Wall Street Brief: CME Chief Steps Down, Intel’s TV Strategy, Second Greek Bailout
On Monday, euro finance ministers approved a second Greek bailout, enabling an initial payment from the EUR 130 billion package ($170 billion) to take place. Greece is now positioned to get more than EUR 100 billion over three years from the European Financial Stability Facility (EFSF). According to EFSF Chief Executive Officer Klaus Regling, the first payment of EUR 5.9 billion will come this month, followed by an April payment of EUR 3.3 billion next month and in May, EUR 5.3 billion.
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Intel Corp. (NASDAQ:INTC) is breaking out of its usual mode and will create an Internet-based TV service for U.S. customers. The company has been working on the project for awhile, going to media companies and pitching the idea to make a “virtual cable operator” with U.S. TV channels via the Internet. It will be comparable to the subscriptions seen by traditional cable and satellite companies, according to The Wall Street Journal. Subscribers would need to obtain their own Internet to use the service.
In a surprise announcement on Monday, CME Group (NASDAQ:CME) said in a press release that CEO Craig Donahue will step down at year’s end. Donahue said it’s not because of the MF Global collapse, which has put the exchange in the limelight, appearing before Congress and receiving questions from ratings agencies. In the company’s succession plan, upon Donahue’s departure, Terrence Duffy, currently Executive Chairman, will add the title of President and President Phupinder Gill will become Chief Executive Officer.
The Bank of Japan fended off addition easing after February’s YEN 10 trillion increase. Its overnight call rate and inflation target remained the same. One change that did not come as a surprise, the Bank continued its inexpensive loan line for growing industries.
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9 Buzzing Stocks: Apple Receives $699 Price Target, Great Wolf Surges 22%
Shares of Urban Outfitters Inc. (NASDAQ:URBN) dropped more than 4 percent early Tuesday. The retailer reported fourth quarter results late Monday. Net income for the company fell to $39.3 million (27 cents per share), compared to $75.2 million (45 cents per share) a year earlier.
Apple Inc. (NASDAQ:AAPL) shares popped almost 1 percent before the opening bell. Peter Misek from Jefferies & Co. reiterated a Buy rating on shares and raised his price target to $699.
Cornerstone Therapeutics Inc. (NASDAQ:CRTX) shares surged 9.35 percent in early morning trading. The company announced that the FDA accepted a new drug application for CRTX 080. The new drug is for the treatment of hyponatremia.
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Due to antitrust regulators needing extra time, Express Scripts Inc. (NASDAQ:ESRX) and Medco Health Solutions Inc. (NYSE:MHS) are delaying the closing of their merger. According to an SEC filing, the deal would create the largest U.S. pharmacy benefits manager. Shares of both companies increased about 1.5 percent Tuesday morning.
Shares of Great Wolf Resorts Inc. (NASDAQ:WOLF) jumped 22 percent on buyout news. Private-equity giant Apollo Global Management (NASDAQ:APO) is buying the water-park hotel operator in a deal that values the company at $165 million.
Goldman Sachs (NYSE:GS) and Citigroup Inc. (NYSE:C) shares gained nearly 2 percent this morning. Banking stocks are performing well across the board as the Federal Reserve prepares to release stress test results on Thursday.
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Bank of America Up 1.5%, Wal-Mart, Disney Round Out Hot Stocks March 13th
Bank of America Corporation (NYSE:BAC): According to legal documents outlining the $25B mortgage settlement, Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) could face fines of $1M if more than 1% of their foreclosure sales are found to be in error going forward, the Charlotte Observer reports. Banks will risk penalties if they deny loan modifications in error more than 5% of the time. Shares of Bank of America Corporation are trading 1.5% higher today.
Wal-Mart (NYSE:WMT): Wal-Mart will charge $2-$4 to convert DVDs into Ultraviolet digital copies, reports StreamingMediaBlog. Walmart has partnered with Hollywood studios to offer a service with prices that will vary depending on the quality of picture. Shares of Wal-Mart are trading .05% higher today.
