Tuesday's Early Headlines
- Fed Rate Decision Headlines Busy Economic Release Slate -- The Federal Reserve will release its latest decision on interest rate policy at 2:15 p.m. EDT, although the Federal Open Market Committee will likely leave the fed funds target rate at zero to 0.25%. Market watchers will be closely watching for any change to the central bank's language in the accompanying text, specifically to see whether the terms "exceptionally low" and "extended period of time" are cut from the statement this time around. In addition to the Fed's decision, investors will be dealt the latest statistics on the housing market, with housing starts and building permits data for February due at 8:30 a.m. EDT. At the same time, import and export price data for last month will be posted.
- Housing Market Double-Dip Coming: Whitney -- Bank analyst Meredith Whitney said that the U.S. housing market will retreat again as mortgage-backed securities and Treasurys are likely to go through a "material" correction during an interview with CNBC Tuesday. "The housing market surely will double dip," Whitney said during the interview, according to a transcript on CNBC.com."The asset classes of MBS and Treasurys are priced for a material correction in my opinion," she added. "The only buyers of agency MBS are the Fed and banks so you see how precarious that market is. If the Fed pulls back, that's a really big deal...because there's no substitute buyer."
- Lehman Plans Bankruptcy Exit, Creation of New Company -- Lehman Brothers (LEHMQ.PK) on Monday filed plans with the U.S. bankruptcy court to wind down its remaining assets and operations, according to Reuters, ending the largest U.S. bankruptcy case in history. Under Lehman's proposed Chapter 11 plan, a newly created business called LAMCO would manage what is left of the firm's commercial real estate, mortgages, principal investments, private equity, corporate debt and derivatives assets, according to the report. Lehman filed for bankruptcy on Sept. 15, 2008, a move that has been blamed for exacerbating the financial crisis.
- Citigroup Increases Stake in Banco de Chile -- Citigroup (C) raised its stake to 50% in the holding company for Banco de Chile. Citigroup has invested at least $1 billion in LQ Inversiones Financieras over the last two months, increasing its stake to 50% from 32.96%. Citigroup on Monday paid about $520 million for an 8.52% stake in LQ. Banco de Chile is controlled by the Luksic family through LQ.
- Wal-Mart Plans for More Money Centers -- Wal-Mart (WMT) plans to increase the number of its stores offering bank-like services by 50% this year, according to a report in The Wall Street Journal. The expansion would push the number of Wal-Marts with "Money Centers" to 1,500, or a little less than one for every two Wal-Mart stores in the U.S. Wal-Mart plans to open its 1,000th money center Tuesday, the newspaper says.
- Coca-Cola to Invest $300 Million in Malaysia -- Coca-Cola (KO) plans to build a new bottling plant in Malaysia and invest more than $300 million over the next five years to increase growth in Southeast Asia. Coca-Cola said the new plant in the southern state of Negeri Sembilan is expected to be up and running before the end of 2011. Coca-Cola's investment comes as the company prepares to end its franchise with a local bottler after sales remained stagnant over the years, The Associated Press reports.