- U.S. Regulator Subpoenas Banks Over Long Warehouse Queues (BBG)
- Apple Said to Prepare Holiday Refresh of IPhones to IPads (BBG)
- Fed’s Yellen Says Stance on Banks Hardened (WSJ)
- Mexico opens up its energy sector (FT)
- Spin: Greek GDP marks gradual deceleration of recession (FT) … spin aside, it dropped 4.6%, and in reality, probably over 10%
- Made-in-Canada Solution For BlackBerry Avoids Nortel Fate (BBG)
- America’s Farm-Labor Pool Is Graying (WSJ)
- Video of ‘lame’ cattle stirs new concern over growth drugs (Reuters)
- Paulson Bid for Steinway Trumps Kohlberg Offer (WSJ)
- Egyptian government yet to decide on pro-Mursi vigils (Reuters)
- Gene Breakthroughs Spark a Revolution in Cancer Treatment (WSJ)
Overnight Media Digest
* Janet Yellen, a top contender to lead the U.S. Federal Reserve, has evolved in her own words from a slightly “docile” regional bank regulator, into a proponent of hard and clear rules designed to make banks less risky. While some bankers overseen by Yellen describe her as a determined regulator, critics note that she had a front row seat for some of the turbulence that sent the economy into a tailspin and could have done more to prevent rampant real estate speculation.
* Mexico moved to end the country’s 75 year-old monopoly on oil and gas production, potentially opening up some of the world’s biggest remaining untapped oil reserves to private companies and setting the stage for a new energy boom on the U.S. doorstep.
* BlackBerry Ltd has formed a board committee to consider options including a sale of the company, as the smartphone pioneer struggles to turn around a market-share slide despite recently launching new devices.
* Blackstone Group LP has agreed to buy majority stakes in about 80 apartment complexes from the financing arm of General Electric Co in a deal that values the portfolio at $2.7 billion. The apartment buildings, with roughly 30,000 units, are in Dallas, Atlanta and other parts of Texas and the Southeast.
* The Public Company Accounting Oversight Board, the government’s audit industry regulator, is pushing the accounting industry to disclose more about its views on a company, which some say will make annual audit reports more useful. Regulators and industry critics say investors need more information from auditors about matters such as whether a company’s accounting is aggressive, and what auditors think are the most important features of a company’s finances.
* The looming merger of AMR Corp’s American Airlines and US Airways Group Inc could lift fares at some of the combined carrier’s hub cities, if past mergers are an indication. But reduced competition doesn’t always boost ticket prices.
* Chesapeake Energy Corp’s new chief executive shook up the natural gas giant’s top ranks on Monday, saying four senior executives would leave, including longtime chief operating officer Steve Dixon, who served as interim CEO earlier this year.
* New York Times Co Chairman Arthur Sulzberger Jr. sold 50,000 shares in the company, according to a filing with the Securities and Exchange Commission, in a deal just one day after the Ochs-Sulzberger family declared the company’s namesake newspaper was “not for sale.”
Struggling Canadian handset maker BlackBerry put itself up for sale as part of a wider strategic review in a desperate attempt to survive in the competitive smartphone market.
U.S. commodities watchdog has subpoenaed Goldman Sachs, JPMorgan Chase and Glencore as an inquiry into complaints about inflated metals prices gathers pace.
A growing number of U.S. companies, after completing acquisitions in Europe, are looking to relocate to the continent in a bid to save hundreds of millions of dollars in taxes.
U.S. tomato soup maker Campbell Soup is in exclusive talks to sell its soup and sauce brands in continental Europe to private equity investor CVC Capital Partners.
Thames Water, UK’s biggest supplier of water and sewerage services by customers, has asked the industry regulator to increase its charges by almost 30 pounds for each household.
Mexico’s plans to open up its energy sector could attract billions of dollars in investments from oil companies struggling to find new resources elsewhere.
