Late-Night Headlines
Bloomberg:
- India may trigger as much as 1.9 trillion rupees ($39 billion) in stock sales, equivalent to five years of equity offerings, with a proposal to limit stakes of controlling shareholders. Prime Minister Manmohan Singh’s government is considering a plan that would require at least 25 percent of a company’s stock to be traded. The rule would prompt equity sales in 560 of Mumbai’s 3,335 most-active stocks, such as NMDC Ltd. and Steel Authority of India Ltd., according to data compiled by Bloomberg.
- Delta Air Lines Inc.(DAL) and the Atlanta airport are nearing a lease agreement that would pave the way for an $800 million bond sale, the biggest such offering in the U.S. this year, people familiar with the talks said. The debt will pay for a new international terminal at the world’s busiest airport, which is in talks with Atlanta-based Delta and other airlines as their leases expire after 30 years. A lease accord may come this month, clearing a path for the bonds, said the people, who asked not to be identified because the discussions are private.
- The Obama administration is considering higher fees on larger financial firms to help cover the costs of new regulations on consumer financial products, an administration official said. The two-tiered fee structure would levy higher fees on firms with over $10 billion in assets, while fees for smaller institutions would not rise, the official said on the condition of anonymity because the proposals have not been announced. Fees also will be assessed on non-bank financial institutions, the official said.
- Japan’s demand for services rose unexpectedly in June as government stimulus measures spurred consumer spending, another sign that the economy is emerging from a recession. The tertiary index, which captures 63 percent of the economy, climbed 0.1 percent from May, when it slid a revised 0.3 percent, the Trade Ministry said today in Tokyo. The median estimate of surveyed was for a 0.3 percent drop.
Wall Street Journal:
- Intel Corp. (INTC), Dell Inc. (DELL), and Fujitsu Ltd. (FJTSY) are among the new partners with the nonprofit group Connected Nation to put computers and cheap Internet service into low-income homes, the parties announced Thursday.
- Bond guru Bill Gross , whose Pimco Total Return is the world's largest mutual fund, has bought a bayfront home in Newport Beach, Calif. through a trust for $23 million, according to three people close to the deal. Records show the home was bought by the Monte Carlo Trust, which names as trustee Jeff Stubban. Mr. Stubban couldn't be reached for comment. Three people familiar with the matter say Mr. Gross intends tear the home down and build a new one on the site. Mr. Gross's new property includes a 1979 Georgian home of 11,000 square feet with nine bedrooms and 12 baths. Set on a double lot, the home includes 112 feet of frontage on Newport Harbor.
- The possibility that Scotland could release the terminally ill Libyan agent convicted in the 1988 Lockerbie bombing was denounced by both victims' families and the U.S. government. The uproar stems from the fact that the convicted bomber, Abdel Baset Ali Mohmet al-Megrahi, has prostate cancer and is seeking to be released. Mr. al-Megrahi was sentenced in 2001 to a minimum of 27 years in prison for his involvement in blowing up a New York-bound Pan Am airliner as it flew over the Scottish town of Lockerbie, killing all 259 people on board and 11 people on the ground. Many on the December 1988 flight were American citizens traveling home for the holidays. The Scottish government said Thursday that its justice secretary, Kenny MacAskill, is considering two applications, either of which would result in Mr. al-Megrahi's release from prison. One is a request to release him from prison on so-called compassionate grounds because of his advanced cancer. The other, from the Libyan government, would allow him to serve out the remainder of his sentence in a Libyan jail.
MarketWatch.com: Financial-services shares built on the previous session's gains Thursday on news that renowned hedge-fund manager John Paulson's firm snapped up Bank of America Corp. and other bank stocks in the second quarter. Paulson buying bank stocks is "a noteworthy change from a recent and accurate financial bear," said Stifel Nicolaus & Co. analysts. "We believe it is likely that the companies in which he added to his original positions and the companies in which he took new positions will react positively to this filing as they may be getting a vote of confidence from someone who was right during the downfall," they added. In a separate report Thursday, insurer Liberty Mutual Group Inc. rebuilt positions in Bank of America(BAC) as well as Wells Fargo(WFC) in the second quarter, according to Bloomberg. Liberty Mutual sidestepped much of the carnage in financial stocks by selling the stocks last year, but the company made Bank of America its largest stock holding in the second quarter, according to the report.
CNNMoney.com:
- Just how much is a rainmaker at a bailed-out bank really worth? Or a senior executive at a recently bankrupt automaker for that matter? Such questions will soon be a subject of discussion at the White House as the biggest recipients of government aid begin submitting compensation plans for their top 100 employees to the Obama administration's recently appointed pay czar. Seven companies -- AIG (AIG), Chrysler, Citigroup (C), Chrysler Financial, Bank of America (BAC), General Motors and GMAC -- are due to submit proposed employment contracts for their 25 highest-paid employees Friday. Compensation proposals for the next 75 most compensated employees are due by Oct. 13. Kenneth Feinberg, the man charged with handling the task, is expected to rule on the first set of pay plans within the next 60 days. That information is due to be made public by Treasury sometime after, although any announcement may not include details of pay packages for individual employees.
