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Breaking News | Real-time commentary on the market, with links to key sources.

Real Time - Market Currents
 Top Stories - Wall Street Breakfast
Tuesday, December 2 2008
Page auto-refreshes as new events occur (times are ET)
  • 5:12 PM Don't take your G1 abroad, Gizmodo advises, because apparently there's no way to completely disconnect T-Mobile's (DT) Google-powered phone from the internet, resulting in unwanted roaming charges. Then again, maybe you shouldn't take your iPhone 3G (AAPL) either. Comment!
  • 5:08 PM Like it or not, Congress will likely pony up at least $25B to buttress the Big Three, FlowChart's Rick Newman says. Let's at least hope they avoid his 7 Worst Ways to Rescue Detroit. Comment!
  • 4:58 PM With the unprecedented volatility in commodities prices, hedging - once the domain of the ultra-cautious - is becoming a tenuous proposition. Comment!
  • 4:52 PM Perhaps Goldman (GS -1.6%) doesn’t have to change its business model because regulators demanded it become a bank holding company, Heidi Moore writes at Deal Journal. "If even Goldman can’t make the old securities-firm model profitable any more," it's time to abandon it anyway. Comment!
  • 4:47 PM The book that predicted the meltdown: The Ascent of Money: A Financial History of the World. "Are we on the brink of a 'great dying' in the financial world?" Comment!
  • 4:40 PM Dow Chemical (DOW), and the global economy for which it's a leading indicator, is in for more tough times, CEO Andrew Liveris tells CNBC (video). "It's going to be bad but let's say a year or two from now it'll be good and the cycle will go the other direction." Comment!
  • 4:24 PM Supposed Yahoo (YHOO) courter Jonathan Miller runs the venture capital fund Velocity Interactive Group with partner Ross Levinsohn - the same guy who said reports of a $20B Microsoft (MSFT) deal to buy Yahoo's search, while he and Miller manage Yahoo, were total fiction. Or were they? Comment!
  • 4:22 PM Nissan (NSANY) posts November sales of 46,605, down 42.2% vs. consensus of -35%. (PR) 1 Comment
  • 4:18 PM OmniVision (OVTI) FQ2 EPS of $0.19 beats by $0.01. Revenue of $164M (-29.5%) vs. $166M. Sees FQ3 EPS of -$0.22 to -$0.09 vs. $0.17. Shares -1.9%.(PR) Comment!
  • 4:15 PM Marvell Technology (MRVL): Q3 EPS of $0.23 beats by $0.02. Revenue of $791M (+4.3%) in-line. Shares +4.1%. (PR) Comment!
  • 4:12 PM G.M. asks for a bridge loan of up to $12B, of which it anticipates to draw $4B now, and another $6B credit line "to provide liquidity should a severe market downturn persist." Comment!
  • 4:07 PM The plan (PR) G.M. (GM) presented to Congress suggests it is in a more dire situation than previously thought. (WSJ) Comment!
  • 4:03 PM 30-year bonds climb again, but less than recent leaps, +0.44%. 10-year +0.4%. 5-year +0.23%. 2-year +0.01%. Comment!
  • 4:03 PM Crude slips again, despite the strength in equity markets, -3.29% to $47.66. Gold +0.61% to $779.30. Comment!
  • 4:02 PM A volatitle session resolves to the upside, erasing some, but not all, of yesterday's drop. Dow finishes up 3.43% to 8,428.57. S&P +4.07% to 849.23. Nasdaq +3.7% to 1,449.80. Comment!
  • 3:57 PM Financial services spent 10% less on ads this year, Nielsen says, lead by a 62% drop in mortgage companies. Meanwhile, an ad exec says U.S. ad spending will drop by 5-8% next year - really bad news for TV sports. Comment!
  • 3:47 PM How Congress Will Kill Detroit. "A reborn Detroit requires a radical, harsh restructuring for which neither Detroit nor Washington really has the appetite." Comment!
  • 3:38 PM Rupert Murdoch biographer Michael Wolff on MySpace (NWS): "That’s gonna go down. What they are looking at is the distinct possibility that it can go down to nothing." Comment!
  • 3:27 PM HuffPo's latest funding round gives it roughly the same market cap as TheStreet.com (TSCM), despite the latter's hefty cash flow. Amazing, but not necessarily obscene. Comment!
  • 3:16 PM While private-equity fund-raising is expected to be flat or down this year, emerging markets funds continue to reach new heights. (Deal Journal) Comment!
