- Risk of instability hangs over Italy poll (FT), Protest votes add to uncertainty in close Italy election (Reuters), and... Risk On
- Czech inspectors find horsemeat in IKEA meatballs (Reuters)
- China’s Slower Manufacturing Casts Shadow Over Recovery (Bloomberg)
- So much for reform: China Prepares for Government Shuffle as Zhou Stays at PBOC (Bloomberg)
- France to pause austerity, cut spending next year instead: Hollande (Reuters)
- Sinopec to buy stake in Chesapeake assets for $1.02 billion (Reuters)
- White House warns states of looming pain from March 1 budget cuts (Reuters)
- China Quietly Invests Reserves in U.K. Properties (WSJ)
- Osborne Keeps Austerity as Investors See Downgrade as Late (BBG)
- South Korea's new president demands North drop nuclear ambitions (Reuters)
- Russia accuses U.S. of double standards over Syria (Reuters)
- Currency battle looms for Scotland (FT)
Overnight Media Digest
* U.S. Congressional leaders are quietly considering a deal to avert a government shutdown next month - but at the cost of prolonging across-the-board spending cuts. Congress must pass a so-called continuing resolution by the end of March to keep funding government operations.
* The U.S. Justice Department packed its fraud lawsuit against Standard & Poor's with details about more than 25 employees who allegedly put triple-A ratings on shaky bundles of subprime mortgages - or dithered on downgrading the securities as the housing market was collapsing.
* Japanese Prime Minister Shinzo Abe plans to nominate Asian Development Bank head Haruhiko Kuroda as the next governor of the Bank of Japan.
* Royal Bank of Scotland Group Plc, is expected this week to discuss selling up to 25 percent of its American arm, RBS Citizens, to the public within the next two years. That would set up RBS to eventually spin off the entire unit, said people briefed on the plans.
* Brokerage firm Knight Capital Group Inc plans to sell a bond-trading unit to Stifel Financial Corp, according to people familiar with the matter.
* Futures exchange CME Group Inc is set for a legal showdown with the Commodity Futures Trading Commission, a standoff that market experts say could become a regular event as new financial-market laws come into force.
* Barnes & Noble Inc's chairman and biggest shareholder, Leonard Riggio, has expressed interest in buying out the retailer's consumer-bookstore chain, raising the prospect that the company could be split in two, say people familiar with the situation.
* Hewlett-Packard Co Chairman Ray Lane and three fellow board members plan to meet with about 20 of the computer maker's big investors Monday in hopes of heading off a campaign to unseat Lane and two other directors.
* Office Depot Inc said it received an offer earlier this month from its partner in Mexico to buy the office-supply company out of their joint venture. But Office Depot instead pushed forward with a merger with rival OfficeMax Inc and said it would now need that company's approval before making a decision about the Mexican unit.
George Osborne is under pressure from both sides of the coalition to change the government's economic plans after the loss of the UK's triple-A credit rating.
An independent Scotland will be able to keep the pound, the UK government will argue next month - but only if Scottish ministers accept budget constraints set by London.
Nick Clegg has been drawn into allegations of sexual harassment in the Liberal Democrat party after admitting that his office was told in 2008 of concerns about their former election chief.
Italians began voting in parliamentary elections on Sunday in a return to direct democracy after 15 months of austerity under Mario Monti's appointed technocratic government.
Royal Bank of Scotland is set to announce a plan to float part of its U.S. business as the lender looks for ways to raise capital and restructure ahead of eventual reprivatisation.
Rafael Costa, a former GLG partner, will this week unveil the first fund at his new firm Tyndaris.
Royal Bank of Scotland will make an additional multimillion-pound payment to investment banks that handled the listing of Direct Line.
Eighteen of the world's largest mobile operators have backed a new mobile operating system from Mozilla Firefox.
Britain is set to benefit from a surge of investment of up to 100 billion pounds ($153 billion) in the development of North Sea oil and gas assets.
Several alternative mobile operating systems will for the first time take centre stage at the Mobile World Congress in Barcelona this week, a trade show where the attention is normally on the latest phone.
Siemens will speed up efforts to exit or cut its stake in its telecom equipment joint venture with Nokia
* The day before a trial against oil company BP Plc, regarding the explosion of a drilling rig in the Gulf of Mexico, the details of an offer made by U.S. federal and state officials started to emerge. The plan, worth a total of $16 billion, would limit the fines paid by BP under the Clean Water Act to $6 billion, said a source who was briefed on the plan.
* Barnes & Noble, the largest book chain in the United States, warned that third-quarter losses in its Nook Media e-book division would be greater than the year before and that the unit's revenue for all of fiscal 2013 would be far below projections it gave of $3 billion.
