• Two people told Reuters that General Motors Co. (OTC:MTLQQ) is prepared to sell Opel, its European carmaker, to Canada’s Magna International Inc. (NYSE: MGA). The board of trustees that controls a majority stake in Opel has the last word on which Opel’s buyer will be. GM was thought to be selling Opel to either Magna of RHJ International SA.

• Nearly 360,000 U.S. housing units – or an average of one in every 357 units – filed for foreclosure in August, down 1% than in July. Nevada remained the state with the highest foreclosure rate, one in 62 units, for the month, followed by Florida’s rate of one in 140,MarketWatch reported.

• The Bank of England kept its benchmark interest rate at 0.5% and kept plans to buy as much as $290 billion (175 billion pounds) in assets to prevent the U.K. economy from slumping further into recession. The U.K.’s FTSE-100 Index responded to the move by rising above 5,000 for the first time in nearly a year, Bloomberg News reported.

• Emerging market stocks, as measured by the MSCI Emerging Markets Index, are at their most expensive level in nearly nine years, according to data compiled by Bloomberg. Valuations are 19.9 times earnings, and emerging market shares have risen 53% this year as a result of global government stimulus packages, interest-rate cuts, and optimism that the financial crisis is over.

• House prices in England rose 0.8% in August, their second consecutive monthly gain, according to a survey by HBOS, which is owned by Lloyds Banking Group plc (NYSE ADR: LYG). Prices are at nearly the same level as the beginning of 2009, but 10.1% lower than they were in August 2008, MarketWatch reported.

• Turkey’s economy shrank 7.0% in the second quarter, Turkish Statistics Institute said, a sharp pace but a much better performance than the 8.0% decline many analysts expected,MarketWatch reported. The second-quarter figures are much better than Turkey’s 14.3% gross domestic product (GDP) tumble in the first quarter. Thursday’s data “showed that Turkey has become the latest economy to emerge from recession, rebounding strongly in the second quarter of this year,” Neil Shearing, emerging Europe economist at Capital Economics, wrote in a note to clients.

• Japan’s third-largest brewer Suntory Holdings Ltd. is in talks to buy drinkmaker Orangina – maker of Schweppes, Oasis and other brands – from Blackstone Group LP (NYSE: BX) The brewer seeks to expand outside its domestic market, which entrenched deeply in recession during the global financial crisis. “Purchasing Orangina would be a stepping stone to further development in global markets, including Europe,” Shigeo Kikuchi, an equity manager at Takagi Securities Co., told Bloomberg. “Japan’s beverage industry is saturated and companies need to look for overseas markets to grow so the move is inevitable.”

Source: Investment News Briefs Friday, September 11, 2009

Investment News Briefs Wednesday, September 9, 2009

Source: Investment News Briefs Friday, September 4, 2009

Investment News Briefs Tuesday, September 1, 2009

• Japan’s economy is once again growing, with its gross domestic product (GDP) rising 3.7% in the second quarter. A rebound in exports to China and a large stimulus program helped Japan bounce back from contraction that, at an annualized rate of 11.7%, was more than double that of the United States’ in the first quarter. Officials at Japanese companies think the nation’s worst recession since World War II is nearly over, according to a survey released last weekend.

• The National Association of Home Builders/Wells Fargo confidence index rose to 18 this month, a one-year high, Bloomberg Newsreported. Still, a reading below 50 means most respondents view conditions as poor. “Inventory is being cleared and that is starting to benefit the new-home market,” Julia Coronado, a senior economist at BNP Paribas SA in New York told Bloomberg. “With a few months’ lag, that will lead to a turnaround in construction activity.”

• The Federal Reserve Bank of New York’s general economic indexrose to 12.1, higher than forecast and the first increase since April 2008. Any reading above zero indicates that manufacturing is growing. “Inventories were drawn down to such amazingly low levels that companies need to start bringing them back,” said Tom Porcelli, a senior economist at RBC Capital Markets Corp. in aBloomberg News interview. “We are coming out of the recession.It’s probably over at this point.“

• Credit card default rates showed signs of stabilization in July,Reuters reported, citing regulatory filings by multiple large U.S. banks. Bank of America Corp. (NYSE: BAC), the bank with the highest default and delinquency rates saw its charge-off rate shrink slightly to 13.81% in July from 13.86%. “It just seems to bear out what we heard in the second-quarter calls, that things seem to be getting marginally better — and I would stress marginally — on the consumer side,” Nancy Bush, founder of NAB Research, said of Bank of America.