  • 3:10 PM Notable earnings after Tuesday's close: MRVL, OVTI. Comment!
  • 3:05 PM Felix Salmon on Wall Street's bloated compensation model: "Let’s bring down pay, a lot, and see whether performance really falls." Comment!
  • 3:00 PM Going into Tuesday's final hour, stocks have reestablished the uptrend. Dow +1.45% to 8267. S&P +2% to 833. Nasdaq +2.1% to 1427. Crude -4% to $47.34. Comment!
  • 2:50 PM Blockbuster (BBI) plans to team with Microsoft (MSFT) to develop a mobile video service. "Eventually, we’ll give customers instant access to any movie on any device with an Internet connection and a screen." 1 Comment
  • 2:38 PM Palm (PALM) moves one step closer to becoming a penny stock after warning greatly intensified economic weakness will further hamper sales, leading analysts to worry about capital raises and dilution. Shares -13% to $1.63. Comment!
  • 2:26 PM Becoming a bank holding company won't be cheap for Goldman Sachs (GS), Bernstein's Brad Hintz notes. History shows an 88% correlation between gross leverage ratio and return-on-equity - which means average RoE could drop by 8.5%, despite Goldman's claims to the contrary. Comment!
  • 2:17 PM Crude again drifts towards its low, -3.1% to $47.74 (low: $47.36). Gold +0.4% to $778. Comment!
  • 2:15 PM Stocks are struggling to hold on to gains, with the Dow giving up 200 points over the past two hours. Dow +0.88% to 8218. S&P +1.4% to 827. Nasdaq +1.3% to 1417. Comment!
  • 2:11 PM Recent stock buyback announcements. Comment!
  • 2:00 PM G.M. (GM -0.2%) reports a 41.3% drop in November U.S. sales to 154,877 vs. -33% consensus. Car sales were down 44.1% and truck sales fell 39.4%. "The consumer is scared and sitting on the sideline." (PR) Comment!
  • 1:57 PM Top UAW leaders tell its officials G.M. (GM -0.2%) may need to seek Chapter 11 bankruptcy protection before Christmas if the automaker doesn't win federal aid in the coming days. Comment!
  • 1:52 PM Former AOL CEO Jonathan Miller is trying to raise money to purchase a portion or all of Yahoo (YHOO +6.2%), sources say. He's thinking $20-22/share; insiders are extremely skeptical he'll be able to raise the $28-30B that means. Comment!
  • 1:48 PM Toyota's (TM) discounts averaged $1,908 a vehicle - an all-time high - in November, including zero-percent loans on 11 models. Still well short of its U.S. rivals (GM $3,248. F $3,731. Chrysler $3,490) - but they scaled back slightly from October. Comment!
  • 1:34 PM Honda (HMC +4%) posts November sales of 76,233, a decline of 31.6% from a year ago vs. consensus of -22%. Acura sales fell 38.9% to 7,888. (PR) Comment!
  • 1:28 PM Nexen (NXY +22.5%): "We are not aware of any corporate developments to account for this activity." (PR) Which could indeed be true. Comment!
  • 1:24 PM Chevron (CVX +4.5%) outpaces gains among fellow petroleum stocks after it wins a lawsuit over two deaths in a 1998 protest in Nigeria. FindLaw's Anthony Sebok says the victory may not be as significant as it seems. Comment!
  • 1:11 PM Investors poured $73B into stock ETFs in Q3, even as they pulled $77B out of conventional stock funds. Comment!
  • 12:59 PM Nokia's (NOK) iPhone (AAPL) slayer: The N97 (kudos on the catchy name), though by its own admission, the phone won't trigger knee-jerk hysteria. 12 things you should know (techradar). Slide show (Engadget). Why Nokia isn't buying Yahoo (The Register). Comment!
  • 12:47 PM Plosser: Prior to the crisis, Fed lending typically amounted to less than 1% of total Fed assets; now it's nearly 50%. Says he's not worried about deflation, but that the Fed must help anchor market expectations or risk self-fulfilling prophecies. Comment!
  • 12:36 PM Fed's Plosser sees weak growth until mid-2009, but warns it must withdraw liquidity when markets settle or risk fueling inflation. Comment!
  • 12:26 PM Toyota (TM +6.75%) reports November vehicle sales of 130,307, down 33.9% from last year vs. -27% consensus. Car sales fell 32.3% and light truck sales dropped 36.1%. (PR) Comment!
