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Markets & Finance

Movers: Fannie Mae, Freddie Mac, Lehman, Hercules, Anheuser-Busch, GE

Stocks on the move on Friday

From Standard & Poor's Equity ResearchFreddie Mac (FRE) and/or Fannie Mae (FNM) shares plunge after U.S. Treasury Secretary Paulson says his department is continuing talks with FNM and FRE, and their primary focus is supporting the two companies in their current form. The statement follows a The New York Times report that senior Bush administration officials are considering a plan to have the government take over Freddie Mac and/or Fannie Mae and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday. The article states that, "Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee -- which could be staggering -- would be paid by taxpayers." S&P downgrades FRE to strong sell from sell, and FNM to strong sell from hold.

Lehman Brothers (LEH) falls 3.05 to 14.25. In a 10-Q filing, LEH reports Level 3 assets at May 31, 2008, were $41.344 billion, vs. $41.979 billion at Nov. 30, 2007. S&P keeps hold.

Hercules (HPC) agrees to be acquired by Ashland (ASH) in a $3.3 billion deal. Terms: $18.60 cash and 0.093 ASH share for each HPC share. Total transaction value is $23.01 per HPC share, based on ASH's July 10 closing stock price and including $0.7 billion of net assumed debt.

InBev NV (INBVF.PK) boosted its takeover offer for Anheuser-Busch Companies (BUD) by $5 a share to $70 in an effort to seal a friendly deal with the iconic U.S. brewer, a person familiar with the matter said: WSJ.

General Electric (GE) posts $0.54, vs. $0.54 a year ago, second quarter EPS from continuing operations on 11% revenue rise. It sees third quarter EPS from continuing operations of $0.50-$0.54, reaffirms 2008 EPS from continuing operations guidance of $2.20-$2.30. Separately, GE is in deal to sell its Japanese consumer finance business to Shinsei Bank in deal valued at $5.4 billion.

UAL Corp. (UAUA) is down 0.59 to 3.58. UAUA says it expects non-cash charges in the second quarter of $2.6-$2.7 billion related to goodwill and asset impairments, severance and termination of some projects. UAUA also is among airline shares falling as crude-oil prices head higher. S&P reiterates sell.

Amkor Technology (AMKR) expects Q2 sales to be down 1%-2% from Q1, vs. previous guidance of a sequential increase in sale of 1%-3%. Says decrease in sales is due primarily to previously disclosed disruptions in production resulting from implementation of an enterprise resource planning system in its Philippine facilities. Says, at this time, the company is unable to determine impact that its reduced sales will have on previous guidance for gross margins, net income. S&P reiterates hold. Citigroup keeps sell.

Emulex (ELX) sees $111-$113 million Q4 revenues, non-GAAP EPS of $0.19-$0.20, vs. previous guidance of $118-$123 million revenues, $0.24-$0.27 non-GAAP EPS. Says it experienced a steeper decline in its Embedded Storage Products (ESP) than anticipated. Baird downgrades to neutral from outperform.

Chevron (CVX) reports that Q2 upstream earnings are expected to benefit from an increase in prices for crude oil and natural gas while downstream earnings are expected to be significantly lower than the first quarter. Additionally, "all other" charges are anticipated to be substantially higher compared with the first quarter.

United Rentals (URI) narrows its outlook range for full-year 2008 EPS to $2.65-$2.75, vs. previous view of $2.65-$2.85. Narrows total revenue guidance to $3.3-$3.4 billion from $3.3-$3.5 billion primarily due to lower-than-expected rental revenue. 2008 outlook excludes the impacts of the previously disclosed second quarter charge of $14 million related to the ongoing SEC inquiry, the company's preferred stock repurchase completed on June 9, 2008, and any share repurchases ultimately made pursuant to the above referenced tender offer for common stock.

Infosys Technologies (INFY) posts $0.54, vs. $0.46, first quarter EPADS on 23% revenue rise. Sees $2.32-$2.36 fiscal year 2009 EPADS on $4.97-$5.05 billion revenue.

Lawson Software (LWSN) posts $0.10, vs. $0.08, fourth quarter non-GAAP EPS on 9% revenue rise. Sees first quarter revenue of $195-$200 million (vs. fourth quarter's $233 million), non-GAAP EPS of $0.06-$0.07. For fiscal year 2009, sees total revenues of $920-$925 million, non-GAAP EPS of $0.43-$0.47. Approves increase of $200 million to its current share repurchase authorization.

Wynn Resorts (WYNN) announces that it is increasing its share buyback program by $500 million. Separately, announces that it expects second quarter GAAP operating income for its Las Vegas property to be in the range of $18-$22 million, and operating income for Wynn Macau to be in the range of $100-$106 million.

CV Therapeutics (CVTX) announces that it has received marketing authorization from the European Medicines Agency (EMEA) for ranolazine for the treatment of patients with chronic angina in all 27 European Union (EU) member states. This approval follows a positive opinion from the EMEA Committee for Medicinal Products for Human Use (CHMP) on April 24, 2008. The company expects ranolazine could be available to patients and physicians across Europe beginning in first part of 2009.

Longs Drug Stores (LDG) posts 1.1% higher June same-store sales (2.6% higher pharmacy, 0.4% lower front-end), 2.3% higher total retail drug store sales.

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