$2.5 Trillion - That’s the size of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right - $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.

Risk markets continue to trade in the sweet spot on a flock of Fed comments (after someone let the doves out) and a slew of bullish Chinese economic data. Looking across markets, most prices are sitting not too far from where they were this time yesterday. Clearly, investors have seen, on balance, little surprise in the latest data and information flow. This included a wall of Fed speakers, several whom took the time to point out that neither inflation nor unemployment were presently indicating a need for the Fed to exit its ultra-easy policy stance. The Dallas Fed’s Fisher did indicate a worry that the Fed’s policy would stoke a destabilising Dollar Carry Trade. Talk is cheap but Treasury Secretary Geithner did say that he “deeply believes” a strong Dollar is important for the US and he has responsibility to implement policies to shore up confidence.

Some US stocks to watch Wednesday include GE (GE), Caterpillar (CAT), Alcoa (AA), Barrick Gold (ABX) (with the yellow metal trading at $1,117) and Exxon Mobil (XOM), all of whom look likely to benefit from the equity friendly news from China overnight. Other stocks likely to be active include Adobe Systems (ADBE) who are shedding 9% of their workforce, and builder Toll Bros. (TOL) who said that Q4 contracts have risen.

• Northrop unloads TASC. Northrop Grumman (NOC) agreed to sell its TASC consulting unit to a pair of private-equity firms - KKR and General Atlantic - for $1.65B. TASC unit provides engineering and consulting services to the U.S. military and state governments. Northrop said it expects the sale to generate net cash proceeds of $1.1B, which it will use to repurchase shares. The deal is the latest in a recent uptick in LBO acquisitions which have returned after a two-year dry stretch. Still, with four banks - Barclays (BCS), Royal Bank Of Canada (RY), Deutsche Bank (DB) and a lending unit of the CPP - combining to put up senior debt of well under $1B, today's deals are still a far cry from the mega-mergers of the credit boom.
• G-20 keeps drip open. G-20 leaders said it's too early to withdraw global stimulus efforts despite signs that a global economic recovery is underway. "Economic and financial conditions have improved following our coordinated response to the crisis," officials said in a communique (.pdf) following a two-day gathering in St. Andrews. "However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economic and financial system to health, we agree to maintain support for the recovery until it is assured." Stocks, commodities and futures rallied Monday: "Markets don't need to be worried that these governments and central banks are suddenly going to take away all the stimulus measures," one strategist said. "Risk appetite should remain supported into the end of the year."
• Put up or shut up day for Kraft. Kraft (KFT) could raise the cash portion of its bid for Cadbury (CBY) to 400p ahead of today's deadline, and is expected to take the bid directly to Cadbury's shareholders. Kraft has enlisted Royal Bank of Scotland (RBS), Credit Suisse (CS), Barclays (BCS) and BNP Paribas to help provide a £5.5B bridge loan. Kraft's initial bid of 300p and 0.2589 KFT shares per CBY share was valued at 745p/share, but is now worth about 720p with the decline in Kraft's stock. According to U.K. takeover rules, by launching an offer today Kraft would set in motion a 28-day deadline to publish a prospectus on the offer for Cadbury shareholders, and would have 60 days to collect enough shares to clinch a deal.
• Healthcare bill: next stop Senate. The Obama healthcare overhaul passed a House vote by a narrow margin Saturday (220-215), setting up a fractious debate in the Senate - where Democrats don't enjoy the same broad majority - this week. The bill would cost $1.05T over a decade to provide health insurance to another 36M Americans. It requires most Americans to carry insurance, creates a new exchange where they can shop for it, and gives low income earners tax credits to help them pay for it. In an appearance Sunday, Obama said he is "absolutely confident" a healthcare bill will also pass through the Senate.
• Sprint group to pour another $1.5B into Clearwire. Sources say Sprint Nextel (S) and a number of its Clearwire JV (CLWR) partners are preparing to pump another $1.5B or more into the wireless broadband provider. The Sprint group first invested $3.2B in Clearwire 18 months ago, taking a majority stake in a bet on Clearwire's version of 4G wireless broadband, WiMax. Some rivals have favored a comparable technology knows as LTE. $1B of a new infusion would come from Sprint, with Comcast (CMCSA), Intel (INTC), Time Warner Cable (TWC) and Bright House Networks kicking in another $500M. Google, a key JV partner, isn't thought to be involved in this round.
• Comcast, GE agree on CNBU valuation. After weeks of wrangling, GE (GE) and Comcast (CMCSA) reportedly agreed to value NBC Universal at about $30B, and a deal to give Comcast a 51% stake in GE's media and entertainment arm could come as early as this week, though it's still unclear whether 20% NCBU stakeholder Vivendi has signed off on the proposal. Sources say the pair met last week with debt-raters to ascertain the impact of $9B in debt a new NBCU would assume as part of the combination, and hope this week to be told it would be considered investment grade.
• Murdoch paper cleared of spy charges. The U.K. Press Complaints Commission said Monday it has found no proof journalists at Rupert Murdoch's The News of the World regularly hacked the phones of public figures to secure sensational stories. The probe was prompted after reports in The Guardian said the practice at the tabloid was widespread. In response, the Guardian described the PCC's report as complacent, saying the PCC did not have the "ability, the budget or the procedures to conduct its own investigations."
• Axa Asia Pacific shuns $10B bid from parent. Axa Asia Pacific (AXAPY.PK), the Australian unit of France’s biggest insurer (AXA -1.1% premarket), rejected an unsolicited $10B bid from its parent and AMP Ltd. (AMLTF.PK). CEO Rick Allert said Axa Asia Pacific would consider a higher offer, but called today's offer too low. Axa said today it will raise £2B through a rights offer to finance acquisitions.
• Brown backs down on transactions tax. World leaders publicly snubbed U.K. PM Gordon Brown's bold pitch for a global tax on financial transactions which would be used to fund future bailouts. Brown surprised ministers by pitching the initiative during a speech to the G-20 assembly Saturday to the dismay of his peers, who unanimously agreed with U.S. Treasury chief Tim Geithner in saying economic leaders don't think taxpayers should have to pay for future financial sector foibles. Brown backed down Sunday, though he continues to believe tighter bank regulation may not suffice to protect against future risk.
• Reynolds eyes stake in smokeless tomorrow. Cigarette giant Reynolds American (RAI) is in advanced talks to buy closely held Niconovum AB, a Swedish maker of nicotine-replacement therapies such as Zonnic pouch and Zonnic gum. A deal would be the largest move by Reynolds into nicotine products, as sales of cigarettes continue to decline. Reynolds controls about 28% of the U.S. cigarette market, second to Altria (MO) which has about 50%. Sources say the deal could be valued at €30M.