  • 12:12 PM Paulson urges China to move toward relying more on domestic demand, and less on exports. Comment!
  • 12:09 PM Ford (F +10.2%) reports November light-vehicle sales of 122,723, down 30.6% vs. -32% consensus. Trucks declined 29% while car sales fell 36.2%. (PR) Comment!
  • 12:03 PM Dow laggards: MMM -2.1%. KO -0.5%. Comment!
  • 12:03 PM Dow leaders: C +12.4%. GE +10.6%. BAC +10%. MRK +6.4%. GM +6.1%. AA +6.1%. AXP +5.3%. INTC +5.3%. JPM +5.3%. VZ +4.9%. DIS +4.7%. T +4.5%. Comment!
  • 11:54 AM Nexen (NXY +21%) surges on reports Total (TOT +5.8%) is meeting to approve an offer of up to C$19.7B (C$38/share) for the Canadian oil company. Total is said to have considered selling its 13% stake in Sanofi-Aventis (SNY) if it had proved difficult to secure bank financing for the deal. Comment!
  • 11:49 AM Sector ETF weakness: Oil– USO -3%. Gasoline– UGA -2.8%. Oil Services– OIH -2%. Commodities– GSG -1.4%. Agribusiness– MOO -0.8%. Comment!
  • 11:49 AM Sector ETF strength: Real Estate– IYR +9.6%. Gold Miners– GDX +6.8%. Coal– KOL +5.9%. Regional Banks– KRE +5.8%. Solar– TAN +5.2%. Financials– XLF +5.2%. Homebuilders– XHB +5.2%. Comment!
  • 11:35 AM Crude can't hold on to gains, back down 2.5% to $48. Comment!
  • 11:34 AM Fed extends an alphabet soup of bailout mechanisms from Jan. 30, 2009 to April 30 - PDCF, AMLF, TSLF. 1) Provides discount window loans to primary dealers. 2) Provides loans to purchase asset-backed commercial paper from money-market mutual funds. 3) Auctions term loans of Treasury securities to primary dealers. Comment!
  • 11:32 AM This may one day be referred to as The Great Recession. Comment!
  • 11:20 AM Mosaic (MOS) is down 3.6% after warning Q2 sales looked soft, and margins were being squeezed by high raw-material costs. Peers AGU -6.8%. IPI -7.7% and POT -3.4% also weak. Analysts say potash issues aren't going to go away soon. Comment!
  • 11:08 AM The Fed receives only $66.4B in bids on yesterday's $150B auction in 84-day credit. (previously) Comment!
  • 10:57 AM Treasurys are clearly the belle of the investment ball, WSJ's Heard on the Street says, but the massive rally could be nearing its peak. Comment!
  • 10:44 AM The 20 largest U.S. companies. Comment!
  • 10:36 AM Brushing off a weak open, stocks break out to new intraday highs. Dow +2.2% to 8330. S&P +2.5% to 837. Nasdaq +2.2% to 1429. Comment!
  • 10:34 AM Ford will sell its 5 corporate aircraft, and CEO Alan Mulally says that "should Ford need to access funds from a potential government bridge loan, he would work for a salary of $1 a year – as a sign of his confidence in the company’s transformation plan and future." Comment!
  • 10:32 AM Ford: Despite the serious global economic downturn, it does not anticipate a liquidity crisis in 2009 – barring a bankruptcy by one of its domestic competitors or a more severe economic downturn. Comment!
  • 10:31 AM Ford (F +9.4%) submits its business plan (.pdf) to Congress, looking for up to $9B in bridge financing which it says it may not need. Plans to to be breakeven or profitable by 2011, and will accelerate its plan for a family of hybrids, plug-in hybrids and battery electric vehicles. Comment!
  • 10:25 AM GE (GE +8.4%) starts higher and keeps climbing despite a lowered EPS outlook (in line with consensus) and an expected $1-1.4B charge to restructure GE Capital - which it describes as an invaluable part of the company, ending lingering speculation of a break-off or spin-off. It also maintains its dividend. Comment!
  • 10:13 AM Hedge Fund Research says hedge fund closures at midyear were 15% higher than in 2007. And that may be just the beginning according to merchant banker John Siiliano: "The number of hedge funds is going to be cut in half in the next two quarters. You’re going to see capital calls like you can’t believe." Comment!
  • 10:04 AM Crude manages to shake overnight losses and is +0.4% to $49.50. Same with gold, +0.5% to $778.50. Treasurys are weaker, with the 30-year -0.57%. Comment!
