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Good News for Europe Banks

Stock futures dropped on ADP bummer report. Futures were up all morning on good news from Europe, but S&P futures dropped 6 points in seconds when the ADP said only 13,000 private sector jobs were created in June, well below expectations of about 60,000 jobs.

We are expecting significantly more private sector gains from the nonfarm payroll report on Friday to offset the public sector census workers that are being laid off.

Europe:

No, thanks, I can get the money in the private market. The European Central Bank (ECB) said it will lend banks 131.9 billion euros ($161.5 billion) for three months. European banks needed to repay 442 billion euros in 12-month funds by tomorrow.

That means only 30 percent of the 1-year loans were rolled into the 3-month loans, much less than expected. It's good news, since it means banks were able to access the cheaper (roughly 0.76 percent) private loan market.

Elsewhere:

1) With 30-year fixed rate mortgages down again this week (to 4.67 percent) it's not surprising that refinancing applications rose by 12.6 percent, but applications to buy a home FELL by 3.3 percent (just above 13 year lows).

2) General Mills Q4 earnings were inline with estimates as margins remained flat from the year-ago quarter. Sales fell slightly less than expected as steady volumes offset price declines.

Guidance for the year of $2.46-$2.48 falls a bit shy of Street expectations of $2.50.

3) Monsanto is down fractionally to a 3.5-year low despite reporting better-than-expected Q3 earnings ($0.81 vs. $0.79 consensus). However, top line results were disappointing as seed sales were slightly below estimates and lower herbicide prices overshadowed stronger volumes.

Guidance for the full-year is reaffirmed at $2.40-$2.60, in line with the consensus forecast of $2.49.

4) Argon ST soars 40 percent after Boeing announced it was acquiring the defense equipment maker for $775 million. The deal will give Argon ST shareholders $34.50 per share and will enhance the Boeing's ability to develop sensors and networks for the military. The transaction is expected to close in the third quarter.

5) Joseph Cassano, the man who ran AIG's Financial Products Group, is testifying today in front of the Financial Crisis Inquiry Commission. Expect a less than friendly encounter.

Here's a link to his testimony. (Or Watch It Live Here on our Web site.)

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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