JDfn Daily Digest - September 18, 2008
The world's major central banks banded together to inject as much as $180 billion into money markets in a bid to stave off the growing global financial crisis. The Federal Reserve joined with the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank to pump more short-term dollar liquidity into the financial system.
The Federal Reserve added another $50 billion in overnight loans to help liquefy money markets, matching the amount offered twice already this week. The New York branch of the central bank uses repurchase agreements, or repos, almost every business day to meet demand from banks and primary dealers.
Kraft Foods (KFT) will replace troubled insurance giant American International Group (AIG) on the Dow Jones Industrial Average, effective Monday. Dow refrained from adding another stock in the financial sector because of "the extremely unsettled conditions.”
Morgan Stanley (MS) is considering a merger with Wachovia Corp. (WB) or another bank as one of the last two big brokerage firms tries to halt a collapse in its stock price. Morgan Stanley and others were also getting some relief from a large, coordinated liquidity injection into the markets from a consortium of central banks.
The Labor Department reported that initial claims for state jobless benefits rose by 10,000 in the latest week, reflecting claims filed by residents of Louisiana hit by Hurricane Gustav. Claims for the week ending Sept. 13th rose to 455,000, the highest since Aug. 2nd. The four-week average of those claims also rose, by 5,000, to 445,000.
Manufacturing in the Philadelphia region picked up unexpectedly in early September. The Philly Fed index rose to 3.8 in September from negative 12.7 in August. Readings above zero indicate expansion. Economists were expecting the index to improve only to negative 10.0.
The Conference Board reported the index of leading economic indicators fell 0.5% in August after a 0.7% drop in July. But Ken Goldstein, a Conference Board economist, said, “The good news on lower gas prices have been more than offset by renewed, even intensified, financial market turmoil.”
MidAmerican Energy Holdings Co. reached a tentative deal to buy Constellation Energy (CEG) for a cash consideration of approximately $4.7 billion, or $26.50 a share. The deal was unanimously approved by both companies' boards and they expect a definitive merger agreement by the close of business Friday. The transaction is expected to close within nine months.
Auto supplier Federal-Mogul (FDMU) says it is cutting its work force by 4,000 jobs, or 8%, due to a tough automotive market. The company said the cuts are part of a restructuring plan that will streamline business, consolidate or close locations, and lower general and administrative staffing.
The Navy has awarded a division of Lockheed Martin Corp. (LMT) an additional $35 million dollars on a contract for engineering on U.S. and British ballistic missiles. The modification raises the value of the contract to $112 million for work on the Trident II missile. Work is expected to be finished by September 2011.
Scheduled U.S. Economic Reports (Friday)
None Scheduled
In Earnings News
FedEx (FDX) says its fiscal first-quarter earnings fell 22 percent but still met Wall Street's expectations as cost cuts partially offset the impact of slowing global growth. The company said it earned $384 million, or $1.23 per share. Analysts were expecting a profit of $1.23 per share on revenue of $9.92 billion.
Carnival Corp (CCL) reported its third-quarter net income was $1.33 billion, or $1.65 a share, compared to $1.38 billion, or $1.67 a share, in the year-earlier period. For the fourth quarter, Carnival expects earnings of 36 cents to 38 cents a share, down from 44 cents a share a year ago.
ConAgra (CAG) reported earnings of $442.2 million, or 94 cents per share, up from $175.4 million, or 36 cents per share, a year ago. But it says earnings from continuing operations totaled 23 cents per share - a penny below Wall Street expectations.
Pier 1 Imports Inc. (PIR) reported a loss of $30.2 million in the second quarter -- a smaller loss than a year ago but greater than Wall Street expected -- as it reduced operating expenses. The retailer said its per-share loss was 34 cents in the quarter while analysts expected a loss of 24 cents.
CKE Restaurants Inc. (CKR), operator of the Carl's Jr. and Hardee's chains, said that its second-quarter profit rose 31 percent as it cut operating costs. The company earned $12.3 million, or 23 cents per share. Analysts expected 20 cents per share.
Scheduled Earnings Reports (Friday)
As the second quarter earnings season comes to an end there are no major earnings scheduled for release on Friday. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Google Inc.'s (GOOG) much-awaited mobile device based on the company's "Android" software is expected to sell for $199.
Dr. Reddy’s Labs (RDY), Indian generic drug maker, said that it plans to launch a wholly-owned U.S. subsidiary called Promius Pharma.
Eli Lilly and Company (LLY) said that its board named John Lechleiter to serve as chairman, effective Jan. 1st.
Comtech Telecommunications (CMTL) fourth-quarter net income fell to $17 million or 61 cents a share.
99 Cents Only Stores (NDN) plans to leave Texas, closing 48 stores, and focus on its core markets of California, Arizona and Nevada.
TECO Energy (TE) affirmed its 2008 forecast of earnings of 80 cents to 90 cents a share, excluding charges or gains.
Prologis (PLD) was cut to hold from buy at Deutsche Bank, with the broker citing the company's reduction in earnings guidance.
