- The Department of Justice has opened an initial probe into the metals warehousing industry (WSJ)
- Obama Says Budget Debate a Battle for Middle Class Future (BBG)
- Death Toll From Spanish Train Crash Hits 77 (WSJ)
- ‘Fabulous Fab’ takes to witness stand (FT)
- Banks Said to Weigh Suspending Dealings With SAC as Charges Loom (BBG) - what about Anthony Scaramucci?
- How the Muslim Brotherhood lost Egypt (Reuters)
- German Business Confidence Rises for a Third Month (BBG)
- Fraternities Lobby for Tax Break Without Hazing Penalties (BBG)
- China charges Bo Xilai with corruption, paves way for trial (Reuters)
- Airbus Pushes Higher-Density A380 to Counter Luxury Image (BBG)
- E*Trade Seeking Exit From Market-Making Unit (BBG)
Overnight Media Digest
* The success of the new health-care law rides in large measure on whether young, healthy people like Gabe Meiffren, a cook at a Korean-Hawaiian food cart, decide to give up a chunk of disposable income to pay for insurance.
* The race to become the next leader of the Federal Reserve looks increasingly like a contest between two economists: Lawrence Summers and Janet Yellen.
* President Barack Obama delivered a long and impassioned plea for a change in the Washington economic debate, away from arguments over budgets to a focus on the long-term condition of the middle class.
* Facebook swung to a profit as its sales rose 53 percent to $1.81 billion. Much of Facebook's growth in the quarter came from its local efforts. The social network surpassed 1 million active advertisers, propelled by gains in local business advertising.
* The group trying to take Dell Inc private is pressing the company to change how it counts shareholder votes to improve the odds of its buyout winning approval, and has offered to increase its bid by less than 1 percent as an incentive.
* Ford Motor Co's 19 percent rise in profit on zooming sales shows how demand for new cars has emerged as a rare bright spot in the murky global economy.
* Allegations of widespread bribery in GlaxoSmithKline Plc's China operations made this month by Chinese authorities and separately in January by an anonymous tipster who contacted the company touched on some of the same alleged irregularities. But Glaxo has responded very differently to its two accusers.
* GlaxoSmithKline PLC has agreed to pay $229 million to settle lawsuits in which several U.S. states accused the drug maker of deceptively marketing the diabetes treatment Avandia.
* House lawmakers on Wednesday defeated an attempt to drastically curb a national-security program that collects the phone records of millions of Americans, after a tense debate on the balance between privacy rights and government efforts to find terrorists.
* Officials are pushing landowners to clear brush and take other protective measures amid a devastating fire season. However, fire officials say persuading landowners to take preventive measures hasn't been an easy sell. Many homeowners enjoy the look of vegetation, even if it's flammable, and appreciate the privacy it affords.
* The federal judge handling Detroit's bankruptcy case gave a preliminary victory Wednesday to the city's emergency manager, ruling that municipal unions and others couldn't go to state court to litigate their grievances with the city's bid to shed its retiree obligations.
Facebook Inc reported a much better-than-anticipated surge revenue and profit in the second quarter on Wednesday, igniting a 20 percent share rally in after hours trading.
Barclays Plc is close to reaching a deal with regulators to comply with a new leverage requirement by Dec. 2014 and a confirmation is expected along with its annual results next Tuesday, people familiar with the negotiations said.
Dell Inc founder Michael Dell raised his $24.4 billion bid by $150 million and added a controversial demand to relax the shareholder voting rules to make it easier for him to buy and take the No. 3 personal computer maker private.
Britain and China have agreed but not yet signed a legal assistance treaty to facilitate the sharing of information between the countries on criminal investigations, according to people familiar with the situation.
Shares of Qualcomm Inc rose nearly 5 percent after the leading mobile chipmaker posted third-quarter revenue above Wall Street expectations, helped by a stronger-than-expected demand for chips that power high-end smartphones and tablets.
Mexican billionaire Carlos Slim, who controls a near 30 percent stake in Dutch group KPN via his telecoms company America Movil, did not vote for Telefónica's 8.1 billion euro bid to buy KPN's E-Plus, seeking a better price for the German unit, a person familiar with the situation said.
* Fabrice Tourre, the former Goldman Sachs trader, was questioned by a Securities and Exchange Commission attorney over what could be a critical misstatement in an email regarding a trade.
