JDfn Daily Digest - September 24, 2008
The National Association of Realtors reported that resales of U.S. single-family homes and condos fell 2.2% in August to a seasonally adjusted annual rate of 4.91 million. Economists expected sales to hit 4.93 million. Resales have fallen 10.7% in the past year. The inventory of unsold homes on the market fell 7% to 4.26 million, a 10.4 month supply at the current sales pace.
Federal Reserve Chairman Bernanke said the U.S. is facing ``grave threats'' to financial stability and warned that the credit crisis damaged household and business spending. Bernanke's remarks may fuel investors' expectations for the Fed to lower interest rates by the end of the year to ease the impact of the worst financial crisis since the Great Depression.
The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration. Two law enforcement officials said the FBI is looking at potential fraud by mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE), and insurer American International Group Inc (AIG).
The Federal Reserve, in coordinated action with foreign central banks, placed $30 billion into money markets overseas, part of an ongoing effort to fight a global credit crisis. The global credit crisis poses a danger not only to the U.S. economy but also the world economy.
Warren Buffett's Berkshire Hathaway Inc. (BRK-A) will invest at least $5 billion in Goldman Sachs Group Inc. (GS), a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.
A former director of the International Monetary Fund says financial markets need international regulation to avoid another crisis. Michel Camdessus says the international community should have spoken out against the unregulated banking practices that spread globally from the United States.
The Mortgage Bankers Association said applications filed for mortgages last week decreased a seasonally adjusted 10.6% compared to a week earlier, while interest rates charged on fixed- and adjustable-rate mortgages rose. The rate charged on 30-year fixed-rate mortgages averaged 6.08% last week, up from 5.82% the previous week.
Yahoo’s (YHOO) new board approved a new round of discussions with Time Warner Inc (TWX) over the future of its AOL unit. The approval for the talks came as Yahoo's directors met for the first time since activist investor Carl Icahn was granted access to the boardroom.
Advance America (AEA), a payday cash-advance service, will close its 30 Arkansas offices because a regulatory decision prevents it from operating profitably in the state. The company and the Arkansas attorney general could not come to terms on their differing interpretations of the law.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Sep 20), Durable Goods (Aug), New Home Sales (Aug)
In Earnings News
Lowe’s Companies (LOW) said it still expects to earn $1.48 to $1.56 a share in fiscal 2008, and sees sales growth of 1% for the period. On average, analysts expect a profit of $1.53 a share for the year.
H.B. Fuller Co. (FUL) reported its fiscal third-quarter profit fell due to rising raw material costs. The company posted net income of $21.7 million, or 44 cents per share. Analysts were expecting 35 cents.
Intuit Inc. (INTU) reaffirmed its fiscal first-quarter and full-year outlook. The company still expects a first-quarter loss of 26 cents to 23 cents per share. Analysts are expecting a loss, excluding items, of 12 cents per share.
Key Energy Services Inc. (KEG), a rig-based well service company, issued third-quarter guidance below average Wall Street estimates. Key Energy said it expects to post a profit for the period of 36 cents to 38 cents per share. Analysts expect, on average, a profit of 40 cents per share.
Scheduled Earnings Reports (Thursday)
Research in Motion, Discover Financial, Christopher & Banks, Analogic, McCormick, Diamond Foods, Finish Line, Vail Resorts, Accenture Ltd. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
3Com Corp (COMS) said that its board has authorized a stock-buyback program of up to $100 million.
Bank of America (BAC) replaced former Countrywide Financial executive Andrew Gissinger III in leading the company's consumer mortgage initiative with insider Craig Buffie.
Imperial Tobacco (ITYBY) said that its performance for the fiscal year ending Sept. 30th remains in line with expectations.
Kirby Corp (KEX) said that damage from Hurricanes Gustav and Ike would cut 8 cents to 9 cents a share from third-quarter earnings.
Sequenom Inc (SQNM) traded higher on positive news about its new prenatal test for Down syndrome.
Healthcare Realty Trust Inc (HR) priced a public offering of 7 million shares at $25.50.
Wells Fargo (WFC) lifted its stock-buyback plan by 25 million shares to meet employee-benefit-plan requirements.
CSX Corp (CSX) said that recent storms on the Gulf Coast and in the Midwest will lower third-quarter earnings by 6 cents to 8 cents a share.
Capital One Financial (COF) said it expects to build an allowance for loan losses by $200 million in the third quarter, and plans a secondary offering.
Teva Pharmaceuticals (TEVA) and Kowa Co., the Tokyo conglomerate, definitively agreed to form a 50-50 generic-pharmaceutical company in Japan.
