>>> Mead Johnson Nutrition Profit warning yest. after close - 5.25% after Hours

--> Watch Danone today - stock indicated lower in pre-market -2%

Mead Johnson Nutrition sees Q2 adjusted EPS of $0.76 vs $0.89 Capital IQ Consensus Estimate; lowers FY15 adjusted EPS and rev guidance

Co announced that it is revising full-year 2015 financial guidance based on preliminary second quarter sales results.
  • Preliminary second quarter constant dollar sales were 3% below the prior year quarter. Including the impact of foreign currency, preliminary reported sales were 7% below the prior year quarter.
    • Strong sales of the recently launched imported products to China were insufficient to fully offset declines in the China based manufactured products. Hong Kong cross-border sales stabilized, but were below prior year levels.
    • Slowing emerging market growth and dairy costs approaching five-year lows drove competitive promotional price discounting across several MJN markets in Latin America and Asia, most notably in China.
  • Preliminary non-GAAP EPS for the second quarter of 2015 is expected to be $0.76 (vs $0.89 Capital IQ Consensus Estimate), impacted by the sales decline and increased Advertising & Promotion expenditure.
  • Annual sales growth is expected to be in the range of 0% to 2% on a constant-dollar basis, previously estimated at 7%. Including the estimated impact of foreign exchange, reported sales are expected to be 2% to 4% below the prior year (calcs to ~$4.23-4.32 bln vs $4.45 Capital IQ Consensus Estimate), previously estimated to be 2% above the prior year.
  • Full-year non-GAAP EPS is expected to be in the range of $3.63 to $3.78 (vs $3.94 Capital IQ Consensus Estimate), previously estimated at $3.90 to $4.00.

>>> Europe : Brokers Upgrades & Downgrades - 15th of July 2015

>>> Up
*ANGLO AMERICAN RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*KLOECKNER RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*LONMIN RAISED TO NEUTRAL VS SELL AT GOLDMAN
*TIETO RAISED TO OVERWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*TRAVIS PERKINS RAISED TO BUY VS HOLD AT BERENBERG
*WOLSELEY RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN

>>> Down
*ALENT CUT TO NEUTRAL VS BUY AT UBS
*ATOS CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*BANCO POPOLARE CUT TO UNDERWEIGHT AT MORGAN STANLEY
*JULIUS BAER CUT TO NEUTRAL VS BUY AT UBS
*PREMIER FARNELL CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*TRAVIS PERKINS RAISED TO BUY VS HOLD AT BERENBERG
*SOFTWARE AG CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*TEMENOS CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*VODAFONE CUT TO NEUTRAL FROM BUY AT GOLDMAN SACHS, REMOVE FROM PAN EUROPE BUY LIST (Note attached)

>>> PT Changes
*ANGLO AMERICAN PT CUT TO 780p from 950p AT BARCLAYS (Note attached)
*ANTOFAGASTA PT CUT TO 660p from 735p AT BARCLAYS (Note attached)
*GLENCORE PT CUT TO 300p from 350p AT BARCLAYS (Note attached)
*HAYS PT RAISEDT TO 150p FROM 125p AT DEUTSCHE BANK (Note attacheD)
*RANDASTD PT RAISED TO E33 FROM E31 AT DEUTSCHE BANK (Note attacheD)
*VEDANTA PT CUT TO 565p from 650p AT BARCLAYS (Note attached)

>>> Initiation
*ABERTIS RATED NEW NEUTRAL AT NOMURA
*ATLANTIA RATED NEW NEUTRAL AT NOMURA
*BMW RATED NEW UNDERPERFORM AT CREDIT SUISSE, PT EU94
*CLARKSON RATED NEW BUY AT NOMURA
*DAIMLER RATED NEW NEUTRAL AT CREDIT SUISSE, PT EU86
*DP WORLD RATED NEW BUY AT NOMURA
*DSV RATED NEW BUY AT NOMURA
*DEUTSCHE POST RATED NEW NEUTRAL AT NOMURA
*FCA RATED NEW OUTPERFORM AT CREDIT SUISSE, PT EU18.3
*HHLA RATED NEW REDUCE AT NOMURA
*JUST EAT REINSTATED CONVICTION BUY AT GOLDMAN, PT 560P
*KUEHNE + NAGEL RATED NEW NEUTRAL AT NOMURA
*MAERSK RATED NEW REDUCE AT NOMURA
*MAERSK ASSUMED BUY AT JEFFERIES; WAS UNDERPERFORM RATED
*PANALPINA RATED NEW NEUTRAL AT NOMURA
*PEUGEOT RATED NEW NEUTRAL AT CREDIT SUISSE, PT EU19.1
*RENAULT RATED NEW OUTPERFORM AT CREDIT SUISSE, PT EU116
*VINCI RATED NEW BUY AT NOMURA
*VOLKSWAGEN RATED NEW UNDERPERFORM AT CREDIT SUISSE, PT EU200

