Wall Street Breakfast: Must-Know News

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 |  Includes: AXP, BX, EM, GLD, HSBC, NOK, NWSA, PFE, QQQ, RDS.A, S, SKYAY, SPY, USO, V
by: SA Editor Yigal Grayeff
SA Editor Yigal Grayeff
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.

Alcatel-Lucent returns to profit but shares plunge. Alcatel-Lucent (ALU) swung to a Q2 net profit of €43M ($61.4M) from a loss of €184M a year earlier and confirmed its full-year targets, but shares slumped 10.2% premarket as revenue growth of 2.4% to €3.9B and operating profit income came in below expectations. Investors are also concerned that network investment by carriers is slowing down, with Juniper collapsing 21% yesterday after warning that operators have already spent half their annual equipment budgets.

LightSquared, Sprint in 15-year agreement. LightSquared and Sprint (NYSE:S) have entered into a 15-year agreement in which LightSquared will pay Sprint $9B in cash and an estimated $4.5B in credits for LTE and satellite equipment. In exchange, Sprint will host LightSquared's spectrum and provide network services, while LightSquared will have roaming access to Sprint's 3G network. The deal enables LightSquared to save about $13B over the next eight years in building its own network. The pact is contingent upon the FCC approving LightSquared's use of spectrum - the FAA has said it could potentially interfere with aviation-navigation systems.

House to vote on Boehner's plan. The House is due for a cliffhanger vote today on John Boehner's proposal to raise the debt ceiling in two steps and cut spending by $917B over 10 years, with at least 18 Republicans opposing the bill. Even if the measure passes, it looks likely to fail in the Senate, where Harry Reid and Mitch McConnell are trying to craft a compromise that can get through both chambers by Aug. 2.

House panel probes Treasury over S&P rating. A House oversight panel is examining whether the Treasury tried to inappropriately influence S&P before it revised its outlook on the U.S.'s debt rating to negative in April. However, emails between S&P and Treasury officials released by the panel don't indicate that the Treasury was unhappy with the review or tried to influence the press release announcing it. Yesterday, S&P said the agency is awaiting details of the final debt-reduction plan before deciding whether to downgrade the U.S.

HSBC to cut thousands of jobs. HSBC (HBC) is reportedly finalizing plans to cut over 10,000 jobs, with losses to come from the streamlining of its head office and the closure of retail banking ops in non-core markets. However, the company is still hiring in Asia and Latin America, so the net fall in headcount may be in the low thousands. The plans follow HSBC's announcement in May it would make $2.5B-$3.5B of savings within three years.

Pfizer leans towards spin-off of animal-health ops. Pfizer (NYSE:PFE) reportedly favors spinning off its animal health unit rather than selling it, because of the tax and antitrust implications of a sale. Pfizer would still consider acquisition proposals for the business, which could be valued at $12B-$15B, while it prepares for a spin-off, although an auction in unlikely. Pfizer hasn't decided what to do with its nutritionals arm but again may favor a spin-off. The company announced the divestiture of both units this month.

Visa benefits from increased credit card use. Visa's (NYSE:V) FQ3 earnings beat forecasts as EPS jumped 40% to $1.43 and revenue increased 14% to $2.32B. As with American Express (NYSE:AXP), Visa's growth was driven by higher volume, with consumers increasingly using cards rather than cash and checks to pay for items. Visa also announced a $1B share repurchase program, adding to an equivalent plan in May, and said it would introduce a new fee structure for U.S. merchants ahead of the implementation of fee caps later in the year.

Emdeon surges on Blackstone reports. Shares in Emdeon (NYSE:EM) soared to close +22.15% following reports that private-equity firm Blackstone (NYSE:BX) is in advanced talks to buy the healthcare IT company for around $3B, including debt. By the end of trading, Emdeon had a market cap of $1.86B; its long-term debt is $935M.

News Corp. surveying shareholders about Murdoch role. News Corp. (NASDAQ:NWS) is reportedly canvassing its biggest shareholders on Rupert Murdoch’s succession, his family’s control of the company, the board's independence, and corporate governance. The survey follows expressions of support and criticism of the Murdochs in the wake of the phone-hacking scandal. Today, James Murdoch is due to face a BSkyB (BSYBY.PK) board meeting amid questions about his chairmanship of the company, which could reportedly announce a £1B ($1.64B) share buyback when it releases its FQ4 results tomorrow.

Jefferson weighs bankruptcy decision. The County Commission in Jefferson, Alabama, is set to meet today to decide whether to file for the biggest municipal bankruptcy in U.S. history. The county has proposed that creditors including JPMorgan (NYSE:JPM), which holds most of the bonds, agree to reduce the debt to about $2B. Jefferson has got into so much trouble because of borrowing to finance a sewer system.

Shell profit almost doubles. Shell's (NYSE:RDS.A) Q2 net profit almost doubled to $8.66B as the company benefited from rising oil prices and the first contributions from recently opened flagship projects in Qatar and Canada. However, oil and gas production slipped 2.1% to 3.04M barrels of oil equivalent per day following divestitures and seasonally weak natural gas demand.

Earnings Results: Today Premarket, Yesterday After-Hours

Today's Markets:
In Asia, Japan -1.4% to 9901. Hong Kong +0.1% to 22571. China -0.5% to 2709. India -1.2% to 18210.
In Europe, at midday, London -0.6%. Paris -1.3%. Frankfurt -1.6%.
Futures at 7:00: Dow flat. S&P +0.2%. Nasdaq +0.1%. Crude -0.5% to $96.94. Gold flat at $1615.50.

Thursday's Economic Calendar:
8:30 Initial Jobless Claims
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 KC Fed Manufacturing
12:45 PM Fed's Lacker: 'What Does the Path to Full Recovery Look Like?'
1:00 PM Results of $29B, 7-Year Note Auction
2:30 PM Fed's Williams: Economic Outlook
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before Thursday's open: ABC, ABX, ADP, AGCO, ALU, AVP, AZN, BC, BLL, BMY, BSX, BWA, CAM, CCE, CELG, CL, CMS, CNX, CS, D, DAN, DD, DHI, ELNK, EQT, GT, GTI, HL, HOT, IMAX, INCY, IP, IPG, IRM, K, LIFE, LIZ, LM, MF, MHP, MJN, MSI, MWW, NBL, NHD, NXPI, ORI, OSK, PHM, POT, PTEN, RCL, RDS.A, ROK, RTN, S, SI, SNE, SNH, SNV, SU, TLM, TWC, TYC, WEC, WM, XEL, XOM, XRA

Notable earnings after Thursday's close: ARBA, CDNS, CHK, CSTR, CYH, DDR, EXPE, FII, GNW, GRM, IM, KEG, KLAC, LEG, MCK, MET, MMI, MXIM, NETL, NLY, QLGC, QLIK, RADS, RGC, RSG, SBUX, SWN, VECO, VRSN, VRTX, VSEA, WOOF

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