• Two-Thirds of Insurance Exchange Enrollees Paid Premiums (WSJ)
• Panic: Criminal Charges Against Banks Risk Sparking Crisis (BBG)
• Did the junk bubble pop: Junk Loans Pulled as Investors Say No After Fed Raises Concerns (BBG)
• CME mulls price fluctuation limits for gold, silver futures (Reuters)
• AT&T Has Approached DirecTV About Possible Acquisition (WSJ)
• NBA sets wheels turning for Clippers sale; Oprah in wings (Reuters)
• One way to fix prison overcrowding: Florida Jail Hit by Deadly Blast (WSJ)
• New Boeing jets hold key to more than half of future sales (Reuters)
• Sony slashes profit estimate by 70% (Guardian)
• Buffett Pressures Coca-Cola Over Executive Pay (WSJ)
• Two attackers among three killed in China bombing (Reuters)
• Ukraine's restive east slipping from government's grasp (Reuters)
• Hess, Mercuria Units Added to Brent Crude Price-Fixing Lawsuit (BBG)

Overnight Media Digest

WSJ

* AT&T has approached DirecTV about a possible acquisition of the satellite-TV firm, the latest sign of a possible shake-up in the television industry. A deal would likely be worth at least $40 billion, DirecTV's current market capitalization, a fraction of AT&T's $185 billion market capitalization. (http://r.reuters.com/qad98v)

* The Federal Reserve said Wednesday it would reduce its bond purchases to $45 billion a month and it was starting to see a growth pickup in recent weeks after a harsh winter that hit the U.S. economy. (http://r.reuters.com/ded98v)

* The Coca-Cola Co likely will revise its executive-compensation plan before it goes into effect next year, bowing to pressure from billionaire investor Warren Buffet. The potential changes come as a surprise after voting shareholders approved Coke's plan last week-and Buffett declined to vote against it. (http://r.reuters.com/fed98v)

* U.S. prosecutors are threatening to use what bank executives consider a nuclear option by filing criminal charges against two large foreign banks. Officials led by the Justice Department, though, are still trying to find a way to defuse the most catastrophic possible outcome of filing criminal charges: driving the banks out of business entirely. (http://r.reuters.com/ged98v)

* Alstom Chairman and Chief Executive Patrick Kron defied France's government by plunging ahead with plans to sell the country's industrial jewels to U.S.-based General Electric . France's economy minister portrayed the move as an act of national betrayal. (http://r.reuters.com/ped98v)

* The Federal Aviation Administration granted Boeing Co's request that the new 777 jetliner to be approved without a lengthy full recertification. (http://r.reuters.com/ked98v)

* Anheuser-Busch InBev NV's union workers Wednesday ratified a five-year contract that calls for wage increases and no plant closings, officials with the International Brotherhood of Teamsters said in a statement posted on the union's website. The contract, which union officials said would add some $2 billion in wages and benefits, is retroactive to March 1. It was the first contract Anheuser-Busch negotiated since its 2008 hostile-bid acquisition by InBev NV. (http://r.reuters.com/hed98v)

* Online-storage startup Box is delaying its plans for an initial public offering after a sudden weakening in demand for technology stocks. Box's March 24 IPO filing made it eligible to list shares as early as April, but people close to the company said the offering may not happen until June, and no timing has been set. (http://r.reuters.com/ned98v)

FT

GlaxoSmithKline's Chief Executive Andrew Witty all but ruled out a white knight bid for rival drugmaker AstraZeneca on Wednesday by reiterating scepticism on big takeover deals in the sector.

Britain's Reckitt Benckiser, which makes Durex condoms and Nurofen, has ended talks to buy Merck's consumer healthcare unit, paving the way for a rival to land the business behind Coppertone sun tan lotion.

Media baron Richard Desmond is planning to sell British broadcaster Channel 5 for 450 million pounds ($759.85 million) to U.S.-based Viacom, in a move that will see him receive more than four times his initial investment.

Rio Tinto is taking Vale and BSG Resources to court, alleging the rival mining groups were part of a conspiracy to steal its rights to an African iron ore deposit worth billions of dollars.

Microsoft's Xbox One is going to be the first foreign games console to be sold in China, after a 14-year ban on the devices was lifted in January.

NYT

* With the Republican-led filibuster of a Senate proposal to raise the federal minimum wage to $10.10 on Wednesday, Democrats moved swiftly to frame the vote as an example of the gulf that exists between the two parties on matters of economic fairness and upward mobility. (http://r.reuters.com/xad98v)

* Facebook Inc announced on Wednesday that when its 1.3 billion users log in to other websites or mobile apps through their Facebook identities, they will be able to limit what they reveal to the site or app to just their email addresses and public profile information, like name and gender. (http://r.reuters.com/wad98v)

* A federal regulator confirmed on Wednesday that the country's biggest banks committed widespread errors in dealing with homeowners who faced foreclosures at the height of the mortgage crisis, but the findings are unlikely to put to rest questions from lawmakers and others about the extent of the problems. (http://r.reuters.com/zad98v)

* The Federal Reserve continued to retreat from its stimulus campaign on Wednesday, saying it was looking past the economic slowdown during an unusually cold winter because growth already was rebounding. (http://r.reuters.com/bed98v)

* The utility operator Exelon Corp agreed on Wednesday to buy Pepco Holdings Inc for $6.8 billion in a bid to strengthen its operations on the East Coast. Under the terms of the deal, Exelon will pay $27.25 a share in cash, nearly 20 percent above Pepco's closing share price on Tuesday. (http://r.reuters.com/ced98v)

* The Federal Communications Commission's chairman delivered a tough message to cable and broadband executives Wednesday, saying a lack of competition in their industry has hurt consumers. The chairman, Tom Wheeler, said that the FCC intended to address the problem by writing tough new rules to enforce so-called net neutrality, preventing big broadband and cable companies from blocking access to innovative new technologies and start-ups that might emerge as competitors. (http://r.reuters.com/jed98v)

Canada

THE GLOBE AND MAIL

** Two workers were killed and two others injured as gunfire broke out at the Western Forest Products mill in Nanaimo in British Columbia. Royal Canadian Mounted Police said a lone gunman, a 47-year-old former employee who was later arrested at the scene, entered the mill yard carrying a shotgun and started shooting in the parking lot. (http://r.reuters.com/mud98v)

** A second video of Toronto Mayor Rob Ford smoking what has been described as crack cocaine by a self-professed drug dealer was secretly filmed in his sister's basement early Saturday morning. Ford declined to respond to questions about the video, his lawyer said the mayor was going to take a break from election campaigning. (http://r.reuters.com/pud98v)

Reports in the business section:

** Peter Munk stepped down as the chairman of Barrick Gold Corp on Wednesday. He founded the company three decades ago and turned it into the world's biggest gold producer. "You can take, maybe, Munk out of Barrick. You can't take Barrick out of Munk," he said at the company's annual meeting of shareholders. (http://r.reuters.com/rud98v)

NATIONAL POST

** Rumors about Beverley McLachlin, Chief Justice of the Supreme Court of Canada, are being shared with journalists, alleging she lobbied against the appointment of Marc Nadon to the court. It is also being suggested she has told people the Harper government has caused more damage to the court as an institution than any government in Canadian history. (http://r.reuters.com/xud98v)

** Canada is stepping into the increasingly tense showdown between Kyiv and Moscow over the future of eastern Ukraine by taking over leadership of an Organization for Security and Cooperation in Europe's military observer mission in the central European country. (http://r.reuters.com/zud98v)

FINANCIAL POST

** The Canadian federal government is expected to release details soon about the shape and size of a co-operative securities regulator that so far has the support of only Ontario and British Columbia. (http://r.reuters.com/cyd98v)

** The federal government asks Canadian telecom companies for private customer information about 1.2 million times each year, documents released Tuesday by the federal privacy commissioner's office show. (http://r.reuters.com/dyd98v)

Britain

The Telegraph

RECKITT BENCKISER BOWS OUT OF RACE FOR MERCK'S CONSUMER HEALTH ARM

Reckitt Benckiser has said it is no longer in discussions about buying U.S. pharma group Merck's consumer health business, leaving Germany's Bayer as the leading contender for the $14 billion business. (http://link.reuters.com/gyc98v)

ABU DHABI AND SOROS GOT 'GOLDEN TICKET' IN ROYAL MAIL SALE

Abu Dhabi Investment Authority, billionaire investor George Soros and activist hedge fund Third Point were among the 16 investors given preferential treatment in the controversial Royal Mail privatisation. (http://link.reuters.com/zeb98v)

ARGOS TO OPEN STORES IN HOMEBASE

Argos is to open concessions in Homebase stores and will also roll out a collection of small convenience stores in London as the retailer ramps up its fight with Amazon. (http://link.reuters.com/cub98v)

The Guardian

MORRISONS CUTS PRICE OF 1,200 PRODUCTS IN BID TO WIN CUSTOMERS BACK

A supermarket price war will move a step closer on Thursday as struggling Morrisons slashes the price of more than 1,200 products in an attempt to regain customers lost to cheaper discount chains. (http://link.reuters.com/hyc98v)

GLAXOSMITHKLINE KEEPS DISTANCE FROM BID FOR RIVAL ASTRAZENECA

GlaxoSmithKline has distanced itself from a white-knight bid for rival British drugs maker AstraZeneca , which has received an unwanted 60 billion pound ($101.31 billion) takeover approach from Pfizer of the United States. (http://link.reuters.com/qyc98v)

The Times

SERCO ON BRINK AS ANDREW JENNER, FINANCE DIRECTOR, QUITS

The finance director of Serco has left his job in the wake of a disastrous profit warning as the struggling outsourcing group plots an emergency fundraising to shore up its ailing balance sheet. (http://link.reuters.com/nyc98v)

PARIS MAY TAKE STAKE IN ALSTOM TO STOP GE

France's Socialist government hinted it could take a stake in Alstom to thwart General Electric's 12.35 billion euro ($17.12 billion) bid for the French group's power division. (http://link.reuters.com/ryc98v)

CHANNEL 5 SOLD FOR 450 MLN BY DESMOND

Media baron Richard Desmond is set to complete the sale of Channel 5 to U.S. broadcaster Viacom, the owner of MTV, for up to 450 million pounds. (http://link.reuters.com/pyc98v)

PENSION TAX FEAR AFTER EU RULING

Britain's ability to limit damaging decisions made by eurozone countries was called into question as the European Union's highest court threw out a challenge to a financial transactions some fear could wipe billions from UK pension funds. (http://link.reuters.com/myc98v)

STANDARD LIFE SHRUGS OFF THE IMPACT OF PENSION CHANGES

The British government's shock changes to pensions announced in this year's budget, which mean that those retiring do not automatically have to take out an annuity, has resulted in the halving in sales of such investment products at Standard Life , one of the biggest providers. (http://link.reuters.com/kyc98v)

The Independent

SAGA CUSTOMERS SIGN UP AHEAD OF 2.2 BLN STG FLOAT

Saga has revealed that 700,000 customers have registered to take part in its stock market listing as it aims to raise around 550 million pounds. (http://link.reuters.com/tyc98v)

LADBROKES POISED TO CUT JOBS AFTER TAX HIKE

Ladbrokes has warned it will make job cuts and store closures after the British government's surprise tax hike for bookmakers. (http://link.reuters.com/vyc98v)

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Jobless claims for week of April 26 at 8:30--consensus 320K
Personal income for March at 8:30--consensus up 0.4% for the month
ISM manufacturing index for April at 10:00--consensus 54.3
Construction spending for March at 10:00--consensus up 0.6% for the month

ANALYST RESEARCH

Upgrades

Abercrombie & Fitch (ANF) upgraded to Buy from Hold at Jefferies
Barclays (BCS) upgraded to Buy from Neutral at UBS
Cavium (CAVM) upgraded to Neutral from Reduce at Nomura
Cengage Learning (CNGO) upgraded to Outperform from In-Line at Imperial Capital
Citrix (CTXS) upgraded to Buy from Sell at Berenberg
Exelon (EXC) upgraded to Buy from Hold at Deutsche Bank
Exelon (EXC) upgraded to Market Perform from Underperform at Wells Fargo
FARO Technologies (FARO) upgraded to Outperform from Neutral at RW Baird
Flushing Financial (FFIC) upgraded to Buy from Neutral at Guggenheim
ING Groep (ING) upgraded to Neutral from Underweight at HSBC
JetBlue (JBLU) upgraded to Overweight from Neutral at JPMorgan
KeyCorp (KEY) upgraded to Market Perform from Underperform at Bernstein
National CineMedia (NCMI) upgraded to Buy from Neutral at B. Riley
Pacific Biosciences (PACB) upgraded to Neutral from Underweight at JPMorgan
Quaker Chemical (KWR) upgraded to Overweight from Equal Weight at First Analysis
Regions Financial (RF) upgraded to Market Perform from Underperform at Bernstein
Rocket Fuel (FUEL) upgraded to Equal Weight from Underweight at Evercore
Synageva (GEVA) upgraded to Buy from Neutral at Janney Capital
Synchronoss (SNCR) upgraded to Strong Buy from Outperform at Raymond James
Synovus (SNV) upgraded to Equal Weight from Underweight at Morgan Stanley
U.S. Silica (SLCA) upgraded to Buy from Hold at Jefferies
Wright Medical (WMGI) upgraded to Strong Buy from Buy at Needham
Yelp (YELP) upgraded to Outperform from Neutral at Macquarie
Yelp (YELP) upgraded to Outperform from Sector Perform at RBC Capital
Yelp (YELP) upgraded to Overweight from Neutral at Piper Jaffray

Downgrades

CEVA (CEVA) downgraded to Hold from Buy at Wunderlich
CNO Financial (CNO) downgraded to Neutral from Buy at Goldman
Clean Harbors (CLH) downgraded to Neutral from Outperform at RW Baird
Coach (COH) downgraded to Underweight from Equal Weight at Morgan Stanley
EXCO Resources (XCO) downgraded to Underperform from Sector Perform at RBC Capital
Emulex (ELX) downgraded to Neutral from Overweight at Piper Jaffray
Essilor (ESLOY) downgraded to Neutral from Buy at Citigroup
GFI Group (GFIG) downgraded to Market Perform from Outperform at Keefe Bruyette
Pepco Holdings (POM) downgraded to Market Perform from Outperform at Wells Fargo
USA Compression (USAC) downgraded to Market Perform from Outperform at Wells Fargo

Initiations

Flowers Foods (FLO) initiated with an Outperform at Imperial Capital
Navient (NAVI) initiated with an Equal Weight at Evercore

COMPANY NEWS

EQT (EQT) said it will sell Jupiter gathering system to EQT Midstream Partners (EQM) for $1.18B. EQT also signed an asset exchange agreement with Range Resources (RRC) and announced a 1M share repurchase authorization
Weight Watchers (WTW) raised its FY14 earnings outlook to $1.45-$1.70 per share from $1.30-$1.60
Yelp (YELP), which gave a FY14 revenue outlook that topped current expectations, said Q1 cumulative reviews increased 46% to 57M
Chevron (CVX) raised its quarterly dividend to $1.07 per share from $1.00
Abercrombie & Fitch (ANF) nominated four independent directors to board, announced settlement agreement with Engaged Capital, under which Engaged agreed to withdraw its notice of nomination of directors for election
Aeropostale (ARO) said it will close 125 P.S. stores, cut 100 positions
Starwood Hotels (HOT) CFO Vasant Prabhu resigned to become CFO of NBCUniversal (CMCSA)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Vical (VICL), Pacira Pharmaceuticals (PCRX), Swift Energy (SFY), Ball Corp. (BLL), Quanta Services (PWR), ExlService (EXLS), Calpine (CPN), CytRx (CYTR), Care.com (CRCM), Proto Labs (PRLB), Endo International (ENDP), Enterprise Products (EPD), Becton Dickinson (BDX), Cigna (CI), Orbotech (ORBK), Orion Marine (ORN), Republic Airways (RJET), Fleetmatics (FLTX), United Insurance (UIHC), Atwood Oceanics (ATW), La Jolla (LJPC), C&J Energy (CJES), Charles River Labs (CRL), Tesoro Logistics (TLLP), Tetra Tech (TTEK), Chesapeake Lodging (CHSP), Blackbaud (BLKB), Curtiss-Wright (CW), Lincoln National (LNC), Con-way (CNW), Digital River (DRIV), Glu Mobile (GLUU), Synageva (GEVA), Flextronics (FLEX), Amdocs (DOX), Williams (WMB), Weight Watchers (WTW), Atmel (ATML), Fidelity National (FNF), Shutterfly (SFLY), Intersil (ISIL), Cohu (COHU), Intrepid Potash (IPI), Accuray (ARAY), Western Digital (WDC), Manning & Napier (MN), First Bancorp (fbnc), Rovi (ROVI), Equinix (EQIX), Coherent (COHR), Cavium (CAVM), NCI, Inc. (NCIT), Hologic (HOLX), International Rectifier (IRF), Yelp (YELP), Green Dot (GDOT), Kratos Defense (KTOS), Whiting Petroleum (WLL), WebMD (WBMD), Roadrunner (RRTS), QuickLogic (QUIK)

Companies that missed consensus earnings expectations include:

Textron (TXT), Beazer Homes (BZH), Integra LifeSciences (IART), ACI Worldwide (ACIW), Genesee & Wyoming (GWR), Generac (GNRC), Heritage-Crystal Clean (HCCI), Buenaventura (BVN), Crocs (CROX), Xenith Bankshares (XBKS), SJW Corp. (SJW), American Railcar (ARII), Ashland (ASH), Terex (TEX), Orient-Express (OEH), Remy International (REMY), Hyster-Yale Materials (HY), North Valley Banc (NOVB), Stanley Furniture (STLY), Chemtura  (CHMT), California Water Service (CWT), Stamps.com (STMP), Amerisafe (AMSF), Energy XXI (EXXI), Alphatec (ATEC), Hornbeck Offshore (HOS), Comfort Systems USA (FIX), Cabot (CBT), Oiltanking Partners (OILT), TTM Technologies (TTMI), Oplink Communications (OPLK), ManTech (MANT), inTEST (INTT), Williams Partners (WPZ), MedAssets (MDAS), TESARO (TSRO), McGrath RentCorp (MGRC), MetLife (MET), Martin Midstream Partners (MMLP), JDSU (JDSU), OncoGenex (OGXI), Forrester (FORR), American Equity (AEL), Boyd Gaming (BYD), Silicon Graphics (SGI)

Companies that matched consensus earnings expectations include:

Iron Mountain (IRM), MEDNAX (MD), Key Energy (KEG), Kirby (KEX), MDU Resources (MDU), Pilgrim's Pride (PPC), Allegion (ALLE), Jack Henry (JKHY), Macquarie Infrastructure (MIC), United Online (UNTD), Kona Grill (KONA), Endologix (ELGX), Portfolio Recovery (PRAA), ANADIGICS (ANAD), Dyax (DYAX), Pacific Biosciences (PACB), Sensar (SCII)

NEWSPAPERS/WEBSITES

AT&T (T) approached DirecTV (DTV) about possible takeover, WSJ reports
Coca-Cola (KO) to amend executive pay after pressure from Buffett (BRK.A), WSJ says
Winters says Coca-Cola (KO) compensation plan 'excessive,' Bloomberg reports
Softbank (SFTBF) and Sprint (S) deal for T-Mobile (TMUS) not imminent, Re/code reports
Rio Tinto (RIO) sues Vale (VALE), Steinmetz over iron-ore concession, WSJ reports
Alibaba in talks with Alipay about regaining stake, NY Times reports
Merck (MRK), Sanofi (SNY) exploring sale of off-patent drug assets, Reuters says
Box's (BOX) IPO may be delayed until June or later, WSJ reports
Twitter (TWTR) still looks expensive, Barron's says

SYNDICATE

Alphatec (ATEC) files to sell 10.25M shares of common stock for holders
Apollo Commercial (ARI) files to sell 9M shares of common stock
AxoGen (AXGN) files to sell $35M shares of common stock
Burlington Stores (BURL) 12M share Secondary priced at $25.75
EQT Midstream Partners (EQM) files to sell 8.75M common units for limited partners
Forum Energy (FET) 10M share Secondary priced at $29.00
Sterling Construction (STRL) announces bought deal offering of 2.1M shares
Uranium Resources (URRE) files to sell 4.5M shares of common stock for holders

• Levin Hearing Ups Volume in High-Frequency Call to Action (BBG)
• Ukrainian President Fires Central Bank Chief (BBG)
• Argentina Plans Debt Swap (WSJ)
• Fed Decision Day Guide From Dot Plots To Exit Strategy (BBG)
• World Bank Economist: China May Face US-Style Financial Crisis (WSJ)
• Premier Li says no hard landing for China, expects medium to high growth (Reuters)
• Putin Talks Peace With Ukraine Leader After Gas Pipe Fire (BBG)
• Poll Shows Erosion in President's Support (WSJ)
• U.S. mortgage applications plunge in latest week (Reuters)
• Ex-Goldman director goes to prison, still owes $13.9 million fine (Reuters)
• GM's CEO to face more Capitol Hill grilling over safety crisis (Reuters)
• Google Dismantling Seen as Impossible by Merkel Ally De Maiziere (BBG)
• As LED Industry Evolves, China Elbows Ahead (NYT)

Overnight Media Digest

WSJ

* Foreign crises and domestic economic unease have eroded President Barack Obama's public standing, sapping his ability to respond to overseas conflicts and weighing on fellow Democrats heading into the midterm elections. As clouds gather abroad, a new Wall Street Journal/NBC News poll finds Obama's job approval rating at 41 percent, matching a previous low. (http://on.wsj.com/1pHjXu9)

* China is flexing its growing power over global deals, after it put the kibosh on a shipping alliance that officials here said would hold too much sway over trade lanes to Europe. Tuesday's decision by China's Ministry of Commerce came despite approvals for the shipping alliance in Europe and the U.S. It marks only the second time the Chinese regulator has stepped in to block a corporate combination since the country enacted its antitrust law in 2008. (http://on.wsj.com/1r3st4n)

* Argentina unveiled a controversial plan aimed at preventing the country's second default in 13 years, while hinting it was willing to negotiate with holdout creditors. The moves, announced by the country's economy minister in a televised address on Tuesday, would enable Argentina to escape a U.S. court ruling that requires it to start making payments to the creditors, something it has resisted for years. (http://on.wsj.com/U8TQ1V)

* Seventeen months after Congress authorized up to $16 billion to fix homes wrecked by superstorm Sandy, tens of thousands of people still are living in damaged houses or paying rent on top of a mortgage as they wait for rebuilding help. (http://on.wsj.com/1r4RJHp)

* Online retailer Amazon on Wednesday is expected to reveal its first smartphone, featuring a display designed to respond to users' eye movements and capable of displaying three-dimensional images. (http://on.wsj.com/1uAotZe)

* FedEx Corp told U.S. authorities that it received allegations that its Kenya operation paid bribes to government officials, according to a statement the company issued to The Wall Street Journal. The shipping company has told the U.S. Department of Justice and Securities and Exchange Commission about the allegations it potentially violated the Foreign Corrupt Practices Act, the statement said. (http://on.wsj.com/1i9fI8A)

* A Chinese-led group regained the upper hand in bidding for Aquila Resources Ltd after the Australian iron-ore miner rejected a rival proposal from Mineral Resources Ltd valuing it at 1.54 billion Australian dollars ($1.45 billion). (http://on.wsj.com/1pemuZc)

* Mineral-rights owner Viper Energy Partners LP's initial public offering priced well above expectations Tuesday, people familiar with the deal said, in the latest sign of strong investors demand for high-yielding stocks tied to the energy sector. The Midland, Tex.-based company sold 5 million shares for $26 apiece, these people said, raising $130 million before the potential sale of additional shares to underwriters. (http://on.wsj.com/1r4xNEk)

* Adobe Systems Inc said its fiscal second-quarter earnings rose 16 percent on higher revenue, driven by strong growth in subscription sales. Adobe, the maker of Photoshop and Illustrator design software, has been transitioning to subscription cloud services and away from packaged software. (http://on.wsj.com/1lxmbue)

* McKessonn Corp plans to offer investors more power to oust directors by opening up corporate elections, making it one of a handful of major U.S. companies to take a step long advocated by activist investors. (http://on.wsj.com/1qaZ5t9)

* Target Corp increased yields to sell $2 billion of bonds on Tuesday, as the retailer continues to deal with the fallout from a customer-data breach late last year. Target ultimately received more than $4 billion in investor orders for the debt, one investor said, more than twice the bonds available. But investors said it is unusual that a company would have to increase yields to entice buyers given the recent high demand for corporate bonds. (http://on.wsj.com/1qaZlbs)

FT

The Islamic State of Iraq and the Levant, known as Isis, has issued annual reports since 2012, giving details in numerical and geographical points on its operations. The report lists out number of bombings, assassinations, checkpoints, suicide missions, cities taken over and even "apostates" converted to the Isis cause.

European officials are scrambling to avert a public relations disaster over the prospect of Britain losing out to Germany in a row over Brussels jobs at an EU summit in Ypres.

Elon Musk based SolarCity has announced plans to build one of the world's largest solar panel plants in New York state - defying the recent trend for manufacturing to be based in Asia.

In a sign that alternative finance providers are achieving mainstream acceptance, Santander is to become the first high-street bank to refer its customers to an online peer-to-peer lender.

Some of Citigroup's biggest investors are looking to contest a $10 billion settlement to end an investigation over the sale of mortgage-backed securities with the U.S. Department of Justice by going to the court.

NYT

* With a price war underway, Chinese LED manufacturers are taking market share from industry players in the United States, Europe and Japan, the industry pioneers that made crucial technological breakthroughs, and from Taiwan and South Korea, previously the leaders in low-priced LEDs. (http://nyti.ms/1lxjTeO)

* As President Xi Jinping of China prepares to tackle what may be the biggest cases of official corruption in more than six decades of Communist Party rule, new evidence suggests that he has been pushing his own family to sell hundreds of millions of dollars in investments, reducing his own political vulnerability. (http://nyti.ms/1jxwbyb)

* Mary Barra, chief executive of General Motors, is expected to tell a House panel on Wednesday that the auto giant is determined to change its culture and prevent another safety crisis similar to its deadly delay in recalling millions of small cars with a defective switch. (http://nyti.ms/1ygGiB4)

* Just as the federal government reached an agreement on Tuesday with SunTrust Banks over questionable mortgage practices, the government's talks to resolve Citigroup's mortgage issues grew increasingly tense and veered toward a lawsuit. The Justice Department is seeking a $10 billion penalty from Citigroup over its sale of defective mortgage investments, said people briefed on the matter, who spoke on the condition of anonymity because the talks are incomplete. But Citi contends that the amount far exceeds the losses suffered by investors. (http://nyti.ms/1smZaxX)

* After seven years, securities regulators are scrutinizing a deal where the hedge fund manager Bruce Rose, on the eve of the financial crisis, took his firm into the business of collecting mortgage payments from people with tainted credit. The previously unreported investigation is seeking information about how Rose's Carrington Holding Co financed the $188 million deal, which relied in part on the firm's later issuing special securities to the investors in its hedge fund. (http://nyti.ms/1niMVvo)

* The Argentine government said on Tuesday that it had started to take steps to circumvent a United States court order to avoid a technical default. Axel Kicillof, the economy minister, said that the government would pay bondholders of restructured debt under Argentine legislation. (http://nyti.ms/1ygI99h)

Canada

THE GLOBE AND MAIL

* For the oil industry, it is far too early to hail Ottawa's approval of Enbridge Inc's Northern Gateway pipeline as the removal of the biggest hurdle before proceeding. The Stephen Harper government's acceptance of the Joint Review Panel's clearance for the project is a key step in the sector's aim of getting growing volumes of oil sands crude to the Pacific Coast and on to lucrative Asian markets. However, the government said Enbridge "clearly" had more work to do to bring many First Nations on side. (http://bit.ly/1yhEYhB)

* A state of emergency has been declared in the central Ontario community of Angus, after a tornado swept the county, tearing off roofs and ripping down trees in its path. The tornado touched down after an afternoon of severe weather warnings in parts of Ontario, and hours after four men were hit by lightning in Stouffville. (http://bit.ly/1neLwVi)

Reports in the business section:

* China's state-owned gold mining company, China National Gold Group Corp, is working on potential partnerships with both Barrick Gold Corp and Newmont Mining Corp , its president said on Tuesday. If the Asian company is successful, the alliances would bring one or both of the Western miners closer to China, a country that is now the world's largest consumer and producer of the yellow metal. (http://bit.ly/1r5jobd)

* Department-store retailer Saks Fifth Avenue will arrive in Canada with a format designed specifically for this country that's even more upscale than its current U.S. stores. Richard Baker, chief executive officer of Hudson's Bay Co, which acquired U.S.-based Saks Inc last year, said on Tuesday that the Canadian stores - up to seven mainstream ones in all - would have some distinct domestic touches, possibly luxury "food halls," when they arrive starting in 2016. (http://bit.ly/1iG3dfl)

* Canada's dominant telecom players faced off against upstart Wind Mobile Tuesday, warning shifting government policies are stifling investment in the wireless industry. Wind, in turn, said the rules surrounding wireless competition are doing their job to help smaller firms compete. (http://bit.ly/1pgidX5)

NATIONAL POST

* The Stephen Harper government is said to be considering a series of retaliatory moves if the Barack Obama administration decides against approving the Keystone XL pipeline and proceeds with protectionist Buy American provisions that block access to the U.S. market for Canadian companies. (http://bit.ly/1r5SqQz)

* Despite Tuesday's approval from the federal government, the Enbridge Northern Gateway Project must still overcome a number of major obstacles before it can proceed to construction phase. The 209 conditions set by the federally mandated Joint Review Panel in December still apply, but other, potentially tougher hurdles have been thrown down by the public at large, with blessings from the British Columbia government. (http://bit.ly/1kMUgRa)

FINANCIAL POST

* BlackBerry Ltd Chief Executive John Chen has taken bold steps in his attempt to revive the technology company - from outsourcing production of its smartphones to selling the bulk of its Canadian real estate. But even if he is confident he can "save the patient," as he told an industry conference recently, Chen still has his work cut out for him to put BlackBerry back on Wall Street's radar. (http://bit.ly/1pgk7qD)

* Canada's taxes are the most business-friendly in the world, according to a new report from KPMG - a fact that might grab the attention of businesses looking for takeover targets. The "Focus on Tax" report ranked developed countries by adding up a wide range of tax costs to businesses - from statutory labor costs to harmonized sales tax - and comparing them to what companies pay in the United States. (http://bit.ly/1uCAr4s)

China

CHINA SECURITIES JOURNAL

- China's banks should first report to regulators before issuing any asset-based securities (ABS) products, said a central bank spokesman at the People's Bank of China (PBOC).

CHINA BUSINESS NEWS

- The Chinese provinces of Shanxi, Hunan and Henan as well as the metropolis of Chongqing have opened hundreds of investment projects to private investors, with the total amount hitting 950 billion yuan ($153 billion).

CHINA DAILY

- Close to 10 percent of China's population is now over 65 years old, according to the country's Ministry of Civil Affairs. Around one-third of China's near-1.4 billion people are estimated to be over 60 years old by 2050.

SHANGHAI DAILY

- Work has begun on the world's largest Walt Disney Co retail store, coming up in China's eastern metropolis of Shanghai. The store will have 1,000 sq m of retail space and an outdoor plaza.

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Q1 current account balance at 8:30--consensus ($99.8B)
FOMC meeting announcement and funds rate at 14:00

ANALYST RESEARCH

Upgrades

Core Laboratories (CLB) upgraded to Outperform from Sector Perform at Iberia
Diamond Foods (DMND) upgraded to Buy from Hold at KeyBanc
Franklin Resources (BEN) upgraded to Buy from Neutral at Goldman
Gap (GPS) upgraded to Buy from Speculative Buy at Canaccord
Medtronic (MDT) upgraded to Overweight from Equal Weight at Barclays
Nimble Storage (NMBL) upgraded to Overweight from Equal Weight at Morgan Stanley
Tyson Foods (TSN) upgraded to Outperform from Market Perform at BMO Capital
Walgreens (WAG) upgraded to Overweight from Equal Weight at Barclays

Downgrades

Alumina (AWC) downgraded to Underperform from Neutral at BofA/Merrill
Amdocs (DOX) downgraded to Market Perform from Outperform at Wells Fargo
C.R. Bard (BCR) downgraded to Equal Weight from Overweight at Barclays
Covidien (COV) downgraded to Equal Weight from Overweight at Barclays
GNC Holdings (GNC) downgraded to Neutral from Overweight at JPMorgan
MICROS (MCRS) downgraded to Neutral from Buy at Janney Capital
NewBridge Bancorp (NBBC) downgraded to Market Perform at Keefe Bruyette
Outerwall (OUTR) downgraded to Neutral from Buy at B. Riley
SunPower (SPWR) downgraded to Neutral from Overweight at JPMorgan

Initiations

Cisco (CSCO) initiated with an Overweight at Morgan Stanley
Compugen (CGEN) initiated with an Outperform at JMP Securities
F5 Networks (FFIV) initiated with an Equal Weight at Morgan Stanley
Garmin (GRMN) initiated with an Underweight at Morgan Stanley
Intrepid Potash (IPI) initiated with an Overweight at Piper Jaffray
Ironwood (IRWD) initiated with a Hold at WallachBeth
Juniper (JNPR) initiated with an Equal Weight at Morgan Stanley
MeetMe (MEET) initiated with a Buy at Wunderlich
Qualcomm (QCOM) initiated with an Equal Weight at Morgan Stanley
Summit Midstream (SMLP) initiated with a Buy at Citigroup

COMPANY NEWS

Endocyte (ECYT) announced that Merck (MRK) will no longer pursue development of vintafolide
Flexion Therapeutics (FLXN) announced positive topline results from its Phase 2a pharmacokinetic trial
Pfizer (PFE), Cellectis entered into a global strategic cancer immunotherapy collaboration
SunEdison (SUNE) will partner with Riverstone Holdings in Silver Ridge Power JV
CB&I (CBI) noted unusual trading volume in its common stock related to the issuance of a report by a short seller recommending that stockholders sell CB&I stock. CB&I has reviewed the report and strongly disagrees with its assumptions and conclusions
Adobe (ADBE) sees adding 1M net new Creative Cloud subscriptions in 2H
Shanda Games (GAME) said no timetable set for evaluation of the proposed transaction or any other alternative transaction

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Adobe (ADBE), La-Z-Boy (LZB)

Companies that matched consensus earnings expectations include:
NeoPhotonics (NPTN)

Adobe (ADBE) sees Q3 EPS 22c-28c, consensus 27c
HealthSouth (HLS) sees FY14 EPS at high-end of guidance $1.86-$1.91, consensus $1.92
Shanda Games (GAME) reports Q1 EPS 20c
Daegis (daeg) reports Q4 non-GAAP EPS 7c vs. 3c last year
NeoPhotonics (NPTN) sees Q2 EPS (26c)-(16c), consensus (19c)

NEWSPAPERS/WEBSITES

Oracle (ORCL) near deal to acquire MICROS (MCRS) for over $5B, Bloomberg says
GE (GE) may sell train signal unit as part of sweetened offer to Alstom (ALSMY), WSJ says
T-Mobile (TMUS) makes contingency plans should Sprint (S) merger fail, NY Post says
AT&T (T) CEO says regulators unlikely to approve Sprint (S)-T-Mobile (TMUS) deal, Re/code reports
FedEx (FDX) informs DOJ, SEC about Kenya bribery allegations, WSJ reports
SolarCity (SCTY) planning to build solar panel plant in New York state, FT reports
Appaloosa, bondholders set to sue Caesars (CZR), NY Post reports
Bristol-Myers (BMY) wins ruling in Pennsylvania drug-pricing dispute, Bloomberg says

SYNDICATE

Century Communities (CCS) 4.48M share IPO priced at $23.00
China Biologic (CBPO) files to sell 3.22M shares of common stock
Cincinnati Bell (CBB) to sell 12.5M operating partnership units to CyrusOne
CyrusOne (CONE) files to sell 12.5M shares of common stock
GW Pharmaceuticals (GWPH) files to sell 1.7M ADSs
NGL Energy Partners (NGL) files to sell 8M common units
Receptos (RCPT) files to sell common stock
Signal Genetics (SGNL) 850K share IPO priced at $10.00
Tsakos Energy (TNP) files to sell 23M shares for holders
Viper Energy (VNOM) 5M share IPO priced at $26.00
Williams (WMB) 53.6M share Spot Secondary priced at $57.00
ZS Pharma (ZSPH) 5.9M share IPO priced at $18.00

DAILY PRICE

Gold added to overnight gains this morning as the dollar weakened after the U.S. Federal Reserve confirmed ultra loose monetary policies are set to continue despite inflation pressures building. Platinum and palladium rose as new hurdles emerged in settling South Africa's industrial unrest and doubts remain about the viability of Russian supplies.

Oil prices remain near multi month highs on concerns of supply disruption. U.S. inflation figures were worse than expected Wednesday showing that inflation pressures are building which is bullish for gold. Higher oil prices and slowing economic growth is a recipe of stagflation - economic conditions that gold thrives on.

Gold in U.S. Dollars - 5 Days (Thomson Reuters)

In China, the world’s largest physical gold buyer, gold prices were trading either at a discount of about $1 an ounce or on par with the global benchmark, in a sign that buying interest has waned somewhat.

China’s Largest Gold Company Seeks To Become Kingmaker In Gold Industry
China National Gold Group Corporation or China Gold, China’s largest gold conglomerate with primary interests in mining and also refining, is on the hunt for global acquisitions and partnerships, the company's president said yesterday.

The state owned Chinese gold miner and producer and retailer of custom-designed gold and silver bars, which was founded in 2003, appears to have designs on becoming a kingmaker in the global gold industry.

China is the world's biggest producer, importer and buyer of gold, giving the country increasing sway over prices, output and the global gold market in general. The country's official gold consumption increased to 1,176 metric tons last year while its production was 428 metric tons. This is encouraging overseas acquisitions.

China Gold’s President Dr. Xin Song said he believes that long term demand for gold in China will remain strong as a younger generation buys gold online, even if demand falls slightly this quarter from the first.

Acquisitions by China Gold would revive a mostly moribund market for gold mergers and acquisitions. This has been seen in both the mining and investment segments of the gold market. Indeed, the German refinery and bullion wholesaler Degussa’s acquisition of small UK bullion retailer, Sharps Pixley, in November 2013 was one of the only deals seen in the investment sector in recent years.

Mr. Song said that his company is searching for opportunities in the gold and silver markets. "The growing strategy is very clear: We are going out looking at things globally," he said through an interpreter. "We have a few opportunities, at different stages."

He said the company's current preference is for assets in countries near China, such as Mongolia, Russia and in Central Asia. It also is looking for acquisitions in developed countries such as Canada, Australia and the U.S.

A third option is in developing countries, including in Africa and South America. "The political situation has to be stable," he said.

?Bullion Coin And Bar Global Price Match Guarantee

Mr. Song said he talked last week with Barrick Gold Chairman John Thornton. Barrick is the world’s largest gold producer. Barrick has placed a priority on establishing long-term relationships with Chinese partners. "Both parties are looking for potential opportunities jointly," Mr. Song said.

China Gold is working on potential partnerships with both Barrick Gold Corp., Newmont Mining Corp. and Kinross Gold Corp its president said on Tuesday.

If China’s largest gold producing company is successful, the alliance would bring one or both of the world’s largest western gold mining companies closer to China. It could mean an important new source of supply for the insatiable demand that is coming from China.

Zhongyuan Gold Smelter Co Ltd, is the largest gold refiner and bar refinery in China and part of China National Gold Group Corporation (CNGGC), is a subsidiary of China Gold Co Ltd (Zhongjin Gold Co Ltd), which is headquartered in Beijing.

The refinery works closely with an associated company, China National Gold Group Gold Jewellery Co Ltd, which is also headquartered in Beijing and responsible for the design and sale of CNGGC-branded gold investment bars and other bars and products for the retail gold market in China.

Gold Kilo Bar

Sanmenxia City, which is built on the west bank of the Yellow River, is known as “Gold City”, in recognition of the importance of the city and Henan Province to China’s gold industry.

For 53 years the Chinese people were banned from owning gold. But that all changed in 2003, and now the enormous demand by 1.3 billion Chinese over the last ten years is causing an important paradigm shift, as gold and silver moves from the West to the East.

Another factor in the paradigm shift is official Chinese demand from the People’s Bank of China (PBOC) who are diversifying some of their massive foreign exchange reserves, some $3 trillion, into the much smaller physical gold market.

The ramifications of that paradigm shift have yet to be appreciated.

? Owning physical gold in the safest way possible remains vital:  7 Key Gold Storage Must Haves

• Obama Decries Big Bonuses at Bank Trading Desks as Risky  (BBG)
• India central bank seeks to swap gold to improve reserves quality (Reuters)
• There goes Q3 GDP: Arthur Strengthens to Become First Atlantic Hurricane (BBG)
• Airports Serving U.S. Tighten Checks on Stealth-Bomb Threat (BBG)
• Fear, cash shortages hinder fight against Ebola outbreak (Reuters)
• Brent Declines as Libya Rebels Say Ports Are Open (BBG)
• Shiites Train for Battle in Iraqi Holy City (WSJ)
• Dimon’s Cancer Has 90% Cure Rate With Demanding Therapy (BBG)
• Goldman says client data leaked, wants Google to delete email (Reuters)
• ECB Watchers in the Dark Look to Draghi for Illumination (BBG)
• Saudi Arabia Sends 30,000 Troops to Iraq Border (Reuters)
• Dollar Bulls Practicing Art of Stealth Capitulation (BBG)
• Deadly Violence Escalates in Israel After Palestinian Youth, Israeli Teens Killed (WSJ)
• Stevens Renewed Jawboning Hits Mark to Spur Aussie Drop (BBG)
• U.S., UK officials prepare inspection order for all F-35s (Reuters)
• U.S. Gives New Contract To Firm That Vetted NSA Leaker Edward Snowden (WSJ)

Overnight Media Digest

WSJ

* Violent clashes erupted in Jerusalem over the killing of an Arab teenager that Palestinians blamed on Jewish settlers, raising fears of a spiral of vengeance spurred by the earlier killings of three Israeli teenagers. (http://on.wsj.com/1qxOzP9)

* The Department of Homeland Security awarded a $190 million contract to the company accused of methodically defrauding the government while carrying out background checks on millions of people, including Edward Snowden. (http://on.wsj.com/1iZdbxK)

* Japan said Thursday it would lift some sanctions on North Korea in return for Pyongyang's decision to open an investigation into the fate of Japanese citizens it abducted decades ago. (http://on.wsj.com/1marDSz)

* Two U.S. senators have asked the U.S. Commerce Department to provide details about recent federal rulings that may allow exports of some American oil that hasn't gone through the traditional refining process. (http://on.wsj.com/1iZdk4q)

* Facebook said that since the study on emotions, it has implemented stricter guidelines on Data Science team research. Since at least the beginning of this year, research beyond routine product testing is reviewed by a panel drawn from a group of 50 internal experts in fields such as privacy and data security. (http://on.wsj.com/1qoOj3w)

* Federal Reserve Chairwoman Janet Yellen pushed back against the notion that the central bank should consider raising interest rates to address concerns about financial stability. (http://on.wsj.com/1o3rwWf)

* Federal regulators are looking at commissions that buyout firms receive for helping companies they control get goods and services at discount prices, as part of a stepped-up probe of private-equity fees. (http://on.wsj.com/TPREfg)

* The announcement by JP Morgan Chase CEO James Dimon that he will undergo treatment for throat cancer puts the spotlight on succession at the U.S. banking giant. (http://on.wsj.com/1lB6zQP)

FT

Telefonica SA 8.6 billion euro takeover of KPN's German mobile unit E-plus won conditional approval from Brussels, after Spain's largest telecom operator promised to rent out part of the merged company's network capacity and divest some radio wave spectrum to smaller rivals.

Rival banks will have to consider the benefits of clearing the French lender's dollar transactions, following BNP Paribas's $8.9 billion settlement with U.S. authorities for violating sanctions against Sudan, Cuba and Iran that forced the behind-the-scenes role of correspondent banking into the open.

Chinese authorities have informed U.S. consular officials that "on grounds of privacy" they will not be able to attend the trial of British investigator and his American wife and business partner who have been detained in China because of their work for drugmaker GlaxoSmithKline, sources said.

Federal Reserve Chair Janet Yellen has mounted a forceful defence to keep monetary policy loose signs of a rise in asset prices, and has argued that the central bank did not need to raise interest rates to tackle financial instability as it had other tools at its disposal.

