Monthly Archives: June 2008

Fortune Brands… When Even Booze Spending Is Down (FO)

Fortune Brands, Inc. (NYSE: FO) has come clean with a lowered earnings guidance for the current quarter and full year of 2008.  The company noted that a weakening consumer sentiment in the U.S., the ongoing correction in the U.S. housing market, and a large and unexpected Australian tax increase on ready to drink spirits products have all culminated together to create a more challenging environment for the company’s products.

The company now expects pre-charge/gain earnings to be down at a high-teens-to-mid-20’s percentage rate compared to diluted EPS of $1.51 before charges/gains for continuing operations in the year-ago quarter. This is worse than its previous forecasts of being down at a high-single-digit-to-mid-teens percentage rate.  If we maximized the warning and took a mid-20’s percentage rate, this could generate an effective EPS report of $1.13.  First Call has estimates at $1.32 currently.

It does expect that results in the second half of 2008 will be better than the first half because of company-wide productivity initiatives and increased brand-building investments. For the full year 2008, the company now expects to generate diluted EPS before charges/gains that is down at a high single-digit to high-teens percentage rate compared to $5.06 in 2007. The company’s previous full-year target was for diluted EPS before charges/gains to be flat to down at a high-single-digit percentage rate versus 2007’s results. 

If we interpolate that earnings, this could be anywhere from around $4.10 to $4.60 depending on where your starting point is.  Current First Call estimates are $4,79 EPS, so either way this is a big shortage. 

Fortune closed up marginally by $0.04 in regular trading at $62.41 today.  Shares are now down almost 5.5% at $59.00 in after-hours trading.  Go ahead and chalk that up as another 52-week low.  The prior range was $62.01 to $90.80.  So much for good old fashioned booze as being a defensive sector.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 3:49 pm in Earnings Warning, Food,

EMCORE Corp. Unloads Part of Alternative Energy Holdings (EMKR, WWAT)

EMCORE Corporation (NASDAQ: EMKR) has announced after the close of trading that the company has agreed to sell 2,000,000 shares of Series D Preferred Stock of WorldWater & Solar Technologies Corporation (OTC Bulletin Board: WWAT.OB). 

It has sold this along with 200,000 Warrants, to The Quercus Trust, a major shareholder of both EMCORE and WorldWater, at a price equal to $6.54 per share of the Series D Preferred Stock.  The Series D Preferred Stock is convertible into WorldWater Common Stock at a ratio of 10 to 1, and each of the Warrants entitles the holder to purchase a share of Series D Preferred Stock for a price of $3.17 per share. 

The sale will take place through two different closings, one for 1,000,000 shares and 100,000 warrants, which closed on Friday, June 27, 2008, and one for an equal number of shares and warrants which should close before July 31, 2008.  The company has noted that the total proceeds from the sale should approximate $13.1 million.

Emcore had a tough day with shares closing down some 13% at $6.26, with a 52-week trading range of $5.31 to $15.90.  To put the size of this in perspective, Emcore’s market cap is $484 million after today’s sell-off.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 3:12 pm in Alternative Energy, Semiconductor, ,

The 52-Week Low Club (F, LEH, ABK, MER, C, WB)

Lehman (LEH) falls on rumors of sale to Barclays (BCS). Down to $19.64 from 52-week high of $76.99.

Ambac (ABK) drops on more concerns it will need additional capital. Sells off to $1.15 from 52-week high of $88.41.

Merril Lynch (MER) slips to $31.55 on speculation that it may write-off $5.4 billion in Q2.

Citigroup (C) runs down to $15.58 on rumors it may have to raise more capital. Has 52-week high of $52.97.

Wachovia (WB) drops to $14.70 on bad day for banks. The 52-week high was $53.10.

Ford (F) down to $4.46 on day before June sales announced. The 52-week high was $9.70.

Douglas A. McIntyre

Posted on: June 30, 2008 – 3:02 pm in HI/LOW, , , , , ,

US Auto Sales Coming With Free Rope (GM, F, TM, HMC)

On Tuesday, it won’t just be the first day of the month nor just the first day of the quarter.  It is yet another reporting day for new car and truck sales in the U.S. For Ford Motor (NYSE: F), General Motors Corp. (NYSE: GM), Chrysler and so forth.  In a move that is becoming all too familiar, The Big Three might as well just count Toyota Motor Corp. (NYSE: TM) and Honda Motor Co. Ltd. (NYSE: HMC) in there as these two are becoming larger and larger sellers in the U.S.

