Today's Headlines

Bloomberg:

- Home Depot Inc.(HD), the largest home- improvement retailer, reported second-quarter profit that fell less than analysts estimated and increased its full-year earnings forecast after reducing operating expenses. Home Depot rose 83 cents, or 3.2 percent, to $26.94 at 10:40 a.m. in New York Stock Exchange composite trading.

- The Baltic Dry Index, a measure of shipping costs for commodities, fell for the first time in four session as rates for the larger coal and iron-ore transporters had the steepest drop in almost two weeks. The index tracking transport costs on international trade routes slid 70 points, or 2.5%, to 2,704 points.

- Cap-and-trade legislation to limit U.S. carbon dioxide emissions has “gotten out of control” and needs to be scaled back in Congress, said former Democratic Senator Timothy Wirth. “The Republicans are right -- it’s a cap-and-tax bill,” Wirth, a climate-change negotiator during President Bill Clinton’s administration, said in an Aug. 14 interview. “That’s what it is because they are raising revenue to do all sorts of things, especially to take care of the coal industry, and it makes no sense.” “I’m not critical of cap-and-trade,” said Wirth, head of the UN Foundation, a philanthropy established in 1998 with $1 billion from Ted Turner, founder of the CNN cable network. “But it has to be used in a targeted and disciplined way, and what has happened is it’s gotten out of control.” Wirth, who represented Colorado in the Senate, says the House-passed plan is “too broad across the economy.” Critics such as billionaire investor Warren Buffett say cap-and-trade would amount to a regressive tax and burden businesses and consumers. Four Democratic lawmakers have said the Senate should scrap attempts to pass the cap-and-trade provisions of the legislation this year, and focus instead on a narrower bill requiring the use of renewable energy. Senate Majority Leader Harry Reid, a Nevada Democrat, said he is confident an energy bill will be passed this year including climate provisions. The Senate remains under pressure to pass a cap-and-trade bill because failure to act would leave regulation of carbon emissions in the hands of the Environmental Protection Agency, which has asserted its right to do so, according to Nikki Roy, who monitors Congress for the Pew Center on Global Climate Change in Arlington, Virginia. EPA regulations would trigger a raft of lawsuits, “delay regulatory certainty” for businesses and postpone the unleashing of low-emissions energy technology needed for a new, carbon-constrained world, he said.

- Wholesale prices in the U.S. fell more than forecast in July as energy costs receded, capping the biggest 12-month drop on record and showing inflation will not be an immediate concern for Federal Reserve policy makers. The 0.9 percent decrease in prices paid to factories, farmers and other producers followed a 1.8 percent gain in June, the Labor Department said today in Washington. Excluding food and fuel, so-called core prices unexpectedly fell 0.1 percent. A record amount of excess capacity will prevent production bottlenecks from developing, indicating wholesale prices will be slow to recover even as the economy improves. A lack of inflation was one reason Fed policy makers last week reiterated a pledge to keep the benchmark interest low for an “extended period.” “If you have an environment where excess stock remains large and inflation continues to be slow, the Fed will want to keep monetary policy easing,” Michelle Meyer, an economist at Barclays Capital Inc. in New York, said before the report. “The fact you have so much slack in the economy puts downward pressure on prices.”

- Target Corp.(TGT), the second-largest U.S. discount retailer, reported second-quarter profit that fell less than analysts estimated. The shares rose as much as 8.2 percent in New York trading.

- A lower percentage of Wall Street job applicants passed the third and final test to become Chartered Financial Analysts, a designation that offers an edge during Wall Street’s worst shakeout in at least three decades. Forty-nine percent of candidates passed the third stage of the test, down from 53 percent last year, the Charlottesville, Virginia-based CFA Institute said in an e-mailed statement today. Forty-one percent of the people who took the Level 2 test passed, down from 46 percent a year ago.

CNBC:

- Federal securities officials warned investors for the first time Tuesday that leveraged exchange-traded funds could lead to big losses. The warning by the U.S. Securities and Exchange Commission on leveraged ETFs follows similar statements from the financial industry and the secretary of state in Massachusetts, who is known as outspoken on securities issues. The funds have drawn scrutiny because they can yield big losses for investors over time in choppy markets. In an alert to investors issued Tuesday the SEC urged investors to carefully consider the details of these funds. "It is possible you could suffer significant losses even if the long-term performance of the index showed a gain," the SEC said.

