Standard and Poor's Announces S&P 500 Shuffle
China raised the reserve requirement ratio (the amount of money banks must keep on reserve). This comes ahead of that country's November CPI data, due to be released tomorrow, with widespread speculation it could be over 5 percent and the PBOC will be raising interest rates. CPI over 5 percent would be a big jump from 4.4 percent in October. The Street is already expecteing a rate hike of about 25 basis points.
They did this before: CPI hit 8.7 percent in early 2008, and China aggressively raised rates. Expect more rate hikes in 2011.
1) United Technologies provided guidance for 2011 that was moderately below consensus: $5.05-$5.35 (midpoint is $5.20; consensus is $5.30). Organic revenue growth of 3 to 5 percent. The problem: reductions in defense spending are hurting Pratt & Whitney (about a quarter of revenues), though commercial aircraft is improving.
2) Tenet Healthcare has rejected a takeover bid from Community Health Systems : $6 a share in cash and stock, about $3.3 billion, plus an additional $4 billion in debt.
3) Well, it WAS a bargain: biomedical testing company Beckman Coulter is for sale, according to the WSJ, and could fetch $5 billion. The market cap was $4 billion. That was before the story. Now the stock is up 25 percent pre-open. The current market cap at the open: $5 billion.
4) Standard and Poor's announced changes to the S&P 500. In: Netflix , F5 Networks , and Newfield Exploration , and Cablevision , which is replacing King Pharmaceuticals , being bought by Pfizer . All are trading up better than 3 percent pre-open.
Out: New York Times , Office Depot , and Eastman Kodak . Why booted out? Because these are essentially mid-caps: all three have market capitalizations below $1.5 billion.
5) Chinese IPO Mania Day 3: what is it with Youku , up another 14 percent pre-open? Priced at: $12.80. Opened at: $27.00 on Tuesday. Trading at $42.70 this morning. Not surprisingly, the underwriters of its IPO excercised their over-allotment option to purchase an additional 2,377,155 american dispositary shares.
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