Apple’s market value exceeds Microsoft’s during 1999 bubble


NEW YORK |
Mon Aug 20, 2012 10:10pm EDT

NEW YORK (Reuters) – Apple Inc’s market value climbed past $623 billion on Monday, surpassing the record set by Microsoft Corp during the heyday of technology stocks in 1999.

Apple shares rose 2.6 percent, bringing its gains this month to almost 9 percent as Wall Street bets on the September 12 rollout of the latest version of the iPhone, the device that revolutionized the mobile industry.

Microsoft, however, retains the title of history’s most valuable company if its 1999 peak value of about $621 billion were to be adjusted for inflation.

Apple’s stock usually rallies in the run-up to major product launches, among the most heavily watched events on the annual tech calendar. The iPhone is the company’s biggest product, yielding half or more of its sales.

Sources have said the company will take the wraps off a larger version of its iPhone on September 12. Some analysts also think it intends to announce a smaller iPad to safeguard its market share, as rivals from Google Inc to Amazon.com Inc begin selling cheaper, seven-inch tablets.

But Bernstein Research’s Toni Sacconaghi warned that questions remain about the availability of components for both the iPhone and the iPad, which in the past has constrained Apple’s product shipments.

“A key question for the launch will be Apple’s expected rollout schedule,” the analyst wrote on Monday. “Apple’s intention is to continue to ramp offerings as quickly as possible, but the company’s ability to do so remains a key near-term question.”

Apple’s shares have risen 64 percent in 2012. On Monday, they closed at a session high of $665.15, conferring on the Silicon Valley giant a capitalization of $623.5 billion, exceeding Microsoft’s 1999 value of $620.8 billion, according to data provided by SP Dow Jones Indices.

But Microsoft’s value would rise to $853.7 billion after adjusting for rising prices, according to the Bureau of Labor Statistics’ inflation-calculator. (here)

POLAR OPPOSITES

Apple overtook Exxon Mobil to reach the No. 1 spot by market capitalization last year. Monday’s move means it has now entered the record books as the biggest company ever, in terms of market value.

“Everyone loves a winner; if you play the quick trade be careful,” said Howard Silverblatt, senior index analyst at SP Dow Jones Indices in emailed comments. “If you are an investor, check the fundamentals and business plans, and avoid the hype in your decision.”

Apple climbed even as fellow technology heavyweight Facebook Inc plumbed new depths. The No. 1 social network slid to a record intraday low of $18.75 in the morning before bouncing back to close just above $20 after Capstone upgraded the company’s stock to buy from hold.

Facebook’s stock has gone south in the past month as investors worried about its ability to make revenue grow. Last week, some early investors were given the go-ahead to sell for the first time since Facebook’s May 18 IPO. Several similar lockups will expire through the end of the year.

Facebook rebounded above $20 in afternoon trade after Capstone’s upgrade, based on a combination of a more attractive valuation since its decline, and good long-term advertising prospects.

“It seems to be down around levels that people who didn’t like the deal thought it was really worth. And now it seems to have stabilized,” said Eric Kuby, chief investment officer, North Star Investment Management Corp in Chicago.

It may have “found a level which seems more of a better price for people valuing the company in terms of the future.”

(Writing by Edwin Chan; Editing by Kenneth Barry, Steve Orlofsky, David Gregorio; and Phil Berlowitz)

CIC, GIC jointly invest $1 billion in U.S. Cheniere’s LNG plant: source


HONG KONG |
Mon Aug 20, 2012 11:17pm EDT

HONG KONG (Reuters) – China sovereign fund CIC CIC.UL and Government of Singapore Investment Corp GIC.UL have invested around $500 million each in U.S.-based Cheniere Energy Partners Ltd’s (CQP.A) planned liquefied natural gas (LNG) export plant, a source familiar with the matter told Reuters on Tuesday.

Houston-based Cheniere, which has regulatory approval to build the United States’ first LNG export plant in a generation, has been seeking funds to start construction.

News of CIC’s deal comes at a time of increased focus on China’s investment in the energy sector in North America. Last month, China’s state-owned CNOOC Ltd (0883.HK) launched an agreed $15.1 billion takeover of Canadian oil producer Nexen Inc (NXY.TO), in what is set to be China’s biggest ever overseas acquisition.

