MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Tuesday, June 18
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7:36 PM Pool Corp. (POOL) lowers its FY13 earnings guidance as the wholesale distributor said cooler and unusually wet weather in its seasonal markets in North America and Europe led to later-than-usual pool openings and lower-than- expected sales. The company cut its 2013 per-share earnings view by a dime, now expecting to earn between $2.03 to $2.13. Shares -6.3% AH. [Earnings, On the Move] 1 Comment
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7:31 PM Dish (DISH) is all but officially abandoning its bid for Sprint (S). In a fresh update, the satellite TV provider says the revised SoftBank (SFTBF.PK) deal makes it "impracticable" for it to submit a new offer by Sprint's June 18 deadline, and that it will now focus its "efforts and resources" on the Clearwire (CLWR) tender offer. It increasingly looks as if SoftBank will end up with Sprint (vote on June 25), and Dish with a big minority stake in Clearwire that it could use to obtain a 4G network/spectrum deal with the 3 other parties in this saga. S -1.8% AH. CLWR +1.8%. (previous) [Tech, M&A] 14 Comments
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7:12 PM Amgen (AMGN) ups its stake in Cytokinetics (CYTK) to 11,909,406 shares from 3,484,806 shares reported on March 21. The increase now puts AMGN's holding at 7.58% of CYTK's outstanding float. CYTK +7.4% AH. [Healthcare, On the Move] Comment!
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7:09 PM IBM is launching a slew of cloud apps/services it says are aimed at C-Suite execs, but is light on specifics. Big Blue says its SmartCloud Solutions portfolio now offers 100+ business functions for decision-making execs such as CFOs, CMOs, procurement/supply chain officers, and HR chiefs to leverage. A new social media analytics solution for CMOs (will compete against CRM's Radian6 and ORCL''s Collective Intellect) is among them. The announcement comes on the heels of IBM's ~$2B acquisition of cloud infrastructure provider SoftLayer, which the company plans to integrate with its SmartCloud unit. [Tech] Comment!
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6:56 PM Money manager and Fox Business contributor Tobin Smith is dumped by the network following a report his firm accepts money from microcap companies to promote their stocks. Smith and friends just pocketed $50K from a stock endorsement for Petrosonic Energy (PSON.OB), a Bulletin Board company that has no revenues - "taking a bag of cash and luring the dumbest, poorest people into losses," Josh Brown says. 11 Comments
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6:50 PM Alcatel-Lucent (ALU) CEO Michel Combes will use tomorrow's strategy update to unveil plans to cut €1B ($1.34B) worth of costs, and to divest €1B worth of assets over the next 3 years (less than some investors have been hoping), Les Echos reports. Combes will also announce plans to focus on the router and mobile infrastructure markets - the former has been a bright spot for Alcatel thanks to strong edge router sales, and the latter has been faring better lately thanks to growing 4G orders. (earlier) [Tech] 4 Comments
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6:44 PM More on China Cord Blood (CO): FQ4 easily beats estimates across the board on a 33% jump in total sales. Accumulated subscriber base rose by 30.1% Y/Y. Gross margin also rose to 79.8%, from 76.6%. Shares +3.4% AH. [Healthcare, Global & FX, Earnings, On the Move] Comment!
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6:43 PM Even if the U.S. approves the Keystone pipeline (TRP), analysts say it won't be enough to sop up Canada's oil glut and would only temporarily alleviate the lack of pipeline infrastructure, meaning Canadian crude oil probably will remain the cheapest in the world. But a decision blocking Keystone would make the problem worse, reducing spending on oil sands projects by ~$9.4B during 2014-17. [Energy] 4 Comments
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6:39 PM Mellanox (MLNX) responds to a shareholder vote forcing CEO Eyal Waldman to give up the role of chairman by naming lead director Irwin Federman its new chairman. Federman is a partner at VC firm U.S. Venture Partners, and also serves on SanDisk and Check Point Software's boards. Also: Mellanox boasts the number of systems on the TOP500 supercomputer list using its FDR InfiniBand hardware has risen 3.3x over the last year, and that 205 of the systems uses InfiniBand. [Tech] Comment!
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6:19 PM Agilent (A) announces and prices a $600M offering of senior notes due July 2023; they carry a yield of 3.875%, and have been rated BBB+ by Fitch. Agilent says it will use the proceeds to pay down debt due next month, as well as for restructuring expenses and buybacks. The test equipment giant had $2.36B in debt as of April 30, and $2.64B in cash/investments. [Tech] Comment!
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6:07 PM Red Hat (RHT +2.1%) rallied ahead of tomorrow's FQ1 report after SA Pro contributor/former hedge fund analyst Josh Burwick offered a bull case, and Piper made cautiously optimistic remarks. Burwick argues fears about the impact of Amazon Web Services on Red Hat are overblown, that slowing billings growth is offset by major growth in unbilled revenue, and that newly-announced OpenStack cloud infrastructure and app platform offerings should fare well. Piper says checks indicate FQ1 billings could be light, but adds Red Hat will make up for it in FQ2, and sees shares bottoming in the $40s. [Tech, On the Move, Quick Ideas] Comment!
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6:03 PM Biodel (BIOD) is trading lower in the post session after announcing a public offering to sell an undisclosed number of shares with a 30-day option on an additional 15% to cover overallotments, if any. Shares -8.2% AH. [Healthcare, On the Move] Comment!
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6:00 PM On the hour: S&P +0.05%. 10-yr flat. Euro +0.01% vs. dollar. Crude +0.19% to $98.82. Gold +0.03% to $1367.45. Comment!
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5:56 PM Vale (VALE) shares advanced today after Brazil's government unveiled a long-awaited bill to reform the country's mining code, proposing new royalties of up to 4%, double the current rate, and a new mine regulatory agency. The new rules were expected, but investors had been holding back on buying shares for fear they might turn out worse. [Commodities] Comment!
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5:46 PM Facebook's (FB) monthly active advertiser base is now above 1M, the social networking giant boasts. Though impressive, that figure still suggests only a small portion of the 16M local businesses that have set up Facebook pages are buying ads. Facebook is hoping to reel in more clients in part by streamlining its ad offerings, creating more mobile-friendly business pages, and giving advertisers more data on its users' non-Facebook activity. BIA Kelsey estimates over half of U.S. small businesses promote themselves via Facebook, and 16% buy ads. [Tech] 1 Comment
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5:41 PM Canada hikes the liability cap for oil spills in Atlantic and Arctic waters to C$1B, up from the respective $30M and $40M limits under existing rules. The changes deal only with offshore activity, which is poised to accelerate as companies begin assessing prospective new fields on the East and Arctic coasts. [Energy] 10 Comments
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5:27 PM In a strategy shift, Nvidia (NVDA) is offering to license its Kepler GPU architecture, as well as "visual computing" IP, to other chipmakers looking to power mobile hardware. Kepler serves as the foundation for much of Nvidia's PC/workstation GPU lineup, as well the GPU within its next-gen Tegra 5 (Logan) processor. Nvidia's move puts it into competition with GPU core licensing leader Imagination (IGNMF.PK), and also ARM's (ARMH) fast-growing Mali GPU core business. Potential licensees include Qualcomm (uses home-grown GPUs), Intel (ditto), Apple (Imagination client), and Samsung (Imagination and Mali client). Tough competition for Tegra may have influenced Nvidia's decision. [Tech] 4 Comments
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5:24 PM Long-term care provider AdCare Health Systems (ADK) says the NYSE has approved its plan to regain compliance with the exchange's continued listing standards was accepted. The NYSE granted until July 16, an extension for the company to regain compliance with respect to the Annual Report, and until August 15 for its 10-Q. Shares +1.7% AH. [Healthcare, On the Move] Comment!
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5:20 PM TransCanada (TRP), which says Keystone XL will be the safest pipeline ever built, isn’t planning to use infrared sensors or fiber-optic cables to detect spills along the system’s 2,000-mile path to Texas refineries from fields in Alberta, Bloomberg reports. The pipeline would have to be spilling more than 12K bbl/day before its currently planned internal spill-detection systems would trigger an alarm. [Energy] 5 Comments
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5:05 PM The next version of Surface RT (MSFT) will rely on both Qualcomm (QCOM) and Nvidia (NVDA) CPUs, Bloomberg reports. Though details are scant, one likely possibility is that Nvidia (the sole supplier for the first-gen RT) will power Wi-Fi-only models, and Qualcomm will power 3G/4G-capable models. The report comes as all signs indicate Qualcomm is set to displace Nvidia as the Nexus 7's CPU supplier. Meanwhile, Microsoft is selling the 32GB version of RT for just $199 (a 60% discount) to schools until Aug. 31, the latest in a string of aggressive promotions ahead of a refresh that could be announced at the upcoming BUILD conference. [Tech] 4 Comments
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5:00 PM PetroLogistics (PDH) says it's successfully completed repairs to its propane dehydrogenation facility and the facility has resumed propylene production. The facility was closed earlier this month for repairs on two of the eight reactors at the plant. Total costs for all completed repairs are expected to be less than $2.5M. Shares +0.7% AH. [Commodities, On the Move] Comment!
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5:00 PM On the hour: S&P +0.03%. 10-yr flat. Euro -0.03% vs. dollar. Crude +0.21% to $98.84. Gold -0.02% to $1366.75. Comment!
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4:53 PM Today's 14% jump caps a five-day 60% advance in Zion Oil & Gas (ZN) on no apparent news, but this isn't the first time ZN shares have seen such wild swings. Evan Buck urges extreme caution in the company that's "definitely not a kosher investment," highlighting Delek US Holdings (DK) and Noble Energy (NBL) as far wiser plays on Israel's natural gas finds. [Energy, On the Move] 2 Comments
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4:46 PM More on La-Z-Boy (LZB): FQ4 beats on all counts. Net earnings fell 6.6% Y/Y however, as year-ago results were bolstered by a large benefit from antidumping income. Margins improved in the latest period to 33.8% from 31.6%. Retail segment sales, which includes La-Z-Boy Furniture Galleries stores, swung to an operating profit of $4M from a year-earlier loss of $1.1M. Same-store written sales rose 11.2%, while wholesale upholstery, the main contributor to its top line, saw revenue grow 8.4% to $289.4M. [Earnings, Consumer] Comment!
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4:43 PM A little more on Adobe: Marketing Cloud bookings +25% Y/Y. 26% of Digital Marketing transactions now mobile (25% in FQ1). 42% of Adobe's (ADBE) Document Services (Acrobat) revenue subscription-based; 1M+ paid subs. 3.9M shares repurchased. R&D spend +12% Y/Y to $203M, sales/marketing spend +4% to $402M. Company on track to reach goal of 1.25M Creative Cloud subs by end of FY13; 93% of CC subs on annual (rather than monthly) plans. Deferred revenue -1% Q/Q to $691.3M. 35% of company's revenue recurring at end of FQ2, up from 31% at end of FQ1. (PR) [Tech, Earnings] Comment!
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4:39 PM Tetra Tech (TTEK) issues downside guidance after incurring restructuring costs associated with its eastern Canadian and mining operations; it expects to incur up to $45M in charges during FQ3, resulting in EPS losses of $0.30-$0.50 vs. analyst consensus $0.38 gain on revenue of $440M-$490M vs. $551M consensus. Also authorizes the repurchase of up to $100M of its common stock. Trading halted. [Energy] Comment!
