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Market Commentary

News

o Stress Test Not Very Relevant for German HRE: Sources � CNBC link

o E.C.B. Winds Down Bond Purchases link from DealBook

� The European Central Bank's intervention in bond markets has come nearly to a standstill, bank data indicated Monday, in a sign that policymakers no longer see an urgent need to continue supporting debt issued by Greece, Spain and other European countries

o the implications for the EU following the breakdown in talks between the IMF and Hungary, citing Danske Bank analyst, that the events in Hungary are a warning of what may happen in the Baltic countries later this year and in other EU countries which have adopted tough austerity measures.� Telegraph's international business editor Evans-Pritchard

o Biggest oil spill ever in China grows - BBG

� Overseas Action

o Euro STOXX 50 dn 1% -

� Europes leading 3 sectors are: Telecom Equipment +1.24%...Furnishings and Apparell +0.93%...Paper and Forestry +0.74%

� The lagging sectors are: Computer Services -2.40%...Industrial Products -2.18%...Auto Manufacturers -2.07%

� As the FTSE is lower by 0.63% it surprising to note hat several heavyweight miners such as Rio Tinto +13.5...BHP Billiton +8.5 and Vedanta Resources +21 lead the way in the points gained. BP is lower by 2.35 points as buying enthusiam has taken a break for the moment.

� At the Farnborough Air Show (UK), both Boeing and Airbus are seeing their orders double on plane leasing demand.

o Asia: Nikkei (0.88%); Hang Seng +1.37%; Shanghai Composite +1.45%

o Asian stock markets were mostly higher Tuesday with China's market leading the way on continued expectations Beijing will avoid further tightening measures per WSJ

� Tech hit ion japan on first day back from vacation�TXN and IBM weak quarter s hurt techs

o Data:

� U.K. JUNE BUDGET DEFICIT 14.5B PNDS; MEDIAN FORECAST 13B PNDS

� UK June mortgage approvals by major UK lenders 48,000 vs 51,000 in May

� Germany Jun PPI 0.6% m/m vs consensus 0.2%

� Asian Development Bank boosts emarging East Asia outlook;

o Economics today:

� ICSC-Goldman retail sales at 7:45 ET

� Jun Housing Starts, Building Permits at 08:30 ET

� Redbook Chain Store at 08:55 ET

� API Crude Inventories at 16:30 ET

� ABC Consumer Confidence at 17:00 ET

o Earnings:

� Companies due to report before the bell include: BIIB, BK, BTU, FRX, GS, HOG, ITW, JNJ, MI, MICC, OMC, PEP, STT, UNH, WHR Companies due to report after the close include: AAPL, ALGT, BSX, CTAS, FIS, GILD, JNPR, LLTC, SLM, STX, SYK, YHOO

� APPY : AspenBio Pharma reports Appyscore elisa-based pivotal trial results

� Conference call tues� at 8:00 ET

� Dial-in: 1-866-356-4279 for domestic

� Passcode: 69273811)

�President Barack Obama and British Prime Minister David Cameron will hold talks on Tuesday overshadowed by controversy over BP Plc that could test the vaunted "special relationship" between their countries.� Reuters
Senate Democrats are poised to break a partisan stalemate on Tuesday over extending unemployment benefits for millions of Americans who have been jobless for six months or more, but the fight seems certain to continue playing out as a defining issue in the midterm elections.� BBG

� The Bank of Canada will probably raise its benchmark lending rate for a second month today and may use an accompanying statement to downplay the need for future increases on signs that economic growth is slowing - BBG

TODAY�S BIG STORIES

� Top M&A

o Deals raise hopes of rebound in global M&A

� Some 25 potential and agreed deals worth nearly $8bn were announced on Monday in sectors ranging from UK engineering to Italian frozen food, according to data from Dealogic.

� http://www.ft.com/cms/s/0/f60d839c-9367-11df-bb9a-00144feab49a.html?ftcamp=rss

o RSH:� Reuters) - Blackstone Group and TPG Capital [TPG.UL] are unlikely to continue to pursue a possible bid for RadioShack Corp

o NTY NBTY price may be driven higher - NY Post

o HRB: H&R Block, the nation's largest tax company, may get a merger proposal from a smaller competitor, Liberty Tax Service.� NYT

o AIG AIA wants independence from American International Group � FT

o Carlyle secures two buy-out deals, seeking third � FT link

� Private equity firms are scouring the world for deals, with Carlyle securing two deals and competing for a third this week alone

o Private equity deals have spiked in recent months with a spate of assets changing hands as funds face pressure to spend capital raised in the boom and are nervous about the threat of higher taxes. Reuters

o Diversified manufacturer Griffon Corp said it would buy lawn and garden tools maker Ames True Temper from private equity firm Castle Harlan for $542 million in cash Reuters

� Top $ Raising

o GDOT Green Dot Corp files amended S1; increases IPO size to 4.17M from 3. The expected IPO price range remains $32-35 per share.

� What Ammunition Does Fed Have Left For the Economy?�� CNBC link

o Federal Reserve Chairman Ben Bernanke will deliver his semi-annual testimony to the U.S. Congress this week

o Hold Mortgage-Related Asset Levels Steady on Balance Sheet

o Buy More Assets

o Deepen Its commitment to Hold Rates Low for Long Time

o Stop Paying Interest on Excess Reserves

o Open a New Lending Facility

� More Selloffs if Revenue Doesn't Improve: S&P's Stovall� - CNBC link

� No Double-Dip Just Yet: Bob Doll -� of BlackRock� -� CNBC link

o Robert Doll, vice chairman and chief equity strategist at BlackRock,

o ��My view is that we will not have a double dip, and that we�ll work our way higher, but maybe not just yet,� Doll said.

o �If we can get through the second quarter with earnings reasonably good, revenues reasonably good versus expectations, that will be a good down-payment on getting out of what ails us in this period.�

� China Says Exports Outlook 'Grim' on Europe Demand � CNBC link

o China sounded a gloomy note on Tuesday about its export prospects, warning in particular that belt-tightening by deeply indebted European Union governments would dampen demand for the country's goods.

� Fund flows:� Emerging Equity Fund Weekly Inflow Exceeds $3 Billion

o Emerging-market equity fund inflows jumped to more than $3 billion in the week to July 14 as the start of the U.S. earnings season prompted a rebound in optimism, according to EPFR Global

o Indian equity funds absorbed $114 million, a 13-week high, as forecasts for monsoon rainfall improved, while Brazilian stock funds attracted $97 million, the most in 20 weeks, EPFR said in an e-mailed statement.

o Emerging-market bond funds also took in $745 million, it said. They have absorbed a record $18.5 billion so far this year, reflecting renewed appetite among investors for hard currency debt

� China Denies IEA Label as World's Top Energy User

� China knocks US off top energy use spot from Telegraph

o After more than a century as the country that consumes the most energy, the United States has been knocked off its perch by China.

� Demand for steel exports from Japan has stalled, an industry group chief said today.� BBG

o Japan Iron and Steel Federation Chairman Eiji Hayashida is �not optimistic� about steel demand in Asia, he said today at a press briefing in Tokyo.

� LG Chem Ltd., South Korea�s biggest maker of chemicals, reported a better-than-expected 36 percent jump in second-quarter profit after the global economic recovery boosted demand for materials used in plastics and synthetic rubber.� BBG

� BP is 4.4p better at 392.25p after the company was allowed to keep its cap on the Gulf of Mexico well for at least another day, following indications that seepage seen in the area may not be related to the leak.

� NOK� up 4% - higher today on sepc of new CEO � BBG ;� wants US CEO

� TUP -10.5% (earnings)..FX and accounting� hurts !!� not operating.. Guidance not too bad ex items

o accounting issues in Russia!!� Hurts

o TUP� call at 10am ET� (678) 905-9434, code 82840664.

