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News That Moved the Market
Citi Takes $18 Billion Writedown. Citigroup (C, -7.3%) posted a net loss of $9.83 billion and slashed its dividend by 41%. The bank also announced it would sell $14.5 billion in preferred stock to investors. New CEO Vikram Pandit let go of 4,200 employees and said more cuts were ahead. Investors were hoping the dividend would remain untouched and more plans to reduce costs were announced.
December Retail Sales Disappoints. The Commerce Department reported retail sales fell 0.4%, the first decline in six months. Excluding autos and gas, sales dropped 0.2%. Economists forecasted total sales to come in flat.
Core PPI Grows as Expected. The Labor Department said the producer price index fell 0.1%, while core PPI, which excludes food and energy, grew 0.2%. For both the PPI and core PPI, economists expected a gain of 0.2%. "Overall this was a benign report, suggesting little inflationary pressure either at present or down the road," Ried Thunberg ICAP said in a note.
Williams-Sonoma Sees Slowdown. Retailer Williams-Sonoma (WSM, -9.9%) reported weak holiday traffic and provided a cautious outlook for the year. The company pulled back its fourth-quarter guidance, and said same-store sales for the quarter will come in down 1.5% to flat after previously expecting an increase.
Macworld 2008 Announcements. Steve Jobs, CEO of Apple Inc. (AAPL, -5.5%), spoke at the Macworld Expo and said Apple will lower the price of Apple TV to $229 and will introduce a movie rental service through iTunes among other news. Blockbuster (BBI, -16.7%) and Neflix (NFLX, -3.2%) fell on the announcement. For more info, check out CNET's blog from the show.
State Street's Profits Fall. State Street Corp. (STT, -5.9%) reported a 28% drop on earnings and said its 2008 growth will be at the low end of its previous forecasts. The company also set aside $618 million for legal costs; it faces three class-action lawsuits from investors who are claiming the money manager made improper investments in subprime related assets.
J.P. Morgan (JPM) Earnings
Wells Fargo (WFC) Earnings
8:30 AM: CPI
9:00 AM: Net Foreign Purchases
9:15 AM: Industrial Production
9:15 AM: Capacity Utilization
10:30 AM: Crude Inventories
2:00 PM: Fed's Beige Book