Hopes rise that China is turning the corner. Chinese Q3 GDP fell to an expected +7.4% on year from +7.6% in Q2, marking the seventh consecutive quarter of deceleration and the slowest pace of growth since Q1 2009. However, data for September showed increasing retail sales, industrial production, and fixed-asset investment in urban areas, providing hope that China's deceleration may be bottoming out.
Rosneft offers BP $28B for 50% in TNK-BP. Rosneft has reportedly made a formal offer of $28B in cash and stock to buy BP's (NYSE:BP) stake in TNK-BP. The U.K. company would receive $15B-$20B in cash and a holding in Rosneft of 10%-20%. Earlier this week, Rosneft agreed to acquire the 50% stake in TNK-BP held by four Russia-based billionaires, who today waived their right to bid for BP's stake after being unable to raise the money.
Sprint maneuvers to gain control of Clearwire. Sprint (NYSE:S) is working on a fancy move to take control of Clearwire (CLWR) without buying it, the WSJ reports. Sprint is trying to cut a deal with other major Clearwire investors - including Comcast (NASDAQ:CMCSA) and Intel (NASDAQ:INTC) - that would allow it to appoint a majority of directors to Clearwire's board.
Top Stock News
Verizon's net profit jumps 15.5%. Verizon (NYSE:VZ) met expectations as net profit climbed 15.5% to $1.59B, EPS came in at $0.64 and revenue edged up 3.9% to $29.01B. Wireless revenue increased 7.3% to $19B, boosted by price rises and the launch of the iPhone 5, with the unit adding 1.8M net new subscribers. Verizon said it was on track to meet its goals for 2012.
Verizon moves to de-risk pension plan. Verizon (VZ) is transferring $7.5B of the $30B in obligations held by its management pension plan to Prudential (NYSE:PRU), a move that affects around 41,000 retirees. Verizon's pension plan will buy a group annuity contract from Prudential, which will then make future annuity payments to retirees. Big Red said the move furthers its efforts to de-risk its pension plan.
Nokia rises despite losses. Nokia (NYSE:NOK) swung to an underlying loss of $0.07 per share in Q3 from a profit of $0.03 a year earlier, but that was not as bad as expected, while revenue dropped 19% to €7.23B. Lumia volumes fell ahead of the launch of W8 phones, but Nokia said it's experiencing consumer demand for the devices. The company's also enjoying strong sales of its Asha phones for emerging markets, while overall handset volumes rose on quarter. Shares were +6.1% premarket.
ING close to sale of $2B Hong Kong, Thai insurance ops. ING (NYSE:ING) - continuing to try and shed Asian assets - is nearing the sale of its Hong Kong and Thailand insurance business to Richard Li for $2B, the WSJ reports, with the official announcement maybe coming this week.
Microsoft and Google earnings to show contrasting fortunes. Earnings from Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) today are due to again show how Microsoft continues to tread water while Google remains a growth story. Microsoft's FQ1 EPS is seen falling to $0.56 from $0.68 a year earlier, with revenue dropping 5.5% to $16.42B. In contrast, Google's EPS is expected to increase to $10.65 from $9.72 as revenue surges 58% to $11.87B.
Top Economic & Other News
Eurozone hopes to limit cost of Spanish bailout. Eurozone governments hope the cost of Spain's bailout will be well below €100B, with the ECB to take up most of the slack through bond buying, the WSJ reports. EU leaders are meeting today and tomorrow in Brussels, where Spain, the banking union, Greece and Cyprus could be on the agenda. Greece and the Troika are nearing a deal that will allow the release of more funds.
Turning ECB into banking supervisor "illegal." Plans for a European banking union have been dealt a blow after the EU Council's top legal adviser said turning the ECB into a single eurozone banking supervisor is illegal, the FT reports. The scheme goes "beyond the powers" permitted under law to alter the bank's governance rules and would need treaty changes. The report will give EU leaders much to chew on at their meeting.
Yields fall in Spanish bond auction. The pressure today eased on Spain to request that bailout, as yields fell in an auction of €4.6B ($6.03B) in bonds, which was above the €4.5B upper end of the government's target range. Yields on 10-year debt dropped to 5.46% from 5.67% in a September sale, with four- and three-year rates falling as well. However, bad loans at Spanish banks reached a new record high in August, rising to 10.5% of portfolios from 9.9% in July, with the amount increasing by €5.3B to €178B.
In Asia, Japan +2% to 8983. Hong Kong +0.5% to 21519. China +1.2% to 2132. India +1% to 18792.
In Europe, at midday, London -0.1%. Paris -0.2%. Frankfurt +0.3%.
Futures at 7:00: Dow flat. S&P -0.1%. Nasdaq -0.2%. Crude -0.3% to $91.83. Gold -0.5% to $1744.60.
Today's economic calendar:
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
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