- Global makets plunge (Reuters)
- Goodbye Mrs. Watanabe – Japan Sees Worst Developed-Stock Rout as Nikkei 225 Drops (BBG)
- Who could have possibly predicted this – Firms Pinched by Pressure to Hold Down Their Prices (WSJ)
- RBA Shifts to Neutral as It Signals Comfort With Aussie’s Level (BBG)
- Fractures Emerge Between Obama, Congressional Democrats (WSJ)
- Brazil suffers record trade deficit (FT)
- One-year prison sentence for 21-year-old Twitter user who glorified terrorists (El Pais)
- El Salvador fisherman washes up in Marshall Islands after year adrift (Reuters)
- Apple Quietly Builds New Networks (WSJ)
- UBS CEO Says Emerging-Markets Selloff Overdone as Investors Exit (BBG)
- SAC’s Mathew Martoma found ‘canary in coal mine’, court told (FT)
- Going on 30, Living With Mom and Dad (BBG)
- Heroin Use, and Deaths, Rise (WSJ)
- Web companies give first look at secret government data requests (Reuters)
- Spying Fears Abroad Hurt U.S. Tech Firms (WSJ)
Overnight Media Digest
* Ten big drug companies that have spent billions racing one another to find breakthroughs on diseases like Alzheimer’s have formed an unusual pact to cooperate on a government-backed effort to accelerate the discovery of new medicines.
* American companies are struggling with falling prices for a number of their key products amid intense competition and pressure from cost-conscious customers. Corporate revenues are showing the strain, whether from lower prices, weak demand or a combination of the two.
* The head of the nation’s top telecommunications regulator conveyed skepticism about further consolidation in the wireless industry during a meeting with Sprint Corp board members on Monday, a person briefed on the meeting said.
* Revelations about NSA eavesdropping have given foreign governments an opening to restrict U.S.-based IT companies, which are being depicted as either too compliant with or complicit in the spying.
* Hewlett-Packard Co said it found major accounting errors in an audit of the 2010 financial statements of UK software maker Autonomy, the first significant evidence backing up HP’s claim that Autonomy inflated its revenue and profit before the U.S. company acquired it.
* As Panasonic’s vaunted television business fades, a string of lesser-known niche businesses-such as solar panels and airplane entertainment systems-are rising to take its place.
* Walt Disney’s interactive-media unit is preparing to lay off several hundred people despite a strong launch for its videogame “Infinity.”
* Heidrick & Struggles International Inc chose former Goldman Sachs Group Inc partner Tracy R. Wolstencroft as its first outside chief executive, concluding an unusually long search by the big executive-search company.
* A new Pew Research survey on Facebook Inc users, released 10 years after the social network’s founding, sheds new light on how relationships are changing in the age of social media. While there are more people than ever using Facebook, only a small percentage of users are sharing details about their lives every day.
* U.S. regulators plan to require auto makers to equip new cars and trucks with technology that allows vehicles to communicate with each other to avoid crashes.
* Barrick Gold Corp and Goldcorp Inc the world’s largest gold miners, are close to selling their jointly owned Marigold mine in Nevada for more than $250 million, according to a person familiar with the matter.
* Western Union Co will remain under the supervision of a monitor and faces the possibility of new financial penalties after Arizona’s attorney general said the money-transfer company had failed to put in place sufficient controls to prevent money laundering.
* America’s dominant tobacco company is getting serious about electronic cigarettes. Marlboro cigarette maker Altria Group Inc said Monday it will buy e-cigarette upstart Green Smoke Inc for $110 million in the latest sign the battery-powered devices are moving from fad to mainstay and pose a rising competitive threat to traditional smokes.
* Volkswagen AG is going to allow employees at its Chattanooga, Tennesse, plant to vote later this month on whether to unionize under an agreement it worked out with the United Auto Workers union.
* January’s severe cold spell in the United States punished auto sales with industry volume falling for the first time since September and most major auto makers blaming the harsh weather for temporarily depressing vehicle demand.
* Duke Energy Corp on Monday said it is in talks to buy certain generating assets from a power utility in North Carolina.
* Intel Corp unveiled a series of changes to its executive compensation structure Monday, including boosting the number of management employees required to own stock.