>>> Call
>> Stock
*JUST EAT REINSTATED CONVICTION BUY AT GOLDMAN, PT 560P
*TELECOM ITALIA EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY
*WOLSELEY ADDED TO JPMORGAN ANALYST FOCUS LIST
>> Sector
*EUROPEAN OEM SECTOR STARTED WITH CAUTIOUS VIEW AT CREDIT SUISSE

>>> What to look at today - 15th of July

Dow+0.42% S&P+0.46% Nasdaq+0.66% Russell+0.64% VIX 13.30 (-4.32%)
US Market Closed higher for a 4th conscutive day, closed above its 50d MA. Equity indices began near their flat lines after overnight reports from Vienna revealed that P5+1 negotiators agreed to a nuclear deal with Iranian representatives. The news had little impact on the market, but crude oil was down about 2.0% overnight amid expectations that global oil supplies will increase once Iran begins selling its oil on the open market. However, an intraday rebound resulted in crude oil climbing 1.7% to $53.06/bbl. Accordingly, the energy sector (+0.8%) climbed alongside crude oil to end the day among the leaders. Google continue to OP im the Tech space with AAPL -0.04% & GOOGL+2.18%. JPM & WFC traded higher after Q2 numbers. Utilities was the only sector down, still up 3.6% MTD. Volume werte in line @ 680mil shares...US After Hours CELG +5.8%, CSX +3.4%, AEHR +1.9%, ATI -9.3%, MJN -4.8%, YUM -0.8% following earnings/guidance...China economic data were better than expected across the board, but Shanghai Composite headed lower by over 4% yet again, presumably on implications of less proactive monetary policy actions by the PBoC.China's Q2 GDP came in at 7% for the quarter and YTD, and the Stats Bureau noted H2 economy will improve, implying that 2015 GDP should top 7% official target.China Stats Bureau further said the economy is still facing some downward pressure, but employment situation is improving and property sector is on the upswing. As expected, the BOJ maintained its policy stance and overall economic assessment in today's decision but lowered its forecasts for FY15/16 GDP and inflation. Ahead of today's critical Greek Parliament vote on the harshly austere bailout program, IMF put out a Debt Sustainability Report that poked major holes in the Athens' assumptions and targets. IMF is warning that the only path to sustainable debt would be through more relief than being considered, and that the current €85B in proposed financing will likely not be sufficient, requiring further injections into the banking system. IMF also calls for the likely dramatic extensions to debt, noting that "haircuts could be avoided if instead there was a significant further extension of the maturities of the entire stock of European debt."...Comments from Fed's George were largely in line with her generally hawkish stance. George noted the main risks to the US economy were now external, adding the economy appears to be back on track in Q2 to grow by a "solid" pace of around 2%. On employment, George said the latest jobless rate print implies some labor market vitality.

