Wall Street Breakfast

by: SA Editors
SA Editors
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.


Hovnanian Sells 2,100 Homes in Three Days

Hovnanian Enterprises announced Monday that its "Deal of the Century" three-day sales promotion led to 2,100 home sales, beating their own expectations. The sales included about 1,700 contracts and about 400 sales deposits. CEO Ara Hovnanian: "The high level of traffic we saw in our sales offices and models over the weekend and over the past several weeks convinces us that there are interested buyers in the market today." Vicki Bryan, senior analyst at Gimme Credit noted, "Even if one third of those sales cancel, in line with industry and Hovnanian trends over the past couple of quarters, Hovnanian may be on track in just one weekend to meet 39% of its fiscal fourth quarter estimate of 3,600 homes sold, and there are six weeks left in the quarter." In New Jersey and New York, buyers saved up to $149,600. Analysts were watching the outcome of the event, wondering if announced price specials are what it will take to bring nervous buyers out. Hovnanian shares rose 3.0% to $11.33 on Monday, and are up 13.0% over the last two days of trading.
Sources: Press Release, Bloomberg, Wall Street Journal
Commentary: Hovnanian Posts Fourth Loss in a Row, Meets ExpectationsHovnanian Enterprises: 'The Housing Market Has Bottomed'
Stocks/ETFs to watch:HOV. Competitors: DHI, LEN. ETFs: XHB, ITB
Earnings call transcript: Hovnanian Enterprises F3Q07 (Qtr End 7/31/07)

Bondholders Feel Pinch As Yields Rise - Bloomberg

Bondholders who spent the summer shunning the debt of creditworthy borrowers that provided less-than-stratospheric yields are now paying a price: bonds they already own are dropping in value after companies were forced to use high yielding bonds to coax buyers into the market. Bloomberg reports that American companies have sold approximately $144 billion of bonds since early August with yield premiums that have tacked on up to $400 million in added annual interest. Railroad company CSX Corp., DIY retailer Lowe's and IBM are among at least 10 companies that issued debt with yield premiums about 30 basis points above their existing debt, it says. CSX's $300 million of 5.6% notes due in 2017 fell $0.02 after the company sold $1 billion of debentures at a higher premium. "How much longer are you going to put up with that?" asked fixed-income asset manager James Lyman. Tantalizing yields helped companies sell a record $92 billion of investment-grade debt in August after selling less than $40 billion in July, the lowest in over two years. "These things look attractive when they come, but when everything else you own gets pushed wider it's frustrating," said Thomas Houghton, a corporate bond manager at Advantus Capital Management.
Sources: Bloomberg
Commentary: Corporate/Treasuries Risk Premia UpdateHigh Yield Spreads Reach Multi-Year High
Stocks/ETFs to watch: SHY, IEF, TLT


Adobe Coasts Past Estimates

Shares of desktop publishing software maker Adobe Systems climbed Monday in extended trading after the company said its Q3 net income more than doubled to $205.2 million ($0.34/share), up from $94.4 million $0.16/share a year ago, on strong sales of Creative Suite 3 and Adobe Acrobat. Excluding items, EPS were $0.45. Revenue jumped 41% to a record $851.7 million from $602.2 million. Analysts had predicted a more modest $0.40/share on revenue of $789.3 million. Adobe said it expects Q4 earnings of $0.35 to $0.37 cents a share on revenue of $860-890 million; analysts had been forecasting $0.32/share on revenue of $840 million. In the quarter, Adobe released German and French versions of Creative Suite 3, helping to drive its sales. "The international side of CS3 really kicked into high gear," analyst Gene Munster told Bloomberg. "The bigger surprise was the strength of current sales, but the forecast was a nice plus, too." CEO Bruce Chizen was upbeat: "Our record results were driven by outstanding Creative Suite 3 adoption and continued Acrobat momentum," he said in a press release (see full earnings call transcript later). Shares were up 4.2% to $44.85 in AH trading.
Sources: Press release, MarketWatch, Bloomberg
Commentary: Why I'm Placing a Small Bet on AdobeAdobe Starts To Focus On “Enterprise Solutions”Is IBM Really Mulling a Bid for Adobe?
Stocks/ETFs to watch: ADBE
Earnings call transcript: Adobe F2Q07

