Jun 18, 2008

Wednesday, June 18, 2008

Pre Market - Trader Talk with Bob Pisani - CNBC.com

Futures are weaker due to poor commentary from a number of key players.

FedEx

FEDEX CORP

FDX

84.33 UNCH 0%

NYSE

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[FDX 84.33 --- UNCH (0%) ] is the main story this morning, and it is not a pretty picture. Earnings of $1.45 was a bit shy of consensus of $1.47, but that wasn't the big problem. Guidance for the current quarter is well below expectations: $0.80-$1.00 vs. $1.27, as is the full year guidance of $4.75-$5.25 vs. $5.92 consensus.

"Record high fuel prices and the weak U.S. economy dampened volume growth and substantially affected our bottom line," CEO Frederick Smith said.

International continues to grow: 6 percent growth in International Priority, but that was offset by continuing declines in U.S. domestic express shipments.

FedEx down about 5 percent pre-open.

Elsewhere:

1) Morgan Stanley

MORGAN STANLEY

40.59 UNCH 0%

NYSE

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[MS 40.59 --- UNCH (0%) ] beat expectations ($0.95 vs. $0.92 expectations), but not by nearly as much as Goldman Sachs. There were declines in fixed income (85 percent below the levels for the same period last year), including a curious $120 million negative adjustment to marks previously taken in a trader's book that did not comply with Firm policies. Traders also noting that they had a sizeable gain ($1.43 b) from sale of two assets, ex-those one-time gains they had little in the way of earnings. Down 5 percent pre-open.

2) Fifth Third

FIFTH THIRD BANCORP

FITB

12.73 UNCH 0%

NASDAQ

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[FITB 12.73 --- UNCH (0%) ], one of the nation's largest regional banks, based in Cincinnati, is raising capital by issuing $1 B in convertible preferred shares. They are also reducing their quarterly dividend reduced to $0.15, down from prior $0.44. Kudos to BMO Capital Markets, who issued a report last Friday correctly predicting they would cut their dividend at least 50 percent and likely initiate a capital raise. Down 16 percent pre-open.

3) MF Global

MF GLOBAL

13.26 UNCH 0%

NYSE

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[MF 13.26 --- UNCH (0%) ]is down 15 percent pre-open, after warning that first quart revenues would come in below estimates; they will also be selling $150 m in preferred stock.

It wasn't all bad news:

--trucking giant YRC Worldwide

YRC WORLDWIDE INC

YRCW

16.77 UNCH 0%

NASDAQ

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[YRCW 16.77 --- UNCH (0%) ] affirmed its guidance for the quarter despite higher fuel costs; up 6 percent pre-open.

--General Mills

GENERAL MILLS INC

GIS

60.73 UNCH 0%

NYSE

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[GIS 60.73 --- UNCH (0%) ] raised its guidance, though they did not say why. Up 1 percent pre-open

FedEx Hit By High Oil Prices, Weak Economy - Trader Talk with Bob Pisani - CNBC.com

Opening View: Morgan Stanley Reports Earnings, Fifth Third Slashes Dividend

Following up yesterday's earnings report from Goldman Sachs, Morgan Stanley (MS: sentiment, chart, options) reported a profit from continuing operations of 95 cents per share, versus expectations for a profit of 92 cents per share. Revenue fell 38% from last year to $6.5 billion. Following the news, MS shares fell more than 2% in electronic trading.

Also in earnings, shipping specialist FedEx (FDX: sentiment, chart, options) reported a fourth-quarter loss of 78 cents per share, compared to last year's gain of $1.96 per share. Excluding items, the speedy-delivery firm banked a profit of $1.45 per share, just shy of expectations for a profit of $1.47. Revenue rose 8% to $9.87 billion. Looking ahead, FDX expects first-quarter earnings of 80 cents to $1.00 per share, versus the consensus estimate for $1.35 per share.

In banking, Cincinnati, Ohio-based Fifth Third Bancorp (FITB: sentiment, chart, options) announced late last night that it will cut its dividend and raise $1 billion in new capital from convertible preferred shares. FITB is lowering its second-quarter cash dividend to 15 cents per share, down from 44 cents per share the prior quarter. Fifth Third also announced that it has replaced chairman George Schaefer, Jr. with CEO Kevin Kabat, effective Tuesday. The new dividend is payable on July 22 to holders of record on June 30.

