Today's Headlines

Bloomberg:

• Monti Fights for Relevance as Italy Voters Eye Entertainers. Italian Prime Minister Mario Monti, an economics professor who has never won an election, says he’s aware of his handicap in a campaign dominated by entertainers. “It would be easy to do better than me as far as empathy goes,” Monti said Feb. 6 in an interview televised on La7. 
• Ford(F) Leads Drop as European Auto Sales Decline to Record. European Union car sales fell to the lowest level for a January, with Ford Motor Co. and PSA Peugeot Citroen posting the biggest drops, as economic contractions in the southern part of the region widened to Germany and France. Registrations dropped 8.7 percent to 885,159 vehicles last month from 969,219 cars a year earlier, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said today in a statement. The figure was the lowest start to the year since the group began tracking sales in 1990, it said.
• India Slowdown ‘Deepening and Widening,’ Credit Suisse Says. Earnings forecasts for the biggest Indian companies are declining again as profits grow at the slowest pace since the financial crisis, according to Credit Suisse Group AG. Consensus earnings-per-share estimates for the 50 companies on the CNX Nifty Index are dropping, after rising in January, Credit Suisse analysts Neelkanth Mishra and Ravi Shankar wrote in a report dated yesterday. Forecasts for earnings growth may drop to 7-8 percent for the fiscal year ending March 31 as wages and borrowing costs rise faster than revenue, they wrote. Projections for 2014 profits may drop as much as 10 percent, the report said. 
• Brazilian Retail Sales Unexpectedly Contracted in December. Brazil’s retail sales unexpectedly contracted in December, the first monthly drop since May, prompting traders to pare bets that the central bank will raise rates in the first half of this year. The volume of sales declined 0.5 percent, after increasing 0.3 percent in November, the national statistics agency said today in Rio de Janeiro. The median estimate from 31 economists surveyed by Bloomberg was for sales to gain 0.8 percent, and the lowest forecast was for a 0.2 percent rise.
• Obama Golf With Woods in Florida Risks Muddling Economic Message. President Barack Obama’s three-day Florida golf getaway featuring a round with Tiger Woods opened him to criticism of tone-deafness for playing when he’s at a budget impasse with Congress that threatens automatic spending cuts in less than two weeks. After spending the President’s Day holiday weekend playing Floridian, a private golf course and club in Palm City, Florida, Obama returned to Washington last night. He faces a March 1 deadline to reach a deal with Congress to avert the $1.2 trillion in automatic cuts, which threaten to crimp the U.S. economic recovery. Joining Woods as Obama’s playing partners were businessmen and backer Jim Crane, who owns the course as well as the Houston Astros baseball team, Anthony Chase, former deputy chairman of the Federal Reserve Bank of Dallas, and Milton Carroll, chairman of Centerpoint Energy Inc. U.S. Trade Representative Ron Kirk, Obama’s Chicago friend Eric Whitaker and presidential aide Marvin Nicholson also joined Obama on the course, according to White House spokesman Josh Earnest. Such a fantasy golf weekend is out of reach for most Americans and presents a contrast to Obama’s inaugural and State of the Union speeches, which focused on economic inequality in the U.S., according to Paul Light, a professor of public service and governance at New York University. “It’s off-tone” Light said “It makes him seem like more of a Washington insider than the strong advocate of the middle class that he wants to be.”
• Copper Falls Most in Four Months on U.S., China Housing. Copper futures in New York fell the most in four months as a drop in U.S. homebuilder confidence and speculation that China will move to cool property purchases damped demand prospects for the metal used in pipes and wiring. “Any sign that China may be limiting its real-estate market is certainly concerning from a demand perspective,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “The builder-confidence report is one more slight negative for the market.” Copper futures for May delivery dropped 2.3 percent to $3.668 a pound at 11:44 a.m. on the Comex in New York.
