MAJOR PAPERS:

• According to people familiar with the matter, the Wall Street Journal reported that Federal Hole Loan Mortgage Corporation (NYSE: FRE) --Freddie Mac -- is considering raising capital by selling up to $10B in new shares to investors. The sources believe this effort may have the potential to avoid a full-blown government rescue.
• The Wall Street Journal also reported that, amid U.S. investigations into allegations it helped American clients evade taxes, UBS AG (NYSE: UBS) said some Swiss-based private bankers will stop offering American clients Swiss bank accounts and other services.
• Starbucks Corporation (NASDAQ: SBUX) will close store in 44 states plus the District of Columbia, including 88 closures in California, 59 in Florida and 57 in Texas, the Wall Street Journal reported.

WEB SITES:

• After Cleveland Cliffs Inc (NYSE: CLF) bought Alpha Natural Resources Inc (NYSE: ANR), there may be many more acquisitions in the coal industry, Bloomberg said.
• Reuters noted that, according to a person with knowledge of the plans, Yahoo! Inc (NASDAQ: YHOO) could renew talks over News Corporation's (NYSE: NWS) Web properties if Microsoft Corporation (NASDAQ: MSFT) gets in the way of discussions with Time Warner Inc's (NYSE: TWX) AOL. Yahoo! is in contact with News Corp. about the assets, but the search engine's talks with Time Warner about AOL are more advanced, the source added.
  

MAJOR PAPERS:

• People familiar with the issue said that European regulators are gearing up to file new antitrust charges against Intel Corporation (NASDAQ: INTC). The charges, the Wall Street Journal reported, would allege Intel gave major European retailers an incentive not to sell computers that use Advanced Micro Devices Inc (NYSE: AMD) chips.

OTHER PAPERS:

• The New York Times reported that News Corporation's (NYSE: NWS) New York Post and The Daily News, owned by Mortimer Zuckerman, are exploring a print pact and have been in talks to find ways to combine some business functions of the papers, according to people briefed on the matter.
• According to sources, the San Francisco Business Times reported that Washington Mutual Incorporated (NYSE: WM) may be planning more layoffs in September. It is unclear how many employees will be affected and from which departments.

WEB SITES:

• In an effort to preserve capital, data compiled by Bloomberg showed that troubled mortgage companies Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, and Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, may cut dividends after more than $11B in combined losses since last year.
• Three people familiar with the matter said that the SEC subpoenaed Wall Street investment banks including The Goldman Sachs Group Inc (NYSE: GS), Deutsche Bank AG (NYSE: DB) and Merrill Lynch & Co Inc (NYSE: MER) in its hunt and crack down on suspected manipulation of Bear Stearns and Lehman Brothers Holdings Inc (NYSE: LEH) shares. Bloomberg reported that two of the people said the SEC, which yesterday curtailed short selling in financial stocks, is looking for e-mails and trading records and is also examining whether securities firms have "adequate controls" to deal properly with misconduct.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

OTHER PAPERS:

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

WEB SITES:

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

MAJOR PAPERS:

• According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
• Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.

OTHER PAPERS:

• Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.

WEB SITES:

• Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.

The New York Times reports -- with relief (since the Times' Andrew Ross Sorkin's name had been floated for the job) -- that News Corp's (NYSE: NWS) Wall Street Journal has appointed Robert Thomson, a Murdoch loyalist who formerly edited the Times of London as its managing editor. Murdoch also appointed another loyalist, Leslie Hinton, as its publisher. Thomson and Hinton will also be editor-in-chief and CEO, respectively, of Dow Jones.

I remember back when Murdoch was courting the Bancroft family and people were worried that he would replace the senior people at the Wall Street Journal with his own people. Back then, I posted that he had a track record of doing that when he took over newspapers. I did not expect a different outcome with the Journal.

I was just thinking today that since I skip over most of what the Wall Street Journal publishes in its print edition, it would not be too much of a hardship to cancel my subscription when it comes up for renewal. If Thomson's appointment means less business insight and more propaganda, that decision will be an easier one.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

MAJOR PAPERS:

• The Wall Street Journal reported that a spokesperson for New Corporation (NYSE: NWS) said the company has dropped out of the bidding for Tribune Co's (NYSE: TXA) Newsday. This leaves Cablevision Systems Corporation (NYSE: CVC) as the apparent winner of the auction.
• According to people familiar with the matter, the Wall Street Journal reported that American International Group Inc's (NYSE: AIG) airplane-leasing unit is considering a split from the company. The people said International Lease Finance Corp have grown "increasingly concerned" the company will be hurt by AIG's financial troubles.
• Royal Dutch Shell Plc (NYSE: RDS.A) and Spain's Repsol YPF SA (NYSE: REP) are pulling out of one of Iran's biggest gas projects, the $10B-plus development of phase 13 of South Pars, the world's largest gas field, the Financial Times reported.

