Ultimate Market Recap: Earnings Reports Ramp Up, Microsoft Launching XBox Music

The Week Ahead: Earnings in Full Swing, Monthly Retail Sales Report

This week, investors will need to fasten their seat belts as it will be a busy week with earnings reports. In a five-day period,  40 percent of the Dow’s components (12 companies) along with 79 of the S&P 500 will share their quarterly numbers.

A few economic reports will steal some of the attention this week including Monday’s U.S. Retail Sales and the Consumer Price Index on Tuesday, along with data on housing and manufacturing later in the week.

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News from abroad could also make headlines with China’s import and export data, a possible request by Spain for financial help and the two-day European Union leadership meetings.

And looming in the background with market watchers is the upcoming Nov. 6 presidential election.

Here’s a look at the week ahead.

Economic Data

Monday: September retail sales, NY Fed October Empire State survey and August business inventories

Tuesday: September consumer price index, September industrial production and September capacity utilization

Wednesday: September housing starts, September building permits and China’s third-quarter GDP

Thursday: Weekly jobless claims, Philly Fed October manufacturing survey, September Leading Index and the two-day meeting with European Union leaders starts

Friday: September existing home sales


Monday: Citigroup (NYSE:C), Gannett Company, Inc. (NYSE:GCI), Charles Schwab (NYSE:SCHW), Packaging Corp. of America (NYSE:PKG)

Tuesday: IBM (NYSE:IBM), Coca-Cola (NYSE:KO), Johnson & Johnson (NYSE:JNJ), Intel (NASDAQ:INTC), Goldman Sachs (NYSE:GS), UnitedHealth (NYSE:UNH), CSX Corporation (NYSE:CSX), Delta Air (NYSE:DAL), Forest Labs (NYSE:FRX), PNC Financial (NYSE:PNC), State Street (NYSE:STT), Mattel (NASDAQ:MAT)

Wednesday: Bank of America (NYSE:BAC),  American Express (NYSE:AXP), PepsiCo (NYSE:PEP), Bank of New York Mellon (NYSE:BK), eBay (NASDAQ:EBAY), Abbott Labs (NYSE:ABT), U.S. Bancorp (NYSE:USB), Northern Trust (NASDAQ:NTRS), Halliburton Company (NYSE:HAL)

Thursday: Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), Verizon (NYSE:VZ), Travelers (NYSE:TRV), Morgan Stanley (NYSE:MS), Advanced Micro Devices (NYSE:AMD),  Union Pacific (NYSE:UNP), BB&T (NYSE:BBT), Capital One (NYSE:COF), Southwest Air (NYSE:LUV), SanDisk (NASDAQ:SNDK), Philip Morris (NYSE:PM), Nokia (NOK1V.HE), KeyCorp (NYSE:KEY), Chipotle (NYSE:CMG), Boston Sci (NYSE:BSX)

Friday: General Electric (NYSE:GE), McDonald’s (NYSE:MCD), Honeywell (NYSE:HON), Air Products (NYSE:APD), Baker Hughes (NYSE:BHI), Manpower (NYSE:MAN), Kansas City Southern (NYSE:KSU), Schlumberger (NYSE:SLB), Parker-Hannifin (NYSE:PH)

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Wall Street Brief: Amazon Talking to Texas Instruments, Softbank Takes Stake in Sprint

Softbank (SFTBF.PK) announced it will purchase a 70 percent stake in Sprint (NYSE:S) for $20.1 billion. This represents Japan’s greatest overseas acquisition since around 2000. Softbank will buy $8 billion in newly-issued stock and $12.1 billion in existing shares but the deal doesn’t require Sprint to raise its 49 percent share in Clearwire (NASDAQ:CLWR); market watchers had hoped this would happen as the shares rose last week on the rumors.

Amazon (NASDAQ:AMZN) is in talks to purchase Texas Instrument’s (NYSE:TXN) cellular-chip operations which could be valued at billions of dollars, reported Calcalist.  Texas Instruments, who has its chips in Kindle devices and Barnes & Nobles’ (NYSE:BKS) Nooks, previously said it will invest less than in the past to support customers’ plans for smartphones and tablets.

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ING (NYSE:ING) is undergoing negotiations with Holland’s government and the European Commission to pay back EUR 4.5 billion of state aid it received after the 2008 financial crisis. ING has already returned the majority of the  EUR 10 billion it received but it is getting rid of assets worldwide to increase cash to pay for the bailout and follow EU conditions.

UBS (NYSE:UBS) will cut IT costs from 3.6 billion Swiss francs ($3.8 billion) annually to 2.4 billion Swiss francs by 2015; it will also slash thousands of jobs worldwide, reported TagesAnzeiger this weekend. UBS has 8,200 IT employees with 3,200 of them in Switzerland.

