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Bloomberg:
- Stanley Works(SWK) agreed to buy Black & Decker Corp.(BDK) for about $3.5 billion, combining the two largest U.S. toolmakers in an all-stock transaction that would reduce costs by $350 million annually. Based on Stanley’s closing stock price, the offer values Towson, Maryland-based Black & Decker at $57.57 a share, or 22 percent above where it closed today. Fewer than 4,000 jobs, or less than 10 percent of total positions at the combined company, will be cut, Stanley Chairman and Chief Executive Officer John Lundgren, said in a telephone interview.
- Facing criticism from Arab leaders, Secretary of State Hillary Clinton tempered praise of
- The International Monetary Fund said it is selling 200 metric tons of gold to the Reserve Bank of India for about $6.7 billion, its first sale of the precious metal in nine years. The sale accounts for almost half the 403.3 tons that the Washington-based lender in September agreed to sell as part of a plan to shore up its finances and lend at reduced rates to low- income countries.
- The Conservative Party candidate running for an open congressional seat in New York pulled 5 percentage points ahead of the Democrat after the Republican nominee dropped out of the race, a poll released today showed. Conservative Doug Hoffman led Democrat Bill Owens, 41 percent to 36 percent, with 18 percent undecided, according to the
- Steel production in
Wall Street Journal:
- For decades, a rule of thumb in Washington has said that there should be popular support and a bipartisan majority before approving an initiative that significantly affects tens of millions of Americans. Health-care reform—ObamaCare—has neither, yet Democrats want to impose it anyway. If they succeed, the consequences could be devastating for the country and probably for the president and his party. The reasoning behind the rule is simple. Forcing drastic change on an unwilling public is likely to cause national disunity, stir angry protests, increase political polarization, and deepen distrust of
- Mr. Karzai's election should put to rest the doubts about his "legitimacy" heard in America's liberal media and in whispers from the Administration, even if it won't. He won that legitimacy by agreeing to a second round, once the official electoral commission invalidated enough of his votes to deprive him of a majority, in accordance with Afghan law.
- Pleading with Iran will get the West nowhere.
CNBC.com:
- An interesting report today from the Mortgage Bankers Association shows business may be better than we think for their people.
Business Week:
- One of the most anticipated books of the global financial meltdown just got a bit of public relations problem. The book, The Greatest Trade Ever, written by Wall Street Journal writer Gregory Zuckerman, due to hit bookshelves tomorrow, details the story of hedge fund operator John Paulson’s now legendary trade against the housing market and how he made billions in the process betting against subprime mortgages. Although the book is based on extensive interviews with Paulson, Paulson is releasing a statement that disses the book, calling it a disappointment. The statement goes on: “It contains numerous inaccuracies and fails to capture the essence of the credit bubble. The writing style is indicative of a gossip tabloid rather than respected financial journalism. Unfortunately, the opportunity to create a meaningful documentation of an important time in financial history was lost.”
CNNMoney.com:
- IT departments are finally starting to buy Apple's smartphone, says a Deutsche Bank report. "There is growing evidence that the iPhone is making inroads into the
- The bankruptcy of CIT means a $2.3 billion wipeout for Treasury. More losses are likely as other TARP recipients have missed dividend payments. CIT Group is the first big bailout loss for taxpayers, but it won't be the last.
- Stimulus may have created or saved 640,000 jobs so far, but many of those positions were never intended to last. The American Recovery and Reinvestment Act was designed to put millions of people to work, mainly for "shovel-ready" projects. By their very nature, most of those projects last only until the work is completed or the funding runs out. That means millions of workers hired with stimulus funding are left looking for a job after the stimulus-funded program is completed.
Forbes:
TechCrunch:
- There is a perception that Google’s Chrome is a rounding error when it comes to browsers. And maybe it still is, but Google is now fighting that perception in a very public way. Today, it announced that the Chrome Team won a Founder’s Award for their achievements so far, and for the first time revealed how many people are using the Chrome browser: 30 million active users.
Intrade:
- The odds of Chris Christie winning New Jersey’s race for governor are rising 16.0 to 53%. The odds of John Corzine winning are falling 16.2 to 47%.
Rasmussen:
The Business Insider:
- Commerce Secretary Gary Locke told Bloomberg TV today that a second economic stimulus is "being hotly discussed and very seriously considered within the administration as well as members of Congress." Not surprisingly, this news triggered a spasm of backtracking: Locke's spokesman now says he was being "imprecise."
- It's still early, but the results for Windows 7 are looking positive, says Kathryn Huberty of Morgan Stanley in a note released this afternoon. According to NPD, PC unit sales rose 40% year over year for the week ending October 24th, which included the first three days of Windows 7.
Reuters:
- CIT Group Inc (CIT) is looking for a quick exit from Chapter 11 protection but its long-term survival outside of bankruptcy depends in large part on what regulators will allow it to do with its various businesses. "CIT in general isn't out of the woods yet," said Jeffrey Knopman, principal of Profit Solutions Group Inc, which helps vendors deal with retailers. The bankruptcy financing gives the company a bit of a reprieve, he said, adding, "I think the jury's still out on the longer term." CIT hopes to move some of its best businesses, including vendor financing and factoring, to its bank, where it can fund them with deposits. But regulators may balk at this move.
