Goldman Employees Reaped $2 Billion From 2008 Options Last Year (BBG) On Bush turf, Obama blames immigration woes on Republicans (Reuters) Tougher Internet rules to hit cable, telecoms companies (Reuters) Russia's Gazprom says can exempt rebel-held areas from Ukraine gas contract (Reuters) Allianz Says Pimco Seeing ‘Substantially’ Lower Outflows (BBG) Next Goal for Walmart Workers: More Hours (NYT) Merkel Faces Stepped-Up Dissent on Greek Bailout in Party (BBG) SEC Probes Companies’ Treatment of Whistleblowers (WSJ) 2-Year Trek From Turf to Table Delays Cheaper U.S. Beef (BBG) Turkish jets violate Greek air space (Kathimerini) Standard Chartered CEO Peter Sands Resigns After Unrest at Bank (WSJ) Oil rises above $62 after Saudi comments on demand (Reuters) China submarines outnumber U.S. fleet: U.S. admiral (Reuters) U.S., Israel Trade Barbs Over Iran Talks (WSJ) Euro-Area Consumers Help Recovery as Confidence Rises (BBG) Fly On The Wall Pre-Market Buzz WSJ * Morgan Stanley agreed to pay $2.6 billion to settle U.S. claims stemming from the sale of mortgage bonds, handing the Wall Street firm its biggest legal bill from the financial crisis. (http://on.wsj.com/1By9vMr) * The Nasdaq Composite Index's longest winning streak in more than five years ended with a whimper at the hands of a surprising culprit: a pullback in the world's most valuable company, Apple Inc. (http://on.wsj.com/1By7Ar9) * Top U.S. officials sharpened efforts to undermine Israeli Prime Minister Benjamin Netanyahu ahead of his visit to Washington next week as tensions rose over his push to scuttle a possible nuclear deal with Iran. (http://on.wsj.com/1By6Zpn) * Three Brooklyn, N.Y., men were arrested Wednesday and accused of plotting to join or aid Islamic State in Syria, offering a glimpse into the militant group's recruiting tactics-and how U.S. counterterrorism officials are fighting back.(http://on.wsj.com/1By86p9) * Citigroup Inc said on Wednesday the Treasury Department and California regulators are looking into its Banamex USA unit. (http://on.wsj.com/1By9NTE) * Hedge fund Standard General LP will lead the bidding at a bankruptcy auction of 1,700 or more RadioShack Corp stores, as the electronics retailer tries to save some of its struggling business. (http://on.wsj.com/1ByaMmG) * The Federal Communications Commission's plan for regulating how Internet providers treat traffic on their networks is expected to unleash a number of court challenges and put pressure on Congress to settle the legal morass through legislation. (http://on.wsj.com/1Byb3pC) FT Morgan Stanley has agreed to settle with the U.S. Department of Justice and pay $2.6 billion over allegations of mis-selling mortgage backed securities before the global financial crisis. Google has decided to unify its two different European units into one, after years of local setbacks and legal challenges have grown into company-wide issues. Matt Brittin, who was heading the company's northern and west-European arm will now head the combined unit and will be based in London. U.S. drugmaker Pharmacyclics is considering a sale that could fetch it about $19 billion, according to people familiar with the matter. Johnson & Johnson is said to be one of the interested buyers, one of the people said. A little known company called Smartflash has won a legal battle against iPhone-maker Apple Inc, that would make the Cupertino-based company cough up $532.9 million in damages. Smartflash, founded in 2000, sued Apple in 2013 claiming the company had infringed on its patents through iTunes and the App Store. NYT * This week, Google Inc, the search giant, is expected to propose new headquarters - a series of canopylike buildings from Heatherwick Studio, a London design firm known for works like the fiery caldron at the 2012 Olympics, and Bjarke Ingels, a Danish architect known for his innovative designs. (http://nyti.ms/1ArgHYd) * Morgan Stanley said on Wednesday that it had reached a $2.6 billion settlement with