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  • Bloomberg goes; BlackRock stays. Merrill (MER) is selling its 20% Bloomberg stake back to Bloomberg for about $4.5B - putting a price tag of at least $22.5B on the financial data and news provider. Sources say Bloomberg wanted to pay $3B; MER wanted $6B - so they split the difference. Merrill bought its stake, originally 30%, for just $30M in 1985. The Street was also buzzing about the fact Merrill is not selling its stake in BlackRock (NYSE:BLK).
  • Microsoft/AOL talks warm up. Talks between Microsoft (NASDAQ:MSFT) and Time Warner's (NYSE:TWX) AOL are heating up, sources say. Microsoft want to expand its internet footprint, and a deal with Yahoo does not seem to be forthcoming.
  • GSE rescue sparks political struggle. Frantic Capitol Hill negotiations over the hastily put together Freddie (FRE) and Fannie (FNM) rescue. Most think the package, which will allow the Treasury to temporarily lend to the two GSEs and buy equity in either or both, will eventually pass.
  • After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
  • Brokers stressed out. Brokerage firms are scrambling to get their back offices prepared before naked short selling becomes taboo Monday. Previous rules allowed shorting with a plan to borrow shares later. Apparently the clampdown is already complicating matters for short-sellers: share prices of the 19 financial firms most affected by the new rule soared Wednesday. Some say the move will only prolong the agony of stocks that 'need to die.' Short selling, playing the "emperor has no clothes" role to offset over-confident corporate management, may be one of the great services investors do for the markets, they say.
  • UBS aides tax evasion; will cooperate with investigation. UBS (NYSE:UBS) helped wealthy U.S. clients evade taxes on as much as $17.9B, a Senate report released late yesterday concluded. "UBS has opened thousands of accounts in Switzerland that are beneficially owned by U.S. clients, hold billions of dollars in assets, and have not been reported to U.S. tax authorities." UBS shares rose 7% in Zurich Thursday.
  • Boeing tanker could save $44B. Boeing (NYSE:BA) says its proposed 767-200ER air tanker could save the Air Force up to $44B in fuel over 40 years vs. the Northrop (NYSE:NOC)/Airbus proposal. It also said Malaysia ordered 35 Boeing (BA) 737-800 jets worth over $2.5B at list price, and Aviation Capital Group said it was buying 15 Boeing 737s in a $934M deal.
  • Consumer prices [CPI] jumped 1.1% from May and are up 5% from a year ago - worse than consensus estimates of 0.7% and 4.5%. Core CPI gained 0.3% from May and is up 2.4% vs. last year - higher than economist forecasts of 0.2% and 2.3%. The outsized miss sparked a selloff in Treasurys, though analysts say the weak economy should keep the rout from extending itself. The data, economist Joseph Brusuelas says, provide "absolutely zero comfort to a Fed that as of yesterday looks to have thrown in the towel on inflation... There is a bit of depressing news for everyone."
  • EIA inventories sent oil prices flailing for a second straight day. Petroleum posted a 2.95M build vs. -2.1M consensus. Distillate +3.19M vs. +2M. Gasoline +2.47M vs. -0.4M. Utilization 89.5% vs. 89.2%. Crude finished the day down 3.2% to $134.34 - where it remains in overnight trading.
  • June Industrial Production rose by 0.5% after falling 0.2% in May - well ahead of the +0.1% consensus. Capacity utilization was 79.9%, up from 79.6% last month. Lehman's Zach Pandl cautioned that a large part of today's strong production rise was from utility and mining sectors. "We would expect the sharp increases to reverse in July."
  • Homebuilder confidence fell further in July to a new record low. Builders say prospective buyer traffic has dropped off significantly in recent months.
  • China growth slowest since 2005. China's GDP slowed to 10.1% in Q2 from 10.6% in Q1. Consumer prices rose 7.1% in June, down from 7.7% in May. There is speculation today's numbers will prompt the government to slow the yuan's gains in order to protect its exports: "A slower pace of appreciation would mean breathing room for the export sector," JPMorgan's Jing Ulrich said. The yuan fell 0.2% against the dollar today.

