JDfn Daily Digest - October 28, 2008

Fed Chairman Ben Bernanke and his colleagues will open a two-day meeting starting today -- the last before the November elections -- to make a fresh assessment of economic and financial conditions and decide their next move on interest rates. Their decision will be announced Wednesday at 2:15 pm (Eastern Time).

Former Federal Reserve Chairman Paul Volcker said there "can't be any doubt we're in a recession" and that, while he did not know how deep the economic downturn would be, he said "I suspect it will be rather long before we get back to robust growth."

The government has cleared the way to ship out $125 billion this week to the country's largest banks, beginning the biggest government bailout in history. Before the end of the year, Treasury Secretary Henry Paulson intends to have spent $250 billion of the $700 billion bailout package buying ownership stakes in U.S. banks.

According to the Case-Shiller home price index, home prices in 20 major U.S. cities dropped 1% in August compared with July and had fallen a record 16.6% from the previous year. Prices have fallen in all 20 cities compared with a year ago.

The October consumer confidence index fell to 38 from an upwardly revised September reading of 61.4. Economists expected an October reading of 52. Expectations turned "significantly more pessimistic," with more consumers expecting business conditions to worsen over the next six months.

According to a survey released by the International Council of Shopping Centers, U.S. chain-store sales for the week ended Oct. 25th rose 1.3% from the year-ago period. On a week-over-week basis, sales rose 0.5%.

Volkswagen's massive stock price surge has briefly allowed Europe's top automaker to stake the claim as the world's largest company by market capitalization, passing oil giant Exxon Mobil (XOM).

General Motors Corp (GM) and Cerberus Capital Management have asked the U.S. government for about $10 billion in an unprecedented rescue package to support a merger between GM and Chrysler LLC.

A tentative four-year agreement with wage increases totaling 15 percent was reached to end a machinists' strike that has shut down Boeing Co. (BA) commercial airplane operations since Sept. 6th.

Whirlpool Corp. (WHR) announced it will cut about 5,000 jobs by the end of 2009 because of the global credit crisis and its expectation for continued reduced demand in North America and Europe.

Scheduled U.S. Economic Reports (Wednesday)

Durable Goods (Sep), FOMC Announcement (2:15 p.m. Eastern Time)

In Earnings News

Occidental Petroleum Corp. (OXY) says its third-quarter profit rose 71 percent, lifted by higher oil and natural gas prices and increased production. The company says net income for the quarter rose to $2.27 billion, or $2.78 a share. Analysts expected earnings, on average, of $2.71 per share.

BP Plc (BP) reported a huge 83-percent rise in third-quarter net profit on the back of surging energy prices. BP posted net profit of $8.05 billion for the July to September quarter -- up from $4.41 billion in the same period a year earlier.

Valero (VLO), the nation's largest independent oil refiner, says third-quarter profit fell 9 percent from a year ago, when the company sold a refinery. Income from continuing operations was $1.15 billion, or $2.18 a share, versus $848 million, or $1.34 a share, a year ago.

Royal Caribbean Cruises (RCL) says its third-quarter earnings rose 4 percent as the cruise operator increased capacity, reduced costs and received a $17.6 million legal settlement. Earnings rose to $411.9 million, or $1.92 per share. Analysts forecast earnings of $1.66 on revenue of $2.05 billion.

McGraw-Hill Cos. (MHP) said third-quarter earnings fell 14 percent. Earnings fell to $390.2 million, or $1.23 per share, in the quarter from $452 million, or $1.34 per share, in the prior year. Analysts forecast third-quarter earnings of $1.22 per share.

Honda (HMC) reported a 41 percent drop in quarterly profit on declining sales and a stronger yen, forcing Japan's second-biggest automaker to lower its forecasts for the full year.

Fresh Del Monte Produce Inc. (FDP) reported its third-quarter profit fell 2 percent on higher costs and unfavorable foreign exchange rates. The company earned $29.3 million, or 46 cents per share. Analysts expected profit of 26 cents per share.

Scheduled Earnings Reports (Wednesday)

Office Depot, Procter & Gamble, Visa, Cardinal Health, Aetna, MetLife, Comcast, Kellogg, Hess, Invesco, Corning, JDS Uniphase, Kraft Foods, Jones Apparel, Legg Mason

Stocks in the News

Entergy Corp. (ETR) reported third-quarter net income rising to $470 million, or $2.41 a share, from $461 million, or $2.30 a share, in the year-ago period.

Estee Lauder (EL) fiscal first-quarter profit rose to $51.1 million, or 26 cents a share.

Hercules Company (HPC) reported third-quarter net income of $39.5 million, or 35 cents a share.

Centene Corp (CNC) third-quarter net profit rose 15% to $18.2 million, or 41 cents a share.

Meritage Homes Corp (MTH) said its third-quarter loss widened to $144 million or $4.69 a share.

Hunstman Corp (HUN) said that it doesn't expect to close its planned purchase by Apollo Management's Hexion Specialty Chemicals.

Check Point Software Technologies (CHKP) reported third-quarter net income rose 4.3% on 8.5% higher revenue.

Ashland Inc (ASH) posted a fourth-quarter loss of $10 million, or 15 cents a share, against earnings of $32 million, or 51 cents, in the year-earlier period.

Plum Creek Timber (PCL) reported its third-quarter net income rose to $69 million, or 40 cents a share, from $59 million, or 34 cents a share, in the year-earlier quarter.