Cantor Morning News | Overnight Stocks

SIRI +/- Sirius XM Radio stock closed above a buck Wed. for the first time since Sept. 2008. Sure, shares of qSIRI are up more than 85% this year and now trade at about $1.12 but that's still a far cry from the nearly $4 level the stock traded at when Sirius and XM announced their plans to merge three years ago. And it seems safe to say SIRI will likely never come close to hitting its all-time high of about $70 from March 2000 ever again. http://money.cnn.com/2010/02/18/markets/thebuzz/index.htm

TM +/- Under growing pressure from U.S. lawmakers investigating Toyota Motor Corp.'s safety recalls, TM President Akio Toyoda changed course and said he would appear before Congress next week. "I have received Congressman Towns' invitation to testify before the [committee] on Feb. 24 and I accept," Mr. Toyoda said in the statement. "I look forward to speaking directly with Congress and the American people."

GM + General Motors announced plans to invest nearly $500M toward producing the next
generation Ecotec engines, which will result in creating nearly 550 jobs at three U.S. plants. http://www.freep.com/article/20100218/BUSINESS01/100218016/1332/GM-to-pump-500-million-into-Ecotec-engines-create-550-jobs

XNPT - XenoPort Inc. plunged the most ever in Nasdaq trading after the co.’s experimental treatment for restless legs syndrome wasn’t approved by U.S. regulators. XNPT declined $12.93, or 66%, to $6.67 at 4:00 p.m. in Nasdaq Stock Market composite trading. The decline was the stock’s biggest since the co. first sold shares to the public in June 2005. http://www.bloomberg.com/apps/news?pid=20601087&sid=aKXRIAdnlpgY&pos=7

SLB, SII + Oil-services co. Schlumberger Ltd. is in advanced discussions to acquire Smith International Inc., according to people familiar with the negotiations, a deal that would create an industry giant with revenues double that of its nearest rival. The deal, which the companies could announce in coming days, would bring together 2 of biggest players in the business of oilfield services, which help oil companies locate and drill for oil deposits. SII's current market capitalization is around $7.5B. Assuming a typical deal premium of around 20% would take the transaction in the $9B range, though an exact price could not be determined late Thursday

evening.

http://online.wsj.com/article/SB10001424052748703983004575074353939071066.html?ru=MKTW&mod=MKTW

New Financial-Overhaul Bill +/- Senate Banking Committee Chairman Christopher Dodd plans to introduce a new financial-overhaul bill next week, giving a boost to the White House's effort to toughen regulations governing the country's banks. The House passed its version of new financial rules in Dec., but differences between Democrats and Republicans over what the rules should do have slowed progress in the Senate. The Dodd bill would, among other things, establish a council of regulators to monitor emerging risks to the economy, and a new banking regulator to oversee nationally chartered financial companies. http://online.wsj.com/article/SB10001424052748703315004575073583254421168.html?mod=WSJ_business_whatsNews#printMode

WMMVF + Wal-Mart de Mexico announced plans to open 330 new units in 2010, most of them in Mexico, its key market. The co., known as Walmex, is Mexico's leading supermarket chain but also runs restaurants and clothing stores. In Central America, where it recently bought operations in five countries, the co. expects to open 30 new stores. http://www.reuters.com/article/idUSWNA427720100218?type=marketsNews

WMT +/- Wal-Mart Stores Inc. has benefited from better sales during the start of the economic slump as consumers turned to discount merchandise; however, WMT reported lower U.S. sales during the holidays even as other retailers saw signs of slow recovery. The decline in U.S. sales during the Q4 at the world's largest retailer, which collects roughly $1 out of every $10 spent at stores in America, was accompanied by a co. warning that soft sales would persist through April. "The economy remains challenging for many of our customers around the world," CEO Mike Duke said.

BAC - Former Bank of America CEO Kenneth Lewis said he was briefed twice on his co.'s decision not to disclose rising losses at Merrill Lynch & Co., before the bank's takeover of Merrill was put before shareholders. According to an Oct. deposition made public on Wed., Lewis said he was told by Tim Mayopoulos, then general counsel of BAC, and lawyers from Wachtell, Lipton, Rosen & Katz in Dec. 2008 that "there was not a disclosable item." That was despite the fact that the bank had recently revised its expectations for Merrill's Q4 pre-tax loss to more than $14B.