the Justice Department over the sale of mortgage securities before the financial crisis. (http://nyti.ms/1DVDZ9J) * With some progress on the hourly wage front with Wal-Mart Stores Inc, labor activists are highlighting another longstanding demand: more hours - and more consistent hours - for hourly-wage workers, something they say will make as much a difference to workers' pocketbooks as an increase in wages. (http://nyti.ms/1LKpvwe) * Hewlett-Packard CO is in talks to buy Aruba Networks Inc, a maker of WiFi access equipment for businesses, people briefed on the matter said on Wednesday. (http://nyti.ms/1LGCTQ5) * Silicon Valley has lately come to the realization that it is not the meritocracy it has long pretended to be - at least not for women and most minorities. Now, after years of ignoring the issue, and some serious prodding by the likes of the Reverend Jesse Jackson, tech companies say they will do something about the hiring gap between white and Asian men and nearly everyone else. (http://nyti.ms/1wgWoaG) * First in Detroit, then in Stockton, California, and now in New Jersey, judges and other top officials are challenging the widespread belief that public pensions are untouchable. (http://nyti.ms/1LKq60K) * Joseph Baratta, the head of private equity at the Blackstone Group LP, the biggest alternative investment firm, said at a conference in Berlin on Tuesday that the firm was speaking with large investors about a new investment structure that would aim for lower returns over a longer period of time. (http://nyti.ms/180tkOC) Canada THE GLOBE AND MAIL ** Ford Motor Co will add 400 new jobs in Oakville, Ontario, to assemble the redesigned Ford Edge crossover vehicle for global markets in another sign that healthy vehicle sales are boosting the auto sector in Canada. (http://bit.ly/1BfYjCw) ** Ontario is expanding funding of one of the world's most expensive drugs to cover sufferers of a life-threatening genetic disease that damages vital organs, a move that counts as a victory for patients but raises questions about how provincial governments decide which high-priced medications to pay for. (http://bit.ly/1LJOFuS) ** Bombardier Inc is banking on the C Series to carry aerospace revenue over the next two decades as its CRJ regional jets fade into history. But even as the larger - and more popular - version of the plane is about to make its maiden flight, major hurdles remain in the company's path. (http://bit.ly/1AapLMh) NATIONAL POST ** Start-up airline Canada Jetlines Ltd is in strategic talks with Halifax-based CanJet Airlines, as well as multiple other companies that could either merge with or take a stake in the fledgling no-frills carrier, the Financial Post has learned. (http://bit.ly/1DtkDrl) ** Bloomberg Television is set to launch in Canada this spring, sources confirmed to the Financial Post, with an announcement of the news expected as early as Thursday. (http://bit.ly/1wgDJfk) ** The Irving family, one of Canada's richest and New Brunswick's most powerful, appears to be at odds over the routing of TransCanada Corp's proposed Energy East pipeline. J.D. Irving Ltd, the family-owned forest products, logistics and shipbuilding company headed by James Irving and sons James and Robert, has filed an application with the National Energy Board saying it is "vitally concerned" about the portion of the pipeline that would pass through its Crown-leased lands in New Brunswick. (http://bit.ly/1MUj0bD) Hong Kong SOUTH CHINA MORNING POST -- Macau's gross gaming revenue this month is set to drop 50 percent from a year ago, analysts say, as initial data from the first few days of the Lunar New Year, a peak season for mainland gamblers, showed a much weaker performance than anticipated. (http://bit.ly/17Zoq4y) -- Tourists from the mainland made more than five million trips abroad during the Lunar New Year holiday, a 10 percent rise on the same period last year. China National Tourism Administration said the increase was