MarketWatch:
- The global recession is now over and a recovery has begun, Olivier Blanchard, the top economist for the International Monetary Fund, said Tuesday. The global recession has not been typical, and the recovery won't be either, he said. "One should not expect very high growth rates in the recovery."

CNNMoney:

- The iPhone, which has had a tough time competing in the Japanese market, finally broke through in July with the launch of the iPhone 3GS. According to a report in Electronista, market data from Gfk Japan shows the 32 GB iPhone in the No. 1 spot for July, ahead of Japanese-made phones from Sharp, Panasonic (PC), NEC, Casio and Sony Ericsson (a Japanese/Swedish joint venture).

Washington Post:

- President Obama made clear Monday that he favors the repeal of the Defense of Marriage Act, and intends to ask Congress to repeal the 13-year-old law that denies benefits to domestic partners of federal employees and allows states to reject same-sex marriages performed in other states.

- The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, according to bankers and economists, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind.

Miami Herald:

- An unclassified U.S. intelligence report says Venezuelan President Hugo Chávez is ``moving forcefully'' to stifle media criticism by closing scores of radio stations, tightening controls on one TV station and maneuvering to seize control of another.

LA Times:

- The busiest U.S. seaport complex won't fully recover from the economic downturn until 2013, a report says. Imports at both facilities fell in July from a year earlier.

Rassmussen:

- Republican candidates have now matched their biggest lead over Democrats of the past several years on the Generic Congressional Ballot. The latest Rasmussen Reports national telephone survey shows that 43% would vote for their district’s Republican congressional candidate while 38% would opt for his or her Democratic opponent. The level of support for Democratic candidates is unchanged this week, but backing for GOP candidates rose one point from a week ago. This is now the eighth straight week Republicans have led on the Generic Ballot.

Politico:

- The House Republican Conference digs in today to a fact reported recently by Bloomberg's Tim Burger: That the pharmaceutical lobby, PhRMA, has hired David Axelrod's AKPD Media — a fact that raises eyebrows because Axelrod sold the firm under an agreement that left it owing him $2 million, a lot of money for a political media company. It's hard to imagine a situation in which, say, Karl Rove was still getting checks from a firm that was, in turn, employed by the drug lobby not drawing fire from the left, and Axelrod's arrangement is, a bit belatedly, getting that attention.

- When you’re Barack Obama and you’ve lost Jon Stewart, you’ve got a problem.

“Mr. President,” the “Daily Show” host said Monday night, “I can’t tell if you’re a Jedi — 10 steps ahead of everything — or if this whole health-care thing is kickin’ your [rear.]” White House officials, by acknowledging that a public option (or government plan) is not essential to achieving health care reform, may have improved their chances of ultimately getting a bill. In the meantime, though, they have touched off the most ferocious backlash among liberal talking heads since President Obama took office.

Portfolio.com:

- Hewlett-Packard Co(HPQ) is considering selling or shutting parts of its outsourcing business to focus on the higher-margin areas of its technology services offering, people familiar with the matter said. A year after buying Electronic Data Systems for $13 billion, HP executives are discussing the possibility of divesting parts of the outsourcing operations, especially in its business process outsourcing (BPO) arm, sources told Reuters.

Reuters:
- The chief regulator of U.S. commodities markets, Gary Gensler, is serious about limiting speculation in energy futures trading and will move to provide details about managed funds' contract positions in an attempt to make markets more transparent. "I think, as chairman, we have to seriously consider" position limits, he said. "Position limits help protect the markets from highly concentrated positions that can be distorting in difficult periods," he said. Gensler, the former Goldman Sachs executive charged with overhauling the volatile commodity trading world, held up agriculture regulation as a model for energy trading where prices have whipsawed over the past several months. To protect against market manipulation, the CFTC sets limits on the contracts each investor can hold in some agricultural commodities. But for energy products, such as oil, the limits are set by the futures exchanges. The accountability limits set by futures exchanges, however, are not "stop" or "yield" signs that prevent market players from taking highly concentrated positions that can distort market dynamics, Gensler said. "They're sort of honk-as-you-go-by signs," he said, noting that in the last 12 months, accountability levels in four major energy products were exceeded by about 70 parties. Gensler said the agency would also subject a number of exempt contracts to oversight. "This is not a small number." We're going to have a series of these that we're going to try to put out in the next couple of months." Starting this month, the CFTC will issue expanded weekly trader reports including four categories: producers and merchants, swap dealers, hedge funds, and other participants.

