- Asian markets closed strongly higher Thursday. Nikkei +4.27%. Hang Seng +3.68%. Shanghai +1.37%.
- European markets were up in midday trading. FTSE +0.38%. CAC +0.68%. DAX +0.59.
- U.S. futures are up as of 7:30. Dow +0.25%. S&P +0.29%. Nasdaq +0.44%.
- Bankers turn to Congress. The banking industry is trying to convince the federal government to assume some of the risk of subprime inflicted loans. Proposals include widening the scope of FHA-insured loans and/or making it easier for banks to write off unpaid loans that exceed a property's value without being sued by investors who hold mortgage-backed securities.
- Economy will avoid recession - Paulson. Treasury Secretary Henry Paulson will tell Congress the U.S. economy is sound, despite expectations of significant housing market softness. The economy will continue to grow, albeit at a slower pace. Current initiatives may help mitigate the situation, "and we remain open to other good ideas as we move forward," he will say, according to prepared notes.
- Retail sales lift markets. U.S. equity markets got a surprise lift after January retail sales rose 0.3%, reversing a 0.4% drop in December and shocking economists who had forecast a 0.3% drop. Lagging were housing-related department store sales (-1.1%) and building materials (-1.7%).
- UBS takes massive loss; more to come. Swiss bank UBS (UBS) reported a Q4 loss of 12.45B franc ($3.95B) due to massive losses ($13.7B) on subprime-related securities. UBS prepared investors for "another difficult year" in 2008, but declined to give a clear outlook amid deteriorating economic data. The bank said interest-rate cuts would eventually gain traction, but added "it is uncertain when this will be."
- Comcast beats, initiates dividend, boosts buybacks. Comcast (CMCSA), #1 U.S. cable operator, said Q4 profits jumped 54%. EPS of $0.20 on revenue of $8.01B beat consensus estimates of $0.17 on revenue of $7.9B. Comcast said it will repurchase another $6.9B in shares by end of 2009; initiated an annual dividend of $0.25; and said 2008 free cash flow should grow at least 20%.
- Yahoo shops around. News Corp. (NWS) is in talks with Yahoo (YHOO) to swap ownership of MySpace (at a valuation of more than $10B) and cash for a 20% stake that values YHOO at more than $50B, the objective of which may be to elicit a higher bid from Microsoft (MSFT). Yahoo has also talked with Time Warner's (TWX) AOL unit. Softbank (OTCPK:SFTBF) could potentially derail any deal, but is unlikely to do so.
- Delta/Northwest combo attracts interest. Sources say Air France-KLM will take a stake of unknown size in a combined Delta Air Lines (DAL) and Northwest (NWA) in exchange for a board seat. Delta and Northwest have agreed on major terms, including keeping Delta's name and headquarters, sources say.
- Barclays targets Russian bank. Barclays (BCS) is in advanced talks to buy Russia's Expobank for more than $400M. The move gives the bank an increased foothold in Russia.
- Cuomo takes it to health insurers. New York AG Andrew Cuomo is suing UnitedHealth Group (UNH) and subpoenaing 16 other health insurers including Aetna (AET), Cigna (CI) and Humana (HUM) on charges the firms limited payments to customers by claiming their medical expenses were unusually high. Citigroup analysts noted it is extremely rare to find a material breach among large health plans, and suggested buying health insurers on weakness.
- Nvidia earnings surge 57%, beat Street. Nvidia said Q4 net income jumped 57%. Adjusted EPS of $0.49 on revenue of $1.19B vs. Street estimates of $0.47 on revenue of $1.19 billion. Shares gained 1.4% in extended trading.
- ValueClick beats on revenue; settles probe on the cheap. Internet ad firm ValueClick (VCLK) reported late Wed. Q4 EPS of $0.18, in line with estimates. Revenue of $183.1M was stronger than the $175.77M analysts expected. ValueClick predicted Q1 EPS of $0.15-0.16, lower than consensus of $0.18, and Q1 revenue of $166M-$170M vs. consensus estimates of $175.45M. Shares were up strongly after the company announced it settled an FTC probe with a $2.9M payment, without conceding that it violated any law. (See: ValueClick Q4 2007 Earnings Call Transcript)
- Baidu beats. China's #1 search engine, Baidu.com (BIDU), said Q4 earnings grew 79%. EPS of $0.87 on revenue of $79.3M beat analyst estimates of $0.72 on $77.1M in revenue. Looking ahead, Baidu sees Q1 2008 revenue of $73.1-75.1M, lower than the $77.9M analysts had been looking for. Shares gained almost 5% in AH trading.
- Clear Channel gets all clear. The DoJ finally approved the $19.5B ($39.20/share) sale of Clear Channel Communications (CCU-OLD) to a private equity consortium. The deal, which will allow shareholders to retain a minority stake, is expected to close March 31. Shares traded up 4.4% to $30.80 in extended trading; apparently investors are still concerned the private-equity group may struggle to get the financing needed to close the deal.
- Cephalon takes hit on FTC suit. Shares of Cephalon (CEPH) fell despite strong Q4 earnings after the FTC accused the biotech company of buying off generic competition to its sleep disorder treatment Provigil.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.