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4:35 PM More on Adobe: FQ3 guidance is for revenue of $975M-$1.025B and EPS of $0.29-$0.35, vs. consensus of $1.01B and $0.35. FY13 guidance is for revenue of $4.1B and EPS of $1.45 vs. consensus of $4.11B and $1.44. Paid Creative Cloud subs +221K Q/Q to 700K in FQ2, better than FQ1's +153K. CC annual recurring revenue +$123M Q/Q to $356M (rose $80M in FQ1), 81% of subs use full suite. Digital Media revenue -18% Y/Y to $670M (shift to subscriptions), Digital Marketing (Omniture, AdLens) revenue +11% to $285M. ADBE +3.9% AH, CC at 5PM ET (webcast). (slides) (datasheet) (prepared remarks) (PR) [Tech, Earnings, On the Move] Comment!
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4:27 PM Hatteras Financial (HTS) receives board authorization for a stock repurchase program of up to 10M shares (about 10% of the float). Shares +0.8% AH. Previous: Hatteras maintains its $0.70 dividend. [Financials, Breaking News] Comment!
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4:22 PM MRC Global (MRC) buys the operating assets of Flow Control Products, a leading provider of pneumatic, electric and electro-hydraulic valve automation packages and related field support to the energy industry in the Permian Basin. Flow Control reported revenues of $28M in 2012. Concurrently, MRC is expanding its existing facility in Odessa into a 110K square foot Regional Distribution Center. When completed, the Flow Control business will operate from this newly expanded facility. Shares -0.5% AH. [M&A] Comment!
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4:18 PM If you want a bullish take on gold (GLD), Ron Paul has one for you. Asked why the yellow metal hasn't performed very well of late, he says "markets do these kind of things … they go up and then they take a rest," but "if you look at the record since the Fed has been in existence, we have about a two cent dollar" and based on "about six thousand years of history" the prognosis for commodity money is pretty good. "As long as we have excessive computerized money … we're going to see gold go up." How far, you ask? "If we're not careful, to infinity," Paul warns. [Commodities] 25 Comments
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4:17 PM La-Z-Boy (LZB): FQ4 EPS of $0.30 beats by $0.02. Revenue of $359.5M beats by $1.83M. Shares +3.1% AH. (PR) [Earnings, Breaking News, Consumer, On the Move] Comment!
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4:15 PM Market recap: Stocks cap a two-day rally to wipe out last week's losses, as investors seem confident Bernanke will assure everyone at his press conference tomorrow that the Fed is in no rush to taper its bond-buying program. The Dow's 138-point gain marked a sixth straight day of triple-digit moves; the small-cap Russell 2000 closed at an all-time high. The dollar rose vs. the yen; Treasury prices inched up. [Top Stories] 6 Comments
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4:14 PM New York Mortgage Trust (NYMT) maintains its payout, declaring a Q2 dividend of $0.27/share for an annualized yield of 15.3% based on today's close which had the shares trading at a 7.7% premium to March 31 estimated book value. Shares -0.3% AH. (PR) [Financials, Breaking News] 1 Comment
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4:14 PM China Cord Blood (CO): FQ4 EPS of $0.05 beats by $0.03. Revenue of $21.4M beats by $4.81M. Shares +8.9% AH. (PR) [Earnings, Breaking News, Healthcare, On the Move] Comment!
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4:10 PM Hatteras Financial (HTS) maintains its payout, declaring a Q2 dividend of $0.70/share for an annualized yield of 10.9% based on today's close which had the stock trading at a 8.5% discount to March 31 book value. Shares +0.8% AH. (PR) [Financials, Breaking News] 1 Comment
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4:02 PM Huawei says in an e-mailed statement it "has no plans" to acquire Nokia (NOK +4.6%). Shares have given back a big chunk of their earlier gains, but they still closed up sharply. Huawei consumer group chairman Richard Yu qualified his remarks about his company being willing to buy Nokia by suggesting Nokia's commitment to Windows Phone could be an issue. "Whether Windows Phone will be successful is difficult to say ... It has a very small market share." Huawei launched the W1, a low-end WP8 device, earlier this year. [Tech, M&A] 19 Comments
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4:00 PM At the close: Dow +0.92% to 15320. S&P +0.78% to 1652. Nasdaq +0.87% to 3482.
Treasurys: 30-year +0.09%. 10-yr -0.02%. 5-yr +0.01%.
Commodities: Crude +0.66% to $98.68. Gold -1.18% to $1366.75.
Currencies: Euro +0.22% vs. dollar. Yen +0.87%. Pound +0.46%. Comment! -
3:53 PM Traders place bullish bets in the options market on Infinity Pharmaceuticals (INFI +13.5%). Notably, 2K July $16 strike puts were sold today and volume in the $17.50 strike far exceeds open interest as the stock rallies double-digits. [Healthcare, On the Move] Comment!
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3:52 PM Another day, another Gulf state industrial explosion, as a Florida Gas Transmission natural gas line, owned by Energy Transfer Partners (ETP -0.8%), exploded in rural Louisiana this morning. No injuries or significant property damage was reported; a section of the pipeline was shut and natural gas rerouted to customers along other parts of the system. (earlier: I, II) [Energy] 2 Comments
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3:50 PM Is a bidding war breaking out for Kabel Deutschland? Bloomberg reports Vodafone (VOD +0.4%) has raised its preliminary bid for the German cable giant to €7.5B ($10B), or €85/share, matching an offer recently made by Liberty Global (LBTYA -0.1%). Vodafone is said to be studying Kabel's books "before it presents an official offer in the coming weeks." Kabel closed at €85.51 in Frankfurt, up 3.7%. (previous) [Tech, M&A, On the Move] Comment!
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3:50 PM Orchard Supply (OSH -18%) gets a burst of heavy volume late in the day on reports that the company is permitted to seek bids for store closing sales. [On the Move] Comment!
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3:47 PM MBIA (MBI +2.6%) management needs to reconsider its aversion to separating its municipal finance business (National) and the securitization business (MBIA Insurance), writes Christian Herzeca. Investors in National have developed a "well-deserved antipathy to securitization guaranty insurance," he says, and for that have assigned about a $2 discount National which he believes is worth $16 as a separate entity. [Financials] 1 Comment
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3:41 PM McDonald's (MCD +0.9%) will sell premium hamburgers in Japan for a limited time in order to see if the company can improve the sluggish results it has been seeing in the nation. (MCD Japan sales timeline) [Consumer] 1 Comment
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3:32 PM Shares of World Acceptance (WRLD -1.1%) "stumble" after Herb Greenberg reminds investors via Twitter that the company filed an incomplete 10-K due to "additional review and analysis needed to support the allowance for loan losses." [On the Move] 1 Comment
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3:30 PM "Actively managed" and fixed income are the themes for the top new ETF asset gatherers this year. Leading the way is the SPDR Blackstone/GSO Senior Loan Fund (SRLN) - 2 months old and with $279M AUM. There's very little duration risk since yields on senior loans rise alongside interest rates. Number two is the Barclays Select MLP ETN (ATMP) with $136.5M AUM. Rounding out the top 7: IBCC, MINC, FPE, SYLD, VWOB. Comment!
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3:30 PM Huntington Ingalls (HII +1.6%) ticks up today, despite Stifel Nicolaus initiating the shares with a tepid Hold rating. The company says the stock is fairly valued at current levels, but the outlook could become more favorable should progress on achieving 9%-plus margins by 2015 continue and its return of cash to shareholders fall more in line with its defense industry peer group. [On the Move] Comment!
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3:29 PM Prospect Global Resources (PGRX +51.2%) terminates the rights offering which was scheduled to expire yesterday, obtains an extension of its obligation to raise $7M until June 24, and says its ongoing engineering optimization work and analyses will result in release of a pre-feasibility study in July. [Commodities, On the Move] Comment!
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3:23 PM Moneygram (MGI +3.1%) pops higher on a Dealreporter story the company is in talks with potential suitors and has hired Bank of American to advise. [Financials, On the Move, M&A] Comment!
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3:21 PM J.P. Morgan isn't giving up on GenMark Diagnostics (GNMK -12.2%) despite the shares' ~35% decline since June 10. Analyst Tycho Peterson acknowledges the company's tepid guidance, but maintains an Overweight rating on the stock. PT lowered to $15 from $17. [Healthcare, On the Move] Comment!
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3:16 PM Some of today's bounce in Linn Energy (LINE +3%) is attributed to comments by Leon Cooperman in his letter to shareholders which said his hedge fund remained "comfortable" with the stock. Cooperman argues LINE has capitalized the costs of its energy hedges in accordance with GAAP, and notes Citigroup and Credit Suisse value LinnCo (LNCO -0.8%) at $35.92 and $39.64, above the current share price. (earlier) [Energy, On the Move] 13 Comments
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3:14 PM Paris Air Show: Gencorp's (GY +4.5%) Aerojet Rocketdyne unit says it's expanded an accord with Russian Experimental Design Bureau Fakel, obtaining the right to market and sell the Russian company's low-power Hall thrusters in the U.S. market. No financial details were given. [On the Move] Comment!
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3:14 PM Smoking rates in the U.S. dipped even lower than expected, according to data released by the CDC. Last year, only 18% of adults in the U.S. identified themselves as smokers after the rate stalled around the 20% to 21% range for a seven-year period. The news isn't a shock for Big Tobacco (MO, LO, RAI, BTI) which has been pitching the case that electronic cigarettes will be a billion-dollar business. [Consumer, Global & FX] 5 Comments
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3:05 PM Shares of Kohl's (KSS -0.9%) are a bit skittish after director Peter Sommerhauser unloaded $2M worth of stock. The move follows recent sales by the retailer's CFO and Chief Administrative Officer. (Form 4) [Consumer, On the Move] Comment!
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3:04 PM Rising interest rates should be good for bank (XLF) income statements, but maybe bad for bank balance sheets, opines Fitch. Higher long rates mean wider margins which is good for earnings, but securities backing bank capital levels have large unrealized gains attached - gains which could disappear and turn into losses as rates rise. Basel III rules, of course, have yet to be finalized so the ultimate impact is not yet clear. [Financials] Comment!
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3:00 PM On the hour: Dow +1.02%. 10-yr +0.01%. Euro +0.29% vs. dollar. Crude +0.68% to $98.7. Gold -1.23% to $1366.15. Comment!
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2:58 PM Marathon Oil's (MRO +3%) outlook is upgraded to positive from stable by Fitch Ratings, which cites strong growth in its shale liquids plays, particularly at Eagle Ford. MRO also boasts a sizable, multi-year inventory of drilling opportunities in the shale plays that provides good visibility on future production and reserve growth, raising Fitch's confidence that it should be able to sustain its positive momentum. [Energy, On the Move] 1 Comment
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2:48 PM U.K.-based Facebook/mobile game developer Midasplayer has hired banks to pursue a U.S. IPO, the WSJ reports. Midasplayer, better known as King, is the developer behind Candy Crush Saga, which has 15.4M daily active Facebook users (per AppData) and has also done quite well on mobile. Midasplayer/King says it had 70M DAUs for all its games last month, which is more than the 52M DAUs Zynga (ZNGA) had in Q1. Not surprisingly, the company is trying to diversify. [Tech] 3 Comments
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2:47 PM Schlumberger (SLB +1.9%) acquires Gushor, a Canadian geochemistry company that supports exploration and production companies working with heavy oil and oil sands, for an undisclosed sum. SLB says Gushor will complement its leading fluids and rocks technology portfolio with geochemical and fluid property analysis capabilities. [Energy, On the Move] Comment!
