Investor relief on Wednesday at the last-minute agreement to raise the nation’s borrowing limit and end the government shutdown was tempered by the knowledge that the deal did not represent a permanent solution to the budget crises that have become more frequent in recent years, Nathaniel Popper reports in DealBook. Under the deal, the government will be financed through Jan. 15 and the Treasury will have borrowing powers until Feb. 7 â€" at which point sharp political divisions could re-emerge.
“I worry if this becomes a regular feature that all we can do is pass these three- or four-month fixes,†said Joe Kalish, the chief global macro strategist at Ned Davis Research. “If that’s going to be the case, it just puts this uncertainty into the market on a recurring basis.†For one day, though, investors breathed a little easier: the Standard & Poor’s 500-stock index was just shy of the nominal record it hit in September, and the short-term Treasury bills that were battered over the last two weeks were again popular.
Congressional Republicans conceded defeat on Wednesday, as the House and Senate approved last-minute legislation and President Obama signed the bill about 12:30 a.m. Thursday. “We’ve got to get out of the habit of governing by crisis,†Mr. Obama said. Even with the shutdown and the threat of default coming to an end, economists estimate that the cost of Congress’s gridlock has already run well into the billions of dollars, Annie Lowrey, Mr. Popper and Nelson D. Schwartz report in The New York Times.
MARK CUBAN WINS INSIDER TRADING CASE  | A jury cleared Mark Cuban, the billionaire owner of the Dallas Mavericks basketball team, of wrongdoing on Wednesday, delivering him a victory in the Securities and Exchange Commission’s insider trading case against him, Ben Protess and Lauren D’Avolio report in DealBook. For the S.E.C., which was hoping to build on the momentum it gained from the recent trial win against Fabrice Tourre, a former Goldman Sachs trader, the loss could reignite concerns about the agency’s struggles in the courtroom.
But the S.E.C. played down the significance of the verdict. “We respect the jury’s decision,†John Nester, the agency’s spokesman, said in a statement. “While the verdict in this particular case is not the one we sought, it will not deter us from bringing and trying cases where we believe defendants have violated the federal securities laws.â€
ACTIVIST INVESTOR URGES DARDEN TO BREAK UP  | Darden, the owner of restaurant chains including Olive Garden and Red Lobster, is facing pressure from the activist hedge fund Barington Capital, which wants to break the company into as many as three separate businesses, according to a letter sent to its board last month that was reviewed by The New York Times, DealBook’s Michael J. de la Merced and Alexandra Stevenson report. The plan includes separating Olive Garden and Red Lobster from faster-growing brands like LongHorn Steakhouse and the Capital Grille, and it encourages the company to consider either selling its real estate and leasing it or to spin off its holdings into a publicly traded real estate investment trust.
ON THE AGENDA Â |Â Goldman Sachs reports earnings at 7:30 a.m., with a conference call at 9:30 a.m. The Blackstone Group also reports earnings this morning, while Google announces results this evening. Dell holds its annual meeting in Round Rock, Tex. Al Gore is on Bloomberg TV at 11 a.m.
GREEK BANKING CHIEF DRAWS SCRUTINY  | Georgios A. Provopoulos, the governor of the Bank of Greece, “faces one of the bigger challenges of his tumultuous reign: an investigation into whether he abused his position by clearing a banking deal involving his former employer and a business magnate who was subsequently charged with embezzlement and fraud,†Landon Thomas Jr. reports in The Times. “In a confidential report issued last May, a senior Greek prosecutor said that Mr. Provopoulos approved the 71 million euro ($96 million) deal despite warnings from his staff regarding the buyer’s finances. The report, parts of which were reviewed by The New York Times, hints at the scope of the investigation, about which little has been previously disclosed.
