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• G20 struggles over forex, at odds over debts (Reuters)
• Alwaleed Sells Airbus A380 to Invest in Middle East Firms (BBG)
• GOP Stalls Vote on Pick for Pentagon (WSJ)
• ECB officials rebuff currency targeting as G20 meets (Reuters)
• Not good for the reflation effort: Muto leads as Japan PM close to choosing nominee for Bank of Japan chief (Reuters)
• M&A Surges as Confidence Spurs Deals in Computers to Consumer (BBG)
• JPMorgan’s head of equity prop trading Gulati to launch own fund (FT)
• Tiffany & Co. sues Costco over engagement rings labeled ‘Tiffany' (WaPo)
• JPMorgan Said to Fire Traders, Realign Pay Amid Slump (BBG)
• Broker draws Tullett into Libor scandal  (FT)
• Airbus drops Lithium-Ion batteries for A350 (Reuters)

Overnight Media Digest

WSJ

* H.J. Heinz Co, a brand in virtually every American kitchen, is selling itself for $23 billion to another household name - Warren Buffett - and Brazilian private equity firm 3G Capital.

* After a year of sometimes-acrimonious negotiations, AMR Corp's American Airlines and US Airways Group Inc have agreed to merge. However, the two carriers face months, perhaps years, of work integrating their massive operations into the world's biggest airline.

* Differing approaches by the U.S. Securities and Exchange Commission and the Justice Department in cases against Standard & Poor's could complicate things for federal prosecutors, who say the company disregarded its own standards when rating certain securities.

* The euro zone economy plunged last quarter at its fastest pace in nearly four years, as recessions along the currency zone's southern border gripped powerhouses Germany and France.

* Nasdaq OMX Group Inc said it plans soon to start processing trades at 0400 ET. The earlier start time is a challenge to rival NYSE Euronext, whose electronic Arca exchange began matching bids and offers for shares at that wee hour in 2005.

* Anheuser Busch InBev SA offered to sell an additional $2.9 billion of assets to Constellation Brands Inc in a dramatic bid by the world's largest brewer to rescue its $20 billion takeover of Mexico's Grupo Modelo .

* SAC Capital Advisors agreed to give clients more time to decide whether to keep their money with the hedge fund giant amid an insider-trading investigation, bowing to concerns expressed by one of its biggest investors, according to people familiar with the matter.

* Tiffany & Co sued Costco Wholesale Corp on Thursday, contending that the warehouse chain sold engagement rings it falsely claimed were made by the luxury jewelry company.

* U.S. Senate Republicans blocked, at least temporarily, the nomination of former Senator Chuck Hagel to be secretary of defense, amid intense partisan fighting in Congress.

FT

JPMorgan's Gulati to launch own fund Fisher exits as BlackRock fixed income chief

Browett returns to UK high street

Overview Warren Buffett's Berkshire Hathaway and Brazilian private equity firm 3G Capital will buy ketchup maker H.J. Heinz Co for $23.2 billion in cash. American Airlines and U.S. Airways said they plan to merge in a $11 billion deal that will form the world's biggest air carrier.

Anheuser-Busch InBev, the world's largest brewer, has revised the terms of its $20.1 billion takeover of Mexican brewer Grupo Modelo in the hopes of satisfying U.S. Department of Justice concerns it would mean higher prices for U.S. beer drinkers.

Barnes & Noble Inc expects its Nook business to post an increased full-year loss in fiscal 2013, as the top U.S. bookstore chain struggles with slower sales of e-readers and e-books. Deepak Gulati, JPMorgan's global head of equity proprietary, is quitting to set up a hedge fund in Switzerland called Argentière Capital, in the second or third quarter this year.

BlackRock, the world's largest money manager, said on Thursday that Peter Fisher was stepping down as head of fixed income at the New York-based firm.

BNP Paribas unveiled a three-year plan to save 2 billion euros ($2.69 billion) in annual costs and ramp up growth in Asia after its fourth-quarter profits were hit by Europe's weak economy. John Browett will return to UK's high street as the new chief executive of Monsoon Accessorize. Browett, who left Dixons for a short stint as head of Apple's global retail stores, abruptly parted ways with the gadget maker after just three months.

NYT

* The U.S. airline industry took a decisive step toward greater concentration on Thursday with the announcement that American Airlines, a unit of AMR Corp, and US Airways Group Inc had agreed to merge, forming the nation's biggest airline.

* Warren Buffet's Berkshire Hathaway Inc and Brazilian private equity firm 3G Capital agreed to buy ketchup maker H.J.Heinz Co for $23 billion on Thursday.

* European economies shrank in the fourth quarter at their fastest rate since the depth of the financial crisis in 2009, new data showed on Thursday, with both strong and weak countries falling short of expectations and raising anxieties of a longer, deeper recession.

* Blackstone Group said it would keep most of its $550 million with SAC Capital Advisors for three more months, as the hedge fund's clients faced a regularly scheduled quarterly deadline on Thursday to decide whether to continue investing.

* Budweiser brewer Anheuser-Busch InBev moved on Thursday to rescue its $20.1 billion proposed takeover of Grupo Modelo of Mexico, the maker of Corona beer, by offering concessions aimed at persuading American antitrust authorities to let the deal proceed.

* Activist shareholder Carl Icahn has built up a 12.98 percent stake, or 14 million shares, in Herbalife Ltd, a nutritional supplements company, according to a regulatory filing on Thursday.

* U.S. drugmaker Merck & Co Inc agreed to pay $688 million to settle lawsuits claiming that it had harmed investors by delaying the release of unfavorable study results for its cholesterol drug Vytorin, the company announced on Thursday.

* General Motors Co said its profit in the fourth quarter increased slightly, as continued losses in Europe offset positive results in North America.

* The Moscow Exchange, better known by its original name, Micex, is scheduled to begin trading on Friday on its own trading platform. The listing drew interest from specialized investors in financial services companies and institutional investors in the United States and Europe, a financial industry official said on Thursday.

Canada

THE GLOBE AND MAIL

* Snowbirds driving in blithe violation of Florida law were saved by the Geneva Conventions - not the ones governing the conduct of war, but the 1949 Geneva Convention on Road Traffic.

The licensing brouhaha surrounded an obscure new law - section 322.04, Florida Statutes - which meant that Canadians motoring in Florida, along with all other foreigners, risked arrest unless they were armed with an International Driving Permit. No longer was a Quebec or Ontario drivers' license good enough.

* Long before they can understand what is being said to them, babies can make strategic use of the sound cues that they hear to distinguish between two languages, a new study has revealed.

The finding suggests that children growing up in a multilingual environment are neither confused nor disadvantaged by having to cope with two mother tongues, even when the grammatical structures of the two languages are substantially different from one another.

* A crippled cruise ship that lost power for more than four days in the Gulf of Mexico was pulled into a port in Mobile, Alabama, late on Thursday as passengers cheered the end of a "hellish" voyage marked by overflowing toilets and stinking cabins.

Reports in the business section:

* Nadir Mohamed is stepping down as the chief executive officer of Rogers Communications, leaving the telecommunications and media giant in search of a new leader at a critical time for the industry.

* Mattamy Homes, Canada's largest builder of new homes, is planning a major U.S. expansion, as it bets that house prices have topped out in its main market of Ontario - and have bottomed out south of the border.

"I think Ontario's had a good run in terms of house prices and I think we're at a point in time where we've peaked in pricing," Brian Johnston, the chief operating officer of Mattamy Homes, said during an interview at the company's Oakville, Ontario headquarters. "We've had a good run as an industry and now things are flattening out."

NATIONAL POST

* On Thursday, Oscar Pistorius was charged with the murder of his 29-year-old girlfriend, Reeva Steenkamp, in South Africa. He is accused of shooting her four times in the middle of the night in his home in Pretoria. The news comes as a shock. Murder should always come as a shock, but Oscar Pistorius is supposed to be a hero.

* In a potent reminder of the arbitrary censorial powers of Canadian liquor authorities, a rum cheekily named for pornographic actor Ron Jeremy was pulled from Manitoba store shelves after customers complained it was obscene.

Dubbed Ron de Jeremy, the liquor's label features an image of Ron Jeremy's face above the taglines "the adult liquor" and "long smooth taste."

On Thursday, however, after the decision was publicized, the rum was restocked after liquor authorities determined that it did not, in fact, have any obscene content.

FINANCIAL POST

* While Canada's economy should pick up later this year, there are external and domestic threats that, if unchecked, could make a case for more interest rate cuts, according to the International Monetary Fund.

The IMF said in its annual report Thursday that Canada's economy will grow by 1.8 percent in 2013, hobbled by a weak second-half handover from the previous year.

* Fairfax Financial Holdings Ltd says it has returned to profitability in 2012 after the "catastrophe" of losses it endured a year earlier.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Heinz (HNZ) upgraded to Neutral from Sell at Goldman
inContact (SAAS) upgraded to Buy from Neutral at Roth Capital
Korn/Ferry (KFY) upgraded to Buy from Neutral at SunTrust
Qlik Technologies (QLIK) upgraded to Outperform from Sector Perform at RBC Capital
XL Group (XL) upgraded to Buy from Neutral at Janney Capital

Downgrades

ARMOUR Residential (ARR) downgraded to Hold from Buy at Deutsche Bank
Angie's List (ANGI) downgraded to Market Perform from Outperform at Barrington
Comerica (CMA) downgraded to Sell from Neutral at Citigroup
DaVita (DVA) downgraded to Neutral from Buy at Goldman
Endeavour (END) downgraded to Hold from Buy at C.K. Cooper
Extra Space Storage (EXR) downgraded to Sell from Neutral at UBS
Generac (GNRC) downgraded to Sell from Neutral at Goldman
Gold Fields (GFI) downgraded to Sector Underperformer from Sector Performer at CIBC
Huntington Bancshares (HBAN) downgraded to Neutral from Buy at Citigroup
LogMeln (LOGM) downgraded to Neutral from Overweight at JPMorgan
LogMeln (LOGM) downgraded to Perform from Outperform at Oppenheimer
Monster Worldwide (MWW) downgraded to Neutral from Buy at SunTrust
NorthWestern (NWE) downgraded to Market Perform from Outperform at Wells Fargo
Randgold Resources (GOLD) downgraded to Sell from Neutral at Citigroup
Sovran Self Storage (SSS) downgraded to Sell from Neutral at UBS
St. Jude Medical (STJ) downgraded to Underperform from Neutral at Cowen
SunTrust (STI) downgraded to Hold from Buy at Jefferies
Transocean (RIG) downgraded to Sell from Hold at Deutsche Bank
UGI Corporation (UGI) downgraded to Neutral from Buy at UBS

Initiations

CTC Media (CTCM) initiated with an Underweight at Barclays
Emerson (EMR) initiated with an Outperform at RBC Capital
Garmin (GRMN) initiated with an Outperform at William Blair
Lehigh Gas (LGP) initiated with a Perform at Oppenheimer
Neptune Technologies (NEPT) initiated with an Outperform at JMP Securities
Parker-Hannifin (PH) initiated with a Sector Perform at RBC Capital
Triumph Group (TGI) initiated with an Outperform at Wells Fargo
Yandex (YNDX) initiated with an Overweight at Barclays

HOT STOCKS

Procter & Gamble (PG) lowered FY13 EPS guidance
Revised guidance following Venezuelan currency devaluation
Expects to incur one-time charges of $200M to $275M after-tax, or 7c to 9c per share
McGraw-Hill (MHP) cut to Baa2 from A3 by Moody's, outlook negative
Tiffany (TIF) filed suit against Costco (COST) for trademark infringement
UPS (UPS) reauthorized $10B share repurchase program
CBS (CBS) plans for $1B accelerated share repurchase
B&G Foods (BGS) sees FY13 adjusted EBITDA $178M to $182M
Industrias Bachoco S.A.B. de C.V. (IBA) announced a possible outbreak of avian influenza H7N3 detected in five breeder farms in Guanajuato state
Boston Scientific (BSX) invested in BAROnova clinical trial, terms not disclosed

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Key Energy (KEG), Goldcorp (GG), Pilgrim's Pride (PPC), eHealth (EHTH), comScore (SCOR), Brocade (BRCD)

Companies that missed consensus earnings expectations include:
NGL Energy Partners (NGL), Health Management (HMA), Kronos Worldwide (KRO), Agilent (A), B&G Foods (BGS), CBS (CBS)

Companies that matched consensus earnings expectations include:
Envestnet (ENV), VCA Antech (WOOF)

NEWSPAPERS/WEBSITES

A flurry of acquisitions (AAMRQ, LCC, HNZ, BRK.A, BUD, STZ, CAH) announced yesterday suggests that major deal-making is back after a nearly six-year absence. The $40B-worth of deals struck Thursday brings the total value of M&A transactions announced since January to nearly $160B, the fastest start to a year since 2005, according to Dealogic, the Wall Street Journal reports
Lawmakers reintroduced legislation that could force Internet retailers (AMZN, EBAY) to collect sales taxes, the latest effort by states and the federal government to end what they call a handicap on brick-and-mortar businesses, the Wall Street Journal reports
Hedge fund manager William Ackman, who called Herbalife (HLF) a pyramid scheme, said the biggest risk in shorting the company was whether regulators would take time to focus on the matter. "Could we get the SEC, the FTC and the regulators around the world interested?," he asked, Reuters reports
Two midtown Manhattan skyscrapers owned by international real estate firm Hines are for sale, sources say, as sales of New York office buildings show signs of heating up, Reuters reports
European Central Bank council member Jens Weidmann said an appreciating euro alone won’t trigger a cut in interest rates and the exchange rate’s gains are justified by the economic outlook, Bloomberg reports
Wells Fargo & Co. (WFC), expanding its securities unit to challenge its Wall Street competitors, is broadening U.K. commercial property lending as European banks are forced to retreat, Bloomberg reports

SYNDICATE

Cliffs Natural (CLF) 9M share Spot Secondary priced at $29.00
Kosmos (KOS) Energy 30M share Secondary priced at $11.00
Pioneer Natural (PXD) Resources 9M share Secondary priced at $128
Sequans (SQNS) files to sell American Depository Shares
Xoom (XOOM) 6.3M share IPO priced at $16.00

ACTIVIST/PASSIVE FILINGS

Carl Icahn reports 12.98% stake in Herbalife (HLF), intends to have discussions with management regarding strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction.

Everyone recalls the slow motion trainwreck from the afternoon of January 25, when in an epic bitchfest, hedge fund titans Bill Ackman and Carl Icahn screamed at each other telephonically for about an hour on CNBC in what was nothing but one big pissing match. Just over two weeks later, Icahn forced a major squeeze in the stock when as we wrote previously and as we predicted, he disclosed a massive 13% stake, or some 14 million shares in the company built up through stock and calls (essentially costless thanks to Icahn's recent profits on Netflix). What many may not know however, is that for Icahn, the HLF stake was nothing more than a $500 million dollar impulse buy. Why? Because as the chart below, which breaks down the cumulative purchases of HLF stock by various Icahn's funds, shows, the billionaire only held some 1.7 million shares until the January 25 afternoon of his screamfest with Ackman. Then the Monday after the feud Icahn went ballistic, and proceeded to buy some 120,000 shares on Monday and 197,459 option-equivalent shares, after which he tapered off his stock purchases while ramping up the call buys, and buying an epic 10 million share-equivalent calls in the next two weeks, without pause, compassion or remorse, and with just one thought: crush, mangle and destroy Ackman!

Of course, by buying calls instead of stock, Icahn never gave a hint to either markets or dark pools what he was doing (although we commiserate for whoever sold all those calls in bulk as they are now facing tens of millions in margin calls). The other issue is that since Icahn does not control the shares outright, he can't call them in and thus force the "epic squeeze" that would befall the stock if the float was suddenly less than the short interest.

Unless, of course, he and others exercise any of their in the money shares, demanding the physical underlying shares.

But the bigger issue is that the chart above shows for Icahn the HLF purchase is nothing but an escalation of the previous grudge match, with no regard for the fundamentals, and the impulse buy was, paradoxically, driven precisely by Ackman's dare to tender for the company. Because he wants to, and because he can: for Icahn $500 million is literally pocket change.

To loosely paraphrase the Terminator:

That Icahn is out there. He can't be bargained with. He can't be reasoned with. He doesn't feel pity, or remorse, or fear. And he absolutely will not stop, ever, until Ackman is destroyed.

Behold: the Icahnator

• US braced as cuts deadline passes (FT)
• U.S. stares down start of steep "automatic" budget cuts (Reuters)
• Yeltsin-Era Tycoons Sell Resources for Distance From Kremlin (BBG)
• Italy's center-left leader rules out coalition with Berlusconi (Reuters)
• Apple Required Executives to Hold Triple Their Salary in Stock (WSJ)
• BOJ Seen Spiking Punchbowl in April Under New Chief Kuroda (BBG)
• Diplomatic fallout from EU bonus cap (FT)
• Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says (BBG)
• Chinese trader accused of busting Iran missile embargo (Reuters)
• JPMorgan No. 1 Investment Bank Amid a Flurry of New Deals (BBG)
• Eurotunnel’s Ferry Strategy at Risk as Rivals Cry Foul (BBG)
• Telepathic rats team up across continents (FT)

Overnight Media Digest

WSJ

* The $85 billion in so-called sequester cuts take effect Friday if, as expected, U.S. President Obama and congressional leaders find no way to avoid them.

* Libya's sovereign-wealth fund said it is cooperating with the U.S. Securities and Exchange Commission in the ongoing investigation into Goldman Sachs Group Inc over the securities firm's dealings with the fund when Col. Muammar Gaddafi was in power.

* Some of the biggest U.S. banks were on pace to find a higher rate of past foreclosure mistakes than regulators disclosed in January when they halted a review in favor of a $9.3 billion settlement for homeowners.

* Groupon Inc ousted Chief Executive Andrew Mason a day after reporting a quarterly loss that heightened scrutiny of the company's business model.

* Best Buy Co ended talks with founder Richard Schulze over a deal in which he and a group of buyout firms were proposing to take a minority stake in the firm in exchange for three seats on the board, according to people familiar with the matter.

* Apple Inc earlier this month reversed its stance on a corporate-governance measure related to executive compensation, implementing a new rule that executives must hold triple their base salary in company stock.

* Mexico's political parties are coming together to take on the country's three most powerful businessmen, including the world's richest man Carlos Slim, by negotiating a broad set of constitutional overhauls to boost competition in the country's telephone and television markets.

* A federal jury in Manhattan ordered ESPN Inc to pay Dish Network Corp $4.86 million in damages in a dispute over licensing rates for sports broadcasts.

FT

The United States is braced for automatic across-the-board spending cuts which are set to kick in on Friday under a process known as sequestration.

Groupon co-founder Andrew Mason was fired as chief executive of the daily deals company on Thursday.

RBS Chief Executive Stephen Hester on Thursday signalled that the British bank could be ready for reprivatisation as early as next year.

Lloyds Banking Group will set aside an additional 1.4 billion pounds to cover the mis-selling of payment protection insurance.

European Council president Herman Van Rompuy said Europe would not prioritise treaty change despite British Prime Minister David Cameron's desire for a new settlement to put to a referendum.

Executives at European banks have warned that they are in danger of losing key traders and managers to U.S. and other international rivals after the EU provisionally agreed to a bonus cap for banks.

Carl Icahn and Herbalife have reached an agreement to nominate two directors to the company's board

NYT

* U.S. President Obama will formally notify government agencies on Friday that an obscure process known as sequestration is in effect, triggering deep, across-the-board budget cuts that will force federal spending to shrink.

* The American economy grew just barely in the last quarter of 2012. Output expanded at an annual rate of 0.1 percent, far below the growth needed to get unemployment back to normal. However, the economy did not shrink, as the Commerce Department estimated in January.

* One of Citigroup Inc's internal hedge fund units is spinning off, free from its corporate parent and the restrictions that have come with new banking regulations.

* Investment firm Paulson & Company, the largest shareholder in MetroPCS Communications Inc, announced that it would oppose a planned merger with T-Mobile USA, saying the deal would saddle the new company with too much debt.

* After spending four years leading the investigations of some of the world's biggest banks, Lanny Breuer plans to leave the U.S. Justice Department on Friday, then interview at law firms.

* Daily deals website Groupon Inc reported weak fourth-quarter earnings on Wednesday, and fired its chief executive, Andrew Mason, a day later.

* Talks between Best Buy Co Inc and a group comprising its founder and three private equity firms have ended, people briefed on the matter said. By the end, the company's founder, Richard Schulze, had been seeking an enlarged minority stake.

Canada

THE GLOBE AND MAIL

* As Alberta's controversial C$10 million inquiry into queue jumping in the healthcare system ended on Thursday after months of testimony - and a few revelations - the retired judge at the helm accused the Alison Redford government of "interference" with the commission's independence.

* Ontario's elementary teachers' union has advised members to continue boycotting students' clubs, sports teams and other after-school activities, sparking parent outrage and raising tensions in the province's public schools.

Reports in the business section:

* The Canadian government is opening a vast new frontier for oil and gas activity in Nunavut's high Arctic with a call for companies to indicate their interest in bidding for exploration rights.

FINANCIAL POST

* Renewables could make up as much as 30 percent to 40 percent of the global energy mix by 2060 as oil loses its reign as the world's biggest energy source, Royal Dutch Shell Plc said in a forecast on the energy sector's changing landscape.

* ConocoPhillips said moves by Ottawa to limit foreign investment in Canada's resources have made it more difficult for some buyers.

China

CHINA SECURITIES JOURNAL

- In a front-page opinion article commenting on two recent alleged investment scams involving Chinese hedge funds, the author says China's hedge fund industry is suffering from a trust gap that must be addressed with more transparency.

SHANGHAI SECURITIES NEWS

- Analysts expect the Government Work Report, which is yet to be approved at the National People's Congress, will set a GDP growth target of 7.5 percent, an inflation target of below 4 percent, and a foreign trade growth target of 8 percent for 2013. The report will keep current "relaxed fiscal policy, prudent monetary policy" stance unchanged.

SECURITIES TIMES

- Beijing's second land auction of the year showed strong demand from developers, with 35 developers spending 10.7 billion yuan on 13 parcels of land.

CHINA DAILY

- Naw Kham, the Burmese drug lord convicted for the murder of 13 Chinese sailors in 2011, will be executed on Friday in Yunnan province along with three accomplices.

PEOPLE'S DAILY

- China should encourage consumer finance operations to boost domestic demand, said a commentary in the newspaper.

Fly on the Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Aflac (AFL) upgraded to Overweight from Equal Weight at Evercore
Alcatel-Lucent (ALU) upgraded to Market Perform from Underperform at Bernstein
Autodesk (ADSK) upgraded to Buy from Hold at Jefferies
HCP Inc. (HCP) upgraded to Market Perform from Underperform at BMO Capital
Illumina (ILMN) upgraded to Buy from Neutral at UBS
International Paper (IP) upgraded to Outperform from Sector Perform at RBC Capital
Intuitive Surgical (ISRG) upgraded to Buy from Hold at Cantor
Sequenom (SQNM) upgraded to Overweight from Neutral at Piper Jaffray
Target (TGT) upgraded to Outperform from Market Perform at Wells Fargo
Telefonica (TEF) upgraded to Equal Weight from Underweight at Barclays
Telefonica (TEF) upgraded to Neutral from Conviction Sell at Goldman
Westlake Chemical (WLK) upgraded to Overweight from Neutral at JPMorgan
priceline.com (PCLN) upgraded to Buy from Neutral at Lazard Capital

Downgrades

AIG (AIG) downgraded to Equal Weight from Overweight at Evercore
CNOOC (CEO) downgraded to Reduce from Neutral at Nomura
Cincinnati Bell (CBB) downgraded to Outperform from Strong Buy at Raymond James
Darden (DRI) downgraded to Neutral from Buy at UBS
Deutsche Bank (DB) downgraded to Sell from Neutral at Goldman
Duke Energy (DUK) downgraded to Hold from Buy at Deutsche Bank
Duke Energy (DUK) downgraded to Neutral from Buy at Citigroup
Fulton Financial (FULT) downgraded to Neutral from Buy at Sterne Agee
Health Care REIT (HCN) downgraded to Underperform from Market Perform at BMO Capital
MICROS (MCRS) downgraded to Hold from Buy at Jefferies
OmniVision (OVTI) downgraded to Market Perform from Outperform at Raymond James
Royal Bank of Scotland (RBS) downgraded to Hold from Buy at Societe Generale
Triangle Capital (TCAP) downgraded to Market Perform from Outperform at Raymond James
U.S. Silica (SLCA) downgraded to Equal Weight from Overweight at Morgan Stanley
Ventas (VTR) downgraded to Underperform from Market Perform at BMO Capital
Weatherford (WFT) downgraded to Underperform from Market Perform at BMO Capital
Wendy's (WEN) downgraded to Underweight from Equal Weight at Morgan Stanley

Initiations

Acuity Brands (AYI) initiated with a Market Perform at Northland Securities
Aixtron (AIXG) initiated with an Underperform at Northland Securities
Coronado Biosciences (CNDO) initiated with an Overweight at Piper Jaffray
Cree (CREE) initiated with an Outperform at Northland Securities
Enphase Energy (ENPH) initiated with an Outperform at Northland Securities
First Solar (FSLR) initiated with an Underperform at Northland Securities
Gladstone Land (LAND) initiated with an Outperform at JMP Securities
Horizon Technology (HRZN) initiated with a Buy at Wunderlich
Nanosphere (NSPH) initiated with a Buy at Canaccord
Norwegian Cruise Line (NCLH) initiated with a Hold at Deutsche Bank
Power-One (PWER) initiated with an Outperform at Northland Securities
SunPower (SPWR) initiated with an Outperform at Northland Securities
TCP Capital (TCPC) initiated with a Buy at Wunderlich
Tesla (TSLA) initiated with an Outperform at Northland Securities
Veeco (VECO) initiated with a Market Perform at Northland Securities
Western Gas Equity (WGP) initiated with a Hold at Deutsche Bank
Western Refining (WNR) initiated with an Overweight at Barclays
WhiteHorse Finance (WHF) initiated with a Buy at Wunderlich

HOT STOCKS

Groupon (GRPN) named Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis to newly created Office of the Chief Executive, replacing CEO Andrew Mason
Paulson & Co. to vote against MetroPCS (PCS) merger as currently structured
Flowers Foods (FLO) won Hostess bread assets with $360M bid
Sinclair Broadcast (SBGI) to purchase broadcast assets of 18 television stations owned by Barrington Broadcasting Group for $370M
Sky (BSYBY) to acquire Telefonica (TEF) UK’s broadband and fixed-line telephony business
Fitch upgraded Host Hotels (HST) IDR to 'BB+' from 'BB', outlook stable
Dresser-Rand (DRC) sees 2013 new unit bookings $1.8B-$2B
Morgan Stanley (MS) sold legacy ownership interest in DigitalGlobe (DGI)
Greenbrier (GBX) sold wheelset roller bearing reconditioning business to Timken (TKR)
Publix (PUSH) considering bid for Harris Teeter (HTSI), Bloomberg reports
Magnum Hunter (MHR) to delay filing Form 10-K

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Great Plains Energy (GXP), Universal Health (UHS), Rosetta Stone (RST), Air Lease (AL), SandRidge Energy (SD), Salesforce.com (CRM), Deckers Outdoor (DECK), Gap (GPS)

Companies that missed consensus earnings expectations include:
Buenaventura (BVN), Atlantic Power (AT), Morgans Hotel (MHGC), Dresser-Rand (DRC), McDermott (MDR), Sotheby's (BID)

Companies that matched consensus earnings expectations include:
Autobytel (ABTL), Cell Therapeutics (CTIC)

NEWSPAPERS/WEBSITES

• Drugstore chains (CVS, WAG, RAD) are branching out into health-care services, as a way to counter a slowdown in prescription drug sales and evolve beyond just dispensing pills. They see big opportunities as millions of uninsured Americans pick up health coverage next year. The upside is in making sure current patients stay on their medications or providing alternative venues for medical treatment, even if it is done virtually, the Wall Street Journal reports.
• What happens when the "bundle" begins to unravel? The question is taking on intense importance for the cable-TV business (CVC, TWX, NWSA, DIS, VZ, CMCSA, DTV). Attacks on the bundle approach have escalated. Now pay-TV executives, as well as its customers, are openly pondering a world where the bundle no longer reigns, even though such a scenario could be years away, the Wall Street Journal reports.
• Glencore (GLNCY) supplied thousands of tons of alumina to the Iranian Aluminum Company (Iralco) that has provided aluminum to Iran's nuclear program, intelligence and diplomatic sources say, Reuters reports
• The $85B in across-the-board "sequestration" cuts designed to hit most U.S. government programs were set to begin today. What they were not likely to do, at least as far as financial markets were concerned, was cause enough damage to derail a U.S. economy that has been gaining momentum, Reuters reports
• The firing of Groupon (GRPN) CEO Andrew Mason puts pressure on Chairman Eric Lefkofsky to find a replacement who can create a money-making business after the daily-deal provider lost $723.8M in the past three years, Bloomberg reports
• Two Chinese Manufacturing indexes revealed a slower-than-estimated pace of expansion, a signal that the nation’s economic recovery may be losing steam, Bloomberg reports

SYNDICATE

Campus Crest Communities (CCG) 22.2M share Spot Secondary priced at $12.25
DCP Midstream Partners  (DPM) 11M share Secondary priced at $40.63
Icahn Enterprises (IEP) 3.175M share Spot Secondary priced at $63.00
Pzena Investment (PZN) files to sell 529,590 shares of Class A common stock
Safe Bulkers (SB) files $300M mixed securities shelf

ACTIVIST/PASSIVE FILINGS
S.A.C. Capital Advisors reports 5.0% passive stake in Annie's (BNNY)
Waterfall Asset Management reports 9.98% passive stake in Jacksonville Bancorp (JAXB)

Update: Krugman's sociopathological (he welcomes the adjective - it "gets the public's attention") response to Bloomberg is below:

"My view is that I am indeed raising public awareness in an effective way -- because the crucial first step is to get the public's attention. We have a situation in which almost the whole political and media establishment is wedded to a pro-austerity narrative; as Ezra Klein pointed out recently, on fiscal issues reporters seem to feel that the usual rules about not taking sides don't apply. So anyone taking on that narrative has to be forceful about it."