• Microsoft Corp. (Nasdaq: MSFT) and General Electric Co. (NYSE: GE) joint venture MSNBC.com has acquired “hyperlocal” news and information Web site EveryBlock. Terms were not disclosed, but in June Time Warner Inc.’s (NYSE: TWX) AOL acquired a similar Web site, Patch for $7 million, The Washington Post reported. EveryBlock offers news in 15 cities. “Joining with MSNBC.com gives us the resources to turn EveryBlock from a cool, useful service into something much bigger,” said Adrian Holovaty, founder of EveryBlock. Holovaty and the company’s staff of five will remain based in Chicago.

• Reader’s Digest Association Inc., whose namesake magazine says it is the bestselling magazine in the world, has filed for Chapter 11 bankruptcy protection as a part of a prearranged plan with lenders to cut debt by 75%. If the court approves the deal, Reader’s Digest’s debt would be reduced to $550 million from its current $2.2 billion. “Our deal has already been negotiated and hammered out with a majority of our creditors,” said Chief Executive Officer Mary Berner in an interview with Reuters. The announcement “doesn’t affect our employees, it doesn’t affect the vast majority of vendors, it doesn’t mean we’ll do mass layoffs, it doesn’t mean we’re going to be selling off assets. It’s business as usual.”

• Continuing weak demand, bad weather and charges related to the halting of its expansion contributed to a 19% drop in Lowe’s Cos.’(NYSE: LOW) second quarter earnings. The world’s second-largest home improvement retailer after Home Depot Inc. (NYSE: HD) saw its profit fall to $759 million, or 51 cents a share for the quarter ended July 31. That compares to a net income of $938 million, or 63 cents a share in the same period last year. Sales fell 4.6% to $13.84 billion and same-store sales dropped 9.5%.

Source: Investment News Briefs Tuesday, August 18, 2009

Source: Investment News Briefs Thursday, August 13, 2009

• Investors yesterday (Monday) cashed in on profits from Friday’s market rally, which followed better-than-expected unemployment news. The Standard & Poor’s 500 Index fell 0.33% to 1,007.10, the Dow Jones Industrial Average dropped to 9,337.95, down 0.34%, and the Nasdaq Composite Index closed at 1,992.24, a decline of 0.40%.

• Southwest Airlines Co. (NYSE: LUV) offered more than $170 million for bankrupt Fontier Airlines Holdings (OTC: FRNTQ). That’s up more than 50% from its first offer of $113.6 million. The move is intended to head off a bidding war with rival Republic Airways Holdings (Nasdaq: RJET). The winning bidder will get a stronger foothold in the Rocky Mountain region.

• General Motors Co. (OTC: MTLQQ) is partnering with eBay Inc.(Nasdaq: EBAY) to sell cars and trucks on a new portal sitestarting today (Tuesday). The joint venture will involve roughly 225 California dealerships and will run through September 8. If the program is successful, it could expand nationally as soon as next month, The New York Times reported.

• Shares of Dish Network Corp. (Nasdaq: DISH) rose more than 4% yesterday (Monday) to close at $19.30, as the satellite television provider reported its first increase in subscribers in more than a year, adding 26,000 new customers. Still, high expenses from increased marketing and patent dispute litigation with TiVo Inc.(Nasdaq: TIVO) caused Dish’s profit to fall to $63.4 million, or 14 cents a share, in the quarter ended June 30. That compares to a net income of $335.9 million, or 73 cents a share, a year ago. Revenue was flat at $2.9 billion.

• Bankruptcies among U.S. consumers grew by more than 126,000 in July, representing a 34% increase over July 2008, Bloomberg News reported, citing the American Bankruptcy Institute (ABI). “Rising unemployment on top of high pre-existing debt burdens is a formula for higher bankruptcies through the end of this year,” ABI Executive Director Samuel Gerdano said. The increase came after bankruptcies in the first six months of 2009 grew 36.5%.

