- China’s Recovery Falters as Manufacturing Growth Cools (BBG)
- Gloomy eurozone output points to rate cut (FT)
- Limit Austerity, EU appartchik Barroso Says (WSJ)
- Regulators Get Banks to Rein In Bonus Pay (WSJ)
- SEC looks to ease rules for launching ETFs (Reuters)
- Easy come, easy go: U.S. Seizes $21 Million From Electric Car Maker Fisker (WSJ)
- Japan nationalists near disputed isles (Reuters)
- OECD in fresh warning on Japan debt (FT)
- S&P says more than one-third chance of Japan downgrade, cites risks to Abenomics (Reuters)
- Standard & Poor’s Urges Judge to Dismiss U.S. Ratings Fraud Suit (Bloomberg)
- Ex-HSBC man says US advised him to go to Spain (Swissinfo)
- Japan’s Gree Founder Loses $2.6B on Mobile Gaming Miss (BBG)
- CME Group "mistakenly" let some traders see secret swaps data (Reuters)
- Italy’s president warns of ‘fatal deadlock’ (FT)
- EU agrees mortgage law to avoid more housing bubbles (Reuters)
- Obama Budget Spreads the Tax Pain (WSJ)
Overnight Media Summary
* CBOE Holdings Inc, the parent of the Chicago Board Options Exchange,
is considering whether to separate its regulatory division after an
ongoing federal probe over potential conflicts of interest.
* S&P asked a judge to throw out the Justice Department's lawsuit against the company, deepening the battle over who bears responsibility for billions of dollars in losses suffered by investors during the financial crisis.
* The Securities and Exchange Commission (SEC) picked two former federal prosecutors to share the job of enforcement chief for the first time in the agency's 79 year history.
Mary Jo White, the SEC's new chairman, said one of her former lieutenants, Andrew Ceresney of law firm Debevoise & Plimpton LLP, will join acting SEC enforcement chief George Canellos as co-director of the more-than-1,200-employee division.
* For nearly five years, Ralph Lauren Corp employees plied Argentine customs officials with dresses, perfume and cash to accelerate the passage of merchandise into the South American country, according to U.S. authorities, who said the company will pay $1.6 million to resolve related investigations.
* Wal-Mart Stores plans to base some executive compensation this year on whether the retailer successfully overhauls its compliance operations, a process it began last year amid a prove of bribery allegations in Mexico.
* Sprint Nextel said its board has formed a special committee to evaluate a $25.5 billion acquisition offer from Dish Network Corp.
* Bowing to regulators' concerns about the size of executive pay, seven large U.S. financial services firms are scaling back the maximum bonuses awarded to executives who beat their performance targets.
Financial services firms, including PNC Financial Services Group, Capital One Financial Corp and Discover Financial Services Inc said they are scaling back the maximum bonuses awarded to executives who beat their performance targets, according to regulatory filings.
BB&T Corp, KeyCorp, U.S. Bancorp and SunTrust Banks Inc are the other U.S. firms that cut their maximum performance-based bonuses recently, according to a study set to be released as early as Tuesday by pay-consulting firm Compensation Advisory Partners.
Indoneasia-focussed coal miner Bumi has suspended its shares until after it is able to publish its -- indefinitely delayed -- 2012 annual results. Salaries doubled to at least $120,000 for Walmart Stores directors who worked on an investigation into the bribery allegations in Mexico.
Though Betfair rejected CVC Capital Partners' 910-million-pound ($1.39 billion) buyout offer, the private equity firm plans to continue its talks with the online gambling company's shareholders. A volatile legal battle begins between Deutsche Bank AG and Norwegian billionaire Alexander Vik, who is claiming $8 billion worth of damages for losses incurred at the height of the financial crisis.
Swiss engineering company ABB is to buy U.S. solar energy company Power-One for $1.03 billion, hoping that growing emerging market demand will counter the uncertainty of an industry in which western firms have been struggling.
With a view to cutting its public debt, the British government said it would sell its one-third share in Urenco -- a deal that could go for as much as 3 billion pounds.
Caterpillar, the world's largest maker of construction and mining equipment, reported a 45 percent decline in first-quarter earnings and cut its full-year outlook.
Reckitt Benckiser Group, the maker of Nurofen and Strepsils, reported 7 percent first-quarter revenue growth, driven by a worse-than-normal flu season.
* Regulators in Germany, one of the most privacy sensitive countries in the world, unleashed their wrath on Google on Monday for scooping up sensitive personal information in the Street View mapping project, and imposed the largest fine ever assessed by European regulators over a privacy violation.
