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  • Oil firms team up on spill response system. Exxon Mobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A) and Conoco Phillips (COP) announced they will form a joint venture to design, build and operate a rapid-response system to capture and contain catastrophic deepwater spills, in a bid to regain public confidence in the oil industry. The companies will evenly split an initial $1B investment in the non-profit JV, and the system will be able to handle a spill of up to 100,000 barrels of oil per day flowing 10,000 feet below the surface of the sea; in comparison, the spill from BP's (BP) Gulf well was leaking 60,000 barrels per day at a depth of 5,000 feet below the surface. BP wasn't asked to join the JV, said Exxon CEO Rex Tillerson, because "we don't want to distract them at all." Premarket: RDS.A +2.7%, BP +2.7% (7:00 ET).
  • Bernanke's update spooks markets. Markets dived into negative territory yesterday afternoon following Bernanke's semi-annual monetary policy report to Congress. Among the highlights (or lowlights?), Bernanke called the economic outlook "unusually uncertain," and said the Fed is prepared to take more policy actions as needed, but isn't ready "to take any specific steps in the near term." He also noted that current policy is "already quite stimulative" and available options "are not going to be conventional options." Possible courses of action include lowering the interest on reserves rate, changing the language in the FOMC outlook, or using balance sheet tweaks. Bernanke sees "moderate" economic growth despite a "somewhat weaker outlook" and low inflation with significant time needed to restore jobs.
  • Santander mulls London listing. Banco Santander (STD) is reportedly considering a London flotation of its U.K. operations by the end of the year, potentially raising as much as £3B ($4.5B) in the process, and is waiting to see whether market conditions improve enough to support a listing. Santander is close to buying a 318-branch network from RBS (RBS) which will cost £1.5B-1.8B and analysts have questioned whether the bank can fund the transaction and still retain sufficient capital levels. Premarket: STD +4% (7:00 ET).
  • The end of the rating agency paradigm? Ratings agencies S&P, Moody's and Fitch are refusing to let bond issuers use their ratings until they get a better understanding of their legal exposure created by the new financial overhaul laws; under the new regulations, firms will be liable for the quality of their ratings decisions, effective immediately. Parts of the bond market are already shutting down as a result of the refusal, impacting companies like Ford (F), which was forced to scuttle plans to issue new debt. This could mark the beginning of the "end of the rating agency paradigm."
  • Motorola sues rival for trying to steal trade secrets. Motorola (MOT) filed suit against rival Huawei Technologies, alleging the Chinese telecom equipment maker conspired with former Motorola employees to steal trade secrets beginning as early as 2001. The suit adds to existing security concerns that are undermining Huawei's efforts to expand in developed markets like the U.S. and Japan. Premarket: MOT +1.1% (7:00 ET).
  • Airgas rejects Air Products bid. Airgas' (ARG) board rejected the hostile $5.3B takeover bid by Air Products & Chemicals (APD), saying the revised bid still "grossly" undervalues the company. Air Products said it will continue to ask shareholders to tender their shares and will attempt to place three directors on Airgas' board at the next shareholder meeting.
  • States jump onboard Google probe. Connecticut's attorney general said 37 states have joined his investigation of Google (GOOG) and that he's still seeking information about whether privacy laws were broken when Google's Street View collected the personal data of unsuspecting internet users. Google faces a Friday deadline to respond to information requests, including whether it sold or used any of the information it collected.
  • EADS eyes U.S. buys. EADS (OTCPK:EADSF) is looking at several potential acquisition targets in the U.S., particularly companies in the military services sector, but declined to specify which firms might be targets. The company will decide in the coming weeks whether to move forward with due diligence on any of the potential deals.
  • Obama signs financial reform law. Obama signed the financial reform bill yesterday, saying "it is designed to make sure that everyone follows the same set of rules, so that firms compete on price and quality, not tricks and traps." The bill's far-reaching effects are already being felt (see bond market impact, above).