WEB SITES:

• Bloomberg reported that HSBC Holdings Plc (NYSE: HBC) set aside a smaller-than-forecast $3.2B for bad loans in the U.S. The bank also said its Q1 profit was higher than Q107.

MAJOR PAPERS:

• Three years into its $35B takeover of Nextel, the Wall Street Journal reported that Sprint Nextel Corporation (NYSE: S) is considering selling or spinning off the troubled unit. Few details were available and a deal is not imminent.
• The Wall Street Journal also reported that pressure is mounting on Citigroup Incorporated's (NYSE: C) CEO Vikram Pandit to show that he can turn around the troubled bank. Executives believe Pandit, who has been praised for his cautious and deliberate approach, has been taking "too long" to make crucial decisions.

WEB SITES:

• According to a person close to Google Inc (NASDAQ: GOOG), Reuters reported that Google and Yahoo! Inc (NASDAQ: YHOO) are still "hammering out the intricacies" of a potential advertising and search deal. The source said no final agreement has been reached yet.
• ABC News learned that if Rupert Murdoch does not testify in a lawsuit accusing one of his companies of "corporate espionage," it may cost News Corporation (NYSE: NWS) hundreds of millions of dollars, a federal judge overseeing the trial said. News Corp has denied any wrongdoing, and lawyers maintain Murdoch had no direct knowledge of the unit's alleged hacking into EchoStar Corporation's (NASDAQ: SATS)/DISH Network Corporation's (NASDAQ: DISH) security code and posting it on the Internet.

Since last year's summer movie preview featured mostly sequels and adaptations, this year's preview has been expanded to include more than just potential "blockbusters." The following is a chronological list of not only the most hyped film fare of the summer, but other noteworthy smaller entries, and a short commentary on each.



5/2 - Iron Man, Viacom (NYSE: VIA)'s Paramount Pictures
The first of two big Marvel Entertainment (NYSE: MVL) adaptations of the summer, the Robert Downey Jr. led Iron Man has been getting a ton of hype and critical acclaim. This is the second year that a comic book adaptation has kicked off the summer, following last year's Spider-Man 3, which grossed over $150M over its opening weekend.

5/9 - Speed Racer, Time Warner (NYSE: TWX)'s Warner Bros.
Another big-budget adaptation of a generations-old cartoon. Last year's Transformers was, to my surprise, a huge success, so maybe Speed Racer, in the capable directing hands of the Wachowskis, can be as well.

MAJOR PAPERS:

• In an effort to refocus on coffee, the Wall Street Journal reported that Starbucks Corporation (NASDAQ: SBUX) will attempt overhaul its entertainment business.
• Private equity players Apax Partners and Kohlberg Kravis Roberts, along with Lehman Brothers Holdings Inc (NYSE: LEH) in a supporting role, are looking to form a consortium to examine a bid for the insurance assets of The Royal Bank of Scotland Group Plc (NYSE: RBS), the Financial Times reported.

OTHER PAPERS:

• Yahoo! Inc (NASDAQ: YHOO) is going to let outside developers create applications across its network of sites, the New York Times contended. The search engine is also going to combine its online services under the social profile concept in an attempt to allow its users to replicate the social experience that social networks like News Corporation's (NYSE: NWS) MySpace and Facebook have made so popular.

WEB SITES:

• Research In Motion Limited (NASDAQ: RIMM) will reportedly delay the launch of its new hotly anticipated 3G BlackBerry phone, Fortune reported, which the company is developing for AT&T Inc (NYSE: T). The phone, originally supposed to be launched in June, may not be released until as late as August, inside sources said.

MAJOR PAPERS:

• If the financial crisis hasn't crippled banks enough, the cost to build bank loan reserves may be just as painful, according to the Wall Street Journal's "Heard on the Street". The need for larger reserves is eating away at earnings and is showing up in first quarter reports for banks such as Bank of America Corporation (NYSE: BAC), whose results took an additional hit because of a $6B addition to its loan loss reserve.
• Just four months after Journal parent Dow Jones & Co. was bought by Rupert Murdoch's News Corporation (NYSE: NWS), Wall Street Journal managing editor Marcus Brauchli is expected to resign, according to the Wall Street Journal. Journal publisher Robert Thomson may temporarily take over until a new managing editor is hired.
• The Financial Times reported that Citigroup Incorporated (NYSE: C) is seeking advice from IT group Hewlett-Packard Company (NYSE: HPQ) on how to overcome a crisis without breaking up the company.

WEB SITES:

• According to Reuters, activist shareholders in ASM International (NASDAQ: ASMI) believe, by giving more equity to top managers, that they can boost its value by $1.6B.

News Corp. (NYSE: NWS, NWS-A) shares are falling after an analyst at Bernstein downgraded the stock to "Market Perform" from "Outperform" citing earnings risks associated with the economic slowdown. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on NWS.

