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Nov 5, 2014

Bits | The Business of Technology - November 5, 2014:

Wednesday, November 5, 2014
For the latest updates, go to »
Morning Report
Verizon Under Fire for Ad-Targeting Program | Google and Facebook are not the only companies tracking your online activities to customize ads. Verizon Wireless has recently come under fire from privacy advocates for running a similar program on its cellular network, Brian X. Chen reports.

Verizon quietly started its ad-targeting program two years ago and this year teamed up with other data management and advertising companies. Late last month, Jacob Hoffman-Andrews of the Electronic Frontier Foundation noticed the program and sounded the alarm.

"Verizon users might want to start looking for another provider," he wrote in a blog post on Monday about the program, which involves injecting a header containing a unique, anonymous identifier into a Verizon Wireless user's request for a web page. "Indeed, while we're concerned about Verizon's own use of the header, we're even more worried about what it allows others to find out about Verizon users."

Verizon's ad-targeting method groups these identifiers into different buckets of demographics and interests, so if a website is looking to serve certain ads to a specific type of customer, it will look for those buckets and serve up those ads.

Here's the kicker: Even though Verizon allows users to opt out of the program by calling a phone number or changing their privacy settings, Verizon keeps tacking an identifier onto the customer's web browsing for "other authentication purposes," such as logging in to Verizon's apps, according to the company. Read more »

More From The Times
An ophthalmologist used a standard vision test to compare peripheral vision with regular eyeglasses versus Google Glass.
Google Glass May Have a Blind Spot, Study Says | A research letter about a very small sample test said Google Glass may create a small blind spot on the right side.
Larry Klayman, center, testified that the government had photographed the face of Mary Strange, right, with her husband, Charles, through a computer that had no camera.
Appeals Court Is Urged to Strike Down Program for Collecting Phone Records | A conservative legal activist urged a federal appeals court Tuesday to strike down the National Security Agency's program that collects Americans' phone records in bulk.
Outside an Apple store in Madrid. Almost a quarter of the company's revenue came from Europe in the fiscal fourth quarter.
Apple Issues Bonds in Euros for First Time | Since last year, Apple has been issuing bonds to finance a $130 billion capital return payout to shareholders.
Best of Scuttlebot  News from the Web, annotated by our staff
Facebook Says Government Requests for User Data Is Up 24 Percent |REUTERS
In the first six months of 2014, governments around the world made 34,946 requests for data. - Ashwin Seshagiri
Microsoft Strikes Cloud Partnership with Dropbox | MICROSOFT.COM
Office users will be able to access Dropbox files within Word and other apps. - Nick Wingfield

U.S. Stock Market Future Indications - November 5, 2014: U.S. stocks: Futures rise; private sector adds 230,000 jobs | MarketWatch.

Markets reporter

NEW YORK (MarketWatch) — Wall Street was poised for a stronger start on Wednesday, with stock futures gaining after Republicans retook control of the Senate after a string of midterm election victories on Tuesday.
It’s a power shift that sees the GOP holding majorities in both Houses of Congress, which some argue portends, perhaps, less political gridlock and a more pro-business tone.
Stock futures extended gains after data from ADP showed the private sector added 230,000 jobs last month, exceeding consensus forecasts.It is the sixth month in seven that private-sector hiring has topped 200,000.
Futures for the Dow Jones Industrial Average DJZ4, +0.53%  rose 88 points, or 0.5%, to 17,393, while those for the S&P 500 index SPZ4, +0.63%  gained 11.60 points, or 0.6%, to 2,017.10. Technology stocks were pointing to an even brighter start, with futures for the Nasdaq-100 index NDZ4, +0.68%  adding 26.50 points, or 0.6%, to 4,170.00.
“I think the [fact that the] market has taken the news of the Republicans victory so positively could be down to their policies, for example for businesses, which the market believes will aid them,” said Sam Fox, financial sales trader at SpreadEx, in emailed comments.
Read: A breakdown of how the market performs after midterm elections.
By midnight Eastern time, Republican candidates had snared seven seats in key battleground states. By taking the Senate and keeping the House, the GOP takes control of Congress for the first time in eight years. See: The surprises that defined Republicans’ very good Election Day
The dollar USDJPY, +0.96%  shot to a seven-year high against the yen in wake of those election results. As the dollar surged, gold prices GCZ4, -1.99%  tumbled about 2%, and silver SIZ4, -3.62%  sank nearly 4%. Republicans are expected to be tougher on the Federal Reserve and so-called loose monetary policies.

