its FQ1 earnings beat analyst forecasts and the company gave guidance that was in line or above estimates. FQ1 EPS came in at $0.37 as revenue jumped 38% to $695.5M. On a positive earnings call, Salesforce said its FQ2 pipeline is "unlike anything seen before in size (or) scope." Opinion: Salesforce shares could climb today.
Smartphone demand helps Applied Materials. Applied Materials' (AMAT) FQ2 net profit slumped 41% to $289M as revenue declined 11.3% to $2.54B, although the company beat consensus for sales and EPS. While demand for manufacturing tools from memory-chip manufacturers remains soft, Applied is benefiting from the surge in sales of smartphones, as foundries that produce the necessary components increase their orders for the equipment needed to make the chips. Opinion: Applied Materials looks like good value.
HSBC could dump U.K. ops. HSBC (HBC) CEO Stuart Gulliver has told analysts that the bank could sell its U.K. retail banking business if new regulations prove too demanding, the Times newspaper reports (via MarketWatch). Selling the operations, which have 16M customers, would give HSBC one less reason to keep its head office in Britain, as the U.K.'s bank levy already makes relocating attractive. Earnings call transcript: HSBC's Gulliver discusses company outlook.
Berkshire wanted to acquire ResCap. Warren Buffett tried to buy ResCap from Ally Financial before the home-lending unit was put into bankruptcy, Bloomberg reports, as Berkshire Hathaway (BRK.A) had unsecured debt in the unit. Under the deal, Berkshire would have taken on potential liabilities such as increasing litigation costs while paying almost nothing upfront for ResCap's assets. Opinion: One-stock portfolio diversification with Berkshire.
Groupon pre-earnings share jump probed. Finra is investigating trading in Groupon (GRPN) after the firm's share price spiked hours before a positive earnings announcement on Monday, the WSJ reports. Groupon's shares climbed 18.5% on four times the average volume during regular trading, and then continued to rise post-market after the earnings were released. Opinion: Why Groupon's stock may have spiked pre-earnings.
Kinder Morgan to join S&P 500 Kinder Morgan (KMI) will replace El Paso (EP) in the S&P 500 index after the close of trading on Thursday next week. Kinder Morgan is acquiring EP in a deal that is expected to be completed near that date. Opinion: Three ways to benefit from the El Paso merger.
Top Economic & Other News
Major U.S. companies hold $588B overseas. Big U.S. multinationals are stashing at least 60% of their cash offshore - around $588B - with some keeping nearly all of their money in foreign accounts, a JPMorgan study shows. Apple (AAPL) has the most at $74B, or 67% of its holdings; as a percentage of total cash, Microsoft (MSFT), Cisco (CSCO) and H-P (HPQ) hold 89% or more of their capital abroad. Discussion: Judging companies for tax avoidance.
Property sector seen hitting Chinese growth. China's Q2 GDP could slow to 7.5% because of property sector curbs and dampened external demand, according to the State Information Center, a Chinese government think-tank. That would be in line with China's official target of 7.5% for the year, but would raise concerns about the sustainability of China's job creation. Opinion: China needs to rebalance.
In Asia, Japan -3%. Hong Kong -1.3%. China -1.4%. India +0.5%.
In Europe, at midday, London -0.8%. Paris +0.6%. Frankfurt -0.1%.
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.05% to $92.61. Gold +0.95% to $1589.80.
Today's economic calendar:
No events scheduled.
Notable earnings before today's open: ANN, DCI, FL