What’s The Story Morning Glory?

by CC January 4, 2012 9:18 am • Commentary


European equities, which had rallied sharply to begin the new year, were lower as concerns over Spain and non-euro member Hungary took a toll on sentiment. Read Europe Markets.

Spanish bond yields were on the rise after Spain’s Expansion newspaper, citing unnamed sources, reportedly said that Prime Minister Mariano Rajoy’s government is weighing applying for loans from the European Union rescue fund and the International Monetary Fund to back a restructuring of the country’s banking sector.

Hungary’s forint dropped to an all-time low versus the euro on worries the country’s controversial new law limiting the independence of its central bank will prevent it from receiving aid from the International Monetary Fund and the European Union. Switzerland and European Union countries are seen holding large chunks of Hungarian debt.


Spanish bond yields rose for a second day, with the 10-year yield up 11 basis points at 5.35% after a report in Spain’s Expansion newspaper, citing unidentified sources, said the government was weighing applying to the International Monetary Fund and the European Union’s rescue fund for loans to finance a restructuring of the country’s banking sector.

Yields fall as bond prices rise.

The cost of insuring Spanish government debt against default via instruments known as credit default swaps, or CDS, jumped. The spread on five-year Spanish CDS widened to 425 basis points from 423 on Tuesday, according to data provider Markit.

That means it would now cost $425,000 annually to insure $10 million of Spanish debt against default for five years, a rise of $23,000 from Tuesday.

Meanwhile, Germany sold 4.1 billion euros ($5.3 billion) of 10-year bonds, or bunds, in a closely-watched auction that was deemed satisfactory at best by strategists after a November auction was left technically undersubscribed, stirring market jitters. The sale on Wednesday saw bids exceed allotted supply 1.3 times, which was in line with the historic average. The yield fell to 1.93% from 1.98% in November.


Acme Packet cut its full-year guidance Tuesday, citing weakness in its North American service provider business during the fourth quarter. Shares of the networking company fell 20% to $25.40 in recent premarket trading.

Ventas said one of its top stockholders planned sell approximately 21.1 million shares of the company’s common stock, representing about a 7.3% stake in the health-care real-estate investment trust. Shares fell 3.5% to $53.63 in recent premarket trading.

TiVo on Tuesday said it reached a settlement with AT&T Inc. that gives the set-top box maker at least $215 million for its technology. TiVo’s shares climbed 12% to $10.01 in light premarket trading.

Dunkin’ Brands Group Inc.’s shares rose 1.5% to $25.11 premarket after the company said it plans to more than double the number of its restaurants in the U.S. over the next 20 years.

Eastman Kodak Co.’s shares slipped 2.2% to 64 cents premarket after saying it received a notice from the New York Stock Exchange warning that the photography icon is out of compliance with listing requirements, sending shares lower. Through Tuesday’s close, Kodak’s shares have fallen 88% in the past year and last closed above $1 in early December.

Cabot Oil & Gas Corp. declared a two-for-one stock split and raised its dividend 33% on a pre-split basis, adding the natural gas producer to the growing list of companies seeking to deliver a greater return to investors. Shares rose 3.3% to $79.30 in recent premarket trading.

HollyFrontier Corp.’s board authorized a $350 million share repurchase program, the latest shareholder friendly move in recent months by the refiner. Shares gained 3% to $26 in light premarket trading.

Achillion Pharmaceuticals Inc. said it had received fast track designation from the U.S. Food and Drug Administration for ACH-1625 for the treatment of chronic hepatitis C virus. Shares gained 3.3% to $7.88 in premarket trading.

Progress Software Corp.’s fiscal fourth-quarter earnings fell 45% as the business-software maker again reported a decline in software-licenses revenue. Shares slid 5.3% to $18.75 premarket as the company forecast first-quarter earnings below analyst estimates.

Arena Pharmaceuticals Inc. said its lorcaserin antiobesity drug was back on track with U.S. Food and Drug Administration, as the company submitted its response to worries the agency cited in rejecting the treatment last year. Shares rose 4.7% to $2.01 in recent premarket trading.

Landec Corp.’s fiscal second-quarter profit rose 63%, stronger than expected, as the packaging company’s Apio food-products business benefited from higher volume. Shares climbed 3.4% to $6.10 in light premarket trading.

The Securities and Exchange Commission sued Life Partners Holdings Inc. and three top executives, alleging a years-long disclosure and accounting fraud that involved misleading financial statements and backdated documents shown to auditors, The Wall Street Journal reported Tuesday. Shares slumped 35% to $4.11 premarket.

BioMimetic Therapeutics Inc. said the Food and Drug Administration has said its proposed bone-graft device Augment wouldn’t be approved without more information from previous studies. The company said it planned to submit the necessary information by the middle of the year. Shares dropped 14% to $2.50 premarket.

LCA-Vision Inc. performed 30% more laser-vision correction services in the fourth quarter than a year earlier, marking only the second year-over-year quarterly increase in the eye procedures since the third quarter of 2007. Shares jumped 8.1% to $3.33 in light premarket volume.

Trident Microsystems Inc.’s shares plummeted 42% to 12 cents after the company filed for Chapter 11 bankruptcy protection in Delaware and said Entropic Communications Inc. made a $55 million bid to acquire a portion of its set-top box business.