- Euro-Area Unemployment Increases to Record 12.1% Amid Recession (BBG)
- Fed faces calls for radical reform (FT) - Has Jamie Dimon approved of this message? No? Carry on then
- CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law (BBG)
- Ex-UBS Executive Convicted of Paid Sex With Underage Girl (BBG)
- Six months after Sandy, New York fuel supply chain still vulnerable (Reuters)
- Older, richer shoppers lead Japan’s surge in consumer spending (FT)
- Sharp euro zone inflation fall, joblessness point to ECB rate cut (G&M)
- Gold Rush From Dubai to Turkey Saps Supply as Premiums Jump (BBG)
- Japan Industrial Output, Retail Sales Disappoint (MW)
- Gunmen surround Libyan justice ministry (Reuters)
- Insider-Trading Probe Trains Lens on Boards (WSJ)
- Best Buy exits Europe (WSJ) ... now if only they exit America and the business will finally be fixed
- Banker Roommates Follow Zuckerberg Not Blankfein With IvyConnect (BBG)
Overnight Media Digest
WSJ
* Investigators have found female DNA on at least one of the bombs used in the Boston attacks, though they haven't determined whose DNA it is or whether that means a woman helped the two bomb attack suspects.
* Federal prosecutors launched a criminal investigation into whether corporate directors misused government-sanctioned trading plans to sell company shares for investment funds they run.
* The Service Employees International Union is locked in battle in California with an unusual opponent - another union - even as organized labor has withered in the U.S.
* Kodak will turn over its camera-film and other businesses to the UK retirees in exchange for wiping out a hefty pension obligation. Down the road the pension plan can sell the assets.
* Alfredo Sáenz, who helped turn Banco Santander from a provincial lender into a global banking power, quit his job as chief executive Monday after a legal and political controversy over his criminal conviction.
* Deutsche Bank, in a reversal, said it would raise $3.65 billion in fresh capital, giving in to months of pressure from investors and regulators to improve its capital base.
* Markets applauded political progress in Italy, extending a rally in stocks and allowing Rome to secure the lowest funding cost at a debt auction in over two years.
* The U.S. government said Monday it would pay down a small portion of the national debt this quarter for the first time in six years. The Treasury Department said it expected to retire a net $35 billion in bonds, notes and bills from April to the end of June.
* The Chicago Board Options Exchange said preparations to extend trading hours led to last week's shutdown of one of the largest U.S. stock options markets, even though staff were aware of potential problems ahead of time. The exchange operator said Monday in a note to clients that an internal review left it "fully confident" that it had addressed the software bug, though it would be assessing how it handled the three and an half hour outage last Thursday.
* Friday's settlement that ended lawsuits against two credit-rating firms and Morgan Stanley will cost the three companies $225 million, according to a person familiar with the matter. The settlement amount was divided evenly between Standard & Poor's Ratings Services, Moody's Investors Service and Morgan Stanley, this person said.
FT
Banco Santander Chief Executive Alfredo Saenz has resigned before Spain's financial regulator could decide whether he should be banned from the banking industry due to a criminal conviction.
In order to soothe shareholder concerns over its balance sheet, Deutsche Bank AG is raising 2.8 billion euros ($3.67 billion) by issuing 90 million shares.
The Petroleum Safety Authority of Norway has rebuked BP Plc for a leak at one of its North Sea oilfields that could have led to a "major accident" and caused "substantial material damage".
J Sainsbury, Britain's third largest grocer, is preparing for the resignation of Justin King, its chief executive of almost 10 years, according to people familiar with the situation.
Some Bank of England non-executive directors - who sit in the bank's 12-seat governing "court" - are calling for a hike in pay from their current salary of 15,000 pounds a year.
Lloyds Banking Group is offloading its weak Spanish retail lender onto Banco de Sabadell, a move that will cost the British bank about 250 million pounds. ($387.34 million)
Photography pioneer Eastman Kodak has agreed to sell its camera film business and other assets to UK pensioners in order to settle about $2.8 billion of claims.
NYT
* The most recent high-level exit at JP Morgan - that of the co-chief operating officer, Frank Bisignano, regarded within the bank as something of an operational wizard - has heightened worries about the persistent executive turnover at the bank and raised fresh questions about who is ready to succeed chief executive Jamie Dimon one day.
* The troubled European car market is now dragging down even Volkswagen, the region's leading automaker, as vehicle sales on the Continent have declined to their lowest levels in decades.
* Deutsche Bank, Germany's largest bank, moved Monday to address criticism that it has too thin a cushion against risk, announcing that it planned to issue $3.65 billion in new stock to increase its capital reserves.
* The European Commission will enact a two-year ban on a class of pesticides thought to be harming global bee populations, the European Union's health commissioner said Monday.
