James Dicks Daily Digest - January 7, 2009
According to the ADP employment index, U.S. private-sector firms dropped 693,000 jobs in December, far worse than expected. Employment in the services sector fell by 473,000, while employment in the goods-producing sectors fell by 220,000.
Congressional estimators are projecting an unparalleled budget deficit of $1.2 trillion for the 2009 budget year. A top congressional aide briefed on the estimate says the Congressional Budget Office also sees a $703 billion deficit for 2010. The dismal figures come a day after President-elect Barack Obama warned of trillion-dollar deficits for years to come.
The Mortgage Bankers Association said applications for U.S. residential mortgages fell last week’s levels as homeowners slowed refinancing ahead of expected federal action to lower housing costs. They announced seasonally adjusted index of mortgage application activity fell for the first week in four, dropping 8.2%. A week earlier, it hit a five-year high.
Crude-oil futures widened their losses after data showed U.S. crude inventories rose more than expected. The U.S. Energy Information Administration reported stockpiles gained 6.7 million barrels to 325.4 million in the week ended Jan. 2nd. Analysts surveyed expected a buildup of 1.5 million barrels. After the data, crude-oil futures for February delivery were off 7.7% at $44.84 a barrel on the New York Mercantile Exchange.
Prime Minister Vladimir Putin has ordered Gazprom to stop all shipments of natural gas to Europe through Ukraine. Russian gas is already not getting through the pipelines that cross Ukraine. Gazprom has blamed Ukraine, saying Russia has delivered the gas but Ukraine has shut down the pipelines and is stealing gas intended for Europe.
Alcoa Inc. (AA) is cutting about 13 percent of its global workforce by the end of the year as it slashes costs in the face of a deteriorating world economy. The elimination of 13,500 jobs, along with deep production and spending cuts, follow cost-saving measures unveiled by Alcoa last fall.
General Motors Corp. (GM) has canceled plans to build the Pontiac G8 sport truck that was scheduled to go on sale this year. A Pontiac spokesman said it's part of GM's "ongoing review" related to its long-term viability plan.
Bank of America Corp. (BAC) raised more money to cope with U.S. economic turmoil by selling part of its stake in China Construction Bank Ltd., China's second-biggest commercial lender, for $2.8 billion.
The chairman of India's embattled Satyam Computer Services (SAY) resigned and said the company's profits had been inflated over the last several years, sending the stock down 60 percent.
As the nation sinks deeper into recession, the IRS is offering to waive late penalties, negotiating new payment plans and postponing asset seizures for delinquent taxpayers who are financially strapped, but make a good-faith effort to settle their tax debts. IRS Commissioner Doug Shulman said that tax agents are being given new authority to work with victims of the nation's economic woes who are struggling to pay their bills.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of January 3rd), Consumer Credit (Nov)
In Earnings News
Constellation Brands Inc. (STZ) said its fiscal third-quarter profit fell 30 percent because of restructuring costs and weaker sales. The company reported earnings of $83.5 million, or 38 cents a share. Analysts expected profit of 59 cents per share on sales of $1.13 billion.
Monsanto Co. (MON), the world's biggest seed maker, said its fiscal first-quarter profit more than doubled on higher sales to Latin America. The company said it earned $556 million, or $1 per share. Analysts expected a profit of 59 cents per share.
Time Warner Cable, a unit of Time Warner (TWX), says it expects to record a $15 billion non-cash impairment charge on its cable franchise rights in the fourth quarter, resulting in a loss for 2008. Analysts surveyed forecast 2008 earnings of $1.16 per share.
Intel (INTC) estimated quarterly revenue of $8.2 billion, below the $8.74 billion forecast by analysts. The company also announced a fourth-quarter impairment charge of about $950 million related to its investment in Clearwire Corp.
US Airways (LCC) expects to post a loss for 2008 as volatile fuel prices and falling demand takes its toll. The airline said its been raising cash, and had about $1.6 billion in unrestricted cash on its balance sheet as of the end of the third quarter.
Finish Line Inc. (FINL) said its third-quarter loss narrowed. Finish Line reported a loss of $8.8 million, or 16 cents per share. Analysts expected a loss of 13 cents.
Supervalu Inc. (SVU) says it posted a loss of $2.94 billion, or $13.95 per share. Sales fell to $10.17 billion from $10.21 billion. Analysts expected a profit of 60 cents per share and sales of $10.18 billion.
Jarden Corp. (JAH) estimated that its fourth-quarter revenue will beat its prior guidance by a narrow margin. The company previously projected fourth-quarter revenue of $1.3 billion. Analysts forecast fourth-quarter revenue of $1.3 billion and full-year revenue of $5.34 billion.
Scheduled Earnings Reports (Thursday)
Rocky Mountain Chocolate Factory, Schnitzer Steel, Great Atlantic & Pacific Tea Co., Adams Express, PriceSmart. On Monday, January 12th, Alcoa (AA) will begin the fourth quarter earnings season when they announce their quarterly numbers.
Stocks in the News
Family Dollar Store’s (FDO) fiscal first-quarter profit rose $59.3 million, or 42 cents a share. Analysts expected 40 cents a share.
Advanced Micro Devices (AMD) announced that the Committee on Foreign Investment in the U. S. cleared the company to create Foundry Co. in a joint venture with the Advanced Technology Investment Co.
SanDisk Corp (SNDK) introduced the ‘slotRadio’ music player and complementary cards. The portable music player comes bundled with a card that's preloaded with 1,000 songs.
Ethan Allen Interiors (ETH) announced it would consolidate some of its operations, a move that could affect a total of 350 jobs.
KBR Inc (KBR) reported that its current estimates of fiscal 2009 earnings are in line with analyst estimates.
