Tuesday's Early Headlines
- White House Paring Back Regulation Plans. - The Obama administration is backing away from seeking a major reduction in the number of agencies overseeing financial markets, according to The Wall Street Journal, citing people familiar with the matter. The call to merge the Commodity Futures Trading Commission and the Securities and Exchange Commission will not happen, these people say. The Federal Reserve, Federal Deposit Insurance Corp. or the Office of the Comptroller of the Currency will not be asked to give up their primary authority to supervise banks.
- Approval for TARP Repayment Expected. - The Treasury Department is preparing to announce Tuesday it will let 10 banks buy back government shares, according to a Bloomberg report that cited people familiar with the matter. JPMorgan Chase (JPM) - Get Report is among those cleared to repay Troubled Asset Relief Program, or TARP funds. Goldman Sachs (GS) - Get Report, American Express (AXP) - Get Report and State Street (STT) - Get Report are also among those that have sold shares and debt unguaranteed by the government, demonstrating they can raise funds without federal aid, the report said.
- Fed Approves Capital-Raising Plans. - Ten of the largest U.S. banks under orders to raise additional capital following the government's stress tests have submitted their plans to do so, according to the Fed. "As supervisors, we will be working with the institutions to ensure their plans are implemented quickly and effectively," the central bank said late Monday. Those 10 banks include Bank of America (BAC) - Get Report, Citigroup (C) - Get Report, Fifth Third Bancorp (FITB) - Get Report, KeyCorp (KEY) - Get Report, Morgan Stanley (MS) - Get Report, PNC Financial (PNC) - Get Report, Regions Financial (RF) - Get Report, SunTrust (STI) - Get Report, Wells Fargo (WFC) - Get Report and General Motors' (GM) - Get Report GMAC financing arm.
- More Stress Tests In the Future? - The Congressional Oversight Panel released a report on the government's stress tests Tuesday, arguing that regulators should continue to perform stress tests on the largest U.S. banks. In the report, the Panel said that if the monthly unemployment rage were to continue to increase, stress tests should be repeated. Additionally, stress testing should also be repeated so long as banks continue to hold large amounts of toxic assets on their books. The report also calls for internal stress tests by banks between formal government tests, as well as allowing regulators to have the ability to use stress tests in the future when they believe that doing so would help to promote a healthy banking system.
- Top Court Delays Chrysler Asset Sale. - The U.S. Supreme Court on Monday delayed the bankruptcy court sale of Chrysler assets to Italian automaker Fiat. In a one-sentence order issued by Justice Ruth Bader Ginsburg, the court said it would stay the sale "pending further order of the undersigned or of the court."
- BlackRock May Pay $13 Billion for Barclays Unit. - BlackRock (BLK) - Get Report could announce Wednesday it is buying the fund business of Barclays (BCS) - Get Report for $12 billion to $13 billion in cash and stock, according to Bloomberg. The acquisition would be BlackRock's largest acquisition and the largest in the asset-management industry.
- Swiss Government Moves to Sell UBS Stake. - The Swiss government said Tuesday it is holding talks with several potential buyers of its $5.5 billion stake in UBS (UBS) - Get Report. The six-month lockup period for its mandatory convertible notes expired Tuesday, leaving the government free to liquidate all or part of its stake in the country's biggest bank, the finance ministry said in a statement.
- P&G Set to Name CEO. - Procter & Gamble (PG) - Get Report on Tuesday is expected to approve the appointment of Robert McDonald, chief operating officer, as its CEO, replacing long-time CEO A.G. Lafley, according to The Wall Street Journal.
Earnings and Economic News
- Economic Data in Focus - At 10 a.m. EDT, the April read on wholesale inventories will be released. Economists expect a decline of 1.1% after a 1.6% slide in March.
- Talbots Reports Narrower-Than-Expected Loss. - Retailer Talbots (TLB) swung to a first-quarter loss of $23.6 million, or 44 cents a share. Excluding a tax benefit, restructuring and impairment charges, Talbots would have lost 43 cents a share. Analysts expected a loss of 49 cents a share, according to Thomson Reuters.