Jerry Seib: What went wrong for the Democrats?
Will a Republican-led U.S.Congress be a vote in favor of stocks?
Payroll data, Fed speakers ahead: Private-sector hiring slightly picked up in October, as employers added 230,000 jobs, ADP reported Wednesday. The reading can influence market expectations for Friday’s key monthly jobs report.
The Institute for Supply Management’s nonmanufacturing survey for October will be released at 10 a.m. Eastern.
Minneapolis Fed President Narayana Kocherlakota, a voting member of the Fed policy committee this year, will give a speech on “clarifying the objectives of monetary policy” in Virginia, Minn. at 9:15 a.m. Eastern time. Richmond Fed President Jeffrey Lacker will give a speak on ‘Committing to Financial Stability” at a conference at George Washington University at 9:30 a.m. Eastern. He becomes a voting member next year. 

Boston Fed President Eric Rosengren, not a voting member, will give a speech at the Global Banking Standards and Regulatory and Supervisory Priorities in Lima, Peru at 10 a.m. Eastern.
Stocks to Watch: Mondelez International Inc MDLZ, -1.07%  surged after the packaged-food company beat estimates for the third-quarter earnings.

EOG Resources EOG, -3.26%   jumped after the oil and gas company beat earnings and revenue forecasts and raised its full-year production outlook.
Time Warner Inc. TWX, +4.04%  shares climbed after its sales and earnings beat forecasts.
Later on Wednesday, Tesla Motors Inc. TSLA, +1.10%  will report, and shares were up 1.1% ahead of those results. What to expect from Tesla earnings
Shares of Activision Blizzard Inc. ATVI, -1.72%  rose after the group posted a weaker-than-expected outlook for the fourth quarter in late trading Tuesday, but earnings beat forecasts.
TripAdvisor Inc. TRIP, -12.48%  slid after its third-quarter results disappointed.
FireEye Inc. FEYE, -15.50%  tumbled after the company missed sales forecasts for the third quarter.
Read more about the day’s notable stocks in Movers & Shakers column.
Commodities under pressure: While gold fell, there was also no letup for oil prices, with WTI crude CLZ4, +0.73%  down another 40 cents. U.S. stocks finished a choppy session lower on Tuesday, dragged by steep losses for energy companies.
Europe stocks SXXP, +1.47%  caught a tailwind from higher U.S. stock futures. In Asia, stocks generally fell, outside of a 0.4% gain for the Nikkei 225 index NIK, +0.44

RTTNews Forex Market Update - November 5, 2014.

Economic News

India's private sector activity expanded at the weakest pace in five months in October, data published by Markit Economics showed Wednesday. (Nov 5, 2014) Full Article

The Eurozone private sector expanded slightly less than initially estimated in October, final data from Markit Economics showed Wednesday. (Nov 5, 2014) Full Article  

U.K. service sector growth slowed more than expected to a seventeen-month low in October, survey results from Markit Economics and the Chartered Institute of Purchasing and Supply, or CIPS, showed Wednesday. (Nov 5, 2014) Full Article

Eurozone retail sales declined more than expected in September on a notable decrease in non-food product sales, data revealed Wednesday. Retail sales fell 1.3 percent in September from last month reversing a 0.9 percent rise in August, Eurostat said. Sales were expected to fall moderately by 0.8 percent. (Nov 5, 2014) Full Article 

Iceland's central bank lowered its key rate for the first time since February 2011 as growth is set to be weaker than the previous forecast. (Nov 5, 2014) Full Article

Russia's central bank said it would reduce foreign exchange interventions to further increase the currency flexibility. (Nov 5, 2014) Full Article

Private sector employment in the U.S. increased by slightly more than anticipated in the month of October, according to a report released by payroll processor ADP on Wednesday. (Nov 5, 2014) Full Article

Forex Top Story

The unemployment rate in New Zealand was 5.4 percent in the third quarter of 2014, Statistics New Zealand said on Wednesday. (Nov 5, 2014) Full Article

China's services sector growth slowed from the previous month in October, results of a survey by Markit Economics and HSBC Bank showed Wednesday. (Nov 5, 2014) Full Article

