JDfn Daily Digest - October 16, 2008
There's good news on the inflation front, as the Labor Department reported that consumer prices were unchanged in September, with energy prices declining and food prices rising. Energy prices dropped 1.9% after seasonal adjustments, the September data showed. For the second consecutive month, food prices rose by 0.6%.
The Labor Department reported that initial claims for unemployment insurance last week fell 16,000 to a seasonally adjusted level of 461,000. That was below analysts' expectations of 475,000.
The Federal Reserve reported that Industrial Production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August. The September drop was the biggest since December 1974. Capacity utilization - a gauge of inflationary pressures -- fell to 76.4% from 78.7%. This is the lowest level since October 2003.
Conditions in the manufacturing sector in the Philadelphia region deteriorated significantly in October. The Philly Fed diffusion index fell to negative 37.5 in October from positive 3.8 in September. The decline was much larger than expected. Economists were expecting the index to drop to negative 5.0.
According to Freddie Mac's survey the average rates on fixed-rate mortgages shot up this week. The 30-year fixed-rate mortgage averaged 6.46% nationally for the week ending Oct. 16th, up more than half a percentage point from last week's 5.94% average.
The Securities and Exchange Commission has extended the duration of its short selling disclosure rules in what it says is reaction to worries about market volatility. In an interim rule issued this week, the SEC said the new rule will be effective until Aug. 1, 2009.
Scheduled U.S. Economic Reports (Friday)
Housing Starts (Sep), Consumer Sentiment (Oct)
In Earnings News
Citigroup Inc. (C) suffered its fourth straight quarterly loss and cut another 11,000 jobs. The announced a loss of $2.8 billion, or 60 cents per share, in the third quarter. Analysts expected a loss of 70 cents.
Merrill Lynch & Co. (MER) said its third-quarter loss widened as it took more than $12 billion in charges and write-downs tied to the sale of mortgage investments and fallout from the continued credit crisis. The Company lost $5.2 billion, or $5.58 per share. Analysts forecast a loss of $5.22 per share.
Bank of New York Mellon Corp. (BK) said that its third-quarter profit dropped 53 percent. The commercial bank earned $303 million, or 26 cents per share, in the July-to-September period. That's less than half the $642 million, or 56 cents per share, it posted a year ago.
The Hershey Co. (HSY) said it earned almost $124.5 million, or 54 cents a share, on revenue of $1.49 billion for the quarter. Hershey met the 64 cents per share consensus estimate of analysts.
Southwest Airlines Co. (LUV) lost money for the first time in 17 years as falling oil prices forced the company to write down the value of its legendary fuel-hedging transactions in the third quarter. Southwest reported a loss of $120 million in the quarter even as revenue jumped 11.7 percent.
Continental Airlines Inc. (CAL) reported a $236 million loss in the third quarter from a year-ago profit as it battled high fuel costs. Continental reported a loss of $2.14 per share. Excluding one-time expenses, the loss would have totaled $1.32 per share in the latest period, topping analysts' average loss forecast of $1.55.
Winnebago Industries Inc. (WGO) said reported a fourth-quarter loss. The recreational vehicle maker says it lost $12.7 million or 44 cents per share for the quarter. Winnebago also suspended its quarterly dividend of 12 cents per share.
Nokia Corp.'s (NOK) profit plunged 30 percent in the third quarter as the world's largest mobile phone maker saw its market share dip and its revenue fall by 5 percent. Nokia said its profit fell to 1.09 billion Euros ($2.7 billion) in the July-September period from 1.56 billion Euros a year earlier.
Scheduled Earnings Reports (Friday)
Genuine Parts, Burlington Coat Factory, Honeywell International, Concord Camera, Sonic Corp, Comerica, Adams Express
Stocks in the News
Chesapeake Energy Corp (CHK) traded higher after it was announced that BP is exploring fresh acquisitions of properties owned by Chesapeake.
Steel Dynamics (STLD) third-quarter net income reached $193 million, or 98 cents a share, up from $100.6 million, or 53 cents, a year ago.
Huntington Bancshares (HBAN) reported third-quarter net income fell 17% and cut its full-year earnings target.
Peabody Energy Corp (BTU) reported third-quarter net income jumped on 59% higher revenue and raised its earnings estimate for the full year.