Nikkei +0.38% Hang Seng -0.96% Shanghai -4.56%

Eur$ 1.0995 JPY 123.45 GBP 1.5646 EURCHF 1.0402 RUB $56.6724 WTI $53.13 (+0.17%)

S&P +0.11% EuroStoxx+0.2% Dax+0.10% SMI-0.05%

Macro :
- China’s Economy Grew 7.0% in 2Q Y/y; Est. 6.8%
- MSCI May Consult on Greece If Exchange Closed 40 Days

Keep an eye on :
- Auto Sector : Auto Manufacturers to Form Cybersecurity Analysis Center
- Oil Sector : Goldman Sees Iran Boosting Exports by 200-400k B/D in 2016
- Utilities Sector : Spain Studies 5% Cut in Electricty Bill for 2016: Confidencial
- AERL LN : IAG Wins EU Approval for Aer Lingus Bid on Gatwick Slot Offer
- AIR FP : Boeing Would Get Order for More AH-64 Apaches in Funding Shift
- ASML NA : ASML Sees 3Q Sales at EU1.5b-1.6b, 2Q Rev. Beats, Sees Continued Strength in 2H on Increased Demand
- BALN SW : Baloise May Raise Dividend Further, CEO Strobel Tells Finanz
- BLT LN : BHP Says Expects $2b Impairment Charge After U.S. Assets Review --> -1.8% in sydney
- BO DC : U.K. Regulator to Begin Review of Harman, Bang & Olufsen Deal
- FCA IM : Fiat Chrysler’s Marchionne Says No Plans For Another GM Bid: NYT http://nyti.ms/1e00jFF
- HDD GY : Heidelberger Druck: Recovery of CEO Linzbach Delayed
- LG FP : LafargeHolcim Targets EU1.4B Synergies in Three Yrs
- MCRO LN : Wizard Parent Selling About 10% Stake in Micro Focus
- ORA FP : Jazztel Has 4.02m Households Connected to Fiber Network
- PSG SM : Prosegur considers cash-in-transit division 30% stake spin off
- SYNN VX : Monsanto CEO Urged by Sen. Durbin to Keep ‘Tax Address’ in U.S.
- SYNN VX : Paulson & Co. Said to Acquire Stake in Syngenta to support Monsanto Deal
- TLX GY : Meiji Yasuda Selling 3.9 Mln Shares in Germany’s Talanx: Terms
- TEF SM : Telefonica Increases Amount of Treasury Stock
- TEF SM : Soria Tells Expansion Telefonica to Help Lead European Mergers

(BFW) Soria Tells Expansion Telefonica to Help Lead European Mergers

BN 07/15 05:04 *SORIA TELLS EXPANSION TELEFONICA TO LEAD EUROPEAN MERGERS
Soria Tells Expansion Telefonica to Help Lead European Mergers
2015-07-15 05:43:26.47 GMT


By Charles Penty
(Bloomberg) -- Spain’s Industry Minister Jose Manuel Soria
tells Expansion newspaper he believes country’s
telecommunications, energy and tourism industries will be help
lead process of European, international consolidation.

* Cuba represents investment opportunity for Spain of EU2.2b
per year, Soria tells newspaper
* Investors are returning to renewables after reforms: Soria
* For story, click on: Link

Link to Company News:{TEF SM <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the editor responsible for this story:
Charles Penty at +34-91-700-9654 or
cpenty@bloomberg.net

NYT : Marchionne, Chief of Fiat Chrysler, Backs Away From G.M. Bid

Marchionne, Chief of Fiat Chrysler, Backs Away From G.M. Bid http://nyti.ms/1e00jFF

Four months after his proposal to merge with General Motors was rejected, Sergio Marchionne, the chief executive of Fiat Chrysler Automobiles, said Tuesday that he had no plans to make another offer.

In his first detailed comments about the failed effort, Mr. Marchionne said that his interest had cooled considerably since G.M.’s board had dismissed his overture in March.

“I was rebuffed once, and I won’t go back to get my nose bloodied a second time,” Mr. Marchionne said after participating in the ceremonial opening of contract talks between Fiat Chrysler and the United Automobile Workers union.

Mr. Marchionne has not backed off on his belief that automakers should join forces to maximize their capital investments in new technology.

But he said Fiat Chrysler was not actively seeking a merger partner and can afford to wait until the right opportunity arises.

“The pitch is that there is a better to way to run this business,” he said. “I’ll wait, and we’ll get it done.”

Mary T. Barra, chief executive of General Motors, at the automaker's annual shareholders meeting in Detroit on Tuesday.G.M. Chief Flatly Dismisses a Merger Overture From Fiat ChryslerJUNE 9, 2015
Mr. Marchionne’s comments came after he reassured U.A.W. leaders that Fiat Chrysler would not pursue a merger that threatened American factory jobs.