Disney (NYSE:DIS): Walt Disney Company announced Heroes Work Here, a new company-wide initiative to hire, train and support returning veterans. As part of the initiative, Disney will provide at least 1,000 jobs and career opportunities for returning U.S. veterans over the next three years, support military families and veterans during their transition into civilian life, and launch a national public awareness campaign to encourage all employers across the U.S. to hire veterans. Disney will also invest in select non-profit organizations that provide training and other support services. Shares of Disney are trading 1.96% higher today.
Great Wolf Resorts, Midas, FactSet Research, Omeros Attract Trading Interest Mar. 13th
Great Wolf Resorts, Inc. (NASDAQ:WOLF): An affiliate of Apollo Global Management (NASDAQ:APO) and Great Wolf Resorts (NASDAQ:WOLF) announced that they have entered into a definitive merger agreement whereby Apollo, a leading global asset manager, will acquire Great Wolf, North America’s largest family of indoor waterpark resorts, for approximately $703M, including the assumption of the Company’s outstanding debt. Through a cash tender offer that is expected to commence today, Apollo will make an offer to purchase all outstanding shares of Great Wolf common stock for $5.00 per share. This offer represents a premium of 72.9% over the six-month average of Great Wolf’s share price ending on March 12, 2012, a premium of 50.4% over the ninety-day average of Great Wolf’s share price ending on March 12, 2012, and a 19.3% premium over Great Wolf’s closing stock price on March 12, 2012. The transaction was unanimously recommended by an independent strategic review committee of the board of directors of Great Wolf and unanimously approved by the board of directors of Great Wolf, who are recommending that Great Wolf stockholders tender their shares in the offer. Shares of Great Wolf Resorts, Inc. are trading 22.91% higher today.
Midas, Inc. (NYSE:MDS): TBC Corporation and Midas, Inc. (NYSE:MDS) have entered into a definitive merger agreement, pursuant to which TBC will acquire Midas through a cash tender offer at $11.50 per share. The all-cash transaction is valued at approximately $310M, including the assumption of approximately $137M in debt and pension liabilities. The $11.50 per share offer price represents a 75 percent premium over Midas’ closing price of $6.58 on August 11, 2011, when Midas announced it would conduct a strategic review process, and a 28 percent premium over the closing share price as of Monday, March 12, 2012. The proposed transaction has been unanimously approved by the boards of directors of both companies. In addition, Midas Chairman, President and CEO Alan Feldman has signed a tender and voting agreement in support of the offer. Under the terms of the merger agreement, TBC will commence a cash tender offer no later than March 28, 2012. The closing of the transaction is expected to occur by the end of the second quarter, and is subject to customary terms and conditions, including regulatory clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Shares of Midas, Inc. are trading 27.36% higher today.
FactSet Research Systems Inc. (NYSE:FDS): The company sees Q3 revenue $200M-$204M versus consensus $202.59M. Shares of FactSet Research Systems Inc. are trading 6.28% higher today.
Omeros Corporation (NASDAQ:OMER): Omeros reported positive data from its Phase 3 clinical trial evaluating OMS302 in patients undergoing intraocular lens replacement surgery. OMS302 met its primary endpoint by demonstrating statistically significant maintenance of intraoperative mydriasis. OMS302 also demonstrated statistical superiority over placebo in reduction of pain in the early postoperative period. Shares of Omeros Corporation are trading 20.81% higher today.
Urban Outfitters, Inc. (NASDAQ:URBN):
Shares of Urban Outfitters, Inc. are trading 6.13% lower today.
Ebix, Tranzyme, Carmike Cinemas, AOL Inc Among High Demand Stocks March 13th
Ebix Inc (NASDAQ:EBIX): Ebix announced that its Board of Directors has increased the quarterly dividend by 25% to 5c. The next dividend is payable at the end of May. The record date and payment date will be announced shortly, the company said. Shares of Ebix Inc are trading 4.85% higher today.