partly prompted by favourable exchange rates and eased visa policies for Chinese visitors. (http://bit.ly/1FuBgmg) THE STANDARD -- Details of a government proposal for a Future Fund of at least HK$220 billion ($28.37 billion) will be unveiled on Monday. In committing to the savings war chest, Financial Secretary John Tsang said it can be used for infrastructure projects, even when budgets are in deficit, as well as to reduce the impact from an aging population. (http://bit.ly/1Et8lkB) -- Beijing has already reached a decision on the number of times a person with a multiple-entry permit may visit Hong Kong, according to local NPC deputy Michael Tien Puk-sun. In a radio interview, Tien said Beijing and the Hong Kong government agreed on 52 visits last year but had suspended implementing the quota due to dissatisfaction with the city's retail sector. (http://bit.ly/1alTlcZ) HONG KONG ECONOMIC JOURNAL -- The number of small- to medium-size flats in Hong Kong sold by mainlanders accounted for 4.6 percent of the total transaction volume in 2014, up 1.1 percentage point from the previous year, according to Centaline Property Agency research director Wong Leung Sing, suggesting mainlanders are unloading their assets in the red hot local property market. MING PAO DAILY -- China's retail sales and restaurants turnover during the first six days of the Lunar New Year amounted to 678 billion yuan ($108.32 billion), up 11 percent from the same period a year ago, in their slowest growth since 2010, according to data from the Ministry of Commerce. Britain The Times SHORT-SELLERS CASH IN AS AO WORLD TUMBLES Short-sellers in AO World reaped 26 million pounds ($40.37 million) after the former stock market darling issued a shock profits warning nearly a year to the day after it floated, sending its value crashing by 358 million pounds. (thetim.es/1zJdf7I) HSBC MAN'S 12-YEAR NON-DOM TAX PERKS HSBC's chief executive enjoyed significant "non-dom" tax breaks despite living in Britain for more than a decade and educating his children here, MPs heard yesterday. (thetim.es/1zJdteV) The Guardian ALMOST 700,000 PEOPLE IN UK HAVE ZERO-HOURS CONTRACT AS MAIN JOB Nearly 700,000 people are on zero-hours contracts in their main job - a rise of more than 100,000 on a year ago - according to new official figures. (bit.ly/1vyV6wH) HSBC SCANDAL CAUSED HORRIBLE DAMAGE TO BANK'S REPUTATION, SAYS CHAIRMAN HSBC is suffering "horrible reputational damage" as a result of the exposure of the systematic aiding of tax avoidance in its Swiss subsidiary, the bank's chairman has conceded before MPs. (bit.ly/1MSPyTj) The Telegraph BRITAIN TO LEAD THE WORLD IN ISLAMIC FINANCE London has set its sights on becoming the world centre for the Islamic finance industry, according to the UK's foreign office minister for the Middle East. (bit.ly/1DbZzTO) ODEON CINEMAS TO BE SOLD LATER THIS YEAR FOR UP TO 1 BLN STG Private equity group Terra Firma is planning to launch the sale of its European cinema chain Odeon & UCI Group toward the end of the year in a potential 1 billion pounds deal, its chairman has revealed. (bit.ly/1DV7Yi2) Sky News RBS CHIEF MCEWAN TO FORFEIT 1 MLN STG 'ALLOWANCE' Ross McEwan, the chief executive of Royal Bank of Scotland , is to hand back a 1 million pounds chunk of his 2015 pay package, cementing his status as the lowest-paid bank boss in the FTSE-100. (bit.ly/1LEqlJ1) FORMER TESCO EXEC SCOULER TO JOIN TALKTALK John Scouler, one of the executives who left Tesco PLC in the wake of its 263 million pounds profits overstatement, is to take on a senior role at TalkTalk, the home communications group. (bit.ly/1AM0lsj) The Independent SUPERGROUP FINANCE CHIEF REMOVED FROM POSITION AFTER BEING DECLARED BANKRUPT SuperGroup, known for its Superdry branded clothing, has been forced to oust Finance Director Shaun Wills after he was declared personally bankrupt. (ind.pn/1JM0jYu) MORRISONS NAMES NEW CHIEF EXECUTIVE - FORMER TESCO ASIA OPERATIONS BOSS DAVID POTTS WM