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Dow Jones News Top Stories Of The Day – February 5, 2007 February 5, 2007

Posted by notapundit in Economic News.
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TRIAD HOSPITALS AGREES TO BE TAKEN PRIVATE FOR $4.7B

Triad Hospitals agrees to be acquired by affiliates of CCMP Capital Advisors and GS Capital Partners at a price of $50.25 a share in cash, a premium of 16% over Friday’s closing price. Deal carries total value of $6.4 billion, including $1.7 billion in debt. Triad shares jump nearly 15%.

US SERVICES GROWTH STRONG IN JANUARY

Institute for Supply Management’s non-manufacturing index increases to 59.0 in January from a revised 56.7 in December. Wall Street had expected a reading of 57.0. ISM says report suggests ‘continued economic growth.’

STATE STREET TO BUY INVESTORS FINANCIAL

State Street agrees to acquire Investors Financial Services for nearly $4.5 billion in stock in deal that combines two firms providing a variety of services to institutional investors. Deal values the company at a 38% premium. State Street falls 6%.

LEAR GETS $36 A SHARE OFFER FROM ICAHN GROUP

Investor Carl Icahn is offering to acquire auto parts maker Lear for $36 a share, or about $2.75 billion, through his affiliate group, American Real Estate Partners. Lear shares jump 12%, topping offer price.

JEFF ZUCKER TO TAKE OVER AS CHIEF OF NBC

GE decides to name Jeff Zucker to succeed Robert Wright, reflecting management’s view that a younger executive is needed to deal with the challenges posed by the Internet. Wright has run NBC since it was acquired by GE in the mid-1980s.

MORGAN STANLEY HIKES BONUSES FOR MANAGERS

Morgan Stanley is adding 10% to bonuses this year for managers who are able to maintain branches’ growth in commissions and fees. Firm will also allow managers to use up to 25% of pretax income to buy company stock.

STUDENT LENDERS FALL ON BUSH PROPOSAL

Bush proposes 50-basis-point cut in student lender rate subsidies and increasing lender risk as part of plan to save $95 billion in entitlement spending by 2012. Shares of Sallie Mae slide 10%; Student Loan Corp. falls 6% and Nelnet drops 9%.

DOE MULLS CREATING ETHANOL RESERVE

As U.S. Energy Dept. looks to expand the nation’s emergency stockpile, officials are also considering whether it would be beneficial to create an ethanol reserve.

GOLDMAN’S RYAN TO RUN SECURITIES AT CREDIT SUISSE

Credit Suisse adds a management layer in its ongoing reorganization of investment banking, hiring Goldman Sachs sales veteran Michael D. Ryan to a new position overseeing fixed income and equities securities.

STUDY SHOWS LOWER DEATH RATE WITH COATED STENTS

Stent heart devices study shows patients who received drug-coated stents experienced a lower rate of death and heart attacks after nine months than patients who received bare-metal stents.

DAIMLER PLANS CLOSER MERCEDES-CHRYSLER COOPERATION

DaimlerChrysler CEO Dieter Zetsche is betting he can turn around the auto maker’s ailing Chrysler arm by tying it even more closely to the company’s Mercedes luxury brand.

NIELSEN TO PAY $327M FOR REST OF NETRATINGS

Television-ratings company formerly known as VNU NV, agrees to pay about $327 million for the 40% of NetRatings it doesn’t own already. Deal is expected to close in 2Q.

NBC RENEWS ENTERTAINMENT CHIEF REILLY’S CONTRACT

NBC renews contract of Entertainment President Kevin Reilly, signaling the company has faith in his ability to continue a nascent turnaround at the network, according to people familiar with the matter.

EXECUTIVES TO LEAVE DISCOVERY COMMUNICATIONS

Four top executives at Discovery Communications are to leave the cable network giant, a result of a shakeup engineered by Discovery’s newly installed chief executive, David Zaslav.

EQUITY OFFICE TO EVALUATE VORNADO’S PROPOSAL

Under the revised terms of Vornado’s offer, Vornado would launch an upfront tender offer to buy up to 55% of Equity Office’s shares for $56 each in cash, and then complete a follow-on merger.