"As for Ferguson: what a pathetic response. Notice that he is doing precisely what I never do, and making it about the person as opposed to his ideas. All I have ever done to him is point out that he seems to not know what he is talking about, and that he has been repeatedly wrong. I would never stoop to speculating about his childhood! If he can't handle professional criticism -- which is all that I have ever offered -- he should go find another profession."

"As for Mr. Rehn's complaint, I don't think he gets the meaning of the term 'personal attack.' I have never said anything about him as a person; I don't know anything about him as a person. All I have done is point out that he has been consistently wrong, and that he keeps making the same claims despite years of evidence refuting his propositions. Yes, I write colorfully, to get peoples' attention. But that's not a personal attack."

* * *

Those who have a life outside of finance (or any for that matter), will be excused to know that the man who has done everything in his power to become the biggest laugh out loud joke in the economic establishment (that would be Paul Krugman obviously) at least for those who harbor an original thought and are not indoctrinated by absurd political bias, has been recently engaged in a very public spat with a bunch of other sad self-caricatures, in this case assorted pro-austerity Eurocrats (where the concept of austerity is anything but what it should be, i.e., cutting spending and hiking taxes as seen by the ongoing records in debt in both Spain and Italy) personified mostly by European commissioner Olli Rehn. Krugman has written down his thoughts, for those who can stand his illogical, megalomaniacal, self-aggrandizing Keynesian gibberish, on the matter in "Rehn of Terror", and "Of Cockroaches and Commissioners", while the European take of this sad economist who thinks that "this time is different" and massive debt is the only fix for what is a "massive debt" problem, can be followed here.

And so finally the man who has been taking ad hominem shots at his opponents for years, instead of actually challenging their ideas because his ability to engage in a logical, factual manner is non-existent at best, and utterly humiliating at best, finally and deservedly finds himself on the receiving end of public ridicule and mockery.

To wit:

Stephen Roach:"This style of personalizing attack journalism is not effective in going deep and important policy issues."

Olli Rehn: "I would rather comment on the analytical substance rather personal attacks."

But the best comes from Niall Ferguson who told Bloomberg TV the following:

"In my view Paul Krugman has done fundamental damage to the quality of public discourse on economics. He can be forgiven for being wrong, as he frequently is--though he never admits it. He can be forgiven for relentlessly and monotonously politicizing every issue. What is unforgivable is the total absence of civility that characterizes his writing. His inability to debate a question without insulting his opponent suggests some kind of deep insecurity perhaps the result of a childhood trauma. It is a pity that a once talented scholar should demean himself in this way."

More from Bloomberg TV:

And while it is best to leave it at that, as it is a well-known truism that one shouldn't dirty their hands by handling matter of the Krugman kind, one does hope that a certain Carl Icahn does get involved and launch a 45 minute tirade against the liberal Op-Ed writer.

Alas, for that to happen, it would imply Krugman would have done at least one trade in his highly theoretical life. Which as everyone knows, has and will never happened: because reality, and the mathematical equations describing it are just two very different worlds for the trillion dollar coin-endorsing Nobel prize winner.

• French unemployment rises again to highest since 1999 (Reuters)
• BoJ rejects call for monetary easing (FT)
• North Korea threatens pre-emptive nuclear strike against US (Guardian)
• Firms Race to Raise Cash (WSJ)
• Time Warner Will Split From Magazine Unit in Third Spinoff (BBG) - slideshows, kittens, "all you need to knows" coming to Time
• U.S. economy, world's engine, remains in "neutral": Fed's Fisher (Reuters)
• BOE Keeps QE on Hold as Officials Weigh More Radical Measures (BBG)
• Jobs start to go as US sequestration cuts in (FT)
• BofA Times an Options Trade Well  (WSJ)
• Congress Budget Cuts Damage U.S. Economy Without Aiding Outlook (BBG)
• Dell’s Crafted LBO Pitch Gets Messy as Investors Circle (BBG)
• Dell says Icahn opposes go-private deal (Reuters)
• Portugal Rating Outlook Raised to Stable by S&P on Budget Plan (BBG)
• China’s Richer-Than-Romney Lawmakers Reveal Reform Challenge (BBG)

Overnight Media Digest

WSJ

* U.S. Transportation Secretary Ray LaHood needs more information to be convinced that Boeing Co's proposed fixes to batteries on its 787 Dreamliner are adequate to enable the jet to resume commercial flights.

* Michael Dell is battling to keep his $24.4 billion buyout of Dell Inc on track after a major shareholder, Southeastern Asset Management Inc, balked and Dell's biggest rival, Hewlett-Packard Co considered a bid of its own.

* Time Warner Inc has decided to spin off its entire Time Inc magazine group, it said Wednesday, giving up on talks with Meredith Corp over the proposed merger of most of their titles.

* Microsoft Corp is backing a U.S. bill that would restrict commercial use of data gathered while children use computers at public schools. Its stated purpose is protecting privacy, but an unnamed focus of the bill is Google Inc .

* Gao Xiqing, president of China's giant sovereign-wealth fund, China Investment Corp, warned Japan against using its neighbors as a "garbage bin" by deliberately devaluing the yen, joining growing international griping about a potential currency war.

* Japanese auto maker Toyota Motor Corp on Wednesday announced its biggest management overhaul since 2009. Among the three outside directors named to the board is Mark Hogan, a former General Motors Co executive who once ran a now-dissolved California, United States joint-venture between Toyota and General Motors.

* General Motors Co's Chief Executive Dan Akerson said he was confident that the auto maker would meet the federal fuel-efficiency target set for 2025. He said initial steps to meeting the target include cutting the average weight of cars using lighter materials, introducing new engine technology and developing an all-electric vehicle with a range of up to 200 miles.

* A major test of China's promise to consolidate its solar-panel makers looms this month when Suntech Power Holdings Co, one of the industry's biggest companies, faces a deadline for a steep bond payment.

* Bank of America Corp profited from a big options bet it made on Constellation Brands Inc's stock days before the beverage maker announced an acquisition in which the bank was the lead lender.

FT

George Osborne will use his budget to clarify how the government intends to use monetary policy to kick-start the economy.

Business secretary Vince Cable has said the time may have come to increase borrowing to fund housing and other infrastructure projects.

KPMG could lose its audit contract with HSBC after the bank said it would put its audit contract out to tender.

Google tipped Brussels off to Microsoft's violation of a voluntary antitrust deal that prompted the European Commission to slap the maker of the Windows operating system with a 561 million euro ($729.3 million) fine.

Time Warner said it would spin off its Time Inc and IPC magazine businesses as a new publicly listed company by the end of 2013.

Outgoing Bank of England governor Mervyn King called on the government to break up the Royal Bank of Scotland saying it would be the best way to claw back the majority of the 45 billion pounds used to bail out the bank.

BP Chief Executive Bob Dudley's pay fell nearly 22 percent last year to $2.67 million.

International Airlines Group Chief Executive Willie Walsh's remuneration has fallen to below that paid to the head of the company's British Airways unit.

Former BP Chief Executive Tony Hayward has been named chairman of CompactGTL, a company that turns natural gas into synthetic crude oil.

NYT

* Veteran activist investor Carl Icahn is planning to unveil a major stake in troubled computer maker Dell Inc and is expected to announce his opposition to the company's proposed $24.4 billion sale to its founder, a person briefed on the matter said on Wednesday.

* The U.S. Federal Aviation Administration is close to approving tests of Boeing Co's approach to fixing the batteries on its 787 jets, and the tests could begin next week, federal and industry officials said Wednesday.

* The European Union fined Microsoft Corp $732 million on Wednesday for failing to respect an antitrust settlement with regulators. But in a highly unusual "mea culpa," the European Union's top antitrust regulator said his department bore some of the responsibility for Microsoft's failure to respect a settlement that caused the fine.

* Just two months into office, Japanese Prime Minister Shinzo Abe is showing an increasing willingness to take on some pillars of the country's establishment - the central bank and the politically influential farmers - in an aggressive attempt to finally breathe some new life into Japan's listless economy.

* Facebook Inc plans to announce a substantial redesign of its "News Feed" - a makeover aimed both at keeping users glued to the social network and luring more advertising dollars.

* Investment fund Content Partners LLC said on Wednesday it had agreed to acquire the half of the "C.S.I.: Crime Scene Investigation" television franchise owned by an affiliate of Goldman Sachs Group Inc in a deal that makes it a co-owner, with CBS Corp, of the long-running series and its spinoffs.

Canada

THE GLOBE AND MAIL

* Parliament is being asked to approve C$108 million ($105 million) for a new Canadian embassy building in central London that the Department of Foreign Affairs bought in November, a move that is raising questions over whether the Conservative government's plan to save millions abroad is going to pan out.

* Alberta Premier Alison Redford plans to overhaul her province's finances in her imminent budget by slowing spending growth, pouring money into infrastructure and starting a savings plan - all while backing away from election promises and sending her province back into debt.

* The Toronto District School Board eliminated hundreds of jobs on Wednesday night, including high school special education teachers, guidance counselors and vice-principals.

Reports in the business section:

* A darker trade outlook, softer housing market and a more dovish central bank have caught up to the Canadian dollar, as investors and currency speculators look elsewhere for greener pastures. The once high flying loonie has been losing ground to most major currencies since last autumn, but the gap has widened in recent weeks.

* After months of delays, the federal government is set to release the long awaited rules for a key auction of wireless spectrum. Industry Minister Christian Paradis will make an official announcement in Ottawa on Thursday morning that will outline the final regulations for the 700 megahertz auction that will be held later this year.

* Talisman Energy Inc is putting large swaths of its Canadian assets on the auction block in a bid to focus the company and fill its coffers. Talisman wants to pull in between $2 billion and $3 billion from land sales or joint ventures in the next 12 to 18 months.

NATIONAL POST

* Quebec Conservative Senator Pierre-Hugues Boisvenu, already under scrutiny for his C$20,000 in housing expenses, is facing more controversy after it was revealed he had been in a romantic relationship with one of his Parliament Hill employees.

* Almost 300,000 members and supporters have signed up to choose the next leader of the federal Liberal party, which could be the highest number the party has ever seen. Party president Mike Crawley says 294,002 people are eligible to vote.

FINANCIAL POST

* Media mogul David Black said on Wednesday he's close to signing a memorandum for financing to build a new pipeline and oil refinery in Kitimat, British Columbia. Speaking to the BC Chamber of Commerce, Black said his new company Kitimat Clean Inc expects to sign a memorandum of understanding with Switzerland-based Oppenheimer Investments Group for a C$25 billion project.

* After months of staring down increasingly threatening economic data in Canada and abroad, the Bank of Canada appears to have blinked - ever so slightly. The central bank on Wednesday did what it has done for 2-1/2-years, leaving its near-rock-bottom interest rate unturned. But the wording behind the decision - keeping its trend-setting lending level at 1 percent - has been softened somewhat.

Hong-Kong

SOUTH CHINA MORNING POST

-- Cheung Kong (Holdings) Ltd expects to bank up to HK$40 billion ($5.16 billion) from property sales in Hong Kong and the mainland this year, a record for the company, said executive director Justin Chiu, adding that the developer would be making more than 5,200 Hong Kong flats and 2,500 mainland units available for sale this year, also a record high.

-- Paliburg Holdings and its partner Regal Hotels International Holdings will add more than 1,000 hotel rooms in the next three years despite fears of further measures to restraint growth of mainland visitors.

-- Hysan Development Co is redeveloping commercial block Sunning Plaza and residential project Sunning Court, in Causeway Bay, into a single mixed-use office and retail complex. The project is expected to be completed by around 2018.

MING PAO DAILY NEWS

-- Chinese state-owned insurer PICC Group has kicked off its A-share listing plan and hopes to complete it in the second half of this year, said chairman Wu Yan.

SING TAO DAILY

-- Chinese developer SOHO China Ltd, which saw net profit surge to 10.6 billion yuan ($1.70 billion) in 2012, is looking for merger or acquisition opportunities in Beijing and Shanghai this year, said chief executive Zhang Xin.

TA KUNG PAO

-- Cheung Kong (Holdings) Ltd has no plan at the moment to sell more hotel units as the number of residential units pending for sale is already very high, said executive director Justin Chiu.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Big Lots (BIG) upgraded to Hold from Sell at Deutsche Bank
Clean Harbors (CLH) upgraded to Outperform from Neutral at RW Baird
Dril-Quip (DRQ) upgraded to Buy from Underperform at BofA/Merrill
MEMC Electronic (WFR) upgraded to Buy from Neutral at Goldman
Mellanox (MLNX) upgraded to Outperform from Market Perform at JMP Securities
New York Community (NYCB) upgraded to Outperform from Market Perform at Keefe Bruyette
SAP (SAP) upgraded to Overweight from Neutral at HSBC
Varian Medical (VAR) upgraded to Neutral from Sell at Goldman

Downgrades

American Water (AWK) downgraded to Neutral from Buy at Citigroup
Big Lots (BIG) downgraded to Hold from Buy at Canaccord
Big Lots (BIG) downgraded to Underperform from Market Perform at Raymond James
DaVita (DVA) downgraded to Hold from Buy at Deutsche Bank
Daimler AG (DDAIF) downgraded to Neutral from Buy at Citigroup
DigitalGlobe (DGI) downgraded to Hold from Buy at Benchmark Co.
Fresenius Medical (FMS) downgraded to Sector Perform from Outperform at RBC Capital
Granite Real Estate (GRP) downgraded to Sector Perform from Outperform at RBC Capital
Lincoln Educational (LINC) downgraded to Underperform from Market Perform at BMO Capital
SandRidge Energy (SD) downgraded to Underperform from Market Perform at BMO Capital
Vitacost.com (VITC) downgraded to Sell from Neutral at Roth Capital

Initiations

Angie's List (ANGI) initiated with an Overweight at Piper Jaffray
Kirby (KEX) initiated with a Market Perform at Wells Fargo
Nanometrics (NANO) initiated with a Buy at Canaccord

HOT STOCKS

NTSB to release interim report on Boeing 787 (BA) investigation today at 11 am ET
Time Warner (TWX) announced plan to separate Time Inc.
Apache (APA) said to mull sale of deep-water Gulf of Mexico assets, Bloomberg reports
DryShips (DRYS, ORIG) said still bearish about short-term performance of shipping markets
Nacco Industries (NC) sees 2013 steam coal tons delivered increasing
Carnival (CCL) increased capacity in Asia with two ships for 2013-2014 season
Smithfield Foods (SFD) sees consistent growth from packaged meats business
Baskin-Robbins (DNKN), Baladari Brothers announced JV agreement
Country Style Cooking (CCSC) expects to open 60 new restaurants in 2013

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Energy Partners (EPL), Smithfield Foods (SFD), Delek US Holdings (DK), Piedmont Natural Gas (PNY), Alamo Group (ALG), Quaker Chemical (KWR), PetSmart (PETM), Korn/Ferry (KFY)

Companies that missed consensus earnings expectations include:
U.S. Concrete (USCR), Safeguard Scientifics (SFE), Descartes Systems (DSGX), Sanchez Energy (SN), Accuride (ACW), China Lodging Group (HTHT), Steinway Musical (LVB), SolarCity (SCTY), Vail Resorts (MTN)

Companies that matched consensus earnings expectations include:
Oiltanking Partners (OILT)

NEWSPAPERS/WEBSITES

• Dallas Fed President Richard Fisher blamed both major U.S. political parties for a "horrid" political climate in Washington, and said monetary policy alone can't drive the economy, the Wall Street Journal reports
• Companies are taking advantage of the stock market rally to raise funds, a sign of U.S. corporations' desire to increase growth by investing and acquiring rivals following the financial crisis. Public firms have raised $35.1B in secondary offerings of stock in the U.S. since the beginning of the year, according to Dealogic, the Wall Street Journal reports
• China will likely appoint securities regulator Guo Shuqing to run the $482B state investment vehicle, China Investment Corp., and China's chief trade representative, Gao Hucheng, is seen running the Commerce Ministry, sources say, Reuters reports
• Exxon Mobil (XOM) launched an auction to sell up to $2B worth of shares in a Hong Kong power venture after a year-long effort to offload its holding to its partner yielded no result, sources say, Reuters reports
• GE (GE) and Caterpillar (CAT), the largest locomotive makers, are rushing to develop natural gas-powered models in a potential shift from diesel’s six decades as the fuel of choice for railroads, Bloomberg reports
• The largest U.S. banks are considering whether to disregard a Fed request and announce their dividend plans soon after the central bank’s stress tests are released, sources say. The Fed asked 18 firms, including JPMorgan Chase (JPM) and Goldman Sachs (GS), to wait until next week, even though the lenders will get preliminary word today, Bloomberg reports

SYNDICATE

Acura Pharma (ACUR) files $75M mixed securities shelf
Artisan Partners (APAM) 11.05M share IPO priced at $30.00
Clean Energy (CLNE) files to sell 6.33M shares of common stock for holders
Discovery Communications (DISCK) 7.7M share Secondary priced at $64.75
FIS (FIS) files to sell 19.3M shares of common stock for holders
FleetCor (FLT) files to sell 4.5M shares of common stock for holders
Hertz Global (HTZ) files to sell 60.05M shares of common stock for holders
Inovio Pharma (INO) raises $15.1M in common stock and warrants
Kar Auction (KAR) 13M share Secondary priced at $19.25
Kayne Anderson (KYN) files to sell 4M shares of common stock
MGIC Investment (MTG) Corp. 135M share Secondary priced at $5.15
MRC Global (MRC)  23M share Secondary priced at $28.00
Oculus (OCLS) files to sell common stock, no amount given
Thermo Fisher (TMO) files automatic mixed securities shelf
Triple-S (GTS) files to sell 7M shares of Class B common stock for holders

ACTIVIST/PASSIVE FILINGS

Gabelli raises stake in Intermec (IN) to 16.02% from 14.86%
S.A.C. Capital Advisors reports 5.3% passive stake in Ann Inc. (ANN)

• Firms Send Record Cash Back to Investors (WSJ)
• And in totally opposite news, from the same source: Firms Race to Raise Cash (WSJ)
• China warns over fresh currency tensions (FT)
• Hollande faces pressure over jobs pledge (FT)
• Obama efforts renew ‘grand bargain’ hopes (FT)
• Shirakawa BOJ Expansion Gets No Respect as Stocks Cheer Exit (BBG)
• Japan’s Nakao Defends Easing as China’s Chen Expresses Concern (BBG)
• Boeing Had Considered Battery Fire Nearly Impossible, Report Says (WSJ)
• ECB Chief Plays Down Italy Fears (WSJ)
• China moves to make its markets credible (FT)
• Euro Group head says UK at risk of 'sterling crisis' (Telegraph)

Overnight Media Digest

WSJ

* Activist investor Carl Icahn said he would push to replace Dell Inc's board and pursue "years of litigation" if the computer maker refused to accept his demand for a refinancing that would pay a hefty dividend to shareholders.

* Google Inc's Motorola Mobility hardware unit has begun laying off about 1,200 employees, or more than 10 percent of its headcount, according to a company email reviewed by The Wall Street Journal, as the smartphone maker continues trying to return to profitability.

* Upending a closely watched ritual in place since 1996, New York securities firm Goldman Sachs Group Inc told employees Thursday it now plans to promote a new crop of managing directors every two years, instead of each year.

* New York private equity firm KKR & Co LP has reached a deal to buy industrial-pumps manufacturer Gardner Denver Inc for $76 a share, valuing the company at roughly $3.74 billion, said a person familiar with the matter.

* The U.S. Federal Reserve served notice that the financial industry's health continues to improve, potentially clearing the way for large U.S. banks to funnel tens of billions of dollars to investors in increased dividend payments and share buybacks.

* European Central Bank President Mario Draghi played down fears that Italy's indecisive election could reignite Europe's debt crisis, saying financial markets have taken the election results in stride and that Italy's current political mess doesn't threaten its budget discipline.

* Pandora Media Inc posted a 54 percent jump in revenue as the internet radio company provided evidence that cost increases are slowing. It also announced its chief executive will be stepping down.

* Facebook Inc, hoping to keep users logged on longer as it faces competition from myriad new social apps, is tweaking its news feed again.

FT

Federal Reserve stress tests showed Goldman Sachs as being one of the weaker financial institutions on Wall Street.

The European Central Bank said it would maintain an easy monetary policy stance as long as needed.

Pension funds are re-evaluating the size of their investments in the insurance sector after Aviva's move to cut its dividend 44 percent.

Barclays CEO Antony Jenkins has told investors that he wants to find a way for the bank to operate with as few as 100,000 staff.

BP warned that the cost of its court settlement with businesses and individuals affected by the 2010 Gulf of Mexico oil spill would significantly exceed $7.7 billion.

Nokia has cut its Chief Executive's annual pay package by half.

Ten executives have resigned from coal miner Bumi Resources' board in a possible bid to separate the Bakrie family-linked company from London-listed parent Bumi Plc .

Canada

 THE GLOBE AND MAIL

* Alberta Premier Alison Redford has rolled out an austerity budget that halts spending growth, abandons many of her election promises and will return the province to a level of debt not seen for two decades.

* The Parti Quebecois government is cancelling an intensive English-language program in French elementary schools, fuelling the debate over the importance English should have in Quebec society.

* The Northwest Territories is about to take control of its own land, resources and water for the first time in its history, but former Premier Stephen Kakfwi says the transfer of power from Ottawa to Yellowknife could come at a cost to the environment and preservation of the land.

Reports in the business section:

* Bombardier Inc is taking a step toward a full-blown battle with aircraft giants Airbus SAS and Boeing Co, introducing a version of its new C Series plane that increases the number of seats to 160.

* The federal government issued new rules designed to help smaller players compete in the C$19 billion wireless telecom market, but the measures may not be enough to allow them to make substantial inroads against the industry's incumbents.

* Canadian Natural Resources Ltd is putting a quarter of its Montney natural gas assets up for sale or partnership, adding another big parcel of property in the British Columbia-Alberta region to the auction block.

NATIONAL POST

* Opposition MPs who sit on a key House of Commons committee are poised to ask the government to turn over key financial documents in the run-up to the federal budget.

* Ottawa's plan to bolster the navy's fleet nudged toward the drawing board on Thursday after it signed a contract to design the next generation of Arctic offshore patrol ships.

* The federal government has quietly conceded that it made a "drafting error" in its oft-criticized refugee legislation passed last June and it appears a new law may be the only way to fix it. A "note" posted on Citizenship and Immigration's website just above an explanation about Canada's new Refugee Appeal Division suggests the new provision, which allows certain failed asylum claimants to seek a second opinion, came into force four months before it was supposed to.

FINANCIAL POST

* While Canadian smartphone maker BlackBerry said it plans less expensive devices for emerging markets like India, the company has no plans to get into the $50 to $60 price range to compete with lower-cost Asian rivals.

China

CHINA SECURITIES JOURNAL

- Local governments are considering how to implement the central government's latest guidance on new controls on home mortgages, with detailed local regulations subject to approval by the central bank. Cities experiencing fast home prices are likely to raise the down payment requirement for second homes to 70 percent and the mortgage interest rate to 1.3 times the benchmark.

- China Banking Regulatory Commission chairman Shang Fulin said the risk from excessive local government debt is under control. Debt outstanding from local government financing platforms has risen only 2 percent over the last year and currently stands at 9.3 trillion yuan ($1.50 trillion).

CHINA BUSINESS NEWS

- In an exclusive interview, Zhou Xiaochuan, governor of the People's Bank of China, defended China's aggressive credit-led stimulus in response to the 2008 financial crisis but admitted that, in retrospect, officials may have waited a little too long to begin exiting the stimulus once the recovery began.

SHANGHAI SECURITIES NEWS

- China has delayed commercial production of genetically modified rice and corn in response to public fears, scientists from the Ministry of Agriculture said.

SHANGHAI SECURITIES NEWS

- Jiang Yang, vice chairman of the China Securities Regulatory Commission, said the commission is researching rules to allow IPOs for domestic futures companies as well as to permit foreign investment in these companies.

CHINA DAILY

- Qin Hong, a researcher from the Ministry of Housing and Urban-Rural Development and Jia Kang, a researcher with the Ministry of Finance, say new measures to enforce a capital gains tax on housing sales will be targeted at speculators, not ordinary owner-occupiers.