Asian state-owned companies have stepped up purchases of overseas energy assets as they scramble to secure energy resources required to support their economic growth.

In June, Malaysian state oil company Petronas launched a C$4.8 billion takeover of its Canadian joint-venture partner Progress Energy Resources Corp (PRQ.TO).

Cheniere Energy has also seen strong interest from Asia-based institutions. In May, Singapore state investor Temasek Holdings TEM.UL and Asia-based private equity firm RRJ Capital agreed to invest $468 million in the company.

Private equity firm Blackstone Group LP (BX.N) was one of the early backers of Cheniere, when it agreed to invest $2 billion into the company in February.

The Financial Times, which first reported the investment but gave no deal value, said Blackstone advised CIC on the deal. CIC will have no direct influence on Cheniere, the report added. China’s $482 billion fund is likely to escape scrutiny with its latest purchase as it is co-investing along with other institutions, the report added.

A CIC spokeswoman declined to comment, while Blackstone and GIC were not immediately available for comment. The source declined to be identified as the details of the deal were not public.

(Additional reporting by Gui Qing Koh and Saeed Azhar; Writing by Denny Thomas; Editing by Richard Pullin and Muralikumar Anantharaman)

Wall Street flat after rally; Apple biggest company ever


NEW YORK |
Mon Aug 20, 2012 7:56pm EDT

NEW YORK (Reuters) – Stocks were flat on Monday on signs of fatigue after a six-week run of gains as the European Central Bank quelled speculation about the form of market intervention that may be taken to stem the region’s debt crisis.

Despite the lethargic trading, Apple Inc (AAPL.O) shares hit a new high, becoming the most valuable public company of all time, with the combined value of its shares exceeding a previous record set by Microsoft. Shares closed up 2.6 percent to $665.15.

The SP 500 remains close to a four-year high, rising nearly 5 percent in the past six weeks. Investors had been waiting for the ECB to take steps to control the euro crisis in September. Last week, the index broke away from the 1,400 level where it had stalled for much of August.

German magazine Der Spiegel said over the weekend the ECB is considering setting interest rate thresholds for any purchases of a struggling euro zone country’s bonds. A bank spokesman said it was misleading to report on decisions that still had not been taken.

Germany’s central bank, the Bundesbank, also reiterated its opposition to bond purchases. A spokesman for the German Finance Ministry said it was not aware of any plans for the ECB to target bond spreads.

The slight losses on U.S. exchanges compared with much steeper declines in Europe and a fall in the Shanghai index to its lowest level since 2009.

“Over there, the crisis is clearly much more real for them,” said Ken Polcari, managing director at ICAP Equities in New York.

“For us, we are still sitting and waiting and people are almost numb to the headlines now so they are not going to make those quick reactions like they did – they are going to be much more patient,” said Polcari.

Facebook Inc (FB.O) shares briefly fell more than 50 percent from its issue price to hit a new low of $18.75.

The Dow Jones industrial average .DJI shed 3.48 points, or 0.03 percent, to 13,271.72. The Standard Poor’s 500 Index .SPX dipped 0.07 points, or 0.00 percent, to 1,418.09. The Nasdaq Composite Index .IXIC lost 0.38 points, or 0.01 percent, to 3,076.21.

The healthcare sector was a bright spot after Aetna Inc (AET.N) said it would buy Coventry Health Care Inc (CVH.N) for $5.6 billion. The Morgan Stanley healthcare payor index .HMO climbed 1.6 percent.

Coventry shares jumped more than 20.3 percent to $42.04 after Aetna said it will pay $41.10 per share for the company, putting the deal at about a 20 percent premium to the stock’s Friday closing price. The deal is the latest in a string of multibillion-dollar acquisitions in the U.S. healthcare sector.

Aetna shares rose 5.6 percent to $40.18.

Lowe’s Cos Inc (LOW.N) slumped 5.8 percent to $26.26 after the company reported weaker-than-expected quarterly results and cut its profit outlook for the fiscal year as the world’s second-largest home improvement chain lost market share to larger rival Home Depot Inc (HD.N).