* Co-founder of PayPal and electric car company Tesla Motors Elon Musk unveiled on Monday plans for a project that seemed the stuff of science fiction. The hypothetical project is called the Hyperloop, a high-speed train that would be able to take people to San Francisco from Los Angeles in 30 minutes. That’s a speed of almost 800 miles an hour. He estimated the project would cost around $6 billion and tickets would cost $20 per trip.
* Hospitals across the nation are being swept up in the biggest wave of mergers since the 1990s, a development that is creating giant hospital systems that could one day dominate American health care and drive up costs. Hospital executives say they have little choice but to combine. Many hospitals are struggling with lower payments from the federal government and declining patient admissions. They are also being confronted with changes in how they are paid under President Obama’s signature Affordable Care Act and by private insurers.
* Goldman Sachs Group Inc has been subpoenaed by the Commodity Futures Trading Commission, investigating complaints that the financial giant’s metals warehouses have intentionally created delays and inflated the price of aluminum.
* BlackBerry Ltd indicated on Monday that it was seriously weighing a potential sale of itself. But it is not clear that anyone will want to pay up. Analysts and industry executives said that a sale of the entire smartphone maker was increasingly unlikely, and almost certainly at least a year too late.
* The New York attorney general Eric Schneiderman sued Western Sky Financial and its affiliates that claim connections to American Indian tribes – ties that the lenders have argued immunize them from federal and state laws. The online lender offers short-term loans at interest rates of more than 300 percent, the latest warning shot in a sweeping battle by state authorities to enforce local interest rate caps.
* Hobbled by a criminal indictment, SAC Capital Advisors, once the envy of Wall Street for its investment returns, has shuttered one of its stock trading units, Parameter Capital Management, the latest setback for the once powerful hedge fund run by the billionaire Steven Cohen.
* The private equity firm CVC Capital Partners is in talks to buy the Campbell Soup Co’s operations in France, Germany, Sweden and Belgium. Campbell Soup will retain its businesses in Britain and Denmark.
* Dole Food Co Inc’s Chief Executive, David Murdock, has agreed to buy full control of the fruit and vegetable producer, valuing the company at about $1.6 billion, including debt.
THE GLOBE AND MAIL
* Canada’s refugee board is likely to look favorably on claims of persecution by gay asylum-seekers from Russia, Immigration Minister Chris Alexander said. Alexander said on Monday that Russia had taken the wrong path in restricting the fundamental rights of its gay community, and that any refugee claims “related to this particular issue will of course be looked at very seriously by our very generous system”.
Reports in the business section:
* When BlackBerry Ltd launched its long awaited new smartphone back in January, it was presented as a game changer that would silence critics and win back consumers. Monday’s announcement that the company is pursuing “strategic alternatives” for its future, including a possible sale, is a tacit admission that its turnaround plan isn’t working.
* A rush of foreign investment in Mexican oil production in the wake of Mexico’s energy reforms threatens to fuel competition against Canada in the race to supply the U.S. Gulf Coast market with crude. Government reforms would allow private ownership of oil, creating opportunity for the Canadian service sector but also injecting more competition for producers.
* Under pressure to protect its profitable credit card business, Canadian Imperial Bank of Commerce is negotiating to split its lucrative Aeroplan portfolio with Toronto-Dominion Bank, hoping to stave off a battle with rival banks looking to steal clients.
* Senator Pamela Wallin struck a defiant tone, calling an independent audit of nearly four years of travel claims “fundamentally flawed and unfair”, but said she will repay any disallowed expenses, with interest. Wallin said the accounting firm used more recently established rules governing Senate travel and expenses to assess the validity of earlier claims. Sources say the audit recommends she pay back C$121,000 ($117,500)in travel costs, and that an additional C$21,000 worth of claims be more closely examined.
* Little more than six months after the government first unveiled a list of so-called “safe” countries considered to be unlikely producers of refugees, the number of asylum claims has dropped dramatically. Canada received half as many asylum claims in the first half of this year as it did during the same period last year – 4,558 compared to 10,375.
