Monday, August 27, 2012

Top Stories
Samsung shares plunge after $1.05B patent loss to Apple.Samsung's (SSNLF.PK) shares tumbled 7.45% in Seoul today following its $1.05B patent defeat to Apple (AAPL) on Friday, with the latter climbing 2.35% premarket, Nokia (NOKjumping 11.4% and Microsoft (MSFT) edging up 0.8%. Apple has until today to outline which Samsung devices it wants to ban from being sold in the U.S. Read market currents for a summary of the latest reaction and analysis.
Hertz doesn't thrift as it agrees to buy Dollar Thrifty for $2.3B. After two years of trying, Hertz (HTZ) is set to acquire Dollar Thrifty (DTG) in a deal worth $2.3B. The price of $87.50 a share represents a premium of 8% on the latter's close of $81 on Friday, and is more than double the $41 that Hertz offered in 2010. To help get regulatory approval, Hertz has agreed to sell its Advantage Rent-A-Car unit to Franchise Services of North America and Macquarie Capital.
Drought to lead to massive losses for insurers. The drought will probably cause insurers their biggest agricultural loss ever, with estimated gross indemnities of $30B and an underwriting loss of $18B. However, the government will pay for $14B through reinsurance programs and private firms $4B-$5B. Companies with exposure include QBE (QBEIF.PK), American Financial (AFG) and Wells Fargo's (WFC) Rural Community.
Top Stock News
Samsung invests in ASML, joining Intel and TSMC. Samsung (SSNLF.PK) has followed Intel (INTC) and Taiwan Semiconductor (TSM) in investing in ASML, with the South Korean company agreeing to provide the Dutch chip-equipment maker with €276M for R&D. ASML has now raised €1.38B from the three chipmakers for research. Samsung is also buying a 3% stake in ASML for €503M, bringing the total customer equity investment in the company to €3.85B.
Tiffany earnings edge up. Tiffany's (TIF) Q2 earnings were in line with its own expectations but came in just below those of analysts. Net profit rose 2% to $92M, or $0.72 a share, while revenue increased by the same amount to $887M. Sales to the Americas and Europe slipped 1% but grew 1% in Asia Pacific. The jeweler lowered its FY EPS guidance to $3.70-$3.80 from a prior outlook of $3.95-$4.04.
Opel denies plans to cut 1/3 German jobs. GM's (GM) European unit Opel has denied a report in Germany's Bild newspaper that it intends to slash a third of jobs in the country. The cuts would be part of a phased strategy that also includes reducing working hours, a move that Opel announced last week.
Insurers could face rules to up capital requirements by billions.State regulators are looking at changes that would force insurers such as AIG (AIG) and MetLife (MET) to increase by billions of dollars the amount that they would have to hold against the riskier mortgage bonds they've been acquiring lately. The National Association of Insurance Commissioners could implement the changes later this year in a move that could cool interest in the once-toxic assets.
Ford breaks ground on new China plant in quest for growth. Ford (F) has broken ground on a factory in Chongqing in southwest China, where it plans to start making its 2-liter EcoBoost turbocharged engine. Although the country's market is cooling, Ford - and other car makers - see "a tremendous growth opportunity in the middle and the west."
U.S. probes Unicredit over Iran. Add Unicredit (UNCFF.PK), Italy's largest bank, to the growing list of financial institutions being investigated in the U.S. for breaking sanctions on certain countries, with reports saying that one of those countries is - surprise surprise - Iran.
Top Economic & Other News
ECB mulls flexibility for any bond-buying program. The latest bond-buying scheme that the ECB is considering involves using informal, flexible yield targets, the WSJ reports. It's a strategy that would theoretically preserve the bank's ability to change course and maintain pressure on governments over reform and budgets. Unlike before, the ECB would divulge far more details of its activities in order to guide the markets as to its intentions.
Spain will probably need €60B of bailout - Economy Minister. Spain expects to use approximately €60B of the €100B available for its bank rescue, Economy Minister Luis de Guindos has told the NYT. Meanwhile, economists have found a discrepancy that allows Spain's regional governments to exceed their agreed 2012 budget deficit targets by €1.2B, or 8%, which won't do much for the credibility of the country in its program to cut its overall deficit and get that bailout.
Today's Markets:
In Asia, Japan +0.2%. Hong Kong -0.4%. China -1.7%. India -0.6%.
In Europe, at midday, London closed. Paris +0.1%. Frankfurt +0.3%.
Futures at 7:00: Dow +0.1%. S&P +0.3%. Nasdaq +0.5%. Crude +1% to $97.08. Gold flat at $1672.90.
Today's economic calendar:
10:30 Dallas Fed Manufacturing Outlook
12:15 PM Fed's Pianalto: Monetary Policy and Economic Outlook
6:15 PM Fed's Evans: Economic Outlook and Monetary Policy
Notable earnings before today's open: SDRLTIF
Notable earnings after today's close: PWRD
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