* Customers of social networking giant Facebook continue to shift toward mobile phones and tablets to gain access to the site instead of a PC.
* A grand jury was said to have voted this week to approve an indictment of SAC Capital Advisors, the boldest case yet from the top federal prosecutor in Manhattan, Preet Bharara.
* After years of trying to pin criminal charges on the billionaire Steven Cohen, the authorities came together on a more unusual plan: indict Cohen's hedge fund itself. Criminal charges might devastate SAC because the banks that trade with the hedge fund and finance its operations could abandon it.
* Louisiana officials filed a lawsuit on Wednesday against dozens of energy companies, hoping that the courts will force them to pay for decades of damage to fragile coastal wetlands that help buffer the effects of hurricanes on the region.
* Michael Dell has increased his takeover bid for the computer company by 7 percent, to $13.75 a share, and a shareholder vote has been moved for a second time, to August 2.
* Now that the Northeast Passage is reliably open to commercial shipping, Russian energy companies are planning to ship directly to customers in China.
* Dell Inc was presented with a twist on the practice of corporations moving overseas to take advantage of lower taxes but thought it would create image problems.
* A planned $175 million public offering of SFX Entertainment seeks to take advantage of the popularity of electronic dance music, but the numbers behind the scenes should give investors pause.
* The Leap Motion Controller promises to let you control your computer with hand motions, and the hardware does that, but its software is scattershot, inconsistent and frustrating. If you have a desktop computer, you put the sensor between your screen and keyboard. If it's a laptop, you park it on the desk just in front of the keyboard. Soon, Leap says, you'll be able to buy a PC from HP or Asus that has the sensor built right in.
THE GLOBE AND MAIL
* U.S.-based company Montreal, Maine & Atlantic, whose train derailed in Lac-Megantic, Quebec, regularly left loaded trains unsupervised on the main line so it could use the more secure siding as a storage space for a local manufacturer's unused rail cars.
* Two women who allege they were physically and sexually abused by former Vancouver Olympics Chief Executive John Furlong when he was a physical education teacher decades ago have filed lawsuits against him.
Reports in the business section:
* Canada's largest wireless carriers are ratcheting up their criticism of the federal government's wireless strategy, arguing that Ottawa needs to rethink both the rules for an upcoming auction of spectrum licenses and its policy on incumbents acquiring struggling start-up players.
* BlackBerry Ltd in Waterloo, Ontario, has laid off 250 workers in its new product testing facility, CTV News reported Wednesday night.
* China's leaders are positioning the country for a new era of lower, single-digit growth led more by consumer spending. That reshuffles the lineup of suppliers to the world's second-largest economy and appears set to push Canadian commodities producers to the margins.
* Crombie Real Estate Investment Trust is paying $990 million for 68 properties that are currently anchored by Canada Safeway stores, a deal that has been anticipated since the recent marriage of Sobeys Inc and Canada Safeway Ltd and that is expected to have a significant impact on the real estate investment trust.
* Canadian Pacific Railway Ltd management has come out swinging against concerns the company is sacrificing safety in its breakneck effort to improve efficiency and financial performance by slashing jobs even as it transports increasing amounts of industrial goods such as oil by rail.
* No doubt it was pure coincidence that Transport Canada issued a raft of "emergency" changes to rail safety regulations on the same day as the Commons Transport committee was scheduled to meet. Otherwise one might be tempted to conclude the only "emergency" was the political imperative of having something on the table before committee members sat down.
* Canadian diplomats mounted a behind-the-scenes push to convince European countries to outlaw the Lebanese Shi'ite group Hezbollah as a terrorist organization, a government official said in an interview Wednesday.
* An Ontario mayor is warning politicians to think before they tweet after a post by Green Party leader Elizabeth May set social media ablaze with fears that there had been a major train derailment in his town.
* After a turbulent spring of blossoming political scandals, the summer break has been kind to Prime Minister Stephen Harper's Conservatives as a new poll shows the current ruling party on track to win another election and support for the Liberals slipping.
* Grocery chain operator Empire Co Ltd announced a plan Wednesday to sell 68 Safeway properties in a sale-leaseback deal with Crombie Real Estate Investment Trust for $990 million in cash.
