- Winter Storm Expected to Make Northeast Commutes Harder (BBG)
- Invasion of Spanish Builders Angers France Struggling to Compete (BBG)
- Toronto mayor, caught ranting on video, admits drinking a ‘little bit” (Reuters)
- IBM’s Hardware Woes Accelerate in Fourth Quarter (WSJ)
- Sharp Divisions Come to Fore as Peace Talks on Syria Begin (NYT)
- Corzine fails to win dismissal of CFTC’s MF Global lawsuit (Reuters)
- Afghanistan cracks down on advertising in favor of U.S. troops (Reuters)
- Dots Joins Clothing Retailers Filing for Bankruptcy (BBG)
- Microsoft CEO Search Rattles Boards From Ford to Ericsson (BBG)
- Banks Sit Out Riskier Deals (WSJ)
- Netflix Seen Reporting U.S. Web Users Reach 33.1 Million (BBG)
- Russia hacked hundreds of Western, Asian companies (Reuters)
- Christie’s Sales Soar to $7.13 Billion (WSJ)
- Ukraine PM takes hard line on protests, three killed overnight (Reuters)
Overnight Media Digest
* Regulatory pressures are pushing many of the biggest banks to pass on financing lucrative deals, as Washington targets excessive borrowing. The guidelines are designed steer banks from deals regulators find too debt-laden.
* U.S. military leaders have presented the White House with a plan that would keep 10,000 U.S. troops in Afghanistan after 2014, but then start drawing the force down to nearly zero by the end of President Barack Obama’s term, according to senior officials.
* Dozens of Syrian emergency-aid workers waited hours this weekend for government permission to evacuate hundreds of children, elderly and the sick from among tens of thousands of residents trapped with little food and medicine in a rebel-held neighborhood here sealed off by regime forces.
* The malicious software that infected Target Corp popped up in January 2013 with a price tag of $2,000 and spent nearly a year evolving in the Internet’s black markets before an unknown attacker slipped it into the retailer’s computer systems.
* Mohamed El-Erian stepped down as the CEO of Pimco, the giant asset-management firm that emerged as one of the winners of the global financial crisis but which has recently been hit by waning investor taste for plain vanilla bonds.
* The Federal Communications Commission will hold its first major auction of wireless airwaves in six years on Wednesday, kicking off tens of billions of dollars of spending by big U.S. carriers.
* BlackBerry Ltd said Tuesday that it intends to sell more than 3 million square feet of real estate holdings in Canada, the “majority” of its space there, raising questions about whether the company will remain based in the country.
* Target Corp on Tuesday said it would stop offering health coverage for part-time employees, citing insurance options available through public exchanges.
* The Secret Service said Tuesday it is working with McAllen, Texas, police to determine if recent arrests in a credit card fraud case have any link to the massive breach over the holidays at Target Corp.
* Sporting goods maker Easton-Bell Sports Inc said Tuesday that data from around 6,000 online shoppers was stolen during the month of December, making it the latest company to fall victim to a cyberattack during the holiday season.
* Activist investor Daniel Loeb is pushing the Dow Chemical Co split itself into two companies, a breakup that would go further than a restructuring now planned by the world’s second-largest chemicals maker.
* Amazon.com Inc has approached big entertainment companies about licensing their television channels for a possible new online pay-TV service, in what would be a significant expansion of the company’s online video efforts.
* News Corp said Dow Jones Chief Executive Lex Fenwick is leaving the company, naming William Lewis as interim CEO.
* A U.S. regulator, Office of the Comptroller of the Currency, in a letter last fall raised questions about HSBC Holdings’ anti-money-laundering controls for its business with correspondent banks, people familiar with the matter said.
* Texas Instruments Inc posted a 94 percent jump in fourth-quarter profit and announced plans to trim about 1,100 jobs, as the big chip maker continues to refine its focus. The Dallas-based company said the reductions will affect employees in the U.S., Japan and India. It had about 32,000 employees before the planned job cuts.
* IBM’s hardware business is eroding faster than expected, leading to the company’s steepest drop in quarterly revenue in more than four years.
* Shares of Expedia Inc took a 4.3 percent hit Tuesday after its visibility in Google Inc search results declined sharply, triggering concerns that Google may have penalized the online travel site.
* Dots LLC, a discount retailer of women’s clothing, filed for bankruptcy protection, while company executives seek a buyer for the chain’s roughly 400 stores.
A third of the largest non-financial companies of the world have an unspent cash pile of $2.8 trillion, which has been accumulating since the financial crisis, a study by Deloitte reveals.
Long-term care products for the elderly are currently limited, and would be encouraged, the British care and support minister and the Association of British insurers said in a joint statement on Tuesday. Companies such as Aviva, Aegon , Legal & General however are yet to suggest that there would be any new launches in the market at the moment.
