By Paddy Power Trader

Fed’s Yellen said that recession in the US is probably over and we cannot have accommodative policy for too long, adding that the US economy is to grow into next year but recovery will be slow and there will be weak employment growth. Yellen further said that US inflation will be subdued over next number of years and US has enough tools to tighten economy when time comes. Yellen said that US stock market is not overvalued. (BBG/RTRS/Sources)

Fed’s Kohn said that the Fed’s low interest rate policy was meant to encourage investors to move into riskier assets and there are no signs currently that an asset bubble is building in the US. (RTRS) In other news, US regional banks face greater exposure to losses due to commercial real estate loans, which may increase their chance of future ratings downgrades, Fitch Ratings said. (RTRS)

In other news, mortgage delinquencies peak again in the third quarter, but pace of growth slows for third straight period. The good news is that the pace at which people fell behind on their mortgages slowed during the summer for the third quarter in a row. The bad news is the overall delinquency rate hit another record. For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion. That’s up 58 percent, from 3.96 percent, a year ago. (AP)

Wall Street

Earnings

Home Depot – Q3 adjusted EPS USD 0.41 vs. Exp. USD 0.36, Q3 revenue USD 16.4bln vs. Exp. USD 16.29bln. Q3 comp. sales down 6.9% and Q3 US comp. sales down 7.1%. Co. sees FY10 EPS cont. ops. adjusted USD 1.55 vs. Exp. USD 1.52 and still sees year sales down about 9%. (BBG/RTRS)

Other News

Exxon Mobil – Berkshire Hathaway reports a 854.5k share stake in co. (theflyonthewall.com)

Boeing – Emirates is looking to purchase 11 new aircraft, some from the co. and also from Airbus. Furthermore, co. got orders for eleven 737-800 jets, 7 for Air Algerie and 4 for Tassili Airlines. The co. says it has more than 2,100 unfilled orders for the next-generation 737 valued at USD 158bln at current list price. (BBG/thestreet.com)

Wal-Mart – Warren Buffett’s Berkshire Hathaway raises stake in co. to 37.8mln shares from 19.9mln shares. (RTRS)

Home Depot – Eddie Lampert’s RBS Partners liquidates stake in co. after previously reported holding 9.93mln shares. (theflyonthewall.com)

Kraft – Traders kept an eye on Cadbury amid speculation that Ferrero, the maker of Ferrero Rocher, has been working with bankers from NM Rothschild on a counter offer to co.’s takeover bid for the London-listed group. It is unlikely Ferrero would be able to bid on its own for Cadbury but one theory is that Ferrero could team up with another party, such as Hershey or Nestlé, to mount a joint offer. (Telegraph)

S&P 500

Earnings

Target Corp – Q3 EPS USD 0.58 vs. Exp. USD 0.50, Q3 revenue USD 15.28bln vs. Exp. USD 15.25bln. Remains cautious Q4 outlook.  Sees “highly promotional” holiday season. Co.’s October net charge-offs 13.49%. (BBG)

Saks - Co. Q3 EPS USD 0.01 vs. Exp. loss USD 0.11, Q3 revenue USD 631.43mln vs. Exp. USD 624.54mln. Co. sees Q4 cap spending USD 10-13mln and sees being free cash flow positive for 2009. Co. sees Q4 same store sales down in the high single digits. (BBG)

Other News

US regional banks – US regional banks face greater exposure to losses due to commercial real estate loans, which may increase their chance of future ratings downgrades, Fitch Ratings said. (RTRS)

Bank of America – As co.’s executives prepare to testify today before Congress, the Wall Street Journal reports that even though the bank’s lawyers told top executives that it would be difficult to walk away from its deal to buy Merrill Lynch, the executives threatened to drop it, and the government then put in USD 20bln more to finish the Merger. (theflyonthewall.com)

Wells Fargo – Berkshire Hathaway raises stake in co. to 313.4M shares from 302M shares. (theflyonthewall.com)

AIG – China Trust to buy 30% of co.’s stake in Taiwan Life unit from China Strategic. In other news, The New York Fed paid in full a number of co.’s trading partners for securities they had insured with co, saving the banks from possibly significant losses, according to a government audit conducted by the special inspector general for the TARP. The audit faulted the NY Fed for not forcing some of the banks to accept lower prices for their credit market bets which totaled over USD 60bln. Banks paid in full included Goldman Sachs, Merrill Lynch and Societe Generale. (RTRS/WSJ)

American Express – Co. CEO encouraged by improvements in card write-offs. Co. is ’still focused on selectively growing’ (CNBC)

GE – Co. announces intent to enter joint venture with Shenhua, a leading Chinese coal company, venture to advance coal gasification and cleaner coal technologies in China. (BBG)

