Business Blog Posts

Wall Street analysts boosted their price targets on Oracle Corp (ORCL.O) shares after the business software maker late Thursday forecast a rise in sales of new software in its fiscal fourth quarter. The optimistic view fueled hopes that a global resurgence in technology spending remained intact.

The stock rose 4.7 percent at $33.66 in premarket trade.

BlackBerry maker Research In Motion Ltd (RIM.TO)(RIMM.O), however, said earnings would slip as it spends heavily on the launch of its PlayBook tablet, sending its stock down 12.1 percent at $56.35 premarket.

On the economic front, investors will keep an eye on the final reading of fourth-quarter gross domestic product at 8:30 a.m. EDT. Economists in a Reuters survey expected a reading of 3.3 percent, compared with a preliminary 2.8 percent.

The Thomson Reuters/University of Michigan consumer sentiment survey is due at 9:55 a.m. EDT.

S&P 500 futures were up 3.5 points, and above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 46 points, and Nasdaq 100 futures rose 8 points.

Further gains above the widely watched S&P 500 resistance level of 1,300 "is likely to trigger more buying heading into quarter-end (and) into the first few weeks of April," said Robert Sluymer, an analyst at RBC Capital Markets LLC in New York.

U.S. stocks rose Thursday on optimism about upcoming earnings and as investors bought the quarter's top performers, lifting the S&P 500 above the technical level. The S&P 500 is up 2.5 percent so far this week, and the Dow has gained 2.6 percent. Nasdaq has put on 3.5 percent.

Standard & Poor's downgraded Portugal's credit ratings two notches to its second lowest investment grade rating and said it could cut again by one notch as early as next week, depending on the final shape of the euro zone bailout fund. S&P followed a two-notch cut by Fitch.

(Reporting by Angela Moon; editing by Jeffrey Benkoe)

At least 12 brokerages raised their price targets on the company's shares, which were up at $33.60 in pre-market trading. They closed at $32.14 on Thursday on Nasdaq.

"Oracle is well-positioned with its deep software stack, strong sales execution...The acquisition of Sun places Oracle as a datacenter player providing a complete integrated stack of hardware and software," Bank of America said in a note to clients.

Oracle, whose products are used to manage databases and automate businesses, ventured into high-end servers and other hardware with its $7.5 billion acquisition of Sun Microsystems last year.

Like IBM and Cisco Systems (CSCO.O), Oracle and HP are aiming to provide the infrastructure for companies to move toward "cloud computing," where data is handled remotely in data centers rather than on premises, deploying resources better and cutting costs.

FBR Capital Markets said Oracle's upcoming suite of business management software, dubbed Fusion, should allow it to take market share from rivals.

The brokerage said Oracle's integrated software and hardware portfolio has opened up new end markets and opportunities beyond its somewhat mature traditional business.

On Thursday, Oracle delivered quarterly results and forecasts that beat Wall Street expectations. The company also forecast a 4 to 14 percent rise in sales of new software in the fourth quarter.

The company also boosted its quarterly dividend by 20 percent, matching rival SAP's (SAPG.DE) recent increase.

Oracle, which derives 5 percent of its revenue from Japan, has said its building in the quake-hit country was undamaged and it did not expect the disaster to hurt fourth-quarter results.

"In addition, Oracle does not expect any supply chain issues presumably related to a relationship with Fujitsu Ltd (6702.T) to manufacture SPARC processors in Japan," JP Morgan said in a note.

(Reporting by Sayantani Ghosh and Isheeta Sanghi in Bangalore)

Concern about Portugal, whose premier quit after austerity measures aimed at avoiding a bailout were thrown out by its parliament, dominated the meeting even if leaders chose not to discuss it openly.

The heads of government also extended the schedule for paying into a permanent rescue fund to be set up from mid-2013, giving themselves five years to provide capital of 80 billion euros, rather than doing it over a shorter period in bigger installments.

That was a concession to German Chancellor Angela Merkel, who had balked at the previous funding plan for the European Stability Mechanism (ESM) because it gave her less room to cut taxes before the next federal election in 2013.

European officials have said the fund will have a triple-A rating despite the longer funding timetable.

Having said for weeks that they would agree a "comprehensive package" to tackle the euro zone debt crisis at the two-day summit, the leaders were unable to finalize key decisions because of political hurdles in some of its 27-member states.