* Toronto-based gold miner Agnico Eagle announced it is implementing a major round of cost reductions and spending cuts as it reported a surprising loss in the second quarter.
* Shares of International Tower Hill Mines Ltd plummeted 54 percent after the gold miner's $2.8 billion Livengood gold project in Alaska was deemed unviable at current prices.
* The credibility of Bombardier Inc took another hit on Wednesday as the Montreal plane manufacturer announced a third delay to the first flight of its CSeries, once again just days before it was set to occur.
* Canada's largest natural gas producer Encana Corp is not ruling out a corporate sale or merger as Chief Executive Doug Suttles looks to set a new course for the company.
SOUTH CHINA MORNING POST
-- The offshore yuan centre in London will benefit from improved Sino-British relations and an international interbank payment system that China is expected to launch next year, said Mark Boleat, policy chairman of the City of London Corporation. (link.reuters.com/duk89t)
-- Hong Kong supermarket chain ParknShop will not be sold at present, said Malina Ngai, a top executive at A S Watson Group, parent of ParknShop, adding that strategic reviews like the one it was conducting at the supermarket chain were periodically done in its stores worldwide. (link.reuters.com/huk89t)
-- China Resources (Holdings), the parent of China Resources Power Holdings Co Ltd, whose management has been accused by mainland newspapers of having intentionally overpaid for a coal asset acquisition in 2010, has revealed in a letter to staff that the National Audit Office has been monitoring the group since May and continues to conduct an audit at CR's request.
-- Emperor Watch and Jewellery Ltd has rented a 1,500-square-foot ground-floor shop in Causeway Bay for HK$3.5 million ($451,200) a month. This is its third shop in the same district. (link.reuters.com/fuk89t)
-- Chinese Estates Holdings Ltd chairman Joseph Lau is set to pocket HK$2.15 billion in payouts as net interim profit at the developer hit HK$4.47 billion. (link.reuters.com/guk89t)
WEN WEI PO
-- Hong Kong Exchanges and Clearing Ltd said it will start trading CES China 120 Index futures from August 12, as it continues to expand its suite of Mainland China-related products.
-- China Aoyuan Property Group Ltd said it has acquired 80 percent interest in a commercial and residential project in Yangjiang city, Guangdong province, for 212.8 million yuan ($34.68 million).
Fly On The Wall 7:00 AM Market Snapshot
BE Aerospace (BEAV) upgraded to Outperform from Market Perform at Cowen
Bed Bath & Beyond (BBBY) upgraded to Outperform from Perform at Oppenheimer
Delta Air Lines (DAL) upgraded to Equal Weight from Underweight at Evercore
Delta Air Lines (DAL) upgraded to Outperform from Market Perform at Raymond James
Equinix (EQIX) upgraded to Buy from Neutral at Citigroup
Facebook (FB) upgraded to Neutral from Sell at BTIG
Facebook (FB) upgraded to Outperform from Market Perform at JMP Securities
Facebook (FB) upgraded to Overweight from Equal Weight at Evercore
Hanesbrands (HBI) upgraded to Buy from Neutral at ISI Group
Northrop Grumman (NOC) upgraded to Neutral from Underperform at BofA/Merrill
TrueBlue (TBI) upgraded to Outperform from Market Perform at BMO Capital
ZELTIQ Aesthetics (ZLTQ) upgraded to Outperform from Market Perform at William Blair
Allegheny Technologies (ATI) downgraded to Neutral from Buy at Davenport
AmerisourceBergen (ABC) downgraded to Outperform from Strong Buy at Raymond James
Avago (AVGO) downgraded to Neutral from Buy at Citigroup
Caterpillar (CAT) downgraded to Market Perform from Outperform at BMO Capital
Community Bank System (CBU) downgraded to Outperform at Raymond James
Crocs (CROX) downgraded to Neutral from Buy at Goldman
FMC Technologies (FTI) downgraded to Market Perform from Outperform at Raymond James
Fifth Third (FITB) downgraded to Market Perform from Outperform at Wells Fargo
First BanCorp (FBP) downgraded to Neutral from Buy at Guggenheim
Ford (F) downgraded to Sector Perform from Outperform at RBC Capital
