Ticker Shock: Circuit City, Apple, Wachovia Get Powered Down
Monday's top stories and stocks with potential to move.
Good news and bad news this morning.
First, the good news: The House is expected to vote on the "bailout plan" today, which is what we've all been waiting for. The bad news; It looks like that $700 billion will come, or could come, in stages. From what I'm seeing, it could be $250 billion upfront, $100 billion requested by the President, and the final $350 billion upon Congressional approval.
Congress has been dining on surf and turf for years, and now they decide to get cheap and whip out the coupon book - which is what they're essentially doing by working this thing in stages.
Of course, we are talking about Washington, which is always a crap shoot.
Investors didn't seem to like what they were hearing. Asia and Europe were blinking red prior to the US open. The Dow futures were off almost 200 at one point, but are now down about 150. It still looks kind of ugly.
Wachovia Bank (WB)
There'd been talk over the weekend that several potential suitors might have been kicking the tires, including Wells Fargo (WFC), Citigroup (C) and Madrid-based Banco Santander (STD). In spite of this, the rumor was that any price paid or any takeout price wouldn't be anywhere near, much less north, of the $10 at which Wachovia's shares closed at on Friday.
At about 5:30 a.m., when I flicked on CNBC, the outcome was still an unknown. Then news came out that Citi was going to buy the firm's deposits, along with billions in loans. Details are still a bit sketchy, but it appears as though the FDIC is going to be taking on some of the company's liabilities.
A sad day for Wachovia shareholders - it looks like the bank is going to open below a buck.
The only plus I see here is for Citi and its shareholders. But exactly what it will mean in terms of dollars and cents has yet to be laid out, and it's hard to tell at this point.
Citi shares appear as though they'll open slightly lower. By the way - Citi also said its going to cut its dividend in half.
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