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Market Currents - Real Time Wall Street Breakfast - Top Stories
Monday, October 13 2008
Earliest at Top
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  • 3:01 PM Dow leaders: GM +27.6%; AA +15.6%; AXP +12.7%; MSFT +12.4%; KO +12.3%.
  • 2:58 PM Dow laggards: GE -4.09%; JPM -3.63%.
  • 2:46 PM Here comes the first wave of earnings - but will the Street care very much what they show?
  • 2:30 PM The world's only pending IPO, perhaps fittingly, is for a company that deals in bomb shelters.
  • 2:09 PM At midafternoon, stock markets are beginning to slide off their highs: Dow +6.42%, S&P +6.48%, Nasdaq +6.76%.
  • 1:27 PM In the kind of stability we're not used to, the Dow broke through 9,000 shortly after noon and is holding fairly level - currently 9037.25, up 568 on the day.
  • 1:23 PM Morgan Stanley's (MS) share collapse late last week led to a wave of bets on the firm failing to meet its financial obligations. It joins another 134 companies whose protection must be bought upfront. The previous high was 43.
  • 12:45 PM "Like the old Pac-Man character, mark-to-market rules are devouring financial institution capital at a voracious rate," John M. Berry warns. "The question is whether it will gobble up even the new capital injections into banks by the U.S. and foreign governments."
  • 12:36 PM Crude oil +6.73%. Gold -2.92% to 833.90.
  • 12:33 PM Markets at midday continue to rally on light volume. Dow +6.73%. S&P +6.96%. Nasdaq +7.44%.
  • 12:28 PM Sen. Obama unveils new economic plan that includes lending facility for cities and states; per-hire tax credit for employers; 90-day moratorium on most foreclosures; penalty-free IRA withdrawals. [CNBC]
  • 12:24 PM Is Carl Icahn relaunching his campaign to sack Yahoo (YHOO) CEO Jerry Yang?
  • 12:23 PM The rich get richer and the poor get poorer isn't always true. The market's rapid plunge has taken some pretty spectacular hostages, including big-name insiders who built hefty stakes on margin.
  • 12:12 PM European markets responded positively to government actions today. At close: FTSE +7.14%; DAX +11.4%; CAC +11.18%.
  • 12:00 PM China is already a significant underwriter of the U.S. government's financial markets rescue. With the potential of a stronger dollar, that's not likely to change soon - provided China doesn't find itself in the need to divert its resources inwards.
  • 11:47 AM Sector strength: Solar (KWT) +13.97%. US Energy (IYE) +13.19%. Steel (SLX) +12.2%. Insurance (KIE) +11.85%%. Agribusiness (MOO) +10.6%.
  • 11:44 AM Sector weakness: Gold (GLD) -1.63%. Oil (USO) -0.92%. Regional banks (RKH) -0.19%.
  • 11:42 AM Maverecon: Are the fiscal pockets deep enough to save the banks, or are we doomed for another repeat of the 'Iceland problem?'
  • 11:33 AM United Technologies (UTX) has withdrawn its Feb. 29 offer for Diebold (DBD) citing concerns related to financial statements. [PR]
  • 11:04 AM Star analyst Meredith Whitney doesn't have much love for bank stocks... except these three.
  • 10:40 AM Private-equity firms, including Apollo, Blackstone (BX) and TPG, which bought billions of dollars of senior debt 'on the cheap' from top-tier banks like Citigroup (C), Deutsche Bank (DB), and Royal Bank of Scotland (RBS), are sitting on major paper losses.
  • 10:23 AM "People have been looking for leadership and finally they are getting it," George Soros says. Still, he says, the litmus test will be how frenzied markets react: "We're in a full-fledged panic, and who knows how people behave in a panic?"
  • 10:14 AM Gold tumbles to $824.50. Currently -3.3% to $830.20. Crude $2 from high, +3.44% to $80.40.
  • 10:10 AM iPhone 3G (AAPL): Coming soon to a Wal-Mart (WMT) near you?
  • 10:03 AM At the end of August, Alistair Darling warned the UK was facing arguably the worst economic times in 60 years. "At the time, this claim was widely derided, but no one is laughing now."
  • 9:51 AM A report by FCC engineers clears the way for the creation of a free, national wireless internet service. The FCC could move forward with an airwaves auction in early-to-mid 2009.
  • 9:41 AM Washington D.C.'s municipal workers join the ranks of 500K+ organizations using Google Apps (GOOG) in a deal worth almost $500K annually. Google's web-based tools are a threat to Microsoft's (MSFT) desktop Office suite. GOOG +6.6% pre-market.
  • 9:30 AM Dow's up 4.6% to 8846 at the open. S&P +5.4% to 947. Nasdaq +5.2% to 1735.