* Legislation to help states force online retailers to collect sales taxes easily cleared its first procedural hurdle on Monday evening, and even its fiercest opponents are looking to the House for a last stand. The Senate voted 74-20 to take up the legislation for debate and amendment.
* Standard Poor's, accused of inflating its ratings to win business during the boom in mortgage investments, urged a judge on Monday to dismiss the federal government's civil case against it, saying the Justice Department had built a faulty complaint on "isolated snippets" of conversations rather than evidence of real wrongdoing.
* Flights were delayed by up to two hours across the U.S. on Monday, the first weekday that the nation's air traffic control system operated with 10 percent fewer controllers. Pilots, gate agents and others were quick to blame furloughs caused by mandatory across-the-board budget cuts, but the Federal Aviation Administration said it was too soon to tell.
* Twitter continued its march into the advertising world with the news on Monday that the social media company had signed a deal with one of the largest advertising agencies in the world, the Starcom MediaVest Group, part of Publicis Groupe .
THE GLOBE AND MAIL
* A tip from a Toronto imam sparked an investigation that culminated in the arrests of two men who allegedly plotted to derail a Via passenger train, what the Royal Canadian Mounted Police on Monday called the first ever Canadian bust of an alleged al-Qaeda terrorist plot.
* A professional engineer faces charges under health and safety laws in connection with last summer's deadly mall collapse in a northern Ontario town, the province's Ministry of Labor announced Monday.
* The amount that the federal government will have to pay to First Nations, Inuit and Métis people who were abused at church run residential schools is expected to swell to over C$4 billion ($3.90 billion).
Reports in the business section:
* Rogers Communications Inc, Canada's largest wireless carrier, reported first-quarter results late Monday that showed more of its customers are upgrading to smartphones, which is generating higher data revenues as users access Internet-based services.
* Air Canada is moving toward a cheaper form of financing, new to Canadian airlines, in order to purchase long-haul Boeing 777 jets worth hundreds of millions of dollars.
To explore this and other debt options, however, the airline had to make the unusual move Monday of publicly releasing a preview of its quarterly earnings, as required by securities laws.
* After Toronto councillors ordered up a policy blocking city money from the Toronto Pride Parade if it includes the group "Queers Against Israeli Apartheid," city staff have reiterated their claim that City Hall's hands are tied on the issue.
* The Alberta Securities Commission is accusing the former CEO of Daylight Energy Ltd of insider trading, along his ex-wife and her boyfriend. The watchdog alleges Anthony Lambert bought shares in Daylight in August and September 2011 shortly before his company was acquired by Chinese firm Sinopec.
* Canadian National Railway Co reported a drop in first quarter earnings Monday after a harsh winter hampered its operations in Western Canada.
CHINA SECURITIES JOURNAL
- New ship orders rebounded nationwide in the first quarter and were up more than 70 percent from a year earlier, according to China Association of the National Shipbuilding Industry.
- Profits in China's 70 fund companies hit around 70 billion yuan ($11.32 billion) in the first quarter, rising 83 percent against the same period in 2012.
SHANGHAI SECURITIES NEWS
- Food, beverage and medicine stocks are the pick of the moment, according to first quarter data from 70 Chinese funds. While overall assets under management were relatively stable, many funds chose to cut back on financial, real-estate and hard-hit baijiu stocks.
- China's courts handled 83,850 civil lawsuits over intellectual property rights in 2012, up 44.1 percent year-on-year, according to a white paper from the country's top court.