Fly on the Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Accuride (ACW) upgraded to Buy from Hold at BB&T
Con-way (CNW) upgraded to Buy from Hold at Deutsche Bank
Continental Resources (CLR) upgraded to Overweight from Neutral at JPMorgan
Delhaize Group (DEG) upgraded to Buy from Hold at Deutsche Bank
Heartland Payment (HPY) upgraded to Buy from Neutral at SunTrust
Identive Group (INVE) upgraded to Buy from Hold at C.K. Cooper
Lexington Realty (LXP) upgraded to Overweight from Equal Weight at Evercore
Memorial Production (MEMP) upgraded to Outperform from Market Perform at Wells Fargo
Navistar (NAV) upgraded to Overweight from Neutral at JPMorgan
Pandora (P) upgraded to Overweight from Neutral at Piper Jaffray
Phoenix New Media (FENG) upgraded to Buy from Hold at Deutsche Bank
Volcano (VOLC) upgraded to Outperform from Neutral at Credit Suisse
Yadkin Valley (YAVY) upgraded to Outperform from Market Perform at Raymond James

Downgrades

AVG Technologies (AVG) downgraded to Market Perform from Outperform at JMP Securities
Alexander & Baldwin (ALEX) downgraded to Equal Weight from Overweight at Evercore
New Mountain Finance (NMFC) downgraded to Hold from Buy at BB&T
Rockwell Automation (ROK) downgraded to Neutral from Outperform at Credit Suisse
Skullcandy (SKUL) downgraded to Underperform from Market Perform at Raymond James
Skullcandy (SKUL) downgraded to Underweight from Neutral at Piper Jaffray
Texas Roadhouse (TXRH) downgraded to Hold from Buy at KeyBanc
Tiffany (TIF) downgraded to Sell from Hold at Canaccord

Initiations

Kemper (KMPR) initiated with a Market Perform at JMP Securities
Nelnet (NNI) initiated with a Buy at Compass Point
Norwegian Cruise Line (NCLH) initiated with a Buy at Citigroup
TiVo (TIVO) initiated with an Overweight at Piper Jaffray
UIL Holdings (UIL) initiated with a Hold at Deutsche Bank
Whirlpool (WHR) initiated with a Buy at BofA/Merrill
ZAIS Financial (ZFC) initiated with a Buy at Deutsche Bank

HOT STOCKS

Fed said largest banks collectively in much stronger capital position
Sees only Ally Financial of banks tested with Tier 1 Common under 5% in worst case
KKR (KKR) reached deal to buy Gardner Denver (GDI) for $76 per share, DJ reports
Judge adjourns J.C. Penney (JCP), Macy's (M) Martha Stewart (MSO) case to April 8, CNBC reports. Judge wants them to go into mediation
Lionsgate (LGF), Universal (CMCSA), Disney (DIS), Warner Bros. (TWX) and Paramount (VIA) signed Digital Cinema Distribution Coalition agreements
Texas Instruments (TXN) said orders growing strongly quarter to date, building backlog
Quiksilver (ZQK) CEO: Revising our global organizational structure
Maxwell (MXWL) to restate financial results from FY11, FY12

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Dolan Co. (DM), Chesapeake Utilities (CPK), BPZ Resources (BPZ), WuXi PharmaTech (WX), Pandora (P), Medifast (MED), Cooper Companies (COO)

Companies that missed consensus earnings expectations include:
H&R Block (HRB), Thor Industries (THO), Quiksilver (ZQK), Emergent BioSolutions (EBS)

Companies that matched consensus earnings expectations include:
Corcept Therapeutics (CORT)

NEWSPAPERS/WEBSITES

• U.S. companies are showering investors with a record windfall in the form of dividends and share buybacks, helping to propel the stock market's rally. Companies in the S&P 500 index are expected to pay at least $300B in dividends in 2013, according to S&P Dow Jones Indices, the Wall Street Journal reports
• The prospects for Time Inc. (TWX) as an independent public company may not be too sunny. Its operating income has dropped by roughly half over the past five years, and analysts expect revenue and profit to keep falling this year as the industry struggles to regain advertising lost to the recession and the Web, the Wall Street Journal reports
• Bank of America (BAC) will seek more lending and cash management business with companies in Asia and elsewhere outside the U.S. says CEO Brian Moynihan, Reuters reports
• KKR (KKR), Carlyle Group (CG), Bain Capital and other private equity firms urged Japan's government to lower the role of state-backed funds, saying they could squeeze out opportunities for private capital and delay restructuring for troubled companies, Reuters reports
• Analysts at Standard & Poor’s (MHP), accused by the U.S. of misleading investors about the risks of mortgage bonds, were arguing the merits of their views on debt opinions, not committing fraud, says President Doug Peterson, Bloomberg reports
• Xstrata (XSRAY) CEO Mick Davis and CFO Trevor Reid may set up a privately backed mining fund after Glencore (GLNCY) takes over their company, sources say, Bloomberg reports

SYNDICATE

Apollo Residential Mortgage (AMTG) files to sell 6.8M shares of common stock
Arlington Asset Investment (AI) to offer 3M shares of Class A common stock
Atwood Oceanics (ATW) files automatic mixed securities shelf
BankUnited (BKU) 19.6M share Secondary priced at $25.25
Charter (CHTR) files to sell approximately 9.3M shares of common stock for holders
Del Frisco's (DFRG) 4.75M share Secondary priced at $17.00
Hercules Technology (HTGC) to offer 7M shares of common stock
NXP Semiconductors (NXPI) files to sell 25M shares of common stock for holders
Pharmacyclics (PCYC) commences offering of 2.2M shares of common stock
Pharmacyclics (PCYC) files automatic mixed securities shelf
Retail Properties of America (RPAI) announces $200M at the market offering of common
TherapeuticsMD (TXMD) files to sell $50M in common stock
Ventas (VTR) establishes $750M "at-the-market" offering of common stock

ACTIVIST/PASSIVE FILINGS

Icahn raises stake in Herbalife (HLF) to 15.55% from 13.6%
J.P. Morgan reports 11.1% passive stake in PBF Energy (PBF)
Lehman Brothers reports 11.5% passive stake in AvalonBay (AVB)
Lehman Brothers reports 9.57% passive stake in Equity Residential (EQR)

• Cardinals head to conclave to elect pope for troubled Church (Reuters)
• Hyperinflation 'Unthinkable' Even With Bold Easing: Abe (Nikkei)
• Ryan Plan Revives '12 Election Issues (WSJ)
• Republicans to unveil $4.6tn of cuts (FT) - Obama set to dismiss Ryan plan to balance budget within decade
• Italy 1-yr debt costs highest since Dec after downgrade (Reuters)
• CIA Ramps Up Role in Iraq (WSJ)
• Hollande Hostility Fuels Charm Offensive to Show He’s No Sarkozy (BBG)
• SEC testing customized punishments (Reuters)
• Judge Cans Soda Ban  (WSJ)
• Hungary Lawmakers Rebuff EU, U.S. (WSJ)
• Even Berlusconi Can’t Slow Bulls Boosting Euro View (BBG) - luckily the consensus is never wrong
• Funding for Lending ‘put on steroids’ (FT)
• Investigators Narrow Focus in Dreamliner Probe (WSJ)
• With new group, Obama team seeks answer to Karl Rove (Reuters)
• Boston Booms as Workers Say No to Suburbs (BBG)

Overnight Media Digest

WSJ

* Illinois settled Securities and Exchange Commission civil-fraud charges that the state misled municipal-bond investors by failing to adequately disclose the risks of its underfunded pension system.

* Lawmakers grilling Mary Jo White, President Barack Obama's nominee for chairman of the Securities and Exchange Commission, on Tuesday will have to weigh two seemingly contradictory versions of the attorney.

* U.S. aviation safety investigators examining Boeing Co's 787 Dreamliner increasingly are focusing on manufacturing or design problems with the batteries as possible causes of overheating rather than on other parts of the jet's electrical system, the head of the National Transportation Safety Board said on Monday.

* Starr International Co, run by the former chief executive of American International Group Inc, won the right to pursue as a class action its case against the U.S. government, alleging that elements of AIG's financial-crisis bailout package were unconstitutional.

* A crisis of confidence in the nuclear-power industry has trickled down to Namibia, where uranium accounts for 12 percent of exports. But uranium prices are down 70 percent over the past six years.

* General Motors Co is in the process of changing advertising agencies of its Cadillac brand. Advertising and marketing work to support Cadillac, valued at about $250 million, will be moved to longtime Michigan advertising agency Campbell Ewald, according to three people briefed on the matter.

* The monopoly powers of Mexico's telephone giant, América Móvil SAB de CV and leading broadcaster Grupo Televisa SAB, are coming under fire with a broad set of new laws that aim to open up the telecommunications and television businesses to competition.

* Many small U.S. banks are feeling a financial pinch from the government's efforts to punish executives and directors of banks that collapsed during the height of the financial crisis.

* KKR & Co LP is considering teaming with other private equity firms to pursue biotech firm Life Technologies Corp, according to people familiar with the matter, in the latest sign that buyout shops are still willing to form "clubs" if they covet a large target.

* VeriFone Systems Inc Chief Executive Douglas Bergeron is stepping down after a dozen years at the helm of the card-payment systems maker. The company said it will hire an executive-search firm to find a successor, with Chairman Richard McGinn serving as CEO on an interim basis.

FT

Dell Inc has agreed to give Carl Icahn a closer look at its books less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private.

Private equity firms are looking to buy the UK property business of Germany's second-biggest lender, Commerzbank AG, in a potential 5 billion pound ($7.45 billion) deal.

UK lender LLoyds Banking Group plans to sell 20 percent of its stake in wealth manager St James's Place

Alibaba Group has chosen Jonathan Lu, its Chief Data Officer who has more than a decade of experience in executive roles, to lead China's largest e-commerce company as it prepares to launch an initial public offering.

Italy's central bank has told some of the country's biggest banks to increase their bad loan provisions by an estimated 21 billion euros ($27.33 billion) amid deepening of a nearly two-year old recession.

Billionaire hedge fund manager John Paulson is exploring moving to Puerto Rico from New York to lower his tax bill.

Richard Joseph, a former futures trader, was convicted of six counts of insider trading, leaking information from the print room at JPMorgan Cazenove. Joseph placed spread bets with CMC Markets ahead of a series of deals in 2007 and 2008.

Mexico is looking to overhaul its telecom industry by introducing sweeping proposals that will increase competition and limit the control of telecoms tycoon Carlos Slim and broadcasting giant Televisa.

NYT

* For the second time in history, federal regulators have accused an American state of securities fraud, finding that Illinois misled investors about the condition of its public pension system from 2005 to 2009.

* A state court judge invalidated New York City's new restrictions on sweetened beverages on Monday, a day before they were set to take effect, saying the rules were "arbitrary and capricious."

* Britain, unlike other economic powers, is responding to the financial crisis by creating two new agencies, one to oversee institutions and another to watch for market abuses.

* In advance of a summit meeting of European Union leaders on Thursday in Brussels, the president of the European Commission, José Manuel Barroso, called on the bloc's 17 members to stay the course on austerity.

* Intrade, the online betting site, announced late on Sunday that it had halted trading and frozen customer accounts after the discovery of potential financial irregularities.

* Oppenheimer & Co will pay nearly $3 million to settle accusations by federal and state regulators that it misled investors about the performance of one of its private equity funds, in a case that signals stepped-up scrutiny of the buyout industry and how it values its holdings.

* Dell Inc has agreed to open its books to the activist investor Carl Icahn, signaling a possible truce on one front in the battle over the computer maker's proposed $24.4 billion buyout.

* In prepared testimony for her nomination hearing, Mary Jo White placed a premium on unearthing financial fraud, as she works to deflect concerns from lawmakers who question her ability to regulate banks she recently defended.

* British authorities have opened an investigation into Hewlett-Packard Co's claims that it was duped when it bought the business software maker Autonomy, according to regulatory documents filed on Monday.

Canada

THE GLOBE AND MAIL

* Ottawa and the Northwest Territories have reached a deal to hand the territory province-like power over its land, a move aimed at empowering local leaders to unlock more of their resource riches.

* Less than a third of the almost 300,000 members and supporters who signed up to choose the Liberal party's next leader have so far registered to vote, prompting front-runner Justin Trudeau's camp to complain about a host of technical glitches and request a one-week extension on registration.

* The federal government is facing questions over the legitimacy of its centerpiece for aboriginal education reform. Manitoba chiefs rejected the Harper government's vision for aboriginal education on Monday, claiming Ottawa is trying to "bypass" first nations chiefs and shirk its treaty responsibilities.

Reports in the business section:

* Chrysler Canada is jumping back into leasing for the first time since 2008, raising the competitive stakes another notch in an auto market already awash with financing and leasing incentives.

* AT&T Inc will begin selling BlackBerry's new BlackBerry Z10 smartphone next week, marking the smartphone's debut in a crucial U.S. market that has largely shunned the company's devices in recent years.

* Molson Coors Brewing Co's Canadian arm sold far less Miller Genuine Draft beer in the country over the past three years than the targets called for under its agreement with Miller Brewing Co. That under-performance - spelled out in court filings - is at the crux of a dispute that has erupted between the two companies, as Miller tries to cancel its Canadian licensing agreement with Molson.

NATIONAL POST

* The federal government, which has come under fire over tougher employment insurance (EI) rules, is sweetening benefits for parents. It says it will allow individuals receiving parental benefits through EI to qualify for sickness benefits as well, starting March 24.

* The latest annual report on federal ad spending shows Ottawa shelled out C$78.5 million ($76.5 million) in 2011-12 telling Canadians about everything from the switch to digital TV and the War of 1812, to elder abuse and anti-drug messaging. The Harper government spent C$21 million on major advertising campaigns under its Economic Action Plan brand.

* Despite activist claims that the city's homeless are dying due to a lack of shelter space, there is no shelter bed shortage in Toronto, according to an internal report prepared for city council.

FINANCIAL POST

* After years of growth, economists say the real estate boom is over and predict Canadian housing prices to flatline over the next decade. A TD Economics study, Long-Run Rate of Return for Canadian Home Prices, predicts a "string of lackluster performances" over the next few years.

* Alamos Gold Inc is going on the offensive in the takeover battle for Aurizon Mines Ltd, asking a securities regulator to reject both a break fee and poison pill that it believes are highly irregular.

* Travel tour operator Transat AT Inc said it has managed to wrest concessions from its flight attendants as the company continues its campaign to be more cost competitive. The bulk of the expected C$9 million in annual savings will come from Transat lowering the amount of flight attendants on its Airbus A330s to 10 from 11, and the move will also support a potential shift to a fleet of Boeing Co's 737s.

China

SECURITIES TIMES

-- Huatai Securities said on Tuesday its board of directors had sanctioned the issuance of no more than 10 billion yuan of corporate bonds on the Shanghai Stock Exchange to supplement operating funds.

-- The Shanghai securities regulator said five foreign banks, including Standard Chartered, have applied for licences to distribute mutual fund products in China.

CHINA SECURITIES JOURNAL

-- The Shanghai stock exchange is looking to invest more in regional stock exchanges to support smaller firms in China, its director general said on Monday.

CHINA DAILY

-- China's first special envoy for Asian affairs will have a focus on Myanmar, the Foreign Ministry said on Monday. There has been tension between China and its southern neighbour over conflict in Myanmar, close to the Chinese border.

-- Roughly one in ten of the 5,000 proposals submitted to China's top political advisory body since March 3 are related to environmental issues, said Lu Fuhe, a top national political advisor.

SHANGHAI DAILY

-- French firm Carrefour, the world's number two retailer, has implemented a system to allow shoppers to trace the origin of fruit and vegetables in their Chinese stores in Shanghai, a reflection of the recent pressure in China over food safety.

CHINA BUSINESS NEWS

-- The number of dead pigs found in the Huangpu River, one of Shanghai's key water sources, is now estimated to have increased to 2,800.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Axiall (AXLL) upgraded to Buy from Neutral at Citigroup
Dick's Sporting (DKS) upgraded to Outperform from Market Perform at BMO Capital
Dick's Sporting (DKS) upgraded to Conviction Buy from Buy at Goldman
Intercontinental Hotels (IHG) upgraded to Neutral from Sell at UBS
Mosaic (MOS) upgraded to Outperform from Market Perform at BMO Capital
Sherwin-Williams (SHW) upgraded to Neutral from Underperform at Credit Suisse
Vantiv (VNTV) upgraded to Outperform from Market Perform at Raymond James
Vitamin Shoppe (VSI) upgraded to Buy from Neutral at Goldman

Downgrades

CVS Caremark (CVS) downgraded to Neutral from Buy at Goldman
EverBank Financial (EVER) downgraded to Neutral from Buy at Sterne Agee
RadioShack (RSH) downgraded to Sell from Neutral at Goldman
Red Hat (RHT) downgraded to Neutral from Buy at Citigroup

Initiations

Fifth & Pacific (FNP) initiated with a Buy at Brean Capital
Rush Enterprises (RUSHA) initiated with a Market Perform at BMO Capital
TJX (TJX) initiated with an Overweight at Barclays
Wabash (WNC) initiated with an Outperform at BMO Capital
WABCO (WBC) initiated with an Outperform at BMO Capital
Xoom (XOOM) initiated with an Outperform at RW Baird
Xoom (XOOM) initiated with an Overweight at Barclays

HOT STOCKS

SEC charged Illinois for misleading pension disclosures
Treasury Department sold $489.9M of GM (GM) common stock in February
HP (HPQ) disclosed U.K Serious Fraud Office opened investigation related to Autonomy
KKR (KKR) has considered teaming to bid for Life Technologies (LIFE), and Thermo Fisher (TMO) and Danaher (DHR) also weigh bids for Life, valued at $12.5B with debt, DJ reports
Diamond Foods (DMND) sees second half sales down more than first half
Rio Tinto (RIO) slowed Guinea iron ore investment, to cut staff, Reuters reports
Said Guinea iron ore project not frozen, to work with government on funding, Bloomberg reports
Hill International (HIL) sees FY13 consulting fee revenue $500M-$520M
Cadence Design (CDNS) acquired Tensilica for $380M in cash
Pall Corp (PLL) signed 30 year agreement to supply Embraer (ERJ) with KC-390 manifolds
MRC Global (MRC), NAWAH entered into alliance to open distribution facility in Iraq
Lakeland Industries (LAKE) reported $11.5M goodwill impairment charge in Brazil

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Costco (COST), BioScrip (BIOS), Stewart Enterprises (STEI), XenoPort (XNPT), Heckmann (HEK)

Companies that missed consensus earnings expectations include:
Stage Stores (SSI), FuelCell (FCEL), Chiquita Brands (CQB), Hill International (HIL), Casey's General Stores (CASY), Urban Outfitters (URBN)

Companies that matched consensus earnings expectations include:
Douglas Dynamics (PLOW), Flow International (FLOW), Manitex (MNTX)

NEWSPAPERS/WEBSITES

• Multinationals (GE, HPQ, CAT, HON) have been increasing their footprint in Asia for years as they have moved from selling into the region to also investing here. But the transformation is gaining critical mass as Western companies' market-share leads in Asia over cash-flush local competitors narrow, forcing Western firms to invest more, tailor their products and transfer top executives to Asia, the Wall Street Journal reports
• Rising fuel prices have GM (GM) and Chrysler Group (FIATY) taking another look at selling smaller pickup trucks—vehicles that the Detroit Three automakers (F) abandoned in the U.S. amid weak demand. Both see the vehicles helping them to hit higher fuel-economy targets and to regain market share from Toyota (TM), the current top-selling small hauler., the Wall Street Journal reports
• Two groups of AIG (AIG) shareholders won class-action status from a federal judge on in a $25B lawsuit by former CEO Maurice "Hank" Greenberg over alleged losses caused by the U.S. government's bailout of the insurer, Reuters reports
• As the jobs market showing signs of healing, economists think they know what's next for monetary policy: the Fed will at some point reduce its monthly bond purchases, and soon after, end them altogether. But perhaps they shouldn't be so sure, Reuters reports
• Shares of companies that own and operate their truck fleets (WERN, KNX, SWFT, HTLD) are outperforming those that act as brokers for trucking services, driven by stronger U.S. freight activity, Bloomberg reports
• The Treasury Department, exiting its ownership stake in GM (GM), accelerated its sell- down of the automaker in February, saying it received $489.9M in proceeds from the sale of common shares, Bloomberg reports

SYNDICATE

Emeritus (ESC) announces 7.97M share secondary offering by holders
Government Properties (GOV) 9.95M share Spot Secondary priced at $25.20
HeartWare (HTWR) announces public offering of 1.5M shares of common stock
Lexington Realty (LXP) files to sell 15M shares of common stock
Salesforce.com (CRM) announces proposed $1B offering of convertible senior notes
Sapiens (SPNS) files to sell $40M of common stock, 6M shares for holders
Sun Communities (SUI) announces 4.5M share common stock offering
U.S. Silica (SLCA) announces 8.5M share secondary offering by stockholder
Yandex (YNDX) announces 24.25M Class A ordinary shares offering by holders

• Cypriot Bank Levy Is ‘Ominous’ for Bondholders, Barclays Says (BBG)
• Euro, Stocks Drops; Gold, German Bonds Rally on Cyprus (BBG)
• Total chaos:Cyprus tries to rework divisive bank tax (Reuters)
• More total chaos: Cyprus Prepares New Deposit-Tax Proposal (WSJ)
• Euro Slides Most in 14 Months on Cyprus Turmoil; Yen Strengthens (BBG)
• Osborne to admit fresh blow to debt target (FT)
• Even the Finns are giving up: Finnish Government May Relinquish Deficit Target to Boost Growth (BBG)
• Moody’s Sees Defaults as PBOC Warns on Local Risks (BBG)
• Australia Faces ‘Massive Hit’ to Government Revenue, Swan Says (BBG)
• Inside a Warier Fed, Watch the New Guy (Hilsenrath)
• Obama to Tap Perez for Labor Secretary (WSJ) - and with that the "minorities" quota is full
• Finally, this should be good: BuzzFeed to Launch Business Section (WSJ)

Overnight Media Digest

WSJ

* The U.S. Justice Department trustee overseeing the bankruptcy case of American Airlines parent AMR Corp on Friday filed court papers objecting to certain employee wage increases, as well as a proposed $19.9 million exit package for AMR's chief executive, which are part of AMR and US Airways Group Inc's merger plan.

* The Philippines this weekend launched its bid to become Asia's third gambling hub with the opening of the Solaire, a $1.2 billion casino. Asia is battling the United States for supremacy in the global gambling market.

* U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions, according to people familiar with the probes.

* The Pentagon overrode a politically charged protest from Kansas defense contractor Beechcraft Corp and will work with Sierra Nevada Corp and the defense unit of Brazil's Embraer SA on a $427.5 million contract to build 20 planes for the Afghan air force.

* Many workers who were offered a sum of money to spend on healthcare opted for lower-priced plans that required them to pay more out of their pockets for healthcare.

* Verizon Communications is proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.

* Directors of Transocean Ltd are urging shareholders to reject a campaign by activist investor Carl Icahn to increase the offshore-oil-rig company's dividend and name three new members to the board.

* Toronto-based generic-drug maker Apotex Inc has added an extra dose of tension to a drug-industry case involving patent settlements between brand-name companies and generic rivals to delay the potential introduction of copycat pills.

* Booming coffee demand in India is prompting companies like Lavazza SpA, Nestlé SA and Starbucks Corp to set up shop in the traditionally tea-drinking subcontinent, offering growth when returns are harder to come by in more developed markets. Rising consumption in India also is likely to pressure coffee prices.

* The Securities and Exchange Commission is filing significantly fewer civil fraud cases this year, as its efforts to punish misconduct related to the financial crisis start to ebb.

* Volkswagen AG's China unit said it would voluntarily recall cars suspected of having substandard direct-shift gearbox systems, following scrutiny from China's national state-run television broadcaster and after receiving a notification from China's quality watchdog

FT

British finance minister George Osborne is expected to admit in Wednesday's budget that it will take even longer than previously forecast for public sector debt to begin to fall.

Cyprus was in talks with international lenders on Sunday to change the terms of proposed levy on bank deposits demanded as a condition for a bailout.

Thousands of jobs could be cut at HSBC, as Europe's largest bank prepares to unveil the next stage of its strategic overhaul at an investor day meet in two month's time.

Offshore drilling contractor Transocean will formally reject a plan from activist investor Carl Icahn that demands the company to pay a higher dividend and appoint three new directors.

The government is set to pledge ahead of Wednesday's budget, a significant investment into UK's aerospace industry as part of its long-term strategy to spur growth and keep the industry ahead of international competition. European banks will need to trim as much as another 3.4 trillion euros from their balance sheets over the coming years, according to new data, raising fears about a funding gap opening for European companies.

Highbridge Capital, the hedge fund owned by JPMorgan Asset Management, has closed the books on a new $5 billion 'mezzanine' fund, the biggest in six years and the third largest yet. The International Monetary Fund said on Sunday it would continue talks with Egypt on possible financial aid over the coming weeks.

NYT

* A decision to impose across-the-board losses on Cypriot depositors as part of a $13 billion bailout has set off increasing outrage and turmoil and fueled fears that bank runs there could spread to countries like Spain and Italy.

* An uncomfortable spotlight has swung back on Jamie Dimon, the influential chief of JPMorgan Chase & Co, as the trading hearing and the Senate panel's report on Friday detailed his role in the trading blowup, potentially creating fresh challenges for a chief executive long praised for his risk-management prowess.

* SAC Capital Advisors sees the $616 million fine as a victory, a good price for peace. Others say the Securities and Exchange Commission could have done far worse to a financier of Steven Cohen's means.

* Matthew Keys, the 26-year-old deputy social media editor at Reuters.com charged with assisting computer hackers, has emerged as the latest lightning rod in the continuing battle between proponents of internet freedom and the Justice Department.

* Each time in recent years that the Federal Reserve has paused in its efforts to stimulate the economy, it has come to regret the decision as premature. Its leading officials say the recovery has been slower as a consequence of those pauses. It is a mistake they do not want to repeat.

* The U.S. government's inquiry into News Corp broadened last year when the Justice Department investigated claims that employees in the China news bureau of The Wall Street Journal bribed local officials with gifts in exchange for information.

* Prominent state attorneys general are calling on President Obama to fire the acting director of the Federal Housing Finance Agency and name a new permanent director, arguing that current policies are impeding the economic recovery.

* With shorter stories and scarce coverage of politics and government, local television newscasts in the United States, like local newspapers before them, are suffering from "shrinking pains," according to the Pew Research Center.

Canada

THE GLOBE AND MAIL

* Canada's Justice Minister Rob Nicholson says there is "no question" that the series of criminal justice reforms his government has introduced will stand up to constitutional tests, despite allegations that his department's vetting standards are inadequate.

* Police have tracked down and arrested four men they say were responsible for a daring helicopter escape from a Quebec prison. Two men, one with alleged biker-gang affiliations, clung to a hijacked helicopter as it lifted off from a detention center in St-Jerome, Quebec, 60 kilometres northwest of Montreal, on Sunday afternoon, touching off a manhunt by land and air.

Reports in the business section:

* Mall wars have stepped up among major landlords as they try to lure large anchor tenants, reflecting a new era for department stores in Canada.

Cadillac Fairview Corp and Oxford Properties Group are fighting to snare potentially lucrative department-store retailers, including Nordstrom Inc of Seattle, Toronto-based Holt Renfrew & Co and Quebec-based La Maison Simons, which generate above-average industry sales.

* They are flipping burgers or driving trucks, sorting the mail, going back to school or still searching for work. And while the job market looks bleak, with many positions offering low pay on a casual or temporary basis, just 20 of the 465 unionized workers who lost their jobs a year ago - when Caterpillar Inc shuttered Electro-Motive Diesel, a London, Ontario, locomotive plant - have relocated.

NATIONAL POST

* The Alberta government, continuing to press its case for the Keystone XL pipeline, took out an ad in Sunday's New York Times newspaper, tying the controversial project to core American values and to U.S. pride in its military.

* It's been more than two years since mayor Naheed Nenshi became the cuddly creature in charge of Calgary. One of North America's first Muslim mayors, approval ratings place his popularity so high in the public mind that the thought of a serious challenger taking him on in this fall's municipal election seems like a political kamikaze mission.

China

PEOPLE'S DAILY

-- A commentary says remarks made by a new generation of Chinese leaders elected in the annual session of China's parliament, the National People's Congress, ended on Sunday and signal a focus in ruling the country by laws and respect of the people.

CHINA SECURITIES JOURNAL

-- The Bank of China Ltd said its chairman Xiao Gang had resigned to take over another financial leadership role. Earlier, news reports said Xiao, 54, had been appointed head of the China Securities Regulatory Commission (CSRC).

-- The Shanghai Stock Exchange will permit T+0 trading in bond exchange traded funds (ETFs) starting on Monday, paving the way for a resumption of a comprehensive T+0 trading system, in which investors can buy and sell securities on the same day. China suspended the system in 1995 to curb rampant speculation.

