JDfn Daily Digest - August 29, 2008
Real consumer spending fell 0.4% in July. This is the biggest drop since June 2004. Nominal spending rose 0.2%. Personal income fell 0.7% in July, the biggest drop since August 2005. Real disposable incomes fell 1.7% in July. This is the second straight large monthly drop in the wake of the government stimulus payments. As anticipated U.S. July PCE core inflation was up 0.3%.
Consumer sentiment improved in August. The index rose to 63 in late August, compared with 61.7 earlier in the month, and 61.2 in July. The index reached a 28-year low in June. Economists were expecting the August result to reach 62.0.
Business activity in the Chicago region picked up in August. The Chicago purchasing managers index rose slightly to 57.9 in August from 50.8 in July. Readings above 50 indicate overall business expansion. The gain was unexpected. Economists were generally expecting a small decline in the index.
Crude-oil futures rose today, gaining support from ongoing concerns that Tropical Storm Gustav holds the potential to damage critical energy infrastructure in the Gulf of Mexico. Oil traders are concerned that Gustav might potentially strengthen into a category four or five hurricane. Other forecasts say it holds the potential to reach category-three status.
Microsoft Corp. (MSFT) is buying a Munich, Germany-based Web comparison shopping site and its parent company for about $486 million in cash. Microsoft says the acquisition of Greenfield Online Inc., which owns Ciao, will boost its search presence in Europe.
The European Competition Commission said it has opened an antitrust probe into a revenue-sharing joint venture between British Airways, American Airlines and Iberia. The companies said the deal would depend on getting clearance from European and U.S. regulators, but they sounded confident it would be approved.
News Corp (NWS) is planning to launch a satellite television channel in Japan, with broadcasting slated to begin in 2011. News Corp. is considering establishing a new wholly-owned subsidiary, in addition to its local unit News Broadcasting Japan Co., through which it will apply for a broadcasting license.
Overland Storage Inc. (OVRL) said it will cut 53 jobs, or 13 percent of its workforce, and reduce spending in an effort to return to profitability. The company expects to save $10 million a year.
Scheduled U.S. Economic Reports (Next Week)
ISM Index, Construction Spending, Factory Orders, Beige Book, ADP Employment Report, Productivity, Non-Farm Payrolls
In Earnings News
Dell (DELL) said it earned $616 million, or 31 cents a share, on revenue of $16.43 billion, compared with a profit of $746 million, or 33 cents a share, on $14.78 billion in sales in the year-ago quarter. Analysts had forecast Dell to earn 36 cents a share on $15.97 billion in sales.
Novell Inc. (NOVL) posted a widened loss for its latest quarter due to a loss on securities. Novell lost $15 million, or 4 cents per share, in the fiscal third quarter, compared with a loss of $4 million, or 1 cent per share, in the same quarter a year ago. Analysts expected earnings of 5 cents per share.
Dollar Financial Corp. (DLLR) reported a 19.9 percent rise in its fiscal fourth-quarter profit, helped by higher international revenue, but forecast 2009 earnings below estimates. For the quarter, the company posted net income of $12.3 million, or 50 cents per share. Analysts were expecting 58 cents.
Scheduled Earnings Reports (Next Week)
Staples, H&R Block, Dollar General, Movado, Casey’s General Stores, America’s Car Mart, Ciena, Jackson Hewitt, Toll Brothers, Joseph A Bank, National Semiconductor
Stocks in the News
PetSmart Inc (PETM) reported its fiscal second-quarter net income fell to $37.2 million or 30 cents a share.
Wendy’s International (WEN) will place its double-stack cheeseburger and two other sandwiches on its 99-cent menu, its latest effort to attract customers in the weak economy.
SLM Corp (SLM) better known as Sallie Mae, may have its ratings downgraded by Moody's Investors Service following a review.
Fannie Mae (FNM) and Freddie Mac (FRE) are scheduled to sell three- and six-month bills.
Caterpillar Inc (CAT) expects 2008 sales and revenue to exceed $50 billion, up from its previous forecast of about $50 billion.