Apple to Up iPhone Production - TheStreet

An unidentified source has told TheStreet.com that Apple will boost production of the iPhone following a recent price cut. Apple had originally planned to manufacture 1.7 million iPhones in the quarter ending in September and 1.54 million in fiscal Q1, ending December 31. According to the source, "That 1.54 million number is going up." On September 5, Apple surprised the marketplace by announcing a sharp price cut on the device, prompting speculation over weaker-than-expected sales. Then last week, Apple said it had sold its millionth iPhone, ahead of official forecasts, but later than the company expected. Apple revived flagging interest by pulling the 4-gigabyte iPhone from the market and slashing the price of the 8-gigabyte model 33% to $399. UBS analyst Ben Reitzes raised his iPhone sales estimate to approximately 3 million for the year from 2.3 million. "We believe that demand was stimulated almost immediately for the iPhone following the price cut...and that international partnerships should help sales next year," he wrote. Apple is expected to announce European telecom partners for the iPhone on Tuesday.
Sources: TheStreet.com
Commentary: IPhone Sales Hit 1M; Moving Toward 3GWhy a Million iPhone Sales In 74 Days Is Better Than You ThinkIs Apple's Play to Grab a Bigger Market Share Working?
Stocks/ETFs to watch: AAPL. Competitors: MOT, NOK, RIMM, PALM. ETFs: IAH, OTR, QQQQ, QLD
Earnings call transcript: Apple F3Q07

AMD To Launch Triple-Core CPU In Early 2008

Single-core, double-core... quad-core. Until now, chipmakers have focused on doubling the processing power of each subsequent line of chips. On Monday, Advanced Micro Devices announced it was taking a step back and releasing "AMD Phenom triple-core processors, expected to be the world’s first PC processors to integrate three computational cores on a single die of silicon." The triple-core processor is aimed at capturing that segment of the CPU market not quite ready to take the leap from two to four computational cores. According to VP and General Manager Greg White, "AMD is in a unique position to enable a wider range of premium desktop solutions, providing a smarter choice for customers and end users." The decision to release a triple-core processor, expected in early 2008, is largely a result of the inability of larger rival Intel to get its quad-core CPU to catch on. Since its launch last November, Intel's quad-core has only taken two percent of the CPU market, versus 12-15% for double-core CPUs. According to Nathan Brookwood of Insight64, "If the choice is say $200 for a dual-core [processor] and $400 for a quad-core, then if you can get $300 for a triple-core, it's like free money." AMD's latest announcement comes on the heels of its introduction of its 'Barcelona' quad-core release last week (full story). AMD's shares are down 37% in 2007 as they have lost market share to rival Intel, whose shares are up nearly 23% this year.
Sources: Press Release, Financial Times, Reuters, TheStreet.com, Dow Jones Newswires
Commentary: AMD Hopes New CPU Will Chip Away at Intel DominanceAre AMD Doubters Right This Time?AMD CEO Ruiz Faces Down His 'Unmentionable' Rival
Stocks/ETFs to watch: AMD, INTC. ETFs: XSD, SMH, USD.
Earnings call transcript: AMD Q2 2007Intel Q2 2007

VMware Doubles Earnings, But Misses Estimates

VMware shares dropped Monday after announcing disappointing second quarter earnings. In a SEC filing, VMware said revenues came in at $296.8 million, up 90% from a year ago, but missing analyst expectations of $297 million. VMware earned $34.2 million ($0.10/share), nearly doubling earnings from last year, but missing analyst forecasts of $49.40 million ($0.12/share). The company didn't give a Q3 forecast, but it did say it expects outstanding shares to rise from 370 million in the Q3 to 400 million in Q4, which could impact EPS. Sales in its license revenue business rose to $204 million vs. $113.3 million last year, while services sales more than doubled to $92.8 million. The company held $280 million in cash & equivalents at the end of the quarter, vs. $94.6 million a year ago. The company is still 90% owned by EMC. VMware's stock, which has sizzled since it August IPO, dropped 5.4% to $73.70 Monday.
Sources: SEC filing (.pdf), CNN, Bloomberg, Dow Jones
Commentary: EMC Corp.'s a Good Way To Play VMwareEMC to Launch Data Deduplication for VMware; VMware Shares Surge
Stocks/ETFs to watch: VMW, EMC. Competitors: MSFT, SYMC. ETFs: IGM, IYW

