JDfn Daily Digest - September 4, 2008
The productivity of U.S. non-farm businesses was revised higher in the second quarter than previously estimated. Productivity rose at a 4.3% annual rate in the quarter, revised from 2.2% in the earlier estimate a month ago. Unit labor costs -- a key inflation gauge - fell 0.5%, revised down from a gain of 1.3%, the biggest decrease since the third quarter of 2007.
The government announced that first-time jobless claims increased by the largest amount in five weeks, another sign that the U.S. labor markets are faltering. The number of workers filing for state unemployment benefits rose by 15,000 to a seasonally adjusted 444,000 for the week ended August 30th.
The ADP employment index said U.S. private-sector employment fell 33,000 in August. Analysts were looking for a drop of 25,000. The ADP index suggests U.S. nonfarm payrolls will fall about 13,000 in August. The August non-farm payrolls report will be released tomorrow morning.
The Institute for Supply Management said the services sector index rose to 50.6 in August from 49.2 in July. It beat economists' prediction of a reading of 50.0.
The European Central Bank and the Bank of England are keeping their key interest rates unchanged in the face of mounting inflation fears and slowing growth across Europe. The decisions of both banks to leave the benchmark rates at 4.25 percent in Europe and 5 percent in Britain were largely expected.
Boeing Co. (BA) aircraft assembly workers voted overwhelmingly to strike for an unprecedented second time in three years then learned both sides agreed to a 48-hour contract extension. Analysts say a strike could cost Boeing about $100 million per day in deferred revenue. During the last strike, one of the shortest in company history, Boeing was unable to deliver more than two dozen airplanes on schedule.
The share price of Lehman Brothers Holdings Inc. (LEH) traded higher as investors weighed reports that the embattled investment bank might find a fresh source of capital. South Korean news reports said the state-owned Korea Development Bank (KDB) proposed to buy a 25 percent stake in Lehman by forming a consortium with other South Korean banks. The offer is reportedly worth as much as $5.3 billion.
Caterpillar Inc. (CAT) announced it will open a new remanufacturing facility in Singapore as part of a plan to better serve the mining market in Asia. The new site, expected to fully operational by mid-2010, will become the regional source for remanufactured major components, such as mining-truck engines, transmissions, final drives and torque converters.
BP Plc (BP) and its billionaire partners in TNK-BP, Russia’s third-largest oil company, agreed to oust the chief executive officer and expand the board to resolve an eight-month dispute that threatened the British company's future in the country.
OPEC is expected to keep producing at a record pace as $109-a-barrel crude squeezes the global economy. The 13-nation Organization of Petroleum Exporting Countries is expected to reject calls from Venezuela and Iran to trim supplies at its Sept. 9th meeting in Vienna.
Tyson Foods Inc. (TSN) said it will offer 20 million shares of its Class A stock in a public offering. Tyson said it will grant the underwriters an option to buy up to another 3 million shares of its Class A stock to cover overallotments, if any.
American Airlines (AMR) has sent notices to 469 employees at airports in five U.S. cities that they may lose their jobs in November as the airline continues to cut back on flights. The letters were reportedly sent to gate and ticket agents, ramp workers, automotive mechanics and airport-based management and support staff.
Sony (SNE) says it is recalling 440,000 units of Vaio laptop computers worldwide due to faulty parts that could trigger overheating. Sony said the recalls involve 19 models of Vaio TZ laptop series manufactured between May 2007 and July 2008, including three export models.
Scheduled U.S. Economic Reports (Friday)
Non-Farm Payrolls (Aug), Unemployment Rate (Aug)
In Earnings News
Toll Brothers Inc. (TOL) lost $29.3 million, or 18 cents per share, in the most recent quarter. That's a reversal from a profit of $26.5 million, or 16 cents per share, a year earlier. It says its revenue fell 34 percent to $797.7 million from $1.21 billion, as revenue from completed contracts dropped.
Jackson Hewitt Tax Service Inc. (JTX) reported its fiscal 2009 first-quarter loss widened -- hurt by a severance-related charge and lease termination expense -- but matched Wall Street's estimates. The company reported a net loss of $20.5 million, or 72 cents per share. Analysts expected a loss of 69 cents per share.
Movado Group Inc. (MOV) reported its fiscal second-quarter profit slid 34 percent, hurt by a charge related to its expense reduction plan. The watch maker reported net income fell to $8.1 million, or 32 cents per share. Analysts predicted a profit of 41 cents per share.
Ciena Corp. (CIEN) predicted fiscal fourth-quarter revenue below analysts' expectations. Citing order delays from some service provider customers related to the economy, the company said it expects $190 million to $210 million in the quarter. Analysts are looking for $263 million in revenue.
Scheduled Earnings Reports (Friday)
National Semiconductor, Eon Communications, Shoe Pavilion, Fonar Corp
Stocks in the News
Wal-Mart (WMT) said its August sales at U.S. stores open at least one year rose 3%, excluding fuel.
JPMorgan Chase & Co. (JPM) is under Justice Department investigation over the sales of swaps to municipalities.
H&R Block (HRB) reported its first-quarter net loss narrowed to $132.7 million or 41 cents a share.
Hovnanian Enterprises’ (HOV) third-quarter after-tax loss for common-stock holders widened to $202.5 million or $2.67 a share.
American International (AIG) is considering forming a separate company to hold billions in securities that have dogged its balance sheet for the past several quarters.
Lazard Ltd. (LAZ), the New York financial adviser and asset manager, priced an offering by selling holders of 6.4 million Class A shares at $37.