WENDY’S SAYS FINANCIAL PERFORMANCE MUST IMPROVE

No. 3 burger chain says it will emphasize its hamburgers this year as part of a multi-pronged strategy to improve sales as it slowly rolls out a breakfast menu.

MORTGAGE LENDERS FILES FOR CHAPTER 11

Mortgage Lenders, which caters to borrowers with weak credit, files for bankruptcy-court protection, the latest in a string of subprime home-loan providers to be hit by slowing home sales and rising delinquencies.

MILLS SALE HEATS UP WITH SIMON BID; MORE BIDS LIKELY

Simon Property and hedge fund Farallon Capital offer $1.56 billion for Mills Corp., a move designed to derail a $1.35 billion agreement with Brookfield Asset Management. Mills jumps 15%, tops new $24 a share bid.

CME CONFIRMS MEETING WITH TOKYO EXCHANGE

Officials from the Tokyo Stock Exchange visited the Chicago Mercantile Exchange last week, a CME spokesman says, following reports that the two exchanges are discussing a possible alliance.

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

GETTING PERSONAL
Connecticut Hedge Fund Bill Proposed
Various proposals to oversee hedge funds are percolating in Connecticut, a state with a heavy concentration of the investment vehicles. One bill would require hedge funds to report investments of more than $10 million from pension funds.

NOTICE TO READERS
Get Tomorrow’s News Today
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 up 8.33 points to 12661.58
NASDAQ down 3.25 points to 2472.67
S&P 500 up 2.45 points to 1438.39
10-year T-note up 4/32 at 98 18/32 yield 4.827
NYMEX Spot Crude down $0.28 at $58.74/bbl at close
Dollar/Euro down 0.0033 at 1.2927

Financial Services Top Stories Of The Day – February 5, 2007 February 5, 2007

Posted by notapundit in Economic News.
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STATE STREET TO BUY INVESTORS FINANCIAL

State Street agrees to acquire Investors Financial Services for nearly $4.5 billion in stock in deal that combines two firms providing a variety of services to institutional investors. Deal values the company at a 38% premium. State Street falls 6%.

MORGAN STANLEY HIKES BONUSES FOR MANAGERS

Morgan Stanley is adding 10% to bonuses this year for managers who are able to maintain branches’ growth in commissions and fees. Firm will also allow managers to use up to 25% of pretax income to buy company stock.

CME CONFIRMS MEETING WITH TOKYO EXCHANGE

Officials from the Tokyo Stock Exchange visited the Chicago Mercantile Exchange last week, a CME spokesman says, following reports that the two exchanges are discussing a possible alliance.

CME WINS CFTC OK TO LAUNCH CREDIT DERIVATIVES

Commodity Futures Trading Commission grants permission for CME to list contracts for investors to speculate or hedge their risk on the chance of a bankruptcy for three companies near or below the line that divides investment grade and junk.

NASD FINES 4 FIDELITY BROKER-DEALERS $3.75M

Two months after Jefferies was criticized by regulators for doling out gifts to win mutual-fund trading business, Fidelity Investments has been hit with a $3.75 million fine for accepting them.

NYSE GROUP SWINGS TO 4Q PROFIT

Big Board operator earns $45.5 million, or 29c a share, compared with a year-ago loss of $20.3 million. Results boosted by Archipelago acquisition. Excluding items, it earns 45c a share, a penny shy of expectations.

GOLDMAN’S RYAN TO RUN SECURITIES AT CREDIT SUISSE

Credit Suisse adds a management layer in its ongoing reorganization of investment banking, hiring Goldman Sachs sales veteran Michael D. Ryan to a new position overseeing fixed income and equities securities.

MORTGAGE LENDERS FILES FOR CHAPTER 11

Mortgage Lenders, which caters to borrowers with weak credit, files for bankruptcy-court protection, the latest in a string of subprime home-loan providers to be hit by slowing home sales and rising delinquencies.

