Today's Headlines

Bloomberg:

• Mubarak Hands Power to Egypt's Military. Hosni Mubarak stepped down as president of Egypt and handed power to the military, bowing to the demands of protesters who have occupied central Cairo for the past 18 days demanding an end to his 30-year rule. “Mubarak has decided to relinquish the office of the presidency,” said Vice President Omar Suleiman in a statement on state television late today. “He has instructed the Supreme Council of the armed forces to take over the affairs of the country.”
• Egypt ETFs Surge, Credit Default Swaps Fall as Mubarak Resigns. Egypt’s default risk fell and shares rallied as Hosni Mubarak stepped down as the country’s president and handed power to the military, bowing to the demands of protesters. The cost of insuring Egyptian government debt fell 25 basis points to 312, according to CMA prices for credit-default swaps, tumbling from as high as 379 basis points earlier today. The Market Vectors Egypt Index ETF, an exchange-traded fund that holds Egyptian shares, gained 6.7 percent in New York, the most since Jan. 31. Egypt’s 5.75 percent dollar bond due 2020 rebounded, cutting the yield by 13 basis points at 6.37 percent, data compiled by Bloomberg as of 5:06 p.m. in London show. “It should be positive for Egyptian assets but that said there is still a lot of uncertainty about who will take over and how things will pan out over the coming months,” said Nigel Rendell, emerging-market strategist at RBC Capital in London. Market gains are “a knee-jerk reaction to the fact that Mubarak has stepped down without further military action or further deaths,” he said.
• Oil Declines to 10-Week Low After Mubarak Hands Power to Egypt's Military. Oil fell to a 10-week low in New York after Egyptian President Hosni Mubarak stepped down and handed power to the military, reducing concern that crude shipments from the Middle East will be disrupted. Oil dropped as much as 1.9 percent after Vice President Omar Suleiman made the announcement on state television today. Crude for March delivery declined $1.36, or 1.6 percent, to $85.37 a barrel at 12:30 p.m. on the New York Mercantile Exchange. Oil touched $85.10, the lowest intraday price since Dec. 1. Futures are down 4.1 percent this week and are 13 percent higher than a year ago.
• Consumer Sentiment in U.S. Increases to Eight-Month High. Consumer confidence rose in February to the highest level in eight months as decreasing unemployment lifted Americans’ spirits. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for the month climbed to 75.1 from 74.2 in January, in line with the median forecast of economists surveyed by Bloomberg News. The sentiment data showed households’ perceptions of the economy and job market turned positive this month for the first time in seven years, signaling consumer spending may keep contributing to the expansion. The sentiment measure’s current conditions gauge, which reflects Americans’ perceptions of their financial situation and whether they consider it a good time to buy big-ticket items like cars, increased to 86.8, the highest since January 2008, from 81.8 the prior month. The index of consumer expectations six months from now decreased to 67.6 from 69.3. Nonetheless, Americans grew more optimistic about job prospects. The report showed the share of Americans who expected unemployment to fall over the next 12 months exceeded the share of those who projected an increase by 8 points, the first positive reading in seven years and highest level since 1984, according to economists at Credit Suisse in New York.
• Level Global Closes Firm, Returns Capital to Investors. Level Global Investors LP, one of four hedge funds raided by the FBI in November as part of a federal insider-trading probe, decided to close and return cash to clients, according to a letter sent to investors. The $4 billion firm, co-founded by David Ganek and Anthony Chiasson in 2003, said it expects to sell all of its holdings by the end of March. Ganek and Chiasson are alumni of Steven Cohen’s Stamford, Connecticut-based SAC Capital Advisors LLC. “Unfortunately the ongoing government investigation presents significant challenges to maintaining our collective focus,” Ganek said in a letter today.
• MGIC(MTG), Radian(RDN) Advance as Geithner Aims to Curtail FHA. MGIC Investment Corp. and Radian Group Inc. led mortgage insurers higher after U.S. Treasury Secretary Timothy F. Geithner called for limiting the role of government-backed competitors. MGIC, the largest private U.S. mortgage insurer, jumped 11 percent, the most in five months, to $10.16 at 11:07 a.m. in New York Stock Exchange composite trading. No. 2 Radian, based in Philadelphia, surged 13 percent, to $8.01, the biggest advance since November. “We will encourage Fannie Mae and Freddie Mac to pursue additional credit-loss protection from private insurers,” according to a report today from Geithner and Housing and Urban Development Secretary Shaun Donovan.