With another regulator saying that will quiz Facebook on its psychological experiment, the social networking site's chief operating officer, Sheryl Sandberg, told NDTV in an interview that the company will not try to control its users' emotions.

Venture Capitalist Tim Draper, a billionaire who is campaigning to split California into six states, has emerged as the sole winning bidder of bitcoins worth about $18 million auctioned by the United States Marshals Service.

NYT

* Standard General, a little-known hedge fund backing Dov Charney, the ousted executive of American Apparel, is in talks with the company's board over the possibility of bringing in new leadership, including a cadre of experienced board members, while keeping the company's signature manufacturing in the United States. (http://nyti.ms/1z9cI12)

* Privacy and Civil Liberties Oversight Board, the federal privacy board that sharply criticized the collection of the phone records of Americans by the National Security Agency, has concluded that the surveillance program is largely in compliance with both the Constitution and a surveillance law that Congress passed six years ago. (http://nyti.ms/1s0Jcpt)

* Security researchers at the RSA Security division of the EMC Corp have uncovered what they believe is a significant cyber-crime operation in Brazil that took aim at $3.75 billion in transactions by Brazilians. (http://nyti.ms/1iYg9Tn)

* Venture capitalist Tim Draper, winner of the government auction of nearly 30,000 Bitcoins on Friday, intends to make the coins available for use in emerging markets via a partnership with the Bitcoin exchange start-up Vaurum. (http://nyti.ms/1mmAkei)

* The Weinstein Company, best known for its Oscar-winning film operation, is exploring plans to spin off its TV division into a separate company that could be sold to a strategic partner or taken public. (http://nyti.ms/1iYgF41)

* Federal auto regulators, criticized recently for not acting aggressively enough on safety issues, turned some of their fire on Chrysler on Wednesday, saying in a harshly worded letter that the automaker was taking too long to repair 1.6 million recalled Jeep sport utility vehicles. (http://nyti.ms/1oqkA8K)

* Target is "respectfully" asking its customers to not bring firearms into its stores, even where it is allowed by law. Molly Snyder, a Target spokeswoman, said that Target's move was a "request and not a prohibition." (http://nyti.ms/1masx1n)

* The Wall Street Journal has cut between 20 and 40 staff members in recent weeks, according to people with knowledge of the matter, as part of a re-evaluation of its newsroom that came at the end of its financial year. (http://nyti.ms/VfVwY7)

* China said it would permit banks to set their own exchange rates for the renminbi against the dollar in deals with clients, in a step to relax controls to make the currency more market-driven. (http://nyti.ms/1iZgK71)

Canada

THE GLOBE AND MAIL

** On the eve of a Throne Speech outlining Ontario Premier Kathleen Wynne's plan for her new majority mandate, Moody's has issued a stark warning on Ontario's growing deficit. The bond rating agency has changed its outlook on the province to "negative," cautioning its credit rating could be downgraded if it doesn't show progress either cutting spending or hiking revenues. (http://bit.ly/1lVPNAO)

** Kyle Lowry, the basketball veteran who led the Toronto Raptors to their first postseason appearance in five years, said on Wednesday on Twitter he's staying put. Lowry's deal is $48 million through four years with an opt-out after the third year, according to multiple reports. (http://bit.ly/1qAINfN)

Reports in the business section:

** Auto sales stayed in overdrive last month in Canada, putting six-month deliveries ahead of the record pace set last year. Canadians snapped up 175,428 new cars, trucks, crossovers and mini-vans in June, up 2 percent from 171,608 a year earlier and making last month the best June on record. (http://bit.ly/VgTBm4)

NATIONAL POST

* Toronto Mayor Rob Ford admitted Wednesday to using "every drug that you can think of" including crack, marijuana, cocaine and magic mushrooms but not heroin and never in his office, in his first one-on-one interviews since returning from addiction treatment. (http://bit.ly/VgTXsQ)

* Environment Canada is warning that tropical storm Arthur could impact Atlantic Canada this weekend. The Canadian Hurricane Centre says the storm is expected to intensify to hurricane strength overnight as it moves north-eastward up the East Coast of the United States. (http://bit.ly/1xl71eB)

FINANCIAL POST

* The Globe and Mail narrowly avoided a strike on Wednesday, with the parties agreeing to return to the bargaining table on Tuesday after unionized workers voted overwhelmingly to reject a contract offer from management. (http://bit.ly/1lVRcY1)

* Canada is one step closer to having a new airline after Canada Jetlines Ltd announced plans to raise $10 million and list on the TSX Venture Exchange. (http://bit.ly/1z9NZcY)

China

SHANGHAI SECURITIES NEWS

- China's securities regulator will soon publish rules that will expedite delisting of loss-making publicly traded firms as part of efforts to reform the country's capital markets.

- The China Insurance Regulatory Commission, the country's insurance regulator, has started a crackdown in Shanghai on illegal sales of wealth management products by insurance agents.

SHANGHAI SECURITIES

- Harvest Fund Management Co will sell a product that will allow Chinese investors to subscribe to IPO shares of Alibaba Group Holdings Ltd <IPO-BABA.N>.

SECURITIES TIMES

- Chinese electronics retailer Suning Commerce Group Co Ltd , which has acquired video site PPTV, may roll out Internet TV products to join the war to penetrate consumers' living rooms.

PEOPLE'S DAILY

- In an editorial, the People's Daily warned Japan not to disrupt the current international system and said China will have enough power to construct a world of peace and mutual prosperity.

CHINA DAILY

- Chinese President Xi Jinping told former U.S. Treasury secretary Hank Paulson the United States should objectively view China's national conditions and policies, and the two sides should avoid suspicion, confrontation and "plant more flowers, not thorns" in their relations.

Britain

The Telegraph

SECURITY TO BE STEPPED UP AT UK AIRPORTS AMID TERROR FEARS

Security at British airports is being increased after the United States called for heightened precautions amid reports two terror networks are working together on a bomb that could evade existing measures.

The Guardian

NHS CANCER CARE: PLANNED SWITCH TO PRIVATE CONTRACTS IN 700 MLN STG PLANS

Cancer care in the NHS could be privatised for the first time in the health service's biggest ever outsourcing of services worth over 1.2 billion pounds.

The Times

SHARE PRICE RIGGING ON LSE IS RIFE, MPS ALLEGE

Regulators are under pressure to open an investigation into the suspected manipulation of the closing prices of ordinary shares traded in London after it was claimed in Parliament yesterday that attempted market abuse was rife.

Sky News

BAE SYSTEMS WINS U.S. DEAL FOR 'ANTI-INSURGENT' MISSILE

UK defence contractor BAE Systems has been chosen to further develop its 'anti-insurgent' missile system for the U.S. military.

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Non-farm payrolls for June at 8:30--consensus 211K
Unemployment rate for June at 8:30--consensus 6.3%
Jobless claims for week of June 28 at 8:30--consensus 314K
International trade balance for May at 8:30--consensus deficit $45.1B
ISM non-manufacturing index for June at 10:00--consensus 56.2

ANALYST RESEARCH

Upgrades

Athlon Energy (ATHL) upgraded to Buy from Neutral at UBS
Cree (CREE) upgraded to Outperform from Perform at Oppenheimer
Downgrades
Comerica (CMA) downgraded to Neutral from Buy at Citigroup
Lazard (LAZ) downgraded to Outperform from Strong Buy at Raymond James
RSP Permian (RSPP) downgraded to Neutral from Buy at UBS
ResMed (RMD) downgraded to Hold from Buy at Deutsche Bank
Sibanye Gold (SBGL) downgraded to Sell from Neutral at UBS

Initiations

Chatham Lodging (CLDT) reinstated with an Overweight at Barclays
Ericsson (ERIC) initiated with a Hold at Jefferies
KeyCorp (KEY) assumed with a Neutral at Citigroup
PAREXEL (PRXL) initiated with a Hold at KeyBanc
Regions Financial (RF) assumed with a Neutral at Citigroup
Sterling Bancorp (STL) initiated with an Outperform at Raymond James
SunTrust (STI) assumed with a Neutral at Citigroup

COMPANY NEWS

American Railcar (ARII) announces resignation of Carl Icahn from board
Ares (ARES) to acquire Graphite Capital stake in London Square for GBP 110M
Coach (COH) sees 'Transformation Plan' charges related to inventory $75M-$85M
Impax (IPXL) acquires two generic products from Actavis
Medtronic (MDT) announces insulin pump more effective than daily injection
Qualcomm (QCOM) acquires Wilocity
Salesforce.com (CRM) announces strategic partnership with Deutsche Telekom
Tekmira (TKMR) receives notice of clinical hold for TKM-Ebola Phase I trial
Wausau Paper (WPP), Starboard reach agreement
Yahoo (YHOO) shuts down less popular products to focus on core areas

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
SYNNEX (SNX)

NEWSPAPERS/WEBSITES

Barrick Gold (ABX) hires bank to sell Golden Sunlight mine, WSJ reports
Dethroned American Apparel (APP) CEO gives stake to hedge fund, Reuters says
Facebook (FB) Data Science group had little oversight, WSJ reports
lululemon (LULU) founder exploring taking company private, WSJ reports
NHTSA says Chrysler too slow to amend older Jeep issue, Reuters says
LED lighting to reach 94% of street lighting by 2023, DigiTimes
Occidental (OXY) ends Middle East stake sale effort without deal, Bloomberg says
SEC looking into buyout firm (KKR, BX) commissions, WSJ reports
Volkswagen denies reports of PACCAR (PCAR) takeover, Dow reports

SYNDICATE

Access Pharmaceuticals (ACCP) files to sell $23M of common stock
American Residential Properties (ARPI) files to sell 6.6M shares of common stock
Centene (CNC) files to sell 746,369 shares for holders
Good Times Restaurants (GTIM) files to sell 2.09M shares for holders
Knightsbridge Tankers (VLCCF) files to sell 18.6M shares for holders

• Xi Says China Conflict With U.S. Would Be Disaster (BBG)
• Short selling drops to lowest level since Lehman (FT)
• Scoping the new subprime as watchdogs cry 'bubble' (Reuters)
• Carlos Slim to break up América Móvil empire (FT)
• Jury Acquits Rengan Rajaratnam in Insider-Trading Case (WSJ)
• Hamas rockets land deep in Israel as it bombards Gaza Strip (Reuters)
• Hong Kong Buyers Queue for New Homes After Prices Plunge (BBG)
• Rebel Stronghold in Ukraine Braces for Its Showdown (WSJ)
• Tiny Houses Big With U.S. Owners Seeking Economic Freedom (BBG)
• Chinese Cash-Bearing Buyers Drive U.S. Foreign Sales Jump (BBG)
• Portugal Bonds Drop With Europe Stocks as Gold Advances (BBG)
• Why UBS Says Brazil’s 7-1 Trouncing Is Bearish for Stocks (BBG)
• Both candidates in Indonesia election claim victory (Reuters)
• Citigroup Nears Deal to Resolve Mortgage Probe (WSJ)

Overnight Media Digest

WSJ

* President Barack Obama is seeking $3.7 billion in funding and legal changes to stem the surge in children and families illegally entering the United States, creating new tensions within his party as he works to confront a crisis that is overwhelming the government's ability to hold young migrants. (http://on.wsj.com/1jnW60X)

* Israel stepped up its attacks in what it called the beginning of a prolonged assault on Palestinian militants and their infrastructure in the coastal enclave. (http://on.wsj.com/1xPSRlO)

* Medicare allowed $1.7 billion in 2010 payments to clinical laboratories for claims that raised red flags, according to a report to be released Wednesday, the latest example of how the federal insurance program for the elderly and disabled is susceptible to misspending and abuse. (http://on.wsj.com/1ncG2P0)

* The Justice Department and Citigroup are close to a deal for the bank to pay about $7 billion to settle allegations the bank sold shoddy mortgages in the run-up to the financial crisis. (http://on.wsj.com/TRFG4t)

* NorthStar Realty Finance Corp is in exclusive talks to buy Griffin-American Healthcare REIT II, a large owner of senior housing, skilled nursing facilities, hospitals and other properties, according to two people familiar with the negotiations. The cash-and-stock deal, which would value the real-estate investment trust at $3.5 billion to $3.7 billion, isn't final and could still fall apart. (http://on.wsj.com/1xPMbEq)

* Federal prosecutors suffered the first defeat in their half-decade-long crackdown on insider trading Tuesday with the acquittal of Raj Rajaratnam's younger brother, a bracing reversal after a string of 81 convictions. (http://on.wsj.com/VVXtcK)

* The SEC said a Utah accounting firm and two of its partners botched the audits of a chicken company based in China that faces allegations of defrauding investors. Child Van Wagoner & Bradshaw of Salt Lake City, Utah, along with partners Russell Anderson and Marty Van Wagoner, was deficient in its 2009 and 2010 audits of Yuhe International Inc, a Chinese provider of broiler chickens, the SEC said. (http://on.wsj.com/TRAy0d)

* Amazon, amid tense negotiations with Hachette, proposed letting the publisher's authors keep 100 percent of the revenue from their e-books until a contract is reached. Hachette rejected the proposal. (http://on.wsj.com/1zog0gP)

* The Financial Industry Regulatory Authority is pressing retail brokers for details about how they route customer orders amid mounting concerns some brokers might be sending orders to venues that provide the highest payments but not the best price for investors. (http://on.wsj.com/1r6P5Bu)

* A combative, at times emotional Donald Sterling said in court testimony Tuesday that he is fighting a $2 billion deal to sell the Clippers because he believes the basketball team will be worth more money once its television contracts are renegotiated. (http://on.wsj.com/1lSG0qt)

* Google Cloud Platform offered two terabytes of free storage for a year, through one of its partners, a startup called Panzura. The move highlights the battle among Google , Amazon and Microsoft to provide companies with remote storage, computing power and other technology services, which reduce companies' need to buy and run their own equipment. Some industry insiders predict storage will soon be free. (http://on.wsj.com/1qhLTSb)

* After another attempt to take over Newmont Mining Corp failed in April, many investors have lost patience. They are urging the miner to either rekindle this year's aborted deal with No. 1 Barrick Gold Corp, or break itself up. (http://on.wsj.com/1xQ5oFX)

FT

After delivering a fierce speech to foreign diplomats in Moscow last week where he accused the United States of using cold war tactics, Russian President Vladimir Putin has gone oddly silent following the Ukrainian army's swift advance against pro-Russian separatists.

Hedge funds have taken the decision to reduce their bearish bets that the value of stocks is about to fall, with the share of stocks identified for short selling at its lowest level since before the financial crisis of 2007.

Rengan Rajaratnam, the younger brother of convicted Galleon Group founder Raj Rajaratnam, was on Tuesday cleared of a charge that he conspired to engage in insider trading while working at the $8 billion hedge fund.

Danish oil and shipping group AP Moeller-Maersk revealed a $1.7 billion hit to its Brazilian oil assets, becoming the latest company to face issues trying to exploit the country's deepwater fields.

U.S. drugmaker AbbVie hiked its offer for Shire to 30 billion pounds, even as it urged its shareholders to encourage the UK-listed drugmaker to partake in a friendly deal.

The UK Serious Fraud Office has arrested and questioned four individuals at Airbus as part of a probe its long-standing investigation into alleged corruption in Saudi Arabia by a unit of the planemaker.

NYT

* Citigroup and the Justice Department are nearing a deal that could cost the bank roughly $7 billion to settle a civil investigation into the sale of mortgage investments, people briefed on the matter said on Tuesday. (http://nyti.ms/1me9QdR)

* After just under four hours of deliberation, a federal jury of eight women and four men found Rengan Rajaratnam, 43, not guilty of conspiracy to commit insider trading with his brother. (http://nyti.ms/U2tWfP)

* América Móvil said Tuesday that it would sell off parts of its Mexican unit, an unexpected capitulation by its controlling shareholder, Carlos Slim Helú, to strong new antimonopoly rules. (http://nyti.ms/1ozMWfg)

* A Canadian firm, 1832 Asset Management, disclosed in a filing with the Securities and Exchange Commission on Tuesday that it had sold about 11.5 million shares of American Apparel stock, or about 6.6 percent of the company's outstanding shares, liquidating its entire holding in the company. (http://nyti.ms/1rPNwud)

* New York's attorney general said on Tuesday that he had reached an agreement with Uber, the car-summoning start-up, that would limit the cost of using the company's service during emergencies. The new agreement, according to the attorney general's office, would cap Uber's surge prices during "abnormal disruptions of the market," typically citywide emergencies, in accordance with the City of New York's law against price gouging, passed in 1979. (http://nyti.ms/1kCd4mQ)

* Yelp, the online service increasingly popular on both sides of the Atlantic, has joined the critics formally opposing the European Union's proposed antitrust settlement with Google. Google officials declined to comment on the Yelp complaint. (http://nyti.ms/1jcTTVK)

* Amazon has proposed giving Hachette's authors all the revenue from their e-book sales on Amazon as the parties continue to negotiate a new contract. Hachette's response on Tuesday was to suggest that the retailer was trying to make it commit suicide. (http://nyti.ms/1zoeKdI)

Canada

THE GLOBE AND MAIL

** Toronto Mayor Rob Ford's staff called police after protesters disrupted a press conference on Tuesday, but an officer ended up accusing the mayor's sobriety coach of kicking a demonstrator. A handful of protesters, some of whom removed their shirts, loudly called on the mayor to resign as he spoke out against a proposal to redesign Eglinton Avenue West to make it more attractive to pedestrians and cyclists. (http://bit.ly/1k4MNxH)

** Toronto Councillor Doug Ford said a window on his SUV was smashed on Monday night, and he alleged that the incident may have been politically motivated. The outspoken councillor, who is running the re-election campaign for his brother, Mayor Rob Ford, told reporters at City Hall on Tuesday morning that the rear window on his car had been vandalized. (http://bit.ly/1r6gOT1)

Reports in the business section:

** General Electric Co chairman and chief executive officer Jeff Immelt said Canada's energy industry needs to make the crude wrung from the Alberta oil sands competitive with other sources around the world in terms of greenhouse gas emissions, and is positioning the industrial conglomerate to play a key role. (http://bit.ly/1meIswy)

NATIONAL POST

** A 31-year-old teacher is dead and two others are seriously injured after one or more people opened fire outside a public housing building in North York just after midnight on Tuesday. Abshir Hassan, 31, a supply teacher at Lawrence Heights Middle School, died at the scene, police said. The other two victims are a 22-year-old man and an 18-year-old woman. (http://bit.ly/1pZ1I4w)

** Alleged Anonymous hacker Matt DeHart has been put on suicide watch and his refugee hearing has been postponed. Instead of appearing before a Toronto refugee tribunal Tuesday he was confined in a suicide watch cell after returning to jail from hospital, where he was treated after another suicide attempt. (http://bit.ly/1lTn7DZ)

FINANCIAL POST

** Saskatchewan, and perhaps one or more Atlantic provinces, will join Ontario and British Columbia in Ottawa's proposed national securities watchdog, sources say. Finance Minister Joe Oliver will announce that Saskatchewan will sign onto the fledgling Co-operative Capital Markets Regulator, according to sources. (http://bit.ly/1qiD7mX)

** Canada's banking system isn't as solid as it was a year ago because of the federal government's plan to implement a bail-in regime for domestic, systemically important banks, but there remains little to worry about when it comes to the overall strength of the country's biggest lenders, says Moody's Investor Services Inc. (http://bit.ly/1qUEvQA)

China

CHINA SECURITIES JOURNAL

- A total of 122,727 investors opened A-share trading accounts last week, down 11.7 percent from the week before last.

SHANGHAI SECURITIES NEWS

- The city of Daqing in Heilongjiang province, known as the oil capital of China, has outlined plans to boost development of the photovoltaic industry as part of the city's efforts to move its economy away from traditional energy to new energy sources.

SECURITIES TIMES

- China's finance ministry said it plans to improve subsidies to rural financial institutions in order to direct social funds into the agriculture sector.

SHANGHAI DAILY

- Firms and individuals in the Sino-Singapore Tianjin Eco City on Tuesday received a 2-billion-yuan ($322 million) quota from China's central bank for cross-border yuan investment and borrowing as part of efforts to promote the international use of the yuan. The People's Bank of China has allowed companies in the zone to borrow yuan from banks in Singapore, use equity funds to invest overseas, and individuals to transact yuan under direct investment and current accounts.

CHINA DAILY

- The Chinese government will increase its input and encourage social capital to enter the industry to provide better healthcare services, Premier Li Keqiang said on Tuesday. These moves will help to minimize patients' out-of-pocket expenses and create more quality healthcare resources, he said.

Britain

The Times

FIRMS GET MORE POWER TO FIGHT ENERGY GIANTS

Small companies are to be given more help to challenge large energy suppliers as part of a drive to update or scrap red tape that acts as a "drag on jobs and growth".

The Guardian

LABOUR PLANS PUBLIC CONTRACTS SHAKEUP

Under a Labour government, only social enterprises with a public service mission will be allowed to bid for some government contracts in an effort to break the stranglehold of big corporate suppliers on public procurement, shadow minister Chi Onwurah will say on Wednesday.

The Telegraph

HMRC RAID ON BANK ACCOUNTS GOES AGAINST MAGNA CARTA, SAY MPS

British tax authorities have been accused of attempting to ride roughshod over Magna Carta in pursuit of new powers that will allow them to raid the bank accounts of those who fail to pay their dues.

VINCE CABLE 'CONFIDENT' IN FACE OF A FRESH PFIZER APPROACH

Pfizer would be required to make meaningful commitments to Britain's science base should it resume its takeover play for AstraZeneca in future, the Business Secretary has said.

THE MOST LOYAL SAVERS ARE PAID HALF BANK RATE, REGULATOR FINDS

Banks and building societies are exploiting their most loyal savers with rates that average a fraction of the Bank Rate, the city regulator has found.

Sky News

MOULTON IN TALKS OVER UNIPART RESCUE DEAL

City financier Jon Moulton is in talks to rescue Unipart Automotive, Britain's biggest independent car parts supplier, in a deal that could save more than 1,500 jobs.

GOODWIN HELPS RACK UP 400,000 STG RBS LEGAL BILL

Royal Bank of Scotland (RBS) has spent hundreds of thousands of pounds on law firms acting for Fred Goodwin and other former directors during the early stages of legal actions brought by thousands of its shareholders.

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
FOMC minutes for June 17-18 meeting to be released at 14:00

ANALYST RESEARCH

Upgrades

American Express (AXP) upgraded to Buy from Neutral at Guggenheim
Apollo Investment (AINV) upgraded to Buy from Neutral at SunTrust
Broadcom (BRCM) upgraded to Outperform from Perform at Oppenheimer
CARBO Ceramics (CRR) upgraded to Neutral from Sell at Guggenheim
Deutsche Bank (DB) upgraded to Overweight from Neutral at JPMorgan
GOL Linhas (GOL) upgraded to Outperform from Market Perform at Raymond James
HollyFrontier (HFC) upgraded to Outperform from Market Perform at Wells Fargo
KKR (KKR) upgraded to Outperform from Neutral at Credit Suisse
Royal Dutch Shell (RDS.A) upgraded to Buy from Hold at Deutsche Bank
Schlumberger (SLB) upgraded to Overweight from Neutral at HSBC
Seattle Genetics (SGEN) upgraded to Buy from Neutral at UBS
Umpqua Holdings (UMPQ) upgraded to Equal Weight from Underweight at Barclays

Downgrades

Apollo Global (APO) downgraded to Neutral from Buy at Citigroup
Artisan Partners (APAM) downgraded to Neutral from Buy at Citigroup
BP (BP) downgraded to Hold from Buy at Deutsche Bank
Carlyle Group (CG) downgraded to Neutral from Buy at Citigroup
Garmin (GRMN) downgraded to Underperform from Sector Perform at Pacific Crest
Gigamon (GIMO) downgraded to Buy from Strong Buy at Needham
Gigamon (GIMO) downgraded to Market Perform from Outperform at William Blair
Gigamon (GIMO) downgraded to Neutral from Buy at Goldman
Gigamon (GIMO) downgraded to Underperform from Neutral at BofA/Merrill
International Paper (IP) downgraded to Sector Perform from Outperform at RBC Capital
Louisiana-Pacific (LPX) downgraded to Sector Perform from Outperform at RBC Capital
Marvell (MRVL) downgraded to Underperform from Perform at Oppenheimer
McGraw Hill Financial (MHFI) downgraded to Market Perform at Raymond James
Moody's (MCO) downgraded to Market Perform from Outperform at Raymond James
Plum Creek Timber (PCL) downgraded to Sector Perform from Outperform at RBC Capital
Potash (POT) downgraded to Neutral from Overweight at JPMorgan
RGS Energy (RGSE) downgraded to Market Perform from Outperform at Cowen
Taminco (TAM) downgraded to Neutral from Buy at Citigroup
Vectren (VVC) downgraded to Hold from Buy at KeyBanc

Initiations

21st Century Fox (FOXA) initiated with an Overweight at Barclays
Ardmore Shipping (ASC) initiated with a Buy at Canaccord
Brixmor (BRX) initiated with an Outperform at RW Baird
CBS (CBS) initiated with an Equal Weight at Barclays
CTPartners (CTP) initiated with a Buy at B. Riley
Cavium (CAVM) initiated with an Outperform at Imperial Capital
ConnectOne Bancorp (CNOB) initiated with a Buy at Guggenheim
DHT Holdings (DHT) initiated with a Buy at Canaccord
Discovery (DISCA) initiated with an Overweight at Barclays
Disney (DIS) initiated with an Equal Weight at Barclays
F5 Networks (FFIV) initiated with a Buy at DA Davidson
HomeAway (AWAY) initiated with a Neutral at Macquarie
ITT Corp. (ITT) initiated with a Perform at Oppenheimer
Infosys (INFY) initiated with a Hold at Stifel
KLA-Tencor (KLAC) assumed with an Overweight at Piper Jaffray
Kate Spade (KATE) initiated with an Outperform at BMO Capital
Lam Research (LRCX) assumed with an Overweight at Piper Jaffray
MEDNAX (MD) initiated with a Positive at Susquehanna
Navios Acquisition (NNA) initiated with a Hold at Canaccord
NetApp (NTAP) initiated with a Buy at DA Davidson
Nordic American Tankers (NAT) initiated with a Sell at Canaccord
Regency Energy Partners (RGP) reinstated with an Equal Weight at Barclays
SAIC (SAIC) initiated with a Hold at Stifel
SPX Corp. (SPW) initiated with a Hold at Jefferies
Scorpio Tankers (STNG) initiated with a Hold at Canaccord
TCP Capital (TCPC) initiated with a Neutral at Citigroup
Time Warner (TWX) initiated with an Equal Weight at Barclays
Trulia (TRLA) initiated with an Outperform at Macquarie
Tsakos Energy (TNP) initiated with a Buy at Canaccord
Vantiv (VNTV) coverage resumed with an Overweight at Morgan Stanley
Viacom (VIAB) initiated with an Underweight at Barclays
Winnebago (WGO) initiated with a Neutral at SunTrust
Zillow (Z) initiated with an Outperform at Macquarie

COMPANY NEWS

Boeing (BA), Emirates finalized an order for 777Xs valued at $56B
KKR (KKR) acquired majority interest in OEG Offshore, terms not disclosed
Alcoa (AA) expects Q3 EPS to 'continue to build on strong second quarter,' continues to see 2014 global aluminum demand growth of 7%
Salix (SLXP) said it will combine with Cosmo Technologies. The transaction is expected to be modestly accretive to Salix’s EPS in FY16 and increasingly accretive thereafter
Bob Evans (BOBE) sees 1Q15 SSS down 2.5%-down 3%; sees Q2 SSS flat to up low single digits; sees Q3, Q4 SSS up in high single-digit
Gaming Partners (GPIC) announced that Michael Mann resigned from position of CFO

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Alcoa (AA), AeroVironment (AVAV), Bob Evans (BOBE)

Companies that missed consensus earnings expectations include:
Synergy Resources (SYRG), Healthcare Services (HCSG), Container Store (TCS)

AeroVironment (AVAV) sees FY15 revenue $250M-$270M, consensus $256.2M
Silicon Image (SIMG) lowers Q2 revenue guidance to $58M-$60.5M from $71M-$76M
Bob Evans (BOBE) sees Q1 EPS 6c-12c, may not compare to consensus 54c
Container Store (TCS) now sees FY14 EPS 49c-54c, consensus 57c
Bob Evans (BOBE) sees FY14 EPS $1.90-$2.20, consensus $2.56

NEWSPAPERS/WEBSITES

Citigroup (C) near $7B settlement with U.S. over mortgage probe, NY Times reports
Allergan (AGN) plans broad restructuring plan, Bloomberg says
Amazon (AMZN) proposes e-book authors keep 100% of revenue, WSJ reports
AbbVie (ABBV) forced to retract CEO comments about in Shire (SHPG) takeover battle, Reuters reports
Pentagon says no decision has been made on whether grounded F-35s (LMT) will be ready for air show, Reuters reports
GM (GM) CEO, general counsel to testify before Senate subcommittee, WSJ reports
America Movil (AMX) to break up Mexico unit by divesting assets, Bloomberg reports
Delta Air Lines (DAL) shares look cheap, Barron's says

SYNDICATE

bluebird bio (BLUE) 3M share Secondary priced at $34.00
Remark Media (MARK) files to sell 2.07M shares for holders
Rentech (RTK) files to sell up to 45.05M shares for holders
Ultragenyx (RARE) 2.017M share Secondary priced at $40.00

• Bubble Paranoia Setting in as S&P 500 Surge Stirs Angst (BBG)
• But how will math PhDs determine "fair value" - Wall Street Techs Take Secrets to Next Job at Their Peril (BBG)
• U.S., EU Escalate Russia Sanctions as Putin Holds Firm (Bloomberg)
• Australia Becomes First Developed Nation to Repeal Carbon Tax (WSJ)
• Gaza humanitarian truce goes into force, hours after tunnel clash (Reuters)
• Barclays, Deutsche Bank Said to Face U.S. Senate Hearing (BBG)
• ECB Asset Buying Far Off and May Not Come, Hansson Says (BBG)
• Time Warner win would make Murdoch U.S. media king (Reuters)
• Costly Vertex Drug Is Denied, and Medicaid Patients Sue (WSJ)
• China Rallying for All Wrong Reasons to Top-Rated Analyst (BBG)
• GM recalls some cars with problematic switches; judges others safe (Reuters)
• Boeing Buoyed at Show With $46 Billion in Day-Three Sales (BBG)
• Reserves Break $3 Trillion Mark in Emerging Markets (BBG)
• China Plays a Big Role as U.S. Treasury Yields Fall (WSJ)

Overnight Media Digest

WSJ

* Israel agreed to a five-hour cease-fire on Thursday to allow aid into Gaza as the country came under pressure over mounting civilian casualties that included four Palestinian boys killed as they played on a beach. At the same time, officials warned that the chances of a ground invasion of Gaza are very high and growing with each day that militants keep firing rockets into Israel. (http://on.wsj.com/1jzWlWx)

* After almost a decade of heated political debate, Australia has become the world's first developed nation to repeal carbon laws that put a price on greenhouse gas emissions. (http://on.wsj.com/WcXOrx)

* The Obama administration escalated its sanctions against Russia over its alleged interference in Ukraine, imposing restrictions on the Russian state-controlled oil giant Rosneft and other top firms. (http://on.wsj.com/Wc8uq9)

* Vertex Pharmaceuticals' $300,000-a-year cystic-fibrosis drug has sparked a legal battle in Arkansas, illustrating the dilemma faced by cash-strapped government insurance programs. (http://on.wsj.com/1nyBPk8)

* Time Warner rejected an $80 billion offer made by Rupert Murdoch's Twenty-First Century Fox Inc that would have united the media giants. (http://on.wsj.com/1pbBsyP)

* The retail sector continues to confound billionaire investor Warren Buffett and his Berkshire Hathaway partner Charlie Munger, who have bemoaned their bad luck in retail investing for years. (http://on.wsj.com/1jA2DWi)

* Bank of America Corp and the Justice Department remain far apart on a possible mortgage-securities settlement even though the bank offered $13 billion to resolve the civil probe. The bank on Wednesday announced it had reached a $650 million settlement in a mortgage-securities lawsuit brought by American International Group Inc. (http://on.wsj.com/WiU73U)

* Low interest rates are continuing to pressure banks at a time when lending activity is picking up. U.S. Bancorp and PNC Financial Services Group Inc the two largest U.S. regional banks by assets, saw a key measure of lending profitability decline in the second quarter, due in part to low rates. (http://on.wsj.com/UdkmXE)

FT

Time Warner rejected an audacious $80 billion bid from Rupert Murdoch's Twenty-First Century Fox on Wednesday, setting up a stand-off between two of the biggest names in media.

Dubai's Emirates could buy an additional 60 to 80 Airbus A380s if the four-engined superjumbo were revamped with more fuel-efficient engines by 2020, the airline's Chief Executive Officer Tim Clark said.

If Apple Inc loses its appeal in a price-fixing case, it has agreed to pay $400 million to U.S. consumers as compensation for overcharging for ebooks.

Cyber attacks on eBay user data dragged on the online retailer's quarterly sales and drove it to scale back its full-year revenue guidance.

A substantial minority of Experian shareholders revolted against the world's biggest credit checking company's decision to replace its chairman with its chief executive officer, saying it contravened Britain's Corporate Governance Code.

NYT

* Microsoft Corp plans to announce layoffs on Thursday that will substantially exceed the largest layoffs in the company's history, according to several people briefed on the decision who spoke only on the condition of anonymity. Previously, the largest layoffs were in 2009, when 5,800 or so people were affected. (http://nyti.ms/1r5aMCV)

* Rupert Murdoch's 21st Century Fox Inc said it has made an $80 billion takeover offer for Time Warner Inc, which would be the biggest media deal in more than a decade. While Time Warner has rebuffed his effort and no talks are underway, Murdoch is determined and unlikely to walk away anytime soon, people briefed on the matter said. (http://nyti.ms/1nI1try)

* Funding Circle, a so-called peer-to-peer lending network, announced that it had raised $65 million in new funding and appointed Robert Steel, the chief executive of Perella Weinberg, to its board. (http://nyti.ms/1paKzQi)

* Apple Inc might have to pay $400 million to consumers to settle charges of conspiring with publishers to raise e-book prices. Apple last month agreed to settle a class action brought by attorneys general in 33 states. They had sought hundreds of millions of dollars in damages from Apple, claiming it had colluded with book publishers to inflate e-book prices. (http://nyti.ms/1oKB3BT)

* Once again, Bank of America's troubled past is clouding its present and future. After months of negotiations, a possible settlement with the Justice Department is in jeopardy over a disagreement on the bank's liability for the suspected mortgage misdeeds of its Countrywide Financial and Merrill Lynch units, people briefed on the matter said. (http://nyti.ms/1qJ5Q4K)

* The Federal Reserve's chairwoman, Janet Yellen, said on Wednesday that it would be a "grave mistake" for Congress to adopt legislation proposed by House Republicans constraining the Fed's management of monetary policy. (http://nyti.ms/1mVyUGi)

Canada

THE GLOBE AND MAIL

* The Royal Canadian Mounted Police are expected to lay charges against Senator Mike Duffy on Thursday in connection with improper expense claims charged to taxpayers, a development that would add fresh fuel to the controversy surrounding this Prime Minister Stephen Harper appointee to the Red Chamber. (http://bit.ly/1l6XfoC)

* The Royal Canadian Navy has opened another investigation into three incidents of alleged misconduct in San Diego by the crew of HMCS Whitehorse, including whether there was a "failure of leadership." (http://bit.ly/1nzCyli)

Reports in the business section:

* Barrick Gold Corp's new chairman John Thornton eliminated the chief executive position in a management shakeup that sees Jamie Sokalsky leave as CEO and cements the former banker's authority at the top of the world's biggest gold producer. (http://bit.ly/1tUN5kh)

NATIONAL POST

* Ontario's opposition parties said on Wednesday the Liberal government is not being honest with people about its plans to "maximize" the value of provincial assets like the Liquor Control Board, Ontario Power Generation and Hydro One. (http://bit.ly/1mhSKHk)

* A graduate student from Tunisia arrested over an Al-Qaeda plot to derail a Toronto-bound train tried to send $3,000 to terrorists in Syria and Mali, a lawyer said on Wednesday. The terror financing allegation against Chiheb Esseghaier came as a New York judge sentenced one of his former associates, Ahmed Abassi, to 15 months for U.S. immigration violations. (http://bit.ly/1oLEo3E)

FINANCIAL POST

* In a sign of the mounting tensions over new energy infrastructure, Enbridge Inc has raised the possibility of an "attack" on one of its pipelines. (http://bit.ly/UbYQSK)

* In a move that adds uncertainty to PetroChina's plans for Canada, Zhiming Li, the PetroChina executive who built and headed the Chinese company's operations in this country for the past four years, has been arrested by the Chinese government. (http://bit.ly/1r60VN6)

China

CHINA SECURITIES JOURNAL

- Qin Hong, the director of the policy research centre in the Ministry of Housing and Urban, said they would strive to curb property investment and speculative demand to protect reasonable housing demand in the next six months with a hope that the market will be better than the first half of the year.

- The Guangxi Zhuang Autonomous Region plans to expand the scale of its investment and speed up railway construction to invest a total of 15 billion yuan ($2.42 billion) in 2014 which can go up to 20 billion yuan. And, the investment scale for the coming years will be 30 billion yuan per year.

- China Life Insurance Co Ltd said its insurance premium income nearly hit 200 billion yuan in the first half of this year.

SHANGHAI SECURITIES NEWS

- Bank of Nanjing said it would raise 8 billion yuan through a private placement.

CHINA BUSINESS NEWS

- China's central authorities issued guidelines on Wednesday on the supply and use of government vehicles in an effort to cut spending, which industry experts predict would reduce expenditure by 150 billion yuan per year.

- Banks' non-performing loans in Fujian province increased more than 90 percent in 2013, according to official data released on Wednesday.

21st CENTURY BUSINESS HERALD

- Regulators are considering easing the lending policy for China's small companies, which may allow them to extend loans.

China Daily

- Guangdong, China's largest provincial economy, plans to make further cuts in obsolete manufacturing capacity for iron, steel and cement by 2017, according to a draft plan by the province's development and reform commission.

- Japanese Prime Minister Shinzo Abe is losing the public's trust thanks to his lifting of the ban on collective self defense and other rightists moves, China Daily said in an editorial.

Britain

The Times

ASHLEY PULLS OUT OF 200 MLN STG SHARE PLAN

The billionaire founder of Britain's biggest sportswear chain, Sports Direct, has withdrawn from a controversial bonus scheme just weeks after forcing through the award. (http://thetim.es/1l5BCVM)

SHAREHOLDER BACKLASH FORCES ICAP TO REVIEW BONUSES

Interdealer broker ICAP is to go into talks with shareholders over its executive bonus scheme after a third of investors voted against its pay policy at the annual meeting. (http://thetim.es/1kxiArm)

FRENCH ACCUSE ROYAL MAIL OF BREACHING ANTITRUST LAW

Royal Mail has been caught up in a competition investigation after French regulators accused one of its subsidiaries of breaching antitrust laws. (http://thetim.es/Ud5EQm)

CONFUSED.COM ABOUT CAR INSURANCE? SO IS THE CITY REGULATOR

Britain's biggest price comparison websites are being ordered to address insurance listings that mislead or confuse their users.

The websites sometimes failed to provide the right information to users buying motor and household insurance, the Financial Conduct Authority said in a report. (http://thetim.es/1jQFfEn)

The Guardian

REGULATOR'S REPORT ON BANKS PROMPTS SPECULATION ABOUT COMPETITION INQUIRY

Britain's new competition watchdog will release the outcome of an initial study into the banking sector on Friday, prompting speculation about a full-blown investigation into the industry. (http://bit.ly/1tTfrvl)

The Telegraph

RUPERT MURDOCH'S LEGACY CAN ONLY BE SECURED WITH TOTAL MEDIA CONTROL

With his jaw-dropping $80 billion approach to buy U.S. media giant Time Warner Inc, Rupert Murdoch has made his intentions crystal-clear: he wants to become the undisputed global "king of content", and is willing to pay a fortune at the top of the market to get his way.

