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  • BofA stands firm against mortgage repurchases. Pimco, BlackRock (NYSE:BLK), the New York Federal Reserve and others are pressuring Bank of America (NYSE:BAC) to repurchase soured mortgages packaged into $47B of bonds by its Countrywide unit. The news helped push shares of BofA down 4.4% yesterday, but opinions are mixed as to whether this is a "groundbreaking development" or little more than an "empty threat." For its part, BofA has vowed to fight the demands that it repurchase loans that allegedly didn't meet underwriting guidelines, saying "we don't believe we've breached our obligations as servicer. We will examine every avenue to vigorously defend ourselves." Premarket: BAC +0.5% (7:00 ET). (More: U.S. probe pans mortgage practices at major lenders)
  • Saskatchewan won't back BHP bid. According to an anonymous Saskatchewan official, the Canadian province has rejected an offer from BHP Billiton (NYSE:BHP) to spend C$370M ($358M) on infrastructure investments. BHP had made the offer in hopes of winning some political support for its Potash (NYSE:POT) bid, but the investment doesn't come close to offsetting the C$3B in revenue officials expect the province will lose over ten years if BHP's bid is successful. Saskatchewan is now expected to give the bid an unfavorable review later this week, though BHP is still expressing confidence that it can satisfactorily address tax-loss concerns and win regional support. Premarket: BHP +2.1% (7:00 ET).
  • Rio Tinto, BHP forge ahead in Australia. Rio Tinto (RTP) approved a $3.1B iron ore expansion today, pushing ahead despite industry concerns over Australia's new mining tax and the recent collapse of its planned joint venture with BHP Billiton (BHP). The move will boost Rio's output by 28% as the company ramps up to accommodate booming demand in Asia. BHP also announced today that it would boost quarterly iron ore output by 6% and is planning to expand its Australian iron ore operations. The dual announcements helped take the edge off of media reports suggesting miners risk being double-taxed under Australia's new tax. Premarket: BHP +2.1%, RTP +1.8% (7:00 ET).
  • China expands embargo of rare earth minerals. In a New York Times report, industry officials said China has quietly halted shipments of key rare earth minerals to the U.S., following a similar embargo on Japan which has been going on for the last month and China's previously announced intentions to reduce mineral exports next year. U.S. trade officials said they're looking into the report. China mines 95% of the world's rare earth minerals, which have broad commercial and military applications, and its embargo decision is likely to be particularly damaging to Western companies which are believed to keep much smaller stockpiles of rare earths than Japanese companies.
  • FDIC to replenish deposit fund. The FDIC will start working to return its Deposit Insurance Fund ratio to 1.35% of insured deposits, even as it cancels a three-basis-point bank fee increase scheduled for Jan. 1. The FDIC's Bair pointed to the importance of giving the industry "greater certainty regarding what rates will be over the long run." The agency also lowered its estimate of bank failure costs to $52B from $60B, and said it will hold back rebates to banks until the fund is healthier. Separately, sources said the FDIC is looking to start selling some commercial mortgage-backed securities, as soon as December or January, as bank failures mount and the agency is stuck with a higher volume of distressed-property loans.
  • Regulators to review Google, Yahoo Japan tie-up. Rakuten Inc. has filed a petition with the Japan Fair Trade Commission asking the antitrust regulator to review the planned tie-up between Yahoo Japan (partially owned by Yahoo (NASDAQ:YHOO)) and Google (NASDAQ:GOOG). The petition argued that the tie-up "would result in Google monopolizing information;" once the partnership is completed, 90% of all internet search queries in Japan will be run through Google's data centers, but regulators have dismissed concerns over the issue.
  • New credit card rules. The Federal Reserve announced plans to change several credit card regulations and to block certain practices that credit card firms have used to circumvent new laws. The aim is to better protect consumers and ensure card issuers "fully understand their compliance obligations," but the new rules won't go into effect until next October at the earliest.
  • Sanofi's Genzyme bid gets antitrust approval. U.S. antitrust regulators approved Sanofi-Aventis' (NYSE:SNY) proposed acquisition of Genzyme (GENZ). Sanofi said its $69/share hostile bid still remains subject to other conditions. Separately, a judge ruled that Apotex Corp. has to pay Sanofi $442.2M in damages for selling generic versions of anti-clotting drug Plavix in 2006, violating Sanofi's U.S. patent.
  • Yahoo defends strategy. Yahoo (YHOO) posted a slight earnings beat yesterday evening (details below) but revenue growth was sluggish and the company has pared back expectations for Q4. On the company's earnings conference call, CEO Carol Bartz chose to focus on Yahoo's online ad business, noting the quarter showed "good display advertising revenue growth, big gains in operating income, and margins that were double what they were last year." Shares rose 1% in after-hours trading, but pressure on Bartz is growing to turn the company around more quickly.
  • Judge approves Citi-SEC settlement. As expected, a federal judge signed off on Citigroup's (NYSE:C) revised settlement with the SEC over allegations the firm had misled investors about subprime mortgage assets. Citigroup will pay a $75M fine, and maintain disclosure and earnings committees for three years. Executives will also be required to sign statements attesting to the accuracy of earnings statements and earnings conference call scripts. Premarket: C +0.7% (7:00 ET).
  • Suitors line up for BAE Systems. General Electric (NYSE:GE), Honeywell (NYSE:HON), United Technologies (NYSE:UTX) and Goodrich (NYSE:GR) are said to be among the suitors for BAE Systems' (OTCPK:BAESY) aerospace unit. The firms are conducting due diligence, and final bids are expected in November. The unit could bring in as much as $2B.
  • Canada's turn to bash Google's Street View. Canada is the latest country to criticize Google's (GOOG) Street View project for violating consumer privacy. Following an investigation, Canada's Privacy Commissioner said Google collected highly sensitive personal information, including information about individuals' medical conditions, and that the incident "was the result of an engineer's careless error as well as a lack of controls to ensure that necessary procedures to protect privacy were followed." Google has been asked to boost privacy training, ensure it complies with Canadian laws, and secure or delete any Canadian information collected.

