Rio Tinto reported results Wednesday. On Tuesday they announced the sale of their packaging arm to Amcor (AMCRY.PK), raising US$3.2 billion. Rio Tinto, BHP Billiton (BHP) and CVRD, the dominant iron ore producers, are meeting increasing competition from China who recently agreed a price cut deal with alternative ore supplier Fortescue Metals (FSUMF.PK). BHP and CVRD have short bases of 2.5% and 1.2% respectively.

The short interest (as measured by Percent Shares Outstanding On Loan) for Rio Tinto Plc (RTP) is up 105.63% over the past week and now stands at 0.32%. This is up 105.63% from the 52 week low hit on August 12, 2009. Even though the security has seen an increase in short interest of the past week, when compared to other Europe Metals & Mining companies, the short base is well below the average of 2.12% for the sector.

The DESLI Global 50 which tracks the change in short interest for the 50 largest global companies was virtually unchanged Monday. However, the U.K. jumped by nearly 13%, with Europe down 1% and Japan climbing 2%. Please go to our website for more information on the DESLI index.

• CIT posts heavy loss on bad loan reserves. CIT Group (CIT) reported Q2 results, posting its ninth straight quarterly loss as reserves for bad loans more than tripled. The net loss of $1.62B, or $4.30/share, narrowed from a $2.07B loss in Q2 2008, but was worse than the consensus of a $1.53/share loss. Loan loss provisions rose to $588.5M from $152.2M the year before. Net charge-offs rose to 2.81% from 2.41% the previous quarter. Losses pushed the ratio of total capital to risk-weighted assets to 'slightly below' the 13% required by regulators, which CIT said could potentially cause the Federal Reserve or FDIC to take enforcement actions, leading to a "material adverse effect on its business" and possible bankruptcy. (Read CIT's 10-Q quarterly report (.pdf))
• Exxon signs major LNG deal. Exxon Mobil (XOM) reached an agreement to sell liquefied natural gas from its share of the Gorgon LNG project to PetroChina (PTR). The deal is worth around A$50B ($41.3B) and will see PetroChina buy 2.25M tons of LNG annually for 20 years. PTR +6% premarket (7:00 ET).
• Amcor to buy Rio packaging unit. In its largest acquisition ever, Amcor (AMCRY.PK) will buy part of Rio Tinto's (RTP) Alcan packaging unit for $2.03B. The deal will net Amcor the global pharmaceuticals and tobacco packaging as well as the Asian and European food packaging units Rio acquired in its 2007 takeover of Alcan, making Amcor the largest supplier of drug packaging and hopefully ending two years of declining profits. Amcor will finance the offer through a A$1.6B ($1.3B) share sale and bank debt. RTP +3.2% premarket (7:00 ET). (Read Amcor's press release)
• GM's Saab story comes to an end. General Motors reached an agreement to sell its unprofitable Saab unit to Swedish sports car maker Koenigsegg Group. The move was announced early this morning, two months after the companies signed a letter of intent, but several financing hurdles still remain. Notably, the deal depends on the Swedish government providing guarantees for loans from the European Investment bank and Koenigsegg still needs to secure another $300M in financing. For GM, the sale brings it one step closer to completing its global restructuring plan.
• AIG's swaps probed before bailout. Newly released SEC documents show that regulators questioned AIG's (AIG) disclosure on derivatives months before the insurer's federal bailout. In particular, regulators were concerned about "apparent inconsistency" on AIG's statements about credit default swaps that had been sold to European banks.
• 3 charged in massive credit card breach. Three men were indicted for allegedly stealing 130M credit and debit card numbers between 2006 and 2008 in what could be the largest hacking and identity theft case ever brought to court. The data was stolen from credit-card processor Heartland Payment Systems (HPY) and from retail chains 7-Eleven and Hannaford Brothers. (Read the Justice Department's press release)
• Lilly loses patent ruling. A court invalidated Eli Lilly's (LLY) method-of-use patent for its cancer drug Gemzar in response to a lawsuit brought by generic drug maker Sun Pharmaceutical Industries. The patent was set to expire in 2013. Lilly said the decision has no bearing on its compound patent for Gemzar, which is set to expire in 2010. Gemzar had 2008 global sales of $1.7B.
• Ex-Credit Suisse broker guilty of fraud. Eric Butler, a former Credit Suisse (CS) broker, was convicted of securities fraud in connection to the sale of millions of dollars of subprime securities to corporate clients. Butler could face as much as 45 years in prison, though the judge said he's unlikely to impose such a strict term because Butler operated in a "culture of corruption.”
• Schwab sued over ARS. As expected, New York Attorney General Andrew Cuomo filed formal charges against Charles Schwab (SCHW) for falsely representing auction-rate securities as liquid, short-term investments without discussing the risks. Schwab said the lawsuit lacks merit and "casts blame for a bad situation in the wrong direction."
• NY mfg ticks up. The New York Federal Reserve's Empire State Manufacturing Index climbed +13 points to 12.1, its highest level since Nov. 2007, vs. consensus of 5. New orders and shipments also reached their highest levels in several months. Employment remained below zero but showed improvement.
• Treasury international capital. Net foreign purchases of long-term securities were $90.7B in June, with foreigners picking up $123.6B in long-term U.S. securities ($105B by private investors and $18B by official institutions). Although foreign purchases of U.S. Treasurys rose overall, China reduced its stake by 3.1% to $776B in June from $801.5B in May, the biggest percentage drop since October 2000. China sold $51.75B in short-term maturities, but spent some of that rotating into longer-end holdings. U.S. residents bought $32.9B in foreign debt.
• Housing sentiment shows some improvement. The NAHB Housing Market Index rose 1 point to 18, the highest level in homebuilder sentiment since June 2008, and up from a record low of 8 in January. Future expectations improved while current expectations were static. However, it still means that less than one in five builders think it's a good market.

