Morning Market Summary
Here's what to watch for...
Violence in Nigeria affecting Crude prices
- Oil prices rose sharply yesterday after a series of attacks in the Niger Delta that shut down nearly a fifth of Nigeria's oil production, according to the New York Times.
- Nigeria is the fifth-biggest supplier to the U.S. of low- sulfur, or sweet, crude oil, prized by refiners for the proportion of high-value gasoline it yields. Among OPEC's members, only Saudi Arabia can pump more oil to compensate for disruptions, although its crude is harder to process, according to Bloomberg.
- Nigerian authorities hunted for nine foreign workers being held as "human shields" by rebel fighters on Tuesday as the crisis in Africa's biggest oil industry forced world oil prices up sharply, according to Mail&Guardian Online.
Eon AG (EON)/Endesa SA (ELE)
- Eon of Germany on Tuesday trumped Gas Natural's takeover bid for Endesa, offering €29.1bn ($35bn) for Spain's largest electricity group in the second biggest cash bid of all time, according to the Financial Times.
- EON would be "slightly overpaying" if its offer for Endesa (ELE) went ahead, says ING Financial Markets, according to Newratings.com
- Large European utilities will further consolidate to leave just three dominant groups across the continent, according to the chief executive of EON (from Feb. 19 FT interview).
FOMC Minutes Due at 2 p.m. EST
- Today's release of the FOMC minutes will be from Alan Greenspan´s last Federal Open Market Comittee (FOMC) meeting on 31 January. In last week's testimony, new chairman Ben Bernanke laid a lot of pressure on the housing market as a key determinant of how domestic demand would evolve this year. It will be interesting to see what comments there are on this issue, although overall the market will be left with the same conclusion but how much will depend upon the data, according to FXStreet.com.
- The US dollar strengthened in European morning trade on Tuesday as traders positioned for the release of potentially hawkish Federal Reserve minutes, according to the Financial Times.
Stocks to Watch
- American Express (AXP) halted issuing new credit cards in Taiwan, in the latest sign of jitters over consumer-lending problems in one of Asia's biggest financial markets - WSJ.
- Apple (AAPL) Internet security experts identified second malicious software worm attacking Mac OSX - NY Post.
- Boeing (BA) plans to ask the Pentagon for $400 million to $500 million to cover the cost of ending part of a spy-satellite contract - WSJ.
- Eon (EON) has bid nearly $35 bln for Endesa (ELE) of Spain. International Power (IPR) and Suez (SZE) are among other utilities to possibly benefit from the talks.
- The Gap (GPS) upgraded by Deutsche Bank to Buy from Hold.
- Google (GOOG) denied Chinese media reports its Chinese language site is operating without a government license after a Beijing news article reported it. Also, company argued against Justice Dept. subpoena of millions of user search histories - WSJ.
- Home Depot's (HD) profit rose 23% on strong performances at its core retail stores, services business and Home Depot Direct, and the continued expansion of the Home Depot Supply platform - WSJ.
- IBM (IBM) says its researchers have made a breakthrough in reducing the width of circuits on silicon chips to less than 30 billionths of a meter - FT.
- Novartis (NOVN) and Alnylam (ALNY) to team up on pandemic flu drug.
- Procter & Gamble (PG) on Monday agreed to sell deodorant brands including Right Guard to the Dial Corp. unit of Germany's Henkel for $420 million.
- RadioShack (RSH) CEO David Edmondson resigned after admitting last week that he had inflated his educational credentials - WSJ.
- Time Warner's (TWX) debt will likely hit a record $35 billion as a result of its agreement to lift its stock-buyback program to $20 billion. The company said the increased debt could put its credit rating at risk - Wall Street Journal.
- Toll Brothers Inc. (TOL) was bid higher in pre-open, as an article in Barron's magazine said that after a nearly 50% tumble from their peak in July, the company appears undervalued as the manufacturer is still highly profitable and controls a large bank of land for future building.
- WalMart (WMT) earned $3.6 billion, or 86 cents a share in the fourth quarter -- a jump of 13.4% from the $3.2 billion, or 75 cents a share in the year-ago period. Revenue came in at $90.13 billion. Thomson First Call average analyst estimates had been earnings of 83 cents a share on revenue of $90.46 billion.
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