Earnings: Mon. Before Open

• DISH Network (DISH): Q3 EPS of $0.18 misses by $0.26. Revenue of $2.89B (-1.5%) vs. $2.93B. Net customers +241K to 13.85M. (PR)
• Energy Conversion Devices (ENER): FQ1 EPS of -$0.34 misses by $0.03. Revenue of $42.9M (-55.2%) vs. $56.4M. Shares -0.1% premarket. (PR)
• GTx (GTXI): Q3 EPS of -$0.35 in-line. Revenue of $3.6M (+20%) vs. $4M. (PR)
• Hospitality Properites Trust (HPT): Q3 FFO of $0.77 misses by $0.01. Revenue of $264M (-15.4%) vs. $272M. (PR)
• Nationwide Health Properties (NHP): Q3 FFO of $0.56 in-line. Revenue of $97.8M (+3.4%) vs. $94.4M. Sees full-year EPS of $2.22-2.23 vs. $2.28. (PR)
• Quicksilver Resources (KWK): Q3 EPS of $0.25 beats by $0.03. Revenue of $207M (-12.5%) in-line. (PR)
• Rockwell Automation (ROK): FQ4 EPS of $0.37 beats by $0.10. Revenue of $1.07B (-27.6%) in-line. (PR)
• Tesoro (TSO): Q3 EPS of $0.24 beats by $0.23. Revenue of $4.74B in-line. Expects to spend less than its stated capex budget of $600M. Shares +3.7% premarket. (PR)
• Warner Chilcott (WCRX): Q3 EPS of $0041 misses by $0.01. Revenue of $253M (+9%) in-line. (PR)
• Western Refining (WNR): Q3 EPS of -$0.05 beats by $0.01. Revenue of $1.83B (-40.6%) vs. $1.75B. Shares +0.5% premarket. (PR)
• Windstream (WIN): Q3 EPS of $0.24 beats by $0.03. Revenue of $734M (-7.5%) vs. $747M. (PR)

Today's Markets

Overseas markets and commodities surged Monday, and U.S. futures have gained overnight. The dollar is getting pounded in early trading.

By Andrew Willis

One of the great recovery stories of recent years continued to play out yesterday, as Cott Beverages (COT) staged its latest successful financing, and made its balance sheet part of its past.

Given the slew of positive economic data Monday, you might have been forgiven for expecting a decent rebound in risk assets. There was a rebound of sorts in early New York trading, with the Dow up close to 150 points at one stage. But the rally lost momentum and was largely undone. Indeed the Dow traded in the red for a period.

Perhaps in part, this may have been due to comments made by a Fed official Jon Greenlee who told a House of Representatives Oversight and Government Reform subcommittee hearing that “credit losses at banking organisations continued to rise, and banks face risks of sizable additional credit losses given the outlook for production and employment… Poor loan quality, subpar earnings, and uncertainty about future conditions raise questions about capital adequacy for some institutions." More generally, fears about loan quality were corroborated overnight by the news that business bankruptcy filings jumped in October, reversing two months of declining commercial filings. Overall, the price action looked pretty poor to me. I’d have expected a much more positive reaction to the numbers yesterday

Josef Ackermann, chief executive of Deutsche Bank and chairman of the Institute of International Finance (an influential group, reflecting the interests of global finance in Washington) is opposed to breaking up big banks. According to the FT, he said,

• CIT snags $4.5B lifeline. A group of hedge funds including many of its bondholders offered to lend CIT Group (CIT) $4.5B to build creditor support for a controversial debt exchange, pitting them against activist investor Carl Icahn, who wants the swap voted down. The lifeline comes as CIT's lenders must decide by midnight tonight whether to support its proposed debt exchange, a pre-packaged bankruptcy plan, or neither. Sources say the funds bought up CIT debt last summer on a bet the government would bail out the troubled lender, and stand to lose from a freefall bankruptcy, which Icahn is pushing for.
• Mutual funds use Fed bucks to buy bonds. Mutual funds - including those run by T. Rowe Price (TROW) and BlackRock (BLK) - are using Fed financing to reap 15%-plus returns with limited risk. The Fed's TALF (Term Asset-Backed Securities Loan Facility) offers low-cost financing to buy AAA-rated bonds backed by consumer and business loans, as well as commercial mortgages. Investors can borrow up to 95% of the bonds' value by pledging the securities and some additional collateral, and have no obligation to repay the loan beyond the collateral - in essence shifting most of the potential losses to the government. In the words of one fund manager: "This is one of those opportunities that, as an investor, we have to take advantage of."
• IMF boosts Asia growth outlook. The IMF raised its 2009-2010 growth forecast for Asia's economy, but warned that a fragile recovery in advanced economies and lingering problems in the global financial system still pose risks. IMF now sees Asia growth of 2.8% and 5.8% this year and next, up from previous estimates of 1.2% and 4.3% - far higher than the 1.25% growth expected from G-7 economies, but well short of the region's 6.66% average. The report says the region is outpacing other parts of the world, with 'green shoots' of recovery appearing earlier and taking firmer root than elsewhere. (IMF Asia Outlook)
• U.S.-China trade talks open on sour note. China/U.S. trade talks opened on a discordant note Thursday as fresh frictions surfaced after China announced plans to investigate dumping allegations against Detroit's Big Three automakers. Punitive measures are unlikely to cause much harm since most of the vehicles they sell are made in China, but another row - on top of disputes over steel pipes, chicken, movies and music - could further stress their tenuous relationship ahead of Obama's Nov. 15 visit.
• Economists shave GDP estimates after weak orders. Durable goods orders rose 1% in September, short of the 1.5% gain economists expected, but a reverse of August's 2.4% drop. Following the weaker-than-expected gain, Goldman Sachs economist Ed McKelvey dropped his Q3 GDP growth estimate - due out this morning - to 2.7% from a previous 3%. "The headline gain in orders was in line with expectations but not as firm as we had thought," he said. Later, Morgan Stanley and Merrill Lynch followed suit, with Morgan shaving its outlook to 3.8% from 3.9%, and Merrill to 2.3% from 2.5%.
• AIG recoups CDS losses. AIG (AIG) is seeing billions of dollars in inflows from recovering credit-default swaps - the very securities that helped level the insurer. Q2 inflows may have topped $3B, including at least $1B from Goldman Sachs (GS). Credit-default swaps - a type of insurance policy on securities backed by assets such as mortgages - required AIG to put up huge amounts of collateral when the investments they backed fell in value. Many of the sour trades were closed out last year by the government, a move that saved AIG, but may have deprived it of billions of dollars.
• Homebuyer credit extension nears approval. Key senators voiced support for extending and expanding the soon-to-expire homebuyer tax credit, and a vote on the measure could come next week. The current plan would see the $8,000 first-time homebuyer tax credit, set to expire at the end of November, extended through April 2010, and would allow for people who have been in their home for at least five years to receive a $6,500 tax credit if they purchase a new primary residence. The income limit on the credit would also rise to $125,000 from $75,000.
• House panel approves credit rating rules. The House Financial Services Committee signed off (49-14) on legislation aimed at ratings agencies, including barring them from consulting for companies they're also rating, and requiring raters to have outsiders on their boards. The bill also enables investors to sue firms for failing to carry out their duties.
• Fed: To grow or to shrink? A draft bill of new financial-regulation legislation moving through Congress would give the Fed substantial new powers, including the authority to force large firms to shrink if their size threatens the broader economy. The view is likely to conflict with the Senate's, where financial regulation is moving at a much slower pace, and members of both parties remain wary of offering the Fed - seen by many as partially responsible for the collapse - any new authority.
• New home sales flatline. New home sales fell 3.6% in September to an annual rate of 402K, well short of economist consensus of 440K and last month's downward-revised 417K. Months' supply rose to 7.5 from 7.3 in August. Sales were down 7.8% year-over year, and, from the peak of the residential construction boom back in mid-2005, sales are down 71.1%. After adjusting for population growth since the pre-2009 all-time low in 1981, sales are now 15% below previous records. (Census Bureau's New Home Sales (.pdf))
• Norway tightens rates. Norway became the first European country to hike interest rates post-crisis, lifting its key rate by 25 bps to 1.5%. Governor Svein Gjedrem noted inflation is higher than expected, while unemployment was "considerably lower than previously projected," and indicated rates would rise gradually. On Oct. 6, Australia became the first G-20 nation to tighten. (Norges Bank statement)

