JDfn Daily Digest - October 21, 2008

The Federal Reserve has created a new facility to ease the stress in the short-term debt market. Under the new program, called the Money Market Investor Funding Facility, the Fed will provide funds to a private-sector controlled effort to purchase assets from U.S. money market mutual funds.

The Bank of Canada lowered its target interest rate by a quarter of a percentage point to 2.25%. Policy makers noted "severe strains in financial markets" and lower commodity prices, likely to slow the country's exports.

According to a panel discussion of the executives and their government regulator at the Mortgage Bankers Association annual conference, under their new government-appointed chief executives, Fannie Mae and Freddie Mac are focused on reducing foreclosures, improving liquidity in the mortgage market and restructuring aspects of their business. The two government-sponsored enterprises were taken over by the government in September.

The Federal Deposit Insurance Corporation has challenged Washington Mutual's request for bankruptcy court approval of a $4.4 billion cash transfer from JPMorgan Chase Co. In court papers, the FDIC said it may have "significant claims" against WaMu and to the funds, which WaMu contends are part of its bankruptcy estate.

Kirk Kerkorian says his investment firm has sold 7.3 million of its shares in Ford Motor Co. (F), reducing his stake in the automaker to just over 6 percent. Kerkorian has tried to leave his mark on automakers over the past decade. But his investment firm Tracinda says it sees value elsewhere in industries such as gambling, hotels and oil and gas.

Nissan Motor Co. (NSANY) announced that it would cut auto production at its two domestic plants due to sluggish demand in the United States. Japan's third-biggest automaker will slash output by 28,000 units, mostly Infiniti luxury models, at its factory north of Tokyo.

Scheduled U.S. Economic Reports (Wednesday)

None Scheduled

In Earnings News

Lockheed Martin (LMT) reported third-quarter earnings rose 2 percent as the company recorded strong sales in its information technology business. Its third-quarter earnings totaled $782 million or $1.92 per share while analysts expected $1.89.

UAL Corp. (UAUA) reported a third-quarter loss of $779 million, or $6.13 a share. The airline said operating revenues rose a fraction to $5.6 billion from $5.5 billion. Excluding items, UAL said it lost $1.99 a share. Analysts expected a loss of $1.69 a share on sales of $4.8 billion.

Pfizer Inc. (PFE) says its third-quarter profit tripled, mainly because a huge charge depressed last year's results. Pfizer said it earned $2.3 billion, or 34 cents per share, the latest quarter. Its adjusted earnings amounts to 62 cents a share. That is 2 cents a share more than analysts expected.

Schering Plough (SGP) earned $551 million, or 34 cents per share, compared with profit of $713 million, or 45 cents per share, during the same period a year prior. Analysts expected profit of 31 cents per share on revenue of $4.48 billion.

DuPont Co. (DD) reported net income for the quarter of $367 million, or 40 cents per share, down from $526 million, or 56 cents per share, in last year's third quarter. DuPont's agriculture and nutrition led the company's performance, with sales increasing 22 percent and volume up 5 percent.

U.S. Bancorp (USB) said its third-quarter profit fell 47 percent. The bank reported net income of $576 million, or 32 cents per share, down from $1.10 billion, or 62 cents per share, a year earlier. Analysts expected earnings of 47 cents per share.

Fifth Third Bank (FITB) reported a loss during the third quarter as credit costs skyrocketed. The net loss was $81 million, or 14 cents per share. Analysts, on average, expected earnings of 18 cents per share.

Caterpillar (CAT) said its quarterly earnings fell 6.4 percent. The company reported a third-quarter net profit of $868 million, or $1.39 a share. Analysts expected $1.41 a share.

Brinker International Inc. (EAT), which operates the Chili's Grill & Bar and Romano's Macaroni Grill chains, said fiscal first-quarter profit fell 37 percent. Profit declined to $23.8 million, or 23 cents per share. Analysts expected 20 cents per share.

Biogen Idec Inc. (BIIB) said its third-quarter profit rose 73 percent on higher sales of the multiple sclerosis drugs. The company earned $206.8 million, or 70 cents per share. Analysts expected profit of 90 cents per share.

Scheduled Earnings Reports (Wednesday)

Boeing, Amazon.Com, Merck, Citrix, AT&T, General Dynamics, Philip Morris, McDonalds, Northwest Airlines, Allstate, Northrop Grumman, Wachovia

Stocks in the News

American Express (AXP) third-quarter net income came in at $815 million, or 70 cents a share, down 24% from a year earlier.

Icon (ICLR) third-quarter net income rose 47% to $21.4 million, or 35 cents a share, from $14.5 million, or 24 cents a share, a year earlier.

Nektar Therapeutics (NKTR) will buy Nektar's pulmonary-business unit for $115 million in cash.

Quest Diagnostics (DGX) third-quarter net income rose to $110.8 million, or 57 cents a share.

Celanese Corp (CE) third-quarter profit rose 23% to $158 million, or 97 cents a share, from $128 million, or 76 cents a share, a year earlier.

Netflix Inc (NFLX) third-quarter profit rose 30% as subscriber-acquisition costs declined sharply.

Lexmark International (LXK) reported third-quarter net income of $36.6 million, or 42 cents a share.

Avon Products (AVP) is conducting an investigation of its operations in China over possible violations of the Foreign Corrupt Practices Act.