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BlackBerry Takes $1 Billion Investment From Fairfax; Twitter Boosts IPO Range


Today's financial recap and tomorrow's financial outlook.

US equities started off the day slightly higher and closed the day about unchanged. The large cap S&P 500 (INDEXSP:.INX) gained 0.29%. The small cap Russell 2000 (INDEXRUSSELL:RUT) was the best performer, gaining 1.05%. The worst-performing sector today was financials, the only sector that declined. The best-performing sector was energy, which gained a solid 1.1% due to declines in crude oil and natural gas prices.

The investment community was rocked by news that hedge fund SAC Capital had agreed to plead guilty to insider trading charges and pay a $1.8 billion fine. The firm will plead guilty to all counts and will no longer be able to manage outside investor funds.

BlackBerry (NASDAQ:BBRY) announced this morning that it was receiving a $1 billion investment from Fairfax Financial (OTCMKTS:FRFHF) and other institutional investors. The investors will receive convertible bonds in BlackBerry with a common stock strike price of $10 per share. The company also announced that it had closed the due diligence period for potential buyers, and that CEO Thorsten Heins will step down.

Kellogg (NYSE:K) reported earnings before the market opened. The cereal maker cut its workforce by 7% and announced other cost-cutting measures in order to grow profits in the long term. The company also modestly lowered its profits forecast for the rest of the year. The stock gained 0.87% in today's trading.

Twitter (NYSE:TWTR) announced today that it would price its initial public offering at $23-$25 per share, up from its first estimate of $17-$20. Additionally, later in the day it was reported that the stock was oversubscribed by several times at the $25 price, indicating that the IPO could price well above the proposed range. The books close tomorrow and the stock will be available for trading on Thursday morning.

Tomorrow's Financial Outlook

Tomorrow kicks off a very busy economic data week. The national ISM survey of services producers will be released at 10:00 a.m. EST. Economists estimate that the index will decline slightly to 54.0 from 54.4 in September. The other notable economic data point for the day is the IBD/TIPP Economic Optimism index.

Globally, the Australian central bank's monetary policy decision should move foreign exchange markets. Recently, the Reserve Bank of Australia has pulled back from aggressive easing measures as a way to increase the country's exports, saying that the currency had begun approaching fair value. Other economic data points to take note of are the services PMI of China and the UK.

Twenty-six major US companies are scheduled to report earnings tomorrow. Notable reports include T-Mobile (NYSE:TMUS), Twenty-First Century Fox (NASDAQ:FOXA), Sturm, Ruger & Co. (NYSE:RGR), Tesla (NASDAQ:TSLA), Mosaic (NYSE:MOS), AOL (NYSE:AOL), and Zillow (NASDAQ:Z).

Twitter: @Minyanville

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