CREDIT SUISSE HIRES UK PRIME BROKERAGE PRO

Roy Martins, formerly with Morgan Stanley, will head Credit Suisse’s Delta One derivatives unit in its prime brokerage business in London, reporting jointly to regional prime services head, Simon Yates, and global head, Philip Vasan.

FDIC REPORTS FIRST FAILED BANK SINCE JUNE ’04

Metropolitan Savings Bank, a small $15.8-million-asset Pittsburgh, Pa., financial institution, has failed, Federal Deposit Insurance Corp. says. It is first bank failure since June 2004, the longest stretch without a bank failure since creation of FDIC.

MORGAN STANLEY TAPS SMITH BARNEY, UBS BROKERS

Morgan Stanley has tapped David Green from Smith Barney to oversee its Lansing, Mich., office and has hired a high-revenue broker from UBS in San Francisco.

LEHMAN HIRES UBS’ HITE FOR HEALTH-CARE BANKING

Christopher Hite joins Lehman Brothers to run East Coast health-care investment banking, focused on the life-sciences sector. Hite was recently a managing director at UBS. He will report to Casey Safreno, global head of health-care banking.

H-P TO WITHDRAW NASDAQ LISTING

Hewlett-Packard, one of a batch of New York Stock Exchange-listed companies that three years ago was persuaded to try a ‘dual listing’ on Nasdaq Stock Market, has decided to abandon the program and leave Nasdaq.

SULZBERGERS MOVES ASSETS FROM MORGAN STANLEY

Ochs-Sulzberger family, which controls the New York Times, is moving most of its personal assets from Morgan Stanley after a prolonged campaign by a Morgan Stanley money manager for changes to publishers’ corporate governance.

FORTRESS INVESTMENT TO PRICE THURSDAY

Fortress Investment is set to make its market debut on NYSE next week in what will be first U.S.-listed IPO of an alternative investment manager. Pricing is expected Thursday. Firm intends to sell 34.3 million shares at $16.50-$18.50 a share.

FTC SEEKS PROTECTION OF CONSUMERS WITH HIGH DEBT

Federal Trade Commission says two firms that acted illegally to either collect debts or offer bogus methods to lower debt, based in Florida and Canada, have been shut down. It says it will continue to target such preying activities against high-debt consumers.

Analysts: Upward Stock-Futures Momentum Likely To Continue February 3, 2007

Posted by notapundit in Economic News.
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With the Federal Reserve seemingly leaving interest rates on hold at levels tolerable to the market and crude oil still well below last summer’s peak, many analysts and traders look for the recent upward momentum to continue in stock-index futures.

Some point out, however, that the market remains sensitive to U.S. economic data, with the potential for a pullback on any worrisome signs.

Most appear to look for the June S&P 500 futures to climb above 1,500 in the next several weeks or months.

The June S&P contract settled at 1,466.40 on Friday, at the end of a busy U.S. economic week that included a Federal Reserve meeting, gross domestic product data, two manufacturing diffusion indexes and the monthly employment report. Based on a monthly spot continuation chart, the S&P futures hit their loftiest levels since late 2000.

In the absence of any bearish economic developments or a big jump in crude oil, “a trend in motion stays in motion,” said George DeMarcilla, vice president and analyst with Alaron Trading.

DeMarcilla said the market appears satisfied that the Federal Open Market Committee has left U.S. interest rates on hold since last summer.

“It looks as if the Fed will probably err on the side of no further rate hikes at the moment,” DeMarcilla said. “That being the case, there is no impediment for the market to (stall and) go lower.

DeMarcilla said energy prices are lower compared to six months ago. “You have interest rates that appear to be stabilizing, with the possibility that the next move from the Fed may actually be a rate cut rather than a rate hike,” he said.

A similar view was expressed by Frank Lesh, futures analyst with Future Path Trading.

“Right now, for the first half – if things stay the way they are – I’m expecting steady to higher prices,” said Lesh.

The Fed may well be on hold for the first half of the year, and maybe even for all of 2007, according to Lesh.

“Right where we’re at now, they’re okay with it,” he said. “As long as the Fed isn’t raising rates, equities are fine. They’d maybe like to see them (rates) lowered. But here we are with a steady Fed and the S&Ps at new (several-year) highs.”