• U.S. Federal Reserve Chairman Ben Bernanke deserves another term based on his success in battling the financial crisis, Nobel Prize winner and Princeton University economist Paul Krugman toldBloomberg News in an interview. “He turned the Fed into the financial intermediary of last resort,” Krugman said. “When the banking system failed to deliver capital where it was needed, he put the Fed into the markets.” In 2000, Krugman was recruited by Bernanke to join Princeton. Bernanke’s term ends on January 31 2010.

• Fast-food giant McDonald’s Corp. (NYSE: MCD) reported its same-store sales for July rose 4.3%. Sales in the United States grew 2.6%, Europe sales were up 7.2%, and sales in the Asia/Pacific, Middle Eastern and African markets rose 2.1%. The company attributed the growth to a strong reception of its McCafe espresso-based coffees, a tiered-menu approach and longer operating hours. “With July’s improved trends, we are encouraged by (McDonald’s) ability to gain or maintain share in a still challenging environment,” Oppenheimer analyst Matthew DiFrisco said in a note to clients.

• Bank of America Corp. (NYSE: BAC) will pay $55 million to employees of its Countrywide Financial Corp. to settle a class-action lawsuit in which the employees accused Countrywide of misleading them about its financial health and causing the value of their retirement plan to drop, Bloomberg News reported. Lawyers for the employees called the settlement “fair, reasonable and adequate.” BofA acquired Countrywide in January 2008.

Source: Investment News Briefs Tuesday, August 11, 2009

• Both the Dow Jones Industrial Average and the Nasdaq Composite Index flirted with 9,200 and 2,000 yesterday (Thursday), respectively. Thanks to a continuing string of better-than-expected earnings reports, the Dow jumped 83.74 points, or  0.92% to close at 9,154.46. The tech-heavy Nasdaq eclipsed 2,000 in trading before finally settling in at 1,984.30, up 16.54, or 0.84%, its highest close since October 1. Meanwhile, the Standard & Poor’s 500 also posted a gain, closing at 986.75, up 11.6 or 1.19%. “Institutional and retail investors are so anxious to make up the lost returns of the last year, they are using any cue to buy aggressively,” Kevin Mahn, managing director and chief investment officer at Hennion & Walsh told MarketWatch.com. “We got to the point in the first quarter, when everyone was so risk averse they lost out. And, in just six months, they have now become overly aggressive.”

• U.S. taxpayers yesterday (Thursday) became Citigoup Inc.’s(NYSE: C) largest shareholder with a 34% stake in the company. The federal government swapped $25 billion of its $45 billion Troubled Asset Relief Program (TARP) investment into common stock. The remaining $20 billion will remain in the form of preferred shares that pay an 8% annual dividend.

• Initial claims for jobless benefits rose by 25,000 to a seasonally adjusted 584,000 last week the Labor Department said yesterday (Thursday). However, the number of people still on benefit rolls after collecting an initial week of aid fell by 54,000 to 6.20 million in the week to July 18, the lowest since early April. That fueled optimism that the economy is on the mend.

• Light, sweet crude for September delivery yesterday (Thursday) rose $3.59, or 5.6%to settle at $66.94 a barrel on the New York Mercantile Exchange (NYMEX). The surge left some analysts miffed, as there was no obvious motivation. “You need to really worry about a market that sells off on a very large build and supply one day, and then it rebounds on no headline at all,” analyst and trader Stephen Schork told The Associated Press.

• Motorola Inc. (NYSE: MOT) yesterday (Thursday) posted an unexpected profit for the second quarter after several quarters of losses. Motorola said cost cuts including 8,000 layoffs so far this year were largely responsible for the turnaround. Revenue dropped 32% to $5.5 billion for the quarter, but the company reported a profit of $26 million, or 1 cent a share. That’s up from $4 million a year ago.

• The worst recession in more than 60 years is taking its toll on theWalt Disney Co.’s (NYSE: DIS) advertising and theme park revenue. The Burbank, Calif.-based company saw its net income drop to $954 million, or 51 cents a share for the quarter ended June 27. That compares to a net income of $1.28 billion, or 66 cents a share in the same quarter last year. Operating income from its highly seasonal theme parks dropped 19% to $521 million in the quarter, compared to last year’s $641 million, which was up 3% from 2007. Advertising on its media networks which include ESPN decreased: The operating revenue was down 13% to $1.3 billion, compared to last year’s 9% increase to $1.5 billion.

