The rest of the world is down, commodities are down, but U.S. futures are up. Most traders are just shrugging their shoulders and attributing this to end of month trading.
Housing: it's not getting better. Home builder Lennar reported earnings of $0.14, better than the loss of $0.05 expected. That's the good news. The bad news is that the better than expected resuls were driven by a legal settlement and a gain from extinguising debt from a joint venture. What matters--unit orders--were down 12 percent year-over-year. The company backlog--a rough indicator of future sales--were also down 12 percent. Blame the usual suspects--weather, difficulty qualifying for mortgages, concerns about lower prices, perceived better value for existing homes.
1) Halliburton falls 2 percent after warning that its Q1 earnings would be "severely" hurt by the recent unrest in the Middle East and North Africa. So far, the oil services firm expects a 3 to 4 cent negative impact on earnings, but warns additional charges may necessary because of sanctions imposed on Libya.
2) Similar to Limited Brands (LTD) last week, Home Depot (HD) is issuing debt in part to fund stock buybacks. The home improvement retailer announced it will issue $2 billion in senior notes to finance both the refinancing of $1 billion in senior notes that were due last month and the repurchase of a new $1 billion stock buyback program. I guess this makes some sense, with rates so low. If the return on equity (ROE) is higher than the financing terms, than it is value accretive.
3) Hertz Global (HTZ) falls 6 percent on heavy volume after revealing that its 3 biggest shareholders have slashed their ownership stake by 24 percent. The sale of 50 million shares amongst Bank of America Merrill Lynch, Clayton, Dubilier & Rice, and The Carlyle Group will reduce their ownership from a major holding to a 39 percent stake.
4) IPO pricing tonight: Private equity firm Apollo Global Management (APO) should price tonight for trading tomorrow morning. 26.25 million shares at a price talk of $17-$19. They are not just in private equity, they are also in real estate, with investments in AMC Entertainment, Caesars Entertainment, and Jacuzzi. Later in the week vitamin seller GNC will also price its IPO.
5) General Electric's big investment in energy. The Dow component's energy division agreed to acquire a majority stake of French power conversion engineering firm Converteam for $3.2 billion. The deal gives GE a 90 percent stake initially, but it will acquire the remaining 10 percent from the Converteam management team over the next 2 to 5 years at a price of no more than $480 million.
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