Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:
AHEAD OF THE TAPE: Miller's Crossing [Wall Street Journal]
Summary: Legg Mason announced two weeks ago that this quarter's earnings, which will be announced today, will be below analyst estimates. This is the third consecutive quarter of such results. The stock dropped 17% as a result of the bad news. Many on the Street suspect that Bill Miller, a top hedge fund manager, could be part of the company's problem. Though he has beaten the S&P 500 for 15 years in a row, his Value Trust fund has fallen a almost one percenage point this year through Monday, in contrast to the S&P which has already yielded 12% in returns. The Value Trust fund underperformance has been pinned on bad calls on stocks such as Amazon.com, Verizon and Nextel. Massive investor pull-out could be a response to the dismal performance.
Related links: Legg Mason: Recent Drop Invites a Look • TheStreet.com: Legg Mason Woes Its Own • BusinessWeek Online: A Legg Up Soon?
Potentially impacted stocks and ETFs: Stocks: Legg Mason (NYSE:LM), Citigroup (NYSE:C), Lehman Brothers Holdings (LEH), Piper Jaffray Companies (NYSE:PJC) • ETFs: iShares Dow Jones US Broker-Dealers (NYSEARCA:IAI)
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