Short Covering Ahead of $GRPN Earnings

$GRPN is up  2% and is said to be subject of short covering.

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“AMR Corp., the parent of American Airlines, is considering what its CEO calls the “attractive option” of a merger with smaller competitor US Airways Group Inc. (NYSE: LCC) as the company prepares to exit bankruptcy by the end of this year. A decision could come in “a matter of weeks,” according to a report in the Financial Times”

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$TSO will buy two refineries in California from BP. Markets are celebrating the news.

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“Investors need to “wake up” and prepare for unparalleled uncertainty facing the global economy, where black swan events — unlikely occurrences deemed impossible to foresee but appear obvious in hindsight — cannot be ruled out, said John Bogle, founder of the Vanguard Group.

Stocks, Bogle said, remain a choice investment despite the perceived risks associated with delving into equities markets.

“It’s urgent that people wake up,” Bogle told The New York Times. ”

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“Pfizer Inc.’s (PFE) animal-health business, Zoetis Inc., filed plans for an estimated initial public offering of up to $100 million in Class A common stock.

Pfizer said the offering is expected to represent an ownership stake of up to 20%.

Pfizer will transfer its animal-health business to Zoetis before the IPO is complete, which is targeted for the first half of 2013.”

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Home builder stocks are surging as investors are perceiving a rebound while shorts are covering.

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” On the eastern bank of the Mississippi River, about an hour upstream from New Orleans, the outline of Nucor Corp. (NUE)’s new $750 million iron-processing plant is rising between fields of sugar cane and sweet gum trees.

Surveying the facility from the road, Michael Eades, president of Ascension Economic Development Corp., says it’s part of a wave of investment lured by low natural gas prices to this stretch of Louisiana’s industrial riverfront. Companies such as Westlake Chemical Corp., Potash Corp. of Saskatchewan Inc. and Methanex Corp. (MX) have projects in the works. Ormet (ORMT) Corp. reopened an alumina refinery last year, bringing back 250 jobs.”

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” SHANGHAI, Aug.13, 2012 /PRNewswire-Asia/ — Focus Media Holding Limited (“Focus Media” or the “Company”) (FMCN) today announced that its Board of Directors has received a preliminary non-binding proposal letter, dated August 12, 2012, from affiliates of FountainVest Partners, The Carlyle Group, CITIC Capital Partners, CDH Investments and China Everbright Limited and Mr. Jason Nanchun Jiang, Chairman of the Board and Chief Executive Officer of Focus Media, and his affiliates (together, the “Consortium Members”), that proposes a “going-private” transaction (the “Transaction”) for $27.00 in cash per American depositary share, or $5.40 in cash per ordinary share. ”

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Gapping up

ASTI +3.8%, ELN +2.3%, GOOG +1.6%, SRI +13.5%,  S +1.6%,  CPB +1%,

IP +0.6%, TSO +1.6%,  ASTI +3.8%, GME +3.2% ,  GALE +10.7%,  SHLD +6.1%

Gapping down

TEVA -1.7%, SDRL -1.7%, FB -1.4%, RDS.A -0.5%, YHOO -0.3%, GSK -0.6%,

RIMM -1.0%, VC -1.5%, NPSP -2.5% ,  PSTI -5.4%

BBBY, CPB, KO, COP, EOG, FIVE, F, GOOG, IP, JCP, LMCA, KORS, NEE, NYT, P, SCHN, SODA, S, YHOO,

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 In Play ,

On the Wires

“Adam Parker, Morgan Stanley’s Chief U.S. Equity Strategist, has maintained a year-end price target of 1,167 for the S&P 500 all year.  And he has been getting a lot of criticism for his bearish call.

But he’s sticking to it.

One reason is because he considers his base-case earnings outlook to be relatively optimistic. “In fact, it really doesn’t take into account the Fiscal Cliff in any way, meaning downside to our base case is likely,” he writes.

In a new note to clients, he visits “extreme bear case scenarios” for S&P 500 earnings in 2013.  It considers a worst-case fiscal cliff scenario, which would cut 5 percentage points from GDP, and the earnings collapses experienced in the last three recessions.

From Parker’s note:”

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It’s no secret that Mohamed El-Erian, the CEO of PIMCO–the world’s biggest bond fund–is pretty down on the current crop of global leaders and the way they’ve handled financial and economic crises over the past several years.

With attention focused on the upcoming presidential election in the United States, El-Erian writes in a new op-ed in the latest issue of Foreign Policy Magazine that the ability of Europe to handle its crisis rests largely on how the political scene in the U.S. unfolds over the next several months.

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“In his latest fund letter, John Hussman argues that investors are wildly complacent, and missing out on the big negative downward trend in the global economy.

He writes…”

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“(Reuters) – FedEx Corp said it will offer voluntary buyout incentives to certain U.S.-based employees to reduce costs as slow economic growth hurts shipping volumes and customers demand cheaper delivery options.

FedEx, which competes with United Parcel Service , said it expects the vast majority of those eligible for these incentives to be staff employees at its units FedEx Express and FedEx Services. The incentives will be offered to mostly non-operational staff groups.”

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“Italy sold 8 billion euros ($9.9 billion) of Treasury bills as borrowing costs rose slightly amid speculation the European Central Bank’s plan to purchase the securities of indebted nations won’t be sufficient to curb the region’s debt crisis.

The Rome-based Treasury sold the 364-day bills at 2.767 percent, up from 2.697 percent at the last sale of similar- maturity debt on July 12. Investors bid 1.69 times the amount of bills offered, up from 1.55 times last month.”

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“Julius Baer Group Ltd., the Swiss money manager established in 1890, agreed to pay about 860 million Swiss francs ($880 million) for Bank of America Corp. (BAC)’s Merrill Lynch wealth management business outside the U.S.

The cost of the transaction totals 1.47 billion francs, including 312 million francs of after-tax integration costs and incentives to retain Merrill bankers and 300 million francs to maintain regulatory capital, Zurich-based Julius Baer said today. Julius Baer shares fell the most in three months.”

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“Hedge funds that base investment decisions on economic trends are unwinding bets againstEuropean stocks (SXXP) at the fastest pace in three years, speculating policy makers will step up the fight against the debt crisis.

The degree by which macro funds are trailing the Euro Stoxx 50 Index (SX5E) is narrowing at the fastest rate since 2009, a sign managers are covering short sales by buying shares, according to data compiled by Bloomberg and JPMorgan Chase & Co. The proportion of shares on loan in the Stoxx Europe 600 Index, an indication of short interest, has fallen to 2.9 percent from 3.4 percent in May, data from London-based Markit show.”

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“Brent crude rose to a three-month high amid concern that Middle East political tension may disrupt oil supplies.

Brent climbed as much as 1.9 percent after the U.S. said one of its guided-missile destroyers collided with an oil tanker near the Strait of Hormuz in the Persian Gulf. Israel will hold home defense drills this week as the Haaretz daily reported that the nation is considering a strike against Iran over its nuclear program. Brent has advanced 17 percent since European Union sanctions against Iran took effect last month.”

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“Google Inc. (GOOG) will cut about 4,000 jobs at its Motorola Mobility Holdings Inc. unit, or 20 percent of the staff at the company it bought for about $12.5 billion.

Two-thirds of the reductions will be outside the U.S., the Mountain View, California-based company said in a regulatory filing today. Google will also shut down about one-third of Motorola Mobility’s 90 facilities and simplify its wireless product portfolio, it said. Google said the measure will incur severance-related costs of no more than $275 million.”

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