JDfn Daily Digest - September 19, 2008
President Bush said a broad-ranging U.S. plan to fight the crisis will get the financial system moving again. But in a statement from the White House, he said that plan will put "significant" amounts of taxpayer dollars on the line. The President said Democrats and Republicans must come together to approve the plan.
The Federal Reserve took two steps to boost market liquidity. The Fed will extend loans to banks to finance their purchases of asset-backed commercial paper from money market mutual funds -- a move the Fed says will help funds meet investor demands. The Fed will also buy from primary dealers short term debt issued by Fannie Mae (FNM) and Freddie Mac (FRE) and the Federal Home Loan banks.
The Treasury Department asked Congress to give it sweeping power to buy up toxic debt that has unhinged Wall Street. President Bush authorized Treasury to tap up to $50 billion from a Depression-era fund to insure the holdings of eligible money market mutual funds.
The SEC took what it called "emergency action" and temporarily banned investors from short-selling 799 financial companies. The ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.
Japan, Australia, India and Indonesia pumped over $42 billion into their money markets as cash remained hard to find despite the unprecedented move, coordinated by the U.S. Federal Reserve, to make an extra $180 billion in dollar funds available to the banking system.
Citigroup (C) is considering making a bid for Washington Mutual (WM). JP Morgan Chase (JPM) is also considering a purchase of the ailing institution.
An enormous tax package designed to give a bump to the staggering economy by protecting millions from new taxes headed for a vote in Congress after a dispute over aid to Hurricane Ike victims was resolved. The compromise included allocating extra money to five hard-hit counties -- three in Texas and two in Louisiana -- and that the Texas governor would have discretion in dispersing other funds.
Scheduled U.S. Economic Reports (Next Week)
Existing Home Sales (Aug), Durable Goods (Aug), New Home Sales (Aug), GDP Revision (2Q), Consumer Sentiment (Sep)
In Earnings News
Oracle (ORCL) earnings rose to $1.08 billion, or 21 cents per share, from $840 million, 16 cents per share, a year ago. New software license sales, a measure closely watched by investors, increased 14 percent, within the 10 percent to 20 percent range Oracle had predicted.
Toshiba Corp. lowered its profit forecast lower, blaming the drop in semiconductor prices and weaker-than-expected demand, slipping into the red for the fiscal first half for the first time in five years.
Dress Barn Inc. (DBRN) reported fourth-quarter profit declined, although earnings beat analyst expectations. Dress Barn said fiscal fourth-quarter profit fell 9 percent to $22.1 million or 34 cents per share, but beat analysts' expectations of 30 cents per share.
Scheduled Earnings Reports (Next Week)
AutoZone, 3Com, Carmax, Lennar, HB Fuller, Nike, Bed, Bath & Beyond, Red Hat, Neiman Marcus, Christopher and Banks, Discover Financial, Rite Aid, Vail Resorts, American Greetings, Jabil Circuits. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Morgan Stanley (MS) is considering a merger with a large commercial bank or raising capital from abroad as the brokerage firm tries to battle concerns about its access to short-term funding and potential client departures.
Genworth Financial (GNW) said it has roughly $900 million in cash and cash equivalents at its holding company and said it doesn't depend on the commercial paper market for short-term funding.
State Street Corp (STT) said it was well capitalized, and would remain so even if it should need to consolidate its affiliates it uses to raise short-term financing.
Cisco Systems (CSCO) said it will buy privately held Jabber Inc., a Denver-based messaging-software company.
General Motors (GM) is in talks to sell its commercial truck operations to Isuzu.
Texas Instruments (TXN) plans to raise its quarterly cash dividend by 10% to 11 cents from 10 cents.
Legg Mason (LM) announced it has entered into additional support measures with three money market funds managed by its subsidiary.
The Federal Reserve took two steps to boost market liquidity. The Fed will extend loans to banks to finance their purchases of asset-backed commercial paper from money market mutual funds -- a move the Fed says will help funds meet investor demands. The Fed will also buy from primary dealers short term debt issued by Fannie Mae (FNM) and Freddie Mac (FRE) and the Federal Home Loan banks.
The Treasury Department asked Congress to give it sweeping power to buy up toxic debt that has unhinged Wall Street. President Bush authorized Treasury to tap up to $50 billion from a Depression-era fund to insure the holdings of eligible money market mutual funds.
The SEC took what it called "emergency action" and temporarily banned investors from short-selling 799 financial companies. The ban, aimed at helping restore falling stock prices that have shattered confidence in the financial markets, takes effect immediately.
Japan, Australia, India and Indonesia pumped over $42 billion into their money markets as cash remained hard to find despite the unprecedented move, coordinated by the U.S. Federal Reserve, to make an extra $180 billion in dollar funds available to the banking system.
Citigroup (C) is considering making a bid for Washington Mutual (WM). JP Morgan Chase (JPM) is also considering a purchase of the ailing institution.
An enormous tax package designed to give a bump to the staggering economy by protecting millions from new taxes headed for a vote in Congress after a dispute over aid to Hurricane Ike victims was resolved. The compromise included allocating extra money to five hard-hit counties -- three in Texas and two in Louisiana -- and that the Texas governor would have discretion in dispersing other funds.
Scheduled U.S. Economic Reports (Next Week)
Existing Home Sales (Aug), Durable Goods (Aug), New Home Sales (Aug), GDP Revision (2Q), Consumer Sentiment (Sep)
In Earnings News
Oracle (ORCL) earnings rose to $1.08 billion, or 21 cents per share, from $840 million, 16 cents per share, a year ago. New software license sales, a measure closely watched by investors, increased 14 percent, within the 10 percent to 20 percent range Oracle had predicted.
Toshiba Corp. lowered its profit forecast lower, blaming the drop in semiconductor prices and weaker-than-expected demand, slipping into the red for the fiscal first half for the first time in five years.
Dress Barn Inc. (DBRN) reported fourth-quarter profit declined, although earnings beat analyst expectations. Dress Barn said fiscal fourth-quarter profit fell 9 percent to $22.1 million or 34 cents per share, but beat analysts' expectations of 30 cents per share.
Scheduled Earnings Reports (Next Week)
AutoZone, 3Com, Carmax, Lennar, HB Fuller, Nike, Bed, Bath & Beyond, Red Hat, Neiman Marcus, Christopher and Banks, Discover Financial, Rite Aid, Vail Resorts, American Greetings, Jabil Circuits. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Morgan Stanley (MS) is considering a merger with a large commercial bank or raising capital from abroad as the brokerage firm tries to battle concerns about its access to short-term funding and potential client departures.
Genworth Financial (GNW) said it has roughly $900 million in cash and cash equivalents at its holding company and said it doesn't depend on the commercial paper market for short-term funding.
State Street Corp (STT) said it was well capitalized, and would remain so even if it should need to consolidate its affiliates it uses to raise short-term financing.
Cisco Systems (CSCO) said it will buy privately held Jabber Inc., a Denver-based messaging-software company.
General Motors (GM) is in talks to sell its commercial truck operations to Isuzu.
Texas Instruments (TXN) plans to raise its quarterly cash dividend by 10% to 11 cents from 10 cents.
Legg Mason (LM) announced it has entered into additional support measures with three money market funds managed by its subsidiary.
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