The union has long been wary of mergers involving Detroit’s three automakers because of the potential of plant closures and job losses.

But the U.A.W. has been supportive of Mr. Marchionne since he led the Italian automaker Fiat to take over Chrysler after its bankruptcy and government bailout in 2009.

Fiat Chrysler has been on a hiring spree in the United States in recent years, bringing in primarily entry-level workers, who earn less than longtime U.A.W. members.

The automaker has added about 15,000 union jobs since the last U.A.W. contract was signed four years ago. All told, more than 40 percent of its 36,000 blue-collar workers in the United States earn wages of $16 to $19 an hour, far less than the upper-tier union rate of $28.

Union leaders again expressed a desire on Tuesday to close the gap between pay grades during this summer’s contract negotiations with G.M., Ford Motor and Fiat Chrysler.

“Our membership has gone through some significant changes,” said Dennis Williams, the union’s president, referring to the growth of lower-wage jobs. “Very often they feel like second-class citizens.”

He declined to say whether the U.A.W. would push for a cap on lower-wage workers at F.C.A., as it has, for example, at Ford.

And he refused to blame Mr. Marchionne for taking advantage of the two-tier system. Instead, Mr. Williams praised him for taking a chance on Chrysler when many industry experts predicted it would go out of business.

“We have to thank a lot of people, including Sergio, for taking the risk and the challenge on Chrysler, and making it what it is today,” Mr. Williams said.

Fiat Chrysler has been one of the strongest players in the resurgence of the United States auto market, and it has regularly posted sales increases that surpass the industry’s overall rate of growth.

Mr. Marchionne said his goal in the new contract was to continue encouraging the business to grow while at the same time allowing all employees — including entry-level workers — to share in its financial success.

“They need to participate in the economic well-being of the company,” he said. “But we need to make money to pay people.”

While Fiat Chrysler is solidly profitable, it is half the size of competitors like G.M. and Toyota Motor. Because of its size, the company cannot spread its costs across the same number of vehicles produced by its bigger rivals.

If he does find a merger partner, Mr. Marchionne vowed not to cut jobs as part of consolidation. “This is not a slash-and-burn strategy,” he said.

Some analysts have predicted that Fiat Chrysler will face tougher negotiations with the union than G.M. and Ford, mostly because those companies have smaller percentages of entry-level workers.

But Mr. Williams suggested that putting a cap on the number of lower-tier employees may not be as important as raising wages for the new workers. “I’m not hung up on caps,” he said. “I want to be creative.”

The union opened contract talks with G.M. on Monday and will start negotiations next week with Ford. The current contracts for all three Detroit companies expire in September.

Much of the discussion will be devoted to larger issues such as wages and benefits, particularly health care costs. But both sides will also have to grapple with the futures of individual factories across the country.

Fiat Chrysler, for example, is considering moving production of its popular Jeep Wrangler out of a plant in Toledo, Ohio, that has made the sport utility vehicle for years. But Mr. Marchionne said the union would be consulted before a final decision.

Besides the union talks, Fiat Chrysler is facing other pressures, particularly on vehicle safety. Federal regulators are expected to impose a fine on the company this summer for its lax approach in fixing more than 11 million vehicles included in 23 different recalls.

The company also on Tuesday began an effort to get a new trial in Georgia to avoid having to pay the $150 million a jury awarded to the family of a 4-year-old boy killed in a Jeep that was involved in a rear-end collision.

>>> Asian Update

Asian Mid-session Update: China GDP, June economic figures all top consensus; BOJ cuts FY15 GDP and CPI targets