* Lockheed Martin Corp is launching a new civilian version of its C-130J Super Hercules military cargo aircraft that a senior executive said could be available for energy and mining companies to supply remote areas with personnel and equipment by 2018.
Billionaire John Malone, chairman of Liberty Global and Liberty Media, has held preliminary talks with Formula One backer CVC Capital Partners about buying a stake in the motor racing series, people familiar with the matter said.
U.S. technology company Hewlett-Packard has claimed that Autonomy, the British software company it bought for $11 billion in 2011, massively overstated its revenue and profit for the previous year.
UniCredit, Italy’s biggest bank by assets, said it had sold 700 million euros ($943.98 million) of non-performing loans to AnaCap Financial Partners last December. The lender said the sale had an unspecified impact on its 2013 balance sheet.
The United States’ two biggest carmakers by revenue, General Motors and Ford, posted lower January domestic sales figures, raising questions about the robustness of the U.S. auto boom.
Elliott Advisors has accumulated a 99 percent stake in British video game chain Game Retail, setting the fund manager up for a huge windfall if plans for a 300 million pound ($489.96 million) initial public offering are successful.
* “Gig City,” as Chattanooga is sometimes called, has what city officials and analysts say was the first and fastest – and now one of the least expensive – high-speed Internet services in the United States.
* Poor numbers on factory orders and car sales left investors wondering if their view of the economy was too rosy, and the three major indexes each fell more than 2 percent.
* The jury is expected to start deliberating on Tuesday in the trial of Mathew Martoma, a former top portfolio manager at SAC Capital Advisors, accused of using insider information to make trades.
* Hewlett-Packard Co has disclosed to the authorities that it found what it said were serious accounting errors at Autonomy, the British software maker it acquired in 2011, leading to a number of major revisions in the acquired company’s financial report for 2010.
* The federal government said on Monday that it planned to require all new cars to broadcast their location, speed, direction and other data, and to receive similar data from other vehicles, to warn drivers of impending collisions. But regulators cautioned that any new rules would be years away.
* Automakers reported on Monday sharp declines in United States sales in January as a harsh freeze and winter storms thwarted purchases across much of the country.
* In what will be one of the most closely watched unionization elections in the South in decades, Volkswagen AG announced on Monday that the 1,600 workers at its assembly plant in Chattanooga, Tennessee, will vote next week on whether to join the United Automobile Workers.
* Barclays Plc’s chief executive, Antony Jenkins, said Monday that he would forgo a bonus for 2013 in light of the bank’s continued restructuring costs and litigation expenses.
* Warburg Pincus plans to announce that it will invest up to $100 million in Dude Solutions, a provider of cloud-based software that helps schools, hospitals and government agencies manage building maintenance.
* Smith & Nephew, the British medical technology giant, has agreed to buy ArthroCare Corp, an American specialist in sports medicine, for an enterprise value of $1.5 billion.
THE GLOBE AND MAIL
* The head of Canada’s foreign-intelligence electronic-eavesdropping agency, John Forster, has for the first time defended the government’s secret surveillance programs that collect telecommunications “metadata,” calling it fundamental for the Canadian government to pick out foreign terrorists and other targets. (http://link.reuters.com/fyx56v)
* Health authorities have stepped up a fight against a drug-resistant family of bacteria that has spread among a small number of patients in one unit at Royal Columbian Hospital in New Westminster. The Fraser Health Authority officially declared an outbreak on Monday, isolating patients in the ward and requiring medical staff to be gowned and gloved. (http://link.reuters.com/gyx56v)
Reports in the business section:
* A new study by the University of Toronto’s environmental chemistry research group has suggested that the environmental health risks of oilsands operations in Alberta’s Athabasca region have probably been underestimated. (http://link.reuters.com/jyx56v)
* Gary Giroux, the lead detective investigating allegations of criminal activity involving Toronto Mayor Rob Ford, says the case is still “very active.” Giroux said he has been commanded to “take the investigation any direction it goes involving criminality in the mayor or the mayor’s office.” (http://link.reuters.com/nyx56v)
* Canadian home prices are overvalued by 10 percent according to two new reports issued by Toronto-Dominion Bank and the International Monetary Fund on Monday. (http://link.reuters.com/ryx56v)
BARCLAYS CHIEF ANTONY JENKINS DECLINES 2.7 MLN STG BONUS
Antony Jenkins, chief executive of Barclays, has turned down an annual bonus that could have been worth as much as 2.7 million pounds ($4.41 million), saying it “would not be right” to accept the award.