Indonesia's economic growth slowed again in the third quarter making it difficult for the newly elected President Joko Widodo to achieve the 7 percent growth that he pledged to achieve in his term. (Nov 5, 2014) Full Article 


Crude oil prices inched down Wednesday morning, ahead of official inventory data. (Nov 5, 2014) Full Article 

Gold prices plunged Wednesday morning, as the U.S. dollar continued to surge on the diverging interest rate outlooks for the U.S. and Europe. (Nov 5, 2014) Full Article

Political News

The Republicans have won control of the Senate in the US mid-term elections. (Nov 5, 2014) Full Article

The US Army's recently-formed Train, Advise, Assist Command - East assumed its new mission in eastern Afghanistan Tuesday. (Nov 5, 2014) Full Article 

General News

The United Nations is calling for US$173.1 million to address the immediate needs of 1.26 million people across Iraq in need of assistance over winter. (Nov 5, 2014) Full Article 

Australia is contracting a private company to establish a 100-bed Ebola Treatment Unit (ETU) in Sierra Leone. (Nov 5, 2014) Full Article

RTTNews Morning Market Briefing - November 5, 2014.

Following the lackluster performances seen in the two previous sessions, stocks are likely to show a strong move to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 88 points. (Nov 5, 2014) Full Article
Economic News
The unemployment rate in New Zealand was 5.4 percent in the third quarter of 2014, Statistics New Zealand said on Wednesday. (Nov 5, 2014) Full Article 
China's services sector growth slowed from the previous month in October, results of a survey by Markit Economics and HSBC Bank showed Wednesday. The HSBC services business activity index fell to 52.9 in October from 53.5 in September. (Nov 5, 2014) Full Article
Indonesia's economic growth slowed again in the third quarter making it difficult for the newly elected President Joko Widodo to achieve the 7 percent growth that he pledged to achieve in his term. Gross domestic product expanded 5.01 percent year-on-year in the third quarter. The growth rate was forecast to remain almost unchanged at 5.1 percent. This was also the slowest growth in five years. (Nov 5, 2014) Full Article
Private sector employment in the U.S. increased by slightly more than anticipated in the month of October, according to a report released by payroll processor ADP on Wednesday. (Nov 5, 2014) Full Article
Broker Ratings Changes
FBR Capital Markets Lifts Time Inc. (TIME) To Outperform From Market Perform With $27 up from $22 Price Target
(Nov 5, 2014
RBC Capital Markets Starts Dominion Midstream Partners LP (DM) At Outperform With $38 Price Target
 (Nov 5, 2014)   
RBC Capital Markets Ups L'Oreal Co. (LRLCY.PK) To Outperform From Sector Perform With €135 Price Target
(Nov 5, 2014)
Todays WS Events
Cardinal Health Annual Meeting Of Shareholders At 8:00 AM ET
Cardinal Health Inc. (CAH) will host its Annual Meeting of Shareholders at 8:00 AM ET on November 5, 2014 in Dublin, Ohio. To acccess the live webcast, log on at (Nov 5, 2014
CBS Q3 14 Earnings Conference Call At 4:30 PM ET
CBS Corp. (CBS) will host a conference call at 4:30 PM ET on November 5, 2014, to discuss Q3 14 earnings results. To access the live webcast log on to To listen to the call, dial (800) 406-5356 (US) or (913) 312-1375 (International). For a replay call, dial (800) 839-4276 (US) or (402) 220-1735 (International). (Nov 5, 2014
Oracle Annual Meeting Of Stockholders At 1:00 PM ET
Oracle Corp. (ORCL) will hold its Annual Meeting of Stockholders at 350 Oracle Parkway, Redwood City at Oracle''s headquarters. The event is scheduled to begin at 1:00 PM ET on November 05,2014. To access the live webcast, log on at (Nov 5, 2014)
Qualcomm Q4 14 Earnings Conference Call At 4:45 PM ET
Qualcomm Inc.(QCOM) will host a conference call at 4:45 PM ET on November 5, 2014, to discuss Q3 14 earnings results. To access the live webcast log on to To listen to the call, dial (855) 859-2056 (US) or (404) 537-3406 (International) with confirmation code 20823606. (Nov 5, 2014
Symantec Q2 15 Earnings Conference Call At 5:00 PM ET
Symantec Corporation (SYMC) will host a conference call at 5:00 PM ET November 5, 2014, to discuss its Q2 15 earnings results. To access the live webcast, log on at (Nov 5, 2014
Time Warner Q3 14 Earnings Conference Call At 10:30 AM ET
Time Warner Inc. (TWX) will host a conference call at 10:30 AM ET on November 05, 2014, to discuss its Q3 14 earnings results. To access the live webcast, log on at To hear the live call, dial 800-446-2782 (United States) or 847-413-3235 (Intl) with passcode 38158116. A replay of the call can be heard by dialing 888-843-7419 (United States) or 630-652-3042 (Intl) with passcode 38158116. (Nov 5, 2014)
Union Pacific 2014 Investor Day Webcast At 2:00 PM ET
Union Pacific Corporation''s (UNP) will host its 2014 Investor Day at 2:00 PM ET on November 5, 2014. To access the live webcast, log on at (Nov 5, 2014
Whole Foods Market Q4 14 Earnings Conference Call At 5:00 PM ET
Whole Foods Market Inc (WFM) will host a conference call at 5:00 PM ET on November 05, 2014, to discuss its Q4 14 earnings results. To access the live webcast, log on at To hear the live call, dial 877-888-4314 (Domestic) and 785-424-1875 (International) with ID is "Whole Foods." (Nov 5, 2014

