Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
AB InBev's Q4 profit climbs 10% but warns on Q1 volume. AB InBev's (NYSE:BUD) Q4 earnings beat expectations as EBITDA rose 9.9% to $4.39B and organic revenue 8.8% to $10.29B, with the company's performance boosted by higher-priced beers in its main markets of the U.S. and Brazil. However, AB InBev said Q1 volumes in the U.S. will be hit by pressure on consumer income and a harsher winter, while those in Brazil will be hurt by wet weather and an early Carnival. Shares were +0.2% premarket.

Shell to acquire Repsol LNG assets in $6.7B deal. Shell (NYSE:RDS.A) has agreed to purchase part of Repsol's (OTCQX:REPYY) liquefied natural gas portfolio outside of North America for $4.4B, with Shell also taking on $2.3B in financial leases and debt. The agreement includes supply positions in Peru and Trinidad & Tobago, and is expected to add around 7.2M metric tons/year of LNG volumes.

Top Stock News
Boeing union drops pension demand. The Speea union has dropped its demand that a four-year labor contract for Boeing's (NYSE:BA) technicians include a pension for new workers. Speea's decision came ahead of the scheduled resumption of negotiations today and after technicians rejected Boeing's offer even though engineers accepted it.

Clearwire plans to take financing from Sprint. Clearwire (CLWR) reportedly intends to draw financing from Sprint (NYSE:S) in the form of convertible debt in a move that will complicate Dish's (NASDAQ:DISH) efforts to acquire Clearwire. Dish has told Clearwire it will withdraw its offer if the latter takes the loans, although sources said the action isn't designed to put Dish off.

Groupon seen swinging to profit. Groupon's (NASDAQ:GRPN) Q4 earnings are due out after the bell, with analysts estimating that the daily deals company swung to an EPS of $0.03 from a loss per share of $0.06 as revenues climbed 26% to $638.41M. Piper Jaffray's Gene Munster, who last week upgraded Groupon to "Overweight" from "Neutral," expects Groupon's results and guidance to reflect continued strength in North America and a recovery internationally following two quarters of declines.

Apple slips ahead of annual meeting. Apple (NASDAQ:AAPL) is due to hold its annual investor meeting today, when Tim Cook is expected to discuss what the company might do with its $137.1B cash mountain as pressure increases to return more money to shareholders. There have even been whispers that Apple will announce a stock split. However, the company doesn't usually use these events to announce new products or changes in strategy. Shares were -0.3% premarket.

New Jersey passes online gambling law. New Jersey Governor Chris Christie has signed a gambling bill into law that allows Atlantic City casinos to handle online bets within the state. NJ and Nevada are looking to sign deals that would allow the taking of bets from outside the states, but those agreements could take time to hammer out. Notwithstanding, Zynga (NASDAQ:ZNGA) was +2.7% premarket and Boyd Gaming (NYSE:BYD) was +4.3%.

Appeals court overturns $1B ruling against Exxon. A Maryland appeals court yesterday quashed a ruling that Exxon (NYSE:XOM) must pay $1B in punitive damages for a 2006 gasoline leak that residents said polluted their drinking water. The court also invalidated a verdict that Exxon was liable for fraud. The case will now go for a retrial. In the original ruling, the plaintiffs were awarded $495M in compensation as well.

Pratt close to ruling out "worst case" reason for engine crack. United Technologies (NYSE:UTX) unit Pratt & Whitney is reportedly "99% sure" that a crack in an F-35 engine turbine blade was not caused by "the worst-case scenario of high-cycle fatigue," which would possibly entail an expensive design change. The U.S.'s entire fleet of F-35 fighters has been grounded since the crack was discovered last week.

Top Economic & Other News
Argentina's appeal over bond holdouts due to start. Argentina is due to appear in a New York Appeals Court today, when it will try to persuade the judge to reverse a ruling that it pay $1.3B to investors that refused to accept the country's debt restructuring after it defaulted in 2001. The case could "create unrest in the credit markets and result in cascades of litigation," says Bank of New York Mellon (NYSE:BK), which processes bond payments and could be affected.

Demand remains resilient in Italian debt auction. Yields rose but not as much as feared in the second Italian bond auction since the country's inconclusive election, with the government achieving the top end of its sales-target range. The Treasury sold €4B of 10-year bonds at 4.83% vs 4.17% last month, and €2.5B of five-year notes at 3.59% vs 2.94%. In the secondary market, the 10-year yield was -1 bps at 4.90% at midday in Europe.

Senate panel backs Lew for Treasury Secretary. The Senate Finance Committee yesterday backed Jack Lew's nomination as Treasury Secretary by 19-5, but only after he'd answered at least 444 written questions. The panel's approval opens the way for a full vote in the Senate, and while some Republicans are opposed to Lew's appointment, he's expected to be confirmed.

Japan's optimism continues. Japan's government has upgraded its economic assessment for the second month in a row, saying that industrial production has bottomed out and that the business mood is improving because of the declining yen and increasing share prices. However, the government warned that "some weak areas remain."

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Today's Markets:
In Asia, Japan -1.3% to 11254. Hong Kong +0.3% to 22577. China +0.9% to 2313. India +0.7% to 19152.
In Europe, at midday, London +0.3%. Paris +0.7%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.2% to $92.79. Gold -0.6% to $1606.20.

Today's economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 Pending Home Sales
10:00 Bernanke delivers semi-annual economic and monetary policy testimony
10:30 EIA Petroleum Inventories
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Fed's Fisher: Economic Outlook

Notable earnings before today's open: AES, AFAM, AH, ARCC, CBB, CNP, DLTR, FIG, GLOG, ITT, JOY, NRG, PDCE, STWD, SWC, TGT, TJX, VPHM


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