Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
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.

Top Stories
Cnooc to buy Canada's Nexen for $15.1B. Cnooc (NYSE:CEO) has agreed to acquire Canada's Nexen (NXY) for $15.1B in a deal that enhances Cnooc's presence in Nigeria and the Gulf of Mexico, as well as in Canada. The $27.50-a-share offer represents a 61% premium to Nexen's closing price on Friday, and its stock was +52% premarket. Nexen's debt of $4.3B will remain outstanding.

Spanish GDP estimate sends bond yields soaring. Spanish GDP fell a quarterly 0.4% in Q2, the Bank of Spain estimated in its monthly bulletin. That's down from -0.3% in Q1, and the third quarter in a row of contraction as the economy gets dragged down by massive budget cuts. "Domestic demand fell more sharply than in the prior quarter," although exports made a "moderate recovery," the Bank said. Yields on 10-year bonds were +22 bps at 7.49% at midday in Spain.

Genesee & Wyoming to purchase RailAmerica for $2B. Genesee & Wyoming (NYSE:GWR) is buying RailAmerica (NYSE:RA) for $2B, with the $27.50-a-share representing a 10.6% premium to the latter's Friday close, and a 27.6% premium to its close on May 21. That was the last trading day before RailAmerica said it would explore strategic alternatives. The company's shares were +5.8% premarket.

Top Stock News
Philips rises after swinging to net profit. Philips (NYSE:PHG) beat forecasts as it swung to a Q2 net profit of €167M from a loss of €1.35B a year earlier, while revenue climbed 13% to €5.9B. Philips' improvement was helped by €1.4B in write-downs last year, costs cuts, and sales improving at all its units, especially in the U.S. and emerging markets. The conglomerate is on track to meet its 2013 targets and expressed confidence about China. Shares were +6.3% premarket.

NRG Energy to buy GenOn Energy in $1.7B deal. NRG Energy (NYSE:NRG) has agreed to acquire GenOn Energy (NYSE:GEN) for $1.7B in stock, creating one of the largest independent electricity utilities in the U.S. NRG will pay 0.1216 share for each GenOn share, representing a 20% premium to the latter's closing price on Friday. The deal is the latest in the power sector as companies attempt to cope with falling prices.

Authorities close in on Libor traders. U.S. and European authorities are near to arresting traders and charging them with collaborating in the manipulation of the Libor rate, Reuters reports, with prosecutors in Washington notifying some of the suspects' lawyers that criminal charges could be imminent.

ITC deals further blow to Kodak. The ITC has dismissed Eastman Kodak's (EKDKQ.PK) infringement suit against Apple (NASDAQ:AAPL) and RIM (RIMM), affirming the May decision of an administrative law judge. Kodak said it will appeal the ruling, which relates to an image-preview patent for digital cameras. The decision deals a blow to Kodak's efforts to fetch a huge selling price for its patent portfolio as it looks to exit bankruptcy protection.

Murdoch does a bit of housecleaning. Rupert Murdoch has resigned from the boards of a number of News Corp. (NASDAQ:NWS) units, including News International, whose British newspapers have been embroiled in a long-running hacking scandal. The "corporate housecleaning exercise" comes ahead of the proposed split of News Corp. into two, and could reignite speculation that the company may sell the papers.

Batman film earns $161M despite shooting. Warner Bros.' (NYSE:TWX) "The Dark Knight Rises" generated $161M at the weekend despite the horrific shooting in Denver on Friday morning, the WSJ reports, citing executives from rival studios. The amount is below the $185M the Batman film was expected earn prior to the terrible event, but still puts it among the best opening weekends of all time.

Top Economic & Other News
Greece looks to cut even further. Greece is seeking billions of euros of additional budget cuts ahead of the return of inspectors from the country's Troika overlords this week. Troika officials have hinted they may ask for sharper cuts than the Greek government had originally planned for 2013 and 2014.

Spain's debt-to-GDP ratio not all that bad. The eurozone's government debt-to-GDP ratio stood at 88.2% at the end of Q1, up from 87.3% at the end of Q4. For Spain, the ratio was 72.1% vs. 68.5% previously, which looks pretty healthy compared with Greece's 132.4%, Italy's 123.3%, Portugal's 111.7% and Ireland's 108.5%. At the other end of the spectrum were Estonia (6.6%), Bulgaria (16.7%) and Luxembourg (20.9%).

Up to $32T of assets in offshore tax havens. Individuals and their families have squirreled away $21-32T of financial assets in offshore tax havens, a study conducted for pressure group Tax Justice Network shows. That represents up to $280B in lost global income tax.

Five banks shut on Friday. Regulators closed two banks in Georgia on Friday, as well as one each in Illinois, Kansas and Florida. That brings the total for the year to 38.

What to read next
Fly High With Boeing This Earnings Season
Front Running QE3
The Obesity Epidemic: No Effect On McDonald's Stock

Today's Markets:
In Asia, Japan -1.9%. Hong Kong -3.0%. China -1.3%. India -1.6%.
In Europe, at midday, London -1.7%. Paris -2.1%. Frankfurt -1.7%.
Futures at 7:00: Dow -1.1%. S&P -1%. Nasdaq -1.2%. Crude -2.8% to $89.25. Gold -0.8% to $1570.70.

Today's economic calendar:
8:30 Chicago Fed National Activity Index

Notable earnings before today's open: CCE, ETN, HAL, HAS, MCD, PHG

Notable earnings after today's close: BIDU, CE, CLGX, FNF, HLX, HMA, STLD, STM, TXN, VMW, WIT

See full real-time earnings coverage »

Wall Street Breakfast is sent out by email for free -- Get it now »