Spotlight Stocks: AIG, Bank of America, Citigroup, National City
Friday's top stories and stocks with potential to move.
Stocks to watch for Friday, June 6, 2008:
- American International Group (AIG) is being investigated by the Securities and Exchange Commission to determine if it overstated the value of contracts linked to subprime mortgages, reported The Wall Street Journal, citing to people familiar with the matter. The way the company valued credit default swaps, which it sold to holders of investments called collateralized-debt obligations, or CDOs, backed in part by subprime mortgages, is in question.
- Bank of America (BAC) has won approval from the Federal Reserve to purchase mortgage lender Countrywide Financial (CFC). The $4 billion acquisition was made in January after, in the late months of 2007, the company lost about $1.6 billion in bad loans to people with shaky credit. Bank of America has said it will tighten those lending standards, reported the Associated Press.
- Broadcom's (BRCM) former co-founder Henry T. Nicholas III, who was charged in an enormous stock-option backdating case, allegedly had a narcotics warehouse, hired prostitutes and drugged associates. Defense attorney Gregory Craig said that Nicholas was innocent and would prevail.
- Citigroup (C) will close its consumer lending outlets in Japan as the country's moneylending industry struggles, reported Reuters. The company will close the remaining 32 outlets of its Dic brand, along with 540 unmanned auto loan machines.
- National City Corp's (NCC) banking system has entered into a "memorandum of understanding" with Office of the Comptroller of the Currency, which The Wall Street Journal reports is akin to being on probation. The specific terms of this agreement are unknown, but typically banks are given an opportunity to work with federal regulators to address serious financial problems without triggering alarm among depositors.
Asian trading closed with the Hang Seng +0.61%, Nikkei +1.03%, Sensex -1.25%, Taiwan +0.08% and Shanghai -0.66%.
Over in Europe we find the CAC +0.10%, DAX +0.04%, FTSE +0.07%, ATX +0.40%, Swiss Mkt. -0.52% and Stockholm -0.23%.
Commodities are forging ahead with crude oil up +1.86 to 129.65 and gold higher +13.9 to 889.4 this morning.
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