Earnings: Wednesday After Close

  • Alliance Data Systems (NYSE:ADS): Q2 EPS of $1.04 beats by $0.03. Revenue of $507M vs. consensus of $518M. Sees Q3 EPS of $1.15 vs. consensus of $1.14 and full-year EPS of $4.35 vs. consensus of $4.31. Shares +3.4%. [PR]
  • Colonial BancGroup (CNB): Q2 EPS of -$0.05 misses by $0.06. "The economic downturn that began to impact Colonial's customers during 2007 has, as we expected, continued into 2008." Shares -9.3%. [PR]
  • eBay (NASDAQ:EBAY): Q2 EPS of $0.43 beats by $0.02. Revenue of $2.2B vs. consensus of $2.17B. Sees Q3 EPS of $0.39-$0.41, short of consensus of $0.41, and revenue of $2.10-2.15B vs. consensus of $2.18B. Operating margin falls to 31.9% from 32.4% last year - due to faster growing lower-margin units like PayPal and Skype. Shares -4.5%. [PR]
  • Kinder Morgan Energy Partners (NYSE:KMP): Q2 EPS of $0.64 beats by $0.09. Revenue of $3.5B (+47.7%) vs. $2.74B consensus. Shares +1.3%. [PR]
  • Landstar System (NASDAQ:LSTR): Q2 EPS of $0.56 in-line. Revenue of $698M vs. consensus of $674M. Shares -1%. [PR]
  • Polycom (NASDAQ:PLCM): Q2 EPS of $0.35 misses by $0.01. Revenue of $272M (+16.1%) vs. consensus of $265M. Shares +0.7%. [PR]
  • Resources Connection (NASDAQ:RECN): Q2 EPS of $0.35 beats by $0.07. Revenue of $237M vs. consensus of $228M. Shares +6.5%. [PR]
  • TrueBlue (NYSE:TBI): Q2 EPS of $0.39 beats by $0.10. Revenue of $371M vs. consensus of $368M. Sees Q3 EPS of $0.38-0.42 vs. consensus of $0.37. Shares +2.3%. [PR]
  • Xilinx (NASDAQ:XLNX): FQ1 EPS of $0.30 misses by $0.05. Revenue of $488M vs. consensus of $482M. Shares -3.2%. [PR]
  • Yum! Brands (NYSE:YUM): Q2 EPS of $0.45 beats by $0.03. Revenue of $2.65B vs. consensus of $2.55B. Sees full-year EPS of $1.89-1.95 vs. $1.89 consensus. Shares +3.6%. [PR]