* James Woolery, co-head of North American mergers and acquisitions at JPMorgan Chase & Co, will join the Cadwalader, Wickersham & Taft law firm as deputy chairman and leave Chris Ventresca as sole head of the JPMorgan unit.
* Affymax Inc and Takeda Pharmaceutical Co Ltd , which jointly marketed a new drug to treat anemia in patients undergoing kidney dialysis, have recalled the product after reports that it had caused severe allergic reactions, including some that were fatal.
* Hewlett-Packard Co has introduced the Slate 7, a $169 tablet powered by the Android operating system, a centerpiece of the company's effort to expand in mobile devices and reduce its dependence on the shrinking personal computer market.
* Chancellor Angela Merkel of Germany arrived in Turkey on Sunday for talks with Prime Minister Recep Tayyip Erdogan, holding out hope for new impetus in the stalled negotiations for the country to join the European Union.
* Paul McIlhenny, the chairman and chief executive of the family-owned McIlhenny Company, which makes Tabasco pepper sauce, died of heart attack on Saturday
THE GLOBE AND MAIL
* Ontario is taking steps to privatize the operation of its lucrative lottery business in hopes that the move, which would be a first among Canadian provinces, will rake in even more revenue to support public finances.
* Canada will feel the sting if U.S. Congress fails this week to avert what's known as sequestration, an array of massive, mandated spending cuts to a host of federal departments and agencies aimed at slashing America's $16 trillion national debt.
Reports in the business section:
* A hostile takeover bid for Inmet Mining Corp is looking ever more likely to succeed as the deadline approaches for shareholders to vote on the C$5.1 billion ($4.98 billion)offer, as the odds of a counter-bid ebb along with softening copper prices.
* Canadian composer Mychael Danna took home the best original score trophy for his work on Life of Pi at Sunday night's Academy awards. Jim Erickson, who did not attend the ceremony, won an award for best production design for his work on Lincoln, while Guillaume Rocheron won for best visual effects, also for Life of Pi.
CHINA SECURITIES JOURNAL
-- China's Gross Domestic Product (GDP) is expected to reach 8.23 percent in 2013, according to a forecast made jointly by a research institution at Xiamen University and the economic information office at the official Xinhua news agency.
-- Some Chinese local governments, especially those of major cities, are studying concrete property tightening steps after the State Council said the cabinet intends to extend a pilot property tax programme to more cities in a continuation of the China's property tightening policy in place since April 2010.
SHANGHAI SECURITIES NEWS
-- China's property tightening policy will last for a while, but that policy also supports programmes of affordable houses, which will benefit China Vanke Co Ltd, the country's top property developer, said its chairman Wang Shi.
-- Shanghai Transport and Port Authority said it would study measures to control the steep rise in car plate prices in the city, which jumped 8,239 yuan from January to a record high of 83,571 yuan in February. Some major Chinese cities auction car plates as a measure to curb quick expansion of vehicles on road.
-- China should take steps to strengthen implementation of laws, said Vice President Xi Jinping.
Fly on the Wall 7:00 AM Market Snapshot
AB InBev (BUD) upgraded to Neutral from Reduce at Nomura
Atlas Energy (ATLS) upgraded to Outperform from Neutral at RW Baird
Cummins (CMI) upgraded to Conviction Buy from Buy at Goldman
International Paper (IP) upgraded to Overweight from Neutral at JPMorgan
Nordson (NDSN) upgraded to Outperform from Market Perform at BMO Capital
Pan American Silver (PAAS) upgraded to Buy from Hold at Canaccord
Perrigo (PRGO) upgraded to Buy from Neutral at UBS
RockTenn (RKT) upgraded to Overweight from Neutral at JPMorgan
Rockwood (ROC) upgraded to Overweight from Equal Weight at First Analysis
Safeway (SWY) upgraded to Neutral from Underperform at BofA/Merrill
Southwestern Energy (SWN) upgraded to Conviction Buy from Buy at Goldman
Total System (TSS) upgraded to Outperform from Market Perform at Raymond James
VMware (VMW) upgraded to Neutral from Sell at Citigroup
Venaxis (APPY) upgraded to Buy from Hold at Canaccord
WebMD (WBMD) upgraded to Strong Buy from Market Perform at Raymond James
Abaxis (ABAX) downgraded to Underperform from Neutral at BofA/Merrill
Aeropostale (ARO) downgraded to Hold from Buy at KeyBanc
Affymax (AFFY) downgraded to Neutral from Outperform at RW Baird
Affymax (AFFY) downgraded to Neutral from Overweight at Piper Jaffray
Affymax (AFFY) downgraded to Underperform from Outperform at JMP Securities
