Wall Street Breakfast: Must-Know News (Seeking Alpha) [Archive] - OnlineTradersForum.com

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08-19-2009, 02:32 AM

<a href="http://seekingalpha.com/tag/wall-street-breakfast"><img src="http://static.seekingalpha.com/images/article/sa-coffee-cup_150x124.png" class="article_big_cup" style="float: right; margin-left: 2px;" /></a><ul> <li><a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=arZiSGKx99Dg">CIT posts heavy loss on bad loan reserves.</a> CIT Group (<a href='http://seekingalpha.com/symbol/cit' title='More opinion and analysis of CIT'>CIT</a>) reported Q2 results, posting its ninth straight quarterly loss as reserves for bad loans more than tripled. The net loss of $1.62B, or $4.30/share, narrowed from a $2.07B loss in Q2 2008, but was worse than the consensus of a $1.53/share loss. Loan loss provisions rose to $588.5M from $152.2M the year before. Net charge-offs rose to 2.81% from 2.41% the previous quarter. Losses pushed the ratio of total capital to risk-weighted assets to 'slightly below' the 13% required by regulators, which CIT said could potentially cause the Federal Reserve or FDIC to take enforcement actions, leading to a "material adverse effect on its business" and possible bankruptcy. (Read CIT's <a href="http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=6476111&format=PDF">10-Q quarterly report</a> (.pdf))</li> <li><a href="http://money.cnn.com/news/newsfeeds/articles/djf500/200908180615DOWJONESDJONLINE000109_FORTUNE5.htm">Exxon signs major LNG deal.</a> Exxon Mobil (<a href='http://seekingalpha.com/symbol/xom' title='More opinion and analysis of XOM'>XOM</a>) reached an agreement to sell liquefied natural gas from its share of the Gorgon LNG project to PetroChina (<a href='http://seekingalpha.com/symbol/ptr' title='More opinion and analysis of PTR'>PTR</a>). The deal is worth around A$50B ($41.3B) and will see PetroChina buy 2.25M tons of LNG annually for 20 years. PTR +6% premarket (7:00 ET).</li> <li><a href="http://www.reuters.com/article/ousiv/idUSTRE57H0BI20090818">Amcor to buy Rio packaging unit.</a> In its largest acquisition ever, Amcor (<a href='http://seekingalpha.com/symbol/amcry.pk' title='More opinion and analysis of AMCRY.PK'>AMCRY.PK</a>) will buy part of Rio Tinto's (<a href='http://seekingalpha.com/symbol/rtp' title='More opinion and analysis of RTP'>RTP</a>) Alcan packaging unit for $2.03B. The deal will net Amcor the global pharmaceuticals and tobacco packaging as well as the Asian and European food packaging units Rio acquired in its 2007 takeover of Alcan, making Amcor the largest supplier of drug packaging and hopefully ending two years of declining profits. Amcor will finance the offer through a A$1.6B ($1.3B) share sale and bank debt. RTP +3.2% premarket (7:00 ET). (Read Amcor's <a href="http://www.amcor.com/about_us/media_centre/news/53310342.html">press release</a>)</li> <li><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=arG2i8jmRTsg">GM's Saab story comes to an end.</a> General Motors reached an agreement to sell its unprofitable Saab unit to Swedish sports car maker Koenigsegg Group. The move was announced early this morning, two months after the companies signed a letter of intent, but several financing hurdles still remain. Notably, the deal depends on the Swedish government providing guarantees for loans from the European Investment bank and Koenigsegg still needs to secure another $300M in financing. For GM, the sale brings it one step closer to completing its global restructuring plan.</li> <li><a href="http://www.reuters.com/article/newsOne/idUSTRE57G5KN20090817">AIG's swaps probed before bailout.</a> Newly released SEC documents show that regulators questioned AIG's (<a href='http://seekingalpha.com/symbol/aig' title='More opinion and analysis of AIG'>AIG</a>) disclosure on derivatives months before the insurer's federal bailout. In particular, regulators were concerned about "apparent inconsistency" on AIG's statements about credit default swaps that had been sold to European banks.</li> <li><a href="http://online.wsj.com/article/SB125053669921337753.html">3 charged in massive credit card breach.