Reuters Insider - U.S. Morning Call: BofA nears deal with Dept. of Justice

Rupert Resources

07/08/2014 16:21

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Reuters sources say Bank of America is close to a 
                     deal with the Department of Justice to pay over   
                     $16.5 billion, ending investigations into its sale 
                     of toxic mortgage securities.                     
 
 
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Transcript (May be auto-generated)

 A historic settlement is in the making. Reuters sources say Bank of America is 
close to a deal with the Department of Justice to pay over $16.5 billion, ending
investigations into its sale of toxic mortgage securities. BofA is expected to 
shell out $9 billion in cash and as for the rest, it will go toward helping out 
struggling homeowners. If the deal is finalized, that colossal payout amount 
will be the largest civil settlement ever between the US government and a 
company. Last year, JPMorgan forked out $13 billion to resolve similar claims, 
and last month Citigroup agreed to pay $7 billion. But despite the massive price
tag, a settlement could mean a new beginning for CEO Brian Moynihan after 
spending years getting rid of most of the mortgage liabilities that came when 
BofA acquired Countrywide and Merrill Lynch. The Wall Street Journal says BofA 
has paid out about $60 billion since the financial crisis to settle lawsuits and
buy mortgage securities - that's more than any of its rivals. Bank of America 
shares are up slightly in the premarket. Moving on to our stocks to watch, let's
kick things off with Rupert Murdoch's 21st Century Fox. Its quarterly profit 
topping Wall Street estimates. Earnings at its film studio nearly tripled from 
the year before, driven mainly by the X-Men movie and animated film Rio 2. But 
let's get to the juicy stuff. Rupert Murdoch made a rare appearance on the 
company's earnings call, reinforcing his decision to walk away from a merger 
with Time Warner, but saying the company remains "opportunistic and nimble." But
Fox did say it has no plans to go after another content company as an 
alternative to Time Warner. Fox shares are up 4% in the premarket. After the 
bell today, look for an earnings report from Rupert's other baby, News Corp. 
Next up is Google, joining forces with Barnes & Noble to tackle Amazon. 
According to The New York Times, the two companies will team up for fast, cheap 
delivery of books. Starting today, buyers in Manhattan, West LA and the San 
Francisco area will have access to same-day book deliveries. The partnership 
could be a big deal for Barnes & Noble, helping it make a dent in online sales 
as its stores have been struggling. Barnes & Noble shares are moving higher in 
the premarket. And take a look at shares of Chinese online travel company 
Ctrip.com, up almost 12% in the premarket. Priceline is planning to pump $500 
million into the company to help expand options for both of them in China. And 
now onto the markets, a strong open in the works as US stock futures are up 
after barely ending in positive territory on Wednesday. Investors will be 
looking at jobless claims at 8:30AM Eastern to gauge the continued recovery in 
the job market. Meanwhile, the yield on the benchmark 10-year Treasury note is 
sitting well-below 2.5% as investors see the Fed continuing to keep rates low 
and anxiety over Ukraine is thrown in there and Russia imposing its own 
sanctions. Back in stocks, Yelp and its executives were hit with a class action 
lawsuit, accusing them of selling more than $80 million in stock while allegedly
deceiving shareholders about the quality of reviews on its site. According to 
the suit, the reviews were not all authentic and first-hand. Yelp said the 
allegations are "without merit" and it will fight them. That is it for your 
Thursday Morning Call. You can follow us on Twitter @ReutersInsider and watch 
more videos at www.reuters.com. I'm Lisa Bernhard, this is Reuters