Federal Reserve +/- The Federal Reserve raised an interest rate it charges banks for emergency loans, and emphasized that a broader tightening of credit for consumers and businesses is still at least several months away. But the late-afternoon increase in the discount rate didn't have the muted impact Fed officials hoped for as stock futures and bond prices fell, and the dollar rose against the euro.

Greece + While leaders across Europe continued to wrestle with a bailout of Greece, its leaders appeared to be pushing ahead on a bold course: directly testing the markets with a 10-year offering of as much as 5B euros ($6.8B), according to a person familiar with the country's plans. If successful, the offering could help soothe bond markets across Europe, which remain jittery weeks after the crisis over Greece's finances first flared.

Willcom Inc. - Japanese mobile-phone co. Willcom Inc. filed for bankruptcy protection Thurs., in a blow to its owner Carlyle Group and highlights the challenges of private-equity investing in Japan.

UL - Perched atop of one of the world's fastest growing consumer-goods markets, Hindustan Unilever is no stranger to fierce competition. This makes the co.'s recent flat-footedness all the more remarkable.

http://online.wsj.com/article/SB10001424052748703787304575074933132642868.html?mod=djemheard

UBS - David Shulman, former UBS AG executive, will pay a civil penalty of $2.75M to settle allegations that he engaged in insider trading of his personal holdings of auction-rate securities, New York Attorney General Andrew Cuomo said.

PG + Procter & Gamble Co. announced that it expects stronger sales in coming months as it launches a flurry of new products, from India to Brazil to the U.S., but it acknowledged its profits won't grow as quickly over the long term as previously thought. The world's biggest consumer-products maker is betting on innovation to lure recession-weary shoppers with a wider range of prices and new features. "We have much work left to do but we're encouraged by early signs that our growth strategies are starting to work," PG CEO Robert McDonald told investors at a conference Thurs.

China - Investigators probing the cyber attacks against Google Inc. GOOG and other large U.S. companies have been examining whether computers at educational institutions in China were involved in the attacks, according to a person briefed on the matter. The New York Times reported that the attacks have been traced to computers at China's Shanghai Jiaotong University and the Lanxiang Vocational School.

http://online.wsj.com/article/SB10001424052748703787304575074703728470246.html?ru=MKTW&mod=MKTW

Homeowner Aid + President Obama will announce plans to provide an additional $1.5B to a state-assistance program for homeowners worst-hit by the downturn in U.S. housing values. The program, which Obama will announce in Las Vegas, is for states where the average home value for all homeowners in the state has dropped more than 20% from its value at the height of the housing bubble. About a half-dozen states qualify, including Nevada, Florida, California and Michigan.

http://online.wsj.com/article/SB10001424052748703787304575074870587312804.html?mod=djemalertNEWS

ROG + Rogers Corp. a manufacturer of specialty materials for electronics and consumer markets, posted an 82% rise in quarterly profit, helped by cost savings, and forecast Q1 results above market expectations. The co. posted Q4 earnings of $7.1M, or $.45 a/s, compared with $3.9M, or $.24 a/s, a year earlier. Excluding certain charges, it earned $.40 a/s. http://www.reuters.com/article/idUSSGE61H0K720100218?type=marketsNews

Heard on the Street +/- Discusses the decision by Daimler to scrap its dividend underscores the perils of turning bullish on a capital-intensive industry that is grappling with sluggish demand. But with a promise to restore the dividend this year, a major Daimler derating doesn't look deserved.

The New York Times

GOOG - A series of online attacks on Google and dozens of other American corporations have been traced to computers at two educational institutions in China, including one with close ties to the Chinese military, say people involved in the investigation They also said the attacks, aimed at stealing trade secrets and computer codes and capturing e-mail of Chinese human-rights activists, may have begun as early as April, months earlier than previously believed. GOOG announced on Jan. 12 that it and other cos. had been subjected to sophisticated attacks that probably came from China.

