Wall Street Breakfast: Must-Know News

Jul. 16, 2012 7:23 AM ETGSK, SPY, QQQ, AAIGY, BCS, C, CMCSA, HSBC, ING, LVS, MFC, MSFT, NOK, T, TMO41 Comments
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Wall Street Breakfast

Top Stories
GSK set to win battle for Human Genome with $2.8B offer. GlaxoSmithKline (GSK) is poised to buy Human Genome Sciences (HGSI) after increasing its offer to around $2.8B from $2.6B, Reuters reports, with an announcement possible today. Per share, GSK has sweetened the deal to $14 from $13. Human Genome shares were +3.5% premarket.

DOJ prepares criminal cases in Libor scandal. The Justice Department is building criminal cases against several banks and their employees, including Barclays (BCS), for their role in manipulating Libor rates, the NYT reports. Bloomberg writes that Barclays traders involved in the scandal could be hit with U.S. charges by September. Meanwhile, New York and Connecticut have been conducting their own inquiry for six months.

Top Stock News
Nokia offers Lumia at knock-down price. Nokia (NOK) has slashed the price of its flagship Lumia 900 phone by half in the U.S., barely three months after its introduction, although it's not clear whether Nokia or partner AT&T (T) will take the bigger hit. Quick price drops aren't unprecedented, but Nokia is under scrutiny after a lackluster Lumia rollout. Shares were -2.2% premarket.

Comcast buys Microsoft out of MSNBC.com for $300M. NBC parent Comcast (CMCSA) has bought Microsoft's (MSFT) 50% stake in MSNBC.com, and has already rebranded the site as NBCNews.com. Financial terms weren't disclosed, although sources say the stake changed hands for ~$300M.

Convenience stores hire lawyer to fight $7.25B credit card deal. The National Association of Convenience Stores, which represents 3,700 such shops, has criticized the $7.25B settlement between the credit-card industry and merchants, saying the deal doesn't address the key issue of how much control the industry retains. The trade group has hired Constantine Cannon, a veteran law firm in fights against credit-card firms.

Thermo Fisher continues shopping spree with $925M deal. Health-care equipment company Thermo Fisher Scientific (TMO) has ageed to acquire closely held One Lambda, a provider of testing equipment and software, for $925M. Thermo expects to complete the transaction in Q4, and for it to add $0.09-$0.11 to adjusted EPS in 2013. The deal is Thermo's 28th purchase in the last five years.

Macau extends casino deadline for Las Vegas Sands. The local government in Macau has extended the deadline for Las Vegas Sands (LVS) to complete a casino project by three years. A positive ruling was critical after the company had already invested over $96M in what is known as the "Parcel 3" project.

Citigroup hopes to increase dividend by the year-end. Citigroup (C) may seek permission to raise its dividend by the end of the year, CEO Vikram Pandit has said, in what would be its first dividend hike since the financial crisis. In March, the Fed said Citi didn't have enough capital to raise its payout and be able to withstand another financial crisis. Citi currently pays a token $0.01 per share every quarter.

Auction for ING's $7B Asian ops heats up. Binding second-round bids for ING's (ING) Asian insurance and asset management operations are due in today, and offers are rolling in from a wide range of suitors, including Dai-ichi Life Insurance and Korea Life. AIA (OTC:AAIGY) and Manulife (MFC) are also expected to bid, and a deal could be worth around $7B.

HSBC speeds up money-laundering talks with DOJ. HSBC (HBC) is accelerating talks with the Justice Department and is said to be nearing a settlement to resolve a criminal probe into money laundering, the WSJ reports. A settlement could come within weeks.

Regulators shut 33rd bank of the year. Regulators closed Glasgow Savings Bank in Missouri on Friday, the state's first failure of the year and the 33rd nationwide. Regional Missouri Bank of Marceline is taking over the bank; the cost to the FDIC's insurance fund is estimated at $100,000.

Top Economic & Other News
Saudi Arabia, UAE bypass the Strait of Hormuz. Saudi Arabia and the UAE have quietly opened new pipelines bypassing the Strait of Hormuz, a move that will reduce Iran's power over oil markets. The strait, which Iran has repeatedly threatened to close, is the conduit for a third of the world’s seaborne oil trade.

ECB wants to impose losses on senior creditors of Spanish banks. The ECB has apparently radically shifted its views on bond losses, the WSJ reports, with the bank now advocating imposing losses on holders of senior bonds issued by the most severely damaged Spanish savings banks. Finance ministers have rejected that approach for now, as they want to ensure Spanish access to the bond markets.

Eurozone trade surplus surges 86%. The Eurozone trade surplus jumped to €6.9B in May from €3.7B in April, coming in higher than forecasts of €4B. Exports climbed 6% but imports stayed unchanged from a year earlier, indicating how domestic demand continues to be weak.

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Today's Markets:
In Asia, Japan +0.1%. Hong Kong +0.1%. China -1.7%. India -0.6%.
In Europe, at midday, London flat. Paris -0.2%. Frankfurt -0.1%.
Futures at 7:00: Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -0.4% to $86.790. Gold -0.4% to $1585.20.

Today's economic calendar:
8:30 Retail Sales
8:30 Empire State Mfg Survey
10:00 Business Inventories

Notable earnings before today's open: C, GCI

Notable earnings after today's close: LNCR

See full real-time earnings coverage »

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