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Dow Jones News Top Stories Of The Day – January 26, 2007 January 26, 2007

Posted by notapundit in Economic News.
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US HOUSING, MANUFACTURING SHOW STRENGTH AT YEAR END

Two sore spots in the U.S. economy show some strength at the end of 2006, with demand rising for expensive manufactured goods and new homes. New-home sales rise 4.8% in December to 1.120 million, but demand for whole year takes its biggest tumble since 1990, sliding 17% to 1.061 million. Separately, orders for durables advance by 3.1% last month to $221.87 billion.

COUNTRYWIDE UP ON BOFA MERGER TALK

Countrywide Financial shares jump 6% after the Financial Times reports Bank of America and Countrywide have held discussions about an alliance that could cost the second-largest U.S. bank $30 billion. Talks could also lead to joint venture.

CATERPILLAR 4Q NET UP 4%; HOUSING HURTS

Caterpillar earns $882 million, or $1.32 a share, helped by its machinery and engines business. Total sales and revenue rise 14% to $11 billion. Analysts expected earnings of $1.34 a share on revenue of $10.5 billion. Shares rise 2%.

HONEYWELL 4Q NET UP ON AEROSPACE STRENGTH

Firm reports earnings of $585 million, or 72c a share, as net sales rise 14% to $8.28 billion. Analysts expected earnings of 72c a share. Aerospace division posts 17% climb, but some investors may have been hoping for more. Shares fall 1%.

NOVELIS SOARS ON POSSIBLE SALE TALKS

Novelis shares rise 24% as company says it is in talks with ‘various parties’ that could lead to a potential sale. According to media report, Aditya Vikram Birla group is exploring a deal valued at $5 billion to $6 billion.

MICROSOFT RISES, ENCOURAGED BY VISTA DEMAND

Shares rise 2% a day after world’s largest software firm reports 2Q net income fell 28% but revenue rises 6%. It also sees ‘encouraging early demand’ for Vista. But rivals complain new system shows same practices found illegal three years ago.

DELL TO START SELLING PCS WITH VISTA TONIGHT

Dell plans to start selling personal computers loaded with Microsoft’s new operating system on its Web site and over the phone tonight, with the earliest receiving their computers Tuesday, the day Vista for consumers officially launches.

HALLIBURTON NET DOWN 40% ON TAX PROVISION

Earnings slide to $658 million, or 64c a share, hurt by provision for income taxes. Operating income climbs 36% to $1.04 billion as revenue rises 8% to $6 billion. KBR unit, which is to be spun off, sees income drop 23%. Shares fall 1%.

BUSH ATTACKS CONGRESS OPPOSITION TO IRAQ PLAN

President warns not to prematurely condemn his buildup plans, saying he is the ‘decision maker.’ He also plans to make his economic address next week in New York. Meanwhile, Senate votes to confirm Army Lt. Gen. David Petraeus as head of U.S. troops in Iraq.

IRAQI CHIEF SEES US TROOPS OUT BY ’08

Iraqi army will have enough equipment and strength to allow most U.S. troops to withdraw by 2008, says Iraq’s army chief Gen. Babaker Shawkat Zebari. Zebari says Iraqi army would soon be able to provide security for its own nation.

MARSH TO MAKE PUTNAM DECISION NEXT WEEK

Insurance broker continues to evaluate options for its Putnam Investments mutual fund business and still expects to reach a decision by the middle of next week. Power Financial is said to be near a deal to buy Putnam for $3.9 billion.

EX-CA CFO GETS 7 MONTHS IN PRISON

CA’s former CFO Ira Zar is sentenced to seven months in prison and seven months home detention after pleading guilty to criminal charges and cooperating with prosecutors in investigating massive accounting fraud.

FTC’S KOVACIC DOESN’T EXPECT REPORT TO SHOW PRICE GOUGING

Federal Trade Commission’s Kovacic says he would be ‘surprised’ if the agency will find any evidence of price-gouging in gasoline prices in a study it is set to release next month. He also says increased scrutiny of private equity is inevitable.

SEC TO REVIEW KB HOME OPTIONS PRACTICES

Regulators begin a formal investigation into company’s stock option grants. Last August, The Wall Street Journal reported that several past stock option grants to its former CEO were dated at unusually low points in company’s stock price. Shares fall 2%.

H-P INVESTIGATOR NOT EXPECTED TO FACE STATE CHARGES

State criminal charges filed against Brian Wagner, a private investigator who pleaded guilty to identity theft and conspiracy charges in the Hewlett-Packard pretexting scandal, are expected to be dropped on Monday.

GM SEES 4Q PROFIT, DELAYS RESULTS

General Motors says it generated record revenue in 4Q and expects to report a profit for the period, the latest example that the company’s turnaround may be gaining traction. But GM delays release of the results due to accounting errors. Shares slip 1%.

CNBC DEFENDS BARTIROMO IN CITIGROUP CONTROVERSY

Business channel defends star anchor amid questions about her relationship with now ousted Citigroup executive Todd Thomson, who decided his firm would spend $5 million on a Sundance program in which she would appear.

NASDAQ WON’T RAISE $5.3B LSE OFFER

Nasdaq says it won’t raise its offer, even if it gets LSE board approval by tomorrow’s deadline. Under U.K. law, Nasdaq will no longer be able to increase its offer after the deadline if a rival bidder appears.

FORTUNE BRANDS 4Q NET JUMPS, SEES 1Q DOWN

Consumer-brands company posts net income of $251.8 million, or $1.62 a share. Excluding items, it earns $1.39 a share, beating estimates. Net sales rise 16% to $2.28 billion. Firm predicts 20% drop in 1Q earnings. Shares fall 3%.

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

EARNINGS PREVIEW
Verizon Seen Posting Strong Wireless Growth
Phone giant is expected to show strong growth in its wireless business when it posts quarterly results Monday. Although Verizon Wireless caters to fewer customers than AT&T, it generates more mobile revenue than Cingular.

NOTICE TO READERS
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Tomorrow’s News Today is a Dow Jones Newswires end-of-day market newsletter emailed shortly after market close. It is complimentary to all Dow Jones News Service subscribers. To sign up, send email to tomorrowtoday@dowjones.com or call (800) 223-2274.

============ U.S. MARKETS ACTION ===========
DJIA down 9.77 points to 12493.11
NASDAQ up 5.05 points to 2439.18
S&P 500 down 16.23 points to 1423.90
10-year T-note down 1/32 at 98 0/32 yield 4.867
NYMEX Spot Crude up $1.19 at $55.42/bbl at close
Dollar/Euro down 0.0028 at 1.2913

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