Wall Street Breakfast: Friday's Must-Know News

April 27, 2012  |  includes: AAPL, AMZN, BA, EADSY.PK, GS, MDRX, NOK, PG, QQQ, SBUX, SPY, SSNLF.PK

Top Stories
Amazon surges as revenues jump and profits slump. Amazon (AMZN) shares were +12.4% premarket despite Q1 EPS dropping 35% to $0.28. But that handily beat consensus, as did revenue growth of 34% to $13.18B. The discord is due to Amazon's prodigious spending, and CEO Jeff Bezos said the company plans to invest another $800M-$900M on capex in Q2. However, few details were provided about the Kindle and the e-book disputes. Opinion: Amazon: A solid beat, but is it overpriced?

S&P downgrades Spain for the second time this year. S&P has cut Spain two notches to BBB+ from A, with a negative outlook, saying the country's "budget trajectory will likely deteriorate against a background of economic contraction in contrast with our previous projections." As if to underscore S&P's move, unemployment rose to 24.4% in Q1 from 22.9% in Q4, marking the highest rate in 18 years. Opinion: Monitoring risk after Spain's downgrade.

Starbucks guidance prompts fall despite strong FQ2. Starbucks' (SBUX) FQ2 earnings narrowly beat estimates as EPS climbed 18% to $0.40 and revenue 15% to $3.20B, although shares were -5% premarket after the company gave FY 2012 EPS guidance that was below consensus. Still, sales in China grew over 20% for the seventh quarter in a row, and Starbucks said it intends to increase the speed of new openings in the country. "China is going gangbusters," CFO Troy Alstead told the NYT. Opinion: Starbucks goes upscale in China.

Top Stock News
Samsung takes Apple and Nokia crowns as profit soars. Samsung's (SSNLF.PK) Q1 net income rocketed 81% to 5.05T won and topped analyst expectations as soaring Galaxy sales helped mask slumping earnings at the company's chip business. With Galaxy shipments of 44.5M, Samsung retook the lead from Apple (AAPL) in the segment; and with overall volume of 93.5M units, Samsung claimed Nokia's (NOK) 14-year crown as the largest vendor of mobile phones. Opinion: Galaxy Note will drive Samsung growth.

P&G earnings mixed. Procter & Gamble (PG) FQ3 EPS of $0.94 beats by $0.01; revenue of $20.2B (+2% Y/Y) misses by $100M. Earnings release:P&G maintains top-line growth momentum

Goldman-Galleon probe deepens. Regulators are widening their probe into the potential involvement of Goldman Sachs (GS) employees in the Galleon Group insider trading ring, the WSJ reports, with investigators focusing on whether a senior I-banker gave Galleon traders advance word of pending health-care deals. Opinion: Goldman needs to learn its lesson.

Allscripts shakeup, Q1 report send shares into tailspin. Allscripts (MDRX) shares sank 42% in post-market trading following a bleak Q1 report that missed consensus and after the announcement of a major shakeup. Chairman Phil Pead has been fired and has been followed out the door by three board members who disagreed with the move, and CFO Bill Davis is also stepping down. Allscripts EPS fell to $0.12 from $0.21 cents and revenue rose 8.8% to $364.7M, while 2012 guidance was also disappointing. Earnings release: Allscripts announces Q1 results.

Boeing poised for $6B Chinese order. China Eastern Airlines is set to place a $6B order for up to 20 Boeing (BA) 777 jets, while it's also stalling on the completion of a $3B order for 15 Airbus (EADSY.PK) A330 aircraft, Reuters reports. The near-certain cause: China's well-known opposition to EU plans to force airlines to adopt a carbon emissions-capping scheme. Opinion: Strong commercial deliveries drive Boeing's performance.

Top Economic & Other News
Dutch reach budget pact. Holland's caretaker government yesterday agreed to a deal with opposition parties on the 2013 budget, which will reduce the deficit to the EU ceiling of 3% via social service cuts, pay freezes and higher taxes, including "sin taxes" on alcohol and tobacco. The deal should increase Holland's chance of keeping its AAA rating.Opinion: Netherlands ETF down but not out.

Growth expected to have slowed in Q1. GDP figures are due out this morning, with economists forecasting that Q1 growth slowed to an annual rate of 2.5% from 3% in Q4, a Bloomberg survey shows. Projected household consumption of +2.3% - up from 2.1% in Q4 and the fastest rate in a year - is expected to have underpinned overall growth. Opinion:Where is the small business recovery?

BOJ to print more money; data mixed As expected, the Bank of Japan has left its interest rates unchanged but will expand its asset purchases by ¥10T-¥40T. The decision follows a mixed data dump: March unemployment remained unchanged at 4.5%; March industrial production +1% on month vs. +2.4% consensus; March household spending +3.4% on year vs. +2.3% in February; April PMI fell to 50.7 from 51.1 in March.Opinion: Is Japan past the point of no return?

China lets renminbi hit another record high. The People's Bank of China has allowed the yuan to hit a record against the dollar for the second day in a row, setting the exchange at 6.2787. The move follows more calls yesterday from Timothy Geithner to allow the renminbi to appreciate further, but comes despite a slowdown in China's economy.Opinion: How to ditch the dollar and buy renminbi

Today's Markets:
In Asia, Japan -0.4%. Hong Kong -0.3%. China -0.3%. India flat.
In Europe, at midday, London +0.3%. Paris +0.3%. Frankfurt +0.1%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.24%. Crude -0.3%to $104.22. Gold -0.3% to $1655.30.

Today's economic calendar:
8:30 GDP Q1
8:30 Employment Cost Index
9:55 Reuters/UofM Consumer Sentiment

Notable earnings before today's open: ALV, COV, CPN, CVH, DTE, F,GT, IMAX, IP, KKR, MRK, NEM, PG, SPG, TOT, VFC, VTR, WY