Frontrunning: August 28
- Merkel Blames SPD’s Schroeder for Letting Greece Into Euro (BBG)
- U.S. Bank Legal Bills Exceed $100 Billion (BBG)
- U.K. to Request U.N. Action to Protect Syrians From Chemical Weapons (WSJ) - and Russia to veto any decision
- U.N. inspectors in new Syria mission as West prepares to strike (Reuters)
- Emerging-Market Rout Intensifies on Syria Jitters (WSJ)
- Rebels Without a Leader Show Limit to U.S. Role in Syria War (BBG)
- Anger at IRS Powers Tea-Party Comeback (WSJ)
- China has much at risk but no reach in Middle East (Reuters)
- 'London Whale' Penalties Put at $500 Million to $600 Million (WSJ)
- U.S. lawmaker says 'compelling' evidence of Syrian chemical attack (Reuters)
- Fed's Yellen, Husband Worth Up to $13.2 Million in 2012 (WSJ)
- Switzerland Close to Resolving Undeclared U.S. Accounts (BBG)
- Son of Chinese general faces rape trial; raises anger over top families (Reuters)
- Jail Becomes Home for Husband Stuck With Lifetime Alimony (BBG)
Overnight Media Digest
* The most recent background check of former National Security Agency contractor Edward Snowden was so inadequate that too few people were interviewed and potential concerns weren't pursued, according to a federal review following his leak of some of the nation's most closely guarded secrets.
* Neiman Marcus Group Inc's owners, seeking a possible alternative to an initial public offering of stock they have been planning for the department-store chain, are asking potential bidders to submit takeover offers next week, people close to the situation said. KKR & Co LP, CVC Capital Partners Ltd and a team of Ares Management LLC and Canada Pension Plan Investment Board are circling Neiman, the people said.
* BlackBerry Ltd is considering spinning off its messaging service into a subsidiary that would operate with more independence, according to people familiar with the matter.
* A federal judge said on Tuesday that she plans to narrow the scope of the U.S. government's proposed oversight of Apple Inc after finding the technology company liable in July for fixing the prices of electronic books, saying she doesn't want to stifle its ability to be innovative.
* Wal-Mart Stores Inc told workers this week that it will begin offering health insurance benefits to the domestic partners of U.S. employees next year. The extension of health benefits marks a major change for the country's largest private employer of 1.3 million U.S. workers, which has been targeted by gay-rights advocacy groups for failing to do so.
* The U.S. government has used the merger-approval process to increase its influence over the telecom industry. The leverage has come from a series of increasingly restrictive security agreements between telecom companies and national-security agencies that are designed to head off threats to strategically significant networks, according to a review of the public documents and lawyers who have negotiated the agreements.
* Johnson & Johnson said it is making two changes in its senior leadership aimed at strengthening its presence in the increasingly important China market and at bolstering growth in its consumer segment. Jesse Wu, currently world-wide chairman of its consumer segment, will become chairman, Johnson & Johnson China. Lynn Pendergrass, who will come from Hewlett-Packard Co , will replace Wu at the troubled world-wide consumer division.
* Akorn Inc has agreed to buy Hi-Tech Pharmacal Co for $640 million in cash, a deal that allows the niche pharmaceutical company to diversify its retail offerings beyond ophthalmics.
* Amazon.com Inc announced on Tuesday that developers can allow physical goods from its website to be purchased through just about any Android app. That means users could buy an actual calendar to hang on their wall while using a calendar app, or spices from a recipe app.
* Las Vegas Sands Corp and federal prosecutors reached an agreement Tuesday to resolve a money-laundering investigation, according to the U.S. Attorney's office in Los Angeles.
U.S. authorities are pressing JPMorgan Chase & Co for at least $6 billion to settle lawsuits over mis-sold securities to government-backed mortgage companies in the run-up to the financial crisis, according to people familiar with the matter.
U.S. jeweller Tiffany & Co's raised its full-year earnings forecast on Tuesday after strong sales in China and higher prices pushed profits in the second quarter above analysts' estimates.
