JDfn Daily Digest - December 2, 2008
President-elect Barack Obama is promising the country's governors that they will play a role in designing an economic recovery plan. Obama told the governors meeting in Philadelphia that "if we're listening to our governors, we'll not only be doing what's right for our states, we'll be doing what's right for our country.”
The National Bureau of Economic Research said the U.S. economy, now officially in recession, may be in the midst of the longest slump in the post- World War II era as job losses mount and credit dries up. The last time the U.S. was in a recession was from March through November 2001.
Detroit's automakers, making a second bid for $25 billion in funding, are presenting Congress with plans to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.
The Bank of America (BAC) is expected to cut at least 10,000 investment banking jobs as it moves towards final acquisition of Merrill Lynch. The layoffs will begion before the end of the year and possibly as soon as this week. Combined Bank of America and Merrill Lynch would have 260,000 employees. About 50,000 of them are in banking operations.
Sales at U.S. retailers rose 1.9 percent in the two days following the Thanksgiving holiday, as a decline on Nov. 29th revealed the smallest Black Friday gain in three years. Retailers slashed prices up to 70 percent following the holiday to draw in shoppers who have cut spending because of rising joblessness and the worst housing slump since the Great Depression.
According to credit reporting agency TransUnion, the percentage of people who are two months behind on their mortgages shot up in the third quarter from the same period last year. For the quarter ended Sept. 30th, 3.96 percent of people holding a mortgage were at least 60 days behind in payments, compared with 2.56 percent in the 2007 third quarter.
Delta Air Lines Inc. (DAL) hinted that more job cuts could be on the way as it disclosed that it will reduce consolidated system capacity by 6 percent to 8 percent in 2009, compared to the current year.
British Airways PLC said it is in talks with Australia's Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry. The two airlines are already partners in the oneworld global alliance, which brings together 10 of the world's carriers including Japan Airlines.
Scheduled U.S. Economic Reports (Wednesday)
ADP Employment Report (Nov), Productivity (Q3), Unit Labor Costs (Q3), ISM Non-Manufacturing (Nov)
In Earnings News
General Electric Co. (GE) says it expects fourth quarter earnings to be near the low end of its previous guidance. The diversified industrial, finance and media conglomerate says it will also take a charge of up to $1.4 billion for restructuring because of the difficult credit markets.
Staples Inc. (SPLS) said its third-quarter profit fell 43 percent. The retailer earned $156.7 million, or 22 cents per share, down from $274.5 million, or 38 cents per share, during the same period last year. Analysts expected profit of 41 cents per share.
Sears Holdings Corp. (SHLD) posted a bigger-than-expected loss for the third quarter. Sears lost $146 million, or $1.16 per share, during the three months ending Nov. 1st. Analysts expected a much smaller loss of 49 cents per share.
Beazer Homes USA Inc. (BZH) said its loss for the quarter totaled $473.9 million, or $12.29 per share, compared with a year-ago loss of $155.2 million, or $4.03 per share. Analysts expected a loss of $2.10 per share on revenue of $593.4 million.
America's Car-Mart Inc. (CRMT) said its profit rose 12 percent. Earnings for the quarter rose to $3.9 million, or 33 cents per share. Analysts expected 35 cents per share.
Scheduled Earnings Reports (Wednesday)
Aeropostale, Casella Waste Systems, Del Monte Foods, CoPart, JoAnn Stores, Plato Learning
Stocks in the News
Vedanta Resources (VDNRF) plans a $250 million share buyback. The mining company intends to buy as much as 10% of its share capital.
Acorn International (ATV) reported a third-quarter net loss from a year-earlier profit on 3.4% higher sales, and it affirmed its full-year outlook.
Rogers Communications (RCI) founder and Chief Executive Ted Rogers died at age 75. Chairman Alan Horn will serve as acting CEO while the board assesses internal and external candidates for a successor.
UAL Corp (UAUA) parent to United Airlines, expects to raise about $300 million in cash during the fourth quarter, which includes a $150 million benefit from refinancing expected to close before the end of the year.
