James Dicks Daily Digest - February 6, 2009

The Labor Department reported the effects of the recession intensified in January, as the unemployment rate jumped to 7.6%, and non-farm payrolls fell by the largest amount in 34 years. Non-farm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December- the largest payroll loss since December 1974.

Canada lost 129,000 jobs last month as the unemployment rate surged more than half a point to 7.2 percent. It marks the worst monthly employment drop in at least three decades. Canada's previous two recessions in the 1980s and 1990s never had as bad a month.

The Senate could vote on a huge economic stimulus plan today if a bipartisan group of senators can reach an agreement on a compromise that would trim the size of the tax and spending bill. Democratic leaders said they are cautiously optimistic that the group, led by Senators Susan Collins, (R-Maine,) and Ben Nelson, (D-Neb.,) would find a compromise that would cut the cost of the economic revitalization plan by as much as $100 billion.

Bank of America Corp. (BAC) Chief Executive Ken Lewis spent almost a million dollars this week to buy additional shares of his struggling bank. He also told employees in a memo that the bank's board, "unanimously endorsed our business model, strategic direction and the team," at its regular meeting on Jan. 28th.

Royal Bank of Scotland Group PLC (RBS) fired seven non-executive directors as part of the restructuring agreed with the British government when it pumped in around 20 billion pounds to save the bank from collapse. The group's board will now be made up of four executive directors and five non-executive directors.

Ford Motor Co. (F) may have to contribute $4 billion to its pension plan after a 2008 shortfall, a drain on cash that risks pulling the second-largest U.S. automaker closer toward a federal bailout. The collapsing stock market left the fund with a $4.1 billion deficit for its projected obligations, after 2007’s $3 billion surplus.

As anticipated, engineers at Boeing’s (BA) Wichita, Kansas facility have rejected the company's latest contract offer. The union's members voted 88% against the contract, which would have included a 3% pay raise offset by higher out-of-pocket health costs and the elimination of a pension for new employees.

Sharp Corp. announced it will cut 1,500 contract workers in Japan by the end of March, and is headed for a billion dollar annual loss, its first in nearly 60 years. Sharp said costs to restructure its flat-panel display business, together with losses in its stock holdings and regulatory fines would lead to a net loss of 100 billion yen ($1.1 billion) in the current fiscal year through March.

Scheduled U.S. Economic Reports (Next Week)

Wholesale Trade (Dec), Trade Balance (Dec), Federal Budget (Jan), Retail Sales (Jan), Inventories (Dec), Consumer Sentiment (Feb)

In Earnings News

Toyota (TM) fell into the red for the fiscal third quarter. Toyota reported a loss of 164.7 billion yen ($1.81 billion), down sharply from the 458.6 billion yen profit it had the same period the previous year, as the global slump squelched sales. Quarterly sales plunged 28.4 percent to 4.8 trillion yen.

Biogen Idec Inc. (BIIB) said its fourth-quarter profit edged up 3 percent on better sales of its multiple sclerosis drugs. The company said it earned $206.7 million, or 70 cents per share, in the October-December period, up from $201.2 million, or 67 cents per share, a year ago.

Weyerhaeuser Co. (WY) said its fourth-quarter loss increased to more than $1 billion. Weyerhaeuser posted a loss of $1.21 billion, or $5.73 per share, in the quarter. Analysts, on average, anticipated a loss of 57 cents per share.

Teco Energy Inc. (TE) reported its fourth-quarter profit tumbled 87 percent from a year-ago period boosted by a one-time gain, as the Florida market continued to slow. Earnings slid to $22 million, or 10 cents per share. Analysts expected profit of 17 cents per share.

British Airways (BAY) reported a fiscal third-quarter loss as business passengers traveled less and as the British pound weakened. The carrier had an 85 million pound ($124 million) loss in the third quarter, after earning 142 million pounds in the year-earlier period. It recorded an operating loss of 51 million pounds, while revenue edged 6% higher to 2.29 billion pounds.

Scheduled Earnings Reports (Next Week)

Morgan Stanley, Beazer Homes, Credit Suisse, Lions Gate Entertainment, Administaff, Nissan Motors, Lorillard Inc, Whirlpool, DirecTV, Gaylord Entertainment, Pepsi Bottling, Qwest Communications, Coca Cola Enterprises, Coca Cola Company, Aetna, Marriott International, Revlon, Martin Marietta, Abercrombie & Fitch, Wyndham Worldwide

Stocks in the News

News Corp (NWS) reported a fiscal second-quarter loss on a non-cash charge related to the reduced value of its television stations and newspaper assets in the wake of the worldwide financial meltdown.

Aon Corp (AOC) reported fourth-quarter net income of $10 million, or 3 cents a share.

Infineon Technologies (IFX) narrowed its first-quarter net loss to 404 million euros, from 529 million euros recorded at the same point a year ago.

Pitney Bowes Inc (PBI) had a profit of $73.95 million, or 36 cents a share, from a loss of $57.93 million, or 27 cents a share, a year ago.

Synchronoss Technologies (SNCR) said its fourth-quarter earnings fell to $2.7 million, or 9 cents a share.

Corning Inc (GLW) said it is “prepared for lower sales and earnings this year” amid a recession. It will reportedly spend about $630M on research, development and engineering in 2009.

MEMC Electronic Materials Inc (WFR) said it named Ahmad Chatila as president and chief executive, effective March 2nd.