</a> Three men were indicted for allegedly stealing 130M credit and debit card numbers between 2006 and 2008 in what could be the largest hacking and identity theft case ever brought to court. The data was stolen from credit-card processor Heartland Payment Systems (<a href='http://seekingalpha.com/symbol/hpy' title='More opinion and analysis of HPY'>HPY</a>) and from retail chains 7-Eleven and Hannaford Brothers. (Read the Justice Department's <a href="http://www.usdoj.gov/opa/pr/2009/August/09-crm-810.html">press release</a>)</li> <li><a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=arQNasbyl82o">Lilly loses patent ruling.</a> A court invalidated Eli Lilly's (<a href='http://seekingalpha.com/symbol/lly' title='More opinion and analysis of LLY'>LLY</a>) method-of-use patent for its cancer drug Gemzar in response to a lawsuit brought by generic drug maker Sun Pharmaceutical Industries. The patent was set to expire in 2013. Lilly said the decision has no bearing on its compound patent for Gemzar, which is set to expire in 2010. Gemzar had 2008 global sales of $1.7B.</li> <li><a href="http://www.bloomberg.com/apps/news?pid=20601110&sid=aoU6KJ4duPnA">Ex-Credit Suisse broker guilty of fraud.</a> Eric Butler, a former Credit Suisse (<a href='http://seekingalpha.com/symbol/cs' title='More opinion and analysis of CS'>CS</a>) broker, was convicted of securities fraud in connection to the sale of millions of dollars of subprime securities to corporate clients. Butler could face as much as 45 years in prison, though the judge said he's unlikely to impose such a strict term because Butler operated in a "culture of corruption.”</li> <li><a href="http://www.reuters.com/article/newsOne/idUSTRE57G3X720090817">Schwab sued over ARS.</a> As expected, New York Attorney General Andrew Cuomo filed formal charges against Charles Schwab (<a href='http://seekingalpha.com/symbol/schw' title='More opinion and analysis of SCHW'>SCHW</a>) for falsely representing auction-rate securities as liquid, short-term investments without discussing the risks. Schwab said the lawsuit lacks merit and "casts blame for a bad situation in the wrong direction."</li> <li><a href="http://www.newyorkfed.org/survey/empire/Empire2009/empiresurvey_20090817.html">NY mfg ticks up.</a> The New York Federal Reserve's Empire State Manufacturing Index climbed +13 points to 12.1, its highest level since Nov. 2007, vs. consensus of 5. New orders and shipments also reached their highest levels in several months. Employment remained below zero but showed improvement.</li> <li><a href="http://www.treasury.gov/press/releases/tg263.htm">Treasury international capital.</a> Net foreign purchases of long-term securities were $90.7B in June, with foreigners picking up $123.6B in long-term U.S. securities ($105B by private investors and $18B by official institutions). Although foreign purchases of U.S. Treasurys rose overall, China <a href="http://www.reuters.com/article/bondsNews/idUSN1737034720090817">reduced its stake</a> by 3.1% to $776B in June from $801.5B in May, the biggest percentage drop since October 2000. China sold $51.75B in short-term maturities, but spent some of that rotating into longer-end holdings. U.S. residents bought $32.9B in foreign debt.</li> <li><a href="http://www.nahb.org/news_details.aspx?sectionID=134&newsID=9598">Housing sentiment shows some improvement.</a> The NAHB Housing Market Index rose 1 point to 18, the highest level in homebuilder sentiment since June 2008, and up from a record low of 8 in January. Future expectations improved while current expectations were static. However, it still means that less than one in five builders think it's a good market.</li> </ul> <h2>Earnings: Tuesday Before Open</h2> <ul> <li>Cardinal Health (<a href='http://seekingalpha.com/symbol/cah' title='More opinion and analysis of CAH'>CAH</a>): FQ4 EPS of $0.87 beats by $0.01. Revenue of $25.2B (+10%) vs. $24.3B. Raises guidance for FY '10: sees EPS of $1.90-2.00 vs. $1.91 consensus, up from previous guidance of $1.87-1.91. (<a href="http://biz.yahoo.com/prnews/090818/cl62477.html">PR</a>)</li> <li>Home Depot (<a href='http://seekingalpha.com/symbol/hd' title='More opinion and analysis of HD'>HD</a>): Q2 EPS of $0.64 beats by $0.05. Revenue of $19.1B (-9%) vs. $19.2B. Shares +3.6% premarket (6:30 ET). (<a