NYT | First Draft on Politics Special Edition - November 5, 2014: Washington Wakes to a Republican Reality.

November 5, 2014 »
First Draft

Special Edition: Washington Wakes to a Republican Reality

Thom Tillis greeted supporters after his Senate victory early Wednesday in Charlotte, N.C. Jason Miczek/Reuters
November 5, 2014
By Carl Hulse
Good Wednesday morning after an Election Day in which Republicans won the Senate, padded their majority in the House and added to their numbers among the nation’s governors. Some sure-thing Democrats were defeated, others were claiming victory in races yet to be officially decided. Here’s what you need to know as a new political day dawns.
G.O.P. Rout in the Senate Was Only the Start
Republicans have picked up at least seven seats in the Senate, one more than they needed to snatch control from the Democrats. They clinched it with the surprising outcome in North Carolina, where Senator Kay Hagan conceded to Thom Tillis, the State House speaker. Republicans also took Democratic seats in Arkansas, Colorado, Iowa, Montana, South Dakota and West Virginia. Votes are still being counted in Alaska, where Senator Mark Begich was slightly behind. The Louisiana race is headed for a runoff that will have no impact on Senate control but is not expected to favor Senator Mary L. Landrieu, the Democratic incumbent.
Bottom line: Republicans, 52; Democrats, 44; independents, 2; Louisiana and Alaska to be decided.

House Republicans Win Their Biggest Majority Since 1940s
Voters gave the House speaker, John A. Boehner, a bigger majority in a year that started out with the Democrats hoping that they could make up some of the political territory they lost in 2010. Votes are still being counted in a handful of districts this morning, but it appears that Republicans will win more than 10 additional seats — and their largest majority since the 1940s. The election’s victims included Representative Nick J. Rahall II, West Virginia’s last House Democrat, and Representative John Barrow of Georgia, the last white Democrat from the Deep South. Republicans also added two seats in New York State.
Bottom line: Republicans, 241; Democrats, 174; to be determined, 20.
At Least Four More States Join Ranks of the Republican-Governed
Democrats were shellacked up and down the ballot. Republicans won governors’ races in Arkansas, Illinois, Maryland and Massachusetts – all states now governed by Democrats – and held on to statehouses in Florida, Kansas, Maine, Michigan and Wisconsin. In Connecticut, the Democratic incumbent, Gov. Dannel P. Malloy, claimed victory, but his opponent had not conceded by Wednesday morning. The Democrats did manage to pick up Pennsylvania with Tom Wolf’s win over Gov. Tom Corbett. Votes were still being counted in Colorado (with a Democratic incumbent) and Alaska (a Republican), and because it appears the Democratic incumbent in Vermont didn’t win a majority, that race is likely to be decided in the Democratic-controlled State Legislature.
Bottom line: Republicans, 31; Democrats, 15; to be determined, 4.
A Night When Family Ties Were No Guarantee of Political Victory
It was not a great night for political scions. Both Jason Carter (Jimmy’s grandson) and Michelle Nunn (Sam’s daughter) went down in Georgia, Senator Mark Pryor (son of David) lost in Arkansas and Senator Mark Udall (son of Mo) in Colorado.
But there was some good news for two political dynasties: Shelley Moore Capito of West Virginia, daughter of former Gov. Arch A. Moore Jr., was elected to the Senate. And Gwen Graham, daughter of the former Florida governor and senator Bob Graham, was elected to the House.