Earnings: Wednesday Before Open

  • Check Point Software (NASDAQ:CHKP): Q3 EPS of $0.63 beats by $0.04. Revenue of $273.2M (+16.9%) vs. $262.8M. (PR)
  • Comerica (NYSE:CMA): Q3 EPS of $0.33 misses by $0.08. Shares -8.8% premarket. (PR)
  • EnCana (NYSE:ECA): Q3 EPS of $0.13 misses by $0.06. Shares -4.3% premarket. (PR)
  • Quest Diagnostics (NYSE:DGX): Q3 EPS of $1.13 beats by $0.13. Revenue of $1.86B (-1.7%) vs. $1.87B. (PR)

Earnings: Tuesday After Close

  • Altera (NASDAQ:ALTR): Q3 EPS of $0.69 beats by $0.04. Revenue of $528M (+84%) vs. $526M. Shares +2.2% AH. (PR, earnings call transcript)
  • Boston Scientific (NYSE:BSX): Q3 EPS of $0.12 beats by $0.06. Revenue of $1.9B (-5.4%) in-line. Shares +3.8% AH. (PR, earnings call transcript)
  • Cree (NASDAQ:CREE): FQ1 EPS of $0.60 beats by $0.02. Revenue of $268M (+58.7%) vs. $278M. Shares -7.6% AH. (PR)
  • Fulton Financial (NASDAQ:FULT): Q3 EPS of $0.16 beats by $0.02. Shares +0.2% AH. (PR)
  • Gilead Sciences (NASDAQ:GILD): Q3 EPS of $0.90 beats by $0.03. Revenue of $1.9B (+7.6%) in-line. Shares +2.1% AH. (PR, earnings call transcript)
  • Juniper Networks (NYSE:JNPR): Q3 EPS of $0.32 in-line. Revenue of $1B (+22.9%) in-line. Shares -3.1% AH. (PR, earnings call transcript)
  • SLM (NASDAQ:SLM): Q3 EPS of $0.35 beats by $0.08. Shares +0.1% AH. (PR)
  • Stryker (NYSE:SYK): Q3 EPS of $0.80 beats by $0.03. Revenue of $1.8B (+7%) in-line. Shares +5.3% AH. (PR, earnings call transcript)
  • Tempur-pedic International (NYSE:TPX): Q3 EPS of $0.62 beats by $0.06. Revenue of $296M (+32%) vs. $294M. Shares -0.9% AH. (PR, earnings call transcript)
  • United Rentals (NYSE:URI): Q3 EPS of $0.40 beats by $0.15. Revenue of $605M (+2.2%) vs. $598M. Shares +5.9% AH. (PR)
  • Western Digital (NASDAQ:WDC): FQ1 EPS of $0.84 beats by $0.03. Revenue of $2.4B (+8.5%) in-line. Shares -0.6% AH. (PR, earnings call transcript)
  • Yahoo (YHOO): Q3 EPS of $0.17 beats by $0.02. Revenue of $1.6B vs. $1.13B. Sees Q4 revenue of $1.125-1.225B vs. consensus of $1.26B. Shares +1% AH. (PR, earnings call transcript)

Today's Markets

  • In Asia, Japan -1.6% to 9381.6. Hong Kong -0.9% to 23557. China +0.1% to 3004. India -0.6% to 19872.
  • In Europe, at midday, London +0.3%. Paris +0.6%. Frankfurt +0.2%.
  • Futures at 7:00: Dow +0.2%. S&P +0.4%. Nasdaq +0.5%. Crude +1.1% to $80.39. Gold +0.4% to $1341.30.

Wednesday's Economic Calendar

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

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