***Economic Data***
- (CN) CHINA Q2 GDP Q/Q: 1.7% V 1.6%E; Y/Y: 7.0% V 6.8%E; YTD: 7.0% v 6.9%E
- (CN) CHINA JUN INDUSTRIAL PRODUCTION Y/Y: 6.8% (4-month high) V 6.0%E; INDUSTRIAL PRODUCTION YTD Y/Y: 6.3% V 6.2%E; Power generation: 474.5B KWH, +0.5% y/y
- (CN) CHINA JUN RETAIL SALES Y/Y: 10.6% (4-month high) V 10.2%E; RETAIL SALES YTD Y/Y: 10.4% V 10.3%E
- (CN) CHINA JUN YTD FIXED URBAN ASSETS Y/Y: 11.4% V 11.2%E
- (AU) AUSTRALIA JUL WESTPAC CONSUMER CONFIDENCE INDEX: 92.2 V 95.3 PRIOR, M/M: -3.2% (2nd straight decline) V -6.9% PRIOR
- (AU) AUSTRALIA JUN NEW MOTOR VEHICLE SALES M/M: 3.8% V -1.3% PRIOR; Y/Y: 4.4% V 0.8% PRIOR
- (KR) SOUTH KOREA JUN UNEMPLOYMENT RATE: 3.9% V 4.0%E
- (CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 3.00%, AS EXPECTED

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.4%, S&P/ASX +0.9%, Kospi +0.3%, Shanghai Composite -2.4%, Hang Seng -0.4%, Sept S&P500 +0.1% at 2,104

***Commodities/Fixed Income***
- Aug gold flat at $1,153/oz, Aug crude oil +0.4% at $53.23/brl, Sept copper +0.3% at $2.54/lb
- SLV: iShares Silver Trust ETF daily holdings rise to 10,189 tonnes from 10,156 tonnes; 3-week high
- (US) API Petroleum Inventories: Crude -7.3M (largest draw since May 2014) v -1Me
- (CN) China MOF sells 10-year bonds, avg yield 3.5%
- (AU) Australia MoF (AOFM) sells A$900M in 4.25% 2026 Bonds; avg yield: 3.0788%; bid-to-cover: 2.19x

***Market Focal Points/FX***
China economic data were better than expected across the board, but Shanghai Composite headed lower by over 2% yet again, presumably on implications of less proactive monetary policy actions by the PBoC. Also of note, another 100+ A-shares have resumed trade after last week's large-scale halts, lifting volatility, and overall leverage of margin trading headed higher. China's Q2 GDP came in at 7% for the quarter and YTD, and the Stats Bureau noted H2 economy will improve, implying that 2015 GDP should top 7% official target. Industrial production and Retail Sales y/y growth also hit 4-month highs. The latter is particularly notable after concerns that equity market volatility would imperil "wealth effect" and spill over into reduced spending. Power generation was up just 0.5%, while separately announced NEA's power consumption gauge rose 1.8% - up from 1.6% prior. China Stats Bureau further said the economy is still facing some downward pressure, but employment situation is improving and property sector is on the upswing.

As expected, the BOJ maintained its policy stance and overall economic assessment in today's decision but lowered its forecasts for FY15/16 GDP and inflation. FY15 growth target was cut to 1.7% from 2% and inflation to 0.7% from 0.8%. FY16/17 and 17/18 CPI targets were also lowered by a decimal to 1.9% and 1.8% respectively - all lower than 2% target previously expected to be achieved in H1 of FY16. BOJ's economic assessment for economy remained as "continued to recover moderately", though policymakers also shifted lower their assessments for exports and production to acknowledge they were picking up with some fluctuation.

Ahead of tomorrow's critical Greek Parliament vote on the harshly austere bailout program, IMF put out a Debt Sustainability Report that poked major holes in the Athens' assumptions and targets. IMF is warning that the only path to sustainable debt would be through more relief than being considered, and that the current €85B in proposed financing will likely not be sufficient, requiring further injections into the banking system. IMF also calls for the likely dramatic extensions to debt, noting that "haircuts could be avoided if instead there was a significant further extension of the maturities of the entire stock of European debt."

Comments from Fed's George were largely in line with her generally hawkish stance. George noted the main risks to the US economy were now external, adding the economy appears to be back on track in Q2 to grow by a "solid" pace of around 2%. On employment, George said the latest jobless rate print implies some labor market vitality.

In FX, trading in USD majors was largely subdued. AUD/USD saw the most pronounced move of over 20pips above 0.7480 on China data release. USD/JPY was unaffected by the BOJ, remaining capped below 123.50. Ahead of tomorrow's Fonterra auction results, NZD was supported above 0.67, trading in a 20pip range.