Would It Have Been Better if Obama Had Opposed Them?

Memo to Democratic candidates: If President Obama offers to come campaign for you, you might want to think twice.
In the days leading up to Tuesday’s election, Mr. Obama traveled to his home state of Illinois to campaign for Gov. Pat Quinn.
Mr. Quinn lost.
The president appeared at a rally for Lt. Gov. Anthony G. Brown, the Democratic candidate for governor in Maryland, a reliably Democratic state.
Mr. Brown lost.
With only days left in the campaign, Air Force One brought Mr. Obama to Connecticut, to give a lift to Gov. Dannel P. Malloy.
Mr. Malloy claimed victory, but his opponent has not formally conceded.
And on the eve of the election, Mr. Obama lent his voice to a radio advertisement, hoping to increase African-American turnout on behalf of Senator Kay Hagan, the incumbent Democratic in North Carolina.
Ms. Hagan lost.
– Michael D. Shear

French government gives green light for GE-Alstom deal: Reuters Deals Today - November 5, 2014:

French government gives green light for GE-Alstom deal PARIS (Reuters) - The French government gave the green light on Wednesday for General Electric's planned 12.4 billion euro ($15.6 billion) purchase of most of Alstom's power business.

Virgin Money valued at up to $2.3 billion in revived listing: sources LONDON (Reuters) - UK lender Virgin Money [IPO-VMH.L] will be valued at up to 1.45 billion pounds ($2.3 billion) in its revived London stock market listing, slightly lower than expectations, two sources familiar with the matter said on Wednesday.

Kenya's Safaricom, Moneygram sign money transfer deal
NAIROBI (Reuters) - Kenya's Safaricom and U.S. company MoneyGram International have agreed a deal for money to be sent from abroad to Kenya through their money transfer services, targeting more than $1 billion sent in remittances every year.
Transfield wants trading freeze, hush clause before negotiating with Ferrovial SYDNEY (Reuters) - Australia's Transfield Services Ltd , which runs the country's offshore refugee detention centers, said it won't negotiate with Spain's Ferrovial SA over a $873.60 million takeover approach until it agrees not to buy its shares for three months.

  Cheung Kong agrees to buy stakes worth $2 billion in aircraft for leasing HONG KONG (Reuters) - Cheung Kong Holdings Ltd , owned by Asia's richest man Li Ka-shing, said it had agreed to buy stakes worth $2.02 billion in about 60 aircraft as part of the property firm's push into airplane leasing.

Plunging gold price has mining companies selling at a loss: GATA | THE GATA DISPATCH - November 5, 2014.

Plunging gold price has mining companies selling at a loss

Submitted by cpowell on  Wednesday, November 5, 2014. Anybody heard a peep from the World Gold Council, or from the miners themselves?
* * *
Plunging Gold Price Has Mining Companies Selling at Loss
By Liezel Hill and Kevin Crowley
Bloomberg News
Wednesday, November 5, 2014

The latest decline in the price of gold is saddling higher-cost producers with losses on every ounce mined, and pushing others to the brink of slipping into the red.
Gold fell to a four-year low of $1,143.76 an ounce today, below production costs for six of 19 mining companies tracked by Bloomberg Intelligence, including Harmony Gold Mining Co., South Africa's third-largest producer, and Primero Mining Corp. Three more producers are within $50 of the figure.
"What's developing is almost a two-tier type of market," said John Ing, chief executive officer at brokerage Maison Placements Canada Inc., speaking by phone. One tier has companies with good assets and lower costs, while the other comprises producers "who are saddled with high-cost operations" and stretched balance sheets. ...
... For the remainder of the report:
* * *
Low Gold Price Could Threaten the Future of Australian Industry if Global Slump Continues
By Bridget Fitzgerald and Tara de Landgrafft
Australian Broadcasting Corp., Sydney
Tuesday, November 4, 2014
Australia's largest gold miner has warned that its future in the country could be under threat if the gold price continues to slide.
The global gold price hit a four-year of US$1,167 an ounce on Monday night.
Newmont Asia Pacific manager of external relations, Kelvyn Eglinton, says the high cost of operating in Australia may force the company to relocate overseas.
Audio: Kelvyn Eglinton from Newmont Asia Pacific says gold production in Australia is 'quite threatened' by low gold prices. (ABC Rural)
Newmont operates Australia's single largest gold mine at Boddington in Western Australia's south-west, which produces 700,000 ounces of gold each year. ...

... For the remainder of the report:

DealBook Today's Top Headlines - November 5, 2014: Wall St. Hopeful After G.O.P. Victory | Regulators Wary of Leveraged Loans | Alibaba Reports Strong Earnings | Creditors Keep Troubled Law Schools Afloat.

Wednesday, November 5, 2014
WALL ST. HOPEFUL AFTER G.O.P. VICTORY Republicans took control of the Senate on Tuesday night and expanded their hold on the House, in a rebuke of President Obama that will reshape the political landscape for his final two years in office, The New York Times writes. Propelled by economic dissatisfaction and anger toward the president, Republicans grabbed Democratic Senate seats in North Carolina, Colorado, Iowa, West Virginia, Arkansas, Montana and South Dakota to gain their first Senate majority since 2006. With at least a nine-seat gain and most likely more, House Republicans will have close to 245 seats, the largest Republican majority since the Truman administration.

So what does the G.O.P.'s victory mean for Wall Street? The financial industry is looking to see changes to the corporate tax code, immigration, international trade, energy and health care. The reshaped political landscape could lead Congress and President Obama to seek legislative breakthroughs on some economic issues before the 2016 election cycle. "What we hope the next Congress will do is focus on policies that drive competitiveness and drive growth," Aric Newhouse, an executive at the National Association of Manufacturers, told The Wall Street Journal.

Republicans have indicated they are particularly interested in working with President Obama on a tax overhaul and trade policy. "A Republican-led Congress will be determined to send a tax reform bill to the White House ahead of the 2016 presidential election cycle," John Brady, vice president at RJ O'Brien, told The Financial Times.

The markets are also poised to move higher. "Midterm Novembers are good. Midterm Decembers are good. Plus you've got the 'sell in May and go away effect' that ends in November," said Jack Ablin, chief investment strategist at BMO Capital Markets. Others are skeptical that the election results will have any effect on the markets. Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, told Reuters: "There aren't too many surprises here, and I don't think markets will react negatively, or positively on this."
REGULATORS WARY OF LEVERAGED LOANS As regulators hunt for the next financial bubble, they are homing in on the leveraged loan market, an obscure corner of Wall Street that has been tapped for more than $2 trillion since the start of last year, DealBook's Peter Eavis reports. By providing financing, Wall Street would appear to be doing its job of matching companies that need capital with investors who can provide it. After banks like JPMorgan Chase and Bank of America make loans to the companies, they turn around and sell the debt to hedge funds, pensions and even mom-and-pop mutual funds. But while these leveraged loans funnel money to companies that might otherwise struggle to finance their ambitions, bank regulators are worried.

In recent months, the Federal Reserve and the Office of the Comptroller of the Currency have intervened to tamp down the market. Leveraged loans are made to companies with low credit ratings that could suffer high losses in a downturn. Officials contend that the crackdown is part of their mission to ensure the soundness of the banking system. "But with this onslaught, they are also trying to have their regulatory cake and eat it, too," Mr. Eavis writes. The Fed's policy of keeping interest rates at record lows has driven investors to buy riskier investments in exchange for higher returns. The regulators fear that the stampede into less conventional assets like leveraged loans could create bubbles that will later pop, harming the banks and the wider economy.

