Facebook shares sink on growth fears. Facebook (FB) shares dived 8.9% premarket following its Q2 report on concerns about its slowing growth, especially after it didn't provide guidance. Facebook swung to a net loss of $157M from a profit of $240M a year earlier due to large stock compensation charges, EPS was in-line with forecasts at $0.12, and revenue climbed 32% to $1.18B. The big question for Facebook is how to make money from its 543M mobile users.
Libor manipulation stretches to at least 1991. A former Morgan Stanley (MS) London trader, Douglas Keenan, was told by senior staffers in 1991 that "banks misreported the Libor rates in a way that would generally bring them profits," Keenan writes in the FT. And guess who was head of interest-rate trading in London at the time? Bob Diamond. And what happened when Keenan recently offered to give testimony to Parliament? It wasn't wanted.
Starbucks shares go cold as earnings miss forecasts. As with Facebook, Starbucks (SBUX) shares were sharply lower premarket - minus 11% - after FQ3 earnings missed expectations and the company cut its FQ4 forecast, although it did affirm earnings growth of 15%-20% for FY 2013. Lazard's Matthew DiFrisco is taking Starbucks' guidance with "a grain of salt," saying management tends to be conservative. In FQ3, EPS rose to $0.43 from $0.36 and revenue grew 13% to $3.3B.
Top Stock News
Amazon earnings story follows familiar pattern. Amazon (AMZN) shares were +0.45% premarket after having been deeply in the red post-market yesterday following its Q2 earnings report, in which it predicted a Q3 operating loss of up to $350M. The story in Q2 was the same as it's been for a while: EPS plunged to $0.01 from $0.41 while revenue jumped 29% to $12.8B, with the divergence due to Amazon's continued prodigious spending on expansion.
SEC, DOJ mull probe of retailers over bribery. The SEC and Department of Justice are considering starting an investigation of the retail sector for possible breaches of the anti-foreign bribery law, Reuters reports. The deliberations follow allegations about Wal-Mart's (WMT) practices in Mexico, and after other unnamed retailers reported possible offenses by their employees.
Barclays profit rises, faces lawsuits over Libor. Barclays (BCS) today reported that H1 pretax profit rose to £4.2B from £3.7B a year ago but that it's facing lawsuits over Libor. Barclays also said the U.K. financial regulator is investigating four current and former Barclays senior employees, including Finance Director Chris Lucas, over the "sufficiency of disclosure" regarding fees paid when the bank raised an emergency £7.3B with Middle Eastern investors in 2008.
Samsung Q2 net income surges 48% to record $4.5B. Samsung's (GM:SSNLF) Q2 net income jumped 48% to a new high of 5.19T won ($4.5B) on revenue of 47.6T won, powered by smartphone sales of 50.5M, a record volume for a single vendor. Samsung also forecast higher demand for handsets and panels, including from emerging markets.
Universal Music mulls sale of EMI's Parlophone. In order to receive EU approval for its $1.9B acquisition of EMI's (C) recorded music arm, Universal Music (OTCPK:VIVHY) is reportedly ready to sell EMI's iconic Parlophone label, home to the Beatles, Queen and Coldplay, although Universal will look to keep the first two acts. A potential buyer is BMG Rights Management, which is co-owned by KKR (KKR).
Top Economic & Other News
GDP growth seen weakening. Q2 GDP data is due out this morning, with economists expecting that growth fell to 1.4% from 1.9% in Q1, dragged down by weakening consumer spending. Economist Joshua Shapiro doesn't see things getting any better either. "Job growth is not enough to make a big dent in the unemployment rate. Households are trying to repair their finances. I don’t see any significant drivers for the economy in the second half," Shapiro says.
Bundesbank would accept rescue fund buying government bonds. Purchases of government bonds by the eurozone's temporary EFSF rescue fund would be "unproblematic," a Bundesbank spokesman says, although such action by the ECB would still be "problematic." Now, extrapolate the EFSF to the new permanent ESM, pledge that the latter can have a banking license so it can borrow from the ECB, and markets might just zoom off the scale - for a day or two.
Spanish jobless rate hits fresh high. Spanish unemployment grew to a new post-Franco record of 24.6% in Q2 from 24.4% in Q1. The number of unemployed was 5.7M. There are some straws to clutch at, though: the rate came in slightly below consensus, while the number of job losses was just 15,900 vs. 870,000 in the previous three quarters.
In Asia, Japan +1.5%. Hong Kong +2%. China +0.1%. India +1.2%.
In Europe, at midday, London +0.2%. Paris +1.2%. Frankfurt +0.4%.
Futures at 7:00: Dow +0.4%. S&P +0.5%. Nasdaq +0.5%. Crude +0.4% to $89.78. Gold +0.65% to $1630.40.
Today's economic calendar:
8:30 GDP Q2
9:55 Reuters/UofM Consumer Sentiment
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