Today's Headlines

Bloomberg:

• U.S. Homebuilder Confidence Rose to Four-Month High. Confidence among U.S. homebuilders rose in October to the highest level in four months, a sign residential construction is stabilizing at depressed levels. The National Association of Home Builders/Wells Fargo confidence index increased to 16, exceeding the most optimistic forecast in a Bloomberg News survey, from 13 the prior month, data from the Washington-based group showed today. The gauge was projected to rise to 14, according to the median estimate in the Bloomberg survey. The builders group’s index of current single-family home sales increased in October to 16 from 13, and the measure of sales expectations for the next six months rose to 23 from 18. The gauge of buyer traffic increased to 11 from 9. The measure of builder confidence rose in all four U.S. regions.
• Fisher Says Fed Stimulus May Undercut Demand for Riskier Assets. Billionaire investor Kenneth Fisher said monetary stimulus from the Federal Reserve is unnecessary and could cause the dollar to weaken and reduce demand for riskier assets such as U.S. stocks. “There’s no reason for the United States to be doing quantitative easing,” said Fisher, who oversees more than $38 billion at Woodside, California-based Fisher Investments Inc. “It increases risk aversion for U.S. stocks. It’s got a slight tendency to want to motivate you to underweight U.S. stocks.” Policy makers should show more confidence that the recovery that began last year will eventually create jobs, and avoid sending signals that may derail it, Fisher said.
• Euribor at ECB Benchmark Rate of 1% Signals Banks are Returning to Health. Euro-region interbank borrowing costs rose to the same level as the European Central Bank’s main interest rate for the first time in 15 months, signaling greater willingness by financial institutions to lend to one another. The euro interbank offered rate, or Euribor, for three- month loans increased almost one basis point to 1 percent, the highest level since July 10, 2009, data from the European Banking Federation showed today. The rate has risen from a low of 0.634 percent on March 31 as bank stress tests published on July 23 showed just 7 of 91 institutions in the region needed to raise more capital to withstand a new sovereign-debt crisis. The increase in Euribor suggests more lenders are weaning themselves off ECB liquidity programs that were started to fight the global recession and then extended as the Greek debt crisis fueled concern some nations in the region could default.
• AMR(AMR), Delta(DAL) May Push U.S. Airlines to Biggest Profit Since 2007. Delta Air Lines Inc. and American Airlines parent AMR Corp. may help U.S. carriers report their biggest profit in three years this week, buoyed by higher fares and fuller planes. That would give the industry two consecutive profitable quarters for the first time since 2007, before the record-high jet fuel prices of 2008 and the recession.
• Russia Risks Mass Unrest Under Current Regime, Gorbachev Says. Russia’s leadership should start listening to the people or risk mass protests and disorder, said Mikhail Gorbachev, the last leader of the Soviet Union. “The most dangerous thing is if the tension building up in society suddenly bursts onto the street with such a force that we’ll all be in trouble,” Gorbachev, 79, said in an interview with Moscow-based Snob magazine. “Without modernization of democratic institutions there can’t be any progress.”
• St. Jude Medical(STJ) Agrees to Buy Devicemaker AGA Medical(AGAM) for $1.3 Billion. St. Jude Medical Inc. agreed to buy AGA Medical Holdings Inc. for about $1.08 billion to expand in heart devices. St. Jude will pay $20.80 a share in cash and stock, and also assume $225 million of Plymouth, Minnesota-based AGA Medical’s debt, according to a statement today. The price represents a premium of 41 percent over the Oct. 15 closing value of $14.71.
• Quicksilver(KWK) Rises After Saying Darden Family, SPO Partners Consider Buyout. Quicksilver Resources Inc. said it was contacted by shareholders who are considering taking the natural-gas explorer private. Quicksilver Resources climbed $2.13, or 16.9 percent, to $14.74 at 10:47 a.m. in New York Stock Exchange composite trading.
• U.S. Judge Pledges Constitutional Ruling on Obama Health-Care by Year-End. A federal judge in Virginia said he’ll rule by yearend whether President Barack Obama’s health care overhaul is constitutional, adding that his decision will be a “brief stop” in the case on its way to the Supreme Court.
• Hasbro(HAS) Profit Rises on Sales of Preschool Products.
  

CNBC:

• Fed's Lockhart Says Inclined to Ease Policy Further. The U.S. economy is weak enough to warrant further monetary easing by the Federal Reserve, though such a policy carries risks and should not be taken lightly, Atlanta Fed President Dennis Lockhart said on Monday.
• JPMorgan(JPM): Foreclosure Process Can Be Fixed. Foreclosure-process errors that lead to putbacks of questionable home loans could cost the banking industry up to $120 billion, according to a note J.P. Morgan sent to clients late Friday.