***Equities***
US equities / ADRs:
- RCPT: Celgene to Acquire Receptos for $7.2B or $232/shr in all-cash deal; +10.1% afterhours
- PETX: Announces positive Pivotal results for AT-003; +7.3% afterhours
- PYPL: To be added to S&P500 and S&P100 index following spinoff, replacing NE (in 500) and EBAY (in 100); SYNA to enter MidCap400, replacing ROSE; +6.3% afterhours
- CELG: Reports Q2 $1.23 v $1.13e, R$2.28B v $2.24Be (early release due to acquisition of RCPT today); +5.7% afterhours
- CSX: Reports Q2 $0.56 v $0.53e, R$3.06B v $3.14Be; +3.4% afterhours
- YUM: Reports Q2 $0.69 v $0.63e, R$3.11B v $3.18Be; -0.2% afterhours
- MJN: Reports Prelim Q2 EPS $0.76 v 0.88e; Cuts FY15 $3.63-3.78 v $3.93e ($3.90-4.00 prior), FY15 Rev growth 0-2% (implies $4.4-4.5B v $4.46Be) vs +7% prior; -5.3% afterhours
- ATI: Guides Q2 -$0.17 to -$0.15 v +$0.22e; cites challenging conditions in flat rolled products; -7.7% afterhours

Notable movers by sector:
- Financials: East Money Information Co 300059.CN +2.7% (H1 guidance); Suning Universal Co 000718.CN +1.2% (H1 guidance); Bank of China Hong Kong 2388.HK +3.3% (approval to dispose asset); Founder Securities 601901.CN -7.3% (CSRC's probe); New World China Land Ltd 917.HK -0.7% (Q4 result)
- Industrials: China High-Speed Railway Technology Co 000008.CN -9.9% (H1 guidance); Bradken Ltd BKN.AU +14.5% (Reaffirms guidance)
- Technology: Central China Land Media 000719.CN -8.3% (H1 guidance); Toshiba Corporation 6502.JP -1.0% (speculation that CEO to step down)
- Materials: Angang Steel 347.HK -4.2% (H1 guidance); China Nonferrous Metal Industry's Foreign Engineering and Construction Co 000758.CN -6.0% (H1 guidance); Mount Gibson Iron MGX.AU +7.9% (Q4 result); BHP Billiton BHP.AU -1.6% ($2B asset impairment)
- Utilities: China Datang Renewable Power 1798.HK +6.5% (H1 guidance, Q2 result); Weichai Power 2338.HK -12.6% (H1 guidance); Huaneng Renewable Corp 958.HK -3.6% (H1 guidance)

>>> US After Hours Summary: CELG +5.8%, CSX +3.4%, AEHR +1.9%, ATI -9.

After Hours Summary: CELG +5.8%, CSX +3.4%, AEHR +1.9%, ATI -9.3%, MJN -4.8%, YUM -0.8% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: CELG +5.8%, CSX +3.4%, AEHR +1.9%, SAR +1.7%, UUU +0.3%

Companies trading higher in after hours in reaction to news: RCPT +10.2% (to be acquired by Celgene (CELG) for $232/share in cash, or ~$7.2 bln), REX +3.7% to replace SYNA in the S&P SmallCap 600), FNBC +2.2% (to replace RTI in the S&P SmallCAp 600), AEHR +1.9% (announced that Gary Larson VP of Finance/CFO plans to retire effective Sept 8, co intends to name Corp Controller Ken Spink to serve as interim CFO; co also reported earnings), SYT +1.7% (Bloomberg reporting that Paulson & Co is building a stake in the company to back takeover attempt by Monsanto (MON)), SYNA +1.4% (to replace ROSE in the S&P MidCap 400), CMI +0.8% (increased quarterly dividend by 25% to $0.975/share from $0.78/share)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: ATI -9.3%, MRTN -5.7%, MJN -4.8%, PPHM -3.7%, YUM -0.8%