* With BlackBerry Ltd putting itself up for sale and its single largest shareholder, Fairfax Financial CEO Prem Watsa, resigning from the company’s board of directors on Monday, a Canadian-led takeover is now one of many possibilities for the mobile computing pioneer.
* Wireless stocks such as BCE Inc, Rogers Communications Inc and Telus Corp are pricing in a greater than 50 percent chance that Verizon Communications Inc enters Canada and becomes the country’s fourth major wireless operator, according to RBC Capital Markets.
* More than 700,000 barrels per day (bpd) of new rail terminal oil capacity is expected to be built by 2015, rivaling the 850,000 bpd being proposed by TransCanada Corp for the Keystone XL pipeline, according to an Arc Financial Corp report. Gibson Energy Inc, Altex Energy Ltd and Tundra Energy Marketing Ltd have set up joint ventures with rail operators and producers to build new terminals and transport landlocked Western Canadian crude to markets across North America.
– China’s oversupply of cement has reached an uncontrollable level as companies, focused on profits, continue to produce, said Chen Guoqing, vice-chairman of the China Building Materials Federation. He added that if production continues at the same pace the industry could face a disaster.
– Extreme heat in China, where temperatures soared to 42 degrees Celsius in some provinces, is damaging millions of hectares of crops, according to official data.
– An industrial alliance of 12 Chinese rare earth firms plans to sue Japan’s Hitachi Metals Ltd for allegedly using invalid patents and infringing their patent rights. Sun Baoyu, who is leading the coalition, said that the situation had restricted exports of China’s alloys.
– The Chinese Medical Doctor Association, an NGO representing physicians in China, has called for a blacklist system and life bans from practice for doctors who have seriously violated medical ethics, following cases of baby trafficking and bribe-taking from pharmaceutical companies.
– There were 442,000 foreign-invested enterprises in China at the end of July, an increase of 0.26 percent from the month before, according to statistics provided by the State Administration of Industry and Commerce on Monday.
Credicorp (BAP) upgraded to Overweight from Neutral at JPMorgan
Connecticut Water (CTWS) upgraded to Outperform from Neutral at RW Baird
CubeSmart (CUBE) upgraded to Neutral from Sell at UBS
Extra Space Storage (EXR) upgraded to Neutral from Sell at UBS
Marvell (MRVL) upgraded to Top Pick from Outperform at RBC Capital
Public Storage (PSA) upgraded to Neutral from Sell at UBS
Rockwell Collins (COL) upgraded to Buy from Neutral at Sterne Agee
Sovran Self Storage (SSS) upgraded to Neutral from Sell at UBS
Xerox (XRX) upgraded to Buy from Neutral at Citigroup
Allot (ALLT) downgraded to Sector Perform from Outperform at RBC Capital
Fifth Third Bancorp (FITB) downgraded to Neutral from Outperform at Credit Suisse
Microsoft (MSFT) downgraded to Hold from Buy at Stifel
Nordic American Tanker (NAT) downgraded to Market Perform from Outperform at Cowen
Nordic American Tanker (NAT) downgraded to Underperform from Hold at Jefferies
Smith & Nephew (SNN) downgraded to Neutral from Buy at Citigroup
Ultra Petroleum (UPL) downgraded to Underperform from Hold at Jefferies
Vical (VICL) downgraded to Neutral from Outperform at Credit Suisse
athenahealth (ATHN) downgraded to Market Perform from Outperform at Cowen
Blackstone (BX) initiated with an Outperform at RBC Capital
Diamond Resorts (DRII) initiated with a Buy at Cantor
Diamond Resorts (DRII) initiated with an Outperform at Credit Suisse
Diamond Resorts (DRII) initiated with an Overweight at JPMorgan
Physicians Realty Trust (DOC) initiated with a Buy at Wunderlich
RetailMeNot (SALE) initiated with a Buy at Jefferies
RetailMeNot (SALE) initiated with a Neutral at Credit Suisse
