Wall Street Breakfast: Must-Know News
April 19, 2012  |  includes: AAPL, BAC, BX, CHK, EBAY, F, FB, GSK, HGSI, JNJ, MSFT, NOK, NWS, NWSA,QQQ, SNE, SPY, XOM

Top Stories
PayPal helps drive eBay's earnings higher. eBay (EBAY) continued its comeback as Q1 earnings beat expectations and the company raised its FY guidance. Adjusted EPS was $0.55, net profit rose 20% to $570M and revenue climbed 29% to $3.3B. eBay enjoyed a stellar performance from PayPal, where revenue jumped 32%, and which is now a payment option in 2,000 bricks-and-mortar stores. For analysis, read why SA author Valuentum believes the results were "fantastic", and why PayPal, according to Robert Broens, has proved to be a "stellar" acquisition.

Bank of America Q1 falls short. Bank of America's (BAC) Q1 EPS came in at $0.03, missing by $0.08, while revenue fell 10% to $22.5B and also fell short of consensus.

Demand solid in Spanish bond sale but yields again rise. Yields increased as Spain sold €2.54B ($3.33B) in 2- and 10-year bonds, although the Treasury did beat its goal of tendering up to €2.5B. The auction followed a sale of short-term paper on Tuesday, when yields surged. EU shares pared gains following the auction, but there's been no meltdown. (Source - MarketWatch)

Human Genome surges 99% after rejecting GSK bid. Human Genome Sciences (HGSI) has turned down an unsolicited offer of $13 a share from GlaxoSmithKline (GSK) as undervaluing the company. However Human Genome said it's exploring "strategic alternatives," including a sale, and has invited GSK to take part in the process. HGSI closed at $7.17 yesterday with a market cap of $1.4B. Human Genome's shares rocketed 99% to $14.30 premarket.

Top Equities News
Woe continues for Nokia. Nokia (NOK) made a Q1 loss of €0.08 a share, missing by €0.01, while revenue slumped 29% to €7.4B. The company shipped 23.8% fewer devices during the period than a year ago and warned that margins in Q2 for its large Devices & Services unit will stay around -5%.

Iraq ups the ante with Exxon over Kurdistan. Iraq has excluded Exxon Mobil (XOM) from the final list of 47 pre-qualified bidders for the next round of a tender for energy exploration rights as it seeks to stop the oil giant from entering Kurdistan. The decision comes despite Iraq again claiming this week that Exxon (XOM) has pledged not to proceed with its work in the semi-autonomous region. (Source - Reuters)

Facebook aims to IPO in May. Facebook (FB) plans to carry out its IPO on May 17, TechCrunch reports, as long as the SEC signs off on the company's paperwork in time. As expected, Facebook will aim to raise under $10B at a market cap of $100B, reflecting recent trading on secondary markets. However, that's above the $75B+ that Facebook and Instagram valued the social network giant at in their recent deal, according to the New York Times.

Microsoft results expected to be mixed. Microsoft (MSFT) is forecast to say that FQ3 EPS fell to 0.58 from 0.61 a year ago when it releases its results after the bell today, although revenues are seen rising 4.6% to $17.18B. For previews on Seeking Alpha, see Selerity Research, which says Microsoft shares could be "vulnerable to any missteps," while Zacks expects a "decent third quarter" and believes that a Windows 8 tablet could be a "formidable alternative" to the iPad and Android.

Chesapeake defends McClendon over $1.1B loan. Aubrey McClendon's "interests and Chesapeake's (CHK) are completely aligned," the firm said yesterday in response to revelations that the CEO had borrowed $1.1B to invest in thousands of the company's wells using his shares as collateral. In 2008, McClendon and Chesapeake nearly went down after he received margin calls on loans he had taken out to purchase stock in the company. A stake worth $1.9B at one point mostly vanished. (Source - CNBC, SourceWatch)

Apple ready to fight e-book charges in court. Apple (AAPL) wants to take its e-book pricing dispute with the Department of Justice to trial, a company lawyer told a District Judge yesterday. The court was also told by a HarperCollins (NWS, NWSA) lawyer that 15 states are in settlement talks with three publishers, and all 50 states might settle. Meanwhile, the European Commission has received settlement proposals from Apple and four publishers over its own probe into e-book prices. (Source - Reuters)

EU OKs J&J's $21B acquisition of Synthes. The EU has approved Johnson & Johnson's (JNJ) $21.3B purchase of Swiss medical device maker Synthes after J&J pledged to divest its trauma operations in the region. "We obtained remedies to ensure that competition will remain strong in these markets," EU Competition Commissioner Joaquin Almunia said.