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2:45 PM Bill Ackman's Pershing Square says Herbalife (HLF +1.6%) "refuses" to release actual sales data, which violates a California injunction, and is requesting that regulators "promptly" initiate a probe of the company. Ackman says the release of the actual data collected by its distributors would "put to rest" whether it is or isn't a pyramid scheme. [Healthcare, On the Move] 40 Comments
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2:44 PM Tesla Motors (TSLA +1.3%) shares are on the move amid some chatter that General Motors is interested in the EV automaker's technology. Though Tesla supplies Mercedes-Benz with electric drivetrains, there hasn't been any prior indication that the Big Three automakers have had any serious interest in working a deal with Tesla. [Consumer, On the Move] 13 Comments
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2:39 PM TransDigm Group (TDG +2.8%) says it's requested amendments to its senior secured credit facilities in connection with the possible payment of a special dividend. The amendments seek to increase the company's existing senior secured term facility by $700M and to change certain ratios. TDG is considering paying a cash dividend of $1B - $1.8B with the proceeds. [On the Move] Comment!
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2:37 PM Ahead of this afternoon's FQ2 report, Adobe (ADBE +0.3%) has sent out a survey to customers asking whether they'd be interested in paying $30/month for Creative Cloud, or $10/month for the Photoshop app, for 3 years, after which they'd get a permanent copy of Creative Suite 6. Those prices are more aggressive than the $50/month and $20/month Adobe currently charges (some discounts are available), and suggest it's trying to address a backlash caused by its decision to abandon CS license sales in favor of CC subscriptions. The survey comes as Adobe rolls out a Creative Cloud update; it includes cloud file-syncing, Behance integration, and a blur-removal tool. [Tech] Comment!
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2:37 PM Chrysler (FIATY.PK) has reportedly decided to comply with a government request to recall 2.7M vehicles to end a showdown over the issue which upset the status quo in the industry a bit. [Consumer, Global & FX] Comment!
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2:35 PM Chevron (CVX +0.2%) says it plans to sell its 40% stake in five Nigerian shallow-water oil leases to local firms, the latest oil major seeking to dispose of assets in Africa's biggest producer. Nigeria wants more direct ownership of its oil and gas, either through the state oil company or local firms, raising concerns among foreign firms that they may lose smaller assets for nothing if they don't sell now. [Energy] Comment!
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2:31 PM "We hosted meetings at [company] HQ with senior management," Sterne Agee proudly says of talks with Ulta Salon's (ULTA +0.3%) top brass. Analyst Ike Boruchow ups the price target on the shares to $104 from $100 citing a positive outlook for the "themes of the day": Margins and inventory. [Consumer] Comment!
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2:19 PM Gevo (GEVO +22.5%) has restarted commercial production of isobutanol at its plant in Luverne, Minn. CEO Patrick Gruber says there was some microbial contamination at the plant that Gevo has since learned how to control and manage by making equipment modifications, changing fermentation conditions and improving operating procedures. [Energy, On the Move] Comment!
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2:13 PM A mini-drama is evolving in the automobile industry with Chrysler (FIATY.PK) expected to formally inform the NHTSA it won't comply with a request to recall certain older Jeep Grand Cherokee and Jeep Liberty models. If the stalemate continues between the automaker and the agency, the issue could be resolved in hearings or in court. (Chrysler White Paper on recall) [Consumer, Global & FX] Comment!
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2:11 PM Cytokinetics (CYTK +24%) soars today, after its selection for presenting results from a Phase II trial of its of omecamtiv mecarbil at a "Hot Line Late Breaking Trials Session" at the European Society of Cardiology Congress 2013 in late August sent signals that its experimental drug for acute heart failures will have success in a mid-stage trial. [Healthcare, On the Move] Comment!
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2:11 PM More on Goldman and Palo Alto Networks (PANW -1.5%): Analyst Greg Dunham notes Palo Alto's "growth story is taking longer to play out and there are questions over execution" (presumably thanks to recent numbers). He also thinks Juniper's suit against Palo Alto (filed in 2011) is proving "a bigger investor concern than we had anticipated." Nonetheless, Dunham reiterates a Buy, believing "investors are underestimating the strength in PANW's subscription businesses" and its long-term growth potential. [Tech] 1 Comment
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2:09 PM Sweet! Longbow raises its price target on shares of Krispy Kreme (KKD +4.2%) to $23 from $20, representing a 35% upside from Monday's close. Channel checks reportedly suggest franchise comps growth may come in at 8.2% for Q2. Meanwhile, SA contributor Sean Weston says international franchise numbers "are not in the midst of an attractive trend." [On the Move] Comment!
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2:05 PM United Technologies (UTX +1.1%) has been ordered to pay $473M, plus interest, for overcharging the US Air Force for jet engines. The ruling is the result of a lawsuit filed by the DoJ in 1999 seeking reimbursement for inflated costs by UTX unit Pratt & Whitney under the False Claims Act. Since the judgement includes interest charges, hundreds of millions in dollars could be added to the $473M price tag once it's all tallied, as the overcharges go all the way back to 1986. [Consumer] 1 Comment
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2:00 PM On the hour: Dow +0.92%. 10-yr +0.04%. Euro +0.32% vs. dollar. Crude +0.54% to $98.56. Gold -1.21% to $1366.35. Comment!
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2:00 PM Alcatel-Lucent (ALU -2.1%) slips after the WSJ's Renee Schultes writes new CEO Michel Combes is likely to place a greater emphasis on cost-cutting than asset sales when outlining his strategy tomorrow. However, no sources are cited in the column. ALU has already unloaded some major assets, and there have been multiple reports about the company's submarine optical cable unit being on the block. But some analysts think the debt-laden company needs to do more. JPMorgan Cazenove, for example, raises the idea of ALU also unloading its mobile infrastructure and enterprise units. [Tech] 9 Comments
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1:55 PM Not all consumer staples funds (XLP, FXG, VDC, KXI, PMR) are created equal, according to S&P Capital IQ. Fund managers' weighting toward certain sub-sectors or their willing to invest globally or lean on fundamentals can create varying rates of return in the staples group. If there is some common ground, it's with the propensity of staples favorites Procter & Gamble (PG +0.1%), Coca-Cola (KO +0.5%), Philip Morris (PM +0.2%), and Wal-Mart (WMT +1%) to show up as top ten holdings. [Consumer] Comment!
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1:53 PM MedAssets (MDAS +1.2%) expands its reseller agreement relationship with Cerner (CERN +0.5%) to incorporate the components of the former's claims management solution within CERN's patient accounting system. The deal enhances CERN clients' "capabilities related to complex payor edits [and] improves [thier] operational efficiencies in the processing and status tracking of claims." (PR) Comment!
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1:47 PM Helix Energy Solutions (HLX +4%) gains after saying it's closed the previously announced sale of its pipelay vessel, the Caesar, to Trevaskis Limited for a total of $138M. [On the Move, M&A] Comment!
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1:38 PM Rackspace (RAX +6.4%) is rallying, apparently on rumors it has bagged Fidelity as a customer for its OpenStack cloud infrastructure offerings. Cowen thinks the deal will be announced at the June 19-20 GigaOm Structure conference. Rackspace could definitely use a big OpenStack customer win, given its recent news flow. 11.3% of the float was shorted as of May 31. [Tech, On the Move] Comment!
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1:36 PM MCG Capital (MCGC) keeps the pipeline moving, closing a $12.6M investment - comprised of a senior credit facility, a revolving line, and equity - in Community Investors, a provider of SaaS-based community management software tools. (PR) [Financials] Comment!
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1:32 PM Scotiabank (BNS) and TD Bank are each downgraded to Hold from Buy at Barclays which says earnings growth at the banks will be challenged and instead prefers insurers and asset managers (which ones are as yet unavailable). [Financials] Comment!
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1:30 PM Brocade (BRCD -2.3%) slides on news Americas sales chief Tom Ellery has resigned. The departure comes 4 months after Brocade hired Juniper's Jeff Lindholm to be its new global sales chief, and a year after Lindholm's predecessor, Ian Whiting, left to join Riverbed. Wells Fargo views Ellery's resignation as a negative. "We believe he was well respected in the Ethernet sales organization and his resignation may lead to additional turnover in the business." The firm also notes Brocade is trying to cut costs and focus its Ethernet efforts on high-margin areas, actions that could lead to near-term disruption. [Tech, On the Move] Comment!
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1:30 PM Shares of John Wiley & Sons (JW.A -6.4%) slide after the company calls FY14 a "transitional year" and projects EPS of $2.85-2.95 (so, flat Y/Y) versus consensus of $3.01. (PR) [Earnings, On the Move] Comment!
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1:28 PM Astronics' (ATRO +1.8%) says its Canadian subsidiary, Luminescent Systems Canada, has landed an extension of its supply agreement with Rockwell Collins (COL). Under the agreement, Luminescent Systems will supply illuminated cockpit control panels, keyboards, display bezels and related assemblies, which are integral parts of COL's advanced avionics product offerings. The company will also supply new products as part of COL's next generation of avionics solutions. [On the Move] Comment!
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1:22 PM PowerShares' Global Short Term High Yield Bond Portfolio (PGHY) is set to launch on June 20 with an expense ratio of 0.35%. Like the name says, the fund will keep duration low and invest globally. iShares' GHYG also invests globally in high yield, but with no mandate to keep holdings short-term. Several high yield funds have built-in hedges against higher rates, including HYHG, THHY, HYLS. [Financials] Comment!
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1:20 PM FactSet Research (FDS -2.7%) pares early losses but is still notably lower after saying annual subscription value from U.S. operations came in at $590M for FQ3, a slight decrease from the $592M reported in FQ2. (PR) [On the Move] Comment!
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1:15 PM Noodles (NDLS) will offer 5.4M shares in a price range of $13 to $15 in its IPO. What to watch: The chain boasts some of the highest margins in the fast-casual sector and has seen comparable store sales growth accelerate over the last few years. (S-1) [Consumer] 2 Comments
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1:14 PM Nokia (NOK +9.3%) soars after the chairman of Huawei's consumer business group says his company would be open to buying Nokia in an off-hand remark. Any offer from Huawei would face intense EU scrutiny, given long-standing worries about the company's Chinese government/military ties. Is this a repeat of BlackBerry/Lenovo? [Tech, On the Move, M&A, Breaking News] 26 Comments
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1:10 PM Colony American Home pulled its IPO this month because of a collapse in equity REIT prices, says Colony Financial (CLNY) Chairman Tom Barrack, appearing on CNBC. "We don't need the capital," he adds. An owner of mortgage insurers Radian (RDN) and MGIC (MTG), and Fannie Mae (FNMA.OB) preferred, Barrack calls them a great a way in H2 to play the housing comeback. Note: FNMA.OB is the symbol for the common. [Financials] Comment!
