BoA to Pay $2.43 Billion for Merrill Lynch Lawsuit

“(Reuters) – Bank of America (BAC.N) said it will pay $2.43 billion to settle a class action lawsuit with investors who held its securities at the time the company announced plans to acquire Merrill Lynch.

The company expects to incur total litigation expense of about $1.6 billion for the quarter ending September 30.

The litigation expense and a U.K. tax charge are expected to hurt the bank’s third-quarter earnings by about 28 cents per share, the company said in a statement.

The bank will also institute certain corporate governance enhancements until January 1, 2015, under the settlement.”

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Spending outpaced income in the latest data points released this morning. Spending rose due to higher gasoline prices.

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“Security experts say the recent “denial of service” cyberattacks on big U.S. banks were the largest ever recorded by a wide margin. Since Sept. 19, the banking websites of Bank of America Corp. (NYSE: BAC), J.P. Morgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), U.S. Bancorp. (NYSE: USB) and PNC Financial Services Group Inc. (NYSE: PNC) have all suffered day-long slowdowns and been at times unreachable for many customers.

It is not unusual for banks to get hit by cyberattackers and they have some of the best defenses against them. But this time the volume of traffic sent to these sites in order make then crash was unprecedented — 10 to 20 times the volume that normally seen.”

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Gapping up

CT +27.8%, RIMM +17.2%, AZZ +12.8%, ASTX +11.3%, OSUR +4.4%, ACN +3.7%,

HIG +1.6%, FB +1.6%, RMBS +1.3%,  SYT +2.1%

Gapping Down 

EMKR -6.3%, CLWR -4.1%, HTGC -3.7%, NKE -3.6%, WMC -3.5%, MT -3.2%,

CWST -3%, TEF -2.5%, YUM -2.4%, CIT -1.8%, CS -1.8%, RDS.A -1.5%,

NOK -1.5%, MCD -1.4%, RCL -1.3%,

ADTN, AGCO, MTGE, APA, BRCM, CAT, DNR, DVN, HK, MCD, MU, EDU, PFE, QCOM, RIMM, SUP, UTX, UTHR,

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In Play ,

On the Wires 

Food prices are soaring again. Check out the charts…

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The problem is not widespread and Apple is replacing devices for those experiencing the problem.

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“The Food and Drug Administration is warning U.S. consumers that the vast majority of Internet pharmacies are fraudulent and likely are selling counterfeit drugs that could harm them.

The agency on Friday launched a national campaign, called BeSafeRx, to alert the public to the danger, amid evidence that more people are shopping for their medicine online, looking for savings and convenience.

Instead, they’re likely to get fake drugs that are contaminated, are past their expiration date or contain no active ingredient, the wrong amount of active ingredient or even toxic substances such as arsenic and rat poison. They could sicken or kill people, cause them to develop a resistance to their real medicine, cause new side effects or trigger harmful interactions with other medications being taken.”

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“Walgreen says its fiscal fourth quarter net income tumbled 55 percent compared to a year ago when the drugstore operator recorded a big gain from a business sale. Its adjusted earnings still trumped Wall Street expectations.

The nation’s largest drugstore chain says it earned $353 million, or 39 per share, in this year’s quarter. That’s down from $792 million, or 87 cents per share, a year ago.”

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“Consumer prices in the 17 countries sharing the euro rose 2.7 percent year-on-year, the European Union’s statistics office Eurostat said on Friday in a first estimate that marked a rise from 2.6 percent in August.

Markets had expected inflation to ease to 2.5 percent.

Energy prices jumped 9.2 percent after a 8.9 percent rise the previous month.

Core inflation, excluding both energy and unprocessed foods, fell to its lowest level in a year of 1.7 percent in August, the latest month for which the data has been published.”

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“President Francois Hollande’s first annual budget raised taxes on the rich and big companies and included a minimum of spending cuts to reduce the deficit.

The 2013 blueprint relies on 20 billion euros ($26 billion) in tax increases, including a levy of 75 percent on incomes over 1 million euros, and eliminating limits on the wealth tax. Hollande aims to reduce spending by 10 billion euros, bringing the deficit to 3 percent of output from 4.5 percent in 2012. The budget predicts growth of 0.8 percent.”

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“Spanish 10-year government bonds fell, paring the biggest monthly drop in yields this year, before the nation reveals the results of stress tests on its banks as it seeks to avoid a full financial bailout.

The declines pushed the yield above 6 percent for the third day. German bunds extended their longest run of quarterly gains since 1998 even as a report showed euro-area inflation unexpectedly accelerated in September. French bonds headed for a weekly advance as President Francois Hollande’s government delivered its budget. Moody’s Investors Service may announce a review of Spain’s credit rating.”

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“Japanese and South Korean industrial production fell more than economists estimated last month as slowdowns in China and Europe weighed on exports, building the case for more monetary easing.

Japan’s output fell 1.3 percent from July, the biggest decline in three months, a Trade Ministry report showed in Tokyo today. South Korean production slid 0.7 percent, partly on a strike at Hyundai Motor Co.”

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“A People’s Bank of China academic adviser said the risk of a rebound in property prices may help explain why the government is holding back from easing monetary policy to counter a deepening economic slowdown.

That concern is “a big restraint,” Chen Yulu, president of Beijing’s Renmin University, said yesterday to reporters after speaking at a forum in the city. Further cuts in reserve requirementsor interest rates depend on how much external demand worsens, Chen said.”

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Income is up 0.1% vs consensus of 0.2%

Spending is up 0.5%..in line with expectations

Overseas sales helped Research in Motion to post a smaller loss.

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Asian markets and currencies enjoy a second day of gains on speculation China is close to providing stimulus. The Aussie and New Zealand dollars rose overnight to add to decent quarterly performance.

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“European stocks and U.S. futures dropped, while Spanish bonds fell, pushing the yield on the benchmark 10-year securities above 6 percent, before stress tests on the country’s banks. Treasuries and commodities rose….

Spain will present the results of stress tests on its lenders at 6 p.m. in Madrid today. The country’s Prime Minister Mariano Rajoy cut ministries’ spending and imposed a tax on lottery winnings, while France aims to reduce its deficit to 3 percent of gross domestic product from 4.5 percent in 2012. Japan’s industrial production fell more than expected, while output in South Korea dropped for a third month, government reports showed.”

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