Although they agreed in principle earlier this month to boost the lending capacity of their temporary safety net -- the European Financial Stability Facility (EFSF) -- to 440 billion euros from roughly 250 billion, they had to push this back until mid-year because of looming elections in Finland.

Any agreement on debt relief for Ireland has also been delayed pending the results of bank stress tests next week which could show a sharp rise in losses at the country's stricken financial institutions.

Reflecting the threat investors see from Portugal, yields on its 10-year benchmark bonds rose above 8 percent on Friday, a rate that is considered unsustainable in the long term, making a bailout more likely. <GVD/EUR>

The euro itself was little moved.

President Anibal Cavaco Silva will meet the leaders of Portugal's political parties on Friday to decide whether to call a snap election.

OPPOSES BAILOUT

Prime Minister Jose Socrates is the second euro zone leader to fall victim to the rolling sovereign debt crisis after Ireland's prime minister was voted out of office last month.

Attending the summit, Socrates made clear his continued opposition to Portugal asking for a bailout, and said that whatever Portuguese government comes to power after new elections, it would stand by its deficit-cutting commitments.

If Portugal's president calls for new elections, by law they cannot be held for a further two months. Any decision on whether to seek a bailout may only therefore be taken in May. Portuguese voters are opposed to any EU/IMF assistance.

But the media isn't here for the car. They want Sergio.

Sergio Marchionne, who runs both Fiat and Chrysler, has a rock star appeal you don't see anywhere else in the global car industry these days. After two hours, he finally appears, tieless, in a dark turtleneck sweater over a white-and-blue checked shirt. As always, he's wearing laceless shoes. Laces take too much time.

"Don't look at me," the Italian-Canadian drawls. "Look at the cars and how beautiful they are." Before taking questions, he keeps everyone waiting until the last Fiat brand presentation is over.

"Why is it like that?" asks one of his helpers, after the scrum has cleared. "This doesn't happen with other car CEOs."

Maybe it's because so much is riding on Marchionne. The car boss is trying to bring together two firms that have struggled in their respective markets for the past decade or so. This year he has to refinance billions of dollars of Chrysler debt and take the company public, with an initial public offering expected in the second half of the year. The plan also calls for Fiat to bump up its stake in Chrysler to 51 percent, and get the freshly combined group melded and motivated to lift its vehicle sales by more than 80 percent by 2014.

"This seems a Herculean task, even for a gifted manager such as Sergio Marchionne," says Thierry Huon, who heads the automotive team of Exane BNP Paribas.

It's also a huge gamble. In what's sure to be a landmark in the IPO calendar, watched by trade unions and politicians from Washington to Rome, Marchionne must sell the story of Chrysler and its partnership with Fiat as one of growth -- despite a fragile economic backdrop, scant presence in the world's largest auto market, China, and a truck-heavy vehicle lineup that's ill-suited for surging oil prices.

Investment bankers are licking their lips.

"He's like the Elvis Presley of the industry right now," said one U.S. banker who knows Marchionne well. "Not only because Fiat had been doing better and he's getting a lot of accolades for turning Fiat around. But it looks like he cut himself a great deal on Chrysler so he's looking like the smart guy in the room right now."

He charms the media. He barely sleeps. He's almost always in a slouchy black sweater, rain or shine, though he will occasionally don a tie if he happens to have a meeting in the Vatican or at the Italian Parliament.

If he does revitalize Chrysler, he will be doing something that eluded its two previous owners: Daimler AG, one of the world's most respected auto makers, and Cerberus Capital Management, a deep-pocketed Wall Street private equity group.

THE BOSS

The son of an Italian "carabiniere" -- a member of the Italian paramilitary police -- Marchionne was born and raised in the impoverished central region of Abruzzi. His family moved to Toronto when he was 14 to escape what his father viewed as the confines of an Italian society obsessed with status over talent. The future finance-wizard started off by studying philosophy in Toronto, but quickly moved to law and accounting.

His background is in finance, not autos, but Marchionne earned kudos for his turnaround skills in 2004/5 when he saved Fiat, Italy's biggest industrial group with a century of history and a 200,000-strong global workforce, from near bankruptcy. The firm escaped a forced marriage with General Motors with $2 billion cash. He took the top job at Chrysler in 2009, hoping to follow in the footsteps of Italian-American businessman Lee Iacocca, the architect of Chrysler's revival in the 1980s. Iacocca had made his name with the pitch: "If you know a better car, buy it."