We have looked over the forecasts at Edmunds.com and seen forecast of The Big Three domestic  market share of 45.4% in June, which would be down from June 2007’s 51.4% but up from May 2007’s 45.3%.  Unfortunately it seems as though we are stuck with bad news for a whilein the US Auto sector.  As we noted over at Volume Spike, traders arestill betting against GM and Ford with options trading.

The latest individual estimates from Edmunds.com are expected to look grizzly:

  • GM will sell 240,000 vehicles in June, down 25.2% from June 2007 and down 10.8% from May 2008.
  • Ford will sell 181,000 vehicles in June, down 24.8% from June 2007 and down 15.2% from May 2008.
  • Chrysler will sell 126,000 vehicles, down 31.2% from June 2007 and down 15.0% from May 2008.
  • Toyota will sell 217,000 vehicles in June, down 11.7% from June 2007 and down 15.7% from May 2008.
  • Honda will sell 147,000 vehicles in June, up 4.0% from June 2007 and down 12.8% from May 2008.

These ghastly numbers are even worse if you do not adjust for the fewer number of selling days on the calendar if you look at the table that Edmunds.com gives there. 

It seems that 52-week lows day after day (actually multi-decade lows now) aren’t any interpreted floors.   

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 1:23 pm in Autos, , , ,

Sirius (SIRI): The Market Dumps On Merger Forecasts

Sirius (SIRI) told the world how things would look at the company after its proposed merger with XM Satellite (XMSR). The world greeted the forecast with scorn.

The company called the savings synergies, an overused word. SIRI guessed that it would have "total synergies, net of the costs to achieve such synergies, for the combined company are expected to be approximately $400 million in 2009." It went on further to day The new firm is expected to achieve positive free cash flow, before satellite capital expenditures, for the full year 2009.

SIRI left out the most important part of its guessing–revenue. With out that as part of the equation given to Wall St., the forecasts are merely speculation. No one will buy them without numbers covering the top line.

Both Sirius and XM are down sharply after they released the information. That may be because skeptics think the satellite radio business has seen its best days. It gets most of its new business from car sales, which are doing as poorly has they have in two decades. And, many consumers want an Apple (AAPL) iPod or a music phone from one of the handset companies.The need for satellite radio is disappearing.

The projection are probably false because the revenue needed to make the numbers won’t be there.

Douglas A. McIntyre

Posted on: June 30, 2008 – 12:34 pm in Mergers and Buy Outs, , ,

MBIA Tries Yelling All Clear (MBI)

MBIA Inc. (NYSE: MBI) decided to speak out against some recent speculation and some recent reporting on its overall health.  The company has said that as a result of Moody’s downgrade of MBIA Insurance Corporation’s insurance financial strength rating from Aaa to A2, it expected that it would be required to post additional eligible collateral and fund potential termination payments under its outstanding Guaranteed Investment Contracts (GICs).

The company announced that sales of approximately $4 billion of investment assets during the second quarter has given it sufficient eligible collateral and cash to satisfy these additional requirements.  As part of this, its entire remaining GIC portfolio will be fully collateralized (subject to exercise rights).  The repositioning activity in the portfolio did not include the broad sale of municipal securities.

MBIA taking this a step further by saying it "is not in a tenuous situation” and that the holders of insurance policies, GICs, medium-term notes and other debt instruments can rest assured that MBIA will meet its obligations "on time and in full."

It has also broken down some portfolio numbers.  ALM portfolio liabilities declined from $25.1 billion at March 31, 2008 to $24.1 billion at June 27, 2008 through normal amortization of the portfolio. The $24.1 billion balance at June 27 consists of $15.8 billion in GICs ($8.3 billion were collateralized prior to Moody’s downgrade), $7.3 billion in medium-term notes (MTNs) issued by MBIA Global Funding, LLC, and $1.0 billion in fixed term collateralized repurchase agreements.

Of the remaining $7.5 billion in previously uncollateralized GICs, $3.9 billion are now being collateralized and $3.6 billion are now being terminated.  The $7.3 billion in outstanding MTNs do not require collateral posting and are not subject to termination upon any downgrades; they mature over 34 years and have an average life of approximately 5.3 years.

