JDfn Daily Digest - November 19, 2008
Chief executives of leading U.S. companies called for a fiscal stimulus package worth at least $300 billion and urged president-elect Barack Obama to swiftly name his economic team. Dozens of chief executives met in Washington D.C. to identify what they think should be priorities for the Obama administration and the new Congress.
The Labor Department said that consumer prices fell by 1 percent last month, the biggest one-month decline on records that go back to February 1947. The drop was twice as large as the 0.5 percent decline analysts expected.
Oil prices slipped further today, dipping below $54 on fears of global economic weakness that have sent crude down more than 60 percent in four months. But analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark.
OPEC is concerned by the worsening world economy and the falling oil price, which has wiped close to $700 billion from its coffers. Oil ministers from the Organization of the Petroleum Exporting Countries gather for informal talks on a further oil supply cut in Cairo on Nov.29th and are scheduled to meet again on Dec.17th in Algeria.
The American Petroleum Institute said U.S. petroleum deliveries, an indication of demand, dropped 5% from January through October - marking their largest decline since the early 1980's. Total domestic deliveries averaged 19.6 million barrels per day in the January-to-October period, the lowest level for the period since 2000.
In other economic news, the Commerce Department reported that construction of new homes and apartments fell by 4.5 percent in October to an annual rate of 791,000 units. That was the slowest construction pace on records going back to 1959 and emphasized that housing remains caught in a severe slump.
Mortgage applications fell a seasonally adjusted 6.2% last week from the prior week, as lower interest rates on fixed-rate mortgages failed to stir prospective homebuyers to action. Application volume for the week ended Nov. 14th was down 41.3% on an unadjusted basis compared with the same week in 2007.
The Semiconductor Industry Association said it expects the first decline in chip sales since 2001. Although the forecast projects 2008 sales of $261 billion, a 2.2% increase from 2007, it said sales in the "historically strong" current quarter, are seen declining 5.9% from the prior quarter, and 2009 sales falling by 5.6% before resuming growth in 2010.
Boeing Co. (BA) has decided against ramping up its commercial aircraft production schedule to make up for time lost when its machinists were on an eight-week strike this fall. Aircraft production was halted for 58 days while the company resolved the strike, but it will take some time for the company to bring its factories up to their normal rate of about 41 jets a month.
Toyota Motor Corp. (TM) announced it will reduce production in the United States to cope with slowing sales in the world's largest economy. Toyota will stop production at all its plants in the U.S. and Canada for two extra days in addition to the regular Christmas holidays next month.
BASF SE (BASF) announced it would temporarily close 80 plants worldwide due to slumping demand and cut production at 100 more, a move that will affect 20,000 workers. It abandoned its goal to match last year's profit, citing slowing demand for its products, particularly from automotive customers.
E-Trade Financial Corp. (ETFC) said customers executed an increasing amount of trades in October, though their total assets declined amid tumbling markets. E-Trade said its customers completed an average of almost 249,000 trades per day in October which is a 15 percent increase from both the same period last year and the prior month.
Teva Pharmaceutical Industries Ltd. (TEVA) said the Food and Drug Administration approved its version of AstraZeneca's asthma treatment Pulmicort. Sales for the doses it will sell reached about $966 million in the U.S. during the 12 months ended Sept. 30th.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Nov 14th), Philadelphia Fed Index (Nov), Leading Indicators (Oct)
In Earnings News
BJ's Wholesale Club Inc. (BJ) said fiscal third-quarter profit rose 24 percent, helped by sales of gasoline and shoppers hunting for bargains. Profit for the quarter rose to $28.2 million or 48 cents per share. Analyst expected a profit of 46 cents per share.
Hewlett-Packard (HPQ) expects earnings of 84 cents per share and adjusted earnings of $1.03 per share for the three months ended in October. This is slightly better than the $1 per share, excluding items that analysts are expecting.
Philips-Van Heusen Corp (PVH) reported its third-quarter net income fell to $53.7 million or $1.03 a share. Analysts had forecast earnings of $1.07 a share.
La-Z-Boy Inc (LZB) reported its fiscal second-quarter loss widened to $53.7 million or $1.04 a share. Results for the latest quarter included one-time charges of 78 cents a share. Analysts estimated La-Z-Boy would break even.
Pacific Sunwear (PSUN) reported its third-quarter net loss narrowed to $2.5 million or 4 cents a share. The latest loss from continuing operations came in at 5 cents a share against profit of 25 cents a year earlier. Analysts had forecast a loss of a penny a share.
LDK Solar (LDK) reported third-quarter earnings doubled as revenue tripled. Net income was $88.4 million, or 77 cents an American depositary share. A survey of analysts produced consensus estimates of 73 cents of profit on $530 million of revenue.
Scheduled Earnings Reports (Thursday)
Barnes & Noble, Dell, Limited Brands, Foot Locker, Novatel Wireless, Perry Ellis International, Gap, Shoe Carnival, Brinks Home Security, Williams Industries
Stocks in the News
Miva (MIVA) traded higher after Blinx, the U.K. video search engine, revived a proposal to buy the digital-media company, offering 55 cents a share cash.
Protective Life Corp (PL) has applied to the U.S. Federal Reserve to become a bank-holding company and to the U.S. Treasury to participate in its capital-purchase program.
IMAX Corp (IMAX) traded higher after Disney announced it will release five movies in IMAX.
Insituform Technologies (INSU) reorganized its North America Region unit and pared 35 management and support positions.
Molson Coors Brewing (TAP) said Vice Chairman Pete Coors will succeed Eric Molson as chairman on Dec. 29th. Molson plans to step down from the board in May.
