Stock futures continue to trade with a lead over fair value, but they recently eased back in response to a headline regarding the possible delay of bailout funds for Greece. However, it was learned that the Empire Manufacturing reading, a survey on manufacturing activity in the New York region, climbed to 19.5 in February from 13.5 in the prior month. Many economists had expected only incremental improvement to 14.0.
Euro zone finance officials are examining ways of delaying parts or even all of the second bailout program for Greece while still avoiding a disorderly default, several EU sources said on Wednesday.
Delays could possibly last until after the country holds elections expected in April, they said
While most of the elements of the package, which will total 130 billion euros, are in place, euro zone finance ministers are not satisfied that Greece’s political leaders are sufficiently committed to the deal, which requires Athens to make further spending cuts and introduce deeply unpopular labor reforms.
It is also not clear that Greece’s debt-to-GDP ratio, which currently stands at around 160 percent, will be cut to 120 percent by 2020 via the agreement, as demanded by the ‘troika’ of the European Commission, IMF and European Central Bank.
“There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to,” one official briefed on preparations for a euro zone finance ministers call later in the day told Reuters.
“They’ll discuss the options,” he said, adding: “There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they’ve held elections.”
The eurozone economy contracted less than feared at the end of last year after an unexpectedly robust performance by France partly offset chronic weakness across much of crisis-hit southern Europe.
Eurozone gross domestic product contracted by 0.3 per cent in the fourth quarter compared with the previous three months, highlighting the impact on the real economy of the region’s escalating debt crisis.
Italian GDP fell 0.7 per cent, plunging the country into recession – defined as two consecutive quarters of contraction. On Tuesday Greece and Portugal also reported sharp slowdowns in late 2011.
Eurozone policymakers will be relieved, however, by the surprise expansion of 0.2 per cent in French GDP over the same period, boosted by exports. Germany, meanwhile, reported a smaller-than-expected 0.2 per cent contraction.
The data increased the likelihood of “core” Europe escaping a deep recession, with “the balance of risk – for France and the euro area in aggregate – oscillating between shallow recession and subdued growth”, said Gilles Moec, European economist at Deutsche Bank. “This would be a much better configuration than a few months ago when the data were replicating the slopes seen in 2008-2009.”
The February Empire State Manufacturing Survey indicates that manufacturing activity in New York State expanded for a third consecutive month. The general business conditions index rose six points to 19.5, its highest level in more than a year. The new orders index, at 9.7, was positive but down slightly, and the shipments index was little changed at 22.8. … Employment indexes, positive and little changed from last month, indicated a modest increase in employment levels and in the length of the average workweek. The index for number of employees was 11.8, and the average workweek index was 7.1. … Indexes for the six-month outlook, while somewhat lower than last month, conveyed a widespread expectation that conditions would improve in the months ahead.
TranSwitch filed plans to sell up to $10 million in common stock through an at-the-market offering to help develop new products. Shares eased 3.2% to $2.77 after hours.
Apple sued Motorola Mobility, saying Apple’s iPhone 4S is protected under a license agreement from Qualcomm Inc. (QCOM). The lawsuit, which was filed Friday, is part of an effort by the Cupertino, Calif., consumer-electronics giant to ward off any injunctions from Motorola, according to the court documents.
Standard & Poor’s Ratings Services raised its credit rating on Cheniere Energy a notch, pointing to the liquefied-natural-gas company’s recent deleveraging measures.
ITT pushed back the date it plans to report quarterly earnings by two weeks, citing the complexity of reviewing financial data following the industrial conglomerate’s recent spinoffs. Thought the company still said its 2011 revenue grew, the results fall slightly short of analysts’ expectations.
Macy’s has no exclusive right to sell Martha Stewart Living Omnimedia merchandise, the domestic doyenne’s company said in a legal filing Friday. The filing is Martha Stewart Living’s response to Macy’s seeking to prevent Martha Stewart products from being sold at J.C. Penney starting next year.
Watson Pharmaceuticals has filed an abbreviated new-drug application with the U.S. Food and Drug Administration for its generic version of Bayer Pharma’s Beyaz oral contraceptive. Bayer and Merck KGaA filed a lawsuit against Watson in a Delaware district court Friday to prevent Watson from launching a generic version of Beyaz prior to the expiration of its patent.
Stocks to Watch
Zynga issued its first earnings report as a public company on Tuesday, posting mixed results that included a 59% gain in sales but also a loss for the period that helped whipsaw the social-gaming company’s shares in late trading. Shares were recently off 7% at $13.35 in volatile after-hours trading.
Given Imaging’s fourth-quarter earnings jumped 76% as the medical-technology company saw stronger sales for its endoscopy capsule. Shares rose 13% to $20.05 after hours.
The U.S. Federal Reserve Board, after delaying a decision twice in a week, unanimously approved Capital One’s plan to buy ING Groep NV’s (ING, INGA.AE) U.S. online-banking business, sending a signal that banks can expand even in this new era of heightened scrutiny. Capital One shares rose 2.3% to $49.30 after hours, while ING’s American depositary shares climbed 4.2% to $8.98.
Overnight Headlines (Links)
Goldman Analyst Draws Scrutiny
China Bolsters Rhetorical Support for Europe
BNP Paribas Profit Hit By Greece
Economics/FedSpeak
NY Fed Empire State manufacturing index
Industrial production
Capacity utilization
NAHB housing index
FOMC minutes
Dallas Fed President Richard Fisher speaks
Key Earnings
Abercrombie & Fitch
Agilent Tech
America’s Car-Mart
Atlas Air Worldwide
Avis Budget
Callon Petroleum
CBS CenturyLink
CF Indus
Cimarex Energy
Clearwire
Cliffs Natural Resources
Comcast
Dean Foods
Deere
Denny’s
Devon Energy
Dr Pepper Snapple
Energy Transfer Partners
Equinix Inc.
Federal Realty Invest Trust
Goldcorp
Hanesbrands
Healthways
Henry Schein ITT
Marriott
MEMC Electronic
NetApp
Netease.com
NVIDIA Owens Corning
Penske Automotive
Photronics
SCANA
Six Flags
Star Bulk Carriers
Stifel Financial
Sun Life
Terex
Universal Forest Products
Vulcan Materials
Watsco
Wellcare Health Plans
Zillow