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Spotlight Stocks: IBM, Freddie Mac, Merrill, Yahoo


Thursday's top stories and stocks with potential to move.


Stocks to watch for Thursday, April 17, 2008:

  • Continental Airlines (CAL) reported a 1Q loss of $80 million, or 81 cents a share, down from a profit of $22 million, or 21 cents a share a year ago. Excluding a gain on airplane sales, Continental says it lost 86 cents per share in the most recent quarter. The airline plans to reduce regional jet capacity, while also taking 14 737-300 planes out of service.
  • Freddie Mac (FRE) will announce an agreement with three major mortgage lenders - Wells Fargo (WFC), JPMorgan (JPM) and Citigroup (C) - in order to make funds available for large home loans. FRE will make 90-day agreements with the banks on how much it will pay for the large loans, or those between $417,000 and the new limit of $729,750. The pricing commitments will be based on benchmarks in the pricing of mortgage-backed securities, reported The Wall Street Journal.
  • International Business Machines (IBM) reported 1Q earnings of $2.32 billion, or $1.65 a share, up 26% from a year ago when earnings came in at $1.84 billion, or $1.21 a share. Revenue rose 11 percent to $24.5 billion. According to CFO Mark Loughridge, the numbers were helped by recurring contracts.
  • Merrill Lynch (MER) reported a 1Q loss of $1.96 billion, or $2.19 a share, down from earnings of $2.16 billion, or $2.26 a share a year ago. Revenue dropped 69 percent to $2.93 billion from $9.6 billion a year earlier. The company wrote down at least $6.5 billion.
  • SLM Corp. (SLM), or Sallie Mae, reported a 1Q net loss of $104 million, or 28 cents a share, down from a profit of $116 million, or 26 cents a share a year ago. The company set aside $137 million for losses on student loans.
  • Yahoo (YHOO) is close to a deal with Google (GOOG) that would outsource its search advertising after tests of the system had positive results. Yahoo could be gaining more leverage to fend off Microsoft's (MSFT) hostile $42 billion bid. If Yahoo decides to accept Microsoft's bid, it can easily pull out of the deal with Google.

Market Recap

  • Asian trading closed with the Hang Seng +1.59%, Nikkei +1.92%, Sensex +1.46%, Taiwan +0.27% and Shanghai -2.09%.
  • A quick check of European bourses has the CAC +0.52%, DAX +0.13%, FTSE +0.10%, ATX +1.00%, Swiss Mkt. -0.48% and Stockholm -0.61%.
  • Over in commodities, crude oil is unchanged at 114.90 while gold is trading higher +3.5 to 951.8 this morning.
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No positions in stocks mentioned.

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