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1:09 PM STAAR Surgical (STAA +11%) soars again today, tacking on big gains to yesterday's 6% move after it said it had received regulatory approvals to market its Visian Implantable Collamer Lens technology in Korea and the ANMAT in Argentina. STAA's Asia Pacific Regional President says the refractive procedure market in Korea is both significant and fast growing, and the approval represents "a very important milestone." [Healthcare, On the Move] Comment!
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1:07 PM Carl Icahn has bought 72M Dell (DELL +0.4%) shares from would-be buyout partner Southeastern Asset (half its stake), and is proposing a $14/share tender offer for 62% of Dell's outstanding shares (1.1B shares). The Southeastern deal makes Icahn Dell's largest outside shareholder. Dell, whose shareholder vote on Michael Dell/Silver Lake's LBO offer remains set for July 18, has edged higher to $13.45. (previous) [Tech, M&A] 3 Comments
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1:00 PM On the hour: Dow +0.91%. 10-yr 0%. Euro +0.22% vs. dollar. Crude +0.37% to $98.4. Gold -1.18% to $1366.75. Comment!
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12:57 PM As expected following the Fed stress test results in March, U.S. Bancorp (USB +0.3%) ups its quarterly dividend 18% to $0.23/share. The annualized yield is 2.6%. (PR) [Financials] Comment!
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12:56 PM Ascent Solar (ASTI +5.2%) rallies to $0.76 after announcing a deal to sell $6M worth of preferred shares at a price of $0.80, and issue 3-year warrants to buy 2.625M shares at an exercise price of $0.90 (potential proceeds of $2.36M), with an unnamed "high net worth private investor in Asia." Ascent, which has been steadily burning cash, says it will use the proceeds to "fund the continued expansion of its retail channels" of its EnerPlex solar charger/accessory line. (PR) [Tech, On the Move] Comment!
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12:52 PM Argentina's Santa Cruz province slaps a 1% annual tax on mine resources, a move mining companies say they will challenge in court. While the percentage seems small, miners say it will cost them $100M in new taxes next year, as the tax amounts to ~8% of the total resources of a mine with a 15-year life. Among miners with operations in Santa Cruz: AU -3.5%, MUX -2.3%, GG -2.5%, PAAS -1.4%. [Commodities, On the Move] Comment!
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12:50 PM Sears Holdings (SHLD -0.3%) is in a death spiral, according to the former CEO of Sears Canada. The grumpy critic discounts the company's resilient share price and notes the firesale of assets without a clear strategy will run out of steam. [Consumer] 2 Comments
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12:44 PM MannKind (MNKD -12%) takes a hit today on no specific new-related driver. Speculation is circulating that a number of hedge funds are leaning on the shares to flush out supply from retail investors. [Healthcare, On the Move] 9 Comments
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12:44 PM Heard during Starbucks' (SBUX +1.4%) presentation at the Jefferies 2013 Global Consumer Conference: 1) The company has a long-term revenue growth target of +10% and EPS growth target of 15%-20%. 2) Opportunities for expansion of food sales exist around the world. 19% of total Starbucks sales is food - led by France with a food mix of 28% and trailed by China at 10%. 3) New food products are trending well including new items from recently-acquired La Boluange. 4) The company's loyalty program accounts for almost 25% of all transactions. 5) Rest easy Green Mountain Coffee Roasters (GMCR). CFO Troy Alstead says Starbucks has no plans to turn into a "deep equipment" company.(webcast) [Consumer] 1 Comment
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12:38 PM BlackBerry (BBRY +4.3%) gets a lift from a positive note from RBC's Mark Sue (Market Perform), who now thinks 3.5M BB10 phones were shipped in the May quarter (up from a prior 2.75M) thanks to new Z10 carrier deals and channel fill. Sue adds "BB10 demand appears to be mixed by region," with the U.K., Canada, and the Middle East seeing the strongest sales, and U.S. demand weaker. He now expects BlackBerry to report above-consensus FQ1 revenue and EPS on June 28, and thinks heavy short interest (32% of float shorted) could lead to a squeeze. (Deutsche) [Tech, On the Move] 15 Comments
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12:35 PM Indonesia likely will allow Freeport McMoran (FCX -0.6%) to resume open-pit mining at the Grasberg mine later this week, the country's resources minister says, five weeks after a fatal accident nearby shut multiple mining operations and forced FCX to cancel shipments of concentrate. Grasberg accounts for more than half of FCX's production. [Commodities] 2 Comments
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12:33 PM Amarin (AMRN -0.5%) continues its slide on the back of Friday's news that NCE status on Vascepa was once again delayed. However, MKM Partners analyst Jon LeCroy thinks the delay may have a silver lining. Lecroy says that while the NCE designation is the preferred outcome here, the delay also prevents the company from being targeted for a takeover. The shares are likely to remain under pressure until an NCE decision is made though, which MKM expects to come around July 12. [Healthcare] 5 Comments
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12:30 PM Summer blockbusters Man of Steel and Iron Man 3 are strong indicators that moviegoers in the U.S are willing to buck up for the higher ticket prices for the IMAX (IMAX -1.6%) format. Last weekend, Man of Steel averaged a rousing $53K per IMAX screen. [Consumer] 1 Comment
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12:30 PM Three lunchtime reads:
1) Draghi says ECB has "open mind" on non-standard measures
2) China wrestles with banks' pleas for cash
3) The current U.S. economy: Text and subtext Comment! -
12:29 PM VeriFone (PAY +4.1%) pops after director Alex Hart discloses he bought 10K shares on Friday at $15.72. Shares of the payment-processing hardware vendor remain down 45% YTD thanks to a lot of bad earnings news. [Tech, On the Move] Comment!
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12:24 PM More on SolarCity: The company continues its financing binge by announcing a $175M offering for convertible senior notes due 2018. The announcement comes shortly after SolarCity (SCTY +2.9%) obtained a $100M loan to finance new panel installations, and a month after it reached a $500M+ financing deal with Goldman. [Tech] Comment!
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12:21 PM RedHill Biopharma (RDHL +5%) says its New Drug Application for marketing approval in the U.S. of RHB-103 by the company and its co-development partner, IntelGenx (IGXT +5.3%), has been accepted for substantive review by the FDA. RHB-103 is an oral, thin film formulation of rizatriptan, which is used to treat acute migraine. The application is subject to a standard 10-month review period and will have a PDUFA goal date of Feb. 3, 2014. [Healthcare, On the Move] Comment!
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12:20 PM The speculative phase of the rally in Japanese stocks is over, says Deutsche, setting up the next leg which will require the participation of domestic investors. Yes, underweight global equity funds may help, but they've already boosted stakes and have just $2T in assets compared to $9T of Japanese household cash. DXJ +3.1%, EWJ +2.3%. [Global & FX] 1 Comment
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12:17 PM Thousands of opponents of the $5B Minas Conga copper and gold project in Peru march on Lake Perol, vowing to stop Newmont Mining (NEM -3%) from eventually draining it to reservoirs NEM and partner Buenaventura (BVN -2.6%) are building. Protesters, who fear the mine would threaten their water, say they plan to build a permanent camp near the lake to impede work on the site. [Commodities, On the Move] Comment!
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12:14 PM A Swiss court gives Suntech's (STP +5%) European unit a 6-month moratorium on creditor claims; the unit had been given a 2-month reprieve on April 9. Suntech's Chinese subsidiary remains in the midst of bankruptcy proceedings. Shares have more than tripled from a March 21 low of $0.30. [Tech, On the Move] Comment!
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12:08 PM Ingersoll-Rand (IR +1.9%) completes its $1.55B debt offering consisting of 3 tranches; $350M in aggregate principal amount of 2.875% notes due in 2019, $700M of 4.25% notes due in 2023, and $500M of 5.75% notes due in 2043. The company plans to use the funds to retire existing senior debt and to fund expenses related to its Allegion spinoff. [On the Move] Comment!
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12:07 PM T-Mobile USA (TMUS) will be the exclusive U.S. seller of Sony's (SNE +2.8%) Xperia Z Android phone, which has posted strong international sales taken a big chunk of the high-end Japanese smartphone market. Together with a recent exclusive for Nokia's Lumia 925, the deal suggests T-Mobile is having more luck with smartphone OEMs following the MetroPCS merger. Also: Canaccord has launched coverage on T-Mobile with a Hold and $22 PT. The firm views T-Mobile as an attractive M&A target for the company that fails to acquire Sprint/Clearwire, but considers shares fully valued. [Tech] Comment!
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12:00 PM On the hour: Dow +0.72%. 10-yr -0.05%. Euro +0.3% vs. dollar. Crude +0.1% to $98.13. Gold -1.29% to $1365.25. Comment!
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11:54 AM AIG slips 0.9% in an up market as Bernstein's Josh Stirling says investors may want to brace themselves for a headline announcing the termination of the deal to sell an 80% stake in ILFC. Would it be such a bad thing? At least one comparable - Aircastle Limited (AYR) - has rallied 40% since the deal to sell ILFC was inked. Perhaps ILFC would command more than a $5.2B valuation today. [Financials] 3 Comments
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11:50 AM Newfield Exploration (NFX +3.6%) is upgraded to Buy from Hold with a $29 price target at Stifel Nicolaus, which cites an upcoming increased proved NAV from expected ~$1.15B in H2 international asset sales, upside to 2013 guidance (possibly with Q2 results), and delivery of growth showing up from its domestic core areas. [Energy, Quick Ideas, On the Move] Comment!
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11:50 AM SolarCity (SCTY +3%) trades higher this morning after the company reported earlier that its 2013 megawatts deployed is now estimated to be around 270MW, up from mid-May guidance of 250MW. [Energy, On the Move] Comment!
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11:49 AM More on AMD: Though Seattle is dominating headlines, the company remains committed to the x86 server CPU market. Berlin, an x86 CPU platform due in Q114, will feature 4 cores based on AMD's next-gen Steamroller architecture, and will be offered as both a CPU and APU (integrated graphics), with the APUs being the first to offer uniform memory access for the chip's CPU and GPU. AMD promises big improvements in performance/watt. Also due in Q114 is Warsaw, an enterprise-class offering said to be ideal for Facebook's Open Compute Platform (previous). AMD has been bleeding share to Intel in the x86 server CPU space (PR) [Tech] Comment!
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11:39 AM "A mid-single digit operating margin over the next 2-3 years is reasonable," says Piper's Stephanie Wissink of Wet Seal (WTSL +0.7%) in a cautious note. Although "sales stability, merchandise margin improvement, and cost leverage" should drive margin expansion, "the current environment" warrants trepidation regarding store growth expectations, she adds. Meanwhile, SA contributor Unbigoted Research says the stock could be "the turnaround story of 2013". [Consumer] Comment!
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11:37 AM Raytheon (RTN +0.3%) says it's received a $115.9M contract to provide engineering services for the Patriot Air and Missile Defense System. Under the contract, RTN will provide systems analysis, software development, testing and logistics support, as well as other NATO country-specific system requirements. [Global & FX] Comment!
