JDfn Daily Digest - November 25, 2008
The Federal Reserve announced it will buy up to $600 billion in mortgage-backed assets in another attempt to deal with the financial crisis. The Fed said it will purchase up to $100 billion in direct obligations from mortgage giants Fannie Mae and Freddie Mac as well as the Federal Home Loan Banks. It also will purchase another $500 billion in mortgage-backed securities, pools of mortgages that are bundled together and sold to investors.
The government is working on a new loan program to help companies that issue credit cards make student loans and finance car purchases. The Treasury Department and the Federal Reserve will unveil the program today. Treasury Secretary Paulson said he plans to use a "relatively modest share" of the $700 billion financial bailout money to pay for the new program.
The Commerce Department reported that gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter. That was weaker than the 0.3 percent rate of decline first estimated a month ago, and marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.
The Organization for Economic Cooperation and Development (OECD) said the financial crisis will likely push the world's developed countries into their worst recession since the early 1980s. In its half-yearly economic outlook, the organization said economic output will likely contract by 0.4 percent in 2009.
According to the Standard & Poor's/Case-Shiller Home Price Indices, prices of single-family homes in September plunged a record 17.4 percent from a year earlier. The composite index of 20 metropolitan areas fell 1.8 percent in September from August.
The Conference Board says its Consumer Confidence Index stands at 44.9, up from a revised 38.8 in October. Last month's reading was the lowest since the research group started tracking the index in 1967.
BHP Billiton Ltd. (BBL), the world's biggest mining company, abandoned a hostile $68 billion takeover bid for rival Rio Tinto Ltd. (RTP), blaming the global economic downturn and plunging commodity prices.
Royal Philips Electronics NV (PHG) said it plans to cut 1,600 jobs at its health care division in response to a global economic slowdown. A corporate spokesman said the cuts fall mostly in the U.S., Germany and Netherlands, where its medical imaging operations are largest. The company will try to avoid forced layoffs but some were likely anyway.
Scheduled U.S. Economic Reports (Wednesday)
Durable Goods, Initial Jobless Claims, Personal Income & Spending, Chicago PMI, University of Michigan Consumer Sentiment, New Home Sales
In Earnings News
DR Horton (DHI) reported a net loss of $799.9 million, or $2.53 a share, compared to a loss of $50.1 million or 16 cents a share, in the year-ago period. Total sales for the quarter were $1.75 billion, down from $3.12 billion in the fourth quarter 2007.
Hormel Foods Corp (HRL) reported its fiscal fourth-quarter profit fell 33 percent. The company earned $67.8 million, or 50 cents per share, in the three months ended Oct. 26th. That's down from $101.2 million, or 73 cents per share, a year ago. Analysts expected earnings of 48 cents per share.
Dollar Tree (DLTR) reported third-quarter profit rose 20 percent. Profit for the quarter rose to $43.1 million, or 47 cents per share. Analysts predicted a profit of 44 cents per share.
Genesco Inc. (GCO) said its fiscal third-quarter profit rose 68.5 percent as it paid lower restructuring charges than a year ago. The company earned $9.4 million, or 43 cents per share. Analysts surveyed had expected per-share profit of 47 cents.
Talbots Inc. (TLB) announced its third-quarter loss widened on the closing of some units, along with softer traffic and consumer spending. For the quarter, Talbots reported a loss of $167.2 million, or $3.13 per share.
Scheduled Earnings Reports (Wednesday)
Deere and Company, Tiffany, Conn’s, Fred’s
Stocks in the News
China Sunergy (CSUN) reported a third-quarter profit of $211,000, or a penny a share, as revenue rose to $119 million from $49 million.
Blockbuster Inc (BBI) and 2Wire introduced a media player that will deliver movies direct to consumers' television sets.
VeraSun Energy Corp (VSUNQ) said it received an unsolicited indication of interest in buying substantially all its assets.
Skanska AB (SKSBY) said it would cut 3,400, or about 5.7%, of its 60,000 jobs as residential and other building markets are weakening.
American Woodmark Corp (AMWD) reported a fiscal second-quarter loss from net income a year earlier on 16% lower sales.
Pulte Homes (PHM) omitted the dividend starting in the first quarter of 2009.
Donaldson Company’s (DCI) fiscal first-quarter net income rose to $48 million, or 60 cents a share, from $43.3 million, or 53 cents a share, in the year-earlier quarter.
