Daily News: Boeing, Citigroup, Arena Pharmaceuticals, BHP, BP, AIG

  • Yen plummets on Japanese intervention. The yen tumbled from a 15-year high against the dollar after Japanese monetary authorities intervened in international currency markets for the first time since 2004. Finance Minister Yoshihiko Noda said the country unilaterally sold yen “to check excessive volatility in currency markets,” with media reports suggesting Japan’s intervention may have exceeded ¥100B ($1.2B). Comments from officials suggest this is a “strong conviction” intervention that could be followed by more action as needed, with 82 yen per dollar appearing to be the line of defense. The yen is -2.8% to 85.40 yen/dollar (6:00 ET), after reaching a high of 82.88 earlier today. Nikkei +2.3%.
  • Boeing likely to lose WTO ruling. The WTO is expected to rule against Boeing (BA) today, finding it received some illegal subsidies from the U.S. The preliminary, confidential finding will come more than a year after the WTO ruled against Airbus in a similar case, and officials may feel pressure to prove that a new ruling against Boeing is just as severe as the one meted out to its European rival.
  • Suit against Citi finds solid ground. Terra Firma scored an initial victory as a U.S. judge ruled its lawsuit against Citigroup (C) over EMI Group will go to trial. Terra Firma, a British private-equity fund, is suing Citigroup on claims one of its executives misrepresented to Terra Firma that Cerberus Capital Management had made a higher, competing bid for EMI in the final days before an auction for the recording company in May 2007. As a result, Terra Firma said it paid an inflated price for the company.
  • FDA stymies Big Pharma ambitions on diet pills. Shares of Arena Pharmaceuticals (ARNA) plunged nearly 40% yesterday after the FDA cited safety issues with lorcaserin, Arena’s proposed obesity drug. An FDA panel will meet tomorrow to consider the drug, while a panel meeting today will discuss whether to call for the removal of Meridia, a separate weight-loss pill sold by Abbott Laboratories (ABT) which has been linked to heart problems. The diet drug field had once seemed like it would become a major money-maker for pharmaceutical firms, but the FDA has repeatedly sidelined these drugs because of their side effects; an FDA panel refused to recommend approval for Vivus’ (VVUS) Qnexa drug in July, and is in the middle of reviewing Orexigen’s (OREX) Contrave.
  • China worried about BHP’s Potash bid. China’s Ministry of Commerce expressed concern over BHP Billiton’s (BHP) $39B hostile bid for Potash (POT), suggesting it could negatively impact both the global potash industry and China’s domestic industry. The ministry said it would open an anti-monopoly probe of the bid if a formal application is submitted.
  • BP’s spotty safety record prompts North Sea concerns. BP’s (BP) safety standards have come under increased scrutiny since the Gulf spill, and the results have been less than satisfactory. According to documents obtained by the Financial Times, all but one of BP’s five North Sea installations inspected in 2009 were cited for failure to comply with emergency regulations on oil spills, including failure to provide offshore operators with adequate regular training or information on how to respond to an incident. The reports raise additional questions about BP’s ability to manage a disaster in the area, and lend weight to calls for a moratorium on deepwater drilling in the North Sea. Premarket: BP -1.4% (7:00 ET).
  • AIG considers Taiwan listing for Nan Shan. AIG (AIG) has reportedly had informal contact with Taiwan’s Financial Supervisory Commission as it considers its options for Nan Shan Life, and may either put Nan Shan back on sale, list it in Taiwan or continue to run the unit itself. Regulators had rejected AIG’s planned $2.2B sale of the unit.
  • SEC probes “spiky” trading. The SEC is reportedly investigating three recent trading days when the number of buy and sell orders in the stock market jumped dramatically. The probe of these traffic spikes reflects the growing concern among regulators that excessive “noise” is disrupting the marketplace.

Source: Seeking Alpha