JDfn Daily Digest - November 26, 2008
Despite falling gas prices and unusual last-minute holiday deals on airplane tickets, more people are expected to stick close to home this Thanksgiving. In fact, the AAA says the 41 million Americans expected to take trips at least 50 miles for Thanksgiving is about 600,000 less than traveled last Thanksgiving.
All U.S. financial markets will be closed tomorrow in observance of the Thanksgiving Holiday and will close at 1 p.m. (Eastern Time) on Friday.
Paul Volcker, the former Federal Reserve chairman who throttled the economy to crush inflation in the 1980s, will lead a new White House panel aimed at reviving growth. President-elect Obama will name the 81-year-old Volcker as chairman of the new President’s Economic Recovery Advisory Board today.
The European Commission wants EU governments to jointly combat the growing economic slowdown with a euro200 billion (US$256.22 billion) stimulus plan to boost growth and confidence among consumers and businesses.
And China announced its biggest interest rate cut in 11 years to encourage private borrowing and support a multibillion-dollar stimulus package to boost slowing economic growth. The 1.08 percentage-point rate cut -- the fourth cut in three months -- reflects the government's urgency about raising private consumption and investment to supplement state spending on the stimulus package.
American International Group Inc. (AIG) announced today it received $40 billion from the Treasury Department as part of the government's latest plan to help the embattled insurer stay in business. The money will come from the Treasury's $700 billion financial services investment program that is aimed as improving the ongoing turmoil in the credit markets.
The Labor Department said that first-time claims for state unemployment benefits fell by 14,000 to 529,000 in the week ending Nov. 22nd. The four-week average of those claims rose to a 25-year high of 518,000.
The Commerce Department reported that consumer spending fell 1% in October, the largest decline since September 2001. The result matched analysts' expectations. Real consumer spending fell 0.5%. Personal income rose 0.3% in October after a 0.1% gain in September. Analysts were looking for a 0.1% income gain for October.
Orders for U.S.-made durable goods fell 6.2% in October, the largest decline in two years, as orders for transportation goods fell 11.1%. Economists expected an overall decline of 2.5%. Excluding transportation, orders fell 4.4%.
The Chicago Purchasing Managers Index fell four points in November to its lowest level since 1982, following a trend set by every other regional manufacturing report earlier this month. The Chicago index fell to 33.8 from October's reading of 37.8, well below consensus expectations of a 37.0 reading.
According to the University of Michigan, U.S. consumer sentiment fell in November. The index fell to 55.3 from an early November reading of 57.9. The survey recorded the largest monthly decline in consumer confidence in its history in October.
The Commerce Department reported sales of new homes fell an estimated 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since 1991. Economists had expected a result of 441,500.
According to Freddie Mac's survey the national average interest rate on the benchmark 30-year, fixed-rate mortgage loan hit a seven-week low. The rate averaged 5.97%, down from last week's 6.04% and the year-ago 6.10%.
Johnson & Johnson (JNJ) said the U.S. Food and Drug Administration rejected its new-drug application for an antibiotic for the treatment of complicated skin and skin-structure infections, including diabetic-foot infections.
Monster Worldwide Inc. (MWW) announced that it has formed a joint venture with Rupert Murdoch's News Corp Ltd. (NWS) for online and print recruitment services. Monster said the deal, which gives it 50 percent ownership of the Australian job Web site CareerOne, will broaden its global reach and strengthen its market position.
Scheduled U.S. Economic Reports (Next Week)
ISM Manufacturing Index, Construction Spending, ISM Services Index, Beige Book, Productivity, Factory Orders, Consumer Credit
In Earnings News
Tiffany (TIF) earned $43.8 million, or 35 cents per share, less than half its year-ago profit of $101.5 million, or 73 cents per share. The results beat analysts' average profit estimate of 25 cents per share.
Deere & Company (DE) said it earned $345 million, or 81 cents per share, for the three months ended Oct. 31st, compared with $422.1 million, or 94 cents per share, during the same period last year. Analysts, on average, predicted earnings per share of 99 cents.
Conn's Inc. (CONN) said it lost $7.7 million in its fiscal third quarter. The company lost 35 cents per share in the three months that ended Oct. 31st. Analysts expected 16 cents per share.
Fred's Inc. (FRED) reported its third-quarter profit rose 32 percent, as the company cut its expenses. The company earned $6.1 million, or 15 cents per share, in the three months ended Nov. 1st. That is in line with analysts’ estimates.
Scheduled Earnings Reports (Next Week)
Sears Holding Corp, Beazer Homes, Toll Brothers, Del Monte Foods, Staples, Isle of Capri Casinos, Car-Mart, Jackson Hewitt Tax Service, Layne Christensen, Smithfield Foods, Williams Sonoma, Big Lots
Stocks in the News
Fannie Mae (FNM) appointed David Johnson as the mortgage giant's chief financial officer. Johnson used to be CFO of insurer Hartford Financial Services.
Borders Group (BGP) reported its third-quarter loss from continuing operations widened to $172.2 million or $2.85 a share.
Coldwater Creek (CWTR) reported its third-quarter net loss narrowed to $1.3 million or a penny a share.
J. Crew Group (JCG) reported its third-quarter net income fell to $19 million or 30 cents a share, from $26.8 million, or 42 cents a share, in the year-earlier period.
Exelon Corp (EXC) will take its $6.2 billion bid for NRG Energy (NRG) to holders after the company rejected its initial offer.