Nissan Motor Co Ltd said it would be ready to bring a fully self-driving car to market by 2020, challenging a range of carmaking rivals and industry newcomers such as Google Inc .
Chinese dairy company Liaoning Huishan Dairy Group will apply to the Hong Kong stock exchange on Thursday for an up to $1 billion initial public offering, according to people familiar with the plans.
The website of The New York Times experienced another outage on Tuesday afternoon, probably caused by a "malicious external attack", the company said.
UTV Media Plc's first-half revenue and profit fell as advertising revenue continued to decline but the Northern Irish broadcaster said it expects television and radio advertising to improve in the second half of the year.
* Merrill Lynch & Co Inc, one of the biggest brokerage firms on Wall Street, has agreed to pay $160 million to settle a racial bias lawsuit that wound through the federal courts for eight years, including two appeals to the United States Supreme Court.
* President Obama is considering military action against Syria that is intended to "deter and degrade" President Bashar al-Assad's government's ability to launch chemical weapons, but is not aimed at ousting Assad from power or forcing him to the negotiating table, administration officials said Tuesday.
* Weeks after the United States government charged Javier Martin-Artajo, a former JPMorgan Chase employee, with hiding trading losses that ultimately reached more than $6 billion, he had his first day in court on Tuesday as he surrendered to Spanish authorities and kicked off what could be a lengthy extradition process.
* Two federal regulators are preparing a series of enforcement actions and fines against JPMorgan Chase stemming from its dealings with consumers during the recession in the latest legal woes facing the nation's biggest bank.
* A pair of reports issued Tuesday offered bright news on the state of the economy, with home prices increasing and consumer confidence rising. Home prices rose 12.1 percent in June compared with a year earlier, nearly matching a seven-year high. However, month-over-month price gains slowed in most markets, a sign that higher mortgage rates may cool the housing recovery.
* The New York Times website was unavailable to readers on Tuesday afternoon after an online attack on the company's domain name registrar. The hacking was just the latest of a major media organization, with the Financial Times and the Washington Post also having their operations disrupted within the last few months. It was also the second time this month that the website of the New York Times was unavailable for several hours.
* The Vermont Yankee nuclear reactor, one of the oldest nuclear plants in the United States and the subject of heated battles over the decades, will close late next year, the company that owns it announced on Tuesday, less than two weeks after winning a protracted legal fight against the State of Vermont to keep it open.
THE GLOBE AND MAIL
* Prime Minister Stephen Harper is shuffling the ranks of his own office, turning to familiar faces as he tries to move past the Senate spending scandal and begin preparations for the 2015 federal election.
* Heavy rain has caused some flooding in downtown Toronto. Fire crews were on the scene Tuesday night, helping pedestrians and vehicles out of a flooded underpass on Lower Simcoe Street, radio station 680News reported.
* An inquest was told on Tuesday that a man who died in a hospital emergency room was ignored almost the entire 34 hours he was waiting for care, even when he threw up three times. Sergeant John O'Donovan said 150 people moved through the emergency room the weekend Brian Sinclair died, but he was the only one who didn't receive medical treatment.
Reports in the business section:
* BlackBerry Ltd is considering spinning off its messaging service into a separate unit, the Wall Street Journal said, quoting people familiar with the matter. The subsidiary would be called BBM Inc, the newspaper said.
* Oil and gas companies need to diversify their export markets because new discoveries south of the border will temper demand for Canadian energy, say the country's natural resources ministers.
* Bank of Nova Scotia handily beat earnings expectations in the third quarter, posting a $1.77-billion profit that was boosted by strong wealth management operations, resilient Canadian retail lending and an asset sale in its international division.
* A former Vancouver resident who is wanted in Canada for hate crimes has alarmed residents of a North Dakota community with his plans to turn the area into a haven for white supremacists.