Finally, the travel-and-leisure sector could take a big hit today after ABN Amro placed several firms under the ratings knife. The group cut its 2009-2010 earnings forecast for the sector by 16%, bringing it 15% below the consensus estimate. "We find it hard to believe that demand (volume or price) from the business and/or leisure consumer will not reduce over the next 12 months; western GDP trends are slowing, business activity is softening, the credit cycle has turned, and consumer balance sheets are in many cases over-leveraged."

Accompanying the research note, ABN Amro downgraded Carnival (CCL: sentiment, chart, options) , Enterprise Inns (ETINF), Martsons, and Ladbrokes (LDBKY) to "hold from "buy." The brokerage firm also downgraded Royal Caribbean ( RCL: sentiment, chart, options) to "sell" from "buy," and lowered J.D. Wetherspoon (JDWPY) and Accor (ACRFF) to "sell" from "hold."

Opening View: Morgan Stanley Reports Earnings, Fifth Third Slashes Dividend

NYSE Pre Market Trading Arca Morning Update

Stocks trading on NYSE Arca at a price more than 15% away from the previous trade day's consolidated close price. (As of 08:30:00 ET)

Stock	Tuesday's Close	Current Price	Pct Chng	Current NYSE Arca Vol
FITB	$12.73	$10.70	( 16%)	419,320
MF	$13.30	$11.20	( 16%)	2,100
LNN	$124.55	$104.96	( 16%)	19,415

10 Most Active stocks on NYSE Arca as of 08:30:00 ET

Based on Dollar Volume:

Based on Share Volume:

Stock	Dollar Volume
SPY	$355,557,791
QQQQ	$28,923,501
FDX	$16,335,328
IWM	$16,075,132
SDS	$9,953,820
TOT	$8,858,123
RDS.A	$8,771,006
PFE	$8,559,499
USO	$7,938,317
MS	$7,066,227

Stock	Share Volume
SPY	2,641,257
QQQQ	598,875
PFE	468,148
FITB	419,320
IWM	219,700
FDX	203,626
XLF	196,972
MS	180,397
SDS	162,496
TOT	110,600

FITB:

Fifth Third to raise $2B capital, cut dividendAP(Wed 8:33am)
Futures Point to Early Decline for Stocksat TheStreet.com(Wed 8:30am)
Fifth Third to raise $2 billion capital, cut dividendReuters(Wed 8:21am)
Indications: U.S. stock futures drop on Fifth Third, FedEx resultsat MarketWatch(Wed 8:12am)
[$$] Fifth Third Cuts Dividend, Looks to Raise New Cashat The Wall Street Journal Online(Wed 7:51am)
Fifth Third to raise $1B in capital, replace chairmanat MarketWatch(Wed 7:39am)
CORRECT: Fifth Third Bancorp's CEO Kabat named as chairmanat MarketWatch(Wed 7:38am)
Fifth Third cuts dividendat Fortune(Wed 7:34am)
FIFTH THIRD BANCORP Files SEC form 8-K, Change in Directors or Principal Officers, Regulation FD Disclosure, Other EvEDGAR Online(Wed 7:21am)
Fifth Third Bancorp Announces Offering of Convertible Preferred StockPR Newswire(Wed 7:19am)

MF:

MF GLOBAL LTD. Files SEC form 8-K, Regulation FD DisclosureEDGAR Online(Wed 6:02am)
MF Global issues 1Q revenue forecastAP(Tue 7:00pm)
MF Global to offer $150 mln of shares, $150 mln of debtat MarketWatch(Tue 5:14pm)
MF Global to Offer $150 Million of Convertible Preference Shares and $150 Million of Convertible Senior NotesBusiness Wire(Tue 5:04pm)

LNN:

Lindsay fiscal 3Q profit jumps 89 percentAP(Wed 8:29am)
Lindsay Corporation Reports Fiscal 2008 Third Quarter, Nine Month ResultsBusiness Wire(Wed 8:00am)
Q3 2008 Lindsay Corporation Earnings Release - Before Market OpenCCBN(Wed 7:07am)

NYSE Arca Morning Update

Pre Market Trading, Gaps

Gapping up:

PANC +14.3%, YRCW +8.4%, PNRA +5.4%, LINE +4.3%, BEZ +2.6%, AMTD +2.0%, PFE +1.6%, GOLD +1.1%...

Gapping down:

MF -16.5%, HOO -11.7%, FITB -10.8%, ABK -4.7%, CLC -3.0%, GFI -2.8%, OGE -2.6%, NOVL -2.4%, BP -2.3%, GCI -2.2%, ELN -2.2%, RDS.A -2.1%, UBS -1.9%, BHP -1.8%, NOK -1.6%, TOT -1.3%, APL -1.2%.