Central Garden & Pet Company (CENT) reported a wider fiscal fourth-quarter loss on 3.2% higher sales.
HSBC Holdings (HBC) was upgraded by UBS to buy from neutral, citing valuation.
All U.S. financial markets will be closed tomorrow in observance of the Thanksgiving Holiday and will close at 1 p.m. (Eastern Time) on Friday.
Paul Volcker, the former Federal Reserve chairman who throttled the economy to crush inflation in the 1980s, will lead a new White House panel aimed at reviving growth. President-elect Obama will name the 81-year-old Volcker as chairman of the new President’s Economic Recovery Advisory Board today.
The European Commission wants EU governments to jointly combat the growing economic slowdown with a euro200 billion (US$256.22 billion) stimulus plan to boost growth and confidence among consumers and businesses.
And China announced its biggest interest rate cut in 11 years to encourage private borrowing and support a multibillion-dollar stimulus package to boost slowing economic growth. The 1.08 percentage-point rate cut -- the fourth cut in three months -- reflects the government's urgency about raising private consumption and investment to supplement state spending on the stimulus package.
American International Group Inc. (AIG) announced today it received $40 billion from the Treasury Department as part of the government's latest plan to help the embattled insurer stay in business. The money will come from the Treasury's $700 billion financial services investment program that is aimed as improving the ongoing turmoil in the credit markets.
The Labor Department said that first-time claims for state unemployment benefits fell by 14,000 to 529,000 in the week ending Nov. 22nd. The four-week average of those claims rose to a 25-year high of 518,000.
The Commerce Department reported that consumer spending fell 1% in October, the largest decline since September 2001. The result matched analysts' expectations. Real consumer spending fell 0.5%. Personal income rose 0.3% in October after a 0.1% gain in September. Analysts were looking for a 0.1% income gain for October.
Orders for U.S.-made durable goods fell 6.2% in October, the largest decline in two years, as orders for transportation goods fell 11.1%. Economists expected an overall decline of 2.5%. Excluding transportation, orders fell 4.4%.
The Chicago Purchasing Managers Index fell four points in November to its lowest level since 1982, following a trend set by every other regional manufacturing report earlier this month. The Chicago index fell to 33.8 from October's reading of 37.8, well below consensus expectations of a 37.0 reading.
According to the University of Michigan, U.S. consumer sentiment fell in November. The index fell to 55.3 from an early November reading of 57.9. The survey recorded the largest monthly decline in consumer confidence in its history in October.
The Commerce Department reported sales of new homes fell an estimated 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since 1991. Economists had expected a result of 441,500.
According to Freddie Mac's survey the national average interest rate on the benchmark 30-year, fixed-rate mortgage loan hit a seven-week low. The rate averaged 5.97%, down from last week's 6.04% and the year-ago 6.10%.
Johnson & Johnson (JNJ) said the U.S. Food and Drug Administration rejected its new-drug application for an antibiotic for the treatment of complicated skin and skin-structure infections, including diabetic-foot infections.
Monster Worldwide Inc. (MWW) announced that it has formed a joint venture with Rupert Murdoch's News Corp Ltd. (NWS) for online and print recruitment services. Monster said the deal, which gives it 50 percent ownership of the Australian job Web site CareerOne, will broaden its global reach and strengthen its market position.
Scheduled U.S. Economic Reports (Next Week)
ISM Manufacturing Index, Construction Spending, ISM Services Index, Beige Book, Productivity, Factory Orders, Consumer Credit
In Earnings News
Tiffany (TIF) earned $43.8 million, or 35 cents per share, less than half its year-ago profit of $101.5 million, or 73 cents per share. The results beat analysts' average profit estimate of 25 cents per share.
Deere & Company (DE) said it earned $345 million, or 81 cents per share, for the three months ended Oct. 31st, compared with $422.1 million, or 94 cents per share, during the same period last year. Analysts, on average, predicted earnings per share of 99 cents.
Conn's Inc. (CONN) said it lost $7.7 million in its fiscal third quarter. The company lost 35 cents per share in the three months that ended Oct. 31st. Analysts expected 16 cents per share.
Fred's Inc. (FRED) reported its third-quarter profit rose 32 percent, as the company cut its expenses. The company earned $6.1 million, or 15 cents per share, in the three months ended Nov. 1st. That is in line with analysts’ estimates.
Scheduled Earnings Reports (Next Week)
Sears Holding Corp, Beazer Homes, Toll Brothers, Del Monte Foods, Staples, Isle of Capri Casinos, Car-Mart, Jackson Hewitt Tax Service, Layne Christensen, Smithfield Foods, Williams Sonoma, Big Lots
Stocks in the News
Fannie Mae (FNM) appointed David Johnson as the mortgage giant's chief financial officer. Johnson used to be CFO of insurer Hartford Financial Services.
Borders Group (BGP) reported its third-quarter loss from continuing operations widened to $172.2 million or $2.85 a share.
Coldwater Creek (CWTR) reported its third-quarter net loss narrowed to $1.3 million or a penny a share.
J. Crew Group (JCG) reported its third-quarter net income fell to $19 million or 30 cents a share, from $26.8 million, or 42 cents a share, in the year-earlier period.
Exelon Corp (EXC) will take its $6.2 billion bid for NRG Energy (NRG) to holders after the company rejected its initial offer.
Central Garden & Pet Company (CENT) reported a wider fiscal fourth-quarter loss on 3.2% higher sales.
HSBC Holdings (HBC) was upgraded by UBS to buy from neutral, citing valuation.
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