Based upon the sales, MBIA estimates that it will record pre-tax net realized losses on its second quarter income statement of approximately $300 million and the sale of assets is not expected to have a material impact on shareholders’ equity.  MBIA saids it also continues to hold approximately $1.4 billion in cash at the holding company level.

MBIA shares had been trading down some 10% on all of these liquidity concerns.  Shares are now down 5% at $3.94 on the day.  Unfortunately, if this level holds, it will mark a new 52-week low close as the prior 52-week trading range was $4.03 to $68.98.

Unfortunately, this baseball game is still in the beginning innings, and it looks like it might easily be a low-scoring game that could go into extra innings.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 11:47 am in Financial Stocks,

IPO Withdrawn: BCD Semiconductor

BCD Semiconductor Manufacturing Limited has filed with the SEC to formally withdraw its prior registration statement.  In short, the company has determined not to proceed with its planned initial public offering.

You can guess the reason for the withdrawal: Market conditions.  The company said it does not plan to sell securities in a public IPO for the foreseeable future due to the difficult market conditions for initial public offerings.  The company did note that it advised it may undertake a subsequent private offering of securities in the future.

This might not be permanently out, but it likely won’t be coming public any time soon.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 11:31 am in IPOs, Semiconductor

Bank for International Settlements Paints Bleak Picture

No one hears much about the Bank for International Settlements but It deals with central banks worldwide and probably has as good a fix on the global economy as any single entity.

There is still an opinion war being waged between the head of money center banks. Over the weekend, the chiefs a BNP Paribas and Barclays (BCS) tried to make the case that the worst of the credit crisis has passed. In the opponent’s corner, the CFO of Merrill Lynch (MER) said that the brokerage would look at selling its pieces in Blackrock and Bloomberg. MER has nothing but lint in its pockets after record write-offs.

Daily reports on the rising prices of agricultural commodities and oil and the slowing GDP in many nations tends to favor the pessimists. If the stock market does indeed rise and fall based on what investors think the economy and corporate earnings will look like six months out, traders are predicting the racketing down of hope to continue.

When the Bank for International Settlements annual report came off the presses today, there was no good news in it. One section summarized the agency’s view: "While difficult to predict, their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect."

BIS should be considered a dispassionate observer. It does not make money in the financial sector. It is third party observer with the ability to watch the global economy from above the fray.

The fray is looking worse.

Douglas A. McIntyre

Posted on: June 30, 2008 – 9:50 am in Economy,

Lehman Runs the GE Value Gauntlet (GE)

General Electric Co. (NYSE: GE) is seeing a rise of nearly 1% today, and this is after several days of hitting the 52-week low list and almost seeing its stock trade with $25 handles for the first time in five years. 

Lehman has come out defending the stock saying shares could be near a bottom.  The research noted that it is rather cheap comparatively when you factor in current concerns over its financial service business all the way back to the 1989 to 1992 period.  It noted that similar concerns over exposure to leveraged buyout and real estate lending pushed shares to a 25% discount to the S&P500 at that point, and GE is currently trading at an 18% discount to the S&P500.

What is more interesting about this call than the "relative valuation" being close to a trough is that Lehman notes that there is a potential GE could trade at a premium again.  It even throws out a 20% after its returns to the double-digit earnings growth that its expects over the long term.

Lehman has also noted that it thinks the sale of GE’s US private label credit card business could get done this year at a solid price.  Whether or not that occurs, well that is a different animal all together.  But there have been many trying to figure out which units GE will jettison.

Regardless of which units get kept and which get punted, the GE of tomorrow is looking like a far cry from your father’s GE.  Many have tried defending GE all the way down.  Shares have literally come off almost 40% from their highs.  Whether or not this marks the true bottom won’t be known, but someone will eventually be right there.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 9:46 am in Analyst Calls, Conglomerates,

SPAC Goes Operational: Hicks Acquisition Becoming Graham Packaging (TOH, BX)

Hicks Acquisition Company I, Inc. (AMEX: TOH) has reached an agreement in principle to go from SPAC to operational.  The deal and terms are subject to execution of a definitive agreement, although the company noted that this is expected to be finalized in the next few days.  Hicks Acquisition will merge with Graham Packaging Holdings Co. through a transaction with Hicks Acquisition.  Interestingly enough, this will be in partnership with The Blackstone Group L.P. (NYSE: BX) and the Graham Group.