Companies trading lower in after hours in reaction to news: RDHL -3.9% (announced public offering of its ADRs, terms not disclosed), RARE -3.3% (announced a $250 mln offering of common stock), SFY -1.6% (to be removed from the S&P SmallCap 600), DBVT -1.4% (filed amended F-1 related to offering of 6 mln ADSs representing 3 mln ordinary shares; proposed maximum aggregate offering price of ~$243.984 mln is above previous filings amount of $150 mln), MIC -0.5% (announced that a performance fee of $135.6 mln is payable to its external Manager as a result of outperformance by the Company of its benchmark index in Q2)

>>> US Close : Dow+0.42% S&P+0.46% Nasdaq+0.66% Russell+0.64% VIX 13.30 (-4.32%)

Closing Market Summary: Stocks Register Fourth Consecutive Day of Gains

The major average registered their fourth consecutive advance on Tuesday with the S&P 500 climbing 0.5%. The benchmark index reclaimed its 50-day moving average (2,100) at the start of the session while the tech-heavy Nasdaq Composite (+0.7%) outperformed throughout the trading day.

Equity indices began near their flat lines after overnight reports from Vienna revealed that P5+1 negotiators agreed to a nuclear deal with Iranian representatives. The news had little impact on the market, but crude oil was down about 2.0% overnight amid expectations that global oil supplies will increase once Iran begins selling its oil on the open market. However, an intraday rebound resulted in crude oil climbing 1.7% to $53.06/bbl. Accordingly, the energy sector (+0.8%) climbed alongside crude oil to end the day among the leaders, while only the health care sector (+1.0%) had a better showing.

The influential health care space finished the day well ahead of other countercyclical groups even though Johnson & Johnson (JNJ 99.78, -0.49) slumped 0.5% despite reporting a two-cent beat. However, biotechnology filled the void with iShares Nasdaq Biotechnology ETF (IBB 387.94, +8.79) spiking 2.3%, which contributed to the relative strength in the Nasdaq.

Furthermore, high-beta chipmakers also helped the Nasdaq stay ahead of the broader market with the PHLX Semiconductor Index rallying 1.1%. Micron (MU 19.61, +2.00) was the standout performer, soaring 11.4% after the Wall Street Journal reported Micron may have received a $21.00/share takeover offer from Tsinghua Unigroup. As for large cap tech names, Apple (AAPL 125.61, -0.05), Microsoft (MSFT 45.62, +0.08), and Oracle (ORCL 40.78, -0.02) ended near their flat lines while Google (GOOGL 584.18, +12.45) outperformed, climbing 2.2%.

Elsewhere among cyclical sectors, financials (+0.4%) spent the day behind the broader market even though JPMorgan Chase (JPM 69.04, +0.95) and Wells Fargo (WFC 57.25, +0.51) posted respective gains of 1.4% and 0.9% in reaction to earnings. JPMorgan Chase delivered a bottom-line beat on below-consensus revenue while Wells Fargo matched earnings expectations on revenue that missed estimates.

On the downside, the utilities sector (-0.1%) was the lone decliner, narrowing its July gain to 3.6%.

Treasuries spiked in the morning following a disappointing Retail Sales report. The 10-yr note settled just below its high with the benchmark yield falling five basis points to 2.40%.

Today's participation was in-line with recent totals as 680 million shares changed hands at the NYSE floor.  

Economic data included Retail Sales, Import/Export Prices, and Business Inventories:
  • Retail sales declined 0.3% in June after increasing a downwardly revised 1.0% (from 1.2%) in May while the consensus expected an increase of 0.3% 
    • The motor vehicle manufacturers reported that unit sales declined to 17.2 million SAAR in June from 17.8 million SAAR in May, which translated into a sizable 1.1% decline in sales at motor vehicles and parts dealers 
    • Excluding motor vehicles, retail sales declined 0.1% in June after increasing a downwardly revised 0.8% (from 1.0%) in May while the consensus expected an increase of 0.5% 
    • Core sales, which exclude motor vehicle dealers, gasoline stations, and building material and supply stores, declined 0.1% in June after increasing 0.6% in May 
  • Export prices, excluding agriculture, decreased 0.1% in June after increasing 0.7% in the prior reading 
    • Excluding oil, import prices decreased 0.2%, which followed last month's unchanged reading 
  • Business inventories increased 0.3% in May after increasing an unrevised 0.4% in April while the Briefing.com consensus expected an increase of 0.2% 
    • The inventory changes from manufacturers (0.0%) and merchant wholesalers (0.8%) were known prior to the release. The only new information was that retailer inventories were flat in May after increasing 0.6% in April. 
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(BN) Micron Has Better Options Than a Cheap Bid From China: Real M&A

Micron Has Better Options Than a Cheap Bid From China: Real M&A
2015-07-14 18:25:29.570 GMT


(For a Real M&A column news alert: {SALT REALMNA <GO>}.)

