U.S. stock futures turned higher Wednesday after the Federal Reserve, in a coordinated move with other central banks, cut rates by half a point to 1.5%, in an effort to help credit markets and boost financial markets. Before the rate cut, futures were lower as Wall Street was about to join global markets in a world-wide plunge that saw the Nikkei down 9.4% and European main markets down 5-6%. On the economic front, August pending home sales released later today might crimp the mood somewhat.Alcoa Inc. (NYSE: AA) kicked off earnings season after the close Tuesday. The world's third-largest aluminum producer reported a 52% drop in third quarter profit as sharply lower aluminum prices and lower demand hurt results. AA shares are down 4% in pre-market trading.
American International Group Inc. (NYSE: AIG) -- in what could only be described as unbelievable nerve, days after the $85 billion federal bailout loan, AIG spent $440,000 on a posh California retreat for its executives that included spa treatments and much more. Lawmakers were enraged over the thousands of dollars AIG spent on executives even as the company was staving off bankruptcy. It seems it is morally bankrupt. AIG stock is recovering 5.4% this morning after the rate cut.
Costco Wholesale Corp. (NASDAQ: COST) continues to do well in this economic climate and on Wednesday said its fiscal fourth-quarter profit rose nearly 7%. Earnings rose to $397.8 million, or 90 cents a share. Analysts, on average, estimated Costco would earn 92 cents a share. Same-store sales rose 9% in the quarter. Wal-Mart Stores Inc. (NYSE: WMT) saw its same-store sales climb 2.4%. In general, though, retailers are reporting weak sales figures for September.
Research in Motion (NASDAQ: RIMM) whose stock has been cut nearly in half the past month alone, on Wednesday launched a new touch-screen version of its BlackBerry blockbuster, Storm, just in time for the crucial holiday season. Nokia (NYSE: NOK) has unveiled its own version last week. Can either be a match to Apple Inc.'s (NASDAQ: AAPL) iPhone? Apple also has Google Inc.'s (NASDAQ: GOOG) Android platform recently released to contend with as well.
Yum Brands Inc. (NYSE: YUM) shares are up over 4% in pre-market trade after reporting its third-quarter profit rose 4.4% from a year ago. The company also backed its 2008 profit outlook.
Analyst calls:
- Bank of America (NYSE: BAC) - Keefe Bruyette upgraded from Underperform to Market Perform despite the bank struggling to find buyers for a $10 billion stock offering Tuesday. BAC shares are 6% lower in pre-market action.
- Kimberly-Clark (NYSE: KMB) - Morgan Stanley upgraded from Underweight to Equalweight.
- Safeway (NYSE: SWY) - Jefferies upgraded from Underperform to Hold.
- Bristol-Myers Squibb Co. (NYSE: BMY) - Merrill Lynch upgraded from Underperform to Buy on valuation.
- Pfizer (NYSE: PFE) - Merrill Lynch upgraded from Underperform to Buy, citing dividend yield and business.
- Lowe's Corp. (NYSE: LOW) - Rochdale Securities upgraded from Sell to Hold.
- AT&T Inc. (NYSE: T) - RBC Capital Mkts downgraded from Outperform to Sector Perform.
- General Motors (NYSE: GM) and Ford (NYSE: F) - Citigroup downgraded both Detroit carmakers from Hold to Sell. Shares of both are higher in pre-market trade.
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Reader Comments (Page 1 of 1)
10-12-2008 @ 12:54PM
dean said...
why the heck is A T & T down. What does this great company have to do with the recovery. They are not in the lending business.