Struggling retailer Best Buy Co Inc (BBY.N) said its founder, Richard Schulze, has turned down an offer from the board to conduct due diligence in connection with his proposal to take the company private at a valuation of more than $8 billion. The shares fell 7.9 percent to $18.67.

The global economic outlook is more uncertain now than at the start of the financial crisis in late 2008, Doug Oberhelman, chief executive of Caterpillar (CAT.N), the world’s largest maker of construction equipment, said on Monday. Caterpillar’s shares edged up 0.5 percent to $90.44.

Volume was weak in one of the lightest traded sessions of the year with about 4.83 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, well below the daily average of 6.64 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,680 to 1,267, while on the Nasdaq, decliners beat advancers 1,432 to 999.

(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama)

Asian shares rise on ECB hopes despite uncertainty


TOKYO |
Tue Aug 21, 2012 1:32am EDT

TOKYO (Reuters) – Shares rose on Tuesday as investors held on to hopes the European Central Bank can trim borrowing costs and help restore confidence in the euro bloc, even as officials denied a report about the shape of its planned bond buying strategy.

But most other assets – from the euro to oil and gold – drifted in recent ranges due to uncertainty surrounding major events that will take place after policymakers return from summer holidays. An ECB policy meeting is scheduled on September 6 and euro zone finance ministers will meet in mid-September.

Leaders of Germany, France, the Eurogroup and Greece are meeting bilaterally this week, with a German-Greek dialogue set for Friday over Greece’s rescue plans. Global lenders will visit Greece early next month to finalize their assessment of Athens’ austerity reforms.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 0.6 percent, inching closer to a three-month high hit earlier this month, while Japan’s Nikkei stock average .N225 inched up 0.1 percent after rising to a three-month high on Monday. .T

European markets were also seen making small gains, with financial spreadbetters calling London’s FTSE 100 .FTSE, Paris’s CAC-40 .FCHI and Frankfurt’s DAX .GDAXI to open up 0.1-0.2 percent. .L .EU

“The current eerie calmness reflects that markets are in a transition from having reacted negatively to what’s been decided in the past and waiting for the next event trigger to decide which direction to go,” said Yuuki Sakurai, CEO of Fukoku Capital Management.

“While the situation in Europe hasn’t changed dramatically, we haven’t recently had news as severely bad as in the past,” he said. “It’s not a ‘risk-off’ mode but not a ‘risk-on’ mode. Markets are seeing yellow lights flashing but not yet turning red.”

For Sakurai, Germany’s strong commitment to support the euro bloc is more crucial for calming markets than measures taken by the ECB, so he said any moves or comments from Germany would be closely monitored.

CALM BEFORE THE STORM?

U.S. stocks were flat on Monday, pausing after a recent rally, but the Standard Poor’s 500 index .SPX hovered near a four-year peak. Europe’s top shares fell, but Spanish sovereign bonds rallied and lowered their yields further from critically high levels.

The ECB said on Monday it was misleading to talk about decisions not yet taken, denying a weekend report that said the bank was considering setting interest rate targets for any buying of bonds of struggling euro zone countries so that it would buy such bonds if their interest rates exceeded a certain premium over German bonds.

The Bundesbank also kept its opposition to the ECB buying euro zone sovereign bonds, even after German Chancellor Angela Merkel voiced support for the ECB’s crisis-fighting strategy last week.

“Strictly limited and highly conditional support by the ECB is unlikely to provide an early resolution of the financial stress that confronts ‘peripheral’ European sovereigns,” Barclays Capital said in a research note.

“For now, however, investors seem to be adopting a hopeful rather than skeptical stance,” it said.

The dollar traded down 0.2 percent at around 79.27 yen, retreating from a five-week high against the yen at 79.66 yen hit on Monday. The euro inched up 0.1 percent to $1.2359.

LACKLUSTRE ELSEWHERE

With the rise in equities markets, Asian credit markets firmed, tightening the spread on the iTraxx Asia ex-Japan investment-grade index by 2 basis points.

