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EU and ECB cooking up "master plan" for Europe. Top EU and ECB officials are reportedly at work on a "master plan" to create an entirely new Europe, including banking, fiscal and political union. Germany is indicating it could drop its opposition to the fiscal and banking elements if EU governments agree to give up more sovereignty, the WSJ reports, although Angela Merkel is still publicly objecting to eurobonds. Opinion: Global risk-off sentiment continues.

Drug firms gain ground in war on cancer. Pharmaceutical companies have been presenting trial data at the American Society of Clinical Oncology meeting in Chicago. Late stage studies of GSK's (NYSE:GSK) trametinib and dabrafenib treatments for skin cancer showed good results, as did Johnson & Johnson's (NYSE:JNJ) Zytiga for prostate tumors, Roche's (OTCQX:RHHBY) T-DM1 and Avastin for breast and ovarian cancer respectively, and Bristol Myers' (NYSE:BMY) BMS-936558 for lung, kidney and skin tumors. Opinion: Rare disease business not so easy.

Portugal to inject over €6.6B in three banks. The Portuguese government is using more than €6.6B of its international bailout money to inject €1.65B into state-controlled Caixa Geral de Depositos, up to €3.5B into Banco Comercial Portugues, and €1.5B into Banco BPI (OTCPK:BBSPY). The rescue comes as the banks face fast-rising loan losses. The state will receive convertible bonds from BCP and BPI in return. Opinion: European banks trading below tangible book value.

Top Stock News
JPM was warned about its risk controls last year. A small group of investors, CtW Investment, warned JPMorgan's (NYSE:JPM) top brass over a year ago that it needed to upgrade its risk controls. Having been ignored, two of the group's proposals - giving the chief risk officer more power to oversee CIO trades and strengthening the board's risk management committee - are now being fast-tracked at the bank. Opinion: How low should JPMorgan fall before buyers return?

BofA shareholders kept in dark over Merrill losses. Days before Bank of America (NYSE:BAC) shareholders approved the firm's $50B Merrill Lynch purchase, BofA executives were told that Merrill's losses would hit the combined companies' earnings for years, but chose not to share this information with investors. Court documents shed new light on the disconnect, and will probably put more pressure on federal officials to hold key managers accountable for their crisis-era (in)actions. Opinion: Avoid BofA's sinking stock.

WellPoint to buy 1-800 Contacts. WellPoint (WLP) intends to acquire contact-lens and eyewear retailer 1-800 Contacts for an undisclosed sum, although the WSJ pegs the deal at $900M. It's the latest sign of health insurers diversifying and deepening their ties with consumers, with WellPoint saying that the deal will enable it capitalize on a shift to increased consumer choice when it comes to healthcare products and coverage. Opinion: Beware the U.S. healthcare bubble.

ISS mostly backs Starboard over AOL directors. Proxy advisor ISS has recommended that AOL shareholders vote for two out of three board candidates nominated by activist investor Starboard Value, which has criticized AOL's content investments. While ISS said the Patch local news network may need more patience, "getting the business model right is (probably) more important than blanketing the landscape." Opinion: Starboard, Street concerned about AOL.

Sony plunges to 32-year low. Sony (NYSE:SNE) fell below ¥1,000 a share in Tokyo trading for the first time since 1980, falling as much as 2.3% to ¥990 before recovering slightly. Sony has posted four consecutive annual losses and "investors’ concern about the company's poor earnings seems to be turning into conviction," says Goldman analyst Takashi Watanabe. Shares closed -1.7% at ¥996. Opinion: Sony needs a catalyst.

BP can sell TNK-BP stake without oligarchy consent. BP (NYSE:BP) is free to sell its TNK-BP stake, a source tells Reuters, responding to speculation that the Russian co-owners of the joint venture will veto any deal. The FT reported earlier today that the TNK-BP shareholder agreements prevent BP from giving out any confidential information to a third party without the joint venture's consent. Opinion: Buy BP before it shoots higher.

Chesapeake's hedging strategy adds to problems. Chesapeake's (NYSE:CHK) sale of its hedges against low gas prices last October has exacerbated the company's cash crunch and left it largely unprotected against low gas prices this year, with the WSJ calculating losses of around $750M-$900M. Chesapeake has generally been successful with these levered bets, but acting more like a hedge fund than an exploration company can clearly backfire. Opinion: Can Chesapeake fill its funding gap?

AMR to meet pilots after flight attendant talks break down. AMR (AAMRQ.PK) is due to renew talks with pilot representatives today on cost cuts, having failed to reach a deal on Friday with the APFA flight attendants' union. If the sides fail to achieve an agreement, a court will rule, possibly on June 22, whether the airline can void the contracts with the unions, which are backing a merger with US Airways (LCC). Opinion: 3 small cap airlines poised for profits.

Facebook looks to children for new high-growth market. Facebook (NASDAQ:FB) is apparently developing technology that would let under-13 year olds use the site with parental supervision, the WSJ reports. The social network currently bans children below that age from opening accounts, but 7.5M of them are estimated to be using the site - having lied about their ages - with 5M under 10 years old. Opinion: How Benjamin Graham would rate Facebook's shares.

Top Economic & Other News
Japan's PM maneuvers to get sales tax bill passed. Japanese Prime Minister Yoshihiko Noda has reshuffled his cabinet in an effort to win opposition backing for his bill to double the sales tax. With less than 20 days to go until the end of the parliamentary session, the move looks like a make-or-break push for the measure, on which Noda has staked his career. Investors and ratings agencies are watching closely. Opinion: Is it finally time to short Japanese government bonds?

Growth slows in China's services sector. China's non-manufacturing PMI fell to 55.2 in May from 56.1 in April, showing that the services sector is still expanding, albeit at the slowest pace in over a year. Service industries now account for 43% of the Chinese economy; officials want to raise this to 47% by 2015. Opinion: Is China really slowing down?

SEC to inquire into "zombie" funds. The SEC is taking a "close look" at zombie funds to "see whether or not there's a problem." The comments, made yesterday by enforcement director Robert Khuzami, follow a Thursday report by the WSJ on the nearly-dead funds, which tie up investor money on assets that are unlikely to ever turn a profit but are continuing to charge client fees. Opinion: Zombie banks and the financial system.

Today's Markets:
In Asia, Japan -1.7%. Hong Kong -2%. China -2.7%. India +0.1%.
In Europe, at midday, London closed. Paris +0.7%. Frankfurt -0.9%.
Futures at 7:00: Dow flat. S&P +0.2%. Nasdaq +0.2%. Crude -1.05% to $82.36. Gold +0.2% to $1624.70.

Today's economic calendar:
9:45 ISM New York Business Index
10:00 Employment Trends Index
10:00 Factory Orders

Notable earnings after today's close: DG

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