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
Cisco profit jumps 56%. Cisco Systems' (NASDAQ:CSCO) FQ4 earnings beat expectations as net profit soared 56% to $1.9B, EPS came in at $0.47 and revenue edged up 4% to $11.69B. Cisco increased its quarterly dividend by 75% to $0.14 a share and promised to return at least 50% of free cash flow to investors. The company gave guidance that was in line with Wall Street, and it was upbeat about some parts of the U.S. market but not about Europe. Shares were +5.6% premarket.

Corzine & Co. set to escape criminal charges. Authorities are unlikely to file criminal charges against Jon Corzine and other top MF Global (OTC:MFGLQ) executives after concluding that weak risk controls and chaos rather than fraud led to the disappearance of around $1B in customer money, the NYT reports. Regulators are still mulling civil action, while Corzine & Co. also face client lawsuits, which bankruptcy trustee James Giddens has agreed to co-operate with.

Apple in talks with cable firms about TV box. Apple (NASDAQ:AAPL) is in discussions with Time Warner Cable (TWC) and other leading cable operators about building a set-top box that allows viewers to watch live broadcast TV and other content, the WSJ reports. That would be a major upgrade from Apple's existing product, which doesn't carry network TV, and would represent a breakthrough in the company's attempts to conquer the living room.

Top Stock News
Sears losses fall. Sears (NASDAQ:SHLD) adjusted loss per share narrowed to $0.86 in Q2 from $1.18 a year earlier and met expectations despite revenue declining to $9.47B from $10.14B. The bottom line benefited from lower expenses, while revenues were hurt by falling comparable-store sales - partly due to lower prices for electronic goods - and fewer Kmart and Sears full-line stores being in operation.

EA shares fly on buyout rumors. Electronic Arts (NASDAQ:EA), which has a market cap of $4.17B, is exploring a sale with P-E firms, including KKR (NYSE:KKR) and Providence Equity Partners, The NY Post reports. The buzz is that the video-games company would accept a $20-a-share offer. Shares were +21% premarket to $15.88.

Judge blocks AMR's attempt to throw out pilots' contracts. A U.S. bankruptcy judge has denied AMR's (AAMRQ.PK) request to throw out its existing pilots contracts and impose the cost reductions the carrier says it needs to restructure. The court concluded that the airline's proposed changes weren't justified.

War breaks out between Agrium and Jana. A meeting between Agrium (NYSE:AGU) and activist investor Jana Partners apparently did not go well. Jana's Barry Rosenstein has fired off a letter accusing Agrium of a "scorched earth approach" to avoiding discussions over Jana's proposals to boost shareholder value. The company responded that “the only accurate statements in Jana’s letter are that Agrium is not going to spin off its retail business."

Santander to list Mexican business. Banco Santander (NYSE:SAN) will release a prospectus in the coming days for a listing of parts of its Mexican operations in Mexico and New York. Santander didn't say how much it intends to raise. The news follows speculation yesterday that the unit plans to raise up to $4B in an early September IPO.

Samsung set for another attempt to break Apple's tablet hold. Samsung (OTC:SSNLF) is due to launch its Galaxy Note 10.1 tablet in the U.S., U.K. and South Korea today as it looks to break Apple's (AAPL) stranglehold in the market. While the Galaxy Note 10.1 differs from the iPad with its stylus and ability to have two apps active on a split-screen, it's not cheap at $499 for 16 GB and WiFi only, sparking doubts about its ability to succeed.

Neiman Marcus looks to IPO. Warburg Pincus and Texas Pacific Group are looking to exit Neiman Marcus, possibly with an IPO, the WSJ reports. The private-equity firms bought the upscale retailer for $5.1B in 2005, but its current value is about $4B. While not definite, a public offering would appear to be the logical option for the owners, as other retailers are unlikely to buy it.

The reign of the CD in the U.S. set to end. Revenue from digital music will increase to $3.4B in 2012 in the U.S. and top the $3.38B generated by CDs and vinyl, research firm Strategy Analytics forecasts. While the reign of the CD will end in the U.S. this year, it will take until 2015 for that to occur worldwide. U.S. streaming revenues are expected to grow 28% in 2012 and downloads 6.7%, which should benefit the likes of Spotify and Pandora (NYSE:P).

Top Economic & Other News
Spain to use emergency bailout tranche for Bankia. Spain is set to receive an emergency tranche from its €100B bailout that will be given to recently nationalized Bankia, Bloomberg reports. The payment is necessary because of limits that the ECB recently placed on how much it will lend against government-guaranteed bonds. That meant Spain had to abandon a scheme for Bankia to take a loan from the central bank.

China's Wen indicates that more easing is on the cards. Chinese Premier Wen Jiabao has struck an upbeat note about the economy, saying yesterday that while downward pressure is "relatively large," there have been "some positive changes" recently, especially in July. Wen also said there's "growing room for monetary policy operation," exciting those who hope for further easing.

The sun only shines in some parts of California. If you work at a software or Internet firm in California, things are good, but life can be difficult elsewhere in the state, where huge numbers of manufacturing positions have disappeared. And while California is adding jobs at a fast pace, its unemployment rate of 10.7% is still among the highest in the country. Meanwhile, California's tax and regulatory policies lead to low rankings in business-climate surveys.

Editors' Picks
The Tipping Point: Recession Danger High
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Further Thoughts (And Tweets) On CPI

Today's Markets:
In Asia, Japan +1.9%. Hong Kong -0.5%. China -0.3%. India -0.4%.
In Europe, at midday, London -0.1%. Paris flat. Frankfurt +0.1%.
Futures at 7:00: Dow +0.1%. S&P +0.15%. Nasdaq +0.1%. Crude flat at $94.29. Gold -0.05% to $1605.80.

Today's economic calendar:
8:30 Housing Starts
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 E-Commerce Retail Sales
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

Notable earnings before today's open: DANG, DLTR, GME, PRGO, ROST, SHLD, WMT

Notable earnings after today's close: ARO, AVGO, BRCD, DRYS, GPS, MRVL

See full real-time earnings coverage »

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