JDfn Daily Digest - October 28, 2008

The Federal Reserve has announced it cut the Fed Funds Rate a half point to one percent. The FOMC said the state of the US economy has “slowed markedly.” The decision was unanimous.

China's central bank said it is cutting key one-year interest rates. The People's Bank of China said that it was reducing the benchmark one-year deposit rate by 27 basis points to 3.60% from 3.87%.

The Commerce Department reported that orders for durable goods rose by 0.8 percent, surprising economists who had expected a decline. Orders had fallen by 5.5 percent in August, which was the biggest setback in nearly two years.

According to the Energy Department, motor gasoline supplies fell for the first time in five weeks, down 1.5 million barrels for the week ended Oct. 24th. Crude supplies climbed 500,000 barrels. Distillate stocks rose 2.3 million barrels. Refinery utilization was at 85.3% compared with 84.8% of capacity a week earlier.

According to AAA survey, gas prices fell for the 42nd-straight day today, according to a nationwide survey of credit card swipes at gasoline stations. The average price of unleaded regular gas dropped 4 cents to $2.589 a gallon.

Fannie Mae (FNM) will write down about $20 billion of assets after being seized by the government last month, eroding its capital and increasing the likelihood the U.S. Treasury may need to inject cash into the mortgage giant.

General Motors (GM) reported sold slightly above 2.1 million vehicles globally during the third quarter, an 11.4% drop from the same period a year earlier. The Company said the drop in sales was due to "continuing economic pressures in the U.S. market, which pushed North America sales down 18.9%, and growing pressure in Europe, where sales were down 12.3%."

Hertz Global Holdings Inc. (HTZ) said it raised retail car rental rates by more than 10%, on average, at North American airports due to inflation. The car rental company also implemented a 5% rate hike at North American off-airport markets and an approximately 10% European airports and downtown rate increase.

Scheduled U.S. Economic Reports (Thursday)

Initial Jobless Claims (Week of October 24), Gross Domestic Product (Q3)

In Earnings News

Procter & Gamble Co. (PG) says profit rose nearly 9 percent in its fiscal first quarter, boosted by strong growth in emerging markets. Net income rose to more than $3.3 billion, or $1.03 per share. Analysts expected 98 cents.

Sony Corp.'s (SNE) quarterly profit plunged 72 percent as a surging yen wiped out perks from flat-panel TV and PlayStation 3 sales, and box office revenue from the movie "Hancock." Sony posted a net profit of 20.8 billion yen ($214 million) for the July-September period compared with 73.7 billion yen a year earlier.

Comcast (CMCSA) earned $771 million, or 26 cents per share, compared with $560 million, or 18 cents, a year ago. Adjusted net income excluding one-time items rose by 23 percent to $691 million, or 24 cents per share. Analysts were expecting a 22-cent-per-share.

Qwest Communications International (Q) reported earnings of $151 million, or 9 cents per share, in the quarter. That's down from $2.06 billion, or $1.08 per share, a year ago. The 2007 results were boosted by a tax benefit. Analysts expected the company to earn 10 cents per share.

Kellogg Co. (K) reported that its third-quarter profit rose 12%, exceeding Wall Street's expectations. The company reported net income of $342 million, or 89 cents a share. Analysts expected 81 cents.

Aetna (AET) earned $277.3 million, or 58 cents per share, compared with $496.7 million, or 95 cents per share, a year earlier. Revenue rose 9.5 percent to $7.62 billion from $6.96 billion. Analysts expected profit of $1.12 per share.

Kraft Foods Inc (KFT) earned 44 cents per share, beating a Wall Street consensus by a penny. Analysts expected 43 cents per share.

Cardinal Healthcare (CAH) earned 74 cents per share, compared with 86 cents per share in the year-ago period. On average, analysts expected profit of 70 cents per share on $22.84 billion in revenue.

Mirage MGM (MGM) reported third-quarter net income of $61 million, or 22 cents a share, compared to $184 million, or 62 cents, in the year-ago period. Revenue was $1.95 billion compared to $2.07 billion.

Scheduled Earnings Reports (Thursday)

Exxon Mobil, Colgate Palmolive, International Paper, Motorola, Brinks, CVS Corp, Barrick Gold, Avon Products, Waste Management, Callaway Golf, Unilever, Eastman Kodak, Sun Microsystems, Mylan Labs, Royal Dutch Shell

Stocks in the News

Johnson & Johnson (JNJ) was downgraded to neutral from overweight by J.P. Morgan.

Daimler (DAI) was upgraded to buy from neutral at Merrill Lynch.

Ace Ltd (ACE) third-quarter net income came in at $54 million, or 16 cents a share, down 92% from a year earlier when the property and casualty insurer made $656 million, or $1.95 a share.

Nexen Inc (NXY), a Calgary, Alberta, energy producer, reported third-quarter net income doubled on 40% higher revenue.

Cephalon Inc (CEPH) swung to net income of $112 million, or $1.42 a share, from a loss of $307 million, or $4.58 a share, for the year-earlier period.

Hess Corp (HES) third-quarter net income nearly doubled to $775 million or $2.37 a share.

Agco Corp (AG) reported sales grew to $2.09B compared to $1.61B, with earnings per share up 30% in the quarter.

Noble Energy (NBL) third-quarter earnings quadrupled to $974 million or $5.37 a share.