• Ore-Ship Rates Fall Most in Two Months as Chinese Demand Slumps. Charter rates for Capesize ships, the biggest carriers of iron ore, fell the most in two months as demand declined for the steel-making raw material from China, the world’s biggest buyer of the commodity. Daily hire costs for Capesizes declined 7.7 percent to $5,875, figures from the London-based Baltic Exchange showed today. That’s the biggest collapse since Dec. 19, according to the exchange. Capesizes are the largest vessels tracked by the Baltic Dry Index, a broader measure of costs to transport minerals and grains by sea, which lost 1.2 percent to 738, the lowest level since Jan. 8. Chinese port inventories fell to 66.9 million tons on Feb. 1, the lowest since January 2010, according to researcher Beijing Antaike Information Development Co.
• Gasoline Pump Prices Soaring on Refinery Repairs, Oil Rally. U.S. consumers facing the highest gasoline pump prices ever for February may see further increases as global crude oil futures climb and breakdowns and seasonal maintenance at refineries reduce fuel supplies. Gasoline futures have surged 11 percent this year, making the fuel the top performing commodity in the Standard & Poor’s GSCI index. Prices at the pump are up 14 percent this year and have risen 33 straight days, according to AAA data. Brent crude in London, the pricing basis for gasoline imports and for oil used by coastal refiners, advanced to a nine-month high Feb. 8.
• Saudi Oil Output Falls to 19-Month Low as Exports Decline. Saudi Arabia’s crude oil output fell in December to a 19-month low as shipments from OPEC's biggest producer dropped for a third month and domestic consumption decreased, the Joint Organisations Data Initiative said. The kingdom exported 7.06 million barrels of crude a day in December, the least since September 2011, JODI reported, citing statistics the government submitted to the Organization of Petroleum Exporting Countries. Exports were 1.3 percent lower than the previous month. Production dropped 4.8 percent in the month to 9.03 million barrels a day.
• Wal-Mart(WMT) E-Mails Seen Showing Tax Drag Mounting on Retailers. The payroll tax increases and delayed tax returns that Wal-Mart Stores Inc. (WMT) executives blamed in internal e-mails for weak February sales may be poised to hurt other retailers as well. Wal-Mart had the worst monthly sales start in seven years, according to internal e-mails obtained by Bloomberg News and reported Feb. 15. Jerry Murray, Wal-Mart’s vice president of finance and logistics, in a Feb. 12 e-mail called the retailer’s February month-to-date sales “a total disaster.” “It’s not Wal-Mart specific,” David Strasser, an analyst for Janney Montgomery Scott LLC in New York, said in a telephone interview yesterday.
• Carbon Plunges as EU Delays Vote on Fast-Track Market Fix. Carbon prices plunged after the European Parliament’s environment committee postponed a decision on whether to seek fast-track approval of a proposal to tackle a record surplus of emission allowances. The panel backed in a non-binding vote a compromise plan to reduce the supply of European Union carbon permits, though it delayed for about a week a separate decision on authorizing its chairman to start talks with member states on the proposal. EU carbon futures for December fell as much as 20 percent.
• Gold Drops for Fourth Session as Investors Await Fed Minutes. Gold declined for a fourth session as investors weighed whether the Federal Reserve will signal tomorrow in the minutes of its Jan. 29-30 meeting when it plans to end the third round of stimulus measures. 
• ARM(ARMH) Turns Up Pressure on Intel(INTC) as Even Cutlery Gets Smart. ARM Holdings Plc, which has sprinted ahead of Intel Corp. in the market for mobile chips, poses a threat to its rival in another burgeoning business: semiconductors for machines ranging from cars to cutlery.
• Martin Zweig, Author Who Predicted ’87 Stock Crash, Dies.
• Humana(HUM) Falls in Early Trading on Medicare Advantage Rates. Humana Inc., the second-biggest private Medicare insurer, declined as much as 11 percent after saying the U.S. government’s preliminary Medicare Advantage payment rates were less than the company expected. Humana fell 9.3 percent to $70.77 at 9:43 a.m. New York time after hitting $69.78 for its biggest intraday drop since November.
• Boeing(BA) Strike Threat Looms After Dreamliner-Grounding Tumult. Boeing Co., already struggling with the grounding of its 787 Dreamliner, is facing a possible strike by union engineers, threatening even more upheaval as it tries to fix the plane and resume deliveries to customers. Voting ends tonight for 23,000 engineers and technical workers considering whether to authorize a walkout in their dispute over retirement benefits.

