Seeking Alpha
Get ready for today's market
Profile| Send Message| ()  

Top Stories
Facebook shares fly after earnings beat. Facebook's (FB) shares stormed 17% higher pre-market after the company's Q2 earnings trounced forecasts on the back of unexpectedly strong mobile ads. Adjusted profit jumped 65% to $488M, EPS of $0.19 beat by $0.05 and revenue soared 53% to $1.81B. Income from mobile advertising grew from almost nothing last year to 41% of Facebook's total ad sales of $1.6B. "Soon we'll have more revenue on mobile than desktop," Mark Zuckerberg predicted.

China boosts railway budget to keep growth on track. China has reportedly increased its 2010-2015 budget for railway spending by 500B yuan (81.48B) to 3.3T yuan as the government looks to accelerate construction as part of a bid to prevent GDP growth from slowing too much. In addition, the State Council has approved tax breaks for small firms and a cut in export fees. "It's a small stimulus" that will have a limited impact on demand, says Bank of America's Lu Ting.

Top Stock News
Visa swings back to profit. Visa (V) swung to a profit of $1.23B in FQ3 from a loss of $1.84B a year earlier, when the credit-card company took a $4.1B litigation provision. EPS of $1.88 beat by $0.07, while revenue rose 16% and also topped forecasts. Visa has been benefiting from the improving economy, with payment volumes rising 13% to $1.1T and transaction volume 14% to $15B. Shares rose 2% pre-market.

Unilever's profit rises despite tough conditions. Unilever's (UL) H2 net profit rose 13% to €2.7B and sales edged up 0.4% to €25.5B, helped by product innovations such as compressed deodorants and a spray version of its Vaseline brand, and despite a tougher economy and increasing competition. "Growth is slowing in emerging markets, as macro-economic headwinds influence consumer behavior," Unilever said. "Developed markets remain sluggish with little sign of any recovery in North America or Europe." Shares were -2.2% pre-market.

Orange net profit plunges 38%, to pay massive tax bill. Orange's (ORAN) H1 net profit slumped 38% to €1.07B and revenue dropped 9.9% to €20.60B as the telecom carrier suffered from a severe price war in France. Orange, formerly known as France Telecom, has been ordered to pay French tax authorities €1.95B at the end of this month and a further €190M in September in a case related to the restructuring of a holding company in 2005. Shares were -4.5% at midday in Paris.

Amazon, Starbucks earnings seen rising. Amazon (AMZN) and Starbucks (SBUX) are among the big beasts in today's thick jungle of earnings reports. Analysts estimate that Amazon's Q2 EPS rose to $0.05 from $0.01 while revenue jumped 22.6% to $15.73B; Starbucks' FQ3 EPS is seen rising to $0.53 from $0.43 and and its revenue is forecast to have climbed 12.5% to $3.72B.

GSK to pay $229M to settle Avandia claims. GlaxoSmithKline (GSK), enmeshed in bribery allegations in China, has got rid of a headache in the U.S. by agreeing to pay $229M to settle lawsuits with eight states that accused the company of the deceptive marketing of its diabetes treatment Avandia. The deal adds to a $90M settlement with 37 other states and the District of Columbia over Avandia, not to mention a $3B agreement with Federal authorities over the drug and other pharmaceuticals.

Top Economic & Other News
Either Yellen or Summers will lead Fed - report. The race to replace Ben Bernanke as Fed chief looks increasingly to be down to Janet Yellen and Larry Summers, the WSJ reports. The speculation appears to mark a big catch-up for Summers, as Yellen had been thought of as the lone front-runner for months. Summers has been a member of the Obama administration, so provides a comfort level, while Yellen is a key Fed insider.

Spanish jobless rate drops for first time in two years. Spanish unemployment surprisingly fell for the first time in two years in Q2, dropping to 26.26% from 27.16% previously and vs consensus for a rise to 27.3%. A strong tourist season helped improve employment, although there were still 5.98M people without a job, half of whom haven't worked for over a year. Notwithstanding, Spanish shares (EWP) were +0.3% at midday in Europe, bucking the global trend.

U.K. growth speeds up. As expected, U.K. GDP growth accelerated to a quarterly 0.6% in Q2 from 0.3% in Q1 as all the main sectors of the economy expanded for the first time in almost three years. Still, critics say living standards remain stagnant, while GDP is 3.3% below its peak. The pound (GBB) fell following the data but was +0.1% at $1.5332 at the time of writing.

German business confidence improves slightly. Germany's closely watched Ifo index of business confidence has risen for a third consecutive month in July, edging up to 106.2 from 105.9 in June and topping consensus of 106.1. The current assessment reading also rose, although the six-month outlook slipped a bit.

Alpha-Rich Stock Movers and Great Calls
1) On Monday, mREIT expert REIT Analyst looked at Hatteras Financial's (HTS) hedging strategy and suggested that at least 10% downside for shares was possible. The stock closed yesterday -12.1% from where it was when the post came out. Read article »
2) Investment adviser Trading the Spread cited MedAssets (MDAS) on June 25 as a beneficiary of healthcare reform with big upside. The stock is +20.5% since. Read article »

Alpha-Rich Stocks To Watch
1) Horizon Bancorp (HBNC). Horizon's strong ROE justifies a premium multiple. Growth opportunities plus a recent acquisition suggest 20-30% upside is possible. Read article »
2) FreightCar America (RAIL). Hit by cyclical, coal-related woes, RAIL has room for a turnaround. Cash-rich and likely to return to historic profitability in the near future, the company could see its shares double. Read article »

Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.

Today's Markets:
8:30 Durable Goods
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $29B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: ABB, ACT, AEP, AIXG, ALK, ALKS, ARG, ASH , ASPS, BC, BG, BIIB, BLL, BMS,BMY, BSX, BWA, CAB, CAM, CCE, CELG, CFX , CL, CMS, CNX, COR, CPN, CRI,CRR, CS, CHS, DAN, DFT, DHI, DLX, DNKN , DO, DOW, DST, EQT, ESI, FAF,FLIR, GG, GM, GNC, GPK, GRA, HNT, HOG , HOT, HSY, IDCC, IMAX, IP, JAH,JNS, KEM, KMT, LAZ, LL, LM, LO, LUV , MDP, MDSO, MGI, MHFI, MJN, MMM,NBL, NMM, NXTM, ODFL, ORI, PACR, PCP, PDS , PHM, PNK, POT, PTEN, QSII, RCL,RDWR, RS, RTN, RYN, SIRI,SLAB, STC, STRA, SUI, TKR, UA, UFS, USG , UTHR, VCI, VDSI, VLY, WAB, WCC,XRX, YNDX, ZMH

Notable earnings after today's close: ACGL, AIR, AMZN, AWAY, BAS, BCOV, BLDR, BMRN , CB, CBG, CERN, CINF, CLF, CPSI,CPT, CRUS, CTCT, DECK, DLB, DOLE, DTLK, ECHO , ELY, EPR, EW, EXPE, FII, FLEX,FR, FSL, GILD, GPN, HLS, HTCH, IDTI, INAP , INFA, KBR, KEG, KLAC, LOGM, LSCC,MCK, MITK, MOH, MSCC, MXIM, N, NBIX, NEM , NR, NTGR, OLN, OUTR, PFG, QLGC,QLIK, RGC, RJET, RSG, SBUX, SPF, SWI, TCO , TGI, THRX, TPX, TSRO, TSYS, UHS,VRSN, WOOF, ZNGA

See full real-time earnings coverage »

Wall Street Breakfast is sent out by email for free -- Get it now »

Source: Wall Street Breakfast: Must-Know News