- GM Posts $15.5 Billion Loss on Lease Costs, U.S. Sales Slump
- How Funds’ SemGroup Bet May Yet Pay
- Wachovia Risk Chief to Leave
- Greenspan Says Housing Prices Not Yet Near Bottom
- Merrill Defrauded Auction-Rate Investors, State Says
- Fidelity Magellan Sells Stake in Citigroup, Buys AIG
- Toscafund Discloses Stakes in WaMu, Sovereign Bancorp
- Wal-Mart Warns of Democratic Win
- MasterCard Falls Most Since IPO as Expenses Increase
- Yahoo’s Yang Has Little to Show Investors After Icahn Truce
- Powerchip Shares Fall After Chairman Huang Indicted
- ANALYSIS-ImClone bid sparks biotech rally, maybe premature
- Biogen, Elan Report Brain Infection in Tysabri Users
- Arcelor considers counter-bid for Alpha
- Detroit’s Losses Mount on Leasing Operations
- GMAC’s Loss Spurs Ripples
GM Posts $15.5 Billion Loss on Lease Costs, U.S. Sales Slump
- Bloomberg
General Motors Corp., the largest U.S. automaker, reported a second-quarter loss of $15.5 billion because of strains from truck leases, costs from labor disputes and plunging U.S. sales.
The deficit of $27.33 a share marks GM’s fourth straight quarterly loss and compares with a profit of $891 million, or $1.56, a year earlier. Sales fell 18 percent to $38.2 billion, the Detroit-based automaker said in a statement today…..
How Funds’ SemGroup Bet May Yet Pay
- Wall Street Journal
SemGroup LP’s collapse could make winners out of two little-known hedge funds that tossed the energy company a lifeline shortly before it filed for bankruptcy protection.
In late June, Alerian Capital Management LLC, of Dallas, and Manchester Securities Corp., of New York, agreed to lend $150 million to SemGroup. The hedge funds, both experienced energy investors, were approached by SemGroup at a time when it needed cash to meet margin calls on futures contracts and derivative trades that went against the closely held Tulsa, Okla., company…..
Wachovia Risk Chief to Leave
- Wall Street Journal
Wachovia Corp. said its chief risk officer, Donald Truslow, intends to retire, marking the second high-profile departure at the bank in the last week and another sign that new Chief Executive Officer Robert K. Steel is shaking up the struggling bank’s executive suite.
Mr. Truslow, 50 years old, started with Wachovia in 1980 and became chief risk officer in 2000. He plans to leave the bank after a successor is named, the company said….
Greenspan Says Housing Prices Not Yet Near Bottom
- Bloomberg
Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating.
While the odds of a recession are 50-50, achieving stable markets will “take a while,” Greenspan said today in a CNBC interview…..
Merrill Defrauded Auction-Rate Investors, State Says
- Bloomberg
Merrill Lynch & Co. was accused by Massachusetts Secretary of State William Galvin of misleading investors about the stability of the auction-rate market at the same time the investment bank was marketing the securities.
New York-based Merrill “co-opted” its research department to help place the securities with customers, Galvin said in a statement from Boston today. The state’s administrative claim asks the third-largest U.S. securities firm to “make good” on sales of now-frozen holdings, compensate investors who disposed of their bonds or shares at a loss and pay an unspecified fine…..
Fidelity Magellan Sells Stake in Citigroup, Buys AIG
- Bloomberg
Fidelity Magellan Fund manager Harry Lange sold a $328 million stake in New York-based Citigroup Inc. in June before the largest U.S. bank by assets reported a $2.5 billion second-quarter loss, its third straight.
Lange increased his holdings in insurer American International Group Inc. by 20 million shares, or $650 million at its average price in June, and investment bank Goldman Sachs Group Inc. by 2 million shares, or $351 million, data compiled by Bloomberg show. Both companies are based in New York…..
Toscafund Discloses Stakes in
WaMu, Sovereign Bancorp – Bloomberg
Toscafund Asset Management LLP, the London hedge fund founded by Martin Hughes, disclosed stakes in Washington Mutual Inc. and Sovereign Bancorp Inc., showing the firm is a top holder in the two biggest U.S. savings and loans.
Toscafund owned 105.5 million shares, or 6 percent, of Seattle-based Washington Mutual, according to a filing today with the U.S. Securities and Exchange Commission. The fund bought a 5.1 percent stake of Sovereign, or 33.5 million shares, it said in a separate filing. Combined, the investments are valued at about $880 million as of today’s close…..