Hicks Acquisition is a Dallas-based special purpose acquisition company, or SPAC, that was founded and headed by Thomas O. Hicks.  This is also going to be one of the larger SPAC transactions that has ever been announced.  With the debt and financing from partners, this SPAC merger will be valued at approximately $3.2 Billion.  This may even be a record for a SPAC, or at least for the sector it is entering.

After the transaction, the combined enterprise will be renamed Graham Packaging Company and will list on the New York Stock Exchange.

Blackstone has also agreed that it will maintain the largest ownership stake for at least two years as it continues to play an important role in guiding the company strategically and operationally.

Graham Packaging was founded in 1972 and is based in York, PA.  Its 2007 sales are represented as roughly $2.5 Billion.  Graham Packaging is a market leader in custom plastic containers, producing more than 20 billion container units annually at 83 manufacturing plants in North America, Europe and South America. It calls itself the leading supplier of plastic containers for hot-fill juice and juice drinks, sports drinks, drinkable yogurt and smoothies, nutritional supplements, wide-mouth food, condiments, beer, liquid laundry detergent and motor oil.  Certain key customer names are Pepsi, Coca-Cola, Danone, Ocean Spray, Heinz, Abbott, Nestle, Anheuser-Busch,and many more.

Hicks Acquisition I has been public since its IPO in October 2007.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 8:47 am in IPOs, Mergers and Buy Outs, Private Equity, ,

Goldman Sachs Positive on CommTech (CSCO, QCOM, RIMM, PWAV)

Goldman Sachs has come out with some positive calls in the communications technology group, and one of the stocks has been given an upgrade. 

Specifically, Goldman Sachs noted that it is maintaining a bias toward the large-cap stocks in the communications tech universe with stocks like Cisco Systems (NASDAQ: CSCO), Qualcomm (NASDAQ: QCOM), and Research-in-Motion (NASDAQ: RIMM).  The firm is starting to see some opportunities in small-caps in the sector and the firm has listed Powerwave (NASDAQ: PWAV) as its top idea.

PowerWave was RAISED TO BUY FROM NEUTRAL and it has a premium over Wall Street’s consensus estimates for 2008 and 2009.  The firm believes that PowerWave can grow its top-line at least 10% over the next 2 to 3 years. Price target is $5.30, about 30% above current levels.

The firm noted that Small-cap stocks in its CommTech coverage are down 36% so far in 2008 and down 19% in June. Goldman Sachs believes this current underperformance is due to their greater sensitivity to macro headwinds as customers consolidate around larger vendors, and rising investor risk aversion.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 6:26 am in Analyst Calls, Technology Companies, , , ,

Top 10 Pre-Market Analyst Calls (ALU, ATHR, HUN, LVLT, MAA, RSOL, TER, TEVA, TWTI, WFMI)

These are ten of the analyst calls we have seen in the early hours of trading this Monday morning:

  • Alcatel-Lucent (NYSE: ALU) Raised to Neutral from Underperform at Merrill Lynch.
  • Atheros Communications (NASDAQ: ATHR) Raised to Buy from Neutral at Piper Jaffray.
  • Huntsman (NYSE: HUN) raised to Hold from Underperform at Jefferies & Co
  • Level 3 Communications (NASSDAQ: LVLT) Cut to Sell from Hold at Citigroup.
  • Mid-America Apartment (NYSE: MAA) raised to Outperform at Robert W. Baird.
  • Real Goods Solar (NASDAQ: RSOL) started as Perform at Oppenheimer.
  • Teradyne (NYSE: TER) Raised to Buy from Neutral at Piper Jaffray.
  • Teva Pharmaceuticals (NASDAQ: TEVA) raised to Overweight at HSBC.
  • Third Wave (NASDAQ: TWTI) Cut to Neutral at Piper Jaffray.
  • Whole Foods Market (NASDAQ: WFMI) Cut to Neutral from Buy at UBS.

Jon C. Ogg
June 30, 2008

Posted on: June 30, 2008 – 6:04 am in Analyst Calls, , , , , , , , , ,

Detroit Drowns The UAW

The UAW’s members have become prisoners of the economic war, used now as galley slaves rowing a fleet of doomed ships of into the hellish center of an oil-crazed war between OPEC and the US dollar. All of them will drown shackled to their ships.

It was supposed to be different. The union cut a deal to save some jobs and take control of its own pension and retirement packages. A part of the consideration meant to fund those pools was to come in the form of car company stock.

Now, the industry is falling apart, and the UAW has no chance to get out.