PKG +3.1% (earnings)

� WHR : Whirlpool reports Q2 results beter..guides OK .. Guides full year U.S. industry unit shipments to ~+5% vs prior +3-5

� Guides full year EPS to $9.00-9.50 vs prior $8.00-8.50 vs Reuters $8.84. Guides full year FCF to ~$550-650M vs prior $500-600M

ATHR -7.5% (earnings slightly ahead of estimates, but guidance in-line., to acquire Opulan Technologies)

o PC Weakness; Gross margins small miss to some on street

o opex bad news

NE� Noble Corp -5.3% (earnings miss

o �10:00 a.m. ET � Dial-in 866-461-7129; passcode 38611304.)

TXN dn 4% - beats and guides OK..but order momentum not good enough for street

o Wireless looks OK but weakening in June (think NOK)� analog biz mixed �

o Book to bill declined to 1.07 vs 1.14, a negative sign

IBM -4% (earnings) ..revs miss street.� currency hurts the most

o IBM's guidance not enough for bull s that want to see evidence of a recovery

o NY Times and WSJ discussed the management changes this morning and agreed that they have created a short-list of executives in line to replace CEO Palmisano

� ZION dn 4%...misses�.Zions Bancorp loss Widens More Than Expected on Debt Costs

� Zions reported EPS loss of ($0.84), belowconsensus of ($0.55)

� NCOs Higher than Expected

� Note Zions Bancorporation is� this year�s second best-performing stock in the Standard & Poor�s 500 Index

STLD Steel Dynamics reports mixed..recall guided 6/16..call 10 am et..

o Call in number: 719.325.4867

o Call in code: 7176049

� CABLE & WIRELESS WORLDWIDE SLUMPS 16% IN LONDON TRADING

o Cable & Wireless Wordlwide trading update

o Cable & Wireless Worldwide says public sector spending has slowed 'very significantly'

o �Profits warning follows shareholder protests about excessive executive pay

o Cable & Wireless Worldwide (CWW) has become the first major company to warn on profits because of the cuts announced in the government's emergency budget last month. Per Guardian

� Ryanair profit falls on volcanic ash cancellations, fuel costs

o Disruption caused Iceland's volcanic ash cloud cost Ryanair $50m in the three months to the end of June, Europe's biggest low-cost carrier said on Tuesday

� Enterprise Inns interim management statement: expects FY results in line with expectations

� Hermes Raises 2010 Targets As 2Q Sales Climb Sharply

o Hermes said the guidance doesn't take into account economic factors that could significantly alter the business environment.

o demand in Asia helped

� GOOG:�� China satisfied with Google search engine tweaks from Reuters

o China is satisfied that U.S. Internet giant Google Inc is complying with Chinese laws after it tweaked the way it directs users to an unfiltered search page, a senior official said on Tuesday.

� Amazon says Kindle books are outselling hardcovers from Wash Post

o Amazon.com said Monday that growth in sales of its Kindle digital reader accelerated every month in the second quarter and that it's selling more electronic books than hardcover editions

� CalSTRS reports 12.3% gain on investments from L.A. Times

o After two years of losses, the California teachers pension fund posts an annual profit

o For the first time in three years, California's second-largest public pension fund reported positive annual earnings.

� Temasek Says Investors Oversubscribed Its First Sterling Bonds� - BBG

o Temasek Holdings Pte, Singapore�s state investment company, said investors bid for more than it offered in its first sale of sterling-denominated bonds.

� West Virginia Will Hold Special Election for Byrd's Seat from Roll Call

o West Virginia Gov. Joe Manchin (D) signed legislation into law Monday night that tees up a fall special election to fill the seat held by the late Sen. Robert Byrd (D).

� House Approves Tea Party Caucus from Top Stories from CQ

o The House Administration Committee on Friday officially approved Rep. Michele Bachmann�s request to form the House Tea Party Caucus, the Minnesota Republican announced on Facebook and Twitter on Monday.

� WHO may declare end to H1N1 swine flu pandemic: report from Reuters

o NEW YORK (Reuters) - The World Health Organization's emergency committee intends to convene as early as Tuesday to review data and declare an end to the H1N1 swine flu pandemic, Bloomberg News reported, citing two people familiar with the matter.

� U.S. troops to arrive at Mexico border August 1 from Reuters

o WASHINGTON (Reuters) - U.S. National Guard troops will begin arriving along the border with Mexico on August 1 to bolster security as the Obama administration tries to stem the flow of illegal immigrants, weapons and narcotics, officials said on Monday.

� U.S. reviewing more sanctions on North Korea: South from Reuters

o SEOUL (Reuters) - The United States may implement additional sanctions on North Korea in response to the sinking of a South Korean warship, South Korean Foreign Minister Yu Myung-hwan said on Tuesday

� Clinton, Gates to Visit Demilitarized Zone Between Two Koreas - BBG

o Secretary of State Hillary Clinton and Defense Secretary Robert Gates will visit the demilitarized zone that divides North and South Korea on July 21, the State Department announced.

o The stop, part of a commemoration of the 60th anniversary of the Korean War, will mark the first time the top U.S.diplomat and defense chief have traveled together to the 160- mile zone that divides the peninsula.

� Warren May Lack Senate Votes to Head Consumer Agency, Dodd Says -� BBG

o Elizabeth Warren, the Harvard University professor touted to head a new consumer protection bureau, may not have sufficient support to win confirmation to the post, Senator Christopher Dodd said in a radio interview

o Warren, chairman of a panel overseeing the Troubled Asset Relief Program, is credited with conceiving the agency included in the financial-regulation bill awaiting President Barack Obama�s signature. Backing from consumer groups and lawmakers including House Financial Services Committee Chairman Barney Frank may not be enough to overcome resistance to her candidacy to lead it, Dodd said yesterday on NPR�s �Diane Rehm Show.�

� NYC Heads to Hottest July Ever, Taxing Power Grid -� BBG

o If it feels hotter than it�s ever been in New York, that�s because it is.

o �New York�s Central Park is heading toward its warmest July on record after two heat waves this month, the National Weather Service reported. Extreme heat pushes aging power systems to their limits, increasing the odds of breakdown, according to grid monitors.

Survey: Americans increasingly doubt they can count on Social Security

o The number of U.S. workers who have doubts about the help they can expect from Social Security has increased, a USA TODAY/Gallup Poll found. A majority of retirees expect their Social Security payments to be reduced, while six of 10 people who aren't retired think Social Security won't be able to pay them when they stop working. USA TODAY (20 Jul.)

� Mike "The Situation" Sorrentino is writing a self-help book.

o The "Jersey Shore" star landed a deal to pen "Here's the Situation," a guide to ripped abs, grooming, and how to keep up with your GTL (gym, tan, laundry). Sources said it will be published by Gotham Books this November in a deal brokered by Jarred Weisfeld of Objective Entertainment and Sorrentino's manager, Michael Petolino. The Sitch is already cashing in with a workout video and health supplements.

CANTOR TRADING RECAP

� Equity Recap

o It was a very quiet day for the most part with the market waiting for the next wave of earnings, but more importantly some type of clue as to how the world macro picture will pan out. It continues to be the earnings are better vs. the economic data that has been horrible to say the least. Even with the better earnings, there have been some raised brows as to the quality of those earnings and has it been growth related or more cost cutting? Internally we have been better towards the sell side with most clients having made their beds and waiting to see how this plays out. The housing number was lighter then forecasted but the trading continued to be uninspiring. Breadth to the market had advancing issues almost double declining issues, while internally here, buy and sell names were unchanged. Saw some value guys picking away retail and telecom while healthcare was for sale, Quant�s were quiet, Shorts were quiet and vanillas were both ways

o European markets were initially off as much as 2% as new worries emerged on the sovereign debt front (Hungary/IMF talks broke down, while Moody�s downgraded Ireland�s paper). They recovered somewhat and were trading in positive territory as US traders arrived to work. For their part, S&P�s were up small (3 to 5 points) and held onto those gains through the 9:30 cash open. At 10:00, however, with the release of the NAHB index (measures Homebuilders� confidence), which came in at 14 (below the expected reading of 16), futures abruptly turned lower, falling about 12 points to the overnight low of 1057. Once this low held, the bulls stepped in and bid prices up 14 points to a new intraday high (1071). The final 30 minutes of the session saw a small fade ; prices still managed a positive close, up a bit more than 4 points on the day.