Ascena Retail (ASNA) downgraded to Hold from Buy at KeyBanc
Berry Petroleum (BRY) downgraded to Neutral from Positive at Susquehanna
Endo Health (ENDP) downgraded to Underweight from Neutral at Piper Jaffray
GulfMark Offshore (GLF) downgraded to Buy from Strong Buy at ISI Group
NV Energy (NVE) downgraded to Hold from Buy at Wunderlich
Noble Energy (NBL) downgraded to Buy from Conviction Buy at Goldman
SM Energy (SM) downgraded to Market Perform from Outperform at BMO Capital
Tidewater (TDW) downgraded to Neutral from Buy at ISI Group
Constellation Brands (STZ) initiated with a Buy at SunTrust
Eaton (ETN) initiated with an Outperform at Credit Suisse
TRI Pointe Homes (TPH) initiated with a Buy at Deutsche Bank
TRI Pointe Homes (TPH) initiated with an Outperform at FBR Capital
Microsoft (MSFT) reported security intrusion
Royalty Pharma proposed to buy Elan (ELN) for $11 per share
Barnes & Noble (BKS) Chairman Riggio proposed to buy company's retail assets
AT&T (T) to provide 4G LTE network for GM's (GM) OnStar, terms not disclosed
ITT Educational (ESI) disclosed SEC subpoena over agreements, accounting
Quest Diagnostics (DGX) sold HemoCue business to Radometer (DHR) for $300M
Ericsson (ERIC), Telstra announced renewal of strategic partnership
Hewlett-Packard (HPQ) unveiled Android (GOOG) consumer tablet
AT&T (T) and CWA reached tentative agreement in Mobility contract talks
Affymax (AFFY) and Takeda (TKPYY) recalled Omontys in U.S after serious reactions
Herbalife (HLF) announced voluntary recall of Meal Nutritional Shake
Companies that beat consensus earnings expectations last night and today include:
Hertz Global (HTZ), Lowe's (LOW)
Companies that missed consensus earnings expectations include:
Hyperion Therapeutics (HPTX),Thompson Creek (TC), Global Geophysical (GGS)
Companies that matched consensus earnings expectations include:
TGC Industries (TGE)
- J.C. Penney (JCP) CEO Ron Johnson has seen sales fall by double-digits. By the end of 2012, analysts were warning the company could run short on cash. Penney's stock finished last year down more than 40%. Johnson was viewed as something of a savior when he was hired from Apple in 2011 but sources say he ignored conventional industry wisdom and moved too abruptly to impose practices inspired by his time at Apple. On Wednesday Penney reports results for the all important holiday quarter, the Wall Street Journal reports
- An uptick in the housing market and rising consumer confidence resulted in another month of strong U.S. car and pickup sales that will be evident on Friday when automakers post their February sales. Over 1.2M new vehicles were estimated to have been sold in the month, a 4.3% increase over a year earlier and a 15% increase over January, the Wall Street Journal reports
- Apple (AAPL) faces new competition in India from BlackBerry (BBRY) and is now aggressively pushing the iPhone through installment payment plans that make it more affordable, a new distribution model and a heavy marketing blitz. The new-found interest there suggests a subtle strategy shift for Apple, which has moved tentatively in emerging markets, Reuters reports
- Yum Brands (YUM) will step up its monitoring of suppliers and improve testing of poultry as it looks to reverse a steep drop in business at its KFC restaurants in China after a chicken safety scare, Reuters reports
- U.S. banks want to capitalize on a dearth of financing for Europe’s commercial property market that’s driven lending margins to five times the level prior to the 2008 crisis. Citigroup (C), Morgan Stanley (MS), Bank of America (BAC) and Wells Fargo (WFC) are following insurers and distressed investors allocating capital to the region as local banks, which overextended during the last boom, are forced to contract amid new regulations, Bloomberg reports
- As the bond market expects inflation to stay at about the past decade’s average, the biggest buyers of government debt say they need protection from rising consumer prices as central banks focus on growth. Pacific Investment Management Co. and Invesco (IVZ) say growing central-bank tolerance of inflation means securities with interest or principal tied to consumer prices are the ones to own, Bloomberg reports
Dell's (DELL) results show that Michael Dell's bid is too low
Suncor (SU), Canadian Natural (CNQ) could benefit from Keystone XL
Corrections Corp. (CXW) could see steady growth, 6% dividend yield
Dick's Sporting Goods (DKS) could hit $60 this year
ADT Corp. (ADT) shares could rise 20% over the next year
Coach (COH) could be a better deal than Michael Kors (KORS)
Global Power Equipment (GLPW) shares could rally on large order backlog
Samsung (SSNLF), Apple (AAPL) account for all smartphone profits
Renewable Energy (REGI) files $120M mixed securities shelf; 4.7M shares for holders