The deal was rebuffed, of course, but Murdoch, who has bounced back from the UK phone-hacking scandal and the split of his corporate empire with remarkable ease, will be back. (http://bit.ly/1mW1Tty)

THE LETTER SENT TO LLOYDS CUSTOMERS UNDER A LAW FIRM'S NAME

Lloyds Banking Group has sent Chairman of the Treasury Select Committee Andrew Tyrie an example of the letters it sent customers who owed the bank money under the name of a defunct law firm. (http://bit.ly/1r52kDH)

FIRSTGROUP VOWS 'DEEP REVIEW' OF PAY AFTER INVESTOR REVOLT

FirstGroup Chairman John McFarlane yesterday pledged a "deep review" of the company's executive pay policies in the wake of criticism of the near 2 million pound ($3.43 million)package received by Chief Executive Tim O'Toole last year. (http://bit.ly/1rscptL)

Sky News

INVESTORS REVOLT AGAINST GULF KEYSTONE BOSS

Some investors in Gulf Keystone Petroleum, the London-listed oil explorer, have lodged votes opposing the re-election of founder Todd Kozel as an executive director. (http://bit.ly/UabXEc)

The Independent

POUND SOARS AS INFLATION LEAPS AND FED CHIEF JANET YELLEN TALKS DOWN U.S. ECONOMY

The pound surged to new six-year highs against the dollar last night as an inflation shock fuelled expectations of UK interest rate rises while a dovish Federal Reserve Chair Janet Yellen warned over "false dawns" for the U.S. economy. (http://ind.pn/1paXMbL)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of July 12 at 8:30--consensus 310K
Housing starts for June at 8:30--consensus up 1.9% to 1.02M rate
Housing permits for June at 8:30--consensus up 3.0% to 1.035M rate
Philadelphia Fed business conditions index for July at 10:00--consensus 16.9

ANALYST RESEARCH

Upgrades

Aflac (AFL) upgraded to Outperform from Market Perform at Raymond James
Allegiant Travel (ALGT) upgraded to Buy from Fair Value at CRT Capital
Clarcor (CLC) upgraded to Outperform from Neutral at RW Baird
Endurance Specialty (ENH) upgraded to Buy from Neutral at Janney Capital
First Republic Bank (FRC) upgraded to Strong Buy from Outperform at Raymond James
International Game (IGT) upgraded to Neutral from Sell at Goldman
Kayne Anderson (KED) upgraded to Buy from Hold at Stifel
SM Energy (SM) upgraded to Buy from Neutral at Guggenheim
Time Warner (TWX) upgraded to Buy from Neutral at Guggenheim
Time Warner (TWX) upgraded to Buy from Neutral at Janney Capital

Downgrades

Charter (CHTR) downgraded to Hold from Buy at Jefferies
Covidien (COV) downgraded to Hold from Buy at Needham
GNC Holdings (GNC) downgraded to Hold from Buy at Jefferies
International Game (IGT) downgraded to Market Perform from Outperform at Wells Fargo
PetSmart (PETM) downgraded to Sector Perform from Outperform at RBC Capital
Rexam (REXMY) downgraded to Hold from Buy at Deutsche Bank

Initiations

A10 Networks (ATEN) initiated with a Neutral at Buckingham
ACI Worldwide (ACIW) initiated with an Outperform at BMO Capital
AIG (AIG) initiated with an Outperform at RBC Capital
Aerohive Networks (HIVE) initiated with a Buy at Buckingham
Agilent (A) initiated with a Neutral at Citigroup
Antero Resources (AR) initiated with a Buy at Canaccord
Aruba Networks (ARUN) initiated with a Neutral at Buckingham
Bed Bath & Beyond (BBBY) initiated with a Neutral at Nomura
Blackhawk (HAWK) initiated with a Market Perform at BMO Capital
Bruker (BRKR) initiated with a Buy at Citigroup
Cabot Oil & Gas (COG) initiated with a Hold at Canaccord
CalAmp (CAMP) initiated with an Outperform at William Blair
Container Store (TCS) initiated with a Hold at BB&T
EQT Corporation (EQT) initiated with a Buy at Canaccord
Esterline (ESL) initiated with a Buy at Drexel Hamilton
Ethan Allen (ETH) initiated with a Neutral at Nomura
Fiserv (FISV) initiated with an Outperform at BMO Capital
FleetCor (FLT) initiated with a Neutral at Piper Jaffray
Fleetmatics (FLTX) initiated with an Overweight at Piper Jaffray
Gastar Exploration (GST) initiated with a Buy at Canaccord
Global Payments (GPN) initiated with a Market Perform at BMO Capital
Gulfport Energy (GPOR) initiated with a Buy at Canaccord
Heartland Payment (HPY) initiated with a Market Perform at BMO Capital
Illumina (ILMN) initiated with a Buy at Citigroup
Jazz Pharmaceuticals (JAZZ) initiated with a Neutral at SunTrust
Mallinckrodt (MNK) initiated with an Outperform at Oppenheimer
Meritor (MTOR) initiated with an Overweight at Piper Jaffray
Mettler-Toledo (MTD) initiated with a Neutral at Citigroup
Navistar (NAV) initiated with an Overweight at Piper Jaffray
PerkinElmer (PKI) initiated with a Buy at Citigroup
Pier 1 Imports (PIR) initiated with a Buy at Nomura
Range Resources (RRC) initiated with a Buy at Canaccord
Restoration Hardware (RH) initiated with a Buy at Nomura
Rex Energy (REXX) initiated with a Hold at Canaccord
Rice Energy (RICE) initiated with a Buy at Canaccord
Riverbed (RVBD) initiated with a Neutral at Buckingham
Seventy Seven Energy (SSE) initiated with an Equal Weight at Morgan Stanley
Sigma-Aldrich (SIAL) initiated with a Neutral at Citigroup
Thermo Fisher (TMO) initiated with a Buy at Citigroup
Vantiv (VNTV) initiated with a Market Perform at BMO Capital
Waters (WAT) initiated with a Neutral at Citigroup
Williams-Sonoma (WSM) initiated with a Buy at Nomura

COMPANY NEWS

Liberty Global (LBTYA) acquired a 6.4% stake in ITV (ITVPF) from BSkyB (BSYBY) for GBP481M. Liberty said that while it does not intend to make a takeover offer for ITV, it does reserve the right to announce an offer within the next six months
Starboard Value announced that it has sent a letter to Darden's (DRI) board seeking new leadership
Carl Icahn said he has not sold any shares of Herbalife (HLF); Icahn also said Apple (AAPL) CEO Tim Cook doing a "good job" and "disappointed" Dollar General (DG) CEO leaving
Legion Partners called on Perry Ellis (PERY) to review strategic alternatives
Danaher (DHR) said it would acquire Siemens Healthcare Diagnostics' (SIEGY) clinical microbiology unit

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
eBay (EBAY), KeyCorp (KEY), Fifth Third Bancorp (FITB), Baker Hughes (BHI), Orbital (ORB), First Cash Financial (FCFS), WNS Holdings (WNS), UnitedHealth (UNH), Danaher (DHR), HNI Corporation (HNI), Navient (NAVI), Blackhawk (HAWK), BankMutual (BKMU), Central Valley Community Bancorp (CVCY), United Rentals (URI), SanDisk (SNDK), Select Comfort (SCSS), RLI Corp. (RLI), Plexus (PLXS)

Companies that missed consensus earnings expectations include:

Mattel (MAT), Novartis (NVS), El Paso Pipeline (EPB), Kinder Morgan (KMI), Yum! Brands (YUM), Universal Forest (UFPI), Platinum Underwriters (PTP), Las Vegas Sands (LVS)

Companies that matched consensus earnings expectations include:
East West Bancorp (EWBC)

NEWSPAPERS/WEBSITES

Siemens (SIEGY) preparing bid for Dresser-Rand (DRC), Manager Magazin reports
Microsoft (MSFT) layoffs could be announced today, NY Times reports
Report says VW (VLKAY) in talks to buy Fiat (FIATY), Reuters says
General Motors (GM) hires outside law firm to review litigation practices, WSJ says
Defense Department to seek rival bids for satellite launches, WSJ reports (BA, LMT)
Intel (INTC) looks like a hold, Barron's says

SYNDICATE

CareDx (CDNA) 4M share IPO priced at $10.00
Colony Financial (CLNY) files to sell 15M in common stock
Orbitz (OWW) files to sell 20M shares of common stock
Roka Bioscience (ROKA) 5M share IPO priced at $12.00
TreeHouse Foods (THS) 4.3M share Secondary priced at $75.50

• Moscow fights back after sanctions; battle rages near Ukraine crash site (Reuters)
• On Hold: Merkel Gives Putin a Blunt Message (WSJ)
• Argentina’s Default Clock Runs Out as Debt Talks Collapse (BBG)
• Argentina braces for market reaction to second default in 12 years (Reuters)
• Banco Espirito Santo Plunges After Posting 3.6 Billion-Euro Loss (BBG)
• GOP Says Lerner Emails Show Bias Against Conservatives (WSJ)
• Adidas Plunges After Cutting Forecast on Russia, Golf (BBG)
• Londoners Cashing in Flee to Suburbs as Home Rally Wanes (BBG)
• BNP Paribas Reports Record $5.79 Billion Quarterly Loss (WSJ)
• Swiss Banks Send U.S. Client Data Before Cascade of Settlements (BBG)
• Putin Sows Doubt Among Stock Bears Burned by 29% Rebound (BBG)
• China diners test McDonald's, Yum says food scare hurts KFC, Pizza Hut sales (Reuters)
• Netanyahu vows to complete Gaza tunnels destruction (Reuters)
• Employees’ Pay in U.S. Is Smaller Slice of Income Pie (BBG)

Overnight Media Digest

WSJ

* Talks aimed at a last-minute settlement between Argentina and holdout creditors collapsed late Wednesday, and a court-appointed mediator said the country would "imminently" be in default. (http://on.wsj.com/1oNORjb)

* Johnson & Johnson, which already suspended sales of a surgical tool that has been blamed for spreading a dangerous cancer in women, plans to tell doctors world-wide to return any devices now on shelves. (http://on.wsj.com/1uIVJTz)

* Venezuela, strapped for cash at home and staring down costly litigation overseas, is considering a deal for its U.S.-based refinery company Citgo Petroleum Corp as well as a stake in a refinery run with Exxon Mobil Corp, according to a Citgo document and people familiar with the matter. (http://on.wsj.com/WNYhRw)

* The head of Samsung's mobile division, J.K. Shin, is facing pressure as weakening phone sales propel the company toward a third straight quarter of operating-profit declines. (http://on.wsj.com/1ocTlux)

* Federal Reserve officials delivered a modestly more upbeat assessment of the economy Wednesday amid a second-quarter growth rebound and deepening debate inside the central bank about when to start raising interest rates. (http://on.wsj.com/1s5gG7z)

* A federal judge in New York ordered Bank of America Corp to pay $1.27 billion as a penalty for a case involving Countrywide Financial Corp.'s "Hustle" mortgage program. (http://on.wsj.com/1n4XosC)

* Private-equity firms are increasingly buying companies from each other, a shift driven in part by the relative simplicity of completing such acquisitions. (http://on.wsj.com/1oMWer8)

* Barclays Plc swung to a net profit in the second quarter but is under renewed pressure in the United States after authorities extended a non-prosecution agreement to cover a probe into alleged foreign-exchange manipulation. (http://on.wsj.com/1qpGFnc)

* E.W. Scripps Co and Journal Communications Inc struck a deal to put their newspaper operations into one company and their broadcast assets into another, following in the footsteps of rivals. The companies plan a series of spinoffs and stock-based mergers that would hand Journal Communications' local-television and radio stations to E.W. Scripps and E.W. Scripps newspapers to Journal Communications. (http://on.wsj.com/UMHigk)

* Puerto Rico's cash-strapped electric power authority is facing a critical deadline on Thursday to extend or make payments on lines of credit with banks or face a possible restructuring of about $9 billion in total debts. (http://on.wsj.com/1lZg6Cx)

FT

A judge ordered Bank of America to pay $1.3 billion for a "brazen fraud" in which bank staff sold toxic mortgages to government-backed mortgage companies Fannie Mae and Freddie Mac.

Snapchat, an app that lets users send messages that disappear after a few seconds, has been in talks about selling a stake to Chinese internet group Alibaba Group <IPO-BABA.N> as part of a funding round that could value it at more than $10 billion, according to people familiar with the discussions.

AMC Networks is in exclusive talks to buy a near-50 percent stake in the BBC's flagship BBC America channel, according to people familiar with the situation.

Jean-Claude Juncker, the incoming European Commission president, is considering creating an EU financial services directorate charged with regulating the London financial scene and ensuring stability in the region.

The Glazer family is planning to sell about 5 percent of its stake in Manchester United, taking advantage of the football club's rising share price after its 750 million pound ($1.27 billion) kit supply deal with Adidas. The sale will leave the Glazer family with about 83 percent of the club in its hands.

NYT

* Argentina failed to make payments on its government bond, and a court-appointed mediator said that it would "imminently be in default." (http://nyti.ms/1lZn9es)

* Energy companies executives are now acknowledging that the escalating tensions could sharply hurt companies with major investments in Russia. (http://nyti.ms/1tvYcPH)

* Bitcoin has found another taker. On Wednesday, the Wikimedia Foundation, the nonprofit organization that operates Wikipedia, announced that it would allow people to make donations using bitcoin, becoming the latest adopter of the virtual currency as a payment option. (http://nyti.ms/1uJdsKk)

* In an escalation of the confrontation between the United States attorney in Manhattan, Preet Bharara, and Andrew Cuomo over the governor's cancellation of his own anti-corruption commission, Bharara has threatened to investigate the Cuomo administration for possible obstruction of justice or witness tampering. (http://nyti.ms/1xCDgUJ)

* Nordstrom plans to announce on Thursday that it has agreed to purchase Trunk Club, a five-year old website that sells about 100 brands of men's apparel, for an undisclosed amount. It is the latest sign that men are not the only ones taking their sartorial habits seriously. (http://nyti.ms/1oOii4G)

* Industry trade groups quickly signaled their intention to ask the federal courts to overturn a ruling that holds McDonald's liable for the actions of its franchisees. (http://nyti.ms/1tw0qi0)

* Bank of America and federal prosecutors have accelerated their negotiations to resolve an investigation into the bank's sale of toxic mortgage securities before the financial crisis. (http://nyti.ms/1s5U0mB)

* AMC Networks, the home of AMC, SundanceTV and IFC channels, is in talks to acquire close to a 50 percent stake in BBC America, the United States television network owned by the commercial arm of the BBC, according to people briefed on the discussions. (http://nyti.ms/WOam9i)

* When Snapchat spurned takeover interest from the likes of Facebook and Google, investors scoffed at the audacity of the photo messaging service. But the start-up may have the last laugh. Snapchat has held talks to sell a stake to the Alibaba Group <IPO-BABA.N>, the Chinese Internet giant, people briefed on the matter said on Wednesday. (http://nyti.ms/1zxRYiG)

Canada

THE GLOBE AND MAIL

* Communications Security Establishment Canada intercepts citizens' private messages without judicial warrants, in its fight against Chinese espionage and other cyberthreats, a document obtained by the paper showed. The 22-page "Operational Procedures for Cyber Defence" speaks about how the electronic-intelligence agency can log, store and study volumes of e-communications that touch government computer networks - including "private communications" of Canadians not themselves thought to be hackers.

Minster of National Defence Rob Nicholson, who approves such surveillance and is provided with statistics about its risks, is the only outsider to know full details about the tradeoffs. (bit.ly/1k8SW1d)

* The Supreme Court of Canada will release its decision Thursday on whether confessions elicited from so-called Mr Big police sting operations can be used in court after the technique helped convict a Newfoundland man of killing his two daughters. (bit.ly/1qMNBzE)

In the business section:

* Barrick Gold Corp took a $500 million charge on its Saudi Arabian copper project and appointed two more independent directors, including a former Goldman Sachs Group Inc banker who used to work closely with the company's new chairman John Thornton. (bit.ly/1psOVnr)

NATIONAL POST

* They sit in the Red Chamber for an average of about 70 days a year. But Canada's senators don't seem all that keen to have the public see what goes on in there. In a tentative baby step toward transparency, the Senate is considering the installation of video cameras in its chamber, but the two-month pilot project would only see the footage directed to an internal feed. (bit.ly/1s6iMUP)

* More than two-thirds of Canadians want marijuana laws softened, says an opinion poll conducted for the federal government. And while a small majority believes companies should not be permitted to sell marijuana just as they sell alcohol and cigarettes, it's clear many people have no problem with the proposition. (bit.ly/1rSEYDf)

FINANCIAL POST

* The revelation that accounting issues will force Penn West Petroleum Ltd to restate more than four years worth of financial results isn't the only thing raising the eyebrows of corporate governance experts. Among the biggest concerns is why Penn West's own audit committee is conducting the internal review of the firm's accounting practices. (bit.ly/UCWtsH)

* A new poll shows that while Albertans are rapidly ramping up household debt, Ontarians are paying it down. The Bank of Montreal report says average household debt in Alberta is C$124,838, almost double that of average Ontario household debt which shrunk over the past year. (bit.ly/Xj4CEx)

China

SECURITIES TIMES

China's Insurance Regulatory Commission has issued guidance allowing insurers to invest in asset-backed securities.

21ST CENTURY HERALD

The first test for a recently-announced scheme that allows Hong Kong and mainland investors to buy stocks in each other's market will take place on Aug. 11.

CHINA DAILY

China's increasing number of flight delays has driven brisk sales of flight-delay insurance policies in the past two weeks, especially on routes in eastern and central parts of China, travel agencies said.

Britain

The Times

FOR BANKERS, CLAWBACK MEANS A SEVEN-YEAR HITCH

Banks and building societies face a bill of 260 million pounds ($439.63 million) to put in place strict new rules that will overhaul the way lenders and regulators oversee finance professionals and will allow the clawback of bonuses up to seven years after they are awarded. (http://thetim.es/Xh8YMm)

ENERGY FIRMS DOUBLE PROFITS IN JUST 12 MONTHS

Energy firms are set to double their profits in the space of 12 months after refusing to pass on to customers huge falls in the cost of wholesale oil and gas. (http://thetim.es/1lYwNxX)

The Guardian

BARCLAYS' PPI CLAIMS RISE BY 900 MLN STG AS PROFITS FALL

The cost of the payment protection insurance scandal has soared again after Barclays set aside another 900 million pounds to cover the costs of compensating customers mis-sold the insurance product. (http://bit.ly/1nKltdt)

CENTRICA IN TALKS WITH GOVERNMENT OVER IMPACT OF RUSSIA SANCTIONS

Britain's largest domestic energy supplier, Centrica , is in talks with the government as fears mount that a worsening stand-off with Russia could undermine an important power deal. (http://bit.ly/1rH55cQ)

HSBC SHUTS ACCOUNTS OF MUSLIM ORGANISATIONS, INCLUDING FINSBURY PARK MOSQUE

Three Muslim organisations, including the Finsbury Park mosque, are demanding answers from HSBC after being told by the bank that their accounts were being shut down. (http://bit.ly/1zx8VJY)

The Telegraph

U.S. CABLE GIANT AMC 'IN TALKS' TO TAKE 50 PERCENT STAKE IN BBC AMERICA

AMC Entertainment, the U.S. cable TV broadcaster home to such hits as 'The Walking Dead' and 'Mad Men', is in talks to buy a stake of around 50 percent in BBC America, according to reports. (http://bit.ly/1k8asmd)

STRONG POUND PLAYS HAVOC WITH UK PLC

The damaging impact the strong pound is having on UK exporters and companies with sizeable operations abroad was laid bare on Wednesday, as British American Tobacco, National Express, ITV and Barclays all warned that the appreciation of sterling had put a dent in profits and revenues. (http://bit.ly/WNMIcT)

Sky News

CO-OP REVAMP GOES ON WITH SECURITY ARM SALE

The restructuring of the Co-operative Group is poised to continue with the sale of its security arm in a deal that will raise money to help shore up its troubled finances. (http://bit.ly/1pGodFi)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of July 26 at 8:30--consensus 305K
Chicago PMI business barometer index for July at 9:45--consensus 63.2

ANALYST RESEARCH

Upgrades

AXIS Capital (AXS) upgraded to Market Perform from Underperform at BMO Capital
Alexandria Real Estate (ARE) upgraded to Outperform from Sector Perform at RBC Capital
AllianceBernstein (AB) upgraded to Buy from Neutral at Citigroup
BOK Financial (BOKF) upgraded to Market Perform from Underperform at BMO Capital
Booz Allen (BAH) upgraded to Outperform from Neutral at Credit Suisse
Cliffs Natural (CLF) upgraded to Market Perform from Underperform at Bernstein
Ecolab (ECL) upgraded to Overweight from Neutral at JPMorgan
Huntington Bancshares (HBAN) upgraded to Outperform from Sector Perform at RBC Capital
Lumber Liquidators (LL) upgraded to Market Perform at Raymond James
Open Text (OTEX) upgraded to Outperform from Neutral at Credit Suisse
Praxair (PX) upgraded to Overweight from Equal Weight at First Analysis
Raymond James (RJF) upgraded to Positive from Neutral at Susquehanna
Sallie Mae (SLM) upgraded to Buy from Neutral at Janney Capital
SodaStream (SODA) upgraded to Equal Weight from Underweight at Barclays

Downgrades

EZCORP (EZPW) downgraded to Market Perform from Outperform at Wells Fargo
Eli Lilly (LLY) downgraded to Neutral from Buy at Citigroup
Franklin Resources (BEN) downgraded to Neutral from Buy at Citigroup
LPL Financial (LPLA) downgraded to Neutral from Buy at Citigroup
Mobile Mini (MINI) downgraded to Neutral from Outperform at RW Baird
On Assignment (ASGN) downgraded to Neutral from Outperform at RW Baird
Quanex (NX) downgraded to Hold from Buy at BB&T
Rayonier Advanced downgraded to Sector Perform at RBC Capital
Sagent Pharmaceuticals (SGNT) downgraded to Hold from Buy at Needham
TTM Technologies (TTMI) downgraded to Neutral from Overweight at JPMorgan
Tetra Tech (TTEK) downgraded to Neutral from Outperform at RW Baird
UPS (UPS) downgraded to Neutral from Overweight at Atlantic Equities
Unilever (UN) downgraded to Neutral from Buy at Goldman
United Microelectronics (UMC) downgraded to Sell from Neutral at Citigroup
United Microelectronics (UMC) downgraded to Underweight from Neutral at JPMorgan
Whole Foods (WFM) downgraded to Neutral from Buy at UBS
Whole Foods (WFM) downgraded to Neutral from Overweight at JPMorgan
Yelp (YELP) downgraded to Market Perform from Outperform at Raymond James

Initiations

Enphase Energy (ENPH) initiated with an Outperform at Imperial Capital
lululemon (LULU) initiated with a Positive at Susquehanna

COMPANY NEWS

Tesla (TSLA), Panasonic (PCRFY) sign agreement for construction of U.S. Gigafactory
Scripps (SSP), Journal (JRN) merging broadcast operations, to spin off newspapers
Yum! Brands (YUM) said that OSI had a "significant, negative impact" to its sales in China
Endurance Specialty (ENH) terminated its offer to acquire Aspen Insurance (AHL)
Marathon Petroleum (MPC) announced an additional $2B stock buyback program
Tesoro (TSO) announced a new $1B share repurchase plan and raised its quarterly dividend 20% to 30c from 25c per share
Whole Foods (WFM) announced a new $1B share repurchase plan
RealNetworks (RNWK) named Rob Glaser as permanent CEO

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Yelp (YELP), Whole Foods (WFM), Iron Mountain (IRM), NiSource (NI), Care.com (CRCM), Amerseco (AMRC), MEDNAX (MD), State Auto Financial (STFC), Quanta Services (PWR), Generac (GNRC), Cigna (CI), ACI Worldwide (ACIW), Ctrip.com (CTRP), Swift Energy (SFY), American Railcar (ARII), Blackbaud (BLKB), LivePerson (LPSN), Cleco (CNL), First Bancorp (fbnc), Fox Chase Bancorp (FXCB), C&J Energy (CJES), Kirby (KEX), Churchill Downs (CHDN), Noble Corp. (NE), Amerisafe (AMSF), SciQuest (SQI), Selective Insurance (SIGI), Atwood Oceanics (ATW), General Cable (BGC), eHealth (EHTH), Boston Beer (SAM), Intersil (ISIL), Intrepid Potash (IPI), Entropic (ENTR), Superior Energy (SPN), Curtiss-Wright (CW), Newport (NEWP), Albemarle (ALB), Endologix (ELGX), Halcon Resources (HK), Vistaprint (VPRT), Moelis (MC), Lincoln National (LNC), Digital River (DRIV), LifeLock (LOCK), Glu Mobile (GLUU), Anika Therapeutics (ANIK), Weight Watchers (WTW), FormFactor (FORM), Veeco (VECO), Molina Healthcare (MOH), Con-way (CNW), NCI, Inc. (NCIT), Ruckus Wireless (RKUS), Fidelity National (FNF), Western Digital (WDC), Lam Research (LRCX), FEI Company (FEIC), MedAssets (MDAS), Cavium (CAVM), Shutterfly (SFLY), Unum Group (UNM), BioMarin (BMRN), CTPartners (CTP), Support.com (SPRT), Steiner Leisure (STNR), Cardtronics (CATM), Cytokinetics (CYTK), Open Text (OTEX), American Capital Mortgage (MTGE), Allstate (ALL), Hologic (HOLX), Rovi (ROVI), Fortune Brands (FBHS), Whiting Petroleum (WLL), AMC Entertainment (AMC), QuickLogic (QUIK), Akamai (AKAM), Forrester (FORR), Century Aluminum (CENX)

Companies that missed consensus earnings expectations include:

Kraft Foods (KRFT), L-3 Communications (LLL), Midcoast Energy (MEP), Xcel Energy (XEL), Acorda Therapeutics (ACOR), Embraer (ERJ), Chart Industries (GTLS), Time Warner Cable (TWC), Enterprise Products (EPD), Suncor (SU), Methanex (MEOH), Buenaventura (BVN), SJW Corp. (SJW), Triumph Group (TGI), Furmanite (FRM), Kraton Performance (KRA), Bennett Environmental (BEL), Murphy Oil (MUR), Allegion (ALLE), Haverty Furniture (HVT), Martin Midstream Partners (MMLP), Tesoro Logistics (TLLP), Manitowoc (MTW), Luxfer (LXFR), Tenaris (TS), Smith Micro (SMSI), Kinross Gold (KGC), Barrick Gold (ABX), FMC Corporation (FMC), Stamps.com (STMP), Tesoro (TSO), Legacy Reserves (LGCY), Capstead Mortgage (CMO), Tetra Tech (TTEK), KapStone (KS), Solazyme (SZYM), ManTech (MANT), Williams Partners (WPZ), Hartford Financial (HIG), Penn Virginia (PVA), Macquarie Infrastructure (MIC), Cabot (CBT), Spansion (CODE), A10 Networks (ATEN), Manning & Napier (MN), American Equity (AEL), Regional Management (RM), Coherent (COHR), Roadrunner (RRTS), Town Sports (CLUB), MetLife (MET)

Companies that matched consensus earnings expectations include:

Alamos Gold (AGI), Brookline Bancorp (BRKL), Silicon Image (SIMG), AVG Technologies (AVG), Service Corp. (SCI), TTM Technologies (TTMI), Williams (WMB), Nanometrics (NANO), Hudson Technologies (HDSN), ServiceNow (NOW), TFS Financial  (TFSL)

NEWSPAPERS/WEBSITES

Target (TGT) to name PepsiCo's (PEP) Brian Cornell as new CEO, WSJ reports
Apple (AAPL) said to fire 200 Beats employees after buyout, Bloomberg reports
AMC Networks (AMCX) in talks for stake in BBC America, Bloomberg reports
FCC questions Verizon's (VZ) plan to manage data speeds for some customers, WSJ reports
NY governor steps in to BNP (BNPQY) agreement for $1B more for state fund, Reuters reports
EU regulators ready challenge to Google (GOOG) mobile software business, Reuters reports
Amgen (AMGN) shares could gain 25%, Barron's says
Twitter (TWTR) looks pricey, Barron's says

SYNDICATE

Athlon Energy (ATHL) files to sell 12.5M shares of common stock for holders
Avalanche Biotechnologies (AAVL) 6M share IPO priced at $17.00
Bio Blast Pharma (ORPN) 3.2M share IPO priced at $11.00
Catalent (CTLT) 42.5M share IPO priced at $20.50
Ceragon Networks (CRNT) 21.25M share Secondary priced at $2.00
Endurance Specialty (ENH) requests withdrawal of registration statement
Gevo (GEVO) files automatic common stock, warrant shelf
HealthEquity (HQY) 9.1M share IPO priced at $14.00
Macrocure (MCUR) 5.35M share IPO priced at $10.00
Manchester United (MANU) files to sell 8M Class A Ordinary Shares for holders
Ramco-Gershenson (RPT) files to sell 5.25M common shares of beneficial interest
Synchrony Financial (SYF) 125M share IPO priced at $23.00
Tyson Foods (TSN) 23.81M share Secondary priced at $37.80
Vascular Biogenics (VBLX) 5.4M share IPO priced at $12.00

• Russia bans all U.S. food, EU fruit and vegetables in sanctions response (Reuters)
• Snowden receives three-year Russian residence permit (Reuters)
• Headline of the day: Europe's Recovery Menaced by Putin as Ukraine Crisis Bites (BBG)
• Americans worry that illegal migrants threaten way of life, economy (Reuters)
• Almost 90% of Uninsured Won't Pay Penalty Under the Affordable Care Act in 2016 (WSJ)
• Germany’s Bond Advance Sends 2-Year Note Yield Below Zero (BBG)
• Gaza War’s Critics in Crosshairs as Israelis Back Offensive (BBG)
• The 1% May Be Richer Than You Think, Research Shows (BBG)
• Bank of America Near $16 Billion to $17 Billion Settlement (WSJ)
• Deep Water Fracking Next Frontier for Offshore Drilling (BBG)
• Americans Give Up Passports as Asset-Disclosure Rules Start (BBG)
• Google to Boost Encrypted Websites in Rankings (WSJ)
• The San Francisco 49ers' New Football Stadium Is a Dud (BBG)
• Drone crashes into famed hot spring at Yellowstone National Park (Reuters)

Overnight Media Digest

WSJ

* Bank of America Corp and the Justice Department are close to a deal in which the bank will pay between $16 billion and $17 billion to resolve allegations of mortgage-related misconduct in the run-up to the financial crisis. (http://on.wsj.com/1vbZWze)

* The dust appeared to be settling on 21st Century Fox's brief pursuit of Time Warner Inc, as both entertainment conglomerates pointed to strong quarterly earnings and declared themselves well-positioned on their own. (http://on.wsj.com/1pY3f4J)

* President Barack Obama is focused on putting in place a global security structure that will last decades, but his handling of crises in the Mideast and Ukraine has driven support for his foreign policy to new lows. (http://on.wsj.com/1syF2qw)

* Almost 90 percent of the United States' 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement. (http://on.wsj.com/1kJvpEG)

* Google Inc wants to reward websites that are more secure. The world's most popular search engine said it is now giving bonus points in its ranking algorithm to Web pages that are encrypted. Google hopes the move will prod website developers to adopt technology that protects against hackers breaking into their websites and stealing users' information. (http://on.wsj.com/1syVYND)

* Talk of cracking down on U.S. corporations that move offshore is making some other companies nervous - notably, foreign-owned concerns, which are warning of cuts to their U.S. employment or investment if they are caught in the cross hairs. (http://on.wsj.com/1pDhFtJ)

* The failure of the biggest U.S. banks to convince regulators they can go bust without bringing down the financial system is likely to further strain an already tense relationship between Wall Street and Washington. (http://on.wsj.com/1pY541O)

* Sprint Corp's new boss is a 6-foot 6-inch Bolivian billionaire whose efforts could determine whether the wireless firm's decision to end a $32-billion plan to buy T-Mobile US Inc was a savvy, pragmatic move or a disaster. (http://on.wsj.com/X36WQ1)

* Without a Sprint Corp deal, T-Mobile US Inc has to weigh a possible merger with another suitor against going it alone in a market that is about to get more competitive and more expensive. (http://on.wsj.com/XFK49c)

* The number of people to have died in the worst Ebola outbreak in history has risen to at least 932, the World Health Organization said on Wednesday, as overworked hospital staff struggled to quell the epidemic and in many cases became its front-line victims. (http://on.wsj.com/1ko5ty3)

* Walgreen Co faced investor backlash after deciding against relocating its corporate headquarters overseas as part of its acquisition of the rest of European drugstore chain Alliance Boots GmbH. (http://on.wsj.com/1kJERb9)

* Pfizer Inc has reached a $35 million settlement with 41 states and the District of Columbia over alleged improper marketing of its drug Rapamune, New York Attorney General Eric Schneiderman said on Wednesday. (http://on.wsj.com/1oDznxI)

* A European spacecraft called Rosetta has become the first in history to rendezvous with and orbit a comet, a milestone in space exploration that could reveal valuable clues about how the solar system was created and how it evolved. (http://on.wsj.com/1syK6v7)

* As fighting between Israel and Hamas raged over the past week, Israeli tech companies had one of their best runs ever. Investors and buyers didn't stay away either, with one acquisition announced and four initial public offerings. Still, quite a few startups in the country's busy tech sector had staff called away on mandatory military reserve duty, as did some of their suppliers and business partners. (http://on.wsj.com/XFluWb)

* A collection of more than one billion website logins allegedly stockpiled by a Russian crime gang may not pose as much of a new security threat as a computer-security company suggested, other security researchers and cybercrime experts said. (http://on.wsj.com/1up6t5x)

FT

Twenty-First Century Fox Inc has soothed investor concerns, saying that it will not make another offer for Time Warner Inc or any other large content company, after withdrawing its bid for the firm behind HBO and Turner.

Legal & General Group Plc is exploring a possible multibillion pound "bulk" annuity deal with North American and European firms, as the insurer strives to lessen the impact of a decline in individual annuities sales in the UK.

Lloyds Banking Group Plc has decided to defend itself against a lawsuit filed by some of its investors, which could possibly be one of the largest ever, in terms of damages claimed, to be heard by the English courts.

Standard Chartered Plc has warned that it expects to pay a fine to New York's financial regulators for failing to draw their attention to suspicious transactions - less than two years after it first fell short of complying with U.S. sanctions laws.

SoftBank Corp CEO Masayoshi Son has blamed U.S. competition watchdogs for its subsidiary, Sprint Corp, having to give up its chase of Deutsche Telekom AG's T-Mobile US Inc.

Buyout funds including Bain Capital and Apax are expected to make final offers for U.S.-based Toms during the next few weeks, valuing the footwear company, which donates a pair of shoes for every one it sells, at between $600 million and $700 million, sources have said.

African Minerals Ltd has revealed that it investigated Chairman Frank Timis in relation to allegations that the founder and two other directors personally gained from a $50 million payout made by the iron ore miner to commodity trading group Global Iron Ore Cyprus.

NYT

* Bank of America Corp and the U.S. Justice Department have reached a tentative deal to settle an investigation into the sale of toxic mortgage securities in the run-up to the financial crisis. The tentative deal is expected cost Bank of America more than $16 billion. (http://nyti.ms/1ko1uS4)

* Kent Brantly and Nancy Writebol, the two Americans infected with Ebola in West Africa, appeared to be responding to an experimental medicine devised by an obscure biotechnology company with ties to the Defense Department. Mapp Biopharmaceutical, the primary developer of the drug, was consumed Wednesday with how to manufacture more of it with an eye to providing the drug to more patients, probably in the form of clinical trials. (http://nyti.ms/1uoRVTq)

* Searching for ways to hit back at Western sanctions without causing Russian consumers too much pain, President Vladimir Putin gave his government a broad mandate to issue one-year bans on food and agricultural imports. But he included a proviso that the bans be lifted if they drive up prices or cause undue dependence on a single source. (http://nyti.ms/1nugtEU)

* Google Inc and Barnes & Noble Inc are joining forces to tackle their mutual rival Amazon.com Inc , zeroing in on a service that Amazon has long dominated, the fast and cheap delivery of books. Book buyers in Manhattan, West Los Angeles and the San Francisco Bay Area will be able to get same-day deliveries from local Barnes & Noble stores through Google Shopping Express, Google's fledgling online shopping and delivery service. (http://nyti.ms/V3kyZA)

* High-speed rail was supposed to be U.S. President Barack Obama's signature transportation project, but despite the administration spending nearly $11 billion since 2009 to develop faster passenger trains, the projects have gone mostly nowhere and the United States still lags far behind Europe and China.(http://nyti.ms/V3223I)

* The Italian economy shrank in the second quarter, according to an official estimate on Wednesday, taking economists by surprise and provoking concern that violence in Ukraine and tension with Russia could be pushing the broader eurozone back into recession. (http://nyti.ms/1ko5kuk)

* Bitcoin supporters are stepping up the pressure on New York State's top financial regulator to extend the comment period for the state's new virtual currency rules. (http://nyti.ms/1pDiOS2)

* Financial prosecutors in Greece are asking the former head of the central bank there to explain his actions in approving a bank sale to a Greek businessman later jailed on fraud charges. (http://nyti.ms/1y7DuU8)

* The European market for initial public offerings has been on fire this year, with 200 deals raising $58 billion, compared with 89 deals worth $15.2 billion in the same time period a year ago. Rob Leach, BlackRock Inc's head of capital markets for Europe, the Middle East and Africa, recently sent an email to bankers, reminding them that quantity does not equal quality. It was at least his second attempt to address "failing IPOs" this year. (http://nyti.ms/1lCc4Qs)

* Deal-making has boomed this year. So has deal-breaking. So far this year, $428.2 billion of deals have been withdrawn. That is the highest level for this period since 2007, when $566.8 billion of deals were withdrawn. And it far surpasses the level of withdrawn deals for all of 2013, which was $278.5 billion. (http://nyti.ms/1AWqyVi)

Canada

THE GLOBE AND MAIL

* Canada's employment minister Jason Kenny said Ottawa will "vigorously defend" the interests of two Canadian citizens detained in China on spying allegations, and raised concerns about religious freedom in that country. Kenney told reporters the government is providing consular assistance and would work with Chinese authorities on the matter. (http://bit.ly/1oG4ZD3)

* The Conservative Party of Canada is starting from scratch in a Toronto-area riding after a bitter nomination battle led both candidates to drop out. Eve Adams, who is currently an MP in a nearby riding, and chiropractor Natalia Lishchyna have both bowed out of the race to be the Tory nominee in the newly created riding of Oakville North-Burlington. (http://bit.ly/1kKfNAR)

Reports in the business section:

* Canada's pork industry is bracing for a major blow after Russian President Vladimir Putin announced his country will ban the import of agricultural products from countries that have imposed sanctions on Russia. Pork products, including frozen pork, ham, pig fat and offal, are Canada's largest agricultural export to Russia. (http://bit.ly/1u08nMs)

NATIONAL POST

* Hours before assembly of first nations regional chief Jody Wilson-Raybould became a Liberal Party of Canada candidate for the 2015 federal election, Isadore Day, chief of the 1,300-member Serpent River First Nation drafted a complaint criticizing her decision to keep her job until after the election. Day accused Ms. Wilson-Raybould of "clear bias" and "conflict of interest" and demanded "close examination and if necessary, corrective measures."(http://bit.ly/1vef27f)

* Alberta Premier Dave Hancock announced on Wednesday that he will ask the Royal Canadian Mounted Police to review the Auditor General's investigative report into the alleged abuse of Alberta's fleet of planes former Premier Alison Redford resigned as MLA on Tuesday in the wake of scandals connected to her use of the taxpayer-funded aircrafts. (http:/bit.ly/1zWNrGP)

FINANCIAL POST

* Canada may soon be home to another smartphone maker when Moscow-based Yota Devices relocates its headquarters to Toronto or Waterloo by the end of this year. Yota Devices, whose flagship unit is an Android-based smartphone with screens on both sides, is aiming to take advantage of the talent pool in Canada left behind by BlackBerry Ltd in the wake of its restructuring, said CEO Vlad Martynov. (http://bit.ly/1kKk6fu)

* Canada reported the largest merchandise trade surplus in more than two years in June as exports reached a record on gains in crude oil and metals. (http://bit.ly/1uq4TAs)

China

CHINA SECURITIES JOURNAL

- PetroChina Company Limited will accelerate reform, allowing private capital to buy surplus oil under the "first come, first serve" principle, according to an anonymous informed source.

SHANGHAI SECURITIES NEWS

- A total of 100 billion yuan ($16.2 billion) has flowed into China's stock markets, boosting market performance recently.

- The ongoing anti-monopoly investigations into foreign automobile companies is expected to change the structure of the automobile industry in China, the paper said.

CHINA DAILY

- Antitrust probes will be a "default position" in China for foreign companies, an official from the expert advisory group of the State Council's anti-monopoly committee said on Wednesday.

PEOPLE'S DAILY

- China will maintain annual growth of 7.5 percent this year, despite the likelihood that the Asia-Pacific region may experience an economic slowdown, the United Nations Economic and Social Commission for Asia and the Pacific said in a report released on Wednesday.

SHANGHAI DAILY

- Chinese consumers lack confidence in real estate investment, according to the China Wealth Index compiled by the Bank of Communications and Nielsen which was released on Wednesday.

Britain

The Times

BOOTS CHAIRMAN MAKES $11 BILLION FROM WALGREEN DEAL

Alliance Boot's Italian boss Stefano Pessina, who built his family's drugs wholesaling business into a European leader, is $11 billion richer today after presiding over the sale of the drug chain to America's Walgreen.

MANUFACTURING SLOWDOWN RAISES DOUBTS OVER RECOVERY

Britain's rebalancing from consumption to manufacturing may be stalling, economists have warned after official factory output numbers fell short of expectations.

The Guardian

HIGH COURT THROWS OUT 'INCREDIBLE' 6 MLN STG BONUS CLAIM BY EX-INVESTEC TRADERS

Two former Investec traders lost a three-year, 6 million pound ($10 million) battle over their bonuses on Wednesday in a case described by a London high court judge as fanciful and "wholly incredible".

The Telegraph

BBC MUST INTRODUCE QUOTAS ON WEB TRAFFIC SHARING, SAYS JOHNSTON PRESS CHIEF

The BBC must scale back its regional news websites and commit to sharing traffic with commercial publishers, according to the chief executive of Johnston Press, the publisher of the Scotsman and the Yorkshire Post.

THAMES WATER CHALLENGED OVER LONDON SUPERSEWER COSTS

Thames Water has only justified half of its initial spending plans for the London supersewer project, regulator Ofwat has warned, demanding the company provide more information to explain proposals for a further 331 million pound outlay.

Sky News

KELLOGG CRUNCHES NUMBERS ON 2 BLN STG PENGUIN DEAL

American food giant Kellogg is examining a 2 billion pound offer for United Biscuits (UB), the owner of McVitie's, Penguin and other famous British biscuit brands.