Reuters

Gold Futures - Gold dropped more than 1% after the U.S. Fed said it was raising the interest it charges banks for emergency loans, sending the dollar higher and dimming the appeal of bullion as an alternative investment. But weaker prices could attract buying from the jewelery sector and help gold resist pressure from declines in oil prices, and also worries about an increase in supply after the IMF said it planned to sell more bullion to raise money. Spot gold was at $1,104.65 an ounce, down $6.75 an ounce, having hit an intraday low of $1,098.55 an ounce. It hovered nearly 10 percent below a lifetime high above $1,200 an ounce struck in early Dec. U.S. gold futures for April delivery fell $12.7 an ounce to $1,106.00 after falling below $1,100 an ounce as the dollar rose to a 9-month high against the euro.

http://www.cnbc.com/id/35469221

Oil Futures +/-

Oil prices fell to near $78 a barrel after the U.S. Fed raised its emergency lending rate, stirring fears that monetary tightening could slow demand growth in the world's largest oil consumer and stem investment flows into commodities. The Fed's move to increase the discount rate to 0.75 percent from 0.50 percent also spurred selling in European shares, gold and other commodities. The dollar jumped to an 8-month high against a basket of currencies and this also weighed on oil prices. Oil tends to fall when the dollar rises as it makes oil more costly for buyers using other currencies. U.S. light, sweet crude for March delivery fell after earlier falling by more than $1 to a low of $77.76 a barrel. London Brent crude for April fell.

http://www.cnbc.com/id/35469223

MarketWatch.com

U.K. Retail Sales - U.K. retail sales posted a monthly fall of 1.8% in Jan., the Office for National Statistics reported. Compared to the same month last year, sales rose 0.9%. Economists had forecast a 0.5% monthly fall and a 1.1% annual rise.

DELL +/- Dell Inc. reported a Q4 profit of $334M or $.17 p/s, compared with a profit of $351M or $.18 p/s, for the year-earlier period. Revenue rose to $14.9B from $13.4B for the same quarter the previous year. Adjusted income was $.28 p/s. Analysts had expected earnings of $.27 p/s, on revenue of $13.85B, according to a consensus survey by TR.

CBS +/- CBS Corp. said that its Q4 profit fell 57% on charges related to the divestiture of radio stations as ad sales remained weak at its radio, outdoor and publishing units. The co. said revenue trends are improving in the Q1 of 2010. Net income was $58.8M or $.09 p/s, compared with a profit of $136.1M or $.20 p/s, in the same period a year earlier. Excluding items, CBS said it would have earned $171.1M or $.25 p/s, in the latest three months. Revenue was about flat at $3.5B. Analysts polled by FSR were expecting a profit of $.25 p/s on $3.46B in revenue.

GSK + GlaxoSmithKline said that its reviewing label changes proposed by the FDA for asthma medications containing long-acting beta-agonists, such as GSK's Advair. The co. and makers of other affected medicines have 30 days to agree to the proposed changes or state why they aren't warranted. "There was no evidence in clinical trials for Advair of increased risk for asthma-related death, asthma-related hospitalization, asthma-related intubation or all cause death compared to other treatments options," GSK said.

Russia +/- Russia's central bank lowered its refinancing rate by 25bps to 8.5%, effective Feb. 24, according to a statement on its Web site. The bank also lowered the repo rate, at which liquidity is provided to the banking sector, by 25bps to 7.5%. The bank said it made the decision in an effort to spur bank lending in the economy, adding that there are no risks of rising inflation.

NVS + Novartis said that its Tasigna drug has been granted priority review by the FDA for the treatment of adult patients with a form of newly diagnosed leukemia. NVS said FDA priority review status is granted to therapies that offer major advances in treatment or provide a treatment where no adequate therapy exists. The status accelerates the standard review time from 10 to 6 months.

European Stocks - European shares fell after a surprise 1/4pt hike in the U.S. Fed's disount rate late the previous day. Overall, the U.K. FTSE 100 index fell 0.6% to 5,293.07, the German DAX index fell 0.8% to 5,632.61 and the French CAC-40 index fell 0.9% to 3,712.43. The Spanish IBEX-35 fell 1% to 10,458.60.

CRERY - French supermarket group Carrefour said that its fiscal-yr net profit fell 74.2% to 327M euros, while sales declined 1.0% to 87.4B euros. The firm said that it took 1.1B euros of charges over the yr, including 766M euros of impairment charges, mainly in Italy. In '10, the environment is likely to remain challenging, the firm said.

MORN - Morningstar Inc. said that Q4 net income came in at $14.4M or $.29 p/s, down 25% from a year earlier when the financial data and analysis provider made $19.3M or $.39 p/s. Consolidated operating income was $24.3M, a decrease of 15.2% compared with $28.7M in the same period a year ago, the co. added. Excluding acquisitions and the impact of foreign-currency translations, revenue fell 6.6% in the Q4 of 2009, compared with the prior-year period. "Clients are more engaged in sales discussions, and we feel better about our prospects for 2010," Joe Mansueto, CEO of MORN, said in a statement.

