Pay Czar, Emerson: Tuesday's Headlines

NEW YORK (TheStreet) -- Here are the top stock market headlines for the morning of Tuesday, October 6, 2009.

Tuesday's Early Headlines

• Pay Czar Looks to Cut Cash Salaries. - The Wall Street Journal reports that Kenneth Feinberg, the Obama administration's pay czar, plans to cut the annual cash salaries for many of the top employees at firms receiving large sums of government aid. Feinberg is planning to shift a chunk of an employee's annual salary into stock that can't be accessed for several years, the report said, citing people familiar with the matter. By mid-October, Feinberg is expected to issue his determination on compensation packages for 175 of the most-highly compensated executives and employees at the seven firms he oversees, including American International Group (AIG Quote), Bank of America (BAC Quote), Citigroup (C Quote) and General Motors.
• Saudi Bank Chief Denies Plans to Replace Dollar in Oil Trade. - Reuters reports that Saudi Arabia's Central Bank Chief Muhammad al-Jasser denied a report in Britain's The Independent that Gulf Arab states are in secret talks to replace the U.S. dollar in the trading of oil. The Independent quoted unidentified sources as saying Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in the trading of oil, the report said.
• Slowing Inflation Problematic: Fed's Dudley. - Bloomberg reports that New York Federal Reserve President William Dudley said that the risk of slowing inflation is "problematic" for the economy and that interest rates should stay low for a while to ensure a "robust recovery."
• Goldman Talks With CIT Group Over Loan. - The Wall Street Journal reports that Goldman Sachs (GS Quote) plans to amend terms of a $3 billion loan it had given to CIT Group (CIT Quote). The investment bank extended the funding to CIT in June 2008, according to regulatory filings. The 20-year contract, which was put in place as the credit markets froze, calls for CIT to pay Goldman 2.85% of the maximum amount lent, which would come to about $85.5 million annually for the first 10 years of the agreement, the report said.
• Emerson to Acquire Avocent for $1.2 Billion - Emerson Electric (EMR Quote) said it will acquire Avocent (AVCT Quote) in an all-cash tender offer of $25 a share, or approximately $1.2 billion total. The offer represents a 21% premium to Monday's closing price for Avocent shares.
• Holiday Sales Decline Expected. - The National Retail Federation said Tuesday that it is predicting a 1% decline in sales to $437.6 billion during the 2009 holiday shopping season. While that forecast may not seem very cheerful, it would be better than the 3.4% decline during the 2008 holiday season.
• Australia Hikes Interest Rates. - In a surprise move, the Reserve Bank of Australia Tuesday raised its cash rate to 3.25% from 3%, making Australia the first major economy to raise the cost of borrowing since the start of the global crisis.

Tuesday's Earnings Roundup

• Pepsi Bottling Group (PBG Quote) reported third-quarter earnings of $254 million, or $1.14 a share, down from a year ago. Excluding items, the company reported a profit of $1.06 a share. Revenue fell from a year ago to $3.6 billion. Analysts expected Pepsi Bottling to notch a profit of $1.05 a share on revenue of $3.73 billion, according to Thomson Reuters
• After Tuesday's closing bell, Yum! Brands (YUM Quote) will release its own quarterly report. The company, which operates fast-food chains like KFC and Taco Bell, is expected to report a profit of 58 cents a share on sales of $2.79 billion, according a Thomson Reuters poll of analysts.