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Significant domestic economic reports scheduled for today include:
Jobless claims for week of August 2 at 8:30--consensus 305K
Consumer credit for June at 15:00--consensus $18.3B

ANALYST RESEARCH

Upgrades

21st Century Fox (FOXA) upgraded to Market Perform from Underperform at Cowen
AOL (AOL) upgraded to Buy from Hold at Cantor
Alpha Natural (ANR) upgraded to Neutral from Sell at UBS
Carnival (CCL) upgraded to Buy from Neutral at BofA/Merrill
Chesapeake (CHK) upgraded to Buy from Hold at Stifel
Esterline (ESL) upgraded to Buy from Neutral at Goldman
inContact (SAAS) upgraded to Outperform from Perform at Oppenheimer
Independent Bank (INDB) upgraded to Buy from Neutral at Guggenheim
Ralph Lauren (RL) upgraded to Outperform from Neutral at Credit Suisse
Sportsman's Warehouse (SPWH) upgraded to Outperform from Market Perform at Wells Fargo
Tallgrass Energy (TEP) upgraded to Outperform from Neutral at RW Baird
Team Health (TMH) upgraded to Buy from Hold at Deutsche Bank

Downgrades

Aetna (AET) downgraded to Neutral from Buy at Goldman
Copa Holdings (CPA) downgraded to Equal-Weight from Overweight at Evercore
Copa Holdings (CPA) downgraded to Market Perform from Outperform at Raymond James
Ixia (XXIA) downgraded to Hold from Buy at Jefferies
Nu Skin (NUS) downgraded to Neutral from Overweight at JPMorgan
ReachLocal (RLOC) downgraded to Neutral from Overweight at Piper Jaffray
Thoratec (THOR) downgraded to Neutral from Buy at Goldman
Thoratec (THOR) downgraded to Neutral from Outperform at Credit Suisse
UnitedHealth (UNH) downgraded to Buy from Conviction Buy at Goldman
Vodafone (VOD) downgraded to Market Perform from Outperform at Raymond James

Initiations

Audience (ADNC) resumed with an Outperform at Pacific Crest
Cherry Hill Mortgage (CHMI) initiated with an Outperform at JMP Securities
Michaels Stores (MIK) initiated with a Neutral at Macquarie
Peregrine (PSMI) resumed with a Sector Perform at Pacific Crest
RF Micro Devices (RFMD) resumed with an Outperform at Pacific Crest
Skyworks (SWKS) resumed with an Outperform at Pacific Crest
TreeHouse Foods (THS) resumed with a Neutral at JPMorgan

COMPANY NEWS

21st Century Fox (FOXA) said it will not pursue any other content company and that "we are done" as far as Time Warner (TWX) pursuit
Time Warner (TWX) said in a filing that it will undertake restructuring activities to streamline operations
Hasbro (HAS) CEO announced prostate cancer diagnosis, says he will "continue to enthusiastically fulfill all my responsibilities as Hasbro's President and CEO on a full-time basis with no interruption in my tenure"
GM (GM) issued recall for certain model year SAABs, Trailblazer EXTs, others; Toyota (TM) recalled 2014 Siennas due to defected transmission shift control cable
Costco (COST) reported July SSS up 5%
CST Brands (CST) will acquire the general partner of Lehigh Gas (LGP) for $85M in cash and stock and announced a $200M share repurchase program
VMware (VMW) announced a $1B share repurchase program
Babcock & Wilcox (BWC) announced that it will scale back its Grid business

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
21st Century Fox (FOXA), Symantec (SYMC), Keurig Green Mountain (GMCR), Horizon Pharma (HZNP), Oncolytics Biotech (ONCY), Maximus (MMS), Rand Logistics (RLOG), Teekay (TK), W&T Offshore (WTI), Republic Airways (RJET), Agrium (AGU), Kindred Healthcare (KND), Kronos Worldwide (KRO), Energy Transfer Partners (ETP), Sun Life Financial (SLF), Hill International (HIL), Tronox (TROX), Hillenbrand (HI), Kennedy Wilson (KW), Ares Commercial (ACRE), Sapient (SAPE), Dun & Bradstreet (DNB), ReachLocal (RLOC), InnerWorkings (INWK), Primerica (PRI), Procera Networks (PKT), Providence Service (PRSC), Depomed (DEPO), Concho Resources (CXO), Fleetmatics (FLTX), Sunoco Logistics (SXL), Charles River Labs (CRL), Echelon (ELON), MBIA (MBI), TherapeuticsMD (TXMD), Marin Software (MRIN), NPS Pharmaceuticals (NPSP), XenoPort (XNPT), SandRidge Energy (SD), Transocean (RIG), Pericom (PSEM), Tallgrass Energy (TEP), Triangle Capital (TCAP), PAREXEL (PRXL), Envision Healthcare (EVHC), Intralinks (IL), CenturyLink (CTL), EVERTEC (EVTC), zulily (ZU), 2U (TWOU), inContact (SAAS), Annaly Capital (NLY), Craft Brew (BREW), DexCom (DXCM), Silver Bay Realty (SBY), Tremor Video (TRMR), Jack in the Box (JACK), Bruker (BRKR), Gaiam (GAIA), Andersons (ANDE), Textura (TXTR), Franco-Nevada (FNV), Envestnet (ENV), Prudential (PRU), OraSure (OSUR), Metabolix (MBLX), Portola Pharmaceuticals (PTLA), Silicon Graphics (SGI)

Companies that missed consensus earnings expectations include:
Mylan (MYL), Olympic Steel (ZEUS), Montage Technology (MONT), EMC Insurance (EMCI), Gray Television (GTN), Natural Gas Services (NGS), Lamar Advertising (LAMR), Taminco (TAM), Manulife Financial (MFC), BCE (BCE), Auxilium (AUXL), Dynavax (DVAX), Goodrich Petroleum (GDP), Higher One (ONE), MiX Telematics (MIXT), Teekay Tankers (TNK), Gran Tierra (GTE), Royal Gold (RGLD), Cross Country Healthcare (CCRN), Key Energy (KEG), Xenith Bankshares (XBKS), Alliant Energy (LNT), Coupons.com (COUP), CombiMatrix (CBMX), ION Geophysical (IO), Golden Minerals (AUMN), Essex Rental (ESSX), Westar Energy (WR), Geospace (GEOS), Energy Recovery (ERII), Alamo Group (ALG), US Ecology (ECOL), Energy Transfer Equity (ETE), Vital Therapies (VTL), Coeur Mining (CDE), BioScrip (BIOS), Dynegy (DYN), Global Brass & Copper (BRSS), Trinseo S.A. (TSE), INTL FCStone (INTL), Novavax (NVAX), MYR Group (MYRG), Flotek (FTK), Lehigh Gas (LGP), Novatel Wireless (NVTL), Cenveo (CVO), Babcock & Wilcox (BWC), Compass Diversified (CODI), Entravision (EVC), Actuate (BIRT), ICF International (ICFI), Aerohive Networks (HIVE), Sanchez Energy (SN), Regulus Therapeutics (RGLS), Delta Apparel (DLA), QEP Midstream Partners (QEPM), Molycorp (MCP), Aerie Pharmaceuticals (AERI), TransEnterix (TRXC), UIL Holdings (UIL), CF Industries (CF), Antero Resources (AR), Gulfport Energy (GPOR), Theravance (THRX), Polypore (PPO), Numerex (NMRX), MarkWest Energy (MWE), Nanosphere (NSPH), Cornerstone OnDemand (CSOD), American Water (AWK), Matador (MTDR), Manitex (MNTX), InterMune (ITMN), Cardiovascular Systems (CSII), Roundy's (RNDY)

Companies that matched consensus earnings expectations include:
Mitel (MITL), AES Corp. (AES), Hill-Rom (HRC), Amerco (UHAL), National American University (NAUH), Lumos Networks (LMOS), Atmos Energy (ATO), Maiden Holdings (MHLD), Plains All American (PAA), Exar (EXAR), Tangoe (TNGO), Callon Petroleum (CPE), Neurocrine (NBIX), PennantPark Floating Rate (PFLT), Thoratec (THOR), Celldex (CLDX), Atmel (ATML), Masonite (DOOR), Conversant (CNVR), Measurement Specialties (MEAS), Natures Sunshine Products (NATR), ANADIGICS (ANAD)

NEWSPAPERS/WEBSITES

Bank of America (BAC) near $16B-$17B settlement with DoJ over mortgages, WSJ reports
TIBCO (TIBX) makes informal approach to potential suitors, WSJ reports
Microsoft (MSFT) in talks to open Fifth Avenue store, Daily News reports
Newmont (NEM) CEO says open to merger talks with Barrick Gold (ABX), Reuters reports
Softbank (SFTBF) shifting focus to Sprint (S) turnaround, WSJ reports
Deutsche Telekom (DTEGY) CEO asks for regulators help in spectrum auction, Reuters says
Walgreen (WAG) looks good for long-term investors, Barron's says

SYNDICATE

Aastrom (ASTM) files to sell $20M of common stock
Bonanza Creek (BCEI) files to sell 853,492 shares for holders
Celladon (CLDN) files to sell 4M shares of common stock
Extended Stay America (STAY) 21M share Secondary priced at $21.75
GTx (GTXI) files to sell 22.16M shares for holders
Healthcare Services (HCSG) files to sell 1.01M shares for holders
iDreamSky (DSKY) 7.7M share IPO priced at $15.00
T2 Biosystems (TTOO) 5.2M share IPO priced at $11.00
U.S. Auto Parts (PRTS) files to sell $100M of common stock
UCP, Inc. (UCP) files to sell 10.6M shares for holders
Umpqua Holdings (UMPQ) announces 15M share secondary by selling stockholders
WPX Energy (WPX) files to sell 481,157 shares for holders

• Barack Obama's 'vacation from hell' (Politico)
• Russian aid convoy checked; military vehicles mass near Ukraine (Reuters)
• Ukraine Says APCs Entered From Russia to Aid Insurgents (BBG)
• Islamic State Said to Challenge Al-Qaeda for Leadership (BBG)
• Missouri protests calmer after governor puts black police captain in charge (Reuters)
• Finally someone will prove the US is a pyramid scheme (in a 1000 page presentation): Ackman’s Pershing Square Sues U.S. Over Fannie, Freddie (BBG)
• Banks, Financial Firms Load Up on Cheap Debt (WSJ)
• Putin to Meet Finnish President as Threat of Cold War Grows (BBG)
• SEC Casts Wide Net in Probe of Microcap Stock (WSJ)
• Putin Pacific Gambit Threatens New Market (BBG)
• Obama Won't Return Money From Tax Deals He Dislikes (BBG)
• Apple stores user data on servers in China for first time (Reuters)
• Traders Lured to Bet on Power Overloads Worth Billions (BBG)
• Billionaire Lang Walker Says Sydney Home Market ’Too Hot' (BBG)
• China’s Savers Put Record $2.1 Trillion in Wealth Products (BBG)
• Obama says Sinjar siege broken, some personnel to leave Iraq (Reuters)

Overnight Media Digest

WSJ

* Iraqi Prime Minister Nouri al-Maliki relinquished power on Thursday, ending eight years of tumultuous rule and opening a new political chapter that U.S. officials hope will move Iraq towards a more united front against marauding jihadists. (http://on.wsj.com/1uV9DhL)

* Missouri Governor Jay Nixon put the state highway patrol in charge of security in Ferguson on Thursday in hopes of quelling nightly clashes between protesters angry over a police shooting of an unarmed black teenager and SWAT teams using tear gas. (http://on.wsj.com/1qb76f6)

* The euro-zone economy stalled in the second quarter, raising the ugly prospect that the region's meager recovery has lost momentum just as it faces fresh headwinds from Russia and Ukraine. (http://on.wsj.com/1t1A0SF)

* The Securities and Exchange Commission is investigating the auditor of Cynk Technology Corp, the tiny social network that soared to a $6 billion valuation last month and then came crashing back down to earth, say people close to the probe. (http://on.wsj.com/XlpPhd)

* Swedish appliance manufacturer Electrolux AB has held preliminary discussions about acquiring General Electric Co's appliance business, joining a group of other potential suitors considering a deal that could expand their reach in North America. (http://on.wsj.com/YaVYby)

* Alibaba Group Holding Ltd's <IPO-BABA.N> plan for a potentially record-breaking initial public offering is prompting other companies to push back their own stock-market debuts. Royal Bank of Scotland Group Plc's Citizens Financial Group Inc has pushed back the launch of its IPO, which was slated for the second week of September, according to people familiar with the matter. (http://on.wsj.com/1mOTIMo)

* In a risky bid to jolt sagging sales, Coca-Cola Co is paying $2.15 billion to acquire a 16.7 percent stake in energy-drink maker Monster Beverage Corp as part of an asset swap. (http://on.wsj.com/Xlr4gB)

* Federal regulators are looking into whether a hostile offer jointly pursued by Valeant Pharmaceuticals International Inc and activist investor William Ackman to acquire Allergan Inc violates securities laws, according to people familiar with the matter. (http://on.wsj.com/1uTJfER)

* Cutrale Group's bid this week to buy Chiquita Brands International Inc has put Brazil's secretive "Orange King" Jose Luis Cutrale in the spotlight. Cutrale is one of three companies operating in Brazil that account for about 80 percent of global orange-juice exports. (http://on.wsj.com/1l7PXqI)

* Banks and other financial companies world-wide are issuing bonds in the United States at a record pace, taking advantage of this year's surprising slump in interest rates and a brightening outlook for the sector. (http://on.wsj.com/1pQnhkA)

* Supermarket chain Supervalu Inc is investigating a potential data breach that might have affected more than 1,000 stores, according to people familiar with the situation, the latest attack against a big merchant in recent months. (http://on.wsj.com/1vONB4u)

* Apple Inc created the blueprint for a smartphone when it covered the touch screen of its first iPhone in glass instead of plastic. Now, it is betting $700 million that sapphire, a harder and more expensive material, can replace glass and better protect future devices. (http://on.wsj.com/Yb0Qxc)

* Less than 10 days after Gannett Co Inc said it would separate its publishing business from its broadcasting operations, activist investor Carl Icahn disclosed he had accumulated over the past couple of months a 6.63 percent stake in the company and had planned to push for such a split. (http://on.wsj.com/1kFuJ2K)

* Alibaba Group Holding Ltd's film-production arm said it had uncovered possible accounting irregularities and would delay the release of its first-half financial results, and suspend trading of its stock while it investigated the matter. (http://on.wsj.com/1rykThC)

* Consumers may soon be able to pay for their Airbnb rentals or Uber car rides using bitcoin. EBay Inc has been quietly working to integrate acceptance of the virtual currency into its Braintree payments subsidiary, part of its PayPal unit, according to people familiar with the matter. (http://on.wsj.com/1lZBPKK)

FT

Rosneft has asked Russia's government for $42 billion in support to help the oil producer offset the impact of Western sanctions imposed over Moscow's role in Ukraine.

RWE AG has revealed plans to shutter more power stations, as Germany's second-biggest utility by market value struggles to cope with the expansion of renewable energy supply in the country.

Undeterred by Balfour Beatty Plc's rejection of two takeover bids it made, Carillion Plc has approached the rival construction firm's investors, saying that its proposed deal to create a 3 billion pound ($5 billion) giant could deliver annual cost savings of 175 million pounds for the combined business.

U.S. media billionaire Barry Diller has strengthened his portfolio of Internet companies by purchasing Ask.fm - a youth social networking site that allows users to post questions and answers anonymously.

Berlin has banned the use of Uber, an app-enabled taxi service that allows users to summon a ride on their smartphone, after the company was found to be in violation of safety regulations.

NYT

* Coca-Cola Co announced that it had acquired a 16.7 percent stake in Monster Beverage Corp for $2.15 billion. The deal unites the biggest soda maker in the world with the largest energy drink brand in the United States. (http://nyti.ms/XlqFuy)

* Trading linked to congestion on New York State's electric grid, a market intended to protect power companies and ultimately benefit consumers, has made big profits for trading firms. (http://nyti.ms/1m023gq)

* Financial regulators are pushing for an arcane but crucial modification to the contracts that stand behind the $700 trillion global market for derivatives. The change is part of the regulators' efforts to avoid the sort of systemic chaos that occurred after Lehman Brothers Holding Inc crashed. (http://nyti.ms/1l7Ne0l)

* Lenders to Puerto Rico's big electric power authority gave it a breather on Thursday instead of enforcing a looming deadline on the lines of credit the company uses to buy fuel for its power plants. The banks that provide the credit line gave the Puerto Rico Electric Power Authority until March 31 to make good on principal repayments that originally came due at the end of July. (http://nyti.ms/VqZhJN)

* The Securities and Exchange Commission is examining whether Valeant Pharmaceuticals International Inc and Pershing Square Capital Management have broken any laws while pursuing a hostile takeover of Allergan Inc. The inquiry is in its early stages and may not lead to a formal investigation, according to a person briefed on the matter. (http://nyti.ms/1pdJlpN)

* Starbucks Corp announced revisions on Thursday to the way the company schedules its 130,000 baristas, saying it wanted to improve "stability and consistency" in work hours week to week. The company intends to curb the much-loathed practice of "clopening," or workers closing the store late at night and returning just a few hours later to reopen, wrote Cliff Burrows, the group president in charge of American stores, in an email to baristas across the country. (http://nyti.ms/1sZbQZX)

* Samsung Electronics Co Ltd has purchased SmartThings, a start-up that makes accessories that connect home appliances to the Internet. With its expansion, Samsung will be competing with Apple Inc and Google Inc. Google acquired Nest, also a smart home appliance maker, for $3.2 billion this year. In June, Apple introduced HomeKit, a set of software tools to make iPhones more integrated with the smart home. (http://nyti.ms/1BiDbKp)

Canada

THE GLOBE AND MAIL

** Via Rail says another derailment on a troubled northern Manitoba railway line has forced an interruption of passenger services between Thompson and The Pas until further notice. Via said passengers scheduled to travel on the affected routes would be offered alternate transportation and trains would continue to operate between Churchill and Thompson, and The Pas and Winnipeg. (http://bit.ly/VpiPOS)

** Liberal Party of Canada leader Justin Trudeau lashed out on Thursday at the Canadian government over a Postmedia report that Health Canada has approached three doctors' groups to sign onto an anti-pot advertising campaign. During a visit to Saskatoon, he suggested the move was meant as an attack on him and his support for legalizing marijuana. (http://bit.ly/1pwdjpv)

Reports in the business section:

** Spotify, one of the Internet's biggest streaming music services, launched an invitation-only preview of its Canadian site, with plans to open it up to all users soon. Spotify joins a growing list of companies that have also launched Canadian streaming music sites, such as Songza and Google Inc. (http://bit.ly/1ozC2tM)

NATIONAL POST

** Ontario's environment ministry has confirmed that specimens collected on Monday from a bay in Upper Rideau Lake north of Kingston, Ontario, are blue-green algae and that toxins are present. The health unit said McNally's Bay cottagers and residents who draw drinking water from the lake should use an alternative source, as boiling does not remove the toxins. (http://bit.ly/1rzexOU)

** The bizarre case of a former U.S. airman seeking asylum in Canada, claiming he was tortured by U.S. authorities probing his links to the shadowy Anonymous hacker collective, is sparking protest rallies and an international day of action. Matt DeHart, 30, is in prison in Ontario awaiting an Aug. 20 refugee hearing in Toronto during which he will argue his claim for refugee protection. (http://bit.ly/1vQ6Dr4)

FINANCIAL POST

** Energy financier Richard Grafton is planning a series of deals in the Canadian oil patch over the next 18 months after securing C$675 million in funding from a U.S. private equity firm and a UAE sovereign wealth fund. (http://bit.ly/1kG9iP9)

** The Canada Pension Plan Investment Board is mulling two scenarios in this fall's anticipated initial public offering of Chinese e-commerce firm Alibaba Group Holding Ltd <IPO-BABA.N> - selling or taking a larger stake.

Hong Kong

SOUTH CHINA MORNING POST

-- At least a quarter of the 28,000-strong Hong Kong police force will turn out to handle the possible chaos should the Occupy Central movement for democracy carry out its threat to block streets in the main business hub later this month, sources close to the matter say. (bit.ly/1l7Hy6H)

-- Former top judge Andrew Li Kwok-nang has expressed reservations about the view expressed in Beijing's recent white paper on the "one country, two systems" formula that Hong Kong judges have a "basic political requirement" to love the country. (bit.ly/1sHLaOS)

-- The first annual sales target cut announced by a Hong Kong-listed mainland developer has revealed the dilemma facing many players in an industry downturn: to take the hit now or give up a bit later. Fantasia cut its annual sales target to 10 billion yuan ($1.63 billion) from 15 billion yuan after reporting a 68 percent year-on-year slide in first-half profit. (bit.ly/1t0mHD3)

THE STANDARD

-- More than 126,000 people are expected to turn up on Sunday to show they are against the Occupy Central campaign in Hong Kong, according to the Alliance for Peace and Democracy. Convener Robert Chow Yung said more than 1,170 organisations have pledged their support and that the turnout could be even larger than estimated. (bit.ly/1t4O1PJ)

-- CLP Holdings said it will raise tariffs next year but will be at a rate lower than previously estimated. Tariffs had been projected to rise between 3.9 percent and 11.8 percent in CLP's 2014-2018 development plan, with the average annual adjustment at 6.9 percent. (bit.ly/1oyEnFm)

-- Prosperity Real Estate Investment Trust said its interim distributable income rose 11.3 percent to HK$115 million ($14.8 million) from a year earlier. Revenue reached HK$197.8 million, up 18.4 percent, thanks to the contribution of rental and car park income. (bit.ly/1oTcPdf)

HONG KONG ECONOMIC JOURNAL

-- Chinese sportswear maker Peak Sport Products said first-half net profit rose 34.6 percent year-on-year to 120 million yuan ($19.5 million) as sales increased and profit margin improved.

HONG KONG ECONOMIC TIMES

-- Yuzhou Properties Co Ltd said it generated 5.85 billion yuan ($951 million) from property sales in the first seven months of 2014, representing 44.3 percent of its annual sales target.

APPLE DAILY

-- Casual wear brand Giordano said first-half net profit plunged 48.8 percent from a year-ago period to HK$174 million ($22.45 million) amid a weak retail market, high rent in Hong Kong and foreign exchange loss.

Britain

The Times

BERKSHIRE HATHAWAY SHARES TOP $200,000 FOR FIRST TIME

Berkshire Hathaway's share price hit $200,000 for the first time yesterday, showing how far the conglomerate has come since Warren Buffett started buying shares for $7 in 1962 when it was a humble textile company.

SSE puts a national distribution charge in pipeline

Energy bills in the east Midlands and other densely populated areas could rise by up to 37 pound a year to reduce the cost to households of distributing energy in remote parts of the country under proposals put forward by SSE Plc.

The Guardian

UNION CALLS FOR CO-OP BRANCHES TO OUST AMAZON LOCKERS

The GMB union, which has pursued a long-running campaign over pay and conditions at the online retailer's British warehouses, said is calling on Co-operative members to help oust Amazon lockers from the mutual's grocery stores.

The Telegraph

JAMES CROBSY BOWS OUT OF CITY AS PROVIDENT BUYS MONEYBARN

James Crosby, the former boss of HBOS, will relinquish his last company directorship and collect a hefty windfall after Moneybarn, the car insurer he chaired, agreed to be bought by Provident Financial Plc for 120 million pounds ($200 million).

BANK OF ENGLAND FLATLY DENIES SCOTTISH CURRENCY TALKS

The Bank of England has flatly denied claims from the Scottish government that the two have held talks on a currency union should Scotland vote for independence next month.

Sky News

APPLE BANS TWO CHEMICALS FROM PRODUCTION LINE

Apple Inc is banning two potentially hazardous chemicals from its final assembly process for iPhone and iPad. It is removing benzene and n-hexande from its production lines following a five-month campaign from labour activists in China.

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Producer Price Index for July at 8:30--consensus up 0.2%
Empire State manufacturing survey for August at 8:30--consensus 20.0
Industrial production for July at 9:15--consensus up 0.3%
Capacity utilization for July at 9:15--consensus 79.1%
UMich consumer sentiment index first read for August at 9:55--consensus 82.3

ANALYST RESEARCH

Upgrades

Alcentra Capital (ABDC) upgraded to Outperform from Neutral at RW Baird
Anglo American (AAUKY) upgraded to Sector Perform from Underperform at RBC Capital
China Mobile (CHL) upgraded to Neutral from Underperform at Mizuho
Cypress Energy (CELP) upgraded to Outperform from Neutral at RW Baird
G&K Services (GK) upgraded to Overweight from Neutral at JPMorgan
Perrigo (PRGO) upgraded to Buy from Neutral at B. Riley
Starwood (HOT) upgraded to Overweight from Equal Weight at Barclays
Ultra Petroleum (UPL) upgraded to Buy from Neutral at UBS

Downgrades

Apollo Global (APO) downgraded to Market Perform from Outperform at Wells Fargo
bebe stores (BEBE) downgraded to Neutral from Buy at Janney Capital
DaVita (DVA) downgraded to Hold from Buy at Deutsche Bank
Fifth Street Finance (FSC) downgraded to Neutral from Buy at Gilford Securities
Harmony Gold (HMY) downgraded to Underweight from Neutral at HSBC
Ignite Restaurant (IRG) downgraded to Neutral from Overweight at Piper Jaffray
K12 (LRN) downgraded to Market Perform from Outperform at Wells Fargo
KKR (KKR) downgraded to Market Perform from Outperform at Wells Fargo
Lithia Motors (LAD) downgraded to Underweight from Equal Weight at Morgan Stanley
New York & Co. (NWY) downgraded to Neutral from Buy at Janney Capital
OCI Partners (OCIP) downgraded to Underweight from Equal Weight at Barclays
OmniVision (OVTI) downgraded to Neutral from Outperform at RW Baird

Initiations

Achillion (ACHN) initiated with an Outperform at FBR Capital
Enanta (ENTA) initiated with an Outperform at FBR Capital
G-III Apparel (GIII) initiated with a Buy at Wunderlich
Gilead (GILD) initiated with an Outperform at FBR Capital
Intercept (ICPT) started with Underperform, $172 target at FBR Capital
NXP Semiconductors (NXPI) initiated with a Buy at Stifel
Palo Alto (PANW) initiated with an Outperform at Imperial Capital
Virtusa (VRTU) initiated with a Buy at Maxim

QUARTERLY HEDGE FUND UPDATES

Warren Buffett’s Berkshire Hathaway:

NEW STAKES: Charter Communications (CHTR), and Now Inc (DNOW). INCREASED STAKES: Suncor (SU), Verizon (VZ), General Motors (GM), Liberty Global (LBTYA), and Visa (V). DECREASED STAKES: Graham Holdings (GHC), ConocoPhillips (COP), DIRECTV (DTV), Phillips 66 (PSX), and Liberty Media (LMCA). LIQUIDATED STAKES: Starz (STRZA)

Carl Icahn:

NEW STAKES: Gannett (GCI). INCREASED STAKES: Navistar (NAV), eBay (EBAY), and Icahn Enterprises (IEP). DECREASED STAKES: Netflix (NFLX). LIQUIDATED STAKES: Forest Laboratories (FRX)

David Tepper’s Appaloosa:

NEW STAKES: Google (GOOG), Mohawk (MHK), Weatherford (WFT), and Ryland (RYL). INCREASED STAKES: Facebook (FB), General Motors (GM), American Airlines (AAL), Priceline (PCLN), and Masco (MAS). DECREASED STAKES: Citigroup (C), Eastman Chemical (EMN), and Du Pont (DD). LIQUIDATED STAKES: QUALCOMM (QCOM), JP Morgan Chase (JPM), MetLife (MET), Trinity (TRN), and Delphi (DLPH)

Paulson & Co:

NEW STAKES: Allergan (AGN), DIRECTV (DTV), Covidien (COV), Hillshire Brands (HSH), and Questcor (QCOR). INCREASED STAKES: Shire (SHPG), Cobalt (CIE), Mallinckrodt (MNK), Family Dollar (FDO), and Dollar General (DG). DECREASED STAKES: Thermo Fisher (TMO), Vodafone (VOD), Freeport-McMoRan (FCX), CNO Financial (CNO), and CBS (CBS). LIQUIDATED STAKES: American Airlines (AAL), Pioneer Natural Resources (PXD), Hess (HES), General Motors (GM), and Digital Realty Trust (DLR)

Soros Fund:

NEW STAKES: CONSOL Energy (CNX), Google (GOOG), Level 3 (LVLT), Time Warner (TWC), and New Oriental (EDU). INCREASED STAKES: YPF SA (YPF), Apple (AAPL), Facebook (FB), AIG (AIG), and American Airlines (AAL). DECREASED STAKES: Teva (TEVA), Liberty Global (LBTYK), Barrick Gold (ABX), EQT (EQT), and Comcast (CMCSA). LIQUIDATED STAKES: FedEx (FDX), Monster Beverage (MNST), Google (GOOGL), Devon Energy (DVN), Marathon Petroleum (MPC)

Trian Fund:

NEW STAKES: Allergan (AGN), DIRECTV (DTV), Covidien (COV), Hillshire Brands (HSH), and Questcor (QCOR). INCREASED STAKES: Shire (SHPG), Cobalt (CIE), Mallinckrodt (MNK), Family Dollar (FDO), and Dollar General (DG). DECREASED STAKES: Thermo Fisher (TMO), Vodafone (VOD), Freeport-McMoRan (FCX), CNO Financial (CNO), and CBS (CBS). LIQUIDATED STAKES: American Airlines (AAL), Pioneer Natural Resources (PXD), Hess (HES), General Motors (GM), and Digital Realty Trust (DLR)

COMPANY NEWS

Monster Beverage (MNST) and Coca-Cola (KO) announced a strategic partnership where Coca-Cola will take a 16.7% stake in the company, as well as swap certain brands with the energy drink maker
SuperValu (SVU) said its computer network experienced criminal intrusion. The company has not determined that any such cardholder data was in fact stolen by the intruder, and it has no evidence of any misuse of any such data
Nordstrom (JWN) said the purchase price for Trunk Club is $350M in stock and the company sees the acquisition dilutive to FY14 EPS by 3%-5%
J.C. Penney (JCP) forecast Q3 and FY14 SSS up mid-single digits
Samsung (SSNLF) acquired home automation startup SmartThings, terms not disclosed

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
J.C. Penney (JCP), JD.com (JD), Banro Corporation  (BAA), SINA (SINA), La Jolla (LJPC), Bridgeline Digital (BLIN), WidePoint (WYY), Extreme Networks (EXTR), Autodesk (ADSK), Agilent (A), Applied Materials (AMAT)

Companies that missed consensus earnings expectations include:
Kite Pharma (KITE), Ultrapetrol (ULTR), Alexco Resource (AXU), Cascade Bancorp (CACB), ZS Pharma (ZSPH), Intrexon (XON), Echo Therapeutics (ECTE), Mandalay Digital (MNDL), Summer Infant (SUMR), Cypress Energy (CELP), Opexa Therapeutics (OPXA)

Companies that matched consensus earnings expectations include:
Weibo (WB), Superior Drilling (SDPI), Professional Diversity Network (IPDN), Lucas Energy (LEI), Paylocity (PCTY), Nordstrom (JWN)

NEWSPAPERS/WEBSITES

Apple (AAPL) considering sapphire glass in upcoming iPhone, smartwatch, WSJ reports (GTAT, GLW)
Sprint's (S) new CEO to introduce 'disruptive' prices next week, Re/code reports
Alibaba's (BABA) Pictures unit uncovers possible accounting issues, AP reports
eBay's (EBAY) Braintree unit considering accepting bitcoin, WSJ reports
Wal-Mart (WMT) sees rise in DVD orders following Disney (DIS), Amazon (AMZN) feud, Bloomberg reports
Wal-Mart (WMT) not a bargain, Barron's reports

SYNDICATE

Biodel (BIOD) files to sell 6.1M shares for holders
Energy Focus (EFOI) files to sell 6.25M shares for holders
Hannon Armstrong (HASI) files to sell 3.18M shares for holders
NeoGenomics (NEO) files to sell common stock
Priceline (PCLN) prices $1B senior notes offering
Selectica (SLTC) files to sell 999,999 shares for holders

• Islamic State executes soldiers, takes hostages at Syria base (Reuters)
• Buffett Burger King Funds Flip Obama’s Inversion Calculus (BBG)
• Equities Reach Record $66 Trillion as S&P 500 Hits 2,000 (BBG)
• Central Banks Playing Own Version of Plaza-opoly With FX (BBG)
• Russia court closes McDonald's branch for 90 days (Reuters)
• Finland Says NATO an Option After Russia ‘Violates’ Border Laws (BBG)
• Netanyahu Hit With Domestic Criticism Over Gaza Truce (BBG)
• Biggest Danish Fund Readies for Rate Shock as Exit Narrows (BBG)
• Nonprofit Hospitals' Profits Fall (WSJ)
• Snapchat Fetches $10 Billion Valuation (WSJ), a year after it was valued at $800 million
• Apple Said to Prepare New 12.9-Inch IPad for Early 2015 (BBG)
• Demonstrations resume in Missouri over shooting death of black teen (Reuters)
• China Is Awash in Grain Crops (WSJ)

Overnight Media Digest

WSJ

* Israel and Hamas agreed to their first open-ended cease-fire after seven weeks of military confrontation and will resume truce talks in Cairo in the coming days. (http://on.wsj.com/1ldqdZE)

* Burger King Worldwide Inc defended its acquisition of Tim Hortons Inc as the hamburger chain came under criticism for its effort, backed by billionaire investor Warren Buffett, to move the quintessential American brand to Canada. (http://on.wsj.com/1ASHDyp)

* Kleiner Perkins Caufield & Byers agreed to invest in Snapchat at a valuation of close to $10 billion, making it one of the world's most valuable private tech start-ups.(http://on.wsj.com/1qKk2J9)

Big Tobacco is finally making its big push into electronic cigarettes. Altria Group Inc and Reynolds American Inc together have captured about a quarter of convenience-store sales just weeks into national rollouts of the battery-powered devices. In a surprising development, though, e-cigarette sales are falling at these traditional retail outlets, reversing three years of rapid-fire growth. (http://on.wsj.com/XQZ04P)

* American Airlines Group Inc has withdrawn its flights from consumer websites powered by Orbitz Worldwide Inc, following a similar dispute between the airline and the travel website about three years ago. (http://on.wsj.com/1ASIgbc)

* The U.S. Securities and Exchange Commission is expected to complete rules Wednesday that would require banks and other firms to provide investors with more details about loans pooled into bonds known as asset-backed securities. (http://on.wsj.com/1pfnn7m)

* Islamic State insurgents have planted explosives to stall a Kurdish push to retake the town of Jalawla, an unfolding strategy that foes describe as built on patience, the element of surprise and a willingness to take losses. (http://on.wsj.com/1wzYEib)

* A meeting between the Russian and Ukrainian presidents failed to produce a breakthrough for ending the conflict over eastern Ukraine, as Kiev released videos of captured Russian soldiers and rebels pushed toward a government-held city. (http://on.wsj.com/1zBS7ji)

* Singapore's Oversea-Chinese Banking Corp and its insurance unit have entered exclusive talks to sell their stakes in property and engineering company United Engineers Ltd to Thai billionaire Charoen Sirivadhanabhakdi. (http://on.wsj.com/1qsXYGl)

FT

The United States is preparing military options, including surveillance flights, to pressure Islamic State in Syria, U.S. officials said on Monday.

Europe's leaders are set to select Federica Mogherini, Italy's foreign minister, as EU foreign policy chief at a summit on Saturday, despite worries among some EU countries that she is too inexperienced and will not be tough enough on Russia.

Warren Buffett defended his role in Burger King's $11.4 billion acquisition of coffee and doughnuts chain Tim Hortons, that will see the U.S. fast food chain's headquarters move to Canada as part of the tax inversion deal.

The United Kingdom's Financial Conduct Authority could fine Royal Bank of Scotland about 15 million pounds ($24.82 million) over its mortgage record-keeping and advice to borrowers, according to two people familiar with the matter.

WPP, the world's largest advertising company, said the strong British pound "ravaged" its revenues, wiping more than 400 million pounds $661.72 million) off its net sales in the first half of the year.

NYT

* As Detroit prepares to defend its plan next week to exit bankruptcy, city leaders have received an unusual offer: Why not mortgage all the Van Goghs, Picassos and other works in the Detroit Institute of Arts? A company called Art Capital, which makes loans backed by artwork, has told the city it is willing to lend it up to $3 billion, roughly 10 times the exit financing Detroit is now contemplating, using the museum's art as collateral. But the city's response is silence. (http://nyti.ms/1tBtQtM)

* Allergan Inc, the Botox maker fending off a hostile takeover attempt by Valeant Pharmaceuticals International Inc and Pershing Square Capital Management, has set a date for a special meeting at which shareholders will have the opportunity to vote out a majority of the board. In a filing with the Delaware Chancery Court, Allergan said the meeting would take place on Dec. 18. (http://nyti.ms/1ryIcfQ)

* Google Inc announced Tuesday that it bought Boston-based Zync Inc, the maker of Zync Render, a "cloud-based rendering software." Google wouldn't say how much it paid for Zync. The company will integrate Zync's data and technology into the Google Cloud Platform, and move off Amazon.com Inc Web Services. (http://nyti.ms/1syGo2c)

* A cross-border fast-food deal has united Warren Buffett with one of his favorite investors. Buffett's conglomerate, Berkshire Hathaway, is helping finance Burger King Worldwide Inc's $11.4 billion takeover of the Canadian restaurant chain Tim Hortons Inc by buying $3 billion of preferred shares in the new company. (http://nyti.ms/XQVDee)

* Time Warner Inc's Turner Broadcasting System division said on Tuesday that it was offering buyouts to about 600 employees, the first step in an ambitious effort to overhaul a portfolio of cable networks that have struggled with declining ratings at a time of intense competition for viewers. Layoffs and additional cost-cutting measures will follow, according to an internal memo announcing the buyouts. (http://nyti.ms/YWQEsE)

* Volvo AB on Tuesday introduced its first vehicle designed and built under Chinese ownership. The vehicle, a seven-seat sport utility vehicle known as the XC90 that will go on sale in April, is probably a make-or-break model for Volvo. (http://nyti.ms/1qKeyxX)

* Michael Lucarelli, the director of market intelligence at Lippert/Heilshorn and Associates, was arrested and charged with 13 counts of insider trading for buying and selling stocks based on information in news releases his company had prepared for its clients, the Federal Bureau of Investigation and Preet Bharara, the United States attorney in Manhattan, said in a statement. (http://nyti.ms/1zBUTVN)

* The Swiss private bank Pictet Group reported its financial results publicly for the first time in its 209-year history on Tuesday, showing a profit and highlighting continuing changes in Switzerland's traditionally secretive banking culture. (http://nyti.ms/1tEZy8F)

* Governments should ban the use of electronic cigarettes in public places and outlaw tactics to lure young users, the World Health Organization said in a report released on Tuesday that calls for some of the toughest measures yet proposed for the increasingly popular devices. It also expressed "grave concern" about the growing role of the powerful tobacco industry in the e-cigarette market. (http://nyti.ms/1qsW1tG)

Canada

THE GLOBE AND MAIL

** Barrick Gold Corp is eliminating its entire corporate development team and more cuts are in the works as the world's top gold miner looks to trim costs, three sources familiar with the situation said on Tuesday. (http://bit.ly/1zDcYml)

** Canada's public health agency is preparing to bring home a trio of scientists who were helping to combat Ebola in Sierra Leone after three people in their hotel complex tested positive for the viral hemorrhagic fever. A Health Canada spokesman confirmed late Tuesday night that the Public Health Agency of Canada is finalizing plans to pull its mobile laboratory team out of the West African country. (http://bit.ly/1tCil5r)

NATIONAL POST

** Cominar Real Estate Investment Trust has signed a deal to buy a portfolio of 15 properties including shopping centres, office buildings and an industrial park in Quebec and Ontario from Ivanhoe Cambridge Inc for C$1.53 billion ($1.40 billion). (http://bit.ly/1qgvNtt)

** Hewlett-Packard Co is recalling more than 6 million personal-computer power cords in the United States and Canada, citing reports of overheating and melting units. The cords, distributed with Hewlett-Packard and Compaq notebooks and related products, were sold from September 2010 to June 2012, the company and U.S. Consumer Product Safety Commission said in a statement on Tuesday. (http://bit.ly/1p84Gg4)

** The Canadian Human Rights Tribunal has ordered Human Resources and Skills Development Canada to reimburse former employee Leslie Hicks nearly C$17,000 ($15,606) in expenses after ruling last year the department had engaged in "reckless discrimination" against him. (http://bit.ly/1tCcRHF)

** Drivers in Ontario could soon face much stiffer penalties for texting behind the wheel, as the governing Liberals are set to reintroduce a bill that would boost the maximum fine to C$1,000 ($918). (http://bit.ly/1zD3RSL)

Hong Kong

- The president of China Resources Power (CRP) and a Shanxi tycoon, believed to be the biggest beneficiary of a controversial coal investment, have been detained by authorities. CRP said its executive director Wang Yujun was under investigation in Jiangsu province, while sources revealed that Zhang Xinming, once the richest man in Shanxi, had been detained earlier this month. (bit.ly/1wzmdaR)

- Fashion retailer Fujian Nuoqi should have disclosed more information on its two failures to list on the mainland before floating its shares in Hong Kong, and CCB International, the sole sponsor of the share sale, may possibly be disciplined, analysts said. Nuoqi, which listed in Hong Kong in January, reported to police in July that its chairman was missing. (bit.ly/1tSzh5V)

- Homebuyers are increasingly seeking to finance their purchases with loans based on the lower interest rates in the Hong Kong interbank offered rate market. The percentage of mortgage applicants opting for loans priced with reference to Hibor rose from 42 percent in January to 77 percent in June, Hong Kong Monetary Authority data shows. (bit.ly/VMCAAa)

THE STANDARD

- Hopewell Holdings declared a special dividend distribution of one share of Hopewell Highway Infrastructure for every 20 shares of the developer, hoping to boost HHI's market liquidity and shareholder base. (bit.ly/YWM5i7)

- The Urban Renewal Authority's Kwun Tong redevelopment project received six tenders, including Henderson Land , Sun Hung Kai Properties, Wheelock and Great Eagle. It is believed to involve a total investment of HK$18 billion ($2.3 billion). (bit.ly/1luUVhl)

HONG KONG ECONOMIC JOURNAL

- Internet game developer Forgame Holdings Ltd said its net loss narrowed to 2.14 million yuan for the first half of 2014, from a 233 million yuan loss in the year-ago period.

HONG KONG ECONOMIC TIMES

- China Securities Regulatory Commission has approved Shenzhen Stock Exchange's plan to conduct a feasibility study in relation to a trading connection with the Hong Kong stock exchange, according to a Shenzhen municipality official.

MING PAO DAILY NEWS

- Department store operator Golden Eagle Retail Group Ltd , which is under pressure due to keen competition from e-commerce sites, is not in a hurry to develop its own e-commerce business as the company has still not seen a proven profit-making business model so far, according to chairman Roger Wang.

Britain

The Times

FRAUD OFFICE ATTACKS FLAWED CRIME REPORTS

The Serious Fraud Office has criticised the recruitment of independent experts to investigate criminal behaviour in companies, warning that the practice risks destroying the evidence needed to put rogue business people and bankers behind bars.

HOUSE PRICES EXPECTED TO RISE BY MORE THAN 25 PCT IN FIVE YEARS

House prices in Britain will be more than 25 percent higher in five years, with London finally being overtaken by other parts of the country.

The Guardian

CAMERON FACES DOUBLE 2015 TROUBLE

UKIP leader Nigel Farage and London Mayor Boris Johnson take steps toward Westminster, causing political headaches for Tory leaders.

SCOTTISH YES VOTE AND BRITISH EU EXIT COULD HIT UK ECONOMY, SAYS SORRELL

WPP boss Sir Martin Sorrell has warned that the prospect of Scotland voting for independence and Britain leaving the European Union could weaken the UK economy, adding to worries over heightened geopolitical tensions in Ukraine and the Middle East.

The Telegraph

GORDON BROWN AND ALISTAIR DARLING PUT ASIDE DIFFERENCES IN FIGHT FOR UK The former Prime Minister and his former chancellor are to share a platform for the first time in the independence referendum debate following Alex Salmond's damaging TV debate victory.

SCOTTISH INDEPENDENCE VOTE COULD PROMPT PENSIONS CRISIS If Scotland votes "yes" this September, EU pension rules could threaten the cash flow of the UK's largest companies, warns JPMorgan.

Sky News

RBS HIT BY 15 MLN STG FCA MORTGAGE ADVICE FINE

Royal Bank of Scotland will on Wednesday add to the list of misconduct for which it has been fined since it was bailed out by British taxpayers when it pays millions of pounds for giving poor advice to mortgage customers.

CALL FOR E-CIGARETTES TO BE BANNED INDOORS The World Health Organisation wants tougher regulation, including a ban on selling to minors and on vending machines in public.

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports today include:
MBA purchase applications for week of Aug. 22--up 2.8%

ANALYST RESEARCH

Upgrades

Aruba Networks (ARUN) upgraded to Buy from Neutral at UBS
Hilltop Holdings (HTH) upgraded to Outperform from Market Perform at Keefe Bruyette
Rent-A-Center (RCII) upgraded to Buy from Hold at Canaccord
Tim Hortons (THI) upgraded to Neutral from Underperform at Credit Suisse
Waste Management (WM) upgraded to Buy from Hold at Stifel

Downgrades

Bank of Nova Scotia (BNS) downgraded to Neutral from Outperform at Credit Suisse
E-House (EJ) downgraded to Neutral from Buy at Goldman
Facebook (FB) downgraded to Neutral from Buy at Janney Capital
Laredo Petroleum (LPI) downgraded to Hold from Buy at Canaccord
Leju (LEJU) downgraded to Neutral from Buy at Goldman
Pioneer Natural (PXD) downgraded to Hold from Buy at Canaccord
Sturm, Ruger (RGR) downgraded to Fair Value from Buy at CRT Capital
Susser Petroleum downgraded to Market Perform from Outperform at Wells Fargo
Tim Hortons (THI) downgraded to Sector Performer from Outperformer at CIBC

Initiations

ASML (ASML) initiated with a Hold at Stifel
Akamai (AKAM)initiated with an Outperform at RW Baird
Alcobra (ADHD) initiated with a Market Perform at FBR Capital
Axcelis (ACLS) initiated with a Buy at Stifel
Bank of the Ozarks (OZRK) initiated with a Buy at Drexel Hamilton
Bristol-Myers (BMY) initiated with a Hold at Deutsche Bank
Concur (CNQR) initiated with a Neutral at DA Davidson
Cornerstone OnDemand (CSOD) initiated with a Neutral at DA Davidson
CyrusOne (CONE) initiated with a Neutral at Citigroup
Eli Lilly (LLY) initiated with a Buy at Deutsche Bank
FCB Financial (FCB) initiated with a Neutral at Guggenheim
First Financial (FFIN) initiated with a Hold at Drexel Hamilton
Garmin (GRMN) initiated with a Neutral at RW Baird
Marketo (MKTO) initiated with a Buy at DA Davidson
Merck (MRK) initiated with a Hold at Deutsche Bank
NetSuite (N) initiated with a Buy at DA Davidson
Oracle (ORCL) initiated with a Neutral at DA Davidson
Oxford Industries (OXM) initiated with a Buy at Wunderlich
Pfizer (PFE) initiated with a Buy at Deutsche Bank
ServiceNow (NOW) initiated with a Buy at DA Davidson
Southside Bancshares (SBSI) initiated with a Hold at Drexel Hamilton
Workday (WDAY) initiated with a Neutral at DA Davidson

COMPANY NEWS

Allergan (AGN) requests block to Ackman, Valeant (VRX) votes, announces Special Meeting date of December 18
Royal Bank of Scotland (RBS), NatWest fined GBP14.47M by FCA
Mario Gabelli told CNBC that Chemtura (CHMT) has limited downside, can double in next five years; Gabelli also said he thinks Diebold (DBD) is "in the beginning of a major turnaround"
Aruba Networks (ARUN) announced a 3.7% workforce reduction
Cooper Tire (CTB) said Chengshan JV valued at around $440M
CFTC ordered Merrill Lynch (BAC) to pay $1.2M fine for supervision failures
Lakes Entertainment (LACO) engaged financial advisor to explore strategic alternatives
Chiquita Brands (CQB), Fyffes now see $60M of annualized pre-tax cost savings
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Donaldson (DCI), Seadrill (SDRL), Globe Specialty Metals (GSM), HEICO (HEI), Dycom (DY), TiVo (TIVO), TubeMogul (tube), Smith & Wesson (SWHC), Nimble Storage (NMBL), Aruba Networks (ARUN)

Companies that missed consensus earnings expectations include:

SQM (SQM), Solera (SLH)

Companies that matched consensus earnings expectations include:

Bob Evans (BOBE), Analog Devices (ADI)

NEWSPAPERS/WEBSITES

Apple (AAPL) readying larger iPad for 2015 launch, Bloomberg reports
Shell-led (RDS.A) group close to selling Nigeria oilfields for $5B, FT reports (TOT, E)
AT&T's (T) Ralph de la Vega to oversee enterprise and mobile, Re/code reports
Apple (AAPL) may introduce a thinner MacBook as early as this year, Digitimes says
Intel (INTC) working on luxury smart bracelet with curved glass display, Business Insider reports
Amazon (AMZN) steps point to digital health entry, VentureBeat says
Repsol (REPYY), Talisman (TLM) talks on oil and natural gas assets stall, WSJ reports
Time Warner Cable (TWC) customers reporting outages nationwide, Business Insider reports

SYNDICATE

Air Industries (AIRI) files $12.14M mixed securities shelf
Ardmore Shipping (ASC) files $300M mixed securities shelf
BNC Bancorp (BNCN) files $150M mixed securities shelf
Carver Bancorp (CARV) requests withdrawal of registration statement
Compugen (CGEN) files $200M mixed securities shelf
Gabelli Equity Trust announces rights offering
Quest Resource Holding (QRHC) files $50M mixed securities shelf

• Snow is coming: OECD Cuts Economic Growth Forecasts (WSJ)
• World waits for white smoke from U.S. Fed (Reuters) - Understandable error: they meant "green"
• Scots Breakaway at 45% Odds as Economists Warn of Capital Flight (BBG)
• Ukraine President Poroshenko Faces Backlash Over EU Trade Deal Delay (WSJ)
• German Anti-Euro Party Advances in Merkel Homeland Voting (BBG)
• Clinton Hints at 2016 Run as Super-PAC Packs Iowa Steak Fry (BBG)
• Air France, Lufthansa Hit by Strikes in Fight for Future (BBG)
• U.S. sees Middle East help fighting IS, Britain cautious after beheading (Reuters)
• Ex-Billionaire Charged by Brazil With Financial Crimes (BBG)
• Record S&P 500 Masks 47% of Nasdaq Mired in Bear Market (BBG)
• Heineken confirms, rebuffs SABMiller bid (Reuters)
• Alibaba Said to Plan Boosting IPO Price Amid Interest (BBG)
• A minimum-wage hike finds hope in U.S. heartland (Reuters)
• Western sanctions are testing Russia's strength: Medvedev (Reuters)
• Phones 4u Bonds Plummet After Losing Mobile Contracts (BBG) and it was just a year ago that it did a "successful"dividend recap deal...