Wall Street Journal: 

• Apple's(AAPL) Computers Attacked by Hackers. Apple Inc. said some employee computers were infiltrated by hackers, adding to the wave of companies recently reporting cyber attacks.

MarketWatch:

• Armstrong World(AWI) fourth-quarter profit down 1.2%. Armstrong World Industries Inc.'s AWI -2.53% fourth-quarter earnings edged down 1.2% as the flooring and building products maker's revenue slipped and tax expenses rose, though margins improved. For 2013, the company forecast earnings of $2.30 to $2.60 a share on revenue of $2.7 billion to $2.8 billion. Analysts polled by Thomson Reuters expected $2.89 and $2.72 billion, respectively. For the first quarter, Armstrong predicted revenue of $600 million to $650 million, compared with Wall Street forecasts of $642 million. Armstrong has struggled amid a slow recovery in the construction market. The company, which produces ceilings, floors and cabinets, remained profitable over the past year as cost savings and pricing strategies helped overcome volume declines.

Fox News: 

• Obama pins blame on Republicans for looming cuts, as fiscal hawk warns of 'failed presidency'. President Obama pinned the blame on Republicans Tuesday for looming spending cuts that may be triggered by what was originally a White House proposal -- while a former leader of the president's deficit commission said it's Obama who's on the path to a "failed presidency" if he can't tackle the debt. The president spoke Tuesday at the White House, urging Congress to come up with a short-term fix to cancel sweeping cuts to defense and other programs set to hit March 1. 

CNBC: 

• Apple(AAPL) Is Building Something Bigger Than a TV.
• Obama Debt Solutions ‘Generational Theft:’ Langone. (video) 
• It's 'Go Big or Go Home' on Deficit Reduction: Simpson and Bowles. Erskine Bowles and Alan Simpson proposed a new tax plan on Tuesday in hopes of finding a middle ground between Democrats and Republicans on deficit reduction. If accepted, the plan crafted by the co-chairs of the deficit reduction committee would cut federal spending deeply and reduce the federal budget by $2.4 trillion over 10 years.

Zero Hedge: 

• The Reflation Party Is Ending As China Withdraws Market Liquidity For First Time In Eight Months.
• Freight Shipment Volumes Plunge To Lowest In Two Years. (graph) 
• Chart Of The Day: Europe's Decimated Car Market. 
• NAHB Housing Market Index Posts First Drop In 10 Months, First Miss Since April 2012. (graph) 
• Italian Bank Loans Plunge By Record; Lenders Say "No Cause For Alarm".

Business Insider: 

• China Has Found A Brutally Simple Way To Steal Corporate Secrets. 
• 5 Research-Driven Reasons To Quit Facebook(FB). 
• Reporters Detained For Trying To Film Alleged Nerve Center Of Chinese Hacking. 
• REPORT: China Tried To Hack The 'Holy Grail' Of America's Energy Infrastructure. 
• High Oil Prices Have A Brutal Effect On US Workers. 
• DEUTSCHE BANK: The Fed Will Probably Start Winding Down QE By June.

Reuters:

• Yen rises broadly on doubts over monetary outlook. 
• Spain's banks face more pain from property clear-out. Banks in Spain may take bigger losses than they hoped this year on real estate repossessed from borrowers, as they compete for buyers with Sareb, the agency tasked with clearing up the weaker banks after a property crash. 
• Medtronic(MDT) profit up; shares fall on weak demand in Europe. Medtronic Inc reported higher quarterly earnings on Tuesday, but sales of key heart and spine devices fell and overall European sales weakened in January, sending the company's shares down nearly 3 percent.

Telegraph:

• North Korea envoy warns South of 'final destruction'. South Korea faces "final destruction" if Seoul and its allies continue to push for tougher UN resolutions against North Korea's nuclear programme, Pyongyang warned on Tuesday.

Shanghai Daily:

• 2nd-Home Buyers May Pay More. CHINA may impose tighter housing policies by raising the borrowing costs for second-home buyers, sources told Shanghai Daily yesterday. The government is expected to unveil more policies to rein in property speculation before or after the National People's Congress annual session in March. One of the measures being studied is to increase the borrowing costs for homebuyers, a bank source told Shanghai Daily. Yang Hongxu, vice director at E-house China R&D Institute, a major property services provider and research organization in the country, said on Weibo yesterday that second-home buyers may need to put down 70 percent of the property price as initial payment, with interest rates 30 percent above the benchmark rates. Second-home buyers now have to make an initial payment of 60 percent of the property price, which was raised from 40 percent in 2011. The interest rates they pay are marked up by 10 percent over the benchmark ones.