N AMERICAN MORNING BRIEFING: Stocks Seen Little Changed

11th Jun 2010 11:25

DJIA Futures 10165.5 +10.5 +0.1% S&P 500 Futures 1082.3 +2.5 +0.2% Nasdaq Futures 1825.1 +4.0 +0.2% Above are as of 0615 ET FTSE 100 5175.2 +42.7 +0.8% Xetra DAX 6065.6 +9.0 +0.2% CAC40 3544.8 +28.1 +0.8% Above are as of 0615 ET Nikkei 225 9705.3 +162.6 +1.7% Hang Seng 19872.4 +239.6 +1.2% Above are closing prices SNAPSHOT: -Stocks to edge higher; Treasurys higher; dollar higher; Nymex crude lower at $74.88; gold higher at $1220.10. -Watch for: retail & food sales at 0830 ET; Reuters/University Of Michigan consumer sentiment survey at 0955 ET; Fed speakers OPENING CALL: Stocks are unlikely to make much headway at the open as traders pause for breath following Thursday's sharp rally. David Jones at IG Index in London said retail sales figures before the open would be closely eyed and would set the tone for Friday's session. "There's maybe the potential for a shock here," he said. "A weak number would raise all the old concerns about just how solid the economic recovery is. But if they come in around expectations or slightly above, we could be in for a mildly positive close to the week." EQUITIES: The legal onslaught versus BP (BP) over the Gulf of Mexico oil spill is entering a new stage, with lawyers representing U.S. pension funds and other institutional investors lining up to sue the company's management and directors over the plunge in the value of their investments. At least three so-called derivative lawsuits have been filed on behalf of the company's shareholders in recent weeks in state courts. Meanwhile, BP is considering deferring or reducing its second-quarter dividend to help quell the political uproar in America, as the U.S. government raised its estimate of the oil gushing out of the company's crippled well in the Gulf of Mexico. JPMorgan Chase's (JPM) investment bank faces reduced client activity in the second quarter although it remains too early to determine if the slowing will have a bottom line impact on second-quarter results, the chief executive of JPMorgan's investment bank said Friday. "People are a little more wary and that could have an impact on Q2," investment bank CEO Jes Staley said on the sidelines of a banking conference in Vienna. Staley likewise said it was too early to calculate the impact of pending derivatives regulation on JPMorgan, which is a global leader in the derivatives business. The burden on revenue that could occur by moving to a central clearing model for derivatives could potentially be more than offset by freeing up more bank capital, Staley said. JPM was up 1.9% in Frankfurt at 0538 ET. Drug makers' attempts to find treatments for Alzheimer's disease have produced scant results and a long string of busts. Now, a group of major pharmaceutical companies will share pooled data from failed clinical trials in an attempt to figure out what is going wrong in the studies and what can be done to improve drug development. In the first wave, data from 4,000 patients across 11 failed Alzheimer's-drug clinical trials from Johnson & Johnson (JNJ), GlaxoSmithKline (GSK), AstraZeneca (AZN), Sanofi-Aventis (SNY) and Abbott Laboratories (ABT) will be publicly available as of Friday. J&J shares were down 0.4% in Frankfurt at 0546 ET, while Abbott was up 1.7%. TPG late Thursday said it was buying software provider Vertafore for $1.4 billion, the latest in a flurry of transactions in which companies are passed from one private-equity firm to another. The sellers are private-equity shops Hellman & Friedman and JMI Equity, which have owned Vertafore since 2004. The FBI has opened an investigation into a possible security breach of AT&T's (T) website that exposed the email addresses of some owners of Apple (AAPL) iPad devices. "The FBI is aware of these possible computer intrusions and has opened an investigation," said Katherine Schweit, an FBI spokeswoman. Ms. Schweit said the FBI began the investigation Thursday but wouldn't comment on what the bureau is looking at. "It's very early in the investigation," she added. AT&T was up 0.5% in Frankfurt at 0539 ET, while Apple was up 1.6%. American Airlines parent AMR (AMR) named a top marketing executive to run its regional airline American Eagle, as the company reiterated it is examining a spinoff of the division. Daniel P. Garton, who has been American's executive vice president of marketing for the last eight years, will return to American Eagle as chief executive. During his previous stint at American Eagle, he orchestrated the airline's transition to a single carrier from four. AMR shares were up 0.8% in Frankfurt at 0609 ET. Dell's (DELL) founder and chief executive, Michael Dell, has emerged as an additional target of the SEC in a long-running investigation that has broadened to focus on the company's dealings with chip giant Intel (INTC). The computer maker said late Thursday that it