- Obama to meet with Goldman's Blankfein, other CEOs Tuesday (Reuters)
- Chinese Firms Shrug at Rising Debt (WSJ)
- McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (BBG)... but not Moody's or Fitch
- Dime a Dozen: Dollar Stores Pinched by Rapid Expansion (WSJ)
- Dell Board Said to Vote Monday Night on $24 Billion LBO (BBG)
- BOJ Governor Shirakawa to step down on March 19 (Reuters)
- Alberta may offer more to smooth way for Keystone (Reuters)
- Facebook Is Said to Create Mobile Location-Tracking App (BBG)
- Barclays takes another $1.6 billion hit for mis-selling (Reuters)
- Apple App Advantage Eroded as Google Narrows IPhone Lead (BBG)
- Texas School-Finance System Unconstitutional, Judge Rules (BBG)
- World Risks ‘Perfect Storm’ on Capital Flows, Carstens Says (BBG)
Overnight Media Digest
* Michael Dell is close to finishing a risky $23 billion deal to take private the computer company he founded nearly 30 years ago, in an effort to remake Dell Inc for a post-PC era.
* The Justice Department in the United States sued Standard & Poor's Ratings Services late Monday, alleging the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions.
* Investigators remain stumped on the cause of burning batteries aboard two Boeing 787 Dreamliners, fueling pessimism about how quickly the grounded aircraft can resume flying.
* British regulators are considering forcing banks to raise billions of pounds in fresh capital to address concerns around a key gauge of their financial health.
* Oracle Corp said it will acquire telecommunications gear maker Acme Packet Inc in a deal valued at $1.7 billion, making its biggest move yet into the market for equipment that transports Internet data.
* Bridgewater Associates told its investors that it will launch a new hedge fund this year, and had sold another minority equity stake in the firm to an unidentified buyer to help ensure its long-term viability.
* The U.S. Securities and Exchange Commission, expanding a high-profile investigation, is gathering data on a broad number of trades by corporate executives in shares of their own companies, according to people familiar with the probe.
Standard & Poor's is likely to face a lawsuit filed by the U.S. Department of Justice alleging that the credit rating agency defrauded banks by issuing overly rosy ratings for mortgage-related securities in the lead-up to the financial crisis.
SGX, the Singapore stock exchange, is in talks to buy a stake in clearing house LCH.Clearnet. The Asian exchange may participate in the London Stock Exchange Group's purchase of LCH or buy a separate stake.
Mercuria - one of the world's top five energy traders, has hired Credit Suisse to carry out a strategic stake sale.
The Moscow Exchange is set become Europe's largest exchange by market capitalisation after it set a price range for its initial public offering, that values the company at $4 billion to $4.6 billion.
BP Plc is likely to face a year or more of uncertainty over the cost of the 2010 Deepwater Horizon disaster as any decision on civil penalties and environmental damages is not expected to come until next year.
Former chief executive of Thales - Denis Ranque, has emerged as the front runner to become chairman of European aerospace and defence company EADS, according to two people familiar with the situation. EADS shareholders will meet next month to approve a new board and corporate governance structure at the company.
Dutch telecoms group KPN, is finalising plans to raise as much as 4 billion euros in new capital. The company whose stakeholders include Mexican billionaire Carlos Slim, is seeking to raise 2 billion euros to 4 billion euros in the form of a rights issue.
* The Justice Department in the United Status filed civil fraud charges late Monday against the nation's largest credit-ratings agency, Standard & Poor's, accusing the firm of inflating the ratings of mortgage investments and setting them up for a crash when the financial crisis struck.
* Dell Inc neared an agreement on Monday to sell itself to a group led by its founder and the investment firm Silver Lake for more than $23 billion, people briefed on the matter said, in what would be the biggest buyout since the financial crisis.
* China Petroleum and Chemical Corp , the state-owned oil and refining giant better known as Sinopec, is selling new shares worth up to $3.1 billion, in what ranks as one of Asia's biggest equity deals so far this year.
* Japan Airlines said that the grounding of its Boeing 787 Dreamliner fleet would cost it 700 million yen, or $7.5 million, in earnings through March and that it would seek compensation from Boeing Co.
* British regulators will have the power to split up banks that fail to separate risky trading activity from retail banking, George Osborne, the country's chancellor of the Exchequer, said.
* Microsoft Corp, taking aim at the world's fastest-growing smartphone market, said on Monday that it would team up with Huawei of China to sell a low-cost Windows smartphone in Africa.
THE GLOBE AND MAIL
* Alberta Premier Alison Redford has replaced two of her cabinet ministers, a minor shuffle she says is evidence of her government "leading by example" as it focuses on economic development and looks for savings leading up to next month's budget.
