PRESS DIGEST - Wall Street Journal - Oct 18
* U.S. officials are pushing a plan that could help some
“underwater” borrowers get refinancing assistance in the latest
government bid to break a legal impasse with big banks over
alleged foreclosure abuses and ease problems in the housing
market.* Amid the wild swings of the past few weeks, cracks are
appearing deep in the workings of the stock market that some
professional investors say are making the market treacherous to
trade.* Russell Caswell’s $57-a-night motel, a magnet for
hard-luck cases, police patrol cars and the occasional drug
deal, is the unlikely prize in a high-stakes tug-of-war between
conservative legal activists and the government.* Running pipelines may not sound as sexy as wildcatting for
oil, but Richard Kinder has made a fortune showing how lucrative
it can be.* Hedges haunt Morgan Stanley : The Wall Street firm
still is trying to clean up a mess that shows the difficulty of
putting the financial crisis behind it.* China’s economic growth slowed in the third quarter but
remained at a relatively healthy pace, adding to evidence that
the Chinese economy is headed for a soft landing.* Asian shares dropped amid receding hopes that euro-zone
leaders will be able to substantially contain Europe’s debt
crisis. The Nikkei fell 1.4 percent.* Wells Fargo & Co’s third-quarter earnings missed
expectations as the bank’s loan growth wasn’t enough to make
soaring deposits profitable.* Citigroup Inc.’s third quarter was a bright spot in
what is shaping up as a lackluster earnings season for banks.
But that didn’t keep investors from punishing financial stocks
again.* As investors look toward a Sunday meeting of European
leaders for a sweeping solution to Europe’s debt crisis, a
spokesman for German Chancellor Angela Merkel on Monday warned
against hoping that all the euro-zone’s debt woes would be
resolved by then.* The International Trade Commission said Apple Inc
didn’t violate HTC Corp’s patents for technology used
in its mobile devices, a setback in the Taiwanese company’s
patent fight with the iPhone maker.* International Business Machines Corp’s quarterly
profit and sales rose amid growth in emerging markets, but the
technology giant failed to dispel investors’ concerns about the
health of technology spending.* Credit-card issuers, looking for ways to expand their
business amid stiff competition, are knocking on familiar if
potentially troublesome doors: those of subprime borrowers.* Anadarko Petroleum Co agreed to pay BP PLC
$4 billion to settle all claims between the two companies
arising from the Gulf of Mexico oil spill, a development that
reduced uncertainty about the British oil giant’s ultimate
liability for last year’s disaster.
UPDATE 4-Charles Schwab misses slightly as markets weigh
* Client trading picks up in quarter* Shares down 3.9 percentBy John McCrankOct 17 (Reuters) - U.S. discount brokerage Charles Schwab
Corp’s third-quarter profit rose, just missing
estimates, as higher trading levels were not enough to offset a
combination of headwinds that included weaker equity markets
and interest rates.The company’s shares were down 3.9 percent at $12.25 in
early afternoon trading on the New York Stock Exchange.The impasse over the U.S. debt ceiling, the downgrading of
the U.S. credit rating, and concerns that Europe’s sovereign
debt crisis could drag the world’s economy back into recession
led to a 14 percent drop in U.S. equities in the quarter, as
measured by the S&P 500 index.That drop, along with softer short-term interest rates led
to a 7 percent sequential drop in Schwab’s asset management and
administration fees.”Schwab is feeling the brunt of a second-half environment
that’s really tough on brokers, with the market levels falling,
the interest rates tightening up on already tightening
margins,” said Ed Ditmire, and analyst at Macquarie Research.Schwab said on Monday it earned $220 million, or 18 cents a
share in the quarter, compared to $124 million, or 10 cents a
share, a year earlier. Analysts had been expecting 19 cents a
share, according to Thomson Reuters I/B/E/S.In the third quarter alone, the Schwab’s shares tumbled
over 31 percent, as investors worried weaker markets would