* The father of an Arizona teenager whose body was found near his abandoned sport utility vehicle in the woods of southern Oregon said his son was "a young man who had a broken heart." The body of 18-year-old Johnathan Croom was found on Monday evening about 1,000 feet from where his vehicle was found abandoned last week, Douglas County sheriff's spokesman Dwes Hutson said.
* The Royal Canadian Mounted Police estimates about 50 contraband tobacco manufacturers are operating on First Nations territories in Ontario and Quebec, according to a briefing document sent to the federal public safety minister earlier this year.
* Travelers flying to or from Vancouver this weekend may face significant delays or even cancellations if almost 350 unionized airport workers go on strike this Friday. The union said the airport has tabled language that weakens apprenticeship provisions in the collective agreement, and wants to create a two-tier wage system by creating a new class of "seasonal" workers.
* Eventual removal by the U.S. Federal Reserve of its massive stimulus program should be seen positively, Bank of Canada Deputy Governor John Murray said on Tuesday, responding to critics who say it will cause damage around the world.
* McDonald's Holdings Co (Japan) Ltd replaced on Tuesday the president and chief executive of its operating company after its first-half sales and profits dropped as higher prices put off customers. Sarah Casanova, a Canadian who has worked in McDonald's Corp for 22 years, will take over from Eiko Harada.
* Long-time Bay Street disruptor Som Seif is finally making his full return to the investment community. After a quiet launch earlier this year, the pioneer of Canada's exchange-traded fund industry is rolling out a series of investment products aimed at taking hedge fund and other less-accessible strategies and making them available to the self-directed masses
SOUTH CHINA MORNING POST
-- Tenwow International, a Shanghai-based maker of packaged food and beverage products, started its pre-marketing campaign in a bid to raise about $200 million through a Hong Kong float next month.
-- State-controlled developer Greenland Group plans to focus on real estate projects in the Yangtze and Pearl river deltas over the next five years. It would also inject the best of its recent mainland projects into the listed company to help it achieve contract sales of 10 billion yuan ($1.63 billion) next year and 50 billion yuan by 2018.
-- CEF Holdings, a venture between Hong Kong tycoon Li Ka-shing's flagship company and Canadian Imperial Bank of Commerce (CIBC), is looking to invest in gold mining companies after a slump in prices created buying opportunities.
-- Developers, include New World Development Co Ltd and Cheung Kong Holdings Ltd, have begun competing for home buyers by offering steep price discounts on new properties, raising the prospect of an intensifying price competition as new projects come into the market.
HONG KONG ECONOMIC TIMES
-- Yanchang Petroleum International Ltd would fully acquire Novus Energy Inc, a Canada-based oil and gas company, for 500 million Canadian dollars ($475.94 million), according to market sources.
-- China CITIC Bank Corp proposed to raise as much as 37 billion yuan through a bond issue to replenish its capital adequacy ratio.
-- The Wharf (Holdings) Ltd is bidding for a highly coveted plot in Shanghai's Xujiahui neighbourhood, said deputy chairman and managing director Stephen Ng, adding that Wharf has sufficient funds for the bid. The site's base price is 17 billion yuan.
MING PAO DAILY NEWS
-- PICC Group Executive Director Li Liangwen said its joint venture with American International Group (AIG) is expected to launch early next year pending regulatory approval.
WEN WEI PO
-- Chinese developer Sunac China Holdings Ltd would launch 12 new residential projects in the second half and is confident of achieving a full-year sales target of 45 billion yuan, said Chief Financial Officer Huang Shuping.
