EFSF guidelines clarified. The Wall Street Journal reports on proposed guidelines for the EFSF that are making the rounds among German lawmakers. Under the rules, the EFSF would be allowed to purchase debt directly from countries or on the open market, and also allows leveraging of its assets by using bonds it holds as collateral for raising more funds.
Troika's Greece report delayed. The expected report from the troika on Greece's debt load hits a snag as the IMF tilts toward releasing the aid tranche after creditors lock up a second bailout package with bigger writedowns for bond holders. EU leaders say they will hold emergency talks through the weekend.
Yahoo private buyout heats up. Silver Lake Partners reportedly is preparing a joint plan with the Canada Pension Plan Investment Board and Microsoft (MSFT) to put together a deal to buy Yahoo (YHOO). Microsoft would be in for the bulk of the deal, several billion dollars. They're not alone, though; most every major U.S. private-equity firm is knee-deep in buyout plans, and at the $16-$18/share price being thrown around, it'll likely take two to four firms to support a bid that would reach past $20 billion.
Abbott to divide; shareholders concur. The $82B healthcare giant Abbott Laboratories (ABT) will split next year into two publicly traded companies, with one focusing on medical devices and the other on research-based medicines. The device company - expected to have $22B in annual sales - will keep the Abbott name and CEO. Investors (some of whom wanted the split for some time) bid the stock up as much as 7.8% before it ended Wednesday up 1.5%.
More cuts at UBS. UBS interim CEO Sergio Ermotti will push for new cuts instead of a sale or spinoff of the investment bank. Ermotti's main focus is viewed as returning the bank to the relatively low-risk, high-margin business of global wealth management. The front-runner to become the permanent CEO is expected to announce a sweeping plan to shrink the size and scope of the Swiss bank at an investor meeting on Nov. 17.
Groupon's latest, less ambitious deal. Groupon (GRPN) is considering an offering valuing the company at $12B, to come in the next two weeks, according to two sources. The float is expected to be less than 10% of that valuation, and existing shareholders are no longer expected to sell stock in the deal. It's a far cry from earlier this year, when a valuation as high as $30B had been discussed, but above Google's (GOOG) late 2010 offer of $6 billion.
Samsung smartphone shipments outpace Apple. A source tells the Wall Street Journal that Samsung (OTC:SSNLF) delivered more than 20M smartphones in Q3, comparing smartly to the 17.1M units sold by rival Apple (AAPL) in its fiscal Q4. The company is increasing production of its own software-based phones in Europe, as well as launching new phones utilizing Microsoft (MSFT) software.
Fed Beige Book. Most areas of the country reported slight economic improvement in September and early October, according to the Federal Reserve's Beige Book survey of its 12 bank regions. But several regions said a hazier economic outlook is making businesses more cautious and holding back their spending. Consumer spending rose slightly in most districts, with a key reason that more people bought new cars, in part because dealers had a greater selection of models. Still, in some regions, businesses outside the auto industry reported a weaker and more uncertain outlook.
Citigroup settles with the SEC. Citigroup (C) will pay $285M to settle charges brought by the SEC that it misled investors in its sale of a mortgage bond deal. The SEC had been investigating whether Citigroup misled investors in the deal, a CDO created from other CDOs backed by subprime mortgages. The CDO defaulted within months, leaving investors with losses while Citigroup made $160M in fees and trading profits, the agency charged.
EU bank recap could come in low. EU officials indicate just €70-€90B will be necessary to recapitalize the banks, far less than the €200B estimated by the IMF and even higher estimates by private analysts. Key to the analysis will be gains booked on holdings of assets like U.K. Gilts, currently trading 11% above par value, but carried at cost.
Wynn Las Vegas profits trails off. Wynn Resorts (WYNN) reported Q3 EPS of $1.05, missing consensus by $0.11, with in-line revenue of $1.30B (+29% Y/Y). Despite a continued surge in profit from its Chinese resort in Macau. Revenues in the Asian gambling hotbed leapt 41% Y/Y, but were offset by sagging profits from its Las Vegas operations, where net casino revenues were just $126.9M for the quarter, down 8.3% Y/Y.
In Asia, Japan -1% to 8682. Hong Kong -1.8% to 17983. China -2.4% to 2520. India -0.9% to 16926.
In Europe, at midday, London -0.6%. Paris -0.8%. Frankfurt -0.5%.
Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +0.5% to $86.54. Gold -1.8% to $1629.20.
Thursday's economic calendar:
8:30 Initial Jobless Claims
10:00 Existing Home Sales
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
12:50 PM Fed's Pianalto: 'U.S. Manufacturing and the Economic Outlook'
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:00 PM Tarullo: 'Unemployment, the Labor Market, and the Economy'
7:30 PM Fed's Lacker: Economic Outlook
7:45 PM Fed's Kocherlakota: 'The Importance of Teaching Teachers'
Notable earnings after Thursday's close: ALTR, APKT, ASBC, CB, CMG, COF, CPWR, FLEX, HTLD, INFA, MSFT, MXIM, PBCT, RMBS, RRR, SNDK, STX, TPX
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