Earnings: Thursday Before Open

  • Air Products and Chemicals (APD): FQ3 EPS of $1.28 beats by $0.01. Revenue of $2.55B (+29.1%) vs. $2.29B. (PR)
  • BB&T (BBT): Q2 EPS of $0.30 misses by $0.04. (PR)
  • Continental (CAL): Q2 EPS of $1.60 beats by $0.09. Revenue of $3.7B (+18.6%) in-line. (PR)
  • Danaher (DHR): Q2 EPS of $0.56 beats by $0.03. Revenue of $3.31B (+23.8%) vs. $3.21B. (PR)
  • Elan (ELN): FQ1 EPS of -$0.36 misses by $0.30. Revenue of $268.9M (-4.3%) vs. $280.4M. (PR)
  • Eli Lilly (LLY): Q2 EPS of $1.24 beats by $0.14. Revenue of $5.74B (+8.6%) vs. $5.57B. (PR)
  • Fifth Third Bancorp (FITB): Q2 EPS of $0.16 beats by $0.14. (PR)
  • Hershey Foods (HSY): Q2 EPS of $0.51 beats by $0.05. Revenue of $1.23B (+5.2%) in-line. (PR)
  • Medco Health Solutions (MHS): Q2 EPS of $0.83 beats by $0.04. Revenue of $16.40B (+9.9%) vs. $16.21B. (PR)
  • Nokia (NOK): Q2 EPS of $0.11 in-line. Revenue of $10B (+0.9%) in-line. Shares +5.4% premarket. (PR)
  • Starwood Hotels (HOT): Q2 EPS of $0.35 beats by $0.09. Revenue of $1.28B (+10.5%) vs. $1.24B. (PR)

Earnings: Wednesday After Close

  • Alliance Data Systems (ADS): Q2 EPS of $1.38 beats by $0.06. Revenue of $670M (+46%) vs. $657M. Shares -0.5% AH. (PR)
  • Amdocs (DOX): Q2 EPS of $0.58 beats by $0.01. Revenue of $753M vs. $758M. (PR)
  • Amylin Pharmaceuticals (AMLN): Q2 EPS of -$0.28 beats by $0.01. Revenue of $164M (-17.2%) vs. $173M. Shares +0.6% AH. (PR, earnings call transcript)
  • Baidu.com (BIDU): Q2 EPS of $0.35 beats by $0.04. Revenue of $282M (+74.4%) vs. $276M. Shares +3.18% AH. (PR, earnings call transcript)
  • CA Inc. (CA): FQ1 EPS of $0.45 beats by $0.03. Revenue of $1.1B (+4.5%) in-line. Shares -1.4% AH. (PR, earnings call transcript)
  • eBay (EBAY): Q2 EPS of $0.40 beats by $0.02. Revenue of $2.2B (+5.6%) in-line. Shares +2.4% AH. (PR, earnings call transcript)
  • F5 Networks (FFIV): FQ3 EPS of $0.66 beats by $0.07. Revenue of $231M (+45.7%) vs. $218M. Shares +6.3% AH. (PR)
  • Fidelity National Financial (FNF): Q2 EPS of $0.61 beats by $0.26. Revenue of $1.5B (-3.8%) vs. $1.4B. (PR)
  • Intersil (ISIL): Q2 EPS of -$0.48 may not be comparable to consensus of $0.09. Revenue of $220M (+49.3%) vs. $218M. Shares -3.4% AH. (PR)
  • Netflix (NFLX): Q2 EPS of $0.80 beats by $0.09. Revenue of $520M (+27%) vs. $524M. Shares -9.2% AH. (PR, earnings call transcript)
  • Qualcomm (QCOM): FQ3 EPS of $0.57 beats by $0.03. Revenue of $2.7B (-1.7%) vs. $2.6B. Shares +5.1% AH. (PR, earnings call transcript)
  • Robert Half International (RHI): Q2 EPS of $0.08 beats by $0.01. Revenue of $769M (+2.6%) vs. $759M. Shares -0.7% AH. (PR, earnings call transcript)
  • Starbucks (SBUX): FQ3 EPS of $0.29 in-line. Revenue of $2.61B (+8.7%) vs. $2.55B. Raises dividend to $0.13 from $0.10. Shares -1.9% AH. (PR, earnings call transcript)
  • Terex (TEX): Q2 EPS of -$0.12 beats by $0.18. Revenue of $1.1B (+14%) in-line. Shares +2.1% AH. (PR)
  • Total System Services (TSS): Q2 EPS of $0.25 beats by $0.02. Revenue of $434M (+5.3%) vs. $425M. (PR, earnings call transcript)
  • Western Digital (WDC): FQ4 EPS of $1.13 may not be comparable to consensus of $1.35. Revenue of $2.4B (+23%) in-line. Shares -3.4% AH. (PR, earnings call transcript)
  • Xilinx (XLNX): FQ1 EPS of $0.58 beats by $0.05. Revenue of $595M (+58.1%) vs. $569M. Shares +0.7% AH. (PR, earnings call transcript)

Today's Markets

  • In Asia, Japan -0.6% to 9221. Hong Kong +0.5% to 20590. China +1.1% to 2562. India +0.8% to 18113.
  • In Europe, at midday, London +1.0%. Paris +1.8%. Frankfurt +1.6%.
  • Futures: Dow +1.2%. S&P +1.4%. Nasdaq +1.2%. Crude +0.6% to $76.99. Gold -0.4% to $1187.60.

Thursday's Economic Calendar

Seeking Alpha's Market Currents team contributed to this post.


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