Moody's warns AAA eurozone countries. Moody's has lowered its outlook on Germany, Holland, and Luxembourg to Negative, while affirming Finland's Stable outlook and AAA credit rating. The agency cited the usual fears related to the eurozone's debt crisis, along with the "increasing likelihood that greater collective support" will be needed for Spain and Italy. Germany hit back, pointing out that it has exceptionally low borrowing costs.
Texas Instruments warns on outlook after Q2 profit slumps. Texas Instruments' (NYSE:TXN) profit plunged 34% to $446M in Q2 as revenue slid 4% to $3.3B, while adjusted EPS of $0.44 beat forecasts of $0.41. TI provided Q3 EPS and sales guidance that was below consensus, warning that economic conditions are causing customers and distributors to become "increasingly cautious" in placing new orders.
Rosneft to start talks with BP over TNK-BP stake. Rosneft today said it will begin discussions with BP (NYSE:BP) about acquiring the latter's 50% stake in its TNK-BP Russian joint venture. Last week, AAR, which owns the other 50%, said it is interested in acquiring half of BP's holding and is willing to pay $10B. BP and AAR are looking to extricate themselves from the JV following a breakdown in their relationship.
Top Stock News
Cisco to cut another 1,300 jobs. Cisco (NASDAQ:CSCO) intends to lay off another 1,300 workers, or 2% of its workforce, Bloomberg reports. The cuts follow last year's huge restructuring in which Cisco slashed 6,500 jobs. Cisco critic Brad Reese has passed on an unconfirmed rumor that the company's WAN optimization hardware team was hit; if true, that would be a positive for market leader Riverbed (NASDAQ:RVBD). Meanwhile, the EU has approved Cisco's $5B acquisition of NDS.
VMware to buy software start-up for $1.26B. VMware (NYSE:VMW) has agreed to acquire Nicira, a start-up with barely any revenues, for $1.26B. Nicira provides software to help networks run more efficiently, and its purchase will help bolster VMware's efforts to be a top IT infrastructure-management vendor. The Street doesn't like the price, though, and VMware's stock fell 3.7% post-market. The company also confirmed Q2 results, with Q2 EPS at $0.68 and revenue increasing 22% to $1.12B.
SAP grows in "flat markets". SAP's (NYSE:SAP) Q2 net profit rose to €661M from €587M a year earlier and beat estimates, while revenue jumped 18.1% to €3.9B. "We are now taking very strong market share," said co-CEO Jim Hagemann Snabe, with Q2 sales growth exceeding 10% in "flat markets." SAP confirmed its 2012 forecast for software and services revenue to increase 10-12%, and for operating profit of €5.05B-5.25B.
P-E firms eye $3.5B+ United Tech unit. Carlyle Group (NASDAQ:CG) and BC Partners are in joint talks to buy United Tech's (NYSE:UTX) industrial businesses, Reuters reports. The discussions, already in an advanced stage, could culminate in a deal worth more than $3.5B. There's an outside chance United Tech could turn to other suitors such as TPG Capital.
Apple's profit seen growing, Netflix's seen falling. Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX) are due to report earnings after the bell, with analysts expecting that Apple's FQ3 EPS grew to $10.36 from $7.79 a year ago, while revenue surged 30% to $37.18B. In contrast, Netflix's Q2 EPS is seen falling to $0.05 from $1.26, although revenue is estimated to have risen 12.7% to $888.9M.
Top Economic & Other News
Home prices register first on-year rise since 2007. The Zillow Home Value Index increased 0.2% on year to $149,300 in Q2, the first such rise since 2007, boosted by increasing demand, record low interest rates and a tight supply of properties for sale. The "solid" Q2 in the midst of economic headwinds "indicates the housing market has some organic fundamental strength on its own," Zillow said.
Contraction in eurozone manufacturing accelerates. Eurozone manufacturing PMI dipped to an initial 44.1 in July from 45.1 in June, touching a 37-month low, with contraction in Germany also accelerating. The downturn in the eurozone shows no signs of letting up, Markit said, and "is consistent with GDP falling at a quarterly rate of around 0.6%, which is similar to the rate of decline we expect to see for the second quarter."
Chinese PMI improves. The Chinese HSBC Flash PMI for July rose to 49.5 from June's 48.2, and touched the highest level since February. "Earlier easing measures are starting to work. That said, the below-50 July reading implied demand still remaining weak and employment under increasing pressure. This calls for more easing efforts to support growth and jobs," HSBC said.
Irish police charge AIB execs. Irish police today arrested former Anglo Irish Bank CEO Sean Fitzpatrick and charged him with 16 offenses as part of a probe into alleged fraud. Fitzpatrick's indictment follows that of two former senior executives of the bank yesterday, whose collapse cost taxpayers €30B and was central to Ireland's banking crisis. The charges are the first to be brought well over three years after Anglo Irish's nationalization.
In Asia, Japan -0.2%. Hong Kong -0.8%. China +0.2%. India +0.2%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt -0.1%.
Futures at 7:00: Dow -0.1%. S&P -0.2%. Nasdaq -0.3%. Crude -0.1% to $88.02. Gold -0.3% to $1572.60.
Today's economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
8:58 PMI Manufacturing Index
10:00 FHFA House Price Index
10:00 Richmond Fed Mfg.
Notable earnings after today's close: AAPL, ACC, ACE, AFL, ALTR, BRCM, CHRW, COG, CPWR, CTRP, EW, FTI, HTS, IGT, JNPR, LLTC, MTW, NBR, NFLX, NFX, NSC, PLCM, QCOR, RFMD, RHI, RRC, RVBD, SU, TPX, TRIP, TSS
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