- Pre-Market Indications

Friday, June 20, 2008

Opening View: Washington Mutual Slashes Jobs, Winnebago Reports Earnings

U.S. stock futures are broadly lower this morning, indicative of a potentially negative start to the regular session of trading. A rise in crude prices ahead of this weekend's summit in Saudi Arabia and job cuts at Washington Mutual (WM) are weighing negatively on investor sentiment this morning. Other stocks in focus include Winnebago (WGO), which reported a 73% drop in third-quarter earnings, and Western Union (WU), which boosted its fiscal 2008 earnings outlook.

In currencies and commodities, the U.S. Dollar Index is off 0.60% to 73.03 in pre-market trading. Elsewhere, gold futures are extending yesterday's gains, rising $2.40 to $906.60 an ounce in London trading. The big news, however, is the $1.43 jump in crude futures to $133.98 per barrel. Overnight, China moved to hike fuel prices in the country, and Saudi Arabia is slated to meet with oil producers this weekend to discuss rising prices. According to Goldman Sachs, China's fuel hikes may in fact increase, rather than decrease, demand, because refineries will have more of an incentive to produce.

In equity news, Washington Mutual (WM: View sentiment for WMsentiment, chart, options) announced after the close last night that it is cutting 1,200 more jobs as part of efforts to reduce costs and return to profitability. More than half of the cuts, some 775 positions, are in California and Florida. Fittingly, these 2 states were formerly red hot in the housing market and have since been hit hard by the mortgage crisis.

In other news, Western Union (WU: View sentiment for WUsentiment, chart, options) boosted its earnings growth expectations for 2008 by 15% to 18%, up from 12% to 14% earlier. The company also reaffirmed its revenue growth objective of 10% to 12%. WU now expects 2008 earnings of $1.18 to $1.22 per share, down from its previous guidance of $1.19 to $1.23, due to higher restructuring expenses. Additionally, WU authorized another $1 billion for share repurchases.

Finally, in earnings news, Winnebago Industries (WGO: View sentiment for WGOsentiment, chart, options) said that third-quarter earnings were $3 million, or 10 cents per share, compared to $11.3 million, or 35 cents per last year. Revenue dropped 39.7% to $139.7 million. "The motor home market has changed significantly in the past year, with dramatic declines in the past few months," said CEO Bob Olson.

Opening View: Washington Mutual Slashes Jobs, Winnebago Reports Earnings

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