• Dry-Bulk Freight Rates May Rebound, Deutsche Bank Says. Rates to haul coal, iron ore and other dry-bulk commodities may be set to rebound as activity quickens after a weeklong holiday in China, Deutsche Bank AG said. The Baltic Dry Index of commodity-shipping costs gained 13 percent this week, the most since August, to 1,178 points after sliding on Feb. 4 to the lowest level since January 2009. It’s still down 34 percent this year.
• India's Industrial Production Increases at the Slowest Pace in 20 Months. India’s industrial output grew at the weakest pace in 20 months, adding to concern the economy may slow after the steepest interest-rate increases in Asia. Output at factories, utilities and mines rose 1.6 percent in December from a year earlier after a revised 3.62 percent gain in November, the government said in a statement in New Delhi today. The median estimate of 27 economists in a Bloomberg News survey was for a 2 percent increase. Concern price gains and costlier credit will damage purchasing power has spurred a 15 percent slump in the Bombay Stock Exchange’s Sensitive Index this year, the region’s worst fall. “Higher inflation and borrowing costs will have a damping effect on the demand going forward” said Ramya Suryanarayanan, an economist at DBS Group Holdings Ltd. in Singapore.
• Greece Joins Italy in Objecting to Proposed EU Debt-Reduction Benchmarks. Greece joined Italy in objecting to annual numerical debt-reduction targets in a fresh challenge to the German-led drive for tougher economic safeguards to underpin the euro. Greece, the first deficit-riddled euro country to fall back on financial aid, says the proposed rule would force it to make impossibly large cuts once its support package runs out in 2013, according to a draft of European Union legislation. “All member states except two already accepted the proposal,” said an EU briefing note obtained by Bloomberg News before next week’s debate among finance ministers. “Italy and Greece have a reserve on the numerical benchmark.” Greece or Italy alone could veto the rule, undercutting the tougher enforcement demanded by Germany as a condition for beefing up the 750 billion-euro ($1 trillion) rescue fund for distressed states.
• Weber to Leave Bundesbank in April, Throws ECB Race Open. Bundesbank President Axel Weber resigned, ending three days of confusion and opening the field for candidates from Finland to Italy to become the next chief of the European Central Bank. Weber, 53, “expressed the wish to resign” and will leave office on April 30 with a successor to be named during the next week, Steffen Seibert, a German government spokesman, said today after Weber met in Berlin with Chancellor Angela Merkel. Weber is leaving for “personal reasons” after deciding to step down on Feb. 8 and then being asked by Merkel to postpone the announcement, the Bundesbank said.
• ConocoPhillips(COP) Boost Dividend, Adds to Share Buyback. ConocoPhillips, the third-largest U.S. oil company, boosted its quarterly dividend and spending plan for the year while adding as much as $10 billion in share buybacks. The share repurchases are in addition to an existing $5 billion buyback program which has $1 billion remaining available, the Houston-based company said in a statement today. Shareholders of record as of Feb. 22 will receive a quarterly dividend of 66 cents per share, a 20 percent increase, payable March 1. The company also plans to spend $13.5 billion this year to drill wells, build oil platforms and repair refineries, a 21 percent increase over its 2010 capital-spending plan, according to a separate statement released today. About 90 percent of this year’s spending will be devoted to finding and developing oil and natural-gas fields.
• Nokia(NOK) Joins Forces With Microsoft(MSFT) to Challenge Apple(AAPL), Google(GOOG); Shares Fall. Nokia Oyj, the world’s biggest maker of mobile phones, said it’s forming a software partnership with Microsoft Corp., betting that together the two companies can challenge Google Inc. and Apple Inc. Nokia fell 14 percent, the biggest drop in seven months, after its plan to make Microsoft’s Windows its primary software was seen as a sign of the extent of its troubles in taking on Apple’s iOS and Google’s Android platforms.