  • 9:29 AM Pre-market gainers: MS +57%. GM +42%. NWL +26%. TSO +25%. AA +22%.
  • 9:28 AM U.S. dollar is underwater vs. major currencies. -1.94% vs. euro. -2.03% vs. sterling. -1.51% vs. $Cd. -0.1% vs. yen.
  • 9:20 AM Crude +5.2% to $81.80. Gold -0.6% to $854.
  • 9:20 AM Waste Management (WMI) withdraws its $6.7B bid for Republic Services (RSG), citing market turbulence. WMI +6.7% pre-market.
  • 9:19 AM We're going higher on the open - it's just a question of how much. Dow futures +4.5% to 8751. S&P +5.6% to 940. Nasdaq +4.2%.
  • 9:17 AM King Pharmaceuticals (KG) presses on in its hostile bid for Alpharma (ALO), extending the deadline for the $37/share offer to Nov. 21 instead of Oct. 10. Alpharma rejected the bid last month as 'inadequate.' KG +5.6% pre-market.
  • 9:11 AM MySpace (NWS) launches MyAds, enabling small advertisers to target niche audiences on the social networking site for as little as $25. NWS +8.7% pre-market.
  • 9:00 AM Shares of German banks are higher after the government agrees to a €470B bailout package, including €70B in capital injections and €400B in guarantees for interbank lending. Deutsche Bank (DB) is up 8.6% in Frankfurt. Allianz (AZ) is +6.1%.
  • 8:46 AM Somewhat surprisingly, Morgan Stanley thinks Sovereign Bancorp (SOV) would be foolish to sell itself to Santander (STD) now.
  • 8:33 AM To facilitate a massive global injection of U.S. dollars, the Fed says it will increase the size of its swap lines with the BoE, ECB and SNB "to accommodate whatever quantity of U.S. dollar funding is demanded."
  • 8:18 AM Mitsubishi UFJ Financial (MTU) closes its $9B investment in Morgan Stanley (MS), giving it a 21% stake. MUFG gets $7.8B of perpetual convertible preferred stock with a 10% dividend and a conversion price of $25.25/share, and $1.2B of non-convertible preferred stock with a 10% dividend. MS +26%. MTU +4.5%.
  • 8:08 AM Fastenal Company (FAST): FQ3 EPS of $0.52 beats by $0.01. Revenue of $625M (+17.1%) in-line. [PR]
  • 7:55 AM Q3 annual marketing budgets were revised down to the greatest extent ever recorded, IPA says. Hardest hit were budgets for main-media advertising. Even internet advertising is under pressure, flat from last year in contrast to previously strong growth.
  • 7:29 AM A key question facing investors today is whether it's already time to wade back in to equities, which have fallen "way below anything approximating current estimates of fair value," Commerzbank's Peter Dixon says. "Based on markets response this morning, they certainly appear to believe that last week's selloff was massively overdone."
  • 7:13 AM European markets bounce back: London +4.4%. Paris +5.1%. Frankfurt +6.5%.
  • 7:12 AM Credit default swap spreads tightened Monday. But volume was light and investors remained cautious.
  • 7:12 AM Asian markets close strongly up: Hang Seng +10.2% to 16,312. Shanghai +3.6% to 2,074. BSE +7.6% to 11,332. Nikkei closed.
  • 6:46 AM Aided by a federal mediator, Boeing (BA) and its machinist union open their first negotiations since September's strike. Both sides agree to keep details of the talks secret.
  • 6:44 AM Sony (SNE) decides against a Christmas price cut for its PlayStation 3 console, insisting the PS3 is better value than cheaper rivals.
  • 6:31 AM Philips Electronics (PHG): Ebitda of €128M vs. €168M consensus. Says it will slow down the completion of its share repurchase program. Shares -4.8% in Amsterdam. [PR]
  • 6:22 AM BE Aerospace (BEAV): Sees Q3 EPS of $0.58 vs. $0.54 consensus. Sees Q4 EPS of $0.50 vs. $0.57. Sees full-year EPS of $2.00 vs. $2.84 and revenue of $2.5B vs. $2.88B. "We expect to report excellent financial results for the third quarter of 2008, but the near-term outlook has significantly deteriorated." [PR]
  • 6:21 AM Qwest Communications (Q) reaches a new tentative agreement with its labor union, averting a potential strike. The terms include a general wage increase of about 12.6% total over four years.
  • 6:17 AM An alliance between Chrysler and General Motors (GM) probably won't solve their financial troubles, say analysts, and could create more problems than it solves. Pre-market: GM +20.3%.
  • 6:03 AM Gas prices in the U.S. mark their largest drop ever on weakened consumer demand and lower oil prices. The national average falls to $3.3079 a gallon, a $0.35 cent drop from two weeks earlier.
