Top Stories

Kerry flying to Kiev as Russia threatens Ukraine. U.S. Secretary of State John Kerry was due to travel to Kiev today to "reaffirm the United States' strong support for Ukrainian sovereignty" after Russia took control of Crimea and threatened a full-scale invasion of Ukraine. In response, the latter has mobilized its reserves. The U.S. has threatened to isolate Russia economically, although some European countries rely on Russia for energy so forging a widespread agreement on sanctions could be tough.

Chinese manufacturing, services PMIs diverge. China's HSBC manufacturing PMI fell to a seven-month low of 48.5 in February from 49.5 in January, while the official reading slipped to 50.2 from 50.5. In contrast, official non-manufacturing PMI rose to 55 from 53.4. "We are seeing a higher share of services in GDP, and we cite that sometimes as one of the signs of rebalancing in the economy," says BBVA economist Stephen Schwartz. "If that's part of a longer-term trend, that's somewhat encouraging."

Top Stock News

Russian threat to Ukraine sends world stocks tumbling. Global equities were sharply lower at the time of writing as investors headed for the safe havens after Russia upped the ante in Crimea, while oil and gold were higher. The crisis has caused Russia's markets to plunge and prompted the country's central bank to temporarily hike interest rates to 7% from 5.5%. The USD-RUB was +1.3% at 36.4489 rubles, while the broad ruble-based MICEX stock index was -9.3% and the dollar-based RTS -10.7%.

Roche lung-cancer drug suffers major blow in Phase III trial. An independent committee has recommended that Roche (OTCQX:RHHBY) end a Phase III trial of its MetMab (Onartuzumab) lung-cancer treatment, as the drug didn't show "clinically meaningful efficacy." Analysts had viewed MetMab as a potential blockbuster and Roche is analyzing what the setback means for the drug's development - probably very little that's good. Shares were -2.4% in Zurich at the time of writing.

Buffett hints at bigger deals as Berkshire profit rises. Berkshire Hathaway's (BRK.A) Q4 net profit climbed almost 10% to $4.99B, or $3,035 per class A share, helped by gains at the company's insurance units. Berkshire's annual letter indicated that the conglomerate could make more major deals. "NV Energy will not be MidAmerican’s last major acquisition," Warren Buffett wrote of last year's $5.6B purchase. Berkshire ended 2013 with $48.19B in cash and equivalents, which gives the company a sizable war chest.

Good night for Fox and Warner at the Oscars. Fox Searchlight's (FOXA) "12 Years a Slave" has won the Oscar for the Best Picture and picked up two other Academy awards. Warner Bros' (TWX) "Gravity" received the most gongs with seven Oscars, including Best Director for Alfonso Cuaron. Disney's (DIS) "Frozen," which has generated over $1B at the box office, took two Oscars, although Paramount Pictures' (VIAB) "The Wolf of Wall Street" failed to win any awards despite five nominations.

Citigroup staff in Mexico questioned over $400M fraud. Mexican police have reportedly questioned employees at Citigroup (C) unit Banco Nacional de Mexico for possibly taking part in the alleged theft of $400M from the subsidiary. In the U.S., the FBI and SEC are also looking at the case, which is connected to Mexican oil-services company Oceanografia allegedly filing almost $400M of fraudulent invoices for short-term credit from Citigroup. The apparent theft has caused Citigroup to lower its Q4 earnings by $235M.

Sunday Times: RBS mulls merging ailing Irish unit with rival. RBS (RBS) is considering combining its Ulster Bank with a peer after being unable to stem the massive losses at the Irish unit or to find a buyer, the U.K.'s Sunday Times newspaper reports. Ulster Bank has generated £2.5B of losses over the past two years despite accounting for under 4% of RBS's balance sheet. The thinking is that merging Ulster Bank with another firm could allow the resulting larger company to cut costs and challenge Ireland's leading players.

Bloomberg: Home Depot president of U.S. ops groomed to be CEO. Newly promoted Home Depot (HD) executive Craig Menear is the favorite to succeed Frank Blake as CEO of the home-improvement chain, Bloomberg reports. Menear was elevated to president of Home Depot's U.S. retail division as part of a succession plan for Blake, who will turn 65 in July. There's no timeline for when the latter will leave his job.

Top Economic & Other News

Eurozone manufacturing PMI weakens. Eurozone manufacturing PMI slipped to 53.2 in February from 54 in January, with the German print falling but staying in growth territory. The French reading surprisingly improved but the sector contracted again. The overall survey is consistent with eurozone industrial output growing at 1% in Q1, while GDP is set to rise 0.4-0.5%, says Markit. "With new orders and backlogs of work still rising at reasonable rates, further ongoing expansion is signalled for coming months," Markit adds.

Today's Markets:

In Asia, Japan -1.3% to 14652. Hong Kong -1.5% to 22501. China +0.9% to 2075, India -0.8% to 20947.
In Europe, at midday, London -1.7%. Paris -2.3%. Frankfurt -2.7%.
Futures at 6:20: Dow -0.9%. S&P -1.1%. Nasdaq -1.1%. Crude +1.7% to $104.32. Gold +1.8% to $1345.20.
Ten-year Treasury Yield -5 bps to 2.6%.

Today's economic calendar:

Auto sales
8:30 Personal Income and Outlays
8:58 PMI Manufacturing Index
10:00 ISM Manufacturing Index
10:00 Construction Spending
11:00 Global Manufacturing PMI

Notable earnings before today's open: ACW, AKRX, CLDX, DNDN, EVEP, JKS, MGA, MGLN, NUS, PERI, ROC, SSW, SSYS, SWC

Notable earnings after today's close: AMBC, ASNA, AUQ, BDE, DXPE, GWRE, MBI, MCP, MDR, MR, NUVA, PDLI, SNHY, URS, VIPS