Earnings: Tuesday Before Open

• Cardinal Health (CAH): FQ4 EPS of $0.87 beats by $0.01. Revenue of $25.2B (+10%) vs. $24.3B. Raises guidance for FY '10: sees EPS of $1.90-2.00 vs. $1.91 consensus, up from previous guidance of $1.87-1.91. (PR)
• Home Depot (HD): Q2 EPS of $0.64 beats by $0.05. Revenue of $19.1B (-9%) vs. $19.2B. Shares +3.6% premarket (6:30 ET). (PR)

Earnings: Monday After Close

• Agilent Technologies (A): FQ3 EPS of $0.15 beats by $0.04. Revenue of $1.1B (-27%) vs. $1B. Sees Q4 EPS of $0.20-0.25 vs. $0.20. (PR)
• AirMedia Group (AMCN): Q2 EPS of -$0.08 beats by $0.05. Revenue of $37M (+24%) vs. $36M. Sees Q3 revenue of $37M-40M vs. $44M. (PR)
• CDC (CHINA): Q2 EPS of $0.03 beats by $0.01. Revenue of $82M (-26%) vs. $84M. (PR)
• Dillard's (DDS): Q2 EPS of -$0.36 beats by $0.20. Revenue of $1.4B (-11%) in-line. (PR)
• First Marblehead (FMD): FQ4 EPS of -$0.36 misses by $0.11. Revenue of $11.6M vs. $12.4M. (PR)
• Trina Solar (TSL): Q2 EPS of $0.71 beats by $0.39. Revenue of $150M (-27%) vs. $149M. (PR)

Today's Markets

Asian markets managed to close higher after yesterday's heavy losses. European markets and U.S. futures are also showing gains.