Tranzyme Inc (NASDAQ:TZYM): Following the failure of Uliorelin in post-operative ileus, the firm believes there is an opportunity in Tranzyme shares ahead of its proof-of-concept data for oral ghrelin agonist TZP-102 in diabetic gastroparesis. Price target $6. Shares of Tranzyme Inc are trading 3.48% higher today.
Carmike Cinemas, Inc. (NASDAQ:CKEC): Reported Q4 revenue $120.1M versus consensus $112.2M. Shares of Carmike Cinemas, Inc. are trading 21.21% higher today.
AOL Inc (NYSE:AOL): AOL CEO Tim Armstrong defended the company’s strategy, saying there was a “huge misunderstanding” about AOL, reports the Wall Street Journal. At an Internet conference hosted by Barclays Capital, Amstrong said there wasn’t been a talent drain as much as the company removed people who were not performing.
Banks and Tech Lead Rally, But Fed Gives Markets an Extra Boost
Markets closed up on Wall Street today: Dow +1.68%, S&P +1.81%, Nasdaq +1.88%, Oil +0.35%, Gold -1.61%.
On the commodities front, Oil (NYSE:USO) rose to $106.71 a barrel. Precious metals were down, with Gold (NYSE:GLD) falling to $1,672.50 an ounce while Silver (NYSE:SLV) fell 1.43% to settle at $33.27.
Today’s markets were up because:
1) Banks. Investors focused on shares of big banks today, one of two sectors (the other is tech) that tend to reflect an increased appetite for risk. Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JPMorgan Chase (NYSE:JPM) led the market’s rally today, climbing more than 6 percent each. JPMorgan closed the day up more than 7 percent after getting an extra push from the bank’s announcement that it would raise its dividend 20 percent and had authorized a $15 billion share repurchase plan.
2) Tech. First Solar (NASDAQ:FSLR), Micron Technology (NASDAQ:MU), and JDS Uniphase (NASDAQ:JDSU) were all strong today, leading an impressive tech rally that witnessed across-the-board gains for companies ranging from Intel (NASDAQ:INTC) to Apple (NASDAQ:AAPL) to ARM Holdings (NASDAQ:ARMH). The Nasdaq rose 1.88 percent, outperforming the other two major U.S. markets, though the S&P 500 and Dow were helped by financials.
3) Fed. Markets were up all day but jumped higher in the last hour of trading after the Federal Reserve issued a fair outlook for the U.S. economy. As expected, policymakers chose not to implement any new stimulus programs, so few could be disappointed. And while the central bank remained cautious in giving its assessment of the current state of the economy, policymakers did give a more upbeat outlook for the job market and the global economy.
9 Radar Stocks: Banks in Spotlight After Fed Releases Stress Tests Results Early
After closing 7 percent higher during regular market hours, shares of J.P. Morgan (NYSE:JPM) edged slightly lower in late trading. The bank passed the latest stress tests and announced a nickel dividend raise in addition to a $15 billion stock buyback plan. Other major banks such as Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) also passed the stress test.
Shares of Metlife Inc. (NYSE:MET) dropped more than 3 percent after failing the Fed’s stress test. The insurer said in a statement, “MetLife is financially strong and well positioned for both the current environment and a potential further economic downturn. We are deeply disappointed with the Federal Reserve’s announcement.” Citigroup Inc. (NYSE:C) and SunTrust Banks Inc. (NYSE:STI) also traded lower after failing stress tests.
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Bank of New York Mellon Corp. (NYSE:BK) edged .20 percent in late trading. The custodian bank announced it will repurchase up to $1.16 billion of common stock. It will also continue its 13 cents quarterly dividend over the next 12 months.
Goldman Sachs Group Inc. (NYSE:GS) edged higher after the closing bell. The firm said late Tuesday that the Federal Reserve did not object to its proposed capital actions out to the beginning of 2013. Proposed actions include a share repurchase program and a higher dividend.
Wells Fargo & Co. (NYSE:WFC) shares popped .50 percent in extended trading. The bank not only passed the stress tests, but also nearly doubled its quarterly dividend. The new dividend will be paid March 30 to shareholders of record on March 26.
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