SHANGHAI SECURITIES NEWS

-- Under new rules, the CSRC will allow qualified securities brokerages to let staff hold options to boost their performance. It will also allow mutual funds to use third-party over-the-counter platforms to sell their products.

CHINA DAILY

-- Commercial property and office building sales in China's capital, Beijing, surged 320.5 percent in the first 10 days of March, in response to the government's new measures to cool down the real estate sector.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Best Buy (BBY) upgraded to Overweight from Neutral at JPMorgan
Community Health (CYH) upgraded to Buy from Hold at Jefferies
Hanover Insurance (THG) upgraded to Outperform from Market Perform at Keefe Bruyette
Health Management (HMA) upgraded to Buy from Hold at Jefferies
Methanex (MEOH) upgraded to Buy from Hold at Jefferies
ON Semiconductor (ONNN) upgraded to Buy from Neutral at Goldman
Office Depot (ODP) upgraded to Buy from Hold at KeyBanc
OfficeMax (OMX) upgraded to Buy from Hold at KeyBanc
Synaptics (SYNA) upgraded to Buy from Hold at Needham
United Technologies (UTX) upgraded to Buy from Neutral at Citigroup
ValueClick (VCLK) upgraded to Buy from Hold at Jefferies
Verizon (VZ) upgraded to Buy from Neutral at Citigroup
Vodafone (VOD) upgraded to Buy from Neutral at Citigroup
Watsco (WSO) upgraded to Buy from Neutral at SunTrust

Downgrades

Actavis (ACT) downgraded to Market Perform from Outperform at Wells Fargo
Adtran (ADTN) downgraded to Neutral from Buy at Mizuho
AmerisourceBergen (ABC) downgraded to Neutral from Buy at UBS
Black Hill (BKH) downgraded to Sector Perform from Outperform at RBC Capital
Carnival (CCL) downgraded to Neutral from Outperform at Exane BNP Paribas
CenterPoint Energy (CNP) downgraded to Underperform from Neutral at Credit Suisse
J.M. Smucker (SJM) downgraded to Sell from Neutral at Goldman
Kimberly Clark (KMB) downgraded to Sell from Neutral at Goldman
Northern Tier (NTI) downgraded to Hold from Buy at Dahlman Rose
Novo Nordisk (NVO) downgraded to Underweight from Neutral at JPMorgan
Progressive (PGR) downgraded to Underweight from Equal Weight at Evercore
Teva (TEVA) downgraded to Market Perform from Outperform at Wells Fargo

Initiations

Boise Cascade (BCC) initiated with a Hold at Deutsche Bank
Boise Cascade (BCC) initiated with a Neutral at Goldman
Charles River Labs (CRL) initiated with a Neutral at BofA/Merrill
Covance (CVD) initiated with a Buy at BofA/Merrill

HOT STOCKS

Transocean (RIG) board rejected Icahn proposal for dividend, director nominees
Dell (DELL) said Shareholder Forum is seeking all the information made available to Icahn for "improper purposes," rejects demand
Constellation Brands (STZ), Anheuser-Busch InBev (BUD), Grupo Modelo (GPMCF) and Crown Imports said substantial progress in discussions with DOJ
Sharp (SHCAY), Qualcomm (QCOM) deal missed deadline, second capital injection delayed
Ericsson (ERIC), STMicroelectronics (STM) agreed to split up joint venture ST-Ericsson
Boeing (BA) selected GE (GE) as engine partner for 777X studies
Suntech (STP) announced that it didn't make payment on convertible notes due 2013
Phoenix Companies (PNX) filed to delay 10-K, to provide update before April 30
WPP (WPPGY) made strategic investment in SFX Entertainment

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Horizon Pharma (HZNP), Horizon Pharma (HZNP)

Companies that missed consensus earnings expectations include:
Sterling Construction (STRL), Essex Rental (ESSX)

NEWSPAPERS/WEBSITES

• U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions--known as wash trades--sources say. They’re banned by U.S. law because they can feed false information into the market and be used to manipulate prices, the Wall Street Journal reports
• Growing coffee demand in India is prompting international companies such as Lavazza SpA,  Nestle (NSRGY) and Starbucks (SBUX) to set up shop in the traditionally tea-drinking subcontinent, offering growth when returns are harder to come by in more developed markets, the Wall Street Journal reports
• The tarnished Libor interest rate benchmark should be replaced with a range of reference rates based on actual market transactions by banks, a global group of central bankers said today, Reuters reports
• S&P sees a high risk that Spain, Italy, Portugal and France won’t be able to carry through necessary reforms as the unemployed become less willing to put up with austerity, says the firm’s Germany head Torsten Hinrichs, Reuters reports
• The euro fell the most in 14 months against the dollar after an unprecedented levy on bank deposits in Cyprus threatened to push Europe back into crisis, Bloomberg reports
• Teen clothing chain Aeropostale (ARO) is offering the biggest sales discount in the country for private-equity firms seeking a deal. The company valued at 0.46 times its revenue in the last year, the cheapest among similar-sized U.S. specialty-apparel retailers, according to Bloomberg data.

BARRON’S

BofA (BAC), Wells Fargo (WFC) and holders are biggest winners of Fed review
Dick's Sporting Goods (DKS) will get back on track
Pantry's (PTRY) drop in price could be an opportunity for investors
Globe Specialty Metals (GSM) vulnerable to another drop in share price
Samsung's (SSNLF) S4's hardware is impressive but software erratic
Zoetis (ZTS, PFE) has good outlook but stock looks too expensive
Cabot Oil & Gas (COG), Avis Budget (CAR), Valero (VLO) could be the next Apple (AAPL)

SYNDICATE

Fiesta Restaurant (FRGI) files to sell 2.5M shares for Jefferies Capital Partners
Fly Leasing (FLY) files to sell 2.19M American depositary shares for holders
RDA Microelectronics (RDA) files to sell 8.25M American depositary shares for holders

• Cyprus Salvaged After EU Deal Shuts Bank to Get $13B (BBG)
• Last-minute Cyprus deal to close bank, force losses (Reuters)
• Anxious, angry Cypriots face uncertain future (Reuters)
• Spain Brings the Pain to Bank Investors (WSJ)
• First Switzerland now... U.S. Seeks Answers in Liechtenstein on Tax Cheats (BBG)
• Rebel Free Syrian Army founder loses leg in Syria blast (Reuters)
• European Stocks Rise on Cyprus Deal as Italian Bonds, Crude Gain (BBG)
• Michael Dell Likely to Sweeten Buyout Bid to Save Legacy (BBG)
• Bankers’ pay premium is narrowing (FT)
• Surgery Restoring Penis After Prostate Cancer Increasing (BBG)
• Silent or supportive, conservatives give gay marriage momentum (Reuters)

Overnight Media Digest

WSJ

* Cyprus secured a bailout from its international creditors early on Monday, ending a week of financial panic that threatened to see the small island nation become the first government to leave the euro zone.

* The euro surged against other major currencies on Monday in Asia trading after Cyprus secured a bailout from its international creditors.

* China Petroleum & Chemical Corp agreed to form a joint venture that will acquire $3 billion in oil and gas assets held by its state-owned parent in countries including Kazakhstan, Colombia and Russia. ()

* Apple Inc has acquired the indoor-GPS company WifiSLAM for about $20 million, a sign that a war over indoor mobile-location services is heating up.

* The Spanish government will impose heavy losses on investors at nationalized banks and hire external advisers to help it manage these banks' assets, its latest efforts to overhaul a financial sector battered by the collapse of a decadelong housing boom.

* JaguarLand Rover, which is owned by India's Tata Motors Ltd, on Sunday strongly denied it is preparing to raise $1 billion from Chinese investors with a bond issue in Beijing or Shanghai later this year.

* Private equity firm Gordon Brothers Europe agreed to buy the British arm of DVD-rental firm Blockbuster LLC, which had entered a form of bankruptcy in January.

* Some former partners of Howrey LLP have agreed to spend the next several months in settlement talks to avoid litigation over the defunct law firm's 2011 collapse.

FT

Cyprus, the European Union and the International Monetary Fund reached a tentative agreement that would lead to the shutting down of the country's second largest bank, according to EU officials.

British Police found no evidence of third-party involvement during searches of former Russian oligarch Boris Berezovsky's home near London on Sunday, but the tycoon's death remained shrouded in mystery.

Dell Inc appeared to have received competing offers following a $24.4 billion agreement last month under which it would be taken private by its founder Michael Dell and private equity firm Silver Lake, setting up a tug-of-war for the world's No. 3 PC maker.

Blockbuster's chain of film and computer game rental shops in Britain has been sold to Gordon Brothers Europe for an undisclosed sum, two months after the struggling retailer went into a form of bankruptcy protection.

French drinks maker Pernod Ricard will report an annual decline in Scotch whisky sales in China after years of growth.

Pakistan's former President, Pervez Musharraf, returned home on Sunday after nearly four years of self-imposed exile apparently to contest elections despite the possibility of arrest and death threats from the Taliban.

NYT

* After hours of meetings in Brussels, European officials agreed to a deal to rescue Cyprus that would drastically reduce the size of the country's banking sector and scrap the controversial tax on bank deposits.

* Private equity firm Blackstone Group LP and investor Carl Icahn have each separately submitted preliminary takeover proposals for Dell Inc, the embattled computer maker.

* News Corp wants the U.S. Federal Communications Commission to waive a ban on consolidation between TV stations and newspapers in local markets, but it is not without setbacks.

* At the U.S. Supreme Court on Monday, generic and brand-name drug companies will be arguing against the federal government on whether the maker of a brand-name drug can pay a generic-drug company to keep the generic version off the market.

* Bausch & Lomb Inc, the eye-care company, said in an initial public offering registration filing that Warburg Pincus LLC would continue to own a majority of the stock after the offering.

* Wall Street is taking America's biggest pension fund Calpers to court this week, for a long-awaited battle over who takes the losses when a city goes bust - workers and retirees, municipal bondholders, or both.

* Taking a page from China, the United States is now scouring high schools for hackers with an eye to bringing them along to one day defend the nation from foreign attack.

* Web-publisher Spin Media LLC will introduce technological improvements to encourage readers to linger and to track them as they move from one device to another

Canada

THE GLOBE AND MAIL

* Canada's credit unions, an often overlooked corner of the financial sector, are about to get a lot more vocal and aggressive as they attempt to take market share from the big banks, while also fighting Ottawa on controversial tax changes that threaten their business.

* Not a single new casino has been built yet in Ontario, but government plans for increasing the number of gambling establishments have slashed the financial worth of existing casinos, resulting in the loss of millions of tax dollars for several municipalities.

Reports in the business section:

* BlackBerry investors will get a clear view of whether the sleek, touchscreen devices - hailed as the best BlackBerrys ever - are tumbling from store shelves in enough numbers to bolster the company's flagging sales.

NATIONAL POST

* If money talks, then it's saying Justin Trudeau has a lock on the federal Liberal leadership while Joyce Murray and Martha Hall Findlay are fighting over who'll finish second. His team has told The Canadian Press it will show Trudeau has pulled in just over $1 million since launching his campaign last October.

* As the 20 patients in Pisa, Italy, waited to undergo thyroid surgery, they descended into unconsciousness thanks to a cocktail of anaesthetic drugs delivered from a surprising destination.

The infusion machines in Pisa were controlled remotely by specialists in Montreal, a unique experiment in "transcontinental anaesthesia" that could eventually make operations safer in isolated communities, a new study indicates.

FINANCIAL POST

* Without much fanfare, WestJet Airlines Ltd has been quietly rolling out some strategic changes to its fleet of Boeing 737s in recent weeks, altering the cabin configuration fairly dramatically to add a new class of seating, all the while packing in more travelers in the rest of its planes

China

PEOPLE'S DAILY

-- Chinese President Xi Jinping's visit to Russia last week has strengthened comprehensive and strategic cooperation between the two world powers.

CHINA SECURITIES JOURNAL

-- The China Banking Regulatory Commission has warned banks to pay more attention to risk while lending to nine sectors, including real estate, machinery engineering, steel, wind power equipment and photovoltaic industry, which the regulator said have been suffering from overcapacity.

-- Several institutions expect Chinese regulators to cut domestic gasoline and fuel prices as early as March 27, which would be the first such cut in China this year.

SHANGHAI SECURITIES NEWS

-- Shareholders of Wuhan Iron and Steel Co Ltd have approved a plan to raise 15 billion yuan ($2.4 billion) via a private placement of shares to purchase mineral assets from its parent firm.

-- The China Insurance Regulatory Commission has raised the threshold for insurance companies to set up branches.

CHINA DAILY

-- Foreign telecom companies are keen to join China's fourth generation (4G) mobile network deployment with the country looking likely to issue licenses as early as this year.

-- China may see an increase in property transactions involving international investors this year, fuelled by the country's economic recovery and the promising outlook of its real estate market, industry experts said.

Fly on the Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Aixtron (AIXG) upgraded to Hold from Sell at Canaccord
Allstate (ALL) upgraded to Buy from Neutral at Goldman
Array BioPharma (ARRY) upgraded to Overweight from Neutral at Piper Jaffray
Endocyte (ECYT) upgraded to Outperform from Neutral at RW Baird
Royal Bank of Scotland (RBS) upgraded to Neutral from Sell at Goldman
Rubicon (RBCN) upgraded to Buy from Hold at Canaccord
Saul Centers (BFS) upgraded to Outperform from Neutral at RW Baird
Veeco (VECO) upgraded to Buy from Hold at Canaccord
W. R. Berkley (WRB) upgraded to Neutral from Sell at Goldman

Downgrades

AXIS Capital (AXS) downgraded to Neutral from Buy at Goldman
Airgas (ARG) downgraded to Underperform from Neutral at BofA/Merrill
BlackBerry (BBRY) downgraded to Neutral from Buy at Goldman
Finish Line (FINL) downgraded to Underperform from Neutral at Sterne Agee
J.C. Penny (JCP) downgraded to Underperform from Market Perform at BMO Capital
Lear (LEA) downgraded to Buy from Conviction Buy at Goldman
Life Technologies (LIFE) downgraded to Neutral from Buy at Citigroup
PartnerRe (PRE) downgraded to Sell from Neutral at Goldman
Patterson-UTI (PTEN) downgraded to Market Perform from Outperform at Raymond James
RenaissanceRe (RNR) downgraded to Sell from Neutral at Goldman
SPX Corp. (SPW) downgraded to Hold from Buy at Deutsche Bank
SPX Corp. (SPW) downgraded to Neutral from Overweight at JPMorgan
Sigma-Aldrich (SIAL) downgraded to Underperform from Neutral at BofA/Merrill
Textron (TXT) downgraded to Neutral from Overweight at JPMorgan
Virtusa (VRTU) downgraded to Neutral from Overweight at JPMorgan
WABCO (WBC) downgraded to Neutral from Overweight at JPMorgan
Whole Foods (WFM) downgraded to Neutral from Overweight at Piper Jaffray

Initiations

Bristow Group (BRS) initiated with an Overweight at JPMorgan
Comcast (CMCSA) reinstated with a Buy at Goldman
Coronado Biosciences (CNDO) initiated with a Buy at Canaccord
Corporate Executive Board (CEB) initiated with a Buy at SunTrust
Eagle Rock Energy (EROC) coverage resumed with a Market Perform at Wells Fargo
Galena Biopharma (GALE) initiated with a Buy at Needham
Lexington Realty (LXP) initiated with a Hold at KeyBanc
Rentech Nitrogen (RNF) initiated with a Neutral at Goldman

HOT STOCKS

The Eurogroup reached an agreement with the Cypriot authorities on key elements necessary for a future macroeconomic adjustment program
Dell (DELL) to negotiate with Carl Icahn and Blackstone (BX), CNBC reports
Vanguard Health’s (VHS) Phoenix, Arizona health plan subsidiary received a letter from the Arizona Health Care Cost Containment System that it was not awarded an acute care program contract for the program year commencing October 1
Actavis (ACT) reached an agreement with AstraZeneca (AZN) to launch generic Crestor in 2016
Sinopec’s (SNP) board passed a resolution to form a $3B, 50:50 joint venture between the two wholly-owned subsidiaries of the company and the company

EARNINGS/GUIDANCE

Companies that missed consensus earnings expectations include:
JA Solar (JASO)

NEWSPAPERS/WEBSITES

• Dell’s (DELL) financial services unit could be valued at about $5B in a sale, sources tell the Wall Street Journal, adding that General Electric's (GE) financial services unit has been viewed as the likely buyer of the Dell unit. Blackstone's (BX) expression of interest in Dell is said to include partly financing any deal by selling Dell’s financial services arm.
• BlackBerry's (BBRY) all-touchscreen Z10, which has been seen as critical to help resurrect the company's standing in the market, went on sale in the U.S. Friday at AT&T (T) stores, but the launch has so far failed to garner the buzz of competitors' recent smartphone launches, the Wall Street Journal reports.
• Vodafone (VOD) is said to be forming a deal to sell its entire share in Verizon Wireless, its venture with Verizon Communications (VZ), netting it as much as $135M, or GBP88.6M, the Telegraph reports.
• A security hole at Apple (AAPL) would allow anyone to reset your password with an email address and date of birth, reports The Verge.

SYNDICATE

Bausch & Lomb (BOL) files IPO for $100M in common stock
PGT, Inc. (PGTI) files to sell common stock
RDA Microelectronics (RDA) announces offering of 8.35M ADS

• Berezovsky Died of Hanging Without Struggle, Police Say (BBG)
• BRICS Nations Plan New Bank to Bypass World Bank, IMF (BBG)
• China pledges more investments to Africa (FT)
• BOJ's Kuroda signals targeting longer-dated JGBs (Reuters)
• North Korea orders artillery to be combat ready, targeting U.S. bases (Reuters)
• Supreme Court to take up gay marriage for the first time (Reuters)
• U.S. Cracks Down on 'Forced' Insurance (WSJ)
• Japanese courts press Abe on electoral reform (FT)
• Vietnam accuses China of attack on fishermen in South China Sea (Reuters)
• Italy's High Court Overturns Knox Acquittal (WSJ)
• Facebook’s Zuckerberg Said to Explore Forming Political Group (BBG)

Overnight Media Digest

WSJ

* Dell Inc said it received two alternative acquisition proposals from Blackstone and activist investor Carl Icahn, following a $24.4 billion deal last month to be taken private by founder Michael Dell.

* The BlackBerry Z10 phone from BlackBerry has received tepid marketing support from AT&T since its debut in stores on Friday, dealing the company an early setback in its drive to improve sales in the crucial U.S. market.

* Boeing Co began the first in a series of 787 Dreamliner test flights on Monday, preparing for regulators to evaluate changes to its lithium-ion battery system and marking another step in the plane maker's effort to return the jet to commercial service.

* Centrica Plc, one of the UK's main energy providers, has signed a deal to buy billions of cubic meters of liquefied natural gas from a U.S. plant, in the first deal clearly intended to bring gas from North America to the UK.

* The U.S. Department of Transportation proposed a $1.7 million fine against Exxon Mobil Corp for failing to properly prepare for what the department says were known flooding risks to one of its pipelines that ruptured in 2011 and spilled 1,500 barrels of crude into Montana's Yellowstone River.

* T-Mobile USA has become the first major wireless carrier in the United States to drop smartphone subsidies, moving away from a model that has helped companies like Apple Inc bank large profits at a steep cost to carriers' margins.

* Oracle Corp on Monday said it agreed to acquire telecommunications software provider Tekelec, continuing a recent effort to profit from the explosion of smartphones and tablet computers burdening carriers' networks.

* Beijing-based Li Ning Co Ltd said in a statement to the Hong Kong Stock Exchange that it plans to downsize after reporting a $318.8 million loss for 2012 and a 25 percent drop in revenue.

* Online video site Hulu has had talks with several potential buyers including Guggenheim Partners, one of several options the company, owned by News Corp and Walt Disney Co, is considering as it tries to resolve uncertainty about its strategic direction.

* A Kuwaiti sheik alleges that a senior executive at Switzerland's UBS AG offered $20 million to get the bank an advisory role on one of the biggest-ever acquisitions in the Middle East, but the bank later backed out of the deal, according to the sheik's testimony in a Dubai court case.

* Canada's Bombardier Inc has condensed its production plans for a second, larger version of its CSeries jetliners to try to keep its tight schedule for the first deliveries of the new planes, according to people familiar with the matter.

* Law firm Howrey LLP was in a "death spiral" for nearly two years, according to new lawsuits that claim the firm's partners didn't seem to know the depth of its financial problems.

FT

Fund manager Schroders Plc is to pay 424 million pounds ($646 million) for smaller rival Cazenove Capital, as it moves to bulk up its private banking arm running money for wealthy clients. Michael Dell is willing to explore the possibility of working with Blackstone Group LP and Carl Icahn regarding alternative offers for Dell

U.S. regulators approved Nasdaq OMX Group's $62 million compensation plan for firms that lost money in Facebook Inc's glitch-ridden market debut.

Yahoo Inc has snapped up mobile news aggregator Summly, founded by 17-year-old Nick D'Aloisio two years ago from his home in London.

Cynthia Carroll, the outgoing chief executive of Anglo American , warned mining industry shareholders to either get out of the sector or adjust their expectations.

Dutch package delivery firm TNT Express said the sale process of its Chinese business is underway and that it is pursuing the sale of its Brazilian arm.

Britain's Centrica Plc signed a long-term deal to import U.S. natural gas at a time when the domestic gas production continues to decline while U.S. output hits record highs.

NYT

* Michael Dell considers Blackstone Group LP's preliminary proposal for Dell Inc to be potentially friendly to management and may reach out to talk later this week, a person briefed on the matter said on Monday.

* Facebook Inc is no longer relying solely on what its users reveal. Instead, it is tapping outside data sources to learn even more about them, and to sell more finely targeted ads.

* Concord Music Group, an independent music company with an artist roster that includes Paul McCartney, Paul Simon and Creedence Clearwater Revival, has been sold to Wood Creek Capital Management, a private equity firm that has been quietly building a collection of music assets.

* Rengan Rajaratnam pleaded not guilty on Monday to insider trading charges while he worked for the now-defunct Galleon Group, coming nearly two years after the conviction of his older brother, the fallen hedge fund titan Raj Rajaratnam.

* Shares in Bankia SA, the giant Spanish mortgage lender whose collapse last year led to a banking crisis in Spain, slumped on Monday in the first day of trading after regulators wiped out most of the stock's value.

Regulators said on Friday that Bankia shares would be revalued at 1 cent each as the custodial managers who now oversee the bank try to create a clean slate. The new valuation was a condition of Bankia getting a capital injection of 10.7 billion euros ($13.9 billion) from European rescue funds.

* A survey of 800 large and midsize employers including PepsiCo Inc and Wal-Mart Stores Inc found that employers are increasingly trying to lower healthcare costs by using incentives to persuade workers to make better lifestyle choices.

* Puerto Rico has gone on a campaign to promote tax incentives that took effect last year, marketing its beautiful beaches, private schools and bargain costs in an effort to lure affluent American hedge fund managers and business executives to its shores.

* Messages from the world's largest law firm, DLA Piper, disclosed in a dispute over fees, will likely add to a perception that law firms inflate bills by performing superfluous tasks and overstaffing assignment

Canada

THE GLOBE AND MAIL

* Companies hoping to snag a piece of the biggest roadwork contract in Quebec's history will first have to prove they're corruption-free, a major test for the province as it aims to fix its failing infrastructure while tackling graft in the construction industry.

* Ontario premier Kathleen Wynne has stepped up her push for new taxes or tolls to pay for public transit expansion, warning that without such measures, badly needed infrastructure will never see the light of day.

Reports in the business section:

* Finance Minister Jim Flaherty says Canada is nearing an elusive free-trade agreement with South Korea, but some Canadian exporters warn they are years behind other countries that already have deals with the Asian manufacturing powerhouse.

* Canada's New Democratic Party (NDP) is about to reintroduce legislation designed to ensure Canadian companies are not using conflict minerals in their supply chain - and that consumers can be certain their smartphones and other electronics are free of minerals fuelling violence in the Democratic Republic of the Congo.

NATIONAL POST

* Conservative MP Mark Warawa, who wants Canadian parliamentarians to condemn sex-selection abortions, is refusing to back down after his motion was deemed out of order last week by a House of Commons committee.

Warawa is urging MPs to reverse that decision and allow a vote in the Commons on the issue. He will plead his case on Wednesday to the Commons' procedural affairs committee.

FINANCIAL POST

* The apparently lacklustre sales of BlackBerry's new flagship Z10 handset in the United States have caused some observers to wonder if the delayed launch in the smartphone maker's most important market have dealt a blow to its chance at a comeback.

China

CHINA SECURITIES JOURNAL

-- China Investment Corporation has signed a contract with Russian companies to work together in promoting infrastructure investment and development in far eastern Russia, according to an official announcement.

-- Dongfeng Automobile Co Ltd reported a 95 percent fall in net profit to 21.7 million yuan and a 17 percent fall in revenue to 17.7 billion yuan in 2012, according to the company's annual report.

-- Bright Dairy and Food Co. reported a 31 percent rise in 2012 net profit to 311 million yuan. The firm hopes to achieve 15.8 billion yuan in revenue this year.

SHANGHAI SECURITIES NEWS

-- China's inflation could fall to around 2 percent in March from a year earlier and the whole year number is likely to be around 2.6 percent, said Song Guoqing, member of the Central Bank Monetary Policy Committee, adding that gross domestic product (GDP) could grow 8.3 percent.

-- China's Securities Regulatory Commission, Beijing branch said it will promote securities companies to list in the stock market.

PEOPLE'S DAILY

-- Chinese President Xi Jinping will be invited to the opening ceremony of the Boao Forum for Asia (BFA) Annual Conference 2013 and he will deliver a keynote speech.

-- China should crack down on 'naked officials' -- officials who have most of their assets and close family abroad -- and seek to regulate and identify which cadres fall into this category.

Fly On The Wall 7:00 Market Snapshot

ANALYST RESEARCH

Upgrades

BroadSoft (BSFT) upgraded to Market Perform from Underperform at Raymond James
Electronic Arts (EA) upgraded to Overweight from Neutral at Piper Jaffray
Green Dot (GDOT) upgraded to Outperform from Market Perform at JMP Securities
LaSalle Hotel (LHO) upgraded to Outperform from Market Perform at BMO Capital
Peabody Energy (BTU) upgraded to Outperform from Market Perform at Raymond James
RF Micro Devices (RFMD) upgraded to Outperform from Perform at Oppenheimer

Downgrades

Ashland (ASH) downgraded to Neutral from Buy at Longbow
Cabot Oil & Gas (COG) downgraded to Hold from Buy at Stifel
Gordmans Stores (GMAN) downgraded to Hold from Buy at Stifel
Gordmans Stores (GMAN) downgraded to Neutral from Overweight at Piper Jaffray
Kraton Performance (KRA) downgraded to Perform from Outperform at Oppenheimer
Magellan Health (MGLN) downgraded to Market Perform from Outperform at Raymond James
MeadWestvaco (MWV) downgraded to Neutral from Buy at UBS
Southwestern Energy (SWN) downgraded to Hold from Buy at Stifel

Initiations

Brookfield Residential (BRP) initiated with a Buy at Citigroup
Fusion-io (FIO) initiated with a Perform at Oppenheimer
Luminex (LMNX) initiated with a Neutral at Wedbush
ON Semiconductor (ONNN) initiated with a Buy at BofA/Merrill
TRI Pointe Homes (TPH) initiated with an Outperform at FBR Capital

HOT STOCKS

Raytheon (RTN) said it will consolidate its businesses to streamline operations, and sees a workforce reduction of about 200 employees. The company also named Thomas Kennedy as COO
Magellan Health Services (MGLN) said that Magellan Complete Care of Arizona, a joint venture owned 80% by Magellan and 20% by Vanguard/Phoenix Health Plan, was notified by the state of Arizona that it was not selected as the Regional Behavioral Health Authority in GSA6; Maricopa County
Onyx Pharmaceuticals (ONXX) and Bayer (BAYRY) announced approval of Stivarga in Japan for the treatment of patients with metastatic colorectal cancer
Green Mountain (GMCR) appointed Michael Degnan Chief Legal Officer, General Counsel

EARNINGS/GUIDANCE

Companies that beat consensus earnings expectations last night and today include:
Children's Place (PLCE), Gordmans Stores (GMAN)

Companies that missed consensus earnings expectations include:
Cascade Bancorp (CACB), U.S. Auto Parts (PRTS), Focus Media (FMCN)

Companies that matched consensus earnings expectations include:
AuRico Gold (AUQ), Sonic (SONC)

NEWSPAPERS/WEBSITES

• The board of Hulu, which is owned by News Corp (NWSA) and Disney (DIS), has reached out to potential buyers to gauge interest in acquiring the company, according to Reuters.
• T-Mobile (DTEGY) has decided to drop smartphone subsidies, becoming the first major wireless carrier in the U.S. to do so, reports the Wall Street Journal.
• Several Supreme Court justices seemed skeptical about the practice of brand name pharmaceutical companies paying generic companies to keep their cheaper drugs off the market for a longer time, according to The New York Times.
• Zynga (ZNGA) CIO Debra Chrapaty is leaving the company to become CEO of Nirvanix, an enterprise cloud storage company, according to an AllThingsD report.