is in talks with the SEC to settle allegations related to its accounting and other issues, including aspects of its commercial relationship with Intel. The company said it will take a $100 million reserve to cover expected costs of settling the case. Dell shares were down 0.9% in Frankfurt at 0546 ET. BONDS: Treasurys were up in London as the euro started to slip and equities come off their highs. A surge in equities had triggered a selloff in Treasurys Thursday, so the pickup in yields also attracted some buying. The Treasury concluded $70 billion of bond sales this week, with a strong bid-to-cover ratio at a sale of 30-year bonds Thursday. "It looks like demand is healthy even at these levels, as investors withhold their optimism over how much good could come out of the Euro Financial Stability Facility," said BNP Paribas. The 2-year note was up at 99-31/32, to yield 0.766%, the 10-year was up at 102-24+/32, to yield 3.293%, while the 30-year bond was higher at 102-29+/32 to yield 4.202%. Corporate bonds: European corporate credit markets extended Thursday's gains, with the Markit iTraxx indexes moving tighter as a solid overnight session on Wall Street offered considerable support at the open. FOREX: The euro, the pound and equity markets all edged down slightly as general sentiment failed to improve further. The more negative mood emerged despite another flurry of strong economic data from China, including a 18.5% rise in retail sales in the year to May. However, the market may have been rattled by other figures showing that consumer prices are also rising faster than expected, with inflation up at 3.1% last month. By 0530 ET, the dollar was up in Europe at Y91.60, while the euro was down at $1.2118 and the pound had fallen to $1.4675. COMMODITIES: Crude futures were slightly lower, as traders sold off contracts to lock in profits after oil prices climbed overnight to a four-week high. Gold rose on some mild dip buying after two days of losses but volume was thin and there were few cues to offer near-term direction. =======TODAY'S CALENDAR======= ET PERIOD 0820 Philadelphia Fed Pres Plosser speaks on 'Challenges for our Econ Recovery and The Fed's Role' in Altoona 0830 May Retail & Food Sales 0955 Jun Reuters/University Of Michigan Consumer Sentiment Survey 1000 Apr Business Inventories N/A Minneapolis Fed Pres Kocherlakota speaks on 'Entrepreneurship and the Economy' in Minneapolis ============================== OTHER TOP STORIES OF THE DAY: WSJ: U.S. FIRMS BUILD UP RECORD CASH PILES U.S. companies are holding more cash in the bank than at any point on record, underscoring persistent worries about financial markets and about the sustainability of the economic recovery. WSJ: SIMON: 'WE HAVE MOVED ON' FROM PURSUIT OF GENERAL GROWTH Simon Property Group Inc. (SPG) Chairman and Chief Executive Officer David Simon on Thursday dashed any lingering hopes on Wall Street that the largest U.S. mall owner will make another bid for bankrupt rival General Growth Properties Inc. (GGP). NY FINANCIAL ADVISER STARR INDICTED ON FRAUD, OTHER CHARGES Federal prosecutors brought new charges Thursday against New York financial adviser Kenneth Starr, accusing him of carrying out a much larger fraud scheme in which nearly $60 million in investor funds were misappropriated. WSJ: UNUSUAL PAIR: INVESTORS BUY GOLD BUT ALSO US BONDS Investors have piled into gold and Treasury bonds, seeking havens. History suggests only one of those bets might end up paying off. Is this time different? IRAN SAYS UN SANCTIONS WILL HAVE NO EFFECT Iranian President Mahmoud Ahmadinejad lashed out Friday at the U.N. Security Council as a "tool of dictatorship" and said new U.N. sanctions over Tehran's nuclear program "will have no effect." WSJ: US SHIFTS TOWARD SUPPORT FOR IRAN'S DISSIDENTS The U.S. has accelerated its effort to provide dissidents in Iran with computer hardware and software to evade government censors. But it's a shift that many activists say is insufficient to bring political change in Tehran. CHINA MAY CPI UP OVER 3% BUT RATES MAY NOT RISE SOON Concerns over inflation in China are intensifying with consumer prices up more than 3% in May, just as many companies announce wage increases, but many economists and government officials still think inflationary pressures are likely to abate in coming months. JAPAN ECON MINISTER: WANT TO SET MID-TERM FISCAL FRAMEWORK BY JUNE 22 LATEST Japan's new economy and national strategy minister Satoshi Arai said that he plans to set a mid-term fiscal framework by June 22 at the latest. CHINA OFFICIAL: EURO-ZONE DEBT CRISIS HELPS CHINA REDUCE INFLATION PRESSURE The sovereign debt crisis in Europe helps China reduce inflation pressure, National Bureau of Statistics spokesman Sheng Laiyun said. -By David Crawshaw, Dow Jones Newswires; +44 207 842 9252; [email protected] (MORE TO FOLLOW) Dow Jones Newswires June 11, 2010 06:25 ET (10:25 GMT)