  • 10:03 AM Markets pull back from overnight gains over the first half hour. Dow +0.5% to 8192. S&P +0.85% to 823. Nasdaq +0.8% to 1409. Comment!
  • 9:55 AM United Airlines (UAUA) will do whatever it must to return to profitability, but a spokesman says UAUA is comfortable with the capacity cuts already in place and does not feel more will be needed. Comment!
  • 9:48 AM Pilgrim's Pride's (PPC) Chapter 11 filing yesterday could benefit rival Tyson Foods (TSN) if PPC customers are spooked into seeking another supplier. Comment!
  • 9:37 AM The FHA's capital cushion against losses from mortgage defaults is down a disconcerting 39% since last year to $12.9B. The number of FHA-insured loans has swelled in recent months as wary lenders clamp down - and some worry it may be taking on too much risk. Comment!
  • 9:32 AM Dow starts the day up 1% to 8228. S&P +1.4% to 828. Nasdaq +1.35% to 1417. Comment!
  • 9:22 AM The negligible jump in sales despite a sharp decline in gas prices is "testimony to the multitude of other constraints on consumer budgets," DismalScientist's Andrew Gledhill writes of today's weak chain-store sales growth. "Consumers have little ability or desire to spend." Comment!
  • 9:18 AM Futures indicate stocks will open higher this morning. Dow +1.1% to 8232. S&P +1.65% to 830. Nasdaq +1.3%. Comment!
  • 9:17 AM British Airways (BAIRY.PK) is in talks with Australia's Qantas Airways about a possible merger. British Airways says its merger talks with Iberia are continuing. Comment!
  • 9:14 AM An International Trade Commission judge says Tessera's (TSRA -43.8%) patents were not violated by Spansion (SPSN), Motorola (MOT +3.4%), Qualcomm (QCOM +3.3%) and others. Tessera is hit with downgrades. Comment!
  • 9:10 AM National chain store sales fell 1.1% in the first four weeks of November vs. the previous month, Redbook says, and fell 0.9% vs. a year ago. (See also: ICSC sales) Comment!
  • 9:04 AM Eyeing the $172B teenagers spend annually, PayPal (EBAY) quietly starts testing a new system that allows parents to create recurring PayPal allowances for their kids. No news on when the service might be rolled out more broadly. Comment!
  • 9:03 AM Premarket losers: TSRA -44%. XNPT -36%. MOS -5%. GS -4%. POT -4%. LDK -3%. MMM -3%. Comment!
  • 9:03 AM Premarket gainers: MRX +17%. GFI +17%. TS +11%. GOLD +11%. LIZ +10%. AU +10%. HMY +10%. GM +8.5%. WB +8%. MT +9%. F +8%. MTL +8%. C +7%. S +7%. KB +6.5%. RIO +6%. LVS +6%. DB +5%. AUY +5%. JAVA +5%. ALU +5%. BP +5%. ESLR +5%. ERIC +5%. HIG +5%. Comment!
  • 8:58 AM Time Warner Cable (TWC) will sell fewer than expected video, internet and phone subscriptions this year, and even less next, CFO Rob Marcus says. To which analyst Thomas Eagan reacts: "We pulled back our numbers after the third quarter but maybe we didn't pull them back enough." Comment!
  • 8:53 AM Retail chain store sales increased 0.1% from a week ago, ICSC says, and rose 1.3% Y/Y, ending two consecutive weeks of declines. "Black Friday promotions provided the incentive consumers were looking for." Comment!
  • 8:50 AM If Cyber Monday sales are any indication - and they usually are - online holiday spending will be truly dismal this year. The first Monday after Thanksgiving saw just 2.4% Y/Y growth in online retail sales vs. 21% growth the year before. Comment!
  • 8:43 AM Rising unemployment could further batter ailing lenders as even prime borrowers feel the pinch: "Consumers have already lost value on their homes and stock portfolios. Now loss of income will exacerbate consumer defaults on credit cards, auto loans and mortgages." Comment!
  • 8:33 AM GE (GE): Sees Q4 EPS of trending toward the low end of its previous range of $0.50-0.65 (vs. $0.51 consensus). Targets 2009 GE Capital earnings of $5B. Shares -7%. (PR) Comment!
  • 8:20 AM (SOLF): Q3 EPS of -$0.86 misses by $1.93. Revenue of $1.27B (+69.1%) vs. $1.34B. Shares -5.1% premarket. (PR) Comment!
