Bloomberg is reporting that Google (GOOG) will delay its deal to sell search advertising for Yahoo! (YHOO) "until U.S. regulators can wrap up an investigation into the deal." Since The Justice Department is handling the work, that could be some time.
The news also begs the question of whether Google will make a similar concession to EU antitrust authorities and those in Canada who are also looking over the arrangement with Yahoo!.
The IPO market has been dead as a doornail. But next week we have a bank IPO coming to market. It is amazing that a bank would dare come to market in this environment. First Savings Financial Group, Inc. is the proposed holding company for First Savings Bank, F.S.B. It has now received final regulatory approval to close its initial public offering. This bank is a federally chartered savings bank headquartered in Clarksville, Indiana.
Idearc Inc (IAR) No major news. Off to $.78 from 52-week high of $32.52.
First Industrial Realty (FR) Cuts guidance and plunges to $18.32 from 52-week high of $42.71.
Officemax (OMX) Office supply stocks hit by bad economy. Drops to $7.04 from 52-week high of $34.64.
Las Vegas Sands (LVS) Analyst cuts price target. Sells down to $22.87 from 52-week high of $148.76.
MGM Mirage (MGM) Trouble in Macau hurts most stocks in sector. And, who has money to gamble? Dips to $20.28 from 52-week high of $100.50.
Yrc Worldwide (YRCW) Truck company borrows from credit line. Down to $7.44 from 52-week high of $28.83.
Apple (AAPL) Rumors about Jobs health. Dips to $94.85 from 52-week high of $202.96.
Douglas A. McIntyre
Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK-A) just told CNBC that the bailout plan was "no panacea" but that it will help avoid a total disaster. Whether it will be a big help remains to be seen. He also said it still will be a while before the recession bottoms.
The $700 billion bailout bill passed the House after its failure early this week. The Senate has already approved this new package which contained many more add-ons than the prior bill. The magic number was 218 YES needed to win. Our image to the right was taken when the vote was still going as it appears the final tally was 263 to 171 in favor. There are two issues at stake here. The economy was toast without this package. That is first and foremost. But the economy is still likely going to suffer and enter into a recession. People who bought too much house or that were duped into bad mortgages are still facing foreclosures. Credit card defaults are still rising. Loan loss reserves are increasing. Jobs are still being lost. Manufacturing is slowing. This is still an unfinished chapter in the history books.
Canadian miner Teck Cominco (NYSE:TCK) is changing its name to Teck Resources, and the company intends to build its brand just on the name Teck. The new name takes effect legally in April 2009. In addition, Teck is restructuring its business into five separate units: copper, zinc, coal, gold, and energy.
Last July, Teck agreed to acquire Fording Canadian Coal Trust (NYSE:FDG) for an estimated $13-$14 billion, of which Teck is borrowing $9.8 billion. The most significant piece of the deal is Fording’s 60% interest in the Elk Valley metallurgical coal operation, the world’s second largest producer of hard coking coal for export. Teck already owned a 40% interest in Elk Valley and was the mine operator. The Canadian government approved the deal earlier this week, and the takeover is set to take effect on October 29th.
Citigroup Inc. (NYSE: C) has finally issued a statement on the interruption of its Wachovia Corp. (NYSE: WB) buyout. Citi is saying that Wachovia’s agreement to a transaction with Wells Fargo (NYSE: WFC) is in clear breach of an exclusivity agreement between Citi and Wachovia. As you read through the complaints, you are going to notice that this is going to be a government and private sector fight. It will also become core case study material on public versus private bailout mergers.
Vikram Pandit has been the CEO of Citigroup (C) for ten months. The only thing he has done right is collect $216 million in compensation. Much of that was for the sale of his company Old Lane Partners to the big bank. In June, Old Lane was closed.
Today, Pandit lost out on his purchase of Wachovia (WB). While he was busy elsewhere, Wells Fargo (WFC) stepped in and robbed him.