o All ten S&P Industry Groups were up on the day, with Utilities strongest (up 1.5%) and Consumer Staples weakest (up 0.2%). Tech was the second strongest group (up 1.04%). After the bell, however, both IBM and TXN reported disappointing results. TXN missed on both the top and bottom line and fell 6% in afterhours trading. IBM�s disappointment came in the form of weaker servicing signings (services make up half of IBM�s revenues); IBM declined over $5, more than 4%, in late trading. In the homebuilding sector, HOV fell 4.7% and BZH fell 3% as the Homebuilding Index fell 1.44% on waning confidence. Showing particular strength was the for profit education group, with EDMC up 17.3%, BPI up 10.3% and COCO up 9.1% as investors await potential Department of Education revisions to the �gainful employment� proposal. Finally, HAL gained 6% on a strong earnings report announced before the bell.

o Billy Clark and Team

� Investment Grade Recap

o IG spreads were mixed yesterday without much direction to spreads. Old XTO (XOM) was the best performer on the day with Exxon tendering for the long XTO paper at +65, approximately 25bps better from where paper had been. We saw a fair number of bwic�s, all being easily absorbed and at good levels as better buyers remain the theme, albeit continuing to be selective. Negative news from Europe (Ireland downgrade, Hungary worries,..) have been a non-event thus far as US earnings remain robust and help provide some positive news in light of negative economic data elsewhere. The negative economic data yesterday came in the form of homebuilder confidence falling to a one year low and combine that with the picture of stubbornly high unemployment in a slowing economy (NY and Phila. Fed), not to mention deflationary pressures that we saw at the end of last week and the road ahead is precarious at best.

o Michael Salemo

Rates Commentary

o An extremely quiet and range bound summer Monday in the US Treasury market aided by Japan closed for Marine Day. Treasuries opened up in New York slightly lower in the intermediate through long end of the curve on light flows. A small bid occurred midmorning after the worse than expected NAHB hosing index coming at 14 versus an expected 16 but the bid quickly dissipated shortly thereafter with the market grinding lower throughout the remainder of the morning and afternoon session. At 3PM Treasury benchmarks were lower in the price (exception of the 2 year) with the long end once again underperforming.

o Tomorrow the start of this weeks housing data (housing starts and building permits), the continued earnings releases and Bank of Canada rate decision should be the main focus for the market. Chairman Bernanke starts his congressional testimony Wednesday in front of the House followed by the Senate on Thursday.

o Primary Dealer

CMBS Recap

o The summer doldrums continue in the CMBS mkt.� Last week we had a measly $610mm in BWICs that actually traded.� Starting slow again this week.� Saw $220 in BWICs with a CDO liquidation making up 3/4 of the selling, so no real account selling.� Looking for color on the CDO list.� We didnt buy anything.� Seeing a few lists for tomorrow ($110mm)

o Spreads on the day were slightly tighter with GG10s in 5bps (+375/$98-24).� Though I like CMBS spreads (up in structure/better quality paper), the mkt is in a funk creating a low volume environment. The vast majority of people I talk to like the sector and the spread but many seem to be overweighted. Even those worried about the CRE fundamentals will not sell given the inability to replace the yield.� Thus, the mkt is at a bit of an impasse where the technicals (lack of supply) have finally caught up.� I remember saying in June '08 when BACM 08-1 was 2x over subscribed how much I liked CMBS given the positive technicals- I was right just took a couple years to come to fruition.

o Geordie Walker

� Muni�s:� Comments On The Build America Bond (BABs) Market

o the market has widened on a spread to Treasury basis for a few reasons we believe..one could be the inability of DC to get the extension passed in a timely manner..many want to be sure they won't be left long an unsupported/orphaned product.. Treasury may see this product as the future for the muni market and may want to expand its use (albeit at a lower subsidy level)..Secondly, the subsidy if extended will decrease a few % next year so issuers are trying to get the 35% now by bringing deals, adding supply at a time that the muni market is typically quiet and buyers are few and far between..Thirdly, there is still the retail aspect of the muni market..2/3s of outstanding munis (tax-exempt) are held by retail directly or by retail conduits (SMAs, Funds etc)..Retail buyers are very dollar sensitive and are OK with the 10 yr call...So those deals get priced accordingly and often are purchased by non-hedging retail focused dealers..so in a rally the trades print at spreads that hurt the "index eligible only" buyers on a relative value basis..And lastly, the primary market is dominated by 2-3 firms and they have been operating in a manner that makes other dealers a bit hesitant to get involved for fear of being impacted by the big players effecting liquidity

o Orlando� Cherenek

SECTOR NEWS WITH MACRO IMPLICATIONS

ENERGY

o President Barack Obama and British Prime Minister David Cameron will hold talks on Tuesday overshadowed by controversy over BP Plc that could test the vaunted "special relationship" between their countries.� Reuters

o Exxon Mobil on Monday said it is offering to buy up to $2.7 billion in outstanding debt securities issued by its new subsidiary, XTO Energy, The Associated Press reported.

o BP:� mulling new method to kill macondo well

� BP is studying the possibility of plugging a deep-water spill in the US Gulf by injecting mud from the surface into the mouth of the well.

� The method, to be studied in the next two days, could permanently stop one of the worst oil spills in US history faster than doing so via a relief well that's scheduled to flood the leaking Macondo well with cement by mid-August, and the company will be making a decision about pursuing the option "over the next couple of days," said Kent Wells, a senior vice president for BP.

� The so-called "static kill" operation, which involves pumping heavy drilling mud into the Macondo well, is reminiscent of the "top kill" effort that failed last May

� http://www.theaustralian.com.au/business/mining-energy/bp-mulling-new-method-to-kill-macondo-well/story-e6frg9ef-1225894458537

o ATW Atwood Oceanics names Mark May SVP and CFO, effective 11-Aug

o NGLS Targa Resources Partners announces new $1.1B revolving credit facility

o NE Noble Corp reports Q2 EPS

o NE� Noble Corp -5.3% (earnings miss

� �10:00 a.m. ET � Dial-in 866-461-7129; passcode 38611304.)

o VTG Vantage Drilling files $50M secondary offering through Jefferies and Johnson and Rice

o BP WSJ considers an alternative means for BP to raise cash

o WFT Weatherford International reports Q2 EPS

o APA Apache granted approval for new shallow-water well in GoM -- WSJ

o BP BP looks at new method to plug Macondo well - Dow Jones

o SOLF Solarfun obtained RMB6B credit facility with Bank of Shanghai

INDUSTRIALS

o Chemtura bondholders warn of chaos if exclusivity terminated

� The ad hoc bondholder committee acting in the Chapter 11 proceedings of Chemtura said that if the company�s exclusive period to file a reorganization plan is terminated and the plan-support agreement it has with the company is not approved, the ad hoc panel would file its own reorganization proposal for the company, according to court documents.� S&P

o Airbus, Boeing Double Orders on Leasing Demand as Show Opens � BBG

� Airbus SAS and Boeing Co. announced 189 orders on the first day of the Farnborough Air Show, more than double the total from last year�s event, as leasing companies returned to the market after the recession

� Airbus won contracts yesterday for 122 planes worth $11.6 billion at list prices, while Boeing logged 67 orders valued at $7.5 billion. They had 69 and 9 respectively at the 2009 Paris Air Show, which alternates annually with Farnborough, England

o Boeing feedback "varied" on 737 re-engine from Reuters

� FARNBOROUGH, England (Reuters) -- Boeing Co's decision on whether to re-engine or redesign its hot-selling narrow-body 737 is largely in the hands the customers, the head of marketing for Boeing Commercial Airplanes said on Tuesday.

