Supreme Court Closes Uranium Loophole (USU)

Source: 24/7 Wall St. | 28 Jan 2009 | 1:48 pm

Davos kicks off amid deep gloom

Deep gloom marked the first day of the World Economic Forum in Davos on Wednesday, with economists, officials and business leaders seeing no quick fixes to the global economic crisis and warning against a growing protectionist mood
Source: Financial Times - US homepage | 28 Jan 2009 | 1:46 pm

Huge Loss At Wells Fargo (WFC): Blame Wachovia, But Government Rescue Plan Drives Shares Up

Source: 24/7 Wall St. | 28 Jan 2009 | 1:42 pm

Spain arrests 6 over British stock market fraud (AP)

AP - Spanish police arrested six people suspected in a $600 million stock fraud case in Britain, officials said Wednesday.
Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 1:42 pm

Stocks ready to rally

U.S. stocks were set to advance at Wednesday's open, lifted by stimulus hopes and some positive news from Wells Fargo.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:40 pm

Top Pre-Market Analyst Downgrades (AMLN, BIIB, CIEN, XOM, GFA, MXIM, BTU, SLT, SPWRA)

These are some of the top pre-market downgrades and cautious calls we have seen from Wall Street analysts this Wednesday morning:

• Amylin Pharmaceuticals (AMLN) Cut to Sell at Canaccord Adams.
• Biogen Idec (BIIB) Started as Sell at Brean Murray.
• Ciena (CIEN) Cut to Underperform at Credit Suisse.
• Exxon Mobil (XOM) Cut to Neutral at UBS.
• Gafisa (GFA) Cut to Neutral at UBS.
• Maxim Integrated (MXIM) Cut to Equal Weight at Barclays.
• Peabody Energy (BTU) Cut to Market Perform at FBR.
• Sterlite Industries (SLT) Cut to Sell at Citigroup.
• Sunpower (SPWRA) Cut to Accumulate at ThinkEquity.

Jon C. Ogg
January 28, 2009

Source: 24/7 Wall St. | 28 Jan 2009 | 1:40 pm

Six arrested in £420m fraud case

Spanish police arrest six people on suspicion of a £420m fraud relating to a London-listed company.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 1:35 pm

Top Pre-Market Analyst Upgrades (BIDU, BBY, CLX, DO, DD, MCHP, SOHU, WFT, STJ, SUNH)

These are some of the top pre-market analyst upgrades and positive research calls we are seeing from Wall Street this Wednesday morning:

• Baidu.com (BIDU) Started as Outperform at Bernstein.
• Best Buy (BBY) Raised to Overweight at Barclays.
• Clorox (CLX) Raised to Hold at Citigroup.
• Diamond Offshore (DO) Raised to Buy at Goldman Sachs.
• DuPont (DD) Started as Outperform at Credit Suisse.
• Microchip Tech (MCHP) Raised to Overweight at Barclays.
• Sohu.com (SOHU) Started as Outperform at Bernstein.
• Weatherford (WFT) Raised to Overweight at JPMorgan.
• St. Jude Medical (STJ) Raised to Outperform at William Blair.
• Sun Healthcare (SUNH) Raised to Buy at Citigroup; Started as Outperform at RBC.

Jon C. Ogg
January 28, 2009

Source: 24/7 Wall St. | 28 Jan 2009 | 1:34 pm

Wells Fargo has big loss as it adds to reserves

NEW YORK (Reuters) - Wells Fargo & Co reported a fourth-quarter loss as it added to reserves for credit losses and wrote down investments.
Source: Reuters: Business News | 28 Jan 2009 | 1:33 pm

Boeing reveals quarterly loss and lowers outlook

Boeing, the world's second-biggest aircraft-maker, made a loss in the fourth quarter of last year as it was hit by a machinists' strike and penalties for delays on a new version of its 747 aircraft
Source: Financial Times - US homepage | 28 Jan 2009 | 1:33 pm

Israel Stocks: Market higher; Hapoalim to expand in Turkey?

TEL AVIV (MarketWatch) -- Israel stocks were sharply and broadly higher on Wednesday, led by strength in Israel Chemicals, the banks, Teva Pharmaceutical and real estate.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 1:33 pm

Wells Fargo: No need for more bailout $

Wells Fargo reported a $2.6 billion fourth-quarter loss Wednesday, hurt by its acquisition of Wachovia and rising credit costs. But excluding a host of charges, many of them related to the merger, earnings beat Wall Street estimates.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:32 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 1:31 pm

AT&T profit falls, but iPhones sizzle

AT&T Inc.'s fourth-quarter net income falls 23.3%, but the phone giant adds a hefty 2.1 million wireless subscribers, including 1.9 million iPhone accounts.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 1:31 pm

Global jobs cuts to reach 50 million this year

Two years of global financial and economic meltdown could leave over 50 million more people unemployed by the end of 2009, risking social unrest, the International Labour Organization warned
Source: Latest Business News from Times Online | 28 Jan 2009 | 1:29 pm

UPDATE 1-RPC Q4 profit meets Street view

Jan 28 (Reuters) - Oilfield services company RPC Inc posted a marginally higher fourth-quarter profit and a 22 percent jump in revenue as it benefitted from an increased capacity utilization.
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:23 pm

Super Bowl ads: Abe Vigoda as Grim Reaper?

Despite a deep recession, advertisers are paying more than ever for 30 seconds of time during the biggest game of the year.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:23 pm

Fed moves to help distressed homeowners

With home foreclosures spiking, the Federal Reserve is taking steps to try to keep some distressed borrowers in their homes. Under the program, the Fed has a number of options to provide
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:23 pm

Wall Street cash bonuses fall 44%

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:22 pm

Yahoo beats estimates

Yahoo Inc. reported a fourth-quarter net loss Tuesday, but the Internet search engine's earnings, after adjusting for certain one time charges, beat analysts expectations.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:21 pm

From Davos: Annan calls for 'radical' changes

The worldwide economic recession has exposed a "crisis of global governance" that can only be addressed by the radical reform of the United Nations, former U.N. Secretary-General Kofi Annan said Wednesday as the World Economic Forum got under way in Switzerland.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:20 pm

Boeing posts $56 million quarterly loss

NEW YORK (Reuters) - Boeing Co reported a fourth-quarter loss on Wednesday, due to a strike by its assembly workers that cut commercial plane deliveries in the quarter and charges for delays on its new 747 jumbo.
Source: Reuters: Business News | 28 Jan 2009 | 1:20 pm

General Dynamics 4Q profit rises nearly 6 percent

General Dynamics Corp. says its fourth-quarter earnings jumped nearly 6 percent as higher profits in business jet and shipbuilding units outweighed an earnings drop in the company's...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:20 pm

Wells Fargo swings to 4Q loss

Wells Fargo says it swung to a loss in the fourth quarter as it took significant charges related to its purchase of Wachovia. For the final three months of the year, the San...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:19 pm

AT&T revenue up but profit down on iPhone, costs

NEW YORK (Reuters) - AT&T Inc said its fourth-quarter profit fell despite higher wireless sales, as the top U.S. phone company paid high subsidies to support Apple Inc's popular iPhone and traditional phone users disconnected their service.
Source: Reuters: Business News | 28 Jan 2009 | 1:17 pm

Risks of shorting sterling rise below $1.40: Soros (Reuters)

Reuters - The risks of holding trading positions that assume further declines in sterling increase significantly when the currency falls below $1.40, hedge fund manager George Soros said on Wednesday.