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11:35 AM KBR (KBR +1.6%) shares move higher following positive comments by Deutsche Bank, which notes the energy engineering services company's "significant advantage" given its ability to compete from a vertically integrated position in liquefied natural gas, and sees upside potential from new wins for its ammonia business. [Energy, Quick Ideas, On the Move] Comment!
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11:35 AM AMD's first ARM-based server CPU, codenamed Seattle, will enter production in 2H14, the chipmaker announces. Seattle CPUs will feature 8 or 16 of ARM's (ARMH) high-end Cortex-A57 cores, with each running at 2GHz. or more. AMD claims the chips will "offer 3-4x the performance" of its new Opteron X-Series parts, and will integrate 10G Ethernet links and SeaMicro's Freedom Fabric tech. Seattle, aimed at the budding microserver market, will face competition from fellow ARM licensees AppliedMicro (AMCC +6.5% - appears to be rallying on the news), Marvell (MRVL), and startup Calxeda, and also Intel's Atom CPUs. Look for H-P to consider Seattle for its Moonshot server line. [Tech, On the Move] Comment!
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11:30 AM Hudson City Bancorp (HCBK +2%) pops as M&T Bank (MTB +0.6%) looks to soon be able to move forward with its purchase after agreeing with regulators to beef up its anti-money laundering policies. [Financials, M&A, On the Move, Breaking News] Comment!
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11:27 AM UBS initiates Insmed (INSM +0.7%) at Buy with a $17.50 price target representing a 37% upside. Arikace "has a solid chance of success in its primary indication of cystic fibrosis," analyst Matthew Harrison says, adding that the "underappreciated" non-tuberculous mycobacteria opportunity could be another growth catalyst going forward. (Previous: Arikace's NTM indication possibly more compelling than CF opportunity) [Healthcare] 1 Comment
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11:24 AM DreamWorks Animation (DWA +1.9%) signs a multi-year deal with German broadcaster RTL to produce animated TV shows. Under the agreement, the company will supply the leading children's TV channel in the nation with a steady stream of shows based on characters from its franchises. [Consumer] Comment!
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11:21 AM Brazil (EWZ, BRF) has to be nearing a bottom. After a couple of years of struggles for both the economy and the Bovespa, the eulogies are beginning to be written for the planet's next great country, lately been beset by waves of protests and evaporating support for President Rousseff. "The golden days are over, the feel-good factor is lost," says an economics professor. "It was a short-lived dream," says a struggling electrician.
[Global & FX] 5 Comments -
11:17 AM Penn Virginia (PVA +1.1%) says it received $21.4M from the exercises of preferential rights related to the recent $400M Eagle Ford Shale acquisition, resulting in expectations for 2013 cash flows and capex to decrease by 1%-1.5% each while 2013 production is expected to decrease by ~1%. [Energy] Comment!
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11:16 AM Heard during Wal-Mart's (WMT +0.4%) presentation at the Jefferies Global Consumer Conference: 1) Sam's Club CFO Michael Dastugue notes online channels are picking up as the chain dabbles with more social media promotions. 2) On products trending well, Dastugue notes mattress sales are strong. Should Sealy (ZZ) and Tempur-Pedic (TPX) be worried with Serta and Night Therapy leading sellers at Sam's? 3) The company plans to open 15-20 new and relocated clubs during FY14. 4) New tech initiatives include self checkout kiosks, convertible registers, and scan & go testing. (webcast) [Consumer] Comment!
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11:09 AM Stemline Therapeutics (STML +10%) moves up again today after being initiated at Ladenburg Thalmann with a Buy rating and a hefty $36 price target. The stock has been moving steadily higher over the past few weeks, after the FDA granted an Orphan Drug Designation to its treatment for blastic plasmacytoid dendritic cell neoplasm, SL-401. [Healthcare, On the Move] Comment!
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11:06 AM Goldman yanks Palo Alto Networks (PANW -1.7%) from its Conviction Buy list, leading the next-gen firewall leader to make fresh post-IPO lows. The firm defended Palo Alto late last month, after shares were clocked thanks to an FQ3 revenue miss (blamed on macro) and soft FQ4 guidance. [Tech] 2 Comments
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11:01 AM Sun Life Financial (SLF +0.9%) inks a "game-changing" deal with the Canadian Wheat Board, transferring (for a fee) all of the Board's pension plan risk to the insurer. It's the first of its kind in Canada, says Sun Life, which has been actively seeking such deals since General Motors and Verizon struck similar agreements with Prudential last year. [Financials] Comment!
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11:00 AM On the hour: Dow +0.68%. 10-yr -0.12%. Euro +0.2% vs. dollar. Crude +0.2% to $98.23. Gold -1.38% to $1364.05. Comment!
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10:59 AM Health Net (HNT +1.1%) reaffirms its FY13 guidance of $2.20 - $2.30 per share on revenues of between $10.7B - $11.2B. Street estimates are for an EPS of $2.23 on revenues of $11.17B. [Healthcare, On the Move, Earnings] Comment!
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10:55 AM Reuters backs up the WSJ in reporting Siemens (SI +0.8%) is talking to P-E firms TPG, KKR, and Blackstone about selling its 50% stake in Nokia Siemens; the news service adds past attempts to sell to P-E firms have failed due to price disagreements. Meanwhile, Goldman is assigning NSN a value of €6B, based on a valuation of 6x 2014E EV/EBITDA. [Tech, M&A] Comment!
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10:54 AM With liquidity a relevant topic lately among coal companies, Alpha Natural Resources (ANR +2.1%) proactively tells a Brean Capital analyst it is confident in its current liquidity to meet $417M in debt obligations due in 2015 without tapping equity, which ANR sees as a poor option at today's prices. ANR also says it isn't inclined to employ its current liquidity toward additional acquisitions. [Energy, On the Move] 1 Comment
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10:49 AM Amazon (AMZN +1.2%) tries to profit from the growing use of Facebook (FB +2.8%) as a "social gifting" platform by launching Amazon Birthday Gift, a solution that allows Facebook users to send a friend Amazon credit for his/her birthday, and then lets other friends to add to the pot. The product is separate from Facebook's Gifts platform. Also: 1) Leveraging existing content deals, Amazon is adding videos and games from Disney, Viacom, Warner Bros., and Electronic Arts to its Kindle Freetime kids' platform. The move comes shortly after a major deal was reached with Viacom for kids' shows. 2) AdAge reports Facebook's video ads will be delayed until fall. The magazine reported in April Facebook plans to charge up to $1M per daily ad slot. [Tech, Consumer] 1 Comment
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10:48 AM Jefferies sees a 33% upside for shares of AcelRx (ACRX -1.1%), raising its price target to $13 from $8. Analyst Corey Davis makes "numerous model adjustments as [the company] moves closer to an NDA filing for ARX-01" and notes that the "next catalyst" is analyst day on July 27. Mark your calendar. [Healthcare] 1 Comment
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10:45 AM Sunshine Heart (SSH +8%) pops after achieving a milestone for its flagship C-Pulse device, which is designed to treat Class III and ambulatory Class IV heart failure. The company said the devices has been implanted in 25 patients in North America and Germany, with the 25th patient implanted on June 14th at the German Heart Institute in Berlin. [Healthcare, On the Move] 3 Comments
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10:43 AM Heard during a presentation by McDonald's (MCD +1.1%) at the Jefferies Global Consumer Conference: 1) The company gives out more details on its After Midnight menu at select locations, noting that the Midnight to 4:00 AM fare will include popular breakfast items. 2) Execs says the 1,500-1,600 planned new restaurants and another 1,600 re-images will help lift sales by 6% to 7% after one year. 3) The dollar menu will continue to be focus and will see new items added later this year. (webcast, slides) [Consumer] Comment!
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10:42 AM Panicky fixed-income investors have sent implied volatility through the roof on normally quiet bond funds like the High Yield Corporate Fund (HYG) and the Investment Grade Corporate Bond Fund (LQD). It could spell opportunity as large price declines in many bond funds have overwhelmed the actual drop in NAV. [Financials] 1 Comment
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10:41 AM Walter Energy (WLT +12%) finally turns around since dropping 12% after delaying plans to refinance existing debt, as Morgan Stanley steps in to say WLT's potential upside has finally grown too large to ignore. Other coal names (KOL +0.6%) also move higher, perhaps aided by Sterne Agee's slightly improved view for the sector:ACI +4.2%, CLF +3.2%, ANR +3%, BTU +1.3%. [Energy, On the Move] Comment!
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10:31 AM Lennar (LEN -1.7%) expands its homebuilding operations into the Nashville, Tennessee market by acquiring control of approximately 40 homesites in the Tollgate Village community. The company says been evaluating the Nashville market for some time and "believes this is a perfect time to enter." The expansion into the Tennessee market is similar to LEN's other recent strategic moves into the Atlanta, Seattle, Portland and Central Texas regions, and now gives the company operations in 19 states and 46 markets across the nation. [Consumer] Comment!
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10:29 AM Kimberly-Clark (KMB -0.4%) plans to invest $234M in Venezuela in order to expand manufacturing capabilities with the nation facing a national shortage of critical bathroom products. The company currently has 15% of the market for toilet paper in the nation, but that mark could be on the rise with capacity slated to be boosted by 30% to 40%. [Consumer] Comment!
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10:23 AM Investment bank Jefferies - now fully owned by Leucadia (LUK) - reports FQ2 profit of $42M, off 34% Y/Y. The company saw a "significant slowdown" in fixed-income trading in March and April, says Leucadia CEO Richard Handler, blaming uncertainty over the Fed's QE program. [Financials] Comment!
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10:20 AM CommVault (CVLT +3.3%) rallies after Pac Crest starts coverage with an Outperform and $92 PT. The firm notes CommVault is gaining share (IDC's figures back that up), and expects the high-end backup software vendor to benefit from a new product cycle - CommVault announced a new version of its flagship Simpana backup/archiving software platform in February. [Tech, On the Move] 1 Comment
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10:15 AM PennyMac Mortgage Investment Trust (PMT -1.1%) is downgraded to Sell at Ladenburg Thalmann. The move stands in contrast with Compass Point's Buy recommendation from last week in which Kevin Barker argued the housing recovery should allow continued gains from PMT's distressed loan portfolio and the stock trades at a meaningful discount to its mREIT peers. [Financials, On the Move] 2 Comments
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10:13 AM Mechel (MTL +11.2%) leaps higher on news the company's board authorized the buyback of up to $100M of ADRs representing Mechel's common shares. [Commodities, On the Move] Comment!
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10:10 AM Leerink Swann (Outperform) is "marginally more encouraged" on Genomic Health (GHDX -0.5%) after conversations with two urologists. As it turns out, both doctors "had already ordered" the company's prostate cancer test even though they "had mixed views" on its utility. Apparently this is good news as analyst Dan Leonard now sees "upside to prostate test volume expectations." [Healthcare] Comment!
