Today's Headlines

Bloomberg:

• Seven EU Banks Fail Stress Tests With $4.5 Billion Shortfall. Seven of 91 European Union banks subject to stress tests failed with a combined capital shortfall of 3.5 billion euros ($4.5 billion), stirring concern the evaluations weren’t strict enough. Hypo Real Estate Holding AG, Agricultural Bank of Greece SA and five Spanish savings banks have insufficient reserves to maintain a Tier 1 capital ratio of at least 6 percent in the event of a recession and sovereign-debt crisis, lenders and regulators said today.The banks are in “close contact” with national authorities over the results and the need for more capital, said the Committee of European Banking Supervisors, which coordinated the tests. Governments are seeking to reassure investors about the health of financial institutions after the debt crisis pummeled the bonds of Greece, Spain and Portugal.“It would have aided credibility if there had been a higher number of fails and a higher amount of capital raised,” said Jon Peace, a London-based analyst at Nomura International Plc. “People will be surprised that it is as small as that.”The evaluations took into account potential losses only on government bonds the banks trade, rather than those they are holding to maturity, according to CEBS. That means the tests ignored the majority of banks’ holdings of sovereign debt, analysts said.
  
• GE(GE) Raises Dividend 20%, Extends Share Buyback to 2013. General Electric Co., emerging from the global recession with a hoard of cash, raised its quarterly dividend by 20 percent and will resume stock buybacks sooner than it had predicted. The shares rose.
  
• Copper Heads for Best Week Since February as Inventories Shrink. Copper rose for a fifth straight day, heading for the biggest weekly gain since February, as shrinking inventories signaled an improved outlook for demand. Stockpiles tracked by the London Metal Exchange have dropped for 22 straight weeks, the longest slide since 2004. Bookings to remove metal from warehouses increased 15 percent this week, the most in two months. Inventories also contracted in China, the world’s biggest user of the metal.
• Commodity Advance May Falter, Barclays Says: Technical Analysis. The recovery in commodities may be faltering as trading patterns are “throwing out bearish signals,” Barclays Capital said.
• Europe Shows Strength as U.K., German Indicators Top Forecasts. The British economy grew at the fastest pace in four years in the second quarter and German business confidence surged to a three-year high this month, indicating Europe’s recovery may be stronger than forecast. U.K. gross domestic product rose 1.1 percent in the three months through June, almost twice as fast as the 0.6 percent gain predicted by economists in a Bloomberg News survey, the Office for National Statistics said in London today. In Munich, the Ifo institute said its business climate index, based on a poll of 7,000 executives, jumped to 106.2 this month, confounding expectations of a decline. The reports suggest two of Europe’s largest economies are being buoyed by slides in the pound and the euro just as factories step up production to meet global demand.
• Obama Law May Cost Children Coverage as UnitedHealth(UNH) Ends Plans.
• New York Fed's Dahlgren to Direct Bank Supervision. Sarah Dahlgren, who manages assets acquired by the Federal Reserve Bank of New York during the financial crisis, will become its top bank supervisor after the regulatory overhaul enacted this week expanded the central bank’s authority.

Wall Street Journal:

• Seven European Banks Fail Stress Tests.
  
