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
BP could be spared hundreds of millions after court ruling. A federal appeals court has ruled that lower-court New Orleans judge Carl Barbier must look at whether businesses claiming compensation from BP (NYSE:BP) for the Gulf of Mexico oil spill suffered direct damage because of the disaster. It was a view that Barbier disagreed with. The ruling could spare BP from shelling out hundreds of millions of dollars in compensation - the company reckons it has paid $500M in what it argues are unjustified claims.

Judge to decide whether Detroit can enter Chapter 9. U.S. Bankruptcy Judge Steven Rhodes is due to decide today on whether Detroit is eligible for bankruptcy protection. Should Rhodes rule that it is, the city would be protected from lawsuits in several courts, including over a plan to cut retiree benefits. Such a verdict would also prevent creditors from attempting to seize assets after Detroit defaulted on loan payments.

Yum's fortunes in China may be looking up. Yum Brands' (NYSE:YUM) same-store sales in China rose 1% on year last month, with KFC sales flat and Pizza Hut sales up 7%. KFC was helped by a Half Priced Bucket promotion in the first ten days of the month. Yum's Chinese operations have been hammered by the impact of Avian flu worries and a food scandal, but the restaurant operator expects the division's operating profit to grow at least 40% next year.

Top Stock News
Sony PS4 sales top 2.1M. Sony (NYSE:SNE) has sold over 2.1M PlayStation 4 computer gaming consoles since the company launched the device in the U.S. and Canada in mid-November, and in Europe and Australasia on Friday. Sony is well on the way to achieving a forecast from Piper Jaffray that it will sell 3M consoles globally by the end of the year. The investment bank reckons that Microsoft (NASDAQ:MSFT) will sell a similar amount.

Google ups game in cloud-computing dogfight. Google (NASDAQ:GOOG) has made its Compute Engine cloud service generally available as it moves to further compete with Amazon Web Services (NASDAQ:AMZN), Microsoft's (MSFT) Azure and IBM's (NYSE:IBM) offering. Google has cut prices for its infrastructure-as-a-service offering by 10%, is providing access to larger and more complex computing, and it guarantees that critical projects will remain working 99.95% of the time.

Dow shedding assets; mulls name change. Dow Chemical (NYSE:DOW) might consider changing its name, CEO Andrew Liveris said yesterday, dropping "Chemical" as part of its shift away from low-margin commodity chemicals such as chlorine used in cleaning products. Instead, the company is looking to focus on higher-value businesses, including agricultural seeds and packaging materials. Earlier in the day, Dow said it would sell part of its commodity chemicals operations.

Top Economic & Other News
Illinois legislators to vote on pension reform. Illinois' House and Senate are set to vote today on a proposed overhaul of the state's retirement system, one of the most underfunded in the country with a gap of almost $100B. The measures would save an estimated $160B over 30 years with cuts for workers and retirees, and would fully fund the state's five pension systems by 2044. However, unions are deeply opposed to the legislation and its approval is not certain.

Mobile takes large share as Cyber Monday sales jump 16%. Cyber Monday Internet sales climbed 16% from last year to a record $2.29B, Adobe estimates, with Internet transactions for the five-day Thanksgiving shopping period jumping 26% to $7.4B. Sales from mobile devices soared 80% yesterday and accounted for 18.3% of the total. "This is the first holiday season where mobile is absolutely having its mark on overall retail sales, whether that's from a smartphone or a tablet," says JMP Securities analyst Ron Josey.

Yuan overtakes euro for trade finance. The Chinese yuan has passed the euro to become the second-most used currency in global trade finance. The renminbi took an 8.66% share of letters of credit and collections in October vs 6.64% for the euro. The yuan's rise indicates the success of China's attempts to internationalize the currency, such as by loosening forex controls. The government intends to take more steps as part of a major economic reform plan.

Number of U.S. banks at record low. The number of U.S. banks has dropped to below 7,000 for the first time since records began in 1934, falling to 6,891 in Q3 from a peak of over 18,000. The reasons for the trend include consolidation and failure, while tighter regulation makes it harder to open banks. There are those who worry that the loss of community banks hurts the economy, as they are more likely to lend to small businesses than big institutions are.

Spain unemployment drops for first time in November. The number of Spaniards filing for jobless benefits unexpectedly dropped for the first time in November on a monthly basis, falling by 2,475 to around 4.81M. The decline provides evidence that Spain's fragile recovery is continuing despite an unexpected drop in manufacturing PMI, the figures for which were released yesterday.

Alpha-Rich Stock Movers and Great Calls
1) Last Monday, Ravee Mehta called Autobytel (NASDAQ:ABTL) a potential triple, with short-term catalysts as well. Shares are +15.8% since. Read article »
2) On September 30, tech expert Ashraf Eassa called newly public Violin Memory (NYSE:VMEM) overvalued and a strong short play. After nearly halving following its most recent earnings report, the stock is -54.3% to date. Read article »

Alpha-Rich Stocks To Watch
1) Overdone concerns regarding competitive threats have left shares of Alaska Communications (NASDAQ:ALSK) simply too cheap, says Alpha Bet. Read article »
2) Alpha Gen Capital says Seacor Holdings (NYSE:CKH) is a smart allocator of capital, while a sum-of-the-parts analysis suggests 25% upside. 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 +0.6% to 15750. Hong Kong -0.5% to 23910. China +0.7% to 2223. India -0.2% to 20855.
In Europe, at midday, London -0.8%. Paris -1.6%. Frankfurt -1.1%.
Futures at 6:20: Dow -0.35%. S&P -0.3%. Nasdaq -0.1%. Crude +0.3% to $94.07. Gold -0.2% to $1219.70.
Ten-year Treasury Yield flat at 2.8%.

Today's economic calendar:
Auto sales
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales

Notable earnings before today's open: BMO, LTXC

Notable earnings after today's close: BOBE, GBDC, GWRE, OVTI, UNFI

See full real-time earnings coverage »

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