Risk appetite dominated the session after Alcoa (AA: 10.90 -0.10 -0.91%)(+1.2%) reported consensus beating numbers after the market close on Monday and set, what many hope to be a solid earnings season. The upward trend in equity indices carried on right through to the close, with financials and basic material stocks as the leading gainers. However, NASDAQ 100 index underperformed, weighed on by Apple (AAPL: 252.95 +1.152 +0.46%) (-2.13%) following rumours of iPhone 4G recall. As such, Apple lagged the index but pared back some of the initial decline after the likes of Morgan Stanley (MS: 25.28 -0.38 -1.48%), Citigroup (C: 4.20 -0.10 -2.33%) and Piper Jaffray said that recall is highly unlikely. Finally, at the closing bell DJIA closed up 1.43% at 10362, S&P 500 closed up 1.53% at 1095 and NASDAQ 100 closed up 1.32% at 1845.
UKMoody’s said that UK mortgage lenders will continue to face challenges beyond 2010. (Sources) The landscape for UK mortgage lenders will continue to be very fluid, Moody’s Investor Services said in a new special comment about this sector. This will be against a backdrop of continued uncertainty over the direction of house prices, interest rates and unemployment as well as tougher regulatory capital and liquidity requirements.
BP (BP: 36.1713 -0.7087 -1.92%) - Co. says will retain “multi-year” exclusive rights to store crude at Cushing, Oklahoma, after storage tank sale - Magellan. Elsewhere, co. says installation has gone ‘incredibly well’, says vice-president, but is ‘just one step in a multistep process’. In other news, a co. executive says pressure test of new cap on Gulf oil leak a ‘couple of hours’ away. (RTRS/Guardian) - Co. delayed a critical test to determine how to determine how to proceed with a cap on its blown-out oil well. Co. is postponing the test to establish whether the well can withstand the pressure caused by closing the cap on top of the ruptured wellhead. (RTRS)
- Democratic Senators in the US are calling for an investigation into the co’s business interests in Libya, accusing the co. of being part of a deal to free a convicted terrorist in return for oil licenses. (FT)
Shell (RDS-A: 55.26 +0.36 +0.66%) - Arrow Energy shareholders approved a USD 3.05bln takeover by co. and PetroChina, clearing the way for a final legal go-ahead due later this week. (RTRS)
Vodafone (VOD: 22.31 -0.01 -0.04%) - Co. is expected to dispose of its stake in French mobile-telecoms group SFR before December, according to analysts at MF Global. (FT)
Rio Tinto (RTP: 47.40 -0.15 -0.32%) - Co. sees 2010 iron ore output at 234mln tonnes, and says 2010 continued to shape up well. Co. also says that overall long-term demand outlook positive. (RTRS) In other news, co. has approved USD 200mln in funding towards a 50% expansion of its iron ore operations in Western Australia. (RTRS)
Man Group - Shares in co. rose yesterday amid talk of a potential GBP 5.5bln takeover offer for the UK-listed fund manager from Bank of New York Mellon. (Daily Mail)
BSkyB - Co. is in talks with a private Abu Dhabi investor to launch a round-the-clock Arabic news service based in the UAE capital. (RTRS)
Tesco - Co. South Korean unit did not buy Kim’s Club Mart due to a disagreement over price. (Maeil Business Newspaper)
ICAP - Co. says Q1 group profit grew 5% and has good start to the year. (Sources)
Fresnillo - Co. said it is well on track to achieve full year 2010 production targets. (RTRS)
NXT - Co. announce today the appointment of Lames Lewis as CEO with effect from August 1st 2010. Co. says second half of the year was improvement on H1, however a lack of licensing commitments constrained growth. Co.’s total revenue for the year is significantly down on last year. (RTRS)
LSE - Co. says it has revenue of GBP 158.2mln, up 1% on Q1 last year. It also says that market conditions remained variable in the first quarter. (RTRS)
USSmall US banks that took money from the Troubled Asset Relief Programme may struggle under the weight of their repayment obligations, according to a watchgroup led by Elizabeth Warren. (Sources)
Intel (INTC: 21.495 +0.485 +2.31%) - Q2 EPS non-gaap USD 0.51 vs. Exp. USD 0.43, Q2 revenue USD 10.77bln vs. Exp. USD 10.25bln. Co. says Q2 best quarter ever and reports better Q3 guidance than consensus. Says sees Q3 revenue USD 11.2-12bln vs. Exp. USD 10.91bln, Q3 gross margin 67%, plus or minus couple of percentage points and sees Q3 R&D plus MG&A spending about USD 3.2bln. Also says sees 2010 gross margin 66%, plus or minus couple of percentage points, had seen 2010 gross margin at 64%, boosts view for year capital spending and sees leading-edge technology demand up for foreseeable future. (RTRS) Co.’s shares were up 6.5% in after-market trade.
YUM! Brands (YUM: 40.77 -0.73 -1.76%) - Q2 adjusted EPS USD 0.58 vs. Exp. USD 0.54, Q2 revenue USD 2.57bln vs. Exp. USD 2.54bln. Co. boosts forecast and says sees FY 2010 EPS growth of 12% from USD 2.39 to USD 2.43 vs. Exp. USD 2.48. Says Q2 US comp sales unchanged vs. Exp. -1% and Q2 China comp sales +4% vs. Exp. +4.5%. Elsewhere says continues to expect to open about 1,400 international units this year and expects to complete US re-franchising efforts during 2011. (RTRS)
US Banks - Fox Business’ Gasparino says US Treasury’s Feinberg is ‘leaning towards’ asking banks to give back some 2008 bonuses. (Sources)
AIG (AIG: 37.37 -0.62 -1.63%) - Co. said to be in talks with US treasury to give stakes in Maiden Lane to repay debt, co. paid USD 6bln to help fund Maiden Lanes. Maiden Lanes hold MBS and CDOs formerly owned and backed by co. (Sources)
EuropeSanofi-Aventis (SNY: 31.17 +0.19 +0.61%) - US FDA says adds boxed warning on risk of severe liver injury with co.’s arthritis drug Arava. (RTRS)
AXA - The Industrial & Commercial Bank of China is planning to buy a 70% stake in the Insurance joint venture between Co. and China Minmetals Corp. (Shanghai Securities News)
ArcelorMittal (MT: 30.07 -0.23 -0.76%) - Co.’s Polish unit believes 2010 will be a better year for the Co. than 2009.
Renault - Co. South Korean unit is recalling 59,000 vehicles produced in 2009, following problems with the engine steam outlet. (Yonhap)
The new head of the European Financial Stability Fund, Klaus Regling said yesterday that the Eurozone’s EUR 440bln sovereign rescue fund will be operational by the end of the month and expects to be awarded a coveted triple A credit rating in August. (FT) In addition, Belgium’s finance minister yesterday provided some further details on the release of the banking stress tests. On 23rd July consolidated results for the 91 banks at a group level will be released, followed by 2 weeks later, deconsolidated results which could cover their subsidiaries if the banks or national regulators want to publish their figures. (FT)
Nokia (NOK: 8.509 -0.051 -0.60%) - Nokia Siemens Networks is in talks to buy the telecom-equipment arm of Motorola (NYSE:MOT), according to people familiar with the matter. A deal could be worth USD 1.1bln to USD 1.3bln and could be reached in the next few weeks. (WSJ)
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