- BofA discusses mortgage putbacks. Bank of America (NYSE:BAC) has begun potential settlement discussions with some of its largest mortgage investors. The move appears to be an about-face for CEO Brian Moynihan, who had pledged to fight requests to repurchase flawed mortgages made before the U.S. housing collapse, though a BofA spokesman said the bank's strategy remains "resolving these issues quickly." The 17-member group in talks with BofA includes the New York Fed, Freddie Mac (OTCQB:FMCC), BlackRock (NYSE:BLK), Allianz (OTCPK:AZSEY) and Pimco. Premarket: BAC +0.65% (7:00 ET).
- DoJ files suit over Gulf spill. As expected, the Justice Department filed a civil suit against several oil companies in connection to the Gulf of Mexico spill. The defendants include BP (NYSE:BP), subsidiaries of Transocean (NYSE:RIG) which owned and operated the rig, Anadarko Petroleum (NYSE:APC) and MOEX Offshore 2007 which held financial stakes in the oil well, and QBE Underwriting Ltd./Lloyd's Syndicate 1036 (NYSE:LYG), a Transocean insurer. Halliburton (NYSE:HAL), which designed and pumped the cement used in the well, wasn't named in the lawsuit. The government is seeking to hold some defendants liable without limitation for oil-spill-removal costs and other damages, including to natural resources; the lawsuit doesn't specify the size of the damages. The suit also seeks civil penalties under the Clean Water Act that could total nearly $5.4B, or jump to as much as $21B if gross negligence is found. Premarket: BP -0.2%, RIG -3.8% (7:00 ET).
- Senate approves tax deal. The Senate voted 81-19 to approve the $858B tax deal hammered out by President Obama and Republican leadership. The bill now goes to the House, where it's expected to face stronger opposition. Lawmakers are rushing to reach a resolution before the Bush-era tax cuts expire on Dec. 31.
- S&P boosts China's rating. S&P raised China's long-term sovereign credit rating to AA- from A+ this morning. S&P cited the country's strong foreign reserves and fiscal position, adding "we believe the Chinese authorities would respond to future threats to financial stability with timely measures, based on our observations over the past two years."
- Pfizer extends offer for King. Pfizer (NYSE:PFE) extended its tender offer for King Pharmaceuticals (KG) to January 21 from the initial deadline of Dec. 17. Pfizer is offering $14.25/share for the pharmaceutical company, a 40% premium to King's closing share price before the deal was announced. As of December 14, around 47% of King's outstanding shares had been tendered.
- Lehman creditors file rival reorg. plan. Lehman Brothers' (OTC:LEHMQ) creditors filed a rival reorganization plan for the bankrupt company, detailing their own ideas for parceling out Lehman's $58B in assets and arguing that Lehman's original reorganization plan unfairly favored large banks. Lehman had said previously that it plans to file a revised plan by the end of this year, and bondholders hope their suggestions are incorporated into the new plan.
- IPO volume more than doubles. The U.S. IPO market has more than doubled in volume this year, and gained 49% in value year-to-date, according to PwC's U.S. IPO Watch. As the end of the year approaches, 2010 has seen 154 IPOs that raised $37.5B, compared to 2009's 69 IPOs that raised $25.2B. Of the non-U.S. offerings, China was responsible for 21 of the 27 IPOs.
- Obama tries to woo CEOs. President Obama met with 20 corporate CEOs yesterday, asking them which policies would prompt them to "start investing in job creating enterprises" and trying to repair the White House's frayed relationship with corporate America. Neither White House officials nor the attendees, which included the chief executives of UBS (NYSE:UBS), Motorola (MOT), Google (NASDAQ:GOOG) and Boeing (NYSE:BA), provided any specifics of advice or concrete proposals discussed during the meeting.
- CFTC to miss position limits deadline. The CFTC admitted it would miss its mid-January deadline to finalize position limits for traders in agricultural, energy and metals markets. The agency also plans to propose phasing the limits in rather than instituting them all at once. Details of the plan will be released today, and no new deadline has been set. CFTC Chairman Gary Gensler said only that a final rule would be issued 'as soon as we can sort out' the public comments on the proposal.
Earnings: Thursday Before Open
- Pier 1 Imports (NYSE:PIR): Q3 EPS of $0.18 beats by $0.04. Revenue of $353.8M (+8.2%) vs. $352.7M. (PR)
- In Asia, Japan flat at 10311. Hong Kong -1.3% to 22669. China -0.5% to 2898. India +1.1% to 19865.
- In Europe, at midday, London +0.1%. Paris -0.1%. Frankfurt flat.
- Futures at 7:00: Dow +0.05%. S&P +0.1%. Nasdaq +0.1%. Crude -0.7% to $88.01. Gold -0.1% to $1384.70.
Thursday's Economic Calendar
8:30 Housing Starts
8:30 Initial Jobless Claims
8:30 Current Account
10:00 Philly Fed Business Outlook
10:00 Hearing: Geithner Testifies on TARP
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
- Notable earnings before Thursday's open: DFS, FDX, GIS, PIR
- Notable earnings after Thursday's close: ACN, ORCL, RIMM, TTWO
The SA Currents team contributed to this post.
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