Today's Headlines

Bloomberg:

• Egypt's President Mubarak May Step Down as Army Meets. Egyptian President Hosni Mubarak may announce today whether he will step down as the army discusses measures “to safeguard the interests” of the country after more than two weeks of protests demanding his ouster. Mubarak will decide “within hours” whether to resign, Cabinet spokesman Magdi Rady said in a telephone interview today. He will give an evening address from the presidential palace in Cairo, state television said. Egypt’s top military body decided today it will stay in permanent session in response to the “legitimate” demands of the Egyptian people, according to a statement read on state television described as “Declaration 1.”
• U.S. Jobless Claims Fall to 383,000, Lowest Level Since July 2008. The number of Americans filing first-time claims for unemployment insurance fell to the lowest level since July 2008 last week, showing further strength in the labor market after the jobless rate declined to a 21-month low. Applications for jobless benefits decreased by 36,000, more than forecast, to 383,000 in the week ended Feb. 4, Labor Department figures showed today. Economists forecast claims would fall to 410,000, according to the median estimate in a Bloomberg News survey. “The labor market is improving,” said Brian Jones, an economist at Societe Generale in New York who projected claims would drop to 385,000. “Fingers crossed, if the weather can hold off this week, we should get a pretty decent snap back in non-farm payrolls and maybe another drop in the jobless rate.” The four-week moving average, a less volatile measure, fell to 415,500 from 431,500 the prior week. The four-week moving average, a less volatile measure, fell to 415,500 from 431,500 the prior week. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.1 percent.
• Portugal Leads Rise in European Sovereign Credit-Default Swaps. Portugal led an increase in the cost of insuring European government debt, according to CMA. Credit-default swaps on Portuguese sovereign debt jumped 12 basis points to 442, helping push the Markit iTraxx SovX Western Europe Index of swaps on 15 governments up 1.5 basis points to 169.5. Contracts on Greece increased 14 basis points to 829, Italy climbed 4 to 177, Spain rose 4.5 to 240 and Ireland was 4 higher at 564.
  
