Greeks take hundreds of millions of dollars out of banks there and the government calls national elections. (Reuters)

Shares of JCPenney (NYSE: JCP) fall sharply after it announces poor earnings. (Reuters)

BHP Billiton (NYSE: BHP) says commodities prices will drop more than they have in the past month. (Reuters)

T-Mobile USA will cut 900 jobs as its subscriber count falls. (Reuters)

General Motors (NYSE: GM) will stop advertising on Facebook because of poor results. (Reuters)

Global mobile phone sales drop 2% in the first quarter, according to Gartner. (Reuters)

Activist fund Relational Investors takes a $600 million stake in PepsiCo (NYSE: PEP) and may press to shake up management and strategy. (WSJ)

Nvidia (NASDAQ: NVDA) begins to move graphics functions from PCs to the cloud. (WSJ)

Amazon.com (NASDAQ: AMZN) sharply increases the size of its work force. (WSJ)

House Speaker John Boehner says an increase in the national borrowing level would need to be accompanied by budget cuts. (WSJ)

Two of seven transport workers unions reject contract offers from bankrupt AMR, leaving a judge to decide their fates. (WSJ)

The FBI begins investigating the trading at JP Morgan (NYSE: JPM) that created a $2 billion loss. (NYT)

As consumers move away from soda, PepsiCo and Coca-Cola (NYSE: KO) must rely more on bottled water sales. (NYT)

Merkel and Hollande say they want Greece to remain in the eurozone and state that stimulus measures might be in order. (FT)

European car sales fall more than 6% in April, according to the European Automobile Manufacturers’ Association. (Bloomberg)

Douglas A. McIntyre

Freeport-McMoRan reported first quarter earnings this morning, and revenues are down nearly -20% from the same period a year ago, $4.6 billion this year versus $5.7 billion a year ago. Copper production is down from 950 million pounds a year ago to 833 million pounds this year and unit net costs have risen from $0.79 to $1.26.

In the earnings report, the CEO said that the company plans to increase copper production by 25% in the next 3 or 4 years, and he noted Freeport’s longer-term prospects:

We are highly positive about the long-term prospects of our business and markets. Our company is well-positioned with long-lived reserves and mineral resources, an attractive mid-term and longer-term organic growth profile and a strong financial position.

EPS for the quarter came in at $0.80, versus a consensus estimate of $0.86 and year-ago EPS of $1.57. Gold production was down by -46% although the average realized price per ounce was 21% higher.

Labor problems in Indonesia get some of the blame for the production declines and for higher unit costs. But the company did face higher labor costs in the Americas, and that will likely turn out to be a drag for some time to come.

Southern Copper’s unit costs in 2011 were just $0.41/pound and the company has said nothing yet about first quarter production, nor has it announced a date on which it plans to report earnings. The consensus estimate for EPS is $0.59 on revenue of $1.6 billion. That’s above last year’s actual EPS of $0.55, and is very likely wishful thinking. Southern Copper gets nearly 77% of total sales from copper.

Rio Tinto published its operational review earlier this week, noting that copper production at its Kennecott mine is down -18%, due to the lower grade ores being mined. The company expects the low-grade ores to persist through the first half of the year, but is planning to mine a higher grade area later in the year. The company also plans to shut down its smelter for 26 days in order to switch to equipment to handle the higher grade ores. The company did not say anything about costs or sales in its operations review.

BHP Billiton released an operational review yesterday, showing copper production down -10% for the first nine months of its 2012 fiscal year compared to the first nine months of 2011. The March quarter showed a boost of 3% compared with the same period a year ago, and sequential production was flat. Copper is less important to BHP, which is the world’s largest iron ore miner, but the company is expanding its copper production.

A recovery in copper prices depends almost entirely on demand from China, which takes about 40% of the world’s copper and is currently constrained by near-record inventories of around 3 million metric tons.

Warehouses at the London Metals Exchange, conversely, are more than half empty, which gives some hope for price rises. The bad news, though, is that prices for copper deliveries are higher for immediate delivery than they are for July delivery, a commodities market condition known as ‘backwardation’. Usually this market supports higher prices, but this time a lot depends on how fast and by how much China uses its stockpiles.

Freeport shares are up about 2% at $39.05 in a 52-week range of $28.85-$56.78.

