Today's Headlines

Bloomberg:

• Libya Split as Qaddafi Holds Tripoli, Rebels Organize in East. Libyans claiming to have ousted Muammar Qaddafi’s troops organized committees to run and defend their eastern cities, as forces loyal to the leader retained control of the capital, Tripoli. In Benghazi, armed members of popular committees surrounded a courthouse as women held a sit-in after marching from the now- deserted army base, a resident said. Two air force pilots bailed out of their plane and let it crash near Benghazi after refusing orders to attack the city, local newspaper Quryna said, and the army commander at Tobruk in the northeast said his unit has joined the rebels. In Tripoli, where heavy gunfire was heard overnight, protesters stayed off the streets as the government urged people to go back to work and show that life is normal, the Associated Press said.
• Oil Rallies, Stocks Retreat on Libya Revolt; Euro Gains. Oil rallied, touching $100 a barrel in New York for the first time since October 2008, as Libya’s uprising threatened to halt exports. Stocks fell amid concern higher energy costs will slow economic growth, while Treasuries erased gains after a $35 billion auction. Crude for April delivery climbed as much as 4.8 percent to $100 at 1:07 p.m. in New York and gasoline and heating oil surged. Concern that surging fuel prices will derail the global economic recovery grew as governments evacuated thousands of expatriates from Libya and opponents to Muammar Qaddafi took control of eastern port cities in Africa’s third-biggest crude supplier. An extended $10 rise in oil cuts 0.5 percentage point off U.S. growth over two years, according to Deutsche Bank AG. Gasoline rose for a third day on the New York Mercantile Exchange, gaining 4.7 percent to a more than two-year high of $2.7236 a gallon. Brent oil for April delivery climbed 5.3 percent to $111.37 a barrel. The cost of protecting U.S. investment-grade corporate bonds from default rose for a third day to the highest in almost four weeks. The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, rose 2.9 basis points to a mid-price of 86.69 basis points, according to index administrator Markit Group Ltd.
• Qaddafi's Regime Will Fall in Days, Houni Tells Al-Hayat. Libyan leader Muammar Qaddafi’s regime has a matter days before it falls, Al-Hayat reported, citing Major Abdel Moneim al-Houni, a former member of Libya’s revolutionary command council who resigned as the country’s ambassador to the Arab League on Feb. 20.
• Iron-Ore Haulage Rates Fall Most in Seven Weeks on Fleet Growth. The cost of hiring capesize ships to haul iron ore and coal fell the most in almost seven weeks amid prospects for an expanding fleet. Hire rates dropped 11% to $5,339 a day, compared with operating costs estimated at about $7,000 by Dag Kilen, an analyst with RS Platou Markets AS in Oslo. Today's decline was the biggest since Jan. 6th and the seventh in a row. The capesize fleet will swell by 17% in 2011, almost triple the 6% increase in demand to ship the vessels' primary cargo of iron ore, Clarkson Plc, the biggest shipbroker, estimates. Capesize rents have plunged 73% this year after sliding by almost half in 2010.
• Oil May Surge to $220 if Libya, Algeria Halt, Nomura Says. Oil prices may surge to $220 a barrel if political unrest in North Africa halts exports from Libya and Algeria, Nomura Holdings Inc. said.
• Gold Heads for Longest Rally in Six Months on Libyan Turmoil. Gold rose, heading for the longest rally in six months, as mounting tensions in Libya and the Middle East boosted demand for an investment haven. Libyan leader Muammar Qaddafi has vowed to fight a growing rebellion until his “last drop of blood.” Gold climbed for the seventh straight session, the longest advance since early August. Yesterday, the price reached $1,411.50 an ounce, a seven-week high. The metal climbed to a record of $1,432.50 on Dec. 7.
