JDfn Daily Digest - October 24, 2008
The National Association of Realtors said that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.
The chief economist of the American Federation of Labor and Congress of Industrial Organizations said Congress moved quickly on the $700 billion financial rescue package and now working families throughout the country deserve the same attention. Ron Blackwell said as declines in stock and home prices continue to erode family wealth, and job losses keep rolling in, Congress is considering a second economic stimulus package. He told lawmakers that a well-crafted package can curb some pain from the recession.
The Federal Reserve is widely expected to cut interest rates again next week and there is speculation that the Fed soon go where it has never gone before - below the one percent mark. The Fed lowered its federal funds rate by a half-percentage point to 1.5% in an emergency announcement Oct. 8th. Many investors believe the central bank will cut rates by at least another half-percentage point following the end of a two-day meeting next week.
OPEC said at an emergency meeting that it will slash oil production by 1.5 million barrels to stem the "dramatic collapse" of oil prices, but crude prices plunged 5 percent anyway as financial markets spiraled downward across the globe.
World stock markets fell sharply on growing alarm that a sharp global recession will devastate corporate profits and push smaller developing economies to the brink of collapse. The sudden gloom over growth expectations is having the added impact of putting small economies and currencies under extreme pressure.
Chrysler LLC, whose owner has been in talks to sell the automaker to General Motors Corp., announced it will cut 25 percent of its salaried work force starting next month and warned that it will make more restructuring announcements in the coming weeks.
PNC Financial Services Group Inc. (PNC) announced it is acquiring National City Corp. (NCC) for $5.58 billion, in one of the first concrete signs of how banks could use fresh investments from a U.S. government bailout program.
Scheduled U.S. Economic Reports (Next Week)
New Home Sales, Consumer Confidence, Durable Goods, Personal Income, Chicago PMI
In Earnings News
Fortune Brands Inc. (FO) said third-quarter profit rose 61 percent, boosted by gains and sales growth of brands such as Jim Beam and Maker's Mark.
Gannett Co. (GCI) reported net income was $158 million, or 69 cents a share, on revenue of $1.64 billion. A year ago, net income was $234 million, or $1.01 per share. Revenue was higher than the $1.61 billion analysts predicted but 9 percent below last year. Excluding severance costs, Gannett would have earned 76 cents a share, a penny above what analysts expected.
ITT Corp. (ITT) said its third-quarter net income fell 6 percent, and a jump in costs offset a surge in revenue. For the quarter, the defense contractor posted net income of $216.3 million, or $1.18 per share, compared with net income of $230.1 million, or $1.25 per share, in the year-ago period.
T. Rowe Price (TROW) said net income for quarter fell to $152.8 million, or 56 cents per share, from a profit of $174.8 million, or 63 cents per share, in last year's third period. The latest quarter's profit was in line with the consensus forecast of 56 cents per share.
Volvo AB reported its third-quarter profit dropped 37 percent and lowered its outlook as the global financial crisis sapped demand for heavy vehicles in Europe, North America and Japan.
Liz Claiborne Inc. (LIZ) lowered its fourth-quarter and full-year guidance below expectations, ahead of the crucial holiday shopping season, due to deteriorating consumer spending patterns.
Scheduled Earnings Reports (Next Week)
Sony, Visa, Brinks, International Paper, Humana, BP Plc, Exxon Mobil, McGraw Hill, Honda, Colgate Palmolive, Martha Stewart Living Omnimedia, Occidental Petroleum, Royal Caribbean Cruises, Taser, Comcast, Hess Corp, Kraft Foods, Newmont Mining, Procter & Gamble, Motorola, Waste Management
Stocks in the News
MEMC Electronic Materials (WFR) reported a fiscal third-quarter profit of $182.8 million, or 80 cents a share.
Federated Investors (FII) said that third-quarter net income came in at $56.2 million, or 56 cents a share, down 3% from a year earlier.
Western Digital Corp (WDC) put in one of the few upbeat performances in the tech sector following an analyst raised the rating on the hard-disk drive maker.
Chubb Corp (CB) said that third-quarter net income came in at $264 million, or 73 cents a share, down 64% from a year earlier.
Hanesbrands Inc (HBI) said it expects to take a third-quarter charge of $5.5 million, or 4 cents a share.
Microchip Technology (MCHP) said that earnings rose 26% for its second fiscal quarter, thanks in part to a charge taken for the same period last year.