Source: Yahoo! News: Business | 28 Jan 2009 | 1:16 pm

Risks of shorting sterling rise below $1.40: Soros

DAVOS, Switzerland (Reuters) - The risks of holding trading positions that assume further declines in sterling increase significantly when the currency falls below $1.40, hedge fund manager George Soros said on Wednesday.
Source: Reuters: Business News | 28 Jan 2009 | 1:16 pm

Angela Merkel delivers Gordon Brown a lesson in how to help the car industry

With his plan to help the UK car industry Peter Mandelson the UK's business minister looked to Europe.
Source: Telegraph Finance | 28 Jan 2009 | 1:15 pm

Indications: U.S. futures point to higher open, driven by banks

U.S. stock futures pointed to a strong start for Wall Street on Wednesday led by financials after a report the Obama administration is nearing a deal to buy illiquid or bad assets from banking firms, while markets were also focused on a Federal Reserve meeting.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 1:15 pm

Banks up after report on FDIC

NEW YORK (Reuters) - Shares of large-cap banks rose on Wednesday after Bloomberg News reported that the FDIC may take control of a U.S. "bad bank."
Source: Reuters: Business News | 28 Jan 2009 | 1:11 pm

Banks up after report on FDIC (Reuters)

Reuters - Shares of large-cap banks rose on Wednesday after Bloomberg News reported that the FDIC may take control of a U.S. "bad bank."
Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 1:11 pm

Oil company OMV Petrom to lay off workers

OMV Petrom, Romania's largest oil company, will lay off about 10 percent of its employees, officials said Wednesday. Regional labor official Dragos Parvan said that 3,000 Romanian...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:11 pm

The Fed: What's left after 0%?

The Federal Reserve wraps up its two-day meeting about what to do with interest rates Wednesday afternoon. But that's probably two more days than the central bank needed.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:11 pm

WellPoint profit falls 61% on investment hit

NEW YORK (MarketWatch) -- WellPoint Inc. on Wednesday posted a 61% decline in fourth-quarter profit, hurt by hefty investment losses.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 1:10 pm

Obama faces first stimulus test

President Barack Obama will face the first real test of his push for a stimulus package on Wednesday, as the House of Representatives prepares to vote on the bill later in the day.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 1:08 pm

Spain's economy enters recession

Spain's economy is in recession for the first time since 1993, according to figures from the Spanish central bank.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 1:07 pm

Saving is easy RBS tells its customers

Looking for a pinprick of light amid the recessionary gloom? An economic north star to set your financial compass by?
Source: Telegraph Finance | 28 Jan 2009 | 1:06 pm

Stocks signal sharply higher open on stimulus vote (AP)

AP - Investors grew hopeful about an economic recovery Wednesday as the House neared a vote on an $825 billion stimulus plan that contains a mix of new spending and tax cuts.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 1:06 pm

AT&T (T) Earnings: Apple (AAPL) iPhone Good, Voice Business Bad

AT&T (T) earnings were not very impressive. Sales of Apple (AAPL) iPhones helped wireless growth. Landline numbers were poor.

For the most recent quarter, AT&T's consolidated revenues totaled $31.1 billion, up 2.4% compared to results in the year-earlier quarter. The firm had net income of $2.4 billion compared to $3.1 billion in the period last year, and EPS totaled $0.41, compared of $.51 in the fourth quarter of 2007.

Consolidated revenue growth was driven by 13.2% wireless growth and a 14.2% increase in wireline IP data revenues, which include AT&T U-verse services.

The real weakness in results is that voice revenue fell over 10% to $8.8 billion. Wireless revenue was up 13% to $11.5 billion, but there is now a foot race over how fast wireless can replace legacy business.

The company's forecast for the year was lackluster. "Continued consolidated revenue growth in the low single-digit range, led by gains in wireless and IP data services."

Some of the details:

"AT&T posted a fourth-quarter net gain in wireless subscribers of 2.1 million to reach 77.0 million in service."

"In the wireless business, postpaid subscriber growth reflects the dramatic success of iPhone 3G, which was launched in July 2008. AT&T’s fourth-quarter iPhone 3G activations totaled 1.9 million, approximately 40% to customers who were new to AT&T".

"AT&T's wireless data revenues grew 51.2 percent versus the year-earlier fourth quarter to $3.1 billion."

"AT&T further accelerated its ramp in U-verse TV growth with a net gain of 264,000 subscribers in the fourth quarter, up from 232,000 added in the third quarter of 2008, to reach more than 1 million in service."

U-verse subscription increases could be hurt by the economy. The number will be closely watched int he first quarter. .

Source: 24/7 Wall St. | 28 Jan 2009 | 1:02 pm

AT&T revenue up but profit down on iPhone, costs (Reuters)

Reuters - AT&T Inc said its fourth-quarter profit fell despite higher wireless sales, as the top U.S. phone company paid high subsidies to support Apple Inc's popular iPhone and traditional phone users disconnected their service.

Source: Yahoo! News: Business | 28 Jan 2009 | 1:00 pm

National Coalition for Capital Supports Florida Economic Stimulus Legislation

Access to capital critical in economic times WASHINGTON, Jan. 28 /PRNewswire/ -- The National Coalition for Capital has endorsed Florida legislative efforts to...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:00 pm

Liquidnet Named Best in Clearing and Settlement in United States and Europe

NEW YORK, Jan. 28 /PRNewswire/ -- Liquidnet, the global institutional marketplace, today announced that Z/Yen's 2008 survey of Operational Performance of Brokers ranked...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:00 pm

National Penn Bancshares, Inc. to Release 4th Quarter/Year-end 2008 Earnings on Thursday, January 29th at 9 a.m. and Conduct Earnings Webcast at 1 p.m.