Oil inched up, with Brent up 0.2 percent at $113.95 a barrel while U.S. crude futures edged up nearly 20 cents to around $96.15 a barrel. O/R

Copper rose 0.1 percent to $7,468 a tonne and spot gold also inched higher to around $1,622.30 an ounce. MET/L GOL/

The Australian dollar firmed to around $1.0481 from around $1.0450 after the Reserve Bank of Australia’s August policy meeting minutes did not offer fresh hints of more easing.

“In a broader sense, investors continue to respond favorably to coordinated global central bank intervention, part of which is the ability to successfully jawbone markets into the belief that whatever they have up their sleeves, central bankers will trump all,” said Andrew Wilkinson, chief economic strategist at Miller Tabak Co.

(Additional reporting by Alex Richardson in Singapore; Editing by Richard Borsuk Kim Coghill)

Insurer Aetna to buy Coventry Health for $5.7 billion: WSJ


Mon Aug 20, 2012 12:47am EDT

(Reuters) – Insurer Aetna Inc (AET.N) has signed a deal to buy rival Coventry Health Care Inc (CVH.N) for $5.7 billion in cash and stock, the Wall Street Journal reported, citing people familiar with the matter.

Aetna is paying $42.08 a share for Coventry, a 20.4 percent premium to Friday’s closing price, the newspaper said.

Aetna and Coventry Health Care were not immediately available for comment.

The acquisition of Coventry will help Aetna to lift its share of revenue from its government business to over 30 percent from 23 percent currently, paper reported.

Aetna expects the acquisition to add about 45 cents per share to its 2014 earnings and expects to boost its 2015 earnings by 90 cents per share, the Journal said.

(Reporting by Bijoy Koyitty in Bangalore; Editing by Edwina Gibbs)

American Airlines flight attendants accept contract offer


NEW YORK |
Sun Aug 19, 2012 1:00pm EDT

NEW YORK (Reuters) – Flight attendants at American Airlines on Sunday accepted the company’s last and final contract offer, a decision that will help the bankrupt carrier in its bid to cut labor costs.

The Association of Professional Flight Attendants said in a statement that the vote was 59.52 percent in favor of the offer. It said 92.8 percent of the 13,544 eligible voters cast ballots.

The approval by the flight attendants eliminates the need for American parent AMR Corp to attempt to void those contracts and impose stricter labor terms. Union-represented ground workers have already approved new contracts with concessions.

AMR Corp spokesman, Bruce Hicks, said in a statement that the vote is an important step in the company’s restructuring.

“We know this was not an easy decision for our flight attendants and we are very pleased with the choice they made,” Hicks said.

The flight attendants’ vote leaves pilots, who soundly rejected a tentative contract earlier this month, as American’s only major work group that has not reached consensual deals with givebacks.

AMR has said it needs to save $1.06 billion in overall labor costs per year, and about $842 million from its unions.

The flight attendants’ union said in its statement on the vote that it “will now continue our strong and concise message that we have zero confidence in this management team.”

American renewed a request to the U.S. Bankruptcy Court in New York on Friday seeking to terminate its existing collective bargaining agreements with the Allied Pilots Association union and impose more draconian terms. That move followed an August 15 ruling by U.S. Judge Sean Lane denying American’s original motion in part because it would give the carrier unrestricted ability to temporarily lay off pilots and engage in code-sharing.

Pilots voted down American’s final contract offer by a margin of 61 percent to 39 percent on August 8. Should the bankruptcy court permit American to scrap the pilots’ current contract, the carrier would still need to negotiate a long-term deal.

Resolving labor issues would allow American Airlines to shift focus to its planned emergence from bankruptcy and whether it will do so alone or as part of a merger. Last month, the carrier began sending non-disclosure agreements to potential merger partners.

American has started reviewing potential mergers, including a deal with US Airways Group, to determine whether merging with another carrier would offer greater value than emerging as a standalone carrier.

Leaders of the airline’s flight attendants’ union had urged members to accept AMR’s offer. AMR’s creditors committee had also weighed in last week, urging the unions to reach consensual contracts rather than be left at the mercy of abrogated deals the court could permit.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

(Reporting by Grant McCool and Karen Jacobs; Editing by Bernard Orr)

Samsung Electronics shares fall 3 percent, cooling after 23 percent surge


Sun Aug 19, 2012 8:37pm EDT

(Reuters) – Shares in Samsung Electronics, South Korea’s most valuable firm, fell 3 percent in early trade on Monday, extending falls into a second day as investors took profits following a one-month surge.