o NOC:� Northrop Grumman. Chief Executive Officer Wes Bush said private-equity firms may be interested in the company�s shipbuilding unit as the third- largest U.S. defense contractor studies a sale or spinoff.�� There might be financial buyers who see it as a value-creatio opportunity,� Bush said today in an interview at the Farnborough Air Show, near London. As a standalone company focused on ships, the division also might attract other military contractors, Bush said. BBG

o Rio Tinto to announce advanced alloys and contracts with Airbus and Bombardier � WSJ

o LG Chem Ltd., South Korea�s biggest maker of chemicals, reported a better-than-expected 36 percent jump in second-quarter profit after the global economic recovery boosted demand for materials used in plastics and synthetic rubber.� BBG

o CCK Crown Holdings reports Q2

o CAEI China Architectural Engineering receives extended waiver from bondholders to acquire majority stake in ConnGame

o GVA Granite Construction a $22M contract by the Washington Department of Transportation

o LMT Lockheed Martin awarded $819.6M JSF contract modification

o GFF Griffon to acquire Ames True Temper from Castle Harlan for $542M

o IEX IDEX Corp reports Q2 EPS

o PKG Packaging Corp reports Q2 EPS

o QLTY Quality Distribution names current CFO Stephen Attwood to president, COO roles, effective 2-Aug

o FLIR FLIR Systems awarded $14.1M delivery order from STARA Technologies, Inc.

o LDSH Ladish Company reports Q2 EPS

o UTX Pratt & Whitney share of China Southern Order valued at $132M

o GE Universal Pictures finds success in animation with a different approach - LA Times

o LMT Rolls-Royce selected by Lockheed Martin as the in-service support provider for the engines on the CC-130J in contract worth potentially $260M� - SA London

o GR Goodrich, Mubadala Aerospace sign heads of agreement to establish UAE JV

o BA European Commission to complain to WTO about delays in settling Boeing-Airbus subsidies dispute - London Times�

o BA Boeing, Royal Jordanian sign order for three additional 787 Dreamliners

TRANSPORTS

o Ryanair Holdings (RYA.ID) reports beter, trades up

o ERJ Flybe orders up to 140 Embraer E series aircraft; potential total order value of $5B - SA

TECH/MEDIA/TELECOM

o IBM- down 4.3%. IBM reported a mixed Q2. Revs were light due entirely to strong currency fluxuations, and weaker service signings. Service signings are a sign of longer term trends and could be a worry into the future. The services segment underperformed posting a disappointing 1% rev growth and a 12%y/y decline in bookings. IBM upped guidance slightly due to improving IT trends, but guidance still looks to be below the street.

o TXN- down 5.3%. mixed Q2 with revs coming in slightly light. EPS was in line, GMs were better, and TXN issued very strong guidance, but the top line miss was investor�s focus. Weaker results in the wireless segment were largely responsible for the top line miss. The company said this unexpected weakness came from one customer, and most believe that customer to be NOK. TI�s growth was strong across all other segments in the Q and all geographies ex-Japan had strong performance as well. Guidance appears to be very strong with the low end of guidance in line with st expectations.

o Cable & Wireless- issued a profit warning due to slow down in spending. C&W warned that while most businesses are performing as expected, UK emergency budget means public sector business will slow materially.

o ATHR- down 6.9%. slightly better Q2, but weakness in PCs caused downward pressure on the stock. The PC segment suffered from uncertainty in Europe and weakening in netbook demand. ATHR announced the acquisition of Opulan to help expand China presence. Although guidance was also better, a continued slowdown in the PC segment gave a cause for concern

o AMZN- said Kindle sales accelerated in Q2 and that�s it is selling more e-books than hardcover, even with harcover sales still growing. Kindle store is showing strong performance so it is believed that even if new multimedia tablets replace the Kindle that the Kindle store will stil account for a good share of the e-book market. The street seems to believe the success of the iPad and coming launch of more tablets does not mean the Kindle cannot perform well.

o SY- better Q2 and SAP announced an extension to the company�s outstanding tender offer, which gives indication that SAP�s acquisition of SY is progressing well. The strong Q results were driven by better mobile software license revs and messaging revs.

o INTC: reaches antitrust accord with FTC- FT

� Intel, the US chipmaker, has reached a preliminary settlement with the Federal Trade Commission that will include concessions on its business

� The agreement, which is expected to be finalised by next week, will not include fines because the FTC does not have the authority to issue civil penalties. But it will force Intel to make changes to its marketing

� http://www.ft.com/cms/s/2/667e8706-93a5-11df-bb9a-00144feab49a.html

o Facebook Claimant Must Answer �Where Have You Been?� to Succeed- BBG

� Paul Ceglia, the western New York man who says a 2003 contract with Facebook Inc. founder Mark Zuckerberg entitles him to 84 percent of the company, will have to answer a critical question to pursue his claim; Where have you been?

� http://www.bloomberg.com/news/2010-07-20/facebook-claimant-must-answer-where-have-you-been-to-succeed-in-lawsuit.html

o CSTR, NFLX: Redbox Plots Web Strategy in Challenge to Netflix- BBG

o NOK Nokia looking for new CEO - WSJ

o MANT Mantech International COO Lawrence Prior has submitted his resignation

o INOD Innodata Corporation withdraws 7.5M share offering originally filed on 5-Jan-05

o INFY Infosys downgraded to sell from hold at Societe Generale - SA London

o NFLX Netflix to enter Canada - Globe and Mail

o ALU Alcatel-Lucent downgraded to sell from reduce at West LB Equity Markets - SA London

o IBM NY Times discusses the management changes at IBM

� http://dealbook.blogs.nytimes.com/2010/07/20/i-b-m-moves-to-concentrate-power-at-top/

o VOD Vodafone downgraded to hold from buy at ING Financial - SA London

o Tech Spending: Internet�s plumbing is behind recent surge in tech spending -- WSJ

o BIDU- gained market share from GOOG in Q2- iResearch. Recall: BIDU reports 7/21

o Panels: China TV panel orders for peak season have yet to come, say Taiwan suppliers- Digitimes

o GOOG: China satisfied with Google search engine tweak- Reuters

o LCDs: LCD makers brace for softer H2 as TV growth weakens- Reuters

o Vivo: PT and Telef�nica must resume negotiations for the sale of Vivo- Economico

o DELL Will Buy Data-Storage Company Ocarina Networks- BBG

o SAP, SY: deal set to win EU ok this week- Reuters

o ATAC: ATC Technology to go private for $513 mln- Reuters

o MOT: Dealbook discusses MOT Motorola�s path to breakup

� http://dealbook.blogs.nytimes.com/2010/07/20/motorolas-path-to-breakup/

o ATHR Atheros Communications announces acquisition of Opulan Technologies- SA

MATERIALS

o Weekly USDA crop report says 72% of corn in good or excellent condition ; compares to 73% last week and compares to 71% in prior year.

o Demand for steel exports from Japan has stalled, an industry group chief said today.� BBG

� Japan Iron and Steel Federation Chairman Eiji Hayashida is �not optimistic� about steel demand in Asia, he said today at a press briefing in Tokyo.

o Goldman denies links with global food crises from Telegraph

� Goldman Sachs has angrily defended itself against a public campaign that claims the bank is exacerbating global food crises through its commodity trading operations

o Rio Tinto to announce advanced alloys and contracts with Airbus and Bombardier -- WSJ International Ferro Metals issues Q4 production report for the three months to 30-June 2010

o STLD Steel Dynamics reports mixed..recall guided 6/16..call 10 am et..

� Call in number: 719.325.4867

� Call in code: 7176049

o SOA Solutia to expand its operations in China to include the production of Vistasolar ethylene vinyl acetate encapsulant at its Suzhou, China facility

o RTP Rio Tinto to announce advanced alloys and contracts with Airbus and Bombardier -- WSJ

o Aquarius Platinum (AQP.AU) soared 14% when the South African government said it did not intend to stop mining with its new safety directives.

