Stocks in the news: Capital One, Intel, Target
byMay 11th 2009 9:00AM
The following post rounds up the companies making headlines today:
Capital One Financial Corp. (COF), U.S. Bancorp (USB) and BB&T Corp. (BBT) are racing to repay government bailout funds after stress tests showed they wouldn't need additional capital to weather worsening economic conditions. The financial institutions said they would sell shares to repay TARP, and BB&T has also announced a dividend cut. COF shares dropped 11 percent in pre-market trading, USB's 5 percent, BBT's 3 percent.
Intel Corp. (INTC) may face a record fine of more than 1 billion euros ($1.36 billion) as it is accused by the European Union of impeding competition and harming consumer by giving computer sellers rebates to exclude a rival's chips. It will also be ordered to stop the discounts if the EU rules against it. INTC shares declined 1 percent before the bell.
HSBC Holdings (HBC) said Monday that its first-quarter underlying profit was substantially ahead of a year earlier due to $6.6 billion of one-off gains as the value of its debt declined. Excluding the gains, underlying pretax profit was down compared to a year ago, but still higher than the final quarter of 2008. HBC shares declined 2.6 percent in pre-market trade.
Mitsubishi UFJ (MTU) said it's increasing its stake Morgan Stanley (MS) to over 20 percent by buying 25 million shares at $24 each for a total of $600 million. Meanwhile, Merrill Lynch raised its rating on Morgan Stanley to Buy from Neutral. MS shares declined 2.5 percent as did MTU shares in pre-market trade.
Target Corp. (TGT) was upgraded Friday at both JPMorgan and Credit Suisse on improved outlooks for both its credit-card segment and retail-store operations. Meanwhile, activist investor William Ackman is not resting, taking aim at Target's board. He called a meeting in Manhattan Monday to introduce his slate of five dissident directors -- including himself -- that he is asking shareholders to elect May 28.
AstraZeneca (AZN) said that a late-stage trial showed its Brilinta heart drug, used to treat acute coronary syndromes, worked better than Plavix, made by Bristol-Myers Squibb (BMY) and Sanofi-Aventis (SNY). AZN shares climbed about 6 percent before the bell.
AT&T (T) is going to buy licenses, network assets and 1.5 million wireless subscribers in 79 service regions of Verizon Wireless for $2.35 billion to meet government requirements after its purchase of Alltel. Integration costs will hurt AT&T earnings per share by 6 cents in the first year after closing before improving after that. Verizon Wireless is held by Verizon Communications (VZ) and Vodafone Group (VOD).
Berkshire Hathaway (BRK.A) reported late Friday a $1.5 billion loss, or $990 per class A equivalent share, on investment and derivatives losses. Operating earnings were also down slightly from last year at the Warren Buffett company.
Bank of America (BAC) and Citigroup (C) are the big winners from the government's stress tests, according to the derivatives market as the cost of protecting against a default by Citigroup and Bank of America dropped by more than a third last week. The cost of default protection on other banks has also fallen.