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Spotlight Stocks: Ambac, General Motors, Merrill, UBS


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


Stocks to watch for Thursday, March 6, 2008:

  • Ambac (ABK) yesterday revealed a $1.5 billion recapitalization plan that spooked investors and sent the stock tumbling lower. The company surprised investors, who thought they'd see ABK receive a cash injection of up to $2 billion from a group of banks.
  • General Motors (GM) announced it will step up in the bailout of auto parts maker Delphi Corp., taking on as much as $2.83 billion in loans, up from $750 million. The company has been in bankruptcy for 30 months while unable to find investors for a $6.1 billion loan package.
  • H&R Block (HRB) reported a fiscal 3Q loss of $47.4 million, or 14 cents a share, less than the year ago loss of $60.3 million, or 18 cents a share. Revenue for the company rose 4.3 percent to $972.6 million
  • Merrill Lynch (MER) announced it will cut 650 jobs as it puts an end to its subprime mortgages through its First Franklin Financial Corp unit. Reuters reports the company expects to incur $60 million of charges related to First Franklin, mainly for severance payments and closing offices, with about half the amount in the first quarter. MER purchased the unit in December 2006 from National City Corp. (NCC) for $1.3 billion.
  • Motorola (MOT) saw billionaire Carl Icahn up his stake in the company from 5% to 6.3%. Icahn has been asking the company's board to break up the company by spinning off its mobile phone business. He has put forward a slate of four directors for election to the board.
  • UBS (UBS)shares dipped in Europe on report that analysts said they believed the company had sold its Alt-A investments U.S. bond manager Pimco for 70 cents to the dollar on a $24 billion portfolio. Also, it is believed the company will announce another huge writedown in the 1Q.

Market Recap

  • Asian trading closed in the green with the Hang Seng +0.99%, Nikkei +1.88%, Taiwan +2.06% and Shanghai +1.59%.
  • A quick check of European bourses finds the CAC -0.22%, DAX -0.33%, FTSE -0.24%, ATX-0.03%, Swiss Mkt. +0.13% and Stockholm -0.08%.
  • Crude oil is trading higher +1.02 to 105.1 and gold is also up +1.0 to 989.3 this morning.
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No positions in stocks mentioned.

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