~>Wall Street Breakfast: Must-Know Newsby: SA Editor Rachael Granby May 25, 2010 | about: AAPL / AIG / BP / BX / DELL / DIA / DIS / GLD / GOOG / LWSN / MSFT / NOK / PUK / PVH / QQQQ / SPY / TM / TSL / USO / YHOO
* Management shake-up at Microsoft. Microsoft (MSFT) is reportedly ready to announce a major management shake-up in its Entertainment & Devices Division. The unit, which focuses on videogames, mobile phones and other devices, accounted for 11% of Microsoft's revenue in Q1. However, Microsoft is falling behind in the heated competition with Google (GOOG) and Apple (AAPL). In particular, its Windows Phone is struggling, despite the firm's early entrance into the smartphone market, and Microsoft is lagging the new technology found in Apple's iPhone and Google's Android operating system. An announcement could come as soon as this week. Premarket: MSFT -2.2% (7:00 ET).
* Pru falls in Hong Kong, Singapore debut. Prudential (PUK) made its debut on stock exchanges in Hong Kong and Singapore today as it gears up for its $35.5B acquisition of AIA, AIG's (AIG) Asian unit. Shares retreated in both markets, part of a broader pullback in Asia but also a reflection of growing investor skepticism over Pru's planned takeover. Pru chairman Harvey McGrath denies that claim, saying "the vast majority of shareholders are comfortable with the AIA transaction." Meanwhile, AIA chief executive Mark Wilson has said he plans to quit if the Pru acquisition goes through, calling a merger of the two businesses "unworkable." AIA’s finance and legal chiefs quit in March, and Wilson's threatened departure raises fears that other senior players will follow suit.
* Blackstone joins Healthscope bid. Blackstone (BX) has reportedly joined TPG Capital and Carlyle Group in their $1.5B bid for Australian hospital operator Healthscope. Blackstone, which said last week that it's planning to establish a presence in Australia, had considered making its own offer but ultimately decided to provide extra financial backing to the existing bid. Premarket: BX -0.5% (7:00 ET).
* Miramax talks lose their magic. Disney (DIS) has formally ended talks to sell its struggling Miramax Films division back to Hollywood producers Harvey and Bob Weinstein. The Weinsteins, who sold the studio to Disney in 1993 for $80M, reportedly offered $625M for the studio and its library of more than 600 films, but negotiations collapsed because of the complicated acquisition structure proposed by the Weinsteins. Disney can now engage in talks with other bidders, potentially paving the way for another bid by billionaire brothers Tom and Alec Gores.
* Lawson rises on Icahn stake. Carl Icahn disclosed yesterday that he had acquired an 8.5% stake in Lawson Software (LWSN) as of May 11, and that he's seeking management talks over the company's operations. Lawson's shares have risen 50% over the past year, but Icahn believes the shares are undervalued. News of his purchase helped the stock close +7.7% in yesterday's trading.
* Turning financial reform bill into law. Congressional leaders began selecting the lawmakers that will shepherd the financial reform bill into law. The lawmakers will be tasked with working out the differences between the Senate and House versions of the legislation. The negotiations will begin slowly, and it will still be another week or two before the House names its lineup, but the expected Senate selection suggests banks may have a tougher time than they expected in getting certain business curbs removed from the bill.
* BP underestimated spill impact. BP (BP) CEO Tony Hayward said yesterday that he had underestimated the possible environmental impact of the Gulf of Mexico spill, adding he's "devastated" by the situation. BP is looking into new ways to stem the oil leak should its current efforts fail. Premarket: BP -1.1% (7:00 ET).
* Toyota suspends Lexus sales. Toyota (TM) suspended sales of Lexus LS vehicles in the U.S. while it waits to receive new parts following a worldwide recall of the model. On Friday, Toyota recalled about 3,800 late 2009 and certain 2010 Lexus LS cars in the U.S. due to a steering wheel problem, with 11,500 cars recalled globally.
* Nokia, Yahoo team up. As expected, Nokia (NOK) and Yahoo (YHOO) announced a new strategic alliance yesterday, bringing together two struggling companies in an effort to revitalize both, but the announcement brought little fanfare. Nokia will be the exclusive provider of Yahoo's maps and navigation services, and Yahoo will provide Nokia's mail and chat services. Separately, Yahoo said today that it has acquired Koprol, the Indonesia-based mobile-information firm, as part of its efforts to introduce its brand in emerging countries. Terms of the deal weren't disclosed. Premarket: NOK -5.2% (7:00 ET).
* Dell takes on the iPad. Dell (DELL) unveiled the Streak this morning, a tablet with a 5-inch screen based on Google's (GOOG) Android operating system. The tablet will go on sale in the U.K. in June, and in the U.S. later this summer, as Dell makes its assault on the iPad's (AAPL) newly carved-out territory. Premarket: DELL -1% (7:00 ET).
* Auto loan delinquencies improve. The delinquency rate for auto loan payments dropped markedly in the first quarter, falling to 0.66% from 0.83% in the first quarter of 2009. Similar improvements in credit card and mortgage delinquency rates in the same period suggest the economic recovery is giving consumers the ability to start catching up on their debt payments. Tighter lending standards also contributed to the decrease.
Earnings: Tuesday Before Open
* Trina Solar (TSL): Q1 EPS of $0.66 beats by $0.05. Revenue of $337M (+155%) vs. $330M. (PR)
Earnings: Monday After Close
* Phillips-Van Heusen (PVH): Q1 EPS of $0.83 beats by $0.04. Revenue of $619M (+11.1%) vs. $606M. Shares -3.8% AH. (PR)
Today's Markets
* In Asia, Japan -3.1% to 9460. Hong Kong -3.5% to 18986. China -1.9% to 2623. India -2.7% to 16022.
* In Europe, at midday, London -2.7%. Paris -3.3%. Frankfurt -2.7%.
* Futures: Dow -2.1%. S&P -2.5%. Nasdaq -2.2%. Crude -3.7% to $67.64. Gold -0.5% to $1187.50.
Tuesday's Economic Calendar
* 7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 FHFA Housing Price Index
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
11:15 Fed's Bullard: 'The Road to Economic Recovery Following the Financial Crisis'
5:00 PM ABC Consumer Confidence Index
8:30 PM Fed's Bernanke: 'Central Bank Independence, Transparency, and Accountability'
* Notable earnings before Tuesday's open: MDT, TSL
* Notable earnings after Tuesday's close: TIVO
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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