AUTOS

o Polaris Industries (PII) Posts Q2 EPS of $0.75, Tops Street; Guides FY10

� Revs are expected to be 15 - 20% above FY09 revs of $1.57 billion.� Consensus is looking for $1.74 billion.

o Automakers led China up as SAIC Motor (600104.CH) said it expects H1 profit to rise by at least 300%.

o New York grand jury subpoenas Toyota Motor � Nikkei related to problems with steering relay rods

o Toyota Says Subpoenaed by US Federal Grand Jury� CNBC link

o High Times, Tight Supply for Used-Vehicle Market CNBC link

o French workers agree to General Motors factory plans from Reuters

� * Workers agree benefit cuts, salary freeze as part of deal

o Nissan Motor Co.�s plants in Tennessee and Mississippi will resume normal operation today, Steve Parrett, a spokesman at the company�s North American manufacturing unit, said by phone today.�� Plants in Japan resumed production yesterday, he said.� BBG

o Volkswagen AG unveiled plans for a series of hybrid and electric vehicles that Chief Executive Officer Martin Winterkorn says will account for 3 percent of the German carmaker�s global sales by 2018.�� VW will introduce the Up! city-car or the Golf compact, its best-selling model, as an all-electric vehicle in the U.S. by 2013. Before that, the automaker plans to sell a gas-electric hybrid version of the Touareg sport-utility vehicle later this year, followed by a Jetta hybrid in 2011. BBG

o Honda Motor Co., whose fleet of vehicles is rated the most fuel-efficient in the U.S., will introduce an all-electric car and a plug-in hybrid in 2012 as rival carmakers threaten its leading position. BBG

FINANCIALS

o Reform Bill Signing Set for Wednesday from American Banker

� President Obama is expected to sign the financial reform bill on Wednesday, according to lobbyists and sources on Capitol Hill.

o Regulators Called to Testify This Week from American Banker

� The Senate Banking Committee will hold a security, international trade and finance subcommittee hearing Tuesday on international cooperation in modernizing financial

o Uncertainty and doubt surround the EU's stress tests on banks

� Additional concerns are arising about the EU's stress tests on banks, as officials express optimism despite economic challenges across the region. Investors are worried that some banks' balance sheets contain undisclosed problems. Industry observers are concerned that if Greek banks fare well in the assessments, the tests might not be stringent enough. Meanwhile, the Committee of European Banking Supervisors, which is conducting the tests, is facing challenges related to how it is handling the exercise. The Wall Street Journal (20 Jul.) , Reuters (19 Jul.)

o European banks might need a capital ratio of 6%

� Stress tests being conducted on European banks might require a Tier 1 capital ratio of 6% or more, the same threshold U.S. financial institutions faced during their tests, sources said. Banks that fail to meet that requirement will need to raise capital, one of the sources said. Bloomberg (19 Jul.)

o Germany's Hypo Real Estate failed stress tests

� Hypo Real Estate Holding, a German lender nationalized during the financial crisis, failed Europe's stress tests on banks, sources said. Hypo is probably the only German bank that won't pass the tests, one person said. Bloomberg (20 Jul.) , Google/The Associated Press (19 Jul.)

o Senate committee plans to discuss the progress of TARP

� The U.S. Senate Finance Committee will hold a hearing this week on the progress of the Treasury Department's Troubled Asset Relief Program. Lawmakers plan to question Neil Barofsky, the Treasury's special inspector general; Elizabeth Warren, chairwoman of the Congressional Oversight Panel; and other witnesses. The Hill/On The Money blog (19 Jul.)

o Small Banks Avoid Overhaul's Sting from WSJ.com

� Small banks' lobbyists are pleased their clients sidestepped more-onerous regulation, or at least blunt the impact of potential changes in the financial regulation bill, from new rules on capital to fees that will pay for new regulations

o Mega Banks Pressure Smaller Players from WSJ.com

� Bank of America, J.P. Morgan Chase and Wells Fargo hold 33% of all deposits and made nearly 60% of home mortgages, pushing smaller banks out of the market.

o Tucker Said to Tell A.I.G. Staff He'll Triple A.I.A. Value � link from DealBook

� Mark Tucker, who was named head of American International Group's main Asia division, told staff that he plans to triple the unit's value to $100 billion, Bloomberg News reported, citing a person with knowledge of his remarks.

o Goldman denies links with global food crises from Telegraph

� Goldman Sachs has angrily defended itself against a public campaign that claims the bank is exacerbating global food crises through its commodity trading operations

o RBS gets trio of bids for WorldPay unit -source from Reuters

� LONDON, July 20 (Reuters) - Royal Bank of Scotland received three bids for its $4 billion payment processing business WorldPay by Monday's deadline, a person familiar with the matter said.

o Fabrice Tourre, the Goldman Sachs Group Inc. executive director sued by the Securities and Exchange Commission for fraud, disputed the claims and said he relied on his firm�s legal and compliance department.� BBG

o HRB:� H&R Block Inc., the biggest U.S. tax preparer, may get a merger proposal from closely held Liberty Tax Service, according to Liberty founder John Hewitt. The stock rose as much as 5.5 percent monday

o MS Morgan Stanley considering plans to scale back its real-estate investment business - WSJ

o PLFE Presidential Life Corp reiterates that Herbert Kurz is not eligible to nominate a slate of directors at the company's annual meeting

o RLI RLI Corporation reports Q2 operating EPS

o FDEF First Defiance Financial reports Q2 EPS

o PLFE Presidential Life Corp shareholder Herb Kurz files to inspect the company's stockholder list

o AF Astoria Financial settles class action lawsuit

o PNC PNC Bank initiated outperform at BMO Capital; target is $73 - wires

o BRO Brown & Brown reports Q2 EPS

o ZION dn 4%...misses�.Zions Bancorp loss Widens More Than Expected on Debt Costs

� Zions reported EPS loss of ($0.84), belowconsensus of ($0.55)

� NCOs Higher than Expected

� Note Zions Bancorporation is� this year�s second best-performing stock in the Standard & Poor�s 500 Index

o PRK Park National reports Q2 EPS

o RBS Royal Bank of Scotland gets 3 bids by Monday deadline for WorldPay -- Reuters citing source - SA London

o AIG WSJ is positive on the new CEO at American International Group's AIA unit

o AIG AIA wants independence from American International Group - FT

o BK Bank of New York Mellon reports Q2 EPS $0.55 vs Reuters $0.55..

� Company reports revenues of $3.31B vs Reuters $3.35B.

o MBWM Mercantile Bankshares reports

REAL ESTATE

o Cramer: This Week's Housing Data To Disappoint

o Morgan Stanley Ponders Its Property from WSJ.com

� After building one of the biggest, most prestigious real-estate-investing businesses on Wall Street, Morgan Stanley is weighing plans to scale it back.

o Remember Jumbo Loans? They're Back! CNBC link

o No relief is in sight for the U.S. housing market

� It is clear that the U.S. housing supply was too big to be affected much by the tax credit for buyers, and for that reason, a bleak future awaits the market, according to The Economist. "A durable solution to the crisis in housing needed to involve an answer to the epidemic of negative equity and a meaningful labour market recovery," The Economist notes. "America has neither." The Economist/Free Exchange blog (19 Jul.)

o Why Mortgage Buybacks Haven't Peaked from American Banker

� Mortgage buyers are finding new reasons to make the originators buy back home loans, ensuring that repurchases will remain a burden for lenders for the next few years.

o Home sales rebounding in NYC: report from The Real Deal New York - Latest News

� New York City�s housing market continued its rebound in the second quarter of 2010 as the total amount of residential real estate sales increased 72 percent by dollar amount compared to the second quarter of 2009, according to a new report by ResidentialNYC.com, the public real estate listings site of Real Estate Board of New York. The value of all deals increased to $7.6 billion last quarter, up from $0.8 billion in the second quarter of 2009. [more]

o U.S. commercial real estate prices rose for the second straight month in May as the dollar value of sales climbed, Moody's Investors Service said. The Moody's/REAL Commercial Property Price Index climbed3.6 percent from April, the company said today in a report. The index rebounded 8.6 percent since October 2009, while remaining 39 percent lower than its 2007 peak. 39 percent lower than its 2007 peak.� Property sales jumped 58 percent to $34.2 billion in the first half compared with the same period a year earlier

o DLR Digital Realty Trust raises quarterly common-stock dividend 10.4% to $0.53 for Q3

o ELS Equity Lifestyle Properties reports Q2 FFO

o IRC Inland Real Estate announces acquisition of The Point at Clark Retail Center