Earnings: Thursday Before Open

  • Amedisys (NASDAQ:AMED): Raises full-year EPS view to $3.00-3.10 from $2.70-2.80; consensus is for $2.75. [PR]
  • Amphenol (NYSE:APH): Q2 EPS of $0.61 beats by $0.03. Revenue of $847M vs. consensus of $816M. [PR]
  • A.O. Smith (NYSE:AOS): Q2 EPS of $1.06 beats by $0.28. Revenue of $622M vs. consensus of $606M. Sees full-year EPS of $2.70-2.85 vs. consensus of $2.89. Expects lower Q3 EPS due to high materials costs. [PR]
  • Baxter (NYSE:BAX): Q2 EPS of $0.85 beats by $0.03. Revenue of $3.2B vs. consensus $3.05B. Raises full-year EPS guidance to $3.28-3.32 from $3.18-3.24 vs. consensus $3.24. [PR]
  • Blackrock (BLK): Q2 EPS of $2.14 beats by $0.17. Revenue of $1.39B vs. consensus of $1.32B. Shares +2.5%. [PR]
  • Bank of New York Mellon (NYSE:BK): Q2 EPS of $0.74 misses by $0.01. [PR]
  • BB&T (NYSE:BBT): Q2 EPS of $0.71 beats by $0.03. Provision for credit losses of $330M is up $242M from last year. [PR]
  • Capitol Bancorp (CBC): Q2 EPS of $0.04 beats by $0.01. [PR]
  • Champion Enterprises (CHB): Q2 EPS of $0.04 misses by $0.07. Expects revenue of $289M vs. consensus of $325M. [PR]
  • CIT Group (NYSE:CIT): Q2 EPS of -$7.88, including charges, vs. consensus of -$3.45. [PR]
  • Coca-Cola (NYSE:KO): Q2 EPS of $1.01 beats by $0.05. Revenue of $9.05B vs. consensus of $8.93B. Sees $400-$500M in annualized savings by 2011. Shares +2.6%. [PR]
  • Coca-Cola Enterprises (NYSE:CCE): Q2 EPS of $0.56 beats by $0.02. Revenue of $5.94B in-line. Sees full-year EPS of $1.40-1.45 vs. consensus $1.41. [PR]
  • Comerica (NYSE:CMA): Q2 EPS of $0.37 misses by $0.13. [PR]
  • Continental (CAL): Q2 EPS of -$0.25 beats by $0.27. Revenue of $4.04B in-line. Shares +0.1%. [PR]
  • CVB Financial (NASDAQ:CVBF): Q2 EPS of $0.21 beats by $0.02. [PR]
  • Cypress Semi (NASDAQ:CY): Q2 EPS of $0.28 beats by $0.07. Revenue of $592M vs. consensus of $540M. Shares +3.9%. [PR]
  • Danaher (NYSE:DHR): Q2 EPS of $1.09 beats by $0.03. Revenue of $3.28B vs. consensus of $3.17B. [PR]
  • Entergy (NYSE:ETR): Sees Q2 EPS of about $1.45 vs. consensus of $1.56, and full-year EPS of $6.50-6.90 vs. consensus of $6.83. [PR]
  • Fairchild Semiconductor (NASDAQ:FCS): Q2 EPS of $0.17 in-line. Revenue of $319M vs. consensus of $413M. [PR]
  • Great Southern Bancorp (NASDAQ:GSBC): Q2 EPS of $0.47 beats by $0.01. [PR]
  • Harley-Davidson (NYSE:HOG): Q2 EPS of $0.95 beats by $0.24. Revenue of $1.57B vs. consensus of $1.4B. Sees full-year EPS of $3.00-3.18 vs. consensus of $3.05. Shares +6.4%. [PR]
  • Huntington Bancshares (NASDAQ:HBAN): Q2 EPS of $0.25 beats by $0.02. Sees full-year EPS of $1.25-1.35 vs. consensus of $1.04. Shares -1%. [PR]
  • Illinois Tool Works (NYSE:ITW): Q2 EPS of $1.01 beats by $0.04. Revenue of $4.57B in-line. Sees full-year EPS of $3.40-3.52, short of consensus of $3.64. Shares +1.5%. [PR]
  • International Game Tech (NYSE:IGT): FQ3 EPS of $0.35 misses by $0.01. Revenue of $677M in-line. Shares +9.5%. [PR]
  • Johnson Controls (NYSE:JCI): FQ3 EPS of $0.73 in-line. Revenue of $9.86B in-line. Sees Q4 EPS of $0.72-0.74, short of consensus of $0.84, and full-year EPS of $2.32-2.34 vs. consensus of $2.42. [PR]
  • JP Morgan Chase (NYSE:JPM): Q2 EPS of $0.54 beats by $0.10. Revenue of $18.39B vs. consensus of $16.55B. $1.1B of markdowns. Shares +5%. [PR]
  • Knoll (NYSE:KNL): Q2 EPS of $0.49 beats by $0.09. Revenue of $292M vs. consensus of $279M. Sees Q3 EPS of $0.38-0.41 vs. consensus $0.37. [PR]