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10:02 AM Chesapeake Energy (CHK) on Monday named as chief compliance officer a lawyer it had previously hired to respond to an SEC investigation. Patrick Craine was hired to augment CHK's regulatory and legal compliance efforts after last year handling the SEC's inquiry into the controversial perk that granted former CEO Aubrey McClendon a share in each of CHK's wells. [Energy] 1 Comment
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10:01 AM Todd Bradley, the well-respected head of H-P's (HPQ +1%) PC/printer unit, is leaving that position to head H-P's Chinese ops and work on expanding its global channel partner deals (his official title will be EVP, Strategic Growth Initiatives). Asia-Pac PC/printer chief and former Lenovo exec Dion Weisler will take over Bradley's current job. The shakeup follows a quarter in which H-P's PC sales fell 20% Y/Y, and more share was lost to Lenovo. Printer sales fell 1%, an improvement from recent quarters. Bradley's name has occasionally come up when high-profile job openings at rivals are discussed. [Tech] 4 Comments
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10:00 AM On the hour: Dow +0.32%. 10-yr -0.12%. Euro +0.15% vs. dollar. Crude +0.49% to $98.51. Gold -1.06% to $1368.45. 1 Comment
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9:58 AM Paris Air Show: Boeing (BA) has signed an agreement to lead the sales of Embraer's (ERJ) KC-390 military transport plane in the U.S., U.K. and in the Middle East. The deal comes a year after the companies signed a technical agreement and as Boeing attempts to win a lucrative contract to sell its F-18 fighter aircraft to Brazil, where Embraer is based. Boeing's Chris Raymond said one deal had nothing to do with the other. Sure. (PR)
1 Comment -
9:58 AM Premier Exhibitions (PRXI +11.8%) races higher, boosted by the announcement of a buyback authorization and SA Pro's nonpareil special situations aficionado Whopper Investments arguing the stock is trading well below a very conservative estimate of breakup value (article embargoed until tomorrow morning). [On the Move, Quick Ideas] Comment!
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9:54 AM Goldman downgrades Charles River Labs (CRL -1.7%) to Sell from Neutral and lowers its price target to $38 from $44. Analyst Robert Jones cites (among other factors) "recent … channel checks [which] indicate still subdued early-stage spend and excess capacity as pharma prioritizes late-stage pipelines." [Healthcare, On the Move] Comment!
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9:53 AM New Oriental Education & Technology (EDU +0.9%) continues to be the subject of privatization chatter, according to the South China Morning Post. The company has been slowly recovering its footing after closing under-performing schools and riding out an attack from a short seller. [Consumer] 1 Comment
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9:48 AM Yahoo (YHOO +1.1%) is looking to buy address book app developer Xobni for $30M-$40M, and video creation app developer Qwiki for $50M, Kara Swisher reports. Xobni, reported to be on Yahoo's shopping list earlier in June, is said to consider Yahoo "the most natural home for it, given its strong e-mail offerings." Qwiki originally built a site and iPad app that automatically created multimedia "stories" for reference topics (a deal was reached with Yahoo partner Bing), but has since shifted its attention to an app for creating movies out of a user's photos and videos. Regardless, its video automation tech likely intrigues a company that just bought Summly. [Tech, M&A] 1 Comment
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9:48 AM BHP Billiton (BHP -1.2%) is revisiting plans to develop a coking coal deposit in Australia's Queensland state, seeking environmental approvals to extend production at two mines and retaining the option of another underground mine to develop more of the Red Hill deposit. The move comes even as BHP downplays the strength of extra demand from China amid an expected glut of steel in Asia. [Energy] Comment!
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9:45 AM MSCI's reclassification of Greece to emerging market is a yawner as far as ETFs go, writes Dennis Hudachek, as the country's presence in the EFA is less than 0.10%. With Coca-Cola Hellenic (CCHBF.PK) no longer part of the MSCI Greek Index, the country's addition to the EEM will be of minimal effect. [Global & FX] Comment!
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9:44 AM A nasty bout of late-session selling sends Thai shares (THD -3.4%) plunging nearly 3%, bucking a generally positive regional trend. Philippine stocks (EPHE +2.3%) rise 2.83% in Manila while shares in Indonesia (IDX +1%) and Singapore (EWS +0.9%) post solid gains. [Global & FX] Comment!
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9:43 AM More on GSK (GSK -0.3%) / Aspen (APNHF.PK) deal: Reuters speculates that GSK's sale of its thrombosis drug brands Arixtra and Fraxiparine to Aspen could be worth £700M, or twice this year's anticipated sales of around £350M. That would be down from £420M in 2013 and £510M in 2011. Around 1,000 GSK workers, mostly in France, would transfer to Aspen. News of the prospective sale prompted speculation that GSK may look to offload other older drugs. [Healthcare, M&A] Comment!
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9:31 AM Acadia Pharmaceuticals (ACAD +0.4%) says data from a Phase III trial of pimavanserin suggest the treatment is well-tolerated and effective when administered long-term. (See also: JMP, SA contributor weigh in on ACAD) [Healthcare] 1 Comment
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9:31 AM At the open: Dow +0.2% to 15211. S&P +0.13% to 1641. Nasdaq +0.21% to 3459.
Treasurys: 30-year -0.23%. 10-yr -0.15%. 5-yr -0.1%.
Commodities: Crude +0.39% to $98.41. Gold -0.73% to $1372.95.
Currencies: Euro -0.06% vs. dollar. Yen +1.13%. Pound +0.91%. Comment! -
9:29 AM Cytokinetics' (CYTK) results from a Phase II trial of its of omecamtiv mecarbil treatment for heart failure have been accepted for presentation at a "Hot Line Late Breaking Trials Session" at the European Society of Cardiology Congress 2013, which is taking place from Aug. 31 until Sep. 4. Cytokinetics' hasn't revealed any results but shares are up 14.4%. Those of partner Amgen (AMGN) are a mere +0.7%. In other news, Cytokinetics is set to join the Russell Global Index on June 28. [Healthcare, On the Move] Comment!
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9:29 AM Tesoro (TSO) said late Monday it struck a deal to sell its Kapolei refinery and other assets in Hawaii to Par Petroleum (PARR.OB) for $300M-$350M. Par will pay TSO $75M, plus working capital of $225M-$275M, for the idled 94K bbl/day refinery; the deal includes the purchase of retail stores and associated logistics. [Energy] Comment!
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9:27 AM Shares of Ship Finance (SFL) fall 5.9% premarket after the company announces an 8M share public offering of stock to be priced at prevailing market prices. Funds from the offering are slated to be used to invest in new shipping assets. [Consumer, On the Move] Comment!
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9:26 AM Fusion-io (FIO) -1.6% as in spite of a bullish coverage launch from Needham, as investors continue mulling negative sell-side commentary and the resignations of founders David Flynn and Rick White from the company's board (following their May resignations as CEO and CMO). RBC declares Flynn's departure serves to "validate investor concerns, that the transition wasn’t as amicable as one would expect." Needham argues investor sentiment is bottoming, says checks indicate FIO "remains in the pole position" in the hyperscale data center realm, and that product launches this year and next "should re-establish FIO as a technology innovator." [Tech] Comment!
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9:20 AM Chembio Diagnostics (CEMI) jumps 3.4% premarket after saying its FDA-approved Clearview COMPLETE HIV 1/2 assay has received CE Mark approval in Europe. The product will be marketed in the EU under the name SURE CHECK, and CEMI says it expects sales as soon as Q1 2014. (PR) [Healthcare, On the Move] Comment!
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9:19 AM Steel Dynamics (STLD) issues downside guidance for Q2, seeing EPS of $0.10-$0.14 vs. $0.24 consensus estimate, citing anticipated slower economic growth in China. Overall steel shipments are expected to rise slightly Q/Q, as decreases in merchant bar volume should be more than offset by increased sheet and other long product shipments. [Commodities] Comment!
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9:18 AM In maybe more good news for CommonWealth REIT (CWH) shareholders, proxy advisory firm Glass Lewis - typically a supporter of managements - recommends clients vote to remove the entire board of the company. "(Management's) interests are significantly misaligned with those of CW's shareholders ... and the external management structure provides for value transfers to the Manager irrespective of the losses realized by investors in the Trust." [Financials] Comment!
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9:16 AM Adidas (ADDYY.PK) thinks sales of soccer-related products will rise to €2B ($2.7B) next year as the World Cup in Brazil drives demand. Nike (NKE) also is betting heavily on the global event - including a sponsorship of the popular national team from the host country. Sales of soccer apparel/gear is expected to be high enough in 2014 to also move the needle for Dick's Sporting Goods (DKS). [Consumer] Comment!
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9:15 AM Market preview: U.S. stock futures and European shares are flat-to-higher after U.S. CPI comes in slightly below expectations and as the FOMC meets on the first day of a two-day policy meeting. The S&P Mini is flat. "Today should be quiet, as people are only asking about tomorrow," says economic strategist Andrew Wilkinson. Sony is +4.25% after Dan Loeb ups the ante over a spin-off for the company's entertainment division. Ongoing: Paris Air Show [Top Stories, On the Move, U.S. Economy, Global & FX] Comment!
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9:11 AM BAML private clients bought the dip last week, with the flows going via ETFs into large-cap and dividend plays like Utilities (XLU, IDU) - which saw the greatest buying since November 2011. Another favorite of the dividend crowd, Telecoms (IYZ) saw the biggest inflows since February. After buying through the spring, hedge funds turned sellers last week, and are now net-sellers YTD - just like 2012. Comment!
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9:10 AM LinkedIn (LNKD) +1.4% after Pac Crest starts coverage with an Outperform and $215 PT. ITG Research raised its estimates for the company on Friday. [Tech] 1 Comment
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9:09 AM Danish shipper A.P. Moller-Maersk (AMKAF.PK) says the world’s three biggest shipping container operators have entered an alliance to reduce fuel consumption and improve service and operations. The P3 alliance, which also includes MSC Mediterranean Shipping and CMA, will operate a capacity of 2.6M containers between Asia and Europe, across the Pacific and Atlantic oceans. [Energy, Global & FX] 2 Comments
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9:07 AM Starbucks (SBUX) will be the latest restaurant chain to post calorie information on menu boards across the country. The company continues to try to position itself as a healthy alternative to fast food fare with its new grab-and-go lunches and line of Evolution Fresh juices, but also has its share of calorie headaches if whips, milks, and sugary options are included in beverage calorie counts. [Consumer] 2 Comments
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9:06 AM Exide Technology (XIDE) jumps 17.65% after a judge ruled that the maker of lead-acid batteries can reopen a plant in California that was closed by the state's Department of Toxic Substances Control. The permission to reopen is pending a hearing next month. The department had ordered Exide, which recently filed for Chapter 11, to suspend operations at the plant in April, saying the facility's arsenic emissions posed “an unacceptable risk to public health.” [On the Move] Comment!
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9:00 AM On the hour: S&P +0.04%. 10-yr -0.15%. Euro -0.10% vs. dollar. Crude +0.23% to $98.26. Gold -0.64% to $1374.25. Comment!
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9:00 AM Campbell Soup's (CPB) acquisition of Danish firm Kelsen Group is a move designed to boost the company's presence in China and other global markets, according to food industry analysts. With its 20-year history of growing brands in China, Kelsen provides a convenient shortcut to the booming sweet biscuits market in the nation. [Consumer] Comment!
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8:58 AM Goldman Sachs removes Williams Cos. (WMB) from its Conviction Buy List and lowers its price target to $40 from $45, and cuts Williams Partners (WPZ) to Neutral from Buy with a $52 price target, down from $58. Goldman believes last week's explosion at the Geismar chemical plant adds material risk to near-term growth of both WMB and WPZ, putting dividend growth targets at risk. WMB -1.9% premarket. [Energy, Quick Ideas, On the Move] Comment!