crimp profits at retail brokerages in the short term.CLIENTS STAY ENGAGEDBut the volatility also led to more client trades. Schwab
said its clients executed a record 1,005,000 trades on a single
day in August when the volatility was at its peak.Third-quarter daily average revenue trades - a widely
watched measure of client activity - were up 39 percent at
Schwab from a year earlier and up 22 percent from the second
quarter this year, to 323,100.Average revenue per trade, however, fell 2 percent from
both the year earlier and the second quarter to $12.04.”The so-called silver lining, which is high trading
volumes, help Schwab less than other firms because it gets less
of its revenue from trading commissions than other firms,”
Ditmire said.Overall revenue at San Francisco-based Schwab rose 11
percent to $1.18 billion, compared to analysts’ expectations of
$1.19 billion.Schwab has been waiving client fees on money market funds
for several quarters now because with the low interest rate
environment, returns could be nonexistent to negative.The firm said it waived $160 million in fees in the
quarter, compared to $128 million in the prior quarter, due to
the lower short-term rates.SHORT-TERM CHALLENGES REMAINThe waivers, as well as Schwab’s net interest margin, came
in weaker-than-expected, said Alex Kramm, an analyst at UBS.”While rates have started to move higher again lately,
metrics will likely deteriorate further in 4Q11,” Kramm said in
a note to clients.Schwab said it is looking into expense controls to help
offset some of the market headwinds, which Kramm said “could
represent a slight positive.”Total expenses came to $821 million, down 5 percent from a
year earlier. Expenses related to its $1 billion acquisition of
options trading firm optionsXpress came in at an estimated $12
million to $14 million of pretax charges.”The one-time costs related to that (deal) came in higher
than we would have thought,” Howard Chen, an analyst at Credit
Suisse, said in an interview. He had been expecting around $10
million in expenses related to the deal this quarter.”Within the core franchise, I think Schwab posted fairly
resilient results in what was a very challenging summer for all
investors,” he added.Total client assets were up 7 percent from a year ago at
$1.576 trillion.Net new assets in the quarter, including those from
optionsXpress deal and major clearing inflows, totaled $86
billion. Minus the acquisition and inflows, core net new assets
were up 21 percent from a year earlier at $17.6 billion.Schwab’s competitors include E*Trade Financial Corp , which is due to report its quarterly results on
Wednesday, and TD Ameritrade which reports next week.
DIARY- Spain corporate events
Spain main eventsEuropean corporate eventsDate GMT Company Name RIC Event————————————————————————21/10 Bankinter Q325/10 Enagas Q325/10 Enagas CONFCALL26/10 BBVA Q326/10 BBVA CONFCALL26/10 Ebro Foods Q326/10 Mapfre Q326/10 Mapfre CONFCALL27/10 Abertis Q327/10 Abertis CONFCALL27/10 Acerinox Q327/10 Banco Sabadell Q327/10 Banco Santander Q327/10 Banco Santander CONFCALL27/10 Ferrovial Q327/10 Iberdrola Q328/10 Banco Popular Q304/11 IAG Q304/11 IAG TRAFFIC08/11 Gas Natural Q310/11 Gamesa Q310/11 Indra Q310/11 Repsol Q310/11 Telefonica Q3————————————————————————Event types:Full Year = Full year resultsQ1, Q2, Q3, Q4 = Quarterly resultsANALYSTS = Analysts’ meetingsAVCG = Asset value and capital gain figuresNEWSCONF = News conferenceSHAREHOLDER = Shareholder meetingCONFCALL = Conference callTRAFFIC = Traffic figuresBOARD = Board meeting
WRAPUP 1-Chances of U.S. deficit panel success unclear
* Super committee urged to stay away from defense cuts* Farm subsidy cuts likely to be proposedBy Donna Smith and Richard CowanWASHINGTON, Oct 14 (Reuters) - Whether the special “super
committee” of Congress will succeed in its mission to slash
U.S. deficits is up in the air, a panel member said on Friday,
as some lawmakers tried to fence off large budget items like
defense.U.S. Representative Chris Van Hollen, a Democratic member
of the special panel, said he was “absolutely convinced” the
six Democrats and six Republicans would try hard to reach
agreement on a plan by its Nov. 23 deadline. The panel has been
asked to find at least $1.2 trillion in savings over 10 years.”Whether we are able to overcome some of the obstacles by