Juniper Networks (JNPR) was downgraded to underperform from neutral by Merrill Lynch.
Federal Reserve Chairman Bernanke said the U.S. is facing ``grave threats'' to financial stability and warned that the credit crisis damaged household and business spending. Bernanke's remarks may fuel investors' expectations for the Fed to lower interest rates by the end of the year to ease the impact of the worst financial crisis since the Great Depression.
The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration. Two law enforcement officials said the FBI is looking at potential fraud by mortgage finance giants Fannie Mae (FNM) and Freddie Mac (FRE), and insurer American International Group Inc (AIG).
The Federal Reserve, in coordinated action with foreign central banks, placed $30 billion into money markets overseas, part of an ongoing effort to fight a global credit crisis. The global credit crisis poses a danger not only to the U.S. economy but also the world economy.
Warren Buffett's Berkshire Hathaway Inc. (BRK-A) will invest at least $5 billion in Goldman Sachs Group Inc. (GS), a huge vote of confidence for one of the survivors of the credit crisis that felled two of its investment banking peers.
A former director of the International Monetary Fund says financial markets need international regulation to avoid another crisis. Michel Camdessus says the international community should have spoken out against the unregulated banking practices that spread globally from the United States.
The Mortgage Bankers Association said applications filed for mortgages last week decreased a seasonally adjusted 10.6% compared to a week earlier, while interest rates charged on fixed- and adjustable-rate mortgages rose. The rate charged on 30-year fixed-rate mortgages averaged 6.08% last week, up from 5.82% the previous week.
Yahoo’s (YHOO) new board approved a new round of discussions with Time Warner Inc (TWX) over the future of its AOL unit. The approval for the talks came as Yahoo's directors met for the first time since activist investor Carl Icahn was granted access to the boardroom.
Advance America (AEA), a payday cash-advance service, will close its 30 Arkansas offices because a regulatory decision prevents it from operating profitably in the state. The company and the Arkansas attorney general could not come to terms on their differing interpretations of the law.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Sep 20), Durable Goods (Aug), New Home Sales (Aug)
In Earnings News
Lowe’s Companies (LOW) said it still expects to earn $1.48 to $1.56 a share in fiscal 2008, and sees sales growth of 1% for the period. On average, analysts expect a profit of $1.53 a share for the year.
H.B. Fuller Co. (FUL) reported its fiscal third-quarter profit fell due to rising raw material costs. The company posted net income of $21.7 million, or 44 cents per share. Analysts were expecting 35 cents.
Intuit Inc. (INTU) reaffirmed its fiscal first-quarter and full-year outlook. The company still expects a first-quarter loss of 26 cents to 23 cents per share. Analysts are expecting a loss, excluding items, of 12 cents per share.
Key Energy Services Inc. (KEG), a rig-based well service company, issued third-quarter guidance below average Wall Street estimates. Key Energy said it expects to post a profit for the period of 36 cents to 38 cents per share. Analysts expect, on average, a profit of 40 cents per share.
Scheduled Earnings Reports (Thursday)
Research in Motion, Discover Financial, Christopher & Banks, Analogic, McCormick, Diamond Foods, Finish Line, Vail Resorts, Accenture Ltd. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
3Com Corp (COMS) said that its board has authorized a stock-buyback program of up to $100 million.
Bank of America (BAC) replaced former Countrywide Financial executive Andrew Gissinger III in leading the company's consumer mortgage initiative with insider Craig Buffie.
Imperial Tobacco (ITYBY) said that its performance for the fiscal year ending Sept. 30th remains in line with expectations.
Kirby Corp (KEX) said that damage from Hurricanes Gustav and Ike would cut 8 cents to 9 cents a share from third-quarter earnings.
Sequenom Inc (SQNM) traded higher on positive news about its new prenatal test for Down syndrome.
Healthcare Realty Trust Inc (HR) priced a public offering of 7 million shares at $25.50.
Wells Fargo (WFC) lifted its stock-buyback plan by 25 million shares to meet employee-benefit-plan requirements.
CSX Corp (CSX) said that recent storms on the Gulf Coast and in the Midwest will lower third-quarter earnings by 6 cents to 8 cents a share.
Capital One Financial (COF) said it expects to build an allowance for loan losses by $200 million in the third quarter, and plans a secondary offering.
Teva Pharmaceuticals (TEVA) and Kowa Co., the Tokyo conglomerate, definitively agreed to form a 50-50 generic-pharmaceutical company in Japan.
Juniper Networks (JNPR) was downgraded to underperform from neutral by Merrill Lynch.
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