CONSUMER

o WHR : Whirlpool reports Q2 results beter..guides OK .. Guides full year U.S. industry unit shipments to ~+5% vs prior +3-5

� Guides full year EPS to $9.00-9.50 vs prior $8.00-8.50 vs Reuters $8.84. Guides full year FCF to ~$550-650M vs prior $500-600M

o Books:�� Amazon says Kindle books are outselling hardcovers from Wash Post

� Amazon.com said Monday that growth in sales of its Kindle digital reader accelerated every month in the second quarter and that it's selling more electronic books than hardcover editions

o Teen wasteland from NY Post says kids are not spending

� The kids are not alright. Teenagers -- traditionally some of the most resilient consumers of discretionary goods like apparel -- are not spending at their usual robust rate this

o NBTY may get higher bid from NY Post

� One of the year's biggest buyouts may get even bigger. Rival suitors in the $3.8 billion auction for vitamin giant NBTY, who did not get a chance to bid, are being told by leading Wall Street lenders that they would provide more in financing than Carlyle received in...

o CAG ConAgra completes sale of its Gilroy Foods & Flavors dehydrated and vegetable product operations to Olam International

o DIT AMCON Distributing reports Q3 EPS

o TW Towers Watson files $425M secondary offering for holders through BofA and Goldman Sachs

o TUP Tupperware reports Q2 EPS

o RAH Ralcorp Holdings reports Q3 EPS

o HLF Herbalife announced that China'sMinistry of Commerce has granted five additional licenses

o MLHR Herman Miller downgraded by S&P to BBB- from BBB; outlook stable

o FTLK Funtalk China Holdings files amended F-1

o ACOM, APKT, SFLY Morgan Keegan initiates ancestry.com initiated outperform; Acme Packet initiated market perform; Shutterfly initiated market perform

GAMING, LODGING, & LEISURE

HEALTHCARE

o Doctors say it's already over for diabetes drug Avandia from USATODAY.com

� An upcoming decision by the Food and Drug Administration on whether to pull the drug off the market may be moot.

o AET announced that its second-quarter 2010 results now will be released to the public on Tuesday, July 27 at 20:30 ET. Aetna will host its conference call as originally planned, at 8:30 ET, July 28.

o APPY -12.3% (Appyscore elisa-based trial results)

o APPY : AspenBio Pharma reports Appyscore elisa-based pivotal trial results

� Conference call tues� at 8:00 ET

� Dial-in: 1-866-356-4279 for domestic

� Passcode: 69273811)

o CYPB Cypress Bioscience confirms receipt of unsolicited proposal from Ramius to acquire company for $4/share in cash

o TBET Tibet Pharmaceuticals files amended S1��

o PFE Pfizer suspends chronic pain studies in Tanezumab clinical trial program

o LNCR Lincare Holdings reports Q2 EPS

o ENDP Endo Pharmaceuticals receives FDA approval for generic of Roche's Cellcept 500mg Tablet

o VITA Orthovita announces presentations of Cortoss clinical study results

o ZIOP Ziopharm Oncology announces initiation of palifosfamide pivotal study

o AVCA Advocat enters agreement for development of West Virginia facility

o ICUI ICU Medical reports Q2 EPS

o ODSY Odyssey Healthcare guides Q2 EPS

o NVS Novartis receives approval in China for Rasilez

OTHER

� Stocks mentioned on CNBC's Mad Money with Jim Cramer - TheStreet.com�

+ FLR, SHAW, GILD, PWER and CAG

- JEC and KFT

EUROPE TRADING WRAP

Energy

o OMV (+1.7%), Q� production +0.2%, refining margins at 3.39$ v2.92$

o Renewable Energy (+3%), Numbers beat estimates.

o Int�l Power(+1.9%) warm reception from investors on GDF tie-up.

o UK Coal (+8.3%) regains some of yesterdays losses on warning.

Mining

o Aquarius Plat (+7.5%), safty talks in Sth Africa less negative.

o Ryanair reports Q1 Net �93.7M v �113Me, Rev �896.8M v �887Me; Reiterates FY outlook

o �Hermes reports Q2 Rev �567M v �533Me; H1 Rev �1.1B v �1.0Be; Raises guidance for FY revenue growth

o - William Hill provided trading update; 26-week group net revenue +3% y/y; op profit +43% y/y

ASIA TRADING WRAP

Japan

� NKY -1.15%, TPX -0.99%

� NKY fell but was off lows in the morning, with tech shares hit after IBM and Texas Instruments missed 2Q and as exporters fell on a strong yen. Turnover on the TPX fell to 876.24B yen from 1.21 trillion yen yesterday

� Stocks fell across most sectors led by oil & gas, financials, industrials, consumer and materials. Utilities rose

� Exporters fell after dollar/yen fell to the 86 handle: autos -2.16%, CE -1.71%.

� Best performing sectors on the TPX: airline +1.67%, electric power & gas +0.77%, fishery, agriculture & forestry -0.74%; worst performing sectors: glass & ceramics -4.73%, electric appliances -4.71%, oil & coal -4.70%

Hong Kong

� HSI +0.86%; HSCEI +1.74%

� Stocks rose led by developers on optimism China will relax policies after 2Q growth slowed. Turnover on the HSI fell to HK$12.83B from HK$18.43B yesterday

� Mainland property developers rose after Morgan Stanley said China may loosen measures to curb overheating as the economy slows:

� Coal names rose:

China

� SHCOMP +2.15%; SZCOMP +2.75%

� Stocks rose for a 2nd day on expectations Beijing will ease its tightening policies after growth slowed in 2Q. Turnover on the SHCOMP rose to 76.33B yuan from 52.23B yuan yesterday

� Stocks rose across most sectors led by health care, materials, tech and industrials

� Real estate +2.22% after Morgan Stanley said China may loosen measures to curb overheating as the economy slows

� Autos +1.16% after SAIC Motor (600104 CH) said its 1H profit may have quadrupled

� Brokerages +3.17% after the China Securities Journal reported the government may allow foreign investors to trade index futures

� Coal +2.69% after Shenyin & Wanguo Securities said coal stocks may rise up to 30%

INVESTMENT BANKING

M&A

o Deals raise hopes of rebound in global M&A- FT

o Some 25 potential and agreed deals worth nearly $8bn were announced on Monday in sectors ranging from UK engineering to Italian frozen food, according to Dealogic

o Bankers said the growing amount of cash on balance sheets was likely to put companies under pressure to utilise it. They added that private equity groups also were looking to spend a large overhang of capital raised before the financial crisis

o http://www.ft.com/cms/s/0/f60d839c-9367-11df-bb9a-00144feab49a.html?ftcamp=rss

o Buyout deals increase amid investor, tax pressures- Reuters

o Private equity deals have spiked in recent months with a spate of assets changing hands as funds face pressure to spend capital raised in the boom and are nervous about the threat of higher taxes

o This year so far, there have been $194 billion of private equity deals done worldwide, nearly three times the amount over the same period last year

o http://www.reuters.com/article/idUSN1921979920100719

o TPG, Blackstone Said Likely to Drop Out of RSH RadioShack Bidding- BBG

o TPG plans to drop out of the bidding for RSH

o Blackstone Group LP, which had weighed a joint offer with TPG, is not likely to pursue the electronics retailer on its own

o Bain Capital, which had also expressed an interest in RadioShack, is also no longer pursuing the Fort Worth, Texas-based company,

o MS Morgan Stanley Ponders Its Property- WSJ

o After building one of the biggest, most prestigious real-estate-investing businesses on Wall Street, Morgan Stanley is weighing plans to scale it back

o Private-equity firms looking to expand in this arena, including KKR, TPG, BlackRock Inc. and Brookfield Asset Management, are eyeing the firm's funds

o http://online.wsj.com/article/SB10001424052748704720004575377341957716712.html

o PLA- Why Should Hefner Have All the Fun?- Dealbook

o �If I sold it, my life would be over.� Said Hefner

o �Penthouse is just looking for publicity. They�re not in the picture,� Mr. Hefner wrote on Twitter, quickly batting down its proposal

o But should the company be able to ignore a rival offer like that? Why should public shareholders be disenfranchised from competing bids when a controlling shareholder wants to take a company private?

