JDfn Daily Digest - July 24, 2008
The Labor Department reported that first-time claims for initial unemployment benefits rose to the highest level since late March in the latest week. The number of initial claims in the latest reporting period rose 34,000 to 406,000. The consensus forecast was for claims to increase to 380,000.
The National Association of Realtors reported that sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That's more than double the expected decline. The median price for a home sold in June has dropped to $215,100 which is down by 6.1 percent from a year ago.
The U.S. Senate will begin debate on housing legislation designed to prop up confidence in Fannie Mae (FNM) and Freddie Mac (FRE) and curtail record mortgage foreclosures. It was approved by the House yesterday. The final vote was 272-152 in favor of the measure, which is expected to be passed in the Senate and signed into law by President Bush.
The government has charged an oil trading firm with manipulating oil prices. The Commodity Futures Trading Commission charged Optiver Holding, two of its subsidiaries, and three employees, with manipulation. The alleged manipulation was attempted 19 times on 11 days in March, 2007, the agency said. In at least five of those 19 times, traders succeeded in driving prices higher twice and lower three times.
General Electric (GE) said it will purchase Vital Signs (VITL) for $74.50 a share. Vital Signs will become part of GE Healthcare's Clinical Systems business. GE said the price is $860 million net of Vital Signs' cash and investments, a 28 percent premium over Wednesday’s close.
A tentative deal was reportedly reached at the Federal Communications Commission to approve the merger of XM (XMSR) and Sirius Satellite Radio (SIRI). The two satellite radio companies have agreed to pay $19.7 million to settle rules violations which is expected to lead to quick approval of the merger.
The legal battles between Nokia Corp. (NOK) and Qualcomm Inc. (QCOM) stopped months ago, part of what officials at the wireless industry heavyweights described as a truce in a long-running battle that spanned three continents. Agreement was reached as the two companies prepared for a courtroom confrontation.
Nearly two million Americans got a raise today as the federal minimum wage increased 70 cents. The bad news: higher gas and food prices are eating it up, and some small businesses will pass the cost of the wage increase to consumers. The minimum wage increased from $5.85 to $6.55 per hour.
Scheduled Economic Reports (Friday)
Durable Goods Orders (June), Consumer Sentiment (July), New Home Sales (June)
In Earnings News
Ford Motor Co. (F) announced that it lost $8.67 billion in the second quarter largely because of a reduction in the value of assets. The second-quarter loss was $3.88 per share, compared with net profit of $750 million, or 31 cents per share, in the same quarter a year ago. Analysts expected a 27 cent loss per share.
Occidental Petroleum (OXY) reported its second-quarter profit increased 62 percent, as record crude prices and higher production helped their results. The company earned a record $2.29 billion, or $2.78 per share. Analysts expected $2.75 a share.
Eli Lilly & Co. (LLY) posted a 44 percent increase in second-quarter earnings as sales growth was helped in part by the weaker dollar. Excluding one-time costs for restructuring and other items, the company's earnings were 99 cents per share in the latest period. Analysts expected earnings of $1 per share.
Southwest Airlines (LUV) says its profit rose in the second quarter as the company saved money on fuel, and revenue increased 11 percent. The airline said it earned $321 million, or 44 cents per share.
Dow Chemical Co. (DOW) said that despite record sales and two double-digit price increases in the second quarter, its profit for the period fell 27 percent. The company said its net income for the quarter was $762 million, or 81 cents per share.
Daimler AG (DAI) said its second-quarter profit slipped 25 percent, mainly on charges related to Daimler's interest in Chrysler LLC. The company said profit in the quarter fell to 1.39 billion euros ($2.2 billion).
Bristol-Myers Squibb Co. (BMY) reported an 8 percent increase in second-quarter profit. Bristol-Myers reported net income of $764 million, or 38 cents per share. Analysts expected earnings per share of 40 cents.
Xerox Corp.'s (XRX) second-quarter profit skidded 19 percent, but matched Wall Street's forecast. Xerox said that net income in the second quarter was $215 million, or 24 cents per share. Analysts expected 24 cents per share in profit.
Scheduled Earnings Reports (Friday)
Fortune Brands, Honda Motor Ltd, Brookstone, Netflix, Legg Mason, Federal Mogul, T Rowe Price, Arch Coal
Stocks in the News
AT&T (T) was downgraded to neutral from overweight by J.P. Morgan. Morgan said it anticipates further deterioration of “wired fundamentals.”
Compuware Corp (CPWR) reported first-quarter net income of $34.7 million, or 13 cents a share.
Amerigroup Corp (AGP) reported a second-quarter loss of $162.5 million, or $3.07 a share.
Pulte Homes Inc (PHM) narrowed its second-quarter loss to $158.4 million, or 63 cents a share.
Medco Health Solutions (MHS) reported second-quarter net income rose 22% on 16% higher revenue.
Amazon.com (AMZN) reported second-quarter earnings of $158 million, or 37 cents a share.
McKesson Corp’s (MCK) first-quarter net income was $235 million, or 83 cents a share.