As Reuters says, "Pandit, who hailed from the investment banking side of the business, firmly put his stamp on Citi’s retail side by taking on stricken Wachovia Corp’s banking assets and sharing the risk with the Federal Deposit Insurance Corporation."
In a matter of days, and after Citi’s stock popped up, the deal was gone. The FDIC may try to undo the Well Fargo deal, but that is far from certain.
The economic data has been coming out poorly all week. But the last report for the week came in line to slightly higher than expectations and is showing that maybe not everything went to hell in a hand basket. The ISN non-Manufacturing for September came in at 50.2 versus the August reading of 50.6. Estimates from Dow Jones showed 50.0 as the consensus. Below are some of the key individual components of ISM we track:
General Growth Properties Inc. (NYSE: GGP) is getting a lift this morning on what many would consider bad news. The REIT has replaced its chief financial officer and suspended its dividend, a day after a report that executives have been selling their stock. Based on yesterday’s near-50% slide, Wall Street is trying to take this in stride.
CFO Bernard Freibaum is out effective immediately and will be replaced by Edmund Hoyt on an interim basis while a search for a permanent replacement is conducted. Hoyt has been the chief accounting officer since 2000.
Another one of 24/7 Wall St. CEO’s that need to go has come to fruition. This morning Finish Line (NASDAQ: FINL) announced a management succession plan to replace co-founder Alan H. Cohen. Unfortunately for shareholders, this is not a full replacement and he will still be involved in the company. Glenn S. Lyon has been named successor to Cohen as CEO with effective December 1. Cohen is going to remain Chairman of the Board of Directors.
Today’s jobs numbers are taking the U.S. deeper and deeper into recession. Technically, the U.S. economic data is not showing a recession, but ask anyone on Main Street or Wall Street about the state of the economy and they will give you people are hurting. Unemployment was 6.1% and non-farm payrolls were -159,000, marking the ninth consecutive month of job losses.
These are some of the top upgrades from Wall Street analysts we are seeing this Friday morning with about two hours to the open.
Jon C. Ogg
October 3, 2008
These are the top analyst downgrade calls we are seeing this Friday morning with two hours to the open:
Jon C. Ogg
October 3, 2008
Wachovia Corp. (NYSE: WB) is now in play as Wells Fargo (NYSE: WFC) has come out with an alternative merger deal in a stock for stock merger offer for all of Wachovia including all banking operations. Wells Fargo has reached an agreement to acquire all of Wachovia Corporation and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.
Ronald McDonald has just had a big meal and is picking his teeth.The stock market is telling him that McDonald’s (MCD) won’t be hurt by the recession. At $62, the shares of the largest fast-food chain are not down much from their 52-week high. Over the last three months, the Dow is off 7% and MCD is up almost 10%.
It does not matter that the fatty food the company sells will kill some customers before they make it to the exit. Where can people get a full meal for under $2?
The cost of a barrel of crude has fallen from $147 this summer to $95. On the abacus that is a drop of 36%. Gas is not down nearly that much and still sells for nearly $4 a gallon in some cities.
The prices of key agricultural commodities are also down by about a third and this has done severe damage to stocks in seed-makers and agricultural-chemical producers. But, the falling prices are not making it to many consumers.
Retailers are not passing their lower cost on to customers. They view the lower prices as an opportunity to make money.
According to Reuters, the House will vote on the bailout bill today.
Reuters reports that JP Morgan (JPM) will not keep the CEO of WaMu.
Reuters reports that John Thain of Merrill Lynch (MER) will head investment banking and wealth management at Bank of America (BAC).
Markets in Asia were sharply lower and Shanghai was closed.
The Nikkei fell 1.9% to 10,938. According to Reuters, Toyota (TM) hit a three-year low and Nissan hit a seven-year low. Kyocera was off over 3%. Canon was down almost 5%.
The Hang Seng dropped 2.4% to 17.767. Petrochina (PTR) fell over 4% and CNOOC was off nearly as much.
Data from Reuters.
Douglas A. McIntyre
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