A several-month pullback in crude oil has been constructive for stocks, said DeMacilla. A daily spot continuation chart shows that oil fell from roughly $80 a barrel last summer to around $50 in early January. It has been ticking higher since, but remains about 25% below the peak from last summer.

“The lower energy prices are almost the equivalent of a rate cut,” said DeMarcilla.

There are always unknowns, such as interest rates, the economy and whether any major terrorism incidents will occur, said Lesh.

“The economy – it’s a tough call,” he said. “We’ve still got a lot of people who think that the housing market is going to be a problem. The data is not necessarily confirming that right now. And there is another side where people think maybe we saw the slowdown already.”

Some of the recent economic data reflected favorably on the economy, while others were more worrisome. The government’s first estimate of fourth-quarter GDP growth was an annualized rise of 3.5%, a half point more than the market was expecting. January non-farm payrolls rose 111,000, short of the 155,000 forecast. Yet, some pundits were still calling the report strong, since the December and November job gains were revised upward by a collective 81,000.

Meanwhile, a couple of closely watched diffusion indexes were below the key 50-point level that is generally seen as the breaking point on whether the manufacturing economy is expanding or contracting. The Chicago Purchasing Managers Index fell to 48.8 in January from 51.6 in December, and the Institute for Supply Management’s index retreated to 49.3 in January from 51.4 in December. The pre-report forecast for both reports was 52.

Larry Young, senior trader with Infinity Brokerage Services, looks for more gains in stock-index futures in the first quarter, with the S&P futures perhaps topping 1,500, the Nasdaq futures 1,900 and the Dow futures above 13,500. However, he then anticipates a pullback starting in the second quarter.

The market lately has been underpinned by mostly decent corporate earnings, allowing momentum-based activity, he said.

“But I think there are some other variables that are going to come into play during the second part of the year,” said Young. In particular, Young fears a slowdown of U.S. consumer spending, hurt by the housing market and potentially more defaults on home and car loans.

The extent of any pullback will hinge on just how much consumer weakness occurs, he said. Another wild card could be commodity prices, he said. Any spike in oil or grains could affect consumers’ bottom line and thus hurt stocks.

“This whole year is going to be based on sentiment and perception,” he said.

Technically, said DeMarcilla, some major resistance for the June S&P lies around 1,474. Should the market break through here, he said, gains may well accelerate.

“All indications suggest the market could run up until the middle of the year,” he said. “There could be some pullbacks, but overall the technical picture remains firm and is pointing higher.”

In fact, DeMarcilla thinks it is possible for the S&P futures to make a double-top around 1,574. A monthly continuation chart shows they peaked at that level in March 2000.

“On a shorter-term basis, we’re a little bit overextended right now,” said DeMarcilla. “So I wouldn’t be surprised if we pull back in here. But unless a pullback is accompanied by major volume and some very negative news – which I don’t see coming – it may not do that much damage.”

Should the futures turn lower, however, he put support levels at 1,380, 1,331 and 1,315.

Lesh, meanwhile, listed potential upside targets of 1,503 to 1,505, then 1,574 to 1,583, all based on a weekly chart. He put potential support levels at 1,367, 1,337, 1,290 and 1,151.

By Allen Sykora, Dow Jones Newswires

US Stocks End Mixed, With Amazon.com Soft, But CA Shining February 2, 2007

Posted by notapundit in Economic News.
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NEW YORK (Dow Jones)–Stocks ended mixed, with Amazon.com and Wendy’s International dropping as profits plunged, Standard Pacific helping to spur a roof-raising rally for home builders and CA continuing its comeback.

The Dow Jones Industrial Average fell 20.19, or 0.16%, to 12653.49, ending a four-day upward run. The Dow did rise for the week, though, by 1.3%, its best weekly advance in 11 weeks.

The Nasdaq Composite rose 7.50, or 0.3%, to 2475.88, having gained every day of the week. The gains added up to a 1.7% advance for the week.