RadioShack (RSH) reported that second-quarter net income fell 12% to $41.4 million, or 32 cents a share.
The National Association of Realtors reported that sales of existing homes fell by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That's more than double the expected decline. The median price for a home sold in June has dropped to $215,100 which is down by 6.1 percent from a year ago.
The U.S. Senate will begin debate on housing legislation designed to prop up confidence in Fannie Mae (FNM) and Freddie Mac (FRE) and curtail record mortgage foreclosures. It was approved by the House yesterday. The final vote was 272-152 in favor of the measure, which is expected to be passed in the Senate and signed into law by President Bush.
The government has charged an oil trading firm with manipulating oil prices. The Commodity Futures Trading Commission charged Optiver Holding, two of its subsidiaries, and three employees, with manipulation. The alleged manipulation was attempted 19 times on 11 days in March, 2007, the agency said. In at least five of those 19 times, traders succeeded in driving prices higher twice and lower three times.
General Electric (GE) said it will purchase Vital Signs (VITL) for $74.50 a share. Vital Signs will become part of GE Healthcare's Clinical Systems business. GE said the price is $860 million net of Vital Signs' cash and investments, a 28 percent premium over Wednesday’s close.
A tentative deal was reportedly reached at the Federal Communications Commission to approve the merger of XM (XMSR) and Sirius Satellite Radio (SIRI). The two satellite radio companies have agreed to pay $19.7 million to settle rules violations which is expected to lead to quick approval of the merger.
The legal battles between Nokia Corp. (NOK) and Qualcomm Inc. (QCOM) stopped months ago, part of what officials at the wireless industry heavyweights described as a truce in a long-running battle that spanned three continents. Agreement was reached as the two companies prepared for a courtroom confrontation.
Nearly two million Americans got a raise today as the federal minimum wage increased 70 cents. The bad news: higher gas and food prices are eating it up, and some small businesses will pass the cost of the wage increase to consumers. The minimum wage increased from $5.85 to $6.55 per hour.
Scheduled Economic Reports (Friday)
Durable Goods Orders (June), Consumer Sentiment (July), New Home Sales (June)
In Earnings News
Ford Motor Co. (F) announced that it lost $8.67 billion in the second quarter largely because of a reduction in the value of assets. The second-quarter loss was $3.88 per share, compared with net profit of $750 million, or 31 cents per share, in the same quarter a year ago. Analysts expected a 27 cent loss per share.
Occidental Petroleum (OXY) reported its second-quarter profit increased 62 percent, as record crude prices and higher production helped their results. The company earned a record $2.29 billion, or $2.78 per share. Analysts expected $2.75 a share.
Eli Lilly & Co. (LLY) posted a 44 percent increase in second-quarter earnings as sales growth was helped in part by the weaker dollar. Excluding one-time costs for restructuring and other items, the company's earnings were 99 cents per share in the latest period. Analysts expected earnings of $1 per share.
Southwest Airlines (LUV) says its profit rose in the second quarter as the company saved money on fuel, and revenue increased 11 percent. The airline said it earned $321 million, or 44 cents per share.
Dow Chemical Co. (DOW) said that despite record sales and two double-digit price increases in the second quarter, its profit for the period fell 27 percent. The company said its net income for the quarter was $762 million, or 81 cents per share.
Daimler AG (DAI) said its second-quarter profit slipped 25 percent, mainly on charges related to Daimler's interest in Chrysler LLC. The company said profit in the quarter fell to 1.39 billion euros ($2.2 billion).
Bristol-Myers Squibb Co. (BMY) reported an 8 percent increase in second-quarter profit. Bristol-Myers reported net income of $764 million, or 38 cents per share. Analysts expected earnings per share of 40 cents.
Xerox Corp.'s (XRX) second-quarter profit skidded 19 percent, but matched Wall Street's forecast. Xerox said that net income in the second quarter was $215 million, or 24 cents per share. Analysts expected 24 cents per share in profit.
Scheduled Earnings Reports (Friday)
Fortune Brands, Honda Motor Ltd, Brookstone, Netflix, Legg Mason, Federal Mogul, T Rowe Price, Arch Coal
Stocks in the News
AT&T (T) was downgraded to neutral from overweight by J.P. Morgan. Morgan said it anticipates further deterioration of “wired fundamentals.”
Compuware Corp (CPWR) reported first-quarter net income of $34.7 million, or 13 cents a share.
Amerigroup Corp (AGP) reported a second-quarter loss of $162.5 million, or $3.07 a share.
Pulte Homes Inc (PHM) narrowed its second-quarter loss to $158.4 million, or 63 cents a share.
Medco Health Solutions (MHS) reported second-quarter net income rose 22% on 16% higher revenue.
Amazon.com (AMZN) reported second-quarter earnings of $158 million, or 37 cents a share.
McKesson Corp’s (MCK) first-quarter net income was $235 million, or 83 cents a share.
RadioShack (RSH) reported that second-quarter net income fell 12% to $41.4 million, or 32 cents a share.
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