- Eurozone comes through with Greek aid plan. Eurozone countries agreed on a bailout plan for Greece that would be two-thirds funded by government loans and one-third funded by the IMF, and would only be initiated as a last resort. European Central Bank President Jean-Claude Trichet initially called the proposed IMF involvement "very, very bad," but later endorsed the plan and said what he had meant earlier was that he "wanted to preserve the responsibility of the governments of the euro area." The exact sum of the bailout plan wasn't announced, but diplomats in recent weeks have consistently spoken of figures upwards of €20B ($27B). Greek bonds have tightened significantly since news of the deal was released and the euro, which weakened initially, is now pulling up from a ten-month low against the dollar. Euro +0.75% against the dollar (7:00 ET).
- New plan for housing policy. The White House is expected to update its housing policy later this morning. Complete details aren't yet available, but the plan will likely include the following measures: Mortgage servicers will be required to completely underwrite each loan; principal reduction will be optional, but will be the first step servicers must take to reduce a borrower's monthly mortgage payment ratio; unemployed borrowers will receive temporary help; TARP money will be used to help fund the plan; the changes will take effect in September. The update comes as delinquent mortgages continue to rise, and amid criticism by TARP watchdog Neil Barofsky that current foreclosure prevention efforts are falling short.
- Ambac gets slammed, future uncertain. Struggling bond insurer Ambac (ABK) plunged nearly 17% yesterday, following its announcement that it's open to a prepackaged bankruptcy and is handing over control of troubled mortgage contracts totaling around $35B to its state regulator. The Wisconsin regulator said clients with claims on the home-loan bonds should get around 25 cents on the dollar, noting its actions are meant to protect muni bondholders and to encourage hedge funds, pension plans and other investors to negotiate. Investors are less sure about the regulatory action, worried that policyholders could end up seeing different recovery rates from one another, as well as from the group of banks involved. Regulators also said yesterday that payments on credit default swaps insuring the policies of Ambac's insurance arm may need to be paid out. ABK -6% premarket (7:00 ET).
- Major banks accused of muni bid-rigging. More than a dozen Wall Street firms, including JPMorgan (JPM), UBS (UBS) and Lehman Brothers (LEHMQ.PK), have been accused of participating in a conspiracy to pay below-market interest rates to U.S. state and local governments on their investments. According to documents filed in a Justice Department antitrust case, the previously unidentified "co-conspirators" have not been charged with wrongdoing. However, the court records provide the broadest look to date at alleged collusion in the $2.8T municipal securities market.
- Gores may go for Polycom merger. Private equity firm The Gores Group is said to be considering a merger of its Siemens Enterprise Communications unit with videoconferencing firm Polycom (PLCM). After talks between Polycom and Apax Partners fell through earlier this week, Gores CEO Robert Hagerty reportedly sent a letter asking for a meeting to discuss a potential merger.
- RBS details share buyback. Royal Bank of Scotland (RBS) disclosed details last night of its plan to repurchase up to £7.7B ($11.4B) of debt and preference shares, a move that will likely raise the quality of the bank's core capital. The bank admitted that the plan was more conservative than some bondholders had expected, but called it a sensible compromise given "the changing shape of regulation and the changing dynamic around stress tests." Another restructuring is possible later in the year. RBS +0.4% premarket (6:00 ET).
- DoJ probes pension funds on pay-to-play. The Justice Department is said to be investigating public pension funds for possible wrongdoing in pay-to-play schemes. Investigators are trying to establish whether illegal payments were made to influence where public pension fund money is invested. Targets of the probe include Calpers, the nation's largest public pension fund by assets. New York Attorney General Andrew Cuomo and the SEC are conducting similar investigations.
- GM to repay more funds. General Motors plans to make another $1.2B payment by the end of the month to the U.S. and Canadian governments. GM made a $1.2B payment in December, and intends to repay the full $6.7B in loans from the U.S. by June.
- One step closer to open skies. The U.S. and the European Union drafted an extension to their "Open Skies" agreement that moves closer to allowing foreign ownership of airlines, but stops short of lifting ownership limits. EU companies are currently limited to 25% stakes in U.S. carriers, while American operators can control 49% of EU airlines. The International Air Transport Association said the accord is a step in the right direction but doesn't go far enough.
- China may allow yuan to float. China may be softening its position on the yuan, as an adviser to the country’s central bank suggests China could allow the yuan to trade more freely against the dollar as long as the move is made gradually. "China may resume a managed float of its exchange rate, particularly if the uncertainty of the overall post-crisis economic situation diminishes," wrote adviser Fan Gang in an op-ed published today. However, "if the adjustment came abruptly, Chinese companies would suffer a sudden loss of competitiveness.”
- Accenture (ACN): Q2 2010 EPS of $0.60 misses by $0.01. Revenue of $5.18B (-1.7%) vs. $5.21B. Guides Q3 revenue in-line, lowers FY10 EPS below consensus. Shares -1.5% AH. (PR, earnings call transcript)
- Oracle (ORCL): Q3 2010 EPS of $0.38, in-line. Revenue of $6.4B (+17.4%) vs. $6.35B. GAAP new software license revenue +13% to $1.7B, license updates and product support revenue +13% to $3.3B. Shares -0.7% AH. (PR, earnings call transcript)
- Tibco Software (TIBX): Q1 2010 EPS of $0.12 beats by $0.02. Revenue of $155M (+16.6%) vs. $148M. Shares +3.7% AH. (PR, earnings call transcript)
- Wet Seal (WTSLA): Q4 EPS of $0.79 beats by $0.71, may not be comparable. Revenue of $151M (-2.5%) vs. $152M. Guides Q1 revenue above consensus. Shares +4.1% AH. (PR)
- In Asia, Nikkei +1.6% to 10996. Hang Seng +1.3% to 21053. Shanghai +1.3% to 3060. BSE +0.5% to 17645.
- In Europe at midday, London -0.3% to 5711. Paris -0.3% to 3986. Frankfurt -0.3% to 6116.
- Futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.5% to $80.92. Gold +0.4% to $1097.30.
- 8:30 Q4 GDP, Final
9:00 Fed: Forum on Monetary Policy
9:55 Reuters/UofM Consumer Sentiment
11:30 Fed's Warsh: Maintaining Central Bank Independence
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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