o http://www.nytimes.com/2010/07/20/business/media/20sorkin.html

o Einhorn Buys AAPL Apple, Saying Its Growth Prospects Are Undervalued- BBG

o David Einhorn, the hedge-fund manager known for shorting Lehman Brothers Holdings before it collapsed, said he bought shares of Apple Inc. in the second quarter because the iPhone maker�s growth is undervalued

o Einhorn�s firm, Greenlight Capital Inc., purchased the stock at an average price of $248.09 each, or 15 times the money manager�s estimate for 2010 earnings

o http://www.businessweek.com/news/2010-07-20/einhorn-buys-apple-saying-its-growth-prospects-are-undervalued.html

o The Tax Man Cometh: HRB H&R Block May Get Bid- Dealbook

o A former employee of H&R Block who once tried to convince the nation�s largest tax company that the future was in computerized preparation now has his sights on taking over at his old firm

o John Hewitt, founder and chief executive of Liberty Tax Service, said Monday that he was trying to contact a departing board member, Thomas Bloch, to discuss the potential for combining his privately held company with H&R Block

o http://dealbook.blogs.nytimes.com/2010/07/19/the-tax-man-cometh-hr-block-may-get-bid/

o GFF Griffon to Acquire Ames True Temper for $542 Million- BBG

o The transaction will be funded with $75 million in cash and $500 million in debt financing, Chief Executive Officer Ron Kramer said in an interview

o �We�re starting to use our financial power to go and buy quality businesses,� said Kramer,

o Griffon outbid private-equity firms in an auction managed by Credit Suisse and UBS

o PT and Telef�nica must resume negotiations for the sale of Vivo- Economico

o PT continues to structure alternatives that allow you to stay in Brazil in order to sell 50% of Vivo to Telef�nica

o This is the crux of the whole process. PT need solutions that will convince the government to unblock the sale of Vivo, so the presence in Brazil is an essential point.

o http://translate.google.com/translate?js=y&prev=_t&hl=en&ie=UTF-8&layout=1&eotf=1&u=http%3A%2F%2Feconomico.sapo.pt%2Fnoticias%2Fpt-e-telefonica-devem-retomar-negociacoes-para-a-venda-da-vivo_94947.html&sl=auto&tl=en

o DELL Will Buy Data-Storage Company Ocarina Networks- BBG

o Dell Inc. agreed to buy closely held Ocarina Networks, a maker of hardware and software for reducing information storage requirements, to bolster its growing corporate data-center business. The price wasn�t disclosed

o The technology complements Dell�s EqualLogic storage systems, the company said in a statement

o Carlyle seals two buy-out deals, seeking third- FT

o NBTY may get higher bid- NYPOST

� Rival suitors in the $3.8 billion auction for vitamin giant NBTY, who did not get a chance to bid, are being told by leading Wall Street lenders that they would provide more in financing than Carlyle received in its recommended $55 a share offer

� With jitters persisting about a possible double-dip recession, "it's about 50-50 whether it will happen," the source said, of the prospect of a higher counter offer for NBTY.

� http://www.nypost.com/p/news/business/nbty_may_get_higher_bid_GxPmkZ7lxLLCMJhM1EXRxI

o Carlyle Said to Buy Qualicorp for $1.2 Billion- BBG��

� Carlyle Group agreed to buy a controlling stake in Brazilian health-care company Grupo Qualicorp in a deal valued at $1.2 billion

� �Brazil�s stability, growth and credibility in the global economy make it a particularly attractive place to invest now,� Stephen Wise, managing director at Carlyle, said in the statement

� http://www.businessweek.com/news/2010-07-19/carlyle-said-to-buy-qualicorp-for-1-2-billion.html

o Carlyle, Gokongweis Bid for San Miguel�s Hot Dog Unit- BBG

� The Carlyle Group is vying with three Philippine groups to buy a stake in San Miguel Corp.�s hot dog and poultry unit

� The Washington-based private equity firm company and the Gokongwei, Aboitiz and Campos families have submitted bids

o NOC Northrop Says Private-Equity Firms May Buy Ship Unit- BBG

o Northrop Grumman Chief Executive Officer Wes Bush said private-equity firms may be interested in the company�s shipbuilding unit as the third- largest U.S. defense contractor studies a sale or spinoff

o �There might be financial buyers who see it as a value- creation opportunity,� Bush said today in an interview at the Farnborough Air Show, near London.

o SAP, SY Sybase deal set to win EU ok this week- Reuters

o German software maker SAP AG is set to gain unconditional European Union regulatory approval this week for its $5.8 billion takeover of Sybase

o The European Commission has set a July 22 deadline for its decision. A phase 1 review is a first-stage investigation that lasts 25 working days and can be extended to 35 working days if companies have offered commitments

o http://www.reuters.com/article/idUSBRU01094320100720

o GDF Suez hopes to achieve the right spark- FT

o The head of GDF Suez was on Monday locked in a meeting with his board of directors preparing to make an initial proposal to Britain�s International Power for a partnership that would create one of the world�s biggest independent power generators

o in spite of insistence that talks remain at a very early stage, it seems that much progress has been made in the six months since the discussions last collapsed

o http://www.ft.com/cms/s/0/0bc8dc02-9374-11df-bb9a-00144feab49a.html

o International Power's top investor backs fresh tie-up talks with GDP- Telegraph

o Invesco Perpetual, with an 11pc stake, was quick off the mark as International Power (IP) shares jumped 11pc at one stage following confirmation that talks had restarted amid hints of a cash payout to investors.

o Neil Woodford, head of investment at Invesco, said the link-up made a lot of sense and added: "We are enthusiastic about this but obviously a lot will depend on the terms which we hope will reflect a cash premium."

o http://www.telegraph.co.uk/finance/newsbysector/epic/ipr/7899069/International-Powers-top-investor-backs-fresh-tie-up-talks-with-GDP.html

o VRX Valeant Sued by Investor Over BVF Biovail Merger Terms- BBG

o Valeant Pharmaceutical�s $3.2 million merger with Biovail., Canada�s largest publicly traded drugmaker, shortchanges Valeant investors while enriching the company�s executives, a shareholder said in a lawsuit

o The combination of the drug companies, which includes a total cash payment of $18.55 for each share of Valeant stock, is being carried out �at an unfair price via an unfair process,� he said

o http://www.bloomberg.com/news/2010-07-19/valeant-pharmaceuticals-sued-by-shareholder-over-planned-biovail-merger.html

o ATAC ATC Technology to go private for $513 mln- Reuters

o ATC Technology, which makes transmission systems and repairs electronic equipment, said it agreed to be acquired by privately held GENCO Distribution System Inc for about $512.6 million in cash

o http://www.reuters.com/article/idUSSGE66I0F520100719

o Dealbook discusses MOT Motorola�s path to breakup

o http://dealbook.blogs.nytimes.com/2010/07/20/motorolas-path-to-breakup/

o RBS gets trio of bids for WorldPay unit- Reuters

o Royal Bank of Scotland received three bids for its $4 billion payment processing business WorldPay by Monday's deadline

o All interested parties are private equity firms. As expected, Advent International and Bain have teamed up, while TPG has also bid and so has Clayton, Dubilier & Rice, the source said. The Advent/Bain consortium is seen as the front runner

o http://www.reuters.com/article/idUSWLA875920100720

o BX Blackstone not considering AlpInvest- Reuters

o Private equity firm Blackstone is not considering a bid for AlpInvest Partners, a source familiar with the situation said on Monday, contradicting a report by Financial News published on the Wall Street Journal's website

o http://www.reuters.com/article/idUSN1919666120100719

o NSN Nokia Siemens buys MOT Motorola network ops for $1.2 billion- Reuters

o Nokia Siemens Networks will buy Motorola's telecom network equipment business for $1.2 billion, in an effort to add mew customers in markets such as Japan and North America where it has been seeking growth

o RBC Capital analyst Mark Sue said while the sale price was much lower than his expectation for a $2b to $3b deal, it still made sense for Motorola to sell the assets.

