Germany backs expanded ESFS. The German parliament approved increasing the size and flexibility of the ESFS. The winning margin in the Bundestag was a comfortable 523 to 85, while three members abstained. The vote marks an important victory for German Chancellor Angela Merkel, as she faces internal and external criticism over Germany's bailout efforts.
Targeting iPad: Ready, aim, Fire. Amazon.com (AMZN) unveiled its much-anticipated Kindle Fire tablet, featuring a 7-inch display and costing only $199 - $50 less than the Nook Color (BKS) and $300 less than the cheapest iPad (AAPL). The tablet will run on Android (GOOG), but nonetheless act like a "souped-up Kindle." Amazon also will roll out a basic $79 version of its traditional Kindle e-reader and touchscreen versions at $99 and $149, which might prime it to take a bite out of Apple.
A longer look at Motorola deal. The Justice Department's antitrust division asks Google (GOOG) and Motorola Mobility (MMI) for more information regarding their proposed $12.5 billion merger - which may delay a closing set for around the end of 2011. The antitrust reviews are separate from the FTC's ongoing look at whether Google has monopoly power over Internet search. Google's shares are down 11% year-to-date.
H-P girds with Goldman. Preparing for the prospect of activist investors who might want to make some changes, Hewlett-Packard (HPQ) has reportedly hired defense expert Goldman Sachs (GS) to guard the company from attacks - which means strategies like poison pills could be in the offing. One target of criticism: new CEO Meg Whitman.
Reebok fire back. Adidas' (OTCQX:ADDYY) Reebok unit responds to FTC claims of false advertising, saying a $25 million settlement with the regulator does not mean the company agrees with an allegation it misrepresented the health effect of its "toning shoes" to consumers. The FTC action rattled shares of other shoe companies making health-related claims including Skechers (SKX), Crocs (CROX), and Steve Madden (SHOO).
Targets trimmed at AMD. Advanced Micro Devices (AMD) fell 9.4% in after-hours trading after warning its Q3 revenue will increase only 4%-6% from the prior quarter, compared with prior guidance of 8%-12%. The company also said it expects its gross margin to come in at 44%-45%, below guidance of 47%. AMD primarily blamed the weakness on manufacturing issues related to its 32nm technology. Intel (INTC) ramped 32nm production in early 2010.
UAW OK with new GM pact. The United Auto Workers ratified a four-year collective bargaining agreement with General Motors (GM), saying the contract will create 6,400 new jobs in the U.S., including positions for new hires as well as laid-off workers. CFO Dan Ammann estimated the new agreement will increase its hourly labor costs by 1% annually, the slimmest amount of any contract in the past four decades. GM expects 14% of 10,000 skilled trade workers to take buyout deals, which would be "extremely beneficial in keeping our fixed cost in line as industry demand improves."
Fed chairman frets jobs, deflation. Ben Bernanke delivered a largely academic speech about "lessons from emerging market economies" that avoided comments on U.S. monetary policy, but the Q&A session afterward was a bit more interesting. Bernanke bemoaned a weak labor market as "a national crisis," noting "we've had close to 10% unemployment now for a number of years, and of the people who are unemployed, about 45% have been unemployed for six months or more... This is unheard of," and called for policies "that could help them find work, train for work and retain their skills." If inflation falls too far, "that would be something we have to respond to because we do not want deflation," he added.
Online ad revenues still clicking. The Internet Advertising Bureau estimated U.S. online ad revenues rose 23% in the first half to a record $14.9 billion, a major ramp in growth from the 11% and $12.1 billion reported for 1H 2010. Google (GOOG) and ValueClick (VCLK) investors could be pleased to know search and display ad sales both rose 27%, and video sales 42%. But a 2% decline in classified sales might not sit well with New York Times (NYT) and Washington Post (WPO) investors.
Short-sale bans go on. Italy and Spain extended their bans on short-selling due to ongoing volatility, according to European regulator ESMA. Italy extended until Nov. 11, while Spain didn't set a date, saying its decision was based on "protracted instability in European securities markets." The extensions seemed to coincide with the start of yesterday's late selloff in stocks and commodities.
Kodak's picture fading. Fitch Ratings followed up on Moody's Tuesday downgrade of Eastman Kodak's (EK) credit rating with its own cut to CC - a level signifying "default of some kind appears probable." It's been a horrendous week for shares - down 38% in three days - kickstarted when the firm surprised investors with a $160 million draw on its credit facility due to dwindling cash flows.
Asia: Japan +1.0%. Hong Kong (closed). China -1.1%. India +1.5%.
Europe at midday: London -0.5%. Paris +1.0%. Frankfurt +0.3%.
Futures at 7:00: S&P +0.70%. 10-yr +0.01%. Euro +0.32% vs. dollar. Crude +1.02% to $82.09. Gold +0.10% to $1619.70.
Thursday's economic calendar:
8:30 GDP Q2
8:30 Initial Jobless Claims
8:30 Corporate Profits
8:30 Fed's Plosser: Economic Outlook
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 KC Fed Manufacturing
1:00 PM Results of $29B, 7-Year Note Auction
1:50 PM Fed's Rosengren: 'A Case Study of Past and Present Financial Crises'
3:00 PM USDA Ag. Prices
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings after Thursday's close: MU
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