Vimpel Communications (VIP) reported third-quarter net income of $268.6 million, or 27 cents an American depositary share.
The government is working on a new loan program to help companies that issue credit cards make student loans and finance car purchases. The Treasury Department and the Federal Reserve will unveil the program today. Treasury Secretary Paulson said he plans to use a "relatively modest share" of the $700 billion financial bailout money to pay for the new program.
The Commerce Department reported that gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter. That was weaker than the 0.3 percent rate of decline first estimated a month ago, and marked the worst showing since the economy contracted at a 1.4 percent pace in the third quarter of 2001, when the nation was suffering through its last recession.
The Organization for Economic Cooperation and Development (OECD) said the financial crisis will likely push the world's developed countries into their worst recession since the early 1980s. In its half-yearly economic outlook, the organization said economic output will likely contract by 0.4 percent in 2009.
According to the Standard & Poor's/Case-Shiller Home Price Indices, prices of single-family homes in September plunged a record 17.4 percent from a year earlier. The composite index of 20 metropolitan areas fell 1.8 percent in September from August.
The Conference Board says its Consumer Confidence Index stands at 44.9, up from a revised 38.8 in October. Last month's reading was the lowest since the research group started tracking the index in 1967.
BHP Billiton Ltd. (BBL), the world's biggest mining company, abandoned a hostile $68 billion takeover bid for rival Rio Tinto Ltd. (RTP), blaming the global economic downturn and plunging commodity prices.
Royal Philips Electronics NV (PHG) said it plans to cut 1,600 jobs at its health care division in response to a global economic slowdown. A corporate spokesman said the cuts fall mostly in the U.S., Germany and Netherlands, where its medical imaging operations are largest. The company will try to avoid forced layoffs but some were likely anyway.
Scheduled U.S. Economic Reports (Wednesday)
Durable Goods, Initial Jobless Claims, Personal Income & Spending, Chicago PMI, University of Michigan Consumer Sentiment, New Home Sales
In Earnings News
DR Horton (DHI) reported a net loss of $799.9 million, or $2.53 a share, compared to a loss of $50.1 million or 16 cents a share, in the year-ago period. Total sales for the quarter were $1.75 billion, down from $3.12 billion in the fourth quarter 2007.
Hormel Foods Corp (HRL) reported its fiscal fourth-quarter profit fell 33 percent. The company earned $67.8 million, or 50 cents per share, in the three months ended Oct. 26th. That's down from $101.2 million, or 73 cents per share, a year ago. Analysts expected earnings of 48 cents per share.
Dollar Tree (DLTR) reported third-quarter profit rose 20 percent. Profit for the quarter rose to $43.1 million, or 47 cents per share. Analysts predicted a profit of 44 cents per share.
Genesco Inc. (GCO) said its fiscal third-quarter profit rose 68.5 percent as it paid lower restructuring charges than a year ago. The company earned $9.4 million, or 43 cents per share. Analysts surveyed had expected per-share profit of 47 cents.
Talbots Inc. (TLB) announced its third-quarter loss widened on the closing of some units, along with softer traffic and consumer spending. For the quarter, Talbots reported a loss of $167.2 million, or $3.13 per share.
Scheduled Earnings Reports (Wednesday)
Deere and Company, Tiffany, Conn’s, Fred’s
Stocks in the News
China Sunergy (CSUN) reported a third-quarter profit of $211,000, or a penny a share, as revenue rose to $119 million from $49 million.
Blockbuster Inc (BBI) and 2Wire introduced a media player that will deliver movies direct to consumers' television sets.
VeraSun Energy Corp (VSUNQ) said it received an unsolicited indication of interest in buying substantially all its assets.
Skanska AB (SKSBY) said it would cut 3,400, or about 5.7%, of its 60,000 jobs as residential and other building markets are weakening.
American Woodmark Corp (AMWD) reported a fiscal second-quarter loss from net income a year earlier on 16% lower sales.
Pulte Homes (PHM) omitted the dividend starting in the first quarter of 2009.
Donaldson Company’s (DCI) fiscal first-quarter net income rose to $48 million, or 60 cents a share, from $43.3 million, or 53 cents a share, in the year-earlier quarter.
Vimpel Communications (VIP) reported third-quarter net income of $268.6 million, or 27 cents an American depositary share.
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