Citigroup Inc has warned against the United Kingdom opting out of the European Union, saying such a move could hurt the British economy and reduce investment from international companies.
British electrical good provider Phones4U is expected to be floated by private equity firm BC Partners for an initial public offering on the London Stock Exchange that would value the company to up to 1 billion pounds.
Alternative lender Wellesley & Co is targeting retail investors to fund small and medium-sized residential builders for new homes along with other peer-to-peer lenders such as Funding Circle and Assetz Capital.
* The giant asset manager Pimco lost its heir apparent and most prominent spokesman on Tuesday when Mohamed El-Erian unexpectedly announced that he was stepping down from the company.
* Lex Fenwick, the hard-driving chief executive who stumbled in his efforts to transform Dow Jones, the publisher of the Wall Street Journal, has resigned effective immediately as the company rethinks its strategy.
* Investors are piling into the government debt of bailed-out countries like Ireland. But the demand comes despite the problems still plaguing the euro zone.
* Puerto Rico, which is battling a financial crisis of high unemployment and a crushing debt load, is under pressure to show investors and credit rating agencies that it can still borrow money from the capital markets. A group of hedge funds and private equity firms may help it do just that, but at a high price.
* JPMorgan Chase has removed itself from a potential $1 billion share sale by a Chinese chemicals company as an investigation in the United States into hiring practices in China by JPMorgan and other Wall Street banks moves forward, people with direct knowledge of the matter said on Tuesday.
* The global economy might be slowly recovering and consumers gradually gaining confidence. But Unilever, one of the world’s largest consumer products companies, remains cautious with slowing growth in emerging markets.
* Reassured by austerity programs, investors are again loading up on European sovereign debt, despite deep recessions across Southern Europe.
* The rest of the country is following North Carolina’s lead by sharply cutting the maximum number of weeks of unemployment benefits available.
* Intel Media, Intel Corp’s TV business was acquired by Verizon, which wants to add TV everywhere there is an Internet connection.
* Harry’s, an Internet shaving start-up, is nine months old and is trying to compete with Gillette and Schick, the titans that together control nearly 85 percent of the market. Harry’s and its backers believe that by running everything from the manufacturing of the razors to selling them online directly, the startup will control its entire customer experience, while allowing the company to change its products quickly.
* The World Economic Forum’s participants are saying that with the new confidence about the American economy, issues like climate change and the Syrian conflict are likely to get more attention.
THE GLOBE AND MAIL
* Prime Minister Stephen Harper says Canadians at home support his refusal to publicly criticize Israel – because to do so would be to attack an isolated minority state.
* Toronto Mayor Rob Ford’s ability to lead the country’s largest city is again in doubt after his admission that he’s returned to drinking and the emergence of two new videos – including one showing an incoherent mayor cursing the chief of police.
Reports in the business section:
* Thirteen Canadian companies have made the list of the 100 most sustainable corporations in the world, including several energy firms that often draw criticism from environmentalists.
* BlackBerry Ltd confirmed Tuesday it plans to sell most of its Canadian real estate, but new chief executive John Chen pledged to keep its headquarters in Waterloo, Ontario.
* Bombardier Inc is scaling back operations and cutting 5 percent of its global work force amid a slump in aircraft sales and delays in production of its marquee commercial jet.
* Rob Ford’s attempts to reform his image ahead of the mayoral election this year appear to have been shattered after a damaging new video surfaced Tuesday showing the Toronto mayor drunk, swearing and making offensive remarks about the city’s police chief.
* At a time of increasing tensions between Israel and Europe over Israel’s ongoing construction in areas acquired in the 1967 war, Israelis were happy to welcome Canadian Prime Minister Stephen Harper as one of Israel’s staunchest friends among national leaders.
* Bombardier Inc said Tuesday it would lay off roughly 1,700 of its aerospace employees, after a delay to its CSeries program was announced last week and as declining orders for its other aircraft puts pressure on the company’s cash reserves.
* Google Inc is launching a new service designed to evaluate the connection speeds of Internet providers, in the hopes of identifying which companies are delivering the best experience for consumers who want to watch high definition video online.
* BlackBerry is selling the majority of its Canadian real estate holdings in a bid to shore up its cash position and further shrink its sprawling, money-losing operations, as it struggles to refocus the business on its enterprise base.
CHINA SECURITIES JOURNAL
– The implementation of property taxes could be slower than previous expected due to the complicated progress in legislation, said a commentary of the newspaper, adding that it could be launched after two years.
CHINA BUSINESS NEWS
– An unexpected exposure of an internal farewell speech confirms the rumor that Li Lihui, vice Chairman of Bank of China is leaving.
– The government is expected to further tighten its grip on the shadow banking sector to “prevent regional risks from spreading nationwide.”
– More Chinese companies are considering issuing convertible bonds overseas.