• Greek, Spanish Bank CDS Among Biggest Movers After Stress Tests. Credit default swaps on Greek and Spanish financial institutions were among the biggest movers after the Committee of European Banking Supervisors released euro-area bank stress-test results at noon EDT. The cost to insure debt from the National Bank of Greece using CDS fell 11% from Thursday's levels to 758 basis points, equivalent to $758,000 per year to cover $10 million of debt for five years. CDS on Greece's third-largest bank, EFG Eurobank Ergasias, fell 13% to 755 basis points. And CDS on Banco Popolare Societa Cooperativa and Banco de Sabadell fell 8% and 7% to 277 and 272 basis points, respectively. The cost to insure Greek debt against non-payment or default using CDS fell 1.55% from Thursday's levels to 749.3 basis points, according to Markit data, equivalent to $749,300 a year to cover $10 million. CDS on Portugal were 8.22% cheaper, Italy's were 4.82% cheaper, and Ireland's fell 2.48%%. By contrast, Spain's were roughly flat and CDS on Germany rose 2.45% after one of its banks failed the test. The iTraxx Europe Senior Financials index--a key barometer of financial institutions' health in the region--was trading around 132 basis points before the results, 1.5% better than Thursday's close, but after the results it deteriorated marginally to 133.8 basis points. Based on current CDS prices and assumed recovery levels, the probability of a Greek default is 48.41%, Portugal's is 20.88%, Ireland's is 18.86%, Italy's is 13.23%, Spain's is 16.13%, Germany's is 3.51%, Hungary's is 26.08%, France's is 6.08% and the U.K.'s is 5.67%.
• Nigeria Aims to Export 2.05 Million Barrels/Day Crude In September - Traders. Crude export programs from Nigeria's state oil company show it plans to ship at least 2.05 million barrels of oil a day in September, traders who have tracked details of the provisional plans said Friday. Nigeria is one of Africa's largest energy exporters and as a member of the Organisation for Petroleum Exporting Countries, its current quota stands at 1.673 million barrels a day.
• Cellphone Memory Revenue Expected to Jump 50% in 2010 - iSuppli. Global cellphone memory revenue is expected to make a sharp jump this year from 2009 as smartphones continue to use increasing densities of memory, an industry researcher said. Revenue is expected to climb 50% to $10.2 billion in 2010 for cellphone memory.
• Sanofi-Aventis Approaches Genzyme(GENZ) for Deal. France's Sanofi-Aventis SA has made an informal acquisition approach to biotechnology drug maker Genzyme Corp, people familiar with the matter said. The two sides have begun sounding out each other's interest in a deal before entering into talks, but the talks remain at early stages and a completed transaction is far away, these people said. Genzyme shares surged Friday afternoon, climbing $8.83, or 16%, to $63 on the Nasdaq Stock Market. Should Genzyme view Sanofi's offer as opportunistic, it's likely to spurn any transaction, said people familiar with the company. Genzyme is likely to push for a price that it views reflects the potential for a company turnaround, these people added.

CNBC:

• Republicans Urge Hearing for New Consumer Watchdog. The three Republican senators who backed the financial regulatory overhaul urged President Barack Obama not to appoint a new consumer protection watchdog while Congress is in recess.

NY Post:

• Koch Eyeing Pactiv(PTV). It's not the time to throw merger rumors about listed Pactiv Corp. in the trash. Koch Industries is now in deep discussions to buy Pactiv, the maker of Hefty bags -- with final bids likely due in early to mid-August, sources close to the situation said.
• Bloomy Blitz Aims to Halt Hedge Clippers. Mayor Bloomberg blasted Albany leaders yesterday for trying "to kill the golden goose here" by pushing a tax that would drive hedge funds out of the state -- as he quietly called key Wall Street figures to plead with them to stay. "When people say, 'Oh, the rich, they've got more money. We can tax more of them' -- they're going to move," Bloomberg told reporters. "You can't just keep going to taxing more. It doesn't work." Bloomberg was reacting to The Post's disclosure yesterday that Connecticut Gov. Jodi Rell is brazenly trying to poach hedge-fund managers by inviting them to an "intimate" dinner to discuss moving to the lower-taxed Nutmeg State.

Business Insider:

• 17 Reasons to Be Bullish.

TheStreet.com:

• Humbled Hedge Funds Bow to Investor Wishes. The mood has changed. Scrambling to attract investors, many funds are lowering fees and offering easier terms. "The top 10% of funds can still get whatever they want, but most of the rest are willing to negotiate concessions," says Jon Sundt, president of Altegris, a hedge fund adviser. Investors are demanding detailed lists of portfolio holdings, a big change from when many hedge funds provided only vague descriptions of their holdings in reports that came out monthly or quarterly.
• Morgan Stanley(MS) Looks Like FinReg Winner: Analysts.

Boston Globe:

• Ringing Up Sales. Phones are retailers’ latest route to back-to-school shoppers’ wallets. Merchants looking to boost sales during the critical back-to-school season are courting students where they spend most of their time — on their phones.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 27% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-four percent (44%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -17 (see trends).

Reuters:

• Ford(F) Profit Tops Street View; Shares Climb. Ford Motor Co (F) posted a stronger-than-expected quarterly profit of $2.6 billion and said it was on track for higher earnings and lower debt in 2011, sending its shares up 4 percent. The No. 2 U.S. automaker lowered the top end of its range for U.S. auto industry sales for 2010, citing in part the slow recovery in the U.S. economy. But it said the recovery was sustainable.

Kyodo News:

• North Korea Says Fresh U.S. Sanctions Will Have No Effect. A senior North Korean delegation official said here Friday that fresh sanctions imposed by the United States against North Korea over its nuclear weapons program will have little effect.
  

Referans:

• Kardemir Karabuk Demir Celik Sanayi & Ticaret AS, a Turkish steelmaker, cut prices for some of its steel products by $45 per ton because global demand continues to decline.