• Yang leaves Yahoo. Jerry Yang, Yahoo's (YHOO) beleaguered chief executive, will step down from his role as CEO as soon as the board can find a replacement. He will return to his previous role as Chief Yahoo where he will focus on strategy and technology. Yang was widely blamed by investors when a Microsoft (MSFT) bid fell through. Under his leadership, Yahoo also saw a search partnership with Google (GOOG) collapse, while months-long talks with Time Warner (TWX) failed to produce a deal on AOL. Investors now believe an acquisition by Microsoft is more likely than ever. Shares rose 4.4% in after hours trading on news of Yang's departure.
• Colossal cuts at Citi. Citigroup (C) will significantly reduce its workforce, with plans to eliminate 52,000 jobs over the next year. The reductions include 9,100 jobs the bank began cutting last month, 16,900 new job cuts announced yesterday, and 26,000 positions Citi plans to shed through asset sales. In total, the cuts represent 15% of Citi's workforce. CEO Vikram Pandit accelerated cost cutting plans after the company's stock fell 19% last week to its lowest price in 12 years. Analysts warn the job slashing may not bring a 2009 profit, as large credit losses could potentially outweigh the savings from cost cutting. Shares closed down 6.6% yesterday to $8.89.
• SEC snags Cuban. Dallas Mavericks owner Mark Cuban has been charged by the SEC for insider trading. According to the SEC, Cuban sold his 600,000 share stake in Mamma.com just after he was told confidentially that the company was about to issue low-priced shares. The sale, which dated to 2004, allowed Cuban to avoid more than $750,000 in losses. Cuban denied the claims and decried SEC officials for their 'facts be damned' attitude and 'win-at-any-cost ambitions.'
• Insurers eye small banks, TARP eligibility. In a bid to gain access to the government's $700B rescue program, some U.S. life insurers are buying up tiny banks with the goal of becoming savings-and-loan holding companies eligible for TARP funds. In the last week alone, insurance firms including Lincoln National (LNC), Genworth Financial (GNW), Transamerica (AEG) and Hartford Financial Services (HIG) have all agreed to purchase savings-and-loans banks, though it is unclear whether insurers have received approval of government financing. Hartford's purchase of Federal Trust Corp. is valued at $10M, and Hartford estimates it's eligible for a federal infusion of $1.1B-$3.4B. Lincoln National is buying a savings-and-loan with just $7M in assets; a Lincoln spokeswoman said the company is likely eligible for up to $3B.
• Paulson to reserve TARP money. Treasury's Henry Paulson is unlikely to tap the $410B of remaining TARP funds for substantial new programs. In an interview yesterday, Paulson said he prefers to keep the money in reserve for unexpected emergencies and to preserve 'the firepower' and 'the flexibility' of the remaining funds for President-elect Obama's new administration. He also commented on the progress TARP has created so far, saying "we've turned the corner in terms of stabilizing the system. There's no longer this worry out there that some systemic institution is going to fail." Paulson's comments likely rule out the use of TARP money to fight rising home foreclosures, a move some congressional members had called for.
• BoA doubles up. Bank of America (BAC) will pay $7B to raise its stake in China Construction Bank Corp. to 19.1% from 10.75%. The announcement comes three weeks after Bank of America received $15B from the government, but the bank says it is not funding the purchase with TARP money. Investors "should be delighted that Bank of America is thinking long term about its options," says Daniel Rosen of Rhodium Group, and "isn't just barricaded in their shack out in the woods." Shares in China Construction fell 5.4% in Hong Kong on concerns Bank of America may sell stock it bought in 2005 after a lockup period on that stake ended last month.
• Mining merger falls off a cliff. Cliffs Natural Resources (CLF) and Alpha Natural Resources (ANR) abandoned their planned $10B merger, citing the difficult economic environment, uncertainty in the steel industry and potential litigation costs. The merger would have created one of the largest U.S. mining companies. Harbinger Capital Partners, Cliffs' largest shareholder, had been opposed to the deal, and says Cliffs should now focus on a sale that could see the company fetch at least $130/share. In after hours trading, Cliffs gained 5.8%, Alpha lost 7.6%.
• New chance to buy Barclays stock. Barclays (BCS) offered institutional investors up to £500M ($750M) of stock that had originally been reserved for Persian Gulf funds. Sovereign wealth funds in Qatar and Abu Dhabi each agreed to release as much as 250 million pounds, or 17% of the preferred stock they had planned to buy. The move is meant to appease investors worried about diluted holdings after Barclays agreed to sell about a third of itself to Persian Gulf investors to meet new U.K. capital requirements. The company has also put its board up for re-election, and announced its executive directors would waive their bonuses. Shares -3.1% pre-market.
• Ford leaves Mazda behind. Cash-starved Ford (F) will sell its 20% stake in Mazda (MZDAF.PK), divesting from the company in which it first invested in 1979. Mazda will buy back 6.87% of its shares from Ford for ¥17.9B ($185M) and keep them as treasury stock. The remaining stake will be bought by over 20 business partners, with the total sale yielding a gain of over $538M for Ford. Two board members will return to Ford, while Executive Vice President Philip Spender will remain at Mazda. Mazda CEO Hisakazu Imaki will cede his post to another executive vice president, Takashi Yamanouchi, to become chairman of the board.
• Industrial output bounces back. Industrial production rose 1.3% in October, far better than the expected 0.2% increase, as mines and utilities rebounded from September's -3.7% slump. Still, some say the increase is likely just a temporary bounce after hurricanes Gustav and Ike lowered production in September, and that manufacturing remains in retrenchment and underlying trends are down. "The trend is clearly very, very weak," economist Joshua Shapiro said. "Export demand is falling apart, and domestic demand has already fallen apart. We'll stay in a recession at least until the early part of 2010." Capacity utilization was 76.4%, in-line with consensus.
• Seven months to go. All 51 economists surveyed by the Philly Fed say we're in or on the brink of a recession that most say started in April, and will last for 14 months. They see payrolls shrinking by 222K per month during Q4 - nearly five times their previous outlook. The group estimates the size of a potential second economic stimulus package at $211B, which will begin to stimulate GDP growth in Q1 2009. They see GDP declining by 2.9% in Q4 and another 1.1% in Q1. Growth will resume in Q2, they say.
• Manufacturing drops. NY State's Empire Manufacturing survey slipped to -25.4 in November from -24.6 in October. The results were better than the expected -26.0 reading, but still mark a record low in the survey’s seven-year history.
• Sharp drop in U.K. inflation. U.K. consumer price inflation fell by 0.2% in October vs. economist expectations of +0.1%. Annual CPI fell to 4.5% from 5.2%, the biggest deceleration since 1992, likely giving the BoE more room to continue cutting interest rates. "Consumer price inflation has departed on what is set to be a sharp and extended downward journey," Howard Archer, chief U.K. and European economist at IHS Global Insight said. He sees a minimum 50 BPs interest rate cut from 3% to 2.5% next month, and says a 100 BPs cut is not at all out of the question. JPMorgan economist Malcolm Barr notes cheaper prices are substantially a result of demand weakness, independent of cheaper commodities, as consumers cut back.

