JDfn Daily Digest - October 13, 2008
The U.S. Treasury plans to buy equity in "healthy" financial institutions as part of a multibillion-dollar program designed to kick-start the flow of credit for consumers. Speaking to a group of international bankers, Interim Assistant Secretary for Financial Stability Neel Kashkari said the U.S. is working "around the clock" on the program and detailed the steps Treasury is taking to put it in place.
The Bush administration said it is moving quickly to implement a $700 billion rescue program, including consulting with private law firms on how to buy ownership shares in banks to help thaw frozen lending and get the economy moving again. The announcement came as Europe's central banks began to take unified actions aimed at easing the credit crisis.
International Monetary Fund Managing Director Dominique Strauss-Kahn said that leading economies now have coordinated, detailed and comprehensive plans to resolve the severe credit crisis. He said almost all of the affected nations now have taken strong action to shore up their financial sectors.
OPEC said over the weekend, in a statement to the International Monetary Fund, that without a quick end to the financial market crises and improvement in the global economic outlook, the bearish sentiment in the oil market is likely to continue.
Morgan Stanley (MS) completed a deal to receive a $9 billion investment from Japanese bank Mitsubishi UFJ Financial Group Inc. (MTU), giving it a much-needed cash infusion. The deal, which gives Mitsubishi a 21 percent stake in Morgan Stanley, was revised after Morgan Stanley lost nearly 60 percent of its value last week amid speculation the deal would not close.
The Machinists union says negotiations to end a five-week strike at the Boeing Co. (BA) have begun. An agreement to renew contract talks for the first time since the strike began on Sept. 6th was announced last week. Boeing and union spokesmen have said the two sides agreed to a media blackout on the negotiations.
Waste Management Inc. (WMI), the nation's largest garbage hauler, withdrew its $6.73 billion bid to acquire smaller rival Republic Services (RSG), saying the move wouldn't be prudent given current financial market turmoil.
Scheduled U.S. Economic Reports (Tuesday)
Retail Chain Index (Week of Oct 11)
In Earnings News
The Travelers Cos. (TRV) said it expects the effects of Hurricanes Ike, Gustav and Dolly to hurt its pretax earnings in the third quarter by $1.05 billion. The insurer also said it recorded third-quarter net realized investment losses of $170 million pretax.
Royal Philips Electronics NV (PHG) reported an 11 percent rise in net income for the third quarter, due to a one-time gain from the sale of shares it held in another company. It reported net profit of euro357 million ($484 million), up from euro331 million in the same period a year earlier. But sales fell 2 percent to euro6.47 billion ($8.77 billion).
Affymetrix Inc. (AFFX) said its third-quarter revenue fell below expectations because of increased competition and weak industrial spending. The company said it had revenue of about $75 million, based on a preliminary analysis. Analysts expected revenue of $90.1 million.
Sinclair Broadcast Group Inc. (SBGI) said that its preliminary third-quarter results show slightly higher-than-expected net broadcast revenue. For the quarter, the company said early results show net broadcast revenue of $150.1 million, including $8.7 million in political advertising revenue.
Scheduled Earnings Reports (Tuesday)
Intel, Johnson & Johnson, CSX Corp, Genentech, PepsiCo, Bank of the Ozarks, Dominoes, WW Grainger, Adtran
Stocks in the News
Cisco Systems (CSCO) was upgraded to market outperform from market perform by JMP Securities.
GM (GM) and Chrysler have been in early talks about a merger, as two of the largest U.S. car makers seek ways to cut costs in the face of a sales slump.
Citigroup (C) ratings are on review for possible downgrade at both Standard & Poor's and Moody's after the bank lost its bid for Wachovia.
Apple (AAPL) was upgraded to “buy,” but its price target was cut to $135.
Limited Brands (LTD) plans to buy back as much as $250 million of stock.
Park-Ohio Holdings Corp (PKOH) cut its full-year earnings estimate, "reflecting unprecedented weakness and volatility in the automotive markets."
Tesoro Corp (TSO) expects third-quarter earnings per share in the range of $1.70 to $1.90, which includes a last-in-first-out benefit of 29 cents a share.