• Swiss prepared to protect UBS data. The Swiss government said it would seize UBS (UBS) data to keep information about 52,000 American account holders out of the hands of the U.S. Justice Department. Claiming that any disclosures would force UBS to violate Swiss law, the Swiss government said it "will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS."
• SEC uncovers new Ponzi scheme. The SEC charged Dallas-based Provident Royalties LLC and its three principals with running a $485M oil-and-gas Ponzi scheme, promising more than 7,700 investors returns of up to 18%. In light of the SEC's lawsuit, a federal judge agreed to freeze Provident's assets and appoint a receiver.
• Rio workers detained in China. Rio Tinto (RTP) said four of its Shanghai-based employees have been detained by Chinese authorities, and at least one is being investigated on suspicions of espionage and stealing state secrets. Rio said it is "not aware of any evidence that would support such an investigation," and found the allegations 'surprising.' The four employees, including the general manager for China operations at Rio Tinto's iron-ore division, have been held since Sunday. Separately, Australian packaging group Amcor (AMCRY.PK) is reportedly nearing an agreement to buy some of Rio's assets in a deal that could be valued at up to $2.4B. RTP -14.3% premarket (7:00 ET).
• NRG snubs Exelon bid. NRG Energy's board unanimously rejected an unsolicited bid from Exelon (EXC), saying the offer is "not in the best interest of NRG stockholders in that it continues to substantially undervalue NRG." Last week, Exelon raised its all-stock offer 12.4%, to $7.73B.
• Boeing buys plant to speed Dreamliner. As rumored last week, Boeing (BA) has agreed to pay $580M for the Vought Aircraft Industries plant that makes sections of the 787 Dreamliner. When Boeing first announced plans for its distributed supply chain, it was praised for moving some of the risk off of its books, but the company now hopes its strategy reversal will give it greater control over the heavily-delayed project. Some analysts are less optimistic; Boeing may be underestimating the time it will take for FAA certification, delaying the plane into 2011.
• SEC eyes Jobs' health disclosures. The SEC is reportedly looking into Apple's (AAPL) disclosures about Steve Jobs' health, trying to determine how Jobs' condition went from 'relatively simple' to 'more complex' in the span of nine days. At question is how much Apple's board knew about Jobs' real condition at the time of his two January announcements, and whether Apple or Jobs misled investors with their disclosures. The SEC and Apple declined to comment.
• Google OS takes aim at MSFT. In a direct challenge to Microsoft (MSFT), Google (GOOG) announced on its blog that it has begun development of an open-source operating system based on Chrome. The software, which will be available in the second half of 2010, will initially target netbooks but the company hopes to scale the software up to regular PCs as well. Meanwhile, Gmail and several other Google products finally dropped their beta label, which could help Google achieve wider corporate adoption.
• AIG loses case with ex-CEO. A jury ruled that AIG's (AIG) case against former CEO Maurice 'Hank' Greenberg was 'weak' and that Greenberg didn't steal billions from a retirement fund. AIG had taken Starr International, a private company run by Greenberg, to court in an attempt to collect $4.3B in damages over millions of shares held and sold by Starr. AIG -4.9% premarket (7:00 ET).
• Antitrust fines for E.ON, GDF Suez. E.ON (EONGY.PK) and GDF Suez were each fined €553M ($768M) for violating EU antitrust rules by colluding on natural gas sales. The gas-transport agreements "deprived customers of more price competition and more choice of supplier in two of the largest gas markets in the EU," said Competition Commissioner Neelie Kroes, so "the commission has no alternative but to impose high fines."
• Tighter rules for U.K. banks. The U.K.'s Darling plans to outline tighter regulation for the British banking industry today, sources said, including a requirement that banks keep instructions on file for how to unwind their own businesses in order to assist regulators in the event of a potential rescue.
• Sony joins netbook crowd. Late to the game, Sony (SNE) said it will enter the netbook market with a new laptop to be launched in August that will sell for around $500. With the exception of Apple (AAPL), nearly every other major PC maker has already rolled out a netbook.
• MBA apps rise. Mortgage applications rose 10.9% last week, MBA reported. The average interest rate on 30-year fixed-rate mortgages was unchanged at 5.34%.
• Retail sales. Chain store sales fell 4.3% in the five weeks of June, Redbook said, worse than the -4.1% expected. According to ICSC, weekly sales were up 0.1% vs. last week.

Earnings: Wednesday Before Open

• Family Dollar Stores (FDO): Q3 EPS of $0.62 beats by $0.03. Revenue of $1.8B (+8.3%) in-line. (PR)
• Pepsi Bottling Group (PBG): Q2 EPS of $0.78 beats by $0.05. Revenue of $3.3B (-7%) vs. $3.4B. (PR)

Earnings: Tuesday After Close

• Ruby Tuesday (RT): FQ4 EPS of $0.28 beats by $0.09. Revenue of $317M (-7%) vs. $304M. Same-store sales decreased 3.2% at company-owned restaurants and 6.9% at franchised stores. Sees FY10 EPS of $0.50-0.65 vs. $0.55. (PR)

Today's Markets

• In Asia, Nikkei -2.35% to 9,421. Hang Seng -0.8% to 17,721. Shanghai -0.3% to 3,081. BSE -2.8% to 13,769.
• In Europe at midday, London -0.05%. Paris -0.6%. Frankfurt -0.2%.
• U.S. futures: Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.7% to $62.47. Gold -0.9% to $920.50.

Wednesday's Economic Calendar

• 7:00 MBA Mortgage Applications
  10:30 EIA Petroleum Status
  12:55 PM Fed's Evans speaks on non-traditional monetary policy
  1:15 PM FDIC's Bair speaks at interagency conference
  3:00 PM Consumer Credit
• Notable earnings before Wednesday's open: FDO, PBG
• Notable earnings after Wednesday's close: AA

Seeking Alpha editor Eli Hoffmann contributed to this post.

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