BOYERTOWN, Pa., Jan. 28 /PRNewswire-FirstCall/ -- National Penn Bancshares, Inc. (Nasdaq: NPBC) announced today that it plans to release its 4th Quarter/Year-end 2008 earnings on
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:00 pm

MasterCard to Participate in the CLSA Asia Investors' Forum

PURCHASE, N.Y., Jan. 28 /PRNewswire-FirstCall/ -- On Tuesday, February 10, Walt Macnee, President of International Markets for MasterCard (NYSE: MA), will participate in the CLSA
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:00 pm

SellingLTC.com Launches LTCi Cafe - a New FREE Long-Term Care Insurance Resource Center Available to All Financial Professionals

ATLANTA, Jan. 28 /PRNewswire/ -- SellingLTC.com, LLC, the leader in providing long-term care insurance sales, marketing, and presentation solutions for insurance sales...
Source: RSS feed - channel BNewsBusiness | 28 Jan 2009 | 1:00 pm

3i CEO departs as firm's top holdings lose a fifth of their value

U.K.-listed private equity firm 3i group says Wednesday that the value of its 50 biggest investments dropped by over a fifth in the last quarter of 2008 as it announces the departure of CEO Philip Yea.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 12:58 pm

Opening Bell: 01.28.09

Boeing Posts Quarterly Loss on Strike Impact and Charges (PRNewswire)

Fourth-quarter net income declined to a loss of $56 million, or $0.08 per share, reflecting the now-settled machinists' strike (EPS impact estimated at $1.09 per share), a charge related to the 747 ($0.61 per share) and a litigation-related reserve ($0.09 per share).

Revenues for the quarter declined 27 percent to $12.7 billion, due primarily to the effects of the strike which reduced commercial airplane deliveries by approximately 70 units and revenues by an estimated $4.3 billion.

For the full year of 2008, net income fell 34 percent to $2.7 billion, EPS was $3.71 per share, and revenue fell 8 percent to $60.9 billion. Full-year results were impacted by the strike, the 747 charge, the litigation-related reserve, and higher costs for AEW&C announced in the second quarter, which together reduced full-year EPS by an estimated $2.56 per share. This was partially offset by lower pension and deferred compensation expenses.

"The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs," said Chairman, President, and Chief Executive Officer Jim McNerney. "Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times."

Tax-evader Not So Popular In Davos (Bloomberg)
Meouch: Boy-toy Treasury Secretary Tim Geithner's Yuan call was characterized as "economic suicide" by Morgan Stanley's Asia Chairman Stephen Roach, before a panel in Davos today. "I've never seen an economy in recession voluntarily raise their currency," Roach added. "It's horrible advice."

Eating Out, With T. Boone Pickens (Dallas Morning News)
Want some of that shit? TBP is auctioning himself off on eBay. Bidding starts Monday, at $100,000, and last 'til February 12. Good luck to all.

Behind Citi's Decision to Scrap New Jet Plans (FT)
Mentioned yesterday but confirmed: it was those meddling bastards over at Tim Geithner's Treasury that guilted Citi into saying it has "no plans to take possession" of the Dassault Falcon 7X.

Stimulus Bill Near $900 Billion (WSJ)
Expected House vote today. Includes: "a $365.6 billion spending measure for such brick-and-mortar projects as highways and bridges; a $180 billion measure to boost jobless benefits and Medicaid, among other things; and a $275 billion tax-relief package, which includes a plan to give a $500 payroll tax holiday to all workers, a proposal from Mr. Obama's presidential campaign." Also: " 'I would love to not have to spend this money,' Mr. Obama said, according to individuals familiar with the president's meetings with Republicans."

Stephen Schwarzman's Maverick Proposal (DBook)
Crab-hands wants more leverage.

Source: Dealbreaker | 28 Jan 2009 | 12:57 pm

Boeing posts $56 million quarterly loss (Reuters)

Reuters - Boeing Co reported a fourth-quarter loss on Wednesday, due to a strike by its assembly workers that cut commercial plane deliveries in the quarter and charges for delays on its new 747 jumbo.

Source: Yahoo! News: Business | 28 Jan 2009 | 12:54 pm

Futures rise on hopes of action on banks, economy (Reuters)

Reuters - Stock index futures rose on Wednesday on optimism the new administration was moving quickly to stabilize the ailing banking sector and as lawmakers get ready to vote on a stimulus package.

Source: Yahoo! News: Business | 28 Jan 2009 | 12:52 pm

Futures rise on hopes of action on banks, economy (Reuters)

Reuters - Stock index futures rose on Wednesday on optimism the new administration was moving quickly to stabilize the ailing banking sector and as lawmakers get ready to vote on a stimulus package.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 12:52 pm

Futures rise on hopes of action on banks, economy

NEW YORK (Reuters) - Stock index futures rose on Wednesday on optimism the new administration was moving quickly to stabilize the ailing banking sector and as lawmakers get ready to vote on a stimulus package.
Source: Reuters: Business News | 28 Jan 2009 | 12:52 pm

Yahoo posts loss as Bartz era begins

WASHINGTON (MarketWatch) -- Yahoo Inc. swung to a loss in the fourth quarter, as the flagging economy crimped sales of online advertisements and the Internet company's continued efforts to mount a turnaround resulted in heavy charges for the period.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 12:51 pm

Greene King provides cheer for the new year

Greene King today lifted the gloom that threatened to engulf the pub sector after reporting that it had yet to see the predicted new year trading slowdown.
Source: Latest Business News from Times Online | 28 Jan 2009 | 12:48 pm

Baker Hughes profit up 8%, but sees tough 2009

Baker Hughes on Wednesday joins the parade of oil service and other energy sector companies in putting the brakes on expectations for 2009, even as the drill bit giant manages to eke out a higher fourth-quarter profit.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 12:48 pm

Global crisis 'could cost 50m jobs'

The latest projections by the International Labour Organisation point to 'a dramatic increase' in global unemployment and poverty this year as the world economic crisis deepens
Source: Financial Times - US homepage | 28 Jan 2009 | 12:39 pm

Cutting corners, making ends meet

Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 12:32 pm

London Markets: U.K. banks catch fire to help lift London stocks

The hard-hit banking sector catches fire in London trade on Wednesday, with some traders returning to lenders on the belief the U.K. government won’t fully nationalize them.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 12:32 pm

Standard Life reports slide in UK life and pension sales

Standard Life has become the latest life assurer to post a sharp drop in fullyear life and pension products sales.
Source: Telegraph Finance | 28 Jan 2009 | 12:30 pm

George Soros has been shorting sterling during its recent slide

George Soros the man renowned for "breaking" the Bank of England by selling the pound in 1992 has been shorting sterling in recent months.
Source: Telegraph Finance | 28 Jan 2009 | 12:29 pm

Pfizer's monster loan adds to downmarket toolbox

Raising 22.5bn of debt with the credit markets still in a parlous state is a stretch even for a tripleA rated borrower like Pfizer.
Source: Telegraph Finance | 28 Jan 2009 | 12:20 pm

Engineering chief named as new Royal Mail Boss

The boss of a leading engineering company was appointed chairman of the Royal Mail today to succeed Allan Leighton.
Source: Telegraph Finance | 28 Jan 2009 | 12:19 pm

Lloyds surges as confidence in banks returns

The sustained recovery in the banking stocks helped London equities higher on Wednesday, with Lloyds Banking Group the main beneficiary. Shares in the company, created by the government-backed merger...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 12:14 pm

Mortgage applications dropped 38.8% last week: MBA

Mortgage applications fall a seasonally adjusted 38.8% in the week ended Jan. 23 compared with the prior week, Mortgage Bankers Association data show, as interest rates charged on fixed-rate mortgages decline slightly.

Source: MarketWatch.com - Top Stories | 28 Jan 2009 | 12:12 pm

Bank stocks push Europe higher (AP)

AP - Bank stocks pushed European markets higher Wednesday, and Asian markets rallied after U.S. earnings showed companies are still scraping together profits despite the worst recession in decades.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 12:10 pm

Six arrested in £400m stock exchange fraud

Spanish police have arrested six people suspected of involvement in a £400 million fraud on shareholders of a former London-listed company, thought to be Langbar International.
Source: Latest Business News from Times Online | 28 Jan 2009 | 12:09 pm

Oil stabilises while gold slips

Oil prices stabilised on Wednesday after a sharp fall in the previous session while gold slipped below the $900 level.But base metals managed a modest rebound after a broad retreat on Tuesday. ICE March...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 12:06 pm

3i sees investment values plunge

Private equity group 3i sees the value of its biggest 50 investments decline 21%, as the economic downturn worsens.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 12:04 pm

WEF 2009: headlines on Jan 28

Here is a roundup of headlines from the World Economic Forum annual meeting.
Source: Telegraph Finance | 28 Jan 2009 | 12:03 pm

Global job losses 'could hit 51m'

Millions of workers face unemployment because of the economic crisis, the International Labour Organization says.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 12:01 pm

WellPoint profit falls, hurt by investment losses

NEW YORK (Reuters) - Health insurer WellPoint Inc posted a 61 percent drop in fourth-quarter profit on Wednesday, dragged down by huge investment losses and higher medical costs as results missed analysts' targets.
Source: Reuters: Business News | 28 Jan 2009 | 11:49 am

Energy groups must find new sources of funding

A revolution in the way the US produces and uses energy has the potential to lead the world out of recession, but energy companies will need to tap into new sources of non-bank funding, the head of one of America’s largest power groups said today.
Source: Latest Business News from Times Online | 28 Jan 2009 | 11:44 am

European stocks rally, banks soar (AFP)

AFP - Europe's main stock markets rebounded sharply on Wednesday, with banks extending their recent recovery as a US bailout package neared approval and after gains across Asia and overnight on Wall Street, traders said.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 11:42 am

Toyota (TM) Recall: Quality Problems On Top Of Poor Sales

Toyota (TM) moved from making most of its cars in Japan to opening plants all over the world as it marched to become the No.1 car company. The process took nearly two decades and there was an aspect of it that worried Toyota management.

In Japan, quality control was not an issue. Factories were with a few hundreds miles of the headquarters. Executives could go to sites to help train workers and impart the firm's values for building vehicles were were nearly free of defaults.

As Toyota expanded it factory network along with sales, it ran into what should have been expected. Quality started to drop. Keeping a facility in South America operating using the same level of quality management that the firm could impose in Japan was impossible

Toyota began to slip in consumer satisfaction surveys and it began a series of large vehicle recalls cue to defects.

According to Reuters, Toyota recalled 1.3 million vehicles worldwide. The action will be embarrassing and costly. And, it comes with a dose of irony. Toyota will cut global production by 20% this year because the demand for cars is dropping in every major country.

Toyota now has the worst of both worlds--falling sales and quality problems from chasing sales which are no longer there.

Douglas A. McIntyre

Source: 24/7 Wall St. | 28 Jan 2009 | 11:40 am

Standard Life sales slump by 9pc

Standard Life's sales of life and pension policies have fallen by 9pc in Britain.
Source: Telegraph Finance | 28 Jan 2009 | 11:37 am

VT Group to quit shipbuilding business

VT Group is to quit shipbuilding with the sale of its naval operations to BAE Systems.
Source: Latest Business News from Times Online | 28 Jan 2009 | 11:37 am

Bank rally lifts sterling

The pound advanced on Wednesday as UK banking stocks surged higher following an upbeat assessment of Lloyds Banking Group.Shares in Lloyds soared after Citigroup upgraded its recommendation on the stock,...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 11:36 am

Snag a great deal on a short sale

When Brian Gavitt, a physician, and his wife Gayleen, a stay-at-home mom, started to eye homes in Sacramento last winter, they knew they were looking in the hardest-hit areas of the housing bust. So the couple, who were relocating from Lansing, figured they could land a fantastic bargain in no time at all.
Source: Business and financial news - CNNMoney.com | 28 Jan 2009 | 11:33 am

Asda creating 7,000 new UK jobs

Asda is to create 7,000 jobs, becoming the latest supermarket to add new positions as sales rise despite the recession.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 11:31 am

Six people arrested over alleged stock market fraud

Six people have been arrested in Spain suspected of involvement in a fraud totalling £370 million on the London stock market.
Source: Telegraph Finance | 28 Jan 2009 | 11:28 am

A New Attempt To Build A "Bad Bank"

Creating a "bad bank" is on the wish list of an extraordinarily large number of regulators and members of Congress. It is a sort of miracle cure to the problems in the banking industry. The toxic assets on financial firm balance sheets can be swept under a rug owned by the federal government. Banks would stop having huge losses and would be able to stop raising new capital. With better balance sheets, the same banks would be more likely to lend money to businesses and homeowners.

The "bad bank" is such a remarkable creation that it is a wonder that it has been on the back burner for so long.

According to Bloomberg, "The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis." No one has a concrete plan for valuing toxic assets that is likely to be acceptable to Congress, regulators, and the banks. Some of the asset classes do not trade at all. Others are not worth more than a few cents on a dollar.

The hardest question the government has to ask itself is whether most of these assets will recover in value at all. No one knows that answer to that for certain. So, any opinion is a guess, and a risky one if the taxpayer is going to pick up the check for buying the paper and putting it into a bad bank.

The greatest fiction about a bad bank is that it keeps the government from nationalizing the banking system. While the Treasury is not likely to take outright control of any of the banks which would sell it assets, the issue remains of what the government gets for that service. Some of these asset pools carry nominal values in the hundreds of billions of dollars. Even the largest US banks like Citigroup (C) and Bank of America (BAC) have market caps below $50 billion. Buying paper that is worth a sum which is much greater than a financial firm's market value begs the question of why the taxpayer does not get most of the equity in these companies for taking most of the risk.

Is the bad bank a good idea? Probably. But, the value equation of how America's largest financial firms pass their assets to the government is almost certainly going to work in the favor of the banks and against the interests of the Treasury.

Douglas A. McIntyre

Source: 24/7 Wall St. | 28 Jan 2009 | 11:26 am

Tyco Electronics posts quarterly net loss

NEW YORK (Reuters) - Tyco Electronics Ltd , a maker of electronic connectors, reported a quarterly net loss on Wednesday, reflecting weak U.S. and European auto markets and falling demand for components used in consumer products.
Source: Reuters: Business News | 28 Jan 2009 | 11:26 am

WEF 2009: Government 'hyperactivism' risks making crisis worse

The world is running out of tools to stop a drastic slide in output and may face a crisis worse than Japan's 10year slump says top panel.
Source: Telegraph Finance | 28 Jan 2009 | 11:19 am

Stock futures up; Fed, slew of earnings eyed

(Reuters) - Stock index futures pointed to a higher open on Wall Street on Wednesday, extending recent gains, as investors braced for a slew of company results as well as the outcome of a Federal Reserve meeting.
Source: Reuters: Business News | 28 Jan 2009 | 11:11 am

European shares rise for third session

European shares rose for the third consecutive day on Wednesday, boosted by upbeat trading statements and broad gains for the continent's banks. Momentum built by overnight gains in Asia and the US was...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 11:10 am

SAP (SAP): Some Hope For Global Software Industry

Shares in large software companies including Microsoft (MSFT) and Oracle (ORCL) have been selling off quickly over the last two quarters. The general forecasts for the firms is that a slowdown in IT spending at enterprises and governments will undermine revenue and compress gross margins.

Those afflicted companies got a bit of a lift today as SAP (SAP), the second largest business software operation in the world, reported earnings that demonstrated the appetite for its products and services has not died.

SAP earnings rose 13% in the last quarter and profits were up over 15% to $1.1 billion. Part of the gain came from the SAP buyout of BusinessObjects, but the results were promising even with that factored in. SAP said it had little visibility for 2009, but it also indicated that it did not expect a huge drop in margins.

In short, SAP's business is not going to hell even if it is getting a little soft.

Microsoft's PC operating system revenue is under pressure since sales of its server and business products are essential for the firm to have any chance to post modest earnings this year. At Oracle, which sells virtually 100% of its software to enterprises, the SAP earnings must be a significant relief.

Tech is supposed to have some immunity to overall economic slowdown. That has not turned out to be the case, but SAP showed that its part of the tech world is comparatively robust.

Douglas A. McIntyre

Source: 24/7 Wall St. | 28 Jan 2009 | 11:01 am

'Don't shun bankers: they're part of the solution', says Davos chief

Bankers who helped to cause the global economic crisis should not be shunned but included in the hunt for a solution, the head of the World Economic Forum said today.
Source: Latest Business News from Times Online | 28 Jan 2009 | 11:00 am

Stock futures up; Fed, slew of earnings eyed (Reuters)

Reuters - Stock index futures pointed to a higher open on Wall Street on Wednesday, extending recent gains, as investors braced for a slew of company results as well as the outcome of a Federal Reserve meeting.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 10:46 am

Citigroup cancels corporate jet

Troubled US bank Citigroup cancels a new corporate jet after President Obama questions the wisdom of the purchase.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 10:46 am

California Dreaming

Source: 24/7 Wall St. | 28 Jan 2009 | 10:44 am

Distorted Values: GE (GE) Is More Important Than Yahoo! (YHOO)

Yahoo! (YHOO) announced earnings yesterday. The company's forecast for the current quarter was weak. Many investors wanted to hear what new CEO Carol Bartz would say. She did not say anything, at least not anything new.

The Yahoo! earnings were the top story at many financial sites and in business sections of newspapers. The firm's fight for independence against Microsoft (MSFT) and it potential alliances with AOL and Google (GOOG) have kept readers fascinated.

Buried somewhere "below the fold" of most of the business media was a story that GE (GE) may face a downgrade from Moody's of its valuable Triple-A rating. GE CEO Jeff Immelt recently said that the conglomerate would do everything it can to keep both that rating and pay it dividend. Because of weakening assets at GE Capital, one or the other will most likely have to go.

Yahoo! is a fairly small company. It had sales of about $1.5 billion in the last quarter. It has 13,000 workers and a market cap of $15 billion. GE does business in almost every country in the world and most important sectors of the economy. Even with its stock near a 52-week low, it has a market cap of $136 billion and employs more than 200,000 people. Because the reach of its businesses is so broad, it is the global economy in a bottle.

The overblown interest in Yahoo! should go away now. If the company folds, the US economy will barely notice it. Other websites will get most of its revenue and employees. It won't matter.

GE is still one of the flagships of American business. It just doesn't seem that way anymore.

Douglas A. McIntyre

Source: 24/7 Wall St. | 28 Jan 2009 | 10:39 am

Profits shrink at Sumitomo Mitsui

Japan's third-largest bank, Sumitomo Mitsui, sees profits fall sharply on the back of bad loans and stock market losses.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 10:17 am

Calls for tougher control of credit derivatives

Around three quarters of business executives believe that it is now time for policy makers to impose formal regulations on complex financial products such as credit derivatives, a survey has found.Moreover,...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 10:17 am

Debt burden 'will last 20 years'

An independent think tank says it will take the UK 20 years to return to pre-crisis levels of government debt.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 10:05 am

Korea leads gains on Asia-Pacific markets

Korean equities led gains in Asia-Pacific markets on Wednesday, posting their biggest one-day gain in seven weeks as shares in technology companies rallied and investors gained confidence from Wall Street's...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 10:00 am

Canada unveils stimulus package

Canada's minority government pledges C$40bn in spending over five years to boost the slowing economy.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 9:46 am

Capital flows to developing world at risk of collapse

Capital flows to emerging markets are in danger of collapsing this year as the financial crisis in advanced economies risks choking off the supply of credit to the developing world, an association of large banks warned.
Source: Financial Times - US homepage | 28 Jan 2009 | 9:25 am

Davos starts in very gloomy mood

Global leaders gathering for the World Economic Forum in Davos, Switzerland are in gloomy mood over the economic outlook.
Source: BBC News | Business | World Edition | 28 Jan 2009 | 9:23 am

US-owned British supermarket Asda to create 7,000 jobs (AFP)

AFP - Asda, the British supermarket chain owned by the world's biggest retailer Wal-Mart Stores, said Wednesday it planned to create 7,000 jobs during 2009.

Source: Yahoo! News: Business | 28 Jan 2009 | 9:20 am

Rio Tinto says equity raising an option

Facing persistent rumours it might need to raise equity to help pay down $39 billion in debt, the global miner said an equity raising was one of the options being considered
Source: Financial Times - US homepage | 28 Jan 2009 | 8:48 am

Fed to hold rates near zero, kickstart economy

WASHINGTON (Reuters) - The Federal Reserve will resume a key meeting on Wednesday to review options of how to restore U.S. growth, with its traditional interest rate policy tool already lowered almost to zero.
Source: Reuters: Business News | 28 Jan 2009 | 8:47 am

Stocks rise at the start of trade (AFP)

AFP - Shares in London rebounded at the start of trade on Wednesday following positive figures from corporates while gains in Asia and Wall Street overnight contributed to the boost.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 8:45 am

Answers about the digital TV transition

The switch scheduled for Feb. 17 appears likely to be postponed until June 12. How would that affect consumers? ...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 8:00 am

Starbucks to stop continually brewing decaf coffee after noon

Starbucks Corp. said Tuesday that it would stop brewing decaffeinated coffee after noon as part of a drive to save $400 million by September.
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 8:00 am

From the O.C. to San Francisco for $49?

In anticipation of the debut of their new routes, Virgin America and Southwest Airlines kick off a fare war at John Wayne Airport. ...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 8:00 am

Mexicans working abroad sent less money home in '08

Recession and a drop in illegal immigration are blamed. Other countries also suffer. The amount of money sent...
Source: RSS feed - channel BNPaperBusiness | 28 Jan 2009 | 8:00 am

3i chief executive quits amid £682m asset fall

Philip Yea abruptly quit as chief executive of 3i today as Britain's oldest private equity group reported a £682 million fall in the value of its top 50 investments.
Source: Latest Business News from Times Online | 28 Jan 2009 | 7:59 am

Australian stocks: Market closes 1pc higher

SYDNEY- The Australian share market closed over one per cent higher after finance sector stocks and Woolworths boosted the market. At the 1615 AEDT close on Wednesday, the benchmark S&P/ASX200 index was up 51.5 points, or 1.5 per...
Source: New Zealand Herald - Business | 28 Jan 2009 | 7:38 am

Currency: Market awaits rate decision

The New Zealand dollar had a mixed session, spent mostly below the US53c figure ahead of the Reserve Bank's official cash rate (OCR) decision tomorrow. The NZ dollar was US52.96c at 5pm from US52.94c at 8am and US52.84c at 5pm. Overnight...
Source: New Zealand Herald - Business | 28 Jan 2009 | 6:44 am

NZ stocks: Market up on good volume

The share market rallied today on good volume, much of which was again in leader Telecom. The benchmark NZSX-50 index closed up 12.044 points, or 0.44 per cent, at 2747.901. Turnover was worth $113.4 million. There were 41 risers...
Source: New Zealand Herald - Business | 28 Jan 2009 | 6:29 am

Fed to hold rates near zero, kickstart economy (Reuters)

Reuters - The Federal Reserve will resume a key meeting on Wednesday to review options of how to restore U.S. growth, with its traditional interest rate policy tool already lowered almost to zero.

Source: Yahoo! News: Business | 28 Jan 2009 | 5:31 am

Aso vows to create jobs, fair market rules

Prime Minister Taro Aso has vowed to rescue Japan's economy from recession and create 1.6m new jobs, while warning about the risks of a bare-knuckle capitalism that he said had contributed to the global crisis
Source: Financial Times - US homepage | 28 Jan 2009 | 5:07 am

More Pain at the Pump? 5 Ways to Save (Deal of the Day)

With the economy riddled by the housing slump, credit crunch and other financial woes, falling gas prices became one of the rare silver linings for consumers last fall. But now even that small consolation is starting to disappear.

Gas prices are up 15% since the beginning of this year. On Tuesday, a gallon of regular unleaded gasoline averaged $1.84, reports AAA.

While that amount is still well below the $2.98 a gallon gas was going for last January, a number of economic factors -- say, OPEC decides to further cut production -- could push prices even higher. Then there are the seasonal cycles to consider. Gas prices tend to move higher between March and May as refineries close for maintenance and switch from the winter- to summer-blend gasoline. During that two-month period in 2007, prices jumped 75 cents a gallon to an average $3.23. Last year, they rose 78 cents, to $3.94 a gallon.

Granted, prices at the pump are unlikely to climb anywhere near the July peak of $4.11. The Energy Information Administration, the government agency that forecasts energy prices, currently predicts that the average price of gas will hover around current levels throughout the rest of the year -- that is, barring any unforeseen circumstances.

Nevertheless, it pays to keep prices at the pump from crunching your budget. Try following these five tips:

Stay on top of your car's maintenance

Underinflated tires can reduce fuel efficiency by up to 3.3%, while a clogged air filter can decrease it by as much as 10%, according to the Alliance to Save Energy. For the owner of a 2008 Saab 9-3 paying $1.84 a gallon, taking care of those two minor tasks would save him $23 every 4,500 miles. Check the owner’s manual to find out everything from what the proper tire pressure is for your car to recommendations on tune-up frequency.

Pay in cash

Eager to avoid getting hit with a merchant fee for credit-card transactions, some gas stations offer slightly lower prices to drivers who pay in cash, says Jason Toews, co-founder of GasBuddy.com, a consumer advocacy site that tracks prices and discounts. In fact, there are a few stations that don’t accept credit cards at all, thereby offering lower prices across the board. In San Francisco, for example, the average price per gallon is $2.05. But plastic-free ARCO stations in the area charge as little as $1.92. As gas prices rise, more stations are hopping on this trend, so ask before you pay.

Use cruise control

Speeding, rapid acceleration and braking can lower your fuel economy by as much as 33%, reports FuelEconomy.gov. For a driver of a 2008 Ford Escape, that’s like paying an extra 55 cents per gallon, or $108, over 4,500 miles.

Find the right gas rewards cards

“There are definitely strings attached and caveats [to gas rewards cards],” says Curtis Arnold, founder of CardRatings.com, a credit-card comparison site. Still, you could save a lot of money if you use the right one. Determining which card is best for you depends on your spending and driving habits. Arnold suggests big spenders look into the American Express (AXP) Blue Cash card. Once you’ve spent $6,501 during a billing year, you earn 5% back on grocery, drugstore and gas purchases, and 1.5% back on everything else. (Before reaching that spending threshold, you earn 1% and 0.5%, respectively.) Those who fill up less frequently might consider the Discover (DFS) Open Road card, which gives 5% cash back on your first $100 in gas and auto repair purchases each month, plus up to 1% back on everything else.

Seek out incentives

Employers, local governments, insurers and even public transit companies offer discounts and deals to those who drive less. If rising prices are limiting your time on the road, ask your employer if they offer any incentives for carpooling or taking public transportation, or see if your insurer offers a discount for putting fewer miles on your car. Atlanta’s Commuter Club, for example, offers a one-time reward of up to $100 for carpooling.
 

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 28 Jan 2009 | 5:00 am

Anticipating the Return of the Ketchup Kid

AFTER LAGGING BADLY BEHIND ALL ITS MAJOR food rivals in the equity market over the past six months, Heinz might have this defensive group's most appealing stock.

At around $36, H.J. Heinz shares (HNZ) combine a reasonable forward price/earnings multiple of 12 with one of the food industry's highest dividend yields, 4.6%. The stock has slid 27% in the past six months, versus an average drop of about 10% for its peers.

Compared with other big food companies, the 140-year-old Heinz has an above-average portfolio of brands, led by its dominant global ketchup franchise -- it sells more than 650 million bottles each year. Other big products are Ore-Ida and Smart-Ones frozen foods in the U.S., and market-leading Heinz soups and baked beans in the U.K. Nearly all its major brands are No. 1 or No. 2 in their categories.

Heinz is expected to earn about $2.90 a share in its fiscal year ending in May, up 10% from $2.63 it earned during its fiscal 2008. It trades for 12 times estimated profits in the current fiscal year and it carries a similar multiple on estimated calendar '09 earnings, a discount to Kellogg , Kraft Foods and General Mills , which fetch about 14 times estimated '09 profits.

Heinz's dividend, unlike those of many stocks offering nice yields, looks safe because the company is paying out less than 60% of its profits, and food earnings tend to be predictable. Heinz, which calls its dividend a top priority, has lifted it in 40 of the past 41 years. It is likely to do so again in May, although the boost may be only about 5%, well below last year's 9% rise.

FOOD STOCKS MAY NOT have the appreciation potential of more volatile and depressed industry groups. Yet given Heinz's low valuation, it could rise smartly in the next year. Citigroup analyst David Driscoll carries a Buy rating on the stock and a 45 price target, well below its September high of 53. If the stock rises to 45, investors could realize a not-so-shabby 30% return, including dividends. If profits disappoint, the stock's downside is likely limited to 30.

Heinz's business outlook probably is no worse than Kellogg's (K) and General Mills' (GIS), and it's better than that of Kraft (KFT), which has struggled to lift profits since it went public in 2001.

"Heinz is clearly inexpensive now," says Mark Boyar, who heads Mark Boyar & Co., a New York investment and research firm. Heinz, he says, could become a takeover candidate in the next few years for the likes of Nestle (NSRGY), Kraft or Unilever (UN). Heinz has a digestible market value of $11 billion and, unlike Campbell Soup and Hershey, it has no controlling shareholder that can block a deal.

Given tight credit markets and the global recession, there's little chance of a deal for the company anytime soon. But Boyar believes Heinz ultimately could fetch 60 to 70 a share. That would be in line with what InBev (INBVF) paid last year for Anheuser-Busch -- about 20 times earnings.

From 1998 to 2006, Heinz's profits and stock price languished amid a series of restructurings, acquisitions and divestitures. Since then, the company's business and financial performance, under the leadership of CEO William Johnson, have markedly improved, due in part to Heinz's decision to adopt much of the playbook advocated by activist investor Nelson Peltz, whose Trian Partners took a stake in Heinz in 2006.

PELTZ URGED HEINZ TO INVEST more heavily in its key brands and focus on new products -- while cutting overhead costs, closing factories and slashing payments to retailers to stock Heinz products. One result: its successful new Ore-Ida "Steam n' Mash" frozen potatoes.

In the three years since Peltz came on the scene, Heinz's profits per share are up nearly 40% -- but the stock price is back where it stood then.

A few issues are dogging Heinz. Currency hedges that protect Heinz's profits from a strengthening dollar are helping earnings in the current fiscal year. But Heinz won't benefit from the hedges in its next fiscal year, starting in May, and that could depress earnings by up to 25 cents a share. The upshot could be little or no earnings growth for the year, below Heinz's target of 8% to 11% in annual gains.

Another problem: Peltz's Trian recently cut its Heinz stake to 2%. Both Heinz and Trian are downplaying the move, with a Trian spokesman telling Barron's Online recently that the firm "continues to be very pleased with its investment in Heinz" and that the sale is part of a "portfolio adjustment." Still, the Trian action clearly has raised concerns on Wall Street about more Trian sales.

Then, there's the economic backdrop. Food stocks should benefit as more Americans, and consumers around the globe, prepare more meals at home. However, branded food companies like Heinz could suffer at the hands of private-label brands.

None of that, however, seems to be fazing the management team at Heinz.

"We feel we're very well-positioned given the strength of our brands," says Chief Financial Officer Art Winkleblack. "I'm sure glad we're selling food and not washing machines or cars. People are coming home to Heinz."

That looks to be true not only in America but overseas, where Heinz now gets more than half its sales.

Heinz's most important international market is the U.K., where it generates 20% of total sales. Thanks to a long-standing presence, Heinz controls almost 80% of the British ketchup market, which is above the company's U.S. market share. It also has more than half the canned-soup market, with English staples like cream of tomato. And Heinz dominates in baked beans, a British breakfast favorite with toast.

Heinz also is Italy's leader in baby food with its Plasmon brand. Further afield, it has done well in Russia with ketchup and in China with baby food. Heinz gets 14% of its sales from developing markets, and has good prospects in those growing economies.

Amid shaky global markets and economies, this food maker's shares look more appealing than most. With a low P/E, an ample and safe dividend, and the possibility of takeover down the road, Heinz could be a zesty investment.

The Bottom Line
A low valuation gives Heinz the potential to rise this year, to a 45 a share from 36. Once credit markets come unstuck, Heinz could well become an acquisition target at 60 or more.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 28 Jan 2009 | 5:00 am

3 Tips for Renegotiating Your Mortgage

This week’s report that home sales had their biggest monthly jump in nearly seven years came with a dose of bad news: despite the 6.5 percent monthly increase in December, sales are still down 3.5 percent from a year earlier. And many of December’s transactions were “distress sales” as banks unloaded foreclosed properties and homeowners sold for less than they owed on their mortgages.

With the sagging economy, writing that monthly mortgage check has gotten harder for folks at all income levels. By the end of 2008, more than 1 million foreclosed homes were on the market, representing at least one-quarter of all properties for sale, according to RealtyTrac, a foreclosure tracking firm. And unlike in prior downturns, plenty of those are in affluent neighborhoods. Plunging property values have made it harder to determine the amount of equity homeowners have.

The good news is that banks are more willing than ever to help homeowners avoid foreclosure, and terms may improve further if Congress includes additional incentives for banks to help homeowners as part of the economic stimulus package under consideration, says Keith Gumbinger, vice president of mortgage market analyst firm HSH. Here’s what you need to know.

Don’t Wait Until You’ve Skipped a Payment

Traditionally, you had to be behind on your payments for a bank to even consider modifying your mortgage. But nothing is traditional today. Bank of America (BAC), Citigroup (C) and JPMorgan Chase (JPM)—which together service 37 percent of all mortgages in the U.S.—announced plans last fall to contact select borrowers before they fell behind to see if they qualify for a loan modification. If you’ve been laid off or your income has fallen, contact your mortgage servicer—that is, whomever you write the check to—and be prepared to document your claims.

Consider a Refinance

Refinancing might offer relief from high fixed-rate mortgages or adjustable-rate mortgages that are resetting to higher rates. You’ll need at least 10 percent equity in your home; check the home-price calculators at ofheo.gov and Zillow.com to find a quick estimate of your home’s worth. You’ll also need a credit score of at least 720 to qualify for good rates; forget about any loan if your score is below 650. As always, compare a variety of offers, but sticking with your original lender may save you on closing costs.

Don’t Despair

If you’re willing to make your loan payments, you’re already way ahead of the many borrowers who have walked away from their homes, says Moe Bedard, president of LoanSafe Solutions. The upshot? Banks have more incentive than ever to work with you. Plunging property values mean they’re recovering less now on foreclosures. Plus, many that received cash infusions from the U.S. Treasury are under pressure to show that they’re responding to the housing crisis. Take advantage.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 28 Jan 2009 | 5:00 am

5 Stocks That Topped Earnings Estimates (Screens)

It’s too early in earnings season to call the numbers God-awful. For now, let’s say they’re merely grim.

Standard & Poor’s says 118 members of its 500-stock index had reported quarterly results by Monday. More than half did worse than Wall Street was expecting. And estimates are usually rigged low; in a typical year more than two-thirds of companies report pleasant surprises.

Reporting companies were expected to contribute a combined $5.18 cents of operating profits to quarterly earnings underlying the S&P 500 index. They’ve delivered just $2.55. Their sales have shrunk 8%.

Also, those earnings figures don’t include things like provisions for severance pay and write-downs of assets of dubious worth, like goodwill. Include everything and earnings season might be misnamed. So far, companies have reported a net loss.

On the almost-bright side, the mix of reporting companies so far includes a disproportionate number of financial firms. As less-troubled industries report in coming weeks, results might improve. Still, as things stand now, fourth-quarter 2008 earnings underlying the S&P 500 index are projected to shrink to $11.36 from $15.22 in 2007—and from $21.99 in 2006.

S&P index guru Howard Silverblatt warns that while paper earnings are ugly today, cash flow might plunge in a couple of months, as companies dispense funds related to recent layoffs. For example, departing workers might wish to take pension funds as a lump sum.

Against this backdrop, I recently went searching for good news -- companies that have beaten earnings estimates of late. Plenty have, but I wanted ones that did so without excuses, no matter how reasonable. For example, health-care giants McKesson (MCK) and Pfizer (PFE) did better than expected if we ignore giant legal charges for each. I passed on them.

I also wanted signs of growth, not mere cost-cutting, so I looked for positive sales surprises, too. A precious few companies turned up. Alas, valuations suggest some might be too popular.

Netflix (NFLX) grew fourth-quarter sales 19% and earnings per share 45%, the company said Monday. It increased its subscriber base by 26%, passing its own projections. Management says a recession might be driving consumers toward low-cost entertainment like DVD rentals, and that the company’s new streaming rentals are proving a hit with customers. More than a fifth of Netflix users have tried the service. Shares climbed nearly $5 to $35 Tuesday. They trade at 23 times forecast 2009 earnings and carry no dividend.

McDonald’s (MCD) on Monday said fourth-quarter profits fell to 87 cents a share from $1.06 a year earlier, but the earlier period included a tax benefit of 33 cents a share, so results were an improvement. Management offset a 10% rise in ingredient costs with modest price increases. Customer demand seems only to have strengthened. Sales at longstanding stores rose 7.2%. Shares fetch 16 times trailing operating earnings, which seems an ambitious price for a giant company at a time when single-digit price/earnings ratios abound. But a plump dividend adds appeal. Current yield: 3.4%.

Google (GOOG) didn’t make the cut. It beat sales and earnings forecasts, but only after writing down most of the $1.5 billion it invested in AOL, now part of Time Warner (TWX), and Clearwire (CLWR), which provides wireless high-speed Internet service. I mention Google to point out that, in a sign of how investor tastes have changed of late, it is now little more expensive than McDonald’s. Shares are 17 times trailing operating earnings.

Drug distributor Amerisource Bergen (ABC) last week said profits for its first fiscal quarter ended Dec. 31 rose 1% from a year earlier on flat sales. Higher sales of specialty medicines offset a drop in bulk orders. Over the past year the company has repurchased more than 7% of its outstanding stock — fitting, since its recently raised dividend works out to only around 13% of profits and a measly yield of just over 1%. Shares are priced about on par with the broad market, at 12 times earnings.

Have a look if you like at more names below.