The chief economist of the American Federation of Labor and Congress of Industrial Organizations said Congress moved quickly on the $700 billion financial rescue package and now working families throughout the country deserve the same attention. Ron Blackwell said as declines in stock and home prices continue to erode family wealth, and job losses keep rolling in, Congress is considering a second economic stimulus package. He told lawmakers that a well-crafted package can curb some pain from the recession.
The Federal Reserve is widely expected to cut interest rates again next week and there is speculation that the Fed soon go where it has never gone before - below the one percent mark. The Fed lowered its federal funds rate by a half-percentage point to 1.5% in an emergency announcement Oct. 8th. Many investors believe the central bank will cut rates by at least another half-percentage point following the end of a two-day meeting next week.
OPEC said at an emergency meeting that it will slash oil production by 1.5 million barrels to stem the "dramatic collapse" of oil prices, but crude prices plunged 5 percent anyway as financial markets spiraled downward across the globe.
World stock markets fell sharply on growing alarm that a sharp global recession will devastate corporate profits and push smaller developing economies to the brink of collapse. The sudden gloom over growth expectations is having the added impact of putting small economies and currencies under extreme pressure.
Chrysler LLC, whose owner has been in talks to sell the automaker to General Motors Corp., announced it will cut 25 percent of its salaried work force starting next month and warned that it will make more restructuring announcements in the coming weeks.
PNC Financial Services Group Inc. (PNC) announced it is acquiring National City Corp. (NCC) for $5.58 billion, in one of the first concrete signs of how banks could use fresh investments from a U.S. government bailout program.
Scheduled U.S. Economic Reports (Next Week)
New Home Sales, Consumer Confidence, Durable Goods, Personal Income, Chicago PMI
In Earnings News
Fortune Brands Inc. (FO) said third-quarter profit rose 61 percent, boosted by gains and sales growth of brands such as Jim Beam and Maker's Mark.
Gannett Co. (GCI) reported net income was $158 million, or 69 cents a share, on revenue of $1.64 billion. A year ago, net income was $234 million, or $1.01 per share. Revenue was higher than the $1.61 billion analysts predicted but 9 percent below last year. Excluding severance costs, Gannett would have earned 76 cents a share, a penny above what analysts expected.
ITT Corp. (ITT) said its third-quarter net income fell 6 percent, and a jump in costs offset a surge in revenue. For the quarter, the defense contractor posted net income of $216.3 million, or $1.18 per share, compared with net income of $230.1 million, or $1.25 per share, in the year-ago period.
T. Rowe Price (TROW) said net income for quarter fell to $152.8 million, or 56 cents per share, from a profit of $174.8 million, or 63 cents per share, in last year's third period. The latest quarter's profit was in line with the consensus forecast of 56 cents per share.
Volvo AB reported its third-quarter profit dropped 37 percent and lowered its outlook as the global financial crisis sapped demand for heavy vehicles in Europe, North America and Japan.
Liz Claiborne Inc. (LIZ) lowered its fourth-quarter and full-year guidance below expectations, ahead of the crucial holiday shopping season, due to deteriorating consumer spending patterns.
Scheduled Earnings Reports (Next Week)
Sony, Visa, Brinks, International Paper, Humana, BP Plc, Exxon Mobil, McGraw Hill, Honda, Colgate Palmolive, Martha Stewart Living Omnimedia, Occidental Petroleum, Royal Caribbean Cruises, Taser, Comcast, Hess Corp, Kraft Foods, Newmont Mining, Procter & Gamble, Motorola, Waste Management
Stocks in the News
MEMC Electronic Materials (WFR) reported a fiscal third-quarter profit of $182.8 million, or 80 cents a share.
Federated Investors (FII) said that third-quarter net income came in at $56.2 million, or 56 cents a share, down 3% from a year earlier.
Western Digital Corp (WDC) put in one of the few upbeat performances in the tech sector following an analyst raised the rating on the hard-disk drive maker.
Chubb Corp (CB) said that third-quarter net income came in at $264 million, or 73 cents a share, down 64% from a year earlier.
Hanesbrands Inc (HBI) said it expects to take a third-quarter charge of $5.5 million, or 4 cents a share.
Microchip Technology (MCHP) said that earnings rose 26% for its second fiscal quarter, thanks in part to a charge taken for the same period last year.
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