Evening Headlines
Bloomberg:
- Radiation Danger Rises as Japan Nuclear Plant Crisis Worsens. Japan’s Prime Minister said the danger of further radiation leaks from a crippled nuclear power station is rising after three explosions and a fire at the site 135 miles north of Tokyo. Naoto Kan appealed for calm in a televised address, saying his government was doing its utmost to contain the radioactive leakage at Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant following last week’s earthquake and tsunami. Blasts have occurred at three of the station’s six reactors since March 12 and a fire was discovered in a fourth unit’s building today. Citizens living within a 30-kilometer (19 miles) radius of the plant should stay indoors, Kan said.
- Japanese Stocks Head for Record Two-Day Loss as Radiation Risk Increases. Japan’s shares tumbled, with the Topix index suffering its worst two day decline since records began in 1949, as concern grew about the safety of nuclear plants damaged by the country’s worst earthquake on record. Tokyo Electric Power Co., Asia’s biggest power generator, was set to retreat by the daily limit of 25 percent after the company confirmed an explosion at a third reactor and a fire at a fourth today at its nuclear plant in Fukushima, north of Tokyo. Hitachi Ltd., which provides nuclear power generation systems, plunged by the daily limit of 19 percent. Sony Corp., Japan’s biggest exporter of consumer electronics, declined 13 percent after the company yesterday said it halted production at some factories. The Nikkei 225 Stock Average fell 14 percent to 8,313.73 as of 1:02 p.m. in Tokyo, the lowest since April 2009 and its worst two-day decline since at least 1970, according to data compiled by Bloomberg. The broader Topix index declined 13 percent to 735.72, set for the lowest close since March 2009 and its biggest intraday decline since October 1987.
- US Treasuries Jump in 'Violent' Rally as Kan Warns of Further Radiation Leaks. Treasuries surged to become the world’s best-performing bonds over the past week after Japanese Prime Minister Naoto Kan said the danger of further leaks from a damaged nuclear power station is increasing. “The market is moving aggressively,” said Colin Embree, Singapore-based head of fixed-income trading and sales at Bank of Nova Scotia Asia Ltd., a unit of Canada’s third-largest lender. “This isn’t a flight to quality. It’s a flight from disaster. The moves tend to be quite violent.”
- Saudi Arabia, GCC Troops Enter Bahrain as Protests Threaten Gulf. Saudi Arabian troops moved into Bahrain yesterday as part of a regional force from the Gulf Cooperation Council, the first outside intervention since a wave of popular uprisings swept through parts of the Arab world. Security forces from the United Arab Emirates will also take part, the state-run Emirates News Agency said yesterday. The UAE contingent is part of the GCC’s Joint Peninsula Shield, a military coalition established to protect the six member states from outside attack. More than 100 military vehicles have crossed into Bahrain, al-Jazeera television reported. The deployment signals that the Bahraini regime has lost confidence it can deal with the protests and underscores Saudi Arabian concerns about uprisings at home, according to Christopher Davidson, a scholar in Middle East politics at Durham University and author of “Power and Politics in the Gulf Monarchies,” “Clearly, this is not an UAE force, this is a Saudi force with a few UAE policemen,” Davidson said in a telephone interview late yesterday. “It is in Saudi’s interest that nothing serious happens in Bahrain, because it would embolden similar protests in its eastern provinces.”
- Qaddafi's Advance Puts Forces 100 Miles From Rebel's Capital. Muammar Qaddafi’s warplanes attacked rebels in the town of Ajdabiya, as opposition officials asked Secretary of State Hillary Clinton for airstrikes on Qaddafi’s airfields and military equipment. Ajdabiya, about 100 miles (160 kilometers) from Benghazi, the rebel capital, came under bombardment yesterday as insurgents prepared to defend it, a resident said. Rebel troops fled Brega, an oil port to the southwest, though fighting continued around the town, the Associated Press reported. Libyan state television showed footage of what it said was Brega “purged of armed terrorist gangs.”
