JDfn Daily Digest - December 18, 2008
The Labor Department says that new applications for jobless benefits fell to a seasonally adjusted 554,000 from an upwardly revised figure of 575,000 the previous week. That's slightly below economists' expectations of 558,000 claims.
The Conference Board said more economic weakness is in store for the first few months of 2009. The index of leading economic indicators fell 0.4% in November, with negative contributions from six of the 10 indicators, and the largest negative contribution from building permits. The largest positive contribution came from the money supply.
Oil prices are near 4 1/2-year lows as persistent investor pessimism over global crude demand outweighed the news of OPEC's largest-ever production cut. OPEC's next official meeting is scheduled for March. The group already announced cuts totaling two million barrels earlier this year, also with little effect.
The Philly Fed diffusion index rose to negative 32.9 in December from negative 39.3 in November. The reading in November was the worst since October 1990. Readings below zero indicate contraction. The report was not as weak as expected. Economists were expecting the index to slip to negative 42.0.
President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, possibly $850 billion over two years, in his first test of legislative give and take with Congress.
Obama named seasoned regulator Mary Schapiro to head the Securities and Exchange Commission. Schapiro is now chief executive of the Financial Industry Regulatory Authority, a self-regulatory body for the securities industry.
According to the Mortgage Bankers Association, Americans looking for bargains on mortgages aren’t getting the full benefit of record low yields on Treasuries and government-supported mortgage bonds, hurting U.S. efforts to control the housing crisis. More than 100 mortgage companies have failed since the start of last year because of a record increase in U.S. foreclosures and a collapse in demand for loans outside Fannie, Freddie or federal- insurance guidelines.
Chrysler announced it is closing all its North American manufacturing plants for at least a month, the starkest move taken by U.S. automakers as they anxiously await word about government loans.
Chrysler said it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19th at all 30 of its factories due to falling sales.
Raytheon Co. (RTN) was awarded an order of up to $3.3 billion to provide advanced Patriot air and missile defense capability, whole life support and training for the United Arab Emirates.
Sony Corp (SNE) may make further restructuring moves, including adding more job cuts to its recent round of layoffs. The firm said last week it would cut 16,000 jobs, but company executives said more steps -- including further lay-offs -- may be needed.
Qantas Airways Ltd. and British Airways (BAY) have been unable to agree on the terms of a proposed merger that both carriers had hoped would help them fend off an industry downturn.
Scheduled U.S. Economic Reports (Friday)
None Scheduled
In Earnings News
FedEx Corp (FDX) said second-quarter earnings for the three months ended Nov. 30 rose 3% to $493 million, or $1.58 a share. Separately, the company said it would institute a hiring freeze and cut salaries as part of a plan to reduce costs effective Jan. 1st.
Lennar Corp (LEN) reported a fourth-quarter loss of $811 million, or $5.12 per share, compared with a loss of $1.25 billion, or $7.92 per share, a year earlier. Analysts forecast a loss of $1.61 per share on revenue of $1.08 billion.
Rite Aid Corp. (RAD) reported a loss that nearly tripled in its third quarter because of costs to close stores and continuing struggles for its Brooks Eckerd pharmacies. The company reported a loss of $248.7 million, or 30 cents per share while analysts expected a loss of 17 cents per share.
Discover Financial Services (DFS) says it returned to profitability during its fiscal fourth-quarter, due in part to a payment from a lawsuit settlement. The credit-card lender said it earned $432.3 million, or 89 cents per share.
Winnebago Industries Inc. (WGO) reported a fiscal first-quarter loss. The company said its lost $9.6 million, or 33 cents per share, in the quarter ended Nov. 29th. Analysts expected a smaller loss of 22 cents per share.
Coca-Cola Enterprises (CCE) (KO) boosted its full-year outlook, saying stronger-than-expected volume in North America and moderating costs for commodities would boost results. The bottler said it expects to earn between $1.28 and $1.31 per share during 2008.
Scheduled Earnings Reports (Friday)
Circuit City, CarMax Inc, Jabil Circuit, Darden Restaurants, Cintas, Stewart Enterprises
Stocks in the News
General Motors (GM) and Chrysler have reportedly reopened merger talks amid signs Chrysler owner Cerberus Capital has shown willingness to give up part of its ownership.
Nike Inc (NKE) reported a fiscal second-quarter profit of $391 million, or 80 cents a share.
AvalonBay Communities (AVB) will cut back on new developments and reduce the size of its organization because of the slumping capital and real estate markets.
Ryder System Inc (R) said it is discontinuing operations in some of its Latin American markets to concentrate on core markets and cutting up to 3,100 positions, about 700 in the U.S.
MEMC Electronic Materials (WFR) lowered its fourth-quarter revenue outlook, the second time the company has done so in a month.
Stanley Works (SWK) named Chief Financial Officer James Loree chief operating officer and Donald Allan, vice president and controller, to succeed him.
Huntsman Corp (HUN) traded higher after Citadel Investment Group LLC reduced its stake in the chemical maker to 7%.
Pier 1 Imports (PIR) said its third-quarter net loss widened to $36.9 million or 41 cents a share, from $10 million, or 11 cents a share, in the year-earlier quarter.
Ingersoll-Rand (IR) is cutting its fourth quarter earnings forecast by more than half due to a sharp drop-off in revenue, particularly in Western Europe, as the dollar strengthened.