• Fed's Warsh Resigns; Bernanke Adviser Questioned Stimulus. Federal Reserve Governor Kevin Warsh, who was one of Chairman Ben S. Bernanke’s closest financial-crisis advisers before becoming the only governor to question the expansion of record monetary stimulus in November, resigned after five years at the central bank. Warsh, 40, a former investment banker who was the youngest- ever Fed governor when then-President George W. Bush appointed him in 2006, will leave “on or around March 31,” he said in a letter today to President Barack Obama that was released by the Fed in Washington. His departure may give Bernanke a stronger hand to complete or potentially expand $600 billion in Treasury purchases through June. “You lose a forceful internal advocate for ending QE and trying to renormalize policy quicker,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007, referring to the stimulus program known as quantitative easing. His resignation opens a second vacancy on the seven-member Board of Governors and leaves Elizabeth Duke, a former community banker, as the only governor not appointed or reappointed by Obama.
• OPEC to Reduce Exports as Winter Demand Ebbs, Oil Movements Says. The Organization of Petroleum Exporting Countries will reduce oil shipments this month as demand for winter fuels in the northern hemisphere fades, according to tanker-tracker Oil Movements. Loadings will slip to 23.79 million barrels a day in the four weeks to Feb. 26, down 0.6 percent from 23.94 million barrels a day in the period to Jan. 29, the tanker-tracker said today in a report. Global crude demand will slide by 0.4 percent in the second quarter while refiners perform seasonal maintenance, according to OPEC. Exports from Middle Eastern producers, including non-OPEC members Oman and Yemen, will fall by 1.6 percent to 17.58 million barrels a day, Oil Movements’ data show. A total of 484.73 million barrels of crude will be on board tankers in the month to Feb. 26, down 0.3 percent from the Jan. 29 figure of 486.08 million, according to Oil Movements, which calculates shipments by keeping a tally of tanker-rental agreements.
• CFTC's Gensler Backs End-User Exemption in Swaps Margin Rules. U.S. Commodity Futures Trading Commission chairman Gary Gensler said regulators shouldn’t impose margin requirements on firms that use derivatives to hedge business risks, aligning himself with lawmakers and companies that have urged restraint in Dodd-Frank rulemaking. “Proposed rules on margin requirements should focus only on transactions between financial entities rather than those transactions that involve non-financial end-users,” Gensler said today in testimony prepared for a House Agriculture Committee hearing.
• Goldman(GS) Advises Keeping Soybean, Cotton, Corn Bets. Investors should maintain bets on higher prices for soybeans, cotton and corn, Goldman Sachs Group Inc. said after the U.S. Department of Agriculture lowered stockpile estimates.
• Cotton Surges to Record for Second Day on U.S. Export Sales. Cotton futures climbed to a record for the second straight day after exports jumped from U.S., the world’s leading shipper. In the week ended Feb. 3, export sales rose 26 percent from a week earlier, the U.S. Department of Agriculture said today. Global output will be 115.25 million bales in the year ending July 31, down 0.2 percent from a January forecast, with demand at 116.55 million, the USDA said yesterday. Prices have more than doubled in the past 12 months. Cotton for March delivery advanced 6.76 cents, or 3.7 percent, to $1.8734 a pound at 10:12 a.m. on ICE Futures U.S. in New York. Earlier, the most-active contract jumped by the exchange limit of 7 cents to an all-time high of $1.8758. The price gained 7.6 percent in the previous three days.
• Corn Jumps to 30-Month High on Export Demand. Corn rose to a 30-month high for a second day on signs that global demand is increasing for supplies from the U.S., the world’s largest grower and exporter. The U.S. Department of Agriculture reported export sales in the week ended Feb. 3 were 51 percent above the average during the prior four weeks. The USDA said yesterday that U.S. inventories before the harvest will be equal to about 18 days of consumption, on par with the record low in 1996. Before today, prices jumped 95 percent in the past year. Corn futures for March delivery rose 5 cents, or 0.7 percent, to $7.03 a bushel at 10:51 a.m. on the Chicago Board of Trade, after reaching $7.045, the highest price for the most- active contract since July 2008.
• Wheat Hoarding Likely to be 'Widespread,' Prompting Price Gains, UN Says. Global wheat harvests may trail demand for a second year, spurring hoarding and further price gains, said the United Nations. “Whenever you get the market as tight as we are now, hoarding becomes widespread,” Abdolreza Abbassian, a senior economist at the UN Food and Agriculture Organization, said in an interview by phone from Rome. Wheat in Chicago, the global benchmark, soared 72 percent in the past year as drought and floods ruined crops.
• American Eagle(AEO) Gains on Speculation U.S. Teen-Clothing Retailer is Target. American Eagle Outfitters Inc. rose the most in almost two years in New York trading on speculation the Pittsburgh-based teen-clothing retailer may be a takeover target. The shares rose $1.36, or 9.3 percent, to $16.05 at 1:47 p.m. in New York Stock Exchange composite trading.
• Budget Deficit in U.S. Rose to $49.8 Billion as Spending Grew. The U.S. government posted a wider budget deficit in January as spending climbed from a year earlier when outlays were depressed by the New Year’s holiday. The gap totaled $49.8 billion last month, lower than the median forecast of economists surveyed by Bloomberg News, compared with a $42.6 billion shortfall in January 2010, figures from the Treasury Department showed today in Washington. An 11 percent increase in spending exceeded a 10 percent gain in revenue that reflected growing income tax receipts as the economy improved.
• Dish(DISH) Shares Jump After Credit Suisse Says AT&T May Bid. Dish Network Corp., the second- largest U.S. satellite-television provider, rose as much as 8.2 percent after Credit Suisse Group AG said AT&T Inc. may make a bid to buy the company.