Providence Equity Partners sold its 10% stake in Hulu back to the company for $200 million in a deal that gave it a $2 billion value and Hulu CEO $40 million. Hulu will take a loan to fund the transaction that has News Corp. (NASDAQ:NWS), Comcast (NASDAQ:CMCSA) and Disney (NYSE:DIS) as the other owners.

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Mid-Day Movers: Citigroup Jumps 3%, Microsoft Moves Into Music

Shares of Sprint Nextel (NYSE:S) edged 0.40 percent higher on Monday. Japan’s Softbank announced it will purchase a 70 percent stake in the mobile carrier for around $20 billion. It is the biggest overseas acquisition by a Japanese firm in history. In a statement, Softbank explained it would buy a majority stake in Sprint by buying $8 billion of shares directly and then buy another $12.1 billion of shares in the market. AT&T (NYSE:T) shares edged slightly lower on the news.

Citigroup (NYSE:C) shares are up over 3 percent after reporting financial results for the second quarter. The bank posted net income of $468 million (15 cents per share), compared to $3.34 billion ($1.09 per share) a year earlier. However, Citigroup reported adjusted earnings of $3.27 billion ($1.06 per share), beating the mean estimate of 97 cents per share). Vikram Pandit, Citi’s Chief Executive Officer, explains, “Our core businesses showed momentum during the quarter as we increased lending and generated higher operating revenues. These earnings highlight the strength of Citicorp and its diversification by product and region. For the third straight quarter, we had positive operating leverage in each of our three core businesses.”

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Microsoft (NASDAQ:MSFT) shares edged slightly higher this morning. The company is launching XBox Music, its biggest move into the music industry to date. The new service is aimed to lure people in with free streaming music across several Microsoft devices, with options to upgrade. Microsoft is also planning a Music store, which will sell single downloads or albums, much like Apple’s (NASDAQ:AAPL) iTunes or Amazon.com (NASDAQ:AMZN).

Shares of Texas Instruments (NYSE:TXN) increased more than 2 percent. Amazon is reportedly in advanced talks to buy Texas Instruments’ smartphone chip business for its Kindle tablet computer. “With the trend towards more vertical integration, led by Apple, speculation that Amazon is interested in TI’s chipset arm is unsurprising,” said Ben Wood, head of research at British wireless consultancy CCS Insight, according to Reuters.

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Texas Instruments Inc. (NYSE:TXN): Amazon.com (NASDAQ:AMZN) is in advanced talks for the purchase of mobile chip business, Texas Instruments, reports Israeli financial newspaper Calcalist, according to Reuters.

Abbott Laboratories (NYSE:ABT): According to Bloomberg, Abbott Hepatitis C drugs have cleared the virus in 99 percent of patients.

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Yongye International, Inc. (NASDAQ:YONG) announced that its board received a preliminary, non-binding, proposal letter with the date of October 15 from Zishen Wu, which is the company’s chairman and CEO, Full Alliance International Limited, MSPEA Agriculture Holding Limited, and Abax Global Capital, on behalf of funds managed and/or advised by it and its nominee entities and its and their affiliates, for the acquisition of all outstanding shares of the company’s common stock that is not currently owned by the Buyer Parties in a going private transaction of $6.60 per share of common stock in cash, subject to certain conditions.

eBay Inc.’s (NASDAQ:EBAY) PayPal unit intends to cut as much as 3 percent of its workforce, or 300-400 employees, Reuters reports. The cuts will probably be in product development, technology, and marketing.

Microsoft Corporation’s (NASDAQ:MSFT) next blockbuster game, Halo 4, was leaked online and is now being pirated, according to Business Insider. The game, made by Microsoft’s 343 Industries, is scheduled to be released on Xbox beginning on November 6. Microsoft claims that it is working along with its security teams and law enforcement to find a solution.

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Citigroup, Inc. (NYSE:C) stated on Monday that its Q3 earnings saw a drop of a $4.7 billion loss concerning the joint venture brokerage business Morgan Stanley Smith Barney. Last month, Citigroup made an agreement to sell its part of the joint venture, starting with a 14 percent stake, to Morgan Stanley. Citigroup stated that when it was writing down the cost of the rest of its interest in the brokerage business. The loss was offset a bit by a boost in mortgage lending and buoyed by a capital markets rebounds. Citigroup is the the nation’s third-largest bank, and it reported a net income reaching $468 million, or 15 cents a share, on revenue of $14 billion, versus net income of $3.8 billion, or $1.23 a share, in the quarter a year earlier.

