US FINANCIAL MARKET
- U.S. stocks fell at the open on Wednesday, led by declines among retailers before GDP report that may show a contraction in economic growth.
o A report by the Commerce Department tomorrow may show the U.S. economy contracted 0.5 % in the first quarter, following a preliminary estimate of 0.1 % annualized growth, according to economists surveyed by Bloomberg News.
o GDP rose at a 2.6 % annualized pace in the previous period.
o Economists forecast growth of 3.5 % during the second quarter.
- Valeant injects cash into bid for botox-maker Allergan.
o Valeant offered to pay $58.30 per Allergan share in cash, about $10 higher than its previous offer of $48.30. The new offer values Allergan at $166.16 per share as of Tuesday’s closing price.
o Investors were looking for a price of $180 to $200 per share, according to an investor survey last week.
o Yesterday, Allergan built its case with investors for rejecting a $47 billion takeover offer from Valeant.
- GE strengthens hand in Alstom battle with pledge for 1,000 French jobs.
o “Today we can see that GE’s offer has been detailed, improved, strengthened,” said an official at Hollande’s office.
o The comments signaled a change of tone from the French government, which had been heavily critical of the U.S. conglomerate’s $16.9 billion bid for Alstom’s power arm.
- Toll Brothers earnings climb after builder raises prices.
o The largest U.S. luxury-home builder reported profit that more than doubled as the company increased prices and delivered more properties.
o The average price of Toll’s homes delivered during the second quarter rose to $706,000 from $577,000 a year earlier.
o Net income climbed to $65.2 million from $24.7 million a year earlier. Revenue advanced 67 % to $860 million.
o Toll Brothers continued raising prices and boosting sales in the costlier New York and California markets even as inclement weather and falling affordability slowed delivery of new homes nationwide in the first four months of the year.
- Tesla Motors was slapped with a junk credit rating by Standard & Poor’s because of “considerable uncertainty” about its long-term prospects.
o The unsolicited B- ranking, six levels below investment grade, reflects a business “constrained by Tesla’s niche and independent market position,” S&P, the world’s largest credit-rating company, said today in a statement.
o The youngest publicly traded U.S. automaker has tapped debt markets without a ranking from any of the major ratings companies.
o Tesla raised about $2.3 billion in March selling convertible debt to fund a battery factory to make more affordable models.
- MasterCard extends zero liability policy to ATM transactions.
o Zero liability protection means the account holder will not be held responsible for unauthorized transactions.
o Larger rival Visa’s zero liability policy does not apply to PIN-based and ATM transactions.
- Citigroup sees second quarter markets revenue down as much as 25 %.
o Citigroup blamed geopolitical events, uncertainty in the global economic environment and low price volatility for the anticipated revenue drop.
- RBS to eliminate hundreds of U.S. jobs ahead of Fed rules.
o Royal Bank of Scotland, Britain’s largest state-owned lender, plans to cut hundreds of U.S. jobs while shrinking its mortgage-trading business ahead of stiffer capital rules.
- Pimco rehires McCulley, this time as chief economist and public face.
o Paul McCulley was previously a portfolio manager and the bond giant’s top analyst of the U.S. Federal Reserve’s policies.
o The firm, which oversaw $1.94 trillion, said McCulley will be its chief economist, a newly created role, and will report to Bill Gross.
- Google unveils a bold new design for its prototype driverless car as it moves forward with plans to make self-driving vehicles ubiquitous on American roads.
o Working with automotive partners, the company plans to have 100 to 200 test vehicles that are fully autonomous with extra safety features.
o Over the next two decades, self-driving cars are going to get a bigger share of the market. Such vehicles will reach 11.8 million in 2035, according to Egil Juliussen, an analyst at IHS Automotive.
o And by 2050, he expects almost all cars to become self-driving.
o They are estimated to fetch premiums that will start at $7,000 to $10,000 in 2025, he said.
US ECONOMY & POLITICS
- Fed’s Lockhart sees growth rebound, no rush to raise rates.
o The U.S. economy should rebound to a roughly 3 % annual growth rate after a rocky start to 2014 and put the Federal Reserve on track to raise rates later next year, Lockhart said.
EUROPE & WORLD
- German jobless rise biggest in five years, mild winter blamed.
o The number of people out of work increased by 24,000 to 2.905 million on a seasonally-adjusted basis.
o The mid-range forecast was for a drop of 15,000.
- Nestle boosts skincare business with $1.4 billion Valeant deal.
o The world’s biggest food group, with brands including KitKat chocolate bars, Gerber baby food and Nescafe coffee, signaled its ambitions in skincare in February by taking over the Galderma dermatology venture it had with L’Oreal.
TODAY in HISTORY
- The first all-color, full-length talking picture, On With the Show!, debuted (1929)
- Baseball owners voted to allow the Brooklyn Dodgers and New York Giants to move to Los Angeles and San Francisco, respectively. Many New Yorkers still haven’t recovered (1957)
- Pres. Bush signed a $350 billion tax cut into law; the third largest tax cut in U.S. history (2003)
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