Market Talk

- More than 80% of companies that reported earnings have topped analysts’ estimates. But don’t get too giddy. “After all, ‘better than expected’ could simply reflect the low level of the underlying estimates and the strength of the actual data,” Pragmatic Capitalism says.

- Is fresh, massive stimulus via QE2 really necessary? The Reformed Broker blogger Josh Brown isn’t so sure. He notes companies continue to report decent earnings. And more disturbing is the fact that “outside of home prices, inflation is becoming more and more of a reality…The propping up of the dead and the dying via federal spending and zero percent rates is not warranted with markets and prices rebounding elsewhere.”

- On the other hand, the risks of not engaging in QE2 are too great, James Picerno writes at The Capital Spectator. “Calling on the Fed to stand pat risks repeating the mistakes of monetary history,” he says. “We have to deal with the pressing threats as they arrive, and worrying about runaway inflation today is
premature, and perhaps more than a little dangerous. The day for fighting that battle will come. But not now.”

- Credit Suisse notes much of the earnings season move for equities might be over, despite the fact that there’s plenty of reports still to come. “Our Portfolio Strategy team finds the bulk of the impact of earnings on market performance seems to occur in the first two weeks of earnings season, which ends today,” firm says, according to MarketBeat.

- As the reviews pour in regarding Windows Phone 7 devices, so far so good for Microsoft (MSFT). NYT’s Bits blog posts a roundup of reviews. The new lineup of phones are getting “overwhelmingly positive reactions,” blog says. “It’s still unclear if this will translate into sales or make it possible to attract customers away from existing platforms.”

- Hulu’s considering slashing price of Hulu Plus — its subscription service still in beta mode — to $4.95 per month from $9.95, MediaMemo blogger Peter Kafka reports, citing sources.

- Latest iPad rival hits the market. H-P releases its $800 touchscreen tablet computer.

- FCC weighs in on the Cablevision/News Corp dispute over Fox.

- Deal Journal’s Shira Ovide looks at the best and worst deal Apple ever made.

- WSJ profiles the state of Jay-Z’s empire, the rap monger who’s worth an estimated $450 million.

- Can we have new regulation cake, and eat it too? “After 30 years of deregulation, it’s time for the rebirth of regulation: Not heavy-handed and unnecessarily costly regulation, but regulation that’s up to the task of protecting the public from companies and executives that will do almost anything to make a buck,” former labor secretary Robert Reich says.

- It’s still not clear whether the aftermath of the Great Recession will result in new financial regulation that’s “more than window dressing designed to appease voters without actually curtailing financial sector activity,” University of Oregon economics professor Mark Thoma writes.

- Deals on Palm phones are there for the taking, with Amazon (AMZN) selling the Pre Plus only for a penny. “That’s right, the next generation version of the phone that former Palm Ceo Ed Colligan once described as a ‘significantly better product’ deserving of a higher price than Apple’s (AAPL) iPhone is selling for a penny at Amazon,” Digital Daily blogger John Paczkowski says.

- Recent weakness in China stock market doesn’t bode well, Peter Boockvar notes. Shanghai index currently sits at lowest level since last autumn, it’s down 11 of the past 13 sessions and off 14% year-to-date.

- The nature of contagion is that people act on the rumor and ignore everything else,” Ryan Avent writes at Economist’s Free Exchange blog. “Back in 2008, markets attacked financial firms indiscriminately, even as bank executives pleaded that their finances were sound. They were, in some cases, quite right. But liquidity crises, if left unchecked, become insolvency crises. The panic becomes self-fulfilling.”

- Pimco CEO Mohamed El-Erian says the Greek crisis is far from over.

- S&P 500 fast approaching its 50-day moving average. “While the 50-day is typically thought of as a key support level, the last time it came into play for the S&P 500 was back in January, and the index didn’t blink before breaking well below it back then,” Bespoke says.

- Microsoft’s (MSFT) Internet Explorer — the 300-pound gorilla of the Internet browser market — continues to lose weight.

- Peter Kafka live blogs News Corp’s earnings call with Rupert Murdoch.

- Michael Comeau at Minyanville explains why Apple (AAPL) can pretty much get away with whatever it wants.

US stocks tumble across the board, posting their worst declines in three months, as the Greek bailout is proving insufficient in quelling the roiling fears about sovereign debt across southern Europe.

DJIA, which posts its fourth straight triple-digit move, drops 225, or 2%, to 10927, its second-largest point decline of the year. S&P 500 falls 29 to 1174; all 10 sectors finish in the red. Materials and industrials each drop more than 3%. Nasdaq Comp plunges 75 to 2424, its biggest decline since January 2009.

How about all that optimism that swirled through the market just 24 hours ago? That didn’t last very long. Volatility surges — CBOE’s VIX rises 19%. Euro plunges to a fresh 12-month low against the dollar. Oil drops 4%.

Media giant News Corp (NWS NWSA) rises 2.5% in after-hours trading as F3Q revenue rose 19% on “Avatar” results and a rebounding advertising market. News Corp owns Dow Jones Newswires, publisher of this blog.

