Wall Street Top Stories: Gold rout costs central banks $560B
Intel net profit slumps 25%. Intel's (INTC) Q1 net profit fell 25% to $2.05B as the company continued to be hurt by the slump in the global PC market. Adjusted EPS of $0.40 slightly missed expectations while revenue slipped 2.5% to $12.58B and also undershot forecasts. However, Intel said it should recover in H2 and probably generate "double-digit revenue growth for the year," boosted by the improving economy and sales of its Haswell chips for ultrabook computers. Shares were -0.5% premarket.
European car sales continue to plunge. European car registrations dropped for the 18th consecutive month in March, slumping 10% to 1.35M vehicles. Germany led the way as sales skidded 17%, while Spain, Italy and France all fell, although the U.K. rose 5.9%. GM's (GM) registrations dropped 13%, Ford's (F) 16% and Toyota's (TM) 17%, although Honda's (HMC) rose 17%. "People have stopped buying cars as consumers are much less confident...especially after the latest decision on Cyprus," says analyst Hans-Peter Wodniok.
Italy seeks to freeze €1.8B of Nomura assets. Italian police said they have frozen €1.8B of assets held by Nomura (NMR) as part of a criminal investigation into possible fraud and usury at Monte dei Paschi di Siena. The Italian bank said Nomura collaborated with former executives to create one of two derivatives in 2008 and 2009 that hid losses of up to €557M. Shares in Nomura, which denied that its assets have been frozen, fell 2.3% in Tokyo.
Top Stock News
Yahoo earnings suffer from display ad drop. Yahoo's (YHOO) shares fell 1.6% premarket after its Q1 revenue slid 7% to $1.14B as sales at its display ad business dropped 11% to $455M even though the total figure for the U.S rose 18.1%. Yahoo CEO Marissa Mayer plans to attract advertisers back by improving the company's core products, and to quickly boost its mobile presence via "smaller-scale acquisitions." So far, the focus on mobile appears to be working, with monthly users rising to 300M from 200M in Q4. In Q1, Yahoo's net profit rose 36% to $390M, boosted by its stake in Alibaba.
Blackstone to raise $4B Asia property fund. Blackstone (BX) reportedly intends to raise a $4B Asian real-estate fund, double the private-equity firm's initial target. The fund would be the largest of its type devoted to Asia, with Blackstone believing that falling property prices have provided good opportunities. Meanwhile, the company has forecast a net annual return of 18% for its $13.3B global fund, which closed its capital-raising last year.
J&J wins lawsuit over hip implant. Johnson & Johnson (JNJ) has won the second lawsuit over its ASR hip implant, with a jury in Chicago ruling that the company didn't inappropriately market the all-metal device, which the plaintiff argued J&J knew was flawed. The verdict follows a decision in LA to award $8.3M against the company. J&J faces 10,000 lawsuits over ASR, including a class-action case in Ohio.
P&G looks to save $2B by delaying payments. Procter & Gamble (PG) is reportedly planning to save up to $2B by extending the time it takes to pay suppliers to 75 days from 45 days. P&G hopes to sweeten the pain by working on an arrangement in which banks would pay the suppliers, possibly early, and then receive the money from P&G later on. The suppliers would be charged a low interest rate until P&G pays up.
Tesco takes £1.2B charge on U.S. ops. Tesco (TSCDF.PK) has taken a £1.2B write-down on its failed Fresh & Easy unit in the U.S. after saying last year that it will exit the country. The British supermarket has also written down U.K. property assets by £804M, and its activities in Poland, the Czech Republic and Turkey by £495M. The charges mean that Tesco's FY 2013 net income plunged to £124M from £2.81B even though revenues edged up 1% to £64.83B. Shares were -3.2% at midday in London.
AbbVie to cut hundreds of sales jobs. AbbVie (ABBV) reportedly intends to lay off hundreds of employee and contract representatives who sell its heart drugs, as the medicines are losing patent protection and face generic rivals. The plans come as AbbVie changes its focus from primary care, such as with cholesterol treatments, to specialty drugs for unmet needs.
Gun-control bill looks set to jam. The Senate is due to vote this afternoon on measures that would expand background checks on gun buyers to include Internet and gun-show purchases. It's not certain that the package has the 60 votes required to gain approval, and even if it does, it could fail in the House, where there is significant opposition. Stocks to watch include Smith & Wesson (SWHC) and Sturm, Ruger (RGR).
Macy's wins short JCP-Martha Stewart ban. New York Appeals Judge Richard Andrias has temporarily blocked J.C. Penney (JCP) from selling "JCP Everyday" products designed by Martha Stewart (MSO). Andrias is due to decide by tomorrow whether to extend the ban while an appeal from Macy's (M) over whether JCP can sell the products is pending. On Friday, a lower-court judge ruled that JCP could do so.
Top Economic & Other News
BOE remains as divided as ever over more QE. The Bank of England's Monetary Policy Committee again voted unanimously to keep interest rates at 0.5% at a meeting earlier this month and 6-3 against more quantitative easing, the minutes show. As in February and March, Governor Mervyn King was among those wanting the bank to increase the program by another £25B to £400B. The pound was -0.3% vs dollar at the time of writing.
Gold rout costs central banks $560B. With holdings of 19% of all gold mined, the plunge in the price of bullion has cost central banks $560B this year, while hedge-fund titan John Paulson has lost at least $1.5B. Paulson began 2013 with $9.5B invested across his hedge funds, with 85% of that in gold share classes. However, Paulson's gold bet is ahead over the long term, while his recent losses have probably been offset by gains in his non-bullion holdings.