Cabot Microelectronics (CCMP) expects a 33% decline in revenue for the first quarter, due to significantly lower demand.
Congressional estimators are projecting an unparalleled budget deficit of $1.2 trillion for the 2009 budget year. A top congressional aide briefed on the estimate says the Congressional Budget Office also sees a $703 billion deficit for 2010. The dismal figures come a day after President-elect Barack Obama warned of trillion-dollar deficits for years to come.
The Mortgage Bankers Association said applications for U.S. residential mortgages fell last week’s levels as homeowners slowed refinancing ahead of expected federal action to lower housing costs. They announced seasonally adjusted index of mortgage application activity fell for the first week in four, dropping 8.2%. A week earlier, it hit a five-year high.
Crude-oil futures widened their losses after data showed U.S. crude inventories rose more than expected. The U.S. Energy Information Administration reported stockpiles gained 6.7 million barrels to 325.4 million in the week ended Jan. 2nd. Analysts surveyed expected a buildup of 1.5 million barrels. After the data, crude-oil futures for February delivery were off 7.7% at $44.84 a barrel on the New York Mercantile Exchange.
Prime Minister Vladimir Putin has ordered Gazprom to stop all shipments of natural gas to Europe through Ukraine. Russian gas is already not getting through the pipelines that cross Ukraine. Gazprom has blamed Ukraine, saying Russia has delivered the gas but Ukraine has shut down the pipelines and is stealing gas intended for Europe.
Alcoa Inc. (AA) is cutting about 13 percent of its global workforce by the end of the year as it slashes costs in the face of a deteriorating world economy. The elimination of 13,500 jobs, along with deep production and spending cuts, follow cost-saving measures unveiled by Alcoa last fall.
General Motors Corp. (GM) has canceled plans to build the Pontiac G8 sport truck that was scheduled to go on sale this year. A Pontiac spokesman said it's part of GM's "ongoing review" related to its long-term viability plan.
Bank of America Corp. (BAC) raised more money to cope with U.S. economic turmoil by selling part of its stake in China Construction Bank Ltd., China's second-biggest commercial lender, for $2.8 billion.
The chairman of India's embattled Satyam Computer Services (SAY) resigned and said the company's profits had been inflated over the last several years, sending the stock down 60 percent.
As the nation sinks deeper into recession, the IRS is offering to waive late penalties, negotiating new payment plans and postponing asset seizures for delinquent taxpayers who are financially strapped, but make a good-faith effort to settle their tax debts. IRS Commissioner Doug Shulman said that tax agents are being given new authority to work with victims of the nation's economic woes who are struggling to pay their bills.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of January 3rd), Consumer Credit (Nov)
In Earnings News
Constellation Brands Inc. (STZ) said its fiscal third-quarter profit fell 30 percent because of restructuring costs and weaker sales. The company reported earnings of $83.5 million, or 38 cents a share. Analysts expected profit of 59 cents per share on sales of $1.13 billion.
Monsanto Co. (MON), the world's biggest seed maker, said its fiscal first-quarter profit more than doubled on higher sales to Latin America. The company said it earned $556 million, or $1 per share. Analysts expected a profit of 59 cents per share.
Time Warner Cable, a unit of Time Warner (TWX), says it expects to record a $15 billion non-cash impairment charge on its cable franchise rights in the fourth quarter, resulting in a loss for 2008. Analysts surveyed forecast 2008 earnings of $1.16 per share.
Intel (INTC) estimated quarterly revenue of $8.2 billion, below the $8.74 billion forecast by analysts. The company also announced a fourth-quarter impairment charge of about $950 million related to its investment in Clearwire Corp.
US Airways (LCC) expects to post a loss for 2008 as volatile fuel prices and falling demand takes its toll. The airline said its been raising cash, and had about $1.6 billion in unrestricted cash on its balance sheet as of the end of the third quarter.
Finish Line Inc. (FINL) said its third-quarter loss narrowed. Finish Line reported a loss of $8.8 million, or 16 cents per share. Analysts expected a loss of 13 cents.
Supervalu Inc. (SVU) says it posted a loss of $2.94 billion, or $13.95 per share. Sales fell to $10.17 billion from $10.21 billion. Analysts expected a profit of 60 cents per share and sales of $10.18 billion.
Jarden Corp. (JAH) estimated that its fourth-quarter revenue will beat its prior guidance by a narrow margin. The company previously projected fourth-quarter revenue of $1.3 billion. Analysts forecast fourth-quarter revenue of $1.3 billion and full-year revenue of $5.34 billion.
Scheduled Earnings Reports (Thursday)
Rocky Mountain Chocolate Factory, Schnitzer Steel, Great Atlantic & Pacific Tea Co., Adams Express, PriceSmart. On Monday, January 12th, Alcoa (AA) will begin the fourth quarter earnings season when they announce their quarterly numbers.
Stocks in the News
Family Dollar Store’s (FDO) fiscal first-quarter profit rose $59.3 million, or 42 cents a share. Analysts expected 40 cents a share.
Advanced Micro Devices (AMD) announced that the Committee on Foreign Investment in the U. S. cleared the company to create Foundry Co. in a joint venture with the Advanced Technology Investment Co.
SanDisk Corp (SNDK) introduced the ‘slotRadio’ music player and complementary cards. The portable music player comes bundled with a card that's preloaded with 1,000 songs.
Ethan Allen Interiors (ETH) announced it would consolidate some of its operations, a move that could affect a total of 350 jobs.
KBR Inc (KBR) reported that its current estimates of fiscal 2009 earnings are in line with analyst estimates.
Cabot Microelectronics (CCMP) expects a 33% decline in revenue for the first quarter, due to significantly lower demand.
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