Business Insider:

• ..And the Layoffs Just Hit Citadel Securities.
• Apple(AAPL) Earnings Preview.
• And Now, Here's The First 11 State Pension Funds That Will Run Out Of Money.
  

Zero Hedge:

• Bearish VIX Bets Surge to 2010 Highs. (graph)

MarketWatch.com:

• Industrial Production Dips in September. Industrial production slipped in September, the first drop after six months of gains, according to data released by the Federal Reserve on Monday. Production slipped 0.2% compared to August, though it was up 5.4% from the September 2009. Economists polled by MarketWatch had expected a 0.2% increase. “U.S. manufacturing output contracted by 0.2% in September, illustrating that the previously robust recovery in the factory sector is definitely behind us now and this could even be the start of a renewed downturn,” said Paul Ashworth, senior U.S. economist at Capital Economics.
• Citi(C) Results Halt Bleeding in Financial Shares. Concerns about the foreclosure fraud investigation took a back seat Monday, as bank stocks reversed some of their recent losses after Citigroup Inc.’s quarterly profit beat forecasts. The SPDR KBW Bank exchange-traded fund rose more than 2% Monday.

New York Times:

• YouTube Gains in Europe as It Agrees to Music Copyrights.

CNNMoney:

• NATO Official: Bin Laden, Deputy Hiding in Northwest Pakistan.

Washington Post:

• New Post Poll Finds Negativity Toward Federal Workers. More than half of Americans say they think that federal workers are overpaid for the work they do, and more than a third think they are less qualified than those working in the private sector, according to a Washington Post poll. Half also say the men and women who keep the government running do not work as hard as employees at private companies. The critical views of federal workers - just one in seven of whom works in the D.C. area - echo the anti-Washington sentiment roiling the midterm elections, as some Americans lose confidence in their government to solve the country's problems.
• U.S. Says Chinese Businesses and Banks are Bypassing U.N. Sanctions Against Iran. The Obama administration has concluded that Chinese firms are helping Iran to improve its missile technology and develop nuclear weapons, and has asked China to stop such activity, a senior U.S. official said.

AOL News:

• Just How Lousy is the Economic Recovery? (graphs)

Politico:

• Poll: Support for Health Reform Drops. According to the Kaiser Family Foundation October Tracking Poll out Monday morning, overall support for the law has dropped to 42 percent – down seven points in a month. The percentage of those saying they have an unfavorable view of the bill rose four points to 44 percent.

Rasmussen Reports:

• 51% Expect Health Care Plan to Increase Deficit. Nineteen percent (19%) say the plan will reduce the deficit.

Reuters:

• Defiant Marseille, Heart of France's Social Unrest. Garbage piled in the streets, oil tankers idling off the coast, lines of anxious drivers at petrol stations: the port of Marseille is making a name for itself as the capital of France's social unrest. As strikes against pension reform sweep France, the country's second city and biggest port has claimed centre stage with its three-week-old dockworker strike depleting fuel depots just as refinery workers joined nationwide strikes over pensions.

Naftemporiki:

• The European Union's statistical service, Eurostat, will revise Greece's budget deficit for last year to 15.5% of GDP. The deficit figures for 2006 to 2009 will increase following the inclusion of losses at state-controlled companies, the value of currency swaps linked to government bonds in 2001 and to account for lower-than-reported surpluses at certain state-run insurance funds.

Folha de S. Paulo:

• Petroleo Brasileiro SA(PBR) CEO Jose Sergio Gabrielli expects a victory of presidential runner-up Jose Serra could lead to the sale of government assets in the state-run oil producer.

Shanghai Daily:

• Apple(AAPL) to Increase iPad Sales Outlets. APPLE Inc has signed an agreement with three Chinese distributors to provide more sites to sell the iPad, the world's most popular tablet personal computer, industry officials said yesterday. Up until now, iPads were sold only in a limited number of Apple-operated retail stores and authorized resellers in the largest cities. These retailers couldn't meet the huge demand for the 9.7-inch slate computer. The agreement is expected to help Apple, which now has only four retail stores in Beijing and Shanghai, to penetrate wider into smaller population centers in China. The three distributors are ECS Technology, Changhong IT and Highly Information Industry Co, a subsidiary of home-appliance giant TCL Corp, industry sources told Shanghai Daily yesterday.