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Alcatel-Lucent Posts Eighth Straight Loss; Possible Merger: TicketMaster and Live Nation; ING Parent Sells ING Canada Stake; Costco Issues Earnings Warning; Auto Suppliers Want Bailout Money; Service Sector Positive but U.S Loses More Jobs; Mexico Supports Peso; Crude Slips on Inventory Buildup
- France's Alcatel-Lucent SA (ADR:ALU) posted a 3.89 billion euro ($5 billion) loss in the fourth quarter, the eighth consecutive quarterly loss for the world's biggest supplier of fixed-line phone networks. "We have taken a substantial impairment charge which I think reflects the deterioration in the marketplace and also the change in our strategy," Chief Executive Officer Ben Verwaayen said on a conference call, Bloomberg reported.
- Ticket and marketing company Ticketmaster Entertainment, Inc. (TKTM), venue owner and music promoter Live Nation, Inc. (LYV), are in advanced merger discussions and could soon announce an industry-dominating conglomerate, Reuters reported. A source told Reuters that management control could sever discussions, and that the merger will "face major antitrust issues from managers, record companies, ticketing companies and concert promoters to name a few — not to mention the Obama administration will be very tough on this stuff."
- ING Groep NV (ADR:ING) said it plans to sell its 70% stake in ING Canada Inc., prompting the latter's shares to fall as much as 16% on the Toronto Stock Exchange. "ING, the parent company, needs capital and ING Canada has never been a core operating company for them," Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto, told Bloomberg. "It's always been a bit of an unusual fit."
- Costco Wholesale Corp. (COST) said second-quarter earnings would fall below estimates, and same store sales fell 2% in January. It also said that it would not provide earnings forecasts for the rest of the current fiscal year, Reuters reported.
- The Motor & Equipment Manufacturers Association., a trade group representing auto suppliers, is seeking up to $10.5 billion in federal aid, according to documents presented to the U.S. Treasury this week. According to an 11-page presentation obtained by Bloomberg, the documents include three action plans, including a "quick pay" program that would speed payments to suppliers through automakers General Motors Corp. (GM) and Chrysler LLC.
- The U.S. economy hemorrhaged 522,000 jobs in January, losing ground for a 12th consecutive month, a report from ADP Employer Services said yesterday. Job cuts announced by U.S. employers more than tripled last month from a year earlier, Bloomberg reported. The report is at odds with a positive trend in The Institute for Supply Management's index of U.S. service industries that showed non-manufacturing businesses shrank at a slower pace than forecast in January. The index of service jobs, which make up almost 90% of the economy, rose to 42.9, still below a reading of 50 that signals growth. But Anthony Nieves, who heads the ISM survey, said stabilization is unlikely until payrolls halt their "freefall."
- Mexico intervened in currency markets yesterday (Wednesday) to boost the peso, battered to a record low as the U.S. recession dampens demand for the country's exports. "The Foreign Exchange Commission instructed the central bank to inject liquidity into the market," Reuters reported, citing an anonymous source at the central bank. The peso has been hammered in recent months as exports to the U.S. dropped. The currency has fallen around 5% against the dollar so far this year after a 21% slump in 2008.
- Oil slipped below $41 a barrel yesterday (Wednesday) after a government report showed a larger-than-expected build in U.S. crude inventories, Reuters reported. The U.S. Energy Information Administration, the Department of Energy's statistical arm, reported crude inventories rose 7.2 million barrels last week to an 18-month high of to 346.1 million barrels. U.S. light crude for March delivery fell 50 cents to $40.28, London Brent rose 17 cents to $44.25.