JDfn Daily Digest - October 22, 2008

The White House has announced that World leaders will meet Nov. 15th in Washington to address the global financial crisis -- the first in a series of summits to ease what economists predict could be a long and deep downturn.

U.S. Treasury Undersecretary David McCormick said the U.S. economy is in for a challenging few quarters but could start to recover late next year. McCormick told a lunch in Hong Kong, "The coming quarters will be very challenging." He also said that it is his hope is that the U.S. economy will turn upward toward the end of 2009.

Swiss bank UBS said in a report that Britain and the U.S. will suffer most from a global recession predicted to last until the middle of next year. According to UBS economists, U.S. gross domestic product is expected to shrink by 0.7 percent in 2009, with Britain's economy losing twice that share, or 1.4 percent.

The Federal Reserve is raising the interest rate it pays commercial banks on excess reserves, helping the central bank battle the credit crisis. The move is expected to encourage banks to keep excess reserves at the Fed because they will be earning higher interest on that money. That will give the Fed more control over interest rates and more leverage to battle the credit crisis.

Google (GOOG) is jumping into the mobile phone business with its new G1 phone. The G1 is available starting today for $179 with a two-year contract from T-Mobile. The new phone features a touch screen, slide-out keyboard and a trackball. This alternative to Apple's (AAPL) iPhone is the first cell phone powered by Google's Android operating system.

Wal-Mart Stores Inc. (WMT) said it will set new quality standards for its suppliers amid a scare over toxic milk products that have sickened tens of thousands of babies across China. At the same time, the United Nations released a report that recommends China increase oversight of its food safety system and hold businesses accountable for their products.

Scheduled U.S. Economic Reports (Thursday)

Initial Jobless Claims (Week of October 17th)

In Earnings News

ConocoPhillips (COP) reported third-quarter profit rose 41 percent due largely to record oil prices this summer. The company said net income for the quarter rose to $5.18 billion, or $3.39 per share. Analysts expected earnings, on average, of $3.06 per share.

AT&T (T) earned $3.23 billion, or 55 cents per share, in the quarter, up from $3.06 billion, or 50 cents per share, in the same period a year ago. Analysts were expecting 71 cents per share.

Wachovia Bank (WB) reported a net loss after paying preferred dividends of $23.89 billion, or $11.18 per share, in the quarter, compared with earnings of $1.62 billion, or 85 cents per share, a year earlier. Analysts, on average, had expected earnings of 2 cents per share.

Merck & Co. (MRK) announced that it will cut 7,200 jobs as part of a new restructuring program that comes as its third-quarter profit plunged 28 percent. The Company reported net income for its third quarter amounts to $1.09 billion, or 51 cents per share.

McDonald's (MCD) says its third-quarter profit jumped 11 percent, beating Wall Street estimates on another quarter of strong sales both overseas and in the U.S. McDonalds earned $1.19 billion, or $1.05 per share, in the quarter. Analysts expected 98 cents per share.

General Dynamics (GD) announced that third quarter earnings were up 16 percent on higher sales in its shipbuilding unit. The Company earned $634 million, or $1.59 per share, for the quarter. Analysts were expecting $1.51 per share.

Boeing Co. (BA) reported its third-quarter earnings plummeted 38 percent as a strike and supplier production problems hurt results. The company said it earned $695 million or 96 cents per share in the quarter. Analysts, on average, expected earnings per share of 98 cents.

Northwest Airlines (NWA) reported a third-quarter loss on higher fuel costs and charges related to its fuel-hedging program. For the recent quarter the airline said it lost $317 million, or $1.20 a share, compared to a gain of $244 million, or 93 cents a share, in the year-ago quarter.

Philip Morris International (PM) said its third-quarter profit rose 20.6 percent as sales climbed and a weak dollar boosted results. Excluding one-time costs, the company said it earned 93 cents per share in the quarter, beating the Wall Street consensus estimate.

Kimberly-Clark Corp. (KMB) said its third-quarter profit declined 9 percent. Net income declined to $413.1 million, or 99 cents per share, from $453.1 million, or $1.04 per share, last year. Analysts expected profit of $1.01 per share.

Scheduled Earnings Reports (Thursday)

Microsoft, UPS, 1-800-Flowers, AirTran Holdings, JetBlue Airways, Credit Suisse, Bristol Myers Squibb, Goodrich, Black & Decker, Coca Cola Enterprises, Level 3 Communications, Raytheon, Eli Lilly

Stocks in the News

Dollar Thrifty Automotive (DTG) expects to report a third-quarter profit and expects to end the quarter with an unrestricted cash balance in excess of $200 million, up from $80 million at the end of June.

Broadcom Corp (BRCM) reported third-quarter net income of $164.9 million, or 31 cents a share.

Apple (AAPL) reported fiscal fourth-quarter profit of $1.14 billion, or $1.26 a share.

Knight Capital (NITE) third-quarter net income more than doubled to $36.3 million, or 40 cents a share.

Tupperware Brands (TUP) reported that third-quarter profit quadrupled on 13% higher revenue, and it said it would speed up its stock buyback.

Elbit Systems Ltd (ESLT), an Israeli, defense contractor, was awarded about $100 million of contracts to supply communications systems to armies in three countries.

C.H. Robinson Worldwide (CHRW) reported third-quarter profit of $93.6 million, or 54 cents a share.