Eurozone agrees to hasten bank aid to Spain. Eurozone finance ministers yesterday agreed to speed up the provision of up to €100B ($123B) in aid for Spain's banks, with an initial €30B to be lent by the end of July. The goal is to use the bloc's rescue fund to recapitalize Spanish banks directly rather than saddling the government with extra debt. Ministers also agreed to give Spain an additional year to bring its budget deficit back in line. Yields on the country's 10-year bonds have plunged in relief.
Samsung, TSMC could add to Intel's $4.1B investment in ASML. Intel (NASDAQ:INTC) is investing $4.1B in chip-equipment maker ASML (NASDAQ:ASML), agreeing to buy a 10% stake for $2.1B and pledging to eventually acquire another 5%. Intel will also provide $1B to ASML's R&D programs for cutting-edge technologies such as 450 mm wafers and EUV lithography. ASML has invited major customers TSMC, the world's top contract chip maker, and Samsung (OTC:SSNLF) to co-invest as well.
Patriot Coal files for chapter 11. Patriot Coal (PCX) has become one of the first victims of the fracking revolution, yesterday filing for bankruptcy protection. The company expects to continue mining operations and customer shipments in an ordinary fashion as it goes through reorganization, and has obtained a commitment for $802M in DIP financing. Beaten up coal stocks got beaten up some more on Patriot's woes, with the sector ETF KOL falling 4.1%.
Top Stock News
Falling prices continue to hurt Alcoa. Alcoa (NYSE:AA) kicked off Q2 earnings season yesterday by reporting that EPS fell to $0.06 from $0.32 a year ago, which was in line with reduced consensus, while revenue dropped 9.4% to $5.96B but beat expectations. Earnings were hurt by a fall in aluminum prices to near two-year lows, although Alcoa maintained its forecast for a global aluminum supply deficit of 7% in 2012.
Profit warning sends AMD shares into tailspin. AMD (NASDAQ:AMD) shares were -9.25% premarket after the company yesterday warned that it expects Q2 revenue to fall 11% on quarter, well below a guidance range of plus or minus 3%. AMD blamed weaker-than-expected distributor sales in China and Europe, and the impact of poor consumer spending, on sales to OEMs. Archrival Intel (INTC) has already suffered estimate cuts, while downbeat commentary about PC demand has been easy to find.
Duke's Rogers to be quizzed over CEO coup. Duke Energy (NYSE:DUK) CEO Jim Rogers is today due to appear before a hearing of the North Carolina Utilities Commission about the ouster of Bill Johnson just hours after the closure of Duke's acquisition of Progress Energy. The commission, which has said it might not have authorized the deal had it known about the "management structure," has the power to rescind its approval, although this is seen as unlikely.
Elpida creditors to oppose Micron takeover. A group of Elpida (OTC:ELPDF) bondholders plan to vote against Micron's (NASDAQ:MU) ~$750M takeover of the bankrupt Japanese chipmaker and have told a Tokyo district court they'll put forward an alternative proposal. It's unclear if the unnamed bondholders have enough votes to hold up the deal.
Diamond to give up £20M of bonuses. Former Barclays (NYSE:BCS) CEO Bob Diamond will voluntarily forgo any deferred bonuses, worth a maximum of around £20M ($31M), company Chairman Marcus Agius has told a U.K. parliamentary panel, adding that Bank of England Governor Mervyn King forced Diamond to quit. Agius also acknowledged the bank's "strained relationship" with the regulator, the FSA.
Google to escape with light fine for privacy breaches. Google (NASDAQ:GOOG) is nearing a settlement with the FTC, the WSJ reports, and will reportedly pay $22.5M over charges it bypassed the privacy settings of millions of Apple users. Though not much of a financial hit, it would be the largest penalty ever levied on a single company by the FTC and could further undermine users' trust in Google.
Samsung not as cool as Apple - Judge. Samsung (OTC:SSNLF) has won a court fight against Apple (NASDAQ:AAPL) and got officially insulted at the same time. U.K. Judge Colin Birss has ruled that the design of Galaxy tablets doesn't infringe on that of the iPad, and that consumers are unlikely to confuse the two as the Samsung devices "do not have the same understated and extreme simplicity which is possessed by the Apple design...They are not as cool.
Top Economic & Other News
Norway orders oil strikers back to work in the nick of time. Oil prices fell after Norway's government last night ordered striking offshore workers to return to their jobs just minutes before their employers had planned to halt all oil and gas production, which would have cut off over 2M barrels a day. The government sent the dispute over wages and pensions to binding arbitration.
Corn surges as drought continues. Corn futures for July delivery climbed 4% to $7.7525 a bushel yesterday, increasing the drought-induced surge of the last three weeks to 29% and bringing the price close to the all-time record of $7.9975. With little rainfall expected in the corn belt in the next two weeks, the gains could continue and soon start affecting food prices.
Chinese imports slow sharply. Chinese import growth decelerated sharply in June to 6.3% on year, well below forecasts of +12.7%. However, export growth outpaced expectations at 11.3% vs. a consensus of 9.9%. Economists say the import slowdown is temporary, with recent policy easing likely to drive a Q4 pick-up.
Schaeuble cautions court over delay to ESM approval. German Finance Minister Wolfgang Schaeuble has told the country's Constitutional Court that postponing the authorization of the eurozone's ESM bailout fund could exacerbate the turmoil in the financial markets. Schaeuble was speaking on the first day of a hearing about whether to delay Germany's participation in the fund and the fiscal compact while the court decides about their legality.
OECD warns on unemployment. Unemployment in advanced economies will remain high until at least the end of 2013, the OECD has cautioned. The weakest economic recovery of the past four decades means the jobless rate at the end of next year will probably only dip to 7.7% from May's 7.9%, leaving 48M people out of work.
In Asia, Japan -0.4%. Hong Kong -0.2%. China -0.3%. India +1.3%.
In Europe, at midday, London +0.9%. Paris +1.2%. Frankfurt +1.5%.
Futures at 7:00: Dow +0.5%. S&P +0.4%. Nasdaq +0.4%. Crude -0.5% to $85.80. Gold +0.5% to $1596.60.
Today's economic calendar:
6:05 Fed's Bullard: 'The Eurozone with Entry and Exit'
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 IBD/TIPP Economic Optimism
1:00 PM Results of $32B, 3-Year Note Auction
Notable earnings after today's close: ADTN
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