N AMERICAN MORNING BRIEFING:Stks Seen Down;Finance Deal Nears

25th Jun 2010 11:32

DJIA Futures 10059.50 -53.50 -0.50% S&P 500 Futures 1065.85 -4.65 -0.40% Nasdaq Futures 1838.13 -11.38 -0.60% Above are as of 0600 ET FTSE 100 5054.07 -46.16 -0.90% Xetra DAX 6076.88 -38.60 -0.60% CAC40 3535.75 -19.61 -0.60% Above are as of 0600 ET Nikkei 225 9737.48 -190.80 -1.90% Hang Seng 20690.79 -42.70 -0.20% Above are closing prices SNAPSHOT: -Stocks seen lower; Treasurys higher; dollar up; Nymex crudelower at $76.03; gold lower at $1243.10; Conference Panel Agrees To Compromise On New Financial Rules -Watch for: Final reading of 1Q GDP at 0830 ET; University of Michigan confidence at 0955 ET. OPENING CALL: Stocks are likely to suffer opening losses as a weak session in Europe weighs on sentiment amid renewed fears over Euro-zone debt. "Futures are reacting to weakness in Europe. We're looking at a fairly poor and subdued finish to the week," said David Jones at IG Index in London. A slew of bad news over the past week has knocked sentiment and made investors jumpy, he said and further bad news could cause an exaggerated reaction, noting that GDP data is due at 0830 ET. EQUITIES: BP (BP) said Friday it has spent $2.35 billion to date to clean up, contain and payout claims and grants to the states on the Gulf of Mexico that have been impacted by the U.S.'s largest oil spill. This compares to $2 billion spent to date as of Monday this week. BP shares fell another 6% in London after the announcement. Boeing (BA) on Thursday said it had temporarily grounded its fleet of 787 Dreamliner test aircraft after it had discovered a manufacturing problem in the horizontal stabilizer that attaches to the rear of the aircraft, according to a published report. The company said it expects the manufacturing flaw won't alter its Dreamliner flight test schedule nor would it further delay the 787's first delivery to initial customer All Nippon Airways Co. Boeing also said the first plane is still on track to be delivered by the end of this year. At 0630 in Frankfurt, Boeing traded down 1.65%. WellPoint (WLP), the largest U.S. managed-care concern by membership, made it harder last year for its members to gain approval for use of the Boniva osteoporosis drug after internal research linked it to higher fracture rates, lower patient compliance and higher total costs of care than two other drugs, a WellPoint executive said Thursday. WellPoint, which conducts its own research into the comparative effectiveness of various treatments, studied 26,000 members on osteoporosis drugs. The health insurer sought to compare Boniva, which is marketed by Roche Holding AG's (RHHBY) Genentech and GlaxoSmithKline PLC (GSK), with two others in the same class. The others were Actonel, marketed by Sanofi-Aventis SA (SNY) and Warner Chilcott PLC (WCRX), and Merck & Co.'s (MRK) Fosamax. From randomized clinical trials, it appeared the three drugs should be equivalent, yet WellPoint's data on results with its members found differences with Boniva, said the company's chief pharmacy officer, Brian Sweet, who was participating in an industry symposium on comparative-effectiveness research. As a result, WellPoint requires that members of its commercial health plans with osteoporosis try other drugs in the class before they can be approved for Boniva. Johnson & Johnson (JNJ) said it doesn't expect to resume before the end of this year making children's Tylenol and other medicines at the Fort Washington plant that suspended production amid manufacturing problems that sparked a recall. J&J's McNeil Consumer Healthcare unit halted work at the plant in late April, after learning that certain over-the-counter children's medicines could contain tiny metallic particles. The plant had made a range of products for kids and adults, including Tylenol, Benadryl, St. Joseph aspirin, Motrin and Zyrtec. BONDS: Treasurys were higher in London as equities shed initial gains. The debt troubles in the euro zone remained in focus, with the cost of insuring Greek sovereign debt against default rising to a new record. There was also caution ahead of the G20 meeting in Toronto. The 2-year note was up at 99-31+/32, to yield 0.633%; the 10-year was up at 104-10/32, to yield 3.103%; and the 30-year bond was up at 105-02/32 to yield 4.080%. Corporate bonds: European corporate credit indexes widened in early European trading hours as sovereign debt concerns returned to the fore, denting market sentiment. FOREX: An early attempt by the euro to bounce failed Friday, pushing the single currency back down against the dollar. The news that China had allowed the yuan to rise at its fixing to the highest level since the early 1980s appeared to