Leveraged loans have also cropped up in another area of concern to regulators: Exchange-traded funds, or E.T.F.s. These bundled pools of assets, ranging from stocks and bonds to currencies and derivatives, are bought and sold on equity markets by large and small investors alike. Over the last decade, E.T.F. assets have exploded to $2.5 trillion from less than $500 billion, DealBook's Landon Thomas Jr. writes. And while E.T.F.s have become wildly popular for retail investors, regulators are worrying that too many of these assets have been accumulated in hard-to-sell investments like junk bonds, emerging-market debt and, farthest out on the risk frontier, leveraged loans. In this regard, Invesco's senior loan fund is treading a risky path as a big investor in distressed debt.
ALIBABA REPORTS STRONG EARNINGS The Chinese e-commerce giant Alibaba Group reported on Tuesday a jump in profit in its first earnings announcement since its initial public offering in September, Paul Mozur writes in The New York Times. Alibaba's profit grew 16 percent compared with results in the period a year earlier, as the company's sites benefited from the growing number of Chinese turning to the Internet to shop. Shares in the company have risen about 50 percent since it raised nearly $21.8 billion in the highly anticipated initial stock sale. With a market value of more than $250 billion, Alibaba is now worth more than Facebook.

Pointing to a big increase in the number of customers using the company's e-commerce sites on smartphones and to strong increases in sales and profits, Joseph C. Tsai, the company's executive vice chairman, said in a news conference that the results provided a "strong foundation for future sustained growth." Alibaba said that in the quarter ended Sept. 30, its net profit jumped to $1.1 billion, roughly in line with analyst expectations. Alibaba's revenue rose 54 percent, to $2.7 billion. Alibaba's chief financial officer, Maggie Wei Wu, said the company would not disclose guidance for its future earnings because it wanted to focus on the long term.
ON THE AGENDA The ADP employment report comes out at 8:15 a.m. Gallup's job creation index is released at 8:30 a.m. The Markit purchasing managers' index for services is released at 9:45 a.m. The Institute for Supply Management nonmanufacturing index comes out at 10 a.m. Ben S. Bernanke, former chairman of the Federal Reserve, speaks at the Charles Schwab Impact 2014 conference at 6:45 p.m. in Denver. Time Warner reports third-quarter results before the market opens. Tesla Motors reports third-quarter results after the market closes.
CREDITORS KEEP TROUBLED LAW SCHOOLS AFLOAT Creditors are keeping failing law schools on life support, Steven Davidoff Solomon writes in the Deal Professor column. Consider Thomas Jefferson School of Law in San Diego, which recently restructured its debt. Graduates of the school, a stand-alone entity that is ranked in the lowest tier by U.S. News and World Report, face low employment numbers and high student debt. Struggling with a decline in enrollment and other problems, Thomas Jefferson defaulted on its debt in June 2014 by failing to make a scheduled payment. Law school critics delighted, creating speculation that the school might be the first to "keel over."

But last week, Thomas Jefferson announced that it would survive after it renegotiated its debt with its creditors. In the deal, Thomas Jefferson handed over its only significant asset ‒ a new, 305,000-square-foot building ‒ to creditors. In addition, Thomas Jefferson's debt was written down to $40 million from $127 million and the interest rate reduced to 2 percent. "Thomas Jefferson got a sweetheart deal, but its creditors had no choice. If they shut down the law school, the only value left would be a law school building that would need to be repurposed and redesigned," Mr. Davidoff Solomon writes. "Creditors thus valued the law school at zero and took the only asset: the building."