Trina Solar (TSL) reported third-quarter net income quadrupled as revenue tripled.
The Labor Department said that consumer prices fell by 1 percent last month, the biggest one-month decline on records that go back to February 1947. The drop was twice as large as the 0.5 percent decline analysts expected.
Oil prices slipped further today, dipping below $54 on fears of global economic weakness that have sent crude down more than 60 percent in four months. But analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark.
OPEC is concerned by the worsening world economy and the falling oil price, which has wiped close to $700 billion from its coffers. Oil ministers from the Organization of the Petroleum Exporting Countries gather for informal talks on a further oil supply cut in Cairo on Nov.29th and are scheduled to meet again on Dec.17th in Algeria.
The American Petroleum Institute said U.S. petroleum deliveries, an indication of demand, dropped 5% from January through October - marking their largest decline since the early 1980's. Total domestic deliveries averaged 19.6 million barrels per day in the January-to-October period, the lowest level for the period since 2000.
In other economic news, the Commerce Department reported that construction of new homes and apartments fell by 4.5 percent in October to an annual rate of 791,000 units. That was the slowest construction pace on records going back to 1959 and emphasized that housing remains caught in a severe slump.
Mortgage applications fell a seasonally adjusted 6.2% last week from the prior week, as lower interest rates on fixed-rate mortgages failed to stir prospective homebuyers to action. Application volume for the week ended Nov. 14th was down 41.3% on an unadjusted basis compared with the same week in 2007.
The Semiconductor Industry Association said it expects the first decline in chip sales since 2001. Although the forecast projects 2008 sales of $261 billion, a 2.2% increase from 2007, it said sales in the "historically strong" current quarter, are seen declining 5.9% from the prior quarter, and 2009 sales falling by 5.6% before resuming growth in 2010.
Boeing Co. (BA) has decided against ramping up its commercial aircraft production schedule to make up for time lost when its machinists were on an eight-week strike this fall. Aircraft production was halted for 58 days while the company resolved the strike, but it will take some time for the company to bring its factories up to their normal rate of about 41 jets a month.
Toyota Motor Corp. (TM) announced it will reduce production in the United States to cope with slowing sales in the world's largest economy. Toyota will stop production at all its plants in the U.S. and Canada for two extra days in addition to the regular Christmas holidays next month.
BASF SE (BASF) announced it would temporarily close 80 plants worldwide due to slumping demand and cut production at 100 more, a move that will affect 20,000 workers. It abandoned its goal to match last year's profit, citing slowing demand for its products, particularly from automotive customers.
E-Trade Financial Corp. (ETFC) said customers executed an increasing amount of trades in October, though their total assets declined amid tumbling markets. E-Trade said its customers completed an average of almost 249,000 trades per day in October which is a 15 percent increase from both the same period last year and the prior month.
Teva Pharmaceutical Industries Ltd. (TEVA) said the Food and Drug Administration approved its version of AstraZeneca's asthma treatment Pulmicort. Sales for the doses it will sell reached about $966 million in the U.S. during the 12 months ended Sept. 30th.
Scheduled U.S. Economic Reports (Thursday)
Initial Jobless Claims (Week of Nov 14th), Philadelphia Fed Index (Nov), Leading Indicators (Oct)
In Earnings News
BJ's Wholesale Club Inc. (BJ) said fiscal third-quarter profit rose 24 percent, helped by sales of gasoline and shoppers hunting for bargains. Profit for the quarter rose to $28.2 million or 48 cents per share. Analyst expected a profit of 46 cents per share.
Hewlett-Packard (HPQ) expects earnings of 84 cents per share and adjusted earnings of $1.03 per share for the three months ended in October. This is slightly better than the $1 per share, excluding items that analysts are expecting.
Philips-Van Heusen Corp (PVH) reported its third-quarter net income fell to $53.7 million or $1.03 a share. Analysts had forecast earnings of $1.07 a share.
La-Z-Boy Inc (LZB) reported its fiscal second-quarter loss widened to $53.7 million or $1.04 a share. Results for the latest quarter included one-time charges of 78 cents a share. Analysts estimated La-Z-Boy would break even.
Pacific Sunwear (PSUN) reported its third-quarter net loss narrowed to $2.5 million or 4 cents a share. The latest loss from continuing operations came in at 5 cents a share against profit of 25 cents a year earlier. Analysts had forecast a loss of a penny a share.
LDK Solar (LDK) reported third-quarter earnings doubled as revenue tripled. Net income was $88.4 million, or 77 cents an American depositary share. A survey of analysts produced consensus estimates of 73 cents of profit on $530 million of revenue.
Scheduled Earnings Reports (Thursday)
Barnes & Noble, Dell, Limited Brands, Foot Locker, Novatel Wireless, Perry Ellis International, Gap, Shoe Carnival, Brinks Home Security, Williams Industries
Stocks in the News
Miva (MIVA) traded higher after Blinx, the U.K. video search engine, revived a proposal to buy the digital-media company, offering 55 cents a share cash.
Protective Life Corp (PL) has applied to the U.S. Federal Reserve to become a bank-holding company and to the U.S. Treasury to participate in its capital-purchase program.
IMAX Corp (IMAX) traded higher after Disney announced it will release five movies in IMAX.
Insituform Technologies (INSU) reorganized its North America Region unit and pared 35 management and support positions.
Molson Coors Brewing (TAP) said Vice Chairman Pete Coors will succeed Eric Molson as chairman on Dec. 29th. Molson plans to step down from the board in May.
Trina Solar (TSL) reported third-quarter net income quadrupled as revenue tripled.
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