Wall Street Breakfast: Must-Know News

Must-Know News for Friday

• U.S. futures are pointing up (DJIA +0.49%, S&P 500 +0.57%, Nasdaq +0.94%) after Asian indices rallied for the third straight day (Nikkei +4.10, Hang Seng +6.73%, Shanghai +0.93%, BSE Sensex +6.62%), and European shares were broadly higher in Thursday morning trading (FTSE +0.77%, DAX +1.48%, CAC +1.09%).
• Microsoft surges on rosy outlook. Microsoft (MSFT) gained up to 6.2% in late trading Thursday before settling up 4.51% following the company's strong Q2 earnings report in which it raised sales and profit forecasts. Microsoft posted a 79% rise in net income to $4.71 billion ($0.50/share), ahead of analyst expectations of $0.46. Revenue rose 30% to $16.4 billion on strong Vista sales.
• Ambac could rise further on takeover speculation. Billionaire Wilbur Ross is reportedly in talks to buy bond insurer Ambac Financial Group (ABK). ABK shares closed down 17.3% Thursday after the New York Insurance Department said its plan to rescue the bond insurers will take time, but surged 8.65% after hours on buyout rumors.
• Amgen gains on better-than-expected sales of anemia drug. Amgen (AMGN) reported a rise in Q4 net income of less than 1% to $835 million ($0.76/share), but the 25% decline in Aranesp sales following its link to heart risks was less severe than analysts had expected. Revenue of $3.75 billion also beat forecasts. Shares closed up 3.06% and rose another 3.86% after hours.
• Fitch maintains FSA's AAA rating; slashes SCA. Fitch affirmed Financial Security Assurance's (FSF) AAA rating on Thursday, sending its shares up 3.59%. It also cut the rating of Security Capital Assurance (SCA) from AAA to A. SCA shares closed down a steep 30.61% and then regained 10.27% after hours.
• Sun doubles bottom line. Sun Microsystems (JAVA) reported fiscal Q2 earnings of $260 million ($0.31/share) versus $133 million ($0.15) a year ago. Analysts were expecting EPS of $0.30. Shares rose 8.77%.
• E*Trade posts big loss, but unveils turnaround plan; shares rise. E*Trade Financial Corp. (ETFC) reported a $1.7 billion Q4 net loss (-$3.98/share), but cheered investors with specifics about a turnaround strategy. Shares rallied 9.2% after hours.
• Lennar reports major loss, but beats expectations. The homebuilder (LEN) posted a quarterly loss of $1.25 billion on land writedowns and poor sales, a slimmer loss than expected. Shares rose 8.5%.
• Fannie and Freddie stand to gain from stimulus package. The economic stimulus plan just passed by the House would allow Fannie Mae (FNM) and Freddie Mac (FRE) to buy more expensive mortgages. The Senate and the White House have yet to approve the plan.
• BofA raises $12 billion in stock offering. Bank of America (BAC) sold $6 billion of perpetual preferred shares at an 8% yield and $6 billion of convertible preferred at a 7.25% yield in its largest-ever offering of preferred stock.
• Radio-spectrum auction opens with bids above $2.4 billion. The bidders will remain secret until the auction is concluded. Companies qualified to bid include Google (GOOG), AT&T (T), Verizon Wireless (VZ), EchoStar (DISH) and Cablevision (CVC).
• Sprint boots three senior executives. Daniel Hesse, Sprint Nextel's (S) new CEO, is replacing three top executives, including CFO Paul Saleh. Shares rose 4.24% on the news.
• MiddleBrook soars on FDA approval of strep treatment. MiddleBrook Pharmaceuticals (MBRK) skyrocketed 139% to close at $2.99 Thursday after the FDA approved Moxatag, its time-release amoxicillin treatment for strep throat.
• Restoration Hardware slashes price to lock in sale. The home furnishings retailer (RSTO) cut the price at which it will be acquired by private equity firm Catterton Partners to $4.50 per share from $6.70. In exchange, the merger agreement was amended to make it more difficult for Catterton to abandon the deal. Restoration shares rose 7.49% after hours.
• Greenspan does not yet see clear evidence of recession. Former Fed Chairman Alan Greenspan told the FT that recession is not a certainty. "You don't gradually fall into recession, you jump," he said. "The hard data that we are in recession is by no means conclusive."
• Sprint Nextel files patent suits against 4 firms
• Japan CPI posts biggest rise in decade
• FCC votes to approve buyout of Clear Channel
• Allis-Chalmers to buy Bronco Drilling for $437.8 Million
• Morgan Stanley Prepares To Lay Off 1,000 Workers
• Profit Drops, Sales Flat in Hershey's 4Q

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Comments

[misterchan]

Ms. Levy. Don't you have any opinion at all on gold and oil? And platinum? Maybe silver? Or any other commodity? Wake up!

[User 128067]

Thank you.
S.M