UTHR - United Therapeutics Corp. said that it has withdrawn its marketing authorization application for Tyvaso nebuliser solution for the treatment of pulmonary arterial hypertension in the E.U. The co. said it withdrew the application after being told that the Committee for Medicinal Products for Human Use had a major objection to the application. It said the objection noted that findings of non-compliance with good clinical practices at two clinical sites would preclude a recommendation for approval. The co. said there were no major objections related to safety or efficacy of the treatment and that its revenue growth targets are unaffected by the withdrawal.

IEP + Icahn Enterprises said it has bought Fontainebleau's Las Vegas property for $150M, calling it a distressed asset of "considerable" value. The Fontainebleau property includes an unfinished building of about 7M square feet situated on 25 acres of land.

Treasury Dept. +/- The Treasury Department announced that it intended to dispose of warrants to purchase the common stock in four banks: Bank of America Corp. BAC, Washington Federal Inc. WFBS, Texas Capital Bankshares Inc. TCBI and Signature Bank SBNY. Treasury said it would sell the warrants in modified Dutch auctions over the next month. Treasury received the warrants in return for its investment in the banks under the Troubled Asset Relief Program. Each of these banks has fully repaid the government. Treasury said it expects to conduct similar auctions in the future for other warrant positions it still holds in banks that have repaid the government.

AGP +/- Amerigroup Corporation said that its 4Q net income rose to $40.2M, or $.79 a/s, from $35.9M, or $.67 a/s, a yr ago. Analysts had been expecting EPS of $.30, according to FactSet. Revenue rose to $1.36B, from $1.15B a yr ago. Membership at the end of 2009 was approximately 1.8M, up 13.2% in the yr. "While total membership exceeded expectations during the year, primarily due to swelling Medicaid eligibility in most states, premium rates were suppressed due to unprecedented state budget deficits," said CEO James Carlson. The co. said that it won't resume guidance until it has clarity on medical cost trends and insight on state premium rate actions.

FSLR + First Solar Inc. reported its Q4 net income rose to $141.6M or $1.65 p/s, from $132.8M or $1.61 p/s, in the same period last year. Revenue increased to $641.3M from $433.7M. In 2010, FSLR expects earnings in the range of $6.05 to $6.85 p/s while revenue is projected to come in at $2.7B to $2.9B. Wall Street is forecasting the co. to earn $6.50 p/s on revenue of $2.73B. Total capital spending is estimated at $500M to $550M for the year.

NSRGY - Swiss food group Nestle said that its fiscal-yr net income declined to 10.4B Swiss francs ($9.6B), from 18.0B francs recorded for the same period a yr ago. Sales fell to 107.6B francs, from 109.9B francs last year. "With organic growth of 4.1% achieved in last yr's challenging environment, we were able to grow substantially faster than our industry," said CEO Paul Bulcke. Nestle will pay a 1.60 franc p/s dividend, up 14.3% from last year. It will also start a new share buyback program and intends to buy back 10B francs of shares.

INTU + Intuit Inc. said its fiscal Q2 net income rose to $114M or $.35 p/s, from $85M or $.26 p/s in the same period a year earlier. Revenue rose 8% to $837M. Excluding special items, INTU said earnings were $.38 p/s. Analysts polled by TR had expected INTU to post earnings excluding items of $.32 p/s and $813.6M in revenue. INTU also raised its full-year revenue and profit guidance.

Dow Jones News Service

SEM + Select Medical Holdings Corp. reported Q4 earnings of $29.9M or $.19 p/s, compared with $8.81M or $.04 p/s, a year earlier. Excluding IPO-related and other items, earning rose to $.20 p/s from $.03. Net operating revenue rose 4.8% to $573.5M. Analysts polled by TR were expecting earnings of $.13 p/s on revenue of $579.6M.

