Intel AWARDED DOE Contracts and 3 Dow Movers Rounding Out the Week

Intel Corporation (NASDAQ:INTC) has been awarded two subcontracts which total $19 million with the United States Department of Energy. Through the terms of these two awards, Intel Federal LLC, a wholly owned subsidiary, will be a major participant in the Lawrence Livermore National Security, LLC managed Extreme-Scale Computing Research and Development FastForward program which is focused upon driving advancements in exascale computing.

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Johnson & Johnson (NYSE:JNJ): Some 16 emerging markets, including Brazil, China and Russia, will make up one third of worldwide drug expenditures within the next four years, and increasing spending in emerging pharmaceutical markets will drive the industry’s global sales growth by 2016, according to Bloomberg, citing a report by the IMS Institute for Healthcare Informatics.

JPMorgan Chase & Co. (NYSE:JPM): The restatement results from information that has recently come to the Firm’s attention in connection with management’s internal review of activities related to CIO’s synthetic credit portfolio. Under Firm policy, the positions in the portfolio are to be marked at fair value, based on the traders’ reasonable judgment as to the prices at which transactions could occur. However, the recently discovered information raises questions about the integrity of the trader marks, and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses being incurred in the portfolio during the first quarter. As a result, the Firm is no longer confident that the trader marks used to prepare the Firm’s reported first quarter results, although within the established thresholds, reflect good faith estimates of fair value at quarter end. The Firm has consequently concluded that the Firm’s previously-filed interim financial statements for the first quarter of 2012 should no longer be relied upon, and the Firm will be filing an amendment to its Quarterly Report on Form 10-Q for the quarter ended March 31, as soon as practicable, but not later than it files its Quarterly Report on Form 10-Q for the quarter ended June 30. As a result of the restatement, the impact of the trading losses related to the synthetic credit portfolio on the Corporate/Private Equity sector during the first quarter will increase, as noted in the table above, but this increase will serve to reduce the impact of these losses on the Corporate/Private Equity sector during the second quarter by a corresponding amount. Accordingly, as noted above, CIO’s year-to-date principal transactions revenue, total net revenue and net income and the Firm’s year-to-date principal transactions revenue, total net revenue and net income will remain unchanged by the restatement. The valuation errors had an immaterial effect on the Firm’s balance sheet. CIO’s Value at Risk model used, as inputs, independent marks for a majority of the positions in the synthetic credit portfolio and daily trader marks related to a limited number of positions in the portfolio. The Firm believes that if CIO’s VaR were re-calculated for the first quarter of 2012, the re-computed CIO VaR numbers would not be materially different from those reported in the Firm’s Quarterly Report on Form 10-Q for the 2012 first quarter. At June 30, 2012, average VaR for CIO was $177 million for the quarter then-ended, and was $153 million for the six months then-ended. For the Firm, average total VaR was $201 million for the quarter ended June 30, 2012, and was $186 million for the six months ended June 30, 2012. For the same reason, the Firm believes the valuation irregularities had an immaterial impact on the Firm’s risk-weighted assets. However, as a result of the restatement, the Firm’s Basel I Tier I common ratio will be reduced by 4 basis points to 10.3% and its Estimated Basel III Tier I common ratio will be reduced by 3 basis points to 8.1%, at March 31, 2012. Management has determined that a material weakness existed in the Firm’s internal control over financial reporting at March 31, 2012. During the first quarter of 2012, the size and characteristics of the synthetic credit portfolio changed significantly. These changes had a negative impact on the effectiveness of CIO’s internal controls over valuation of the synthetic credit portfolio. Management has taken steps to remediate the internal control deficiencies, including enhancing management oversight over valuation matters. The control deficiencies were substantially remediated by June 30.

Merck & Co. Inc. (NYSE:MRK): Some 16 emerging markets, including Brazil, China and Russia, will make up one third of worldwide drug expenditures within the next four years, and increasing spending in emerging pharmaceutical markets will drive the industry’s global sales growth by 2016, according to Bloomberg, citing a report by the IMS Institute for Healthcare Informatics.

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