Mothers Work Inc’s (MWRK) August sales at stores open at least a year rose 7.2%.
Guess Inc (GES) second-quarter profit rose 44% to $53.8 million, or 57 cents a share.
The government announced that first-time jobless claims increased by the largest amount in five weeks, another sign that the U.S. labor markets are faltering. The number of workers filing for state unemployment benefits rose by 15,000 to a seasonally adjusted 444,000 for the week ended August 30th.
The ADP employment index said U.S. private-sector employment fell 33,000 in August. Analysts were looking for a drop of 25,000. The ADP index suggests U.S. nonfarm payrolls will fall about 13,000 in August. The August non-farm payrolls report will be released tomorrow morning.
The Institute for Supply Management said the services sector index rose to 50.6 in August from 49.2 in July. It beat economists' prediction of a reading of 50.0.
The European Central Bank and the Bank of England are keeping their key interest rates unchanged in the face of mounting inflation fears and slowing growth across Europe. The decisions of both banks to leave the benchmark rates at 4.25 percent in Europe and 5 percent in Britain were largely expected.
Boeing Co. (BA) aircraft assembly workers voted overwhelmingly to strike for an unprecedented second time in three years then learned both sides agreed to a 48-hour contract extension. Analysts say a strike could cost Boeing about $100 million per day in deferred revenue. During the last strike, one of the shortest in company history, Boeing was unable to deliver more than two dozen airplanes on schedule.
The share price of Lehman Brothers Holdings Inc. (LEH) traded higher as investors weighed reports that the embattled investment bank might find a fresh source of capital. South Korean news reports said the state-owned Korea Development Bank (KDB) proposed to buy a 25 percent stake in Lehman by forming a consortium with other South Korean banks. The offer is reportedly worth as much as $5.3 billion.
Caterpillar Inc. (CAT) announced it will open a new remanufacturing facility in Singapore as part of a plan to better serve the mining market in Asia. The new site, expected to fully operational by mid-2010, will become the regional source for remanufactured major components, such as mining-truck engines, transmissions, final drives and torque converters.
BP Plc (BP) and its billionaire partners in TNK-BP, Russia’s third-largest oil company, agreed to oust the chief executive officer and expand the board to resolve an eight-month dispute that threatened the British company's future in the country.
OPEC is expected to keep producing at a record pace as $109-a-barrel crude squeezes the global economy. The 13-nation Organization of Petroleum Exporting Countries is expected to reject calls from Venezuela and Iran to trim supplies at its Sept. 9th meeting in Vienna.
Tyson Foods Inc. (TSN) said it will offer 20 million shares of its Class A stock in a public offering. Tyson said it will grant the underwriters an option to buy up to another 3 million shares of its Class A stock to cover overallotments, if any.
American Airlines (AMR) has sent notices to 469 employees at airports in five U.S. cities that they may lose their jobs in November as the airline continues to cut back on flights. The letters were reportedly sent to gate and ticket agents, ramp workers, automotive mechanics and airport-based management and support staff.
Sony (SNE) says it is recalling 440,000 units of Vaio laptop computers worldwide due to faulty parts that could trigger overheating. Sony said the recalls involve 19 models of Vaio TZ laptop series manufactured between May 2007 and July 2008, including three export models.
Scheduled U.S. Economic Reports (Friday)
Non-Farm Payrolls (Aug), Unemployment Rate (Aug)
In Earnings News
Toll Brothers Inc. (TOL) lost $29.3 million, or 18 cents per share, in the most recent quarter. That's a reversal from a profit of $26.5 million, or 16 cents per share, a year earlier. It says its revenue fell 34 percent to $797.7 million from $1.21 billion, as revenue from completed contracts dropped.
Jackson Hewitt Tax Service Inc. (JTX) reported its fiscal 2009 first-quarter loss widened -- hurt by a severance-related charge and lease termination expense -- but matched Wall Street's estimates. The company reported a net loss of $20.5 million, or 72 cents per share. Analysts expected a loss of 69 cents per share.
Movado Group Inc. (MOV) reported its fiscal second-quarter profit slid 34 percent, hurt by a charge related to its expense reduction plan. The watch maker reported net income fell to $8.1 million, or 32 cents per share. Analysts predicted a profit of 41 cents per share.
Ciena Corp. (CIEN) predicted fiscal fourth-quarter revenue below analysts' expectations. Citing order delays from some service provider customers related to the economy, the company said it expects $190 million to $210 million in the quarter. Analysts are looking for $263 million in revenue.
Scheduled Earnings Reports (Friday)
National Semiconductor, Eon Communications, Shoe Pavilion, Fonar Corp
Stocks in the News
Wal-Mart (WMT) said its August sales at U.S. stores open at least one year rose 3%, excluding fuel.
JPMorgan Chase & Co. (JPM) is under Justice Department investigation over the sales of swaps to municipalities.
H&R Block (HRB) reported its first-quarter net loss narrowed to $132.7 million or 41 cents a share.
Hovnanian Enterprises’ (HOV) third-quarter after-tax loss for common-stock holders widened to $202.5 million or $2.67 a share.
American International (AIG) is considering forming a separate company to hold billions in securities that have dogged its balance sheet for the past several quarters.
Lazard Ltd. (LAZ), the New York financial adviser and asset manager, priced an offering by selling holders of 6.4 million Class A shares at $37.
Mothers Work Inc’s (MWRK) August sales at stores open at least a year rose 7.2%.
Guess Inc (GES) second-quarter profit rose 44% to $53.8 million, or 57 cents a share.
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