Overnight Media Digest

WSJ

* International support for the U.S.-led military campaign against Islamic State gathered strength with the United Kingdom vowing to destroy the group after it killed a British aid worker, Arab States agreeing to participate in air strikes and Australia pledging forces. (http://on.wsj.com/1tTMjj6)

* President Barack Obama plans to dramatically boost the U.S. effort to mitigate the Ebola outbreak in West Africa, including greater involvement of the U.S. military, people familiar with the proposal said. (http://on.wsj.com/1qVDFka)

* Heineken NV said Sunday that U.K.-based rival SABMiller Plc has approached it about being acquired but that Heineken's controlling family intends to keep the company independent. (http://on.wsj.com/1BF0zkF)

* A firm run by former AIG boss Hank Greenberg is suing the U.S. government over its bailout of AIG six years ago. A trial set to start late this month poses a risk for the insurer.(http://on.wsj.com/1uD4Wtc)

* As vice chairwoman of the Federal Reserve, Janet Yellen was an unabashed advocate of easy money who pressed colleagues to embrace her view. As chairwoman she has taken a much different approach, becoming a restrained consensus seeker modeled after her predecessor, Ben Bernanke. (http://on.wsj.com/X4DpVn)

* U.S. investigators have turned multiple bank employees into informants in a far-reaching probe of possible manipulation of currency markets, and are preparing to seek criminal charges against individual traders as early as next month. (http://on.wsj.com/1qPzF5W)

* U.S. Treasury Secretary Jacob Lew warned his Chinese counterpart in a recent letter that a spate of antimonopoly investigations against foreign companies could have serious implications for relations between the two countries, according to people briefed on its contents. (http://on.wsj.com/Xl9Krm)

FT

Silicon Valley's top executives and investors have agreed that the U.S. tech industry has failed to appreciate the growing global concern over its record on online privacy and security and must act immediately to prevent deeper damage to its image.

SABMiller Plc made a preliminary offer for rival brewer Heineken that was rejected by its controlling shareholders. This deal would have brought the two companies together and helped SABMiller resist a takeover bid from rival Anheuser-Busch InBev

After many years in which dealmakers have been standing firmly in the shadows of their profit-churning trading colleagues, a resurgent market for takeovers and public listings has fostered bigger pay cheques for advisory bankers.

Former chief executive of BP Plc, Tony Hayward, warned that U.S. and EU sanctions against Moscow are threatening to turn around and bite the West by hindering global oil supplies and driving up prices in coming years.

Eike Batista, a Brazilian business magnate, was accused of market manipulation, and prosecutors sought to freeze millions of dollars worth of properties that he had transferred to his family. The accusations were part of a criminal action against Batista, whose empire collapsed last year in Latin America's largest bankruptcy, with prosecutors attempting to take hold of 1.5 billion Brazilian reais ($641.30 million) in assets.

NYT

* People keep texting when they are behind the wheel, so an engineer has found a technological solution. The problem: He can not do it on his own. (http://nyti.ms/1y4HCtc)

* An investigation by the New York Times into the National Highway Traffic Safety Administration's handling of major safety defects over the past decade found that it frequently has been slow to identify problems, tentative to act and reluctant to employ its full legal powers against companies. (http://nyti.ms/1wlqQ4x)

* Parent groups and privacy advocates are challenging the practices of an industry built on data collection, and California has passed wide-ranging legislation protecting students' personal information. (http://nyti.ms/1q60b6d)

* Barry Diller's IAC/InterActiveCorp - owner of Match.com, OkCupid and other sites - has been increasing its presence in the terrain that combines technology and romance in the last 10 years, but the market has become crowded. (http://nyti.ms/1D9nztS)

* The smartphone offerings of Apple Inc, Amazon.com Inc, Microsoft Corp and Samsung Electronics Co Ltd have a lot to say about the companies' approach to most everything. (http://nyti.ms/1D9nNB3)

* Activist investor William Ackman's new fund, Pershing Square Holdings, is expected to be listed on the Amsterdam Stock Exchange. (http://nyti.ms/1s7ilpJ)

* Heineken, the Dutch brewer, said on Sunday it had rejected a takeover approach made by SABMiller, putting on ice what would have been a multibillion-dollar beer deal. With a valuation of about $44 billion, Heineken is one of the last big independent brewers in the world, remaining autonomous in an era of global consolidation. (http://nyti.ms/1sUL3OP)

Canada

THE GLOBE AND MAIL

** The newly formed British Columbia LNG Developers Alliance, representing four of the largest proponents of liquefied natural gas exports from the West Coast is lobbying Ottawa for tax relief, arguing that it is in the national interest to launch LNG sales to Asia and reduce Canada's dependence on energy exports to the United States. The alliance's four members are Kitimat LNG, the Pacific NorthWest LNG project led by Malaysia's state-owned Petronas, Shell Canada Energy-led LNG Canada and BG Group's Prince Rupert LNG. (bit.ly/XmAacc)

** Royal Canadian Mounted Police analysts have warned government and industry that environmental extremists pose a "clear and present criminal threat" to Canada's energy sector, and are more likely to strike at critical infrastructure than religiously inspired terrorists. (bit.ly/1wvfa1S)

** Talks between the union representing British Columbia teachers and their employer continued through the weekend, as the two sides and a mediator work to end the bitter strike that has kept 500,000 public school students out of the classroom. Negotiators spent the weekend at a hotel near the Vancouver airport, but would not say what progress had been made. (bit.ly/X5qUZJ)

NATIONAL POST

** Days after being diagnosed with an abdominal tumour, Toronto Mayor Rob Ford withdrew his candidacy for a second term Friday, opening the door in the process for his brother Doug to take his place. (bit.ly/1qOA1ds)

** More than 400 academics are demanding the Canada Revenue Agency halt its audit of a think-tank, saying the conservative government is trying to intimidate, muzzle and silence its critics. In an open letter, the group defends the Canadian Centre for Policy Alternatives, a left-leaning think-tank that was targeted for a political-activity audit partly because it was deemed by the agency to be biased and one-sided. (bit.ly/1nVPiEp)

** While Keurig Green Mountain Inc is trying to knock competitors out of its massive single-serve coffee ring, an Ottawa startup, Single Cup Coffee is using new technology to secure a spot and, so far, it's paying off. Single Cup Coffee, which offers nearly 100 new flavours made in so-called XBold cups re-engineered to give every hot beverage a bolder taste, is already brewing C$12 million in sales after one year of operations. (bit.ly/1y5MrTa)

Hong Kong

SOUTH CHINA MORNING POST

-- The de facto head of Shanghai's free-trade zone is expected to step down, five separate sources said, likely dealing another blow to the already struggling economic project ahead of its first anniversary. Dai Haibo, the zone's executive deputy director overseeing daily operations, was suspected of disciplinary violations, said the sources. (bit.ly/1qViQFI)

-- Russian money is fleeing Western sanctions and into Hong Kong, but running into obstacles at banks nervous about money laundering, analysts say. (bit.ly/1m4wgAC)

-- Cathay Pacific, one of the world's largest cargo carriers, is hoping the Christmas season will start a little earlier this year. The last quarter may signal the start of a real recovery for the sluggish global cargo market thanks to new hi-tech consumer product launches and recovery in the U.S. economy, said Cargo Director James Woodrow. (bit.ly/X3TGcY)

THE STANDARD

-- Hong Kong food authorities on Sunday ordered a massive recall and ban on all 25 lard and lard products imported from Chang Guann at the centre of the "gutter oil" scandal in Taiwan, and banned all food made with the products. (bit.ly/1s2B6kd)

-- The new racing season got off a golden start at the Sha Tin track in Hong Kong in more ways that one. The first-day crowd and turnover were the highest in more than 20 years. Attendance was 74,281, 12 percent higher from last year's opener, while turnover rose more than 10 percent to HK$1,139 billion ($147 billion). (bit.ly/1AOziKm)

-- Jiashili Group opens its retail book today, seeking to raise up to HK$320 million. The Guangdong-based biscuit manufacturer is offering 100 million shares at HK$3.70 each. (bit.ly/1m4zJ21)

HONG KONG ECONOMIC JOURNAL

-- Some 700 staff from casino operator SJM Holdings Ltd staged a protest over the weekend demanding better pay. The workers warned that they would hold a strike in the golden week in October if the management continued to ignore their demand.

Britain

The Times

RBS FACES CLASS ACTION OVER 'ABUSE' OF SMALL BUSINESSES

Hundreds of business owners affected by Royal Bank of Scotland's "turnaround" division for struggling companies are planning to sue the bank through a group legal action. (http://thetim.es/1pfU6Ec)

PHONES 4U CRASHES TO PUT JOBS IN JEOPARDY Nearly 6,000 jobs on the High Street were in jeopardy on Sunday as Phones 4u collapsed into administration. All 550 of its shops are to close with immediate effect, pending a decision by administrators at PricewaterhouseCoopers on whether a long-term solution can be found for the business. (http://thetim.es/1q563N5)

The Guardian

FROM BANKING TO TEACAKES: WHAT HAPPENS IF IT'S A YES IN THE REFERENDUM If Thursday's vote is a yes, bank customers will want to know on Day One if their money is safe and what currency an independent Scotland will use - even if, in reality, it would be 18 months before any real change occurs. Bank of England Governor Mark Carney is cutting short a trip to Australia, where G20 finance ministers and central bank governors are gathering, to ensure he is in the UK in case the contingency plan he has drawn up needs to be implemented. The Treasury insists Chancellor George Osborne - who is not going to Cairns - has no contingency plan. (http://bit.ly/1uvBGpo)

2014 COULD SET RECORD FOR VALUE OF IPOS ON LONDON STOCK EXCHANGE MAIN MARKET This year could see a record amount of cash raised by companies joining the London stock exchange's main market. By the end of August, about 7.4 billion stg ($12.01 billion) had been raised, according to Capita Asset Services, and on current trends this could reach 11.7 billion stg by the end of the year, well above the record 8.7 billion stg set in 2011. (http://bit.ly/1y3O57V)

The Telegraph QUEEN WARNS SCOTS TO THINK 'VERY CAREFULLY' ABOUT REFERENDUM VOTE The Queen has broken her silence about the potential break-up of the United Kingdom by warning Scots to think "very carefully about the future" before casting their votes in the independence referendum. With only four days to go to the polls and the contest on a knife edge, the monarch made a hugely significant intervention by stating she hoped Scots would consider closely what their "important" votes would mean. (http://bit.ly/1uNYtej) SAMSUNG ACCUSES RIVAL OF SABOTAGING WASHING MACHINES Samsung Electronics Co Ltd has accused the head of rival LG Electronics Inc's home appliances business of damaging its washing machines at retail stores in Germany. The firm, in a statement on Sunday, said it had asked the Seoul Central District Prosecutors' Office to investigate LG employees who the company says were seen deliberately destroying several of its premium washing machines on display at two stores earlier this month ahead of the IFA electronics show in Berlin. (http://bit.ly/1qVcuWL)

Sky News

MERGERS WATCHDOG PAVES WAY FOR 'CABLE FINES' Vince Cable, the merger watchdog, will on Monday pave the way for a crackdown on companies that break pledges on jobs and investment made during major corporate takeover deals. (http://bit.ly/1BDTroK)

SCOTLAND REFERENDUM RESULT 'TOO CLOSE TO CALL' The latest opinion polls show the Scottish referendum campaign is "on a knife-edge" - with the "Yes" and "No" campaigns ahead in different surveys. Three polls - all of which exclude undecided voters - give the "No" campaign the advantage on the final weekend of campaigning, but pro-Independence campaigners will be boosted by another which shows them ahead by a large margin. (http://bit.ly/1wsKHlc)

The Independent

UK FIRMS OUT OF RACE FOR 485M STG THAMES FLOOD DEFENCE PROJECT

Unions are warning of an impending British engineering skills crisis, as yet another major public sector project is set to be awarded to a huge U.S. firm. The three bids involving UK firms have been removed in the running for the 485 million stg, 10-year Environment Agency deal to shore up the River Thames' flood defences. The contract covers an area from Teddington in west London to Sheerness and Shoeburyness in Kent and Essex. (http://ind.pn/1s2yrqG)

SCOTTISH INDEPENDENCE: STERLING ON KNIFE-EDGE AS CITY BRACES FOR SCOTS VOTE The City is bracing for "a major reaction" to sterling and shares following the Scottish independence result as the London market faces what could be its most turbulent week since the 2008 banking crisis. Bank of England Governor Mark Carney is returning early from this week's finance meeting of G20 countries in Australia to monitor the markets in person from Thursday and Chancellor George Osborne has cancelled his trip entirely. (http://ind.pn/1qBQbYx)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
NY Fed Empire State survey for September at 8:30--consensus 15.9
Industrial production for August at 9:15--consensus up 0.3%
Capacity utilization rate for August at 9:15--consensus 79.3%

ANALYST RESEARCH

Upgrades

AMC Entertainment (AMC) upgraded to Overweight from Equal Weight at Barclays
Abaxis (ABAX) upgraded to Buy from Hold at Canaccord
Acuity Brands (AYI) upgraded to Buy from Neutral at Goldman
Barrick Gold (ABX) upgraded to Neutral from Underweight at HSBC
CVS Health (CVS) upgraded to Outperform from Market Perform at Cowen
Chuy's (CHUY) upgraded to Buy from Hold at KeyBanc
Conversant (CNVR) upgraded to Neutral from Sell at Goldman
Danske Bank (DNSKY) upgraded to Buy from Hold at Deutsche Bank
DigitalGlobe (DGI) upgraded to Overweight from Neutral at JPMorgan
Pebblebrook Hotel (PEB) upgraded to Buy from Hold at ISI Group
Sunstone Hotel (SHO) upgraded to Buy from Hold at ISI Group
Veeco (VECO) upgraded to Neutral from Sell at Goldman

Downgrades

Brady (BRC) downgraded to Market Perform from Outperform at Wells Fargo
Cree (CREE) downgraded to Neutral from Buy at Goldman
Douglas Dynamics (PLOW) downgraded to Neutral from Outperform at RW Baird
Marten Transport (MRTN) downgraded to Outperform from Strong Buy at Raymond James
Posco (PKX) downgraded to Neutral from Overweight at HSBC
Rackspace (RAX) downgraded to Neutral from Overweight at JPMorgan
Symantec (SYMC) downgraded to Sector Perform from Outperform at RBC Capital
TransCanada (TRP) downgraded to Sell from Neutral at Goldman

Initiations

American Realty (ARCP) initiated with an Overweight at JPMorgan
Capital Product (CPLP) initiated with a Buy at Jefferies
Continental Resources (CLR) initiated with a Buy at Canaccord
Costco (COST) initiated with a Buy at Citigroup
NRG Yield (NYLD) initiated with an Outperform at RBC Capital
PTC Therapeutics (PTCT) initiated with a Buy at Deutsche Bank
Power Solutions (PSIX) initiated with an Outperform at Northland
Target (TGT) initiated with a Neutral at Citigroup
Wal-Mart (WMT) initiated with a Neutral at Citigroup
Whiting Petroleum (WLL) initiated with a Buy at Canaccord
Winnebago (WGO) initiated with an Outperform at BMO Capital

COMPANY NEWS

Heineken (HEINY) said SABMiller (SBMRY) acquisition proposal non-actionable
Cognizant (CTSH) agreed to acquire TriZetto for $2.7B
Danaher (DHR) to acquire Nobel Biocare Holding for CHF 17.10 per share
HSBC (HSBC) confirmed $550M settlement agreement with FHFA
Oracle (ORCL) acquired Front Porch Digital, terms undisclosed
AT&T (T) said it had the 'biggest iPhone, pre-order launch day ever' (AAPL)
Hudson City Bancorp (HCBK) announced passing of chairman, CEO Ronald Hermance, named Denis Salamone as CEO, effective immediately

EARNINGS
No notable earnings this morning.

NEWSPAPERS/WEBSITES

Apple (AAPL) CEO says working on products that haven't been rumored yet, Re/code reports
Amazon (AMZN) faces tax obstacle in India, FT reports
Herbalife (HLF) near settlement with former distributors, NY Post reports
Netflix (NFLX) to face competition in France from Numericable Group , WSJ reports
Citigroup (C) said to plan OneMain IPO by month-end, Bloomberg says
Home Depot (HD) took steps to up defenses, but hackers moved faster, WSJ reports
JPMorgan (JPM) could have difficulty repelling hackers, NY Times reports
Lam Research (LCRX) shares could return 20%, Barron's says
Popular (BPOP) shares could rise 30%, Barron's says
Pfizer (PFE) shares look cheap, Barron's says
Starbucks (SBUX) shares could fall, Barron's says
Don't listen to bears about Apple (AAPL), Barron's says

SYNDICATE

American Assets Trust (AAT) sells 400K shares at $33.76 in a private placement
InnerWorkings (INWK) files to sell 4.84M shares for holders
Marathon Patent Group (MARA) files to sell 1.32M shares for holders
Smith Micro (SMSI) files to sell 6.85M shares for holders

• Apple CEO Cook Goes From Record Sales to IPhone Stumbles (BBG)
• Deal With Saudis Paved Way for Syrian Airstrikes (WSJ)
• Drone delivery: DHL 'parcelcopter' flies to German isle (Reuters)
• Tory Burch Hires Ralph Lauren Veteran as Co-CEO (WSJ)
• Apple releases iOS 8 workaround to fix dropped cell service (Reuters)
• Ukraine Probes Ex-Minister Over $3 Billion Russian Bond (BBG)
• Goldman Sachs-Led Group Near Deal to Buy Messaging Startup Perzo (WSJ)
• U.K. Seeks to Criminalize Manipulation of 7 Benchmarks (BBG)
• New 'Bash' software bug may pose bigger threat than 'Heartbleed' (Reuters)
• Ukraine Urges No Russia Sanctions End Until Land Regained (BBG)
• Larry Ellison Boosts Oracle Credit Line to $9.9 Billion (BBG)
• Islamist fighters advance in Syria despite U.S. strikes (Reuters)
• Rothschild Makes Comeback With London Cab App to Rival Uber (BBG)
• Rosneft may back out of Morgan Stanley oil unit deal (Reuters)

Overnight Media Digest

WSJ

* Chinese leaders are discussing replacing the central bank chief, Zhou Xiaochuan, amid disagreements over the direction of financial policy, raising questions over how quickly and deeply Beijing wants to remake the economy amid slowing growth. (http://on.wsj.com/1pdYzrM)

* Tory Burch, the maker of logo-emblazoned bags and ballet flats, has hired Ralph Lauren veteran Roger Farah as co-CEO to help build the billion-dollar apparel and accessories business into a global fashion empire. (http://on.wsj.com/1rnvjDE)

* Wall Street firms led by Goldman Sachs Group Inc are close to acquiring messaging startup Perzo Inc to create an instant-messaging service to rival that of Bloomberg LP. (http://on.wsj.com/1uoR2xc)

* Comcast Corp and Time Warner Cable Inc fired back at critics of their proposed $45 billion merger, accusing them of engaging in "extortion" to extract business concessions and win their support for the deal. In comments filed with the Federal Communications Commission late Tuesday night, the companies took shots at streaming-video juggernaut Netflix Inc, cable channel-owner Discovery Communications Inc and Glenn Beck's The Blaze, among others. (http://on.wsj.com/1yrK5hJ)

* European Central Bank President Mario Draghi has again said the ECB could use additional unconventional policy measures if it felt that its inflation target was under threat. (http://on.wsj.com/1CkUkTv)

* General Motors Co continued dribbling out details of its revival plan for the struggling Cadillac luxury brand on Wednesday, saying it will begin renaming the lineup's vehicles after the launch of a new large sedan called the CT6 next year. (http://on.wsj.com/Ze3fZ3)

* Two of China's biggest state-run lenders are encouraging their branches to step up mortgage lending as the country's property market continues to slump. Agricultural Bank of China Ltd said Thursday that it would step up lending to the housing sector with a priority toward demand from home buyers. (http://on.wsj.com/1mX5Lxd)

* Federal security agencies warned retailers on Wednesday that a previously unseen malicious software program they are calling Mozart was used in the attack on Home Depot earlier this year, people familiar with the matter said. (http://on.wsj.com/1u0yu52)

FT

A High Court judge has found that Barclays Plc "misused" confidential deal information in its acquisition of Tricorona for which the British bank was sued by financial advisory firm CF Partners in a 82 million pound ($133.82 million) lawsuit.

Cookies and snacks maker United Biscuits Ltd <IPO-UNI.L> has shortlisted three potential buyers including Kellogg Co, while its private equity owners Blackstone LP and PAI Partners consider a deal that could value the snacks maker at about 2 billion pounds, people close to the matter said.

German ecommerce investor Rocket Internet said its planned 1.5 billion euro ($1.92 billion) initial public offering is already fully subscribed. The company set a price range on Tuesday of 35.50 to 42.50 euros, valuing the business at 6.2 billion euros at the midpoint of this range. A group of over 1,000 authors is planning to call for an antitrust inquiry into Amazon Inc by the U.S. Department of Justice, hoping that the ecommerce company will drop its tactics in a dispute with French publisher Hachette.

Danish container shipping company Maersk Line, owned by A.P. Moller-Maersk, is lining up its first orders of new vessels in three years to maintain its position as the world's largest container shipping company. (1 US dollar = 0.6127 British pound) (1 US dollar = 0.7827 euro)

NYT

* As Harvard named a new management chief in its bid to improve the returns on its huge portfolio, Yale University reported on Wednesday that its fund had earned a 20.2 percent return for the fiscal year, a big payoff for a strategy that was criticized in the wake of the financial crisis. (http://nyti.ms/1DxY85a)

* Top executives at General Motors Co and Ally Financial Inc, both of which received bailouts from the United States Treasury Department in 2009, were paid excessively even as taxpayers lost money, according to a special inspector general report. (http://nyti.ms/1vj9kNy)

* At a hearing in a Federal District Court in New Orleans, Judge Carl J. Barbier ruled that oil giant BP Plc cannot recoup hundreds of millions of dollars it claims to have overpaid victims of the 2010 Gulf Coast oil spill. (http://nyti.ms/1wLZN2s)

* Three days of strikes by union members at five of Amazon Inc's warehouses in Germany ended on Wednesday without the company agreeing to wage talks or reporting any serious disruption to scheduled deliveries. (http://nyti.ms/1uIaJwC)

* China plans to connect the Shanghai stock exchange to its counterpart in Hong Kong over the next month as part of an initiative announced by Premier Li Keqiang this year to open China's markets to foreign investors who have been largely shut out. (http://nyti.ms/1rve7fz)

* Comcast Corp accused its business partners and rivals of "extortion," lashing out against opposition to its proposed $45 billion acquisition of Time Warner Cable Inc . In documents submitted late Tuesday to the Federal Communications Commission, Comcast said many of the media and tech companies that have urged regulators to block or add conditions to the deal were doing so out of their own business interests. (http://nyti.ms/1ss04JM)

Canada

THE GLOBE AND MAIL

** With a decision imminent on the Site C hydroelectric project in northeastern British Columbia, area First Nations have delivered a message to the provincial government: You can have the dam or you can have liquefied natural gas, but you will not get both. The C$8-billion dam would lie in the heart of British Columbia's nascent LNG industry. (http://bit.ly/1qxlduF)

** Switzerland's Bank Gutenberg AG has agreed to pay C$850,000 to settle accusations that it allowed British Columbia's residents to open accounts and trade more than C$300 million worth of securities without being registered in the province. (http://bit.ly/1v2trBk)

** New Brunswick's premier-designate, Brian Gallant, who publicly declared his pro-choice stand in a province that restricts women's access to abortion, is moving quickly to remove those barriers. (http://bit.ly/1rvqcBB)

NATIONAL POST

** Hundreds of Ontario residents who might have contracted tuberculosis from undiagnosed, active-TB patients at a local hospital have won a C$1.7-million settlement in an unusual class-action lawsuit. (http://bit.ly/1urGT30)

** In a marketing deal that critics are alleging is a tad ill-timed, one of Toronto's newest public plazas, Maple Leaf Square, is soon set to be redubbed Ford Square. The rebranding - which has nothing to do with Toronto Mayor Rob Ford - is part of a major sponsorship deal between the Ford Motor Co and square owners Maple Leaf Sports and Entertainment. (http://bit.ly/1v2uAIY)

** A judge has suspended exploratory drilling for the TransCanada oil terminal in eastern Quebec after objections by environmentalists. The decision by Quebec Superior Court Justice Claudine Roy to grant a temporary injunction on Tuesday stops the Alberta-based company from conducting seismic surveys in Cacouna until Oct. 15. (http://bit.ly/1sZerQ5)

China

CHINA SECURITIES JOURNAL

- The quality of China's banking assets is within a stable range and the risks are controllable, said Shang Fulin, Chairman of China Banking Regulatory Commission.

- China National Development Regulatory Commission told the newspaper that it plans to start four projects that will produce 1,000 gigawatts of nuclear power in the coastal areas.

21ST CENTURY BUSINESS HERALD

- Alibaba is looking to take a stake in Shanghai Media Group's soon-to-be merged Bestv and Shanghai Oriental Pearl units for about 1 billion yuan ($163.01 million), the newspaper said citing a source close to the matter.

SHANGHAI SECURITIES NEWS

- The China Securities Regulatory Commission said it would continue to expand its team and improve its technology to clamp down on insider trading.

- Guangdong's supervisory body for state-owned companies plans to invite private investors to inject about 78 billion yuan into 188 projects later this month, as part of a wider government effort to promote mixed-ownership reform.

CHINA DAILY

- The Suzhou branch of property developer Vanke is crowd funding a 100 square metre apartment, saying investors can get a return of 40 percent once the flat is sold.

Britain

The Times

TESCO'S 'BULLYING' AT HEART OF ACCOUNTING SCANDAL

A deeply ingrained pattern of bullying behaviour towards suppliers is said to lie at the heart of Tesco's 250 million pound ($408.28 million) accounting scandal as managers under pressure at the supermarket chain adopt increasingly outlandish tactics to sustain profits. (http://thetim.es/1sYhVCp)

PILOTS BAIL OUT FROM RYANAIR FOR RIVAL AIRLINES, CLAIMS UNION Ryanair has been warned that it is facing a pilot manning crisis that could be puncturing the airline's much-vaunted punctuality record. (http://thetim.es/ZMY4z1) The Guardian TESCO DIRECTOR KEPT OUT OF MONITORING BY ACCOUNTANCY WATCHDOG, SAYS FRC

British accountancy watchdog the Financial Reporting Council confirmed on Wednesday it was monitoring the situation at Tesco Plc and stressed that the non-executive director of the troubled supermarket business who also sits on the FRC board would not participate in any discussions relating to the 250 million pound shortfall in the accounts. (http://bit.ly/1xh4LY8)

ROYAL BANK OF SCOTLAND CHAIRMAN TO MOVE TO GLAXOSMITHKLINE Sir Philip Hampton, chairman of Royal Bank of Scotland Group Plc , is to quit his role at the helm of the bailed-out bank to take on the same position at the embattled pharmaceutical company GlaxoSmithKline Plc. (http://bit.ly/1raaTz1)

BRITAIN'S TOBACCO FIRMS PROTEST AT LABOUR PLAN TO TAX THEM MORE TO PAY FOR NHS

Britain's tobacco industry reacted with fury to the plan by the Labour party leader, Ed Miliband, to tax British cigarette companies to pay for NHS spending, branding the move anti-business and unjust. (http://bit.ly/1xdRS18)

The Telegraph

PRESSURE BUILDS ON TESCO AS MAJOR INVESTOR SELLS SHARES

The pressure on Tesco Corp and its beleaguered Chairman Richard Broadbent has piled up after BlackRock, a major investor, dumped a 150 million pound collection of its shares and the company was forced to admit that it has had no dedicated finance director for the last five months. (http://bit.ly/1vhTFy3)

VODAFONE BRACED FOR BT ATTACK ON MOBILE MARKET

Vodafone Group Plc has admitted it will delay a decision on whether to introduce its own home broadband and television services until BT launches its attack on the consumer mobile market. (http://bit.ly/1ruPxLW)

The Independent

FORMER JJB BOSS IN COURT ACCUSED OF 1 MLN POUND FRAUD

Christopher Ronnie, former chief executive of JJB Sports Plc , allegedly orchestrated a massive fraud when he was 11 million pounds in debt to an Icelandic bank, a court heard on Tuesday. (http://ind.pn/1v1fq6N)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of September 20 at 8:30--consensus 296K
Durable goods orders for August at 8:30--consensus down 18.0% 
Markit services PMI for September at 9:45--consensus 59.2
Kansas City Fed manufacturing activity for September at 11:00--consensus 6

ANALYST RESEARCH

Upgrades

Barrick Gold (ABX) upgraded to Overweight from Neutral at HSBC
Comerica (CMA) upgraded to Buy from Hold at Wunderlich
Schlumberger (SLB) upgraded to Outperform from Sector Perform at Iberia
Thompson Creek (TC) upgraded to Sector Perform from Underperform at Scotia Capital

Downgrades

Chemtura  (CHMT) downgraded to Hold from Buy at KeyBanc
Danone (DANOY) downgraded to Underweight from Neutral at JPMorgan
KB Home (KBH) downgraded to Sector Perform from Outperform at RBC Capital

Initiations

Korn/Ferry (KFY) initiated with a Neutral at Piper Jaffray
Manpower (MAN) initiated with an Overweight at Piper Jaffray
On Assignment (ASGN) initiated with an Overweight at Piper Jaffray
Robert Half (RHI) initiated with a Neutral at Piper Jaffray
Towers Watson (TW) initiated with an Overweight at Piper Jaffray

COMPANY NEWS

BioMarin (BMRN) submits Paragraph IV notice letter for Kuvan tablets to the FDA
Boeing (BA) delivers first 777-300ER to China Eastern Airlines
CSR (CSRE) extends deadline for Microchip takeover talks
Echo (ECTE) cut 70% of workforce, may see added cost from job cuts, bankruptcy possible
GlaxoSmithKline (GSK) names Philip Hampton Non-Executive Director
JAT Capital raises stake in Madison Square Garden (MSG) to 9.36% from 7.75%
MannKind (MNKD) announces closing of global licensing agreement with Sanofi (SNY)
Marchex (MCHX) received notice of termination from Allstate
Novartis (NVS) AIN457 meets primary endpoint in two Phase III studies
Pacira Pharmaceuticals (PCRX) receives FDA warning letter
Regado Biosciences (RGDO) announces 60% workforce reduction, exploring alternatives
Rexahn (RNN) confirms receipt of FDA orphan drug designation for RX-3117
Shire (SHPG) reaches final agreement with U.S. government over sales and marketing of certain drugs
Yahoo (YHOO) in one year lock-up agreement for shares of Alibaba

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Radiant Logistics (RLGT), Jabil Circuit (JBL)

Companies that missed consensus earnings expectations include:
H.B. Fuller (FUL)

Companies that matched consensus earnings expectations include:
Worthington (WOR)

NEWSPAPERS/WEBSITES

Amazon's (AMZN) head of digital music and video to leave, WSJ says  
Apple (AAPL) knew early of security hole in iCloud, The Daily Dot reports
Authors group to ask DoJ to investigate Amazon, WSJ says  
Ex-Telstra CEO aiming for $9.6B offer for Telecom Italia (TI) share, Bloomberg says
GE set to increase industrial battery sales in Japan, Nikkei says 
Global tablet sales momentum to slow down in 2015, DigiTimes reports
Odds of Colgate-Palmolive (CL) takeover rise amid slew of megamergers, Bloomberg says
Tim Cook, others sold $142.76M in Apple (AAPL) stock, Barron's says

SYNDICATE

CONE Midstream (CNNX) 17.5M share IPO priced at $22.00
Travelport (TVPT) 30M share IPO priced at $16.00
W.P. Carey (WPC) 4M share secondary priced at $64.00

• As we warned in May 2013... Gross Exposes $42 Trillion Bond Market’s Key Flaw in Exit (BBG).... hint: no liquidity
• WTI Crude Slips Below $90 for First Time in 17 Months (BBG)
• Traders Thank Fed for Once-in-Decade Surge in Profit (BBG)
• Islamic State committing 'staggering' crimes in Iraq: U.N. report (Reuters)
• Philippine Islamist militants threaten to behead German on October 17 (Reuters)
• Draghi’s Buying Spree for the ECB Might Start Modestly (BBG)
• Russian Officials Say No Plans for Capital Controls (WSJ)
• Indians Join the Wave of Investors in Condos and Homes in the U.S. (NYT)
• Leader of Mexican drugs cartel captured (FT)
• Dallas Ebola patient vomited outside apartment on way to hospital (Reuters)
• Goldman chat room a message to Wall St (FT)
• Angry former workers: Angry Birds Maker Rovio to Cut up to 130 Jobs in Finland (WSJ)
• Steven Cohen Urges Court to Dismiss Ex-Wife’s Fraud Suit (BBG)
• As PIMCO bleeds assets, Gross shows risk of star culture (Reuters)
• Caltech Leads World University Rankings for Fourth Year (BBG)
• U.S. Apartment Vacancies Rise for First Time Since 2009 (BBG)
• Commodity ETF Outflows Reach Highest This Year on Supply (BBG)
• China backs Hong Kong leader CY Leung over tear gas (FT)

Overnight Media Digest

WSJ

* Secret Service Director Julia Pierson resigned after coming under intense pressure following an embarrassing breach of security at the White House two weeks ago. (http://on.wsj.com/10m0Iwa)

* Health authorities are monitoring for symptoms of Ebola in at least a dozen people who came into contact with a Liberian man before he was hospitalized in Dallas, a move to prevent the virus's spread in the U.S. (http://on.wsj.com/1rGPsmT)

* American consumers are buying new cars and trucks at the strongest pace in years, offsetting car makers' troubles elsewhere and leading the biggest U.S. auto maker to forecast fat profits ahead. (http://on.wsj.com/1sO9y28)

* The Coca-Cola Co, bowing to pressure from lead investor Warren Buffett, announced changes to its executive pay plan that will result in fewer stock awards. (http://on.wsj.com/1E2LU4W)

* Pacific Investment Management said investors pulled $23.5 billion from the Pimco Total Return fund in September, the firm's largest-ever monthly outflow, with the largest amount on the day founder Bill Gross abruptly quit. (http://on.wsj.com/1sOcig7)

* Bank of America Corp's board voted to make Brian Moynihan chairman as well as chief executive, capping a comeback for a banker who survived the regulatory scrutiny and huge losses that followed the financial crisis. (http://on.wsj.com/1rGPsn5)

FT

* Some of the world's largest banks have stopped contributing to many of the financial benchmarks to avoid potential litigation, as a result of the Libor and foreign exchange rate rigging scandal.

* German ecommerce company Rocket Internet AG priced its shares at 42.50 euros ($53.6265). The share listing is expected to raise gross proceeds of 1.4 billion euros and give it a market value of 6.7 billion euros.

* France and Italy have increased their defiance of EU budget targets as the two countries go into talks relating to their public finances with their European partners in the coming weeks.

* UK Prime Minster David Cameron vowed to lower income taxes for 30 million people and keep a competitive corporate tax policy. These tax cuts will cost 7.2 billion pounds a year when fully implemented in 2020.

* Google Inc announced it would stop publishing snippets of German publisher Axel Springer's articles in its search results. This action follows a dispute between both the groups over intellectual property rights. (1 US dollar = 0.7925 euro)

NYT

* Pimco's flagship fund, once billed as the world's biggest bond fund, is shrinking fast. In September, investors pulled $23.5 billion from the Pimco Total Return Fund, with the largest redemptions coming on Sept. 26, the day Bill Gross stunned Wall Street by resigning from the firm he co-founded more than 40 years ago. (http://nyti.ms/1rNUmjx)

* Coca-Cola Co, facing sharp shareholder criticism of its executive pay, on Wednesday announced changes to the compensation plan that set off the squall. (http://nyti.ms/10lZYXP)

* Federal and state authorities, a group that includes prosecutors in New York, Alabama and Texas, are zeroing in on the most powerful, and arguably the least regulated, rung of the subprime auto loan chain, used-car dealerships, according to people briefed on the investigations. Already, they have found hundreds of fraudulent loans that together total millions of dollars. (http://nyti.ms/1vz65mf)

* A federal bankruptcy judge on Wednesday upended the widely held belief that public workers' pensions have a special status in California that makes them impossible to cut, further chipping away at the idea that pensions are sacrosanct in a municipal bankruptcy. (http://nyti.ms/1uf22vX)

* David Neil, senior Justice Department Prosecutor said he planned to depart the government at the end of the week, capping an eight-year Justice Department career. (http://nyti.ms/1ps2MIG)

* The proxy advisory firm Institutional Shareholder Services amplified calls for Allergan Inc's board to hold off from making an all-cash acquisition that would scuttle an existing takeover offer from Valeant Pharmaceuticals International Inc and Pershing Square Capital Management. (http://nyti.ms/1oAB502)

* Bank of America Corp said on Wednesday that Brian Moynihan, its chief executive, would assume the additional role of chairman. (http://nyti.ms/1oCs5HM)

* Relational Investors, one of the most prominent activist investors, is planning to start a new fund that will give more day-to-day control to the firm's younger executives, a person briefed on the matter said on Wednesday. (http://nyti.ms/1rxuRDT)

* The German technology company Rocket Internet priced its initial public offering at the top of its price range at 42.5 euros ($53.8) a share on Wednesday, valuing the company at 6.7 billion euros, or roughly $8.4 billion. (http://nyti.ms/1tj1QYh)

Canada

THE GLOBE AND MAIL

** A federal cyberbullying bill, C-13, that includes controversial new surveillance powers - and immunity for telecommunications companies that voluntarily hand over private data to police - has taken another step toward becoming law, despite a recent Supreme Court ruling that critics say is at odds with the bill. (http://bit.ly/1r0pYND)

** Canada's largest school board is joining a handful of other academic institutions in taking steps to sever its ties to a language and culture program controlled by the Chinese government. A Toronto District School Board committee voted on Wednesday evening to terminate the Confucius Institute. All but one member on the planning and priorities committee voted in favour of terminating the accord. (http://bit.ly/1vzP5wd)

** Tough new federal anti-corruption rules risk disqualifying several key government suppliers, jeopardizing government plans to buy items ranging from ships and fighter jets to computer systems. At least five foreign multinationals - BAE Systems PLC, Siemens AG, Alcatel-Lucent SA, Tyco International Inc and Hewlett-Packard Co have been convicted of crimes overseas and consequently face possible 10-year bans from doing business with Ottawa. (http://bit.ly/1mU12w3)

NATIONAL POST

** The Stephen Harper government plans further changes to its oft-maligned veterans charter, hoping to take the political sting out of complaints by ex-soldiers promising to campaign against them in the next election. (http://bit.ly/1psCwOk)

** As the debate over the Scarborough subway rages in the Toronto mayoral race, Ontario's transportation minister was forced on Wednesday to clarify again that the Liberal government is "moving forward" with the transit project, after the finance minister refused to commit to such a position. (http://bit.ly/1tjwmkL)

** The Bank of Canada will be forced to renew warnings of the possibility for higher interest rates in order to halt a "bubble" from forming in the housing market, according to Pacific Investment Management Co Managing Director Ed Devlin. (http://bit.ly/1thjewB)

Corporate Finance

* Colombian Natural Resources, owned by investment bank Goldman Sachs Group Inc, will re-start coal exports and re-establish mining operations after the government helped broker a deal for its use of Drummond's Caribbean Sea port, according to government and industry sources.

* China Investment Corp and AVIC Capital Co Ltd have ended talks to acquire Avolon Holdings Ltd (IPO-AVOL.N), making it likely that the aircraft leasing company will pursue an initial public offering, according to people familiar with the matter.

* Amazon.com Inc's India unit plans to sell packaged food and beverages, starting mid-October, according to a person with direct knowledge of the launch. (bit.ly/1BAIAtJ)

* Hochtief AG, the German building group controlled by Spain's ACS, is close to the sale of its Formart real estate business, two sources familiar with the matter told Reuters on Wednesday.