  • 6:00 AM After similar moves by European policy makers, Treasury's Paulson may fast-track considerations to guarantee U.S. bank debt.
  • 5:59 AM U.S. markets are expected to open sharply higher on a relief rally over global cooperation on restoring the world's banking system. GFT's Martin Slaney calls the Dow to open up 225 to 8876, but cautions many will still be in wait-and-see mode.
  • 5:58 AM Wells Fargo (WFC) will likely sell or downsize Wachovia's (WB) investment banking unit after acquisition. The unit employs over 6,000 people and contributed around 16% of Wachovia's revenue last year.
  • 5:55 AM In the UK, just 8% of companies are more optimistic about prospects for their industry than they were three months ago. 60% are less optimistic.
  • 5:40 AM "Initiatives announced by national governments and monetary officials have lent some much-needed stability to markets," Societe Generale strategist Patrick Bennett says. "Still, confidence remains fragile and there are hopes that further measures...  will be delivered."
  • 5:25 AM European central banks offer unlimited dollar funds to help create liquidity in frozen short-term money markets. Commercial banks will be able to borrow any amount they want against 'appropriate collateral.'
  • 5:24 AM U.S. officials, in a potentially important precedent, urged a hesitant Mitsubishi UFJ (MTU) to proceed with its Morgan Stanley (MS) deal and promised the planned investment would be protected.
  • 4:51 AM Qimonda (QI) announces a restructuring plan and will sell its 35.6% stake in Inotera Memories to Micron (MU) for $400M.
  • 4:49 AM India considers a ban on short-selling as its market falls to its lowest level in over two years.
  • 4:40 AM Germany's bailout plan for the country's financial system could cost as much as €400B ($540B), including €200-250B on guarantees for lending between banks. Germany may also move to recapitalize banks.
  • 4:07 AM Norway tries to boost liquidity by offering to swap up to $55.4B in government bonds for commercial banks' mortgage debt.
  • 4:05 AM Spain's Banco Santander (STD) is in advanced talks to buy the shares of Sovereign Bancorp (SOV) it doesn't already own. Santander is expected to pay around $3.81, Sovereign's closing price on Friday. The deal could close as early as today.
  • 3:58 AM U.S. futures are moving higher. Dow +4.8% to 8,768. S&P +6% to 944. Nasdaq +4.8%.
  • 3:58 AM Early indications in Europe are strong. London +5.9%. Paris +6.6%. Frankfurt +6.6%.
  • 3:58 AM Heavy gains in Asia Monday: Hang Seng +9.6%. Shanghai +3.65%. BSE Sensex +7.2%. Nikkei closed.
  • 3:58 AM Bloomberg: The fiscal 2009 deficit in the U.S. may be $2 trillion (not a typo).
  • 3:45 AM The euro rises against the dollar by the most in three weeks after Eurozone leaders guarantee bank borrowing and promise to prevent failures that could cause systemic damage.
  • 3:35 AM The U.K. government is set to buy majority stakes in Royal Bank of Scotland (RBS) and HBOS. RBS will gets £20B, with the government taking £5B in preference shares and underwriting £15B in capital.
  • 3:22 AM Sovereign wealth fund China Investment Corp. may have up to $5.4B frozen in Reserve Primary Fund, the money-market fund that broke the buck last month.
  • 3:19 AM Australian banks' borrowing costs drop and Australian stocks rise as the country's central bank pumps $1.9B into the financial system and PM Kevin Rudd guarantees bank deposits.
  • 3:15 AM BoJ and the Japanese government will halt the sale of $20B of shares they bought from the nation's biggest banks between 2002 and 2006, according to the Nikkei newspaper, to reduce pressure on local markets.
  • 3:11 AM Chinese officials will adopt 'a prudent economic policy' to sustain economic growth in the face of a global slowdown. The yuan rises against the dollar on speculation the government will favor a stable currency.
  • 3:07 AM The risk of a 2009 recession in Hong Kong is rising, says Hong Kong's Financial Secretary John Tsang. Its economy expanded 4.2% Y/Y in Q2, its slowest pace in almost five years.
  • 3:02 AM Economists forecast China's export growth likely cooled in September to 20% growth Y/Y and 21.1% M/M, raising the probability the Chinese government will step up spending to stimulate the economy.
  • 1:05 AM Asian markets: Hang Seng +3.2%. BSE +3.9%. STI +2.0%. Nikkei closed.
  • 12:10 AM Notable earnings after Monday's close: XL
  • 12:05 AM Notable earnings before Monday's open: FAST
  • 12:00 AM Monday's economic calendar:
    8:15 Fed's Hoenig speaks on regulation in Washington
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