Business Pundit:
- 12 Economic Bubbles That May Burst.
Politico:
- After an intimate White House lunch last week, Republican Sen. Chuck Grassley said he was confident President Barack Obama was working toward a truly bipartisan health care reform bill. "I'm not walking away from the table; I'm being pushed away from the table," Grassley said in Afton, Iowa, warning that Democrats might go it alone on health care. If the Democrats lose Grassley, the top Republican negotiator on the Senate Finance Committee, they very likely lose any hope of a bipartisan bill. Even worse, if Grassley bails, then conservative Democrats like Ben Nelson may follow. While Grassley has always criticized the process in the Senate, his fresh criticisms, before the home state crowd, are magnified as contentious town hall scenes are repeated across the country. And if the August unrest has spooked a safe, respected senior senator like Grassley, it can't be good sign for the dozens of much more vulnerable moderates from both parties, who worry that the wrong vote on health care could cost them the job next year.
- A new coalition on Thursday launched $12 million in television ads to support President Barack Obama’s health reform plan, in the opening wave of a planned tens of millions of dollars this fall. The new group, funded largely by the pharmaceutical industry, is called Americans for Stable Quality Care. It includes some odd bedfellows: the American Medical Association, FamiliesUSA, the Federation of American Hospitals, PhRMA and SEIU, the service employees’ union. The decision of labor and progressive groups to join with industry groups could draw new heat about the president's package from the left. The ads began airing at about 11 a.m. ET Thursday.
Time.com:
- Q&A: Why Barton Biggs, head of hedge fund Traxis Partners, is bullish.
Reuters:
- Nordstrom Inc (JWN) posted a steep decline in quarterly profit on Thursday that nevertheless met Wall Street's expectations, as the upscale department store chain controlled inventory and expenses to offset languishing sales. The company raised its profit forecast for the fiscal year based on what it called better-than-expected performance in its second quarter. The quarter included three major sales campaigns, making it Nordstrom's second-largest in terms of net sales.
- Ford Motor Co (F) said on Thursday it was increasing production after a surge in sales ignited by the U.S. "Cash for Clunkers" program. The No. 2 U.S. carmaker said it would build another 6,000 Focus sedans in the current quarter by adding overtime and a Saturday shift at an assembly plant in Wayne, Michigan. A second plant in Kansas City, Missouri, will increase output of the Escape, a small SUV, by another 3,500 vehicles, reversing plans to shut down for two days this month. The actions take Ford's third-quarter output in North America to 495,000 vehicles, up 18 percent over a year ago.
- Merrill Lynch, a unit of Bank of America Corp (BAC), is ramping up its recruitment programs for financial advisers with signing packages more generous than its 2006 and 2007 offerings, according to a story on the Financial Times website. Citing industry recruiters and unnamed people in the company, the story said Merrill Lynch Global Wealth Management is offering signing bonuses of 140 percent of the previous 12 months' "production" in an bid to attract top advisers. It also said the company is offering another 200 per cent over five years if advisers hit aggressive growth targets, according to the story.
Financial Times:
- Two freshly elected Democrats are wavering in their support of healthcare reform, as a rancorous summer series of “town hall” debates appears to be hardening opposition against the Obama administration. Frank Kratovil and Tom Perriello, who as freshmen congressmen would be expected to back the party leadership, both say proposals for expanding coverage to the uninsured are unacceptable in their current form and should focus more on cost savings. Billed as a chance to sell healthcare reform to the American people in small meetings across the country, the town hall debates have seen protesters screaming at their elected representatives. In spite of hopes by proponents of reform that voters would be turned off by the sometimes ugly scenes, a poll yesterday from USA Today gave an indication that the debates were having the opposite effect. Some 34 per cent of respondents said the demonstrations had made them more sympathetic to the protesters, while 21 per cent said they were less sympathetic. In the all-important independents grouping, 35 per cent against 16 per cent said they were now more sympathetic to the protesters – a margin of more than two to one. The Obama administration was on Thursday attempting to regain the initiative with a self-described “chain” e-mail from the senior adviser David Axelrod, pointing to a series of “myths and facts” in the debate. But the “myths” identified by David Axelrod, one of Mr Obama’s chief advisers, themselves highlight how the healthcare dispute has spilt out of the White House’s control.
Financial Post:
- Little-known lithium has emerged as the hottest commodity of the moment as investors look for a way to cash in on the anticipated flood of electric cars into the marketplace.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (EL), boosted target to $41.
- Reiterated Buy on (URBN).
CSFB:
- Rated (RS) Overweight, target $44.
Night Trading
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8:30 am EST
- The Consumer Price Index for July is estimated unch. versus a .7% gain in June.
- The CPI Ex Food & Energy for July is estimated to rise .1% versus a .2% increase in June.
9:15 am EST
- Industrial Production for July is estimated to rise .4% versus a -.4% decline in June.
- Capacity Utilization for July is estimated to rise to 68.3% versus a 68.0% gain in June.
10:00 am EST
- The Preliminary Univ. of Mich.
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BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares in the region. I expect US
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