JDfn Daily Digest - September 22, 2008
The Bush administration insisted that Congress must move quickly to approve what one lawmaker called the "mother of all bailouts" -- a $700 billion proposal to buy a mountain of bad mortgage debt in an effort to unfreeze the nation's credit markets.
The G7 group of finance ministers and central bank governors of the wealthiest industrial countries held a teleconference and agreed to take "whatever actions may be necessary" to ensure the stability of the international financial system.
Congressional Democrats called for a guarded approach to stabilizing troubled financial markets as lawmakers confronted the vexing issue with the election drawing near. Senate Banking Committee Chairman Christopher Dodd voiced confidence in Treasury Secretary Henry Paulson and said "we've got the right man" to deal with the problem that has not only shaken Wall Street but international markets as well.
The Federal Reserve has granted a request by the country's last two major investment banks -- Goldman Sachs (GS) and Morgan Stanley (MS) -- to change their status to bank holding companies. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
Mitsubishi UFJ Financial Group Inc. has agreed with Morgan Stanley (MS) to buy a stake of between 10% and 20% in the U.S. Company in order to establish a strategic partnership.
And Japan's largest brokerage, Nomura Holdings, is buying the Asian assets of bankrupt Wall Street firm Lehman Brothers Holdings Inc. (LEH). The Wall Street Journal reported that the deal is worth $225 million.
General Electric Co.'s (GE) consumer financial services unit said Monday it closed the sale of its Japanese consumer finance operations to Shinsei Bank for 580 billion yen (US$5.4 billion).
McAfee Inc. (MFE) has agreed to buy network Security Company Secure Computing Corp. (SCUR) in a deal valued at $465 million. McAfee said it will pay $5.75 per share in cash, or about $413 million. That represents a 27 percent premium over Secure's Friday closing stock price.
Microsoft (MSFT) announced yet another plan to buy back $40 billion worth of shares. The company said its board of directors approved the $40 billion buyback plan, after having just completed its previous $40 billion stock repurchase program.
Apple (AAPL) will exchange power adapters sold with 3G iPhones for a new redesigned adapter due to risk of electric shock. The company said it received reports about metal prongs breaking and remaining in a power outlet in a small number of the adapters sold.
Scheduled U.S. Economic Reports (Tuesday)
None Scheduled
In Earnings News
CarMax Inc. (KMX) says its earnings in its second quarter plunged as a weak economy and high gasoline prices gutted sales. CarMax says earnings for the quarter fell 78 percent to $14 million, or 6 cents per share, from $65 million, or 29 cents per share in the same quarter last year.
AutoZone Inc’s (AZO) fourth-quarter earnings rose to $243.7 million, or $3.88 a share, from $217.2 million, or $3.23 a share, in the year-earlier period. Sales rose 10% to $2.2 billion. The most recent quarter included an additional week; adjusting for that, sales were up 4.1%.
Washington Federal Inc. (WFSL), the parent company of Washington Federal Savings, said that it expects to report its first-ever quarterly loss, due to a write-down on its holdings in Fannie Mae and Freddie Mac. The company expects a loss of $39 million for the fiscal fourth quarter, and net income of $62 million for the full fiscal year ending Sept. 30th.
Scheduled Earnings Reports (Tuesday)
H.B. Fuller, Lennar Corp, Worthington Industries, Palatin Technologies and Forgent Networks. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Fannie Mae (FNM) is changing its organizational structure. The new structure and function of government and industry relations is under review.
Nasdaq OMX Group (NDAQ) will offer pricing based on global transaction volume, plus new services to enable companies to more easily list on multiple Nasdaq OMX markets.
Sysco Corp. (SYY) announced that its board of directors approved a buyback of 20 million shares.
General Motors (GM) said it will use the remaining $3.5 billion of its $4.5 billion secured revolving credit facility to boost its liquidity position as it continues its restructuring efforts.
Comerica Inc ((CMA) traded higher after Fitch Ratings lowered its ratings outlook to negative from stable because of rising levels of nonperforming assets, weaker earnings, and deteriorating capital ratios.
BNP Paribas (BNPQY) was upgraded to buy from neutral at Merrill Lynch, which said the U.S. initiative to move weak assets off banks' balance sheets should create a "flight to quality" in the medium term.
General Growth Properties Inc (GGP) said that it's assessing alternatives to boost the stock price, given the 93.2% second-quarter occupancy rate in its properties plus higher comparable operating profit.