RetailMeNot (SALE) initiated with a Neutral at Goldman
RetailMeNot (SALE) initiated with a Sector Perform at RBC Capital
Rexford Industrial (REXR) initiated with an Outperform at FBR Capital
Rexford Industrial (REXR) initiated with an Outperform at Wells Fargo
Rexford Industrial (REXR) initiated with an Overweight at JPMorgan
Sequential Brands (SQBG) initiated with a Buy at Brean Capital
XOMA (XOMA) initiated with an Overweight at Piper Jaffray
J.C. Penney (JCP) said Ackman resigned from board, reaffirmed support for CEO
Whirlpool (WHR) to acquire 51% of Hefei Rongshida Sanyo Electric for $552M
DG (DGIT) to sell television ad delivery business for $485M
Arthur J. Gallagher (AJG) acquired Bollinger for about $276.5M
Glenview secures approval to replace Health Management (HMA) board
Avanir Pharmaceuticals (AVNR) entered co-promotion agreement with Merck (MRK)
Visteon (VC) to sell 50% stake in Chinese joint venture
GlaxoSmithKline (GSK) received FDA approval for HIV treatment
Granite Real Estate (GRP) acquired European portfolio for EUR 129M
FTC required Pinnacle (PNK) to sell two casino properties for Ameristar (ASCA) merger
A.M. Best placed ratings of Tower Group (TWGP) subsidiaries under review
Tower Group (TWGO) to delay filing 10-Q
Accretive Health (AH) filed to delay 10-Q
Companies that beat consensus earnings expectations last night and today include:
Flowers Foods (FLO), Northern Tier (NTI), SINA (SINA), StarTek (SRT), WuXi PharmaTech (WX), NQ Mobile (NQ), Engility Holdings (EGL), Spirit AeroSystems (SPR)
Companies that missed consensus earnings expectations include:
Taminco (TAM), Intercept (ICPT), InterOil (IOC), USA Compression (USAC), Fortuna Silver Mines (FSM), American Apparel (APP), IAMGOLD (IAG), Biodel (BIOD)
Companies that matched consensus earnings expectations include:
- Janet Yellen, a leading contender to head the Federal Reserve, has evolved, in her own words, from a slightly “docile” regional bank regulator into a proponent of hard and clear rules designed to make banks less risky, the Wall Street Journal reports
- New York Times Co. (NYT) Chairman Arthur Sulzberger Jr. sold 50,000 shares in the company, according to an SEC filing, in a deal just one day after the Ochs-Sulzberger family declared the company’s namesake newspaper was “not for sale,” the Wall Street Journal reports
- Barclays (BCS) is conducting a strategic review of its retail banking operations in the United Arab Emirates which could lead to a sale of the business, sources say, Reuters reports
- Mexican President Enrique Pena Nieto has proposed an overhaul of Mexico’s energy industry (BP, XOM, CVX) to offer private companies profit-sharing contracts, but investors said it might be too cautious and some sold Mexican assets, Reuters reports
- Samsung Electronics (SSNLF) may not get the sort of presidential reprieve Apple (AAPL) won earlier this month from an order limiting U.S. imports of some smartphones and tablet computers. Samsung can’t make the public-policy arguments Apple used, according to lawyers and analysts, Bloomberg reports
- BlackBerry’s (BBRY) decision to consider takeover offers is fueling speculation that investors could band together to keep the company in Canadian hands, avoiding the national embarrassment that followed Nortel Networks Corp.’s failure four years ago, Bloomberg reports
Access Midstream (ACMP) files to sell 8M shares for holder
First BanCorp (FBP) 28M share Secondary priced at $6.75
GenMark (GNMK) files to sell $60M in common stock
Laredo Petroleum (LPI) 16M share Secondary priced at $23.75
Rose Rock Midstream (RRMS) files to sell 4.75M common units for limited partners
The Medicines Co. (MDCO) files to sell 5.5M shares of common stock
Viacom (VIA) announces $3B debt offering
WageWorks (WAGE) files to sell 2.97M and 7.236M shares for holders
[VIA Zero Hedge]