Samsung shares soared 23 percent from its most recent trough registered on July 12, outpacing gains in the main board by nearly three-fold.

(Reporting by Joonhee Yu; Editing by Richard Pullin)

Best Buy says Schulze declined due diligence deal


NEW YORK |
Mon Aug 20, 2012 1:00am EDT

NEW YORK (Reuters) – Struggling retailer Best Buy Co Inc said its founder Richard Schulze has turned down an offer from the board to conduct due diligence in connection with his proposal to take the company private at a valuation of more than $8 billion.

The consumer electronics chain said its board had authorized its advisors to start talks with Schulze, and had shown “great flexibility” on structuring an agreement that would not limit his ability to make a definitive proposal.

Schulze, the 71-year-old former chairman of Best Buy, said in a letter to the board earlier this month that he was interested in teaming up with private equity partners to buy the company for $24 to $26.

However, he has noted obstacles to making an official bid include a provision of Minnesota law that would prevent him from bringing in private equity firms and his inability to access the company’s financial data.

Best Buy said on Sunday it had offered Schulze a proposal that would have given him 60 days to put together a deal for the company, and would have also have given him the opportunity to take a buyout offer directly to shareholders from January.

“Mr. Schulze did not accept the company proposal,” it said in a statement.

A source familiar with Schulze said the executive and his team were “shocked” by the Best Buy statement because they thought they were still in talks with the company over an agreement on due diligence.

A spokesman for Schulze could not be immediately reached.

Best Buy said the board’s proposal would have given Schulze a waiver of Minnesota law so that he could develop a definitive proposal.

It said it asked Schulze to agree to “certain protections for Best Buy and its shareholders, with the goal of limiting outside distractions”, in exchange for opening its books. It did not detail the conditions.

The retailer has previously called Schulze’s proposal “highly conditional” and asked him to name his still undisclosed private equity partners.

Schulze, who owns about a fifth of Best Buy’s shares, has said he plans to fund a deal through a combination of investments from private equity firms, reinvestment of about $1 billion of his own equity, and debt financing.

Last week, Schulze sent the company’s board a second letter saying he would be persistent in stalking Best Buy.

“I still hope to work with the board on a mutually beneficial transaction – but you should know that I am not going away,” Schulze wrote.

Schulze resigned from the company’s board in June and said he was exploring options for his ownership stake. He lost the chairmanship after a probe by a board committee found he had failed to tell the board about allegations of personal misconduct by then-CEO Brian Dunn.

Best Buy has been closing stores, cutting jobs and trying out a new store format to improve business. It has faced criticism for being too slow to react to a changing retail world, where many use Best Buy as a “showroom” to try out gadgets and then buy them online or elsewhere for less.

Best Buy shares closed on Friday at $20.27.

(Reporting by Michael Erman; Editing by Richard Pullin)

Shares ease after recent gain, policy bets persist


TOKYO |
Mon Aug 20, 2012 12:22am EDT

TOKYO (Reuters) – Asian shares inched lower on Monday, taking a break after investor risk appetite had risen on hopes that Europe’s policymakers will take decisive steps to tackle the euro zone’s debt crisis in coming weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent, pulled lower by Chinese shares. The index has risen about 1 percent so far in August and is hovering near a three-month high hit earlier in the month.

Hong Kong .HSI shares fell 0.9 percent and Shanghai slid 1 percent .SSEC after data over the weekend showed home prices in China rose in July for a second month, spurring profit taking in the property sector, which has outperformed the broader market in the year to date.

The state-run Shanghai Securities Journal reported on Monday that rising housing prices could lead Beijing to impose more curbs on the sector to control housing inflation, which could include an expansion of the property tax pilot to include more cities and raising the pre-sales requirements.

Japan’s Nikkei stock average .N225 gained 0.6 percent to a three-month high, with a weaker yen supporting exporters. .T

“You do get to a stage where a lot of investors are a little bit skeptical whether this run will continue,” said IG Markets analyst Stan Shamu, of Australia’s equities market .AXJO ,which pulled back from a three-month high as investors took a breather in the absence of any clear catalyst to push the market higher.