Walgreens (WAG) reported November sales at stores open at least one year fell 0.9%, and front-end same-store sales also fell 0.9%.
The National Bureau of Economic Research said the U.S. economy, now officially in recession, may be in the midst of the longest slump in the post- World War II era as job losses mount and credit dries up. The last time the U.S. was in a recession was from March through November 2001.
Detroit's automakers, making a second bid for $25 billion in funding, are presenting Congress with plans to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.
The Bank of America (BAC) is expected to cut at least 10,000 investment banking jobs as it moves towards final acquisition of Merrill Lynch. The layoffs will begion before the end of the year and possibly as soon as this week. Combined Bank of America and Merrill Lynch would have 260,000 employees. About 50,000 of them are in banking operations.
Sales at U.S. retailers rose 1.9 percent in the two days following the Thanksgiving holiday, as a decline on Nov. 29th revealed the smallest Black Friday gain in three years. Retailers slashed prices up to 70 percent following the holiday to draw in shoppers who have cut spending because of rising joblessness and the worst housing slump since the Great Depression.
According to credit reporting agency TransUnion, the percentage of people who are two months behind on their mortgages shot up in the third quarter from the same period last year. For the quarter ended Sept. 30th, 3.96 percent of people holding a mortgage were at least 60 days behind in payments, compared with 2.56 percent in the 2007 third quarter.
Delta Air Lines Inc. (DAL) hinted that more job cuts could be on the way as it disclosed that it will reduce consolidated system capacity by 6 percent to 8 percent in 2009, compared to the current year.
British Airways PLC said it is in talks with Australia's Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry. The two airlines are already partners in the oneworld global alliance, which brings together 10 of the world's carriers including Japan Airlines.
Scheduled U.S. Economic Reports (Wednesday)
ADP Employment Report (Nov), Productivity (Q3), Unit Labor Costs (Q3), ISM Non-Manufacturing (Nov)
In Earnings News
General Electric Co. (GE) says it expects fourth quarter earnings to be near the low end of its previous guidance. The diversified industrial, finance and media conglomerate says it will also take a charge of up to $1.4 billion for restructuring because of the difficult credit markets.
Staples Inc. (SPLS) said its third-quarter profit fell 43 percent. The retailer earned $156.7 million, or 22 cents per share, down from $274.5 million, or 38 cents per share, during the same period last year. Analysts expected profit of 41 cents per share.
Sears Holdings Corp. (SHLD) posted a bigger-than-expected loss for the third quarter. Sears lost $146 million, or $1.16 per share, during the three months ending Nov. 1st. Analysts expected a much smaller loss of 49 cents per share.
Beazer Homes USA Inc. (BZH) said its loss for the quarter totaled $473.9 million, or $12.29 per share, compared with a year-ago loss of $155.2 million, or $4.03 per share. Analysts expected a loss of $2.10 per share on revenue of $593.4 million.
America's Car-Mart Inc. (CRMT) said its profit rose 12 percent. Earnings for the quarter rose to $3.9 million, or 33 cents per share. Analysts expected 35 cents per share.
Scheduled Earnings Reports (Wednesday)
Aeropostale, Casella Waste Systems, Del Monte Foods, CoPart, JoAnn Stores, Plato Learning
Stocks in the News
Vedanta Resources (VDNRF) plans a $250 million share buyback. The mining company intends to buy as much as 10% of its share capital.
Acorn International (ATV) reported a third-quarter net loss from a year-earlier profit on 3.4% higher sales, and it affirmed its full-year outlook.
Rogers Communications (RCI) founder and Chief Executive Ted Rogers died at age 75. Chairman Alan Horn will serve as acting CEO while the board assesses internal and external candidates for a successor.
UAL Corp (UAUA) parent to United Airlines, expects to raise about $300 million in cash during the fourth quarter, which includes a $150 million benefit from refinancing expected to close before the end of the year.
Walgreens (WAG) reported November sales at stores open at least one year fell 0.9%, and front-end same-store sales also fell 0.9%.
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