JDfn Daily Digest - October 30, 2008

Gross Domestic Product, shrank at a 0.3 percent annual rate in the July-September quarter, the Commerce Department reported Thursday. It marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.

New applications for state unemployment benefits were unchanged at 479,000 in the week ended Oct. 25th. About 7,500 new claims stemmed from Hurricane Ike, but the effect on the data is starting to diminish. Economists expected claims to fall to 473,000 after a jump in the previous period.

US regulators are working on a new federal program that could provide government guarantees for up to $600 billion of home mortgages to help prevent foreclosures. The plan, being hammered out by the Federal Deposit Insurance Corp and the U.S. Treasury, could provide guarantees for up to 3 million at-risk mortgages.

American Express (AXP) said it will cut 10% of its global workforce, or about 7,000 jobs, in 2009 as part of a $1.8 billion cost-savings plan. The cuts will occur across business units. Also, American Express will suspend management salary increases in 2009, and institute a hiring freeze on open positions.

General Motors and Cerberus Capital Management have resolved the major issues in a proposed GM-Chrysler merger, but the final form of any deal would depend on the financing and government support available.

Yahoo (YHOO) and Time Warner's AOL (TWX) unit are engaged in "meaningful" due diligence about a possible combination, but a deal is reportedly not imminent.

Scheduled U.S. Economic Reports (Friday)

Personal Income/Spending (Sep), Core Inflation (Sep), Employment Cost Index (3Q), Chicago PMI (Oct), Consumer Sentiment (Oct)

In Earnings News

Exxon Mobil (XOM) that net income jumped nearly 58 percent or $2.86 a share in the July-September. That compares with $9.41 billion or $1.70 a share, a year ago. Analysts expected the company to earn $2.39 per share.

Royal Dutch Shell (RDS) reported a 22% rise in third-quarter profit. Net income rose to $8.45 billion from $6.92 billion. Revenue rose 45% to $131.57 billion. Shell is increasing its dividend by 11% to 40 cents a share.

Marathon Oil (MRO) said third-quarter net income rose to $2.06 billion, or $2.90 a share, from $1.02 billion, or $1.49 a share in the year-ago period. Adjusted net income rose to $2.76 a share from $1.48 a share. Analysts expected the firm to post earnings of $2.23 a share.

Volkswagen AG announced its third-quarter net profit increased 28 percent on improved sales in emerging markets and stuck to its forecast of beating last year's sales. The company said its net profit from July-September rose to 1.2 billion euros ($1.6 billion) compared with 947 million euros last year.

Brinks (BCO) net income increased to $48 million, or $1.03 per share, from $25.9 million, or 55 cents per share, in the year-ago period. Analysts expected profit of 89 cents per share on revenue of $921 million.

Expedia (EXPE) reported third-quarter earnings were $95 million, or 33 cents a share, compared to $100 million, or 32 cents a share, in the same period a year ago. Analysts estimated, on average, earnings per share of 39 cents and sales of $830 million.

Wyndham Worldwide Corp. (WYN) said third-quarter earnings jumped 21 percent on higher revenue from more hotel rooms and lower expenses. Net income rose to $142 million, or 80 cents per share. Analysts expected profit of 80 cents per share.

Scheduled Earnings Reports (Friday)

NYSE Euronext, Chevron, Burger King Holdings, Nissan Motors, Progress Energy, Weyerhaeuser, Movie Gallery, Pfizer

Stocks in the News

Colgate-Palmolive (CL) earned $499.9 million, or 94 cents per share. Analysts expected 98 cents.

International Paper’s (IP) third-quarter earnings fell to $149 million or 35 cents a share

Delta Air Lines (DAL) and Northwest Airlines Inc. (NWA) have combined to form the world's largest airline by traffic.

Visa Inc (V) narrowed its fourth-quarter loss to $356 million, or 45 cents a share, from $1.66 billion a year ago.

CBS Corp (CBS) reported a $12.46 billion third-quarter loss, reflecting a $14.12 billion noncash pretax charge.

MetLife (MET) said third-quarter net income came in at $630 million, down from $1.02 billion a year earlier.

Allied Waste (AW) reported third-quarter net income quadrupled to $112.5 million, or 26 cents a share.

Staples (SPLS) expects to report third-quarter earnings of 21 cents to 22 cents a share.

Equity Residential (EQR) reported its third-quarter funds from operations rose to 65 cents a share from 58 cents a share in the year-ago period.

CVS Caremark (CVS) said its third-quarter net income rose to $732.5 million, or 51 cents a share, from $686.6 million, or 47 cents a share.

Hanesbrands Inc (HBI) third-quarter net income fell to $15.9 million, or 17 cents a share.

Alcatel-Lucent (ALU) posted a 43% fall in third-quarter adjusted operating profit as its core carrier division sunk into the red in the first earnings report under its new Chief Executive.