Top Stories
Walgreen to buy 45% in Alliance Boots for $6.7B. Walgreen (WAG) has agreed to acquire a 45% holding in health and beauty retailer Alliance Boots for $6.7B, and has an option to purchase the rest of the company. Walgreen also said that FQ3 EPS came in at $0.62, which missed consensus by $0.01, while revenue fell 3.4% to $17.8B but was in line. The drugstore chain is increasing its dividend by 22.2% to $0.275 a share, its 37th consecutive year of dividend hikes.
Oracle surprises with early earnings beat. Oracle (ORCL) yesterday surprised everybody with its FQ4 results, not just because they beat consensus but also because the company released them three days early. Net income rose 8% to $3.45B, EPS of $0.82 beat by $0.04 and revenue edged up 1% to $11B. Oracle also announced a new $10B stock buyback plan, while there were unconfirmed reports that North American sales chief Keith Block is leaving the company.
Spanish yields hit 15-year record. Yields soared in Spain's latest bond auction, in which it sold €3.04B in 12- and 18-month debt. The average rate on the 1-year paper spiked to 5.07% from 2.99% at the previous sale in May, while the yield on the 18-month jumped to 5.11% from 3.3%. The rate on the 12-month is the highest since 1997. The sale came amid a report that a second, more detailed audit of Spanish banks has been delayed until September from July.
Top Stock News
Microsoft joins the tablet wars. Microsoft (MSFT) yesterday unveiled its plans for taking the fight back to Apple (AAPL) and Google (GOOG) with the introduction of the Surface Windows 8 tablet. The device is only 9.3mm thick, weighs 1.5 lbs, features a 10.6" display, and comes with Office built-in. Microsoft has also developed a cover that doubles as a keyboard with a touchpad, thereby allowing the Surface to shift into PC mode.
Coca-Cola mulls what to do with $13B cash pile. Coca-Cola (KO) CEO Muhtar Kent said the company will start tapping into its $13B stockpile of cash, with capital expenditures at the top of the list. Strategic bolt-on acquisitions could be in the offing and investors could also see a higher dividend payout along with share buybacks.
United Tech looks to sell $1B Pratt & Whitney assets. United Technologies (UTX) is looking to sell its Pratt & Whitney power generation assets in a deal that could fetch around $1B, Reuters reports. The potential sale is part of United Tech's effort to focus more on its aerospace and propulsion segments and move away from non-core businesses. The sale could occur after the company closes its planned $16.5B purchase of Goodrich (GR).
Mr Dimon goes to Washington - again. Jamie Dimon (JPM) heads to Congress once more, this time to testify in front of the House Financial Services Committee. Dimon's prepared testimony (.pdf) is nearly identical to his remarks in the Senate, but less-friendly lawmakers looking to make some waves may try to trip him up in the Q&A.
Top Economic & Other News
German court criticizes government over ESM. Germany's constitutional court has ruled that the government failed to inform parliament properly on the configuration of the European Stability Mechanism. The ESM is supposed to come into effect in July but hasn't been ratified yet by many eurozone states' parliaments. While the news sent shares and the euro falling, experts said it shouldn't hamper Gemany's ability to react to the debt crisis.
Hopes for Fed meeting keeping stocks afloat. With the Greek elections behind us and low expectations for the G-20 summit in Mexico, the start of the FOMC's two-day meeting today is all that's keeping stocks afloat right now, observes Miller Tabak's Peter Boockvar. "Fundamentally, the market belongs much lower," Boockvar says, but everybody thinks the Fed "will pull something else out of its hat."
BRICs pledge billions to IMF. China has pledged around $43B to the IMF, while India, Russia, Brazil and Mexico will commit around $10B each, pushing the IMF's war chest pledges to roughly $456B.
Working Americans struggle to stay on top of things. With median hourly wages lower in 2011 than 10 years earlier, many are finding that their salaries can't keep up with expenses, especially for those whose hours have been cut as well. The NYT collects anecdotal evidence of how Americans are suffering, whether it's people who want to work longer hours, or who can't find jobs related to their degrees.
Greece hopes for breathing room; Germany may agree. Greece's new government, expected to be announced within days, will need some more "breathing room" from its international creditors, said Kyriakos Mitsotakis from the victorious New Democracy party. "Giving a very sick patient nothing but the same medicine when this has not had the required result would be madness." Crazy as it sounds, Germany indicated yesterday that it might be on board with that.
Companies put spending on hold ahead of "fiscal cliff." Firms have started to delay recruitment and investment on fears that Congress won't act to stop the $600B of automatic spending cuts and tax hikes that are due in January. "You don't board up the windows when the hurricane is there, you board up the windows in anticipation," said Bank of America economist Michael Hanson.
Editors' Picks
It Isn't How Much You Make - It's How Much You Keep
Micron Is Misunderstood And Undervalued
Splash Into Summer With This High Yielding REIT
Today's Markets:
In Asia, Japan -0.8%. Hong Kong -0.1%. China -0.7%. India +0.9%.
In Europe, at midday, London +0.9%. Paris +0.3%. Frankfurt +0.5%.
Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.4%. Crude +0.2% to $83.40. Gold +0.3% to $1631.30.
Today's economic calendar:
FOMC meeting begins
7:45 ICSC Retail Store Sales
8:30 Housing Starts
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
Notable earnings before today's open: DFS, FDX, JEF
Notable earnings after today's close: ADBE, JBL
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »
