WALL STREET JOURNAL: Increasing commodity prices, tough competition, little international exposure and slowing sales all mean that Tootsie Roll Industries (TR) is a troubled company that may be a takeover target, according to the Wall Street Journal. “I don’t see why Nestle (NSRGY) or Hershey (HSY) or Cadbury (CBY) wouldn’t own it,” said Richard Howard of Prospector Partners…FINANCIAL TIMES: The Financial Times reported that Citigroup (C) is developing a plan to merge its equity research operations with its institutional securities business. Under the plan, which is still being developed and may be changed, the investment bank would create a single unit housing all of its analysts, in an attempt to reduce its costs and provide more efficient service to its clients…NEW YORK POST: The New York Post reported that Deutsche Bank (DB) executive Stephane Farouze is suing the son and brother of U.S. Senator Joseph Biden. In the $10M lawsuit, Farouze alleges that Biden’s son Hunter and his brother James schemed to defraud him in a 2006 business deal. Farouze, who is now head of global derivatives at Deutsche, contends that the Bidens never paid him the price they had agreed upon for Farouze’s stake in hedge fund Paradigm Cos…BLOOMBERG: According to a person familiar with the situation, Bloomberg reported that Morgan Stanley (MS) told thousands of clients they won’t be able to withdraw money on their home-equity credit lines. The source said most of the clients had properties that have lost value…

Cephalon-CEPH: Shares still cheap given the pipeline potential - Barron’s Online
With new drugs driving sales and profits, Cephalon’s (CEPH) story should have a happy ending. Cephalon has launched two new drugs, Amrix a muscle relaxant, and Treanda for chronic lymphocytic leukemia, that could help reverse last year’s falling profits. And it aims to launch a third drug, Nuvigil, a longer-acting cousin to Provigil its sleeping disorder drug, in 2009. Shares have jumped 29% from a 52-week low in February, a sharp contrast to a withering S&P’s 500 and the stock prices of many larger drug makers. Yet despite the five-month rally, Cephalon’s multiple of 14.6x forward profits still looks cheap, a 26% discount to the biotechnology industry, and a slight discount to its projected annual long-term growth rate. Thus, offering backers the opportunity for more gains if the company can deliver robust profit growth. Since Cephalon released Q2 results last week, analysts at UBS, Jefferies & Co., S&P and Robert W. Baird hiked price targets. Lehman’s Jim Birchenough says, “Cephalon is in the very early innings, and the stock has lots of room to move.”

EIA Petroleum Status Report released on 8/6 at 10:35 AM

Morgan Stanley is reportedly freezing some home equity credit lines-Bloomberg
Morgan Stanley (MS) is preventing thousands of its clients from withdrawing funds from their home equity credit lines, an inside source said. Most of these clients’ properties have lost value, the source added.

Asian Markets Wrap-Up for Wednesday, August 6
Asian stocks soared because of declining oil prices and the hope that it will have a positive overall affect on economies. All markets gained except for Pakistan…JAPAN: The Nikkei 225 Stock Average advanced 340.23, or 2.6%, to 13,254.89, while the broader Topix index was up 29.56, or 2.4%, to 1,277.27. Mazda jumped 7.2% to Y594. Fuji Heavy Industries Ltd. gained 6.9% to Y572. Bridgestone (BRDCY) was up 6.8% to Y1,832. Canon (CAJ) added 5% to Y5,090. Sony Corp.(SNE) increased 5.7% to Y4,290. Sanyo Electric Co. (SANYY) soared 10% to Y228…CHINA: The CSI 300 Index increased 18.61, or 0.7%, to 2,721.69. Merchants Bank added 1.9% to 24.16 yuan. Citic Securities Co. rose 2.7% to 22.85 yuan. Air China increased 1.6% to 9.92 yuan. China Southern Airlines Co. (ZNH) added 1.7% to 7.77 yuan. China Petroleum & Chemical Corp. (SNP) was up 3.2% to 11.58 yuan. China Railway Group climbed 0.11 yuan, or 2%, to 5.61…AUSTRALIA: The S&P/ASX 200 Index advanced 148.70, or 3.1%, to 4,969.10. Harvey Norman Holdings was up 22 cents, or 6.9% to A$3.43.Commonwealth Bank of Australia rose A$2.60, or 6.3%, to A$43.85. National Australia Bank (NABZY) added A$1.25, or 5.1%, to A$26. Newcrest Mining (NCMGY) lost 91 cents, or 3.5%, to A$25.40.

Citigroup may be forced to spend billions in buybacks-WSJ
Citigroup (C), in talks with the New York State Attorney General’s office, other state securities regulators and the SEC over alleged wrongdoing in the auction rate securities market, may end up spending $5B in buybacks and face a fine of about $100M, reports the Wall Street Journal.

iPhone will be available to Indian users on August 22-Business Standard
Business Standard reports that on August 22, Apple’s (AAPL) iPhone will be made available to Indian mobile users. Apple has been tied to Airtel and Vodafone (VOD) to make the device available in the country. The iPhone will compete in India with phones by cell phone makers Nokia (NOK), Motorola (MOT) and Samsung.