Deutsche Bank (NYSE: DB) warned of a fourth-quarter loss of some $6.4 billion, mostly due to poor performance in its credit business but also because of some equity trading losses. It expects to have further write-downs on its exposure to bond insurers. DB shares were nearly 10% lower in premarket trade.
Morgan Stanley (NYSE: MS) and Citigroup (NYSE: C) late Tuesday announced their plan for a brokerage joint venture. Citi sold to Morgan a 51% stake in its Smith Barney unit for $2.7 billion. When the deal closes, Citi said it will recognize a gain of roughly $5.8 billion after taxes. There were no real surprises there. With that, Citi, which has become a financial supermarket, is now seen as trying to save its core banking unit by shrinking itself by one-third, according to the Wall Street Journal, which also reported that "Citi will also announce steps to shed two consumer-finance units and the company's private-label credit-card business, and scale back on the trading the company does on its own behalf." MS shares were over 3% lower in premarket trading, Citi' over 4.5% lower.
Bunge Ltd. (NYSE: BG) lowered its 2008 earnings estimate to $7.70 a share due to soft soybean commodity markets. Its 2009 earnings forecast was also below analyst estimates. BG shares were down over 8.5% in premarket trading.
HSBC Holdings (NYSE: HBC) is another European banking giant that's been hurting today after analysts from Morgan Stanley said Wednesday in a research note it may need to raise $30 billion in equity and slash its dividend in half. HSBC has so far been perceived as one of the strongest banks in the world. HBC shares were down over 7.2% in pramerket trading.
Job cuts:
Pfizer Inc. (NYSE: PFE) announced Tuesday it is laying off up to 800 scientists this year as it is trying to refocus disappointing research efforts and lower costs as revenues plunge.
Oracle Corp. (NASDAQ: ORCL) has also trimmed its workforce, but not as much as some people speculated as on Friday it cut around 500 positions in its North American sales and consulting businesses, much less than the rumored 10% of its workforce. ORCL shares were down about 1.7% in premarket trading.
Analyst calls:
- Merrill Lynch cut its rating on Siemens (NYSE: SI) to Neutral from Buy and cut its price target. SI shares were down 9.9% in premarket trading.
- Citigroup downgraded Anglo American (NASDAQ: AAUK) from Buy to Hold as part of a big downgrading of miners. AAUK shares were down 4.5% in premarket trading.
- Collins Stewart started Amazon.com Inc. (NASDAQ: AMZN) with a Buy and a $65 target price and eBay Inc. (NASDAQ: EBAY) with a Sell and a $10 target. EBAY shares were down 3% in premarket trading.
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