• Microsoft Corp. (Nasdaq: MSFT) Chief Executive Officer Steve Ballmer weighed in on the beating his company’s new partnerYahoo Inc. (Nasdaq: YHOO) took Wednesday, when investors unloaded shares to send Yahoo’s stock down more than 12%. “People haven’t figured it out,” Ballmer said. “Yahoo gets 88% of the search revenue they have today. They have 0% cost of goods sold against 88% revenue and they have no [research and development] expense and no ongoing [capital expenditure],” Ballmer said in a Dow Jones Newswires report, which cited an event at Microsoft’s headquarters in Redmond, Wash. Yahoo’s Wall Street beating continued yesterday (Thursday), with its shares closing at $14.60, down 54 cents or 3.57%. Microsoft’s shares climbed 1 cent yesterday, closing at $23.81, up .04%.

• Southwest Airlines Co. (NYSE: LUV) made a minimum bid of $113.6 million for Frontier Airlines Holdings Inc. (OTC: FRNTQ) in a bankruptcy auction that would eliminate its low-fare rival. The bid would compete with a pending offer of $108.8 million fromRepublic Airways Holdings Inc. (Nasdaq: RJET). The winning bidder will get a bigger foothold in the Rocky Mountain region. “Taking the Denver gates and equipment from Frontier would give them a large presence there, and the cities that aren’t on Southwest’s route map now could easily be integrated,” said Dave Swierenga, president of an aviation consulting firm AeroEcon toldBloomberg News.

Source: Investment News Briefs Friday, July 31, 2009

• Goldman Sachs Group Inc. (NYSE: GS) representatives are yesterday (Tuesday) defended their commodities trading business on Capitol Hill, where regulators may set limits on speculators in the sector. The Commodity Futures Trading Commission (CFTC) said that the energy trading community may have played a major role in the volatility of energy prices over the last few years, and may need to expand its oversight of the practice. “The American people are tired of excessive speculation and bubble economies caused by Wall Street greed,” Senator Bernard Sanders, an independent from Vermont, said at the hearing, according to The New York Times. “They are tired of hedge fund managers and firms like Goldman Sachs making a fortune betting that the subprime mortgage market will continue to get worse or that more companies will go bankrupt.”

• Consumer confidence in the United States continues to wane: The Conference Board’s confidence index fell to 46.6 this month following a 49.3 reading in June. The key factor affecting confidence is unemployment. “Folks are still concerned about their jobs,” Mark Vitner, a senior economist at Wells Fargo Securities LLC told Bloomberg News.

• Month-to-month U.S. home prices in May grew 0.5% in May, the first increase in nearly three years according to the Standard & Poor’s/Case-Shiller Home Price Indicies. Year-on-year prices continue to decline on the 20-city index, falling 17.1%. “The pace of descent in home price values appears to be slowing,” said David M. Blitzer, chairman of the Index Committee at S&P in a prepared statement. “While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home price appreciation.”

• In a move that should appease public outrage over Wall Street pay, the U.S. House Financial Services Committee approved legislation that would enable regulators to ban incentive pay at banks and give shareholders a vote on bonuses, Bloomberg News reported. The bill, adopted 40-28 yesterday (Tuesday),would allow agencies such as the Securities and Exchange Commission (SEC) to prohibit compensation that encourages financial companies to take “inappropriate risks.” The House of Representatives and Senate must pass the bill before U.S. President Barack Obama signs it into law. The House could vote as soon as Friday.

• International Business Machines Corp. (NYSE: IBM) acquired Chicago-based predictive analytics firm SPSS Inc. (Nasdaq: SPSS) for $1.2 billion in cash, or $50 per share. The deal was valued at 40% above SPSS’ closing price of $35.09 on Monday. SPSS’ shares soared on the news yesterday (Tuesday), closing at $49.45, up 40.92% or $14.36. The worldwide market for business analytics software will swell to $25 billion this year, growing 4% over 2008, IBM said, citing Interactive Data Corp. (NYSE: IDC) information.

• Viacom Inc. (NYSE: VIA) suffered a 32% drop in its second quarter bottom line, citing a challenging global economy. The media giant’s profit fell to $277 million, or 46 cents a share on revenue of $3.29 million for the quarter ended June 30. That compares to a net income of $406 million, or 64 cents a share on revenue of $3.85 billion in the same period last year. The company was encouraged that its premium movie channel, Epix, coming this fall, will appear in the lineup for subscribers of Verizon Communications Inc.’s (NYSE: VZ) FiOS television service. “While we view this as an encouraging sign, we note that Verizon FiOS has a very limited base of TV subscribers,” Spencer Wang said in a Reuters report. “We continue to believe securing distribution from larger operators [such as major cable companies] will be challenging.”

Source: Investment News Briefs Wednesday, July 29, 2009

• Verizon Communications (NYSE: VZ) will lay off 8,000 full-time and contract workers following a 21% profit drop in its second quarter, The Wall Street Journal reported. All of the job cuts will come from Verizon’s wireline business, which was hit by 630,000 residential phone subscribers canceling their service. This was offset by a rise in its fledgling fiber-optic television and Internet service called FiOS, which saw subscriber gains of 300,000 and 303,000, respectively. For the quarter ended June 30, Verizon posted a net income of $1.48 billion, or 52 cents a share on revenue of $26.86 billion. That compares to a net income of $1.88 billion, or 66 cents a share on revenue of $24.12 billion in the same quarter last year. The company’s wireless division, which is the No. 1 carrier in the United States, saw its revenue increase 28% thanks to its acquisition of Alltel Corp.

• The bulls were out in force on Wall Street yesterday (Monday) after all three markets posted gains. The Dow Jones Industrial Average rose 15.27 points, or 0.2% to close at 9108.51, theStandard & Poor’s 500 climbed 2.92 points, or 0.3% to close at 982.18 and the tech-laden Nasdaq Composite Index increased 1.93, or 0.1% to 1967.89. “The bottom line is that there are signs of life, and the market doesn’t want to go down. Buying late in the day and closing near the high of the day is more proof that the bulls are in control,” Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research told TheStreet.com.

• The Securities and Exchange Commission made permanent a temporary rule that seeks to limit “naked shorting” by requiring broker dealers to promptly purchase or borrow securities that they would use to deliver on a short sale, MarketWatch.com reported. “Until the SEC actually toughens its rules so that abusive short selling can be stopped effectively with enforceable standards, I am concerned that the abuses that took place last year that hastened the demise of Lehman Brothers and Bear Stearns could happen again,” said Sen. Ted Kaufman, D-Del. “Instead of proposing action today to deal with the problem, the SEC apparently is content to let potential solutions sit on the shelf for another two months,” he added.

• New single-family home sales rose 11% in June over the previous month to a seasonally adjusted rate of 384,000, the Commerce Department said yesterday (Monday). Still, year-over-year sales were down 21.3%. The Midwest saw 43% growth in the category, the sharpest increase in the category. Sales in the west were also strong, up 23%.

• Crude oil for September delivery rose 94 cents yesterday (Monday) to $68.99 a barrel in after-hours trading on the New York Mercantile Exchange (NYMEX), thanks to expectations thatgains in Asian equity markets will spur fuel demand, Bloomberg News reported. The rise was also spurred by investors seeking commodities as a hedge against inflation, as the dollar traded near a seven-week low against the euro. “Investors see the equity markets as a good lead for what you can expect oil demand to be going forward,” Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. told Bloomberg. “At times when you’ve got high inflation expectations, investors tend to move toward real assets such as commodities.”

• Thirty-four percent of corporate chief information officers plan on upgrading their companies to Microsoft Corp.’s (NYSE: MSFT) Windows 7, and 75% also plan on refreshing their hardware investments according to MarketWatch.com, citing a Deutsche Bank AG (NYSE: DB) survey. The investment bank says the Oct. 22 release of its new operating system “could trigger significant new investment across the technology value chain.”

• A strong value proposition can’t stop the video game industry from suffering the wrath of the worst recession in more than 60 years.Software sales fell 29% from a year earlier, while console sales dropped 38%, The Wall Street Journal reported, citing data from market research firm The NPD Group Inc. The decline of the industry, which until the market’s March lows was thought of as recession-proof, has ripped to retailers such as Amazon.com Inc. (Nasdaq: AMZN), which blamed its weak quarterly results from its media business on falling game sales.

Source: Investment News Briefs Tuesday, July 28, 2009