Car expert Edmund.com expects domestic sales to drop 17% in June. According to MarketWatch, Edmunds forecasts "that Chrysler — the automaker most reliant on truck sales — will take the hardest hit, down 31.2%. Ford and GM are both expected to post 25% declines."

Auto executives at the companies formally known as the Big Three say they could not have seen the oil crisis coming. They believed they are absolved because the world has changed so fast.

Detroit forgot the lessons of 1973 and the oil embargo. They decided not to follow their Japanese competition and have lines of cars which got good gas mileage. Instead, they took the quick buck for a few years and lived to regret it.

The UAW cannot escape responsibility either. They were a sea lamprey attached to the big car companies, living off the success of their hosts. They showed no alarm when Detroit moved almost its entire production cycle to SUVs and pick-ups.

The top auto executives will not lose their jobs, but the workers on the assembly line will.

Douglas A.McIntyre

Posted on: June 30, 2008 – 5:52 am in Autos

The Buffoons In The Auction Rate Markets Look For Excuses

All of the corporate CFOs and treasurers who bought auction-rate securities from the salesman from their investment banks need a scapegoat. When the credit crisis hit, the financial firms which had kept the market liquid since 1985 walked out. The banks would hold some of the securities between auctions to keep the market trading. With huge losses hitting their P&Ls, the risk was not worth the commissions they earned in the auction-rate market.

When the market dried up, auditors made the CFOs write-down the value of the securities.

A new study indicates that most corporate financial chiefs thought that the value of the securities would be protected if the market unraveled. According to the FT, "More than 85 per cent of companies that invested in the collapsed market for auction-rate securities thought Wall Street banks would provide support during crises." The research was done by the Association for Financial Professionals.

CFOs have themselves to blame. If their boards are troubled by the losses their companies have taken, they have no reason to turn to the banks that marketed the securities.

One of the definitions of a sucker is someone who does not read the fine print. There was nothing in auction-rate contracts which said that the value of the paper would be protected if the market dissolved.

It was just a mad wish by people who thought they could make a little extra money and not take risk in the process.

Douglas A. McIntyre

Posted on: June 30, 2008 – 5:34 am in Uncategorized

Citigroup’s New Bonus Structure: What Happened To “Greed Is Good”

Citigroup (C) has decided to change its bonus structure so that senior management will be paid on the results of the entire bank instead of the success of their individual operations. It will lump the "all stars" in with the mediocre and cause the kind of executive revolt that Citi can ill afford.

According to the FT, the big money center bank "is planning to overhaul its bonus system for hundreds of top managers in an effort to increase co-operation and minimise in-fighting among the disparate parts of the sprawling financial services conglomerate."

The program will undermine the key element to what makes Wall St. a great money machine. Groups of bankers who do well contribute huge sums to their firm’s earnings. They make tens of millions of dollars for doing so, but it is capitalism at its best, a systems which fosters short-sightedness and back-stabbing. But, the system makes money.

The argument against the current pay-for -performance programs is that they cause trouble like the mortgage-backed paper catastrophe. But, that collapse was systemic. Every banker on Wall St thought the investments were golden. Even it they were sharing bonuses with IT department at their firms they would not have seen the carnage coming.

On occasion, the current compensation structure fails to produce results, but likely over the history of the money community it has made a lot of people rich and their employers along with that.

Douglas A. McIntyre

Posted on: June 30, 2008 – 5:17 am in Banking,

China’s Inflation Threat

During the 19th century, the West began a brisk trade relationship with the Chinese though Canton. It has been a good deal for both sides, with a few exceptions like the First Anglo-Chinese War, ever since.

China has now developed a problem which undermines the foundation of what has been its attraction as an exporter for countless decades. Inflation in the country is increasing the costs of its goods. According to The Wall Street Journal, the heart of the problem is that "manufacturers say their profits have dwindled as they pay out more for raw materials and energy." With oil at $140 and inflation in China running at 11%, the situation is likely to get worse.

China’s new inflation problem is a bigger problem for the West. Price increases on a huge number of products have been kept in check because they are made cheaply on the mainland and bought for retail sale everywhere from the US to Germany. A run-up of prices in goods out of China means a run-up in the prices for all of these items in the countries which import them.

A number of economists and retail executives have put forward the thesis that Vietnam and other poor Asia countries can replace China as a source for imports. The trouble is that Vietnam does not have 1.3 billion people and the infrastructure to be a major manufacturing.