PUBLIC TO BE OFFERED LLOYDS SHARES AS EARLY AS MARCH
The public could be offered the chance to buy shares in Lloyds Banking Group as early as next month after the taxpayer-backed lender said it was in the advanced stages of preparing a prospectus for a retail offer.
RANDGOLD EYES ACQUISITIONS AND HIGHER GOLD PRODUCTION
London-listed African mining company Randgold Resources is on the lookout for acquisitions and plans to increase gold production amid a better-than-expected start to the year for the precious metal.
AMAZON’S UK SALES SLOW AMID CALLS FOR BOYCOTT
Amazon’s sales growth in Britain slowed last year amid calls from members of Parliament and consumer groups to boycott the online retailer over its low UK tax payments.
AUTONOMY’S UK PROFITS ‘OVERSTATED BY 80 PCT’, HEWLETT-PACKARD FINDS
Hewlett-Packard’s long-running investigation into claims of accounting irregularities by the former management team of Autonomy, the British software company it bought for more than 10 billion pounds, has concluded that the firm’s main UK trading company overstated profits by 80 percent and revenues by 54 percent. ()
LLOYDS PPI COMPENSATION BILL NOW CLOSE TO 10 BLN STG
Lloyds Banking Group has set aside an extra 1.8 billion pounds to compensate customers it mis-sold payment protection insurance, taking the total cost to almost 10 billion pounds.
THREE ANGLO IRISH EXECUTIVES BLAMED FOR IRISH BANKING CRISIS GO ON TRIAL
The trial of senior executives at the bank that almost bankrupted Ireland begins this week with tight security around the Dublin courthouse where the men being blamed for the Irish banking crisis are to be tried.
RYANAIR FIGHTS BACK BY PARKING ITS AIRCRAFT IN FLAG CARRIERS’ BACK YARDS
A dismal winter for Ryanair has prompted the Irish airline to plot aggressive tactics in challenging traditional flag carriers with cut-price fares at primary airports serving European capital cities.
NEW SAINSBURY’S CHIEF MIKE COUPE INVESTS IN CONTROVERSIAL ‘TAX AVOIDANCE’ SCHEME
Sainsbury’s new chief executive is a member of a controversial tax avoidance scheme that uses legal loopholes in a way that can reduce tax bills.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled for today include:
Factory orders for December will be reported at 10:00–consensus down 1.8%
Allergan (AGN) upgraded to Buy from Neutral at Citigroup
Angie’s List (ANGI) upgraded to Outperform from Market Perform at Barrington
BBCN Bank (BBCN) upgraded to Outperform from Market Perform at Keefe Bruyette
Bryn Mawr Bank (BMTC) upgraded to Buy from Neutral at Guggenheim
Cabot (CBT) upgraded to Buy from Neutral at SunTrust
Cathay General (CATY) upgraded to Outperform from Market Perform at Keefe Bruyette
Chevron (CVX) upgraded to Strong Buy from Outperform at Raymond James
Devon Energy (DVN) upgraded to Outperform from Neutral at Credit Suisse
Duke Realty (DRE) upgraded to Outperform from Sector Perform at RBC Capital
East West Bancorp (EWBC) upgraded to Buy from Hold at Deutsche Bank
First Republic (FRC) upgraded to Outperform from Market Perform at Keefe Bruyette
Gap (GPS) upgraded to Buy from Neutral at UBS
Gilead (GILD) upgraded to Outperform from Neutral at RW Baird
Merck (MRK) upgraded to Buy from Neutral at SunTrust
Nielsen (NLSN) upgraded to Buy from Hold at Pivotal Research
OpenTable (OPEN) upgraded to Neutral from Sell at Citigroup
Pfizer (PFE) upgraded to Buy from Hold at Jefferies
Prospect Capital (PSEC) upgraded to Buy from Hold at Wunderlich
Salesforce.com (CRM) upgraded to Buy from Neutral at Roth Capital