There are lessons here for the entire law school system. For one, a closed law school is worth little, or most likely nothing, to creditors. The value is only in the revenue stream it produces and perhaps its building. Shutting down a law school at a larger university also puts the administrators and others out of work. "This explains why, despite forecasts that up to a third of law schools could close, even the most financially dire have not," Mr. Davidoff Solomon writes. "It may be tempting to shut them in these difficult times, but it can cost tens of millions to open a new one. Better to invest and cut back on expenses for a while and see what happens."
Contact: @melbournecoal | E-mail
William Ackman, the chief executive of the hedge fund Pershing Square Capital Management.
Judge Declines to Block Ackman From Voting in Board Fight at Allergan A federal judge on Tuesday cleared the way for William A. Ackman to vote his firm's shares in Allergan, the maker of Botox, in a fight for control of the company's board, an important step in his hostile takeover attempt with Valeant Pharmaceuticals.
French Government Approves G.E.-Alstom Deal The French government on Wednesday approved General Electric's planned $15.6 billion purchase of most of Alstom's power business, Reuters writes.
Hong Kong Billionaire Enters Plane-Leasing Market Li Ka-shing's Cheung Kong Holdings has agreed to pay $1.89 billion to buy 35 planes from companies including GE Capital Aviation Services, Bloomberg News reports. Cheung Kong will also form a joint venture with MC Aviation Partners that will buy an additional 15 planes for $733.5 million, according to a company filing to Hong Kong's stock exchange.
Morgan Stanley to Get $1.3 Billion Benefit A change in the structure of its Morgan Stanley Smith Barney business allows the firm to release $1.3 billion it had previously set aside for taxes.
Investors Pulled $27.5 Billion From Flagship Pimco Fund The bond giant Pimco said investors withdrew $27.5 billion from its flagship Total Return fund in October, shrinking the size of the world's largest bond fund to $171 billion.
ING Group Moves Up Final Payment of Bailout Money to Dutch Government The Dutch financial services company said it would repay the last of what it owes for a bailout during the financial crisis on Friday, six months earlier than expected.
R.B.S. Said to Consider Sale of Mideast Loans The Royal Bank of Scotland is said to be weighing a sale of its Middle East corporate loan book as it reviews its international business, Bloomberg News writes, citing two unidentified people with knowledge of the situation.
Millstein Hires Sovereign Restructuring Adviser Millstein & Company, the financial advisory firm founded by James E. Millstein, has hired Mark Walker, a former banker with Rothschild.
    Buyout Firms Press to Keep Information Under Wraps Private equity firms have been advising public pension funds to keep secret details about fees, interactions with regulators and other investment data, sometimes threatening to punish investors that do not heed the warnings, The Wall Street Journal writes.
    Leonard Green to Buy Sanitation Company for $1 Billion The private equity firm Leonard Green & Partners is said to have agreed to acquire Packers Sanitation Services Inc., a United States food sanitation company, for about $1 billion, including debt, Reuters writes, citing unidentified people familiar with the matter.
    Warburg Pincus-Owned GT Nexus Explores Sale GT Nexus, a cloud-computing company owned by the private equity firm Warburg Pincus, is exploring a sale that could value the company at at more than $800 million, The Wall Street Journal reports.
    Change in Sales Policy Weighs on Herbalife Herbalife's stock fell nearly 21 percent on Tuesday after the company reported disappointing earnings.
    A Hedge Fund's Dream Deferred In 2013, Michael Platt wanted to expand his hedge fund, BlueCrest Capital Management, whose assets had reached more than $37 billion, to $50 billion. But now, facing a host of problems, including investor withdrawals, BlueCrest is managing half that amount and is set to lose about $8.9 billion more, Bloomberg News writes.
    Carl Icahn invests through Icahn Enterprises as well as a number of privately owned entities.
    Icahn's Publicly Traded Arm Stung by Energy Investments Icahn Enterprises, part of Carl C. Icahn's investment empire, reported a third-quarter loss of $355 million, driven by lower values of energy investments like CVR Refining and CVR Energy.
    Elliott Said to Gear Up for Proxy Fight With IPG The activist hedge fund Elliott Management is said to be preparing to campaign for board seats at the Interpublic Group, as it pushes for a sale of the advertising holding company, The Wall Street Journal writes, citing an unidentified person familiar with the matter.
    Virgin Money Said to Be Valued Below Expectations The British lender Virgin Money will be valued at up to $2.3 billion in its revived London stock market listing, slightly lower than expectations, Reuters reports, citing two unidentified people familiar with the situation.
    China Aims at U.S. Investors With Bond Offering Bank of China is poised to become the first mainland Chinese lender to sell dollar-denominated bonds directly to United States investors, The Financial Times writes.
    Gigya, a Social Log-In Manager, Raises $35 Million The financing round, led by the venture capital arm of Intel, will allow the company to expand its business of linking websites to social media.
    An Apple-Like Valuation for a Chinese Rival A new funding round could give Xiaomi a valuation of as much as $50 billion, but the Chinese company lacks the market dominance and innovation that would justify such a price, Ethan Bilby of Reuters Breakingviews writes.
    On his first full day in office, President Obama issued an executive order intended to make more documents available under the Freedom of Information Act.
    S.E.C. Raises Barrier to Disclosure of Information Despite efforts to improve disclosure under the Freedom of Information Act, the S.E.C. continues to resist sharing data with the public, William D. Cohan writes in the Street Scene column.
    European Union Lowers Growth Forecasts as Business Confidence Sags European Union officials on Tuesday sharply lowered growth forecasts as member states like France, Germany and Italy showed weak economic performance and as business confidence suffered from heightened geopolitical risks, The New York Times reports.