Paul Ausick

Exports from Japan improve. (Reuters)

The Fed’s Beige Book reports concern about energy costs. (Reuters)

The World Bank expects China’s expansion to slow this year. (Reuters)

Rio Tinto (NYSE: RIO) and BHP Billiton (NYSE: BHP) ore output will drop because of low demand in China. (Reuters)

Apple (NASDAQ: AAPL) tries to fix malware problems with some Macs, but the PR fallout has been significant. (Reuters)

BlackRock (NYSE: BLK) will set its own bond trading platform to bypass normal markets. (WSJ)

The Justice Department claims Apple and five publishers illegally set e-book prices. (WSJ)

More fast-food chains sell company outlets to franchisees as a way to cut costs. (WSJ)

Las Vegas Sands (NYSE: LVS) launches a $4.4 billion casino complex in Macau. (WSJ)

The federal deficit narrows as tax receipts rise. (WSJ)

Competition in the locomotive business rises between General Electric (NYSE: GE) and Caterpillar (NYSE: CAT). (WSJ)

The CFO of JCPenney (NYSE: JCP) is pushed out. (WSJ)

Record labels and digital sites reach an agreement on royalties. (WSJ)

California solar-power developer BrightSource Energy will go public. (WSJ)

Volkswagen and BMW set sales records in the first quarter on improved luxury demand. (WSJ)

China Q1 auto sales fall 3.4% (WSJ)

The Greek crisis leaves Cyprus with huge debts. (NYT)

Amazon.com (NASDAQ: AMZN) will cut e-book prices. (NYT)

Johnson & Johnson (NYSE: JNJ) is fined $1.2 billion for its promotion of drug Risperdal. (NYT)

A report by the special inspector general for the Troubled Asset Relief Program says the Treasury has done a poor job of helping the housing markets. (NYT)

A board investigation into conduct by Best Buy’s (NYSE: BBY) former CEO Brian Dunn will continue. (NYT)

Spotify opens its streaming system to other websites. (FT)

Nokia (NYSE: NOK) may have to split its low-end handset business from its smartphone operations. (Bloomberg)

Douglas A. McIntyre

In its announcement of the closure, Billiton said:

This situation has come about as a result of a combination of lower production, a significant increase in costs and lower coal prices. … The decision to cease production follows a seven week review of the mine’s viability. The review could not establish any immediate remedies that would allow the operation to sustainably return to profitability.

About 1,400 employees will lose their jobs as a result of the closure. Of that number about 500 are Billiton employees and the others are contractors. Heavy rains and flooding last year hurt production at the mine, and labor issues have affected all six of the partnership mines.

Rio’s assets include the world’s largest producer of pink diamonds, the Argyle mine in Australia, plus shares in three other mines and polishing operations in Australia. According to a report in The Wall Street Journal, Rio’s diamond operations generated 11.7 million carats in 2011, but net income fell to $682 million from $727 million in 2010 as costs rose significantly and volumes fell at Argyle.

One company seeking to expand its diamond business is Anglo American plc (OTC: AAUKY), which expects to close its $5.1 billion purchase of an additional 40% of DeBeers later this year.

Rio’s diamond assets are carried on the company’s books at a value of $1.17 billion, but one analyst told the WSJ that a value of less than $1 billion is more reasonable, given that Rio has yet to complete a project in India and that the company’s Zimbabwe mine has “minimal value.”

Rio’s shares are up about 1.4% in the pre-market this morning at $54.06 in a 52-week range of $40.50-$74.99.

Paul Ausick

This somewhat anomalous situation is hitting BHP Billiton Ltd. (NYSE: BHP), Vale SA (NYSE: VALE), and Rio Tinto plc (NYSE: RIO) today, following comments on the steel and iron ore markets from a BHP executive to Bloomberg News:

We’re still confident in the long-term demand for commodities generally, of which iron ore is one, as one-third of the global population is urbanizing and the population is getting bigger.

BHP expects iron ore demand to continue growing through 2025 and the company plans to double its current production by 2020. BHP expects steel demand from China to grow from 700 million tons today to 1-1.1 billion tons by 2025.

But that’s not helping share prices today, as the reports of the current slowdown are weighing on the big miners’ stocks. BHP is down -3.4% at $72.95 in a 52-week range of $62.54-$104.59. Vale ADS are down -3.8% at $22.88 in a 52-week range of $20.46-$34.74 and Rio is down -3.9% at $54.90 in a 52-week range of $405.0-$74.99.

Paul Ausick

The Obama Administration is expected to help U.S. solar panel makers in a trade war with China. (Reuters)

The S&P 500 is within 10% of its record high. (Reuters)

Amazon.com (NASDAQ: AMZN) will buy Kiva Systems for $775 million. (Reuters)

A study by Appcelerator shows app developers moving more effort to Apple (NASDAQ: AAPL) and away from Google’s (NASDAQ: GOOG) Android and Research In Motion (NASDAQ: RIMM). (Reuters)

Facebook’s underwriters will get a fee of only 1.1% of IPO proceeds. (Reuters)

Republicans will target tax cuts and the creation of only two tax rates. (WSJ)

Chevron (NYSE: CVX) executives in Brazil face criminal charges over a leak. (WSJ)

Glencore is near a deal to buy Viterra. (WSJ)

BHP Billiton (NYSE: BHP) says China’s demand for iron ore has flattened. (WSJ)

Moody’s may downgrade General Electric (NYSE: GE) and its financial arm. (WSJ)