Wachovia Corps (WB) acquisition by Wells Fargo was approved by the Federal Reserve.
Apria Healthcare Group (AHG) said its shareholders approved a $21-a-share bid for the company from Blackstone Group.
The Bush administration said it is moving quickly to implement a $700 billion rescue program, including consulting with private law firms on how to buy ownership shares in banks to help thaw frozen lending and get the economy moving again. The announcement came as Europe's central banks began to take unified actions aimed at easing the credit crisis.
International Monetary Fund Managing Director Dominique Strauss-Kahn said that leading economies now have coordinated, detailed and comprehensive plans to resolve the severe credit crisis. He said almost all of the affected nations now have taken strong action to shore up their financial sectors.
OPEC said over the weekend, in a statement to the International Monetary Fund, that without a quick end to the financial market crises and improvement in the global economic outlook, the bearish sentiment in the oil market is likely to continue.
Morgan Stanley (MS) completed a deal to receive a $9 billion investment from Japanese bank Mitsubishi UFJ Financial Group Inc. (MTU), giving it a much-needed cash infusion. The deal, which gives Mitsubishi a 21 percent stake in Morgan Stanley, was revised after Morgan Stanley lost nearly 60 percent of its value last week amid speculation the deal would not close.
The Machinists union says negotiations to end a five-week strike at the Boeing Co. (BA) have begun. An agreement to renew contract talks for the first time since the strike began on Sept. 6th was announced last week. Boeing and union spokesmen have said the two sides agreed to a media blackout on the negotiations.
Waste Management Inc. (WMI), the nation's largest garbage hauler, withdrew its $6.73 billion bid to acquire smaller rival Republic Services (RSG), saying the move wouldn't be prudent given current financial market turmoil.
Scheduled U.S. Economic Reports (Tuesday)
Retail Chain Index (Week of Oct 11)
In Earnings News
The Travelers Cos. (TRV) said it expects the effects of Hurricanes Ike, Gustav and Dolly to hurt its pretax earnings in the third quarter by $1.05 billion. The insurer also said it recorded third-quarter net realized investment losses of $170 million pretax.
Royal Philips Electronics NV (PHG) reported an 11 percent rise in net income for the third quarter, due to a one-time gain from the sale of shares it held in another company. It reported net profit of euro357 million ($484 million), up from euro331 million in the same period a year earlier. But sales fell 2 percent to euro6.47 billion ($8.77 billion).
Affymetrix Inc. (AFFX) said its third-quarter revenue fell below expectations because of increased competition and weak industrial spending. The company said it had revenue of about $75 million, based on a preliminary analysis. Analysts expected revenue of $90.1 million.
Sinclair Broadcast Group Inc. (SBGI) said that its preliminary third-quarter results show slightly higher-than-expected net broadcast revenue. For the quarter, the company said early results show net broadcast revenue of $150.1 million, including $8.7 million in political advertising revenue.
Scheduled Earnings Reports (Tuesday)
Intel, Johnson & Johnson, CSX Corp, Genentech, PepsiCo, Bank of the Ozarks, Dominoes, WW Grainger, Adtran
Stocks in the News
Cisco Systems (CSCO) was upgraded to market outperform from market perform by JMP Securities.
GM (GM) and Chrysler have been in early talks about a merger, as two of the largest U.S. car makers seek ways to cut costs in the face of a sales slump.
Citigroup (C) ratings are on review for possible downgrade at both Standard & Poor's and Moody's after the bank lost its bid for Wachovia.
Apple (AAPL) was upgraded to “buy,” but its price target was cut to $135.
Limited Brands (LTD) plans to buy back as much as $250 million of stock.
Park-Ohio Holdings Corp (PKOH) cut its full-year earnings estimate, "reflecting unprecedented weakness and volatility in the automotive markets."
Tesoro Corp (TSO) expects third-quarter earnings per share in the range of $1.70 to $1.90, which includes a last-in-first-out benefit of 29 cents a share.
Wachovia Corps (WB) acquisition by Wells Fargo was approved by the Federal Reserve.
Apria Healthcare Group (AHG) said its shareholders approved a $21-a-share bid for the company from Blackstone Group.
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