BHP shelves $20B copper expansion as China slowdown bites. In one of the biggest signs of how China's falling growth has stalled the global mining boom, BHP Billiton (BHP) is abandoning a $20B expansion of its Olympic Dam copper project in Australia and will look at a "less capital intensive option" instead. BHP, whose H2 profits before items sank 35% to $7.16B, won't approve any new projects until at least mid-2013.
Dell falls after weak earnings report. Dell's shares slid 4.5% post-market after the PC maker reported falling earnings in FQ2 and warned about future income. Net profit dropped to $732M from $890M a year earlier, and although EPS of $0.50 beat Street forecasts, an 8% decline in revenue to $14.48B missed consensus. Consumer revenue slumped 22% as Dell experienced price pressure at the low end, although more happily, enterprise solutions/services rose 6%, with servers/networking up 14%.
Japan swings to deficit as exports tumble. Japan swung to a far greater-than-expected trade deficit of ¥517.4B ($6.5B) in July from a surplus of ¥60.3B in June after exports slumped 8.1% on year, which was again worse than predicted. Sales to the EU plunged 25.1% and to China 11.9%, adding to fears about global demand following poor trade figures from other Asian countries.
Top Stock News
RBS investigated over breaking Iran sanctions. If there's a banking scandal, RBS (RBS) is often involved, and sure enough the Fed and Department of Justice are investigating the bank for violations of sanctions against Iran, the FT reports. Two years ago, the bank agreed to pay $500M in fines for Dutch unit ABN Amro breaching embargoes against Libya, Sudan and Cuba, as well as Iran. Germany's Commerzbank (OTCPK:CRZBY) is also reportedly under investigation.
Empire State Building IPO at risk of failure. The attempt by the owner of the Empire State Building (ESB), Malkin Holdings, to form a REIT and take the iconic skyscraper public is in danger of failing due to opposition from legacy investors from the 1960s. Malkin needs the approval of 80% of 3,300 units held by those investors, who fear for their regular income checks and the tax implications of going public.
HP set for record net loss. With Dell (DELL) having reported earnings yesterday, it's the turn of H-P (HPQ) after the bell today, with analysts estimating that the latter's FQ3 adjusted EPS fell to $0.98 from $1.10 and that revenue slipped 3.5% to $30.1B. H-P is also expected to make a net loss of up to $8.9B, the biggest in its history, following a massive writedown of its 2008 acquisition of EDS, and due to a $1.5B-$1.7B charge following job cuts.
Top Economic & Other News
U.S. firms could lose out as Russia joins WTO. After 18 years of negotiations, Russia is finally due to join the WTO today, although American companies such as Caterpillar (CAT), Deere (DE) and GE (GE) could lose out. Due to Russia's crackdown on its opposition and its backing of rogue regimes, Congress is not inclined to repeal a cold-war law that restricts trade with the country. Russia says it has no plans to respond in kind, although it could legally do so.
Greece asks for "air to breathe". Speaking ahead of talks today with eurozone chief Jean-Claude Juncker, Greek PM Antonio Antonis Samaras has told Germany's De Bild newspaper that his country needs "air to breathe" to spark the economy back into life. Samaras, who is also scheduled to meet Angela Merkel and Francois Hollande later this week, is looking for an extension to budget cuts. The FT reports that these cuts will be greater than expected, due to falling tax revenues and increased social security contributions.
Manufacturers count the cost of regulation. Federal regulations could cut the total value of shipments by U.S. manufacturers by up to $500B this year, according to a report from a public policy group representing mostly big manufacturers. The report said EPA rules are the most burdensome - with 972 regulations - followed by those from the Departments of Transportation (880), Labor (214) and Energy (106).
SEC to vote on "conflict minerals". The SEC is today due to finalize new rules compelling U.S. companies to disclose whether they buy certain metals that have fueled years of war in Congo. Industry groups say that firms will be disadvantaged and that the rules would create a costly new compliance regime, although high-tech firms have been making a voluntary effort to cut these "conflict minerals" from their supply chains.
RBA Governor in hot water over bribery memo. The Royal Bank of Australia has denied that Governor Glenn Stevens misled a parliamentary panel last year when he testified that bank officials knew nothing of a bribery scandal at its printing units until 2009. The testimony seems to contradict a memo that then RBA Deputy Governor Ric Battellino received in 2007 which raised concerns about the bribing of foreign officials to win contracts.
In Asia, Japan -0.3%. Hong Kong -1.1%. China -0.5%. India -0.2%.
In Europe, at midday, London -1.2%. Paris -0.9%. Frankfurt -1.0%.
Futures at 7:00: Dow -0.2%. S&P -0.3%. Nasdaq -0.3%. Crude -0.4% to $96.44. Gold flat at $1643.10.
Today's economic calendar:
7:00 MBA Mortgage Applications
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
2:00 PM FOMC minutes
11:30 PM Fed's Williams: Economic Outlook
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