With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Survey: China Investments Will Continue to Grow Next Year; Japan's Q3 GDP Revised Down; Kraft Offers Changes to Cadbury Bid; Volkswagen Buys 20% Stake in Suzuki; Research in Motion Option Activity Surges; U.S. Inventories Rise for First Time in 13 Months; Sprint Shares Rise After Citi Upgrade; Neiman Marcus Hit Hard
A survey of 369 U.S. firms showed China will continue to be U.S. companies' top investment destination in 2010, the American Chamber of Commerce (AmCham) in Shanghai said yesterday (Wednesday). More than 90% of those polled by AmCham had an optimistic business outlook for the Red Dragon, up from 81% in a similar 2008 survey. The study also revealed that 64% of companies polled plan on increasing their 2010 investments in China, up from 58% that increased their investments this year. "American companies are finding that their performance in China is the bright spot in an otherwise difficult global picture," said AmCham Shanghai Chairman J. Norwell Coquillard.
Japan's economy grew at a much slower pace than previously thought, with government figures showing a revised growth of 0.3% on a quarterly basis, down from the initial 1.2%. On an annualized basis, Japan's gross domestic product (GDP) grew 1.3%, well below the preliminary 4.8% growth estimate. Consumer spending did improve thanks to stimulus measures, but the corporate sector continued to lag, the data showed.
The European Commission has extended its deadline to examine Kraft Foods Inc.'s (NYSE: KFT) hostile $16 billion bid for British confectioner Cadbury PLC (NYSE ADR: CBY) to Jan. 6, saying Kraft had put forward changes to its proposal that may calm antitrust concerns. Kraft does not expect to make any "material divestments" to win European Union (EU) approval, spokesman Michael Mitchell told The Associated Pressin an e-mail. "We are cooperating with the commission and working through the approval process," he wrote. "As part of that process, we have submitted remedies in a few affected markets."
Volkswagen AG (OTC ADR: VLKAY) said it would buy a 20% stake in Suzuki Motor Corp. in a deal that gives the German automaker a greater presence in the burgeoning Asian auto market. Suzuki said it would invest up to half of what it receives in the transaction into Volkswagen shares to strengthen the alliance. The deal also enables a joint approach to developing more environmentally friendly vehicles, Suzuki said.
Call options in BlackBerry maker Research in Motion Ltd. (Nasdaq: RIMM) more than doubled the amount of puts after the company signed a distribution deal with two Chinese vendors, Reuters reported, citing option analytics firm Trade Alert LLC. Shares in RIM closed at $63.14 yesterday (Wednesday), up 4.87%. "There are a few factors coming together that could push the stock up as much as $80 by January expiration," Investors Observer LLC President Victor Schiller told Reuters.
Wholesale inventories in the United States gained by 0.3% in October, the Commerce Department said, easily surpassing economists' expectations of a 0.5% decline. The gain is the first after a string of 13 straight declines, fueling hopes the nascent recovery means companies will continue to add inventories. Sales at the wholesale level also gained in October, rising 1.2%, better than the 0.7% gain economists were expecting, The Associated Press reported.
Sprint Nextel Corp. (NYSE: S) was upgraded to a "buy" rating by Citigroup Inc. (NYSE: C), which cited a possible merger with T-Mobile USA Inc.parent Deutsche Telekom AG (NYSE ADR: DT) and the expectation that Sprint will improve its still-declining subscriber base. Sprint's stock, for which Citi has a target price of $5.50, gained 5.63% to close at $4.13 a share.
The Neiman Marcus Group Inc.is the latest luxury retailer to feel the effects of the economic downturn, suffering a 34% drop in profit and a 12% decline in sales in its fiscal first quarter. The Dallas-based company said net income fell to $8.5 million on sales of $868.9 million, compared to a profit of $12.9 million on sales of $985.8 million in the same period a year ago. "We continue to experience a challenging economic and retail environment and expect these conditions will continue for an extended period of time," the company said in its quarterly filing with the U.S. Securities and Exchange Commission (SEC), which it is required to do because it has publicly held debt.