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Bloomberg:
- Mortgage applications in the U.S. rose last week to the highest level since May as near record- low borrowing costs boosted refinancing and sent purchases to a 10-month high. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan jumped 16 percent to 756.3 in the week ended Oct. 2 from 649.6 in the prior week. The group’s gauge of refinancing surged 18 percent and its measure of purchases climbed 13 percent.
- Valentino Fashion Group SpA’s sales in the U.S. and western Europe stabilized in September after months of decline, while demand in China and Hong Kong has surged, Chief Executive Officer Stefano Sassi said. The Italian luxury brand, owned by London-based buyout firm Permira Advisers LLP, doesn’t expect demand in developed markets to return to pre-credit crunch levels “for a few months at least,” Sassi said after Valentino’s fashion show in Paris yesterday evening.
- U.S. Representative Barney Frank’s proposed overhaul of derivatives regulation may leave gaps in oversight and unnecessary exemptions, the Commodity Futures Trading Commission and Securities and Exchange Commission said. “Certain aspects of the discussion draft could unintentionally preserve existing regulatory gaps,” Henry T.C. Hu, director of the SEC’s new division of risk, strategy and financial innovation, said of legislation proposed Oct. 2 by House Financial Services Committee Chairman Frank. The draft would ease trading and clearing requirements for derivatives dealers such as Morgan Stanley(MS) and Goldman Sachs Group Inc.(GS), compared with the administration’s proposal.
- Crude oil fell for the first time in three days in New York after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, increased. Gasoline supplies rose 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Distillate stockpiles climbed 679,000 barrels to 171.8 million, the highest since January 1983. Oil also dropped as the rising dollar reduced the appeal of energy to investors looking for an inflation hedge. “This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” The gain in gasoline supplies left stockpiles 6.9 percent higher than the five-year average for the period, according to the department. Distillate inventories are 30 percent above the five-year average for the week. Gasoline production climbed 3.5 percent to 9.42 million barrels a day in the week ended Oct. 2, the highest level since August 2008. Refineries operated at 85 percent of capacity last week, up 0.4 percentage point from the previous week. “Fundamentals are still weak,” BNP Paribas SA senior oil analyst Harry Tchilinguirian said in an interview with Bloomberg radio. “This year is going to end with a contraction in global demand. There have been positive supply surprises in places outside OPEC like Russia, and OPEC’s own compliance has slipped.” Nations outside of the Organization of Petroleum Exporting Countries will increase crude oil and other liquids production by 0.7 percent to 50.04 million barrels a day this year, as increased output in Brazil, the U.S., Azerbaijan, Kazakhstan and Canada offsets declines in Mexico and the North Sea, according the Energy Department’s monthly Short-Term Energy Outlook released yesterday.
- U.S. discount, grocery, restaurant and specialty chains hired a larger percentage of applicants in August for the eighth straight month, signaling the economy is stabilizing and may grow next year, Kronos Inc. said. Three of every 100 applications resulted in a hire in August, the highest level since merchants hired four of every 100 in December, according to Kronos’s analysis of 1.4 million job applications to 68 retailers. The increase “makes us confident that our numbers will continue to be stable, slowly increase, and then the general economy will follow that several months later,” Robert Yerex, Kronos’s chief economist, said by telephone yesterday from Beaverton, Oregon.
- At least 47 school-age children in Chicago have been killed in homicides, mostly by guns, since the month President Barack Obama took office. The latest youth homicide in his adopted hometown was different only in that the attackers used splintered railroad ties and were captured on video broadcast globally. The Sept. 24 attack prompted Obama to send his attorney general and education secretary to Chicago today after the killing tarnished the city’s drive to win the 2016 Olympics. Gun issues in Chicago will remain in the national spotlight following the U.S. Supreme Court’s Sept. 30 announcement that it will hear a challenge of the city’s handgun ban, implemented in 1982 to combat urban crime.
- Crude oil remains in a downtrend and will face multiple layers of resistance before any approach toward a September high of more than $73 a barrel, according to Societe Generale. Should prices break below $69.40 a barrel, “the correction will resume” to $67.50 and $66.20, Aymes said.
- 3M Co.(MMM), the maker of 55,000 products from Post-It Notes to face masks, will spend about $1 billion on acquisitions within the next 12 months, Chief Executive Officer George Buckley said. The company plans to make 10 to 20 purchases in different industries, Buckley said in an interview today after the opening of a 3M laboratory in Singapore.
- Retailers on EBay.com Inc.’s(EBAY) site had sales gains in August and September, the first increases since at least July 2008, according to ChannelAdvisor Corp., which helps merchants sell on EBay, Amazon.com and other sites. Same-store sales, or revenue for merchants selling for at least one year on EBay, gained 4.6% in August and 5.1% in September. Sales had declined every month since ChannelAdvisor started tracking its merchants on EBay 14 months ago. Analysts estimate that EBay’s sales rose less than 1% to $2.13 billion in the third quarter from a year earlier.
