JDfn Daily Digest - October 3, 2008
The House of Representatives voted to approve a revised $700 billion bailout plan for the financial markets. The House's vote follows the Senate's approval and clears the way for President Bush's signature. Passage came over the objections of some members who balked at tax provisions in the bill and giving the Treasury secretary extraordinary power to buy bad assets. The bill now goes to the President for signature.
Employers made deeper cuts in their payrolls in September as the economy experienced the biggest drop in jobs in more than five years. There was a net loss of 159,000 jobs in September, the ninth straight month the U.S. economy has lost jobs. The unemployment rate remained at 6.1%, the same level as August and in line with economists' forecast.
The Institute for Supply Management reported economic activity in the non-manufacturing sectors of the U.S. economy expanded slightly in September. The ISM nonmanufacturing index hit 50.2% in September, compared with from 50.6% in August. Economists were looking for a result of 49.9%.
In a sudden change of course, Wachovia Corp. (WB) has agreed to be acquired by Wells Fargo & Co. (WFC) in a $15.1 billion all-stock deal, wiping out Wachovia's previous plan to sell its banking operations to rival suitor Citigroup Inc. (C). A key difference is that the Wachovia deal will be done without government assistance, while the Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp.
American International Group Inc. (AIG) said it plans to sell off a number of business units to pay off its massive government loan, while retaining its U.S. property and casualty and foreign general insurance businesses.
The Boeing Company (BA) announced that it delivered 84 commercial airplanes in the third quarter, down from 109 in the year-ago period. Deliveries of certain models were affected by a labor strike that began in September.
Scheduled U.S. Economic Reports (Next Week)
Consumer Credit (Aug), Pending Home Sales (Aug), Wholesale Trade (Aug), Trade Deficit (Aug), Import Price Index (Sep), Federal Budget (Sep)
In Earnings News
Global Payments Inc (GPN) reported its fiscal first-quarter net income rose to $57.5 million, or 71 cents a share. Analysts had forecast the company to report earnings of 60 cents a share on revenue of $394.2 million.
Lawson Software Inc (LWSN) reported a fiscal first-quarter loss of $2.5 million, or 1 cent a share, from a profit of $5.6 million, or 3 cents a share, a year ago. Excluding one-time items, the company would have reported earnings of 5 cents a share in the latest quarter. Revenue rose to $190.9 million from $187.4 million a year ago.
Anheuser-Busch Cos. (BUD), which is selling itself to Belgian brewer InBev SA, said Friday its U.S. beer volume rose in the third quarter, as the Budweiser and Michelob brewer rolled out new products.
Scheduled Earnings Reports (Next Week)
Third quarter earnings season begins next Tuesday, October 7th when Alcoa releases its quarterly numbers. Other major earnings next week include General Electric, Host Marriott, Interstate Bakeries, Safeway, Sealy, Yum Brands, Costco, Monsanto, Ruby Tuesday, Bassett Furniture, Biomet, International Speedway, Chase.
Stocks in the News
Ford Motor Company (F) plans to sell an additional $500 million in common stock, according to a prospectus filed with the Securities and Exchange Commission.
Apple Inc (AAPL) traded higher after the Copyright Royalty Board left the amount record companies will pay songwriters for the sale of CDs or digitally downloaded songs unchanged.
Hewlett Packard (HPQ) is readying a new smart phone that will be marketed to consumers.
AMR Corp (AMR) reported September traffic at American Airlines fell 9.1% from the year-ago period to 9.86 billion revenue passenger miles.
UBS AG (UBS) will cut 2,000 jobs at its troubled investment banking unit.
Sprint Nextel Corp (S) has received interest in its Nextel business from several potential buyers.
Family Dollar Stores (FDO) fourth-quarter profit rises 41%, beating analysts’ expectations.
The Coca-Cola Co. (KO) says it is cutting about 1,100 information technology jobs in a bid to become more efficient.
US Airways Group (LCC) reported September mainline traffic fell 1.0% from the year-ago period to 4.6 billion revenue passenger miles.