Deutsche Telekom to Buy SunCom for $2.4B

Deutsche Telekom AG subsidiary T-Mobile USA has agreed to buy SunCom Wireless for $2.4 billion, or $27 per share, representing a 23% premium over its Friday close of $22. The $2.4B takeover price includes assumption of $800M in debt. SunCom has more than 1.1 million wireless subscribers in the southeastern U.S., Puerto Rico and the U.S. Virgin Islands. "The strategic fit of the SunCom operations will make this a near-perfect acquisition. It will round out our domestic footprint, allowing us to serve 98 of the top 100 markets, and will significantly benefit our financial position by reducing roaming expense," said T-Mobile USA CEO Robert Dotson. T-Mobile USA has 27 million subscribers. Cost savings are expected to reach about $1B, primarily from roaming fees and operating costs. Analysts say what appears to be a high acquisition price is justified by the synergies. The deal is expected to close in H1 2008, subject to SunCom shareholder approval and other customary closing conditions. Shares of SunCom Wireless surged 16.6% to $25.65 on Monday. Deutsche Telekom ADRs were unchanged at $19.02.
Sources: Press release, Bloomberg, MarketWatch
Commentary: Leap Wireless Rejects MetroPCS BidDeutsche Telekom Stock Rises On German iPhone RumorsCan Google Convince Wireless Carriers That It Is A Partner And Not A Foe?
Stocks/ETFs to watch: TPC, DT
Earnings call transcript: Deutsche Telekom AG Q2 2007

iPhone 3G Slated for Early 2008 - TheStreet

Apple will begin selling a new generation of iPhones -- faster third-generation, or 3G models -- sometime in early 2008, TheStreet.com reported on its website. People familiar with the production plans say the new models' performance will trump that of present iPhones, which are bottlenecked by AT&T's notoriously slow 2.5G EDGE network. The news, if true, may disappoint those who had hoped a 3G model might roll out before the holiday season (full story). Sources say the new iPhone will use Broadcom's Global Locate chip to integrate GPS on the phone. The chips use a combination of satellite and cellular antenna signals to pinpoint location, improving reception indoors and in places out of direct satellite view. The sources also say TriQuint will supply powerful amplifiers for the new phone. Earlier this month, there were rumors of a 3G capable iPhone planned for Europe after an ad published by MacBidouille and purportedly leaked from T-Mobile Germany suggested Apple would launch such a phone on November 12 (full story).
Sources: TheStreet.com
Commentary: Possible Delay in Launch of Faster iPhoneNo "Cold Christmas" For Apple
Stocks/ETFs to watch: AAPL, BRCM, TQNT


Yahoo! Beefs Up Email with $350M Zimbra Acquisition

Yahoo! announced it has agreed to acquire Zimbra, maker of on/off-line open source email software, for $350 million in cash. Zimbra will expand Yahoo!'s presence in universities, SMEs and ISPs. Zimbra email features AJAX-based "Zimlets," which allow interactive mashup services within email, such as schedule reminders, flight updates and package tracking. Zimbra, with 9 million paying subscribers, was founded in Dec. 2003, and since then has raised $30.5M in VC financing. Yahoo! Mail is in its tenth year and had 250M users worldwide in July. "This was a very, very smart acquisition. In one quick move Yahoo is now in the race with Google for the next generation online/offline office suite. I would not be surprised to see them pick up Zoho next," said Michael Arrington, editor of TechCrunch. Separately, Google is set to release its Web-based presentation application Tuesday, a component of its growing Apps suite, and a new competitor against Microsoft's PowerPoint. Shares of Yahoo! gained 0.9% to $24.95 on Monday, Google lost 0.7% to $525.30 and Microsoft fell 1.1% to $28.73.
Sources: Press release, BetaNews, MarketWatch, Wall Street Journal
Commentary: Something's Going On At Yahoo - Expecting More UpsideYahoo! Secures Deal with Social Networking Site BeboAugust Online Search Market Share: Back to Status Quo
Stocks/ETFs to watch: YHOO, GOOG, MSFT
Earnings call transcript: Yahoo! Q2 2007, Google Q2 2007, Microsoft F4Q07