CryptoLogic Ltd (CRYP) expects to report a third-quarter operating loss of $1 million to $1.5 million on revenue "in line with seasonal trends and current market expectations."
The G7 group of finance ministers and central bank governors of the wealthiest industrial countries held a teleconference and agreed to take "whatever actions may be necessary" to ensure the stability of the international financial system.
Congressional Democrats called for a guarded approach to stabilizing troubled financial markets as lawmakers confronted the vexing issue with the election drawing near. Senate Banking Committee Chairman Christopher Dodd voiced confidence in Treasury Secretary Henry Paulson and said "we've got the right man" to deal with the problem that has not only shaken Wall Street but international markets as well.
The Federal Reserve has granted a request by the country's last two major investment banks -- Goldman Sachs (GS) and Morgan Stanley (MS) -- to change their status to bank holding companies. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
Mitsubishi UFJ Financial Group Inc. has agreed with Morgan Stanley (MS) to buy a stake of between 10% and 20% in the U.S. Company in order to establish a strategic partnership.
And Japan's largest brokerage, Nomura Holdings, is buying the Asian assets of bankrupt Wall Street firm Lehman Brothers Holdings Inc. (LEH). The Wall Street Journal reported that the deal is worth $225 million.
General Electric Co.'s (GE) consumer financial services unit said Monday it closed the sale of its Japanese consumer finance operations to Shinsei Bank for 580 billion yen (US$5.4 billion).
McAfee Inc. (MFE) has agreed to buy network Security Company Secure Computing Corp. (SCUR) in a deal valued at $465 million. McAfee said it will pay $5.75 per share in cash, or about $413 million. That represents a 27 percent premium over Secure's Friday closing stock price.
Microsoft (MSFT) announced yet another plan to buy back $40 billion worth of shares. The company said its board of directors approved the $40 billion buyback plan, after having just completed its previous $40 billion stock repurchase program.
Apple (AAPL) will exchange power adapters sold with 3G iPhones for a new redesigned adapter due to risk of electric shock. The company said it received reports about metal prongs breaking and remaining in a power outlet in a small number of the adapters sold.
Scheduled U.S. Economic Reports (Tuesday)
None Scheduled
In Earnings News
CarMax Inc. (KMX) says its earnings in its second quarter plunged as a weak economy and high gasoline prices gutted sales. CarMax says earnings for the quarter fell 78 percent to $14 million, or 6 cents per share, from $65 million, or 29 cents per share in the same quarter last year.
AutoZone Inc’s (AZO) fourth-quarter earnings rose to $243.7 million, or $3.88 a share, from $217.2 million, or $3.23 a share, in the year-earlier period. Sales rose 10% to $2.2 billion. The most recent quarter included an additional week; adjusting for that, sales were up 4.1%.
Washington Federal Inc. (WFSL), the parent company of Washington Federal Savings, said that it expects to report its first-ever quarterly loss, due to a write-down on its holdings in Fannie Mae and Freddie Mac. The company expects a loss of $39 million for the fiscal fourth quarter, and net income of $62 million for the full fiscal year ending Sept. 30th.
Scheduled Earnings Reports (Tuesday)
H.B. Fuller, Lennar Corp, Worthington Industries, Palatin Technologies and Forgent Networks. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Fannie Mae (FNM) is changing its organizational structure. The new structure and function of government and industry relations is under review.
Nasdaq OMX Group (NDAQ) will offer pricing based on global transaction volume, plus new services to enable companies to more easily list on multiple Nasdaq OMX markets.
Sysco Corp. (SYY) announced that its board of directors approved a buyback of 20 million shares.
General Motors (GM) said it will use the remaining $3.5 billion of its $4.5 billion secured revolving credit facility to boost its liquidity position as it continues its restructuring efforts.
Comerica Inc ((CMA) traded higher after Fitch Ratings lowered its ratings outlook to negative from stable because of rising levels of nonperforming assets, weaker earnings, and deteriorating capital ratios.
BNP Paribas (BNPQY) was upgraded to buy from neutral at Merrill Lynch, which said the U.S. initiative to move weak assets off banks' balance sheets should create a "flight to quality" in the medium term.
General Growth Properties Inc (GGP) said that it's assessing alternatives to boost the stock price, given the 93.2% second-quarter occupancy rate in its properties plus higher comparable operating profit.
CryptoLogic Ltd (CRYP) expects to report a third-quarter operating loss of $1 million to $1.5 million on revenue "in line with seasonal trends and current market expectations."
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