- China carrier a show of force as Japan tension festers (Reuters)
- Draghi Rally Lets Skeptics Dump Spain for Bunds (Bloomberg)
- China’s Central Bank Injects Record Funds to Ease Cash Crunch (Bloomberg)
- Obama warns Iran on nuclear bid, containment ‘no option’ (Reuters)
- When Would Bernanke’s Successor Raise Rates? (WSJ) that’s easy – never
- Italy’s Monti Downplays Sovereignty Risk (WSJ)
- Portugal swaps pay cuts for tax rises (FT)
- Madrid faces regional funding backlash (FT)
- Berlin Seeks to Push Back New Euro-Crisis Aid Requests (WSJ)
- Race Focuses on Foreign Policy (WSJ)
- China Speeds Up Approvals of Foreigners’ Stock Investment (Bloomberg)
- As worst euro fears fade, U.S. fiscal cliff looms (Reuters)
- South Korea Delays Fiscal Balance to Boost Economy (WSJ)
Overnight Media Digest
* Foreign policy is taking on new urgency in the presidential campaign as President Barack Obama prepares to address the United Nations amid a resurgence of unrest in the Muslim world and his Republican challenger, Mitt Romney, intensifies his criticism of the White House’s approach to the region.
* Iranian President Mahmoud Ahmadinejad on Monday played down the prospects of an Israeli military strike on his country’s nuclear installations, but made clear that Tehran would hold the U.S. responsible if such an attack occurred.
* Syria’s crisis is deepening and threatening to spread to neighboring countries, the U.N.’s envoy to Syria told the Security Council on Monday, delivering his first report on reviving international diplomacy in the fractured country.
* American Airlines and its passengers are struggling with a rise in late and canceled flights spurred by pilot-initiated maintenance requests and a shortage of crew members amid a labor dispute.
* As Europe races to restore confidence in Spain’s finances and the euro, Germany has another reason for urgency in resolving the crisis: the health of its own banks.
* A growing number of companies are producing alternative measures of their top executives’ pay, seeking to persuade investors that compensation isn’t as high as the government’s yardstick implies.
* Two decades after a devastating banking crisis, Nordic banks are playing a new role: a safe haven for scared euro-zone depositors and investors.
* General Electric Co boss Jeff Immelt swore off significant acquisitions in 2012. But the year is nearly over, and the industrial giant may be working up an appetite again.
* Lennar Corp reported sharply higher fiscal-third-quarter earnings, helped by a tax benefit and stronger new-home deliveries and prices.
* The London interbank offered rate, or Libor, remains vulnerable to bank misconduct and should be replaced, Commodity Futures Trading Commission Chairman Gary Gensler said Monday.
* A former Intel Corp employee who said he was “deeply ashamed” of his insider trading avoided a prison sentence Monday for helping the government catch and prosecute Galleon Group hedge-fund founder Raj Rajaratnam.
* Companies that sell equipment and services to mining companies have geared up for a boom-just in time to see miners cut capital spending due to weak commodity prices.
* Lyor Cohen stepped down as head of Warner Music Group’s world-wide recorded-music operations, eight years after joining the company and just over a year after the installation of a new, budget-conscious boss.
* New Zealand is investigating allegations that its Government Communications Security Bureau acted unlawfully in connection with one of the largest criminal copyright cases.
TEMASEK RECONSIDERS STANCHART STAKE –
Singapore investment fund Temasek has sounded out potential buyers for its 6 billion pound ($9.72 billion) stake in Standard Chartered.
BUMI PLUNGES ON INDONESIA UNIT PROBE
Bumi, the coal mining group controlled by Indonesian investors, has begun an urgent investigation into allegations of financial and other irregularities.
‘DISCREDITED’ PFI ESCAPES WITH A MAKEOVER
George Osborne is facing awkward questions after a year-long search to replace the government’s unpopular private finance initiative has failed to deliver.
INVESTORS SHIFT TO FUNDS USING DERIVATIVES
Investors are piling into specialised stock market funds that use derivatives to boost returns, highlighting how many money managers are searching for new strategies.
FROTH GOES OFF ITALIAN CAPPUCCINO DEMAND
The siege on the euro zone’s coffee culture, emblematic of southern Europe, is contributing to a sharp drop in wholesale coffee prices.
FOXCONN CLOSES CHINA PLANT AFTER RIOT
Foxconn Technology Group suspended production at one of its largest factories in China on Monday following a riot by 2,000 workers.
CAMERON TALKS AMID UNEASE ON BAE PLAN
British prime minister David Cameron has spoken to the French and German leaders about the proposed merger of EADS and BAE Systems.