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8:58 AM Erickson Air-Crane (EAC), still stinging from a sell-off last week triggered by SA contributor Richard Pearson's ZM Funds questions, rises 5.5% premarket after announcing a contract extension worth some $24M. (PR) [On the Move] Comment!
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8:55 AM Paris Air Show: Pratt & Whitney is having a good week, with LATAM Airlines choosing the company's geared turbofan engines to power 42 Airbus A320 aircraft in a deal worth $1.4B (PR). The booking adds to orders for 730 engines that P&W will receive for its geared turbo fan engine after it was picked for Embraer's next-generation E-Jet. P&W has also received a booking to power 12 A320s from Aviation Capital Group (ACG) (PR). The United Tech (UTX) unit expects revenue to double to over $24B by 2020 from $12.2B in 2010. Comment!
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8:54 AM "The biggest contrarian play in the market today is assets linked to China (FXI, CAF)," says Michael Hartnett, summarizing BAML's latest Fund Manager Survey, which shows money flowing out of commodities (DBC) and emerging markets (EEM, DEM, VWO). Where's the money going? The eurozone and the U.S. Where it's not going is fixed-income (AGG, BND) - 50% of managers say they're now underweight bonds as opposed to 38% last month. Comment!
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8:49 AM MEI Pharma (MEIP) announces the dosing of the first patients in a Phase II trial of the myelodysplastic syndrome treatment Pracinostat, the company's lead candidate. CMO Robert Mass calls the initiation of Phase II clinicals "an important milestone." (PR) [Healthcare] Comment!
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8:49 AM BHP Billiton's (BHP) plans to sell a coal mine in New Mexico to the Navajo Nation for ~$85M have been derailed by proposed reforms of the state's electricity market. The Navajos had expected to close a deal with BHP by July 1, but it can't go ahead until a separate deal is completed between two utilities for part of a power station that buys coal from the mine on Navajo land. [Commodities] Comment!
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8:42 AM Camtek (CAMT) lands near the top of the "premarket gainers" list, rising 10.5% before the bell after saying it has entered into a frame engagement for 10 semiconductor inspection systems. The first order is worth "in excess of $2M," the company says. (PR) [On the Move, Tech] Comment!
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8:42 AM Oppenheimer lifts its price target on SodaStream (SODA) to $85 following the company's intriguing deal with Whirlpool to jointly develop a home carbonation system. SODA +1.5% premarket to $72.05. [Consumer] 1 Comment
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8:37 AM Diamondback Energy (FANG) launches a secondary offering of 5M common shares, with ~3.4M shares are being sold by Wexford Capital and 1.6M by Gulfport Energy (GPOR). FANG, which had 37.2M shares outstanding as of March 31, won't get any proceeds from the offering. [Energy] Comment!
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8:36 AM More on Housing Starts: Total starts were up 6.8% from April, up 28.6% from a year ago. Single family starts in were about flat M/M. Total building permits of 974K fell 3.1% M/M, and gained 20.8% Y/Y. Single family permits rise 1.3% M/M. (full report) [U.S. Economy] 6 Comments
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8:34 AM Two studies demonstrating the clinical utility of microarray testing over karyotyping continue to drive an increase in the volume of prenatal testing, CombiMatrix (CBMX) says. Shares are up 17% premarket. [Healthcare, On the Move] Comment!
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8:33 AM GlaxoSmithKline (GSK) has received an offer from South Africa's Aspen Pharmacare (APNHF.PK) for its thrombosis drug brands Arixtra and Fraxiparine (excluding China, India and Pakistan), and the related manufacturing site. GSK said any sale would fit in with its strategy of focusing on growth products and the delivery of its pipeline. (PR) [Healthcare, M&A] Comment!
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8:31 AM Tim Hortons (THI) has attracted the attention of a second hedge fund with Scout Capital Management increasing its stake to 5.5% and tipping off it plans to raise some issues with management. Earlier this year, Highfields Capital pushed the Tim Hortons board to consider U.S. expansion. (13D) [Consumer] Comment!
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8:30 AM May Housing Starts: 914K vs. 950K forecast, 856K previous (revised from 853K). [U.S. Economy, Breaking News, Top Stories] Comment!
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8:30 AM May Consumer Price Index: +0.1%;vs. +0.2% expected, -0.4% prior. Core CPI +0.2%; in-line with expectations, +0.1% prior. [U.S. Economy, Top Stories] 5 Comments
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8:24 AM A profit warning from Hormel is enough to scare off some investors across the sector. Premarket: Tyson Foods (TSN) -1.3%, Pilgrim's Pride (PPC) -2.0%, Seaboard (SEB) inactive. [Consumer, On the Move] Comment!
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8:24 AM First production from the Majnoon field being developed by a consortium led by Royal Dutch Shell (RDS.A) is expected in July with total output reaching 175K bbl/day by year's end, according to the top energy advisor to Iraq's Prime Minister. But not likely to please the government is news that Chevron (CVX) and Total (TOT) are expanding exploration rights in Kurdish territory (I, II). [Energy] Comment!
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8:19 AM Hormel (HRL) lowers estimates for profitability this year, dropping its EPS outlook to $1.88-$1.96 from prior guidance of $1.93-$2.03. The company cites higher input costs and poor pork sales for the shortfall. HRL -9% premarket, working off much of the gains picked up from enthusiasm in the sector after Smithfields Foods was bought out. [Consumer, On the Move] 2 Comments
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8:19 AM Patients with Parkinson's disease showed a 60% mean improvement in motor function after six months in a trial of Boston Scientific's (BSX) Vercise DBS (deep brain stimulation) System. The implant is designed to selectively stimulate targeted areas when inserted in the brain. The study involved 40 subjects. (PR) [Healthcare] Comment!
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8:15 AM More on ICSC Retail Sales: The retail sector put in a mixed week with department stores, electronics store chains ([[RSH[[, BBY), and drug stores (CVS, WAG, RAD]]) strong for the period, but sales at dollar stores (DG, DLTR, FIVE, FDO) and wholesale clubs (COST, PSMT) notably weak. After last week's drop in sales cut into forward progress, the year-over-year gain in retail chain store sales stands 2.5% higher after threatening a 3% pace earlier in the year. [U.S. Economy] Comment!
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8:11 AM John Wiley & Sons (JW.A): FQ4 EPS of $0.71 misses by $0.09. Adj. Revenue of $446M beats by $5M. (PR) [Earnings, Breaking News] Comment!
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8:10 AM Duke Energy (DUK) names Lynn Good as its next president and CEO, succeeding Jim Rogers, who will continue to serve as chairman of the board until his Dec. 31 retirement. Good had served as DUK's executive VP and CFO since 2009, and had held management positions at Cinergy, Deloitte & Touche and Arthur Andersen. [Energy] 3 Comments
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8:06 AM Toys "R" Us reported sales fell 7.8% to $2.4B during its FQ1 as cold weather contributed to slow demand. Comparable store net sales dropped 8.4% in the U.S. and 6% in the international segment. The below-par performance from the toy seller doesn't bode particularly well for Hasbro (HAS) and Mattel (MAT). [Consumer] 1 Comment
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8:05 AM Luxor Capital (about $5B in AUM) boosts its stake in American Realty Capital Properties (ARCP) to more than 17M shares (9.2% of the company) from about 4M previously. The stock is now Luxor's 3rd largest individual holding. Other REITs owned by Luxor include: CommonWealth (CWH), Realty Income (O), Equity Residential (EQR), and AvalonBay (AVB). [Financials] Comment!
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8:03 AM KeyBanc is "incrementally positive on chicken," but that doesn't mean any price will do for shares of Sanderson Farms (SAFM) which are downgraded to Hold from Buy. In a valuation call, analyst Akshay Jagdale says protein companies have generally traded at a 12-14 multiple over the past seven years and at 13.8x estimates, SAFM's valuation is "full." [Consumer] Comment!
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8:00 AM On the hour: S&P +0.1%. 10-yr -0.04%. Euro +0.06% vs. dollar. Crude -0.15% to $97.89. Gold -0.62% to $1374.55. Comment!
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7:55 AM Royalty Pharma withdraws its request for a judicial review of a decision which required it to lapse its bid for Elan (ELN). Previously, the Irish Takeover Panel said the company could not modify the terms and conditions of its takeover bid after the fact. (previous) [Healthcare, M&A] Comment!
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7:54 AM The rumored iWatch will be more "hobby" than major product line for Apple (AAPL), says Jefferies' Peter Misek. Likely not having a cellular chip, the iWatch would need to be paired with an iPhone for full functionality. Starting with some pricing assumptions and then slapping a 5% penetration on the installed iPhone base of 250M would move the EPS needle by only about 1%. [Tech] 15 Comments
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7:52 AM Mechel (MTL) reports a Q1 net loss of $321M, with adjusted EBITDA of $210M and a 16% Y/Y decline in revenues to $2.48B, as the Russian miner says it was hurt by unfavorable price trends in global markets but expects changes to its asset structure and debt portfolio will enable it to survive an extended slowdown. MTL +1% premarket. [Commodities, Earnings] Comment!
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7:52 AM Shares of Sony move up 3.6% premarket after Dan Loeb turns up the heat on his proposal to see the company spin off its entertainment business. What to watch: Sony holds its annual meeting on Thursday where execs will have to either publicly back a plan to keep the firm together or leave the door open just a crack that a spinoff is a possibility. [Consumer, Global & FX, On the Move] Comment!
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7:47 AM ICSC Retail Store Sales: +0.3% W/W, vs. -2.7% last week. +2.5% Y/Y vs. +2.2% last week. [Consumer] Comment!
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7:46 AM The FOMC will be able to chew on inflation data for May when it meets today, with the reading due out this morning. Economists expect that CPI rose 0.2% on month after sliding 0.4% in April, driven up by slightly higher food and gasoline costs. "Inflation is low in the U.S. at the moment, giving the Fed more room to wait for improvement in employment before it starts tapering," say analysts at Danske Daily. [U.S. Economy, Top Stories] Comment!
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7:45 AM American Capital Realty Properties (ARCP) will be added to the Nasdaq Financial-100, the Russell Global, and Russell 3000 indexes, effective June 24 for Nasdaq and July 1 for Russell. The company also expects to be added to the Russell 2000 - the small-cap subset of the Russell 3000. (PR) [Financials] Comment!
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7:44 AM The FDA grants Investigational Device Exemption for a clinical study of focal ablation in prostate cancer with AngioDynamics' (ANGO) NanoKnife. Patient enrollment is set to begin in FQ2 which ends on November 30 of this year. (PR) [Healthcare] Comment!
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7:40 AM China National Petroleum (PTR) and France's Total (TOT) reportedly are set to finalize an agreement with Tethys Petroleum (TETHF.PK) to develop oil and gas assets in Tajikistan. "Based on the audited figure, there is enough gas in Tajikistan in our area to supply China's natural gas demand in the next 25 years," Tethys' executive chairman says. [Energy] Comment!