Wal-Mart Warns of Democratic Win
- Wall Street Journal
Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they’ll likely change federal law to make it easier for workers to unionize companies — including Wal-Mart.
In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized…..
MasterCard Falls Most Since IPO as Expenses Increase
- Bloomberg
MasterCard Inc., the world’s second- biggest credit-card company, suffered the worst decline in New York trading since it went public in 2006 as U.S. spending growth slowed and expenses exceeded analysts’ estimates.
MasterCard fell $26.58, or 9.8 percent, to $244.15 in New York Stock Exchange composite trading at 4:15 p.m. after slumping 12 percent earlier. Excluding a previously announced $1 billion settlement charge, the company’s second-quarter profit of $276 million, or $2.11 a share, beat analysts’ estimates by nine cents….
Yahoo’s Yang Has Little to Show Investors After Icahn Truce
- Bloomberg
Yahoo! Inc. Chief Executive Officer Jerry Yang faces shareholders at his first annual meeting today with little progress to report after he spent half of his tenure fighting to retain control of the Internet company.
Since Yang took over in June 2007, the stock is down 29 percent. The company has lost market share in Internet searches in the U.S., dropping to 20.9 percent in a business it pioneered. Analysts estimate net sales growth will slow to 10 percent this year, the fifth straight annual decline….
Powerchip Shares Fall After Chairman Huang Indicted
- Bloomberg
Powerchip Semiconductor Corp., Taiwan’s biggest maker of computer-memory chips, fell the most in more than five years in Taipei after prosecutors indicted Chairman Frank Huang for insider trading and breach of trust.
Powerchip tumbled 7 percent, the daily limit, to NT$6.68 as of 11:07 a.m. on the Taiwan Stock Exchange, the biggest decline since June 23, 2003. The benchmark Taiex index lost 1.3 percent…..
ANALYSIS-ImClone bid sparks biotech rally, maybe premature
- Reuters
Bristol Myers Squibb Co’s bid for longtime cancer-drug partner ImClone Systems Inc on Thursday sparked a biotech rally, but it might be premature to assume a wave of other biotech deals will soon follow.
The American Stock Exchange Biotech Index .BTK rose 4.1 percent on news of Bristol’s $4.5 billion offer for ImClone, amid a sharp downturn for the broad stock market. The index has risen 14 percent in the past year, compared with a 14 percent decline for the Dow Jones industrial average…..
Biogen, Elan Report Brain Infection in Tysabri Users
- Bloomberg
Biogen Idec Inc. and Elan Corp. reported two confirmed cases of a deadly brain infection in patients taking the multiple sclerosis drug Tysabri, the first since the drug was reintroduced in the U.S. in 2006.
The report sent shares of both companies tumbling. The two patients were in the European Union, Biogen said today in a regulatory filing. The cases of the disease, progressive multifocal leukoencephalopathy, were confirmed this week, according to the company’s statement….
Arcelor
considers counter-bid for Alpha – Financial Times
ArcelorMittal is considering whether to disrupt the $8.8bn takeover of US coal miner Alpha Natural Resources by Cleveland-Cliffs with a counter-bid, people close to the companies say.
ArcelorMittal, the world’s largest steelmaker, is also considering other options, including waiting for the deal to fall apart or sitting on the sidelines until it closes so it can buy the combined company….
Detroit’s Losses Mount on Leasing Operations
- NY Times
The glory days of automotive leasing are sputtering out, along with the value of used trucks and sport utility vehicles.
With consumers flocking to smaller cars, Detroit’s automakers are taking huge losses on the leases that once drove the boom
in trucks and S.U.V.’s. And as their losses mount, the auto companies are rapidly moving away from leasing as a financing tool…..
GMAC’s Loss Spurs Ripples
- Wall Street Journal
Financial giant GMAC LLC reported a $2.48 billion net loss for the second quarter amid a dramatic reversal of fortune in its auto-financing business, underscoring the deep trouble facing U.S. auto makers and setting the stage for General Motors Corp. to report a massive loss of its own Friday.
A year ago, GMAC, which is owned by GM and Cerberus Capital Management LP, reported net income of $293 million on the strength of its auto-financing operations. It has been relying on auto-financing profits to soften the blow of losses in a home-mortgage unit that has lost billions of dollars on subprime home mortgages….