Sprint Nextel Corp. (NYSE:S) and SoftBank have entered into a series of definitive agreements beneath which SoftBank is to invest $20.1 billion in Sprint, $12.1 billion of which is to be distributed to Sprint stockholders and $8 billion is to be used for new capital to strengthen Sprint balance sheet. Through the transaction, nearly 55 percent of current Sprint shares will be exchanged for $7.30 per share in cash, and all other shares are to be converted into shares of a new publicly traded entity, New Sprint. After closing, SoftBank will own about 70 percent and Sprint equity holders are to own about 30 percent of the shares of New Sprint on a fully-diluted basis. The transaction was approved by both company’s boards, and completion of the transaction is subject to Sprint stockholder approval, customary regulatory approvals and the satisfaction or waiver of other closing conditions. The companies believed that the closing of the merger transaction will occur in mid-2013. SoftBank is to create a new U.S. subsidiary, New Sprint, which is to invest $3.1 billion in a newly issued Sprint convertible senior bond after the announcement. The convertible bond is to have a 7-year term and 1.0 percent coupon rate, and will be convertible, subject to regulatory approval, into Sprint common stock at $5.25 per share. Immediately before the merger, the bond is to be converted into Sprint shares, which will become a wholly-owned subsidiary of New Sprint. After Sprint stockholder and regulatory approval, and the satisfaction or waiver of the other closing conditions to the merger transaction, SoftBank will continue to capitalize New Sprint with $17 billion more, and it will effect a merger transaction in which New Sprint is to become a publicly-traded company and Sprint will survive as its wholly-owned subsidiary.

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Verizon Communications Inc. (NYSE:VZ will begin defending a $9.5 billion lawsuit today brought by creditors of former subsidiary Idearc Inc., which is the directory business that went bankrupt after it was spun off by Verizon. Creditors argue that Verizon was aware that the directory business was failing, and it engineered a spinoff transferring $2.4 billion in cash out of the subsidiary and saddled it with $9 billion in debt.

Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) will discuss new data from a continuing, multicenter, Phase 2 randomized trial of oral sapacitabine capsules, which is the company’s top product candidate, in older patients diagnosed with intermediate-2 or high-risk myelodysplastic syndromes, or MDS, after the failure of front-line hypomethylating agents, such as azacitidine, or Vidaza, and/or decitabine, or Dacogen. Recently, the data were discussed at two separate sessions at The Eighth Annual Hematologic Malignancies 2012 Conference scheduled to take place Oct 10 to 14, in Houston, Texas. The current median overall survival for all 63 patients in the Phase 2 study is 252 days or about 8 months. Median overall survival for 41 out of 63 patients with 10 percent or more blasts in their bone marrow is 274 days, or about 9 months.

Amazon.com Inc. (NASDAQ:AMZN) is in talks to purchase the company that supplies chips for its Kindle tablet computer, according to Israeli financial newspaper Calcalist, which may indicate a step forward in the smartphone sector. The report stated that any deal for the smartphone chip business of Texas Instruments Inc (NYSE:TI) would likely have a worth of billions of dollars and has the ability to make Amazon a direct rival to Apple Inc and Samsung Electronics Co Ltd, also designers of their own chips. “It would make sense, as the chip is a critical component and Amazon has an existing relationship with TI,” stated Ovum analyst Nick Dillon.

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Bank of America (NYSE:BAC) appointed veteran Merrill Lynch banker Wadih Boueiz and Hakim Karoui, formerly with Citigroup (NYSE:C), and they will be co-heads for its corporate and investment banking business located in the Middle East and North Africa, according to Reuters.

Apple Inc. (NASDAQ:AAPL): Notebook shipments saw a drop of 4.5 percent sequentially during Q3, according to DigiTimes. DigiTimes Research senior analyst Joanne Chien claims that the fall was a result of the slowing of the economy, inventory adjustments in retail channels, and consumers’ patience for the anticipated Windows’ 8 launch.

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Facebook, Inc. (NASDAQ:FB) just topped 1 billion members, but it may have competition. Three additional competitors showed their faces last week taking a jab at Facebook, whose broad audience and services could be unappealing to consumers who are interested in specialized content. Pheed and CyPop were launched, and even Myspace made a comeback. Each have a unique approach to social networking, but a few analysts believe that these sites may end up cannibalizing each other.

AT&T, Inc. (NYSE:T) has decided to continue its relationship with Fiserv (NASDAQ:FISV), and it has signed a multi-year, sole provider agreement for its CheckFreePay, walk-in bill payment service. The contract lengthens the walk-in bill payment capabilities for Wireline customers into 13 more states.

Nokia Corporation (NYSE:NOK) first Windows Phone 8 handsets, the Lumia 920 and Lumia 820, will be released in Europe beginning on November 1. Vodafone Germany stated on Facebook that it intends to begin selling both the 920 and 820 on the first.

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