Financial Times:
- Hedge fund launches are growing in size and number after months of subdued activity in the wake of the collapse of Lehman Brothers last year. The revival of fund start-ups is one of the clearest signs yet that the $1,400bn (£854bn) global hedge fund industry is starting to return to better times. "Where it was common to start with $300m at the height of the boom, $50m was the case earlier this year," said Patric de Gentile Williams, chief operating officer of FRM Capital Advisors, a provider of seed capital to hedge fund ventures. Chicago-based Hedge Fund Research estimates that the number of fund launches rose to 182 in the second quarter of 2009 from a low of 148 the previous quarter. The size of launches was also diminished. Data provider Eurohedge estimated that the entire volume of assets raised by all of Europe's launches in the first half was less than the single largest new fund in 2008, Brevan Howards' $2.5bn Multi-Strategy Fund.
- Signs of recovery after a torrid year reverberated around the world on Monday as manufacturers reported rising output and improved employment prospects in the US, Europe and Asia. From
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (ESRX), target $102.
- Reiterated Buy on (AOC), target $47.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 futures +.19%.
NASDAQ 100 futures +.20%.
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Company/EPS Estimate
- (MHS)/.72
- (MRO)/.58
- (ICE)/1.15
- (RDC)/.51
- (DBD)/.41
- (EMR)/.60
- (ENR)/1.16
- (ABC)/.40
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- (JOE)/-.05
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- (RL)/1.31
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- (DISCA)/.27
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- (VNO)/1.16
- (PZZA)/.26
- (LPX)/-.18
- (KCP)/.03
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- (ONXX)/.23
Economic Releases
10:00 am EST
- Factory Orders for September ate estimated to rise +.8% versus a -.8% decline in August.
Afternoon:
- Total Vehicle Sales for October are estimated to rise to 9.8M versus 9.2M in September.
Upcoming Splits
- None of Note
Other Potential Market Movers
- The weekly retail sales reports, API energy inventory data, ABC Consumer Confidence reading, Oppenheimer healthcare conference, Wedbush Morgan Clean Tech Conference, (GFI) investor day, (FFIV) analyst meeting, (FDO) analyst conference, (DD) investor meeting, (CSH) analyst day and the (PMTC) investor day could also impact trading today.
Evening Review
BNO Breaking Global News of Note
Yahoo Most Popular Biz Stories
Bloomberg:
- Manufacturing in the U.S. expanded faster than anticipated in October, easing concern the economic recovery will be cut short once government aid wanes. The Institute for Supply Management’s factory index rose to 55.7, a three-year high and exceeding every estimate of the 70 economists surveyed by Bloomberg News, data from the Tempe, Arizona-based group showed today. Other reports indicated housing kept gaining after its worst recession since the 1930s. “The economic outlook is brightening,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Manufacturing is in the driving seat at this stage of the recovery. Housing has turned the corner.”
- Ford Motor Co.(F), the only major U.S. automaker to avoid bankruptcy, posted third-quarter net income of $997 million and its first operating profit since early 2008 on smaller discounts and higher sales. On an adjusted basis, Ford reported a quarterly pretax profit of $1.1 billion, or 26 cents a share, compared with a year-earlier loss of $3 billion, or $1.32. Ford beat the 20 cents a share adjusted loss estimated by an average of 11 analysts surveyed by Bloomberg. Chief Executive Officer Alan Mulally, who kept Ford out of Chapter 11 as General Motors Co. and Chrysler Group LLC reorganized, increased market share and collected more from each sale. The Dearborn, Michigan-based automaker posted its first consecutive quarterly net profit under Mulally today and said it expects to be “solidly profitable” in 2011. “Ford is a company that’s well into a turnaround,” said Bernie McGinn, president of McGinn Investment Management of Alexandria, Virginia, which owns about 320,000 Ford shares. “They did it by themselves and didn’t take government money. That gives people a good gut feeling and they’re being rewarded for that.”
- Human Genome Sciences Inc.’s(HGSI) experimental lupus drug Benlysta worked in a higher dose to reduce symptoms in a study. The company’s shares rose the most in more than three months. Human Genome increased $6.25, or 33 percent, to $24.94 at 10 a.m. New York time in Nasdaq Stock Market composite trading, after trading as high as $26.21.
Wall Street Journal:
- The chairwoman of the National Mediation Board has sharply criticized the federal agency's proposal to change a decades-old election rule that would make it easier for airline and railway employees to unionize, exposing a sharp rift at the agency's three-person board. In a letter sent to more than a dozen Republican senators Monday, NMB Chairwoman Elizabeth Dougherty said the process by which the proposal was drafted by her two colleagues is "flawed," and she questioned whether the agency had the authority to make such a rule change. The NMB sent a proposed change to the Federal Register on Thursday that would lower the bar for unionizing at airlines and railroad companies. It is expected to be published in the Federal Register Monday or Tuesday and be subject to a 60-day comment period before it could be implemented. Organized labor has been pushing for the change, but U.S. airlines oppose it -- including Delta Air Lines Inc. and Continental Airlines Inc., which are both preparing for large unionization votes. That sets the stage for a battle that could spill into Congress or the courts.