SYNDICATE

ARCA Biopharma (ABIO) files to sell $20M in common stock, warrants
Arcos Dorados (ARCO) files to sell 2.3M shares of common stock for holders
Calumet Specialty Products (CLMT) files to sell 5.25M shares of common stock
Coastal Contacts (COA) files to sell common stock
Rainmaker Systems (RMKR) files to sell $7.2M in common stock
The First Bancorp (FNLC) 662K share Spot Secondary priced at $16.25

• The revolving door continues: Mary Schapiro joins Promontory Financial (WSJ)
• First Peek at Health-Law Cost (WSJ)
• Abe warns over Japan inflation target: warns 2% inflation target may not be reached within two years (FT)
• BoJ's Kuroda tested by divided board (Reuters)
• Nanjing poultry butcher fourth person infected with H7N9 bird flu (SCMP)
• What time do top CEOs wake up? (Guardian)
• Cyprus Seeks More Time to Meet Targets in Talks With Troika (BBG)
• Investors Ignore Negativity at Their Peril (WSJ)
• Apple bows to Chinese pressure (FT)
• One can only laugh: North Korea to restart nuclear reactor in weapons bid (Reuters)
• Visa Demand Jumps (WSJ)
• Bloomberg's refutation of Stockman: yes, yes but... look over there, stocks are up! (BBG)
• Goldman's senior metals trader Evans leaves bank (Reuters)

Overnight Media Digest

WSJ

* Apple Inc issued an apology letter signed by Chief Executive Tim Cook that vowed to revamp aspects of its customer-service policies in China after more than two weeks of pointed attacks by government-run media.

* Goldman Sachs Group Inc is launching its new Liberty Harbor Capital LLC unit, a specialty finance company to invest in high-risk debt primarily of midsize U.S. companies with no credit ratings.

* A U.S. federal judge has signed off on the smaller of two insider-trading settlements by hedge fund SAC Capital Advisors LP, even as one of its most senior employees faces criminal charges in the matter, according to court documents.

* Promontory Financial Group LLC is expected to announce on Tuesday that it has hired Mary Schapiro, who was chairman of the U.S. Securities and Exchange Commission for nearly four years.

* Health insurers such as Humana Inc stand to get significantly more money for running Medicare Advantage plans next year than they had feared, according to new U.S. government rates announced late Monday.

* With fewer U.S. farmers planting rice, food companies like cereal maker Kellogg Co or candy company Mars Inc could be forced to look further afield to secure supplies.

* This week, Las Vegas Sands Corp will face the first of two lawsuits that seek cuts of the hefty profits the casino company has earned in the Chinese gambling enclave of Macau.

* Tesla Motors Inc said it would report a first-quarter profit, sending the luxury electric-car maker's shares surging 16 percent on Monday.

FT

Apple Inc Chief Executive Tim Cook has apologised to Chinese consumers over the company's after-sales service following intense pressure from Chinese state media.

U.S. banks are considering whether to continue basing their EMEA businesses in London with an EU-wide bonus cap set to take effect next year.

Vodafone has accused the Indian government of "contradictory and inconsistent" treatment in a spat over the renewal of spectrum licences.

Investors remain far from convinced following an overhaul of rail franchising last week in the wake of the controversy around the West Coast contract.

Nasdaq OMX Group Inc said it will buy the eSpeed electronic trading platform for as much as $1.2 billion in cash and deferred stock from BGC Partners Inc.

Prosecutors have opened an inquiry into an accident at Anglo American's port in northern Brazil which could lead to possible fines.

NYT

* Apple Inc's chief executive, Tim Cook, took the unusual step on Monday of apologizing to Chinese customers over the company's warranty policy and said he would improve customer service in the country.

* Nasdaq OMX Group Inc, the parent company of the Nasdaq stock exchange, said on Tuesday that it would buy the electronic bond-trading platform eSpeed for $750 million, amid consolidation in the industry.

* Blackstone Group LP told Dell Inc that it would not even consider bidding unless Dell offered to pay the firm's expenses, up to a whopping $25 million.

* American Airlines, owned by AMR Corp, said on Monday that it had settled lawsuits with the online travel agency Orbitz over the agency's display of information about American flights and fares.

* A U.S. federal appeals court on Monday upheld a ruling in favor of Aereo, the start-up Internet service that streams stations without compensating them. Broadcasters, including CBS Corp, Comcast Corp and Walt Disney Co, filed two suits against Aereo more than a year ago.

* A U.S. federal bankruptcy judge ruled on Monday that the city of Stockton, California, was eligible for court protection from its creditors, clearing the way for a battle over whether public workers' pensions can be cut when the city they work for goes bankrupt.

* Manufacturing expanded at the slowest rate in three months in March, suggesting the U.S. economy lost some momentum at the end of the first quarter as the effects of tighter fiscal policy started kicking in.

* Eleven partners at the law firm Bingham McCutchen who worked in the firm's highly regarded securities-enforcement practice resigned on Monday to join Sidley & Austin.

* A U.S. federal judge ruled that online music reseller ReDigi's secondary market for digital music infringes the copyrights controlled by record companies.

Canada

THE GLOBE AND MAIL

* As clean-up crews scraped up the gooey Alberta heavy crude that fouled a small Arkansas town after a pipeline rupture, anti-Keystone XL groups said the spill underscores the dangers posed by the controversial project to get Canadian oil to refineries on the Texas coast.

* Ottawa's plan to clamp down on mortgage securitization will make it harder for smaller lenders to compete with big banks, increasing their costs - and potentially raising mortgage rates, players in the sector say.

Reports in the business section:

* Price discounts on western Canada's heavy oil have narrowed dramatically, as producers move record amounts of crude by rail in order to sidestep pipeline bottlenecks and reach thirsty U.S. refineries.

* The Canada Revenue Agency has been given controversial new powers to go after Canadians who participate in tax shelters that involve donations to charity.

The CRA has been cracking down on these types of shelters in recent years, disallowing more than C$5 billion ($4.92 billion)in donations, penalizing more than 160,000 taxpayers and revoking the charitable status of dozens of organizations.

NATIONAL POST

* Canada's largest provincial labor federation is facing a pension fund deficit, and accounting and solvency experts suggest the Ontario Federation of Labour may need to lay off workers or even trim employees' benefits if the situation doesn't improve.

* A public "dirty war" of competing corruption allegations involving the Palestinian Authority has reached Canada with a request from Ramallah for Ottawa's help in seizing assets here of a whistleblower convicted of embezzlement there but currently a fugitive.

Muhammad Rashid was a key financial and economic adviser to Yasser Arafat and former head of the Palestinian Investment Fund, but since the long-time Palestinian leader's death, he has been on the wrong side of the authority's leadership.

FINANCIAL POST

* The shutdown of an ExxonMobil Corp pipeline carrying Alberta crude from Illinois to the U.S. Gulf Coast has widened West Texas intermediate oil's discount to London's Brent, while raising the prospect of more delays in getting growing oil sands production to refineries in Texas and Louisiana.

China

CHINA SECURITIES JOURNAL

-- China faces a strong pressure in terms of foreign funds' inflow as economy growth in developed countries of the west could hover around a low level for a long time, said Yu Yongding, economist with Chinese Academy of Social Sciences.

SECURITIES TIMES

-- Nine Chinese futures brokerages including China International Futures Co Ltd, Yongan Futures and Nanhua Futures are preparing for initial public offerings.

SHANGHAI SECURITIES NEWS

-- The People's Bank of China, the country's central bank, will not make uniform requirements on local lenders to raise mortgage rates to curb housing prices, according to unidentified sources.

CHINA DAILY

-- Scientists at Tianjin University of Science and Technology said they developed a handheld tester that can detect pathogenic bacteria and excessive drug or pesticide residue.

SHANGHAI DAILY

-- Pigs died from disease or other reasons were sent to Shanghai markets and restaurants over the past five years because farmers in a neighboring province were reluctant to pay for their proper disposal.

Fly On The Wall 7:00 am Market Snapshot

ANALYST RESEARCH

Upgrades

AstraZeneca (AZN) upgraded to Neutral from Underweight at JPMorgan
DaVita (DVA) upgraded to Buy from Hold at Deutsche Bank
GNC Holdings (GNC) upgraded to Buy from Hold at Deutsche Bank
Hanesbrands (HBI) upgraded to Overweight from Equal Weight at Barclays
Qualcomm (QCOM) upgraded to Strong Buy from Outperform at Raymond James
Ultra Petroleum (UPL) upgraded to Buy from Hold at Brean Capital

Downgrades

Apple (AAPL) downgraded to Buy from Conviction Buy at Goldman
CME Group (CME) downgraded to Neutral from Outperform at Credit Suisse
Celadon Group (CGI) downgraded to Hold from Buy at BB&T
Charles Schwab (SCHW) downgraded to Neutral from Outperform at Credit Suisse
EZCORP (EZPW) downgraded to Underperform from Market Perform at FBR Capital
Exxon Mobil (XOM) downgraded to Perform from Outperform at Oppenheimer
Goldman Sachs (GS) downgraded to Neutral from Buy at BofA/Merrill
Hewlett-Packard (HPQ) downgraded to Sell from Neutral at Goldman
Morgan Stanley (MS) downgraded to Neutral from Outperform at Credit Suisse
PVR Partners (PVR) downgraded to Equal Weight from Overweight at Barclays
Rackspace (RAX) downgraded to Market Perform from Outperform at Wells Fargo
SunTrust (STI) downgraded to Neutral from Outperform at Credit Suisse

Initiations

AOL (AOL) initiated with a Buy at UBS
Abercrombie & Fitch (ANF) initiated with an Underweight at Barclays
Activision Blizzard (ATVI) initiated with a Buy at UBS
Aeropostale (ARO) initiated with an Equal Weight at Barclays
Amazon.com (AMZN) initiated with a Neutral at UBS
American Eagle (AEO) initiated with an Overweight at Barclays
Buffalo Wild Wings (BWLD) initiated with a Neutral at Credit Suisse
Electronic Arts (EA) initiated with a Neutral at UBS
Expedia (EXPE) initiated with a Buy at UBS
Facebook (FB) initiated with a Neutral at UBS
Finish Line (FINL) initiated with an Equal Weight at Barclays
Fossil (FOSL) initiated with an Equal Weight at Barclays
Gap (GPS) initiated with an Overweight at Barclays
Google (GOOG) initiated with a Buy at UBS
Groupon (GRPN) initiated with a Sell at UBS
IAC (IACI) initiated with a Buy at UBS
Limited (LTD) initiated with an Overweight at Barclays
LinkedIn (LNKD) initiated with a Neutral at UBS
Maidenform (MFB) initiated with an Equal Weight at Barclays
TripAdvisor (TRIP) initiated with a Neutral at UBS
Under Armour (UA) initiated with an Overweight at Barclays
Urban Outfitters (URBN) initiated with an Overweight at Barclays
Yahoo (YHOO) initiated with a Buy at UBS
Yelp (YELP) initiated with a Buy at UBS
Zynga (ZNGA) initiated with a Neutral at UBS
eBay (EBAY) initiated with a Buy at UBS
priceline.com (PCLN) initiated with a Buy at UBS

HOT STOCKS

NASDAQ OMX (NDAQ) to acquire eSpeed treasuries platform from BGC Partners (BGCP) for $750M. Moody's placed NASDAQ senior at Baa3, on review for downgrade
Medicare Advantage fee-for-service growth estimated at 3.3% (UNH, HNT, WLP, MOH, CI, WCG, CVH, AGP, CNC, HS, HUM, AET)
AT&T (T), CWA reached tentative agreement in CA, NV wireline negotiations
Funai Electric Co. to acquire Lexmark's (LXK) inkjet-related technology and assets for $100M
AstraZeneca (AZN) said Pulmicort Respules patent ruled invalid (TEVA)
Nestle (NSRGY) to build Nescafe Coffee Center in China
McCormick (MKC) reaffirmed FY13 EPS view of $3.15-$3.23, consensus $3.21

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Eagle Bulk Shipping (EGLE), Puma Biotechnology (PBYI), Multiband (MBND)

Companies that missed consensus earnings expectations include:
Trovagene (TROV), Bona Film (BONA)

Companies that matched consensus earnings expectations include:
Shoe Carnival (SCVL)

NEWSPAPERS/WEBSITES

• Apple (AAPL) issued an apology letter signed by CEO Tim Cook that vowed to revamp aspects of its customer-service policies in China after more than two weeks of pointed attacks by government-run media, the Wall Street Journal reports
• Goldman Sachs Group (GS) is launching a specialty finance company to invest in high-risk debt primarily of mid-sized U.S. companies with no credit ratings, the Wall Street Journal reports
• The jobless rate in the euro zone was stable at 12% in February, the EU’s statistics office Eurostat said today, which could add pressure for an interest rate cut by the European Central Bank, Reuters reports
• All Nippon Airways (ALNPY), Boeing’s (BA) largest customer for the grounded 787 Dreamliner, will put its pilots through training to resume flights in June, sources say, after Boeing completed more than half of its tests to get its new battery system certified, Reuters reports
• Credit-market borrowing in all domestic non-financial sectors grew at a seasonally-adjusted annual rate of $2.5T in the three months ended Dec. 31, 2012, the largest increase in five years, according to the Fed’s Flow of Funds Report, Bloomberg reports
• Vodafone Group (VOD) jumped as much as 4.3% in London trading after a Financial Times blog reported that AT&T (T) and Verizon Communications (VZ) may bid for the company,  Bloomberg reports

SYNDICATE

Centene (CNC) files to sell $15.4M in common stock
Investors Real Estate (IRET) files to sell 8M common shares of beneficial interest
Nordic American Tanker (NAT) files to sell $87M of common stock
Solta Medical (SLTM) files to sell 13.3M shares of common stock for holders
Williams Partners (WPZ) files to sell $600M in common units for limited partners

ACTIVIST/PASSIVE FILINGS

Carl Icahn reports 9.27% passive stake in Nuance (NUAN)
SAC Capital reports 5.1% passive stake in SuperValu (SVU)

• Germany: Europe's... poorest? ECB Survey Puts Southerners on Top in Household Wealth, Germans Near Bottom (WSJ)
• Obama Proposes $3.77 Trillion Budget to Revive Debt Talks (BBG)
• China trade data raise accuracy worries (FT) ... but generates so much laughter
• such as this... China Exports Miss Forecasts as ‘Absurd’ Data Probed (BBG)
• S. Korea Braces for ‘Very High’ Chance of North Missile Test (BBG)
• Slovenia, Spain Warned of ‘Excessive’ Economic Imbalances by EU (BBG)
• G8 foreign ministers meet in London to address Syria, North Korea (Reuters)
• N. Korea Threats Boost First South Korea Rate Cut Odds Since October (BBG)
• China Bird Flu Outbreak May Stem From Numerous Sources (BBG)
• Spain Bailout Less Likely on Lower Funding Costs: Moody’s (BBG)
• BOE’s Haldane: Simplify Bank Rules to Strengthen Them (WSJ)
• Australia's Swan Backs Japan-to-U.S. Stimulus as G-20 Meets, Yen Slides (BBG)
• Japan’s unfinished policy revolution (FT)
• Fed’s Williams Sees Reduced Fed Bond Buying in Second Half of 2013  (WSJ)

Overnight Media Digest

WSJ

* German households are among the poorest - on paper, at least - in the euro zone, according to a study by the European Central Bank that adds a new twist to the debate over how far taxpayers in Northern Europe should go to support weaker countries.

* Fitch Ratings Inc lowered one of its key ratings on China's government debt, in one of the most prominent warnings to date over a credit buildup in the world's second-largest economy.

* A former KPMG LLP partner admitted passing on stock tips about clients to a friend who gave him cash and gifts, in a scandal that led the big accounting firm to resign as auditor for two companies, Herbalife Ltd and Skechers USA Inc .

* Yahoo Inc and Apple Inc have been discussing how more Yahoo services can play a prominent role on Apple's iPhone and iPad, people briefed on the matter said.

* European government policy makers are considering rules that would include short-term loans from other banks among the liabilities that could suffer losses when authorities close down failing banks, according to a document seen by The Wall Street Journal.

* Cablevision Systems Corp Chief Executive James Dolan is giving his wife wider responsibilities, including oversight of sales of cable TV, Internet and voice products in addition to product management and marketing.

* The European Union has opened an antitrust investigation into MasterCard Inc following concerns over some of the credit-card company's interbank fees.

FT

James Crosby, the boss of failed lender HBOS, requested to be stripped of his knighthood following a scathing report into the 2008 collapse of the bank he once presided over.

KPMG resigned as auditor to two US companies after accusing a former partner of engaging in insider trading.

Britain's financial watchdog is investigating last year's technology failures at state-backed Royal Bank of Scotland that left 17 million customers without access to their accounts for up to three weeks.

Global ratings agency Fitch cut China's long-term local currency credit rating to A-plus from AA-minus over concerns that the country's rising debt problems will require a government bailout. Austria and Luxembourg are set to ease longstanding bank secrecy rules in a move that will allow other Eurozone member states to access their depositors' account details amid pressure to crack down on tax evasion in Europe.

The European Union has opened an antitrust investigation into MasterCard Inc over concerns that some of the credit-card company's interbank fees are anticompetitive.

Brazil's state-controlled oil company Petrobras is considering possible business ventures with companies controlled by billionaire Eike Batista.

NYT

* KPMG resigned as auditor for Herbalife Ltd and Skechers USA Inc and withdrew audit reports after a KPMG employee was found to have given information on clients to a third party.

* President Obama announced three nominations to the National Labor Relations Board on Tuesday to complete a package of five nominees - three Democrats and two Republicans - that the administration hopes Senate Republicans will approve to end the board's unusual limbo.

* Months after brokering a multibillion-dollar settlement with banks over mortgage foreclosure abuses, the Federal Reserve and the Office of the Comptroller of the Currency are set to dole out roughly $1.2 billion in cash relief in the first batch of payments to troubled borrowers.

* James Crosby, a former chief executive of failed British bank HBOS, said on Tuesday that he would ask authorities to remove his knighthood in light of a damning report published last week that blamed him in part for the mortgage lender's 2008 collapse.

* Southeastern Asset management says that proposals from the Blackstone Group and Carl Icahn are superior to the $13.65-a-share offer for Dell Inc from Michael Dell and the private equity firm Silver Lake.

* Theme park operator SeaWorld Entertainment is seeking to raise up to $540 million in its initial public offering. Half of the shares sold will come from its owner, the Blackstone Group .

Canada

THE GLOBE AND MAIL

* Unionized employees of the Liquor Control Board of Ontario (LCBO) have overwhelmingly voted in favor of a strike should contract talks with the retail giant break down. The Ontario Public Service Employees Union, which represents more than 7,000 LCBO staff, says 95 percent of the members voted in favour of a walkout.

* Montreal is lifting its 65-year-old, Prohibition-style ban on street food, providing hope for sidewalk foodies and ending a quirky distinction for a city reputed to be among the gastronomic capitals of the continent.

Reports in the business section:

* An abundant supply of labour is the key ingredient that has allowed Canada to expand its economy over several decades despite disappointing productivity gains, a trio of economists from the U.S. Federal Reserve Board and the International Monetary Fund argue in a report to be published Wednesday in the International Productivity Monitor.

* Agrium Inc has defeated a boardroom challenge from dissident shareholder Jana Partners LLC, with investors choosing to back the company's board slate after an acrimonious months-long campaign that ended in a flurry of accusations of unfair play.

NATIONAL POST

* In its effort to get more people on public transit, Fort McMurray is unleashing an unlikely, yet powerful strategy: It's building the most tricked-out bus shelters Canada has ever seen.

By year's end, residents of the northern Alberta oil sands city will have 300 heated bus shelters to wait in, protected from a certain brand of Canadian winter that can whip winds as cold as 40 below.

China

CHINA SECURITIES JOURNAL

- A total of 4.7 million affordable houses are planned for construction this year, according to an official announcement released on Tuesday by Ministry of Housing and Urban-Rural Development.

- New medicine which can fight off bird flu, H7N9, has been authorized by China Food and Drug Administration and is expected to be introduced to the market in the first half on this year.

- Troubled solar panel manufacturer Suntech Power Holdings Co Ltd said on Tuesday they are consulting with several investors, including Buffett-led MidAmerican Energy Holdings Co.

CHINA DAILY

- The Chinese tourism authority said overseas tourist flows declined 1.8 percent in the first quarter due to concerns about environmental issues.

- The city of Guangzhou in southern Guangdong province will allow tourists to visit for 72 hours without a visa, following a similar program in Shanghai.

SHANGHAI SECURITIES NEWS

- The inspection of initial public offerings companies starts today in Shanghai National Accounting Institute and will last till the end of June.

PEOPLE'S DAILY

- China's economy growth will hit 8.2 in 2013 and 8.0 percent in 2014, supported by strong fiscal expenditures and consumption.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

American Eagle (AEO) upgraded to Overweight from Neutral at Piper Jaffray
AmerisourceBergen (ABC) upgraded to Buy from Neutral at Goldman
CYS Investments (CYS) upgraded to Outperform from Market Perform at Keefe Bruyette
Geo Group (GEO) upgraded to Overweight from Equal Weight at Barclays
IBM (IBM) upgraded to Buy from Neutral at UBS
Pacific Sunwear (PSUN) upgraded to Overweight from Neutral at Piper Jaffray
Siemens (SI) upgraded to Neutral from Underperform at Exane BNP Paribas
Starwood Property (STWD) upgraded to Buy from Neutral at BofA/Merrill

Downgrades

Aeropostale (ARO) downgraded to Sell from Neutral at Goldman
Agrium (AGU) downgraded to Neutral from Overweight at Piper Jaffray
Community Health (CYH) downgraded to Hold from Buy at Deutsche Bank
Expeditors (EXPD) downgraded to Buy from Conviction Buy at Goldman
France Telecom (FTE) downgraded to Conviction Sell from Sell at Goldman
Health Management (HMA) downgraded to Hold from Buy at Deutsche Bank
NetApp (NTAP) downgraded to Neutral from Buy at UBS
ONEOK Partners (OKS) downgraded to Sell from Neutral at Goldman
TE Connectivity (TEL) downgraded to Neutral from Buy at BofA/Merrill
Tenet Healthcare (THC) downgraded to Hold from Buy at Deutsche Bank

Initiations

H&R Block (HRB) initiated with an Outperform at Wedbush
Heartland Financial (HTLF) initiated with a Buy at DA Davidson
Hologic (HOLX) initiated with a Hold at Stifel
Icahn Enterprises (IEP) initiated with a Buy at Jefferies
MarkWest Energy (MWE) initiated with a Neutral at Goldman
Netflix (NFLX) initiated with an Underweight at Evercore
P.A.M. Transportation (PTSI) initiated with a Buy at Wunderlich

HOT STOCKS

Blackstone (BX) solicits partners, tech companies for Dell bid, DJ reports
W.R. Grace (GRA) sees FY13 adjusted EBITDA $665M-$685M
Sanofi (SNY), Pieris broaden existing collaboration, terms not disclosed

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Adtran (ADTN), SeaChange (SEAC), Healthcare Services (HCSG), PriceSmart (PSMT)

Companies that missed consensus earnings expectations include:
W.R. Grace (GRA)

NEWSPAPERS/WEBSITES

• Ron Johnson’s departure as CEO of  J.C. Penney (JCP) is a blow to hedge fund manager William Ackman, who set out to change the retailing world by revamping Penney and now is stuck with a large stake in a broken company run by the man he pushed out, the Wall Street Journal reports
• Nearly a year after walking away from Facebook (FB), GM (GM) said it has returned to advertising on the social network on a trial basis. GM executives are intrigued with Facebook's new audience targeting tools designed to deliver ads to consumers who are more likely to buy, the Wall Street Journal reports
• Thermo Fisher Scientific (TMO) made a binding offer for Life Technologies (LIFE) as private equity firms raced to finalize a consortium to take the genetic testing equipment maker private, sources say, Reuters reports
• Toyota Motor (TM) said its Corolla was the world's top selling car of 2012, contradicting rival  Ford (F) which claimed top spot for its Focus model, Reuters reports
• Home prices are climbing too fast relative to buyer incomes, signaling that property values may fall in some U.S. cities once mortgage rates rise and reduce affordability, according to a study by Zillow Inc. (Z), Bloomberg reports
• China’s yuan surged to a 19-year high after the central bank set a record reference rate for the currency amid speculation of rising capital inflows. The People’s Bank of China raised the fixing by 0.15%, the biggest increase since February 8, to 6.2548 per dollar, Bloomberg reports

SYNDICATE

Durata Therapeutics (DRTX) files to sell $50M of common stock
Infinity Pharmaceuticals (INFI) plans to sell 8.5M shares for holders
KNOT Offshore Partners (KNOP) 7.45M share IPO priced at $21.00
Realogy (RLGY) files to sell 35M shares of common stock for holders
Resource Capital (RSO) announces 16.25M share common stock offering
Rexnord (RXN) files to sell 67.9M shares of common stock for holders
Synergy Pharmaceuticals (SGYP) files to sell $90M of common stock
Taylor Morrison (TMHC) 28.57M share IPO priced at $22.00
Tornier (TRNX) files to sell 8M ordinary shares by holders

• Boston bomb probe looking at pressure cooker, backpacks (Reuters), Boston Bomb Clues Surface (WSJ) Forensic Investigators Discover Clues to Boston Bombing (BBG)
• China local authority debt ‘out of control’ (FT)
• Gold Wipes $560 Billion From Central Banks as Equities Rally (BBG)... or the same impact a 2% rise in rates would have on the Fed's balance sheet
• More Wall Street leakage: Stock Surge Linked to Lobbyist (WSJ)
• China's bird flu death toll rises to 16, government warns of spread (Reuters)
• Chinese official endorses monetary easing (FT)
• As global price slumps, "Abenomics" risks drive Japan gold bugs (Reuters)
• North Korea rejects US call for talks (FT)
• IMF Renews Push Against Austerity (WSJ)
• India Gains as Gold Plunge Boosts Scope for Rate Cuts (BBG)
• Germany set to approve Cyprus aid (FT)
• Easing Is an Issue as G-20 Meets (WSJ)
• Tesco to Exit U.S. After First Profit Drop in About 20 Years (BBG)

Overnight Media Digest

WSJ

* Procter & Gamble Co is planning to add weeks to the amount of time it takes to pay its suppliers, a shift that could free up as much as $2 billion in cash for the consumer products giant, people familiar with the matter said.