Wall Street Journal:

• Egypt Military Signals Move for Control. The fate of Egyptian President Hosni Mubarak remains in the balance as initial reports saying the embattled leader is expected to announce he will step aside were denied later Thursday by the country's Information Minister, adding to the uncertainty as thousands gathered in central Cairo's Tahrir Square. Meanwhile, the army moved to assert control over the country, after more than two weeks of massive protests against Mr. Mubarak's rule.
• Egypt CDS Rallies on Mubarak Exit Chatter. News that Egyptian President Hosni Mubarak may step down has sparked a recovery in U.S. shares and contributed to a rally in Egypt’s sovereign credit-default swaps. But undercurrents of concern about a potentially messy transition are also evident. The cost to insure $10 million of five-year Egyptian debt through credit-default swaps dropped to $335,000 as President Mubarak’s departure looked increasingly likely. That insurance cost $385,000 earlier in the day. Prior to the crisis, Egyptian CDS traded at $312,000.
• Advertisers Weigh AOL(AOL), Politics. AOL Inc. bought the Huffington Post in a bid to draw more readers and advertisers. But some Madison Avenue executives are expressing concerns about the liberal-leaning nature of the site and its potential to taint the broader AOL brand.
• Chinese Economist Warns of Risks in Freddie Mac, Fannie Mae Bonds. A popular Chinese economist on Thursday said China should be aware of risks in its holdings of debt issued by U.S. government-controlled mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC), and suggested that China sell the securities soon.
• On the Runway: Six Trends to Watch. Designers' Plans For Fall Include Tunics, Long Skirts, Lace, Heirloom Looks—And Some Surprises.

CNBC.com:

• Wall Street Whistleblowers Ready to Cash In.

Business Insider:

• Jim Chanos: The Muni Situation is Ominous, and These States are Basically Insolvent. He doesn't sound like he's quite on board with the big doom predictions, but Jim Chanos is clearly more in the Meredith Whitney camp than many of the other investors who have chimed in on the muni question.
• The World is About to Hit Its Oil Price "Recession Threshold". (chart)
  

Zero Hedge:

• Stratfor Reports Mubarak Has Already Left Country, Speech Prerecorded.

LA Times:

• California Plans $2-Billion Program to Help Distressed Homeowners.

Politico:

• Senator Jon Kyl Announces His Retirement From Senate. Arizona Sen. Jon Kyl announced Thursday that he would retire after his current term, creating the fifth open seat Senate race of the 2012 cycle. Speaking at a press conference in Phoenix, the Senate’s second-ranking Republican said, “There’s more to life than being a United States senator. I never anticipated I would be in public service for 26 years.”

Reuters:

• Might Barbie and GI Joe Slug it Out Over LeapFrog(LF)?
• Private Equity to Cook Up Red Robin(RRGB) Deal? Casual dining chain Red Robin Gourmet Burgers Inc may have put itself on private equity's M&A menu by agreeing to amend its takeover defences and consider any offers -- as demanded by two of its biggest shareholders. A private equity buyout looks more probable, given the brand's niche positioning in the restaurant space.
• Pro-Reform Saudi Activists Launch Political Party. Saudi Islamists and opposition activists have launched a political party in a rare challenge to the absolute monarchy, asking King Abdullah for a voice in the Gulf Arab state's governance, its organizers said Thursday. The move was apparently prompted by popular revolts in the Arab world that toppled Tunisia's president last month and have loosened the grip of Egypt's autocratic leader. But it was more an act of protest than an effective start-up of a political party since Saudi Arabia has no elected parliament and parties and public dissent are banned by the Al Saud monarchy, which rules the world's No. 1 oil exporting country in alliance with Sunni Muslim clerics.

Frankfurter Allgemeine Zeitung:

• Holders of bonds in indebted euro-area governments should be forced to take losses of 30 to 40% to help Europe overcome its debt crisis, Harvard University professor Kenneth Rogoff was quoted as saying. Countries such as Greece and Portugal should be urged to leave the euro regino for 10-15 years to help solve Europe's debt crisis, Rogoff said.

ShanghaiDaily.com:

• Shanghai New Home Sales Tumble 25%.