The Standard & Poor’s 500 Index added 2.45, or 0.17%, to 1448.39. For the week, the S&P 500 rose 1.8%, its best weekly performance in roughly six months.

The New York Stock Exchange Composite Index shed 2.45, or 0.03%, to 9325.24.

“There was some mixed emotion over the nonfarm payrolls report,” said Jim Paulsen, chief investment strategist at Wells Capital Management. “The January numbers were weaker than expected, reminding investors that perhaps economic momentum is weakening. But with all the upward revisions from the past couple of months, the report made the economy still look very healthy, without much inflation. As a result you had sort of a mixed market as investors took away different interpretations.”

Amazon.com dropped $1.31, or 3.4%, to $37.39 on the Nasdaq. The Internet retailer, which has invested heavily in new initiatives to foster expansion, eased its spending growth in the fourth quarter as revenue rose 34%, due largely to strength in its core business. But net income fell 51% over the quarter, hurt by higher taxes.

Wendy’s International lost 73 cents, or 2.2%, to 33.11. The significantly downsized fast-food chain said its fourth-quarter earnings fell 90%, and revenue dropped to $596.4 million from $602.9 million, ending an eventful year for the company.

Standard Pacific gained 1.95, or 7%, to 29.72. The home builder said cancellation rates declined in the fourth quarter compared with the third, while orders in California and certain other areas rose. The news helped rally other home builders, with Hovnanian Enterprises gaining 1.81, or 5.2%, to 36.98; KB Home rising 1.09, or 2%, to 55.64; and Pulte Homes advancing 1.18, or 3.5%, to 35.10.

CA rose 1.69, or 6.8%, to 26.69. The former Computer Associates International, getting back on track after a $2.2 billion accounting scandal, saw fiscal third-quarter net income fall 12% because of expenses related to job cuts and office closings. But the business-software maker’s revenue rose on strong sales of its enterprise information-technology products.

Volume on the New York Stock Exchange was 1.43 billion shares. Up volume beat down by 783 million to 624 million, and stocks that rose in value exceeded those that fell, 1,928 to 1,366.

By Karen Talley, Dow Jones Newswires

Dow Jones News Top Stories Of The Day – February 2, 2007 February 2, 2007

Posted by notapundit in Economic News, Main.
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SOLID JANUARY US JOBS GAIN BUT JOBLESS RATE TICKS UP

U.S. payrolls increase by a healthy 111,000 in January after closing 2006 on a very strong note, while the jobless rate ticks up to 4.6% and wage growth slows, suggesting the favorable mix of solid economic growth and low inflation continues into 2007. Data suggest that Fed policymakers can extend the current pause well into 2007.

WENDY’S 4Q NET INCOME PLUNGES

Fast-food chain’s net falls 90% to $3.03 million, or 3c a share, reflecting a loss from discontinued operations. Income from continuing operations drops 62% to $9.9 million, or 9c a share. Revenue falls 1.1% to $596.4 million. Shares fall 2%.

US FACTORY ORDERS RISE MORE THAN EXPECTED

Factory-goods orders increase 2.4% in December, with November’s reading revised upward to 1.2% higher, from 0.9%. Wall Street had been looking for a 2.0% increase. For all of 2006, factory orders rose 5.3%.

CHEVRON NET SLIPS 9% ON LOWER GAS PRICE

Oil and gas producer earns $3.77 billion, or $1.74 a share, as a sharp decline in natural gas prices offsets improved operating performance from its oil and gas fields and refineries. Revenue and other income falls 11% to $47.75 billion.

BRITISH HEDGE FUND CUTTING STAFF, FEES

SemperMacro, a hedge fund set up by a former star Goldman Sachs trader and the former chairman of the BBC, is cutting staff and fees after investors took cash out following a near 16% loss last year, people familiar with the matter say.

BUSH SEEKS $100B MORE FOR IRAQ, AFGHANISTAN

Bush administration will ask for another $100 billion for military and diplomatic operations in Iraq and Afghanistan this year and seeks $145 billion for 2008, a senior administration official says.