- Amazon.com Inc.(AMZN) introduced an international version of its Kindle electronic reader that works in more than 100 countries and lowered the price of its U.S. version by $40 to $259. The international Kindle begins shipping Oct. 19 at a price of $279, Seattle-based Amazon.com said today. Until now, the device was only available in the U.S.
- Stocks are worth buying worldwide as a rebound in earnings ends a “Twilight Zone” of rising share prices and falling profits, according to Robert Buckland, a Citigroup Inc. global strategist. Although the MSCI World Index’s P/E ratio has increased to 24 times earnings from 9 times in March, it’s below the peaks in three previous profit slumps since 1989. The gauge reached 28 times to 33 times earnings as those periods ended. At 1.8 times book value, this ratio is lower than the average of 2.1 times since 1975.
Wall Street Journal:
- Demand for Long Term Evolution, or LTE, network equipment is likely to accelerate due to a continually strong need for fast data transfer, said Hakan Eriksson, Chief Technology Officer of L.M. Ericsson Telephone Co. (ERIC). "It's difficult to predict the pace of LTE implementation, but the new technology will become the industry standard," Eriksson told Dow Jones Newswires during an interview on the sidelines of the ITU (International Telecommunication Union) Telecom World conference here. First roll-out of LTE networks will start in 2010, Eriksson said.
- Federal Communications Commission Chairman Julius Genachowski told the wireless industry Wednesday that he intends to proceed with Internet openness rules for cellular carriers, despite some of the "unique congestion issues" posed by mobile Internet, according to his prepared remarks for a convention sponsored by CTIA-The Wireless Association.
- Democrats defeated an effort by Republicans to remove Rep. Charlie Rangel from his chairmanship of the influential Ways and Means Committee amid a congressional ethics investigation. Democrats blocked the anti-Rangel effort on a procedural motion that would have forced the New York Democrat to step down. The House later voted by a wide margin to refer the matter to the House Ethics Committee, a technical move given that the committee is already reviewing allegations of ethical lapses by Mr. Rangel. But in what could be the first signs of the weakening of support for Mr. Rangel among Democrats, two Democratic lawmakers broke with their party and voted with Republicans on the vote. The vote was the third time since July 2008 that the House has voted on a measure by Republicans to remove Mr. Rangel. This was the first time that any Democrat had voted with Republicans.
- The European Commission Wednesday warned nine countries, including Germany and Italy, that their budget deficits are too large, highlighting the broad damage the economic downturn has caused European Union governments. Under EU rules, countries must keep their budget deficits below 3% of gross domestic product.
CNBC:
NY Times:
- YouTube appears to be mastering the art of turning video piracy into revenue for itself and its partners. For years, the clips of television shows, music videos and other copyrighted content that users uploaded to YouTube without permission were a source of tension between Google(GOOG), which owns YouTube, and media companies, which owned the copyrights. But since last year, a growing number of media companies have stopped insisting that YouTube take down those unauthorized clips. Instead, they are choosing to claim the videos as their own, and allowing YouTube to sell advertising when people watch them. The revenue is split between YouTube and the content owners.
Boston Globe:
- Commercial real estate powerhouse CB Richard Ellis/New England is launching a venture with one of the region’s largest players in retail leasing, with the two trying to capitalize on an economic rebound that will probably lead to new property redevelopments and store openings over the next few years. CB Richard Ellis is forming a joint venture with Grossman Commercial Real Estate Group, whose principals have represented Puma, Linens ‘N Things, and CVS drugstores.The new entity, to be called CBRE/Grossman Retail Advisors, should be a formidable player in the region’s retail market. Principals said the current slowdown presented an unusual opportunity to join forces, allowing them to create new business now and expand as retailers emerge from the doldrums to scout new locations.“Our expectation is that we’re hitting the ground running at the right point in the curve,’’ said Kevin M. Doyle, co-managing partner for CBRE/New England. “We see a lot of opportunities for retailers, and that will grow in the future.’’
San Francisco Chronicle:
- As the search wars continue, new numbers are in showing that Microsoft's(MSFT) Bing slipped while Google(GOOG) inched further ahead last month. Google's search accounted for 71.08% of all U.S. searches conducted between September and October, said the Internet monitoring firm Hitwise. That's a 1% market share increase for Google, Hitwise reported late on Tuesday. Google's latest search rival, Bing, didn't have as good a month, though. Unveiled in June, Bing slipped 5%, going from 9.48% in September to 8.96% of the market early in October. Holding in second place, Yahoo Search dropped 3%, going from 16.96% to 16.38%.
