http://seekingalpha.com/article/280715-wall-street-breakfast-must-know-news?source=email
Express Scripts to buy Medco Health for $29B. Express Scripts (ESRX) has agreed to buy Medco Health Solutions (MHS) for $29.1B in cash and stock. Express is offering $71.36 a share, representing a 28% premium to Medco's close yesterday of $55.78. The deal will combine two of the largest managers of prescription drug benefits in the U.S., and could help lower drug costs by leveraging the combined company's size. Express also disclosed that Q2 net profit rose to $334.2M from $289.9M as revenue increased to $11.4B from $11.3B.
Germany, France reach deal to rescue Greece. Ahead of a eurozone summit today and amid warnings about the survival of the euro, Angela Merkel and Nicolas Sarkozy have agreed on a new bailout for Greece following hours of late-night talks, which also included Jean-Claude Trichet. Details weren't released although sources said it would include a new rescue loan of roughly €70B ($99.51B), lower interest rates, and a bond exchange. To prevent contagion, officials are considering using the EU's €440B ($626B) rescue fund to provide precautionary credit lines and to recapitalize banks.
Intel lays out roadmap for growth as Q2 tops estimates. Intel (INTC) slightly lowered its forecast for sector-wide PC sales but gave a bullish outlook for Q3 after Q2 earnings beat forecasts, with net profit rising 2% to $2.95B and revenue up 21% to $13B. Intel is overcoming weakening PC demand in developed nations through increasing sales in emerging markets such as China and India, and strong corporate sales. And while the iPad has hurt PC sales, Intel is benefiting from the increased need for the servers that handle Internet traffic for smartphone and tablet computers. Nonetheless, shares fell 1.9% post-market.
Microsoft earnings seen rising. Another company hurt by the iPad's success, Microsoft (MSFT), is nonetheless expected to report that Q4 net profit rose to $0.57 from $0.51 a year earlier when it releases its earnings after the bell today, with revenue climbing to $17.23B from $16B. In addition for news on how Windows is faring, investors will be looking for details on the take-up for Microsoft's new online Office offering, and whether the company's huge Internet investments as a whole - including Bing - are at long last beginning to bear fruit. If nothing else, the computer gaming division should be a bright spot.
Fed planning for debt default. The Fed and the Treasury have been preparing for a U.S. default, FOMC voting member Charles Plosser said. Some of the planning is operational and some policy related, such as whether the Fed could treat Treasurys as collateral for loans. As for Ben Bernanke's assertion that a default could have "catastrophic" effects, Plosser was more circumspect, but asked, "Do we really want to run that experiment?" Plosser's comments came as Barack Obama expressed support for a short-term increase in the debt ceiling to allow time for a broad deal.
Nokia up despite loss. Nokia (NOK) swung to a Q2 net loss of €0.10 ($0.14) from a profit of €0.06 a year earlier as net sales fell 7% to €9.28B. The company sold 16.7M smartphones in the quarter and 88.5M overall, below forecasts of 95.5M. CEO Stephen Elop said the firm is "making better-than-expected progress toward our strategic goals" and has a clear strategy to address concerns about its product competitiveness. For some reason, investors appear to be convinced and shares +5.2%.
American Express Q2 leaps 31% on record spending. Global consumer confidence may have fallen to an 18-month low in Q2, but record customer spending on American Express (AXP) cards, as well as a weak dollar, helped the company top Street estimates in the quarter. Net profit jumped 31% to $1.33B as revenue climbed 12% to $7.62B and loan-loss provisions fell to $357M from $652M a year earlier. However, costs rose 21% to $5.5B on a sharp increase in expenses in card member rewards. Shares fell 0.3% post market.
Ericsson net profit rises 66%. Ericsson's (ERIC) Q2 net profit jumped 66% to 3.12B Swedish kronor ($484.2M) as net sales increased 14% to 54.77B kronor, although earnings missed expectations as restructuring charges and a strong kronor offset higher sales of network equipment. Despite the miss, Ericsson is benefiting from a surge in demand for mobile broadband equipment as carriers aim to cope with the growth of smartphones and tablet computers. Premarket: ERIC -8.5% (7:15 ET).
FCC extends review of AT&T purchase of T-Mobile. The FCC is extending its appraisal of AT&T's (T) $39B acquisition of T-Mobile USA (DTEGY.PK) after AT&T submitted new economic data to bolster its case. The move was pounced upon by one opponent as an admission that the carriers will have to meet a "stiffer burden" to justify the merger. This could especially be the case after Senate Antitrust Chairman Herb Kohl called for the deal to be blocked, and while he can't stop it, his opinion could carry weight with regulators.
Zillow no weeping willow on debut. Zillow's (Z) shares soared 79%to $35.77 on its debut yesterday as the appetite for new Internet plays showed no signs of abating. The online real-estate database now has a market cap of nearly $1B despite making a loss last year and earning revenues of just $30.4M, and despite data showing that Americans are buying homes at the weakest pace in more than a decade. As with other Internet IPOs of late, Zillow stoked demand with a small float.
News Corp. computer hacking case referred to FBI. News Corp. (NWS) is set to face further scrutiny in the U.S. after Senator Frank Lautenberg asked the Justice Department and FBI to examine the details of a case settled between a News Corp. unit and Floorgraphics, an in-store marketing company. Floorgraphics accused News America Marketing of hacking its computer systems up to 11 times, but the companies settled for $29M in 2009. News Corp. bought the company soon afterwards.
Earnings Results: Today Premarket, Yesterday After-Hours
Today's Markets:
In Asia, Japan flat at 10010. Hong Kong -0.1% to 21987. China -1.0%to 2766. India -0.4% to 18436.
In Europe, at midday, London -0.8%. Paris -0.7%. Frankfurt -0.9%.
Futures at 7:00: Dow -0.25%. S&P -0.1%. Nasdaq -0.5%. Crude -0.95% to $97.47. Gold +0.1% to $1598.90.
Thursday's Economic Calendar:
8:30 Initial Jobless Claims
10:00 Leading Indicators
10:00 Philly Fed Business Outlook
10:00 FHFA Housing Price Index
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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