Bloomberg.com

The Dollar + The dollar climbed to a 9-month high against the euro after the Fed raised the discount rate charged to banks for direct loans for the first time in more than 3yrs. The dollar headed for a sixth week of gains against the 16-nation euro as the central bank took another step to withdraw from the unprecedented measures it used to combat the financial crisis. The Australian and New Zealand currencies fell for a third day on concern higher U.S. borrowing costs will weaken the yield advantage of those nations’ assets.

http://www.bloomberg.com/apps/news?pid=20601083&sid=afVgqQUN7Xgc#

Treasuries +/- U.S. Treasury 10yr note yields were near the highest in 5 weeks after the Fed unexpectedly raised its discount rate yesterday for the first time in 3yrs. The Fed lifted the rate charged to banks for direct loans from 0.5 percent to 0.75 percent, spurring concern the central bank plans more moves to tighten monetary policy and unwind emergency stimulus. The difference in yield between 2- and 10-yr notes narrowed from a record spread as traders speculated an interest-rate increase this year can’t be ruled out.

http://www.bloomberg.com/apps/news?pid=20601009&sid=awyT61c7hOts#

The Markets +/- Asian and European shares, U.S. stock futures and oil dropped and the dollar gained as the Federal Reserve unexpectedly raised its discount rate, spurring concern the recovery will slow as stimulus programs are unwound. The MSCI Asia Pacific Index dived 2.2% to 115.24 as of 5:40 p.m. in Tokyo, with banks and commodity stocks leading the drop. The dollar touched a 9-month high against the euro and the strongest in five weeks vs. the yen. Oil fell for the 1st time in 4 days. S&P 500 index futures expiring in March slid 0.9%. The DJ Stoxx 600 skidded 0.5% to 247.80 at 8:43 a.m. in London.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXBAGA58ou24&pos=2#

Bloomberg

NVS + Novartis AG’s Tasigna leukemia drug was granted a priority review by U.S. regulators for the treatment of newly diagnosed patients showing initial signs of chronic disease after tests showed an advantage over the Swiss co.’s Glivec.

Semiconductor Equipment Mfg. + North-America based manufacturers of semiconductor equipment posted $1.13B in orders in Jan. 2010 and a book-to-bill ratio of 1.20. The bookings figure is up 24.1% from the final Dec. 2009 level and 308.5% higher than the orders posted in Jan. 2009.

BARRON's

GNTX - Despite the struggles of the U.S. auto industry, rearview-mirror supplier Gentex has climbed to near a 2yr high. Now the co.'s founder and CEO is leaving some shares behind, having sold $6.8M's worth in recent days. Fred Bauer sold 362,500 GNTX shares at an average price of $18.76 each on Feb. 11 and 12. After the sales, he held 5.6M shares directly and through exercisable options, a 4.1% stake in the co., down from about 6M shares, a 4.3% stake.

http://online.barrons.com/article/SB126645091849247467.html?mod=BOLFeed

WMT +/- The co.'s 4Q results sent Wall Street snoozing. However, if you open your eyes you'll see that good things are likely in store for Wal-Mart. Shares of Walmart stores helped limit the damage to many investment portfolios during the darkest days of 2008 as both consumers and investors were attracted to the retail giant's low-cost strategy. With consumers finally showing a willingness to increase their spending, investors may be tempted to rotate out of Wal-Mart stock. Indeed, today's sales report from the co. could be used to support that thesis. But investors should stay the course. Unemployment remains near 10%, and bargains never go out of style. This morning WMT posted fiscal 4Q earnings of $1.17. The figure, adjusted for tax benefits and restructuring, beat Wall Street's expectation of $1.12. Nonetheless, shares are down 1.5% to $53.25 thanks to disappointing comparable-store sales results and fiscal 2011 earnings guidance that was lower than many analysts had hoped.

http://online.barrons.com/article/SB126645073627447383.html?mod=BOLFeed

CCJ + The stock's fortunes should rise along with uranium prices and the likelihood for additional nuclear power plants here and abroad. The co. is the world's largest miner of uranium and commands the lion's share of sales. Punished by investors for missteps in the last few years, the stock could rebound as uranium prices gain ground and supplies tighten.

http://online.barrons.com/article/SB126645121170547391.html?mod=BOLFeed

AFX News

China +/- Despite a sharp reduction in its official stash of U.S. Treasuries, China is far from bailing on the world's safest and deepest market, analysts say. Indeed, China may be adding to its vast hoard through secret purchases made through foreign banks

. Such transactions do not show up in the U.S. data. Such anonymous deals through intermediaries are common in the bond world, but they make it difficult to accurately assess whether a government is changing its core strategy, analysts say.

http://www.theglobeandmail.com/report-on-business/china-finds-new-ways-to-buy-us-debt/article1473812/