JDfn Daily Digest - September 30, 2008
The U.S. Senate will try to salvage a $700 billion financial-rescue package after the measure was defeated in the House of Representatives. The lawmakers won't have a lot of room to negotiate. The Senate won't hold any roll-call votes today because several lawmakers will be celebrating Rosh Hashanah, the Jewish New Year. Senators say they have no choice but to revive the measure, which is designed to restore confidence in the nation's banking system.
President Bush said the economic damage to the nation will be "painful and lasting" if Congress fails to pass the bailout bill.
The S&P/Case-Shiller 20-city housing index fell a record 16.3 percent in July from the year-ago period, the largest drop since its inception in 2000. The 10-city index plunged 17.5 percent, its biggest decline in its 21-year history. Home values in all 20 cities fell year-over-year, with Las Vegas prices plunging the most at nearly 30 percent.
New applications for mortgage insurance dropped to the lowest level in over a year, while new mortgage defaults and cures of existing defaults also increased during the month. Mortgage insurance applications are typically required for home buyers who make less than a 20% down payment on a home purchase.
The Chicago purchasing managers index moved a bit lower to 56.7 in September from 57.9 in August but stayed well above the 53.0% expected by analysts. The Chicago PMI is considered a leading indicator to the national Institute for Supply Management manufacturers' survey to be released tomorrow.
The Conference Board reported U.S. consumer confidence rose in September, - the third consecutive month of gains - but the level remained relatively low. The September consumer confidence index rose to 59.8 from an August reading of 58.5.
Democratic presidential candidate Barack Obama proposed raising the limit on federal deposit insurance to $250,000 from $100,000. He said that although the current limit is "more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs."
Delivery schedules for Boeing's (BA) repeatedly delayed 787 mid-sized jet are now up in the air because of a strike that has shut down production. Japan's All Nippon Airways Co. is scheduled to be the world's first customer for the 787 next-generation jet, which has already been postponed three times and by nearly two years from the original schedule.
Hilton Hotels Corp. (HLN) said it will quadruple its properties in the Caribbean and Latin America in the next five years. The company plans to create 150 new hotels in the region as part of its effort to add 1,000 hotels internationally in the next 10 years. Hilton currently has 51 existing hotels in the region and 42 in development.
Scheduled U.S. Economic Reports (Wednesday)
ADP Employment Report (Sep), ISM Manufacturing Report (Sep), Construction Spending (Aug)
In Earnings News
Pepsi Bottling Group Inc. (PBG) reported its fiscal third-quarter profit declined compared with a year-ago period. Profit slipped to $231 million, or $1.09 per share. Analysts expected profit of $1.04 per share.
Thor Industries Inc. (THO) said its fourth-quarter earnings plunged almost 90 percent as it continued to weather a tough RV market. In a regulatory filing, Thor said earnings for the quarter fell to $5 million, or 9 cents per share. Analysts expected fourth-quarter earnings of 30 cents per share.
Scheduled Earnings Reports (Wednesday)
Actuant, Micron Technology, Immucor, Wolverine Worldwide. Third quarter earnings season will begin on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Google (GOOG) traded higher after two analysts cut their rating on the tech giant which saw its share price fall under the $400 mark in line with a steep drop in tech stocks.
Pfizer Inc. (PFE) reported advancing 31 drug programs in its pipeline to the next stage of development while 13 other programs were discontinued.
W&T Offshore (WTI) said that Hurricanes Gustav and Ike resulted in the sinking of two operated and nine non-operated platforms in the Gulf of Mexico.
Huntsman Corp (HUN) traded higher after a Delaware judge issued an opinion refusing to allow private-equity firm Apollo Management LP to walk away from its $6.5 billion acquisition of Huntsman.
Conexant Systems Inc (CNXT) raised its fiscal fourth-quarter earnings guidance, citing lower expenses and better-than-expected margins.
The Timken Company (TKR) said it was raising its estimate for third-quarter earnings per share to $1.00 to $1.10 from 65 cents to 75 cents.
Wells Fargo Company (WFC) was upgraded to neutral from underperform while Fifth Third Bancorp was downgraded to neutral from outperform by Robert W. Baird & Co.
Sovereign Bancorp (SOV) plans to name Paul Perrault as its new chief executive.
Genworth Financial Inc (GNW) said it is considering various strategic alternatives, including a possible spin-off, for its U.S. mortgage-insurance business.
President Bush said the economic damage to the nation will be "painful and lasting" if Congress fails to pass the bailout bill.
The S&P/Case-Shiller 20-city housing index fell a record 16.3 percent in July from the year-ago period, the largest drop since its inception in 2000. The 10-city index plunged 17.5 percent, its biggest decline in its 21-year history. Home values in all 20 cities fell year-over-year, with Las Vegas prices plunging the most at nearly 30 percent.
New applications for mortgage insurance dropped to the lowest level in over a year, while new mortgage defaults and cures of existing defaults also increased during the month. Mortgage insurance applications are typically required for home buyers who make less than a 20% down payment on a home purchase.
The Chicago purchasing managers index moved a bit lower to 56.7 in September from 57.9 in August but stayed well above the 53.0% expected by analysts. The Chicago PMI is considered a leading indicator to the national Institute for Supply Management manufacturers' survey to be released tomorrow.
The Conference Board reported U.S. consumer confidence rose in September, - the third consecutive month of gains - but the level remained relatively low. The September consumer confidence index rose to 59.8 from an August reading of 58.5.
Democratic presidential candidate Barack Obama proposed raising the limit on federal deposit insurance to $250,000 from $100,000. He said that although the current limit is "more than adequate for most families, it is insufficient for many small businesses that maintain bank accounts to meet their payroll, buy their supplies, and invest in expanding and creating jobs."
Delivery schedules for Boeing's (BA) repeatedly delayed 787 mid-sized jet are now up in the air because of a strike that has shut down production. Japan's All Nippon Airways Co. is scheduled to be the world's first customer for the 787 next-generation jet, which has already been postponed three times and by nearly two years from the original schedule.
Hilton Hotels Corp. (HLN) said it will quadruple its properties in the Caribbean and Latin America in the next five years. The company plans to create 150 new hotels in the region as part of its effort to add 1,000 hotels internationally in the next 10 years. Hilton currently has 51 existing hotels in the region and 42 in development.
Scheduled U.S. Economic Reports (Wednesday)
ADP Employment Report (Sep), ISM Manufacturing Report (Sep), Construction Spending (Aug)
In Earnings News
Pepsi Bottling Group Inc. (PBG) reported its fiscal third-quarter profit declined compared with a year-ago period. Profit slipped to $231 million, or $1.09 per share. Analysts expected profit of $1.04 per share.
Thor Industries Inc. (THO) said its fourth-quarter earnings plunged almost 90 percent as it continued to weather a tough RV market. In a regulatory filing, Thor said earnings for the quarter fell to $5 million, or 9 cents per share. Analysts expected fourth-quarter earnings of 30 cents per share.
Scheduled Earnings Reports (Wednesday)
Actuant, Micron Technology, Immucor, Wolverine Worldwide. Third quarter earnings season will begin on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Google (GOOG) traded higher after two analysts cut their rating on the tech giant which saw its share price fall under the $400 mark in line with a steep drop in tech stocks.
Pfizer Inc. (PFE) reported advancing 31 drug programs in its pipeline to the next stage of development while 13 other programs were discontinued.
W&T Offshore (WTI) said that Hurricanes Gustav and Ike resulted in the sinking of two operated and nine non-operated platforms in the Gulf of Mexico.
Huntsman Corp (HUN) traded higher after a Delaware judge issued an opinion refusing to allow private-equity firm Apollo Management LP to walk away from its $6.5 billion acquisition of Huntsman.
Conexant Systems Inc (CNXT) raised its fiscal fourth-quarter earnings guidance, citing lower expenses and better-than-expected margins.
The Timken Company (TKR) said it was raising its estimate for third-quarter earnings per share to $1.00 to $1.10 from 65 cents to 75 cents.
Wells Fargo Company (WFC) was upgraded to neutral from underperform while Fifth Third Bancorp was downgraded to neutral from outperform by Robert W. Baird & Co.
Sovereign Bancorp (SOV) plans to name Paul Perrault as its new chief executive.
Genworth Financial Inc (GNW) said it is considering various strategic alternatives, including a possible spin-off, for its U.S. mortgage-insurance business.
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