Wall Street Breakfast: Must-Know News

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.

Zynga files for IPO at $7B market cap. Despite the fall in value of recently listed Internet plays, Zynga (NASDAQ:ZNGA) has filed for an IPO in which it plans to sell 100M shares, or 14.3% of its stock, at a price of $8.50-$10. That would give the Internet-games company a valuation of up to $7B.

RIM to take $458M PlayBook provision. Research In Motion (RIMM) will take a $485M pretax provision in relation to its PlayBook and now expects FQ3 revenue to be slightly lower than the previous range of $5.3B-5.6B. EPS will come in at the low to mid-point of RIM's prior prediction of $1.20-$1.40. For FQ4, RIM said that lower shipments will hurt its outlook, while it no longer expects to meet its full-year EPS guidance of $5.25-$6.00. Shares have been halted in premarket trading.

Has Merkel opened the door for stronger ECB action? Angela Merkel today called for the credibility of the ECB to be protected, but interestingly said that "In future, I will not comment on what...national central banks or the European Central Bank do or don't do." Is that the slightest hint that Merkel will drop her opposition to hitherto verboten ECB action? Echoing Nicolas Sarkozy yesterday, Merkel also said the EU's goal is fiscal union that enforces discipline and has the "necessary instruments" to allow policy coordination.

China won't come to eurozone's rescue. "The idea that China should save Europe does not stand," Chinese Vice Foreign Minister Fu Ying said today, providing one of the country's strongest rebuttals yet that it should use its $3.2T forex reserves for this purpose. Fu pointed out that the government also "cannot use this money domestically to alleviate poverty."

EU Commission to throw book at Google. The EU Commission is expected to issue early next year a statement of objections that will be over 400 pages long and will detail the bevy of allegations against Google (NASDAQ:GOOG) about the abuse of its dominance, the dealReporter writes. Google faces a fine of up to 10% of its annual turnover if found guilty.

Western Digital restarts Thai output. Western Digital (NASDAQ:WDC) has joined rival Seagate (NASDAQ:STX) in signalling a recovery from the Thai floods, saying that it has restarted the output of hard disk drives in the country and that it is raising its FQ2 revenue outlook to at least $1.8B. That's above Street forecasts and prior guidance. WDC is also upbeat on margins but expects to take a charge of $225M-$275M, excluding any insurance recovery.

Jobs growth expected to have accelerated. Employment data is due out this morning, with economists expecting that the growth in nonfarm payrolls accelerated to 125,000 in November from 80,000 in October, although that is unlikely have been enough to bring down the jobless rate from 9%. That would mean that unemployment would have been above 8% since February 2009, the longest stretch since monthly records began in 1948.

Railways and unions on track to avoid strike. Major railway companies, including CSX (NASDAQ:CSX) and Union Pacific (NYSE:UNP), appear to have avoided a damaging pre-Christmas strike of almost 50,000 workers next week after reaching tentative labor deals with two big unions. A third union, the last of 13 without an agreement, has extended the deadline for a deal by two months. The agreements come as rail traffic continues to chug along nicely.

Brokerages face new rules following MF's collapse. Regulators are considering new rules for brokerages following MF Global’s (OTC:MFGLQ) collapse, with the CFTC due to vote next week on restricting the use of customer money and the SEC looking to enforce greater accounting disclosures. The CFTC had wanted to complete the rules regarding client cash early in the year, but delayed the changes amid robust lobbying from...Jon Corzine.

Thomson Reuters replaces CEO. Thomson Reuters (NYSE:TRI) is replacing CEO Tom Glocer with COO James Smith following a slump in its share price. The change is the latest management shakeup at the news and information company as it seeks to turn around the disappointing performance of its financial data business amid a weakening economy and strong competition, particularly from Bloomberg.

EA getting serious about casual gaming. Electronic Arts (ERTS) continues to expand its casual gaming arsenal as it looks to challenge Zynga, with EA saying it is acquiring KlickNation, a developer of social role-playing games. EA's move follows its purchase of mobile games developer PopCap and the release of a Facebook title for its popular Sims franchise.

Senate blocks payroll tax relief bills. The Senate last night blocked Democrat and GOP bills to extend the payroll tax relief, although this could apparently open the door for a broader deal that could also include Republican ideas for offsetting the revenue losses and Democrat demands to extend unemployment benefits. Economists reckon that letting the tax cut expire could reduce growth by 0.5%-1% and cost 400K-1M by the end of 2012, but many Republicans are unconvinced.

Today's Markets:
In Asia, Japan +0.5% to 8644. Hong Kong +0.2% to 19040. China -1.1% to 2361. India +2.2% to 16847.
In Europe, at midday, London +1.5%. Paris +1.6%. Frankfurt +1.7%.
Futures at 7:00: Dow +1.1%. S&P +1.1%. Nasdaq +1.2%. Crude +1% to $101.18. Gold +1% to $1756.50.

Friday's economic calendar:
Monster Employment Index
8:30 Nonfarm Payrolls
9:00 Fed's Fisher: 'America's Fiscal Challenges'
10:00 Fed's Plosser: Debt and Monetary Policy

Earnings Results: Companies that beat EPS expectations last night and today include PVH (NYSE:PVH), Avago Technologies (NASDAQ:AVGO), Zumiez (NASDAQ:ZUMZ).

Those that missed forecasts include H&R Block (NYSE:HRB).

For full real-time earnings coverage, please click here.

Notable earnings before Friday's open: BIG, BNS

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