China’s inflation is spreading to the West and little can be done about it.

Douglas A. McIntyre

Posted on: June 30, 2008 – 5:03 am in China

The Whining From Drug Companies: The FDA Is Hard On Us

The profit-mongering Big Pharma companies don’t want the FDA to take so long approving their drugs. It cuts into profits and delays their chances of making money on new blockbuster treatments.

According to The Wall Street Journal, the head of Schering-Plough, almost certainly representing the sentiments of his industry expressed profound concern that "an intensifying focus on safety and a diminished tolerance for side effects at the Food and Drug Administration have dramatically lowered the odds that the drugs would make it to market — at least not without a lot of extra time and money."

If many new pharmaceuticals did not cause people to grow extra legs or go batty, the drug companies would have an argument. But, it was only recently that Avandia, a diabetes treatment, was found to increase or cause heart failure in some patients. With a few weeks, the agency warned that the Ortho Evra Birth Control Patch could cause blood clots. These kind of alerts seems to come out of the FDA at least once a month.

Drug companies have to deal with the FDA because their products are "under-researched" before they come to market. That is understandable. Drug companies are in the business of making money. It may be the screening their own products is sometimes secondary to that.

Over at the FDA, dead patients still trump making money.

Douglas A. McIntyre

Posted on: June 30, 2008 – 4:42 am in Pharmaceuticals,

Another Doomed Venture Goes After Apple (AAPL) iTunes

Also-ran multimedia company Real Networks (RNWK) and Viacom (VIA) are going to take another run at Apple (AAPL) iTunes. They have a music download service call Rhapsody. One of the reasons it has done poorly is that songs bought through Rhapsody would not play on the iPod. Depending on who is measuring, the iTunes service has 70% to 85% of the multimedia download market now. Rhapsody subscriber have not been able to play songs on iPods but the new program will change that.

According to Reuters, "Digital music seller Rhapsody is launching a $50 million marketing assault on Apple’s iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless." Verizon has not had much success selling music on its phones and the Yahoo! music store has not been a hit. The new alliance as all the look and feel of losers trying to become winners by banding together.

ITunes is successful because it was married with a hardware device, the iPod, from the day it launched over five years ago. This "installed base" of over 150 million multimedia players gives it a position that is unlikely to be challenged.

Real Networks and Viacom should save their money.

Douglas A. McIntyre

Posted on: June 30, 2008 – 4:26 am in Consumer Electronics, , , , ,

Media Digest 6/30/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Rhapsody, a music service owned by Real Networks (RNWK) and Viacom (VIA) will make a push against Apple (AAPL) iTunes by embracing the iPod as its player.

Reuters writes that the presidential election could delay any Fed action until December.

Reuters reports that China will up jet fuel 15% for its local carriers.

The Wall Street Journal reports that large tech companies like Verizon (VZ) and Google (GOOG) are buying patents in their industries to prevent them from being owned by companies which could ask for license fees.

The Wall Street Journal reports that drug companies say that the FDA’s long approval process is hurting their businesses.

The Wall Street Journal writes that flooding in the Midwest could push some insurance companies to losses in Q2.

The Wall Street Journal writes that US airline may have to take foreign investments.

The Wall Street Journal writes that China’s export strength could be hurt by inflation in the country.

The New York Times writes that food hoarding by some countries is pushing food prices higher.

The New York Times reports that Qualcomm (QCOM) is launching a new chip which will compete with Intel (INTC)

The FT writes that Citigroup (C) will change its bonus structure to one which encourages executives to improve earnings for the whole company and not just their divisions.

The FT writes that a new study show that when companies bought auction rate securities they believed that the banks who marketed them would support their value if the market turned down.

Douglas A. McIntyre

Posted on: June 30, 2008 – 2:49 am in Uncategorized, , , , , , , ,

Asia Market 6/30/2008 (DCM)(SNP)(CN)

Markets in Asia were mostly lower.

The Nikkei fell.5% to 13,481. Dentsu was down 2.2% to 225000. Docomo (DCM) was up 2% to 156000.

The Hang Seng was up .5% to 23,157. China Netcom (CN) was up 3% to 21.60. China Petroleum (SNP) was down 1% to 7.27 CNOOC was up 3.4% to 13.54.

The Shanghai Composite was down .5% to 2,726.

Data from Reuters

Douglas A. McIntyre

Posted on: June 30, 2008 – 2:29 am in International Markets, , ,