• Copper Drops to Four-Week Low as Middle East Turmoil May Derail Economies. Copper fell to a four-week low on speculation that unrest in North Africa and the Middle East will derail recovering economies as oil prices jump. “We’ve seen that every time we get a big jump in oil prices, it seems to manifest itself in poor economic activity and a slowdown,” said Wayne Atwell, a managing director at Casimir Capital LP in New York. “There are a lot of reasons to be anxious right now.” Copper futures for May delivery dropped 8.5 cents, or 1.9 percent, to $4.278 a pound at 10:16 a.m. on the Comex in New York.
• Corporate Bond Risk Rises in Europe, Credit-Default Swaps Show. The cost of insuring against default on European corporate bonds rose, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings climbed 9 basis points to 400, according to JPMorgan Chase & Co. at 3 p.m. in London. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose for a fifth day, increasing 1.75 basis points to 101.75. The Markit iTraxx Financial Index of 25 banks and insurers fell 0.25 basis points to 165 and the subordinated index was 8 higher at 284 basis points.
• King Abdullah Pours Money Into Saudi Housing, Welfare Amid Regional Unrest. Saudi Arabia’s King Abdullah boosted spending on housing by 40 billion riyals ($10.7 billion), and earmarked more funds for education and social welfare amid popular uprisings sweeping the Arab world. The social security budget was raised by 1 billion riyals, according to a statement read on state-run television. King Abdullah also ordered the creation of 1,200 jobs in supervision programs and made permanent a 15 percent cost-of-living allowance for government employees, according to the statement. Saudi Arabia, the world’s largest oil supplier, is spending more on social programs as political unrest roils the region.
• SEC's Top Lawyer Becker Sued for Inheriting Madoff Ponzi Profits. David M. Becker, the departing chief lawyer at the U.S. Securities and Exchange Commission, said he had no detailed knowledge of how his parents came to earn $1.5 million from an investment in Bernard Madoff’s Ponzi scheme. Becker and his brothers, who inherited the money upon his mother’s death in 2004, were sued in bankruptcy court in New York by the trustee liquidating Madoff’s firm, Irving H. Picard, who seeks to recover the funds as a fictitious gain.
• Fed's Hoenig Says U.S. Should Break Up Largest Financial Firms. Federal Reserve Bank of Kansas City President Thomas Hoenig said U.S. regulators should avert another crisis by breaking up large financial institutions that pose a threat “to our capitalistic system.” “I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the U.S. economy,” Hoenig said today in a speech in Washington. Hoenig, the lone dissenter from every Fed meeting in 2010, has argued that the most sweeping overhaul of U.S. financial regulation since the Great Depression won’t prevent the largest banks from taking excessive risks and increasing market share. “They must be broken up. We must not allow organizations operating under the safety net to pursue high-risk activities and we cannot let large organizations put our financial system at risk.”“In my view, it is even worse than before the crisis,” Hoenig said at a luncheon for Women in Housing and Finance. “As well-intentioned as the Dodd-Frank Act may be, it will not improve outcomes,” he said. “Protected institutions must be limited in their risk activities because there is no end to their appetite for risk and no perceived end to the public purse that protects them,” Hoenig said.