o http://www.reuters.com/article/idUSTRE66I24P20100719

o China Architectural Engineering Receives Extended Waiver from Bondholders to Acquire Majority Stake in ConnGame- PR

o Under the extended waiver agreement, the Company is able to move forward with its proposed acquisition of a 60% equity interest of ConnGame for the issuance of the 25 million CAEI shares

o ATHR Atheros Communications announces acquisition of Opulan Technologies- SA

o LG Household says considers acquiring Pasteur- Reuters

o "We have been considering acquiring dairy producers to expand into a new business and Pasteur is one of the potential targets...We are reviewing the company but nothing has been decided," LG said in a statement

o CYPB Cypress Bioscience Confirms Receipt of Unsolicited Proposal From Ramius- BBG

o Cypress Bioscience today confirmed that it has received an unsolicited proposal from Ramius to acquire the Company for $4.00 per share in cash.

o Cypress's stockholders are advised to take no action at this time.

o �Salamander Buys Soco Thailand Field for $105 Million- BBG

o The field�s three development wells will produce an average of about 8,500 barrels of oil a day in 2010

o The deal, funded through a combination of cash and loans, will boost Salamander�s average production to more than 20,000 barrels of oil a day, the explorer said

o Australia's Paladin is in talks to take over NGM- Reuters

o Australia-based Paladin Energy said it was in talks to take over NGM Resources and was undertaking due diligence

$ RAISING

IPOs

o AIG's Shrewd Move Buoys AIA Float- WSJ

� Mark Tucker's appointment as chief executive of AIA Group is a shrewd move by American International Group boss Robert Benmosche

� Mr. Tucker was a respected chief executive of U.K. insurance giant Prudential PLC until stepping down last year. Previously, he was responsible for building Prudential's business in Asia into a strong competitor to AIA itself

� http://online.wsj.com/article/SB10001424052748703720504575377380900789538.html?mod=ITP_moneyandinvesting_11

o Tucker Said to Tell A.I.G. Staff He'll Triple A.I.A. Value- Dealbook

� http://dealbook.blogs.nytimes.com/2010/07/20/tucker-said-to-tell-a-i-g-staff-hell-triple-a-i-a-value/

o AIA seeks to sever AIG ties in listing- FT

� AIA has begun talks with potential strategic investors as the Asian life assurer seeks backers to ensure it can gain independence from its US parent AIG by listing more than half its equity on the Hong Kong market

� http://www.ft.com/cms/s/0/8c3f1378-937a-11df-bb9a-00144feab49a.html

o GDOT Green Dot Corp increases IPO size to 4.17M from 3.85M

PRICINGS

o Initial Offerings

o CIS Camelot Information Systems 13.3m share IPO expected to price 7/20 via GS and Barclays: Price Talk $11-13

o GDOT Gren Dot 3.9m share IPO expected to price 7/21 via JPM and MS: Price Talk $32-35

o SRGV Surgivision 2.5m share IPO expected to price wk of 7/19 via Rodman & Renshaw: Price Talk $13-14

o Secondary Offerings

o No offerings still on the schedule for this week

NEWS

o INOD Innodata Corporation withdraws 7.5M share offering originally filed on 5-Jan-05- SA

o Innkeepers USA files for Chap 11 bankruptcy- reuters

� Innkeepers USA Trust (INKPP.PK), a U.S. hotel owner whose portfolio includes some Residence Inn and Hampton Inn hotels, filed for Chapter 11 bankruptcy on Monday, citing crippling debt that hurt its ability to maintain and upgrade its properties.

� Innkeepers owns and operates a portfolio of about 72 upscale and mid-priced hotels under recognized brands such as Marriott, Hilton and Hyatt. About half of its properties operate as Marriott's Residence Inn hotels

� http://www.reuters.com/article/idUSN1911038520100719

o WSJ considers an alternative means for BP to raise cash

� A quick sale of its Alaskan assets to APA Apache would be a neat way for BP to raise cash. But there is no guarantee of that deal happening, so it is worth examining other options

� A possible route is one BP has taken before: the creation of a royalty trust

� http://online.wsj.com/article/SB10001424052748703720504575377313926768410.html

o Energy: VTG Vantage Drilling files $50M secondary offering through Jefferies and Johnson and Rice

o Services: TW Towers Watson files $425M secondary offering for holders through BofA and Goldman Sachs

TODAY�S EVENTS

CONFERENCES

o AGORA FINANCIAL LLC Investment Symposium - Jul 19, 2010 - Jul 23, 2010

o BNP Media Casino Marketing Conference - Jul 19, 2010 - Jul 21, 2010

o European Investment Bank Business and Human Rights Seminar Conference - Jul 20, 2010

o Infocast Waste to Energy Finance & Investment Summit - Jul 19, 2010 - Jul 21, 2010

o Lippert/Heilshorn & Associates Life Sciences & Med Tech Day - Jul 20, 2010

� 9AM: GTF

� 10AM: ANX

� 10:30AM: PURE

� 11AM: CGCP

� 11:30AM: DSCI

o Macquarie Securities Emerging Leaders Corporate Day - Singapore - Jul 20, 2010 - Jul 21, 2010

� CPBY , CSR

o PennWell Corporation Oil Sands and Heavy Oil Technologies Conference - Jul 20, 2010 - Jul 22, 2010

o Terrapinn Asset Allocation Summit - Jul 20, 2010 - Jul 21, 2010

o Terrapinn Banking Outlook Conference - Jul 19, 2010 - Jul 23, 2010

o The Center for Business Intelligence Annual Obesity and Diabetes Drug Development Summit - Jul 20, 2010 - Jul 21, 2010

COMPANY MEETINGS/OTHER DAILY EVENTS

o Shareholder Meeetings

o GMET, PKE, INIS, UTEK

o GE Analyst Meeting

o An FDA panel takes up Genentech's Avastin medication for breast cancer.

o Bank of Canada is widely expected to raise interest rates again.- Barron�s

o British Prime Minister David Cameron travels to Washington to meet with President Obama.

o Fed Governor Dan Tarullo testifes before the Senate Banking Committee about modernizing financial regulation

o Honda Motor's CEO gives a briefing on the midterm business outlook

o The filing deadline for the lead plantiff in a class-action suit against BP

ECONOMICS

o 0745 CSC-Goldman Sachs Chain Store Sales Index

o 0830 New Residential Construction - Housing Starts and Building Permits

o 0855 Johnson Redbook Retail Sales Index

o 1630 API Weekly Statistical Bulletin

o 1700 ABC News Consumer Comfort Index

EARNINGS

o Materials

� Tuesday July 20:CYT

o Industrials/Homebuilders

� Tuesday July 20: PHHM, , IEX, ASTE, NGA, AOS, WCN, ITW, CNH, ATR, TXI, WERN, CTAS

o Consumer/Retail/Education

� Tuesday July 20: WNI, RECN, URI, PEP, CACH, TPX, WHR, PII, RCRC

o Financials

� Tuesday July 20: PNFP, PRK, BK, STT, AMTD, GS, LAB, BSRR, FMFC, FULT, HBHC, MBWM, MI, PEBO, RNST, TSFG, CSBC, FFIC, NWBI, TRST, ABCB, SLM, PTP, BCSB, ESBF, HEOP, PABK, SNBC, MTG, PBNI

o Tech/Telecom

� Tuesday July 20: MANH, AAPL, STX, ALTR, VMW, YHOO, JNPR, MICC, FIS, CRUS, LLTC, SABA, CHTL

o Healthcare

� Tuesday July 20: BIIB, GILD, BSX, SYK, UNH, FRX, JNJ, IDIX, NEOG, MDRX

o Real Estate

� Tuesday July 20: ELS

o Media

� Tuesday July 20: OMC, LEE, CRRC

o Energy

� Tuesday July 20: WFT, BTU

o Autos

� Tuesday July 20: HOG, ALV

o Transportation

� Tuesday July 20: UAUA

***All eco data from Bloomberg and DJ

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