* Amid a standoff between buyers and sellers, the number of homes sold in Greater Vancouver fell 14.3 percent last month. There were 1,351 property sales in the region in January, down from 1,577 in the same month of 2012, the Real Estate Board of Greater Vancouver said Monday.
Reports in the business section:
* The end of the penny has given the Royal Canadian Mint 20 percent more capacity, and it plans to put it to use producing other countries' coins. The Mint struck its final penny last May after the federal government announced it would kill the coin as a cost-saving measure. Monday marks beginning of the penny's phase-out as the Mint will stop distributing them to retailers and banks.
* The official word on the progress of free trade negotiations between Canada and the European Union is that "no deal is imminent." Unofficially, trade sources suggest a framework deal is sitting on the Prime Minister's desk, waiting for him to decide whether the terms are likely to cause him unacceptable political headaches.
* Canadian Pacific Railway Ltd's decision to hire away a top Canadian National Railway Co executive came with the hefty price in the form of a deal not to hire about 60 of its rivals' top marketing and operations executives through 2016. Canadian Pacific said Monday it had appointed Canadian National's chief operating officer, Keith Creel, as its new president, chief operating officer, and the likely successor to Hunter Harrison as its chief executive.
CHINA SECURITIES JOURNAL
--China could raise crude oil prices after the Chinese Spring Festival holiday (Feb. 9 to 17), due to a rise in global oil prices, the official paper said citing industry sources.
--China may announce plans this year to develop 120 trading posts along its borders to stimulate the country's struggling exports and boost investment.
--China Vanke Co Ltd, the country's largest real estate developer by turnover, said its board had approved a plan to move trading of its foreign currency shares to Hong Kong from Shenzhen.
SHANGHAI SECURITIES NEWS
--The State Council said it plans to implement paid vacation rules to boost domestic tourism. Analysts said this could boost tourism revenues by 50 billion yuan ($8.02 billion) per year.
--China's yuan deposits in Hong Kong could rise to 700 billion yuan this year, from 600 billion yuan last year, analysts told the official paper.
--China's Ministry of Public Security said it has handled 120 food safety cases and arrested 350 people since it started a crackdown on illegal food and food safety in January.
--Police seized more than 40 tons of fake mutton and beef rolls in China's northeastern Liaoning province. The fake food was made from duck and laced with large amounts of carcinogens.
Fly on the Wall 7:00 AM Market Snapshot
Alon USA Partners (ALDW) upgraded to Buy from Neutral at Goldman
Armstrong World (AWI) upgraded to Overweight from Equal Weight at Barclays
Bed Bath & Beyond (BBBY) upgraded to Buy from Neutral at Citigroup
Cullen/Frost (CFR) upgraded to Outperform from Perform at Oppenheimer
D.R. Horton (DHI) upgraded to Overweight from Equal Weight at Barclays
Harmony Gold (HMY) upgraded to Neutral from Sell at Citigroup
Macy's (M) upgraded to Buy from Neutral at Citigroup
Marvell (MRVL) upgraded to Outperform from Sector Perform at RBC Capital
Stillwater Mining (SWC) upgraded to Overweight from Neutral at JPMorgan
Target (TGT) upgraded to Buy from Neutral at Citigroup
UnitedHealth (UNH) upgraded to Conviction Buy from Neutral at Goldman
Zynga (ZNGA) upgraded to Buy from Neutral at BofA/Merrill
Alon USA Energy (ALJ) downgraded to Neutral from Buy at Goldman
American Science & Engineering (ASEI) downgraded to Hold from Buy at Benchmark Co.
