- Wednesday, the DJIA was down 0.28% and the S&P 500 0.56%. The Nasdaq ticked into positive ground intraday but closed down 0.95%. Crude traded near a four-week low Wednesday but rose in Asian trading Thursday after the IEA said it is maintaining its 2008 demand forecast. Gold fell 2.3% to $882.00 an ounce.
- Mortgage application volume shot up 28.4% last week.
- Consumer prices rose by 4.1% in 2007, their fastest since 1990, led by gasoline and food. Core inflation, which excludes those factors, rose 2.4%.
- The Fed's Beige Book said economic growth slowed in late November and December, with "subdued holiday spending and further weakness in auto sales."
- Homebuilders are cheering up (a little). The homebuilders' housing-market index rose to 19 this month from a downwardly revised 18 in December. A year ago, the index was 35.
- Fed Chairman Ben Bernanke is expected to be "far more circumspect than Greenspan" on specific recommendations concerning the economy when he testifies today before the House Budget Committee.
- Asia: Nikkei up 2.07%, Hang Seng up 2.72%. Both indices swung sharply during the day. Honda (NYSE:HMC) and Sharp (OTCPK:SHCAY) gained 2.9% and 2.4%, respectively. China shares listed in Hong Hong fell 6.6% as large funds scaled back positions. The yen rose against the dollar and the euro after the Fed and the European Central Bank said growth is slowing.
- Europe: FTSE up 0.74%, DAX up 0.74%, CAC up 0.59%. British-French electronics retailer Kesa Electricals gained 7.8%, Belgian supermarket Delhaize (DEG) 4% and books-and-music chain HMV Group 14.95%.
Must-Know News for Thursday
- Ambac reports massive writedown, cuts dividend; shares plunge. The bond insurer (ABK) announced a $3.5 billion writedown, equivalent to almost two-thirds its net worth. It also said it is cutting its dividend by 2/3 and ousting its CEO. Shares tumbled 38.65% to $12.97.
- Florida follows through on threat and suspends Allstate. Kevin McCarty, commissioner of the Florida Office of Insurance Regulation, has suspended Allstate (NYSE:ALL) from writing new policies in the state because of the company's noncompliance with a subpoena. "We're going to hit them where it hurts," he said. The suspension will primarily affect new auto policies.
- Air France-KLM might hold key to Delta-Northwest merger. Air France-KLM (AKH) "could provide strategic or financial backing" in a Delta (NYSE:DAL) bid for Northwest (NWA) in return for a significant stake in the combined airline, sources told the WSJ.
- JPMorgan reports 34% drop in net; shares rise. JPMorgan Chase (NYSE:JPM) posted net income of $2.97 billion ($0.86/share) against $4.52 billion ($1.26) a year ago. Revenue was up 7% to $17.38 billion. Analysts were expecting EPS of $0.93 on $17.05 billion in revenue. JPM shares rose 5.77%.
- Wells Fargo posts first quarterly profit decline in six years; edges expectations. The mortgage lender (NYSE:WFC) reported that Q4 earnings fell to $1.36 billion ($0.41/share) from $2.18 billion ($0.64) a year earlier. Revenue rose 8% to $10.21 billion. Analysts expected EPS of $0.39 on revenue of $10 billion. Shares rose 3.32%.
- Citi sees $15 billion writedown at Merrill. Citigroup (NYSE:C) is forecasting a $15 billion Q4 writedown at Merrill Lynch (MER) and is lowering its price target by $5 to $75, but continues to rate Merrill a "buy".
- Sun to buy MySQL. Sun Microsystems (JAVA) will pay $1 billion for the Swedish open-source database company. Sun shares rose 3.67%.
- Novartis posts Q4 profit miss. The European pharmaceutical (NYSE:NVS) reported Q4 net income of $904 million ($0.41/share), a 45% decline from the year-ago quarter. Analysts were expecting earnings of $1.5 billion. Shares fell 2.10%.
- Microsoft allies with Edgar Online. The software giant (NASDAQ:MSFT) and financial information provider (NASDAQ:EDGR) will place advertising and content on one another's sites. Edgar shares gained 3.7% after hours.
- AMR swings to Q4 loss. The parent of American Airlines (AMR) posted a loss of $69 million ($0.28/share) versus a profit of $17 million ($0.07) a year ago. Excluding one-time benefits, the loss comes to $0.75/share, in line with forecasts. Shares closed up 3.18%.
- Apollo Group loses class-action suit. A jury found the education company (NASDAQ:APOL) guilty of fraud and ordered it to pay investors $277.5 million. Shares fell 1.70%.
- Airbus Lags Boeing in New Orders, But Aircraft Deliveries Hit Record
- SAP Doesn't See Economy Crimping Sales, Chief Kagermann Says
- Deutsche Bank Set to Cut 250 to 300 Jobs
- Schwab Profit from Continuing Operations Up 36 Percent
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