Chinese telecom gear makers face blockage from U.S. China's top telecom equipment makers - Huawei and ZTE (OTCPK:ZTCOY) - pose a security threat and should be shut out of the U.S. market, according to a House Intelligence Committee report to be released today. The report - whose conclusions are strongly denied by the subject firms - is likely to be a blow to their efforts to gain market share against the likes of Cisco (NASDAQ:CSCO), Ericsson (NASDAQ:ERIC), Alcatel-Lucent (NYSE:ALU), and Polycom (NASDAQ:PLCM).
China returns from holiday to more losses. The Shanghai Composite fell 0.6% following a week-long holiday, bringing its loss YTD to about 13% and continuing a near 2-year bear market that has seen the index shed 34% of its value. Trading at 11.3 times earnings, the Composite is at its cheapest valuation since 1997, well below its average PE of 24 over the past decade, and that of fellow BRIC member Brazil at 18.8.
Cnooc-Nexen decision could come by mid-month. "The current schedule for the decision is mid-October, unless it is extended," says Canada's Minister of Natural Resources Joe Oliver. Ottawa has the power to block the merger of Nexen and China's state-owned oil giant Cnooc if it believes it's not in the country's economic interests.
Top Stock News
Wal-Mart, Amex to talk financial services. Wal-Mart (NYSE:WMT) and American Express (NYSE:AXP) plan an 8:30 a.m. call for a financial services announcement that could be a way for the cash-transaction-heavy retailer to reach out to low-income shoppers with new credit offerings. The two previously partnered on providing Amex's low-cost prepaid Bluebird card, participation that Wal-Mart ended this summer based on poor sales.
Territorial row has Japan automakers slashing China car production. Toyota (NYSE:TM), Honda (NYSE:HMC), and Nissan (OTCPK:NSANF) plan to cut production in China by about half amidst plunging sales in the wake of protests over the disputed Senkaku/Diaoyu islands, reports the Nikkei. Toyota's China sales reportedly fell 40% Y/Y in September (official numbers are due Tuesday). Meanwhile, other car producers stand to benefit ...
GM's China sales still on rise. General Motors (NYSE:GM) says its auto sales in China were up 1.7% in September, to 244,266 vehicles. Still of note, though, is YTD totals up 10% and GM's continuing powering through the 2M mark (now to 2.08M vehicles).
BHP Billiton suspends mine after rock fall. BHP Billiton (NYSE:BHP) suspends one of its Nickel West mines in Western Australia after evacuating 79 workers due to a rock fall. The seismic incident caused no injuries and the company is investigating.
Pfizer under scrutiny. The company's (NYSE:PFE) aggressive tax-avoidance schemes are under the SEC microscope as the agency wants to know how the company can earn so much profit abroad yet generate losses domestically.
Work continues as normal at Boeing. The labor contract between the Speea union and Boeing (NYSE:BA) ran out over the weekend, but no work stoppages are expected as more talks are set to take place this week. Meanwhile, Boeing delivered to Air India the first 787 jet built at its nonunion South Carolina factory.
Should Yahoo buy back stock with Alibaba cash? Rather than pay a dividend, some are urging Yahoo (NASDAQ:YHOO) to repurchase shares with the $3B raised from selling a stake in Alibaba. Unlike a dividend - which could be seen as admission management lacks fresh ideas for the company - a buyback might signal CEO Marissa Mayer has confidence in Yahoo's growth prospects, say some analysts and fund managers. "There's a bias on Wall Street in general for buybacks versus dividends," says Brian Wiesar.
Top Economic & Other News
Deadlock remains on EADS-BAE deal. Critical issues such as state ownership stakes and the location of the combined company's headquarters remain among the stumbling blocks to completing the merger, according to sources. While progress was made on allowing a German stake, a new dispute arose between the U.K. and France over just how much of a share Paris would be allowed. At issue for the U.K. is not allowing France and Germany combined to have a blocking minority.
Chavez wins another term in Venezuela. Facing his toughest election battle since coming to power in 1998, Hugo Chavez, cruised to victory by 10 points - a rather close margin given the campaigning "advantages" the incumbent has given himself. Oil majors and gold miners hoping for a new government to deal with must continue to wait.
In Asia, Japan closed. Hong Kong -0.9% to 20825. China -0.6% to 2074. India -1.1% to 18727.
In Europe, at midday, London -0.7%. Paris -1.2%. Frankfurt -1.2%.
Futures at 7:00: Dow -0.3%. S&P -0.4%. Nasdaq -0.5%. Crude -1.5% to $88.51. Gold -0.6% to $1771.35.
Today's economic calendar:
No events scheduled.
Bond market closed.
Notable earnings before today's open: none
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