Fortune Brands (FO) said it will get $230 million from Pernod Ricard to end a distribution deal early, and bought the Cruzan Rum brand from Pernod.
Consumer sentiment improved in August. The index rose to 63 in late August, compared with 61.7 earlier in the month, and 61.2 in July. The index reached a 28-year low in June. Economists were expecting the August result to reach 62.0.
Business activity in the Chicago region picked up in August. The Chicago purchasing managers index rose slightly to 57.9 in August from 50.8 in July. Readings above 50 indicate overall business expansion. The gain was unexpected. Economists were generally expecting a small decline in the index.
Crude-oil futures rose today, gaining support from ongoing concerns that Tropical Storm Gustav holds the potential to damage critical energy infrastructure in the Gulf of Mexico. Oil traders are concerned that Gustav might potentially strengthen into a category four or five hurricane. Other forecasts say it holds the potential to reach category-three status.
Microsoft Corp. (MSFT) is buying a Munich, Germany-based Web comparison shopping site and its parent company for about $486 million in cash. Microsoft says the acquisition of Greenfield Online Inc., which owns Ciao, will boost its search presence in Europe.
The European Competition Commission said it has opened an antitrust probe into a revenue-sharing joint venture between British Airways, American Airlines and Iberia. The companies said the deal would depend on getting clearance from European and U.S. regulators, but they sounded confident it would be approved.
News Corp (NWS) is planning to launch a satellite television channel in Japan, with broadcasting slated to begin in 2011. News Corp. is considering establishing a new wholly-owned subsidiary, in addition to its local unit News Broadcasting Japan Co., through which it will apply for a broadcasting license.
Overland Storage Inc. (OVRL) said it will cut 53 jobs, or 13 percent of its workforce, and reduce spending in an effort to return to profitability. The company expects to save $10 million a year.
Scheduled U.S. Economic Reports (Next Week)
ISM Index, Construction Spending, Factory Orders, Beige Book, ADP Employment Report, Productivity, Non-Farm Payrolls
In Earnings News
Dell (DELL) said it earned $616 million, or 31 cents a share, on revenue of $16.43 billion, compared with a profit of $746 million, or 33 cents a share, on $14.78 billion in sales in the year-ago quarter. Analysts had forecast Dell to earn 36 cents a share on $15.97 billion in sales.
Novell Inc. (NOVL) posted a widened loss for its latest quarter due to a loss on securities. Novell lost $15 million, or 4 cents per share, in the fiscal third quarter, compared with a loss of $4 million, or 1 cent per share, in the same quarter a year ago. Analysts expected earnings of 5 cents per share.
Dollar Financial Corp. (DLLR) reported a 19.9 percent rise in its fiscal fourth-quarter profit, helped by higher international revenue, but forecast 2009 earnings below estimates. For the quarter, the company posted net income of $12.3 million, or 50 cents per share. Analysts were expecting 58 cents.
Scheduled Earnings Reports (Next Week)
Staples, H&R Block, Dollar General, Movado, Casey’s General Stores, America’s Car Mart, Ciena, Jackson Hewitt, Toll Brothers, Joseph A Bank, National Semiconductor
Stocks in the News
PetSmart Inc (PETM) reported its fiscal second-quarter net income fell to $37.2 million or 30 cents a share.
Wendy’s International (WEN) will place its double-stack cheeseburger and two other sandwiches on its 99-cent menu, its latest effort to attract customers in the weak economy.
SLM Corp (SLM) better known as Sallie Mae, may have its ratings downgraded by Moody's Investors Service following a review.
Fannie Mae (FNM) and Freddie Mac (FRE) are scheduled to sell three- and six-month bills.
Caterpillar Inc (CAT) expects 2008 sales and revenue to exceed $50 billion, up from its previous forecast of about $50 billion.
Fortune Brands (FO) said it will get $230 million from Pernod Ricard to end a distribution deal early, and bought the Cruzan Rum brand from Pernod.
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