Northrop Grumman – The U.S. Navy has awarded co. a USD 635mln cost plus fixed-fee/level of effort contract for engineering, design and modernization support of new construction, operational and decommissioning submarines. (theflyonthewall.com)

Motorola – Co.’s Home & Networks Mobility business, a leader in TD-LTE technology, announced today that co. has been selected by China Mobile Communications Corporation as the primary TD-LTE solution partner to provide indoor coverage for all major pavilions at the World Expo 2010 Shanghai China, and will also integrate and launch the world’s first TD-LTE USB dongle that supports both 2.3GHz and 2.6GHz, helping operators to build a healthy TD-LTE ecosystem. (theflyonthewall.com)

Merck – Co.’s Cozaar cuts hospitalisations due to heart failure. (BBG)

FedEx. – Co. Chief executive Frederick Smith said he expects holiday season volume to rise 8% over a year ago, partly helped by market share gains. “Christmas won’t be a disaster,” Smith said during a CEO Council conference Monday. (WSJ)

Applied Materials – Co. and Semitool announced a definitive agreement for co. to acquire the outstanding shares of Semitool for USD 11 per share in an all-cash tender offer. Under terms of an agreement approved by the boards of directors of both companies, co. will pay an aggregate purchase price of approximately USD 364mln based on the fully diluted capitalization of Semitool. The Acquisition will be conducted pursuant to a tender offer for all of the outstanding shares of Semitool and is conditioned on the tender of at least 66 2/3% of Semitool’s outstanding stock on a fully-diluted basis and other customary closing conditions including regulatory approval. (BBG/RTRS)

NASDAQ

Earnings

N/A

Other News

Microsoft – Rumours of a renewed interest in SAP with EUR 42.00 per share being mentioned. (BBG)

Google/Microsoft – Co.’s will continue to gain market share in the US internet ad space at the expense of Yahoo and smaller players until Microsoft decreases its market spending according to FBR Capital. (briefing.com)

Yahoo – Co.’s Japan unit has built up a large supply of cash, with nearly JPY 90bln in cash as of the end of September. Instead of boosting revenues through mergers and acquisitions or capital investments, Yahoo Japan instead chose to spend JPY 80bln to buy back shares. The co. must make effective use of its assets and increase profits if it wants to boost its stock price, as earnings have recently been growing at a slower pace. (theflyonthewall.com)

Intel – Co. today announced the UK availability of the Intel Reader, a mobile handheld device designed to increase independence for dyslexic and visually impaired people. (Yahoo Finance)

First Solar ­- Co. today announced a Cooperation Framework Agreement with the Chinese government that takes another critical step towards the realisation of the world’s largest solar power plant in the autonomous region of Inner Mongolia, China. (Yahoo Finance)

Comcast – In an effort to help salvage the Ticketmaster Entertainment Inc. and Live Nation Inc. music industry Merger, co. has offered its help. Co. may receive spin-offs of ticketing software and client contracts as part of a proposal to alleviate Justice Department concerns that the Ticketmaster-Live Nation deal would inhibit competition, sources say. Co. owns New Era Tickets. The move to expand its ticketing operations is another example of Co. trying to grow beyond its core cable television business. (BBG)

Verizon – China’s Huawei says building 25 trial, commercial Lte. networks worldwide, also says trying for Lte. business in N. America with co. (RTRS)

Companies going ex-dividend: Microsoft (USD 0.13000)

Companies going ex-dividend: Wynn Resorts (USD 4.00000)

OTHER NEWS

Baltic Dry bulk index rises 3.8% to 4,381 at 1321 GMT (0721 CST) in London. (BBG) USD Index up 0.55% and CRB Index down 0.34% at 1348 GMT (0748 CST)

Berkshire Hathaway buys Nestle, Exxon; ups stake in Wal-Mart. (RTRS)
Billionaire Warren Buffett’s Berkshire Hathaway on Monday revealed new investments in Nestle AG and Exxon Mobil and that it has nearly doubled its investment in Wal-Mart Stores Inc.

Mortgage delinquencies hit another record in Q3, but pace of growth slows for 3rd straight period. (Yahoo Finance)
For the three months ended September 30, 6.25% of US mortgage loans were 60 or more days past du according to credit reporting agency TransUnion.

Fed’s Yellen said that recession in the US is probably over and we cannot have accommodative policy for too long, adding that the US economy is to grow into next year but recovery will be slow and there will be weak employment growth. Yellen further said that US inflation will be subdued over next number of years and US has enough tools to tighten economy when time comes. Yellen said that US stock market is not overvalued. (BBG/RTRS/Sources)

Fed’s Kohn said that the Fed’s low interest rate policy was meant to encourage investors to move into riskier assets and there are no signs currently that an asset bubble is building in the US. (RTRS)