Politico:
- Like most Americans, members of the House are expected to report promptly — no excuses — when summoned by their bosses for the start of another workweek. One difference: For lawmakers, starting time doesn’t come until about 6:30 Tuesday evening. After taking control of the House in 2006 — and again when President Barack Obama was elected president in 2008 — Majority Leader Steny Hoyer (D-Md.) boasted that lawmakers would work four or five days a week to bring change to America. But midway through Obama’s first year in office, Hoyer’s House has settled into a more leisurely routine. Members usually arrive for the first vote of the week as the sun sets on Tuesdays, and they’re usually headed back home before it goes down again on Thursdays. Since the House returned for its fall session on Sept. 8, it has stuck around to vote on a Friday just once: to approve a 5.8 percent increase in Congress’s own budget.
Washington Times:
- Nearly $1 million in Homeland Security funding typically earmarked for fire departments has been awarded to ACORN, despite a clear signal from Congress that it intends to cut off federal funding to the embattled group. The grant to ACORN's Louisiana office became public on Oct. 2, less than three weeks after the House and Senate voted to cut off ACORN funding after employees were caught on video advising a fake prostitute and pimp on scams. It was one of only three such grants issued to the state and made up almost 80 percent of the firefighting money earmarked for Louisiana, prompting one of the U.S. senators from the state to demand that the funds be taken back.
Reuters:
- Google Inc (GOOG) Chief Executive Eric Schmidt said on Wednesday that the worst of the advertising recession was over, and pointed to signs of a recovery in both Europe and the United States. Speaking to a group of reporters in New York, Schmidt said that Google, the largest U.S. Internet search engine, had increased its hiring and investment in anticipation of a recovery. "The worst is behind us," he said. "We're clearly seeing aspects of recovery, not just in the U.S. but also Europe." Google first started to see signs of a recovery in May and June, Schmidt said, following a period in which the slump in advertising spending undercut the company's revenue growth and the price of its search ads.
- The Obama administration's latest effort to boost the beleaguered housing market is likely to help mortgage insurers as lower defaults will boost their liquidity. The new program aims to provide as much as $35 billion to state housing finance agencies, which provide low-cost mortgages to potential homebuyers with low to moderate incomes. As part of the program, government-controlled housing finance giants Fannie Mae and Freddie Mac, together with the U.S. Treasury, will buy as much as $20 billion of bonds issued by the housing finance agencies. The efforts of the U.S. government to reduce defaults and let homeowners keep their homes will help entities like MGIC Investment Corp (MTG), Radian Group Inc (RDN) and PMI Group Inc (PMI) to lower the claims that they pay out on defaults.
- British bank Barclays could acquire a wealth management business at least the size of Julius Baer to meet its target of ranking in the top five private banks globally, Barclays Wealth's vice chairman said on Wednesday. Speaking at the Reuters Global Wealth Management Summit in Geneva, Gerard Aquilina said the group would be prepared to acquire an entity the size of Julius Baer "or bigger," to reach the target set by the unit's Chief Executive Tom Kalaris earier this year. "There could be a major transformational buy for us," he said.
Financial Times:
- The sharp fall in the US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the erosion of America’s reserve currency status. Republican politicians have highlighted the dollar’s slide as evidence of waning US power. On Wednesday, Sarah Palin, the Republican former vice-presidential candidate, added her voice to those who have expressed concern over the consequences of rising US indebtedness and dependence on foreign oil. “We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar,” she wrote on her Facebook site.
DigiTimes:
Style Underperformer:
Small-Cap Value (-.50%)
Sector Underperformers:
Telecom (-2.97%), Homebuilders (-1.59%) and Gold (-1.26%)
Stocks Falling on Unusual Volume:
VIP, SDXC, ORLY, PPD and O
Stocks With Unusual Put Option Activity:
1) SNV 2) FDO 3) YUM 4) GMCR 5) AMX
Style Outperformer:
Large-Cap Growth (+.34%)
Sector Outperformers:
Oil Service (+1.43%), Networking (+1.43%) and HMOs (+1.28%)
Stocks Rising on Unusual Volume:
USMO, TSRA, TSL, NIHD, SLB, FCX, PUK, HBC, BAC, ICTG, SYKE, HELE, PLCM, GPRO, USMO, FWRD, SSRX, ACIW, COST, BJRI, MNRO, VCLK, PERY, BIDU, BARE, GLNG, TRGT, IDCC, TLB, AYI, SIG, HIT, FDO, YPF, VQ and STJ
Stocks With Unusual Call Option Activity:
1) CTAS 2) VCLK 3) IDCC 4) SYMC 5) COST
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