Danaher Corp (DHR) third-quarter net income dropped to $372 million from $483.7 million in the year-earlier period.
The Labor Department reported that initial claims for unemployment insurance last week fell 16,000 to a seasonally adjusted level of 461,000. That was below analysts' expectations of 475,000.
The Federal Reserve reported that Industrial Production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August. The September drop was the biggest since December 1974. Capacity utilization - a gauge of inflationary pressures -- fell to 76.4% from 78.7%. This is the lowest level since October 2003.
Conditions in the manufacturing sector in the Philadelphia region deteriorated significantly in October. The Philly Fed diffusion index fell to negative 37.5 in October from positive 3.8 in September. The decline was much larger than expected. Economists were expecting the index to drop to negative 5.0.
According to Freddie Mac's survey the average rates on fixed-rate mortgages shot up this week. The 30-year fixed-rate mortgage averaged 6.46% nationally for the week ending Oct. 16th, up more than half a percentage point from last week's 5.94% average.
The Securities and Exchange Commission has extended the duration of its short selling disclosure rules in what it says is reaction to worries about market volatility. In an interim rule issued this week, the SEC said the new rule will be effective until Aug. 1, 2009.
Scheduled U.S. Economic Reports (Friday)
Housing Starts (Sep), Consumer Sentiment (Oct)
In Earnings News
Citigroup Inc. (C) suffered its fourth straight quarterly loss and cut another 11,000 jobs. The announced a loss of $2.8 billion, or 60 cents per share, in the third quarter. Analysts expected a loss of 70 cents.
Merrill Lynch & Co. (MER) said its third-quarter loss widened as it took more than $12 billion in charges and write-downs tied to the sale of mortgage investments and fallout from the continued credit crisis. The Company lost $5.2 billion, or $5.58 per share. Analysts forecast a loss of $5.22 per share.
Bank of New York Mellon Corp. (BK) said that its third-quarter profit dropped 53 percent. The commercial bank earned $303 million, or 26 cents per share, in the July-to-September period. That's less than half the $642 million, or 56 cents per share, it posted a year ago.
The Hershey Co. (HSY) said it earned almost $124.5 million, or 54 cents a share, on revenue of $1.49 billion for the quarter. Hershey met the 64 cents per share consensus estimate of analysts.
Southwest Airlines Co. (LUV) lost money for the first time in 17 years as falling oil prices forced the company to write down the value of its legendary fuel-hedging transactions in the third quarter. Southwest reported a loss of $120 million in the quarter even as revenue jumped 11.7 percent.
Continental Airlines Inc. (CAL) reported a $236 million loss in the third quarter from a year-ago profit as it battled high fuel costs. Continental reported a loss of $2.14 per share. Excluding one-time expenses, the loss would have totaled $1.32 per share in the latest period, topping analysts' average loss forecast of $1.55.
Winnebago Industries Inc. (WGO) said reported a fourth-quarter loss. The recreational vehicle maker says it lost $12.7 million or 44 cents per share for the quarter. Winnebago also suspended its quarterly dividend of 12 cents per share.
Nokia Corp.'s (NOK) profit plunged 30 percent in the third quarter as the world's largest mobile phone maker saw its market share dip and its revenue fall by 5 percent. Nokia said its profit fell to 1.09 billion Euros ($2.7 billion) in the July-September period from 1.56 billion Euros a year earlier.
Scheduled Earnings Reports (Friday)
Genuine Parts, Burlington Coat Factory, Honeywell International, Concord Camera, Sonic Corp, Comerica, Adams Express
Stocks in the News
Chesapeake Energy Corp (CHK) traded higher after it was announced that BP is exploring fresh acquisitions of properties owned by Chesapeake.
Steel Dynamics (STLD) third-quarter net income reached $193 million, or 98 cents a share, up from $100.6 million, or 53 cents, a year ago.
Huntington Bancshares (HBAN) reported third-quarter net income fell 17% and cut its full-year earnings target.
Peabody Energy Corp (BTU) reported third-quarter net income jumped on 59% higher revenue and raised its earnings estimate for the full year.
Danaher Corp (DHR) third-quarter net income dropped to $372 million from $483.7 million in the year-earlier period.
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