JDfn Daily Digest - September 12, 2008

The Labor Department reported that U.S. producer prices fell a steeper than expected 0.9% in August, helped by lower energy costs. The decline follows on the heels of a sharp 1.2% gain in July. Excluding food and energy, "core" producer prices rose 0.2% last month. Analysts were predicting a decrease of 0.4% in overall PPI and a 0.2% increase in the core rate. Producer prices are up 9.6% over the past 12 months.

Total sales at U.S. retailers in August fell for a second month in a row while wholesale inflation also plunged. Sales dropped 0.3 percent in August to a seasonally adjusted $381.17 billion after a sharply revised 0.5 percent drop in July that previously was reported as only a 0.1 percent decline.

Foreclosure filings in August increased 27 percent compared to the same month a year ago, a significantly slower pace than in previous months. Nationwide, almost 304,000 homes received at least one foreclosure-related notice in August, up 12 percent from July.

According to media reports on the University of Michigan/Reuters consumer sentiment index reports that U.S. consumer sentiment rose to its highest level this year in September as gasoline prices fell. The index rose to 73.1 in September from 63.0 in August. Economists were predicting a slight gain to 64.

Business inventories increased in July by the most in four years as sales slowed. The Commerce Department says that businesses' supplies of unsold goods in warehouses and stock rooms rose by 1.1 percent in July. Economists were expecting a 0.5 percent gain. It marked the biggest increase since July 2004.

Lehman Brothers' (LEH) top executives are hurrying to put a sale of the struggling investment bank in place before it loses further market value and confidence. A Ladenburg Thalmann analyst in a research note wrote that Bank of America (BAC) will win the auction for Lehman arguing there is a "natural fit" between the two firms.

Washington Mutual Inc. (WM) said it will take another multi-billion write down for bad risks on mortgage securities but insisted it has adequate capital to fund its operations amid concern about the thrift's financial stability. The company said it expects its provision for bad loans in the third quarter to be $4.5 billion.

Meanwhile, Moody's Investor Service downgraded Washington Mutual’s credit rating to below investment grade, citing WaMu's reduced financial flexibility, deteriorating asset quality and expected franchise erosion.

Deutsche Bank AG (DB) has agreed to buy a 29.75 percent stake in Postbank, Germany's biggest retail bank, from Deutsche Post AG for about $3.9 billion in cash. Deutsche Bank, Germany's biggest bank by assets, said the deal is set to be done by first quarter of 2009.

Delta Air Lines Inc. (DAL) is restoring several flights to Hawaii from the mainland it had canceled earlier this year. The Hawaii Visitors and Convention Bureau said a flight from Los Angeles to Kauai and Hawaii's Big Island, as well as one from Atlanta to Honolulu, is being put back on the schedule because of increased demand.

The co-CEO of Research in Motion (RIMM) said that the company's BlackBerry Bold wireless device is expected to make its U.S. launch date sometime next month -- later than many analysts had expected. Jim Balsillie told a wireless industry gathering that the company expects that the Bold will launch with AT&T in the U.S. in October, though he did not give a specific date.

NXP Semiconductors announced that it will cut 4,500 jobs and close or sell four factories as part of a restructuring intended to save the firm $550 million a year. The company, which employs around 31,000 people, was bought from Royal Philips Electronics (PHG) by a private equity consortium in 2006.

Scheduled U.S. Economic Reports (Next Week)

Empire State Index (Sep), Industrial Production (Aug), Consumer Price Index (Aug), Home Builder’s Index (Sep), Housing Starts (Aug), the Philly Fed Index (Sep), Leading Indicators (Aug), and the FOMC Meeting

In Earnings News

Duckwall-ALCO Stores Inc. (DUCK) reported its second-quarter profit jumped 26 percent due to a cost reduction program and higher revenue from new stores. For the quarter ended Aug. 3rd, net income rose to $3.3 million, or 85 cents per share.

Claire’s Stores reported net sales of $360.0 million for the 2008 second quarter, a 1.5% decrease from the 2007 second quarter. The decrease was primarily attributable to a decline in same store sales, partially offset by the growth in our new store base and the effect of foreign currency translation.

Qiao Xing Mobile Communications (QXM) reported second-quarter operating income dropped to 76.1 million yuan ($11.1 million) from 230.6 million yuan, with revenue falling to 383.7 million yuan from 844.1 million yuan. The Chinese mobile handset maker said shipments fell 46% to 566,000 units.

Scheduled Earnings Reports (Next Week)

Adobe Systems, Best Buy, Darden Restaurants, Morgan Stanley, Goldman Sachs, Rural Metro Corp, Kroger Company, Shoe Pavilion, CKE Restaurants, General Mills, Carnival Corp., FedEx, Conagra, Lehman Bros, Oracle, Pier 1 Imports

Stocks in the News

Consol Energy (CNX) set plans to buy back up to $500 million of its own stock over the next two years.

Rockwell Collins (COL) affirmed its fiscal 2008 net income outlook of $4.05 to $4.10 a share on revenue of $4.75 billion, despite strikes at two of its largest customers.

Myriad Genetics (MYGN) said it's considering whether to spin off the pharmaceutical subsidiary from Myriad's molecular diagnostic business.

Zion’s Bancorp (ZION) said it raised $250 million through issuance of common stock.

Praxair Inc (PX) said its Praxair Electronics division said it would raise prices globally on its tantalum products.

Titan International Inc (TWI) said it ended talks under which it might have offered to buy 51% or more of Titan Europe PLC.

Kirkland’s Inc (KIRK) said three directors and two officers have agreed to acquire more than 3.8 million of the chain's shares from funds affiliated with the Boston private-equity firm Advent International Corp.

E-Trade Financial (ETFC) named Bruce Nolop its chief financial officer effective immediately.