Stocks were driven by European headlines again today, a number of which were particularly troublesome. In Cyprus, the final bailout deal included larger losses for depositors than the first deal offered by the EU. Uninsured depositors, shareholders, and bondholders were completely wiped out at Cyprus Popular and Laiki Bank, and uninsured depositors at Bank of Cyprus received a 40% haircut. Some banks in Cyprus will reopen tomorrow, but Cyprus Popular and Bank of Cyprus will remain closed until further notice to ward off capital and deposit flight. Later, the chief European finance minister, Jeroen Dijsselbloem, stated that the bailout plan that had been used in Cyprus (where losses were inflicted on depositors, shareholders, and bondholders) would be the template for any future restructurings in Europe. However, it was later stated that his comments had been misinterpreted.
In the US, equity futures rallied overnight at the idea of getting a deal done in Cyprus, but they were quickly faded by the time US equity markets opened in the morning. The buy-the-chatter, sell-the-news reaction did not indicate a healthy market, and sentiment quickly reversed after the first 30 minutes. The Dallas regional manufacturing survey increased to 7.4 from 2.2 last month, led by nominal improvement in new orders and production activity.
(NASDAQ:BBRY) dropped in the pre-market as Goldman Sachs downgraded the stock on a tepid US debut of the new BlackBerry Z10 model. Goldman Sachs downgraded the stock to neutral from its previous buy rating with a price target of $17. Price checks for the new models showed poor marketing support and lack of advertising.
(NASDAQ:DELL) continued to shoot up as activist investor Carl Icahn and Blackstone
(NYSE:BX) officially entered bids for the company. Both deals valued the company above the original $13.65 per share (or $24.4 billion) offer from company founder Michael Dell, causing the stock to rise to a closing price of $14.51.
Tomorrow's Financial Outlook
Tomorrow's February durable goods orders should show a rise of 3.9% from January's decline of 5.2%. The rise is mostly due to December's sizable influx of large aircraft orders and its ensuing fall in January. The ex-transports sub index is expected to show a modest 0.7% rise from the prior month's 1.9%. Home prices as represented by the S&P/Case Shiller composite index are expected to rise at an annual rate of 7.90%, up from the prior month's 6.84%. Lastly, the Richmond regional manufacturing survey is expected to remain unchanged at 6, still in growth territory.
Global economic data is on the lighter side with the Swiss KOF Institute releasing its March economic forecast.
There will be no major earnings releases in the US tomorrow.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.