Glencore increases bid for Xstrata at the last minute. Glencore (OTC:GLCNF) has raised its offer for Xstrata (OTC:XSRAF) to 3.05 Glencore shares from 2.8 originally in a last-ditch bid to save the $70B+ merger. The new proposal is below the 3.25 shares that major Xstrata investor Qatar Holdings originally demanded, but it has since dropped that requirement. The latest bid came after Glencore postponed today's vote on the deal by Xstrata shareholders just before it was about to take place.
China ramps up the stimulus. China has disclosed more infrastructure investment as it seeks to boost its slowing growth, announcing plans for 13 highway construction projects, nine sewage-treatment plants, seven waterway schemes, and five port and warehouse developments. That's on top of the 25 subway projects China announced earlier this week, and takes total spending to 1T yuan ($158B).
Markets continue to party on ECB's plan to save the euro. U.S. stock futures and EU shares have continued where equity markets left off yesterday, solidly higher after Mario Draghi outlined the ECB's unlimited bond-buying program. Italian and Spanish bond yields have fallen sharply, with the latter dropping well below 6%. China's stimulus plans and surprisingly decent German data (see below) must be helping the party atmosphere too, with China in particular buoying the mood in Asia even further.
Top Stock News
Apple lowers chip bookings from Samsung. Apple (AAPL) has reportedly cut its orders from Samsung (OTC:SSNLF) for DRAM and NAND memory chips for the new iPhone, with beneficiaries including Elpida (OTC:ELPDF), Toshiba (OTC:TOSBF) and SK Hynix (GM:HXSCF). However, Samsung remains the only manufacturer of Apple-designed microchips for the handset, as well as for the iPad. Apple's DRAM and NAND bookings from the Korean giant had been falling before the latest move, which apparently has nothing to do with the companies' global patent war.
Judge OKs antitrust deal over e-book prices. District Judge Denise Cote yesterday approved an antitrust settlement in which major publishers - Lagardere's (OTC:LGDDF) Hachette, CBS's (CBS) Simon & Schuster and News Corp.'s (NWS) HarperCollins - agreed to end alleged price-fixing e-book deals with Apple (AAPL). It's a major win for Amazon (AMZN), while Pearson's (PSO) Penguin, Macmillan and Apple are going to take their chances in a trial.
News Corp. agrees to buy Aussie pay TV company for $2B. News Corp. (NWS) has agreed to acquire Consolidated Media (OTC:CMJFF) for A$1.94B ($2B) as it looks to strengthen its Australian pay TV holdings. However, the deal is far from a shoo-in, as Kerry Stokes' Seven Group, which is considering a counter offer, owns a 25.3% stake in Consolidated. News Corp. needs 75% approval at a meeting next month to win through.
Kraft: Forex to hit Mondelez profit. Kraft (KFT) yesterday warned that forex fluctuations will hurt the 2013 earnings of Mondelez - the international snacks business that it's spinning off in October - by $0.15 a share. So it's nothing to do with the silly name then. Kraft forecast EPS of $1.50-$1.55 for Mondelez, below the predictions of some analysts. Kraft also expects revenue growth of 5%-7%.
SunTrust makes $1.9B gain after selling Coke stake. SunTrust (STI) has sold most of its holding in Coca-Cola Co (KO) after having first invested in the beverages giant in 1919. SunTrust, which generated a $1.9B pretax gain, will use the money to help cover the costs of bad loans.
DOJ resorts to class warfare in legal battle against BP. The Department of Justice has accused BP (BP) of trying to pin the blame for the Deepwater Horizon oil spill "exclusively on blue collar rig workers and other contractor/defendants - but at all cost, not upon BP management." The allegations were revealed yesterday in previously redacted sentences in court documents, and add to Justice's accusations of "gross negligence" on the part of BP and Transocean (RIG).
EMC's Tucci to remain until 2015 at least. EMC (EMC) Chairman and CEO Joe Tucci will stay at the company until February 2015, by which time he's expected to have become just Chairman of EMC and of 80%-owned VMware (VMW). Tucci, 65, recently cancelled plans to retire at an earlier date.
Dell to pay 8 cents a share in first dividend. Dell (DELL) has declared its first-ever quarterly dividend, saying it will pay $0.08 per share. The forward yield is 3.04%. The struggling computer maker said in June that it would start payouts to shareholders.
AIG raises $2B+ in AIA stake sale. AIG (AIG) has raised $2.02B by selling 591.9M shares in AIA Group (OTC:AAIGF) for HK$26.50 ($3.42) each, or a 0.8% premium to the latter's close in Hong Kong yesterday. AIG's stake in AIA fell to 13.69% from 18.6%. One analyst was disappointed with the divestment, saying it was "meaningfully below both our and consensus expectations."
Top Economic & Other News
Unemployment rate seen stuck at 8.3%. Nonfarm payroll data for August is due out this morning, with economists expecting that the number of workers rose by 125,000, although that's down from 163,000 in July and won't be enough to cut the unemployment rate from 8.3% last month. Yesterday's strong ADP report has given some encouragement that today's figures could exceed forecasts, although the ADP has often been a lousy indicator for nonfarm data.
Germany stays resilient. Germany, it seems, isn't going to submit to the ravages of the eurozone debt crisis without a fight. Industrial output rose 1.3% on month in July vs. -0.4% in June and forecasts of +0.2%. The surprisingly good growth added to better-than-expected trade figures, with exports expanding 0.5% vs. forecasts of -0.5% and imports increasing 0.9% vs. consensus of -0.3%.
In Asia, Japan +2.2%. Hong Kong +3.1%. China +3.7%. India +1.9%.
In Europe, at midday, London +0.2%. Paris +1.2%. Frankfurt +0.8%.
Futures at 7:00: Dow +0.3%. S&P +0.4%. Nasdaq +0.35%. Crude +0.2% to $95.74. Gold -0.5% to $1697.10.
Today's economic calendar:
6:00 Monster Employment Index
8:30 Nonfarm payrolls
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