U.S. stock futures were lower this morning, pointing to a weaker start Thursday following a reprieve Wednesday. Concerns over financials toll center stage again as oil continued to swing higher. Some economic data released later today may affect trading as well: Philadelphia-area poll of activity for August, leading indicators for July and weekly jobless claims.Investors continued to fear nationalization of mortgage finance giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), each of which declined 27% and 22% Wednesday respectively. FNM and FRE are declining about 4.5% and 9% respectively in premarket trading. Jim Cramer thinks trading in the shares should be stopped for fear of manipulation as the short-selling rules ended.
Staying with financials, Citi lowered its third-quarter earnings estimates for Goldman Sachs (NYSE: GS), Lehman Brothers (NYSE: LEH) and Morgan Stanley (NYSE: MS) as it fears further writedowns, and a weaker business flow in addition to the seasonal slowdown. It cut its price target on Lehman to $35 from $50, but kept as Buy. Citi forecasts write-downs of $2.9 billion for Lehman, $1.8 billion for Goldman and $1.7 billion for Morgan Stanley.
As if that wasn't enough to raise concerns, the Wall Street Journal reports that the Federal Reserve called Credit Suisse (NYSE: CS) last month to check a rumor that the bank was preparing to pull a line of credit for Lehman Brothers, which CS told the FED wasn't true. At least this shows the Fed is serious about taking and implementing the moral authority it should be.
Moving away from financials, Barry Diller's IAC/InterActiveCorp. (NASDAQ: IACI) has completed its split into five publicly traded companies Thursday. As a result, HSN Inc., Interval Leisure Group Inc., Ticketmaster and Tree.com Inc. will make their trading debut as independent companies as HSNI, ILG, TKTM and TREE respectively. IAC common stock will trade under the symbol IACID until September 19, after which it will be trading under IACI again.
Limited Brands (NYSE: LTD) climbed 6.3% in after-hours trading after the clothing retailer and Victoria's Secret owner said its adjusted earnings came in better than analyst expectations as will full-year earnings. Salesforce.com (NYSE: CRM) shares, however, are down over 10% in premarket trading after its results, reported Wednesday after the close, didn't impress investors. Piper Jaffray downgraded CRM from Buy to Neutral.
Meanwhile, Microsoft Corp. (NASDAQ: MSFT), which for some strange reason doesn't like being portrayed by John Hodgman in Apple's commercials, has enlisted Jerry Seinfeld to as its pitchman. The new, very secretive, $300 million ad campaign will also have Bill Gates and the slogan may be something like "Windows, Not Walls."
Microsoft also launched a new web tool, Phtosynth, that makes digital photos into panoramas.
A lawsuit has been filed Tuesday against Apple Inc. (NASDAQ: AAPL) over "Defective iPhone 3G." The plaintiff, from Alabama, hopes the suit will become a class-action complaint. The suit alleges that the new iPhone's 3G performance and reliability has been subpar, despite the claims made by Apple's aggressive marketing campaign. Ars Technica says that "Considering that a true fix has yet to be issued for users' 3G problems, this could just be the tip of the iPhone lawsuit iceberg."
Reporting today are Hamburger chain Burger King (NYSE: BKC) and retailer Gap (NYSE: GPS).
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Reader Comments (Page 1 of 1)
8-21-2008 @ 9:19AM
Beltway Greg said...
American banks downgrading other American banks is the very definition of irony and nationalization of Freddie and Fannie is the best of all worst possible outcomes. Gates and Seinfeld? Really, I think Apple selected Hodgman because he resembled Gates.
Beltway Greg