U.S. Markets
Dow +420.41 (+3.51%)
Nasdaq +91.25 (+4.19%)
S&P 500 +54.14 (+4.24%)
News That Moved the Market
Markets Sizzles With More Confidence In Financials. Markets began the session with healthy gains after both Goldman Sachs (GS, +16.3%) and Lehman (LEH, +43.3%) reported better than expected quarters and reassured investors that they were well capitalized. Heading into the FOMC announcement, the Dow was up nearly 300 points. The Fed's decision to cut rates by 75 basis points caused a sell-off, as most expected a full-point cut, but the markets quickly recovered and finished the day at new highs.
Fed Details. The Fed cut both the fed funds rate and discount rate by 75 basis points to 2.25% and 2.50%, respectively. Two members voted against the cut, Dallas Fed President Fisher and Philadelphia Fed President Plosser, who preferred easing less. The statement acknowledged the uncertainty surrounding inflation, but said it expects inflation to moderate over time, keeping the door for further cuts if necessary. The Fed also assured that it will act in a timely manner if more price instability creeps up.
Quick Tics:
The Financial Sector increased 8.5% on the day, its largest jump in 8 years...
Adobe (ADBE, +3.4% day; +4.7% A.H.) reported sales jumped 37% and affirmed revenue would increase 13% this year…
Housing starts fell 0.6% last month, which was better than economists expected...
Bear Stearn's (BSC, +22.9%) jumped after more stockholders hinted they would vote against the JP Morgan (JPM, +6.0%) buyout.
Tomorrow Notable Earnings:
General Mills, Inc.(GIS) Before Open
Morgan Stanley (MS) Before Open
Nike (NKE) After Close
Economic Events:
10:30 AM: Crude Inventories
Tuesday, March 18, 2008
Fed Cuts Rates Another 75 Basis Points...
Federal Reserve slashes its key interest rate to 2.25% and signals more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession.
Rates are back to June 2004 levels.
Rates are back to June 2004 levels.
Kirby Corp Lifts Guidance...
Kirby Corp. (KEX) expects first-quarter net income to exceed 66 cents a share, above its previous forecast range of 57 cents to 62 cents. The Houston tank barge and towing vessel operator said the guidance reflects strong demand for both marine transportation and diesel engine service operations.
On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.
On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.
Lehman Jumps on Earnings Report...
Lehman Brothers (LEH) - brokerage's net slides 57% to $489 million, or 81¢ a share, as results are hurt by net mark-to-market adjustments of $1.8 billion. Revenue falls by 31% to $3.51 billion.
But shares gain 15% pre-market as results top estimates.
But shares gain 15% pre-market as results top estimates.
Goldman Beats Street....
Financial-services firm Goldman Sachs (GS) reports net earnings of $1.51 billion, or $3.23 a share. Net revenue drops to $8.34 billion from $12.73 billion. CEO says market conditions "are clearly very difficult," as firm takes net losses on residential mortgages and securities of $1 billion, while credit products included a loss of roughly $1 billion.
Wall Street expected EPS of $2.58.
Wall Street expected EPS of $2.58.
Rite Aid Warns....
Shares of Rite Aid (RAD) fell 6.3% after the drugstore operator warned it would lose more than a previous forecast of $0.27-0.31 during the fiscal year ended March 1. Rite Aid said it cannot estimate its exact loss, but noted that weaker earnings are forcing it to reduce by up to $1B ($1.38/share) a deferred tax credit it no longer thinks it will be able to take advantage of.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
Today's Top Stories....
• New York Fed called on banks to support Lehman Bros. - report
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
Monday's Trading Summary...
U.S. Markets
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Subscribe to:
Posts (Atom)