Earnings: Thur. Before Open

• ABB Ltd. (ABB): Net income of $1.03B (+12%). Sales $7.9B (-10%). Orders $7.06B (-21%). "It remains unclear when and how quickly capital investments by customers will recover from the downturn. In addition, the volatility of raw material prices and the limited availability of project funding continue to influence the timing of many power and industrial investment decision." ABB preannounced on Oct. 19. Shares -2.1% premarket. (PR)
• Aetna (AET): Q3 EPS of $0.69 beats by $0.03. Revenue of $8.72B (+14.4%) in-line. Sees full-year EPS of $2.75 vs. $2.86 consensus. (PR)
• Allegheny Energy (AYE): Q3 EPS of $0.59 beats by $0.06. Revenue of $794M (-6.6%) vs. $952M. (PR)
• Allergan (AGN): Q3 EPS of $0.70 in-line. Revenue of $1.13B (+4.2%) vs. $1.08B. Shares +0.8% premarket. (PR)
• American Electric Power Company (AEP): Q3 EPS of $0.93 beats by $0.08. Revenue of $3.5B (-16.7%) vs. $3.97B. (PR)
• AstraZeneca (AZN): Q3 EPS of $1.46 beats by $0.06. Revenue of $8.2B (+5.5%) vs. $7.9B. Sees full-year core EPS of $6.20-6.40 vs. consensus of $5.99. Shares +0.7% premarket. (PR)
• AutoNation (AN): Q3 EPS of $0.36 beats by $0.01. Revenue of $2.92B (-13.2%) vs. $3.13B. "Cash for Clunkers was a highly effective stimulus program that provided a much needed lift in auto sales and has set the stage going forward for a gradual recovery of new vehicle sales." Says CARS boosted Q3 EPS by $0.07. Approves $250M buyback. (PR)
• Avon (AVP): Q3 EPS of $0.42 beats by $0.02. Revenue of $2.55B (-3.5%) in-line. (PR)
• Barrick Gold (ABX): Q3 EPS of $0.54 beats by $0.07. Revenue of $2.1B (+11.6%) in-line. Significantly reduced gold hedges, and will eliminate within 12 months. (PR)
• BioCryst Pharmaceuticals (BCRX): Q3 EPS of -$0.28 misses by $0.06. Revenue of $10.5M (+18%) vs. $4.6M. BioCryst recently received FDA approval to use its flu I.V. drug peramivir as an emergency treatment against H1N1. (PR)
• Brookfield Properties (BPO): Q3 FFO of $0.34 in-line. Revenue of $657M (-7.1%) vs. $580M. (PR)
• Burger King (BKC): FQ1 EPS of $0.34 misses by $0.03. Revenue of $637M (-5.4%) vs. $653M. Expects the unpredictable consumer environment will persist in fiscal 2010. (PR)
• Brunswick (BC): Q3 EPS of -$1.53 misses by $0.19. Revenue of $666M (-35.9%) vs. $701M. Shares -5.1% premarket. (PR)
• CME Group (CME): Q3 EPS of $3.35 beats by $0.06. Revenue of $650M (-17.4%) in-line. "As the economy continues to stabilize, there is room for further organic growth in our core business. At the same time, we are actively working to ensure that the benefits our business model brings to the financial system are communicated to the legislators and regulators who are charged with regulatory reform." (PR)
• CNOOC (CEO): Q3 revenue of 23.8B yuan ($3.47B, -23.1%) vs. estimate of 21.6B. Avg. selling price -36.6% to $67.83/barrel. Net daily production +18.4% to 647K. Capital expenditure +10.3% to 11.24B yuan. Shares -0.9% premarket. (Bloomberg, PR)
• Colgate-Palmolive (CL): Q3 EPS of $1.12 beats by $0.01. Revenue of $4B (+0.3%) in-line. (PR)
• Corinthian Colleges (COCO): FQ1 EPS of $0.37 beats by $0.09. Revenue of $388M (+34.2%) vs. $378M. Total student population +25% to 93.5K. Sees full-year EPS of $1.55-1.60 vs. $1.35. Shares +5% premarket. (PR)
• Cott (COT): Q3 EPS of $0.18 beats by $0.02. Revenue of $405M (-3.7%) in-line. To sell $200M in senior notes due in 2017, and use proceeds to fund a previously announced tender offer for notes due in 2011. (PR)
• Deutsche Bank (DB): Q3 net profit €1.4B from €414M a year ago. Pre-tax profit of €1.3B from €93M. Net writedowns of €300M. Risk provision of €544M, up from €236M a year ago, but down from €1B in Q2. Return on equity 15% vs. 1% last year. Says it reduced levels of trading risk, "even at the expense of short-term revenue gains." DB released preliminary results last week. Shares -2.6% premarket. (PR)
• Digital Realty Trust (DLR): Q3 FFO of $0.74 beats by $0.02. Revenue of $163M (+14.9%) in-line. Shares (PR)
• Eastman Kodak (EK): Q3 EPS of -$0.23 misses by $0.04. Revenue of $1.78B (-25.9%) vs. $1.89B. Sees revenue decline at high-end of previous 12-18% range. (PR)
• Expedia (EXPE): Q3 EPS of $0.48 beats by $0.05. Revenue of $852M (+2.3%) vs. $829M. "Travelers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply." Shares +6.8% premarket. (PR)