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7:38 AM People's United Financial (PBCT) is upgraded to Buy with price target of $15.50 (from $13.50) at JPMorgan, which calls the current price just south of $14 an attractive entry point. [Financials] 2 Comments
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7:28 AM Hong Kong extends it Hibor-rigging investigation (previously limited to UBS) to include HSBC (HBC) and a number of other banks, according to the central bank. In other rate-rigging news, it's bracelets for an ex-UBS trader as the U.K. launches criminal charges against him. [Financials, Global & FX] Comment!
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7:15 AM Skullcandy (SKUL) says it will it has started a search for a new CFO to replace the resigned Kyle Wescoat and shuffled other key execs. As part of its transition, the company will align certain product, marketing and sales functions. [Tech] 1 Comment
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7:12 AM Putting to rest any doubt about whether Bernanke will seek a third term as FOMC chief, the President tells Charlie Rose the chairman has already stayed "a lot longer than he wanted or he was supposed to." [U.S. Economy] Comment!
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7:07 AM Gold (GLD, IAU) bulls may take comfort as Dennis Gartman jumps on the bearish bandwagon, calling the metal an "aging athlete" and "a broken commodity." The man who loved "stuff that hurts when you drop it on your foot" 2 years ago says the price is headed to $1K if $1.2K support is broken. HSBC's James Steel disagrees, seeing strong physical demand lifting the price to $1.6K in H2 and $2K in the longer term. [Commodities] 9 Comments
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7:05 AM Jack In The Box (JACK) plans to close 67 Qdoba restaurants by the end of its current fiscal year after analyzing sales performance metrics. A charge of approximately $40M will be taken to cover costs associated with the closings. Expansion is still on tap for Qdboa, with the company saying 70 to 75 new outlets are scheduled to be opened this year and another 60 to 70 in 2014. [Consumer] Comment!
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7:00 AM On the hour: S&P +0.23%. 10-yr -0.09%. Euro +0.11% vs. dollar. Crude -0.23% to $97.81. Gold -0.51% to $1376.05. Comment!
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6:57 AM Ford (F) plans to add buttons and knobs to its MyFord Touch infotainment system on more models. The automaker is reacting to some criticism over the digital touchscreen which was called too complicated by some drivers. [Consumer] 4 Comments
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6:53 AM Commerzbank (CRZBF.PK, CRZBY.PK) will slash more than 5K jobs as part of its cost-cutting program, reports Reuters, which adds the bank has reached preliminary agreement with labor unions over the implementation of said cuts. Shares +1.2% in Frankfurt. [Financials] Comment!
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6:51 AM Fifth & Pacific (FNP) says a court in New York ruled in its favor in a trademark case involving its Kate Spade brand. The decision will allow the Kate Spade Saturday brand name to survive in the market in its current form. [Consumer] Comment!
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6:47 AM Rio Tinto's (RIO) recently on-the-block 59% stake in Iron Ore Co. of Canada draws the interest of state-owned Chinese giant Minmetals. "We have invested in the neighborhood before," President Wang Jionghui tells the WSJ. Active pursuit of a deal would depend on various factors such as partners, he adds. The stake likely has a value somewhere in the $4B range. [Commodities] Comment!
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6:41 AM North Carolina is the latest state to attempt to block Tesla Motors (TSLA) from selling electric vehicles directly to consumers. The state Senate has already approved a measure to ban Tesla from selling online in the state and the House could vote on it within weeks. [Consumer] 40 Comments
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6:24 AM China's determination to reign in the rapid growth of credit is being tested by a short-term credit squeeze at banks, with rates in the interbank funding market soaring and foreign-capital inflows slowing. The banks want the People's Bank of China to inject liquidity by cutting the reserve-requirement ratio, but so far the PBOC is holding firm and maintaining the tight conditions. [Global & FX] Comment!
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6:00 AM Overseas: Japan -0.2%. Hong Kong -0.02%. China +0.2%. India -0.5%. London +0.8%. Paris +0.1%. Frankfurt +0.02%. Comment!
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5:51 AM Paris Air Show: As widely expected, Boeing (BA) has officially launched the 787-10, a stretched version of the Dreamliner with up to 330 seats, and said it already has orders for 102 jets from five buyers (PR). One of these is United Airlines (UAL), which will be the launch customer in North America with a booking for 20 aircraft, including an upgrade on 10 existing 787 orders. Air Lease Corp. (AL) has booked 30 (PR). Meanwhile, Ryanair's (RYAAY) shareholders have approved the carrier's acquisition of 175 Boeing 737 aircraft in a deal worth $15.6B at list prices. [Top Stories] 2 Comments
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5:29 AM The German ZEW survey of investor confidence rises to 38.5 in June from 36.4 in May and tops consensus of 38.1; however, the current situation print falls to 8.6 from 8.9 and misses forecasts of 9.5. Sentiment for the eurozone climbs to 30.6 from 27.6. "The financial experts stick to their assessment: the German economy is likely to pick up speed in the second half of 2013," ZEW President Clemens Fuest said. "However, the results of the current survey indicate that the economy will improve rather slowly." (PR) [Global & FX] Comment!
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5:06 AM British Prime Minister David Cameron will lead talks on the exceptionally thorny topic of international tax reform at the G8 summit in Northern Ireland today. The discussion will focus on the key areas of transparency, tax havens and multinational tax avoidance. "We have made more progress in the last 24 hours than people have had in the past 24 years," U.K. Finance Minister George Osborne said. [Global & FX, Top Stories, U.S. Economy] 1 Comment
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4:55 AM The European Central Bank has numerous tools, whether they be "standard interest rate policy and non-standard measures," that it can "deploy if circumstances warrant," Mario Draghi says in a broad reiteration of commitments the ECB made last month. "We have been able to regain better control of monetary conditions in the euro area economy," which is important for being able to boost the economy with the "appropriate monetary policy." [Global & FX] 2 Comments
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4:43 AM Smithfield Foods (SFD) intends to review a letter from activist investor Starboard, which reckons that the pork producer could earn more value by splitting up into three and then selling itself rather than going through with its $4.7B acquisition by Shuanghui. However, Smithfield reiterated its recommendation that shareholders vote for the Shuanghui deal, as it provides "significant, immediate and certain" cash value to shareholders. [M&A] Comment!
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4:37 AM U.K. CPI +2.7% on year in May vs +2.4% in April and consensus of +2.6%. On month, CPI growth unchanged at 0.2% but above forecasts of +0.1%. (PR) PPI +0.8% on year vs +0.7% previously and consensus of +0.9%. On month, PPI -0.3% vs -2.3% and unchanged. (PR) [Global & FX, Top Stories, Breaking News] Comment!
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4:23 AM Paris Air Show: While defense companies are being hit by sequestration at home, they are enjoying increasing demand abroad for fighter jets, missile defense systems and other weapons. Air force sales doubled to $22B over the past two years, while the likes of Raytheon (RTN) are overbooked with meetings in Paris this week. Other vendors to benefit include Boeing (BA), United Tech (UTX), Lockheed Martin (LMT) and Textron (TXT). Comment!
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4:13 AM Asian and European (FEZ) shares are mixed as markets await the word from the FOMC, which is due to start a two-day session today. "I think the Fed is secretly sitting with its fingers crossed, hoping that the froth continues to be skimmed off asset markets," says analyst Nick Beecroft. "I don't think they will be bothered at all if the S&P 500 or other risk markets fall 5 or 10%, as long as it didn't happen in a (single) day." Japan -0.2%, Hong Kong flat, China +0.1%, India -0.2%. EU Stoxx 50 -0.2%, London +0.4%, Paris -0.2%, Frankfurt -0.1%, Madrid +0.4%, Milan +0.4%. [Global & FX, Top Stories, On the Move] 3 Comments
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3:59 AM Paris Air Show: Boeing (BA) has lost out to Airbus (EADSF.PK) for a major order from easyjet (EJTTF.OB), which has agreed to purchase 135 A320 aircraft in a deal that would be worth $11.5B at list prices but in which the airline received a "very substantial" discount. easyjet has also taken an option for another 100 planes. (PR) [Consumer] Comment!
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3:49 AM Medtronic's (MDT) controversial Infuse bone-growth implant for spine surgery is no better than a traditional operation, two independent analyses have found, with the rates of complication similar regardless of the treatment used. Infuse generated $528M in sales in the last fiscal year. Medtronic, which commissioned the studies, had been hit by accusations that doctors who had originally supported Infuse had financial ties to the company worth millions of dollars. [Healthcare] 1 Comment
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3:31 AM While the likes of Apple and Amazon go all out to keep their taxable income overseas, for the past few years Citigroup (C) has been trying to shift more of this type of profit back home. It's not because the bank wants to pay more tax, it's just that it has $55B of tax credits and deductions that it wants to use up. Hence the acquisition of $7B in credit-card loans to Best Buy customers. [Financials] 1 Comment
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3:18 AM As expected, France Telecom's (FTE) board yesterday kept Stephane Richard as CEO despite French authorities placing him under investigation for his role in the suspected misuse of public funds. Richard's status was pretty much assured after the government said they would back him. The board said it doesn't believe that Richard's legal problems "impede his ability to fully and effectively" manage France Teleom. (PR) [Tech, Consumer] Comment!
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3:06 AM The EU new-car market showed no signs of bottoming out in May as registrations dropped 5.9% to 1.04M units, the lowest level for the month since 1993. The fall followed a 1.7% gain in April. In January-May, registrations slid 6.8% to 5.07M vehicles. GM (GM) was among those to suffer the most in May with an 11.3% decline. Toyota registrations dropped 4.9% but those of Ford fell just 0.3%. (PR) [Consumer, Global & FX] 1 Comment
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2:55 AM Talisman Energy (TLM) has reportedly approached potential buyers, including private-equity firms, for its shale assets in the Eagle Ford basin in south Texas with a view to raising $2B. The speculation could come as a bit of a surprise, because while Talisman has said it is looking to offload non-core assets, its Eagle Ford interest is seen as core. [Energy, M&A] Comment!
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2:05 AM Johnson Controls (JCI) is reportedly in talks with P-E firms about selling them its automotive electronics unit, which is valued at $1B, after industry interest weakened due to the unit's softer-than-expected performance. Delphi Automotive (DLPH) has pulled out the running, although Visteon (VC) and SAIC (SAI) subsidiary Huayu Automotive Systems are still involved. [M&A] Comment!
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1:55 AM Sony (SNE) repeats that it will review Daniel Loeb's proposal that the company float its entertainment business after Loeb's Third Point hedge fund increased its stake in the electronics firm to 7% from 6.5%. In the past, Sony has said that its film and device units are better together - CEO Kazuo Hirai believes they have valuable synergies - and that it would consider Loeb's spin-off idea. [Tech, Top Stories, Consumer] Comment!
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1:45 AM Japanese industrial production grew 0.9% on month in April, as in March, but came in well below preliminary data of +1.7%. On year, output dropped 3.4% vs -6.7% a month earlier. The on-month change in April was due to the government altering the base year to 2010 from 2005, which affected the weightings of items in the index and the method used to account for seasonal factors. [Global & FX] Comment!
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12:00 AM Tuesday's economic calendar:
FOMC meeting begins
7:45 ICSC Retail Store Sales
8:30 Consumer Price Index
8:30 Housing Starts
8:55 Redbook Chain Store Sales Comment!
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