Rosneft agrees to acquire oligarch's TNK-BP stake for $28B. The soap opera that is TNK-BP has taken another twist after the four Russia-based billionaires who control 50% of the joint venture agreed to sell their stake to Rosneft for $28B, Sky News reports. The amount is higher than would be expected and the deal comes as BP (NYSE:BP) looks to sell its 50% in TNK-BP, with a deadline for bids set for tomorrow morning. BP's shares were +2.6% premarket.
BofA net profit plummets to $340M. Bank of America's (NYSE:BAC) net profit plunged to $340M from $6.2B a year earlier, and while EPS of zero beat forecasts, revenue fell to $20.4B from $28.5B and missed expectations. Q3 income was hurt by $1.9B of debit valuation adjustments and fair value option adjustments, $1.6B for total litigation costs, and a charge of $800M related to BofA's U.K. tax affairs. Shares were little changed premarket.
IBM Q3 hit by "falloff in demand" in North America. IBM's (NYSE:IBM) shares fell 3.8% premarket after the company's Q3 revenue dropped 5% to $24.75B and missed expectations, although EPS of $3.62 was in line and net profit was flat at $3.8B. IBM's overall sales were hurt by forex fluctuations in EMEA and a weak performance in hardware in North America, where there was a "falloff in demand," which also occurred in growth markets.
Top Stock News
Intel tops forecasts despite profit falling 14%. Intel's Q3 net profit fell 14% to $2.97B but EPS of $0.60 beat forecasts, as did revenue of $13.46B despite being flat. Intel forecast Q4 sales of $13.1B-$14.1B vs. consensus of $13.8B. Revenues at the company's PC division declined 8%, and the firm's inventory and capex guidance suggests it isn't counting on demand rebounding strongly anytime soon. Just as concerning is that enterprise-server demand has softened, although cloud sales were strong. Shares were -2.9% premarket.
ASML to acquire Cymer for $2.5B. Chip-equipment maker ASML (NASDAQ:ASML) has agreed to acquire Cymer (NASDAQ:CYMI) for €1.95B ($2.5B) in cash and stock. The deal will enable ASML to speed up the development of extreme ultraviolet (EUV) semiconductor lithography technology, which is critical for manufacturing the next generation of microchips. Meanwhile, ASML's Q3 net profit fell to €274.7M from €355.2M a year earlier and was below consensus of €278M. Revenues fell to €1.23B from €1.46B but were in line.
Visa set to name new CEO to replace Joseph Saunders. Visa (NYSE:V) could name a new CEO this month to replace 66-year-old Joseph Saunders, who's expected to retire when his contract ends in March, the WSJ reports. The leading candidate is former Visa board member Charles Scharf, who managed JPMorgan's (NYSE:JPM) retail-banking operations for seven years. The top internal contender is Elizabeth Buse, who runs much of Visa's foreign business.
RBS to leave "toxic assets" insurance scheme. As expected, RBS (NYSE:RBS) will leave the U.K. government's Asset Protection Scheme tomorrow. The APS is an insurance program covering the bank's "toxic assets" - many of which have been sold or written off - and has cost it £2.5B in premiums since it joined in 2009; RBS's departure will save it £800M a year and is seen as a first step towards its re-privatization. Shares were +3% premarket.
Fiddler on the bourse as Violin Memory eyes $2B IPO. Violin Memory, a developer of flash memory for data centers, confidentially filed for an IPO last month under the JOBS Act, Bloomberg reports. While Violin hasn't yet decided on timing and pricing, it is considering a market cap of $2B. Earlier this year, the company raised $50M in private funding at a valuation of over $800M; its customers include Cisco, Oracle and VMware.
Postal Service hits debt ceiling. The Postal Service reached its $15B borrowing limit for the first time last month and now has to use the novel concept of relying on its own income to fund its operations. However, the USPS still had enough money to meet a $1.4B payment for workers compensation that was due on Monday.
Top Economic & Other News
Germany lowers 2013 outlook. Germany has cut its 2013 GDP growth prediction to 1% from a previous forecast of 1.6%, but said that growth this year will be 0.8% rather than 0.7%. However, both new figures would represent a slowdown from 4.2% in 2010 and 3% in 2011. "Germany is navigating stormy waters because of the European sovereign debt crisis and an economic weakening in emerging nations in Asia and Latin America," Economy Minister Philipp Roesler said.
Spain escapes Moody's downgrade. Moody's has affirmed Spain's credit at Baa3 with a negative outlook. "The risk of the Spanish sovereign losing market access has been materially reduced by the willingness of the ECB to undertake outright purchases of Spanish government bonds," the ratings agency explained. With Spain edging towards a credit-line bailout, Moody's lack of action helped send the country's 10-year bond yield 29 bps lower to 5.52%.
BOE split on whether it might need to print more money. The Bank of England's Monetary Policy Committee voted unanimously at a meeting earlier this month to leave its key lending rate unchanged at 0.5% and to maintain the size of its asset-purchase program at £375B, the minutes show. However, officials were split on whether more QE is needed, with some questioning the impact on the wider economy.
In Asia, Japan +1.2% to 8807. Hong Kong +1% to 21417. China +0.3% to 2106. India +0.2% to 18611.
In Europe, at midday, London +0.5%. Paris +0.5%. Frankfurt +0.2%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +0.1% to $92.17. Gold +0.3% to $1751.60.
Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Housing Starts
10:30 EIA Petroleum Inventories
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