James Dicks Daily Digest - January 6, 2009

Chain-store sales for the week fell 0.8% from the year-earlier period. On a week-over-week basis, sales rose 1.4%. The International Council of Shopping Centers said, "Bargain shoppers were out in force between Christmas and New Year's” who took advantage of retailers' need to clear out seasonal merchandise. Still, that doesn't help salvage what has turned out to be a weak month.

The ISM non-manufacturing index rose to 40.6% in December from a record low of 37.3% in November. Economists were looking for a December result of 37%. The business activity index rose to 39.6% from 33%, new orders rose to 39.9% from 35.4% and the employment index roe to 34.7% from 31.3%.

The National Association of Realtors reported that sales contracts on previously owned U.S. homes fell 4% in November from the prior month. The index, which is considered a leading indicator of existing home sales, was down 5.3% from the prior year. Pending home sales in November fell in all four regions, with declines of 7.2% in the Northeast, 6.7% in the Midwest, 2.4% in the West and 2.2% in the South.

Shipments from U.S. factories plunged a record 5.3% in November. Orders for U.S. factory-made goods fell 4.6% in the month, more than twice as much as the expected 2.2% decline. The figures are not adjusted for price changes. Orders and shipments of nondurable goods dropped a record 7.4% in November, led by a 22% drop in shipments from petroleum refineries.

Crude oil rose to a five-week high above $50 as Kuwait and Qatar indicated they will implement supply cuts announced by OPEC last month, and a dispute between Russia and Ukraine reduced natural gas shipments to Europe.

Toyota (TM) is suspending production at all 12 of its Japan plants for 11 days over February and March, a stoppage of unprecedented scale for the nation's top automaker as it grapples with falling global demand.

Macrovision Solutions Corp. (MVSN) has canceled its deal to sell the TV Guide Network and TVGuide.com for $255 million to Allen Shapiro and One Equity Partners, and will instead sell them to movie studio Lions Gate Entertainment Corp. for the same price but better terms.

UPS (UPS) announced it received a contract from Merck & Co. (MRK) to manage part of its U.S. distribution of pharmaceuticals and vaccines and to provide package transportation services.

MasterCard Inc. (MA) will align global customer accounts with the regions where they are based and made several personnel announcements. In the U.S., the credit card company established an expanded business unit that encompasses its U.S.-based global accounts along with its U.S. region.

Boeing Co. (BA) reported it will provide eight reconnaissance and anti-submarine war planes for India's Navy. Boeing says the plane, the P-81, can operate over land or water while performing anti-submarine warfare missions, search and rescue work and long-range intelligence, surveillance, targeting and reconnaissance.

Scheduled U.S. Economic Reports (Wednesday)

ADP Employment Index (Dec)

In Earnings News

Acuity Brands (AYI) reported net income for its fiscal first quarter fell to $19.4 million or 48 cents a share, from $31.1 million, or 72 cents a share in the year-ago period. Analysts expected earnings of 76 cents a share.

Micrel Inc. (MCRL) reported it will slash about 6 percent of its work force as it lowered sales and profit estimates for its fourth quarter. The company said in October it expected a drop of 7 percent to 13 percent. Wall Street analysts expected sales to come in at the low end of Micrel's original guidance at $58.6 million, a 13 percent decline.

LDK Solar Co. (LDK), which makes wafers for solar cells, cut its estimate of fourth-quarter revenue 23 percent, saying that customers delayed shipments due to the global recession.

Emulex Corp. (ELX) lowered its fiscal second-quarter revenue estimate and said it may take a goodwill impairment charge because of its declining stock price. The company now expects to post sales of $107 million to $108 million for its quarter ended Dec. 28th.

Scheduled Earnings Reports (Wednesday)

Constellation Brands, Bed, Bath & Beyond, Ruby Tuesday, Movie Gallery, Christopher & Banks, Sonic Corp, and Monsanto … On Monday, January 12th, Alcoa (AA) will begin the fourth quarter earnings season when they announce their quarterly numbers.

Stocks in the News

Google Inc (GOOG) continued to take a larger share of the U.S. Internet-search market in November.

Cigna Corp (CI) will cut 1,100, or about 4%, of its jobs by mid-year to lower costs.

Wells Fargo & Co. (WFC) bought about $730 million in loan and lease receivables from GE Healthcare Financial Services, a unit of GE Capital.

Dow Chemical (DOW) said it is going to pursue legal action against the Petrochemical Industries Company of Kuwait as a planned venture fell apart.

Frontier Airlines Holdings (FRNTQ) said that members of its pilots union ratified a labor contract that extends through December 2011.

The McGraw Hill Companies (MHP) is cutting about 375 jobs across the firm and will take a $16.4 million or 4 cents a share after tax, fourth quarter charge to cover severance.

Continental Airlines (CAL) reported its consolidated load factor, the percentage of seats filled with paying passengers, widened to 79.9%, 1.2 percentage points stronger than the year-earlier figure.