“There is no evidence that Mr. Provopoulos profited personally from the transaction, which was ultimately approved. But his role â€" and the chance, however remote, that he might face criminal charges â€" could have ramifications beyond Greece.â€
Jos. A. Bank Chairman Says Big Shareholders Support Deal  | Though Men’s Wearhouse rejected an unsolicited takeover offer from Jos. A. Bank Clothiers, the chairman of Jos. A. Bank, Robert Wildrick, said that a majority of the shareholders that own stakes in both companies “are strongly in favor of the proposal,†Reuters reports. REUTERS
STK Steakhouse to Go Public Through Merger  | The owner of the STK steakhouse chain, One Group, “is merging with a so-called blank-check company in a deal that will take the chain public overnight, according to people familiar with the matter,†The Wall Street Journal reports. WALL STREET JOURNAL
Latin American Telecom Drops Bid for KPN  | The Latin American telecommunications giant América Móvil, controlled by Carlos Slim Helú, was effectively blocked by a foundation that exercised an option giving it a nearly 50 percent stake in KPN. DealBook »
Dutch Cable Company Rejects Liberty Global’s Buyout Offer  | Ziggo, the largest provider of cable television services in the Netherlands, said on Wednesday that the proposal was “inadequate.†DealBook »
Sum Worth More Than the Parts in Advance Auto Deal  | Advance Auto thinks it can wring $160 million of annual savings from combining with its rival. The current value of these savings, when taxed and capitalized, should be worth around $1 billion, Robert Cyran of Reuters Breakingviews writes. REUTERS BREAKINGVIEWS
When a Fashion House Relies on a Single Brand  | The heavy reliance of LVMH on Louis Vuitton “could be an issue for some time to come,†The Wall Street Journal’s Heard on the Street column writes. WALL STREET JOURNAL
Mortgage Settlement Report Finds Banks Giving Timely Relief  | But the number of households helped by the $25 billion national mortgage settlement has fallen short of the original predictions, and critics said too much relief was given to people who gave up their homes in short sales and not enough to help people retain their homes, The New York Times reports. NEW YORK TIMES
Black Marks Routinely Expunged From Brokers’ Records, Report Finds  | A report released on Wednesday suggests that Wall Street brokers were almost always successful when they asked to have black marks erased from their records. DealBook »
Spanish Bank Sells Stake in Citic for $1.3 Billion  | The Spanish bank Banco Bilbao Vizcaya Argentaria raised about $1.3 billion from a sale of its 5.1 percent stake in China Citic Bank, Bloomberg News reports. BLOOMBERG NEWS
BlackRock’s Profit Rose 14% in Third Quarter  | Laurence D. Fink’s money management firm is now managing a record $4 trillion after customers put more money into its stock mutual funds and exchange traded funds. DealBook »
Buffett on Driving Violations, Baseball and Jamie Dimon  | Warren E. Buffett offers an unusual defense of Jamie Dimon, comparing the billions of dollars that JPMorgan Chase has paid in fines to state troopers handing out a speeding ticket. DealBook »
Toys ‘R’ Us Finds a New Leader  | Antonio Urcelay, who had served as interim chief executive of Toys ‘R’ Us since May, is assuming that role on a full-time basis. Toys ‘R’ Us, which was taken private in 2005, also hired an executive to run its United States business. REUTERS
A Default Play Appears Too Risky for Hedge Funds  | The hedge fund industry’s many larger-than-life billionaires have made names for themselves by making bold bets, but they did not seem to be playing the angles in the political impasse over the federal debt ceiling. DealBook »
Twitter Hires Google Ad Executive as Head of Retail  | J.J. Hirschle, who has directed media and entertainment advertising at Google, is joining Twitter to run the group selling advertising to retail companies, as the social network gets ready for an initial public offering, Bloomberg News reports. BLOOMBERG NEWS
Big Payday for Twitter’s Venture Capital Backers  | Two of three venture capital firms holding Twitter shares are expected to “more than double their entire fund based on just one investment†when Twitter goes public, Fortune’s Dan Primack writes. FORTUNE
Rice Energy Said to Plan I.P.O.  | The natural gas exploration and production company Rice Energy “is planning for an initial public offering that could value the company at as much as $2.5 billion, according to people familiar with the matter,†Reuters reports. REUTERS
Founder of eBay to Back New Media Venture  | The technology billionaire Pierre M. Omidyar, who founded eBay, said he plans to personally finance a new “mass media†venture, where he will be joined by the journalist Glenn Greenwald of The Guardian. NEW YORK TIMES
A Regulator Cuts Its New Teeth on JPMorgan in ‘London Whale’ Case  | Wall Street is feeling the effects of a Commodity Futures Trading Commission rule it fought hard to tame. DEALBOOK
Fed Said to Weigh New Requirement for Banks’ Commodities Businesses  | Officials at the Federal Reserve “are considering imposing a new capital surcharge on Wall Street banks that own oil pipelines, metals warehouses and other lucrative physical-commodities assets, according to people familiar with the matter,†The Wall Street Journal reports. WALL STREET JOURNAL
Bernanke Does Not Need to Testify in A.I.G. Case, Judge Says  | The ruling from the United States Court of Appeals for the Federal Circuit overturned a lower court decision in July that said Ben S. Bernanke, the Fed chairman, should testify in a case brought by a former chief of the American International Group. REUTERS
Knight Capital to Pay $12 Million Fine on Trading Violations  | Knight Capital’s settlement with the S.E.C. stems from a wave of accidental stock orders on Aug. 1, 2012, that reverberated through the market and resulted in a $460 million loss for the trading firm. DealBook »
Britain Starts Formal Inquiry of Currency Trading  | The Financial Conduct Authority, which has been looking into accusations of market manipulation since June, said it was working with other agencies in Britain and abroad to gather information. DealBook »
2 Top Executives Are Ousted at Troubled Brazilian Oil Firm  | Eike Batista’s petroleum company OGX announced the management shake-up in a filing with Brazil’s securities and exchange commission. DealBook »
New York Attorney General Names Investor Protection Chief  |Â
REUTERS