AOL Presents New Ad Unit; Moving HQ to NY

On Monday, Internet portal AOL unveiled Program A, a new ad unit integrating several recently acquired properties with Advertising.com, AOL's direct-response ad network and the largest such network on the Internet. Program A will give advertisers new options, including the placement of ads on sites other than AOL's. The unit consolidates three acquisitions: Tacoda, a behavioral targeting company; mobile ad firm Third Screen Media; and video ad company Lightningcast. AOL also announced it is moving its corporate HQ from Virginia to New York, the hub of the ad industry. "By putting our headquarters there, we're sending a clear signal to the market that AOL intends to lead in this space," said CEO Randy Falco. Last year, AOL made a strategic shift away from subscriber-based business toward ad-supported business. As the online ad market grows, Internet heavyweights have aggressively pursued third-party networks. Red Herring notes that Yahoo has relationships with eBay, Comcast, and a consortium of newspaper sites; Microsoft recently bought aQuantive; and "Google dominates third-party text ads with its AdWords platform." AOL is counting on advertising to counter plummeting subscription revenues. "I don't think portals are going to die," said Falco. "I just don't think they'll have the heft they once had in the marketplace." Shares of Time Warner, which owns AOL, fell 2.15% Monday to close at $18.24.
Sources: TheStreet.com, Dealscape, AP, Red Herring, AdWeek
Commentary: AOL's Slowing Ad Revenues a 'Hiccup', Still Embracing Advertising ModelCan AOL Take Behavioral Targeting from Concept to Reality?UBS Calls AOL's Acquisition Of Ad Firm Tacoda "A Coup”
Stocks/ETFs to watch: TWX. Competitors: YHOO, ELNK, MSFT, GOOG. ETFs: HHH, PKW, VCR
Earnings call transcript: Time Warner Q2 2007

InfoSpace Soars on $225M Switchboard.com Sale to Idearc

Shares of InfoSpace Inc. surged 31% to $17.38 Monday after the company agreed to sell Switchboard.com and other on-line directory assets to Idearc Inc. for $225M in cash. The sale, part of the company's ongoing restructuring, was expected to boost InfoSpace's cash balance above $400M; it plans to distribute the net proceeds from the sale to shareholders as a special dividend. "What we did here was pick an asset that really the market was not valuing at all and turned it into real cash," said InfoSpace CEO Jim Voelker. Idearc, the operator of Superpages.com and publisher of the Verizon Yellow Pages, will finance the deal with a mix of cash and borrowings under its existing revolving credit facility. Idearc expects the acquisition to be cash-flow accretive in the first year, to have no impact on its dividend policy and not have a material impact on its pro-forma leverage ratio. According to comScore's Media Matrix, Superpages.com's network had 21.3M unique visitors in August while InfoSpace Directories and Resources had 7.7M unique visitors. Completion of the deal is expected by year-end subject to, among other things, regulatory approvals.
Sources: Press release, Reuters
Commentary: InfoSpace's Slide DownInfoSpace Agrees to Sandell Asset's Suggestions, Shares Lag on Guidance
Stocks/ETFs to watch: INSP, IAR. Competitors: GOOG, YHOO, LOOK. ETFs: HHH, FDN
Earnings call transcript: InfoSpace Q2 2007