CABLE LASHES OUT AT TORY ‘HEADBANGERS’
British business minister Vince Cable unveiled a new British business bank on Monday, while lashing out at Conservative party “headbangers” for endorsing a hire and fire culture.
APPLE SELLS 5 MLN IPHONES ON DEBUT WEEKEND
Apple said on Monday that it had sold more than 5 million iPhones in the opening weekend for its latest smartphone.
WATCHDOGS BACKTRACK ON OIL REFORM
Global financial watchdogs have backtracked on proposals for greater regulation of the physical oil market due to opposition from oil majors and bodies.
* About 1,000 times a year, a plane or a vehicle moves onto an active runway by mistake, but U.S. regulators have been slow to address the problem.
* The images and video began to appear on Chinese social networking sites early Monday: buildings with shattered windows, overturned police cars, huge crowds of young people milling about in the dark and riot police in formation.
The online postings were from a disturbance late Sunday that shut down a manufacturing facility in Taiyuan in north China, where 79,000 workers were employed.
* Saying there are “troubling indications” of abuse in the way hospitals use electronic records to bill for Medicare and Medicaid reimbursement, the Obama administration warned on Monday that it would not tolerate what it called attempts to “game the system” and vowed to vigorously prosecute doctors and hospitals implicated in fraud.
* Greeks are increasingly angry over the prospect that public salaries and pensions will be sharply cut again in a last-ditch bid to secure a 31.5-billion-euro loan installment.
* Sheila Bair, who tormented Wall Street and its Washington allies as a banking regulator, is taking a fresh swipe at her foes in retelling the dark days of the financial crisis.
* More than a quarter of the work force in Spain or Greece is without jobs, but the city of Ingolstadt on the Danube north of Munich has the opposite problem: not enough workers.
* Christine Lagarde, the managing director of the International Monetary Fund, warned that it would probably cut its estimates of global growth yet again this year.
* Cosmetics company Estee Lauder plans to sell a skin care brand called Osiao that caters to the tastes of consumers in Asia.
* Despite a third day of vociferous criticism from the State Department, CNN executives on Monday strongly defended the decision to base some of their reporting about Libya on the private diary of Christopher Stevens, the ambassador who was slain in an attack on the United States consulate in Benghazi on Sept. 11.
* A former Intel Corp executive who leaked secret information about his employer to Raj Rajaratnam, the fallen hedge fund billionaire, avoided prison on Monday when a judge sentenced him to two years’ probation.
* Discover Financial Services has agreed to pay $200 million in refunds to more than 3.5 million cardholders who bought credit protection services over the phone, plus an additional $14 million in civil penalties to banking regulators.
The Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation jointly investigated Discover over deceptive telemarketing and sales practices, including misleading customers into thinking the services, like identity theft protection and credit score tracking, were free.
* Gary Gensler, chairman of the Commodity Futures Trading Commission, called for an overhaul of a crucial interest rate on Monday, telling the European Parliament that the integrity of consumer borrowing is at stake.
* TiVo Inc, the digital video recorder maker, said Monday that it would receive at least $250.4 million from Verizon Communications Inc in a patent lawsuit settlement.
THE GLOBE AND MAIL
* Canadian satellite operator Telesat Holdings Inc has been such a strong performer since BCE Inc sold the business in 2007, its current shareholders can’t agree on how to cash in.
* Two-tier wage deals like those inked recently by Ford Motor Co and General Motors Co are spreading across the U.S. border into Canada’s labour landscape again as companies struggle to compete with lower-cost global rivals.
Reports in the business section:
* The battle over tolls on a big natural gas pipelines has become a fight over the future of manufacturing products from energy in Alberta.
* Ottawa’s decision to share embassy space and resources with Britain, greeted with condemnation by opposition leaders on Monday, is in fact what some observers call a no-brainer: a logical way to expand Canada’s foreign presence without spending all the taxpayer dollars that go into bricks and mortar.
* With companies from India, Kuwait and China likely next in line to bulk up on Canadian oil and gas, foreign national oil companies (NOCs) are reaching deeper and deeper into Canada’s oilpatch, one of the last driven by the market.
