The S&P 500 bounced back after briefly hitting a two-month low. The index closed down 0.67 per cent at 1,354.58 (Reuters). The Dow Jones Industrial Average is now on a six-day losing streak, closing down 0.8 per cent at 12835.06 (Wall Street Journal). Treasuries in Wednesday’s 10-year auction were sold at a record low yield of 1.855 per cent (Bloomberg).
Eurozone creditors approved Greece’s latest loan disbursal. Some €4.2bn will be released this month a further €1bn next month, despite some creditor’s fears over Greece’s post-election political instability (Wall Street Journal). Pasok, the former governing party which came third in the elections, is the latest to be given a mandate to form a workable coalition government. One government official said the chance of a coalition was minimal. Fresh elections will probably be held on June 17 (Financial Times).
Bankia has sought to convert €4.47bn of government loans into equity, raising the prospect of partial state control of the Spanish bank. ‘The events in recent weeks and the growing uncertainty over the institution’s future have advised further action,’ Spain’s central bank said (Bank of Spain). The government’s bank bailout fund would be left with a 45 per cent stake in Bankia on conversion (Financial Times).
Cisco’s earnings rose 20 per cent but the ‘beat’ was small. Shares fell as much as 8.2 per cent after Cisco provided financial forecasts including revenue growth in the fiscal fourth quarter of 2 to 5 per cent. Analysts had expected 7 per cent (WSJ Market Beat).
News Corp doubled the size of its share buyback programme to $10bn. ‘We continue to pursue our share buyback program, repurchasing nearly $4 billion worth of stock over the last nine months and have just increased the authorization for future buyback purchases by $5 billion,’ Rupert Murdoch, News Corp’s chief executive, said in its first-quarter earnings release (News Corp).
GlaxoSmithKline went hostile in its bid for Human Genome Sciences. GSK will take a $2.6bn, $13 per share offer directly to shareholders and decline to take part in a strategic review by HGS, the company said. HGS shares have traded above GSK’s offer price since it was rebuffed last month (Financial Times). GSK has cooperated with HGS on research and development for 20 years, including the joint sale of a new drug for lupus, released last year (Wall Street Journal).
Coty has strengthened its hand in bidding for Avon, after its parent company tapped $2bn from a share sale. JAB holdings said it would sell 36m shares in the UK’s Reckitt Benckiser. The move reflected a “desire to diversify its portfolio and invest in new opportunities,” it added. Avon shares rose as much as 9 per cent following JAB’s move, interpreting it as giving Coty greater resources in its $10bn takeover battle (Financial Times).
A select few Merrill Lynch brokers provide almost half of its global wealth management revenue. Just over one-fifth of the firm’s advisers account for 46 per cent of revenue, according to internal Merrill documents. The 2,400 or so brokers each contributed twice the average revenue brought in by the next 20 per cent (Reuters).
March’s US trade balance data should be interesting, after narrowing sharply last time to $46bn.
Bank of England and Norges Bank decisions… though both will probably stay on hold.
– The crackdown on Sina Weibo.
– Nominal spending has fallen in the eurozone periphery.
– Running a shareholder meeting, Bank of America style.
– Felix, on (finally) principal reductions.