WALL STREET JOURNAL: United Airlines parent UAL (UAUA) is intensifying merger talks with US Airways (LCC), and a deal could be reached in as soon as 10 days, inside sources said. FINANCIAL TIMES: Deutsche Telekom (DT) is reportedly thinking of buying Sprint Nextel (S). NEW YORK POST: Microsoft (MSFT) is considering a variety of ways of spending the $46B it was going to use to buy Yahoo (YHOO). Options include buying a social networking site or carrying out a huge share buyback. INDEPENDENT: Warren Buffett is looking to buy British companies. Buffett said he was examining the books of the Royal Bank of Scotland (RBS), which is trying to sell its insurance businesses, and the billionaire investor added that Berkshire Hathaway (BRK.A) is close to buying a mid-sized British company.

Asian Markets Wrap-Up for Monday, May 5
Asian stocks advanced. The markets in Japan, South Korea and Thailand were closed for holidays…CHINA: The CSI 300 Index was up 96.66, or 2.4%, to 4,055.78, as raw material producers led the way. Zhongjin Gold rose 5.96 yuan to 65.54. Shandong Gold added 11.90 yuan to 130.90. Both firm’s stocks were up by the 10% daily limit. Yunnan Copper was up 1.30 yuan, or 4.7%, to 29.20. Jiangxi Copper Co. rose 1.63 yuan, or 4.8%, to 35.84. Air China climbed 1.48 yuan to 16.31. China Eastern Airlines Corp. (CEA) advanced 1.07 yuan to 11.79. Both airlines were up by the 10% daily limit. Angang Steel Co. gained 0.89 yuan, or 4.1%, to 22.39 as it was reported that ArcelorMittal (MT) held talks with them about a venture in China…AUSTRALIA: Australian stocks were up. The S&P/ASX 200 Index rose 29.90, or 0.5%, to 5,730.30, led by BHP Billiton (BHP) and Rio Tinto (RTP). BHP was up 70 cents, or 1.6% percent, to A$44.12, and Rio Tinto gained 69 cents, or 0.5%, to A$138.95. Woodside (WOPEY) rose A$2.22, or 3.9%, to A$59.22. Autodom dropped 8 cents, or 53%, to 7 cents. Emerald Oil & Gas NL jumped 3 cents, or 25% to 15 cents. Leighton Holdings added A$1.13, or 2.4%, to A$48.42…HONG KONG: The Hang Seng Index retreated 57.07, or 0.2%, to 26,183.95. Li & Fung was down HK$2.25, or 6.8%, to HK$31.10. Cheung Kong (CHEUY) advanced $2.20, or 1.8%, to HK$126.70. Sun Hung Kai (SUHJY) climbed HK$1.80, or 1.3%, to HK$142.30. PetroChina (PTR) gained 2 cents, or 0.2%, to HK$12.10. Cnooc (CEO) was up 14 cents, or 1.1%, to HK$13.50.

BUCY coverage assumed with an Overweight, target $140@LEHM
Lehman expects BUCY to benefit from an upturn in mining equipment spending.

JOYG coverage assumed with an Overweight, target $88@LEHM
Lehman expects JOYG to benefit from continued strong copper and coal end markets.

Petrobras-PBR initiated with an Overweight@JPMS
JP Morgan believes pre-salt upside is not yet priced into shares and set a $137 target on the stock.

U.S.