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
U.S. banks face $60B gap under Basel III. America's 19 biggest banks are at least $50B short of meeting Basel III requirements under new rules that the Fed approved yesterday, with smaller lenders about $10B short. The Fed surprised the sector by voting in favor of applying the complex regulations to all 7,307 U.S. banks, including even the smallest lenders. Now read: Will Basel III Lead To Dividend Cuts? »

Spain to bite the bullet. Spain will climb down from its tree and seek financial aid to prop up its ailing banks, Reuters reports. An announcement will probably come after a conference call on Saturday between eurozone finance ministers. Yesterday Fitch downgraded Spain by three notches to BBB from A. Now read: Spain Turmoil Camouflages BBVA's True Potential »

Top Stock News
Facebook ads work. comScore will publish new data next week that suggests paid and earned media exposure on Facebook (NASDAQ:FB) has a "statistically significant" positive influence on sales for a brand, contrary to concerns that Facebook ads just don't work. Now read: Yes, It's Time To 'Like' Facebook »

Patent battle fatigue. A judge has "tentatively" dismissed IP litigation between Apple (NASDAQ:AAPL) and Motorola Mobility (NASDAQ:GOOG), canceling a trial that was to begin on Monday. The judge said neither company could "establish a right of relief" for the alleged violations. Meanwhile, the judge in Apple's battle with Samsung (OTC:SSNLF) says she doesn't have the "bandwidth to handle the strain of the companies' multiplying demands." Now read: Google's New Threat To Apple »

Shell, TravelCenters take a bet on LNG. Shell (NYSE:RDS.A) has signed a preliminary agreement with truck-stop chain TravelCenters of America (NYSEMKT:TA) to supply liquefied natural gas for heavy-duty trucks at 100 fueling stations across the U.S., starting in 2013. Shell hopes lower costs will spark demand for the alternative fuel. Now read: The 'Must Own' Stock For A Natural Gas Rebound »

IGT snags online gaming approval. International Game Technology (NYSE:IGT) has received a unanimous recommendation from the Nevada Gaming Control Board for an interactive online gaming service provider and manufacturer license. Nevada is the first U.S. state to adopt statutes to allow online gaming. IGT shares rose 2.3% post market.

McGraw-Hill bids for $1.7B oil & gas researcher. McGraw-Hill (MHP) is likely to be the only remaining suitor for Wood Mackenzie with a proposal that values the oil and gas researcher at £1.1B ($1.7B), Bloomberg reports. That follows first-round offers for Wood Mackenzie, which is being sold by European PE firm Charterhouse. McGraw-Hill views Wood Mackenzie as a good fit for its own Platts ops.

Logitech cutting 13% of workforce. Logitech (NASDAQ:LOGI) is laying off 450 people, or 13% of its "non-direct-labor workforce," as part of its previously-announced restructuring. Starting in FY14, the overhaul should save the company an annual $80M in operating costs.

EU looks to force the issue with Universal over EMI buy. EU competition regulators are formulating a "statement of objections" that lays out their concerns about Universal Music's (OTCPK:VIVHY) proposed $1.9B purchase of the recorded music division of EMI, Reuters reports. The move puts pressure on Universal to offer concessions to receive the EU's blessing for the deal.

Continental lands union deal ahead of schedule. United Continental (NYSE:UAL) has reached a tentative labor agreement with the Association of Flight Attendants, covering staff from the company's Continental subsidiary, almost three months ahead of schedule. Flight attendants are set to vote on the deal in the coming weeks.

FHA loan sale may save distressed homeowners. The FHA is expected to announce a bulk sale program today in which it will attempt to offload more troubled loans to investors, potentially preventing or delaying foreclosures for thousands of homeowners. The agency has more than 700,000 loans in default, amounting to over 9% of the $1T of debt that it insures.

Dish chairman makes the case for ad-skipping tech. Dish Network (NASDAQ:DISH) Chairman Charlie Ergen has defended the company's controversial Auto Hop ad-skipping feature as a "competitively necessary" response to the explosion of cheap/free Internet video. In a rare interview with the WSJ, Ergen added that unless broadcasters and advertisers evolve with the times, "they run the risk of linear TV becoming obsolete."

Companies not as rich as the Fed thought they were. That big pile of money companies have been storing? The Fed yesterday said it's half a trillion dollars smaller than thought. Before the revision, data showed that corporate cash accumulation reached a record $2.2T at the end of 2011. Now, it appears it grew rapidly through 2009 and then leveled off. Companies aren't spending their cash, but they aren't holding more of it either.

Top Economic & Other News
Asia rides the PBOC roller coaster. It was an ugly session in Asia following the PBOC rate cut as the headlines switched from "Stocks rise on PBOC" to "Stocks decline on PBOC," with traders worried Beijing is panicking. The aussie, which climbed on the heels of yesterday's announcement, reversed course to trade down to $0.9840 currently.

Bundesbank raises growth outlook; German trade declines. The Bundesbank has increased its German 2012 GDP forecast to +1% from +0.6% and its inflation outlook to +2.1% from +1.8%. The new predictions come despite data showing that German trade fell sharply in April, with exports -1.7% vs. expectations of -1% on weaker-than-expected European demand. Imports fell 4.8% vs. forecasts for the metric to remain flat.

While Europe suffers, Japan shows signs of health. Japan's GDP grew an annualized 4.7% in Q1, a notable increase from the preliminary estimate of 4.1%. Private demand was revised upward as the domestic economy responded to certain government incentives and post-earthquake reconstruction. Domestic demand is likely to remain on a recovery trajectory this year.

Today's Markets:
In Asia, Japan -2.1%. Hong Kong -0.9% . China -0.5%. India +0.4%.
In Europe, at midday, London -0.9%. Paris -1.1%. Frankfurt -0.8%.
Futures at 7:00: Dow -0.5%. S&P -0.6%. Nasdaq -0.5%. Crude -0.95% to $82.32. Gold -0.5% to $1579.40.

Today's economic calendar:
8:30 Trade Balance
10:00 Wholesale Trade