Both the pan-Asia stock index and the Nikkei hit their 2012 lows in early June, with the recent bouts of rallies inspired by the European Central Bank hinting at a bond-buying programme to contain Spain’s surging borrowing costs and backing from Europe’s paymaster Germany.

On Friday, a record high for Apple Inc (AAPL.O) shares boosted U.S. stocks while the Standard Poor’s 500 Index .SPX stayed near a four-year high, and European shares closed at 13-month highs for their best week in seven years.

“The market is gaining ground on a much more solid footing compared to the first-quarter liquidity rally and the relative stability offers more room for further, sustainable gains,” Tong Yang Securities in a note to clients.

In a sign of easing investor fears, the CBOE VIX volatility index .VIX, which measures expected volatility in the SP 500 over the next 30 days, plumbed a five-year low on Friday.

The dollar rose to a fresh five-week high against the yen at 79.660 yen.

Asian credit markets were calm, with the spread on the iTraxx Asia ex-Japan investment-grade index barely changed.

Oil rose, with Brent up 0.5 percent to $114.26 a barrel and U.S. crude up 0.3 percent to $96.27 a barrel.

EUROPE RESUMES BUSINESS

With many European policymakers away on summer holidays, markets have enjoyed a respite in recent weeks from negative headlines.

While markets anticipate some conclusive action to calm the euro zone’s troubled bond markets to be announced at the European Central Bank’s policy meeting next month, the focus this week is on a meeting between leaders of Greece and Germany on Friday.

Senior German politicians already stepped up the pressure on Greece to stick to its reforms, and made clear that there was no appetite in the German parliament for a third aid package for Athens.

Recent polls by Reuters showed that successive debt bombshells from Greece have so far failed to blow apart the political bonds that hold it in the euro zone, persuading growing numbers of economists to conclude that the country has a future inside the currency union.

The ECB could outline details of its debt-buying programme at its September 6 meeting to ease pains for Spain, and its economy minister Luis de Guindos said the ECB must take forceful and unlimited steps to buy sovereign debt to help Madrid cut its refinancing costs and remove doubts over the euro zone’s future.

He said the government will study the details of the ECB’s debt-buying programme before making a decision on applying for more European aid.

Germany’s weekly Der Spiegel magazine reported on Sunday the ECB is considering setting yield thresholds for any purchases of a struggling euro zone country’s bonds.

A survey published on Friday showed U.S. consumer confidence rose in early August to its highest level in three months while the Conference Board’s gauge of future U.S. economic activity improved in July.

With recent solid U.S. data raising uncertainty over whether the Federal Reserve would take further easing steps, and hopes in Europe spurred investors to shift less money into bond funds worldwide last week, fund-tracker EPFR Global said on Friday.

(Additional reporting by Victoria Thieberger in Melbourne, Joonhee Yu in Seoul and Clement Tan in Hong Kong; Editing by Eric Meijer Kim Coghill)

Prudential top bidder for Hartford life insurance business: Bloomberg


CHICAGO |
Sat Aug 18, 2012 6:44pm EDT

CHICAGO (Reuters) – Insurer Prudential Financial Inc. has emerged as the top bidder for the individual life insurance business of rival The Hartford Financial Services Group Inc, a sale that could be worth roughly $1 billion, Bloomberg reported on Saturday.

A possible deal between the No. 2 U.S. life insurer Prudential (PRU.N) and The Hartford (HIG.N) is still weeks away and could crumble, Bloomberg reported, citing two people with knowledge of the matter.

Under pressure from hedge fund manager and shareholder John Paulson, The Hartford said in March that it was shedding most of its life insurance-related businesses and focusing on property insurance.

At the end of July, it struck a deal to sell its Woodbury Financial Services brokerage unit to insurance giant American International Group Inc. (AIG.N)

Among the other companies interested in The Hartford’s life insurance business is Birmingham, Alabama-based Protective Life Corporation (PL.N), Bloomberg reported.

Prudential and The Hartford declined to comment. Protective did not immediately return requests for comment.

(Reporting By Eric Johnson; Editing by Xavier Briand)