Wall Street Breakfast: Must-Know News

May 2, 2012  |   includes: AAMRQ.PK, CHK, FB, GNW, GOOG, MMI, MSFT, PFE, QQQ, SPY, VLKAF.P

Top Stories
German court rules against Microsoft in patent ruling A German court has ordered Microsoft (MSFT) to remove the Xbox and Windows 7 operating system from the country's market after ruling that the company infringed Motorola's (MMI, GOOG) video-compression IP when making the products. However, Microsoft said that a preliminary injunction from a U.S. court prevents Motorola from enforcing any German order, and that its business in the country "will continue as usual" while it appeals. Opinion: Microsoft retirement strategy.

Zuckerberg to go on Facebook roadtrip. Unlike at an analysts meeting in March, Mark Zuckerberg will grace investors with his presence in Facebook's (FB) IPO roadshow, which the company is reportedly planning to start on Monday, although he won't attend all the meetings. The IPO is slated for Friday May 18, with pricing set for the day before. Opinion:Facebook stock could be a winner.

Public pension fund files for Chapter 11. In what could be a precedent-setting case, a public pension fund - the Northern Mariana Islands Retirement Fund - has filed for bankruptcy protection. The plan is just 38.8% funded due to benefits that kept going up while funding and returns didn't. Lawyers representing beneficiaries have filed a dismissal motion, pointing out that the fund is a governmental unit. Opinion: QE3: The morning after.

Top Stock News
Carlyle having tough time with IPO pitch. P-E firm Carlyle (CG) is expected to price its IPO today and start trading tomorrow, although it's having a hard time convincing investors that it's different from peers such as Oaktree (OAK), which has fallen post-IPO. Carlyle intends to sell 30.5M shares at $23-$25, valuing it at $7B-$7.6B; the firm's strategy is to tell investors it's priced at a discount to its rivals. Opinion: Carlyle Group IPO preview.

Chesapeake shares reverse course after loss. Chesapeake Energy (CHK) was -5.4% premarket after it yesterday reported a surprise Q1 net loss of $71M due to a $167M non-cash loss on its hedging program, although the figure was down from $205M last year. Revenue rose 50% to $2.42B but also missed expectations. The stock slide reverses a sharp gain from yesterday following news that Chesapeake is replacing under-fire CEO Aubrey McClendon as Chairman. Opinion: Time to bail on Chesapeake?

AMR reduces top management, labor chief leaves. AMR (AAMRQ.PK) will eliminate five senior jobs as part of its restructuring, while VP of HR Jeff Brundage will step down. Combined with previously announced departures, the cuts represent a "20% reduction in the company's most senior leadership positions." Brundage's exit comes as AMR heads to court with unions over new labor deals, which are a major element of the reorganization plan. Opinion: Put airline stocks on your long-term radar.

Pfizer interested in "bolt-on" deals. Pfizer (PFE) is on the lookout for mid-size acquisitions, CEO Ian Read has told Reuters. "I have no interest in a massive consolidating deal," such as Pfizer's $67B purchase of Wyeth in 2009, although he's willing to spend $4B or more apiece on companies with promising new treatments for diabetes, cancer and neurological conditions. Opinion: Nothing wrong with a quiet quarter at Pfizer.

Genworth CEO quits as Q1 earnings miss. Genworth (GNW) Chairman and CEO Michael Fraizer yesterday announced his resignation, two weeks after the life and mortgage insurer postponed an IPO of its Australian unit, and on the day the company reported an earnings miss. CFO Martin Klein was appointed acting CEO, and director James Riepe was named non-executive chairman. In Q1, EPS fell to $0.09 from $0.12 while revenue slipped 5.5% to $2.43B. Opinion: S&P 500 earnings projections.

Top Economic & Other News
Eurozone unemployment keeps rising, PMI keeps shrinking The eurozone jobless rate rose to another euro-era high of 10.9% from 10.8% in February, with Spain and Greece suffering the highest unemployment at well over 20%, and Austria and the Netherlands the lowest. The final manufacturing PMI figure for April makes no better reading, falling to 45.9 from 47.7 in March and indicating faster contraction. Opinion: The euro-exit taboo.

Germany adds to gloom. German unemployment unexpectedly rose by 19,000 in April vs. forecasts for a fall of 10,000, although the adjusted jobless rate remained unchanged at a two-decade low of 6.8%. Meanwhile, PMI fell to a 33-month trough of 46.2 from 48.4. However, the labor agency said the positive employment trend "remains intact," and plans by Volkswagen (VLKAF.PK) and others to boost hiring may bear it out. Opinion: Paulson is right to short bunds.

S&P upgrades Greece. S&P has joined Fitch in lifting Greece out of default territory, increasing its rating on the country to the low-speculative grade of CCC and giving it a stable outlook. Greece's massive debt swap has "alleviated near-term funding pressures," although its "sovereign debt burden remains high" and the rating could be lowered again, S&P said. Opinion: The soon-to-be-born European growth compact.

Chinese factory activity may be stabilizing. China's factory activity cooled for the sixth consecutive month in April, but at a slower pace, suggesting conditions are stabilizing. HSBC's PMI rose to 49.3 from the 49.1 flash reading and above March's 48.3. The official PMI yesterday came in at a 13-month high of 53.3. Opinion: An options bet on a China rally.

States in battle to change pension plans as money tightens. After years of luring workers with the promise of lucrative pensions, state governments are scrambling to revamp their policies in the face of massive budget crunches, AP reports. Since 2009, 43 states have increased contribution requirements or changed the retirement age, and the moves are triggering legal and political battles over whether states are reneging on their promises. Opinion: Top 10 muni bond ETFs.

Today's Markets:
In Asia, Japan +0.3%. Hong Kong +1.0%. China +1.8%. India flat.
In Europe, at midday, London -0.7%. Paris +0.5%. Frankfurt +0.1%.
Futures at 7:00: Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -0.45%to $105.68. Gold -0.5% to $1653.80.

Today's economic calendar:
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:00 Treasury Refunding Quarterly Announcement
10:00 Factory Orders
10:30 EIA Petroleum Inventories
12:30 PM Fed's Lacker: Economic Outlook

Notable earnings before today's open: ABX, AGN, AGP, BEN, CBE, CLX,CMCSA, CVS, DVN, EPD, GRMN, HSC, HSNI, IACI, ICE, MA, MAC, MMP,MSCI, OZM, PCG, PEG, RDC, RRD, TWX, UBS, VSH

Notable earnings after today's close: AGNC, ALL, APKT, ATML, AWK,CLR, CXO, CXW, DCT, EIX, ESS, EXPD, EXXI, GMCR, HIG, HTZ, IO, JDSU,KIM, LBTYA, LNC, MELI, MTD, MUR, NGD, NLY, ONNN, ONXX, PPO, PRU,PXD, RIG, SCCO, SHO, SUN, SYMC, TSO, V, WFM, WLT, YELP