Market Talk

Or, at least, Google was weighing on the market. Stocks certainly have taken off since our report at 10:30 in the a.m. Guess the markets put those disappointing earnings reports behind them, and are buying the Fed’s argument that there isn’t any inflation, at least any that’s going to last.

Good luck with that one.

Big show today. We covered Bank of America’s earnings, the SEC’s likely settlement with the banks over the issue of mortgage-backed securities, and the potential Groupon IPO.

- SEC reaches a $550 million settlement with Goldman Sachs. “The regulators get to claim victory while the Eloi get to continue their frolic atop the fluffy clouds of privilege and untouchability,” Josh Brown writes at The Reformed Broker. “Nobody admits wrongdoing, rightdoing or frankly, admits anything at all for that matter.”

- “This is surely a massive win for Goldman, whose entire business was at stake if it was found guilty of serious wrongdoing,” Reuters blogger Felix Salmon says. “The risk, of course, is that Goldman’s victory here will only serve to exacerbate its arrogance. Could the Squids of West Street become even more insufferable, now?”

- Business Insider has a list of winners and losers in the Goldman fraud settlement case.

- Lots of data to digest this morning, and most of it isn’t promising. Producer prices fall for third straight month and manufacturing data was weak. Headline jobless claims number looks good, but seasonal adjustments played a large role in the better-than-expected figure. “Due to the seasonal issues around the adjustments with GM doing the opposite of what they’ve historically done has made initial claims more difficult to analyze for a few weeks,” says Miller Tabak’s Peter Boockvar. “One thing though is for sure, up to 3 million workers will be falling off the extended claims rolls as benefits run out.”

- Naked Capitalism blogger Yves Smith relays an interesting nugget from HousingWire: for every one home currently on the market, two are waiting to be sold. “The scary part here is this estimate of market overhang refers only to foreclosed and distressed property,” she says. “There is another category of hidden inventory, people who would like to sell but aren’t even listing their houses.”

- Oil has finally stopped gushing into the Gulf. For now, as BP tests a new containment cap.

- Apple’s (AAPL) acquisition of mapping company Poly9 marks the second maps-focused company AAPL has bought in the last year. “In the short term, and with Poly9 specifically, Apple is buying its Google Earth,” Business Insider’s Dan Frommer says. “But more broadly, Apple is preparing for life after Google.”

- H-P’s (HPQ) Android tablet, which was supposed to hit the market in 4Q, has been delayed and won’t ship before the end of the year, Digital Daily blogger John Paczkowski reports, citing anonymous sources. Reason for the delay aren’t clear. “Perhaps, H-P has decided to focus its resources on the future webOS slate PC that its new Palm unit is developing,” he says. “Or perhaps the company is reconsidering its multi-OS tablet strategy in light of the Palm acquisition. After all, H-P has said repeatedly it is ‘doubling down’ on webOS.”

- “Even as lenders struggle to pull themselves out of the credit crisis, signs of a new and potentially dangerous infatuation with risky borrowers are emerging,” WSJ reports.

- Pretty pumped to see Carlos Beltran patrolling center field once again for the Mets.

Dow Jones’ Brendan Conway reports:

Traders had a field day with Goldman Sachs’ (GS) call options, including those that expire tomorrow, late in the session after SEC says a “significant announcement” is coming.

Traders rightly predicted it’s the long-awaited settlement.

Nearly two-thirds of the day’s 153,000 Goldman call contracts conveying the right to buy shares changed hands in the final half hour, notes OptionMonster’s Jon Najarian, who says activity “exploded” on the news.

July options expire tomorrow, meaning traders who picked up near-term contracts are anticipating an immediate burst for the shares. $150 calls expiring tomorrow make money if GS can rise 4% or higher Friday to breach $151.10.

Trading after the close is nearly there: GS is up 5.2% to $152.71 after hours.

If you’ve been mad as hell about the bank bailouts and feel the responsible parties have not been punished, then Jed Rakoff is probably your hero today.

Rakoff is the federal judge who rejected the proposed settlement between the SEC and Bank of America over the issue of what BofA told shareholders about the billion-dollar bonuses paid to Merrill Lynch employees.

As Dow Jones’ Suzanne Barlyn wrote this morning:

A federal judge’s surprising ruling may do more to change the Securities and Exchange Commission and Wall Street than all the recent hand-wringing and talk of reform.

Federal District Judge Jed S. Rakoff’s 13-page finding on Monday, in which he rejected a proposed settlement between the SEC and Bank of America, honed in on the fundamental issue of accountability. He did it in a way that, for instance, Inspector General H. David Kotz never achieves in nearly 500 pages of criticism over the SEC’s failure to catch Bernard Madoff.

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