* Stephen Feinberg and other partners of the private equity firm Cerberus Capital Management LP that put gun manufacturer Freedom Group Inc up for sale after the Newtown, Connecticut school shootings last year are forming a bid for the gun company, although they remain prepared to sell it to a higher bidder, according to people familiar with the matter.

* AMR Corp's American Airlines canceled or delayed at least 1,950 flights after losing access to a key computer system, a hit to the airline's reputation as it prepares for a complicated merger with US Airways Group Inc that poses the risk of similar disruptions.

* The Food and Drug Administration blocked generic versions of the original OxyContin from coming to market late Tuesday, a sign of support that new safeguards with the highly abused pain drug are working.

* A healthcare lobbyist, who is a former congressional aide, provided a key tip to a political-intelligence firm about a coming change in government policy. The firm's subsequent alert to Wall Street clients sparked a surge in trading.

* The head of the Federal Aviation Administration gave the clearest public indication yet that regulators and Boeing Co are progressing toward an end to the three-month worldwide grounding of the company's 787 jet.

* Yahoo Inc's first-quarter profit rose 36 percent, but revenue fell 7 percent from a year earlier as the firm's core online-advertising business deteriorated.

* Intel Corp's bottom line continued to suffer from the sagging personal computer market in the first quarter, but the numbers and the company's outlook for the current period were less gloomy than some analysts feared.

* Proxy adviser Glass Lewis & Co recommended that MetroPCS Communications Inc shareholders vote in favor of a merger with Deutsche Telekom AG owned T-Mobile USA, shifting course after the terms of the deal were improved.

* A Federal Bureau of Investigation raid brought the headquarters of Pilot Flying J, North America's largest truck-stop chain, to a standstill this week. The investigation appears to be part of a broader probe of rebate payments owed to Pilot's trucking customers, Chief Executive Jimmy Haslam III said Tuesday.

FT

Chinese regulators approved Glencore's $64 billion merger with Xstrata after the former said it would sell its Las Bambas copper project in Peru.

An influential advisory group has asked investors in Credit Suisse to block the Swiss bank's plan to issue shares for employee bonuses. As they further investigate Monte dei Paschi di Siena, Italian police have frozen 1.8 billion euros ($2.36 billion) worth of assets belonging to a unit of Nomura Holdings.

The International Monetary Fund told UK Finance Minister George Osborne to consider pursuing a less severe austerity drive in the face of a weak private sector.

Following widespread raids on the homes of Credit Suisse clients, the bank's employees are being investigated for allegedly helping German citizens avoid taxes.

Goldman Sachs Group reported higher-than-expected first-quarter earnings, driven by strong debt underwriting, but warned of a weak deals pipeline.

Dell has eased its strained relations with billionaire Carl Icahn - to a certain degree - by allowing the activist investor to communicate freely with other shareholders. BlackRock noted its investors' return to stock markets, as clients withdrew $2.6 billion from bond funds while contributing a net $34 billion into equities in the first quarter.

The European parliament rejected a proposal to prop up prices in Europe - the world's largest carbon market - in a vote on Tuesday, sending it plunging to a new record low.

NYT

* Goldman Sachs Group Inc reported a first-quarter profit of $2.19 billion, or $4.29 a share, up 5 percent from the year-ago period and driven by investment banking and lending, but the bank faces many market and regulatory challenges.

* Fairway's initial public offering got off to a strong start Tuesday evening, with the U.S. grocery chain pricing its shares at $13 each, above the expected range, according to a person briefed on the matter. It raised $177.5 million, valuing the whole company at $536.1 million.

* A judge has approved a settlement between the hedge fund SAC Capital Advisors and securities regulators that allows the firm to pay a $602 million fine to resolve a civil insider trading case without admitting any guilt, but he conditioned his ruling on a pending ruling from the Federal Appeals Court.

* In a major policy move, the Food and Drug Administration said on Tuesday that it would not approve generic versions of the powerful narcotic OxyContin, the painkiller that symbolized a decade-long epidemic of prescription drug abuse.

* After fierce industry lobbying and internal bickering, the Securities and Exchange Commission is moving closer to overhauling the money market fund industry. Just days after Mary Jo White became its chairwoman, the agency's spokesman, John Nester, said on Tuesday that "the staff expects to have something for the commission's consideration in the near future."

* AMR Corp unit American Airlines was forced to ground all of its flights for several hours on Tuesday after a nationwide problem with its computer systems. By late afternoon, its computers were back up and its operation were slowly coming back to life.

* Google Inc is recruiting developers to build apps for its Internet-connected glasses, but it is being unusually restrictive as it slowly introduces the new technology to a wary public.

* A jury in Chicago rejected claims on Tuesday that the orthopedics unit of Johnson & Johnson inappropriately marketed an artificial hip, which the company recalled in 2010.

* The U.S. Justice Department's top antitrust enforcer said on Tuesday that he supported limits on how much of the nation's airwaves a single wireless company could hold, a condition that could keep AT&T Inc and Verizon Communications Inc from bidding on certain blocks of airwaves during auctions

Canada

THE GLOBE AND MAIL

* Canadian singer Rita MacNeil, known as Cape Breton's first lady of song, has died at the age of 68. Her website says she died Tuesday night from complications following surgery.

* The federal Conservative government will stop funding the Health Council of Canada created to ensure common standards for healthcare across provinces and territories - a move that critics say will fragment the national system of medicare.

Reports in the business section:

* A group of Alberta municipal politicians and energy companies is urging that more oil and gas be processed in the province, reviving a long simmering debate on how best to leverage the Alberta boom.

The launch of the campaign, dubbed Alberta Plus, included the release of a report by Ronald Schlenker, a senior instructor in economics at the University of Calgary. His report argues that upgrading and refining more of Alberta's petroleum products before exporting them - known as a "value-added" approach - could create 18,000 new jobs and boost the provincial gross domestic product by billions of dollars.

* Alberta regulators have accused Sherry Hagerty, a former employee of Pembina Pipeline Corp, of illegal insider trading, alleging she advised her husband to buy shares of Provident Energy Ltd after she learned her employer was considering a takeover bid for the gas company.

NATIONAL POST

* Four months after bill C-377 was passed by the House of Commons that would require labor unions to disclose detailed financial information, including how much they spend on political activities, it has run into opposition in the Senate.

* The federal government is changing the software on the full-body scanners used to provide security at airports so they no longer produce a complete outline of a traveler's body.

Transport Canada says the new technology, already in use in the United States and the Netherlands, will increase privacy while still ensuring security.

FINANCIAL POST

* SNC Lavalin Group Inc is moving to protect its reputation in Algeria, a key market in which it has operated for years despite the threat of terrorist attacks.

Canada's largest engineering firm this week sent an open letter to the media in the North African nation, insisting it is co-operating with law enforcement authorities in several countries that have opened investigations into its business and repeating that anyone who has committed illegal acts should be brought to justice.

* The latest global report card on Canada's economy is cautionary and firm: weaker growth could mean budget balancing efforts and higher lending rates will need to be put on hold.

The outlook for Canada's economy has weakened significantly in the past few months, falling further behind the United States and still below many other industrialized nations.

China

CHINA SECURITIES JOURNAL

- New loans are expected to fall in April after a sharp rise in March, according to unnamed banking industry insiders.

- A total of 21 listed steel companies had released their annual report by Wednesday. The reports show a total loss of 7.7 billion yuan in 2012 compared with a total profit of 9.8 billion yuan in 2011.

SHANGHAI SECURITIES JOURNAL

- Yi Xianrong, economist at the Chinese Academy of Social Science's Institute of Financial Research, argues in an editorial that the risk from China's shadow banking system has been exaggerated and that shadow banking is an important catalyst for financial innovation.

CHINA BUSINESS NEWS

- China's Public Security Bureau arrested two bond-fund managers for unspecified financial crimes, one from Citic Securities Co Ltd and the other from Wanjia Asset Management.

- The Standing Committee of the National People's Congress will consider a revision to China's consumer protection law when it meets from April 23 to April 25. If approved, it would be the first revision in 20 years.

CHINA DAILY

- The People's Liberation Army has released a "white paper" that contains previously classified information on the strength and composition of its ground, air, and naval forces.

SHANGHAI DAILY

- Over 92 percent of children born outside China's family planning law in Shanghai were children of migrant women, according to the Shanghai Population and Family Planning Commission, which is launching a campaign to combat violations of the law.

PEOPLE'S DAILY

- Chinese President Xi Jinping on Tuesday sent condolences to his U.S. counterpart Barack Obama over the bombings at the Boston Marathon.

Fly On The Wall 7:00 am Market Snapshot

ANALYST RESEARCH

Upgrades

AngloGold (AU) upgraded to Buy from Hold at Deutsche Bank
Eagle Bancorp (EGBN) upgraded to Outperform from Market Perform at Keefe Bruyette
Eagle Materials (EXP) upgraded to Buy from Neutral at Longbow
Gold Fields (GFI) upgraded to Buy from Hold at Deutsche Bank
NCR Corp. (NCR) upgraded to Buy from Neutral at Compass Point
Yahoo (YHOO) upgraded to Buy from Neutral at BofA/Merrill

Downgrades

Cirrus Logic (CRUS) downgraded to Buy from Strong Buy at Needham
DreamWorks (DWA) downgraded to Negative from Neutral at Susquehanna
ITC Holdings (ITC) downgraded to Hold from Buy at Deutsche Bank
Pepco Holdings (POM) downgraded to Underperform from Neutral at Credit Suisse

Initiations

AMC Networks (AMCX) initiated with an Outperform at Bernstein
Ascent Media (ASCMA) initiated with an Overweight at Piper Jaffray
Casey's General Stores (CASY) initiated with a Neutral at Goldman
DISH (DISH) initiated with a Hold at Stifel
DirecTV (DTV) initiated with a Buy at Stifel
Group 1 Automotive (GPI) initiated with a Neutral at Credit Suisse
Qihoo 360 (QIHU) initiated with an Overweight at Barclays
Scripps Networks (SNI) initiated with a Market Perform at Bernstein
SunCoke Energy (SXCP) initiated with a Buy at BB&T
Wesco Aircraft (WAIR) initiated with a Sell at UBS
Workday (WDAY) initiated with an Outperform at Wedbush
lululemon (LULU) initiated with an Overweight at Barclays

HOT STOCKS

Atlas Energy (ATLS) announced Atlas Pipeline's (APL) $1B acquisition of Eagle Ford business
Intel (INTC) said confident in ability to achieve financial growth in 2H13
Rite Aid (RAD) shareholder Jean Coutu Group sold 72.5M shares at $2.20 average
Tesco (TSCDY) confirmed plans to exit U.S.
CSX (CSX) sees EPS growth of 10%-15% through FY15 off FY13 base
Announced 7% quarterly dividend increase to 15c per share and new $1B buyback
AdCare (ADK) said CFO resigned, annual report delayed beyond deadline
American Airlines (AAMRQ) said computer systems “back up and running,” Bloomberg reports
Toyota (TM) announced Toyota, Lexus U.S. hybrid sales account for 1.95M out of 5M global sales

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
BNY Mellon (BK), PNC Financial (PNC), WNS Holdings (WNS), Mattel (MAT), Linear Technology (LLTC), United Rentals (URI), Yahoo (YHOO), Interactive Brokers (IBKR), CSX (CSX)

Companies that missed consensus earnings expectations include:
Textron (TXT), First Cash Financial (FCFS), American Midstream Partners (AMID), Boston Private Financial (BPFH), Cathay General (CATY), Badger Meter (BMI), E2open (EOPN), Intel (INTC)

Companies that matched consensus earnings expectations include:
Fulton Financial (FULT)

NEWSPAPERS/WEBSITES

• BlackRock (BLK) CEO Laurence Fink said tougher regulation could be coming for the $2.6T money-market-fund industry, in which BlackRock is a major player, the Wall Street Journal reports
• Procter & Gamble (PG) plans to add weeks to the time it takes to pay its suppliers, which could free up as much as $2B in cash, sources say. P&G could use that cash to fund investments in new factories overseas or to help pay for stock buybacks. That highlights how America's biggest companies continue to build on the cash management practices they adopted in the wake of the credit crisis, the Wall Street Journal reports
• John Paulson said Dish Network’s (DISH) $25.5B bid for Sprint Nextel (S) is a compelling offer, a vote of confidence that could help Dish beat rival suitor SoftBank Corp. (SFTBF), Reuters reports
• The Swiss government is considering a possible solution to the dispute with the U.S. over Swiss banks accused of helping wealthy Americans evade taxes, Reuters reports
• The Cypriot government plans to sell part of its gold reserves within the next months, a decision that needs to be approved by the country’s central bank, said Finance Minister Haris Georgiades, Bloomberg reports
• European car sales (VLKAY, DDAIF) are falling to a 20-year low after German concerns over the ongoing debt crisis sent demand plunging last month in the region’s biggest economy and removed the main buffer protecting automakers. Q1 deliveries in the region slid 9.7% to a record low 3.1M cars,
• Bloomberg reports

SYNDICATE

Atlas Pipeline Partners (APL) announces offering of 10.3M common units
Berry Plastics (BERY) files to sell 16.5M shares of common stock for holders
BioScrip (BIOS) announces common stock offering
Boston Private Financial (BPFH) to repurchase preferred stock held by Carlyle Group
ChemoCentryx (CCXI) 5M share Secondary priced at $12.00
CombiMatrix (CBMX) files to sell 452,440 shares of common stock for holders
Fairway Group (FWM) 13.65M share IPO priced at $13.00
Performant Financial (PFMT) files to sell 6.5M shares of common stock

• Pentagon Plans for the Worst in Syria (WSJ)
• Russia and US agree to Syria conference after Moscow talks (FT)
• Hedge Funds Rush Into Debt Trading With $108 Billion (BBG)
• Detroit is the new "deep value" - Hedge funds in search of distress take a look at Detroit (Reuters)
• Commodities hedge funds suffer weak first quarter (FT)
• But... but... Abenomics - Toshiba posts 62% decline in Q1 net profit (WSJ)
• Americans Are Borrowing Again but Still Less Than Before Freeze (WSJ)
• Man Utd announce Alex Ferguson to retire (FT)
• Asmussen Says ECB Discussed ABS Purchases to Spur SME Lending (BBG)
• Benghazi Attack Set for New Review (WSJ)
• Belgium Says 31 People Arrested Over $50 Million Diamond Theft (BBG)
• Brazilian diplomat Roberto Azevêdo wins WTO leadership battle (FT)
• Bangladesh Garment Factory Building Collapse Toll Reaches 782 (BBG)

Overnight Media Digest

WSJ

* America's credit crunch is easing.

* Airlines' restructuring has produced a sharp reduction in service that is curtailing traveler choice and some local economies even as it improves the industry's health.

* The Dow Jones Industrial Average closed at 15056.20, piercing another record threshold as investors' fear of missing out on the rally has replaced potential concerns about the risk of a selloff.

* Bangladesh's factory disasters spotlight poor working conditions there. But for apparel retailers seeking better standards - without giving up low-wage workers - prospects aren't much better elsewhere in the developing world.

* Investors faced little resistance in their months-long campaign to push the Japanese currency within one yen of 100 to the dollar. Covering that last bit of ground is proving much harder.

* China's trade swung to a surplus in April after showing a small deficit in March as exports posted a better-than-expected rise - but analysts cautioned that the 14.7 percentage growth in exports during the month may have been a bit too good to be true.

FT

Qatar has sounded out International Airlines Group about becoming the largest shareholder in the British Airways parent by buying a 12 percent stake held by Spanish lender Bankia.

Santander and three private equity companies are making plans to list the Spanish bank's U.S. auto finance business in the coming months.

Proxy firm Glass Lewis called for JPMorgan Chase & Co investors to vote in favour of separating the roles of chairman and chief executive.

Portugal raised 3 billion euros in its first new bond issue since asking for an international bailout.

Car sales in the UK rose by almost a third last month in what was their best April since before the financial crisis.

Swiss bank Credit Suisse has appointed its UK investment banking head as vice chairman of its EMEA investment banking department.

NYT

* A project to create a plant that glows in the dark, potentially leading the way for trees that can replace streetlamps, has been denounced for tinkering with genes.

* Governance for Owners, an obscure London firm, may determine whether Jamie Dimon keeps his dual role as chief executive and chairman of JPMorgan Chase. The firm has been tasked with voting the shares of the bank's largest shareholder - the asset management behemoth BlackRock

* The Chinese government said trade figures for April showed some improvement, but weren't strong enough to pull the nation out of its economic quagmire.

* New York's top banking regulator has begun an investigation into pension-advance firms, the lenders that woo retirees to sign over their monthly pension checks in return for cash.

* Senator Marco Rubio disputed a Heritage Foundation analysis released Monday that found the legislation offering a pathway to citizenship would produce a "lifetime fiscal deficit" of at least $6.3 trillion.

Canada

THE GLOBE AND MAIL

* Declaring that "American democracy has been hacked," former U.S. vice president Al Gore told a Toronto audience that his countrymen needed to wake up to the special interests that have a grip on the levers of power in the U.S. Congress and are able to block legislation on a range of policy issues including his signature cause, global climate change. (http://link.reuters.com/mys87t)

* The National Research Council, which gave Canada canola and the atomic clock, will now be taking its scientific cues from Canadian industry as part of a makeover of the country's flagship research labs. (http://link.reuters.com/vus87t)

Reports in the business section:

* WestJet Airlines Ltd is heading to the runway with an expanded fleet, raising concerns that the surge in capacity will lead to a renewed industry price war. (http://link.reuters.com/wus87t)

NATIONAL POST

* Two years after its funding was slashed by Italy's debt-laden government, the Toronto-based Italian language daily newspaper Corriere Canadese suspended operations after more than 58 years. (http://link.reuters.com/zus87t)

* Toronto city council has overruled Mayor Rob Ford and his executive by voting to have a debate on controversial transit taxes and fees at some point this week. A coalition of councillors led by Toronto Transit Commission Chair Karen Stintz managed to scrape together the necessary two-thirds' support to seize a matter that had been deferred by the executive committee. (http://link.reuters.com/dys87t)

FINANCIAL POST

* British Columbians are free to elect the government they want, but in the end extreme views on pipelines will moderate, Asim Ghosh, the Chief Executive of Husky Energy, one of Canada's largest oil companies, predicted on Tuesday. (http://link.reuters.com/gys87t)

* The fight over TransCanada Corp's proposed Keystone XL project probably will be repeated as companies build more conduits to carry oil and gas to U.S. markets, the former chief pipeline safety regulator Brigham McCown said. (http://link.reuters.com/nys87t)

China

CHINA SECURITIES JOURNAL

- Average wholesale prices of 18 vegetables in 36 big Chinese cities fell 5.4 percent between April 29-May 5 from the prior week. Egg retail prices slipped 0.4 percent from a week ago while pork wholesale prices dipped 0.6 percent, data from the Ministry of Commerce showed.

SECURITIES TIMES

- Air China Ltd , Asia's second-largest airline by market value, and its subsidiary will jointly buy 100 aircraft, it said in an exchange statement on Wednesday.

SHANGHAI SECURITIES NEWS

-- China's entrepreneurial hub of Wenzhou has submitted to the local finance authorities a proposal to regulate private lending. Some of the proposed measures include making it mandatory for individuals and private companies to register lending of above 2 million yuan ($325,000) and 5 million yuan respectively.

-- Four banks in Jiangsu province that are planning to list saw their net profit rise over 10 percent in 2012. But their non-performing loans have also surged, with Jiangyin Rural Commercial Bank and Jiangsu Wujiang Rural Commercial Bank posting a 177 percent and 159 percent jump in bad debts respectively.

CHINA DAILY

-- Privately-held wealth on the Chinese mainland hit 8- trillion yuan in 2012, with more than 700,000 individuals now holding 10 million yuan or more in investable assets, more than double the number at the end of 2008, according to a report by China Merchants Banks and U.S. consulting firm Bain and Co.

-- China's solar panel exporters see tougher times ahead as the European Union moves closer to imposing punitive duties on Chinese exports. Industry officials said Chinese firms will lose their competitive edge over European counterparts if they are slapped with duties of above 20 percent.

SHANGHAI DAILY

-- Pudong New Area's environment watchdog is investigating an industrial zone in Hangtou Town after about 300-meter stretch of a river there turned blue. Pictures posted by residents online showed blue sewage was being discharged from rain water pipes into the river. Some amount of oil slick was also found on the surface of the water.

-- China has ordered greater scrutiny of bond sales by local government finance vehicles with higher levels of debt, people with knowledge of the matter said. The National Development and Reform Commission, which approves bond sales by local government firms to finance projects, will more strictly review application for debt with debt-to-asset ratios exceeding 65 percent.

PEOPLE'S DAILY

- The implanting of early rice in China is estimated to rise 1.13 million Mu from last year to 87.61 million Mu this year.

Corporate Finance

* Qatar has approached International Airlines Group , the owner of British Airways and Iberia, with an informal offer to become the company's largest shareholder by buying the 12 percent stake held by Spain's nationalised lender Bankia, the Financial Times reported.

* Lehman Brothers Holdings has put the Ritz-Carlton, Kapalua Resort, a 54-acre luxury condo and hotel resort in Maui, Hawaii, on the block as it continues to sell off its real estate holdings to pay off creditors, said two sources familiar with the deal.

* Generali's private bank BSI attracted bids below its estimated 2.3 billion Swiss francs ($2.42 billion) book value, four people familiar with the situation said.

* Credit Suisse investment banker Sebastian Grigg has been appointed vice chairman of the bank's EMEA investment banking department after having spent six years at the helm of the company's UK investment banking team.

* John Paulson's gold fund lost 27 percent in April amid a big sell-off in the commodity, bringing the total year to date loss for the under $1 billion fund to 47 percent, a source familiar with the fund said.

Fly On The Wall 7:00 Am Market Snapshot

ANALYST RESEARCH

Upgrades

Ametek (AME) upgraded to Buy from Neutral at Citigroup
IAMGOLD (IAG) upgraded to Buy from Hold at Canaccord
Lowe's (LOW) upgraded to Buy from Neutral at ISI Group
lululemon (LULU) upgraded to Buy from Neutral at Sterne Agee
Myriad Genetics (MYGN) upgraded to Buy from Neutral at Mizuho
Orion Marine (ORN) upgraded to Outperform from Market Perform at FBR Capital
Trex Company (TREX) upgraded to Buy from Hold at BB&T
U.S. Auto Parts (PRTS) upgraded to Buy from Neutral at Roth Capital

Downgrades

Bed Bath & Beyond (BBBY) downgraded to Cautious from Neutral at ISI Group
CA Technologies (CA) downgraded to Perform from Outperform at Oppenheimer
Calavo Growers (CVGW) downgraded to Equal Weight from Overweight at Stephens
Comerica (CMA) downgraded to Underperform from Neutral at RW Baird
Douglas Dynamics (PLOW) downgraded to Neutral from Outperform at RW Baird
Emerson (EMR) downgraded to Market Perform from Outperform at Bernstein
IDEX Corp. (IEX) downgraded to Neutral from Buy at Citigroup
Plains All American (PAA) downgraded to Neutral from Outperform at Credit Suisse
ValueClick (VCLK) downgraded to Equal Weight from Overweight at Stephens
ValueClick (VCLK) downgraded to Hold from Buy at Cantor
tw telecom (TWTC) downgraded to Perform from Outperform at Oppenheimer

Initiations

Bonanza Creek (BCEI) initiated with an Outperform at Northland Securities
Carter's (CRI) initiated with a Neutral at Piper Jaffray
Children's Place (PLCE) initiated with a Neutral at Piper Jaffray
Eaton (ETN) initiated with an Outperform at Bernstein
Spirit Airlines (SAVE) initiated with a Buy at Buckingham
Travelers (TRV) initiated with an Outperform at Raymond James

HOT STOCKS

Berkshire Hathaway (BRK.A) agreed not to take stake larger than 25% in DaVita (DVA)
Pioneer Southwest Energy (PSE) received buyout offer from Pioneer Natural Resources (PXD)
Whole Foods (WFM) announced two-for-one stock split
Statoil (STO), Exxon Mobil (XOM) to sanction the Julia oilfield development in Gulf of Mexico
Trinity Industries (TRN) formed $1B leasing JV and long term capitalization of TRIP
WebMD (WBMD), Icahn entered agreement on board appointment
Talisman Energy (TLM) announced agreement to exit Poland

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Cognizant (CTSH), Delek Logistics (DKL), Kinross Gold (KGC), Demand Media (DMD), SandRidge Energy (SD), Live Nation (LYV), DaVita (DVA), Symantec (SYMC), WebMD (WBMD)

Companies that missed consensus earnings expectations include:
Vista Gold (VGZ), Marathon Oil (MRO), Zillow (Z), JBT Corporation (JBT), C.H. Robinson (CHRW), Primerica (PRI), URS Corporation (URS), Williams (WMB), Electronic Arts (EA)

Companies that matched consensus earnings expectations include:
American Water (AWK), KapStone (KS), Williams Partners (WPZ), ACADIA (ACAD), Onyx Pharmaceuticals (ONXX)

NEWSPAPERS/WEBSITES

• Samsung (SSNLF) now faces a new, enviable Apple-like (AAPL) challenge: a mammoth pile of unspent, accumulated cash. The company said its cash and cash equivalents grew to nearly $40B at the end of March. After stripping out debt, their net cash position is $28.5B, the Wall Street Journal reports
• America's credit crunch is easing. In all, some $713B in credit flowed to U.S. households and non-financial businesses last year, double 2011's $336B, according to the Fed. But that’s still a fraction of the $2.2T in credit that lifted American consumers and businesses in 2007, the Wall Street Journal reports
• With the inflation rate about half of the Fed's 2% target, the central bank is facing a major test and some experts wonder whether it will eventually need to increase its already aggressive bond buying program, Reuters reports
• Target (TGT) is rolling out a service that combines social networking and discounts to attract shoppers into its physical stores. The company’s program relies on shoppers using their Facebook (FB) accounts, and they can only redeem the offers they choose in Target's U.S. stores, not online, Reuters reports
• Air China, Asia’s largest carrier by market value, plans to add 100 Airbus SAS (EADSY) planes to help meet rising travel demand, Bloomberg reports
• Global iron ore supplies will expand faster than demand over the long term, lowering prices and reducing volatility of the raw material used to make steel, says BHP Billiton (BHP), Bloomberg reports

SYNDICATE

Apollo Global (APO) announces offering of 21.1M Class A shares by holders
Apollo Global (APO) files to sell 15.8M Class A shares for holders
Armada Hoffler (AHH) 16.525M share IPO priced at $11.50
Brookfield Infrastructure (BIP) 5.677M share Spot Secondary priced at $37.75
Cobalt (CIE) files to sell 50M shares of common stock for holders
Colfax (CFX) 10M share Secondary priced at $44.25
Isis Pharmaceuticals (ISIS) files to sell common stock
Javelin Mortgage (JMI) announces public offering of 6M common stock shares
Pulaski Financial (PULB) announces $10M "at-the-market" equity offering
Resolute Energy (REN) files to sell 13.25M shares of common stock
Tornier (TRNX) files to sell 7M shares in common stock
Vantiv (VNTV) 38.6M share Secondary priced at $23.75
Webster Financial (WBS) files to sell 8.75M shares of common stock for holders

ACTIVIST/PASSIVE FILINGS
Carl Icahn raises stake in Herbalife (HLF) to 16.48% from 15.55%
40 North Industries reports 5.01% passive stake in Mattress Firm (MFRM)

• PBOC Says China Shouldn’t Be ’Blindly Optimistic’ on Inflation (BBG)
• Foreigners Buying Half of London New Homes Prop Up Building (BBG) - first they come for the foreign deposits, then for the real assets...
• Investors Rediscovering Margin Debt (WSJ) - well, yes: it is at record highs
• Japanese investors switch to foreign bonds (FT)
• Japan's Energy Costs Rise as Yen Weakens (WSJ) as reported here three months ago (ZH)
• China issues new rules targeting wealth management fund pools (RTRS)
• Navy $37 Billion Ships Seen Unsuitable Have 2-Year Window (BBG)
• New York may have to drop claims against BofA over Merrill (RTRS)
• FBI Rejects Boston Police Stance in Spat Over Terror Data (BBG)
• Chief of UK's biggest mutually-owned company resigns on fears it could require a bailout (WSJ)
• In eastern Syria oil smugglers benefit from chaos (RTRS)
• Icahn With Southeastern Challenges Silver Lake’s Dell Offer (BBG)
• SEC Is Pressed to Revamp Executive Trading Plans (WSJ)
• JPMorgan sued over credit card debt collecting (FT)
• Netflix, Reed Hastings Survive Missteps to Join Silicon Valley's Elite (BBG)
• Temporary Workers Near U.S. Record Makes Kelly a Winner (BBG)
• Leading Bulgaria parties tied before Sunday vote: poll (Reuters)

Overnight Media Digest

WSJ

* The federal deficit is shrinking faster than expected due to surging tax revenue and bailout paybacks, altering the budget debate.