NY Times Shutters TimesSelect

The New York Times has announced it will shut down TimesSelect as of midnight Tuesday. The paper started the program two years ago. TimesSelect charged readers $49.95 per year or $7.95 per month for access to 23 news and opinion columnists' work and to the paper's archives. In addition to removing the columnist firewall, the Times is also opening access to its archives between 1987 and the present and between 1851 and 1922. The paper claims TimesSelect met expectations and generated about $10 million a year in revenue. About 227,000 subscribers of a total 787,000 bought the service. However, "our projections for growth on that paid subscriber base were low, compared to the growth of online advertising," said Vivian L. Schiller, SVP and general manager of NYTimes.com. "What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others." The Wall Street Journal is now the only major U.S. newspaper to charge for access to most of its online content. Separately, the shares of the Times, Lee Enterprises and McClatchy Co. hit more than ten-year lows Monday after Merrill Lynch cut its ratings on all three to "Sell." "The housing meltdown is likely to continue to depress newspaper advertising," wrote Merrill Lynch analyst Karl Choi.
Sources: New York Times I, II, Reuters, Forbes, Dow Jones, paidContent.org, SlashDot, AP, Bloomberg
Commentary: If New York Times Scraps TimesSelect, What Then?!New York Times Might Cancel TimesSelect -- ReportFree the New York Times's Archives!
Stocks/ETFs to watch: NYT. Competitors: DJ, GCI, NWS, WPO, MNI, LEE. ETFs: PBS, PEJ
Earnings call transcript: The New York Times Q1 2007


Contract Loss Smacks iRobot

Shares of iRobot Corp. skidded 23% to $18.27 Monday after the maker of bomb detectors and the Roomba cleaning robot lost out on a Defense Department contract to supply more than 3,000 bomb-detecting robots to closely held Robotic FX Inc. "This is a significant setback for iRobot," said JPMorgan analyst Paul Coster, who sliced his 2008 earnings estimate 12% to $0.30/share and revenue forecast 2.4% to $285M on the news. "The loss of the contract to a startup suggests neither IP nor economies of scale are barriers to entry, and iRobot's sales and marketing execution may be flawed," he added. IRobot had been considered the favorite for the deal and shares had run up some 35% since early August in anticipation of the $279.9M, five-year contract award. Some analysts, however, said the pullback presented an opportunity by taking some of the risk off the table as the company prepares to introduce two new products. On August 20, iRobot announced that it had filed two lawsuits against Robotic FX and its founder Jameel Ahed (a former iRobot employee) seeking damages and a permanent injunction against sales of that company's "Negotiator," claiming it infringed on patents covering iRobot's PackBot.
Sources: Press release, Bloomberg, The Street.com
Commentary: iRobot Jumps As Pentagon Stocks Up On Robots iRobot's R&D Investments Could Go A Long Way
Stocks/ETFs to watch: IRBT. Competitors: LMT, GD


Monsanto Jumps on Increased Outlook

Monsanto shares closed up 2.6% to $75.44 Monday after the biotech company boosted its estimate for ongoing earnings from $1.75-1.80/share to $2 on better-than-expected pricing on its Round Up herbicides. The company also changed its 2007 free cash flow estimate to a use of $60 million, vs. a previous view of a use of $200 million to $250 million. "By all measures, Monsanto has achieved extraordinary performance across our business in what was an extraordinary year for agriculture," CEO Hugh Grant said in a statement. "Our performance this year serves as a springboard for our future success, setting us up for expanded growth opportunities not just for 2008, but through the turn of the decade."
Sources: Press release, MarketWatch
Commentary: Monsanto Profit Up 23% on Corn-Based Ethanol DemandMonsanto's Growing TroublesMonsanto Reports and Delivers
Stocks/ETFs to watch: MON


