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
EU in rescue talks with Spain. The EU and Spain are discussing a rescue plan for the country that will allow the ECB to commence its bond-purchase operation and that could be unveiled next week, the FT reports. Brussels will "pre-approve" the program, helping to ease the political problem - due to the strings that may be attached - for Spanish PM Mariano Rajoy of requesting a bailout.

Oracle profit climbs 11%. Oracle's (NYSE:ORCL) FQ1 net profit increased 11% to $2.03B and adjusted EPS rose as expected to $0.53 from $0.48 - helped by a $3.1B stock buyback - but revenue slipped 2% to $8.18B and missed forecasts. The results added to worries about weakening IT spending and the company's ability to keep up with industry trends, particularly the shift to cloud computing. In addition, Oracle's hardware division continues to be ugly, with sales slumping 24%. Shares rose just 0.25% in after-hours trading.

GM, Canadian union forge new labor deal. GM (NYSE:GM) last night agreed on a tentative new four-year labor contract with the Canadian Auto Workers (CAW) after the union threatened a strike earlier in the day. The deal will "create or maintain" 1,750 jobs and calls for GM to spend C$675M ($692M) on its Canadian factories. The agreement came three days after Ford (NYSE:F) struck a new contract, leaving just Chrysler (FIATY.PK) without a union deal.

Top Stock News
EU clears Universal Music's purchase of EMI. The European Commission has approved Universal Music's (OTCPK:VIVEF) $1.9B acquisition of EMI's recorded music unit from Citigroup (NYSE:C) after Universal promised to sell a host of labels, including Chrysalis, Mute and the iconic Parlophone. However, Universal will be able to keep the rights to the Beatles, which are part of Parlophone's catalog.

iPhone 5 goes on sale. The iPhone 5 has gone on sale around the world with the usual frenzy and queues around the block despite the increasing criticism of the device's Map app. However, in France, a union representing 25% of Apple's (NASDAQ:AAPL) employees has voted to strike today after a breakdown in talks on pay and conditions.

Sharp shares rise despite denial of Intel speculation. Sharp (OTCPK:SHCAY) has denied reports that it is in talks with Intel (NASDAQ:INTC) over a possible capital tie-up involving a cash injection of more than $383M. Intel is looking to capitalize on Sharp's small-to-medium sized LCD panel technology, while for the Japanese company, the tie-up would provide much needed cash and a steady customer flow for that technology. Despite Sharp's denial, its shares rose 5% in Tokyo.

News Corp. could let James Murdoch oversee TV. News Corp. (NASDAQ:NWS) is reportedly considering handing James Murdoch oversight of Fox Networks, which includes Fox broadcast network and cable networks, although not Fox News. The speculation comes after a U.K. regulator slammed Murdoch for his conduct in the phone-hacking scandal. "If his last name wasn't Murdoch he wouldn’t be considered for this position," says Needham analyst Laura Martin.

Deutsche Bank could slash jobs in Germany. Deutsche Bank (NYSE:DB) may cut thousands of jobs in Germany, the Sueddeutsche Zeitung newspaper reports, with the bank set to eliminate 543 jobs in a first wave as it streamlines back-office services and its IT system. Deutsche Bank had announced 1,900 job losses in July but said that most of those would come from abroad.

Boeing gets $3.3B Dreamliner booking. Boeing (NYSE:BA) has won a $3.3B order for 11 787 Dreamliner jets from All Nippon Airways and will deliver the planes in 2018-2021. Separately, Boeing yesterday said it plans to outfit 747-8, 777 and 787 jets with equipment that will allow passengers to make mobile phone calls from the planes from next year - if the FAA agrees - and access WiFi from 2014.

Cnooc's acquisition of Nexen clears hurdles. A Canadian court has cleared Cnooc's (NYSE:CEO) proposed $15.1B purchase of Nexen (NXY), the state-owned Chinese company said today. Nexen's shareholders overwhelmingly approved the deal yesterday, although it now has to receive regulatory authorization in China, the U.S. and Canada, where a debate is taking place about how big a role foreign state-owned companies should have in the country.

Top Economic & Other News
California's "wall of debt" far bigger than feared. When California Governor Jerry Brown came into office last year, he said he found a "wall of debt" of $28B. That wall is actually a much bigger $167B-$335B, says the State Budget Crisis Task Force, which was co-founded by Paul Volcker. The task force includes lots of off-book items in its calculations such as pledges to provide pensions to public workers and healthcare for retirees, and $40B to improve drinking water.

Russia may limit grain exports. Russian Economy Minister Andrei Belousov has warned that the country may restrict grain exports - as it did in 2010 - if domestic prices increase too sharply. The government had previously said it wouldn't limit exports despite a drought that will cause output to fall to an estimated 72M-73M metric tons from a record 94.2M tons last year.

U.K. deficit hits August record. So much for austerity - the U.K.'s budget deficit widened to £14.41B in August from £14.37B in the same month last year. The latest figure is the highest for August since records began in 1993, and was caused by a 2.1% fall in corporate tax receipts and a 4.9% increase in benefit payments.

Greek bailout hopes hit by disagreements. Greek PM Antonis Samaras is meeting his Italian, Spanish and Irish counterparts in Rome today against a background of huge disagreement. Samaras and his coalition partners have so far been unable to agree on spending cuts demanded by the Troika, who themselves are in dispute over who will provide Greece with the extra financing that the country will probably need over and above its current bailout.

Editors' Picks
Apple: The iPhone 5 May Mark The End Of The Steve Jobs Era
Central Bank Groupthink
Electric Vehicles Are Still Not Ready For Prime Time

Today's Markets:
In Asia, Japan +0.3%. Hong Kong +0.7%. China +0.1%. India +2.2%.
In Europe, at midday, London -0.2%. Paris flat. Frankfurt +0.1%.
Futures at 7:00: Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.2% to $92.14. Gold +0.3% to $1775.90.

Today's economic calendar:
10:00 Mass Layoffs
12:40 PM Fed's Lockhart: U.S. Economic and Monetary Policy

Notable earnings before today's open: DRI, KBH

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