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of September 27 at 8:30--consensus 297K
Factory orders for August at 10:00--consensus down 9.3%

ANALYST RESEARCH

Upgrades

Autodesk (ADSK) upgraded to Neutral from Sell at Citigroup
Autodesk (ADSK) upgraded to Outperform from Market Perform at Cowen
Autodesk (ADSK) upgraded to Outperform from Neutral at Credit Suisse
Bank of America (BAC) upgraded to Buy from Neutral at UBS
Barrick Gold (ABX) upgraded to Hold from Sell at Canaccord
Electronics for Imaging (EFII) upgraded to Buy from Neutral at Citigroup
Encana (ECA) upgraded to Buy from Hold at Deutsche Bank
Equity One (EQY) upgraded to Neutral from Sell at Citigroup
Fossil (FOSL) upgraded to Buy from Hold at ISI Group
Gentex (GNTX) upgraded to Outperform from Market Perform at Wells Fargo
IntercontinentalExchange (ICE) upgraded to Buy from Hold at Deutsche Bank
Kinder Morgan (KMI) upgraded to Outperform from Market Perform at Wells Fargo
Mattel (MAT) upgraded to Market Perform from Underperform at BMO Capital
NASDAQ (NDAQ) upgraded to Buy from Hold at Deutsche Bank
Pandora (P) upgraded to Buy from Hold at Topeka
Preferred Bank (PFBC) upgraded to Outperform from Market Perform at Raymond James
PulteGroup (PHM) upgraded to Neutral from Sell at Goldman
Time Warner (TWX) upgraded to Hold from Sell at Topeka
Twitter (TWTR) upgraded to Overweight from Neutral at JPMorgan

Downgrades

A10 Networks (ATEN) downgraded to Neutral from Buy at Citigroup
Enphase Energy (ENPH) downgraded to Neutral from Buy at BofA/Merrill
Francesca's (FRAN) downgraded to Hold from Buy at Canaccord
Intuit (INTU) downgraded to Underweight from Equal-Weight at Evercore
JPMorgan (JPM) downgraded to Neutral from Buy at UBS
Motorola Solutions (MSI) downgraded to Neutral from Buy at Citigroup
NVR (NVR) downgraded to Sell from Neutral at Goldman
ONEOK (OKE) downgraded to Neutral from Overweight at JPMorgan
PNC Financial (PNC) downgraded to Hold from Buy at Jefferies
Tower International (TOWR) downgraded to Market Perform from Outperform at Wells Fargo
U.S. Steel (X) downgraded to Hold from Buy at KeyBanc
WebMD (WBMD) downgraded to Hold from Buy at Stifel

Initiations

Delek US (DK) initiated with an Outperform at RBC Capital
Hanesbrands (HBI) initiated with an Outperform at Credit Suisse
HollyFrontier (HFC) initiated with a Sector Perform at RBC Capital
Insys Therapeutics (INSY) initiated with an Outperform at RBC Capital
Madison Square Garden (MSG) initiated with a Neutral at JPMorgan
Marathon Patent Group (MARA) initiated with a Buy at Ladenburg
Marathon Petroleum (MPC) initiated with a Top Pick at RBC Capital
Patent Properties (PPRO) initiated with a Buy at Ladenburg
Phillips 66 (PSX) initiated with a Sector Perform at RBC Capital
Ply Gem (PGEM) reinstated with a Neutral at Credit Suisse
Rightside Group (NAME) initiated with a Buy at B. Riley
Rubicon Project (RUBI) initiated with a Buy at B. Riley
Salesforce.com (CRM) initiated with a Neutral at DA Davidson
Splunk (SPLK) initiated with a Buy at Stifel
Stillwater Mining (SWC) initiated with a Neutral at Goldman
Tesoro (TSO) initiated with an Outperform at RBC Capital
Valero (VLO) initiated with an Outperform at RBC Capital
Varonis (VRNS) initiated with an Outperform at JMP Securities

COMPANY NEWS

BofA (BAC) CEO Moynihan elected Chairman of the Board of Directors
Starboard Value raises stake in RealD (RLD) to 9.9% from 9.1%, proposes $12 buyout
NFL, DirecTV (DTV) extend NFL Sunday Ticket in new multi-year deal
Arotech (ARTX) CEO Robert S. Ehrlich steps down replaced by Steven Esses
Dollar General (DG) extends tender offer to acquire Family Dollar to Oct. 31
EMC (EMC) names Zane Rowe CFO
Liquidity Services (LQDT) announces business realignment, new senior leadership
Netflix (NFLX) signs deal deal with Adam Sandler for four feature films
NewLink Genetics (NLNK) terminates CFO Gordon Link
Qihoo 360 (QIHU) announces $200M share repurchase plan
Tesla (TSLA) CEO says time to 'unveil D, something else'

EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Global Payments (GPN), McCormick (MKC), National American University (NAUH)

Companies that missed consensus earnings expectations include:
Park Electrochemical (PKE)

Global Payments (GPN) ups FY15 cash EPS view to $4.65-$4.75, consensus $4.60
Darden (DRI) sees Q2 EPS in upper end of 26c-28c, consensus 26c
McCormick (MKC) raises FY14 adjusted EPS view to $3.30-$3.37, consensus $3.28
Agrium (AGU) sees Q3 EPS 45c-55c, consensus 68c
PTC Inc. (PTC) sees Q4 revenue at or above high end of $340M-$355M, consensus $349.03M

NEWSPAPERS/WEBSITES

Masimo (MASI) wins $466M verdict in patent suit with Philips, Bloomberg says 
Royal Bank of Canada (RY) prop desk spin-off plan shot down by regulators, WSJ says
Scripps Networks (SNI) reaches licensing deal with Netflix, WSJ reports
Verizon (VZ) withdraws target to throttle unlimited LTE data plans, Gigaom says
Vivendi looking for acquisitions in U.S. media space, NY Post reports

SYNDICATE

AAC Holdings (AAC) 5M share IPO priced at $15.00
Atento (ATTO) 10M share IPO priced at $15.00
Calithera Biosciences (CALA) 8M share IPO priced at $10.00
Digital Ally (dgly) files to sell 1.19M shares for holders
JP Energy (JPEP) 13.75M share IPO priced at $20.00
Memorial Resource (MRD) files to sell 27.8M shares for holders
Portola Pharmaceuticals (PTLA) files to sell 10M shares
Radius Health (RDUS) files to sell common stock
VWR Corp (VWR) 25.532M share IPO priced at $21.00
Wayfair (W) 11M share IPO priced at $29.00

• "Soaring consumer confidence" - How the Economy Is Stoking Voter Anger at Incumbent Governors (WSJ)
• Euro zone deflation worries shield German Bunds from upbeat Fed (Reuters)
• Greece’s Euro Dilemma Is Back as Minister Sees Volatility (BBG)
• Ukraine gas supplies in doubt as Russia seeks EU payment deal (Reuters)
• Sterling Lads Chats Show FX Traders Matching Fix Orders (BBG)
• NATO Tracks Large-Scale Russia Air Activity in Europe (WSJ)
• U.K. SFO Charges Ex-Tullett Prebon Broker in Libor-Rigging Probe (BBG)
• Jerusalem on edge after shooting of rabbi (FT)
• Israeli police kill Palestinian suspected of shooting far-right activist (Reuters)
• Samsung seeks smartphone revamp to arrest profit slide (Reuters)
• Barclays sets aside £500m for forex probe (FT)
• Maine nurse fights Ebola quarantine, says will not be bullied (Reuters)
• Why Oil Prices Went Down So Far So Fast (BBG)
• Washington state support for gun control measure strong before vote (Reuters)
• Microsoft launches wearable fitness device for $199 (Reuters)

Overnight Media Digest

WSJ

* The Federal Reserve said it would end its long-running bond-purchase program, concluding a historic experiment that stirred disagreement among policy makers, economists and investors about its impact even though the central bank said it helped accomplish its goal of reducing unemployment. (http://on.wsj.com/13eYOPn)

* Russian military aircraft conducted aerial maneuvers around Europe this week on a scale seldom seen since the end of the Cold War, prompting NATO jets to scramble in another sign of how raw East-West relations have grown. (http://on.wsj.com/1nS0Z4t)

* The two-year anniversary of superstorm Sandy was marked across the region Wednesday by somber speeches and events that put a spotlight on the rebuilding projects happening since the devastating storm. (http://on.wsj.com/1E4azVI)

* The Obama administration issued new rules that threaten to strip funding from thousands of for-profit college programs, part of a White House attempt to address college costs and rein in student debt, which has doubled since 2007. (http://on.wsj.com/1024GcQ)

* Oil prices would need to fall at least another $20 a barrel to choke off the U.S. energy boom, industry experts say, though some smaller American producers would face serious problems from a more modest decline. (http://on.wsj.com/1q1cdzj)

* China is taking a step toward easing its grip on credit cards, potentially allowing foreign companies like Visa, MasterCard and other electronic payment processors to have a greater presence there. (http://on.wsj.com/1DzN9FG)

* The Securities and Exchange Commission plans to open an inquiry into American Realty Capital Properties Inc's accounting, according to a person familiar with the matter. (http://on.wsj.com/1q0bgY1)

* Citing a less favorable outlook for inflation, Brazil's central bank on Wednesday raised its benchmark interest rate, in a move that wasn't expected by markets. (http://on.wsj.com/1zLYKop)

* Fiat Chrysler Automobiles NV will spin off Ferrari through an initial public offering next year as Chief Executive Sergio Marchionne seeks to unlock the value of the sports-car brand and fund an ambitious five-year plan. (http://on.wsj.com/1p4lvQa)

* European prosecutors and tax authorities are expanding an investigation into complex stock trades that global banks allegedly used to help their clients fraudulently earn tax rebates, according to government officials and lawyers familiar with the probe. The investigation, being led by German prosecutors and tax officials, has recently broadened to involve tax authorities and prosecutors in other countries. (http://on.wsj.com/1wHsYFr)

FT

The heated arguments over Britain's 1.7 billion pounds (2.72 billion US dollar) bill for extra EU budget contributions have shadowed the fact that Britain's net payment to Brussels have almost doubled to over 8 billion pounds over the last five years.

John Manzoni, the new chief executive of the British civil service, will step down as a board member of brewer SABMiller Plc next summer after a group of 70 charities and medical professionals raised serious concerns that the brewery job was "inexplicable and troubling" and showed a "direct conflict of interest with British public health policy goals."

Britain's Serious Fraud Office (SFO) has added tensions to the supermarket chain Tesco Plc's accounting issues by launching a criminal investigation. Tesco said in a statement that it will co-operate with the SFO's investigation. Royal Bank of Scotland Group Plc has warned that about 16,500 customers have had more than 1 million pounds taken away from their bank accounts by brokers offering payday loans since July.

NYT

* Microsoft Corp has created a wrist-worn fitness device, Microsoft Band, and a related online service, Microsoft Health, that will analyze the data from the band and other devices to help people with their fitness goals. Microsoft is charging $199 for the device. (http://nyti.ms/1p4ENF0)

* Facing pressure from supporters of Apple Inc's new mobile payment system, the consortium of major retailers, Merchant Customer Exchange, creating a rival system said on Wednesday that it might adjust its strategy. (http://nyti.ms/10AcNOu)

* The Food and Drug Administration said on Wednesday that it had approved Pfizer Inc's vaccine for a dangerous strain of meningitis that caused outbreaks last year at Princeton and the University of California, Santa Barbara. (http://nyti.ms/1rTmcaC)

* Facing increasing scrutiny of how it handled the recall of dangerously defective airbags, the nation's auto safety regulator, National Highway Traffic Safety Administration, sent a letter on Wednesday to 10 major automakers and Takata Corp , the airbags' maker, urging a faster response. (http://nyti.ms/1FXD4Xf)

* Fiat Chrysler Automobiles said on Wednesday that it planned to spin off Ferrari, the Italian luxury sports car maker, listing its shares in New York and possibly in Europe. (http://nyti.ms/13hgtG4)

Canada

THE GLOBE AND MAIL

** The Conservative government will announce an income-splitting tax break for parents on Thursday, sources say. The measure will allow the higher-earning parent of children up to 18 years of age to transfer as much as C$50,000 ($44,639) of income to the lower-earning spouse for tax purposes. (http://bit.ly/1tRRkNk)

** The Toronto District School Board has officially severed its ties to a Confucius Institute subsidized and controlled by the government of China. Trustees overwhelmingly voted on Wednesday night in favor of terminating an agreement that would have taught elementary students Mandarin and other cultural programs controlled by China's Ministry of Education. (http://bit.ly/1tEO9XZ)

** A 30-year-old assault-rifle collector from Pakistan has been arrested on allegations that he is a terrorist threat to Canada. The new case shows how the Canadian government's approach to suspected extremists may be evolving. (http://bit.ly/1q2bca9)

NATIONAL POST

** Bank of Canada Governor Stephen Poloz estimates that if the low price of oil persists, it will knock a quarter-point off the growth of Canada's gross domestic product in 2015. (http://bit.ly/1yJ76cp)

** The shooter in last week's deadly attack in Ottawa was a criminal, but not a terrorist, according to New Democratic Party Leader Tom Mulcair. His comments were met with immediate condemnation from Conservatives and the leader of the Liberal party. (http://bit.ly/1tjGNcz)

** A security alert sent to federal public servants at the height of last week's attack in Ottawa was in English only, which the country's languages watchdog says represents a "critical failure" during a potential life-and-death situation. (http://bit.ly/1E4Q0IZ)

China

CHINA SECURITIES JOURNAL

- Net profits at nine listed banks in the first three months of the year rose 9 percent from a year early, but their non-performing loan ratios jumped 35.5 percent, according to the newspaper's calculations.

- The World Bank said in a report that China's economic growth is expected to slow to 7.4 percent for this year.

CHINA DAILY

- A credible and trusted judiciary is the last line of defence for fairness and justice in society, an editorial said. Whether or not the Communist Party's latest decision to govern in accordance with law can bear fruit rests ultimately on whether or not it can build a government which is in awe of the law, it said.

SHANGHAI DAILY

- China's twin-engine ARJ21 regional jet began a month-long set of trial flights at more than 10 airports in the country's southwest to test its reliability before starting commercial flights early next year.

PEOPLE'S DAILY

- Cadres and the masses, and especially leaders at all levels, should take the road of socialism with Chinese characteristics and the rule of law, and promote the national governance system and the modernization of governance to achieve the great Chinese dream of the rejuvenation of the Chinese nation and to provide effective legal protections, an editorial said.

Britain

The Times

DIAGEO PUTS 50 MLN POUND NEW DISTILLERY ON ICE Plans by Diageo Plc for a new 50 million pound ($79.87 million) malt whisky distillery at Teaninich, in the Scottish Highlands, have been put on hold as the biggest Scotch whisky maker responds to a slowdown in demand for a dram around the world. The Johnnie Walker and J&B owner has also delayed investments in some of its existing distilleries, including an 18 million pound expansion of the Mortlach distillery in Speyside and a 30 million pound project at Clynelish distillery in Sutherland. (http://thetim.es/1Duz1xw) HEATHROW FEELS THE PINCH AS IT AWAITS EXPANSION DECISION

Heathrow, Europe's largest airport, is running out of steam, according to the latest financial and operational data, as it awaits a decision on whether it will be allowed to build at least one new runway. Five of its seven key markets are slowing, rate of spending by passengers has been pegged back and the airport is braced for a significant brake in revenues from charging airlines as a tough five-year regulatory settlement kicks in. (http://thetim.es/1sHpm04)

The Guardian

CRIMINAL INVESTIGATION LAUNCHED INTO TESCO'S ACCOUNTING Britain's Serious Fraud Office has launched a formal criminal investigation into accounting practices at Tesco Plc, which led to a 263 million pound profit overstatement at Britain's biggest retailer. The inquiry, which was confirmed by the watchdog on Wednesday, will supercede an investigation by the Financial Conduct Authority (FCA), the financial regulator, which has been halted with immediate effect. It is not clear whether it will affect the launch of an inquiry by the accountancy watchdog, the Financial Reporting Council (FRC), which is also being considered. (http://bit.ly/1E1qfcu)

YORKSHIRE BUILDING SOCIETY FINED 4 MLN STG FOR UNFAIR TREATMENT OF BORROWERS Britain's financial watchdog Financial Conduct Authority has fined Yorkshire Building Society 4.1 million pounds for unfairly treating mortgage borrowers when they were struggling with repayments. The building society is repaying a total of 8.4 million pounds to 34,000 mortgage customers. (http://bit.ly/1u99bjs)

The Telegraph

TESCO TO BE INVESTIGATED BY SERIOUS FRAUD OFFICE

The Serious Fraud Office is to investigate Tesco over the accounting irregularities that created a 263 million pound shortfall in the company's profits. The SFO has notified Tesco that it will launch a formal criminal investigation into accounting practices at the company. The intervention by the SFO heightens the crisis facing Britain's biggest retailer, which attempted to draw a line under the accounting scandal when it presented interim results last week. It means that the company and individuals could face criminal charges. As a result of the SFO's intervention, the Financial Conduct Authority will halt its own investigation into Tesco. (http://bit.ly/1thgnIp)

JAGUAR LAND ROVER TO BUILD DISCOVERYS IN BRAZIL

British luxury carmaker Jaguar Land Rover has announced that its Discovery Sport will be one of the first vehicles to be built at its new plant in Brazil as the company looks to improve its penetration into foreign markets. The company said the plant at Itatiaia, in the west of South American country, will have the capacity to build 24,000 vehicles a year once production starts there in 2016. The plant will initially create 400 jobs and this is expected to near double by the end of the decade. A further 1,000 jobs are expected to be completed created in the local supply chain. (http://bit.ly/1E3FhOU)

EXITING UK IS 'ABSOLUTE PRIORITY', SAYS CLYDESDALE AND YORKSHIRE BANK OWNER

The Australian owner of Clydesdale and Yorkshire banks has made exiting Britain its "absolute priority", and is exploring options that could see the two lenders floated on the stock market. National Australia Bank said its "clear focus" is on its home market and New Zealand, and highlighted the need for "greater urgency" in dealing with "low-returning assets". Clydesdale and Yorkshire have dragged down the wider group in recent years, with the crisis-hit British economy faring much worse than those of Australia and New Zealand. (http://bit.ly/1zLrBth)

Sky News

BRITISH BANKS TO TAKE 1 BLN STG HIT AS FOREX DEAL LOOMS

Three of the Britain's biggest banks are poised to set aside roughly 1 billion pound for settlements with regulators during the next week following a probe into the abuse of critical foreign exchange benchmarks. Barclays Plc, HSBC holdings Plc and Royal Bank of Scotland Group Plc plan to make the aggregate provision as part of their third-quarter results during the next week. (http://bit.ly/1FW9y42) FORMER BBC CHIEF TO JOIN STATE ASSETS BODY

A former BBC executive will on Thursday be appointed to the board of the body which oversees state-owned assets weeks before the completion of an inquiry into how such businesses are sold. Caroline Thomson, who stepped down as the BBC's chief operating officer in 2012, will become a non-executive director of the Shareholder Executive. (http://bit.ly/1wGKnOL)

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of October 25 at 8:30--consensus 280K
Q3 GDP at 8:30--consensus up 3.0%

ANALYST RESEARCH

Upgrades

Ally Financial (ALLY) upgraded to Buy from Hold at Deutsche Bank
Cree (CREE) upgraded to Neutral from Underperform at BofA/Merrill
Finish Line (FINL) upgraded to Overweight from Neutral at Piper Jaffray
Grand Canyon (LOPE) upgraded to Overweight from Neutral at Piper Jaffray
Ignite Restaurant (IRG) upgraded to Market Perform from Underperform at Raymond James
Lowe's (LOW) upgraded to Buy from Neutral at Goldman
MakeMyTrip (MMYT) upgraded to Buy from Hold at Deutsche Bank
MicroStrategy (MSTR) upgraded to Overweight from Equal Weight at First Analysis
PG&E (PCG) upgraded to Neutral from Sell at Goldman
STMicroelectronics (STM) upgraded to Neutral from Sell at UBS
Sealed Air (SEE) upgraded to Market Perform from Underperform at Wells Fargo
Sprint (S) upgraded to Neutral from Underperform at Credit Suisse
SunPower (SPWR) upgraded to Buy from Hold at Canaccord
Take-Two (TTWO) upgraded to Buy from Hold at Brean Capital
Visa (V) upgraded to Outperform from Market Perform at FBR Capital

Downgrades

Associated Estates (AEC) downgraded to Hold from Buy at Wunderlich
C.H. Robinson (CHRW) downgraded to Underperform from Neutral at Credit Suisse
CNOOC (CEO) downgraded to Hold from Buy at Jefferies
Carlyle Group (CG) downgraded to Neutral from Buy at BofA/Merrill
Dixie Group (DXYN) downgraded to Outperform from Strong Buy at Raymond James
DreamWorks Animation (DWA) downgraded to Neutral from Buy at Janney Capital
Edison International (EIX) downgraded to Neutral from Buy at UBS
Evolving Systems (EVOL) downgraded to Neutral from Buy at B. Riley
Haverty Furniture (HVT) downgraded to Market Perform from Outperform at Raymond James
Healthcare Trust (HTA) downgraded to Hold from Buy at Wunderlich
Kraft Foods (KRFT) downgraded to Neutral from Outperform at Credit Suisse
PAREXEL (PRXL) downgraded to Neutral from Outperform at RW Baird
SPX Corp. (SPW) downgraded to Market Perform from Outperform at FBR Capital
SPX Corp. (SPW) downgraded to Neutral from Buy at Goldman
Southern Company (SO) downgraded to Underperform from Neutral at BofA/Merrill
Trustmark (TRMK) downgraded to Underperform from Market Perform at Keefe Bruyette

Initiations

Achaogen (AKAO) initiated with a Buy at Cantor
Brown Shoe (BWS) initiated with an Underweight at Morgan Stanley
Citizens Financial (CFG) initiated with a Neutral at RW Baird
DSW (DSW) initiated with an Underweight at Morgan Stanley
Deckers Outdoor (DECK) initiated with an Overweight at Morgan Stanley
Genesco (GCO) initiated with an Equal Weight at Morgan Stanley
Kate Spade (KATE) initiated with a Neutral at Mizuho
Skechers (SKX) initiated with an Overweight at Morgan Stanley
Southwestern Energy (SWN) initiated with an Outperform at Imperial Capital
Steven Madden (SHOO) initiated with an Equal Weight at Morgan Stanley
Wolverine World Wide (WWW) initiated with an Equal Weight at Morgan Stanley

COMPANY NEWS

Shutterfly (SFLY) said it will "remain independent at this time"
Royal Dutch Shell (RDS.A) said Charles Holliday will be next chairman
Samsung (SSNLF) sees demand for smartphone, tablet to increase during Q4
Appellate court upheld $203M judgement against Wells Fargo (WFC)
Novavax (NVAX) received FDA fast track designation for H7N9 VLP
Starboard Value urged RealD (RLD) board to engage in dialogue
Visa (V) authorized new $5B share repurchase program

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

DreamWorks Animation (DWA), Strayer (STRA), Progressive Waste (BIN), PBF Energy (PBF), ExlService (EXLS), Banc of California (BANC), Gentherm (THRM), Auxilium (AUXL), Ball Corp. (BLL), Air Products (APD), Quintiles (Q), MEDNAX (MD), Cigna (CI), Aegion (AEGN), Methanex (MEOH), EnPro (NPO), Care.com (CRCM), Vector Group (VGR), Hudbay Minerals (HBM), Silicon Motion (SIMO), Atlantic Tele-Network (ATNI), Ensco (ESV), American Railcar (ARII), United Insurance (UIHC), Barrick Gold (ABX), Brookline Bancorp (BRKL), Range Resources (RRC), TriCo Bancshares (TCBK), California Water Service (CWT), Hyster-Yale Materials (HY), Oceaneering (OII), Noble Corp. (NE), Pilgrim's Pride (PPC), LifeLock (LOCK), Questar (STR), HomeTrust (HTBI), SS&C Technologies (SSNC), Curtiss-Wright (CW), Amerisafe (AMSF), CoStar Group (CSGP), Peregrine (PSMI), Macquarie Infrastructure (MIC), Murphy Oil (MUR), Retail Opportunity (ROIC), Image Sensing Systems (ISNS), Masimo (MASI), Digital River (DRIV), CACI (CACI), CBRE Group (CBG), Glu Mobile (GLUU), Avis Budget (CAR), Moelis (MC), Quantum (QTM), Hornbeck Offshore (HOS), MobileIron (MOBL), Lincoln National (LNC), Superior Energy (SPN), AXIS Capital (AXS), Assurant (AIZ), Smith Micro (SMSI), Fleetmatics (FLTX), RingCentral (RNG), FormFactor (FORM), Anika Therapeutics (ANIK), Con-way (CNW), McGrath RentCorp (MGRC), Weight Watchers (WTW), Grand Canyon (LOPE), Westell Technologies (WSTL), Veeco (VECO), Support.com (SPRT), Arch Capital (ACGL), Cempra (CEMP), Charles River Labs (CRL), Vistaprint (VPRT), Legacy Reserves (LGCY), MedAssets (MDAS), Credit Acceptance (cacc), Cavium (CAVM), Danaos (DAC), Cardtronics (CATM), Pacific Ethanol (PEIX), Capital Product (CPLP), Take-Two (TTWO), JDSU (JDSU), Insight Enterprises (NSIT), Calix (CALX), CTI BioPharma (CTIC), Carriage Services (CSV), Flextronics (FLEX), ARRIS (ARRS), RF Micro Devices (RFMD), Norwegian Cruise Line (NCLH), PAREXEL (PRXL), International Rectifier (IRF), Hanesbrands (HBI), Allstate (ALL), F5 Networks (FFIV), MetLife (MET), Visa (V), NCI, Inc. (NCIT), Akamai (AKAM), Whiting Petroleum (WLL), Acadia Healthcare (ACHC), Silicon Graphics (SGI), Forrester (FORR), Blackbaud (BLKB), QuickLogic (QUIK), Cardiovascular Systems (CSII), Cirrus Logic (CRUS)

Companies that missed consensus earnings expectations include:

Apollo Global (APO), NiSource (NI), PBF Logistics (PBFX), Bunge (BG), Harte-Hanks (HHS), LPL Financial (LPLA), USA Compression (USAC), M.D.C. Holdings (MDC), Time Warner Cable (TWC), Xcel Energy (XEL), AudioCodes (AUDC), Marlin Midstream (FISH), Terex (TEX), Kraton Performance (KRA), NewMarket (NEU), Sturm, Ruger (RGR), Agnico-Eagle (AEM), Kirby (KEX), Kearny Financial (KRNY), Service Corp. (SCI), Haverty Furniture (HVT), ARMOUR Residential (ARR), Fox Chase Bancorp (FXCB), PGT, Inc. (PGTI), Alon USA Partners (ALDW), Access Midstream (ACMP), Intersil (ISIL), Aspen Insurance (AHL), General Cable (BGC), KapStone (KS), Penn Virginia (PVA), TTM Technologies (TTMI), K2M Group (KTWO), Comfort Systems USA (FIX), Roadrunner (RRTS), Yamana Gold (AUY), Alliance Fiber Optic (AFOP), Williams (WMB), Equinix (EQIX), TFS Financial  (TFSL), Martin Midstream Partners (MMLP), Accuray (ARAY), American Capital Mortgage (MTGE), Intrepid Potash (IPI), Shutterfly (SFLY), Rosetta Stone (RST), MDC Partners (MDCA), Ignite Restaurant (IRG), Heritage Financial (HBOS), Fortune Brands (FBHS), Unum Group (UNM)

Companies that matched consensus earnings expectations include:

Vical (VICL), Enterprise Products (EPD), Greenbrier (GBX), Triumph Group (TGI), Royal Gold (RGLD), Celadon Group (CGI), Cloud Peak (CLD), Hudson Technologies (HDSN), ManTech (MANT), Atmel (ATML), Trulia (TRLA), Steiner Leisure (STNR), QIAGEN (QGEN), Century Aluminum (CENX)

NEWSPAPERS/WEBSITES

HBO (TWX) sees opportunity to offer streaming option through Apple TV (AAPL), Xbox (MSFT), WSJ says (AMZN)
Microsoft (MSFT) reduces 3,000 jobs, completes workforce reduction plan, Reuters reports
Amazon.com (AMZN) opens overseas websites to Chinese consumers, China Daily says
Twitter's (TWTR) head of product engineering to leave company, Re/code reports
DHS says spies targeted control systems made by Siemens (SIEGY), GE (GE), WSJ reports

SYNDICATE

Acadia Realty Trust (AKR) files to sell 3.4M shares of common stock
Boot Barn (BOOT) 5M share IPO priced at $16.00
Carlyle Group (CG) files to sell 460K common units for holders
Chimerix (CMRX) announces commencement of $105M common stock offering
Chimerix (CMRX) files $150M common stock shelf
Facebook (FB) files to sell 162.7M shares for WhatsApp stockholders
Fifth Street Asset (FSAM) 6M share IPO priced at $17.00
Inogen (ingn) 2.1M share Secondary priced at $21.50
Western Gas Partners (WES) files to sell 7.5M common units

• To salvage his presidency, Obama faces pressure to reboot - but will he? (Reuters)
• Pro-Russian separatist Zakharchenko wins Ukraine rebel vote (Reuters)
• Russia's Recognition of Ukrainian Separatist Election Is 'Incomprehensible,' Germany Says (Moscow Times)
• Man Running World’s Biggest Wealth Fund Tackles China Riddle (BBG)
• Russian Supply Underpins Global Oil Glut (WSJ)
• Argentina accuses Procter & Gamble of tax fraud, says suspends operations (Reuters)
• ECB Skips Fireworks for Day One of New Role as Supervisor (BBG)
• HSBC Hit by $1.7 Billion of Provisions (WSJ)
• Boies Poised for Possible Upset in AIG $25 Billion Bailout Trial (BBG)
• Portugal Sees Chinese Do 90% of Bids at Property Auction (BBG)
• Islamic State says seizes second gas field in Syria (Reuters)
• Casinos to Marijuana Questions Go Before State Voters (BBG)
• Altice Offers $8.8 Billion for PT Portugal (WSJ)
• Tomato Demand Spurs Record California Crop Amid Drought (BBG)
• Strong dollar squeezes oil, China data limits stock gains (Reuters)
• Wanted: 500,000 pilots for China aviation gold rush (Reuters)
• Alibaba's first earnings to test mettle, investor enthusiasm (Reuters)
• Dunkin’ Duels Starbucks With Snickerdoodle Latte (BBG)
• At least 24 migrants die as boat sinks in Black Sea near Istanbul (Reuters)

Overnight Media Digest

WSJ

* Preliminary data suggest some type of violent structural failure, rather than an engine explosion, might be the likely cause of the crash of Virgin Galactic's experimental rocket ship on Friday. (http://on.wsj.com/10MfCw0)

* Exxon Mobil Corp, Royal Dutch Shell Plc and Chevron Corp have lower profit margins than a decade ago, according to a Wall Street Journal analysis, prompting them to shelve expansion plans and shed operations. (http://on.wsj.com/1vC9L44)

* Publicis Groupe SA is in talks to buy Sapient Corp, as the French advertising firm seeks to speed up its transformation into a digital-technology company. (http://on.wsj.com/1GcHJEE)

* Five days after the first U.S. Ebola case was confirmed, Massachusetts General Hospital deployed a new Ebola application made by QPID Health Inc that automatically matches a patient's travel and family history with medical symptoms. (http://on.wsj.com/1zqVdL8)

* Investors who bet on strong growth at Alibaba Group Holding Ltd when it went public in September, will soon get their first look at how well the Chinese e-commerce giant is meeting their expectations when it will report quarterly earnings on Tuesday for the first time since its record $25 billion debut on the New York Stock Exchange. (http://on.wsj.com/1GcYtvw)

* Diageo Plc is nearing an asset-swap deal with Jose Cuervo that would give the British liquor giant full ownership of a fast-growing tequila brand in exchange for its Bushmills Irish whiskey. (http://on.wsj.com/1yPj4Bh)

* Investors seeking higher returns are finding them in an unexpected place: the market for debt sold by states, cities and government-related entities. Municipal bonds have posted their longest string of monthly gains in more than two decades, outpacing gains this year in blue-chip U.S. stocks and corporate debt. (http://on.wsj.com/1pgwJkA)

FT

Sir Richard Branson's ambitious project to put tourists into space, Virgin Galactic, has come under scrutiny after accusations came out that the company had ignored safety warnings. George Whitesides, head of the company, denied accusations that the company had taken risks with a new rocket propulsion system and added that it could have a new spacecraft ready by the next year.

French advertising group Publicis Groupe SA is in talks to buy U.S. based consultancy-firm Sapient Corp to enter into the world's largest market, months after a merger deal with counterpart Omnicom Group Inc fell through.

A "contractual problem" has derailed one of the largest initial public offerings in Europe this year - the flotation of Spain's state-owned airport operator Aena. According to government estimates, the IPO, which was scheduled for Nov. 12, could be worth as much as 8 billion euros ($10.01 billion).

Despite an economy that is stagnating, an increasing number of European companies are reshoring their operations to the eurozone, a research by consultancy firm PwC suggests. About two-thirds of 381 non-financial companies in the eurozone said they had reshored some of their operations in the past one year.

NYT

* Italian bank Monte dei Paschi di Siena said it would ask investors to help it raise the money it needed to satisfy demands from the European Central Bank that it bolster its ability to survive an economic downturn or other crises. (http://nyti.ms/1ttLGy0)

* Monster Worldwide Inc, which revolutionized online job hunting in the 1990s, is trying to reinvent itself for the era of Twitter and Facebook with new products that capitalize on social media. (http://nyti.ms/1rPClwP)

* Product placement in a novel might strike some as unseemly, but "Find Me I'm Yours" is not like most novels. It is an ebook, a series of websites and web TV shows, and a vehicle for content sponsored by companies. And if it succeeds, it could usher in a new business model for publishers, one that blurs the lines between art and commerce in ways that are routine in TV shows and movies but rare in books. (http://nyti.ms/1ttH0Z3)

* A year after a grueling fight with the investor Carl Icahn, Michael Dell says he is very happy to have the computer company Dell Inc that bears his name back to himself. On Tuesday, Dell will show what he has been up to since the seven-month struggle with Icahn ended last year. (http://nyti.ms/1ufzwfd)

* Macy's Inc flagship Herald Square store has long tried to be everything to everyone. But in a $400 million renovation, it is taking sharper aim at millennials and free-spending tourists. (http://nyti.ms/1yPaWRk)

* More than a year before the first legal dose of marijuana will be dispensed in New York, a group of entrepreneurs gathered at the Marriott Marquis hotel in Times Square in late October to discuss strategy with an influential state lawmaker. (http://nyti.ms/1vC9Sg2)

* Public Broadcasting Service's "Masterpiece", the 43-year-old English drama franchise, is capitalizing on the runaway success of "Downton Abbey" by adding new shows and more airtime early next year. (http://nyti.ms/1s6cn9e)

* Americans are expected to buy a record $89 billion worth of gifts online this holiday season, according to a new report from Forrester Research. That's a 13 percent jump over last year, when hundreds of millions of gifts and bad weather overtaxed United Parcel Service Inc and FedEx Corp leading to shipping delays. (http://nyti.ms/1xR0KGE)

Canada

THE GLOBE AND MAIL

** Canada has made its mark on the battlefield in Iraq with CF-18 warplanes dropping their first bombs in Canada's combat mission there. Canadian fighter jets attacked Islamic State militant targets near the city of Fallujah on Sunday, Ottawa said. It's not clear how much damage the CF-18s caused. The military says it requires two days, until Tuesday, before it can tell Canadians what was achieved. (http://bit.ly/1qlZpDT)

** Canadian Prime Minister Stephen Harper heads to Beijing this week to try and set the China-Canada relationship on a more even keel after a rough couple of years. Harper, who has alternated as prime minister between a hawk on China who wouldn't sell out to "the almighty dollar" and a pragmatist calling for deeper economic ties, will now try to strike a rapport with Chinese President Xi Jinping. (http://bit.ly/1qm0DPn)

** Chevron Corp has welcomed the British Columbia government's plan to lighten the tax load on liquefied natural gas projects as the U.S. energy giant seeks Asian customers for Canadian LNG. (http://bit.ly/1qlZc3n)

NATIONAL POST

** Lawyers are openly questioning the Canadian Conservative Party, Tories over a provision in new victim's rights legislation that could allow witnesses to testify without identifying themselves in a broad range of criminal trials - including national security cases - warning that the measures are "unprecedented" and likely to be found unconstitutional. (http://bit.ly/1wWLRpN)

** Skyreader Media Inc, a Toronto-based interactive production studio and software provider, has inked a deal with Marvel and parent company Walt Disney Co to make its official interactive e-magazines for its film releases for the next two years - starting with its summer blockbuster "Guardians of the Galaxy". (http://bit.ly/1GetTBO)

China

PEOPLE'S DAILY

- The municipal government of Beijing has taken a slew of steps to ensure clean air during the Asia-Pacific Economic Cooperation (APEC) summit to be held in the city on Nov. 10 and 11 among other APEC activities around that time.

CHINA SECURITIES JOURNAL

- The Chinese government is expected to continue taking targeted easing steps to support the economy after an unexpected low reading in the official manufacturing Purchasing Managers' Index for October, economists say.

- Regulators will step up efforts to require listed firms to enhance their governance, including better corporate information disclosure, Zhuang Xinyi, vice chairman of the China Securities Regulatory Commission, told a forum over the weekend.

CHINA DAILY

- China's media watchdog has strengthened regulations for foreign television shows available on online streaming sites, saying such shows must be reviewed by the watchdog before being made available and have permits.

- China's box office revenues are forecast to hit 30 billion yuan ($4.9 billion) in 2014, according to the country's film association.

SHANGHAI SECURITIES NEWS

- China's pioneering experiment in financial reforms for the private sector kicked off in the eastern city of Wenzhou two-and-a-half years ago, has accumulated experiences to be copied to other regions and will benefit the development of the sector in the long term.

- Fresh funds are pouring into China's stock market after its recent strong technical rebound and analysts believe that the main Shanghai Composite Index may continue rallying in the near term as a result.

Britain

The Times

* Bosses on edge over holiday pay rulings

Businesses are facing a bill running to billions of pounds from employment law rulings this week in which workers claim they have been underpaid for annual statutory leave for years. (http://thetim.es/1yOVQLF)

* Terry Leahy offers reminder of what Tesco did best

Tesco Plc's lauded former chief executive has claimed that the supermarket chain ran into trouble because it forgot its sense of purpose. Addressing analysts in a private call last week, Terry Leahy said that the group had "focused too much on what it isn't, rather than remembering what it is and working with that". (http://thetim.es/1ueEYPo)

The Guardian

* Virgin Galactic was warned about potential instability of new fuel, experts say

Fifteen federal U.S. investigators have begun combing over the fatal crash site of the Virgin Galactic space plane in California's Mojave desert, as questions surfaced about the unconventional fuel propulsion system used to blast the craft up to space. (http://bit.ly/1tQtdx6)

* Alistair Darling to stand down at next year's general election

Alistair Darling, Labour's former chancellor, has revealed he will step down as an MP at the next election, warning that the issue of an EU referendum is a "boil that has to be lanced." (http://bit.ly/1o6LMfU)

The Telegraph

* Tesco eyes 1 bln pounds from bank sale

Tesco Plc has begun exploring the possible sale of a stake in its banking arm as it speeds up plans to raise billions of pounds in much-needed additional capital. (http://bit.ly/1zYhG3w)

* Britain blocking VAT red tape from Europe

Plans to impose a standard VAT return on all European companies have hit a brick wall after the UK and other countries refused to introduce extra paperwork for businesses. EU officials are expected to tell finance ministers this week that the reforms cannot go ahead in their current form, after a year of wrangling between the member states. (http://bit.ly/1yOXa0P)

Sky News

* 'Take Politics Out Of Child Abuse Inquiry'

Home Secretary Theresa May has been urged to look beyond Westminster to find someone to lead an inquiry into historical sexual abuse. It has also been suggested she establishes a forum made up of abuse survivors to run alongside the child abuse inquiry. (http://bit.ly/13wOHWh)

* New law plans to tackle mobile phone blackspots

Culture Secretary Sajid Javid wants to change the law to force networks to allow customers to switch providers when their phones cannot find a signal. The Government is expected to start a consultation process on the reforms this week. (http://bit.ly/1twTq3Z)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Markit manufacturing PMI for October at 9:45--consensus 56.1
ISM manufacturing index for October at 10:00--consensus 56.0

ANALYST RESEARCH

Upgrades

AngloGold (AU) upgraded to Buy from Hold at Deutsche Bank
Arista Networks (ANET) upgraded to Buy from Hold at Stifel
BlackRock (BLK) upgraded to Buy from Neutral at Citigroup
Crown Castle (CCI) upgraded to Buy from Neutral at Goldman
Eastman Chemical (EMN) upgraded to Buy from Hold at Jefferies
Ellie Mae (ELLI) upgraded to Outperform from Market Perform at JMP Securities
Eni SpA (E) upgraded to Hold from Underperform at Jefferies
Heritage-Crystal Clean (HCCI) upgraded to Buy from Hold at Stifel
Legacy Reserves (LGCY) upgraded to Buy from Neutral at BofA/Merrill
NVIDIA (NVDA) upgraded to Sector Perform from Underperform at Pacific Crest
RealPage (RP) upgraded to Outperform from Market Perform at JMP Securities
Rockwell Collins (COL) upgraded to Outperform from Market Perform at Wells Fargo
Royal Gold (RGLD) upgraded to Buy from Neutral at Goldman
SPX Corp. (SPW) upgraded to Outperform from Neutral at Wedbush
Spirit AeroSystems (SPR) upgraded to Overweight from Neutral at JPMorgan
Statoil (STO) upgraded to Hold from Underperform at Jefferies
TD Ameritrade (AMTD) upgraded to Buy from Neutral at Citigroup
TJX (TJX) upgraded to Outperform from Neutral at Wedbush
WisdomTree (WETF) upgraded to Buy from Neutral at Citigroup

Downgrades

ATK (ATK) downgraded to Sector Perform from Outperform at RBC Capital
American Tower (AMT) downgraded to Neutral from Buy at Goldman
Barrick Gold (ABX) downgraded to Hold from Buy at Deutsche Bank
Digital Realty (DLR) downgraded to Sell from Hold at Cantor
Embraer (ERJ) downgraded to Sector Perform from Outperform at RBC Capital
Essex Property Trust (ESS) downgraded to Neutral from Buy at Mizuho
Francesca's (FRAN) downgraded to Neutral from Outperform at Wedbush
Home Depot (HD) downgraded to Market Perform from Outperform at Raymond James
ITC Holdings (ITC) downgraded to Hold from Buy at Deutsche Bank
Lincoln National (LNC) downgraded to Hold from Buy at Deutsche Bank
MB Financial (MBFI) downgraded to Neutral from Buy at Sterne Agee
MWI Veterinary Supply (MWIV) downgraded to Neutral from Buy at UBS
Matson (MATX) downgraded to Market Perform from Outperform at FBR Capital
MoneyGram (MGI) downgraded to Market Perform from Outperform at Wells Fargo
National Oilwell (NOV) downgraded to Neutral from Outperform at Credit Suisse
Newmont Mining (NEM) downgraded to Hold from Buy at BB&T
Sonic (SONC) downgraded to Neutral from Buy at Longbow
Tilly's (TLYS) downgraded to Hold from Buy at Stifel
TriCo Bancshares (TCBK) downgraded to Outperform from Strong Buy at Raymond James
WSFS Financial (WSFS) downgraded to Market Perform from Outperform at Keefe Bruyette
Yamana Gold (AUY) downgraded to Neutral from Buy at Goldman

Initiations

AES Corp. (AES) initiated with an Outperform at RBC Capital
CONSOL (CNX) initiated with a Buy at SunTrust
Citizens Financial (CFG) initiated with a Buy at Deutsche Bank
Citizens Financial (CFG) initiated with a Buy at Evercore
Citizens Financial (CFG) initiated with a Market Perform at Wells Fargo
Citizens Financial (CFG) initiated with a Neutral at Citigroup
Citizens Financial (CFG) initiated with a Neutral at Goldman
Citizens Financial (CFG) initiated with an Outperform at Keefe Bruyette
Citizens Financial (CFG) initiated with an Overweight at JPMorgan
Citizens Financial (CFG) initiated with an Overweight at Morgan Stanley
Contango Oil & Gas (MCF) initiated with an Accumulate at Global Hunter
Facebook (FB) initiated with an Overweight at Morgan Stanley
Google initiated with an Equal Weight at Morgan Stanley
HubSpot (HUBS) initiated with a Buy at UBS
HubSpot (HUBS) initiated with a Neutral at JPMorgan
HubSpot (HUBS) initiated with an Equal Weight at Morgan Stanley
HubSpot (HUBS) initiated with an Outperform at Pacific Crest
Israel Chemicals (ICL) initiated with an Overweight at Barclays
Keysight Technologies (KEYS) initiated with a Buy at Jefferies
Keysight Technologies (KEYS) initiated with a Neutral at Goldman
Nationstar (NSM) initiated with a Buy at UBS
New Residential (NRZ) initiated with a Buy at UBS
PGT, Inc. (PGTI) initiated with a Buy at KeyBanc
Smart & Final Stores (SFS) initiated with a Buy at Deutsche Bank
Smart & Final Stores (SFS) initiated with an Equal Weight at Barclays
Twitter (TWTR) initiated with an Equal Weight at Morgan Stanley
USD Partners (USDP) initiated with a Buy at Citigroup
USD Partners (USDP) initiated with an Overweight at Barclays

COMPANY NEWS

Publicis (PUBGY) said it would acquire Sapient (SAPE) for $25.00 per share, or $3.7B, in all-cash transaction
LabCorp (LH) is set to acquire Covance (CVD) for approximately $5.6B
Altice made a EUR 7.025B offer for Portugal Telecom (PT, OIBR)
Diageo (DEO) to take control of Don Julio brand from Cuervo. In return, Diageo reached an agreement to sell Bushmills to Jose Cuervo Overseas. The transaction will result in a net payment of $408M to Diageo upon completion, which is expected in early 2015 subject to certain approvals
HSBC (HSBC) said it took a $378M provision for foreign exchange investigation in Q3
Herbalife (HLF) entered into a settlement agreement regarding a class action lawsuit; the company denied any liability

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Orbotech (ORBK), Haemonetics (HAE), Sohu.com (SOHU), Changyou.com (CYOU), First Bancshares (FBMS)

Companies that missed consensus earnings expectations include:
PDI, Inc. (PDII), Loews (L), Enbridge Energy (EEP), Furmanite (FRM), Costamare (CMRE)

Companies that matched consensus earnings expectations include:
Boardwalk Pipeline (BWP), Covance (CVD)

NEWSPAPERS/WEBSITES

Apple (AAPL) may be planning bond offering, could hold investor call, WSJ reports
Argentina suspends P&G (PG) operations, accuses company of tax fraud, Reuters reports
Apple (AAPL) is reportedly planning a 12-inch "iPad Pro," Apple Insider reports
UPS (UPS), FedEx (FDX) taking steps to avoid shipping delays during holidays, NY Times says
Mining tycoon Mick Davis eyes Anglo American (AAUKY) assets, Sunday Times reports
Kimberly Clark (KMB) accused of misleading FDA over gown safety, LA Times reports
Visa (V), MasterCard (MA) could both climb 15% higher, Barron's says
Stanley Black & Decker (SWK) looks ready to rise, Barron's says
Rocket Fuel (FUEL) could be Facebook (FB) takeover target, Barron's says

SYNDICATE

American DG Energy  (ADGE)files to sell 1.88M shares for holders
Calavo Growers (CVGW) files to sell 1.397M shares for holders
Hilton (HLT) commences 90M share offering for The Blackstone Group LP
Prana (PRAN) files to sell $50M in ordinary shares, units and warrants

• Republicans expect gains, but many races close on election day (Reuters)
• Ahead of tough election, White House blames dismay with Washington (Reuters)
• On Election Day, a Tale of the Young and the Old (WSJ)
• Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
• Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
• Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
• More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
• Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
• Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)
• China Jumps Into Mexico With $4.3 Billion Rail Deal (BBG)
• Woman Sets Herself On Fire in Bulgaria (Novinite)
• Portugal Finds Chinese Make 90% of Bids at Property Sale (BBG)
• Another Deutsche Rat leaving the sinking ship? Deutsche Bank’s Amrolia Said Stepping Down (BBG)
• Xiaomi Said to Seek Funds at About $50 Billion Valuation (BBG)
• U.S. soda makers headed for tax showdown in California (Reuters)
• China Said to Plan $16.3 Billion Fund for ‘New Silk Road’ (BBG)
• Peshmerga, Syrian rebels battle Islamic State in besieged Kobani (Reuters)
• Gunmen kill five in Saudi Arabia, six suspects arrested (Reuters)

Overnight Press Digest

WSJ

* JPMorgan Chase & Co said the Justice Department is conducting a criminal investigation of its foreign-exchange-related matters and bumped up a figure measuring the bank's potential legal costs by $1.3 billion, according to a regulatory filing that the bank released Monday. (http://on.wsj.com/1GijzIS)

* South Korean auto makers Hyundai Motor Co and Kia Motors Corp agreed to pay a combined penalty of $300 million for overstating fuel-economy claims, the largest such punishment ever, in a settlement that could create a pricey precedent for other car companies. (http://on.wsj.com/1s88jFB)

* International Business Machines Corp plans to replace the head of its struggling technology-services unit, the latest move by Chief Executive Virginia Rometty to get Big Blue growing again. Martin Jetter, who has been leading IBM operations in Japan, has been named a senior vice president and will become head of IBM Global Technology Services. (http://on.wsj.com/1qmQzWn)

* Time Warner Inc's Turner Broadcasting cable-TV unit will tap a former executive of Twenty-First Century Fox Inc and NBC, Kevin Reilly to oversee two of the company's biggest channels, according to people familiar with the matter. (http://on.wsj.com/1x1G3Yr)

* Google Inc, which fell behind Amazon.com Inc in the fast-growing business of renting out computing horsepower to others, is now making a renewed effort to catch Amazon. At a conference on Tuesday, Google will highlight new offerings that make it easier for customers to set up so-called cloud services more quickly. (http://on.wsj.com/1vDi13Y)

* Federal antitrust regulators sued to stop the proposed $375 million merger of the country's two leading movie-theater advertising firms, National CineMedia Inc and Screenvision LLC, hitting pause on a major deal in the exhibition industry that many said would further consolidate power in a top-heavy marketplace. (http://on.wsj.com/1rW4m5T)

FT

A Florida court has acquitted Raoul Weil, former head of wealth management at UBS, of helping rich U.S. clients in evading as much as $20 billion in taxes. In 2009, Switzerland-based UBS paid $780 million to settle allegations of abetting tax evasion and also handed over 4,450 names of U.S. clients.