After hitting a one-year high of $25.36 last April, the stock hit a one-year low of $17.84 in January. This morning, NWS opened at $18.50. So far today the stock has hit a low of $18.12 and a high of $18.68. As of 12:15, NWS is trading at $18.18, down 82 cents(-4.3%). The chart for NWS looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $22.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in six months as long as NWS is below $22.50 at October expiration. News Corp. would have to rise by more than 23% before we would start to lose money. Learn more about this type of trade here.

NWS hasn't been above $47.50 since November and has shown resistance around $20 recently. This trade could be risky if the company's earnings (due out in early May) are a positive surprise, but even if that happens, this position could be protected by resistance BAC might find at its 200 day moving average, which is currently around $21.50 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NWS or NWS-A.

MAJOR PAPERS:

• To help stop Microsoft Corporation's (NASDAQ: MSFT) $44.6 billion takeover offer, Yahoo! Inc. (NASDAQ: YHOO) is in talks with Time Warner Inc. (NYSE: TWX) about combining internet operations. Meanwhile, Microsoft is talking with News Corporation (NYSE: NWS) about a joint bid for Yahoo! And Yahoo! is is considering a possible advertising agreement with Google Inc. (NASDAQ: GOOG), the Wall Street Journal reported.
• The Wall Street Journal also reported that IAC/InterActiveCorp (NASDAQ: IACI) is planning to launch a number of new web sites, and hopes to capture a variety of audiences including African-Americans, children and news followers.

WEB SITES:

• Lehman Brothers Holdings Inc. (NYSE: LEH) said it liquidated three investment funds, with assets valued at $1 billion as of February 29, because of "market disruptions," Bloomberg reported.
• Reuters reported that the U.S. Department of Defense approved the sale of 157 armored trucks to Britain. The trucks are built by Force Protection Inc. (NASDAQ: FRPT), and the deal is valued at $125 million if all options are exercised.

MAJOR PAPERS:

• What Countrywide Financial Corporation (NYSE: CFC) knew about its mortgage borrowers, and how it handled that information, is under review by Federal investigators, according to the Wall Street Journal. Some of their findings reveal that Countrywide had questionable information, which it then put together many of those mortgages into securities, and sold them to investors.
• The Air Force's award of a $40B contract for aerial refueling tankers to Northrop Grumman Corporation (NYSE: NOC) and European Aeronautical Defense & Space, will be protested by The Boeing Company (NYSE: BA), reported the Wall Street Journal.
• The Financial Times reported that News Corporation (NYSE: NWS) CEO Rupert Murdoch dashed the hopes of Yahoo! Inc (NASDAQ: YHOO) executives seeking an alternative to Microsoft Corporation's (NASDAQ: MSFT) $40B offer after Murdoch endorsed the view of analysts and investors that it could not match the value offered by Microsoft.

OTHER PAPERS:

• According to General Motors Corporation (NYSE: GM) president and COO Frederick A. Henderson, the New York Times reported that the auto maker will not intervene in the dispute between parts supplier American Axle and Manufacturing Holdings Inc (NYSE: AXL) and the United Auto Workers union. Given that the strike has not yet hurt the company's ability to sell vehicles, Henderson said company officials "just have to keep to our own knitting."

MAJOR PAPERS:

• According to people familiar with the matter, the Wall Street Journal reported that an investor group that includes Harbinger Capital Partners is expected to report a raised stake in The New York Times Company (NYSE: NYT). The raised stake is expected to be close to matching the 19% stake owned by the Sulzberger family.
• The Goldman Sachs Group Inc (NYSE: GS) has been spared many of the problems of the subprime mortgage crisis, but other areas where it's involved, such as investment banking and leveraged loans, are hurting the firms profitability, the Wall Street Journal reported.

OTHER PAPERS:

• Cablevision Systems Corporation (NYSE: CVC) is seeking to put a valuation on its Rainbow Media unit, in order to possibly sell it, sources say. In the past, the unit, which consists of several cable channels, has been valued at $3B, but the Dolan family is hoping to obtain a higher price, according to the New York Post. Possible buyers include Liberty Media Corporation (NASDAQ: LCAPA) and News Corporation (NYSE: NWS).
• Elan Corporation (NYSE: ELN) is considering splitting its biopharmaceuticals arm, which markets Tysabri, from its drug technology division, the Sunday Times noted. The potential spin-off could unlock up to $1.5B to share holders.

According to The Hollywood Reporter, CBS (NYSE: CBS) has greenlit a reality program that should turn out to be pretty funny. The show is titled Splitsville, and its premise centers on divorcing couples vying for assets via sundry competitions.

You know, just when you think they've covered every conceivable angle for a reality show, they come up with one that makes you say, "I should have thought of that!" Of course -- find divorcing people who really hate each other and then see how far they are willing to go to fight for the stuff generated during their union. I have no idea what the format the show is, but I can tell you that I dearly hope the producers utilize a few tricks from Fear Factor. Imagine allowing a dozen large tarantulas to crawl over your body so you can take the family toaster!