Europe labor unions ask General Motors (NYSE: GM) to discuss the company’s plans over the next four years. (WSJ)

Many small customers shun Google’s maps because of fees. (NYT)

Saudi Arabia begins to export more oil to the U.S. and to open older oil fields to help ease the crude crisis. (FT)

The Commodities Futures Trading Commission will more carefully oversee the $300 trillion swaps markets. (FT)

China raises prices for gasoline and diesel for the second time in two months; China Petroleum (NYSE: SNP) and PetroChina (NYSE: PTR) lobbied for the move to help profits. (Bloomberg)

Microsoft (NASDAQ: MSFT) to launch Windows 8 in October. (Bloomberg)

Douglas A. McIntyre

That’s quite a lineup of deep-pocketed shoppers and its putting some fire in other coal stocks today. Alpha Natural Resources Inc. (NYSE: ANR) is up nearly 5.3%, Peabody Energy Corp. (NYSE: BTU) is up nearly 5%, and Patriot Coal Co. (NYSE: PCX) is up more than 10%. Even the Market Vectors Coal ETF (NYSE: KOL) is up nearly 1.3%.

The same rumors hit the some of the same companies in October when both BHP and Anglo American were said to be interested in acquiring Walter Energy. Nothing happened then, and the same result is likely again. And the same stocks got a nice price bump to go with the rumors then too. This may be the only way coal stocks can post a gain these days.

Paul Ausick

The Ekati mine’s production slowed considerably in the last half of 2011, to just 938,000 carats. The mine produced about 3 million carats in all of 2010, and made our August 2011 list of the world’s top diamond mines.

Bloomberg News reports that the mine could fetch $500-$750 million for BHP, while an earlier estimate valued Ekati at $300-$500 million.

Another major transaction in the diamond business that is set to happen in the second half of this year is the purchase by Anglo American plc (OTC: AAUKY) of an additional 40% of DeBeers, the world’s largest producer of rough diamonds. Anglo American already owns 45% of DeBeers and the government of Botswana owns the other 15%.

Anglo American’s objective in spending $5.1 billion to acquire the rest of DeBeers is likely to make the company less attractive to potential acquirers. The value of the DeBeers assets will be around $10 billion and there are more miners trying to get out of the diamond mining business than are trying to get into it. Anglo American’s diamond business contributed just 9.4% of the company’s 2011 sales and a mere 6% of operating profit. Anglo American also owns some under-performing platinum mining assets.

Because neither diamonds nor platinum is traded on commodities markets, Anglo American may have to shed its diamond and platinum assets if the company hopes to drum up interest from the likes of the soon-to-be-combined Glencore/Xstrata behemoth. Xstrata killed a proposed $46 billion merger with Anglo American in October 2009.

Glencore, a commodities trading company with mines and smelters to go along with the trading business, is unlikely to want Anglo’s diamond and platinum assets. Xstrata, primarily a mining company, may think that it could turn the assets around.

One thing for sure: diamonds at your favorite jewelry store are not likely to get cheaper.

Paul Ausick

Boeing (NYSE: BA) signs a $22.4 billion deal with Lion Air. (Reuters)

Moody’s says it might cut the AAA ratings of the UK and France. (Reuters)

The FTC continues to examine the Express Scripts (NASDAQ: ESRX) deal to merge with Medco (NYSE: MHS). (Reuters)

Chinese hackers may have compromised Nortel security for a period that lasted nearly a decade. (WSJ)

Japan’s central bank will buy more assets as its eases monetary policy. (WSJ)

Apple (NASDAQ: AAPL) tests a tablet PC with a smaller screen. (WSJ)

EU leaders still have not approved a deal with Greece. (WSJ)

McDonald’s (NYSE: MCD) presses pork suppliers to treat their pigs better. (WSJ)

AT&T (NYSE: T) and Verizon Wireless to sell a 4G version of the iPad. (WSJ)

The Federal Housing Administration will run out of reserves this year. (WSJ)

Institutional Shareholder Services attacks the dual-class stock of Facebook. (WSJ)

Hewlett-Packard (NYSE: HPQ) will begin to sell huge digital presses that cost as much as $2 million. (WSJ)

Sprint Nextel (NYSE: S) sets some bonuses that exclude the cost of the purchase of iPhones. (WSJ)

BHP Billiton (NYSE: BHP) and partners will put $4 billion into new copper mines (WSJ)

Teamsters to strike Hostess if it cuts salaries and benefits. (WSJ)

Citic Securities of China applies to underwrite U.S. stocks. (WSJ)

Increases in the purchase of small cap stocks may show investors are willing to take on more risk. (NYT)

Capital One’s (NYSE: COF) deal to buy ING Direct continues to face a slow approval process. (NYT)

Chesapeake (NYSE: CHK) to sell $12 billion in assets as natural gas prices fall. (FT)

India’s inflation hits a 26-month low. (Bloomberg)

Douglas A. McIntyre