JDfn Daily Digest - September 10, 2008
The Mortgage Bankers Association said the lowest 30-year mortgage rates since late May boosted demand for mortgage applications last week, particularly by homeowners looking to refinance existing loans. Average 30-year loan rates sank 0.33 percentage point to 6.06 percent, spurring a more than 15 percent jump in refinance applications.
Oil prices edged just slightly higher after OPEC vowed to abide by its quotas but decided not to take the more dramatic step of slashing production targets. Prices rose by more than a dollar after the Organization of Petroleum Exporting Countries meeting ended in the pre-dawn hours in Vienna, Austria, but quickly eased as investors digested the significance of the cartel's decision.
The International Energy Agency said global oil demand will be lower than expected this year and next as weak economic conditions in advanced economies offset growing demand in the developing world. The group said in its monthly report that global oil demand this year will average 86.8 million barrels per day, and 87.6 million barrels a day in 2009.
The American Petroleum Institute reported a drop of 21.6 million barrels in crude supplies for the week ended Sept. 5th, after an upward revision to the previous week's stocks. The Energy Department had reported a decline of 5.9 million barrels for the latest week. Motor gasoline supplies were down 3 million barrels and distillate supplies were up 3.5 million barrels.
The European Commission cut its growth outlook for the euro area for the rest of this year and predicted a recession for Germany, the area's largest economy. The 15-nation euro region's economy will probably stagnate this quarter after shrinking in the previous three months for the first time since the euro was introduced in 1999.
According to the Duke University/CFO Magazine survey of about 1,300 CFOs, chief financial officers are more optimistic about the direction of the U.S. economy, but remain worried about consumer demand and fragile credit markets. Compared with the previous quarter, 28.5 percent said they were more optimistic about the U.S. economy, up more than 7 percentage points from June.
Lehman Brothers (LEH) said it plans to sell a majority stake in its investment management division and spin off commercial real estate assets as the struggling U.S. investment bank fights to raise capital. The nation’s fourth-largest investment bank also reported a much-larger-than-expected third-quarter loss of $3.93 billion, hurt by $5.6 billion of net write-downs.
Disney (DIS) CEO Robert Iger said his business is proving resilient in the face of tough economic conditions although the crisis is not over yet. Iger said the media conglomerate had been helped "immeasurably" by its businesses outside the United States, and also by the relative weakness of the U.S. dollar, which had attracted international visitors to its U.S. theme parks.
Continental Airlines (CAL) announced that it intends to lay off 148 pilots beginning immediately. The pilots' union said the carrier initially sent 500 pilots furlough notices, but that number was later reduced.
ImClone Systems (IMCL) said that its special committee has determined that Bristol-Myers Squibb Co.'s $60-a-share cash bid is "inadequate." In a statement, ImClone Chairman Carl Icahn also said that "a large pharmaceutical company" has offered to buy ImClone for $70 a share in cash, subject to due diligence.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Sep 6th), Trade Balance (July), Import Price Index (Aug), Federal Budget (Aug)
In Earnings News
Oxford Industries Inc. (OXM) earned $1.5 million, or 9 cents per share, down from a year-ago profit of $8.7 million, or 49 cents per share. Analysts expected the company to earn 34 cents per share.
Stewart Enterprises Inc. (STEI) said that its fiscal third-quarter profit grew more than 12 percent due to stronger funeral revenue. For the quarter, the company earned $9.1 million, or 10 cents per share, compared with $8.1 million, or 8 cents per share, in the year-ago period.
Hooker Furniture Corp. (HOFT) announced its fiscal second-quarter fell by more than half amid a prolonged slump in the home market. Corporate profit fell 57 percent to $2.1 million or 18 cents per share, from $4.9 million, or 39 cents per share last year.
VeriFone Holdings Inc. (PAY) offered fiscal fourth-quarter net income guidance just short of what analysts are expecting. The company expects fiscal fourth-quarter earnings, excluding one-time items, between 33 cents and 36 cents per share. Analysts expect a profit of 37 cents per share.
FedEx Corp (FDX) said its fiscal first-quarter earnings will be better than originally forecast, as fuel prices continue to fall off their recent highs, sending its shares up five percent after the closing bell. The company said it now expects to report a profit of $1.23 a share for the quarter, up from its previous forecast of between 80 cents and $1 a share.
Scheduled Earnings Reports (Thursday)
Krispy Kreme Doughnuts, Campbell Soup, Global Crossing, Comarco, U.S. Global Investments, Morrison Supermarkets
Stocks in the News
Google (GOOG) announced that it will begin “masking” Internet user data gained through its new Web browser roughly a day after it's been collected.
Humana Inc (HUM) expects to lose about 308,000 members because its Medicare plan pricing was above premium benchmark rates in 34 regions.
General Motors (GM) traded higher after pictures of the much-hyped hybrid Chevrolet Volt hit the Internet ahead of schedule.
Texas Instruments (TXN) narrowed its third-quarter revenue outlook to $3.33 billion to $3.47 billion, from the previous range of $3.26 billion to $3.54 billion.
Logitech International (LOGI) will add $250 million to its stock-buyback plans, subject to clearance by the Swiss Takeover Board.
Freeport-McMoRan Copper & Gold (FCX) reduced its 2008 sales outlook for copper because of a "small-scale failure" at its Indonesian site.