* Alfredo Sáenz resigned on Monday as chief executive of Banco Santander, Spain's largest bank, in a move that ends a period of uncertainty over the bank's leadership. Sáenz had been facing a possible ban from banking after a criminal conviction.
* The Chinese internet giant Alibaba, which was once known as China's answer to eBay, agreed on Monday to buy an 18 percent stake in the Sina Corporation's Weibo, the most popular of China's microblogging services, for $586 million. It has the right to raise its stake to 30 percent in the future.
* Kodak said on Monday that it would spin off its document and personal imaging units to its British pension plan for $650 million in cash and noncash considerations, a move that paves the way for Kodak's exit from bankruptcy protection.
Canada
THE GLOBE AND MAIL
* The union at the center of Alberta's illegal wildcat strike has been found in contempt of court and will face escalating fines if workers aren't back on the job quickly, a judge has ruled. The urgent hearing was called to consider whether the Alberta Union of Provincial Employees had followed a weekend order to end the strike, which began Friday with jail guards and expanded on Monday to include court sheriffs, clerks and social workers.
* Americans are being misled with an "overstimulated environmental argument" on the Keystone XL pipeline, according to former prime minister John Turner, who plans to visit Washington to lend his voice to ongoing Canadian lobby efforts in support of the controversial proposal. ()
Reports in the business section:
* Retailers controlled by Canada's Weston family are moving to compensate victims of a deadly building collapse in Bangladesh as reactions to the tragedy goad companies to take greater responsibility for far-flung global supply chains.
* Suncor Energy Inc on Monday announced a 54 percent dividend hike, a C$2 billion ($1.97 billion) share buyback and better first-quarter operating earnings that were boosted by strong oilsands production and refining margins.
NATIONAL POST
* Toronto's board of health is calling on Queen's Park to require chain restaurants to post calories and sodium content on their menus, and has signaled it intends to pursue such a rule within its city limits if the province does not.
FINANCIAL POST
* Montreal engineering firm Dessau has been black-listed in its home market, as part of a new edict by the City of Montreal that bans for five years any company that has admitted to taking part in collusion from bidding on public contracts. Montreal-based SNC Lavalin Group Inc and Genivar Inc are expected to get similar ban notices in coming days, along with a handful of other firms.
* Independent investment dealer Fraser Mackenzie Ltd is closing its doors after nine years in business, a move some industry players predict will presage the demise or consolidation of many small firms.
Corporate Finance
* KKR & Co is considering a bid for Rio Tinto's majority stake in an Australian copper-gold mine in a sign that private-equity firms are hunting for bargains among assets no longer wanted by major resources companies, the Wall Street Journal reported, citing people familiar with the matter.
* Deutsche Bank AG is raising 2.8 billion euros ($3.67 billion) by issuing 90 million shares to soothe shareholder concerns over its balance sheet after months of resisting calls to tap shareholders for fresh capital, the Financial Times reported.
* Japan's Fujitsu Ltd is in late-stage talks to sell its microcontroller chip business to Spansion Inc -- a deal that will broaden the U.S. semiconductor company product line-up so it can better cater to automotive clients, two sources familiar with the matter told Reuters on Tuesday.
* German media group Bertelsmann is poised to pocket 1.4 billion euros ($1.83 billion) from the partial sale of its stake in broadcaster RTL, making it the second-biggest new listing in Europe so far this year. This is based on a narrowed price range for the offered shares of between 55 euros and 56 euros a share, two people familiar with the proposed deal have confirmed, according to the Financial Times.
* Tele Columbus Group, Germany's third-biggest cable company, is reviving its search for a buyer to tap demand for cable assets in Europe's largest economy, Bloomberg reported citing three people familiar with the matter.