The Royal Bank of Scotland will appoint Ernst & Young as its new auditor, putting an end to a 14-year old relationship with its current auditor, Deloitte. The RBS contract will enable EY to overtake Deloitte in market share by number of FTSE 100 audits, behind PwC and KPMG.

Pop star Taylor Swift's record label Big Machine has removed the singer's entire catalogue of music from Sweden-based music streaming service Spotify, saying the star can make more money selling recordings than streaming. The removal is a big setback to the world's largest music streaming service, which is currently valued at $4 billion (2.50 billion British pounds).

Leaders of the European Union are considering a plan to allow Greece to exit its four-year-old bailout by the end of 2014, by converting about 11 billion euros ($13.74 billion) of unused funds into a backstop for Greece, when it raises funds from its own markets. (1 British pound = 1.5981 US dollar)

NYT

* Korean automakers Hyundai Corp and Kia Motors Corp, owned by the Hyundai Motor Group, will pay a combined penalty of $300 million to the U.S. government for overstating vehicle fuel-economy standards on 1.2 million cars. (http://nyti.ms/1rVD5QM)

* Chrysler Group posted an October sales increase of 22 percent on robust sales of its Jeep and Ram pickup brands due to American car buyers' increasing affinity for trucks and sport utility vehicles spurred by falling gas prices. (http://nyti.ms/1xVrYw3)

* The benchmark American oil price fell below the symbolic $80-a-barrel threshold on Monday, plummeting to two-year lows, after Saudi Arabia aimed to shore up its dwindling exports to the United States by cutting its selling price for the American market. (http://nyti.ms/1x2Om7r)

* JP Morgan Chase & Co added $2.4 billion to its estimate of the amount of legal costs it may face for current investigations into the possible manipulation of the currency market. (http://nyti.ms/1wZ0BEo)

* Two recent accidents, one of them fatal, involving commercial rockets have underscored the high risks and soaring costs involved in any spaceflight. (http://nyti.ms/1sb2Q0N)

* Virgin America Inc <IPO-VA.O>, the low-cost airline, partially owned by Richard Branson's Virgin Group, has moved a step closer to a Wall Street debut, filing a price range on Monday for its planned initial public offering. (http://nyti.ms/1yRb4jc)

* Nearly nine months after General Motors began recalling millions of its cars for a dangerously defective ignition switch, almost half of the vehicles still have not been fixed. (http://nyti.ms/13C47sb)

Canada

THE GLOBE AND MAIL

** Acknowledging "security gaps" that could leave airliners vulnerable to a terrorist attack, the federal government is moving ahead with a new system that would allow shippers to screen cargo before it gets to the airport. Transport Canada says the system will bring air cargo screening up to the standards of key trading partners and result in a net benefit to Canadians of C$202 million ($177.6 million) over 10 years. (http://bit.ly/1oeYetW)

** Voters in three ridings in Newfoundland will be casting ballots this month after two byelections were called on Monday. Elections Newfoundland and Labrador says byelections will take place on Nov. 25 in Trinity-Bay de Verde and Humber East. Those two ridings became vacant after the resignations of former cabinet ministers Charlene Johnson and Tom Marshall. (http://bit.ly/1x2ZzVq)

** Bank of Nova Scotia, Canada's third-largest lender by assets, said it would take a charge of C$451 million as it cuts about 1,500 jobs, writes down its investment in Venezuela and loans sour in the Caribbean. (http://bit.ly/1tWcgS0)

NATIONAL POST

** French President Francois Hollande told Parliament on Monday that Western nations must not show "weakness" in the face of domestic terrorism and must battle Islamic terrorists in Iraq - a message that appeared to bolster the agenda of Canada's Conservative government. (http://bit.ly/1rXtEAy)

** It's billed as a "breathtaking" display of Tibet's culture, but Canadian-Tibetans are denouncing programs about the contested region as an "insulting" and "deeply disrespectful" display of propaganda. The Canada China Tibetan Culture Week opens in Toronto on Tuesday at the TIFF Bell Lightbox with a documentary screening, followed by traditional song and dance performances by a Tibet-based troupe at the Bluma Appel Theatre. Events are also being held in Vancouver. (http://bit.ly/1x2DpUr)

** Barrick Gold Corp is in talks with state-owned Chinese miner Zijin Mining Group Co Ltd to form a partnership on the botched Pascua-Lama project, according to a government official in Argentina. (http://bit.ly/1tvXG22)

China

CHINA SECURITIES JOURNAL

- China's government departments are drafting policy to support financial institutions, particularly banks, to quicken the write-off of non-performing loans, the newspaper reported.

- The Ministry of Industry and Information Technology will formulate a five-year plan for the robotics industry to boost development of this emerging sector.

SHANGHAI SECURITIES NEWS

- Chinese banks, which halted the sales of private-equity products in 2013 due to a slump in China's stock market, restarted the sales following the recent rally, accelerating financial funds from banks enter the market.

- Non-financial institutions with real fund-raising needs are qualified to enter China's interbank bond market by conducting trade in the Beijing Financial Assets Exchange, the newspaper reported.

SHANGHAI DAILY

- Beijing is setting up more checkpoints, rural roadblocks and police stations to ensure security during the upcoming Asia-Pacific Economic Cooperation (APEC) week, according to an official with the Beijing Municipal Security Bureau.

- The Shanghai People's Procuratorate issued the first judicial guidelines for criminal cases involving Shanghai's Pilot Free Trade Zone (FTZ) recently, the newspaper reported.

CHINA DAILY

- Pro-democracy protests in Hong Kong will jeopardize the launch of the Shanghai-Hong Kong Stock Connect programme, said an official of a top think tank on Monday.

- Sony Mobile Communication Inc, a subsidiary of Sony Corp , will cut about 15 percent of its jobs in China and stop producing smartphones only targeted at the Chinese customer.

- Lei Chunian, a hero of the 2008 Wenchuan earthquake, was charged by a local court for cheating more than 460,000 yuan ($75,190) from 21 people on Monday.

Britain

The Times

* HSBC misses forecasts as it sets aside $387 mln for forex investigation

Bills for past misconduct including rigging of foreign exchange markets dashed the cost-cutting plans of HSBC Holdings Plc in the third quarter, sending underlying profits 12 per cent lower to $4.4 billion. (http://thetim.es/1x34xAH)

* UK demand helps manufacturers defy slowing eurozone

Strong domestic demand led to a rebound in UK manufacturing activity last month despite the slowing eurozone dragging down export orders. A closely-watched purchasing managers' index beat economists' expectations, rising to a three-month high of 53.2 in October from 51.5 in September. (http://thetim.es/1x2NKyz)

The Guardian

* Osborne accused of using new tax statements as 'political propaganda'

Britain's finance minister George Osborne has been criticised for sending millions of households annual tax statements that show the biggest chunk of their contribution going towards welfare, with trade unions describing it as "political propaganda masquerading as neutral information". (http://bit.ly/1tB9ba3)

* Ryanair puts 32 pct jump in profits down to being nicer

Ryanair Holdings Plc announced a 32 percent jump in first-half profits a year after its pledge to transform its customer service. Ryanair's chief executive, Michael O'Leary, said business was booming since a decision in late 2013 to change its image and stop "unnecessarily pissing people off".(http://bit.ly/1qmIXmB)

The Telegraph

* JP Morgan sets aside $6 bln for legal costs after revealing US forex probe

JPMorgan Chase & Co has raised the amount it has set aside to cover legal costs to almost $6 billion, after revealing it faces a US criminal probe over its foreign-exchange business. The US bank said on Monday night that it is cooperating with the Department of Justice as well as the Commodity Futures Trading Commission and the UK's Financial Conduct Authority. (http://bit.ly/10PCHy4)

* Struggling supermarkets face huge increase in business rates bill

Britain's under-pressure supermarkets are facing the prospect of a huge increase in business rates, adding to the challenges facing the industry. The rates bill for supermarkets could grow by as much as 40 percent on the back of a revaluation of Britain's property scheduled for next year, according to new research. (http://bit.ly/1x2NRKt)

Sky News

* Virgin Money Revives IPO after Carney Boost

Sir Richard Branson's banking arm is to revive plans to list on the stock market just days after receiving a boost from new Bank of England rules dictating the amount of capital that lenders must hold to protect them against losses. (http://bit.ly/1GgB64d)

* Emirates ends FIFA world cup sponsorship

Airline Emirates will not renew its sponsorship of the 2018 or 2022 FIFA World Cup tournaments, it has emerged. The decision comes after a slew of corruption allegations against football's world governing body, and ends an association that dates back to the 2006 tournament in Germany. (http://bit.ly/13BbWOV)

The Independent

* Diageo swaps tequila for whiskey in $1 bln deal

Diageo Plc,the owner of Guinness and Johnnie Walker whisky, has stirred up its drinks cabinet by swapping Irish whiskey for Mexican tequila in a $1 billion. The spirits giant has agreed with Mexico's Casa Cuervo to gain control of tequila brand Don Julio in return for Irish whiskey Bushmills. (http://ind.pn/1pgMIzf)

* Dunkin' Donuts unveils calorie-packed snickerdoodle and sugar cookie latte ahead of Christmas

The battle for Christmas drink sales is heating up with Dunkin' Donuts launching a snickerdoodle and sugar-cookie latte as it takes on Starbucks Corp. Dunkin' Donuts is hoping to replicate the success of last year's Christmas red velvet lattes and salted-caramel hot chocolates, which helped boost revenue 27 per cent in the fourth quarter. (http://ind.pn/1wYCPZh)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
International trade balance for September at 8:30--consensus ($40.7B)
Factory orders for September at 10:00--consensus down 0.7%

ANALYST RESEARCH

Upgrades

Anadarko (APC) upgraded to Outperform from Market Perform at Bernstein
AngloGold (AU) upgraded to Overweight from Neutral at HSBC
Cytokinetics (CYTK) upgraded to Buy from Hold at MLV & Co.
Eastman Chemical (EMN) upgraded to Buy from Neutral at SunTrust
Genesis Energy (GEL) upgraded to Outperform from Neutral at RW Baird
Kite Realty Trust (KRG) upgraded to Buy from Hold at Stifel
Leidos (LDOS) upgraded to Outperform from Market Perform at Cowen
Level 3 (LVLT) upgraded to Buy from Neutral at Citigroup
McCormick (MKC) upgraded to Outperform from Market Perform at Bernstein
Penn National (PENN) upgraded to Neutral from Underperform at BofA/Merrill
STMicroelectronics (STM) upgraded to Neutral from Underweight at HSBC
Sallie Mae (SLM) upgraded to Buy from Neutral at Goldman
Shire (SHPG) upgraded to Buy from Neutral at UBS

Downgrades

Agilent (A) downgraded to Market Perform from Outperform at Wells Fargo
Agilent (A) downgraded to Neutral from Outperform at RW Baird
ArcelorMittal (MT) downgraded to Hold from Buy at Deutsche Bank (yesterday)
Cintas (CTAS) downgraded to Sector Perform from Outperform at RBC Capital
IDACORP (IDA) downgraded to Hold from Buy at KeyBanc
LeapFrog (LF) downgraded to Neutral from Overweight at Piper Jaffray
Lumber Liquidators (LL) downgraded to Hold from Buy at Canaccord
Midcoast Energy (MEP) downgraded to Underweight from Equal Weight at Morgan Stanley
MoneyGram (MGI) downgraded to Sell from Hold at Evercore ISI
Navient (NAVI) downgraded to Neutral from Buy at Goldman
Navios Maritime Partners (NMM) downgraded to Underweight at Morgan Stanley
Nokia (NOK) downgraded to Underperform from Market Perform at Bernstein
Nokia (NOK) downgraded to Underperform from Market Perform at Bernstein
QTS Realty Trust (QTS) downgraded to Equal Weight from Overweight at Morgan Stanley
RCS Capital (RCAP) downgraded to Neutral from Buy at Citigroup
RetailMeNot (SALE) downgraded to Neutral from Buy at Goldman
Ultra Petroleum (UPL) downgraded to Underweight from Equal Weight at Barclays
Valley National (VLY) downgraded to Neutral from Buy at Guggenheim
Xcel Energy (XEL) downgraded to Hold from Buy at Evercore ISI

Initiations

Achaogen (AKAO) initiated with a Buy at SunTrust
Achaogen (AKAO) initiated with a Neutral at Wedbush
Avanir (AVNR) initiated with a Buy at Deutsche Bank
Cempra (CEMP) initiated with a Buy at SunTrust
Cubist (CBST) initiated with a Buy at SunTrust
Cubist (CBST) initiated with a Neutral at Wedbush
Datawatch (DWCH) initiated with a Buy at Drexel Hamilton
Dave & Busters (PLAY) initiated with a Buy at Jefferies
Dave & Busters (PLAY) initiated with a Buy at Stifel
Dave & Busters (PLAY) initiated with an Outperform at William Blair
Dave & Busters (PLAY) initiated with an Overweight at Piper Jaffray
Halyard Health (HYH) initiated with an Equal Weight at Morgan Stanley
ImmunoGen (IMGN) initiated with a Market Perform at Cowen
Nordstrom (JWN) initiated with a Hold at Brean Capital
PDF Solutions (PDFS) initiated with an Outperform at Northland
PennyMac Financial (PFSI) initiated with an Outperform at Keefe Bruyette
Seattle Genetics (SGEN) initiated with a Market Perform at Cowen
Smart & Final Stores (SFS) initiated with a Neutral at Citigroup
Smart & Final Stores (SFS) initiated with a Neutral at Credit Suisse
Tetraphase (TTPH) initiated with an Outperform at Wedbush
Travelport (TVPT) initiated with a Buy at Deutsche Bank
Travelport (TVPT) initiated with a Buy at Jefferies
Travelport (TVPT) initiated with a Buy at UBS
Travelport (TVPT) initiated with an Outperform at Credit Suisse
Travelport (TVPT) initiated with an Overweight at Morgan Stanley
Travelport (TVPT) re-initiated with an Outperform at Imperial Capital
Wal-Mart (WMT) initiated with a Neutral at Sterne Agee

COMPANY NEWS

JPMorgan (JPM) said DOJ conducting criminal investigation of firms FX trading, sees possibility of up to $5.9B in legal losses as of September 30
Stryker (SYK) agreed to pay $1B to settle hip lawsuits, said it has recorded charges to earnings of $1.425B related to the issue
Avon Products (AVP) downgraded by S&P to BB+, outlook stable
Sprint (S) said it will cut an additional 2,000 jobs and said it expects FY15 adjusted EBITDA to be 'neutral to modestly higher' vs. FY14
RetailMeNot (SALE) CFO Douglas Jefferies said he will step down, effective November 30
Burger King (BKW) to accept PayPal (EBAY) to pay at U.S. locations

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Achillion (ACHN), Targa Resources (TRGP), CytRx (CYTR), Northwest Natural Gas (NWN), Northern Tier (NTI), Western Refining (WNR), Headwaters (HW), Becton Dickinson (BDX), HMS Holdings (HMSY), Time Inc. (TIME), Talisman Energy (TLM), Allot Communications (ALLT), Agrium (AGU), Aqua America (WTR), Atlas Pipeline Partners (APL), EPAM Systems (EPAM), Otter Tail (OTTR), RockTenn (RKT), Tidewater (TDW), Seaspan (SSW), Skilled Healthcare (SKH), EarthLink (ELNK), Mindray Medical (MR), Albany International (AIN), Marathon Oil (MRO), Emerald Oil (EOX), Protective Life (PL), Acura Pharma (ACUR), Chesapeake Lodging (CHSP), Alleghany (Y), West Corp. (WSTC), Checkpoint Systems (CKP), Galena (GALE), Black Hills (BKH), Chegg (CHGG), Black Diamond (BDE), Fabrinet (FN), Greenlight Capital (GLRE), Vanguard Natural (VNR), Integra LifeSciences (IART), Douglas Dynamics (PLOW), Mid-Con Energy (MCEP), Nutrisystem (NTRI), Prothena (PRTA), Advanced Energy (AEIS), Ruckus Wireless (RKUS), Corrections Corp. (CXW), Lannett (LCI), RetailMeNot (SALE), Rudolph Technologies (RTEC), Alder Biopharmaceuticals (ALDR), RealD (RLD), Qualys (QLYS), Continental Building (CBPX), Sykes Enterprises (SYKE), Navigator Holdings (NVGS), Nautilus (NLS), AIG (AIG), Interactive Intelligence (inin), Frontier Communications (FTR), DXP Enterprises (DXPE), Sykes Enterprises (SYKE)

Companies that missed consensus earnings expectations include:

Sprint (S), Tesco (TESO), Tesco (TESO), Triple-S (GTS), Regeneron (REGN), United Fire & Casualty (UFCS), Santander Consumer (SC), Westlake Chemical Partners (WLKP), Hi-Crush Partners (HCLP), State Auto Financial (STFC), Vitamin Shoppe (VSI), Western Refining Logistics (WNRL), DISH (DISH), Regis (RGS), CyrusOne (CONE), Quotient (QTNT), Northwest Pipe (NWPX), TPG Specialty Lending (TSLX), RLJ Lodging Trust (RLJ), Nortek (NTK), Rosetta Resources (ROSE), MDU Resources (MDU), Allied Nevada Gold (ANV), Sun Hydraulics (SNHY), Herbalife (HLF), Apollo Residential Mortgage (AMTG), Community Health (CYH), Endurance Specialty (ENH), Correction: Black Diamond (BDE), U.S. Auto Parts (PRTS), xG Technology (XGTI), Borderfree (BRDR), Macrocure (MCUR), Procera Networks (PKT), LeapFrog (LF), Imprivata (IMPR), Texas Roadhouse (TXRH), Kaman (KAMN), Cutera (CUTR), eGain (EGAN), Superior Industries (SUP), Stone Energy (SGY), PetroQuest (PQ)

Companies that matched consensus earnings expectations include:
Regal-Beloit (RBC), ONE Gas (OGS), Tenet (THC), Neurocrine (NBIX)

NEWSPAPERS/WEBSITES

Apple (AAPL) may stop making iPad mini as 12-inch iPad is introduced, Phone Arena says
Many GM (GM) faulty ignition switches still not repaired, NY Times reports
Sony (SNE) to stay active in Chinese smartphone market, China Daily reports
Blackstone (BX) allegedly close to $8B agreement for IndCor division, Bloomberg  reports
Good chance Petrobras (PBR) CEO remains at the helm during Rousseff's term, WSJ reports
NHTSA investigates Honda (HMC) communication of faulty Takata airbags, Reuters reports
BlackRock (BLK) looks like a 'buy', Barron's says

SYNDICATE

Aerie Pharmaceuticals (AERI) files to sell 8.75M shares for holders
Apple (AAPL) to offer bonds in euros via Goldman, Deutsche Bank
DCT Industrial (DCT) files to sell 13.5M shares of common stock
Healthcare Trust (HTA) files to sell 8M shares of common stock
Hilton (HLT) 90M share Secondary priced at $25.00
Intercloud Systems (ICLD) files to sell 2.4M shares for selling stockholders
Newtek Business Services (NEWT) files to sell 2M shares of common stock
NorthWestern (NWE) files to sell $348M of common stock
Platform Specialty Products (PAH) fies to sell $402.5M shares of common stock
StoneCastle (BANX) plans to offer 1.6M shares of common stock
Umpqua Holdings (UMPQ) files to sell 31.2M shares for stockholders

• The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare (Matt Taibbi)
• Explains the midterm results: Optimism precedes job data (Reuters)
• EU Dream Ebbs Amid Weak Growth, Putin's Jets, 25 Years After Wall Came Down (BBG)
• SEC Probing Trading Activity at Apple Supplier GT Advanced (WSJ)
• Boehner touts bills to repeal Obamacare, build Keystone (Reuters)
• China Gold Buying Means Price Floor to Standard Chartered (BBG)
• High-Speed Ad Traders Profit by Arbitraging Your Eyeballs (BBG)
• Central Banks Can’t Be ‘Only Game in Town’ Boosting Economies (BBG) - less talking, more getting to work
• Britain Digs In Against EU Bill as Cameron Plays to Base (BBG) - UKIP's base?
• Paul Ryan could make a compelling run for the White House. So why is he talking about going home? (Politico)
• Nigeria Central Bank Intervenes to Defend Currency (BBG)
• Who shot bin Laden? Former Navy SEALS make rival claims (Reuters)
• Singapore Returns Up to $9 Billion to Banks in Rate Probe (BBG)
• The Ukraine who cried wolf: Tank column crosses from Russia into Ukraine: Kiev military (Reuters)... and nobody believes it

Overnight Media Digest

WSJ

* U.S. President Barack Obama secretly wrote to Iran's Ayatollah Ali Khamenei in October and described a shared interest in fighting Islamic State militants in Iraq and Syria. The letter aimed at strengthening the campaign against Islamic State and nudging Iran's religious leader closer to a nuclear deal. (http://on.wsj.com/1sjSWKk)

* A year after its IPO, Twitter Inc CEO Dick Costolo has confounded investors with mixed messages and a series of executive changes. The CEO remains popular with employees, but some big investors are frustrated. (http://on.wsj.com/110g5uC)

* Home Depot Inc said hackers got into its systems last April by stealing a password from a vendor. Home Depot, which said 56 million credit card accounts were compromised by hackers, now says 53 million email addresses were stolen as well. (http://on.wsj.com/1xlcUrq)

* The Securities and Exchange Commission delivered a win to the $2 trillion exchange-traded-fund industry Thursday night, approving a new type of fund structure that does not have to disclose its holdings. The SEC said Boston-based Eaton Vance Corp can launch a so-called nontransparent ETF that will trade on an exchange but doesn't have to disclose its holdings and doesn't follow an index like a typical fund. (http://on.wsj.com/1tGr0TJ)

* House Speaker John Boehner warns President Barack Obama that unilateral action on immigration would "poison the well" for any cooperation with the new republican party. House Speaker and President held a year of confidential talks on immigration that ended in failure this summer. (http://on.wsj.com/13P9VP9)

* PepsiCo Inc President Zein Abdalla, widely viewed as a potential successor to Chairman and Chief Executive Indra Nooyi, is leaving the snack and beverage giant on Dec. 31. Hugh Johnston, PepsiCo's finance chief is now viewed as a potential internal candidate to succeed Nooyi. (http://on.wsj.com/1xeQyto)

* Bank of America Corp is in advanced talks with U.S. regulators to settle an investigation into whether the bank manipulated foreign-exchange rates. The bank said to lower its previously announced third-quarter results to a loss of four cents a share, from a per-share loss of one penny as it plans to set aside an extra $400 million for legal expenses. (http://on.wsj.com/1ybDtiT)

* The Securities and Exchange Commission is looking into trading activity in GT Advanced Technologies Inc's securities and is seeking information about its sapphire business. GT Advanced filed for bankruptcy protection on Oct.6 after Apple Inc unveiled its latest iPhone models with glass screens, rather than GT Advanced's sapphire. (http://on.wsj.com/1skp68x)

* Petroleo Brasileiro SA said it would raise gasoline prices by 3 percent and diesel prices by 5 percent in Brazil starting midnight Friday, following months of agitation from investors for such a move. The fuel price increase signals that the government of President Dilma Rousseff may ease government controls on the company. (http://on.wsj.com/1vRNE9V)

* Fannie Mae and Freddie Mac reported sharply lower profits but still earned enough for a combined $6.8 billion payment to the U.S. Treasury. The companies currently must pay nearly all of their profits to the U.S. Treasury. The weaker results stemmed mainly from slower home-price appreciation. (http://on.wsj.com/110ERuM)

* Walgreen Co raised $8 billion on Thursday to fund its purchase of international pharmacy chain Alliance Boots GmbH. The deal is tied as this year's fifth-largest corporate debt sale. Walgreen already owned a 45 percent stake in Alliance Boots, acquired in 2012. (http://on.wsj.com/1tjh4vE)

* Walt Disney Co Chief Executive Robert Iger said Disney is "well-positioned" if the market demands a move to a la carte cable programming. But he said too quick a shift could imperil the industry's business model. (http://on.wsj.com/1qsIEH7)

* Hundreds of car owners suing General Motors Co for alleged economic losses, personal injury or deaths connected to a defective ignition switch will have their arguments heard in a New York court. Jesse Furman, U.S. district judge set a trial date for the case on January 2016. (http://on.wsj.com/1xbiz4c)

* Microsoft Corp aims to maximize users over dollars with its Office franchise that lets mobile users access most Office 365 functions for free. Microsoft is not dropping the fee for Office 365 on laptops or desktops, and it still requires a paid subscription for access to some features in mobile versions. (http://on.wsj.com/1pqMrKf)

FT

Space tourism company Virgin Galactic had too few safeguards in place to prevent a disaster, Tommaso Sgobba, a former head of flight safety for the European Space Agency, told the Financial Times. Sgobba said industry standards call for operators to build the craft for two separate, unrelated failures.

Russian President Vladimir Putin has raised fresh security tensions after defending the Molotov-Ribbentrop pact that Soviet Russia signed with the Nazi Germany, under which the two countries secretly annexed Poland and other regions between them.

Turkish President Recep Tayyip Erdogan has defended his newly-inaugurated palace, which cost about $608 million to build, saying its remote location will would mean less congestion and traffic on the streets of Ankara. The presidential palace, which has more than 1,000 rooms, was built on protected forest land and is bigger than the White House and Elysee.

French President Francois Hollande admitted in a television interview that he had made mistakes in his two-and-a-half-year old term. However, he promised to carry out reforms and that by 2017 things will return back to normal. The Socialist leader also spoke about the 40 billion euro (49.52 billion U.S. dollar) tax break he plans to provide to the private sector between 2014 and 2017.

NYT

* American brands doing business in Russia have become political targets ever since the European Union and United States announced a set of sanctions against Russia for supporting pro-Russian separatists striving to carve out independent states in eastern Ukraine. (http://nyti.ms/1tjB8OC)

* Jean-Claude Juncker, head of the European Union's executive arm and former longtime leader of Luxembourg, faces rising furore by a flood of leaked documents detailing his home country's role as a haven for hundreds of companies seeking to drastically reduce their tax bills. (http://nyti.ms/1sc4NsE)

* The competition regulator in Britain said on Thursday that it planned to begin an inquiry into the dominant position of the country's largest lenders in retail banking and in lending to small and midsize businesses. (http://nyti.ms/1tjyYyD)

* Bank of America Corp is nearing a deal with federal regulators to settle an investigation into the bank's suspected manipulation of the currency market. (http://nyti.ms/1uCJNCi)

* Home Depot Inc said hackers that broke into the company's computer network this year took 53 million customer email addresses in addition to the payment card details of millions of customers. (http://nyti.ms/1zzhwyw)

* Takata Corp found a decade ago that its airbags could crack and explode. Instead of alerting regulators, it tried to erase evidence, say ex-employees who were involved in secret tests. (http://nyti.ms/1uEc7UW)

* A trial related to safety defects in General Motors Co cars, including an ignition switch flaw linked to more than 30 deaths and the recall of millions of vehicles, has been scheduled for early 2016. (http://nyti.ms/1xmhQw7)

* Investment firm Advent International Corp said it has completed raising a new $2.1 billion private equity fund for Latin America, thought to be the largest ever for this region, in a sign of increasing investor confidence. (http://nyti.ms/10C6vxs)

* Cable & Wireless Communications Plc said it will buy the private cable company Columbus International Inc for $3 billion, including debt. (http://nyti.ms/1xbaTyS)

* Cott Corp, the Canadian soft-drink maker, agreed to acquire DSS Group, the parent company of DS Services of America Inc, a United States direct-to-consumer provider of bottled water, office coffee and water filtration services, for $1.25 billion. (http://nyti.ms/1u50Awn)

* Irish drug maker Perrigo Company Plc said it has agreed to acquire Omega Pharma NV, one of the largest providers of over-the-counter health care products in Europe, for about $4.5 billion, including the assumption of debt. (http://nyti.ms/13PlCFs)

Canada

THE GLOBE AND MAIL

** The Organization for Economic Co-operation and Development has trimmed its outlook for the Canadian economy, as it sees the global economic recovery evolving more slowly than it had previously expected. (http://bit.ly/1pv6irE)

** Canadian Prime Minister Stephen Harper shared a stage with Chinese e-commerce billionaire Jack Ma on Friday during Day 1 of his trade trip to China, where the founder of online sensation Alibaba Group Holding Ltd boasted he wants to sell 200,000 Canadian lobsters on his website in a single day. (http://bit.ly/1sdLC1S)

NATIONAL POST

** Air Canada reported a small pension surplus at the beginning of 2014, a dramatic turnaround from the C$3.7 billion ($3.24 billion) deficit a year earlier. And that surplus has continued to grow throughout the year despite lower interest rates, said Chief Financial Officer Michael Rousseau. (http://bit.ly/1xfez3D)

China

CHINA SECURITIES JOURNAL

- China's President Xi Jinping said the country should promote the building of rail and shipping links between Asia and Europe, establish Asian investment banks for infrastructure and funds to finance construction.

- China is mulling reduction of taxes on the marine industry, said Wang Mingzhi, deputy director of China's Ministry of Transportation.

SHANGHAI SECURITIES NEWS

- China plans to introduce new regulatory standards governing property insurance, life insurance and reinsurance by the end of this year, the China Insurance Regulatory Commission said in a statement posted on its website on Thursday.

CHINA DAILY

- The decision by China's cabinet to reduce bureaucracy will prevent corruption and promote investment, said an editorial in the state-owned paper. The risk is that local governments and officials may compromise policy goals, it said.

- The French government will assist China's hunt for corrupt officials by confiscating their illegal assets located in France, said a senior official from the French Ministry of Justice.

PEOPLE'S DAILY
- China's central government has allocated 2 billion yuan ($327.24 million) to protect the country's grasslands, the Ministry of Finance told the newspaper.

Britain

The Times

* Qatari wealth fund bids for control of Canary Wharf

The Qatari sovereign wealth fund has made an approach to take control of the Canary Wharf estate, which is owned by Songbird Estates, in a deal that would strengthen the energy-rich country's control over the London skyline. (http://thetim.es/1tivM67)

* UK banks face threat of break-up as competition investigation is launched

The Competition & Markets Authority said it will begin a large-scale market investigation into current accounts and small business lending which could ultimately lead to the break-up of Britain's biggest banks. (http://thetim.es/1wAGH17)

The Guardian

* Luxembourg and Juncker under pressure over tax deals

French, German and Dutch finance ministers have rounded on Luxembourg for allowing multinational companies to create complicated structures to avoid billions of dollars of tax. Pressure is also mounting on Jean-Claude Juncker, the new president of the European commission and former long-serving prime minister of Luxembourg, who oversaw the introduction of the laws. (http://bit.ly/1opzX4v)

* ECB could pump 1 trillion euros into eurozone in fresh round of quantitative easing

The European Central Bank is ready to pump up to 1 trillion euros ($1.24 trillion) of fresh stimulus into the flagging eurozone economy to ward off a dangerous deflationary spiral, ECB president, Mario Draghi has signalled. (http://bit.ly/1xlDIrv)

The Telegraph

* Vladimir Putin: Oil price decline has been engineered by political forces

As slumping oil prices dampen Russia's economic outlook, the country's President Vladimir Putin has said that "at some moments of crisis it starts to feel like it is the politics that prevails in the pricing of energy resources." (http://bit.ly/10uDKlZ)

* Mike Ashley's Sports Direct raises stake in Debenhams

Sports Direct International has increased its exposure to department store chain Debenhams Plc yet further. Sports Direct now has a 12.7 percent interest in the rival retailer, up from 11.22 percent. (http://bit.ly/1skNtmn)

Sky News

* Petrol price cuts demanded by Treasury

A failure by petrol firms and supermarkets to pass on the full benefit of falling oil prices to customers filling up at the pumps would be an "outrage," a Cabinet Minister has warned. Treasury Chief Secretary Danny Alexander has demanded guarantees from fuel companies and distributors that they were doing all they could to pass on the price cuts to hard-pressed motorists. (http://bit.ly/1vR06qo)

* Banks' fury over FCA foreign exchange fines

Some of the world's biggest banks are resisting details of plans being drawn up by the City regulator to fine them for failings in their foreign currency operations. A number of the six banks in talks with the Financial Conduct Authority about a settlement are angry that the spread between the biggest and smallest penalties is in the low tens of millions of pounds. (http://bit.ly/1tg9HW1)

The Independent

* Mario Draghi addresses ECB dissent speculation: "It's normal to disagree"

European Central Bank president Mario Draghi shut down speculation of dissent among the bank's governing council. "It is fairly normal to disagree about things," Draghi said at the ECB monthly meeting, noting that the governing council had "unanimously" agreed to take on "additional unconventional instruments" to revive the euro zone and ward off deflation. (http://ind.pn/1xaLWnk)

* Morrisons warns turnaround won't happen overnight as sales continue to fall

Supermarket chain Morrisons has warned it will take some time for its turnaround plan to bear fruit as it revealed another big drop in sales as it grapples with an "intense" period of competition in the sector. (http://ind.pn/1xeiAW3)

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Nonfarm payrolls for October at 8:30--consensus up 235K
Unemployment rate for October at 8:30--consensus 5.9%
Federal Reserve’s report on consumer credit for September-- consensus up $16B

ANALYST RESEARCH

Upgrades

CA Technologies (CA) upgraded to Hold from Sell at Evercore ISI
Cavium (CAVM) upgraded to Strong Buy from Outperform at Raymond James
Charter (CHTR) upgraded to Outperform from Market Perform at Raymond James
Delhaize (DEG) upgraded to Neutral from Underperform at BofA/Merrill
Envestnet (ENV) upgraded to Strong Buy from Outperform at Raymond James
GNC Holdings (GNC) upgraded to Buy from Neutral at Goldman
Kinross Gold (KGC) upgraded to Buy from Neutral at UBS
Nationstar (NSM) upgraded to Market Perform from Underperform at Wells Fargo
PetSmart (PETM) upgraded to Hold from Sell at Deutsche Bank
Plains GP Holdings (PAGP) upgraded to Outperform from Neutral at Credit Suisse
Splunk (SPLK) upgraded to Buy from Hold at Evercore ISI
Sunoco Logistics (SXL) upgraded to Buy from Hold at Stifel
Sunoco Logistics (SXL) upgraded to Buy from Neutral at UBS
Walker & Dunlop (WD) upgraded to Outperform from Market Perform at Wells Fargo
XO Group (XOXO) upgraded to Buy from Neutral at B. Riley
Zynga (ZNGA) upgraded to Buy from Hold at Needham

Downgrades

AbbVie (ABBV) downgraded to Market Perform from Outperform at BMO Capital
Allscripts (MDRX) downgraded to Hold from Buy at Evercore ISI
BB&T (BBT) downgraded to Neutral from Buy at Citigroup
Barrick Gold (ABX) downgraded to Buy from Conviction Buy at Goldman
Boulder Brands (BDBD) downgraded to Neutral from Buy at Longbow
Bruker (BRKR) downgraded to Neutral from Buy at Cantor
Bruker (BRKR) downgraded to Neutral from Buy at Citigroup
Chesapeake Granite (CHKR) downgraded to Underperform at Raymond James
Edwards Lifesciences (EW) downgraded to Neutral from Buy at Sterne Agee
Financial Engines (FNGN) downgraded to Hold from Buy at Needham
HCI Group (HCI) downgraded to Market Perform from Outperform at JMP Securities
J.B. Hunt (JBHT) downgraded to Market Perform from Outperform at Raymond James
Luminex (LMNX) downgraded to Market Perform from Outperform at Leerink
Performant Financial (PFMT) downgraded to Underperform from Neutral at Credit Suisse
Prestige Brands (PBH) downgraded to Underperform from Hold at Jefferies
Roka Bioscience (ROKA) downgraded to Neutral from Buy at BofA/Merrill
Salix (SLXP) downgraded to Hold from Buy at Stifel
Salix (SLXP) downgraded to Neutral from Buy at Mizuho
The Advisory Board (ABCO) downgraded to Hold from Buy at Stifel
Vitamin Shoppe (VSI) downgraded to Neutral from Buy at Goldman

Initiations

Chico's FAS (CHS) initiated with a Buy at Brean Capital
Christopher & Banks (CBK) initiated with a Buy at Brean Capital
Destination XL (DXLG) initiated with a Buy at Brean Capital
Evoke Pharma (EVOK) initiated with a Buy at MLV & Co.
Finish Line (FINL) initiated with a Market Perform at FBR Capital
Foot Locker (FL) initiated with a Market Perform at FBR Capital
The Buckle (BKE) initiated with a Hold at Brean Capital
Tilly's (TLYS) initiated with a Hold at Brean Capital
Urban Outfitters (URBN) initiated with a Buy at Brean Capital
Zumiez (ZUMZ) initiated with a Buy at Brean Capital

COMPANY NEWS

Home Depot (HD) found that 53M email addresses were taken during data breach, but no passwords, payment card information or other sensitive personal information
Bank of America (BAC) revised its Q3 EPS to (4c), said it has been engaged in separate advanced discussions with certain U.S. banking regulatory agencies to resolve matters related to its foreign exchange business
PepsiCo (PEP) President Zein Abdalla to retire, effective December 31
Joy Global (JOY) announced that it has received a subpoena seeking information concerning the company’s acquisition of International Mining Machinery Holdings Ltd. in 2012 and related accounting matters
Zynga (ZNGA) reported Q3 Monthly Unique Users 77M vs. 97M a year ago; reported Q3 Daily Active Users 26M vs. 30M a year ago

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Disney (DIS), Alliant Energy (LNT), Consolidated Edison (ED), National Fuel (NFG), Multi-Fineline (MFLX), Lumos Networks (LMOS), TransAtlantic Petroleum (TAT), SemGroup (SEMG), Sapient (SAPE), Nektar (NKTR), Franklin Covey (FC), Fidus Investment (FDUS), Hawaiian Electric (HE), Zogenix (ZGNX), SurModics (SRDX), Universal Display (OLED), Vectren (VVC), Redwood Trust (RWT), Net 1 UEPS (UEPS), Kemper (KMPR), Paylocity (PCTY), Five9 (FIVN), Assured Guaranty (AGO), CSC (CSC), Mitek Systems (MITK), Shutterstock (SSTK), Main Street (MAIN), Fair Isaac (FICO), Cvent (CVT), HCI Group (HCI), Fuel Tech (FTEK), Millennial Media (MM), Skyworks (SWKS), Spectrum (SPPI), The Advisory Board (ABCO), WageWorks (WAGE), Universal Electronics (UEIC), Emergent BioSolutions (EBS), YuMe (YUME), Rentrak (RENT), FXCM (FXCM), Salem Communications (SALM), Medivation (MDVN), Theravance Biopharma (TBPH), Amber Road (AMBR), Erickson (EAC), Echelon (ELON), Sprouts Farmers Markets (SFM), International Game (IGT), ICF International (ICFI), MRC Global (MRC), Volcano (VOLC), PROS (PRO), Rovi (ROVI), Arista Networks (ANET), Air Methods (AIRM), XO Group (XOXO), Novatel Wireless (MIFI), Navigators (NAVG), Encore Capital (ECPG), Air Lease (AL), CareFusion (CFN), NVIDIA (NVDA), Power Solutions (PSIX), Kodiak Oil & Gas (KOG), Matson (MATX), Envestnet (ENV), Diodes (DIOD), NMI Holdings (NMIH), Mettler-Toledo (MTD), Opexa Therapeutics (OPXA), Opexa Therapeutics (OPXA), ChannelAdvisor (ECOM), Hyperion Therapeutics (HPTX), Oncothyreon (ONTY), LifeVantage (LFVN), Uni-Pixel (UNXL), Infinity Pharmaceuticals (INFI), Spark Networks (LOV), Monster Beverage (MNST), King Digital (KING), Rubicon (RBCN), Lionsgate (LGF), American Equity (AEL), bebe stores (BEBE), FBL Financial (FFG), NIC Inc. (EGOV)

Companies that missed consensus earnings expectations include:

LSB Industries (LXU), Humana (HUM), The New Home Company (NWHM), Humana (HUM), BPZ Resources (BPZ), Bonanza Creek (BCEI), Northeast Utilities (NU), ACETO (ACET), Atlantic Power (AT), Darling (DAR), Golden Minerals (AUMN), Great Plains Energy (GXP), Hansen Medical (HNSN), Rose Rock Midstream (RRMS), Bristow Group (BRS), Farmer Bros. (FARM), Capstone Turbine (CPST), Summit Midstream (SMLP), Third Point Reinsurance (TPRE), Bravo Brio Restaurant (BBRG), Rentech (RTK), Rentech Nitrogen (RNF), Global Eagle (ENT), Fairway Group (FWM), EZCORP (EZPW), Versartis (VSAR), Trovagene (TROV), EnerNOC (ENOC), Alpha & Omega (AOSL), Cytori Therapeutics (CYTX), RadiSys (RSYS), Mad Catz Interactive (MCZ), TherapeuticsMD (TXMD), Performant Financial (PFMT), Nuverra reports Q3 EPS ($5.44), Bankrate (RATE), Saint Joe Co. (JOE), Q2 Holdings (QTWO), Rexnord (RXN), Summer Infant (SUMR), PharmAthene (PIP), Quantum (QTWW), Stifel Financial (SF), Planet Payment (PLPM), Guidance Software (GUID), BioAmber (BIOA), Financial Engines (FNGN), Roka Bioscience (ROKA), Manitex (MNTX), Tremor Video (TRMR), Salix (SLXP), DexCom (DXCM), Boingo Wireless (WIFI), Clovis (CLVS), Allscripts (MDRX), Bruker (BRKR), Anacor (ANAC), Amicus Therapeutics (FOLD), Kratos Defense (KTOS), I.D. Systems (IDSY), Ubiquiti Networks (UBNT), Transact Technologies (TACT), Amarin (AMRN)

Companies that matched consensus earnings expectations include:

Zynga (ZNGA), TheStreet (TST), Denison Mines (DNN), Primo Water (PRMW), Gastar Exploration (GST), Varonis (VRNS), Entravision (EVC), Microsemi (MSCC), ARC Document (ARC), Northern Oil and Gas (NOG), XOMA (XOMA), El Pollo Loco (LOCO), DaVita (DVA), Tumi (TUMI), TCP International (TCPI), American Public Education (APEI), J & J Snack Foods (JJSF)