- Shipping Rates Poised to Decline 34% After Two-Week Rally: Freight Markets. The rebound that more than doubled commodity freight costs in two weeks is peaking as idled ships haul anchor and compete for cargoes of iron ore and coal. There were 282 capesizes anchored worldwide March 14, down from 300 Feb. 26, data compiled by Bloomberg show. The glut will mean second-quarter costs of $10,000 a day, 34 percent less than prices in the forwards market, said Sverre Bjorn Svenning, the analyst at Fearnley Consultants A/S who correctly predicted the industry’s crash in 2008. Forward freight agreements, traded by brokers and used to hedge or bet on future shipping rates, were at $15,175 by 6:50 p.m. in London yesterday.
- Commodity futures require tighter trading rules to curb speculation and check gains in food prices that have reached all-time highs, the head of the UN's Food and Agriculture Organization said. While natural disasters have driven up food prices, "speculation is exacerbating price volatility by giving the impression that there is additional demand when there is no additional demand," FAO Dirctor General Jacques Diouf said. "We should return to the regulation that existed before 1999" in U.S. commodities markets, Diouf said.
- HP(HPQ) to Start Cloud Service, App Stores; Raises Dividend. Hewlett-Packard Co. (HPQ) plans to introduce a cloud-computing service and will increase its quarterly dividend, early efforts by Chief Executive Officer Leo Apotheker to boost sales and reverse a share-price decline. HP will also put its WebOS mobile-operating system onto a broader range of devices for consumers and businesses, in a bid to make the company’s various products work better together, Apotheker said today at an event in San Francisco.
- Texas Instruments(TXN) Says Japan Plant Damage to Hurt Sales. Texas Instruments Inc. (TXN), the second- largest U.S. chipmaker, said “substantial” damage to one of its plants in Japan from last week’s earthquake will hurt sales in the first and second quarters. The plant in Miho, Japan, produced about 10 percent of Texas Instruments’ output by revenue and won’t be able to return to full shipment capacity until September, the Dallas-based company said in a statement today. The company is working to shift production to its other facilities and has identified alternatives for about 60 percent of that lost production.
- Microsoft(MSFT) Said to Stop Releasing Zune as Demands Ebbs. Microsoft Corp. (MSFT) will stop introducing new versions of the Zune music and video player because of tepid demand, letting the company shift its focus to other devices, according to a person familiar with the decision.
- The Markit iTraxx Japan Index jumped 35 basis points to 145.5 basis points, set for its biggest one-day increase since Feb. 17,2009, according to prices from Deutsche Bank AG and CMA in NY. Contracts to protect Japanese government debt for five years climbed 5 basis points to 100.5, Deutsche Bank prices show. That's the highest since March 2009.
- Nuclear Risk Rising in Japan. Crisis Spreads to Third Reactor as Operators Struggle to Prevent Large-Scale Radiation Leaks; New Explosion Reported. Japan's nuclear crisis showed signs of spinning out of control Tuesday, after officials reported a third explosion and warned of possible damage to a critical part of the cooling system at the troubled Fukushima Daiichi nuclear-power complex. Tuesday's explosion at the No. 2 reactor in the Fukushima complex, 150 miles north of Tokyo, for the first time raised the possibility that the key containment structure of the unit, which protects the reactor vessel and keeps dangerous radioactive materials from leaking out, had been damaged. The telltale sign, Tokyo Electric Power Co. officials said, was that pressure had dropped in the "suppression pool"—the part of the reactor that converts steam to water at the bottom of the container. Meanwhile, radiation levels outside the reactor building rose sharply. Tepco evacuated some of the workers from the unit as a precaution. Prime Minister Naoto Kan gave a brief address to the nation saying, "We will do our utmost to prevent further spreading of radiation leaks. I sincerely urge everyone in the nation to act calmly."
- Hedge Funds Had Bets Against Japan. Even Before the Disaster, Big Investors Were Wagering on Economic Problems.
- Nasdaq Nears Competing Bid for NYSE. Nasdaq Stock Market owner Nasdaq OMX Group Inc., in the latest salvo in the global exchange consolidation race, moved closer to making a competing bid for the New York Stock Exchange.
- Euro-Zone Ministers Stall on Bailout Details. Euro-zone finance ministers reached no agreement Monday on precisely how the bloc's 17 members will share the burden of enlarging bailout funds, and put off discussions until next week. But despite the unresolved details, markets reacted warmly to Saturday morning's announcement of a pact to expand the euro zone's current bailout capacity. In trading Monday, the prices of Spanish, Portuguese and Greek bonds jumped, bringing down their interest rates and reflecting improved investor confidence.