Fly On The Wall 7:00 AM Market Snapshot
Statoil (STO) upgraded to Buy from Neutral at BofA/Merrill
Stifel Financial (SF) upgraded to Outperform from Market Perform at Raymond James
USG (USG) upgraded to Buy from Neutral at Longbow
AkzoNobel (AKZOY) downgraded to Underweight from Neutral at HSBC
DSW (DSW) downgraded to Sell from Hold at Brean Capital
Douglas Dynamics (PLOW) downgraded to Underperform from Neutral at Credit Suisse
TASER (TASR) downgraded to Neutral from Overweight at JPMorgan
Tiffany (TIF) downgraded to Neutral from Buy at Citigroup
ASML (ASML) initiated with an Outperform at Northland Securities
Applied Materials (AMAT) initiated with an Outperform at Northland Securities
Athlon Energy (ATHL) initiated with a Neutral at Citigroup
Brooks Automation (BRKS) initiated with an Outperform at Northland Securities
Cabot (CBT) initiated with a Neutral at SunTrust
Control4 (CTRL) initiated with a Buy at Canaccord
Drew Industries (DW) initiated with a Buy at Citigroup
Entegris (ENTG) initiated with a Market Perform at Northland Securities
KLA-Tencor (KLAC) initiated with a Market Perform at Northland Securities
Lam Research (LRCX) initiated with an Outperform at Northland Securities
Mattson Technology (MTSN) initiated with a Market Perform at Northland Securities
Taminco (TAM) initiated with an Equal Weight at Morgan Stanley
New York Times (NYT) said website hacked, CNBC reports
Apple (AAPL) e-books judge wants injunction to "rest lightly" on Apple's business, Bloomberg reports
Nissan (NSANY) targets 8% light commercial vehicle market share by end of FY16
Plains All American (PAA) proposedl to acquire public units of PAA Natural Gas Storage (PNG)
Joy Global (JOY) to repurchase $1B in shares of common stock
IHS Inc. (IHS) to resell John Wiley & Sons (JW.A) scientific and engineering titles
Simcere (SCR) entered into definitive merger agreement for going private transaction
Las Vegas Sands (LVS) to pay $47M to settle DOJ money-laundering probe, DJ reports
Arrow Electronics (ARW) to acquire Computerlinks for $300M
Companies that beat consensus earnings expectations last night and today include:
Joy Global (JOY), HEICO (HEI), Workday (WDAY), Avago (AVGO), TiVo (TIVO)
Companies that missed consensus earnings expectations include:
Frontline (FRO), Dycom (DY), AeroVironment (AVAV)
Companies that matched consensus earnings expectations include:
Accuray (ARAY), Wet Seal (WTSL)
- The U.S. government has used the merger-approval process to increase its influence over the telecom industry (SFTBF, S, TMUS, VOD, VZ, LVLT), bringing more companies under its oversight and gaining a say over activities as fundamental as equipment purchases, the Wall Street Journal reports
- Many large retailers still struggle to turn the Internet into a big part of their business. Their progress is on display in new correspondence between the SEC and a number of chains, including Target (TGT), Wal-Mart Stores (WMT), PetSmart (PETM) and Fifth & Pacific (FNP), the Wall Street Journal reports
- Billions of dollars in U.S. tax breaks prized by manufacturers, energy companies and other industries could be targeted for elimination when two powerful lawmakers, Democratic Senator Max Baucus and Republican Representative Dave Camp, are expected to introduce proposals as soon as next month to overhaul the U.S. tax system, Reuters reports
- As the natural gas industry struggles to cope with depressed prices, Chesapeake Energy (CHK) has begun shifting a much larger share of transportation and marketing costs to the owners of Pennsylvania land it leases. It’s taking much heavier deductions from royalty checks it sends landowners to help pay to gather, compress, market and transport natural gas, Reuters reports
- Bill Ackman’s Pershing Square Capital Management LP sold his J.C. Penney (JCP) stake for $504M, about half of what he paid for it, Bloomberg reports
- The six biggest U.S. banks, led by JPMorgan Chase (JPM) and Bank of America (BAC), have piled up $103B in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years. The sum tops the banks’ combined profit last year, Bloomberg reports
Envestnet (ENV) files to sell 4.8M shares of common stock
Becker Drapkin lowers stake in Tuesday Morning (TUES) to 6.7% from 9.0%
Invus Public Equities reports 6.2% passive stake in Sophiris Bio (SPHS)
Kohlberg Management reports 7.12% stake in BioScrip (BIOS)
Starboard Value raises stake in Tessera (TSRA) to 8.6% from 7.7%
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