Fly On The Wall 7:00 AM Market Snapshot
ANALYST RESEARCH
Upgrades
Best Buy (BBY) upgraded to Buy from Hold at Deutsche Bank
Boardwalk Pipeline (BWP) upgraded to Neutral from Underperform at Credit Suisse
Century Aluminum (CENX) upgraded to Buy from Hold at Cowen
Chart Industries (GTLS) upgraded to Overweight from Equal Weight at Morgan Stanley
Deutsche Bank (DB) upgraded to Neutral from Underperform at Credit Suisse
Deutsche Bank (DB) upgraded to Outperform from Sector Perform at RBC Capital
Deutsche Bank (DB) upgraded to Overweight from Neutral at JPMorgan
Kilroy Realty (KRC) upgraded to Buy from Neutral at BofA/Merrill
Occidental Petroleum (OXY) upgraded to Buy from Hold at Deutsche Bank
SINA (SINA) upgraded to Buy from Hold at Jefferies
Saia, Inc. (SAIA) upgraded to Buy from Hold at BB&T
Superior Energy (SPN) upgraded to Buy from Neutral at Sterne Agee
Synovus (SNV) upgraded to Buy from Neutral at BofA/Merrill
Wesco Aircraft (WAIR) upgraded to Neutral from Underperform at BofA/Merrill
Downgrades
Atlas Resource Partners (ARP) downgraded to Neutral from Outperform at RW Baird
Buffalo Wild Wings (BWLD) downgraded to Hold from Buy at KeyBanc
CapitalSource (CSE) downgraded to Market Perform from Outperform at FBR Capital
Five Star Quality (FVE) downgraded to Hold from Buy at Deutsche Bank
Greenway Medical (GWAY) downgraded to Neutral from Overweight at JPMorgan
LRR Energy (LRE) downgraded to Neutral from Outperform at RW Baird
Legacy Reserves (LGCY) downgraded to Neutral from Outperform at RW Baird
LinnCo (LNCO) downgraded to Neutral from Outperform at RW Baird
Mid-Con Energy (MCEP) downgraded to Neutral from Outperform at RW Baird
New Mountain Finance (NMFC) downgraded to Market Perform at Wells Fargo
PulteGroup (PHM) downgraded to Neutral from Overweight at JPMorgan
Initiations
Active Power (ACPW) initiated with a Buy at Ascendiant Capital
CIRCOR (CIR) initiated with a Neutral at Ascendiant Capital
CenterPoint Energy (CNP) initiated with a Buy at KeyBanc
Pandora (P) initiated with a Sector Perform at RBC Capital
HOT STOCKS
Best Buy (BBY) to sell stake in European business to Carphone Warehouse for $775M
Bow Tie Cinemas to acquire Clearview Cinemas from Cablevision (CVC)
Suncor (SU) increased dividend, to buy back additional C$2B of common shares
S&P lowered Allscripts Healthcare Solutions (MDRX) corporate credit rating to 'BB' from 'BB+'
Lloyds Banking (LYG) said on track to meet 2013 guidance
Magellan Health (MGLN) lowered FY13 EPS view to $3.27-$3.93, consensus $3.72
BP (BP) said on track for start-up of four new upstream projects in 2013
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Huntsman (HUN), BP (BP), Aetna (AET), Starwood Hotels (HOT), DHT Holdings (DHT), Ensco (ESV), Morgans Hotel (MHGC), Sturm, Ruger (RGR), Hartford Financial (HIG), Hertz Global (HTZ), Herbalife (HLF), Express Scripts (ESRX)
Companies that missed consensus earnings expectations include:
Jacobs Engineering (JEC), Republic Airways (RJET), Masco (MAS), Kaman (KAMN), Wausau Paper (WPP), Newmont Mining (NEM), Buffalo Wild Wings (BWLD)
Companies that matched consensus earnings expectations include:
CapitalSource (CSE), Datalink (DTLK), Bravo Brio Restaurant (BBRG), Integrated Device (IDTI)
NEWSPAPERS/WEBSITES
- Federal prosecutors launched a criminal investigation into whether corporate directors misused government-sanctioned trading plans to sell company shares for investment funds they run, the Wall Street Journal reports
- Nielsen (NLSN) is expected to announce today that it’s testing a tool to measure online viewing of TV shows, the latest step in the company's efforts to improve how it tracks digital audiences, the Wall Street Journal reports
- Inflation in the eurozone fell to a three-year low of 1.2% in April and unemployment is at a new record, new data shows, raising expectations of an interest rate cut by the ECB to reignite the economy, Reuters reports
- SoftBank (SFTBF) said there’s no need to improve its $20.1B bid for 70% of Sprint Nextel (S), which has been challenged by a counter-offer from Dish Network (DISH), Reuters reports
- US Airways Group (LCC) and AMR Corp.’s (AAMRQ) American Airlines are negotiating with banks including Barclays (BCS) and Citigroup (C) to provide a branded credit card once they complete a merger, Bloomberg reports
SYNDICATE
BG Medicine (BGMD) files to sell 4.11M shares of common stock for holders
Hydrogenics (HYGS) intends to offer common stock
Macquarie Infrastructure (MIC) to offer 3.04M LLC interests
NeoStem (NBS) intends to offer common stock
New York Mortgage (NYMT) plans to offer 13.6M shares of common stock
Northern Tier (NTI) commences offering of 10M common units for holders
Synthetic Biologics (SYN) files to sell 10.79M shares for holders
ACTIVIST/PASSIVE FILINGS
Eminence Capital reports 5.5% passive stake in Asbury Automotive (ABG)
JANA Partners reports 9.1% stake in Oil States (OIS), will continue talks with company
Park West reports 8.1% passive stake in Velti (VELT)
Starboard Value reports 7.8% stake in TriQuint (TQNT)