James Dicks Daily Digest - January 27, 2009

President Obama heads to Capitol Hill intending to work out differences with Republicans over his proposed economic-stimulus plan. Obama is scheduled to hold separate meetings with both House and Senate Republicans, spending about an hour and a half with lawmakers. The meetings come a day ahead of an expected vote in the House on the stimulus plan, which Obama says will create or retain 3 million to 4 million jobs.

The January Conference Board consumer confidence index fell to 37.7 from an upwardly revised 38.6 in December. Economists expected a January reading of 38. The Conference Board said that consumers remain quite pessimistic about the state of the economy and about their earnings.

Fed Chairman Ben Bernanke and his colleagues have opened a two-day meeting, where they will take a fresh look at the nation’s economic and financial conditions. They are all but certain to leave a key interest rate at a record low to try to brace the sinking economy. The FOMC announcement is scheduled for Wednesday afternoon at 2:15 pm (Eastern Time).

William Dudley, head of markets at the Federal Reserve Bank of New York and an architect of the central bank’s response to the financial crisis will succeed Timothy Geithner as president of the bank. Geithner was sworn in as Treasury secretary yesterday after winning a confirmation vote in the Senate by 60-34. Dudley was endorsed by Geithner during the search process.

The Case-Shiller 20-city home price index fell 2.2% in November, with home values in all 20 cities falling at least 1%. Falling home values have helped to plunge the global financial system into chaos because of mortgage-backed securities. Home owners have lost trillions of dollars of wealth.

Retailers are expected to record a 0.5 percent drop in revenue this year, the first annual decline in three decades and perhaps much longer. That's well below the modest 1.4 percent gain they recorded for 2008. Massive corporate layoffs, slumping home prices and tight credit are keeping shoppers out of the stores.

The Senate voted unanimously to postpone the upcoming transition from analog to digital television broadcasting by four months to June 12th — setting the stage for Congress to pass the proposal this week. The Senate vote is a big victory for the Obama administration, which has been pushing for a delay amid growing concerns that too many Americans won't be ready for the currently scheduled Feb. 17 changeover.

Scheduled U.S. Economic Reports (Wednesday)

Federal Open Market Committee Announcement (2:15 pm – Eastern Time)

In Earnings News

Bristol Myers Squibb (BMY) reported a big fourth-quarter profit, after hefty charges led to a loss a year ago. The company says net income for the quarter ending in December totaled $1.24 billion, or 63 cents a share.

DuPont (DD) reported a net loss of $629 million, or 70 cents a share, a reversal after earning $545 million, or 60 cents a share, in the year-earlier quarter. Analysts were looking for a loss of 20 cents a share.

Delta Air Lines (DAL) lost $340 million, or 50 cents a share. Analysts expected a loss of 34 cents a share. Delta said the analyst estimates did not factor in 12 cents per share loss related to the non-cash impact of purchase accounting.

Corning Inc. (GLW) said it is cutting 3,500 jobs, or 13 percent of its payroll, as demand slumps for glass used in flat-screen televisions and computers. The company announced the cutbacks as its fourth-quarter profit plunged 65 percent to $249 million, or 16 cents a share. Its profit came in well below Wall Street's forecast of 20 cents a share.

Verizon Communications Inc. (VZ) posted a 15 percent earnings increase for the fourth quarter. Verizon earned $1.24 billion, or 43 cents per share, up from $1.07 billion, or 37 cents per share, a year earlier.

U.S. Steel's (X) reported net income of $308 million, or $2.65 per share. In the year-earlier period, it earned $35 million, or 29 cents per share. Analysts estimated U.S. Steel would earn 71 cents per share on revenue of $4.27 billion.

St. Jude Medical, Inc. (STJ) reported a loss of $194 million in fourth quarter of 2008, or 56 cents a share, from net income of $118 million, or 34 cents a share, in the year-earlier period. Analysts expected 58 cents.

Scheduled Earnings Reports (Wednesday)

AT&T, Boeing Co., Pfizer, General Dynamics, ConocoPhillips, New York Times, Hess Corp, AirTran Holdings, Legg Mason, Starbucks, Wells Fargo

Stocks in the News

Navistar International (NAV) said it will close its engine plant and a foundry, both in Indianapolis, by July 31st, citing changes in its business relationship with Ford Motor Co. (F).

Campbell Soup Co. (CPB) elected Paul Charron to succeed Harvey Golub as chairman, effective in August.

Netflix Inc (NFLX) said its fourth-quarter profit rose 45% as subscriber-acquisition costs declined sharply.

Weyerhaeuser Co. (WY) is closing two mills in Washington State due to weak market conditions.

Pactiv Corp (PTV), maker of Hefty trash bags and plastic cookware utensils, reported fourth-quarter net income rose on increased selling prices, lower commodity costs, and manufacturing downtime.

McKesson Corp (MCK) reported a third-quarter loss of $20 million, or 7 cents a share, vs. a profit of $201 million, or 69 cents a share, a year earlier.

Steel Dynamics Inc (STLD) hit by "significant weakening" in the steel and metal recycling sector, reported a fourth-quarter net loss of $82.7 million, or 45 cents a share.

Zions Bancorp (ZION) a fourth-quarter loss as it bolstered loan-loss reserves and took charges.

Crane Company (CR) reported a fourth-quarter net loss of $8.3 million, or 14 cents a share.

Texas Instruments (TXN) reported fourth-quarter net income of $107 million, or 8 cents a share, compared with $756 million, or 54 cents a share, for the year-earlier period.