James Dicks Daily Digest - January 20, 2009
Barack Obama took the presidential oath of office at noon today, becoming the first African-American president of the United States before a massive crowd in the nation's capital and millions of viewers around the world. Obama faces high expectations to deliver a rousing speech as he assumes the U.S. presidency. He is confronting the worst economy in at least a generation, marked by massive job losses and a financial crisis that brought Wall Street to its knees.
The Bank of Canada slashed its key interest rate to the lowest since the institution was founded in 1934 and signaled that more cuts may be needed to jolt the economy out of recession and stabilize credit markets. Governor Mark Carney cut the target rate on overnight loans between commercial banks by half a point to 1 percent, lower than the previous record of 1.12 percent in 1958.
Fiat and Chrysler said they have signed a nonbinding agreement for a strategic alliance that would give the Italian auto empire a 35-percent stake in the troubled U.S. carmaker. The two companies said in a joint statement they would share technologies and vehicle platforms. Under the proposed alliance, Fiat would not invest cash in Chrysler but would provide access to its successful small-car platforms, as well as to its more environmentally friendly and fuel-efficient engines.
Toyota Motor Corp (TM) said worldwide sales were down about 5% in 2008 from a year earlier, marking the first decline in annual vehicle sales in a decade. with overall sales falling just shy of 8 million units.
A Latin American billionaire looks to expand his empire in the United States in a deal that could make him the largest shareholder of The New York Times Co. (NYT). The $250 million investment by Mexican tycoon Carlos Slim could provide some synergies with his telecommunications holdings in Latin America.
BMW AG announced it would reduce the working hours for some 26,000 German employees as part of efforts to slow production amid a deepening economic downturn. The company said management and employee representatives have agreed to expand production cutback measures to include shorter work times at selected plants in Germany. It will also reduce the number of temporary workers.
Scheduled U.S. Economic Reports (Wednesday)
It will be a very slow economic week in the U.S. On Wednesday, expect the January Home Builders’ Index and on Thursday, Housing Starts for December.
In Earnings News
Johnson & Johnson (JNJ) reported fourth-quarter earnings rose as cost-cutting overshadowed lower sales of drugs facing generic competition, and it forecast flat 2009 earnings from last year. The company earned $2.71 billion, or 97 cents per share. Analysts, on average, expected 92 cents per share.
J.C. Penny Co.'s (JCP) margins were likely pressured as it increased markdowns and clearance sales during the past few months lowering his fourth-quarter estimate on the company. Most retailers offered aggressive discounts during what turned out to be the weakest holiday season in decades. Department stores were particularly hurt as shoppers hunted for bargains and traded down to discounters.
State Street Corp. (STT) reported rising unrealized losses in its commercial paper program and investment portfolio along with lower fourth quarter profit. State Street, the world's biggest institutional asset manager, reported net income of $65 million, or 15 cents per share. Analysts had expected 58 cents.
TD Ameritrade (AMTD) said it earned $184.4 million, or 31 cents per share, in the quarter that ended Dec. 31, down from $240.8 million, or 40 cents per share, a year ago. Analysts expected Ameritrade to report net income of 31 cents per share.
Forest Laboratories Inc. (FRX) reported its fiscal third-quarter profit fell 38 percent on surging costs for licensing agreements. The company earned $188 million, or 62 cents per share while analysts were expecting 76 cents.
Regions Financial Corp. (RF) reported a fourth-quarter loss due mainly to a $6 billion goodwill impairment charge to reflect declining value in its banking reporting unit. Regions posted a loss of $6.24 billion, or $9.01 per share. Analysts forecast a loss of 8 cents per share for the quarter.
Fastenal Co. (FAST) said its fourth-quarter profit increased 11 percent, narrowly beating analyst expectations on demand for its industrial fasteners. Profit for the quarter rose to $62.5 million, or 42 cents per share. Analysts, on average, predicted a profit of 41 cents per share.
Scheduled Earnings Reports (Wednesday)
UAL Corp, eBay, Abbott Labs, AMR Corp, Progressive Corp, Sara Lee, Coach, Affinity Technology, Kinder Morgan Energy Partners
Stocks in the News
ConocoPhillips (COP) will trim about 4% of its 32,000 employees and reduce the number of contractors it uses as it cuts its capital budget.
Motorola Inc (MOT) was upgraded by Goldman Sachs saying it sees 50% upside to its new 12-month $7 price target.
Palm Inc (PALM) was downgraded to neutral from overweight at J.P. Morgan.
Bank of America (BAC) and Merrill Lynch & Co. saw their debt ratings lowered by Moody's.
Gannett Co. (GCI) is seeking a buyer for certain assets of the Tucson, Arizona, Citizen. The newspaper company said that if it can't close a sale by March 21, it will close the paper.