Ford increases steps to catch up with GM in China. Ford (F) has unveiled further plans to expand in China as it seeks to catch up with GM and other rivals, saying it will invest $760M to build a new plant in the eastern Zhejiang province. The news comes just two weeks after Ford said it will spend $600M to build a third factory at its Chongqing complex in southwest China.

EU to approve Sony's EMI deal. The EU is today reportedly expected to OK the $2.2B acquisition of EMI's music publishing division by a Sony (SNE) led group that also includes Blackstone (BX). The approval, which is contingent on Sony selling certain assets, means the deal will avoid a longer review that could have delayed it by several months.

Top Economic & Other News
China set for further easing. The People's Bank of China might cut banks' required reserve ratios, among other easing measures, in order to boost liquidity and bank lending, Xinhua reports. The speculation follows a Standard Chartered note this week that highlighted a slowdown in the M2 money supply. (Source - MarketWatch)

Japan returns to deficit. Japan swung to a trade deficit of ¥82.6B ($1.02B) in March from a surplus of ¥29.3B in February but well below the forecast for a deficit of ¥223.1B. Exports rose 5.9% on year to ¥6.20T vs. a consensus of -2.4%, boosted by the weaker yen, and increased demand from the U.S. for automobiles and parts. Imports jumped 10.5% as closures of nuclear plants raised the energy bill. (Source - WSJ)

House clears way for talks over transport overhaul. The House yesterday took a step towards a comprehensive transport bill by passing a measure to extend highway funding through September from June, thereby paving the way for formal talks with the Senate, which has passed its own 2-year $109B plan. However, conservative Republicans are opposed to that program, as well as to a five-year package from John Boehner. (Source - AP)

Three Breakfast Reads
Bernanke Does Not Understand The Depth Of His Powers
Why Is Amazon Buying CDs?
Are You a Left Brain Or Right Brain Dividend Investor?

For more informed opinion and analysis, go to seekingalpha.com.

Today's Markets:
In Asia, Japan -0.8%. Hong Kong +1.0%. China -0.1%. India +0.6%.
In Europe, at midday, London +0.6%. Paris +0.4%. Frankfurt +0.4%.
Futures at 7:00: Dow +0.6%. S&P +0.6%. Nasdaq +0.8%. Crude +0.3%to $102.96. Gold +0.05% to $1640.50.

Thursday's economic calendar:
8:30 Initial Jobless Claims
10:00 Existing Home Sales
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Earnings Results: 
For full real-time earnings coverage, please click here.

Companies that beat EPS expectations last night and today include:
- American Express (AXP)
- eBay (EBAY)
- EMC (EMC)
- Marriott International (MAR)
- Qualcomm (QCOM)
- Yum Brands (YUM)

Companies that missed expectations include:
- Kinder Morgan Energy Partners L.P. (KMP)
- Stanley Works (SWK)
- Steel Dynamics (STLD)
- Bank of America (BAC)
- Nokia (NOK):

Notable earnings before Thursday's open: ADS, BAC, BAX, BBT, BSX,BTU, BX, CY, DD, DHR, DO, EMC, FCS, FCX, FHN, FITB, FNFG, GNTX, KEY,LUV, MS, NOK, NUE, PBCT, PM, PPG, SHW, SWFT, TCB, TRV, UNH, UNP,VZ
Notable earnings after Thursday's close: ALTR, AMD, ASBC, CB, COF,ETFC, GDI, HBI, MSFT, PLCM, RVBD, SNDK, TPX, WYNN