Herman Miller Inc (MLHR) fiscal first-quarter profit fell to $33.4 million from $33.5 million in the year-ago period.
The Federal Reserve added another $50 billion in overnight loans to help liquefy money markets, matching the amount offered twice already this week. The New York branch of the central bank uses repurchase agreements, or repos, almost every business day to meet demand from banks and primary dealers.
Kraft Foods (KFT) will replace troubled insurance giant American International Group (AIG) on the Dow Jones Industrial Average, effective Monday. Dow refrained from adding another stock in the financial sector because of "the extremely unsettled conditions.”
Morgan Stanley (MS) is considering a merger with Wachovia Corp. (WB) or another bank as one of the last two big brokerage firms tries to halt a collapse in its stock price. Morgan Stanley and others were also getting some relief from a large, coordinated liquidity injection into the markets from a consortium of central banks.
The Labor Department reported that initial claims for state jobless benefits rose by 10,000 in the latest week, reflecting claims filed by residents of Louisiana hit by Hurricane Gustav. Claims for the week ending Sept. 13th rose to 455,000, the highest since Aug. 2nd. The four-week average of those claims also rose, by 5,000, to 445,000.
Manufacturing in the Philadelphia region picked up unexpectedly in early September. The Philly Fed index rose to 3.8 in September from negative 12.7 in August. Readings above zero indicate expansion. Economists were expecting the index to improve only to negative 10.0.
The Conference Board reported the index of leading economic indicators fell 0.5% in August after a 0.7% drop in July. But Ken Goldstein, a Conference Board economist, said, “The good news on lower gas prices have been more than offset by renewed, even intensified, financial market turmoil.”
MidAmerican Energy Holdings Co. reached a tentative deal to buy Constellation Energy (CEG) for a cash consideration of approximately $4.7 billion, or $26.50 a share. The deal was unanimously approved by both companies' boards and they expect a definitive merger agreement by the close of business Friday. The transaction is expected to close within nine months.
Auto supplier Federal-Mogul (FDMU) says it is cutting its work force by 4,000 jobs, or 8%, due to a tough automotive market. The company said the cuts are part of a restructuring plan that will streamline business, consolidate or close locations, and lower general and administrative staffing.
The Navy has awarded a division of Lockheed Martin Corp. (LMT) an additional $35 million dollars on a contract for engineering on U.S. and British ballistic missiles. The modification raises the value of the contract to $112 million for work on the Trident II missile. Work is expected to be finished by September 2011.
Scheduled U.S. Economic Reports (Friday)
None Scheduled
In Earnings News
FedEx (FDX) says its fiscal first-quarter earnings fell 22 percent but still met Wall Street's expectations as cost cuts partially offset the impact of slowing global growth. The company said it earned $384 million, or $1.23 per share. Analysts were expecting a profit of $1.23 per share on revenue of $9.92 billion.
Carnival Corp (CCL) reported its third-quarter net income was $1.33 billion, or $1.65 a share, compared to $1.38 billion, or $1.67 a share, in the year-earlier period. For the fourth quarter, Carnival expects earnings of 36 cents to 38 cents a share, down from 44 cents a share a year ago.
ConAgra (CAG) reported earnings of $442.2 million, or 94 cents per share, up from $175.4 million, or 36 cents per share, a year ago. But it says earnings from continuing operations totaled 23 cents per share - a penny below Wall Street expectations.
Pier 1 Imports Inc. (PIR) reported a loss of $30.2 million in the second quarter -- a smaller loss than a year ago but greater than Wall Street expected -- as it reduced operating expenses. The retailer said its per-share loss was 34 cents in the quarter while analysts expected a loss of 24 cents.
CKE Restaurants Inc. (CKR), operator of the Carl's Jr. and Hardee's chains, said that its second-quarter profit rose 31 percent as it cut operating costs. The company earned $12.3 million, or 23 cents per share. Analysts expected 20 cents per share.
Scheduled Earnings Reports (Friday)
As the second quarter earnings season comes to an end there are no major earnings scheduled for release on Friday. Third quarter earnings season begins on October 7th when Alcoa releases its quarterly numbers.
Stocks in the News
Google Inc.'s (GOOG) much-awaited mobile device based on the company's "Android" software is expected to sell for $199.
Dr. Reddy’s Labs (RDY), Indian generic drug maker, said that it plans to launch a wholly-owned U.S. subsidiary called Promius Pharma.
Eli Lilly and Company (LLY) said that its board named John Lechleiter to serve as chairman, effective Jan. 1st.
Comtech Telecommunications (CMTL) fourth-quarter net income fell to $17 million or 61 cents a share.
99 Cents Only Stores (NDN) plans to leave Texas, closing 48 stores, and focus on its core markets of California, Arizona and Nevada.
TECO Energy (TE) affirmed its 2008 forecast of earnings of 80 cents to 90 cents a share, excluding charges or gains.
Prologis (PLD) was cut to hold from buy at Deutsche Bank, with the broker citing the company's reduction in earnings guidance.
Herman Miller Inc (MLHR) fiscal first-quarter profit fell to $33.4 million from $33.5 million in the year-ago period.
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