• ExxonMobil (XOM): Q3 EPS of $0.98 misses by $0.05. Revenue of $82.3B (-40.3) vs. $85.2B. Shares -1.5% premarket. (PR)
• France Telecom (FTE): Q3 Ebitda of €4.56B (-8%), in line with consensus. Revenue of €12.69B (-6.4%) vs. €12.85B. Expects Q4 to be similar to Q3, and will thus continue to implement cost savings plans to prevent its Ebitda margin from declining further. Shares -0.5% in Paris. (PR, WSJ)
• GrafTech International (GTI): Q3 EPS of $0.15 beats by $0.09. Revenue of $165M (-47.8%) vs. $162M. (PR)
• Kellogg Company (K): Q3 EPS of $0.94 beats by $0.10. Revenue of $3.28B (-0.3%) in-line. "The current economic environment has placed significant pressure on our consumers." (PR)
• KBR Inc. (KBR): Q3 EPS of $0.45 beats by $0.04. Revenue of $2.84B (-5.9%) in-line. (PR)
• Mack-Cali Realty (CLI): Q3 FFO of $0.81 beats by $0.05. Revenue of $194M (-5.3%) vs. $175M. (PR)
• Monster Worldwide (MWW): Q3 EPS of $0.01 beats by $0.01. Revenue of $215M (-35.2%) vs. $223M. (PR)
• Moody's (MCO): Q3 EPS of $0.43 beats by $0.05. Revenue of $452M (+4.2%) vs. $417M. Declares quarterly dividend of $0.10. (PR I, II)
• Motorola (MOT): Q3 EPS of $0.01 beats by $0.01. Revenue of $5.45B vs. $5.54B. Appoints Edward Fitzpatrick as CFO. Sees Q4 continuing operations EPS of $0.07-0.09 vs. $0.06. Shares +4.3% premarket. (PR)
• MPS Group (MPS): Q3 EPS of $0.06 beats by $0.04. Revenue of $408B (-29.4%) vs. $403B. MPS is being acquired by Adecco. (PR)
• Mylan Laboratories (MYL): Q3 EPS of $0.32 beats by $0.05. Revenue of $1.26B (-23.7%) in-line. Sees 2010 EPS of $1.24-1.28 vs. $1.17. (PR)
• Newmont Mining (NEM): Q3 EPS of $0.79 beats by $0.24. Revenue of $2.05B (+49.5%) vs. $1.72B. (PR)
• Nintendo (NTDOY.PK): H1 net profit of ¥69.5B ($768M, -52%). Sales of ¥548B (-34.5%). Cuts H1 dividend by 37% to ¥270. Sold 5.75M Wii consoles (-43%) and 11.7M DS hand-held player sales (vs. 13.7M last year). Sees full-year net income of ¥230B vs. ¥270B consensus, full operating profit of ¥370B (-33%), sales of ¥1.5T (-18%), and Wii sales of 20M (vs. previous 26M). (PR I, II, III, Bloomberg)
• Noble Energy (NBL): Q3 EPS of $1.10 beats by $0.28. Revenue of $621M (-43.4%) vs. $657M. (PR)
• NRG Energy (NRG): Q3 EPS of $1.02 misses by $0.12. Revenue of $2.92B vs. $2.18B. (PR)
• Office Depot (ODP): Q3 EPS of -$0.08 beats by $0.02. Revenue of $3.03B (-17.2%) in-line. (PR)
• OfficeMax (OMX): Q3 EPS of $0.08 misses by $0.06. Revenue of $1.83B (-12.6%) in-line. Same-store sales -11.5%. Continues to anticipate macro employment trends will not turn positive until well into 2010. (PR)
• Patterson-UTI Energy (PTEN): Q3 EPS of -$0.12 beats by $0.04. Revenue of $176M (-71%) vs. $163M. (PR)
• PG&E (PCG): Q3 EPS of $0.93 beats by $0.02. Revenue of $3.23B (+12.3%) vs. $3.48B. (PR)
• PPL Corp. (PPL): Q3 EPS of $0.52 beats by $0.07. Revenue of $1.8B vs. $3B. (PR)
• Procter & Gamble (PG): FQ1 EPS of $1.06 beats by $0.07. Revenue of $19.8B (-6%) in-line. (PR)
• Shell (RDS.A): Adjusted net income of $2.62B vs. consensus of $2.5B. Revenue of $75B, down from $131.6B a year ago. "Q3 results were affected by the weak global economy. Upstream and downstream profitability has been sharply reduced compared to year-ago levels. We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery." Shares -3.5% in London. (PR)
• Smith International (SII): Q3 EPS of $0.07 misses by $0.08. Revenue of $1.88B (-34.1%) in-line. (PR)
• Sprint Nextel (S): Q3 EPS of -$0.17 misses by $0.02. Revenue of $8.04B (-8.8%) in-line. Net subscribers -135K. Post-paid churn 2.17% vs. 2.05% in Q2, due to seasonality and heightened competition. Pre-paid churn 6.65% vs. 6.38% in Q2. (PR)
• Taiwan Semi (TSM): Q3 EPS of $0.18 in-line. Revenue of $2.74B (-8.1%) in-line. Gross margin +1.5 points from Q2 to 47.7%. Sees Q4 revenue of NT$90-92B vs. consensus of NT$85.8B. (PR)
• Ventas (VTR): Q3 EPS of $0.66 beats by $0.03. Revenue of $236M (+0.3%) vs. $230M. (PR)
• Virgin Media (VMED): Q3 operating cash flow of £348M (+7%) vs. consensus of £337M. Ebitda of £348M. Revenue of £953M (+1.3%) vs. £942M. Net additions of 8,100 vs. 8,000. (PR)
• Williams Companies (WMB): Q3 EPS of $0.24 beats by $0.05. Shares +2.2% premarket. (PR)
• Xcel Energy (XEL): Q3 EPS of $0.48 misses by $0.02. Revenue of $2.31B (-18.8%) vs. $3.01B. (PR)

