• 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