Yahoo Inc. (YHOO) denied reports that the company may cut jobs. The company is expected to report results for its third quarter later this month.
Six Flags Inc (SIX) will consider various steps, including a reverse stock split, if its share price does not rebound soon.
Employers made deeper cuts in their payrolls in September as the economy experienced the biggest drop in jobs in more than five years. There was a net loss of 159,000 jobs in September, the ninth straight month the U.S. economy has lost jobs. The unemployment rate remained at 6.1%, the same level as August and in line with economists' forecast.
The Institute for Supply Management reported economic activity in the non-manufacturing sectors of the U.S. economy expanded slightly in September. The ISM nonmanufacturing index hit 50.2% in September, compared with from 50.6% in August. Economists were looking for a result of 49.9%.
In a sudden change of course, Wachovia Corp. (WB) has agreed to be acquired by Wells Fargo & Co. (WFC) in a $15.1 billion all-stock deal, wiping out Wachovia's previous plan to sell its banking operations to rival suitor Citigroup Inc. (C). A key difference is that the Wachovia deal will be done without government assistance, while the Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp.
American International Group Inc. (AIG) said it plans to sell off a number of business units to pay off its massive government loan, while retaining its U.S. property and casualty and foreign general insurance businesses.
The Boeing Company (BA) announced that it delivered 84 commercial airplanes in the third quarter, down from 109 in the year-ago period. Deliveries of certain models were affected by a labor strike that began in September.
Scheduled U.S. Economic Reports (Next Week)
Consumer Credit (Aug), Pending Home Sales (Aug), Wholesale Trade (Aug), Trade Deficit (Aug), Import Price Index (Sep), Federal Budget (Sep)
In Earnings News
Global Payments Inc (GPN) reported its fiscal first-quarter net income rose to $57.5 million, or 71 cents a share. Analysts had forecast the company to report earnings of 60 cents a share on revenue of $394.2 million.
Lawson Software Inc (LWSN) reported a fiscal first-quarter loss of $2.5 million, or 1 cent a share, from a profit of $5.6 million, or 3 cents a share, a year ago. Excluding one-time items, the company would have reported earnings of 5 cents a share in the latest quarter. Revenue rose to $190.9 million from $187.4 million a year ago.
Anheuser-Busch Cos. (BUD), which is selling itself to Belgian brewer InBev SA, said Friday its U.S. beer volume rose in the third quarter, as the Budweiser and Michelob brewer rolled out new products.
Scheduled Earnings Reports (Next Week)
Third quarter earnings season begins next Tuesday, October 7th when Alcoa releases its quarterly numbers. Other major earnings next week include General Electric, Host Marriott, Interstate Bakeries, Safeway, Sealy, Yum Brands, Costco, Monsanto, Ruby Tuesday, Bassett Furniture, Biomet, International Speedway, Chase.
Stocks in the News
Ford Motor Company (F) plans to sell an additional $500 million in common stock, according to a prospectus filed with the Securities and Exchange Commission.
Apple Inc (AAPL) traded higher after the Copyright Royalty Board left the amount record companies will pay songwriters for the sale of CDs or digitally downloaded songs unchanged.
Hewlett Packard (HPQ) is readying a new smart phone that will be marketed to consumers.
AMR Corp (AMR) reported September traffic at American Airlines fell 9.1% from the year-ago period to 9.86 billion revenue passenger miles.
UBS AG (UBS) will cut 2,000 jobs at its troubled investment banking unit.
Sprint Nextel Corp (S) has received interest in its Nextel business from several potential buyers.
Family Dollar Stores (FDO) fourth-quarter profit rises 41%, beating analysts’ expectations.
The Coca-Cola Co. (KO) says it is cutting about 1,100 information technology jobs in a bid to become more efficient.
US Airways Group (LCC) reported September mainline traffic fell 1.0% from the year-ago period to 4.6 billion revenue passenger miles.
Yahoo Inc. (YHOO) denied reports that the company may cut jobs. The company is expected to report results for its third quarter later this month.
Six Flags Inc (SIX) will consider various steps, including a reverse stock split, if its share price does not rebound soon.
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