A chill in the air spells the end of Summers. But at this hour the temperature is rising on Wall Street. Futures are heating-up on the announcement that Larry Summers has withdrawn himself from consideration as the next Fed Chair. Here at NASDAQ, the composite index has been up a full percentage point in early trading, and the numbers are similar over at the NYSE. As for Summers, he sent President Obama a letter last night saying, "I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery." So, why exactly does Wall Street like this news so much? And now that Janet Yellen is more likely to get the job, does that change the investing environment? Yahoo Finance Senior Columnist Mike Santoli has more in the video above.
Chrysler may soon be in the offering. The Financial Times reports the automaker will file papers for an IPO later this week. Fiat owns the majority of the company and has been in talks to buy the rest from a trust affiliated with the UAW. But FT says the asking price was too high. The trust owns more than 40% of Chrysler. It plans to sell its stake in pieces.
Phone-maker HTC has cut 20% of its U.S. workforce. The Taiwan based company had just 150 workers in the states, but according to the Wall Street Journal, 30 of them have been let go. HTC has previously forecast an operating loss for the quarter. HTC was once the number one seller of Android smartphones in the U.S. Now it has 8% of the market.
Westfield is heading for the door at a number of its U.S. malls. The Australia-based company has sold major stakes in seven -shopping centers. The purchaser is Starwood Capital. It's paying $1.6-billion dollars for a 90% stake in each of the properties. Westfield has been unloading less-profitable malls to help fund newer developments like a retail wing at the new World Trade Center.
STOCKS TO WATCH
Cumulus Media (CMLS) is set to announce a deal today with Rdio. That's a subscription music service from the founders of Skype. Together the companies hope to compete against more established streaming services like Spotify. Prior to this morning Cumulus is up 97% year-to-date, giving it a market cap approaching $1-billion.
Vornado Realty Trust (VNO) is following Bill Ackman out of J.C. Penney (JCP). Vornado Chairman and CEO Steve Roth has just resigned from the Penney board of directors, and an SEC filing indicates he plans to sell Vornado's stake in the troubled retailer very soon. Vornado currently owns 6.1% of Penney. At one point is was holding nearly 10%, but sold the rest in March. Vornado's share prices are up 5% year-to-date. J.C. Penney stock is down 34% in the same time.
Now we look at Brinker International (EAT) which owns the restaurant chains Chili's and Maggiano's. The Wall Street Journal says Chili's will announce plans tomorrow to roll-out tabletop computer screens. They'll be used to take menu orders, accept credit card payments, and let diners play 99-cent videogames. The computers have already been in testing, and increase the amount that people spend particularly on dessert and coffee. Brinker stock has made a steady climb this year, rising 28%.
Urban Outfitters (URBN) is pushing a plan to sell alcohol at a store under construction in Williamsburg, Brooklyn. It would be a first for the chain but not unprecedented in the industry. A number of upscale stores offer shoppers champagne. By the way, Sterne Agee initiated coverage of Urban Outfitters with a buy on Friday citing strength in its Anthropologie chain. The company stock could use some juicing. It's down 6% year-to-date.