Associated Banc-Corp (ASBC) downgraded to Perform from Outperform at Oppenheimer
AvalonBay (AVB) downgraded to Hold from Buy at Jefferies
Baidu (BIDU) downgraded to Market Perform from Outperform at Raymond James
Equity Residential (EQR) downgraded to Hold from Buy at Jefferies
Iconix Brand (ICON) downgraded to Neutral from Buy at Citigroup
Invesco (IVZ) downgraded to Market Perform from Outperform at BMO Capital
KB Home (KBH) downgraded to Equal Weight from Overweight at Barclays
Kohl's (KSS) downgraded to Neutral from Buy at Citigroup
PulteGroup (PHM) downgraded to Equal Weight from Overweight at Barclays
Realogy (RLGY) downgraded to Equal Weight from Overweight at Barclays
Royal Caribbean (RCL) downgraded to Market Perform from Outperform at Raymond James
Ryland Group (RYL) downgraded to Underweight from Equal Weight at Barclays
Scientific Games (SGMS) downgraded to Sell from Hold at Deutsche Bank
Stryker (SYK) downgraded to Neutral from Buy at UBS
Toll Brothers (TOL) downgraded to Underweight from Equal Weight at Barclays
Yum! Brands (YUM) downgraded to Neutral from Outperform at RW Baird
hhgregg (HGG) downgraded to Underperform from Neutral at Credit Suisse
ASML (ASML) initiated with an Outperform at Cowen
Applied Materials (AMAT) initiated with an Outperform at Cowen
Broadcom (BRCM) initiated with an Outperform at Cowen
ChipMOS (IMOS) initiated with an Outperform at Cowen
Health Care REIT (HCN) initiated with an Overweight at Barclays
Intel (INTC) initiated with a Neutral at Cowen
KLA-Tencor (KLAC) initiated with a Neutral at Cowen
Lam Research (LRCX) initiated with a Neutral at Cowen
Neurocrine Biosciences (NBIX) initiated with a Buy at Lazard Capital
Repros Therapeutics (RPRX) initiated with a Buy at Lazard Capital
SanDisk (SNDK) initiated with a Neutral at Cowen
Teradyne (TER) initiated with an Outperform at Cowen
Texas Instruments (TXN) initiated with a Neutral at Cowen
Ulta Salon (ULTA) initiated with an Outperform at Credit Suisse
Vanda Pharmaceuticals (VNDA) initiated with a Buy at Lazard Capital
Vitamin Shoppe (VSI) initiated with an Outperform at Credit Suisse
Workday (WDAY) initiated with a Neutral at Citigroup
Dell (DELL) board said to meet last night to vote on buyout, Bloomberg reports
Yum! Brands (YUM) CEO Novak: We no longer expect to achieve EPS growth in 2013
Sees KFC China SSS improving as the year progresses
Virgin Media (VMED) confirms talks with Liberty Global (LBTYA) over possible transaction
J.C. Penney (JCP) said notice of default from bondholders is invalid, without merit
Arbitron (ARB) and Nielsen (NLSN) voluntarily provided FTC additional time for merger review
Baker Hughes (BHI) to retain process and pipeline services business
Spectra (SE) targets investments of $25B in capital expansion projects through decade
U.S. Bancorp's (USB) Elavon acquired Collective POS, terms not disclosed
A.T. Cross (ATX) to explore strategic alternatives for Cross accessory division
Vitamin Shoppe (VSE) said FTC ended investigation into Super Supplements deal
Companies that beat consensus earnings expectations last night and today include:
Becton Dickinson (BDX), Diamond Offshore (DO), NYSE Euronext (NYX), BP (BP), Yum! Brands (YUM), Array BioPharma (ARRY), Baidu (BIDU), SolarWinds (SWI), Hartford Financial (HIG), Luminex (LMNX), Anadarko (APC), Gilead (GILD), Edwards Lifesciences (EW)
Companies that missed consensus earnings expectations include:
Centene (CNC), Symetra Financial (SYA), Anadarko (APC)
Companies that matched consensus earnings expectations include:
Santander Chile (BSAC), BCD Semiconductor (BCDS)
- Dollar stores (DG, FDO, DLTR) are finding it harder to make money as sales-growth has slowed and in some cases margins have been shrinking as competition for their target customer—the cash-strapped consumer—has increased, the Wall Street Journal reports.
- Money-market funds have a high-quality problem: investors are entrusting them with too much cash. The flood of money is prompting the funds to seek higher returns in investments that until recently were seen as too risky. Investors put $149B into U.S.-based money-market funds between the start of November and January 30, bringing total assets under management to $2.695T according to the Investment Company Institute, the Wall Street Journal reports
- President Obama will meet today with CEOs from 12 companies including Goldman Sachs Group (GS) Lloyd Blankfein and Yahoo's (YHOO) Marissa Mayer to discuss immigration and deficit reduction. Others include Arne Sorenson of Marriott International (MAR), Jeff Smisek of United Continental Holdings (UAL) and Klaus Kleinfeld of Alcoa (AA), Reuters reports
- The euro zone's economy has turned a corner, according to a business survey that showed businesses are more optimistic about the future but highlighted a growing split between the region's economies. Markit's Eurozone Composite PMI, jumped in January to a 10-month high of 48.6 from 47.2 in December, Reuters reports
- Facebook (FB) is developing a smartphone application, expected to be released next month, that will track the location of users, sources say, bolstering efforts to benefit from growing use of social media on mobile computers, Bloomberg reports
- Wells Fargo & Co. (WFC), which counts Warren Buffett’s company (BRK.A) as its largest shareholder, is planning to target Persian Gulf sovereign wealth funds to expand its client base in the Middle East, Bloomberg reports
Celldex (CLDX) files to sell $75M in common stock
Enterprise Products (EPD) announces offering of 8M common units
Fidus Investment (FDUS) files to sell common stock
KCAP Financial (KCAP) files to sell 4M shares of common stock
MagnaChip (MX) files to sell 5M shares of common stock