Fly On The Wall 7:00 AM Market Snapshot
Bank of America (BAC) upgraded to Overweight from Equal Weight at Morgan Stanley
Caterpillar (CAT) upgraded to Overweight from Neutral at JPMorgan
Chubb (CB) upgraded to Market Perform from Underperform at William Blair
Columbia Banking (COLB) upgraded to Buy from Hold at Wunderlich
Community Health (CYH) upgraded to Outperform from Neutral at RW Baird
DiamondRock (DRH) upgraded to Outperform from Neutral at RW Baird
Ecopetrol (EC) upgraded to Neutral from Sell at Citigroup
Informatica (INFA) upgraded to Neutral from Underperform at Credit Suisse
Invesco (IVZ) upgraded to Overweight from Neutral at JPMorgan
Lennar (LEN) upgraded to Overweight from Equal Weight at Barclays
Meritage Homes (MTH) upgraded to Overweight from Equal Weight at Barclays
Morgan Stanley (MS) upgraded to Buy from Neutral at SunTrust
PulteGroup (PHM) upgraded to Overweight from Equal Weight at Barclays
Ryland Group (RYL) upgraded to Equal Weight from Underweight at Barclays
Toll Brothers (TOL) upgraded to Overweight from Underweight at Barclays
Veeco (VECO) upgraded to Outperform from Perform at Oppenheimer
Bankrate (RATE) downgraded to Sell from Neutral at Goldman
Compass Minerals (CMP) downgraded to Underperform from Market Perform at BMO Capital
Oil States (OIS) downgraded to Sector Perform from Outperform at RBC Capital
Sallie Mae (SLM) downgraded to Equal Weight from Overweight at Evercore
Sempra Energy (SRE) downgraded to Neutral from Buy at ISI Group
Western Union (WU) downgraded to Neutral from Buy at Citigroup
Yum! Brands (YUM) downgraded to Underperform from Buy at BofA/Merrill
Aruba Networks (ARUN) initiated with a Neutral at BofA/Merrill
CapLease (LSE) initiated with a Buy at MLV Equity
First Industrial Realty (FR) initiated with a Buy at MLV Equity
Ross Stores (ROST) initiated with an Outperform at Cowen
TJX (TJX) initiated with an Outperform at Cowen
Terreno Realty (TRNO) initiated with a Buy at MLV Equity
W. R. Berkley (WRB) initiated with a Neutral at Compass Point
TEAK Midstream to be acquired by Atlas Pipeline Partners (APL) for $1B
Judge approved settlement between DOJ, AB InBev (BUD), Grupo Modelo (GPMCY) and Constellation (STZ)
ITC ruled in favor of Apple (AAPL), finds Motorola (GOOG) patent not infringed
British Airways (BAIRY) placed order for 18 Airbus A350s (EADSY, RYCEY)
Burger King Worldwide (BKW) sold subsidiary Burger King Restaurants of Canada, including 94 company-owned restaurants, to Redberry Investments
Blackstone (BX) acquired Credit Suisse's (CS) Strategic Partners unit
DuPont (DD) sees 1H operating EPS about 7%-9% lower than prior year
Said cost productivity gains, savings on track to meet or exceed targets
Texas Instruments (TXN) said customers “maintaining lean inventory levels”
Noble Energy (NBL) announced two-for-one stock split
Mead Johnson (MJN) said Journal of Pediatrics study shows benefits of Nutramigen
Companies that beat consensus earnings expectations last night and today include:
Encana (ECA), DuPont (DD), Centene (CNC), Orbital Sciences (ORB), Crane (CR), IDEX Corp. (IEX), Texas Instruments (TXN), Zions Bancorp (ZION), Swift Transportation (SWFT), Illumina (ILMN)
Companies that missed consensus earnings expectations include:
BBCN Bank (BBCN), NBT Bancorp (NBTB), Access National (ANCX), Rent-A-Center (RCII)
Companies that matched consensus earnings expectations include:
Air Products (APD), Wilshire Bancorp (WIBC), Trustco Bank (TRST)
- Apple (AAPL) is facing an identity crisis on Wall Street. Investor concern is rooted in how Wall Street is treating and valuing the company as a traditional hardware maker. One group of analysts and some investors said there is strong evidence that Apple should be viewed in a different light: as a software-hardware hybrid, the Wall Street Journal reports
- The parent of the Chicago Board Option Exchange (CBOE) is considering whether to separate out its regulatory division in the wake of a continuing federal investigation into potential conflicts of interest, sources say, the Wall Street Journal reports
- Boeing (BA) began installing reinforced lithium-ion battery systems on five 787 jets in Japan, starting a process that should make the first commercial Dreamliners ready to fly again in about a week, Reuters reports
- Israeli translation software provider Babylon signed a four year cooperation agreement with Yahoo (YHOO) in the Internet sector, including on mobile devices, Reuters reports
- The EU intensified its campaign against the Fed’s proposals to toughen oversight of bank units belonging to overseas lenders, warning of “potential retaliation” against the plans because they will escalate up costs, Bloomberg reports
- More than half of the 29 U.S. states with laws requiring utilities to buy renewable energy are considering ways to cut back those mandates after a decline in natural gas prices (DUK, PCG, XOM, BTU, VWS,FSLR) brought on by technology that boosted supply, Bloomberg reports
BioTime (BTX) files to sell common stock and warrants for holders
Clovis Oncology (CLVS) files to sell $200M of common stock
iBio (IBIO) files to sell common stock and common stock purchase warrants