– Nearly 60,000 people suspected of being involved in a total of 173 billion yuan ($28.59 billion) worth of intellectual property rights infringement were arrested by Chinese police in 2013.
– China should quicken and deepen the judicial reform in order to safeguard social fairness and justice, said a commentary by this mouthpiece of the ruling Communist Party of China.
BRITAIN’S BANKS URGE STRONGER TIES WITH BRUSSELS
banks have urged the Government to strengthen ties with Brussels, as
the single market is vital to the success of the country’s financial
services sector. The British Bankers’ Association has sent a paper to
the Treasury’s “balance of competences” review, which studies the
balance of power between the EU and Westminster.
IMF ENDORSES CARNEY STIMULUS AS IT UPGRADES UK
International Monetary Fund has handed a boost to the Governor of the
Bank of England by pledging its support for continued economic stimulus,
even as it ramped up growth projections for Britain’s economy. The
organisation forecast on Tuesday that Britain will grow by 2.4 percent
this year, against the 1.9 percent prediction it made in October.
UNILEVER COULD PULL OUT OF BRITAIN IF IT LEFT EU, WARNS MULTINATIONAL’S BOSS
UK would be better off staying inside the European Union “than kicking
against the table” and voting to leave, the boss of one of the world’s
largest consumer goods companies has said. Paul Polman, the Dutch chief
executive of the consumer multinational Unilever, said the company could
review its UK investment if Britain left the EU.
LLOYDS BANK – CO-OP DEAL WAS SWAYED BY POLITICS, LORD LEVENE TELLS MPS
Lloyds Banking Group was “swayed by political considerations” when it
chose the Co-operative Bank to take over more than 600 branches, the
head of a failed rival bid told MPs.
UK CHIEFS “AMONG WORLD’S MOST OPTIMISTIC” AT DAVOS
bosses are planning a hiring spree and new investment this year after
rediscovering their economic mojo. According to PwC’s annual global CEO
survey, UK business leaders started the year among the most optimistic
in the world. Two thirds plan to employ more, against a global average
of half, and half expect to drive growth through “product and service
HOBAN NAMED FOR “INTERFERING” IN LLOYDS BRANCH SALE
Hoban, the former Financial Secretary to the Treasury, has been named
as one of the politicians who appeared to interfere in Lloyds’ ill-fated
auction of more than 600 branches by Lord Levene of Portsoken.
HUNT PAYDAY DELAYED AS 35 MLN POUNDS SALE COLLAPSES
company takeover that would have netted Jeremy Hunt, the Health
Secretary, a 17 million pounds jackpot has collapsed after the
prospective buyer failed to agree the terms of a deal. Sky News
understands that negotiations between Inflexion Private Equity and
Hotcourses, a provider of online education listings, broke down in
HORSEMEAT SCANDAL FIRM FINDUS PLOTS PAYOUT
of the companies at the centre of last year’s horsemeat scandal is
plotting a financial restructuring that will lead to a
multimillion-pound payout for its owners. Sky News has learnt that
Findus is planning to launch a bond worth up to 200 million pounds in
the coming weeks to take advantage of attractive financing markets.
Fly On The Wall 7:00 AM Market Summary
Domestic economic reports scheduled for today include:
MBA Purchase Applications for the week of January 17 rose 4.7% due to refis. Mortgage applications dropped
CVS Caremark (CVS) upgraded to Strong Buy from Buy at ISI Group
Cerner (CERN) upgraded to Strong Buy from Neutral at ISI Group
Dow Chemical (DOW) upgraded to Neutral from Reduce at SunTrust
Endeavour (END) upgraded to Buy from Neutral at SunTrust
Informatica (INFA) upgraded to Outperform from Neutral at Credit Suisse
KBR (KBR) upgraded to Overweight from Equal Weight at Barclays
Macerich (MAC) upgraded to Outperform from Market Perform at Cowen
NuVasive (NUVA) upgraded to Outperform from Market Perform at Leerink
PAREXEL (PRXL) upgraded to Strong Buy from Buy at ISI Group
Power Integrations (POWI) upgraded to Outperform from Market Perform at Raymond James
Qlik Technologies (QLIK) upgraded to Hold from Sell at Drexel Hamilton
Red Hat (RHT) upgraded to Outperform from Perform at Oppenheimer
Scripps Networks (SNI) upgraded to Neutral from Sell at Citigroup
Silicon Motion (SIMO) upgraded to Buy from Hold at Needham
Unilever (UL) upgraded to Sector Perform from Underperform at RBC Capital