Wall Street Journal:

• Egyptians Celebrate Mubarak's Resignation. Egyptian President Hosni Mubarak succumbed to the demands of hundreds of thousands of his compatriots Friday and resigned from office, bringing to an end three decades of autocratic rule. The announcement was delivered by Vice President Omar Suleiman in a brief statement on state television. Mr. Mubarak delegated control of the country's affairs to Egypt's army, Mr. Suleiman said. "Because of the current circumstances in the country the president, Hosni Mubarak, has decided to step down, and the higher command of the army is taking control of the country," he said. The streets around central Cairo's Tahrir Square erupted in jubilation.
• Egypt Live Updates.
• Fannie, Freddie Phaseout Proposed. The Obama administration unveiled a proposal Friday for winding down mortgage giants Fannie Mae and Freddie Mac, spelling out three options for what could take their place and setting the stage for a debate over the nation's $10.6 trillion mortgage market. The steps, outlined in a "white paper," are likely to mean higher borrowing costs and more-limited access to home loans for consumers. Treasury Secretary Timothy Geithner said establishing a new system could take five to seven years. "This is a plan for fundamental reform of the housing market," Mr. Geithner said, cautioning that "we're going to proceed on this path of reform very carefully."

Business Insider:

• Ahmadinejad Leads A Gigantic Pro-Egypt, Anti-American Rally. It's the 32nd anniversary of the Iranian revolution. Massive crowds in Tehran are calling for Egypt and other Islamic nations in protest to follow their path, according to the AFP. Ahmadinejad said in a speech: "We will soon see a new Middle East materialising without America and the Zionist regime and there will be no room for world arrogance in it." He told America to stop propping up Israel: "Come and take away the Zionist regime which is the source of all crimes... take it away and liberate the region. Free the region and give it to the people and take this regime, which is the child of Satan, out."
• Goldman(GS) Was Pleased About The Quant Liquidity Crunch.
  

Zero Hedge:

• Jordan Islamists Say Mubarak's Fate "Should Be A Lesson To All Arab Regimes" As Switzerland Freezes Former President's Assets. Barely an hour has passed since Mubarak's departure, and the religious tensions in the middle east are already starting to flare up. First up: the Jordan Muslim Brotherhood has immediately taken advantage of a vacated podium and said that what happened in Egypt should be a lesson to all Arabs. While hopefully nobody will be able to hijack the success of the Egyptian people, one wonders just how heavily the various Middle Eastern regime are sweating tonight...
• Meet Egypt's New (Interim) Ruler: Field Marshal Mohamed Hussein Tantawi.
  

Washington Post:

• Iranian Opposition Leader Mehdi Karroubi Placed Under House Arrest. One of Iran's most prominent opposition leaders was placed under house arrest Thursday, with security agents posted at the entrance saying they would stay there until a possible anti-government protest has passed, the cleric's Web site reported. "Only his wife is being allowed into the house," Sahamnews.org said. "This probably has to do with the protest scheduled for Monday, Feb. 14." But the measure also appeared intended to prevent Mehdi Karroubi, a former head of parliament who has become highly critical of Iran's leaders, from participating in a state-backed rally Friday to celebrate the 32nd anniversary of the country's Islamic revolution.

Pittsburgh Business Times:

• Steel Prices Rise as Demand to Increase. Reports of an expected 10 percent increase in steel demand in the United States this year sent some steel company stocks higher Thursday, the same day AK Steel(AKS) announced a price increase.

MIT:

• USA Daily Online Price Index. (graphs)

Reuters:

• Micron(MU) Upbeat on DRAM, NAND Memory Prices. Micron Technology, the top U.S. maker of memory chips for computers, sees favorable trends in pricing as small players are forced out of the market and as mobile gadgets help drive demand.
• Developed Markets Best Emerging in Fund Flows - EPFR. Investors hunting for higher returns on their cash put a record net $1.4 billion extra into high yield bond funds for the week ended Feb. 9, while the rotation into developed market stocks continued, data from EPFR Global showed on Friday. All equity funds tracked by the Cambridge, Massachusetts-based firm showed net inflows of $2.8 billion while all bond funds combined had net outflows of $186 million. In the equity space, funds focused on the United States, Europe, Global and Japan took in a net $6 billion or so. However there was a net $3 billion pulled out of emerging market equities as well as $351 million from Pacific equity funds.
• US Weekly Leading Economic Growth Gauge Climbs to 39-Week High - ECRI.
  

Basler Zeitung:

• Europe may face renewed financial turmoil in 2011, UBS AG Chief Economist Andreas Hoefert said.

Berlingske Tidende:

• A majority of Danes would vote against joining Europe's single currency bloc if a referendum were held tomorrow, citing a Gallup Denmark poll. 50% of respondents said they would reject euro adoption, compared with 41% in favor of the currency switch, the poll showed.

DigiTimes:

• Samsung, Apple(AAPL) to See Notebook Shipments Remain Strong in 1Q11. Samsung has been performing better than other brands by taking up deliveries from the suppliers, the sources noted, adding that Apple reportedly is revising upward its orders with the volume of some hot-selling models being doubled. Affected by Intel's defective chips, Hewlett-Packard(HPQ) may ship 10 million notebooks in the first quarter of 2011 compared to 11.13 million shipped in the previous quarter, said the sources.