JDfn Daily Digest - December 12, 2008
The Labor Department reported the Producer Price Index, which tracks costs of goods before they reach consumers, fell 2.2 percent last month as prices for gasoline and other energy prices fell.
The Commerce Department says retail sales dropped by 1.8 percent last month. The decline, which was slightly below the 1.9 percent dip that had been expected, was the fifth straight monthly drop, a stretch of weakness never before seen on the government's retail sales records.
Members of Congress were unable to agree on a bill to rush $14 billion in emergency loans to General Motors (GM) and Chrysler, which have said they're in danger of running out of money within weeks. The White House announced that they are willing to use TARP funds to help the nation’s auto industry survive.
GM has already cut its U.S. work force by almost 80,000 people this decade, reducing it to 96,000 and it has idled five factories and laid off 11,000 domestic workers this year alone.
Federal authorities said a Wall Street powerbroker for nearly 50 years who built an influential firm has confessed to a massive fraud scheme that will cost investors at least $50 billion. Bernard L. Madoff, facing a single count of securities fraud, declined to speak with reporters after a federal magistrate judge in U.S. District Court in Manhattan ordered him released Thursday night on $10 million bail.
Bank of America Corp. (BAC) expects to cut 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co. Analysts believe the final number of layoffs could be even higher.
Kohl's Corp. (KSS) said it jointly acquired 46 Mervyns locations for about $6.25 million. Kohl's will assume 31 locations and closely held \ retailer Forever 21 Inc. will have 15 locations, pending approval by the court overseeing Mervyns bankruptcy proceedings.
Scheduled U.S. Economic Reports (Next Week)
Empire State Index, Industrial Production, Home Builders’ Index, Consumer Price Index, Housing Starts, Philadelphia Fed Index, Leading Indicators and the FOMC Meeting
In Earnings News
Procter & Gamble Co. (PG) announced it will miss a second-quarter sales target as the consumer products company acknowledged it isn't immune to the recession. The company said organic sales -- that is, sales not linked to acquisitions -- won't meet the 4 percent to 6 percent growth goal in the quarter ending in December.
Eli Lilly and Co. (LLY) said its $6.5 billion ImClone acquisition will wipe out its 2008 profit and affect next year's earnings as well. But the drugmaker's leaders assured analysts that their product pipeline boasts unprecedented strength, and the ImClone purchase and other deals made this year will pay off.
Lear Corp (LEA), a leading global supplier of automotive seating systems, electrical distribution systems and electronics products, today announced it is withdrawing its full-year 2008 financial guidance as a result of further weakness in global automotive demand and overall industry uncertainty.
United Technologies Corp (UTX), the world's largest maker of elevators and air conditioners is planning for continued weakness in world construction markets. The continued recovery of the dollar against the euro also will hurt its results.
Ciena's (CIEN) revenue dropped 17 percent, missing the company's forecast issued in September. The company said it expects the "challenging environment will persist through 2009" and forecast first-quarter sales of $170 million to $185 million, below Wall Street's expectations.
Krispy Kreme Doughnuts Inc. (KKD) said higher ingredient and gas costs contributed to its losses in the third quarter, but it's optimistic about the steps the company has taken in its ongoing effort to transform the business.
Scheduled Earnings Reports (Next Week)
Adobe Systems, Best Buy, Nike, Hovnanian Industries, Morgan Stanley, Goldman Sachs, Interstate Bakeries, Herman Miller Inc, Dave & Busters, Red Hat, 3Com, Carnival, Discover Financial, FedEx, Lennar, Oracle, Palm, Pier 1, Research in Motion, Rite Aid
Stocks in the News
Toyota (TM) is planning to cut output by more than 1 million vehicles next year in anticipation of weak global demand.
Harry Winston Diamond (HWD) reported a third-quarter profit from a year-earlier loss on a 16% drop in sales.
Boeing (BA) made it official that its often-postponed 787 Dreamliner will see its first deliveries in early 2010, delayed from its more recent target of third-quarter 2009.
