Wall Street set to open after Irene fury wanes. The NYSE, Nasdaq and other exchanges plan to open as normal this morning after New York was spared the worst of Tropical Storm Irene. However, trading may be lighter than usual as reduced commuter services could hamper the ability of workers to get to the office. Still, the economic losses are expected to be less than originally thought, as Irene weakened as it hit the East Coast. "We're talking billions of dollars...not tens of billions," said Moody's Mark Zandi. The estimated cost to insurance companies has also been reduced.
Merkel faces trouble over EU rescue fund. The EU bailout fund faces further problems, with the German media reporting that over 20 members of Angela Merkel's coalition plan to vote against a bill to strengthen the rescue package, including those in her own Christian Democrat party. This could force the government to rely on opposition support and so risk its collapse. The vote is due on September 7. Meanwhile, the FT reports that German "bad bank" agencies holding Greek debt haven't yet decided whether to join the country's bond swap. Greece has set a minimum 90% participation rate for private investors.
Bristol-Myers, Pfizer stroke treatment has high prospects. Eliquis, a drug from Bristol-Myers (BMY) and Pfizer (PFE), significantly outperformed half-century-old warfarin in a stroke-prevention study of 18,201 patients. Eliquis reduced the risk of stroke in patients with atrial fibrillation 21%, lowered the incidence of bleeding 31%, and cut the risk of death 11%. Eliquis could generate $4.2B by 2017, analyst Seamus Fernandez estimated, although competitors include Xarelto from Bayer (BAYRY.PK) and Johnson & Johnson (JNJ), which is due for regulatory review in the U.S. next month. Pfizer was +4.3% premarket.
FDA OKs Pfizer's Crizotinib for lung cancer. The FDA has approved Pfizer's (PFE) Crizotinib, which shrinks tumors in lung-cancer patients with a rare genetic abnormality. Crizotinib is the latest treatment using molecular targeting to win rapid approval from the agency, and patients will be identified with a test made by Abbott Laboratories (ABT). Like Eliquis, Crizotinib is expected to prove lucrative, with Pfizer needing new revenue sources given that top-selling product Lipitor is due to lose patent protection in November.
Yoshihiko Noda to be Japan's new prime minister. Finance Minister and fiscal conservative Yoshihiko Noda will replace Naoto Kan as Japan's next prime minister after beating Trade Minister Banri Kaieda in a run-off vote for the leadership of the ruling Democratic Party. With Noda favoring a tax increase to help pay for Japan's post-earthquake reconstruction, Noda was the preferred candidate among investors. However, S&P told Reuters that the impact of his election on the country's credit rating was unclear, due to its chronic political instability.
Obama to choose Alan Krueger to top economic post. Barack Obama today plans to nominate Princeton University's Alan Krueger to replace Austan Goolsbee as Chairman of the White House Council of Economic Advisers. Krueger is a labor economist, and, if confirmed by the Senate, is expected to urge for more-aggressive action to bring down unemployment and long-term joblessness in particular. Krueger already has government experience, including serving as assistant Treasury secretary for economic policy during the first two years of Obama's presidency.
AuRico to buy Northgate for 1.48B. AuRico Gold (AUQ) has agreed to buy Northgate Minerals (NXG) for C$1.46B ($1.48B) in a deal that will create an intermediate gold company. Northgate had a market capitalization of $920M at Friday's close and shares jumped 57% premarket. The combined entity will have five operating gold mines, a sixth that is due to start production in 2012, and three gold development projects in Mexico, Canada, and Australia.
Boeing to decide on new 737. Boeing's (BA) board could decide today to upgrade the 737 with more fuel-efficient engines rather than wait to develop an all-new single-aisle jet, which wouldn’t be ready until the end of the decade. Instead, the refurbished version would enter service mid-decade and around the same time as Airbus' (EADSF.PK) successful A320neo, with Boeing believing that demand for its plane would be similar. The 737 is slated to use the Leap-X engine from CFM, a JV of Safran (SAFRY.PK) and GE (GE).
Greek banks poised to merge. Greece's Eurobank (EGFEF.PK) and Alpha Bank (ALBKY.PK) are set to today announce a merger and a joint capital raising of €1.75B ($2.54B). The deal would create Greece's largest lender with assets of €150B but a market cap of just €2B. EU and Greek officials have pressed for such alliances, believing pairing struggling entities can create one strong institution. Trading in the shares of the companies has been suspended until an announcement is made.
WFC, JPM, Lone Star win AIB portfolio Wells Fargo (WFC), JPMorgan (JPM) and Lone Star have reportedly won final bids for Anglo Irish Bank's $9.65B portfolio of U.S. commercial real-estate loans, with the successful offers averaging about $0.80 on the dollar. JPMorgan and Wells will buy mostly performing debt, and Lone Star subperforming and nonperforming loans. However, Blackstone (BX) lost out despite being a final bidder for some of the portfolio. The auction demonstrates the demand for property in higher-quality locations by private-equity firms and banks looking to increase their assets.
China widens reserve requirements for banks. In a move to further tighten credit and bring down inflation of 6.5%, the People's Bank of China is widening the asset base banks must keep in reserve to include customers’ margin deposits. With reserve requirements at 21.5%, economists estimate the action could drain up to 900B yuan ($140B) from the system over a six-month period.
Sino-Forest CEO quits. Following the drama on Friday in which Canadian regulators published and later rescinded an order for the resignation of Sino-Forest's (SNOFF.PK) senior management, company CEO Allen Chan has stepped down and three other employees have been temporarily suspended. Judson Martin, the board's vice chairman, was named CEO. Trading in Sino-Forest's shares was halted in Toronto on Friday but lost 71% on the pink sheets. Canada's regulators are investigating the company for fraud following Muddy Waters' allegations it exaggerated the size of its forest holdings in China.
Today's Markets:
In Asia, Japan +0.6% to 8851. Hong Kong +1.4% to 19865. China -1.4% to 2576. India +3.6% to 16416.
In Europe, at midday, London closed. Paris +1.9%. Frankfurt +1.4%.
Futures at 7:00: Dow +0.8%. S&P +1.1%. Nasdaq +0.8%. Crude +0.3% to $85.59. Gold +1.1% to $1817.10.
Monday's economic calendar:
8:30 Personal Income and Outlays
8:30 Chicago Fed Midwest Manufacturing Index
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Outlook
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