JDfn Daily Digest - November 12, 2008

Treasury Secretary Henry Paulson announced the White House has shelved plans to purchase troubled mortgage assets from banks and other financial institutions. Paulsen said some of the money saved from not buying mortgage assets will now be used to shore-up the market for credit card receivables, auto loans and student loans. He also said that the Treasury would also consider giving some capital to non-bank financial institutions.

The Federal Reserve and other U.S. regulators told banks to maintain lending to ``creditworthy'' borrowers, and warned them against levels of dividend payments that would curb lending and cause a deeper economic slump.

Future home buyers will get a simpler way to understand often-confusing mortgage terms under new rules issued by the federal government. The government, which originally proposed revising these forms more than six years ago and released its latest proposal in March, says the new forms should save consumers around $700 in closing costs. The new forms will be required starting in 2010.

House Speaker Nancy Pelosi said she was confident that lawmakers would consider "emergency and limited financial assistance" for the auto industry under the $700 billion bailout measure that passed Congress in October. She urged the outgoing Bush administration to support a compromise.

A survey of the Bloomberg Professional Global Confidence Index said users on six continents showed confidence in the world economy stayed near rock-bottom in November as a global recession loomed. The International Monetary Fund predicted economic contractions next year in the U.S., Japan and euro region, the first simultaneous recession since the end of World War II.

The International Energy Agency predicted world energy demand will rise 1.6 percent per year on average between 2006 and 2030 and called for massive investment in energy infrastructure to prevent a supply squeeze.

American Express Co. (AXP) is the latest company to seek U.S. government help to steer it through the financial crisis and is asking for $3.5 billion in taxpayer-funded capital. The application has been made under the government's Troubled Asset Relief Program (TARP), though it isn't clear if the request was made before or after the company received Federal Reserve approval this week to become a bank-holding company.

According to America’s Research Group, U.S. holiday retail sales will fall 1 percent this year, marking the first time the research firm has forecast a decline in almost a quarter century of surveys.

The Bank of England predicted that the British economy will shrink sharply next year and inflation will tumble, suggesting that it will cut interest rates even below their current half-century low. In its gloomiest set of forecasts in more than a decade, the central bank said the economy had probably already entered recession and was likely to contract more throughout 2009.

Research firm ICD now expects worldwide information technology spending to grow by 2.6 percent in 2009, down from its earlier forecast of a 5.9 percent growth. In the U.S., spending will grow just 0.9 percent, well below IDC's August forecast of a 4.2 percent growth.

AirTran Airways (AAI), a subsidiary of AirTran Holdings Inc., announced that the airline will begin to charge its customers $15 for their first checked bag when traveling on or after Dec. 5th. The new fee will not apply to customers who purchased tickets through Nov. 11th. The airline will continue to charge $25 for a second checked bag and $50 for each additional bag.

Scheduled U.S. Economic Reports (Thursday)

Initial Jobless Claims (Week of Nov 7th), Trade Balance (Sep), Federal Budget (Oct)

In Earnings News

Best Buy Co. (BBY) says it is sharply cutting its fiscal 2009 earnings outlook below analyst estimates amid what the company called the toughest retail environment it has ever seen. The company expects earnings per share between $2.30 and $2.90 for the fiscal year ending in February, down from a previous estimate.

Macy's (M) said it lost $44 million, or 10 cents per share, in the quarter, after a profit of $33 million, or 8 cents per share, a year earlier. Analysts were expecting, on average, a loss of 19 cents.

Meridian Bioscience Inc. (VIVO), which makes and markets diagnostic medical test kits, said its fourth-quarter profit rose 19 percent. The company earned $7.7 million, or 19 cents per share. Analysts expected a profit of 18 cents.

Atmos Energy Corporation (ATO), a distributor of natural gas, reported a profit for its fiscal fourth quarter. The company reported a quarterly profit of $1.6 million, or 2 cents per share. Analysts forecast a loss of 3 cents per share.

Scheduled Earnings Reports (Thursday)

Wal-Mart, Kohl’s Corp, Nordstrom, Urban Outfitters, Vivendi, US Home System, Movie Gallery

Stocks in the News

Bed, Bath & Beyond (BBBY) was upgraded to buy from neutral at Goldman Sachs.

Microsoft Corp (MSFT) may be near a deal to become the default search provider for Verizon Wireless.

ING Group (ING) posted its first-ever quarterly loss as impairments on stocks and bonds, counterparty losses and property write downs affected its income.

Equity Residential Properties Trust (EQR) was upgraded to buy from neutral by UBS, which said the firm was the best positioned multi-family real estate investment trust.

General Growth Properties (GGP), a mall operator, dropped after the company warned it may be forced to file for bankruptcy if it can't refinance its debt.

Nice Systems Ltd (NICE) reported third-quarter net income rose 18% on 23% higher revenue.

Canadian National Railway (CNI) was downgraded to underperform from neutral by Merrill Lynch.

Prudential Financial Inc (PRU) halved the annual dividend to 58 cents from $1.15, payable Dec. 19th to holders of record Nov. 24th.