- More Mortgage Mischief. Elizabeth Warren revs up her Consumer Financial Protection Bureau.
- Top Hedgies Scaling Back on Stock Exposure. He says all the uncertainty introduced by the tragic events in Japan is a key factor influencing their decision. But it's not the only factor. There are two others. Another is the sharp increase in the price of oil “A 10-dollar increase per barrel in oil is something like a 3/10 of a percent move lower in GDP,” he says. Also Scaramucci says the smart money is worried about a slowdown in Europe.
- Greenberg: Another Chinese Stock Blow-Up. It’s getting hard to keep the Chinese reverse mergers straight, let alone those that are the focus of alleged accounting problems.
- GE(GE) Shares Drop on Japanese Nuclear Fears. Shares of General Electric Co. fell as much as 4.5% Monday on fears that a nuclear emergency in Japan could leave the global conglomerate vulnerable to liability.
Zero Hedge:
IBD:
Forbes:
Consumer Reports:
- First Look: Apple(AAPL) iPad 2. (video)
- President Obama Staying in Background on Deficits. When President Barack Obama opened the first meeting of his fiscal commission last April, he promised to be “standing with them” as they produced recommendations for curbing the nation’s escalating debt. Republicans and Democrats say they are still waiting.
Financial Times:
- Super-Catastrophe and Super-Banking Risk. We thought we’d present the Australian hedge fund manager’s latest thoughts on the financial fallout (no pun intended) from Japan’s devastating earthquake:
- Much of the unrest in north Africa is motivated by a desire for a better standard of life, and not in pursuit of democracy, Mohamed Ali Alabbar, chairman of Emaar Properties PJSC, said in an interview.
- The levels of radiation detected in Tokyo aren't high enough to affect health. The levels are about 20 times normal, or .809 microsieverts, citing city officials.
- Radiation levels in Saitama, north of Tokyo, rose to 1,222 nanosieverts, or almost 40 times normal levels as of 11 a.m. local time, citing the prefectural government.
- About 140,000 people within a radius of 20 to 30 kilometers from Tokyo Electric Power Co.'s Fukushima Dai-Ichi nuclear power plant were newly ordered to stay indoors, citing the prefectural government.
- Live news broadcast in English.
- Radiation levels exceeded the legal limit in Tokai-mura, in Japan's eastern Ibaraki prefecture. The location is 110 kilometers south of Tokyo Electric Power Co.'s Fukushima Daiichi nuclear power plant.
- Some Chinese banks may face "relatively large" pressure from a loan-loss reserve ratio rule based on tests by China's banking regulator, citing Yan Qingmin, an assistant chairman with the China Banking Regulatory Commission.
Citigroup:
- Rated (HBI) Buy, target $33.
- Rated (MFB) Buy, target $33.
- Asian equity indices are -4.0% to -1.5% on average.
- Asia Ex-Japan Investment Grade CDS Index 116.0 +4.5 basis points.
- Asia Pacific Sovereign CDS Index 119.0 unch.
- S&P 500 futures -2.46%.
- NASDAQ 100 futures -2.36%.
Earnings of Note
Company/Estimate
- (BWS)/.15
- (FSS)/.08
- (WSM)/.98
- (DSW)/.47
- (RUE)/.43
- (FDS)/.87s
8:30 am EST
- Empire Manufacturing for March is estimated to rise to 16.1 versus a reading of 15.43 in February.
- The Import Price Index for February is estimated to rise +.9% versus a +1.5% gain in January.
- Net Long-term TIC Flows for January are estimated to fall to $55.0B versus $65.9B in December.
- The NAHB Housing Market Index for March is estimated to rise to 17.0 versus 16.0 in February.
- The FOMC is expected to leave the benchmark fed funds rate at .25%.
- (LEA) 2-for-1
- The weekly retail sales reports, William Blair Tech Symposium, Barclays Healthcare Conference, (IFF) investor day, (KKR) investor day, (PETD) analyst day and the (SIGM) investors day could also impact trading today.
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