  • McMoRan Exploration (NYSE:MMR): Q2 EPS of $1.24 beats by $0.23. Revenue of $375.5M vs. consensus $307M. Shares +1.3%. [PR]
  • Media General (NYSE:MEG): Preliminary Q2 EPS of -$0.06 vs. consensus of $0.06. Revenue of $205M vs. consensus of $216M. [PR]
  • MGIC Investment (NYSE:MTG): Q2 EPS of -$0.79 misses by $0.18. Revenue of $424.5M vs. consensus $457M. Shares +4.4%. [PR]
  • Nexen (NXY): Q2 FFO C$1.78 beats by $0.48. Revenue of C$2.11B vs. consensus of $1.93B. [PR]
  • Nokia (NYSE:NOK): Q2 EPS of €0.36 beats consensus of €0.34. Sales of €13.2B vs. €12.8B consensus. Shares +8.1%. [Bloomberg]
  • Novartis (NYSE:NVS): Q2 EPS of $0.99 beats consensus of $0.93. Revenue of $10.73B vs. consensus of $10.2B. Shares +2.1% in Zurich. [Bloomberg]
  • Nucor (NYSE:NUE): Q2 EPS of $1.94 beats by $0.11. Revenue of $7.09B vs. consensus of $6.37B. Sees Q3 EPS of $1.80-1.85, short of consensus of $1.95 - due to dilution of Q2 share sale. Shares -5.2%. [PR]
  • Orbital Sciences (NYSE:ORB): Q2 EPS of $0.35 beats by $0.12. Revenue of $301M vs. consensus of $294M. [PR]
  • PNC Financial (NYSE:PNC): Q2 EPS of $1.45 beats by $0.29. Revenue of $2.04B vs. consensus of $1.85B. [PR]
  • PPG Industries (NYSE:PPG): Q2 EPS of $1.62 beats by $0.08. Revenue of $4.5B vs. consensus of $4.17B. [PR]
  • Revlon (NYSE:REV): Q2 Revenue of $375M vs. consensus of $361M. Shares +23.2%. [PR]
  • Safeway (NYSE:SWY): Q2 EPS of $0.53 beats by $0.01. Revenue of $10.12B vs. consensus of $10.23B. Sees full-year EPS of $2.25-2.35 vs. consensus of $2.28. [PR]
  • Sherwin-Williams (NYSE:SHW): Q2 EPS of $1.52 beats by $0.14. Revenue of $2.23B in-line. Sees Q3 EPS $1.20-$1.45, better than consensus of $1.20, and full-year EPS of $3.60-4.10 vs. consensus of $3.79. Shares +2.2%. [PR]
  • Sonoco Products (NYSE:SON): Q2 EPS of $0.57 misses by $0.03. Revenue of $1.09B in-line. Sees Q3 EPS of $0.63-$0.65, below consenesus of $0.66. [PR]
  • SunPower (NASDAQ:SPWR): Q2 EPS of $0.61 beats by $0.10. Revenue of $383M vs. consensus of $343M. Sees full-year EPS of $2.26-2.36 vs. consensus of $2.17, and revenue of $1.39-$1.44B vs. $1.36B. Shares +0.8%. [PR]
  • TD AmeriTrade (NYSE:AMTD): FQ3 EPS of $0.34 beats by $0.02. Revenue of $624M vs. consensus of $610M. Sees full-year EPS of about $1.34; consensus is $1.35. Shares +1.8%. [PR]
  • Textron (NYSE:TXT): Q2 EPS of $1.03 beats by $0.06. Revenue of $3.9B vs. consensus of $3.75B. Sees full-year EPS of $3.80-4.00 vs. consensus of $3.98. [PR]
  • United Technologies (NYSE:UTX): Q2 EPS of $1.32 beats by $0.02. Revenue of $15.7B vs. consensus of $15.33B. Shares +1.3%. [PR]
  • Valueclick (VCLK): Expects Q2 EPS of $0.17-0.18 vs. consensus of $0.16. Revenue of $163-164M vs. consensus $166-170M. Shares -15.5%. [PR]
  • Virginia Commerce (NASDAQ:VCBI): Q2 EPS of $0.18 beats by $0.02. [PR]
  • Watsco (NYSE:WSO): Q2 EPS of $0.94 beats by $0.06. Revenue of $510M vs. consensus of $499M. [PR]

Today's Markets

  • Asia markets closed mainly higher. Nikkei +1% to 12,888. Hang Seng +2.4% to 21,735. Shanghai -0.8% to 2,685. BSE +4.3% to 13,112.
  • In Europe, markets are strongly higher at midday. London +2%. Paris +2.7%. Frankfurt +2%.
  • Futures at 8:00 echo strong overseas gains. Dow +0.8%. S&P +0.9%. Nasdaq +1%.
  • Crude -0.6% to $133.75. Gold -0.2% to $960.50.


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Source: Wall Street Breakfast: Must-Know News