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Dow Jones News Top Stories Of The Day – January 16, 2007 January 16, 2007

Posted by notapundit in Economic News.
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INTEL 4Q NET DECLINES 39%, BEATS EXPECTATIONS

Chip giant reports 4Q earnings of $1.5 billion, or 26c a share, a penny better than Wall Street estimates, as revenue dips 5% to $9.69 billion amid competition from rival AMD. Intel sees 1Q revenue of $8.7 billion to $9.3 billion. Closely watched gross profit margin is 49.6% in 4Q, compared with 61.8% last year and 49.1% in 3Q. CFO sees competitive pricing environment in 2007. Shares fall 2.8% in late trade.

PANEL CITES BIG PROBLEMS AT BP REFINERIES
Independent panel set up to review BP’s refinery operations in U.S. finds “significant” problems at five refineries and says company’s goals, such as cost-cutting, often overrode safety concerns. BP shares fall 2%. See reactions at a glance.

OIL PRICES SLIDE ON SAUDI COMMENTS
Nymex crude futures drop 3.3% to $51.21 a barrel as Saudi Arabia’s Oil Minister Naimi says there is no need for further production cuts. He calls oil market “very healthy” and says emergency OPEC meeting is unnecessary.

CAREMARK HOLDERS TO GET DIVIDEND ON CVS DEAL
CVS and Caremark say qualified Caremark shareholders will receive one-time cash dividend of $2 a share after proposed merger between companies closes. They will also retire 150 million shares of the new company after deal closes.

TD AMERITRADE UP AS 1Q NET JUMPS 69%
Shares climb 6% as online discount brokerage posts fiscal 1Q net of $145.6 million, or 24c a share, and revenue surges 93% to $535.2 million. Result includes gain of $614,000 from sale of investments. Analysts expected EPS of 22c.

NYSE SPECIALISTS FINED $2.8M FOR VIOLATIONS
Seven “specialist” firms that handle stock trading at NYSE are hit with a combined $2.8 million in fines by Big Board’s regulatory arm for alleged multiple trading violations. Firms include units of Goldman Sachs, Bear Stearns and BofA.

WELLS FARGO, US BANCORP POST 4Q PROFIT
Wells Fargo 4Q net rises 13% to $2.18 billion, or 64c a share, in line with expectations, as revenue grows 11% to $9.4 billion. Meanwhile, U.S. Bancorp earns $1.19 billion, or 66c a share, a penny below views. Wells Fargo shares up 2%.

GMAC RESCAP TO CUT 1K JOBS
Residential Capital, a real-estate financing company owned by GM Acceptance Corp., said it will eliminate the positions by October to reduce costs as the mortgage lender grapples with “the continued deterioration” in the subprime mortgage sector.

EX-REFCO PRESIDENT GRANT CHARGED
Tone N. Grant is indicted on securities fraud and other charges in connection with alleged scheme to hide hundreds of millions of dollars in trading losses by Refco and its customers from the investing public, prosecutors say.

WCI COMMUNITIES RISES ON ICAHN MOVES
Shares rise 7% after financier Carl Icahn, who holds a 14.57% stake in the company, says he intends to help the real estate developer “unlock the inherent value” of its stock.

LILLY DRUG DELAYS PANCREATIC CANCER RECURRENCE
Use of Eli Lilly chemotherapy drug after surgery for pancreatic cancer delays recurrence, researchers report. Study could support wider use of Gemzar. Currently only 5% of newly-diagnosed patients live more than five years.

FRETTE NAMES RAFFIN ITS NORTH AMERICAN CEO
Italian luxury linen firm names Limited Brands veteran Paul Raffin to head U.S. operations. Raffin will lead U.S. rollout of retail stores, expanding its wholesale and e-commerce businesses, as well as its role in supplying linens to upscale hotels and resorts.

COMMERCE BANK DISCLOSES FEDERAL PROBE
Shares fall 9% as bank says federal regulators have opened investigation into company’s transactions with insiders. News comes as 4Q net income surges 68% to $78.7 million, or 40c a share, while revenue jumps 24% to $492.3 million.

EX-CA EXECUTIVE GETS TWO YEARS PRISON SENTENCE
Steven Woghin, CA’s former general counsel, receives prison sentence in connection with a scheme to artificially boost the software maker’s quarterly revenue through backdated sales contracts.

FORD MULLS PLUG-IN HYBRID VEHICLE
Nancy Gioia, Ford’s hybrid director, says auto maker is considering adding plug-in hybrid vehicles to its future product portfolio in an effort to diversify fueling options for car buyers. Cost of lithium-iron batteries remains a hurdle.

INDYMAC FALLS ON 4Q WARNING
Shares shed 7% after mortgage lender says it expects 4Q net income of 97c a share, significantly lower than its earlier forecast of $1.30-$1.40, citing challenges faced by the mortgage and housing industries.

NY FED MANUFACTURING INDEX FALLS
Manufacturing activity in the New York Federal Reserve district falls sharply in January with the overall index slipping to a reading of 9.13 from a revised 22.19 in December. Economists had expected a reading of 20.

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

LATE TRADING
Intel Down On Gross-Margin Concerns
Intel shares slip 2.8% in late trade after chip maker posts drop in 4Q gross margin. Rackable Systems falls 18% after server-and-storage company warns of a shortfall in fiscal 4Q earnings and gross margin.

GETTING PERSONAL
Weak Dollar Offers Opportunities Abroad
The weak dollar, sluggish U.S. economy and opportunities abroad have convinced financial experts that the benefits of investing abroad far outweigh the risks, writes Jilian Mincer.

============ U.S. MARKETS ACTION ===========
DJIA up 26.51 points to 12582.59
NASDAQ down 5.04 points to 2497.78
S&P 500 up 1.17 points to 1431.90
10-year T-note up 74/32 at 99 00/32 yield 4.751
NYMEX Spot Crude down $1.71 at $51.96/bbl at close
Dollar/Euro down 0.0002 at 1.2932

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