IBERIABANK (IBKC) downgraded to Market Perform from Outperform at Raymond James
MagnaChip (MX) downgraded to Neutral from Buy at Citigroup
Oritani Financial (ORIT) downgraded to Market Perform at Keefe Bruyette
Prosperity Bancshares (PB) downgraded to Neutral from Outperform at RW Baird
Qualcomm (QCOM) downgraded to Neutral from Buy at Citigroup
RockTenn (RKT) downgraded to Hold from Buy at Deutsche Bank
Sequenom (SQNM) downgraded to Market Perform from Outperform at William Blair
Sequenom (SQNM) downgraded to Neutral from Buy at Lazard Capital
Texas Capital (TCBI) downgraded to Neutral from Buy at SunTrust
Tractor Supply (TSCO) downgraded to Neutral from Overweight at Piper Jaffray
Wellpoint (WLP) downgraded to Neutral from Buy at Citigroup
Perrigo (PRG), Forest Labs (FRX) preparing bids for Elan (ELN), Reuters reports
GlaxoSmithKline (GSK) to pay $229M to settle Avandia suits, DJ reports
Baker Hughes (BHI) disclosed DOJ antitrust probe on fracking
PulteGroup (PHM) said U.S. housing market gained momentum, on track to recovery
Visa (V) sees FY13 EPS growth in the low twenties; sees FY13 revenue annual net revenue growth about 13%
Qualcomm (QCOM) raised FY13 guidance
Cabot Oil & Gas (COG) declared two-for-one stock split and regular cash dividend
Teva (TEVA) and Lonza announced decision to discontinue biologics joint venture
Warner Chilcott's (WCRX) oral contraceptive received FDA approval
Companies that beat consensus earnings expectations last night and today include:
Dunkin' Brands (DNKN), Starwood Hotels (HOT), D.R. Horton (DHI), Diamond Offshore (DO), W.R. Grace (GRA), O'Reilly Automotive (ORLY), Teradyne (TER), American Railcar (ARII), CoreLogic (CLGX), Susquehanna (SUSQ), Horace Mann (HMN), Flowserve (FLS), Owens-Illinois (OI), Ameriprise (AMP), Visa (V), Facebook (FB), Las Vegas Sands (LVS)
Companies that missed consensus earnings expectations include:
Ashland (ASH), Colfax (CFX), Cash America (CSH), Calpine (CPN), Safeguard Scientifics (SFE), Potash (POT), ITC Holdings (ITC), Raymond James (RJF), Kaiser Aluminum (KALU), Service Corp. (SCI), Clearwater Paper (CLW), Fortune Brands (FBHS)
Companies that matched consensus earnings expectations include:
Precision Drilling (PDS), Hill-Rom (HRC), Ethan Allen (ETH), Morningstar (MORN), Akamai (AKAM), Forrester (FORR), Qualcomm (QCOM)
- The race to become the next leader of the Federal Reserve looks increasingly like a contest between two economists: Lawrence Summers and Janet Yellen, the Wall Street Journal reports
- The Justice Department opened an initial probe into the metals warehousing industry, sources say, amid growing concern in Washington over banks' ownership of metals warehouses and other commodity assets, the Wall Street Journal reports
- CKE Inc. (CK), the restaurant group that operates the Carl's Jr and Hardees fast food chains, is exploring a potential sale after postponing its IPO last year, sources say. The Apollo Global Management-backed (APO) company is working with Goldman Sachs (GS) to run a sale process that could value the company at over $1.7B, Reuters reports
- South Korea said today it would hold a new round of bidding next month for its $7.43B purchase of 60 next generation fighter jets, suspended after bids exceeded the budget (LMT, BA, EADSY), Reuters reports
- Wall Street banks, including Deutsche Bank (DB) and Goldman Sachs (GS), are debating whether to suspend doing business with SAC Capital Advisors LP if the hedge fund is charged by U.S. prosecutors, sources say, Bloomberg reports
- WellPoint (WLP) said more small employers are scaling back benefits this year, and at a faster pace, a potential hedge against higher costs expected under the U.S. health-care law, Bloomberg reports
Boise Cascade (BCC) 10M share Secondary priced at $27.00
Celluar Dynamics (ICEL) 3.846M share IPO priced at $12.00
Onconova Therapeutics (ONTX) 5.2M share IPO priced at $15.00
PetroLogistics (PDH) files to sell 85.67M common units for limited partners
WCI Communities (WCIC) 6.819M share IPO priced at $15.00