Intermune (ITMN) shares plunge in late trading after the FDA rejects its application for lung-disease drug pirfenidone and requests another clinical trial, something that is expensive and time consuming. ITMN off 78% to $9.94 in after-hours trading.

The latest spat between Disney (DIS) and Cablevision (CVC) prompts some to wonder whether the cable industry will ever embrace an a la carte pricing structure.

The long-running feud between TV broadcasters and cable operators has intensified in recent months. Disney and Cablevision struck a deal last night to restore ABC’s feed to Cablevision subscribers just as the Academy Awards were kicking off. Same sort of dispute occurred a few months ago as talks between Time Warner Cable (TWC) and News Corp (NWS NWSA) went down to the wire, with News Corp threatening to pull access to the Fox network. But the two sides agreed to a last-minute deal on New Year’s Day. (News Corp owns Dow Jones Newswires, publisher of this blog.)

Other disputes haven’t ended without major disputes. The Food Network and HGTV – owned by Scripps Networks (SNI) – were blacked out on Cablevision for three weeks in January before the sides could reach a deal.

The longer these battles between broadcasters and cable operators last, the more likely consumer outrage will increase and FCC “will have the cause it seems to have wanted to require a la carte pricing for cable,” says CUNY journalism professor Jeff Jarvis.

A la carte pricing essentially allows consumers to pick and choose which stations they will pay for instead of paying higher rates for access to hundreds (if not thousands) of stations that most people don’t even watch.

“Then both broadcasters and cable operators and their parent companies will get their just desserts,” he writes. “I will not pay for 90% of the channels I am forced to pay for now. That will reduce revenue to cable. It will mean that many channels will no longer be subsidized. It will kill marginal channels.”

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Apple (AAPL) shares getting a nice boost today after word circulates that it will hold a press conference next week to, presumably, introduce its much-hyped tablet device.

Apple, living up to its reputation, was light on details with its event invitation, only saying “Come see our latest creation.” The event’s scheduled for Jan. 27 in San Francisco.

Apple shares were recently up 4% at $214.02, and are closing in on their 52-week high, which certainly raises the question: How much more tablet-driven run for AAPL shares is left?

Certainly there’s “more room to go,” Kaufman Bros. analyst Shaw Wu says. “I don’t think tablet sales are all baked in yet.” How much higher is a matter of opinion. Wu has a $253 price target on Apple.

But now that the invitations have been sent and it seems almost likely that some sort of tablet will be unveiled at the end of January, MediaMemo blogger Peter Kafka embarks on the next round of speculation: who will jump on Apple’s tablet train?

He compiles a list of media companies that could potentially partner with Apple for its latest device. He believes New York Times (NYT) is “a good bet,” but doesn’t expect much from the big music labels.

Word also comes from WSJ that News Corp.’s (NWS NWSA) HarperCollins is already negotiating with Apple to bring some titles to the tablet. “Presumably other publishers – all of whom are eager for viable Kingle competitors – want in, too,” Kafka says.

As for video, Kafka says Disney (DIS) and its affiliates would be obvious partners.

“In part because (Apple CEO Steve) Jobs is both the company’s largest individual shareholder and a board member,” Kafka says. “But also because Disney CEO Bob Iger has made a point of trying out new digital distribution strategies.”

Should News Corp cram all this print into Bing?

The reported discussions between Microsoft (MSFT) and News Corp (NWS NWSA) concerning a partnership that would remove newspaper web content from Google (GOOG) is a bold move that likely has several hurdles to overcome.

Essentially, Microsoft would pay News Corp to exclusively feature its newspaper content on its online properties, which would bolster Bing’s presence in the search market. But this exclusivity would likely come at a steep price for Microsoft, and it’s not known how much the software giant would be willing to splurge on such a deal. And newspapers would also have to deal with the lost traffic that comes with avoiding Google.

“While there is a lot of mutual interest, it’s doubtful Microosft is going to pay to ‘rent’ a corpus of content that it does not own,” one source close to the situation told All Things D reporter Kara Swisher. “The economics are not there for anyone.”

News Corp owns Dow Jones, publisher of this blog.

The idea “merits high marks for creativity,” Newsosaur blogger Alan Mutter says, but also seems unlikely it’ll actually happen.

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Washington Post (WPO) is ending its hyperlocal news experiment, marking another blow to newspapers hoping to discover new business models amid a slowing advertising market and declining revenues.

WaPo will shut down LoudounExtra.com, a site that covered local news in Loudon County, Va., according to NYT’s Bits blog, as the publisher says it’s experiment wasn’t a “sustainable model.” Hyperlocal websites essentially give readers all the news and information they can imagine about their neighborhood and town.

From Bits:

The idea behind these sites is that while readers are abandoning major metro newspapers, they still care deeply about news that is happening down the street. Meanwhile, local businesses theoretically want to advertise to local readers, potentially offering a business model to pay for the local news.

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