Morrison has named its new chief executive - and the man in question actually started his career as a shelf stacker at rival Tesco. David Potts will replace former boss Dalton Philips, who was sacked last month. (ind.pn/1FWWpt3) Fly on the Wall Pre-market Buzz ECONOMIC REPORTS Domestic economic reports scheduled for today include:Consumer Price Index for January at 8:30--consensus down 0.6%Durable goods orders for January at 8:30--consensus up 1.6%Jobless claims for week of February 21 at 8:30--consensus 290KFHFA house price index for December at 9:00--consensus up 0.5%EIA natural gas storage change for week of Feb. 20 at 10:30Kansas City Fed manufacturing index for February at 11:00--consensus 3 ANALYST RESEARCH Upgrades AcelRx (ACRX) upgraded to Buy from Neutral at MizuhoAllianceBernstein (AB) upgraded to Buy from Neutral at BofA/MerrillAmerican Express (AXP) upgraded to Buy from Hold at Deutsche BankColumbia Property (CXP) upgraded to Neutral from Sell at GoldmanGruma (GMK) upgraded to Overweight from Equal Weight at BarclaysIsle of Capri (ISLE) upgraded to Outperform from Neutral at MacquarieT-Mobile (TMUS) upgraded to Buy from Neutral at CitigroupVulcan Materials (VMC) upgraded to Outperform from Sector Perform at RBC Capital Downgrades Bill Barrett (BBG) downgraded to Neutral from Buy at SunTrustCablevision (CVC) downgraded to Sell from Hold at Brean CapitalChesapeake (CHK) downgraded to Hold from Buy at Johnson RiceChesapeake (CHK) downgraded to Neutral from Buy at UBSCommerce Bancshares (CBSH) downgraded to Equal Weight from Overweight at BarclaysDineEquity (DIN) downgraded to Neutral from Overweight at JPMorganDollar Tree (DLTR) downgraded to Hold from Buy at StifelLamar Advertising (LAMR) downgraded to Neutral from Buy at CitigroupLumber Liquidators (LL) downgraded to Hold from Buy at Evercore ISIPacira (PCRX) downgraded to Underperform from Neutral at BofA/MerrillPall Corp. (PLL) downgraded to Neutral from Buy at BofA/MerrillParamount Group (PGRE) downgraded to Sell from Neutral at GoldmanState Street (STT) downgraded to Neutral from Buy at CitigroupState Street (STT) downgraded to Neutral from Outperform at Credit SuisseSuez Environnement (SZEVY) downgraded to Neutral from Buy at CitigroupVerisk Analytics (VRSK) downgraded to Market Perform from Outperform at Raymond JamesWaddell & Reed (WDR) downgraded to Neutral from Buy at BofA/Merrill Initiations 1st Source (SRCE) initiated with a Neutral at DA DavidsonCredit Suisse (CS) initiated with an Underperform at Exane BNP ParibasDeutsche Bank (DB) initiated with an Underperform at Exane BNP ParibasDice Holdings (DHX) initiated with a Neutral at B. RileyExpedia (EXPE) initiated with an Underweight at Morgan StanleyGroupon (GRPN) initiated with an Equal Weight at Morgan StanleyGrubHub (GRUB) initiated with an Overweight at Morgan StanleyHomeAway (AWAY) initiated with an Underweight at Morgan StanleyIAC (IACI) initiated with an Underweight at Morgan StanleyLinkedIn (LNKD) initiated with an Overweight at Morgan StanleyMeredith (MDP) initiated with a Market Perform at Wells FargoMonster Worldwide (MWW) initiated with a Buy at B. RileyPriceline (PCLN) initiated with an Equal Weight at Morgan StanleyUBS (UBS) initiated with an Underperform at Exane BNP ParibasYelp (YELP) initiated with an Overweight at Morgan Stanley COMPANY NEWS Morgan Stanley (MS) agreed to $2.6B mortgage settlement with U.SSears (SHLD) said targeting REIT formation in May or JuneRBS (RBS) confirmed Howard Davies to succeed Philip Hampton as chairmanRBS (RBS) announced sale of North American loan portfolio to Mizuho (MFG)Standard Chartered (SCBFF) named William Winters as CEO, effective in JuneViacom's (VIA) Nickelodeon announced launch of Noggin mobile subscription serviceTown Sports International Holdings (CLUB) said it hired Deutsche Bank to explore strategic alternatives, including a possible sale of the companyAvago Technologies (AVGO) and Emulex Corporation (ELX) announced that they have entered into