E*Trade Restructures, Lowers Outlook on Loan Losses

E*Trade Financial late Monday slashed its 2008 earnings forecast, citing bad loans related to the U.S. housing market crisis and charges related to a restructuring that will see the on-line brokerage exit the wholesale mortgage business and all "non-core businesses that lack a direct and strategic connection with retail customers." The reorganization also will include a restructuring of its balance sheet so the company is more reliant on cash and assets. Charge-offs of $95M for loan losses and an increased provision expense of $245M are expected in the second half, as well as an estimated $32M in restructuring-related charges. Against that backdrop, E*Trade said it now sees 2008 earnings of $1.05-$1.15/share, down from its previous outlook for earnings of between $1.53 and $1.67/share. Analysts polled by Thomson Financial had expected earnings of $1.60/share, on average. "We want to get this issue behind us and put the focus solely back on our core retail customer," said E*Trade CEO Mitch Caplan. Rival Ameritrade, with whom E*Trade reportedly has held merger talks, has expressed concerns about E*Trade's reliance on the mortgage business. As of the end of August, E*Trade said 2% of its $17B mortgage portfolio was composed of delinquent loans, while 2.8% of its $12.6B home-equity portfolio was at increased risk. E*Trade said its funding sources were "sound" and that it was "well capitalized." Shares slid 5.8% to $13.38 AH following the announcement.
Sources: Press release, Wall Street Journal, Bloomberg
Commentary: E*Trade Plummets Over Mortgage Concerns
Stocks/ETFs to watch: ETFC. Competitors: AMTD, SCHW. ETFs: KCE
Earnings call transcript: E*TRADE Financial Q2 2007

Bank of America: Volatile Markets Will Hurt Q3 Results

Bank of America CFO Joe Price said in a speech Monday the credit market turmoil of the last couple months will have a "meaningful impact" on the bank's third quarter results. "These are unprecedented times. The flight to quality has had an impact on any number of liquidity (products)." As the large investment banks begin reporting their last quarter results this week, investors will get to inspect how they have held up in the recent, volatile economic conditions. Price said his bank's "losses in mortgages remain well below industry average." He also commented of the strength of the consumer, saying his bank was not seeing "any broad signs of a slowdown in consumer spending." He noted that there were "pockets of stress" such as small declines in recreational spending and food expenditure, but did not think they were significantly dragging the consumer down. Bank of America finished Monday's session down 0.88% to $49.51.
Sources: Wall Street Journal, Bloomberg, MarketWatch
Commentary: ABN Amro Board Calls RBS Bid Superior, But Won't Back ItWhen Flying to Quality, Be "In the Bank"
Stocks/ETFs to watch: BAC. Competitors: GS, LEH, WB. ETFs: RKH, XLF
Earnings call transcript: Bank of America Q2 2007

NovaStar Cancels Dividend, to Lose REIT Status

NovaStar Financial said it will not declare a planned dividend on its common shares, thereby forfeiting its status as a real estate investment trust under IRS regulations. It said it could not meet the distribution requirement of about $157M of taxable 2006 income due to its inability to complete a planned rights offering, liquidity demands, and a substantial decline in market capitalization over the last few months. "Clearly, we did not anticipate the drop in market value or the level of demands on liquidity caused by the market turmoil this summer. Based on these events, we now believe canceling the previously planned dividend is the only reasonable and prudent course of action," said CEO Scott Hartman. Given the loss of REIT status, which will be retroactive to Jan. 1, 2006, NovaStar said there would be a "significant adverse impact" on third-quarter financial results, including an expense for the 2006 tax provision. Nevertheless, the mortgage lender said it expected an anticipated refund from tax losses this year would offset the new tax liability. NovaStar said it also was discussing its listing status with the New York Stock Exchange. Shares plumetted 18.7% to $6.70 in extended trading following the announcement; they are down 92.3% YTD.
Sources: Press release, Bloomberg, Dow Jones Newswires
Commentary: NovaStar Cancels Preferred Offering, Cuts Jobs NovaStar's Dividend WoesNovastar Financial Up 22%: Why Doesn't Anyone Care?
Stocks/ETFs to watch: NFI. Competitors: CFC, WFC. ETFs: XLF, PGF, IYF