* During his visit to Russia last year, deceased Boston bombing suspect Tamerlan Tsarnaev was coolly received by the Dagestan region's Islamists, who found him to be brash.

* The Yen's decline signals hopes for a more groundbreaking economic shift: the reversal of nearly two decades of stagnation, weak demand and declining prices.

* A multibillion-dollar settlement of a federal investigation into Johnson & Johnson's sales practices is on hold, as J&J seeks to avoid wording in the agreement that could leave it vulnerable to private lawsuits.

* Futures regulators are close to an agreement that would end a months-long standoff over a central plank of the 2010 Dodd-Frank law and finally bring more transparency to the trading of swaps, the complex financial contracts at the heart of the financial crisis.

FT

A report by Kofi Annan's Africa Progress Panel to be published on Friday criticises mining deals made by Eurasian Natural Resources Corp for "opaque concession trading" costing the Democratic Republic of Congo $750 million.

The Financial Reporting Council, the UK's accounting watchdog, has launched two separate investigations into auditing firm KPMG - one relating to its audit of car dealer Pendragon and the other probing into a KPMG member's shareholding in a client company.

British Prime Minister David Cameron took on critics in his party who demand Britain's immediate exit from the European Union, reassuring international investors that the country's future lay within the EU.

An influential committee of MPs recommended a third or possibly even a fourth runway at London's Heathrow airport on Friday, boosting its controversial efforts to expand.

Chief Executive Stephen Hester is convinced that Royal Bank of Scotland is entering its last phase of repair ahead of reprivatisation, even after its poor first-quarter results last week.

NYT

* The Bank of Japan's efforts to reinvigorate the nation's economy are showing results, at least in the sinking value of the yen.

* Regulators outlined a proposal that could make Internet service on airplanes cheaper, at speeds up to 30 times faster than the service many people have in their homes.

* Mail Online, The Daily Mail's site, has expanded on the news and business sides with offices in New York, and coverage of celebrities in Los Angeles.

* According to Delta Air Lines executives, the carrier's bright and spacious new terminal at Kennedy Airport in New York reflects the industry's new priorities. As financial health improves, airlines are trying to lure passengers with better amenities and service instead of the lowest fares.

* Merck and GlaxoSmithKline will charge less than $5 a dose to expand protection from the virus known as HPV to millions of girls in the poorest countries.

Canada

THE GLOBE AND MAIL

* Conservative backbenchers are pushing to reopen the abortion debate, despite public assurances by Prime Minister Stephen Harper that the issue is settled.

* Nova Scotia's economic and rural development minister Percy Paris resigned from cabinet late Thursday night after he says he lost his composure during an incident at the provincial legislature involving an Opposition member.

Reports in the business section:

* Mark Jaccard, one of Canada's top environmental economists, has a stark warning for the country's oil sands producers: find ways to dramatically cut carbon emissions or risk becoming the buggy-whip producers of the 21st century.

NATIONAL POST

* Juan Ramon Fernandez, described by police in Canada as "a perfect gangster", died the perfect Hollywood gangster death - ambushed by mob rivals, dying in a hail of bullets and his body burned in a field in the picturesque countryside outside Palermo, the historic capital city of Sicily.

* The steel trusses of a new multimillion dollar sawmill formed the backdrop for Liberal Leader Christy Clark as she touted her government's forests strategy during a campaign whistlestop Thursday in Burns Lake, where little more than a year ago an explosion and fire at the previous mill devastated the community.

FINANCIAL POST

* Mobilicity is officially on the block and Telus Corp's chief executive Darren Entwistle would consider buying what he calls a "nice to have" asset, depending on feedback from the government.

China

CHINA SECURITIES JOURNAL

- Net profit at 19 China A-share listed brokerages hit 1.52 billion yuan ($247.92 million) in April, down 22.7 percent from 1.97 billion yuan in March.

- China has raised the minimum limit of registered capital for insurance brokers and insurance agencies to 50 million yuan, China Insurance Regulatory Commission said.

CHINA DAILY

- The Ministry of Commerce is planning to assist manufacturers to identify "specific regions" in key emerging export markets, particularly in India and other BRICS nations, to replace lost business in the eurozone and the United States.

- Total overdue loans for China's top 10 listed banks rose to 486.5 billion yuan ($79.3 billion) by the end of last year, up 29 percent from 2011, according to a report released by PwC.

- Beijing-based iResearch Consulting Group said Chinese shoppers spent 352 billion yuan ($57.4 billion) online in the first quarter of the year, a drop of 17.1 percent compared to the previous quarter. However, annual turnover should still reach 1.85 trillion yuan, the company said.

- Three people were killed and six injured in a landslide on Thursday near a village in Lushan county, Sichuan province. The landslide also blocked the road from Lushan county to Baoxing county in Ya'an city.

PEOPLE'S DAILY

- Chinese President Xi Jinping met visiting Israeli Prime Minister Benjamin Netanyahu on Thursday and pledged to make more efforts towards peace in the Middle East.

Corporate Finance

* Activist investor Carl Icahn and Southeastern Asset Management Inc, two of Dell Inc's largest shareholders, have proposed an alternative to a $24.4 billion buyout deal led by founder Michael Dell, the Wall Street Journal reported.

* U.S. private equity firm Carlyle Group has submitted a bid for Anglo-Australian miner Rio Tinto's 80 percent stake in the Northparkes copper mine in Australia, Dow Jones reported.

* China's $482 billion sovereign wealth fund China Investment Corp is set to appoint a vice mayor of Shanghai as its new chairman, three sources with knowledge of the deal told Reuters.

* Banks have been approached about a potential syndicated loan to back the privatisation of Royal Mail Group, banking sources said on Thursday.

* Royal Dutch Shell and India's Oil and Natural Gas Corp are exploring the possibility of a strategic tie-up to jointly bid for global oil and gas assets, the Economic Times reported.

* Bankers are looking towards the U.S. debt market to raise 900 million euros ($1.18 billion) for a buyout of industrial ceramics firm CeramTec, spurning Europe where risky debt is in shorter supply, bankers said on Thursday.

* French insurer Scor has emerged as the lead bidder for Generali's U.S. life reinsurance business in a deal that could be announced shortly, two people familiar with the matter said.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

American Water (AWK) upgraded to Buy from Neutral at Citigroup
Arkansas Best (ABFS) upgraded to Buy from Neutral at Citigroup
Boston Scientific (BSX) upgraded to Outperform from Market Perform at Wells Fargo
Edison International (EIX) upgraded to Buy from Neutral at Citigroup
Granite Construction (GVA) upgraded to Neutral from Sell at Goldman

Downgrades

AES Corp. (AES) downgraded to Neutral from Buy at UBS
Atlas Energy (ATLS) downgraded to Neutral from Outperform at RW Baird
Cablevision (CVC) downgraded to Neutral from Buy at Citigroup
Dean Foods (DF) downgraded to Equal Weight from Overweight at Stephens
Dendreon (DNDN) downgraded to Sell from Neutral at Citigroup
Grand Canyon (LOPE) downgraded to Neutral from Outperform at RW Baird
LHC Group (LHCG) downgraded to Hold from Buy at Deutsche Bank
Optimer (OPTR) downgraded to Neutral from Outperform at RW Baird
Pinnacle West (PNW) downgraded to Sell from Neutral at Citigroup
Rent-A-Center (RCII) downgraded to Hold from Buy at Canaccord
Salix (SLXP) downgraded to Neutral from Buy at Janney Capital
Shire (SHPG) downgraded to Neutral from Overweight at JPMorgan

Initiations

3D Systems (DDD) initiated with a Buy at Janney Capital
Actavis (ACT) initiated with an Outperform at BMO Capital
Allergan (AGN) initiated with an Outperform at BMO Capital
Emeritus (ESC) initiated with an Outperform at Wells Fargo
Ensign Group (ENSG) initiated with a Market Perform at Wells Fargo
Forest Labs (FRX) initiated with an Underperform at BMO Capital
J2 Global (JCOM) initiated with an Outperform at Wedbush
Mylan (MYL) initiated with an Underperform at BMO Capital
Splunk (SPLK) initiated with a Market Perform at FBR Capital
Teva (TEVA) initiated with an Outperform at BMO Capital
Workday (WDAY) initiated with an Outperform at Oppenheimer

HOT STOCKS

Icahn reported 4.52% stake in Dell (DELL), sent buyout proposal to board
JPMorgan(JPM) sued by California for "fraudulent, unlawful debt collection practices"
KeyBank (KEY) to acquire Bank of America (BAC) CMBS servicing portfolio, Berkadia CMBS business
AutoNavi (AMAP) announced strategic alliance with Alibaba (ALBCF)
Novartis (NVS) drug Ilaris approved by FDA
Amgen (AMGN), Zhejiang Beta Pharma announced joint venture in China

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Great Plains Energy (GXP), Nelnet (NNI), Darling (DAR), Molycorp (MCP), NVIDIA (NVDA), Stifel Financial (SF), MBIA (MBI), CareFusion (CFN), priceline.com (PCLN), bebe stores (BEBE)

Companies that missed consensus earnings expectations include:
Sterling Construction (STRL), AutoNavi (AMAP), AuRico Gold (AUQ), Flotek (FTK), Allscripts (MDRX), Sotheby's (BID)

Companies that matched consensus earnings expectations include:
Lexicon Pharmaceuticals (LXRX), Stellus Capital (SCM), Air Lease (AL)

NEWSPAPERS/WEBSITES

• Small investors are borrowing against their portfolios at a rapid rate, reaching levels of debt not seen since the financial crisis. The trend, driven by rising stock values and low interest rates, is sparking a growing debate among market watchers, the Wall Street Journal reports
• Disney’s (DIS) cable sports channel ESPN has had discussions with at least one major U.S. carrier to subsidize wireless connectivity on behalf of its smartphone users, sources say. Under one potential scenario, the company would pay a carrier to guarantee that people viewing ESPN mobile content wouldn't have that usage counted toward their monthly data caps, the Wall Street Journal reports
• China's bond market regulator closed a loophole that allowed banks that sell high-yielding wealth management products to evade regulatory requirements by moving money between the WMP accounts they manage and their own proprietary accounts, sources say, Reuters reports
• Dish Network (DISH) lined up Jefferies Group to help it finance its $25.5B bid for Sprint Nextel (S) as it tries to convince the company its offer is better than Softbank’s (SFTBF), sources say, Bloomberg reports
• Toyota’s (TM) years of fighting the yen is over, at least for now. The weakening yen breached 100 against the dollar in U.S. trading yesterday, opening the way for Japan to emerge from an unprecedented and largely uninterrupted five-year stretch where the currency’s appreciation beyond that level roiled exporters and their ability to sell cars and other products abroad, Bloomberg reports

SYNDICATE

3D Systems (DDD) 7.5M share Secondary priced at $40.00
Apollo Global (APO) 21.1M share Secondary priced at $25.00
Ares Commercial Real Estate (ACRE) files $1.5B mixed securities shelf
BioAmber (BIOA) 8M Unit IPO priced at $11.00
Capital Acquisition (CLACU) 18M Unit IPO priced at $10
Discovery Labs (DSCO) files to sell common stock
First NBC Bank (NBCB) 4.17M share IPO priced at $24.00
Franklin Street (FSP) 15M share Secondary priced at $14.00
Omeros (OMER) announces $16.2M registered direct offering
Preferred Apartment (APTS) files to sell 5.71M shares for holders
Santarus (SNTS) files to sell common stock for Cosmo Technologies
Tornier (TRNX) 7M share Secondary priced at $16.15
U.S. Auto Parts (PRTS) files to sell 5.05M shares of common stock for holders
Venaxis (APPY) files to sell $23M of common stock

• China cash crunch deepens as PBOC withholds funding (FT), just a week behind ZH
• Platts in hot manipulated crude again: Traders Try to Game Platts Oil-Price Benchmarks (WSJ)
• Kabul Suspends Security Talks With U.S., jeopardizing plans to maintain a U.S. military presence (WSJ)
• Afghan government irked over U.S. talks with Taliban (Reuters)
• BOJ Kuroda: BOJ to Adjust Policy If Japan Econ Changes (MNI)
• Google Considering Private-Equity Alliances (BBG)
• Korean Air Buying 747-8s to End Boeing’s Sales Drought (BBG)
• Syria's Islamists seize control as moderates dither (Reuters)
• SEC considers policy shift on admissions of wrongdoing (FT)
• U.K. Banker Bonuses Face Decade Delays in Industry Overhaul (BBG)
• French EU-wariness complicates life for Hollande (Reuters)
• How China Fudges Its Numbers (WSJ)
• House Votes to Ban Abortions After 20 Weeks of Pregnancy (BBG)
• Deloitte banned for StanChart ‘violations’ (FT)

Overnight Media Digest

WSJ

* U.S. President Barack Obama will make the case for a new phase in nuclear weapons reductions that would reduce arsenals by another one-third in a major foreign policy speech in Berlin on Wednesday.

* Signs of a stronger U.S. economy are rippling through the bond markets, sending investors and corporate leaders racing to prepare for higher interest rates.

* Dish Network said it won't submit a new offer for Sprint Nextel by its Tuesday deadline, a move that appears to clear the way for the third largest U.S. wireless carrier to be bought by SoftBank of Japan.

* The G-8 agreed to proposals to tackle tax avoidance and evasion that call for new laws to stop businesses from shifting profits across borders.

* Two of the largest independent U.S. high-frequency-trading firms are in early merger discussions, as a downturn in trading opportunities has spurred cutbacks and tie-up talks among rivals.

RGM Advisors LLC and Allston Trading LLC have discussed a deal that would combine their respective strengths in automated stock trading and futures markets, according to people close to the talks.

* U.S. securities regulators plan to require certain defendants to admit to wrongdoing as a condition of settling securities-fraud charges, SEC Chairman Mary Jo White said Tuesday.

* Some oil traders say they try to skew Platts oil-price benchmarks by offering to do small deals at a loss, with the goal of doing bigger ones at better prices.

* Billionaire investor Carl Icahn has emerged as the last potential foil standing between Michael Dell and his deal to buy his company, after Icahn bought nearly $1 billion of shares from another dissident investor.

* Smithfield Foods's CEO could receive more than $46 million in merger-related payments after helping to orchestrate his company's sale to China's Shuanghui for $4.7 billion.

FT

Cyprus has asked leaders of the Eurozone to overhaul terms of its 10 billion euro bailout, warning that the country might not be able to meet the current rescue terms as it had harmed the country's economy and banking system even more than expected.

Brazil's largest cement producer, Votorantim Cimentos, has scrapped its plans to list in what would have been the second-largest initial public offering globally this year. Deloitte LLP's financial advisory unit will pay $10 million and refrain for one year from new business with certain New York banks to settle accusations over its review of money laundering controls at Standard Chartered Bank.

Chinese network equipment and cellphone maker Huawei Technologies Co would consider buying Finland's Nokia to help it expand its smartphone business, Huawei's head of consumer business said, but added that Microsoft's Windows phone platform used by Nokia as well as Huawei was "weak".

Dutch engineering company Royal Imtech, grappling with fraud at its German and Polish operations that had cost the company hundreds of millions of euros, is considering pressing charges against some members of its former management in those countries.

Oscar-winning actress Angelina Jolie's stunt double has sued Rupert Murdoch's News Corp over allegations its British newspapers hacked her phone, opening up a new front in the litigation against the owner of The Sun and the now closed News of the World.

NYT

* Ben Bernanke faces the growing challenge of shaping investor expectations amid increasing signs that his era as Federal Reserve chairman is ending.

* Google may have pushed the boundaries of antitrust laws with its $1 billion buy of Israeli mapping startup Waze and Google's effort to skirt regulation may invite more scrutiny.

* The American Medical Association has officially recognized obesity as a disease, a move that could induce physicians to pay more attention to the condition and spur more insurers to pay for treatments.

* In resisting calls to ban ads for nutritionally questionable food, Nickelodeon argued that its job was children's entertainment, not nutrition.

* Chrysler and National Highway Traffic Safety Administration resolved their differences, and the automaker will inspect and upgrade 2.7 million Jeep sport utility vehicles for possible defects after the government had claimed they were prone to catastrophic fires in rear-end collisions.

* Tom Wheeler, President Obama's nominee to head the Federal Communications Commission told a Senate committee on Tuesday that his top priorities, if he is confirmed, would be consumer protection, increasing competition and providing sufficient predictability so companies know what rulings to expect.

* Builders stepped up home construction in May and applied for permits to build single-family homes at the fastest pace in five years. The gains show housing remained a crucial source of growth for the economy. Housing starts rose 6.8 percent in May, to a seasonally adjusted annual rate of 914,000, the Commerce Department said on Tuesday.

* A federal appeals court ruled that Anthony Chiasson, the co-founder of Level Global Investors, and Todd Newman, a former portfolio manager at Diamondback Capital Management, will not have to report to prison while they fight their insider trading convictions.

* Federal and state regulators are united in their concern that outside consulting firms have produced some shoddy work for Wall Street banks. Yet on Tuesday, the regulators took starkly divergent stances toward the multibillion-dollar consulting industry: while federal authorities seemed to reinforce the industry's power, a state agency tried to undercut it

Canada

THE GLOBE AND MAIL

* Amid questions about the Prime Minister's Office, Senate spending, Justin Trudeau's work for charities and Thomas Mulcair's run-in with Mounties on Parliament Hill, MPs have agreed to adjourn the House of Commons.

* After offering to pay back charities and other organizations he gave speeches to, Liberal Party leader Justin Trudeau doesn't appear to have many takers. Trudeau has come under fire from Conservatives who say he had no business accepting the money - from charities in particular.

* Canada's tourism sector is being hit hard by a foreign-service job action. Walkouts in Canadian embassies and consulates, and especially at those with busy visa operations, have created backlogs for tourist visas - and the threat of long delays has put off many tourists thinking of travelling to Canada.

Reports in the business section:

* Verizon Communications Inc confirmed on Tuesday that it is considering an entry into Canada's C$19 billion ($18.60 billion) wireless market in the wake of a report earlier this week by the Globe and Mail.

* U.S. President Barack Obama said in a television interview aired late Monday that Bernanke has served "longer than he wanted," the latest sign that the Fed chairman is poised to leave after an epic struggle to keep the U.S. economy out of depression.

* Scotia Capital Inc has admitted it failed to adequately supervise clients who were doing "high closing" trading manipulations to boost share prices at the end of trading days in 2009. The Investment Industry Regulatory Organization of Canada, which is Canada's brokerage industry regulator, approved the settlement details at a hearing Tuesday, requiring Scotia Capital to pay C$150,000 in penalties and C$10,000 to cover IIROC's investigation costs.

NATIONAL POST

* Conservative Prime Minister Stephen Harper said Tuesday that it was inappropriate for Liberal Party leader Justin Trudeau to take money from charities, but refused to address claims that his taxpayer-funded office distributed documents to the media about the story. An Ontario newspaper revealed that the Prime Minister's Office supplied it with documents purporting to show that three organizations that contracted Trudeau to speak at events in 2006 and 2007 ended up losing money.

* Canada's Parliamentary Poet Laureate, wondering aloud why the government never asks him to write poems, has inadvertently answered his own question. "I wish that my government had asked me to write poetry about immigration policy, about Idle No More, about Canada's complicity in the Middle East, the Enbridge pipeline," Fred Wah, a Saskatchewan-born poet now living in Vancouver, recently told an audience at an Edmonton literary festival.

FINANCIAL POST

* Economists are recasting their forecasts upward for Canada and other countries after disappointing performances in 2012. Those turns of fortune hinge on a less crisis-challenged Europe and - critically - growing economic momentum in the United States.

China

CHINA SECURITIES JOURNAL

- The pilot property-tax scheme has been submitted to China's State Council by local governments of Beijing, Shenzhen, Nanjing and Hangzhou, sources said, adding that the draft proposals are in the final stages.

- China's cargo throughput by volume at major ports fell 1.8 percent in May from a month ago to 911.73 million tons, data from the ministry of transport showed.

SHANGHAI SECURITIES NEWS

- President Xi Jinping has launched a year-long campaign to clean up "undesirable work styles" within the Communist Party. Formalism, bureaucracy, hedonism and extravagance must be stamped out to ensure and win back public support, Xi said.

-- Pollution cases that poison more than 30 people or cause an evacuation of over 5,000 will lead to criminal charges, an official at the ministry of environmental protection said, as it announced measures that included harsher punishments.

SHANGHAI DAILY

- A venture between Daimler AG and Warren Buffett-backed BYD Co aims to launch electric cars under the Denza brand by the end of July, the company said. Shenzhen BYD Daimler New Technology Co, owner of Denza, said its first mass-production model is scheduled to debut globally at the end of this year.

PEOPLE'S DAILY

- China's State Council at its executive meeting expressed concerns raised by the poor quality of baby milk powder, saying it will undermine confidence in society, the newspaper said in a commentary

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Adobe (ADBE) upgraded to Buy from Neutral at BofA/Merrill
Ball Corp. (BLL) upgraded to Outperform from Neutral at RW Baird
CEMEX (CX) upgraded to Overweight from Equal Weight at Barclays
Gevo (GEVO) upgraded to Outperform from Market Perform at Raymond James
Sonic (SONC) upgraded to Equal Weight from Underweight at Morgan Stanley
Tanger Factory (SKT) upgraded to Neutral from Sell at Goldman
United Natural Foods (UNFI) upgraded to Overweight from Neutral at Piper Jaffray

Downgrades

American Eagle (AEO) downgraded to Neutral from Buy at Citigroup
Arthur J. Gallagher (AJG) downgraded to Market Perform at William Blair
BlackBerry (BBRY) downgraded to Underperform from Market Perform at Bernstein
Brown & Brown (BRO) downgraded to Market Perform from Outperform at William Blair
Century Aluminum (CENX) downgraded to Underperform from Neutral at BofA/Merrill
Cliffs Natural (CLF) downgraded to Underperform from Neutral at BofA/Merrill
Nexstar (NXST) downgraded to Hold from Buy at Gabelli
Novo Nordisk (NVO) downgraded to Underperform from Neutral at Exane BNP Paribas
Sonoco Products (SON) downgraded to Neutral from Outperform at RW Baird
Sprint (S) downgraded to Neutral from Outperform at Macquarie
Tesaro (TSRO) downgraded to Market Perform from Outperform at BMO Capital
Tetra Tech (TTEK) downgraded to Hold from Buy at Brean Capital

Initiations

Coca-Cola (KO) initiated with an Outperform at Credit Suisse
Dr Pepper Snapple (DPS) initiated with a Neutral at Credit Suisse
Keryx (KERX) initiated with an Overweight at JPMorgan
Neurocrine Biosciences (NBIX) initiated with an Outperform at Oppenheimer
PepsiCo (PEP) initiated with a Neutral at Credit Suisse
Superior Energy (SPN) initiated with an Outperform at Cowen

HOT STOCKS

Southeastern Asset said Icahn in best position to lead alternative Dell (DELL) transaction
Southeastern lowered stake in Dell (DELL) to 4.1% after Icahn sale
Nvidia (NVDA) to begin licensing GPU cores, visual computing portfolio (SNE, INTC, GOOG)
American Medical Assn. backs ban of marketing energy drinks to children (MNST, PEP, KO)
Kodak (EKDKQ) seeks approval for $406M rights offering
CIT Group (CIT) ordered 30 737 MAX 8s from Boeing (BA)
Alcatel-Lucent (ALU) to sell assets, reduce costs in three-year plan
Netflix (NFLX) to launch in the Netherlands later this year
Live Nation (LYV) acquired majority stake in BDG Music, terms not disclosed

EARNINGS

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

NEWSPAPERS/WEBSITES

• While Amazon.com (AMZN) has become the leader in online sales, Wal-Mart (WMT) doesn't want to simply clone their model and is instead creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, the Wall Street Journal reports
• RGM Advisors LLC and Allston Trading LLC, two of the largest independent U.S. high-frequency-trading firms, are in early merger discussions, as a downturn in trading opportunities has spurred cutbacks and tie-up talks among rivals, sources say, the Wall Street Journal reports
• Federal Reserve policymakers will likely announce today that they will keep buying bonds at a monthly pace of $85B, while keeping their options open to scale back the program later this year if the U.S. labor market continues to improve, Reuters reports
• SoftBank (SFTBF) cleared a major hurdle in its attempt to buy U.S. wireless provider Sprint Nextel (S), as rival bidder Dish Network (DISH) declined to make a new offer after SoftBank sweetened its own bid last week. SoftBank CEO Son is  closer to sealing the largest overseas acquisition by a Japanese company in history, after winning support from a key shareholder by raising SoftBank's offer to $21.6B, Reuters reports
• Google (GOOG), actively on the lookout for acquisitions, is for the first time considering forging alliances with private-equity firms to help it structure deals, Bloomberg reports
• Global telecommunications companies are chasing after deals from Kansas to Munich in a quest for revenue growth that could lead to the biggest year for mergers in the industry since at least 2006, Bloomberg reports

SYNDICATE

Biodel (BIOD) files to sell common stock
Bluebird Bio (BLUE) 5.94M share IPO priced at $17.00
Diamondback Energy (FANG) 6M share Secondary priced at $34.75
Gladstone (GOOD) to offer 1.1M shares of common stock
Intercept (ICPT) 1.73M share Secondary priced at $33.01
THL Credit (TCRD) files to sell 6.6M shares of common stock
Valeant (VRX) 23.53M share Secondary priced at $85.00
Virginia Heritage Bank (VGBK) 1.45M share Secondary priced at $14.25
Weyerhaeuser (WY) 29M share Secondary priced at $27.75

• Egypt on the edge after Mursi rebuffs army ultimatum (Reuters)
• Inside China's Bank-Rate Missteps (WSJ)
• Obama Urges Morsi to Respond to Protesters' Concerns (WSJ)
• How Fed’s 7% Jobless Avoids Deterring Bondholders Is Mystery (BBG)
• Obama Joins With Political Foe Bush at End of Africa Trip (BBG)
• China may introduce deposit insurance by year-end (China Daily)
• China’s Slowdown Could Slam Hong Kong (BBG)
• Government 'to ask Rothschild to advise on RBS split' (Telegraph)
• Martin Feldstein: The Fed Should Start to 'Taper' Now (WSJ)
• A Revitalized Car Industry Cranks Up U.S. Exports (WSJ)
• RBA Holds Rate at Record-Low Saying Aussie May Slide Further (BBG)
• Spain to Try Again on Bank Sales (WSJ)
• BOJ Said to Mull Upgrading Assessment to Talk of Recovery (BBG) - even more confidence...

Overnight Media Digest

WSJ

* A rare peek into the actions of China's leaders in a month when a Chinese cash crunch spooked global investors shows a leadership falling short in its struggle to redirect China's economy and also faltering in its efforts to communicate its intentions to markets.