Tyco International Ltd. (TYC) increased the quarterly dividend 33% to 20 cents a share, payable Nov. 3rd to holders of record Oct. 1st.
Oil prices edged just slightly higher after OPEC vowed to abide by its quotas but decided not to take the more dramatic step of slashing production targets. Prices rose by more than a dollar after the Organization of Petroleum Exporting Countries meeting ended in the pre-dawn hours in Vienna, Austria, but quickly eased as investors digested the significance of the cartel's decision.
The International Energy Agency said global oil demand will be lower than expected this year and next as weak economic conditions in advanced economies offset growing demand in the developing world. The group said in its monthly report that global oil demand this year will average 86.8 million barrels per day, and 87.6 million barrels a day in 2009.
The American Petroleum Institute reported a drop of 21.6 million barrels in crude supplies for the week ended Sept. 5th, after an upward revision to the previous week's stocks. The Energy Department had reported a decline of 5.9 million barrels for the latest week. Motor gasoline supplies were down 3 million barrels and distillate supplies were up 3.5 million barrels.
The European Commission cut its growth outlook for the euro area for the rest of this year and predicted a recession for Germany, the area's largest economy. The 15-nation euro region's economy will probably stagnate this quarter after shrinking in the previous three months for the first time since the euro was introduced in 1999.
According to the Duke University/CFO Magazine survey of about 1,300 CFOs, chief financial officers are more optimistic about the direction of the U.S. economy, but remain worried about consumer demand and fragile credit markets. Compared with the previous quarter, 28.5 percent said they were more optimistic about the U.S. economy, up more than 7 percentage points from June.
Lehman Brothers (LEH) said it plans to sell a majority stake in its investment management division and spin off commercial real estate assets as the struggling U.S. investment bank fights to raise capital. The nation’s fourth-largest investment bank also reported a much-larger-than-expected third-quarter loss of $3.93 billion, hurt by $5.6 billion of net write-downs.
Disney (DIS) CEO Robert Iger said his business is proving resilient in the face of tough economic conditions although the crisis is not over yet. Iger said the media conglomerate had been helped "immeasurably" by its businesses outside the United States, and also by the relative weakness of the U.S. dollar, which had attracted international visitors to its U.S. theme parks.
Continental Airlines (CAL) announced that it intends to lay off 148 pilots beginning immediately. The pilots' union said the carrier initially sent 500 pilots furlough notices, but that number was later reduced.
ImClone Systems (IMCL) said that its special committee has determined that Bristol-Myers Squibb Co.'s $60-a-share cash bid is "inadequate." In a statement, ImClone Chairman Carl Icahn also said that "a large pharmaceutical company" has offered to buy ImClone for $70 a share in cash, subject to due diligence.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Sep 6th), Trade Balance (July), Import Price Index (Aug), Federal Budget (Aug)
In Earnings News
Oxford Industries Inc. (OXM) earned $1.5 million, or 9 cents per share, down from a year-ago profit of $8.7 million, or 49 cents per share. Analysts expected the company to earn 34 cents per share.
Stewart Enterprises Inc. (STEI) said that its fiscal third-quarter profit grew more than 12 percent due to stronger funeral revenue. For the quarter, the company earned $9.1 million, or 10 cents per share, compared with $8.1 million, or 8 cents per share, in the year-ago period.
Hooker Furniture Corp. (HOFT) announced its fiscal second-quarter fell by more than half amid a prolonged slump in the home market. Corporate profit fell 57 percent to $2.1 million or 18 cents per share, from $4.9 million, or 39 cents per share last year.
VeriFone Holdings Inc. (PAY) offered fiscal fourth-quarter net income guidance just short of what analysts are expecting. The company expects fiscal fourth-quarter earnings, excluding one-time items, between 33 cents and 36 cents per share. Analysts expect a profit of 37 cents per share.
FedEx Corp (FDX) said its fiscal first-quarter earnings will be better than originally forecast, as fuel prices continue to fall off their recent highs, sending its shares up five percent after the closing bell. The company said it now expects to report a profit of $1.23 a share for the quarter, up from its previous forecast of between 80 cents and $1 a share.
Scheduled Earnings Reports (Thursday)
Krispy Kreme Doughnuts, Campbell Soup, Global Crossing, Comarco, U.S. Global Investments, Morrison Supermarkets
Stocks in the News
Google (GOOG) announced that it will begin “masking” Internet user data gained through its new Web browser roughly a day after it's been collected.
Humana Inc (HUM) expects to lose about 308,000 members because its Medicare plan pricing was above premium benchmark rates in 34 regions.
General Motors (GM) traded higher after pictures of the much-hyped hybrid Chevrolet Volt hit the Internet ahead of schedule.
Texas Instruments (TXN) narrowed its third-quarter revenue outlook to $3.33 billion to $3.47 billion, from the previous range of $3.26 billion to $3.54 billion.
Logitech International (LOGI) will add $250 million to its stock-buyback plans, subject to clearance by the Swiss Takeover Board.
Freeport-McMoRan Copper & Gold (FCX) reduced its 2008 sales outlook for copper because of a "small-scale failure" at its Indonesian site.
Tyco International Ltd. (TYC) increased the quarterly dividend 33% to 20 cents a share, payable Nov. 3rd to holders of record Oct. 1st.
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