Fly on the Wall 7:00 am Market Snapshot for 9/25
Approach Resources (AREX) upgraded to Overweight from Neutral at JPMorgan
Buffalo Wild Wings (BWLD) upgraded to Outperform from Sector Perform at RBC Capital
Safeway (SWY) upgraded to Outperform from Market Perform at BMO Capital
TiVo (TIVO) upgraded to Buy from Neutral at Lazard Capital
WNS Holdings (WNS) upgraded to Outperform from Market Perform at Wells Fargo
Abaxis (ABAX) downgraded to Market Perform from Outperform at Raymond James
Anixter (AXE) downgraded to Underperform from Neutral at Credit Suisse
Automatic Data Processing (ADP) downgraded to Neutral from Buy at UBS
CSG Systems (CSGS) downgraded to Neutral from Buy at Citigroup
Cognex (CGNX) downgraded to Underweight from Neutral at Piper Jaffray
GenOn Energy (GEN) downgraded to Neutral from Buy at Citigroup
Gevo (GEVO) downgraded to Hold from Buy at ThinkEquity
Marriott (MAR) downgraded to Market Perform from Outperform at Keefe Bruyette
Nokia (NOK) downgraded to Underperform from Market Perform at BMO Capital
Paychex (PAYX) downgraded to Neutral from Buy at UBS
Paychex (PAYX) downgraded to Sell from Neutral at Citigroup
Union Drilling (UDRL) downgraded to Market Perform from Outperform at BMO Capital
BNY Mellon (BK) initiated with a Buy at Citigroup
Cray (CRAY) initiated with a Hold at Wunderlich
Fusion-io (FIO) initiated with a Buy at Wunderlich
Genomic Health (GHDX) initiated with an Outperform at Credit Suisse
LeapFrog (LF) initiated with a Buy at SunTrust
Life Technologies (LIFE) initiated with an Outperform at William Blair
Lufkin (LUFK) initiated with a Neutral at JPMorgan
Myriad Genetics (MYGN) initiated with a Neutral at Credit Suisse
NVIDIA (NVDA) initiated with a Buy at Roth Capital
Northern Trust (NTRS) initiated with a Neutral at Citigroup
Pandora (P) initiated with a Reduce at Nomura
Sequenom (SQNM) initiated with an Underperform at Credit Suisse
State Street (STT) initiated with a Buy at Citigroup
Super Micro Computer (SMCI) initiated with a Buy at Wunderlich
Synergy Pharmaceuticals (SGYP) initiated with a Buy at Cantor
Tesla (TSLA) cuts 2012 revenue outlook, says DOE loan fully drawn down
SP ratings on Sony (SNE) lowered to BBB, off CreditWatch
Union Drilling (UDRL) to be acquired by Sidewinder Drilling for about $242M
Westlake Chemical (WLK) to expand ethylene capacity in 1Q13
Bridgepoint Education (BPI) eliminated 450 positions, reassigned other staff
Biofuel Energy (BIOF) idled Fairmont Minnesota ethanol facility indefinitely
Whitestone REIT (WSR) acquired Village Square at Dana Park for $50.5M
Companies that missed consensus earnings expectations include:
Red Hat (RHT)
Companies that matched consensus earnings expectations include:
As Europe moves to restore confidence in Spain’s finances and the euro, Germany has another reason to quickly resolve the crisis: the health of its own banks. German lenders have the most exposure in Europe to Spain, at $139.9B, of which $45.9B alone is exposure to banks, according to the Bank for International Settlements, the Wall Street Journal reports
GE (GE) CEO Immelt said there would be no significant acquisitions in 2012, but the company may be working up an appetite again. A company executive said they want to more than double the size of its new mining business to $5B in revenue by 2016, the Wall Street Journal reports
Sony Corp. (SNE) will likely approve a plan this week to invest $642M in troubled Olympus Corp. (OCPNY), becoming its largest shareholder with about a 10% stake, sources say, Reuters reports
Google (GOOG) began sale of its Nexus 7 tablet in Japan, as well as local language movies and books, in what has quickly become one of its major global markets for digital downloads, Reuters reports
Google (GOOG) Chairman Schmidt said it would be up to Apple (AAPL) to approve the company’s map application for Apple’s operating system after the iPhone maker’s own app was criticized by reviewers, Bloomberg reports.
Royal Bank of Scotland (RBS) managers condoned and participated in the manipulation of global interest rates, indicating that wrongdoing extended beyond the four traders the bank fired, Bloomberg reports
Demand Media (DMD) files $100M mixed securities shelf, 14M shares for holders
Enterprise Products (EPD) files to sell 8M common units for limited partners
Healthcare Realty Trust (HR) files to sell 8M shares of common stock
Neptune Technologies (NEPT) files to sell common stock, no amount given
New Mountain Finance (NMFC) files to sell 4M shares of common stock
PennantPark (PNNT) files to sell 9M shares of common stock
Tesla Motors (TSLA) files to sell 4.35M share of common stock
Highfields Capital reports 5.8% passive stake in Liberty Interactive (LINTA)
SAC Capital reports 5.0% passive stake in Magellan Health (MGLN)