Financing Pulled in PHH Buyout

PHH shares dropped Monday after questions arose whether Blackstone could finance the planned buyout of the mortgage lender and vehicle-fleet manager. The agreed upon deal has GE purchasing PHH, and then selling its mortgage unit to Blackstone (full story). However, if Blackstone cannot finance the deal, GE will back out as well. The Blackstone entity which was to buy PHH sent a letter to GE saying that JP Morgan and Lehman Brothers had "revised interpretations as to the availability of debt financing under the debt commitment letter." The "revision" could lead to a "shortfall of $750 in available debt financing." PHH released a statement saying they were "not optimistic at this time" that the $1.8 billion deal would be successful. PHH shares sank 15% to $24.24 on Monday.
Sources: Press Release, Bloomberg, Reuters
Commentary: PHH Corporation: Pennant Capital Opposes Sale, Outlines Omissions from Preliminary ProxyPrivate Equity Financing: Long-Term vs. Short-Term
Stocks/ETFs to watch: PHH, BX, GE


Northern Rock's Deposits Guaranteed by U.K. Government; Shares Rise

British Chancellor of the Exchequer Alistair Darling said Monday the British government would guarantee deposits at mortgage bank Northern Rock as alarmed customers rushed to withdraw their money. Northern Rock, identified by Bloomberg as the most vulnerable British bank to the credit crunch since capital markets account for 73% of its funding, sought emergency funding from the British central bank late last Thursday. On Friday, long lines of depositors materialized outside the bank's branches; JPMorgan Chase estimates that £2 billion ($4 billion), or about 8% of the bank's total deposits, have been withdrawn since that day. "We will take the necessary action to ensure that people's deposits within Northern Rock bank are safe and guaranteed," Darling said. "That's unequivocal." Northern Rock's shares tanked 35% to 282.75 pence ($5.67) Monday following a 31% drop Friday, but rose 9.6% as of 9:10 a.m. Tuesday on news of the bailout. Rival mortgage lender Alliance & Leicester shed 31.3% Monday, its steepest drop in a decade, but regained 26% Tuesday morning. Investor anxiety about the health of the banking sector appears to be rippling into Europe: shares of Societe Generale, BNP Paribas, Santander and BBVA were all off about 2% Monday.
Sources: Business Week, Wall Street Journal, International Business Times, Bloomberg I, II, MarketWatch
Commentary: Northern Rock Depositors PanicUK Bank Run: It Could Happen HereIs Anyone Immune to the Ripple Effect of the Unfolding Financial Crisis?
Stocks/ETFs to watch: OTC:NHRKF. ETFs: PJB, KBE


U.S. Market: The FOMC Will Cut 25 Basis Points - Not 50
Housing: U.S. Real Estate Boom Modest Compared To Europe
Long Idea: Diamond Hill: The Next 100-Bagger?
Short Idea: Alcatel-Lucent: Excercising The Power Of No
Internet: US Ad Sending Slips
Telecom: Ceragon Networks: Buy on the Drop
Networking: Alcatel-Lucent: Excercising The Power Of No
Hardware: Dell's Desktop Linux Strategy: So Far, So Good
Chips: Are AMD Doubters Right This Time?
Software: Adobe COO: "Our Strategy Is Working"
Gadgets: After a 314% Gain It's Time to Sell RIM
Media: Liberty Global Teams Up With Sling Media
Healthcare: Time to Buy LCA-Vision?
Biotech: Lilly Blossoming in China
Retail: Texas Roadhouse Coming Up Short
Transport: CarMax Earnings Preview
Gold: What Will Today's Rate Cut Bring to Gold?
Energy: Electro Energy: Are These Batteries Drained?
Financial: UK Bank Run: It Could Happen Here
Asia: Try Chindia Instead of USA
ETFs: Barclays' Muni Bond ETF Has the Edge For Now
Hedge Funds: Three Cheers For the Credit Crunch?
Small-Caps: Time to Simplify My Portfolio
IPO Analysis: Visa IPO Around The Corner
Sound Money: Buy Property Insurance
Jim Cramer: Latest stock picks
Transcripts: MDS Inc. F3Q07UTI Worldwide F2Q08

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