Not-A-Pundit: The Renaissance

GOLDEN WEST PRESENTS CHALLENGES FOR WACHOVIA

Wachovia’s $25.5 billion agreement to buy Golden West Financial completes its transformation into diversified national financial institution, but deal also presents a host of challenges. Wachovia is paying a generous 15% premium for Golden West, a thrift whose shares already commanded a relatively high price-to-earnings multiple. Wachovia shares slide 7%; Golden West gains 6%. See full coverage of deal.

ENRON JUDGE DENIES ACQUITTAL MOTIONS
U.S. District Court judge hearing the criminal conspiracy and fraud trial of two former top Enron executives denies defense motions for acquittal of former Chairman Kenneth Lay and former President Jeffrey Skilling as both sides rest.

THERMO ELECTRON, FISHER SCIENTIFIC IN $10.6B DEAL
Thermo would acquire Fisher, creating a giant in the field of laboratory equipment. Combined firms have longer-term goal of delivering 18%-20% in adjusted EPS growth, says Thermo CEO Dekkers. Thermo falls 1% and Fisher adds 4%.

BUSH TAPS HAYDEN AS CIA CHIEF
Shrugging off complaints from lawmakers and signaling he isn’t afraid of an election-year fight over domestic surveillance, President confirms Air Force Gen. Michael Hayden is his choice to run the Central Intelligence Agency.

TREASURY TO ISSUE CURRENCY REPORT
U.S. Treasury Department plans to release semi-annual report on currency policies of major trading partners at 4 p.m. Wednesday, a Treasury spokesman says. Report will be watched closely for assessments of foreign exchange policy in China.

UAL DOWN; 1Q LOSS MISSES ESTIMATES
Carrier posts 1Q net of $22.63 billion on $22.93 billion in gains following its February emergence from bankruptcy. UAL reports loss excluding items of $306 million misses analysts’ estimate of $199 million and sends shares down 8%.

INTEL SHARES UP ON ANALYST COMMENTS
Chip giant could be gearing up to sell or take its flash-memory business public, says American Technology analyst Doug Freedman, who raises his investment rating on Intel to buy from hold. Intel shares rise nearly 3%.

REFCO SUIT WIDENED TO INCLUDE AUSTRIAN BANK
Shareholders of Refco add Austria’s fourth-largest bank as a defendant in a class-action lawsuit that seeks to hold many of Refco’s lenders and financial advisers accountable for “one of the most precipitous corporate meltdowns in U.S. history.”

AT&T SET TO TAKE ON CABLE COMPANIES
CEO Edward Whitacre says AT&T is pushing ahead with plan to attempt to squeeze cable companies with a new broadband-TV service. He says the move could force cable firms to cut prices in a way that reflects the decline in telephone prices.

DISNEY ENDING MCDONALD’S PACT
Walt Disney won’t renew its cross-promotional agreement with McDonald’s. Los Angeles Times reports Disney seeks to distance itself from fast food and its links to childhood obesity. McDonald’s says decision was mutual.

HEARINGS ON DELPHI CONTRACTS TO START
Hearings on auto supplier’s motion to reject its labor contracts get under way tomorrow with a United Auto Workers strike authorization vote looming in the background.

NYSE STOCK UP AS POST-SECONDARY RECOVERY CONTINUES
NYSE parent shares jump 7% as stock continues to recover from recent slide after company completed a stock sale last week. Shares have gained about 17% since secondary share offering was priced Thursday.

SEC EXEC GIVES IDEAS ON SARBOX
Commissioner Glassman says the agency should encourage executives and auditors to focus on risks when assessing internal controls over financial reporting. GAO warns about plan to exempt small public companies from parts of Sarbanes-Oxley.

ASIA CURRENCIES RISE AHEAD OF FED MEETING
Expectations that Federal Reserve may take a break from raising interest rates after anticipated rise tomorrow, combined with U.S. government criticism of countries that manipulate exchange rates, drive some Asian currencies to recent highs.

CITIGROUP MAY MOVE 1,500 NYC JOBS TO JERSEY CITY
Crain’s reports the New York financial-services firm is selling the 363,000-square-foot building it owns at 250 West St. in Manhattan and may move its Smith Barney investment banking division to Jersey City.

TECK COMINCO OFFERS TO BUY INCO
Teck Cominco launches $15.4 billion offer for Inco, provided Inco drops bid for third mining company, Falconbridge. Teck Cominco says deal would make combined firm world’s leading zinc miner and second-largest nickel producer. Inco shares rise 12%.

BP REFINERY WORST-POLLUTING PLANT
Texas City refinery is found by the EPA to be the worst-polluting plant in the U.S. Plant releases triple the amount of pollution in 2004 it did a year earlier. Questions raised as to whether the oil giant has been underreporting toxic emissions.

SPITZER SAYS H&R BLOCK PUSHED FLAWED PRODUCTS
New York attorney general says he has evidence that executives at tax preparer not only knew they were pushing customers to buy money-losing retirement account plans, but penalized employees who refused to recommend them.

EMMIS UP AS CEO OFFERS TO BUY FIRM
CEO Jeff Smulyan offers $15.25 a share in cash to take radio station operator private, but shares surge well ahead of the bid as investors bet on higher price. Bid is a 14% premium to Friday’s closing price. Shares recently trade up 21%.

MORGAN STANLEY OFFERS BONUS TO LURE BROKERS
Morgan Stanley is offering high-producing financial advisers a bonus of up to 200% of their gross revenue over the past 12 months if they jump ship from competitors to join the firm.

IRAN PRESIDENT SENDS LETTER TO BUSH
Iran’s top nuclear negotiator says Iranian president’s correspondence to President Bush “could lead to a new diplomatic opening” but also warns the letter doesn’t reflect a softening in Iran’s position. U.S. reacts coolly.

======= DOW JONES NEWSWIRES ANALYSIS AND COMMENTARIES =======

GETTING PERSONAL
Funds Enter Foreign Real Estate Market
As the U.S. real estate market cools, more mutual fund companies are jumping into the hot international property sector, drawn by some fast-growing economies and an enduring shift to U.S.-style real estate investment trusts.

COMPLIANCE WATCH
Heightened Supervision Varies
You can’t please all the people all the time, but in the financial advisory world, not pleasing the clients a lot of the time can trigger “heightened supervision,” Jaime Levy Pessin writes.

============ U.S. MARKETS ACTION ===========
DJIA up 3.84 points to 11581.74
NASDAQ up 2.57 points to 2345.93
S&P 500 down 0.95 points to 1324.81
10-year T-note down 3/32 at 95 09/32 yield 5.119
NYMEX Spot Crude down $0.4X at $69.77/bbl at close
Dollar/Euro down 0.0024 at 1.2700