Knight Capital teeters on the edge. The bloodbath at Knight Capital (KCG) has continued pre-market, with shares -9.7% following a plunge of 63% yesterday, on fears that the market maker could go bankrupt after it took a $440M loss on a tech-induced trading disaster on Wednesday. Knight is scrambling around for an emergency loan or a buyer, although prospective suitor Virtu Financial is apparently not interested.
BHP writes down gas, nickel assets by $3.3B. BHP Billiton (BHP) has followed BP (BP) and Encana (ECA) and written down the value of the U.S. shale gas assets that it bought last year from Chesapeake (CHK) by $2.84B, due to low gas prices. BHP is also taking a charge of $450M on the value of its Australian nickel assets for a combined writedown of $3.29B.
Vivendi to back off from Activision Blizzard sale. Vivendi (VIVEF.PK) looks set to abandon plans for a quick sale of its 60% stake in Activision Blizzard (ATVI) after receiving no worthwhile offers for the computer gaming company, whose $13B value is too high for potential suitors, the FT reports. The speculation follows Activision's Q2 earnings beat yesterday. Vivendi is carrying out a broad review of its businesses and could sell Brazilian broadband operator GVT.
Top Stock News
LinkedIn provides antidote to Facebook carnage. LinkedIn (LNKD) shares jumped 8% premarket after the company matched or beat consensus, and increased its Q3 and full year guidance to above Street expectations. While net profit fell 38% to $2.8M due to increasing costs and investments, revenue surged 89% to $228.2M and adjusted EPS rose 60% to $0.16. Sales from LinkedIn's Hiring Solutions more than doubled and were 53% of the total, evidence that the company is quickly taking share from Monster Worldwide (MWW).
Toyota roars back. Toyota (TM) achieved its highest quarterly profit in four years as FQ1 earnings climbed to ¥290.3B ($3.7B) from ¥1.16B a year earlier, when the earthquake wreaked its havoc. The figure beat consensus, as did a revenue increase of 60% to ¥5.5T, with earnings boosted by sales of the Prius in Japan and the Camry in the U.S. Toyota raised its calendar 2012 outlook for group sales to 9.76M vehicles from 9.58M.
McGraw-Hill takes offers for $3B education ops. McGraw-Hill (MHP) has received bids for its education unit from Bain, Thomas H. Lee Partners, Apollo Global Management (APO) and Cengage Learning, Reuters reports. The offers could value the business, the world's second-largest education company by sales, at around $3B. McGraw-Hill said last week it was evaluating a sale as an alternative to a spin-off.
Boeing set to share $1B to develop space taxis. Boeing (BA) and privately held Space Exploration Technologies are today expected to win the majority of up to $1B in federal money for the development of "space taxis," which are commercially owned spacecraft that will replace the now retired shuttle to transport crews into orbit. Until U.S. manned space operations recommence in 2017, NASA is relying on the Russians.
London whale encouraged to fudge trade valuations. Former JPMorgan (JPM) executive Javier Martin-Artajo repeatedly encouraged "London whale" Bruno Iksil to report higher valuations on some trades than they were likely to have received in the market at the time, the WSJ reports, which is why the mounting losses took so long to be discovered. However, the trader's valuations were within a wide band set by JPM's oversight group, so it approved them.
BofA fully ensnared in Libor affair. Bank of America (BAC) has received requests for information from U.S. and U.K. authorities about the setting of Libor and other interbank rates. The firm is also a defendant, along with other banks, in investor lawsuits over the affair. Meanwhile, BofA will take a Q3 charge of $800M related to a fall in the U.K. tax rate, and it will contribute $738M to the credit-card price-fixing settlement in the U.S.
AIG net profit climbs 27%. AIG's (AIG) net profit jumped 27% to $2.3B in Q2, while its operating income of $1.06 a share was nearly double consensus, with earnings boosted by stronger performances at its insurance operations. CEO Robert Benmosche said the company, which has been stockpiling cash, is "close to achieving our goal of returning to America all that it provided to AIG during the crisis, plus a profit." Shares were +1.5% premarket.
RBS earnings hit by £310M in provisions for misdeeds. RBS's (RBS) Q2 net loss narrowed to £466M from £897M a year earlier, while its operating profit dropped 22% to £650M, which was in line with forecasts. RBS has set aside £310M to settle claims for various misdeeds, including its IT systems failure in June, although the bank can't yet say how much the Libor scandal is going to cost. Shares were +4.5% midday in London.
Siemens begins €3B repurchase scheme. Siemens (SI) has started a €3B stock buyback, as approved at its annual meeting in January 2011, with the conglomerate planning to use the program to reduce stock, for employee compensation, and for convertible and warrant bonds. Siemens is also canceling 33M treasury shares worth €2.23B, based on yesterday's closing price.
Top Economic & Other News
Unemployment seen steady at 8.2%. Unemployment figures are due out this morning, with economists estimating that nonfarm payrolls increased by 100,000 workers in July after a rise of 80,000 in June, while the jobless rate stayed at 8.2% for the third month in a row. However, there's a good chance that the economy lost over 1M jobs last month, just as it does every July, but that won't show up in the headline figure, due to seasonal adjustments.
In Asia, Japan -1.1%. Hong Kong -0.1%. China +1%. India -0.1%.
In Europe, at midday, London +1.6%. Paris +2.6%. Frankfurt +2.4%.
Futures at 7:00: Dow +0.9%. S&P +1%. Nasdaq +1%. Crude +1.3% to $88.23. Gold +0.5% to $1599.20.
Today's economic calendar:
6:00 Monster Employment Index
8:30 Nonfarm payrolls
10:00 ISM Non-Manufacturing Index
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