Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
U.S. could go it alone in attack on Syria. The U.S. is reportedly still considering military intervention against Syria for the latter country's suspected use of chemical weapons despite Britain's parliament last night ruling out such action. The U.S. could even operate unilaterally, although it may not have to, as French President Francois Hollande reiterated his support for intervention. Oil was -0.85% at the time of writing.

AT&T would be interested in Vodafone post-Verizon deal. AT&T (NYSE:T) would reportedly be interested in acquiring assets that remain part of Vodafone (NASDAQ:VOD) should the U.K. carrier sell its 45% percent stake in Verizon Wireless to Verizon Communications (NYSE:VZ). AT&T has been considering buying assets in Europe for a while, due to the relatively recent introduction of 4G in the region. Vodafone would be particularly enticing given the large amount of cash it would receive for its Verizon Wireless holding - $130B according to reports (minus tax).

GE plans to exit retail finance. GE (NYSE:GE) reportedly intends to spin off the U.S. consumer-lending operations of GE Capital, which earned $2.2B in 2012, via an IPO that could take place early next year. GE is also considering alternatives such as smaller spin-offs or a sale. The unit provides credit cards and financing to 55M people at major retailers, including Wal-Mart (NYSE:WMT). A spin-off would be part of GE's strategy of paring back its finance arm and bulking up its industrial businesses.

Top Stock News
Salesforce shares rise following strong FQ2. Salesforce's (NYSE:CRM) shares jumped 7.8% in premarket trading after the company's FQ2 earnings topped expectations and it provided guidance that was also largely above consensus. The firm, a provider of online software for managing customer relations, swung to a profit of $76.6M, which included a $133.4M tax benefit, from a loss of $9.8M last year. Adjusted EPS came in at $0.09 while revenue rose 31% to $957.1M.

America Movil could drop KPN offer. America Movil (AMX, AMOV) is prepared to withdraw its €7.2B takeover offer for KPN (OTC:KKPNF) after an independent foundation created to protect the interests of the Dutch telecom carrier's shareholders and other stakeholders moved to block the deal. The foundation is unhappy that America Movil didn't consult KPN before announcing its bid, although the foundation is open to the Mexican company addressing its concerns. KPN shares were -4.3% at midday in Amsterdam.

Apache to sell 33% stake in Egypt business to Sinopec for $3.1B. Apache (NYSE:APA) has agreed to sell a 33% holding in its Egyptian oil and gas business to Sinopec (NYSE:SNP) for $3.1B. The move continues Apache's strategy of rebalancing its portfolio towards projects with predictable growth and attractive rates of return. The company's Egyptian assets are located in remote areas and have remained unaffected by the political events in the country. Apache's shares rose 3.4% in post-market trading.

Authorities extend probe into hiring practices at banks. The Department of Justice and the SEC have widened their inquiry into the international hiring practices at JPMorgan (NYSE:JPM) by questioning numerous other banks and hedge funds, the WSJ reports. Authorities are trying to ascertain whether the firms recruited the well-connected in order to win deals. The NYT reports that JPMorgan started a program called "Sons and Daughters" in 2006 to avoid nepotism and bribery accusations when carrying out such recruitment, but it appears that things went rather awry.

Nasdaq accepts blame for "flash freeze." Nasdaq (NASDAQ:NDAQ) has taken responsibility for the three-hour trading outage last week - now known as the "flash freeze" - saying it was caused by a software bug and other technology issues related to a data feed. "Our performance is unacceptable to our members, issuers and the investing public," the exchange said. Banks and brokerages are reportedly discussing how to prevent another outage, including giving a non-exchange entity responsibility for managing data feeds.

Top Economic & Other News
Japanese core CPI rises most in five years. Japan's core CPI rose a greater-than-expected 0.7% in July, the biggest increase since November 2008. However, the majority of the gains came from energy, says strategist Shuji Tonouchi, adding that the "upward pressure on energy prices is likely to start to slow" in the coming months. "Things are basically on track" for the Bank of Japan in its fight against deflation, "but I would not get overly optimistic on prices just yet," Tonouchi says.

Eurozone unemployment holds steady. Eurozone unemployment held steady at 12.1% in July, with the lowest rates in Austria (4.8%) and Germany (5.3%) and the highest in Greece (27.6% in May) and Spain (26.3%).

German retail sales surprisingly drop. German retail sales unexpectedly fell 1.4% on month in July vs -0.8% in June, with sharp rises in food costs possibly being a reason for the fall. "Higher food prices tend to lead to a bit of downward pressure on consumption," economist Christian Schulz said before the report. "Everything else looks positive. If you look at any business survey, there's acceleration, not deceleration, of growth in Germany."

Alpha-Rich Stock Movers and Great Calls
1) On Tuesday, Dennis Beaudet called Ithaca Energy (OTCPK:IACAF) a deep-value play that would soon prove that near-term concerns are overdone. The stock is +6.7% to date. Read article »
2) On June 3, Money Investor said Garmin (NASDAQ:GRMN) had an attractive valuation and a strong balance sheet that would pay off for investors. The stock is +18% since. Read article »

Alpha-Rich Stocks To Watch
1) Harvest Natural Resources (NYSE:HNR) faces serious risks that its accounting doesn't make readily apparent. A fund manager sees a strong short play. Read article »
2) ITT Educational Services (NYSE:ESI) is performing well despite analyst and investor doubts. Continued strength in the face of a high short interest could lead to big upside for longs. 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:
In Asia, Japan -0.5% to 13389. Hong Kong +0.1% to 21731. China +0.1% to 2098. India +1.2% to 18612.
In Europe, at midday, London -0.4%. Paris -0.6%. Frankfurt -0.6%.
Futures at 6:20: Dow +0.1%. S&P +0.2%. Nasdaq +0.3%. Crude -0.85% to $107.88. Gold -1.4% to $1393.30.

Today's economic calendar:
8:30 Personal Income and Outlays
9:45 Chicago PMI
9:55 Reuters/UofM Consumer Sentiment
3:00 PM USDA Ag. Prices

Notable earnings before today's open: BIG, SOL, YGE

See full real-time earnings coverage »

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