provide some comfort. By 0515 ET, the dollar was up in Europe at Y89.59, while the euro was down at $1.2276 and the pound had fallen to $1.4924. COMMODITIES: Oil futures were under pressure, after European equities turned negative, and there was a sharp fall in BP stock. Spot gold was holding firm again but analysts believe the market may be able to push higher, with the latest profit-taking correction thought to now be over. =======TODAY'S CALENDAR======= ET PERIOD 0830 1Q 3rd estimate GDP 1000 Jun Thomson Reuters/University of Michigan Survey of Consumers N/A Annual Industrial Production & Capacity Utilization annual revision ============================== OTHER TOP STORIES OF THE DAY: WSJ: CONFERENCE PANEL AGREES TO COMPROMISE ON NEW FINANCIAL RULES After more than 20 hours of continuous wrangling, Congressional Democrats and White House officials reached agreement on the final shape of legislation that would transform financial regulation, avoiding last-minute defections among New York lawmakers that had threatened to upend the bill. EU'S BARROSO: NO MORE ROOM FOR DEFICIT SPENDING Europe is putting the need to reduce budget deficits at the top of the agenda because it has no more room for them, EU Commission president Jose Manuel Barroso said Thursday. US REP FRANK: $19B FEE WILL BE ON LARGE FINANCIAL FIRMS U.S. lawmakers plan to collect roughly $19 billion from the nation's largest financial institutions to pay for the cost of financial overhaul legislation, a top House Democrat said Thursday evening. MORTGAGE RATES FALL TO A RECORD LOW, AND MAY BE HEADED LOWER Mortgages rates last week fell to their lowest point in at least four decades, and market forces are pushing them even lower. MOODY'S: NY STATE GOVERNMENT SHUTDOWN WON'T HURT MOST RATINGS A shutdown of the New York state government would have little impact on credit ratings of the state, local governments and other entities, depending on how long it was shut and the budget cuts that could follow, according to Moody's Investors Service. US SENATORS ASK TRANSOCEAN TO DELAY DIVIDEND PAYMENT About two dozen U.S. senators on Thursday asked Transocean Ltd. (RIG) to postpone making a dividend payment "until the extent of your company's responsibility" for a two-month-old oil spill in the Gulf of Mexico has been evaluated. ICI: MONEY-MARKET ASSETS ROSE $11.69 BLN IN LATEST WEEK Assets in money-market funds grew $11.69 billion in the latest week, as strength from institutional funds more than offset outflows for retail funds, according to the Investment Company Institute. AIG'S CEO AT ODDS WITH CHAIRMAN OVER FAILURE TO SELL AIA -FT American International Group Inc.'s (AIG) chief executive and chairman are at odds over the company's failure to sell its Asian life insurance unit, AIA, to Prudential PLC (PRU.LN, PUK), the Financial Times reports Thursday, citing people close to the situation. MANULIFE WOULD CONSIDER AIA IF PRICE IS RIGHT, SPOKESMAN SAYS Manulife Financial Corp. (MFC), Canada's biggest life insurer, would be interested in buying American International Group Inc.'s (AIG) AIA Group Ltd. to expand its insurance business in Asia, at the right price, a company spokesman said. SANTANDER TO BUY $3.2B CITI AUTO-LOAN PORTFOLIO Banco Santander SA (STD, SAN.MC) and Citigroup Inc. (C) agreed to a deal Thursday under which the Spanish bank will buy a $3.2 billion automobile-loan portfolio from Citi and service another one worth $7.2 billion. WSJ: LIONS GATE, MGM HOLD DEAL TALKS Lions Gate Entertainment Inc. is holding talks with Metro-Goldwyn-Mayer Inc. about a possible merger, but no offers have been made and a deal between the companies is unlikely, according to two people familiar with the situation. EU'S BARROSO: NO MORE ROOM FOR DEFICIT SPENDING Europe is putting the need to reduce budget deficits at the top of the agenda because it has no more room for them, EU Commission president Jose Manuel Barroso said Thursday. JAPAN CPI DOWN FOR 15TH STRAIGHT MONTH;DEFLATION LINGERS Japan's consumer prices continued their long stretch of declines in May, falling for the 15th straight month, providing a reality check to any suggestion that an end to the nation's deflationary problem is just around the corner. WSJ: INDIA APPROVES NEW COMPENSATION FOR BHOPAL VICTIMS The Indian government late Thursday approved measures recommended by a group of ministers to enhance compensation for victims of the 1984 Bhopal gas tragedy, pursue an acknowledgment of liability from Dow Chemical Co. and pressure the U.S. to extradite former Union Carbide Chairman Warren Anderson. -By Sarah Kent, Dow Jones Newswires; 4420-7842-9376; [email protected] (MORE TO FOLLOW) Dow Jones Newswires June 25, 2010 06:32 ET (10:32 GMT)