"The near consensus inflation data aren't likely to have much impact on the markets, though gives the Fed more flexibility in interest rate policy during the recession," says Beth Ann Bovino, economist at Standard & Poor's.
The New York Fed's Empire State index rose to -14.7 in April from -38.2 in March. U.S. industrial production fell 1.5% in March after a 1.5% decline in February -- this is a fifth staright montly decline in production. Capacity utilzation dropped to 69.3 from 70.2% previously. Manufacturing output fell 1.7% thanks to a 4.2% decline in machinery and a 2.5% drop in computers; vehicles and parts rose 1.5%.
On Thursday, reports include weekly jobless claims, housing starts, and Philadelphia Fed index. Earnings releases are coming from JPMorgan Chase (JPM), Google (GOOG), and Gannett (GCI).
Among stocks in the news Wednesday, Intel (INTC) posted $0.11, vs. $0.25 a year ago, first quarter EPS on 26% revenue drop. Due to continued economic uncertainty and limited visibility, the company is not providing second quarter revenue outlook. For internal purposes, Intel is currently planning for revenue approximately flat to first quarter.
UBS AG (UBS) sees a first quarter loss attributable to shareholders of almost CHF 2 billion, which stems from negative contribution totaling roughly CHF 3.9 billion due to losses on previously disclosed illiquid risk positions, credit loss expenses, valuation adjustments on the last positions transferred to a fund controlled by Swiss National Bank. It says the outlook for its remaining risk positions has not changed materially. It also announced plans to cut 8,700 jobs worldwide by the end of next year.
Raymond James Financial (RJF) says second quarter EPS will come in below $0.37 consensus estimate, it expects $75 billion loan loss provision, vs. $25 million in the first quarter, and charge-offs will likely total $40 million. S&P downgrades to sell from hold.
Capital One Financial (COF) reports that its credit card defaults rose in March. For U.S. cards, it posted annualized net charge-off rate of 9.33%, 30 days + delinquency rate of 5.08%. In auto finance it posted 4.08% annualized net charge-off rate, in international metrics 8.67% annualized charge-off rate.
EBay (EBAY) reached a tentative agreement to buy controlling stake in GMarket (GMKT), South Korea's largest online auction Web site, according to The Wall Street Journal. EBay will pay $24 a share for 34.2% stake of GMKT, a premium of around 50% over Gmarket's share price in past month. The price values the stake at $413 million, overall the company at $1.21 billion. Separately, eBay plans to separate Skype from the company, beginning with an initial public offering that is intended to be completed in first half of 2010.
Burger King Holdings (BKC) expects third quarter EPS to be in the range of $0.33-$0.35. It says EPS negatively impacted by significant traffic declines in the month of March, resulting in lower-than-expected company restaurant margins for the quarter.
CSX Corp. (CSX) posted better-than-expected $0.62, vs. $0.85, first quarter EPS on 17% revenue drop. The Street was looking for $0.51.
Abbott Laboratories (ABT) posted $0.73, vs. $0.63, first quarter EPS [excluding special items] on 5.4% higher worldwide operational sales, which exclude an unfavorable 6.1% effect of exchange rates. Press reports indicate sales, particularly for the company's Humira drug, may be weaker than analysts had expected. ABT sees second quarter EPS of $0.87-$0.89, excluding items estimated at $0.07 tied to acquisitions and cost cuts. Including these items, it sees $0.80-$0.82 second quarter GAAP EPS. It confirms 2009 non-GAAP and GAAP EPS guidance of $3.65-$3.70.
Procter & Gamble (PG) raised its quarterly dividend by 10%, to $0.44 from $0.40. The next dividend is payable May 15 to holders of record April 24.
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