* Edward Snowden, the former National Security Agency contractor accused of espionage, seeks asylum in Russia, but Russia's president says he must stop disclosing U.S. secrets.

* The leaders of Egypt's military warned they would intervene in the country's political crisis if President Mohammed Morsi fails to resolve it within 48 hours, raising the prospect of a military takeover just one day after millions of Egyptians marched to demand the president's resignation.

* The U.S. auto industry, in tatters just four years ago, is emerging as an export powerhouse, driven by favorable exchange rates and labor costs in a trend experts say could drive business for many years.

* Zynga Inc's founder announced that he was stepping down as the CEO of the troubled game maker and will be replaced by Don Mattrick, the current head of Microsoft Corp's Xbox division.

* Biotechnology companies are enjoying their best run with initial public offerings in a decade, amid an upswing in new drug approvals, strong performance by some already public biotech firms and legal changes.

* Investor Carl Icahn said he has raised more than $5 billion to finance his plan to recapitalize ailing PC maker Dell Inc, a move he said should end speculation that the funds wouldn't be available.

* The financial woes of Brazilian billionaire Eike Batista deepened Monday as his group's flagship oil firm once again said it would fall short of its production goals, putting further pressure on the tycoon to rescue his floundering industrial empire.

* France's stock market regulator fined LVMH Moët Hennessy Louis Vuitton $10.4 million for failing to follow market rules when it accumulated a significant stake in Hermès International.

* A lawsuit filed by a group of authors against Google Inc to stop it from scanning millions of books shouldn't have been certified as a class action at this point, a federal appeals court ruled on Monday.

* Jennifer Lopez's Turkmenistan concert provides a window into efforts by state-owned China National Petroleum to boost access to gas supplies in Turkmenistan. The Turkmenistan event underscores the lengths to which China's oil-and-gas companies will go to curry favor in resource-rich locales.

* Apple Inc has filed a trademark application for "iWatch" in Japan, fueling speculation that the company may be preparing to introduce a new watchlike device.

* Businesses suing to overturn a mandate of the Dodd-Frank financial law aimed at drawing attention to and curbing violence in central Africa told a federal judge that it infringes on corporate free-speech rights. ()

FT

The British government is set to name Rothschild to advise on potentially splitting up Royal Bank of Scotland into a good bank and a bad bank.

Mark Carney, the Bank of England's new governor, reported for duty before seven in the morning and told reporters he was "very excited about getting started."

Viscount Rothermere has made a move to consolidate his control over Daily Mail and General Trust with an approach to buy out the outstanding voting shares in the company from his uncle and other holders.

Nick Clegg said his party did not support Prime Minister David Cameron's planned 2017 referendum on EU membership.

The French antitrust watchdog has carried out a search of Apple Inc's premises and also those of some of its French retailers and distributors as part of an investigation into the company's resale practices.

Allied Irish Banks was seen to be just as reckless in its lending as Anglo Irish Bank in the run-up to Ireland's financial crisis, according to remarks between senior bank executives broadcast on Monday.

EasyJet shareholders are planning to back a multibillion-dollar aircraft order, going up against the company's estranged founder Sir Stelios Haji-Ioannou who is opposed to the deal.

NYT

* Regulators say banks have been profiting by offering wealthy Chinese high returns on loans, with banks lending the cash to companies unqualified for loans otherwise.

* Qsymia, the first new prescription weight-loss drug to reach the market in 13 years, is having a hard time winning even a tiny slice of that huge market. The slow start of Qsymia raises questions about what role prescription drugs really can play in combating the nation's epidemic of obesity.

* The Tribune Company, known for its newspapers but moving steadily toward television, accelerated its transformation into a broadcasting company on Monday when it agreed to pay $2.7 billion for 19 local stations from Scranton to Salt Lake City.

* A federal judge in New York, saying the statute of limitations had run out, has dismissed three lawsuits by men who said that the former "Sesame Street" puppeteer Kevin Clash sexually abused them when they were underage.

* Unemployment in the euro zone continued its steady rise in May, according to data published Monday, underscoring the human effects of a financial downturn that has lasted a year and a half.

Canada

THE GLOBE AND MAIL

* Statisticians who parsed data from first National Household Survey were surprised to find many Canadians who had reported no aboriginal identity in the census of 2006 were standing up five years later to declare themselves to be First Nations or Inuit or Métis. (http://link.reuters.com/nuv39t)

* As the Toronto region dithers over transportation problems it worries will hold it back on the global stage, an indisputably world-class city is looking a century ahead, barrelling forward with a massive increase in its subway network. (http://link.reuters.com/puv39t)

Reports in the business section:

* Canadian tech giant BlackBerry has been handed a Canada Day lashing by several analysts in the wake of its dismal quarterly results on Friday, with several major research houses cutting their ratings or price targets. (http://link.reuters.com/quv39t)

NATIONAL POST

* Canadian researchers have achieved a breakthrough in understanding an entirely new way cancer spreads - by hijacking the white blood cells that usually fight diseases. (http://link.reuters.com/suv39t)

* The Conservative government's effort to bring public servants' benefits and compensation in line with the private sector is now taking aim at retired public servants with a proposal to limit their eligibility and boost their share of the cost for the public service health care plan. (http://link.reuters.com/tuv39t)

FINANCIAL POST

* Daniel DiManno sold his Toronto house for less than he had hoped and wanted to see if prices would cool before he bought a new one. But Canadian mortgage rates are rising again and that's spurring DiManno and others to jump back into the market, cutting short an already brief housing downturn. (http://link.reuters.com/vuv39t)

* A new report says a skills gap in Ontario is costing the province more than C$24 billion ($22.85 billion) in economic activity. A report, authored by the Conference Board of Canada, finds that employers can't find workers with the skills their companies need to innovate and grow in the economy.

China

SHANGHAI SECURITIES NEWS

- The China Cement Association has drafted a plan to accelerate the consolidation of the country's cement sector and is awaiting advice from related ministries, said a source from the group. The plan aims for the top 10 producers to command more than 60 percent of domestic market share by 2020.

PEOPLE'S DAILY

- The National Development and Reform Commission and anti-trust authorities are investigating a number of Chinese milk powder companies in an anti-monopoly probe, after prices rose some 30 percent since 2008, a rate which exceeds expected market norms.

CHINA DAILY

- Domestic films in China generated box office revenues of $1.7 billion in the first half of the year, an increase of 27 percent from the same period last year, surpassing foreign movies for the first time in five years, according to entertainment industry consultancy EntGroup Consulting.

- China is likely to start a deposit insurance system by the end of this year which will provide a safety net for individual and institutional depositors, said an official, although coverage limits were not disclosed.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

JPMorgan (JPM) upgraded to Strong Buy from Outperform at Raymond James
Las Vegas Sands (LVS) upgraded to Buy from Neutral at ISI Group
Quiksilver (ZQK) upgraded to Buy from Neutral at B. Riley
Rowan Companies (RDC) upgraded to Buy from Neutral at Citigroup
Seagate (STX) upgraded to Equal Weight from Underweight at Barclays

Downgrades

AT Cross Co (ATX) downgraded to Neutral from Buy at Roth Capital
CME Group (CME) downgraded to Market Perform from Outperform at Raymond James
Hercules Technology (HTGC) downgraded to Neutral from Buy at Janney Capital
Hub Group (HUBG) downgraded to Sector Perform from Outperform at RBC Capital
Hudson Technologies (HDSN) downgraded to Neutral from Buy at Roth Capital
Illumina (ILMN) downgraded to Neutral from Overweight at Piper Jaffray
LINN Energy (LINE) downgraded to Neutral from Overweight at JPMorgan
LinnCo (LNCO) downgraded to Neutral from Overweight at JPMorgan
Oil States (OIS) downgraded to Market Perform from Outperform at Cowen
Transocean (RIG) downgraded to Neutral from Buy at Citigroup
Wells Fargo (WFC) downgraded to Market Perform from Outperform at Keefe Bruyette

Initiations

Blucora (BCOR) initiated with an Outperform at Wedbush
Cheniere Energy Partners (CQP) coverage assumed with an Outperform at Credit Suisse
Cheniere Energy (LNG) coverage assumed with an Outperform at Credit Suisse
Constellium (CSTM) initiated with a Buy at Deutsche Bank
Constellium (CSTM) initiated with a Buy at Goldman
Constellium (CSTM) initiated with an Outperform at Credit Suisse
Constellium (CSTM) initiated with an Overweight at JPMorgan
Dunkin' Brands (DNKN) initiated with a Buy at Lazard Capital
Dynegy (DYN) initiated with a Sell at Deutsche Bank
Global Brass & Copper (BRSS) initiated with a Buy at Goldman
Global Brass & Copper (BRSS) initiated with an Outperform at William Blair
Groupon (GRPN) initiated with a Buy at Wunderlich
Holly Energy (HEP) coverage resumed with a Market Perform at Wells Fargo
Monarch Casino (MCRI) initiated with a Market Perform at Wells Fargo
Multimedia Games (MGAM) initiated with an Outperform at Wells Fargo
News Corp. (NWSA) initiated with a Buy at Deutsche Bank
Ply Gem (PGEM) initiated with a Buy at Goldman
Ply Gem (PGEM) initiated with an Outperform at Credit Suisse
QR Energy (QRE) coverage assumed  with an Outperform at Credit Suisse
Ruckus Wireless (RKUS) initiated with an Overweight at Piper Jaffray
Ryder (R) initiated with a Buy at Wunderlich
Scientific Games (SGMS) initiated with an Outperform at Wells Fargo
Textura (TXTR) initiated with an Outperform at Credit Suisse
Wisconsin Energy (WEC) initiated with a Hold at Deutsche Bank

HOT STOCKS

American Realty (ARCP) to acquire American Realty Capital trust IV in $3.1B merger
European Commission sent objections to 13 investment banks
(BAC, BCS, BNPQY, C, CS, DB, GS, HBC, JPM, MS, RBS, UBS)
Cablevision (CVC) filed with Supreme Court for stay of NLRB proceeding
Icahn told CNBC he “has people in mind’ to run Dell (DELL)
Zynga (ZNGA) confirmed hiring Microsoft's (MSFT) Mattrick to replace Pincus as CEO
Disney extended Iger's tenure as CEO, chairman through 2016
GameStop (GME) unit to launch first mobile games
Emerson Radio (MSN) delayed filing 10K, cited potential income tax liability
Greenbrier (GBX) announced facilities reductions in Wheels, Repair & Parts segment

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Xyratex (XRTX)

Companies that missed consensus earnings expectations include:
A. Schulman (SHLM)

NEWSPAPERS/WEBSITES

• The U.S. auto industry (GM, F, FIATY, HMC, DDAIF, TM) is now emerging as an export powerhouse, driven by favorable exchange rates and labor costs in a trend experts say could drive business for many years, the Wall Street Journal reports
• Over 20 big U.S. banks (BAC, C) are working behind the scenes to ease tensions with the Consumer Financial Protection Bureau  whose approach to policing the financial sector has triggered industry criticism, sources say, the Wall Street Journal reports
• Apple (AAPL) plans to build a new solar farm with NV Energy (NVE)  for power supply to its new data center in Reno, NV, Reuters reports
• Fiat (FIATY) was not among potential investors sounded out by PSA Peugeot Citroen's founding family, Reuters reports
• Hedge funds lowered wagers on a gold rally to a five-year low as a record quarterly drop drove prices below $1,200 an ounce for the first time since 2010, and Goldman Sachs (GS) forecast further declines, Bloomberg reports
• Sprint-Nextel (S) must face a lawsuit for $300M brought by the New York attorney general claiming the third-largest U.S. wireless carrier deliberately failed to pay sales taxes, Bloomberg reports

SYNDICATE

Ascent Solar (ASTI) files to sell 15.38M shares of common stock for holders
ECOtality (ECTY) files to sell 7.69M shares of common stock for holders

• An actual Bloomberg headline: Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong (BBG)
• Gay delivers further body blow to troubled sport (Reuters)
• China Wealth Eludes Foreigners as Stocks Earn 1% in 20 Years (BBG)
• Portugal's Parties Set Deadline for Pact (WSJ)
• Corporate Spending Set to Surge in U.S. (BBG)... or not at all based on the actual corporate data
• Bernanke Boom Signaled by Yield Surge as Market Recalculates (BBG)
• Legal Fears Slowed Aid to Syrian Rebels (WSJ)
• A mega-camp adds to the Boy Scouts’ troubles (Reuters)
• GSK accused of being ‘ringleader’ in China probe (FT)
• 19 Hospitalized in US-Ukraine Army Exercise - Ministry (RIA)
• Egypt Islamists march as senior U.S. official visits (Reuters)
• German spies made use of U.S. surveillance data (Reuters)
• Apple hires fresh talent for ‘iWatch’ (FT)

Overnight Media Digest

WSJ

* A string of cautionary opinions from administration lawyers over the last two years sheds new light on President Obama's halting and ultimately secretive steps to provide military support to rebels in Syria's deadly civil war.

* As the numbers pile up showing China's sizzling growth cooling down, industries worldwide - from German paper cutter makers to Indonesian palm oil exporters - are confronting an altered landscape of winners and losers.

* In one of the first lawsuits to go to trial involving Bernard Madoff's massive fraud, a group of investors is nearing a settlement with a Connecticut bank that they said should have uncovered the Ponzi scheme years before it collapsed.

* Chinese officials released new details of their bribery allegations against GlaxoSmithKline and said four executives have been detained.

* With new parts of the healthcare overhaul kicking in this October, some insurers have set up simulated healthcare exchanges as a test drive, so that they can see what packages of benefits will sell at what prices.

* Restoration Hardware Holdings, once teetering on the edge of bankruptcy and the subject of a buyout bidding war, is turning into a bonanza for its private-equity owners. The firms that bought the luxury-home-furnishings retailer in 2008 are on track to make about eight times their initial investment, according to a Wall Street Journal analysis.

* Talks on resolving a multibillion-dollar trade dispute between the European Union and China over solar panels have reached an impasse, EU officials said, with a deadline looming.

* Coca-Cola, PepsiCo and Dr Pepper Snapple are expected to disclose weak U.S. sales in the wake of a chilly spring and the wettest June in decades.

* Meredith Corp is creating a print magazine based on a popular website, Allrecipes.com. It is usually the other way around. The food magazine is a spinoff of the Allrecipes.com website Meredith acquired last year, and will feature a curated selection of recipes from the site, whose user-generated content is popular with home cooks.

* Microsoft has cut the price of its Surface RT, the cheaper of the two versions of its Surface tablet, by $150 or up to 30 percent, as even some Microsoft partners have called the device a sales laggard.

* Max Azria is likely to lose control of BCBG Max Azria to investment firm Guggenheim Partners, in a deal that eases the fashion house's roughly $685 million in debt.

* IMAX and its South Korean partner plan to add 30 IMAX movie screens in China and five in South Korea. The expansion, to be announced in coming days, is aimed at capitalizing on rising entertainment spending by the Chinese middle class and demand for the immersive high-resolution technology in Korea.

FT

BP says U.S. law firms in the Gulf of Mexico area have been reaping a "bonanza", winning some of the biggest compensation awards for themselves as a result of a misinterpretation of the company's settlement to compensate those affected by the Deepwater Horizon disaster.

A radical shake-up of UK corporate law will include plans under which negligent directors will be made personally liable for repaying failed companies' debts.

Group of 20 finance ministers are set to launch a new phase in the crackdown on global tax avoidance this week.

German Chancellor Angela Merkel has called for a tough European agreement that would require internet companies to disclose what personal information they have collected and who they have made it available to.

Preliminary investigations have found no evidence that a fire on a Boeing 787 Dreamliner at London's Heathrow airport was linked to the airliner's lithium-ion batteries.

JPMorgan Chase & Co and Goldman Sachs are mulling a sale of their metal warehousing units and have begun informally sounding out buyers for the businesses in recent months.

AT&T Inc has agreed to buy Leap Wireless International for about $1.2 billion, the latest in a series of recent deals in the telecoms sector.

Irn-Bru maker A.G. Barr is considering a possible 1 billion pound bid for GlaxoSmithKline's Lucozade and Ribena brands days after merger talks with rival Britvic fell through.

NYT

* Fabrice Tourre, the former Goldman Sachs trader whose emails about the mortgage crisis became a symbol of Wall Street hubris, spent time volunteering on a coffee farm in Rwanda after Goldman Sachs, and after the Securities and Exchange Commission accused him of misleading investors about a mortgage security that ultimately failed.

* Air accident investigators continued on Sunday to try to figure out why a parked Boeing 787 Dreamliner caught fire on Friday in London, while airlines around the world kept flying the plane and expressed confidence in it.

* Brick-and-mortar stores are looking for a chance to catch up with their online competitors using software -- video surveillance and signals from shoppers' cellphones and apps -- that allows them to watch customers as they shop, and gather data about their behavior and moods.

* Michael Dell is fighting a battle over a company that many say is doomed. Dell wants to take his company private and retool it without quarterly earnings pressure. In this quest, he is opposed by Carl Icahn, the onetime corporate raider who has profited in battles over TWA, RJR Nabisco and Motorola, among many others.

* If you are a corporate executive, this may be one of the last sentences you want to hear: "Erich Spangenberg is on the line." Invariably, Spangenberg, the 53 year old owner of IPNav, is calling to discuss a patent held by one of his clients, which he says your company is infringing - and what are you going to do about it?

Canada

THE GLOBE AND MAIL

* The chairman of the company whose runaway freight train exploded in downtown Lac-Mégantic, Quebec, and killed dozens says his employees have begun cleaning up wreckage, a little more than a week after the crash.

* Stephen Harper is leaving his economic team in place, as the Prime Minister unveils a new cabinet on Monday that aims to revitalize an administration beset by recent scandals and flagging popularity.

* The sudden death of Cory Monteith, the Victoria-raised actor whose portrayal of quarterback-turned-crooner Finn Hudson on the hit television show "Glee" propelled him into one of Canada's rising on-screen stars, has spurred shock and condolence, from the upscale Vancouver hotel where he took his final breath, to Ottawa, Hollywood, and beyond.

Reports in the business section:

* Jeffrey Immelt, the CEO of General Electric Co, said Canada will play a part in his effort to transform the iconic 135-year-old industrial conglomerate into a dominant global player in intelligent machines and advanced manufacturing.

* Canada's central bank could surprise financial markets this week and signal a longer period of ultra-low interest rates, as exports languish and executives display little enthusiasm for spending their excess profits.

China

SHANGHAI DAILY

- Hong Kong is considering lifting limits on the amount of infant milk formula mainland visitors can take home with them. The restrictions came into effect in March when mainland visitors bought so much formula in Hong Kong it caused a shortage.

PEOPLE'S DAILY

- The abrupt cancellation on Saturday of a plan to build China's largest uranium processing plant indicates that local governments are not communicating properly with residents in building environmentally-sensitive projects, a commentary by this newspaper said.

SHANGHAI SECURITIES NEWS

- A slew of new policy steps promulgated by the State Council, or cabinet, over the past 10 days indicate that China is stepping up its efforts to boost consumption.

- Along with increasing signs the U.S. Federal Reserve is considering an exit from quantitative easing (QE), China's stock market will likely see an outflow of overseas funds in the second half of the year.

CHINA SECURITIES JOURNAL

- High ratio bonus issues offered by Chinese listed firms reflect that some companies have tried to attract investors looking to take a punt on markets while avoiding rewarding cash dividends, the paper said in a commentary.

NATIONAL BUSINESS DAILY

- Half-yearly reports published by local governments so far show that many Chinese localities still rely on government investment to boost growth.

CHINA DAILY

- A house editorial castigated the United States for "engineering its monetary and exchange policy to suit its needs" and said that the current U.S. policy of monetary easing is causing rapidly rising inflation in emerging market economies.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Applied Micro Circuits (AMCC) upgraded to Strong Buy from Outperform at Raymond James
BNY Mellon (BK) upgraded to Buy from Neutral at Citigroup
Deckers Outdoor (DECK) upgraded to Overweight from Neutral at Piper Jaffray
Franco-Nevada (FNV) upgraded to Outperform from Market Perform at BMO Capital
Leap Wireless (LEAP) upgraded to Market Perform from Underperform at BMO Capital
Leap Wireless (LEAP) upgraded to Neutral from Underperform at RW Baird
Leap Wireless (LEAP) upgraded to Neutral from Underweight at JPMorgan
Leap Wireless (LEAP) upgraded to Overweight from Underweight at Barclays
NetApp (NTAP) upgraded to Overweight from Equal Weight at Morgan Stanley
Patterson Companies (PDCO) upgraded to Neutral from Cautious at ISI Group
Tiffany (TIF) upgraded to Buy from Hold at Stifel
Webster Financial (WBS) upgraded to Overweight from Equal Weight at Evercore

Downgrades

Allscripts (MDRX) downgraded to Neutral from Buy at ISI Group
AngloGold (AU) downgraded to Underperform from Market Perform at BMO Capital
DSW (DSW) downgraded to Neutral from Buy at Sterne Agee
ExOne (XONE) downgraded to Hold from Buy at BB&T
Gap (GPS) downgraded to Neutral from Overweight at Piper Jaffray
Genesco (GCO) downgraded to Neutral from Buy at Sterne Agee
Grand Canyon (LOPE) downgraded to Neutral from Overweight at Piper Jaffray
Harmony Gold (HMY) downgraded to Underperform from Market Perform at BMO Capital
Hartford Financial (HIG) downgraded to Market Perform at Keefe Bruyette
Kinross Gold (KGC) downgraded to Market Perform from Outperform at BMO Capital
Linear Technology (LLTC) downgraded to Neutral from Outperform at Credit Suisse
Magnum Hunter (MHR) downgraded to Market Perform from Outperform at BMO Capital
Michael Kors (KORS) downgraded to Neutral from Overweight at Piper Jaffray
Mosaic (MOS) downgraded to Sector Performer from Sector Outperformer at CIBC
Newmont Mining (NEM) downgraded to Market Perform from Outperform at BMO Capital
NuVasive (NUVA) downgraded to Underperform from Market Perform at BMO Capital
Portugal Telecom (PT) downgraded to Underperform at Exane BNP Paribas
QLogic (QLGC) downgraded to Underweight from Equal Weight at Morgan Stanley
Steven Madden (SHOO) downgraded to Neutral from Buy at Sterne Agee
Stoneridge (SRI) downgraded to Neutral from Buy at B. Riley
Teekay Tankers (TNK) downgraded to Underweight from Neutral at JPMorgan
UPS (UPS) downgraded to Hold from Buy at BB&T
UPS (UPS) downgraded to Neutral from Overweight at JPMorgan
UPS (UPS) downgraded to Outperform from Strong Buy at Raymond James
VIVUS (VVUS) downgraded to Neutral from Outperform at Credit Suisse

Initiations

Bluebird Bio (BLUE) initiated with a Buy at BofA/Merrill
Bluebird Bio (BLUE) initiated with a Buy at Canaccord
IHS Inc. (IHS) initiated with a Neutral at Janney Capital
PTC Therapeutics (PTCT) initiated with an Outperform at Credit Suisse
PTC Therapeutics (PTCT) initiated with an Overweight at JPMorgan

HOT STOCKS

AT&T (T) to acquire Leap Wireless (LEAP) for $15 per share; to include PCS, AWS spectrum
Crown Castle (CCI) announced certain contractual terms with AT&T, Leap Wireless
Wells Fargo (WFC) to acquire Hypothekenbank Frankfurt U.K. real estate portfolio
MB Financial (MBFI) to acquire Taylor Capital (TAYC) for $22 per share or $680M
VIVUS (VVUS) offered compromise to First Manhattan to end proxy fight
Starboard hired advisors to explore “superior proposals” to Shuanghui, Smihfield Foods (SFD) merger
International Rectifier (IRF), TowerJazz (TSEM) in multi-year agreement through 2020
Research Frontiers (REFR) filed patent infringement suit against Amazon (AMZN), others (BKS, SNE)
Actavis (ACT) generic Opana ER received FDA approval
Kaman (KAMN) to acquire Ohio Gear & Transmission

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
MB Financial (MBFI)

Companies that missed consensus earnings expectations include:
Taylor Capital (TAYC)

NEWSPAPERS/WEBSITES

• The recent rout in emerging markets is enticing some investors to jump back in to search for cheap stocks, bonds and currencies. But the sell-off is prompting these bargain hunters to be a lot pickier than in the past, the Wall Street Journal reports
• Coca-Cola (KO), PepsiCo (PEP) and Dr Pepper Snapple (DPS) are expected to disclose weak U.S. sales following a chilly spring and the wettest June in decades, the Wall Street Journal reports
• Stung by leftover inventory and unsure about consumer spending, many retailers (LF) are ordering conservatively for the second busiest selling season of the year--back-to-school sales--behind the end of the year holiday period, according to executives in shipping, banking and manufacturing, Reuters reports
• GlaxoSmithKline (GSK) channeled bribes to Chinese officials and doctors through travel agencies for six years to illegally boost sales and to raise the price of its medicines in China, police said today, as four senior Chinese executives from GSK have been detained, Reuters reports
• Companies in the U.S. are beginning to empty their deep pockets and boost capital spending as they look past the specter of sequestration and global growth risks. Orders for capital goods excluding aircraft and military equipment, an indicator of future business investment, was up 1.5% percent in May, a third consecutive advance and the longest streak since October 2011, Bloomberg reports
• Commerzbank (CRZBD) rose in Frankfurt trading after a report that German Finance Minister Schaeuble spoke with UBS (UBS) Chairman Weber to evaluate interest in buying a stake, Bloomberg reports

BARRON’S

Citigroup (C) may be able to return more capital to investors
Paychex (PAYX), H&R Block (HRB), others (ADP, ACN, AVAV, NOC, RTN, GD, MSI, CTSH, WIT, INFY, CXW, GEO, WU) could benefit from immigration reform
Hess (HES), Noble (NE), others (FOXA, INTU, ACN, CA, DHR, HAR, MPC, WDC) could raise dividends during Q3
Charles Schwab (SCHW) looks expensive
Entegris (ENTG) could jump 40% in the next year or two
MercadoLibre (MELI) could drop 50% or more
PC-related stocks (INTC, MSFT, HP, DELL, GOOG, SSNLF) could remain up through summer

SYNDICATE

Clean Energy (CLNE) files to sell 3.16M shares of common stock for holders
Dex Media (DXM) files to sell 4.92M shares of common stock for holders
IDACORP (IDA) files to sell 3M shares of common stock
Rally Software (RALY) announces proposed offering of $70M of common stock
Vermillion (VRML) files to sell 20.5M shares of common stock for holders

Today's most eagerly anticipated earnings release, that of Herbalife, also known as the focal point of the most entertaining feud of 2013 - that between Bill Ackman and Carl Icahn - were just released, and they are a blowout.

• HERBALIFE LTD. 2Q ADJ. EPS $1.41, EST. $1.18
• HERBALIFE 2Q REV. $1.22B, EST. $1.16B
• HERBALIFE OPERATING CASH FLOW $214 MILLION
• HERBALIFE SEES YR ADJ. EPS $4.83-$4.95, EST. $4.78
• SECOND QUARTER VOLUME GROWTH +14%
• HERBALIFE 2Q HAS 2C EXPENSES ON REAUDIT DUE TO KPMG RESIGNATION
• the always amusing: HERBALIFE 2Q HAS EXPENSES 7C-SHR ON 'ATTACKS OF CO BUSINESS'

The biggest news as always was not reported: it was the most recent short interest in the name. At 36% it means much more pain in store for shorts.

But the punchline is that Herbalife just announced a $0.30 dividend per share: a dividend which will to a big extent come straight out of Bill Ackman's pocket.

Stock soaring after hours as the epic squeeze we predicted in December 2012 continues.

The only question now remains is how generous are the repo desks for Bill Ackman's Prime Brokers and when will Bill finally get the tap on the shoulder and be forced to cover his 20mm short.

No matter what happens though, one person is happy. This guy.