Earnings: Wed. After Close

• AFLAC (AFL): Q3 EPS of $1.25 beats by $0.05. Revenue of $4.5B (+23%) vs. $4.7B. Shares -0.2% AH. (PR)
• Agnico-Eagle Mines (AEM): Q3 EPS of -$0.11 vs. estimate of $0.20; results include foreign exchange loss and other items accounting for cost of $0.14/share. Revenue of $159M (+91%) vs. $183M. Shares -8.3% AH. (PR)
• Akamai Technologies (AKAM): Q3 EPS of $0.38 beats by $0.03. Revenue of $207M (+5%) vs. $199M. Shares +9.6% AH. (PR)
• Annaly Mortgage Management (NLY): Q3 EPS of $0.75 beats by $0.03. Net interest income of $436M (+24%). Shares +2.3% AH. (PR)
• AvalonBay Communities (AVB): Q3 FFO of $1.09 beats by $0.01. Revenue of $224M (+0.3%). Sees Q4 FFO of $0.61-0.64 vs. $0.97 and full-year FFO of $3.86-3.90 vs. $4.19. (PR)
• Brandywine Realty Trust (BDN): Q3 FFO of $0.44 beats by $0.08. Revenue of $147M (+2%) vs. $141M. Raises full-year FFO guidance to $1.82-1.85 from $1.75-1.80, vs. $1.78. Sees fiscal 2010 FFO of $1.23-1.34 vs. $1.38. Shares -1.9% AH. (PR)
• Cadence (CDNS): Q3 EPS of $0.03 beats by $0.04. Revenue of $216M (-7%) vs. $215M. Sees Q4 EPS of $0.02-0.04 vs. $0.01, and full-year EPS of -$0.08 to -$0.10 vs. -$0.14. (PR)
• Cerner (CERN): Q3 EPS of $0.61 in-line. Revenue of $409M (-3%) vs. $421M. Sees Q4 EPS of $0.68-0.74 vs. $0.74. Shares -1.9% AH. (PR)
• CB Richard Ellis Group (CBG): Q3 EPS of $0.08 misses by $0.02. Revenue of $1B (-23%) in-line. Shares -4% AH. (PR)
• Duke Realty (DRE): Q3 FFO of $0.32 beats by $0.01. Revenue of $224M (+4.1%) vs. $219M. (PR)
• Equity Residential (EQR): Q3 FFO of $0.53 beats by $0.01. Revenue of $493M (-4%) vs. $487M. Sees Q4 FFO of $0.49-0.53 vs. $0.49. (PR)
• Express Scripts (ESRX): Q3 EPS ex-items of $0.99 beats by $0.19. Revenue of $5.6B (+3%) vs. $5.5B. Sees full-year EPS of $3.76-3.82 vs. $3.49. Shares +0.8% AH. (PR)
• First Solar (FSLR): Q3 EPS of $1.79 beats by $0.05. Revenue of $481M (+38%) vs. $529M. Shares -15.9% AH. (PR)
• Genco Shipping & Trading (GNK): Q3 EPS of $1.09 beats by $0.08. Revenue of $93M (-14%) vs. $91M. Shares -2.9% AH. (PR)
• Helix Energy Solutions Group (HLX): Q3 EPS of $0.04 misses by $0.01. Revenue of $216M (-65%) vs. $249M. Shares -0.3% AH. (PR)
• LSI Logic (LSI): Q3 EPS of $0.18 beats by $0.14. Revenue of $578M (-19%) vs. $556M. Sees Q4 EPS of $0.07-0.13 vs. $0.06 and Q4 revenue of $605M-645M vs. $587M. Shares +7% AH. (PR)
• Lincoln National (LNC): Q3 EPS of $0.84 beats by $0.08. Revenue of $2.1B (-8%) vs. $2.4B. Shares +9.2% AH. (PR)
• O'Reilly Automotive (ORLY): Q3 EPS of $0.63 beats by $0.07. Revenue of $1.26B (+13%) vs. $1.23B. Comparable store sales up 5.3%; "Continued improvement in our gross margin results fueled by improved acquisition costs as the result of our increased purchasing power." Shares -0.2% AH. (PR)
• Owens-Illinois (OI): Q3 EPS of $0.74 misses by $0.19. Revenue of $1.9B (-7%) in-line. Shares -6% AH. (PR)
• Questar (STR): Q3 EPS of $0.60 beats by $0.09. Revenue of $600M (-21%) vs. $542M. Raises full-year EPS guidance to $2.45-2.55 from $2.35-2.45, vs. $2.57. (PR)
• Realty Income (O): Q3 FFO of $0.47 beats by $0.01. Revenue of $82M (flat) in-line. Sees full-year FFO of $1.86-1.92 vs. $1.83. Shares +2.3% AH. (PR)
• Ryland Group (RYL): Q3 EPS of -$1.20 misses by $0.31. Revenue of $328M (-40%) vs. $352M. Shares -0.5% AH. (PR)
• Symantec (SYMC): FQ2 EPS of $0.36 beats by $0.03. Revenue of $1.48B (-3%) vs. $1.43B. Shares +6.1% AH. (PR)
• Teck Resources (TCK): Q3 EPS of $0.59 beats by $0.09. Revenue of $2.1B in-line. Sees 2009 coal sales of 19.5-20.5M tons, slightly higher than previous guidance. Shares +4.1% AH. (PR)
• Teradyne (TER): Q3 EPS of $0.14 beats by $0.03. Revenue of $262M (-12%) vs. $256M. Sees Q4 EPS of $0.12-0.17 vs. $0.12 on Q4 revenue of $255M-270M vs. $252M. Shares +2.2% AH. (PR)
• Trinity Industries (TRN): Q3 EPS of $0.29 beats by $0.04. Revenue of $557M (-52%) vs. $564M. Sees Q4 EPS of $0.08-0.13 vs. $0.06. Shares -1.3% AH. (PR)
• XL Capital (XL): Q3 EPS of $0.89 beats by $0.26. Revenue of $1.5B (-15%) vs. $1.7B. Shares +5.2% AH. (PR)

Today's Markets

Asia markets moved sharply lower Thursday, but losses in Europe were mild and U.S. futures have moved higher overnight following Wednesday's losses.