Wall Street Journal:

• Gadhafi Forces Open Fire in Tripoli. Heavy gunfire broke out in Libya's capital Wednesday as forces of Col. Moammar Gadhafi opened fire in the streets a day after the longtime leader vowed to defend his rule and called on supporters to crack down on antigovernment protesters. The fighting in Tripoli came as the opposition reportedly seized control of the coastal city of Misurata, with witnesses saying people were honking their horns and raising pre-Gadhafi flags from the monarchy to celebrate. Misurata would be the first major city in the west to fall to antigovernment forces, which have mainly been concentrated in the east.
• Violence Flares Amid Greek Strike. Greece was paralyzed Wednesday by a nationwide general strike as hundreds of thousands of workers, shopkeepers and civil servants walked off the job in a 24-hour protest over the Socialist government's austerity program.
• U.S. Drops Defense of Law Banning Gay Marriage. In a major policy reversal, the Obama administration said Wednesday that it will no longer defend the constitutionality of a federal law banning recognition of same-sex marriage. Attorney General Eric Holder said President Barack Obama has concluded that the administration cannot defend the federal law that defines marriage as only between a man and a woman.

MarketWatch:

• Philly Fed's Plosser Weighs Vote Against QE2. One of the most hawkish new members of the Federal Reserve’s interest-rate setting committee on Wednesday said he was considering voting to shut down a $600 billion bond buying program early due to the strength of the U.S. economy. Philadelphia Fed President Charles Plosser said his only hesitation in doing so was fears of undermining the Fed’s credibility.

CNBC.com:

• As Cotton Prices Rise, So May the Cost of Hotel Rooms. Apparel makers aren't the only ones stitching together a plan to deal with rising cotton costs. Hotel chains, including some of the world's biggest brands, are looking to pass costs on to customers as soaring commodity prices hit the bottom line.
• Existing Home Sales Rise Unexpectedly in January.
  

Business Insider:

• Images From the New Austerity Protests in Greece. (pics)
• And Now There Are 17 States Where Public-Sector Workers Are Protesting To Keep Their High Pay And Amazing Benefits...
  

Zero Hedge:

• Gaddafi Son Says Army Will Protect Oil Infrastructure, Blames Al-Qaeda for Carpet Bombing as 10,000 Reported Dead.
• Fed's Hoenig Says United States Has "Deeply Undermined Free-Market Capitalism".
  

ars technica:

• FTC Says It Will Look Into Apple's(AAPL) Marketing of In-App Purchases to Kids.

American Banker:

• Squeezed on Interchange, Banks Squeeze the Payment Networks. Banks are looking beyond consumers to Visa Inc. and MasterCard Inc. to share the pain of lower interchange fees.

SunSentinel.com:

• Office Depot(ODP) Discloses New Justice Department Investigation of Pricing. Office Depot revealed a new investigation into its pricing practices by the U.S. Department of Justice in its annual report filed with securities regulators on Tuesday.

Rasmussen Reports:

• Obama's Leadership Ratings Fall to a New Low. A new Rasmussen Reports national telephone survey finds that just 37% of Likely U.S. Voters now say the president is doing a good or excellent job as a leader. Forty percent (40%) rate his performance as poor.

Reuters:

• Vertex(VRTX) Shares Soar on Cystic Fibrosis Drug Data. An experimental drug developed by Vertex Pharmaceuticals Inc significantly improved lung function in a late-stage trial of patients with cystic fibrosis, sending the company's shares as much as 17 percent higher to a level not seen since late 2006.
• Apple(AAPL) to Host March 2 Event, iPad 2 in the Wings.
  

Zawya:

• Lebanon CDS Wider, Others In Region Mixed. The cost of insurance on Lebanon 5-year sovereign CDS are pushing wider as turmoil in the Middle East and North Africa continues, Markit says. Lebanon CDS are 18 bps wider at 375 bps, while Morocco CDS are 10 bps wider at 195. Israel CDS are 5 bps wider at 170, while Tunisia and Qatar CDS are just slightly wider at 200 and 116 respectively. Egypt CDS have rallied 2 bps to 357 while Saudi Arabia and Bahrain CDS are both flat at 137 and 320 respectively.

AlArabiya English Twitter:

• At least 640 people have been killed in Libya since protests started last week, International Federation for Human Rights Says.

ynetnews.com:

• Iranian Naval Ships Arrive in Syria. Two Iranian naval ships arrived Wednesday afternoon at the Port of Lattakia in Syria, after crossing the Suez Canal Tuesday, Iranian news agency IRNA reported. An Iranian senior official told IRNA that Iranian Navy Commander Admiral Habibula Siari is slated to arrive to Damascus later on Wednesday, accompanied by a delegation of military officials.