Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
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.

Top Stories
MF clients to be repaid in full - trustee. MF Global Holdings' (OTC:MFGLQ) brokerage clients will eventually get their money back, Louis Freeh, the trustee carrying out the parent company's liquidation has predicted. Freeh made the forecast in written testimony for a Senate hearing scheduled for today. James Giddens, the trustee for MF's brokerage unit, expects lawsuits against former MF officials, including CEO Jon Corzine, as a way to recover money for creditors.

Chevron suffers setback in $18B Ecuador ruling. Chevron (NYSE:CVX) has failed to convince a NY federal judge to find unenforceable an $18B judgment against the company by an Ecuadorian court. However, the judge did leave an injunction against the award in place, pending further litigation. The $18B verdict was for alleged pollution in the Amazon rain forest. As part of his ruling, the judge found that an expert report recommending billions in damages against Chevron was potentially fraudulent.

Top Stock News
Edison unit might file for Chapter 11. Edison International (NYSE:EIX) yesterday said its Edison Mission unit might have to file for bankruptcy protection as it works with bondholders to restructure $3.7B in debt. If talks aren't successful, Edison Mission could have to reorganize under new ownership. The disclosure came as Edison International reported that Q2 net profit almost halved to $103M and revenue rose 2.4% to $3.05B.

MGM to buy out Carl Icahn as it prepares for IPO. Metro-Goldwyn-Mayer's parent company has agreed to buy out Carl Icahn's 17.6M shares in the film studio for over $590M ahead of a possible public listing that could take place in Q4, the WSJ reports. MGM, which has made a confidential IPO filing under the JOBS Act, is looking for a $3B valuation in the offering.

Citigroup executive cleared of wrongdoing over CDO. The SEC's attempts to hold individuals accountable for their actions during the financial crisis received a blow yesterday after a former mid-level Citigroup (NYSE:C) executive, Brian Stoker, was acquitted of wrongdoing for selling a CDO without telling clients the bank had bet against it. Stoker was the only individual charged in the case.

EMC in tie-up with Lenovo. EMC (EMC) has taken a step to gaining a deeper foothold in China after signing a deal in which Lenovo will resell EMC's network storage servers in the country and then in other global markets. The companies will also create a joint venture to sell equipment to small- and mid-sized firms, and they will develop server technology together.

Google delays Nexus device. Google (NASDAQ:GOOG) has delayed the launch of its Nexus Q music-and video-streaming device so the company can "work on making it even better." Some reviewers have complained that the Nexus Q costs more than its rivals but has fewer features. The $299 product, unveiled in June, was meant to ship last month to customers who pre-ordered. No word on a new launch date.

Top Economic & Other News
Government spends billions on training but isn't sure of results. Despite spending billions of dollars on job retraining - the figure was at least $18B in FY 2009, the last available year of data - the government isn't totally sure how effective it is. Efforts to monitor post-training job placement aren't comprehensive, while the data that does exist is inconclusive. The WSJ provides the lowdown with lots of anecdotes.

Congress set to extend government funding for six months. House and Senate leaders have struck a deal to fund the U.S. government for the first six months of FY 2013 - beginning in October - at current spending levels, which would represent a compromise by conservatives pushing for big cuts. It's amazing what an election can do to concentrate minds.

Contraction of eurozone manufacturing speeds up. Eurozone manufacturing PMI fell to a final reading of 44 in July from 45.1 in June, Markit says, with the contraction in factory activity accelerating in Germany, France and Italy. Spain showed a bit of improvement but is still deep in the mire. Still, there is a bright spot: Irish "output is beginning to increase again due to rising exports," says Markit.

Employers face payouts over new health insurance rules. Companies are going to have to pay out an estimated $1.1B of rebates to workers whose 2011 health-insurance plans spent too much of their premium dollars on administration rather than medical care. The requirement goes into force today under the Healthcare Act, as does a rule obligating companies to include contraception and other women's services in workers' plans without charging fees.

U.S. tightens up Iranian sanctions. President Obama has signed an executive order tightening sanctions against Iran, expanding the power to punish anyone conducting transactions using any payment method, including bartering, to acquire Iranian crude oil. Waivers authorized under the existing Iranian sanctions law still apply under the new order.

55% of the buy side reads SA. In its latest survey of professional investors, Erdos & Morgan found that over half of buy-side equity investors visited Seeking Alpha in the last year, including 58% of analysts and 46% of portfolio managers. Recognizing this, IR professionals are stepping up their use of SA in interesting ways.

Editors' Picks
Fighting Over Rectangles: Why Apple Can't Win The Patent War
Natural Gas Prices: America's Energy Jackpot
Seagate Technology: Investors Are Missing The Point

Today's Markets:
In Asia, Japan -0.6%. Hong Kong +0.1%. China +0.9%. India +0.1%.
In Europe, at midday, London +0.7%. Paris +0.6%. Frankfurt -0.2%.
Futures at 7:00: Dow +0.3%. S&P +0.2%. Nasdaq +0.3%. Crude +0.2% to $88.25. Gold +0.2% to $1618.20.

Today's economic calendar:
Auto sales
7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
9:00 PMI Manufacturing Index
9:00 Treasury Refunding Quarterly Announcement
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Petroleum Inventories
2:15 PM FOMC Announcement

Notable earnings before today's open: ADP, AGN, AMT, AVP, CMCSA, D, DVN, EPD, EXC, HUN, MA, MFA, MRO, OC, RRD, SHPG, TLM, TWX

Notable earnings after today's close: BMR, BMRN, CAR, CAVM, FSLR, GGP, GMCR, HIG, IVR, LNC, MET, MUR, NGD, NLY, ONXX, PRU, RIG, SM, TS, TSO, UNM, WLT, WMB, WPZ

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