Earnings: Tuesday Before Open

• ArvinMeritor (ARM): FQ4 EPS of $0.38 beats by $0.04. Revenue of $1.72B (+8%) in-line. Sees 2009 EPS of $0.80-1.00 vs. $1.36 and revenue of $4.9-5.2B vs. $6.79B. (PR)
• Hewlett-Packard (HPQ): FQ4 EPS of $1.03 beats by $0.03. Revenue of $33.6B (+5%) vs. $33.09B. Sees FQ1 revenue of $32-32.5B vs. $33.72B. Sees 2009 EPS of $3.88-4.03 vs. $3.85 and revenue of $127.5-130B vs. $135B. Shares +3.9%. (PR)
• Home Depot (HD): Q3 EPS of $0.45 beats by $0.07. Revenue of $17.8B (-6.2%) in-line. (PR)
• Medtronic (MDT): FQ2 EPS of $0.67 misses by $0.04. Revenue of $3.6B (+14.3%) vs. $3.7B. (PR)
• ReneSola (SOL): Q3 EPS of $0.46 beats by $0.08. Revenue of $216M vs. $203M. Sees full-year revenue of $640-670M vs. $698M. Says Chinese demand has dropped since the beginning of November, and spot polysilicon prices have declined significantly in recent weeks. Shares -28.5% premarket. (PR)
• Saks (SKS): Q3 EPS of -$0.13 misses by $0.10. Revenue of $698M (-12.3%) vs. $713M. "As we look to next year, we remain very concerned about the environment and are planning accordingly." (PR)

Earnings: Monday After Close

• Ctrip.com International (CTRP): Q3 EPS of $0.22 in-line. Revenue of $55M (+19.6%) in-line. Shares -9.3% in after hours trading. (PR)

Today's Markets

• Asia markets closed broadly down. Nikkei -2.3% to 8,328. Hang Seng -4.5% to 12,916. Shanghai -6.3% to 1,902. BSE -3.8% to 8,937.
• In Europe at midday, London -1.9%. Paris -1.7%. Frankfurt -2.3%.
• U.S. futures: Dow -1.8%. S&P -2.0%. Nasdaq -2.4%. Crude -0.1% to $54.88. Gold -0.9% to $735.10.

Tuesday's Economic Calendar

• 7:45 ICSC Retail Store Sales
  8:30 Producer Price Index
  8:55 Redbook
  9:00 Treasury International Capital
  10:00 State Street Investor Confidence Index
  1:00 PM NAHB Housing Market Index
  5:00 PM ABC Consumer Confidence Index
• Notable earnings before Tuesday's open: ARM, HD, MDT, SKS, SOL
• Notable earnings after Tuesday's close: PSUN, PVH

Seeking Alpha editor Eli Hoffmann contributed to this post.

• G-20 recap. G-20 leaders met this weekend to discuss solutions to the global financial crisis. The group called for a regulatory crackdown on high-risk lending and investments, and will require banks to meet higher capital standards and better risk management. They also indicated an openness to so-called dynamic capital rules, as currently used by Spain's banking system. President Bush blamed a looming global recession on investors who "sought higher yields without an adequate appreciation of the risks" and on supervisors who failed to address market dangers. Summit participants wanted to institute ways to increase international surveillance of firms that operate across multiple countries. However, at the end of the summit, it remained unclear how much power regulators would have and whether there will ultimately be a global financial markets authority. G-20 leaders have until March 31 to come up with plans to implement the discussed proposals, and will meet again in April. (Read the official G-20 statement.)
• Analysts weigh in on the G-20 summit. Analysts say calls for more regulation could rein in excessive risk but will also make financial services less profitable. Economist Mark Cliffe warns "efforts to make the system more robust may make recovery harder in the short term," while Carl Weinberg of High Frequency Economics Ltd. says immediate action is "what matters for markets at the moment, not regulatory changes for the next decade." Simon Johnson, formerly of the IMF, thinks stricter lending standards for banks could backfire because "the last thing you want to do in a global credit crunch is go around and basically tell people to tighten, tighten, tighten."
• FDIC mulls debt-guarantee changes. The FDIC may alter its $1.4T debt-insurance program after companies complained it would create an exodus from the overnight federal funds market. Firms including JPMorgan Chase (JPM) and Bank of America (BAC) said the original proposal would have made overnight loans too expensive compared to alternatives like direct loans from the Federal Reserve. As such, the FDIC may switch to a sliding scale of fees based on the maturity of the debt instead of the flat fee it had previously suggested. "Complexity is somewhat inevitable," said FDIC's Art Murton, but "we're doing our best to take away unnecessary confusion." The FDIC plans to release final regulations for the program as early as this week, and banks have until December 5 to decide whether they will participate.
• Insiders snap up company shares. General Electric's (GE) Jeffrey Immelt and Citigroup's (C) Vikram Pandit are among recent insiders to buy shares of their own companies. CEOs, directors and other senior executives at NYSE-listed companies bought $1.37B worth of equities in October, buying $57 worth of shares for every $100 sold last month, up from a low of $21 bought in June. A bullish signal for two decades, insider buying now has a mixed record and could be a sign of an impending decline. The last time insiders bought this much was in March, and the buying spree was followed by a significant drop in the S&P 500 a month later. "Everyone’s drinking the Kool-Aid," says money manager Michael Levine. "These guys know their companies better than the market, so they think they’ll be right. But the economic slowdown has happened much more quickly and has been much deeper than people expected."
• Some clamor for federal money,... First it was banks, brokerages, mortgage lenders, insurance firms. Then automakers joined the fight for government funds. The most recent group to come hat in hand to lawmakers is now the auto-parts makers. As Detroit's Big Three wait for aid, auto-parts makers are arguing they deserve access to TARP funds too, and over 100 parts maker companies have signed a letter sent to Congress today asking for a change in pending legislation to make their industry eligible for federal money. Auto-parts suppliers employ 600,000 people, nearly three times as many as those working for the Big Three automakers, and say they are already feeling the effects of automakers' financial woes.
• ...others keep a wary distance. Over 60 banking institutions have indicated they are eligible to receive more than $173B via TARP, but several institutions have made clear that they don't want any help. Over 35 companies, ranging from United Financial Bancorp (UBNK) to Charles Schwab (SCHW) to nine-branch thrift Ocean Shore Holding (OSHC), have chosen not to apply for federal aid. Some, like United Financial Bancorp, say they are 'financially solid' and have no need for the aid. Others say TARP has 'too many unknowns within the program' for a bank to prudently enter, or are resistant to TARP rules that limit stock buybacks for banks. One thing the institutions have in common is their desire to make sure the public knows they have not applied for aid; analysts are expecting an industry shake-out and say banks that apply for aid and are rejected face almost certain failure.
• GM sells assets. General Motors (GM) sold its remaining 3% stake in Suzuki Motor (SZKMF.PK) on the open Tokyo market for around $230M. Desperate for cash, GM sold the stock almost 5% below Suzuki's 25-day moving average, and at less than half Suzuki's high for the year. CEO Rick Wagoner stressed GM continues to value its 'strategic relationship' with Suzuki, and said the move was 'based on a mutual agreement.' The sale marks GM's first exit from Suzuki since it first invested in the Japanese company in 1981.
• Toyota faces downgrade. Toyota Motor (TM) is the automaker with the best credit, but may not hold that distinction for long. Fitch Ratings, citing 'unprecedented' challenges in the auto industry, has placed the company on 'Rating Watch Negative' and will review the carmaker in the next several weeks, potentially leading to a downgrade from Toyota's current AAA rating. A ratings cut would raise borrowing costs for Toyota and would be the company's first downgrade in a decade.
• Bonuses begone. Seven top executives at Goldman Sachs (GS) have decided to give up their 2008 bonuses, forfeiting potentially tens of millions of dollars in payouts. A company spokesman said the executives felt it was 'the right thing' to do. Wall Street's top players have been under pressure from regulators and investors to eliminate bonus payments this year. Goldman's move is being closely watched by Wall Street, but it is unclear whether other firms will choose to follow suit.
• GE eyes expansion. General Electric (GE) CEO Jeffrey Immelt said his company has the resources to take advantage of buying opportunities during the economic downturn. In specific, he named the oil and gas, media, infrastructure and aviation sectors. The professed interest in buying media assets has brought some reassurance to investors who worried GE might sell its NBC Universal unit.
• Recession metrics. If a survey by the National Association of Business Economists ((NABE)) is any measure, the economic future of the U.S. looks grim indeed. Economists believe the U.S. is in a recession, the economy will contract more severely in Q4, the decline will extend into early 2009 and unemployment will likely peak at 7.5% by the third quarter of 2009. NABE President Chris Varvares said economists have become "decidedly more negative on the economic outlook for the next several quarters" as the credit crisis intensifies and spills over to the 'real economy.'
• Recession hits Japan. Japan, the world's second largest economy, entered its first recession since 2001 last quarter, and conditions are expected to get worse before they get better. GDP shrank an annualized 0.4% last quarter, vs. predictions of 0.1% growth, and had contracted 3.7% in the quarter before. The recession could grow more severe as demand for exports falls and the Japanese government faces serious constraints in its ability to stimulate growth.

Earnings: Monday Before Open

• Covidien (COV): FQ4 EPS of $0.73 beats by $0.05. Revenue of $2.6B (+12%) in-line. (PR)
• Gol Linhas Aereas Inteligentes (GOL): Q3 EPS of -R$1.47 misses by R$1.12. Revenue of R$1.8B (+38.5%) vs. R$1.3B. (PR)
• Lowe's (LOW): Q3 EPS of $0.33 beats by $0.05. Revenue of $11.7B (+1.4%) vs. $11.6B. (PR)

Today's Markets

• Asia markets closed mixed. Nikkei +0.7% to 8,523. Hang Seng -0.1% to 13,530. Shanghai +2.2% to 2,030. BSE -1.0% to 9,291.
• In Europe at midday, stocks are trading down. London -2.0%. Paris -2.0%. Frankfurt -2.8%.
• U.S. futures: Dow -0.9%. S&P -1.0%. Nasdaq -0.8%. Crude -2.7% to $55.49. Gold -0.2% to $740.80.

Monday's Economic Calendar

• 8:30 Empire State Mfg Survey
  9:15 Industrial Production
• Notable earnings before Monday's open: COV, GOL, LOW, TGT
• Notable earnings after Monday's close: CTRP

Seeking Alpha editor Eli Hoffmann contributed to this post.

• Bear market bounce. In a stunning turnaround, markets recovered from an early drop on Thursday and rallied to a strong close as bargain hunters got back into the market. The Dow Jones Industrial Average, which fell below 8,000 at its intraday low, gained 552.59 points and closed up 6.7% to 8,835.25. The S&P 500 and Nasdaq, both of which touched five-year lows during the trading session, closed up 6.9% and 6.5% respectively. Many investors hope yesterday's rally will prove late-October's stock market lows to be the trough of the bear market.
• Euro area enters recession. Euro area GPD fell by 0.2% in Q3, in line with expectations, sending the eurozone into recession. Germany, Italy and the UK led the way down with 0.5% contractions. France (+0.1%), Czech Republic (+1%) and Slovakia (+1.5%) were gainers. (.pdf) Euro area inflation fell to 3.2% in October from 3.6% in September. Germany (2.5%) was among the lowest, while Latvia (13.7%) led the pack. (.pdf) Some euro area policy makers fear the region's strict budget rules will prevent governments from responding adequately to the downturn, prolonging the effects of the financial crisis on the broader economy. "This is a severe constraint which may cause the real effects of the financial crisis to persist much longer than in the U.S., or for that matter the U.K.," Greek Finance Minister George Alogoskoufis said Thursday.
• Limited expectations from G-20 summit. G-20 leaders head to Washington today for a much-heralded summit aimed at finding solutions to the financial crisis, but few expect the weekend to produce any new initiatives. European leaders, who blame flawed U.S. regulation for the current financial maelstrom, will push for strong regulatory reforms, and U.K.'s Brown is calling for globally coordinated fiscal stimulus efforts. President Bush, who favors only modest reforms, made his position very clear Thursday night, telling an audience "the crisis was not a failure of the free market system... [The greater threat is] not too little government involvement, it is too much government involvement in the market." If anything, the summit may show how much the crisis is reshaping the economic map as the financial wherewithal of China and Saudi Arabia put them in the spotlight.
• OPEC fights falling oil. OPEC will meet later this month in an attempt to put a floor beneath falling oil prices, and another substantial production cut is expected. Near-term demand for oil has been sharply curbed by the global slowdown, pushing oil prices to a 22-month low, and the International Energy Agency slashed its global oil demand forecasts just yesterday to 0.1% growth this year, down from +1.1% in 2007. A growing number of traders are betting OPEC will be unsuccessful in controlling oil's fall and expect to see prices below $30/barrel. Crude oil closed up 3.7% to $58.24 on Thursday in anticipation of an OPEC cut.
• Return to growth in 2009? The U.S. economy is in the midst of the worst part of the downturn, but growth may return by the second half of 2009, economists polled by the WSJ say. On average, economists expect a 3%/year decline in GDP growth in Q4, on the heels of Q3's 0.3% drop. Q1 2009 will bring another negative reading, they say, followed by flat growth in Q2, and reaching 2.1% growth by Q4. "By the third quarter of next year, a recovery will be under way," said John Lonski of Moody's Investors Service. Others were more cautious: "We're not only in an economic downturn, but a serious banking crisis. The idea that you can just have a couple of quarters of negative growth and then we're off to the races is just too optimistic," Paul Ashworth of Capital Economics said.
• GM breakdown could wreak havoc. Contrary to the opinion of hedge-fund manager Bill Ackman and former GE CEO Jack Welch, Wilbur Ross says a GM (GM) bankruptcy filing would be a disaster, toppling its peers and driving suppliers out of business. "It doesn't add up that they are letting GE (GE) and American Express (AXP) to become banks to get aid, but they won't save the car industry." Meanwhile the European Commission said it will take action at the World Trade Organistion if it determines that the U.S.'s $25B auto industry aid package is 'illegal,' not to speak of Pelosi's proposed bailout package. European new passenger-car registrations fell 14.5% in October to 1.13M, the sixth straight monthly decrease, ACEA said. GM (GM) was the worst performer, down 25%, as consumers continue to delay big-ticket purchases.
• Banks battle on deposit rates. As U.S. banks try to shore up their funding sources by securing deposits, an 'unprecedented' level of competition has created a national rate war. Across the board, from giant Citigroup (C) to tiny S&T Bancorp (STBA), banks are sharply increasing interest rates on deposits. The bump up is good news for investors seeking higher returns, but puts banks in a lose-lose situation. Institutions that don't raise rates will find it harder to attract customers. Those who do raise rates will cut into their own profit margins at a time when many are already struggling with rising defaults and a weak economy. As a result, banks face a hit to their earnings and a slowdown in the recapitalization process. Since May, the average rate on a one-year CD has risen to 2.6% from 2%. Certain regions are seeing 6-month CDs as high as 4.0-4.5%.
• Boeing faces more union problems. Boeing (BA) may be facing another strike as tensions escalate in talks with union leaders representing around 21,000 of the company's white-collar engineers and technical workers. Boeing has been working with the Society of Professional Engineering Employees in Aerospace, or SPEEA, since late October to finalize a work agreement but progress has been far slower than either side expected. SPEEA officials say a 'great deal of progress' has been made but accuse Boeing of stalling and decided to seek strike authorization 'after two days of non-productive and discouraging dialog.' Boeing officials said talks will resume today with the help of a federal mediator who has been present throughout the negotiations.
• Job cuts, I. Citigroup (C) is launching another major round of layoffs as it struggles to return to profitability, and will also raise credit card interest rates for millions of customers. Sources say the company, which has posted over $20B in net losses over the past year, will fire at least 10,000 employees in its investment bank and other divisions worldwide. According to people familiar with the matter, officials have been told to slash their employee compensation budget by at least 25%, and can minimize the number of jobs lost by firing higher-paid traders and bankers. In a sign of confidence in the company, CEO Vikram Pandit bought 750,000 shares of the company's stock yesterday, which is trading under $10.
• Job cuts, II. Royal Bank of Scotland (RBS) will cut 3,000 jobs worldwide in the coming weeks, according to a BBC report. Earlier this month, RBS warned it faces additional write-downs and rising bad debts this quarter, and could potentially see its first ever full-year loss this year, as the global financial crisis grinds on. An RBS spokeswoman refused to confirm or deny the cuts. Shares +4.4% in London trading.
• International Trade. September's trade balance of -$56.5B was in-line with estimates. Exports totalled $155.4B, down $9.9B from August. Imports were $211.9B, down $12.5B.
• Jobless claims jump. Initial jobless claims of 516,000 were substantially worse than the 480,000 economists had expected. Last week's numbers were revised to 484,000 from 481,000. The 4-week average of 491,000 was up 13,250. "The labor market is only reinforcing a very pessimistic picture," economist Linda Barrington said. "When you start to see the downward pressure on wages as well as the credit crunch, that's only going to make consumers much more nervous."

Earnings: Friday Before Open

• Abercrombie & Fitch (ANF): Q3 EPS of $0.72 beats by $0.01. Revenue of $896M (-1.9%) vs. $909M. Sees Q4 EPS of $1.00-1.05 vs. $1.57 and comparable-store sales down 26%. (PR)
• Hewitt Associates (HEW): FQ4 EPS of $0.50 in-line. Revenue of $807M (+7.5%) vs. $792M. (PR)
• Telefonica (TEF): Q3 net profit of €2B vs. consensus of €2.1B. Ebitda of €5.9B vs. €5.87B. Revenue of €14.99B vs. €14.84B. Shares +3.3% in Madrid. (.pdf)

Earnings: Thursday After Close

• Kohl's (KSS): Q3 EPS of $0.52 beats by $0.01. Revenue of $3.8B (-0.6%) in-line. Sees Q4 EPS of $0.90-1.05 vs. $1.22. Shares -4.1%. (PR)
• Nordstrom (JWN): Q3 EPS of $0.30 misses by $0.01. Revenue of $1.81B (-84%) in-line. Sees Q4 EPS of $0.30-0.45 vs. $0.70. Shares -5.2%. (PR)

Today's Markets

• Asia markets closed mostly up. Nikkei +2.7% to 8,462. Hang Seng +2.4% to 13,543. Shanghai +3.0% to 1,986. BSE -1.6% to 9,385.
• In Europe at midday, London +3.9%. Paris +2.5%. Frankfurt +3.7%.
• U.S. stock futures are lower ahead of today's retail data. Dow -0.9%. S&P -0.9%. Nasdaq -0.4%. Crude -0.8% to $57.75. Gold +3.5% to $729.40.

Friday's Economic Calendar

• 8:30 Bernanke speaks about central bank policy coordination
  8:30 Import/Export Prices
  8:30 Retail Sales
  10:00 Business Inventories
  10:00 University of Michigan Consumer Sentiment
  10:35 EIA Natural Gas
• Notable earnings before Friday's open: A, ANF, JCP
• Notable earnings after Friday's close: GOL

Seeking Alpha editor Eli Hoffmann contributed to this post.

• TARP loses TA, gets new focus. Treasury's Henry Paulson officially abandoned plans to buy troubled assets through the Troubled Assets Relief Program. Instead, the government will continue to pump money directly into financial institutions. Paulson said the program will also begin to focus on consumer credit by trying to increase the availability of student loans, auto loans and credit cards, and will examine ways to prevent foreclosures. The shake-up underscored the breadth of the U.S. economy's problems, and threw markets 'into a tizzy,' as U.S. indices closed strongly down on Wednesday and Asian markets opened in the red Thursday morning. Paulson remained unapologetic about switching focus, saying facts had changed and that an asset purchase plan would have taken too long and been insufficient to calm markets.
• GM searches for bailout, buyers. Desperately waiting for a federal bailout, General Motors (GM) is having a tough time selling $4B in assets after warning it may run out of operating cash. All divisions for sale would rely on GM as a partner post-sale, and potential buyers are concerned units like the Hummer SUV brand will lose value if GM fails. Even in the case of a bailout, GM may only be able to unload these assets at fire-sale prices. The sales are a central part of GM's plans to boost cash by up to $20B by the end of 2009, but 'there probably isn't a much more difficult environment in which GM could try to make these sales.'
• Showdown over Big Three bailout. Democrats in Congress are pushing forward with a proposal to rescue failing automakers, despite expected resistance from Republicans and the White House. Much of the debate hinges on whether automakers will be 'viable' after receiving aid or if the government will just be pouring money into a failing industry in need of serious restructuring and reform. In the case of General Motors (GM), some experts believe a painful bankruptcy would be better than a government bailout because a bailout would only delay the necessary steps GM needs to take to become a stronger, leaner and viable company. Treasury's Paulson remains firmly against assistance to automakers using existing bailout funds, calling the auto industry important but insisting TARP is not the right facility to help those institutions. President-elect Obama, who had broad support from labor unions during his campaign, came out strongly in favor of a bailout.
• GE gets liquid. General Electric (GE) received temporary FDIC backing for up to $139B of debt from its financing arm. Inclusion in the FDIC temporary liquidity guarantee program is 'part of a very clear plan' that will allow GE to source its debt competitively, said a GE spokesman, and will level the playing field with other issuers. GE's credit arm has been hit hard by the credit crunch, and the company has taken several steps to improve its liquidity. The cost of insuring GE's debt fell after the announcement.
• Citigroup chases Chevy Chase Bank. Earlier this week, Citigroup (C) was reported to be in advanced talks with an unnamed regional bank. Sources now say the mystery target is Chevy Chase Bank, which has over 285 branches and operates in the mid-Atlantic region. Chevy is reportedly in talks with other bidders as well, and spokesmen from both Citigroup and Chevy Chase refused to comment. Citigroup's board is becoming increasingly dissatisfied with the company's financial performance, sources say, and is considering replacing Sir Win Bischoff as chariman.
• BHP undaunted by antitrust requirements. BHP Billiton (BHP) is determined to push ahead with its hostile takeover bid for Rio Tinto (RTP), despite antitrust concerns. As such, the company is considering various concessions, including selling billions of dollars in mining assets or spinning off key iron-ore operations, as it prepares a formal response to objections laid out by EU regulators. Analysts estimate BHP could spin off as much as $12B worth of assets, and both Anglo American (AAUK) and Xstrata (XSRAF.PK) have indicated they may be interested in any such sale. EU approval is the last major obstacle for BHP before it can take its deal directly to Rio shareholders.
• CDS probe looks at matchmakers. The office of NY AG Andrew Cuomo is probing possible manipulation in the largely unregulated world of credit-default swap trading. In focus are interdealer brokers - the middlemen who match buyers and sellers in CDS trades. Meanwhile the SEC is also conducting separate inquiries into the market. Regulators suspect market players may have spread false rumors to manipulate CDS prices.
• Wal-Mart: Bring on the recession. Net sales at the world's largest discount retailer, Wal-Mart (WMT), increased 7.5% as cash-strapped consumers went value shopping (see results below). International sales outshone domestic, with sales growth of 11.2% vs. 6.1% in the U.S. Comparable-store sales were up 2.7%; looking ahead CFO Tom Schoewe predicted comps growth of 1-3% in Q4. While economists forecast a grim holiday season for most retailers, Wal-Mart (WMT) has managed to thrive; its shares are up 10.7% YTD vs. a 43% drop in the Consumer Discretionary ETF (XLY). America's Research Group says U.S. holiday retail sales will fall 1% this year - the first time ARG has forecast a decline in almost a quarter century of surveys. While 40% plan to spend less, an unbelievable 92.9% say they'll shop at Wal-Mart.
• Anheuser gives the OK. Anheuser-Busch (BUD) shareholders overwhelmingly approved a proposed $52B takeover by rival InBev (INBVF.PK). Over 95% of Anheuser shareholders voted in favor of the bid which would create the world's largest brewer. Antitrust regulators in the U.S., U.K. and China still have to approve the deal, which the two companies hope to complete by the end of the year. The new company will be called Anheuser-Busch InBev and will have over $36B in annual revenue.
• OECD revises down. For the second time this year, the OECD cut its global growth forecast for 2009. The OECD now predicts its 30 member countries will expand 1.4% this year and contract 0.3% in 2009, down from forecasts of 1.8% growth in 2008 and 1.7% growth in 2009. The U.S. is leading the slowdown, and is forecast to contract 0.9% next year. The organization called on governments to take additional stimulus measures to fight a global recession.
• Foreclosures keep coming. Nearly 280,000 U.S. homes received a foreclosure filing in October, RealtyTrac reported, even as laws aimed at helping property owners slowed the rate of defaults. Filings rose 5% from September and were up 25% from the year before, still better than average monthly gains of around 50% this year. RealtyTrac CEO James Saccacio warned the slowdown could be misleading, as "the net effect may be merely delaying inevitable foreclosures."
• Mortgage apps rise. Mortgage applications rose by 11.9% this week after falling 20.3% the previous week, MBA said. 30-year fixed mortgage rates fell by 23 BPs to 6.24%.
• Germany, meet recession. German GDP fell 0.5% in Q3 after dropping 0.4% in Q2 - worse than the 0.2% decrease expected by economists. The two-quarter decline pushes Germany into an official recession, its first since 1996. "The German recession has begun in earnest and it's very serious," Bank of America economist Holger Schmielding said, adding the worse-than-expected contraction will lead to reduced forecasts for the entire eurozone. The report sent the euro down more than a penny to $1.2388.

Earnings: Thursday Before Open

• Dr Pepper Snapple (DPS): Q3 EPS of $0.45 misses by $0.06. Revenue of $1.5B (-2%) in-line. Sees full-year EPS of $1.83-1.86 vs. $1.95. (PR)
• Fortress Investment Group (FIG): Q3 EPS of -$0.04 misses by $0.14. Revenue of $185M (-21.5%) vs. $165M. (PR)
• Siemens (SI): FQ4 EPS of €2.17 vs. consensus of €1.07. Revenue of €21.65B vs. €21.33B. Takes a €3B restructuring charge, and a €1B provision for the settlement of bribery charges. Shares -6% premarket. (PR)
• Urban Outfitters (URBN): Q3 EPS of $0.35 in-line. Revenue of $478M (+26%) in-line. (PR)
• Wal-Mart (WMT): Q3 EPS of $0.77 beats by $0.01. Revenue of $97.63B (+7.5%) vs. $98.26B. Sees Q4 EPS of $1.03-1.07 vs. $1.11. Says sudden changes in currency rates reduced EPS by $0.06. (PR)

Earnings: Wednesday After Close

• Applied Materials (AMAT): FQ4 EPS of $0.18 beats by $0.04. Revenue of $2.04B (-13.6%) vs. $1.94B. Shares -0.6%. (PR)
• Computer Sciences (CSC): FQ2 EPS of $0.72 misses by $0.04. Revenue of $4.24B (+5.5%) in-line. Sees FQ3 EPS of $1.00-1.10 vs. $1.13 and revenue of $4.1-4.2B vs. $4.27B. Shares +0.5%. (PR)
• Crocs (CROX): Q3 EPS of -$1.79 vs. consensus of $0.02. Revenue of $174M (-32%) vs. $202M. Shares -34%. (PR)
• Intel (INTC): Lowers Q4 revenue outlook to $8.7-9.3B vs. $10.4B due to "weaker than expected demand in all geographies and market segments." Reduces gross margin expectation to 55% from 59%. Shares -8.8%. (PR)
• NetApp (NTAP): FQ2 EPS of $0.28 beats by $0.01. Revenue of $912M (+15.2%) vs. $905M. Shares +2.1%. (PR)
• Netease.com (NTES): Q3 EPS of $0.36 misses by $0.02. Revenue of $119M (+41.3%) vs. $109M. Shares -4.3%. (PR)
• Sina (SINA): Q3 EPS of $0.44 beats by $0.03. Revenue of $105M (+63.9%) vs. $103M. (PR)

Today's Markets

• Asia markets closed mostly down. Nikkei -5.2% to 8,239. Hang Seng -5.1% to 13,221. Shanghai +3.7% to 1,928. Kospi -3.1% to 1,088.
• In Europe at midday, London -1.9%. Paris -0.2%. Frankfurt -0.9%.
• U.S. futures: Dow -0.3%. S&P -0.3%. Nasdaq -1.3%. Crude -0.2% to $56.05. Gold -0.6% to $713.70.

Thursday's Economic Calendar

• 7:00 MBA Mortgage Applications
  8:30 International Trade
  8:30 Jobless Claims
  9:00 RBC CASH Index
  10:35 EIA Petroleum Status
  12:30 PM Fed's Charles Plosser speaks on regulatory reform
  2:00 PM Treasury Budget
  4:30 PM Money Supply
• Notable earnings before Thursday's open: MPEL, PAAS, SI, URBN, WMT
• Notable earnings after Thursday's close: CLNE, JWN, KSS

Seeking Alpha editor Eli Hoffmann contributed to this post.

• Little progress on Big Three bailout. House Speaker Nancy Pelosi, arguing General Motors (GM) is too big to fail, urges 'immediate action' to help automakers, but faces resistant Republicans and a noncommittal White House. Pelosi wants to include automakers in TARP, but without bipartisan support, the measure is unlikely to pass until a new congressional session begins in January. The Treasury too has been hesitant to aid automakers, concerned that expanding a rescue to include non-financial companies would raise expectations of assistance from other industries facing a slowdown. Meanwhile, General Motors' (GM) shares sank to their lowest levels in 65 years as the company warned it may run out of operating cash by the end of the year.
• Help for homeowners. The Federal Housing Finance Agency, the regulator for Fannie Mae (FNM) and Freddie Mac (FRE), unveiled plans yesterday to stem foreclosures by easing mortgage payments for potentially over 400,000 homeowners. Homeowners spending more than 38% of their income on mortgage payments and delinquent by 90 days or more could be eligible to have their mortgage rate cut, the life of their loans extended or their principal reduced. FDIC's Sheila Bair said the measure is 'a step in the right direction, but falls short of what is needed,' arguing the Fannie/Freddie focus is too narrow and ignores the 60% of seriously delinquent mortgages held by Wall Street firms and other investors. MBA Chief Economist Jay Brinkmann says a 50% success rate in the loan modification program would be 'a good result.'
• Banks win with AIG's new terms. Many banks that had bought protection from AIG (AIG) on mortgage-backed securities will be able to recoup their investments under AIG's revised rescue which will see a new facility buy around $70B of these securities. Companies that had previously sought and received collateral from AIG (including GS, MER, UBS, DB), much of which came when AIG received government funds in September, will be able to keep their collateral. Banks which participate in selling securities to the new facility will be compensated for the full, or par, value. "It's like a home run for some of the banks," says Carlos Mendez of ICP Capital. "They bought insurance from a company that ran into trouble and still managed to get all, or most, of their money back."
• AmEx looks to TARP. Sources say American Express (AXP), which just this week received approval to become a bank holding company, is requesting $3.5B in federal aid under TARP. The card issuer has not been directly impacted by the housing crisis, but faces slowing consumer spending and rising defaults. The TARP funds would allow AmEx greater flexibility in funding its operations while it deals with the market downturn. AmEx has not announced its application for aid, and federal regulators won't disclose which companies have been approved or denied for assistance.
• Changing TARP on the fly. The Treasury is considering adding a private enterprise element to TARP, say sources familiar with the matter, which would require firms to raise private capital in order to qualify for public assistance. The condition would probably not apply to the existing $250B capital repurchase program, but may become relevant for future capital investments. The same sources said the Treasury is unlikely to conduct auctions to buy troubled assets, as originally intended under TARP, and instead will continue to inject capital directly into the financial sector. These modifications could be officially announced as early as today.
• Fed wants clearin