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
Amazon jumps after revenues top forecasts. "Amazon's (NASDAQ:AMZN) third quarter followed a familiar script: it sold vast quantities of things, lost money while doing so, and investors were delighted." So writes the NYT in summing up Amazon's latest earnings. Mind, the company's net losses narrowed to $41M from $274M last year, losses per share were in line at $0.09, and revenues soared 24% to $17.1B and beat consensus. As a result, shares jumped 8.7% premarket.

Microsoft flies after blowout numbers. Microsoft's (NASDAQ:MSFT) FQ1 net profit climbed 16% to $5.2B as earnings easily beat expectations, with EPS coming in at $0.62 and revenue also rising 16% to $18.53B. Microsoft's performance was boosted by strong corporate sales of its Office and server software, and its growth stands in contrast to stuttering revenues at IBM (NYSE:IBM) and Oracle (NASDAQ:ORCL). However, Microsoft didn't say anything about its CEO search. Still, shares leapt 5.5% in premarket trading.

Twitter IPO to value company at up to $10.9B. Twitter (NYSE:TWTR) intends to raise $1.19-1.4B in its IPO by selling 70M shares at $17-20 each, giving the company a market cap of $9.3-10.9B. It appears as if Twitter is trying to avoid a repeat of Facebook's (NASDAQ:FB) listing by pricing its offering conservatively - the micro-blogging Web site's range is lower than bids that were reportedly made in private trades.

Top Stock News
Samsung net profit surges 25%. Samsung's (OTC:SSNLF, OTC:SSNGY) Q3 net profit, excluding minority interest, jumped 25% to 8.05T won ($7.76B) and topped forecasts of 7.94T won, while sales climbed 13.2% to 59T won. Samsung's growth was driven by its mobile unit, where operating profit rose 19% to 6.7T won, and its chip division, whose earnings more than doubled to a three-year high of 2.06T won. Samsung expects an extra $1.5T won payment from Corning (NYSE:GLW) after the latter recently agreed to acquire the South Korean company's display unit out of their LCD glass joint venture.

DuPont to spin off performance-chemicals unit. DuPont's (NYSE:DD) shares rose 3.5% in post-market trading after the firm announced plans to spin off its performance-chemicals business into an independent, publicly traded company. DuPont said the move, which had been sought by Wall Street, will allow it to better focus on the growth area of specialty materials and agriculture. The spinoff is expected to dent Q4 EPS by a cent or two.

JPM charter could be reviewed due to Madoff entanglement. The Office of the Comptroller of the Currency ((NASDAQ:OCC)) has reportedly told prosecutors that a criminal money laundering conviction of JPMorgan (NYSE:JPM) for turning a blind eye to Bernie Madoff's Ponzi scheme could trigger a review of the firm's bank charter. JPMorgan and prosecutors are in talks about a deferred prosecution agreement in which the latter would file charges that would be dismissed after a set period of time if the bank meets certain conditions.

Boeing lands $21B in 737 Max deals from China. Boeing (NYSE:BA) has received commitments from several Chinese customers, including state-owned airlines, for 200 737 Max planes, sources tell Reuters. At list prices, the deals are worth somewhere in the neighborhood of $21B.

Rio close to selling stake in Aussie coal mine for $1B. Rio Tinto (NYSE:RIO) is reportedly in advanced negotiations to sell its 50.1% holding in a coal mine in Australia to Glencore Xstrata (OTCPK:GLCNF) and Japan's Sumitomo (OTCPK:SSUMY) for around $1B. Glencore Xstrata and Sumitomo would each buy half of Rio's stake in the Clermont mine in the state of Queensland. The deal could be signed today. The sale is part of Rio's strategy of divesting assets as it looks to cut debt that reached almost $19B last year.

Top Economic & Other News
U.K. Q3 GDP growth hits three-year high. As expected, U.K. GDP grew at the fastest rate since 2010, increasing a preliminary 0.8% on quarter in Q3 vs 0.7% in Q2. The improvement was broad-based as agriculture, production, construction and services all expanded, with the latter sector now 0.6% above its pre-crisis peak. However, the U.K. economy is still 2.5% smaller than that level.

Chinese shares fall as PBOC tightening continues. Chinese shares dropped for the fourth day in a row, slumping 1.45% as short-term money market rates continued to rise after the Bank of China again refrained from injecting liquidity into the market. The overnight rate touched 7.5% at one point and the benchmark seven-day hit 6.94%. Experts are divided over whether the PBOC's strategy is seasonal or whether it signals a longer-term attempt to keep inflation under control and tame the growth in credit.

German business confidence surprisingly dips. The Ifo Institute's index of Germany's business climate has unexpectedly fallen for the first time in six months, slipping to 107.4 this month from 107.7 in September and missing consensus of 108. The current-situation reading and a measure of expectations also fell. However, economists said that Germany's steady economic recovery is still intact.

Alpha-Rich Stock Movers and Great Calls
1) On Monday, Whopper Investments pegged ALJ Regional Holdings' (OTCPK:ALJJ) recent acquisition as a catalyst for significant value creation. The stock is +21.3% since. Read article »
2) On June 4, Money Investor said that Move (NASDAQ:MOVE) was the best way to play the online real-estate space. The shares are +54.5% to date. Read article »

Alpha-Rich Stocks To Watch
1) A high yield, rates that are contractually obligated to rise, and a low valuation have put Awilco Drilling (OTCPK:AWLCF) on Harry Long's radar. Shares could double as investors pay attention. Read article »
2) Lindsay's (NYSE:LNN) industry leadership and low valuation make the company a great value. Kerrisdale Capital sees 50% upside as international markets shift to Lindsay's products and private-equity buyers pay attention. 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 -2.8% to 14088. Hong Kong -0.6% to 22698. China -1.45% to 2133. India -0.2% to 20684.
In Europe, at midday, London +0.1%. Paris -0.3%. Frankfurt flat.
Futures at 6:20: Dow flat. S&P -0.1%. Nasdaq +0.2%. Crude +0.4% to $97.47. Gold -0.6% to $1342.40.
Ten-year Treasury Yield -0.005 bps to 2.52%.

Today's economic calendar:
8:30 Durable Goods
9:55 Reuters/UofM Consumer Sentiment
10:00 Wholesale Trade

Notable earnings before today's open: ABBV, AON, AVY, B, BPO, COL, DTE, ETN, IMGN, LEA, LM, LPNT, NOV, NWL, PG, SHW, SPG, TCB, TREX, UPS, VTR, WBC, WETF, WY

See full real-time earnings coverage »

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