TEXAS ORDERS HPV VACCINES FOR GIRLS

Gov. Rick Perry orders that schoolgirls in Texas must be vaccinated against the sexually transmitted virus that causes cervical cancer, making Texas the first state to require the shots.

YOUTUBE TO REMOVE VIACOM VIDEOS

Google’s free video-sharing Web site says it will comply with Viacom’s request to remove more than 100,000 videos from its site. The clips in question have accounted for about 1.2 billion video streams. Viacom shares rise 1%.

DELTA, AMERICAN, ALASKA AIR RAISE FARES $5

Delta Air Lines raises domestic air fares by $5 each way, a move that is followed by American Airlines and Alaska Air Group. Other airlines considering whether to join the fare hike.

SULZBERGERS MOVES ASSETS FROM MORGAN STANLEY

Ochs-Sulzberger family, which controls the New York Times, is moving most of its personal assets from Morgan Stanley after a prolonged campaign by a Morgan Stanley money manager for changes to publishers’ corporate governance.

MICHIGAN SENTIMENT INDEX AT 96.9

Reuters/University of Michigan’s full-month report on consumer sentiment rises to 96.9 in January from December’s 91.7. Preliminary January reading was 98.0, and economists expected it to hold at 98.0.

NYSE GROUP SWINGS TO 4Q PROFIT

Big Board operator earns $45.5 million, or 29c a share, compared with a year-ago loss of $20.3 million. Results boosted by Archipelago acquisition. Excluding items, it earns 45c a share, a penny shy of expectations. Shares fall 1%.

AMAZON NET SLIDES ON HIGHER TAX BITE

Amazon.com profit is cut in half to $98 million, or 23c a share, despite a 34% rise in sales to $3.99 billion, as the company’s margins are crimped once again by rising costs. The year earlier quarter included a one-time tax windfall. Shares fall 3%.

US BEGINS WTO COMPLAINT AGAINST CHINESE SUBSIDIES

U.S. starts the process of filing a complaint against China at the World Trade Organizaion, alleging the emerging economic power is subsidizing a range of exports such as steel and wood products while discriminating against U.S. imports.

NISSAN CUTS FULL YEAR OUTLOOK

Shares plunge 8% after Japanese car maker posts a 23% drop in fiscal 3Q profit, hit by weak vehicle sales in Japan and Europe, and cuts full year earnings outlook. CEO Ghosn calls 2006 performance ‘a failure.’

EQUITY OFFICE HOLDERS MAY VOTE DOWN BLACKSTONE

A number of major shareholders in Equity Office Properties say they may vote against a plan to sell the company to Blackstone Group for $54 a share in cash in light of a higher cash and stock bid from Vornado Realty Trust.

EX COCA-COLA SECRETARY FOUND GUILTY

Federal jury convicts a former Coca-Cola secretary of conspiring to steal trade secrets from the beverage maker in effort to sell them to Pepsi. Joya Williams, facing up to 10 years in prison, was fired after allegations came to light.

GANNETT 4Q NET UP 3% ON AD SALES

Media company earns $353.5 million, or $1.51 a share, beating views by 2c. Revenue climbs 7.5% to $2.21 billion. Newspaper-ad revenue gains 3.7%, with broadcasting up 30%, helped by stronger local and political ads. Shares rise 2%.

STANDARD PACIFIC OUTLOOK LIFTS HOME BUILDERS

Shares of home-building companies rise after one builder, Standard Pacific, issues a modestly optimistic outlook for housing market, amid slightly higher market sentiment. Standard Pacific rises 6%.

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

ANALYSIS
Wireless Firms’ Web-Access Control Irks Users
Wireless carriers talk about the growth opportunities from surfing the mobile Web and downloading content such as music or games, but they haven’t made doing so easy for the consumer, Roger Cheng writes.

NOTICE TO READERS
Get Tomorrow’s News Today
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 16.74 points to 12656.78
NASDAQ up 7.27 points to 2475.65
S&P 500 up 7.70 points to 1445.94
10-year T-note up 4/32 at 98 14/32 yield 4.837
NYMEX Spot Crude up $1.72 at $59.02/bbl at close
Dollar/Euro down 0.0056 at 1.2964