The Conference Board said more economic weakness is in store for the first few months of 2009. The index of leading economic indicators fell 0.4% in November, with negative contributions from six of the 10 indicators, and the largest negative contribution from building permits. The largest positive contribution came from the money supply.
Oil prices are near 4 1/2-year lows as persistent investor pessimism over global crude demand outweighed the news of OPEC's largest-ever production cut. OPEC's next official meeting is scheduled for March. The group already announced cuts totaling two million barrels earlier this year, also with little effect.
The Philly Fed diffusion index rose to negative 32.9 in December from negative 39.3 in November. The reading in November was the worst since October 1990. Readings below zero indicate contraction. The report was not as weak as expected. Economists were expecting the index to slip to negative 42.0.
President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, possibly $850 billion over two years, in his first test of legislative give and take with Congress.
Obama named seasoned regulator Mary Schapiro to head the Securities and Exchange Commission. Schapiro is now chief executive of the Financial Industry Regulatory Authority, a self-regulatory body for the securities industry.
According to the Mortgage Bankers Association, Americans looking for bargains on mortgages aren’t getting the full benefit of record low yields on Treasuries and government-supported mortgage bonds, hurting U.S. efforts to control the housing crisis. More than 100 mortgage companies have failed since the start of last year because of a record increase in U.S. foreclosures and a collapse in demand for loans outside Fannie, Freddie or federal- insurance guidelines.
Chrysler announced it is closing all its North American manufacturing plants for at least a month, the starkest move taken by U.S. automakers as they anxiously await word about government loans.
Chrysler said it would extend the normal two-week holiday shutdown that begins Friday to at least Jan. 19th at all 30 of its factories due to falling sales.
Raytheon Co. (RTN) was awarded an order of up to $3.3 billion to provide advanced Patriot air and missile defense capability, whole life support and training for the United Arab Emirates.
Sony Corp (SNE) may make further restructuring moves, including adding more job cuts to its recent round of layoffs. The firm said last week it would cut 16,000 jobs, but company executives said more steps -- including further lay-offs -- may be needed.
Qantas Airways Ltd. and British Airways (BAY) have been unable to agree on the terms of a proposed merger that both carriers had hoped would help them fend off an industry downturn.
Scheduled U.S. Economic Reports (Friday)
None Scheduled
In Earnings News
FedEx Corp (FDX) said second-quarter earnings for the three months ended Nov. 30 rose 3% to $493 million, or $1.58 a share. Separately, the company said it would institute a hiring freeze and cut salaries as part of a plan to reduce costs effective Jan. 1st.
Lennar Corp (LEN) reported a fourth-quarter loss of $811 million, or $5.12 per share, compared with a loss of $1.25 billion, or $7.92 per share, a year earlier. Analysts forecast a loss of $1.61 per share on revenue of $1.08 billion.
Rite Aid Corp. (RAD) reported a loss that nearly tripled in its third quarter because of costs to close stores and continuing struggles for its Brooks Eckerd pharmacies. The company reported a loss of $248.7 million, or 30 cents per share while analysts expected a loss of 17 cents per share.
Discover Financial Services (DFS) says it returned to profitability during its fiscal fourth-quarter, due in part to a payment from a lawsuit settlement. The credit-card lender said it earned $432.3 million, or 89 cents per share.
Winnebago Industries Inc. (WGO) reported a fiscal first-quarter loss. The company said its lost $9.6 million, or 33 cents per share, in the quarter ended Nov. 29th. Analysts expected a smaller loss of 22 cents per share.
Coca-Cola Enterprises (CCE) (KO) boosted its full-year outlook, saying stronger-than-expected volume in North America and moderating costs for commodities would boost results. The bottler said it expects to earn between $1.28 and $1.31 per share during 2008.
Scheduled Earnings Reports (Friday)
Circuit City, CarMax Inc, Jabil Circuit, Darden Restaurants, Cintas, Stewart Enterprises
Stocks in the News
General Motors (GM) and Chrysler have reportedly reopened merger talks amid signs Chrysler owner Cerberus Capital has shown willingness to give up part of its ownership.
Nike Inc (NKE) reported a fiscal second-quarter profit of $391 million, or 80 cents a share.
AvalonBay Communities (AVB) will cut back on new developments and reduce the size of its organization because of the slumping capital and real estate markets.
Ryder System Inc (R) said it is discontinuing operations in some of its Latin American markets to concentrate on core markets and cutting up to 3,100 positions, about 700 in the U.S.
MEMC Electronic Materials (WFR) lowered its fourth-quarter revenue outlook, the second time the company has done so in a month.
Stanley Works (SWK) named Chief Financial Officer James Loree chief operating officer and Donald Allan, vice president and controller, to succeed him.
Huntsman Corp (HUN) traded higher after Citadel Investment Group LLC reduced its stake in the chemical maker to 7%.
Pier 1 Imports (PIR) said its third-quarter net loss widened to $36.9 million or 41 cents a share, from $10 million, or 11 cents a share, in the year-earlier quarter.
Ingersoll-Rand (IR) is cutting its fourth quarter earnings forecast by more than half due to a sharp drop-off in revenue, particularly in Western Europe, as the dollar strengthened.
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