NEWSPAPERS/WEBSITES

KKR (KKR), Apollo (APO) asked to submit second-round bids for PetSmart (PETM), WSJ reports
Symantec (SYMC) to cut 2,000 jobs as it splits business, Mercury News reports
Twitter (TWTR) to open Hong Kong office early next year, WSJ reports
Samsung (SSNLF) said to be planning new series of smartphones, SamMobile reports
Ackman says Canadian Pacific (CP) may consider merger with CSX (CSX) rival, Bloomberg reports (NSC)
Federal appeals court panel still holds BP (BP) responsible for Gulf spill, AP says

SYNDICATE

Advent Software (ADVS) 3.8M share Block Trade; price range $34.00-$34.10
Builders FirstSource (BLDR) files to sell 49.2M shares for holders
CTI BioPharma (CTIC) files convertible preferred stock offering
Freshpet (FRPT) 10.417M share IPO priced at $15.00
INC Research (INCR) 8.108M share IPO priced at $18.50
ORBCOMM (ORBC) files to sell $72M in common stock
Triumph Bancorp (TBK) 6.7M share IPO priced at $12.00
Western Digital (WDC) 5.435M share Secondary priced at $96.00

• Yellen Inherits Greenspan’s Conundrum as Long Rates Sink (BBG)
• West African Mining Projects Take Hit From Ebola Crisis (WSJ)
• Saudi oil policy uncertainty unleashes the conspiracy theorists (Reuters)
• Senate Rejection of Keystone XL Measure Sets Up 2015 Showdown (BBG)
• Ferguson, Missouri, remains on edge ahead of grand jury report (Reuters)
• Putin Said to Stun Advisers by Backing Corruption Crackdown (BBG)
• Italian ‘Invasion’ Has Swiss Fuming as Immigration Vote Looms (BBG)
• Apple and Others Encrypt Phones, Fueling Government Standoff (WSJ)
• Ukraine rules out direct talks with separatists (Reuters)
• Nielsen to Measure Netflix Viewing (WSJ)
• French-government owned Areva Drops Most Since 1999 After Financial Targets Scrapped (BBG)
• U.S. auto regulator seeks nationwide recall of Takata air bags (Reuters)
• American Roads Can’t Match French Highways Paved by Tolls (BBG)
• Dollar General may have to shut more than 4,000 stores (Reuters)
• Why Japan’s 8% Tax Mauled Economy as Europe Tolerates 20% (BBG)
• Great White Shark Pulled From Nets at Bondi Beach in Australia (BBG)

Overnight Media Digest

WSJ

* The Senate narrowly defeated legislation that would have approved the Keystone XL pipeline, delivering a political setback to Senator Mary Landrieu, who had pushed for the vote as a way to show political clout in her Senate runoff race against Republican challenger Representative Bill Cassidy. (http://on.wsj.com/1yQQX3U)

* U.S. auto-safety regulator National Highway Traffic Safety Administration demanded auto makers issue a nationwide recall of air bags made by Takata Corp after receiving a report of an air bag injury in North Carolina. (http://on.wsj.com/1t3cz9P)

* Two Palestinians attacked a synagogue in Jerusalem, killing three American-Israeli rabbis, a British-Israeli rabbi and a policeman and shifting the focus of violence to deep within the heart of the Jewish half of the city. (http://on.wsj.com/1AfI4oL)

* Next month Nielsen will begin measuring viewership of TV shows on subscription online video services, such as Netflix Inc and Amazon.Com Inc's Prime Instant Video.(http://on.wsj.com/1vnBudS)

* Ohio Precious Metals LLC in remote Jackson, Ohio, has become an outpost in the multibillion-dollar global gold trade, melting scrap gold and shipping it world-wide. (http://on.wsj.com/11AOb8Y)

* The Justice Department complains that new encryption technology by Apple Inc, Google Inc and others makes it harder for police to gather evidence. (http://on.wsj.com/1vo07rG)

* Goldman Sachs Group Inc has cemented its position as the top Wall Street bank for mergers and acquisitions in one of the busiest years in the business after planned takeover deals this week by Actavis Plc and Halliburton Co . (http://on.wsj.com/1ylqU54)

* The Ebola epidemic in West Africa has led mining companies in the region to put expansion plans on hold. The Ebola epidemic has scared off ships and planes, prompted expatriates to abandon their posts and delayed the rollout of thousands of jobs meant for residents of the West African countries hardest hit by the virus. (http://on.wsj.com/1xNWVmW)

* French prosecutors have launched a preliminary insider-trading probe targeting several senior managers at BNP Paribas SA, seeking to know how much the managers knew about U.S. litigation risks when selling shares. (http://on.wsj.com/1u8Scr6)

* Canada is debating tighter border security for stock trades. The country's regulators are probing dealers' practice of routing stock orders to United States trading venues in exchange for rebates, circumventing domestic markets. (http://on.wsj.com/1usUDIw)

* General Mills Inc agreed to keep the phrase "100 percent Natural" off a brand of granola bars and related products as part of a legal settlement, the food industry's latest concession in the battle over how to define natural foods. (http://on.wsj.com/1t3vuRP)

* Toyota Motor Corp unveiled a $57,000 fuel-cell car and plans for a United States network of hydrogen refueling stations with a message of exclusivity: Don't expect to see too many of these vehicles soon. (http://on.wsj.com/1wUxrkR)

* Institutional Shareholder Services is recommending shareholders vote against the pay package for Microsoft Corp's CEO Satya Nadella in a nonbinding vote at the software company's annual meeting. (http://on.wsj.com/1u8Y4AD)

* AT&T Inc said federal investigators might need a warrant to gather data about cellphone users' locations, challenging the more permissive legal framework the government has used for years. (http://on.wsj.com/1uGcL3c)

* The Samsung conglomerate's shipbuilding and engineering units said Wednesday they have scrapped a plan to merge after facing a hefty bill to buy back shares from shareholders opposed to the deal. Samsung Heavy Industries Co, the world's second-largest shipbuilder by revenue, said in September it would absorb Samsung Engineering Co. (http://on.wsj.com/1xmEgzv)

* United Parcel Service Inc and FedEx Corp are gearing up for a new test of their ability to handle the surge in holiday e-commerce: The frenzy of online shopping that now comes at the beginning of Thanksgiving weekend, instead of afterward. (http://on.wsj.com/1yRcMAg)

* Irving Azoff is trying to pull his clients' songs from Google Inc's YouTube. A lawyer for Azoff's company, Global Music Rights sent two letters to YouTube demanding the company to immediately stop playing about 20,000 of the group's songs, saying that the online video service had not sought a license from the organization, Azoff said. (http://on.wsj.com/1EYslZd)

* BHP Billiton Ltd is making a bold bet on China's rising middle class, starting in sand dunes of southern Australia. Beneath the ground at Olympic Dam lies one of the biggest copper deposits in the world-central to a new investment strategy for the resources company. (http://on.wsj.com/1u90u2e)

* Darden Restaurants Inc said its chief financial officer will retire, and it unveiled a cost-savings plan that includes eliminating a management layer at its Olive Garden and LongHorn Steakhouse chains. The company said the moves are expected to save the company $20 million a year. (http://on.wsj.com/14J12qI)

FT

Labour's Rachel Reeves announced jobless migrants who are from the European Union would have to wait for two years before they could claim out-of-work benefits as part of significant hardening of Labour's position on immigration.

Britain's government owns enough land to build as many as 2 million homes that is equal to a decade's supply, a study by estate agent Savills has found.

Ministers at the Department for Communities and Local Government could be caught unaware by serious financial problems at local councils because of inadequate monitoring, the National Audit Office warned.

Britain's supermarkets have suffered their first fall in revenues in at least 20 years hurt by lower food prices and a vicious price war that has cut the amount customers spend on groceries, according to a report by market researcher Kantar Worldpanel.

NYT

* In a significant shift, federal safety regulators on Tuesday called on automakers to conduct a nationwide recall of vehicles that contain driver's-side airbags made by the Japanese supplier Takata Corp. The nationwide move, urged by the National Highway Traffic Safety Administration, would expand a recall that has been mostly limited to two states and two territories associated with high humidity. (http://nyti.ms/1EYwbBy)

* New York State's chief banking regulator on Tuesday announced a $315 million settlement with the Bank of Tokyo-Mitsubishi UFJ, accusing the bank of "misleading regulators" about its business with Iran and other countries blacklisted by the United States. (http://nyti.ms/1xmMDuW)

* Goldman Sachs Group Inc has dismissed a currency trader because of his ties to an inquiry into potential manipulation of benchmark currency rates, a person briefed on the matter said on Tuesday. (http://nyti.ms/1xU0F7l)

* Three months after formally putting itself up for sale, PetSmart Inc appears to have drawn takeover interest from at least two private equity firms. KKR & Co LP and Clayton, Dubilier & Rice, two prominent private equity shops, are preparing a joint bid for the retailer by early next month, a person briefed on the matter said on Tuesday. (http://nyti.ms/1t3BTwt)

* Phone scams involving reloadable prepaid debit card products like the popular MoneyPak card will be the subject of a Senate committee hearing on Wednesday. Executives from three prepaid card companies are expected to testify before the Senate Special Committee on Aging, along with a representative for a trade association that represents retail chains that sell the cards. (http://nyti.ms/1p0PEQ0)

Canada

THE GLOBE AND MAIL

** Prime Minister Stephen Harper's Conservative Party have retained a pair of seats in by-elections on Monday evening, despite a surge by the Liberal Party in the riding formerly held by Jim Flaherty, Canada's finance minister. (http://bit.ly/1qjrt08)

** The chair of Canada's largest school board is calling on Ontario Premier Kathleen Wynne's government to intervene with the board's highest ranking staffer, alleging that director of education Donna Quan has blocked trustees from probing controversial payments and partnerships. (http://bit.ly/14DBsDG)

** The Competition Bureau is investigating Loblaw Cos Ltd pricing strategies in a probe that is demanding that some of the chain's key suppliers hand over secret records about their dealings with the grocery giant. (http://bit.ly/1xiBzz2)

NATIONAL POST

** Calvin Nicol, a 31-year-old piercer and tattoo artist was walking home from work along Rideau Street at about 7 p.m. on Nov. 1 when he was attacked by at least four males who Nicol believes singled him out because of his unique look. (http://bit.ly/1yhDodR)

** After release from a U.S. prison, Canada's embattled Mafia boss Vito Rizzuto summoned top henchmen to secret meetings in Cuba and the Dominican Republic to plot revenge on rivals, a court in Italy has heard. (http://bit.ly/14DLNPR)

** Activist investor Sandell Asset Management Corp is urging pipeline and power giant TransCanada Corp to make big changes to its corporate structure in order to boost its share price. (http://bit.ly/1xLk8pW)

China

CHINA SECURITIES JOURNAL

- China plans to allow insurance funds to invest overseas via the Shanghai-Hong Kong stock connect, reported the paper, citing sources.

- Chinese investors prefer blue chips and focus more on long-term returns when they invest in the Hong Kong market via the Shanghai-Hong Kong equity link, according to a recent survey conducted by the China Securities Regulatory Commission (CSRC).

SHANGHAI SECURITIES NEWS

- An electronic platform for recruiting financial talent was launched on Tuesday as a part of Shanghai's "financial talents" project to meet the goal of developing the city into a financial center by 2020.

SHANGHAI DAILY

- More than 7,000 10-year US visas were issued by the US Consulate General in Shanghai in the past week after the new extended visa scheme was introduced.

CHINA DAILY

- China is seeing an increasing number of methamphetamine users, said Liu Yuejin, a senior official from the Ministry of Public Security. In the first nine months of this year, police uncovered more than 100 violent crimes caused by meth users.

Read more: http://www.dailymail.co.uk/wires/reuters/article-2840248/PRESS-DIGEST-Ch...
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Britain

Supermarkets still selling chicken contaminated by deadly bug

Supermarkets are selling chicken they know to be contaminated with a bacterium that causes food poisoning and kills more than 100 people a year. (http://thetim.es/1tb7v29)

The Guardian

Christmas computer game releases help inflation edge higher

Inflation edged higher last month, pushed up by more expensive computer game releases in the run-up to Christmas, but overall price pressures remained low. (http://bit.ly/1u7YkQ9)

UK grocery sales in decline for first time in 20 years

UK grocery sales have gone into decline for the first time in at least 20 years as a raging price war and the falling cost of food commodities hit Britain's supermarkets. (http://bit.ly/1xTQQq9)

The Telegraph

ECB entering 'very dangerous territory' warns S&P

The European Central Bank's plans for 1 trillion euros ($1.25 trillion) of monetary stimulus is fraught with risk and is likely to fail without full-blown bond purchases, Standard & Poor's has warned. (http://bit.ly/1xBenxe)

London Stock Exchange begins investigation into Quindell's share price fall The London Stock Exchange is in the early stages of investigating the circumstances surrounding Monday's 19 pence (0.2966 US dollar) price fall in insurance outsourcer Quindell PLC. (http://bit.ly/1u7oQZZ)

Sky News

United count cost of Champions League absence

Manchester United Plc's revenue fell by 10 percent in the first quarter of this season, as the club paid the price for its absence from the Champions League. (http://bit.ly/1HhCILy)

Drinks Group Britvic Seeks Board Refreshment

Britvic PLC, the soft drinks manufacturer behind Robinsons and J2O, has begun a search for heavyweight figures to refresh its boardroom nearly a decade after it became a separately listed company. (http://bit.ly/1yPGMg5)

The Independent

Quindell founder Rob Terry apologises after controversial share deal

The founder of troubled outsourcer Quindell has issued an apology for his role in a controversial share deal that resulted in his ousting and left the company's reputation in tatters. (http://ind.pn/1HhEBYD)

UK inflation rises slightly to 1.3 percent in October

The rate of inflation accelerated slightly to 1.3 percent in October but remains well below the Bank of England's target of 2 percent for the 11th month in a row. (http://ind.pn/1xlY1r0)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Housing starts for October at 8:30--consensus up 0.8% to 1.025M rate
Housing permits for October at 8:30--consensus up 0.9% to 1.04M rate

ANALYST RESEARCH

Upgrades

Almost Family (AFAM) upgraded to Neutral from Underperform at RW Baird
CF Industries (CF) upgraded to Outperform from Neutral at Credit Suisse
Columbia Sportswear (COLM) upgraded to Buy from Neutral at Citigroup
DSW (DSW) upgraded to Positive from Neutral at Susquehanna
LHC Group (LHCG) upgraded to Neutral from Underperform at RW Baird
Mosaic (MOS) upgraded to Positive from Neutral at Susquehanna
National Grid (NGG) upgraded to Hold from Sell at Deutsche Bank

Downgrades

Beacon Roofing (BECN) downgraded to Hold from Buy at KeyBanc
BlackBerry (BBRY) downgraded to Underweight from Equal Weight at Morgan Stanley
Consolidated Edison (ED) downgraded to Sell from Neutral at UBS
Denbury Resources (DNR) downgraded to Hold from Buy at Wunderlich
Pool Corp. (POOL) downgraded to Hold from Buy at KeyBanc
Synchronoss (SNCR) downgraded to Underperform from Neutral at RW Baird
Total System (TSS) downgraded to Sell from Neutral at Goldman

Initiations

American Axle (AXL) initiated with a Market Perform at FBR Capital
Church & Dwight (CHD) initiated with a Buy at BTIG
Cooper Tire (CTB) initiated with an Outperform at FBR Capital
Coty (COTY) initiated with a Buy at BTIG
Dana Holding (DAN) initiated with an Outperform at FBR Capital
Diplomat Pharmacy (DPLO) initiated with an Outperform at Leerink
Diplomat Pharmacy (DPLO) initiated with an Overweight at JPMorgan
Energizer (ENR) initiated with a Neutral at BTIG
Herbalife (HLF) initiated with a Buy at BTIG
Jarden (JAH) initiated with a Buy at BTIG
Liberty Broadband (LBRDA) initiated with a Buy at Evercore ISI
Nu Skin (NUS) initiated with a Neutral at BTIG
Rackspace (RAX) initiated with an Overweight at Barclays
Stoneridge (SRI) initiated with a Market Perform at FBR Capital
Tuesday Morning (TUES) initiated with an Outperform at Wedbush

COMPANY NEWS

Darden (DRI) reported restructuring, CFO retirement, closure of aviation department
Colony Financial (CLNY) to acquire Cobalt Capital Industrial Real Estate for $1.6B
La-Z-Boy (LZB) raised quarterly dividend 33% to 8c per share
Barrick Gold (ABX) appointed Shaun Usmar as CFO Designate
Jack in the Box (JACK) set long-term annual SSS growth target of 2%-3%
PetSmart (PETM) forecast FY15 SSS growth in the low-single digits
Avon Products (AVP) announced actions to reduce costs including headcount reductions

EARNINGS
Companies that beat consensus earnings expectations last night and today include:

Lowe's (LOW), PetSmart (PETM), Leju (LEJU), Stage Stores (SSI), Staples (SPLS), China Distance Education (DL), Golub Capital (GBDC), La-Z-Boy (LZB), M/A-COM (MTSI), Jack in the Box (JACK), Vipshop (VIPS)

Companies that missed consensus earnings expectations include:

E-House (EJ), Nord Anglia (NORD), SQM (SQM), Xueda Education (XUE)

Companies that matched consensus earnings expectations include:

LightInTheBox (LITB)

Stage Stores (SSI) backs FY14 EPS view of $1.05-$1.15, consensus $1.01
Staples (SPLS) sees Q4 EPS 27c-32c, consensus 31c
Lowe's (LOW) sees FY14 EPS about $2.68, consensus $2.63
Jack in the Box (JACK) sees FY15 operating EPS $2.73-$2.88, consensus $2.81

NEWSPAPERS/WEBSITES

Sources: KKR (KKR), CD&R team up to take PetSmart (PETM) private, Reuters reports
NHTSA wants 'millions of vehicles' recalled due to Takata air bags, CNBC reports (TM, HMC, FIATY, F, GM, NSANY, VLKAY)
Ackman urges significant cost cuts at Zoetis (ZTS), Bloomberg reports
iPhone 7 (AAPL) could include 'biggest camera jump ever,' TheTechBlock reports
RadioShack (RSH) loan from Monarch off table, Bloomberg reports
Dollar General (DG) may have to sell over 4K stores for deal approval, NY Post says (FDO)
Wells Fargo (WFC), U.S. not as optimistic on settling mortgage suit, Reuters says
Investors should think about buying Home Depot (HD) dip, Barron's says

SYNDICATE

Amicus Therapeutics (FOLD) 13.85M share Secondary priced at $6.50
CorEnergy (CORR) 13M share Secondary priced at $6.80
Moelis (MC) 5.5M share Secondary priced at $31.75
Paramount Group (PGRE) 131M share IPO priced at $17.50
Receptos (RCPT) 3.6M share Secondary priced at $100.00

By: Chris at www.CapitalistExploits.at

Each year we have made a habit of taking a look back at what we've prognosticated "may" occur during the year and holding the mirror up. Given that we're at year end 2014, it's that time again!

Sometimes this is a painful exercise, as it's a clear reminder of how much we still really don't understand. At other times we get to jump with joy a little as our thesis plays out. Regardless, each year we're drawn to it like vegetarians to a bacon sandwich. It has this strange pull...

On the 16th of January 2014 we suggested that USD/JPY would hit 120, and we further suggested a long gold, short yen position.

When this was written USD/JPY was at 101. Today, as I write we're at 120. Bang on!

Gold, while not so spectacular, was trading at 130,000 and as I write this is trading at 143,000 (note: this is different than the per ounce price). We in fact reiterated our long gold short yen call a week later. So far so good. Short yen is something of a theme on our little patch of cyberspace, as we've been short in the spot market from the early 70s, and while it's been extremely profitable thus far we believe this trade has much more left in it.

On the 29th of January we made a call for a stronger US dollar, weaker EM currencies and short US stock market correction.

There are many ways to factor how this could have worked out. I'll simply take CEW, which is the Wisdom Tree Emerging Market Currency ETF. The graph below paints the picture.

We think this trade is just getting started, and 2015 will be a banner year for those looking to capitalize on an unwinding of the USD carry trade in general. When we wrote that post the Dow was trading around 16,500. It corrected a few months later to the 15,400 level before heading much higher.

On the 30th of January in a post entitled, "Buying Bombed out Equities for Outsized Returns" we suggested buying Energold Drilling at $1.62. It's now at 0.82c. Yikes!

 Tied to commodities even the well-run companies have been hammered.

Two weeks later we stated in a post, "The Next Big Thing in Finance" that we believed crowdfunding would take off, and we therefore suggested investing  in crowdfunding infrastructure.

This has been one of the most interesting markets we've been involved in. Via our Seraph private equity syndicate we've made some investments into companies building the required infrastructure for crowdfunding. We continue to look at investments in this area, though all are in private equity. We believe that billion dollar enterprises will be created right here and now in the companies providing services, resources and infrastructure to the crowdfunding marketplace.

So, what has happened since we wrote that post? In 2012 crowdfunding platforms had raised $2.7 billion and successfully funded more than a million campaigns, according to a Massolution report, with an 81% increase to $5.1 billion in 2013. 2014 is expected to clock in at around $9 billion, and by 2025 the global crowdfunding market could reach between $90 billion and $96 billion — roughly 1.8 times the size of the global venture capital industry today, this all according to a 2013 study commissioned by the World Bank. We're excited about the partnerships we have in this area and the opportunities we're reviewing within Seraph.

The 19th of February we made a call to buy January 2016 $22 strike calls on Cameco Corporation (CCJ), or in a more aggressive trade buy January 2016 $25 strike calls and sell the January 2016 $35 strike calls on Cameco.

The jury is still out on this though you can certainly buy these positions a lot cheaper today, and as such we'll take a brow beating on that call.

Picking a bottom in a short term cyclical market within a long term secular bull market has been incredibly tough. Gold has perplexed us many, many times. We believe that it will rally when people finally lose faith in their governments. This can be triggered at any moment, so we're long term bullish, but 2014 has not been kind to gold or gold equities.

We said here to buy Barrick Gold January 2016 $25 strike calls and sell the January 2016 $35 strike calls.

Barrick have been punished, and while we're in this position through till 2016 we're currently down. It has to be said though that we get excited when an entire sector gets hammered as much as this sector has. Investors should look at this as a good thing, we certainly do!

On the 16th of May in a Q&A with Brad we suggested the USD/JPY would go higher and Japanese equities would also move higher in US$ terms.

At the time the USD/JPY rate was at 101.5. Today it's just over 120. The Nikkei is probably the easiest metric for this. 14,000 at the time of writing and it now sits at 17,600.

Then a week later we suggested that in the next few years developed market equities (US and Europe) would go up,  emerging market equities down, bond markets would go down (yields to the upside) and the USD would rise.

A few years is not 12 months, so the clock is still ticking on this one. Emerging market equities are getting smashed, emerging market bonds are having a rough time and we're in a USD rally. We think we're still in the early stages of this trend, but will be watching it closely nontheless. So far this call is looking good, though bond yields are not rising yet, except in emerging markets.

In a post on the 6th of June discussing an "insurance policy", we suggested buying December 2016 $98 strike Eurodollar put options.

Those options were trading at 0.54. Today the price is 0.46 and the price of the underlying futures contract is 98.11. We're not too concerned. This has two full years to run. We'll likely be buying more.

I wish I could say we saw the collapse in crude oil coming but that would be rubbish. We in fact were bullish as mentioned in a post, "Is Crude Setting up for Something Big" on the 20th of June.

Whoa... did we get this one wrong! The collapse in oil has some really serious repercussions which we're not seeing discussed openly. and therefore we will have some of our thoughts on this penned shortly.

On the 18th of July we discussed buying Veolia Environment via December 2020 warrants.

The warrants are currently trading at 0.44. When we published this they were at 0.39. We have till 2020 on these warrants, lots of time still.

On the 12th of August we said to Buy ZIV as a play on volatility.

 Currently this trade is around breakeven at 44.

In late August we said that the bubble was in cash not stocks, and suggested that the US market rally would continue higher.

At time of publishing the Dow was trading around the 17,000 level and today is 1,000 points higher.

On the 11th of September we once again spoke about the yen and suggested a long USD/short JPY via buying YCS.

At the time of our call YCS was trading at $72. Today it's trading around $90. There's more to come we think, but with YCS you need to understand that this is a leveraged ETF, and trade it accordingly.

Not too long ago, back in early October we suggested that the Singapore dollar would depreciate against the dollar.

On the 2nd of October when we published this the Singapore dollar was 1.2722, and as I write this it is trading at 1.3234. So, it's heading in the right direction.

We suggested very strongly on the 21st of October that the Chinese remnimbi is setting up for a fall.

The USD/CNH cross was trading at 6.14 and today it is trading at 6.21. Once again... heading in the right direction.

On the 6th of November we were buying selected junior gold miners as suggested here.

At the time GDX was trading at 17.21 and GDXJ at 23.39. As I type this GDX is at 17.82 and GDXJ at 22.9.

We made a call for a US dollar rally and EM currencies to suffer on the 13th of November.

This trade was made just over a month ago. Understanding why we're in a bull market in the dollar is so important that we've put together a complimentary report on the topic. We sincerely believe the bull market in the USD will be front and centre stage in 2015!

If you're a subscriber you'll be emailed the report this week.

If you're not yet a subscriber, shame on you! Please drop your email into the little box here and the report will be emailed out to you this week. We prefer that only "awesome people" subscribe to our missives, please! We have a no D-bag policy going into 2015 :) 

Just a few weeks ago we made another call on the yuan to depreciate. 

OK, it's too early to know the outcome here, as we're only a few days into this idea. Let's revisit same time next year and see whether we're eating humble pie or caviar on our new yacht.

That my dear readers is a wrap for 2014. All in all a good year, though we have to say that we think 2015 is setting up to be one for the record books!

Wherever you are we wish you a wonderful New Year and a prosperous 2015.

- Chris and Mark

"A cat's New Year dream is mostly a bird! Don't be like a cat; in New Year, dream something that you have never dreamed! Target for new things!" - Mehmet Murat Ildan

• French policewoman killed in shoot-out, hunt deepens for militant killers (Reuters)
• The Bold Charlie Hebdo Covers the Satirical Magazine Was Not Afraid to Run (BBG)
• Could Lower 10-Year Yields Spark A More Aggressive Fed? (Hilsenrath)
• Evans Says Fed Shouldn’t Rush Rate Rise as Inflation Undershoots (BBG)
• Oil holds above $51 as traders search for floor (Reuters)
• Gross Helps Fuel New Fund With His Own Cash (WSJ)
• ECB warns Greek funding access hinges on keeping bailout (Reuters)
• Greece Jolts QE Juggernaut as ECB Gauges Deflation Risk (BBG)
• Analysts Say There's No Telling How Low Oil Prices Could Go (BBG)
• Scientists find antibiotic that kills bugs without resistance (Reuters)
• Don’t Believe the Hype: Why Germany Needs Greece to Stay in Euro (BBG)
• World’s Best Forecaster Targets Euro-Dollar Parity (BBG)
• Riksbank Board Mulling Unconventional Policy, Minutes Show (WSJ)
• European retail sales surprisingly strong (FT)
• Fossil fuels: The 'untouchable reserves' (BBC)
• White House not under pressure to expand U.S. crude exports (Reuters)

Overnight Media Digest

WSJ

* Armed men stormed the Paris offices of Charlie Hebdo, a satirical magazine targeted in the past for its cartoons on Islam, leaving 12 people dead. Three suspects, all Frenchmen, were identified. One turned himself in to police; the two others remain at large. (http://on.wsj.com/1DzUMNV)

* Federal Reserve officials, worried about weak growth overseas, are endorsing new measures by foreign officials - most notably at the European Central Bank - to stimulate their economies. (http://on.wsj.com/1zVI9ci)

* A majority of the money raised in recent months by Bill Gross for new employer Janus Capital Group Inc came from the small Southern California brokerage office where one of his personal financial advisers works. (http://on.wsj.com/1HQrDQY)

* Standard Chartered Plc plans to shut its stock-trading and underwriting business, resulting in the loss of about 200 jobs, and it will shed another 2,000 retail banking jobs this year. (http://on.wsj.com/1HRc8sa)

* Samsung Electronics Co Ltd said profits likely declined for the fifth-straight quarter in the last three months of 2014, though strong sales of its premium Galaxy Note 4 smartphone-tablet hybrid helped limit the pain. (http://on.wsj.com/1BBTGlg)

FT

German chancellor Angela Merkel refused to endorse David Cameron's demand for a European treaty change, offering only limited support for the Prime Minister's bid to renegotiate Britain's relationship with the EU.

The Trades Union Congress wants tougher penalties for employers who repeatedly flout the law after the congress estimated a quarter of a million UK workers are being paid less than the legal minimum wage.

Andrew Tyrie, one of the fiercest critics of Bank of England governance, says the institution now has the structures in place to avoid some of the failings it demonstrated during the financial crisis.

British Prime Minister David Cameron was put on the defensive after the opposition party highlighted figures that showed the worst performance by emergency departments in England's hospitals since 2004.

NYT

* The United States has concluded that North Korea was behind the destructive attacks on Sony Pictures partly because the hackers failed to mask their location when they broke into the company's servers, FBI Director James Comey said on Wednesday. (http://nyti.ms/1xHVWXh)

* An official report showed that consumer prices in the eurozone fell 0.2 percent in December from a year earlier. The data adds to further concerns that Europe is headed for a new financial and economic crisis. Pressure is now mounting for the European Central Bank to take more aggressive action to avoid a downward price spiral that could undermine the economy for years to come. (http://nyti.ms/1ArITZm)

* Samsung Electronics Co Ltd on Thursday said its operating profit and revenue probably fell almost 40 percent in the quarter ending in December compared with the same period in 2013. Samsung's forecast signals the fifth consecutive quarter of decline in operating profit and reflects continuing troubles for its mobile division. (http://nyti.ms/1Fr1fiW)

* Federal regulators said that airlines would be required to develop new safety management programs by 2018 to help identify potential hazards and prevent accidents. The Federal Aviation Administration said airlines would have six months to submit these risk-based plans, known as safety management systems. (http://nyti.ms/1s7wMAr)

* The Environmental Protection Agency will force states to comply with a federal "model rule" to cut their carbon emissions if the states do not submit customized plans under the Obama administration's new climate change regulations, a senior official said. (http://nyti.ms/1BBXz9Z)

* An expert panel unanimously recommended that the Food and Drug Administration approve a cheaper copy of a special drug used in cancer therapy, paving the way for alternatives to an entire class of complex and costly drugs to enter the United States market. (http://nyti.ms/1Fr9Fqv)

Canada

THE GLOBE AND MAIL

** Porter Aviation Holdings Inc, the biggest operator of flights at Toronto's island airport, is nearing a deal to sell its passenger terminal to a group led by InstarAGF Asset Management Inc for more than C$750 million ($635 million), people with knowledge of the matter said. (http://bit.ly/1s85RUZ)

** Quebec's energy regulator is voicing support for TransCanada Corp's $12 billion Energy East pipeline project, but warns that the company must ensure natural gas customers don't pay for its switch to an oil conduit. (http://bit.ly/1xUk73p)

** Canadian pension plans are facing another weak year in 2015 with interest rates forecast to remain low and Canadian economic growth expected to trail global gross domestic product expansion. (http://bit.ly/1IunwbP)

NATIONAL POST

** Air Canada may stop flying out of the Billy Bishop Airport in downtown Toronto as part of a broader effort to cut costs, and rival WestJet Airlines Ltd could be interested in taking its spot. (http://bit.ly/1DyulrV)

** A 64-year-old woman will appear in court next month after a Royal Canadian Mounted Police investigation into a rash of vandalism and booby traps being set on a number of mountain bike trails in North Vancouver. (http://bit.ly/1zWcpUn)

** Plunging oil prices have made it almost too difficult to predict what will happen in the Calgary housing market, according to a new real estate forecast. (http://bit.ly/1AFWSw3)

Canada

CHINA SECURITIES JOURNAL

- China is expected to speed up the launch of the Shenzhen-Hong Kong Stock Connector this year, the paper reported, citing unidentified sources with direct knowledge of the matter.

- China Financial Futures Exchange published draft rules for its planned 10-year bond futures contract, the newspaper reported, citing a statement published on the exchange's website on Wednesday.

SHANGHAI SECURITIES NEWS

- China Insurance Regulatory Commission (CIRC) is seeking public opinion on a new rule that would allow insurance funds to entrust third parties to invest in government infrastructure projects on their behalf, the newspaper reported, citing unidentified sources with direct knowledge of the matter. Insurance funds have so far not been allowed to directly invest in government infrastructure projects.

- China has started to revise its insurance law for the first time since 2009. The revised law will raise the threshold of stakeholders in insurance companies, and broaden the areas in which insurance funds can invest.

PEOPLE'S DAILY

- The mouthpiece of the Communist Party of China has urged the Chinese government to maintain integrity and never allow corruption to become a stumbling block on the way to achieving progress.

Britain

The Times

Prices paid by consumers in the eurozone are falling for the first time in more than five years, according to new figures published yesterday that heaped more pressure on the European Central Bank to embark on the controversial stimulus of full-blown quantitative easing. (http://thetim.es/1BNaoN0)

It was celebrated for being the deal that created the world's first hip-hop billionaire, but the $3.2 billion sale of the Beats headphone range to Apple has sounded a sour note for one of its architects, who claims that he was duped out of millions of dollars. (http://thetim.es/1xSZh4m)

The Guardian

J Sainsbury Plc has suffered its worst Christmas in a decade with sales sliding by 1.7 percent - although the decline was smaller than the company had expected. (http://bit.ly/1s6K3cl)

British consumers bought more new cars in 2014 than in any year in the last decade as cheap finance deals and a growing economy fuelled confidence. (http://bit.ly/1zVbjIE)

The Telegraph

Tesco Plc is to sell its online movie streaming service Blinkbox to TalkTalk Telecom Group Plc for 5 million pounds ($7.55 million), and is expected to reveal its new UK chief executive on Thursday. (http://bit.ly/1tLrhCS)

Trainline.com, the train ticket retailer, is readying plans to become the first main market listing of 2015 when it unveils a float worth more than 500 million pounds on Thursday. (http://bit.ly/1tPwcIM)

Sky News

The new chief executive of Tesco will on Thursday set out a blueprint to revive its fortunes through a string of measures including the appointment of a new boss of its UK operations. (http://bit.ly/1AHdiV6)

The owner of the audit profession's bible, Accountancy Age, has reached agreement on a financial restructuring that will slash its debts after almost a year of talks. (http://bit.ly/1tPjGc6)

The Independent

Eurozone inflation has turned negative for the first time since 2009 as Brent crude oil briefly slipped below the $50-a-barrel mark. (http://ind.pn/1ByT3ci)

Troubled pensions provider Partnership Assurance is considering dipping into the debt markets after a torrid 2014 wiped about 650 million pounds from its value. (http://ind.pn/1AttBU3)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of Jan. 3 at 8:30--consensus 290K
EIA natural gas storage change for week of Jan. 2 at 10:30
Consumer Credit for November at 15:00--consensus up $15.0B

ANALYST RESEARCH

Upgrades

AB InBev (BUD) upgraded to Buy from Neutral at Nomura
AkzoNobel (AKZOY) upgraded to Outperform from Neutral at Credit Suisse
Alcatel-Lucent (ALU) upgraded to Outperform from Neutral at Credit Suisse
Boston Scientific (BSX) upgraded to Outperform from Market Perform at Leerink
Cummins (CMI) upgraded to Buy from Neutral at BofA/Merrill
Eli Lilly (LLY) upgraded to Buy from Hold at Jefferies
LabCorp (LH) upgraded to Overweight from Neutral at JPMorgan
MGM Resorts (MGM) upgraded to Outperform from Market Perform at Wells Fargo
MSC Industrial (MSM) upgraded to Outperform from Neutral at RW Baird
Molson Coors (TAP) upgraded to Buy from Neutral at Nomura
Mueller Water (MWA) upgraded to Outperform from Market Perform at Cowen
NuVasive (NUVA) upgraded to Outperform from Sector Perform at RBC Capital
Omnicare (OCR) upgraded to Overweight from Equal Weight at Barclays
Pacific Sunwear (PSUN) upgraded to Buy from Neutral at Janney Capital
Rovi (ROVI) upgraded to Outperform from Sector Perform at Pacific Crest
SAP (SAP) upgraded to Buy from Hold at Evercore ISI
Veeva (VEEV) upgraded to Buy from Hold at Stifel

Downgrades

AIG (AIG) downgraded to Neutral from Outperform at Credit Suisse
Allison Transmission (ALSN) downgraded to Neutral from Buy at BofA/Merrill
AmerisourceBergen (ABC) downgraded to Equal Weight from Overweight at Barclays
Anadarko (APC) downgraded to Neutral from Buy at Citigroup
Andersons (ANDE) downgraded to Market Perform from Outperform at BMO Capital
Archer Daniels (ADM) downgraded to Market Perform from Outperform at BMO Capital
Barrick Gold (ABX) downgraded to Sector Perform from Outperform at RBC Capital
Cabot Oil & Gas (COG) downgraded to Neutral from Buy at Citigroup
Chesapeake (CHK) downgraded to Neutral from Buy at Citigroup
Cimarex Energy (XEC) downgraded to Sell from Neutral at Citigroup
Concho Resources (CXO) downgraded to Neutral from Buy at Citigroup
Cooper Tire (CTB) downgraded to Neutral from Buy at Goldman
Diageo (DEO) downgraded to Neutral from Buy at Nomura
Dick's Sporting (DKS) downgraded to Fair Value from Buy at CRT Capital
Dick's Sporting (DKS) downgraded to Neutral from Buy at Goldman
EP Energy (EPE) downgraded to Neutral from Buy at Citigroup
Empire District Electric (EDE) downgraded to Sell from Neutral at UBS
Ericsson (ERIC) downgraded to Neutral from Outperform at Credit Suisse
Fibria Celulose (FBR) downgraded to Neutral from Overweight at JPMorgan
Google downgraded to Hold from Buy at Stifel
Kate Spade (KATE) downgraded to Market Perform from Outperform at BMO Capital
Leidos (LDOS) downgraded to Underweight from Neutral at JPMorgan
Macerich (MAC) downgraded to Neutral from Buy at BofA/Merrill
Marathon Oil (MRO) downgraded to Sell from Neutral at Citigroup
Millicom (MIICF) downgraded to Sector Perform from Outperform at RBC Capital
New Gold (NGD) downgraded to Sell from Neutral at Roth Capital
Newfield Exploration (NFX) downgraded to Neutral from Buy at Citigroup
Noble Energy (NBL) downgraded to Neutral from Buy at Citigroup
Oasis Petroleum (OAS) downgraded to Sell from Neutral at Citigroup
Oshkosh (OSK) downgraded to Underperform from Buy at BofA/Merrill
Pioneer Natural (PXD) downgraded to Neutral from Buy at Citigroup
Priceline (PCLN) downgraded to Hold from Buy at Stifel
Qlik Technologies (QLIK) downgraded to Hold from Buy at Evercore ISI
Range Resources (RRC) downgraded to Neutral from Buy at Citigroup
Red Hat (RHT) downgraded to Hold from Buy at Evercore ISI
SAP (SAP) downgraded to Neutral from Buy at UBS
Scientific Games (SGMS) downgraded to Market Perform from Outperform at Wells Fargo
Suez Environnement (SZEVY) downgraded to Sector Perform from Outperform at RBC Capital
Tanger Factory (SKT) downgraded to Underperform from Neutral at BofA/Merrill
Tenneco (TEN) downgraded to Sell from Neutral at Goldman
The Pantry (PTRY) downgraded to Market Perform from Outperform at Wells Fargo
TripAdvisor (TRIP) downgraded to Hold from Buy at Stifel
Universal Health (UHS) downgraded to Equal Weight from Overweight at Barclays
Vitamin Shoppe (VSI) downgraded to Underperform from Neutral at BofA/Merrill
WellCare (WCG) downgraded to Underperform from Buy at BofA/Merrill
Whiting Petroleum (WLL) downgraded to Neutral from Buy at Citigroup
Zumiez (ZUMZ) downgraded to Hold from Buy at Brean Capital

Initiations

Aerie Pharmaceuticals (AERI) initiated with a Buy at Cantor
Alimera Sciences (ALIM) initiated with a Buy at Cantor
Alnylam (ALNY) initiated with a Buy at Canaccord
Bank of America (BAC) initiated with an Outperform at Credit Suisse
BioMarin (BMRN) initiated with a Buy at Canaccord
Brinker (EAT) assumed with a Buy at Citigroup
Buffalo Wild Wings (BWLD) assumed with a Neutral at Citigroup
Cardiome (CRME) initiated with a Buy at Brean Capital
Carlisle (CSL) initiated with an Outperform at Oppenheimer
Chipotle (CMG) assumed with a Buy at Citigroup
Citi (C) initiated with a Neutral at Credit Suisse
Cynosure (CYNO) initiated with a Buy at Brean Capital
Darden (DRI) assumed with a Buy at Citigroup
Domino's Pizza (DPZ) assumed with a Neutral at Citigroup
Goldman Sachs (GS) initiated with an Outperform at Credit Suisse
Horizon Pharma (HZNP) initiated with a Buy at Brean Capital
JPMorgan (JPM) initiated with an Outperform at Credit Suisse
Momenta Pharma (MNTA) initiated with a Buy at Brean Capital
Morgan Stanley (MS) initiated with a Neutral at Credit Suisse
ORBCOMM (ORBC) initiated with a Market Perform at Northland
PNC Financial (PNC) initiated with a Neutral at Credit Suisse
Paramount Group (PGRE) initiated with a Neutral at Goldman
Restaurant Brands (QSR) reinstated with a Buy at Citigroup
SunTrust (STI) initiated with an Underperform at Credit Suisse
U.S. Bancorp (USB) initiated with a Neutral at Credit Suisse
Wayfair (W) initiated with a Hold at Stifel
Wells Fargo (WFC) initiated with an Outperform at Credit Suisse
Wendy's (WEN) initiated with a Buy at Citigroup
Workday (WDAY) initiated with a Neutral at Exane BNP Paribas
zulily (ZU) initiated with a Buy at Stifel

COMPANY NEWS

Standard Chartered (SCBFF) announced the closure of its institutional cash equities, equity research and equity capital markets “ECM” activities. In the Retail Clients segment, the Group’s strategy of focusing on key cities and accelerating the switch to digital has resulted in around 2,000 job cuts announced or completed in the last three months, with a reduction of a further 2,000 expected during 2015, primarily to be achieved by not replacing staff when they leave
Alexion Pharmaceuticals (ALXN) said eculizumab trial did not reach statistical significance
PVH Corp. (PVH) announced the closing of Izod retail division to be completed by the end of FY15
Tesco (TSCDY) to close 43 unprofitable stores, consolidate head office locations
Biodel (BIOD) said its concentrated insulin showed positive Phase 2a results
Ultragenyx Pharmaceutical (RARE) announced a license agreement with Inserm Transfert SA and Institut du Cerveau et de la Moelle Epiniere for intellectual property related to the treatment of Huntington's disease with triheptanoin
NephroGenex (NRX) received positive scientific advice from EMA on Phase 3 with Pyridorin

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Mistras (MG), National American University (NAUH), Resources Connection (RECN)

Companies that missed consensus earnings expectations include:
Park Electrochemical (PKE), EXFO Inc. (EXFO), WD-40 (WDFC)

Zumiez (ZUMZ) raises Q4 EPS view to 75c-77c from 69c-72c, consensus 73c
Rovi (ROVI) sees Q4 adjusted EPS 39c-43c, consensus 41c. The company narrowed FY14 adjusted EPS view to $1.69-$1.73 from $1.60-$1.75 and sees FY15 adjusted EPS $1.55-$1.85, consensus $1.87
Stage Stores (SSI) raises FY14 EPS to $1.14-$1.18 from $1.05-$1.15, consensus $1.06

NEWSPAPERS/WEBSITES

Apple Watch (AAPL) fakes show up at Consumer Electronics Show, Financial Times reports
HTC partners with Under Armour (UA) for product development, DigiTimes reports
Apple (AAPL) to use retail employees to pre-test new iOS versions, 9to5Mac reports
General Motors (GM) to slash prices on most 2015 Cadillac CTS sedans, Reuters reports
Netflix (NFLX) wants to stream Sony's (SNE) 'The Interview,' AP reports

SYNDICATE

AmTrust (AFSI) files to sell 3M shares of common stock
Auspex Pharmaceuticals (ASPX) files to sell $172.5M of common stock
Cempra (CEMP) 5.25M share Secondary priced at $24.50
Medical Properties Trust (MPW) files to sell 30M shares of common stock
OvaScience (OVAS) 2.3M share Secondary priced at $50.00
Stemline (STML) files to sell common stock
Vitae Pharmaceuticals (VTAE) files to sell 3M shares of common stock
Xencor (XNCR) files to sell $150M mixed securities shelf