James Dicks Daily Digest - February 17, 2009

President Barack Obama signed a $787 billion stimulus bill into law, enacting a measure he says will create 3.5 million jobs and re-energizes the suffering U.S. economy. The stimulus will put the economy on a "firmer foundation," Obama said before signing the bill in Denver, Colorado. It passed both houses of Congress on Friday.

In its latest effort to stem the financial crisis, the Obama administration plans to announce details about a $50 billion program to modify mortgages for troubled homeowners. The Treasury plans to use $50 billion of the remaining $350 billion in a bank-bailout fund for a program to help troubled homeowners avoid defaulting on their loans by subsidizing mortgage payments.

Manufacturing activity in the New York area contracted at a record pace in February. The bank's Empire State manufacturing index fell to negative 34.7 in February from negative 22.2 in January. While 16% of respondents said conditions had improved, 51% said that they had worsened. New orders also fell to a record low. Shipments improved to negative 8.1 from a negative 13.1.

PNC Financial Services Group (PNC) followed the precedent of some larger rivals, setting a moratorium on new and pending mortgage foreclosures. PNC and its recently acquired National City Mortgage businesses will not initiate or complete any new foreclosures on eligible customers through March 13th, "or upon the start of the anticipated U.S. government's loan modification program.”

Liberty Media Corp. (LINTB) will invest $530 million in financially struggling satellite radio company Sirius XM Radio Inc. (SIRI). The second phase of Liberty's investment provides another loan of $150 million to Sirius's subsidiary XM Satellite Radio.

Trump Entertainment Resorts Inc. (TRMP) filed for Chapter 11 bankruptcy protection, wiped out by the recession and a mountain of debt. The move was widely expected, coming days after the casino operator's namesake tycoon, Chairman and founder Donald Trump, walked away from the company.

Ford Motor Co. (F) received $55 million in tax credits from Michigan to help develop electric vehicles. Ford said the credits will help bring to market a battery-powered commercial vehicle by 2010, a battery-powered car in 2011, and a next-generation of hybrid vehicles by 2012.

General Motors Corp. (GM) and Chrysler LLC, racing to finish restructuring plans to present to the federal government, are unlikely to complete deals with debt holders and union workers by today’s government-imposed deadline. GM already has received $9.4 billion in government loans and Chrysler $4 billion.

Nearly 800 jobs are being eliminated at the steering division of Delphi Corp. (DPHIQ.PK) near Saginaw, Michigan. The cuts announced Monday are hitting 425 hourly workers and 350 employees who are on salary at the Delphi complex in Buena Vista Township.

Smithfield Foods (SFD) say it plans to cut 1,800 jobs and close six factories as part of a restructuring. Smithfield Foods Inc. announced the closures and layoffs \as part of a plan to consolidate and streamline its pork business. The company plans to save $125 million a year by 2011.

Scheduled U.S. Economic Reports (Wednesday)

Import Price Index (Jan), Housing Starts (Jan), Industrial Production (Jan)

In Earnings News

Wal-Mart (WMT) earned $3.79 billion, or 96 cents per share in the quarter ended Jan. 31. That compares with $4.096 billion, or $1.02 per share, a year earlier. The company said that its fourth-quarter profit fell 7.4 percent as it was hurt by the strong dollar and a charge from settling a labor lawsuit.

Daimler AG (DAI) reported a euro1.53 billion fourth-quarter loss -- its first in two years -- and warned that sales of its marquee Mercedes-Benz cars would decline through 2009 because of the economic meltdown's pinch on the automotive industry.

Genuine Parts Co. (GPC) reported its fourth-quarter net income fell to $87.8 million or 55 cents a share, from $126 million, or 75 cents a share, in the year-ago period. Analysts expected earnings of 57 cents a share.

Hospira Inc. (HSP) reported its fourth-quarter profit rose 38 percent on lower costs as a stronger U.S. dollar cut into sales. The company earned $104.6 million or 65 cents per share while analysts were expecting 76 cents.

Medtronic Inc. (MDT) said its fiscal third-quarter profit surged because of the prior year's legal and acquisition charges. The company earned $723 million or 65 cents per share while analysts were expecting 70 cents.

Fossil Inc. (FOSL) reported its fiscal fourth-quarter profit fell 13 percent as a stronger dollar hurt its overseas revenue, but adjusted results topped analysts' estimates. Earnings dropped to $46.3 million, or 69 cents per share – in line with the consensus.

Scheduled Earnings Reports (Wednesday)

Goodyear Tire & Rubber, Deere & Co., Host Marriott, Bridgestone, Analog Devices, Brinks Home Security, ExpressJet Holdings, Priceline.com, CBS Corp, Extra Space Storage, Vitesse Semiconductor, ING Group

Stocks in the News

Freddie Mac (FRE) and Fannie Mae (FNM) suspended all foreclosure sales of properties through March 6th.

Teva Pharmaceuticals (TEVA) reported a fourth-quarter net loss from a year-earlier profit, reflecting special items including write-downs on its late December acquisition of Barr Pharmaceuticals.

Young Broadcasting (YBTVA) said it filed to reorganize under Chapter 11 of federal bankruptcy law.

Blue Phoenix Solutions (BPHX) narrowed its fourth-quarter net loss to 6 cents a share from 38 cents in the year-earlier quarter.

Research in Motion (RIMM) said it's recruiting 3,000 new workers to keep up with demand.

Starbucks Corp (SBUX) will unveil its new "Via" instant coffee that will sell for less than $1 per cup.