Japan forecasts the end of deflation. Japan has predicted it will finally emerge from a decade and a half of deflation in FY 2013-14, forecasting that the country's GDP deflator, which is a broad measure of prices trends, will increase 0.2%. That would be the first positive reading since 1997. The government also expects nominal GDP of +1.9% to exceed real GDP (+1.7%) - as adjusted for inflation - for the first time in 16 years. However, analysts are mighty skeptical.
Court upholds right to patent genes. A federal appeals court has again approved Myriad Genetics' (MYGN) right to patent two "isolated" genes linked to breast and ovarian cancer in a case that could have wide ramifications for the development of medical tests and treatments. However, the court said Myriad's methods for comparing or analyzing DNA aren't eligible for patents. Opponents had argued that human genes are "products of nature" and so can't be patented.
AMR hopes for second time lucky over labor contracts. AMR (OTC:AAMRQ) is due to today make a second attempt to persuade a bankruptcy judge to allow it to abrogate an existing labor contract for pilots, who last week rejected a modified deal. The APFA flight attendants union supports a revised agreement, noting that the judge has issued a "blistering indictment of the labor unions," and fearing he will let AMR impose new conditions.
Top Stock News
Yahoo searches for a number two. Yahoo (YHOO) has begun searching for a COO to act as its number two to new CEO Marissa Mayer, All Things D reports. "Several Silicon Valley executives and others outside of tech" have been contacted, with Yahoo interested in "someone with a focus on restructuring and also finance," so as to complement Mayer's product-development skills.
BankUnited back on the block. Florida-based BankUnited (BKU), which has a market cap of $2.4B, is considering offers of around $25 a share from Toronto-Dominion Bank (TD) and BB&T (BBT), The NY Post reports. The bids are below BankUnited's close of $25.70 yesterday and its asking price of $27-$29. It's the second time this year that TD and BB&T have been involved in talks to buy BankUnited.
Brocade chief quits despite rising profits. Brocade (BRCD) CEO Michael Klayko has resigned after seven years in the job and following failed attempts to sell the company, which provides switches for data-storage systems. Brocade announced the news along with its results for FQ3, when net profit rose to $43.3M from $1.94M a year ago and EPS of $0.14 beat consensus, as did a 10% increase in revenue to $555M.
Chevron appeals Brazil ban. Chevron (CVX) has appealed against an injunction stopping the company and Transocean (RIG) from operating in Brazil until the companies and some of their executives have been tried over last November's oil spill at the Frade offshore field northeast of Rio de Janeiro. Chevron also wants to restart drilling at the field, which has been shut since March.
Apple TV box would let viewers watch shows any time they want. Apple (AAPL) wants to give users of its prospective TV set-top box, over which it's in talks with major cable companies, the ability to watch shows any time they want, and not just the possibility of watching live TV, the WSJ reports. A cloud-based service would automatically store every program, although the feature would require new content-licensing deals with Hollywood.
Banks act to stop phishing. With cybercrime costing the finance sector an estimated $2.5B last year, firms are buying new Internet domain suffixes as part of their attempts to prevent scammers deceiving customers into giving them their confidential details with bogus Web sites that look authentic. The new suffixes include dot-citi (C), dot-bofa (BAC) and dot-barclays (BCS), with Capital One (COF), JPMorgan (JPM) and American Express (AXP) also buying addresses.
Top Economic & Other News
Bad loans at Spanish banks hit record high. Underscoring the mess that Spanish banks find themselves in, non-performing loans rose to a record 9.42% of their outstanding portfolios in June from 8.95% in May, with the amount increasing €8.4B to €164.4B.
Falling yuan puts China in a dilemma. China could find itself in a bit of a bind if the yuan continues to weaken, as the trend could prevent the PBOC from lowering interest rates to boost the slowing economy, Moody's says. Any rate cut could prompt further capital outflows - which hit a net $71.4B in Q2 - and so hurt efforts to speed growth up. The central bank has recently been propping up the yuan in the market by selling forex reserves.
Worst of drought may have passed - Vilsack. With the weather cooling, the worst of the drought may have peaked, Agriculture Secretary Tom Vilsack said yesterday. However, the variable impact of the dryness, which differs from farm to farm, means that the damage to the corn and soybean crops may not be fully understood until the harvest.
U.S. dependence on Mid-East oil rises. After a period of cutting dependence on foreign oil, particularly from the Persian Gulf, sales to the U.S. from the Middle East have picked up, with Saudi Arabian imports growing 26% on year to 1.45M bpd in the first five months of 2012. The rise is partly driven by the sanctions on Iran, but again leaves the U.S. increasingly exposed to the instability in the region.
In Asia, Japan +0.8%. Hong Kong +0.8%. China +0.1%. India +0.2%.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt +0.2%.
Futures at 7:00: Dow -0.05%. S&P -0.1%. Nasdaq +0.1%. Crude -0.5% to $95.09. Gold flat at $1618.60.
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »