Good morning. Happy Thursday.
It was looking like a fairly uneventful open for the cash market until initial jobless claims were released. The number rose 58,000 to 573,000 – the highest in 26 years. 30 min before the open, Nas 100 futures are down 8 (0.68%) to trade at 1211 while SPX futures are down 5.5 (0.61%) to trade at 889.75.
The Asian/Pacific markets closed mixed with a slight downward slant. China lost 2.3% and Australia and Singapore each lost more than 1%. There were no 1% winners. Pretty tame action.
Europe is mostly down but losses are small. Norway is up 1.6% while Austria, Stockholm and Switzerland are down more than 1%. France and Germany are down a small amount and London is up fractionally.
The main bearish factor this morning is that Goldman Sachs cut its Chinese 2009 GDP forecast by 1.5 percentage points to 6%. Goldman said, “In China, the slowdown will be greater than during the Asia financial crisis or the 2001 dot-com bust. The near-term growth outlook in China is particularly weak.”
The House last night approved a $14 billion loan package to US automakers by a comfortable margin of 237-170. However, the prospects are less clear in the Senate where some Republicans may try to delay or kill the legislation with a filibuster. House Speaker Nancy Pelosi said she would not bring the House back to vote again if the Senate approves a different version of the bill. GM is up 4% in European trading this morning and Ford is up 1%.
The Swiss National Ban today cut its target rate by another 50 bp to 0.50%, which was in line with market expectations and left the Swiss rate 200 bp below the ECB’s 2.50% target.
The Swedish gov’t has presented a $3.4B support package to help the nation’s ailing auto industry.
Germany’s Ifo group sees 2009 German GDP falling 2.2%, recession until 2010.
Russia today allowed its currency to depreciate another notch, widening the target band for the ruble for the fifth time in a month. The ruble fell 0.7% today against its basket and is now down by 16% since August as a result of the plunge in oil prices, the Russian banking crisis, and capital flight.
Eli Lilly (LLY) said hefty costs related to its $6.5 billion acquisition of ImClone will force the drugmaker to post a loss for 2008 and significantly lower earnings for 2009, and warned of slower sales growth due to the stronger dollar’s dampening effect on overseas sales and generic competition for its cancer drug Gemzar.
The $35B buyout of BCE (BCE) to take the company private is officially dead.
Warehouse-club operator Costco Wholesale (COST) said fiscal first-quarter profit was nearly flat, as consumers pulled back on spending except for necessities such as food while the stronger dollar hurt international sales.
Procter & Gamble (PG), maker of Gilette razors and Pampers diapers, said its fiscal Q2 sales aren’t tracking as expected due to the weak economy, but said it will still meet its quarterly and full-year profit goals.
Canadian diamond miner and retailer Harry Winston Diamond (HWD) said it swung to a third-quarter profit, helped by the stronger U.S. dollar.
The tool maker Stanley Works (SWK) says it plans to cut 2,000 jobs, or about 10 percent of its work force, and close three manufacturing facilities.
Japanese electronics maker Sharp says it may cut production of liquid crystal display panels, as global demand falters for personal computers and mobile phones.
Ciena (CIEN), a provider of telecom and network gear, reported a loss for fiscal Q4, missing Wall Street estimates because of declining volume.
Chinese Internet company Sina (SINA) has approved $100M in stock repurchases over 12 months.
Montreal-based apparel maker Gildan Activewear (GIL) says it expects its earnings to decline “materially” in the first quarter of 2009 due to lower shipments and discounting in December.
XL Capital (XL) confirms it has retained Goldman to review strategic alternatives.
Restaurant operator DineEquity (DIN) suspends dividend for foreseeable future to help pay off debt.
Sara Lee (SLE) is cutting 700 jobs as part of a plan to reduce costs by up to $250 million.
Toyota (TM) is planning to cut output by more than 1 million vehicles next year.
CKE Restaurants (CKE) reported a drop in Q3 revenue and profit.
Moody’s downgraded the senior unsecured debt of Sprint Nextel (S).
Gold is up 2% and silver is up 1.9%.
Crude oil is up 2.09 to trade at 45.61.
—————————————————————————————-
| UPGRADES | KV.A, CL, WW, TSCO, BLL, ONXX, RTP, TEF |
| DOWNGRADES | DGII, HCBK, BA, AMG, FDRY, ETEL, EE, PACR, WERN |
—————————————————————————————-
| EARNINGS | |
| before the open | CIEN, COST, GIL, KFY, LEH, LULU |
| during trading | none |
| after the close | ABM, CBAK, CKR, ESL, MATK, OFI, RVI, TK, VITL, WEDC |
—————————————————————————————-
ECONOMIC RELEASES
8:30 Export Prices ex-ag
8:30 Import Prices ex-oil
8:30 Intial Jobless Claims
8:30 Trade Balance
—————————————————————————————-