the end of the day is still unclear,” Van Hollen said at an
event sponsored by the National Journal.The panel of senators and U.S. House of Representatives
members has been meeting, mostly behind closed doors, for more
than a month in an effort to put together a deficit reduction
package. They have said very little publicly about their
deliberations or whether any progress has been made on the
politically explosive issues of tax hikes and spending cuts for
government healthcare and and retirement programs.During bitter debt limit negotiations that led to an August
agreement creating the super committee, Republicans firmly
refused to consider Democratic demands that tax increases be
part of any package that included spending cuts for Medicare
and Medicaid healthcare programs for the elderly and poor.Some Republicans on the super committee now appear open to
the idea of closing some corporate tax breaks to increase
revenues and lower corporate income tax rates, according to
lobbyists familiar with the discussions.Van Hollen declined to discuss the tax issues being
considered by the super committee. But he said tax code reform
is one way to raise revenues.”One way to address the revenue piece of the puzzle is
through tax reform,” Van Hollen said. “You can apply that
concept equally through the individual side and the corporate
side.”While the super committee is unlikely to have enough time
to write an overhaul of the tax code, it could instruct the
tax-writing committees of Congress to undertake such an effort
next year.RARE AGREEMENT: DEFENSE CUTSThe panel is reviewing a large number of budget proposals
from the regular committees of Congress.Most of the committees split along party lines in their
suggestions with Democrats urging the super committee to avoid
cuts in health and retirement benefits and Republicans urging
an overhaul of those programs to put them on a more sustainable
financial footing.Senate Finance Committee Republicans called for a series of
tax cuts that they have long advocated and asked the super
committee to cap the individual and corporate tax rates at 25
percent. The current top rates are 35 percent.Democrats meanwhile continued their push for more revenues
to relieve pressure on domestic government programs that have
shouldered the burden of two previous budget-cutting efforts.But in a rare show of agreement, Democrats and Republicans
on the House Armed Services Committee urged the panel to reject
further defense spending cuts. In separate letters to the super
committee they argued that such a move would hurt military
preparedness as well as the economy.”If further cuts to the military are implemented … these
cuts would pose a serious threat to the nation’s readiness to
respond to current and future global security challenges, break
the back of our armed forces while slowing our economic
recovery, and do little to resolve our debt crisis,” said
committee Chairman Howard McKeon.Walling off the military from spending cuts would make the
super committee’s work an even tougher uphill climb.Failure by the super committee to reach agreement would
trigger $1.2 trillion in spending cuts, starting in 2013,
evenly divided between military and domestic programs.Defense Secretary Leon Panetta told McKeon’s panel on
Thursday that defense spending cuts beyond the $450 billion
over the next decade that lawmakers have already approved would
“devastate our national security.”Meanwhile Senate and House agriculture committees, possibly
hoping to head off even deeper cuts by the super committee, are
expected to propose about $23 billion in farm subsidy
reductions. The proposal would be tied to the creation of a new
crop subsidy system, according to farm lobbyists..
Anadys hep C drug shows promise in mid-stage trial
Interim data also showed 76 percent of patients, who had not responded to prior treatment, had undetectable virus levels at week 12 when treated with Anadys’ therapy, compared with 44 percent patients treated with the standard treatment.The main goal of the study is to show cure rate 24 weeks after patients complete all treatment. Anadys expects to report the final 24-week data around the end of the year.Shares of Anadys closed at $1.04 on Wednesday on Nasdaq.
