James Dicks Daily Digest - February 9, 2009

President Obama went on the campaign trail to push his economic stimulus plan, while a crucial procedural vote looms in the Senate. Obama traveled to one of the hardest-hit cities in the United States -- Elkhart, Indiana -- to rally support for an $800 billion plan to boost the flagging U.S. economy and prevent what he's called a "catastrophe" for America. Obama will return to Washington for a prime-time news conference to pitch his economic plan to the nation.

General Motors Corp. (GM) and Chrysler LLC may have to be forced into bankruptcy by the U.S. government to assure repayment of $17.4 billion in federal bailout loans, a course of action the automakers claim would destroy them.

Meantime, GM is discussing taking back some factories from its former parts division, Delphi Corp. Delphi has been operating under Chapter 11 bankruptcy protection for more than three years and like many suppliers is struggling with the shrinking U.S. auto markets. Talks between GM and Delphi have been under way for several weeks.

Nissan Motor Co. (NSANY) is cutting 20,000 jobs, or 8.5 percent of its global work force, to cope with what Japan's third-largest automaker expects will be its first annual loss in nine years. Nissan now expects a 265 billion yen ($2.9 billion) net loss for the fiscal year through March.

OPEC’s secretary general said he is willing to cut oil output further at a meeting in March, adding he would like to see full compliance with existing curbs first. Abdullah al-Badri also told reporters in a briefing that OPEC's compliance with existing oil supply curbs of 4.2 million barrels per day was about 80 percent, based on preliminary data, higher than some estimates.

Hertz Global Holdings (HTZ) has increased retail rental prices at North American airport locations. Retail car rental rates have been increased by $5 a day and $30 a week but its negotiated contract rates are not affected by the increase. The move is to overcome a tough operating environment due in part to higher vehicle depreciation costs, including lower used car values.

Lowe's Companies (LOW) announced that it has revised its compensation policy to allow it to recoup "unearned" performance-based pay from executives. According to the new guidelines, the company's board can seek to take back compensation based on merit if it determines that an executive "engaged in fraud or intentional misconduct that caused or substantially caused a significant restatement of the company's financial results."

Scheduled U.S. Economic Reports (Tuesday)

Wholesale Inventories (Dec)

In Earnings News

NYSE Euronext (NYX) recorded a $1.34 billion loss during the fourth quarter as it was forced to take a charge related to its 2007 acquisition of European exchange Euronext. NYSE Euronext lost $1.34 billion, or $5.06 per share, during the fourth quarter, after a profit of $156 million, or 59 cents per share, during the same quarter a year earlier.

Hasbro Inc. (HAS) earned $93.6 million, or 62 cents per share, in the October-December quarter, down from $133.7 million, or 84 cents per share, a year earlier. Analysts forecast profit of 75 cents per share on sales of $1.27 billion.

Beazer Homes USA Inc. (BZH) announced that its fiscal first-quarter loss narrowed. The company lost $80.3 million, or $2.08 per share. Analysts surveyed expected the homebuilder to lose $1.83 per share on revenue of $273.1 million.

Rohm & Haas (ROH) reported that its fourth-quarter earnings fell 82 percent. The company earned $32 million, or 17 cents per share, compared with $180 million, or 91 cents per share, in the year-ago period. Analysts expected, on average, earnings of 67 cents per share.

Whirlpool Corp. (WHR) said fourth-quarter profit tumbled 77 percent. The company says earnings available to common shareholders slid to $44 million, or 60 cents per share. Analysts forecast earnings of 78 cents per share.

Lorillard Inc. (LO), which makes Newport cigarettes, said its fourth-quarter profit rose 21 percent on higher prices and lower costs. Profit rose to $258 million, or $1.53 per share, from $213 million, or $1.23 per share, a year earlier. Analysts expected a profit of $1.37 per share.

Scheduled Earnings Reports (Tuesday)

Molson Coors Brewing, Applied Materials, Qwest Communications, DirecTV, Choice Hotels International, Gaylord Entertainment, UBS, Pepsi Bottling, Shells Seafood Restaurants, Nvidia, Perot Systems

Stocks in the News

Apple Inc (AAPL) traded higher after FTN Equity Capital raised its rating to buy from neutral.

Disney Co. (DIS) is expected to announce a movie distribution agreement with Steven Spielberg's DreamWorks SKG, three days after General Electric Co.'s Universal Pictures pulled out of a similar deal with DreamWorks.

McDonald’s Corp (MCD) reported global comparable sales rose by 7.1% in January.

U.S. Steel Corp (X) said that about 500 employees have taken a voluntary early-retirement package. The date for most employees to leave is Feb. 28th.

Starbucks Corp (SBUX) will launch selected discounted deals on March 3 in response to the economic pressures facing its customers.

Barclays (BCS) traded higher after its 2008 net income fell 1% to 4.38 billion pounds ($6.46 billion), helped by a lower effective tax rate and several one-off gains.

DryShips (DRYS) reached a preliminary agreement with Nordea Bank Finland PLC to obtain a covenant waiver in connection with an $800 million Primelead loan.