Moody's and Fitch affirm U.S. rating. With the Senate passing the debt deal and President Obama signing it into law, Moody's and Fitch have confirmed the U.S. will keep its AAA rating. However, both said more deficit-reduction measures are needed and Moody's assigned a negative outlook. Eyes are now focused on S&P, which has threatened to downgrade the U.S. by mid-October if it doesn't come up with a plan to meaningfully cut debt.
Italy, Spain to try to calm markets. Silvio Berlusconi is due to address Italy's parliament today (15:00 ET) and Spain's prime minister will hold a high-level crisis meeting in an attempt to calm markets as the countries' borrowing costs continue to hit record highs. With no notable news driving the increase, one analyst said the turmoil appeared to be part of a vicious cycle. A major question is what it will take for the ECB to intervene - speculation of action from the bank and China last month put a stop to similar movements in the market.
Swiss National Bank cuts rates. The ECB may be reluctant to take action, but the Swiss National Bank today showed no such qualms in attempting to stem the inexorable rise of the franc, which has been used as a safe haven. The bank cut its three-month Libor interbank rate to 0-0.25% from 0-0.75% and said it will increase the supply of francs to the money markets. The medicine has worked so far, and the franc was -2.4% vs. the euro and -1.4% vs. the dollar in midday European trading.
BofA mortgage settlement talks could provide homeowner relief. Bank of America (NYSE:BAC) is reportedly in talks with a small group of federal and state prosecutors about a deal in which it would lower the money distressed homeowners have to pay back in return for immunity for the bank from government prosecution over inappropriate mortgage practices. The negotiations are in addition to talks between the authorities, BofA and four other large mortgage providers, and any deal could serve as a template for those four banks.
RIM unveils phones as it looks to fight back. RIM (RIMM) has unveiled five new BlackBerry models as it attempts to recover market share losses from the iPhone (NASDAQ:AAPL) and from Android (NASDAQ:GOOG) devices. The handsets - three "Torches" and two "Bolds" - run on the new BlackBerry 7 operating system and have been a long time in coming, but with RIM promising "superphones" next year that use the OS on RIM's PlayBook tablet, analysts are looking beyond today's launch for any fight back to take hold.
EMI attracts bids of $3B-$4B. Citigroup (NYSE:C) has received first-round bids of $3B-$4B from over 10 groups for EMI, including from Sony (NYSE:SNE), Universal (OTC:VIVDY), Warner Music (NYSE:WMG) and BMG. The final price could enable Citi to recoup up to three quarters of the $5.5B it lent Guy Hands in his ill-fated acquisition of EMI in 2007. The deal size will depend on whether the company is sold as one or divided between the publishing and recorded music arms.
Samsung looking at InterDigital IP. Samsung (OTC:SSNLF) has reportedly joined Google (GOOG) and Apple (AAPL) in examining InterDigital's (NASDAQ:IDCC) portfolio of around 8,800 patents after being approached to make a bid. Seoul analyst Lee Seung Woo said buying InterDigital's IP could enable Samsung to hedge its risk in its patent dispute with Apple (AAPL), as InterDigital's technology is used in the iPhone, as well as in the Blackberry (RIMM) and in Android (GOOG) devices. InterDigital has a market cap of $2.87B but could fetch over $5B.
ITC to review Apple request to block Samsung imports. The International Trade Commission is to review Apple's (AAPL) request to block Samsung's (OTC:SSNLF) Galaxy S mobile phone and Galaxy Tab computer from being imported into the U.S. due to patent infringements. The ITC said last week it would do the same for a Samsung request regarding the iPhone and iPad. The intensifying dispute between the companies threatens to strain a key supply relationship - Apple was Samsung's second-largest customer last year and accounted for $5.7B in revenue.
CBS profit more than doubles. Traditional TV companies are finally making something from the Internet, with a new content-streaming deal with Netflix (NASDAQ:NFLX) helping CBS's (NYSE:CBS) Q2 EPS to more than double to $0.58 and easily beat expectations. CBS should benefit from the Web even more in the future, having recently signed an agreement with Amazon (NASDAQ:AMZN) as well. CBS's Q2 revenue jumped 21% as all of the company's business segments grew except book publisher Simon & Schuster.
Hertz beats the Street. Strong travel demand and lower depreciation costs helped Hertz's (NYSE:HTZ) Q2 earnings beat expectations. EPS excluding items almost doubled to $0.26 while revenue jumped 10% to $2.07B. With Hertz also raising its full year outlook, shares increased 2.8% in after-hours trading.
Congress goes on vacation. Having endured a long and bruising debt battle, Congress has begun its August break and won't take any more votes until September. Matters left hanging include several jobs bills; trade agreements with South Korea, Panama and Colombia; and re-funding the Federal Aviation Administration. Around 4,000 FAA staff will remain furloughed until next month at least, while hundreds of aviation projects employing many more will stay idle. The government will also miss out on over $1B in taxes on airline tickets.
In Asia, Japan -2.1% to 9637. Hong Kong -1.9% to 21993. China flat at 2678. India -0.9% to 17941.
In Europe, at midday, London -0.8%. Paris -0.3%. Frankfurt -0.8%.
Futures at 7:00: Dow +0.45%. S&P +0.6%. Nasdaq +0.5%. Crude -0.5% to $93.34. Gold +1.45% to $1668.30.
Wednesday's economic calendar:
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
10:00 ISM Non-Manufacturing Index
10:00 Factory Orders
10:30 EIA Petroleum Inventories
Earnings Results: Today Premarket, Yesterday After-Hours. Please click on tickers below to go to individual company pages.
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