Wilshire Bancorp (WIBC) upgraded to Outperform from Market Perform at Keefe Bruyette
Zynga (ZNGA) upgraded to Buy from Neutral at UBS
Callon Petroleum (CPE) downgraded to Neutral from Buy at SunTrust
Credit Acceptance (CACC) downgraded to Market Perform from Outperform at JMP Securities
Helmerich & Payne (HP) downgraded to Underperform from Neutral at Credit Suisse
Newmont Mining (NEM) downgraded to Neutral from Overweight at JPMorgan
Peregrine (PSMI) downgraded to Neutral from Overweight at JPMorgan
U.S. Silica (SLCA) downgraded to Hold from Buy at Jefferies
AMC Networks (AMCX) initiated with a Buy at Topeka
Brown-Forman (BF.A) initiated with a Buy at Deutsche Bank
C&J Energy (CJES) initiated with a Buy at Jefferies
GlycoMimetics (GLYC) initiated with a Buy at Canaccord
GlycoMimetics (GLYC) initiated with a Buy at Jefferies
GlycoMimetics (GLYC) initiated with a Buy at Stifel
Kofax (KFX) initiated with a Buy at Craig-Hallum
LifeLock (LOCK) initiated with a Buy at Sterne Agee
Lionsgate (LGF) initiated with a Buy at Topeka
Madison Square Garden (MSG) initiated with a Buy at Topeka
Progressive Waste (BIN) initiated with an Underperform at Macquarie
StealthGas (GASS) initiated with an Overweight at Barclays
Symantec (SYMC) initiated with a Neutral at Sterne Agee
Anadarko (APC) sees potential damages from Tronox (TROX) proceeding up to $5.15B
Yum! Brands (YUM) reported Q4 China division SSS down 4%
Yum! Brands (YUM) CEO Novak said well positioned to deliver double digit EPS growth
SWS Group (SWS) formed special committee to review Hilltop Holdings (HTH) proposal
Duke Energy (DUK) announced pipe break, ash release at Dan River Steam Station
Silver Standard (SSRI) to purchase Marigold Mine (GG, ABX) for $275M
W.R. Grace (GRA) emerged from Chapter 11
Church & Dwight (CHD) raised its dividend 11% to 31c per share, announced $500M share repurchase plan
Companies that beat consensus earnings expectations last night and today include:
Sensata (ST), Centene (CNC), Becton Dickinson (BDX), PartnerRe (PRE), Sparton (SPA), Yum! Brands (YUM), Hartford Financial (HIG), UGI Corporation (UGI), Luminex (LMNX), Take-Two (TTWO), Hologic (HOLX), Edwards Lifesciences (EW)
Companies that missed consensus earnings expectations include:
Church & Dwight (CHD), Brown & Brown (BRO), Stanley Furniture (STLY), Dun & Bradstreet (DNB), Landauer (LDR), Anadarko (APC), Peregrine (PSMI)
Companies that matched consensus earnings expectations include:
AmeriGas (APU), CareFusion (CFN)
FCC’s Wheeler skeptical about Sprint (S), T-Mobile (TMUS) deal, Reuters reports
UBS (UBS) CEO Ermotti: Selloff in emerging markets a ‘bit overdone,’ Bloomberg reports
Google’s (GOOG) Schmidt confident of approval for Lenovo (LNVGY), Motorola deal, Reuters reports
Google (GOOG) told to move its ‘mystery’ barge in San Francisco, AP reports
AT&T (T) ends promotion to pay T-Mobile (TMUS) subscribers to switch providers, WSJ reports
Challenges face new Microsoft (MSFT) CEO as Wall Street watches, Reuters reports
Web firms (FB, MSFT, GOOG, YHOO) offer details about secret government requests for data, Reuters reports
Liberty Global (LBTYA), Discovery (DISCA) make joint approach to Formula One, Telegraph reports
Disney (DIS) unit to cut several hundred workers, WSJ reports
ARCA Biopharma (ABIO) files to sell common stock and warrants
Halozyme (HALO) files to sell $100M in common stock
Spherix (SPEX) files to sell 7.54M shares of common stock for holders
USA Compression (USAC) files $1B mixed securities shelf, 33.3M shares of common units