- August retail sales in the United States could prove stronger after a poor reading in July that was "misleading", hedge fund manager Barton Biggs told Reuters Television on Tuesday. Biggs, whose New York-based Traxis Partners manages close to $1 billion, said in an interview that July retail sales were skewed because a number of states moved their sales tax holidays for back-to-school sales to August, from July last year. "That caused people to delay (purchases) and pushed sales into August," Biggs said. The unexpected drop in July sales, after a rise in June, dented optimism after numerous previous data points had suggested the U.S. economy was on the road to recovery.

Financial Times:
- The Obama administration was on Tuesday scrambling to contain a growing backlash from liberal Democrats that could prove fatal to his hopes of pushing through healthcare reform. In a letter to Kathleen Sibelius, the secretary for health and human services, 60 Democratic lawmakers in the House of Representatives warned that they would vote against healthcare reform if it excluded a public insurance option that would provide a state-run alternative to private insurance plans for low-income people. That would leave Mr Obama needing 22 Republican votes in the lower chamber – a very tall order. “Americans deserve reform that is real – not smoke and mirrors,” said the letter. “To take the public option off the table would be a grave error; passage in the House of Representatives depends upon inclusion of it.” The letter, which crystallizes what appears to be an unbridgeable divide between conservative “blue dog” and “progressive” Democrats, follows a series of recent White House hints that it would be prepared to junk the public option in order to get an overall bill passed. “If the president can’t overcome this divide then this could kill his chances of enacting healthcare reform,” said David Gergen, a leading political analyst. “The White House needs to radically rethink how it is managing this debate.” Tuesday’s letter also reinforced the increasingly wide gulf between the House and the Senate. Centrist Democratic senators, including Max Baucus, chairman of the influential finance committee, and Kent Conrad, chairman of the budget committee, have made it clear that a bill that included a public option would not pass in the Senate.

- Election officials in Afghanistan braced themselves on Tuesday for one of the world’s most challenging polls as Taliban insurgents escalated their offensive on Kabul, the capital, ahead of Thursday’s vote. A wave of attacks struck Kabul, killing 13 people, among them Nato troops and United Nations staff, and injuring more than 50. Taliban militants have vowed to disrupt the presidential and provincial elections. The attacks come in defiance of efforts by the government to buy a temporary peace with Taliban commanders and declarations of a cessation of hostilities by Nato and Afghan forces on polling day.

Globe and Mail:

- It's been in the spotlight more than almost any other product of the information age, but the iPhone is becoming hard to find in Canada. Apple Inc.(AAPL) is shipping limited supplies of its smart phone to Rogers Communications Inc., the only Canadian wireless operator able to carry the device, as the California company scrambles to try to meet global demand that appears to have exceeded its own forecasts. Rogers is advising shoppers that it is out of stock of Apple's latest device, the iPhone 3GS, which was launched in June, as well as earlier models introduced last summer.

Kyodo News:

- Global LCD TV shipments are estimated to increase 10-15% to 155 million units in 2010 amid a gradually recovering global economy, according to market sources. The sources indicated that vendors are optimistic about the 2010 market and have started talking with LCD panel makers about panel supply for 2010. The sources noted that better-than-expected LCD TV sales in the North America market helped boost global LCD TV shipments in the first half of 2009 to 56 million units, and if MoniTV sales were included, the first-half shipments reached 64 million units. With the second half of the year being the peak season for LCD TV sales, global LCD TV shipments for the entire 2009 may exceed 130 million units, the sources said. Panel supply remains tight due to glass substrate shortages, and current inventories for notebook and monitor panels are below two weeks, while monitor and notebook inventory levels in the end market are about 3-4 weeks, the sources added.