• ING drops on spin-off, rights issue. Dutch financial services company ING Group (ING) said Monday it will raise up to €7.5B ($11.3B) in a share issue, and split up its insurance and banking businesses, after reaching a deal to repay the government half of its €10B bailout loan ahead of schedule. ING has until the end of January to repurchase government-owned shares, and will launch the share issue on Nov. 25. "We appreciate the ongoing support of the Dutch state," CEO Jan Hommen said, "but fully recognize that it is in the best interest of all parties that we get back on our own feet as quickly as possible." Shares -8.1% premarket.
• Peltz takes a foothold in Legg Mason. Legg Mason (LM) will name activist investor Nelson Peltz to its board after he quietly accumulated a 4.3% stake; in exchange for the board seat, Peltz's Trian will agree to accumulate no more than 9.9% of the company over the next two years, and will vote its share in favor of the company's slate of nominees during that period. "We welcome Nelson," Legg CEO Mark Fetting said in a statement. "We look forward to benefiting from his insights and experience as we work together to build greater value for our clients and our shareholders." Peltz prefers to think of himself as a 'constructivist investor,' though he is known to pepper management with 'idea' phone calls and emails at late hours and on weekends.
• BofA's TARP exit hits snag. Sources say Bank of America's (BAC) plans to repay its TARP loans have fallen into question due to a dispute over how much more capital it needs to raise in order to exit government oversight. Having raised $40B in new equity since May, BofA thinks it's ready to return the government's $45B investment. But some officials say it should be required to raise more than the $40B determined by government stress tests, to give it the ability to deal with any potential economic relapses. Until it exits government assistance, BofA remains bound by pay czar Kenneth Feinberg's compensation limitations, which bank executives fear will hamper its abilities to recruit talent.
• NABE survey offers cheery outlook. U.S. companies expect to hire and invest more over the next six months, according to a survey released this morning by the National Association for Business Economics, and for the first time in a year more businesses reported a rise in capital spending over the previous quarter than a decline. All 78 panelists said business decisions are being made with expectations of positive GDP growth in 2010; of those, 73% see real GDP expanding 1-3%. The survey "provides new evidence that the U.S. recovery is underway," Chicago Fed's William Strauss said. "Improving credit conditions might be part of the explanation, with respondents indicating that credit remains tight but less so than earlier in the year."
• Capmark goes under. Not unexpectedly, troubled commercial real estate lender Capmark filed for bankruptcy protection on Sunday, wiping out the private-equity investments of KKR, Goldman Sachs (GS) and Five Mile Capital, which bought 75.4% of Capmark for $1.5B in cash and more than $7B in debt in 2006; GMAC owns the remainder. Capmark is negotiating the terms of the bankruptcy with its creditors, including Citigroup (C) and JPMorgan (JPM), but they have not yet reached an agreement over a prepackaged bankruptcy. U.S. banks hold more than $1T worth of mortgages backed by commercial property, on which analysts predict they could suffer losses in the neighborhood of $150B. Bad commercial property debts have played a pivotal role in the demise of many of the 106 banks that have failed so far this year.
• FDA OKs BioCryst's swine flu drug. The FDA approved emergency use of BioCryst Pharmaceuticals' (BCRX) experimental intravenous antiviral drug peramivir to treat severe cases of H1N1. "Based upon the totality of scientific evidence available, it is reasonable to believe that peramivir IV may be effective in certain patients," it said in a letter. The authorization is only for hospitalized patients who are not responding to either oral or inhaled antiviral treatments, or for whom nonintravenous drug delivery is not feasible.
• China: undertones of an exit. China's economic growth is likely to speed up this quarter, but the government will stay the course with its loose fiscal policy, senior officials said today. Still, analysts say the "unmistakable shift" in official statements signal Beijing is starting to think about how to unwind its pro-growth policies. China set itself a goal of 8% GDP growth this year, which officials say it's on track to fulfill.
• Lloyds eyes outsourcer CPA Global. Lloyds' (LYG) private-equity arm LDC is reportedly in talks to acquire legal outsourcing company CPA Global for £400M ($652M). Lloyds is stepping up its buyout activity, aiming to become a dominant player in Britain's dwindling private-equity deal market.
• Blackstone hopes for magic from Merlin. Looking to take advantage of buoyant equity markets, Blackstone (BX) is reportedly preparing to float its theme park operator Merlin Entertainments next year. Citigroup (C), Goldman Sachs (GS), Deutsche Bank (DB), UBS (UBS) and Nomura (NMR) are advising on what could be a $3.3B IPO. Merlin - which owns the London Eye, Madame Tussauds and the Sea Life centers - is the world's number-two park operator, after Disney (DIS).
• Madoff crony found dead. Jeffrey Picower, alleged to have extracted $7.2B from Madoff's Ponzi scheme, was found dead at the bottom of his Palm Beach pool Sunday. Madoff trustee Irving Picard alleges Picower and a group of longtime Madoff investors knew or should have known of the fraud, because they requested and received oversized returns of up to 950% on their investments.

Earnings: Mon. Before Open

• Alberto-Culver (ACV): FQ4 EPS of $0.33 beats by $0.01. Revenue of $358M (-7.2%) vs. $387M. (PR)
• Corning (GLW): Q3 EPS of $0.42 beats by $0.03. Revenue of $1.48B (-4.9%) vs. $1.42B. (PR)
• Lorillard (LO): Q3 EPS of $1.44 misses by $0.08. Revenue of $1.42B (+26.1%) vs. $1.32B. (PR)
• McGraw-Hill Companies (MHP): Q3 EPS of $1.07 beats by $0.02. Revenue of $1.88B (-8.4%) vs. $1.94B. Avg. daily volume for major exchange-traded derivatives fell 23.2% from a year ago. (PR)
• National-Oilwell Varco (NOV): Q3 EPS of $0.95 beats by $0.16. Revenue of $3.09B (-14.5%) vs. $2.9B. "While difficult credit market conditions have led to order rates below our expectations so far this year, we continue to pursue new rig opportunities aggressively, and seek and execute strategic internal growth and acquisition opportunities." (PR)
• RadioShack (RSH): Q3 EPS of $0.30 misses by $0.01. Revenue of $990M (-3.1%) vs. $961M. (PR)
• Tellabs (TLAB): Q3 EPS of $0.07 beats by $0.01. Revenue of $389M (-8.3%) vs. $394M. Shares +2.1% premarket. (PR)
• Verizon (VZ): Q3 EPS of $0.60 beats by $0.01. Revenue of $27.27B (+10.2%) in-line. Shares +2.4% premarket. (PR)
• Weingarten Realty Investors (WRI): Q3 FFO of $0.50 misses by $0.04. Revenue of $145M (-6.2%) vs. $143M. Sees full-year FFO of $2.08-2.16 vs. $2.26 consensus. Overall occupancy increased to 91.1% from 90.9% in Q2. "Conditions across most of the existing portfolio appear to be stabilizing as retailers are learning to adapt to current market conditions by managing inventories." (PR)

Today's Markets

Overseas markets were mostly higher Monday.

Data dumped a few inches of reality rain on the earnings plastic surgery laden beauty parade Tuesday. Further positive “earnings” results failed to sustain a move higher in risky assets (equities). We seem to have reached a point where traders have become so saturated with high expectations (which are miles north of what the laggard “analysts” had projected) that even “good” numbers are greeted with a poor reaction.

Thus far Wednesday, on a hump day, the earnings reports have been a far more mixed bag with the biggest drag being Boeing (BA), after reporting chunky charges of $3.5 billion due to delays in the unfortunately named 787 Dreamliner and 747-8 jumbo jets, while Eli Lilly (LLY) beat estimates. The big banks again have profited courtesy of the taxpayer giving them free money to play with as Wells Fargo (WFC) and Morgan Stanley (MS) (despite a 94% drop in profits) both beating analysts dumb and dumber’s (guess)timates. They’d have been closer using a dart board.

The last Beige Book report was on September 9th.

At the time the Dow was looking toppy at 9,650 and we had poor consumer confidence numbers (just like yesterday) and poor consumer credit numbers (no change) and the book had very little "good" news to report (see my analysis) - yet the market broke over 9,600 again that day and then took off all the way to 9,900 a week later. At the time, we were looking for any excuse to go higher on the hopes that this earnings period will look like last one, but have we now come too far, too fast?