  • 8:07 AM The European Commission is about to issue detailed guidance for governments planning to give money to their banks, in order to ensure a level competitive playing field (memo). Revised guidlines could pave the way for France's €10.5B bank rescue, among other proposals. Comment!
  • 7:56 AM The annual rate of inflation dived to 3.7% from 4.5% in October across the developed world, OECD says. The fall was largely due to the continuing decline in energy prices; net of energy and food inflation fell to 2.2% from 2.4%. Comment!
  • 7:49 AM Goldman Sachs (GS) could post a $2B loss ($5/share) in Q4 - five times steeper than the current consensus - insiders say. "The last two weeks have been nothing short of horrible, with asset prices coming under ever more pressure than before," one analyst says, explaining the sudden pessimism. Comment!
  • 7:36 AM Delinquent mortgages will likely double by the end of 2009 to their highest level in at least 16 years. Mortgages overdue by 60 days or more are expected to reach 7.17% in Q4 2009 vs. a forecast 4.67% at the end of 2008. Comment!
  • 7:33 AM The Aussie central bank lowers its benchmark rate by 1% to 4.25%, a six-year low. The fourth reduction in as many months, Governor Glenn Stevens says the cut is needed to "take monetary policy to an expansionary setting." Comment!
  • 7:31 AM Euro-zone producer prices plunged 0.8% - the sharpest drop on record - in October, leaving them up 6.3% on the year (.pdf). A sharp drop in crude prices led the way down, fueling hopes of a 50 BPs or more ECB interest rate cut Thursday. Comment!
  • 7:31 AM In an emergency meeting, BoJ decides to accept lower-grade corporate bonds as loan collateral, and will open a new lending facility for commercial banks in January. Overnight lending rate remains at 0.3%. (BoJ statement (.pdf)) Comment!
  • 7:28 AM Big Three automakers head back to Congress today with individual survival plans in hand, hoping to win $25B in federal aid. The plans are said to include wide-sweeping cuts and possibly the idea of an automaker alliance for fuel-efficient technology. Comment!
  • 7:23 AM The Justice Department expands its tax evasion inquiry to include HSBC (HBC) and Credit Suisse (CS), sources say. Between the two banks, as much as $30B in offshore accounts may have gone undeclared to the IRS. Comment!
  • 7:19 AM Beazer Homes USA (BZH): FQ4 EPS of -$12.29 misses by $10.19. Revenue of $590M (-44.6%) vs. $593M. CEO Ian McCarthy says "conditions have continued to deteriorate," and focus will stay on "generating liquidity, reducing... costs, and limiting investment in land and unsold home inventory." (PR) Comment!
  • 7:18 AM Sears (SHLD): Q3 EPS of -$0.90 misses by $0.41. Revenue of $10.7B (-8.3%) vs. $10.9B. (PR) Comment!
  • 7:17 AM Staples (SPLS): Q3 EPS of $0.42 beats by $0.01. Revenue of $6.95B (+34.5%) vs. $7.03B. (PR) Comment!
  • 7:12 AM U.S. stock futures boast strong gains. Dow +1.9% to 8294. S&P +2.3%. Nasdaq +2.5%. Crude -0.5% to $49.04. Gold +0.1% to $775.40. Comment!
  • 7:11 AM In Europe, markets opened down but have climbed steadily. London +1.4%. Paris +1.1%. Frankfurt +2.5%. Comment!
  • 7:10 AM Asia markets posted heavy sympathy losses Tuesday. Nikkei -6.355 to 7,864. Hang Seng -4.98% to 13,406. Shanghai -0.26% to 1,890. BSE Sensex -1.14% to 8,739. Comment!
  • 6:00 AM Earnings previews for companies reporting before today's open: SHLD, SPLS Comment!
  • 12:10 AM Notable earnings after Tuesday's close: MRVL, OVTI. Comment!
  • 12:05 AM Notable earnings before Tuesday's open: BZH, SHLD, SOLF, SPLS. Comment!
  • 12:00 AM Tuesday's economic calendar:
    1:30 Conference following BoJ's emergency policy meeting
    7:45 ICSC Retail Store Sales
    8:55 Redbook Chain Store Sales
    12:00 PM Monthly auto sales
    12:30 PM Philly Fed's Plosser speaks on economy
    5:00 PM ABC Consumer Confidence Index Comment!