United Rentals Inc (URI) expects to report a fourth-quarter charge of about $1.1 billion, tied mostly to goodwill from acquisitions the company made from 1997 through 2000.
The Bank of Canada slashed its key interest rate to the lowest since the institution was founded in 1934 and signaled that more cuts may be needed to jolt the economy out of recession and stabilize credit markets. Governor Mark Carney cut the target rate on overnight loans between commercial banks by half a point to 1 percent, lower than the previous record of 1.12 percent in 1958.
Fiat and Chrysler said they have signed a nonbinding agreement for a strategic alliance that would give the Italian auto empire a 35-percent stake in the troubled U.S. carmaker. The two companies said in a joint statement they would share technologies and vehicle platforms. Under the proposed alliance, Fiat would not invest cash in Chrysler but would provide access to its successful small-car platforms, as well as to its more environmentally friendly and fuel-efficient engines.
Toyota Motor Corp (TM) said worldwide sales were down about 5% in 2008 from a year earlier, marking the first decline in annual vehicle sales in a decade. with overall sales falling just shy of 8 million units.
A Latin American billionaire looks to expand his empire in the United States in a deal that could make him the largest shareholder of The New York Times Co. (NYT). The $250 million investment by Mexican tycoon Carlos Slim could provide some synergies with his telecommunications holdings in Latin America.
BMW AG announced it would reduce the working hours for some 26,000 German employees as part of efforts to slow production amid a deepening economic downturn. The company said management and employee representatives have agreed to expand production cutback measures to include shorter work times at selected plants in Germany. It will also reduce the number of temporary workers.
Scheduled U.S. Economic Reports (Wednesday)
It will be a very slow economic week in the U.S. On Wednesday, expect the January Home Builders’ Index and on Thursday, Housing Starts for December.
In Earnings News
Johnson & Johnson (JNJ) reported fourth-quarter earnings rose as cost-cutting overshadowed lower sales of drugs facing generic competition, and it forecast flat 2009 earnings from last year. The company earned $2.71 billion, or 97 cents per share. Analysts, on average, expected 92 cents per share.
J.C. Penny Co.'s (JCP) margins were likely pressured as it increased markdowns and clearance sales during the past few months lowering his fourth-quarter estimate on the company. Most retailers offered aggressive discounts during what turned out to be the weakest holiday season in decades. Department stores were particularly hurt as shoppers hunted for bargains and traded down to discounters.
State Street Corp. (STT) reported rising unrealized losses in its commercial paper program and investment portfolio along with lower fourth quarter profit. State Street, the world's biggest institutional asset manager, reported net income of $65 million, or 15 cents per share. Analysts had expected 58 cents.
TD Ameritrade (AMTD) said it earned $184.4 million, or 31 cents per share, in the quarter that ended Dec. 31, down from $240.8 million, or 40 cents per share, a year ago. Analysts expected Ameritrade to report net income of 31 cents per share.
Forest Laboratories Inc. (FRX) reported its fiscal third-quarter profit fell 38 percent on surging costs for licensing agreements. The company earned $188 million, or 62 cents per share while analysts were expecting 76 cents.
Regions Financial Corp. (RF) reported a fourth-quarter loss due mainly to a $6 billion goodwill impairment charge to reflect declining value in its banking reporting unit. Regions posted a loss of $6.24 billion, or $9.01 per share. Analysts forecast a loss of 8 cents per share for the quarter.
Fastenal Co. (FAST) said its fourth-quarter profit increased 11 percent, narrowly beating analyst expectations on demand for its industrial fasteners. Profit for the quarter rose to $62.5 million, or 42 cents per share. Analysts, on average, predicted a profit of 41 cents per share.
Scheduled Earnings Reports (Wednesday)
UAL Corp, eBay, Abbott Labs, AMR Corp, Progressive Corp, Sara Lee, Coach, Affinity Technology, Kinder Morgan Energy Partners
Stocks in the News
ConocoPhillips (COP) will trim about 4% of its 32,000 employees and reduce the number of contractors it uses as it cuts its capital budget.
Motorola Inc (MOT) was upgraded by Goldman Sachs saying it sees 50% upside to its new 12-month $7 price target.
Palm Inc (PALM) was downgraded to neutral from overweight at J.P. Morgan.
Bank of America (BAC) and Merrill Lynch & Co. saw their debt ratings lowered by Moody's.
Gannett Co. (GCI) is seeking a buyer for certain assets of the Tucson, Arizona, Citizen. The newspaper company said that if it can't close a sale by March 21, it will close the paper.
United Rentals Inc (URI) expects to report a fourth-quarter charge of about $1.1 billion, tied mostly to goodwill from acquisitions the company made from 1997 through 2000.
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