href="http://biz.yahoo.com/prnews/090818/cl62547.html">PR</a>)</li> </ul> <h2>Earnings: Monday After Close</h2> <ul> <li>Agilent Technologies (<a href='http://seekingalpha.com/symbol/a' title='More opinion and analysis of A'>A</a>): FQ3 EPS of $0.15 beats by $0.04. Revenue of $1.1B (-27%) vs. $1B. Sees Q4 EPS of $0.20-0.25 vs. $0.20. (<a href="http://finance.yahoo.com/news/Agilent-Technologies-Reports-bw-2928281533.html?x=0&.v=1">PR</a>)</li> <li>AirMedia Group (<a href='http://seekingalpha.com/symbol/amcn' title='More opinion and analysis of AMCN'>AMCN</a>): Q2 EPS of -$0.08 beats by $0.05. Revenue of $37M (+24%) vs. $36M. Sees Q3 revenue of $37M-40M vs. $44M. (<a href="http://finance.yahoo.com/news/AirMedia-Announces-Unaudited-prnews-390479198.html?x=0&.v=16">PR</a>)</li> <li>CDC (<a href='http://seekingalpha.com/symbol/china' title='More opinion and analysis of CHINA'>CHINA</a>): Q2 EPS of $0.03 beats by $0.01. Revenue of $82M (-26%) vs. $84M. (<a href="http://finance.yahoo.com/news/CDC-Corporation-Adjusted-bw-1643510870.html?x=0&.v=1">PR</a>)</li> <li>Dillard's (<a href='http://seekingalpha.com/symbol/dds' title='More opinion and analysis of DDS'>DDS</a>): Q2 EPS of -$0.36 beats by $0.20. Revenue of $1.4B (-11%) in-line. (<a href="http://finance.yahoo.com/news/Dillards-Inc-Reports-Second-bw-2604590715.html?x=0&.v=1">PR</a>)</li> <li>First Marblehead (<a href='http://seekingalpha.com/symbol/fmd' title='More opinion and analysis of FMD'>FMD</a>): FQ4 EPS of -$0.36 misses by $0.11. Revenue of $11.6M vs. $12.4M. (<a href="http://finance.yahoo.com/news/First-Marblehead-Announces-iw-1922665612.html?x=0&.v=1">PR</a>)</li> <li>Trina Solar (<a href='http://seekingalpha.com/symbol/tsl' title='More opinion and analysis of TSL'>TSL</a>): Q2 EPS of $0.71 beats by $0.39. Revenue of $150M (-27%) vs. $149M. (<a href="http://finance.yahoo.com/news/Trina-Solar-Announces-Second-prnews-126631309.html?x=0&.v=34">PR</a>)</li> </ul> <h2>Today's Markets</h2>Asian markets managed to close higher after yesterday's heavy losses. European markets and U.S. futures are also showing gains.<ul> <li>In Asia, Nikkei +0.2% to 10,285. Hang Seng +0.8% to 20,306. Shanghai +1.4% to 2,911. BSE +1.7% to 15,035.</li> <li>In Europe at midday, London +0.8%. Paris +0.6%. Frankfurt +0.6%.</li> <li>Futures: Dow +0.5%. S&P +0.6%. Nasdaq +0.7%. Crude +1.4% to $67.71. Gold +0.4% to $939.50.</li> </ul> <h2>Tuesday's Economic Calendar</h2> <ul> <li>7:45 <a href="http://bloomberg.econoday.com/byshoweventfull.asp?fid=437628&cust=bloomberg&year=2009#top">ICSC Retail Store Sales</a> 8:30 <a href="http://www.census.gov/const/www/newresconstindex.html">Housing Starts</a> 8:30 <a href="http://www.bls.gov/ppi/">Producer Price Index</a> 8:55 <a href="http://bloomberg.econoday.com/byshoweventfull.asp?fid=437732&cust=bloomberg&year=2009#top">Redbook</a> 5:00 PM <a href="http://abcnews.go.com/PollingUnit/">ABC Consumer Confidence Index</a></li> <li>Notable earnings before Tuesday's open: <a href="http://seekingalpha.com/symbol/HD">HD</a>, <a href="http://seekingalpha.com/symbol/SKS">SKS</a>, <a href="http://seekingalpha.com/symbol/SOLF">SOLF</a>, <a href="http://seekingalpha.com/symbol/TGT">TGT</a>, <a href="http://seekingalpha.com/symbol/TJX">TJX</a></li> <li>Notable earnings after Tuesday's close: <a href="http://seekingalpha.com/symbol/ADI">ADI</a>, <a href="http://seekingalpha.com/symbol/HPQ">HPQ</a>, <a href="http://seekingalpha.com/symbol/HSTX">HSTX</a></li> </ul> Seeking Alpha editor Eli Hoffmann contributed to this post. <a href="http://seekingalpha.com/page/email-preferences/?source=newsbriefbody">Get Wall Street Breakfast by email</a> -- it's free and takes only seconds to sign up. <div style="border: 1px solid rgb(200, 200, 200); margin: 20px auto; padding: 1em; width: 340px; background-color: rgb(243, 243, 243); text-align: center;">After you finish reading Wall Street Breakfast<a href="http://seekingalpha.com/market_currents?source=WSB" style="margin: 6px 0px; display: block; font-weight: 700;">Seeking Alpha's Market Currents</a>will keep you current all day long.</div>  <a href='http://seekingalpha.com/article/156721-wall-street-breakfast-must-know-news?source=feed'>Complete Story »</a>

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