- Blackstone Group LP's(BX) perseverance in China is paying off as it prepares to broaden its presence in the country's private-equity scene. On Friday, Blackstone Chief Executive Stephen Schwarzman launched a domestic Chinese fund-management company that is seeking to raise five billion yuan ($732 million) from local investors.
- A consortium led by Italian energy giant Eni SpA (E) Monday signed an initial 20-year agreement with Iraq to develop the giant Zubair oilfield in southern Iraq, an Iraqi oil ministry official said. Under the terms of the deal, Eni, Italy's biggest energy company by market value, and its partners Occidental Petroleum (OXY) and Korea Gas Corp. (036460.SE) of South Korea will be paid $2 for each extra barrel of oil it extracts on top of current production at the field, but will be liable for a 35% tax on its profits. Eni has said the development of the field would require investments of about $10 billion in the first six years to raise output from the field to 1.125 million barrels a day from 195,000 barrels of oil a day now. However, Iraq's Oil Minister Hussein al-Shahristani, who was present at the signing, said Monday the field, in total and along the duration of the contract, would require an investment of $20 billion.
- Amid the jobless recovery, some landlords are showering flat-screen TVs, cash, rent cuts and other incentives on tenants to encourage them to renew their apartment leases and thus avoid the expense of filling empty units. The rise in unemployment has prompted tenants to seek roommates, move home or trade down to cheaper units. In the third quarter, the national apartment-vacancy rate hit 7.8%, a 23-year high, according to Reis Inc., which tracks vacancies and rents in the top 79 markets.
- Global semiconductor sales rose 8.2% in September from the previous month, the seventh-straight month of gains, according to the Semiconductor Industry Association, the industry continues to rebound from a sharp decline nearly a year ago. For the third quarter, semiconductor sales rose 20% from the second quarter.
CNBC:
- U.S. banks are at risk of sizable new loan losses, particularly on commercial property, and some banks may not have sufficient capital to fully cushion against losses, a Federal Reserve official said on Monday.
The Business Insider:
- 10 Cities Where Real Estate Is Surging Again.
- We had professor William Black on TechTicker this morning. A former regulator who handled the S&L resolution, Prof. Black remains appalled at how this latest round of bailouts has been handled. Case in point? CIT Group. Once again, the white knight who stepped in to save the company--the U.S. taxpayer--gets completely hosed.
Boston Globe:
Rassmussen:
Reuters:
- White House economic adviser Lawrence Summers will lead a high-level meeting on Monday to discuss the state of the economy, job creation and ways to achieve sustainable growth. A White House announcement said the meeting would take place at 2 p.m. EST (1700 GMT) and would include Cabinet officials from Treasury Secretary Timothy Geithner to Health and Human Services Secretary Kathleen Sebelius, Agriculture Secretary Tom Vilsack and Energy Secretary Steven Chu. National Security Adviser James Jones, White House climate czar Carol Browner, U.S. Trade Representative Ron Kirk and senior White House adviser Valerie Jarrett are also among those scheduled to attend.
- Shares of BlackBerry maker Research In Motion(RIMM) fell more than 6 percent on Monday after an analyst told investors to sell the stock because of mounting competition from other smartphone makers. "Simply put, there is an invasion of new phones, applications, and competition," Citi Investment Research analyst Jim Suva wrote to clients. He cut his rating to "sell" from "buy".
Financial Times:
- Walmart(WMT) has stepped up efforts to mobilize local political support for new store openings in US cities and urban areas that were last month identified as a growth priority for the retailer by Mike Duke, its chief executive. In addition to a renewed drive to open a second Supercenter store in Chicago, the retailer is also raising its political profile in Philadelphia and continuing to cultivate the ground for a potential move into New York City. Walmart has long faced political resistance to its plans in the largest US cities, largely orchestrated by the UFCW grocery workers’ union and its political allies. Eduardo Castro Wright, chief executive of Walmart’s US stores, has estimated that urban markets where the retailer is under-represented could yield billions of dollars of new sales. “We already have in our real estate program a robust plan to go after those,” he told analysts in October. The retailer has only one store inside Chicago’s city limits and none in New York or Boston. The focus on urban markets comes at a time when Walmart’s national reputation has improved, partly as a result of its strong performance during the recession. Leslie Dach, head of corporate communications, said last month that Walmart’s role in serving low-income customers during the recession had won the retailer “new respect from politicians, from economists and from the media”. The retailer’s embrace of environmental sustainability over the past four years has also improved its ethical reputation, moving up Covalence’s ethical rating of 27 global retailers from bottom in 2004 to second currently, behind Marks and Spencer. Saint Consulting, a group specializing in land-use politics, reported in January this year a drop in the number of people saying that they would oppose the opening of a new Walmart store – at 56 per cent, down from 68 per cent two years ago.