by Rachael Granby and the Market Currents team
Eurozone headed for recession. The European Commission now forecasts a mild recession for the eurozone, with the region shrinking 0.3% this year. As recently as November, the EC had expected 0.5% growth this year. One of the sharpest country revisions is for Spain, now expected to contract 1% vs. prior forecast of +0.7%. Euro +0.4% to $1.3293.
BP, Anadarko face possible fines. Anadarko Petroleum (APC) and BP (BP) are liable for civil damages related to the Gulf oil spill, District Judge Carl Barbier ruled yesterday, exposing the two firms to billions of dollars in potential fines. Transocean's (RIG) liability is still up in the air after it wasn't named a "responsible party" in the decision. The government's case goes to trial on Monday. Premarket: BP -0.2%, RIG +6.6% (7:00 ET).
RBS loss widens. RBS (RBS) reported its 2011 net loss widened to £2B vs. a £1.1B loss a year ago and worse than consensus of a £1.1B loss this year. The loss would have been narrower if not for a £950M provision to compensate some customers improperly sold personal-loan insurance. To the dismay of some shareholders, investment bankers are still getting bonuses, though their bonus pool was cut to £390M from £950M a year ago. Shares +5.3% premarket (7:15 ET).
Microsoft goes after Google, MMI. Microsoft (MSFT) filed a complaint with European regulators that Motorola Mobility Holdings (MMI), with Google's (GOOG) support, is misusing patents, demanding unfairly high prices from device makers to use standard patents. The patents in question are relevant to products like Microsoft's laptops and Xbox game console.
Payroll-tax cuts extended. President Obama signed the payroll tax bill into law, which will extend payroll-tax cuts through the end of 2012, prolong extended unemployment benefits, and prevent a cut in pay for doctors who treat Medicare patients. The House and Senate passed the bill last week.
HP beats but outlook soft. Hewlett-Packard (HPQ) beat earnings expectations yesterday ($0.92 vs. $0.87 consensus) but came in short on revenue ($30B vs. $30.7B consensus). The company expects FQ2 EPS of $0.88-$0.91, below $0.95 consensus, and reiterated guidance for FY12 EPS of $4, below $4.08 consensus. Sales fell across all major regions, and were hurt by a 15% Y/Y drop in PC sales - much worse than FQ4's 2% drop. Share was also lost in enterprise hardware, where sales fell 10% thanks to server/storage declines. Services +1%, and printing -7%. High-margin software sales were up 30%, boosted by the Autonomy acquisition.
FDA panel greenlights Vivus anti-obesity drug. Vivus (VVUS) shares are up 109% in premarket trading (as of 7:15 ET) after an FDA advisory panel voted 20-2 yesterday to recommend anti-obesity drug Qnexa. The news lifted shares of rivals with weight-loss drugs pending approval, including Arena Pharmaceuticals (ARNA) and Orexigen Therapeutics (OREX), +20.4% and +23% respectively premarket.
U.K., Japan fight Volcker Rule. The U.K. and Japan are urging the U.S. to rewrite the Volcker Rule, concerned trading restrictions on U.S. banks could hit sovereign debt markets at a particularly fragile moment. In a high-profile expression of their concern, U.K. finmin George Osborne and Japanese counterpart Jun Azumi have written an op-ed in the FT warning of the "unintended consequences" of financial reform.
Comcast sues Sprint. Comcast (CMCSA) is suing Sprint (S) over the alleged infringement of patents covering wireless networking technologies. The suit comes comes two months after Sprint sued Comcast and other cable providers for allegedly infringing on its voice-over-IP patents. Meanwhile, Sprint, T-Mobile, and MetroPCS (PCS) are continuing their efforts to halt Verizon's (VZ) spectrum/reseller deals with cable providers.
Google prompts privacy concerns. Citing concerns that recent changes to Google's (GOOG) privacy policy raise the risk of identity theft and fraud, 36 state AGs sent Larry Page a letter outlining their issues with the changes. Google's new policy, which begins March 1, will allow it to combine users' personal info from web history and YouTube with other Google products; existing users can't opt out without exiting the whole Google system.
Wynn Macau calls emergency meeting. Wynn Macau will hold an emergency board meeting tomorrow to discuss the removal of Kazuo Okada as a director, sources say. Wynn Macau's board can unanimously vote Okada off, but removing Okada from the board of parent Wynn Resorts (WYNN) will require a vote by shareholders.
China needs to reform. China could face an economic crisis unless it implements deep reforms. That's the conclusion of a report, to be released Monday by the World Bank and a Chinese think tank, which challenges how China's economic model has developed over the last decade and stresses the need to scale back China's vast state-owned enterprises.
Today's Markets:
In Asia, Japan +0.4% to 9596. Hong Kong -0.8% to 21381. China +0.3% to 2410. India -0.4% to 18079.
In Europe, at midday, London +0.3%. Paris flat. Frankfurt -0.3%.
Futures at 7:00: Dow +0.1%. S&P flat. Nasdaq +0.2%. Crude +0.2% to $106.50. Gold +0.4% to $1778.20.
Thursday's economic calendar:
8:30 Jobless Claims
10:00 Mass Layoffs
10:00 FHFA House Price Index
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
11:00 KC Fed Manufacturing
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
Earnings Results: Companies that beat EPS expectations last night and this morning include DISH Network (DISH) and Hertz Global (HTZ).
Those that missed forecasts include Newport (NEWP) and DryShips (DRYS).
Notable earnings before Thursday's open: AEE, AMT, ANSS, BBG, BRY, CMS, DISH, DNR, FWLT, GTI, HRL, IDCC, IMAX, IRM, IVR, KSS, LINE, LKQX, LXP, NGLS, NIHD, OCR, PCS, PDCO, PEG, PXP, SATS, SHLD, SUG, SWY, SXCI, TFX, TGT, THI, TS, TTC
Notable earnings after Thursday's close: ADSK, AGO, AIG, BIO, CBI, CRM, CROX, CUBE, DECK, FSLR, GPS, GTE, HLS, IAG, INT, LNG, LONG, MCP, MELI, MGA, MHK, MNST, MRVL, NDSN, PSA, SBAC, SD, SPN, TIVO, WBMD, WR, XCO
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