By Brooke Sutherland
(Bloomberg) -- Turning down a $23 billion takeover offer
would be a good move for Micron Technology Inc.
That’s how much Tsinghua Unigroup Ltd., the state-owned
investment arm of one of China’s top universities, is planning
to offer for the U.S. chipmaker, according to a person familiar
with the matter.
At $21 a share, Tsinghua would be paying just 4 times
Micron’s earnings before interest, taxes, depreciation and
amortization in the last 12 months. Only one company has done a
big semiconductor deal for cheaper, and it was Micron -- in the
company’s 2013 takeover of Elpida Memory Inc. out of bankruptcy.
“It’s an extremely low-ball bid,” Srini Sundararajan, an
analyst at Summit Research Partners, said in a phone interview.
“I think they’re using this as a trial balloon to see how
everybody reacts.”
Not only is the proposal almost 75 percent lower than where
the stock was trading in December, it’s also 40 percent below
where analysts had seen the stock going on its own in the next
year. On Tuesday, the stock traded in New York at $19.65 as of
2:24 p.m.
That’s not to say Micron should command the top valuation.
It’s had its share of issues: The market for personal computers,
the biggest use of its memory, is shrinking. That’s caused
prices to fall and crimped profit: Micron has lost money in four
of the last eight years.
But recently, some -- including shareholder David Einhorn
of Greenlight Capital Inc. -- see potential for a turnaround as
consolidation helps stabilize prices.

Better Prospects

Micron should be valued at about $33.75 a share based on
the valuations of peers and analysts’ forecasts for better
results, said Sachin Shah, a special situations and merger
arbitrage strategist at Albert Fried & Co.
Any buyer would then probably have to pay a premium on top
of that, in part to compensate for tax benefits that Micron
acquired through the Elpida takeover, he said.
“My point is, potentially $21 doesn’t even compensate for
what it should be worth on a stand-alone basis, let alone on a
takeover basis,” Shah said.
In a letter to investors released Monday, Einhorn said that
Micron will be worth more than Netflix Inc. at some point over
the next few years. The streaming service has a market value of
$43 billion. Applied to Micron, that would translate into a
stock price of about $40, according to data compiled by
Bloomberg.

Chinese Hurdles

There are other reasons to say no to Tsinghua. The Chinese
buyer will face steep antitrust scrutiny over a takeover of
Micron, particularly from U.S. regulators concerned about the
loss of technology to foreigners. Micron is America’s only big
manufacturer of dynamic random access memory, or DRAM, chips,
according to Morgan Stanley.
Micron will have to tread carefully in negotiations.
Tsinghua is state-backed and China is the world’s largest market
for semiconductors. Micron got 41 percent of its revenue last
year from the country.
Other buyers could give Micron more options. Toshiba Corp.
or SanDisk Corp. may step forward as suitors, though SanDisk
would need to take on a substantial amount of debt to pull a
deal off, said Sundararajan of Summit Research.
Intel Corp., which owns a 20 percent stake in Tsinghua and
gets a big chunk of its revenue from China, could be inclined to
give its blessing to the Micron takeover. Then again, Intel also
has had a relationship with Micron and may find greater value in
acquiring the company outright, Timothy Arcuri, an analyst at
Cowen Group Inc., wrote in a report on Tuesday.
“It is in play,” Sundararajan said. “Whoever has the
money will make a bid.”

For Related News and Information:
Big Tech Deals Are Coming as Avago Makes First Move: Real M&A
Broadcom Is One Pricey Chip Target as Avago Seals Deal: Real M&A
Micron Beating Netflix to Tesla as Einhorn Buys: Riskless Return
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>

--With assistance from Ian King in San Francisco.

To contact the reporter on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman