Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

Top Stories
Ruling could let Nokia block BlackBerry sales. Nokia (NYSE:NOK) is seeking to stop the sale of RIM's (RIMM) products in the U.S., Canada and U.K. through the enforcement of the ruling of an arbitrator, which found in favor of the Finnish company in a dispute over patents related to its wireless local access network (WLAN) technology. The arbitrator, the firm said, ruled that RIM is "not entitled to manufacture or sell WLAN products without first agreeing royalties with Nokia." RIM's shares were -2.05% premarket, while Nokia's were +2.2%.

Green Mountain shares soar after earnings beat. Green Mountain's (NASDAQ:GMCR) shareholders finally got the healthy earnings report they were looking for as FQ4 net profit jumped 22% to $91.9M, EPS of $0.64 savaged forecasts by $0.16, and revenues climbed 33% to $946.7M. Sales of single serve packs grew 59% to $2.71B and brewer revenue added 45% to reach $759.8M. The firm provided FQ1 guidance that was above consensus and reiterated FY13 sales growth at 15%-20%. Shares were flying 23% premarket.

Thousands face job losses as EU OKs Spanish bank overhaul. EU Competition Commissioner Joaquin Almunia has approved Spain's plan to recapitalize four nationalized banks, including Bankia, thereby clearing the way for the companies to receive €37B from the eurozone's ESM bailout fund. However, the banks' bondholders will face losses of €10B, while thousands of staff are likely to lose their jobs after Almunia ruled that the firms must close up to half their branches within five years.

Top Stock News
Big Tobacco forced to run ad campaign admitting that it lied. Judge Gladys Kessler yesterday approved the wording of "corrective statements" that tobacco companies must use in a two-year public advertising campaign in which they have to admit that they lied about the dangers of cigarettes from as far back as 1964. The firms, which are expected to appeal, have argued that such a move violates their free speech rights.

Virtu frontrunner in race for Knight Capital. High-speed trading firm Virtu Financial has reportedly taken the lead against rival Getco in the race to acquire Knight Capital (NYSE:KCG). Any deal is expected to value the brokerage firm at over $1B, well above its market cap of $540.2M. Virtu is preparing an all-cash offer that would be a prelude to an IPO, while Getco's bid would comprise cash and shares as part of a reverse merger that would give the combined company a public listing.

Costco joins dividend rush ahead of fiscal cliff with $3B payout. Flush with cash, a record 103 companies have said this quarter that they'll pay special dividends before the end of the year, when a steep tax hike to over 40% from 15% could come into effect - barring a deal over the fiscal cliff. The latest firm to declare is Costco with a $3B payout. If taxes do rise, companies are expected to favor buybacks over dividends next year, as the related tax increase may be to just 20% from 15%.

Fed mulls rules that could increase costs for foreign banks. The Fed is reportedly considering forcing foreign banks to combine their U.S. operations into American holding companies, which would require the units to meet minimum capital standards regardless of the resources of the parent firms. The move could increase costs, force foreign banks to inject billions of dollars into their U.S. subsidiaries, limit the movement of capital and even hurt lending.

BP engineers face manslaughter charges over oil spill. BP (NYSE:BP) rig supervisors Robert Kaluza and Donald Vidrine are due to be arraigned in court today on manslaughter charges over their role in the Deepwater Horizon rig explosion that killed 11 workers in 2010. Former BP executive David Rainey is to appear in court on charges of concealing information from Congress about the size of the oil spill.

BP nearing $38B goal with $1.1B North Sea sale. BP (BP) has agreed to sell a number of North Sea oil and gas interests to Abu Dhabi National Energy Company for around $1.1B, taking the value of the assets the U.K. company has sold or is selling following the Gulf of Mexico oil spill to $37B. BP's goal is to divest $38B in assets by 2013.

Groupon considers firing CEO. Several Groupon (NASDAQ:GRPN) directors have reportedly been thinking about replacing CEO Andrew Mason with a more experienced boss, as well as making other changes. However, Mason, who's taken plenty of heat because of Groupon's post-IPO performance, has support on the board and is unlikely to be fired immediately. Directors are expected to discuss management issues at a meeting tomorrow.

Study shows flaws with insider trading laws. The WSJ has studied 20,237 executives who bought or sold their own firm's stock in the week prior to their companies making news and found, surprise surprise, that many of them did rather well. And those who dipped in and out of the market did better than those who traded according to an annual pattern. What the WSJ has highlighted is the oxymoronic nature of insider-trading laws as it applies to company staff and directors.

Top Economic & Other News
French unemployment hits 14-year high. The number of job seekers in France rose 1.5% in October to 3.1M, the highest since April 1998, with the increase the 18th in a row. The Labor Ministry said that because of the struggling economy, the figures could get even worse. The government hopes that corporate tax rebates and other measures that are due to come in next year will kick-start the economy and bring unemployment down.

Steel industry unable to adjust to economic realities. The steel industry is suffering from chronic overcapacity, with production capability of 1.8B tons but expected 2012 orders of just 1.5B tons. And instead of cutting back, the sector is building more mills, often supported by governments. Major problems include the fragmentation in the industry and the political difficulties of closing plants - witness ArcelorMittal's (NYSE:MT) travails in eastern France, where the government has threatened to nationalize one of the company's mills.

Greek deal could see countries take losses. The measures that the Troika has agreed to in the deal to release a long-delayed €34.4B tranche of Greece's bailout will reportedly only bring the country's debt-GDP down to 126.6% by 2020 and 115% by 2022, not the respective 120% and 110% that was advertised. Officials are studying further ways to reduce Greece's loans, but it could mean that eurozone nations will have to take losses on the debt they hold.

Treasury: China not a currency manipulator. The Treasury Department has declined to name China a currency manipulator, but said the yuan "remains significantly undervalued" and called for further appreciation against the greenback and other major currencies.

CEOs to lobby Washington over fiscal cliff. Numerous CEOs of major companies are off to Washington today to talk to President Obama and/or John Boehner about averting the fiscal cliff. Those meeting Obama include the leaders of Merck (NYSE:MRK), Coca-Cola (NYSE:KO) and Caterpillar (NYSE:CAT), while those meeting Boehner include the CEOs of Honeywell (NYSE:HON) and Aetna (NYSE:AET). Company bosses have also been urging their staff to pressure Washington to reach a deal.

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Today's Markets:
In Asia, Japan -1.2% to 9308. Hong Kong -0.6% to 21709. China -0.9% to 1974. India +1.6% to 18842.
In Europe, at midday, London -0.3%. Paris -0.4%. Frankfurt -0.3%.
Futures at 7:00: Dow -0.2%. S&P -0.25%. Nasdaq -0.2%. Crude -0.7% to $86.58. Gold -0.2% to $1741.00.

Today's economic calendar:
7:00 MBA Mortgage Applications
10:00 New Home Sales
10:30 EIA Petroleum Inventories
12:15 PM Daniel Tarullo speaks on Regulation of Foreign Banking Organizations
1:00 PM Results of $35B, 5-Year Note Auction
2:00 PM Fed's Beige Book

Notable earnings before today's open: ARO, GES, TIVO

Notable earnings after today's close: AEO, EXPR, JASO, SPH, TFM, YGE

See full real-time earnings coverage »

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