CKE Restaurants (CKR) operator of the Carl's Jr. and Hardee's fast-food chains, reported third-quarter profit fell to $5.4 million or 10 cents a share.
The Commerce Department says retail sales dropped by 1.8 percent last month. The decline, which was slightly below the 1.9 percent dip that had been expected, was the fifth straight monthly drop, a stretch of weakness never before seen on the government's retail sales records.
Members of Congress were unable to agree on a bill to rush $14 billion in emergency loans to General Motors (GM) and Chrysler, which have said they're in danger of running out of money within weeks. The White House announced that they are willing to use TARP funds to help the nation’s auto industry survive.
GM has already cut its U.S. work force by almost 80,000 people this decade, reducing it to 96,000 and it has idled five factories and laid off 11,000 domestic workers this year alone.
Federal authorities said a Wall Street powerbroker for nearly 50 years who built an influential firm has confessed to a massive fraud scheme that will cost investors at least $50 billion. Bernard L. Madoff, facing a single count of securities fraud, declined to speak with reporters after a federal magistrate judge in U.S. District Court in Manhattan ordered him released Thursday night on $10 million bail.
Bank of America Corp. (BAC) expects to cut 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co. Analysts believe the final number of layoffs could be even higher.
Kohl's Corp. (KSS) said it jointly acquired 46 Mervyns locations for about $6.25 million. Kohl's will assume 31 locations and closely held \ retailer Forever 21 Inc. will have 15 locations, pending approval by the court overseeing Mervyns bankruptcy proceedings.
Scheduled U.S. Economic Reports (Next Week)
Empire State Index, Industrial Production, Home Builders’ Index, Consumer Price Index, Housing Starts, Philadelphia Fed Index, Leading Indicators and the FOMC Meeting
In Earnings News
Procter & Gamble Co. (PG) announced it will miss a second-quarter sales target as the consumer products company acknowledged it isn't immune to the recession. The company said organic sales -- that is, sales not linked to acquisitions -- won't meet the 4 percent to 6 percent growth goal in the quarter ending in December.
Eli Lilly and Co. (LLY) said its $6.5 billion ImClone acquisition will wipe out its 2008 profit and affect next year's earnings as well. But the drugmaker's leaders assured analysts that their product pipeline boasts unprecedented strength, and the ImClone purchase and other deals made this year will pay off.
Lear Corp (LEA), a leading global supplier of automotive seating systems, electrical distribution systems and electronics products, today announced it is withdrawing its full-year 2008 financial guidance as a result of further weakness in global automotive demand and overall industry uncertainty.
United Technologies Corp (UTX), the world's largest maker of elevators and air conditioners is planning for continued weakness in world construction markets. The continued recovery of the dollar against the euro also will hurt its results.
Ciena's (CIEN) revenue dropped 17 percent, missing the company's forecast issued in September. The company said it expects the "challenging environment will persist through 2009" and forecast first-quarter sales of $170 million to $185 million, below Wall Street's expectations.
Krispy Kreme Doughnuts Inc. (KKD) said higher ingredient and gas costs contributed to its losses in the third quarter, but it's optimistic about the steps the company has taken in its ongoing effort to transform the business.
Scheduled Earnings Reports (Next Week)
Adobe Systems, Best Buy, Nike, Hovnanian Industries, Morgan Stanley, Goldman Sachs, Interstate Bakeries, Herman Miller Inc, Dave & Busters, Red Hat, 3Com, Carnival, Discover Financial, FedEx, Lennar, Oracle, Palm, Pier 1, Research in Motion, Rite Aid
Stocks in the News
Toyota (TM) is planning to cut output by more than 1 million vehicles next year in anticipation of weak global demand.
Harry Winston Diamond (HWD) reported a third-quarter profit from a year-earlier loss on a 16% drop in sales.
Boeing (BA) made it official that its often-postponed 787 Dreamliner will see its first deliveries in early 2010, delayed from its more recent target of third-quarter 2009.
CKE Restaurants (CKR) operator of the Carl's Jr. and Hardee's fast-food chains, reported third-quarter profit fell to $5.4 million or 10 cents a share.
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