• King: Break up the banks! Bank of England Governor Mervyn King stepped up his call to break apart Britain's largest banks, saying more stringent capital requirements won't shield taxpayers from having to bail out more too-big-to-fail banks in the future. "The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history," King said in a speech (.pdf) late Tuesday. His comments were at odds with those of Chancellor of the Exchequer Alistair Darling, who said yesterday focusing on capital rules may be enough to ward off future crises. Meanwhile, on this side of the Atlantic, Paul Volcker keeps pounding the desk to split up banks, but no one's listening.
• State Street slapped with fraud suit. The California AG's office charged State Street (STT) with fraud Tuesday, accusing it of bilking the state's two largest pension funds - Calpers and Calstrs - of $57M, and seeking $200M in overcharges and penalties (complaint (.pdf)). The lawsuit stems from an inquiry launched after a whistleblower claimed State Street secretly and substantially marked up the price of its currency trades. State Street beat Q3 earnings estimates Tuesday, but shares dived 8.4% on news of the lawsuit and a sobering outlook.
• Yahoo defies bears. Shares of Yahoo (YHOO) are up 4.6% premarket after the internet giant beat Q3 earnings estimates handily with the help of some serious cost cutting ($0.13/share vs. $0.06), while revenue was steady from last quarter at $1.13B. "There's a change occurring in Yahoo," CFO Tim Morse said on Yahoo's earnings call (transcript), "that will value that kind of work - that good old-fashioned, get-your-hands-dirty kind of find ways to take costs down or make sure that they don't go up as much as they otherwise would have - type work." Analysts were impressed with the quarter, but said the real test of Yahoo's massive branding initiative would come in Q4. Bernstein's Jeffrey Lindsay summed it up: "The patient is off life support and back in the recovery ward. But it is certainly not out playing soccer again."
• Shedding light on the dark pools. In an effort to bring transparency to famously opaque "dark pool" off-exchange trading cliques on which Wall Street firms execute some of their largest trades, the SEC will reportedly today propose slashing the percent of daily volume in a company's shares that can be executed on the systems before quotes must be publicized to 0.25% from 5%. The move would force dark pools to either bring their prices in line with open markets, or risk losing their order flow. Trading executives warn sweeping rule changes could ultimately hurt the investors regulators are trying to empower.
• AT&T sues LCD makers over price fixing. AT&T (T) sued Samsung Electronics, LG Display (LPL), AU Optronics (AUO) Corp. and other LCD manufacturers, claiming they colluded to fix prices of panels sold in the U.S. "The conspiracy included communications and meetings in which defendants agreed to eliminate competition and fix the prices of LCD panels that were ultimately incorporated into LCD products that they knew would be sold in California and the U.S.," according to the complaint.
• Logi offer: does it make sense? An obscure hedge fund - logi Energy - said it offered to buy $1B of CIT Group's (CIT) debt, but wouldn't identify its source of capital. Logi said the deal could give CIT "wiggle room" as it works to sidestep bankruptcy. CIT wouldn't comment on whether it was seriously considering the offer.
• Volvo sale hits snag. Sources say China carmaker Geely's $2B attempt to buy Ford's (F) Volvo unit is in danger of stalling over disagreements about intellectual property rights. The impasse centers on Ford's concerns about sharing its proprietary technology and plans for new products.
• Morgan mulls giving away Crescent. Sources say Morgan Stanley (MS) may hand over its Crescent Real Estate Equities unit to Barclays (BCS), to whom the business owes $2B which comes due Nov. 2. Morgan bought Crescent for $6.5B in August 2007, and had planned to put its assets into real estate investment funds, but was left holding the bag when markets seized up.
• IRS watchdog says homebuyer plan fraught with fraud. The IRS's internal watchdog will warn the agency again about fraud in the multibillion dollar homebuyer tax credit program. The IRS faces significant challenges in preventing individuals from scamming the tax credit program.
• JPMorgan, Goldman cornering the M&A market. According to a study by Bloomberg News, JPMorgan (JPM) edged out Goldman Sachs (GS) in M&A advisory fees ($1.26B vs. $1.22B) for the first time since 2000. By deepening relationships with corporate clients, the two have created a deep moat around M&A counselling. "It's going to be very difficult for upstart or broad-based firms to come in and usurp what many believe are the insurmountable leads that Goldman and JPMorgan have over competitors," one analyst says.
• Business spending perks up. Industrial bellwether Caterpillar (CAT) joined the ranks of those who say the worst is behind us, as corporate buyers slowly begin reinvesting in their businesses. While Caterpillar's sales were 44% lower than a year ago, CFO David Burritt said he sees "encouraging signs that indicate a recovery may be under way," and predicted sales could rise 10-25% next year (read Caterpillar's Q3 earnings call transcript). Business spending accounts for about 9.5% of U.S. GDP - a fraction of the 68.2% accounted for by consumer spending - but still a potential catalyst for recovery.
• Get ready for pay as you play internet. Internet service providers including AT&T (T) and Time Warner Cable (TWC) are considering returning to usage-based pricing for internet, amid a surge in traffic as more people watch videos online, and after a push by the FCC to force ISPs to treat all web traffic equally. "Some type of usage-based model, for those customers who have abnormally high usage patterns, seems inevitable," an AT&T spokesman said, declining to provide details on the company's exact plans.

