James Dicks Daily Digest - January 8, 2009

President-elect Obama called on Congress to move quickly on his economic aid package once he takes office, warning that a failure to do so would have devastating long-term consequences for the nation. Obama said, "I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible. If nothing is done, this recession could linger for years."

The Bank of England has cut the interest rate to its lowest-ever level cutting it to 1.5%. The half-percentage point cut brings the rate to its lowest level in the central bank's 315-year history. The Bank cited weakening consumer spending, a tightening credit market for households and businesses, and a deteriorating business and residential investment outlook in announcing the decision.

The Labor Department reported that initial applications for unemployment insurance dropped by 24,000 to a seasonally adjusted 467,000 for the week ending Jan. 3rd. Wall Street economists expected initial claims to increase to 540,000. The figure partly reflects seasonal volatility that occurs around the New Year's holiday. The four-week average of initial claims fell by 27,000 to 525,750.

U.S. households paid down a record $7.9 billion in consumer debt in November, the third month in the past four in which they paid off more debt than they took on. Consumer debt fell $7.9 billion to a seasonally adjusted $2.57 trillion in November, a 3.7% annualized decline.

Retailers reported dismal sales figures for December as even Wal-Mart Stores Inc. (WMT), finally buckled under the pressures of the deteriorating economy. Wal-Mart said that same-store sales, or sales at stores opened at least a year, rose 1.7 percent. Including fuel sales, that gain was 1.2 percent. Analysts expected a 2.8 percent increase.

Macy's Inc. (M) announced it will close 11 underperforming stores in nine states -- affecting 960 employees -- and lowered its forecast for the fourth quarter after one of the weakest holiday seasons in years.

General Motors Corp. (GM) Chief Executive Rick Wagoner said the automaker can survive long-term without cutting benefits to retired workers. The $13.4 billion federal loan package granted to GM last month requires that the UAW make concessions and also demands that GM submit a restructuring plan to the government by March 31st.

TD Ameritrade Holding Corp. (AMTD) will acquire thinkorswim Group Inc. (SWIM) in a cash and stock deal worth $606 million. The deal allows TD Ameritrade to expand its reach by adding a brokerage firm that is among the largest in retail options trading.

Scheduled U.S. Economic Reports (Friday)

Non-Farm Payrolls (Dec), Unemployment Rate (Dec), Wholesale Inventories (Nov)

In Earnings News

Kohl's Corp. (KSS) reported that it is "comfortable" with analysts' consensus profit forecast of 98 cents per share for the fiscal fourth quarter, after the department store operator reported a December same-store sales decline of 1.4 percent. Kohl's previously predicted fourth-quarter earnings of 90 cents to $1.05 per share.

American Eagle Outfitters Inc. (AEO) cut its fourth-quarter guidance and reported a worse-than-expected drop in its December same-store sales. American Eagle's same-store sales tumbled 17 percent in December due to weak customer traffic. Analysts expected a drop of 12.3 percent.

Cardinal Health Inc. (CAH) cut its fiscal 2009 profit estimates, saying it expects hospitals to keep delaying equipment purchases. Cardinal now expects a profit of $3.50 to $3.60 per share, excluding items, down from previous guidance of $3.80 to $3.95 per share. Analysts expect, on average, a profit of $3.76 per share.

Scheduled Earnings Reports (Friday)

Audiovox, KB Home, Azz Inc, Texas Industries, Williams Industries, Cell Therapeutics. On Monday, January 12th, Alcoa (AA) will begin the fourth quarter earnings season when they announce their quarterly numbers.

Stocks in the News

Dell Inc (DELL) said it will cut 1,900 jobs at its main Irish manufacturing plant and move the bulk of its production for Europe, the Middle East and Africa to Poland.

Crucell NV (CRXL) said it is in early talks on a combination with Wyeth (WYE).

Walgreens (WAG) plans to eliminate about 1,000 corporate and field management jobs in fiscal 2009 via both voluntary and involuntary programs.

Verizon Communications (VZ) announced that Microsoft has beat out Google to become the default search provider on all phones on the Verizon Wireless network.

Men’s Wearhouse (MW) expects fourth-quarter earnings to come in at the low end of its forecast range because of slow sales in Canada.

Zumiez Inc (ZUMZ) reported that sales at stores open at least one year fell 12.3% in December. Analysts had expected same-store sales to fall 13.3%.

Lenovo Group LTD (LNVGY), a maker of ThinkPad computers, estimated a ‘material loss’ for the three months ended Dec. 31 and said it would cut 11%, or 2,500, of its workers because of a sharp drop in consumer demand.

Immucor Inc (BLUD) reported a fiscal second-quarter profit of $17.3 million, or 24 cents a share, from $16.2 million, or 23 cents a share, in the year-ago period.

PTC (PMTC) expects to report first-quarter revenue of $240 million, flat with the year-earlier period.

Williams-Sonoma Inc (WSM) experienced a 24.26% plunge in same-store sales during the eight-week holiday period.