Movers: GM, Rohm & Haas, Dow Chemical, Biovail
General Motors (GM) is in focus after the Wall Street Journal reports that the federal government committed $6 billion to stabilize GMAC, a financing company vital to the future of GM. The Treasury Dept. also said it set up a separate program within TARP to make investments directed at the auto industry.
Rohm & Haas (ROH) is higher as Bloomberg reports that Dow Chemical (DOW) lenders including Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS) may press DOW to renegotiate its takeover of Rohm & Haas (ROH) to avoid losses on a $13 billion loan to fund the deal.
Following news that Kuwait Supreme Petroleum Council will not approve the joint venture that Dow Chemical (DOW) was to enter into, S&P Ratings Services lowered its corporate credit and senior unsecured ratings on DOW to 'BBB' from 'A-'. Long-term ratings on DOW and 'A-2' commercial paper rating remain on CreditWatch with negative implications. Moody's also cut credit rating for DOW.
A-Power Energy Generation Systems Ltd. (APWR) cuts $158 million fourth quarter revenue view to about $76 million and $15.5 million net income to about $5 million. It cites delayed contract closings.
China Eastern Airlines (CEA) - According to Reuters, CHE said on Monday it would receive a capital injection from the government totaling 7 billion yuan ($1.02 billion), more than double its previous plan. In exchange for the capital, the airline would issue 1.44 billion new Shanghai-listed A shares to its state-owned parent group at 3.87 yuan each, as well as 1.44 billion Hong Kong-listed H shares at 1.00 yuan each.
Rick's Cabaret International (RICK) posts lower-than-expected $0.91, vs. $0.51 a year ago, fiscal year 2008 EPS on 87% revenue rise. He sales from nightclub operations for same-location, same-period increased by 15%. The Street was looking for fiscal year 2008 EPS of $1.00. Merriman Curhan cuts estimates.
Biovail (BVF) announces voluntary recall of certain lots of Ultram ER 100mg tablets from pharmacies and wholesalers because certain lots are out-of-specification by about 1% with respect to maximum dissolution at the 8-hour mark. Estimates recall will hurt Ultram ER revenues by $4.4 million in the fourth quarter 2008, the majority of which is expected to be recognized in the first quarter 2009 as replacement shipments of Ultram ER 100mg tablets are made to the company's marketing partner, PriCara.
Savient Pharmaceuticals (SVNT) says FDA has accepted for review the company's Biologics License Application (BLA) for pegloticase, a novel biological drug for treatment-failure gout (TFG) patients. FDA also granted company's BLA with a priority review status which accelerates the review period to six months. Under priority review, target date for FDA decision on the pegloticase BLA is 4/30/09.
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