Walgreens (WAG) upgraded to Neutral from Cautious at ISI Group
Amira Nature Foods (ANFI) downgraded to Hold from Buy at Deutsche Bank
Arcos Dorados (ARCO) downgraded to Neutral from Overweight at JPMorgan
Bemis (BMS) downgraded to Underweight from Equal Weight at Barclays
CAE (CAE) downgraded to Hold from Buy at Canaccord
CBL & Associates (CBL) downgraded to Market Perform from Outperform at Cowen
Dollar Tree (DLTR) downgraded to Neutral from Buy at Sterne Agee
GlaxoSmithKline (GSK) downgraded to Market Perform from Outperform at Cowen
Great Lakes Dredge (GLDD) downgraded to Underweight from Equal Weight at Barclays
Hologic (HOLX) downgraded to Buy from Strong Buy at ISI Group
LogMeln (LOGM) downgraded to Market Perform from Outperform at Cowen
Mosaic (MOS) downgraded to Sell from Neutral at Goldman
Oracle (ORCL) downgraded to Perform from Outperform at Oppenheimer
Plains GP Holdings (PAGP) downgraded to Hold from Buy at Jefferies
Quality Systems (QSII) downgraded to Cautious from Neutral at ISI Group
Superior Energy (SPN) downgraded to Market Perform from Outperform at Wells Fargo
Targa Resources (TRGP) downgraded to Hold from Buy at Jefferies
Towers Watson (TW) downgraded to Neutral from Buy at Citigroup
Travelers (TRV) downgraded to Outperform from Top Pick at RBC Capital
Verizon (VZ) downgraded to Sector Perform from Outperform at Pacific Crest
ANI Pharmaceuticals (ANIP) initiated with an Outperform at Oppenheimer
BE Aerospace (BEAV) initiated with a Buy at Topeka
CIT Group (CIT) initiated with a Neutral at Goldman
Callidus Software (CALD) initiated with an Outperform at Credit Suisse
Credicorp (BAP) initiated with an Outperform at Credit Suisse
Electronics for Imaging (EFII) initiated with an Overweight at Barclays
Fidelity & Guaranty Life (FGL) initiated with a Neutral at JPMorgan
Fidelity & Guaranty Life (FGL) initiated with an Outperform at RBC Capital
Isis Pharmaceuticals (ISIS) initiated with a Buy at Deutsche Bank
Physicians Realty Trust (DOC) initiated with a Hold at KeyBanc
SLM Corp. (SLM) initiated with a Buy at Goldman
Triumph Group (TGI) initiated with a Hold at Topeka
Valero Energy Partners (VLP) initiated with a Neutral at Citigroup
Xylem (XYL) initiated with an Outperform at Oppenheimer
Mohamed El-Erian resigned as CEO, co-Chief Investment Officer of PIMCO (AZSEY)
News Corp. (NWSA) said Dow Jones CEO Fenwick to depart
BlackBerry (BBRY) to divest Canadian real estate
Prudential (PRU), Fosun expanded strategic partnership in China
Toll Brothers (TOL), GTIS announced Sienna South acquisition
CIT Group (CIT) announced $300M share repurchase plan
MHR seeks talks with Titan International (TWI) board
Target (TGT) to end health coverage for part-time workers
Companies that beat consensus earnings expectations last night and today include:
Textron (TXT), TE Connectivity (TEL), Renasant (RNST), Xilinx (XLNX), Supertex (SUPX), Super Micro Computer (SMCI), Cree (CREE), CA Technologies (CA), IBM (IBM)
Companies that missed consensus earnings expectations include:
Interactive Brokers (IBKR), Northrim BanCorp (NRIM), Woodward (WWD)
Companies that matched consensus earnings expectations include:
AMD (AMD), Texas Instruments (TXN)
- T-Mobile (TMUS) undercuts weakened Verizon (VZ) stock price, NY Post reports
- Teva (TEVA) asks Supreme Court to review Copaxone ruling, Globes reports
- Amazon (AMZN) denies report that it’s planning online pay-TV service, USA Today reports
- DBS Group (DBSDY) in talks for Societe Generale’s (SCGLY) Asia private bank, Reuters reports
- Fed expected to maintain low rate policy for now, Reuters reports
- Appeals court temporarily blocks Apple (AAPL) e-books monitor, WSJ reports
- Some big banks (BAC, C, JPM) avoid riskier deals as regulatory pressures grow, WSJ reports
- Boeing (BA) 787 transponder failure sparks Air India’s London return, Reuters reports
- Feds taking closer look at Mexican Target (TGT) suspects, NY Post reports
Ashford Hospitality Prime (AHP) files to sell 8M shares of common stock
Envision Healthcare (EVHC) files to sell 27.5M shares of common stock for holders
Keryx (KERX) files to sell $90M of common stock
NanoString (NSTG) files to sell $55M in common stock
Splunk (SPLK) files to sell 6M shares of common stock
Synaptics (SYNA) files to sell 1.95M shares of common stock for holders
ePlus (PLUS) files to sell 2.87M shares of common stock for holders