Earnings: Wed. Before Open

• Air Products and Chemicals (APD): FQ4 EPS of $1.14 beats by $0.02. Revenue of $2.13B (-21.6%) in-line. (PR)
• AirTran (AAI): Q3 EPS of $0.08 in-line. Revenue of $597M (-11.3%) vs. $600M. Shares -0.9% premarket. (PR)
• Allegheny Technologies (ATI): Q3 EPS of $0.01 misses by $0.02. Revenue of $698M (-49.9%) vs. $738M. Says the worst appears to be behind us, but many customers remain cautious due to the uncertain global economy and are keeping inventories low. Shares -8.8% premarket. (PR)
• Altria (MO): Q3 EPS of $0.48 beats by $0.01. Revenue of $4.32B (+0%) vs. $4.66B. Shares -1.4% premarket. (PR)
• Boeing (BA): Q3 EPS of -$2.23 misses by $0.11. Revenue of $16.69B (+9.1%) vs. $17.16B. Sees full-year EPS of $1.35-1.55 vs. $1.54 consensus. "The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business, We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs." Shares -2.5% premarket. (PR)
• Deutsche Bank (DB): Q3 net income of €1.4B vs. consensus of €811M and last year's €435M. Pretax profit of €1.3B vs. consensus of €1.19B. Tier 1 capital ratio rose to 11.7% from 11% in Q2. Shares -2.3% premarket. (Bloomberg)
• Continental (CAL): Q3 EPS of $0.02 beats by $0.08. Revenue of $3.32B (-20.2%) in-line. (PR)
• Elan (ELN): Q3 EPS of -$0.06 beats by $0.07. Revenue of $399M (-19.5%) vs. $382M. (PR)
• Eli Lilly (LLY): Q3 EPS of $1.20 beats by $0.18. Revenue of $5.56B (+6.8%) vs. $5.41B. Gross margin as a percent of total revenue increased by 3.7% to 81.1%. Shares +0.4% premarket. (PR)
• FLIR Systems (FLIR): Q3 EPS of $0.38 beats by $0.03. Revenue of $286M (+3.2%) vs. $281M. Shares +2.9% premarket. (PR)
• Freeport-McMoRan Copper & Gold(FCX): Q3 EPS of $2.07 beats by $0.73. Revenue of $4.14B (-10.2%) vs. $4.24B. Reinstates dividend due to strong performance. Shares -0.1% premarket. (PR)
• KeyCorp (KEY): Q3 EPS of -$0.50 misses by $0.09. Takes a $733M provision for loan losses, which KEY says drove the miss. Average deposits were +6% (+$3.6B). Shares -4.7% premarket. (PR)
• Knight Capital Group (NITE): Q3 EPS of $0.32 misses by $0.07. Revenue of $300M (+24.5%) vs. $282M. Shares -6.4% premarket. (PR)
• Manpower (MAN): Q3 EPS of $0.26 beats by $0.09. Revenue of $4.19B (-26%) vs. $3.95B. Sees Q4 EPS of $0.17-0.27 vs. $0.28. "We continued to experience sluggish demand for our services as the labor markets throughout the world were hampered by lack of demand for companies' products and services... the uptick in revenue is muted at this time compared to previous recoveries." Shares -5.3% premarket. (PR)
• Morgan Stanley (MS): Q3 EPS of $0.38 beats by $0.11. Revenue of $8.7B vs. $6.99B. Assets under management $386B vs. $483B last year. Declares $0.05 quarterly dividend. Shares +0.9% premarket. (PR)
• Northern Trust (NTRS): Q3 EPS of $0.72 misses by $0.12. Revenue of $928M (-1.2%) vs. $985M. Shares -5% premarket. (PR)
• Northrop Grumman (NOC): Q3 EPS of $1.29 beats by $0.11. Revenue of $8.73B (+4.1%) vs. $8.58B. (PR)
• Omnicom Group (OMC): Q3 EPS of $0.53 in-line. Revenue of $2.83B (-14.4%) in-line. (PR)
• Penn National Gaming (PENN): Q3 EPS of $0.33 misses by $0.02. Revenue of $620M (+0.4%) vs. $642M. Shares -8.2% premarket. (PR)
• St. Jude Medical (STJ): Q3 EPS of $0.59 beats by $0.01. Revenue of $1.16B (+7%) in-line. Sees Q$ EPS of $0.61-0.63 vs. $0.66. "We are lowering our expectations for our fourth quarter results to accommodate the issues we are experiencing from a limited portion of our customer base in the U.S., but we are confident that our long term growth program is on track." Shares -0.9% premarket. (PR)
• U.S. Bancorp (USB): Q3 EPS of $0.30 beats by $0.03. Revenue of $4.25B (+2.2%) vs. $4.12B. Says credit deterioration moderated somewhat. Shares +0.8% premarket. (PR)
• Wells Fargo (WFC): Q3 EPS of $0.56 beats by $0.19. Revenue of $22.47B (+116.5%) vs. $21.63B. Q3 chargeoffs of $5.1B, up from $4.4B in Q2. Sees credit losses peaking in 2010, "with consumer losses potentially peaking in first half of the year and gradually declining, absent further economic deterioration." Shares -1% premarket. (PR)

Earnings: Tue. After Close

• Amylin Pharmaceuticals (AMLN): Q3 EPS of -$0.19 beats by $0.10. Revenue of $211M (-3%) vs. $219M. Shares -1.1% AH. (PR)
• Canadian National Railway Company (CNI): Q3 EPS of C$0.94. Revenue of C$1.85B (-18%) in-line. Shares -1.6% AH. (PR)
• C.H. Robinson Worldwide (CHRW): Q3 EPS of $0.57 beats by $0.01. Revenue of $1.95B (-16%) vs. $1.96B. Shares -0.8% AH. (PR)
• Cree (CREE): FQ1 EPS of $0.30 beats by $0.08. Revenue of $169M (+20%) vs. $165M. Sees Q2 EPS of $0.28-0.30 vs. $0.23 and revenue of $180M-190M vs. $173M. Shares +3.6% AH. (PR)
• Gilead Sciences (GILD): Q3 EPS of $0.78 beats by $0.11. Revenue of $1.8B (+31%) vs. $1.75B. Shares -2.2% AH. (PR)
• Infinera (INFN): Q3 EPS of -$0.03 beats by $0.09. Revenue of $83M (+3%) vs. $80M. Shares +2.5% AH. (PR)
• Intuitive Surgical (ISRG): Q3 EPS of $1.64 beats by $0.16. Revenue of $280M (+19%) vs. $258M. Shares -5.9% AH. (PR)
• Nabors Industries (NBR): Q3 EPS of $0.18 beats by $0.02. Revenue of $804M (-44%) vs. $820M. Shares flat AH. (PR)
• Polycom (PLCM): Q3 EPS of $0.31 misses by $0.01. Revenue of $243M (-16%) vs. $236M. Shares -5.2% AH. (PR)
• SanDisk (SNDK): Q3 EPS of $0.75 beats by $0.49. Revenue of $935M (+14%) vs. $788M. Shares +0.2% AH and halted. Updated 4:30 p.m.: Shares resume trading, +10.2% AH. (PR)
• Seagate Technology (STX): FQ1 EPS of $0.58 beats by $0.11. Revenue of $2.66B (-12%) vs. $2.62B. Shares -2.9% AH. (PR)
• SLM Corp. (SLM): Q3 EPS of $0.26 beats by $0.22. Net interest income after provision for loan losses of $204M (-29%). Shares +7.8% AH. (PR)
• STMicroelectronics (STM): Q3 EPS of -$0.23 misses by $0.14. Revenue of $2.28B (-16%) vs. $2.25B. Shares +3.7% AH. (PR)
• Stryker (SYK): Q3 EPS of $0.69 in-line. Revenue of $1.65B (+1%) vs. $1.62B. Shares +3.5% AH. (PR)
• Tupperware (TUP): Q3 EPS of $0.54 beats by $0.12. Revenue of $514M (flat) vs. $486M. Raises full-year EPS guidance to $2.84-2.89 from $2.59-2.64, vs. $2.73. Shares +4.5% AH. (PR)
• Walter Industries (WLT): Q3 EPS of $0.45 beats by $0.18. Revenue of $278M (-10%) vs. $223M. Shares +1.7% AH. (PR)

Today's Markets

Overseas markets sustained losses Wednesday. U.S. futures moved lower overnight.

DXO was truly a victim of its own success. This leveraged exchange-traded note became so large that it was subject to limitations placed on its underlying components. Deutsche Bank considered the crackdown a “regulatory event” and redeemed the $407 million in outstanding notes on September 9. Its opposite, the PowerShares DB Crude Oil Double Short ETN (DTO), continues to trade.

• NYSE up 24.86 (0.4%) to 7,015.53.
• DJIA up 78.07 (0.8%) to 9,865.
• S&P 500 up 6.01 (0.6%) to 1,071.
• Nasdaq up 15.35 (0.7%) to 2,139.

GLOBAL SENTIMENT

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The cost of insuring against the default of major financial institutions has reached its lowest level since June 2008, according to the Counterparty Risk Index from Credit Derivatives Research LLC.