a definitive agreement under which Avago will acquire Emulex in an all-cash transaction valued at approximately $606M, or $609M net of cash and debt acquired EARNINGS Companies that beat consensus earnings expectations last night and today include:American Woodmark (AMWD), Mitel (MITL), Progressive Waste (BIN), Magellan Health (MGLN), Carter's (CRI), Western Refining Logistics (WNRL), AES Corp. (AES), Swift Energy (SFY), Catamaran (CTRX), CIBC (CM), Transocean (RIG), Tronox (TROX), Aegion (AEGN), Orion Marine (ORN), AB InBev (BUD), MGE Energy (MGE), TeleTech (TTEC), Wright Medical (WMGI), EPAM Systems (EPAM), CoStar Group (CSGP), Sturm, Ruger (RGR), Southwest Gas (SWX), Quality Distribution (QLTY), Ferro (FOE), California Water Service (CWT), Concho Resources (CXO), Chemtura (CHMT), WPX Energy (WPX), Kadant (KAI), Kennedy Wilson (KW), Solar Senior Capital (SUNS), FARO Technologies (FARO), Babcock & Wilcox (BWC), Marchex (MCHX), eHealth (EHTH), China Cord Blood (co), LeMaitre (LMAT), Anika Therapeutics (ANIK), Halcon Resources (HK), Monarch Casino (MCRI), Medivation (MDVN), Globus Medical (GMED), Avago (AVGO), Applied Optoelectronics (AAOI), Antero Resources (AR), Sprouts Farmers Markets (SFM), Carriage Services (CSV), STAAR Surgical (STAA), BioMarin (BMRN), Gulfport Energy (GPOR), L Brands (LB), DexCom (DXCM), Cempra (CEMP), AmSurg (AMSG) Companies that missed consensus earnings expectations include:Olympic Steel (ZEUS), NTELOS (NTLS), Higher One (ONE), ACI Worldwide (ACIW), Hoegh LNG (HMLP), Northern Tier (NTI), Ballard Power (BLDP), Transocean Partners (RIGP), Volaris (VLRS), Assured Guaranty (AGO), Seadrill (SDRL), UIL Holdings (UIL), Ensco (ESV), North Atlantic Drilling (NADL), Assured Guaranty (AGO), Approach Resources (AREX), PGT, Inc. (PGTI), Great Plains Energy (GXP), RLJ Lodging Trust (RLJ), Westar Energy (WR), Legacy Reserves (LGCY), LHC Group (LHCG), Martin Midstream Partners (MMLP), Churchill Downs (CHDN), Oasis Petroleum (OAS), CafePress (PRSS), Endologix (ELGX), Intralinks (IL), DryShips (DRYS), Erickson (EAC), Ocean Rig UDW (ORIG), MercadoLibre (MELI), Penn Virginia (PVA), Ardelyx (ARDX), Clovis (CLVS), bluebird bio (BLUE) Companies that matched consensus earnings expectations include:Vical (VICL), Popeyes (PLKI), Workday (WDAY), Salesforce.com (CRM) NEWSPAPERS/WEBSITES Aruba Networks (ARUN) in talks to be acquired by Hewlett-Packard (HPQ), Bloomberg reportsYouTube (GOOG) revenue growing but did not contribute to earnings, WSJ reportsLenovo (LNVGY) website taken down by cyberattack, WSJ reportsGoogle (GOOG) considering making investment in Jawbone, Re/code reportsRBS (RBS) to greatly reduce investment bank unit, Financial Times reportsBoeing (BA), FedEx (FDX) oppose punishing Gulf airlines for alleged subsidies, Reuters saysGoogle (GOOG) unifying EU units amid regulatory pressures, FT says SYNDICATE AMAG Pharmaceuticals (AMAG) 3.98M share Secondary priced at $44.00Boot Barn (BOOT) 5.4M share Secondary priced at $23.50Celldex (CLDX) 7.25M share Secondary priced at $24.00CollabRx (CLRX) 2.36M share Spot Secondary priced at $1.27Enbridge Energy (EEP) files automatic mixed securities shelfLion Biotechnologies (LBIO) files to sell common stock, no amount givenMacquarie Infrastructure (MIC) 5.31M share Secondary priced at $80.00Newfield Exploration (NFX) files to sell 18M shares of common stockNoble Energy (NBL) files to sell 21M shares of common stockPlains All American (PAA) files to sell 21M shares of common stockPlatform Specialty Products (PAH) files to sell 22.1M shares of common for holdersRelypsa (RLYP) 3.4M share Secondary priced at $38.50Rovi (ROVI) files to sell $300M in convertible senior notes due 2020Sovran Self Storage (SSS) files to sell 1M shares of common stockStrategic Hotels (BEE) enters $250M equity distribution agreementWashingtonFirst Bankshares (WFBI) files to sell 8,898 shares of preferred for holdersWilliams Partners (WPZ) files to sell $1B of common units representing limited partner